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 March 31, 2006
OR
[ ] 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: 37,321,296 shares of common
stock as of May 15, 2006.
Transitional Small Business Disclosure Format Yes __ No X_
UNIVERSAL INSURANCE HOLDINGS, INC.
----------------------------------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
------- --------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To The Board of Directors and Stockholders of
Universal Insurance Holdings, Inc. and Subsidiaries
Fort Lauderdale, Florida
We have reviewed the accompanying condensed consolidated balance sheet of
Universal Insurance Holdings, Inc. and Subsidiaries as of March 31, 2006 and the
related condensed consolidated statements of income and cash flows for each of
the three-month periods ended March 31, 2006 and 2005. These interim financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with the standards of the Public Company
Accounting Oversight Board (United States). A review of interim financial
information consists principally of applying analytical procedures and making
inquiries of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with the
standards of the Public Company Accounting Oversight Board, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated interim financial statements
for them to be in conformity with accounting principles generally accepted in
the United States of America.
/s/ Blackman Kallick Bartelstein, LLP
Chicago, Illinois
May 12, 2006
2
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 three months ended March 31, 2006 are not necessarily
indicative of the results for the year ending December 31, 2006.
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 2006
(Unaudited)
ASSETS
ASSETS
Cash and cash equivalents $ 50,004,298
Reinsurance recoverables 100,372,490
Premiums and other receivables 6,667,269
Real estate 3,169,021
Property and equipment, net 809,171
Deferred income tax 408,422
Other assets 885,473
-------------------
Total assets $ 162,316,144
===================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Unpaid losses and loss adjustment expenses $ 31,825,292
Unearned Premiums 62,850,348
Deffered ceding commission 1,597,147
Advanced premiums 2,519,622
Accounts payable 648,017
Reinsurance payable 39,999,497
Income taxes payable 1,930,232
Dividends payable 1,488,851
Other accrued expenses 6,597,759
Loans payable 1,109,327
-------------------
Total liabilities 150,566,092
===================
STOCKHOLDERS' EQUITY:
Cumulative convertible preferred stock, $0.1 par value, 1,000,000 shares 1,387
authorized, 138,640 shares issued and outstanding, minimum liquidation
preference of $1,419,700
Common stock, $.01 par value, 50,000,000 shares authorized, 36,788,219 293,288
shares issued and 33,679,574 shares outstanding
Common stock in treasury, at cost - 208,645 shares (101,820)
Minority interest 35,000
Additional paid-in capital 15,204,170
Accumulated deficit (3,681,973)
-------------------
Total stockholders' equity 11,750,052
-------------------
Total liabilities and stockholders' equity $ 162,316,144
===================
The accompanying notes to condensed consolidated financial statements and accountant's review
report are an integral part of these statements.
3
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Three Months Ended
March 31, 2006 March 31, 2005
-------------- --------------
PREMIUMS EARNED AND OTHER REVENUES:
Premiums earned, net $ 4,285,586 $ 1,197,562
Net investment income 383,967 206,415
Commission revenue 920,892 550,575
Transaction fees - 112,734
Other revenue 38,830 64,349
------------- -------------
Total premiums earned and other revenues 5,629,275 2,131,635
------------- -------------
OPERATING COSTS AND EXPENSES
Losses and loss adjustment expenses 919,123 162,912
General and administrative expenses (80,184) 967,706
------------- -------------
Total operating costs and expenses 838,939 1,130,618
------------- -------------
INCOME BEFORE FEDERAL INCOME TAXES 4,790,336 1,001,017
------------- -------------
Federal income taxes current 1,278,865 -
Federal income taxes deferred 198,877 -
------------- -------------
Federal income taxes, net 1,477,742 -
------------- -------------
NET INCOME $ 3,312,594 $ 1,001,017
============= =============
INCOME PER COMMON SHARE:
Basic $ 0.10 $ 0.03
============= =============
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - BASIC 33,470,000 31,778,000
============= =============
INCOME PER COMMON SHARE
Diluted $ 0.09 $ 0.03
============= =============
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - DILUTED 35,455,000 32,388,000
============= =============
CASH DIVIDEND DECLARED PER
COMMON SHARE $ 0.04 $ -
============= ============
The accompanying notes to condensed consolidated financial statements and accountant's review report are an
integral part of these statements.
4
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended Three Months Ended
March 31, 2006 March 31, 2005
-------------- --------------
CASH FLOW FROM OPERATING ACTIVITIES:
Net income $ 3,312,594 $ 1,001,017
Adjustments to reconcile net income
to cash provided by operations:
Amortization and depreciation 105,745 49,473
Issuance of common stock as compensation 22,668 27,999
Net change in assets and liabilities relating to
operating activities:
Reinsurance recovrables 21,565,378 16,552,391
Premiums and other receivables (1,193,374) (1,620,129)
Deferred taxes 198,877 -
Reinsurance payable (4,452,856) (3,742,096)
Deferred ceding commission 553,603 -
Advanced premiums 1,511,793 746,566
Accounts payable (287,517) (1,865,329)
Taxes payable 1,930,232 -
Other accrued expenses 1,961,761 738,224
Unpaid losses and loss adjustment expenses (35,174,664) (32,392,516)
Unearned premiums 11,960,343 3,483,832
Other assets 60,773 110,709
------------- -------------
Net cash provided by (used in) operating activities 2,075,356 (16,909,859)
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Building improvements (54,546) (642,995)
------------- -------------
Net cash used in investing activities (54,546) (642,995)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Preferred stock dividend (12,488) (12,486)
Repayments of loans payable (42,760) (226,851)
------------- -------------
Net cash used in financing activities (55,248) (239,337)
------------- -------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 1,965,562 (17,792,191)
CASH AND CASH EQUIVALENTS, Beginning of period 48,038,736 22,443,579
------------- -------------
CASH AND CASH EQUIVALENTS, End of period $ 50,004,298 $ 4,651,388
------------- -------------
Non-cash items
Declared dividends payable $ 1,488,851 $ 0
============= =============
The accompanying notes to condensed consolidated financial statements and accountant's review report are an
integral part of these statements.
5
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
(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, Sterling Premium Finance Company, which is wholly owned
by certain officers of the Company 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 March 31, 2006,
the related condensed consolidated statements of income for the three months
ended March 31, 2006 and 2005 and cash flows for the three months ended March
31, 2006 and 2005 are unaudited. There were no items comprising comprehensive
income for the three months ended March 31, 2006 and 2005. Accordingly,
consolidated statements of comprehensive income are not presented. 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, 2005.
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 three months of 2006.
NEW ACCOUNTING PRONOUNCEMENTS. SFAS No.123 (Revised 2004), Share-Based Payments,
issued in December 2004, is a revision of FASB Statement 123, Accounting for
Stock-Based Compensation and supersedes APB Opinion No. 25, Accounting for Stock
Issued to Employees, and its related implementation guidance. The Statement
focuses primarily on accounting for transactions in which an entity obtains
employee services in share-based payment transactions. SFAS No. 123 (Revised
2004) requires a public entity to measure the cost of employee services received
in exchange for an award of equity instruments based on the grant-date fair
value of the award (with limited exceptions) with the cost recognized over the
period during which an employee is required to provide service in exchange for
6
the award. This statement is effective as of the beginning of the first interim
or annual reporting period of the company's first fiscal year that begins on or
after December 15, 2005 and the Company adopted the standard in the first
quarter of fiscal year 2006.
