EX-99.1 2 v048819_ex99-1.htm Unassociated Document

FOR IMMEDIATE RELEASE
CONTACT:
Edward J. Lawson, CEO, President and Chairman, 21st Century Holding Company
(954) 308-1257 or (954) 581-9993

21st CENTURY HOLDING COMPANY REPORTS
2ND QUARTER RECORD RESULTS WITH EARNINGS OF $1.20 PER SHARE

Lauderdale Lakes, Florida, August 2, 2006 - 21st Century Holding Company (Nasdaq: TCHC), today reported record results for the quarter ended June 30, 2006 (see attached tables).

For the three months ended June 30, 2006, the Company reported net income of $8,904,559, or $1.20 per share on 7,427,765 undiluted shares, versus net income of $3,023,541 or $0.48 per share on 6,349,182 undiluted shares in the same three-month period last year beating Company guidance of $1.00 per share. On a diluted share basis, the Company reported earnings of $1.19 per share, based on 7,465,896 average diluted shares outstanding for the same three month period as compared to $0.46 per share based on 6,620,510 average diluted shares outstanding for the three months ended June 30, 2005.

For the six months ended June 30, 2006, the Company reported net income of $14,917,871, or $2.02 per share on 7,370,592 undiluted shares versus net income of $8,843,821 or $1.43 per share on 6,171,134 undiluted shares in the same six month period last year. On a diluted share basis, the Company reported earnings of $1.89 per share, based on 7,880,251 average diluted shares outstanding for the same six month period as compared to $1.35 per share based on 6,550,789 average diluted shares outstanding for the six months ended June 30, 2005.

Net premiums earned increased $6.9 million or 31.3% to $28.7 million for the three months ended June 30, 2006, as compared to $21.9 million for the same three-month period last year. Net premium earned increased $9.8 million or 24.1% to $50.5 million for the six months ended June 30, 2006, as compared to $40.7 million for the same six month period last year.

Total revenues increased $7.7 million or 31.2% to $32.3 million for the three months ended June 30, 2006, as compared to $24.6 million for the same three-month period last year. Total revenues increased $11.0 million or 23.5% to $57.5 million for the six months ended June 30, 2006, as compared to $46.5 million for the same six month period last year.

Edward J. (Ted) Lawson, Chairman, CEO, and President, said, “I am extremely pleased with our results for the second quarter. These record results reflect the continued, successful execution of our business plan. 21st Century has been able to generate revenues and profits from each of its lines of business written, while allowing us to effectively manage expenses and provide the highest level of customer and agent care. Barring any hurricanes hitting Florida, our outlook for the remainder of the year remains positive and we will update guidance as each quarter progresses.”

The Company will hold an investor conference call at 4:30 PM (ET) today, August 2, 2006. Mr. Lawson and Mr. J. Gordon Jennings III, CFO, will discuss the financial results and review the outlook for the Company. Messrs. Lawson and Jennings invite interested parties to participate in the conference call. Listeners can access the conference call by dialing toll free 888-460-6235, conference ID 3760248. Please call at least five minutes in advance to ensure that you are connected prior to the presentation. A replay of the conference call will be available for 7 days at 800-642-1687.
 

About the Company
The Company, through its subsidiaries, underwrites standard and non-standard personal automobile insurance, flood insurance, general liability insurance, mobile home insurance and homeowners’ property and casualty insurance in the State of Florida. The Company underwrites general liability coverage as an admitted carrier in the States of Louisiana, Texas and Alabama for more than 300 classes of business, including special events. The Company also operates as an approved (non-admitted) carrier in the States of Georgia, Kentucky, Virginia and South Carolina offering the same general liability products. In addition, the Company has underwriting authority and processes claims for third party insurance companies. In addition to insurance services, the Company offers premium finance services to its insureds as well as insureds of certain third party insurance companies.

Safe harbor statements under the Private Securities Litigation Reform Act of 1995: Statements in this press release that are not historical fact are forward-looking statements that are subject to certain risks and uncertainties that could cause actual events and results to differ materially from those discussed herein. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “would,” “estimate,” or “continue” or the other negative variations thereof or comparable terminology are intended to identify forward-looking statements. The risks and uncertainties include, without limitation, uncertainties related to estimates, assumptions and projections generally; inflation and other changes in economic conditions (including changes in interest rates and financial markets); pricing competition and other initiatives by competitors; ability to obtain regulatory approval for applications to underwrite in an additional jurisdiction or for requested rate changes, and the timing thereof; legislative and regulatory developments; the outcome of litigation pending against the Company and any settlement thereof; risks related to the nature of the Company’s business; dependence on investment income and the composition of the Company’s investment portfolio; the adequacy of the Company’s liability for loss and loss adjustment expense; insurance agents; claims experience; limited experience in the insurance industry; ratings by industry services; catastrophe losses; reliance on key personnel; weather conditions (including the severity and frequency of storms, hurricanes, tornadoes and hail); changes in driving patterns and loss trends; acts of war and terrorist activities; court decisions and trends in litigation, and health care and auto repair costs; and other matters described from time to time by the Company in releases and publications, and in periodic reports and other documents filed with the United States Securities and Exchange Commission. In addition, investors should be aware that generally accepted accounting principles prescribe when a company may reserve for particular risks, including litigation exposures. Accordingly, results for a given reporting period could be significantly affected if and when a reserve is established for a major contingency. Reported results may therefore appear to be volatile in certain accounting periods.
#####
 

21st CENTURY HOLDING COMPANY
Consolidated Statements of Operations
(Unaudited)

   
Three Months Ended June 30,
  
Six Months Ended June 30,
  
Revenue:
  
