American Independence Corp. Announces 2016 Second-Quarter and Six-Month Results
15 August 2016 - 10:11PM
American Independence Corp. (NASDAQ:AMIC) today reported 2016
second-quarter and six-month results.
Financial Results
On March 31, 2016, AMIC completed the sale of
IHC Risk Solutions, LLC (“Risk Solutions”) and the medical
stop-loss business it produced and realized an after tax gain of
approximately $114 million. In addition, under the purchase
and sale agreement, all of the in-force medical stop-loss business
of Independence American Insurance Company produced by Risk
Solutions is 100% co-insured as of January 1, 2016. AMIC’s
block of medical stop-loss business is in run-off. The sale
of Risk Solutions and exit from the medical stop-loss business
represents a strategic shift that will have a major effect on the
Company’s operations and financial results. The disposal
transaction qualifies for reporting as discontinued operations in
the first quarter of 2016.
AMIC reported net income of $1.3 million ($.16
per diluted share) for the three months ended June 30, 2016
compared to $0.9 million ($.11 per diluted share) for the three
months ended June 30, 2015. Income from continuing operations
was $1.4 million ($.16 per diluted share), and $1.0 million ($.11
per diluted share), for the three months ended June 30, 2016 and
2015, respectively.
AMIC reported net income of $115.5 million
($14.22 per diluted share) for the six months ended June 30, 2016
compared to $1.6 million ($.20 per diluted share) for the six
months ended June 30, 2015. Income from continuing operations
was $1.8 million ($.19 per diluted share), and $1.2 million ($.14
per diluted share), for the six months ended June 30, 2016 and
2015, respectively.
Revenues decreased to $29.4 million and $58.8
million for the three months and six months ended June 30, 2016,
respectively, compared to revenues of $42.2 million and $81.6
million for the three months and six months ended June 30, 2015,
respectively, primarily due to the sale of Risk Solutions and the
exit from the medical stop-loss business.
Independence Holding Company (“IHC”) intends to
take the Company private on or about August 31, 2016 by way of a
statutory “short-form" merger. As a result, IHC will
indirectly own all of the outstanding shares of common stock of
AMIC.
About American Independence
Corp.
American Independence Corp. (AMIC) is a holding
company principally engaged in health insurance and
reinsurance. It provides specialized health coverage and
related services to commercial customers and individuals.
Through Independence American Insurance Company and its other
subsidiaries, it offers non-subscriber occupational accident, pet
insurance, short-term medical, vision, dental and various
supplemental products. Through its subsidiaries IHC Specialty
Benefits, Inc. (including through www.healthedeals.com and
www.aspiraAmas.com), IPA Direct, LLC and IPA Family, LLC, AMIC
markets products underwritten by its affiliated companies and
various products (including ACA plans and medical stop-loss) on
behalf of unaffiliated carriers.
Forward-Looking Statements
Certain statements and information contained in
this 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
that 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. AMIC
expressly disclaims any duty to update its forward-looking
statements unless required by applicable law.
