FIRST AMERICAN PRESENTS NEW GROWTH STRATEGY
June 21, 1999, SANTA ANA, Calif.
- Maintaining its position as the leading provider of real estate related information products and services
- Becoming the single source provider for all information relating to any real estate transaction
- Broadening product offerings and diversifying its revenue base
- Leveraging its infrastructure and technology
- Pursuing strategic acquisitions with a focus on non-real estate information products and services
The company also announced changes in its financial reporting and business segments, which will now include:
- Title Insurance -- $2.1 billion in 1998 operating revenues and $204.0 million in pretax profits
- Real Estate Information and Services -- $598.8 million in 1998 operating revenues and $101.0 million in pretax profits
- Consumer Information and Services -- $140.1 million in 1998 operating revenues and $26.3 million in pretax profits
"Historically, First American has been perceived as solely a title insurer," stated Parker S. Kennedy. "Currently, our stock trades at a price/earnings multiple of 5. We expect the restructuring of these business segments to help investors recognize that First American's value should be comparable to that of other information services companies, which typically command PEs of 21 or higher. Although interest rate sensitive, title insurance is a great business that continues to generate ample cash to fund our strategic growth. Technology, especially the Internet, is improving profit margins in our title insurance business and providing abundant opportunities to increase market share in our real estate and consumer information and services segments. We will continue to acquire title operations as well as higher-margin, database businesses in the consumer information and services segment to provide noncyclical, high-margin revenue for the company."
The First American Financial Corporation, based in Santa Ana, Calif., is the nation's leading provider of business information and related products and services. The corporation's subsidiaries include First American Title Insurance Company, a national and international title insurer; First American Real Estate Information Services, Inc., which offers tax monitoring, mortgage credit reporting, property data services, flood certification, field inspection services, appraisal services, loss mitigation services, mortgage loan origination and servicing systems, and mortgage document preparation nationally; First American Home Buyers Protection Corporation, a home warranty company; First American Capital Management, an investment advisory firm; and First American Trust Company and First Security Thrift Company in Southern California. The company also offers automotive, subprime and direct-to-consumer credit reporting, insurance tracking services, multifamily resident screening, pre-employment screening, automotive tracking and forced place flood and hazard insurance through its Consumer Information and Services segment. First American Financial has nearly 20,000 employees in more than 600 branch offices in the United States and abroad. Information about the company and an archive of its press releases can be found on the company's web site under investor information at http://www.firstam.com.