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 March 8, 2013
(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 March 8, 2013, Universal Insurance Holdings, Inc. issued a press release announcing its financial results for the fiscal year ended December 31, 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 March 8, 2013. |
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: March 8, 2013 | UNIVERSAL INSURANCE HOLDINGS, INC. | |
/s/ George R. De Heer | ||
George R. De Heer Chief Financial Officer |
Exhibit 99.1
UNIVERSAL INSURANCE HOLDINGS, INC. REPORTS
FOURTH-QUARTER AND FULL-YEAR 2012 FINANCIAL RESULTS
Full-year 2012 diluted EPS grows 50 percent versus 2011
Fourth-quarter 2012 diluted EPS increases 17 cents versus the same quarter last year
Fort Lauderdale, Fla., March 8, 2013Universal Insurance Holdings, Inc. (Company) (NYSE MKT: UVE), a vertically integrated insurance holding company, reported net income of $4.4 million, or $0.11 per diluted share, an increase of $0.17, for the fourth quarter of 2012, compared to a net loss of $2.3 million, or $0.06 per diluted share, for the same period in 2011.
For the full year of 2012, the Company reported net income of $30.3 million and diluted earnings per share of $0.75, an increase of 50.0 percent, compared to net income of $20.1 million, or $0.50 per diluted share, for the same period of 2011.
President and CEO Sean Downes commented, Our full-year 2012 results reflect the successful execution of our business plan leading to better underwriting margins compared to a year ago. Through successful growth initiatives and favorable rate changes, we were able to grow our top line by 8.1 percent in 2012 while maintaining underwriting discipline and managing our overall exposure to catastrophic risk. We are pleased that this 2012 profitability led to 9.0 percent growth in stockholders equity and allowed us to declare and pay dividends totaling $0.46 per share during the year.
Fourth-Quarter 2012 Results
Net income during the fourth quarter of 2012 increased $6.7 million, or $0.17 per diluted share, primarily as a result of an increase in net earned premiums. The improvement in fourth quarter 2012 profitability was somewhat mitigated by pre-tax charges of $6.3 million related to the previously disclosed mandatory assessment by the Florida Insurance Guaranty Association (FIGA). The Company will recover the assessment from the policyholders of Universal Property & Casualty Insurance Company (UPCIC) over an estimated twelve-month period which began on February 1, 2013.
Direct premiums written collectively by UPCIC and American Platinum Property and Casualty Insurance Company, the Companys wholly-owned insurance company subsidiaries, rose 6.8 percent during the fourth quarter of 2012. Net premiums earned grew $15.5 million, or 29.8 percent, in the fourth quarter of 2012 compared to the same quarter in 2011, primarily as a result of increases in premium rates over the past 24 months, 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.
Page 2
Fourth-quarter 2012 operating costs increased by 5.9 percent compared to the same quarter last year, as general and administrative expenses increased $12.4 million, or 64.2 percent, partly attributable to the FIGA assessment mentioned above. Meanwhile, somewhat mitigating the rise in operating costs was a reduction in losses and loss adjustment expenses of $8.7 million, or 20.2 percent.
At December 31, 2012, stockholders equity was $163.5 million compared to $166.0 million at September 30, 2012, and $150.0 million at December 31, 2011.
Full-Year 2012 Results
For the full year of 2012, the Companys net income and diluted earnings per share grew by 50.7 percent and 50.0 percent, respectively, compared to the same period of 2011.
Net premiums earned increased 16.1 percent for the full year 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, and the reduction in the quota-share cession rate.
Cash Dividends
On November 28, 2012, the Company announced that its board of directors declared a cash dividend of $0.20 per share of common stock, which was paid on December 28, 2012 to shareholders of record on December 14, 2012. In total, $0.46 per share in cash dividends were declared and paid in 2012.
Also, on February 8, 2013, the Company announced that its board of directors declared a cash dividend of $0.08 per share of common stock to be paid on April 5, 2013 to shareholders of record on March 14, 2013. The board further indicated that it expects to declare additional quarterly dividends in the same amount to shareholders of record in the second, third and fourth quarters of 2013. If declared and paid as intended, the annual dividend in 2013 would be $0.32 for each common share.
Premium Rate Update
On February 7, 2013, the Company announced that UPCIC received approval from the Florida Office of Insurance Regulation for premium rate increases for its homeowners and dwelling fire programs within Florida. The premium rate increases are expected to average approximately 14.1 percent statewide for its homeowners program and 14.5 percent statewide for its dwelling fire program. The effective dates for the homeowners program rate increase are January 18, 2013, for new business and March 9, 2013, for renewal business. The effective dates for the dwelling fire program rate increase are January 14, 2013, for new business and March 3, 2013, for renewal business.
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.
Page 3
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, 2012.
Investor Contact:
Philip Kranz, Dresner Corporate Services, 312-780-7240, pkranz@dresnerco.com
Page 4
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in thousands, except per share data)
For the Three
Months Ended December 31, |
||||||||
2012 | 2011 | |||||||
PREMIUMS EARNED AND OTHER REVENUES |
||||||||
Direct premiums written |
$ | 174,571 | $ | 163,438 | ||||
Ceded premiums written |
(118,961 | ) | (119,306 | ) | ||||
|
|
|
|
|||||
Net premiums written |
55,610 | 44,132 | ||||||
(Increase) decrease in net unearned premium |
11,664 | 7,691 | ||||||
|
|
|
|
|||||
Premiums earned, net |
67,274 | 51,823 | ||||||
Net investment income |
278 | 430 | ||||||
Net realized gains (losses) on investments |
353 | (10,146 | ) | |||||
Net unrealized gains (losses) on investments |
(2,047 | ) | 4,627 | |||||
Net foreign currency gains (losses) on investments |
(1 | ) | 1,916 | |||||
Commission revenue |
4,889 | 5,194 | ||||||
Policy Fees |
3,041 | 3,188 | ||||||
Other revenue |
1,440 | 1,411 | ||||||
|
|
|
|
|||||
Total premiums earned and other revenues |
75,227 | 58,443 | ||||||
|
|
|
|
|||||
OPERATING COSTS AND EXPENSES |
||||||||
Losses and loss adjustment expenses |
34,275 | 42,929 | ||||||
General and administrative expenses |
31,588 | 19,236 | ||||||
|
|
|
|
|||||
Total operating costs and expenses |
65,863 | 62,165 | ||||||
|
|
|
|
|||||
INCOME BEFORE INCOME TAXES |
9,364 | (3,722 | ) | |||||
Income taxes, current |
7,950 | (2,538 | ) | |||||
Income taxes, deferred |
(2,992 | ) | 1,129 | |||||
|
|
|
|
|||||
Income taxes, net |
4,958 | (1,409 | ) | |||||
|
|
|
|
|||||
NET INCOME |
$ | 4,406 | $ | (2,313 | ) | |||
|
|
|
|
|||||
Basic earnings per common share |
$ | 0.11 | $ | (0.06 | ) | |||
|
|
|
|
|||||
Weighted average number of common shares outstandingbasic |
39,719 | 39,207 | ||||||
|
|
|
|
|||||
Diluted earnings per common share |
$ | 0.11 | $ | (0.06 | ) | |||
|
|
|
|
|||||
Weighted average number of common shares outstandingdiluted |
41,091 | 40,165 | ||||||
|
|
|
|
|||||
Cash dividend declared per common share |
$ | 0.20 | $ | 0.18 | ||||
|
|
|
|
Page 5
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
For the Years Ended December 31, |
||||||||
2012 | 2011 | |||||||
PREMIUMS EARNED AND OTHER REVENUES |
||||||||
Direct premiums written |
$ | 780,128 | $ | 721,462 | ||||
Ceded premiums written |
(517,604 | ) | (512,979 | ) | ||||
|
|
|
|
|||||
Net premiums written |
262,524 | 208,483 | ||||||
(Increase) decrease in net unearned premium |
(31,404 | ) | (9,498 | ) | ||||
|
|
|
|
|||||
Premiums earned, net |
231,120 | 198,985 | ||||||
Net investment income |
441 | 788 | ||||||
Net realized gains (losses) on investments |
(11,943 | ) | 2,350 | |||||
Net unrealized gains (losses) on investments |
9,443 | (18,410 | ) | |||||
Net foreign currency gains (losses) on investments |
22 | 1,532 | ||||||
Commission revenue |
20,383 | 19,507 | ||||||
Policy Fees |
14,475 | 15,298 | ||||||
Other revenue |
5,998 | 5,811 | ||||||
|
|
|
|
|||||
Total premiums earned and other revenues |
269,939 | 225,861 | ||||||
|
|
|
|
|||||
OPERATING COSTS AND EXPENSES |
||||||||
Losses and loss adjustment expenses |
126,187 | 124,309 | ||||||
General and administrative expenses |
91,193 | 67,834 | ||||||
|
|
|
|
|||||
Total operating costs and expenses |
217,380 | 192,143 | ||||||
|
|
|
|
|||||
INCOME BEFORE INCOME TAXES |
52,559 | 33,718 | ||||||
Income taxes, current |
18,434 | 23,152 | ||||||
Income taxes, deferred |
3,813 | (9,543 | ) | |||||
|
|
|
|
|||||
Income taxes, net |
22,247 | 13,609 | ||||||
|
|
|
|
|||||
NET INCOME |
$ | 30,312 | $ | 20,109 | ||||
|
|
|
|
|||||
Basic earnings per common share |
$ | 0.76 | $ | 0.51 | ||||
|
|
|
|
|||||
Weighted average number of common shares outstandingbasic |
39,614 | 39,184 | ||||||
|
|
|
|
|||||
Diluted earnings per common share |
$ | 0.75 | $ | 0.50 | ||||
|
|
|
|
|||||
Weighted average number of common shares outstandingdiluted |
40,616 | 40,442 | ||||||
|
|
|
|
|||||
Cash dividend declared per common share |
$ | 0.46 | $ | 0.32 | ||||
|
|
|
|
Page 6
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
December 31, | ||||||||
2012 | 2011 | |||||||
ASSETS | ||||||||
Cash and cash equivalents |
$ | 347,392 | $ | 229,685 | ||||
Restricted cash and cash equivalents |
33,009 | 78,312 | ||||||
Fixed maturities, at fair value |
4,009 | 3,801 | ||||||
Equity securities, at fair value |
85,041 | 95,345 | ||||||
Prepaid reinsurance premiums |
239,921 | 243,095 | ||||||
Reinsurance recoverable |
89,191 | 85,706 | ||||||
Reinsurance receivable, net |
24,334 | 55,205 | ||||||
Premiums receivable, net |
50,125 | 45,828 | ||||||
Receivable from securities sold |
1,096 | 9,737 | ||||||
Other receivables |
2,017 | 2,732 | ||||||
Property and equipment, net |
8,968 | 7,116 | ||||||
Deferred policy acquisition costs, net |
17,282 | 12,996 | ||||||
Income taxes recoverable |
2,594 | | ||||||
Deferred income tax asset, net |
19,178 | 22,991 | ||||||
Other assets |
1,578 | 1,477 | ||||||
|
|
|
|
|||||
Total assets |
$ | 925,735 | $ | 894,026 | ||||
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||
LIABILITIES: |
||||||||
Unpaid losses and loss adjustment expenses |
$ | 193,241 | $ | 187,215 | ||||
Unearned premiums |
388,071 | 359,842 | ||||||
Advance premium |
15,022 | 19,390 | ||||||
Accounts payable |
4,368 | 4,314 | ||||||
Bank overdraft |
25,994 | 25,485 | ||||||
Payable for securities purchased |
1,275 | 1,067 | ||||||
Reinsurance payable, net |
85,259 | 87,497 | ||||||
Income taxes payable |
699 | 12,740 | ||||||
Other liabilities and accrued expenses |
28,071 | 24,780 | ||||||
Long-term debt |
20,221 | 21,691 | ||||||
|
|
|
|
|||||
Total liabilities |
762,221 | 744,021 | ||||||
|
|
|
|
|||||
STOCKHOLDERS EQUITY: |
||||||||
Cumulative convertible preferred stock, $.01 par value |
1 | 1 | ||||||
Authorized shares1,000 |
||||||||
Issued shares108 |
||||||||
Outstanding shares108 |
||||||||
Minimum liquidation preference, $2.66 per share |
||||||||
Common stock, $.01 par value |
419 | 411 | ||||||
Authorized shares55,000 |
||||||||
Issued shares41,889 and 41,100 |
||||||||
Outstanding shares40,871 and 40,082 |
||||||||
Treasury shares, at cost1,018 |
(3,101 | ) | (3,101 | ) | ||||
Additional paid-in capital |
38,684 | 36,536 | ||||||
Retained earnings |
127,511 | 116,158 | ||||||
|
|
|
|
|||||
Total stockholders equity |
163,514 | 150,005 | ||||||
|
|
|
|
|||||
Total liabilities and stockholders equity |
$ | 925,735 | $ | 894,026 | ||||
|
|
|
|