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21st Century Holding Co. (NASDAQ:TCHC) goes down after earnings annoucement

Contributed by: Gediminas J.
Date: Nov 4, 2008

It seems things didn't go to well for 21st Century Holding Co. (NASDAQ:TCHC, TCHC message board) . The company has recently paid out dividends and their stock had been on a rally for the past week. What hit the price down in the last trading session was the company's quarterly results announcement.

The company reported their operating results on September 30, 2008. Their net loss for the period totaled $1.5 million or $0.19 per share. This was a truly adverse change compared to net income of $1.8 million for the same period a year ago. Such an outlook was mostly caused by over $3 million in pretax investment loss. The company reported total revenue of $16 million with more than 46% decrease compared to the same period a year ago.

Michael H. Braun, CEO of 21st Century Holding, remained optimistic about the company's future outlook: "While our strategy of managing the Company for long term success has had a negative impact on premiums written in the short term, we believe our prudent philosophy has the Company poised to create significant shareholder value in the coming quarters."

"While we have experienced investment write downs during the first three quarters, we believe that, based on the current construction of our investment portfolios, the risk of future write downs has been reduced. The Company's current portfolio asset allocation is as follows: 42% in cash and cash equivalents, 57% in fixed income instruments and 1% in equities. Further, the construction of the fixed income portfolio consists of 71% government, 18% municipal, 5% corporate and 6% in other."

Mr. Braun also stressed that the company is debt free and plans to continue with their current dividend policy despite worsened financial situation.

The company's stock lost nearly 11% right after the announcement was made. Seeing as the price didn't stay on the downtrend, investors should expect it to remain without further sharp drop. However, this announcement will surely interfere with the short term uptrend the stock was on.

Reference:

http://www.21stcenturyholding.com/

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