DAYTONA BEACH AND TAMPA, FL, Jul 24, 2006 (MARKET WIRE via COMTEX News Network) -- Brown & Brown, Inc. (NYSE: BRO) announced net income for the second quarter of 2006 of $44,431,000, or $0.32 per share, an increase of 20.0% from the $37,033,000, or $0.27 per share, reported for the quarter ended June 30, 2005. Total revenue for the quarter ended June 30, 2006 was $220,807,000, compared with 2005 second-quarter revenue of $195,931,000, an increase of 12.7%.
Total revenue for the first half of 2006 was $451,389,000, compared with revenue of $398,305,000 for the corresponding period in 2005, up 13.3%. Net income for the first six months of 2006 was $94,457,000, versus $80,051,000 during the comparable 2005 period, an increase of 18.0%. Net income per share for the six months ended June 30, 2006 was $0.67, versus the $0.57 per share posted during the same period in 2005, an increase of 17.5%.
J. Hyatt Brown, Chairman and CEO, noted, "We had a very good quarter. We are very pleased with the 6.8% internal growth rate of our core commissions and fees revenue. In fact, all but one of our seven business operating units showed improvement in their internal growth rates over the previous quarter. We are optimistic about the continued growth, development and strength of our company."
President and Chief Operating Officer Jim W. Henderson added, "We are also pleased with the performance of our Producers who have completed our in-house sales school, 'Brown & Brown University.' These sales professionals are contributing significantly to our organic growth and give us an encouraging glimpse of our future leadership. On the acquisition front, we have completed 12 transactions so far in 2006 with combined annualized revenue of approximately $32 million and we continue to be very positive about acquisition opportunities."
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, 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 continuing our revenue, earnings and operating growth, as well as identifying and consummating attractive 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 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, Georgia, New Jersey, New York, Pennsylvania and/or Washington, where significant portions of the Company's business are concentrated; the actual costs of resolution of contingent liabilities; 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; and the cost and impact on the Company of previously disclosed litigation initiated against the Company and 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
(in thousands, except per share data)
(unaudited)
For the For the
Three Months Ended Six Months Ended
June 30 June 30
------- -------
2006 2005 2006 2005
--------- --------- --------- ---------
REVENUES
Commissions and fees $ 217,427 $ 192,738 $ 445,342 $ 393,053
Investment income 2,956 1,524 5,165 2,489
Other income, net 424 1,669 882 2,763
--------- --------- --------- ---------
Total revenues 220,807 195,931 451,389 398,305
--------- --------- --------- ---------
EXPENSES
Employee compensation and
benefits 103,180 94,100 203,910 184,484
Non-cash stock-based
compensation 1,434 788 3,764 1,679
Other operating expenses 30,134 25,980 61,103 53,122
Amortization 8,978 8,357 17,978 15,892
Depreciation 2,785 2,527 5,380 4,894
Interest 3,329 3,711 6,851 7,253
--------- --------- --------- ---------
Total expenses 149,840 135,463 298,986 267,324
--------- --------- --------- ---------
Income before income
taxes 70,967 60,468 152,403 130,981
Income taxes 26,536 23,435 57,946 50,930
--------- --------- --------- ---------
Net income $ 44,431 $ 37,033 $ 94,457 $ 80,051
========= ========= ========= =========
Net income per share:
Basic $ 0.32 $ 0.27 $ 0.68 $ 0.58
========= ========= ========= =========
Diluted $ 0.32 $ 0.27 $ 0.67 $ 0.57
========= ========= ========= =========
Weighted average number
of shares outstanding:
Basic 139,511 138,312 139,447 138,318
========= ========= ========= =========
Diluted 141,006 139,476 140,915 139,448
========= ========= ========= =========
Dividends declared per
share $ 0.05 $ 0.04 $ 0.10 $ 0.08
========= ========= ========= =========
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Commissions and Fees(1)
Three Months Ended June 30, 2006
(in thousands)
(unaudited)
Less
Quarter Quarter Total Total Acquis- Internal
Ended Ended Net Net ition Net
6/30/06 6/30/05 Change Growth % Revenues Growth %
-------- -------- ------- ------- ------- ------
Florida Retail $ 47,029 $ 40,738 $ 6,291 15.4% $ 97 15.2%
National Retail 53,025 51,134 1,891 3.7% 3,024 (2.2)%
Western Retail 26,423 25,513 910 3.6% 1,495 (2.3)%
-------- -------- ------- -------
Total Retail 126,477 117,385 9,092 7.7% 4,616 3.8%
Professional Programs 9,124 9,647 (523) (5.4)% - (5.4)%
Special Programs 26,435 20,705 5,730 27.7% 1,706 19.4%
-------- -------- ------- -------
Total Programs 35,559 30,352 5,207 17.2% 1,706 11.5%
-------- -------- ------- -------
Brokerage 42,736 34,077 8,659 25.4% 4,103 13.4%
Services 8,051 6,449 1,602 24.8% 1,348 3.9%
-------- -------- ------- -------
Total Core Commissions
and Fees (1) $212,823 $188,263 $24,560 13.0% $11,773 6.8%
======== ======== ======= =======
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
for the Three Months Ended June 30, 2006 and 2005
(in thousands)
(unaudited)
Quarter Quarter
Ended Ended
6/30/06 6/30/05
--------- ---------
Total core commissions and fees(1) $ 212,823 $ 188,263
Contingent commissions 4,604 4,002
Divested business - 473
--------- ---------
Total commission & fees $ 217,427 $ 192,738
========= =========
(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)
June 30, December 31,
2006 2005
---- ----
ASSETS
Current assets:
Cash and cash equivalents $ 33,148 $ 100,580
Restricted cash and investments 275,959 229,872
Short-term investments 2,799 2,748
Premiums, commissions and fees receivable 276,730 257,930
Other current assets 21,767 28,637
----------- -----------
Total current assets 610,403 619,767
Fixed assets, net 43,730 39,398
Goodwill 646,027 549,040
Amortizable intangible assets, net 390,252 377,907
Investments 9,656 8,421
Other assets 15,163 14,127
----------- -----------
Total assets $ 1,715,231 $ 1,608,660
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Premiums payable to insurance companies $ 463,352 $ 397,466
Premium deposits and credits due customers 28,884 34,027
Accounts payable 33,784 21,161
Accrued expenses 62,837 74,534
Current portion of long-term debt 17,990 55,630
----------- -----------
Total current liabilities 606,847 582,818
Long-term debt 208,181 214,179
Deferred income taxes, net 37,531 35,489
Other liabilities 12,688 11,830
Shareholders' equity:
Common stock, par value $0.10 per share;
authorized 280,000 shares; issued and
outstanding 139,480 at 2006 and 139,383
at 2005 13,948 13,938
Additional paid-in capital 197,581 193,313
Retained earnings 633,159 552,647
Accumulated other comprehensive income 5,296 4,446
----------- -----------
Total shareholders' equity 849,984 764,344
----------- -----------
Total liabilities and shareholders' equity $ 1,715,231 $ 1,608,660
=========== ===========
Contact: Cory T. Walker Chief Financial Officer (386) 239-7250
SOURCE: Brown & Brown, Inc.