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Greenlight Capital Re, Ltd. (Nasdaq:GLRE) today announced financial results for the second quarter ended June 30, 2013. Greenlight Re reported net income of $28.5 million for the second quarter of 2013 compared to a net loss of $36.1 million for the same period in 2012. Fully diluted net income per share was $0.76 compared to a net loss per share of $0.98 for the same period in 2012.
Fully diluted adjusted book value per share was $24.20 as of June 30, 2013, an 8.3% increase from $22.34 per share as of June 30, 2012.
"We are pleased to report positive performance from both our underwriting and investing operations during the quarter," said Bart Hedges, Chief Executive Officer of Greenlight Re. "While the reinsurance environment remains quite competitive, we continue to provide superior service and maintain strong relationships with our existing clients."
Financial and operating highlights for Greenlight Re for the second quarter ended June 30, 2013 include:
Gross written premiums in the second quarter of 2013 were $135.2 million, compared to $84.0 million in the second quarter of 2012; net earned premiums were $133.0 million, an increase from $130.0 million reported in the prior-year period.
Underwriting income of $11.7 million was reported for the second quarter of 2013, compared to underwriting income of $4.8 million in the second quarter of 2012.
The combined ratio for the six months ended June 30, 2013 was 98.3% compared to 100.8% for the six months ended June 30, 2012.
A net investment gain of 2.0% on Greenlight Re's investment portfolio managed by DME Advisors, LP was reported for the second quarter 2013. This compares to a net investment loss of 3.3% in the second quarter of 2012. For the first six months of 2013, net investment income was $85.4 million, representing a gain of 7.9%, compared to net investment income of $34.7 million during the comparable period in 2012 when Greenlight Re reported a 3.0% return.
"Our investment portfolio performed adequately during the quarter and side-stepped most of the June turbulence," stated David Einhorn, Chairman of the Board of Directors. "Our underwriting team is actively engaged in providing excellent service to our existing clients and remains focused on identifying new profitable opportunities."
Conference Call Details
Greenlight Re will hold a live conference call to discuss its financial results for the second quarter of 2013 on Tuesday, July 30, 2013 at 9:00 a.m. Eastern time. The conference call title is Greenlight Capital Re, Ltd. Second Quarter 2013 Earnings Call.
To participate, please dial in to the conference call at:
U.S. toll free 1-888-317-6016
International 1-412-317-6016
The conference call can also be accessed via webcast at:
http://services.choruscall.com/links/glre130730.html
A telephone replay of the call will be available from 11:00 a.m. Eastern time on July 30, 2013 until 9:00 a.m. Eastern time on August 7, 2013. The replay of the call may be accessed by dialing 1-877-344-7529 (U.S. toll free) or 1-412-317-0088 (international), access code 10030522. An audio file of the call will also be available on the Company's website, www.greenlightre.ky.
Regulation G
Fully diluted adjusted book value per share is a non-GAAP measure and represents basic adjusted book value per share combined with the impact from dilution of share based compensation including in-the-money stock options and RSUs as of any period end. Book value is adjusted by subtracting the amount of the non-controlling interest in joint venture from total shareholders' equity to calculate adjusted book value. We believe that long term growth in fully diluted adjusted book value per share is the most relevant measure of our financial performance. In addition, fully diluted adjusted book value per share may be of benefit to our investors, shareholders and other interested parties to form a basis of comparison with other companies within the reinsurance industry.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the U.S. federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the U.S. Federal securities laws. These statements involve risks and uncertainties that could cause actual results to differ materially from those contained in forward-looking statements made on behalf of the Company. These risks and uncertainties include the impact of general economic conditions and conditions affecting the insurance and reinsurance industry, the adequacy of our reserves, our ability to assess underwriting risk, trends in rates for property and casualty insurance and reinsurance, competition, investment market fluctuations, trends in insured and paid losses, catastrophes, regulatory and legal uncertainties and other factors described in our annual report on Form 10-K filed with the Securities Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About Greenlight Capital Re, Ltd.
Greenlight Re (www.greenlightre.ky) is a NASDAQ listed company with specialist property and casualty reinsurance companies based in the Cayman Islands and Ireland. Greenlight Re provides a variety of custom-tailored reinsurance solutions to the insurance, risk retention group, captive and financial marketplaces. Established in 2004, Greenlight Re selectively offers customized reinsurance solutions in markets where capacity and alternatives are limited. With a focus on deriving superior returns from both sides of the balance sheet, Greenlight Re's assets are managed according to a value-oriented equity-focused strategy that complements the Company's business goal of long-term growth in book value per share.
