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Fortegra Financial Corporation Reports Fourth Quarter and Full Year 2012 Results

Fortegra Financial Corporation Reports Fourth Quarter and Full Year 2012 Results 
Direct and Assumed Written Premiums for the Year Rose 8.5% to $367.8
Million; Net Revenues Grew 9.2% in 2012; 2012 Net Income Rose 12.3%
to $15.2 Million 
JACKSONVILLE, FL -- (Marketwire) -- 03/28/13 --  Fortegra Financial
Corporation (NYSE: FRF), an insurance services company providing
distribution and administration services and insurance-related
products, today reported results for the fourth quarter and full year
ended December 31, 2012:  


 
--  Fourth quarter net revenues, excluding realized gains, grew year over
    year from $28.3 million to $30.5 million, an increase of 7.5%. For
    2012, net revenues, excluding realized gains, grew 9.2% to $118.0
    million
    
    
--  2012 Net Income rose to $15.2 million, a 12.3% increase, compared to
    $13.5 million in the prior year period, which included $4.2 million of
    pre-tax realized gains
    
    
--  Continued strong Direct and Assumed written premiums for the full year
    of $367.8 million, an increase of 8.5% in Payment Protection
    
    
--  Diluted earnings per share (EPS) for the fourth quarter were $0.18 on
    a GAAP basis and $0.21 on a non-GAAP basis
    
    
--  Fourth quarter adjusted EBITDA reported at $10.3 million and adjusted
    EBITDA margin was 33.9%
    
    
--  Closed two strategic Warranty acquisitions on December 31, 2012,
    ProtectCELL and 4Warranty, to complement our growing Payment
    Protection segment

