EX-99.1 2 d133137dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

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Universal Insurance Holdings, Inc. Reports Record Financial Results for the Second Quarter of 2016

Achieved Highest Quarterly Net Income and Diluted EPS in Company History

Fort Lauderdale, FL, July 28, 2016 - Universal Insurance Holdings, Inc. (NYSE: UVE) today reported record quarterly net income of $33.6 million, an increase of 36.2%, or $8.9 million, over the same quarter in 2015. Diluted earnings per share (EPS) were $0.94 for the second quarter of 2016, an increase of 36.2%, or $0.25 per share, over the same quarter in 2015.

“Our record second quarter results reflect the strength of our integrated business model and consistent operational execution across the company,” said Sean P. Downes, Universal’s Chairman and Chief Executive Officer. “We are pleased with our continued geographic expansion efforts, with our recent launch in Alabama marking the thirteenth state of operation for Universal Property & Casualty Insurance Company. The early results from our Direct-to-Consumer online platform, Universal DirectSM, that is now available in five states with the recent additions of South Carolina and Indiana have been extremely positive, and we are encouraged by the future prospects of this innovative source of organic business. As we move forward into the second half of the year, we are confident in our positioning and ability to generate profitable growth and value creation for all shareholders.”

Second-Quarter 2016 & Recent Highlights

 

  •   Net earned premiums grew by $43.6 million, or 38.6%, to $156.5 million.

 

  •   Total revenues increased by $46.2 million, or 37.4%, to $169.8 million.

 

  •   Net income increased by $8.9 million, or 36.2%, to $33.6 million.

 

  •   Diluted EPS grew by $0.25, or 36.2%, to $0.94 per share.

 

  •   Declared dividend of $0.14 per share.

 

  •   Completed our 2016-2017 reinsurance programs.

 

  •   Wrote our first policy in Alabama.

 

  •   Expanded Universal DirectSM, a Direct-to-Consumer online platform for homeowners insurance, into five states.

Second-Quarter 2016 Results

Net income for the second quarter of 2016 of $33.6 million reflects an improvement in multiple revenue measures. The increase in net earned premiums includes both organic growth in policies in force and the elimination of quota share reinsurance arrangements effective June 2015.

Earned premiums, total revenues, net income and diluted EPS were higher than any other quarter in the Company’s history.

 

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Stockholders’ equity reached an all-time high of $351.4 million as of June 30, 2016 compared to $293.1 million as of December 31, 2015. Book value per common share also reached an all-time high of $10.02 as June 30, 2016 compared to $8.34 as of December 31, 2015.

Share Repurchases

On June 13, 2016, the Company announced the completion of a $10 million share repurchase program with 527,107 shares repurchased at an average price of $18.93 per share on the open market pursuant to the Board authorized share repurchase program announced on November 19, 2015.

The Company also announced that its Board of Directors authorized a new share repurchase program under which the Company may repurchase up to $20 million of its outstanding shares of common stock through December 31, 2017. Pursuant to this program, the Company has repurchased 25,000 shares of its common stock at an average price of $19.42 per share, with $19.5 million remaining to be deployed.

Cash Dividends

On April 13, 2016, the Company announced that its Board of Directors had declared a cash dividend of $0.14 per share of common stock, which was paid on July 5, 2016 to shareholders of record on June 15, 2016.

Conference Call

Members of the Universal management team will host a conference call on Thursday, July 28, 2016 at 4:45 PM ET to discuss the second quarter 2016 financial results. Following prepared remarks, management will conduct a question and answer session.

The call will be accessible by dialing toll free at (888) 887-7180 or toll at (270) 823-1518 (using the Conference I.D.: 52662993). A live audio webcast of the call will also be accessible on the Universal Insurance website at www.universalinsuranceholdings.com. A replay of the call can be accessed toll free at (855) 859-2056 or toll at (404) 537-3406 (using the Conference I.D.: 52662993), and will be available through August 12, 2016.

About Universal Insurance Holdings, Inc.

