HCI Group, Inc. (NYSE:HCI), a holding company with
operations in homeowners insurance, information technology
services, real estate, and reinsurance, reported a net loss of
$51.5 million, or $5.66 loss per share, in the third quarter of
2022 compared with net loss of $4.9 million, or $0.72 loss per
share, in the third quarter of 2021. Adjusted net loss (a non-GAAP
measure which excludes net unrealized gains or losses on equity
securities) was $51.2 million, or $5.62 loss per share, in the
third quarter of 2022 compared with adjusted net loss of $3.5
million, or $0.64 loss per share, in the third quarter of 2021.
This press release includes an explanation of adjusted net income
as well as a reconciliation to net income and earnings per share
calculated in accordance with generally accepted accounting
principles (known as “GAAP”).
Management Commentary “Our deepest
sympathies go out to those who have been impacted by Hurricane
Ian,” said HCI Group Chairman and Chief Executive Officer Paresh
Patel. “We responded swiftly to the storm, marshaling the resources
of our entire organization. Our execution highlights the
investments we’ve made in technology and our ability to deliver on
our commitment to policyholders.”
“Claims from Ian remain consistent with views we
disclosed in October. We have adequate reinsurance to cover Ian
claims and liquidity to support our business and growth plans.
Excluding Ian, our insurance divisions produced solid results this
quarter as gross premiums grew more than 20% and our gross loss
ratio improved to 41.4%, a decline of 6.5 points from second
quarter 2022. Ian underscores the value of homeowners insurance and
the importance of a healthy insurance industry.”
Third Quarter 2022
CommentaryConsolidated gross written premiums of $191.2
million increased from $174.3 million in the third quarter of 2021.
Homeowners Choice gross written premiums of $119.4 million
increased from $118.3 million. TypTap Insurance Company gross
written premiums grew to $71.8 million from $56.0 million.
Consolidated gross premiums earned of $181.7
million increased 21.3% from $149.8 million in the third quarter of
2021. Homeowners Choice gross premiums earned grew to $99.0 million
from $98.3 million, and TypTap gross premiums earned grew to $82.7
million from $51.5 million.
Premiums ceded for reinsurance of $74.7 million
increased from $55.6 million in the third quarter of 2021 primarily
due to the growth of both Homeowners Choice and TypTap and a $12.6
million adjustment to reduce benefits under a multi-year
reinsurance contract with retrospective provisions as a result of
Hurricane Ian. Ceded premiums represented 41.1% and 37.1% of gross
premiums earned in the third quarters of 2022 and 2021,
respectively.
Net investment income of $18.5 million increased
from $2.5 million in the third quarter of 2021. The increase was
due to a net gain of $13.4 million on the sale of a portion of one
of the properties in our Greenleaf portfolio as well as an increase
in interest income from available-for-sale fixed maturity
securities.
Losses and loss adjustment expenses of $139.8
million increased from $62.7 million in the same period of 2021.
The increase in losses and loss adjustment expenses was primarily
due to Hurricane Ian. Excluding the impact of Hurricane Ian, losses
and loss adjustment expenses were $75.2 million, or 41.4% of gross
premiums earned, in the third quarter of 2022 down from $86.8
million, or 47.9% of gross premiums earned, in the second quarter
of 2022.
Policy acquisition and other underwriting expenses
of $24.7 million increased from $23.3 million in the same quarter
of 2021 but declined from 15.6% of gross premiums earned to 13.6%
reflecting lower commission rates at TypTap.
General and administrative personnel expenses of
$15.8 million increased from $11.5 million for the third quarter of
2021 due to an increase in personnel and related expenses in
connection with the growth of the business including higher
stock-based compensation.
Year-to-Date 2022 Results For the
nine months ended September 30, 2022, the company reported a net
loss of $57.3 million, or $6.26 loss per share, compared with net
income of $5.8 million, or $0.22 diluted earnings per share, for
the nine months ended September 30, 2021. Adjusted net loss (a
non-GAAP measure which excludes net unrealized gains or losses on
equity securities) for the nine-month period was $49.1 million, or
$5.42 loss per share compared with adjusted net income of $6.3
million, or $0.15 diluted earnings per share, in the same period of
2021. An explanation of this non-GAAP financial measure and
reconciliations to the applicable GAAP numbers accompany this press
release.
