TAMPA, Fla., March 7, 2022 /PRNewswire/ -- Heritage Insurance
Holdings, Inc. (NYSE: HRTG) ("Heritage" or the "Company"), a
super-regional property and casualty insurance holding company,
today reported fourth quarter and full-year 2021 financial
results.
Fourth Quarter and Full-Year 2021 Highlights
- Fourth quarter net loss of $49.2
million or $(1.79) per share,
down from $2.8 million or
$0.10 per diluted share in the prior
year quarter, with the reduction stemming from a $60.5 million ($2.20 per share) non-cash, mostly non-deductible,
goodwill impairment charge.
- Fourth quarter non-GAAP adjusted net income** of $11.3 million or $0.41 per diluted share, up from $2.8 million or $0.10 per diluted in the prior year quarter, with
the improvement stemming from stronger underwriting
profitability.
- Net combined ratio of 93.2%, improving from 108.7% in fourth
quarter 2020 to its lowest level in two years.
-
- Net loss ratio of 61.9%, improving 8.5 points from the prior
year quarter, as both attritional and net current accident quarter
weather losses improved.
- Net expense ratio of 31.3%, down 7.0 points from the prior year
quarter.
- Premiums-in-force of $1.2
billion, up 8.3% year-over-year, with the increase primarily
stemming from rate increases, while a 1.7% decline in
policies-in-force over the same period reflected Heritage's
selective underwriting.
- Gross premiums earned of $293.7
million, up 10.7% from $265.4
million in the prior year quarter, reflecting higher gross
premiums written over the last twelve months.
- Gross premiums written of $278.8
million, down 1.2% from the prior year quarter, as
intentional exposure-management and re-underwriting efforts
resulted in a 17.8% reduction in Florida, largely offset by growth in other
regions.
- Continued execution of Heritage's diversification strategy, as
Florida accounted for just 26.9%
of overall total insured value, down from 31.3% as of year-end
2020.
"As expected, we are beginning to see the initial benefits of
the strategic initiatives we launched in 2021, as we focus on
meaningful rate increases, re-underwriting existing business,
selectively accepting new business, optimizing our distribution
network, enhancing the agent experience and improving expense
management," said Heritage CEO Ernie
Garateix. "The result of those actions was solid
underwriting performance in the fourth quarter, as weather losses
normalized and year-over-year, the attritional loss ratio, which
excludes current accident quarter weather losses and prior year
development, improved by over 4 points. We also continued to
execute our diversification strategy, with significant
opportunities for future growth in geographies where we already
have meaningful and proven distribution partnerships. I'm pleased
with our progress and expect continued positive momentum in 2022
and beyond."
Capital Management
Heritage's Board of Directors declared a quarterly cash dividend
of $0.06 per share on the Company's
common stock. The dividend will be paid on April 6, 2022 to shareholders of record as of
March 17, 2022.
In addition, Heritage's Board of Directors approved a new
$25 million share repurchase
authorization through December 31,
2022.
In fourth quarter 2021, the Company, under the prior repurchase
authorization, repurchased 1,108,789 shares for $7.2 million at an average price of $6.48 per share.
