-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, H+3zMD/TDICW5Pgr4K6Sdg3vJwgJwYPyLzo0jbR0qSbaeNBYDII1vUNXOvdyi6Pa RxFwr7A6sqZ1XqM3q7IvMA== 0000100716-97-000015.txt : 19971113 0000100716-97-000015.hdr.sgml : 19971113 ACCESSION NUMBER: 0000100716-97-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971113 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNICO AMERICAN CORP CENTRAL INDEX KEY: 0000100716 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 952583928 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-03978 FILM NUMBER: 97716369 BUSINESS ADDRESS: STREET 1: 23251 MULHOLLAND DR CITY: WOODLAND HILLS STATE: CA ZIP: 91364 BUSINESS PHONE: 8185919800 MAIL ADDRESS: STREET 1: 23251 MULHOLLAND DRIVE CITY: WOODLAND HILLS STATE: CA ZIP: 91364 FORMER COMPANY: FORMER CONFORMED NAME: UNIVERSAL COVERAGE CORP DATE OF NAME CHANGE: 19730823 10-Q 1 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period from July 1, 1997 to September 30, 1997 Commission File No. 0-3978 UNICO AMERICAN CORPORATION (Exact name of registrant as specified in its charter) Nevada 95-2583928 (State or other jurisdiction of (I.R.S. Employee incorporation or organization) Identification No.) 23251 Mulholland Drive, Woodland Hills, California 91364 (Address of Principal Executive Offices) (Zip Code) (818) 591-9800 Registrant's telephone number Securities registered pursuant to Section 12(b)of the Act: None (Title of each class) Securities registered pursuant to Section 12(g)of the Act: Common Stock, No Par Value (Title of Class) No Change (Former name,former address and former fiscal year,if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No 6,153,203 Number of shares of common stock outstanding as of November 10, 1997 1 of 12 PART 1 - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS UNICO AMERICAN CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED)
September 30, December 31, 1997 1996 ------------ ------------ ASSETS Investments Available for sale: Fixed maturities, at market value (amortized cost: September 30, 1997 $85,836,196; December 31, 1996 $75,984,966 $87,292,984 $77,109,214 Equity securities at market (cost: September 30, 1997 $230,460; December 31, 1996 $0) 215,630 - Short-term investments, at cost 3,554,947 4,861,745 ----------- ----------- Total Investments 91,063,561 81,970,959 Cash 157,782 82,637 Accrued investment income 1,605,064 1,443,551 Accounts and notes receivable, net 7,647,754 8,898,839 Reinsurance recoverable: Paid losses and loss adjustment expenses 402,060 452,943 Unpaid losses and loss adjustment expenses 2,087,779 2,629,019 Prepaid reinsurance premiums 1,252,781 1,647,806 Deferred policy acquisition costs 4,967,800 4,953,085 Property and equipment (net of accumulated depreciation) 210,841 229,972 Deferred income taxes 1,470,430 1,503,655 Other assets 677,811 638,856 ----------- ----------- Total Assets $111,543,663 $104,451,322 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Unpaid losses and loss adjustment expenses $42,356,119 $39,740,865 Unearned premiums 21,991,362 22,120,241 Advance premiums 1,337,113 1,358,671 Funds held as security for performance 731,947 730,426 Accrued expenses and other liabilities 2,283,962 2,395,699 Income taxes payable 107,874 - Note payable - bank - 750,001 ---------- ---------- Total Liabilities $68,808,377 $67,095,903 ---------- ---------- STOCKHOLDERS' EQUITY Common stock, no par - authorized 10,000,000 shares issued and outstanding shares 6,153,203 at September 30, 1997 and 6,028,781 at December 31, 1996 2,836,781 2,836,422 Net unrealized investment gains 951,692 742,004 Retained earnings 38,946,813 33,776,993 ---------- ---------- Total Stockholders' Equity 42,735,286 37,355,419 ----------- ----------- Total Liabilities and Stockholders' Equity $111,543,663 $104,451,322 =========== ===========
