LAUDERDALE LAKES, Fla., March 5, 2009 (GLOBE NEWSWIRE) -- 21st Century Holding Company (Nasdaq:TCHC), today reported results for the quarter and year ended December 31, 2008 and announced that its Board of Directors declared a quarterly dividend of $0.06 per common share payable on June 1, 2009 to shareholders of record as of May 1, 2009 at its regular quarterly meeting. The Company believes that it is a prudent measure to take in reducing the dividend to a level that the Company can support under normal operating conditions, as well as to preserve capital for future opportunities.
For the three months ended December 31, 2008, the Company reported a net loss of $2.8 million, or $0.35 per share on 8,013,894 average shares outstanding, as compared to net income of $8.1 million, or $1.02 per share on 7,913,249 average shares outstanding in the same three-month period last year.
For the twelve months ended December 31, 2008, the Company reported a net loss of $2.5 million, or $0.31 per share on 7,979,436 average undiluted shares outstanding, as compared to net income of $21.3 million, or $2.69 per share on 7,922,542 average undiluted shares outstanding in the same twelve-month period last year. On a diluted share basis, the Company reported a net loss of $0.31 per share, based on the same 7,979,436 average undiluted shares outstanding, as compared to $2.65 per share, based on 8,030,205 average diluted shares outstanding for the twelve months ended December 31, 2007.
Realized investment losses of $0.8 million, net of a $0.5 million income tax benefit, were reported by the Company for the three months ended December 31, 2008. Excluding these losses, the net loss would have been $2.0 million for the same three month period. Realized investment losses of $6.6 million, net of a $4.0 million income tax benefit, were reported by the Company for the twelve months ended December 31, 2008. Excluding these losses, the net income would have been $4.1 million for the same twelve month period.
Net premiums earned decreased $10.0 million or 40.4% to $14.8 million for the three months ended December 31, 2008 as compared to $24.9 million for the same three month period last year. Net premiums earned decreased $34.1 million or 34.4% to $65.1 million for the twelve months ended December 31, 2008 as compared to $99.2 million for the same twelve month period last year.
Total revenues decreased $13.6 million or 46.0% to $15.9 million for the three months ended December 31, 2008, as compared to $29.5 million for the same three-month period last year. Total revenues decreased $51.8 million or 43.5% to $67.4 million for the twelve months ended December 31, 2008, as compared to $119.1 million for the same twelve month period last year.
Michael H. Braun, Chief Executive Officer, said, "Although 2008 results were disappointing, the Company intends on increasing its premiums by expanding the scope of its authorized lines of business and enhancing the marketing activities of its insurance products.
"We believe that Federated National is well positioned in today's homeowners' property insurance market place and poised to significantly expand its market share. We expect that there will be increased demand for insurance policies in the Florida property market in 2009 and 2010. One of the reasons for this increase is the continued exodus of the national property insurance carriers from Florida. During 2009 we expect to grow in-force homeowner policies with new marketing initiatives and the Citizen Property Insurance Company assumption program.
"American Vehicle is also positioned in today's market place with new products to complement its established commercial general liability core product line. During 2009, we expect to see a modest growth in premiums and the introduction of several new insurance products to complement the needs of our commercial general liability customers."
The Company's CEO, Michael H. Braun, and its CFO, Peter J. Prygelski, III, will discuss the financial results and review the outlook for the Company at a conference call to be held on Thursday, March 5 at 4:30 p.m. (ET). Messrs. Braun and Prygelski invite interested parties to participate in the conference call. A live webcast of the call will be available online at http://www.21stcenturyholding.com in the Conference Calls section. Listeners interested in participating in the Q&A session can access the conference call by dialing toll free 877-591-4959. 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 commercial general liability insurance, homeowners' property and casualty insurance, flood insurance and personal automobile insurance in the State of Florida. The Company underwrites general liability coverage as an admitted carrier in the states of Alabama, Louisiana and Texas for more than 300 classes of business, including special events. The Company is approved to operate as a surplus lines/non-admitted carrier in the states of Arkansas, California, Georgia, Kentucky, Maryland, Missouri, Nevada, Oklahoma, South Carolina, Tennessee, and Virginia and offering the same general liability products. The Company is licensed and has the facilities to market and underwrite other insurance carriers' lines of business, as well as to process and adjust claims for third party insurance carriers. In addition to insurance services, the Company offers premium finance services to its insureds as well as insureds of certain third party insurance companies.
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, the success of the Company's new marketing initiatives and introduction of its new product lines, inflation and other changes in economic conditions (including changes in interest rates and financial markets); the impact of new regulations adopted in Florida which affect the property and casualty insurance market; the costs of reinsurance and the collectability or reinsurance, assessments charged by various governmental agencies; pricing competition and other initiatives by competitors; our ability to obtain regulatory approval for requested rate changes, and the timing thereof; legislative and regulatory developments; the outcome of litigation pending against us, including the terms of any settlements; risks related to the nature of our business; dependence on investment income and the composition of our investment portfolio; the adequacy of our liability for loss and loss adjustment expense; insurance agents; claims experience; 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 us in this report, and our other filings with the SEC, including, but not limited to, the Company's Annual Report on Form 10-K for the year ended December 31, 2007 and the Form 10-K for the year ended December 31, 2008 to be filed on or before March 16, 2009. 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. The Company undertakes no obligations to update, change or revise any forward-looking statement, whether as a result of new information, additional or subsequent developments or otherwise.
