Exhibit 99.1
GREENLIGHT RE REPORTS SECOND QUARTER 2007 RESULTS
Fully diluted book value per share increased 24.7% YOY
GRAND CAYMAN, Cayman Islands (August 13, 2007) - Greenlight Capital Re, Ltd. (NASDAQ: GLRE) today announced financial results for the second quarter ended June 30, 2007. The company reported net income of $21.3 million for the second quarter 2007 compared to $6.6 million for the same period in 2006. On a fully diluted per share basis, net income was $0.76, compared to $0.31 for the second quarter of 2006.
Fully diluted book value per share increased to $15.81 at June 30, 2007, a 24.7% increase over $12.68 at June 30, 2006. The 2006 diluted book value is adjusted for a related party promissory note receivable that was outstanding at the time.
For the six months ended June 30, 2007, net income was $8.2 million compared to $22.0 million for the same period in 2006. On a fully diluted per share basis, net income was $0.33, compared to $1.03 for the six months ended June 30, 2006.
“We are pleased with the successful launch of Greenlight Re as a public company and with the reception that it has received from the marketplace,” said David Einhorn, Chairman of the Board of Directors. “We believe that Greenlight Re’s differentiated strategy should generate compelling long-term growth in book value per share.”
Operating highlights for the second quarter and first half of 2007 include the following:
| • | Gross written premiums were $65.4 million compared to $11.7 million in the second quarter of 2006 while net earned premiums were $25.0 million compared to $2.4 million. For the first six months, gross written premiums were $103.5 million compared to $11.7 million for the first six months of 2006 while net earned premiums were $45.9 million compared to $2.4 million. |
| • | Net investment income in the second quarter was $19.9 million, a return of 6.8%, compared to $7.2 million in the second quarter of 2006, a 2.9% return. For the first six months of 2007, net investment income was $5.5 million compared to $24.4 million in the six months ended June 30, 2006. |
| • | On May 30, 2007, Greenlight Re completed an initial public offering and concurrent private placement which raised approximately $255.7 million net of fees and expenses. At the price of $19 per ordinary share, the IPO and concurrent private placement increased book value by approximately 10%. |
| • | There were no catastrophe losses reported during the quarter and none have been reported year to date. |
“Our second quarter results represent important progress in our ongoing effort to deliver long-term growth in book value per share for our shareholders through our differentiated reinsurance model,” said Greenlight Re Chief Executive Officer Len Goldberg. “Our strategy is focused on expanding a profitable underwriting portfolio and executing a value-oriented investment approach. This strategy allowed us to recognize an increase in our fully diluted book value per share for the twelve months ended June 30, 2007. We believe this active management of both sides of the balance sheet positions us well to earn above average risk adjusted returns on the capital and float inherent in our business.”
Conference Call Details
Greenlight Re will hold a live conference call to discuss its financial results for the second quarter 2007 on August 14, 2007 at 9:00 a.m. EDT. To participate, please dial in to the conference call at (866) 600-0797 (domestic) or (706) 634-6541 (international), access code 10445407. The conference call topic is Greenlight Re Earnings Conference Call.
A telephone replay of the call will be available from 10:30 a.m. EDT on August 14, until 11:59 p.m. EDT on August 21. The replay of the call may be accessed by dialing (800) 642-1687 (domestic) or (706) 645-9291 (international), access code 10445407.
Forward-Looking Statements
This news release may contain forward-looking statements within the meaning of the U.S. federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the U.S. Federal securities laws. These statements involve risks and uncertainties that could cause actual results to differ materially from those contained in forward-looking statements made on behalf of the Company. These risks and uncertainties include the impact of general economic conditions and conditions affecting the insurance and reinsurance industry, the adequacy of our reserves, our ability to assess underwriting risk, trends in rates for property and casualty insurance and reinsurance, competition, investment market fluctuations, trends in insured and paid losses, catastrophes, regulatory and legal uncertainties and other factors described in our prospectus dated May 24, 2007 filed with the Securities Exchange Commission. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About Greenlight Capital Re, Ltd.
Greenlight Re (www.greenlightre.ky) is a specialty property and casualty reinsurance company based in the Cayman Islands. The Company provides a variety of custom-tailored reinsurance solutions to the insurance, risk retention group, captive and financial marketplaces. Established in 2004, Greenlight Re selectively offers customized reinsurance solutions in markets where capacity and alternatives are limited. With a focus on deriving superior returns from both sides of the balance sheet, Greenlight Re’s assets are managed according to a value-oriented equity-focused strategy that complements the Company’s business goal of long-term growth in book value per share.
