SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)of the Securities Exchange Act of 1934
For the quarterly period from July 1, 1998 to September 30, 1998
Commission File No. 0-3978
UNICO AMERICAN CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 95-2583928
(State or other jurisdiction of (I.R.S. Employee
incorporation or organization) Identification No.)
23251 Mulholland Drive, Woodland Hills, California 91364
(Address of Principal Executive Offices) (Zip Code)
(818) 591-9800
Registrant's telephone number
Securities registered pursuant to Section 12(b)of the Act:
None
(Title of each class)
Securities registered pursuant to Section 12(g)of the Act:
Common Stock, No Par Value
(Title of Class)
No Change
(Former name,former address and former fiscal year,if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
6,220,786
Number of shares of common stock outstanding as of November 5, 1998
1
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
UNICO AMERICAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30 December 31
1998 1997
---- ----
ASSETS
Investments
Available for sale:
Fixed maturities, at market value (amortized cost: September
30, 1998 $94,281,485; December 31, 1997 $86,106,571) $98,107,313 $87,965,590
Equity securities at market (cost: September 30, 1998
$1,897,317; December 31, 1997 $230,460) 1,769,000 223,100
Short-term investments, at cost 4,753,556 6,137,495
----------- ----------
Total Investments 104,629,869 94,326,185
Cash 391,147 55,768
Accrued investment income 1,873,089 1,807,364
Premiums and notes receivable, net 6,430,394 7,404,606
Reinsurance recoverable:
Paid losses and loss adjustment expenses 347,024 56,379
Unpaid losses and loss adjustment expenses 1,248,913 1,413,603
Prepaid reinsurance premiums 15,373 945,563
Deferred policy acquisition costs 4,864,173 4,886,684
Property and equipment (net of accumulated depreciation) 186,011 203,709
Deferred income taxes - 1,005,865
Other assets 485,440 836,658
----------- -----------
Total Assets $120,471,433 $112,942,384
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Unpaid losses and loss adjustment expenses $42,288,381 $42,004,851
Unearned premiums 19,242,772 21,673,009
Advance premiums 1,576,922 1,368,114
Funds held as security for performance 697,866 723,066
Accrued expenses and other liabilities 4,206,866 2,095,567
Income taxes payable 23,250 16,993
Deferred income taxes payable 15,275 -
---------- ----------
Total Liabilities $68,051,332 $67,881,600
---------- ----------
STOCKHOLDERS' EQUITY
Common stock, no par - authorized 10,000,000 shares, issued and outstanding
shares 6,220,786 at September 30, 1998
and 6,153,706 at December 31, 1997 2,886,952 2,838,058
Accumulated other comprehensive income:
Net unrealized gains on investments classified as available for sale 2,440,357 1,222,095
Retained earnings 47,092,792 41,000,631
---------- ----------
Total Stockholders' Equity $52,420,101 $45,060,784
---------- ----------
Total Liabilities and Stockholders' Equity $120,471,433 $112,942,384
=========== ===========
See notes to unaudited consolidated financial statements.
