American Safety Insurance Group, Ltd. Reports Fourth Quarter and Year-End Results.Business Editors HAMILTON Hamilton, city, Bermuda Hamilton, city (1990 est. pop. 3,100), capital of Bermuda, on Bermuda Island. It is a port at the head of Great Sound, a huge lagoon and deepwater harbor protected by coral reefs. , Bermuda--(BUSINESS WIRE)--March 20, 2002 Net Profit for Fourth Quarter and Fiscal Year 2001 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 Safety Insurance Group, Ltd. (NYSE NYSE See: New York Stock Exchange : ASI ASI, n See Anxiety Sensitivity Index. ) today announced results for the fourth quarter and the fiscal year ended December December: see month. 31, 2001. Total revenues for the fourth quarter of 2001 increased 311% to $46,558,298 over the same quarter of 2000. Net premiums earned for the fourth quarter of 2001 increased 105% to $20,041,666 over the same quarter of 2000. Net earnings for the fourth quarter of 2001 decreased 23% to $328,072, or $.07 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 on 4.9 million average shares outstanding, compared with $423,867, or $0.08 per diluted share on 5.2 million average shares outstanding for the fourth quarter of 2000. Total revenues for 2001 increased 184% to $102,349,917 from $36,078,355 in 2000. Net premiums earned for 2001 increased 142% to $64,786,816 from $26,804,650 in 2000. Net earnings for the year ended December 31, 2001 increased to $4,154,269 or $0.84 per diluted share on 4.9 million average shares outstanding, compared to a loss of $1,363,157 or $.25 per diluted share on 5.5 million average shares outstanding for 2000. In connection with the development of the Harbour Village Golf & Yacht yacht: see motorboating; sailing. yacht Sail- or motor-driven vessel used for racing or recreation. The term is popularly applied to large recreational engine-powered boats; the sailboats known as yachts and used for racing are usually light and Club in Ponce Inlet, Florida Ponce Inlet is a town in Volusia County, Florida, United States. The population was 2,513 at the 2000 census. As of 2004, the population recorded by the U.S. Census Bureau is 3,178 [1]. , during the fourth quarter of 2001, 90 condominium condominium In modern property law, individual ownership of one dwelling unit within a multidwelling building. Unit owners have undivided ownership interest in the land and those portions of the building shared in common. units and 53 boat slips were closed in Phase 1, resulting in total revenues of $24.4 million and pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta income of $2.8 million. For the year, 102 condominium units and 59 boat slips were closed in Phase 1, resulting in total revenues of $27.6 million and pre-tax income of $2.4 million. The book value of the Company increased 11% to $12.77 per share at December 31, 2001 as compared to $11.53 for 2000 in large part due to the Company's profit for the year. The Company has repurchased over 189,000 shares under the current 500,000 share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. authorization The right or permission to use a system resource; the process of granting access. See access control. . Commenting on the results, Lloyd A. Fox, President and Chief Executive Officer, said, "While we are pleased with our profitability in the fourth quarter and for the year, our earnings from insurance operations in 2001 were negatively impacted by adverse development in our contract surety An individual who undertakes an obligation to pay a sum of money or to perform some duty or promise for another in the event that person fails to act. surety n. line of business, due to the economic slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. last year. We believe that our reserves are adequate and that this adverse development is behind us. Overall, ultimate loss ratios improved in 2001 over 2000 as a result of the Company's focus on writings in our most profitable lines of business. As the insurance market continues to harden hard·en v. hard·ened, hard·en·ing, hard·ens v.tr. 1. To make hard or harder. 2. To enable to withstand physical or mental hardship. 3. , we expect loss ratios to continue to improve in 2002. We are also pleased with the continuing progress of our Harbour Village Golf & Yacht Club development, where units in Phase 1 have been closing, and pre-sales in Phase 2 are continuing. We believe that opportunities presented in our insurance lines of business and the continuing progress of the Harbour Village development will provide significant profitability to our shareholders in 2002." During the fourth quarter of 2001, one of the Company's former reinsurers, Berkley Berkley (bûr`klē), city (1990 pop. 16,960), Oakland co., SE Mich., a suburb of Detroit; inc. 1932. It is chiefly residential. Insurance Company, disputed its obligations under several reinsurance treaties Reinsurance Treaty (June 18, 1887) Secret