The Midland Company Anticipates Record Setting First Quarter
April 07 2005 - 10:02AM
PR Newswire (US)
The Midland Company Anticipates Record Setting First Quarter -
Anticipates Record First Quarter Earnings Per Share in $1.02 to
$1.07 Range CINCINNATI, April 7 /PRNewswire-FirstCall/ -- The
Midland Company (NASDAQ:MLAN), a highly focused provider of
specialty insurance products and services, today announced that it
anticipates record setting first quarter earnings. Midland's
estimated results for the first quarter are: Estimated Range Actual
1st Qtr 2005 1st Qtr 2004 Per Share Amounts (After-tax, Diluted):
Net Income Before Realized Capital Gains* $1.00 $1.05 $0.74 Net
Realized Capital Gains 0.02 0.02 0.16 Net Income $1.02 $1.07 $0.90
John W. Hayden, Midland president and chief executive officer said,
"We are delighted that 2005 is off to a great start. As we
expected, the momentum we built in 2004 is continuing into 2005. We
are anticipating net income before capital gains for the first
quarter to increase approximately 35 percent over the record levels
of a year ago, due largely to our strong underwriting results. We
are anticipating our first quarter property and casualty combined
ratio to be in the neighborhood of 89 percent, an improvement from
last year's strong 94.3 percent. Manufactured housing has produced
exceptionally strong results, although we are equally pleased with
the underwriting results in our other major lines." Hayden added,
"In the latter half of 2004, we experienced favorable loss
development from our previously exited commercial liability lines.
I am pleased to say that the trend has continued in the first
quarter of 2005 and we anticipate that this line will favorably
impact earnings per share by approximately 5 cents in the quarter,
which compares to a negative impact of 4 cents per share in last
year's first quarter." Midland's top-line growth is expected to be
in the low single digit range for the quarter. Hayden commented,
"As we look ahead to the second quarter, we believe our growth rate
could be less than that of the first quarter. This is due to the
fact that in the second quarter of last year we assumed the
unearned premium on a collateral protection book of business that
added $17.6 million to the gross written premiums in that quarter.
For the full year, we are currently forecasting top-line growth in
the low single digit range." Hayden said, "As we look ahead to the
full year 2005, I would remind you that we typically expect a
higher level of losses and higher combined ratio in the second and
third quarters of any given year. This is due in particular to the
seasonality of our business, which includes weather related
catastrophes and the increased usage of certain insured items, such
as motorcycles and boats, during the second and third quarters.
That said, assuming normal weather patterns for the remainder of
2005, we believe that we are on track to be slightly ahead of the
high-end of our previously announced full year earnings estimate
range of $2.55 to $2.85 per share, assuming no net realized capital
gains or losses. "We remain very upbeat in our outlook for 2005 and
beyond. We are confident in our ability to deliver superior results
by remaining keenly focused on the fundamentals of our business and
leveraging our core values and strategies. American Modern is a
recognized leader in the specialty insurance business. Our
historical performance and anticipated first quarter results
underscore our specialty knowledge and expertise." Upcoming
Conference Call The company will further discuss its first quarter
2005 results at its quarterly conference call on April 21, 2005 at
1:30 p.m. (EDT). About the Company Midland, which is headquartered
in Cincinnati, Ohio, is a provider of specialty insurance products
and services through its wholly owned subsidiary, American Modern
Insurance Group, which accounts for approximately 96 percent of
Midland's consolidated revenue. American Modern specializes in
writing physical damage insurance and related coverages on
manufactured housing and has expanded to other specialty insurance
products including coverage for site-built homes, motorcycles,
watercraft, snowmobiles, recreational vehicles, physical damage on
long-haul trucks, extended service contracts, excess and surplus
lines coverages, credit life and related products as well as
collateral protection and mortgage fire products sold to financial
institutions and their customers. Midland also owns a niche
transportation business, M/G Transport Group, which operates a
fleet of dry cargo barges for the movement of dry bulk commodities
on the inland waterways. Midland's common stock is traded on the
Nasdaq National Market under the symbol MLAN. Additional
information on the company can be found on the Internet at
http://www.midlandcompany.com/ . *Non-GAAP Measure Net income
before realized capital gains is a non-GAAP measure. Items excluded
from this measure are significant components in understanding and
assessing financial performance. The company believes that this
non-GAAP financial measure provides a clearer picture of the
underlying operating activities than the GAAP measure of net
income, as it removes potential issues such as timing of investment
gains (or losses) and allows readers to individually assess these
components of net income. Forward Looking Statements Disclosure
Certain statements made in this press release are forward-looking
and are made pursuant to the safe harbor provisions of the
Securities Litigation Reform Act of 1995. These statements include
certain discussions relating to underwriting, premium and
investment income volume, business strategies, profitability and
business relationships, as well as any other statements concerning
the year 2005 and beyond. The forward-looking statements involve
risks, uncertainties and other factors that may cause results to
differ materially from those anticipated in those statements.
Factors that might cause results to differ from those anticipated
include, without limitation, adverse weather conditions, changes in
underwriting results affected by adverse economic conditions,
fluctuations in the investment markets, changes in the retail
marketplace, changes in the laws or regulations affecting the
operations of the company or its subsidiaries, changes in the
business tactics or strategies of the company, its subsidiaries or
its current or anticipated business partners, the financial
condition of the company's business partners, acquisitions or
divestitures, changes in market forces, litigation and the other
risk factors that have been identified in the company's filings
with the SEC, any one of which might materially affect the
operations of the company or its subsidiaries. Any forward-looking
statements speak only as of the date made. We undertake no
obligation to update any forward-looking statements to reflect
events or circumstances arising after the date on which they are
made. DATASOURCE: The Midland Company CONTACT: John I. Von Lehman,
Executive Vice President and CFO of The Midland Company,
+1-513-943-7100 Web site: http://www.midlandcompany.com/
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