AMCP Amcomp Incorporated (MM)

AmCOMP Incorporated (Nasdaq:AMCP) today announced results for the first quarter ended March 31, 2007. For the first quarter of 2007, net income was $4.0 million, or $0.25 per diluted share, compared to net income of $6.0 million, or $0.46 per diluted share, for the same period in 2006. Weighted average diluted shares outstanding for the first quarter of 2007 were 15,779,000 compared to 12,892,000 for the first quarter of 2006. Total revenue for the first quarter of 2007 was $64.1 million versus $70.1 million in the comparable period in 2006. The net combined ratio including policyholder dividends for the first quarter of 2007 was 96.4% compared to 90.8% for the same period in 2006. Loss and loss adjustment expenses for the first quarter of 2007 were $34.9 million versus $37.5 million in the same period in 2006. Total underwriting expenses for the first quarter were $19.9 million compared to $19.8 million in the prior year period. Commenting on the Company�s financial results, Fred R. Lowe, President and Chief Executive Officer said: �We continue our focus on producing consistent underwriting profits and we are pleased with this quarter�s combined ratio of 96.4%. We are committed to our underwriting discipline and our efforts to reach our targets for underwriting profit despite the pricing pressures and competitiveness in the workers� compensation market. During the quarter, excluding involuntary pools and unallocated loss adjustment expenses, we realized $6.3 million in redundancies, highlighting our favorable outcomes in relation to our loss reserves. Our book value increased 2.5% over that at year-end 2006. �Our premiums decreased in Florida largely due to the impact of yet another state-mandated rate decrease, this time of 15.7%, which followed on top of last year�s rate decrease of 13.5%, as well as a decrease in payrolls from construction activities. While a slow-down in construction has not been an issue in our other states, there is increased competition in some of the states, particularly Indiana, Kentucky and Texas. �While this quarter�s earnings are not as robust as we would like, our management team and I believe that the company remains well positioned for future profitability. Our balance sheet is clean and we continue to invest in technology to improve the ease of doing business with us, as well as other sales and marketing programs that should contribute to positive results in future periods. We are mindful of achieving a healthy balance between expense containment and expansion of our distribution network into other states,� Mr. Lowe concluded. About AmCOMP With roots dating back to 1982, AmCOMP Incorporated is an insurance holding company whose wholly owned subsidiaries, AmCOMP Preferred and AmCOMP Assurance, are mono-line workers' compensation insurers with products that focus on value-added services to policyholders. Currently marketing insurance policies in 15 core states and targeting small to mid-sized employers in a variety of industries, AmCOMP distributes its products through independent agencies. Conference Call The Company will host a conference call on Thursday, May 10, 2007, at 8:00 AM ET, featuring remarks by Fred Lowe, President and Chief Executive Officer, Debra Ruedisili, Executive Vice President and Chief Operating Officer, and Kumar Gursahaney, Senior Vice President, Chief Financial Officer and Treasurer. The conference call is available via webcast on the Company's website and can be accessed by visiting http://ir.amcomp.com/eventdetail.cfm?eventid=38455. The dial-in number for the conference call is 913-981-4903. Please call at least five minutes before the scheduled start time. There will be an audio replay of the call, which will be available starting 11:00 AM ET through 11:59 PM ET May 13, 2007, and may be accessed by calling 888-203-1112 and using the pass code 5348376. The conference call webcast will be available on the Company�s website for 60 days. Forward-looking Statements Statements made in this press release, including those about the Company�s financial condition and results of operations and about its future plans and objectives that are not based on historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words �believe,� �expect,� �plans,� �intend,� �project,� �estimate,� �may,� �should,� �will,� �continue,� �potential,� �forecast� and �anticipate� and similar expressions identify forward-looking statements. Any such statements involve known and unknown risks, uncertainties and other factors, including those set forth under the heading �Risk Factors� in the Company�s filings with the Securities and Exchange Commission. Such factors may cause AmCOMP�s actual performance, condition and achievements to be materially different than any future performance, condition and achievement discussed in this press release. All subsequent written and oral forward-looking statements attributable to us or individuals acting on our behalf are expressly qualified in their entirety by these cautionary statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Set forth in the tables below are summary results of operations for the three month periods ended March 31, 2007 and 2006, as well as selected balance sheet data as of March 31, 2007 and December 31, 2006. The following information is preliminary and unaudited and is subject to change until final results are publicly distributed. The Company currently expects to file its audited consolidated financial statements with the Securities and Exchange Commission as part of its report on Form 10-Q in a timely fashion on or before May 10, 2007. AmCOMP Incorporated and Subsidiaries Condensed Consolidated Statements of Operations (in thousands, except per share amounts and ratios) (unaudited) � Three Months Ended March 31, 2007� � 2006� Statement of Operations Data: Revenue: Net premiums earned $59,213� $65,970� Net investment income 4,862� 4,043� Net realized investment gains -� 1� Other income 30� � 85� Total revenue 64,105� 70,099� Expenses: Losses and loss adjustment expenses 34,918� 37,467� Policy acquisition expenses 9,203� 12,022� Underwriting and other expenses 10,693� 7,779� Dividends to policyholders 2,241� 2,663� Interest expense 954� � 838� Total expenses 58,009� 60,769� � � � Income before income taxes 6,096� 9,330� Income tax expense 2,076� � 3,355� Net income $ 4,020� � $ 5,975� � Operating Data: Direct premiums written $74,356� $88,380� Gross premiums written 75,579� 89,540� Net premiums written 75,070� 86,696� Per Share Data: Earnings per share Basic $0.26� $0.54� Diluted 0.25� 0.46� Weighted average common shares outstanding Basic 15,760� 11,029� Diluted 15,779� 12,892� Selected Insurance Ratios: Net loss ratio1 59.0% 56.8% Net policy acquisition expense ratio2 15.5% 18.2% Underwriting and other expense ratio3 18.1% 11.8% Net combined ratio, excluding policyholder dividends4 92.6% 86.8% Dividend ratio5 3.8% � 4.0% Net combined ratio, including policyholder dividends6 96.4% � 90.8% � 1 Losses and loss adjustment expenses divided by net premiums earned, after the effects of reinsurance 2 Net policy acquisition expenses divided by net premiums earned 3 Underwriting and other expenses divided by net premiums earned 4 Sum of ratios computed in footnotes 1, 2 and 3 5 Dividends to policyholders divided by net premiums earned 6 Sum of ratios computed in footnotes 1, 2, 3 and 5 AmCOMP Incorporated and Subsidiaries Consolidated Balance Sheets (in thousands) (unaudited) March 31, December 31, 2007� � 2006� Assets: Cash and investments $443,810� $436,775� Premiums receivable � net 117,408� 106,270� Reinsurance recoverables 75,941� 75,360� Deferred policy acquisition costs 23,591� 20,749� Deferred income taxes � net 22,462� 21,613� Other assets 19,200� � 23,730� Total Assets $702,412� � $684,497� � Liabilities and stockholders� equity: Unpaid losses and loss adjustment expenses $337,827� $334,363� Unearned and advance premiums 130,676� 115,218� Notes payable 37,804� 38,250� Other liabilities 51,806� � 57,378� Total liabilities $558,113� $545,209� Preferred stock �� �� Total stockholders� equity 144,299� � 139,288� Total liabilities and stockholders� equity $702,412� � $684,497