- Total revenues of $602.2
million ($602.7 million on an
adjusted basis) compared to $549.2
million ($550.3 million on an
adjusted basis) in the prior year quarter
- Net income of $17.3 million
($25.4 million on an adjusted basis)
compared to $15.8 million
($25.8 million on an adjusted basis)
in the prior year quarter
- Diluted earnings per share of $0.62 ($0.91 on an
adjusted basis) compared to prior year diluted EPS of $0.58 ($0.94 on an
adjusted basis)
HOUSTON, July 24,
2024 /PRNewswire/ -- Stewart Information Services
Corporation (NYSE: STC) today reported net income attributable to
Stewart of $17.3 million
($0.62 per diluted share) for the
second quarter 2024, compared to $15.8
million ($0.58 per diluted
share) for the second quarter 2023. On an adjusted basis, second
quarter 2024 net income was $25.4
million ($0.91 per diluted
share) compared to $25.8 million
($0.94 per diluted share) in the
second quarter 2023. Pretax income before noncontrolling interests
for the second quarter 2024 was $29.0
million ($39.6 million on an
adjusted basis) compared to $25.2
million ($38.3 million on an
adjusted basis) for the second quarter 2023.
![Stewart Logo (PRNewsfoto/Stewart Information Services Co) Stewart Logo (PRNewsfoto/Stewart Information Services Co)](https://mma.prnewswire.com/media/944148/Stewart_Logo.jpg)
Second quarter 2024 results included $0.5
million of pretax net realized and unrealized losses
primarily driven by net unrealized losses on fair value changes of
equity securities investments in the title segment, while second
quarter 2023 results included $1.1
million of pretax net realized and unrealized losses,
primarily composed of a contingent receivable loss adjustment
resulting from a previous disposition of a business in the
corporate and other segment, partially offset by net unrealized
gains on fair value changes of equity securities investments in the
title segment.
"Our second quarter revenues increased when compared to the
second quarter of last year, driven by solid topline results in
several of our core businesses. As with the rest of the industry,
we remain impacted by a continued difficult housing market,"
commented Fred Eppinger, chief
executive officer. "We remain focused on achieving our strategic
goals and continue to invest in ourselves as we pursue growth and
margin improvement across all lines of business."
Selected Financial Information
Summary results of
operations are as follows (dollars in millions, except per share
amounts, pretax margin and adjusted pretax margin, and amounts may
not add as presented due to rounding):
|
Quarter
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2024
|
2023
|
|
2024
|
2023
|
|
|
|
|
|
|
Total
revenues
|
602.2
|
549.2
|
|
1,156.5
|
1,073.5
|
Pretax income before
noncontrolling interests
|
29.0
|
25.2
|
|
36.2
|
15.0
|
Income tax
expense
|
(7.9)
|
(5.4)
|
|
(8.9)
|
(0.5)
|
Net income attributable
to noncontrolling interests
|
(3.7)
|
(4.0)
|
|
(6.8)
|
(6.9)
|
Net income attributable
to Stewart
|
17.3
|
15.8
|
|
20.5
|
7.6
|
Non-GAAP adjustments,
after taxes*
|
8.1
|
10.0
|
|
9.6
|
17.9
|
Adjusted net income
attributable to Stewart*
|
25.4
|
25.8
|
|
30.0
|
25.5
|
Pretax
margin
|
4.8 %
|
4.6 %
|
|
3.1 %
|
1.4 %
|
Adjusted pretax
margin*
|
6.6 %
|
7.0 %
|
|
4.2 %
|
3.6 %
|
Net income per diluted
Stewart share
|
0.62
|
0.58
|
|
0.73
|
0.28
|
Adjusted net income per
diluted Stewart share*
|
0.91
|
0.94
|
|
1.07
|
0.93
|
|
* Adjusted net income,
adjusted pretax margin and adjusted net income per diluted share
are non-GAAP measures. See Appendix A for explanation and
reconciliation of non-GAAP adjustments.
