-----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, D3WNyygfeuv7k1PJZhIAV57vrB1dSkqrrJJRrLsXqGrcEsv3cvI3CzQgYMOKxfH2 vd9rv2CgR2bnrRzSVTVIvA== 0000950144-05-011385.txt : 20051109 0000950144-05-011385.hdr.sgml : 20051109 20051108185918 ACCESSION NUMBER: 0000950144-05-011385 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051108 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051109 DATE AS OF CHANGE: 20051108 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: 051187501 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 g98223e8vk.htm FIRST ACCEPTANCE CORPORATION FIRST ACCEPTANCE CORPORATION
Table of Contents

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): November 9, 2005 (November 8, 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

Table of Contents

Item 2.02. Results of Operations and Financial Condition.
     On November 8, 2005, First Acceptance Corporation issued a press release announcing its results of operations for the first quarter ended September 30, 2005 of its fiscal year ending June 30, 2006. The text of the release is set forth in Exhibit 99.
Item 7.01. Regulation FD Disclosure.
     On November 8, 2005, First Acceptance Corporation issued a press release announcing its results of operations for the first quarter ended September 30, 2005 of its fiscal year ending June 30, 2006. The text of the release is set forth in Exhibit 99.
Item 9.01. Financial Statements and Exhibits.
     (d) Exhibits
         
  99    
Press release dated November 8, 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/ Stephen J. Harrison    
    Stephen J. Harrison   
    President and Chief Executive Officer   
 
Date: November 8, 2005

 

Table of Contents

INDEX TO EXHIBITS
         
Exhibit No.   Description
  99    
Press release dated November 8, 2005

 

