-----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, OchWhpWx61J10TfuSbBrgg8zdH4QE/f//q9MrdSTZnyk7UzAGYFAZbikCIZOqIqq fgcTnDk8DAuWMUn83CThFA== 0000950144-95-003220.txt : 19951121 0000950144-95-003220.hdr.sgml : 19951121 ACCESSION NUMBER: 0000950144-95-003220 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951114 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: 95592111 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 CORPORATION 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 September 30, 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 6,260,040 shares of common stock, par value $.025 per share, outstanding as of the close of business on November 9, 1995. 2 PART I MOBILE AMERICA CORPORATION INDEX Financial Statements: Page Part I ------ Consolidated Balance Sheets 1 Consolidated Statements of Operations 2 Consolidated Statements of Cash Flows 3 Consolidated Statements of Changes in Stockholders' Equity 4 Notes to Financial Statements 5-8 Management's Discussion and Analysis of Results of Operations and Financial Condition 9 Part II ------- Other Information, and Signatures 10 Exhibit 11 - Computations of Earnings Per Share 11
3 MOBILE AMERICA CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET September 30, 1995 AND DECEMBER 31, 1994
ASSETS 1995 1994 LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1994 - - ------ ---- ---- ------------------------------------ ---- ---- Investments: Fixed maturities held to maturity $ 72,226,037 $ 70,287,568 Insurance loss reserves, including at amortized cost (fair value future policy benefits $ 41,638,656 $ 43,950,469 $72,296,195 and $69,817,915) Unearned premiums 36,850,201 34,639,680 Equity Securities, at market 2,296,907 1,929,557 Reinsurance funds held and (cost $2,470,997 and $2,087,656) balances payable 27,509,970 29,061,872 Notes receivable less unearned 3,139 5,012 Accrued expenses and other liabilities 12,179,913 9,351,078 discount of $173 and $379 Income taxes payable 2,427,026 - Short-term investments 14,956,070 14,369,810 Unearned service fees 1,954,465 1,197,905 ------------ ------------ ------------ ------------ Total investments 89,482,153 86,591,947 Total liabilities $122,560,231 $118,201,004 ------------ ------------ ------------ ------------ Cash 5,970,167 5,479,899 Receivables: Stockholders' equity: Insurance premiums 4,389,622 712,658 Common stock, $.025 par value per share Accrued investment income and other 1,784,250 1,460,572 Authorized - 18,000,000 shares Reinsurance 25,355,767 24,832,401 Issued ------------ ------------ Total receivables 31,529,639 27,005,631 6,720,396 shares 168,010 168,010 ------------ ------------ Income taxes: Currently receivable - 178,413 Deferred 755,892 607,398 Preferred stock, $.10 par value per share ------------ ------------ Total income taxes 755,892 785,811 Authorized - 500,000 shares ------------ ------------ Issued and outstanding - none - - Prepaid reinsurance premiums 22,593,506 22,412,328 Inventory of mobile homes 39,545 39,545 Capital in excess of par value 2,686,060 2,686,060 Deferred policy acquisition costs (3,929,267) (3,774,978) Property and Equipment: Land, at cost 356,970 356,970 Modular office equipment, at cost less accumulated depreciation of $308,090 and $320,470 11,602 12,883 Net unrealized losses on equity securities (174,090) (158,099) Equipment and leasehold improvements at cost less accumulated depreciation and amortization of Treasury Stock at Cost, 460,356 and $1,821,280 and $1,725,426 783,963 727,104 456,356 shares (420,944) (388,441) ------------ ------------ Total property and equipment: 1,107,679 1,096,957 ------------ ------------ Retained Earnings 26,807,509 23,306,761 ------------ ------------ Prepaid expenses and other assets - 100,693 Equity in Pools and Associations 4,077,462 4,077,462 Total stockholders' equity 29,066,545 25,614,291 ------------ ------------ ------------ ------------ $151,626,776 $143,815,295 $151,626,776 $143,815,295 ============ ============ ============ ============
See notes to consolidated financial statements 4 MOBILE AMERICA CORPORATION AND SUBSIDIARIES UNAUDITED STATEMENTS OF OPERATIONS QUARTERS ENDED SEPTEMBER 30, 1995 AND 1994, NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
Nine Months Ended Quarters Ended September 30, September 30 , ----------------------------- ---------------------- 1995 1994 1995 1994 ---- ---- ---- ---- Revenues: Insurance premiums earned (net of premiums ceded of $13,188,504, $12,787,538 $42,065,677 and $35,969,468) $ 10,274,025 $ 7,562,217 $24,470,300 $26,559,807 Service fees earned 3,095,254 851,595 7,227,316 2,510,678 Investment income 1,381,763 773,674 3,946,719 2,939,563 Equipment rentals 20,965 19,462 60,503 61,393 Other 40,886 140,021 67,703 150,078 Sales of modular office equipment 2,650 8,334 11,250 38,143 Net realized gains (losses) on investments 93,803 (41,259) 198,356 781,837 ----------- ----------- ----------- ----------- Total revenues 14,909,346 9,314,044 $35,982,147 $33,041,499 ----------- ----------- ----------- ----------- Expenses: Losses and loss adjustment