ADDISON, Texas, Nov. 6, 2009 (GLOBE NEWSWIRE) -- Affirmative Insurance Holdings, Inc. (Nasdaq:AFFM), a leading distributor and producer of non-standard personal automobile insurance policies, today reported consolidated financial results for the three months ended September 30, 2009.
For the third quarter of 2009
* Total gross premiums written for the three months ended September
30, 2009 increased $2.0 million to $91.4 million, or 2.2%,
compared with the third quarter of 2008, primarily due to the
expansion of independent agency relationships.
* Total revenues increased to $111.5 million, a 2.4% increase over
the $108.9 million in the same period of the prior year.
* Net premiums earned increased by $1.1 million, or 1.2%, to $88.6
million for the three months ended September 30, 2009.
* Commission income and fees for the three months ended September
30, 2009 increased $1.6 million, or 8.6%, compared with the same
period a year ago. Results were positively impacted by increases
in premium finance revenue and commissions and fees generated
from third-party products. These increases were partially offset
by the reduction in policyholder fees.
* Net investment income decreased by $0.6 million, or 18.7%, to
$2.4 million for the three months ended September 30, 2009,
compared with the third quarter of 2008. The average investment
yield was 2.5% (3.9% on a taxable equivalent basis) in the third
quarter of 2009, compared with 3.1% (4.8% on taxable equivalent
basis) in the third quarter of 2008.
* Losses and loss adjustment expenses for the three months ended
September 30, 2009 decreased $0.3 million, or 0.4%, to 79.4% of
net earned premium (the loss ratio), compared with a loss ratio
of 80.6% in the third quarter of 2008. The decline was primarily
due to hurricane losses and prior period adverse development in
2008. Excluding these items, the loss ratio for the current
quarter increased to 79.4% from 75.5%, primarily due to increased
frequency in our Florida and Texas businesses.
* Selling, general and administrative expenses increased $0.3
million, or 0.9%, to $38.1 million, compared with $37.8 million
in the third quarter of 2008. This increase was due to a
reduction in ceding commission income of $2.5 million due to the
termination of the quota share agreement for Louisiana and
Alabama business and contingent commission expense of $1.0
million. These increases were partially offset by recently
initiated cost reduction initiatives.
* Total interest expense was $6.4 million, compared with $4.3
million in the same period of the prior year. The increase was
due to $2.0 million of loan discount amortization and a higher
interest rate as a result of the senior secured credit facility
modification in March 2009.
* Loss from continuing operations for the three months ended
September 30, 2009 was $3.4 million compared with a loss of $3.5
million for the three months ended September 30, 2008. The net
loss for the quarter was $3.4 million compared with a net loss of
$6.6 million in the third quarter of 2008.
* Total debt outstanding as of September 30, 2009 of $187.0 million
decreased 12.4% compared to $213.6 million as of December 31,
2008.
About Affirmative
Affirmative Insurance Holdings, Inc. is a distributor and producer of non-standard personal automobile insurance policies and related products and services for individual consumers in targeted geographic markets. Non-standard personal automobile insurance policies provide coverage to drivers who find it difficult to obtain insurance from standard automobile insurance companies due to their lack of prior insurance, age, driving record, limited financial resources or other factors. Non-standard personal automobile insurance policies generally require higher premiums than standard automobile insurance policies.
The Affirmative Insurance Holdings, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3443
This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by, among other things, the use of forward-looking terms such as "likely," "typically," "may," "intends," "expects," "believes," "anticipates," "estimates," "projects," "targets," "forecasts," "seeks," "potential," or "attempts" or the negative of such terms or other variations on such terms or comparable terminology. By their nature, these statements are subject to risks, uncertainties and other factors, which could cause actual future results to differ materially from those results expressed or implied by such forward-looking statements.
Do not unduly rely on forward-looking statements. They give the Company's expectations about the future and are not guarantees. Forward-looking statements speak only as of the date they are made, and, except as required by law, the Company does not intend to update them to reflect changes that occur after that date. For a discussion of factors that may cause actual results to differ from expectations, refer to the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2008 and subsequent quarterly reports on Form 10-Q. Any factor described in this press release or in any document referred to in this press release could, by itself or together with one or more other factors, adversely affect the Company's business, earnings and/or financial condition.
AFFIRMATIVE INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- --------------------
2009 2008 2009 2008
--------- --------- --------- ---------
(Unaudited)
Revenues
Net premiums earned $ 88,561 $ 87,511 $ 276,006 $ 275,902
Commission income and fees 20,024 18,446 60,474 58,646
Net investment income 2,399 2,952 7,284 10,982
Net realized gains
(losses) 17 (52) 604 55
Other income 512 -- 1,049 --
--------- --------- --------- ---------
Total revenues 111,513 108,857 345,417 345,585
--------- --------- --------- ---------
Expenses
Losses and loss adjustment
expenses 70,293 70,576 221,860 212,154
Selling, general and
administrative expenses 38,092 37,758 117,728 107,762
Depreciation and
amortization 2,341 2,836 7,131 7,556
--------- --------- --------- ---------
Total expenses 110,726 111,170 346,719 327,472
--------- --------- --------- ---------
Operating income (loss) 787 (2,313) (1,302) 18,113
Gain on extinguishment of
debt -- -- 19,434 --
Loss on interest rate
swaps 926 -- 5,872 --
Interest expense 6,425 4,305 17,143 14,136
Other intangible assets
impairment -- 212 -- 212
--------- --------- --------- ---------
Income (loss) from
continuing operations
before income tax expense (6,564) (6,830) (4,883) 3,765
Income tax benefit (3,172) (3,380) (4,634) (681)
--------- --------- --------- ---------
Income (loss) from
continuing operations (3,392) (3,450) (249) 4,446
Discontinued operations
Loss from operations
(including loss on
disposal of $961) (47) (678) (1,835) (1,969)
Other intangible assets
impairment -- (4,397) -- (4,397)
Income tax benefit (17) (1,908) (479) (2,272)
--------- --------- --------- ---------
Loss from discontinued
operations (30) (3,167) (1,356) (4,094)
--------- --------- --------- ---------
Net income (loss) $ (3,422) $ (6,617) $ (1,605) $ 352
========= ========= ========= =========
Basic income (loss) per
common share:
Continuing operations $ (0.22) $ (0.22) $ (0.01) $ 0.29
Discontinued operations (0.00) (0.21) (0.09) (0.27)
--------- --------- --------- ---------
Net income (loss) $ (0.22) $ (0.43) $ (0.10) $ 0.02
========= ========= ========= =========
Diluted income (loss) per
common share:
Continuing operations $ (0.22) $ (0.22) $ (0.01) $ 0.29
Discontinued operations (0.00) (0.21) (0.09) (0.27)
--------- --------- --------- ---------
Net income (loss) $ (0.22) $ (0.43) $ (0.10) $ 0.02
========= ========= ========= =========
Weighted average common
shares outstanding:
Basic 15,415 15,415 15,415 15,415
========= ========= ========= =========
Diluted 15,415 15,415 15,415 15,415
========= ========= ========= =========
Dividends declared per
common share $ -- $ 0.02 $ -- $ 0.06
========= ========= ========= =========