-----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, NLzDzrV+40fJ3gj9RKO0e/lxwVCkq8FS03xSQ13SEAQu2MRszAAQ8HIKy9jxXLBL yG4wJISPF/8GwYg38h27QA== 0000009346-07-000002.txt : 20070207 0000009346-07-000002.hdr.sgml : 20070207 20070207090628 ACCESSION NUMBER: 0000009346-07-000002 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070205 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070207 DATE AS OF CHANGE: 20070207 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: 07586316 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 pr8k123106.txt 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) February 5, 2007 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 5, 2007, Baldwin & Lyons, Inc. (Baldwin) issued a press release announcing the results of its operations for the fourth quarter ended December 31, 2006. 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 2006, 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 5, 2007. 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, 2007 By /S/ GARY W. MILLER --------------------------- Gary W. Miller, Chairman and CEO (Chief Operating Officer) EX-99 2 exh-9914q06.txt EARNINGS RELEASE 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 5, 2007 Preliminary and Unaudited Press Contact: G. Patrick Corydon Fourth Quarter/Annual (317) 636-9800 Earnings Report corydon@baldwinandlyons.com BALDWIN & LYONS ANNOUNCES RECORD NET INCOME FOR QUARTER AND YEAR INDIANAPOLIS, INDIANA, FEBRUARY 5, 2007--Baldwin & Lyons, Inc. (Nasdaq: BWINA, BWINB) today announced fourth quarter operating income, defined as net income before investment gains or losses, of $6.0 million, or $.40 per share, compared to operating income of $5.8 million, or $.39 per share, reported in 2005. Investment gains totaled $5.3 million, or $.35 per share, during the current quarter and compare to investment gains of $4.2 million, or $.28 per share, in the prior year quarter. Including investment gains, net income was a fourth quarter record of $11.3 million, or $.75 per share, compared to $10.0 million, or $.67 per share, for the fourth quarter of 2005. For the year ended December 31, 2006, operating income totaled $27.1 million, or $1.80 per share, compared to $19.3 million, or $1.30 per share, reported a year earlier. The 2005 period was adversely impacted by losses from hurricanes Katrina and Rita. Investment gains totaled $11.1 million, or $.74 per share, in 2006 compared to gains of $14.9 million a year earlier. Including investment gains, net income for the current year totaled a record $38.2 million, or $2.54 per share, compared to the previous record of $34.2 million, or $2.30 per share, for the year ended December 31, 2005. Net premium earned by the Company's insurance subsidiaries declined by 9% from $46.2 million during the fourth quarter of 2005 to $42.1 million for the fourth quarter of 2006. For the year, 2006 net premium earned also decreased by 9% to $169.8 million. Net premium earned was 1% lower than the third quarter as the Company's two largest products, fleet trucking and non-standard automobile, continue to experience pricing pressure. The Company's quarterly consolidated combined ratio increased to 99.3%, producing underwriting profits of $.3 million, compared to last year's fourth quarter ratio of 96.1% and an underwriting gain of $1.8 million. Year-to-date, the consolidated combined ratio for 2006 was 92.9% compared to 97.5%, including pre-tax hurricane losses of $15.6 million which added 8.4 points to the loss ratio, for 2005. Each of the quarterly and annual combined ratios shown above are 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 would be decreases in the combined ratios for the 2006 and 2005 fourth quarters of 2.4 and 2.0 percentage points, respectively, and 2.5 and 2.2 percentage points for the years 2006 and 2005, respectively. Investment income again compared favorably to prior periods. Pretax investment income was 20% higher for the fourth quarter and 32% higher for the year. After tax investment income improved even more for the quarter and year by 31% and 36%, respectively, as more of the fixed income portfolio has been allocated to municipal bonds this year. After tax investment income also improved over 4% from the third quarter this year even after the payment of record dividends during the year. Net investment gains before tax were $8.2 million for the current quarter compared to $6.5 million for the 2005 quarter. Year-to-date, net investment gains were $17.1 million compared to 2 $23.0 million for 2005 with the difference attributable to extraordinarily favorable performance by our limited partnership investments during 2005. Shareholders' equity increased by $6.6 million during the quarter and has increased $10.9 million (3.2%) from December 31, 2005 after regular and extra dividend payouts for the year-to-date totaling $38.4 million, or $2.55 per share. The book value per share of the Company's stock was $23.60 on December 31, 2006, an increase of $.29 after dividends from December 31, 2005. CONFERENCE CALL INFORMATION: Baldwin & Lyons, Inc. has scheduled a conference call for February 5, 2007 at 11:00 AM (New York time) to discuss results for the fourth quarter ended December 31, 2006. To gain access to the webcast of this call, please log on to HTTP://VIAVID.NET/DCE.ASPX?SID=0000397D 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 5, 2007. 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 12, 2007 by calling 888-203-1112 or 719-457-0820 and referencing passcode 5288488. 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 [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 ---------------------------- ----------------------------- 2006 2005 2006 2005 ------------- ----------- ------------- ------------ Operating revenue $48,726 $52,070 $196,005 $207,923 Net investment gains 8,227 6,511 17,064 22,981 ------------- ----------- ------------- ------------ TOTAL REVENUE $56,953 $58,581 $213,069 $230,904 ============= =========== ============= ============ Operating income $ 5,976 $ 5,793 $ 27,094 $ 19,285 Net investment gains, net of federal income taxes 5,347 4,233 11,091 14,938 ------------- ----------- ------------- ------------ NET INCOME $11,323 $10,026 $ 38,185 $ 34,223 ============= =========== ============= ============ Per share data - diluted: Average number of shares 15,145 14,888 15,047 14,863 Operating income $ .40 $ .39 $ 1.80 $ 1.30 Net investment gains .35 .28 .74 1.00 ------------- ----------- ------------- ------------ NET INCOME $ .75 $ .67 $ 2.54 $ 2.30 ============= =========== ============= ============ Dividends paid to shareholders $ .45 $ .25 $ 2.55 $ .95 Annualized return on average shareholders' equity: Operating income 7.8% 7.7% 8.8% 6.6% Net income 14.7% 13.3% 12.4% 11.7% Consolidated combined ratio of insurance subsidiaries (GAAP basis): Without fee income 99.3% 96.1% 92.9% 97.5% With fee income 96.9% 94.1% 90.4% 95.3%
[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-----