UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2005
OR
[X] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission File Number 000-20848
UNIVERSAL INSURANCE HOLDINGS, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 65-0231984
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1110 W. Commercial Blvd.
Suite 100
Fort Lauderdale, Florida 33309
(Address of principal executive offices)
(954) 958-1200
(Issuer's telephone number)
2875 N.E. 191st Street
Suite 302
Miami, FL 33180
(former address)
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the last practicable date: 36,463,219 shares of common
stock as of August 15, 2005.
Transitional Small Business Disclosure Format Yes No X
--- ---
UNIVERSAL INSURANCE HOLDINGS, INC.
----------------------------------
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
------- --------------------
The following unaudited consolidated financial statements of Universal
Insurance Holdings, Inc. have been prepared in accordance with the instructions
to Form 10-QSB and, therefore, omit or condense certain footnotes and other
information normally included in financial statements prepared in conformity
with accounting principles generally accepted in the United States of America.
In the opinion of management, all adjustments (consisting primarily of normal
recurring accruals) necessary for a fair presentation of the financial
information for the interim periods reported have been made. Results of
operations for the six months ended June 30, 2005 are not necessarily indicative
of the results for the year ending December 31, 2005.
2
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 2005
(Unaudited)
ASSETS
Cash and cash equivalents $ 15,911,982
Reinsurance recoverables 49,895,348
Premiums and other receivables
(net of allowance for doubtful accounts of $46,500) 3,638,913
Investments in real estate 3,047,032
Property and equipment, net 919,148
Other assets 53,583
---------------
Total assets $ 73,466,006
===============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Unpaid losses and loss adjustment expenses $ 13,353,358
Unearned premiums 34,467,639
Accounts payable 2,445,553
Reinsurance payable 14,926,427
Other accrued expenses 2,506,964
Loans payable 1,378,076
---------------
Total liabilities 69,078,017
---------------
STOCKHOLDERS' EQUITY:
Cumulative convertible preferred stock, $.01 par value, 1,000,000 shares
authorized, 138,640 shares issued and outstanding, minimum liquidation
preference of $1,419,700 1,387
Common stock, $.01 par value, 40,000,000 shares authorized, 36,463,219
shares issued and 33,354,574 shares outstanding 286,037
Common stock in treasury, at cost - 208,645 shares (101,819)
Additional paid-in capital 15,158,362
Accumulated deficit (10,955,978)
---------------
Total stockholders' equity 4,387,989
---------------
Total liabilities and stockholders' equity $ 73,466,006
===============
The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
3
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Six Months Ended Three Months Ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
---- ---- ---- ----
PREMIUMS EARNED AND OTHER REVENUES:
Premium income, net $ 3,975,060 $ 2,123,058 $ 2,777,498 $ 1,392,830
Net investment income 326,570 39,819 120,155 24,264
Commission revenue 1,136,394 748,615 585,819 368,587
Transaction fees 160,151 1,188,231 47,417 503,778
Other revenue 91,987 407,741 27,638 145,637
----------- ----------- ----------- -----------
Total revenues 5,690,162 4,507,464 3,558,527 2,435,096
----------- ----------- ----------- -----------
OPERATING COSTS AND EXPENSES
Losses and loss adjustment expenses 445,415 540,464 282,503 344,467
General and administrative expenses 4,225,875 3,800,319 3,258,169 1,952,613
----------- ----------- ----------- -----------
Total operating costs and expenses 4,671,290 4,340,783 3,540,672 2,297,080
----------- ----------- ----------- -----------
NET INCOME $ 1,018,872 $ 166,681 $ 17,855 $ 138,016
=========== =========== =========== ===========
INCOME PER COMMON SHARE:
Basic $ 0.03 $ 0.01 $ 0.00 $ 0.00
=========== =========== =========== ===========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - BASIC 32,808,000 30,214,000 32,720,000 31,129,000
=========== =========== =========== ===========
INCOME PER COMMON SHARE
Diluted $ 0.03 $ 0.01 $ 0.00 $ 0.00
=========== =========== =========== ===========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - DILUTED 33,456,000 30,929,000 33,406,000 31,890,000
=========== =========== =========== ===========
The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
4
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
Six Months Ended Three Months Ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
---------- ---------- ---------- ----------
NET INCOME $1,018,872 $ 166,681 $ 17,855 $ 138,016
OTHER COMPREHENSIVE INCOME:
Change in net unrealized gain on
available-for-sale securities - 26,657 - (3,835)
----------- ----------- ----------- -----------
COMPREHENSIVE INCOME $1,018,872 $ 193,338 $ 17,855 $ 134,181
===============================================================
The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
5
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended Six Months Ended
June 30, 2005 June 30, 2004
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,018,872 $ 166,681
Adjustments to reconcile net income
to cash provided by operations:
Amortization and depreciation 66,126 188,352
Gain on dispoal of assets - (19,325)
Issuance of common stock as compensation 64,500 140,749
Net change in assets and liabilities relating to operating activities:
Prepaid reinsurance premiums and reinsurance recoverables 37,578,035 2,745,055
Premiums and other receivables (2,360,402) (132,660)
Reinsurance payables (8,146,502) 576,740
Accounts payable (1,076,958) (18,459)
Other accrued expenses 895,721 75,069
Unpaid losses and loss adjustment expenses (44,518,594) (1,671,029)
Unearned premiums 10,577,778 774,687
Other assets 162,906 (79,260)
============= =============
Net cash (used in) provided by operating activities (5,738,518) 2,746,600
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net capital expenditures (75,269) 178,378
Proceeds from sale of equity securities available for sale - 194,976
Purchase of real estate (1,367,031) (58,468)
Sale of real estate - 55,243
------------- -------------
Net cash (used in) provided by investing activities (1,442,300) 370,129
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Preferred stock dividend (24,975) (24,978)
Repayments of loans payable (367,182) (257,833)
Proceeds from loans payable 1,041,378 22,752
------------- -------------
Net cash provided by (used in) financing activities 649,221 (260,059)
------------- -------------
NET (DECREASE) INCREASE IN CASH AND CASH (6,531,597) 2,856,670
EQUIVALENTS
CASH AND CASH EQUIVALENTS, Beginning of period 22,443,579 8,011,278
------------- -------------
CASH AND CASH EQUIVALENTS, End of period $ 15,911,982 $ 10,867,948
============= =============
The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
6
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005
(Unaudited)
NOTE 1 -- NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES
The accompanying condensed consolidated financial statements include the
accounts of Universal Insurance Holdings, Inc. ("Company"), its wholly owned
subsidiary, Universal Property & Casualty Insurance Company ("UPCIC") and other
wholly owned entities and the Universal Insurance Holdings, Inc. Stock Grantor
Trust. All intercompany accounts and transactions have been eliminated in
consolidation.
