8-K 1 f8kpress.htm AMIC 12/31/2006 8-K UNITED STATES






 


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 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 16, 2007


AMERICAN INDEPENDENCE CORP.

(Exact name of registrant as specified in its charter)


Delaware

001-05270

11-1817252

(State or other jurisdiction of incorporation or organization)

(Commission File Number)

(I.R.S. Employer Identification No.)

 

 

485 Madison Avenue, New York, NY 10022

10022

(Address of principal executive offices)

(Zip Code)


Registrant's telephone number, including area code:  (212) 355-4141



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:


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-2)


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 240.13a-4(c))















 



Item 2.02 Results of Operations and Financial Condition.


This information set forth under this Item 2.02 is intended to be furnished under this Item 2.02 “Results of Operations and Financial Condition.”  Such information, including the Exhibit attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.


On March 16, 2007, American Independence Corp. issued a press release announcing net income for the fourth quarter and year ended December 31, 2006.  A copy of which is attached as Exhibit 99.1.



 Item 9.01 Financial Statements and Exhibits


(c)

Exhibits


Exhibit 99.1 - Press release of American Independence Corp., dated March 16, 2007.


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, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, unless expressly set forth by specific reference in such filing.





SIGNATURE

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, thereunto duly authorized.



AMERICAN INDEPENDENCE CORP.



/s/ Teresa A. Herbert

Teresa A. Herbert

Vice President and Chief Financial Officer



Date:



March 20, 2007




















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Exhibit 99.1



AMERICAN INDEPENDENCE CORP.

CONTACT:  DAVID T. KETTIG

485 MADISON AVENUE

(212) 355-4141 Ext. 3047

NEW YORK, NEW YORK 10022

www.americanindependencecorp.com

NASDAQ – AMIC

 


         

NEWS RELEASE


AMERICAN INDEPENDENCE CORP. ANNOUNCES

2006 FOURTH QUARTER AND ANNUAL RESULTS


New York, New York, March 16, 2007.  American Independence Corp. (NASDAQ: AMIC) today reported 2006 fourth quarter and annual results.


Financial Results

Net income was $0.6 million ($.07 per share, diluted), net of a provision for income taxes of $0.4 million, for the three months ended December 31, 2006, compared to $2.0 million ($.23 per share, diluted) for the three months ended December 31, 2005.  Revenues amounted to $22.1 million for the three months ended December 31, 2006, compared to revenues of $20.8 million for the three months ended December 31, 2005.  As of December 31, 2006, AMIC had approximately $276 million of federal net operating loss carryforwards.  To the extent that AMIC utilizes any such carryforwards, it will not pay any income taxes, except for federal alternative minimum taxes and state income taxes.  The 2005 fourth quarter results were positively impacted by a $2.1 million further reduction of the valuation allowance related to the deferred tax asset; there was not a corresponding reduction in 2006. On a non-GAAP basis, the Company's income from continuing operations excluding amortization expense and federal income tax charge related to deferred taxes for the three months ended December 31, 2006 was higher than the corresponding period in 2005; $1.0 million ($.12 per share, diluted) for the three months ended December 31, 2006, as compared to $47 thousand ($.01 per share, diluted) for the three months ended December 31, 2005.

AMIC also reported net income of $1.5 million ($.17 per share, diluted) for the year ended December 31, 2006 compared to $5.5 million ($.64 per share, diluted) for the year ended December 31, 2005.  Revenues amounted to $81.5 million for the year ended December 31, 2006, compared to revenues of $83.1 million for the year ended December 31, 2005.  The decrease in net income for the year ended December 31, 2006, as compared to the comparable period in 2005, is largely due to an increase in the loss ratio on medical stop-loss business written prior to 2006, a reduction in fee income due to lower premiums produced by our MGUs in 2006, and lower profit commissions received by our MGUs due to higher loss ratios on business incepting in prior years.  On a non-GAAP basis, the Company’s income from continuing operations, excluding amortization expense and federal income tax charge related to deferred taxes, for the year ended December 31, 2006 was $2.7 million ($.32 per share, diluted), as compared to $6.0 million



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($.71 per share, diluted) for the year ended December 31, 2005.


