Canadian Underwriter

Lindsey Morden loss widens on U.S. results

February 14, 2003   by Canadian Underwriter

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2002 saw deteriorating results for international adjuster Lindsey Morden (TSX: LM), largely as a result of its troubled U.S. operations. While revenue increased by $19 million between 2001 and 2002, the company suffered a net loss last year of $17.5 million, or $1.28 per share. This compares with a net loss of $5.8 million. or $0.41 per share, the year prior.
Total revenue was $458 million in 2002, versus $439 million the year prior. Operating costs sat at $440 million last year, against $426 million in 2001.
But the company paid out $20 million in “other expenses” which includes a $5.8 million restructuring charge on U.S. operations and $14.2 million in legal settlements. This includes the settlement of a suit by Eastgate Group Ltd. dating back to 2000 and reported in first-quarter 2002 results.
The Canadian operation, Cunningham Lindsey, did see operating earnings grow to $4.12 million last year, versus $2.70 million in 2001. But U.S. operations were hard hit with an operating loss of $3.34 million, compared to earnings of $888,000 the year prior. The U.K., European and International divisions all saw operating earnings grow year-on-year, with the company’s total operating earnings at $18.03 million last year, versus $12.69 million in 2001. Free cash flow from operations at the end of 2002 was $17.4 million, or $1.27 per share, against $20.6 million, or $1.44 per share, the year prior.

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