NEW YORK, May 12, 2011 (GLOBE NEWSWIRE) -- American Independence Corp. (Nasdaq:AMIC) today reported 2011 first-quarter results. This press release contains both GAAP and non-GAAP financial information for which reconciliations can be found at the end of this release.
Net income increased to $0.9 million ($.11 per share, diluted), for the three months ended March 31, 2011, compared to $0.8 million ($.10 per share, diluted), for the three months ended March 31, 2010.
The Company's operating income1 for the three months ended March 31, 2011 was $1.5 million ($.17 per share, diluted), as compared to $1.1 million ($.13 per share, diluted) for the three months ended March 31, 2010.
Revenues decreased to $21.7 million for the three months ended March 31, 2011, compared to revenues of $22.8 million for the three months ended March 31, 2010, primarily due to a reduction of premiums.
Chief Executive Officer's Comments
Roy Thung, Chief Executive Officer, commented, "Operating earnings improved 30% for the first quarter of 2011 to $1.5 million or $.17 per share from $1.1 million or $.13 per share for the comparable period of 2010. Our financial condition and balance sheet remain strong. We have no debt, $273 million of federal net operating loss carryforwards, and have grown our book value to $10.92 per share at March 31, 2011 from $10.82 per share at December 31, 2010."
Mr. Thung continued, "The Company is very pleased with the improved combined ratio in the fully insured segment. We are also gratified that as of May 1, 2011, we have merged four of our stop-loss subsidiaries and rebranded the enterprise as IHC Risk Solutions ("IHCRS"). IHCRS has combined operations with two MGUs owned by IHC to form one functional unit. This consolidation significantly enhances our operational efficiencies, allows us to be more focused on our underwriting results and combine the regional knowledge of our owned MGUs in order to deliver medical stop-loss on a direct basis. We experienced a decrease in the combined ratio in medical stop-loss, although a decrease in our loss ratio was partially offset by a significant increase in our expense ratio due to larger profit sharing on one program. We believe that medical stop-loss business written in 2011 will be quite profitable due to: (i) the underwriting and sales discipline resulting from the consolidation of IHCRS; (ii) the 20% average rate increases achieved by IHCRS on January renewal business; (iii) reduction in run-out from poorly performing non-owned programs that we reinsured which have been cancelled; and (iv) a hardening of the market. In addition we will retain more risk on our business as a result of our increased capital base, which will increase our net retained premiums and our future profits starting next year. Our investment portfolio is rated, on average, AA and has a low duration although we are experiencing pressure on investment income due to lower yields on our fixed income portfolio."
Non-GAAP Financial Measures
The Company provides non-GAAP financial measures to complement its consolidated financial statements presented in accordance with GAAP: (i) Operating income is net income excluding non-cash charges related to the amortization of intangible assets recorded in purchase accounting, net realized investment gains (losses), and the federal income tax charge related to deferred taxes due to its federal net operating loss carryforwards, and (ii) Operating income per share is operating income (loss) on a per share basis. 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 provided in the "Reconciliation of GAAP Income from Continuing Operations to Non-GAAP Operating Income from Continuing Operations" schedule below.
About American Independence Corp.
AMIC, through Independence American Insurance Company and its other subsidiaries, offers health insurance solutions to individuals and employer groups. AMIC provides to the individual and self-employed markets health insurance and related products, which are distributed through its subsidiaries, Independent Producers of America, LLC and healthinsurance.org, LLC. AMIC markets medical stop-loss through managing general underwriters, including IHC Risk Solutions LLC.
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.
1 Operating income is a non-GAAP measure and is defined as net income excluding non-cash charges related to the amortization of certain intangible assets recorded in purchase accounting, net income attributable to the non-controlling interest, net realized investment gains and losses, and the federal income tax charge related to deferred taxes. The Company believes that the presentation of operating income may offer a better understanding of the core operating results of the Company. A reconciliation of net income to operating income is presented as an attachment to this press release.
CONTACT: DAVID T. KETTIG (212) 355-4141 Ext. 3047 www.americanindependencecorp.com