21st Century Holding Company Reports Record Earnings of $0.95 Per Share and Raises Guidance
PLANTATION, Fla.--Aug. 4, 2004--21st Century Holding Company , today reported record results for the quarter ended June 30, 2004 (see attached tables).For the quarter ended June 30, 2004, the Company reported record net income of $3,674,778, or $0.95 per share on 3,863,262 undiluted shares, versus net income of $2,113,934 or $0.69 per share on 3,063,105 undiluted shares in the same period last year. Income before provision for income tax expense increased by 82.6% from $3,148,996 in the second quarter of 2003 to $5,749,421 for the quarter ended June 30, 2004. On a diluted share basis, the Company reported record earnings of $0.91 per share, based on 4,055,944 average diluted shares outstanding.
Net premiums earned in the second quarter of 2004 surged 54.6% to $16.9 million from $10.9 million in the same period last year.
Total revenues for the second quarter of 2004 increased 37.7% to $20.6 million from $14.9 million in the same period last year.
Edward J. (Ted) Lawson, President & Chairman of the Board, said: "I am very pleased with our results for the second quarter. We had another solid quarter reflecting significant growth in premiums written from our property and general liability insurance lines."
Mr. Lawson continued, "Because we believe that these favorable trends will continue, I am now increasing guidance for calendar year ending December 31, 2004 from $3.25 - $3.75 per share to $3.70 - $3.80 per share on an undiluted basis."
The Company reiterates that its Board of Directors approved a 3-for-2 stock split. The stock split will be in the form of a stock dividend to be distributed on or about September 7, 2004, to shareholders of record at the close of business on August 23, 2004. Shareholders will receive three shares of common stock for every two shares of the Company's stock held on the record date.
The Company will hold an investor conference call at 4:30 PM (ET) on Wednesday, August 4, 2004. Mr. Richard A. Widdicombe, CEO, and Mr. Gordon Jennings, CFO, will discuss the financial results and review the outlook for the Company. Messrs. Widdicombe and Jennings invite interested parties to participate in the conference call. The dial in phone number has changed from the initial announcement on July 23, 2004. Listeners can access the conference call by dialing toll free 888-460-6235. Please call at least five minutes in advance to ensure that you are connected prior to the presentation.
About the Company
The Company, through its subsidiaries, underwrites standard and non-standard personal automobile insurance, flood insurance, general liability insurance, mobile home insurance and homeowners' property and casualty insurance in the State of Florida. The Company underwrites general liability and homeowners insurance as an admitted carrier in the State of Louisiana. The Company also operates as an approved (non-admitted) carrier in the State of Georgia underwriting general liability coverage for contractors, mercantile classes and special events. In addition, the Company has underwriting authority and processes claims for third party insurance companies. In addition to insurance services, the Company offers premium finance services to its insureds as well as insureds of certain third party insurance companies. Lastly, the Company offers other ancillary services including licensing of its tax preparation software products, electronic income tax filing, tax preparation, and automobile tag and title transfer services.
The Company offers single and master franchise opportunities to individuals through its subsidiaries, Fed USA Insurance/Financial Services and EXPRESSTAX(R) Franchise Corporation.
Safe harbor statements under the Private Securities Litigation Reform Act of 1995: Statements in this press release that are not historical fact are forward-looking statements that are subject to certain risks and uncertainties that could cause actual events and results to differ materially from those discussed herein. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," or "continue" or the other negative variations thereof or comparable terminology are intended to identify forward-looking statements. The risks and uncertainties include, without limitation, uncertainties related to estimates, assumptions and projections generally; inflation and other changes in economic conditions (including changes in interest rates and financial markets); pricing competition and other initiatives by competitors; ability to obtain regulatory approval for applications to underwrite in an additional jurisdiction or for requested rate changes, and the timing thereof; legislative and regulatory developments; the outcome of litigation pending against the Company and any settlement thereof; risks related to the nature of the Company's business; dependence on investment income and the composition of the Company's investment portfolio; the adequacy of the Company's liability for loss and loss adjustment expense; insurance agents; claims experience; limited experience in the insurance industry; ratings by industry services; catastrophe losses; reliance on key personnel; weather conditions (including the severity and frequency of storms, hurricanes, tornadoes and hail); changes in driving patterns and loss trends; acts of war and terrorist activities; court decisions and trends in litigation, and health care and auto repair costs; and other matters described from time to time by the Company in releases and publications, and in periodic reports and other documents filed with the United States Securities and Exchange Commission. In addition, investors should be aware that generally accepted accounting principles prescribe when a company may reserve for particular risks, including litigation exposures. Accordingly, results for a given reporting period could be significantly affected if and when a reserve is established for a major contingency. Reported results may therefore appear to be volatile in certain accounting periods.
