Universal Insurance Holdings, Inc. Reports Record First Quarter 2015 Financial Results

Achieved Highest Quarterly Net Income and Diluted EPS in Company History

Fort Lauderdale, FL, April 30, 2015 - Universal Insurance Holdings, Inc. (NYSE: UVE) (or the “Company”) today reported record net income of $22.3 million and diluted earnings per share (EPS) of $0.62, an increase of $8.8 million and $0.24, respectively, for the first quarter of 2015.  This compares to net income of $13.5 million, or $0.38 per diluted share, for the same period in 2014.

 

“We are pleased to report a strong start to 2015, as we delivered the highest quarterly net income and diluted EPS in the Company’s history,” said Sean P. Downes, the Company’s Chairman, President and Chief Executive Officer. “We continue to demonstrate consistent execution on our key strategic priorities, including a focus on driving organic growth, while writing high quality, rate adequate business. The significant growth in our net earned premiums during the quarter was driven by our growth initiatives, improving reinsurance economics, as well as a reduction in the cession rate of the Company’s quota share reinsurance contracts.  Looking ahead in 2015, we remain confident in our ability to drive profitable organic growth, maintain our healthy financial position, continue our geographic expansion efforts and deliver increasing returns to shareholders.”  

First-Quarter 2015 & Recent Highlights

·         Net earned premiums grew by $30.6 million, or 47.9%, to $94.4 million.

·         Total revenues increased by $29.5 million, or 39.7%, to $103.8 million.

·         Net income increased by $8.8 million, or 64.8%, to $22.3 million.

·         Diluted EPS grew by $0.24, or 63.2%, to $0.62 per share.

·         Paid dividends of $0.12 per share.

·         Acquired assets from Aplin Peer & Associates Inc., a privately held independent claims adjusting company, in February 2015.

First-Quarter 2015 Results

Net income for the first quarter of 2015 of $22.3 million reflects an improvement across multiple measures including an increase in direct premiums written, net premiums written, net earned premiums, policy fees, net investment income and total revenues. Operating expenses were lower as a percentage of net earned premiums and total revenues compared to the first quarter of 2014. 

The increase in net earned premiums reflects both growth in policies in force and the reduction in

 

 

 

the cession rate of the Company’s quota share reinsurance contracts effective June 2014. The decrease in operating expenses as a percentage of total revenues is due primarily to operational initiatives to settle claims and changes in the structure of our reinsurance program effective June 2014, including the reduction in our quota share cession rate.

At March 31, 2015, stockholders’ equity reached an all-time high at $241.9 million compared to pro-forma stockholders’ equity of $218.9 million at December 31, 2014, reflecting year-to-date net income of $22.3 million and dividend payments of $4.2 million.

Cash Dividends

On January 13, 2015, the Company announced that its board of directors declared a cash dividend of $0.12 per share of common stock, which was paid on March 2, 2015 to shareholders of record on February 18, 2015.

On April 13, 2015, the Company announced that its board of directors declared a cash dividend of $0.12 per share of common stock to be paid on July 2, 2015 to shareholders of record on June 18, 2015.

If declared and paid as intended, the annual aggregate dividend in 2015 will be $0.48 for each common share.

Financial Results Presentation

The Company will make available an audio recording of a presentation discussing its first quarter 2015 financial results at approximately 5:00 pm Eastern on April 30, 2015. The presentation will be pre-recorded and there will be no opportunity for live questions. The audio recording will be available at www.universalinsuranceholdings.com until June 1, 2015.

 

About Universal Insurance Holdings, Inc.

Universal Insurance Holdings, Inc., with its wholly-owned subsidiaries, is a vertically integrated insurance holding company performing all aspects of insurance underwriting, distribution and claims. Universal Property & Casualty Insurance Company (UPCIC), a wholly-owned subsidiary of the Company, is one of the leading writers of homeowners insurance in Florida and is now fully licensed and has commenced its operations in North Carolina, South Carolina, Hawaii, Georgia,

Massachusetts, Maryland, Delaware and Indiana. American Platinum Property and Casualty

Insurance Company, also a wholly-owned subsidiary, currently writes homeowners multi-peril insurance on Florida homes valued in excess of $1 million, which are limits and coverages currently not targeted through its affiliate UPCIC. For additional information on the Company, please visit our investor relations website at www.universalinsuranceholdings.com.

 

 

 

 

 

 

Forward-Looking Statements and Risk Factors

This press release may contain “forward-looking statements" within the meaning of the Private

Securities Litigation Reform Act of 1995. The words "believe," "expect," "anticipate," and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Such statements may include commentary on plans, products and lines of business, marketing arrangements, reinsurance programs and other business developments and assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future results could differ materially from those described and the Company undertakes no obligation to correct or update any forward-looking statements. For further information regarding risk factors that could affect the Company's operations and future results, refer to the Company's reports filed with the Securities and Exchange Commission, including the Form 10-K for the year ended December 31, 2014 and the Form 10-Q for the quarter ended March 31, 2015.

