HRH Says Its Disappointed With Results

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By Mark E. Ruquet

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NU Online News Service, Oct. 22, 9:32 a.m.EDT?Hilb, Rogal & Hobbs Company said it was disappointed in itsthird quarter performance, but feels it will see growth from itsnew sales strategy to be introduced soon.

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The Richmond, Va. ? based firm reported net income for the thirdquarter ending Sept. 30, increased $1.14 million or 7 percent from$17.3 million in 2002 to $18.4 million in 2003. Earnings per sharedropped three cents from 53 cents to 50 cents a share. Revenues inthe quarter rose 8.5 percent, or $11 million, going from $128.5million to $139.4 million.

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Earlier this month, HRH revised its revenue guidance andearnings per share for 2003. It said organic growth would fall inthe 5 to 7 percent range instead of 9 to 11 percent it hadpreviously stated.

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"We were surprised and disappointed by the third quarterresults," said Martin L. "Mell" Vaughan III, chairman and chiefexecutive officer in a statement.

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He blamed the firm's performance on "industry trends, includinglower than expected premium increases, particularly in complexproperty insurance, program redesigns induces by client economicpressures, and legislative uncertainties in executive benefits." Headded that there was an "unexpected productivity lull" at one ofits acquired firms, Hobbs, which contributed to the results.

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He said the firm remains committed to sustaining 15 to 20percent growth in annual operating earnings per share.

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For the nine months, net income rose 14 percent, or $6.67million, from $48.9 million to $55.55 million. Net income per shareremained unchanged at $1.53. Revenues rose 30 percent, or $96.84million, going from $324.1 million to $420.9 million.

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Robert B. Lockhart, HRH's president and chief operating officersaid the firm's new sales strategy is being introduced throughoutthe company and the firm is "excited about the future growthbenefits of this proven sales process."

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