American Independence Corp. Announces 2016 First-Quarter Results

NEW YORK, Aug. 01, 2016 (GLOBE NEWSWIRE) -- American Independence Corp. (NASDAQ:AMIC) today reported 2016 first-quarter results.

Financial Results

AMIC completed the sale of IHC Risk Solutions LLC (“Risk Solutions”) and the medical stop-loss business it produced on March 31, 2016 and realized an after tax gain of approximately $114 million. In addition, under the purchase and sale agreement, all of the in-force medical stop-loss business of Independence American produced by Risk Solutions is 100% co-insured as of January 1, 2016. AMIC’s block of medical stop-loss business is in run-off. The sale of Risk Solutions and exit from the medical stop-loss business represents a strategic shift that will have a major effect on the Company’s operations and financial results. The disposal transaction qualifies for reporting as discontinued operations in the first quarter of 2016.

AMIC reported net income of $114.2 million ($14.10 per diluted share) for the three months ended March 31, 2016 compared to $0.7 million ($.09 per diluted share) for the three months ended March 31, 2015. Income from continuing operations was $0.4 million ($.03 per diluted share), and $0.3 million ($.03 per diluted share), for the three months ended March 31, 2016 and 2015, respectively.

Revenues decreased to $29.4 million for the three months ended March 31, 2016 compared to revenues of $39.4 million for the three months ended March 31, 2015, primarily due to the sale of Risk Solutions and the exit from the medical stop-loss business.

Independence Holding Company (“IHC”) has announced a “going private” transaction by way of a statutory “short-form" merger of AMIC with and into AMIC Holdings, Inc. (“Holdings”), a newly formed subsidiary into which IHC and one of its subsidiaries will contribute their shares of AMIC common stock, with Holdings continuing as the surviving corporation. Once the transaction is consummated, Holdings will own all of the outstanding shares of common stock of AMIC. IHC is under no obligation to consummate the merger and could decide to withdraw from the transaction at any time before it becomes effective.

Chief Executive Officer’s Comments

Roy T. K. Thung, Chief Executive Officer, commented, “Our financial condition and balance sheet remain strong. As previously announced, AMIC completed the sale of IHC Risk Solutions LLC and the stop-loss business it produced on March 31, 2016 and realized an after tax gain of approximately $114 million. AMIC has re-positioned itself as a specialty health underwriter and sales and marketing company, and produced solid growth and underwriting results in these lines in the first quarter. Our occupational accident line has been underperforming, and we are implementing changes to improve our results.”

About American Independence Corp.

American Independence Corp. (AMIC) 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 non-subscriber occupational accident, pet insurance, short-term medical, vision, dental and various supplemental products. Through its subsidiaries IHC Specialty Benefits, Inc. (including through www.healthedeals.com and www.aspiraAmas.com), IPA Direct, LLC and IPA Family, LLC, AMIC markets products underwritten by its affiliated companies and various products (including ACA plans and medical stop-loss) on behalf of unaffiliated carriers.

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 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.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
Three Months
Ended March 31,
2016 2015
Premiums earned $21,096 $36,217
Agency income 5,500 2,477
Net investment income 1,470 599
Net realized investment gains (losses) 214 141
Other income 1,122 1
29,402 39,435
Insurance benefits, claims and reserves 14,966 23,970
Selling, general and administrative expenses 13,506 14,952
Amortization and depreciation 280 115
28,752 39,037
Income from continuing operations before income taxes 650 398
Provision for income taxes 234 140
Income from continuing operations 416 258
Discontinued operations: (Note 3)
Income from discontinued operations, before income taxes 122,034 837
Income taxes on discontinued operations 8,069 324
Income from discontinued operations 113,965 513
Net income 114,381 771
Less: Net (income) loss attributable to the non-controlling interest 178 49
Net income attributable to American Independence Corp. $114,203 $722
Basic income per common share:
Income from continuing operations $.03 $.03
Income from discontinued operations 14.07 .06
Basic income per common share $14.10 $.09
Weighted-average shares outstanding 8,101 8,079
Diluted income per common share:
Income from continuing operations $.03 $.03
Income from discontinued operations 14.04 .06
Basic income per common share $14.07 $.09
Weighted-average diluted shares outstanding 8,119 8,094

American Independence Corp.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
March 31,
2016 December 31,
ASSETS: (Unaudited) 2015
Securities purchased under agreements to resell$1,629 $4,595
Fixed maturities available-for-sale, at fair value 181,158 84,933
Equity securities available-for-sale, at fair value 2,603 2,594
Total investments 185,390 92,122
Cash and cash equivalents 134,415 4,861
Restricted cash 966 1,377
Accrued investment income 769 727
Premiums receivable 16,005 16,654
Net deferred tax asset 15,848 13,944
Due from reinsurers 19,987 4,950
Goodwill 5,703 5,703
Intangible assets 13,086 13,327
Due from securities brokers 111 1,051
Other assets 18,037 10,540
Assets attributable to discontinued operations - 31,718
TOTAL ASSETS$410,317 $196,974
Policy benefits and claims$47,386 $43,764
Premium and claim funds payable 966 1,377
Commission payable 8,444 5,817
Accounts payable, accruals and other liabilities 13,346 11,192
Debt 2,250 3,189
State income taxes payable 5,882 -
Due to securities brokers 99,777 -
Due to reinsurers 8,896 100
Liabilities attributable to discontinued operations 953 24,337
Total liabilities 187,900 89,776
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; 8,101,883 and 8,088,105
shares outstanding, respectively 92 92
Additional paid-in capital 88,648 88,637
Accumulated other comprehensive gain (loss) 484 (197)
Treasury stock, at cost, 1,079,910 and 1,093,688 shares, respectively (10,033) (10,161)
Retained earnings 139,749 25,549
Total American Independence Corp. stockholders’ equity 218,940 103,920
Non-controlling interest in subsidiaries 3,477 3,278
Total equity 222,417 107,198

CONTACT: LOAN NISSER (646) 509-2107 www.americanindependencecorp.com

Source:American Independence Corp.