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ALEXANDER & ALEXANDER SERVICES REPORTS THIRD QUARTER LOSS OF $0.15 PER SHARE; RESTATES RESULTS BASED ON REVIEW OF ACG UNIT; MAKES MANAGEMENT CHANGES TO STRENGTHEN ACG ORGANIZATION

 NEW YORK, Nov. 4 /PRNewswire/ -- Alexander & Alexander Services Inc. (NYSE: AAL) today announced a net loss of $4.1 million, or $0.15 per share, on consolidated operating revenues of $321.1 million for the third quarter ended September 30, 1993. The loss primarily reflects an additional $13.5 million increase in reserves for professional indemnity claims. Results also were affected by continued weak insurance prices in North America and reduced fiduciary investment income due to historically low interest rates.
 As a result of its previously announced review of its Alexander Consulting Group (ACG) subsidiary, A&A also said it has concluded that ACG did not provide adequate reserves for unbillable work in progress. Primarily as a result of these inadequate reserves, ACG's revenues were overstated in 1991, 1992 and the first two quarters of 1993. Accordingly, A&A has restated results for those periods.
 "We have scrutinized ACG's operations, strengthened financial controls, and installed new senior management," said T.H. Irvin, A&A's chairman and chief executive officer. In addition, ACG has terminated the employment of three senior ACG executives and two middle managers.
 "ACG's clients were not affected by the problems we discovered. We have taken strong action to address the errors in revenue recognition and to prevent any recurrence," Mr. Irvin reported.
 Last month, Donald L. Seeley, an A&A senior vice president who previously was responsible for financial management and strategic planning, was named president and CEO of ACG's global operation. He succeeded A.M. D'Alessandro, who died October 1. Neil Burger, formerly managing director of ACG's Integrated Information Technologies practice, has been named chairman and CEO of ACG's U.S. subsidiary, Alexander & Alexander Consulting Group.
 Mr. Irvin also stated, "Human resource management consulting remains a growth business. ACG is a solid company with more than 1,800 talented people doing superb work for clients. Don Seeley is one of A&A's best managers, and we have great confidence in his ability to lead ACG."
 "Recent problems should not obscure the fact that A&A has fundamentally sound core businesses with strong underlying earnings power and bright long-term prospects. We are committed to increasing accountability and to improving financial performance," Mr. Irvin reported.
 He added, "We are organizing our global risk management and insurance services business by customer segments. This change will enhance client service while improving our profitability. We continue to make progress in managing the legal contingencies facing the company, including our recently announced understanding with the IRS Appeals Office that should resolve 1980-86 tax issues within A&A's previously established reserves."
 The third quarter 1993 operating loss was $1.3 million compared to operating income of $18.2 million as restated in the 1992 third quarter. Third quarter 1992 operating income was originally reported as $19.1 million.
 For the nine months ended September 30, 1993, consolidated operating revenues were $976.1 million, operating income was $40.2 million and net income was $19.2 million, or $O.37 per share.
 In the 1992 nine-month period ended September 30, 1992, as restated, consolidated operating revenues were $1,003.5 million, operating income was $62.1 million and net income was $44.4 million, or $1.08 per share. As originally reported for the same period, consolidated operating revenues were $1,007.3 million, operating income was $65.9 million and net income was $46.5 million, or $1.14 per share.
 Restated net income for the first and second quarters of 1993 was $11.6 million, or $0.28 per share, and $11.7 million, or $0.24 per share, respectively. Originally reported net income for the same periods was $14.2 million, or $0.34 per share, and $11.9 million, or $0.24 per share, respectively.
 Restated consolidated operating revenues for the first and second quarters of 1993 were $319.0 million and $336.0 million, respectively. Originally reported consolidated operating revenues for the same periods were $322.8 million and $335.6 million, respectively.
 The restated full-year 1992 net loss was $94.1 million, or $2.30 per share. The originally reported net loss was $90.1 million, or $2.20 per share. Restated 1992 consolidated operating revenues were $1,342.8 million. Originally reported 1992 consolidated operating revenues were $1,350.2 million.
 The restated full-year 1991 net loss was $17.9 million, or $0.44 per share. The originally reported net loss was $12.6 million, or $0.31 per share. Restated 1991 consolidated revenues were $1,359.9 million. Originally reported 1991 consolidated operating revenues were $1,369.4 million.
 Separately, the company announced that Ron W. Forrest, previously chairman and CEO of A&A's U.S. risk management and insurance brokerage subsidiary, will retire for personal reasons at year-end after 37 years with A&A and predecessor companies. He has been succeeded by Lawrence E. Burk, formerly managing director, Global Business Development, for A&A. Forrest will continue to serve as a senior vice president of A&A until his retirement.
 A&A Services Inc. is a global organization of professional advisers providing risk management, insurance brokerage and human resource management consulting services from offices in more than 80 countries.
 ALEXANDER & ALEXANDER SERVICES INC.
 Operating Results
 Quarter and Nine Months Ended September 30, 1993 and 1992
 (millions except per share amounts)
 (unaudited)
 Quarter Ended Nine Months Ended
 September 30, September 30,
 1993 1992 1993 1992
 (Restated)(1) (Restated)(1)
 Operating Revenues $321.1 $338.1 $ 976.1 $1,003.5
 Operating Expenses 322.4 319.9 935.9 941.4
 Operating Income (Loss) (1.3) 18.2 40.2 62.1
 Other-Net (6.5) (6.0) (11.5) 17.3 (2)
 Income (Loss) Before
 Income Taxes and
 Minority Interest (7.8) 12.2 28.7 79.4
 Income (Taxes) Benefit 3.5 (5.1) (10.9) (34.1)
 Income (Loss) Before
 Minority Interest (4.3) 7.1 17.8 45.3
 Minority Interest 0.2 1.2 (1.9) (0.9)
 Income (Loss) Before
 Cumulative Effect of
 Accounting Change (4.1) 8.3 15.9 44.4
 Cumulative Effect of
 Accounting Change (3) -- -- 3.3 --
 Net Income (Loss) (4.1) 8.3 19.2 44.4
 Preferred Stock
 Dividend (2.1) -- (4.1) --
 Earnings Available for
 Common & Equivalent
 Shares $ (6.2) $ 8.3 $ 15.1 $ 44.4
 Per Share of Common Stock:
 Income (Loss) Before
 Cumulative Effect of
 Accounting Change $ (.15) $ .20 $ .29 $ 1.08
 Cumulative Effect of
 Accounting Change -- -- .08 --
 Earnings (Loss) Per
 Share $ (.15) $ .20 $ .37 $ 1.08
 Weighted Average
 Shares 41.1 40.9 41.2 40.9 (1) The Company has determined that the Alexander Consulting Group did
 not provide adequate reserves for unbillable work in progress for
 1991, 1992 and the first two quarters of 1993. Accordingly, the
 Company has restated its results of operations for those periods.


