-----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, Bj7zP0AFgQ4FXMuJF2MMynrfH3hQLhoBlJrqdMXsv0K8mb2mIwy4J64WKvIY+WJA zxpjogCeCyzaWZ0Je7tK2g== 0000009346-06-000006.txt : 20060207 0000009346-06-000006.hdr.sgml : 20060207 20060207161546 ACCESSION NUMBER: 0000009346-06-000006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060206 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060207 DATE AS OF CHANGE: 20060207 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: 06585683 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 pr8k123105.txt FORM 8-K CURRENT REPORT 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) February 6, 2006 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 February 6, 2006, Baldwin & Lyons, Inc. (Baldwin) issued a press release announcing the results of its operations for the fourth quarter ended December 31, 2005. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K and incorporated by reference to this Item 9.01 as if fully set forth herein. Throughout its press release and in the conference call to discuss the results of its operations for the fourth quarter 2005, 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 the term OPERATING REVENUE, a non-GAAP financial measure, which is defined as REVENUE EXCLUDING PRE-TAX INVESTMENT GAINS AND LOSSES. It also uses the term OPERATING INCOME which is defined as NET INCOME EXCLUDING AFTER TAX INVESTMENT GAINS AND LOSSES. These financial measures are used to evaluate the Company's performance because the recognition 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 defined terms are used commonly in the property/casualty insurance industry and that equity analysts and the Company's significant shareholders exclude gains and losses on investments in their analysis of Baldwin's results for the same reason. The combined ratios and the components thereof, as presented herein, are commonly used in the property/casualty insurance industry and are applied to the Company's 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. 99.1 Baldwin & Lyons, Inc. press release dated February 6, 2006. 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. February 7, 2006 By /S/ GARY W. MILLER -------------------------- Gary W. Miller, Chairman and CEO (Chief Operating Officer) EX-99 2 exh-9914q05.txt PRESS RELEASE 1 Exhibit 99.1 [GRAPHIC OMITTED][GRAPHIC OMITTED] BALDWIN & LYONS, INC. PROTECTIVE INSURANCE COMPANY SAGAMORE INSURANCE COMPANY B & L INSURANCE, LTD. (BERMUDA) [OBJECT OMITTED] 1099 North Meridian Street Indianapolis, IN 46204 (317) 636-9800 Subj: Baldwin & Lyons, Inc. February 6, 2006 Preliminary and Unaudited Press Contact: G. Patrick Corydon Fourth Quarter/Annual Earnings Report (317) 636-9800 corydon@baldwinandlyons.com FOR IMMEDIATE RELEASE RECORD NET INCOME FOR 2005 INDIANAPOLIS, INDIANA, FEBRUARY 6, 2006--Baldwin & Lyons, Inc. (NASD: BWINA, BWINB) today announced fourth quarter net income of $10.0 million, or $.67 per share, compared to net income of $7.1 million, or $.48 per share, for the fourth quarter of 2004. Operating income, defined as net income excluding investment gains or losses, was $5.8 million, or $.39 per share, for the fourth quarter of 2005 compared to $6.0 million, or $.41 per share, for the fourth quarter of 2004. Net investment gains totaled $4.2 million, or $.28 per share, in the 2005 period compared to net gains of $.07 per share for the prior year quarter. For the year ended December 31, 2005, net income totaled a record $34.2 million, or $2.30 per share, compared to $30.3 million, or $2.05 per share, for 2004. Operating income for 2005, which was impacted by record hurricane losses during the third and fourth quarters, was $19.3 million, or $1.30 per share, compared to $24.0 million, or $1.62 per share, for the prior year while net investment gains added $14.9 million, or $1.00 per share, in 2005 compared to net gains of $6.4 million, or $.43 per share, during the prior year. Net premiums earned during the current quarter totaled $46.2 million, up from the $45.9 million reported for the fourth quarter of 2004. For the year, 2005 net premiums earned increased 8% to a record $186.2 million, reflective of Protective's increased net retention within the excess trucking product line. Direct and assumed premiums written decreased 9% from the fourth quarter of 2004 to $52.1 million due primarily to less volume in Protective's large fleet excess product and the discontinuance of Sagamore's small business workers' compensation business. For the year, direct and assumed premiums written were $222.4 million, down 10% from the previous year's record of $247.1 million, with large fleet trucking and discontinued small business workers' compensation comprising the majority of this decline. Pre-tax investment income increased 35% for the quarter as yields and average funds invested both continue to rise. After-tax yields were also higher than the prior year quarter, providing for a 27% increase in after-tax investment income. For the year, pre-tax and after-tax investment income increased 21% and 17%, respectively. The consolidated combined ratio of 96.1% produced an underwriting