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Press release content from Globe Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Independence Holding Company Announces 2021 Third-Quarter and Nine-Month Results

November 9, 2021 GMT

STAMFORD, Conn., Nov. 09, 2021 (GLOBE NEWSWIRE) -- Independence Holding Company (NYSE: IHC) today reported 2021 third-quarter and nine-month results.

Financial Results

IHC reported a loss from continuing operations attributable to IHC, net of tax, of $11,512,000 or $.79 per share for the three months ended September 30, 2021 compared to a loss of $7,340,000 or $.50 per share for the three months ended September 30, 2020. Loss from continuing operations attributable to IHC, net of tax, of $23,514,000 or $1.61 per share for the nine months ended September 30, 2021 compared to a loss of $16,391,000 or $1.11 per share for the nine months ended September 30, 2020.

Net income attributable to IHC of $17,359,000 or $1.18 per share for the three months ended September 30, 2021 compared to $8,688,000 or $.59 per share, diluted, for the three months ended September 30, 2020. Net income attributable to IHC of $99,451,000 or $6.79 per share, diluted, for the nine months ended September 30, 2021 compared to $13,387,000 or $.91 per share, diluted, for the nine months ended September 30, 2020.

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The Company entered into three transactions this year for the sale of (i) all of the shares of common stock of Madison National Life Insurance Company, Inc. (“Madison National Life”) to Horace Mann Educators Corporation, (ii) all of the shares of common stock of Standard Security Life Insurance Company of New York (“Standard Security Life”) to Reliance Standard Life Insurance Company and (iii) 70% of the Company’s pet business, including all of the shares of common stock of Independence American Insurance Company and the Company’s entire interest in 85% of the common stock of PetPartners, Inc. (“PetPartners”), to Iguana Capital, Inc. (“Iguana Capital”).

The Company completed the sale of PetPartners on June 30, 2021, and results for the nine months of 2021 include a gain on the sale of PetPartners of $62,229,000 net of tax. Also included in income from discontinued operations is the operating income from Madison National Life, Standard Security Life and Independence American Insurance Company. The gain on the sales of Madison National Life, Standard Security Life, and Independence American Insurance Company will be recorded when those transactions are consummated. They are currently pending regulatory approval.

The Company has also announced that it has entered into an Agreement and Plan of Merger with Geneve Holdings, Inc. its majority stockholder. Further information regarding the terms and conditions will be contained in a Current Report on Form 8-K filed with the SEC.

Chief Executive Officer’s Comments

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Roy T. K. Thung, Chief Executive Officer, commented, “The Company is focusing on the consummation of the three sale transactions for the remainder of the year. Pro forma, including the third quarter results, and after all the transactions are closed, IHC projects that it will hold approximately $575 million in cash and investments, net of liabilities; our interest in Iguana Capital; and our health insurance agency and other assets, resulting in an estimated fully diluted book value of approximately $48.50 per share, which is calculated as if the transactions occurred and were recorded on September 30, 2021. Actual book value per share at September 30, 2021 was $38.47 as compared to $32.08 per share at December 31, 2020. These projections are based on information currently known to management and include the use of estimates and assumptions with regards to anticipated transaction costs, estimated tax rates and other potential changes.”

Mr. Thung added, “Our agency operations have been unprofitable, and we will continue to report losses from our agencies for the near term. We continue to expand our agency digital assets by enhancing our core platform, INSXcloud.com, a CMS approved Web Broker. We have expanded product offerings on the platform and have developed marketing initiatives to drive both direct and partner initiated traffic to the platform. We will continue to invest in and enhance these capabilities at our agency operations as we enter 2022 and work towards building a profitable agency operation.”

About Independence Holding Company

Independence Holding Company (NYSE: IHC), through our current subsidiaries, underwrites and distributes health, group disability and life, New York State DBL and paid family leave, and pet insurance. IHC underwrites policies in all 50 states, Washington D.C., Puerto Rico and the U.S. Virgin Islands through our three carriers: Independence American Insurance Company, Standard Security Life Insurance Company of New York (“Standard Security Life”) and Madison National Life Insurance Company, Inc. (“Madison National Life”). We also distribute products nationally through multiple channels, including our agencies, call centers, advisors, direct and affinity relationships, Web Broker, and web properties, including www.healthedeals.com; www.healthinsurance.org; www.medicareresources.org; www.petplace.com; and www.insxcloud.com. As previously announced, IHC has entered into stock purchase agreements to sell all of the issued and outstanding capital stock of Standard Security Life, Madison National Life and Independence American Holdings Corp., which includes Independence American Insurance Company and the remaining assets of IHC’s pet business, each subject to regulatory approval. To learn more, visit https://ihcgroup.com/.

