http://www.businesswire.com/news/home/20091106005931/en
PASADENA, Calif.--(Business Wire)--
Unaudited consolidated net income of Wesco Financial Corporation (NYSE AMEX:WSC)
and its subsidiaries for the third quarter of 2009 amounted to $9,882,000
compared to $16,164,000 for the third quarter of 2008. Unaudited consolidated
net income for the first nine months of 2009 was $42,771,000 compared to
$58,454,000 for the first nine months of 2008.
Wesco`s operating results have been significantly impacted by declining economic
activity and the turmoil affecting the liquidity of the banking system, which
became evident in the latter half of 2008. More specifically, the decreases in
Wesco`s consolidated earnings for the 2009 periods were attributable mainly to
(1) weaknesses in CORT`s furniture rental and Precision Steel`s businesses due
significantly to the recessionary economic environment, and (2) decreased
investment income resulting not only from an ongoing decline in interest rates
on short-term investments, but also from a reduction in dividends received. The
negative impact on Wesco`s earnings resulting from the foregoing factors has
beenpartially offset by improved underwriting results of Wesco`s insurance
businesses.
Following is a breakdown of consolidated net income into useful business
components. All figures are on an after-tax basis and are in thousands except
for per-share amounts, which are based on 7,119,807 shares outstanding.
Quarter Ended September 30, Nine Months Ended September 30,
2009 2008 2009 2008
Wesco-Financial and Kansas Bankers
insurance businesses --
Underwriting gain (loss) $ (2,035 ) $ (6,220 ) $ 1,074 $ (4,145 )
Investment income 12,284 16,712 42,322 46,585
CORT furniture rental business 18 5,083 592 14,735
Precision Steel businesses (186 ) 521 (859 ) 1,416
Other (199 ) 68 (358 ) (137 )
Consolidated net income $ 9,882 $ 16,164 $ 42,771 $ 58,454
Per share $ 1.39 $ 2.27 $ 6.01 $ 8.21
As a result of KBS`s decision late in 2008 to exit the bank deposit guarantee
bond line of insurance as rapidly as feasible, outstanding deposit guarantee
bonds have been reduced from an aggregate of $9.7 billion, insuring deposits in
1,671 institutions as of September 30, 2008, to $80 million, insuring deposits
in 27 separate institutions as of October 31, 2009. By yearend 2009, outstanding
deposit guarantee bonds are expected to approximate $50 million or less,
insuring 21 or fewer institutions.
Wesco`s Form 10-Q for the quarter ended September 30, 2009 is expected to be
filed electronically with the Securities and Exchange Commission today, and we
invite shareholders, the financial media and others to access it through the
SEC`s website (www.sec.gov). The Form 10-Q will contain unaudited condensed
consolidated financial statements, management`s discussion and analysis of
financial condition and results of operations, and other information.
Certain statements contained in this press release, including the projected
amount of KBS`s deposit guarantee bonds, are "forward looking" statements within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements are not guaranties of future performance and actual results may
differ materially from those forecasted.
Wesco Financial Corporation
Jeffrey L. Jacobson, 626-585-6700
Copyright Business Wire 2009
