Net income for the third quarter of 2009 was $40,961,000, or $0.29 per share, compared with $40,593,000, or $0.29 per share for the same quarter of 2008. Total revenue for the third quarter ended September 30, 2009 was $243,766,000, compared with 2008 third-quarter revenue of $247,029,000.
Total revenue for the nine months ended September 30, 2009 was $753,715,000, compared with total revenue for the nine months ended September 30, 2008 of $745,464,000. Net income for the nine-month period ended September 30, 2009 was $129,641,000, or $0.91 per share, compared with $132,751,000, or $0.94 per share for the same period of 2008.
J. Powell Brown, President and Chief Executive Officer of Brown & Brown, Inc., noted, "In light of a very challenging operating environment, our team continues to deliver for our clients. Our results are a reflection of significant shrinkage in insurable exposure units and a soft rate environment."
Jim W. Henderson, Vice Chairman and Chief Operating Officer of the Company, added, "The anticipated improvement in economic conditions and the stabilization of the P&C marketplace are factors that we feel will contribute to a more favorable M&A environment going forward. We also hope to see some promising opportunities with respect to employee benefits agencies."
Brown & Brown, Inc. and its subsidiaries offer a broad range of insurance and reinsurance products and services, as well as risk management, third party administration, managed health care, and Medicare set-aside services and programs. Providing service to business, public entity, quasi-public entity, individual, trade and professional association clients nationwide, the Company is ranked by Business Insurance magazine as the United States' sixth largest independent insurance intermediary. The Company's Web address is www.bbinsurance.com.
This press release may contain certain statements relating to future results which are forward-looking statements, including those relating to future financial results and to acquisition opportunities. These statements are not historical facts, but instead represent only the Company's current belief regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company's control. It is possible that the Company's actual results, financial condition and achievements may differ, possibly materially, from the anticipated results, financial condition and achievements contemplated by these forward-looking statements. Further information concerning the Company and its business, including factors that potentially could materially affect the Company's financial results and condition, as well as its other achievements, are contained in the Company's filings with the Securities and Exchange Commission. Some factors include: general economic conditions around the country; downward commercial property and casualty premium pressures; the effects of legislative and regulatory changes in Florida pertaining to the insurance industry, including those relating to coastal property coverages; the competitive environment; the integration of the Company's operations with those of businesses or assets the Company has acquired or may acquire in the future and the failure to realize the expected benefits of such integration; the potential occurrence of a disaster that affects certain areas of the States of California, Florida, Indiana, Michigan, New Jersey, New York, Pennsylvania, Texas and/or Washington, where significant portions of the Company's business are concentrated; and the cost and impact on the Company of previously disclosed regulatory inquiries regarding industry and Company practices with respect to compensation received from insurance carriers. All forward-looking statements made herein are made only as of the date of this release, and the Company does not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur or of which the Company hereafter becomes aware.
Brown & Brown, Inc.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
For the For the
Three Months Ended Nine Months Ended
September 30 September 30
------------------- -------------------
2009 2008 2009 2008
--------- --------- --------- ---------
REVENUES
Commissions and fees $ 243,016 $ 243,766 $ 751,575 $ 736,129
Investment income 175 1,228 945 5,136
Other income, net 575 2,035 1,195 4,199
--------- --------- --------- ---------
Total revenues 243,766 247,029 753,715 745,464
--------- --------- --------- ---------
EXPENSES
Employee compensation and benefits 119,607 122,172 369,573 363,873
Non-cash stock-based compensation 1,732 1,819 5,243 5,563
Other operating expenses 35,523 36,405 107,007 101,993
Amortization 12,468 12,281 37,372 34,789