2
UNICO AMERICAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30 September 30
------------ ------------
1998 1997 1998 1997
---- ---- ---- ----
REVENUES
Insurance Company Revenues
Premium earned $10,048,497 $10,997,409 $31,018,804 $31,784,235
Premium ceded 1,537,040 1,856,727 4,308,176 4,410,728
---------- ---------- ---------- ----------
Net premium earned 8,511,457 9,140,682 26,710,628 27,373,507
Net investment income 1,385,234 1,239,020 4,045,696 3,584,168
Net realized investment gains 124,939 24,174 141,169 25,093
Other income 75 223 1,138 383
---------- ---------- ---------- ----------
Total Insurance Company Revenues 10,021,705 10,404,099 30,898,631 30,983,151
Other Revenues from Insurance Operations
Gross commissions and fees 1,456,945 1,422,735 4,242,324 4,320,194
Investment income 63,173 35,894 166,786 105,607
Finance charges and late fees earned 261,475 302,555 779,393 894,480
Other income 875 729 6,004 7,083
---------- ---------- ---------- ----------
Total Revenues 11,804,173 12,166,012 36,093,138 36,310,515
---------- ---------- ---------- ----------
EXPENSES
Losses and loss adjustment expenses 4,372,848 4,846,266 13,567,529 14,742,677
Policy acquisition costs 2,286,373 2,726,391 7,312,011 7,965,440
Salaries and employee benefits 1,046,831 885,196 3,088,568 2,745,272
Commissions to agents/brokers 275,964 242,139 756,502 811,600
Other operating expenses 645,148 653,822 1,775,019 2,007,258
----------- ----------- ----------- ----------
Total Expenses 8,627,164 9,353,814 26,499,629 28,272,247
---------- ---------- ---------- ----------
Income Before Taxes 3,177,009 2,812,198 9,593,509 8,038,268
Income Tax Provision 997,213 861,392 3,065,893 2,437,724
---------- ----------- ---------- ----------
Net Income $2,179,796 $1,950,806 $6,527,616 $5,600,544
========= ========= ========= =========
PER SHARE DATA:
Basic
Earnings Per Share $0.35 $0.32 $1.06 $0.91
Shares Outstanding 6,220,753 6,153,203 6,185,212 6,125,001
Diluted
Earnings Per Share $0.34 $0.30 $1.02 $0.88
Shares Outstanding 6,421,286 6,403,457 6,428,962 6,396,280
See notes to unaudited consolidated financial statements.
3
UNICO AMERICAN CORPORATION AND SUBSIDIARIES
STATEMENT OF COMPREHENSIVE INCOME
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30 September 30
1998 1997 1998 1997
---- ---- ---- ----
Net income $2,179,796 $1,950,806 $6,527,616 $5,600,544
Other changes in comprehensive income
net of tax:
Unrealized gains on securities
classified as available-for-sale arising
during the period 1,133,531 462,926 1,218,262 209,688
Less: reclassification adjustment for
gains included in net income (82,460) (15,955) (93,172) (16,562)
--------- --------- --------- ---------
Comprehensive Income $3,230,867 $2,397,777 $7,652,706 $5,793,670
========= ========= ========= =========
See notes to unaudited consolidated financial statements.
4
UNICO AMERICAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
1998 1997
---- ----
Cash Flows from Operating Activities:
Net Income $6,527,616 $5,600,544
Adjustments to reconcile net income to net cash from operations
Depreciation and amortization 73,120 63,438
Bond amortization, net 495,668 393,858
Net realized (gain) on sale of securities (141,169) (25,093)
Changes in assets and liabilities
Premium, notes and investment income receivable 908,487 1,089,572
Reinsurance recoverable (125,955) 592,123
Prepaid reinsurance premiums 930,190 395,025
Deferred policy acquisitions costs 22,511 (14,715)
Other assets 351,218 (38,956)
Reserve for unpaid losses and loss adjustment expenses 283,530 2,615,254
Unearned premium reserve (2,430,237) (128,879)
Funds held as security and advanced premiums 183,608 (20,037)
Accrued expenses and other liabilities 2,111,299 (111,733)
Income taxes current/deferred 399,807 33,077
--------- ----------
Net Cash Provided from Operations 9,589,693 10,443,478
--------- ----------
Investing Activities
Purchase of fixed maturity investments (17,457,379) (15,372,354)
Proceeds from maturity of fixed maturity investments 7,794,600 5,098,000
Proceeds from sale of fixed maturity investments 1,041,250 -
Purchase of equity securities - cost (3,128,440) (1,019,500)
Proceeds from sale of equity securities 1,523,994 814,132
Net increase in short-term investments 1,413,644 1,336,062
Additions to property and equipment (55,422) (44,307)
---------- ---------
Net Cash (Used) by Investing Activities (8,867,753) (9,187,967)
--------- ---------
Financing Activities
Proceeds from issuance of common stock 48,894 359
Repayment of note payable - bank - (750,001)
Dividends paid to shareholders (435,455) (430,724)
------- ---------
Net Cash (Used) by Financing Activities (386,561) (1,180,366)
------- ---------
Net Increase in Cash 335,379 75,145
Cash at beginning of period 55,768 82,637
------- --------
Cash at End of Period $391,147 $157,782
======= ========
Supplemental Cash Flow Information
Cash Paid During the Period for:
Interest $121 $21,954
Income taxes $2,505,000 $2,295,000
See notes to unaudited consolidated financial statements.
