First Acceptance Corp. swings to a loss in fiscal Q4
Shares of First Acceptance Corp. (NYSE: FAC) are tumbling today after the retailer, servicer and underwriter of non-standard personal automobile insurance reported late Thursday that it swung to a loss in the fourth quarter.
For the three months ended June 30, 2007, the Nashville, Tenn.-based company reported a net loss of $23.9 million, or $0.50 per share, compared with net income of $14.7 million, or $0.30 per share, for the fourth quarter in fiscal 2006.
First Acceptance attributed the loss to a loss adjustment expense ratio and adverse development of $12.6 million related to prior accident periods. The company also said a $16.9 million increase in the provision for income taxes contributed to its loss. Specifically, the company experienced a reduction in a deferred tax asset as a result of expired net operating loss carryforwards and a reduction in estimated future taxable income available to use net operating loss carryforwards expiring in fiscal years 2008 and 2009.
First Acceptance booked revenues of $92.2 million, compared with $75.2 million in fiscal 2006.
Shares of First Acceptance plummeted $2.42, or 31.23%, to $5.33 in morning trading Friday.
