Exhibit 99.1
FOR IMMEDIATE RELEASE
CONTACT:
Edward J. Lawson, President and Chairman, 21st Century Holding Company
(954) 308-1257 or (954) 581-9993
21st CENTURY HOLDING COMPANY REPORTS
YEAR-END RESULTS AND RAISES FORWARD GUIDANCE
Plantation, Florida, March 23, 2005 - 21st Century Holding Company
(Nasdaq: TCHC), today reported results for the year ended December 31, 2004 (see
attached tables).
For the three months ended December 31, 2004, the Company reported a net
loss of $510,302, or $0.08 per share on 6,025,593 undiluted or diluted shares,
versus net income of $1,951,710 or $0.38 per share on 5,186,108 undiluted
shares, or $0.35 per share on 5,562,467 diluted shares in the same three-month
period last year.
For the twelve months ended December 31, 2004, the Company reported a net
loss of $10,857,774, or $1.86 per share on 5,847,327 undiluted or diluted
shares, versus net income of $8,364,875 or $1.76 per share on 4,756,973
undiluted shares, or $1.67 per share on 5,022,938 diluted shares in the same
twelve-month period last year.
The net loss was due to the four hurricanes that hit Florida during the
third quarter. During the three months ended December 31, 2004, the net loss
consisted primarily of approximately $10.5 million of an approximate total of
$43.6 million incurred for the year as a result of hurricane claims paid and
reserved, net of reinsurance recoveries. Without the effects of the four
hurricanes and the sale of our agencies and franchise operations, net income for
the year ending December 31, 2004 would have been approximately $12.4 million.
Net premiums earned increased $5.9 million or 50.1% to $17.5 million for
the three months ended December 31, 2004, as compared to $11.6 million for the
same three-month period last year. Net premiums earned increased $23.9 million
or 56.5% to $66.2 million for the twelve months ended December 31, 2004, as
compared to $42.3 million for the same twelve- month period last year.
Total revenues increased $6.2 million or 42.8% to $20.6 million for the
three months ended December 31, 2004, as compared to $14.5 million for the same
three-month period last year. Total revenues increased $23.0 million or 42.9% to
$76.6 million for the twelve months ended December 31, 2004, as compared to
$53.6 million for the same twelve-month period last year.
Edward J. (Ted) Lawson, President & Chairman of the Board, said, "The
cumulative effect of four devastating hurricanes hitting us last year was a
compression of earnings in 2004 which has now been reported and is behind us.
Going forward it is our belief that there will now be an equal and opposite
reaction. We are now forecasting an acceleration of earnings much greater than
would have been expected had this event not happened. This will come about due
to rate increases, better selection of risk, better catastrophic risk modeling,
and a greater diversification of profitable lines of business in other states.
These results will start to become apparent when we report our first quarter
numbers ending March 31st, in about four weeks. Forward guidance is now being
increased from $0.65 per share in our first quarter to $0.70-$0.75 per share and
year-end guidance is also being increased from $2.67 per share to $2.75-$2.80
per share. Both of these results will be records for the company."
Mr. Lawson continued, "In closing, both myself and our management team
strongly believe that we are now on the path for substantial revenue and
profitability growth for the company in 2005 and for many more years to come."
The Company will hold an investor conference call at 4:30 PM (ET) today,
March 23, 2005. Mr. Lawson, Mr. Richard A. Widdicombe, CEO, and Mr. J. Gordon
Jennings III, CFO, will discuss the financial results and review the outlook for
the Company. Messrs. Lawson, Widdicombe and Jennings invite interested parties
to participate in the conference call. Listeners can access the conference call
by dialing toll free 888-460-6235. 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, general liability
insurance, mobile home insurance and homeowners' property and casualty insurance
in the State of Florida. The Company underwrites general liability coverage as
an admitted carrier in the States of Louisiana, Texas and Alabama for more than
300 classes of business, including special events, as well as homeowners'
coverage in the State of Louisiana. The Company also operates as an approved
(non-admitted) carrier in the States of Georgia and Kentucky offering the same
general liability products. In addition, the Company has underwriting authority
and processes claims for third party insurance companies. In addition to
insurance services, the Company offers premium finance services to its insureds
as well as insureds of certain third party insurance companies.
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 applications to underwrite in an additional jurisdiction or for
requested rate changes, and the timing thereof; legislative and regulatory
developments; the outcome of litigation pending against the Company and any
settlement thereof; 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 the Company's liability for loss and loss adjustment
expense; 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.