Depreciation 3,323 3,391 9,955 9,929
Interest 3,622 3,867 10,888 11,045
--------- --------- --------- ---------
Total expenses 176,275 179,935 540,038 527,192
--------- --------- --------- ---------
Income before income taxes 67,491 67,094 213,677 218,272
Income taxes 26,530 26,501 84,036 85,521
--------- --------- --------- ---------
Net income $ 40,961 $ 40,593 $ 129,641 $ 132,751
========= ========= ========= =========
Net income per share:
Basic $ 0.29 $ 0.29 $ 0.92 $ 0.94
========= ========= ========= =========
Diluted $ 0.29 $ 0.29 $ 0.91 $ 0.94
========= ========= ========= =========
Weighted average number of shares
outstanding:
Basic 137,279 136,409 137,052 136,157
========= ========= ========= =========
Diluted 137,671 136,941 137,403 136,718
========= ========= ========= =========
Dividends declared per share $ 0.075 $ 0.07 $ 0.225 $ 0.21
========= ========= ========= =========
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Commissions and Fees(1)
Three Months Ended September 30, 2009
(in thousands)
(unaudited)
Less
Quarter Quarter Total Total Acquis- Internal Internal
Ended Ended Net Net ition Net Net
9/30/09 9/30/08 Change Growth % Revenues Growth $ Growth %
-------- -------- ------- ------- -------- -------- -------
Florida
Retail $ 35,008 $ 40,025 $(5,017) (12.5)% $ - $ (5,017) (12.5)%
National
Retail 80,962 77,217 3,745 4.8 % 7,394 (3,649) (4.7)%
Western
Retail 26,279 26,774 (495) (1.8)% 2,725 (3,220) (12.0)%
-------- -------- ------- ------- --------
Total
Retail 142,249 144,016 (1,767) (1.2)% 10,119 (11,886) (8.3)%
-------- -------- ------- ------- --------
Wholesale
Brokerage 34,809 36,491 (1,682) (4.6)% 277 (1,959) (5.4)%
Professional
Programs 12,451 11,582 869 7.5 % - 869 7.5 %
Special
Programs 34,790 33,433 1,357 4.1 % 892 465 1.4 %
-------- -------- ------- ------- --------
Total
National
Programs 47,241 45,015 2,226 4.9 % 892 1,334 3.0 %
-------- -------- ------- ------- --------
Services 8,296 7,917 379 4.8 % - 379 4.8 %
-------- -------- ------- ------- --------
Total Core
Commissions
and Fees(1) $232,595 $233,439 $ (844) (0.4)% $11,288 $(12,132) (5.2)%
======== ======== ======= ======= ========
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
for the Three Months Ended September 30, 2009 and 2008
(in thousands)
(unaudited)
Quarter Quarter
Ended Ended
9/30/09 9/30/08
--------- ---------
Total core commissions and fees(1) $ 232,595 $ 233,439
Contingent commissions 10,421 9,730
Divested business - 597
--------- ---------
Total commission & fees $ 243,016 $ 243,766
========= =========
(1) Total core commissions and fees are our total commissions and fees
less (i) profit-sharing contingent commissions (revenue derived from
special revenue-sharing commissions from insurance companies based upon
the volume and the growth and/or profitability of the business placed
with such companies during the prior year), and (ii) divested business
(commissions and fees generated from offices, books of business or
niches sold by the Company or terminated).
Brown & Brown, Inc.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
September 30, December 31,
2009 2008
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 186,247 $ 78,557
Restricted cash and investments 158,843 144,750
Short-term investments 8,219 7,511
Premiums, commissions and fees receivable 238,525 244,515
Deferred income taxes - 14,171
Other current assets 36,487 33,528
------------ ------------
Total current assets 628,321 523,032
Fixed assets, net 62,324 63,520
Goodwill 1,063,357 1,023,372
Amortizable intangible assets, net 477,541 495,627
Other assets 6,579 14,029
------------ ------------
Total assets $ 2,238,122 $ 2,119,580
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Premiums payable to insurance companies $ 349,777 $ 357,707
Premium deposits and credits due customers 48,224 43,577
Accounts payable 14,987 18,872
Accrued expenses 83,493 96,325
Current portion of long-term debt 11,464 6,162
------------ ------------
Total current liabilities 507,945 522,643
Long-term debt 250,589 253,616
Deferred income taxes, net 107,996 90,143
Other liabilities 16,898 11,437
Shareholders' equity:
Common stock, par value $0.10 per share;
authorized 280,000 shares; issued and
outstanding 142,046 at 2009 and 141,544 at 2008 14,205 14,154
Additional paid-in capital 265,324 250,167
Retained earnings 1,075,161 977,407
Accumulated other comprehensive income 4 13
------------ ------------
Total shareholders' equity 1,354,694 1,241,741
------------ ------------
Total liabilities and shareholders' equity $ 2,238,122 $ 2,119,580
============ ============
Cory T. Walker Chief Financial Officer (386) 239-7250
SOURCE: Brown & Brown, Inc.