The condensed consolidated balance sheet of the Company as of June 30, 2005, the
related condensed consolidated statements of operations and comprehensive income
for the three and six months ended June 30, 2005 and 2004 and cash flows for the
six months ended June 30, 2005 and 2004 are unaudited. The accounting policies
followed for quarterly financial reporting are the same as those disclosed in
the Notes to Consolidated Financial Statements included in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 2004. The interim
financial statements reflect all adjustments (consisting primarily of normal and
recurring accruals and adjustments) which are, in the opinion of management,
necessary for a fair statement of the results for the interim periods presented.
The Company's operating results for any particular interim period may not be
indicative of results for the full year and thus should be read in conjunction
with the Company's annual statements.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
OFF -BALANCE SHEET ARRANGEMENTS. There were no off-balance sheet arrangements
during the first six months of 2005.
NEW ACCOUNTING PRONOUNCEMENTS. In December 2002, the Financial Accounting
Standards Board ("FASB") issued Statement of Financial Accounting Standards
("SFAS") No. 148, ACCOUNTING FOR STOCK-BASED COMPENSATION - TRANSITION AND
DISCLOSURE. This Statement, which is effective for years ending after December
15, 2002, amends Statement No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION, and
provides alternative methods of transition for a voluntary change to the fair
value-based method of accounting for stock-based employee compensation. In
addition, Statement No. 148 amends the disclosure requirements of Statement No.
123 regardless of the accounting method used to account for stock-based
compensation. The Company has chosen to continue to account for stock-based
compensation of employees using the intrinsic value method prescribed in
Accounting Principles Board Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO
EMPLOYEES, and related interpretations. However, the enhanced disclosure
provisions as defined by SFAS No. 148 which became effective in the first
quarter of 2003 have been implemented. In December 2004, the FASB issued SFAS
No. 123 (revised 2004) ("SFAS No. 123R") SHARE-BASED PAYMENT, which replaces
7
SFAS. No. 123 and supersedes APB No. 25. As a result of SFAS No. 123R, the
Company will be required to recognize the cost of its stock options as an
expense in the consolidated statement of operations beginning in the first
quarter of 2006. The Company is currently assessing the impact that the adoption
of SFAS No. 123R will have on the consolidated results of operations.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES. Management has reassessed the
critical accounting policies as disclosed in our 2004 Annual Report to
Stockholders on Form 10-KSB and determined that no changes, additions or
deletions are needed to the policies as disclosed. Also there were no
significant changes in our estimates associated with those policies.
RISKS AND UNCERTAINTIES. The Company's business could be affected by regulatory
and competitive restrictions on pricing for new and renewal business, the
availability and cost of catastrophic reinsurance, adverse loss experience and
federal and state legislation or governmental regulations of insurance
companies. Changes in these areas could adversely affect the Company's
operations in the future.
Management continues to take action to improve and strengthen UPCIC's financial
condition. Premium rate increases have been implemented. UPCIC changed the
geographic and coverage mix of the property insurance it writes, which is a key
determinant in the amount and pricing of reinsurance procured by UPCIC. The
Company achieved favorable ceding commission terms on its quota share
reinsurance program effective June 1, 2005.
In addition to the actions described above, effective May 1, 2004 the Company
brought in house the system it utilizes for policy issuance and administration.
This has enhanced UPCIC's operating results through its ability to improve and
better control underwriting and loss adjusting activities.
Management believes the implementation of, and results attributable to, the
actions described above will continue to strengthen UPCIC's surplus. However,
there can be no assurance of the ultimate success of these plans, or that the
Company will be able to achieve profitability.
NOTE 2 -- RESULTS OF OPERATIONS
INSURANCE OPERATIONS
UPCIC commenced its insurance activity in February 1998 by assuming policies
from the Florida Residential Property and Casualty Joint Underwriting
Association ("JUA"). UPCIC received the unearned premiums and began servicing
such policies. Since then, UPCIC has been renewing these policies as well as
soliciting business actively in the open market through independent agents.
Unearned premiums represent amounts that UPCIC would refund policyholders if
their policies were canceled. UPCIC determines unearned premiums by calculating
the pro-rata amount that would be due to the policyholder at a given point in
time based upon the premiums owed over the life of each policy. At June 30,
2005, the Company had unearned premiums totaling $34,467,639.
8
Premiums earned are included in earnings evenly over the terms of the policies.
UPCIC does not have policies that provide for retroactive premium adjustments.
Policy acquisition costs, consisting of commissions and other costs that vary
with and are directly related to the production of business, net of ceding
commissions, are deferred and amortized over the terms of the policies, but only
to the extent that unearned premiums are sufficient to cover all related costs
and expenses. At June 30, 2005, deferred policy acquisition costs amounted to $0
due to the effect of deferred reinsurance commissions.
An allowance for uncollectible premiums receivable is established when it
becomes evident collection is doubtful, typically after 90 days past due. No
allowance is deemed necessary at June 30, 2005.