#####
21st CENTURY HOLDING COMPANY
Consolidated Statements of Operations
(Unaudited)
Three Months Ended December 31, Twelve Months Ended December 31,
Revenue: 2004 2003 2004 2003
------------- ------------- ------------- -------------
Gross premiums written $ 26,732,455 $ 16,431,631 $ 100,662,025 $ 72,991,434
Gross premiums ceded (9,936,191) (3,667,440) (15,485,917) (22,090,644)
------------- ------------- ------------- -------------
Net premiums written 16,796,264 12,764,191 85,176,108 50,900,790
Decrease in prepaid reinsurance premiums 2,430,205 (877,198) (2,904,716) (3,427,818)
Decrease (increase) in unearned premiums (1,687,785) (266,205) (16,030,048) (5,188,177)
------------- ------------- ------------- -------------
Net change in prepaid reinsurance premiums and
unearned premiums 742,420 (1,143,403) (18,934,764) (8,615,995)
------------- ------------- ------------- -------------
Net premiums earned 17,538,684 11,620,788 66,241,344 42,284,795
Finance revenue 843,269 1,080,002 3,667,837 4,327,675
Managing general agent fees 551,377 434,122 2,039,783 2,328,681
Net investment income 1,029,934 395,031 3,171,620 1,624,216
Net realized investment gains (losses) 427,290 777,867 688,676 2,231,333
Other income 222,866 142,612 762,164 791,718
------------- ------------- ------------- -------------
Total revenue 20,613,420 14,450,422 76,571,424 53,588,418
------------- ------------- ------------- -------------
Expenses:
Loss and loss adjustment expenses 18,607,233 6,905,242 74,992,781 27,508,979
Operating and underwriting expenses 2,323,355 2,826,629 8,139,812 7,249,440
Salaries and wages 1,742,864 1,506,597 6,134,168 5,425,538
Interest expense 455,670 319,560 1,087,494 606,910
Policy acquisition costs, net of amortization 3,776,902 60,134 8,422,808 (854,279)
------------- ------------- ------------- -------------
Total expenses 26,906,024 11,618,162 98,777,063 39,936,588
------------- ------------- ------------- -------------
Income before provision for income tax expense (6,292,604) 2,832,260 (22,205,639) 13,651,830
Provision (benefit) for income tax expense (4,328,814) 584,024 (8,600,911) (4,357,961)
------------- ------------- ------------- -------------
Net income (loss) from continuing operations $ (1,963,790) $ 2,248,236 $ (13,604,728) $ 9,293,869
Discontinued operations:
Income (loss) from discontinued operations 4,657,435 (373,554) 4,483,577 (1,364,605)
(including gain on disposal of $5,384,050)
Provision (benefit) for income tax expense 3,203,947 (77,028) 1,736,624 435,611
------------- ------------- ------------- -------------
Income (loss) on discontinued operations 1,453,488 (296,526) 2,746,953 (928,994)
------------- ------------- ------------- -------------
Net income (loss) $ (510,302) $ 1,951,710 $ (10,857,774) $ 8,364,875
============= ============= ============= =============
Basic net income (loss) per share from continuing
operations $ (0.32) $ 0.44 $ (2.34) $ 1.96
------------- ------------- ------------- -------------
Basic net income (loss) per share from discontinued
operations $ 0.24 $ (0.06) $ 0.47 $ (0.20)
------------- ------------- ------------- -------------
Basic net income (loss) per share $ (0.08) $ 0.38 $ (1.86) $ 1.76
============= ============= ============= =============
Fully diluted net income (loss) per share from
continuing operations $ (0.32) $ 0.40 $ (2.34) $ 1.85
------------- ------------- ------------- -------------
Fully diluted net income (loss) per share from
discontinued operations $ 0.24 $ (0.05) $ 0.47 $ (0.18)
------------- ------------- ------------- -------------
Fully diluted net income (loss) per share $ (0.08) $ 0.35 $ (1.86) $ 1.67
============= ============= ============= =============
Weighted average number of common shares outstanding 6,025,593 5,186,108 5,847,327 4,756,973
============= ============= ============= =============
Weighted average number of common shares outstanding
(assuming dilution) 6,025,593 5,562,467 5,847,327 5,022,938
============= ============= ============= =============
Dividends declared per share $ 0.08 $ 0.08 $ 0.08 $ 0.25
============= ============= ============= =============
21st CENTURY HOLDING COMPANY
Balance Sheet Data
(Unaudited)
Period Ending
12/31/04 12/31/03
-------- --------
Total Cash & Investments $ 90,509,879 $ 54,060,589
Total Assets $163,601,372 $106,695,593
Unpaid Loss and Loss Adjustment Expense $ 46,570,679 $ 24,570,198
Total Liabilities $138,624,637 $ 74,649,217
Total Shareholders' Equity $ 24,976,735 $ 32,046,376
Premium Breakout
Line of Business 12/31/04 12/31/03
Automobile 24.1% 67.5%
Homeowners 62.0% 23.0%
General Liability 12.4% 7.1%
Mobile Home Owners 1.5% 2.4%
----- -----
Gross Written Premiums 100.0% 100.0%