Lindsey Morden Group Inc.

Lindsey Morden Group Inc.

July 28, 2005 17:22 ET

Lindsey Morden Group Inc. Announces Second Quarter Results

TORONTO, ONTARIO--(CCNMatthews - July 28, 2005) - Lindsey Morden Group Inc. (TSX:LM.SV) - (Note: All dollar amounts in this news release are expressed in Canadian dollars)

Financial results for the three and six months ended June 30, 2005
(in $000's except per Second Quarter Year-to date
share amounts) 2005 2004 2005 2004
Canada 12,490 13,060 25,487 24,277
United States 14,671 12,035 28,428 24,791
United Kingdom 50,132 46,842 99,504 95,755
Europe 15,996 19,110 32,476 37,285
International 14,367 11,082 30,790 23,611
107,656 102,129 216,685 205,719

Operating earnings
(loss) from continuing
Canada (243) 287 111 473
United States 644 (748) 1,049 (986)
United Kingdom 3,584 1,839 7,883 5,881
Europe 160 1,928 667 2,953
International 3,724 1,331 10,859 3,702
Corporate (1,345) (2,300) (3,185) (4,948)
6,524 2,337 17,384 7,075
Interest expense 4,978 3,575 9,930 7,834
Loss (gain) on disposal 2 - (2,944) -
Provision for income
taxes 1,625 1,913 5,267 3,907
Net (loss) earnings
from continuing
operations (81) (3,151) 5,131 (4,666)
Net (loss) earnings
from discontinued
net of tax (2,918) 255 (2,918) (23,319)
Reimbursement for costs 566 - 566 4,000
Net (loss) earnings (2,433) (2,896) 2,779 (23,985)
Basic and diluted net
(loss) earnings per
share from
continuing operations $(0.01) $(0.23) $ 0.37 $(0.34)
Basic and diluted net
(loss) earnings per
share $(0.17) $(0.21) $ 0.20 $(1.73)

(1) Operating earnings (loss) from continuing operations is defined as revenue less cost of service and selling, general and administration expenses. Operating earnings (loss) does not have a standard meaning prescribed by generally accepted accounting principles and may not be comparable to similar measures used by other companies.

Revenue from continuing operations for second quarter 2005 was $107.7 million, an increase of $5.5 million from second quarter 2004. The United States, United Kingdom and International operations reported increases in revenue compared to second quarter 2004, which were partially offset by declines in revenue reported by the Canadian and European operations.

Operating earnings from continuing operations for second quarter 2005 were $6.5 million compared to $2.3 million for second quarter 2004, an increase of 179%. This increase was due to continued improvement in the International, United Kingdom and United States operations, which was offset by the reduction of earnings in the European operations and a loss in the Canadian operations.

The Company's net loss from continuing operations for second quarter 2005 was $0.1 million ($0.01 per share) compared to a net loss of $3.2 million ($0.23 per share) in the second quarter 2004. The year-to-date 2005 gain on disposal of $2.9 million was due to the sale of a European subsidiary on March 31, 2005. The year-to-date 2004 loss of $24.0 million ($1.73 loss per share) was primarily due to the loss from discontinued operations of $19.7 million.

On July 26, 2005, the Company filed a final prospectus with securities regulators in all Canadian jurisdictions in connection with an offering of rights to existing shareholders to purchase up to an additional 9,534,056 subordinate voting shares. If all rights are exercised, the rights offering is expected to raise total gross proceeds of $40.5 million for the Company. The full net proceeds of the rights offering will be used to partially repay the $105.0 million of borrowings by one of the Company's subsidiaries under an unsecured non-revolving term credit facility.

Mr. Jan Christiansen, President & CEO of Lindsey Morden Group Inc. stated, "The second quarter results reflect the continued strong performance by our International, United Kingdom and United States operations. Particularly encouraging is the market gains made by these companies during a time when the overall market conditions are difficult. Our efforts to re-organize our European operations are progressing.

During the quarter substantial progress was made in settling a dispute with a former business partner in the discontinued TPA business and we have therefore decided to accrue for the costs related to this settlement."

The Company's unaudited consolidated financial information has been prepared in accordance with Canadian generally accepted accounting principles and, unless otherwise stated, is in Canadian dollars.

Lindsey Morden Group Inc. is a holding company, which, through its Cunningham Lindsey subsidiaries, provides a wide range of independent insurance claims services, including claims adjusting, appraisal and claims and risk management services. It has a worldwide network of branches in Canada, the United States, the United Kingdom, continental Europe, the Far East, Latin America and the Middle East. Lindsey Morden also provides claims adjusting and appraisal training courses in the United States.

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