Alexander & Alexander Services Inc. yesterday reported much-improved earnings for 1995, the result of a substantial restructuring the consulting and insurance brokerage firm undertook two years ago.
The New York-based company in 1995 generated net income of $89.4 million, or $1.44 per share, reversing a loss of $138.7 million, or $3.51 per share, the year before.
Although its headquarters is in Manhattan, the company employs almost 500 at its administrative office in Owings Mills. It has more than 250 workers at a sales office in Baltimore as well.
The 1995 earnings included a fourth-quarter pre-tax charge of $17.6 million, resulting primarily from its October acquisition of Jardine Insurance Brokers Inc., the U.S. retail arm of JIB Group PLC of London, as well as a $28.7 million pre-tax gain from the sale of a subsidiary. In 1994, Alexander & Alexander took a $167.6 million charge for restructuring.
Revenues for 1995 were $1.3 billion, down 3.1 precent from the prior year. Excluding sold operations and sales from acquired assets, revenue rose 4.4 percent, or $53 million. Operating expenses for the year fell 17.5 percent to $1.16 billion.
"As a result of our successful restructuring, all operations contributed to A&A;'s significant increase in income," said Frank G. Zarb, chairman and chief executive, in a prepared statement.
In the fourth quarter ended Dec. 31, the company generated net income of $7.5 million, or 2 cents per share, vs. a net loss of $111.3 million, or $2.66 per share, in the year-ago period.
Revenues in the quarter were $330.4 million, essentially flat from a year ago. Quarterly operating expenses decreased by 28 percent, to $316.2 million.
"In 1996, highly competitive business conditions will continue to constrain revenue growth," Mr. Zarb said.
"To meet our long-term business objectives, we are making significant investments in information technology, product development and employee training. These initiatives will put added short-term pressure on earnings, but the financial benefits should become increasingly evident in 1997 and beyond," he said.