UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): March 30, 2017
Unico American Corporation
(Exact Name of Registrant as Specified in Its Charter)
Nevada
(State or Other Jurisdiction of Incorporation)
| 0-3978 | 95-2583928 |
| (Commission File Number) | (IRS Employer Identification No.) |
| 26050 Mureau Road | |
| Calabasas, California | 91302 |
| (Address of Principal Executive Offices) | (Zip Code) |
(818) 591-9800
(Registrant's Telephone Number, Including Area Code)
(Former name or former address, if changed since last Report.)
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 communications 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 March 30, 2017, the registrant issued a news release announcing its results of operations for the year ended December 31, 2016. A copy of the news release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Form 8-K and the Exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
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.
UNICO AMERICAN CORPORATION
(Registrant)
Date: March 30, 2017 By: /s/ Michael Budnitsky
Name: Michael Budnitsky
Title: Chief Financial Officer
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EXHIBIT INDEX
Exhibit Number Description
99.1 News release dated March 30, 2017
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Exhibit 99.1
NEWS RELEASE
CONTACT: Michael Budnitsky
Chief Financial Officer
818-591-9800
UNICO AMERICAN CORPORATION REPORTS
FOURTH QUARTER AND FULL YEAR 2016 FINANCIAL RESULTS
Calabasas, CA, March 30, 2017 – Unico American Corporation (NASDAQ – “UNAM”) (“Unico,” the “Company”), announced today its consolidated financial results for the three and twelve months ended December 31, 2016. For the three months ended December 31, 2016, revenues were $9.0 million and net income was $0.6 million ($0.11 diluted earnings per share) compared with revenues of $8.7 million and net loss of $0.2 million ($0.05 diluted loss per share) for the three months ended December 31, 2015. For the twelve months ended December 31, 2016, revenues were $35.3 million and net loss was $1.4 million ($0.26 diluted loss per share) compared with revenue of $33.3 million and net loss of $1.2 million ($0.22 diluted loss per share) for the twelve months ended December 31, 2015.
Stockholders’ equity was $68.9 million as of December 31, 2016, or $12.98 per common share including unrealized after-tax investment gains of $0.008 million, compared to stockholders’ equity of $70.3 million as of December 31, 2015, or $13.23 per common share including unrealized after-tax investment losses of $0.03 million.
“Our fourth quarter had no surprises; it was better than the third quarter but not good enough to satisfy our growth and profit objectives,” said Cary L. Cheldin, Unico’s President and Chief Executive Officer. “Although the 2016 year’s financial results were disappointing, the work we did in 2016 serves as a solid foundation for our long term future success. In addition to continuing our work with independent strategic advisors, we also engaged investment advisors, IT advisors, marketing firms, and a product development firm. We are working towards improved growth and profitability moving forward.”
Headquartered in Calabasas, California, Unico is an insurance holding company that underwrites property and casualty insurance through its insurance company subsidiary; provides property, casualty and health insurance through its agency subsidiaries; and through its other subsidiaries provides insurance premium financing and membership association services. Unico has conducted the majority of its operations through its subsidiary, Crusader Insurance Company, since 1985. For more information concerning Crusader Insurance Company, please visit the Crusader’s Web site at www.crusaderinsurance.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements contained herein that are not historical facts are forward-looking. These statements, which may be identified by forward-looking words or phrases such as “anticipate,” “believe,” ”expect,” “intend,” “may,” “should,” and “would,” involve risks and uncertainties, many of which are beyond the control of the Company. Such risks and uncertainties could cause actual results to differ materially from these forward-looking statements. Factors which could cause actual results to differ materially include underwriting actions not being effective, rate increases for coverages not being sufficient, premium rate adequacy relating to competition or regulation, actual versus estimated claim experience, regulatory changes or developments, unforeseen calamities, general market conditions, and the Company’s ability to introduce new profitable products.
Financial Tables Follow –
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UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ in thousands)
| December 31 | December 31 | |||||||
| 2016 | 2015 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Investments | ||||||||
| Available for sale: | ||||||||
| Fixed maturities, at fair value (amortized cost: December 31, 2016 $80,372; December 31, 2015 $82,203) | $ | 80,384 | $ | 82,161 | ||||
| Short-term investments, at fair value | 10,205 | 15,641 | ||||||
| Total Investments | 90,589 | 97,802 | ||||||
| Cash and restricted cash | 13,496 | 8,259 | ||||||
| Accrued investment income | 186 | 86 | ||||||
| Receivables, net | 6,008 | 5,505 | ||||||
| Reinsurance recoverable: | ||||||||
| Paid losses and loss adjustment expenses | 261 | 751 | ||||||
| Unpaid losses and loss adjustment expenses | 9,521 | 9,637 | ||||||
