SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 2002 Commission file number 0-15981
HILB, ROGAL AND HAMILTON COMPANY
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Virginia 54-1194795
- ----------------------------- ---------------------------
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
4951 Lake Brook Drive, Suite 500, Glen Allen, VA 23060
- -------------------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (804) 747-6500
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------- ------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at May 1, 2002
- ----------------------------- ---------------------------
Common stock, no par value 28,552,883
HILB, ROGAL AND HAMILTON COMPANY
INDEX
-----
Part I. FINANCIAL INFORMATION Page
----
Item 1. Financial Statements
Statement of Consolidated Income
for the three months ended
March 31, 2002 and 2001 3
Consolidated Balance Sheet
March 31, 2002 and December 31,
2001 4
Statement of Consolidated Shareholders'
Equity for the three months ended
March 31, 2002 and 2001 5
Statement of Consolidated Cash Flows
for the three months ended March 31,
2002 and 2001 6
Notes to Consolidated Financial
Statements 7-11
Item 2. Management's Discussion and Analysis
of Financial Condition and
Results of Operations 12-14
Item 3. Qualitative and Quantitative Disclosures
About Market Risk 14
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security
Holders 15
Item 6. Exhibits and Reports on Form 8-K 15
2
PART I -- FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
STATEMENT OF CONSOLIDATED INCOME
HILB, ROGAL AND HAMILTON COMPANY AND SUBSIDIARIES
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31, 2002 MARCH 31, 2001
-------------- ---------------
Revenues
Commissions and fees $98,648,085 $77,002,907
Investment income 513,848 627,783
Other 691,863 281,037
----------- -----------
99,853,796 77,911,727
Operating expenses
Compensation and employee benefits 53,259,020 42,769,221
Other operating expenses 18,549,156 15,861,071
Amortization of intangibles 521,618 3,324,503
Interest expense 1,883,374 2,306,009
----------- -----------
74,213,168 64,260,804
----------- -----------
INCOME BEFORE INCOME TAXES
AND CUMULATIVE EFFECT OF
ACCOUNTING CHANGE 25,640,628 13,650,923
Income taxes 10,457,391 5,869,897
----------- -----------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE 15,183,237 7,781,026
Cumulative effect of accounting change, net of tax 3,944,484 -
----------- -----------
NET INCOME $19,127,721 $ 7,781,026
=========== ===========
Net Income Per Share - Basic:
Income before cumulative effect of
accounting change $0.54 $0.29
Cumulative effect of accounting change,
net of tax 0.14 -
----- -----
Net income $0.68 $0.29
===== =====
Net Income Per Share - Assuming Dilution:
Income before cumulative effect of
accounting change $0.48 $0.27
Cumulative effect of accounting change,
net of tax 0.12 -
----- -----
Net income $0.60 $0.27
===== =====
See notes to consolidated financial statements.
3
CONSOLIDATED BALANCE SHEET
HILB, ROGAL AND HAMILTON COMPANY AND SUBSIDIARIES
MARCH 31, DECEMBER 31,
2002 2001
---- ----
(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 56,143,796 $ 51,580,095
Investments 2,887,117 3,499,421
Receivables:
Premiums and commissions, less allowance for doubtful
accounts of $3,460,995 and $3,374,285, respectively 93,292,016 116,219,367
Other 22,174,194 17,672,780
------------ ------------
115,466,210 133,892,147
Prepaid expenses and other current assets 6,946,695 8,435,944
------------ ------------
TOTAL CURRENT ASSETS 181,443,818 197,407,607
INVESTMENTS 1,343,080 1,335,798
PROPERTY AND EQUIPMENT, NET 18,546,207 19,484,705
GOODWILL 293,177,957 286,554,839
OTHER INTANGIBLE ASSETS 33,741,884 33,516,884
Less accumulated amortization 54,343,026 53,821,407
------------ ------------
272,576,815 266,250,316
OTHER ASSETS 10,046,576 9,764,122
------------ ------------
$483,956,496 $494,242,548
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Premiums payable to insurance companies $142,866,676 $169,501,575
Accounts payable 7,865,284 7,303,804
Accrued expenses 18,634,000 20,302,435
Premium deposits and credits due customers 27,020,959 20,940,410
Current portion of long-term debt 6,166,779 6,996,423
------------ ------------
TOTAL CURRENT LIABILITIES 202,553,698 225,044,647
LONG-TERM DEBT 108,260,236 114,443,224
OTHER LONG-TERM LIABILITIES 12,156,835 11,953,338
SHAREHOLDERS' EQUITY
Common Stock, no par value; authorized 50,000,000
shares; outstanding 28,498,647 and 28,310,568 shares,
respectively 56,857,748 55,542,485
Retained earnings 105,238,634 88,604,274
Accumulated other comprehensive income (loss):
Unrealized loss on derivative contracts, net of
deferred tax benefit of $750,000 and $955,000, respectively (1,125,359) (1,433,296)
Other 14,704 87,876
------------ ------------
160,985,727 142,801,339
------------ ------------
$483,956,496 $494,242,548
============ ============
See notes to consolidated financial statements.