On March 29, 2005, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin No. (SAB 107) regarding the Staff's interpretation of SFAS
123(R). This interpretation expresses the views of the Staff regarding the
interaction between SFAS 123(R) and certain SEC rules and regulations and
provides the Staff's views regarding the valuation of share-based payments
arrangements by public companies. In particular, this SAB provides guidance
related to share-based payment transactions with non-employees, the transition
from nonpublic to public entity status, valuation methods, the accounting for
certain redeemable financial instruments issued under shared-based payment
arrangements, the classification of compensation expense, non-GAAP financial
measures, first-time adoption of SFAS 123(R) in an interim period,
capitalization of compensation cost related to share-based payments
arrangements, the accounting for income tax effects of share-based payments
arrangements upon adoption of SFAS 123(R), the modification of employee share
options prior to adoption of SFAS 12(R) and disclosures in Management's
Discussion and Analysis subsequent to adoption of SFAS 123(R). The Company
adopted SAB 107 in connection with its adoption of SFAS 123(R).
In May 2005, FASB issued SFAS No. 154, Accounting Changes and Error Corrections,
which establishes, unless impracticable, retrospective application as the
required method for reporting a change in accounting principle in absence of
explicit transition requirements specific to the newly adopted accounting
principle. The statement provides guidance for determining whether retrospective
application of a change in accounting principle is impracticable. The statement
also addresses the reporting of a correction of error by restating previously
issued financial statements. SFAS No. 154 is effective for accounting changes
and corrections of errors made in fiscal years beginning after December 14,
2005. The Company adopted SFAS No. 154 in the first quarter of 2006.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES. Management has reassessed the
critical accounting policies as disclosed in our 2005 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.
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
7
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 maintain 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 March 31,
2006, the Company had unearned premiums totaling $62,850,348.
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 March 31, 2006, deferred policy acquisition costs amounted to
$0 due to the effect of deferred reinsurance commissions amounting to
$1,597,147.
An allowance for uncollectible premiums receivable is established when it
becomes evident that collection is doubtful, typically after 90 days past due.
No allowance is deemed necessary at March 31, 2006.
Loss and loss adjustment expenses ("LAE"), less related reinsurance, are
provided for as claims are incurred. The provision for unpaid loss and LAE
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. During 2005, Florida experienced three windstorm catastrophes
(Hurricanes Dennis, Katrina and Wilma) which resulted in losses. As a result of
these storms, the Company currently estimates that it incurred $64,267,953 in
losses prior to reinsurance and $4,050,000 net of reinsurance.
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
8
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 were to 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 was an Internet insurance lead generating
network while Tigerquote.com Insurance Solutions, Inc. was a network of Internet
insurance agencies. These entities would have sought to generate income from the
selling of leads and commissions on policies written. To date, insurance
agencies have been established in 22 states. Separate legal entities have been
formed for each state and are governed by the respective states' departments of
insurance. None of the agencies are currently active as the Company changed its
focus to sell leads to other companies and independent agents. During the fourth
quarter of 2005, the Company decided to stop generating new business on its
direct sales operations and focus on its core operations.
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 furnished pool services to homeowners until the
operation was sold during the second quarter of 2005.
NOTE 3 - REINSURANCE
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
9
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. While ceding premiums to reinsurers reduces the Company's risk of
exposure in the event of catastrophic losses, it also reduces the Company's
potential for greater profits should such catastrophic events fail to occur.
The Company believes that the extent of its reinsurance is typical of a company
of its size in the homeowners insurance industry.
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, through May 31, 2006, 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 premiums.
Effective December 1, 2005, UPCIC entered into a second quota share reinsurance
treaty with one of the reinsurers on the earlier treaty. Under the second quota
share treaty, UPCIC cedes an additional 25% of its gross written premiums,
losses and loss adjustment expenses for policies with coverage for wind risk
with a ceding commission equal to 35% of ceded gross written premiums through
May 31, 2006. In addition, the quota share treaties have 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 for each property loss. A $2,100,000 aggregate
limit applies to the term of the contract.
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 (FHCF).
The approximate coverage is estimated to be for $87,004,000 in excess of
$26,827,000.
