0001193125-14-287020.txt : 20140730 0001193125-14-287020.hdr.sgml : 20140730 20140730163802 ACCESSION NUMBER: 0001193125-14-287020 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20140730 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20140730 DATE AS OF CHANGE: 20140730 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERISAFE INC CENTRAL INDEX KEY: 0001018979 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 752069407 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12251 FILM NUMBER: 141003285 BUSINESS ADDRESS: STREET 1: 2301 HIGHWAY 190 WEST CITY: DERIDDER STATE: LA ZIP: 70634 BUSINESS PHONE: 337-463-9052 MAIL ADDRESS: STREET 1: 2301 HIGHWAY 190 WEST CITY: DERIDDER STATE: LA ZIP: 70634 8-K 1 d766441d8k.htm 8-K 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 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): July 30, 2014

 

 

AMERISAFE, INC.

(Exact Name of Registrant as Specified in Charter)

 

 

 

Texas   001-12251   75-2069407

(State or Other Jurisdiction

of Incorporation)

  

(Commission

File Number)

  

(IRS Employer

Identification No.)

2301 Highway 190 West

DeRidder, Louisiana 70634

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (337) 463-9052

 

 

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):

 

  ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

  ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 2.02. Results of Operations and Financial Condition.

On July 30, 2014, AMERISAFE, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2014. A copy of the Company’s press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

 

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit No.

   

Description

99.1    Press Release of AMERISAFE, Inc. dated July 30, 2014

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 hereunto duly authorized.

 

AMERISAFE, INC.
    By:    /s/ Michael Grasher
    Michael Grasher, Executive Vice
    President and Chief Financial Officer

Date: July 30, 2014

EX-99.1 2 d766441dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO   

NEWS RELEASE

 

  

        Contact:

    Michael Grasher, EVP & CFO
      AMERISAFE, Inc.
      337-463-9052
     
     
     
     
     
     

AMERISAFE ANNOUNCES 2014 SECOND QUARTER RESULTS

Net Income Rises 67.1%

DeRidder, LA – July 30, 2014—AMERISAFE, Inc. (Nasdaq: AMSF), a specialty provider of hazardous workers’ compensation insurance, today announced results for the second quarter ended June 30, 2014.

 

     Three Months Ended           Six Months Ended        
     June 30,           June 30,        
     2014     2013     % Change     2014     2013     % Change  
     (in thousands, except per share data)  

Net premiums earned

    $ 93,516      $ 81,983        14.1 %    $ 182,749      $ 161,692        13.0 % 

Net investment income

      6,845        6,649        2.9 %      13,553        13,319        1.8 % 

Net realized gains (losses) on investments (pre-tax)

      232        (1,291 )      NM        333        (1,267 )      NM   

Net income

      12,773        7,644        67.1 %      23,322        16,495        41.4 % 

Diluted earnings per share

    $ 0.68      $ 0.41        65.9 %    $ 1.23      $ 0.88        39.8 % 

Operating net income

      12,622        8,483        48.8 %      23,106        17,319        33.4 % 

Operating earnings per share

    $ 0.67      $ 0.45        48.9 %    $ 1.22      $ 0.93        31.2 % 

Book value per share

    $ 23.26      $ 21.29        9.3 %    $ 23.26      $ 21.29        9.3 % 

Net combined ratio

      89.4 %      93.8 %        91.0 %      94.2 %   

Return on average equity

      11.9 %      7.8 %        10.9 %      8.5 %   

Allen Bradley, AMERISAFE’s Chairman and Chief Executive Officer, commented, “The workers’ compensation market remains attractive in terms of pricing but lethargic in terms of exposure expansion in certain industries. We remain hopeful that employment in construction and other basic industries will accelerate in the remainder of the year.”

