UVE Universal Insurance Holdings Inc

 

 

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

        October 30, 2014        

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		(Commission		(IRS Employer
of incorporation or organization)		file number)		Identification No.)

1110 W. Commercial Blvd., Fort Lauderdale, Florida 33309

(Address of Principal Executive Offices)

Registrant’s 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)).

 

 

 

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ITEM 2.02

Results of Operations and Financial Condition

On October 30, 2014, Universal Insurance Holdings, Inc. issued a press release announcing its financial results for the fiscal quarter ended September 30, 2014. A copy of the press release is furnished as Exhibit 99.1 to this report and incorporated herein by reference.

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:

 

 

Exhibit No.		Description
99.1		Press Release, dated October 30, 2014.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

Date: October 30, 2014				UNIVERSAL INSURANCE HOLDINGS, INC.
				/s/ Frank C. Wilcox
				Frank C. Wilcox
				Chief Financial Officer

 

 

 

 

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Exhibit 99.1

 

FOR IMMEDIATE RELEASE

Universal Insurance Holdings, Inc. Reports Third Quarter 2014 Financial Results

Achieved Highest Earned Premiums, Total Revenues, Net Income and Diluted EPS in Company History

Fort Lauderdale, FL, October 30, 2014 – Universal Insurance Holdings, Inc. (NYSE: UVE) (or the “Company”) today reported net income of $21.3 million, or $0.61 per diluted share, an increase of $6.9 million, for the third quarter of 2014, compared to net income of $14.4 million, or $0.40 per diluted share, for the same period in 2013.

“Our record third quarter results highlight the successful execution of our strategy to grow our business, increase profitability and deliver value to our shareholders,” said Sean P. Downes, the Company’s Chairman, President and Chief Executive Officer. “Consistent with our strategy, we continued to maintain disciplined underwriting standards along with a focus on writing high quality, rate adequate, organically grown business. From a growth perspective, earlier this year we decided to reduce our quota share reinsurance which resulted in us retaining a greater portion of our business. In addition, this quarter we have seen an increase in policy count in each and every state in which we are currently writing business. We also continue to diversify our portfolio via geographic expansion and have recently been approved to write business in the state of Indiana. We believe the underlying organic growth drivers of our business remain strong and expect to build on our strong momentum in the fourth quarter.”

Third-Quarter 2014 & Recent Highlights

 

•

Earned premiums grew by $25.4 million to $94.3 million.

 

•

Total revenues increased by $25.1 million to $103.5 million.

 

•

Net income and diluted EPS grew by $6.9 million and $0.21, respectively, compared to Q3 2013.

 

•

Completed $10 million share repurchase program announced on June 17, 2014.

 

•

Paid dividends of $0.10 per share.

 

•

The Indiana Department of Insurance issued a Certificate of Authority in October 2014 to UPCIC, a wholly-owned subsidiary of Universal Insurance Holdings, Inc., approving UPCIC as a licensed insurance entity in the state of Indiana.

 

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Third-Quarter 2014 Results

Net income for the third quarter of 2014 of $21.3 million reflects an improvement across multiple measures including an increase in net earned premiums, policy fees and income generated from the Company’s investment portfolio, partially offset by a decrease in commission revenue and increases in operating expenses. Earned premiums, total revenues, net income and diluted EPS are all higher than any other quarter in the Company’s history.

Diluted EPS of $0.61 benefitted from lower outstanding shares as a result of the cumulative share repurchases made by the Company.

At September 30, 2014, stockholders’ equity was $189.1 million compared to $175.6 million at December 31, 2013 reflecting year-to-date net income of $52.0 million, share repurchases of $29.7 million and dividend payments of $10.4 million.

First Nine-Month Results

For the first nine months of 2014, the Company’s net income increased by $8.6 million, or 19.9 percent, compared to the same period of 2013. Diluted earnings per share for the first nine months of 2014 increased by $0.35, or 31 percent, compared to the same period of 2013.

Net premiums earned increased by $30.3 million to $231.5 million for the first nine months of 2014 compared to the same period of 2013.

Share Repurchases

During the third quarter of 2014, the Company repurchased 719,937 shares of its common stock at an average purchase price of $13.16 per share. As announced on September 25, 2014, the Company completed its $10 million share repurchase program announced on June 17, 2014, having repurchased a total of 758,361 shares of common stock in the open market at an average price of $13.15 per share.

The Company noted that the completion of its share repurchase program underscores its confident outlook, solid financial position and commitment to effectively deploying capital when it sees clear value. The Board of Directors and management team expect to continue to consider ways to enhance shareholder value, both through strategic growth initiatives and capital returns to shareholders.

Cash Dividends

On August 26, 2014, the Company announced that its board of directors declared a cash dividend of $0.10 per share of common stock which was paid on October 1, 2014, to shareholders of record on September 23, 2014.

 

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Financial Results Presentation

The Company will make available an audio recording of a presentation discussing its second quarter 2014 financial results on Thursday, October 30, 2014, at approximately 5:00 p.m. Eastern. The presentation will be pre-recorded and there will be no opportunity for live questions. The audio recording will be available at www.universalinsuranceholdings.com until December 1, 2014.