Results of Operations
The following table summarizes our results of operations for the
three and twelve months ended December 31,
2021 and 2020 (amounts in thousands, except percentages and
per share amounts):
|
|
Three Months Ended
December 31,
|
|
|
Year Ended
December 31,
|
|
|
2021
|
|
|
2020
|
|
Change
|
|
|
2021
|
|
|
2020
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
|
166,712
|
|
$
|
|
159,548
|
|
|
4.5%
|
|
$
|
|
631,561
|
|
$
|
|
593,385
|
|
|
6.4%
|
Net (loss)
income
|
$
|
|
(49,218)
|
|
$
|
|
2,808
|
|
NM%
|
|
$
|
|
(74,727)
|
|
$
|
|
9,326
|
|
NM%
|
Non-GAAP adjusted
net income (loss)**
|
$
|
|
11,282
|
|
$
|
|
2,808
|
|
|
301.8%
|
|
$
|
|
(14,227)
|
|
$
|
|
9,326
|
|
|
(252.6)%
|
(Loss) income per
share
|
$
|
|
(1.79)
|
|
$
|
|
0.10
|
|
NM%
|
|
$
|
|
(2.69)
|
|
$
|
|
0.33
|
|
|
(915.2)%
|
Non-GAAP adjusted
net income (loss) per share**
|
$
|
|
0.41
|
|
$
|
|
0.10
|
|
|
309.5%
|
|
$
|
|
(0.51)
|
|
$
|
|
0.33
|
|
|
(254.5)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per
share
|
$
|
|
12.82
|
|
$
|
|
15.94
|
|
|
(19.6)%
|
|
$
|
|
12.82
|
|
$
|
|
15.94
|
|
|
(19.6)%
|
Return on
equity*
|
|
|
(52.6)%
|
|
|
|
2.5%
|
|
|
(55.1) pts
|
|
|
|
(19.0)%
|
|
|
|
2.1%
|
|
|
(21.1) pts
|
Non-GAAP adjusted
return on equity **
|
|
|
12.1%
|
|
|
|
2.5%
|
|
|
9.6 pts
|
|
|
|
(3.6)%
|
|
|
|
2.1%
|
|
|
(5.7) pts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting
summary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross premiums
written
|
$
|
|
278,820
|
|
$
|
|
282,324
|
|
|
(1.2)%
|
|
$
|
|
1,164,879
|
|
$
|
|
1,080,100
|
|
|
7.8%
|
Gross premiums
earned
|
$
|
|
293,696
|
|
$
|
|
265,353
|
|
|
10.7%
|
|
$
|
|
1,144,162
|
|
$
|
|
996,842
|
|
|
14.8%
|
Ceded premiums
earned
|
$
|
|
(133,768)
|
|
$
|
|
(113,923)
|
|
|
17.4%
|
|
$
|
|
(533,091)
|
|
$
|
|
(452,120)
|
|
|
17.9%
|
Net premiums
earned
|
$
|
|
159,928
|
|
$
|
|
151,430
|
|
|
5.6%
|
|
$
|
|
611,071
|
|
$
|
|
544,722
|
|
|
12.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ceded premium
ratio
|
|
|
45.5%
|
|
|
|
42.9%
|
|
|
2.6 pts
|
|
|
|
46.6%
|
|
|
|
45.4%
|
|
|
1.2 pts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Net
Premiums Earned:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio
|
|
|
61.9%
|
|
|
|
70.4%
|
|
|
(8.5) pts
|
|
|
|
69.9%
|
|
|
|
68.5%
|
|
|
1.4 pts
|
Expense
ratio
|
|
|
31.3%
|
|
|
|
38.3%
|
|
|
(7.0) pts
|
|
|
|
34.7%
|
|
|
|
38.5%
|
|
|
(3.8) pts
|
Combined
ratio
|
|
|
93.2%
|
|
|
|
108.7%
|
|
|
(15.5) pts
|
|
|
|
104.6%
|
|
|
|
107.1%
|
|
|
(2.5) pts
|
|
*Return on equity
represents annualized net income for the period divided by average
stockholders' equity during the period.
|
Note: Percentages
and sums in the table may not recalculate precisely due to
rounding.
|
Ratios
Ceded premium ratio represents ceded premiums as a
percentage of gross premiums earned.
Net loss ratio represents net losses and loss adjustment
expenses ("LAE") as a percentage of net premiums earned.
Net expense ratio represents policy acquisition costs
("PAC") and general and administrative ("G&A") expenses as a
percentage of net premiums earned. Ceding commission income is
reported as a reduction of PAC and G&A expenses. Goodwill
impairment is not a component of PAC or G&A and is not
reflected in the net expense ratio.
Net combined ratio represents the sum of net losses and
LAE, PAC and G&A expenses as a percentage of net premiums
earned. The net combined ratio is a key measure of underwriting
performance traditionally used in the property and casualty
industry. A combined ratio under 100% generally reflects profitable
underwriting results.
Quarterly Financial Results
Fourth quarter 2021 net loss was $49.2
million, compared to net income of $2.8 million in the prior year quarter. The
year-over-year change was primarily attributed to a $60.5 million non-cash goodwill impairment charge
and a large tax benefit in the prior year quarter, partly offset by
higher underwriting income associated with rate increases,
re-underwriting efforts and normalized weather. The goodwill
impairment charge was recorded following the Company's annual
valuation review and principally stemmed from its common stock
valuation and prevailing valuation multiples in the property
insurance market.
