California-based PAULA Financial announced net income for the second quarter of 2002 of $0.01 per share compared to $0.04 per share for the 2001 period. For the six months ended June 30, 2002, the Company had net income of $0.04 per share compared to $0.06 per share for the 2001 period.
Total revenue for the first six months of 2002 was $10.6 million compared to $30.7 million for the 2001 period. Total pre-tax income for the first six months of 2002 was $465,000 compared to $425,000 in 2001. Weighted average shares outstanding were 6.1 million in the 2002 period compared to 5.4 million for the 2001 period (the result of a restricted stock program implemented in the second quarter of 2001).
As previously reported, the company’s underwriting operation, PAULA Insurance Company (“PICO”) is being liquidated, but is included in the 2001 comparative results. For the six months ended June 30, 2001, PICO contributed $0.09 per share to the company’s consolidated net income of $0.06 per share and ($6.88) for all of 2001. Operating results by segment for the six months ended June 30, 2002 and 2001 are included in the attachments to this press release. All 2002 revenue is generated by commission and service fees businesses. The company has no risk revenue exposure beginning Jan. 1, 2002 and has no plans to re- enter the risk underwriting business at this time.
The agency business, Pan American Underwriters, continued its pattern of profitability in the first six months of 2002. Jeff Snider, Chairman and CEO, observed, “The agency was very focused in the second quarter on remarketing its customers who still had PAULA Insurance Company policies. The results were excellent as we found competitively priced coverage for more than 92 percent of our customers at commission levels on equal or better terms. The exit from PAULA Insurance is now complete.
“The agency also renewed 100 percent of its agribusiness safety group endorsements, a clear signal that despite market conditions and our own transition out of the risk business, we are continuing to meet customer needs. New business volume in July is ahead of expectation in group medical, crop insurance and commercial package lines in addition to workers’ compensation sales. These results validate my belief that now is a great time to be in the agency business.”
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