SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
___________________________________
Date of Report: March 8, 1999
Date of Earliest Event Reported: March 8, 1999
STIRLING COOKE BROWN HOLDINGS LIMITED
(Exact name of registrant as specified in its charter)
Bermuda 000-23427 Not Applicable
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification
incorporation or Number)
organization)
Victoria Hall, Third Floor
11 Victoria Street
Hamilton, HM 11, Bermuda
(Address of principal
executive offices)
Registrant's telephone number, including area code: (441) 295-7556
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Item 5. OTHER EVENTS.
On March 8, 1999, the registrant issued the earnings release
filed as Exhibit 99.1 hereto.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit Description
99.1 Earnings Release issued March 8,
1999
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on behalf of the undersigned hereunto duly authorized.
Dated: March 8, 1999
STIRLING COOKE BROWN HOLDINGS LIMITED
By: /s/ George W. Jones
_____________________________
George W. Jones
Chief Financial Officer
and Director
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EXHIBIT INDEX
Exhibit Description
99.1 Earnings Release issued March 8, 1999
[Stirling Cooke Brown Holdings Limited Letterhead]
FOR IMMEDIATE RELEASE Contact: Mark Cooke
George Jones
Tel: 441-295-7556
Fax: 441-295-7201
Address above
STIRLING COOKE BROWN HOLDINGS LIMITED REPORTS 1998 RESULTS
Hamilton, Bermuda (March 8, 1999) - Stirling Cooke Brown Holdings
Limited (NASDAQ: "SCBHF") today reported results for both the
fourth quarter and the year ended December 31, 1998 as follows:
Quarter ended Year ended
December 31st December 31st
1997 1998 1997 1998
---- ---- ---- ----
(Dollars in thousands except per share data)
Net Income $3,411 $3,877 $12,993 $16,018
Basic EPS
Net Income per
ordinary share $ 0.38 $ 0.40 $ 1.55 $ 1.63
Avg. no. of
ordinary shares
outstanding -
Basic (000's) 9,031 9,787 8,383 9,814
Diluted EPS
Net Income per
ordinary share $ 0.38 $ 0.40 $ 1.53 $ 1.63
Avg. no. of
ordinary shares
outstanding -
Diluted (000's) 9,038 9,787 8,515 9,840
Mark Cooke, Chairman, President and Chief Executive Officer,
said:
"The operating results for the fourth quarter 1998 once again
reflected the continued growth of the Company's business. Net
income grew by 14% in the fourth quarter to $3.9 million, and
grew by 23% to $16.0 million for the year of 1998, as compared to
$3.4 million and $13.0 million, respectively, in 1997. I
consider the results satisfactory considering the extremely
competitive nature of the workers' compensation market during
1998. We have seen these competitive conditions continuing into
1999."
Diluted net income per share increased by 5% to $0.40 for the
fourth quarter of 1998 and increased by 7% to $1.63 for the year
of 1998, as compared to $0.38 and $1.53, respectively, in 1997.
Risk management fees increased $2.7 million, or 22%, to $14.6
million for the quarter and by $9.9 million, or 22%, to $55.6
million for the year of 1998 compared to the corresponding
periods in 1997. The Company's brokerage operations continued to
grow, increasing brokerage income by $0.7 million to $6.9 million
in the fourth quarter of 1998 and by $3.0 million to $27.0
million for the year of 1998 compared to the corresponding
periods in 1997. The Company also continued to experience growth
in managing general agency fees which increased $0.7 million in
the fourth quarter of 1998, to $3.9 million and by $3.4 million
to $14.7 million for the year of 1998 compared to the
corresponding periods in 1997. This growth reflected the
continued expansion of the Company's managing general agency
network primarily in the Southeastern United States. Policy
issuance fees earned by Realm National Insurance Company Limited
("Realm National") increased $0.5 million to $0.7 million in the
fourth quarter of 1998 and by $1.3 million to $2.1 million for
the year of 1998 compared to the corresponding periods in 1997.
Net premiums earned increased $2.2 million to $4.8 million in the
fourth quarter of 1998 and by $6.0 million to $17.8 million for
the year of 1998 compared to the corresponding periods in 1997.
The fourth quarter and year to date increase was due to
significant growth in workers' compensation business being
written by Realm National. Gross premiums written by Realm
National in the fourth quarter of 1998 increased by $4.1 million
to $13.5 million and by $26.9 million to $48.6 million for the
year of 1998 compared to the corresponding periods in 1997. The
growth in premiums written was primarily workers' compensation
business generated by the Company's M.G.A. network and
independent M.G.A.s based primarily in the Southeastern United
States.
Net investment income increased $0.9 million to $2.4 million for
the fourth quarter of 1998 and by $3.0 million to $8.8 million
for the year of 1998 compared to the corresponding periods in
1997. Overall total revenues increased $5.1 million, or 29%, to
$22.4 million for the fourth quarter of 1998 and by $19.8
million, or 30%, to $85.1 million for the year of 1998 compared
to the corresponding periods in 1997.
