Goran Capital Reports Results for 2000 and Plans to Divest of the Crop Insurance Operations

Apr 03, 2001, 01:00 ET from Goran Capital Inc.

    TORONTO, April 3 /PRNewswire/ -- Goran Capital Inc. (Nasdaq: GNCNF.OB)
 (Toronto: GNC), a leading nonstandard automobile and crop insurer, reported
 results for the year ending December 31, 2000 today and disclosed the
 Company's plan to divest of its crop insurance business.
     The Company reported a loss for the year 2000 of $(80,265,000) or $(13.79)
 per share as compared to a loss of $(62,373,000) or $(10.61) per share in
 1999.  Loss from continuing operations was $(63,224,000) or $(10.86) per share
 in 2000 as compared to $(41,830,000) or $(7.12) per share in 1999. Loss on
 continuing operations for 2000 includes a one-time write down of $33.5 million
 or $5.75 per share related to goodwill.
     The operating results of nonstandard automobile insurance continue to
 improve as the Company reported operating losses (before amortization,
 impairment, tax, and minority interest charges) on continuing operations of
 $(18,387,000) or $(3.15) per share for 2000 as compared to $(49,839,000) or
 $(8.48) per share for the year 1999.  The Company reported breakeven results
 for the fourth quarter of 2000 compared to operating losses of $(21,318,000)
 for the fourth quarter of 1999, or Nil and $(3.63) per share.
     Gross written premiums have decreased to $182 million in 2000 from
 $242 million in 1999, a reduction of 25%.  This reduction comes at a time
 while the Company is implementing rate increases and discontinuing writing
 business in unprofitable markets.  Loss and loss adjustment expense ratios
 have improved from 92.6% in 1999 to 78.2% for 2000.  The loss ratio has
 further improved in the fourth quarter of 2000 to 72.4%.  The Company
 continues to make significant strides reducing operating expenses.  Personnel
 counts are down to 390 from 540 as of December 31, 2000 and 1999 respectively.
     The Company has initiated a plan to divest of its crop insurance business,
 primarily underwritten through IGF Insurance Company, a subsidiary of the
 Company.  The discontinued crop segment reported losses of $16.1 million and
 $20.5 million for 2000 and 1999.  The Company plans to sell certain revenue
 producing assets related to the crop business, and management's attention will
 focus on continuing operations of nonstandard automobile insurance.  The
 Company has recorded a provision of $900,000 associated with the disposal of
 the crop segment as of December 31, 2000.
     Goran Capital, Inc. owns insurance companies principally in the
 nonstandard automobile insurance market.  Visit the Company's web sites at
 www.gorancapital.com and www.sigins.com .
     The Company will not hold a conference call to discuss year-end results.
 The Company expects to hold a conference call after the release of its first
 quarter results.
     "Forward-looking statements" as defined in the Private Securities
 Litigation Reform Act of 1995 may be included in this news release. A variety
 of factors could cause the Company's actual results to differ from the
 reported results expressed in such forward-looking statements.  Investors are
 referred to the Company's Forward Looking Statements and Certain Risks
 (Part I, Item 2 to the Company's Form 10-Q for the period ended September 30,
 2000), which statements are incorporated into this news release by reference.
 
                                 GORAN CAPITAL INC.
                         Consolidated Financial Highlights
                       (in thousands, except per share data)
 
                                    Three Months Ended     Twelve Months Ended
                                        December 31,           December 31,
                                      2000        1999       2000        1999
 
     Gross premiums written         $46,356     $57,012   $182,099    $242,140
     Net premiums written           $19,260     $56,314   $103,462    $243,762
 
     Revenue:
       Premiums earned              $28,406     $62,315   $145,532    $261,800
       Fee income                     3,103       4,618     14,239      15,335
       Net investment income          3,904       3,160     12,171      13,125
       Net realized capital gain
        (loss)                       (2,021)      1,250     (5,970)         44
       Total Revenue                 33,392      71,343    165,972     290,304
 
     Expenses:
       Loss and loss adjustment
        expenses                     20,573      78,118    113,768     242,408
       Policy acquisition and
        general and
        administrative expenses      12,820      14,543     70,591      97,735
       Expenses before
        amortization                 33,393      92,661    184,359     340,143
 
