EX-99.1 2 si2556ex991.htm

Exhibit 99.1

Stewart Announces First Quarter Earnings

          HOUSTON, April 28 /PRNewswire-FirstCall/ -- Stewart Information Services Corporation (NYSE: STC) today reported results for the first quarter of 2005. Revenues for the first quarter of 2005 were the highest first quarter revenues in the company’s history.  Revenues were $512.6 million, an increase of 10.3 percent compared to the same period of 2004.  Net earnings for the three months ended March 31, 2005 were $10.7 million, or $0.59 per diluted share, compared to net earnings of $11.1 million, or $0.61 per diluted share, for the first quarter of 2004.

          Book value per share increased 0.8 percent to $38.79 as of March 31, 2005 despite a decline of $4.7 million in the company’s bond portfolio, which resulted from an increase in interest rates.  The unrealized losses in the portfolio were included in other comprehensive earnings, a component of the company’s stockholders’ equity.

          Stewart’s incoming orders in the first quarter of 2005 were down 1.7 percent from the same quarter a year ago.  Orders in the month of March 2005 were down 8.4 percent from the same month of 2004. (These order figures are adjusted to the same number of working days.)

          Although higher-margin commercial transactions increased this year, profit margins decreased slightly in the first quarter compared to the same period of 2004.  Higher employee costs and continued investment in technology-driven products and new services were the primary reasons for the margin decline.

          Acquisitions in higher-cost markets also reduced margins in 2005.  The company believes its on-going investment in technology will drive future market share, productivity and profits.

          “An exciting development this quarter, announced earlier, was the nationwide rollout of PropertyInfo.com, a single point-of-access for real estate information and integrated tools critical to the real estate transaction processes,” said Stewart Morris, Jr., president and co-chief executive officer.  “This site brings together public records, aerial imagery, maps, and data access capabilities needed daily by real estate and title professionals.  Included are access to online title searches and analyses, mapping technology, tax records, document images, geographic information systems, imagery, flood zone determinations and UCC searches.  Data and services vary in depth by locality across the country,” Morris said.

          “Sometime in the second quarter of 2005 we expect to log the one millionth transaction on SureClose®, our 24/7 online system,” added Morris. “SureClose is the most widely used transaction management system in real estate.  This platform has three major benefits: managing documents in the title office, communicating with customers and archiving file information.  We expect continued productivity increases and efficiencies while providing magnificent service to our customers.”


          “A strong development in the first quarter of 2005 was the significant increase in commercial business and profitability generated by our National Title Services (NTS) operations,” said Malcolm S. Morris, chairman and co-chief executive officer.  “This growth is a function of our high-quality and high-performing team members at NTS.  In addition to providing commercial services at 18 NTS offices across the country, NTS also is active in providing nationwide relocation services for corporate and real estate customers.”

          Morris also noted that in the first quarter of 2005 the company acquired title agencies in Alaska, Colorado, Florida, Illinois, Ohio, Oregon and Tennessee.  “We focus on strategic growth locations with high potential,” added Morris.

          Stewart was again included in the FORTUNE 1000 list, ranking number 717 and remains on Standard & Poors’ SmallCap 600 Index and six Russell Indexes.

          Stewart Information Services Corporation (NYSE: STC) is a technology driven, strategically competitive, real estate information and transaction management company.  Stewart provides title insurance and related information services required for settlement by the real estate and mortgage industries through more than 7,800 policy-issuing offices and agencies in the United States and international markets.  Stewart also provides post-closing lender services, automated county clerk land records, property ownership mapping, geographic information systems, property information reports, flood certificates, document preparation, background checks and expertise in tax- deferred exchanges.  More information 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. Stewart Information Services Corporation


 

 

Three months ended
March 31

 

 

 

 

 

 

2005

 

2004

 

 

 

 

 

Revenues

 

$

512,583,000

 

$

464,892,000

 

Net earnings

 

$

10,666,000

 

$

11,140,000

 

Average shares - basic

 

 

18,123,000

 

 

18,070,000

 

Average shares -  diluted

 

 

18,225,000

 

 

18,181,000

 

Earnings per share:

 

 

 

 

 

 

 

Basic

 

$

0.59

 

$

0.62

 

Diluted

 

$

0.59

 

$

0.61

 


STEWART INFORMATION SERVICES CORPORATION
STATEMENTS OF EARNINGS
(Thousands of dollars, except per share)

 

 

Three months ended
March 31

 

 

 

 

 

 

2005

 

2004

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

Title insurance:

 

 

 

 

 

 

 

Direct operations

 

 

212,874

 

 

182,534

 

Agency operations

 

 

275,306

 

 

257,887

 

Real estate information services

 

 

17,627

 

 

17,615

 

Investment income

 

 

6,308

 

 

5,152

 

Investment gains - net

 

 

468

 

 

1,704

 
   
 
 

 

 

 

512,583

 

 

464,892

 

Expenses

 

 

 

 

 

 

 

Amounts retained by agencies

 

 

225,208

 

 

210,052

 

Employee costs

 

 

155,617

 

 

134,350

 

Other operating expenses

 

 

80,997

 

 

73,981

 

Title losses and related claims

 

 

22,131

 

 

19,280

 

Depreciation and amortization

 

 

7,806

 

 

6,976

 

Interest

 

 

617

 

 

218

 

Minority interests

 

 

2,923

 

 

2,148

 
   
 
 

 

 

 

495,299

 

 

447,005

 

Earnings before taxes

 

 

17,284

 

 

17,887

 

Income taxes

 

 

6,618

 

 

6,747

 
   
 
 

Net earnings

 

 

10,666

 

 

11,140

 
   
 
 

Average number of diluted shares (000)

 

 

18,225

 

 

18,181

 

Earnings per share - diluted

 

 

0.59

 

 

0.61

 
   
 
 

Segment information:

 

 

 

 

 

 

 

Title revenues

 

 

494,956

 

 

447,277

 

Title pretax earnings

 

 

15,555

 

 

16,653

 

REI revenues

 

 

17,627

 

 

17,615

 

REI pretax earnings

 

 

1,729

 

 

1,234

 

Selected financial information (000):

 

 

 

 

 

 

 

Cash flow from operations

 

 

14,287

 

 

25,825

 

Title loss payments - net of recoveries

 

 

16,535

 

 

12,940

 

Other comprehensive (losses) earnings - net of taxes

 

 

(5,127

)

 

1,673

 

Number of title orders opened

 

 

212.0

 

 

222.5

 

 

 

Mar 31
2005

 

Dec 31
2004

 

 

 

 

 

Stockholders’ equity

 

 

703,106

 

 

697,313

 

Number of shares outstanding (000)

 

 

18,127

 

 

18,121

 

Book value per share

 

 

38.79

 

 

38.48

 


STEWART INFORMATION SERVICES CORPORATION
BALANCE SHEETS (condensed)
(In thousands of dollars)

 

 

March 31
2005

 

December 31
2004

 

 

 

 

 

Assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

96,856

 

 

121,383

 

Short-term investments

 

 

194,135

 

 

181,195

 

Investments - statutory reserve funds

 

 

402,659

 

 

401,814

 

Investments - other

 

 

69,569

 

 

68,793

 

Receivables

 

 

73,985

 

 

80,277

 

Property and equipment

 

 

83,754

 

 

83,391

 

Title plants

 

 

54,110

 

 

52,679

 

Goodwill

 

 

142,840

 

 

124,636

 

Intangible assets

 

 

18,901

 

 

16,988

 

Other assets

 

 

61,111

 

 

62,197

 
   
 
 

 

 

 

1,197,920

 

 

1,193,353

 
   
 
 

Liabilities

 

 

 

 

 

 

 

Notes payable

 

 

63,844

 

 

49,930

 

Accounts payable and accrued liabilities

 

 

83,376

 

 

101,544

 

Estimated title losses

 

 

306,345

 

 

300,749

 

Deferred income taxes

 

 

26,425

 

 

29,335

 

Minority interests

 

 

14,824

 

 

14,482

 
   
 
 

 

 

 

494,814

 

 

496,040

 

Contingent liabilities and commitments

 

 

 

 

 

 

 

Stockholders’ equity Common and Class B Common Stock and additional paid-in capital

 

 

144,389

 

 

144,135

 

Retained earnings

 

 

553,961

 

 

543,295

 

Accumulated other comprehensive earnings

 

 

8,661

 

 

13,788

 

Treasury stock

 

 

(3,905

)

 

(3,905

)
   
 
 

Total stockholders’ equity

 

 

703,106

 

 

697,313

 
   
 
 
     
1,197,920
    
1,193,353
  
   
 
 

SOURCE  Stewart Information Services Corp.
       -0-                                           04/28/2005
       /CONTACT:  Ted C. Jones, Director - Investor Relations of Stewart
Information Services Corporation, +1-713-625-8014/
       /Web site:  http://www.stewart.com /