Fourth quarter 2021 non-GAAP adjusted net income** was
$11.3 million, up from adjusted net
income of $2.8 million in the prior
year quarter. Non-GAAP adjusted net income** growth primarily
stemmed from higher rates, lower current accident year weather and
attritional losses, and lower general and administrative expenses,
partly offset by lower favorable prior year reserve
development.
Gross premiums written were $278.8
million, down 1.2% year-over-year, as intentional
exposure-management and re-underwriting efforts resulted in a 17.8%
decline in Florida that was
largely offset by 16.7% growth in other states.
Premiums-in-force were $1.2
billion as of fourth quarter 2021, representing a 0.8%
annualized decline from third quarter 2021 due to continued
proactive underwriting actions. Year-over-year, premiums-in-force
were up 8.3%, while policies-in-force were down 1.7%, with the
delta primarily reflecting rate increases.
Gross premiums earned were $293.7
million in fourth quarter 2021, up 10.7% from $265.4 million in the prior year quarter. The
increase reflects higher gross premiums written over the last
twelve months.
The ceded premium ratio was 45.5% in fourth quarter 2021, up 2.6
points from 42.9% in the prior year quarter. The increase primarily
stems from ceded premium growth that outpaced gross premiums earned
growth due to our exposure management efforts. Additionally, the
prior year quarter's ceded premium ratio benefitted from year-end
reinsurance true-ups.
The net loss ratio was 61.9% in fourth quarter 2021, down 8.5
points from 70.4% in the prior year quarter. The decrease primarily
stems from a $9.1 million reduction
in net current accident quarter weather losses, including a
$12.7 million decline in catastrophe
losses and a $3.6 million increase in
other weather losses, partly offset by lower favorable prior year
reserve development. Net current accident quarter weather was
$29.8 million in fourth quarter 2021,
including $11.7 million of
catastrophe losses and $18.1 million
of other weather losses.
The net expense ratio was 31.3% in fourth quarter 2021, down 7.0
points from 38.3% in the prior year quarter. The decline stems
largely from costs associated with executive management departures
and compensation in the prior year quarter.
The net combined ratio was 93.2% in fourth quarter 2021, down
15.5 points from 108.7% in the prior year quarter. The decrease
stems from lower net loss and expense ratios, as described
above.
Book Value Analysis
Book value per share was $12.82 at
December 31, 2021, down 19.6% from
fourth quarter 2020.
|
As
Of
|
|
Book Value Per
Share
|
December 31,
2021
|
|
|
December 31,
2020
|
|
|
December 31,
2019
|
|
Numerator:
|
|
|
|
|
|
|
|
|
Common stockholders'
equity
|
$
|
343,051
|
|
|
$
|
442,344
|
|
|
$
|
448,799
|
|
Denominator:
|
|
|
|
|
|
|
|
|
Total Shares
Outstanding
|
|
26,753,511
|
|
|
|
27,748,606
|
|
|
|
28,650,918
|
|
Book Value Per Common
Share
|
$
|
12.82
|
|
|
$
|
15.94
|
|
|
$
|
15.66
|
|
Conference Call Details:
Tuesday, March 8, 2021– 9:30 a.m. ET
Participant Dial-in Numbers Toll
Free: 1-888-346-3095
Participant International Dial In: 1-412-902-4258
Canada Toll Free: 1-855-669-9657
Webcast:
To listen to the live webcast, please go to
http://investors.heritagepci.com/. This webcast will be archived
and accessible on the Company's website.
