Hub International Limited: Financial Results For The Quarter And Year Ended December 31, 2001

 

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 Add Title:  Hub International Limited: Financial Results For The Quarter And Year Ended December 31, 2001
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 Location:  Chicago and Toronto
 Date:    2002-03-21  
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The consolidated financial statements of Hub International Limited (TSE:HBG) historically have been expressed in Canadian dollars. Effective September 30, 2001, the company adopted the United States of America (U.S.) dollar as its reporting currency. Comparative financial information has been restated in U.S. dollars using the translation of convenience method. As at September 30, 2001, all historical financial statements were converted from Canadian to U.S. dollars at the exchange rate in effect at September 30, 2001 of 1.578 Canadian dollars to one U.S. dollar. Revenue and expenses subsequent to September 30, 2001 were translated to U.S. dollars at the average exchange rate for the period.

Total revenue for the quarter ended December 31, 2001 increased by $28.5 million or 116% to $53.0 million compared to $24.5 million for the quarter ended December 31, 2000. Of this increase, $26.1 million or 92% was attributable to acquisitions and reflects the inclusion of the results of each brokerage we acquired during the last twelve months. Excluding the effects of acquisitions, total revenue increased $2.4 million or 10%. This increase was mainly attributable to growth in commission income due, in part, to premium increases. Net earnings for the quarter ended December 31, 2001 increased by $2.4 million or 400% to $3.0 million compared to $0.6 million in 2000 as a result of the acquisitions and organic growth noted above. Basic earnings per share for the quarter ended December 31, 2001 increased by $0.12 or 400% to $0.15 per share compared to $0.03 per share for the quarter in 2000. Diluted earnings per share for the quarter ended December 31, 2001 increased by $0.11 or 367% to $0.14 per share compared to $0.03 per share for the quarter in 2000.

Total revenue for the year ended December 31, 2001 increased by $58.8 million or 62% to $154.0 million compared to $95.2 million for the year ended December 31, 2000. Of this increase, $55.6 million or 95% was attributable to acquisitions and reflects the inclusion of the results of each brokerage we acquired during the last twelve months, from the respective date of each acquisition. Excluding the effects of acquisitions, total revenue increased $3.2 million or 3%. This increase was mainly attributable to growth in commission income due, in part, to premium increases. Net earnings for the year ended December 31, 2001 increased by $3.9 million or 64% to $10.0 million compared to $6.1 million in 2000 as a result of acquisitions and organic growth noted above. Basic earnings per share for the year ended December 31, 2001 increased by $0.19 or 56% to $0.53 per share for 2001 compared to $0.34 per share for 2000. Diluted earnings per share for the year ended December 31, 2001 increased by $0.16 or 47% to $0.50 or per share for 2001 compared to $0.34 per share for 2000.

Hub International is a leading North American insurance brokerage providing a broad array of property and casualty, life and health, employee benefits, investment and risk management products and services.

                       HUB INTERNATIONAL LIMITED
                    COMPARATIVE FINANCIAL ANALYSIS
         (In Thousands of U.S. Dollars, except per share data)

                        THREE MONTHS ENDED           YEAR ENDED
                     12/31/2001   12/31/2000   12/31/2001   12/31/2000
                     -----------------------   -----------------------
                           (Unaudited)               (Unaudited)

Revenue
  Commissions income    $51,056      $23,211     $142,851      $86,410
  Contingent commissions
   and volume overrides     437          165        5,946        4,909
  Other                   1,461        1,075        5,196        3,921
                     -----------------------   -----------------------
                         52,954       24,451      153,993       95,240
                     -----------------------   -----------------------

Expenses
  Remuneration           30,140       15,933       88,015       54,701
  Selling                 2,729        1,285        8,359        4,840
  Occupancy               3,108        1,559        9,061        5,756
  Depreciation            1,552          263        3,940        1,885
  Administration          6,784        2,957       17,856       11,182
                     -----------------------   -----------------------
                         44,313       21,997      127,231       78,364
                     -----------------------   -----------------------

Net earnings before
 the following            8,641        2,454       26,762       16,876
Interest expense          2,868          450        7,447        1,981
Goodwill and other
 intangible asset
 amortization             1,839          906        4,940        3,260
(Gain) loss on disposal of
 capital assets and
 investments                112           49         (173)         127
Other income - put option
 Liability                 (719)           -         (719)           -
                     -----------------------   -----------------------
Net earnings before
 income taxes             4,541        1,049       15,267       11,508
                     -----------------------   -----------------------

Provision for income tax
 expense (benefit)
  Current                  (400)         452        4,967        4,907
  Future                  1,990           38          295          463
                     -----------------------   -----------------------
                          1,590          490        5,262        5,370
                     -----------------------   -----------------------
Net earnings             $2,951         $559      $10,005       $6,138
                     -----------------------   -----------------------
                     -----------------------   -----------------------

Earnings per share
  Basic                   $0.15        $0.03        $0.53        $0.34
  Diluted                 $0.14        $0.03        $0.50        $0.34
Weighted average shares
 outstanding - Basic
 (000's)                 19,493       18,528       19,013       18,327
Weighted average shares
 outstanding - Diluted
 (000's)                 21,616       18,528       20,105       18,327



                       HUB INTERNATIONAL LIMITED
                      CONSOLIDATED BALANCE SHEET
                    (In Thousands of U.S. Dollars)
                                                   (Unaudited)
                                                   DECEMBER 31,
                                              2001              2000
                                          --------          --------
Assets
Current assets:
Cash and cash equivalents                 $ 26,979          $ 19,919
Trust cash                                  50,426            12,356
Accounts and other receivables             101,313            41,975
Investment held for sale                    40,772                 -
Income taxes receivable                      1,460             2,382
Future income taxes                          1,999                 -
Prepaid expenses                             2,471               872
                                          --------          --------
Total current assets                       225,420            77,504

Capital assets                              20,935             7,208
Other intangible assets                     25,331                 -
Goodwill                                   220,848           117,744
Future income taxes                          2,671               368
Other assets                                 7,091             3,333
                                          --------          --------
Total assets                              $502,296          $206,157
                                          --------          --------
                                          --------          --------

Liabilities
Current liabilities:
Bank debt                                 $ 55,000          $      -
Accounts payable and accrued liabilities   164,094            57,601
Income taxes payable                             -               927
Future income taxes                          1,387                 -
Current portion long-term debt and
 capital leases                              4,169             2,167
                                          --------          --------
Total current liabilities                  224,650            60,695

Long-term debt and capital leases           76,159            32,498
Subordinated convertible debentures         61,624                 -
Future income taxes                          4,592               752
                                          --------          --------
Total liabilities                          367,025            93,945
                                          --------          --------

Commitments and Contingencies

Shareholders' equity
Share capital                              125,506           111,430
Cumulative translation account               2,770               195
Retained earnings                            6,995               587
                                          --------          --------
Total shareholders' equity                 135,271           112,212
                                          --------          --------
Total liabilities and
 shareholders' equity                     $502,296          $206,157
                                          --------          --------
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CONTACT:
Hub International Limited
W. Kirk James 312/279-4881
kjames@hubinternational.com
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 SOURCE :   Hub International Limited