4
STATEMENT OF CONSOLIDATED SHAREHOLDERS' EQUITY
HILB, ROGAL AND HAMILTON COMPANY AND SUBSIDIARIES
(UNAUDITED)
ACCUMULATED
OTHER
COMMON RETAINED COMPREHENSIVE
STOCK EARNINGS EARNINGS(LOSS)
----- -------- --------------
Balance at January 1, 2002 $55,542,485 $ 88,604,274 $(1,345,420)
Issuance of 188,079 shares of
Common Stock 1,315,263
Payment of dividends ($.0875 per share) (2,493,361)
Net income 19,127,721
Derivative gain arising during first quarter
2002, net of tax 307,937
Other (73,172)
----------- ------------ -----------
Balance at March 31, 2002 $56,857,748 $105,238,634 $(1,110,655)
=========== ============ ===========
Balance at January 1, 2001 $22,361,312 $ 65,860,654 $ -
Issuance of 390,342 shares of
Common Stock 5,790,806
Payment of dividends ($.085 per share) (2,288,791)
Net income 7,781,026
Cumulative effect of accounting change
related to derivatives, net of tax (516,600)
Derivative loss arising during first quarter
2001, net of tax (503,349)
----------- ------------ -----------
Balance at March 31, 2001 $28,152,118 $ 71,352,889 $(1,019,949)
=========== ============= ===========
See notes to consolidated financial statements.
5
STATEMENT OF CONSOLIDATED CASH FLOWS
HILB, ROGAL AND HAMILTON COMPANY AND SUBSIDIARIES
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31, 2002 MARCH 31, 2001
-------------- ---------------
OPERATING ACTIVITIES
Net income $ 19,127,721 $ 7,781,026
Adjustments to reconcile net income to net cash
provided by operating activities:
Cumulative effect of accounting change, net of tax (3,944,484) -
Depreciation and amortization 1,710,600 1,481,825
Amortization of intangible assets 521,618 3,324,503
------------ ------------
Net income plus amortization, depreciation and
cumulative effect of accounting change, net of tax 17,415,455 12,587,354
Provision for losses on accounts receivable 233,052 194,149
Provision for deferred income taxes 956,827 -
Gain on sale of assets 3,446 (38,591)
Changes in operating assets and liabilities
net of effects from insurance agency
acquisitions and dispositions:
Decrease in accounts receivable 24,821,500 16,367,519
Decrease in prepaid expenses 1,260,841 957,392
Decrease in premiums payable to
insurance companies (28,450,659) (7,062,917)
Increase in premium deposits and credits due
customers 6,069,549 4,645,154
Increase (decrease) in accounts payable 507,309 (710,005)
Decrease in accrued expenses (1,680,067) (3,025,476)
Other operating activities (3,193,169) 1,369,952
------------ ------------
NET CASH PROVIDED BY OPERATING
ACTIVITIES 17,944,084 25,284,531
INVESTING ACTIVITIES
Purchase of held-to-maturity investments (607,287) (745,153)
Proceeds from maturities of held-to-maturity
investments 1,212,309 -
Purchase of property and equipment (964,880) (960,305)
Purchase of insurance agencies, net of cash acquired (3,826,892) (17,512,291)
Proceeds from sale of assets 369,394 18,647
Other investing activities 57,141 191,112
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (3,760,215) (19,007,990)
FINANCING ACTIVITIES
Proceeds from long-term debt - 25,000,000
Principal payments on long-term debt (7,499,625) (7,999,266)
Proceeds from issuance of Common Stock 372,818 1,052,405
Dividends (2,493,361) (2,288,791)
------------ ------------
NET CASH (USED IN) PROVIDED BY
FINANCING ACTIVITIES (9,620,168) 15,764,348
INCREASE IN CASH AND CASH EQUIVALENTS 4,563,701 22,040,889
Cash and cash equivalents at beginning of period 51,580,095 28,880,784
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $ 56,143,796 $ 50,921,673
============ ============
See notes to consolidated financial statements.
