UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported) April 27, 2005
BALDWIN & LYONS, INC.
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(Exact name of registrant as specified in its charter)
INDIANA 0-5534 35-0160330
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(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification No.)
1099 NORTH MERIDIAN STREET, INDIANAPOLIS, INDIANA 46204
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (317) 636-9800
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Not applicable
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(Former name of former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CRF
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 7.01 REGULATION FD DISCLOSURE
The following information, including the Exhibit to this Form 8-K, is being
furnished pursuant to Item 2.02 - Results of Operations and Financial Condition
of Form 8-K and is being presented under Item 7.01 of Form 8-K. This information
is not deemed to be "filed" for the purposes of Section 18 of the Securities
Exchange Act of 1934 and is not incorporated by reference into any Securities
Act registration statements.
On April 27, 2005, Baldwin & Lyons, Inc. (Baldwin) issued a press release
announcing the results of its operations for the first quarter ended March 31,
2005. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K
and incorporated by reference to this Item 9 and Item 12 as if fully set forth
herein.
Throughout its press release and in the conference call to discuss the results
of its operations for the first quarter 2005, Baldwin presents and will present
its results and operations in the manner it believes will be the most
meaningful, which includes some measures that are not based on accounting
principles generally accepted in the United States (GAAP).
Baldwin management uses operating revenue, a non-GAAP financial measure, which
is revenue excluding pre-tax realized investment gains and losses. It also uses
operating income which is net income excluding after tax realized investment
gains and losses. These financial measures are used to evaluate the Company's
performance because the realization of investment gains and losses in any given
period is largely discretionary as to timing and could distort the analysis of
trends. Baldwin believes that the insurance industry equity analysts exclude
realized gains and losses on investments in their analysis of Baldwin's results
for the same reason.
The combined ratios and the components thereof are presented in accordance with
statutory accounting principles applied to the GAAP underwriting results.
A copy of this press release is also posted on the Company's website.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BALDWIN & LYONS, INC.
April 28, 2005 By /S/ Gary W. Miller
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Gary W. Miller, Chairman
and CEO
(Chief Operating Officer)
Exhibit 99.1
[GRAPHIC OMITTED][GRAPHIC OMITTED]
BALDWIN & LYONS, INC.
PROTECTIVE INSURANCE COMPANY
SAGAMORE INSURANCE COMPANY
B & L INSURANCE, LTD. (BERMUDA)
[OBJECT OMITTED]
1099 NORTH MERIDIAN STREET
Indianapolis, IN 46204
(317) 636-9800
Subj: Baldwin & Lyons, Inc. April 27, 2005
Unaudited First Quarter Press Contact: G. Patrick Corydon
(317) 636-9800
corydon@baldwinandlyons.com
FOR IMMEDIATE RELEASE
INDIANAPOLIS, INDIANA, APRIL 27, 2005--Baldwin & Lyons, Inc. (NASD:
BWINA, BWINB) today announced first quarter operating income, defined as net
income before capital gains or losses, of $7.1 million, or $.48 per share, equal
to amounts reported for the first quarter of 2004. Capital gains of $3.2
million, or $.22 per share, were realized during the current quarter compared to
capital gains of $3.8 million, or $.26 per share in the prior year quarter.
Including capital gains, first quarter net income was $10.3 million, or $.70 per
share, compared to the first quarter record of $10.9 million, or $.74 per share,
reported a year earlier.
Gary Miller, CEO commented on the quarter's results, "This was a good quarter
for operations. Net written and earned premiums were up nicely reflecting the
increases in our reinsurance retention, trucking revenues and premium rates, all
of which we have previously discussed. All products were profitable. Of special
note, losses in our fleet trucking product, which have been troublesome the past
few quarters, were down from those quarters' levels, contributing to
Protective's good results. Sagamore also performed well with continuing
excellent margins in its personal auto product. And it seems that we have
finally seen the bottom in the decline in investment income, with this quarter's
investment income up over the prior year's first quarter and the fourth quarter
of 2004."
