-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Rtl1VeWSUeooekDf/7q0xNBYG1Q4PXuz6Yu6fTkZBIdNM9eYmKxG39KC5ctjkxWL iJ5I3HVBbjTw2/1tbqhSKA== 0000009346-04-000022.txt : 20041027 0000009346-04-000022.hdr.sgml : 20041027 20041027172445 ACCESSION NUMBER: 0000009346-04-000022 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041025 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20041027 DATE AS OF CHANGE: 20041027 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BALDWIN & LYONS INC CENTRAL INDEX KEY: 0000009346 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 350160330 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-05534 FILM NUMBER: 041100306 BUSINESS ADDRESS: STREET 1: 1099 N MERIDIAN ST STREET 2: STE 700 CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176369800 MAIL ADDRESS: STREET 1: 1099 NORTH MERIDIAN ST STREET 2: STE 700 CITY: INDIANAPOLIS STATE: IN ZIP: 46204 FORMER COMPANY: FORMER CONFORMED NAME: BALDWIN H C AGENCY INC DATE OF NAME CHANGE: 19720309 8-K 1 pr8k032004.txt FORM 8K - 3RD QUARTER EARNINGS RELEASE 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ----------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 ----------------------- Date of Report (Date of earliest event reported) October 25, 2004 BALDWIN & LYONS, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) INDIANA 0-5534 35-0160330 - -------------------------------------------------------------------------------- (State or other jurisdiction of (Commission (IRS Employer incorporation or organization) File Number) Identification No.) 1099 NORTH MERIDIAN STREET, INDIANAPOLIS, INDIANA 46204 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (317) 636-9800 ----------------- Not applicable - -------------------------------------------------------------------------------- (Former name of former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CRF 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 2 ITEM 7.01 REGULATION FD DISCLOSURE The following information, including the Exhibit to this Form 8-K, is being furnished pursuant to Item 2.02 - Results of Operations and Financial Condition of Form 8-K and is being presented under Item 7.01 of Form 8-K. This information is not deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 and is not incorporated by reference into any Securities Act registration statements. On October 25, 2004, Baldwin & Lyons, Inc. (Baldwin) issued a press release announcing the results of its operations for the third quarter ended September 30, 2004. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K and incorporated by reference to this Item 9 and Item 12 as if fully set forth herein. Throughout its press release and in the conference call to discuss the results of its operations for the third quarter 2004, Baldwin presents and will present its results and operations in the manner it believes will be the most meaningful, which includes some measures that are not based on accounting principles generally accepted in the United States (GAAP). Baldwin management uses operating revenue, a non-GAAP financial measure, which is revenue excluding pre-tax realized investment gains and losses. It also uses operating income which is net income excluding after tax realized investment gains and losses. These financial measures are used to evaluate the Company's performance because the realization of investment gains and losses in any given period is largely discretionary as to timing and could distort the analysis of trends. Baldwin believes that the insurance industry equity analysts exclude realized gains and losses on investments in their analysis of Baldwin's results for the same reason. The combined ratios and the components thereof are presented in accordance with statutory accounting principles applied to the GAAP underwriting results. A copy of this press release is also posted on the Company's website. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits Exhibit No. Description - ------------ ---------------------------------------- Exhibit 99.1 Press release issued by Baldwin & Lyons, Inc., dated October 25, 2004. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BALDWIN & LYONS, INC. October 27, 2004 By /s/ Gary W. Miller ------------------------- Gary W. Miller, Chairman and CEO (Chief Operating Officer EX-99 3 exh-9913q04.txt 3RD QUARTER EARNINGS RELEASE 1 Exhibit 99.1 [GRAPHIC OMITTED][GRAPHIC OMITTED] BALDWIN & LYONS, INC. PROTECTIVE INSURANCE COMPANY SAGAMORE INSURANCE COMPANY B & L INSURANCE, LTD. (BERMUDA) - -------------------------------------------------------------------------------- 1099 North Meridian Street Indianapolis, IN 46204 (317) 636-9800 Subj: Baldwin & Lyons, Inc. October 25, 2004 Unaudited Third Quarter Report Press Contact: G. Patrick Corydon (317) 636-9800 corydon@baldwinandlyons.com FOR IMMEDIATE RELEASE INDIANAPOLIS, INDIANA, OCTOBER 25, 2004--Baldwin & Lyons, Inc. (NASD: BWINA, BWINB) today announced third quarter operating income, defined as net income before capital gains or losses, of $3.4 million, or $.23 per share, compared to $6.8 million, or $.46 per share, reported in 2003. Capital gains were negligible during the current quarter compared to $1.3 million, or $.09 per share in the prior year quarter. Including capital gains, third quarter net income was $3.5 million, or $.23 per share, compared to $8.1 million, or $.55 per share, for the third quarter of 2003. The 2004 quarter showed the effect of approximately $3.2 million ($.22 per share) in after-tax losses resulting from the Company's participation in certain property catastrophe reinsurance pools covering the recent hurricanes in Florida and other southeastern states. For the nine months ended September 30, 2004, operating income totaled $17.9 million, or $1.21 per share, and compares to the previously established record of $19.5 million, or $1.33 per share, reported a year earlier. Capital gains of $5.3 million, or $.36 per