American Safety Insurance Group, Ltd. Reports Second Quarter Loss.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)--Aug. 3, 2000 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 second quarter and six months ended June June: see month. 30, 2000. Net operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before for the second quarter of 2000 decreased to a loss of $412,433, 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 5.5 million average shares outstanding, compared with earnings of $1,342,422, or $.22 per diluted share on 6.1 million average shares outstanding for the second quarter of 1999. Net earnings for the second quarter of 2000 decreased to a loss of $492,097, or $.09 per diluted share, compared with earnings of $1,441,397, or $.24 per diluted share, for the second quarter of 1999. Total revenues for the second quarter of 2000 increased 40% to $8,137,867 compared with $5,825,595 for the same quarter of 1999. Net premiums earned for the second quarter of 2000 increased 68% to $6,056,533 over the same quarter of 1999. For the six months ended June 30, 2000, net operating earnings decreased to a loss of $2,235,139, or $.39 per diluted share on 5.7 million average shares outstanding (including the first quarter charge due to the Company's rescission The abrogation of a contract, effective from its inception, thereby restoring the parties to the positions they would have occupied if no contract had ever been formed. By Agreement of the acquisition of the Michigan Michigan (mĭsh`ĭgən), upper midwestern state of the United States. It consists of two peninsulas thrusting into the Great Lakes and has borders with Ohio and Indiana (S), Wisconsin (W), and the Canadian province of Ontario (N,E). agency and two related insurance companies), compared with earnings of $3,062,718, or $.50 per diluted share on 6.1 million average shares outstanding over the same period in 1999. Net earnings decreased to a loss of $2,440,850, or $.43 per diluted share, compared with earnings of $3,160,575, or $.52 per diluted share for the same period in 1999. Total revenues increased 46% to $15,731,766 compared with $10,755,220 over the same period in 1999. Net premiums earned increased 88% to $11,359,111 over the same period in 1999. Total net investment income and interest on notes receivable decreased 24% to $2,208,976 compared to the same period in 1999. Commenting on the results, Lloyd A. Fox, President and Chief Executive Officer, said "We are pleased with the continued growth of our insurance operations during the second quarter, which resulted in a 68% increase in net premiums earned and a 40% increase in total revenues over the same period in the prior year. For the first six months of 2000, net premiums earned increased 88% and total revenues increased 46% over the same six month period in the prior year. The net operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. sustained during the second quarter was in large part attributable to additional overhead and expense for new operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon that we have added, including the 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. 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. management group that was added during the second quarter. The significant investments that we have made in experienced personnel in our insurance and financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. units are beginning to show increased production, and we expect that these underwriting groups will result in profitable operations as they continue to build their businesses this year. We are also very pleased that the A.M. Best Company has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the 'A' (Excellent) rating of our insurance companies and issued an 'A' rating for our newly acquired excess and surplus lines company, American Safety Indemnity Recompense for loss, damage, or injuries; restitution or reimbursement. An indemnity contract arises when one individual takes on the obligation to pay for any loss or damage that has been or might be incurred by another individual. Company. We look forward to continued production growth in our insurance and financial services operations as the year proceeds. 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, we successfully closed a $37 million acquisition, development and construction loan for the development in July July: see month. 2000, and significant construction activity is ongoing." American Safety Insurance Group, Ltd. is a specialty insurance and financial services company which, through its subsidiaries, develops, underwrites, manages and markets primary casualty insurance and reinsurance programs in the alternative insurance market for environmental risks, employee leasing and staffing industry risks, and other specialty risks, and provides a broad range of financial services and products to middle market businesses. 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. Forward-looking statements involve risks and uncertainties which may cause actual results to differ, and are subject to change based on various factors, including, the outcome of the Company's lawsuit lawsuit: see procedure; tort. for rescission of the acquisition of an insurance agency and two related insurance companies, competitive conditions in the insurance industry, unpredictable developments in loss trends, adequacy and changes in loss reserves, market acceptance of new coverages and enhancements, 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, and are subject to change based on various 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 new construction, changes in interest rates and the availability of mortgage financing for prospective purchasers of 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 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. AND SUBSIDIARIES
Financial and Operating Highlights
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2000 1999 2000 1999
------ ------ ------ ------
INCOME STATEMENT DATA:
Revenues:
Direct and assumed
premiums earned $ 9,466,420 $ 4,685,371 $17,273,035 $ 8,485,139
Ceded premiums
earned (3,409,887) (1,084,990) (5,913,924) (2,429,974)
---------- ---------- ---------- ----------
Net premiums earned 6,056,533 3,600,381 11,359,111 6,055,165
Net investment income 604,905 714,430 1,334,007 1,413,765
Interest on notes
receivable 440,375 581,460 874,969 1,507,562
Brokerage commission
income 722,128 63,367 952,638 494,234
Management fees from
related party 351,346 384,454 718,346 725,588
Net realized gains (79,664) 98,975 (205,711) 97,857
Other income 42,244 382,528 698,406 461,049
---------- ---------- ---------- ----------
Total revenues 8,137,867 5,825,595 15,731,766 10,755,220
---------- ---------- ---------- ----------
Expenses:
Losses and loss
adjustment expenses 4,023,727 2,100,175 6,820,826 3,419,530
Acquisition expenses 1,247,401 347,972 2,782,831 671,416
Payroll and related
expenses 1,953,834 1,339,051 3,582,058 2,342,687
Other expenses 1,696,065 705,261 2,806,375 1,315,003
Expense due to
rescission - - 3,541,848 -
---------- ---------- ---------- ----------
Total expenses 8,921,027 4,492,459 19,533,938 7,748,636
---------- ---------- ---------- ----------
Earnings before
income taxes (783,160) 1,333,136 (3,802,172) 3,006,584
Income taxes (291,063) (108,261) (1,361,322) (153,991)
---------- ---------- ---------- ----------
Net earnings $(492,097) $1,441,397 $(2,440,850) $3,160,575
========== ========== ========== ==========
Net earnings per share:
Basic $(0.09) $0.24 $(0.43) $0.52
========== ========== ========== ==========
Diluted $(0.09) $0.24 $(0.43) $0.52
========== ========== ========== ==========
Average number of
shares outstanding:
Basic 5,525,804 6,064,010 5,726,229 6,070,823
========== ========== ========== ==========
Diluted 5,525,804 6,087,809 5,728,900 6,099,941
========== ========== ========== ==========
GAAP combined ratio 90.0% 72.0% 93.3% 71.3%
========== ========== ========== ==========
BALANCE SHEET DATA: JUNE 30, December 31,
2000 1999
Total investments $ 58,610,501 $ 59,648,157
Total assets 128,577,935 104,353,534
Unpaid losses and loss adjustment
expenses 24,903,442 20,413,236
Total liabilities 71,412,277 43,314,774
Total shareholders' equity 57,165,658 61,038,760
Book value per share $ 10.62 $ 10.56
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