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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):
March 17, 2000 (February 11, 2000)
Philadelphia Consolidated Holding Corp.
(Exact name of Registrant as specified in its charter)
Pennsylvania 0-22280 23-2202671
(State or other juris- (Commission (IRS Employer
diction of incorporation) File No.) Identification No.)
One Bala Plaza, Suite 100
Bala Cynwyd, PA 19004
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (610) 617-7900
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
The Registrant is filing this Current Report on Form 8-K solely for the
purpose of filing the Exhibit listed in Item 7(c) below.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
Exhibit 99.1 Press Release dated February 11, 2000.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Philadelphia Consolidated Holding Corp.
(Registrant)
Date: March 17, 2000 By: /s/ Craig P. Keller
-------------------------------------
Craig P. Keller
Senior Vice President, Secretary,
Treasurer and Chief Financial Officer
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EXHIBIT INDEX
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Exhibit Description Method of Filing
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<S> <C> <C>
99.1 Press Release dated February 11, 2000 Filed electronically herewith.
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Exhibit 99.1
PHILADELPHIA CONSOLIDATED HOLDING CORP.
FOURTH QUARTER RESULTS
DECEMBER 31, 1999
FEBRUARY 11, 2000 PRESS RELEASE
Bala Cynwyd, PA - Philadelphia Consolidated Holding Corp. (PHLY-NASDAQ) today
reported net income for the fourth quarter ended December 31, 1999 was $4.1
million ($0.27 diluted and $0.32 basic earnings per share) vs. $4.6 million
($0.31 diluted and $0.38 basic earnings per share) for the same period in 1998.
Net income for the quarter ended December 31, 1999 included previously announced
Hurricane Irene after tax catastrophe losses totaling $1.8 million ($0.12 per
diluted share). Additionally in November 1999 Mr. Thomas J. Jerger, CEO of the
recently acquired Jerger Company, Inc. resigned to pursue other non-related
interests. A settlement in connection with Mr. Jerger's separation resulted in a
$0.03 after tax diluted per share charge during the current quarter.
Gross written premiums increased 30.6% in the quarter to $70.5 million vs. $54.0
million in the fourth quarter 1998 and the combined ratio for the quarter was
91.0% vs. 85.4% for the same quarter in 1998. After tax net realized investment
gains for the fourth quarter ended December 31, 1999 were $0.3 million ($0.02
diluted earnings per share) vs. after tax net realized investment losses of $0.8
million (($0.05) diluted earnings per share) for the same period in 1998.
Net income for the year ended December 31, 1999 was $18.8 million ($1.25 diluted
and $1.51 basic earnings per share) vs. $20.0 million ($1.34 diluted and $1.63
basic earnings per share) for the same period in 1998.
Gross written premiums increased 37.4% for the year ended December 31, 1999 to
$274.9 million vs. $200.1 million for the same period in 1998 and the combined
ratio for the year was 92.9% vs. 85.4% for the year 1998. After tax net realized
investment gains for the year ended December 31, 1999 were $3.7 million ($0.25
per diluted share) vs. $0.3 million ($0.02 per diluted share) for the same
period in 1998.
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Press Release
February 11, 2000
Page 2
James J. Maguire CEO said, "1999 proved to be a challenging year in many ways
for the Company with our acquisition integration, exiting the nursing home
business and catastrophe storm losses. The fundamentals of our Company continue
to be sound and prospects for continued growth are excellent. Looking ahead into
the year 2000, I'm especially excited about several new E-commerce initiatives
we've undertaken. In February 2000 we introduced a web site
(www.accessphly.com), for our personal lines agents in California which enables
them to access the Company to rate, quote, issue and remit payment (by credit
card) for one of our proprietary products. We anticipate providing this
capability to our Florida agents during the first quarter. Additionally, in our
specialty lines product niche we are participating in portal arrangements by
which we receive submissions via the Internet and are forming other alliances
which will further enable E-commerce business opportunities."