5
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
Nature of Business
Unico American Corporation ("Unico") is an insurance holding company. Unico and
its subsidiaries, all of which are wholly owned (the "Company") provide,
primarily in California, property, casualty, health and life insurance, and
related premium financing.
Principles of Consolidation
The accompanying unaudited consolidated financial statements include the
accounts of Unico American Corporation and its subsidiaries. All significant
inter-company accounts and transactions have been eliminated in consolidation.
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles ("GAAP") for interim
financial information and the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by GAAP for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been included. Operating
results for the three and nine months ended September 30, 1998, are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1998. Quarterly financial statements should be read in conjunction
with the financial statements and related notes in the Company's 1997 Annual
Report on Form 10-K as filed with the Securities and Exchange Commission.
Recently Issued Accounting Standards
The Company has adopted Statement of Financial Accounting Standards ("SFAS") No.
130, "Reporting Comprehensive Income," which establishes standards for the
reporting and displaying of comprehensive income and its components. All items
required to be recognized as components of comprehensive income must be reported
in a financial statement that is displayed with the same prominence as other
financial statements. SFAS No. 130 became effective for financial statements
with fiscal years beginning after December 15, 1997.
NOTE 2 - INCENTIVE STOCK OPTION PLAN
- ------------------------------------
The Company's 1985 stock option plan provided for the grant of "incentive stock
options" to officers and key employees. The plan covers an aggregate of
1,500,000 shares of the Company's common stock (subject to adjustment in the
case of stock splits, reverse stock splits, stock dividends, etc.). As of
September 30, 1998, there were 286,366 options outstanding of which 216,035 were
currently exercisable. There are no additional options available for future
grant under the 1985 plan.
6
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
NOTE 3 - EARNINGS PER SHARE
- ---------------------------
The following table represents the reconciliation of the numerators and
denominators of the Company's basic earnings per share and diluted earnings per
share computations reported on the Consolidated Statements of Operations for the
three months ended September 30, 1998 and 1997, and for the nine months ended
September 30, 1998 and 1997:
Three Months Ended Nine Months Ended
September 30 September 30
1998 1997 1998 1997
---- ---- ---- ----
Basic Earnings Per Share
Net income numerator $2,179,796 $1,950,806 $6,527,616 $5,600,544
========= ========= ========= =========
Weighted average shares outstanding
denominator 6,220,753 6,153,203 6,185,212 6,125,001
========= ========= ========= =========
Basic Earnings Per Share $0.35 $0.32 $1.06 $0.91
Diluted Earnings Per Share
Net income numerator $2,179,796 $1,950,806 $6,527,616 $5,600,544
========= ========= ========= =========
Weighted average shares outstanding
denominator 6,220,753 6,153,203 6,185,212 6,125,001
Effect of diluted securities 200,533 250,254 243,750 271,279
--------- --------- --------- ---------
Diluted shares outstanding denominator 6,421,286 6,403,457 6,428,962 6,396,280
========= ========= ========= =========
Diluted Earnings Per Share $0.34 $0.30 $1.02 $0.88
7
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(a) Liquidity and Capital Resources:
Due to the nature of the Company's business (insurance and insurance services)
and whereas Company growth does not normally require material reinvestments of
profits into property or equipment, the cash flow generated from operations
usually results in improved liquidity for the Company.