Consolidated gross written premiums of $554.6
million increased 14.3% from $485.1 million in the nine months
ended September 30, 2021. Homeowners Choice gross written premiums
were $323.7 million compared with $323.5 million. TypTap Insurance
Company gross written premiums grew to $230.9 million from $161.6
million. The increase was primarily due to the UPC quota share
arrangements and organic growth.
Consolidated gross premiums earned of $541.8
million increased 28.9% from $420.2 million in the nine months
ended September 30, 2021. Homeowners Choice gross premiums earned
grew to $331.0 million from $300.8 million, and TypTap gross
premiums earned grew to $210.8 million from $119.4 million.
Premiums ceded for reinsurance of $184.1 million
increased from $145.1 million in the first nine months of 2021
primarily due to the growth of both Homeowners Choice and TypTap
and a $12.6 million adjustment to reduce benefits under a
multi-year reinsurance contract with retrospective provisions as a
result of Hurricane Ian. Ceded premiums declined as a percentage of
gross premiums earned from 34.5% to 34.0% in the first nine months
of 2022.
Net investment income of $25.1 million increased
from $9.7 million in the nine months ended September 30, 2021. The
increase was due to a net gain of $13.4 million on the sale of a
portion of one of the properties in our Greenleaf portfolio as well
as an increase in interest income from available-for-sale fixed
maturity securities.
Net realized and unrealized investment losses were
$9.4 million compared with net realized and unrealized investment
gains of $4.3 million in the nine months ended September 30, 2021.
The decrease was attributable to an overall decline in the market
for equity securities compared with the nine months ended September
30, 2021.
Losses and loss adjustment expenses of $299.3
million increased from $164.3 million in the nine months ended
September 30, 2021. The increase in losses and loss adjustment
expenses was due to Hurricane Ian, TypTap’s growing premium base,
policies assumed or renewed from United Property & Casualty
Insurance Company as well as prior year loss development.
Policy acquisition and other underwriting expenses
of $80.9 million increased from $69.6 million in the nine months
ended September 30, 2021 but declined from 16.6% of gross premiums
earned to 14.9% reflecting lower commission rates at TypTap.
General and administrative personnel expenses of
$45.2 million increased from $31.7 million in the nine months ended
September 30, 2021 due to an increase in personnel and related
expenses in connection with the growth of the business including
higher stock-based compensation.
Conference CallHCI Group will hold
a conference call later today, November 8, 2022, to discuss these
financial results. Chairman and Chief Executive Officer Paresh
Patel, Chief Operating Officer Karin Coleman and Chief Financial
Officer Mark Harmsworth will host the call starting at 4:45 p.m.
Eastern time.
Interested parties can listen to the live
presentation by dialing the listen-only number below or by clicking
the webcast link available on the Investor Information section of
the company's website at www.hcigroup.com.
Listen-only toll-free number: (877)
545-0523Listen-only international number: (973) 528-0016 Entry
Code: 135686
Please call the conference telephone number 10
minutes before the start time. An operator will register your name
and organization. If you have any difficulty connecting with the
conference call, please contact Gateway Investor Relations at (949)
574-3860.
A replay of the call will be available by telephone
after 8:00 p.m. Eastern time on the same day as the call and via
the Investor Information section of the HCI Group website at
www.hcigroup.com through November 8, 2023.