The ceded reinsurance arrangements had the following effect on certain items in
the accompanying consolidated financial statements:
10
Three Months Ended Three Months Ended
March 31, 2006 March 31, 2005
--------------------------------------------------- -------------------------------------------------------
Loss and
Premiums Premiums Loss Premiums Premiums Loss and Loss
Written Earned Adjustment Written Earned Adjustment
------- ------ Expenses ------- ------ Expenses
-------- --------
Direct $36,844,517 $24,884,174 $6,689,110 $13,781,499 $10,254,796 $692,266
Ceded (31,982,560) (20,598,588) (5,769,987) (11,279,459) (9,057,234) (529,354)
------------ ------------ ----------- ------------ ----------- ---------
Net $4,861,957 $4,285,586 $919,123 $2,502,040 $1,197,562 $162,912
========== ========== ======== ========== ========== ========
OTHER AMOUNTS:
March 31, 2006
--------------
Reinsurance recoverable on paid and unpaid losses
and loss adjustment expenses $ 30,350,229
Unearned premiums ceded 53,030,737
Other reinsurance receivable 16,991,524
---------------
Reinsurance recoverable $ 100,372,490
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 March 31, 2006. 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 in only ceding risks to reinsurers whom it considers to be
financially sound combined with distribution of reinsurance contracts adequately
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.
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 the same cost as currently in place for UPCIC. In light of the
four windstorm catastrophes Florida experienced in 2004, and three windstorm
catastrophes Florida experienced in 2005, an increase in catastrophe reinsurance
cost for the current year renewal is likely and could adversely effect UPCIC's
results.
In addition, effective June 1, 2006 the Company intends to reduce the
rate of cession on its quota share reinsurance. Quota share reinsurance is used
primarily to increase the Company's underwriting capacity and to reduce exposure
to losses. Quota share reinsurance refers to a form of reinsurance under which
the reinsurer participates in a specified percentage of the premiums and losses
on all reinsured policies in a given class of business. As a result of the
reduction of the Company's quota share reinsurance, the Company will retain and
earn more premiums the Company writes but will also retain more related losses.
The Company's increased exposure to potential losses could have an adverse
effect on the Company's business, financial condition and results of operations.
In addition, the return to the Company of previously ceded unearned premiums net
of associated ceding commissions will result in a material reduction in net
income in the second quarter of 2006.
11
The Company may also be subject to assessments by Citizens Property
Insurance Corporation, the state-run insurer of last resort and the FHCF as a
result of operating deficiencies related to windstorm catastrophes. Under
current regulations, insurers may recoup the amount of their assessments from
policyholders, or in some cases collect the amount of the assessments from
policyholders as surcharges for the benefit of the assessing entity.
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
three month periods ended March 31, 2006 and March 31, 2005, respectively,
follows:
Three Months Ended
March 31, 2006 March 31, 2005
-------------- --------------
Basic EPS 33,470,000 31,778,000
Effect of assumed conversion of
common stock equivalents 1,985,000 610,000
----------------- ------------------
Diluted EPS 35,455,000 32,388,000
Options and warrants totaling approximately 6,148,000 and 1,232,000
respectively, were excluded from the calculation of diluted earnings per share
as their effect was anti-dilutive for the three months ended March 31, 2006.
Options and warrants totaling approximately 7,529,000 and 2,894,000
respectively, were excluded from the calculation of diluted earnings per share
as their effect was anti-dilutive for the three months ended March 31, 2005.
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 PLANS AND WARRANTS
Effective January, 2006, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 123 (R), "Share-Based Payments," and began recognizing
compensation expense in its Consolidated Statements of Income for its stock
option grants based on the fair value of the awards. Prior to January 1, 2006,
the Company accounted for stock options grants under the recognition and
measurement of APB Opinion 25, "Accounting for Stock Issued to Employees," and
related Interpretations, as permitted by SFAS No. 123, "Accounting for
Stock-Based Compensation." No stock-based compensation expense was reflected in
the net income prior to adopting SFAS 123 (R) as all options were granted at an
exercise price equal or greater than the market value of the underlying common
stock on the date of grant. SFAS 123 (R) was adopted using the modified
prospective transition method. Under this transition method, compensation cost
recognized in the periods after adoption includes (i) compensation cost for all
share-based payments granted prior to, but not yet vested as of January 1, 2006,
based on the grant-date fair value estimated in accordance with the original
provision of SFAS 123, and (ii) compensation cost for all share-based payments
granted subsequent to January 1, 2006, based on the grant-date fair value
estimated in accordance with the provisions of SFAS 123 (R). Results from prior
periods have not been restated. As a result of adopting SFAS 123 (R), the
12
Company's income before income taxes and net income for the first quarter of
2006 are $6,418 and $4,439 lower, respectively, than if it had continued to
account for share-based compensation under APB 25.
