The Midland Company Anticipates Strong Fourth-Quarter and Record Full-Year Results
January 18 2007 - 7:30AM
PR Newswire (US)
* Anticipates Fourth-Quarter Earnings Per Share in $1.03 to $1.07
Range CINCINNATI, Jan. 18 /PRNewswire-FirstCall/ -- The Midland
Company (NASDAQ:MLAN), a highly focused provider of specialty
insurance products and services, today announced that it
anticipates reporting strong fourth-quarter earnings and record
setting full-year results. Based on preliminary data, the company
is anticipating net income for the fourth quarter 2006 in the range
of $20.3 million to $21.1 million, or $1.03 to $1.07 on a per share
basis. This compares to fourth-quarter 2005 net income of $20.0
million, or $1.03 per share. All per share amounts are on an
after-tax diluted basis. Net income before realized capital gains*
for the quarter is anticipated to be in the range of 93 cents to 97
cents per share. This compares to net income before realized
capital gains* for the fourth quarter of 2005 of $1.00 per share.
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. John W. Hayden,
Midland president and chief executive officer said, "We are pleased
with our anticipated fourth quarter earnings. These outstanding
results were driven by strong non-catastrophe underwriting profits.
We are expecting to report a solid fourth quarter non-catastrophe
combined ratio that will likely be just a few percentage points
above the exceptionally low 83.7% we reported in last year's fourth
quarter. "We are equally pleased with our fourth quarter property
and casualty written premiums which are expected to grow over ten
percent from the year ago level. This tremendous result is
attributable to growth across our broad specialty product
offerings, most notably in our mortgage fire, site-built dwelling
and excess and surplus product lines." Hayden continued, "We expect
record full-year results to be in the range of $3.56 to $3.60 per
share. This compares to $3.37 per share, the prior record set in
2005. Net income before realized capital gains* for the full year
is also anticipated to come in at a record level in the range of
$3.28 to $3.32 per share. This compares to the previous record of
$3.16 per share in 2005. "We are pleased to be able to report
record results again this year, coming on the heels of our previous
record results posted in 2005. Throughout 2006 we continued to
successfully execute our profit strategies, maintaining
underwriting discipline and rate adequacy. Our ability to
continually produce strong non-catastrophe underwriting results
demonstrates that our specialty property and casualty products are
well positioned. We continue to assert our leadership position in
the specialty P&C marketplace," Hayden said. 2007 Outlook "The
well established fundamental profitability of our specialty
property and casualty product lines gives us great confidence as we
move forward into 2007. We are anticipating a full year 2007
property and casualty combined ratio in the range of 93.0 percent
to 94.5 percent, assuming normal weather patterns, of course,"
Hayden said. "Based on these levels of underwriting profit, we
anticipate full-year 2007 (diluted) earnings per share in the range
of $3.25 to $3.55, assuming no net realized capital gains or
losses. "With respect to the top-line, we look for our positive
premium momentum to carry on into 2007. That said, however, we must
be very deliberate in managing our exposures in coastal territories
given the unprecedented insurance market volatility these areas are
experiencing. Our focus, as always, will be on achieving long-term
profitable growth. All said, we should exceed industry expectations
for growth as we anticipate mid to high-single digit premium growth
(on a percentage basis) in 2007, over the 2006 levels." Upcoming
Conference Call The company will further discuss its 2006 results
and 2007 outlook in its quarterly conference call on February 15,
2007 at 1:30 p.m. (EST). 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 95 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 Global Select Market under the
symbol MLAN. Additional information on the company can be found on
the Internet at http://www.midlandcompany.com/. *Non-GAAP Measure
and Reconciliation to 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. Reconciliation to GAAP: Fourth Quarter 2006 2005
Estimated Range Actual Per Share Amounts (After-Tax, Diluted): Net
Income Before Realized Capital Gains $0.93 $0.97 $1.00 Net Realized
Capital Gains 0.10 0.10 0.03 Net Income (GAAP) $1.03 $1.07 $1.03
Full Year 2006 2005 Estimated Range Actual Per Share Amounts
(After-Tax, Diluted): Net Income Before Realized Capital Gains
$3.28 $3.32 $3.16 Net Realized Capital Gains 0.28 0.28 0.21 Net
Income (GAAP) $3.56 $3.60 $3.37 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 2006 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: W. Todd Gray,
Executive Vice President and CFO of The Midland Company,
+1-513-943-7100 Web site: http://www.midlandcompany.com/
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