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):
February 28, 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)
<PAGE>
Item 5. Other Events.
(a) The registrant issued the following press release on
February 28, 2000:
For Immediate Release
ACCEPTANCE INSURANCE COMPANIES INC.
CONFIRMS YEAR END RESULTS
(Omaha, Nebraska, February 28, 2000). Acceptance Insurance Companies
Inc. (NYSE: AIF) announced today that for the twelve months ended December 31,
1999 the Company had a net loss of $36 million, or $2.52 per share. This
compares with a net profit of $5.5 million, or $0.37 per share, for the twelve
months ending December 31, 1998. The results announced today are the same as
the preliminary and unaudited results the Company released on February 11,2000.
The Company said it recorded special and nonrecurring charges for the
three months ended December 31, 1999 in an after tax amount of $9.4 million.
In addition, while its federally reinsured crop business remained profitable
for the year, the Company said a change in the mix of that business produced a
higher than anticipated fourth quarter claim volume and reduced its previously
estimated underwriting gain by an after tax amount of $5.7 million.
The special and nonrecurring charges related primarily to previously
announced divestitures of various lines of property and casualty business.
They include severance costs, charges relating to discontinued software
development, reduction of certain deferred policy acquisition costs and an
increased allowance for doubtful accounts. Also included are charges
associated with the Company's recent and anticipated resolutions of disputes
with state regulatory authorities regarding its crop insurance business and the
evaluation of strategic and capital alternatives.
The Company also acknowledged it recently received the class action
complaint against AICI Capital Trust and others, announced in a press release
distributed February 7 by a New York law firm representing an alleged purchaser
of the Company's preferred securities.
Also as previously announced, the Company will hold a conference call
for interested parties at 10:30 a.m. EST, Tuesday, February 29, 2000. The
Company's conference call may be accessed at 212-896-6050 five to ten minutes
before the call begins. The conference call also will be available on PostView
from 12:30 p.m. EST, February 29 to 5:00 p.m. EST, March 1. To access
PostView, dial 800-633-8284 and enter reservation 14453517.
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.
Contacts:
John E. Martin
President and Chief Executive Officer
800 228 7217
J. Michael Gottschalk
General Counsel and Secretary
800 228 7217
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
for the three months and twelve months ended December 31, 1999 and 1998
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Twelve Months
____________________________ _______________________________
1999 1998 1999 1998
___________ _________ ____________ __________
<S> <C> <C> <C> <C>
Gross premiums written $ 95,407 $117,166 $ 692,941 $ 700,960
Ceded premiums written (49,604) (66,573) (441,275) (391,468)
___________ _________ _____________ __________
Net premiums written $ 45,803 $ 50,593 $ 251,666 $ 309,492
=========== ========= ============= ==========
Revenues:
Insurance premiums earned $ 38,283 $ 69,717 $ 248,712 $ 328,044
Net investment income 6,315 6,971 25,064 28,320
Net realized capital gains 3,789 1,471 10,203 6,825
___________ _________ ____________ __________
48,387 78,159 283,979 363,189
___________ _________ ____________ __________
Costs and expenses:
Cost of revenues:
Insurance losses and loss adjustment
expenses 42,456 78,828 218,789 237,061
Insurance underwriting expenses 28,147 22,901 108,529 104,736
General and administrative expenses 2,877 1,660 4,592 3,502
____________ __________ ____________ __________
73,480 103,389 331,910 345,299
____________ __________ ____________ __________
Operating profit (loss) (25,093) (25,230) (47,931) 17,890
____________ __________ _____________ __________
Other income (expense):
Interest expense (2,212) (2,386) (9,058) (8,994)
Loss on investee - - - (704)
Other, net (14) (56) (67) (112)
____________ __________ _____________ ___________
(2,226) (2,442) (9,125) (9,810)
____________ __________ _____________ ___________
Income (loss) before income taxes and cumulative effect of
change in accounting principles (27,319) (27,672) (57,056) 8,080
Income tax expense (benefit) (9,639) (7,870) (21,436) 2,544
____________ __________ _____________ ___________
Income (loss) before cumulative effect of
change in accounting principles (17,680) (19,802) (35,620) 5,536
Cumulative effect of change in accounting principles - - (338) -
____________ __________ _____________ ____________
Net income (loss) $ (17,680) $(19,802) $ (35,958) $ 5,536
============= ========== ============= ============
Income (loss) per share before cumulative effect of
change in accounting principles:
Basic $ (1.24) $ (1.39) $ (2.50) $ .37
============= ========= ============= ============
Diluted $ (1.24) $ (1.37) $ (2.50) $ .37
============= ========= ============= ============
Net income(loss) per share:
Basic $ (1.24) $ (1.39) $ (2.52) $ .37
============= ========== ============= ============
Diluted $ (1.24) $ (1.37) $ (2.52) $ .37
============= ========== ============= ============
Shares:
Basic 14,256 14,297 14,249 14,843
============ ========== ============= ============
Diluted 14,256 14,432 14,249 15,039
============ ========== ============= ============
Ratios - GAAP
_____________
Loss & LAE 110.9% 113.1% 88.0% 72.3 %
Underwriting 73.5% 32.8% 43.6% 31.9 %
____________ __________ _____________ ____________
Combined 184.4% 145.9% 131.6% 104.2 %
============ ========== ============= ============
December 31, December 31,
1999 1998
______________ _______________
Total Investments $ 426,118 $ 489,397
Total Assets 1,274,163 1,092,943
Net Reserves for Losses and LAE 278,840 285,975
Total Equity 180,958 236,154
Shares Outstanding 14,264 14,237
Book Value per Share $ 12.69 $ 16.59
</TABLE>