  
"The fourth quarter of 2012 was very productive and positioned our
company for 2013 and beyond. During 2012, our businesses produced
solid year over year growth despite a number of economic and
marketplace challenges," said Richard S. Kahlbaugh, Chairman,
President and Chief Executive Officer of Fortegra. "While the economy
and regulatory environment weighed on our clients, Tropical Storm
Sandy impacted two of our businesses, eReinsure and Motor Clubs, as
many of our major clients were closed for several weeks dealing with
the aftermath of the storm, thereby disrupting business during the
last quarter of 2012.  
"In early 2013 we took the initiative of reducing our cost structure
and realigning our administrative and customer support operations in
a
n effort to right-size and streamline service delivery. This was
done by realizing synergies in claims and premium processing and
eliminating redundancies in those functions. Consequently, as we
continue to move forward, you can expect a leaner and more agile
organization.  
"Finally, we also advanced our growth strategy with end of year
acquisitions of ProtectCELL and 4Warranty. ProtectCELL offers a
complimentary product to our payment protection platform by providing
an entry into the high growth cell phone warranty business.
Meanwhile, 4Warranty, operating as a warranty administrator, enables
Fortegra to offer the complete warranty package for our clients from
product to admin to insurance coverage. The combination of these
efforts has us excited about our 2013 prospects and the future of
Fortegra." 
Financial Updates and Results - Review  
During the fourth quarter of 2012, the Company reviewed its revenue
presentation related to the Motor Clubs division. As a result,
Service and Administrative Fee revenues within the Motor Clubs
division have been restated to present them on a gross basis with the
corresponding gross amounts of Member Benefit Claims and Commission
expenses restated in the Consolidated Statements of Income for third
quarter 2012 and prior. The effect of this correction had no impact
on net income, basic or diluted earnings per share amounts, balance
sheet values, or net cash provided by operating activities.  
Fourth Quarter Results
 Net revenues grew 7.5% to $30.5 million for
the fourth quarter of 2012, compared to $28.3 million for the
prior-year period when excluding pre-tax realized gains of $1.8
million in 2011.  
Net income for the fourth quarter 2012 was $3.8 million, or $0.18 per
diluted share, compared to $4.9 million, or $0.24 per diluted share
in the year ago period, which included the impact of $1.8 million in
pre-tax realized gains. Adjusted net income for the fourth quarter of
2012 was $4.4 million, or $0.21 per diluted share, compared to
adjusted net income of $5.4 million, or $0.26 per diluted share, for
the prior-year period, which includes the benefit of $1.8 million in
pre-tax realized gains. 
Adjusted EBITDA for the fourth quarter of 2012 was $10.3 million,
compared to $12.2 million for the fourth quarter of 2011. Adjusted
EBITDA margin for the fourth quarter of 2012 was 33.9%, compared to
40.6% for the prior-year period.  
Full Year 2012 Results
 Net revenues increased 9.2% to $118.0 million
compared to $108.1 million for the twelve months ended December 31,
2011 when excluding the impact of $4.2 million in pre-tax realized
gains in 2011.  
Net income was $15.2 million, or $0.74 per diluted share, for the
twelve months ended December 31, 2012 compared to $13.5 million, or
$0.64 per diluted share, for the prior-year period, which included
the benefit of $4.2 million of pre-tax realized gains.  
Net income also included $1.7 million and $3.0 million in one-time
charges, respectively, for the twelve months ended December 31, 2012
and December 31, 2011. Excluding these one-time items, net income for
the twelve months ended December 31, 2012 was $16.8 million, or $0.82
per diluted share, compared to $16.4 million, or $0.78 per diluted
share for the prior-year period.   
Adjusted EBITDA for the twelve months ended December 31, 2012 was
$40.6 million, compared to $39.3 million for the prior-year period.
Adjusted EBITDA margin for the twelve months ended December 31, 2012
was 34.4%, compared to 35.0% for the prior-year period. 
Segment Results 
 Payment Protection
 Net revenues for the Payment
Protection segment increased 4.1% to $17.2 million in the fourth
quarter 2012 from $16.5 million in the fourth quarter of 2011, which
included the impact of $1.8 million of pre-tax realized gains. For
the twelve months ended December 31, 2012, net revenues for the
Payment Protection segment increased 4.8% to $62.6 million compared
to $59.7 million for the prior-year period. 2011 results benefited
from $4.2 million of pre-tax realized gains. Excluding the impact of
pre-tax realized gains, growth in the fourth quarter and for the year
was 16.6% and 12.7%, respectively. The increase for the quarter as
well as the year was driven by strong premium volume growth at
 Life
of the South.  
EBITDA for the Payment Protection segment was $7.0 million for the
fourth quarter of 2012, compared to $8.9 million for the prior-year
period, which included pre-tax realized gains of $1.8 million. For
the twelve months ended December 31, 2012, EBITDA for the Payment
Protection segment remained essentially flat at $26.1 million
compared to $26.2 million in the prior year period, which benefited
from $4.2 million of pre-tax realized gains. EBITDA for the Payment
Protection segment included $1.3 million in transaction costs and
other one-time expenses for the twelve months ended December 31,
2011. Excluding these one-time expenses, adjusted EBITDA for the
Payment Protection segment was $27.5 million for the twelve months
ended December 31, 2011. 
