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Mixed bag on ProAssurance, Donegal, Select Medical earnings

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Fourth-quarter and year-end earnings are a mixed bag today for locally based or active companies, with Select Medical down from 2012 but ProAssurance and Donegal Group both reporting higher net yearly income than last year.

Net income for Alabama-based ProAssurance, which recently purchased Lancaster County-based Eastern Insurance Holdings Inc., was down for the quarter and but up for the year ending Dec. 31, 2013.

Net Q4 income$101.26 million$70.86 million
Net yearly income$275.47 million$297.52 million
Gross yearly premiums written$536.43 million$567.54 million

"Operating cash flow declined by $15.3 million in the quarter as compared to fourth quarter 2012," the company said in a news release. "Approximately $4 million of the decline is attributable to the acquisition of Eastern Insurance Holdings, Inc. (Eastern) and the establishment of Lloyd's Syndicate 1729. The $52.6 million decline in cash flow for full year 2013 reflects payment of transaction-related costs for acquisitions completed in 2012 and 2013, as well as costs for our establishment of Syndicate 1729, lower investment income receipts, and an increase in tax payments resulting from a protective tax payment."

ProAssurance trades its shares on the New York Stock Exchange under the ticker symbol PRA.

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Net income for East Donegal Township-based Donegal Group Inc. was up for the quarter and year ended Dec. 31, 2013:

Net Q4 income$6.22 million$9.56 million
Net yearly income$23.09 million$26.32 million
Yearly net personal premiums written$308.32 million$318.69 million
Yearly net commercial premiums written$188.12 million$214.73 million

"Donegal Group ended 2013 on a positive note, reflecting favorable market conditions that were present in our operating regions throughout the past year as well as our achievement of key milestones marking progress toward our long-term performance objectives," Donald H. Nikolaus, Donegal's president and CEO, said in a news release.

Donegal's report did not mention activist shareholder Gregory Shepard's recently dropped attempt to increase his stock ownership in the company.

Donegal Group is an insurance holding company, with the company's Class A stock trading on the Nasdaq under DGICA and the Class B stock under DGICB.

• • •

Net income for Lower Allen Township-based Select Medical Holdings Corp. was down for the quarter and year ending Dec. 31, 2013:

Net Q4 income$41.34 million$31.12 million
Net yearly income$153.89 million$123 million
Net yearly operating revenues for specialty hospitals$2,197.5 million$2,198.1 million
Net yearly operating revenues for outpatient rehabilitation$751.3 million$777.2 million

Select noted that the results reflect Medicare changes that became effective on April 1, 2013, including a 2 percent reduction in Medicare payments from the federal sequestration and an increase from 25 percent to 50 percent in the multiple procedure payment reduction for therapy services from the American Taxpayer Relief Act of 2012.

For 2014, Select expects adjusted EBITDA to be in the range of $365 million to $385 million, roughly on par with 2013's total of $372 million but below the $405 million of 2012.

On Feb. 19, Select's board authorized an extension of its $350 million common stock repurchase program until March 31, 2015. It also declared a cash dividend of 10 cents per share payable to stockholders of record as of the close of business on March 3, 2014.

The operator of acute-care hospitals, inpatient medical rehab hospitals and outpatient physical rehab centers trades its shares on the New York Stock Exchange under the ticker symbol SEM.

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