Independence Holding Company Announces 2021 Second-Quarter and Six-Month Results
08/09/2021 - 08:19 AM
STAMFORD, Conn., Aug. 09, 2021 (GLOBE NEWSWIRE) -- Independence Holding Company (NYSE: IHC) today reported 2021 second-quarter and six-month results.
Financial Results
Net income attributable to IHC of $76,471,000 or $5.22 per share for the three months ended June 30, 2021 compared to $421,000 or $.03 per share, diluted, for the three months ended June 30, 2020. Net income attributable to IHC was $82,092,000 or $5.61 per share, diluted, for the six months ended June 30, 2021 compared to $4,699,000 or $.32 per share, diluted, for the six months ended June 30, 2020.
The Company entered into three transactions this year for the sales of Madison National Life Insurance Company, Inc. (“Madison National Life”) to Horace Mann Educators Corporation, Standard Security Life Insurance Company of New York (“Standard Security Life”) to Reliance Standard Life Insurance Company and 70% of its pet business, including all of the common stock of Independence American Insurance Company and 85% of the common stock of PetPartners, Inc. (“PetPartners”), to Iguana Capital, Inc. (“Iguana Capital”).
The Company completed the sale of PetPartners on June 30, 2021, and results for the three months and six months of 2021 include a gain on the sale of PetPartners of $62,693,000 net of tax. Also included in income from discontinued operations is certain income from Standard Security Life and Independence American Insurance Company. The results of Madison National Life will be shown as discontinued operations in the third quarter. The gain on the sale of Standard Security Life, Independence American Insurance Company and Madison National Life will be recorded when those transactions receive regulatory approval and are consummated.
Chief Executive Officer’s Comments
Roy T. K. Thung, Chief Executive Officer, commented, “We are very pleased with the three transactions we entered into this year, and the consummation of the sales is expected to take most of the focus of the Company for the remainder of 2021. After all the transactions are closed, IHC projects that it will hold approximately $560 million in cash and investments, net of liabilities; a 30% interest in Iguana Capital carried at $115 million; and our health insurance agency and other assets with an aggregate carrying value of approximately $20 million, resulting in an estimated book value of approximately $47.00 per share which is calculated as if the transactions occurred and were recorded on June 30, 2021. Actual book value per share at June 30, 2021 was $37.45. These projections are based on information currently known to management and include the use of estimates and assumptions with regards to anticipated transaction costs, estimated tax rates and other potential changes.”
Mr. Thung added, “We intend to invest, develop and expand our agency operations into a much larger and profitable operation. As we progress, our agency operations will be centered around INSXcloud.com (INSX), our CMS approved Web Broker. INSX provides an agent with the ability to quote, directly enroll and track applications on the Federally Facilitated Marketplace, plus much more. The balance of our agency includes our W-2 Call Centers and our captive independent Advisors unit, both of which sell into the under/over age 65 health insurance markets, as well as our Independence Brokerage Group which recruits independent agents and agencies to sell via our platforms and contracts. We are refocusing a portion of our over 65 division into the under 65 market in order to take advantage of the positioning of INSX, our agency and our lead generation capabilities, and the market growth resulting from the American Rescue Plan Act. Although these operations have been unprofitable, we expect these changes will improve the results and bring us to profitability in the future. In addition, we will also continue to monitor and support our minority interest investment in Iguana Capital.”
About The IHC Group
Independence Holding Company (NYSE: IHC), through our current subsidiaries, underwrites and distributes health, group disability and life, New York State DBL and paid family leave, and pet insurance. IHC underwrites policies in all 50 states, Washington D.C., Puerto Rico and the U.S. Virgin Islands through our three carriers: Independence American Insurance Company, Standard Security Life Insurance Company of New York (“Standard Security Life”) and Madison National Life Insurance Company, Inc. (“Madison National Life”). We also distribute products nationally through multiple channels, including our agencies, call centers, advisors, direct and affinity relationships, Web Broker, and web properties, including www.healthedeals.com ; www.healthinsurance.org ; www.medicareresources.org ; www.petplace.com ; and www.inxscloud.com . As previously announced, IHC has entered into stock purchase agreements to sell all of the issued and outstanding capital stock of Standard Security Life, Madison National Life and Independence American Holdings Corp., which includes Independence American Insurance Company and other assets of IHC’s pet business, each subject to regulatory approval. To learn more, visit https://ihcgroup.com/ .
Forward-looking Statements
Certain statements and information contained in this 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 that 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. IHC expressly disclaims any duty to update its forward-looking statements unless required by applicable law.
