-----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, GAuTGDTJPiUOW+7nQ2kecDDspduncXJ7pjKGVhV5Fn6uzw9qRQrBVppmuv8xun+y zfrRqcbtXNgHtOTv0DNRyA== 0000950144-05-009509.txt : 20050913 0000950144-05-009509.hdr.sgml : 20050913 20050912192322 ACCESSION NUMBER: 0000950144-05-009509 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050912 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050913 DATE AS OF CHANGE: 20050912 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST ACCEPTANCE CORP /DE/ CENTRAL INDEX KEY: 0001017907 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 751328153 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12117 FILM NUMBER: 051080881 BUSINESS ADDRESS: STREET 1: 3813 GREEN HILLS VILLAGE DRIVE CITY: NASHVILLE STATE: TN ZIP: 37215 BUSINESS PHONE: 615-844-2800 MAIL ADDRESS: STREET 1: 3813 GREEN HILLS VILLAGE DRIVE CITY: NASHVILLE STATE: TN ZIP: 37215 FORMER COMPANY: FORMER CONFORMED NAME: LIBERTE INVESTORS INC DATE OF NAME CHANGE: 19960701 8-K 1 g97319e8vk.htm FIRST ACCEPTANCE CORPORATION - FORM 8-K FIRST ACCEPTANCE CORPORATION - FORM 8-K
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): September 13, 2005 (September 12, 2005)
FIRST ACCEPTANCE CORPORATION
 
(Exact Name of Registrant as Specified in Charter)
         
Delaware   1-6802   75-1328153
         
(State or Other Jurisdiction   (Commission File Number)   (I.R.S. Employer
of Incorporation)       Identification No.)
     
3813 Green Hills Village Drive        
Nashville, Tennessee   37215
     
(Address of Principal Executive Offices)   (Zip Code)
(615) 844-2800
 
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
 
(Former Name or Former Address, if Changed Since Last Report)
     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
     o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
     o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
     o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
     o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

TABLE OF CONTENTS

Item 2.02. Results of Operations and Financial Condition.
Item 7.01. Regulation FD Disclosure.
Item 9.01. Financial Statements and Exhibits.
SIGNATURE
INDEX TO EXHIBITS
EX-99 PRESS RELEASE 09/12/05

Table of Contents

Item 2.02. Results of Operations and Financial Condition.
     On September 12, 2005, First Acceptance Corporation issued a press release announcing its results of operations for the fourth quarter and fiscal year ended June 30, 2005. The text of the release is set forth in Exhibit 99.
Item 7.01. Regulation FD Disclosure.
     On September 12, 2005, First Acceptance Corporation issued a press release announcing its results of operations for the fourth quarter and fiscal year ended June 30, 2005. The text of the release is set forth in Exhibit 99.
Item 9.01. Financial Statements and Exhibits.
     (c) Exhibits
         
  99    
Press release dated September 12, 2005

 

Table of Contents

SIGNATURE
     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, hereunto duly authorized.
         
  FIRST ACCEPTANCE CORPORATION
 		  
  By:   /s/ Charles D. Hamilton    
    Charles D. Hamilton   
    Senior Vice President, Chief Financial Officer and Treasurer   
 
Date: September 12, 2005

 

Table of Contents

INDEX TO EXHIBITS
         
Exhibit No.   Description
  99    
Press release dated September 12, 2005

 

