NYSE$HRTG

Heritage Insurance Holdings · Q4 2019 earnings

Q4 2019 earnings · · Investor relations

Briefing

Heritage reported an increase in net income and gross premiums written, with growth observed across all states and lines of business.

Heritage Insurance Holdings reported a net income of $12.8 million for Q4 2019, an increase from $3.9 million in the prior year quarter. Gross premiums written also rose to $235.4 million, reflecting growth in both Florida and other states.

  • Net income for the quarter was $12.8 million, or $0.44 per diluted share.
  • Book value per share increased to $15.66, up 8.5% from year-end 2018.
  • Gross premiums written were $235.4 million, up 6.2% year-over-year, including 9.4% growth outside Florida and 3.5% growth in Florida.
  • Percentage of litigated non-hurricane claims stemming from Tri-County, Florida declined by 830 basis points year-over-year.

Headline financials

Total Revenue

$131M

Previous: $119M+10.5%
EPS (adj)

$0.44

Previous: $0.15+193.3%
Gross premiums written growth

6.2%

Previous: 0.0%
Ceded premium ratio

44.0%

Previous: 49.3%-10.8%
Net loss ratio

51.0%

Previous: 50.3%+1.4%
Net expense ratio

38.3%

Previous: 36.1%+6.1%
Net combined ratio

89.3%

Previous: 86.4%+3.4%
Capital Expenditures

$51K

Previous: $856K-94.0%
Free Cash Flow

$3.45M

Previous: $34.2M-89.9%
Net Income

$12.8M

Previous: $3.93M+226.3%
Operating Income

$21.5M

Previous: $22.4M-3.8%
Gross Profit

$139M

Previous: $125M+10.9%
Cash & Equivalents

$268M

Previous: $250M+7.3%
Total Assets

$1.94B

Previous: $1.77B+9.7%
Stock-Based Comp

$1.35M

Previous: $1.34M+0.1%

Revenue & EPS history

Heritage Insurance · Revenue · Quarterly

$131M

Q4 2019+10.5%vs Q4 2018
Beat estimate in 8 of 16 quarters(50%)
ActualEstimate

Forward guidance

The company anticipates solid organic growth in 2020 and expects positive impacts from pricing and underwriting steps. They also foresee potential reinsurance rate increases and are continuing their share repurchase program.

Tailwinds

  • Well-positioned for solid organic growth in 2020
  • Impact of steps taken regarding pricing and underwriting
  • Expected positive impact of rates on the P&L
  • Trends with respect to growth, pricing and reserves
  • Share repurchase program

Headwinds

  • Ability to comply with obligations under credit facilities
  • Success of the Company’s marketing initiatives
  • Impact of new federal and state regulations
  • Costs and collectability of reinsurance
  • Weather conditions including severity and frequency of storms

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q4 2019

Historical avgQ4 2019

+3.3%

Avg return

Earnings day

+7.4%

Avg return

5 days after

+9.5%

Avg return

30 days after

66%

35 / 53 earnings

Positive

+37.8%

Q2 2022

Best reaction

-21.9%

Q1 2024

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-20.0%-21.6%-21.0%
Q4 2025-0.1%+5.0%-1.0%
Q3 2025+12.7%+19.3%+8.0%
Q1 2025+23.1%+27.0%+26.3%
Q4 2024+1.0%+7.7%+36.6%
Q3 2024+6.6%+13.4%+11.2%
Q2 2024+2.1%+42.5%+124.4%
Q1 2024-21.9%-19.5%-16.7%
Q4 2023+28.2%+17.6%+41.8%
Q3 2023+13.5%+24.5%+43.9%
Q2 2023+8.0%+16.2%-0.2%
Q1 2023+10.6%+34.4%+41.2%
Q4 2022+36.8%+43.2%+15.8%
Q3 2022-20.0%-15.4%-8.0%
Q2 2022+37.8%+24.4%+6.7%
Q1 2022-9.5%-22.1%-11.2%
Q4 2021+16.9%+14.7%+17.5%
Q3 2021-3.7%-6.5%-5.6%
Q2 2021+3.4%+6.9%-4.7%
Q1 2021-4.4%+0.3%-7.9%
Q4 2020+1.7%+10.4%+9.6%
Q3 2020+3.1%-4.0%+9.0%
Q2 2020+7.2%+14.2%+10.0%
Q1 2020+3.4%+11.0%+19.2%
Q4 2019-6.0%-1.1%-15.2%
Q3 2019+12.0%+5.8%-0.2%
Q2 2019+3.5%+2.5%-2.5%
Q1 2019+4.2%+9.7%+15.1%
Q4 2018+1.3%-7.6%-3.0%
Q3 2018+6.7%+13.8%+13.9%
Q2 2018-9.6%-9.7%-11.8%
Q1 2018+5.9%+12.2%+10.7%
Q4 2017+2.9%+2.1%-6.3%
Q3 2017+2.6%+5.2%+12.2%
Q2 2017+6.1%-8.1%-24.4%
Q1 2017+7.9%+3.5%+7.3%
Q4 2016-8.9%-12.0%-19.4%
Q3 2016+11.6%+19.8%+34.7%
Q2 2016+13.8%+10.6%+13.8%
Q1 2016-2.6%
Q4 2015-11.7%
Q3 2015+4.9%
Q2 2015-13.4%
Q1 2014-0.9%
Q1 2015+1.4%
Q4 2012-1.1%
Q3 2013-1.1%
Q1 2013-1.1%
Q4 2014+0.8%
Q3 2014+5.4%
Q2 2013+2.1%
Q4 2013+2.1%
Q2 2014-0.2%

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