EX-99.1 2 hci-ex99_1.htm EX-99.1 EX-99.1

 

Exhibit 99.1

 

img19850711_0.jpg 

 

HCI Group Reports Third Quarter 2021 Results

 

Tampa, Fla. – November 8, 2021 – HCI Group, Inc. (NYSE:HCI), a holding company with operations in homeowners insurance, software development and real estate, reported results for the three and nine months ended September 30, 2021.

 

Third Quarter 2021 - Financial Results

In the third quarter of 2021, the company experienced a net loss of $4.9 million or $0.72 diluted loss per share compared with net income of $15.4 million or $1.70 diluted earnings per share in the third quarter of 2020. The prior year quarter included a one-time gain of $37.0 million on an involuntary sale of real estate. Adjusted net loss (a non-GAAP measure which excludes net unrealized gains or losses on equity securities) for the third quarter of 2021 was a loss of $3.5 million or $0.64 diluted loss per share compared with income of $14.4 million or $1.60 diluted earnings per share in the third quarter of 2020. 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”).

 

Even though the company recorded a net loss in the third quarter, book value per share increased by approximately 16% to $30.39 per share. A contributing factor to the increase was the conversion or exchange of a portion of the company’s convertible notes into or for common stock. In the third quarter, holders of the company’s convertible notes converted or exchanged $82.8 million in principal into approximately 1.36 million of the company’s common shares. The transactions increased shareholders’ equity by approximately $81.1 million (net of related transaction expenses). Additionally, these transactions decreased long-term debt by $82.5 million, accounting for a significant portion of the reduction of over 50% from the second quarter of 2021. The company recognized debt conversion expenses of approximately $1.3 million on these transactions in the third quarter. After these transactions, the number of common shares outstanding increased from 8,265,640 at the end of June 30, 2021 to 9,591,079 at the end of September 30, 2021.

 

Subsequent to third quarter, in the month of October the company converted or exchanged an additional $28 million principal amount of debt into approximately 459,000 of the company’s common shares.

 

Consolidated gross written premiums of $174.3 million for the third quarter of 2021 increased 49.6% from $116.5 million in the third quarter of 2020. The increase was due to the continued growth of TypTap Insurance Company, policies transitioned from Gulfstream Property & Casualty Insurance Company and a quota share reinsurance arrangement with United Property & Casualty Insurance Company.

 

Consolidated gross premiums earned of $149.8 million for the third quarter of 2021 increased 40.4% from $106.7 million in the third quarter of 2020. The increase was driven by the growth in Homeowners Choice gross premiums earned from $86.8 million to $98.3 million and the growth of TypTap gross premiums earned from $19.9 million to $51.5 million.

 

Premiums ceded for reinsurance for the third quarter of 2021 increased to $55.6 million from $44.2 million in the third quarter of 2020 as a result of the growth in both TypTap and Homeowners Choice and represented 37.1% and 41.5%, respectively, of gross premiums earned. Premiums ceded for reinsurance included a prorated share of an $8 million increase resulting from a periodic true-up of total insured value attributable to the growth of the company.

 

Net investment income increased to $2.5 million from $1.8 million in the third quarter of 2020. This increase was due to an increase in income from limited partnership investments, real estate investments and an investment in an unconsolidated joint venture offset by a decrease in interest income from fixed-maturity security investments.

 

Net realized investment gains for the third quarter of 2021 increased to $1.2 million from $0.2 million for the third quarter of 2020. This increase was primarily due to net gains from selling equity securities.

 

Net unrealized investment losses were $1.9 million in the third quarter of 2021 compared with $1.3 million of net unrealized investment gains for the third quarter of 2020.

 

1

 

Losses and loss adjustment expenses for the third quarter of 2021 were $62.7 million compared with $51.7 million in the same period of 2020. The increase in the dollars of losses was attributable to the company’s growing premium base, storm related losses of $6.5 million from events in our four northeastern states, and $6.5 million of losses from the re-estimation of losses from Hurricane Sally and Tropical Storm Eta.

 

Policy acquisition and other underwriting expenses for the third quarter of 2021 were $23.3 million compared with $14.2 million in the same quarter of 2020. The increase relates to the growth of TypTap and the amortization of increased costs associated with the quota share arrangement with United.