2006
  
2005
  
2006
  
2005
  
Gross premiums written
  
$
50,752,672
  
$
31,362,908
  
$
86,361,745
  
$
61,459,952
  
Gross premiums ceded
    
(3,371,781
)
  
(2,053,152
)
  
(3,371,781
)
  
(4,954,443
)
                           
Net premiums written
    
47,380,891
    
29,309,756
    
82,989,964
    
56,505,509
  
                           
Decrease in prepaid reinsurance premiums
    
(593,089
)
  
(2,835,083
)
  
(9,264,661
)
  
(5,510,378
)
(Increase) in unearned premiums
    
(18,047,162
)
  
(4,585,523
)
  
(23,177,223
)
  
(10,271,083
)
Net change in prepaid reinsurance premiums and unearned premiums
    
(18,640,251
)
  
(7,420,606
)
  
(32,441,884
)
  
(15,781,461
)
                           
Net premiums earned
    
28,740,640
    
21,889,150
    
50,548,080
    
40,724,048
  
Finance revenue
    
496,117
    
937,681
    
1,132,143
    
2,042,211
  
Managing general agent fees
    
723,020
    
620,378
    
1,380,988
    
1,252,693
  
Net investment income
    
1,612,014
    
910,925
    
2,808,279
    
1,803,796
  
Net realized investment gains
    
283,341
    
125,510
    
479,552
    
285,033
  
Other income
    
486,962
    
161,913
    
1,107,761
    
404,381
  
                           
Total revenue
    
32,342,094
    
24,645,557
    
57,456,803
    
46,512,162
  
                           
Expenses:
                          
Loss and loss adjustment expenses
    
9,343,158
    
12,308,775
    
16,912,001
    
19,218,772
  
Operating and underwriting expenses
    
2,308,331
    
2,206,281
    
4,612,576
    
3,788,812
  
Salaries and wages
    
1,772,511
    
1,580,120
    
3,610,472
    
3,158,701
  
Interest expense
    
181,403
    
379,787
    
410,287
    
809,931
  
Policy acquisition costs, net of amortization
    
4,126,985
    
3,222,441
    
8,045,037
    
7,048,042
  
                           
Total expenses
    
17,732,388
    
19,697,404
    
33,590,373
    
34,024,258
  
                           
Income from cont’d ops before provision for inc tax exp
    
14,609,706
    
4,948,153
    
23,866,430
    
12,487,904
  
Provision for income tax expense
    
5,705,147
    
1,924,612
    
8,948,559
    
4,678,687
  
Net income from continuing operations
    
8,904,559
    
3,023,541
    
14,917,871
    
7,809,217
  
Discontinued operations:
                          
Income from discontinued operations
(including gain on disposal of $0 and $1,630,000,  respectively)
    
--
    
--
    
--
    
1,630,000
  
Provision for income tax expense 
    
--
   
--
   
--
   
595,396
 
Income from discontinued operations
    
--
    
--
   
--
   
1,034,604
 
Net income
  
$
8,904,559
 
$
3,023,541
 
$
14,917,871
 
$
8,843,821
 
Basic net income per share from continuing operations
 
$
1.20
 
$
0.48
 
$
2.02
 
$
1.27
 
Basic net income per share from discontinued operations
  
$
--
 
$
--
 
$
--
 
$
0.16
 
Basic net income per share
  
$
1.20
 
$
0.48
 
$
2.02
 
$
1.43
 
Fully diluted net income per share from continuing operations
 
$
1.19
 
$
0.46
 
$
1.89
 
$
1.19
 
Fully diluted net income per share from discontinued operations
  
$
--
 
$
--
 
$
--
 
$
0.16
 
Fully diluted net income per share
  
$
1.19
 
$
0.46
 
$
1.89
 
$
1.35
 
                           
Weighted average number of common shares outstanding
    
7,427,765
    
6,349,182
   
7,370,592,
   
6,171,134
 
                           
Weighted average number of common shares outstanding (assuming dilution)
    
7,465,896
   
6,620,510
   
7,880,251,
   
6,550,789
 
                           
Dividends declared per share
  
$
0.12
 
$
0.08
 
$
0.24
 
$
0.16
 
 
 
 
 
 

21st CENTURY HOLDING COMPANY
Other Selected Data
(Unaudited)


Balance Sheet

   
Period Ending
  
   
06/30/06
  
12/31/05
  
Total Cash & Investments
  
$
143,715,315
  
$
106,157,869
  
Total Assets
  
$
216,919,555
  
$
290,154,753
  
Unpaid Loss and Loss Adjustment Expense
  
$
31,344,127
  
$
154,038,543
  
Total Liabilities
  
$
155,759,072
  
$
249,387,383
  
Total Shareholders’ Equity
  
$
61,160,483
  
$
40,767,370
  
Common Stock Outstanding
    
7,405,449
    
6,771,864
  
Book Value Per Share
  
$
8.26
  
$
6.02
  

Premium Breakout

   
6 Months Ending
  
Line of Business
  
06/30/06
  
06/30/05
  
Automobile
    
5.7
%
  
20.9
%
Homeowners’
    
75.2
%
  
60.3
%
General Liability
    
19.1
%
  
18.8
%
               
Gross Written Premiums
    
100.0
%
  
100.0
%


Loss Ratios

   
3 Months Ending
  
6 Months Ending
  
Line of Business
  
06/30/06
  
06/30/05
  
06/30/06
  
06/30/05
  
Automobile
    
97.19
%
  
71.91
%
  
82.55
%
  
61.92
%
Homeowners’
    
25.91
%
  
62.14
%
  
26.04
%
  
47.93
%
General Liability
    
13.10
%
  
20.79
%
  
17.60
%
  
23.04
%
All Lines
    
32.51
%
  
56.23
%
  
33.46
%
  
47.19
%