Forward-looking Statements

Certain statements and information contained in this release may be considered “forward-looking statements,” such as statements relating to management’s views with respect to future events and financial performance. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements.  Potential risks and uncertainties include, but are not limited to, economic conditions in the markets in which IHC operates, new federal or state governmental regulation, IHC’s ability to effectively operate, integrate and leverage any past or future strategic acquisition, and other factors which can be found in IHC’s other news releases and filings with the Securities and Exchange Commission. IHC expressly disclaims any duty to update its forward-looking statements unless required by applicable law.

CONTACT: Loan Nisser
(646) 509-2107
www.IHCGroup.com  


INDEPENDENCE HOLDING COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
September 30, 2021
(In Thousands, Except Shares and Per Share Data)

  Three Months Ended  Nine Months Ended
  September 30,  September 30,
  2021  2020  2021  2020
REVENUES:           
Net investment income$119  $170  $430  $916 
Fee income 5,569   6,113   20,291   18,465 
Other income 873   615   1,660   1,739 
Net investment gains (losses) (48)  (53)  105   122 
            
  6,513   6,845   22,486   21,242 
            
EXPENSES:           
Selling, general and administrative expenses 21,592   16,431   53,028   43,221 
            
Loss from continuing operations before income taxes (15,079)  (9,586)  (30,542)  (21,979)
Income tax benefits (3,567)  (2,241)  (7,026)  (5,617)
            
Loss from continuing operations, net of tax (11,512)  (7,345)  (23,516)  (16,362)
            
Discontinued operations:           
Total pretax income from discontinued operations 36,383   20,295   150,376   38,790 
Income tax expense on discontinued operations 7,512   4,218   27,567   8,836 
Income from discontinued operations, net of tax 28,871   16,077   122,809   29,954 
            
Net income 17,359   8,732   99,293   13,592 
(Income) loss from nonredeemable noncontrolling interests -   5   2   (29)
(Income) loss from redeemable noncontrolling interests -   (49)  156   (176)
            
NET INCOME ATTRIBUTABLE TO IHC$17,359  $8,688  $99,451  $13,387 
            
Basic income per common share           
Loss from continuing operations$(.79) $(.50) $(1.61) $(1.11)
Income from discontinued operations 1.97   1.09   8.40   2.02 
Basic income per common share$1.18  $.59  $6.79  $.91 
            
WEIGHTED AVERAGE SHARES OUTSTANDING 14,654   14,670   14,645   14,763 
            
Diluted income per common share           
Loss from continuing operations$(.79) $(.50) $(1.61) $(1.11)
Income from discontinued operations 1.97   1.09   8.40   2.02 
Diluted income per common share$1.18  $.59  $6.79  $.91 
            
WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING 14,654   14,670   14,645   14,763 
            

As of November 9, 2021, there were 14,674,936 common shares outstanding, net of treasury shares.

INDEPENDENCE HOLDING COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)

   September 30, 2021  December 31, 2020
       
ASSETS:      
Investments:      
Securities purchased under agreements to resell $25,458  $23,962 
Fixed maturities, available-for-sale  29,070   44,003 
Other investments  2,050   1,928 
Total investments  56,578   69,893 
       
Cash and cash equivalents  7,946   17,215 
Investment in Iguana Capital, Inc.  33,475   - 
Funds held in escrow  78,263   - 
Other assets  33,975   49,475 
Assets attributable to discontinued operations  995,383   946,573 
       
TOTAL ASSETS $1,205,620  $1,083,156 
       
LIABILITIES AND EQUITY:      
LIABILITIES:      
Accounts payable, accruals and other liabilities $39,817  $28,387 
Liabilities attributable to discontinued operations  601,253   582,651 
       
TOTAL LIABILITIES  641,070   611,038 
       
Commitments and contingencies      
Redeemable noncontrolling interest  -   2,312 
       
STOCKHOLDERS’ EQUITY:      
Preferred stock (none issued)  -   - 
Common stock  18,625   18,625 
Paid-in capital  125,357   124,757 
Accumulated other comprehensive income  2,320   4,197 
Treasury stock, at cost  (77,247)  (77,088)
Retained earnings  495,498   399,273 
       
TOTAL IHC STOCKHOLDERS’ EQUITY  564,553   469,764 
NONREDEEMABLE NONCONTROLLING INTERESTS  (3)  42 
       
  TOTAL EQUITY  564,550   469,806 
       
  TOTAL LIABILITIES AND EQUITY $        1,205,620   $        1,083,156