American Safety Insurance Holdings, Ltd. Reports Increase in Net Earnings for Second Quarter.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. 5, 2003 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 Holdings, Ltd. (NYSE NYSE See: New York Stock Exchange : ASI ASI, n See Anxiety Sensitivity Index. ) today reported second quarter ended June June: see month. 30, 2003 net earnings increased 106% to $3.8 million, or $0.79 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, as compared to $1.9 million, or $0.38 per diluted share in the second quarter of 2002. Second quarter net earnings are detailed as follows (in thousands):
Quarter Ended Quarter Ended
June 30, 2003 June 30, 2002
------------- -------------
Insurance Operations $1,602 $994
Real Estate Operations 283 1,419
Other, including realized gains and
(losses) 1,929 (560)
------------- -------------
Net Earnings $3,814 $1,853
The increase in net earnings was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to strong 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. performance and net realized gains Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. from the sale of investments of $2 million in the second quarter of 2003. The net earnings for the second quarter of 2002 included net realized investment losses of $477,000. Net premiums earned for the second quarter of 2003 increased 56% to $23 million from the same quarter of 2002. This increase is attributable to a 77% increase in the Company's core environmental, excess and surplus, and program business net premiums earned. Total revenues for the second quarter of 2003 increased 48% to $44.2 million as compared to the same quarter of 2002 as a result of increased net earned premiums Earned premium is the portion of an insurance written premium which is considered "earned" by the insurer, based on the part of the policy period that the insurance has been in effect, and during which the insurer has been exposed to loss. , investment income, real estate income, and realized gains from the sale of investments. Net cash flow generated from operations increased to $23 million for the second quarter of 2003 from $5.1 million in the same quarter of 2002. The Company's book value per share at June 30, 2003 increased 8% to $14.25 from $13.18 at December December: see month. 31, 2002. This increase in per share book value is primarily attributable to the Company's profit and changes in 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 during the six months ended June 30, 2003. Net earnings for the first six months of 2003 were $5.0 million, or $1.05 per diluted share, an increase of 29% as compared to $3.9 million, or $0.80 per diluted share for the same period of 2002. Six month net earnings are detailed as follows (in thousands):
Six Months Six Months
Ended Ended
June 30, 2003 June 30, 2002
-------------- -------------
Insurance Operations $3,225 $1,599
Real Estate Operations (174) 2,882
Other, including realized gains and
(losses) 1,983 (582)
-------------- -------------
Net Earnings $5,034 $3,899
The increase in net earnings was attributable to strong underwriting performance and net realized gains from the sale of investments of $2.1 million for the six months ended June 30, 2003. The net earnings for the first six months of 2002 included net realized investment losses of $393,000. Net premiums earned for the six months ended June 30, 2003 increased 55% to $44 million from the same period of 2002. This increase was attributable to an 81% increase in net premiums earned in the Company's core lines of business. Total revenues for the six months ended June 30, 2003 increased 12% to $72.5 million as compared to the same period of 2002 as a result of increased net premiums earned, investment income, and realized gains from the sale of investments. Net cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses increased to $32 million for the six months ended June 30, 2003 from $6.2 million in the same period of 2002. Commenting on the results, Stephen Stephen, 1097?–1154, king of England (1135–54). The son of Stephen, count of Blois and Chartres, and Adela, daughter of William I of England, he was brought up by his uncle, Henry I of England, who presented him with estates in England and France and R. Crim, President and Chief Executive Officer of American Safety Insurance Holdings, Ltd., said, "Solid execution in our core insurance business lines contributed to the Company's strong cash flow and insurance earnings, as well as book value growth. Pricing and profitability trends continue to be favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. in our targeted markets. Looking ahead, we believe the insurance marketplace is attractive for 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. niche niche: see ecology. niche Smallest unit of a habitat that is occupied by an organism. A habitat niche is the physical space occupied by the organism; an ecological niche is the role the organism plays in the community of organisms found in the insurers like American Safety Insurance. The recent strengthening of our capital base from an $8 million trust preferred offering has supported the continued growth of our insurance business, and we expect that our underwriting profits Underwriting profit is a term used in the insurance industry. It consists of the earned premium remaining after losses have been paid and administrative expenses have been deducted. It does not include any investment income earned on held premiums. will continue for the balance of the year." A conference call to discuss second quarter of 2003 results is scheduled for Wednesday Wednesday: see week. , August 6, at 11:00 a.m. (Eastern Time), which will be broadcast through the Investor Broadcast Network's Vcall website at http://www.vcall.com or the Company's website at http://www.americansafetyinsurance.com. A replay will be available on the Company's website. American Safety Insurance Holdings, Ltd. is a specialty insurance holding company which, through its subsidiaries, provides innovative insurance solutions in the alternative insurance market for environmental remediation Generally, remediation means providing a remedy, so environmental remediation deals with the removal of pollution or contaminants from environmental media such as soil, groundwater, sediment, or surface water for the general protection of human health and the environment or from a , contracting and other specialty risks. Additional information about American Safety Insurance can be found at "http://www.americansafetyinsurance.