agreement between Germany and Russia. Arranged by Otto von Bismarck after the collapse of the Three Emperors' League, it provided that each party would remain neutral if either became involved in a war with a third nation, and that entered into during the "soft 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. market" that existed in 1998 and 1999. As a result of adverse loss experience to the reinsurer re·in·sure tr.v. re·in·sured, re·in·sur·ing, re·in·sures To insure again, especially by transferring all or part of the risk in a contract to a new contract with another insurance company. from certain lines of business, Berkley has stopped reimbursing the Company for amounts due under such treaties and has requested that the Company retroactively ret·ro·ac·tive adj. Influencing or applying to a period prior to enactment: a retroactive pay increase. [French rétroactif, from Latin consider taking a greater portion of the losses than is required under the treaties. The Company is discussing resolution of this matter with Berkley, although the Company believes the reinsurer's request has no merit and was made in bad faith. If this dispute cannot be resolved, the Company will institute legal and arbitration arbitration Process of resolving a dispute or a grievance outside a court system by presenting it for decision to an impartial third party. Both sides in the dispute usually must agree in advance to the choice of arbitrator and certify that they will abide by the proceedings against the reinsurer. Berkley is a subsidiary of W.R. Berkley Corp. (NYSE: BER (1) (Basic Encoding Rules) A set of encoding rules for ASN.1 notation, which is a method for defining data structures. See ASN.1. (2) (Bit Error Rate) The average number of bits transmitted in error. See BERT. 1. ). The Company does not believe this dispute will have a material adverse effect on the overall financial condition or liquidity of the Company. A conference call to discuss fourth quarter and the fiscal 2001 year end results is scheduled for Thursday Thursday: see week. , March 21, at 11:00 a.m. E.S.T., which will be broadcast through the Investor Broadcast Network's Vcall website at http://www.vcall or the Company's website at http://www.americansafetygroup.com. American Safety Insurance Group, Ltd. is a specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. insurance holding company which, through its subsidiaries, develops, underwrites, manages and markets primary casualty insurance and reinsurance programs in the alternative insurance market for environmental risks and other specialty risks. The Company is also the owner/developer of the Harbour Village Golf & Yacht Club, a residential condominium, marina Marina “a piece of virtue.” [Br. Lit.: Pericles] See : Virtuousness , par 3 golf course and beach club development in Ponce Inlet, Florida. Additional information about American Safety can be found at http://www.americansafetygroup.com. This press release contains 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. . These forward-looking statements reflect the Company's current views with respect to future events and financial performance, including the Company's future profitability and the value of the Company's real estate development project. Forward-looking statements involve risks and uncertainties which may cause actual results to differ materially, and are subject to change based on various factors, including competitive conditions in the insurance industry, levels of new and renewal insurance business, unpredictable developments in loss trends, adequacy and changes in loss reserves, collectibility of reinsurance recoverables, market acceptance of new coverages and enhancements, changes in reinsurance costs and availability, and changes in levels of general business activity and economic conditions. With respect to the development of the Harbour Village property, such forward looking statements involve risks and uncertainties which may cause actual results to differ materially, and are subject to change based on various real estate development industry factors, including competitive housing conditions housing conditions npl → condiciones fpl de habitabilidad housing conditions npl → conditions fpl de logement in the local market area, risks inherent in real estate development and new construction, increases in construction costs, construction delays, weather, zoning, 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. , changes in interest rates and the availability of mortgage financing for prospective purchasers of condominium units and boat slips, and changes in local and national levels of general business activity and economic conditions. For additional factors, which could influence the results of the Company's operating and financial performance, see the Company's filings with the Securities and Exchange Commission.
AMERICAN SAFETY INSURANCE GROUP, LTD.
