BISYS said revenues in its insurance segment increased on the strength of acquisitions, but organic growth in the fiscal third quarter declined less than one percent, pulled down by weakness in the commercial insurance side of the business.
The good news for the company's insurance operations was not matched by BISYS' overall performance, which recorded a 93 percent drop in net income.
The Roseland, N.J.-based investment and insurance solutions firm reported its fiscal third quarter results late last week, saying that its insurance business revenues grew 5 percent in the quarter, or more than $3 million, to $65 million.
For those nine months, revenues grew 4 percent, or $7 million, to $190 million, according to a filing with the Securities and Exchange Commission.
In a statement, BISYS said organic growth was down "0.7 percent, with growth in life insurance more than offset by a decline in commercial insurance."
For the nine months, organic growth grew 1.2 percent. Operating earnings for the quarter were down 11 percent, or $1.7 million, compared to the same period last year. For the three quarters, operating income dropped $7 million, or 15 percent.
BISYS blamed the soft market for the drop in property-casualty insurance sales, but credited internal sales activity for growth on the life side.
BISYS is a wholesale broker of life and property-casualty, long-term care, disability and annuity products.
BISYS Group Inc. is set to be acquired by Citi Financial Services. The insurance services portion will be acquired by J.C. Flowers, the private equity firm that owns Dallas-based wholesaler Crump, at the time of the Citi acquisition.
When completed, the transaction is expected to double the size of Crump on the property-casualty side of the business to about 1,000 employees. As a whole, the ranks of Crump will swell from 460 employees to 2,700 after the deal is complete.
As a whole, revenues at BISYS increased 9 percent, or $20 million, to $232 million for the quarter. Net income dropped 93 percent, or $219 million, to $17 million. Earnings per share in the quarter dropped from $1.98 to 14 cents a share.
For the nine months, revenue increased 6 percent, or $40 million, to $664 million. Net income declined 83 percent, or $227 million, to $45 million. Earnings per share stood at 38 cents, down from $2.29 last year.
The drop in income was primarily due to the loss in income of BISYS' Information Services segment in March of last year.
In its government filing, BISYS said that under certain circumstances, if the arrangement with Citi falls through, it could be subject to paying Citi a termination fee of $36 million and an additional $3 million in expenses. BISYS did not detail what those circumstances could be.
The deal is expected to be completed later this year.
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