DAYTONA BEACH, Fla., and TAMPA, Fla., Apr 14, 2004 /PRNewswire-FirstCall via COMTEX/ -- Brown & Brown, Inc. (NYSE: BRO) today announced a new record for its earnings per share in the first quarter.
Net income per share for the quarter ended March 31, 2004 was $0.53, an increase of 20.5% over the $0.44 in net income per share reported for the quarter ended March 31, 2003. Net income rose to $36,348,000 for the first quarter of 2004, versus net income of $30,536,000 for the quarter ended March 31, 2003, an increase of 19.0%.
Total revenue for the quarter ended March 31, 2004 was up 14.4%, to $165,565,000, compared with $144,736,000 recorded in the corresponding quarter in 2003. This revenue increase was enhanced by a 41.8% increase in the contingent commissions earned in the first quarter of 2004 over the similar revenues earned in the corresponding quarter of 2003.
J. Hyatt Brown, Chairman and CEO, commented, "Our results for this past quarter are very pleasing. A combination of reasonable internal growth and stronger acquisition activity allowed us to exceed our stated goal of 15% growth in earnings per share over the corresponding quarter in each year. The Brown & Brown team continues its intense focus on providing quality sales and service to our many clients across the United States."
Jim W. Henderson, President and Chief Operating Officer added, "So far in 2004, we have completed twelve acquisitions, representing sixteen entities with estimated annualized revenues of $52 million, which exceeds the amount of annualized revenues that we acquired in the full year of 2003. More importantly, the early class of 2004 will operate, from day one, at a sustainable margin level generally expected from established Brown & Brown offices. We are also pleased with the activity in the acquisition pipeline and the heightened level of interest, perhaps driven in part by market conditions. Additionally, consistent with prior years, purchasing agency assets with cash continues to be the most favorable financial approach for us, with agency pricing based on sustainable earnings."
Brown & Brown, Inc. and its subsidiaries offer a broad range of insurance and reinsurance products and services, as well as risk management, employee benefit administration, and managed health care programs. Providing service to business, public entity, individual and trade and association clients nation- wide, the Company is ranked by Business Insurance magazine as the United States' sixth largest independent insurance intermediary. Our Web address is www.bbinsurance.com.
This press release may contain certain statements relating to future results which are forward-looking statements. These statements are not historical facts, but instead represent only the Company's 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 and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Further information concerning the Company and its business, including factors that potentially could materially affect the Company's financial results, 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 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 Arizona, California, Florida, New Jersey, New York and/or Washington, where significant portions of the Company's business are concentrated; the actual costs of resolution of contingent liabilities; and those factors relevant to Brown & Brown's consummation and integration of the announced acquisition, including any matters analyzed in the due diligence process, material adverse changes in the customers of the company whose operations are being acquired, material adverse changes in the business and financial condition of either or both companies and their respective customers, and substantial delay in the expected closing of the transaction. All forward-looking statements included in this press release are made only as of the date of this press release, and we do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur or of which we hereafter become aware.
Brown & Brown, Inc.
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended March 31, 2004 and 2003
(in thousands, except per share data)
(unaudited)
2004 2003
REVENUES
Commissions and fees $164,314 $144,252
Investment income 688 333
Other income, net 563 151
Total revenues 165,565 144,736
EXPENSES
Employee compensation and benefits 76,282 68,241
Non-cash stock grant compensation 845 817
Other operating expenses 21,396 19,406
Amortization 4,817 4,337
Depreciation 2,154 1,927
Interest 711 1,007
Total expenses 106,205 95,735
Income before income taxes 59,360 49,001
Income taxes 23,012 18,465
Net income $ 36,348 $ 30,536
Net income per share:
Basic $0.53 $0.45
Diluted $0.53 $0.44
Weighted average number of shares
outstanding:
Basic 68,681 68,173
Diluted 69,207 68,931
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Commissions and Fees(1)
Three Months Ended March 31, 2004
(in thousands)
(unaudited)
Quarter Quarter Total Total Less Internal
Ended Ended Net Net Acquisition Net
3/31/04 3/31/03 Change Growth% Revenues Growth %
Florida Retail $34,219 $31,633 $2,586 8.2 % $150 7.7 %
National Retail 41,004 35,795 5,209 14.6 % 6,312 (3.1)%
Western Retail 26,123 22,711 3,412 15.0 % 2,262 5.1 %
Total Retail 101,346 90,139 11,207 12.4 % 8,724 2.8 %
Professional Programs 10,316 9,440 876 9.3 % -- 9.3 %
Special Programs 11,781 10,182 1,599 15.7 % 2,231 (6.2)%
Total Programs 22,097 19,622 2,475 12.6 % 2,231 1.2 %
Brokerage 8,630 6,891 1,739 25.2 % 854 12.8 %
TPA Services 6,465 5,705 760 13.3 % -- 13.3 %
Total Core
Commissions
and Fees (1) $138,538 $122,357 $16,181 13.2 % $11,809 3.6 %
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
for the Three Months Ended March 31, 2004 and 2003
(in thousands)
(unaudited)
Quarter Quarter
Ended Ended
3/31/04 3/31/03
Total core commissions and fees(1) $138,538 $122,357
Contingent commissions 25,776 18,173
Divested business -- 3,722
Total Commission & Fees $164,314 $144,252
(1) Total core commissions and fees are our total commissions and fees less (i) 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)
March 31, December 31,
2004 2003
ASSETS
Current assets:
Cash and cash equivalents $18,447 $56,926
Restricted cash 120,541 116,543
Short-term investments 394 382
Premiums, commissions and fees receivable 146,435 146,672
Other current assets 17,834 22,943
Total current assets 303,651 343,466
Fixed assets, net 33,435 32,396
Goodwill, net 287,411 237,753
Amortizable intangible assets, net 280,249 232,934
Investments 8,949 10,845
Other assets 6,925 8,460
Total assets $920,620 $865,854
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Premiums payable to insurance companies $204,021 $199,628
Premium deposits and credits due customers 25,160 22,223
Accounts payable 35,362 11,282
Accrued expenses 39,616 49,691
Current portion of long-term debt 18,346 18,692
Total current liabilities 322,505 301,516
Long-term debt 37,526 41,107
Deferred income taxes, net 13,713 15,018
Other liabilities 10,771 10,178
Shareholders' equity:
Common stock, par value $0.10 per share;
authorized 280,000 shares; issued and 6,879 6,856
outstanding, 68,788 at 2004 and
68,561 at 2003
Additional paid-in capital 177,725 170,130
Retained earnings 348,357 316,822
Accumulated other comprehensive income 3,144 4,227
Total shareholders' equity 536,105 498,035
Total liabilities and shareholders' equity $920,620 $865,854
SOURCE Brown & Brown, Inc.
Cory T. Walker, Chief Financial Officer, Brown & Brown, Inc., +1-386-239-7250
http://www.bbinsurance.com