Crop Growers Announces 1995 Results; Management Developments.GREAT FALLS Great Falls, city (1990 pop. 55,097), seat of Cascade co., N central Mont., second largest city in the state, at the confluence of the Missouri and Sun rivers and near the falls that give the city its name; inc. 1888. , Mont.--(BUSINESS WIRE)--March 28, 1996--Crop Growers Growers are the people, animals, plants, and various living creatures that assist in the growing of plants and other living creatures. More specifically, the term "growers" refers to individual people who put forth effort to grow plants for food and medicinal use, including the Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CGRO CGRO Compton Gamma-Ray Observatory ) today reported fourth quarter and 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. In addition, the Company announced significant management developments. For the quarter ended December December: see month. 31, 1995, the Company had a net loss of $3.8 million, or $0.45 per share, versus net income of $807,000, or $0.17 per share, in the same quarter in 1994. Revenues for the quarter were $9.4 million versus year-earlier levels of $9.5 million. Revenues were generated primarily from the Company's portion of 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. gains and from multi-peril crop insurance (MPCI MPCI Multiple Peril Crop Insurance MPCI Mouvement Patriotique de Côte D’ Ivoire (Patriotic Movement of the Ivory Coast) MPCI Mobile Protocol Capability Indicator MPCI Multi-Point Courtesy Inspection MPCI Mini Pci MPCI Managing Partners Confidence Index ) premiums serviced. The Company recognized $3.9 million of underwriting gains, compared with $1.5 million in 1994's fourth quarter. The Company serviced $15.2 million in MPCI premiums, compared to $11.9 million in the same period last year. Offsetting these increases were general and administrative expenses of $9.8 million compared to $4.2 million in 1994. General and administrative expenses in the quarter were up substantially over the prior year as the Company increased its employee base to handle a 200 percent increase in policies serviced for the year. Also contributing to the increase were expenses associated with a number of acquisitions during the year and development and marketing costs for the initial version of the Company's new farm management software. In comparing fourth quarter costs to those of the third quarter, the Company reported that additional expenses were incurred relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc , among other things, marketing costs associated with the release of the Company's new farm management software and non-management discretionary bonuses. For 1995, net income totaled $5.1 million, or $0.61 per share, compared to $5.3 million, or $0.91 per share, in 1994. Revenues reached $87.9 million, or 70 percent above last year's total of $51.7 million. The Company's underwriting gains climbed to $11.2 million compared to $3.1 million in 1994. Increased underwriting gains were primarily a result of the Company's increase in premiums serviced, the absence of a profit sharing profit sharing, arrangement by which employees receive, in addition to their wages, a share of the net profits of a business. The purpose is to give them an incentive to increase their output through enhanced morale, less wasteful use of materials, better care of underwriting loss carry forward and favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. underwriting results on premiums retained by its subsidiary Dawson Dawson or Dawson City, city (1991 pop. 972), W Yukon Territory, Canada, at the confluence of the Yukon and Klondike rivers. It is the trade center of the Klondike mining region and a tourist center. Hail Hail, city, Saudi Arabia Hail (hä`ēl, hīl), city (1993 pop. 176,757), N central Saudi Arabia. The city grew because of its location on a pilgrimage route from Iraq to Mecca. Insurance Co. Agent commissions and other direct costs increased by $20.4 million, which were driven by the increase in premiums serviced in 1995. General and administrative expenses increased substantially to $28.9 million in 1995 compared to $11.5 million in 1994. This increase reflected the same factors affecting the fourth quarter. Commenting on the results for the quarter and year, John Hemmingson, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , said that, "Though earnings for the quarter and year were below our expectations, many of the issues relating to this