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Business Observer Wednesday, Aug. 11, 2010 10 years ago

Aug. 11: HCII, WAC, INV, OMEX

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Homeowners Choice and Walter Inv. profit; Innovaro and Odyssey struggle.

Homeowners Choice Inc.
The end of the first half of 2010 was business as usual for Homeowners Choice Inc. The Clearwater-based insurance company stayed profitable, continued its stock repurchase plan, and further increased its cash holdings.

The company earned $1.3 million in net income in the recently concluded quarter, down from the $3 million it earned in 2009. The main cause for the drop appears to be increased reinsurance costs — while gross premiums were up slightly, net premiums earned (which account for reinsurance) fell 20% from last year.

Over the last six months, the publicly traded company bought back 374,401 shares of its own common stock. Since June 30, 2009, the number of HCII shares outstanding has fallen by 8.1%.

The company has increased its cash holdings since the end of 2009 as well, up from $43.4 million to $76.3 million as of June 30, 2010.

F.X. McCahill, CEO at Homeowners Choice, says growth should continue for the Clearwater firm. “We continue to expect profitability and bottom-line improvement in 2010,” he said in a release.

Walter Investment Management Corp.
The purchasing of packages of residential loans continues to generate profits for Walter Investment Management Corp. The company earned a net income of $8.9 million in the second quarter of 2010, up slightly from the $8.6 million earned in 2009.

"We continue to see attractive opportunities in the market to acquire performing and nonperforming residential loans,” said Mark O'Brien, CEO for Walter Investment.

The company earned a 10.25% annualized return on its residential loan assets in the quarter, while its outstanding debt generated a 6.81% interest cost. That gave Walter Investment a 5.10% net interest margin for the three-month period.

The Tampa-based company also made a $12.9 million dividend payment on April 30.

Innovaro Inc.
Revenues were up, but losses continued for Innovaro Inc.

The company lost $1.2 million in net income in the recently concluded quarter, representing a 25% smaller loss than the three prior months — and more than 80% lower than the $6.2 million loss the company posted in the second quarter of 2009.

Revenues grew 6% over the year, up from $2.6 million last year to $2.8 million in this year's second quarter.

“At the end of 2009, we began to see an increase in overall business inquiries which, I am pleased to report, have become newly signed engagements for us in the first half of 2010,” said Innovaro CEO Doug Schaedler.

In its release materials, Tampa-based Innovaro Inc. refers to itself as a comprehensive end-to-end innovation solution provider.

Odyssey Marine Exploration Inc.
Greg Stemm, CEO of Odyssey Marine Exploration Inc., says his company is pleased with its latest quarterly performance, despite another significant net loss.

Odyssey generated $4.3 million in revenue in the second quarter of 2010, up dramatically from last year's $400,000 earned. But that growth could not prevent the company from losing money, as Odyssey ended up losing $3.5 million in the three month period.

Regardless, Stemm's forward-looking comments were optimistic. “Based on our current schedule of new contracts and syndicated projects, we are comfortable that we are on track to see continued improvement in revenue and, as a result, should be able to meet our cash flow requirements for the remainder of 2010,” he said.

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