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American Independence Corp. Announces 2014 Fourth-Quarter and Annual Results

NEW YORK, March 10, 2015 (GLOBE NEWSWIRE) -- American Independence Corp. (Nasdaq:AMIC) today reported 2014 fourth-quarter and annual results.

Financial Results

AMIC reported net income of $2.1 million ($.26 per diluted share) for the three months ended December 31, 2014 compared to $0.4 million ($.05 per diluted share) for the three months ended December 31, 2013. AMIC reported net income of $5.3 million ($.65 per diluted share) for the year ended December 31, 2014 compared to $2.9 million ($.36 per diluted share) for the year ended December 31, 2013. Due to our profitability in 2014 and projected continuing profitable results, AMIC's net income for the fourth quarter and year ended December 31, 2014 was positively impacted by an increase of $2.5 million in the deferred tax asset related to our federal net operating loss carryforwards ("NOLs").

Revenues decreased to $40.6 million for the three months ended December 31, 2014 compared to revenues of $42.9 million for the three months ended December 31, 2013, primarily due to a decrease in fee income from certain fully insured health subsidiaries. Revenues increased to $164.9 million for the year ended December 31, 2014 compared to revenues of $153.3 million for the year ended December 31, 2013, primarily due to an increase in premiums, fee income and agency income.

Chief Executive Officer's Comments

Roy Thung, Chief Executive Officer, commented, "We are delighted with the continuing growth in earned premium and with the profitability of business written by IHC Risk Solutions. We attribute the growth in our direct distribution to our enhanced sales force, focused underwriting and employer groups moving from fully insured to self-funding as they consider alternatives as a result of health care reform. We expect continued improvement in this line of business, as evidenced by the 38% growth in our direct business written for the twelve months ended January 2015, while maintaining consistent profit margins on a growing premium base. With respect to our fully insured operating companies, we continue to build out the direct-to-consumer distribution that is essential to our future growth as a specialty health company, and we are pleased with the growth and profitability of our ancillary lines of business. Our financial condition and balance sheet remain strong. We have no debt and have grown our book value to $11.34 per share at December 31, 2014 from $10.44 per share at December 31, 2013."

Valuation Allowance Relating to the Deferred Tax Asset

In the fourth quarter of 2014, the Company further reduced the valuation allowance relating to the deferred tax asset, which caused a corresponding increase in such deferred tax asset. The valuation allowance relates to the likelihood that AMIC might not be able to fully utilize its prior tax year federal NOLs. AMIC reviews the valuation allowance on a quarterly basis to determine the reasonableness of the amount. Based upon AMIC's projections of future profitable results and profitability in 2014, it was appropriate to further reduce the valuation allowance in the fourth quarter of 2014 in the amount of $2.5 million, which resulted in an increase in net income.

Change in Accounting Principle

AMIC was acquired in a series of transactions by Independence Holding Company ("IHC") beginning in 2002 with a 19.9% equity investment and culminating in its current ownership of 90%. In March 2010, IHC increased its ownership to over 50% and, in accordance with generally accepted accounting principles in the United States ("GAAP"), IHC established a new basis for AMIC's assets and liabilities in IHC's consolidated financial statements based on the fair value of AMIC's identifiable assets and liabilities assumed at that time. AMIC did not "push down" the new basis for its assets and liabilities; instead, AMIC maintained its historical basis in its assets and liabilities for the purpose of issuing its separate standalone financial statements. Accordingly, the reporting basis for AMIC's assets and liabilities included in the consolidated financial statements of IHC were different from the reporting basis for AMIC's assets and liabilities included in AMIC's previously reported separate standalone financial statements. During the second quarter of 2014, due to the lifting of certain restrictions and requirements relating to IHC's ownership of AMIC stock, AMIC has elected, for all periods presented, to reflect IHC's basis.

As a result of the above-mentioned change in accounting principle, the consolidated financial statements and financial information of AMIC reported prior to June 30, 2014 are not directly comparable to the financial statements and financial information of AMIC included in this news release. The differences relate to the write-off of goodwill, basis differences in intangible assets and related amortization, other assets, other investments, non-controlling interests in subsidiaries, taxes and related tax provisions, net income, additional paid-in capital, retained earnings and total shareholders' equity (including a corresponding change in book value per share). See Notes to Consolidated Financial Statements included in the December 31, 2014 Form 10-K for the impact of this adoption on AMIC's consolidated balance sheets and consolidated statements of income at and for the period ended December 31, 2013. The restatement resulted in the reduction of book value per share to correspond with IHC's carrying basis in AMIC.

About American Independence Corp.