| Deferred policy acquisition costs | 4,432 | 4,233 | ||||||
| Property and equipment, net | 10,283 | 10,221 | ||||||
| Deferred income taxes | 1,177 | 1,334 | ||||||
| Other assets | 2,269 | 2,343 | ||||||
| Total Assets | $ | 138,222 | $ | 140,171 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| LIABILITIES | ||||||||
| Unpaid losses and loss adjustment expenses | $ | 47,056 | $ | 49,094 | ||||
| Unearned premiums | 19,375 | 18,079 | ||||||
| Advance premium and premium deposits | 224 | 212 | ||||||
| Accrued expenses and other liabilities | 2,661 | 2,443 | ||||||
| Total Liabilities | $ | 69,316 | $ | 69,828 | ||||
| Commitments and contingencies | ||||||||
| STOCKHOLDERS' EQUITY | ||||||||
| Common stock, no par – authorized 10,000,000 shares; issued and outstanding shares 5,307,133 at December 31, 2016, and 5,315,945 at December 31, 2015 | $ | 3,761 | $ | 3,743 | ||||
| Accumulated other comprehensive income (loss) | 8 | (27 | ) | |||||
| Retained earnings | 65,137 | 66,627 | ||||||
| Total Stockholders’ Equity | $ | 68,906 | $ | 70,343 | ||||
| Total Liabilities and Stockholders' Equity | $ | 138,222 | $ | 140,171 | ||||
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UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except per share)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31 | December 31 | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||
| REVENUES | ||||||||||||||||
| Insurance company operation: | ||||||||||||||||
| Net premium earned | $ | 8,085 | $ | 7,717 | $ | 31,356 | $ | 29,574 | ||||||||
| Investment income | 222 | 165 | 881 | 479 | ||||||||||||
| Net realized investment losses | — | (7 | ) | (1 | ) | (7 | ) | |||||||||
| Other income | 16 | 65 | 218 | 375 | ||||||||||||
| Total Insurance Company Revenues | 8,323 | 7,940 | 32,454 | 30,421 | ||||||||||||
| Other insurance operations: | ||||||||||||||||
| Gross commissions and fees | 675 | 708 | 2,738 | 2,774 | ||||||||||||
| Investment income | — | — | — | — | ||||||||||||
| Finance fees earned | 18 | 18 | 69 | 66 | ||||||||||||
| Other income | 1 | 2 | 7 | 4 | ||||||||||||
| Total Revenues | 9,017 | 8,668 | 35,268 | 33,265 | ||||||||||||
| EXPENSES | ||||||||||||||||
| Losses and loss adjustment expenses | 4,845 | 5,289 | 22,827 | 19,163 | ||||||||||||
| Policy acquisition costs | 1,753 | 1,713 | 6,895 | 6,465 | ||||||||||||
| Salaries and employee benefits | 946 | 1,184 | 4,926 | 4,853 | ||||||||||||
| Commissions to agents/brokers | 40 | 40 | 162 | 167 | ||||||||||||
| Other operating expenses | 519 | 800 | 2,572 | 4,351 | ||||||||||||
| Total Expenses | 8,103 | 9,026 | 37,382 | 34,999 | ||||||||||||
| Income (loss) before taxes | 914 | (358 | ) | (2,114 | ) | (1,734 | ) | |||||||||
| Income tax expense (benefit) | 317 | (110 | ) | (710 | ) | (552 | ) | |||||||||
Net Income (loss) | $ | 597 | $ | (248 | ) | $ | (1,404 | ) | $ | (1,182 | ) | |||||
| PER SHARE DATA: | ||||||||||||||||
| Basic | ||||||||||||||||
| Earnings (loss) per share | $ | 0.11 | $ | (0.05 | ) | $ | (0.26 | ) | $ | (0.22 | ) | |||||
| Weighted average shares | 5,307,133 | 5,326,301 | 5,307,694 | 5,335,540 | ||||||||||||
| Diluted | ||||||||||||||||
| Earnings (loss) per share | $ | 0.11 | $ | (0.05 | ) | $ | (0.26 | ) | $ | (0.22 | ) | |||||
| Weighted average shares | 5,307,837 | 5,326,301 | 5,307,694 | 5,335,540 | ||||||||||||
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UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
| Twelve Months Ended | ||||||||
| December 31 | ||||||||
| 2016 | 2015 | |||||||
| (Unaudited) | ||||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (1,404 | ) | $ | (1,182 | ) | ||
| Adjustments to reconcile net loss to net cash from operations: | ||||||||
| Depreciation and amortization | 483 | 341 | ||||||
| Bond amortization, net | (16 | ) | (19 | ) | ||||
| Non-cash stock based compensation | 23 | 23 | ||||||
| Loss on asset impairment | — | 1,287 | ||||||
| Net realized investment losses | 1 | 8 | ||||||
| Bad debt expense | 6 | (1 | ) | |||||
| Changes in assets and liabilities: | ||||||||
| Net receivables and accrued investment income | (609 | ) | (377 | ) | ||||
| Reinsurance recoverable | 606 | (5,024 | ) | |||||
| Deferred policy acquisition costs | (199 | ) | (350 | ) | ||||
| Other assets | 297 | 218 | ||||||
| Unpaid losses and loss adjustment expenses | (2,038 | ) | 4,697 | |||||
| Unearned premiums | 1,296 | 1,472 | ||||||
| Advance premium and premium deposits | 12 | (38 | ) | |||||
| Accrued expenses and other liabilities | 218 | (543 | ) | |||||
| Income taxes current/deferred | (85 | ) | (561 | ) | ||||
| Net Cash Used by Operating Activities | (1,409 | ) | (49 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of fixed maturity investments | (16,772 | ) | (57,930 | ) | ||||
| Proceeds from maturity of fixed maturity investments | 18,618 | 10,892 | ||||||
| Net decrease in short-term investments | 5,436 | 56,618 | ||||||
| Additions to property and equipment | (545 | ) | (1,339 | ) | ||||
| Net Cash Provided by Investing Activities | 6,737 | 8,241 | ||||||
| Cash flows from financing activities: | ||||||||
| Repurchase of common stock | (90 | ) | (242 | ) | ||||
| Net Cash Used by Financing Activities | (90 | ) | (242 | ) | ||||
| Net increase in cash | 5,238 | 7,950 | ||||||
| Cash and restricted cash at beginning of period | 8,259 | 309 | ||||||
| Cash and Restricted Cash at End of Period | $ | 13,497 | $ | 8,259 | ||||
| Supplemental Cash Flow Information | ||||||||
| Cash paid during the period for income taxes | $ | 9 | $ | 9 | ||||
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