-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U0hkLtdD7S+bhnS3WAlMn1obh4PrPnY3E9bbwgIIIa22VQe9Fu7SZrgSCOelU38K jk2JlRZWZPIuCcQndrGktg== 0000009346-06-000027.txt : 20061106 0000009346-06-000027.hdr.sgml : 20061106 20061106093711 ACCESSION NUMBER: 0000009346-06-000027 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20061102 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061106 DATE AS OF CHANGE: 20061106 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BALDWIN & LYONS INC CENTRAL INDEX KEY: 0000009346 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 350160330 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-05534 FILM NUMBER: 061188830 BUSINESS ADDRESS: STREET 1: 1099 N MERIDIAN ST STREET 2: STE 700 CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176369800 MAIL ADDRESS: STREET 1: 1099 NORTH MERIDIAN ST STREET 2: STE 700 CITY: INDIANAPOLIS STATE: IN ZIP: 46204 FORMER COMPANY: FORMER CONFORMED NAME: BALDWIN H C AGENCY INC DATE OF NAME CHANGE: 19720309 8-K 1 pr8k093006.txt BALDWIN & LYONS, INC. 11/2/06 EARNINGS 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ------------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 ------------------------- Date of Report (Date of earliest event reported) November 2, 2006 BALDWIN & LYONS, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Indiana 0-5534 35-0160330 - -------------------------------------------------------------------------------- (State or other jurisdiction of (Commission (IRS Employer incorporation or organization) File Number) Identification No.) 1099 NORTH MERIDIAN STREET, INDIANAPOLIS, INDIANA 46204 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (317) 636-9800 ---------------------------- NOT APPLICABLE - -------------------------------------------------------------------------------- (Former name of former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CRF 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d- 2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e- 4(c)) 2 ITEM 7.01 REGULATION FD DISCLOSURE The following information, including the Exhibit to this Form 8-K, is being furnished pursuant to Item 2.02 - Results of Operations and Financial Condition of Form 8-K and is being presented under Item 7.01 of Form 8-K. This information is not deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 and is not incorporated by reference into any Securities Act registration statements. On November 2, 2006, Baldwin & Lyons, Inc. (Baldwin) issued a press release announcing the results of its operations for the third quarter ended September 30, 2006. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K and incorporated by reference to this Item 9.01 as if fully set forth herein. Throughout its press release and in the conference call to discuss the results of its operations for the third quarter 2006, Baldwin presents and will present its results and operations in the manner it believes will be the most meaningful, which includes some measures that are not based on accounting principles generally accepted in the United States (GAAP). Baldwin management uses the term OPERATING REVENUE, a non-GAAP financial measure, which is defined as REVENUE EXCLUDING PRE-TAX INVESTMENT GAINS AND LOSSES. It also uses the term OPERATING INCOME which is defined as NET INCOME EXCLUDING AFTER TAX INVESTMENT GAINS AND LOSSES. These financial measures are used to evaluate the Company's performance because the recognition of investment gains and losses in any given period is largely discretionary as to timing and could distort the analysis of trends. Baldwin believes that the defined terms are used commonly in the property/casualty insurance industry and that equity analysts and the Company's significant shareholders exclude gains and losses on investments in their analysis of Baldwin's results for the same reason. The combined ratios and the components thereof, as presented herein, are commonly used in the property/casualty insurance industry and are applied to the Company's GAAP underwriting results. A copy of this press release is also posted on the Company's website. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits. 99.1 Baldwin & Lyons, Inc. press release dated November 2, 2006. SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BALDWIN & LYONS, INC. November 6, 2006 By /s/ GARY W. MILLER -------------------------- Gary W. Miller, Chairman and CEO (Chief Operating Officer) EX-99 2 exh-9913q06.txt BALDWIN & LYONS, INC. EARNINGS RELEASE 1 Exhibit 99.1 [GRAPHIC OMITTED][GRAPHIC OMITTED] BALDWIN & LYONS, INC. PROTECTIVE INSURANCE COMPANY SAGAMORE INSURANCE COMPANY B & L INSURANCE, LTD. (BERMUDA) - -------------------------------------------------------------------------------- 1099 North Meridian Street Indianapolis, IN 46204 (317) 636-9800 Subj: Baldwin & Lyons, Inc. November 2, 2006 Unaudited Third Quarter Report Press Contact: G. Patrick Corydon (317) 636-9800 corydon@baldwinandlyons.com BALDWIN & LYONS ANNOUNCES RECORD OPERATING INCOME FOR QUARTER AND NINE MONTHS AND RECORD YEAR-TO-DATE NET INDIANAPOLIS, INDIANA, NOVEMBER 2, 2006--Baldwin & Lyons, Inc. (Nasdaq: BWINA, BWINB) today announced record third quarter operating income, defined as net income before investment gains or losses, of $8.0 million, or $.53 per share, compared to an operating loss of $.8 million, or $.05 per share, reported in 2005. The 2005 period was adversely impacted by losses, totaling $.57 per share after tax, from hurricanes Katrina and Rita. Investment gains totaled $1.9 million, or $.12 per share, during the current quarter and compare to investment gains of $5.4 million, or $.36 per share, in the prior year quarter. Including investment gains, third quarter net income was $9.9 million, or $.65 per share, compared to $4.7 million, or $.31 per share, for the third quarter of 2005. For the nine months ended