Motor Club of America Announces Third Quarter and Nine Month Results
14 November 2000
Motor Club of America Announces Third Quarter and Nine Month Results
PARAMUS, N.J., Nov. 14 Motor Club of America
("Company") announced today its third quarter and nine month
results for the period ended September 30, 2000.
Revenues for the three months ended September 30, 2000 were $24,645,495 as
compared to $14,627,084 for the same period in 1999. Net income for the three
month period ended September 30, 2000 was $1,544,397, or $.73 basic and
diluted net income per share, as compared to $129,745 or $.06 basic and
diluted net income per share in 1999.
Revenues for the nine months ended September 30, 2000 were $66,797,437 as
compared to $43,358,910 for the same period in 1999. Net income for the nine
month period ended September 30, 2000 was $2,433,420 or $1.15 basic and
diluted net income per share, as compared to $2,126,799 or $1.01 basic and
$1.00 diluted net income per share in 1999.
Book value was $14.15 per share at September 30, 2000, as compared to
$12.97 per share at December 31, 1999 and $13.07 per share at September 30,
1999.
Because North East Insurance Company ("North East") and Mountain Valley
Indemnity Company ("Mountain Valley") were acquired on September 24, 1999 and
March 1, 2000, respectively, comparability of revenues and net income on a
year-to-year and quarter-to-quarter basis in 2000 are affected. To aid
comparability, North East and Mountain Valley's separate revenues and net
income for the three and nine months ended September 30, 2000 were as follows:
Three Months Ended Nine Months Ended
September 30, 2000 September 30, 2000
Company Revenues Net Income Revenues Net Income
North East $5,067,974 $428,373 $14,466,673 $438,151
Mountain Valley 4,446,668 (59,633) 9,956,662 10,355
Total $9,514,642 $368,740 $24,423,295 $448,506
Absent the acquired companies, and accounting for unusual and
non-recurring items (including the expenses related to the acquisition of
North East and Mountain Valley), which are described in the Company's Form
1O-Q filed with the Securities and Exchange Commission today, net income for
the three and nine months ended September 30, 2000 was $578,238 or $.27 basic
and diluted net income per share and $1,655,299 or $.78 basic and diluted net
income per share, respectively. This compares with net income (as adjusted) of
$453,332 or $.21 basic and diluted net income per share and $2,331,892 or
$1.10 basic and diluted net income per share for the same periods in 1999,
respectively.
Motor Club of America owns and operates five regionally focused property
and casualty insurance companies, including companies that specialize in small
and mid-sized commercial 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 fourth quarter 2000, writing
commercial lines in tandem with Mountain Valley.
Motor Club of America Insurance Company writes personal automobile
insurance in New Jersey and is rated B+ (Very Good) by Best. North East
Insurance Company writes personal automobile and small commercial lines
insurance in the State of Maine and is rated B (Fair) by Best.
Forward-Looking Statement Disclaimer. This press release contains
statements that are not historical facts and are considered "forward-looking
statements" (as defined in the Private Securities Litigation Reform Act of
1995), including statements concerning the expected benefits of the merger
with North East and acquisition of Mountain Valley and the expected future
plans related thereto. These statements can be identified by terms such as
"believes," "expects," "may," "will," "should," "anticipates," the negatives
thereof or by discussions of strategy. Certain statements contained herein are
forward-looking statements that involve risks, uncertainties, opinions and
predictions, and no assurance can be given that the future results will be
achieved since events or results may differ materially as a result of risks
facing the Company. These include, but are not limited to economic, market or
regulatory conditions as well as catastrophic events. Consummation of the
merger with North East and acquisition of Mountain Valley and future benefits
there from involve various risks and uncertainties, including the risk of
material adverse changes in financial markets or the condition of the Company;
risks associated with the Company's entry into new markets; and state
regulatory and legislative actions which can affect the profitability of
certain lines of business and impede the companies' ability to charge
adequate rates. Accordingly, Motor Club of America's premium growth and
underwriting results has been and will continue to be potentially materially
affected by those factors.
This News Release Is Also Available At http://www.motr.com
MOTOR CLUB OF AMERICA
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Nine Months For the Three Months
Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2000 1999 2000 1999
Revenues:
Insurance premium
(net of premiums ceded
totaling $9,196,834,
$5,299,714,
($143,519) and
$1,632,198) $61,983,283 $39,643,239 $22,916,035 $13,376,548
Net investment
income 4,673,887 3,600,727 1,695,897 1,215,870
Realized gains on
sales of investments 8,263 5,365 3,739 (13)
Other revenues 132,000 109,579 29,824 34,679
Total revenues 66,797,433 43,358,910 24,645,495 14,627,084
Losses and Expenses:
Insurance losses and loss
expenses incurred
(net of reinsurance
recoveries totaling
$11,014,091, $2,832,542,
$2,871,440 and
$989,726) 41,186,980 28,413,303 15,091,837 10,873,022
Amortization of deferred
policy acquisition costs
and other operating
expenses 21,472,620 12,355,508 7,923,648 3,722,468
Interest expenses 1,366,976 176,858 525,966 70,062
Amortization of
goodwill 63,522 -- 21,174 --
Merger expenses 354,097 800,000 -- 800,000
Total losses and
expenses 64,444,195 41,745,669 23,562,625 15,465,552
Income before Federal
Income, taxes 2,353,238 1,613,241 1,082,870 (838,468)
Provision (benefit) before Federal Income taxes:
current 39,576 45,159 17,597 (10,699)
deferred (119,758) (558,717) (479,124) (957,514)
Total provision (benefit) for
Federal Income taxes (80,182) (513,558) (461,527) (968,213)
Net income $2,433,420 $2,126,799 $1,544,397 $129,745
Net income per common share:
Basic $1.15 $1.01 $0.73 $0.06
Diluted $1.15 $1.00 $0.73 $0.06
Weighted average common and potential common shares outstanding:
Basic 2,124,387 2,116,429 2,124,387 2,116,429
Diluted 2,124,387 2,140,275 2,124,387 2,173,028
Net premium written 62,783,761 36,925,964 23,469,796 12,478,566
GAAP loss ratio 66.4% 71.7% 65.9% 81.3%
GAAP expense ratio 35.3% 33.6% 34.5% 34.3%
GAAP combined ratio 101.7% 105.3% 100.4% 115.6%
Book value $14.53 $13.07