|
American Independence Corp. |
Condensed Consolidated Statements of
Income |
(In thousands, except per share data) |
(Unaudited) |
|
|
|
Three Months |
|
Six Months |
|
|
Ended June 30, |
|
Ended June 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
2016 |
|
2015 |
REVENUES: |
|
|
|
|
|
|
|
|
|
Premiums
earned |
$ |
|
21,735 |
|
$ |
|
37,232 |
|
$ |
42,831 |
$ |
73,449 |
|
Agency
income |
|
|
5,094 |
|
|
|
3,639 |
|
|
10,594 |
|
6,116 |
|
Net
investment income |
|
|
1,155 |
|
|
|
485 |
|
|
2,625 |
|
1,084 |
|
Net
realized investment gains (losses) |
|
|
389 |
|
|
|
211 |
|
|
603 |
|
352 |
|
Other
income |
|
|
1,073 |
|
|
|
593 |
|
|
2,195 |
|
594 |
|
|
|
29,446 |
|
|
|
42,160 |
|
|
58,848 |
|
81,595 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES |
|
|
|
|
|
|
|
|
|
Insurance
benefits, claims and reserves |
|
|
13,508 |
|
|
|
25,296 |
|
|
28,474 |
|
49,266 |
|
Selling,
general and administrative expenses |
|
|
13,573 |
|
|
|
15,168 |
|
|
27,079 |
|
30,120 |
|
Amortization and depreciation |
|
|
303 |
|
|
|
217 |
|
|
583 |
|
332 |
|
|
|
27,384 |
|
|
|
40,681 |
|
|
56,136 |
|
79,718 |
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes |
|
|
2,062 |
|
|
|
1,479 |
|
|
2,712 |
|
1,877 |
Provision
for income taxes |
|
|
669 |
|
|
|
527 |
|
|
903 |
|
667 |
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
|
1,393 |
|
|
|
952 |
|
|
1,809 |
|
1,210 |
|
|
|
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
|
|
|
|
Income
(loss) from discontinued operations, before income taxes |
|
|
- |
|
|
|
(18 |
) |
|
122,034 |
|
819 |
|
Income
taxes on discontinued operations |
|
|
(22 |
) |
|
|
(4 |
) |
|
8,047 |
|
320 |
|
Income
(loss) from discontinued operations |
|
|
22 |
|
|
|
(14 |
) |
|
113,987 |
|
499 |
|
|
|
|
|
|
|
|
|
Net
income |
|
|
1,415 |
|
|
|
938 |
|
|
115,796 |
|
1,709 |
|
Less: Net
(income) loss attributable to the non-controlling interest |
|
|
88 |
|
|
|
51 |
|
|
266 |
|
100 |
|
|
|
|
|
|
|
|
|
Net
income attributable to American Independence Corp. |
$ |
|
1,327 |
|
$ |
|
887 |
|
$ |
115,530 |
$ |
1,609 |
|
|
|
|
|
|
|
|
|
Basic income per common share: |
|
|
|
|
|
|
|
|
|
Income from
continuing operations |
$ |
.16 |
$ |
.11 |
$ |
.19 |
$ |
.14 |
|
Income from
discontinued operations |
|
|
- |
|
|
|
- |
|
|
14.06 |
|
.06 |
|
|
Basic income per common
share |
$ |
.16 |
$ |
.11 |
$ |
14.25 |
$ |
.20 |
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding |
|
|
8,119 |
|
|
|
8,079 |
|
|
8,110 |
|
8,079 |
|
|
|
|
|
|
|
|
|
Diluted income per common share: |
|
|
|
|
|
|
|
|
|
Income from
continuing operations |
$ |
.16 |
$ |
.11 |
$ |
.19 |
$ |
.14 |
|
Income from
discontinued operations |
|
|
- |
|
|
|
- |
|
|
14.03 |
|
.06 |
|
|
Diluted income per
common share |
$ |
.16 |
$ |
.11 |
$ |
14.22 |
$ |
.20 |
|
|
|
|
|
|
|
|
|
Weighted-average diluted shares outstanding |
|
|
8,148 |
|
|
|
8,094 |
|
|
8,125 |
|
8,093 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American Independence Corp. |
Condensed Consolidated Balance Sheets |
(In thousands, except per share data) |
|
|
|
June 30, |
|
|
|
|
|
|
2016 |
|
|
|