Loss and loss adjustment expenses ("LAE"), less related reinsurance, are
provided for as claims are incurred. The provision for unpaid loss and loss
adjustment expenses includes: (1) the accumulation of individual case estimates
for loss and LAE reported prior to the close of the accounting period; (2)
estimates for unreported claims based on past experience modified for current
trends; and (3) estimates of expenses for investigating and adjusting claims
based on past experience. The Company's net loss ratio has decreased from the
prior year due to lower frequency and severity of claims. In addition, during
the third quarter of 2004, Florida experienced four windstorm catastrophes
(Hurricanes Charley, Frances, Ivan and Jeanne) which resulted in losses. As a
result of these storms, the Company estimated it incurred approximately
$148,500,000 in losses prior to reinsurance and $1,600,000 net of reinsurance
for the year ended December 31, 2004.
Liabilities for unpaid claims and claims adjustment expenses are based on
estimates of ultimate cost of settlement. Changes in claims estimates resulting
from the continuous review process and differences between estimates and
ultimate payments are reflected in expense for the period in which the revision
of these estimates first becomes known. UPCIC estimates claims and claims
expenses based on its historical experience and payment and reporting patterns
for the type of risk involved. These estimates are continuously reviewed by
UPCIC's management professionals and any resulting adjustments are reflected in
operations for the period in which they are determined.
Inherent in the estimates of ultimate claims are expected trends in claims
severity, frequency and other factors that may vary as claims are settled. The
amount of uncertainty in the estimates for casualty coverage is significantly
affected by such factors as the amount of historical claims experience relative
to the development period, knowledge of the actual facts and circumstances, and
the amount of insurance risk retained.
ONLINE COMMERCE OPERATIONS
The Company has formed subsidiaries that specialize, or will specialize, in
selling insurance and generating insurance leads via the Internet.
Tigerquote.com Insurance & Financial Services Group, Inc. ("Tigerquote.com") and
Tigerquote.com Insurance Solutions, Inc. were incorporated in Delaware on June
6, 1999 and August 23, 1999, respectively. Tigerquote.com is an Internet
insurance lead generating network while Tigerquote.com Insurance Solutions, Inc.
9
is a network of Internet insurance agencies. These entities seek to generate
income from the selling of leads and commissions on policies written.
CORPORATE AND OTHER OPERATIONS
Operating segments that are not individually reportable based on the current
operations in such segments, are included in Corporate and Other. The segment
currently includes the operations of Universal Insurance Holdings, Inc., Tiger
Home Services, Inc. and other entities. During 2001, the Company formed Tiger
Home Services, Inc., which furnishes pool services to homeowners. The services
are offered to commercial and residential customers in certain areas in the
state of Florida. During the third quarter of 2004, the Company sold the
landscaping division. During the second quarter of 2005, the Company sold the
pool division.
NOTE 3 -- REINSURANCE
UPCIC's in-force policyholder coverage for windstorm exposures as of June 30,
2005 was approximately $8.7 billion. In the normal course of business, UPCIC
seeks to reduce the loss that may arise from catastrophes or other events that
cause unfavorable underwriting results by reinsuring certain levels of risk in
various areas of exposure with other insurance enterprises or reinsurers.
Amounts recoverable from reinsurers are estimated in a manner consistent with
the reinsurance contracts. Reinsurance premiums, losses and loss adjustment
expenses are accounted for on bases consistent with those used in accounting for
the original policies issued and the terms of the reinsurance contracts.
Reinsurance ceding commissions received are deferred and amortized over the
effective period of the related insurance policies.
UPCIC limits the maximum net loss that can arise from large risks or risks in
concentrated areas of exposure by reinsuring (ceding) certain levels of risks
with other insurers or reinsurers, either on an automatic basis under general
reinsurance contracts known as "treaties" or by negotiation on substantial
individual risks. The reinsurance arrangements are intended to provide UPCIC
with the ability to maintain its exposure to loss within its capital resources.
Such reinsurance includes quota share, excess of loss and catastrophe forms of
reinsurance.
Effective June 1, 2005, UPCIC entered into a quota share reinsurance treaty and
excess per risk agreements with various reinsurers. Under the quota share
treaty, UPCIC cedes 55% of its gross written premiums, losses and loss
adjustment expenses for policies with coverage for wind risk with a ceding
commission equal to 31% of ceded gross written premium. In addition, the quota
share treaty has a limitation for any one occurrence of $3,000,000. Effective
June 1, 2005, UPCIC entered into a multiple line excess per risk agreement with
various reinsurers. Under the multiple line excess per risk agreement, UPCIC
obtained coverage of $1,300,000 in excess of $500,000 ultimate net loss for each
risk and each property loss, and $1,000,000 in excess of $300,000 for each
casualty loss. A $5,200,000 aggregate limit applies to the term of the contract.
Effective June 1, 2005, UPCIC entered into a property per risk excess agreement
covering ex-wind only policies. Under the property per risk excess agreement,
UPCIC obtained coverage of $300,000 in excess of $200,000 each property loss. A
$2,100,000 aggregate limit applies to the term of the contract.
10
Effective June 1, 2005, under an excess catastrophe contract, UPCIC obtained
catastrophe coverage of $46,000,000 in excess of $3,000,000 covering certain
loss occurrences including hurricanes. The contract contains one reinstatement.
UPCIC also obtained coverage from the Florida Hurricane Catastrophe Fund. The
approximate coverage is estimated to be for $86,700,000 in excess of
$25,700,000.