EX-99 2 g98223exv99.txt EX-99 PRESS RELEASE EXHIBIT 99 PRESS RELEASE Source: First Acceptance Corporation Contact: Steve Harrison (615) 844-2900 FIRST ACCEPTANCE CORPORATION REPORTS FIRST QUARTER FINANCIAL RESULTS NASHVILLE, TN, November 8, 2005 /PRNewswire-FirstCall/ -- First Acceptance Corporation (NYSE: FAC) today reported its financial results for the first quarter ended September 30, 2005 of its fiscal year ending June 30, 2006. Net income for the three months ended September 30, 2005 was $3.7 million, or $0.08 per share on a fully-diluted basis, compared to $3.9 million, or $0.08 per share on a fully-diluted basis, for the same period of fiscal 2005. Total weighted average diluted shares increased from 48.0 million to 49.5 million over the same period as a result of the effect of the issuance of 750,000 contingent shares in connection with the USAuto acquisition and the increase in the dilutive effect of stock options, primarily as a result of the increase in the Company's average stock price. There were no gains on sales of foreclosed real estate in either the three months ended September 30, 2005 or 2004. INSURANCE OPERATIONS o KEY RATIOS - The Company's loss ratio for the three months ended September 30, 2005 was 66.6%, compared with 61.9% for the same period last year and 68.8% for the quarter ended June 30, 2005. The Company's expense ratio for the three months ended September 30, 2005 was 20.6%, compared with 13.6% for the same period last year and 22.0% for the quarter ended June 30, 2005. As a result, the Company's combined ratio for the three months ended September 30, 2005 was 87.2%, compared with 75.5% for the same period last year and 90.8% for the quarter ended June 30, 2005. Expected losses from Hurricane Katrina during the current quarter amounted to approximately $300,000 and resulted in a 0.7% point increase in the loss ratio. The expense ratio for the three months ended September 30, 2005 increased primarily as a result of costs incurred in adding and developing new retail locations. o OFFICE EXPANSION - During the three months ended September 30, 2005, the Company added 39 additional offices, compared to 16 offices added during the three months ended September 30, 2004 and 84 offices added during the three months ended June 30, 2005. The total number of stores increased from 154 as of September 30, 2004 and 309 as of June 30, 2005 to 348 as of September 30, 2005. The Company now leases offices in 12 states, including offices in South Carolina where the Company commenced operations in October 2005. o PREMIUM GROWTH - Total gross premiums earned (before the effects of reinsurance) increased 27% to $42.8 million for the three months ended September 30, 2005 from $33.6 million for the same period last year. The number of insured policies in force serviced by the Company at September 30, 2005 increased 35% over the number of policies in force at September 30, 2004. Net premiums earned increased 97% over this same period as a result of the aforementioned increase in gross premiums earned, the non-renewal of our 50% quota share reinsurance on September 1, 2004 and the increase in the assumed reinsurance percentage for business written in Alabama from 50% to 100% on February 1, 2005. REAL ESTATE OPERATIONS There was no real estate sales activity during the most recent quarter. However, on October 31, 2005, the Company sold a parcel of foreclosed real estate for net proceeds of $872,000 that resulted in a gain of $796,000. After giving effect to this sale, the Company has five parcels of land remaining to be sold in the San Antonio area, which have a book value of $885,000. CASH AND INVESTED ASSETS During the three months ended September 30, 2005, the Company contributed $750,000 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 September 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 November 1, 2005, the Company leased 356 retail offices in 12 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 federal securities laws, 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. 2 FIRST ACCEPTANCE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME ($000S EXCEPT PER SHARE DATA) (UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, -------------------- 2005 2004 ------- ------- REVENUES: Premiums earned $42,754 $21,685 Commissions and fees 6,405 6,672 Ceding commissions from reinsurer -- 1,937 Investment income 1,099 609 ------- ------- Total revenues 50,258 30,903 ------- ------- EXPENSES: Losses and loss adjustment expenses 28,491 13,430 Insurance operating expenses 15,223 10,406 Other operating expenses 613 369 Stock-based compensation 84 61 Depreciation and amortization 214 669 Interest expense -- 70 ------- ------- Total expenses 44,625 25,005 ------- ------- Income before income taxes 5,633 5,898 Income tax expense 1,920 2,034 ------- ------- Net income $ 3,713 $ 3,864 ======= ======= Basic net income per share $ 0.08 $ 0.08 Diluted net income per share $ 0.08 $ 0.08 Weighted average basic shares 47,455 46,659 Weighted average diluted shares 49,465 48,041