Contact:
Alex Stanton
Stanton Crenshaw Communications
(212) 780-1900
alex@stantoncrenshaw.com
GREENLIGHT CAPITAL RE, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2007 and December 31, 2006
(expressed in thousands of U.S. dollars, except per share and share amounts)
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| June 30, |
| December 31, |
| ||
ASSETS |
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Investments in securities |
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Fixed maturities, trading at fair value |
| $ | 2,163 |
| $ | — |
|
Equity investments, trading at fair value |
|
| 501,175 |
|
| 238,799 |
|
Other investments, at estimated fair value |
|
| 3,665 |
|
| 4,723 |
|
Total investments in securities |
|
| 507,003 |
|
| 243,522 |
|
Cash and cash equivalents |
|
| 85,182 |
|
| 82,704 |
|
Restricted cash and cash equivalents |
|
| 303,270 |
|
| 154,720 |
|
Financial contracts receivable, at fair value |
|
| 1,151 |
|
| — |
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Investment income receivable |
|
| 2,551 |
|
| 454 |
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Reinsurance balances receivable |
|
| 61,057 |
|
| 19,622 |
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Loss and loss adjustment expense recoverables |
|
| 5,269 |
|
| — |
|
Deferred acquisition costs |
|
| 15,275 |
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| 16,282 |
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Unearned premiums ceded |
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| 20,854 |
|
| — |
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Other assets |
|
| 1,200 |
|
| 1,304 |
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Total assets |
| $ | 1,002,812 |
| $ | 518,608 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Liabilities |
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Securities sold, not yet purchased, at fair value |
| $ | 241,317 |
| $ | 124,044 |
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Dividends payable on securities sold, not yet purchased |
|
| 696 |
|
| 354 |
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Financial contracts payable, at fair value |
|
| 27,579 |
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| 8,640 |
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Loss and loss adjustment expense reserves |
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| 28,628 |
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| 4,977 |
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Unearned premium reserves |
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| 97,758 |
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| 47,546 |
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Reinsurance balances payable |
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| 22,521 |
|
| 4,236 |
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Funds withheld |
|
| 2,753 |
|
| — |
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Accounts payable and accrued expenses |
|
| 2,698 |
|
| 2,020 |
|
Performance and management fees payable to related party |
|
| 1,349 |
|
| 14,624 |
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Total liabilities |
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| 425,299 |
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| 206,441 |
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Shareholders’ equity |
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Preferred share capital (par value $0.10; authorized, 50,000,000; none |
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issued) |
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| — |
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| — |
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Ordinary share capital (Class A: par value $0.10; authorized, |
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100,000,000; issued and outstanding, 29,847,787 (2006: 16,507,228); |
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Class B: par value $0.10; authorized, 25,000,000; issued and |
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outstanding, 6,254,949 (2006: 5,050,000)) |
|
| 3,610 |
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| 2,156 |
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Additional paid-in capital |
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| 475,686 |
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| 219,972 |
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Retained earnings |
|
| 98,217 |
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| 90,039 |
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Total shareholders’ equity |
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| 577,513 |
|
| 312,167 |
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Total liabilities and shareholders’ equity |
| $ | 1,002,812 |
| $ | 518,608 |
|
GREENLIGHT CAPITAL RE, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
For the three and six months ended June 30, 2007 and 2006
(expressed in thousands of U.S. dollars, except per share and share amounts)
|
| Three Months Ended |
| Six Months Ended |
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|
| 2007 |
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| 2006 |
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| 2007 |
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| 2006 |
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Revenues |
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Gross premiums written |
| $ | 65,445 |
| $ | 11,662 |
| $ | 103,509 |
| $ | 11,662 |
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Gross premiums ceded |
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| (14,534 | ) |
| — |
|
| (28,277 | ) |
| — |
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Net premiums written |
|
| 50,911 |
|
| 11,662 |
|
| 75,232 |
|
| 11,662 |
|
Change in net unearned premium reserves |
|
| (25,939 | ) |
| (9,249 | ) |
| (29,339 | ) |
| (9,249 | ) |
Net premiums earned |
|
| 24,972 |
|
| 2,413 |
|
| 45,893 |
|
| 2,413 |
|
Net investment income |
|
| 19,924 |
|
| 7,192 |
|
| 5,543 |
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| 24,387 |
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Interest income on related party promissory note receivable |
|
| — |
|
| 272 |
|
| — |
|
| 562 |
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Total revenues |
|
| 44,896 |
|
| 9,877 |
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| 51,436 |
|
| 27,362 |
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Expenses |
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Loss and loss adjustment expenses incurred |
|
| 11,138 |
|
| — |
|
| 20,126 |
|
| — |
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Acquisition costs |
|
| 9,515 |
|
| 1,093 |
|
| 17,227 |
|
| 1,143 |
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General and administrative expenses |
|
| 2,926 |
|
| 2,221 |
|
| 5,905 |
|
| 4,186 |
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Total expenses |
|
| 23,579 |
|
| 3,314 |
|
| 43,258 |
|
| 5,329 |
|
Net income |
| $ | 21,317 |
| $ | 6,563 |
| $ | 8,178 |
| $ | 22,033 |
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Earnings per share |
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Basic |
| $ | 0.78 |
| $ | 0.31 |
| $ | 0.33 |
| $ | 1.03 |
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Diluted |
|
| 0.76 |
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| 0.31 |
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| 0.33 |
|
| 1.03 |
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Weighted average number of ordinary shares used in the |
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determination of |
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Basic |
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| 27,472,993 |
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| 21,346,666 |
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| 24,515,973 |
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| 21,290,186 |
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Diluted |
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| 27,980,421 |
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| 21,445,642 |
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| 24,895,878 |
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| 21,370,858 |
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