Business Context and Reporting Period
Company: Atlantic American Corporation
Filing Type: Form 8-K (Current Report)
Date: March 26, 2012
Context: The Company is issuing a non-reliance notice regarding previously issued financial statements for the quarter and year ended December 31, 2010. This action follows a determination by management and the Audit Committee that an other-than-temporary impairment on certain equity securities should have been recognized in the fourth quarter of 2010 rather than 2011.
Key Financial Metrics and Restatement Impact
The filing details a preliminary restatement of 2010 financial results. No current period (2011 or 2012) revenue, cash flow, or liquidity metrics are provided in this specific document.
| Metric (Year Ended Dec 31, 2010) | Previously Reported | Preliminary Restated |
|---|---|---|
| Net Realized Investment Gain/Loss | $1.6 million (Gain) | ($741 thousand) (Loss) |
| Net Income | $2.5 million | $1.0 million |
Balance Sheet Impact: The filing states the impact on the December 31, 2010 balance sheet is not expected to be significant.
Material Changes Versus Prior Period
The primary material change is the reversal of a previously reported net realized investment gain of $1.6 million to a net realized investment loss of $741 thousand. Consequently, net income for the year ended December 31, 2010, is reduced by $1.5 million, from $2.5 million to $1.0 million.
Guidance, Outlook, and Risks
- Management Commentary: The Company intends to issue a press release on March 26, 2012, announcing the restatement and the financial results for the fourth quarter and year ended December 31, 2011.
- Contingencies: The amounts reported are preliminary. The final restated results are subject to finalization.
- Risks: The filing includes standard forward-looking statements warnings, noting that actual results may differ materially due to uncertainties in finalizing the restatement and other business factors.
- Auditor Involvement: Management and the Audit Committee have discussed these matters with BDO USA, LLP, the independent registered public accounting firm.
Investor Verification Checklist
- Verify the final restated financial statements for the quarter and year ended December 31, 2010, once issued.
- Review the upcoming press release for the fourth quarter and full-year 2011 financial results.
- Confirm the specific equity securities affected by the other-than-temporary impairment reclassification.
- Monitor for the filing of the amended Form 10-K for the year ended December 31, 2010.