Net income for the first quarter of 2009 was $48,012,000, or $0.34 per share, compared with $51,760,000, or $0.37 per share for the same quarter of 2008.
Total revenues for the quarter ended March 31, 2009 were $263,580,000, compared with $256,715,000 recorded in the corresponding quarter of 2008, an increase of 2.7%.
J. Powell Brown, President of Brown & Brown, Inc., noted, "We are pleased to be delivering innovative and very cost effective insurance products and services to our new and existing customers, as well as generating industry-leading margins. Our first-quarter results reflect a continued slowdown in the economy, which has caused significant decreases in insurance exposure units. These results also demonstrate the effect of the very competitive insurance rate environment for property and casualty insurance that has prevailed over the last few years."
Jim W. Henderson, Vice Chairman and Chief Operating Officer of the Company, added, "Our acquisition activity remains active and promising. For the year, we have closed on four deals representing a total of approximately $12.5 million in forward annualized revenues. We remain conservative in our pricing and insistent on sustainable earnings. Substantially all of our acquisitions are funded by our robust internal cash flows."
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' seventh 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 recent 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, 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, 2009 and 2008 (in thousands, except per share data) (unaudited) 2009 2008 --------- ---------- REVENUES Commissions and fees $ 263,964 $ 253,528 Investment income 310 1,999 Other (loss) income, net (694) 1,188 --------- ---------- Total revenues 263,580 256,715 --------- ---------- EXPENSES Employee compensation and benefits 127,341 121,187 Non-cash stock-based compensation 1,816 1,944 Other operating expenses 35,864 31,204 Amortization 12,385 11,116 Depreciation 3,333 3,246 Interest 3,634 3,434 --------- ---------- Total expenses 184,373 172,131 --------- ---------- Income before income taxes 79,207 84,584 Income taxes 31,195 32,824 --------- ---------- Net income $ 48,012 $ 51,760 ========= ========== Net income per share: Basic $ 0.34 $ 0.37 ========= ========== Diluted $ 0.34 $ 0.37 ========= ========== Weighted average number of shares outstanding: Basic 141,558 140,704 ========= ========== Diluted 141,843 141,327 ========= ========== Dividends declared per share $ 0.075 $ 0.070 ========= ========== Brown & Brown, Inc. INTERNAL GROWTH SCHEDULE Core Commissions and Fees(1) Three Months Ended March 31, 2009 (in thousands) (unaudited) Total Internal Internal Quarter Quarter Total Net Less Net Net Ended Ended Net Growth Acquisition Growth Growth 3/31/09 3/31/08 Change % Revenues $ % -------- -------- ------- ----- ------- ------- ------ Florida Retail $ 40,131 $ 41,227 $(1,096) (2.7)% $ 3,667 $(4,763) (11.6)% National Retail 77,527 70,156 7,371 10.5% 11,443 (4,072) (5.8)% Western Retail 25,293 21,087 4,206 19.9% 7,566 (3,360) (15.9)% -------- -------- ------- ------- ------- Total Retail 142,951 132,470 10,481 7.9% 22,676 (12,195) (9.2)% -------- -------- ------- ------- ------- Wholesale Brokerage 34,462 36,878 (2,416) (6.6)% 718 (3,134) (8.5)% Professional Programs 10,572 10,245 327 3.2% - 327 3.2% Special Programs 37,968 27,800 10,168 36.6% - 10,168 36.6% -------- -------- ------- ------- ------- Total National Programs 48,540 38,045 10,495 27.6% - 10,495 27.6% -------- -------- ------- ------- ------- Services 8,085 7,933 152 1.9% - 152 1.9% -------- -------- ------- ------- ------- Total Core Commissions and Fees (1) $234,038 $215,326 $18,712 8.7% $23,394 $(4,682) (2.2)% ======== ======== ======= ======= ======= Reconciliation of Internal Growth Schedule to Total Commissions and Fees Included in the Consolidated Statements of Income for the Three Months Ended March 31, 2009 and 2008 (in thousands) (unaudited) Quarter Quarter Ended Ended 3/31/09 3/31/08 --------- --------- Total core commissions and fees(1) $ 234,038 $ 215,326 Contingent commissions 29,926 36,347 Divested business - 1,855 --------- --------- Total commission & fees $ 263,964 $ 253,528 ========= ========= (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, 2009 2008 ----------- ------------ ASSETS Current assets: Cash and cash equivalents $ 126,439 $ 78,557 Restricted cash and investments 140,840 144,750 Short-term investments 7,471 7,511 Premiums, commissions and fees receivable 230,838 244,515 Deferred income taxes - 14,171 Other current assets 26,821 33,528 ----------- ------------ Total current assets 532,409 523,032 Fixed assets, net 63,354 63,520 Goodwill 1,044,417 1,023,372 Amortizable intangible assets, net 493,444 495,627 Other assets 13,692 14,029 ----------- ------------ Total assets $ 2,147,316 $ 2,119,580 =========== ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Premiums payable to insurance companies $ 367,438 $ 357,707 Premium deposits and credits due customers 45,008 43,577 Accounts payable 31,802 18,872 Accrued expenses 55,797 96,325 Current portion of long-term debt 6,526 6,162 ----------- ------------ Total current liabilities 506,571 522,643 Long-term debt 251,427 253,616 Deferred income taxes, net 93,289 90,143 Other liabilities 14,596 11,437 Shareholders' equity: Common stock, par value $0.10 per share; authorized 280,000 shares; issued and outstanding 141,549 at 2009 and 141,544 at 2008 14,155 14,154 Additional paid-in capital 252,478 250,167 Retained earnings 1,014,801 977,407 Accumulated other comprehensive income (1) 13 ----------- ------------ Total shareholders' equity 1,281,433 1,241,741 ----------- ------------ Total liabilities and shareholders' equity $ 2,147,316 $ 2,119,580 =========== ============
Contact: Cory T. Walker Chief Financial Officer (386) 239-7250
SOURCE: Brown & Brown, Inc.