DAYTONA BEACH, FL and TAMPA, FL, Apr 19, 2010 (MARKETWIRE via COMTEX) --Brown & Brown, Inc. (NYSE: BRO) today announced its financial results for the first quarter of 2010.
Net income for the first quarter of 2010 was $44,128,000, or $0.31 per share, compared with $48,012,000, or $0.34 per share for the same quarter of 2009. Total revenue for the first quarter ended March 31, 2010 was $252,273,000, compared with 2009 first-quarter revenue of $263,580,000.
J. Powell Brown, President and Chief Executive Officer of Brown & Brown, Inc., noted, "The economy continues to negatively impact middle-market industries. Excluding our Proctor Financial, Inc. subsidiary, we fared incrementally better in the first quarter of 2010 than in the first quarter of 2009. Shrinking insurable exposure units continue to impact our results."
Jim W. Henderson, Vice Chairman and Chief Operating Officer of the Company, added, "We continue to accrete cash to a record level in the Company and we remain committed to acquiring quality agencies. An improving economy is an important component of a robust merger and acquisition environment."
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
For the Three Months Ended March 31, 2010 and 2009
(in thousands, except per share data)
(unaudited)
2010 2009
--------- ---------
REVENUES
Commissions and fees $ 250,674 $ 263,964
Investment income 331 310
Other income (loss), net 1,268 (694)
--------- ---------
Total revenues 252,273 263,580
--------- ---------
EXPENSES
Employee compensation and benefits 122,183 127,341
Non-cash stock-based compensation 1,955 1,816
Other operating expenses 36,333 35,864
Amortization 12,553 12,385
Depreciation 3,253 3,333
Interest 3,608 3,634
Change in estimated acquisition earn-out payable (696) -
--------- ---------
Total expenses 179,189 184,373
--------- ---------
Income before income taxes 73,084 79,207
Income taxes 28,956 31,195
--------- ---------
Net income $ 44,128 $ 48,012
========= =========
Net income per share:
Basic $ 0.31 $ 0.34
========= =========
Diluted $ 0.31 $ 0.34
========= =========
Weighted average number of shares outstanding:
Basic 137,623 136,935
========= =========
Diluted 137,791 137,220
========= =========
Dividends declared per share $ 0.0775 $ 0.075
========= =========
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Commissions and Fees(1)
Three Months Ended March 31, 2010
(in thousands)
(unaudited)
Less
Quarter Quarter Total Total Acquisi- Internal Internal
Ended Ended Net Net tion Net Net
03/31/10 03/31/09 Change Growth % Revenues Growth $ Growth %
-------- -------- -------- ------- ------- -------- ------
Florida
Retail $ 37,376 $ 40,079 $ (2,703) (6.7)% $ 14 $ (2,717) (6.8)%
National
Retail 77,905 77,474 431 0.6% 2,140 (1,709) (2.2)%
Western
Retail 21,960 25,068 (3,108) (12.4)% 926 (4,034) (16.1)%
-------- -------- -------- ------- --------
Total
Retail 137,241 142,621 (5,380) (3.8)% 3,080 (8,460) (5.9)%
-------- -------- -------- ------- --------
Professional
Programs 9,826 10,729 (903) (8.4)% - (903) (8.4)%
Special
Programs 28,573 37,811 (9,238) (24.4)% 552 (9,790) (25.9)%
-------- -------- -------- ------- --------
Total
National
Programs 38,399 48,540 (10,141) (20.9)% 552 (10,693) (22.0)%
-------- -------- -------- ------- --------
Wholesale
Brokerage 33,802 34,462 (660) (1.9)% 419 (1,079) (3.1)%
Services 8,996 8,085 911 11.3% 886 25 0.3%
-------- -------- -------- ------- --------
Total Core
Commissions
and
Fees (1) $218,438 $233,708 $(15,270) (6.5)% $ 4,937 $(20,207) (8.6)%
======== ======== ======== ======= ========
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
for the Three Months Ended March 31, 2010 and 2009
(in thousands)
(unaudited)
Quarter Quarter
Ended Ended
03/31/10 03/31/09
--------- ---------
Total core commissions and fees(1) $ 218,438 $ 233,708
Contingent commissions 32,236 29,926
Divested business - 330
--------- ---------
Total commission & fees $ 250,674 $ 263,964
========= =========
(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)
March 31, December 31,
2010 2009
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 228,805 $ 197,113
Restricted cash and investments 146,360 155,257
Short-term investments 8,345 8,213
Premiums, commissions and fees receivable 211,897 209,462
Deferred income taxes - 11,791
Other current assets 30,717 31,863
------------- -------------
Total current assets 626,124 613,699
Fixed assets, net 60,325 61,467
Goodwill 1,091,791 1,074,397
Amortizable intangible assets, net 465,290 468,862
Other assets 5,907 5,801
------------- -------------
Total assets $ 2,249,437 $ 2,224,226
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Premiums payable to insurance companies $ 327,281 $ 310,296
Premium deposits and credits due customers 31,314 37,715
Accounts payable 29,353 17,431
Accrued expenses and other liabilities 61,686 96,387
Current portion of long-term debt 6,015 17,124
------------- -------------
Total current liabilities 455,649 478,953
Long-term debt 250,030 250,209
Deferred income taxes, net 119,184 115,609
Other liabilities 19,177 9,581
Shareholders' equity:
Common stock, par value $0.10 per share;
authorized 280,000 shares; issued and
outstanding 142,128 at 2010 and 142,076
at 2009 14,213 14,208
Additional paid-in capital 270,261 267,856
Retained earnings 1,120,918 1,087,805
Accumulated other comprehensive income 5 5
------------- -------------
Total shareholders' equity 1,405,397 1,369,874
------------- -------------
Total liabilities and shareholders' equity $ 2,249,437 $ 2,224,226
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Cory T. Walker Chief Financial Officer (386) 239-7250
SOURCE: Brown & Brown, Inc.