Toll-free replay number: (877)
481-4010International replay number: (919) 882-2331 Replay ID:
46792
About HCI Group, Inc.HCI Group,
Inc. owns subsidiaries engaged in diverse, yet complementary
business activities, including homeowners insurance, reinsurance,
real estate and information technology services. HCI’s leading
insurance operation, TypTap Insurance Company, is a rapidly
growing, technology-driven insurance company that is expanding
nationwide to provide homeowners and flood insurance. TypTap’s
operations are powered in large part by insurance-related
information technology developed by HCI’s software subsidiary,
Exzeo USA, Inc. HCI’s largest subsidiary, Homeowners Choice
Property & Casualty Insurance Company, Inc., provides
homeowners’ insurance primarily in Florida. HCI’s real estate
subsidiary, Greenleaf Capital, LLC, owns and operates multiple
properties in Florida, including office buildings, retail centers
and marinas.
The company's common shares trade on the New York
Stock Exchange under the ticker symbol "HCI" and are included in
the Russell 2000 and S&P SmallCap 600 Index. HCI Group, Inc.
regularly publishes financial and other information in the Investor
Information section of the company’s website. For more information
about HCI Group and its subsidiaries, visit www.hcigroup.com.
Forward-Looking StatementsThis
news release may contain forward-looking statements made pursuant
to the Private Securities Litigation Reform Act of 1995. Words such
as "anticipate," "estimate," "expect," "intend," "plan,"
"confident," "prospects" and "project" and other similar words and
expressions are intended to signify forward-looking statements.
Forward-looking statements are not guarantees of future results and
conditions, but rather are subject to various risks and
uncertainties. For example, the estimation of reserves for losses
and loss adjustment expenses is an inherently imprecise process
involving many assumptions and considerable management judgment.
Some of these risks and uncertainties are identified in the
company's filings with the Securities and Exchange Commission.
Should any risks or uncertainties develop into actual events, these
developments could have material adverse effects on the company's
business, financial condition and results of operations. HCI Group,
Inc. disclaims all obligations to update any forward-looking
statements.
Company Contact:Simon
RosenbergInvestor RelationsHCI Group, Inc.Tel (813)
405-5261srosenberg@hcigroup.com
Investor Relations Contact:Matt
GloverGateway Group, Inc.Tel (949) 574-3860HCI@gatewayir.com
- Tables to follow -
HCI GROUP, INC. AND
SUBSIDIARIESSelected Financial
Metrics(Dollar amounts in thousands, except per
share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2022 |
|
|
Q2 2022 |
|
|
Q1 2022 |
|
|
FY 2021 |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|
|
|
Insurance
Operations |
|
|
|
|
|
|
|
|
|
|
|
Gross Written Premiums: |
|
|
|
|
|
|
|
|
|
|
|
Homeowners Choice |
$ |
119,400 |
|
|
$ |
113,139 |
|
|
$ |
91,141 |
|
|
$ |
426,910 |
|
TypTap Insurance Company |
|
71,781 |
|
|
|
73,013 |
|
|
|
86,153 |
|
|
|
247,479 |
|
Total Gross Written Premiums |
|
191,181 |
|
|
|
186,152 |
|
|
|
177,294 |
|
|
|
674,389 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Premiums Earned: |
|
|
|
|
|
|
|
|
|
|
|
Homeowners Choice |
|
98,985 |
|
|
|
113,681 |
|
|
|
118,303 |
|
|
|
401,137 |
|
TypTap Insurance Company |
|
82,728 |
|
|
|
67,443 |
|
|
|
60,622 |
|
|
|
175,907 |
|
Total Gross Premiums Earned |
|
181,713 |
|
|
|
181,124 |
|
|
|
178,925 |
|
|
|
577,044 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Premiums Earned Loss
Ratio |
|
76.9 |
% |
|
|
47.9 |
% |
|
|
40.6 |
% |
|
|
39.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Per Share
Metrics |
|
|
|
|
|
|
|
|
|
|
|
GAAP Diluted EPS |
$ |
(5.66 |
) |
|
$ |
(1.04 |
) |
|
$ |
0.09 |
|
|
$ |
0.21 |
|
Non-GAAP Adjusted Diluted
EPS |
$ |
(5.62 |
) |
|
$ |
(0.71 |
) |
|
$ |
0.34 |
|
|
$ |
0.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per share |
$ |
0.40 |
|
|
$ |
0.40 |
|
|
$ |
0.40 |
|
|
$ |
1.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per share at the end
of period |
$ |
19.52 |
|
|
$ |
26.39 |
|
|
$ |
31.66 |
|
|
$ |
31.92 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding at the end
of period |
|
8,926,845 |
|
|
|
9,047,972 |
|
|
|
10,125,927 |
|
|
|
10,131,399 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HCI GROUP, INC.