(2) The 1992 results include gains of $26.4 million on the sales of two
 non-core businesses.


(3) The Company recognized the cumulative effect of a change in
 accounting principle relating to income tax expenses in accordance
 with the provision of SFAS No. 109 "Accounting for Income Taxes".
 (UNAUDITED)
 Alexander & Alexander Services Inc.
 Operating Results
 Years Ended December 31, 1992 and 1991
 (millions except per share amounts)
 Year Ended Year Ended
 December 31, 1992 December 31, 1991
 Originally Restated(1) Originally Restated(1)
 Reported Reported
 Operating Revenues $1,350.2 $1,342.8 $1,369.4 $1,359.9
 Operating Expenses 1,263.5 1,263.5 1,287.1 1,287.1
 Special Charges (2) -- -- 62.6 62.6
 Operating Income 86.7 79.3 19.7 10.2
 Other-Net 33.9 33.9 (9.8) (9.8)
 Special Charges (2) (16.5) (16.5) (13.0) (13.0)
 Income (Loss) Before
 Income Taxes and
 Minority Interest 104.1 96.7 (3.1) (12.6)
 Income Taxes (47.4) (44.0) (4.9) (.7)
 Income (Loss) Before
 Minority Interest 56.7 52.7 (8.0) (13.3)
 Minority Interest (1.8) (1.8) (2.4) (2.4)
 Income (Loss) from
 Continuing Operations 54.9 50.9 (10.4) (15.7)
 Discontinued
 Operations (2) (145.0) (145.0) - -
 Cumulative Effect of
 Accounting Change (3) - - (2.2) (2.2)
 Net Loss $(90.1) $ (94.1) $ (12.6) $ (17.9)
 Per Share of Common Stock:
 Income (Loss) from
 Continuing Operations $1.34 $ 1.24 $ (0.25) $(0.38)
 Discontinued Operations (3.54) (3.54) - -
 Cumulative Effect of
 Accounting Change (3) - - (0.06) (0.06)
 Loss Per Share $ (2.20) $ (2.30) $ (0.31) $(0.44)
 Weighted Average
 Shares 40.9 40.9 40.8 40.8 (1) The Company has determined that the Alexander Consulting Group did
 not provide adequate reserves for unbillable work-in-progress for
 1991, 1992 and the first two quarters of 1993. Accordingly, the
 Company has restated its results of operations for those periods.