share, were realized in the 2004 period compared to gains of $3.5 million a year earlier. Including capital gains, net income for the current year-to-date totaled $23.2 million, or $1.57 per share, just surpassing the previous record of $23.0 million, or $1.56 per share, for the 2003 period. Direct and assumed premiums written increased 10% from the third quarter of 2003. For the nine months, direct and assumed premiums written are up 11%. Net premiums earned by the Company's insurance subsidiaries during the third quarter totaled $44.4 million, an increase of 18% from the $37.5 million reported for the third quarter of 2003. For the year-to-date, 2004 premiums earned increased 19% to a record $126.3 million. Investment income for the third quarter reflected a 10% increase in average funds invested from positive cash flow, a small decrease in replacement yields on maturing instruments, the Company's continuing accumulation of very short maturities, reflecting a belief of soon to be higher interest rates, and a shift from taxable to non-taxable investments resulting in lower pre-tax yields. After-tax investment income increased 3% for the quarter over the prior year and was flat for the first nine months of 2004 versus 2003. The consolidated combined ratio of 106.4% produced an underwriting loss of $2.8 million compared to a combined ratio of 91.4% and an underwriting gain of $3.2 million for the third quarter of 2003. The current quarter combined ratio was adversely impacted by hurricane losses totaling $5.0 million, pre-tax, or 11.3 points of the consolidated combined ratio. Without hurricane losses, the consolidated loss and loss expense ratio increased from 65.1% in the prior year period to 71.9%. This increase was primarily the result of an increased severity of losses in Protective's fleet trucking lines as well as high loss levels in Sagamore's small business workers' compensation product line. The consolidated underwriting expense ratio of 23.2% compares to 26.3% for the 2003 third quarter. Year-to-date, the consolidated combined ratio for 2004 was 97.7% compared to 91.5% for the first nine months of 2003. Without 2 -2- hurricane losses, the current year combined ratio is 93.7%. All products produced an underwriting profit in the current nine month period except for small business workers' compensation. The Company has announced that this product line has been placed in runoff status with the discontinuance of new business and the non-renewal of in force business at normal expiration. The Company has paid substantially increased dividends of $1.05 per share in the first nine months of 2004 and $1.40 in the past twelve months. The book value per share of the Company's stock rose by 17 cents from year end and by $.81 in the past twelve months, totaling $22.17 on September 30, 2004 with total shareholders' equity of $326.7 million. CONFERENCE CALL INFORMATION: Baldwin & Lyons, Inc. has scheduled a conference call for October 26, 2004 at 12:00 AM (New York time) to discuss results for the third quarter ended September 30, 2004. To gain access to the webcast of this call, please log on to HTTP://VIAVID.NET/DCE.ASPX?SID=00001F18 at least 15 minutes prior to the call to register and to download the necessary audio software. The webcast will be archived on the site until January 26, 2005. You may also access the webcast through a link on our investor relations page at WWW.BALDWINANDLYONS.COM. To participate via teleconference, investors may dial 877-780-2271 (U.S./Canada) or 973-582-2737 (International or local) at least five minutes prior to the beginning of the call. A replay of the call will be available through November 2, 2004 by calling 877-519-4471 or 973-341-3080 and referencing passcode 5245254. Also available on our investor relations page are complete interim financial statements, information regarding our business segments, and copies of our filings with the Securities and Exchange Commission. 3 -3-
[OBJECT OMITTED] FINANCIAL HIGHLIGHTS (UNAUDITED) Baldwin & Lyons, Inc. and Subsidiaries (In thousands, except per share data) Three Months Ended Nine Months Ended September 30 September 30 --------------------------- ---------------------------- 2004 2003 2004 2003 ----------- ------------ ------------- ----------- Operating revenue $49,094 $42,047 $ 140,883 $120,150 Realized gains 27 2,048 8,135 5,335 ----------- ------------ ------------- ----------- TOTAL REVENUE $49,121 $44,095 $ 149,018 $125,485 =========== ============ ============= =========== Income before realized capital transactions $ 3,442 $ 6,791 $ 17,935 $ 19,487 Realized net gains on investments, net of federal income taxes 18 1,331 5,288 3,468 ----------- ------------ ------------- ----------- NET INCOME $ 3,460 $ 8,122 $ 23,223 $ 22,955 =========== ============ ============= =========== Per share data - diluted: Average number of shares 14,785 14,742 14,795 14,698 Income before realized capital transactions $ .23 $ .46 $ 1.21 $ 1.33 Realized net gains on investments - .09 .36 .23 ----------- ------------ ------------- ----------- NET INCOME $ .23 $ .55 $ 1.57 $ 1.56 =========== ============ ============= =========== Dividends paid to shareholders $ .15 $ .10 $ 1.05 $ .30 Annualized return on average shareholders' equity: Operating income 4.8% 10.0% 8.4% 9.8% Net income 4.8% 12.0% 10.9% 11.6% Consolidated combined ratio of insurance subsidiaries (GAAP basis) 106.4% 91.4% 97.7% 91.5% [OBJECT OMITTED]
NOTE: ALL DATA PRESENTED HAS BEEN RESTATED TO REFLECT A FIVE-FOR-FOUR STOCK SPLIT ISSUED IN FEBRUARY, 2003. FORWARD-LOOKING STATEMENTS IN THIS REPORT ARE MADE PURSUANT TO THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. INVESTORS ARE CAUTIONED THAT SUCH FORWARD-LOOKING STATEMENTS INVOLVE INHERENT RISKS AND UNCERTAINTIES. READERS ARE ENCOURAGED TO REVIEW THE COMPANY'S ANNUAL REPORT FOR ITS FULL STATEMENT REGARDING FORWARD-LOOKING INFORMATION. -----END PRIVACY-ENHANCED MESSAGE-----