expenses (net of reinsurance recoveries of $11,286,936, $8,711,722, $31,196,110 and $25,639,981) 9,414,111 6,220,555 21,640,903 18,923,650 Policy acquisition costs 1,918,379 1,935,980 1,160,510 3,707,377 Salaries and wages 1,426,680 1,117,576 4,014,536 3,390,948 General and administrative 674,232 542,697 3,326,145 2,716,353 Cost of sales of modular office equipment - 6,000 44 7,596 ----------- ----------- --------- --------- Total expenses 13,433,402 9,822,808 30,142,138 28,745,924 ----------- ----------- ----------- ---------- Income (loss) before provision for income taxes 1,475,944 (508,764) 5,840,009 4,295,575 Provision for income taxes: Current 61,429 (913,482) 1,541,532 829,518 Deferred (114,494) 300,000 (148,494) 137,000 ----------- ----------- ----------- ----------- Total provision for income taxes (53,065) (613,482) 1,393,038 966,518 ----------- ----------- ----------- ----------- Net income $ 1,529,009 $ 104,718 $ 4,446,971 $ 3,329,057 =========== =========== =========== =========== Earnings per share: Net income $ .24 $ .02 $ .71 $ .53 =========== =========== =========== =========== Weighted average number of common stock and common stock equivalents 6,260,040 6,264,040 6,260,040 6,264,040 =========== =========== =========== ===========
See accompanying notes to financial statements. -2- 5 MOBILE AMERICA CORPORATION AND SUBSIDIARIES UNAUDITED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
1995 1994 ---- ---- Cash Flows from Operating Activities: Net Income $ 4,446,971 $ 3,329,057 Adjustments to reconcile net income to net cash provided by operating activities: Provisions for depreciation 516,922 219,195 (Gain) loss on sale of investments (198,356) (781,837) (Increase) decrease in insurance premiums receivable (3,676,964) 36,036 (Increase) decrease in accrued investment income and other receivables (323,678) 118,723 (Increase) decrease in deferred policy acquisition costs 154,289 1,075,422 (Increase) decrease in prepaid expenses and other assets 100,693 416 Increase (decrease) in insurance loss reserves (2,311,813) (2,172,011) Increase (decrease) in unearned premiums 2,210,521 (863,863) Increase (decrease) in reinsurance funds held and balances payable (1,551,902) 787,369 Increase (decrease) in accrued expenses and other liabilities 2,828,835 123,935 Increase (decrease) in current income taxes payable 2,605,439 847,857 Increase (decrease) in deferred income taxes payable (148,494) 137,000 (Increase) decrease in prepaid reinsurance premiums (181,178) (2,464,038) (Increase) decrease in reinsurance receivable (523,366) 695,858 Increase in unearned service fees 756,560 708,413 ---------- ---------- Net cash provided by operating activities 4,704,479 1,797,532 ---------- ---------- Cash Flows from Investing Activities: Net change in short term investments (586,260) (1,626,512) Purchase of equity securities (2,073,775) (1,704,982) Sale of equity securities 1,852,021 2,898,997 Purchase of modular offices, equipment and leasehold improvements 158,326 (181,427) Purchase of fixed maturities (18,114,533) (21,621,046) Sales and maturities of fixed maturities 15,526,863 20,669,394 Notes receivable 1,873 4,286 ----------- ----------- Net cash used in investing activities (3,235,485) (1,561,290) ----------- ----------- Cash Flows from Financing Activities: Purchase of treasury stock (32,503) (51,875) Dividends paid to shareholders (946,223) (1,304,142) ----------- ----------- Net cash used in financing activities (978,726) (1,356,017) ----------- ----------- Net increase (decrease) in cash 490,268 (1,119,775) Cash, beginning year 5,479,899 4,662,848 ----------- ----------- Cash, end of period $ 5,970,167 $ 3,543,073 =========== ===========
See notes to consolidated financial statements. -3- 6 MOBILE AMERICA CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY NINE MONTHS ENDED SEPTEMBER 30, 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 gains (losses) (174,090) (168,254) ----------- ----------- Treasury Stock (420,944) (388,441) ----------- ----------- Retained earnings: Balance at beginning of period 23,306,761 20,562,457 Net income 4,446,971 3,329,057 Cash Dividends $.21 and $.435 per share (946,223) (1,304,142) ----------- ----------- Balance at end of period 26,807,509 22,587,372 ----------- ----------- Total stockholders' equity at end of period $29,066,545 $24,884,747 =========== ===========
