UniCare Financial Corp.'s founder, sensing a calmer stock market, said Thursday that he is renewing his effort to sell half of his 60% stake in the workers' compensation company.
UniCare said it has filed an amended statement with the Securities and Exchange Commission to sell 1.5 million shares of common stock owned by Ralph W. Leatherby, the firm's chairman emeritus.
He had dropped a planned sale of his stock in August after the Iraqi invasion of Kuwait sent stock prices tumbling on Wall Street.
The amended statement also included the company's 1990 financial results, which showed net income of $8.9 million last year, up 19% from $7.5 million in 1989. Revenue grew 33% to $97.2 million last year from $73 million the previous year.
"In the face of an economic slowdown in California, UniCare Financial performed exceptionally well," said Russell E. Leatherby, the company's chairman, president and chief executive. "Much credit must be given to our long-established commitment to accident prevention and claims management."
UniCare's ratio of losses to premiums and its ratio of expenses to premiums--key industry indicators of a company's health--were both favorable, said Russell Leatherby, who is Ralph Leatherby's son.
The company's fourth-quarter net income was $2.5 million, a 28% increase over $1.96 million for the previous year. Quarterly revenue rose 26% to $26.5 million last year from $21 million the previous year.
UniCare's stock dropped more than $2 a share to a low of $11.125 after Iraq's invasion of Kuwait but has since rebounded. It closed Thursday at $15, down 25 cents a share on the American Stock Exchange.
Russell Leatherby said his father has decided to sell about half of his nearly 3.3 million shares because the market price is attractive again.
The public offering would solve two problems, the younger Leatherby said. It would help his father with estate planning and would spur more public interest in the company's stock. In addition, the offering would not dilute earnings because existing stock is being sold.
The 12-year-old company has long wooed industry analysts in an effort to stimulate more trading and a higher stock price, but has not had great success.
Part of the problem has been that Ralph Leatherby owns a majority interest and, with other insider ownership, provides little remaining stock for open-market trading. Russell Leatherby, who took over the company's reins last year, owns only a 1.2% stake.
He would not say whether he plans to buy any of his father's stock. He did say, though, that the Leatherby family would probably remain in control of the company even if it doesn't own a majority stake any longer.
The company hopes that the offering will go into effect within a month.