EBITDA margin for the Payment Protection segment was 40.6% for the
fourth quarter of 2012, compared to 53.7% for the fourth quarter of
2011. For the twelve months ended December 31, 2012, EBITDA margin
for the Payment Protection segment was 41.8% compared to 43.9%, in
the prior-year period. 
Business Process Outsourcing (BPO)
 Net revenues for the BPO segment
increased 8.1% to $4.9 million for the fourth quarter of 2012,
compared to $4.5 million for the fourth quarter of 2011. For the
twelve months ended December 31, 2012, revenues for the BPO segment
increased to $18.4 million from $15.6 million, an increase of 18.2%
in the prior year
 period. The year over year increase resulted from a
$3.0 million increase in revenues from Pacific Benefits Group.  
EBITDA for the BPO segment was $1.0 million in the fourth quarter of
2012 compared to $1.1 million in the year ago period. For the twelve
months ended December 31, 2012, EBITDA for the BPO segment increased
to $4.2 million from $4.0 million a year ago, an increase of 5.3%,
primarily due to Pacific Benefits Group revenues and expense
management at Consecta.  
EBITDA margin for the BPO segment was 19.6% in the fourth quarter
2012 compared to the 23.6% experienced in the fourth quarter of 2011.
For the twelve months ended December 31, 2012, EBITDA margin for the
BPO segment was 22.8% compared to 25.6%, in the prior-year
period. 
Brokerage
 Net revenues for the Brokerage segment decreased
7.4% to $8.4 million for the fourth quarter of 2012 compared to $9.1
million in the fourth quarter of 2011, primarily due to a $1.0
million decline in fees from eReinsure offset in part by a $0.3
million increase at Bliss and Glennon. For the twelve months ended
December 31, 2012, net revenues for the Brokerage segment remained
essentially flat at $37.1 million compared to $37.0 million for the
prior-year period.  
EBITDA for the Brokerage segment remained flat at $1.6 million for
the fourth quarter of 2012 compared to $1.6 million for the fourth
quarter of 2011. For the twelve months ended December 31, 2012,
EBITDA for the Brokerage segment increased 12.5% to $8.7 million,
compared to $7.7 million for the prior-year period.   
EBITDA margin for the Brokerage segment was 19.5% for the fourth
quarter of 2012, compared to 18.1% for the prior-year period. For the
twelve months ended December 31, 2012, adjusted EBITDA margin for the
Brokerage segment was 23.5%, compared to 20.9% in the prior-year
period. 
Balance Sheet
 Total invested assets and cash amounted to $133.3
million as of December 31, 2012 compared to $127.1 million as of
December 31, 2011. Unearned premiums were $235.9 million as of
December 31, 2012 compared to $227.9 million as of December 31, 2011.
Total debt outstanding as of December 31, 2012 was $124.4 million
compared to $108.0 million as of December 31, 2011. Stockholder's
equity increased to $151.0 million as of December 31, 2012 compared
to $127.1 million as of December 31, 2011. 
Conference Call Information 
 Fortegra's executive management will
host a conference call to discuss its fourth quarter and full year
2012 results on Monday, April 1, 2013 at 8:30 a.m. Eastern Time. To
participate in the live call, dial (877) 407-3982 within the U.S., or
(201) 493-6780 for international callers. A live audio webcast will
also be available on the Investors page of the company's website,
http://www.fortegra.com. A replay of the call will be available
beginning April 1, 2013 at 11:30 a
.m. ET and ending on April 8, 2013
11:59 p.m. ET on the company's website, and by dialing (877) 870-5176
in the U.S. or (858) 384-5517 for international callers. The passcode
for the replay is 411599. 
About Fortegra
 Fortegra Financial Corporation is an insurance
services company that provides distribution and administration
services and insurance-related products to insurance companies,
insurance brokers and agents and other financial services companies,
primarily in the United States. It sells services and products
directly to businesses rather than directly to consumers. Fortegra's
brands include Life of the South(R), 4 Warranty, ProtectCELL,
Continental Car Club(TM), Auto Knight Motor Club(TM), United Motor
Club(TM), Consecta(TM), Pacific Benefits Group(TM), Bliss &
Glennon(TM) and eReinsure(TM).  
Use of Non-GAAP Financial Information
 Fortegra presents certain
additional financial measures related to its Business Segments that
are "Non-GAAP measures" within the meaning of Regulation G under the
Securities Act of 1934. Fortegra presents these Non-GAAP measures to
provide investors with additional information to analyze Fortegra's
performance from period to period. Management also uses these
measures to assess performance for Fortegra's segments and to
allocate resources in managing Fortegra's businesses. However,
investors should not consider these Non-GAAP measures as a substitute
for the financial information that Fortegra reports in accordance
with GAAP. These Non-GAAP measures reflect subjective determinations
by management, and may differ from similarly titled Non-GAAP measures
presented by other companies. 
In this Earnings Release, we present EBITDA and Adjusted EBITDA.
These financial measures as presented in this Earnings Release are
considered Non-GAAP financial measures and are not recognized terms
under U.S. GAAP and should not be used as an indicator of, and are
not an alternative to, net income as a measure of operating
performance. EBITDA as used in this Earnings Release is net income
before interest expense, income taxes, non-controlling interest,
depreciation and amortization. Adjusted EBITDA as used in this
Earnings Release means "Consolidated Adjusted EBITDA" which is
defined under our credit facility with Well Fargo Bank, N.A., is
generally consolidated net income before consolidated interest
