Motor Club of America Announces First Quarter Results
16 May 2000
Motor Club of America Announces First Quarter ResultsPARAMUS, N.J., May 15 Motor Club of America ("Company") announced today its first quarter results for the period ended March 31, 2000. Revenues were $19,698,432 as compared to $14,314,773 for the same period in 1999. Net income for the three month period was $249,512, or $.12 basic and diluted net income per share, as compared to $985,621 or $.47 (basic) and $.46 (diluted) per share in 1999. The Company acquired North East Insurance Company ("North East") and Mountain Valley Indemnity Company ("Mountain Valley") on September 24, 1999 and March 1, 2000, respectively. First quarter 2000 results includes non- recurring expenses related to the Mountain Valley acquisition of $267,804 or $.13 basic net income per share, net of taxes. Absent these non-recurring charges, net income for the three months ended March 31, 2000 was $517,316 or $.25 basic net income per share. Revenues and net income (loss) for North East (including its subsidiaries) and Mountain Valley for the three months ended March 31, 2000 were as follows: Revenues Net Income (Loss) North East $4,563,478 ($127,076) Mountain Valley 1,466,823 4,759 Total $6,030,301 ($122,317) Archer McWhorter, Chairman of the Board of the Company, said "The first quarter saw continued outstanding results at our Preserver unit, where earnings increased 9% over last year, with personal auto results in New Jersey improving over the second half of 1999. Although North East lost some money in the first quarter, this is typical of historical first quarter results that are affected by winter weather in Maine." Motor Club of America owns and operates five regionally focused property and casualty insurance companies, including companies that specialize in small and mid-sized insurance through the Preserver Insurance Group. The Preserver Insurance Group consists of Preserver Insurance Company, which writes small commercial and homeowners insurance in New Jersey and Mountain Valley Indemnity Company, which writes small and mid-sized commercial insurance in New England and New York. The Preserver Insurance Group is rated B++ (Very Good) by A.M. Best Company. American Colonial Insurance Company plans to commence operations in New York in the second quarter 2000, writing commercial lines in tandem with Mountain Valley. Motor Club of America And Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) For the Three Months Ended March 31, 2000 March 31,1999 Revenues: Insurance premiums (net of premiums ceded totaling $2,350,518 (2000) and $1,818,897 (1999)) $18,259,427 $13,084,199 Net investment income 1,399,286 1,192,532 Other revenues 39,719 38,042 Total revenues 19,698,432 14,314,773 Losses and Expenses: Insurance losses and loss expenses incurred (net of reinsurance recoveries totaling $2,684,701 (2000) and $883,621 (1999)) 12,482,005 8,882,943 Amortization of deferred policy acquisition costs 5,195,884 3,832,123 Other operating expenses 1,398,042 338,669 Interest expense 323,607 52,969 Amortization of goodwill 21,174 -- Total losses and expenses 19,420,712 13,106,674 Income before Federal income taxes 277,720 1,208,099 Provision for Federal income taxes: current 14,710 28,070 deferred 13,498 194,408 Total provision for Federal income taxes 28,208 222,478 Net income $249,512 $985,621 Net Income per common share: Basic $.12 $.47 Diluted $.12 $.46 Weighted average common and potential common shares outstanding: Basic 2,124,387 2,116,429 Diluted 2,124,387 2,127,745 Key Financial Statistics: Book value per share $13.07 $13.26 Loss ratio (GAAP basis) 68.4% 67.9% Expense ratio (GAAP basis) 36.1% 32.3% Combined ratio (GAAP basis) 104.5% 100.2% Net premium written $17,621,390 $12,430,243