DERIDDER, La., May 9 /PRNewswire-FirstCall/ -- AMERISAFE, Inc.
(NASDAQ:AMSF) today announced results for the first quarter ended
March 31, 2006. Gross premiums written in the first quarter totaled
$80.8 million, an increase of 12.9 percent over gross premiums
written of $71.6 million for the first quarter of 2005. First
quarter revenues totaled $75.2 million, a 13.8 percent increase
over revenues of $66.0 million in the prior year period. Net
investment income increased to $6.0 million in the first quarter,
from $3.7 million for the same period last year. Net income in the
first quarter was $7.2 million compared to net income of $3.2
million in the 2005 first quarter, an increase of 124 percent. Net
income includes realized capital gains of $1.2 million (before tax)
in the first quarter of 2006 and $0.2 million (before tax) in the
first quarter of 2005. The Company's return on average equity for
the first quarter of 2006 was 19.1%, compared to 14.3% for the same
period in 2005. In anticipation of its initial public offering,
AMERISAFE effected a 72-for-one reverse stock split effective as of
October 27, 2005, reducing the number of then-outstanding shares of
common stock to 299,774 shares. On November 23, 2005, AMERISAFE
completed its initial public offering, issuing 8.0 million shares
of its common stock at $9.00 per share. Upon completion of the IPO,
holders of AMERISAFE's Series A preferred stock exchanged the
outstanding shares of this series of preferred stock for 9.1
million shares of common stock. As a result of the exchange of
Series A preferred stock for shares of the Company's common stock,
under the terms of our articles of incorporation, holders of the
Company's outstanding convertible preferred stock are no longer
entitled to receive dividends. At March 31, 2006, there were 17.4
million shares of common stock outstanding. In the first quarter of
2006, diluted earnings per share allocable to common shareholders
were $0.36, compared to $2.27 in the same period of 2005. Weighted
average diluted shares outstanding for the first quarter of 2006
were 17,607,277 shares compared to 299,774 shares in the first
quarter of 2005. The issuance of 17.1 million shares of common
stock in November 2005 (and the resulting calculation of weighted
average shares outstanding) and the elimination of the obligation
to pay preferred stock dividends will impact period-to-period
comparisons of our reported earnings per share for the remainder of
2006. The net combined ratio for the first quarter of 2006 was
95.0% compared to 98.6% for the same period in 2005. Loss and loss
adjustment expenses for the first quarter of 2006 totaled $47.9
million, or 70.5% of net premiums earned, compared to $45.9
million, or 74.2% of net premiums earned for the same period in
2005. Total underwriting expenses for the first quarter were $16.4
million, or 24.2% of net premiums earned, compared to $15.0
million, or 24.1% of net premiums earned, for the first quarter
2005. Underwriting expenses for the 2006 period were offset by $0.9
million for the Company's loss-based assessments accrual, due to
the reduction of the 2005 assessment rate from the South Carolina
Second Injury Fund. Commenting on these results, Allen Bradley,
AMERISAFE's Chairman, President and Chief Executive Officer,
stated, "We continued to experience healthy revenue growth during
the first quarter of 2006. Net premiums earned exceeded our
expectations in the first quarter and net investment income
continued to grow in line with our substantial increase in invested
assets. In the quarter, average loss severities were down, we
recorded no adverse prior year loss development and our pricing
levels held steady. Overall, we are very pleased with our first
quarter results and believe we are on track to meet our financial
objectives for the year." 2006 Outlook The Company is reaffirming
its guidance for the full year and presently expects gross premiums
written of between $317 million and $325 million, an increase of
between 9% and 12% over 2005 gross premiums written, a combined
ratio of less than 96 percent, and a return on average equity of
approximately 15 percent. AMERISAFE calculates return on average
equity by dividing net income by the average of shareholders'
equity plus redeemable preferred stock. Conference Call Information
AMERISAFE has scheduled a conference call for Wednesday, May 10,
2006, at 10:00 a.m. Eastern Time. To participate in the conference
call dial 303-262-2139 at least 10 minutes before the call begins
and ask for the AMERISAFE conference call. A replay of the call
will be available approximately two hours after the live broadcast
ends and will be accessible through May 24, 2006. To access the
replay, dial 303-590-3000 and use the pass code 11059059.
Investors, analysts and the general public will also have the
opportunity to listen to the conference call over the Internet by
visiting http://www.amerisafe.com/ . To listen to the live call on
the web, please visit the website at least fifteen minutes before
the call begins to register, download and install any necessary
audio software. For those who cannot listen to the live webcast, an
archive will be available shortly after the call and will remain
available for approximately 60 days at http://www.amerisafe.com/ .
About AMERISAFE AMERISAFE, Inc. is a specialty provider of workers'
compensation insurance focused on small to mid-sized employers
engaged in hazardous industries, principally construction,
trucking, logging, agriculture, oil and gas, maritime and sawmills.
AMERISAFE actively markets workers' compensation insurance in 27
states and the District of Columbia. Statements made in this press
release that are not historical facts, including statements
accompanied by words such as "will," "believe," anticipate,"
"expect," estimate," or similar words are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 regarding AMERISAFE's plans and performance.
