American Independence Corp. Announces 2014 Fourth-Quarter and Annual Results
March 10 2015 - 9:27PM
American Independence Corp. (Nasdaq:AMIC) today reported 2014
fourth-quarter and annual results.
Financial Results
AMIC reported net income of $2.1 million ($.26 per diluted
share) for the three months ended December 31, 2014 compared to
$0.4 million ($.05 per diluted share) for the three months ended
December 31, 2013. AMIC reported net income of $5.3 million ($.65
per diluted share) for the year ended December 31, 2014 compared to
$2.9 million ($.36 per diluted share) for the year ended December
31, 2013. Due to our profitability in 2014 and projected continuing
profitable results, AMIC's net income for the fourth quarter and
year ended December 31, 2014 was positively impacted by an increase
of $2.5 million in the deferred tax asset related to our federal
net operating loss carryforwards ("NOLs").
Revenues decreased to $40.6 million for the three months ended
December 31, 2014 compared to revenues of $42.9 million for the
three months ended December 31, 2013, primarily due to a decrease
in fee income from certain fully insured health subsidiaries.
Revenues increased to $164.9 million for the year ended December
31, 2014 compared to revenues of $153.3 million for the year ended
December 31, 2013, primarily due to an increase in premiums, fee
income and agency income.
Chief Executive Officer's Comments
Roy Thung, Chief Executive Officer, commented, "We are delighted
with the continuing growth in earned premium and with the
profitability of business written by IHC Risk Solutions. We
attribute the growth in our direct distribution to our enhanced
sales force, focused underwriting and employer groups moving from
fully insured to self-funding as they consider alternatives as a
result of health care reform. We expect continued improvement in
this line of business, as evidenced by the 38% growth in our direct
business written for the twelve months ended January 2015, while
maintaining consistent profit margins on a growing premium base.
With respect to our fully insured operating companies, we continue
to build out the direct-to-consumer distribution that is essential
to our future growth as a specialty health company, and we are
pleased with the growth and profitability of our ancillary lines of
business. Our financial condition and balance sheet remain strong.
We have no debt and have grown our book value to $11.34 per share
at December 31, 2014 from $10.44 per share at December 31,
2013."
Valuation Allowance Relating to the Deferred Tax
Asset
In the fourth quarter of 2014, the Company further reduced the
valuation allowance relating to the deferred tax asset, which
caused a corresponding increase in such deferred tax asset. The
valuation allowance relates to the likelihood that AMIC might not
be able to fully utilize its prior tax year federal NOLs. AMIC
reviews the valuation allowance on a quarterly basis to determine
the reasonableness of the amount. Based upon AMIC's projections of
future profitable results and profitability in 2014, it was
appropriate to further reduce the valuation allowance in the fourth
quarter of 2014 in the amount of $2.5 million, which resulted in an
increase in net income.
Change in Accounting Principle
AMIC was acquired in a series of transactions by Independence
Holding Company ("IHC") beginning in 2002 with a 19.9% equity
investment and culminating in its current ownership of 90%. In
March 2010, IHC increased its ownership to over 50% and, in
accordance with generally accepted accounting principles in the
United States ("GAAP"), IHC established a new basis for AMIC's
assets and liabilities in IHC's consolidated financial statements
based on the fair value of AMIC's identifiable assets and
liabilities assumed at that time. AMIC did not "push down" the new
basis for its assets and liabilities; instead, AMIC maintained its
historical basis in its assets and liabilities for the purpose of
issuing its separate standalone financial statements. Accordingly,
the reporting basis for AMIC's assets and liabilities included in
the consolidated financial statements of IHC were different from
the reporting basis for AMIC's assets and liabilities included in
AMIC's previously reported separate standalone financial
statements. During the second quarter of 2014, due to the lifting
of certain restrictions and requirements relating to IHC's
ownership of AMIC stock, AMIC has elected, for all periods
presented, to reflect IHC's basis.
As a result of the above-mentioned change in accounting
principle, the consolidated financial statements and financial
information of AMIC reported prior to June 30, 2014 are not
directly comparable to the financial statements and financial
information of AMIC included in this news release. The differences
relate to the write-off of goodwill, basis differences in
intangible assets and related amortization, other assets, other
investments, non-controlling interests in subsidiaries, taxes and
related tax provisions, net income, additional paid-in capital,
retained earnings and total shareholders' equity (including a
corresponding change in book value per share). See Notes to
Consolidated Financial Statements included in the December 31, 2014
Form 10-K for the impact of this adoption on AMIC's consolidated
balance sheets and consolidated statements of income at and for the
period ended December 31, 2013. The restatement resulted in the
reduction of book value per share to correspond with IHC's carrying
basis in AMIC.
About American Independence Corp.
American Independence Corp. is a holding company principally
engaged in health insurance and reinsurance. It provides
specialized health coverage and related services to commercial
customers and individuals. Through Independence American Insurance
Company and its other subsidiaries, it offers medical stop-loss,
non-subscriber occupational accident, pet insurance, group major
medical, short-term medical, vision, dental and various
supplemental products, which are marketed through its subsidiaries
IHC Specialty Benefits, Inc., IPA Direct, LLC and IPA Family, LLC.
AMIC markets medical stop-loss through its marketing and
administrative company IHC Risk Solutions, LLC.
