Hub Net Down After Talbot Purchase

Hub International Limited reported that, despite a 37 percent increase in second-quarter revenues, net income dropped 63 percent after a charge for last year's acquisition of Talbot brokerage in Albuquerque, N.M.

Chicago-based Hub said for the first six months of 2005 it paid $15.9 million in noncash-based compensation for Talbot, based on a total estimated cost of about $53 million. Hub expects the total cost of the deal in 2005 to be $27.8 million, decreasing to $9.3 million in 2006 and $1.7 million in 2007.

In the second quarter of 2005, Hub recorded net income of $4.3 million, or 12 cents a share, compared to $11.6 million, or 35 cents a share, for the same period of 2004, a drop of $7.3 million. Revenues increased more than $30 million, going from $82 million to $113 million.

For the first half of the year, net income decreased less than 2 percent, or $465,000, going from more than $21 million, or 64 cents a share, in 2004, to $20.7 million, or 59 cents a share this year. Revenues increased 8 percent, or $73 million, going from $162 million to more than $234 million.

Martin Hughes, chairman and chief executive officer for Hub, said the company is seeking to reduce costs and increase margins, and some divisions of the Chicago-based firm have achieved the company's goals. He said those that have not were instructed that they have until Aug. 31 to reduce ongoing cost levels.

"I'm increasingly confident about the opportunities for Hub," said Mr. Hughes. "I believe the external and internal developments are shifting into a more positive phase."

Hub also announced it would pay a quarterly dividend of 6 cents a share on outstanding common stock, payable Sept. 30 to shareholders of record as of Sept. 15.