NASHVILLE, TN / ACCESSWIRE / May 5, 2020 / First Acceptance Corporation (OTCQX:FACO) today reported its financial results for the quarter ended March 31, 2020. A quarterly report can be found at www.otcmarkets.com/stock/FACO/disclosure.
Loss before income taxes for the three months ended March 31, 2020 was $2.3 million, compared with income before income taxes of $8.3 million for the three months ended March 31, 2019. Net loss for the three months ended March 31, 2020 was $1.8 million, compared with net income of $6.5 million for the three months ended March 31, 2019. Diluted net loss per share was $0.04 for the three months ended March 31, 2020, compared with diluted net income per share of $0.16 for the same period in the prior year.
For the three months ended March 31, 2020 and 2019, we recognized favorable prior period loss and loss adjustment expense development of $0.2 million and $11.1 million, respectively. Net loss for the three months ended March 31, 2020 included $3.3 million in net unrealized losses on equity securities and net income for three months ended March 31, 2019 included $0.8 million in net unrealized gains on equity securities.
President and Chief Operations Officer, Larry Willeford, commented, "During this unprecedented time, Acceptance responded to the COVID-19 pandemic by making the safety of our Team Members and customers our highest priority. Through the extraordinary efforts of our leadership team, we utilized a work-at-home model to significantly minimize the head count in our corporate offices. We also established safe access to our retail stores and our internet and call center have remained operational. Through all this, Acceptance has been fully operational as an "essential business" meeting the needs of our customers, many of whom have still remained in the work force."
Mr. Willeford further added, "While our usual tax return-driven late March busy season was impacted by the pandemic resulting in less new business, in April we have seen new business respond to customers having received their government stimulus checks. While the outlook for the remainder of the year is still uncertain, we at Acceptance will continue to place our Team Members and customers first. Considering all that Acceptance has been through, I am otherwise pleased to report that excluding a pandemic-driven $3.3 million unrealized loss on our equity securities, pre-tax income for the quarter was $1.0 million."
About First Acceptance Corporation
We are principally a retailer, servicer and underwriter of non-standard personal automobile insurance based in Nashville, Tennessee. Our insurance operations generate revenue from selling non-standard personal automobile insurance products and related products in 17 states. We currently conduct our insurance servicing and underwriting operations in 15 states and operate only as an insurance agency in two states. Non-standard personal automobile insurance is sought after by individuals because of their inability or unwillingness to obtain standard insurance coverage due to various factors, including payment history, payment preference, failure in the past to maintain continuous insurance coverage or driving record and/or vehicle type.
We currently lease and operate 346 retail locations and a call center staffed with employee-agents. Our employee-agents primarily sell non-standard personal automobile insurance products underwritten by us and through third-party carriers for which we receive a commission. We also offer a variety of additional commissionable products, and, in most states, our employee-agents also sell an insurance product providing personal property and liability coverage for renters that is underwritten by us. In addition to our retail locations, we are able to complete the entire sales process over the phone via our call center or through the internet via our consumer-based website or mobile platform. On a limited basis, we also sell our products through selected retail locations operated by independent agents.
Additional information about First Acceptance Corporation can be found online at www.acceptance.com.
Forward-Looking Statements
This press release contains forward-looking statements. All statements made other than statements of historical fact are forward-looking statements. You can identify these statements from our use of the words "believe," "expect," or the negative of these objective terms and similar expressions. These statements, which have been included in reliance on the "safe harbor" provisions of the federal securities laws, involve risks and uncertainties. Investors are hereby cautioned that these statements may be affected by important factors, including, among others, the factors set forth under the caption "Risk Factors" in our Annual Report for the year ended December 31, 2019 filed by the Company with the OTCQX. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
First Acceptance Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(amounts in thousands, except per share data)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2020 | 2019 | |||||||
Revenues | $ | 63,581 | $ | 76,568 | ||||
Loss (income) before income taxes | $ | (2,300 | ) | $ | 8,293 | |||
Net (loss) income | $ | (1,833 | ) | $ | 6,513 | |||
Net (loss) income per diluted share | $ | (0.04 | ) | $ | 0.16 | |||
Average diluted shares outstanding | 41,394 | 41,805 | ||||||
Statutory Combined Ratio: | ||||||||
Loss | 69.5 | % | 62.0 | % | ||||
Expense | 28.9 | % | 24.7 | % | ||||
Combined | 98.4 | % | 86.7 | % | ||||
INVESTOR RELATIONS CONTACT:
Michael J. Bodayle
615.844.2885
SOURCE: First Acceptance Corporation
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https://www.accesswire.com/588365/First-Acceptance-Corporation-Reports-Operating-Results-for-the-Quarter-Ended-March-31-2020
