EX-99.1 2 d881565dex991.htm EX-99.1

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Universal Insurance Holdings, Inc. Reports Record Fourth Quarter and

Full-Year 2014 Financial Results

Achieved Highest Fourth Quarter and Full-Year Net Income and EPS in Company History

Fort Lauderdale, FL, February 25, 2015—Universal Insurance Holdings, Inc. (NYSE: UVE) (or the “Company”) today reported record fourth quarter net income in 2014 of $21.0 million, or $0.59 diluted earnings per share (diluted EPS), an increase of $5.4 million, or 35 percent, compared to net income of $15.6 million, or $0.44 diluted EPS, for the same period in 2013.

For the full year of 2014, the Company reported record net income of $73.0 million, or $2.08 diluted EPS, an increase of $14.0 million, or 24 percent, compared to net income of $59.0, or $1.56 diluted EPS, for the same period of 2013.

“Our record fourth quarter and full year results concluded a year in which we delivered increasing profits and significant returns to shareholders,” said Sean P. Downes, the Company’s Chairman, President and Chief Executive Officer. “We generated strong operational and financial momentum in 2014 thanks to a focus on maintaining high underwriting standards and securing profitable, rate adequate business. Our geographic expansion efforts, a key driver of our growth strategy, also remained on track. We received approval to write business in Delaware and Indiana in 2014 and more recently in Pennsylvania, and achieved increases in policy count during 2014 in all states, including Florida. Our decision in 2014 to reduce our quota share reinsurance allowed us to retain a greater portion of our business and increase profitability. We enter 2015 with a clear opportunity to build on this operational momentum. The proceeds from our recent transaction with Nephila Capital coupled with our healthy balance sheet position us to lower our quota share percentage to zero. This change will enable us to retain 100% of our business, an estimated additional $230 million of our own organically grown premium, and further drive profitability and shareholder value.”

Fourth-Quarter 2014 & Recent Highlights

• Earned premiums grew by $28.9 million to $95.4 million.

• Total revenues increased by $26.9 million to $104.5 million.

• Net income and diluted EPS grew by $5.4 million and $0.15, respectively, compared to Q4 2014.

• Sold 1 million registered shares of UVE common stock at a price of $19.00 per share in a privately negotiated transaction on December 2, 2014.

• Paid fourth quarter dividend of $0.25 per share, resulting in total payments of $0.55 per share in dividends in 2014.

• The Pennsylvania Insurance Department issued a Certificate of Authority in January 2015 to UPCIC, a wholly-owned subsidiary of Universal Insurance Holdings, Inc., approving UPCIC as a licensed insurance entity in the state of Pennsylvania.

• Wrote first homeowners insurance policy in Indiana in January 2015.

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Fourth-Quarter 2014 Results

The increase in the Company’s net income for the fourth quarter of 2014 of $5.4 million, compared to the same period in 2013, primarily reflects an increase in net earned premiums, partially offset by increases in operating expenses. Earned premiums, total revenues, net income and diluted EPS were higher than any other fourth quarter in the Company’s history.

Diluted earnings per share for the fourth quarter of 2014 increased by $0.15, or 34 percent, compared to the full year of 2013.

Full-Year 2014 Results

For the full year of 2014, the Company’s net income increased by $14.0 million, or 24 percent, compared to the same period in 2013. Earned premiums, total revenues, net income and diluted EPS were higher than any other year in the Company’s history.

Diluted earnings per share for the full year of 2014 increased by $0.52, or 33 percent, compared to the full year of 2013. In addition to the increase in net income, diluted EPS benefited from lower outstanding shares as a result of the cumulative share repurchases made by the Company.

Share Repurchases

For the full year of 2014, the Company repurchased 2,391,208 shares of its common stock at an average price of $12.42 per share. As announced on September 25, 2014, the Company completed its $10 million share repurchase program announced on June 17, 2014, having repurchased a total of 758,361 shares of common stock in the open market at an average price of $13.15 per share. Additionally, the Company sold 1 million registered shares of common stock at a price of $19.00 per share in a privately negotiated transaction on December 2, 2014.

The Company noted that the completion of its share repurchase program and the sale of treasury shares underscores its confident outlook, solid financial position and commitment to effectively deploying capital when it sees clear value. The shares were sold out of treasury at a significant premium to the cost of the shares, thereby adding significant value for Universal shareholders.