Financial and Operating Highlights
Three Months Ended Twelve Months Ended
December 31 December 31
2001 2000 2001 2000
------------------ -------------------
INCOME STATEMENT DATA:
Revenues:
Direct and assumed
premiums earned $48,263,417 $23,187,858 $146,764,844 $54,078,449
Ceded premiums earned (28,221,751)(13,419,953) (81,978,028)(27,273,799)
----------- ----------- ------------ -----------
Net premiums earned 20,041,666 9,767,905 64,786,816 26,804,650
Net investment income 940,600 603,588 3,649,985 2,605,218
Interest on notes receivable - 278,535 766,937 1,531,183
Brokerage commission
income 695,783 451,455 2,410,810 3,291,605
Management fees from
related party 401,406 356,248 1,496,068 1,424,986
Net realized gains (losses)50,876 (302,794) 652,230 (517,857)
Real Estate Income 24,380,299 - 27,561,004 -
Other income 47,668 170,621 1,026,067 938,570
Total revenues 46,558,298 11,325,558 102,349,917 36,078,355
----------- ----------- ------------ -----------
Expenses:
Losses and loss
adjustment expenses 15,484,486 6,704,698 43,986,019 18,506,290
Acquisition expenses 3,446,488 704,371 12,248,342 3,792,040
Payroll and related
expenses 1,983,038 2,057,682 8,238,355 7,561,311
Real Estate Expenses 21,546,907 175,287 25,125,848 542,444
Other Expenses 2,534,153 1,178,982 6,835,780 4,654,307
Expense due to rescission 600,000 - 600,000 3,541,848
----------- ----------- ------------ -----------
Total expenses 45,595,072 10,821,020 97,034,344 38,598,240
----------- ----------- ------------ -----------
Earnings before
income taxes 963,226 504,538 5,315,573 (2,519,885)
Income taxes 635,154 80,671 1,161,304 (1,156,728)
----------- ----------- ------------ -----------
Net earnings (loss) $ 328,072 $ 423,867 $ 4,154,269 $(1,363,157)
=========== =========== ============ ===========
Net earnings (loss) per share
Basic $ 0.07 $ 0.08 $ 0.87 $ (0.25)
=========== =========== ============ ===========
Diluted $ 0.07 $ 0.08 $ 0.84 $ (0.25)
=========== =========== ============ ===========
Average number of shares outstanding:
Basic 4,721,123 5,159,372 4,797,371 5,496,106
=========== =========== ============ ===========
Diluted 4,893,299 5,159,372 4,933,167 5,497,434
=========== =========== ============ ===========
GAAP combined ratio 101.3% 78.7% 92.8% 87.6%
=========== =========== ============ ===========
BALANCE SHEET DATA: December 31 December 31
2001 2000
Total investments $ 83,578,373 $ 61,460,355
Total assets 297,261,617 207,298,116
Unpaid losses and loss adjustment
expenses 121,423,039 50,508,627
Total liabilities 237,281,279 149,494,971
Total shareholders' equity 59,980,338 57,803,145
Book value per share $ 12.77 $ 11.53
Harbour Village Development Status
(000)s except references to Condo Units
Phase 1
--------------------------------------------------
Buildings
--------------------------------------------------
100 200 300 400 500 600 700 800
12/31/01
---------
Planned Number
of Condo Units
and Boat Slips 32 32 32 32 24 32 32 32
Condo Units and
Boat Slips
under Contract 32 32 32 32 23 30 31 31
Value of Pre-sale
Contracts
(Note 1) 7,643 7,312 7,607 7,963 6,321 8,146 8,649 7,798
Building Foundation
Completed Yes Yes Yes Yes Yes Yes Yes Yes
Vertical Building
Completed Yes Yes Yes Yes Yes Yes Yes Yes
Interior Finish
Completed Yes Yes Yes Yes No No No No
Certificate of
Occupancy
Received Yes Yes Yes Yes No No No No
Actual 12/31/2001 YTD
---------------------
Units Closed 32 32 30 8 - - - -
Revenue Recognized on
Units and Docks 7,528 7,082 6,933 1,921 - - - -
Other Revenue
Total Revenue
Gross Profit
Recognized 897 596 615 255 - - - -
Other Expense
(Income) Items
Pre-Tax Profit
Actual 12/31/2001 QTD
---------------------
Units Closed 20 32 30 8 - - - -
Revenue
Recognized 4,861 7,082 6,933 1,921 - - - -
Other Revenue
Total Revenue
Gross Profit
Recognized 625 596 615 255 - - - -
Other Expense
(Income) Items
Pre-Tax Profit
Projected First Quarter 2002
----------------------------
Projected Unit
Closings - - 2 24 4 - - 30
Projected Revenue
Recognized 65 68 432 5,872 1,250 - - 7,209
Projected Other
Revenue
Total Projected
Revenue
Projected Gross
Profit 1 2 35 769 138 - - 901
Projected Other Expense
(Income) - Net
Projected Pre-Tax Profit
Note 1 - No assurance can be given that purchasers under binding
pre-sale contracts with deposits will close each contemplated
transaction.
