Florida-based 21st Century Holding Co. reported results for the quarter ended Sept. 30, 2004.
For the quarter ended Sept. 30, 2004, the company reported net loss of $13,754,082, or $2.32 per share on 5,925,952 undiluted shares, versus net income of $1,990,831 or $0.42 per share on 4,738,130 undiluted shares in the same three-month period last year. On a diluted share basis, the company reported a loss of $2.19 per share, based on 6,279,826 average diluted shares outstanding. The net loss was due to the four hurricanes that hit Florida during the third quarter. The net loss consisted primarily of approximately $20 million incurred as a result of hurricane claims paid and reserved net of tax benefits and reinsurance recoveries.
For the nine months ended Sept. 30, 2004, the company reported net loss of $7,155,297, or $1.24 per share on 5,786,803 undiluted shares, versus net income of $6,413,166 or $1.39 per share on 4,612,370 undiluted shares in the same nine-month period last year. On a diluted share basis, the company reported a loss of $1.15 per share, based on 6,248,663 average diluted shares outstanding.
Net premiums earned increased $11.3 million or 95.8% to $23.2 million for the three months ended Sept. 30, 2004, as compared to $11.8 million for the same three-month period last year.
Total revenues increased $11.3 million or 75.4% to $26.3 million for the three months ended Sept. 30, 2004, as compared to $15.0 million for the same three-month period last year.
Edward (Ted) Lawson, president and chairman of the Board, said, “Even though revenue was higher this last quarter, with an unprecedented four hurricanes striking Florida, this year can only be described as disappointing. Even though our reinsurers are assuring us that the hurricane season that took place in Florida is only a 1-in-700 year event, we are implementing precautions that we believe should enable us to return to record profitability.”
According to Lawson, “We are in the process of filing for an additional rate increase on our homeowners business pending approval of the insurance regulators; We are changing our reinsurance structures to better handle our hurricane exposure; We are changing our mix of homeowners business to better take advantage of new construction and wind deductibles; and We are diversifying our book of business.
“In this regard, our auto production has already increased from $1 million per month through the first nine months of this year to now $2.5 million per month. Our general liability and special events coverage business is running at a $2 million per month pace versus the $1 million per month it was running at last year. Also, American Vehicle’s surplus has grown from $10 million at the end of 2003 to over $15 million today. This is the primary company that writes our general liability and auto business. This added surplus will give us the ability to accelerate our expansion into other states which should further diversify our company and increase our revenue and profitability going forward.
“These changes are now taking place and although we’re disappointed in this year’s results, we are very much looking forward to next year and beyond. This year’s guidance for calendar year 2004 ending December 31st, which was for us to approximately break even, may be lowered, as more information is available to us. However, this past quarter is behind us now and we now anticipate returning to profitability in our current fourth quarter ending 12/31/04. Also, we remain confident in our 2005 guidance of $2.67 per share. Furthermore, the first quarter of next year should be a record first quarter for revenue and profitability.”
Lawson added, “In conclusion, this was a trying year but I can assure you that this company remains strong and well positioned for future record growth and profitability.”
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