-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, sPA3sJAARrQbePnE4WBQaUVi6FVs/ghQq9TAcWz6A2fR7u/MtDULr47ORG23CFZS 9nzoVxaDbsOldvcDCpV1Sw== 0000950144-95-001442.txt : 19950530 0000950144-95-001442.hdr.sgml : 19950530 ACCESSION NUMBER: 0000950144-95-001442 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950516 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MOBILE AMERICA CORP CENTRAL INDEX KEY: 0000067199 STANDARD INDUSTRIAL CLASSIFICATION: 6331 IRS NUMBER: 591218935 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-06764 FILM NUMBER: 95540305 BUSINESS ADDRESS: STREET 1: P O BOX 10729 CITY: JACKSONVILLE STATE: FL ZIP: 32247-0729 BUSINESS PHONE: 9043636339 MAIL ADDRESS: STREET 1: P O BOX 10729 CITY: JACKSONVILLE STATE: FL ZIP: 32247-0729 10-Q 1 MOBILE AMERICA FORM 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended March 31, 1995 Commission File No. 0-6764 -------------------- MOBILE AMERICA CORPORATION - - - - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Florida 59-1218935 - - - - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 100 Fortune Parkway, Jacksonville, Florida 32256 - - - - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (904) 363-6339 ----------------------------- N/A - - - - -------------------------------------------------------------------------------- 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 . ----- ----- (APPLICABLE ONLY TO CORPORATE ISSUERS) There were 6,264,040 shares of common stock, par value $.025 per share, outstanding as of the close of business on May 10, 1995. 2 PART I MOBILE AMERICA CORPORATION INDEX
Financial Statements: Page Part I ------ Consolidated Balance Sheet 1 Consolidated Statement of Operations 2 Consolidated Statements of Cash Flows 3 Consolidated Statement of Changes in Stockholders' Equity 4 Notes to Financial Statements 5-8 Management's Discussion and Analysis of the Consolidated Statements of Income 9 Exhibit 11 - Computations of Earnings Per Share 10 Part II ------- Other Information, and Signatures 11
3 MOBILE AMERICA CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET MARCH 31, 1995 AND DECEMBER 31, 1994
ASSETS 1995 1994 ------ ---- ---- Investments: Fixed maturities held to maturity $ 71,712,310 $ 70,287,568 at amortized cost (fair value $71,653,425 and $69,817,915) Equity Securities, at market 2,108,366 1,929,557 (cost $2,171,597 and $2,087,656) Notes receivable less unearned 4,109 5,012 discount of $312 and $379 Short-term investments 15,853,463 14,369,810 ------------ ------------ Total investments 89,678,248 86,591,947 ------------ ------------ Cash 5,317,030 5,479,899 Receivables: Insurance premiums 1,223,631 712,658 Accrued investment income and other 1,513,754 1,460,572 Reinsurance 24,470,265 24,832,401 ------------ ------------ Total receivables 27,207,650 27,005,631 ------------ ------------ Income taxes: Currently receivable -- 178,413 Deferred 816,398 607,398 ------------ ------------ Total income taxes 816,398 785,811 ------------ ------------ Prepaid reinsurance premiums 21,631,039 22,412,328 Inventory of mobile homes 39,545 39,545 Deferred policy acquisition costs (3,993,696) (3,774,978) Property and Equipment: Land, at cost 356,970 356,970 Modular office equipment, at cost less accumulated depreciation of $315,157 and $320,470 12,221 12,883 Equipment and leasehold improvements at cost less accumulated depreciation and amortization of $1,766,247 and $1,725,426 821,015 727,104 ------------ ------------ Total property and equipment: 1,190,206 1,096,957 ------------ ------------ Prepaid expenses and other assets 352 100,693 Equity in Pools and Associations 4,077,462 4,077,462 ------------ ------------ $145,964,234 $143,815,295 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1994 - - - - ------------------------------------ ---- ---- Insurance loss reserves, including future policy benefits $ 41,777,875 $ 43,950,469 Unearned premiums 33,745,825 34,639,680 Reinsurance funds held and balances payable 27,993,969 29,061,872 Accrued expenses and other liabilities 15,014,311 9,351,078 Income taxes payable 256,950 -- Unearned service fees 1,283,841 1,197,905 ------------ ------------ Total liabilities $120,072,771 $118,201,004 ------------ ------------ Stockholders' equity: Common stock, $.025 par value per share Authorized - 18,000,000 shares Issued 6,720,396 shares 168,010 168,010 Preferred stock, $.10 par value per share Authorized - 500,000 shares Issued and outstanding - none -- -- Capital in excess of par value 2,686,060 2,686,060 Net unrealized losses on equity securities (63,231) (158,099) Treasury Stock at Cost, 456,356 and 456,356 shares (388,441) (388,441) Retained Earnings 23,489,065 23,306,761 ------------ ------------ Total stockholders' equity 25,891,463 25,614,291 ------------ ------------ $145,964,234 $143,815,295 ============ ============