     Loss before amortization            (1)    (21,318)   (18,387)    (49,839)
 
     Amortization of intangibles
      and impairment charges         33,527         666     34,960       2,194
 
     Loss before income tax and
      minority interest             (33,528)    (21,984)   (53,347)    (52,033)
 
       Minority interest                 --      10,047         --      19,787
       Provision for income tax      (2,636)     14,658     (2,149)      1,248
       Distribution on preferred
        shares                       (2,914)      1,282    (12,026)     (8,336)
 
     Net Loss from continuing
      operations                    (33,806)    (25,313)   (63,224)    (41,830)
 
       Loss from discontinued
        operations less
        applicable taxes            (10,910)    (17,437)   (16,141)    (20,543)
       Loss on disposal of
        discontinued operations
        less applicable taxes          (900)         --       (900)         --
     Net Loss from discontinued
      operations                    (11,810)    (17,437)   (17,041)    (20,543)
 
       Net Loss                    $(45,616)   $(42,750)  $(80,265)   $(62,373)
 
     Net Loss per share from
      continuing operations -
      basic and fully diluted        $(5.80)     $(4.58)   $(10.86)     $(7.12)
     Net Loss per share from
      discontinued operations -
      basic and fully diluted        $(2.01)     $(2.68)    $(2.93)     $(3.49)
 
     Weighted average shares
      outstanding - basic and
      fully diluted               5,776,000   5,876,000  5,822,000   5,876,000
 
     Ratios - GAAP
       Loss and loss adjustment
        expenses                       72.4%      125.4%      78.2%       92.6%
       Operating expenses, net of
        billing fees                   34.2%       15.9%      38.7%       31.5%
         Combined                     106.6%      141.3%     116.9%      124.1%
 
 
                                                December 31,  December 31,
                                                    2000          1999
 
     Total Investments                            $152,120      $225,210
     Total Assets                                  309,366       393,923
     Loss and Loss Adjustment Expense
      Reserves                                     113,149       157,425
     Total Shareholders Deficit                    (71,968)      (12,887)
     Shares Outstanding                              5,822         5,876
     Book Deficit per Share                        $(12.36)       $(2.19)
 
 

SOURCE Goran Capital Inc.
    TORONTO, April 3 /PRNewswire/ -- Goran Capital Inc. (Nasdaq: GNCNF.OB)
 (Toronto: GNC), a leading nonstandard automobile and crop insurer, reported
 results for the year ending December 31, 2000 today and disclosed the
 Company's plan to divest of its crop insurance business.
     The Company reported a loss for the year 2000 of $(80,265,000) or $(13.79)
 per share as compared to a loss of $(62,373,000) or $(10.61) per share in
 1999.  Loss from continuing operations was $(63,224,000) or $(10.86) per share
 in 2000 as compared to $(41,830,000) or $(7.12) per share in 1999. Loss on
 continuing operations for 2000 includes a one-time write down of $33.5 million
 or $5.75 per share related to goodwill.
     The operating results of nonstandard automobile insurance continue to
 improve as the Company reported operating losses (before amortization,
 impairment, tax, and minority interest charges) on continuing operations of
 $(18,387,000) or $(3.15) per share for 2000 as compared to $(49,839,000) or
 $(8.48) per share for the year 1999.  The Company reported breakeven results
 for the fourth quarter of 2000 compared to operating losses of $(21,318,000)
 for the fourth quarter of 1999, or Nil and $(3.63) per share.
     Gross written premiums have decreased to $182 million in 2000 from
 $242 million in 1999, a reduction of 25%.  This reduction comes at a time
 while the Company is implementing rate increases and discontinuing writing
 business in unprofitable markets.  Loss and loss adjustment expense ratios
 have improved from 92.6% in 1999 to 78.2% for 2000.  The loss ratio has
 further improved in the fourth quarter of 2000 to 72.4%.  The Company
 continues to make significant strides reducing operating expenses.  Personnel
 counts are down to 390 from 540 as of December 31, 2000 and 1999 respectively.
     The Company has initiated a plan to divest of its crop insurance business,
 primarily underwritten through IGF Insurance Company, a subsidiary of the
 Company.  The discontinued crop segment reported losses of $16.1 million and
 $20.5 million for 2000 and 1999.  The Company plans to sell certain revenue
 producing assets related to the crop business, and management's attention will
 focus on continuing operations of nonstandard automobile insurance.  The
 Company has recorded a provision of $900,000 associated with the disposal of
 the crop segment as of December 31, 2000.
     Goran Capital, Inc. owns insurance companies principally in the
 nonstandard automobile insurance market.  Visit the Company's web sites at
 www.gorancapital.com and www.sigins.com .
     The Company will not hold a conference call to discuss year-end results.
 The Company expects to hold a conference call after the release of its first
 quarter results.
     "Forward-looking statements" as defined in the Private Securities
 Litigation Reform Act of 1995 may be included in this news release. A variety
 of factors could cause the Company's actual results to differ from the
 reported results expressed in such forward-looking statements.  Investors are
 referred to the Company's Forward Looking Statements and Certain Risks
 (Part I, Item 2 to the Company's Form 10-Q for the period ended September 30,
 2000), which statements are incorporated into this news release by reference.
 
