American Independence Corp. Announces 2006 Second Quarter and Six Months Results.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Independence Corp. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : AMIC Am´ic a. 1. (Chem.) Related to, or derived, ammonia; - used chiefly as a suffix; as, amic acid; phosphamic acid. s> Amic acid (Chem. ) today reported 2006 second quarter and six months results. Financial Results Net income was $.4 million ($.04 per share, 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. ), net of a provision for income taxes of $.3 million, for the three months ended June June: see month. 30, 2006 compared to $1.2 million ($.14 per share, diluted), net of a provision for income taxes of $.7 million for the three months ended June 30, 2005. Revenues amounted to $19.8 million for the three months ended June 30, 2006, compared to revenues of $21.1 million for the three months ended June 30, 2005. For as long as AMIC utilizes its net operating loss carryforwards Net operating loss carryforwards Application of losses to offset earnings in future years. , it will not pay any income taxes, except for Federal alternative minimum taxes and state income taxes. AMIC also reported net income of $.8 million ($.09 per share, diluted) for the six months ended June 30, 2006 compared to $2.4 million ($.28 per share, diluted) for the six months ended June 30, 2005. Revenues amounted to $39.2 million for the six months ended June 30, 2006, compared to revenues of $41.1 million for the six months ended June 30, 2005. The decrease in income for the three months and six months ended June 30, 2006, as compared to the comparable periods in 2005, is largely due to an increase in the loss ratio on medical stop-loss stop-loss, n a general term referring to that category of coverage that provides insurance protection (reinsurance) to an employer for a self-funded plan. business written prior to 2006, a reduction in fee income due to lower premiums produced by our MGUs, and lower profit commissions received by our MGUs due to higher loss ratios in previous years. On a non-GAAP basis, the Company's income from 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 excluding amortization and Federal income tax charge related to deferred taxes for the three months ended June 30, 2006 was $.8 million ($.09 per share, diluted) as compared to $2.1 million ($.24 per share, diluted) for the three months ended June 30, 2005. On a non-GAAP basis, the Company's income from continuing operations excluding amortization and Federal income tax charge related to deferred taxes for the six months ended June 30, 2006 was $1.5 million ($.17 per share, diluted) as compared to $4.1 million ($.48 per share, diluted) for the six months ended June 30, 2005. Chief Executive Officer's Comments Roy Roy, city (1990 pop. 24,603), Weber co., N Utah, near Great Salt Lake; settled by Mormons 1877, inc. 1937. Computer equipment is manufactured, and many residents work at nearby Hill Air Force Base. Thung, Chief Executive Officer, commented, "Our results continue to be adversely affected by (i) further development on Medical Stop-Loss business incepting in 2005 and, to a lesser extent, in 2004, which caused reduced 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. profitability for Independence American, (ii) lower MGU MGU Most General Unifier MGU Managing General Underwriter (insurance) MGU Mahatma Gandhi University (Kerala India) MGU Movement for Guatemalan Unity MGU Midcourse Guidance Unit fee income as a result of corrective cor·rec·tive adj. Counteracting or modifying what is malfunctioning, undesirable, or injurious. n. An agent that corrects. corrective, n underwriting actions that reduced medical stop-loss premiums and (iii) lower fee income from profit commissions received by our MGUs. Premiums, and the corresponding fee income, were reduced due to corrective underwriting actions taken in order to increase insurance company profitability. We believe that the experience on business written in 2004 should now be nearly complete; consequently, we believe that business written in 2005 will be nearing completion during the second quarter of 2007. Based upon our best estimate, the experience on business incepting in 2005 is tracking significantly better than business written in 2004, and business written in 2006 is tracking better than business incepting in 2005 at this point in time. As a result, we anticipate that future quarters results will improve, especially commencing with the first quarter of 2007. Independence American is now licensed in 39 states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). , and we are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that we can add additional state licenses this year, which will position us to continue to further expand our fully-insured health business. We expect that our fully-insured health premium will accelerate beginning in the first quarter of 2007 due to the previously-announced marketing relationship." Non-GAAP Financial Measures The Company provides non-GAAP financial measures to complement its consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . These non-GAAP financial measures are intended to supplement the user's overall understanding of the Company's current financial performance and its prospects for the future. Specifically, the Company believes the non-GAAP results provide useful information to both management and investors by identifying certain expenses that, when excluded from the GAAP results, may provide additional understanding of the Company's core operating results or business performance. However, these non-GAAP financial measures are not intended to supersede To obliterate, replace, make void, or useless. Supersede means to take the place of, as by reason of superior worth or right. A recently enacted statute that repeals an older law is said to supersede the prior legislation. or replace the Company's GAAP results. A reconciliation of the non-GAAP results to the GAAP results is provided in the "Reconciliation of GAAP Income from Continuing Operations to Non-GAAP Income from Continuing Operations" schedule below. Operating results reported on a non-GAAP basis exclude non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. related to the amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. recorded in purchase accounting and the Federal income tax charge related to deferred taxes. About American Independence Corp. AMIC is a holding company principally engaged in the employer Medical Stop-Loss and managed care insurance and reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. business through Independence American Insurance Company and its managing general underwriter underwriter n. a company or person which/who underwrites an insurance policy, issue of corporate securities, business, or project. (See: underwrite) UNDERWRITER, insurances. One who signs a policy of insurance, by which he becomes an insurer. division. Some of the statements included herein may be considered to be forward looking statements that are subject to certain risks and uncertainties. Factors which could cause the actual results to differ materially from those suggested by such statements are described from time to time in AMIC's filings with the Securities and Exchange Commission.