expense, consolidated amortization expense, consolidated depreciation
expense and consolidated income tax expense. The other items excluded
in this calculation may include if applicable, but are not limited
to, specified acquisition costs, impairment of goodwill and other
non-cash charges, stock-based compensation expense and unusual or
non-recurring charges. The calculation below does not give effect to
certain additional adjustments permitted under our credit facility,
which if included, would increase the amount of Adjusted EBITDA
reflected in this table. We believe presenting EBITDA and Adjusted
EBITDA provides investors with a supplemental financial measure of
our operating performance.  
In addition to the financial covenant requirements under our credit
facility, management uses EBITDA and Adjusted EBITDA as financial
measures of operating performance for planning purposes, which may
include, but are not limited to, the preparation of budgets and
projections, the determination of bonus compensation for executive
officers, the analysis of the allocation of resources and the
evaluation of the effectiveness of business strategies. Although we
use EBITDA and Adjusted EBITDA as financial measures to assess the
operating performance of our business, both measures have significant
limitations as analytical tools because they exclude certain material
expenses. For example, they do not include interest expense and the
payment of income taxes, which are both a necessary element of our
costs and operations. Since we use property and equipment to generate
service revenues, depreciation expense is a necessary element of our
costs. In addition, the omission of amortization expense associated
with our intangible assets further limits the usefulness of this
financial measure. Management believes the inclusion of the
adjustments to EBITDA and Adjusted EBITDA are appropriate to provide
additional information to investors about certain material non-cash
items and about unusual items that we do not expect to continue at
the same level in the future. Because EBITDA and Adjusted EBITDA do
not account for these expenses, its utility as a financial measure of
our operating performance has material limitations. Due to these
limitations, management does not view EBITDA and Adjusted EBITDA in
isolation or as a primary financial performance measure. 
We believe EBITDA and Adjusted EBITDA are frequently used by
securities analysts, investors and other interested parties in the
evaluation of similar companies in similar industries and to measure
the company's ability to service its debt and other cash needs.
Because the definitions of EBITDA and Adjusted EBITDA (or similar
financial measures) may vary among companies and industries, they may
not be comparable to other similarly titled financial measures used
by other companies.  
Forward-Looking Statements
 This press release may contain
forward-looking statements within the meaning of the Private
Securities Litigation Act of 1995. Such statements are subject to
risks and uncertainties. All statements other than statements of
historical fact included in this press release are forward-looking
statements. Forward-looking statements give our current expectations
and projections relating to our financial condition, results of
operations, plans, objec
tives, future performance and business. You
can identify forward-looking statements by the fact that they do not
relate strictly to historical or current facts. These statements may
include words such as "anticipate," "estimate," "expect," "project,''
"plan," "intend," "believe," "may," "should," "can have," "likely"
and other words and terms of similar meaning in connection with any
discussion of the timing or nature of future operating or financial
performance or other events.  
The forward-looking statements contained in this press release are
based on assumptions that we have made in light of our industry
experience and our perceptions of historical trends, current
conditions, expected future developments and other factors we believe
are appropriate under the circumstances. As you read this press
release, you should understand that these statements are not
guarantees of performance or results. They involve risks,
uncertainties (some of which are beyond our control) and assumptions.
Although we believe that these forward-looking statements are based
on reasonable assumptions, you should be aware that many factors
could affect our actual financial results and cause them to differ
materially from those anticipated in the forward-looking statements.
We believe these factors include, but are not limited to, those
described under Item 1A. - "Risk Factors" in Fortegra's Annual Report
on Form 10-K and Quarterly Reports on Form 10-Q. Should one or more
of these risks or uncertainties materialize, or should any of these
assumptions prove incorrect, our actual results may vary in material
respects from those projected in these forward-looking statements.  
Any forward-looking statement made by us in this press release speaks
only as of the date on which we make it. Factors or events that could
cause our actual results to differ may emerge from time to time, and
it is not possible for us to predict all of them. We undertake no
obligation to publicly update any forward-looking statement, whether
as a result of new information, future developments or otherwise,
except as may be required by law.  
Further information concerning Fortegra and its business, including
factors that potentially could materially affect Fortegra's financial
results, is contained in Fortegra's filings with the SEC, which are
available free of charge at the SEC's website at http://www.sec.gov
and from Fortegra's website in the "Investor Relations" section under
"SEC Filings" at http://www.fortegra.com. 