See accompanying notes to financial statements. -4- 7 MOBILE AMERICA CORPORATION NOTES TO FINANCIAL STATEMENTS QUARTERS ENDED SEPTEMBER 30, 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 September 30, 1995, and the results of its operations and statement of cash flow for the nine months ended September 30, 1995. Note 2 The results of operations for the nine months ended September 30, 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 September 30, 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 the statement date. 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 IRS recently concluded its examination of the company's 1993 tax return. The result of this examination was an adjustment in the timing of revenue recognition for that year. Accordingly, while revenue was under reported in 1992, this effect has reversed in subsequent periods. The net impact on the Company's financial statement was deemed to be immaterial. Note 4 Service fees earned of $3,095,254 in the third quarter of 1995 and $7,227,316 in the first nine months of 1995 as well as $851,595 in the third quarter of 1994 and $2,510,678 in the first nine months of 1994 reflect a reclassification of fees earned by the company's managing general agency for the servicing of insurance policies. In prior periods those amounts were reported as a reduction to policy acquisition costs. The amounts reclassified from policy acquisition costs to service fees earned are as follows:
Quarter Ended September 30, Nine Months Ended September 30, 1994 1995 1994 1995 ----------- ----------- ----------- ----------- $ 521,237 $ 1,471,772 $ 1,817,337 $ 3,645,570
-8- 11 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Operations Total consolidated revenues increased by 8.9% from $33,041,499 for the first nine months of 1994 to $35,982,147 for the first nine months of 1995. Correspondingly, total consolidated expenses decreased 4.9% from $28,745,924 for the first nine months of 1994 to $30,142,138 for the first nine months of 1995. While insurance premiums earned declined 7.9% from $26,559,807 in the first nine months of 1994 to $24,470,300 for the first nine months of 1995, principally due to the classification of certain premiums as fees, service fees earned increased over 187.9% from $2,510,678 during the first nine months of 1994 to $7,227,316 during the first nine months of 1995. The service fee growth is 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. Investment income increased from $2,939,563 for the first nine months of 1994 to $3,946,719 during the first nine months of 1995, an increase of 34.3%. The increase in investment income was offset by a decline in net realized capital gains from $781,837 in the first nine months of 1994 to $198,356 during the first nine months of 1995. Loss and loss adjustment expenses as a percentage of earned premium increased from 71.2% for the first nine months of 1994 to 88.4% for the first nine months of 1995. This is the result of the company's continuing efforts to strengthen reserves in the private passenger personal injury protection line of business. Salaries and wages and general and administrative expenses increased from $6,107,301 during the first nine months of 1994 to $7,340,681 during the first nine months of 1995. Financial Condition Cash dividend and any capital expenditure requirements continue to be provided by funds generated from operations. Liquidity remains substantial as emphasis continues to be placed on investment portfolio strength and flexibility so as to take advantage of investment yield opportunities as well as the timely payment of claims. The Company consummated a $12 million loan from SouthTrust Bank in October 1995. The proceeds are to be used primarily to provide additional capital for growth. -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 September 30, 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 November 11, 1995 By/s/ Joseph M. Bost - - ----------------- -------------------------- Date Joseph M. Bost Chief Financial Officer By/s/ Thomas L. Stinson ----------------------- Thomas L. Stinson Vice President -10- 13 INDEX TO EXHIBITS (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 September 30, 1995. EX-11 2 COMPUTATION OF EARNINGS PER SHARE 1 EXHIBIT 11 MOBILE AMERICA CORPORATION AND SUBSIDIARIES UNAUDITED COMPUTATIONS OF EARNINGS PER SHARE QUARTERS ENDED SEPTEMBER 30, 1995 AND 1994, NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
Quarters Ended Nine Months Ended September 30, September 30, ----------------------------- -------------------------- 1995 1994 1995 1994 ------------ ------------ ------------ ------------ Net Income $ 1,529,009 $ 104,718 $ 4,446,971 $ 3,329,057 ============ ============ ============ ============ Common shares outstanding 6,260,040 6,264,040 6,260,040 6,264,040 Effect of weighting treasury stock acquired - - - - Common and common equivalent shares used in computing earnings per share ------------ ------------ ------------ ------------ 6,260,040 6,264,040 6,260,040 6,264,040 ============ ============ ============ ============ Earnings per share $ .24 $ .02 $ .71 $ .53 ============ ============ ============ ============
EX-27 3 FINANCIAL DATA SCHEDULE
7 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF MOBILE AMERICA CORPORATION FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATMENTS. 9-MOS DEC-31-1994 JAN-01-1995 SEP-30-1995 0 72,226,037 72,296,195 2,296,907 0 356,970 89,482,153 5,970,167 0 (3,929,267) 151,626,776 41,638,656 36,850,201 0 0 0 168,010 0 0 0 151,626,776 24,470,300 3,946,719 198,356 67,703 21,640,903 1,160,510 0 5,840,009 1,393,038 4,446,971 0 0 0 4,446,971 .71 .71 19,103,286 12,754,805 (2,201,629) 8,200,449 13,373,573 16,282,889 0
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