|
Title Segment
Summary results of the title segment are
as follows (dollars in millions, except pretax margin and adjusted
pretax margin):
|
Quarter Ended June
30,
|
|
|
|
2024
|
2023
|
% Change
|
|
|
|
|
|
|
|
|
Operating
revenues
|
496.2
|
466.7
|
6 %
|
|
|
Investment
income
|
14.3
|
12.1
|
18 %
|
|
|
Net realized and
unrealized (losses) gains
|
(0.5)
|
2.0
|
(125 %)
|
|
|
Pretax
income
|
33.4
|
35.5
|
(6 %)
|
|
|
Non-GAAP adjustments to
pretax income*
|
5.0
|
2.3
|
|
|
|
Adjusted pretax
income*
|
38.4
|
37.7
|
2 %
|
|
|
Pretax
margin
|
6.5 %
|
7.4 %
|
|
|
|
Adjusted pretax
margin*
|
7.5 %
|
7.9 %
|
|
|
|
* Adjusted pretax
income and adjusted pretax margin are non-GAAP financial measures.
See Appendix A for explanation and reconciliation of non-GAAP
adjustments.
|
|
|
|
|
|
|
|
|
Title segment operating revenues improved $29.5 million, or 6 percent, in the second
quarter 2024 primarily driven by increased revenues from our
domestic commercial, international and agency title operations,
partially offset by lower domestic noncommercial revenues, while
total segment operating expenses increased $31.3 million, or 7 percent, compared to the
second quarter 2023. Agency retention expenses in the second
quarter 2024 increased $28.4 million,
or 17 percent, primarily driven by $32.0
million, or 15 percent, improvement in gross agency revenues
compared to the second quarter 2023, while the average independent
agency remittance rate in the second quarter 2024 decreased to
approximately 16.9 percent, compared to 17.7 percent during the
prior year quarter, primarily due to increased agency revenues in
states with relatively higher agent retention rates.
Total title segment employee costs and other operating expenses
slightly increased by $2.0 million,
or less than a percent, in the second quarter 2024 compared to the
prior year quarter, primarily due to increased outside search
expenses related to higher commercial revenues. As a percentage of
operating revenues, these expenses were 49.7 percent in the second
quarter 2024 compared to 52.4 percent in the second quarter 2023.
Title loss expense in the second quarter 2024 increased
$1.3 million, or 7 percent, primarily
driven by higher title revenues compared to the prior year quarter.
As a percentage of title revenues, title loss expense was 4.2
percent for both the second quarters 2024 and 2023.
Investment income improved by $2.2
million in the second quarter 2024 compared to the prior
year quarter, primarily resulting from higher interest income on
eligible escrow balances in the second quarter 2024. In addition to
the net realized and unrealized losses and gains presented above,
non-GAAP adjustments to the title segment's pretax income for the
second quarters 2024 and 2023 included $4.6
million and $4.2 million,
respectively, of total acquisition intangible asset amortization
and other expenses.
Direct title revenues information is presented below (dollars in
millions):
|
Quarter Ended June
30,
|
|
2024
|
2023
|
% Change
|
|
|
|
|
|
|
Non-commercial:
|
|
|
|
|
Domestic
|
169.4
|
184.5
|
(8 %)
|
|
International
|
28.1
|
25.9
|
8 %
|
|
|
197.5
|
210.4
|
(6 %)
|
|
Commercial:
|
|
|
|
|
Domestic
|
51.0
|
41.5
|
23 %
|
|
International
|
7.0
|
6.1
|
15 %
|
|
|
58.0
|
47.6
|
22 %
|
|
Total direct title
revenues
|
255.5
|
258.0
|
(1 %)
|
|
|
|
|
|
Second quarter 2024 total non-commercial domestic revenues
decreased $15.1 million, or 8
percent, primarily resulting from a 9 percent decrease in total
residential purchase and refinancing transactions and a lower
average fee per file compared to the prior year quarter. Domestic
commercial revenues increased $9.5
million, or 23 percent, primarily driven by improved average
transaction size and higher commercial transactions closed compared
to the prior year quarter. Second quarter 2024 average domestic
commercial fee per file improved 17 percent to $13,500, compared to $11,600 in the second quarter 2023, while average
residential fee per file was $3,000,
which was 7 percent lower compared to $3,300 in the prior year quarter, primarily due
to a lower purchase transaction mix in the second quarter 2024.
