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PIEDMONT MANAGEMENT COMPANY REPORTS SEMI-ANNUAL OPERATING RESULTS

 NEW YORK, Aug. 5 /PRNewswire/ -- Piedmont Management Company Inc. (NASDAQ-NMS: PMAN) today reported 1993 semi-annual and second quarter results. For six months, net income per share was $2.31, including $1.28 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 $0.22 per share for the six months of 1992. In the second quarter, the company reported earnings per share of $0.28 compared to a net loss of $0.19 in the second quarter of 1992. Further details and comparative results of operations follow:
 -- Consolidated net income for six months (excluding SFAS 109) increased to $5.6 million, $1.03 per share, in comparison to $1.2 million, $0.22 per share, for 1992. In the second quarter, net income of $1.5 million, $0.28 per share, was reported compared to a net loss of $839,000, $0.19 per share, in the 1992 period.
 -- The foregoing per share results include after-tax realized capital gains on sales of securities of $0.55 and $0.27 for the six months and second quarter of 1993, respectively, compared with $0.17 and $0.02 for the six months and second quarter of 1992, respectively.
 -- Although RECO's level of losses remained on par with the first quarter, earned premiums dropped nearly $4 million, moving the combined ratio up to 112.3 percent from 106.7 percent at the end of March. The company has cancelled a number of accounts and this canceling and re- underwriting of business, predicated upon building a more diversified underwriting strategy, is expected to cause variations in the levels of written and earned premiums throughout this year. All told, however, underwriting results were much improved over the prior year. Statutory policyholders' surplus was $88.4 million on June 30, 1993, up from $70.9 million at the end of 1992.
 Net investment income was $9.2 million on June 30, 1993, down from $10.2 million a year earlier. This decline is mainly attributed to the lower interest rate environment which has reduced the yield on the company's predominately fixed income investment portfolio.
 -- Investment advisory pre-tax income improved to $493,000 in the second quarter compared to $334,000 in the 1992 period. For the six months of 1993, pre-tax income was $483,000 compared to income of $613,000 a year ago. There has been substantial growth in mutual fund assets during the first half of this year, boosting fund management an commission fees for Lexington Management Corporation. Pre-tax operating income for this company was $806,000 at June 30, 1993 compared to $728,000 last year. Operating results for Lexington Capital Management and Lexington Plan Administrators also improved in the second quarter as staff reductions and other cutbacks in operating costs commenced during the period. The combined operating loss in the quarter for these companies declined to $32,000 from $285,000 in the first quarter of the year.
 -- Consolidated assets were $636.1 million and stockholders' equity was $116.7 million at June 30, 1993. Book value per share was $21.94, up $2.15 per share from the end of 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.
 Second Quarter/Semi-Annual Results 1993
 Comparative Results
 (unaudited)
 Periods ended Three Months Six Months
 June 30: 1993 1992 1993 1992
 Reinsurance operations
 Gross premiums
 earned $50,060,849 $47,454,817 $104,726,221 $97,179,760
 Ceded premiums
 earned (22,076,124) (22,484,571) (45,051,227)(39,392,743)
 Net premiums
 earned 27,984,725 24,970,246 59,674,994 57,787,017
 Net investment
 income 4,028,783 4,903,640 9,212,608 10,213,513
 Realized capital
 gains 2,214,028 132,814 4,490,020 1,157,829
 Total revenues 34,227,536 30,006,700 73,377,622 69,158,359
 Losses and loss
 expenses 37,226,151 43,469,473 85,555,583 80,136,341
 Reinsurance
 recoveries (14,973,227) (21,410,790) (40,265,508)(34,340,532)
 Net losses and
 loss expenses 22,252,924 22,058,683 45,290,075 45,795,809
 Acquisition and
 other underwriting
 expenses 10,984,756 9,397,072 21,746,944 22,874,015
 Total expenses 33,237,680 31,455,755 67,037,019 68,669,824
 Reinsurance operating
 income (loss) 989,856 (1,449,055) 6,340,603 488,535
 Investment Advisory Operations:
 Fees earned and
 other income 4,224,725 3,996,996 8,088,075 7,935,632
 Service & marketing
 costs 3,731,743 3,662,712 7,604,604 7,322,800
 Investment advisory
 operating income 492,982 334,284 483,471 612,832
 Parent Company:
 Investment and
 other income 105,901 126,364 340,232 253,375
 Realized capital
 gains 27,818 4,724 20,225 4,724
 Interest expense 123,999 189,469 252,050 386,320
 Other corporate
 expenses 423,824 510,209 813,565 912,236
 Parent company
 operating loss (414,104) (568,590) (705,158) (1,040,457)
 Equity in net earnings
 of investees 759,045 591,549 1,435,135 1,270,814
 Income tax (expense)
 benefit (332,917) 253,290 (1,959,589) (126,393)
 Income (loss) before
 cumulative effect of
 accounting change 1,494,862 (838,522) 5,594,462 1,205,331
 Cumulative effect of change
 in method of accounting
 for income taxes -- -- 6,937,545 --
 Net income (loss) $1,494,862 $(838,522) $12,532,007 $1,205,331
 Average shares
 for period 5,424,088 4,968,143 5,424,088 5,360,537
 Income (loss) before
 cumulative effect .28 (.19) 1.03 .22
 Cumulative effect of change
 in method of accounting
 for income taxes -- -- 1.28 --
 Net income (loss)
 per share $.28 $(.19) $2.31 $.22
 Supplementary Data Per Share:
 Income (loss) excluding
 realized capital gains .01 (.19) .48 .05
 Realized capital gains
 net of tax .27 .02 .55 .17
 Deduction for preferred
 dividends -- (.02) -- --
 Cumulative effect of change
 in method of accounting
 for income taxes -- -- 1.28 --
 Net income (loss) $.28 $(.19) $2.31 $.22
 -0- 8/5/93
 /CONTACT: Peter Palenzona, chief financial officer, of Piedmont Management Company Inc., 212-363-4650/
 (PMAN)


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

MP-LO -- NY019 -- 9785 08/05/93 10:19 EDT
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Publication:PR Newswire
Date:Aug 5, 1993
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