Exhibit 99.1
FOR IMMEDIATE RELEASE
Media Contact:
Suzie Boland
RFB Communications Group
813.259.0345
sboland@rfbcommunications.com
HOMEOWNERS CHOICE ANNOUNCES FOURTH QUARTER AND FISCAL YEAR 2008 RESULTS
Highlights:
Net income of $5,117,000 for the three months ended Dec. 31, 2008
Diluted earnings per share of $0.71 for the three months ended Dec. 31, 2008
Net income of $12,655,000 for the year ended Dec. 31, 2008
Diluted earnings per share of $2.08 for the year ended Dec. 31, 2008
Clearwater, Fla. – (March 10, 2009) – Homeowners Choice, Inc. (NASDAQ: HCII), a Florida-based provider of homeowners’ insurance, today announced its results of operations for the three months and year ended Dec. 31, 2008.
Net income for the fourth quarter 2008 was $5,117,000, or $0.71 per diluted share, compared with net income of $1,410,000 or $0.27 per diluted share for the fourth quarter 2007. For the year ended Dec. 31, 2008, net income was $12,655,000, or $2.08 per diluted share, compared with net income of $1,017,000 or $0.29 per diluted share for the prior year period. Net premiums earned for the fourth quarter and year ended Dec. 31, 2008 were $18,957,000 and $47,266,000 respectively.
Homeowners Choice first began operations in July of 2007. Consequently certain period to period results are not comparable.
Year 2008 Highlights:
| | • | | Income before income taxes of $20,795,000 |
| | • | | Increased policy count from 13,000 to 70,000 |
| | • | | Cash on hand and short term investments at year end of $108,642,000 |
| | • | | No mark to market losses in its investment portfolio |
| | • | | Remained substantially debt free |
| | • | | Increased book value per share from $2.77 to $5.42 |
| | • | | Moved headquarters from Port St Lucie to Clearwater, Florida |
| | • | | Completed initial public offering on July 31, 2008 |
“Our disciplined strategy has resulted in steady growth while maintaining profitability,” said Richard Allen, the company’s Chief Financial Officer. “We are also pleased to report that we are substantially debt free and did not incur any mark to market losses for the year.”
Chief Executive Officer, F.X. McCahill added, “By choosing our policyholders carefully, we have been able to provide them lower premiums while building a solid company. I am proud that in this time of uncertainty we achieved significant growth during 2008 and continued to be profitable.”
The company will host an earnings conference call Tuesday, March 10, 2009, at 4:30 p.m. ET during which McCahill and Allen will discuss the fourth quarter and year end results. The call will be available live at (877) 407-9210 (toll-free). International callers should call 201-689-8049. Analysts wishing to participate in the call should contact Jay Madhu, VP-Marketing and Investor Relations, at 727-213-3660. A live audio webcast of the call will be available at http://www.ir-site.com/hcpci/events.asp. Replays of the webcast will be available until June10, 2009.
About Homeowners Choice, Inc.
Homeowners Choice, Inc. is a Florida-based insurance holding company headquartered in Clearwater, Fla. The company was founded by individuals who were themselves Florida homeowners. Its wholly-owned subsidiary, Homeowners Choice Property & Casualty Insurance Company, Inc., which began operations in July 2007, provides property and casualty homeowners’ insurance, condominium owners’ insurance and tenants’ insurance solely to Florida property owners. The company’s principal executive offices are located at 2340 Drew St., Suite 200, Clearwater, Fla. 33765. More information about Homeowners Choice, Inc. is available at www.hcpci.com.
Forward-Looking Statements
This news release may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “estimate,” “expect,” “intend,” “plan” and “project” and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various risks and uncertainties. Some of these risks and uncertainties are identified in the company’s registration statement filed with the Securities and Exchange Commission. Should any risks or uncertainties develop into actual events, these developments could have material adverse effects on the company’s business, financial condition, and results of operations. Homeowners Choice, Inc. disclaims all obligations to update any forward-looking statements.