HERITAGE INSURANCE
HOLDINGS, INC.
|
Condensed
Consolidated Balance Sheets
|
(Amounts in
thousands)
|
(Unaudited)
|
|
|
|
December
31,
|
|
|
|
2021
|
|
|
2020
|
|
ASSETS
|
|
|
|
|
|
|
Fixed maturities,
available-for-sale, at fair value
|
|
$
|
669,354
|
|
|
$
|
561,011
|
|
Equity securities, at
fair value
|
|
|
1,415
|
|
|
|
1,599
|
|
Other investments,
net
|
|
|
23,929
|
|
|
|
26,409
|
|
Total
investments
|
|
|
694,698
|
|
|
|
589,019
|
|
Cash and cash
equivalents
|
|
|
359,337
|
|
|
|
440,956
|
|
Restricted
cash
|
|
|
5,415
|
|
|
|
5,427
|
|
Accrued investment
income
|
|
|
3,167
|
|
|
|
2,737
|
|
Premiums receivable,
net
|
|
|
71,925
|
|
|
|
77,471
|
|
Reinsurance
recoverable on paid and unpaid claims, net
|
|
|
269,391
|
|
|
|
355,037
|
|
Prepaid reinsurance
premiums
|
|
|
265,873
|
|
|
|
245,818
|
|
Income taxes
receivable
|
|
|
11,739
|
|
|
|
32,224
|
|
Deferred policy
acquisition costs, net
|
|
|
93,881
|
|
|
|
89,265
|
|
Property and
equipment, net
|
|
|
17,426
|
|
|
|
18,685
|
|
Right-of-use lease
asset, net
|
|
|
27,753
|
|
|
|
6,461
|
|
Intangibles,
net
|
|
|
55,926
|
|
|
|
62,277
|
|
Goodwill
|
|
|
91,959
|
|
|
|
152,459
|
|
Other
assets
|
|
|
12,272
|
|
|
|
11,543
|
|
Total
Assets
|
|
$
|
1,980,762
|
|
|
$
|
2,089,379
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Unpaid losses and loss
adjustment expenses
|
|
$
|
590,166
|
|
|
$
|
659,341
|
|
Unearned
premiums
|
|
|
590,419
|
|
|
|
569,618
|
|
Reinsurance
payable
|
|
|
191,728
|
|
|
|
161,918
|
|
Long-term debt,
net
|
|
|
120,757
|
|
|
|
120,998
|
|
Deferred income tax
liability, net
|
|
|
9,426
|
|
|
|
18,477
|
|
Advance
premiums
|
|
|
24,504
|
|
|
|
18,268
|
|
Accrued
compensation
|
|
|
8,014
|
|
|
|
9,325
|
|
Lease
liability
|
|
|
31,172
|
|
|
|
8,155
|
|
Accounts payable and
other liabilities
|
|
|
71,525
|
|
|
|
80,935
|
|
Total
Liabilities
|
|
$
|
1,637,711
|
|
|
$
|
1,647,035
|
|
Stockholders'
Equity:
|
|
|
|
|
|
|
Common stock, $0.0001
par value
|
|
|
3
|
|
|
|
3
|
|
Additional paid-in
capital
|
|
|
332,797
|
|
|
|
331,867
|
|
Accumulated other
comprehensive income, net of taxes
|
|
|
(4,573)
|
|
|
|
6,057
|
|
Treasury stock, at
cost
|
|
|
(123,557)
|
|
|
|
(115,365)
|
|
Retained
earnings
|
|
|
138,381
|
|
|
|
219,782
|
|
Total
Stockholders' Equity
|
|
|
343,051
|
|
|
|
442,344
|
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
1,980,762
|
|
|
$
|
2,089,379
|
|
HERITAGE INSURANCE
HOLDINGS, INC. AND SUBSIDIARIES
|
|
Consolidated
Statements of Income and Other Comprehensive (Loss)
Income
|
|
(Amounts in
thousands, except per share and share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31,
|
|
|
Year Ended
December 31,
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
REVENUE:
|
|
|
|
|
|
|
|
|
|
|
|
Gross premiums
written
|
$
|
278,820
|
|
|
$
|
282,324
|
|
|
$
|
1,164,879
|
|
|
$
|
1,080,100
|
|
Change in gross
unearned premiums
|
|
14,876
|
|
|
|
(16,971)
|
|
|
|
(20,717)
|
|
|
|
(83,258)
|
|
Gross premiums
earned
|
|
293,696
|
|
|
|
265,353
|
|
|
|
1,144,162
|
|
|
|
996,842
|
|
Ceded
premiums
|
|
(133,768)
|
|
|
|
(113,923)
|
|
|
|
(533,091)
|
|
|
|
(452,120)
|
|
Net premiums
earned
|
|
159,928
|
|
|
|
151,430
|
|
|
|
611,071
|
|
|
|
544,722
