Amwest Insurance Group Inc. Reports Fourth-Quarter and Year-End Results; Board Eliminates Payment of Quarterly Dividends.Business Editors CALABASAS, Calif.--(BUSINESS WIRE)--Feb. 9, 2000 Amwest Insurance Group Inc. (AMEX AMEX See: American Stock Exchange :AMW AMW America's Most Wanted (TV show) AMW Air Mobility Wing AMW Amphibious Warfare AMW Ask Me Why (Beatles song) AMW Angewandte Medienwissenschaft (German: Applied Media Studies) )(PCX (1) A bitmapped graphics file format that handles monochrome, 2-bit, 4-bit, 8-bit and 24-bit color and uses RLE to achieve compression ratios of approximately 1.1:1 to 1.5:1. Images with large blocks of solid colors compress best under the RLE method. See PC Paintbrush. :AMW) today reported fourth-quarter and year-end results for the period ending Dec. 31, 1999. For the year, net income was $440,000, or $.10 per share, on premiums written of $136,488,000, compared with net income of $6,269,000, or $1.45 per share, on premiums written of $132,819,000 for the prior year. 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. for 1999, which excludes net realized investment gains and special charges, totaled $1,473,000, or $.34 per share, contrasted to operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $3,576,000, or $.82 per share, in 1998. For the 1999 fourth quarter, the company reported a net loss of $920,000 or $.21 per share, on premiums written of $32,341,000, compared with net income of $1,140,000, or $.26 per share, on premiums written of $33,745,000 during the fourth quarter of 1998. Operating loss totaled $1,691,000, or $.39 per share, compared with operating income of $945,000, or $.22 per share, in the year-ago quarter. In a decision to deploy more capital toward executing the company's strategic plan, Amwest's board of directors voted to eliminate the payment of the regular quarterly cash dividend of $0.09 per share. &uot;We have recently taken aggressive action to strengthen our 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. division, as we experienced significant losses in our contract surety product line during the fourth quarter,&uot; said John E. Savage, president and chief executive officer. &uot;The losses were mainly attributable to our Texas operations. &uot;We have completed an audit of these operations, resulting in the elimination, on a prospective basis, of accounts representing more than 20 percent of gross contract premiums underwritten in the state. We believe that this action, when combined with redeploying the capital from the eliminated quarterly dividends, will enable Amwest to execute on its strategic plan. &uot;We continue to make excellent progress in expanding our commercial and court lines as a percent of the surety portfolio,&uot; Savage continued. &uot;Since 1995, we have increased non-contract surety writing by 16 percent, from 39.1 percent to 42.8 percent of total surety writings, with the largest growth coming from commercial surety. &uot;The P& Division demonstrated several positive trends in the fourth quarter. Our strategy to focus on our core business is beginning to yield results as commercial trucking rates are increasing, premiums are growing and expenses are starting to decline. &uot;During the fourth quarter we eliminated our reliance on our vendor-supported 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. system and implemented new, more efficient, internally developed software. While this resulted in a one-time write-off during the fourth quarter of $698,000 relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the old system, we believe our data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a costs will significantly decrease in 2000. &uot;Additionally, the run-off of the division's discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: California and Arizona private passenger automobile programs is now substantially behind us, allowing us to concentrate on our core commercial trucking product. We remain optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the P& Division's future.&uot; Amwest is a Calabasas-based insurance holding company underwriting surety and property and casualty insurance through Amwest Surety Insurance Co., Condor Insurance Co. and Far West Insurance Co. Certain statements contained in this news release regard matters that are not historical facts and are 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. . Because such forward-looking statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to: the ineffectiveness of the recently modified commercial transportation products, a deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in premiums written or losses incurred in the company's surety and other specialty businesses, the inability to achieve increased percentage writings of commercial surety and court products, a decline in the company's credit or other third-party ratings, the lack of adherence adherence /ad·her·ence/ (ad-her´ens) the act or condition of sticking to something. immune adherence by branch personnel to company underwriting guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. , a reduction in the investment yield earned on the company's investment portfolio, or a general economic decline. The company undertakes no obligation to release publicly the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" to reflect the occurrence of unanticipated events.
Amwest Insurance Group Inc. and Subsidiaries
(Amounts in thousands, except per-share data)
Consolidated Statements of Operations
Three months ended Years ended
Dec. 31, Dec. 31,
1999 1998 1999 1998
Premiums written $ 32,341 $ 33,745 $ 136,488 $ 132,819
Net premiums earned $ 28,833 $ 25,966 $ 110,544 $ 105,971
Net investment income 1,986 1,781 7,055 6,651
Net realized investment
gains 1,866 614 3,913 4,400
Commissions and fees 741 1,098 2,736 2,854
Total revenue 33,426 29,459 124,248 119,876
Net losses and loss
adjustment expenses 14,891 10,784 48,310 40,831
Policy acquisition
costs 15,714 12,873 57,723 53,806
General operating
costs 3,650 3,693 15,432 14,310
Interest expense 628 532 2,267 1,917
Total expenses 34,883 27,882 123,732 110,864
Income (loss) before
income taxes (1,457) 1,577 516 9,012
Provision (benefit) for
income taxes (537) 437 76 2,743
Net income (loss) $ (920) $ 1,140 $ 440 $ 6,269
Net earnings (loss) per
common share (1):
Basic $ (0.21) $ 0.26 $ 0.10 $ 1.47
Diluted $ (0.21) $ 0.26 $ 0.10 $ 1.45
Operating earnings
(loss) per common
share (1):
Basic $ (0.39) $ 0.22 $ (0.34) $ 0.84
Diluted $ (0.39) $ 0.22 $ (0.34) $ 0.82
-0-
Consolidated Balance Sheet Information
Dec. 31, 1999 Dec. 31, 1998
Total assets $ 241,785 $ 216,291
Total liabilities 185,125 154,389
Total stockholders' equity 56,660 61,902
Book value per share $ 13.09 $ 14.36
(1) 1999 and 1998 basic and diluted earnings per share have been
calculated in accordance with SFAS No. 128.
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