The Company will conduct a conference call at 3:00 p.m. on Friday, February 11,
2000. You may participate by calling the Company's conference operator at
800-450-0788 and ask for Philadelphia Consolidated Holding Corp., or listen to
the conference call over the Internet through Investor Broadcast Network's Vcall
web site, located at http://www.vcall.com. To listen to the live call please go
to the web site at least fifteen minutes early to register, download, and
install any necessary audio software. For those who cannot listen to the live
broadcast, a replay will be available shortly after the call.
Forward-Looking Information
This release contains forward-looking statements that are based on management's
estimates, assumptions and projections. In connection with the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995, the Company
provides the following cautionary remarks regarding important factors which,
among others, could cause the Company's actual results and experience to differ
materially from the anticipated results or other expectations expressed in the
Company's forward-looking statements. The risks and uncertainties that may
affect the operations, performance, development, results of the Company's
business, and the other matters referred to above include, but are not limited
to: (i) changes in the business environment in which the Company operates,
including inflation and interest rates; (ii) changes in taxes, governmental
laws, and regulations; (iii) competitive product and pricing activity; (iv)
difficulties of managing growth profitably; (v) catastrophe losses; and (vi) the
impact of Year 2000 issues.
Philadelphia Insurance Companies, rated "A+ (Superior) by A.M. Best Company, and
"A" by Standard and Poor's, markets and underwrites specialty property and
casualty insurance products through 40 proprietary underwriting offices across
the U.S. of A.
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PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
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As of December 31,
----------------------------
1999 1998
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<S> <C> <C>
ASSETS
INVESTMENTS:
FIXED MATURITIES AVAILABLE FOR SALE AT MARKET
(AMORTIZED COST $331,774 AND $278,557) ............ $ 321,018 $ 283,718
EQUITY SECURITIES AT MARKET (COST $41,231
AND $43,441) ...................................... 72,768 72,768
--------- ---------
TOTAL INVESTMENTS ............................... 393,786 356,486
CASH AND CASH EQUIVALENTS .............................. 26,230 31,573
ACCRUED INVESTMENT INCOME .............................. 5,027 3,771
PREMIUMS RECEIVABLE .................................... 49,176 34,961
PREPAID REINSURANCE PREMIUMS AND
REINSURANCE RECEIVABLES ........................... 54,920 22,892
DEFERRED ACQUISITION COSTS ............................. 26,054 16,853
PROPERTY AND EQUIPMENT ................................. 9,277 4,877
GOODWILL LESS ACCUMULATED AMORTIZATION
OF $2,620 AND $1,669 .............................. 28,801 416
OTHER ASSETS ........................................... 5,780 4,561
--------- ---------
TOTAL ASSETS .................................... $ 599,051 $ 476,390
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
POLICY LIABILITIES AND ACCRUALS:
UNPAID LOSS AND LOSS ADJUSTMENT EXPENSES ............. $ 188,063 $ 151,150
UNEARNED PREMIUMS .................................... 111,606 64,787
--------- ---------
TOTAL POLICY LIABILITIES AND ACCRUALS ........... 299,669 215,937
PREMIUMS PAYABLE ....................................... 22,223 7,192
OTHER LIABILITIES ...................................... 14,762 9,463
DEFERRED INCOME TAXES .................................. 2,052 7,410
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TOTAL LIABILITIES ............................... 338,706 240,002
--------- ---------
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES:
COMPANY OBLIGATED MANDATORILY REDEEMABLE
PREFERRED SECURITIES OF SUBSIDIARY TRUST HOLDING
SOLELY DEBENTURES OF COMPANY ......................... 98,905 98,905
--------- ---------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
