Universal Insurance Holdings, Inc. Reports Record Fourth Quarter and Full-Year 2015 Financial Results

Achieved Highest Fourth Quarter and Full-Year Net Income and EPS in Company History

 

Fort Lauderdale, FL, February 24, 2016 - Universal Insurance Holdings, Inc. (NYSE: UVE) today reported record fourth quarter net income in 2015 of $29.2 million, an increase of 39.0%, or $8.2 million, over the same period in 2014.  Diluted earnings per share (EPS) were $0.82 for the fourth quarter of 2015, an increase of 39.0%, or $0.23 per share, over the same quarter in 2014.  This compares to net income of $21.0 million, or $0.59 per diluted share, for the same period in 2014.

 

For the full year 2015, the Company reported record net income of $106.5 million, an increase of $33.5 million, or 45.9% compared to net income of $73.0 million for 2014.  For earnings per share on a diluted basis, the Company reported $2.97 per share in 2015, as compared to $2.08 per share for 2014.

 

“I am very pleased with our outstanding fourth quarter results, concluding a year in which we delivered the highest earned premiums, total revenues, net income and diluted EPS in Company history,” said Sean P. Downes, Universal’s Chairman, President and Chief Executive Officer.  “Our track record of delivering consistent, organically generated growth is a testament to the strength of our strategy and business model. We continued to maintain focus on writing high quality, rate-adequate business, investing in our vertically integrated business model, improving our claims handling and customer service and building strong relationships with our independent agency force.  We also continued to gain traction throughout 2015 on our geographic expansion efforts, concluding the year with a presence in 16 states.  As a result of our efforts, our total insured value in states outside of Florida reached 16% as of the end of 2015, and policy count outside of Florida increased by 49%. 

 

“Our record performance reflects the diligence and hard work of our employees and independent agents who form the cornerstone of our continued success. Looking ahead, we are better positioned now than at any other time in our history from an operational and financial standpoint, and we will continue to leverage our financial strength to return capital to our shareholders through dividends and share buybacks.  As we enter 2016, our entire team is aligned on our goal of driving profitable growth and increasing shareholder value.” 

 

Fourth-Quarter 2015 & Recent Highlights

 

·         Net earned premiums grew by $55.2 million, or 57.8%, to $150.6 million.

·         Total revenues increased by $57.6 million, or 55.1%, to $162.1 million.

·         Net income increased by $8.2 million, or 39.0%, to $29.2 million.

·         Diluted EPS grew by $0.23, or 39.0%, to $0.82 per share.

·         Paid dividends of $0.27 per share.

·         Received Certificate of Authority from New Hampshire.

 

Fourth-Quarter 2015 Results

 

Net income for the fourth quarter of 2015 of $29.2 million reflects an improvement across multiple measures including an increase in direct premiums written, net premiums written, net earned premiums, net investment income, realized gains, commissions, policy fees, 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 $293.1 million as of December 31, 2015 compared to $218.9 million pro-forma stockholders’ equity as of December 31, 2014.

 

Full-Year 2015 Results

 

For the full year of 2015, the Company’s net income increased by $33.5 million or 45.9%, compared to 2014. Earned premiums, total revenues, net income and diluted EPS were higher than any other year in the Company’s history.

 

Diluted earnings per share for the full year of 2015 was $2.97, an increase of $0.89, or 42.8%, compared to 2014.

 

Share Repurchases

 

On November 18, 2015, the Company announced the completion of a $10 million share repurchase program with 363,100 shares repurchased at an average cost of $27.58 per share on the open market pursuant to the Board authorized share repurchase program announced on September 2, 2015.

 

On November 19, 2015, the Company announced that its Board of Directors authorized an additional share repurchase program under which the Company may repurchase up to $10 million of its outstanding shares of common stock through December 31, 2016. The Company has repurchased 185,000 shares of its common stock at an average cost of $19.24 per share, with $6.4 million remaining to be deployed. 

 

Cash Dividends

 

On November 5, 2015, the Company announced that its Board of Directors declared a cash dividend of $0.27 per share of common stock which was paid on December 10, 2015 to shareholders of record on December 1, 2015. The $0.27 per share dividend includes the expected $0.12 per share fourth quarter dividend, in line with the dividends for the first three quarters of 2015, and an additional special dividend of $0.15 per share.

 

On January 14, 2016, the Company announced that its Board of Directors had declared an increased cash dividend of $0.14 per share of common stock up $0.02 from the $0.12 per share paid the past four quarters. Payment will be made on March 2, 2016 to shareholders of record on February 18, 2016.  The Company also announced that it expects to declare and pay a proposed regular quarterly dividend during fiscal year 2016 of $0.14 per share of the Company’s common stock.

 

Financial Results Presentation

 

The Company will make available an audio recording of a presentation discussing its fourth quarter 2015 financial results at approximately 5:00 pm Eastern on February 24, 2016. 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 March 24, 2016.

 

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, 2015.