Real Estate Solutions Segment
Summary results of the
real estate solutions segment are as follows (dollars in millions,
except pretax margin and adjusted pretax margin):
|
Quarter Ended June
30,
|
|
|
2024
|
2023
|
% Change
|
|
|
|
|
|
|
Operating
revenues
|
92.2
|
71.4
|
29 %
|
|
Pretax
income
|
5.1
|
3.3
|
56 %
|
|
Non-GAAP adjustments to
pretax income*
|
5.5
|
7.1
|
|
|
Adjusted pretax
income*
|
10.6
|
10.3
|
3 %
|
|
Pretax
margin
|
5.5 %
|
4.6 %
|
|
|
Adjusted pretax
margin*
|
11.5 %
|
14.5 %
|
|
|
|
|
* Adjusted pretax
income and adjusted pretax margin are non-GAAP financial measures.
See Appendix A for an explanation and reconciliation of non-GAAP
adjustments.
|
|
Segment operating revenues increased $20.8 million, or 29 percent, in the second
quarter 2024 compared to the prior year quarter, primarily due to
increased revenues from credit information and valuation services.
On a combined basis, employee costs and other operating expenses in
the second quarter 2024 increased $19.0
million, or 31 percent, consistent with the higher operating
revenues. Non-GAAP adjustments to pretax income shown in the
schedule above were primarily related to acquisition intangible
asset amortization expenses.
Corporate and Other Segment
The segment's results were
primarily driven by net expenses attributable to corporate
operations, which decreased to $9.5
million in the second quarter 2024, compared to $10.5 million in the second quarter 2023,
primarily driven by management's cost discipline. The segment's
results for the second quarter 2023 included net realized losses of
$3.1 million, primarily driven by a
loss adjustment resulting from a previous disposition of a
business.
Expenses
Consolidated employee costs in the second
quarter 2024 decreased $3.0 million,
or 2 percent, compared to the second quarter 2023, primarily due to
reduced incentive compensation and a 3 percent lower average
employee count in the second quarter 2024. As a percentage of total
operating revenues, employee costs improved to 30.5 percent in the
second quarter 2024 compared to 33.9 percent in the prior year
quarter.
Consolidated other operating expenses in the second quarter 2024
increased $23.0 million, or 18
percent, primarily as a result of increased service expenses and
outside search fees related to higher revenues from real estate
solutions and commercial title operations, respectively, and higher
office closure costs compared to the second quarter 2023. As a
percentage of total operating revenues, total other operating
expenses for the second quarter 2024 were 25.9 percent, compared to
24.0 percent in the prior year quarter, primarily driven by
increased real estate solutions service expenses.
Other
Net cash provided by operations in the second
quarter 2024 was $21.1 million
compared to $35.1 million of net cash
provided by operations in the second quarter 2023, primarily due to
increased trade accounts receivable resulting from increased
revenues in our real estate solutions operations during the second
quarter 2024. Our effective income tax rate for the second
quarter 2024 was higher than our normal tax rate primarily due to
the higher pretax contribution of our international operations
(which have higher average income tax rates) compared to our
domestic operations.
Second Quarter Earnings Call
Stewart will hold a
conference call to discuss the second quarter 2024 earnings at
8:30 a.m. Eastern Time on Thursday,
July 25, 2024. To participate, dial (800) 274-8461 (USA) or (203) 518-9814 (International) -
access code STCQ224. Additionally, participants can listen to the
conference call through Stewart's Investor Relations website at
https://investors.stewart.com/news-and-events/events/default.aspx.
The conference call replay will be available from 11:00 a.m. Eastern Time on July 25, 2024 until midnight on August 1, 2024 by dialing (888) 274-8335
(USA) or (402) 220-2327
(International).
About Stewart
Stewart (NYSE-STC) is a global real
estate services company, offering products and services through our
direct operations, network of Stewart Trusted Providers™ and family
of companies. From residential and commercial title insurance and
closing and settlement services to specialized offerings for the
mortgage and real estate industries, we offer the comprehensive
service, deep expertise and solutions our customers need for any
real estate transaction. At Stewart, we are dedicated to becoming
the premier title services company and we are committed to doing so
by partnering with our customers to create mutual success. Learn
more at stewart.com.