See notes to consolidated financial statements -1- 4 MOBILE AMERICA CORPORATION AND SUBSIDIARIES UNAUDITED STATEMENT OF OPERATIONS QUARTERS ENDED MARCH 31, 1995 AND 1994
1995 1994 ---- ---- Revenues: Insurance premiums earned (net of premiums ceded of $13,970,523 and $11,386,035) $ 7,209,877 $ 9,045,937 Investment income 1,224,635 1,119,115 Equipment rentals 21,359 24,768 Service fees earned 876,527 99,849 Other -- 1,707 Sales of modular office equipment 4,600 10,806 Net realized gains on investments 35,254 509,824 ------------- ------------- Total revenues 9,372,252 10,812,006 ------------- ------------- Expenses: Losses and loss adjustment expenses (net of reinsurance recoveries of $9,672,257 and $7,320,157) 5,852,417 6,163,734 Policy acquisition costs (521,036) 41,442 Salaries and wages 1,359,120 1,238,590 General and administrative 1,161,521 1,092,048 Cost of sales of modular office equipment 44 284 ------------- ------------- Total expenses 7,852,066 8,536,098 ------------- ------------- Income before provision for income taxes 1,520,186 2,275,908 Provision for income taxes: Current 600,659 700,050 Deferred (209,000) (31,000) ------------- ------------- Total provision for income taxes 391,659 669,050 ------------- ------------- Net income $ 1,128,527 $ 1,606,858 ============= ============= Earnings per share: Net income $ .18 $ .26 ============= ============= Weighted average number of common stock and common stock equivalents 6,264,040 6,269,040 ============= =============
See accompanying notes to financial statements. -2- 5 MOBILE AMERICA CORPORATION AND SUBSIDIARIES UNAUDITED STATEMENTS OF CASH FLOWS QUARTERS ENDED MARCH 31, 1995 AND 1994
1995 1994 ---- ---- Cash Flows from Operating Activities: Net Income $ 1,128,527 $ 1,606,858 Adjustments to reconcile net income to net cash provided by operating activities: Provisions for depreciation 54,783 75,227 (Gain) loss on sale of investments (35,254) (509,824) (Increase) decrease in insurance premiums receivable (510,973) 176,047 (Increase) in accrued investment income and other (53,182) (282,029) (Increase) decrease in deferred policy acquisition costs 218,718 (464,158) (Increase) decrease in prepaid expenses and other assets 100,341 1,006 Increase (decrease) in insurance loss reserves (2,172,594) (5,606,037) Increase (decrease) in unearned premiums (893,855) (5,071,026) Increase (decrease) in reinsurance funds held and balances payable (1,067,903) (4,454,222) Increase (decrease) in accrued expenses and other liabilities 5,663,233 4,677,639 Increase (decrease) in current income taxes 435,363 1,686,157 Increase (decrease) in deferred income taxes (209,000) (31,000) (Increase) decrease in reinsurance premiums receivable 362,136 3,725,285 (Increase) decrease in prepaid reinsurance premiums 781,289 3,342,329 Increase in unearned service fees 85,936 -- ------------ ------------ Net cash provided by operating activities 3,887,565 (1,127,748) ------------ ------------ Cash Flows from Investing Activities: Net change in short term investments (1,483,653) 2,689,381 Purchase of equity securities (660,845) (365,476) Sale of equity securities 605,675 848,358 Purchase of modular offices, equipment and leasehold improvements 148,032 10,075 Purchase of fixed maturities (5,738,229) (8,479,096) Sales of fixed maturities 4,023,906 6,786,291 Notes receivable 903 551 ------------ ------------ Net cash used in investing activities (3,104,211) 1,490,084 ------------ ------------ Cash Flows from Financing Activities: Dividends paid to shareholders (946,223) (1,304,142) ------------ ------------ Net cash used in financing activities (946,223) (1,304,142) ------------ ------------ Net increase (decrease) in cash (162,869) (941,806) Cash, beginning year 5,479,899 4,662,848 ------------ ------------ Cash, end of period $ 5,317,030 $ 3,721,042 ============ ============
See notes to consolidated financial statements. -3- 6 MOBILE AMERICA CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY QUARTERS ENDED MARCH 31, 1995 AND 1994
1995 1994 ------------ ------------ Common Stock: No change during period $ 168,010 $ 168,010 ------------ ------------ Preferred Stock: No change during period -- -- ------------ ------------ Capital in excess of par value: No change during period 2,686,060 2,686,060 ------------ ------------ Net unrealized investment (losses) gains (63,231) 118,404 Deferred taxes on unrealized gains -- (40,000) ------------ ------------ Balance at end of period (63,231) 78,404 ------------ ------------ Treasury Stock (388,441) (336,566) ------------ ------------ Retained earnings: Balance at beginning of period 23,306,761 20,562,457 Net income 1,128,527 1,606,858 Cash Dividends $.18 and $.21 per share (946,223) (1,304,142) ------------ ------------ Balance at end of period 23,489,065 20,865,173 ------------ ------------ Total stockholders' equity at end of period $ 25,891,463 $ 23,461,081 ============ ============