These statements are based on management's estimates, assumptions
and projections as of the date of this release and are not
guarantees of future performance. Actual results may differ
materially from the results expressed or implied in these
statements as the results of risks, uncertainties and other factors
including, but not limited to, the factors set forth in the
Company's filings with the Securities and Exchange Commission,
including AMERISAFE's Annual Report on Form 10-K for the year ended
December 31, 2005. AMERISAFE cautions you not to place undue
reliance on the forward-looking statements contained in this
release. AMERISAFE does not undertake any obligation to publicly
update or revise any forward-looking statements to reflect future
events, information or circumstances that arise after the date of
this release. - Tables to follow - AMERISAFE, INC. AND SUBSIDIARIES
Consolidated Statements of Income (in thousands, except share and
per share amounts) Three Months Ended March 31, 2006 2005
(unaudited) Revenues Gross premiums written $80,819 $71,575 Ceded
premiums written (4,451) (4,835) Net premiums written $76,368
$66,740 Net premiums earned $67,874 $61,917 Net investment income
5,973 3,718 Net realized gains on investments 1,154 227 Fee and
other income 157 162 Total revenues 75,158 66,024 Expenses Loss and
loss adjustment expenses incurred 47,871 45,918 Underwriting and
other operating costs 16,430 14,950 Interest expense 813 640
Policyholder dividends 171 171 Total expenses 65,285 61,679 Income
before taxes 9,873 4,345 Income tax expense 2,637 1,108 Net income
7,236 3,237 Preferred dividends --- (2,339) Net income available to
common shareholders $7,236 $898 AMERISAFE, INC. AND SUBSIDIARIES
Consolidated Statements of Income (cont.) (in thousands, except
share and per share amounts) Three Months Ended March 31, 2006 2005
(unaudited) Basic EPS: Net income available to common shareholders
$7,236 $898 Portion allocable to common shareholders 87.7% 75.9%
Net income allocable to common shareholders $6,346 $681 Basic
weighted average common shares 17,420,722 299,774 Basic earnings
per share $0.36 $2.27 Diluted EPS: Net income allocable to common
shareholders $6,346 $681 Diluted weighted average common shares:
Weighted average common shares 17,420,722 299,774 Stock options
179,492 --- Restricted stock 7,063 --- Diluted weighted average
common shares 17,607,277 299,774 Diluted earnings per common share
$0.36 $2.27 AMERISAFE, INC. AND SUBSIDIARIES Consolidated Balance
Sheets (in thousands) March 31, December 31, 2006 2005 (unaudited)
Assets Investments $555,934 $533,618 Cash and cash equivalents
44,833 49,286 Amounts recoverable from reinsurers 123,818 122,562
Premiums receivable, net 130,610 123,934 Deferred income taxes
23,020 22,413 Deferred policy acquisition costs 17,998 16,973
Deferred charges 3,649 3,182 Other assets 22,338 20,352 $922,200
$892,320 Liabilities, redeemable preferred stock and shareholders'
equity Liabilities: Reserves for loss and loss adjustment expenses
$493,985 $484,485 Unearned premiums 133,018 124,524
Insurance-related assessments 37,271 35,135 Subordinated debt
securities 36,090 36,090 Other liabilities 65,652 64,740 Redeemable
preferred stock 50,000 50,000 Total shareholders' equity 106,184
97,346 Total liabilities, redeemable preferred stock and
shareholders' equity $922,200 $892,320 AMERISAFE, INC. AND
SUBSIDIARIES Selected Insurance Ratios Three Months Ended March 31,
2006 2005 (unaudited) Current accident year loss ratio (A) 70.5%
69.8% Prior accident year loss ratio (B) 0.0% 4.4% Net loss ratio
70.5% 74.2% Net underwriting expense ratio (C) 24.2% 24.1% Net
dividend ratio (D) 0.3% 0.3% Net combined ratio (E) 95.0% 98.6% (A)
The current accident year loss ratio is calculated by dividing loss
and loss adjustment expenses incurred for the current accident year
by the current year's net premiums earned. (B) The prior accident
year loss ratio is calculated by dividing the change in loss and
loss adjustment expenses incurred for prior accident years by the
current year's net premiums earned. (C) The net underwriting
expense ratio is calculated by dividing underwriting and certain
other operating costs by the current year's net premiums earned.
(D) The net dividend ratio is calculated by dividing policyholder
dividends by the current year's net premiums earned. (E) The net
combined ratio is the sum of the net loss ratio, the net
underwriting expense ratio and the net dividend ratio. Contacts:
Geoff Banta, EVP & CFO AMERISAFE, Inc. 337-463-9052 Ken
Dennard, Managing Partner Karen Roan, Sr. VP DRG&E /
713-529-6600 DATASOURCE: AMERISAFE, Inc. CONTACT: Geoff Banta, EVP
& CFO of AMERISAFE, Inc., +1-337-463-9052; or Ken Dennard,
Managing Partner, or Karen Roan, Sr. VP, both of DRG&E,
+1-713-529-6600, for AMERISAFE, Inc. Web site:
http://www.amerisafe.com/
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