Cautionary statement regarding forward-looking
statements. Certain statements in this earnings release
are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, as amended. Such
forward-looking statements relate to future, not past, events and
often address our expected future business and financial
performance. These statements often contain words such as "may,"
"expect," "anticipate," "intend," "plan," "believe," "seek,"
"will," "foresee" or other similar words. Forward-looking
statements by their nature are subject to various risks and
uncertainties that could cause our actual results to be materially
different than those expressed in the forward-looking statements.
These risks and uncertainties include, among other things, the
volatility of economic conditions; adverse changes in the level of
real estate activity; changes in mortgage interest rates, existing
and new home sales, and availability of mortgage financing; our
ability to respond to and implement technology changes, including
the completion of the implementation of our enterprise systems; the
impact of unanticipated title losses or the need to strengthen our
policy loss reserves; any effect of title losses on our cash flows
and financial condition; the ability to attract and retain highly
productive sales associates; the impact of vetting our agency
operations for quality and profitability; independent agency
remittance rates; changes to the participants in the secondary
mortgage market and the rate of refinancing that affects the demand
for title insurance products; regulatory non-compliance,
fraud or defalcations by our title insurance agencies
or employees; our ability to timely and cost-effectively respond to
significant industry changes and introduce new products and
services; the outcome of pending litigation; our ability to manage
risks associated with potential cybersecurity or other privacy or
data security breaches; the impact of changes in governmental and
insurance regulations, including any future reductions in the
pricing of title insurance products and services; our dependence on
our operating subsidiaries as a source of cash flow; our ability to
access the equity and debt financing markets when and if needed;
our ability to grow our international operations; seasonality and
weather; and our ability to respond to the actions of our
competitors. These risks and uncertainties, as well as others, are
discussed in more detail in our documents filed with the Securities
and Exchange Commission, including our Annual Report on Form 10-K
for the year ended December 31, 2023,
and if applicable, as supplemented by any risk factors contained in
our Quarterly Reports on Form 10-Q, and our Current Reports on Form
8-K filed subsequently. All forward-looking statements included in
this earnings release are expressly qualified in their entirety by
such cautionary statements. We expressly disclaim any obligation to
update, amend or clarify any forward-looking statements contained
in this earnings release to reflect events or circumstances that
may arise after the date hereof, except as may be required by
applicable law.
ST-IR
STEWART INFORMATION