See notes to consolidated financial statements. 2 of 12 UNICO AMERICAN CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended Nine Months Ended September 30, September 30, 1997 1996 1997 1996 ------ ------ ------ ------ REVENUES Insurance Company Revenues Premium earned $10,997,409 $9,847,786 $31,784,235 $28,524,110 Premium ceded 1,856,727 953,363 4,410,728 3,049,660 ---------- --------- ----------- ----------- Net Premium Earned 9,140,682 8,894,423 27,373,507 25,474,450 Investment income 1,239,020 1,043,134 3,584,168 2,979,269 Net realized investment gains 24,174 - 25,093 210,716 Other income 223 60 383 150 ---------- --------- ---------- ---------- Total Insurance Company Revenues 10,404,099 9,937,617 30,983,151 28,664,585 Other Revenues from Insurance Operations Gross commissions and fees 1,422,735 1,499,851 4,320,194 4,441,296 Investment income 35,894 47,515 105,607 123,361 Finance charges and late fees earned 302,555 298,460 894,480 885,257 Other income 729 1,456 7,083 4,712 ---------- ---------- ---------- ---------- Total Revenues 12,166,012 11,784,899 36,310,515 34,119,211 ---------- ---------- ---------- ---------- EXPENSES Losses and loss adjustment expenses 4,846,266 5,159,096 14,742,677 14,274,359 Policy acquisition costs 2,726,391 2,269,463 7,965,440 6,734,043 Salaries and employee benefits 885,196 928,726 2,745,272 2,762,264 Commissions to agents/brokers 242,139 312,200 811,600 950,274 Other operating expenses 653,822 598,293 2,007,258 2,089,964 --------- --------- ---------- ---------- Total Expenses 9,353,814 9,267,778 28,272,247 26,810,904 --------- --------- ---------- ---------- Income Before Taxes 2,812,198 2,517,121 8,038,268 7,308,307 Income Tax Provision 861,392 768,380 2,437,724 2,210,655 ------- ------- --------- --------- Net Income $1,950,806 $1,748,741 5,600,544 5,097,652 ========= ========= Retained earnings January 1, 33,776,993 27,345,753 Dividend paid to stockholders (430,724) (418,087) ---------- ---------- Retained Earnings September 30, $38,946,813 $32,025,318 ========== ========== PER SHARE DATA Weighted Average Shares Outstanding 6,403,457 6,248,511 6,396,280 6,227,995 Earnings Per Share $0.30 $0.28 $0.88 $0.82
See notes to consolidated financial statements. 3 of 12 UNICO AMERICAN CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30,
1997 1996 ------ ------ Net Income $5,600,544 $5,097,652 Adjustments to reconcile net income to net cash from operations Depreciation and amortization 63,438 109,670 Bond amortization, net 393,858 445,872 Net realized (gain) on sale of securities (25,093) (210,716) Changes in assets and liabilities Premium, notes and investment income receivable 1,089,572 (260,396) Reinsurance recoverable 592,123 1,562,915 Prepaid reinsurance premiums 395,025 (9,997) Deferred policy acquisitions costs (14,715) (395,582) Other assets (38,956) 425,383 Reserve for unpaid losses and loss adjustment expenses 2,615,254 3,065,451 Unearned premium reserve (128,879) 1,593,069 Funds held as security and advanced premiums (20,037) (43,876) Accrued expenses and other liabilities (111,733) 74,862 Income taxes current/deferred 33,077 (214,742) ---------- ---------- Net Cash Provided from Operations 10,443,478 11,239,565 ----------- ---------- Investing Activities Purchase of fixed maturity investments (15,372,354) (14,839,296) Proceeds from maturity of fixed maturity investments 5,098,000 5,946,892 Purchase of equity securities - cost (1,019,500) (3,546,673) Proceeds from sale of equity securities 814,132 2,767,938 Net decrease in short-term investments 1,336,062 1,058,389 Additions to property and equipment (44,307) (48,100) ---------- ----------- Net Cash (Used) by Investing Activities (9,187,967) (8,660,850) ---------- ----------- Financing Activities Proceeds from issuance of common stock 359 1,225 Repayment of note payable - bank (750,001) (1,795,000) Dividends paid to shareholders (430,724) (418,087) ----------- ----------- Net Cash (Used) by Financing Activities (1,180,366) (2,211,862) ----------- ----------- Net increase in cash 75,145 366,853 Cash at beginning of period 82,637 951 -------- -------- Cash at End of Period $157,782 $367,804 ======= ======= Supplemental cash flow information Cash paid during the period for: Interest $21,954 $107,930 Income Taxes $2,295,000 $2,440,000
See notes to consolidated financial statements. 4 of 12 UNICO AMERICAN CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1997 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business Unico American Corporation ("Unico") is an insurance holding company. Unico and its subsidiaries, all of which are wholly owned (the "Company"), provide, primarily in California, property, casualty, health and life insurance, and related premium financing. Principles of Consolidation The consolidated financial statements include the accounts of Unico American Corporation and its subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation. Basis of Presentation The consolidated financial statements have been prepared in conformity with generally accepted accounting principles (GAAP) which differ in some respects from those followed in reports to insurance regulatory authorities. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosure of certain assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. While every effort is made to ensure the integrity of such estimates, actual results could differ from those estimates. Investments Although all of the Company's fixed maturity investments are classified as available-for-sale and are stated at market value, the Company's investment guidelines place primary emphasis on buying and holding high-quality investments. Investments in equity securities are carried at market value. The unrealized gains or losses from fixed maturities and equity securities are reported as a separate component of stockholders' equity, net of deferred income taxes. Short-term investments are carried at cost which approximates market value. When a decline in the value of a fixed maturity or equity security is considered other than temporary, a loss is recognized in the consolidated statement of operations. Realized gains and losses are included in the consolidated statements of operations based upon the specific identification method. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using accelerated depreciation methods over the estimated useful lives of the related assets. Income Taxes The provision for income taxes is computed on the basis of income as reported for financial reporting purposes under generally accepted accounting principles. Deferred income taxes arise principally from certain assets and liabilities which are recognized for income tax purposes in different periods than for financial statements. 5 of 12 UNICO AMERICAN CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBR 30, 1997 NOTE 2 - RESTRICTED FUNDS As required by law, the Company segregates from its operating accounts premiums collected from insureds into separate trust accounts. As of a September 30, 1997, these trust funds represent $2,021,155 of the Company's cash and short-term investments. In addition, $2,725,000 of the Company's investments represents statutory deposits of Crusader which are assigned to and held by the California State Treasurer and the Insurance Commissioner of the State of Nevada. These deposits are required for Crusader to write certain lines of business in California and for its admission in states other than California. NOTE 3 - FUNDS HELD AS SECURITY Funds held as security for performance represent funds received in order to guarantee the contractual obligations entered into with customers. NOTE 4 - STATUTORY CAPITAL AND SURPLUS As of September 30, 1997, Crusader's statutory capital and surplus were deemed sufficient to support its present insurance premium writings. NOTE 5 - INCENTIVE STOCK OPTION PLAN The Company's 1985 stock option plan provided for the grant of "incentive stock options" to officers and key employees. The plan covers an aggregate of 1,500,000 shares of the Company's common stock (subject to adjustment in the case of stock splits, reverse stock splits, stock dividends, etc.). As of September 30, 1997, 374,313 options were outstanding of which 275,411 were currently exercisable. There are no additional options available for future grant under the 1985 plan. NOTE 6 - CLAIMS AND LITIGATION The Company, by virtue of the nature of the business conducted by it, becomes involved in numerous legal proceedings in which it may be named as either plaintiff or defendant. The Company is required to resort to legal proceedings from time to time in order to enforce collection of premiums and other commissions or fees for the services rendered to customers or to their agents. These routine items of litigation do not materially affect the Company and are handled on a routine basis by the Company through its general counsel. Likewise, the Company is sometimes named as a cross-defendant in litigation which is principally directed against that insurer who has issued a policy of insurance directly or indirectly through the Company. Incidental actions are sometimes brought by customers or other agents which relate to disputes concerning the issuance or non-issuance of individual policies. These items are also handled on a routine basis by the Company's general counsel, and they do not materially affect the operations of the Company. Management is confident that the ultimate outcome of pending litigation should not have an adverse effect on the Company's consolidated operation or financial position. 