Chief Executive Officer’s Comments

Roy Thung, Chief Executive Officer, commented, “AMIC has made great strides the last two years in accomplishing three critical goals: (i) becoming an issuing carrier instead of purely a reinsurer; (ii) transitioning from being dependent on a single, relatively small and more cyclical niche market – medical stop loss – to having a growing, more diversified presence in multiple fully insured health insurance product lines, including small group medical and major medical for individuals and families; and (iii) improving the profitability of our core medical stop-loss block of business.”

Mr. Thung, continued, “Softness in the medical stop-loss market and reserve strengthening, primarily relating to business written in 2004, has adversely affected our earnings over the past five quarters.   Based on currently available information, business incepting in 2006, of which a material portion will be earned and recorded in 2007, is projected to achieve a net loss ratio that is meaningfully lower than that of business incepting in 2005, just as the net loss ratio on business incepting in 2005 was meaningfully lower than that of business incepting in 2004.  Due to reserve strengthening with respect to business written in prior years, as a consequence of claim development in 2006, the net loss ratio on our medical stop-loss line actually increased by 3.4% when comparing calendar year 2005 to 2006.  We have also accelerated the diversification of our book of business by Independence American becoming the carrier for two programs specializing in small group major medical, major medical for individuals and families, and medical stop-loss. We believe that, as of the end of 2007, Independence American (which is now licensed in 44 jurisdictions) will write approximately $39 million of annualized premiums.  The fully insured health insurance market is generally more predictable and is thought to be more than 100 times larger ($500 billion market versus $4 billion) in size than employer medical stop-loss. Our goal is to write and reinsure more fully insured health insurance in 2007, which will make us a stronger and more diversified company that is less susceptible to market cycles. We believe that, largely as a result of lower loss ratios and the aforementioned increase in premiums written by our insurance company, we will produce higher earnings in 2007.”


Non-GAAP Financial Measures

The Company provides non-GAAP financial measures to complement its consolidated financial statements presented in accordance with GAAP.  These non-GAAP financial measures are intended to supplement the user's overall understanding of the Company's current financial performance and its prospects for the future.  Specifically, the Company believes the non-GAAP results provide useful information to both management and investors by identifying certain expenses that, when excluded from the GAAP results, may provide additional understanding of the Company's core operating results or business performance.  However, these non-GAAP financial measures are not intended to supersede or replace the Company's GAAP results.  A reconciliation of the non-GAAP results to the GAAP results is



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provided in the "Reconciliation of GAAP Income from Continuing Operations to Non-GAAP Income from Continuing Operations” schedule below.  Operating results reported on a non-GAAP basis exclude non-cash charges related to the amortization of intangible assets recorded in purchase accounting and the Federal income tax charge related to deferred taxes.


About American Independence Corp.

AMIC is a holding company principally engaged in employer medical stop-loss, small group major medical, major medical for individuals and families, and managed care insurance and reinsurance through Independence American Insurance Company and its managing general underwriter division.

Certain statements in this news release may be considered forward-looking statements, such as statements relating to management’s views with respect to future events and financial performance.  Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements.  Potential risks and uncertainties include, but are not limited to, economic conditions in the markets in which AMIC operates, new federal or state governmental regulation, AMIC’s ability to effectively operate, integrate and leverage any past or future strategic acquisition, and other factors which can be found in AMIC’s other news releases and filings with the Securities and Exchange Commission.



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AMERICAN INDEPENDENCE CORP.

FOURTH QUARTER REPORT

DECEMBER 31, 2006

 (in Thousands Except Per Share Data)


 

 

 Three Months Ended

 

Year Ended

 

 

 December 31,

 

 December 31,

 

 

      2006

 

    2005

 

 2006


    2005

 

 

 


 

 

 


 

Premiums earned

$

 18,402 

$

 16,809 

$

 67,777 

$

 66,118 

MGU fee income

 

2,738 


3,266 


10,356 


 14,156 

Net investment income

 

901 


 747 


3,267 


 2,501 

Net realized gains (losses)

 

18 


(5)


66 


 245 

Other income

 

