Lindsey Morden feels weight of U.S. losses

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 a share – this compares with a net loss of $5.8 million or $0.41 a share for the year prior.

The company’s total revenue for 2002 amounted to $458 million compared with $439 million made for 2001. Operating costs rose to $440 million for 2002 against the $426 million disclosed for the year before. The company also paid out $20 million in “other expenses”, including $5.8 million in restructuring charges relating to its U.S. operations, as well as $14.2 million in “legal settlements”. This includes the settlement of a suit by Eastgate Group Ltd. dating back to 2000 and reported in the 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. However, the company’s U.S. operations were hard hit with an operating loss of $3.34 million compared with earnings of $888,000 reported for 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.