See accompanying notes to financial statements. -4- 7 MOBILE AMERICA CORPORATION NOTES TO FINANCIAL STATEMENTS QUARTERS ENDED MARCH 31, 1995 AND 1994 Note 1 In the opinion of the Registrant, the accompanying unaudited, consolidated, condensed financial statements contain all adjustments (consisting of only normal occurring accruals) necessary to present fairly its financial position as of March 31, 1995, and the results of its operations and statement of cash flow for the three months ended March 31, 1995. Note 2 The results of operations for the three months ended March 31, 1995 are not necessarily indicative of the results to be expected for the full year. Note 3 - Summary of Significant Accounting Policies (a) Basis of Financial Statement Presentation The consolidated financial statements have been prepared on the basis of generally accepted accounting principles which vary from statutory reporting practices prescribed or permitted for insurance companies by regulatory authorities. (b) Principles of Consolidation The accompanying consolidated financial statements include Mobile America Corporation (the Company) and its subsidiaries, all of which are wholly-owned. All significant intercompany transactions have been eliminated in consolidation. (c) Basis of Inventory Valuation Inventories are valued at the lower of cost or market, with cost being determined primarily under the specific identification method. -5- 8 (d) Investments The portfolio of marketable equity securities available for sale is carried at fair value. Fixed maturity investments are all classified as held to maturity and are recorded at amortized cost. The cost of securities sold is based upon the specific identification method and any gains or losses are reflected in earnings. (e) Deferred Policy Acquisition Costs The costs associated with acquiring new insurance contracts have been deferred. Such costs are being amortized over the premium paying period or in proportion to premiums earned on those contracts. (f) Depreciation and Amortization Depreciation and amortization of properties, equipment and leasehold improvements are calculated principally under the straight-line method based on the estimated useful life of the asset for financial reporting purposes. Maintenance and repairs are charged to expenses as incurred; additions and major betterments are capitalized and depreciated. At the time of retirement or other disposition of property, equipment or leasehold improvements, the accounts are relieved of the cost and the related accumulated depreciation and any gains or losses are reflected in income. (g) Insurance Contracts The insurance contracts accounted for in these financial statements include both short-duration contracts and long-duration contracts. Short-duration contracts provide insurance protection for a fixed period of short duration and enable the insurer to cancel the contract or to adjust the provisions at the end of any contract period. Most property-liability insurance contracts and certain term life insurance contracts, -6- 9 such as credit life insurance, are short-duration contracts. Long-duration contracts generally are not subject to unilateral changes in their provisions and require the performance of various functions and services, including insurance protection, for an extended period. Long-duration contracts include whole-life contracts and guaranteed renewable term life contracts. Accident and health insurance contracts may be short-duration or long-duration depending on whether the contracts are expected to remain in force for an extended period. The Company has not issued any participating policies. (h) Insurance Loss Reserves The liability for future policy benefits of long-duration contracts has been provided for on a net level premium method based on estimated investment yields, withdrawals, mortality, terminations, morbidity, and other assumptions which were appropriate at the time the contracts were issued. Such estimates were based on past experience as adjusted to provide for possible adverse deviation from the estimates. Interest assumptions are based on historical assumptions and experience, and range from 3% to 4.5% at March 31, 1995. The liabilities for unpaid claims of short-duration contracts and related adjustment expenses are determined using case basis evaluations and statistical analysis and represent estimates of the ultimate net cost of all reported and unreported claims relating to insured events which are unpaid at year-end. The liabilities include estimates of future trends in claims severity and frequency and other factors which could vary as the claims are ultimately settled. Although such estimates may vary, management believes that the liabilities for unpaid claims and related adjustment expenses are adequate. The estimates are continually reviewed, and as adjustments to these liabilities