STAMFORD, Conn., May 11, 2009 (GLOBE NEWSWIRE) -- Independence Holding Company (NYSE:IHC) today reported 2009 first-quarter results. This press release contains both GAAP and non-GAAP financial information for which reconciliations can be found at the end of this release.
Financial Results
IHC reported operating income(1) per share of $.16 per share, diluted, or $2,403,000, for the three months ended March 31, 2009, compared to $.20 per share, diluted, or $3,092,000, for the three months ended March 31, 2008.
Net income per share from continuing operations attributable to IHC increased 10% to $.22 per share, diluted, or $3,356,000, for the three months ended March 31, 2009, compared to $.20 per share, diluted, or $3,072,000, for the three months ended March 31, 2008. Revenues decreased 4.8% to $99,371,000 for the three months ended March 31, 2009, compared to revenues for the three months ended March 31, 2008 of $104,418,000, primarily due to stricter underwriting guidelines.
Chief Executive Officer's Comments
Roy Thung, Chief Executive Officer, commented, "We are pleased with the sequential increase in non-GAAP operating income to $.16 per share, diluted, for the first quarter of 2009 from $.08 per share, diluted, in the fourth quarter of 2008. The improvement in operating income is largely due to improved underwriting results from stricter underwriting guidelines on our medical stop-loss and an increase in earnings from our group line. We anticipate that our improved operating results will continue for the remainder of 2009."
Mr. Thung continued, "The Company recorded an increase in our book value per share to $11.25 at March 31, 2009 from $10.56 at December 31, 2008, primarily as a result of a reduction in unrealized losses due to mark-to-market accounting on our available-for-sale securities. The adjusted book value per share(2) was $14.29 at March 31, 2009."
Non-GAAP Financial Measures
The Company provides non-GAAP financial measures to complement its consolidated financial statements presented in accordance with GAAP: (i) Operating income is income from continuing operations net of losses attributable to non-controlling interests and excluding net realized gains or losses, net of applicable income taxes, (ii) Operating income per share is operating income (loss) on a per share basis, and (iii) Adjusted book value per share represents IHC's book value per share excluding the per share value of net unrealized investment gains and losses (per SFAS 115), after taxes. These non-GAAP financial measures are intended to supplement the user's overall understanding of the Company's current financial performance and its prospects for the future. Specifically, the Company believes the non-GAAP results provide useful information to both management and investors by excluding realized gains or losses, net of taxes, that, when excluded from the GAAP results, may provide additional understanding of the Company's core operating results or business performance. However, these non-GAAP financial measures are not intended to supersede or replace the Company's GAAP results. A reconciliation of the non-GAAP results to the GAAP results is provided in the "Reconciliation of GAAP Income from Continuing Operations to Non-GAAP Income from Continuing Operations" and "Reconciliation of GAAP Book Value Per Share to Non-GAAP Adjusted Book Value Per Share" schedules below.
About Independence Holding Company
IHC is a holding company principally engaged in the life and health insurance business and the acquisition of blocks of policies through its insurance company subsidiaries (Standard Security Life Insurance Company of New York and Madison National Life Insurance Company, Inc.), its affiliate (American Independence Corp. (Nasdaq:AMIC)), and its managing general underwriters, third-party administrators, and marketing affiliates. Standard Security Life markets medical stop-loss, small group major medical, short-term medical, major medical for individuals and families, limited medical, group long and short-term disability and life, dental, vision and managed health care products. Madison Life sells group life and disability, employer medical stop-loss, small group major medical, major medical for individuals and families, short-term medical, dental, vision, and individual life insurance. AMIC is a holding company principally engaged in the insurance and reinsurance business through Independence American Insurance Company and its agencies and managing general underwriter division.
Certain statements in this news 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 which 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 IHC operates, new federal or state governmental regulation, IHC's ability to effectively operate, integrate and leverage any past or future strategic acquisition, and other factors which can be found in IHC's other news releases and filings with the Securities and Exchange Commission.