The ceded reinsurance arrangements had the following effect on certain items in
the accompanying consolidated financial statements:
Six Months Ended Six Months Ended
June 30, 2005 June 30, 2004
-------------------------------------- -----------------------------------------------------------
Loss and Loss Loss and Loss
Premiums Premiums Adjustment Premiums Premiums Adjustment
Written Earned Expenses Written Earned Espenses
------- ------ -------- ------- ------ --------
Direct $34,474,916 $23,955,222 $12,763,557 $16,067,173 $15,292,485 $3,057,306
Ceded (20,882,915) (19,980,162) (12,318,143) (12,355,714) (13,169,427) (2,516,842)
------------------ ---------------- --------------- --------------- ------------------ -----------------
Net $13,592,001 $3,975,060 $445,415 $3,711,459 $2,123,058 $540,464
================== ================ =============== =============== ================== =================
Three Months Ended Three Months Ended
June 30, 2005 June 30, 2004
-------------------------------------- -----------------------------------------------------------
Loss and Loss Loss and Loss
Premiums Premiums Adjustment Premiums Premiums Adjustment
Written Earned Expenses Written Earned Espenses
------- ------ -------- ------- ------ --------
Direct $20,693,417 $13,700,426 $12,071,291 $9,101,968 $7,718,138 $1,843,527
Ceded (9,603,456) (10,922,928) (11,788,789) (6,032,199) (6,325,308) (1,499,060)
------------------ ---------------- --------------- --------------- ------------------ -----------------
Net $11,089,961 $2,777,498 $282,502 $3,069,769 $1,392,830 $344,467
================== ================ =============== =============== ================== =================
OTHER AMOUNTS:
June 30, 2005
-------------
Reinsurance recoverable on paid and unpaid losses and
loss adjustment expenses $ 18,927,803
Unearned premiums ceded 21,330,264
Other reinsurance receivable 9,637,281
-----------
Reinsurance recoverable $ 49,895,348
UPCIC's reinsurance contracts do not relieve UPCIC from its obligations to
policyholders. Failure of reinsurers to honor their obligations could result in
losses to UPCIC; consequently, allowances are established for amounts deemed
uncollectible. No allowance is deemed necessary at June 30, 2005. UPCIC
evaluates the financial condition of its reinsurers and monitors concentrations
of credit risk arising from similar geographic regions, activities, or economic
characteristics of the reinsurers to minimize its exposure to significant losses
from reinsurer insolvencies. UPCIC currently has reinsurance contracts with
various reinsurers located throughout the United States and internationally.
UPCIC believes only ceding risks to reinsurers whom it considers to be
financially sound combined with distribution of reinsurance contracts adequately
11
minimizes UPCIC's risk from any potential operating difficulties of its
reinsurers. In addition, UPCIC does not have any unauthorized reinsurers which
have recoverable balances that are not secured by a letter of credit or that
have ceded balances payable that are greater than the amount of the recoverable.
NOTE 4 -- EARNINGS PER SHARE
Earnings per share ("EPS") amounts are calculated in accordance with SFAS No.
128, EARNINGS PER SHARE. Basic EPS is based on the weighted average number of
shares outstanding for the period, excluding any dilutive common share
equivalents. Diluted EPS reflects the potential dilution that could occur if
securities to issue common stock were exercised.
A reconciliation of shares used in calculating basic and diluted EPS for the six
month periods ended June 30, 2005 and June 30, 2004, respectively, follows:
Six Months Ended
June 30, 2005 June 30, 2004
------------- --------------
Basic EPS 32,808,000 30,214,000
Effect of assumed conversion of common stock 648,000 715,000
equivalents ------------- --------------
Diluted EPS 33,456,000 30,929,000
Options and warrants to purchase approximately 11,148,000 and 10,280,000 shares
of common stock were outstanding during the six months ended June 30, 2005 and
June 30, 2004, respectively. Such options and warrants could potentially dilute
basic EPS in the future but were excluded from the computation of diluted
earnings per share due to being anti-dilutive.
Three Months Ended
June 30, 2005 June 30, 2004
------------- -------------
Basic EPS 32,720,000 31,129,000
Effect of assumed conversion of common stock 686,000 761,000
equivalents ------------- -------------
Diluted EPS 33,406,000 31,890,000
Options and warrants to purchase approximately 11,111,000 and 10,233,000 shares
of common stock were outstanding during the three months ended June 30, 2005 and
June 30, 2004, respectively. Such options and warrants could potentially dilute
basic EPS in the future but were excluded from the computation of diluted
earnings per share due to being anti-dilutive.
NOTE 5 -- STOCK BASED COMPENSATION
Pursuant to SFAS No. 123, the Company elected to account for stock-based
compensation plans under Accounting Principles Board Opinion No. 25, Accounting
for Stock Issued to Employees. Accordingly, no compensation expense was included
in the determination of net income for the six months ended June 30, 2005 and
June 30, 2004. Had compensation cost for stock options been recognized based on
the fair value at the grant dates for the options, consistent with the
12
provisions of SFAS No. 123, net income and earnings per share would have been as
indicated in the table below.
Six Months Ended
June 30, 2005 June 30, 2004
Net income:
As reported $ 1,018,872 $ 166,681
Compensation expense (19,938) (50,977)
------------- -------------
Pro forma 998,934 115,704
Net income per share:
Basic
As reported $ 0.03 $ 0.01
Compensation expense 0.00 0.00
------------- -------------
Pro forma $ 0.03 $ 0.01
Diluted
As reported $ 0.03 $ 0.01
Compensation expense 0.00 0.00
------------- -------------
Pro forma $ 0.03 $ 0.01
Three Months Ended
June 30, 2005 June 30, 2004
Net income:
As reported $ 17,855 $ 138,016
Compensation expense (6,418) (26,090)
------------- -------------
Pro forma 11,437 111,926
Net income per share:
Basic
As reported $ 0.00 $ 0.00
Compensation expense 0.00 0.00
------------- -------------
Pro forma $ 0.00 $ 0.00
Diluted
As reported $ 0.00 $ 0.00
Compensation expense 0.00 0.00
------------- -------------
Pro forma $ 0.00 $ 0.00
For the purposes of estimating the compensation cost of the Company's option
grants in accordance with SFAS No. 123, the fair value of each option grant is
estimated on the date of grant using the Black-Scholes option-pricing model.
There were no option grants during the six months ended June 30, 2005.