SERVICES CORPORATION
CONDENSED STATEMENTS
OF INCOME
(In thousands of
dollars, except per share amounts and except where
noted)
|
|
|
Quarter Ended June
30,
|
|
Six Months Ended June
30,
|
|
2024
|
2023
|
|
2024
|
2023
|
Revenues:
|
|
|
|
|
|
Title
revenues:
|
|
|
|
|
|
Direct
operations
|
255,480
|
257,994
|
|
466,068
|
465,864
|
Agency
operations
|
240,760
|
208,755
|
|
481,532
|
457,775
|
Real estate solutions
and other
|
92,198
|
71,387
|
|
175,214
|
133,978
|
Total operating
revenues
|
588,438
|
538,136
|
|
1,122,814
|
1,057,617
|
Investment
income
|
14,306
|
12,123
|
|
27,207
|
18,722
|
Net realized and
unrealized (losses) gains
|
(514)
|
(1,105)
|
|
6,524
|
(2,883)
|
|
602,230
|
549,154
|
|
1,156,545
|
1,073,456
|
Expenses:
|
|
|
|
|
|
Amounts retained by
agencies
|
200,126
|
171,776
|
|
400,102
|
377,514
|
Employee
costs
|
179,708
|
182,666
|
|
352,125
|
353,217
|
Other operating
expenses
|
152,291
|
129,333
|
|
289,244
|
250,073
|
Title losses and
related claims
|
21,090
|
19,802
|
|
38,472
|
37,476
|
Depreciation and
amortization
|
15,198
|
15,528
|
|
30,582
|
30,434
|
Interest
|
4,812
|
4,875
|
|
9,869
|
9,724
|
|
573,225
|
523,980
|
|
1,120,394
|
1,058,438
|
Income before taxes and
noncontrolling interests
|
29,005
|
25,174
|
|
36,151
|
15,018
|
Income tax
expense
|
(7,940)
|
(5,392)
|
|
(8,876)
|
(454)
|
Net income
|
21,065
|
19,782
|
|
27,275
|
14,564
|
Less net income
attributable to noncontrolling interests
|
3,722
|
3,967
|
|
6,802
|
6,939
|
Net income attributable
to Stewart
|
17,343
|
15,815
|
|
20,473
|
7,625
|
|
|
|
|
|
|
Net earnings per
diluted share attributable to Stewart
|
0.62
|
0.58
|
|
0.73
|
0.28
|
Diluted average shares
outstanding (000)
|
28,013
|
27,444
|
|
28,011
|
27,402
|
|
|
|
|
|
|
Selected financial
information:
|
|
|
|
|
|
Net cash provided
(used) by operations
|
21,123
|
35,107
|
|
(8,465)
|
(15,995)
|
Other comprehensive
(loss) income
|
(752)
|
(1,290)
|
|
(7,348)
|
6,017
|
Second Quarter
Domestic Order Counts:
|
|
|
|
|
|
|
|
Opened Orders
2024:
|
Apr
|
May
|
June
|
Total
|
|
Closed Orders
2024:
|
Apr
|
May
|
June
|
Total
|
Commercial
|
1,232
|
1,249
|
1,045
|
3,526
|
|
Commercial
|
1,288
|
1,314
|
1,185
|
3,787
|
Purchase
|
19,273
|
18,493
|
17,291
|
55,057
|
|
Purchase
|
12,247
|
13,610
|
11,975
|
37,832
|
Refinancing
|
5,782
|
5,976
|
4,973
|
16,731
|
|
Refinancing
|
3,530
|
3,547
|
2,901
|
9,978
|
Other
|
3,664
|
4,810
|
2,933
|
11,407
|
|
Other
|
3,272
|
2,526
|
2,104
|
7,902
|
Total
|
29,951
|
30,528
|
26,242
|
86,721
|
|
Total
|
20,337
|
20,997
|
18,165
|
59,499
|
|
|
|
|
|
|
|
|
|
|
|
Opened Orders
2023:
|
Apr
|
May
|
June
|
Total
|
|
Closed Orders
2023:
|
Apr
|
May
|
June
|
Total
|
Commercial
|
1,034
|
1,071
|
1,189
|
3,294
|
|
Commercial
|
1,069
|
1,212
|
1,304
|
3,585
|
Purchase
|
17,457
|
20,956
|
19,030
|
57,443
|
|
Purchase
|
12,312
|
15,013
|
14,901
|
42,226
|
Refinancing
|
5,365
|
6,102
|
5,393
|
16,860
|
|
Refinancing
|
3,298
|
3,587
|
3,698
|
10,583
|
Other
|
3,536
|
2,129
|
1,923
|
7,588
|
|
Other
|
1,066
|
1,131
|
1,658
|
3,855
|
Total
|
27,392
|
30,258
|
27,535
|
85,185
|
|
Total
|
17,745
|
20,943
|
21,561
|
60,249
