-----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, S6zhG7xwEWqgy/HQkJGlzRlP4v1ypFCPaLlD6mbAekONqisVDV0I7hY3RbUjvs0n EKgHs2KJYsn6Aq3SbeieEg== 0000891092-04-005108.txt : 20041027 0000891092-04-005108.hdr.sgml : 20041027 20041027100515 ACCESSION NUMBER: 0000891092-04-005108 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041027 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041027 DATE AS OF CHANGE: 20041027 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STEWART INFORMATION SERVICES CORP CENTRAL INDEX KEY: 0000094344 STANDARD INDUSTRIAL CLASSIFICATION: TITLE INSURANCE [6361] IRS NUMBER: 741677330 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-02658 FILM NUMBER: 041098235 BUSINESS ADDRESS: STREET 1: 1980 POST OAK BLVD CITY: HOUSTON STATE: TX ZIP: 77056 BUSINESS PHONE: 7136258100 MAIL ADDRESS: STREET 1: 1980 POST OAK BLVD CITY: HOUSTON STATE: TX ZIP: 77056 8-K 1 e19458_8k.txt FORM 8-K ================================================================================ 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 27, 2004 STEWART INFORMATION SERVICES CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 74-1677330 (STATE OR OTHER 1-12688 (I.R.S. EMPLOYER JURISDICTION) (COMMISSION FILE NO.) IDENTIFICATION NO.) 1980 Post Oak Blvd, Houston, Texas 77056 (Address Of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code: (713) 625-8100 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: |_| 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 CFR 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 240.13a-4(c)) ================================================================================ ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS (c) EXHIBITS Exhibit No. Description - ----------- ----------- 99.1 Press release of Stewart Information Services Corporation dated October 27, 2004, reporting financial results for the three and nine months ended September 30, 2004 ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. A press release issued by Stewart Information Services Corporation on October 27, 2004 regarding financial results for the nine months ended September 30, 2004 is attached hereto as Exhibit 99.1, and the first paragraph and second paragraphs thereof and the financial tables therein are incorporated herein by reference. 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. SIGNATURE 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 thereunto duly authorized. STEWART INFORMATION SERVICES CORPORATION (Registrant) By: /S/ Max Crisp ------------------------------------------- (Max Crisp, Executive Vice President, Secretary-Treasurer, Director and Principal Financial and Accounting Officer) Date: October 27, 2004 EX-99.1 2 e19463ex99_1.txt PRESS RELEASE Exhibit 99.1 Stewart Reports Earnings for Third Quarter HOUSTON, Oct. 27 /PRNewswire-FirstCall/ -- Stewart Information Services Corporation (NYSE: STC) reported net earnings of $21.1 million, or $1.16 per diluted share, for the three months ended September 30, 2004, versus net earnings of $42.1 million, or $2.34 per diluted share, for the third quarter of 2003. Revenues in the third quarter decreased 16 percent to $530 million from $629 million for the same period last year. The growth in book value continued to $37.76 per share as of September 30, 2004 -- an all time record. Total revenues for the first nine months of 2004 were $1.6 billion, down 4 percent from the same period a year ago. Earnings for the first nine months totaled $62.2 million, or $3.42 per diluted share, versus $103.0 million, or $5.74 per diluted share, for the first nine months of 2003. "SureClose(R), our transaction management system, continues to grow in number of users and is our vehicle to go paperless in the title office," said Stewart Morris, Jr., president and co-chief executive officer. "It is also our method of delivering products, communicating on files and archiving closed files. SureClose is the most significant new technology in our tool kit. We make enhancements continually. We are now adding more than 20,000 documents to SureClose each working day. The system also proved itself as to security during the three hurricanes that recently tracked across Florida. Although twenty-one of our Florida offices incurred some operational interruption from hurricane damage, our customers and associates had immediate access to their files via the Internet. Paperless transactions are now a reality when using the latest SureClose release. Our company continues to enhance current systems and add new applications to improve customer service and associate effectiveness." "Accolades for our financial performance continued in this past quarter," said Malcolm S. Morris, chairman of the board and co-chief executive officer. "Stewart was ranked 31st in Fortune magazine's list of the 100 fastest growing companies. We have been included on the Forbes Platinum 400 Companies -- the best big companies in the US, and as a member of the Fortune 1000, Russell 2000, 2500 and 3000 Value Indexes and Russell 2000, 2500 and 3000 Indexes. We also are on the S&P Small Cap 600. Sandler O'Neill & Partners, L.P. included Stewart in their first-ever Premium Players List for 2004, made up of the top 30 insurance companies that have consistently demonstrated exceptional growth and profitability and above-average performance in the past five years." "Although tight inventory levels in many high end residential markets have moderated, the forecast for the