GREENLIGHT CAPITAL RE, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2013 and December 31, 2012
(expressed in thousands of U.S. dollars, except per share and share amounts)
June 30, 2013 December 31, 2012
(unaudited) (audited)
Assets
Investments
Debt instruments, trading, at fair value $ 8,506 $ 1,763
Equity securities, trading, at fair value 912,202 1,042,715
Other investments, at fair value 93,741 133,450
Total investments 1,014,449 1,177,928
Cash and cash equivalents 177,838 21,890
Restricted cash and cash equivalents 1,226,080 1,206,837
Financial contracts receivable, at fair value 56,117 22,744
Reinsurance balances receivable 171,849 173,221
Loss and loss adjustment expenses recoverable 20,136 34,451
Deferred acquisition costs, net 63,712 59,177
Unearned premiums ceded 2,901 3,616
Notes receivable 15,919 19,330
Other assets 6,269 3,559
Total assets $ 2,755,270 $ 2,722,753
Liabilities and equity
Liabilities
Securities sold, not yet purchased, at fair value $ 950,076 $ 908,368
Financial contracts payable, at fair value 27,345 19,637
Due to prime brokers 249,728 326,488
Loss and loss adjustment expense reserves 301,859 356,470
Unearned premium reserves 207,726 188,185
Reinsurance balances payable 35,307 35,292
Funds withheld 10,184 17,415
Other liabilities 9,906 10,488
Performance compensation payable to related party 21,923 —
Total liabilities 1,814,054 1,862,343
Equity
Preferred share capital (par value $0.10; authorized, 50,000,000; none issued) — —
Ordinary share capital (Class A: par value $0.10; authorized, 100,000,000; issued and outstanding, 30,617,161 (2012: 30,447,179): Class B: par value $0.10; authorized, 25,000,000; issued and outstanding, 6,254,949 (2012: 6,254,949)) 3,687 3,670
Additional paid-in capital 494,509 492,469
Retained earnings 410,802 325,569
Shareholders' equity attributable to shareholders 908,998 821,708
Non-controlling interest in joint venture 32,218 38,702
Total equity 941,216 860,410
Total liabilities and equity $ 2,755,270 $ 2,722,753
GREENLIGHT CAPITAL RE, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the three and six months ended June 30, 2013 and 2012
(expressed in thousands of U.S. dollars, except per share and share amounts)
Three months ended June 30 Six months ended June 30
2013 2012 2013 2012
Revenues
Gross premiums written $ 135,198 $ 83,986 $ 262,162 $ 236,206
Gross premiums ceded (2,514) 4,602 1,464 (6,393)
Net premiums written 132,684 88,588 263,626 229,813
Change in net unearned premium reserves 316 41,426 (21,155) 1,789
Net premiums earned 133,000 130,014 242,471 231,602
Net investment income (loss) 24,247 (36,896) 85,386 34,711
Other income (expense), net (488) (236) (100) (448)
Total revenues 156,759 92,882 327,757 265,865
Expenses
Loss and loss adjustment expenses incurred, net 78,345 87,337 144,623 150,644
Acquisition costs, net 42,936 37,905 84,232 73,930
General and administrative expenses 5,943 4,359 9,703 8,982
Total expenses 127,224 129,601 238,558 233,556
Income (loss) before income tax expense 29,535 (36,719) 89,199 32,309
Income tax benefit (expense) (142) 201 (450) (62)
Net income (loss) including non-controlling interest 29,393 (36,518) 88,749 32,247
Income (loss) attributable to non-controlling interest in joint venture (893) 449 (3,516) (3,183)
Net income (loss) $ 28,500 $ (36,069) $ 85,233 $ 29,064
Earnings (loss) per share
Basic $ 0.77 $ (0.98) $ 2.32 $ 0.80
Diluted $ 0.76 $ (0.98) $ 2.27 $ 0.78
Weighted average number of ordinary shares used in the determination of earnings (loss) per share
Basic 36,830,046 36,660,267 36,780,438 36,605,610
Diluted 37,537,500 36,660,267 37,481,162 37,338,484
The following table provides the ratios for the three months ended June 30, 2013 and 2012:
Six months ended June 30 Six months ended June 30
2013 2012
Frequency Severity Total Frequency Severity Total
Loss ratio 65.4% (144.2)% 59.6% 67.5% 7.9% 65.0%
Acquisition cost ratio 35.2% 19.6% 34.7% 32.6% 15.9% 31.9%
Composite ratio 100.6% (124.6)% 94.3% 100.1% 23.8% 96.9%
Internal expense ratio 3.3% 3.0%
Corporate expense ratio 0.7% 0.9%
Combined ratio 98.3% 100.8%
CONTACT: Garrett Edson
ICR
(203) 682-8331
IR@greenlightre.ky
Media:
Brian Ruby
ICR
(203) 682-8268
Brian.ruby@icrinc.com
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