13
NOTE 6 -- SEGMENT INFORMATION
The Company and its subsidiaries operate principally in two business segments
consisting of insurance and online commerce. The insurance segment consists
primarily of underwriting through UPCIC, managing general agent operations
through Universal Risk Advisors, Inc., claims processing through Universal
Adjusting Corporation, property inspections through Universal Inspection
Corporation and marketing and distribution through Coastal Homeowners Insurance
Specialists, Inc. and Universal Florida Insurance Agency, Inc. The insurance
segment sells homeowner's insurance and includes substantially all aspects of
the insurance, distribution and claims process. The online commerce segment
consists of Internet insurance leads generation through Tigerquote.com and
commissions on policies placed by Tigerquote.com Insurance Solutions, Inc.
The accounting policies of the segments are the same as those described in the
summary of the significant accounting policies and practices. The Company
evaluates its business segments based on GAAP pretax operating earnings.
Corporate overhead expenses are allocated to business segments. Transactions
between reportable segments are accounted for at fair value.
Operating segments that are not individually reportable, based on the extent of
the current operations in such segments, are included in the "All Other"
category. The "All Other" category currently includes the operations of
Universal Insurance Holdings, Inc., Tiger Home Services, Inc. and other
entities.
Information regarding components of operations for the three months and six
months ended June 30, 2005 and 2004 follows:
Six months ended June 30,
2005 2004
---- ----
Total revenue
Insurance segment $13,527,351 $5,120,998
Online commerce segment 161,014 1,245,886
Corporate and other 52,375 199,899
--------------- ------------
Total operating segments 13,740,740 6,566,783
Intercompany eliminations (8,050,578) (2,059,319)
--------------- ------------
Total revenues $5,690,162 $4,507,464
============== =============
Earnings (loss) before income taxes
Insurance segment $1,849,962 $954,910
Online commerce segment (94,361) 76,204
Corporate and other (736,729) (864,433)
--------------- ------------
Total earnings before income taxes $1,018,872 $166,681
=============== ============
14
Three months ended June 30,
2005 2004
---- ----
Total revenue
Insurance segment $ 7,738,768 $ 3,040,975
Online commerce segment 47,595 524,047
Corporate and other 19,126 92,903
------------- ------------
Total operating segments 7,805,489 3,657,925
Intercompany eliminations (4,246,962) (1,222,829)
------------- ------------
Total revenues $ 3,558,527 $ 2,435,096
============= ============
Earnings (loss) before income taxes
Insurance segment $ 368,801 $ 722,396
Online commerce segment (51,052) (191,231)
Corporate and other (299,894) (393,149)
------------- ------------
Total earnings before income taxes $ 17,855 $ 138,016
============= ============
Information regarding total assets as of June 30, 2005 and June 30, 2004:
June 30, 2005 June 30, 2004
------------- ------------
Total assets
Insurance segment $ 87,266,271 $ 43,655,525
Online commerce segment 1,846,045 1,623,968
Corporate and other 27,701,350 22,289,715
------------- ------------
Total operating segments $ 116,813,666 $ 67,569,208
Intercompany eliminations (43,347,660) (32,523,677)
------------- ------------
Total assets $ 73,466,006 $ 35,045,531
============= ============
NOTE 7 -- RELATED PARTY TRANSACTIONS
Dennis Downes and Associates, a multi-line insurance adjustment corporation
based in Deerfield Beach, Florida performs certain claims adjusting work for
UPCIC. Dennis Downes and Associates is owned by Dennis Downes, who is the father
of Sean P. Downes, COO of UPCIC. During the six months ended June 30, 2005 and
2004, the Company paid claims adjusting fees of $375,343 and $60,706
respectively, to Dennis Downes and Associates.
Item 2. Management's Discussion and Analysis or Plan of Operation
------- ---------------------------------------------------------
The following discussion and analysis by management of the Company's
consolidated financial condition and results of operations should be read in
conjunction with the Company's Condensed Consolidated Financial Statements and
Notes thereto.
15
FORWARD-LOOKING STATEMENTS
Certain statements made by the Company's management may be considered to be
"forward-looking statements" within the meaning of the Private Securities Reform
Litigation Act of 1995. Forward-looking statements are based on various factors
and assumptions that include known and unknown risks and uncertainties. The
words "believe," "expect," "anticipate," and "project," and similar expressions,
identify forward-looking statements, which speak only as of the date the
statement was made. Such statements may include, but not be limited to,
projections of revenues, income or loss, expenses, plans, as well as 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 in forward-looking
statements as a result of the risks set forth in the following discussion, among
others.
OVERVIEW
The Company is a vertically integrated insurance holding company. The
Company, through its subsidiaries, is currently engaged in insurance
underwriting, distribution and claims. UPCIC generates revenue from the
collection and investment of premiums. The Company's agency operations, which
include Universal Florida Insurance Agency and Coastal Homeowners Insurance
Specialists, Inc., generate income from commissions. Universal Risk Advisors,
Inc., the Company's managing general agent, generates revenue through policy fee
income and other administrative fees from the marketing of UPCIC's and
third-party insurance products through the Company's distribution network and
UPCIC. Universal Risk Life Advisors, Inc. was formed to be the Company's
managing general agent for life insurance products. In addition, the Company has
formed an independent claims adjusting company, Universal Adjusting Corporation,
which adjusts UPCIC claims in certain geographic areas, and an inspection
company, Universal Inspection Corporation, which performs property inspections
for homeowners' policies underwritten by UPCIC.
The Company has formed subsidiaries that specialize, or will specialize, in
selling insurance and generating insurance leads via the Internet.
Tigerquote.com Insurance & Financial Services Group, Inc. is an Internet
insurance lead generating network, and Tigerquote.com Insurance Solutions, Inc.,
is a network of Internet insurance agencies. At June 30, 2005, agencies have
been established in 21 states, none of which are currently active. Separate
legal entities have been formed for each state and are governed by the
respective states' departments of insurance.
The Company has also formed Tiger Home Services, Inc., which furnishes pool
services to homeowners. The services are currently offered to residential
customers in certain areas in the state of Florida. During the third quarter of
2004, the Company sold the landscaping division. During the second quarter of
2005, the Company sold the pool division.