 

Nine Months Ended September 30, 2021 - Financial Results

Net income for the nine months ended September 30, 2021 totaled $5.8 million or $0.22 diluted earnings per share compared with $24.9 million or $3.03 diluted earnings per share for the nine months ended September 30, 2020. The decrease in net income was primarily due to an increase in losses and loss adjustment expenses of $44.7 million, a one-time gain of $37.0 million on an involuntary sale of real estate included in the company’s 2020 results, and a $30.5 million increase in policy acquisition and other underwriting expenses, offset by an increase in net premiums earned of $77.5 million and a $12.6 million increase in income from our investment portfolio.

 

Adjusted net income (a non-GAAP measure which excludes net unrealized gains or losses on equity securities) for the nine months ended September 30, 2021 was $6.3 million or $0.15 diluted earnings per share compared with $25.3 million or $3.07 diluted earnings per share in the same period of 2020. An explanation of this non-GAAP financial measure and reconciliations to the applicable GAAP numbers accompany this press release.

 

Consolidated gross written premiums for the nine-month periods increased 32.9% to $485.1 million in 2021 from $364.9 million in 2020. The increase was due to the continued growth of TypTap, policies transitioned from Gulfstream and to a quota share reinsurance arrangement with United.

 

Consolidated gross premiums earned for the nine months ended September 30, 2021 increased to $420.2 million from $306.9 million during the same nine-month period in 2020. The increase was primarily attributable to the quota share arrangement with United and the growth of TypTap’s business.

 

Premiums ceded for the nine months ended September 30, 2021 were $145.1 million or 34.5% of gross premiums earned compared with $109.3 million or 35.6% of gross premiums earned during the same period in 2020. Premiums ceded for reinsurance included a prorated share of an $8 million increase resulting from a periodic true-up of total insured value attributable to the growth of the company.

 

Net investment income for the nine months ended September 30, 2021 was $9.7 million compared with $3.2 million in the nine months ended September 30, 2020. The $6.5 million increase was primarily due to losses from limited partnership investments in 2020 due to the economic effects of the COVID-19 pandemic and a net gain of $2.8 million recognized in 2021 for a real estate investment legal settlement.

 

Losses and loss adjustment expenses for the nine months ended September 30, 2021 and 2020 were $164.3 million and $119.7 million, respectively. The increase in the dollars of losses was attributable to the company’s growing premium base, losses of $6.5 million from events in our four northeastern states, and $10.8 million of losses from the re-estimation of losses from Hurricane Sally and Tropical Storm Eta.

 

Policy acquisition and other underwriting expenses for the nine months ended September 30, 2021 were $69.6 million compared with $39.0 million in the same nine-month period in 2020. The increase relates to the growth of TypTap, and the amortization of increased costs associated with a quota share arrangement with United.

 

Management Commentary

“As TypTap continues to expand, we are making important investments to maximize TypTap’s opportunity,” said HCI Group Chairman and Chief Executive Officer Paresh Patel. “We are confident the long-term payback on these investments will outweigh any short-term impact.”

 

Conference Call

HCI Group will hold a conference call tomorrow, November 9, 2021, 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 8:30 a.m. Eastern time.

 

2

 

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: (888) 506-0062

Listen-only international number: (973) 528-0011

Entry Code: 775232

 

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.comthrough December 9, 2021.

 

Toll-free replay number: (877) 481-4010

International replay number: (919) 882-2331

Replay ID: 42978

 

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 Statements

This 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.

 

Investor Relations Contact:

Matt Glover

Gateway Group, Inc.

Tel (949) 574-3860

HCI@gatewayir.com

 

Media Contact:

Jordan Schmidt

Gateway Group, Inc.

Tel (949) 386-6332

jordan@gatewayir.com

 

- Tables to follow -

 

3

 

HCI GROUP, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Dollar amounts in thousands)

 

 

 

September 30, 2021

 

 

December 31, 2020

 

 

 

(Unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Fixed-maturity securities, available for sale, at fair value (amortized cost: $45,016 and $70,265, respectively and allowance for credit losses: $0 and $588, respectively)

 

$

46,053

 

 

$

71,722

 

Equity securities, at fair value (cost: $46,771 and $47,029, respectively)

 

 

50,223

 

 

 

51,130

 

Limited partnership investments

 

 

26,039

 

 

 

27,691

 

Investment in unconsolidated joint venture, at equity

 

 

370

 

 

 

705

 

Real estate investments

 

 

73,663

 

 

 

74,472

 

Total investments

 

 

196,348

 

 

 

225,720

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

569,134

 

 

 