The Board of Directors and management team expect to continue to consider ways to enhance shareholder value, both through strategic growth initiatives and capital returns to shareholders.

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Cash Dividends

On November 10, 2014, the Company announced that its board of directors declared a cash dividend of $0.25 per share of common stock, which was paid on December 15, 2014 to shareholders of record on December 5, 2014. The $0.25 per share dividend includes the expected $0.10 per share fourth quarter dividend, in line with the dividends paid for each of the first three quarters of 2014, and an additional special dividend of $0.15 per share.

On January 13, 2015, the Company announced that its board of directors had declared an increased cash dividend of $0.12 per share of common stock up $0.02 from the $0.10 per share paid the past three quarters. Payment will be made on March 2, 2015 to shareholders of record on February 18, 2015. If declared and paid as intended, the annual aggregate dividend in 2015 will be $0.48 for each common share.

Financial Results Presentation

The Company will make available an audio recording of a presentation discussing its fourth quarter and full-year 2014 financial results on Wednesday, February 25, 2015, at approximately 5:00 p.m. Eastern. The presentation will be pre-recorded and there will be no opportunity for live questions. The audio recording will be available at www.universalinsuranceholdings.com until March 25, 2015.

About Universal Insurance Holdings, Inc.

Universal Insurance Holdings, Inc., with its wholly-owned subsidiaries, is a vertically integrated insurance holding company performing all aspects of insurance underwriting, distribution and claims. Universal Property & Casualty Insurance Company (UPCIC), a wholly-owned subsidiary of the Company, is one of the leading writers of homeowners insurance in Florida and is now fully licensed and has commenced its operations in North Carolina, South Carolina, Hawaii, Georgia, Massachusetts, Maryland, Delaware and Indiana. American Platinum Property and Casualty Insurance Company, also a wholly-owned subsidiary, currently writes homeowners multi-peril insurance on Florida homes valued in excess of $1 million, which are limits and coverages currently not targeted through its affiliate UPCIC. For additional information on the Company, please visit our investor relations website at www.universalinsuranceholdings.com.

Forward-Looking Statements and Risk Factors

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Such statements may include commentary on plans, products and lines of business, marketing arrangements, reinsurance programs and other business developments and assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future results could differ materially from those described and the Company undertakes no obligation to correct or update any forward-looking statements. For further information regarding risk factors that could affect the Company’s operations and future results, refer to the Company’s reports filed with the Securities and Exchange Commission, including the Form 10-K for the year ended December 31, 2014.

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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands, except per share data)

		December 31,
ASSETS		2014				2013
Cash and cash equivalents		$	115,397			$	117,275
Restricted cash and cash equivalents			2,635				2,600
Fixed maturities, at fair value			353,949				289,418
Equity securities, at fair value			19,642				65,022
Short-term investments, at fair value			49,990				—
Prepaid reinsurance premiums			190,505				241,214
Reinsurance recoverable			55,187				107,847
Reinsurance receivable, net			7,468				203
Premiums receivable, net			50,987				46,461
Other receivables			2,763				2,587
Property and equipment, net			17,254				9,289
Deferred policy acquisition costs, net			25,660				15,899
Income taxes recoverable			5,675				8,152
Deferred income tax asset, net			11,850				12,051
Other assets			2,812				2,072
Total assets		$	911,774			$	920,090
LIABILITIES, CONTINGENTLY REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Unpaid losses and loss adjustment expenses		$	134,353			$	159,222
Unearned premiums			395,748				383,488
Advance premium			17,919				22,959
Accounts payable			4,121				3,441
Book overdraft			5,924				14,947
Reinsurance payable, net			66,066				86,232
Income taxes payable			1,799				2,566
Other liabilities and accrued expenses			36,318				34,386
Long-term debt			30,610				37,240
Total liabilities			692,858				744,481
Contingently redeemable common stock (pro-forma 12/31/14 balance of zero)1			19,000				—
Issued shares – 1,000
Outstanding shares – 1,000
STOCKHOLDERS’ EQUITY:
Cumulative convertible preferred stock, $.01 par value			—				—
Authorized shares – 1,000
Issued shares – 12 and 30
Outstanding shares – 12 and 30
Minimum liquidation preference, $8.49 and $6.98 per share
Common stock, $.01 par value			448				436
Authorized shares – 55,000
Issued shares – 43,769 and 43,641
Outstanding shares – 34,102 and 35,366
Treasury shares, at cost – 9,667 and 8,275			(62,153	)			(35,467	)
Additional paid-in capital (pro-forma 12/31/14 balance of $60.0 million)1			40,987				42,282
Accumulated other comprehensive income (loss), net of taxes			(1,835	)			(376	)
Retained earnings			222,469				168,734
Total stockholders’ equity (pro-forma 12/31/14 balance of $218.9 million)1			199,916				175,609
Total liabilities, contingently redeemable common stock and stockholders’ equity		$	911,774			$	920,090

