Message #23 From:
NewsBot Date: November 10, 2006 02:02:00 PM
ASAM News AssuranceAmerica Corporation Announces September 2006 Results Showing Continuing Profits
ATLANTA--(BUSINESS WIRE)--Atlanta-based ASSURANCEAMERICA CORPORATION (OTC BB: ASAM), today
announced its unaudited financial results for September 2006 and the
nine and three months ended September 30, 2006.
Revenues for the month of September 2006 increased 23% to $4.3 million,
compared to $3.5 million for the same month of 2005. Revenues for the
three-month period ended September 30, 2006 increased 32% to $13.1
million, compared with $9.9 million for the same period of 2005.
Revenues for the nine months of 2006 increased 60 to $41.5 million,
compared with $26.0 million for the same period of 2005.
Pretax earnings decreased 70% for the month of September 2006 to
$183,000, compared to $602,000 in September 2005. Prior year pretax
earnings included a quarter-end adjustment of approximately $200,000
which, by comparison with the current year, is now recorded on a monthly
basis. The Company increased pretax earnings 10% for the three-month
period ended September 30, 2006 to $0.9 million, compared with $0.8
million in the same period last year. The Company increased pretax
earnings 39% for the first nine months of 2006 to $2.6 million, compared
with $1.8 million in the same period last year.
Net income for the month of September decreased 62% to $230,000,
compared with $602,000 in the same period of 2005. Prior year net income
included a quarter-end adjustment of approximately $200,000 which, by
comparison with the current year, is now recorded on a monthly basis.
Net income for the three-month period ended September 30, 2006 increased
2% to $783,000, compared with $772,000 for the same period of 2005. Net
income for the first nine months increased 6% to $1.9 million, compared
with $1.8 million for the same period of 2005. Net income in 2005
reflected no provision for income taxes as the Company was able to fully
utilize net operating tax loss carry forwards.
Gross Premiums Produced (a non-GAAP financial measure), which includes
gross written premium in the Carrier/MGA's underwriting operations plus
premiums for policies sold in the retail Agency subsidiary, increased
11% from $9.9 million in September 2005 to $11.0 million in September
2006. Gross Premiums Produced increased 18% from $28.8 million for the
three months ended September 30, 2005 to $34.2 million for the same
period of 2006. Gross Premiums Produced increased 42% from $81.9 million
for the nine months ended September 30, 2005 to $116.1 million for the
same period of 2006. Gross Premiums Produced is used by management as
the primary measure of the underlying growth of the Company's revenue
streams from period to period.
In announcing September's and year-to-date results, Lawrence (Bud)
Stumbaugh, President and CEO of AssuranceAmerica Corporation said, “Recent
rate increases we filed, and that were approved in all the states where
our Carrier/MGA writes, somewhat slowed our revenue growth. That’s
not all bad as we don’t ever want to be a
commodity bought on the basis of price alone. We’ve
also added some expenses to strengthen our foundation so we can expand
into other states at the end of this year and early into 2007. This
negatively impacted the profit increases we are used to seeing each
month. Nonetheless, we take great pride in 2006 year to date pre-tax
earnings of $2.6 million when the same nine months a year earlier
generated $1.8 million. We are headed for our best year ever and are
making the right investments to enable us to improve in future periods.”
AssuranceAmerica focuses on the non-standard automobile insurance
marketplace, primarily in Alabama, Florida, Georgia, South Carolina, and
Texas. Its principal operating subsidiaries are TrustWay Insurance
Agencies, LLC ("Agency"), which sells personal automobile insurance
policies through its 45 retail agencies, AssuranceAmerica Managing
General Agency, LLC ("MGA"), and AssuranceAmerica Insurance Company
("Carrier").
This press release includes statements that may constitute
"forward-looking" statements. These statements are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements inherently involve risks and
uncertainties that could cause actual results to differ materially from
the forward-looking statements, as discussed in the Company's filings
with the U.S. Securities Exchange Commission (SEC). Historical results
are not indicative of future performance.
ASSURANCEAMERICA CORPORATION
(Unaudited) CONSOLIDATED BALANCE SHEETS
September 30, 2006 and December 31, 2005
September 30, 2006
December 31, 2005
Assets
Cash and cash equivalents
$ 5,470,746
$ 8,668,827
Short term investments and other invested assets
900,350
120,000
Long term investments, available for sale at fair value
13,528,382
8,419,835
Investment income due and accrued
178,969
81,150
Receivable from insured
19,100,835
13,821,477
Reinsurance recoverable (including $4,731,970 and $4,213,187 on paid
losses)
21,059,684
14,790,099
Prepaid reinsurance premiums
14,730,805
11,211,270
Deferred acquisition costs
889,956
798,539
Property and equipment (net of accumulated depreciation of
$2,013,797 and $1,606,200)
2,112,994
1,400,667
Other receivables
2,819,299
1,674,184
Prepaid expenses
416,712
161,415
Intangibles (net of accumulated amortization of $1,700,818 and
$1,398,244)
11,028,971
7,359,850
Security deposits
99,961
75,072
Prepaid income taxes
172,030
—
Deferred tax assets
372,615
—
Other assets
375,703
378,758
Total assets
$ 93,258,012
$ 68,961,143
Liabilities and Stockholders’ Equity
Accounts payable and accrued expenses
$ 5,815,860
$ 4,802,223
Unearned premium
21,691,636
16,574,473
Unpaid losses and loss adjustment expenses
23,325,306
15,109,874
Reinsurance payable
16,925,355
10,238,081
Provisional commission reserve
2,033,347
1,704,379
Notes payable
6,113,464
5,568,535
Dividends payable
84,000
—
Debentures payable
4,805,185
4,800,185
Capital lease obligations
286,157
220,155
Total liabilities
81,080,310
59,017,905
Stockholders’ equity
Common stock, .01 par value (authorized 120,000,000 and 80,000,000;
outstanding 56,072,971 and 51,167,321)
560,730
511,673
Preferred stock, .01 par value (authorized 5,000,000, outstanding
840,000 and 1,266,000)
8,400
12,660
Surplus-paid in
16,230,513
15,678,015
Accumulated deficit
(4,652,661)
(6,259,110)
Accumulated other comprehensive (loss) income:
Net unrealized (loss) gain on investment securities
30,720
—
Total stockholders’ equity
12,177,702
9,943,238
Total liabilities and stockholders’
equity
$ 93,258,012
$ 68,961,143
ASSURANCEAMERICA CORPORATION
(Unaudited) CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended September 30, 2006 and 2005
Three Months
Nine Months
2006
2005
2006
2005
Revenue:
Gross premiums written
$ 18,334,710
$ 15,186,281
$ 53,839,302
$ 35,763,663
Gross premiums ceded
(12,530,148)
(10,258,321)
(36,609,876)
(24,279,794)
Net premiums written
5,804,562
4,927,960
17,229,426
11,483,869
Decrease (increase) in unearned premiums, net of prepaid reinsurance
premiums
