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PIEDMONT MANAGEMENT COMPANY INC. REPORTS OPERATING RESULTS

 NEW YORK, Nov. 4 /PRNewswire/ -- Piedmont Management Company Inc. (NASDAQ-NMS: PMAN) today reported September 30, 1993 operating results. For nine months, net income per share was $3.12, including $1.27 per share of benefit for the cumulative effect on prior years of adopting Statement of Financial Accounting Standards No. 109 (SFAS 109) -- "Accounting for Income Taxes." This compares with a net loss of $1.52 per share for the nine months of 1992. In the third quarter, the Company reported net income per share of $0.83 compared to a net loss of $1.75 in the third quarter of 1992. Further details and comparative results of operations follow:
 -- Consolidated net income for nine months (excluding SFAS 109) increased to $10.1 million, $1.85 per share, in comparison to a net loss of $7.4 million, $1.52 per share, for 1992. In the third quarter, net income of $4.5 million, $0.83 per share, was reported, compared to a net loss of $8.6 million, $1.75 per share, in the 1992 period.
 -- The foregoing per share results include after-tax realized capital gains on sales of securities of $0.84 and $0.29 for the nine months and third quarter of 1993, respectively, compared with $0.46 and $0.27 for the nine months and third quarter of 1992, respectively.
 -- Underwriting results for RECO turned around in comparison to prior year periods. The combined ratio for the third quarter was 107.0 percent compared to 126.0 percent exclusive of the effects of catastrophes such as Hurricanes Andrew and Iniki which occurred during this period in 1992. For nine months, the combined ratio in 1993 was 110.6 percent compared to 121.3 percent, after excluding the 1992 catastrophes.
 The company has reduced its exposure to U.S. catastrophes and is concentrating on reinsuring specialty lines along with underwriting primary insurance business. This strategic decision has thus far benefited results as RECO's loss frequency from weather and other catastrophe related events has been minimal in 1993 relative to the entire industry. Statutory policyholders' surplus reached an all time high of $93.1 million on September 30.
 Net investment income was $13.3 million an September 30, 1993, down from $14.2 million a year ago. This decline follows the trend of recent periods and is tied to interest rates which have fallen steadily over the last year.
 -- Investment advisory pre-tax income climbed to $689,000 in the third quarter and $1.2 million for the nine months of 1993, up considerably from $361,000 and $974,000 for the third quarter and nine months of 1992, respectively. Much of this progress is attributed to a rising base of mutual fund assets which recently crossed the billion dollar mark a new high for Lexington Management Corporation. This asset growth reflects the superior investment performance achieved by several of the funds. In addition, new assets have been generated through the expansion of distribution channels.
 -- The Company recorded a net tax benefit in the 1993 third quarter of $0.08 per share as a result of the revaluation of current and deferred tax balances necessitated by the passage of the Revenue Reconciliation Act of 1993 which increased corporate income tax rates from 34 percent to 35 percent retroactive to January 1, 1993.
 -- Consolidated assets were $649.1 million and stockholders' equity, including unrealized appreciation of $4.4 million, was $122.2 million at September 30, 1993. Book value per share was $22.95, up $3.16 per share from December 31, 1992.
 Piedmont Management Company Inc. is a financial services company whose principal subsidiaries include The Reinsurance Corporation of New York (RECO), a property and casualty reinsurer, and Lexington Management Corporation, an investment advisory and mutual fund management company.
 PIEDMONT MANAGEMENT COMPANY INC.
 Operating Results 1993
 Comparative Results
 Three Months Ended Nine Months Ended
 Sept. 30, Sept. 30, Sept. 30, Sept. 30,
 1993 1992 1993 1992
 (Unaudited)
 Reinsurance Operations:
 Gross premiums
 earned $50,406,896 $52,871,402 $155,133,117 $150,051,162
 Ceded premiums
 earned (22,244,874) (22,054,614)(67,296,101) (61,447,357)
 Net premiums
 earned 28,162,022 30,816,788 87,837,016 88,603,805
 Net investment
 income 4,056,838 3,976,381 13,269,446 14,189,894
 Realized capital
 gains 2,438,732 1,658,144 6,928,752 2,815,973
 Total revenues 34,657,592 36,451,313 108,035,214 105,609,672
 Losses and loss
 expenses 42,007,809 85,636,380 127,563,392 165,772,721
 Reinsurance
 recoveries (20,755,055) (51,139,478)(61,020,563) (85,480,010)
 Net losses and
 loss expenses 21,252,754 34,496,902 66,542,829 80,292,711
 Acquisition and
 other underwriting
 expenses 8,883,919 11,136,674 30,630,863 34,010,689
 Total expenses 30,136,673 45,633,576 97,173,692 114,303,400
 Reinsurance operating
 income (loss) 4,520,919 (9,182,263) 10,861,522 (8,693,728)
 Investment Advisory
 Operations:
 Fees earned and
 other income 4,633,233 3,980,662 12,791,051 11,916,294
 Service and
 marketing costs 3,943,823 3,619,288 11,618,170 10,942,088
 Investment advisory
 operating income 689,410 361,374 1,172,881 974,206
 Parent Company:
 Investment and other
 income 142,094 92,061 482,326 345,436
 Realized capital
 gains 106 - 20,331 4,724
 Interest expense 114,126 150,993 366,176 537,313
 Other corporate
 expenses 338,741 365,064 1,152,306 1,277,300
 Parent company
 operating loss (310,667) (423,996) (1,015,825) (1,464,453)
 Equity in net earnings
 of investees 744,651 244,559 2,179,786 1,515,373
 Income tax (expense)
 benefit (1,116,453) 443,893 (3,076,042) 317,500
 Income (loss) before
 cumulative effect of
 accounting change 4,527,860 (8,556,443) 10,122,322 (7,351,102)
 Cumulative effect of
 change in method of
 accounting for income
 taxes -- -- 6,937,545 --
 Net income (loss) $4,527,860 $(8,556,433)$17,059,867 $(7,351,102)
 Average shares for
 period note (A) 5,460,872 4,922,437 5,460,872 $ 4,922,437
 Income (loss) before
 cumulative effect $.83 $(1.75) $1.85 $(1.52)
 Cumulative effect of
 change in method of
 accounting for income
 taxes -- -- 1.27 --
 Net income (loss) per
 share note (A) $.83 $(1.75) $3.12 $(1.52)
 Note (A) Computations of income (loss) per share for each quarter or period are independent. In 1992 to include common stock equivalents would be anti-dilutive and accordingly weighted average shares were used in the computation of income (loss) per share.
 Supplementary Data Per Share:
 Income (loss) excluding
 realized capital gains $.54 $(2.01) $1.01 $(1.95)
 Realized capital gains
 net of tax .29 .27 .84 .46
 Deduction for preferred
 dividends - (.01) - (.03)
 Cumulative effect of
 change in method of
 accounting for income
 taxes - - 1.27 -
 Net income (loss) $.83 $(1.75) $3.12 $(1.52)
 -0- 11/4/93
 /CONTACT: Peter Palenzona, chief financial officer of Piedmont Management Company, 212-363-4650/
 (PMAN)


CO: Piedmont Management Company Inc. ST: New York IN: FIN SU: ERN

SH-MP -- NY011 -- 0579 11/04/93 09:39 EST
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