performance were associated with handling record growth, as we took advantage of opportunities to enhance our position in the crop insurance industry. We increased our policy count from 50,000 in 1994 to over 150,000 in 1995, elevating us to the number two position in the industry. We acquired six companies, completed development of our VisAg(TM) farm management software and invested significantly in the systems and staff required to service the growth in our business while maintaining our service quality. While I'm I'm Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in not pleased with 1995's bottom line, I'm excited about our other accomplishments and optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that the initiatives undertaken last year will augment aug·ment v. aug·ment·ed, aug·ment·ing, aug·ments v.tr. 1. To make (something already developed or well under way) greater, as in size, extent, or quantity: core operating performance in 1996." The Company anticipates that first quarter MPCI premiums should fall in a range of 15 to 20 percent higher than the adjusted $186.7 million (including premiums serviced by Dawson) serviced in last year's first quarter due to the Company's continued growth. In addition, the Company will recognize the effects of Dawson's Dawson's may refer to:
adj. 1. Almost exact or correct: the approximate time of the accident. 2. $600,000. General and administrative expenses in the quarter are estimated to be equal to or less than those reported for the fourth quarter, exclusive of professional fees incurred in the first quarter relating to the previously reported investigation of the Company by an Independent Counsel. The Company also announced today that steps will be taken to relocate re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. the Company's headquarters and main offices to Overland Park, Kansas Overland Park is the second most populous city in the U.S. state of Kansas. It is located in Johnson County, a satellite city of Kansas City, and is near Olathe, Lenexa, Prairie Village and Leawood. In 2006, the estimated population is 167,500. . The relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. will strengthen communications among its various operating divisions and simplify the logistics logistics In military science, all the activities of armed-force units in support of combat units, including transport, supply, communications, and medical aid. The term, first used by Henri Jomini, Alfred Thayer Mahan, and others, was adopted by the U.S. of its operations. As reported previously, a special committee of the board of directors was appointed ap·point tr.v. ap·point·ed, ap·point·ing, ap·points 1. To select or designate to fill an office or a position: appointed her the chief operating officer of the company. 2. to review matters related to the investigation of the Company by the Independent Counsel. The special committee was given the authority and discretion to take any and all appropriate actions relating to the investigation. As a result of the special committee's investigation, the Company announced that John Hemmingson and Gary Gary, city (1990 pop. 116,646), Lake co., NW Ind., a port of entry on Lake Michigan; inc. 1909. Gary was founded by the U.S. Steel Corporation, which purchased the land in 1905 and landscaped it for a city. Black have been granted leaves of absences from their positions as president and CEO and executive vice president, respectively, of the Company, which will begin at such time as a new CEO is hired. The board of directors will immediately begin a national search for a new chief executive officer of the Company. Both Hemmingson and Black will continue as directors of the Company until the new CEO is in place, although Hemmingson has resigned his position as chairman of the board effective immediately. Horn and Vertin were unanimously elected chairman and vice chairman of the board of directors, respectively. In announcing these changes, the special committee acknowledged that contributions to the Company by John Hemmingson as president and CEO, and Gary Black as executive vice president, have been invaluable. The Company's Chairman of the Board, Paul Horn Paul Horn is the name of:
In a related development, Hemmingson and Black have agreed that during their leaves of absence, all capital stock in the Company owned by them will be the subject of irrevocable Unable to cancel or recall; that which is unalterable or irreversible. IRREVOCABLE. That which cannot be revoked. 2. A will may at all times be revoked by the same person who made it, he having a disposing mind; but the moment the testator is proxies to be granted to a fully independent third party, who shall be subject to the reasonable approval of the special committee. Hemmingson and Black currently own an aggregate of approximately 27 percent of the Company's issued and outstanding common stock. Crop Growers markets and services federal multi-peril crop insurance, and crop hail insurance for third party insurance companies and its own insurance company subsidiaries. Crop Growers is the nation's second largest servicer of crop insurance. The Company also develops, markets and sells farm management software and related mapping products. The Company's stock is traded on the NASDAQ Stock Market Nasdaq stock market The first electronic stock market listing over 5000 companies. The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Smallcap Market that trades emerging growth companies. under the symbol CGRO. The Company had 8,172,581 shares outstanding at December 31, 1995. -0-
Crop Growers Corporation and Subsidiaries
Consolidated Statements of Earnings
Three Months Ended Twelve Months Ended
December 31, December 31,
1994 1995 1994 1995
Revenues:
Service fees $7,769,575 $ 8,707,950 $48,868,629 $84,672,548
Premiums earned 599,607 (181,840) 599,607 (181,840)
Other income 110,279 266,945 834,658 1,396,307
Investment income 1,056,486 612,044 1,396,713 2,001,712
Total revenues 9,535,947 9,405,099 51,699,607 87,888,727
Expenses: Agent commissions and other direct costs 2,625,181 5,608,942 31,303,167 51,701,890 Losses incurred 599,519 (196,688) 599,519 (2,351,441) General and administrative 3,813,183 8,960,953 10,490,499 26,470,216 Depreciation 220,489 373,331 485,046 1,249,632 Amortization 205,062 502,548 550,385 1,165,840 Interest expense 59,989 67,563 394,167 858,640 Total expenses 7,523,423 15,316,649 43,822,783 79,094,777 Income (loss) before income taxes and minority interest 2,012,524 (5,911,550) 7,876,824 8,793,950 Income taxes (1,205,642) 2,334,916 (2,273,435) (3,429,640) Minority interest --- (187,633) (279,819) (306,987) Net income (loss) $ 806,882 $(3,764,267) $ 5,323,570 $ 5,057,323
Pro forma data for
income taxes:
Historic net
income $ 806,882 $ 5,323,570
Pro forma
provision for
income taxes 468,010 (280,975)
Pro forma net
income $1,274,892 $ 5,042,595
Pro forma earnings per common share $ 0.17 $ (0.45) $ 0.91 $ 0.61 Weighted average common shares outstanding 7,287,378 8,327,001 5,562,374 8,352,837
Crop Growers Corporation and Subsidiaries
Consolidated Balance Sheets
December 31, 1994 and 1995
Assets 1994 1995
Investments:
Fixed maturities, held to maturity $ 2,313,240 $ 2,311,177
Fixed maturities, available for sale 11,038,488 5,838,391
Equity securities, available for sale --- 1,757,540
Total investments 13,351,728 9,907,108
Cash and cash equivalents 2,975,363 6,980,570
Premiums receivable, net 50,719,003 60,944,012
Underwriting gain receivable 3,000,000 12,926,642
Reinsurance balances receivable 4,279,105 31,779,006
Property and equipment, net 6,750,589 11,687,066
Intangible assets, net 5,694,863 9,264,662
Income tax recoverable --- 5,205,526
Other assets 1,404,310 3,277,132
$ 88,174,961 $151,971,724
Liabilities and Stockholders' Equity
Premiums payable $ 8,582,553 $ 4,917,011
Commissions payable 10,692,311 14,142,811
Underwriting gain payable --- 4,512,961
Deferred taxes 231,606 1,657,934
Accounts payable and accrued liabilities 2,652,259 4,259,313
Reinsurance balances payable 4,279,105 16,538,351
Loss reserves 5,609,411 21,726,157
Deferred service fees 862,088 2,678,871
Notes payable to bank 14,052,000 32,245,539
Long-term debt 2,544,907 4,188,540
Total liabilities 49,506,240 106,867,488
Stockholders' equity:
Preferred stock (par value $.01):
10,000,000 shares authorized;
none issued and outstanding --- ---
Common stock (par value $.01):
40,000,000 shares authorized;
8,087,248 shares issued and
outstanding at December 31,
1994 and 8,172,581 issued
and outstanding at December 31,
1995 80,873 81,726
Paid-in capital 36,845,678 38,244,567
Retained earnings 1,938,904 6,643,985
Unrealized appreciation (depreciation)
of fixed maturity and equity
investments, net of deferred taxes (71,734) 208,958
Unearned compensation (125,000) (75,000)
Total stockholders' equity 38,668,721 45,104,236
$ 88,174,961 $151,971,724
CONTACT: Crop Growers Association Bob Rousey, 208/765-7645 |
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