                                 GORAN CAPITAL INC.
                         Consolidated Financial Highlights
                       (in thousands, except per share data)
 
                                    Three Months Ended     Twelve Months Ended
                                        December 31,           December 31,
                                      2000        1999       2000        1999
 
     Gross premiums written         $46,356     $57,012   $182,099    $242,140
     Net premiums written           $19,260     $56,314   $103,462    $243,762
 
     Revenue:
       Premiums earned              $28,406     $62,315   $145,532    $261,800
       Fee income                     3,103       4,618     14,239      15,335
       Net investment income          3,904       3,160     12,171      13,125
       Net realized capital gain
        (loss)                       (2,021)      1,250     (5,970)         44
       Total Revenue                 33,392      71,343    165,972     290,304
 
     Expenses:
       Loss and loss adjustment
        expenses                     20,573      78,118    113,768     242,408
       Policy acquisition and
        general and
        administrative expenses      12,820      14,543     70,591      97,735
       Expenses before
        amortization                 33,393      92,661    184,359     340,143
 
     Loss before amortization            (1)    (21,318)   (18,387)    (49,839)
 
     Amortization of intangibles
      and impairment charges         33,527         666     34,960       2,194
 
     Loss before income tax and
      minority interest             (33,528)    (21,984)   (53,347)    (52,033)
 
       Minority interest                 --      10,047         --      19,787
       Provision for income tax      (2,636)     14,658     (2,149)      1,248
       Distribution on preferred
        shares                       (2,914)      1,282    (12,026)     (8,336)
 
     Net Loss from continuing
      operations                    (33,806)    (25,313)   (63,224)    (41,830)
 
       Loss from discontinued
        operations less
        applicable taxes            (10,910)    (17,437)   (16,141)    (20,543)
       Loss on disposal of
        discontinued operations
        less applicable taxes          (900)         --       (900)         --
     Net Loss from discontinued
      operations                    (11,810)    (17,437)   (17,041)    (20,543)
 
       Net Loss                    $(45,616)   $(42,750)  $(80,265)   $(62,373)
 
     Net Loss per share from
      continuing operations -
      basic and fully diluted        $(5.80)     $(4.58)   $(10.86)     $(7.12)
     Net Loss per share from
      discontinued operations -
      basic and fully diluted        $(2.01)     $(2.68)    $(2.93)     $(3.49)
 
     Weighted average shares
      outstanding - basic and
      fully diluted               5,776,000   5,876,000  5,822,000   5,876,000
 
     Ratios - GAAP
       Loss and loss adjustment
        expenses                       72.4%      125.4%      78.2%       92.6%
       Operating expenses, net of
        billing fees                   34.2%       15.9%      38.7%       31.5%
         Combined                     106.6%      141.3%     116.9%      124.1%
 
 
                                                December 31,  December 31,
                                                    2000          1999
 
     Total Investments                            $152,120      $225,210
     Total Assets                                  309,366       393,923
     Loss and Loss Adjustment Expense
      Reserves                                     113,149       157,425
     Total Shareholders Deficit                    (71,968)      (12,887)
     Shares Outstanding                              5,822         5,876
     Book Deficit per Share                        $(12.36)       $(2.19)
 
 SOURCE  Goran Capital Inc.