Crusader Insurance Company ("Crusader"), the Company's property and casualty
insurance subsidiary, generates a significant amount of cash as a result of its
holdings of unearned premium reserves and reserves for loss payments. Crusader's
loss and loss adjustment expense payments are the most significant cash flow
requirement of the Company. These payments are continually monitored and
projected to ensure that the Company has the liquidity to cover these payments
without the need to liquidate its investments. As of September 30, 1998, the
Company had cash and cash investments of $101,323,505 (at amortized cost) of
which $95,574,748 (94%) were investments of Crusader.
As of the quarter ended September 30, 1998, the Company had $94,281,485 (at
amortized cost) or 93% of its invested assets in fixed maturity obligations. In
accordance with Statement of Financial Accounting Standard No. 115, "Accounting
for Certain Investments in Debt and Equity Securities," the Company is required
to classify its investments in debt and equity securities into one of three
categories: held-to-maturity, available-for-sale or trading securities. Although
all of the Company's fixed maturity investments are classified as
available-for-sale, the Company's investment guidelines place primary emphasis
on buying and holding high-quality fixed maturity investments until their
maturities.
The Company's investments in fixed maturity obligations included $34,298,371
(36%) of pre-refunded state and municipal tax-exempt bonds, $13,615,259 (15%) of
U.S. treasury securities, $46,067,855 (49%) in high-quality industrial bonds and
$300,000 of certificates of deposit. The tax-exempt interest income earned for
the three months and nine months ended September 30, 1998, was $417,366 and
$1,283,319, respectively. The tax-exempt interest income earned for the three
months and nine months ended September 30, 1997, was $448,986 and $1,353,148,
respectively.
The balance of the Company's investments were invested in equity securities and
high-quality, short-term investments that include a U.S. treasury bill, bank
money market accounts, certificates of deposit, commercial paper and a
short-term treasury money market fund.
The Company's investment policy limits investments in any one company to
$1,500,000. This limitation excludes bond premiums paid in excess of par value
and U.S. government or U.S. government guaranteed issues. The Company also
limits its holdings of equity securities to no greater than five percent of
stockholders' equity. All of the Company's investments are high-grade investment
quality; all state and municipal tax-exempt fixed maturity investments are
pre-refunded issues, and all certificates of deposit are FDIC insured.
On August 14, 1998, the company paid the $0.07 (seven cents) per common share
cash dividend that was declared by the Board of Directors on May 1, 1998, to
shareholders of record at the close of business on July 31, 1998.
Although material capital expenditures may also be funded through borrowings,
the Company believes that its cash and short-term investments at September 30,
1998, net of trust restriction of $2,769,593, statutory deposits of $2,725,000,
and dividend restriction between Crusader and Unico plus the cash to be
generated from operations, should be sufficient to meet its operating
requirements during the next twelve months without the necessity of borrowing
funds.
There are no material commitments for capital expenditures as of the date of
this report.
Year 2000. The Year 2000 issue is the result of computer programs being written
utilizing two digits rather than four digits to define a year. Any computer
programs which have date sensitive software utilizing a two digit year would
recognize a year of "00" as 1900 rather than 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities. The Company has assessed its Year
2000 issues and is in the process of making any
8
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)
necessary modifications to its computer systems. This project is estimated to be
completed by the end of 1998, prior to any anticipated impact on the Company's
operating systems. Portions of this project have been completed and tested as of
September 30, 1998. The cost of this project has been charged to current
operations as incurred and will not have a material effect on the Company's
results of operation or financial position.
While the Year 2000 considerations are not expected to materially impact the
Company's internal operations, they may have an effect on some of the Company's
agents and brokers, suppliers, financial institutions and others with whom the
Company conducts business, and thus indirectly affect the Company. It is not
possible to quantify the aggregate cost to the Company with respect to external
Year 2000 problems, if any, although the Company does not presently anticipate
it will have a material adverse impact on its business.