431,341

 

Restricted cash

 

 

2,400

 

 

 

2,400

 

Accrued interest and dividends receivable

 

 

463

 

 

 

588

 

Income taxes receivable

 

 

—

 

 

 

4,554

 

Premiums receivable, net (allowance: $3,756 and $2,053, respectively)

 

 

43,078

 

 

 

68,382

 

Prepaid reinsurance premiums

 

 

47,968

 

 

 

36,376

 

Reinsurance recoverable, net of allowance for credit losses:

 

 

 

 

 

 

Paid losses and loss adjustment expenses (allowance: $0 and $0, respectively)

 

 

9,658

 

 

 

14,127

 

Unpaid losses and loss adjustment expenses (allowance: $44 and $85, respectively)

 

 

39,468

 

 

 

71,019

 

Deferred policy acquisition costs

 

 

47,129

 

 

 

43,858

 

Property and equipment, net

 

 

13,946

 

 

 

12,767

 

Right-of-use-assets - operating leases

 

 

2,576

 

 

 

4,002

 

Intangible assets, net

 

 

10,807

 

 

 

3,568

 

Funds held in trust for assumed business

 

 

79,965

 

 

 

—

 

Other assets

 

 

13,174

 

 

 

22,611

 

 

 

 

 

 

 

 

Total assets

 

$

1,076,114

 

 

$

941,313

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

Losses and loss adjustment expenses

 

$

203,177

 

 

$

212,169

 

Unearned premiums

 

 

334,299

 

 

 

269,399

 

Advance premiums

 

 

19,062

 

 

 

11,370

 

Assumed reinsurance balances payable

 

 

88

 

 

 

87

 

Reinsurance payable on paid losses and loss adjustment expenses

 

 

4,727

 

 

 

—

 

Accrued expenses

 

 

15,187

 

 

 

10,181

 

Income taxes payable

 

 

3,574

 

 

 

—

 

Deferred income taxes, net

 

 

3,708

 

 

 

11,925

 

Revolving credit facility

 

 

—

 

 

 

23,750

 

Long-term debt

 

 

78,083

 

 

 

156,511

 

Lease liabilities - operating leases

 

 

2,578

 

 

 

4,014

 

Other liabilities

 

 

31,372

 

 

 

40,771

 

 

 

 

 

 

 

 

Total liabilities

 

 

695,855

 

 

 

740,177

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

Redeemable noncontrolling interest

 

 

87,731

 

 

 

—

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Common stock, (no par value, 40,000,000 shares authorized, 9,591,079 and 7,785,617
shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively)

 

 

—

 

 

 

—

 

Additional paid-in capital

 

 

39,905

 

 

 

—

 

Retained income

 

 

250,808

 

 

 

199,592

 

Accumulated other comprehensive income, net of taxes

 

 

799

 

 

 

1,544

 

Total stockholders' equity

 

 

291,512

 

 

 

201,136

 

Noncontrolling interests

 

 

1,016

 

 

 

—

 

Total equity

 

 

292,528

 

 

 

201,136

 

 

 

 

 

 

 

 

Total liabilities, redeemable noncontrolling interest, and equity

 

$

1,076,114

 

 

$

941,313

 

 

4

 

HCI GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)

(Dollar amounts in thousands, except per share amounts)

 

 

 

Three Months Ended

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

 

2021

 

 

2020

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross premiums earned

 

$

149,809

 

 

$

106,694

 

 

 

$

420,191

 

 

 

 

$

306,862

 

Premiums ceded

 

 

(55,577

)

 

 

(44,231

)

 

 

 

(145,112

)

 

 

 

 

(109,304

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net premiums earned

 

 

94,232

 

 

 

62,463

 

 

 

 

275,079

 

 

 

 

 

197,558

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

2,520

 

 

 

1,832

 

 

 

 

9,749

 

 

 

 

 

3,244

 

Net realized investment gains (losses)

 

 

1,232

 

 

 

177

 

 

 

 

4,952

 

 

 

 

 

(632

)

Net unrealized investment (losses) gains

 

 

(1,869

)

 

 

1,340

 

 

 

 

(649

)

 

 

 

 

(581

)

Credit losses on investments

 

 

—

 

 

 

(70

)

 

 

 

—

 

 

 

 

 

(596

)

Policy fee income

 

 

1,000

 

 

 

895

 

 

 

 

2,962

 

 

 

 

 

2,571

 