EX-99 2 g97319exv99.txt EX-99 PRESS RELEASE 09/12/05 EXHIBIT 99 PRESS RELEASE Source: First Acceptance Corporation Contact: Chuck Hamilton (615) 844-2811 FIRST ACCEPTANCE CORPORATION REPORTS FOURTH QUARTER AND FISCAL YEAR 2005 FINANCIAL RESULTS NASHVILLE, TN, September 12, 2005 /PRNewswire-FirstCall/ -- First Acceptance Corporation (NYSE: FAC) today reported its financial results for the fourth quarter and fiscal year ended June 30, 2005. ACTUAL RESULTS Net income for the three months ended June 30, 2005 was $13.2 million, or $0.27 per share on a fully-diluted basis, compared to a net loss of $6.1 million, or $0.16 per share on a fully-diluted basis, for the same period of fiscal 2004. The 2005 period includes an income tax benefit of $10.6 million from a decrease in the valuation allowance for the Company's deferred tax asset. Such decrease was a result of taxable income for the year ended June 30, 2005 exceeding the estimate used by management in establishing the valuation allowance at June 30, 2004 in addition to a revision in management's estimate of future taxable income based on the results for the most recent fiscal year. The 2004 period includes expenses of $3.3 million in severance costs and $7.6 million in stock-based compensation to terminated employees as a result of the April 30, 2004 acquisition of USAuto. Total weighted average diluted shares increased from 38.2 million to 49.4 million over the same period as a result of the effect of the additional shares issued in the April 2004 rights offering and the USAuto acquisition. Net income for the year ended June 30, 2005 was $26.2 million, or $0.53 per share on a fully-diluted basis, compared to a net loss of $3.8 million, or $0.15 per share on a fully-diluted basis, for fiscal 2004. Total revenues grew to $166.8 million for the year ended June 30, 2005 from $23.2 million for fiscal 2004 as a result of the inclusion of USAuto's non-standard automobile insurance operations for the full year in fiscal 2005 as opposed to only two months in fiscal 2004. Total weighted average diluted shares increased from 25.0 million to 49.0 million over the same period as a result of the effect of the shares issued in the rights offering and the USAuto acquisition. The $10.6 million tax benefit related to the decrease in the valuation allowance for the Company's deferred tax asset accounted for net income per share on a fully-diluted basis of $0.21 and $0.22, respectively, for the three months and year ended June 30, 2005. Income before income taxes for the year was $24.0 million versus a loss before income taxes of $6.0 million for fiscal 2004 and for the three months ended June 30, 2005, was $4.0 million versus a loss before income taxes of $8.3 million for the same period of fiscal 2004. Both 2004 periods included the $3.3 million in severance costs and the $7.6 million in stock-based compensation referred to above. There were no gains on sales of foreclosed real estate in either the three months ended June 30, 2005 or 2004. Net income for the year ended June 30, 2005 included $0.5 million (net of tax), or $0.01 per share on a fully-diluted basis, from gains on sales of foreclosed real estate, while the year ended June 30, 2004 included $2.7 million (net of tax), or $0.11 per share on a fully-diluted basis, from gains on sales of foreclosed real estate. PRO FORMA RESULTS - PRIOR PERIODS On a pro forma basis, which assumes that the acquisition of USAuto took place on July 1, 2003, for the three months ended June 30, 2004, net income was $3.8 million and, on a fully-diluted basis, net income per share was $0.08. On a pro-forma basis, income before income taxes for the three months ended June 30, 2004 was $5.8 million. On a pro forma basis for the year ended June 30, 2004, total revenues were $100.3 million, net income was $11.6 million and, on a fully-diluted basis, net income per share was $0.24. Pro forma net income for the year ended June 30, 2004 included gains on sales of foreclosed real estate of $2.7 million (net of tax), or $0.06 per share on a fully-diluted basis. On a pro-forma basis, income before income taxes for the year ended June 30, 2004 was $18.6 million. INSURANCE OPERATIONS o KEY RATIOS - The Company's loss ratios were 68.8% and 66.1%, respectively, for the three months and year ended June 30, 2005, as compared with 54.4% and 