American Independence Corp. is a holding company principally engaged in health insurance and reinsurance. It provides specialized health coverage and related services to commercial customers and individuals. Through Independence American Insurance Company and its other subsidiaries, it offers medical stop-loss, non-subscriber occupational accident, pet insurance, group major medical, short-term medical, vision, dental and various supplemental products, which are marketed through its subsidiaries IHC Specialty Benefits, Inc., IPA Direct, LLC and IPA Family, LLC. AMIC markets medical stop-loss through its marketing and administrative company IHC Risk Solutions, LLC.

Forward-Looking Statements

Certain statements and information contained in this release may be considered "forward-looking statements," such as statements relating to management's views with respect to future events and financial performance. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions in the markets in which American Independence Corp. (AMIC) operates, new federal or state governmental regulation, AMIC's ability to effectively operate, integrate and leverage any past or future strategic acquisition, and other factors which can be found in AMIC's other news releases and filings with the Securities and Exchange Commission. AMIC expressly disclaims any duty to update its forward-looking statements unless required by applicable law.

American Independence Corp.
Consolidated Statements of Income
(In thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2014 2013 2014 2013
Premiums earned $ 33,551 $ 33,745 $ 133,606 $ 127,203
Fee and agency income 6,437 8,448 27,918 22,421
Net investment income 557 562 2,202 2,104
Net realized investment gains 104 109 967 1,082
Other income (loss) (37) 83 183 463
Revenues 40,612 42,947 164,876 153,273
Insurance benefits, claims and reserves 24,875 23,488 88,887 87,118
Selling, general and administrative expenses 16,049 18,043 69,752 58,878
Amortization and depreciation 412 458 1,692 1,836
Expenses 41,336 41,989 160,331 147,832
Income (loss) before income tax (724) 958 4,545 5,441
Provision (benefit) for income taxes (2,790) 209 (802) 1,576
Net income 2,066 749 5,347 3,865
Less: Net (income) loss attributable to the non-controlling interest 28 (349) (97) (983)
Net income attributable to American Independence Corp. $ 2,094 $ 400 $ 5,250 $ 2,882
Basic income per common share:
Net income attributable to
American Independence Corp. common stockholders $ .26 $ .05 $ .65 $ .36
Weighted-average shares outstanding 8,079 8,073 8,077 8,076
Diluted income per common share:
Net income attributable to
American Independence Corp. common stockholders $ .26 $ .05 $ .65 $ .36
Weighted-average diluted shares outstanding 8,093 8,093 8,103 8,084
American Independence Corp.
Consolidated Balance Sheets
(In thousands, except per share data)
December 31, December 31,
ASSETS: 2014 2013
Investments:
Securities purchased under agreements to resell $ 3,143 $ 3,563
Trading securities 1,138 859
Fixed maturities available-for-sale, at fair value 73,608 68,222
Equity securities available-for-sale, at fair value 1,013 988
Total investments 78,902 73,632
Cash and cash equivalents 4,569 4,424
Restricted cash 18,881 10,067
Accrued investment income 652 604
Premiums receivable 13,257 14,364
Net deferred tax asset 12,025 11,172
Due from reinsurers 5,532 7,549
Intangible assets 9,915 11,408
Accrued fee income 4,469 2,332
Due from securities brokers 293 172
Other assets 17,286 17,450
TOTAL ASSETS $ 165,781 $ 153,174
LIABILITIES AND STOCKHOLDERS' EQUITY:
LIABILITIES:
Policy benefits and claims $ 33,616 $ 35,252
Premium and claim funds payable 18,881 10,067
Commission payable 4,672 5,455
Accounts payable, accruals and other liabilities 11,283 13,251
State income taxes payable 597 544
Due to securities brokers 58 45
Due to reinsurers 2,334 1,177
Total liabilities 71,441 65,791
STOCKHOLDERS' EQUITY:
American Independence Corp. stockholders' equity:
Preferred stock, $0.10 par value, 1,000 shares designated; no shares issued and outstanding -- --
Common stock, $0.01 par value, 15,000,000 shares authorized; 9,181,793 shares issued, respectively; 8,079,215 and 8,072,548 shares outstanding, respectively 92 92
Additional paid-in capital 79,746 79,694
Accumulated other comprehensive loss (154) (2,152)
Treasury stock, at cost, 1,102,578 and 1,109,245 shares, respectively (10,243) (10,305)
Retained earnings 22,139 16,970
Total American Independence Corp. stockholders' equity 91,580 84,299
Non-controlling interest in subsidiaries 2,760 3,084
Total equity 94,340 87,383
TOTAL LIABILITIES AND EQUITY $ 165,781 $ 153,174

CONTACT: Loan Nisser 646-509-2107 www.americanindependencecorp.comSource:American Independence Corp.