Universal Insurance Holdings, Inc. Reports Another Record Quarter for Third Quarter 2015

Reports Highest Quarterly Net Income in Company History

Fort Lauderdale, FL, October 29, 2015 - Universal Insurance Holdings, Inc. (NYSE: UVE) (or the “Company”) today reported third quarter 2015 net income of $30.3 million, an increase of 42.0% ($9.0 million) over the same period in 2014 and a record in Company history.  Diluted earnings per share (EPS) were $0.84 for the third quarter of 2015, an increase of 37.7% ($0.23 per share) over the same quarter in 2014, and also represented a Company record.  This compares to net income of $21.3 million, or $0.61 per diluted share, for the same period in 2014.

“We are pleased to report our third consecutive quarter of achieving the highest quarterly net income in Company history,” said Sean P. Downes, Universal’s Chairman, President and Chief Executive Officer.  “Our results demonstrate, once again, the strength and diversity of our business model and continued execution on our strategic initiatives to write high quality, rate adequate business, expand our geographic footprint and drive enhanced value for shareholders.”  

“This quarter we announced that we received licenses to operate in Virginia, West Virginia and Alabama, expanding our presence to 15 states. Through the first nine-months of the year, our successful expansion outside of Florida has resulted in a growth in policy count of 35.6% outside Florida.  Supported by a peer leading independent agency force, Universal has grown from a leading provider of homeowners insurance in Florida to one of the leading writers of homeowners insurance nationally. This expansion and top-line growth in Florida, coupled with the improvements we have made to our reinsurance program is driving our strong bottom-line performance.”    

 Third-Quarter 2015 & Recent Highlights

·         Net earned premiums grew by $51.9 million, or 55.0%, to $146.2 million.

·         Total revenues increased by $53.5 million, or 51.7%, to $157.0 million.

·         Net income increased by $9.0 million, or 42.0%, to $30.3 million.

·         Diluted EPS grew by $0.23, or 37.7%, to $0.84 per share.

·         Paid dividends of $0.12 per share.

·         Announced $10 million share repurchase program.

·         Received Certificates of Authority from Virginia, West Virginia and Alabama.

 

Third-Quarter 2015 Results

 

Net income for the third quarter of 2015 of $30.3 million reflects an improvement across multiple measures including an increase in direct premiums written, net premiums written, net earned premiums, net investment income, commissions, policy fees, other revenues and income before taxes. The increase in net earned premiums reflects both growth in policies in force and lower reinsurance costs, including the elimination of quota share reinsurance effective June 2015.  

Stockholders’ equity reached an all-time high of $283.0 million as of September 30, 2015 compared to $218.9 million (pro-forma) as of December 31, 2014.

First Nine-Months 2015 Results

For the first nine months of 2015, the Company’s net income was $77.3 million, an increase of $25.3 million, or 48.7%, compared to the same period of 2014.  Diluted earnings per share for the first nine months of 2015 was $2.15, an increase of $0.67, or 45.3%, compared to the same period of 2014.

Share Repurchases

On September 2, 2015, the Company announced that its Board of Directors authorized a share repurchase program under which the Company may repurchase up to $10 million of its outstanding shares of common stock through December 31, 2016. As of September 30, 2015, the Company had repurchased 100,000 shares of its common stock at an average price of $25.84 per share, with $7.4 million remaining to be deployed. 

Cash Dividends

On August 31, 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 October 8, 2015 to shareholders of record on September 23, 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 third quarter 2015 financial results at approximately 5:00 pm Eastern on October 29, 2015. The presentation will be pre-recorded, and there will be no opportunity for live questions. The audio recording of this presentation will be available at www.universalinsuranceholdings.com until November 27, 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, Indiana, Pennsylvania and Minnesota.  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 Form 10-K for the year ended December 31, 2014 and Form 10-Q for the quarter ended September 30, 2015.

 

UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

September 30,

 

December 31,

ASSETS

 

2015

 

2014

Cash and cash equivalents

 

 $          201,774

 

 $       115,397

Restricted cash and cash equivalents

 

                 2,635

 

              2,635

Fixed maturities, at fair value

 

             417,769

 

          353,949

Equity securities, at fair value

 

               46,627

 

            19,642

Short-term investments, at fair value

 

               75,023

 

            49,990

Investment real estate, net

 

                 5,820

 

                   —

Prepaid reinsurance premiums

 

             113,240

 

          190,505

Reinsurance recoverable

 

               36,135

 

            55,187

Reinsurance receivable, net

 

                    166

 

              7,468

Premiums receivable, net

 

               56,617

 

            50,987

Other receivables

 

                 5,195

 

              2,763

Property and equipment, net

 

               26,302

 

            17,254

Deferred policy acquisition costs, net

 

               63,003

 

            25,660

Income taxes recoverable

 

               10,964

 

              5,675

Deferred income tax asset, net

 

               12,196

 

            11,850

Other assets

 

                 4,900

 

              2,812

          Total assets

 

 $       1,078,366

 

 $       911,774

 

 

 

 

 