Universal Insurance Holdings, Inc., with its wholly-owned subsidiaries, is a vertically integrated insurance holding company performing all aspects of insurance underwriting, distribution and

 

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claims. Universal Property & Casualty Insurance Company (UPCIC), a wholly-owned subsidiary of the Company, is one of the leading writers of homeowners insurance in Florida and is now fully licensed and has commenced its operations in North Carolina, South Carolina, Hawaii, Georgia, Massachusetts, Maryland, Delaware, Indiana, Pennsylvania, Minnesota, Michigan and Alabama. American Platinum Property and Casualty Insurance Company, also a wholly-owned subsidiary, currently writes homeowners multi-peril insurance on Florida homes valued in excess of $1 million, which are limits and coverages currently not targeted through its affiliate UPCIC. For additional information on the Company, please visit our investor relations website at www.universalinsuranceholdings.com.

Forward-Looking Statements and Risk Factors

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Such statements may include commentary on plans, products and lines of business, marketing arrangements, reinsurance programs and other business developments and assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future results could differ materially from those described, and the Company undertakes no obligation to correct or update any forward-looking statements. For further information regarding risk factors that could affect the Company’s operations and future results, refer to the Company’s reports filed with the Securities and Exchange Commission, including Form 10-K for the year ended December 31, 2015.

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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except per share data)

 

     Three Months Ended  
     June 30,  
     2016     2015  

PREMIUMS EARNED AND OTHER REVENUES

     

Direct premiums written

    $ 271,921      $ 249,971   

Ceded premiums written

      (72,874 )      (7,933 ) 
  

 

 

    

 

 

  

Net premiums written

      199,047        242,038   

Change in net unearned premiums

      (42,586 )      (129,150 ) 
  

 

 

    

 

 

  

Premiums earned, net

      156,461        112,888   

Net investment income (expense)

      2,142        1,207   

Net realized gains (losses) on investments

      576        110   

Commission revenue

      4,210        3,474   

Policy fees

      4,753        4,352   

Other revenue

      1,660        1,560   
  

 

 

    

 

 

  

Total premiums earned and other revenues

      169,802        123,591   
  

 

 

    

 

 

  

OPERATING COSTS AND EXPENSES

     

Losses and loss adjustment expenses

      60,083        39,704   

General and administrative expenses

      54,825        42,667   
  

 

 

    

 

 

  

Total operating costs and expenses

      114,908        82,371   
  

 

 

    

 

 

  

INCOME BEFORE INCOME TAXES

      54,894        41,220   

Income tax expense

      21,247        16,516   
  

 

 

    

 

 

  

NET INCOME

    $ 33,647      $ 24,704   
  

 

 

    

 

 

  

Basic earnings per common share

    $ 0.96      $ 0.71   
  

 

 

    

 

 

  

Weighted average common shares outstanding - Basic

      35,062        35,019   
  

 

 

    

 

 

  

Fully diluted earnings per common share

    $ 0.94      $ 0.69   
  

 

 

    

 

 

  

Weighted average common shares outstanding - Diluted

      35,649        36,002   
  

 

 

    

 

 

  

Cash dividend declared per common share

    $ 0.14      $ 0.12   
  

 

 

    

 

 

  

 

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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except per share data)

 

     Six Months Ended  
     June 30,  
     2016     2015  

PREMIUMS EARNED AND OTHER REVENUES

     

Direct premiums written

    $ 499,894      $ 461,576   

Ceded premiums written

      (146,933 )      (114,430 ) 
  

 

 

    

 

 

  

Net premiums written

      352,961        347,146   

Change in net unearned premiums

      (44,052 )      (139,898 ) 
  

 

 

    

 

 

  

Premiums earned, net

      308,909        207,248   

Net investment income (expense)

      3,747        2,069   

Net realized gains (losses) on investments

      1,243        281   

Commission revenue

      8,323        6,642   

Policy fees

      8,867        8,184   

Other revenue

      3,159        2,977   
  

 

 

    

 

 

  

Total premiums earned and other revenues

      334,248        227,401   
  

 

