Second Highest Quarterly Earnings in Company's History
CHICAGO, July 26 /PRNewswire/ -- Chicago Title Corporation (NYSE: CTZ), a
leading provider of title insurance and real estate-related services, today
announced revenues and earnings for the second quarter and six months ended
June 30, 1999.
Net income of $30.1 million in second quarter of 1999 was exceeded in the
Company's history only by net income from continuing operations of
$31.9 million recorded in the same period in 1998, excluding costs associated
with the Company's spin-off in June 1998. On both a basic and diluted basis,
net income per share in the 1999 three-month period was $1.38, compared to
$1.46 for the year earlier period, excluding costs associated with the
spin-off. Total revenues for the second quarter of 1999 were $528.3 million,
a 10.6 percent increase from the second quarter of 1998.
Net income for the first six months of 1999 was $53.3 million compared to
net income from continuing operations of $53.5 million in the year earlier
period, excluding costs associated with the spin-off. On both a basic and
diluted basis, net income per share in the 1999 six-month period was $2.44,
compared to $2.44 for the same period in 1998, excluding costs associated with
the spin-off. Total revenues for the six months ended June 30, 1999 were
$1,017.8 million, a 15.8 percent increase from the same period last year.
John Rau, President and Chief Executive Officer, stated, "We're pleased
with these results, which represent the second best quarterly earnings
performance in Chicago Title's long history. Revenues from housing purchases
remain quite strong, more than offsetting the decline in refinancings, which
returned to more normal levels during the quarter. Our commercial markets
also continued at a very healthy pace."
In June 1998, Chicago Title was spun off from Alleghany Corporation and
became an independent, publicly traded company. Prior to the spin-off,
Chicago Title performed trust and asset management services through a
subsidiary, Alleghany Asset Management, Inc. This subsidiary remained with
Alleghany after the spin-off. Accordingly, the results of operation of this
subsidiary in 1998 are reported in Chicago Title's statements of income as
discontinued operations. As a result of the spin-off, Alleghany Asset
Management made no contribution to 1999 results. Net income from discontinued
operations was $4.0 million, or $0.18 per basic and diluted share, in the
second quarter of 1998. For the six months ended June 30, 1998, net income
from discontinued operations was $9.0 million, or $0.41 per basic and diluted
share.
Rau commented further, "For the quarter we made solid progress on our
strategic initiatives. Our Electronic Spine will be entering its pilot phase
over the next month and is scheduled for full production by year-end. This
important project will allow for the electronic receipt, tracking and delivery
of multiple products across our national network of offices and agents."
In March 1999, Chicago Title announced a program to repurchase up to
5 percent of its outstanding stock, or 1.1 million shares. As of June 30,
1999, the company had acquired 247,800 shares under this program. Chicago
Title's stockholders' equity per share was $21.98 as of June 30, 1999.
Chicago Title Corporation is a leading national real estate services
company that provides a full range of services required to complete real
estate transactions. With over 340 full service offices, 10,000 employees and
4,300 policy-issuing agents nationwide, it provides title insurance, escrow,
closing services, property valuation, credit reporting, flood compliance, home
warranty, default management and real estate information and technology
services. Chicago Title is the parent of Chicago Title and Trust Company and
Security Union Title Insurance Company. A comprehensive package of real
estate services is available through CastleLink(SM), which delivers title
products as well as the products of Chicago Title Flood Services, Inc.,
Chicago Title Credit Services Inc., Chicago Title-Market Intelligence Inc.,
Chicago Title Field Services Inc. and Consolidated Reconveyance.
The statements made in this press release contain certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Act of 1934 that involve a number of
uncertainties and risks that could significantly affect current plans and
anticipated actions and Chicago Title's future financial condition and
results. In addition to the matters described in this press release, risk
factors listed from time to time in Chicago Title's reports and filings with
the Securities and Exchange Commission may affect the results achieved by
Chicago Title.