6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HILB, ROGAL AND HAMILTON COMPANY AND SUBSIDIARIES
March 31, 2002
(UNAUDITED)
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Hilb, Rogal and
Hamilton Company (the Company) have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three month period ended March 31, 2002, are not necessarily indicative of the
results that may be expected for the year ending December 31, 2002. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's Form 10-K for the year ended December 31,
2001.
Certain amounts for the prior period have been reclassified to conform to
current year presentation.
NOTE B--CHANGES IN ACCOUNTING METHOD
Effective January 1, 2002, the Company changed its method of accounting for
commissions on premiums billed and collected directly by insurance carriers on
its middle-market property and casualty business. Prior to 2002, this revenue
was recognized when received. Beginning January 1, 2002, this revenue is
recorded on the later of the billing date or the effective date, consistent with
the revenue recognition policy for agency billed business. This is the
predominant practice followed in the industry. Management believes that this new
methodology is preferable and that it better matches the income with the related
expenses. For the three months ended March 31, 2002, the effect of this change
was to increase net income by $4.6 million ($0.14 per share), which included the
cumulative effect adjustment of $3.9 million ($0.12 per share), net of income
taxes of $2.6 million. No prior period proforma amounts have been presented to
reflect the effect of retroactive application of the change as it is not
practical for the Company to compute prior period proforma amounts due to the
lack of prior period data.
NOTE C--INTANGIBLE ASSETS
In June 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141, "Business Combinations" (Statement 141),
and No. 142, "Goodwill and Other Intangible Assets" (Statement 142). Statement
141 requires that the purchase method of accounting be used for all business
combinations initiated after June 30, 2001. Statement 141 also included guidance
on the initial recognition and measurement of goodwill and other intangible
assets arising from business combinations completed after June 30, 2001. Under
Statement 142, goodwill will no
7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HILB, ROGAL AND HAMILTON COMPANY AND SUBSIDIARIES
March 31, 2002
(UNAUDITED)
NOTE C--INTANGIBLE ASSETS-Continued
longer be amortized but will be subject to annual impairment tests. Intangible
assets with finite lives will continue to be amortized over their useful lives.
The Company adopted Statement 142 effective January 1, 2002.
The Company will test goodwill for impairment using the two-step process
prescribed in Statement 142. The first step is a screen for potential
impairment, while the second step measures the amount of the impairment, if any.
The Company expects to perform the first of the required impairment tests of
goodwill as of January 1, 2002 in the first six months of 2002. Any impairment
charge resulting from these transitional impairment tests will be reflected as
the cumulative effect of a change in accounting principle in the first quarter
of 2002. The Company does not anticipate these tests will have a material impact
on the earnings or financial position of the Company.
The following table provides a reconciliation of the March 31, 2002 and 2001
reported net income to adjusted net income had Statement 142 been applied as of
January 1, 2001:
For the Three Months Ended March 31,
2002 2001
---- ----
Net Income - as reported $19,127,721 $7,781,026
Goodwill amortization, net of tax - 1,988,462
----------- ----------
Adjusted net income $19,127,721 $9,769,488
=========== ==========
Net Income Per Share - Basic:
Net income - as reported $0.68 $0.29
Goodwill amortization, net of tax - 0.08
----- ------
Adjusted net income $0.68 $0.37
===== =====
Net Income Per Share - Assuming Dilution:
Net income - as reported $0.60 $0.27
Goodwill amortization, net of tax - 0.06
----- -----
Adjusted net income $0.60 $0.33
===== =====
8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HILB, ROGAL AND HAMILTON COMPANY AND SUBSIDIARIES
March 31, 2002
(UNAUDITED)
NOTE C--INTANGIBLE ASSETS-Continued
Intangible assets consist of the following:
As of March 31, 2002 As of December 31, 2001
-------------------- -----------------------
Gross Carrying Accumulated Gross Carrying Accumulated
Amount Amortization Amount Amortization
------ ------------ ------ ------------
Amortizable intangible assets:
Expiration rights $ 5,085,000 $ 4,679,000 $ 5,085,000 $ 4,601,000
Non-compete agreements 28,157,000 6,577,000 27,932,000 6,138,000
Tradename 500,000 58,000 500,000 53,000
----------- ----------- ----------- -----------
Total $33,742,000 $11,314,000 $33,517,000 $10,792,000
=========== =========== =========== ===========
Indefinite-lived intangible
assets:
Goodwill, net $250,149,000 $243,526,000
Aggregate amortization expense for the three months ended March 31, 2002 and
2001 was $522,000 and $3,325,000, respectively.