December 31, |
ASSETS: |
|
(Unaudited) |
|
|
|
2015 |
|
|
Investments: |
|
|
|
|
|
|
Securities
purchased under agreements to resell |
$ |
|
7,527 |
|
|
$ |
|
4,595 |
|
|
Fixed
maturities available-for-sale, at fair value |
|
|
201,707 |
|
|
|
|
84,933 |
|
|
Equity
securities available-for-sale, at fair value |
|
|
2,608 |
|
|
|
|
2,594 |
|
|
|
|
|
|
|
|
Total
investments |
|
|
211,842 |
|
|
|
|
92,122 |
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
|
7,824 |
|
|
|
|
4,861 |
|
|
Restricted
cash |
|
|
1,379 |
|
|
|
|
1,377 |
|
|
Accrued
investment income |
|
|
1,626 |
|
|
|
|
727 |
|
|
Premiums
receivable |
|
|
15,988 |
|
|
|
|
16,654 |
|
|
Net deferred
tax asset |
|
|
14,723 |
|
|
|
|
13,944 |
|
|
Due from
reinsurers |
|
|
36,161 |
|
|
|
|
4,950 |
|
|
Goodwill |
|
|
5,703 |
|
|
|
|
5,703 |
|
|
Intangible
assets |
|
|
12,814 |
|
|
|
|
13,327 |
|
|
Due from
securities brokers |
|
|
403 |
|
|
|
|
1,051 |
|
|
Other
assets |
|
|
12,623 |
|
|
|
|
10,540 |
|
|
Assets
attributable to discontinued operations (Note 3) |
|
|
- |
|
|
|
|
31,718 |
|
|
|
|
|
|
|
|
TOTAL
ASSETS |
$ |
|
321,086 |
|
|
$ |
|
196,974 |
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY: |
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
|
Policy
benefits and claims |
$ |
|
47,512 |
|
|
$ |
|
43,764 |
|
|
Premium and
claim funds payable |
|
|
1,379 |
|
|
|
|
1,377 |
|
|
Commission
payable |
|
|
7,294 |
|
|
|
|
5,817 |
|
|
Accounts
payable, accruals and other liabilities |
|
|
10,396 |
|
|
|
|
11,192 |
|
|
Debt |
|
|
2,025 |
|
|
|
|
3,189 |
|
|
State income
taxes payable |
|
|
5,904 |
|
|
|
|
- |
|
|
Due to
securities brokers |
|
|
1,973 |
|
|
|
|
- |
|
|
Due to
reinsurers |
|
|
18,436 |
|
|
|
|
100 |
|
|
Liabilities
attributable to discontinued operations (Note 3) |
|
|
953 |
|
|
|
|
24,337 |
|
|
|
|
|
|
|
|
Total liabilities |
|
|
95,872 |
|
|
|
|
89,776 |
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY: |
|
|
|
|
|
|
American
Independence Corp. stockholders’ equity: |
|
|
|
|
|
|
|
Preferred
stock, $0.10 par value, 1,000 shares designated; no shares
issued |
|
|
|
|
|
|
|
and
outstanding |
|
|
- |
|
|
|
|
- |
|
|
|
Common stock,
$0.01 par value, 15,000,000 shares authorized; 9,181,793
shares |
|
|
|
|
|
|
|
issued,
respectively; 8,118,551 and 8,088,105 shares outstanding,
respectively |
|
|
92 |
|
|
|
|
92 |
|
|
|
Additional
paid-in capital |
|
|
88,658 |
|
|
|
|
88,637 |
|
|
|
Accumulated
other comprehensive gain (loss) |
|
|
1,740 |
|
|
|
|
(197 |
) |
|
|
Treasury
stock, at cost, 1,063,242 and 1,093,688 shares, respectively |
|
|
(9,878 |
) |
|
|
|
(10,161 |
) |
|
|
Retained
earnings |
|
|
141,026 |
|
|
|
|
25,549 |
|
|
|
Total American
Independence Corp. stockholders’ equity |
|
|
221,638 |
|
|
|
|
103,920 |
|
|
Non-controlling interest in subsidiaries |
|
|
3,576 |
|
|
|
|
3,278 |
|
|
|
Total equity |
|
|
225,214 |
|
|
|
|
107,198 |
|
|
|
TOTAL LIABILITIES
AND EQUITY |
$ |
|
321,086 |
|
|
$ |
|
196,974 |
|
|
|
|
|
|
|
|
|
|
|
|
|
CONTACT: LOAN NISSER
(646) 509-2107
www.americanindependencecorp.com
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