Chicago Title Corporation and Subsidiaries
Financial Summary
(dollars in thousands, except for shares and per share data)
Three Months Ended Six Months Ended
6/30/99 6/30/98 6/30/99 6/30/98
REVENUES
Title, escrow, trust
and other revenue $513,026 $461,757 $984,836 $847,561
Investment income 15,070 15,748 31,677 30,553
Net realized
investment gains-
other 215 167 1,249 538
Total revenues 528,311 477,672 1,017,762 878,652
EXPENSES
Salaries and other
employee benefits (A)161,478 167,021 315,011 294,624
Commissions paid to
agents 179,947 153,743 352,143 285,233
Provision for title
losses 31,676 30,467 61,493 56,746
Interest expense 950 1,110 2,029 2,405
Other operating and
administrative
expenses (B) 108,929 104,110 206,615 186,383
Total expenses 482,980 456,451 937,291 825,391
Operating income from
continuing operations
before income taxes 45,331 21,221 80,471 53,261
Income taxes 15,269 10,518 27,220 21,317
Net income from
continuing operations 30,062 10,703 53,251 31,944
Net income from
discontinued
operations (C) -- 4,034 -- 9,013
Net income $30,062 $14,737 $53,251 $40,957
Basic and diluted
earnings per share
Continuing operations $1.38 $0.49 $2.44 $1.46
Discontinued
operations (C) -- 0.18 -- 0.41
Net income $1.38 $0.67 $2.44 $1.87
Impact of spin-off
costs
Net income from
continuing
operations $30,062 $10,703 $53,251 $31,944
Spin-off costs,
net of tax -- 21,196 -- 21,563
Net income from
continuing
operations,
excluding
spin-off costs $30,062 $31,899 $53,251 $53,507
Basic and diluted
earnings per share
Net income from
continuing
operations $1.38 $0.49 $2.44 $1.46
Spin-off costs,
net of tax -- 0.97 -- 0.98
Net income from
continuing
operations,
excluding
spin-off costs $1.38 $1.46 $2.44 $2.44
Weighted average
number of shares
of common stock
outstanding 21,783,000 21,907,000 21,834,000 21,907,000
See following footnotes.
Chicago Title Corporation and Subsidiaries
Financial Summary (Continued)
(dollars in thousands, except for shares and per share data)
Three Months Ended Six Months Ended
6/30/99 6/30/98 6/30/99 6/30/98
Other data
Depreciation and
amortization $14,503 $8,621 $27,218 $16,935
Claims paid, net
of recoveries 16,231 15,843 33,623 37,064
Selected balance
sheet information 6/30/99 12/31/98
Total assets $2,029,456 $1,881,759
Bank and other
long term debt 21,487 21,648
Reserve for title
losses 646,535 618,831
Total stockholders'
equity 478,385 461,592
Stockholder's
equity per share 21.98 21.07
(A) For the six months ended June 30, 1998, salaries and other employee
benefits included $19.5 million in direct costs associated with the
spin-off for executive compensation and $3.7 million in related
managerial restructuring expenses.Both amounts are shown on a
pre-tax basis.
(B) For the six months ended June 30, 1998, other operating and
administrative expenses included $5.4 million on a pre-tax basis for
professional fees, printing costs, listing fees and other expenses
directly associated with the spin-off.
(C) Results of Alleghany Asset Management are shown as discontinued
operations for all periods presented.
SOURCE Chicago Title Corporation
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Related links:
http://www.ctt.com
CONTACT:
Analysts, Toshie Y. Davis, Vice President,
Investor Relations, 312-223-4788, or Media, Barbara Harms, Vice
President, Corporate Communications, 312-223-2461, both of
Chicago Title Corp.
NOTE TO EDITORS: For further information on Chicago Title's
products and services, visit our web side at http://www.ctt.com .
For more information on Chicago Title Corporation via fax, free
of charge, dial 1-800-PRO-INFO and enter the ticker "CTZ"
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