PREFERRED STOCK, $.01 PAR VALUE,
10,000,000 SHARES AUTHORIZED,
NONE ISSUED AND OUTSTANDING
COMMON STOCK, NO PAR VALUE, 50,000,000 SHARES
AUTHORIZED, 13,381,924 AND 12,330,825 SHARES ISSUED 68,859 44,796
NOTES RECEIVABLE FROM SHAREHOLDERS ................... (2,506) (1,680)
ACCUMULATED OTHER COMPREHENSIVE INCOME ............... 13,507 22,417
RETAINED EARNINGS .................................... 93,766 74,923
LESS COST OF COMMON STOCK HELD IN TREASURY,
791,016 AND 130,262 SHARES ........................ (12,186) (2,973)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY ...................... 161,440 137,483
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ...... $ 599,051 $ 476,390
========= =========
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PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
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For the Three Months For the Years
Ended December 31, Ended December 31,
------------------- ------------------
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
REVENUE:
NET WRITTEN PREMIUMS............................... $ 46,604 $ 38,677 $ 184,071 $ 143,036
CHANGE IN NET UNEARNED PREMIUMS
(INCREASE)..................................... (2,814) (4,732) (19,156) (20,349)
------------- ------------ ----------- -----------
NET EARNED PREMIUMS................................ 43,790 33,945 164,915 122,687
NET INVESTMENT INCOME.............................. 5,434 4,572 20,695 15,448
NET REALIZED INVESTMENT GAIN (LOSS)................ 459 (1,234) 5,700 474
OTHER INCOME....................................... 2,723 48 4,722 219
------------ ------------ ----------- -----------
TOTAL REVENUE..................................... 52,406 37,331 196,032 138,828
------------ ------------ ----------- -----------
LOSSES AND EXPENSES:
LOSS AND LOSS ADJUSTMENT EXPENSES.................. 34,913 20,413 122,491 74,074
NET REINSURANCE RECOVERIES......................... (10,032) (2,284) (23,081) (7,700)
------------ ------------ ----------- -----------
NET LOSS AND LOSS ADJUSTMENT EXPENSES.............. 24,881 18,129 99,410 66,374
ACQUISITION COSTS AND OTHER
UNDERWRITING EXPENSES........................... 14,971 10,857 53,793 38,422
OTHER OPERATING EXPENSES........................... 4,915 497 8,939 2,212
------------ ------------ ----------- -----------
TOTAL LOSSES AND EXPENSES.......................... 44,767 29,483 162,142 107,008
------------ ------------ ----------- -----------
MINORITY INTEREST: DISTRIBUTIONS ON
COMPANY OBLIGATED MANDATORILY
REDEEMABLE PREFERRED SECURITIES
OF SUBSIDIARY TRUST................................ 1,811 1,811 7,245 4,770
------------ ------------ ----------- -----------
INCOME BEFORE INCOME TAXES........................... 5,828 6,037 26,645 27,050
------------ ------------ ----------- -----------
INCOME TAX EXPENSE (BENEFIT):
CURRENT............................................ 2,373 2,115 8,360 7,941
DEFERRED........................................... (599) (671) (558) (919)
------------- ------------ ----------- -----------
TOTAL INCOME TAX EXPENSE....................... 1,774 1,444 7,802 7,022
------------ ------------ ----------- -----------
NET INCOME..................................... $ 4,054 $ 4,593 $ 18,843 $ 20,028
============ ============ =========== ===========
PER AVERAGE SHARE DATA:
BASIC EARNINGS PER SHARE........................... $ 0.32 $ 0.38 $ 1.51 $ 1.63
============ ============ =========== ===========
DILUTED EARNINGS PER SHARE......................... $ 0.27 $ 0.31 $ 1.25 $ 1.34
============ ============ =========== ===========
WEIGHTED-AVERAGE COMMON SHARES
OUTSTANDING....................................... 12,585,504 12,188,540 12,501,165 12,249,262
WEIGHTED-AVERAGE SHARE EQUIVALENTS
OUTSTANDING....................................... 2,476,611 2,822,910 2,614,399 2,680,165
------------ ------------ ----------- -----------
WEIGHTED-AVERAGE SHARES AND SHARE
EQUIVALENTS OUTSTANDING........................... 15,062,115 15,011,450 15,115,564 14,929,427
============ ============ =========== ===========
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