American Safety Insurance Group, Ltd. Reports Third Quarter 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)--Nov. 6, 2002 Net Profit up 6% for Third Quarter 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 third quarter of 2002. Total revenues for the third quarter of 2002 increased 53.2% to $30,735,954 over the same quarter of 2001. Net premiums earned for the third quarter of 2002 increased 31% to $18,784,180 over the same quarter of 2001. This increase in net premiums was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to a 122% increase in environmental, excess and surplus lines, and program business premiums, offset by a 71% decrease in the Company's de-emphasized 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. , 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. , and commercial business lines. Net earnings for the third quarter of 2002 increased 5.6% to $1,033,529, or $0.21 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 $978,753, or $0.20 per diluted share on 5.0 million average shares outstanding for the third quarter of 2001. During the third quarter, the Company recorded $1.2 million of additional 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 expense relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc an adverse summary judgment ruling in our previously reported rescission lawsuit lawsuit: see procedure; tort. filed in April 2000 against the sellers of a 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). insurance agency and two related insurance companies. The Company believes the Court's ruling contains serious mistakes of law and fact and we have filed a Motion for Reconsideration re·con·sid·er v. re·con·sid·ered, re·con·sid·er·ing, re·con·sid·ers v.tr. 1. To consider again, especially with intent to alter or modify a previous decision. 2. with respect to the ruling. Absent this charge to earnings, net earnings for the third quarter of 2002 would have been $1.8 million or $.37 per share. Total revenues for the nine months ended September September: see month. 30, 2002 increased 73.5% to $96,825,555 over the same period of 2001. Net premiums earned for the nine months ended September 30, 2002 increased 9.2% to $48,844,616 over the same period of 2001. This increase in net premiums was attributable to a 73% increase in environmental, excess and surplus lines, and program business premiums, offset by a 63% decrease in the Company's de-emphasized workers' compensation, surety, and commercial business lines. Net earnings for the nine months ended September 30, 2002 increased 28.9% to $4,932,456, or $1.01 per diluted share, compared with $3,826,197, or $0.77 per diluted share for the same period in 2001. Absent the Company's recording of a total of $1.5 million of rescission expense for the nine months ended September 30, 2002, net earnings would have been $5.9 million or $1.22 per share. 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 third quarter of 2002, 32 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 14 boat slips were closed in Phase 1, resulting in total revenues of $10.7 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 $1.1 million. The Company previously reported that 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, has 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. In April 2002, the Company demanded 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 against 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. to collect the amounts owed. The arbitration panel arbitration panel A group of individuals charged with resolving a dispute between individuals and/or organizations. Arbitration panels to resolve investment disputes are sponsored by self-regulatory organizations such as NASD. has scheduled a hearing in May 2003. The parties are presently engaged in the discovery phase of the proceedings. 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 that this dispute will have a material adverse effect on the overall financial condition or liquidity of the Company. The book value of the Company increased to $14.03 per share at September 30, 2002 as compared to $12.77 at December December: see month. 31, 2001, primarily as a result of increases in net earnings and net unrealized gains Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. on investments. Commenting on the results, Lloyd A. Fox, President and Chief Executive Officer, said, "We are very pleased with our results for the third quarter and the continued growth and profitability of both our insurance and real estate development operations. As a result of the hardened insurance market, our premiums continue to grow in our core environmental, excess and surplus and program insurance business, which are our most profitable lines. At our Harbour Village Golf & Yacht Club real estate development, we closed 32 residential condominium units and 14 boat slips in the third quarter, resulting in revenues of $10.7 million and pre-tax income of $1.1 million. Pre-sales in Phase 2 of the project, which is currently under construction, have reached 75%. We are also pleased with the continuation continuation - continuation passing style of the Company's dividend policy for the benefit of our shareholders." A conference call to discuss third quarter 2002 results is scheduled for Thursday Thursday: see week. , November November: see month. 