HOUSTON, April 26 /PRNewswire/ -- Stewart Information Services Corporation (NYSE-STC) reported net earnings for the three months ended March 31, 2001 of $3.1 million, compared to a loss of $3.4 million for the first quarter of 2000. On a diluted per share basis, net earnings were $.20 for the first quarter of 2001 compared to a loss of $.23 for the first quarter of 2000. Revenues in the first quarter increased 17 percent to $244 million from $208 million in the same period last year.
"Orders in the first three months of 2001 were more than 50 percent greater than one year ago and represented an all-time record for any quarter in the company's history,'' said Stewart Morris, Jr., co-chief executive officer and president. "March saw a particularly strong surge in orders as many customers sought to refinance their mortgages as interest rates declined. Much of our expense associated with orders is incurred as they are received, but we do not recognize revenues until the orders close and title policies are issued. We expect a substantial portion of our first quarter orders to close in the second quarter, which bodes well for strong operating results for that quarter.
"Multiple factors contributed to our profitability this first quarter, even though first quarters are historically weak. Careful management of costs, improvements in leadership at every level of organization and the influence of strategic acquisitions made in the past 12 months all positively impacted the bottom line. We also benefited from an environment of favorable interest rates with a corresponding surge in the refinance business,'' said Mr. Morris.
"Acquisitions have contributed significantly to our order-count growth,'' added Morris. "Recent acquisitions have been the largest in company history in both number of acquisitions and dollar value. To facilitate acquisitions, we filed a shelf registration this past quarter with the Securities and Exchange Commission to sell from time to time up to $75 million of common stock. The registration has not yet become effective, and this release does not constitute an offer of any securities for sale. Future acquisitions will continue to be consistent with our objective of completing transactions that are accretive to our earnings per share.''
"Commercial business continues to make an increasing contribution to our bottom line. Stewart's National Title Services (NTS) offices have grown to 18 locations across the country. NTS targets national and international affiliations and services multi-site commercial accounts as well as the nationwide relocation market,'' said Malcolm S. Morris, chairman of the board and co-chief executive officer.
"Our balance sheet remains strong, with the best financial ratings among the largest underwriters. LACE Title Rating Corporation again designated Stewart Title Guaranty Company as having the industry's largest Commercial Capacity Rating, reflecting our commitment to consistently increase the financial backing of our policies,'' added Morris. "Our balance sheet has expanded with an unprecedented industry record 26 years of growth in reserves and surplus. This reflects the company's commitment to our policyholders and remains a key element in growing our commercial market share.
"We have conducted a review of the profit and cost centers in the company, the results of which have enhanced the organization, management and profitability of many subsidiaries. We substantially reorganized our real estate information (REI) segment, and expanded and refined our product lines,'' Morris said.
The international operations of the company remain profitable and represents a small but increasing portion of revenues, with recent operation startups in Poland and the Dominican Republic. Stewart also has ongoing operations in Mexico, Canada, Costa Rica, the United Kingdom, Israel, Slovakia and the Caribbean.
"The industry continues to recognize our company as the technology leader. Stewart Morris, Jr. was recently named the recipient of Settlement Services Today's 2001 Outstanding Achievement Award in recognition of his accomplishment, leadership, creativity, and support for technological advancement in the settlement services industry,'' said Malcolm Morris.
"Over the last two years, we made a strategic decision to invest in the commercial area of our business, technology and new services. While we sacrificed short-term earnings, we positioned ourselves for long-term growth,'' said Morris. "While continuing to emphasize those same goals, we are now in a position to begin reaping the profits from those investments. We expect a strong performance in 2001.''
Stewart Information Services Corporation is a technology driven, strategically competitive, global real estate information company. Stewart provides title insurance and related information services through more than 5,400 issuing locations in the United States and several international markets. Stewart meets the needs of the real estate and mortgage industries through the delivery of information services required for settlement using e-commerce. These services include title reports, flood determinations, property appraisals, surveys, document preparation, property reports and background checks. Stewart also supplies post-closing services to lenders, automated county clerk land records and GIS for governmental entities. Stewart provides expertise in tax-deferred exchanges. More information about Stewart can be found at www.stewart.com.
Stewart Information Services Corporation
|Revenues||$ 244,301,000|| |
|Net earnings (loss)||$3,073,000|| |
|Average shares - diluted||15,268,000|| |
|Earnings (loss) per share:|| |
|Basic||$ 0.20|| |
|Diluted||$ 0.20|| |
|STEWART INFORMATION SERVICES CORPORATION |
STATEMENTS OF EARNINGS
(In thousands of dollars)
Three months ended
|Title premiums, fees and other revenues||223,941|| |
|Real estate information services||14,462|| |
|Investment income||5,545|| |
|Investment gains (losses) - net||353|| |
|Amounts retained by agents||101,044|| |
|Employee costs||79,352|| |
|Other operating expenses||42,150|| |
|Title losses||9,595|| |
|Depreciation and amortization||5,268|| |
|Minority interests||1,225|| |
|Earnings (loss) before taxes||5,008|| |
|Income taxes (benefit)||1,935|| |
|Net earnings (loss)||3,073|| |
|Average number diluted shares (000)||15,268|| |
|Earnings per share - diluted||.20|| |
|Segment information:|| |
|Title revenues||229,839|| |
|Title pretax earnings (loss)||4,345|| |
|REI revenues||14,462|| |
|REI pretax earnings (loss)||663|| |
|Selected financial information (000):|| |
|Premiums earned from agents||123,722|| |
|Title loss payments - net||7,918|| |
|Change in unrealized investment gains|| |
|(losses) - net of taxes||2,155|| |
|Average number basic shares||15,110|| |
|Number of title orders opened||155|| |
|STEWART INFORMATION SERVICES CORPORATION |
BALANCE SHEETS (condensed)
(In thousands of dollars)
|March 31 |
|Cash and cash equivalents||44,985|| |
|Short-term investments||48,914|| |
|Investments - statutory reserve funds||212,548|| |
|Investments - other||48,750|| |
|Property and equipment||44,753|| |
|Title plants||33,524|| |
|Deferred income taxes||7,318|| |
|Notes payable||40,806|| |
|Accounts payable and accrued liabilities||33,086|| |
|Estimated title losses||191,725|| |
|Minority interests||7,129|| |
|Contingent liabilities and commitments|| |
|Common and Class B Common Stock and |
additional paid-in capital
|87,404|| 84,563 |
|Retained earnings||213,133|| |
|Accumulated other comprehensive earnings||4,043|| |
|Treasury stock||(1,512)|| |
|Total stockholders' equity |
($19.91 per share at March 31, 2001)
|303,068|| 295,089 |
|575,814|| 535,741 |
April 26, 2001