AND SUBSIDIARIESConsolidated Balance
Sheets (Dollar
amounts in thousands)
|
|
|
|
|
|
September 30, 2022 |
|
|
December 31, 2021 |
|
(Unaudited) |
|
|
|
Assets |
|
|
|
|
Fixed-maturity securities, available for sale, at fair value
(amortized cost: $371,877 and $41,953, respectively and allowance
for credit losses: $0 and $0, respectively) |
$ |
360,639 |
|
|
$ |
42,583 |
Equity securities, at fair value
(cost: $36,639 and $46,276, respectively) |
|
33,946 |
|
|
|
51,740 |
Limited partnership
investments |
|
25,405 |
|
|
|
28,133 |
Investment in unconsolidated
joint venture, at equity |
|
18 |
|
|
|
363 |
Real estate investments |
|
71,500 |
|
|
|
73,896 |
Total investments |
|
491,508 |
|
|
|
196,715 |
|
|
|
|
|
Cash and cash equivalents |
|
355,699 |
|
|
|
628,943 |
Restricted cash |
|
2,900 |
|
|
|
2,400 |
Accrued interest and dividends
receivable |
|
2,032 |
|
|
|
353 |
Income taxes receivable |
|
8,134 |
|
|
|
4,084 |
Premiums receivable, net
(allowance: $4,573 and $1,750, respectively) |
|
51,762 |
|
|
|
68,157 |
Prepaid reinsurance premiums |
|
104,539 |
|
|
|
26,355 |
Reinsurance recoverable, net
of allowance for credit losses: |
|
|
|
|
Paid losses and loss adjustment expenses (allowance: $0 and $0,
respectively) |
|
14,592 |
|
|
|
11,985 |
Unpaid losses and loss adjustment expenses (allowance: $451 and
$90, respectively) |
|
938,404 |
|
|
|
64,665 |
Deferred policy acquisition
costs |
|
48,258 |
|
|
|
57,695 |
Property and equipment, net |
|
17,749 |
|
|
|
14,232 |
Right-of-use-assets - operating
leases |
|
1,597 |
|
|
|
2,204 |
Intangible assets, net |
|
13,651 |
|
|
|
10,636 |
Funds withheld for assumed
business |
|
67,313 |
|
|
|
73,716 |
Other assets |
|
26,605 |
|
|
|
14,717 |
|
|
|
|
|
Total assets |
$ |
2,144,743 |
|
|
$ |
1,176,857 |
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
Losses and loss adjustment
expenses |
$ |
1,201,842 |
|
|
$ |
237,165 |
Unearned premiums |
|
379,609 |
|
|
|
366,744 |
Advance premiums |
|
28,672 |
|
|
|
13,771 |
Reinsurance payable on paid
losses and loss adjustment expenses |
|
3,046 |
|
|
|
4,017 |
Ceded reinsurance premiums
payable |
|
— |
|
|
|
19,318 |
Accrued expenses |
|
18,788 |
|
|
|
15,453 |
Deferred income taxes, net |
|
1,705 |
|
|
|
11,739 |
Revolving credit facility |
|
— |
|
|
|
15,000 |
Long-term debt |
|
211,667 |
|
|
|
45,504 |
Lease liabilities - operating
leases |
|
1,539 |
|
|
|
2,203 |
Other liabilities |
|
33,453 |
|
|
|
31,485 |
|
|
|
|
|
Total liabilities |
|
1,880,321 |
|
|
|
762,399 |
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
Redeemable noncontrolling
interest |
|
91,248 |
|
|
|
89,955 |
|
|
|
|
|
Equity: |
|
|
|
|
Common stock, (no par value, 40,000,000 shares authorized,
8,926,845 and 10,131,399shares issued and outstanding at September
30, 2022 and December 31, 2021, respectively) |
|
— |
|
|
|
— |
Additional paid-in capital |
|
9,969 |
|
|
|
76,077 |
Retained income |
|
175,056 |
|
|
|
246,790 |
Accumulated other comprehensive (loss) income, net of taxes |
|
(10,795 |
) |
|
|
498 |
Total stockholders' equity |
|
174,230 |
|
|
|
323,365 |
Noncontrolling interests |
|
(1,056 |
) |
|
|
1,138 |
Total equity |
|
173,174 |
|
|
|
324,503 |
|
|
|
|
|
Total liabilities, redeemable noncontrolling interest, and
equity |
$ |
2,144,743 |
|
|
$ |
