EX-99.1 2 e17649ex99_1.txt PRESS RELEASE Exhibit 99.1 Stewart Announces First Quarter Earnings HOUSTON, April 28 /PRNewswire-FirstCall/ -- Stewart Information Services Corporation (NYSE: STC) today reported net earnings of $11.1 million for the three months ended March 31, 2004, compared to net earnings of $19.9 million for the first quarter of 2003. On a diluted per share basis, net earnings were $.61 for the first quarter of 2004, compared to net earnings of $1.11 for the first quarter of 2003. Revenues in the first quarter increased 5 percent to $465 million from $441 million in the same period last year. Title orders for the company for the first quarter of 2004 and the month of March 2004 (adjusted for same number of work days) were each down 17 percent from the same periods in 2003. The decrease in orders was primarily attributable to a decline in refinancing transactions. The decline began in the third quarter of 2003 when mortgage interest rates increased. Rates are currently at a level comparable to a year ago. Despite a 5 percent decrease in title orders, total revenues increased 5 percent in the first quarter of this year because of increased premiums from agencies, home prices and commercial business. Revenues from direct operations declined less than order counts because refinancing transactions represented a larger portion of orders in 2003 and the company earns less revenue on refinancing transactions. Pretax profits declined by 42 percent in the first quarter of 2004 over the same quarter a year ago due to a higher complement of lower margin agency business compared to direct operations. In addition, opening new offices and occupancy costs contributed to lower margins. We continue our focus to increase book value, which grew to $35.17 per share. "Our long-term plan is ongoing. We are increasing higher-margin commercial lines of business, developing, acquiring and using technology to increase productivity for our customers and our associates. We are creating innovative products and packages, maintaining an excellence of service expected by our customers -- all for the goal of enhancing shareholder value," said Stewart Morris, Jr., president and co-chief executive officer. "The purchase of the remaining interest of RealtyAssist this past quarter allows us to more widely distribute a productivity platform for residential real estate agents and brokers. At the same time, it electronically integrates their activities with ours, resulting in increased productivity." Stewart's industry-first home equity transaction bundle is exceeding expectations for sales to customers. Stewart expects its innovative bundling of services to continue growth in multiple rather than single products in the future. "With the acquisition of Title Associates this past quarter, we acquired the pre-eminent commercial title agency in the crucial Manhattan market and gained a major national referral business. Significant commercial transactions will now go to Stewart rather than being shared among the competition. There is no finer team than Title Associates, and we are happy they have joined Stewart," said Malcolm S. Morris, chairman and co-chief executive officer. "Although interest rates have been more favorable than we anticipated for the first quarter of 2004, strong job growth should see rates increase. While that will reduce refinancings in the near term, it supports continued health and growth in residential and commercial markets." Stewart Information Services Corporation is a technology driven, strategically competitive, real estate information and transaction management company. Stewart provides title insurance and related information services through more than 7,400 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, document preparation, property reports and background checks. Stewart also supplies post-closing services to lenders, automated county clerk land records, property ownership mapping, and geographic information systems for governmental entities. Stewart provides expertise in tax-deferred exchanges. More information about Stewart can be found at http://www.stewart.com . This press release may contain forward-looking statements, which include all statements other than statements of historical facts. Forward-looking statements are not guarantees of performance and no assurance can be given that Stewart's expectations will be achieved. In particular, historical order counts do not necessarily indicate future revenues because Stewart cannot predict the number of orders that will result in closings. Stewart Information Services Corporation Three months ended March 31 2004 2003 Revenues $464,892,000 $440,924,000 Net earnings $11,140,000 $19,875,000 Average shares - diluted 18,181,000 17,831,000 Earnings per share: Basic $0.62 $1.12 Diluted $0.61 $1.11 STEWART INFORMATION SERVICES CORPORATION STATEMENTS OF EARNINGS (In thousands of dollars, except per share) Three months ended March 31 2004 2003 Revenues Title insurance: Direct operations 182,534 191,730 Agency operations 257,887 225,565 Real estate information services 17,615 19,050 Investment income 5,152 4,783 Investment gains (losses) - net 1,704 (204) 464,892 440,924 Expenses Amounts retained by agencies 210,052 184,749 Employee costs 134,350 132,002 Other operating expenses 73,981 66,848 Title losses and related claims 19,280 17,956 Depreciation 6,976 5,909 Interest 218 215 Minority interests 2,148 2,338 447,005 410,017 Earnings before taxes 17,887 30,907 Income taxes 6,747 11,032 Net earnings 11,140 19,875 Average number of diluted shares (000) 18,181 17,831 Earnings per share - diluted 0.61 1.11 Segment information: Title revenues 447,277 421,874 Title pretax earnings 16,653 27,942 REI revenues 17,615 19,050 REI pretax earnings 1,234 2,965 Selected financial information (000): Cash flow from operations 25,251 22,538 Title loss payments - net of recoveries 12,940 11,590 Other comprehensive earnings - net of taxes 1,673 872 Average number of basic shares 18,070 17,742 Number of title orders opened 223 263 Mar 31 Mar 31 2004 2003 Stockholders' equity 636,547 515,127 Number of shares outstanding 18,100,000 17,766,000 Book value per share 35.17 29.00 STEWART INFORMATION SERVICES CORPORATION BALANCE SHEETS (condensed) (In thousands of dollars) March 31 December 31 2004 2003 Assets Cash and cash equivalents 101,401 114,202 Short-term investments 146,756 153,322 Investments - statutory reserve funds 387,692 375,421 Investments - other 63,109 59,035 Receivables 66,202 79,025 Property and equipment 77,867 74,174 Title plants 45,473 43,216 Goodwill 97,655 79,084 Other assets 58,839 54,388 1,044,994 1,031,867 Liabilities Notes payable 28,738 24,583 Accounts payable and accrued liabilities 68,468 82,148 Estimated title losses 274,429 268,089 Deferred income taxes 24,185 22,440 Minority interests 12,627 13,219 Contingent liabilities and commitments Stockholders' equity Common and Class B Common Stock and additional paid-in capital 143,514 141,168 Retained earnings 480,246 469,106 Accumulated other comprehensive earnings 16,692 15,019 Treasury stock (3,905) (3,905) Total stockholders' equity 636,547 621,388 1,044,994 1,031,867 April 28, 2004 SOURCE Stewart Information Services Corporation -0- 04/28/2004 /CONTACT: Ted C. Jones, Director - Investor Relations of Stewart Information Services Corporation, +1-713-625-8014/ /Photo: http://www.newscom.com/cgi-bin/prnh/20030429/STEWLOGO AP Archive: http://photoarchive.ap.org PRN Photo Desk, photodesk@prnewswire.com / /Web site: http://www.stewart.com / (STC) CO: Stewart Information Services Corporation ST: Texas IN: FIN RLT SU: ERN