5 


4 


19 


110 

 

 

 


 


 


 

   Revenues

 

22,064 


 20,821 

 

81,485 


 83,130 

 

 

 


 


 


 

Insurance benefits, claims and reserves

 

12,791 


 12,962 


 47,799 


 44,722 

Selling and general expenses

 

8,115 


7,604 


 30,267 


31,192 

Amortization and depreciation

 

130 


 275 


689 


1,100 

Other expenses

 

57 


           37 


262 


    477 

 

 

 


 


 


 

   Expenses

 

21,093 


 20,878 


 79,017 


 77,491 

 

 

 


 


 


 

Income (loss) from continuing operations before income tax

 

971 


    (57)


2,468 


 5,639 

Provision for income tax

 

361 


         50 


960 


 2,199 

Reduction in valuation allowance related to deferred tax asset

 

- 


    (2,079)


- 


      (2,079)

 

 

 


 


 


 

Income from continuing operations

 

610 


    1,972 


1,508 


   5,519 

Gain (loss) on disposition of discontinued operations, net of tax

 

- 


 

   - 


(54)


    (59)

 

 

 


 


 


 

    Net income

$

610 

$

 1,972 

$

1,454 

$

 5,460 

 

 

 


 


 


 

Basic Income Per Common Share:

 

 


 


 


 

Income from continuing operations

$

.07 

$

 .23 

$

.18 

$

 .65 

Gain (loss) on disposition of discontinued operations, net of tax

 

- 


 

 - 


(.01)


 

 (.01)

 

 

 


 


 


 

     Net income

$

.07 

$

 .23 

$

.17 

$

 .64 

 

 

 


 


 


 

Weighted average basic common shares

 

8,454 

 

8,451 


8,452 


8,447 

 

 

 

 

 


 


 

Diluted Income Per Common Share:

 

 


 


 


 

Income from continuing operations

$

.07 

$

 .23 

$

.18 

$

 .65 

Gain (loss) on disposition of discontinued operations, net of tax

 

- 


 

 -


(.01)


 

 (.01)

 

 

 


 


 


 

     Net income

$

.07 

$

 .23 

$

.17 

$

.64 

 

 

 


 


 


 

Weighted average diluted common shares

 

8,514 


 8,519 


8,506 


8,526 


As of December 31, 2006, there were 8,457,890 common shares outstanding, net of treasury shares.



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AMERICAN INDEPENDENCE CORP.

RECONCILIATION OF GAAP INCOME FROM CONTINUING OPERATIONS TO NON-GAAP INCOME FROM CONTINUING OPERATIONS

(In Thousands Except Per Share Data)


 

 

 Three Months Ended

 

 Year Ended

 

 

 December 31,

 

 December 31,

 

 

       2006

 

 2005 

 

2006 

 

 2005 

 

 


 

 

 

 

 


Income from continuing operations

$

610 

   $

1,972 

$

1,508 

 $

 5,519 

Amortization of intangible assets related to purchase accounting

 

73 

 

202 

 

427 

 

      809 

Federal income tax charge related to deferred taxes

 

305 

 

(48)

 

749 

 

   1,785 

Reduction of valuation allowance related to deferred tax asset

 

- 

 

(2,079)

 

- 

 

 (2,079)

 

 

 

 

 

 

 

 

 

Income from continuing operations excluding

 

 

 

 

 

 

 

 

 

amortization and federal income tax charge

$

988 

   $

47 

$

2,684 

 $

6,034 

 

 

 

 

 

 

 

 

 

Non - GAAP Basic Income Per Common Share:

 

 

 

 

 

 

 

 

Income from continuing operations excluding

 

 

 

 

 

 

 

 

 

amortization and federal income tax charge

$

.12 

$

  .01 

$

.32 

$

.71 

 

 

 

 

 

 

 

 

 

Non - GAAP Diluted Income Per Common Share:

 

 

 

 

 

 

 

 

Income from continuing operations excluding

 

 

 

 

 

 

 

 

 

amortization and federal income tax charge

$

.12 

$

.01 

$

.32 

$

.71 

 

 

 

 

 

 

 

 

 




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