DAYTONA BEACH, FL and TAMPA, FL, Jul 16, 2012 (MARKETWIRE via COMTEX) --Brown & Brown, Inc. (NYSE: BRO) today announced its preliminary, unaudited financial results for the second quarter of 2012.
Net income for the second quarter of 2012 was $42,471,000, or $0.29 per share, compared with $37,035,000, or $0.26 per share for the same quarter of 2011, an increase of 11.5%. Total revenue for the second quarter was $290,916,000, compared with 2011 second-quarter revenue of $246,816,000, an increase of 17.9%.
Total revenue for the six months ended June 30, 2012 was $593,402,000, compared with total revenue for the same period of 2011 of $509,044,000, an increase of 16.6%. Net income for the six-month period ended June 30, 2012 was $91,904,000, or $0.63 per share, compared with $83,328,000, or $0.57 per share for the same period of 2011, an increase of 10.5%.
J. Powell Brown, President and Chief Executive Officer of the Company, noted, "We are pleased with our continued incremental revenue growth and the fact that each of our four business divisions reported positive organic growth in the second quarter of 2012."
Brown & Brown, Inc., through its subsidiaries, offers a broad range of insurance and reinsurance products and services. Additionally, certain Brown & Brown subsidiaries offer a variety of risk management, third party administration, and other services. Serving business, 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 the Company's anticipated financial results for the second quarter of 2012. 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. These risks and uncertainties include, but are not limited to, the Company's determination as it finalizes its financial results for the second quarter of 2012 that its financial results differ from the current preliminary unaudited numbers set forth herein, other factors that the Company may not have currently identified or quantified, and other risks, relevant factors and uncertainties identified in the Company's Annual Report on Form 10-K for the year ended December 31, 2011, and the Company's other filings with the Securities and Exchange Commission. 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 Six Months Ended
June 30, June 30,
2012 2011 2012 2011
--------- --------- --------- ---------
REVENUES
Commissions and fees $ 289,942 $ 245,983 $ 586,475 $ 507,435
Investment income 187 393 322 617
Other income, net 787 440 6,605 992
--------- --------- --------- ---------
Total revenues 290,916 246,816 593,402 509,044
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EXPENSES
Employee compensation and benefits 150,752 125,852 300,348 252,409
Non-cash stock-based compensation 3,738 2,709 7,485 5,482
Other operating expenses 42,220 34,979 85,620 71,055
Amortization 15,881 13,556 31,494 27,065
Depreciation 3,784 3,079 7,425 6,214
Interest 4,000 3,608 8,087 7,215
Change in estimated acquisition
earn-out payables (604) 1,565 (992) 1,466
--------- --------- --------- ---------
Total expenses 219,771 185,348 439,467 370,906
--------- --------- --------- ---------
Income before income taxes 71,145 61,468 153,935 138,138
Income taxes 28,674 24,433 62,031 54,810
--------- --------- --------- ---------
Net income $ 42,471 $ 37,035 $ 91,904 $ 83,328
========= ========= ========= =========
Net income per share:
Basic $ 0.30 $ 0.26 $ 0.64 $ 0.58
========= ========= ========= =========
Diluted $ 0.29 $ 0.26 $ 0.63 $ 0.57
========= ========= ========= =========
Weighted average number of shares
outstanding:
Basic 139,086 138,379 139,044 138,365
========= ========= ========= =========
Diluted 141,828 139,942 141,664 140,950
========= ========= ========= =========
Dividends declared per share $ 0.085 $ 0.08 $ 0.17 $ 0.16
========= ========= ========= =========
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Organic Commissions and Fees(1)
Three Months Ended June 30, 2012
(in thousands)
(unaudited)
Total Less
Quarter Quarter Total Net Acquisiti Internal Internal
Ended Ended Net Growth on Net Net
06/30/12 06/30/11 Change % Revenues Growth $ Growth %
--------- --------- ------------- --------- --------- --------
Retail(2) $ 159,684 $ 147,826 $11,858 8.0% $ 11,431 $ 427 0.3%
National
Programs 53,135 31,424 21,711 69.1% 19,464 2,247 7.2%
Wholesale
Brokerage 46,301 42,493 3,808 9.0% 443 3,365 7.9%
Services 27,521 16,120 11,401 70.7% 9,772 1,629 10.1%
--------- --------- ------- --------- ---------
Total Core
Commission
s and Fees
(1) $ 286,641 $ 237,863 $48,778 20.5% $ 41,110 $ 7,668 3.2%
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Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
For the Three Months Ended June 30, 2012 and 2011
(in thousands)
(unaudited)
Quarter Quarter
Ended Ended
06/30/12 06/30/11
----------- -----------
Total core commissions and fees(1) $ 286,641 $ 237,863
Profit-sharing contingent commissions 1,043 2,275
Guaranteed supplemental commissions 2,258 2,856
Divested business - 2,989
----------- -----------
Total commissions & fees $ 289,942 $ 245,983
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(1) Total core organic commissions and fees are our total commissions and
fees less (i) profit-sharing contingent commissions (revenues 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), (ii) guaranteed supplemental commissions
(GSC) (revenues derived from special revenue-sharing commissions from
insurance companies based solely upon the volume of the business placed with
such companies during the current year),and (iii) divested business
(commissions and fees generated from offices, books of business or niches
sold by the Company or terminated).
(2) The Retail segment includes commissions and fees reported in the "Other"
column of the Segment Information, which includes corporate and
consolidation items.
Brown & Brown, Inc.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
June 30, December 31,
2012 2011
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 193,712 $ 286,305
Restricted cash and investments 192,540 130,535
Short-term investments 7,729 7,627
Premiums, commissions and fees receivable 295,758 240,257
Deferred income taxes 16,281 19,863
Other current assets 45,018 23,540
------------ ------------
Total current assets 751,038 708,127
Fixed assets, net 70,986 61,360
Goodwill 1,674,903 1,323,469
Amortizable intangible assets, net 577,203 496,182
Other assets 23,161 17,873
------------ ------------
Total assets $ 3,097,291 $ 2,607,011
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Premiums payable to insurance companies $ 461,022 $ 327,096
Premium deposits and credits due customers 29,246 30,048
Accounts payable 55,802 22,384
Accrued expenses and other liabilities 94,546 100,865
Current portion of long-term debt 663 1,227
------------ ------------
Total current liabilities 641,279 481,620
Long-term debt 450,033 250,033
Deferred income taxes, net 222,773 178,052
Other liabilities 64,959 53,343
Shareholders' equity:
Common stock, par value $0.10 per share;
authorized 280,000 shares; issued and
outstanding 143,281 at 2012 and 143,352 at 2011 14,328 14,335
Additional paid-in capital 313,810 307,059
Retained earnings 1,390,109 1,322,562
Accumulated other comprehensive income - 7
------------ ------------
Total shareholders' equity 1,718,247 1,643,963
------------ ------------
Total liabilities and shareholders' equity $ 3,097,291 $ 2,607,011
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Cory T. Walker Chief Financial Officer (386) 239-7250
SOURCE: Brown & Brown, Inc.