NEWS
For Release:
January 24, 2001 Contact: Financial:
Joseph F. Morris
Senior Vice President and Chief Financial Officer
(215) 443-3612 Media:
David Kirk, APR Summary: Penn-America Group, Inc. (NYSE:PNG)
reports operating income of $.4 million
or $0.05 per share (basic and diluted) for the fourth quarter of 2000; and
an operating loss of $3.0 million or $0.39 per share (basic and diluted)
for the year ended December 31, 2000. Gross written premium in core
commercial business grew 26.7 percent in 2000. Three Month Results
HATBORO PA (January 24, 2001) -- Penn-America Group, Inc. (NYSE:PNG)
today reported operating income of $.4 million or $0.05 per share (basic
and diluted) for the fourth quarter of 2000, compared with operating
income of $1.1 million or $0.14 per share (basic and diluted) for the
fourth quarter of 1999. The
2000 results reflect an increase in the 2000 accident year CMP liability
loss ratio and increased property losses, partially offset by a reduction
in the contingent commission expense accrual.
The 2000 operating results also reflect the continued run-off of
personal and commercial automobile coverages, lines that the company has
exited as previously announced. Operating results in the fourth quarter of
1999 reflected higher than expected property losses, which were due
primarily to Hurricanes Floyd and Irene and other windstorm damage. Net income for the fourth quarter of 2000
was $.3 million or $0.04 per share (basic and diluted) and included a net
realized investment loss of $.1 million or $0.01 per share (basic and
diluted). Net income for the
fourth quarter of 1999 was $.9 million or $0.11 per share (basic and
diluted) and Page 2/Penn-America Group,
Inc. (NYSE: PNG) Fourth Quarter 2000 Results included a net
realized investment loss of $.2 million or $0.03 per share. In the fourth quarter of 2000, the company sold approximately
$19.0 million of primarily fixed-income, non-taxable securities to utilize
tax benefits available from capital loss carry backs and re-invested the
proceeds principally in higher-yielding taxable securities. Revenues, excluding net realized investment
loss for the fourth quarter of 2000, totaled $26.9 million, up 13.6
percent from $23.7 million in the same quarter of last year. Jon Saltzman, president and
CEO noted, “While we ended the year with an operating loss, we posted a
modest fourth quarter profit. The
decisive and difficult actions we took in the second half of 2000 had the
intended impact of regaining the earnings momentum we lost in the soft
markets of the past two years. Our
goal is to build on that momentum, quarter by quarter during the next two
years.” Commercial
Lines Gross written premiums for commercial lines
increased 24.8 percent to $26.7 million in the fourth quarter of 2000,
compared with $21.4 million for the same period of 1999; net written
premiums increased 20.0 percent to $23.5 million in the current quarter,
compared with $19.6 million in the same period of 1999. The statutory combined ratio for commercial lines for the fourth quarter of 2000 was 106.9 compared with 103.3 in the fourth quarter of 1999. The 2000 results were affected by an increase in the 2000 accident year CMP liability loss ratio, higher than expected property losses and continued run-off in the commercial automobile line, all partially offset by a reduction in the contingent commission expense accrual. The 1999 combined ratio was adversely affected by property losses related to Hurricanes Floyd and Irene and other windstorm damage. Non-Standard
Personal Automobile Lines Gross and net written
premiums for non-standard personal automobile lines decreased 98.5 percent
in the fourth quarter of 2000 to $22,000 compared with $1.8 million for
the same quarter in 1999. The
company previously announced in January 1999 that it was running-off the
non-standard personal automobile business, which accounts for the
significant decline in both the gross and net written premium. Page 3/Penn-America Group, Inc.
(NYSE: PNG) Fourth Quarter 2000 Results 2000
Results
For the year ended December 31, 2000, the company reported an
operating loss of $3.0 million or $0.39 per share (basic and diluted)
compared with operating income of $1.5 million or $0.17 per share (basic
and diluted) for the twelve months ended December 31, 1999.
The 2000 operating results include strengthening of prior year loss
reserves by $9.4 million pretax, or $6.2 million after-tax ($0.81 per
basic and diluted share) relating principally to the company’s
commercial automobile liability, CMP liability and other liability
(primarily exposure to construction defect losses) lines of business. In
addition, the 2000 results reflect higher than expected property losses.
Operating results in 1999 reflect adverse loss development in the
company’s discontinued non-standard personal automobile line of business
as well as other liability and property lines, including losses related to
Hurricanes Floyd and Irene and other windstorm damage. Net loss for 2000 was $3.9 million or $0.50
per share (basic and diluted) and included a net realized investment loss
of $.9 million or $0.11 per share (basic and diluted). Net income for 1999 was $2.0 million or $0.24 per share
(basic and diluted) and included a net realized investment gain of $0.5
million or $.07 per share (basic and diluted).