6 of 12 UNICO AMERICAN CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1997 NOTE 7 - LEASE COMMITMENTS AND CONTINGENCIES The Company presently occupies a 46,000 square foot building located at 23251 Mulholland Drive, Woodland Hills, California, under a master lease expiring March 31, 2007. The lease provides for an annual gross rental of $1,025,952. Erwin Cheldin, the Company's president, chairman and principal stockholder, is the owner of the building. The terms of the lease were at least as favorable to the Company as could have been obtained from unaffiliated third parties. The Company utilizes for its own operations 100% of the space it leases. NOTE 8 - RECENTLY ISSUED ACCOUNTING STANDARDS In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128 (SFAS No. 128), "Earnings per Share." SFAS No. 128 requires the Company to disclose a basic and diluted earnings per share calculation. Basic earnings per share excludes common stock equivalents from the EPS calculation, while diluted EPS is calculated consistent with the Company's primary earnings per share calculation. The Company will adopt the provisions of SFAS No. 128 in the 1997 year-end consolidated financial statements. Pro forma basic and diluted earnings per share for the three months and nine months ended September 30, 1997 and 1996, assuming that SFAS No. 128 was effective as of the beginning of the year, are presented below: Three Months Ended Nine Months Ended September 30, September 30, ------------- ------------- 1997 1996 1997 1996 ---- ---- ---- ---- Basic EPS $0.32 $0.29 $0.91 $0.85 Diluted EPS $0.30 $0.28 $0.88 $0.82 Statement of Financial Accounting Standards No. 130 (SFAS No. 130), "Reporting Comprehensive Income," and Statement of Financial Accounting Standards No. 131 (SFAS No. 131), "Disclosures about Segments of an Enterprise and Related Information," were issued in June 1997 and are effective for fiscal years beginning after December 15, 1997. SFAS No. 130 establishes standards for the reporting and display of comprehensive income, which includes net income and changes in equity except those resulting from investments by, or distributions to stockholders. SFAS No. 131 establishes standards for disclosures related to business operating segments. The Company is currently evaluating the impact that these statements will have on the consolidated financial statements. NOTE 9 In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all necessary adjustments, which consist of normal recurring adjustments, to present fairly the results of operations for the three and nine months ended September 30, 1997, and September 30, 1996. NOTE 10 The results of operations for the three and nine months ended September 30, 1997, should not be considered as necessarily indicative of the results to be expected for the full year. 7 of 12 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (a) Liquidity and Capital Resources: Due to the nature of the Company's business (insurance and insurance services) and whereas Company growth does not normally require material reinvestment of profits into property or equipment, the cash flow generated from operations usually results in improved liquidity for the Company. Crusader's loss and loss adjustment expense payments are the most significant cash flow requirement of the Company. These payments are continually monitored and projected to ensure that the Company has the liquidity to cover these payments without the need to liquidate its investments. As of September 30, 1997, the Company had cash and cash investments of $89,779,385 (at amortized cost) of which $86,625,573 (96%) were investments of Crusader. As of the quarter ended September 30, 1997, the Company had invested $85,836,196 (at amortized cost) or 96% of its invested assets in fixed maturity obligations. Although all of the Company's fixed maturity investments are classified as available-for-sale, the Company's investment guidelines place primary emphasis on buying and holding high-quality investments. The balance of the Company's investments are in equity securities of a regional utility company and high-quality, short-term investments that include a U.S. treasury bill, bank money market accounts, certificates of deposit, commercial paper and a short-term treasury money market fund. The Company's investments in fixed maturity obligations of $85,836,196 (at amortized cost) include $38,539,394 (45%) of tax exempt, pre-refunded state and municipal bonds, $18,472,565 (21%) of