21st CENTURY HOLDING COMPANY
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
Revenue: 2004 2003 2004 2003
------------ ------------ ------------ ------------
Gross premiums
written $31,810,045 $17,578,594 $49,627,771 $34,190,574
Gross premiums
ceded 217,036 (5,803,990) 904,044 (10,202,865)
------------ ------------ ------------ ------------
Net premiums
written 32,027,081 11,774,604 50,531,815 23,987,709
Increase
(decrease) in
prepaid
reinsurance
premiums (2,327,592) (574,778) (6,095,744) (2,517,671)
Decrease
(increase) in
unearned
premiums (12,770,311) (250,825) (14,499,217) (64,093)
------------ ------------ ------------ ------------
Net change in
prepaid
reinsurance
premiums
and unearned
premiums (15,097,903) (825,603) (20,594,961) (2,581,764)
------------ ------------ ------------ ------------
Net premiums
earned 16,929,178 10,949,001 29,936,854 21,405,945
Commission income 801,435 315,478 1,308,869 748,517
Finance revenue 949,164 1,135,203 2,039,984 2,263,029
Managing general
agent fees 539,822 621,316 987,180 1,253,863
Net investment
income 773,921 350,465 1,302,045 715,670
Net realized
investments
gains (losses) 58,508 1,068,818 180,427 1,419,700
Other income 521,240 504,498 2,390,210 2,000,065
------------ ------------ ------------ ------------
Total revenue 20,573,268 14,944,779 38,145,569 29,806,789
Expenses:
Loss and loss
adjustment
expenses 7,618,159 7,493,747 14,092,992 14,281,456
Operating and
underwriting
expenses 3,108,601 2,713,391 6,450,666 5,339,257
Salaries and
wages 2,200,806 2,211,484 4,640,330 4,357,819
Interest expense 213,841 54,472 444,922 109,884
Amortization of
deferred
acquisition
costs, net 1,682,440 (677,311) 2,124,168 (1,037,492)
------------ ------------ ------------ ------------
Total expenses 14,823,847 11,795,783 27,753,078 23,050,924
Income before
provision for
income tax expense 5,749,421 3,148,996 10,392,491 6,755,865
Provision for
income tax expense 2,074,643 1,035,062 3,793,705 2,333,530
------------ ------------ ------------ ------------
Net income $3,674,778 $2,113,934 $6,598,786 $4,422,335
============ ============ ============ ============
Basic net income
per share $0.95 $0.69 $1.73 $1.46
============ ============ ============ ============
Weighted average
number of common
shares outstanding 3,863,262 3,063,105 3,812,069 3,034,220
============ ============ ============ ============
Fully diluted net
income per share $0.91 $0.66 $1.63 $1.41
============ ============ ============ ============
Weighted average
number of common
shares outstanding
(assuming
dilution) 4,055,944 3,194,747 4,058,732 3,125,479
============ ============ ============ ============
Dividends declared
per share $0.12 $0.09 $0.24 $0.16
============ ============ ============ ============
21st CENTURY HOLDING COMPANY
Balance Sheet Data
(Unaudited)
Period Ending
06/30/04 12/31/03
------------- -------------
Total Cash & Investments $80,711,041 $54,261,019
Total Assets $124,344,111 $104,083,912
Unpaid Loss and Loss Adjustment Expense $21,185,177 $25,127,679
Total Liabilities $84,122,682 $72,087,535
Total Shareholders' Equity $40,221,431 $32,046,376
Premium Breakout
----------------
Line of Business 06/30/04 06/30/03
---------------- ------------- -------------
Automobile 23.7% 75.9%
Homeowners 61.7% 21.2%
General Liability 12.8% --%
Mobile Home Owners 1.8% 2.9%
------------- -------------
Gross Written Premiums 100.0% 100.0%