AssuranceAmerica Corporation Reports Record Mid-Year Results
Monday August 15, 5:51 pm ET
ATLANTA--(BUSINESS WIRE)--Aug. 15, 2005--Atlanta based ASSURANCEAMERICA CORPORATION (OTC BB: ASAM.OB - News), announced today its financial results for the second quarter and six months ended June 30, 2005.
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Revenues for the second quarter increased 37% to $8.1 million, compared to $5.9 million for the second quarter of 2004. Net income increased 193% for the second quarter of 2005 to $117,607, compared to ($126,001) in the second quarter of 2004. Pretax earnings for the second quarter were $324,204 compared to ($126,001) in the prior year.
Revenues for the six months of 2005 increased 33% to $16.0 million, compared with $12.0 million for the first half of 2004. The Company increased net income 717% for the first half of 2005 to $815,717, compared with $99,769, in the same period last year. Pretax earnings for the six months increased to $1,068,917 from $99,769.
In announcing first quarter results, Lawrence (Bud) Stumbaugh, President and CEO of AssuranceAmerica Corporation said, "Our strategy of entering additional states to enhance our premium growth has paid off handsomely as demonstrated by our six-month increase of 33%. Our loss ratios have shown significant improvement, from 79% to 66% year to date. This coupled with attention to cost control and other economies that come with volume, were the primary drivers of our outstanding results. Our plan is to continue to enter more states before the end of this year. We continue to expect record sales and profits."
AssuranceAmerica focuses on the specialty automobile insurance marketplace, primarily in Florida, Georgia, Alabama and South Carolina. Its principal operating subsidiaries are TrustWay Insurance Agencies, which sells personal automobile insurance policies through its 32 retail agencies, AssuranceAmerica Managing General Agency, and AssuranceAmerica Insurance Company.
This press release includes statements that may constitute "forward-looking" statements. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements, as discussed in the Company's filings with the U.S. Securities Exchange Commission (SEC).
ASSURANCEAMERICA CORPORATION
(Unaudited) CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Six Months Ended June 30, 2005 and 2004
Three Months Six Months
2005 2004 2005 2004
----------- ----------- ------------ ------------
Revenue:
Gross premiums
written $9,813,137 $7,833,482 $20,577,382 $16,337,206
Gross premiums ceded(6,689,559) (5,347,469) (14,021,473) (11,185,886)
Net premiums
written 3,123,578 2,486,013 6,555,909 5,151,320
Increase in
unearned premiums,
net of prepaid
reinsurance
premiums (200,048) (176,023) (1,034,069) (912,935)
Net premiums earned 2,923,530 2,309,990 5,521,840 4,238,385
Commission income 3,900,409 2,564,250 7,768,288 5,554,880
Managing general
agent fees 1,156,896 869,885 2,225,631 1,692,934
Net investment
income 25,642 8,078 38,833 11,052
Other fee income 137,585 192,490 396,420 493,249
----------- ----------- ------------ ------------
Total revenue 8,144,062 5,944,693 15,951,012 11,990,500
Expenses:
Losses and loss
adjustment
expenses 1,946,677 1,836,313 3,648,453 3,331,957
Selling, general
and
administrative 5,635,824 4,032,146 10,754,547 8,147,263
Depreciation and
amortization
expense 93,497 60,300 185,739 127,877
Interest expense 143,857 141,935 293,356 283,634
----------- ----------- ------------ ------------
Total operating
expenses 7,819,855 6,070,694 14,882,095 11,890,731
----------- ----------- ------------ ------------
Income (loss) before
provision for income
tax expense 324,207 (126,001) 1,068,917 99,769
Income tax provision -- -- -- --
----------- ----------- ------------ ------------
Net income (loss) 324,207 (126,001) 1,068,917 99,769
----------- ----------- ------------ ------------
Dividends on
preferred stock 206,600 -- 253,200 --
----------- ----------- ------------ ------------
Net income (loss)
attributable to
common stockholders $117,607 $(126,001) $815,717 $99,769
=========== =========== ============ ============
Earnings per common
share
Basic 0.002 (0.003) 0.016 0.002
Diluted 0.002 (0.003) 0.013 0.002
Weighted average
shares outstanding-
basic 50,425,540 45,211,090 50,055,469 45,211,090
Weighted average
shares outstanding-
diluted 63,565,805 45,211,090 63,195,734 46,182,909
ASSURANCEAMERICA CORPORATION
(Unaudited) CONSOLIDATED BALANCE SHEETS
June 30, 2005 and December 31, 2004
June 30, December 31,
2005 2004
------------ ------------
Assets
Cash and cash equivalents $11,928,137 $7,059,188
Short term investments 800,000 400,000
Long term investments 599,808 599,808
Investment income due and accrued 8,412 734
Receivables from insureds 7,347,270 5,170,840
Reinsurance recoverable (including $4,070,051
and $3,084,838 on paid losses) 12,624,692 10,543,775
Prepaid reinsurance premiums 7,645,782 5,291,830
Deferred acquisition costs 280,382 224,842
Property and equipment (net of accumulated
depreciation of $1,214,872 and $1,094,131) 1,306,721 1,185,081
Due from related party - 30,783
Other receivables 1,284,077 245,677
Prepaid expenses 371,883 52,260
Intangibles (net of accumulated amortization
of $1,263,394 and $1,198,396) 7,494,791 5,399,789
Security deposits 75,043 89,158
------------ ------------
Total assets $51,766,998 $36,293,765
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Liabilities and Stockholders' Equity
Accounts payable and accrued expenses $3,854,322 $2,904,640
Unearned premiums 11,221,209 7,833,189
Unpaid losses and loss adjustment expenses 12,220,916 10,655,625
Reinsurance payable 8,022,798 4,936,933
Provisional commission reserve 1,146,901 1,060,883
Debt, related party 6,545,644 7,376,279
Capital lease obligations 265,545 265,545
------------ ------------
Total liabilities 43,277,335 35,033,094
------------ ------------
Stockholders' equity
Common stock, 0.01 par value (authorized
80,000,000, outstanding 50,425,540 and
46,577,090 respectively) 504,257 465,771
Preferred stock, 0.01 par value (authorized
5,000,000, outstanding 1,266,000 and 426,000
respectively) 12,660 4,260
Surplus-paid in 15,239,332 8,872,943
Accumulated deficit (7,266,586) (8,082,303)
------------ ------------
Total stockholders' equity 8,489,663 1,260,671
------------ ------------
Total liabilities and stockholders' equity $51,766,998 $36,293,765
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