become necessary, they are reflected in current operations. -7- 10 (i) Recognition of Premium Revenues and Costs Premiums for long-duration contracts are recognized as revenues when due from the policyholders. A liability for the expected costs relating to such long-duration contracts is accrued over the current and expected renewal periods. Premiums for short-duration contracts are recognized as revenues over the period of the contract in proportion to the amount and duration of insurance protection provided. (j) Commitments and Contingencies The Internal Revenue Service is currently examining the Company's 1992 federal income tax return. To date, no final examination adjustments have been proposed by the IRS. A preliminary adjustment is being evaluated for which management and independent tax counsel believe the Company has a justified position with respect to its original filing. Accordingly, no accrual has been recorded for this preliminary adjustment. -8- 11 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Total consolidated revenues decreased by 13% to $9,372,252 in the first quarter of 1995 from $10,812,006 for the first quarter of 1994. Insurance premiums earned decreased by 20% from the first quarter of 1994 due to a higher cession of direct earned premium to reinsurers. Direct premium earned grew in the first quarter of 1995 to $21,180,400 from $20,431,972 in the first quarter of 1994. This 3.7% increase resulted from rate increases on private passenger automobile lines offsetting reduced earned premium on personal property lines. Investment income rose by 9% in the first quarter of 1995 compared with the first quarter of 1994, while net realized gains on the sale of investments decreased to $35,254 from $509,824 in the first quarter of 1994. The growth in investment income is due to both a higher level of invested funds in 1995 as well as higher yields available for the investment portfolio. Service fees earned grew to $876,527 in the first quarter of 1995 from $99,849 in the first quarter of 1994 due to a strong volume of policies administered for the state of Florida's joint underwriting associations as well as growth of the company's premium finance business unit. Consolidated expenses decreased by 8% to $7,852,066 from $8,536,098 in the first quarter of 1994. This drop is due to a higher percentage cession of private passenger automobile insurance resulting in both lower net losses and loss adjustment expenses as well as higher commissions received from reinsurers in return for the cession of premium to them. Reinsurance commissions earned exceeded commissions paid to writing agents in the first quarter of 1995, resulting in a negative policy acquisition costs result of $521,035 for the quarter. Cash dividends and any capital expenditure requirements continue to be provided by funds generated from operations. The company continues to exhibit strong liquidity. The company's investment policy continues to emphasize high quality securities matched closely with the company's short liability duration. -9- 12 Part II OTHER INFORMATION Item 6 - Exhibits and Reports on Form 8-K (a) Exhibits: 11. Unaudited computations of earnings per share. 27. Financial Data Schedule (for SEC use only) (b) Reports on Form 8K No reports on Form 8K were filed for the quarter ended March 31, 1995. SIGNATURES Pursuant to the requirements of the Securities Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MOBILE AMERICA CORPORATION -------------------------- Registrant May 11, 1995 By/s/ Joseph M. Bost - - - - ------------ -------------------------- Date Joseph M. Bost Chief Financial Officer By/s/ Thomas L. Stinson -------------------------- Thomas L. Stinson Vice President Financial Reporting -11- EX-11 2 COMPUTATION OF EARNINGS 1 EXHIBIT 11 MOBILE AMERICA CORPORATION AND SUBSIDIARIES UNAUDITED COMPUTATIONS OF EARNINGS PER SHARE QUARTERS ENDED MARCH 31, 1995 AND 1994
1995 1994 ------------ ------------ Net Income $ 1,128,527 $ 1,606,858 ============ ============ Common shares outstanding 6,264,040 6,269,040 Effect of weighting treasury stock acquired - - ------------ ------------ Common and common equivalent shares used in computing earnings per share 6,264,040 6,269,040 ============ ============ Earnings per share $ .18 $ .26 ============ ============
-10- EX-27 3 FINANCIAL DATA SCHEDULE
7 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF MOBILE AMERICA CORPORATION FOR THE THREE MONTHS ENDED MARCH 31, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 0 71,712,310 71,653,425 2,108,366 0 356,970 89,678,248 5,317,030 0 (3,993,696) 145,964,234 41,777,875 33,745,825 0 0 0 168,010 0 0 0 145,964,234 7,209,877 1,224,635 35,254 0 5,852,417 1,999,649 0 1,520,186 391,659 1,128,527 0 0 0 1,128,527 .18 .18 19,103,286 5,123,618 (707,267) 828,410 6,380,372 17,139,265 0
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