Centris Group Reports Fourth Quarter and Year-End Results; Favorable Growth Outlook for 1998.COSTA MESA Costa Mesa (kŏs`tə mā`sə), city (1990 pop. 96,357), Orange co., S Calif., on the Pacific south of Santa Ana; inc. 1953. It is a transportation, residential, and light industrial center. , Calif.--(BUSINESS WIRE)--Feb. 3, 1998--The Centris
The genus Centris contains over 110 species of large apid bees occurring from Kansas to Argentina). Group Inc. (NYSE NYSE See: New York Stock Exchange :CGE CGE Computable General Equilibrium CGE Conference des Grandes Ecoles (French) CGE Carrier Grade Edition (COTS Linux platform) CGE Classic Gaming Expo (game) ), a provider of domestic and international insurance and 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. products and services through its operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. , Tuesday Tuesday: see week. reported gains in revenues for the fourth quarter and year-ended Dec. 31, 1997. The company reported diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.62 for the quarter and $2.50 for the full year. The company expects continuing favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. growth in 1998, if present trends continue. Chairman and Chief Executive Officer David L. Cargile, said: "Our performance during the quarter and for the year reflects key steps taken to implement our long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth strategy. The year was significant for us on the acquisition front, as we completed three important acquisitions. "In addition to opening new product and market opportunities for our company, these acquisitions are accretive to earnings. We intend to continue this acquisition strategy in 1998." Financial Results For the three months ended Dec. 31, 1997, revenues increased 25% to $56,307,000 from $45,147,000 for the previous year's quarter. Net income was $3,778,000, or $0.62 per share vs. $3,918,000, or $0.65 per share, for the prior year's quarter. Net 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. for the 1997 fourth quarter was $3,654,000, or $0.60 per share vs. $3,223,000, or $0.53 per share for the 1996 quarter. Revenues advanced 31% to $214,472,000, with net income of $15,212,000, or $2.50 per share for the year ended Dec. 31, 1997. This compares with revenues of $163,119,000 and net income of $15,020,000, or $2.51 per share, for the full year of 1996. During 1997 the company realized $10,213,000 in pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta gains primarily from its equity portfolio and mostly in the third quarter, as it sought to reduce its exposure to stock market volatility. Net operating income for the year was $8,574,000, or $1.41 per share, compared with $13,638,000, or $2.28 per share, for the prior year. Net operating income results were driven primarily by strong growth in earnings from the property/casualty lines and from increased fee income, offset by third-quarter reserve adjustments in the medical lines business. All per-share results are reported on a 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. basis in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the provisions of Statement of Financial Accounting Standards No. 128, "Earnings Per Share." -0-
Medical Lines Results
(000 omitted)
Three Months Ended
Dec. 31,
1997 1996 % Change
---- ---- --------
Premiums earned $28,833 $22,757 27%
Commissions and fees $ 9,425 $7,250 30%
Pre-tax income $ 5,283 $4,773 11%
12 Months Ended
Dec. 31,
1997 1996 % Change
---- ---- --------
Premiums earned $103,479 $84,179 23%
Commissions and fees $33,335 $26,722 25%
Pre-tax income $9,328 $17,481 -47%
According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Cargile, "The pricing and 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. strategies implemented by the company during the second half of 1997 are restoring underwriting profitability to the medical lines business, which is evident in the improved fourth-quarter results, a trend we expect to sustain going forward. "We continue to seek rate increases on new and renewal business in line with our claims experience. Equally important, the more stringent standards we have established for our producer network have resulted in higher quality of business without sacrificing growth in the overall level of premium production." Impacting year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. results was the previously announced increase in reserves made during the third quarter in response to the company's review of reserves and claims trends, which indicated additional loss development on medical lines business in the second half of 1996 and the first half of 1997. Cargile said: "Our strategy is to continue reserving prudently pru·dent adj. 1. Wise in handling practical matters; exercising good judgment or common sense. 2. Careful in regard to one's own interests; provident. 3. Careful about one's conduct; circumspect. in recognition that the market remains competitive. We believe this stance enables us to operate more effectively in a highly competitive market." Cargile continued: "We are not alone in our outlook and response to these market conditions. When we look at trends in our industry, we see that other insurance providers have also revised their reserves during the second half of 1997. "We have taken note of industry performance statistics which show increased reserve levels among other medical lines insurance providers. Such actions serve to enhance the stability and profitability of the overall medical lines industry." Medical lines segment results include the contribution from INTERRA Reinsurance Group, which was acquired in September September: see month. . Current period results were positively impacted by INTERRA. INTERRA managed in excess of $35 million of premium and generated in excess of $2 million of fee and commission revenue in 1997, and the company anticipates exceeding these results in 1998. INTERRA has expanded its operations to include underwriting accident and health reinsurance for its USF USF University of South Florida USF Universal Service Fund (often part of phone bill in US) USF University of San Francisco USF University of Sioux Falls USF University of St. RE affiliate and providing claims management services for USBenefits. In addition, through INTERRA the company has begun implementation of its plan to enter the international accident and health reinsurance business. -0-