Insurance Results

 

     Three Months Ended           Six Months Ended        
     June 30,           June 30,        
     2014     2013     % Change     2014     2013     % Change  
     (in thousands)  

Gross premiums written

    $ 103,820      $ 95,815        8.4 %    $ 209,523      $ 194,938        7.5 % 

Net premiums earned

      93,516        81,983        14.1 %      182,749        161,692        13.0 % 

Loss and loss adjustment expenses incurred

      62,463        56,813        9.9 %      123,748        112,814        9.7 % 

Underwriting and certain other operating costs, commission and salaries and benefits

      21,012        19,663        6.9 %      42,383        38,540        10.0 % 

Policyholder dividends

      88        388        NM        201        942        NM   
  

 

 

    

 

 

      

 

 

    

 

 

    

Underwriting profit (pre-tax)

    $ 9,953      $ 5,119        94.4 %    $ 16,417      $ 9,396        74.7 % 

Insurance Ratios:

             

Current accident year loss ratio

      71.5 %      73.2 %        71.5 %      73.2 %   

Prior accident year loss ratio

      (4.7 %)      (3.9 %)        (3.8 %)      (3.4 %)   
  

 

 

    

 

 

      

 

 

    

 

 

    

Net loss ratio

      66.8 %      69.3 %        67.7 %      69.8 %   

Net underwriting expense ratio

      22.5 %      24.0 %        23.2 %      23.8 %   

Net dividend ratio

      0.1 %      0.5 %        0.1 %      0.6 %   
  

 

 

    

 

 

      

 

 

    

 

 

    

Net combined ratio

      89.4 %      93.8 %        91.0 %      94.2 %   
  

 

 

    

 

 

      

 

 

    

 

 

    

 

  •   Voluntary premium for policies written during the quarter increased by 8.2% compared to the prior year quarter.

 

  •   Gross premiums written in the quarter increased by $8.0 million due to a combination of the higher voluntary premium as well as positive payroll audits and related premium adjustments for policies written in previous periods. Payroll audits and related premium adjustments increased premiums written by $4.4 million in the second quarter of 2014.

 

  •   In the quarter, the Company experienced favorable loss development for prior accident years which reduced loss and loss adjustment expenses by $4.4 million, primarily attributable to accident years 2010 and prior. Our calendar year loss ratio was 66.8%, a 2.5 percentage point improvement from the second quarter of 2013, reflecting improved pricing and favorable frequency trends.

  •   For the quarter ended June 30, 2014, the underwriting expense ratio declined to 22.5%, 1.5 percentage points lower than the prior year, as compensation expenses drove controllable costs lower. Offsetting these benefits were higher insurance related assessments along with lower ceding commission and contingent profit commission accruals resulting from our 2014 reinsurance treaty.

 

  •   The effective tax rate for the three months ended June 30, 2014 was 25.1% compared to 28.2% for the second quarter of 2013.

G. Janelle Frost, President and Chief Operating Officer, noted, “Favorable pricing and frequency trends continued this quarter resulting in an 89.4% combined ratio. Favorable prior year loss development and controlled fixed costs as premium grew also benefitted the results this quarter. These benefits were a direct result of our emphasis on claims management and prudent cost administration which are fundamental to the Amerisafe business model.”

Investment Results

 

     Three Months Ended           Six Months Ended        
     June 30,           June 30,        
     2014     2013     % Change     2014     2013     % Change  
     (in thousands)  

Net investment income

    $ 6,845      $ 6,649        2.9 %    $ 13,553      $ 13,319        1.8 % 

Net realized gains (losses) on investments (pre-tax)

      232        (1,291 )      NM        333        (1,267 )      NM   

Pre-tax investment yield

      2.6 %      2.9 %        2.6 %      2.9 %   

Tax equivalent yield (1)

      3.7 %      4.2 %        3.7 %      4.2 %   

 

(1) The tax equivalent yield is calculated using the effective interest rate and a 35% marginal tax rate.

 

  •   As of June 30, 2014, the carrying and fair value of AMERISAFE’s investment portfolio, including cash and cash equivalents, was $1.1 billion.

Capital Management

During the quarter, the Company paid a regular quarterly cash dividend of $0.12 per share on June 26, 2014. On July 29, 2014, the Company’s Board of Directors declared a quarterly cash dividend of $0.12 per share, payable on September 26, 2014 to shareholders of record as of September 12, 2014.

During the quarter, no shares were repurchased under the share repurchase plan. A $25.0 million authorization remains in place. Since beginning the plan, the Company has repurchased a total of 1,258,250 shares for $22.4 million for an average per share price of $17.78, including commissions.