 

 

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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

December 31,

 

December 31,

ASSETS

 

2015

 

2014

Cash and cash equivalents

 

 $          197,014

 

 $       115,397

Restricted cash and cash equivalents

 

                 2,635

 

              2,635

Fixed maturities, at fair value

 

             416,083

 

          353,949

Equity securities, at fair value

 

               42,214

 

            19,642

Short-term investments, at fair value

 

               25,021

 

            49,990

Investment real estate, net

 

                 6,117

 

                   —

Prepaid reinsurance premiums

 

             114,673

 

          190,505

Reinsurance recoverable

 

               22,853

 

            55,187

Reinsurance receivable, net

 

                    353

 

              7,468

Premiums receivable, net

 

               50,980

 

            50,987

Other receivables

 

                 4,626

 

              2,763

Property and equipment, net

 

               27,065

 

            17,254

Deferred policy acquisition costs, net

 

               60,019

 

            25,660

Income taxes recoverable

 

                 5,420

 

              5,675

Deferred income tax asset, net

 

               13,912

 

            11,850

Other assets

 

                 4,563

 

              2,812

          Total assets

 

 $          993,548

 

 $       911,774

LIABILITIES, CONTINGENTLY REDEEMABLE COMMON STOCK AND STOCKHOLDERS' EQUITY

 

 

 

 

LIABILITIES:

 

 

 

 

Unpaid losses and loss adjustment expenses

 

 $            98,840

 

 $       134,353

Unearned premiums

 

             442,366

 

          395,748

Advance premium

 

               24,813

 

            17,919

Accounts payable

 

                    378

 

              4,121

Book overdraft

 

                      —

 

              5,924

Reinsurance payable, net

 

               73,585

 

            66,066

Income taxes payable

 

                      —

 

              1,799

Other liabilities and accrued expenses

 

               36,424

 

            36,318

Long-term debt

 

               24,050

 

            30,610

          Total liabilities

 

             700,456

 

          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

 

                    455

 

                 448

Authorized shares - 55,000

 

 

 

 

Issued shares - 45,525 and 43,769

 

 

 

 

Outstanding shares - 35,110 and 34,102

 

 

 

 

Treasury shares, at cost - 10,415 and 9,667

 

             (80,802)

 

          (62,153)

Additional paid-in capital

 

               70,789

 

            40,987

Accumulated other comprehensive income (loss), net of taxes

 

               (4,006)

 

            (1,835)

Retained earnings

 

             306,656

 

          222,469

          Total stockholders' equity

 

             293,092

 

          199,916

          Total liabilities, contingently redeemable
          common stock and stockholders' equity

 

 $          993,548

 

 $       911,774




UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

December 31,

 

 

2015

 

2014

PREMIUMS EARNED AND OTHER REVENUES

 

 

 

 

Direct premiums written

 

$           199,261

 

$        182,216

Ceded premiums written

 

          (71,381)

 

          (98,106)

Net premiums written

 

         127,880

 

           84,110

Change in net unearned premium

 

           22,718

 

           11,310

Premiums earned, net

 

         150,598

 

           95,420

Net investment income (expense)

 

             1,779

 

                801

Net realized gains (losses) on investments

 

                768

 

                274

Commission revenue

 

             4,113

 

             3,323

Policy fees

 

             3,436

 

             3,155

Other revenue

 

             1,406

 

             1,509

Total premiums earned and other revenues

 

         162,100

 

         104,482

OPERATING COSTS AND EXPENSES

 

 

 

 

Losses and loss adjustment expenses

 

           60,591

 

           34,590

General and administrative expenses

 

           53,629

 

           32,966

Total operating costs and expenses

 

         114,220

 

           67,556

INCOME BEFORE INCOME TAXES

 

           47,880

 

           36,926

Income tax expense

 

           18,728

 

           15,954

NET INCOME

 

$             29,152

 

$          20,972

Basic earnings per common share

 

$                 0.84

 

$              0.63

Weighted average common shares outstanding - Basic

 

           34,567

 

           33,457

Fully diluted earnings per common share

 

$                 0.82

 

$              0.59

Weighted average common shares outstanding - Diluted

 

           35,747

 

           35,271

Cash dividend declared per common share

 

$                 0.27

 

$              0.25

 

 


UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

December 31,

 

 

2015

 

2014

PREMIUMS EARNED AND OTHER REVENUES

 

 

 

 

Direct premiums written

 

$         883,409

 

$      789,577

Ceded premiums written

 

        (256,961)

 

        (399,730)

Net premiums written

 

         626,448

 

         389,847

Change in net unearned premium

 

        (122,449)

 

          (62,970)

Premiums earned, net

 

         503,999

 

         326,877

Net investment income (expense)

 

             5,155

 

             2,375

Net realized gains (losses) on investments

 

             1,060

 

             5,627

Commission revenue

 

           14,870

 

           14,205

Policy fees

 

           15,440

 

           13,982

Other revenue

 

             6,020

 

             6,210

Total premiums earned and other revenues

 

         546,544

 

         369,276

OPERATING COSTS AND EXPENSES

 

 

 

 

Losses and loss adjustment expenses

 

         187,739

 

         123,275

General and administrative expenses

 

         183,782

 

         118,397

Total operating costs and expenses

 

         371,521

 

         241,672

INCOME BEFORE INCOME TAXES

 

         175,023

 

         127,604

Income tax expense

 

           68,539

 

           54,616

NET INCOME

 

$         106,484

 

$           72,988

Basic earnings per common share

 

$               3.06

 

$               2.17

Weighted average common shares outstanding - Basic

 

           34,799

 

           33,569

Fully diluted earnings per common share

 

$               2.97

 

$               2.08

Weighted average common shares outstanding - Diluted

 

           35,884

 

           35,150

Cash dividend declared per common share

 

$               0.63

 

$               0.55



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