EXHIBIT 99.1
FOR IMMEDIATE RELEASE
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CONTACT:
EDWARD J. LAWSON, PRESIDENT AND CHAIRMAN OF THE BOARD
21ST CENTURY HOLDING COMPANY
(954) 308-1257 OR (954) 581-9993
OR
INVESTOR RELATIONS COUNSEL:
THE EQUITY GROUP INC.
DEVIN SULLIVAN
(212) 836-9608
21ST CENTURY HOLDING COMPANY REPORTS
RECORD Q2 EARNINGS OF $0.69 PER SHARE
PLANTATION, FLORIDA, AUGUST 4, 2003 - 21st Century Holding Company
(Nasdaq: TCHC), today reported results for the second quarter and six months
ended June 30, 2003 (see attached tables).
For the second quarter of 2003, the Company reported net income of
$2,113,934, or $0.66 per diluted share based on 3,194,747 average diluted shares
outstanding, as compared to net income of $32,041, or $0.01 per share, based on
3,020,126 average diluted shares outstanding for the second quarter of 2002.
These results exceeded Company guidance of $0.60 per share.
Net premium earned in the second quarter of 2003 increased 68.8% to
$10.9 million from $6.5 million in the same period last year. This increase is
due primarily to changes in the Company's reinsurance treaties and increased
property writings.
Total revenue for the second quarter of 2003 increased 79% to $14.9
million from $8.4 million in the same period last year.
Net income and total revenue for the second quarter of 2002 included a
$1.5 million write down related to the Company's investment in WorldCom bonds.
EDWARD J. (TED) LAWSON, PRESIDENT & CHAIRMAN OF THE BOARD, said, "These
record results reflect the continued, successful execution of our business plan
and the validity of our vertically integrated business model. By controlling all
aspects of the insurance underwriting, distribution and claims process, 21st
Century has been able to generate revenues and profits from each of the
businesses that we operate, while allowing us to effectively manage expenses and
provide the highest level of customer and agent care."
Mr. Lawson continued, "We are also focused on growing our existing
products and creating new streams of revenue. In this regard, our American
Vehicle Insurance Company subsidiary launched its recently approved general
liability product in the state of Florida in June. This line of business is
slated to be a significant contributor to our top and bottom line growth over
time. Furthermore, our goal of becoming a regional insurance carrier is now
beginning to unfold as American Vehicle has just recently been approved to write
general liability insurance in Georgia on a surplus lines basis and has also
applied for a license to underwrite and sell personal automobile and general
liability insurance in Alabama. Other states in the Southeast will follow.
"During the year our loss ratios in our automobile division have
increased and our loss ratios in property have decreased. To correct our auto
loss ratio, the Company is increasing auto rates by a projected 15-20% starting
in October and shifting its writings from auto into general liability and
property lines, which typically produce higher margins and lower loss ratios.
These changes are expected to result in higher revenues and earnings starting in
the first quarter of 2004. In our fourth quarter, 70% of our net writings are
projected to be in property and general liability lines versus less than 30% in
2002.
"Our financial condition has recently been bolstered by a $7.5 million
6% subordinated debt offering, proceeds of which will be used to strengthen our
balance sheet and provide funds to expand into the Southeast. With these added
funds and our continued expectations of strong profitability, we remain
confident of our financial condition. Investments during 2003 increased by 43%
to $36.4 million due to increased writings and have been conservatively invested
in primarily AAA rated securities. Total assets have increased by 14% to $86.2
million from $75.3 million as of December 31, 2002. Shareholder equity increased
by $2.5 million from $21.0 at the end of the first quarter to $23.5 at the end
of the second quarter and $8.8 million of operating cash flow was generated for
the first six months of 2003.
"For the balance of the year our outlook remains positive and we will,
as necessary, update guidance as the quarter progresses.
"Finally, as a further sign of both mine and Michele's (my wife,
cofounder and Treasurer) personal bullish outlook on the future of your company,
we will be exercising (buying) within the next few weeks, with our own money,
26,000 stock options granted to us during the Company's initial public offering
in 1998. The proceeds to the Company will be $260,000 when the transaction is
completed and will give Michele and me a combined total of approximately 971,000
shares of common stock in the Company."