Supplemental Information

 

     Three Months Ended     Six Months Ended  
     June 30,     June 30,  
     2014     2013     2014     2013  
     (in thousands, except share and per share data)  

Net income

    $ 12,773      $ 7,644      $ 23,322      $ 16,495   

Less: Net realized capital gains (losses)

      232        (1,291 )      333        (1,267 ) 

Tax effect (1)

      (81 )      452        (117 )      443   
  

 

 

    

 

 

    

 

 

    

 

 

  

Operating net income (2)

      12,622        8,483        23,106        17,319   
  

 

 

    

 

 

    

 

 

    

 

 

  

Average shareholders’ equity (3)

      428,031        391,107        426,149        386,869   

Less: Average other comprehensive income (loss)

      453        404        (1,167 )      677   
  

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted average shareholders’ equity

      427,578        390,703        427,316        386,192   
  

 

 

    

 

 

    

 

 

    

 

 

  

Diluted weighted average common shares

      18,894,885        18,712,299        18,885,384        18,713,776   

Return on average equity (4)

      11.9 %      7.8 %      10.9 %      8.5 % 

Operating return on average equity (2)

      11.8 %      8.7 %      10.8 %      9.0 % 

Diluted earnings per common share

    $ 0.68      $ 0.41      $ 1.23      $ 0.88   

Operating earnings per common share (2)

    $ 0.67      $ 0.45      $ 1.22      $ 0.93   

 

(1) The tax effect of net realized capital gains is calculated assuming an annual tax rate of 35% plus the change in valuation allowance for deferred taxes.
(2) Operating net income, operating return on average adjusted equity and operating earnings per share are non-GAAP financial measures. Management believes that investors’ understanding of core operating performance is enhanced by AMERISAFE’s disclosure of these financial measures.
(3) Average shareholders’ equity is calculated by taking the average of the beginning and ending shareholders’ equity.
(4) Return on average equity is calculated by dividing the annualized net income by the average shareholders’ equity.

Conference Call Information

AMERISAFE has scheduled a conference call for July 31, 2014, at 10:30 a.m. Eastern Time to discuss the results for the quarter and the outlook for future periods. To participate in the conference call dial 720-545-0027 at least ten minutes before the call begins and ask for the AMERISAFE conference call. A replay of the call will be available approximately two hours after the live broadcast ends and will be accessible through August 7, 2014. To access the replay, dial 855-859-2056 or 404-537-3406 and use the pass code 76701223.

Investors, analysts and the general public will also have the opportunity to listen to the conference call over the Internet by visiting http://www.amerisafe.com. To listen to the live call on the web, please visit the website at least fifteen minutes before the call begins to register, download and install any necessary audio software. For those who cannot listen to the live webcast, an archive will be available shortly after the call and will remain available for approximately 60 days at http://www.amerisafe.com.

About AMERISAFE

AMERISAFE, Inc. is a specialty provider of workers’ compensation insurance focused on small to mid-sized employers engaged in hazardous industries, principally construction, trucking, manufacturing, oil and gas and agriculture. AMERISAFE actively markets workers’ compensation insurance in 30 states and the District of Columbia.

Forward Looking Statements

Statements made in this press release that are not historical facts, including statements accompanied by words such as “will,” “believe,” “anticipate,” “expect,” “estimate,” or similar words are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding AMERISAFE’s plans and performance. These statements are based on management’s estimates, assumptions and projections as of the date of this release and are not guarantees of future performance and include statements regarding management’s views and expectations of the workers’ compensation market, the Company’s growth opportunities, underwriting margins and actions by competitors. Actual results may differ materially from the results expressed or implied in these statements as the results of risks, uncertainties and other factors including the factors set forth in the Company’s filings with the Securities and Exchange Commission, including AMERISAFE’s Annual Report on Form 10-K for the year ended

December 31, 2013. AMERISAFE cautions you not to place undue reliance on the forward-looking statements contained in this release. AMERISAFE does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release.