upscale market continues to be strong," reported Laurie Moore-Moore, Stewart advisory director and president of The Institute for Luxury Home Marketing. "The affluent are still shifting dollars into real estate from other investments, home prices are rising, and luxury home demand is very healthy." Title orders per working day for the third quarter of 2004 were down 13 percent from the same period in 2003 primarily due to the decrease in refinancing transactions. Beginning in July 2003, orders fell to lower levels because of an increase in mortgage interest rates. However, in August and September 2004, interest rates averaged 30 to 40 basis point less than the same period last year. In September 2004, orders were up 4 percent over the same month a year ago. Operating profit margins decreased year-over-year due primarily to the fixed nature of most of the company's operating costs. Margins were also reduced due to the company's investments in growth, technology, new services and new offices. Employee costs are the largest component of the company's operating costs, excluding title agency retentions. Employee counts and order counts are monitored on a regular basis. However, the company's strategy is not to overreact to either increases or decreases in transaction volumes. Instead, the company works to maintain good service to its customers through a reasonably stable, dedicated employee work force allowing for continued growth. The company continues to emphasize gaining commercial business, acquiring companies with higher margins and expanding internationally. The company believes these strategies will position it for future growth, diversification and strength. 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 7,800 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 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. SUMMARY OF OPERATIONS Stewart Information Services Corporation Three months ended September 30 2004 2003 Revenues $529,663,000 $629,388,000 Net earnings $21,138,000 $42,068,000 Average shares - diluted 18,195,000 18,006,000 Earnings per share: Basic $1.17 $2.35 Diluted $1.16 $2.34 Nine months ended September 30 2004 2003 Revenues $1,560,011,000 $1,628,387,000 Net earnings $62,239,000 $102,973,000 Average shares - diluted 18,190,000 17,937,000 Earnings per share: Basic $3.44 $5.78 Diluted $3.42 $5.74 STEWART INFORMATION SERVICES CORPORATION STATEMENTS OF EARNINGS (In thousands of dollars, except per share amounts) Three months Nine months ended Sept 30 Ended Sept 30 2004 2003 2004 2003 Revenues Title insurance: Direct operations 224,814 261,063 648,913 692,938 Agency operations 282,988 340,961 841,470 858,545 Real estate information services 16,001 21,683 51,340 61,567 Investment income 5,920 5,262 16,242 14,580 Investment gains (losses) - net (60) 419 2,046 757 529,663 629,388 1,560,011 1,628,387 Expenses Amounts retained by agencies 229,525 279,678 684,980 703,462 Employee costs 149,542 157,192 436,345 436,372 Other operating expenses 79,600 86,727 235,328 226,174 Title losses and related claims 25,194 25,894 70,281 66,561 Depreciation 7,723 6,422 22,981 18,499 Interest 309 202 799 563 Minority interests 3,707 4,755 9,715 11,237 495,600 560,870 1,460,429 1,462,868 Earnings before taxes 34,063 68,518 99,582 165,519 Income taxes 12,925 26,450 37,343 62,546 Net earnings 21,138 42,068 62,239 102,973 Average number of shares outstanding (000) 18,195 18,006 18,190 17,937 Earnings per share - diluted 1.16 2.34 3.42 5.74 Segment information: Title revenues 513,662 607,705 1,508,671 1,566,820 Title pretax earnings 33,724 63,865 97,127 153,281 REI revenues 16,001 21,683 51,340 61,567 REI pretax earnings 339 4,653 2,455 12,238 Selected financial information (000): Cash flow from operations 58,887 73,050 143,697 156,656 Title loss payments - net of recoveries 13,237 15,564 46,216 39,340 Other comprehensive income (loss), net of taxes 5,880 (2,316) (2,493) 4,326 Average number of basic shares 18,102 17,893 18,092 17,826 Number of title orders opened 205 238 649 816 Sept 30 Dec 31 2004 2003 Stockholders' equity 683,556 621,389 Number of shares outstanding 18,102 18,026 Book value per share 37.76 34.47 STEWART INFORMATION SERVICES CORPORATION BALANCE SHEETS (condensed) (In thousands of dollars) Sept 30 Dec 31 2004 2003 Assets Cash and cash equivalents 113,878 114,202 Short-term investments 192,014 153,322 Investments - statutory reserve funds 399,131 375,421 Investments - other 71,726 59,035 Receivables 64,605 79,025 Property and equipment 78,296 74,174 Title plants 52,109 43,216 Goodwill 112,012 79,084 Other 62,601 54,388 1,146,372 1,031,867 Liabilities Notes payable 40,035 24,583 Accounts payable and accrued liabilities 91,663 82,147 Estimated title losses 292,154 268,089 Deferred income taxes 24,439 22,440 Minority interests 14,525 13,219 Contingent liabilities and commitments Stockholders' equity Common and Class B Common Stock and additional paid-in capital 143,589 141,168 Retained earnings 531,346 469,107 Accumulated other comprehensive earnings 12,526 15,019 Treasury stock (3,905) (3,905) Total stockholders' equity 683,556 621,389 1,146,372 1,031,867 October 27, 2004 SOURCE Stewart Information Services Corporation -0- 10/27/2004 /CONTACT: Ted C. Jones, Director-Investor Relations of Stewart Information Services Corporation, +1-713-625-8014/ /Web site: http://www.stewart.com / (STC) CO: Stewart Information Services Corporation ST: Texas IN: FIN RLT SU: ERN -----END PRIVACY-ENHANCED MESSAGE-----