HOMEOWNERS CHOICE, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands)
| | | | | |
| | | At December 31,
2008 | | At December 31,
2007 |
| Assets | | | | | |
Cash and cash equivalents | | $ | 81,060 | | 15,729 |
Short-term investments | | | 27,582 | | 17,055 |
Accrued interest and dividends receivable | | | 63 | | 60 |
Premiums receivable | | | 5,021 | | 3,256 |
Note receivable | | | 450 | | — |
Ceded reinsurance balances receivable | | | 157 | | — |
Prepaid reinsurance premiums | | | 7,122 | | — |
Deferred policy acquisition costs | | | 6,292 | | 3,163 |
Property and equipment, net | | | 267 | | 36 |
Deferred income taxes | | | 3,563 | | 653 |
Other assets | | | 412 | | 41 |
| | | | | |
| | |
Total assets | | $ | 131,989 | | 39,993 |
| | | | | |
| | |
| Liabilities and Stockholders’ Equity | | | | | |
| | |
Losses and loss adjustment expenses | | | 14,763 | | 1,688 |
Unearned premiums | | | 67,219 | | 19,814 |
Ceded reinsurance balances payable | | | 6,136 | | 1,060 |
Assumed reinsurance balances payable | | | — | | 833 |
Accrued expenses | | | 1,535 | | 832 |
Income taxes payable | | | 4,704 | | 1,266 |
Other liabilities | | | 239 | | 162 |
| | | | | |
| | |
Total liabilities | | | 94,596 | | 25,655 |
| | | | | |
| | |
Stockholders’ equity: | | | | | |
Preferred stock (no par value 20,000,000 shares authorized, no shares issued or outstanding) | | | — | | — |
Common stock, (no par value, 40,000,000 shares authorized, 6,892,668 and 5,182,000 shares issued and outstanding in 2009 and 2008) | | | — | | — |
Additional paid-in capital | | | 23,783 | | 13,383 |
Retained earnings | | | 13,610 | | 955 |
| | | | | |
Total stockholders’ equity | | | 37,393 | | 14,338 |
| | | | | |
| | |
Total liabilities and stockholders’ equity | | $ | 131,989 | | 39,993 |
HOMEOWNERS CHOICE, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
| | | | | | | | | |
| | | Three Months Ended
December 31, | | Year Ended
December 31, |
| | | 2008 | | 2007 | | 2008 | | 2007 |
Revenue | | | | | | | | | |
Net premiums earned | | $ | 18,957 | | 5,342 | | 47,266 | | 7,034 |
Net investment income | | | 469 | | 312 | | 1,622 | | 602 |
Other | | | 53 | | — | | 645 | | 24 |
| | | | | | | | | |
| | | | |
Total revenue | | | 19,479 | | 5,654 | | 49,533 | | 7,660 |
| | | | | | | | | |
| | | | |
Expenses | | | | | | | | | |
| | | | |
Losses and loss adjustment expenses | | | 10,516 | | 1,758 | | 21,528 | | 2,742 |
Policy acquisition and other underwriting expenses | | | 317 | | 1,680 | | 7,210 | | 2,868 |
Pre-opening expenses | | | — | | — | | — | | 419 |
| | | | | | | | | |
Total expenses | | | 10,833 | | 3,438 | | 28,738 | | 6,029 |
| | | | | | | | | |
Income before income taxes | | | 8,646 | | 2,216 | | 20,795 | | 1,631 |
| | | | |
Income tax expense | | | 3,529 | | 806 | | 8,140 | | 614 |
| | | | | | | | | |
Net income | | $ | 5,117 | | 1,410 | | 12,655 | | 1,017 |
| | | | | | | | | |
Basic earnings per share | | $ | 0.74 | | 0.27 | | 2.15 | | 0.29 |
| | | | | | | | | |
Diluted earnings per share | | $ | 0.71 | | 0.27 | | 2.08 | | 0.29 |
| | | | | | | | | |
Dividends per share | | $ | — | | — | | — | | — |
| | | | |
Gross written premium | | $ | 58,101 | | 21,532 | | 109,330 | | 29,360 |
| | | | | | | | | |
| | | | |
Net written premium | | $ | 52,119 | | 20,011 | | 94,671 | | 26,848 |