Gain on involuntary conversion

 

 

—

 

 

 

36,969

 

 

 

 

—

 

 

 

 

 

36,969

 

Other

 

 

2,102

 

 

 

421

 

 

 

 

3,502

 

 

 

 

 

1,591

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

 

99,217

 

 

 

104,027

 

 

 

 

295,595

 

 

 

 

 

240,124

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Losses and loss adjustment expenses

 

 

62,664

 

 

 

51,743

 

 

 

 

164,332

 

 

 

 

 

119,664

 

Policy acquisition and other underwriting expenses

 

 

23,340

 

 

 

14,210

 

 

 

 

69,574

 

 

 

 

 

39,027

 

General and administrative personnel expenses

 

 

11,537

 

 

 

9,871

 

 

 

 

31,733

 

 

 

 

 

27,969

 

Interest expense

 

 

1,664

 

 

 

2,856

 

 

 

 

5,743

 

 

 

 

 

8,846

 

Loss on repurchases of convertible senior notes

 

 

—

 

 

 

—

 

 

 

 

—

 

 

 

 

 

150

 

Loss on extinguishment of debt

 

 

—

 

 

 

98

 

 

 

 

—

 

 

 

 

 

98

 

Debt conversion expense

 

 

1,273

 

 

 

—

 

 

 

 

1,273

 

 

 

 

 

—

 

Other operating expenses

 

 

5,243

 

 

 

3,713

 

 

 

 

14,245

 

 

 

 

 

10,354

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total expenses

 

 

105,721

 

 

 

82,491

 

 

 

 

286,900

 

 

 

 

 

206,108

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income before income taxes

 

 

(6,504

)

 

 

21,536

 

 

 

 

8,695

 

 

 

 

 

34,016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax (benefit) expense

 

 

(1,636

)

 

 

6,146

 

 

 

 

2,888

 

 

 

 

 

9,143

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(4,868

)

 

$

15,390

 

 

 

$

5,807

 

 

 

 

$

24,873

 

Net income attributable to redeemable noncontrolling interest

 

 

(2,202

)

 

 

—

 

 

 

 

(5,175

)

 

 

 

 

—

 

Net loss attributable to noncontrolling interests

 

 

833

 

 

 

—

 

 

 

 

1,196

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income after noncontrolling interests

 

$

(6,237

)

 

$

15,390

 

 

 

$

1,828

 

 

 

 

$

24,873

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic (loss) earnings per share

 

$

(0.72

)

 

$

1.97

 

 

 

$

0.23

 

 

 

 

$

3.21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted (loss) earnings per share

 

$

(0.72

)

 

$

1.70

 

 

 

$

0.22

 

 

 

 

$

3.03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per share

 

$

0.40

 

 

$

0.40

 

 

 

$

1.20

 

 

 

 

$

1.20

 

 

5

 

HCI GROUP, INC. AND SUBSIDIARIES

(Amounts in thousands, except per share amounts)

 

A summary of the numerator and denominator of basic and diluted income per common share calculated in accordance with GAAP is presented below.

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

GAAP

 

September 30, 2021

 

 

September 30, 2021

 

 

 

Loss

 

 

Shares (a)

 

 

Per Share

 

 

Income

 

 

Shares (a)

 

 

Per Share

 

 

 

(Numerator)

 

 

(Denominator)

 

 

Amount

 

 

(Numerator)

 

 

(Denominator)

 

 

Amount

 

Net (loss) income

 

$

(4,868

)

 

 

 

 

 

 

 

$

5,807

 

 

 

 

 

 

 

Less: Net income attributable to redeemable noncontrolling interest

 

 

(2,202

)

 

 

 

 

 

 

 

 

(5,175

)

 

 

 

 

 

 

Less: TypTap Group's net loss attributable to non-HCI common stockholders and TypTap Group's participating securities

 

 

774

 

 

 

 

 

 

 

 

 

1,191

 

 

 

 

 

 

 

Net (loss) income attributable to HCI

 

 

(6,296

)

 

 

 

 

 

 

 

 

1,823

 

 

 

 

 

 

 

Less: (Loss) income attributable to participating securities

 

 

537

 

 

 

 

 

 

 

 

 

(37

)

 

 

 

 

 

 

Basic (Loss) Earnings Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income allocated to common stockholders

 

 

(5,759

)

 

 

8,023

 

 

$

(0.72

)

 

 

1,786

 

 

 

7,676

 

 

$

0.23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of Dilutive Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock options*

 

 

—

 

 

 

—

 

 

 

 

 

 

—

 

 

 

182

 

 

 

 

Warrants*

 

 

—

 

 

 

—

 

 

 

 

 

 

—

 

 

 

234

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted (Loss) Earnings Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income available to common stockholders and assumed conversions

 

$

(5,759

)

 

 

8,023

 

 

$

(0.72

)

 

$

1,786

 

 

 

8,092

 

 

$

0.22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Shares in thousands.