U.S. treasury securities, $28,224,237 (33%) in high-quality industrial bonds and $600,000 (1%) of FDIC insured certificates of deposit. The tax exempt interest income earned for the three and nine months ended September 30, 1997, was $448,986 and $1,353,148 respectively. The tax exempt interest income earned for the three and nine months ended September 30, 1996, was $454,961 and $1,308,706 respectively. The Company's investment policy limits investments in any one company to no more than $1,500,000. This limitation excludes bond premiums paid in excess of par value and U.S. Government or U.S. Government guaranteed issues. The Company's fixed maturity obligations have maturities no greater than eight years. All of the Company's investments are high-grade investment quality. On August 15, 1997, the Company paid the $0.07 (seven cents) per common share cash dividend which was declared by the Board of Directors on March 4, 1997, to shareholders of record at the close of business on August 1, 1997. The Company's premium finance subsidiary, American Acceptance Corporation ("AAC"), has a bank credit line with a variable rate of interest based on the London Inter Bank Offered Rate ("LIBOR"). This bank credit line is only used to provide AAC with the additional funds it requires to finance insurance premiums. AAC has been paying down its bank note payable from its internal cash flow as well as from intercompany loans from its parent, Unico. The bank note payable was paid in full on July 3, 1997, resulting in no amounts being outstanding under the bank credit line. Due to decreased utilization, AAC decreased this bank credit line from $4,000,000 to $2,000,000 in September, 1997. 8 of 12 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) (a) Liquidity and Capital Resources (continued) Although material capital expenditures may also be funded through borrowing, the Company believes that cash generated from operations, plus cash and short-term investments at the quarter end, net of trust restriction of $2,021,155 and statutory deposits of $2,725,000, should be sufficient to meet its operating requirements during the next twelve months without the necessity of borrowing funds. Crusader is restricted in the amount of dividends it may pay to its parent, Unico, without prior regulatory approval by the California Department of Insurance. Crusader anticipates that it will not be required to obtain prior regulatory approval for any dividend which it may pay to Unico in the next twelve months. There are no material commitments for capital expenditures as of the date of this report. (b) Results of Operations: All comparisons made in this discussion are comparing the three and nine months ended September 30, 1997, to the three and nine months ended September 30, 1996, unless otherwise indicated. The Company's net income increased $202,065 (12%) to $1,950,806 for the three months and $502,892 (10%) to $5,600,544 for the nine months ended September 30, 1997, compared to net income of $1,748,741 for the three months and $5,097,652 for the nine months ended September 30, 1996. Total revenues increased $381,113 (3%) for the three months and $2,191,304 (6%) for the nine months ended September 30, 1997, when compared to the three and nine months ended September 30, 1996. Premium earned before reinsurance increased $1,149,623 (12%) for the three months and $3,260,125 (11%) for the nine months ending September 30, 1997. Crusader's primary line of business is its Commercial Package business representing 96% of all premiums earned in both the three months and the nine months ended September 30, 1997. The Commercial Package business continued to grow with earned premium increasing $1,090,596 (11%) to $10,586,308 for the three months and $2,692,302 (10%) to $30,486,304 for the nine months ended September 30, 1997, as compared to the corresponding period of the prior year. Crusader's other lines of business, which include Commercial Property and Other Liability increased $59,027 (17%) for the three months and $567,823 (78%) for the nine months ended September 30, 1997 as compared to the corresponding period of the prior year. The growth in earned premium in California represented 73% of the total increase in earned premium for the three months and 63% for the nine months ended September 30, 1997. The ratio of premium ceded to premium earned increased from 10% to 17% for the three months and increased from 11% to 14% for the nine months ending September 30, 1997. Although this ratio increased, it is still less than the 18% average over the last three fiscal years. Effective July 1, 1997, Crusader increased its per risk loss retention from $150,000 to $250,000. This is only one of many factors which determine ultimate reinsurance costs. 