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 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, Maryland and Delaware. American Platinum Property and Casualty Insurance Company, 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 Company’s operations and future results, refer to the Company’s reports filed with the Securities and Exchange Commission, including the Form 10-K for the year ended December 31, 2013 and the Form 10-Q for the quarter ended September 30, 2014.

 

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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands, except per share data)

 

ASSETS		September 30, 2014				December 31, 2013
Cash and cash equivalents		$	170,352			$	117,275
Restricted cash and cash equivalents			6,597				2,600
Fixed maturities, at fair value			328,010				289,418
Equity securities, at fair value			20,387				65,022
Short-term investments, at fair value			37,473				—
Prepaid reinsurance premiums			195,322				241,214
Reinsurance recoverable			56,241				107,847
Reinsurance receivable, net			12,535				203
Premiums receivable, net			54,647				46,461
Other receivables			3,196				2,587
Property and equipment, net			9,961				9,289
Deferred policy acquisition costs, net			27,832				15,899
Income taxes recoverable			2,914				8,152
Deferred income tax asset, net			11,958				12,051
Other assets			2,840				2,072
Total assets		$	940,265			$	920,090
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Unpaid losses and loss adjustment expenses		$	136,915			$	159,222
Unearned premiums			411,875				383,488
Advance premium			21,302				22,959
Accounts payable			4,457				3,441
Book overdraft			5,861				14,947
Reinsurance payable, net			102,251				86,232
Income taxes payable			—				2,566
Dividends payable to shareholders			3,429				—
Other liabilities and accrued expenses			34,240				34,386
Long-term debt			30,796				37,240
Total liabilities			751,126				744,481
STOCKHOLDERS’ EQUITY:
Cumulative convertible preferred stock, $.01 par value			—				—
Authorized shares - 1,000
Issued shares - 12 and 30
Outstanding shares - 12 and 30
Minimum liquidation preference, $8.49 and $6.98 per share
Common stock, $.01 par value			449				436
Authorized shares - 55,000
Issued shares - 44,955 and 43,641
Outstanding shares - 34,289 and 35,366
Treasury shares, at cost - 10,666 and 8,275			(65,203	)			(35,467	)
Additional paid-in capital			45,096				42,282
Accumulated other comprehensive income (loss), net of taxes			(1,547	)			(376	)
Retained earnings			210,344				168,734
Total stockholders’ equity			189,139				175,609
Total liabilities and stockholders’ equity		$	940,265			$	920,090

 

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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except per share data)

 

		Three Months Ended September 30,
		2014				2013
PREMIUMS EARNED AND OTHER REVENUES
Direct premiums written		$	195,435			$	186,079
Ceded premiums written			(103,492	)			(124,961	)
Net premiums written			91,943				61,118
Change in net unearned premium			2,345				7,809
Premiums earned, net			94,288				68,927
Net investment income (expense)			644				382
Net realized gains (losses) on investments			501				56
Net change in unrealized gains (losses) on investments			—				15
Commission revenue			3,123				4,180
Policy fees			3,416				3,231
Other revenue			1,528				1,577
Total premiums earned and other revenues			103,500				78,368
OPERATING COSTS AND EXPENSES
Losses and loss adjustment expenses			34,181				28,335
General and administrative expenses			32,167				24,920
Total operating costs and expenses			66,348				53,255
INCOME BEFORE INCOME TAXES			37,152				25,113
Income taxes, current			15,376				9,142
Income taxes, deferred			435				1,564
Income taxes, net			15,811				10,706
NET INCOME		$	21,341			$	14,407
Basic earnings per common share		$	0.64			$	0.43
Weighted average common shares outstanding - Basic			33,432				33,658
Fully diluted earnings per common share		$	0.61			$	0.40
Weighted average common shares outstanding - Diluted			34,812				35,611
Cash dividend declared per common share		$	0.10			$	0.10

 

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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except per share data)

 

		Nine Months Ended September 30,
		2014				2013
PREMIUMS EARNED AND OTHER REVENUES
Direct premiums written		$	607,361			$	610,164
Ceded premiums written			(301,624	)			(400,175	)
Net premiums written			305,737				209,989
Change in net unearned premium			(74,280	)			(8,787	)
Premiums earned, net			231,457				201,202
Net investment income (expense)			1,574				530
Net realized gains (losses) on investments			5,353				(15,982	)
Net change in unrealized gains (losses) on investments			—				7,912
Commission revenue			10,882				14,437
Policy fees			10,827				10,737
Other revenue			4,701				4,743
Total premiums earned and other revenues			264,794				223,579
OPERATING COSTS AND EXPENSES
Losses and loss adjustment expenses			88,685				80,018
General and administrative expenses			85,431				68,998
Total operating costs and expenses			174,116				149,016
INCOME BEFORE INCOME TAXES			90,678				74,563
Income taxes, current			37,833				25,440
Income taxes, deferred			829				5,728
Income taxes, net			38,662				31,168
NET INCOME		$	52,016			$	43,395
Basic earnings per common share		$	1.55			$	1.18
Weighted average common shares outstanding - Basic			33,607				36,628
Fully diluted earnings per common share		$	1.48			$	1.13
Weighted average common shares outstanding - Diluted			35,097				38,352
Cash dividend declared per common share		$	0.30			$	0.26

Investor Contact:

Andy Brimmer / Mahmoud Siddig

Joele Frank, Wilkinson Brimmer Katcher

212-355-4449

 

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