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STEWART INFORMATION
SERVICES CORPORATION
CONDENSED BALANCE
SHEETS
(In thousands of
dollars)
|
|
June 30, 2024
(Unaudited)
|
December 31,
2023
|
Assets:
|
|
|
Cash and cash
equivalents
|
133,405
|
233,365
|
Short-term
investments
|
43,341
|
39,023
|
Investments in debt
and equity securities, at fair value
|
660,933
|
679,936
|
Receivables – premiums
from agencies
|
39,974
|
38,676
|
Receivables –
other
|
117,593
|
93,811
|
Allowance for
uncollectible amounts
|
(8,186)
|
(7,583)
|
Property and
equipment, net
|
86,729
|
82,335
|
Operating lease
assets, net
|
108,653
|
115,879
|
Title
plants
|
73,378
|
73,359
|
Goodwill
|
1,080,546
|
1,072,129
|
Intangible assets, net
of amortization
|
177,112
|
193,196
|
Deferred tax
assets
|
3,673
|
3,776
|
Other
assets
|
128,335
|
84,959
|
|
2,645,486
|
2,702,861
|
Liabilities:
|
|
|
Notes
payable
|
445,568
|
445,290
|
Accounts payable and
accrued liabilities
|
165,382
|
190,054
|
Operating lease
liabilities
|
127,307
|
135,654
|
Estimated title
losses
|
512,446
|
528,269
|
Deferred tax
liabilities
|
23,509
|
25,045
|
|
1,274,212
|
1,324,312
|
Stockholders'
equity:
|
|
|
Common Stock and
additional paid-in capital
|
345,082
|
338,451
|
Retained
earnings
|
1,064,870
|
1,070,841
|
Accumulated other
comprehensive loss
|
(42,563)
|
(35,215)
|
Treasury
stock
|
(2,666)
|
(2,666)
|
Stockholders' equity
attributable to Stewart
|
1,364,723
|
1,371,411
|
Noncontrolling
interests
|
6,551
|
7,138
|
Total stockholders'
equity
|
1,371,274
|
1,378,549
|
|
2,645,486
|
2,702,861
|
|
|
|
Number of shares
outstanding (000)
|
27,605
|
27,370
|
Book value per
share
|
49.44
|
50.11
|
STEWART INFORMATION
SERVICES CORPORATION
SEGMENT
INFORMATION
(In thousands of
dollars)
|
|
Quarter
Ended:
|
June 30,
2024
|
|
June 30,
2023
|
|
Title
|
Real
Estate
Solutions
|
Corporate and
Other
|
Total
|
|
Title
|
Real
Estate
Solutions
|
Corporate and
Other
|
Total
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
496,240
|
92,198
|
-
|
588,438
|
|
466,749
|
71,387
|
-
|
538,136
|
Investment
income
|
14,282
|
24
|
-
|
14,306
|
|
12,099
|
24
|
-
|
12,123
|
Net realized and
unrealized (losses)
gains
|
(487)
|
-
|
(27)
|
(514)
|
|
1,977
|
-
|
(3,082)
|
(1,105)
|
|
510,035
|
92,222
|
(27)
|
602,230
|
|
480,825
|
71,411
|
(3,082)
|
549,154
|
Expenses:
|
|
|
|
|
|
|
|
|
|
Amounts retained by
agencies
|
200,126
|
-
|
-
|
200,126
|
|
171,776
|
-
|
-
|
171,776
|
Employee
costs
|
162,916
|
13,583
|
3,209
|
179,708
|
|
165,585
|
12,538
|
4,543
|
182,666
|
Other operating
expenses
|
83,616
|
67,252
|
1,423
|
152,291
|
|
78,960
|
49,311
|
1,061
|
129,332
|
Title losses and
related claims
|
21,090
|
-
|
-
|
21,090
|
|
19,802
|
-
|
-
|
19,802
|
Depreciation and
amortization
|
8,536
|
6,264
|
398
|
15,198
|
|
8,883
|
6,280
|
365
|
15,528
|
Interest
|
380
|
7
|
4,425
|
4,812
|
|
360
|
-
|
4,515
|
4,875
|
|
476,664
|
87,106
|
9,455
|
573,225
|
|
445,366
|
68,129
|
10,484
|
523,979
|
Income (loss) before
taxes
|
33,371
|
5,116
|
(9,482)
|
29,005
|
|
35,459
|
3,282
|
(13,566)
|
25,175
|
Six Months
Ended:
|
June 30,
2024
|
|
June 30,
2023
|
|
Title
|
Real
Estate
Solutions
|
Corporate and
Other
|
Total
|
|
Title
|
Real