(b) Results of Operations:
All comparisons made in this discussion are comparing the three and nine months
ended September 30, 1998, to the three and nine months ended September 30, 1997,
unless otherwise indicated.
The Company's net income increased $228,990 (12%) to $2,179,796 for the three
months and $927,072 (17%) to $6,527,616 for the nine months ended September 30,
1998, compared to net income of $1,950,806 for the three months and $5,600,544
for the nine months ended September 30, 1997. Total revenues decreased $361,839
(3%) for the three months and decreased $217,377 (1%) for the nine months ended
September 30, 1998, when compared to the three and nine months ended September
30, 1997.
Premium earned before reinsurance decreased $948,912 (9%) to $10,048,497 for the
three months and decreased $765,431 (2%) to $31,018,804 for the nine months
ended September 30, 1998, compared to the three and nine months ended September
30, 1997. Crusader's commercial package business represents approximately 97% of
insurance premiums earned as of September 30, 1998, compared to 96% as of
September 30, 1997.
Premium written before reinsurance decreased $1,458,352 (14%) to $9,035,312 for
the three months and decreased $3,066,789 (10%) to $28,588,566 for the nine
months ended September 30, 1998, compared to the three and nine months ended
September 30, 1997. This decrease in written premium is primarily due to a
change in the marketing strategy for the states of Washington and Oregon where
premium decreased $1,286,266 for the three months and decreased $2,445,907 for
the nine months ended September 30, 1998, compared to the three and nine months
ended September 30, 1997. The Company began marketing direct to retail agents
and brokers in these states and ceased marketing through its former general
agent. While this has resulted in a temporary reduction in premium written, the
Company expects the long-term result to be increased revenues with reduced
acquisition expense.
Ceded premium earned was 15% of gross earned premium for the three months and
14% of gross earned premium for the nine months ended September 30, 1998,
compared to 17% for the three months and 14% for the nine months ended September
30, 1997.
Net investment income, excluding realized investment gains, increased $173,493
(14%) to $1,448,407 for the three months and $522,707 (14%) to $4,212,482 for
the nine months ended September 30, 1998, compared to investment income of
$1,274,914 for the three months and $3,689,775 for the nine months ended
September 30, 1997. This increase was primarily due to a 13% increase (at
amortized cost) in invested assets.
The Company realized investment gains of $124,939 for the three months and
$141,169 for the nine months ended September 30, 1998, compared to investment
gains of $24,174 for the three months and $25,093 for the nine months ended
September 30, 1997. The increase in investment gains is the result of gains of
$46,181 from the sales of equity securities and a gain of $78,758 from the sale
of a U.S. treasury note. The proceeds of the U.S. treasury note, which was sold
in the quarter ended September 30, 1998, were reinvested into a high-grade
corporate note with approximately the same maturity date, but with a higher
yield.
9
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)
Gross commission and fee income increased $34,210 (2%) to $1,456,945 for the
three months and decreased $77,870 (2%) to $4,242,324 for the nine months ended
September 30, 1998, compared to the three and nine months ended September 30,
1997. This increase for the three months and the decrease for the nine months
consisted of the following:
Three Months Nine Months
------------ -----------
Workers' compensation program $ 4,940 $ 41,371
Daily automobile rental insurance program 46,543 63,949
Health and life insurance program 83,846 46,424
Service fee income (94,996) (154,548)
Commercial automobile insurance program (discontinued) (6,123) (75,066)
------ -------
Net increase (decrease) in commission and fee income $34,210 $(77,870)
====== ======
The decrease in service fee income for the three and nine months ended September
30, 1998, was primarily related to the decrease in written premium.
Losses and loss adjustment expenses were 51% of net premium earned for the three
months and the nine months ended September 30, 1998, compared to 53% of net
premium earned for the three months and 54% of net premium earned for the nine
months ended September 30, 1997. This decrease was primarily due to the
favorable development of prior period losses.