 
                                                                            
                                                                            
                       FORTEGRA FINANCIAL CORPORATION                       
               CONSOLIDATED STATEMENTS OF INCOME (Unaudited)                
       (All Amounts in Thousands Except Share and Per Share Amounts)        
                                                                            
                              For the Three Months                          
                                     Ended            For the Years Ended   
                            ----------------------- ----------------------- 
                              December    December    December    December  
                              31, 2012    31, 2011    31, 2012    31, 2011  
                            ----------- ----------- ----------- ----------- 
                                        As Restated             As Restated 
Revenues:                                                                   
  Service and                                                               
   administrative fees      $    23,355 $    25,195 $    90,550 $    94,464 
  Brokerage commissions and                                                 
   fees                           8,011       8,710      35,306      34,396 
  Ceding commission               9,429       8,067      34,825      29,495 
  Net investment income             849         732       3,068       3,368 
  Net realized investment                                                   
   gains                              9       1,770           3       4,193 
  Net earned premium             29,855      30,857     127,625     115,503 
  Other income                       97          32         269         170 
                            ----------- ----------- ----------- ----------- 
Total revenues                   71,605      75,363     291,646     281,589 
  Net losses and loss                                                       
   adjustment expenses            7,947       9,611      40,219      37,949 
  Member benefit claims           1,084       1,288       4,642       4,409 
  Commissions                    32,094      34,348     128,741     126,918 
                            ----------- ----------- ----------- ----------- 
Net Revenues                     30,480      30,116     118,044     112,313 
                            ----------- ----------- ----------- ----------- 
                                                                            
Expenses:                                                                   
  Personnel costs                12,181      11,182      48,648      44,547 
  Other operating expenses        8,719       7,361      30,354      31,140 
  Depreciation and                                                          
   amortization                   1,349         794       3,933       3,077 
  Amortization of                                                           
   intangibles                    1,178       1,524       4,953       4,952 
  Interest expense                1,357       1,779       6,624       7,641 
  Loss on sale of                                                           
   subsidiary                         -           -           -         477 
                            ----------- ----------- ----------- ----------- 
Total expenses                   24,784      22,640      94,512      91,834 
                            ----------- ----------- ----------- ----------- 
Income before income taxes                                                  
 and non-controlling                                                        
 interest                         5,696       7,476      23,532      20,479 
  Income taxes                    1,903       2,572       8,295       7,140 
                            ----------- ----------- ----------
- ----------- 
Income before non-                                                          
 controlling interest             3,793       4,904      15,237      13,339 
  Less: net income (loss)                                                   
   attributable to non-                                                     
   controlling interest              10           1          72        (170)
                            ----------- ----------- ----------- ----------- 
Net income                  $     3,783 $     4,903 $    15,165 $    13,509 
                            =========== =========== =========== =========== 
                                                                            