16
FINANCIAL CONDITION
Cash and cash equivalents at June 30, 2005 aggregated $15,911,982. The
source of liquidity for possible claims payments consists of net premiums after
deductions for expenses, reinsurance recoverables and short-term loans.
UPCIC believes that premiums will be sufficient to meet UPCIC's working
capital requirements for at least the next twelve months. The Company's policy
is to invest amounts considered to be in excess of current working capital
requirements. At June 30, 2005, the Company's investments were comprised of
$15,911,982 in cash and repurchase agreements and $3,047,032 in real estate
consisting of a building purchased by UPCIC that the Company is currently using
as its home office.
Policies originally obtained from the Florida Residential Property and
Casualty Joint Underwriting Association ("JUA") provided the opportunity for
UPCIC to solicit future renewal premiums. Less than 20% of the policies obtained
from the JUA are currently renewed with the Company. UPCIC does not expect to
participate in takeouts of additional policies from the JUA. In 1998 the Company
began to solicit business actively in the open market in an effort to further
grow its insurance operations. Through renewal of JUA business combined with
business solicited in the market through independent agents, UPCIC is currently
servicing approximately 68,000 homeowners and dwelling fire insurance policies.
The Company, as noted above, diversified its operations by establishing
online commerce and other ancillary operations. However, the Company is
currently contemplating the sale of the online commerce division in order to
further focus on the core property and casualty insurance business.
RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 2005 VERSUS SIX MONTHS ENDED
JUNE 30, 2004
Gross premiums written increased 114.6% to $34,474,916 for the six-month
period ended June 30, 2005 from $16,067,173 for the six-month period ended June
30, 2004. The increase in gross premiums written is primarily attributable to an
approximate 106.8% increase in new business as well as an overall 7.8 % premium
rate increase. The increase in new business is partially attributable to the
recent windstorm catastrophes providing an opportunity in the otherwise
competitive marketplace as certain companies are not accepting new business.
Net premiums earned increased 87.2% to $3,975,060 for the six-month period
ended June 30, 2005 from $2,123,058 for the six-month period ended June 30,
2004. The increase is due to an increase in new business, premium rate increases
and changes in the reinsurance program effective June 1, 2005.
Investment income increased 720.1% to $326,570 for the six-month period
ended June 30, 2005 from $39,819 for the six-month period ended June 30, 2004.
The increase is primarily due to higher investment balances that resulted from
advances from reinsurers and a higher interest rate environment during the six
months ended June 30, 2005.
17
Transaction fee revenue decreased 86.5% to $160,151 for the six-month
period ended June 30, 2005 from $1,188,231 for the six-month period ended June
30, 2004. The decrease is primarily due to decreased sales of on-line insurance
leads to insurance agents.
Other revenue decreased 77.4% to $91,987 for the six-month period ended
June 30, 2005 from $407,741 for the six-month period ended June 30, 2004. The
decrease is primarily attributable to less activity in the direct sales and
service operations during the six-month ended June 30, 2005.
Commission income increased 51.8% to $1,136,394 for the six-month period
ended June 30, 2005 from $748,615 for the six-month period ended June 30, 2004.
Commission income is comprised principally of the managing general agent's
policy fee income on all new and renewal insurance policies and commissions
generated from agency operations. The increase is primarily attributable to an
increase in commissions generated from agency operations on new policies.
Net losses and loss adjustment expense ("LAE") incurred decreased 17.6% to
$445,415 for the six-month period ended June 30, 2005 from $540,464 for the
six-month period ended June 30, 2004. Losses and LAE incurred decreased due to
lower frequency and severity of claims in 2005. The Company's net loss ratio for
the six-month period ended June 30, 2005 was 11.2% compared to 25.50% for the
six-month period ended June 30, 2004. Losses and LAE are influenced by loss
severity and frequency. The Company's net loss ratio decreased principally due
to the lower frequency and severity of claims in the six-month period ended June
30, 2005. Losses and LAE, the Company's most significant expenses, represent
actual payments made net of reinsurance and changes in estimated future net
payments to be made to or on behalf of its policyholders, including expenses
required to settle claims and losses.
Catastrophes are an inherent risk of the property-liability insurance
business which may contribute to material year-to-year fluctuations in UPCIC's
and the Company's results of operations and financial position. During the third
quarter of 2004, Florida experienced four windstorm catastrophes (Hurricanes
Charley, Frances, Ivan and Jeanne) which resulted in losses. As a result of
these storms, the Company estimated for the year ended December 31, 2004 it
incurred approximately $148,500,000 in losses prior to reinsurance and
$1,600,000 net of reinsurance. UPCIC currently reports only 191 open claims out
of nearly 10,000 reported from the four hurricanes. The level of catastrophe
loss experienced in any year cannot be predicted and could be material to the
results of operations and financial position. While management believes UPCIC's
and the Company's catastrophe management strategies will reduce the severity of
future losses, UPCIC and the Company continue to be exposed to catastrophic
losses.
General and administrative expenses increased 11.2% to $4,225,875 for the
six-month period ended June 30, 2005 from $3,800,319 for the six-month period
ended June 30, 2004. General and administrative expenses increased primarily due
to lower ceding commissions on premiums ceded to reinsurers. This is primarily a
result of a decrease in the dollar amount of ceded premiums written to quota
share reinsurers related to the increase in direct premiums written.
18
RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 2005 VERSUS THREE MONTHS
ENDED JUNE 30, 2004
Gross premiums written increased 127.4% to $20,693,417 for the three-month
period ended June 30, 2005 from $9,101,968 for the three-month period ended June
30, 2004. The increase in gross premiums written is primarily attributable to an
approximate 119.6% increase in new business as well as an overall 7.8 % premium
rate increase. The increase in new business is partially attributable to the
recent windstorm catastrophes providing an opportunity in the otherwise
competitive marketplace as certain companies are not accepting new business.
Net premiums earned increased 99.4% to $2,777,498 for the three-month
period ended June 30, 2005 from $1,392,830 for the three-month period ended June
30, 2004. The increase is due to an increase in new business, premium rate
increases and changes in the reinsurance program effective June 1, 2005.
Investment income increased 395.2% to $120,155 for the three-month period
ended June 30, 2005 from $24,264 for the three-month period ended June 30, 2004.
The increase is primarily due to higher investment balances that resulted from
advances from reinsurers and a higher interest rate environment during the three
months ended June 30, 2005.
Transaction fee revenue decreased 90.6% to $47,417 for the three-month
period ended June 30, 2005 from $503,778 for the three-month period ended June
30, 2004. The decrease is primarily due to decreased sales of on-line insurance
leads to insurance agents.
Other revenue decreased 81.0% to $27,638 for the three-month period ended
June 30, 2005 from $145,637 for the three-month period ended June 30, 2004. The
decrease is primarily attributable to less activity in the direct sales and
service operations during the three months ended June 30, 2005.
Commission income increased 58.9% to $585,819 for the three-month period
ended June 30, 2005 from $368,587 for the three-month period ended June 30,
2004. Commission income is comprised principally of the managing general agent's
policy fee income on all new and renewal insurance policies and commissions
generated from agency operations. The increase is primarily attributable to an
increase in commissions generated from agency operations on new policies.
Net losses and loss adjustment expense ("LAE") incurred decreased 18.0% to
$282,503 for the three-month period ended June 30, 2005 from $344,467 for the
three-month period ended June 30, 2004. Losses and LAE incurred decreased due to
lower frequency and severity of claims in 2005. The Company's net loss ratio for
the three-month period ended June 30, 2005 was 10.2% compared to 24.7% for the
three-month period ended June 30, 2004. Losses and LAE are influenced by loss
severity and frequency. The Company's net loss ratio decreased principally due
to the lower frequency and severity of claims in the three months ended June 30,
2005. Losses and LAE, the Company's most significant expenses, represent actual
payments made net of reinsurance and changes in estimated future net payments to
be made to or on behalf of its policyholders, including expenses required to
settle claims and losses.
Catastrophes are an inherent risk of the property-liability insurance
business which may contribute to material year-to-year fluctuations in UPCIC's
and the Company's results of operations and financial position. During the third
19
quarter of 2004, Florida experienced four windstorm catastrophes (Hurricanes
Charley, Frances, Ivan and Jeanne) which resulted in losses. As a result of
these storms, the Company estimated for the year ended December 31, 2004 it
incurred approximately $148,500,000 in losses prior to reinsurance and
$1,600,000 net of reinsurance. UPCIC currently reports only 191 open claims out
of nearly 10,000 reported from the four hurricanes. The level of catastrophe
loss experienced in any year cannot be predicted and could be material to the
results of operations and financial position. While management believes UPCIC's
and the Company's catastrophe management strategies will reduce the severity of
future losses, UPCIC and the Company continue to be exposed to catastrophic
losses.
General and administrative expenses increased 66.9% to $3,258,169 for the
three-month period ended June 30, 2005 from $1,952,613 for the three-month
period ended June 30, 2004. General and administrative expenses increased
primarily due to lower ceding commissions on premiums ceded to reinsurers. This
is primarily a result of a decrease in the dollar amount of ceded premiums
written to quota share reinsurers related to the increase in direct premiums
written.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of cash flow are premium revenues,
commissions, policy fees, investment income and reinsurance recoverables and
short-term loans.
For the six-month period ended June 30, 2005, cash flows used by operating
activities were $5,738,518. Cash flows were negative in the six-month period
ended June 30, 2005 primarily due to cash received in the fourth quarter of 2004
from reinsurers in advance of catastrophe claim payments to policyholders
resulting from Hurricanes Charley, Frances, Ivan and Jeanne that hit Florida in
the third quarter of 2004 which were settled in six-month period ended June 30,
2005. Cash flows from operating activities are expected to be positive in both
the short-term and reasonably foreseeable future. In addition, the Company's
investment portfolio is highly liquid as it consists almost entirely of cash and
readily marketable securities.
In July 2004, the Company borrowed monies from three private investors in
the amounts of $175,000, $150,000 and $100,000 for working capital. The terms of
the notes evidencing such loans require interest payments at a rate of 10%
through January 2005 with equal monthly payments of principal plus interest
thereafter until January 2006, the maturity date of the notes. In conjunction
with the loans, the Company issued to the private investors warrants to purchase
175,000, 150,000 and 100,000 shares of restricted Common Stock each at an
exercise price of $.05 per share, and each expiring in July 2009. In June 2005,
the Company borrowed monies from two private investors and issued two promissory
notes for the aggregate principal sum of $1,000,000 payable in five monthly
installments of $200,000 commencing June 30, 2006. The loan amount subsequently
was contributed to UPCIC as additional paid-in-capital. In conjunction with the
notes, the Company issued warrants to one of the investors to purchase 200,000
shares of restricted Common Stock at an exercise price of $.05 per share,
expiring in June 2010.
In order to improve the Company's financial position and achieve profitable
operations, management has implemented rate increases for new and renewal
business, has restructured the homeowners' coverage offered, has restructured
its catastrophic reinsurance coverage to reduce cost, and has worked to control
20
future general and administrative expenses. In addition, management is exploring
sources of additional capital.
Management believes that the continued implementation of these plans will
be successful over the next twelve months. However, there can be no assurance
that successful implementation of these plans will be achieved or will be
sufficient to ensure UPCIC's future compliance with Florida insurance
regulations, or that the Company will be able to maintain profitability. Failure
by UPCIC to maintain the required level of statutory capital and surplus could
result in the suspension of UPCIC's authority to write new or renewal business,
other regulatory actions or ultimately, in the revocation of UPCIC's certificate
of authority by the Florida Office of Insurance Regulation ("OIR").
The Company believes that its current capital resources together with
management's plan as described above will be sufficient to support current
operations and expected growth for at least 12 months.
