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The Overland Park insurance and financial services company said its loss amounted to 75 cents a share. In the second quarter a year ago, Brooke earned $2.7 million, or 15 cents a share.
Two subsidiaries also reported financial results Monday. Brooke Capital Corp., a franchising business, said it lost $15 million, or $1.77 a share, compared with year-earlier profits of $1.4 million, or 17 cents a share. Brooke Corp. owns 66 percent of Brooke Capital.
Aleritas Capital Corp., a financing subsidiary in which Brooke holds a 62 percent stake, rebounded from steep first-quarter losses to achieve a second-quarter profit of $1.1 million, or 4 cents per share. Still, that was down from a profit of $3.5 million profit, or 19 cents a share, in 2007's second quarter.
Together, the three closely linked companies' second-quarter results reflect a sharp turnaround from about six months ago when Brooke operated a network of individual insurance agencies and related services across about half the United States.
Founder and Brooke Corp. chairman Robert Orr, who holds key executive posts in all three companies, said then that credit market conditions cut deeply into the organizations' ability to finance the purchasing, repackaging and resale of insurance agencies which fueled most of their growth since the late 1980s. In a flurry of executive departures and reassignments that followed, both Brooke Capital and Aleritas have virtually stopped all planned expansion until their finances sufficiently improve.
Brooke Corp.'s second-quarter results also reflect a $308,000 pretax loss at its Generations Bank subsidiary. The loss was attributed to the cost of acquiring loan business from Bank of the West that outpaced investment income.
Brooke Capital's losses stemmed primarily from the costs of shutting down and selling off some of the weakest of the nearly 900 agencies it once counted in its network. The company said in a regulatory filing it was counting on the pending sale of a Topeka life insurance company to pay some $3.8 million it owes to sellers, vendors and landlords of some of those agencies.
Aleritas returned to second-quarter profitability by restructuring and renegotiating a variety of credit arrangements. The company is still owed about $7 million in servicing fees, which hurt its second-quarter cash flow, Orr said in brief conference calls with securities analysts.
Orr and other executives plan to hold conference calls with Brooke and Brooke Capital analysts this morning.
Brooke shares fell a penny, to 84 cents a share, in trading of fewer than 10,000 shares Monday on the Nasdaq. Brooke Capital, on the American Stock Exchange, rose 15 cents to 75 cents a share on an estimated volume of 2,000 shares. Aleritas fell 8 cents to 40 cents a share in Over-the-Counter Bulletin Board trading estimated at 500 shares.
To reach Gene Meyer, call 816-234-4883 or send e-mail to gmeyer@kcstar.com.
To see more of The Kansas City Star, or to subscribe to the newspaper, go to http://www.kansascity.com. Copyright (c) 2008, The Kansas City Star, Mo. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
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