21st Century Holding Company Reports Correction for Third Quarter.PLANTATION Plantation, city (1990 pop. 66,692), Broward co., SE Fla., a residential suburb of Fort Lauderdale; inc. 1953. The city has grown rapidly along with the development of S Florida. , Fla. -- 21st Century Holding Company (Nasdaq:TCHC TCHC Tri-City Homeless Coalition (Fremont, CA) ) today announced that it is correcting certain results of operations information originally reported in its press release on November 11, 2004. As a result of its review of its interim financial statements in connection with the preparation of its Form 10-Q Form 10-Q See 10-Q. for September 30, 2004, the Company determined that it overstated o·ver·state tr.v. o·ver·stat·ed, o·ver·stat·ing, o·ver·states To state in exaggerated terms. See Synonyms at exaggerate. o the deferred tax asset used in determining the benefit for income tax expense as reported in that press release. The correct income tax benefit for the three months ended September 30, 2004 is $9,533,125, resulting in a net loss for the period of $16,946,258. The correct income tax benefit for the nine months ended September 30, 2004 is $5,739,420, resulting in a net loss for the period of $10,347,473. This correction reflects the recording of the timing differences for tax purposes of discounted unearned premiums and discounted unpaid losses. (See attached Corrected Consolidated Statements of Operations). Edward J. (Ted) Lawson, President and Chairman of the Board, said, "This correction will have no effect on the Company's forward guidance, which was given in the previous press release." About the Company The Company, through its subsidiaries, underwrites standard and non-standard personal automobile insurance, flood insurance Flood insurance denotes the specific insurance coverage against property loss from flooding. To determine risk factors for specific properties, insurers will often refer to topographical maps that denote lowlands and floodplains that are susceptible to flooding. , 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 CODE, OF LOUISIANA. In 1822, Peter Derbigny, Edward Livingston, and Moreau Lislet, were selected by the legislature to revise and amend the civil code, and to add to it such laws still in force as were not included therein. . The Company also operates as an approved (non-admitted) carrier in the States of Georgia and Kentucky underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. general liability coverage for contractors, mercantile Relating to trade or commerce; commercial; having to do with the business of buying and selling; relating to merchants. A mercantile agency is an individual or company in the business of collecting data about the financial status, ability, and credit of individuals 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 Subordinate; aiding. A legal proceeding that is not the primary dispute but which aids the judgment rendered in or the outcome of the main action. A descriptive term that denotes a legal claim, the existence of which is dependent upon or reasonably linked to a main claim. 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 Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. statements under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: Statements in this press release that are not historical fact are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 gen·er·al·i·ty n. pl. gen·er·al·i·ties 1. The state or quality of being general. 2. An observation or principle having general application; a generalization. 3. 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 To insure; to sell an issue of stocks and bonds or to guarantee the purchase of unsold stocks and bonds after a public issue. The word underwrite has two meanings. in an additional jurisdiction or for requested rate changes, and the timing thereof; legislative and regulatory developments; the outcome of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called 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 Catastrophe, from the Greek Καταστροφή (katastrephein), literally means "to turn" (strephein) "downwards" (kata-). 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 Tom Clancy's Op-Center: Acts of War is a technothriller by Jeff Rovin Plot introduction The mobile Regional Operations Center (ROC) in Turkey investigates a dam blown up by Kurdish terrorists. 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 United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Securities and Exchange Commission. In addition, investors should be aware that generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting prescribe pre·scribe v. To give directions, either orally or in writing, for the preparation and administration of a remedy to be used in the treatment of a disease. 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 contingency n. an event that might not occur. . Reported results may therefore appear to be volatile in certain accounting periods.
21st CENTURY HOLDING COMPANY
Corrected Consolidated Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
Revenue: 2004 2003 2004 2003
------------- ------------ ------------- ------------
Gross premiums
written $24,301,800 $22,369,229 $73,929,571 $56,559,803
Gross premiums
ceded 71,385 (5,627,904) 975,429 (15,830,769)
------------- ------------ ------------- ------------
Net premiums
written 24,373,185 16,741,325 74,905,000 40,729,034
Decrease in
prepaid
reinsurance
premiums (1,330,351) (2,486,527) (7,426,095) (2,550,620)
Decrease
(increase) in
unearned
premiums 156,954 (2,404,301) (14,342,263) (4,921,972)
------------- ------------ ------------- ------------
Net change in
prepaid
reinsurance
premiums and
unearned
premiums (1,173,397) (4,890,828) (21,768,358) (7,472,592)
------------- ------------ ------------- ------------
Net premiums
earned 23,199,788 11,850,497 53,136,642 33,256,442
Commission
income 476,421 394,599 1,785,290 1,143,116
Finance revenue 784,584 984,644 2,824,568 3,247,673
Managing
general agent
fees 501,225 640,661 1,488,405 1,894,524
Net investment
income 839,641 513,515 2,141,686 1,229,185
Net realized
investments
gains (losses) 80,959 33,765 261,386 1,453,465
Other income 459,345 603,740 2,849,555 2,603,805
------------- ------------ ------------- ------------
Total revenue 26,341,963 15,021,421 64,487,532 44,828,210
------------- ------------ ------------- ------------
Expenses:
Loss and loss
adjustment
expenses 42,292,556 6,322,281 56,385,548 20,603,737
Operating and
underwriting
expenses 5,353,136 2,969,326 11,803,803 8,308,583
Salaries and
wages 2,467,014 2,356,613 7,107,344 6,714,432
Interest
expense 186,902 177,466 631,824 287,350
Policy
acquisition
costs, net of
amortization 2,521,738 123,080 4,645,906 (914,412)
------------- ------------ ------------- ------------
Total
expenses 52,821,346 11,948,766 80,574,425 34,999,690
------------- ------------ ------------- ------------
Income before
provision for
income tax
expense (26,479,383) 3,072,655 (16,086,893) 9,828,520
Provision
(benefit) for
income tax
expense (9,533,125) 1,081,824 (5,739,420) 3,415,354
------------- ------------ ------------- ------------
Net income
(loss) $(16,946,258) $1,990,831 $(10,347,473) $6,413,166
============= ============ ============= ============
Basic net income
(loss) per share $(2.86) $0.42 $(1.79) $1.39
============= ============ ============= ============
Weighted average
number of common
shares
outstanding 5,925,952 4,738,130 5,786,803 4,612,370
============= ============ ============= ============
Fully diluted net
income (loss)
per share $(2.70) $0.38 $(1.66) $1.32
============= ============ ============= ============
Weighted average
number of common
shares
outstanding
(assuming
dilution) 6,279,826 5,277,875 6,248,663 4,874,178
============= ============ ============= ============
Dividends
declared per
share $0.08 $0.07 $0.16 $0.17
============= ============ ============= ============
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