Estate
Solutions
|
Corporate and
Other
|
Total
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
947,600
|
175,214
|
-
|
1,122,814
|
|
923,639
|
133,978
|
-
|
1,057,617
|
Investment
income
|
27,158
|
49
|
-
|
27,207
|
|
18,665
|
57
|
-
|
18,722
|
Net realized and
unrealized gains
(losses)
|
6,629
|
-
|
(105)
|
6,524
|
|
164
|
-
|
(3,047)
|
(2,883)
|
|
981,387
|
175,263
|
(105)
|
1,156,545
|
|
942,468
|
134,035
|
(3,047)
|
1,073,456
|
Expenses:
|
|
|
|
|
|
|
|
|
|
Amounts retained by
agencies
|
400,102
|
-
|
-
|
400,102
|
|
377,514
|
-
|
-
|
377,514
|
Employee
costs
|
319,718
|
25,801
|
6,606
|
352,125
|
|
319,862
|
24,971
|
8,384
|
353,217
|
Other operating
expenses
|
161,516
|
125,070
|
2,658
|
289,244
|
|
155,127
|
91,835
|
3,112
|
250,074
|
Title losses and
related claims
|
38,472
|
-
|
-
|
38,472
|
|
37,476
|
-
|
-
|
37,476
|
Depreciation and
amortization
|
17,266
|
12,538
|
778
|
30,582
|
|
16,986
|
12,581
|
867
|
30,434
|
Interest
|
759
|
7
|
9,103
|
9,869
|
|
709
|
-
|
9,015
|
9,724
|
|
937,833
|
163,416
|
19,145
|
1,120,394
|
|
907,674
|
129,387
|
21,378
|
1,058,439
|
Income (loss) before
taxes
|
43,554
|
11,847
|
(19,250)
|
36,151
|
|
34,794
|
4,648
|
(24,425)
|
15,017
|
Appendix A
Non-GAAP Adjustments
Management uses a variety of financial and operational
measurements other than its financial statements prepared in
accordance with United States Generally Accepted Accounting
Principles (GAAP) to analyze its performance. These include: (1)
adjusted revenues, which are reported revenues adjusted for net
realized and unrealized gains and losses and (2) adjusted pretax
income and adjusted net income, which are reported pretax income
and reported net income after earnings from noncontrolling
interests, respectively, adjusted for net realized and unrealized
gains and losses, acquired intangible asset amortization, office
closure costs, executive severance expenses, and nonrecurring
expenses. Adjusted diluted earnings per share (adjusted diluted
EPS) is calculated using adjusted net income divided by the diluted
average weighted outstanding shares. Adjusted pretax margin is
calculated using adjusted pretax income divided by adjusted total
revenues. Management views these measures as important performance
measures of core profitability for its operations and as key
components of its internal financial reporting. Management believes
investors benefit from having access to the same financial measures
that management uses.
Below are reconciliations of the non-GAAP financial measures
used by management to the most directly comparable GAAP measures
for the quarter and six months ended June
30, 2024 and 2023 (dollars in millions, except shares, per
share amounts and pretax margins, and amounts may not add as
presented due to rounding).
|
Quarter Ended June
30,
|
|
Six Months Ended
June 30,
|
|
2024
|
2023
|
% Chg
|
|
2024
|
2023
|
% Chg
|
|
|
|
|
|
|
|
|
Total
revenues
|
602.2
|
549.2
|
10 %
|
|
1,156.5
|
1,073.5
|
8 %
|
Non-GAAP revenue
adjustments:
|
|
|
|
|
|
|
|
Net realized and
unrealized losses (gains)
|
0.5
|
1.1
|
|
|
(6.5)
|
2.9
|
|
Adjusted total
revenues
|
602.7
|
550.3
|
10 %
|
|
1,150.0
|
1,076.3
