DAYTONA BEACH and TAMPA, Fla., Oct. 17 /PRNewswire-FirstCall/ -- Brown & Brown, Inc. (NYSE: BRO) announced record quarterly earnings for the third quarter of 2004 of $30,086,000 compared with $26,051,000 in the third quarter of 2003, an increase of 15.5%. Net income per share rose to $0.43 per share, compared with $0.38 per share in the third quarter of last year. Total revenue for the quarter ended September 30, 2004 was up 20.1% to $160,381,000, compared with the revenue of $133,545,000 for the same quarter in 2003.
Total revenue for the nine months ended September 30, 2004 was $483,888,000, compared with revenue for the same period in 2003 of $416,139,000, up 16.3%. Net income for the nine months ended September 30, 2004 was $98,587,000, or $1.42 per share, compared with the $84,521,000, or $1.23 per share, posted during the same period last year. This represents an increase of 15.4% in per share earnings.
J. Hyatt Brown, Chairman and CEO, commenting on the quarter noted, "This was a very unique quarter, with four major hurricanes hitting our home state in a six-week period, all within the quarter. The manner in which our team responded to the needs of our clients and neighbors was remarkable. We are very proud of the dedication and commitment that our employees demonstrated during this chaotic time."
Jim W. Henderson, President and Chief Operating Officer added, "As our existing operations continue their bedrock improvement in operating results, we are pleased to announce that during the third quarter the funding of our $200 million private placement debt offering was completed. Even though this and future quarters bear the interest cost of this debt capital, we are now well positioned for opportunities in this favorable 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, and managed health care programs. Providing service to busi- ness, public entity, individual, trade and professional association clients nationwide, the Company is ranked by Business Insurance magazine as the United States' eighth largest independent insurance intermediary. Our Web address is http://www.bbinsurance.com.
This press release may contain certain statements relating to future results which are forward-looking statements. These statements are not his- torical 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 pres- sures; the competitive environment; the integration of the Company's opera- tions 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 concen- trated; the actual costs of resolution of contingent liabilities; and those factors relevant to Brown & Brown's consummation and integration of announced acquisitions, including any matters analyzed in the due diligence process, material adverse changes in the customers of the companies whose operations are acquired, and material adverse changes in the business and financial condition of either or both companies and their respective customers. 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
(in thousands, except per share data)
(unaudited)
For the For the
Three Months Ended Nine Months Ended
September 30 September 30
2004 2003 2004 2003
REVENUES
Commissions and fees $158,852 $132,146 $479,915 $413,656
Investment income 586 309 1,607 1,084
Other income, net 943 1,090 2,366 1,399
Total revenues 160,381 133,545 483,888 416,139
EXPENSES
Employee compensation
and benefits 79,449 66,882 232,000 201,215
Non-cash stock
grant compensation 374 375 1,885 1,824
Other operating
expenses 22,042 17,479 63,421 56,114
Amortization 5,777 4,209 16,077 12,963
Depreciation 2,238 2,116 6,661 6,062
Interest 2,245 858 3,699 2,811
Total expenses 112,125 91,919 323,743 280,989
Income before
income taxes 48,256 41,626 160,145 135,150
Income taxes 18,170 15,575 61,558 50,629
Net income $30,086 $26,051 $98,587 $84,521
Net income per share:
Basic $0.44 $0.38 $1.43 $1.24
Diluted $0.43 $0.38 $1.42 $1.23
Weighted average number
of shares outstanding:
Basic 69,009 68,532 68,828 68,327
Diluted 69,588 68,995 69,361 68,944
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Commissions and Fees(1)
Three Months Ended September 30, 2004
(in thousands)
(unaudited)
Quarter Quarter Total Total Less Internal
Ended Ended Net Net Acquisition Net
9/30/04 9/30/03 Change Growth % Revenues Growth %
Florida Retail $34,024 $33,477 $547 1.6% $-- 1.6%
National Retail 49,389 34,780 14,609 42.0% 15,530 -2.6%
Western Retail 28,693 24,965 3,728 14.9% 2,341 5.6%
Total Retail 112,106 93,222 18,884 20.3% 17,871 1.1%
Professional
Programs 10,964 9,818 1,146 11.7% 901 2.5%
Special Programs 19,712 11,232 8,480 75.5% 7,323 10.3%
Total Programs 30,676 21,050 9,626 45.7% 8,224 6.7%
Brokerage 8,921 6,543 2,378 36.3% 1,953 6.5%
TPA Services 6,163 5,056 1,107 21.9% -- 21.9%
Total Core
Commissions
and Fees (1) $157,866 $125,871 $31,995 25.4% $28,048 3.1%
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
for the Three Months Ended September 30, 2004 and 2003
(in thousands)
(unaudited)
Quarter Quarter
Ended Ended
9/30/04 9/30/03
Total core commissions and fees(1) $157,866 $125,871
Contingent commissions 986 1,202
Divested business -- 5,073
Total Commission & Fees $158,852 $132,146
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)
(Unaudited)
September 30, December 31,
2004 2003
ASSETS
Current assets:
Cash and cash equivalents $180,215 $56,926
Restricted cash 147,672 116,543
Short-term investments 277 382
Premiums, commissions and fees receivable 169,403 146,672
Other current assets 22,903 22,943
Total current assets 520,470 343,466
Fixed assets, net 33,402 32,396
Goodwill, net 320,617 237,753
Amortizable intangible assets, net 331,937 232,934
Investments 9,647 10,845
Other assets 9,718 8,460
Total assets $1,225,791 $865,854
LIABILITIES
Current liabilities:
Premiums payable to insurance companies $248,127 $199,628
Premium deposits and credits due customers 27,675 22,223
Accounts payable 19,568 11,282
Accrued expenses 51,601 49,691
Current portion of long-term debt 16,451 18,692
Total current liabilities 363,422 301,516
Long-term debt 230,823 41,107
Deferred income taxes, net 23,884 15,018
Other liabilities 9,147 10,178
SHAREHOLDERS' EQUITY
Common stock, par value $0.10 per share;
authorized 280,000 shares; issued and
outstanding, 69,151 at 2004 and
68,561 at 2003 6,915 6,856
Additional paid-in capital 186,377 170,130
Retained earnings 400,939 316,822
Accumulated other comprehensive income 4,284 4,227
Total shareholders' equity 598,515 498,035
Total liabilities and shareholders' equity $1,225,791 $865,854
SOURCE Brown & Brown, Inc.
-0- 10/17/2004
/CONTACT: Cory T. Walker, Chief Financial Officer of Brown & Brown, Inc.,
+1-386-239-7250/
/Web site: http://www.bbinsurance.com /
(BRO)
CO: Brown & Brown, Inc.
ST: Florida
IN: FIN INS
SU: ERN
AL
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0791 10/17/2004 17:00 EDT http://www.prnewswire.com