63.4%, respectively, for the same periods last year on a pro forma basis. Similarly, the Company's combined ratios were 90.8% and 83.8%, respectively, compared with 68.4% and 79.2% for the same periods. The loss ratio for the three months ended June 30, 2005 increased primarily as a result of loss reserve strengthening in the quarter due to higher bodily injury costs experienced over the past six months in Georgia. This compares to a favorable development in loss reserves for prior periods that was recognized in the pro forma results for the three months ended June 30, 2004. The expense ratio for the three months ended June 30, 2005 increased primarily as a result of costs incurred in adding additional retail locations. o OFFICE EXPANSION - During the three months ended June 30, 2005, the Company added 84 additional offices, compared to 31 offices added during the three months ended March 31, 2005 and 13 offices added during the three months ended June 30, 2004 by USAuto. Of the stores added during the three months ended June 30, 2005, 56 stores were added in Texas where the Company commenced operations effective January 1, 2005 with the acquisition of 15 offices. As of September 1, 2005, the Company leased 334 retail offices in 11 states. o PREMIUM GROWTH - Comparing the actual results for the three months and year ended June 30, 2005 to the pro forma results for the same periods last year, net premiums earned increased by 137% and 129%, respectively. This increase is primarily the result of non-renewing our 50% quota share reinsurance on September 1, 2004. The increase was also driven by increasing the percentage of reinsurance assumed on business written in Alabama from 15% to 50% effective February 2004, and to 100% effective February 2005. In addition to these factors, the number of insured policies in force serviced by the Company at June 30, 2005 increased 31% over the number of policies in force at June 30, 2004. Total gross premiums earned (before the effects of reinsurance) for all business serviced by the 2 Company increased 17% to $149.9 million for the year ended June 30, 2005 from $127.9 million on a pro-forma basis for the year ended June 30, 2004. o ALABAMA - The Company is now licensed in Alabama and, starting in May 2005, began writing all new business there on a direct basis. As a result, in Alabama, we no longer incur the contractual costs associated with writing business through another insurance company. REAL ESTATE OPERATIONS The Company has six parcels of land remaining to be sold in the San Antonio area with a book value of $1.0 million at June 30, 2005. There was no real estate sales activity during the most recent quarter. CASH AND INVESTED ASSETS During the three months ended June 30, 2005, the Company contributed $2.0 million to the statutory capital and surplus of its two insurance company subsidiaries, USAuto Insurance Company Inc. and Village Auto Insurance Company Inc., to support additional premium writings. At June 30, 2005, the Company held unrestricted cash and investments of $11.2 million that is available for general corporate purposes and to provide support for increased premium writings of the insurance operations. ABOUT FIRST ACCEPTANCE CORPORATION First Acceptance Corporation began its operations as Liberte Investors, Inc. in 1986. Its insurance subsidiary, USAuto, which began operations in 1995, provides non-standard private passenger automobile insurance, primarily through employee-agents. As of September 1, 2005, the Company leased 334 retail offices in 11 states. The Company's insurance company subsidiaries are licensed to do business in 24 states. This press release contains forward-looking statements. These statements, which have been included in reliance on the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, involve risks and uncertainties. Investors are hereby cautioned that these statements may be affected by important factors, including, among others, the factors set forth in the Company's Annual Report on Form 10-K and its other filings with the Securities and Exchange Commission. Actual operations and results may differ materially from the results discussed in the forward-looking statements. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. 3 FIRST ACCEPTANCE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS ($000S EXCEPT PER SHARE DATA) (UNAUDITED)
Actual Pro forma(2) ------------------------------------------------- ----------------------- Three Months Three Months Ended Year Ended Ended Year Ended June 30, June 30, June 30, June 30, ---------------------- ----------------------- ------------ ---------- 2005 2004(1) 2005 2004(1) 2004 2004 -------- -------- --------- -------- ------- -------- REVENUES: Premiums earned $ 41,613 $ 11,728 $ 132,347 $ 11,728 $17,541 $ 57,716 Commissions and fees 7,868 4,401 27,151 4,401 6,639 26,275 Ceding commissions from reinsurer(3) (628) 1,925 2,975 1,925 2,872 10,674 Gains on sales of foreclosed real estate -- -- 755 4,147 -- 4,147 Investment income 898 338 3,353 958 341 1,431 Other gains (losses) 22 (6) 214 (6) 52 80 -------- -------- --------- -------- ------- -------- Total revenues 49,773 18,386 166,795 23,153 27,445 100,323 -------- -------- --------- -------- ------- -------- EXPENSES: Losses and loss adjustment expenses 28,616 7,167 87,493 7,167 9,535 36,616 Insurance operating expenses 15,806 7,194 49,921 7,194 10,935 41,142 Other operating expenses 792 4,111 2,775 6,235 711 2,278 Stock-based compensation 95 7,560 332 7,850 -- -- Depreciation and amortization 322 615 1,920 648 377 1,366 Interest expense 144 44 351 44 69 318 -------- -------- --------- -------- ------- -------- Total expenses 45,775 26,691 142,792 29,138 21,627 81,720 -------- -------- --------- -------- ------- -------- Income (loss) before income taxes 3,998 (8,305) 24,003 (5,985) 5,818 18,603 Income tax (benefit) expense(4) (9,203) (2,189) (2,153) (2,189) 2,036 6,983 -------- -------- --------- -------- ------- -------- Net income (loss) $ 13,201 $ (6,116) $ 26,156 $ (3,796) $ 3,782 $ 11,620 ======== ======== ========= ======== ======= ======== Basic net income (loss) per share $ 0.28 $ (0.16) $ 0.56 $ (0.15) $ 0.08 $ 0.25 Diluted net income (loss) per share $ 0.27 $ (0.16) $ 0.53 $ (0.15) $ 0.08 $ 0.24 Weighted average basic shares 47,444 38,190 47,055 24,965 46,423 46,405 Weighted average diluted shares 49,378 38,190 48,989 24,965 47,897 47,883
- ----------------- (1) Actual results reflect USAuto's insurance operations since the date of acquisition (April 30, 2004). (2) Pro forma results give effect to the USAuto acquisition and related transactions as if they had been consummated on July 1, 2003. The pro forma results also give effect to the elimination of certain expenses that have been discontinued directly as a result of the acquisition, such as the compensation expense of terminated employees. (3) The reduction in ceding commissions from reinsurer for the three months ended June 30, 2005 was the result of a re-estimation based upon loss experience. (4) The three months and year ended June 30, 2005 include a $10,594 decrease in the valuation allowance for the deferred tax asset. 4 FIRST ACCEPTANCE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS - BY BUSINESS SEGMENT ($000S EXCEPT PER SHARE DATA) (UNAUDITED)
Actual Pro forma(2) ------------------------------------------------- ----------------------- Three Months INSURANCE OPERATIONS Three Months Ended Year Ended Ended Year Ended June 30, June 30, June 30, June 30, ---------------------- --------------------- ------------ ---------- 2005 2004(1) 2005 2004(1) 2004 2004 -------- -------- -------- -------- ------- ------- REVENUES: Premiums earned $ 41,613 $ 11,728 $132,347 $ 11,728 $17,541 $57,716 Commissions and fees 7,868 4,401 27,151 4,401 6,639 26,275 Ceding commissions from reinsurer(4) (628) 1,925 2,975 1,925 2,872 10,674 Investment income 756 180 2,287 180 271 1,007 Other gains (losses) 22 (6) 214 (6) 52 80 -------- -------- -------- -------- ------- ------- Total revenues 49,631 18,228 164,974 18,228 27,375 95,752 -------- -------- -------- -------- ------- ------- EXPENSES: Losses and loss adjustment expenses 28,616 7,167 87,493 7,167 9,535 36,616 Operating expenses 15,806 7,194 49,921 7,194 10,935 41,142 Depreciation and amortization 322 608 1,920 608 377 1,366 -------- -------- -------- -------- ------- ------- Total expenses 44,744 14,969 139,334 14,969 20,847 79,124 -------- -------- -------- -------- ------- ------- Income before income taxes $ 4,887 $ 3,259 $ 25,640 $ 3,259 $ 6,528 $16,628 ======== ======== ======== ======== ======= =======
