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
November 9, 2012
Date of report (Date of earliest event reported)
Universal Insurance Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 001-33251 | 65-0231984 | ||
(State or other jurisdiction of incorporation or organization) |
(Commission file number) |
(IRS Employer Identification No.) |
1110 W. Commercial Blvd., Fort Lauderdale, Florida 33309
(Address of Principal Executive Offices)
Registrants telephone number, including area code: (954) 958-1200
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 communication 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 November 9, 2012, Universal Insurance Holdings, Inc. issued a press release announcing its financial results for the fiscal quarter ended September 30, 2012. A copy of the press release is furnished as Exhibit 99.1 to this report.
This information shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
ITEM 9.01 | Financial Statements and Exhibits |
(d) Exhibits:
99.1 | Press Release, dated November 9, 2012. |
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.
Date: November 9, 2012 | UNIVERSAL INSURANCE HOLDINGS, INC. | |||||
/s/ George R. De Heer | ||||||
George R. De Heer | ||||||
Chief Financial Officer |
Exhibit 99.1
UNIVERSAL INSURANCE HOLDINGS, INC. REPORTS
THIRD-QUARTER 2012 FINANCIAL RESULTS
Third quarter 2012 diluted EPS increases 18 cents versus the same quarter last year, while
first nine-months 2012 diluted EPS grows 16.4 percent versus the first nine months of 2011
Fort Lauderdale, Fla., November 9, 2012 - Universal Insurance Holdings, Inc. (UIH) (NYSE MKT: UVE) with its wholly-owned subsidiaries (the Company or Universal), a vertically integrated insurance holding company, reported net income of $8.3 million, or $0.20 per diluted share, an increase of $0.18, for the third quarter of 2012, compared to net income of $1.0 million, or $0.02 per diluted share, for the same period in 2011.
Third-Quarter 2012 Results
Net income during the third quarter of 2012 increased $7.3 million, or $0.18 per diluted share, as a result of an increase in net earned premiums and improved performance in the Companys investment trading portfolio.
Direct premiums written collectively by Universal Property & Casualty Insurance Company (UPCIC) and American Platinum Property and Casualty Insurance Company (APPCIC), Universals wholly-owned insurance company subsidiaries, rose 12.6 percent during the third quarter of 2012. Net premiums earned grew $9.9 million, or 19.9 percent, in the third quarter of 2012 compared to the same quarter in 2011, primarily as a result of increases in premium rates over the past 24 months, the most recent of which were in January and February of 2012, and a reduction in the quota-share cession rate from 50 percent for the 2011-2012 reinsurance program to 45 percent for the 2012-2013 reinsurance program.
Third-quarter 2012 operating costs increased compared to the same quarter last year, as net losses and loss adjustment expenses (LAE) increased $7.0 million, or 23.7 percent, while general and administrative expenses increased $5.4 million, or 28.9 percent. Also in the third quarter, the Company decided to forego efforts to collect $5.4 million from a reinsurer because the tangible and intangible costs associated with the collection effort appeared likely to exceed the amount claimed.
At September 30, 2012, stockholders equity was $166.0 million compared to $161.8 million at June 30, 2012, and $156.9 million at September 30, 2011.
Cash Dividends
On September 10, 2012, UIH announced that its board of directors declared a cash dividend of $0.08 per share, which was paid on October 9, 2012, to shareholders of record on September 26, 2012. At that time, the board further indicated that it expects to declare an additional dividend of the same amount to shareholders of record in the fourth quarter, which would bring this years aggregate declared annual dividend to $0.34 for each share of common stock. Declaration and payment of future dividends is subject to the discretion of UIHs board and will be dependent on future earnings, cash flows, financial requirements and other factors.
First Nine-Months 2012 Results
For the first nine months of 2012, the Companys net income and diluted earnings per share grew by 15.5 percent and 16.4 percent, respectively, compared to the same period of 2011.
Net premiums earned increased 11.3 percent for the first nine months of 2012 compared to the same period of 2011, primarily as a result of the previously mentioned rate increases, which have had a positive effect on premium generated by renewal policies.