9 of 12 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) (b) Results of Operations (continued) Losses and loss adjustment expenses were 53% of net premium earned for the three months and 54% of net premium earned for the nine months ended September 30, 1997, compared to 58% of net premium earned for the three months and 56% of net premium earned for the nine months ended September 30, 1996. Policy acquisition costs consist of commissions, premium taxes, inspection fees, and certain other underwriting costs which are directly or indirectly related to the production of Crusader insurance policies. These costs include both Crusader expenses and allocated expenses of other Unico subsidiaries. Crusader's reinsurers pay Crusader a ceding commission, which is primarily a reimbursement of the acquisition cost related to the ceded premium. Policy acquisition costs, net of ceding commission, are deferred and amortized as the related premiums are earned. These costs were 30% of net premium earned for the three months and 29% of net premium earned for the nine months ended September 30, 1997, compared to 26% of net premium earned for the three and nine months ended September 30, 1996. This increase was primarily due to a decrease in reinsurance ceding commissions as a percentage of premium ceded. Investment income, excluding realized investment gains, increased $184,265 (17%) to $1,274,914 for the three months and increased $587,145 (19%) to $3,689,775 for the nine months ended September 30, 1997, compared to the three and nine months ended September 30, 1996. This increase was primarily due to a 16% increase (at amortized cost) in invested assets. Commission and fee income decreased $77,116 (5%) to $1,422,735 for the three months and decreased $121,102 (3%) to $4,320,194 for the nine months ended September 30, 1997, compared to the three and nine months ended September 30, 1996. This decrease was primarily due to a decline in commissions and fees from the Company's health and life insurance program of $104,177 (15%) for the three months and $255,655 (12%) for the nine months ended September 30, 1997. Commissions to agents/brokers decreased $70,061 (22%) for the three months and $138,674 (15%) for the nine months ended September 30, 1997, compared to the three and nine months ended September 30, 1996. The decrease was primarily due to decreased sales in the health and life insurance program. Other operating expenses increased $55,529 (9%) for the three months and decreased $82,706 (4%) for the nine months ended September 30, 1997, compared to the three and nine months ended September 30, 1996. There were no significant changes in other revenue or expense items. The effect of inflation on net income of the Company during the three and nine months ended September 30, 1997, and 1996 was not significant. 10 of 12 ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not Applicable PART II - OTHER INFORMATION ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: Exhibit 27 - Financial Data Schedule (b) Reports on Form 8-K: On Form 8-K dated August 27, 1997, with date of earliest event reported being August 25, 1997, Registrant reported under Item 4, a change in Registrant's Certifying Accountant. Item 4 of the Form 8-K was amended by Form 8-KA dated August 29, 1997. 11 of 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned there unto authorized. UNICO AMERICAN CORPORATION Date: November 12, 1997 By:/s/ Erwin Cheldin --------------------- Erwin Cheldin Chairman of the Board, President and Chief Executive Officer, (Principal Executive Officer) Date: November 12, 1997 By:/s/ Lester A. Aaron ----------------------- Lester A. Aaron Treasurer, Chief Financial Officer, (Principal Accounting and Principal Financial Officer) 12 of 12 EX-27 2 FDS --
7 1 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 90,847,931 0 0 215,630 0 0 91,063,561 157,782 402,060 4,967,800 111,543,663 42,356,119 21,991,362 2,069,060 0 0 0 0 2,836,781 39,898,505 111,543,663 27,373,507 3,689,775 25,093 5,222,140 14,742,677 7,965,440 5,564,130 8,038,268 2,437,724 5,600,544 0 0 0 5,600,544 .88 .88 0 0 0 0 0 0 0
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