Property/Casualty Results
(000 omitted)
Three Months Ended
Dec. 31,
1997 1996 % Change
---- ---- --------
Premiums earned $14,581 $11,461 27%
Pre-tax income $ 809 $ 347 133%
12 Months Ended
Dec. 31,
1997 1996 % Change
---- ---- --------
Premiums earned $56,054 $39,945 40%
Pre-tax income $ 5,739 $ 4,003 43%
The continued expansion and marketing efforts of USF RE's treaty reinsurance operations resulted in solid gains in revenue from the property/casualty lines. Facultative facultative /fac·ul·ta·tive/ (fak´ul-ta?tiv) not obligatory; pertaining to the ability to adjust to particular circumstances or to assume a particular role. fac·ul·ta·tive adj. 1. property/casualty operations also grew during the year. Underwriting profitability improved in 1997, particularly in the property line. The impact from the acquired operations of Allmerica Re during 1997 was relatively limited, as it was a part of Centris' operations for only a few months of the year. Going forward, this acquisition's contribution to 1998 property/casualty results is expected to be significant, as approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $24 million in existing premiums are renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. into USF RE. This acquisition has facilitated USF RE's entry into both the international and marine reinsurance areas. Financial Position At Dec. 31, 1997, total assets grew 19% to $343,248,000 and stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. improved 15% to $117,590,000, compared with the 1996 year-end. Cash and invested assets at Dec. 31, 1997, totaled $262,893,000, compared with $229,255,000 at Dec. 31, 1996. The investment portfolio grew 15% for the year and reflects a current allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of approximately 94% in fixed-income investments, both taxable and tax preferenced, with an "AA" average fixed-income portfolio rating, and 6% in equities. The portfolio does not contain any real estate investments, derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. , high yield bonds, private placements or mortgage loans. The company's book value per share at Dec. 31, 1997, increased to $19.33 from $17.18 at Dec. 31, 1996. The statutory surplus of the company's insurance operations was $112,657,000 as of Dec. 31, 1997. The statutory combined ratios of the company's insurance operations for the quarter and year-ended Dec. 31, 1997, are outlined in the table below: -0-
Three Months Ended 12 Months Ended
Dec. 31, Dec. 31,
1997 1996 1997 1996
---- ---- ---- ----
Medical Lines
Loss and LAE 73.8 68.5 80.0 69.0
Expense 28.1 27.3 28.0 26.4
===== ===== ===== =====
Combined 101.9 95.8 108.0 95.4
===== ===== ===== =====
Property/Casualty
Loss and LAE 79.4 78.0 75.5 75.3
Expense 30.5 35.2 26.6 30.6
----- ----- ----- -----
Combined 109.9 113.2 102.1 105.9
===== ===== ===== =====
Total
Loss and LAE 75.7 71.7 78.4 71.0
Expense 28.8 30.0 27.5 27.9
----- ----- ----- -----
Combined 104.5 101.7 105.9 98.9
===== ===== ===== =====
The Centris Group operates complementary businesses based on its expertise in the handling of specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. risk. It is a market leader in medical stop-loss stop-loss, n a general term referring to that category of coverage that provides insurance protection (reinsurance) to an employer for a self-funded plan. coverages that produce revenues from both premiums and fees. Centris is also a provider of property/casualty reinsurance, excess and surplus lines insurance and special risk accident and health insurance products and reinsurance intermediary Intermediary See: Financial intermediary intermediary See financial intermediary. services. Other specialized risk operations include claim review, premium and claim auditing, prospective program review and runoff Runoff The procedure of printing the end-of-day prices for every stock on an exchange onto ticker tape. Notes: If the "tape is late" then it can take a long time to print off all the closing prices. management. Among the most highly rated companies in its markets, The Centris Group conducts business both nationally and internationally through USBenefits Insurance Services Inc., USF RE INSURANCE CO., USF Insurance Co. and INTERRA Reinsurance Group Inc. Centris' insurance operations are rated "A" (Excellent) by A.M. Best Co. and USF RE is assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. a claims paying ability rating of Aq by Standard & Poor's. 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. Except for historical information contained herein, this news release may include materials that could be viewed as forward- looking statements, which are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth herein in such forward-looking statements, including such factors, among others, as significant fluctuations in operating results, catastrophic losses, uncertain market acceptance of the company's products and intense competition. For more information on The Centris Group via facsimile at no cost, call 800/PRO-INFO and dial client code "CGE" or visit the company's Web site at www.thecentrisgroup.com. -0-
THE CENTRIS GROUP INC.
