First Acceptance Corporation Reports Operating Results (FAC)

First Acceptance Corporation FAC today reported its financial results for the quarter and fiscal year ended June 30, 2010. Revenues for the three months ended June 30, 2010 were $56.0 million, compared with $61.7 million for the same period in fiscal year 2009. Income before income taxes for the three months ended June 30, 2010 was $0.9 million, compared with a loss before income taxes of $56.3 million in the same period in fiscal year 2009. The loss before income taxes for the three months ended June 30, 2009 included a goodwill impairment charge of $68.0 million, or $1.40 per share on a diluted basis. Net income for the three months ended June 30, 2010 was $0.7 million, or $0.02 per share on a diluted basis, compared with a net loss of $71.5 million, or $1.50 per share on a diluted basis, for the same period in fiscal year 2009. The net loss for the three months ended June 30, 2009 included the goodwill impairment charge and an additional charge of $10.2 million, or $0.21 per share on a diluted basis, related to the write-down of deferred tax assets. Revenues for the year ended June 30, 2010 were $223.2 million, compared with $265.5 million for the same period in fiscal year 2009. Income before income taxes for the year ended June 30, 2010 was $7.5 million, compared with a loss before income taxes of $49.9 million in the same period in fiscal year 2009. The loss before income taxes for the year ended June 30, 2009 included a goodwill impairment charge of $68.0 million, or $1.39 per share on a diluted basis. Net income for the year ended June 30, 2010 was $7.0 million, or $0.14 per share on a diluted basis, compared with a net loss of $68.3 million, or $1.43 per share on a diluted basis, for the same period in fiscal year 2009. The net loss for the year ended June 30, 2009 included the goodwill impairment charge and an additional charge of $10.2 million, or $0.20 per share on a diluted basis, related to the write-down of deferred tax assets. Premiums earned for the three months ended June 30, 2010 were $46.7 million, compared with $52.6 million for the same period in fiscal year 2009. Premiums earned for the year ended June 30, 2010 were $187.0 million, compared with $224.1 million for the same period in fiscal year 2009. These declines were primarily due to the weak economic conditions, which have caused both a decline in the number of policies written, as well as an increase in the percentage of our customers purchasing liability-only coverage. The closure of underperforming stores also contributed to the decrease in policies written and premiums earned. At June 30, 2010, the number of policies in force was 154,655, compared with 158,222 at June 30, 2009. At June 30, 2010, we operated 394 stores, compared with 418 stores at June 30, 2009. Income before income taxes for the three months ended June 30, 2010 of $0.9 million included favorable development of $1.0 million for losses occurring prior to June 30, 2009 and $0.2 million of other-than-temporary impairment charges on investments. Income before income taxes for the year ended June 30, 2010 of $7.5 million included favorable development of $11.2 million for losses occurring prior to June 30, 2009 and $1.0 million of other-than-temporary impairment charges on investments.