Actual Pro forma (2) ------------------------------------------------ ------------------------ Three Months Three Months Ended Year Ended Ended Year Ended REAL ESTATE AND CORPORATE(3) June 30, June 30, June 30, June 30, --------------------- --------------------- ------------ ---------- 2005 2004 2005 2004 2004 2004 ------- -------- ------- -------- ----- ------ REVENUES: Gains on sales of foreclosed real estate $ -- $ -- $ 755 $ 4,147 $ -- $4,147 Investment income 142 158 1,066 778 70 424 ------- -------- ------- -------- ----- ------ Total revenues 142 158 1,821 4,925 70 4,571 ------- -------- ------- -------- ----- ------ EXPENSES: Operating expenses 792 4,111 2,775 6,235 711 2,278 Stock-based compensation 95 7,560 332 7,850 -- -- Depreciation -- 7 -- 40 -- -- Interest expense 144 44 351 44 69 318 ------- -------- ------- -------- ----- ------ Total expenses 1,031 11,722 3,458 14,169 780 2,596 ------- -------- ------- -------- ----- ------ (Loss) income before income taxes $ (889) $(11,564) $(1,637) $ (9,244) $(710) $1,975 ======= ======== ======= ======== ===== ======
- ----------------------- (1) Actual results reflect USAuto's insurance operations since the date of acquisition (April 30, 2004). (2) Pro forma results give effect to the USAuto acquisition and related transactions as if they had been consummated on July 1, 2003. The pro forma results also give effect to the elimination of certain expenses that have been discontinued directly as a result of the acquisition, such as the compensation expense of terminated employees. (3) Includes activities related to acquiring an operating company and disposing of foreclosed real estate held for sale in addition to interest expense associated with all debt and the costs associated with being a public company. (4) The reduction in ceding commissions from reinsurer for the three months ended June 30, 2005 was the result of a re-estimation based upon loss experience. 5 FIRST ACCEPTANCE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ($000S EXCEPT PER SHARE DATA) (UNAUDITED)
June 30, --------------------- 2005 2004 -------- -------- ASSETS Fixed maturities, available-for-sale, at market value $ 74,840 $ 33,243 Investment in mutual fund, at market value 10,920 -- Cash and cash equivalents 24,762 38,352 Premiums and fees receivable 42,908 32,076 Reinsurance receivables 4,490 24,681 Deferred tax asset 48,106 45,493 Other assets 11,031 7,800 Foreclosed real estate held for sale 961 1,108 Goodwill and identifiable intangible assets 112,704 102,914 -------- -------- TOTAL $330,722 $285,667 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Total policy liabilities 90,649 63,867 Amounts due to reinsurers and insurance companies 935 13,750 Note payable to financial institution -- 4,000 Other liabilities 10,809 9,824 -------- -------- Total liabilities 102,393 91,441 Total stockholders' equity 228,329 194,226 -------- -------- TOTAL $330,722 $285,667 ======== ======== Book value per share $ 4.81 $ 4.17
6 FIRST ACCEPTANCE CORPORATION AND SUBSIDIARIES SUPPLEMENTAL DATA ($000S EXCEPT PER SHARE DATA) (UNAUDITED)
GROSS PREMIUMS EARNED BY STATE Actual Pro forma(2) ------------------------------------------------ -------------------------- Three Months Three Months Ended Year Ended Ended Year Ended June 30, June 30, June 30, June 30, --------------------- --------------------- ------------ ---------- 2005 2004(1) 2005 2004(1) 2004 2004 ------- -------- -------- ------- ------- -------- Insurance company subsidiaries: Georgia $17,522 $ 10,582 $ 67,442 $10,582 $15,682 $ 53,878 Tennessee 6,710 4,460 26,205 4,460 6,710 25,387 Ohio 3,339 1,250 10,703 1,250 1,854 5,789 Alabama 1,383 -- 1,383 -- -- -- Mississippi 1,247 680 4,431 680 1,034 3,822 Missouri 1,239 587 4,193 587 892 3,125 Florida 994 -- 1,181 -- -- -- Indiana 941 23 2,032 23 25 25 Illinois 65 -- 112 -- -- -- Pennsylvania 24 -- 24 -- -- -- ------- -------- -------- ------- ------- -------- 33,464 17,582 117,706 17,582 26,197 92,026 ------- -------- -------- ------- ------- -------- MGA subsidiaries: Alabama 5,743 4,331 25,227 4,331 6,496 24,219 Texas 2,408 -- 4,569 -- -- -- Georgia 307 837 2,364 837 1,374 11,618 ------- -------- -------- ------- ------- -------- 8,458 5,168 32,160 5,168 7,870 35,837 ------- -------- -------- ------- ------- -------- Total gross premiums earned $41,922 $ 22,750 $149,866 $22,750 $34,067 $127,863 ======= ======== ======== ======= ======= ========
