UNAM Unico American Corp

Unico American Corporation (NASDAQ – “UNAM”) (“Unico,” the “Company”), announced today its consolidated financial results for the three and twelve months ended December 31, 2017. For the three months ended December 31, 2017, revenues were $9.3 million and net loss was $2.8 million ($0.52 diluted loss per share) compared with revenues of $9.0 million and net income of $0.6 million ($0.11 diluted earnings per share) for the three months ended December 31, 2016. For the twelve months ended December 31, 2017, revenues were $36.8 million and net loss was $8.7 million ($1.64 diluted loss per share) compared with revenue of $35.3 million and net loss of $1.4 million ($0.26 diluted loss per share) for the twelve months ended December 31, 2016.

Stockholders’ equity was $59.9 million as of December 31, 2017, or $11.30 per common share including net unrealized after-tax investment losses of $0.2 million, compared to stockholders’ equity of $68.9 million as of December 31, 2016, or $12.98 per common share including net unrealized after-tax investment gains of $0.008 million.

“While we realized a loss during our fourth quarter, we also experienced improving trends in both loss ratios and investment yields, and we assigned top priority to the achievement of immediate, less speculative results,” said Cary L. Cheldin, Unico’s President and Chief Executive Officer. “To achieve those results, we have realigned priorities, focusing our attention on the improvement of loss ratios and the reduction of expenses. In fact, loss ratios improved during the quarter and we expect continued improvement as increased rates and a refined risk selection process both take hold. It is important to note that over three quarters of our net loss during the quarter was due to adjustments from the 2017 Tax Cuts and Jobs Act. The management team and I are excited about the opportunities ahead of us and we are optimistic about our future.”

About Unico

Headquartered in Calabasas, California, Unico is an insurance holding company that underwrites property and casualty insurance through its insurance company subsidiary; provides property, casualty and health insurance through its agency subsidiaries; and through its other subsidiaries provides insurance premium financing and membership association services. Unico has conducted the majority of its operations through its subsidiary, Crusader Insurance Company, since 1985. For more information concerning Crusader Insurance Company, please visit the Crusader’s Web site at www.crusaderinsurance.com.

Forward-Looking Statements

Certain statements in this press release are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995 and the Company intends that such forward-looking statements are subject to the safe harbors created thereby. These statements, which may be identified by words or phrases such as “anticipate,” “appear,” “believe,” “estimate,” “expect,” “intend,” “plan,” “predict,” “will,” “may,” “likely,” “future,” “should,” “could,” and “would” and similar words, are intended to identify forward-looking statements. In addition, any statements that refer to projections of the Company’s future financial performance, trends in its businesses, or other characterizations of future events or circumstances are forward-looking statements.

The forward-looking statements included herein are based on current expectations of the Company’s management based on available information and involve certain risks and uncertainties, many of which are beyond the control of the Company. Such risks and uncertainties could cause actual results to differ materially from those anticipated by these forward-looking statements. Factors that could cause actual results to differ materially include, among others: failure to meet minimum capital and surplus requirements; vulnerability to significant catastrophic property loss; a change in accounting standards issued by the Financial Accounting Standards Board; ability to adjust claims accurately; insufficiency of loss and loss adjustment expense reserves to cover future losses; changes in federal or state tax laws; ability to realize deferred tax assets; ability to accurately underwrite risks and charge adequate premium; ability to obtain reinsurance or collect from reinsurers; losses in excess of reinsurance limits; extensive regulation and legislative changes; reliance on subsidiaries to satisfy obligations; downgrade in financial strength rating by A.M. Best; changes in interest rates; investments subject to credit, prepayment and other risks; geographic concentration; reliance on independent insurance agents and brokers; insufficient reserve for doubtful accounts; litigation; enforceability of exclusions and limitations in policies; reliance on information technology systems; ability to prevent or detect acts of fraud with disclosure controls and procedures; change in general economic conditions; dependence on key personnel; ability to attract, develop and retain employees and maintain appropriate staffing levels; insolvency, financial difficulties, or default in performance of obligations by parties with significant contracts or relationships; ability to effectively compete; maximization of long-term value and no focus on short-term earnings expectations; control by a small number of shareholders; failure to maintain effective system of internal controls; and difficulty in effecting a change of control or sale of any subsidiaries. Except as may be required by law, the Company undertakes no obligation to update any forward-looking statements to reflect new information or events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

    UNICO AMERICAN CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ($ in thousands)   December 31 December 31   2017     2016 (Unaudited)

ASSETS

Investments

Available-for-sale:

Fixed maturities, at fair value (amortized cost: December 31, 2017 $58,153; December 31, 2016 $19,092) $ 57,849 $ 19,104 Held-to-maturity: Fixed maturities, at amortized cost (fair value: December 31, 2017 $28,098; December 31, 2016 $61,280) 28,098 61,280 Short-term investments, at fair value   10,440     10,205 Total Investments 96,387 90,589 Cash and restricted cash 774 13,497 Accrued investment income 491 186 Receivables, net 6,006 6,008 Reinsurance recoverable: Paid losses and loss adjustment expenses 127 261 Unpaid losses and loss adjustment expenses 8,394 9,521 Deferred policy acquisition costs 4,163 4,432 Property and equipment, net 10,015 10,283 Deferred income taxes 3,381 1,177 Other assets   561     2,268 Total Assets $ 130,299   $ 138,222  

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

Unpaid losses and loss adjustment expenses $ 49,077 $ 47,056 Unearned premiums 18,768 19,375 Advance premium and premium deposits 208 224 Accrued expenses and other liabilities   2,301     2,661 Total Liabilities $ 70,354   $ 69,316   Commitments and contingencies  

STOCKHOLDERS' EQUITY

Common stock, no par – authorized 10,000,000 shares; issued and outstanding shares 5,307,133 at December 31, 2017 and 2016 $ 3,773 $ 3,761 Accumulated other comprehensive (loss) income (240 ) 8 Retained earnings   56,412     65,137 Total Stockholders’ Equity $ 59,945   $ 68,906   Total Liabilities and Stockholders' Equity $ 130,299   $ 138,222       UNICO AMERICAN CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS ($ in thousands, except per share)   Three Months Ended Twelve Months Ended December 31 December 31   2017       2016   2017       2016   (Unaudited) (Unaudited) (Unaudited)

REVENUES

Insurance company operation:

Net premium earned $ 8,034 $ 8,085 $ 32,343 $ 31,356 Investment income 505 222 1,290 881 Net realized investment gains (losses) - - 1 (1 ) Other income   94     16   338     218   Total Insurance Company Revenues 8,633 8,323 33,972 32,454   Other insurance operations: Gross commissions and fees 646 675 2,744 2,738 Investment income 1 - 1 - Finance fees earned 17 18 75 69 Other income   -     1   -     7   Total Revenues   9,297     9,017   36,792     35,268    

EXPENSES

Losses and loss adjustment expenses 6,139 4,845 30,491 22,827 Policy acquisition costs 1,521 1,753 6,464 6,895 Salaries and employee benefits 1,309 946 5,844 4,926 Commissions to agents/brokers 39 40 166 162 Other operating expenses   1,115     519   3,707     2,572   Total Expenses   10,123     8,103   46,672     37,382     Income (loss) before taxes (826 ) 914 (9,880 ) (2,114 ) Income tax expense (benefit)   1,950     317   (1,155 )   (710 ) Net Income (loss) $ (2,776 ) $ 597 $ (8,725 ) $ (1,404 )      

PER SHARE DATA:

Basic Earnings (loss) per share $ (0.52 ) $ 0.11 $ (1.64 ) $ (0.26 ) Weighted average shares 5,307,133 5,307,133 5,307,133 5,307,694 Diluted Earnings (loss) per share $ (0.52 ) $ 0.11 $ (1.64 ) $ (0.26 ) Weighted average shares 5,307,133 5,307,837 5,307,133 5,307,694     UNICO AMERICAN CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS ($ in thousands)   Twelve Months Ended December 31   2017       2016   (Unaudited) Cash flows from operating activities: Net loss $ (8,725 ) $ (1,404 ) Adjustments to reconcile net loss to net cash from operations: Depreciation and amortization 518 483 Bond amortization, net (664 ) (16 ) Non-cash stock based compensation 12 23 Net realized investment (gains) losses (1 ) 1 Bad debt expense 16 6 Changes in assets and liabilities: Net receivables and accrued investment income (319 ) (609 ) Reinsurance recoverable 1,261 606 Deferred policy acquisition costs 269 (199 ) Other assets 400 297 Unpaid losses and loss adjustment expenses 2,021 (2,038 ) Unearned premiums (607 ) 1,296 Advance premium and premium deposits (16 ) 12 Accrued expenses and other liabilities (360 ) 218 Income taxes current/deferred   (828 )   (85 ) Net Cash Used by Operating Activities   (7,023 )   (1,409 )   Cash flows from investing activities: Purchase of fixed maturity investments (60,292 ) (16,772 ) Proceeds from maturity of fixed maturity investments 53,936 17,873 Proceeds from sale of fixed maturity investments 1,142 745 Net (increase) decrease in short-term investments (236 ) 5,436 Additions to property and equipment   (250 )   (545 ) Net Cash (Used) Provided by Investing Activities   (5,700 )   6,737     Cash flows from financing activities: Repurchase of common stock   -     (90 ) Net Cash Used by Financing Activities   -     (90 )   Net (decrease) increase in cash and restricted cash (12,723 ) 5,238 Cash and restricted cash at beginning of period   13,497     8,259   Cash and Restricted Cash at End of Period $ 774   $ 13,497     Supplemental Cash Flow Information Cash paid during the period for: Interest - - Income taxes $ 9 $ 9  

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Unico American CorporationMichael BudnitskyChief Financial Officer818-591-9800