Estimated amortization expense:
For year ended December 31, 2002 $2,187,000
For year ended December 31, 2003 1,965,000
For year ended December 31, 2004 1,857,000
For year ended December 31, 2005 1,801,000
For year ended December 31, 2006 1,791,000
For year ended December 31, 2007 1,789,000
The changes in the net carrying amount of goodwill for the three months ended
March 31, 2002, are as follows:
Balance as of December 31, 2001 $243,526,000
Goodwill acquired during three months ended
March 31, 2002 6,623,000
------------
Balance as of March 31, 2002 $250,149,000
============
9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HILB, ROGAL AND HAMILTON COMPANY AND SUBSIDIARIES
March 31, 2002
(UNAUDITED)
NOTE D--INCOME TAXES
Deferred taxes result from temporary differences between the carrying amounts of
assets and liabilities for financial statement purposes and the amounts used for
income tax purposes. The Company's effective rate varies from the statutory rate
primarily due to state income taxes and non-deductible amortization.
NOTE E--ACQUISITIONS
During the first three months of 2002, the Company acquired certain assets and
liabilities of three insurance agencies for approximately $4,606,000 ($4,119,000
in cash and $487,000 in guaranteed future payments) in purchase accounting
transactions. The combined purchase price may be increased based on agency
profitability per the contracts. These acquisitions are not material to the
consolidated financial statements individually or in aggregate.
NOTE F--SALE OF ASSETS AND OTHER GAINS
During the three months ended March 31, 2002 and 2001, the Company sold certain
insurance accounts and other assets resulting in a loss of approximately $3,000
and a gain of $39,000, respectively. Revenues, expenses and assets related to
these dispositions were not material to the consolidated financial statements.
10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HILB, ROGAL AND HAMILTON COMPANY AND SUBSIDIARIES
March 31, 2002
(UNAUDITED)
NOTE G--NET INCOME PER SHARE
The following table sets forth the computation of basic and diluted net income
per share.
THREE MONTHS ENDED
MARCH 31, 2002 MARCH 31, 2001
-------------- --------------
Numerator for basic net income
per share - net income $19,127,721 $7,781,026
Effect of dilutive securities:
5.25% convertible debenture 272,393 270,882
----------- ----------
Numerator for dilutive net income per share - net
income available after assumed conversions $19,400,114 $8,051,908
=========== ==========
Denominator
Weighted average shares 28,148,503 26,561,116
Effect of guaranteed future shares to be issued in
connection with agency acquisitions 39,220 54,858
----------- ----------
Denominator for basic net income per share 28,187,723 26,615,974
Effect of dilutive securities:
Employee stock options 1,029,703 684,164
Employee non-vested stock 150,910 76,520
Contingent stock - acquisitions 21,628 11,764
5.25% convertible debenture 2,813,187 2,813,186
----------- ----------
Dilutive potential common shares 4,015,428 3,585,634
----------- ----------
Denominator for diluted net income per share -
adjusted weighted average shares and
assumed conversions 32,203,151 30,201,608
=========== ==========
Net Income Per Share:
Basic $0.68 $0.29
===== =====
Assuming Dilution $0.60 $0.27
===== =====
11
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations:
- ---------------------
Three Months Ended March 31, 2002
Net income for the three months ended March 31, 2002 was $19.1 million, or $0.60
per share, compared with $7.8 million, or $0.27 per share for the comparable
period last year. Excluding net non-recurring gains and the cumulative effect of
an accounting change in 2002 relating to revenue recognition, and adjusting
amortization to a proforma basis in 2001 as if the new accounting standards
related to goodwill had been adopted as of January 1, 2001, net income was $15.2
million, a 55.8% increase from $9.7 million last year. Net income per share on
the same basis was $0.48, compared with $0.33 last year. See "Note C -
Intangible Assets" of Notes to Consolidated Financial Statements.