Note 2 - Other includes net brokerage commissions, advertising,
promotion, and other general and administrative costs. These items are
not allocated to specific buildings. The projected results contained
above for unit closings, revenue, gross profit, fixed costs and
pre-tax profit are forward looking statements. With respect to the
Company's development of the Harbour Village property, such forward
looking statements involve risks and uncertainties which may cause
actual results to differ materially, and are subject to change based
on various real estate development industry factors, including
competitive housing conditions in the local market area, risks
inherent in real estate development and new construction, increases in
construction costs, construction delays, weather, zoning, litigation,
changes in interest rates and the availability of mortgage financing
for prospective purchasers of condominium units and boat slips, and
changes in local and national levels of general business activity and
economic conditions.
Harbour Village Development Status
(000)s except references to Condo Units
Phase 2
---------------------------------------------------
Townhouses 8 Buildings
Oak The Total Boat
Hammock Riverwalk Links Condos Slips Total
---------------------------------------------------
12/31/01
---------
Planned Number
of Condo Units
and Boat Slips 18 28 376 670 142 812
Condo Units and
Boat Slips
under Contract 14 26 82 365 135 500
Value of Pre-sale
Contracts
(Note 1) 6,384 9,729 20,342 97,894 12,213 110,107
Building Foundation
Completed No No No
Vertical Building
Completed No No No
Interior Finish
Completed No No No
Certificate of
Occupancy
Received No No No
Actual 12/31/2001 YTD
---------------------
Units Closed - - 102 59 161
Revenue Recognize
Units and Docks - - 23,464 4,008 27,472
Other Revenue 89
-------
Total Revenue 27,561
Gross Profit
Recognized - - 2,363 1,678 4,041
Other Expense
(Income) Items 1,606
Pre-Tax Profit 2,435
Actual 12/31/2001 QTD
---------------------
Units Closed - - 90 53 143
Revenue
Recognized - - 20,797 3,495 24,292
Other Revenue 88
-------
Total Revenue 24,380
Gross Profit
Recognized - - 2,091 1,465 3,556
Other Expense
(Income) Items 723
Pre-Tax Profit 2,833
Projected First Quarter 2002
----------------------------
Projected Unit
Closings - - 60 21 81
Projected Revenue
Recognized - - 14,896 1,659 16,555
Projected Other
Revenue 186
-------
Total Projected
Revenue 16,741
Projected Gross
Profit - - 1,846 674 2,520
Projected Other Expense
(Income) - Net 519
Projected Pre-Tax Profit 2,001
Note 1 - No assurance can be given that purchasers under binding
pre-sale contracts with deposits will close each contemplated
transaction.
Note 2 - Other includes net brokerage commissions, advertising,
promotion, and other general and administrative costs. These items are
not allocated to specific buildings. The projected results contained
above for unit closings, revenue, gross profit, fixed costs and
pre-tax profit are forward looking statements. With respect to the
Company's development of the Harbour Village property, such forward
looking statements involve risks and uncertainties which may cause
actual results to differ materially, and are subject to change based
on various real estate development industry factors, including
competitive housing conditions in the local market area, risks
inherent in real estate development and new construction, increases in
construction costs, construction delays, weather, zoning, litigation,
changes in interest rates and the availability of mortgage financing
for prospective purchasers of condominium units and boat slips, and
changes in local and national levels of general business activity and
economic conditions.
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