(2) In 1992, the Company recorded a $145.0 million charge relating to
 its discontinued underwriting businesses and a $16.5 million charge
 related to indemnities provided to the purchasers of sold
 operations. The Company recorded a $75.6 million charge in 1991
 associated with the restructuring of its insurance broking
 operations and other non-recurring expenses.


(3) The Company recognized the cumulative effect of a change in
 accounting principle relating to deferred compensation expense in
 accordance with the provision of SFAS No. 106 "Employers Accounting
 for Postretirement Benefits Other than Pensions".


(UNAUDITED)
 Alexander & Alexander Services Inc.
 Operating Results
 Quarters Ended March 31, 1993 and June 30, 1993
 Quarter Ended Quarter Ended
 March 31, 1993 June 30, 1993
 -------------- -------------
 Originally Restated(1) Originally Restated(1)
 Reported Reported
 Operating Revenues $322.8 $319.0 $335.6 $336.0
 Operating Expenses 301.1 301.7 311.2 311.8
 Operating Income 21.7 17.3 24.4 24.2
 Other - Net .3 .3 (5.3) (5.3)
 Income Before
 Income Taxes and
 Minority Interest 22.0 17.6 19.1 18.9
 Income Taxes (9.1) (7.3) (7.1) (7.1)
 Income Before
 Minority Interest 12.9 10.3 12.0 11.8
 Minority Interest (2.0) (2.0) (0.1) (0.1)
 Income Before
 Cumulative Effect of
 Accounting Change 10.9 8.3 11.9 11.7
 Cumulative Effect of
 Accounting Change (2) 3.3 3.3 -- --
 Net Income 14.2 11.6 11.9 11.7
 Preferred Stock
 Dividend -- -- (2.0) (2.0)
 Earnings Available for
 Common & Equivalent
 Shares $ 14.2 $ 11.6 $ 9.9 $ 9.7
 Per Share of Common Stock:
 Income Before
 Cumulative Effect $ 0.26 $ 0.20 $ 0.24 $ 0.24
 Cumulative Effect of
 Accounting Change 0.08 0.08 -- --
 Earnings Per Share $ 0.34 $ 0.28 $ 0.24 $ 0.24
 Weighted Average
 Shares 41.2 41.2 41.2 41.2 (1) The Company has determined that the Alexander Consulting Group did
 not provide adequate reserves for unbillable work in progress for
 1991, 1992 and the first two quarters of 1993. Accordingly, the
 Company has restated its results of operations for those periods.


(2) The Company recognized the cumulative effect of a change in
 accounting principle relating to income tax expenses in accordance
 with the provision of SFAS No. 109 "Accounting for Income Taxes."
 -0- 11/4/93 R
 /CONTACT: Gary Sullivan of Alexander & Alexander, 212-444-4572 (Office) or 203-348-7649 (Home)/
 (AAL)


CO: Alexander & Alexander Services Inc. ST: New York IN: INS SU: ERN

OP -- NY016R -- 0699 11/04/93 11:59 EST
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