The Company will hold an investor conference call today following this
release at 10:00 AM (ET). Listeners can access the conference call by dialing
toll free 877-780-2276. Please call at least five minutes in advance to ensure
that you are connected prior to the presentation.
About the Company
The Company, through its subsidiaries, underwrites standard and
non-standard personal automobile insurance, flood insurance, mobile home
insurance and homeowners' property and casualty insurance in the State of
Florida. The Company also has underwriting authority and processes claims for
third party insurance companies. In addition to insurance services, the Company
offers financial services to its insureds as well as the insured of third party
insurance companies. Lastly, the Company offers other ancillary services
including licensing of its tax preparation software products, electronic income
tax filing, tax preparation and tag and title transfer services.
The Company offers single and master franchise opportunities to
individuals through its subsidiaries Fed USA Insurance/Financial Services and
EXPRESSTAX(R) Franchise Corporation.
Safe harbor statements under the Private Securities Litigation Reform
Act of 1995: Statements in this press release that are not historical fact are
forward-looking statements that are subject to certain risks and uncertainties
that could cause actual events and results to differ materially from those
discussed herein. Without limiting the generality of the foregoing, words such
as "may," "will," "expect," "believe," "anticipate," "intend," "could," "would,"
"estimate," or "continue" or the other negative variations thereof or comparable
terminology are intended to identify forward-looking statements. The risks and
uncertainties include, without limitation, uncertainties related to estimates,
assumptions and projections generally; inflation and other changes in economic
conditions (including changes in interest rates and financial markets); pricing
competition and other initiatives by competitors; ability to obtain regulatory
approval for requested rate changes and the timing thereof; legislative and
regulatory developments; the outcome of litigation pending against the Company;
risks related to the nature of the Company's business; dependence on investment
income and the composition of the Company's investment portfolio; the adequacy
of its liability for loss and loss adjustment expense ("LAE"); insurance agents;
claims experience; limited experience in the insurance industry; ratings by
industry services; catastrophe losses; reliance on key personnel; weather
conditions (including the severity and frequency of storms, hurricanes,
tornadoes and hail); changes in driving patterns and loss trends; acts of war
and terrorist activities; court decisions and trends in litigation and health
care and auto repair costs; and other matters described from time to time by the
Company in releases and publications, and in periodic reports and other
documents filed with the United States Securities and Exchange Commission. In
addition, investors should be aware that generally accepted accounting
principles prescribe when a company may reserve for particular risks, including
litigation exposures. Accordingly results for a given reporting period could be
significantly affected if and when a reserve is established for a major
contingency. Reported results may therefore appear to be volatile in certain
accounting periods.
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21st CENTURY HOLDING COMPANY
Financial Highlights (Unaudited)
For the Three Months Ended, For the Six Months Ended,
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6/30/03 6/30/02 6/30/03 6/30/02
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Operations Data
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Total Revenue $ 14,944,779 $ 8,353,729 $ 29,806,789 $ 17,244,353
Net Realized Investment
Gaines (Losses) 1,068,818 (1,513,517) 1,419,700 (1,459,736)
Pretax Income 3,148,996 923,391 6,755,865 2,467,627
Income Tax Expense 1,035,062 891,350 2,333,530 1,444,216
Net Income 2,113,934 32,041 4,422,335 1,023,411
Net Income Per Share 0.69 0.01 1.46 0.34
Weighted Average
Shares Outstanding 3,063,105 3,017,526 3,034,220 3,023,226
Weighted Average
Shares Outstanding
- Assuming Dilution 3,194,747 3,020,126 3,125,479 3,023,226
Diluted EPS 0.66 0.01 1.41 0.34
Period Ending
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Balance Sheet Data 6/30/03 12/31/02
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Total Cash & Investments $41,027,308 $29,856,179
Total Assets 86,188,276 75,318,011
Loss and Loss Adjustment Expense 24,127,582 16,983,756
Total Liabilities 62,676,035 57,220,347
Total Shareholders' Equity 23,512,241 18,097,664