SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
April 28, 1999
ACCEPTANCE INSURANCE COMPANIES INC.
(Exact name of registrant as specified in its charter)
Delaware 1-7461 31-0742926
(State of Incorporation) (Commission File Number) (IRS Employer Identification
Number)
225 S. 15th Street, Suite 600 North
Omaha, Nebraska 68102
(Address of principal executive offices) (Zip Code)
(402) 344-8800
(Registrant's telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
01-171056.01
01-171056.01
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Item 5. Other Events.
Reference is made to the press release of Registrant, issued
on April 28, 1999, which is incorporated herein by this reference. A copy of
the press release is attached to this form 8-K as Exhibit 99.1.
01-171056.01
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
ACCEPTANCE INSURANCE COMPANIES
INC.
By /s/ Kenneth Coon
Kenneth C. Coon, Chief Executive Officer
April 28, 1999
01-171056.01
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Exhibits:
- ---------
99.1 Press Release dated April 28, 1999
EXHIBIT 99.1
ACCEPTANCE INSURANCE REPORTS PROFITABLE FIRST QUARTER; WARBURG
DILLON READ RETAINED TO EXPLORE STRATEGIC ALTERNATIVES
Omaha, NE, April 28, 1999
Acceptance Insurance Companies Inc. (NYSE:AIF) today reported income,
before the cumulative effect of a change in insurance-related accounting
principles and the special charge related to the Company's previously announced
restructuring of its property and casualty operations, of $4.2 million or $.30
per share. This compared to net income for the first quarter of 1998 of $6.2
million or $.40 per share which included $2.1 million or $.14 per share of net
income related to adjustments for the prior year's MPCI profit share. In 1999,
the Company had no similar adjustment.
Kenneth C. Coon, CEO, commented, "Our results for the first quarter
were on target with the Company's expectations. Excluding adjustments for
prior years' crop operations and special charges associated with our
restructuring, our operating income increased 9.5% from $7.4 million in the
first quarter of 1998 to $8.1 million during the same period in 1999."
Acceptance also announced that it has retained Warburg Dillon Read LLC
to assist the Company in a comprehensive review of strategic alternatives for
increasing or realizing shareholder value as well as to provide other financial
advisory services to the Company. Mr. Coon noted, "We believe that we have
created substantial value at Acceptance over the past six years, but the
current trading price of our stock does not reflect that value. Through this
process, we believe that the true value of our Company for its owners,
employees and clients can be realized."
The Company also confirmed that the legislation referred to in its
March 25 announcement regarding applications for CRCPlus had been enacted.
The legislation, HR 1212, allowed farmers who applied for CRCPlus coverage
before the Company closed sales of the coverage to change their underlying
federally reinsured crop insurance. Acceptance confirmed that it is processing
and mailing policies for CRCPlus coverage on rice and other crops as indicated
in the earlier announcement.
Acceptance is an A- rated property and casualty insurance company
concentrating on writing specialty coverages throughout the United States not
generally emphasized by standard insurance carriers. The Company's insurance
operations are conducted through its six insurance subsidiaries and one
insurance agency. The Company selects underwriting specialties within the
property and casualty industry that provide a diversified portfolio of
products, with the goal of producing underwriting results better than the
industry average.
Contact: Kenneth C. Coon John P. Nelson
Chairman & CEO President & COO
(402) 344-8800 (402) 344-8800
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ACCEPTANCE INSURANCE COMPANIES INC.
for the three months ended March 31, 1999 and 1998
(in thousands, except per share data)
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Gross premiums written $126,114 $137,360
Ceded premiums written (75,062) (61,768)
Net premiums written $ 51,052 $ 75,592
Revenues:
Insurance premiums earned 53,571 69,003
Net investment income 6,244 6,920
Net realized capital gains 2,480 2,841
62,295 78,764
Cost and expenses:
Cost of revenues:
Insurance losses and loss adjustment
expenses 36,876 46,301
Insurance underwriting expenses 18,168 21,200
General and administrative expenses 553 656
55,597 68,157
Operating profit 6,698 10,607
Other income (expense):
Interest expense (2,390) (2,165)
Net loss from investee - (704)
Other, net 14 34
(2,376) (2,835)
Income before income taxes and cumulative
effect of change in accounting principles 4,322 7,772
Income tax expense 960 1,614
Income before cumulative effect of change
in accounting principles 3,362 6,158
Cumulative effect of change in accounting
principles (338) -
Net income $ 3,024 $ 6,158
Income per share before cumulative effect of
change in accounting principles:
Basic $ .24 $ .40
Diluted $ .23 $ .40
Net income per share:
Basic $ .21 $ .40
Diluted $ .21 $ .40
Shares:
Basic 14,241 15,210
Diluted 14,342 15,455
Ratios - GAAP (before restructuring charge)
Loss & LAE 68.8% 67.1%
Underwriting 31.4% 30.7%
Combined 100.2% 97.8%
March 31, March 31,
1999 1998
Total Investments $502,518 $514,156
Net Reserves for Losses and LAE 272,311 265,845
Total Equity 235,550 262,512
Book Value per Share $ 16.54 $ 17.25
</TABLE>
