Fort Worth-based GAINSCO Inc. reported net income for the third quarter 2002 of $0.2 million, which represents a net loss applicable to common shareholders of $0.6 million., and a net loss of $0.03 per common share, basic and diluted. This compares to a third quarter 2001 net loss of $4.3 million (net loss applicable to common shareholders of $5.0 million), or $0.24 per common share, basic and diluted. For the third quarter 2002 and 2001, the effects of common stock equivalents and convertible preferred stock are antidilutive due to the applicable net losses. As a result, basic loss per share and diluted loss per share are reported as the same number.
GAINSCO president and chief executive officer Glenn W. Anderson said the company is in the process of exiting the commercial lines insurance business as previously announced and plans to continue reducing its exposure to insurance losses by “redeploying excess capital to more profitable endeavors.”
Anderson added that with respect to GAINSCO’s “personal automobile business, our previously communicated negotiations to sell our Florida personal lines operation were terminated this past quarter without an agreement. Operationally, we are currently implementing another round of double-digit rate increases, along with other measures, to enhance the profit potential of this business in 2003 and related strategic options.”
He noted that the previously announced sale and transfer of GAINSCO County Mutual Insurance Company to an affiliate of Liberty Mutual Insurance Company is on track for closure in the fourth quarter.
The company’s capital base at September 30, 2002 was approximately $42.8 million. This consisted of Shareholders’ Equity at September 30, 2002 of approximately $15.3 million and redeemable preferred stock at September 30, 2002 of approximately $27.5 million.
Combined statutory policyholders’ surplus at the end of the third quarter 2002 was $40.1 million and compares to combined statutory policyholders’ surplus at June 30, 2002 of $38.7 million. The combined ratio under generally accepted accounting principles (“GAAP”) for the third quarter of 2002 was 132.4 percent, compared to a combined ratio of 144.5 percent for the 2001 third quarter. The GAAP claim ratio for the 2002 third quarter was 101.3 percent, compared with 110.9 percent for the third quarter of 2001.
Topics Profit Loss
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