NET PREMIUMS EARNED BY STATE Actual Pro forma(2) ----------------------------------------------- ------------------------ Three Months Three Months Ended Year Ended Ended Year Ended June 30, June 30, June 30, June 30, -------------------- --------------------- ------------ ---------- 2005 2004(1) 2005 2004(1) 2004 2004 ------- ------- -------- ------- ------- ------- Georgia $17,826 $ 5,828 $ 63,281 $ 5,828 $ 8,683 $29,802 Alabama 6,821 2,247 18,862 2,247 3,391 8,057 Tennessee 6,713 2,300 24,145 2,300 3,443 13,115 Ohio 3,339 650 10,076 650 963 3,013 Texas 2,405 -- 4,566 -- -- -- Mississippi 1,246 371 4,151 371 567 2,083 Missouri 1,239 309 3,918 309 469 1,620 Florida 998 -- 1,185 -- -- -- Indiana 939 23 2,030 23 25 26 Illinois 66 -- 112 -- -- -- Pennsylvania 21 -- 21 -- -- -- ------- ------- -------- ------- ------- ------- Total net premiums earned $41,613 $11,728 $132,347 $11,728 $17,541 $57,716 ======= ======= ======== ======= ======= =======
(1) Actual results reflect USAuto's insurance operations since the date of acquisition (April 30, 2004). (2) Pro forma results give effect to the USAuto acquisition as if it had been consummated on July 1, 2003. 7 FIRST ACCEPTANCE CORPORATION AND SUBSIDIARIES SUPPLEMENTAL DATA (CONTINUED) (UNAUDITED)
GAAP COMBINED RATIOS (INSURANCE COMPANIES) Actual Pro forma(2) ---------------------------------------- ----------------------- Three Months Three Months Ended Year Ended Ended Year Ended June 30, June 30, June 30, June 30, ------------------- ----------------- ------------ ---------- 2005 2004(1) 2005 2004(1) 2004 2004 ---- ------- ---- ------- ---- ---- Loss and loss adjustment expense 68.8% 61.1% 66.1% 61.1% 54.4% 63.4% Expense(3) 22.0% 13.7% 17.7% 13.7% 14.0% 15.8% ---- ---- ---- ---- ---- ---- 90.8% 74.8% 83.8% 74.8% 68.4% 79.2% ==== ==== ==== ==== ==== ====
Three Months Ended Year Ended POLICIES IN FORCE June 30, June 30, ---------------------- ---------------------- Actual Pro forma Actual Pro forma 2005 2004 2005 2004 -------- --------- -------- --------- Insurance company subsidiaries: Policies in force - beginning of period 91,590 68,294 69,061 59,186 Net increase during period 8,552 767 31,081 9,875 -------- ------- -------- ------- Policies in force - end of period 100,142 69,061 100,142 69,061 -------- ------- -------- ------- MGA subsidiaries: Policies in force - beginning of period 30,773 24,775 22,324 27,828 Acquired 6,473 -- 6,473 -- Net decrease during period (17,966) (2,451) (9,517) (5,504) -------- ------- -------- ------- Policies in force - end of period 19,280 22,324 19,280 22,324 -------- ------- -------- ------- Total policies in force - end of period 119,422 91,385 119,422 91,385 ======== ======= ======== =======
- ------------------ (1) Actual results reflect USAuto's insurance operations since the date of acquisition (April 30, 2004). (2) Pro forma results give effect to the USAuto acquisition as if it had been consummated on July 1, 2003. (3) Insurance operating expenses are reduced by fee income from insureds and ceding commissions received from reinsurer as compensation for the costs incurred on servicing the business on their behalf. 8 FIRST ACCEPTANCE CORPORATION AND SUBSIDIARIES SUPPLEMENTAL DATA (CONTINUED) (UNAUDITED)
NUMBER OF RETAIL LOCATIONS Three Months Ended Year Ended June 30, June 30, ------------------------- ------------------------ Actual Pro forma(1) Actual Pro forma(1) 2005 2004 2005 2004 ------ ------------ ------ ------------ Retail locations - beginning of period 225 125 138 108 Opened 85 13 157 30 Acquired -- -- 15 -- Closed (1) -- (1) -- ---- --- ---- --- Retail locations - end of period 309 138 309 138 ==== === ==== ===
RETAIL LOCATIONS BY STATE Increase in Locations As of June 30, Year Ended June 30, ------------------------------------ --------------------- Actual Actual Pro forma(1) Actual Pro forma(1) 2005 2004 2003 2005 2004 ------ ------ ------------ ------ ------------ Alabama 25 21 19 4 2 Florida 24 -- -- 24 -- Georgia 63 55 52 8 3 Illinois 12 -- -- 12 -- Indiana 22 4 -- 18 4 Ohio 30 25 12 5 13 Mississippi 9 6 6 3 -- Missouri 18 11 5 7 6 Pennsylvania 14 -- -- 14 -- Tennessee 20 16 14 4 2 Texas 72 -- -- 72 -- --- --- --- --- --- Total 309 138 108 171 30 === === === === ===
- ---------------------- (1) Pro forma results give effect to the USAuto acquisition as if it had been consummated on July 1, 2003. -----END PRIVACY-ENHANCED MESSAGE-----