3 FIRST ACCEPTANCE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS - BY BUSINESS SEGMENT ($000S EXCEPT PER SHARE DATA) (UNAUDITED)
THREE MONTHS ENDED INSURANCE OPERATIONS SEPTEMBER 30, -------------------- 2005 2004 ------- ------- REVENUES: Premiums earned $42,754 $21,685 Commissions and fees 6,405 6,672 Ceding commissions from reinsurer -- 1,937 Investment income 887 355 ------- ------- Total revenues 50,046 30,649 ------- ------- EXPENSES: Losses and loss adjustment expenses 28,491 13,430 Operating expenses 15,223 10,406 Depreciation and amortization 214 669 ------- ------- Total expenses 43,928 24,505 ------- ------- Income before income taxes $ 6,118 $ 6,144 ======= =======
THREE MONTHS ENDED REAL ESTATE AND CORPORATE(1) SEPTEMBER 30, -------------------- 2005 2004 ------- ------- REVENUES: Investment income $ 212 $ 254 ------- ------- Total revenues 212 254 ------- ------- EXPENSES: Operating expenses 613 369 Stock-based compensation 84 61 Interest expense -- 70 ------- ------- Total expenses 697 500 ------- ------- Loss before income taxes $ (485) $ (246) ======= =======
- --------------------- (1) Includes activities related to disposing of foreclosed real estate held for sale, interest expense associated with debt, and general corporate overhead. 4 FIRST ACCEPTANCE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ($000S EXCEPT PER SHARE DATA) (UNAUDITED)
SEPTEMBER 30, JUNE 30, 2005 2005 ------------ -------- ASSETS Fixed maturities, available-for-sale, at market value $ 86,234 $ 74,840 Investment in mutual fund, at market value 11,139 10,920 Cash and cash equivalents 21,192 24,762 Premiums and fees receivable 45,851 42,908 Reinsurance recoverables 3,456 4,490 Deferred tax asset 46,820 48,106 Other assets 11,576 11,031 Foreclosed real estate held for sale 961 961 Goodwill and identifiable intangible assets 112,668 112,704 -------- -------- TOTAL $339,897 $330,722 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Total policy liabilities 97,788 90,649 Other liabilities 10,807 11,744 -------- -------- Total liabilities 108,595 102,393 Total stockholders' equity 231,302 228,329 -------- -------- TOTAL $339,897 $330,722 ======== ======== Book value per share $ 4.87 $ 4.81
5 FIRST ACCEPTANCE CORPORATION AND SUBSIDIARIES SUPPLEMENTAL DATA ($000S EXCEPT PER SHARE DATA) (UNAUDITED) GROSS PREMIUMS EARNED BY STATE
THREE MONTHS ENDED SEPTEMBER 30, ------------------------ 2005 2004 -------- -------- Gross premiums earned: Georgia $ 17,316 $ 16,905 Alabama 6,930 6,309 Tennessee 6,331 6,401 Ohio 3,300 2,017 Florida 2,589 -- Texas 2,459 -- Missouri 1,234 890 Mississippi 1,211 961 Indiana 1,161 134 Pennsylvania 125 -- Illinois 122 -- -------- -------- Total gross premiums earned 42,778 33,617 Premiums ceded (24) (8,340) Premiums not assumed -- (3,592) -------- -------- Total net premiums earned $ 42,754 $ 21,685 ======== ========
GAAP COMBINED RATIOS (INSURANCE COMPANIES)
THREE MONTHS ENDED SEPTEMBER 30, ------------------ 2005 2004 ---- ---- Loss and loss adjustment expense 66.6% 61.9% Expense(1) 20.6% 13.6% ---- ---- 87.2% 75.5% ==== ====
(1) Insurance operating expenses are reduced by fee income from insureds and ceding commissions received from our quota-share reinsurer as compensation for the costs incurred in servicing the business on their behalf. POLICIES IN FORCE
THREE MONTHS ENDED SEPTEMBER 30, -------------------- 2005 2004 ------- ------ Policies in force - beginning of period 119,422 91,385 Net increase during period 6,377 1,500 ------- ------ Policies in force - end of period 125,799 92,885 ======= ======
6 FIRST ACCEPTANCE CORPORATION AND SUBSIDIARIES SUPPLEMENTAL DATA (CONTINUED) (UNAUDITED) NUMBER OF RETAIL LOCATIONS
THREE MONTHS ENDED SEPTEMBER 30, ----------------- 2005 2004 ---- ---- Retail locations - beginning of period 309 138 Opened 40 17 Closed (1) (1) ---- ---- Retail locations - end of period 348 154 ==== ====
RETAIL LOCATIONS BY STATE
CHANGE IN LOCATIONS DURING THE THREE MONTHS ENDED AS OF SEPTEMBER 30, AS OF JUNE 30, SEPTEMBER 30, ------------------- ----------------- ---------------------- 2005 2004 2005 2004 2005 2004 ---- ---- ---- ---- ---- ---- Alabama 25 23 25 21 -- 2 Florida 36 1 24 -- 12 1 Georgia 63 57 63 55 -- 2 Illinois 15 -- 12 -- 3 -- Indiana 25 8 22 4 3 4 Mississippi 8 8 9 6 (1) 2 Missouri 21 11 18 11 3 -- Ohio 30 28 30 25 -- 3 Pennsylvania 17 -- 14 -- 3 -- Tennessee 20 18 20 16 -- 2 Texas 88 -- 72 -- 16 -- --- --- --- --- --- -- Total 348 154 309 138 39 16 === === === === === ==
7 -----END PRIVACY-ENHANCED MESSAGE-----