1,176,857 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HCI GROUP, INC. AND
SUBSIDIARIESConsolidated Statements of
Income(Unaudited)(Dollar amounts
in thousands, except per share amounts)
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
September 30, |
|
|
September 30, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross premiums earned |
$ |
181,713 |
|
|
$ |
149,809 |
|
|
$ |
541,762 |
|
|
$ |
420,191 |
|
Premiums ceded |
|
(74,741 |
) |
|
|
(55,577 |
) |
|
|
(184,108 |
) |
|
|
(145,112 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums earned |
|
106,972 |
|
|
|
94,232 |
|
|
|
357,654 |
|
|
|
275,079 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
18,530 |
|
|
|
2,520 |
|
|
|
25,082 |
|
|
|
9,749 |
|
Net realized investment (losses)
gains |
|
(884 |
) |
|
|
1,232 |
|
|
|
(1,204 |
) |
|
|
4,952 |
|
Net unrealized investment
losses |
|
(347 |
) |
|
|
(1,869 |
) |
|
|
(8,157 |
) |
|
|
(649 |
) |
Policy fee income |
|
1,071 |
|
|
|
1,000 |
|
|
|
3,180 |
|
|
|
2,962 |
|
Other |
|
1,312 |
|
|
|
2,102 |
|
|
|
3,065 |
|
|
|
3,502 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue |
|
126,654 |
|
|
|
99,217 |
|
|
|
379,620 |
|
|
|
295,595 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and loss adjustment
expenses |
|
139,794 |
|
|
|
62,664 |
|
|
|
299,328 |
|
|
|
164,332 |
|
Policy acquisition and other
underwriting expenses |
|
24,678 |
|
|
|
23,340 |
|
|
|
80,949 |
|
|
|
69,574 |
|
General and administrative
personnel expenses |
|
15,848 |
|
|
|
11,537 |
|
|
|
45,183 |
|
|
|
31,733 |
|
Interest expense |
|
2,813 |
|
|
|
1,664 |
|
|
|
4,929 |
|
|
|
5,743 |
|
Debt conversion expense |
|
— |
|
|
|
1,273 |
|
|
|
— |
|
|
|
1,273 |
|
Other operating expenses |
|
7,123 |
|
|
|
5,243 |
|
|
|
20,392 |
|
|
|
14,245 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses |
|
190,256 |
|
|
|
105,721 |
|
|
|
450,781 |
|
|
|
286,900 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income
taxes |
|
(63,602 |
) |
|
|
(6,504 |
) |
|
|
(71,161 |
) |
|
|
8,695 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit) expense |
|
(12,099 |
) |
|
|
(1,636 |
) |
|
|
(13,907 |
) |
|
|
2,888 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
$ |
(51,503 |
) |
|
$ |
(4,868 |
) |
|
$ |
(57,254 |
) |
|
$ |
5,807 |
|
Net income attributable to redeemable noncontrolling interest |
|
(2,285 |
) |
|
|
(2,202 |
) |
|
|
(6,801 |
) |
|
|
(5,175 |
) |
Net loss attributable to noncontrolling interests |
|
2,829 |
|
|
|
833 |
|
|
|
4,018 |
|
|
|
1,196 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income after noncontrolling interests |
$ |
(50,959 |
) |
|
$ |
(6,237 |
) |
|
$ |
(60,037 |
) |
|
$ |
1,828 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings per share |
$ |
(5.66 |
) |
|
$ |
(0.72 |
) |
|
$ |
(6.26 |
) |
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss) earnings per share |
$ |
(5.66 |
) |
|
$ |
(0.72 |
) |
|
$ |
(6.26 |
) |
|
$ |
0.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per share |
$ |
0.40 |
|
|
$ |
0.40 |
|
|
$ |
1.20 |
|
|
$ |
1.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HCI GROUP, INC. AND
SUBSIDIARIES(Amounts in thousands, except per share
amounts)
A summary of the numerator and denominator of basic
and diluted earnings (loss) per common share calculated in
accordance with GAAP is presented below.
