21st Century Holding Company Reports Record Q3 Earnings of $0.63 Per Share and Raises Guidance.Business Editors 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.--(BUSINESS WIRE)--Oct. 30, 2003 21st Century Holding Company (Nasdaq:TCHC TCHC Tri-City Homeless Coalition (Fremont, CA) ), today reported results for the third quarter and nine months ended September September: see month. 30, 2003 (see attached tables). For the third quarter of 2003, the Company reported net income of $1,990,801, or $0.57 per 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 based on 3,518,583 average diluted shares outstanding, as compared to net income of $1,746,730, or $0.58 per diluted share, based on 2,994,734 average diluted shares outstanding for the third quarter of 2002. For the nine months ended September 30, 2003, the Company reported net income of $6,413,136 or $1.97 per diluted share based on 3,249,452 average diluted shares outstanding, as compared to net income of $2,770,141 or $0.92 per diluted share based on 3,012,457 average diluted shares outstanding. Outstanding warrants and options as of September 30, 2002 were anti-dilutive. Net income and total revenue for the third quarter of 2002 included a $0.5 million realized loss Realized Loss A loss recognized when assets are sold for a price lower than the original purchase price. Notes: A portion of the realized loss may be applied against a capital gain or realized profit to reduce taxes. on the Company's WorldCom The former name of MCI. Based in Jackson, MS, WorldCom, Inc. was a major, international telecommunications carrier. It was founded in 1983 by Bernard Ebbers as Long Distance Discount Service (LDDS), a reseller of AT&T WATS lines to small businesses. position. Net premiums earned in the third quarter of 2003 increased 40.0% to $11.8 million from $8.5 million in the same period last year. Total revenues for the third quarter of 2003 increased 27.0% to $15.0 million from $11.8 million in the same period last year. Edward J. (Ted) Lawson, President & Chairman of the Board, said, "I am very pleased with our results for the third quarter. As predicted, we had another solid quarter reflecting significant growth in premiums written from the property and general liability insurance lines. Going forward we expect more of the same. Guidance for calendar year ending December 31, 2003, which was $2.00 to $2.15 per share, is now being raised to $2.25 to $2.45 per share and we are continuing to project growth of between 20-30% per year in both our top and bottom line over the next several years starting in 2004." Mr. Lawson continued, "If anyone has any questions concerning our Company or these results, please don't hesitate to call our CFO See Chief Financial Officer. , Gordon Jennings, directly at 954-581-9993 ext. 1201, our 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. , Richard Widdicombe, directly at 954-581-9993 ext. 1254 or myself at 954-581-9993 ext. 1250. Our 10Q will be released on or before November 15, 2003. Thank you." 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. , mobile home insurance, homeowners' property and casualty insurance and general liability insurance in the State of Florida and general liability insurance in the State 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. . The Company also 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 financing Premium Financing involves the lending of funds to a person or company to cover the cost of an insurance premium. Premium finance loans are often provided by third party finance entity known as a "Premium Financing Company"; however insurance companies and brokerages occasionally to its insureds. 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 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 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 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 its liability for loss and loss adjustment expense ("LAE"); 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 Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
------------ ------------ ------------ ------------
Revenue:
Gross premiums
written $22,369,229 $16,362,504 $56,559,803 $47,174,213
Gross premiums
ceded (5,627,904) (5,883,623) (15,830,769) (19,274,613)
------------ ------------ ------------ ------------
Net premiums
written 16,741,325 10,478,881 40,729,034 27,899,600
------------ ------------ ------------ ------------
Increase
(decrease) in
prepaid
reinsurance
premiums (2,486,527) 635,332 (2,550,620) 5,873,741
Decrease
(increase) in
unearned premiums (2,404,301) (2,649,636) (4,921,972) (13,388,307)
------------ ------------ ------------ ------------
Net change in
prepaid
reinsurance
premiums and
unearned
premiums (4,890,828) (2,014,304) (7,472,592) (7,514,566)
------------ ------------ ------------ ------------
Net premiums
earned 11,850,497 8,464,577 33,256,442 20,385,034
Commission income 394,599 783,981 1,143,116 1,862,398
Finance revenue 984,644 1,106,128 3,247,673 3,359,780
Managing general
agent fees 640,661 639,461 1,894,524 2,398,163
Net investment
income 513,515 322,159 1,229,185 1,013,456
Net realized
investments gains
(losses) 33,765 3,223 1,453,465 (1,456,513)
Other income 603,740 503,638 2,603,805 2,378,468
------------ ------------ ------------ ------------
Total revenue 15,021,421 11,823,167 44,828,210 29,940,786
------------ ------------ ------------ ------------
Expenses:
Loss and loss
adjustment
expenses 6,322,281 4,228,536 20,603,737 10,743,363
Operating and
underwriting
expenses 2,969,357 2,242,805 8,308,604 7,453,487
Salaries and wages 2,356,613 1,980,388 6,714,432 5,926,632
Interest expense 177,466 95,207 287,350 294,925
Amortization of
deferred
acquisition
costs, net 123,080 482,783 (914,412) 261,304
------------ ------------ ------------ ------------
Total expenses 11,948,797 9,029,719 34,999,721 24,679,711
Income before
provision for
income tax
expense 3,072,624 2,793,448 9,828,489 5,261,075
Provision for
income tax
expense 1,081,823 1,046,718 3,415,353 2,490,934
------------ ------------ ------------ ------------
Net income $1,990,801 $1,746,730 $6,413,136 $2,770,141
============ ============ ============ ============
Basic net income
per share $0.63 $0.58 $2.09 $0.92
============ ============ ============ ============
Weighted average
number of common
shares
outstanding 3,158,753 2,994,734 3,074,913 3,012,457
============ ============ ============ ============
Fully diluted net
income per share $0.57 $0.58 $1.97 $0.92
============ ============ ============ ============
Weighted average
number of common
shares
outstanding
(assuming
dilution) 3,518,583 2,994,734 3,249,452 3,012,457
============ ============ ============ ============
Dividends declared
per share $0.10 $0.05 $0.26 $0.09
============ ============ ============ ============
21st CENTURY HOLDING COMPANY
Balance Sheet Data
(Unaudited)
Period Ending
9/30/03 12/31/02
------------ ------------
Total Cash & Investments $52,716,811 $29,856,179
Total Assets 100,067,649 75,318,011
Unpaid Loss and Loss Adjustment Expense 24,041,304 16,983,756
Total Liabilities 73,973,230 57,220,347
Total Shareholders' Equity 26,094,419 18,097,664
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