Capital Title Group Reports First Quarter Results.SCOTTSDALE, Ariz. -- Capital Title Group Inc. (Nasdaq: CTGI CTGI Capital Title Group Inc ) -- named for a second consecutive year in FORTUNE'S 100 Fastest Growing Companies in America in 2005 -- is a national provider of title, appraisal, flood and other transaction services to the real estate and mortgage lending industries. The company today reported revenue of $79.2 million for the first quarter ended March 31, 2006, a decrease of 6.2%, compared to revenue of $84.5 million in the same quarter of 2005. The revenue decrease in the first three months of 2006 reflects a general decline in real estate market activity that was experienced in many parts of the nation, as compared to the prior year. Earnings attributable to common shares for the first quarter ended March 31, 2006, was $571,000, or $.02 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to the first quarter of the prior year, when earnings attributable to common shares were $1.8 million, or $.07 per diluted share. In addition to the decline in revenue mentioned above, other factors contributing to the reduction in net income for the first quarter ended March 31, 2006, include costs associated with the company's certification process for Sarbanes-Oxley compliance reporting, legal costs pursuant to actions brought against a competitor claiming unfair business practices in the recruitment of certain employees of the company, and professional fees associated with the pending acquisition of Capital Title by LandAmerica Financial Group LandAmerica Financial Group, Inc. (NYSE: LFG) is the third largest title insurance group in the US. It was incorporated in 1991 and is headquartered in Glen Allen, Virginia. Inc. (LandAmerica), along with the requirement to expense stock options beginning Jan. 1, 2006. The combined impact of these items on the quarter ended March 31, 2006, compared to the same period in 2005, was approximately $.04 per share. "As we moved through the quarter, it was evident the real estate industry was not as strong as the prior year. Adjustments were made, and we will continue to take appropriate action to meet the challenges within our competitive environment, plus the seasonal and cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. phases of our business. We saw an increase in the average revenue per closed order, pointing to a positive trend in the mix of our business to a greater percent of higher margin residential resale transactions. The results for the first quarter were as anticipated by management," stated Donald R. Head, chairman, president and chief executive officer. "Our planned merger with LandAmerica is moving forward through the customary stages typical in transactions of this nature, which includes obtaining all necessary regulatory approvals. With the closing of the merger transaction, we will maintain our unique Capital Title culture as we become a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of LandAmerica," Head concluded. Headquartered in Scottsdale, Ariz., Capital Title Group Inc., through its subsidiaries, offers services throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. for title insurance, appraisal and valuation services, and other related services to residential and commercial customers in the real estate and mortgage lending industries. Subsidiary companies include -- Capital Title Agency, New Century Title Co., United Title Co., First California Title Co., Land Title of Nevada, CTG CTG Cartridge CTG Center for Technology in Government (SUNY, Albany, New York) CTG Center for Technology in Government CTG Computer Task Group (IT consulting company; Buffalo, NY, USA) Real Estate Information Services See Information Systems. , Nationwide Appraisal Services, Nationwide TotalFlood Services Inc., NAC See network access control. 1031 Exchange Services, 1031 ExchangePoint Inc. and AdvantageWare -- with strategically located offices in Arizona, California, Nevada, Pennsylvania and Texas. The company is also licensed to issue and underwrite To insure; to sell an issue of stocks and bonds or to guarantee the purchase of unsold stocks and bonds after a public issue. The word underwrite has two meanings. title insurance policies in Arizona, California, Florida, Nevada, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , Pennsylvania and Texas through its underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. subsidiary, United Capital Title Insurance Co. The combined companies have in excess of 2,300 employees.
Visit our Web sites for more information
on the company and its subsidiaries:
www.capitaltitlegroup.com www.capitaltitle.com
www.nationwide-totalflood.com www.landtitlenv.com
www.nationwidesolution.com www.unitedtitle.com
www.newcenturytitle.com www.firstcal.com
www.awiware.com www.nascopgh.com
www.nac1031.com www.1031exchangepoint.com
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Certain statements in this release may be "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward-looking statements may include projections of matters that affect revenue, operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. or net earnings; projections of capital expenditures; projections of growth; hiring plans; plans for future operations; financing needs or plans; plans to merge with LandAmerica; plans relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the company's products and services; and assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking information. Some of the important factors that could cause the company's actual results to differ materially from those projected in forward-looking statements made by the company include, but are not limited to, the following: fluctuations in interest rates that can affect operating results, intense competition, past and future acquisitions including risks associated with the company's acquisition by LandAmerica, expanding operations into new markets, risk of business interruption, management of rapid growth, need for additional financing, changing customer demands, dependence on key personnel, sales and income tax uncertainty and increasing marketing, management, occupancy and other administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. . These factors are discussed in greater detail in the company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended Dec. 31, 2005, as filed with the Securities and Exchange Commission. FINANCIAL TABLE FOLLOWS:
CAPITAL TITLE GROUP INC. AND SUBSIDIARIES
SUMMARY OF OPERATIONS
FINANCIAL HIGHLIGHTS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
2006 2005
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(in thousands, except per
share data)
Revenue $79,248 $84,484
Expenses 78,237 80,919
----------- -----------
Income before income taxes 1,011 3,565
Income tax expense 440 1,434
----------- -----------
Net income 571 2,131
Dividends on preferred stock - 345
----------- -----------
Earnings attributable to common shares $571 $1,786
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Earnings per common share:
Basic $0.02 $0.08
Diluted $0.02 $0.07
Weighted average number of common shares
outstanding:
Basic 29,300,804 21,624,131
Diluted 30,121,694 24,013,980
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