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
GAAP |
September 30, 2022 |
|
|
September 30, 2022 |
|
|
Loss |
|
|
Shares (a) |
|
Per Share |
|
|
Loss |
|
|
Shares (a) |
|
Per Share |
|
|
(Numerator) |
|
|
(Denominator) |
|
Amount |
|
|
(Numerator) |
|
|
(Denominator) |
|
Amount |
|
Net loss |
$ |
(51,503 |
) |
|
|
|
|
|
|
$ |
(57,254 |
) |
|
|
|
|
|
Less: Net income attributable to
redeemable noncontrolling interest |
|
(2,285 |
) |
|
|
|
|
|
|
|
(6,801 |
) |
|
|
|
|
|
Less: TypTap Group's net loss
attributable to non-HCI common stockholders and TypTap Group's
participating securities |
|
2,829 |
|
|
|
|
|
|
|
|
4,018 |
|
|
|
|
|
|
Net loss attributable to HCI |
|
(50,959 |
) |
|
|
|
|
|
|
|
(60,037 |
) |
|
|
|
|
|
Less: Loss attributable to
participating securities |
|
3,289 |
|
|
|
|
|
|
|
|
3,855 |
|
|
|
|
|
|
Basic Loss Per
Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss allocated to common stockholders |
|
(47,670 |
) |
|
|
8,427 |
|
$ |
(5.66 |
) |
|
|
(56,182 |
) |
|
|
8,972 |
|
$ |
(6.26 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of Dilutive
Securities:* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options |
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
Convertible senior notes |
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
Warrants |
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Loss Per
Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss available to common
stockholders and assumed conversions |
$ |
(47,670 |
) |
|
|
8,427 |
|
$ |
(5.66 |
) |
|
$ |
(56,182 |
) |
|
|
8,972 |
|
$ |
(6.26 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Shares in
thousands. |
|
* For the three and
nine months ended September 30, 2022, convertible senior notes,
stock options, and warrants were excluded due to anti-dilutive
effect. |
|
|
|
|
|
Non-GAAP Financial Measures
Adjusted net income (loss) is a Non-GAAP financial
measure that removes from net income (loss) of HCI's portion of the
effect of unrealized gains or losses on equity securities required
to be included in results of operations in accordance with
Accounting Standards Codification 321. HCI Group believes net
income without the effect of volatility in equity prices more
accurately depicts operating results. This financial measurement is
not recognized in accordance with accounting principles generally
accepted in the United States of America ("GAAP") and should not be
viewed as an alternative to GAAP measures of performance. A
reconciliation of GAAP Net income (loss) to Non-GAAP Adjusted net
income (loss) and GAAP diluted earnings (loss) per share to
Non-GAAP Adjusted diluted earnings (loss) per share is provided
below.
