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 | |
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| | 2005 | | 2004 | |
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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 | |
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| | 2005 | | 2004 | |
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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 | |
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| | | 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 | |
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| | | 495,299 | | | 447,005 | |
Earnings before taxes | | | 17,284 | | | 17,887 | |
Income taxes | | | 6,618 | | | 6,747 | |
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Net earnings | | | 10,666 | | | 11,140 | |
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Average number of diluted shares (000) | | | 18,225 | | | 18,181 | |
Earnings per share - diluted | | | 0.59 | | | 0.61 | |
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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 | |
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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 | |
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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 | |
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| | | 1,197,920 | | | 1,193,353 | |
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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 | |
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| | | 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 | ) |
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Total stockholders’ equity | | | 703,106 | | | 697,313 | |
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| | | | 1,197,920 | | | 1,193,353 | |
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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 /
