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Previous: FIRST PACIFIC ADVISORS INC /CA/ /ADV, SC 13G, 1998-02-12 |
Next: LAWYERS TITLE CORP, S-3, 1998-02-12 |
FORM 10-Q/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1997 Commission File No. 0-13990
------------------ -------
LAWYERS TITLE CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Virginia 54-1589611
--------------------------- -------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
6630 West Broad Street, Richmond, Virginia 23230
- ------------------------------------------ -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (804) 281-6700
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock 8,983,020 January 30, 1998
No Par Value ------------- ------------------
<PAGE>
LAWYERS TITLE CORPORATION AND SUBSIDIARIES
INDEX
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets.......................................3
Consolidated Statements of Operations
and Retained Earnings .........................................5
Consolidated Statements of
Cash Flows.....................................................6
Notes to Consolidated
Financial Statements...........................................7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.....................................8
Signatures........................................................9
-2-
<PAGE>
PART I. FINANCIAL INFORMATION
LAWYERS TITLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1997 1996
- ------ ---- ----
<S> <C> <C>
INVESTMENTS:
Fixed maturities available-for-sale - at fair
value (amortized cost: 1997 - $245,161;
1996 - $214,875) $ 252,564 $ 218,224
Equity securities - at fair value (cost: 1997 -
$887; 1996 - $930) 1,664 1,725
Mortgage loans (less allowance for doubtful
accounts: 1997 and 1996 - $150) 456 480
Invested cash 26,773 71,626
------------ ------------
Total investments 281,457 292,055
CASH 36,258 23,997
NOTES AND ACCOUNTS RECEIVABLE:
Notes (less allowance for doubtful accounts:
1997 - $1,083; 1996 - $1,008) 6,050 6,657
Accounts receivable (less allowance for doubtful
accounts: 1997 - $2,571; 1996 - $2,197) 27,456 20,003
------------ ------------
Total notes and accounts receivable 33,506 26,660
PROPERTY AND EQUIPMENT - at cost (less
accumulated depreciation and amortization:
1997 - $50,584; 1996 - $44,670) 21,070 21,959
TITLE PLANTS 48,930 48,536
GOODWILL (less accumulated amortization:
1997 - $13,670; 1996 - $12,393) 58,813 59,669
DEFERRED INCOME TAXES 25,500 23,435
OTHER ASSETS 35,410 24,657
------------ ------------
Total assets $ 540,944 $ 520,968
============ ============
</TABLE>
See Accompanying Notes.
-3-
<PAGE>
LAWYERS TITLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
LIABILITIES 1997 1996
- ----------- ---- ----
<S> <C> <C>
POLICY AND CONTRACT CLAIMS $ 199,865 $ 196,285
ACCOUNTS PAYABLE AND
ACCRUED EXPENSES 43,288 47,211
INCOME TAXES PAYABLE 3,982 5,721
OTHER LIABILITIES 12,479 9,583
------------ ------------
Total liabilities 259,614 258,800
------------ ------------
</TABLE>
COMMITMENTS AND CONTINGENCIES
<TABLE>
<CAPTION>
SHAREHOLDERS' EQUITY
- --------------------
<S> <C> <C>
Preferred stock, no par value, authorized
5,000,000 shares, none issued or outstanding - -
Common stock, no par value, authorized 45,000,000
shares, issued and outstanding, 8,928,041 in
1997 and 8,889,791 in 1996 167,621 167,044
Unrealized investment gains (less related
deferred income tax expense of $2,863
in 1997 and $1,450 in 1996) 5,317 2,694
Retained earnings 108,392 92,430
------------ ------------
Total shareholders' equity 281,330 262,168
------------ ------------
Total liabilities and shareholders' equity $ 540,944 $ 520,968
============ ============
</TABLE>
See Accompanying Notes.
