Stewart Achieves All-Time Revenue, Earnings Per Share And Earnings Records In Third Quarter (2002)

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HOUSTON, Oct. 24 2002 -- Stewart Information Services Corporation (NYSE: STC) reported all-time record highs for revenues, earnings, earnings per share and orders for any quarter in the history of the company. Earnings for the three months ended September 30, 2002 were $21.6 million compared to $13.0 million for the third quarter of 2001. On a diluted per share basis, net earnings were $1.22 for the third quarter of 2002 compared to $.78 for the third quarter of 2001. Revenues in the third quarter increased 39 percent to $473 million from $340 million in the same period last year.

For the nine months ended September 30, 2002, Stewart earned $50.7 million, or $2.84 per diluted share, compared to $31.5 million, or $1.99 per diluted share, for the same nine-month period in 2001. Revenues year-to-date increased from a year ago by 36 percent to $1.2 billion.

Title orders in the third quarter of 2002 were 248,000, an all-time high for any quarter in the company's history. Orders for the month and quarter ended September 30, 2002 were 66 percent and 57 percent higher, respectively, than the same periods a year ago, boding well for the fourth quarter.

"Robust housing demand and all-time high refinance volume driven by an ongoing low interest rate environment continue to produce strong earnings," said Stewart Morris, Jr., president and co-chief executive officer. "The higher-margin commercial business continues to recover with volume having increased significantly over the same period last year in closings and transactions pending. Our decision to hire key people in 2000 in the commercial arena is reaping significant benefits.

"We are excited that SureClose®, Stewart's e-delivery and e-commerce platform, is now out of beta testing and being actively rolled out. We already have more than 78 offices with this platform. SureClose is an electronic transaction folder facilitating communication to all parties of a real estate transaction. All parties to the transaction are able to track the closing process, receive electronic notification of scheduled and completed events and view documents prior to closing, 24-hours a day, seven days a week. This Internet-based e-commerce site saves time, reduces expenses, streamlines the closing process and helps build solid long-term business relations with our customers," said Stewart Morris, Jr.

"Our majority interest in the electronic real estate auction company, RealtyBid.com, provides a unique venue for sellers of real estate to efficiently and cost effectively sell property," said Malcolm S. Morris, chairman and co-chief executive officer. "We believe that this transaction medium has a substantial growth potential and drives business to our company for title insurance, closing and escrow services, flood certificates and electronically delivered closing documents.

"Online Documents, Inc., (ODI), Stewart's electronic document company, enables lenders to close loans with digital signatures and deliver the loans to the secondary market. This past quarter ODI announced the availability of three-part XHTML documents, meeting Fannie Mae's advanced delivery requirements and specifications," added Malcolm Morris.

Stewart Information Services Corporation is a technology driven, strategically competitive, global real estate information company. Stewart provides title insurance and related information services through more than 6,200 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, property appraisals, surveys, document preparation, property reports and background checks. Stewart also supplies post-closing services to lenders, automated county clerk land records 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.

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SUMMARY OF OPERATIONS

Stewart Information Services Corporation



 

Three months

 

ended September 30

 

20022001

     

Revenues

$473,413,000

$340,154,000

Net earnings

$21,597,000

 

Average shares - diluted

17,729,000

16,751,000

Earnings per share:

   

Basic

$1.22

$0.78

Diluted

 

$1.22

$0.78




 

Nine months

 

ended September 30

 

20022001

     

Revenues

$1,228,515,000

$901,528,000

Net earnings

$50,652,000

$31,514,000

Average shares - diluted

17,836,000

15,806,000

Earnings per share:

   

Basic

$2.86

$2.01

Diluted

$2.84

$1.99

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

 

20022001

20022001

Revenues

Title Insurance

       
Direct operations
175,395

134,901

474,623

371,515

Agency operations

275,398

183,893

687,941

467,377

 

450,793

318,794

1,162,564

838,892

Real estate information services

18,376

16,240

51,624

47,073

Investment income
5,665
4,748
15,161
14.793
Investment (losses) gains - net
(1,421)
372
(834)
770
 

473,413

340,154

1,228,515

901,528

Expenses

Amounts retained by agents

228,384

151,830

565,233

383,145

Employee costs

114,898

94,453

325,442

264,721

Other operating expenses

65,925

50,241

180,236

142,570

Title losses and related claims

20,882

13,243

51,950

34,755

Depreciation

5,196

5,171

15,824

14,668

Goodwill

---

540

---

1,909

Interest

246

605

761

2,048

Minority interests

2,445

1,792

6,509

5,188

 

437,976

317,875

1,145,955

849,004

Earnings before
taxes

35,437

22,279

82,560

52,524

Income taxes

13,840

9,276

31,908

21,010

Net earnings

21,597

13,003

50,652

31,514

Average number shares outstanding (000)

17,729

16,751

17,836

15,806

Earnings per share - diluted

1.22

.78

2.84

1.99

 

Segment information:

Title revenues

455,037

323,914

1,176,891

854,455

Title pretax earnings

32,064

20,322

75,746

47,620

REI revenues

18,376

16,240

51,624

47,073

REI pretax earnings

3,373

1,957

6,814

4,904

 

Selected financial information (000):

Cash flow from operations

49,833

36,269

92,418

80,835

Title loss payments - net
of recoveries

9,490

5,998

33,136

26,473

Other comprehensive earnings-net of taxes

5,857

2,633

7,211

3,693

Average number of basic shares

17,637

16,600

17,740

15,657

Number of title orders opened

248

155

594

475

 

Tangible book value, excluding goodwill
($22.29 per share at September 30, 2002)

STEWART INFORMATION SERVICES CORPORATION
BALANCE SHEETS (condensed)

(In thousands of dollars)

 

 

Sept 30

Dec 31

 

2002

2001

Assets

Cash and cash equivalents

98,470

60,706

Short-term investments

63,314

56,267

Investments-statutory reserve funds

290,041

206,150

Investments-other

67,454

86,046

Receivables

54,448

52,036

Property and equipment

49,673

48,772

Title plants

40,235

37,715

Goodwill

57,382

52,971

Deferred income taxes

---

4,288

Other

42,605

39,978

 

763,622

677,863

Liabilities

Notes payable

677,863

13,794

Accounts payable and
accrued liabilities

56,766

57,752

Deferred income taxes
6,661
---

Estimated title losses

221,358

202,544

Minority interests

10,085

9,233

Contingent liabilities and commitments

Stockholders' equity

Common and Class B Common Stock and
additional paid-in capital

133,913

133,157

Retained earnings

309,195

258,746

Accumulated other comprehensive
earnings

11,360

4,149

Treasury stock

(3,905)

(1,512)

Total stockholders' equity
($25.55 per share at Sept 30, 2002)

450,563

394,540

 

763,622

677,863

April 25, 2002

 

 

 

 


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