 

* For the three months ended September 30, 2021, 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) HCI Group'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) Income to Non-GAAP Adjusted Net (Loss) Income

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30, 2021

 

September 30, 2021

GAAP Net (loss) income

 

 

 

 

$

(4,868

)

 

 

 

 

 

 

$

5,807

 

 

 

Net unrealized investment losses

 

$

1,869

 

 

 

 

 

 

 

$

649

 

 

 

 

 

 

Less: Tax effect at 24.52182%

 

$

(458

)

 

 

 

 

 

 

$

(159

)

 

 

 

 

 

Net adjustment to Net (loss) income

 

 

 

 

$

1,411

 

 

 

 

 

 

 

$

490

 

 

 

Non-GAAP Adjusted Net (loss) income

 

 

 

 

$

(3,457

)

 

 

 

 

 

 

$

6,297

 

 

 

 

6

 

HCI GROUP, INC. AND SUBSIDIARIES

(Amounts in thousands, except per share amounts)

 

A summary of the numerator and denominator of the basic and diluted income per common share calculated with the Non-GAAP financial measure Adjusted net income is presented below.

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

Non-GAAP

 

September 30, 2021

 

 

September 30, 2021

 

 

 

Loss

 

 

Shares (a)

 

 

Per Share

 

 

Income

 

 

Shares (a)

 

 

Per Share

 

 

 

(Numerator)

 

 

(Denominator)

 

 

Amount

 

 

(Numerator)

 

 

(Denominator)

 

 

Amount

 

Adjusted net (loss) income (non-GAAP)

 

$

(3,457

)

 

 

 

 

 

 

 

$

6,297

 

 

 

 

 

 

 

Less: Net income attributable to redeemable noncontrolling interest

 

 

(2,202

)

 

 

 

 

 

 

 

$

(5,175

)

 

 

 

 

 

 

Less: TypTap Group's net loss attributable to non-HCI common stockholders and TypTap Group's participating securities

 

 

42

 

 

 

 

 

 

 

 

 

41

 

 

 

 

 

 

 

Net (loss) income attributable to HCI

 

 

(5,617

)

 

 

 

 

 

 

 

 

1,163

 

 

 

 

 

 

 

Less: Income attributable to participating securities

 

 

482

 

 

 

 

 

 

 

 

 

16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic (Loss) Earnings Per Share before unrealized gains/losses on equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income allocated to common stockholders

 

 

(5,135

)

 

 

8,023

 

 

$

(0.64

)

 

 

1,179

 

 

 

7,676

 

 

$

0.15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of Dilutive Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock options*

 

 

—

 

 

 

—

 

 

 

 

 

 

—

 

 

 

182

 

 

 

 

Warrants*

 

 

—

 

 

 

—

 

 

 

 

 

 

—

 

 

 

234

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted (Loss) Earnings Per Share before unrealized gains/losses on equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income available to common stockholders and assumed conversions

 

$

(5,135

)

 

$

8,023

 

 

$

(0.64

)

 

$

1,179

 

 

$

8,092

 

 

$

0.15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Shares in thousands.

 

* For the three months ended September 30, 2021, 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, 2021

 

September 30, 2021

GAAP diluted (Loss) Earnings Per Share

 

 

 

 

$

(0.72

)

 

 

 

 

 

 

$

0.22

 

 

 

Net unrealized investment losses

 

$

0.23

 

 

 

 

 

 

 

$

0.08

 

 

 

 

 

 

Less: Tax effect at 24.52182%

 

$

(0.16

)

 

 

 

 

 

 

$

(0.15

)

 

 

 

 

 

Net adjustment to GAAP diluted EPS

 

 

 

 

$

0.08

 

 

 

 

 

 

 

$

(0.07

)

 

 

Non-GAAP Adjusted diluted EPS

 

 

 

 

$

(0.64

)

 

 

 

 

 

 

$

0.15

 

 

 

 

7