|
|
Net investment
income
|
|
1,855
|
|
|
|
2,519
|
|
|
|
5,652
|
|
|
|
12,302
|
|
Net realized and
unrealized gains (losses)
|
|
910
|
|
|
|
2,018
|
|
|
|
(16)
|
|
|
|
22,395
|
|
Other
revenue
|
|
4,019
|
|
|
|
3,581
|
|
|
|
14,854
|
|
|
|
13,966
|
|
Total
revenue
|
|
166,712
|
|
|
|
159,548
|
|
|
|
631,561
|
|
|
|
593,385
|
|
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
Losses and loss
adjustment expenses
|
|
98,994
|
|
|
|
106,618
|
|
|
|
427,370
|
|
|
|
373,387
|
|
Policy acquisition
costs
|
|
36,785
|
|
|
|
36,032
|
|
|
|
145,968
|
|
|
|
128,276
|
|
General and
administrative expenses
|
|
13,297
|
|
|
|
21,954
|
|
|
|
65,787
|
|
|
|
81,537
|
|
Goodwill
impairment
|
|
60,500
|
|
|
|
—
|
|
|
|
60,500
|
|
|
|
—
|
|
Total
expenses
|
|
209,576
|
|
|
|
164,604
|
|
|
|
699,625
|
|
|
|
583,200
|
|
Operating (loss)
income
|
$
|
(42,864)
|
|
|
$
|
(5,056)
|
|
|
$
|
(68,064)
|
|
|
$
|
10,185
|
|
Interest expense,
net
|
|
2,017
|
|
|
|
2,033
|
|
|
|
7,970
|
|
|
|
7,972
|
|
Income (loss) before
taxes
|
$
|
(44,881)
|
|
|
$
|
(7,089)
|
|
|
$
|
(76,034)
|
|
|
$
|
2,213
|
|
Provision (benefit)
for income taxes
|
|
4,337
|
|
|
|
(9,897)
|
|
|
|
(1,307)
|
|
|
|
(7,113)
|
|
Net (loss)
income
|
$
|
(49,218)
|
|
|
$
|
2,808
|
|
|
$
|
(74,727)
|
|
|
$
|
9,326
|
|
OTHER
COMPREHENSIVE (LOSS) INCOME:
|
|
|
|
|
|
|
|
|
|
|
|
Change in net
unrealized gains on investments
|
|
(5,345)
|
|
|
|
1,408
|
|
|
|
(13,661)
|
|
|
|
20,738
|
|
Reclassification
adjustment for net realized investment losses (gains)
|
|
32
|
|
|
|
(2,018)
|
|
|
|
(64)
|
|
|
|
(22,395)
|
|
Income tax benefit
related to items of other comprehensive income (loss)
|
|
1,145
|
|
|
|
142
|
|
|
|
3,095
|
|
|
|
384
|
|
Total comprehensive
(loss) income
|
$
|
(53,386)
|
|
|
$
|
2,341
|
|
|
$
|
(85,357)
|
|
|
$
|
8,053
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
27,546,664
|
|
|
|
27,748,606
|
|
|
|
27,804,355
|
|
|
|
27,978,519
|
|
Diluted
|
|
27,546,664
|
|
|
|
27,753,317
|
|
|
|
27,804,355
|
|
|
|
27,988,966
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(1.79)
|
|
|
$
|
0.10
|
|
|
$
|
(2.69)
|
|
|
$
|
0.33
|
|
Diluted
|
$
|
(1.79)
|
|
|
$
|
0.10
|
|
|
$
|
(2.69)
|
|
|
$
|
0.33
|
|
About Heritage
Heritage Insurance Holdings, Inc. is a super-regional property
and casualty insurance holding company. Through its insurance
subsidiaries and a large network of experienced agents, the Company
writes approximately $1.2 billion of
gross personal and commercial residential premium across its
multi-state footprint.
Non-GAAP Financial Measurements
We measure our performance with several financial and operating
metrics. We use these metrics to assess the progress of our
business, make decisions on where to allocate capital, time and
investments and assess the long-term performance of our company.
Certain of these financial metrics are reported in accordance with
U.S. GAAP and certain of these metrics are considered non-GAAP
financial measures. As our business evolves, we may make changes to
our key financial and operating metrics used to measure our
performance in future periods. For further information and a
reconciliation to the most applicable financial measures under U.S.