The property and casualty reinsurance industry is subject to the same
market conditions as the direct property and casualty insurance market, and
there can be no assurance that reinsurance will be available to UPCIC to the
same extent and at the same cost as currently in place for UPCIC. Future
increases in catastrophe reinsurance costs are possible and could adversely
effect UPCIC's results.
The balance of cash and cash equivalents at June 30, 2005 is $15,911,982.
Most of this amount is available to pay claims in the event of catastrophic
events pending reimbursement for any aggregate amount in excess of $1,350,000
per event up to approximately the 100 year probable maximum loss which would be
covered by reinsurers. Catastrophic reinsurance is recoverable upon presentation
to the reinsurer of evidence of claim payment.
Generally accepted accounting principles differ in some respects from
reporting practices prescribed or permitted by the OIR. To retain its
certificate of authority, the Florida insurance laws and regulations require
that UPCIC maintain capital and surplus equal to the statutory minimum capital
and surplus requirement defined in the Florida Insurance Code. UPCIC's statutory
capital and surplus exceeded the minimum capital and surplus requirements of
$4,000,000 as of June 30, 2005. UPCIC is also required to adhere to prescribed
premium-to-capital surplus ratios.
The maximum amount of dividends which can be paid by Florida insurance
companies without prior approval of the OIR Commissioner is subject to
restrictions relating to statutory surplus. The maximum dividend that may be
paid by UPCIC without prior approval is limited to the lesser of statutory net
income from operations of the preceding calendar year or 10.0% of statutory
unassigned surplus as of the preceding year end. Statutory unassigned surplus
(deficit) at December 31, 2004 was $(4,787,758).
The Company is required to comply with the National Association of
Insurance Commissioner's ("NAIC") Risk-Based Capital ("RBC") requirements. RBC
requirements prescribe a method of measuring the amount of capital appropriate
for an insurance company to support its overall business operations in light of
its size and risk profile. NAIC's RBC requirements are used by regulators to
21
determine appropriate regulatory actions relating to insurers who show signs of
weak or deteriorating condition. As of December 31, 2004, based on calculations
using the appropriate NAIC RBC formula, the Company's reported total adjusted
capital was in excess of the requirements.
OFF-BALANCE SHEET ARRANGEMENTS
There were no off-balance sheet arrangements during the first six months of
2005.
Item 3. Controls and Procedures
------- -----------------------
The Company carried out an evaluation under the supervision and with the
participation of the Company's management, including the Company's Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the
design and operation of the Company's disclosure controls and procedures
pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 as of the
period covered by this report. Based on that evaluation, the Company's Chief
Executive Officer and Chief Financial Officer have concluded that disclosure
controls and procedures were effective as of the end of the period covered by
this report to ensure that information required to be disclosed by the Company
in its reports that it files or submits under the Securities Exchange Act of
1934 is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commissions rules and forms. There was
no change in the Company's internal controls over financial reporting that
occurred during the period covered by this report that has materially affected,
or is reasonably likely to materially affect, the Company's internal control
over financial reporting.
22
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
------- -----------------
The Company did not have any reportable legal proceedings during the six
months ending June 30, 2005. Certain claims and complaints have been filed or
are pending against the Company with respect to various matters. In the opinion
of management, none of these lawsuits is material, and they are adequately
provided for or covered by insurance or, if not so covered, are without any or
have little merit or involve such amounts that if disposed of unfavorably would
not have a material adverse effect on the Company.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
------- -----------------------------------------------------------
Under an amendment to the employment agreement between the Company and
Bradley I. Meier dated June 27, 2002, and approved by the Board of Directors,
Mr. Meier elected to convert salary into 860,000 shares of restricted Common
Stock. The shares of restricted Common Stock were issued to Mr. Meier in May
2005 in a private transaction pursuant to Section 4(2) of the Securities Act of
1933, as amended. Also in May 2005, the Company issued 600,000 shares of
restricted Common Stock to Sean P. Downes, COO of UPCIC, pursuant to Mr. Downes
election to receive such shares in lieu of salary. The shares were issued to Mr.
Downes in a private transaction pursuant to Section 4(2) of the Securities Act
of 1933, as amended.
In July 2004, the Company borrowed monies from three private investors in
the amounts of $175,000, $150,000 and $100,000 for working capital. The terms of
the notes evidencing such loans require interest payments at a rate of 10%
through January 2005 with equal monthly payments of principal plus interest
thereafter until January 2006, the maturity date of the notes. In conjunction
with the loans, the Company issued to the private investors warrants to purchase
175,000, 150,000 and 100,000 shares of restricted Common Stock each at an
exercise price of $.05 per share, and each expiring in July 2009. In June 2005,
the Company borrowed monies from two private investors and issued two promissory
notes for the aggregate principal sum of $1,000,000 payable in five monthly
installments of $200,000 commencing June 30, 2006. The loan amount subsequently
was contributed to UPCIC as additional paid-in-capital. In conjunction with the
notes, the Company issued warrants to one of the investors to purchase 200,000
shares of restricted Common Stock at an exercise price of $.05 per share,
expiring in June 2010.
Item 3. Defaults upon Senior Securities
------- -------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
------ ---------------------------------------------------
None.
Item 5. Other Information
------- -----------------
None.
23
Item 6. Exhibits
------- --------
Exhibit No. Exhibit
----------- -------
11.1 Statement Regarding Computation of Per Share Income
31.1 Certification of Chief Executive Officer Pursuant to Rule
13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
31.2 Certification of Chief Financial Officer Pursuant to Rule
13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
32 Certification of Chief Executive Officer and Chief
Financial Officer Pursuant to Title 18, United States
Code, Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
24
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
UNIVERSAL INSURANCE HOLDINGS, INC.
Date: August 15, 2005 /s/ Bradley I. Meier
-----------------------------------------
Bradley I. Meier, Chief Executive Officer
/s/ James M. Lynch
-----------------------------------------
James M. Lynch, Chief Financial Officer
25