Motor Club of America Announces Q2 and Six Month Results
15 August 2000
PARAMUS, N.J. - Motor Club of America announced its second quarter and six
month results for the period ended June 30, 2000.
Revenues for the three months ended June 30, 2000 were $22,453,506 as
compared to $14,417,053 for the same period in 1999. Net income for the three
month period ended June 30, 2000 was $639,511, or $.30 basic and $.28 diluted
net income per share, as compared to $1,011,433 or $.48 basic and diluted net
income per share in 1999.
Revenues for the six months ended June 30, 2000 were $42,151,938 as
compared to $28,731,826 for the same period in 1999. Net income for the six
month period ended June 30, 2000 was $889,023, or $.42 basic and diluted net
income per share, as compared to $1,997,054 or $.94 basic and diluted net
income per share in 1999.
The Company acquired North East Insurance Company ("North East") and
Mountain Valley Indemnity Company ("Mountain Valley") on September 24, 1999
and March 1, 2000, respectively. The six month 2000 results includes
non-recurring expenses related to the Mountain Valley acquisition of
$267,804 or $.13 basic net income per share, net of taxes. Absent these
non-recurring charges, net income for the six months ended June 30, 2000 was
$1,156,827 or $.55 basic net income per share.
Because North East and Mountain Valley were acquired on September 24, 1999
and March 1, 2000, respectively, comparability of revenues and net income on a
year-to-year and quarter-to quarter basis in 2000 are affected. To aid
comparability, North East and Mountain Valley's separate revenues and net
income for the three and six months ended June 30, 2000 were as follows:
Three Months Ended Six Months Ended
June 30, 2000 June 30, 2000
Company Revenues Net Income Revenues Net Income
North East $4,835,221 $136,854 $9,398,699 $9,778
Mountain Valley 4,043,131 65,229 5,509,954 69,988
Total $8,878,352 $202,083 $14,908,653 $79,766
Archer McWhorter, Chairman of the Board of the Company, said, "Preserver
Insurance Company continued to display impressive revenue growth and earnings
strength, with Commercial Lines premium growing nearly 17% in 2000. Personal
auto results in New Jersey, although better than the second half of 1999, have
not shown meaningful progress. It is noteworthy however, that year to date
revenues from New Jersey personal auto were only 45% of consolidated revenues,
the lowest in the Company's history, and this percentage should continue to
decline."
Motor Club of America owns and operates five regionally focused property
and casualty insurance companies, including companies that specialize in small
and mid-sized insurance through the Preserver Insurance Group.
The Preserver Insurance Group consists of Preserver Insurance Company,
which writes small commercial and homeowners insurance in New Jersey, and
Mountain Valley Indemnity Company, which writes small and mid-sized commercial
insurance in New England and New York. The Preserver Insurance Group is rated
B++ (Very Good) by A.M. Best Company. American Colonial Insurance Company
plans to commence operations in New York in the third quarter 2000, writing
commercial lines in tandem with Mountain Valley.
Motor Club of America Insurance Company writes personal automobile
insurance in New Jersey and is rated B+ (Very Good) by Best. North East
Insurance Company writes personal automobile and small commercial lines
insurance in the State of Maine and is rated B (Fair) by Best.
MOTOR CLUB OF AMERICA
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Six Months Ended For the Three Months Ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
Revenues:
Insurance premiums
(net of premiums ceded
totaling $9,340,353,
$3,667,516,
$6,989,835 and
$1,848,619) $39,067,248 $26,266,691 $20,807,821 $13,182,492
Net investment
income 2,977,990 2,384,857 1,578,704 1,192,325
Realized gains on
sales of investments 4,524 5,378 4,524 5,378
Other revenues 102,176 74,900 62,457 36,858
Total revenues 42,151,938 28,731,826 22,453,506 14,417,053
Losses and Expenses:
Insurance losses and
loss expenses incurred
(net of reinsurance
recoveries totaling
$8,142,651,
$1,842,816,
$5,457,950 and
$959,195) 26,095,143 17,540,281 13,613,138 8,657,338
Amortization of
deferred policy
acquisition costs 11,116,776 7,889,322 5,920,892 4,057,199
Other operating
expenses 2,786,293 743,718 1,388,251 405,049
Interest expense 841,010 106,796 517,403 53,857
Amortization of
goodwill 42,348 -- 21,174 --
Total losses and
expenses 40,881,570 26,280,117 21,460,858 13,173,443
Income before Federal
income taxes 1,270,368 2,451,709 992,648 1,243,610
Provision for Federal
income taxes:
current 21,979 55,858 7,269 27,788
deferred 359,366 398,797 345,868 204,389
Total provision for
Federal income taxes 381,345 454,655 353,137 232,177
Net income $889,023 $1,997,054 $639,511 $1,011,433
Net income per
common share:
Basic $0.42 $0.95 $0.30 $0.48
Diluted $0.42 $0.94 $0.28 $0.48
Weighted average common
and potential common
shares outstanding:
Basic 2,124,387 2,116,429 2,124,387 2,116,429
Diluted 2,124,387 2,123,899 2,769,965 2,120,053
Net premiums written 39,313,965 24,447,398 21,692,575 12,017,155
GAAP loss ratio 66.8% 66.8% 65.4% 65.7%
GAAP expense ratio 35.6% 32.9% 35.1% 33.8%
GAAP combined ratio 102.4% 99.6% 100.6% 99.5%
Book value $13.37 $13.14