(1) Operating income is a non-GAAP measure representing income from continuing operations net of losses attributable to non-controlling interests and excluding net realized investment gains (losses), net of applicable income tax. The Company believes that the presentation of operating income may offer a better understanding of the core operating results of the Company. A reconciliation of income from continuing operations to operating income is included in this press release.
(2) Adjusted book value per share is a non-GAAP measure which represents IHC's book value per share and excludes the per share value of net unrealized investment gains and losses (per SFAS 115), after taxes. A reconciliation of book value per share to adjusted book value per share is included in this press release.
INDEPENDENCE HOLDING COMPANY
FIRST QUARTER REPORT
MARCH 31, 2009
(In Thousands, Except Per Share Data)
Three Months Ended
March 31,
2009 2008
-------- --------
REVENUES:
Premiums earned:
Health $ 66,638 $ 72,654
Life and annuity 9,795 9,000
Net investment income 10,719 10,645
Fee income 9,035 11,199
Net realized investment gains (losses) 1,394 114
Equity income (loss) from AMIC 693 401
Other income 1,097 405
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99,371 104,418
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EXPENSES:
Insurance benefits, claims and reserves:
Health 43,796 49,548
Life and annuity 12,400 11,236
Selling, general and administrative expenses 37,054 36,837
Amortization of deferred acquisitions costs 1,050 1,454
Interest expense on debt 770 986
-------- --------
95,070 100,061
-------- --------
Income from continuing operations before income
taxes 4,301 4,357
Income taxes 952 1,353
-------- --------
Income from continuing operations 3,349 3,004
Discontinued operations:
Loss from discontinued operations (216) --
Loss on disposition of discontinued operations (21) --
-------- --------
Net income 3,112 3,004
Loss from non-controlling interests in
subsidiaries 7 68
-------- --------
NET INCOME ATTRIBUTABLE TO IHC 3,119 3,072
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Basic loss per common share:
Income from continuing operations $ .22 $ .20
Loss from discontinued operations (.02) --
Loss on disposition of discontinued operations -- --
-------- --------
Basic income per common share $ .20 $ .20
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WEIGHTED AVERAGE SHARES OUTSTANDING 15,408 15,331
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Diluted loss per common share
Income from continuing operations $ .22 $ .20
Loss from discontinued operations (.02) --
Loss on disposition of discontinued operations -- --
-------- --------
Diluted income per common share $ .20 $ .20
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WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING 15,411 15,384
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As of May 8, 2009, there were 15,418,621 common shares outstanding,
net of treasury shares.
RECONCILIATION OF GAAP INCOME FROM CONTINUING OPERATIONS
TO NON-GAAP INCOME FROM CONTINUING OPERATIONS
(In Thousands, Except Per Share Data)
Three Months Ended
March 31,
------------------
2009 2008
---- ----
Income from continuing operations $ 3,349 $ 3,004
Loss from non-controlling interests in subsidiaries 7 68
Realized (gains) losses net of taxes (953) 20
-------- --------
Operating income from continuing operations $ 2,403 $ 3,092
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Non - GAAP basic income per common share:
Operating income from continuing operations $ .16 $ .20
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Non - GAAP diluted income per common share:
Operating income from continuing operations $ .16 $ .20
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Included in realized (gains) losses net of taxes for the three months
March 31, 2009 and 2008 are losses of $172,000 and $52,000,
respectively, from other-than-temporary impairments primarily due to
the write-down in value of investment in preferred stocks of a
financial institution. Also included in the realized (gains) losses,
net of taxes, above are IHC's proportionate share of AMIC's realized
gains and losses, net of taxes.
RECONCILIATION OF GAAP BOOK VALUE PER SHARE TO
NON-GAAP ADJUSTED BOOK VALUE PER SHARE
March 31,
2009
---------
Book Value per share $ 11.25
Net unrealized losses, after tax, per share 3.04
---------
Adjusted book value per share $ 14.29
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CONTACT: Independence Holding Company
David T. Kettig
(212) 355-4141 Ext. 3047
www.IHCGroup.com