Total expenses increased $4.6 million, or 35%, to $17.6 million
for the fourth quarter of 1998 and by $15.9 million, or 32%, to
$65.3 million for the year of 1998 compared to the corresponding
periods in 1997. Of the increase, $3.1 million in the fourth
quarter and $8.6 million for the year related to increased
insurance costs. This was due to a corresponding increase in net
premiums earned in the respective periods, and a provision of
$2.5 million in the fourth quarter in respect of reinsurance
recoveries which was partially offset by an underwriting surplus
on the Company's other programs. This resulted in an overall
underwriting loss for the quarter. Total expenses excluding
insurance costs increased $1.5 million, or 15%, to $11.7 million
for the fourth quarter of 1998 and increased $7.3 million, or
20%, to $44.4 million for the year of 1998 as compared to the
corresponding periods in 1997, reflecting the general expansion
of the Company as reflected in the Company's growth in revenues.
The Board is authorizing a subsidiary of the Company to increase
its share repurchase program from 250,000 to 500,000 shares of
the Company's outstanding ordinary shares. The Company expects
such repurchases to be effected from time to time, in the open
market, in private transactions or otherwise, subject to market
conditions. No assurance can be given as to the time period over
which the shares will be repurchased or as to whether and to what
extent the share repurchase will be consummated.
The Company will pay a first quarter dividend of 3 cents per
ordinary share. The dividend will be payable on March 30, 1999
to shareholders of record on March 19, 1999.
Stirling Cooke Brown Holdings Limited is a Bermuda holding
company which, through its subsidiaries, provides risk management
services and products predominantly to U.S. based small and mid-
sized businesses, including those seeking cost-effective
alternatives to traditional commercial insurance for certain of
their risk exposures. In addition, the Company arranges
reinsurance for its products as well as for those offered by
independent insurance carriers and reinsurance companies active
in the workers' compensation, occupational accident and health
and casualty insurance markets.
Stirling Cooke Brown Holdings Limited Ordinary Shares are quoted
on the NASDAQ market under the symbol "SCBHF".
Statements in this press release which are other than historical
facts are intended to be "forward-looking statements" within the
meaning of the Securities Exchange Act of 1934, the Private
Securities Litigation Reform Act 1995 and other related laws, and
include, but are not limited to, those statements relating to the
Company's beliefs and expectations concerning 1999. While the
Company believes such statements are reasonable, the actual
results could differ materially from those currently anticipated.
Factors and risks that could cause such differences include, but
are not limited to, the conditions in the workers compensation
market, the availability of reinsurance, competition, regulation
and other factors. The cautionary statements contained in
Exhibit 99 to the Company's Form 10-K for the year ended December
31, 1997 are incorporated herein by reference.
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STIRLING COOKE BROWN HOLDINGS LIMITED
Fourth Quarter and Year End Reported Earnings
Unaudited
Quarter ended December 31 Year ended December 31
1997 1998 1997 1998
<S> <C> <C> <C> <C>
(Dollars in thousands except share data)
Income Statement Data:
Revenues
Risk management fees.. $11,950 $14,628 $45,664 $55,580
Net premiums earned... 2,679 4,836 11,790 17,774
Net investment income. 1,464 2,398 5,782 8,771
Other income.......... 1,208 489 2,074 2,968
_______ _______ _______ _______
Total revenues..... 17,301 22,351 65,310 85,093
_______ _______ _______ _______
Expenses
Net losses and loss
expenses incurred... 2,523 3,934 10,951 17,271
Acquisition costs..... 337 1,991 1,344 3,618
Salaries and benefits. 5,218 6,166 18,503 22,805
General and administr-
ation expenses...... 4,957 5,545 18,594 21,591
_______ _______ _______ _______
Total expenses..... 13,035 17,636 49,392 65,285
_______ _______ _______ _______
Income before taxation.. 4,266 4,715 15,918 19,808
Taxation.............. 855 838 2,925 3,790
_______ _______ _______ _______
Net income....... 3,411 3,877 12,993 16,018
======= ======= ======= =======
Basic
Net income per ordinary
share $ 0.38 $ 0.40 $ 1.55 $ 1.63
Average number of
ordinary shares out-
standing -
Basic (000's) 9,031 9,787 8,383 9,814
Diluted
Net income per ordinary
share $ 0.38 $ 0.40 $ 1.53 $ 1.63
Average number of
ordinary shares out-
standing -
Diluted (000's) 9,038 9,787 8,516 9,840
Balance Sheet Data:
December 31, 1997 December 31, 1998
_________________ _________________
Total Assets $ 406,330 $ 649,641
Shareholders' Equity $ 83,103 $ 97,632
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