-4-
<PAGE>
LAWYERS TITLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
NINE MONTHS AND THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(In thousands of dollars except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES
Premiums $ 353,775 $ 328,438 $ 128,635 $ 115,251
Title search, escrow and other 85,769 74,503 31,721 26,428
Investment income 12,419 15,438 4,036 4,593
----------- ----------- ----------- -----------
Total revenues 451,963 418,379 164,392 146,272
----------- ----------- ----------- -----------
EXPENSES
Salaries and employee benefits 148,596 137,127 51,778 47,359
Agents' commissions 149,944 134,116 54,178 47,731
Provision for policy and contract claims 23,910 21,075 8,590 7,491
General, administrative and other 102,994 96,396 36,805 34,541
----------- ----------- ----------- -----------
Total expenses 425,444 388,714 151,351 137,122
----------- ----------- ----------- -----------
OPERATING INCOME BEFORE
INCOME TAXES 26,519 29,665 13,041 9,150
INCOME TAX EXPENSE
Current 12,919 12,642 5,259 5,107
Deferred (3,699) (2,596) (659) (2,011)
----------- ----------- ----------- -----------
Total income tax expense 9,220 10,046 4,600 3,096
----------- ----------- ----------- -----------
NET INCOME 17,299 19,619 8,441 6,054
DIVIDENDS (1,337) (1,333) (446) (444)
RETAINED EARNINGS BEGINNING
OF PERIOD 92,430 57,689 100,397 70,365
----------- ----------- ----------- -----------
RETAINED EARNINGS END OF PERIOD $ 108,392 $ 75,975 $ 108,392 $ 75,975
=========== =========== =========== ===========
EARNINGS PER COMMON AND DILUTIVE
COMMON EQUIVALENT SHARE $ 1.87 $ 2.21 $ 0.91 $ 0.68
=========== =========== =========== ===========
EARNINGS PER COMMON SHARE ASSUMING
FULL DILUTION 1.85 2.14 0.90 0.66
AVERAGE NUMBER OF COMMON AND
DILUTIVE COMMON EQUIVALENT SHARES
OUTSTANDING 9,231 8,888 9,260 8,889
AVERAGE NUMBER OF SHARES OUTSTANDING
ASSUMING FULL DILUTION 9,332 9,158 9,340 9,159
</TABLE>
See Accompanying Notes.
-5-
<PAGE>
LAWYERS TITLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(In thousands of dollars)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 17,299 $ 19,619
Depreciation & amortization 7,736 6,517
Amortization of bond premium 339 568
Realized investment gains (113) (5,399)
Deferred income tax (3,699) (2,596)
Change in assets & liabilities:
Notes receivable 607 800
Premiums receivable (7,453) (51)
Current income taxes (1,739) 4,865
Policy & contract claims 3,580 973
Accounts payable and accrued expenses (3,923) 1,354
Cash surrender value of life insurance (1,081) 3,050
Other (2,740) (5,443)
----------- -----------
Net cash provided by operating activities 8,813 24,257
----------- -----------
Cash flows from investing activities:
Purchase of property & equipment - net (5,090) (6,600)
Purchase of businesses, net of cash acquired - (2,320)
Cost of investments acquired:
Fixed maturities (84,128) (77,093)
Equity securities (6) (27,780)
Mortgage loans - -
Proceeds from investment sales or maturities:
Fixed maturities 53,575 59,938
Equity securities 90 33,961
Mortgage loans 24 341
----------- -----------
Net cash used in investing activities (35,535) (19,553)
----------- -----------
Cash flows from financing activities:
Repayment of cash surrender value loan (7,713) -
Dividends paid (1,337) (1,333)
Change in notes payable 3,180 (48)
----------- -----------
Net cash provided by financing activities (5,870) (1,381)
----------- -----------
Net (decrease) increase in cash and invested cash (32,592) 3,323
Cash & invested cash at beginning of period 95,623 40,647
----------- -----------
Cash & invested cash at end of period $ 63,031 $ 43,970
=========== ===========
</TABLE>
See Accompanying Notes.
-6-
<PAGE>
LAWYERS TITLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Interim Financial Information
The unaudited consolidated financial information included in this
report has been prepared in conformity with the accounting principles
and practices reflected in the consolidated financial statements
included in the Form 10-K for the year ended December 31, 1996 filed
with the Commission under the Securities Exchange Act of 1934. This
report should be read in conjunction with the aforementioned Form 10-K.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) necessary for a fair presentation of this
information have been made. The results of operations for the interim
periods are not necessarily indicative of results for a full year.
Certain 1996 amounts have been reclassified to conform to the 1997
presentation.
2. Pending Legal Proceedings
For additional information, see Pending Legal Proceedings on page F-27
of the December 31, 1996 Form 10-K.