Forward-Looking Statements
Certain statements and information contained in this release may
be considered "forward-looking statements," such as statements
relating to management's views with respect to future events and
financial performance. Such forward-looking statements are subject
to risks, uncertainties and other factors that could cause actual
results to differ materially from historical experience or from
future results expressed or implied by such forward-looking
statements. Potential risks and uncertainties include, but are not
limited to, economic conditions in the markets in which American
Independence Corp. (AMIC) operates, new federal or state
governmental regulation, AMIC's ability to effectively operate,
integrate and leverage any past or future strategic acquisition,
and other factors which can be found in AMIC's other news releases
and filings with the Securities and Exchange Commission. AMIC
expressly disclaims any duty to update its forward-looking
statements unless required by applicable law.
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American Independence
Corp. |
Consolidated Statements
of Income |
(In thousands, except
per share data) |
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Three Months
Ended |
Year
Ended |
|
December
31, |
December
31, |
|
2014 |
2013 |
2014 |
2013 |
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|
|
|
Premiums earned |
$ 33,551 |
$ 33,745 |
$ 133,606 |
$ 127,203 |
Fee and agency income |
6,437 |
8,448 |
27,918 |
22,421 |
Net investment income |
557 |
562 |
2,202 |
2,104 |
Net realized investment gains |
104 |
109 |
967 |
1,082 |
Other income (loss) |
(37) |
83 |
183 |
463 |
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Revenues |
40,612 |
42,947 |
164,876 |
153,273 |
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Insurance benefits, claims and reserves |
24,875 |
23,488 |
88,887 |
87,118 |
Selling, general and administrative
expenses |
16,049 |
18,043 |
69,752 |
58,878 |
Amortization and depreciation |
412 |
458 |
1,692 |
1,836 |
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Expenses |
41,336 |
41,989 |
160,331 |
147,832 |
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Income (loss) before income tax |
(724) |
958 |
4,545 |
5,441 |
Provision (benefit) for income taxes |
(2,790) |
209 |
(802) |
1,576 |
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Net income |
2,066 |
749 |
5,347 |
3,865 |
Less: Net (income) loss
attributable to the non-controlling interest |
28 |
(349) |
(97) |
(983) |
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Net income attributable to American
Independence Corp. |
$ 2,094 |
$ 400 |
$ 5,250 |
$ 2,882 |
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Basic income per common
share: |
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Net income attributable to |
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American Independence Corp.
common stockholders |
$ .26 |
$ .05 |
$ .65 |
$ .36 |
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Weighted-average shares outstanding |
8,079 |
8,073 |
8,077 |
8,076 |
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Diluted income per common
share: |
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Net income attributable to |
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American Independence Corp.
common stockholders |
$ .26 |
$ .05 |
$ .65 |
$ .36 |
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Weighted-average diluted shares
outstanding |
8,093 |
8,093 |
8,103 |
8,084 |
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American Independence
Corp. |
Consolidated Balance
Sheets |
(In thousands, except
per share data) |
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December 31, |
December 31, |
ASSETS: |
2014 |
2013 |
Investments: |
|
|
Securities purchased under
agreements to resell |
$ 3,143 |
$ 3,563 |
Trading securities |
1,138 |
859 |
Fixed maturities
available-for-sale, at fair value |
73,608 |
68,222 |
Equity securities
available-for-sale, at fair value |
1,013 |
988 |
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Total investments |
78,902 |
73,632 |
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Cash and cash equivalents |
4,569 |
4,424 |
Restricted cash |
18,881 |
10,067 |
Accrued investment income |
652 |
604 |
Premiums receivable |
13,257 |
14,364 |
Net deferred tax asset |
12,025 |
11,172 |
Due from reinsurers |
5,532 |
7,549 |
Intangible assets |
9,915 |
11,408 |
Accrued fee income |
4,469 |
2,332 |
Due from securities
brokers |
293 |
172 |
Other assets |
17,286 |
17,450 |
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TOTAL
ASSETS |
$ 165,781 |
$ 153,174 |
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LIABILITIES AND STOCKHOLDERS'
EQUITY: |
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LIABILITIES: |
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Policy benefits and claims |
$ 33,616 |
$ 35,252 |
Premium and claim funds
payable |
18,881 |
10,067 |
Commission payable |
4,672 |
5,455 |
Accounts payable, accruals and
other liabilities |
11,283 |
13,251 |
State income taxes payable |
597 |
544 |
Due to securities brokers |
58 |
45 |
Due to reinsurers |
2,334 |
1,177 |
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Total liabilities |
71,441 |
65,791 |
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STOCKHOLDERS' EQUITY: |
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American Independence Corp.
stockholders' equity: |
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Preferred stock, $0.10 par
value, 1,000 shares designated; no shares issued and
outstanding |
-- |
-- |
Common stock, $0.01 par value,
15,000,000 shares authorized; 9,181,793 shares issued,
respectively; 8,079,215 and 8,072,548 shares outstanding,
respectively |
92 |
92 |
Additional paid-in capital |
79,746 |
79,694 |
Accumulated other comprehensive
loss |
(154) |
(2,152) |
Treasury stock, at cost,
1,102,578 and 1,109,245 shares, respectively |
(10,243) |
(10,305) |
Retained earnings |
22,139 |
16,970 |
Total American Independence
Corp. stockholders' equity |
91,580 |
84,299 |
Non-controlling interest in
subsidiaries |
2,760 |
3,084 |
Total equity |
94,340 |
87,383 |
TOTAL LIABILITIES AND
EQUITY |
$ 165,781 |
$ 153,174 |
CONTACT: Loan Nisser
646-509-2107
www.americanindependencecorp.com
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