7, 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 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 view of the likely impact of the Berkley dispute, and the 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, timing or collectibility of reinsurance recoverables, market acceptance of new coverages and enhancements, changes in reinsurance costs and availability, potential adverse decisions in court and arbitration proceedings, 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. AND SUBSIDIARIES
Financial and Operating Highlights
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
INCOME
STATEMENT
DATA:
Revenues:
Direct and
assumed
premiums
earned $35,530,891 $34,596,227 $102,754,848 $98,501,427
Ceded
premiums
earned (16,746,711) (20,257,092) (53,910,232) (53,756,277)
---------------------------------------------------------
Net
premiums
earned 18,784,180 14,339,135 48,844,616 44,745,150
Net
investment
income 973,320 946,765 2,848,195 2,709,385
Interest on
notes
receivable - 207,622 - 766,937
Brokerage
commission
income 34,044 716,003 136,684 1,715,027
Management
fees from
related
party 246,563 363,354 739,744 1,094,662
Net realized
gains
(losses) (56,183) 186,005 (521,885) 601,354
Sales - real
estate 10,723,526 3,180,705 44,659,187 3,180,705
Other income 30,504 128,814 119,014 978,399
---------------------------------------------------------
Total
revenues $30,735,954 $20,068,403 $96,825,555 $55,791,619
---------------------------------------------------------
Expenses:
Losses and
loss
adjustment
expenses $10,648,265 $9,636,161 $28,178,777 $28,501,533
Acquisition
expenses 4,072,469 2,561,742 10,369,914 8,801,854
Payroll and
related
expenses 2,300,400 2,073,232 6,604,500 6,255,317
Real estate
expenses 9,626,848 3,096,454 38,781,328 3,578,941
Other
expenses 1,723,424 1,455,311 4,418,676 4,301,627
Expense due
to
rescission 1,152,876 - 1,506,468 -
---------------------------------------------------------
Total
expenses 29,524,282 18,822,900 89,859,663 51,439,272
---------------------------------------------------------
Earnings
before
income
taxes 1,211,672 1,245,503 6,965,892 4,352,347
Income taxes 178,143 266,750 2,033,436 526,150
---------------------------------------------------------
Net earnings $1,033,529 $978,753 $4,932,456 $3,826,197
---------------------------------------------------------
Net earnings
per share:
Basic $0.22 $0.20 $1.04 $0.79
=========================================================
Diluted $0.21 $0.20 $1.01 $0.77
=========================================================
Average number
of shares
outstanding:
Basic 4,746,695 4,788,648 4,731,822 4,823,066
=========================================================
Diluted 4,864,450 4,996,787 4,876,659 4,949,942
=========================================================
GAAP combined
ratio 83.6% 90.1% 84.6% 88.9%
=========================================================
BALANCE SHEET September 30, December 31,
DATA 2002 2001
Total
investments
excluding
real estate $102,695,605 $83,578,373
Total assets 346,169,111 297,261,617
Unpaid losses
and loss
adjustment
expenses 145,120,685 121,423,039
Total
liabilities 279,568,000 237,281,279
Total
shareholders'
equity 66,601,111 59,980,338
Book value per
share $ 14.03 $12.77
Phase 1 Phase 2 Phase 3
-----------------------------------------
Townhouses The The
------------
Marina Oak Links Links Fisher- Total
man's
Condos Ham- River- North South Harbour Condos Boat Total
mock walk Slips
----------------------------------------------------------------
Planned
Number
of
Condo
Units &
Boat
Slips 248 18 28 188 188 70 740 142 882
Condo
Units
& Boat
Slips
under
Con-
tract 248 17 28 170 93 66 622 138 760
Value
of
Pre-
sale
Con-
tracts
(Note 1)62,892 7,902 10,771 42,587 26,133 14,935 165,220 12,567 177,787
Number
of
Bldgs 8 4 6 4 4 1 27
Number
of
Bldgs
Com-
plete
by Task
Bldg
Founda-
tion 8 4 5 4 - -
Ver-
tical
Bldg
Com-
pleted 8 4 5 - - -
Inte-
rior
Finish
Com-
pleted 8 - 1 - - -
Certi-
ficate
of
Occu-
pancy
Rec'd 8 - 1 - - -
Outlook
For Fourth
Quarter 2002
------------
Units
Closed - 8 21 - 29 12 41
Revenue
Recog-
nized - 3,572 7,579 - 11,151 1,087 12,238
Other
Revenue 150
Total
Revenue 12,388
Gross
Profit
Recog-
nized - (143) (228) - (371) 424 53
Other
Expense
(Income)
Items 898
Pre-Tax
Profit (845)
3rd Quarter
Actual
-----------
Units
Closed 31 - 1 - - 32 14 46
Revenue
Recog-
nized 8,803 - 312 - - 9,115 1,454 10,569
Other
Revenue 154
Total
Revenue 10,723
Gross
Profit
Recog-
nized 1,566 - - - - 1,566 586 2,152
Other
Expense
(Income)
Items 1,055
Pre-Tax
Profit 1,097
----------------------------------------------------------------------
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, 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.
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion