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):
November 7, 2000
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)
222 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)
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Item 5. Other Events.
(a) The registrant issued the following press release on
November 7, 2000:
For Immediate Release
Acceptance Insurance Companies Inc.
Announces Third Quarter 2000 Results
(Omaha, Nebraska, November 7, 2000). Acceptance Insurance Companies Inc.
(NYSE:AIF) today reported a net loss of $2.3 million, or $0.16 per share, for
the third quarter of 2000. Through September 30, 2000 the Company's net loss
for the current year was $4.7 million, or $0.33 per share.
During the third quarter of 1999 Acceptance had a net loss of $25.2 million, or
$1.77 per share, and for the first three quarters of 1999, Acceptance's net
loss was $18.3 million, or $1.28 per share. Acceptance included estimated
results from its 1999 multiple peril crop insurance operations in its financial
statements for the third quarter of 1999. As previously announced, the Company
will include estimated results from its 2000 multiple peril crop insurance
operations in its financial statements for the fourth quarter of the current
year; therefore, those estimated results are not reflected in the financial
information released today.
For the third quarter of 2000 Acceptance had an after-tax net operating loss of
$2.4 million, or $.17 per share, compared with an after-tax net operating loss
for the third quarter of 1999 of $25.9 million, or $1.82 per share. The
Company's after-tax net operating loss for the first nine months of 2000 was
$5.9 million, or $.41 per diluted share, exclusive of after-tax realized
investment gains of $1.2 million. During the comparable period last year, the
Company reported an after-tax net operating loss of $22.5 million, or $1.58 per
diluted share, exclusive of after-tax realized investment gains of $4.2
million.
Net income and net operating income for the third quarter were negatively
impacted by approximately $1.4 million ($.10 per share) of after-tax crop hail
losses resulting from late season storms in the Midwest. The Company said it
also increased its prior year reserves by an after-tax amount of $650,000
($.05 per share) related to higher than expected claims activity on California
construction defect exposures. During the first three quarters of 2000
Acceptance said it increased property and casualty reserves for all prior years
in an after-tax amount of approximately $341,000.
Also as previously announced, the Company said that during the third quarter it
continued to add new property and casualty lines of business. Discontinued
property and casualty lines had a greater than expected adverse impact during
the third quarter due to a greater than expected amount of earned premium.
"The year continues to be a rebuilding year for us," commented John Martin,
Chief Executive Officer. "While we are disappointed in the crop hail losses,
hail is a classic example of the risks agricultural producers protect
themselves against through our Company. The positive performance of our
continuing property and casualty lines through the first nine months of this
year also strengthens our confidence that this segment of our business is
well-positioned for the future."
The Company will hold a conference call for interested parties at 9:30 a.m.
(Central), November 8, 2000. The conference call may be accessed at
212.346.0100 five minutes before the call begins. The conference call also will
be available on PostView from 11:30 a.m. (Central), November 8, 2000 to
11:30 a.m. (Central), November 9, 2000. To access PostView, dial 800.633.8284
or 858.812.6440 and enter reservation 16696855.
Acceptance Insurance Companies Inc. is an insurance holding company providing
specialized crop, property and casualty insurance products throughout the
United States. American Agrisurance, the Company's wholly owned crop insurance
marketing subsidiary, is a widely recognized leader in the crop insurance
industry.
This release includes forward-looking statements with respect to the Company's
underwriting intentions and expected financial results. Such forward-looking
statements are subject to inherent risks and uncertainties that may cause
actual results to differ materially from those contemplated by such
forward-looking statements, including factors noted in the Company's Form 10K
for the year ended December 31, 1999, which are incorporated herein by
reference.
Contacts:
John E. Martin Dwayne D. Hallman
President and Chief Executive Officer Chief Financial Officer
800.228.7217 800.228.7217
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
for the three months and nine months ended September 30, 2000 and 1999
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Nine Months
_______________________________ ____________________________
2000 1999 2000 1999
__________ __________ __________ __________
<S> <C> <C> <C> <C>
Gross premiums written $ 137,040 $ 304,553 $ 399,426 $ 597,534
Ceded premiums written (116,300) (206,723) (314,779) (391,671)
__________ ___________ __________ __________
Net premiums written $ 20,740 $ 97,830 $ 84,647 $ 205,863
========== =========== ========== ==========
Revenues:
Insurance premiums earned 34,794 98,857 129,102 210,429
Net investment income 6,245 6,111 17,719 18,749
Net realized capital gains 158 1,072 1,824 6,414
__________ _________ _________ __________
41,197 106,040 148,645 235,592
__________ __________ _________ __________
Costs and expenses:
Cost of revenues:
Insurance losses and loss adjustment
expenses 31,831 97,502 106,487 176,333
Insurance underwriting expenses 10,621 45,125 42,449 80,382
General and administrative expenses 375 525 1,535 1,715
__________ _________ __________ __________
42,827 143,152 150,471 258,430
__________ _________ __________ __________
Operating loss (1,630) (37,112) (1,826) (22,838)
__________ _________ __________ ___________
Other income (expense):
Interest expense (2,167) (2,186) (6,503) (6,846)
Other, net -- (74) -- (53)
___________ __________ __________ ___________
(2,167) (2,260) (6,503) (6,899)
___________ __________ __________ ___________
Loss before income taxes and cumulative
effect of change in accounting principle (3,797) (39,372) (8,329) (29,737)
Income tax benefit (1,506) (14,169) (3,628) (11,797)
___________ __________ __________ __________
Loss before cumulative effect of change
in accounting principle (2,291) (25,203) (4,701) (17,940)
Cumulative effect of change in accounting
principle -- -- -- (338)
___________ ___________ __________ __________
Net loss $ (2,291) $ (25,203) $ (4,701) $ (18,278)
=========== =========== ========== ==========
Loss per share before cumulative effect of
change in accounting principle:
Basic $ (.16) $ (1.77) $ (.33) $ (1.26)
========== =========== ========== ===========
Diluted $ (.16) $ (1.77) $ (.33) $ (1.26)
========== =========== ========== ===========
Net loss per share:
Basic $ (.16) $ (1.77) $ (.33) $ (1.28)
========== =========== ========== ==========
Diluted $ (.16) $ (1.77) $ (.33) $ (1.28)
========== =========== ========== ==========
Shares:
Basic 14,308 14,252 14,298 14,246
========== =========== ========= ==========
Diluted 14,308 14,252 14,298 14,246
========== =========== ========= ==========
Ratios - GAAP:
Loss & LAE 91.5% 98.6% 82.5% 83.8%
Underwriting 30.5% 45.7% 32.9% 38.2%
__________ ___________ __________ ___________
Combined 122.0% 144.3% 115.4% 122.0%
========== =========== ========== ============
September 30, September 30,
2000 1999
_____________ _____________
Total Investments $430,775 $459,759
Net Reserves for Losses and LAE 246,101 284,650
Total Equity 180,983 205,843
Book Value per Share $ 12.65 $ 14.44
</TABLE>
<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/ J. Michael Gottschalk
J. Michael Gottschalk, Chief Legal Officer,
General Counsel and Secretary
NOvember 7, 2000