Consolidated Income Statements
(Amounts in thousands, except for per-share data)
(Unaudited)
Three Months Ended 12 Months Ended
Dec. 31, Dec. 31,
1997 1996 1997 1996
Revenues:
Premiums earned $ 43,414 $ 34,218 $159,533 $124,124
Commissions and fees 9,725 7,250 33,635 26,722
Net investment income 2,977 2,609 11,091 10,147
Realized investment
gains (losses) 191 1,070 10,213 2,126
-------- -------- -------- --------
Total revenues 56,307 45,147 214,472 163,119
-------- -------- -------- --------
Operating expenses:
Losses and loss adjustment
expenses 32,851 24,526 125,071 88,173
Policy acquisition expenses 12,242 10,376 46,196 37,179
General and administrative
expenses 5,117 4,316 18,837 14,995
Interest 530 616 2,373 2,610
-------- -------- -------- --------
Total operating expenses 50,740 39,834 192,477 142,957
Income before income taxes 5,567 5,313 21,995 20,162
Income tax expense 1,789 1,395 6,783 5,142
-------- -------- -------- --------
Net income $ 3,778 $ 3,918 $ 15,212 $ 15,020
======== ======== ======== ========
Basic earnings per share $ 0.63 $ 0.66 $ 2.54 $ 2.56
Diluted earnings per share $ 0.62 $ 0.65 $ 2.50 $ 2.51
======== ======== ======== ========
Weighted average number of
shares for basic earnings
per share 6,042 5,911 5,990 5,866
Weighted average number
of shares for diluted
earnings per share 6,137 6,027 6,077 5,975
======== ======== ======== ========
THE CENTRIS GROUP INC.
Condensed Consolidated Balance Sheets
(Amounts in thousands)
(Unaudited)
Dec. 31, Dec. 31,
1997 1996
ASSETS
Investments, at market
(amortized cost $214,407
at Dec. 31, 1997; $185,472
at Dec. 31, 1996) $223,824 $194,352
Restricted cash and short
term investments 27,947 23,771
Cash and invested cash 11,122 11,132
Reinsurance and
premiums receivable 60,743 47,311
Accrued investment income 3,196 2,653
Other assets 16,416 9,524
-------- --------
TOTAL ASSETS $ 343,248 $ 288,743
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Amounts due insurance companies $ 36,470 $ 27,148
Loss and LAE reserves 116,801 94,669
Unearned premium 30,249 22,936
Notes payable 32,500 35,000
Other liabilities 9,638 6,626
-------- --------
Total liabilities 225,658 186,379
Stockholders' equity 117,590 102,364
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $343,248 $288,743
======== ========
CONTACT: The Centris Group Inc., Costa Mesa Howard Howard, English noble family. Landowners in Norfolk from the 13th cent., the Howards obtained the duchy of Norfolk through the marriage of Sir Robert Howard to Margaret Mowbray, daughter of Thomas Mowbray, 1st duke of Norfolk. S. Singer, 800/550-3285 www.thecentrisgroup.com or The Financial Relations Board Karen Taylor Karen Taylor is an English comedienne from Barrow-in-Furness, Cumbria. She is a former finalist in the prestigious Daily Telegraph Open Mic Award[1] and has fronted her own sketch show on BBC Three, entitled Touch Me, I'm Karen Taylor. (general information) Moira Conlon Conlon is an Irish family name, the gaelic spelling being Ó Connalláin. It is a variartion of the anglcised version of Ó Connalláin. It is sometimes spelt Conlan, Conlen and Conlin. Like most surnames, it is sometimes used as a first name. (analyst contact) 310/442-0599 |
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