Earnings per share:                                                         
  Basic                     $      0.19 $      0.24 $      0.77 $      0.66 
  Diluted                   $      0.18 $      0.24 $      0.74 $      0.64 
Weighted average common                                                     
 shares outstanding:                                                        
  Basic                      19,507,733  20,343,038  19,655,492  20,352,027 
  Diluted                    20,507,329  20,955,690  20,600,362  21,265,801 
                                                                            
                                                                            
                                                                            
                       FORTEGRA FINANCIAL CORPORATION                       
                  CONSOLIDATED BALANCE SHEETS (Unaudited)                   
       (All Amounts in Thousands Except Share and Per Share Amounts)        
                                                                            
                                                 December 31,  December 31, 
                                                     2012          2011     
                                                 ------------  ------------ 
Assets:                                                         As Restated 
Investments:                                                                
  Fixed maturity securities available-for-sale,                             
   at fair value                                 $    110,641  $     93,509 
  Equity securities available-for-sale, at fair                             
   value                                                6,220         1,219 
  Short-term investments                                1,222         1,070 
                                                 ------------  ------------ 
    Total investments                                 118,083        95,798 
Cash and cash equivalents                              15,209        31,339 
Restricted cash                                        31,142        14,180 
Accrued investment income                               1,235           929 
Notes receivable, net                                  11,290         3,603 
Accounts and premiums receivable, net                  27,026        19,690 
Other receivables                                      13,511         9,465 
Reinsurance receivables                               203,988       194,740 
Deferred acquisition costs                             79,165        55,628 
Property and equipment, net                            17,946        15,314 
Goodwill                                              119,512       104,888 
Other intangible assets, net                           79,340        54,410 
Income taxes receivable                                 2,897             - 
Other assets                                            7,667         5,369 
                                                 ------------  ------------ 
    Total assets                                 $    728,011  $    605,353 
                                                 ============  ============ 
                                                                            
Liabilities:                                                                
Unpaid claims                                    $     33,007  $     32,583 
Unearned premiums                                     235,900       227,929 
Policyholder account balances                          26,023        28,040 
Accrued expenses, accounts payable and other                                
 liabilities                                           58,563        33,982 
Income taxes payable                                        -         1,344 
Deferred revenue                                       70,452        22,420 
Note payable                                           89,438        73,000 
Preferred trust securities                             35,000        35,000 
Deferred income taxes, net                             28,658        23,969 
                                                 ------------  ------------ 
    Total liabilities                                 577,041       478,267 
                                                 ------------  ------------ 
                                                                            
                                                                            
Stockholders' Equity:                                                       
Preferred stock                                             -             - 
Common stock                                              207           206 
Treasury stock, at cost                                (6,651)       (2,728)
Additional paid-in capital                             97,641        96,199 
Accumulated other comprehensive loss, net of tax         (631)       (1,754)
Retained earnings                                      49,817        34,652 
                                                 ------------  ------------ 
    Stockholders' equity before non-controlling                             
     interests                                        140,383       126,575 
Non-controlling interests                              10,587           511 
                                                 ------------  ------------ 
    Total stockholders' equity                        150,970       127,086 
                                                 ------------  ------------ 
      Total liabilities and stockholders' equity $    728,011  $    605,353 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
                       FORTEGRA FINANCIAL CORPORATION                       
          CONSOLIDATED STATEMENTS OF INCOME- Segments (Unaudited)           
                         (All Amounts in Thousands)                         
                                                                            
                                  For the Three Months                      
                                         Ended          For the Years Ended 
                                 --------------------- -------------------- 
                                  December   December   December   December 
                                  31, 2012   31, 2011   31, 2012   31, 2011 
                                 ---------  ---------- ---------- --------- 
                                                As                    As    
Segment Net Revenue                          Restated              Restated 
  Payment Protection             $  17,198  $   16,523 $   62,553 $  59,697 
  BPO                                4,859       4,496     18,424    15,584 
  Brokerage                          8,423       9,097     37,067    37,032 
                                 ---------  ---------- ---------- --------- 
    Segment net revenues            30,480      30,116    118,044   112,313 
                                 ---------  ---------- ---------- --------- 
                                                                            
