AmCOMP Reports First Quarter 2006 Financial Results.NORTH PALM BEACH, Fla. -- AmCOMP Incorporated (Nasdaq:AMCP AMCP Academy of Managed Care Pharmacy AMCP Aeronautical Mobile Communications Panel AMCP Association of Managed Care Providers (now Association of Managed Care Dentists) AMCP Army Materiel Command Pamphlet AMCP Army Married Couples Program ) today announced its financial results for the quarter ended March 31, 2006. For the first quarter of 2006, net income was $6.0 million, or $0.46 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, compared to net income of $5.3 million, or $0.56 per diluted share, for the same period in 2005. Weighted average diluted shares outstanding for the first quarter of 2006 were 12,892,000 compared to 9,562,000 for the first quarter of 2005. Total revenue for the first quarter of 2006 increased 11.1% to $70.1 million versus $63.1 million in the year-earlier period. The net combined ratio, including policyholder Policyholder An individual who owns an insurance policy. dividends, increased 2.0% to 90.8% of net premiums earned for the three months ended March 31, 2006, from 88.8% for the comparable period in 2005. Loss and loss adjustment expenses for the first quarter of 2006 were $37.5 million, or 56.8% of net premiums earned, versus $36.5 million, or 59.8%, in the same period of 2005. Policy acquisition expenses were $12.8 million or 19.4% of net premiums earned compared to $6.8 million or 11.2% of net premiums earned in the prior period in 2005. Total 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. and other expense were $7.0 million, or 10.6% of net premiums earned, in the first quarter of 2006 versus $8.9 million, or 14.5% of net premiums earned, in the comparable 2005 period. Dividends to policyholders were $2.7 million, or 4.0% of net premiums earned, versus $2.0 million or 3.3% of net premiums earned, in the 2005 comparable period. Fred (Friendly Rollabout Engineered for Doctors) A mobile medical conferencing unit. See videoconferencing. 1. FRED - Robert Carr. Language used by Framework, Ashton-Tate. 2. R. Lowe, AmCOMP's Chairman, President and Chief Executive Officer, said: "We are continuing to grow our business, producing double digit Noun 1. double digit - a two-digit integer; from 10 to 99 integer, whole number - any of the natural numbers (positive or negative) or zero; "an integer is a number that is not a fraction" growth in net income and revenue of 12.2% and 11.1%, respectively, compared to the same quarter of last year. Our performance was a little better than we anticipated in light of the 13.5% decrease in state-mandated Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and premium rates, which represents approximately 41% of our direct premiums earned, as well as the activities required to complete our initial public offering of stock, which though necessary, were disruptive disruptive /dis·rup·tive/ (-tiv) 1. bursting apart; rending. 2. causing confusion or disorder. to our short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. normal course of business in the first quarter. We are continuing to adjust to our new status as a publicly-held company, and we will continue to take the appropriate steps to maximize AmCOMP's opportunities for the future. We recently announced the formation of a new Southern Region, consisting of Tennessee Tennessee, state, United States Tennessee (tĕn`əsē', tĕn'əsē`), state in the south-central United States. , 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. , Mississippi Mississippi, state, United States Mississippi (mĭs'əsĭp`ē), one of the Deep South states of the United States. It is bordered by Alabama (E), the Gulf of Mexico (S), Arkansas and Louisiana, with most of the border formed by and Arkansas Arkansas, river, United States Arkansas (ärkăn`zəs, är`kənsô'), river, c.1,450 mi (2,330 km) long, rising in the Rocky Mts., central Colo. . This strategic move will enable the Midwest Midwest or Middle West, region of the United States centered on the western Great Lakes and the upper-middle Mississippi valley. It is a somewhat imprecise term that has been applied to the northern section of the land between the Appalachians regional staff to focus more time on the key states of Wisconsin Wisconsin, state, United States Wisconsin (wĭskŏn`sən, –sĭn), upper midwestern state of the United States. It is bounded by Lake Superior and the Upper Peninsula of Michigan, from which it is divided by the Menominee , Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. and Indiana Indiana, state, United States Indiana, midwestern state in the N central United States. It is bordered by Lake Michigan and the state of Michigan (N), Ohio (E), Kentucky, across the Ohio R. (S), and Illinois (W). as well as on the potential expansion states in that part of the country, particularly Missouri Missouri, state, United States Missouri (mĭz  r`ē, –ə), one of the midwestern states of the United States. and Minnesota Minnesota, state, United StatesMinnesota (mĭn'ĭsō`tə), upper midwestern state of the United States. It is bordered by Lake Superior and Wisconsin (E), Iowa (S), South Dakota and North Dakota (W), and the Canadian provinces . Our future is bright, and we are focused on the creation of the revenue and earnings growth that our shareholders desire and deserve." On February 10, 2006, AmCOMP completed a public offering of common stock in which it sold 6,000,000 primary shares, raising net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of approximately $48.0 million. On February 15, 2006, AmCOMP contributed approximately $43.0 million of the net proceeds from the offering to its insurance company subsidiaries to expand its business in its core markets. About AmCOMP With roots dating back to 1982, AmCOMP Incorporated is an insurance holding company whose wholly owned subsidiaries Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , AmCOMP Preferred and AmCOMP Assurance, are mono-line workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. insurers with products that focus on value-added services A value-added service (VAS) is a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions. to policyholders. Currently marketing insurance policies in 11 core states and targeting small to mid-sized employers in a variety of industries, AmCOMP distributes its products through independent agencies. Conference Call The Company will host a conference call on Friday, May 12, 2006, at 8:00 AM ET, featuring remarks by Fred R. Lowe, Chairman, President and 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 Kumar Gursahaney, Senior Vice President and CFO See Chief Financial Officer. . The conference call is available via the Company's website and can be accessed by visiting http://ir.amcomp.com/ The dial-in number for the conference call is 913-981-5559. Please call at least five minutes before the scheduled start time. There will be an audio reply of the call, which will be available starting 11:00 AM ET, May 12th through 11:59 PM ET May 15, 2006, and may be accessed by calling 719-457-0820 or 888-203-1112 and using the pass code 4637323. The conference call webcast will be available on the Company's website for sixty days. 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. Statements made in this press release, including those about the Company's financial condition and results of operations and about its future plans and objectives, which are not based on historical facts, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and Section 21E of the Securities Exchange Act of 1934, as amended. The words "believe," "expect," "plans," "intend," "project," "estimate," "may," "should," "will," "continue," "potential," "forecast" and "anticipate" and similar expressions identify forward-looking statements. Any such statements involve known and unknown risks, uncertainties and other factors, including those set forth under the heading "Risk Factors" in the Company's filings with the Securities and Exchange Commission. Such factors may cause AmCOMP's actual performance, condition and achievements to be materially different than any future performance, condition and achievement set forth in this press release. All subsequent written and oral forward-looking statements attributable to us or individuals acting on our behalf are expressly qualified in their entirety The whole, in contradistinction to a moiety or part only. When land is conveyed to Husband and Wife, they do not take by moieties, but both are seised of the entirety. by these cautionary statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Set forth in the tables below are summary results of operations for the three months ended March 31, 2006 and 2005, as well as selected balance sheet data as of March 31, 2006 and December 31, 2005. The following information is preliminary and unaudited and is subject to change until final results are publicly distributed.
AmCOMP Incorporated and Subsidiaries
Consolidated Statements of Operations
(in thousands, except per share amounts and ratios)
(unaudited)
Three Months Ended
March 31,
--------------------
2006 2005
------ ------
Statement of Operations Data:
Revenues:
Net premiums earned $65,970 $61,087
Net investment income 4,043 2,029
Net realized investment gain (loss) 1 (80)
Other income 85 86
------- -------
Total revenue $70,099 $63,122
======= =======
Expenses:
Losses and loss adjustment expenses $37,467 $36,535
Policy acquisition expenses 12,813 6,822
Underwriting and other expenses 6,988 8,855
Dividends to policyholders 2,663 1,990
Interest expense 838 700
------- -------
Total expenses $60,769 $54,902
======= =======
Income before income taxes 9,330 8,220
Income tax expense 3,355 2,893
Net income $5,975 $5,327
======= =======
Operating Data:
Direct premiums written $88,380 $85,545
Gross premiums written 89,540 88,053
Net premiums written 86,696 87,176
Per Share Data:
Earnings per share
Basic $0.54 $0.99
Diluted 0.46 0.56
Weighted average common shares outstanding
Basic 11,029 5,367
Diluted 12,892 9,562
AmCOMP Incorporated and Subsidiaries
Consolidated Statements of Operations
(in thousands, except per share amounts and ratios)
(unaudited)
Three Months Ended
March 31,
-------------------
2006 2005
------ ------
Selected Insurance Ratios:
Net loss ratio(1) 56.8% 59.8%
------ ------
Net policy acquisition expense ratio(2) 19.4% 11.2%
------ ------
Underwriting and other expense ratio(3) 10.6% 14.5%
------ ------
Net combined ratio, excluding policyholder
dividends(4) 86.8% 85.5%
------ ------
Dividend ratio(5) 4.0% 3.3%
------ ------
Net combined ratio, including policyholder
dividends(6) 90.8% 88.8%
------ ------
(1) Losses and LAE divided by net premiums earned, after the effects
of reinsurance.
(2) Policy acquisition expenses divided by net premiums earned.
(3) Underwriting and other expenses divided by net premiums earned.
(4) Sum of ratios computed in footnotes 1, 2 and 3.
(5) Dividends to policyholders divided by net premiums earned.
(6) Sum of ratios computed in footnotes 1, 2, 3 and 5.
AmCOMP Incorporated and Subsidiaries
Consolidated Balance Sheets
(in thousands)
(unaudited)
March 31, December 31,
2006 2005
--------- ------------
Assets
Cash and investments $396,194 $332,196
Premiums receivable--net 121,693 104,522
Reinsurance recoverables 89,497 83,880
Deferred policy acquisition costs 23,773 19,413
Deferred income taxes 22,695 20,871
Other assets 19,794 22,445
------- -------
Total assets $673,646 $583,327
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Liabilities and stockholder's equity
Unpaid losses and loss adjustment expenses $319,777 $309,857
Unearned and advance premiums 135,396 115,574
Long term debt 39,589 40,036
Other liabilities 54,954 45,879
Total liabilities 549,716 511,346
------- -------
Preferred stock --- 23,098
Total stockholders' equity 123,930 71,981
------- -------
Total liabilities and stockholder's equity $673,646 $583,327
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