 

 


 

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

March 31,

 

December 31,

ASSETS

 

2015

 

2014

Cash and cash equivalents

 

 $       182,311

 

 $       115,397

Restricted cash and cash equivalents

 

                 2,635

 

              2,635

Fixed maturities, at fair value

 

             347,912

 

          353,949

Equity securities, at fair value

 

               21,396

 

            19,642

Short-term investments, at fair value

 

               37,506

 

            49,990

Prepaid reinsurance premiums

 

             194,691

 

          190,505

Reinsurance recoverable

 

               51,366

 

            55,187

Reinsurance receivable, net

 

                 4,297

 

              7,468

Premiums receivable, net

 

               55,033

 

            50,987

Other receivables

 

                 3,284

 

              2,763

Property and equipment, net

 

               21,153

 

            17,254

Deferred policy acquisition costs, net

 

               26,195

 

            25,660

Income taxes recoverable

 

                      —

 

              5,675

Deferred income tax asset, net

 

               11,717

 

            11,850

Other assets

 

                 7,661

 

              2,812

          Total assets

 

 $       967,157

 

 $       911,774

LIABILITIES, CONTINGENTLY REDEEMABLE COMMON STOCK AND STOCKHOLDERS' EQUITY

 

 

 

 

LIABILITIES:

 

 

 

 

Unpaid losses and loss adjustment expenses

 

 $       125,161

 

 $       134,353

Unearned premiums

 

             410,683

 

          395,748

Advance premium

 

               22,185

 

            17,919

Accounts payable

 

                 2,472

 

              4,121

Book overdraft

 

7,478

 

              5,924

Reinsurance payable, net

 

91,258

66,066

Income taxes payable

 

6,681

1,799

Other liabilities and accrued expenses

 

27,505

36,318

Long-term debt

 

31,813

30,610

          Total liabilities

 

725,236

692,858

Contingently redeemable common stock

 

19,000

Issued shares - 0 and 1,000

 

 

 

 

Outstanding shares - 0 and 1,000

 

 

 

 

STOCKHOLDERS' EQUITY:

 

 

 

 

Cumulative convertible preferred stock, $.01 par value

 

                      —

 

                   —

     Authorized shares - 1,000

 

 

 

 

     Issued shares - 12 and 12

 

 

 

 

     Outstanding shares - 12 and 12

 

 

 

 

     Minimum liquidation preference, $8.49 and $8.49 per share

 

 

 

 

Common stock, $.01 par value

 

                    452

 

                 448

     Authorized shares - 55,000

 

 

 

 

     Issued shares - 45,224 and 43,769

 

 

 

 

     Outstanding shares - 35,557 and 34,102

 

 

 

 

Treasury shares, at cost - 9,667 and 9,667

 

             (62,153)

 

          (62,153)

Additional paid-in capital

 

               63,700

 

            40,987

Accumulated other comprehensive income (loss), net of taxes

 

                  (638)

 

            (1,835)

Retained earnings

 

             240,560

 

          222,469

          Total stockholders' equity

 

             241,921

 

          199,916

          Total liabilities, contingently redeemable
          common stock and stockholders' equity

 

 $       967,157

 

 $       911,774

 


 

 

 

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31,

 

 

2015

 

2014

PREMIUMS EARNED AND OTHER REVENUES

 

 

 

 

Direct premiums written

 

 $      211,605

 

 $      191,917

Ceded premiums written

 

        (106,497)

 

        (121,649)

Net premiums written

 

         105,108

 

           70,268

Change in net unearned premium

 

          (10,748)

 

            (6,461)

     Premiums earned, net

 

           94,360

 

           63,807

     Net investment income (expense)

 

                862

 

                518

     Net realized gains (losses) on investments

 

                171

 

                902

     Commission revenue

 

             3,168

 

             4,089

     Policy fees

 

             3,832

 

             3,512

     Other revenue

 

             1,417

 

             1,477

Total premiums earned and other revenues

 

         103,810

 

           74,305

OPERATING COSTS AND EXPENSES

 

 

 

 

     Losses and loss adjustment expenses

 

           33,590

 

           26,825

     General and administrative expenses

 

           32,197

 

           24,363

Total operating costs and expenses

 

           65,787

 

           51,188

INCOME BEFORE INCOME TAXES

 

           38,023

 

           23,117

Income tax expense

 

           15,693

 

             9,568

NET INCOME

 

 $        22,330

 

 $        13,549

Basic earnings per common share

 

 $            0.65

 

 $            0.41

Weighted average common shares outstanding - Basic

 

           34,578

 

           33,422

Fully diluted earnings per common share

 

 $            0.62

 

 $            0.38

Weighted average common shares outstanding - Diluted

 

           36,081

 

           35,641

Cash dividend declared per common share

 

 $            0.12

 

 $            0.10



Investor Contact:
Andy Brimmer / Mahmoud Siddig
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449