Operating Expenses                                                          
  Payment Protection                10,215       7,657     36,420    33,514 
  BPO                                3,907       3,434     14,227    11,598 
  Brokerage (1)                      6,778       7,452     28,355    29,289 
  Corporate                              -           -          -     1,763 
                                 ---------  ---------- ---------- --------- 
    Total operating expenses        20,900      18,543     79,002    76,164 
                                 ---------  ---------- ---------- --------- 
                                                                            
EBITDA                                                                      
  Payment Protection                 6,983       8,866     26,133    26,183 
  BPO                                  952       1,062      4,197     3,986 
  Brokerage (1)                      1,645       1,645      8,712     7,743 
  Corporate                              -           -          -    (1,763)
                                 ---------  ---------- ---------- --------- 
    Total EBITDA                     9,580      11,573     39,042    36,149 
                                 ---------  ---------- ---------- --------- 
                                                                            
Depreciation and amortization                                               
  Payment Protection                 1,013       1,001      3,590     4,205 
  BPO                                  795         300      2,290     1,124 
  Brokerage                            719       1,017      3,006     2,700 
  Corporate                              -           -          -         - 
                                 ---------  ---------- ---------- --------- 
    Total depreciation and                                                  
     amortization                    2,527       2,318      8,886     8,029 
                                 ---------  ---------- ---------- --------- 
                                                                            
Interest Expense                                                            
  Payment Protection                   804       1,027      4,146     4,649 
  BPO                                  215         161      1,035       419 
  Brokerage                            338         591      1,443     2,573 
                                 ---------  ---------- ---------- --------- 
    Total interest expense           1,357       1,779      6,624     7,641 
                                 ---------  ---------- ---------- --------- 
                                                                            
Income (loss) before income                                                 
 taxes and non-controlling                                                  
 interests                                                                  
  Payment Protection                 5,166       6,838     18,397    17,329 
  BPO                                  (58)        601        872     2,443 
  Brokerage (1)                        588          37      4,263     2,470 
  Corporate                              -           -          -    (1,763)
                                 ---------  ---------- ---------- --------- 
Total income before income taxes                                            
 and non-controlling interests       5,696       7,476     23,532    20,479 
  Income taxes                       1,903       2,572      8,295     7,140 
  Less: net income (loss)                                                   
   attributable to non-                                                     
   controlling interests                10           1         72      (170)
                                 ---------  ---------- ---------- --------- 
Net income                       $   3,783  $    4,903 $   15,165 $  13,509 
                                 =========  ========== ========== ========= 
                                                                            
(1) includes a $477 Loss on the sale of subsidiary for the year ended       
December 31, 2011.                                                          
                                                                            
                                                                            
                                                                            
                       FORTEGRA FINANCIAL CORPORATION                       
     RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION - ADJUSTED EBITDA     
                                 (Unaudited)                                
             (All Amounts in Thousands, except for percentages)             
                                                                            