21st CENTURY HOLDING COMPANY
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Dec 31, Twelve Months Ended Dec 31,
Revenue: 2008 2007 2008 2007
---- ---- ---- ----
Gross
premiums
written $ 17,553,107 $ 23,875,468 $ 88,247,981 $133,591,334
Gross
premiums
ceded (621,998) 1,994,459 (34,553,348) (44,550,721)
------------ ------------ ------------ ------------
Net
premiums
written 16,931,109 25,869,927 53,694,633 89,040,613
------------ ------------ ------------ ------------
Decrease
in prepaid
reinsurance
premiums (7,962,192) (12,755,101) (6,131,063) (11,251,117)
Decrease in
unearned
premiums 5,846,852 11,741,312 17,566,101 21,434,625
------------ ------------ ------------ ------------
Net change
in
prepaid
reinsurance
premiums
and
unearned
premiums (2,115,340) (1,013,789) 11,435,038 10,183,508
------------ ------------ ------------ ------------
Net
premiums
earned 14,815,769 24,856,138 65,129,671 99,224,121
Commission
income 401,453 291,866 1,611,886 7,213,752
Finance
revenue 81,731 81,925 350,198 544,893
Managing
general
agent
fees 369,471 434,329 1,745,243 2,034,503
Net
investment
income 1,037,206 1,935,790 6,354,084 7,964,444
Net realized
investment
(losses)
gains (1,284,130) 1,343,808 (10,592,770) (145,419)
Regulatory
assessments
recovered 485,518 394,359 2,104,113 1,654,685
Other income 14,500 144,742 654,482 641,151
------------ ------------ ------------ ------------
Total
revenue 15,921,518 29,482,957 67,356,907 119,132,130
------------ ------------ ------------ ------------
Expenses:
Loss and
loss adjust-
ment expenses 11,612,927 9,008,716 41,868,260 47,618,922
Operating and
underwriting
expenses 2,402,942 1,734,648 7,102,328 12,683,627
Salaries and
wages 1,820,021 1,666,624 7,427,785 6,731,533
Interest
expense -- (260) -- 172,817
Policy
acquisition
costs, net of
amortization 2,966,437 4,524,145 14,760,249 19,419,915
------------ ------------ ------------ ------------
Total
expenses 18,802,327 16,933,873 71,158,622 86,626,814
(Loss) income
before pro-
vision for
income tax
(benefit)
expense (2,880,809) 12,549,084 (3,801,715) 32,505,316
Provision for
income tax
(benefit)
expense (107,450) 4,459,323 (1,323,775) 11,225,519
------------ ------------ ------------ ------------
Net (loss)
income $ (2,773,359) $ 8,089,761 $ (2,477,940) $ 21,279,797
============ ============ ============ ============
Basic net
(loss) income
per share $ (0.35) $ 1.02 $ (0.31) $ 2.69
============ ============ ============ ============
Fully diluted
net (loss)
income per
share $ (0.35) $ 1.01 $ (0.31) $ 2.65
============ ============ ============ ============
Weighted
average
number
of common
shares
outstanding 8,013,894 7,913,249 7,979,436 7,922,542
============ ============ ============ ============
Weighted
average
number
of common
shares
outstanding
(assuming
dilution) 8,013,894 7,988,203 7,979,436 8,030,205
============ ============ ============ ============
Dividends
paid per
share $ 0.18 $ 0.18 $ 0.72 $ 0.72
============ ============ ============ ============
21st CENTURY HOLDING COMPANY
Other Selected Data
(Unaudited)
Balance Sheet
-------------
Period Ending
12/31/08 12/31/07
-------- --------
Total Cash & Investments $150,642,267 $158,748,019
Total Assets $197,109,242 $219,360,763
Unpaid Loss and Loss Adjustment Expense $64,782,486 $59,684,790
Total Liabilities $120,878,326 $138,104,140
Total Shareholders' Equity $76,230,916 $81,256,623
Common Stock Outstanding 8,013,894 7,871,234
Book Value Per Share $9.51 $10.32
Premium Breakout
----------------
3 Months Ending 12 Months Ending
Line of Business 12/31/08 12/31/07 12/31/08 12/31/07
---------------- -------- -------- -------- --------
(Dollars in thousands) (Dollars in thousands)
Homeowners' $12,389 $17,031 $60,709 $99,502
Commercial
General
Liability 4,404 6,620 23,790 32,222
Federal Flood 648 -- 3,262 --
Automobile 112 225 487 1,867
------- ------- ------- --------
Gross Written
Premiums $17,553 $23,875 $88,248 $133,591
======= ======= ======= ========
Commercial General Liability
Written Premium by State
------------------------
3 Months Ending 12 Months Ending
State 12/31/08 12/31/07 12/31/08 12/31/07
----- -------- -------- -------- --------
(Dollars in thousands) (Dollars in thousands)
Alabama $19 $26 $117 $26
Arkansas -- -- 12 --
California 18 23 269 23
Florida 3,119 4,125 16,011 21,192
Georgia 97 223 568 1,023
Kentucky -- 3 1 8
Louisiana 980 1,548 4,481 5,595
Maryland -- -- 2 --
South Carolina 4 48 70 182
Texas 168 611 2,252 4,127
Virginia -- 14 7 46
------- ------- ------- --------
Gross Written Premiums $4,405 $6,621 $23,790 $32,222
======= ======= ======= ========
Loss Ratios
-----------
3 Months Ending 12 Months Ending
Line of Business 12/31/08 12/31/07 12/31/08 12/31/07
---------------- -------- -------- -------- --------
Homeowners' 49.3% 28.6% 56.2% 37.4%
Commercial General
Liability 120.4% 69.4% 77.0% 58.9%
Automobile (78.3)% (4.0)% 1.8% 140.0%
All Lines 78.4% 36.3% 64.3% 48.0%