AMERICAN INDEPENDENCE CORP.
SECOND QUARTER REPORT
JUNE 30, 2006
(in Thousands Except Per Share Data)
Three Months Six Months
Ended Ended
June 30, June 30,
--------------- ---------------
2006 2005 2006 2005
------- ------- ------- -------
Premiums earned $16,346 $16,782 $32,357 $32,350
MGU fee income 2,593 3,489 5,232 7,344
Net investment income 800 607 1,559 1,130
Net realized gains 28 171 18 214
Other income 4 19 8 92
------- ------- ------- -------
Revenues 19,771 21,068 39,174 41,130
------- ------- ------- -------
Insurance benefits, claims and
reserves 11,372 10,111 22,337 20,176
Selling and general expenses 7,493 8,576 15,039 16,210
Amortization and depreciation 188 271 379 550
Minority interest 53 147 118 308
------- ------- ------- -------
Expenses 19,106 19,105 37,873 37,244
------- ------- ------- -------
Income from continuing operations
before income tax 665 1,963 1,301 3,886
Provision for income tax 257 742 500 1,471
------- ------- ------- -------
Income from continuing operations 408 1,221 801 2,415
Gain (loss) on disposition of
discontinued operations, net of tax (54) - (54) -
------- ------- ------- -------
Net income $ 354 $ 1,221 $ 747 $ 2,415
======= ======= ======= =======
Basic Income Per Common Share:
Income from continuing operations $ .05 $ .14 $ .10 $ .29
Gain (loss) on disposition of
discontinued operations, net of tax (.01) - (.01) -
------- ------- ------- -------
Net income $ .04 $ .14 $ .09 $ .29
======= ======= ======= =======
Weighted average basic common shares 8,451 8,447 8,451 8,445
======= ======= ======= =======
Diluted Income Per Common Share:
Income from continuing operations $ .05 $ .14 $ .10 $ .28
Gain (loss) on disposition of
discontinued operations, net of tax (.01) - (.01) -
------- ------- ------- -------
Net income $ .04 $ .14 $ .09 $ .28
======= ======= ======= =======
Weighted average diluted common
shares 8,504 8,545 8,504 8,546
======= ======= ======= =======
As of June 30, 2006, there were 8,451,223 common shares outstanding, net of treasury shares.
RECONCILIATION OF GAAP INCOME FROM CONTINUING OPERATIONS TO NON-GAAP
INCOME FROM CONTINUING OPERATIONS
(In Thousands Except Per Share Data)
Three Months Six Months
Ended Ended
June 30, June 30,
------------ -------------
2006 2005 2006 2005
----- ------ ------ ------
Income from continuing operations $ 408 $1,221 $ 801 $2,415
Amortization of intangible assets related
to purchase accounting 127 202 243 405
Federal income tax charge related to
deferred taxes 218 640 419 1,256
----- ------ ------ ------
Income from continuing operations
excluding amortization and federal
income tax charge $ 753 $2,063 $1,463 $4,076
===== ====== ====== ======
Non - GAAP Basic Income Per Common Share:
Income from continuing operations
excluding amortization and federal
income tax charge $ .09 $ .24 $ .17 $ .48
===== ====== ====== ======
Non - GAAP Diluted Income Per Common
Share:
Income from continuing operations
excluding amortization and federal
income tax charge $ .09 $ .24 $ .17 $ .48
===== ====== ====== ======
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