NYSE$HRTG

Heritage Insurance Holdings · Q4 2022 earnings

Q4 2022 earnings · · Investor relations

Briefing

Reported a net income increase and focused on strategic profitability initiatives.

Heritage Insurance Holdings reported a net income of $12.5 million for Q4 2022, a significant improvement compared to the net loss of $49.2 million in the prior year quarter. The company's strategic focus on profitability initiatives, including rate adequacy and selective underwriting, contributed to the positive results. Premiums-in-force increased by 9.6% year-over-year, driven by rate increases, while policies in-force decreased by 7.2%.

  • Net income was $12.5 million, or $0.48 per diluted share, compared to a net loss of $49.2 million in the prior year quarter.
  • Non-GAAP adjusted net income was $12.5 million, or $0.48 per diluted share, up from $11.3 million, or $0.41 per diluted share in the prior year quarter.
  • Gross premiums written increased by 15.5% to $322.1 million, from $278.8 million in the prior year quarter.
  • The net combined ratio increased to 96.1%, up 2.9 points from 93.2% in the prior year quarter.

Headline financials

Total Revenue

$175M

Previous: $167M+4.7%
EPS (adj)

$0.48

Previous: $0.41+17.1%
Premiums in force

$1.3B

Previous: $1.2B+8.3%
Capital Expenditures

-$3.24M

Previous: $115K-2915.7%
Free Cash Flow

-$15.5M

Previous: -$10.1M-53.3%
Net Income

$12.5M

Previous: -$49.2M+125.4%
Operating Income

$14.9M

Previous: -$42.9M+134.8%
Gross Profit

$115M

Previous: $167M-31.1%
Cash & Equivalents

$281M

Previous: $359M-21.8%
Total Assets

$2.39B

Previous: $1.98B+20.8%
Stock-Based Comp

$501K

Previous: $295K+69.8%

Revenue & EPS history

Heritage Insurance · Revenue · Quarterly

$175M

Q4 2022+4.7%vs Q4 2021
Beat estimate in 9 of 15 quarters(60%)
ActualEstimate

Forward guidance

Company expects a positive impact on their future financial results, including focus on profitability, exposure management, rate adequacy and their ability to create value for their shareholders.

Tailwinds

  • Strategic initiatives are expected to have a positive impact on future financial results.
  • Focus on profitability and exposure management.
  • Continued increase in average premium per policy.
  • Expected benefits from excess and surplus insurance products.
  • Ability to regain value in the Company and achieve target return on equity.

Headwinds

  • Impact of COVID-19 pandemic on the economy and demand.
  • Inflation and changes in economic conditions.
  • Impact of macroeconomic and geopolitical conditions.
  • The cost and availability of reinsurance coverage.
  • Potential regulatory developments and litigation outcomes.

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 2022

Historical avgQ4 2022

+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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