Stewart Announces Third Quarter Results

Subscribe to RSS Feed
• What is RSS?

HOUSTON (October 24, 2001) -- Stewart Information Services Corporation (NYSE-STC) reported net earnings for the three months ended September 30, 2001 of $13.0 million, compared to $1.8 million for the third quarter of 2000. On a diluted per share basis, net earnings were $.78 for the third quarter of 2001 compared to $.12 for the third quarter of 2000. Revenues in the third quarter increased 42 percent to $339 million from $239 million in the same period last year. Revenues were an all-time record for any quarter in the history of the company. 

For the nine months ended September 30, 2001, Stewart earned $31.5 million, or $1.99 per diluted share, compared to net earnings of $0.3 million, or $.02 per diluted share, for the same nine-month period in 2000. Revenues year-to-date increased 34 percent to $897 million.

“While none of our associates were harmed in the September 11 attack on our country, several friends and business associates were lost. We will pray for and remember the victims, their families and friends”, said Stewart Morris, Jr., president and co-chief executive officer. 

“Like most businesses in the United States, we experienced a slowdown for several days after the attack. Our managers describe the market as one where homebuyers did not look at real estate for a week or more. Many closings were delayed. Others waited to determine the impact of the Fed's reduction of interest rates expected at their next meeting on October 2nd. Rates were reduced 50 basis points at the meeting. A significant number of commercial deals were put on hold. As a result, many closings expected to occur in September were postponed to October.”

While closings were slower in relation to the number of orders, the number of orders remained strong. Our title orders in the third quarter were 155,000, an all-time high for any third quarter in our history. Orders in the month and quarter ended September 30, 2001 were 60 percent and 50 percent higher, respectively, than the same periods a year ago, boding well for the fourth quarter.

Market dynamics changed significantly during the past quarter due to a continuing decline in interest rates that set the stage for a potential record in refinance activity. The 30-year fixed-rate residential mortgage rate dropped 47 basis points between July and the end of the quarter, and approached the lowest level since October 1998. “We actively monitor order counts and the resulting staffing requirements. The large increase in refinance business is an offsetting factor to the prospect of near-term seasonal decline in housing sales and residential construction activity.”

“Our balance sheet is in the best condition ever following the completion of a successful add-on stock offering in August. We sold 2.5 million shares of common stock at $19 per share netting $45 million in cash,” said Malcolm S. Morris, chairman and co-chief executive officer. “This reduced our debt to equity ratio to 5 percent putting us in a better position for our ongoing acquisition program which is guided by our determination to generate a greater return on investment for shareholders.” The addition of each new title agent drives down our average per-office technology expense while requiring no new capital investment in our stable of nine underwriters. 

“We are proud to have been added to the Standard and Poor's Small Cap 600 Index in the first week of October 2001,” added Malcolm S. Morris. "The investment we made in strategic moves in 2000 continues to produce long-term benefits for our shareholders and growing recognition in the investment community.

“We reiterate our commitment to providing customers quality service through industry leading technology while at the same time enhancing shareholder value. We continue our systematic migration to TitleLogix™, one of the industry's first application service providers (ASP). Our ASP allows rapid move of a title agency to an integrated technology system increasing individual productivity with reduced costs, staffing and flexibility. Our strategy is for continued growth in market share, commercial business and international expansion while maintaining the top financial rating of the largest companies in the industry.”

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 5,600 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.

This press release may contain forward-looking statements, which include all statements other than statements of historical fact. 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 Sept 30

 

2001 2000

     

Revenues................

$338,741,000

$239,004,000

Net earnings............

$13,003,000

$1,758,000

Average shares - diluted..

16,751,000

15,018,000

Earnings per share:

   

Basic...................

$ 0.78

$ 0.12

Diluted.................

$ 0.78

$ 0.12

 

Nine months

 

ended Sept 30

 

2001 2000

     

Revenues.................

$897,289,000

$671,877,000

Net earnings

$ 31,514,000

$278,000

Average shares - diluted.......