Tropical Storm/Hurricane Sandy Update
The Company has received few claims from Tropical Storm/Hurricane Sandy, which recently affected the eastern United States. The insurance company subsidiaries write most of their policies in Florida, which was not severely affected.
About Universal Insurance Holdings, Inc.
Universal Insurance Holdings, Inc., with its wholly-owned subsidiaries, is a vertically integrated insurance holding company performing all aspects of insurance underwriting, distribution and claims. Universal Property & Casualty Insurance Company (UPCIC), a wholly owned subsidiary of the Company, is one of the three leading writers of homeowners insurance in Florida and is now fully licensed and has commenced its operations in North Carolina, South Carolina, Hawaii, Georgia, Massachusetts and Maryland. American Platinum Property and Casualty Insurance Company (APPCIC), also a wholly owned subsidiary, currently writes homeowners multi-peril insurance on Florida homes valued in excess of $1 million, which are limits and coverages currently not targeted through its affiliate UPCIC. For additional information on the Company, please visit our investor relations website at www.universalinsuranceholdings.com.
Forward-Looking Statements and Risk Factors
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words believe, expect, anticipate, and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Such statements may include commentary on plans, products and lines of business, marketing arrangements, reinsurance programs and other business developments and assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future results could differ materially from those described and the Company undertakes no obligation to correct or update any forward-looking statements. For further information regarding risk factors that could affect the Companys operations and future results, refer to the Companys reports filed with the Securities and Exchange Commission, including the Form 10-K for the year ended December 31, 2011 and the Form 10-Q for the quarter ended September 30, 2012.
Investor Contact:
Philip Kranz, Dresner Corporate Services, 312-780-7240, pkranz@dresnerco.com
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(in thousands, except per share data)
Three Months Ended September 30, |
Nine Months Ended September 30, |
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2012 | 2011 | 2012 | 2011 | |||||||||||||
PREMIUMS EARNED AND OTHER REVENUES |
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Direct premiums written |
$ | 192,986 | $ | 171,370 | $ | 605,557 | $ | 558,024 | ||||||||
Ceded premiums written |
(132,776 | ) | (123,984 | ) | (398,643 | ) | (393,673 | ) | ||||||||
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Net premiums written |
60,210 | 47,386 | 206,914 | 164,351 | ||||||||||||
Change in net unearned premium |
(698 | ) | 2,248 | (43,068 | ) | (17,189 | ) | |||||||||
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Premiums earned, net |
59,512 | 49,634 | 163,846 | 147,162 | ||||||||||||
Net investment income (expense) |
215 | 122 | 163 | 358 | ||||||||||||
Net realized gains (losses) on investments |
(3,142 | ) | 5,884 | (12,296 | ) | 12,496 | ||||||||||
Net unrealized gains (losses) on investments |
8,091 | (15,985 | ) | 11,490 | (23,037 | ) | ||||||||||
Net foreign currency gains (losses) on investments |
| (455 | ) | 23 | (384 | ) | ||||||||||
Commission revenue |
4,822 | 5,192 | 15,494 | 14,313 | ||||||||||||
Policy fees |
3,461 | 3,535 | 11,434 | 12,110 | ||||||||||||
Other revenue |
1,578 | 1,486 | 4,558 | 4,400 | ||||||||||||
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Total premiums earned and other revenues |
74,537 | 49,413 | 194,712 | 167,418 | ||||||||||||
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OPERATING COSTS AND EXPENSES |
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Losses and loss adjustment expenses |
36,301 | 29,343 | 91,912 | 81,380 | ||||||||||||
General and administrative expenses |
24,262 | 18,827 | 59,605 | 48,598 | ||||||||||||
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Total operating costs and expenses |
60,563 | 48,170 | 151,517 | 129,978 | ||||||||||||
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INCOME BEFORE INCOME TAXES |
13,974 | 1,243 | 43,195 | 37,440 | ||||||||||||
Income taxes, current |
624 | 7,331 | 10,484 | 25,690 | ||||||||||||
Income taxes, deferred |
5,094 | (7,063 | ) | 6,805 | (10,672 | ) | ||||||||||
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Income taxes, net |
5,718 | 268 | 17,289 | 15,018 | ||||||||||||
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NET INCOME AND COMPREHENSIVE INCOME |
$ | 8,256 | $ | 975 | $ | 25,906 | $ | 22,422 | ||||||||
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Basic earnings per common share |
$ | 0.21 | $ | 0.02 | $ | 0.65 | $ | 0.57 | ||||||||
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Weighted average of common shares outstanding - Basic |
39,679 | 39,190 | 39,579 | 39,177 | ||||||||||||
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Fully diluted earnings per common share |
$ | 0.20 | $ | 0.02 | $ | 0.64 | $ | 0.55 | ||||||||
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Weighted average of common shares outstanding - Diluted |
40,450 | 40,330 | 40,458 | 40,536 | ||||||||||||
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Cash dividends declared per common share |
$ | 0.08 | $ | 0.08 | $ | 0.26 | $ | 0.18 | ||||||||
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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands, except per share data)
As of | ||||||||
September 30, 2012 |
December 31, 2011 |
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ASSETS: |
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Cash and cash equivalents |
$ | 365,675 | $ | 229,685 | ||||
Restricted cash and cash equivalents |
95,135 | 78,312 | ||||||
Fixed maturities, at fair value |
4,008 | 3,801 | ||||||
Equity securities, at fair value |
48,875 | 95,345 | ||||||
Prepaid reinsurance premiums |
248,899 | 243,095 | ||||||
Reinsurance recoverables |
80,800 | 85,706 | ||||||
Reinsurance receivable, net |
30,528 | 55,205 | ||||||
Premiums receivable, net |
56,044 | 45,828 | ||||||
Receivable from securities sold |
1,750 | 9,737 | ||||||
Other receivables |
3,197 | 2,732 | ||||||
Property and equipment, net |
8,838 | 7,116 | ||||||
Deferred policy acquisition costs, net |
18,019 | 12,996 | ||||||
Income taxes recoverable |
406 | | ||||||
Deferred income tax asset, net |
16,185 | 22,991 | ||||||
Other assets |
1,553 | 1,477 | ||||||
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Total assets |
$ | 979,912 | $ | 894,026 | ||||
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LIABILITIES AND STOCKHOLDERS EQUITY |
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LIABILITIES: |
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Unpaid losses and loss adjustment expenses |
$ | 172,674 | $ | 187,215 | ||||
Unearned premiums |
408,714 | 359,842 | ||||||
Advance premium |
18,468 | 19,390 | ||||||
Accounts payable |
4,252 | 4,314 | ||||||
Bank overdraft |
29,198 | 25,485 | ||||||
Payable for securities purchased |
4,706 | 1,067 | ||||||
Reinsurance payable |
123,934 | 87,497 | ||||||
Income taxes payable |
23 | 12,740 | ||||||
Dividends payable to shareholders |
3,287 | | ||||||
Other liabilities and accrued expenses |
28,054 | 24,780 | ||||||
Long-term debt |
20,588 | 21,691 | ||||||
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Total liabilities |
813,898 | 744,021 | ||||||
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STOCKHOLDERS EQUITY: |
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Cumulative convertible preferred stock, $.01 par value |
1 | 1 | ||||||
Authorized shares - 1,000 |
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Issued shares - 108 |
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Outstanding shares - 108 |
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Minimum liquidation preference, $2.66 per share |
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Common stock, $.01 par value |
419 | 411 | ||||||
Authorized shares - 55,000 |
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Issued shares - 41,889 and 41,100 |
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Outstanding shares - 40,871 and 40,082 |
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Treasury shares, at cost - 1,018 |
(3,101 | ) | (3,101 | ) | ||||
Additional paid-in capital |
37,408 | 36,536 | ||||||
Retained earnings |
131,287 | 116,158 | ||||||
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Total stockholders equity |
166,014 | 150,005 | ||||||
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Total liabilities and stockholders equity |
$ | 979,912 | $ | 894,026 | ||||
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