September 30, 2006, operating income totaled a record $21.1 million, or $1.41 per share, compared to $13.5 million, or $.91 per share, reported a year earlier. Investment gains totaled $5.7 million, or $.38 per share, in the 2006 period compared to investment gains of $10.7 million a year earlier. Including investment gains, net income for the current year-to-date totaled a record $26.9 million, or $1.79 per share, compared to the previous record of $24.2 million, or $1.63 per share, for the first nine months of 2005. Net premium earned by the Company's insurance subsidiaries declined by 15% from $49.8 million during the third quarter of 2005 to $42.3 million for the third quarter of 2006. For the nine months, earned premium decreased by 9% to $127.7 million. Premium earned was level with the second quarter as the Company's two largest products, fleet trucking and non-standard automobile, continue to see pricing pressure. The Company's quarterly consolidated combined ratio decreased to 89.1%, producing underwriting profits of $4.6 million, compared to last year's third quarter ratio of 114.0% and an underwriting loss of $7.0 million. The 2005 quarter was adversely impacted by $13.0 million in pre-tax hurricane losses. Year-to-date, the consolidated combined ratio for 2006 was 90.8% compared to 98.0%, including hurricane losses which added 9.3 points to the loss ratio, for the first nine months of 2005. Gary W. Miller, CEO of the Company, stated, "While pleased with record operating results, we are not pleased with the decline in premiums as commercial auto pricing has trended down, often past the expected breakeven point. As a result, we have lost some business to those that must have a more optimistic view of future loss costs". Investment income continues to improve as the fixed income portfolio is increasingly benefited by higher yields. Pretax investment income was 38% higher for the third quarter and 36% higher for the nine months of this year. After tax investment income improved even more, at 42% and 38%, respectively, as more of the fixed income portfolio has been allocated to municipal bonds this year. After tax investment income also improved over 7% from the second quarter this year. Net investment gains before tax were $3.0 million for the current quarter compared to $8.3 million for the 2005 quarter. Year-to-date, net investment gains were $8.8 million compared to $16.5 million for 2005 with the difference attributable to extraordinarily favorable performance by our limited partnership investments during 2005. 2 Shareholders' equity increased by $10.7 million during the quarter and has increased $4.3 million (1.3%) from December 31, 2005 after regular and extra dividend payouts for the year-to-date totaling $31.6 million, or $2.10 per share. The book value per share of the Company's stock was $23.20 on September 30, 2006, up $1.99 before dividends and down $.11 after dividends from December 31, 2005. CONFERENCE CALL INFORMATION: Baldwin & Lyons, Inc. has scheduled a conference call for November 2, 2006 at 11:00 AM (New York time) to discuss results for the third quarter ended September 30, 2006. To gain access to the webcast of this call, please log on to HTTP://VIAVID.NET/DCE.ASPX?SID=000035DE at least 15 minutes prior to the call to register and to download the necessary audio software. The webcast will be archived on the site until February 2, 2007. You may also access the webcast through a link on our investor relations page at WWW.BALDWINANDLYONS.COM. To participate via teleconference, investors may dial 877-704-5386 (U.S./Canada) or 913-312-1302 (International or local) at least five minutes prior to the beginning of the call. A replay of the call will be available through November 9, 2006 by calling 888-203-1112 or 719-457-0820 and referencing passcode 3544744. Also available on our investor relations page are complete interim financial statements, information regarding our business segments, and copies of our filings with the Securities and Exchange Commission. 3 [GRAPHIC OMITTED]
FINANCIAL HIGHLIGHTS (UNAUDITED) Baldwin & Lyons, Inc. and Subsidiaries (IN THOUSANDS, EXCEPT PER SHARE DATA) Three Months Ended Nine Months Ended September 30 September 30 --------------------------- ----------------------------- 2006 2005 2006 2005 ----------- ------------ ------------ ------------- Operating revenue $48,891 $ 55,227 $ 147,279 $ 155,853 Net investment gains 2,958 8,346 8,837 16,470 ----------- ------------ ------------ ------------- TOTAL REVENUE $51,849 $ 63,573 $ 156,116 $ 172,323 =========== ============ ============ ============= Operating income (loss) $ 7,956 ($ 773) $ 21,118 $ 13,492 Net investment gains, net of federal income taxes 1,923 5,424 5,744 10,705 ----------- ------------ ------------ ------------- NET INCOME $ 9,879 $ 4,651 $ 26,862 $ 24,197 =========== ============ ============ ============= Per share data - diluted: Average number of shares 15,130 14,873 15,013 14,854 Operating income (loss) $ .53 ($ .05) $ 1.41 $ .91 Net investment gains .12 .36 .38 .72 ----------- ------------ ------------ ------------- NET INCOME $ .65 $ .31 $ 1.79 $ 1.63 =========== ============ ============ ============= Dividends paid to shareholders $ .25 $ .35 $ 2.10 $ .70 Annualized return on average shareholders' equity: Operating income (loss) 10.5% (1.1%) 9.2% 6.3% Net income 13.1% 6.3% 11.7% 11.1% Consolidated combined ratio of insurance subsidiaries (GAAP basis) 89.1% 114.0% 90.8% 98.0%
[GRAPHIC OMITTED] FORWARD-LOOKING STATEMENTS IN THIS REPORT ARE MADE PURSUANT TO THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. INVESTORS ARE CAUTIONED THAT SUCH FORWARD-LOOKING STATEMENTS INVOLVE INHERENT RISKS AND UNCERTAINTIES. READERS ARE ENCOURAGED TO REVIEW THE COMPANY'S ANNUAL REPORT FOR ITS FULL STATEMENT REGARDING FORWARD-LOOKING INFORMATION. -----END PRIVACY-ENHANCED MESSAGE-----