3. Accounting Pronouncements
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings per Share (Statement 128), which is
required to be adopted on December 31, 1997. At that time, the Company
will be required to change the method currently used to compute
earnings per share and to restate all prior periods. Under the new
requirements for calculating primary earnings per share, the dilutive
effect of stock options will be excluded and dual presentation is
required regardless of the difference between basic and diluted
earnings per share. The impact of Statement 128 on the calculation of
primary and diluted earnings per share for these quarters is not
expected to be material.
-7-
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
(2) Stock Purchase Agreement, dated August 20, 1997,
by and among the Registrant, Lawyers Title
Insurance Corporation, Reliance Insurance Company
and Reliance Group Holdings, Inc., incorporated by
reference to Appendix A to the Registrant's Proxy
Statement for its Special Meeting of Shareholders
to be held in December, 1997, filed with the
Commission on September 30, 1997.
(11) Statement Re: Computation of Earnings Per Share.
(27) Financial Data Schedule (electronic copy only).*
(99) Proposed Articles of Amendment to the Registrant's
Articles of Incorporation (as set forth in
Appendix B to the Registrant's Proxy Statement for
its Special Meeting of Shareholders to be held in
December 1997, filed with the Commission on
September 30, 1997).*
-------------------------
* Included with the Form 10-Q filed on November 14, 1997.
b. Reports on Form 8-K
In a Form 8-K filed September 2, 1997, the Registrant
announced the signing of a definitive agreement to purchase
all of the capital stock of Commonwealth Land Title
Insurance Company and Transnation Title Insurance Company
from Reliance Insurance Company (RIC). The Registrant also
announced that its Board of Directors had amended and
restated the Company's Rights Agreement, with the most
significant changes involving (i) provisions that the
agreement with RIC would not "trigger" the rights, (ii) an
extension of the expiration date of the Rights Agreement
from October 1, 2001 to August 20, 2007, and (iii) an
increase in the exercise price of the rights from $60 to
$85.
-8-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
LAWYERS TITLE CORPORATION
Dated: February 12, 1998 By: /s/ Janet A. Alpert
------------------------------------
Janet A. Alpert
President and Chief Operating Officer
Dated: February 12, 1998 By: /s/ G. William Evans
------------------------------------
G. William Evans
Vice President and Treasurer
-9-
<PAGE>
EXHIBIT INDEX
No. Description
- --- -----------
(2) Stock Purchase Agreement, dated August 20, 1997, by and among the
Registrant, Lawyers Title Insurance Corporation, Reliance Insurance
Company and Reliance Group Holdings, Inc., incorporated by reference
to Appendix A to the Registrant's Proxy Statement for its Special
Meeting of Shareholders to be held in December, 1997, filed with the
Commission on September 30, 1997.
(11) Statement Re: Computation of Earnings Per Share.
(27) Financial Data Schedule (electronic copy only).*
(99) Proposed Articles of Amendment to the Registrant's Articles of
Incorporation (as set forth in Appendix B to the Registrant's Proxy
Statement for its Special Meeting of Shareholders to be held in
December 1997, filed with the Commission on September 30, 1997).*
- -------------------------
* Included with the Form 10-Q filed on November 14, 1997.
Exhibit 11
LAWYERS TITLE CORPORATION AND SUBSIDIARIES
Statement Re: Computation of Earnings Per Share
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30 September 30
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Earnings per common and dilutive common equivalent share:
Average shares outstanding 8,911 8,888 8,919 8,889
Net effect of dilutive stock options - based
on the treasury stock method using
average market price 320 - 341 -
-------- --------- --------- ---------
Totals 9,321 8,888 9,260 8,889
======== ========= ========= =========
Net income $ 17,299 $ 19,619 $ 8,441 $ 6,054
======== ========= ========= =========
Per share amount $ 1.87 $ 2.21 $ 0.91 $ 0.68
======== ========= ========= =========
Earnings per common share assuming full dilution:
Average shares outstanding 8,911 8,888 8,919 8,889
Net effect of dilutive stock options - based
on the treasury stock method using
ending market price which is greater
than average market price 421 270 421 270
-------- --------- --------- ---------
Totals 9,332 9,158 9,340 9,159
======== ========= ========= =========
Net income $ 17,299 $ 19,619 $ 8,441 $ 6,054
======== ========= ========= =========
Per share amount $ 1.85 $ 2.14 $ 0.90 $ 0.66
======== ========= ========= =========
</TABLE>
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