Printer Friendly

MOTOR CLUB OF AMERICA ANNOUNCES SECOND QUARTER AND SIX MONTH RESULTS

 NEWARK, N.J., Aug. 12 /PRNewswire/ -- Motor Club of America (NASDAQ: MOTR) ("Holding") today reported results for the three and six months ended June 30, 1993.
 For the three months ended June 30, 1993 revenues were $8,539,175 compared with $19,341,247 reported for the same period in 1992. Net income was $980,784 or $.48 per share, compared with a net loss of $275,415 or $.13 per share in 1992.
 For the six months ended June 30, 1993 revenues were $18,322,661 compared with $38,826,836 reported for the same period in 1992. Net income was $2,088,270 or $1.02 per share, compared with $80,633 or $.04 per share in 1992.
 The 1992 three and six month results include the results of MCA Insurance Company ("MCAIC") and its subsidiaries; Holding's investment in MCAIC was written-off in the third quarter of 1992 as a result of its insolvency in the wake of Hurricane Andrew.
 Net income for the six and three month period ended June 30, 1993 includes $1,765,912 and $882,956 respectively, for the reversal of FAIR Act surtaxes previously accrued in 1991. The company has also reserved $316,000 in 1993 for a reinsurance dispute.
 Exclusive of these items as well as 1992 items related to the operations of MCAIC, net income for the six and three months ended June 30, 1993 was $639,000 and $29,000 as compared to net income of $391,000 and $244,000 for the same periods in 1992, respectively.
 Archer McWhorter, chairman of the board of Holding, stated, "We are pleased to report positive results for the third straight quarter. These results are again tempered by the work yet to do in rebuilding our financial strength, including the continued reduction of our expenses, regeneration of our revenue base and controlling the cost of our reinsurance."
 The earnings improvements are the result of lower loss ratios experienced in 1993, which have been offset by higher reinsurance costs during the year. These reinsurance costs will increase further after July 1, 1993, when new catastrophe reinsurance terms take effect.
 Holding announced earlier this week that the Oklahoma Insurance Department was seeking to reverse the stock dividend of Holding's subsidiary, Motor Club of America Insurance Company ("Motor Club") back to MCA Insurance Company in Liquidation.
 McWhorter reiterated Holding's position to the action taken, stating, "This action is without merit. We will aggressively contest this action and refute the Oklahoma Insurance Department's contention that MCAIC did not receive fair consideration."
 "We again register our disappointment that the State of Oklahoma would seek to reverse a transaction which it approved through its established regulatory channels based on facts which clearly identified fair consideration for MCAIC. No other facts regarding the dividend have changed. We had relied on this approval and cannot underscore our dismay at Oklahoma's attempt to reverse the transaction that they as well as the New Jersey Insurance Department had approved well before Hurricane Andrew. We are continuing with our operations uninterrupted."
 Motor Club is domiciled in the state of New Jersey and writes private passenger automobile insurance in that state. Motor Club's subsidiary, Preserver Insurance Company ("Preserver") writes homeowners and small commercial insurance in New Jersey. Motor Club and Preserver constitute approximately 95 percent of the consolidated revenues of Holding.
 MOTOR CLUB OF AMERICA AND SUBSIDIARIES
 Condensed Consolidated Statements of Operations
 (Unaudited)
 Period ended Six months Three months
 June 30 1993 1992(A) 1993 1992(A)
 Revenues:
 Insurance premiums $15,931,995 $34,302,748 $7,465,636 $17,054,613
 Net investment inc. 1,400,551 2,659,933 687,433 1,314,483
 Realized gains
 on sales of
 investments 162,702 122,400 --- 122,400
 Motor Club
 membership fees 629,623 809,231 308,183 393,991
 Other revenues 197,790 932,524 77,923 455,760
 Total revenues 18,322,661 38,826,836 8,539,175 19,341,247
 Losses and expenses:
 Insurance losses & loss
 expense incurred 9,529,992 22,018,246 4,978,353 11,821,850
 Amortization of
 deferred policy
 acquisition costs 4,801,407 11,838,222 1,753,198 6,065,481
 Other oper. expenses 3,475,429 4,724,666 1,623,921 1,652,597
 Reversal of prior
 year's accrual of
 New Jersey surtaxes
 and assessments (1,765,912) -- (882,956) --
 Motor Club benefits 151,212 165,069 65,423 76,734
 Total losses
 and expenses 16,192,128 38,746,203 7,537,939 19,616,662
 Income (loss) before
 federal income tax 2,130,533 80,633 1,001,236 (275,415)
 Provision for federal
 income taxes 42,263 -- 20,452 --
 Net income (loss) $2,088,270 $80,633 $980,784 ($275,415)
 Per common share:
 Net income (loss) $1.02 $.04 $.48 $.13
 (A) -- Amounts reclassified to conform with 1993 presentation.
 -0- 8/12/93
 /CONTACT: Patrick J. Haveron, vice president and controller of Motor Club of America, 201-733-4139/
 (MOTR)


CO: Motor Club of America ST: New Jersey IN: INS SU: ERN

TS-MP -- NY045 -- 2155 08/12/93 13:41 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Aug 12, 1993
Words:851
Previous Article:EDISTO RESOURCES ANNOUNCES MANAGEMENT CHANGES AFFECTING ESCO ENERGY
Next Article:DEVON ENERGY ANNOUNCES RECORD PRODUCTION, REVENUES AND EARNINGS FOR SECOND QUARTER, SIX MONTHS
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters