Hilb, Rogal and Hamilton Company today reported financial results for the second quarter and six months ended June 30, 2000. Total revenues for the quarter increased 13.4%, to $62.2 million, from $54.9 million a year ago.
Results include American Phoenix Corporation from its acquisition on May 3, 1999. Commissions and fees, in total, rose 13.0% and, net of acquisitions and divestitures, rose 5.1%. Excluding gains in both periods and an integration charge relating to the American Phoenix acquisition in the second quarter of 1999, net income rose 14.3% to $4.8 million from $4.2 million.
Earnings per share on the same basis was $0.34, compared with $0.31, reflecting a 5.7% increase in the number of diluted shares outstanding. Including gains on divestitures and the above charge, net income was $4.9 million, or $0.35 per share, compared with $3.0 million, or $0.23 per share. Results for the quarter reflected a combination of new business production, slight firming in middle-market premium levels and the integration of the American Phoenix acquisition. In addition, HRH’s company-wide focus on sales productivity and cost management, known as the “Best Practices” program, has begun to deliver the intended benefits, which are expected to build over the next few quarters.
For the first six months of 2000, revenues were $129.2 million, an increase of 22.9% from $105.1 million a year ago. Commissions and fees, excluding acquisitions and divestitures, grew 4.2%. Excluding gains and the integration charge, net income was $11.2 million, or $0.79 per share, up from $9.4 million, or $0.73 per share a year ago.
There were 12.3% more diluted shares outstanding in the current six month period. Net income, including the gains and acquisition charge, was $11.7 million, or $0.83 per share, compared to $10.5 million, or $0.81 per share last year. Operating cash flow (net income plus depreciation and amortization) was $1.40 per share, exceeding net income by 68.7%.
Six announced acquisitions and a new distribution alliance were highlights in the quarter. Granite Insurance Services, LLC, an agency in Portland, Oregon and BASE International, Inc., a Pittsburgh-based provider of risk management investigative and security services, were the two largest acquisitions. In addition, HRH added four fold-in acquisitions in Southern New Jersey, Southern California, Dallas and Orlando. The alliance with PNC Financial Services Group enables HRH to offer insurance to PNC’s business customers.
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