- Tables to follow -

AMERISAFE, INC. AND SUBSIDIARIES

Consolidated Statements of Income

(in thousands)

 

     Three Months Ended     Six Months Ended  
     June 30,     June 30,  
     2014     2013     2014     2013  
     (unaudited)     (unaudited)  

Revenues:

         

Gross premiums written

    $ 103,820      $ 95,815      $ 209,523      $ 194,938   

Ceded premiums written

      (3,493 )      (4,576 )      (6,832 )      (9,057 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net premiums written

    $ 100,327      $ 91,239      $ 202,691      $ 185,881   
  

 

 

    

 

 

    

 

 

    

 

 

  

Net premiums earned

    $ 93,516      $ 81,983      $ 182,749      $ 161,692   

Net investment income

      6,845        6,649        13,553        13,319   

Net realized gains (losses) on investments

      232        (1,291 )      333        (1,267 ) 

Fee and other income

      31        170        162        279   
  

 

 

    

 

 

    

 

 

    

 

 

  

Total revenues

      100,624        87,511        196,797        174,023   
  

 

 

    

 

 

    

 

 

    

 

 

  

Expenses:

         

Loss and loss adjustment expenses incurred

      62,463        56,813        123,748        112,814   

Underwriting and other operating costs

      21,012        19,663        42,383        38,540   

Policyholder dividends

      88        388        201        942   
  

 

 

    

 

 

    

 

 

    

 

 

  

Total expenses

      83,563        76,864        166,332        152,296   
  

 

 

    

 

 

    

 

 

    

 

 

  

Income before taxes

      17,061        10,647        30,465        21,727   

Income tax expense

      4,288        3,003        7,143        5,232   
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income

    $ 12,773      $ 7,644      $ 23,322      $ 16,495   
  

 

 

    

 

 

    

 

 

    

 

 

  

AMERISAFE, INC. AND SUBSIDIARIES

Consolidated Statements of Income (cont.)

(in thousands, except per share amounts)

 

     Three Months Ended      Six Months Ended  
     June 30,      June 30,  
     2014      2013      2014      2013  
     (unaudited)      (unaudited)  

Basic EPS:

            

Net income

    $ 12,773       $ 7,644       $ 23,322       $ 16,495   
  

 

 

     

 

 

     

 

 

     

 

 

  

Basic weighted average common shares

      18,600,186         18,353,174         18,566,235         18,317,452   

Basic earnings per share

    $ 0.69       $ 0.42       $ 1.26       $ 0.90   

Diluted EPS:

            

Net income

      12,773         7,619         23,322         16,455   
  

 

 

     

 

 

     

 

 

     

 

 

  

Diluted weighted average common shares:

            

Weighted average common shares

      18,600,186         18,353,174         18,566,235         18,317,452   

Stock options and performance shares

      294,699         359,125         319,149         396,324   
  

 

 

     

 

 

     

 

 

     

 

 

  

Diluted weighted average common shares

      18,894,885         18,712,299         18,885,384         18,713,776   

Diluted earnings per common share

    $ 0.68       $ 0.41       $ 1.22       $ 0.88   

AMERISAFE, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands)

 

     June 30,      December 31,  
     2014      2013  
     (unaudited)         

Assets

      

Investments

    $ 964,636       $ 878,775   

Cash and cash equivalents

      98,818         123,077   

Amounts recoverable from reinsurers

      85,512         75,326   

Premiums receivable, net

      205,113         171,579   

Deferred income taxes

      33,542         33,645   

Deferred policy acquisition costs

      21,809         19,171   

Other assets

      30,287         27,428   
  

 

 

     

 

 

  
   $ 1,439,717       $ 1,329,001   
  

 

 

     

 

 

  

Liabilities and Shareholders’ Equity

      

Liabilities:

      

Reserves for loss and loss adjustment expenses

    $ 657,276       $ 614,557   

Unearned premiums

      184,238         164,296   

Insurance-related assessments

      32,137         25,428   

Other liabilities

      130,582         107,906   

Total shareholders’ equity

      435,484         416,814   
  

 

 

     

 

 

  

Total liabilities and shareholders’ equity

    $ 1,439,717       $ 1,329,001   
  

 

 

     

 

 

  

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