American Independence Corp. Announces Net Income for the 2006 First Quarter.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 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 net income of $.4 million ($.05 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 $.2 million, for the three months ended March 31, 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 March 31, 2005. The decrease in income in the first quarter of 2006, as compared to the first quarter of 2005, is largely due to an increase in the loss ratio on the Company's medical stop-loss business and a reduction in fee income due to lower premiums produced by our MGU's and lower profit commissions due to higher loss ratios in previous years. Revenues amounted to $19.4 million for the three months ended March 31, 2006, compared to revenues of $20.1 million for the three months ended March 31, 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. 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 March 31, 2006 was $.7 million ($.08 per share, diluted) as compared to $2.0 million ($.24 per share, diluted) for the three months ended March 31, 2005. Roy T.K. Thung, Chief Executive Officer, commented, "Our results continue to be adversely affected by the higher loss ratios on Medical Stop-Loss business, which caused (i) 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 for our MGUs. Premiums, and the corresponding fee income, were reduced due to corrective underwriting actions taken in order to increase insurance company profitability. On the brighter side, our current block of medical stop-loss is performing well due to business written in 2005 and 2006, which appears to be more profitable than that incepting in 2004. In addition, Independence American has continued to ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale its fully-insured medical segment, premiums from which will begin impacting the 2006 year, and are expected to have an even greater effect in 2007 and beyond. Independence American has also secured a license in North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. , which is an important state because a substantial portion of the fully-insured medical business that Employers Direct Health ("EDH") will transfer to Independence American is produced in that state. EDH has begun to submit to us medical stop-loss quotes and the bulk of all of its health business will be transferred in 2007. Independence American is now licensed in 37 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." 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. 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.
FIRST QUARTER REPORT
(in Thousands Except Per Share Data)
Three Months Ended
March 31,
--------------------
2006 2005
--------- ---------
Premiums earned $ 16,011 $ 15,568
MGU fee income 2,639 3,855
Net Investment income 759 523
Net realized gains (losses) (10) 43
Other income 4 73
--------- ---------
Revenues 19,403 20,062
--------- ---------
Insurance benefits, claims and reserves 10,965 10,065
Selling and general expenses 7,546 7,634
Amortization and depreciation 191 279
Other expenses 65 161
--------- ---------
Expenses 18,767 18,139
--------- ---------
Income from continuing operations before income
tax 636 1,923
Provision for income tax 243 729
--------- ---------
Income from continuing operations 393 1,194
--------- ---------
Net Income $ 393 $ 1,194
========= =========
Basic Income Per Common Share:
Income from continuing operations $ .05 $ .14
--------- ---------
Net Income $ .05 $ .14
========= =========
Weighted average basic common shares 8,451 8,442
========= =========
Diluted Income Per Common Share:
Income from continuing operations $ .05 $ .14
--------- ---------
Net Income $ .05 $ .14
========= =========
Weighted average diluted common shares 8,490 8,530
========= =========
As of March 31 2006, there were 8,451,223 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 Ended
March 31,
------------------
2006 2005
-------- --------
Income from continuing operations $ 393 $ 1,194
Amortization of intangible assets related to
purchase accounting 116 202
Federal income tax charge related to deferred taxes 201 616
-------- --------
Income from continuing operations excluding
amortization and Federal income tax charge $ 710 $ 2,012
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Non - GAAP Basic Income Per Common Share:
Income from continuing operations excluding
amortization and Federal income tax charge $ .08 $ .24
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Non - GAAP Diluted Income Per Common Share:
Income from continuing operations excluding
amortization and Federal income tax charge $ .08 $ .24
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