Commissions and fees were $98.6 million, an increase of 28.1% from commissions
and fees of $77.0 million during the comparable period of the prior year.
Approximately $15.4 million of commissions were derived from purchase
acquisitions of new insurance agencies. This increase was offset by decreases of
approximately $1.0 million from the sale of certain offices and accounts in 2002
and 2001. Excluding the effect of acquisitions and dispositions, commissions and
fees from operations owned during both periods increased 9.3%. This increase
principally reflects new business production, firming of premium levels and
higher non-standard commissions.
Expenses for the quarter increased $10.0 million or 15.5%. Compensation and
benefits and other operating expenses increased $10.5 million and $2.7 million,
respectively, primarily due to purchase acquisitions of new insurance agencies
and increased revenue production. Amortization of intangibles decreased
approximately $2.8 million due primarily to the adoption of Statement 142.
Interest expense decreased $0.4 million due to decreased borrowings and lower
rates.
The Company's overall tax rate for the three months ended March 31, 2002 was
40.8% compared to 43.0% for the same period of the prior year. The decrease is
primarily related to the non-amortization of goodwill resulting from the
adoption of Statement 142.
The timing of contingent commissions, policy renewals and acquisitions may cause
revenues, expenses and net income to vary significantly from quarter to quarter.
As a result of the factors described above, operating results for the three
months ended March 31, 2002 should not be considered indicative of the results
that may be expected for the entire year ending December 31, 2002.
Liquidity and Capital Resources:
- -------------------------------
Net cash provided by operations totaled $17.9 million and $25.3 million for the
three months ended March 31, 2002 and 2001, respectively, and is primarily
dependent upon the timing of the collection of insurance premiums from clients
and payment of those premiums to the appropriate insurance underwriters.
12
The Company has historically generated sufficient funds internally to finance
capital expenditures for property and equipment. Cash expenditures for the
acquisition of property and equipment were $1.0 million and $1.0 million for the
three months ended March 31, 2002 and 2001, respectively. The timing and extent
of the purchase and sale of investments is dependent upon cash needs and yields
on alternate investments and cash equivalents. The purchase of insurance
agencies accounted for under the purchase method of accounting utilized cash of
$3.8 million and $17.5 million in the three months ended March 31, 2002 and
2001, respectively. Cash expenditures for such insurance agency acquisitions
have been primarily funded through operations and long-term borrowings. In
addition, a portion of the purchase price in such acquisitions may be paid
through Common Stock and deferred cash payments. The Company did not have any
material capital expenditure commitments as of March 31, 2002.
Financing activities utilized cash of $9.6 million and provided cash of $15.8
million in the three months ended March 31, 2002 and 2001, respectively. The
Company has consistently made debt payments and annually increased its dividend
rate. The Company did not repurchase any shares during the three months ended
March 31, 2002 and 2001, respectively. The Company is currently authorized to
purchase an additional 748,200 shares. The Company anticipates the continuance
of its dividend policy. As of March 31, 2002, the Company has a bank credit
facility of $144.1 million under which loans are due in various amounts through
2004 and $32.0 million face value of 5.25% Convertible Subordinated Debentures
due 2014. At March 31, 2002, there were loans of $74.1 million outstanding under
the bank agreement, with $70.0 million available under the revolving portion of
the facility for future borrowings.
The Company had a current ratio (current assets to current liabilities) of 0.90
to 1.00 as of March 31, 2002. Shareholders' equity of $161.0 million at March
31, 2002, is improved from $142.8 million at December 31, 2001. The debt to
equity ratio of .67 to 1.00 is decreased from the ratio at December 31, 2001 of
0.80 to 1.00 due to increased net income and decreased borrowings.
The Company believes that cash generated from operations, together with proceeds
from borrowings, will provide sufficient funds to meet the Company's short and
long-term funding needs.