LIABILITIES, CONTINGENTLY REDEEMABLE COMMON STOCK AND STOCKHOLDERS' EQUITY

 

 

 

 

LIABILITIES:

 

 

 

 

Unpaid losses and loss adjustment expenses

 

 $          101,059

 

 $       134,353

Unearned premiums

 

             463,651

 

          395,748

Advance premium

 

               26,029

 

            17,919

Accounts payable

 

                 1,582

 

              4,121

Book overdraft

 

                 3,728

 

              5,924

Payable for securities purchased

 

                 7,937

 

                   —

Reinsurance payable, net

 

             125,427

 

            66,066

Income taxes payable

 

                      —

 

              1,799

Dividends payable to shareholders

 

                 4,287

 

                   —

Other liabilities and accrued expenses

 

               37,388

 

            36,318

Long-term debt

 

               24,324

 

            30,610

          Total liabilities

 

             795,412

 

          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 - 10 and 12

 

 

 

 

     Outstanding shares - 10 and 12

 

 

 

 

     Minimum liquidation preference, $9.99 and $8.49 per share

 

 

 

 

Common stock, $.01 par value

 

                    456

 

                 448

     Authorized shares - 55,000

 

 

 

 

     Issued shares - 45,595 and 43,769

 

 

 

 

     Outstanding shares - 35,628 and 34,102

 

 

 

 

Treasury shares, at cost - 9,967 and 9,667

 

             (69,818)

 

(62,153)

Additional paid-in capital

 

               67,845

 

            40,987

Accumulated other comprehensive income (loss), net of taxes

 

(2,515)

 

            (1,835)

Retained earnings

 

             286,986

 

          222,469

          Total stockholders' equity

 

             282,954

 

          199,916

          Total liabilities, contingently redeemable
          common stock and stockholders' equity

 

 $       1,078,366

 

 $       911,774



UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

September 30,

 

 

2015

 

2014

PREMIUMS EARNED AND OTHER REVENUES

 

 

 

 

Direct premiums written

 

 $      222,572

 

 $      195,435

Ceded premiums written

 

          (71,150)

 

        (103,492)

Net premiums written

 

         151,422

 

           91,943

Change in net unearned premiums

 

            (5,269)

 

             2,345

     Premiums earned, net

 

         146,153

 

           94,288

     Net investment income (expense)

 

             1,307

 

                644

     Net realized gains (losses) on investments

 

                  11

 

                501

     Commission revenue

 

             4,115

 

             3,123

     Policy fees

 

             3,820

 

             3,416

     Other revenue

 

             1,637

 

             1,528

Total premiums earned and other revenues

 

         157,043

 

         103,500

OPERATING COSTS AND EXPENSES

 

 

 

 

     Losses and loss adjustment expenses

 

           53,854

 

           34,181

     General and administrative expenses

 

           55,289

 

           32,167

Total operating costs and expenses

 

         109,143

 

           66,348

INCOME BEFORE INCOME TAXES

 

           47,900

 

           37,152

Income tax expense

 

           17,602

 

           15,811

NET INCOME

 

 $        30,298

 

 $        21,341

Basic earnings per common share

 

 $            0.87

 

 $            0.64

Weighted average common shares outstanding - Basic

 

           34,911

 

           33,432

Fully diluted earnings per common share

 

 $            0.84

 

 $            0.61

Weighted average common shares outstanding - Diluted

 

           35,999

 

           34,812

Cash dividend declared per common share

 

 $            0.12

 

 $            0.10



UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

September 30,

 

 

2015

 

2014

PREMIUMS EARNED AND OTHER REVENUES

 

 

 

 

Direct premiums written

 

 $      684,147

 

 $      607,361

Ceded premiums written

 

        (185,578)

 

        (301,624)

Net premiums written

 

         498,569

 

         305,737

Change in net unearned premiums

 

        (145,168)

 

          (74,280)

     Premiums earned, net

 

         353,401

 

         231,457

     Net investment income (expense)

 

             3,376

 

             1,574

     Net realized gains (losses) on investments

 

                292

 

             5,353

     Commission revenue

 

           10,757

 

           10,882

     Policy fees

 

           12,003

 

           10,827

     Other revenue

 

             4,614

 

             4,701

Total premiums earned and other revenues

 

         384,443

 

         264,794

OPERATING COSTS AND EXPENSES

 

 

 

 

     Losses and loss adjustment expenses

 

         127,148

 

           88,685

     General and administrative expenses

 

         130,152

 

           85,431

Total operating costs and expenses

 

         257,300

 

         174,116

INCOME BEFORE INCOME TAXES

 

         127,143

 

           90,678

Income tax expense

 

           49,811

 

           38,662

NET INCOME

 

 $        77,332

 

 $        52,016

Basic earnings per common share

 

 $            2.22

 

 $            1.55

Weighted average common shares outstanding - Basic

 

           34,837

 

           33,607

Fully diluted earnings per common share

 

 $            2.15

 

 $            1.48

Weighted average common shares outstanding - Diluted

 

           35,918

 

           35,097

Cash dividend declared per common share

 

 $            0.36

 

 $            0.30



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