GAAP, refer to our reconciliation below.
Non-GAAP adjusted net income is a non-GAAP financial measure and
the most directly comparable GAAP financial measure is net
income. Non-GAAP adjusted net income is calculated by adding
back the non-recurring, non-cash charges of $60.5 million related to impairment of goodwill
for the three months and year ended December
31, 2021, respectively.
Non-GAAP adjusted earnings per share (EPS) is a non-GAAP measure
and is calculated by dividing the non-GAAP adjusted net income by
the number of fully diluted shares at end the of period.
Non-GAAP adjusted return on equity is a non-GAAP measure and is
calculated by using non-GAAP adjusted net income as the base for
the calculation.
We use these non-GAAP financial measures internally as
performance measures and believe that these measures reflect the
financial performance of the Company's ongoing business and core
operations. As a supplement to the primary GAAP presentations,
Non-GAAP financial measures provide meaningful supplemental
information about our operating performance. We believe that these
non-GAAP financial measures facilitate comparisons with our
historical results and with the results of peer companies who
present similar measures (although other companies may define
non-GAAP measures differently than we define them, even when
similar terms are used to identify such measures). These metrics
should only be considered as supplemental to net income, earnings
per share and return on equity as measures of our performance.
These measures should also not be used as a supplement to, or
substitute for, cash flow from operating activities (computed in
accordance with U.S. GAAP).
The following tables are reconciliations of adjusted net income,
adjusted earnings per share and adjusted return on equity to the
most directly comparable U.S. GAAP financial measures for the
quarters and years ended December 31,
2021 and 2020, respectively:
|
|
|
Three Months Ended
December 31,
|
|
|
Year Ended
December 31,
|
|
|
|
2021
|
|
|
2020
|
|
Change
|
|
|
2021
|
|
|
2020
|
|
|
Change
|
|
|
|
(in thousands
except per share data)
|
Income Statement
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
|
|
(49,218)
|
|
$
|
|
2,808
|
|
NM%
|
|
$
|
|
(74,727)
|
|
$
|
|
9,326
|
|
$
|
|
(901.3)%
|
|
Less: Goodwill
impairment
|
|
|
(60,500)
|
|
|
|
—
|
|
NM
|
|
|
|
(60,500)
|
|
|
|
—
|
|
|
NM
|
|
Non-GAAP adjusted net
income (loss)**
|
$
|
|
11,282
|
|
$
|
|
2,808
|
|
|
301.8%
|
|
$
|
|
(14,227)
|
|
$
|
|
9,326
|
|
$
|
|
(252.6)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per
Share Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
|
|
(1.79)
|
|
$
|
|
0.10
|
|
NM%
|
|
$
|
|
(2.69)
|
|
$
|
|
0.33
|
|
|
|
(915.15)%
|
|
Less: Goodwill
impairment[1]
|
|
|
(2.20)
|
|
|
|
—
|
|
NM
|
|
|
|
(2.18)
|
|
|
|
—
|
|
|
NM
|
|
Non-GAAP adjusted net
income (loss)**
|
$
|
|
0.41
|
|
$
|
|
0.10
|
|
|
309.5%
|
|
$
|
|
(0.51)
|
|
$
|
|
0.33
|
|
|
|
(254.5)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Equity
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
Equity
|
|
|
(52.6)%
|
|
|
|
2.5%
|
|
|
(55.1) pts
|
|
|
|
(19.0)%
|
|
|
|
2.1%
|
|
|
|
(21.1) pts
|
|
Less: Goodwill
impairment
|
|
|
(64.7)%
|
|
|
|
—%
|
|
NM pts
|
|
|
|
(15.4)%
|
|
|
|
—%
|
|
|
NM pts
|
|
Non-GAAP adjusted
return on equity**
|
|
|
12.1%
|
|
|
|
2.5%
|
|
|
9.6 pts
|
|
|
|
(3.6)%
|
|
|
|
2.1%
|
|
|
|
(5.7) pts
|
|
NM - not
meaningful
|
|
|
|
|
|
|
|
|
1 Amount
is calculated by dividing the goodwill impairment of $60.5 million
by the diluted weighted average shares outstanding at December 31,
2021 of 27,546,664
|
|
|
|
Three Months Ended
December 31,
|
|
|
Year Ended
December 31,
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
Income Statement
Data
|
|
(annualized)
|
|
|
|
|
|
|
Net (loss)
income
|
$
|
|
(196,874)
|
|
$
|
|
11,232
|
|
$
|
|
(74,727)
|
|
$
|
|
9,326
|
Non-GAAP adjusted net
income (loss)**
|
$
|
|
45,126
|
|
$
|
|
11,232
|
|
$
|
|
(14,227)
|
|
$
|
|
9,326
|
|
|
|
|
|
|
|
|
|
|
|
|