Policy acquisition costs consist of commissions, premium taxes, inspection fees,
and certain other underwriting costs that are related to the production of
Crusader insurance policies. These costs include both Crusader expenses and
allocated expenses of other Unico subsidiaries. Crusader's reinsurers pay
Crusader a ceding commission, which is primarily a reimbursement of the
acquisition cost related to the ceded premium. Policy acquisition costs, net of
ceding commission, are deferred and amortized as the related premiums are
earned. These costs were 27% of net premium earned for the three and the nine
months ended September 30, 1998, compared to 30% of net premium earned for the
three months and 29% of net premium earned for the nine months ended September
30, 1997.
Salaries and employee benefits increased $161,635 (18%) to $1,046,831 for the
three months and increased $343,296 (13%) to $3,088,568 for the nine months
ended September 30, 1998, compared to salary and employee benefits of $885,196
for the three months and $2,745,272 for the nine months ended September 30,
1997.
Commissions to agents/brokers increased $33,825 (14%) to $275,964 for the three
months and decreased $55,098 (7%) to $756,502 for the nine months ended
September 30, 1998, compared to the three and nine months ended September 30,
1997. The increase in the three months is primarily due to a related increase in
revenue in the health and life program, which had experienced declines in the
previous periods. The decrease in the nine month period is primarily related to
the sale of the commercial automobile program to a non-affiliated third party in
June, 1997.
Other operating expenses decreased $8,674 (1%) for the three months and
decreased $232,239 (12%) for the nine months ended September 30, 1998, compared
to the three and nine months ended September 30, 1997. This decrease for the
nine months was primarily due to a $240,155 reduction in interest expense
payable due to a settlement of federal income tax issues for the fiscal years
ended March 31, 1990, through March 31, 1994, which were under appeal.
Income tax provision increased 1.6% to 32.0% of income before taxes for the nine
months ended September 30, 1998, compared to the nine months ended September 30,
1997. This increase was primarily due to an $82,646 decrease in non-taxable
income (interest on municipal bonds and dividends on equity securities) and a
$64,441 increase in the federal income tax provision resulting from the full
settlement of all tax issues which were under appeal regarding the Company's
federal income tax returns for the fiscal years ended March 31, 1990, through
March 31, 1994.
The effect of inflation on net income of the Company during the three and nine
months ended September 30, 1998 and 1997 was not significant.
10
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (continued)
Forward looking statements
Information contained in this discussion, other than historical information, are
considered "forward looking statements" and may be subject to change based on
various important factors and uncertainties. Some, but not all, of the factors
and uncertainties that may cause actual results to differ significantly from
those expected in any forward looking statements are disclosed in the Company's
1997 Form 10-K as filed with the Securities and Exchange Commission. Further,
the statements herein concerning the effects of the Company's stated expectation
as to the long-term results of marketing in the states of Washington and Oregon
directly to retail agents and brokers rather than through the Company's former
general agent are forward looking statements which involve risks and
uncertainties that could cause actual results to differ materially from these
forward looking statements. With respect to the statement concerning the effects
of the change in marketing in the states of Washington and Oregon, factors which
would cause the actual results to differ materially include the Company's
ability to effectively market to retail agents and brokers in those states, the
willingness of the retail agents and brokers in those states to deal directly
with the Company, and general economic conditions and competition in those
states.
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
PART II - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K:
None.
11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned there unto authorized.
UNICO AMERICAN CORPORATION
Date: November 12, 1998 By: /s/ERWIN CHELDIN
----------------
Erwin Cheldin
Chairman of the Board, President and Chief
Executive Officer, (Principal Executive Officer)
Date: November 12, 1998 By: /s/LESTER A. AARON
------------------
Lester A. Aaron
Treasurer, Chief Financial Officer, (Principal
Accounting and Principal Financial Officer)
12