|
7 %
|
|
|
|
|
|
|
|
|
Pretax
income
|
29.0
|
25.2
|
15 %
|
|
36.2
|
15.0
|
141 %
|
Non-GAAP pretax
adjustments:
|
|
|
|
|
|
|
|
Net realized and
unrealized losses (gains)
|
0.5
|
1.1
|
|
|
(6.5)
|
2.9
|
|
Acquired intangible
asset amortization
|
8.3
|
9.1
|
|
|
16.8
|
17.6
|
|
Office closure
costs
|
1.5
|
-
|
|
|
1.6
|
-
|
|
Executive severance
expenses
|
0.3
|
1.7
|
|
|
0.6
|
1.7
|
|
State sales tax
assessment expense
|
-
|
1.2
|
|
|
-
|
1.2
|
|
Adjusted pretax
income
|
39.6
|
38.3
|
3 %
|
|
48.7
|
38.5
|
27 %
|
GAAP pretax
margin
|
4.8 %
|
4.6 %
|
|
|
3.1 %
|
1.4 %
|
|
Adjusted pretax
margin
|
6.6 %
|
7.0 %
|
|
|
4.2 %
|
3.6 %
|
|
|
|
|
|
|
|
|
|
Net income attributable
to Stewart
|
17.3
|
15.8
|
10 %
|
|
20.5
|
7.6
|
169 %
|
Non-GAAP pretax
adjustments:
|
|
|
|
|
|
|
|
Net realized and
unrealized losses (gains)
|
0.5
|
1.1
|
|
|
(6.5)
|
2.9
|
|
Acquired intangible
asset amortization
|
8.3
|
9.1
|
|
|
16.8
|
17.6
|
|
Office closure
costs
|
1.5
|
-
|
|
|
1.6
|
-
|
|
Executive severance
expenses
|
0.3
|
1.7
|
|
|
0.6
|
1.7
|
|
State sales tax
assessment expense
|
-
|
1.2
|
|
|
-
|
1.2
|
|
Net tax effects of
non-GAAP adjustments
|
(2.5)
|
(3.2)
|
|
|
(3.0)
|
(5.6)
|
|
Non-GAAP adjustments,
after taxes
|
8.1
|
10.0
|
|
|
9.6
|
17.9
|
|
Adjusted net income
attributable to Stewart
|
25.4
|
25.8
|
(2 %)
|
|
30.0
|
25.5
|
18 %
|
|
|
|
|
|
|
|
|
Diluted average shares
outstanding (000)
|
28,013
|
27,444
|
|
|
28,011
|
27,402
|
|
GAAP net income per
share
|
0.62
|
0.58
|
|
|
0.73
|
0.28
|
|
Adjusted net income per
share
|
0.91
|
0.94
|
|
|
1.07
|
0.93
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June
30,
|
|
Six Months Ended
June 30,
|
|
2024
|
2023
|
% Chg
|
|
2024
|
2023
|
% Chg
|
Title
Segment:
|
|
|
|
|
|
|
|
Revenues
|
510.0
|
480.8
|
6 %
|
|
981.4
|
942.5
|
4 %
|
Net realized and
unrealized losses (gains)
|
0.5
|
(2.0)
|
|
|
(6.6)
|
(0.2)
|
|
Adjusted
revenues
|
510.5
|
478.8
|
7 %
|
|
974.8
|
942.3
|
3 %
|
|
|
|
|
|
|
|
|
Pretax
income
|
33.4
|
35.5
|
(6 %)
|
|
43.6
|
34.8
|
25 %
|
Non-GAAP revenue
adjustments:
|
|
|
|
|
|
|
|
Net realized and
unrealized losses (gains)
|
0.5
|
(2.0)
|
|
|
(6.6)
|
(0.2)
|
|
Acquired intangible
asset amortization
|
2.8
|
3.3
|
|
|
5.7
|
6.0
|
|
Office closure
costs
|
1.5
|
-
|
|
|
1.6
|
-
|
|
Severance
expenses
|
0.3
|
1.0
|
|
|
0.6
|
1.0
|
|
Adjusted pretax
income
|
38.4
|
37.7
|
2 %
|
|
44.9
|
41.6
|
8 %
|
GAAP pretax
margin
|
6.5 %
|
7.4 %
|
|
|
4.4 %
|
3.7 %
|
|
Adjusted pretax
margin
|
7.5 %
|
7.9 %
|
|
|
4.6 %
|
4.4 %
|
|
Real Estate
Solutions Segment:
|
|
|
|
|
|
|
|
Revenues
|
92.2
|
71.4
|
29 %
|
|
175.3
|
134.0
|
31 %
|
|
|
|
|
|
|
|
|
Pretax
income
|
5.1
|
3.3
|
56 %
|
|
11.8
|
4.6
|
155 %
|
Non-GAAP revenue
adjustments:
|
|
|
|
|
|
|
|
Acquired intangible
asset amortization
|
5.5
|
5.8
|
|
|
11.1
|
11.6
|
|
State sales tax
assessment expense
|
-
|
1.2
|
|
|
-
|
1.2
|
|
Adjusted pretax
income
|
10.6
|
10.3
|
3 %
|
|
23.0
|
17.5
|
31 %
|
GAAP pretax
margin
|
5.5 %
|
4.6 %
|
|
|
6.8 %
|
3.5 %
|
|
Adjusted pretax
margin
|
11.5 %
|
14.5 %
|
|
|
13.1 %
|
13.1 %
|
|
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SOURCE Stewart Information Services Corporation