USI Sees Growth; Adds J.C. Penney
By Mark E. Ruquet
NU Online News Service, Oct. 31, 1:40 p.m. EST?Briarcliff Manor, N.Y.-based USI Holdings Corporation's president said the firm is not seeing the benefits of economic improvement and that its primary revenue growth was attributable to acquisitions. He added that the company is expected to see benefits from the hiring of 30 new producers and the signing of J.C. Penney as a new client.
USI reported net income for the third quarter, ending Sept. 30, 2003, dropped $6.4 million, or 21 cents a share, going from $11.4 million, or 32 cents a share, in 2002, to $5 million, or 11 cents a share. Revenues were up, however, by 9 percent, or $7.5 million, going from $79.5 million in the third quarter of 2002 to $87 million in 2003.
USI said that excluding a $7.7 million gain related to its initial public offering in 2002, and a $4 million non-cash expense from the early retirement of debt recorded in the third quarter of 2003, net income from continuing operations for the quarter would have increased $4.2 million.
For the nine months, net income is up $30.9 million, or $40.59 a share, going from a loss in 2002 of $13.4 million, or $40.21 per share, to $17.5 million, or 38 cents a share. Revenues have grown 8 percent, or $18.8 million, going from $237 million to $255.8 million.
David L. Eslick, chairman, president and chief executive officer of USI, said in a statement that the firm's revenues "have not benefited from the improvements in the economic and employment environment widely reported in the press."
During an investor's conference call, Mr. Eslick said that, generally, the firm was pleased with USI's performance.
A USI executive said during the conference call that the firm has not seen an up-tick in its benefit area because clients are not increasing their staffing.
Mr. Eslick said that USI is on track to acquire additional firms worth $25 million in annualized revenue by the end of 2003, and that the firm might "exceed" this target.
The hiring of 30 new producers, he said, would contribute $6-to-$7 million in revenue to the firm in the future.
Mr. Eslick also announced it has enrolled J.C. Penney in its benefits program. The enrollment involves 100,000 individuals and means "double-digit" growth in the benefits area for the firm.
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