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PIEDMONT MANAGEMENT COMPANY REPORTS THIRD-QUARTER AND NINE MONTHS EARNINGS FOR 1991

             PIEDMONT MANAGEMENT COMPANY REPORTS THIRD-QUARTER
                     AND NINE MONTHS EARNINGS FOR 1991
    NEW YORK, Nov. 8 /PRNewswire/ -- Piedmont Management Company Inc. (NASDAQ-NMS: PMAN) today reported 1991 third-quarter earnings of 47 cents per share and nine months earnings of 65 cents per share, compared to a loss of 16 cents and earnings of 55 cents for the third quarter and nine months periods of 1990, respectively.  Details follow:
    -- Consolidated net income for the third quarter was $2.5 million vs. a net loss of $849,000 a year ago; for the nine months of 1991, consolidated net income was $3.5 million compared to $3 million for 1990.
    -- Excluding the after-tax effects of realized capital gains and losses on operating results for each period, earnings per share would be 53 cents for the third quarter and 46 cents for the nine months of 1991 compared to earnings per share of 34 cents for the third quarter and 99 cents for the nine months of 1990.
    -- The Reinsurance Corporation of New York's (RECO) combined ratio, computed on a generally accepted accounting principles basis, was 124.7 percent for the nine months in comparison to 119.6 percent a year ago.  The combined ratio for the third quarter of 1991 was 117.1 percent vs. 115.2 percent for the same period in 1990.
    Net premiums written for the nine months of 1991 have increased 17 percent, to $69.5 million, largely as a result of new business added during the year and an increase in the level of retention for certain classes of existing business.  Losses incurred were not as severe during the third quarter; however, for the nine months of 1991 underwriting results reflect a higher frequency of weather related and catastrophe losses in comparison to a year ago.  The company has received notice of potential losses, falling within its catastrophe excess layers of reinsurance, from the late October fires which occurred in Oakland, Calif.  Any such losses will be recorded in fourth-quarter results of operations and, at present, it is uncertain whether this will have a material effect on overall underwriting results for the year.
    Pretax net investment income for the nine months decreased 7 percent to $17.3 million in 1991 from $18.6 million a year ago.  The decline in investment income primarily results from lower interest rates which have ensued over the past year and the fact that a higher level of invested assets has been committed to short-term securities during that time.
    -- Investment advisory pretax operating income for nine months increased to $1.2 million from $771,000 a year ago.  Revenues declined as a result of client terminations and reductions in assets managed due to reallocations among clients' investment managers.  New client growth in Lexington's traditional "value" style has slowed as small capitalization and growth stock managers have been the more favored styles in recent years.  In addition, Lexington's global asset management service, despite excellent investment performance, has not yet fully generated anticipated revenues.  The company expects it is only a matter of time before significant global asset management revenues are realized.
    For the third quarter, pretax investment advisory income rose to $378,000 in 1991 compared to $216,000 for 1990.
    -- The company's provision for taxes was based upon the alternative minimum tax regulation.  The "fresh start" tax benefit for the nine month periods of 1991 and 1990 was 6 cents and 5 cents per share, respectively.
    -- Consolidated assets were $446.5 million on Sept. 30, 1991, and stockholders' equity was $118.2 million, a 10 percent increase over Dec. 31, 1990.  Statutory policyholders' surplus for RECO was $87.5 million on Sept. 30, 1991, a 16 percent increase over Dec. 31, 1990.  Piedmont's book value per share was $22.27 on Sept. 30, 1991.
    Piedmont Management Company Inc. is a financial services company whose principal subsidiaries include the Reinsurance Corporation of New York, a property and casualty reinsurer, and Lexington Management Corporation, an investment advisory and mutual fund management company.
                     PIEDMONT MANAGEMENT COMPANY INC.
                      Comparative Results (Unaudited)
     Three months ended Sept. 30               1991             1990
    Reinsurance operations:
     Net premiums earned                  $21,612,769      $22,287,035
     Net investment income                  5,886,081        5,494,662
     Total                                 27,498,850       27,781,697
     Realized capital gains (losses)         (398,797)      (2,916,022)
     Losses and loss adjustment expenses   16,700,245       20,291,802
     Acquisition and other expenses         8,609,523        5,374,644
     Total                                 25,309,768       25,666,446
     Reinsurance operating income (loss)    1,790,285         (800,771)
    Investment advisory operations:
     Fees earned and other income           3,848,081        4,101,541
     Service and marketing costs            3,469,705        3,885,292
     Investment advisory operating income     378,376          216,249
    Parent company:
     Investment and other income              137,478          183,796
     Realized capital gains (losses)               --         (431,518)
     Interest expense                         299,722          411,475
     Other corporate expenses                 677,202          554,671
     Parent company operating loss           (839,446)      (1,213,868)
    Equity in net earnings of investees       434,893          419,100
    Income tax (expense) credit               733,719         (530,268)
    Net income (loss)                       2,497,827         (849,022)
    Average shares for period               5,334,084        5,369,230
    Net income (loss) per share                  $.47            $(.16)
    Supplementary data per share:
     Income excluding realized
      capital gains (losses)                     $.53             $.34
     Realized capital gains (losses) net of tax  (.06)            (.50)
     Net income (loss)                            .47             (.16)
     Nine months ended Sept. 30                1991             1990
    Reinsurance operations:
     Net premiums earned                  $65,422,189      $63,624,996
     Net investment income                 17,316,066       18,571,542
     Total                                 82,738,255       82,196,538
     Realized capital gains (losses)        1,254,218       (2,449,709)
     Losses and loss adjustment expenses   55,777,585       57,644,305
     Acquisition and other expenses        25,778,854       18,462,187
     Total                                 81,556,439       76,106,492
     Reinsurance operating income (loss)    2,436,034        3,640,337
    Investment advisory operations:
     Fees earned and other income          11,728,534       12,254,068
     Service and marketing costs           10,544,221       11,483,390
     Investment advisory operating income   1,184,313          770,678
    Parent company:
     Investment and other income              432,413          581,082
     Realized capital gains (losses)            4,948         (491,608)
     Interest expense                         946,972        1,239,150
     Other corporate expenses               2,000,484        1,705,960
     Parent company operating loss         (2,510,095)      (2,855,636)
    Equity in net earnings of investees     1,477,372        1,538,398
    Income tax (expense) credit               893,017         (113,323)
    Net income (loss)                       3,480,641        2,980,454)
    Average shares for period               5,334,084        5,369,230
    Net income (loss) per share                  $.65             $.55
    Supplementary data per share:
     Income excluding realized
      capital gains (losses)                     $.46             $.99
     Realized capital gains (losses) net of tax   .19             (.44)
     Net income (loss)                            .65              .55
    -0-           11/8/91
    /CONTACT  Peter Palenzona, CFO of Piedmont Management, 212-363-4650/
    (PMAN) CO:  Piedmont Management Company Inc. ST:  New York IN:  INS SU:  ERN TS-CK -- NY018 -- 0888 11/08/91 11:24 EST
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Date:Nov 8, 1991
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