Reconciliation of GAAP Net Loss to Non-GAAP
Adjusted Net Loss
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, 2022 |
|
September 30, 2022 |
GAAP Net loss |
|
|
|
$ |
(51,503 |
) |
|
|
|
|
$ |
(57,254 |
) |
Net unrealized investment
losses |
$ |
347 |
|
|
|
|
$ |
8,157 |
|
|
|
Less: Tax effect at 0%* |
$ |
- |
|
|
|
|
$ |
- |
|
|
|
Net adjustment to Net loss |
|
|
|
$ |
347 |
|
|
|
|
|
$ |
8,157 |
|
Non-GAAP Adjusted Net loss |
|
|
|
$ |
(51,156 |
) |
|
|
|
|
$ |
(49,097 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
*A valuation
allowance was established at September 30, 2022 for the deferred
tax benefits related to the 2022 pre-tax loss due to the impacts of
Hurricane Ian. Consequently, there is no tax effect for net
unrealized losses. |
|
|
HCI GROUP, INC. AND
SUBSIDIARIES(Amounts in thousands, except per share
amounts)
A summary of the numerator and denominator of the
basic and diluted earnings (loss) per common share calculated with
the Non-GAAP financial measure Adjusted net income (loss) is
presented below.
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
Non-GAAP |
September 30, 2022 |
|
|
September 30, 2022 |
|
|
Loss |
|
|
Shares (a) |
|
Per Share |
|
|
Loss |
|
|
Shares (a) |
|
Per Share |
|
|
(Numerator) |
|
|
(Denominator) |
|
Amount |
|
|
(Numerator) |
|
|
(Denominator) |
|
Amount |
|
Adjusted net loss (non-GAAP) |
$ |
(51,156 |
) |
|
|
|
|
|
|
$ |
(49,097 |
) |
|
|
|
|
|
Less: Net Income attributable to
redeemable noncontrolling interest |
|
(2,285 |
) |
|
|
|
|
|
|
|
(6,801 |
) |
|
|
|
|
|
Less: TypTap Group's net loss
attributable to non-HCI common stockholders and TypTap Group's
participating securities |
|
2,812 |
|
|
|
|
|
|
|
|
3,967 |
|
|
|
|
|
|
Net loss attributable to HCI |
|
(50,629 |
) |
|
|
|
|
|
|
|
(51,931 |
) |
|
|
|
|
|
Less: Loss attributable to
participating securities |
|
3,267 |
|
|
|
|
|
|
|
|
3,337 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Loss Per Share
before unrealized gains/losses on equity securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss allocated to common stockholders |
|
(47,362 |
) |
|
|
8,427 |
|
$ |
(5.62 |
) |
|
|
(48,594 |
) |
|
|
8,972 |
|
$ |
(5.42 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of Dilutive
Securities:* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options |
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
Convertible senior notes |
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
Warrants |
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Loss Per Share
before unrealized gains/losses on equity securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss available to common
stockholders and assumed conversions |
$ |
(47,362 |
) |
|
$ |
8,427 |
|
$ |
(5.62 |
) |
|
$ |
(48,594 |
) |
|
$ |
8,972 |
|
$ |
(5.42 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Shares in
thousands. |
|
* For the three and
nine months ended September 30, 2022, convertible senior notes,
stock options, and warrants were excluded due to anti-dilutive
effect. |
|
|
|
|
|
Reconciliation of GAAP Diluted EPS to
Non-GAAP Adjusted Diluted EPS
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, 2022 |
|
September 30, 2022 |
GAAP diluted Loss Per Share |
|
|
$ |
(5.66 |
) |
|
|
|
$ |
(6.26 |
) |
Net unrealized investment
losses |
$ |
0.04 |
|
|
|
|
$ |
0.84 |
|
|
|
Less: Tax effect at 0%* |
$ |
- |
|
|
|
|
$ |
- |
|
|
|
Net adjustment to GAAP diluted
EPS |
|
|
$ |
0.04 |
|
|
|
|
$ |
0.84 |
|
Non-GAAP Adjusted diluted
EPS |
|
|
$ |
(5.62 |
) |
|
|
|
$ |
(5.42 |
) |
|
|
|
|
|
|
|
|
|
|
*A valuation
allowance was established at September 30, 2022 for the deferred
tax benefits related to the 2022 pre-tax loss due to the impacts of
Hurricane Ian. Consequently, there is no tax effect for net
unrealized losses. |
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