Market Risk
- -----------
The Company has certain investments and utilizes (on a limited basis) derivative
financial instruments which are subject to market risk; however, the Company
believes that exposure to market risk associated with these instruments is not
material.
New Accounting Standard
- -----------------------
The Company adopted Statement of Financial Accounting Standards No. 142.
"Goodwill and Other Intangible Assets" (Statement 142), effective January 1,
2002, which, among other things, ends the practice of amortizing goodwill. Net
income for the three months ended March 31, 2001 would have increased by $0.06
per share on a proforma basis, assuming adoption of Statement 142 as of January
1, 2001. The Company does not anticipate that the impairment tests required by
Statement 142 will have a material impact on the earnings or financial position
of the Company.
13
Change in Accounting Principle
- ------------------------------
Effective January 1, 2002, the Company changed its method of accounting for
commissions on premiums billed and collected directly by insurance carriers on
its middle-market property and casualty business. Prior to 2002, this revenue
was recognized when received. Beginning January 1, 2002, this revenue is
recorded on the later of the billing date or the effective date, consistent with
the revenue recognition policy for agency billed business. This is the
predominant practice followed in the industry. Management believes that this new
methodology is preferable and that it better matches the income with the related
expenses. For the three months ended March 31, 2002, the effect of this change
was to increase net income by $4.6 million ($0.14 per share), which included the
cumulative effect adjustment of $3.9 million ($0.12 per share), net of income
taxes of $2.6 million. No prior period proforma amounts have been presented to
reflect the effect of retroactive application of the change as it is not
practical for the Company to compute prior period proforma amounts due to the
lack of prior period data.
Forward-Looking Statements
- --------------------------
The Company cautions readers that the foregoing discussion and analysis includes
"forward-looking statements" within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended, and are subject to the safe harbor created by
that Act. These forward-looking statements are believed by the Company to be
reasonable based upon management's current knowledge and assumptions about
future events, but are subject to the uncertainties generally inherent in any
such forward-looking statement, including factors discussed above as well as
other factors that may generally affect the Company's business, financial
condition or operating results. Reference is made to the discussion of
"Forward-Looking Statements" contained in "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 2001 regarding important
risk factors and uncertainties that could cause actual results, performance or
achievements to differ materially from future results, performance or
achievements expressed or implied in any forward-looking statement made by or on
behalf of the Company.
Item 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this item is set forth under the caption "Market
Risk" in Item 2 -- Management's Discussion and Analysis of Financial Condition
and Results of Operations.
14
PART II - OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
a) The Annual Meeting of Shareholders (the "Meeting") of the
Company was held on Tuesday, May 7, 2002.
c) The Shareholders voted for the election of four (4) directors
to serve for terms of three (3) years expiring on the date of
the Annual Meeting in 2005 and until their successors are
elected and one (1) director to serve for a term of one (1)
year expiring on the date of the Annual Meeting in 2003 and
until his successor is elected. The results of the voting in
these elections are set forth below.
d)
Votes For Votes Non-Votes
Withheld
Theodore L. Chandler, Jr. 20,903,802 311,470 7,278,381
Norwood H. Davis, Jr. 20,857,357 357,915 7,278,381
Timothy J. Korman 20,857,541 357,731 7,278,381
Thomas H. O'Brien 20,903,877 311,395 7,278,381
Julious P. Smith, Jr. 20,856,835 358,437 7,278,381
No other matters were voted upon at the Meeting or during the
quarter for which this report is filed.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
Exhibit No. Document
----------- --------
18.1 Letter from Independent Auditors regarding
preferability of accounting principle change
b) Reports on Form 8-K
None.
15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Hilb, Rogal and Hamilton Company
--------------------------------
(Registrant)
Date May 9, 2002 By: /s/ Andrew L. Rogal
-------------------- --------------------------------
Chairman and Chief Executive
Officer
(Principal Executive Officer)
Date May 9, 2002 By: /s/ Carolyn Jones
-------------------- --------------------------------
Senior Vice President and Chief
Financial Officer
(Principal Financial Officer)
Date May 9, 2002 By: /s/ Robert W. Blanton, Jr.
-------------------- --------------------------------
Vice President and Controller
(Chief Accounting Officer)
16
EXHIBIT INDEX
No. Description
- --- -----------
18.1 Letter from Independent Auditors regarding preferability of
accounting principle change