It didn't take UniCare Financial long to get a listing on Wall Street.
Less than two years after it went public, the Irvine holding company for a state workers compensation insurer made it to one of the major exchanges in New York. Starting today, UniCare's stock will be traded on the American Stock Exchange.
The company, whose UniCare Insurance subsidiary limits its underwriting to large accounts, said it hopes that the listing will increase visibility for the company and reduce the spread that exists on over-the-counter trading. The spread is the difference between the most a buyer will pay and the least a seller will accept for a share.
"We hope to get greater visibility, more exposure, on Amex," said Russell E. Leatherby, a director and general counsel of the firm.
The exchange's rules also provide smoother procedures for subsequent offerings, something UniCare is always thinking about, Leatherby said, but he quickly noted that no firm plans have been made for a subsequent offering.
Leatherby and securities brokers said it was unusual for a company to gain a listing on one of the major exchanges within two years of going public.
In October, 1986, the 9-year-old firm raised $10.5 million in an initial offering for 1 million new shares of common stock, representing 25% of the company's stock.
The firm remains in the control of its founder, longtime county businessman Ralph W. Leatherby, the company's chairman and the director's father. The elder Leatherby owns 60% of the stock.
No UniCare stock was traded over the counter Wednesday, but the price was listed at $11.25 a share bid and $12 a share asked. That means buyers would pay $12 a share but could sell it for just $11.25 a share. The 75-cents-a-share difference, or spread, is considered unusually large and can dampen investor enthusiasm, the younger Leatherby said.
UniCare also reported second-quarter net income of $1.5 million Wednesday, a 36% increase over $1.1 million earned in last year's second quarter. Revenues for the quarter rose 6%, to $13.3 million this year from $12.6 million last year.
For the first six months, UniCare posted net income of $2.9 million, a 32% increase over $2.2 million earned in the same period last year. Revenues for the period rose 6%, to $26.7 million this year from $25.1 million last year.