                              For the Three Months                          
                                      Ended            For the Years Ended  
                             ----------------------  ---------------------- 
                              December    December    December    December  
                              31, 2012    31, 2011    31, 2012    31, 2011  
                             ----------  ----------  ----------  ---------- 
                                             As                      As     
                                          Restated                Restated  
Net income                   $    3,783  $    4,903  $   15,165  $   13,509 
  Depreciation                    1,349         794       3,933       3,077 
  Amortization of                                                           
   intangibles                    1,178       1,524       4,953       4,952 
  Interest expense                1,357       1,779       6,624       7,641 
  Income taxes                    1,903       
2,572       8,295       7,140 
  Net income (loss)                                                         
   attributable to non-                                                     
   controlling interest              10           1          72        (170)
                             ----------  ----------  ----------  ---------- 
EBITDA                            9,580      11,573      39,042      36,149 
    Transaction costs (a)           462         160         601         989 
    Stock-based compensation                                                
     expense                        297         132         954         747 
    Corporate governance                                                    
     study                            -           -           -         248 
    Relocation expenses               -           -           -         207 
    Statutory audits                  -           -           -          98 
    Loss on sale of                                                         
     subsidiary                       -           -           -         477 
    Legal                             -         360           -         360 
                             ----------  ----------  ----------  ---------- 
Adjusted EBITDA              $   10,339  $   12,225  $   40,597  $   39,275 
                             ==========  ==========  ==========  ========== 
                                                                            
EBITDA Margin                      31.4%       38.4%       33.1%       32.2%
Adjusted EBITDA Margin             33.9%       40.6%       34.4%       35.0%
                                                                            
(a) Represents transaction costs associated with acquisitions.              
                                                                            
                                                                            
                                                                            
                       FORTEGRA FINANCIAL CORPORATION                       
  RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION - NET INCOME (Unaudited) 
        (All Amounts in Thousands Except Share and Per Share Amounts)       
                                                                            
                               For the Three Months                         
                                      Ended            For the Years Ended  
                             ----------------------- -----------------------
                               December    December    December    December 
                               31, 2012    31, 2011    31, 2012    31, 2011 
                             ----------- ----------- ----------- -----------
                                         As Restated             As Restated
Net income                   $     3,783 $     4,903 $    15,165 $    13,509
  Non-GAAP Adjustments, net                                                 
   of tax                                                                   
    Transaction costs                                                       
     associated with                                                        
     acquisitions (1)                462         160         601         989
    Stock-based compensation         190          97         615         495
    Corporate governance                                                    
     study                             -           -           -         156
    Relocation expenses                -           -           -         130
    Statutory audits                   -           -           -          62
    Loss on sale of                                                         
     subsidiary                        -           -           -         300
    Legal                              -         236           -         236
    Retirement of debt (2)             -           -         439         560
                             ----------- ----------- ----------- -----------
  Total Non-GAAP                                                            
   adjustments, net of tax           652         493       1,655       2,928
                             ----------- ----------- ----------- -----------
Net income - Non-GAAP basis  $     4,435 $     5,396 $    16,820 $    16,437
                             =========== =========== =========== ===========
                                                                            
GAAP Earnings per share -                                                   
 basic                       $      0.19 $      0.24 $      0.77 $      0.66
  Non-GAAP adjustments, net                                                 
   of tax                           0.03        0.02        0.08        0.14
                             ----------- ----------- ----------- -----------
Non-GAAP Earnings per common                                                
 share - basic               $      0.22 $      0.26 $      0.85 $      0.80
                             =========== =========== =========== ===========
                                                                            
GAAP Earnings per share -                                                   
 diluted                     $      0.18 $      0.24 $      0.74 $      0.64
  Non-GAAP adjustments, net                                                 
   of tax                           0.03        0.02        0.08        0.14
                             ----------- ----------- ----------- -----------
Non-GAAP Earnings per common                                                
 share - diluted             $      0.21 $      0.26 $      0.82 $      0.78
                             =========== =========== =========== ===========
                                                                            
Weighted average common                                                     
 shares outstanding:                                                        
  Basic                       19,507,733  20,343,038  19,655,492  20,352,027
  Diluted                     20,507,329  20,955,690  20,600,362  21,265,801
                                                                            
(1) Adjustments not tax effected.                                           
(2) Adjustments not tax effected for the 2011 periods presented. 2012       
 amounts represent the write off of $678 in previously capitalized          
 transactions costs on the termination of the SunTrust Bank, N.A., revolving
 credit line, net of tax.                                                   

  
Contacts:
Stephanie Gannon
904-352-2759
investor.relations@fortegra.com 
 
 
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