INDEPENDENCE HOLDING COMPANY CONDENSED CONSOLIDATED STATEMENTS OF INCOME June 30, 2021 (In Thousands, Except Shares and Per Share Data) Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 REVENUES: Premiums earned $ 42,451 $ 49,138 $ 86,023 $ 99,804 Net investment income 1,651 2,329 3,452 4,828 Fee income 4,944 3,907 11,079 7,341 Other income 410 807 1,026 1,432 Net investment gains (losses) (126 ) 274 91 117 49,330 56,455 101,671 113,522 EXPENSES: Insurance benefits, claims and reserves 17,192 21,339 39,113 47,628 Selling, general and administrative expenses 32,842 37,974 63,602 69,034 50,034 59,313 102,715 116,662 Loss from continuing operations before income taxes (704 ) (2,858 ) (1,044 ) (3,140 ) Income tax benefit (267 ) (1,066 ) (430 ) (1,187 ) Loss from continuing operations, net of tax (437 ) (1,792 ) (614 ) (1,953 ) Discontinued operations: Total pretax income from discontinued operations 92,375 3,594 99,574 9,243 Income tax expense on discontinued operations 15,570 1,264 17,026 2,430 Income from discontinued operations, net of tax 76,805 2,330 82,548 6,813 Net income 76,368 538 81,934 4,860 (Income) loss from nonredeemable noncontrolling interests 1 (43 ) 2 (34 ) (Income) loss from redeemable noncontrolling interests 102 (74 ) 156 (127 ) NET INCOME ATTRIBUTABLE TO IHC $ 76,471 $ 421 $ 82,092 $ 4,699 Basic income per common share Loss from continuing operations $ (.03 ) $ (.12 ) $ (.04 ) $ (.13 ) Income from discontinued operations 5.25 .15 5.65 .45 Basic income per common share $ 5.22 $ .03 $ 5.61 $ .32 WEIGHTED AVERAGE SHARES OUTSTANDING 14,642 14,765 14,641 14,811 Diluted income per common share Loss from continuing operations $ (.03 ) $ (.12 ) $ (.04 ) $ (.13 ) Income from discontinued operations 5.25 .15 5.65 .45 Diluted income per common share $ 5.22 $ .03 $ 5.61 $ .32 WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING 14,642 14,765 14,641 14,811
As of August 7, 2021, there were 14,644,389 common shares outstanding, net of treasury shares.
INDEPENDENCE HOLDING COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands) June 30, 2021 December 31, 2020 ASSETS: Investments: Short-term investments $ 1,550 $ 1,568 Securities purchased under agreements to resell 70,323 33,038 Fixed maturities, available-for-sale 183,709 210,719 Equity securities - 1,753 Other investments 2,022 1,928 Total investments 257,604 249,006 Cash and cash equivalents 22,834 31,923 Investment in Iguana Capital, Inc. 33,762 - Due and unpaid premiums 10,950 9,981 Due from reinsurers 354,735 357,237 Goodwill 12,486 12,486 Funds held in escrow 78,779 - Other assets 29,864 46,832 Assets attributable to discontinued operations 416,162 375,691 TOTAL ASSETS $ 1,217,176 $ 1,083,156 LIABILITIES AND EQUITY: LIABILITIES: Policy benefits and claims $ 127,815 $ 132,957 Future policy benefits 196,026 198,086 Funds on deposit 142,155 141,376 Unearned premiums 1,763 1,952 Other policyholders' funds 11,988 12,001 Due to reinsurers 2,242 3,872 Accounts payable, accruals and other liabilities 66,519 44,855 Liabilities attributable to discontinued operations 120,180 75,939 TOTAL LIABILITIES 668,688 611,038 Commitments and contingencies Redeemable noncontrolling interest - 2,312 STOCKHOLDERS’ EQUITY: Preferred stock (none issued) - - Common Stock 18,625 18,625 Paid-in capital 125,653 124,757 Accumulated other comprehensive income 3,220 4,197 Treasury stock, at cost (77,189 ) (77,088 ) Retained earnings 478,139 399,273 TOTAL IHC STOCKHOLDERS’ EQUITY 548,448 469,764 NONREDEEMABLE NONCONTROLLING INTERESTS 40 42 TOTAL EQUITY 548,488 469,806 TOTAL LIABILITIES AND EQUITY $ 1,217,176 $ 1,083,156
CONTACT: Loan Nisser (646) 509-2107 www.IHCGroup.com