San Francisco-based U.S.I. Holdings Corporation reported record financial results for the first quarter ended March 31, 2003.
Net income from continuing operations for the quarter increased $18.8 million to $4.9 million from a loss of $13.9 million recorded during the same period in 2002. Results for the period were positively affected by (i) reduction in compensation and other operating expenses principally due to the integration efforts and other charges in the first quarter of 2002, (ii) improvement in performance in the operations, and (iii) the reduction in interest expense principally due to debt reduction from $241.2 million to $140.4 million, down 41.8 percent from a year ago.
Revenues for the quarter increased $5.3 million, or 6.8 percent, to $82.6 million from $77.3 million recorded during the same period in 2002. Excluding the impact of an acquired business, revenues for the quarter increased 6.6 percent.
Beginning in 2001, USI implemented a plan for improving operational efficiencies.
The ongoing execution of these strategies improved EBITDA margin (EBITDA as a percentage of revenues) for the quarter to 19.8 percent compared to 1.5 percent recorded during the same period in 2002. USI defines EBITDA as revenues less compensation and employee benefits and other operating expenses. In the first quarter of 2002, EBITDA margin was negatively impacted by expenses principally related to integration efforts and other charges of $9.7 million. In the first quarter of 2003, there were no expenses incurred related to integration efforts or other charges.
During the first quarter of 2003, USI acquired the Guild Agency of Jericho, N.Y. The Guild Agency specializes in providing insurance services to the not-for-profit industry sector and generated approximately $2.4 million in revenues in the 2002 calendar year. The acquisition was effective on Feb. 28, 2003.
“When USI went public, we stated that we had three key performance objectives – consistent organic revenue growth, margin expansion, and disciplined acquisition growth,” said David Eslick, chairman, president and CEO. Eslick added, “We have a focused plan for execution and our first quarter results are solid evidence on our ability to deliver. We are committed to this balanced focus on growth and the expected results from the execution of our plan.”
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