Divided by Average
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity at
January 31, 2021
|
$
|
|
405,025
|
|
$
|
|
443,140
|
|
$
|
|
442,344
|
|
$
|
|
448,799
|
Shareholders' equity at
December 31, 2021
|
|
|
343,051
|
|
|
|
442,344
|
|
|
|
343,051
|
|
|
|
442,344
|
Average
Shareholders' Equity
|
$
|
|
374,038
|
|
$
|
|
442,742
|
|
$
|
|
392,697
|
|
$
|
|
445,571
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
Equity
|
|
|
(52.6)%
|
|
|
|
2.5%
|
|
|
|
(19.0)%
|
|
|
|
2.1%
|
Non-GAAP adjusted
return on equity**
|
|
|
12.1%
|
|
|
|
2.5%
|
|
|
|
(3.6)%
|
|
|
|
(5.7)%
|
|
**Adjusted net
income, Adjusted earnings per share, and Adjusted Return on Equity
are Non-GAAP measures defined and reconciled to the most directly
comparable GAAP financial measures in the "Non-GAAP Financial
Measurements" section of this release.
|
Forward-Looking Statements
Statements in this press release that are not historical facts
are forward-looking statements that are subject to certain risks
and uncertainties that could cause actual events and results to
differ materially from those discussed herein. Without limiting the
generality of the foregoing, words such as "may," "will," "expect,"
"believe," "anticipate," "intend," "could," "would," "estimate,"
"or "continue" or the other negative variations thereof or
comparable terminology are intended to identify forward-looking
statements. This release includes forward-looking statements
relating to (i) opportunities for future growth in geographies and
the impact of distribution partnerships on that growth and (ii) the
impact of our strategic initiatives on our financial results and
our profitability position for 2021 and beyond. The risks and
uncertainties that could cause our actual results to differ from
those expressed or implied herein include, without limitation: the
success of the Company's underwriting and profitability
initiatives; the continued and potentially prolonged impact of the
COVID-19 pandemic on the economy, demand for our products and our
operations; inflation and other changes in economic conditions
(including changes in interest rates and financial and real estate
markets), including as a result of the COVID-19 pandemic; the
impact of new federal and state regulations that affect the
property and casualty insurance market; the costs of reinsurance,
the collectability of reinsurance and our ability to obtain
reinsurance coverage on terms and at a cost acceptable to us;
assessments charged by various governmental agencies; pricing
competition and other initiatives by competitors; our ability to
obtain regulatory approval for requested rate changes, and the
timing thereof; legislative and regulatory developments; the
outcome of litigation pending against us, including the terms of
any settlements; risks related to the nature of our business;
dependence on investment income and the composition of our
investment portfolio; the adequacy of our liability for losses and
loss adjustment expense; our ability to build and maintain
relationships with insurance agents; claims experience; ratings by
industry services; catastrophe losses; reliance on key personnel;
weather conditions (including the severity and frequency of storms,
hurricanes, tornadoes and hail); changes in loss trends; acts of
war and terrorist activities; court decisions and trends in
litigation; and other matters described from time to time by us in
our filings with the Securities and Exchange Commission, including,
but not limited to, the Company's Annual Report on Form 10-K for
the year ended December 31, 2020
filed with the Securities and Exchange Commission on March 9, 2021 and subsequent filings. The
Company undertakes no obligations to update, change or revise any
forward-looking statement, whether as a result of new information,
additional or subsequent developments or otherwise.
Investor Contact:
investors@heritagepci.com
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SOURCE Heritage Insurance Holdings, Inc.