The following table illustrates the effects on net income and earnings per share
if the Company had applied the fair value recognition provisions of SFAS 123 to
options granted under the Company's stock option plans for all periods
presented. For purposes of this pro forma disclosure, the value of the options
is estimated using a Black-Scholes-Merton option pricing model and amortized to
expense over the options' vesting periods.
For the Quarter Ended
March 31, 2006 March 31, 2005
-------------- --------------
Net income reported $ 3,312,594 $ 1,001,017
Add:
Total stock-based compensation expense included
in reported net income, net of related tax effects 4,439 -
Deduct:
Total stock-based compensation expense determined
under a fair value based method, net of related tax effects (4,439) (13,520)
-------------- --------------
SFAS No 123 R pro forma net income $ 3,312,594 $ 987,497
============== ==============
Pro forma earings per share
Basic $0.10 $0.03
============== ==============
Fully diluted $0.09 $0.03
============== ==============
Earning per share, as reported
Basic $0.10 $0.03
============== ==============
Fully diluted $0.09 $0.03
============== ==============
At March 31, 2006, there were 7,015,000 options outstanding and currently
exercisable with a weighted average remaining contract term of 2.55 years and a
weighted exercise price of $0.95. There were no options exercised during the
quarter ended March 31, 2006.
At March 31, 2006, there were 1,781,700 warrants outstanding and currently
exercisable with a weighted average remaining contract term of 1.95 years and a
weighted exercise price of $0.59. There were 325,000 warrants exercised during
the quarter ended March 31, 2006.
The Company estimated the fair value of all stock options awards as of the grant
date by applying the Black-Scholes-Merton option pricing model. The use of this
valuation model involves assumptions that are judgmental and highly sensitive in
the determination of compensation expense and include the expected life of the
option, stock price volatility, risk-free interest rate, dividend yield,
exercise price, and forfeiture rate. Under SFAS 123 (R), forfeitures are
estimated at the time of valuation and reduce expense ratably over the vesting
period. The forfeiture rate is adjusted periodically based on the extent to
which actual forfeitures differ, or are expected to differ, from the previous
estimate. Under SFAS 123 and APB 25, the Company elected to account for
forfeitures when awards were actually forfeited and reflect the forfeitures as a
cumulative adjustment to the pro forma expense.
In accordance with SFAS 123 (R), fair values of options granted prior to
adoption and determined for purposes of disclosure under SFAS 123 have not been
changed. The fair values of options granted prior to adoption of SFAS 123 (R),
of which a portion is unvested, was estimated assuming the following: weighted
13
average expected life of five years, dividend yield of 0.0 percent, risk-free
interest rate of 6.5 percent, and expected volatility of 154.5 percent for
grants in 2004 and 126.3 in 2002. No options were granted in the first quarter
of 2006.
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 generated 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 ended March
31, 2006.
14
Three months ended March 31,
2006 2005
---- ----
Total revenue
Insurance segment $5,625,545 $1,984,960
Online commerce segment 0 113,419
Corporate and other 29,002 33,256
------------- --------------
Total operating segments 5,654,547 2,131,635
Intercompany eliminations (25,272) 0
------------- --------------
Total revenues $5,629,275 $2,131,635
============= ==============
Earnings (loss) before income taxes
Insurance segment $5,400,023 $1,481,161
Online commerce segment (30,139) (43,309)
Corporate and other (579,548) (436,835)
------------- --------------
Total earnings before income taxes $4,790,336 $1,001,017
============= ==============
Information regarding total assets as of March 31, 2006:
March 31, 2006
--------------
Total assets
Insurance segment $158,803,760
Online commerce segment 76,653
Corporate and other 4,249,388
-------------
Total operating segments 163,129,801
Intercompany eliminations (813,657)
-------------
Total assets $162,316,144
=============
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, Chief Operating Officer, Senior Vice President and a Director
of the Company. During the three months ended March 31, 2006 and 2005, the
Company expensed claims adjusting fees of $375,779 and $69,040 respectively, to
Dennis Downes and Associates.
15
In July 2004, the Company borrowed monies from a private investor in the amount
of $175,000 for working capital. In August 2005, this individual's son, Michael
P. Moran, became UPCIC's Vice President of Claims. The loan was paid off in
January 2006.
NOTE 8 - STOCK ISSUANCES
In February 2006, the Company issued 350,000 shares of Common Stock to a private
investor pursuant to the exercise of warrants to purchase restricted Common
Stock.
NOTE 9 - PROVISION FOR INCOME TAX EXPENSE
A provision for income tax expense of $1,477,742 is recorded for the three
months ended March 31, 2006 as a result of utilization of operating loss
carry-forwards and current profitable operations. No provision had been recorded
for the three months ended March 31, 2005 due to the substantial operating loss
carry-forwards and corresponding valuation allowance that existed at that time.
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.
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, and an inspection company, Universal Inspection
Corporation, which performs property inspections for homeowners' policies
underwritten by UPCIC.
The Company has formed subsidiaries that were to specialize in selling
insurance and generating insurance leads via the Internet. Tigerquote.com
Insurance & Financial Services Group, Inc. was to be an Internet insurance lead
generating network, and Tigerquote.com Insurance Solutions, Inc., was to be a
network of Internet insurance agencies. At March 31, 2006, agencies have been
established in 22 states. Separate legal entities have been formed for each
state and are governed by the respective states' departments of insurance. None
16
of the agencies are currently active as the Company changed its focus to sell
leads to other companies and independent agents. During the fourth quarter of
2005, the Company decided to stop generating new business on its direct sales
operation and focus on its core operations.
The Company also formed Tiger Home Services, Inc., which furnished pool
services to homeowners until the operation was sold during the second quarter of
2005.
FINANCIAL CONDITION
Cash and cash equivalents at March 31, 2006 aggregated $50,004,298. 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 March 31, 2006, the Company's investments were comprised of
$50,004,298 in cash and overnight repurchase agreements and $3,169,021 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 15% 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 110,000 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 - THREE MONTHS ENDED MARCH 31, 2006 VERSUS THREE MONTHS
ENDED MARCH 31, 2005
Gross premiums written increased 167.3% to $36,844,517 for the
three-month period ended March 31, 2006 from $13,781,499 for the three-month
period ended March 31, 2005. The increase in gross premiums written is primarily
attributable to an approximate 159.5% 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 257.9% to $4,285,586 for the three-month
period ended March 31, 2006 from $1,197,562 for the three-month period ended
March 31, 2005. The increase is due to an increase in new business, premium rate
increases and changes in the reinsurance program.
17
Investment income increased 86.0% to $383,967 for the three-month period
ended March 31, 2006 from $206,415 for the three-month period ended March 31,
2005. 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 March 31, 2006.
Transaction fee revenue decreased 100.0% to $0 for the three-month
period ended March 31, 2006 from $112,734 for the three-month period ended March
31, 2005. The decrease is primarily due to the discontinuance of sales of
on-line insurance leads to insurance agents during the three-month period ended
March 31, 2006.
Other revenue decreased 39.7% to $38,830 for the three-month period
ended March 31, 2006 from $64,349 for the three-month period ended March 31,
2005. The decrease is primarily attributable to no activity in the direct sales
and service operations during the three-month ended March 31, 2006.
Commission income increased 67.3% to $920,892 for three-month period
ended March 31, 2006 from $550,575 for the three-month period ended March 31,
2005. 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 increased 464.2%
to $919,123 for the three-month period ended March 31, 2006 from $162,912 for
the three-month period ended March 31, 2005. Losses and LAE incurred increased
due to increased exposure due to increased premium volume and changes in the
Company's reinsurance program. The Company's net loss ratio for the three-month
period ended March 31, 2006 was 21.4% compared to 13.6% for the three-month
period ended March 31, 2005. Losses and LAE are influenced by loss severity and
frequency. The Company's net loss ratio increased principally due to the higher
frequency and severity of claims in the three-month period ended March 31, 2006.
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 2005,
Florida experienced three windstorm catastrophes (Hurricanes Dennis, Katrina and
Wilma) which resulted in losses. As a result of these storms, the Company
currently estimates it incurred $64,267,953 in losses prior to reinsurance and
$4,050,000 net of reinsurance. 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 decreased to $(80,184) for the
three- month period ended March 31, 2006 from $967,706 for the three-month
18
period ended March 31, 2005. General and administrative expenses decreased and
are negative, primarily due to an increase in the dollar amount of ceded
premiums written to quota share reinsurers related to the increase in direct
premiums written as well as a higher ceding commission percentage on the
contract that incepted on December 1, 2005. The Company's ceding commission for
the incremental 25% ceding percentage at December 1, 2005 is 35%. The ceding
commission on the previous 55% ceding percentage is 31%.
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 three-month period ended March 31, 2006, cash flows provided by
operating activities were $2,075,356. 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 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 10 monthly installments of $100,000. Payment on one note commences on
June 30, 2006 and commences on the other note on November 30, 2006. The loan
amount subsequently was contributed to UPCIC as additional paid-in-capital. In
conjunction with the notes, the Company granted a warrant 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. These transactions were approved
by the Company's Board of Directors.
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 future general and administrative expenses.
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 twelve months.
On March 29, 2006 the Company declared a dividend of $.04 per share on
the outstanding Common Stock of the Company to be paid on May 6, 2006 to the
shareholders of record of the Company at the close of business on April 21,
2006. The dividend payable amount of $1,488,851 is accrued in the March 31, 2006
balance sheet.
19
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
affect UPCIC's results.
The balance of cash and cash equivalents at March 31, 2006 is
$50,004,298. Most of this amount is available to pay claims in the event of
catastrophic events pending reimbursement 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 March 31, 2006. 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, 2005 was $(1,995,376).
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
determine appropriate regulatory actions relating to insurers who show signs of
weak or deteriorating condition. As of December 31, 2005, 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 three
months of 2006.
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
20
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.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
------- -----------------
The Company did not have any reportable legal proceedings during the
three months ending March 31, 2006. 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
------- -----------------------------------------------------------
In February 2006, the Company issued 350,000 shares of Common Stock to a
private investor pursuant to the exercise of warrants to purchase restricted
Common Stock. In April 2006, the Company issued 200,000 shares of Common Stock
to a vendor pursuant to the exercise of warrants to purchase restricted Common
Stock. Also in April 2006, the Company issued 200,000 shares of restricted
Common Stock to Sean P. Downes, COO of UPCIC, pursuant to Mr. Downes' exercise
of stock options and 123,077 shares of Common Stock pursuant to Mr. Downes'
election to receive such shares in lieu of accrued vacation. The shares were
issued to Mr. Downes in a private transaction pursuant to Section 4(2) of the
Securities Act of 1933, as amended. Also in April 2006, the Company issued
10,000 shares of Common Stock to Reed J. Slogoff, a Director of the Company,
pursuant to the exercise of options to purchase restricted Common Stock.
Item 3. Defaults upon Senior Securities
-------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
------- ---------------------------------------------------
None.
Item 5. Other Information
------- -----------------
None.
Item 6. Exhibits
------- --------
Exhibit No. Exhibit
----------- -------
21
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
22
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: May 15, 2006 /s/ Bradley I. Meier
-------------------------------------------------------
Bradley I. Meier, President and Chief Executive Officer
/s/ James M. Lynch
-------------------------------------------------------
James M. Lynch, Chief Financial Officer