15,806,000

14,913,000

Earnings (loss) per share:

   

Basic...................

$ 2.01

$ 0.02

Diluted.................

$ 1.21

$ 0.02

 

 

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

 

2001 2000

2001 2000

Revenues

Title premiums, fees and other revenues....

316,600

220,201

832,814

618,663

Real estate information services..............

17,021

14,019

48,912

39,246

Investment income................

4,748

4,777

14,793

14,248

Investment gains (losses) - net...........

372

7

770

(280)

 

338,741

239,004

897,289

671,877

         

Expenses

Amounts retained by agents................

150,417

100,514

378,906

280,771

Employee costs.................

94,453

75,398

264,721

217,208

Other operating expenses..............

50,241

43,465

142,570

125,013

Title losses and related claims...........

13,243

9,340

34,755

27,447

Depreciation..........

5,171

5,172

14,668

14,444

Goodwill
amortization..........

540

403

1,909

1,357

Interest..............

605

497

2,048

1,364

Minority interests.............

1,792

1,341

5,188

3,786

 

316,462

236,130

844,765

671,390

Earnings before taxes..............

22,279

2,874

52,524

487

Income taxes.................

9,276

1,116

21,010

209

Net earnings..................

13,003

1,758

31,514

278

Average number shares outstanding (000)....

16,751

15,018

15,806

14,913

Earnings per share - diluted.......

.78

.12

1.99

.02

 

Segment information:

Title revenues..............

321,720

224,985

848,377

632,631

Title pretax earnings..............

20,194

3,945

47,325

4,392

REI revenues.............

17,021

14,019

48,912

39,246

REI pretax earnings (loss).............

2,085

(1,071)

5,199

(3,905)

Selected financial information (000):

Premiums earned from agents.............

182,018

124,581

461,752

347,873

Title loss payments ? net...............

5,998

10,542

26,473

26,133

Change in unrealized investment gains - net of taxes...............

2,633

1,701

3,693

2,097

Average number of basic shares..........

16,600

14,921

15,657

14,815

Number of title orders opened...........

155

103

475

311

         
         

STEWART INFORMATION SERVICES CORPORATION

BALANCE SHEETS (condensed)

(In thousands of dollars)

 

 

Sept 30

Dec 31

 

2001

2000

 

Assets

Cash and cash equivalents.............................

59,762

35,728

Short-term investments.............................

61,031

53,748

Investments - statutory reserve funds...................................

235,410

206,150

Investments - other..............................

85,405

52,242

Receivables.............................

44,749

57,039

Property and equipment..................

45,235

45,459

Title plants............................

37,668

32,491

Goodwill................................

44,956

36,693

Deferred income taxes...................

3,370

7,352

Other...................................

37,094

36,546

 

654,680

563,448

Liabilities

Notes payable.................................

16,614

32,543

Accounts payable and accrued liabilities.........

52,418

38,617

Estimated title losses..................................

199,094

190,298

Minority interests...............................

7,921

6,901

Contingent liabilities and commitments

Stockholders' equity

Common and Class B Common Stock and

additional paid-in capital.............

132,990

84,653

Retained earnings......................

241,574

210,060

Accumulated other comprehensive earnings...............................

5,581

1,888

Treasury stock...................................

(1,512)

(1,512)

Total stockholders' equity

($21.30 per share at Sept 30, 2001)............

378,633

295,089

 

654,680

563,448

October 24, 2001

 


click here to view 2014 news releases
click here to view 2013 archived news releases
click here to view 2012 archived news releases
click here to view 2011 archived news releases
click here to view 2010 archived news releases
click here to view 2009 archived news releases
click here to view 2008 archived news releases
click here to view 2007 archived news releases
click here to view 2006 archived news releases
click here to view 2005 archived news releases
click here to view 2004 archived news releases
click here to view 2003 archived news releases
click here to view 2002 archived news releases
click here to view 2001 archived news releases
click here to view 2000 archived news releases