Fortegra Financial Corp

CIK:0001495925|SEC Filings

Earnings Per Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share



The following table details the earnings per share calculation:	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2014			2013			2014			2013
Numerator: (for both basic and diluted earnings per share)
Income from continuing operations before non-controlling interests	$	3,860		$	2,486		$	11,497		$	7,955
Less: net income (loss) attributable to non-controlling interests	230			(135		)	1,693			868
Net income from continuing operations - net of tax	3,630			2,621			9,804			7,087
Discontinued operations - net of tax	(42		)	601			(42		)	3,070
Net income attributable to Fortegra Financial Corporation	$	3,588		$	3,222		$	9,762		$	10,157

Denominator:
Total weighted average basic common shares outstanding	19,774,263			19,405,597			19,723,995			19,500,430
Effect of dilutive stock options and restricted stock awards	851,432			998,911			804,057			1,030,692
Total weighted average diluted common shares outstanding	20,625,695			20,404,508			20,528,052			20,531,122

Earnings per share - Basic:
Net income from continuing operations - net of tax	$	0.18		$	0.14		$	0.50		$	0.36
Discontinued operations - net of tax	—			0.03			—			0.16
Net income attributable to Fortegra Financial Corporation	$	0.18		$	0.17		$	0.50		$	0.52

Earnings per share - Diluted:
Net income from continuing operations - net of tax	$	0.18		$	0.13		$	0.48		$	0.35
Discontinued operations - net of tax	—			0.03			—			0.15
Net income attributable to Fortegra Financial Corporation	$	0.18		$	0.16		$	0.48		$	0.50

Weighted average anti-dilutive common shares	158,268			809,870			489,331			762,081

Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Operating Activities:
Net income attributable to Fortegra Financial Corporation	$ 9,762	$ 10,157
Adjustments to reconcile net income to net cash flows (used in) provided by operating activities:
Change in deferred acquisition costs	10,329	(8,209)
Depreciation and amortization	7,782	9,661
Deferred income tax (benefit) - continuing operations	10,810	(1,610)
Deferred income tax expense - discontinued operations	0	300
Net realized investment gains	(6)	(2,043)
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax	(42)	0
Gain on sale of subsidiary	0	402
Loss on note receivable	1,317	0
Stock-based compensation expense	872	1,033
Direct stock awards to employees	1	29
Amortization of premiums and accretion of discounts on investments	1,347	1,097
Non-controlling interests	1,693	868
Change in allowance for doubtful accounts	(159)	(118)
Changes in operating assets and liabilities, net of the effects of acquisitions and dispositions:
Accrued investment income	(149)	287
Accounts and premiums receivable, net	(12,549)	(5,366)
Other receivables	1,249	(22,716)
Reinsurance receivables	(26,075)	(7,647)
Income taxes receivable	(8,728)	2,919
Other assets	(2,276)	(1,395)
Unpaid claims	7,695	264
Unearned premiums	25,968	13,771
Policyholder account balances	(2,008)	(1,620)
Accrued expenses, accounts payable and other liabilities	(1,255)	18,942
Income taxes payable	(2,842)	222
Deferred revenue	(14,179)	14,145
Change in liabilities of discontinued operations	791
Change in liabilities of discontinued operations	(7,743)	0
Net cash flows provided by operating activities	1,689	22,569
Investing activities:
Proceeds from maturities, calls and prepayments of available-for-sale investments	20,653	7,963
Proceeds from sales of available-for-sale investments	3,805	54,663
Net change in short-term investments	0	251
Purchases of available-for-sale investments	(50,010)	(78,739)
Purchases of property and equipment	(1,900)	(2,971)
Net paid for acquisitions of subsidiaries, net of cash received	20	(3,112)
Sale of subsidiaries, net of cash paid	0	2,180
Net (issuance) from notes receivable	(8,789)	0
Net proceeds from notes receivable	0	(663)
Net proceeds from related party note receivable	0	6,135
Change in restricted cash	9,714	2,350
Net cash flows (used in) investing activities	(26,507)	(11,943)
Financing activities:
Payments on notes payable	(71,139)	(19,188)
Proceeds from notes payable	78,039	12,500
Net proceeds from exercise of stock options	0	49
Purchase of treasury stock	13	1,372
Net proceeds received from stock issued in the Employee Stock Purchase Plan	113	152
Distributions to non-controlling interest partners	(1,380)	(720)
Dividends paid to non-controlling interests	0	(43)
Net cash flows provided by (used in) financing activities	5,620	(8,622)
Net (decrease) increase in cash and cash equivalents	(19,198)	2,004
Cash and cash equivalents, beginning of period	21,681	15,209
Cash and cash equivalents, end of period	$ 2,483	$ 17,213

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Investments:
Fixed maturity securities available-for-sale, at fair value (amortized cost of $157,497 at September 30, 2014 and $133,288 at December 31, 2013)	$ 157,735	$ 131,751
Equity securities available-for-sale, at fair value (cost of $7,081 at September 30, 2014 and December 31, 2013, respectively)	6,947	6,198
Short-term investments	871	871
Total investments	165,553	138,820
Cash and cash equivalents	2,483	21,681
Restricted cash	7,579	17,293
Accrued investment income	1,259	1,175
Notes receivable, net	19,421	11,920
Accounts and premiums receivable, net	31,444	18,702
Other receivables	32,048	33,409
Reinsurance receivables	241,159	215,084
Deferred acquisition costs	67,713	78,042
Property and equipment, net	12,400	14,332
Goodwill	73,701	73,701
Other intangible assets, net	45,221	49,173
Income Taxes Receivable	8,728
Other assets	8,584	6,307
Assets of discontinued operations	0	791
Total assets	717,293	680,430
Liabilities:
Unpaid claims	42,427	34,732
Unearned premiums	282,348	256,380
Policyholder account balances	21,478	23,486
Accrued expenses, accounts payable and other liabilities	51,249	53,035
Income taxes payable	0	2,842
Deferred revenue	62,748	76,927
Notes payable	10,173	3,273
Preferred trust securities	35,000	35,000
Deferred income taxes, net	31,606	19,659
Liabilities of discontinued operations	860	8,603
Total liabilities	537,889	513,937
Commitments and Contingencies (Note 17)
Stockholders' Equity:
Preferred stock, par value $0.01; 10,000,000 shares authorized; none issued	0	0
Common stock, par value $0.01; 150,000,000 shares authorized; 21,281,415 and 20,912,853 shares issued at September 30, 2014 and December 31, 2013, respectively, including shares in treasury	213	209
Treasury stock, at cost; 1,225,815 at September 30, 2014 and 1,224,182 shares at December 31, 2013.	(8,027)	(8,014)
Additional paid-in capital	100,380	99,398
Accumulated other comprehensive loss, net of tax	(1,558)	(3,665)
Retained earnings	82,294	72,532
Stockholders' equity before non-controlling interests	173,302	160,460
Non-controlling interests	6,102	6,033
Total stockholders' equity	179,404	166,493
Total liabilities and stockholders' equity	$ 717,293	$ 680,430