 

    

 

 

  

OPERATING COSTS AND EXPENSES

     

Losses and loss adjustment expenses

      126,200        73,294   

General and administrative expenses

      112,055        74,864   
  

 

 

    

 

 

  

Total operating costs and expenses

      238,255        148,158   
  

 

 

    

 

 

  

INCOME BEFORE INCOME TAXES

      95,993        79,243   

Income tax expense

      37,120        32,209   
  

 

 

    

 

 

  

NET INCOME

    $ 58,873      $ 47,034   
  

 

 

    

 

 

  

Basic earnings per common share

    $ 1.69      $ 1.35   
  

 

 

    

 

 

  

Weighted average common shares outstanding - Basic

      34,795        34,800   
  

 

 

    

 

 

  

Fully diluted earnings per common share

    $ 1.65      $ 1.31   
  

 

 

    

 

 

  

Weighted average common shares outstanding - Diluted

      35,575        35,987   
  

 

 

    

 

 

  

Cash dividend declared per common share

    $ 0.28      $ 0.24   
  

 

 

    

 

 

  

 

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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands, except per share data)

 

     June 30,      December 31,  
     2016      2015  
ASSETS      

Cash and cash equivalents

    $ 215,283       $ 197,014   

Restricted cash and cash equivalents

      2,635         2,635   

Fixed maturities, at fair value

      577,810         416,083   

Equity securities, at fair value

      35,543         42,214   

Short-term investments, at fair value

      5,004         25,021   

Investment real estate, net

      8,102         6,117   

Prepaid reinsurance premiums

      122,444         114,673   

Reinsurance recoverable

      6,355         22,853   

Premiums receivable, net

      61,433         50,980   

Other receivables

      6,203         4,979   

Property and equipment, net

      29,706         27,065   

Deferred policy acquisition costs, net

      67,190         60,019   

Income taxes recoverable

      156         5,420   

Deferred income tax asset, net

      6,599         13,912   

Other assets

      5,046         4,563   
  

 

 

     

 

 

  

Total assets

    $ 1,149,509       $ 993,548   
  

 

 

     

 

 

  
LIABILITIES AND STOCKHOLDERS’ EQUITY      

LIABILITIES:

      

Unpaid losses and loss adjustment expenses

    $ 60,144       $ 98,840   

Unearned premiums

      494,189         442,366   

Advance premium

      29,589         24,813   

Accounts payable

      2,926         378   

Book overdraft

      539         —     

Reinsurance payable, net

      147,444         73,585   

Dividends payable

      4,912         —       

Other liabilities and accrued expenses

      42,640         36,424   

Long-term debt

      15,763         24,050   
  

 

 

     

 

 

  

Total liabilities

      798,146         700,456   
  

 

 

     

 

 

  

STOCKHOLDERS’ EQUITY:

      

Cumulative convertible preferred stock, $.01 par value

      —           —     

Authorized shares - 1,000

      

Issued shares - 10 and 10

      

Outstanding shares - 10 and 10

      

Minimum liquidation preference, $9.99 and $9.99 per share

      

Common stock, $.01 par value

      453         455   

Authorized shares - 55,000

      

Issued shares - 45,262 and 45,525

      

 

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     June 30,     December 31,  
     2016     2015  

Outstanding shares - 35,064 and 35,110

     

Treasury shares, at cost - 10,198 and 10,415

      (85,399 )      (80,802 ) 

Additional paid-in capital

      78,496        70,789   

Accumulated other comprehensive income (loss), net of taxes

      2,116        (4,006 ) 

Retained earnings

      355,697        306,656   
  

 

 

    

 

 

  

Total stockholders’ equity

      351,363        293,092   
  

 

 

    

 

 

  

Total liabilities and stockholders’ equity

    $ 1,149,509      $ 993,548   
  

 

 

    

 

 

  

Investor Contact:

Andy Brimmer / Mahmoud Siddig

Joele Frank, Wilkinson Brimmer Katcher

212-355-4449

 

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