In 2000, the company sold approximately $69 million of primarily
fixed-income securities to utilize tax benefits available from capital
loss carry backs and re-invested the proceeds principally in
higher-yielding taxable securities. Revenues, excluding a net realized
investment loss for 2000, totaled $101.9 million, up 7.0 percent from
$95.2 million in 1999, excluding a net realized investment gain in 1999. Commercial
Lines Gross written premiums for commercial lines
increased 26.6 percent to $107.0 million in 2000, compared with $84.5
million for 1999 while net written premiums increased 25.0 percent to
$94.5 million compared with $75.6 million in 1999. The statutory combined ratio for commercial
lines for 2000 was 116.3 and included 11.3 points related to the
strengthening of prior year loss reserves due principally to the
commercial automobile liability, CMP liability and other liability
(primarily exposure to construction defect losses) lines of business.
The commercial lines combined ratio for 1999 was 103.7. Page 4/Penn-America Group, Inc. (NYSE: PNG) Fourth
Quarter 2000 Results Non-Standard
Personal Automobile Lines Gross and net written premiums for non-standard
personal automobile lines decreased 75.8 percent in 2000 to $2.8 million
compared with $11.5 million for 1999.
The company previously announced in January 1999 that it was
running-off the non-standard personal automobile business, which accounts
for the significant decline in both the gross and net written premium. Jon Saltzman, John DiBiasi, the insurance
company’s executive vice president for Underwriting, and Joe Morris,
senior vice president and CFO will conduct a teleconference for interested
parties today at 11:00 a.m. Eastern Standard Time.
To participate, telephone (800) 230-1085 a few minutes before 11:00
a.m. and request the Penn-America conference call.
A digital recording of the teleconference will be available from
1:30 p.m. today through 11:59 p.m. Eastern Time, Wednesday, January 31.
To hear the recording, telephone (800) 475-6701 at any time during
that period and use access code 561825. This conference call also will be broadcast live at www.penn-america.com.
It is being supplied by PR Newswire www.videonewswire.com/png/012401.
To listen to the Web Cast, your computer must have Real Player installed.
If you do not have Real Player, go to www.penn-america.com
prior to the call, where Real
Player can be down loaded for free. An
online replay also will be available approximately one hour after the
call. Penn-America Group, Inc. (NYSE:PNG)
is a specialty commercial property and casualty insurance holding company.
The company’s “small thinking” – underwriting small
policies for small entrepreneurial businesses in small “Main Street”
towns through a small network of wholesale general agents – has
delivered substantial long-term growth in the original “E”-business:
serving entrepreneurs.
Certain information included in this news release and other
statements or materials published or to be published by the company are
not historical facts but are forward-looking statements including, but not
limited to, such matters as anticipated financial performance, business
prospects, technological developments, new and existing products,
expectations for market segment and growth and similar matters.
In connection with the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995, the company provides the
following cautionary remarks regarding important factors which, among
others, could cause the company’s actual results and experience to
differ materially from the anticipated results or other expectations
expressed in the company’s forward-looking statements.
The risks and uncertainties that may affect the operations,
performance, development, results of the company’s business and the
other matters referred to above include, but are not limited to:
(1) changes in the business environment in which the company
operates, including inflation and interest rates; (2) changes in taxes,
governmental laws and regulations; (3) competitive product and pricing
activity; and (4) difficulties of managing growth profitably.
For additional disclosure regarding potential risk factors, please
refer to the Company’s 1999 10-K and 3rd
Quarter 10-Q.
Note:
Tables follow. PENN-AMERICA GROUP, INC.
AND SUBSIDIARIES (NYSE: PNG) CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS (in
thousands, except per share data)
PENN-AMERICA GROUP, INC. AND
SUBSIDIARIES (NYSE: PNG) SELECTED CONSOLIDATED FINANCIAL DATA
(In thousands, except per share data
and ratios)
PENN-AMERICA GROUP, INC. AND SUBSIDIARIES (NYSE: PNG) SELECTED CONSOLIDATED FINANCIAL DATA
(In
thousands, except per share data and ratios)
PENN-AMERICA GROUP, INC. AND
SUBSIDIARIES (NYSE: PNG) SELECTED CONSOLIDATED FINANCIAL DATA
(In
thousands, except per share data and ratios)
PENN-AMERICA GROUP, INC. AND
SUBSIDIARIES (NYSE: PNG) SELECTED CONSOLIDATED FINANCIAL DATA
(In
thousands, except per share data and ratios)
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