gain of $1.8 million compared to a combined ratio of 96.7% and an underwriting gain of $1.5 million for the fourth quarter of 2004. The consolidated loss and loss expense ratio decreased from 75.0% in the prior year period to 74.1% despite the negative impact of hurricane losses reported during the quarter of $2.6 million (5.7 points). For the year, the consolidated combined ratio for 2005 was 97.5% compared to 97.4% for 2004. The combined ratios for 2005 and 2004 were adversely impacted by pre-tax hurricane losses of $15.6 million (8.4 points) and $5.0 million (2.9 points), respectively. Each of the quarterly and annual combined ratios shown above is computed without regard to fee income earned by the insurance subsidiaries which is accounted for as other operating income. The impact of including fee income for all periods presented would be a decrease in each of the combined ratios of approximately 2.0 points. 2 Net investment gains for the fourth quarter of 2005 were $6.5 million and totaled $23.0 million for the year, both substantial increases over the comparable 2004 periods. Current year investment gains include approximately $14.8 million attributable to the increase in fair value of several limited partnership investments held by the Company. Of this total, an estimated $9.7 million is composed of unrealized gains at the partnership level; however, applicable accounting pronouncements require the Company, as investor, to record the increase in unrealized limited partnership appreciation as part of our revenue and income. There was no such unrealized appreciation during the 2004 periods. Gary w. Miller, CEO commented: "We are generally pleased with our yearly results. Even though we had significant losses from our reinsurance assumed line caused by 2005's hurricane activity, our other products performed well holding the reduction in operating income to just 20% for the year. Then, our investments produced excellent returns, more than making up for the hurricane-induced drop in operating income and resulting in record net income for the year." Shareholders' equity increased $20.1 million (6.2%) from December 31, 2004, after dividend payouts during the year totaling $14.0 million ($.95 per share). Continued excellent operating earnings and significantly higher investment gains, contributed to the book value per common share outstanding of $23.31 at December 31, 2005, an increase of $1.27 from year end 2004. The total return to shareholders, including dividends, was $2.22 per share, an increase of 10% on beginning book value. CONFERENCE CALL INFORMATION: Baldwin & Lyons, Inc. has scheduled a conference call for February 7, 2006 at 11:00 AM ET (New York time) to discuss results for the fourth quarter and year ended December 31, 2005. To gain access to the webcast of this call, please log on to HTTP://VIAVID.NET/DCE.ASPX?SID=00002C62 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 May 7, 2006. 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 800-819-9193 (U.S./Canada) or 913-981-4911 (International or local) at least five minutes prior to the beginning of the call. A replay of the call will be available through February 14, 2006 by calling 888-203-1112 or 719-457-0820 and referencing passcode 1285649. Also available on our investor relations page are copies of our filings with the Securities and Exchange Commission. The company plans to file its annual report on Form 10-K with the Securities and Exchange Commission on or about March 13, 2006 and to mail its 2005 Annual Report to shareholders on or about March 31, 2006. 3 [OBJECT OMITTED]
FINANCIAL HIGHLIGHTS (UNAUDITED) Baldwin & Lyons, Inc. and Subsidiaries (In thousands, except per share data) Three Months Ended Twelve Months Ended December 31 December 31 --------------------------- ------------------------------- 2005 2004 2005 2004 ------------ ----------- ------------- -------------- Operating revenue $52,070 $50,680 $207,923 $191,563 Net investment gains 6,511 1,635 22,981 9,770 ------------ ----------- ------------- -------------- TOTAL REVENUE $58,581 $52,315 $230,904 $201,333 ============ =========== ============= ============== Operating income $ 5,793 $ 6,021 $ 19,285 $ 23,956 Net investment gains, net of federal income taxes 4,233 1,062 14,938 6,350 ------------ ----------- ------------- -------------- NET INCOME $10,026 $ 7,083 $ 34,223 $ 30,306 ============ =========== ============= ============== Per share data - diluted: Average number of shares 14,888 14,829 14,863 14,789 Operating income $ .39 $ .41 $ 1.30 $ 1.62 Net investment gains .28 .07 1.00 .43 ------------ ----------- ------------- -------------- NET INCOME $ .67 $ .48 $ 2.30 $ 2.05 ============ =========== ============= ============== Dividends paid to shareholders $ .25 $ 1.00 $ .95 $ 2.05 Annualized return on average shareholders' equity: Operating income 7.7% 8.4% 6.6% 8.5% Net income 13.3% 9.9% 11.7% 10.8% Consolidated combined ratio of insurance subsidiaries (GAAP basis): Without fee income 96.1% 96.7% 97.5% 97.4% Including fee income 94.1% 94.7% 95.3% 95.1%
[OBJECT OMITTED] 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-----