21st Century Holding Company Reports Record First Quarter Results with Earnings of $0.95 Per Share and Beats Guidance.LAUDERDALE Lauderdale is the name of various places:
For the quarter ended March 31, 2005, the Company reported net income of $5,821,260, or $0.95 per share on 6,152,548 undiluted shares, versus net income of $2,924,008 or $0.52 per share on 5,639,743 undiluted shares in the same three-month period last year. On a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share basis, the Company reported earnings of $0.89 per share, based on 6,532,023 average diluted shares outstanding. These record results beat Company guidance of $0.80 to $0.85 per share by $0.10 and $0.04 per share respectfully re·spect·ful adj. Showing or marked by proper respect. re·spect  ful·ly adv. as income surged by almost 100% from the same
three-month period last year.
Net premiums earned increased $6.6 million or 54.0% to $18.8 million for the three months ended March 31, 2005, as compared to $12.2 million for the same three-month period last year. Total revenues increased $7.2 million or 48.8% to $21.9 million for the three months ended March 31, 2005, as compared to $14.7 million for the same three-month period last year. Edward J. (Ted) Lawson, President and Chairman of the Board, said, "I am very pleased with our first quarter results and expect our profitability momentum to continue. As a further sign of our improving cash position, we will be using cash to pay our upcoming quarterly principal and interest payment on our subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". issues, as opposed to using stock, as we have in the past. We are receiving substantial cash from our continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the and our stock is selling at a very low valuation. Additionally, we feel comfortable with our reserve adequacy for our claims. Consequently, instead of using our stock at a depressed level to repay our note obligation, we anticipate that future payments will continue to be made in cash. " The Company will hold an investor conference call at 4:30 PM (ET) today, April 27, 2005. Mr. Lawson, Mr. Richard A. Widdicombe, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , and Mr. J. Gordon Jennings III, CFO See Chief Financial Officer. , will discuss the financial results and review the outlook for the Company. Messrs. Lawson, Widdicombe and Jennings invite interested parties to participate in the conference call. Listeners can access the conference call by dialing toll free 888-460-6235. 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 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 coverage as an admitted carrier in the States 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. , Texas and Alabama Alabama, indigenous people of North America Alabama (ăləbăm`ə), indigenous people of North America whose language belongs to the Muskogean branch of the Hokan-Siouan linguistic stock (see Native American languages). for more than 300 classes of business, including special events, as well as homeowners' coverage in the State of Louisiana. The Company also operates as an approved (non-admitted) carrier in the States of Georgia Georgia, country, Asia Georgia (jôr`jə), Georgian Sakartvelo, Rus. Gruziya, officially Republic of Georgia, republic (2005 est. pop. 4,677,000), c.26,900 sq mi (69,700 sq km), in W Transcaucasia. and Kentucky Kentucky, state, United States Kentucky (kəntŭk`ē, kĭn–), one of the so-called border states of the S central United States. It is bordered by West Virginia and Virginia (E); Tennessee (S); the Mississippi R. offering the same general liability products. In addition, the Company has 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. 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. 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
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
March 31,
Revenue: 2005 2004
------------ ------------
Gross premiums written $30,097,044 $17,817,726
Gross premiums ceded 2,901,291 86,850
------------ ------------
Net premiums written 27,195,753 17,730,876
Decrease in prepaid reinsurance premiums (2,675,295) (3,768,152)
(Increase) in unearned premiums (5,685,560) (1,728,906)
------------ ------------
Net change in prepaid reinsurance
premiums and unearned premiums (8,360,855) (5,497,058)
------------ ------------
Net premiums earned 18,834,898 12,233,818
Finance revenue 1,104,530 1,090,820
Managing general agent fees 632,315 447,358
Net investment income 892,871 528,124
Net realized investment gains 159,523 121,919
Other income 242,469 275,136
------------ ------------
Total revenue 21,866,606 14,697,175
------------ ------------
Expenses:
Loss and loss adjustment expenses 6,909,997 6,474,833
Operating and underwriting expenses 1,582,531 1,948,572
Salaries and wages 1,578,581 1,423,114
Interest expense 430,144 231,081
Policy acquisition costs, net of
amortization 3,825,601 441,728
------------ ------------
Total expenses 14,326,854 10,519,328
------------ ------------
Income before provision for income tax
expense 7,539,752 4,177,847
Provision for income tax expense 2,754,076 1,546,817
------------ ------------
Net income from continuing operations $4,785,676 $2,631,030
------------ ------------
Discontinued operations:
Income from discontinued operations
(including gain on disposal of
$1,630,000 and $0, respectively) 1,630,000 465,222
Provision for income tax expense 595,396 172,245
------------ ------------
Income on discontinued operations 1,034,604 292,977
------------ ------------
Net income $5,820,280 $2,924,007
============ ============
Basic net income per share from continuing
operations $0.78 $0.47
------------ ------------
Basic net income per share from
discontinued operations $0.17 $0.05
------------ ------------
Basic net income per share $0.95 $0.52
============ ============
Fully diluted net income per share from
continuing operations $0.73 $0.43
------------ ------------
Fully diluted net income per share from
discontinued operations $0.16 $0.05
------------ ------------
Fully diluted net income per share $0.89 $0.48
============ ============
Weighted average number of common shares
outstanding 6,152,548 5,639,744
============ ============
Weighted average number of common shares
outstanding (assuming dilution) 6,532,023 6,087,228
============ ============
Dividends declared per share $0.08 $0.08
============ ============
21st CENTURY HOLDING COMPANY
Balance Sheet Data
(Unaudited)
Period Ending
03/31/05 12/31/04
------------- -------------
Total Cash & Investments $83,689,774 $90,509,879
Total Assets $151,000,578 $163,601,372
Unpaid Loss and Loss Adjustment Expense $26,766,395 $46,570,679
Total Liabilities $118,449,045 $138,624,637
Total Shareholders' Equity $32,551,533 $24,976,735
Premium Breakout
Line of Business 03/31/05 03/31/04
Automobile 30.0% 46.5%
Homeowners 52.0% 36.6%
General Liability 17.1% 14.4%
Mobile Home Owners 0.9% 2.5%
Gross Written Premiums 100.0% 100.0%
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