AMERISAFE Announces Redemption of All Outstanding Convertible Preferred Stock
DERIDDER, La., Nov. 30 /PRNewswire-FirstCall/ — AMERISAFE, Inc. (Nasdaq: AMSF), a specialty writer of high hazard workers’ compensation insurance, today announced that it will redeem all 250,000 outstanding shares of Series C and Series D Convertible Preferred Stock, effective December 31, 2009. The redemption price is $103.50 per preferred share, or a total of $25,875,000. The Company will use available cash to fund the redemption.
At any time prior to the redemption date, preferred shareholders are entitled to convert their shares into common stock. The 250,000 outstanding shares of preferred stock are convertible into 1,214,770 common shares. The redemption provides for a cash payment equivalent to $21.30 per common share. Given the recent trading range of the Company’s common stock, the Company expects the preferred shareholders to accept the cash redemption price rather than convert into common stock.
C. Allen Bradley, Jr., AMERISAFE’s Chairman and CEO, commented, “The Company’s book value has more than doubled since our IPO in November 2005. We believe that redeeming the outstanding preferred stock at this time is advantageous to our common shareholders given AMERISAFE’s capital strength and consistent operating performance.”
Janelle Frost, AMERISAFE’s Chief Financial Officer, added, “Redeeming the outstanding preferred stock has an effect similar to repurchasing 1,214,770 common shares. The redemption is beneficial for three principal reasons: (1) the redemption is accretive to both earnings per share and return on equity in 2010 and later years; (2) the redemption provides greater financial flexibility by eliminating the existing prohibition on paying cash dividends and repurchasing common stock without preferred shareholder consent; and (3) the redemption simplifies our capital structure and financial reporting. Because of its terms, the preferred stock is not treated as equity on our balance sheet, and further requires us to report earnings per share by the ‘two-class’ method. The redemption will make our reporting more straightforward.”
About AMERISAFE
AMERISAFE, Inc. is a specialty provider of workers’ compensation insurance focused on small to mid-sized employers engaged in hazardous industries, principally construction, trucking, agriculture, logging, oil and gas and maritime. AMERISAFE actively markets workers’ compensation insurance in 30 states and the District of Columbia. The Company’s financial strength rating is “A-” (Excellent) by A.M. Best.
Statements made in this press release that are not historical facts, including statements accompanied by words such as “will,” “believe,” “anticipate,” “expect,” “estimate,” or similar words are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding AMERISAFE’s plans and performance. These statements are based on management’s estimates, assumptions and projections as of the date of this release and are not guarantees of future performance. Actual results may differ materially from the results expressed or implied in these statements as the results of risks, uncertainties and other factors including, AMERISAFE’s ability to sustain or improve profitability allowing the redemption of the convertible preferred stock to be accretive to earnings per share and return on equity, and other factors set forth in the Company’s filings with the Securities and Exchange Commission, including AMERISAFE’s Annual Report on Form 10-K for the year ended December 31, 2008. AMERISAFE cautions you not to place undue reliance on the forward-looking statements contained in this release. AMERISAFE does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release.
Contacts: Janelle Frost, EVP & CFO
AMERISAFE, Inc.
337-463-9052
Ken Dennard, Managing Partner
Karen Roan, Sr.VP
DRG&E / 713-529-6600
SOURCE AMERISAFE, Inc.