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. , including the Company's outlook for 2003. These forward-looking statements reflect the Company's current views with respect to future events and financial performance, including future insurance claims and losses, and the Company's expectations with respect to the outcome of the Principal Management acquisition 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 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. , and the future profitability and the value of the Harbour Village 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 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. recoverables, market acceptance of new coverages and enhancements, changes in reinsurance costs and availability, potential adverse decisions in court 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, and changes in levels of general business activity and economic conditions. With respect to the development of the Harbour Village project, 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, 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 HOLDINGS, LTD. AND SUBSIDIARIES Financial and Operating Highlights
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
INCOME STATEMENT
DATA:
Revenues:
Direct and
assumed
premiums earned$ 41,582,706 $ 33,130,159 $ 82,054,144 $ 67,223,957
Ceded premiums
earned (18,836,567) (18,559,548) (38,016,485) (38,776,379)
------------ ------------ ------------ ------------
Net premiums
earned 22,746,139 14,570,611 44,037,659 28,447,578
Net investment
income $ 1,144,822 $ 899,318 $ 2,259,237 $ 1,874,875
Management fees
from related
party 244,249 75,754 522,152 493,181
Net realized
gains (losses) 2,888,968 (547,949) 3,039,683 (465,702)
Real estate
income 17,167,373 14,896,921 22,597,220 33,935,661
Other income 16,879 74,217 31,273 191,150
------------ ------------ ------------ ------------
Total revenues$ 44,208,430 $ 29,968,872 $ 72,487,224 $ 64,476,743
------------ ------------ ------------ ------------
Expenses:
Losses and loss
adjustment
expenses $ 13,883,281 $ 8,561,371 $ 25,977,343 $ 17,530,512
Acquisition
expenses 4,278,628 2,308,560 8,435,614 4,684,587
Payroll and
related
expenses 2,099,339 2,202,352 4,321,251 4,304,100
Real estate
expenses 16,714,993 12,459,152 22,876,634 29,154,480
Other expenses 1,754,587 1,559,663 4,100,343 2,695,252
Expense due to
rescission 60,953 142,844 144,512 353,592
------------ ------------ ------------ ------------
Total expenses 38,791,781 27,233,942 65,855,697 58,722,523
------------ ------------ ------------ ------------
Earnings
before income
taxes 5,416,649 2,734,930 6,631,527 5,754,220
Income taxes 1,602,733 881,534 1,597,258 1,855,293
------------ ------------ ------------ ------------
Net earnings $ 3,813,916 $ 1,853,396 $ 5,034,269 $ 3,898,927
============ ============ ============ ============
Net earnings per
share:
Basic $ 0.80 $ 0.39 $ 1.06 $ 0.83
============ ============ ============ ============
Diluted $ 0.79 $ 0.38 $ 1.05 $ 0.80
============ ============ ============ ============
Average number of
shares
outstanding:
Basic 4,739,888 4,743,803 4,739,888 4,724,263
============ ============ ============ ============
Diluted 4,814,216 4,882,899 4,802,124 4,875,679
============ ============ ============ ============
GAAP combined
ratio 86.6% 82.5% 86.0% 84.5%
============ ============ ============ ============
BALANCE SHEET DATA June 30, 2003 December 31, 2002
Total investments including receivables
for securities sold (excluding real
estate) $132,341,596 $104,416,529
Total assets 416,010,268 365,407,338
Unpaid losses and loss adjustment
expenses 185,982,249 160,628,579
Total liabilities 348,456,125 302,955,489
Total shareholders' equity 67,554,143 62,451,849
Book value per share $ 14.25 $ 13.18
======================================================================
Harbour Village Development Status
(000)s except references to Condo Units
(Unaudited)
Phase 1
---------------------------------------
Townhouses
-------------------------
Marina Oak
6/30/2003 Condos Hammock Riverwalk
---------------------------------------------------------------------
Planned Number of Condo Units
and Boat Slips 248 18 28
Condo Units and Boat Slips
under Contract 248 15 26
Value of Pre-sale Contracts
(Note 1) 62,892 6,696 10,081
Number of Buildings 8 4 6
Number of Buildings Complete
by Task
Building Foundation 8 4 6
Vertical Building Completed 8 4 6
Interior Finish Completed 8 4 5
Certificate of Occupancy
Received 8 4 5
Outlook For 3rd Quarter of
2003
------------------------------
Units Closed - 1 3
Revenue Recognized 31 555 1,361
Other Revenue
Total Revenue
Gross Profit Recognized 3 1 27
Other Expense (Income) Items
Pre-Tax Profit
2nd Quarter Actual
------------------------------
Units Closed - 4 4
Revenue Recognized 71 1,736 1,439
Other Revenue
Total Revenue
Gross Profit Recognized (27) (131) (24)
Other Expense (Income) Items
Pre-Tax Profit
Phase 2
--------------
The The
Links Links Total Boat
6/30/2003 North South Condos Slips Total
-------------------------------------------- -------- ------- --------
Planned Number of Condo Units
and Boat Slips 188 188 670 142 812
Condo Units and Boat Slips
under Contract 173 156 618 142 760
Value of Pre-sale Contracts
(Note 1) 43,525 42,984 166,178 13,089 179,267
Number of Buildings 4 4 26
Number of Buildings Complete
by Task
Building Foundation 4 4
Vertical Building Completed 4 2
Interior Finish Completed 2 -
Certificate of Occupancy
Received 2 -
Outlook For 3rd Quarter of
2003
------------------------------
Units Closed 56 60 3 63
Revenue Recognized 13,418 15,365 328 15,693
Other Revenue 100
Total Revenue 15,793
Gross Profit Recognized 1,811 1,842 139 1,981
Other Expense (Income) Items 1,507
Pre-Tax Profit 474
2nd Quarter Actual
------------------------------
Units Closed 59 - 67 5 72
Revenue Recognized 13,182 - 16,428 563 16,991
Other Revenue 176
Total Revenue 17,167
Gross Profit Recognized 1,625 - 1,443 261 1,704
Other Expense (Income) Items 1,252
Pre-Tax Profit 452
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