¹  As disclosed in the Company’s Form 10-K filed earlier today with the Securities and Exchange Commission, on February 19, 2015, the Company modified the terms of a previously disclosed agreement with a third party relating to the sale of 1 million registered shares of UVE common stock which resulted in a reclassification of mezzanine equity to permanent equity. As a result of this reclassification, the pro-forma balance of contingently redeemable common stock, additional paid-in capital and stockholders equity as of December 31, 2014 is zero, $60.0 million and $218.9 million, respectively.

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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except per share data)

		Three Months Ended December 31,
		2014				2013
PREMIUMS EARNED AND OTHER REVENUES
Direct premiums written		$	182,216			$	173,730
Ceded premiums written			(98,106	)			(121,941	)
Net premiums written			84,110				51,789
Change in net unearned premium			11,310				14,663
Premiums earned, net			95,420				66,452
Net investment income (expense)			801				1,397
Net realized gains (losses) on investments			274				1,242
Net change in unrealized gains (losses) on investments			—				(62	)
Commission revenue			3,323				4,178
Policy fees			3,155				2,924
Other revenue			1,509				1,449
Total premiums earned and other revenues			104,482				77,580
OPERATING COSTS AND EXPENSES
Losses and loss adjustment expenses			34,590				28,598
General and administrative expenses			32,966				22,989
Total operating costs and expenses			67,556				51,587
INCOME BEFORE INCOME TAXES			36,926				25,993
Income taxes, current			15,665				8,776
Income taxes, deferred			289				1,635
Income taxes, net			15,954				10,411
NET INCOME		$	20,972			$	15,582
Basic earnings per common share		$	0.63			$	0.46
Weighted average common shares outstanding—Basic			33,457				33,602
Fully diluted earnings per common share		$	0.59			$	0.44
Weighted average common shares outstanding—Diluted			35,271				35,685
Cash dividend declared per common share		$	0.25			$	0.23

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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except per share data)

		Year Ended December 31,
		2014				2013
PREMIUMS EARNED AND OTHER REVENUES
Direct premiums written		$	789,577			$	783,894
Ceded premiums written			(399,730	)			(522,116	)
Net premiums written			389,847				261,778
Change in net unearned premium			(62,970	)			5,877
Premiums earned, net			326,877				267,655
Net investment income (expense)			2,375				1,928
Net realized gains (losses) on investments			5,627				(14,740	)
Net change in unrealized gains (losses) on investments			—				7,850
Commission revenue			14,205				18,615
Policy fees			13,982				13,661
Other revenue			6,210				6,190
Total premiums earned and other revenues			369,276				301,159
OPERATING COSTS AND EXPENSES
Losses and loss adjustment expenses			123,275				108,615
General and administrative expenses			118,397				91,988
Total operating costs and expenses			241,672				200,603
INCOME BEFORE INCOME TAXES			127,604				100,556
Income taxes, current			53,498				34,216
Income taxes, deferred			1,118				7,363
Income taxes, net			54,616				41,579
NET INCOME		$	72,988			$	58,977
Basic earnings per common share		$	2.17			$	1.64
Weighted average common shares outstanding—Basic			33,569				35,866
Fully diluted earnings per common share		$	2.08			$	1.56
Weighted average common shares outstanding—Diluted			35,150				37,776
Cash dividend declared per common share		$	0.55			$	0.49

Investor Contact:

Andy Brimmer / Mahmoud Siddig

Joele Frank, Wilkinson Brimmer Katcher

212-355-4449

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