Net written premium increased 14% over the first quarter of last year and was
24% above the fourth quarter of 2004. Direct premium written had smaller
increases of 1% and 13%, respectively, showing the effect of the increased
reinsurance retention. Protective's net written premium increased 37 %
year-to-year, while the discontinuance of the small business workers
compensation product caused a 15% reduction in Sagamore's written premium. Net
premium earned, at $46.7 million, was an increase of 21% over last year's first
quarter.
Compared to the immediately previous quarter, pre-tax investment income
increased 5% and was 4% more than the first quarter of last year. Continuing
positive cash flow created more funds to invest and short-term yields have
increased. Portfolio durations have not been changed and remain short.
The consolidated combined ratio of 90.6% produced an underwriting gain of $4.4
million compared to a combined ratio of 92.4% and an underwriting gain of $2.9
million for the first quarter of 2004. The consolidated loss and loss expense
ratio increased marginally from 65.6% in the prior year period to 67.8%. The
consolidated underwriting expense ratio of 22.8% compares to 26.8% for the 2004
first quarter. Each of the Company's products had an underwriting profit for the
quarter.
Shareholders' equity decreased $.4 million from December 31, 2004 due to a $7.1
million drop in unrealized net gains on investments and the payment of $3.7
million in regular and extra dividends to shareholders during the quarter. Book
value per common share outstanding decreased to $22.01 at March 31, 2005 from
$22.04 at year end 2004.
-2-
CONFERENCE CALL INFORMATION:
Baldwin & Lyons, Inc. has scheduled a conference call for April 28, 2005 at
11:00 AM EDT (New York Time) to discuss results for the first quarter ended
March 31, 2005. To gain access to the webcast of this call, please log on to
http://www.viavid.net/detailpage.aspx?sid=000023FC at least 15 minutes prior to
the call to register and to download the necessary audio software. The webcast
will be archived on the site until July 27, 2005.
You may also access the webcast through a link on our investor relations page at
www.baldwinandlyons.com.
To participate via teleconference, investors may dial 800-811-8845 (U.S./Canada)
or 913-981-4905 (International or local) at least five minutes prior to the
beginning of the call. A replay of the call will be available through May 5,
2005 by calling 888-203-1112 or 719-457-0820 and referencing passcode 9547349.
Also available on our investor relations page are complete interim financial
statements, information regarding our business segments, and copies of our
filings with the Securities and Exchange Commission.
-3-
[OBJECT OMITTED]
FINANCIAL HIGHLIGHTS (UNAUDITED)
Baldwin & Lyons, Inc. and Subsidiaries
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended
March 31,
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2005 2004
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Operating revenue $51,803 $43,575
Realized gains 4,936 5,818
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Total revenue $56,739 $49,393
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Income before realized capital
transactions $ 7,138 $ 7,117
Realized net gains on investments,
net of federal income taxes 3,208 3,782
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Net income $10,346 $10,899
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Per share data - diluted:
Average number of shares 14,845 14,815
Income before realized
capital transactions $ .48 $ .48
Realized net gains on investments .22 .26
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Net income $ .70 $ .74
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Dividends paid to shareholders $ .25 $ .50
Annualized return on average
shareholders' equity:
Operating income 10.0% 10.1%
Net income 14.5% 15.5%
Consolidated combined ratio of
insurance subsidiaries (GAAP basis) 90.6% 92.4%
[OBJECT OMITTED]
FORWARD-LOOKING STATEMENTS IN THIS REPORT ARE MADE PURSUANT TO THE SAFE HARBOR
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. INVESTORS
ARE CAUTIONED THAT SUCH FORWARD-LOOKING STATEMENTS INVOLVE INHERENT RISKS AND
UNCERTAINTIES. READERS ARE ENCOURAGED TO REVIEW THE COMPANY'S ANNUAL REPORT FOR
ITS FULL STATEMENT REGARDING FORWARD-LOOKING INFORMATION.