SOURCE: Brown & Brown, Inc.

Brown & Brown, Inc.

February 15, 2010 16:51 ET

Brown & Brown, Inc. Announces 2009 Fourth-Quarter and Year-End Financial Results

DAYTONA BEACH, FL and TAMPA, FL--(Marketwire - February 15, 2010) - Brown & Brown, Inc. (NYSE: BRO) today announced its net income and net income per share for the fourth quarter of 2009.

Net income for the fourth quarter of 2009 was $23,653,000, or $0.17 per share, compared with $33,373,000, or $0.24 per share for the same quarter of 2008. Total revenue for the fourth quarter ended December 31, 2009 was $214,162,000, compared with 2008 fourth-quarter revenue of $232,090,000.

Total revenue for the twelve months ended December 31, 2009 was $967,877,000, compared with total revenue for the twelve months ended December 31, 2008 of $977,554,000. Net income for the twelve-month period ended December 31, 2009 was $153,294,000, or $1.08 per share, compared with $166,124,000, or $1.17 per share, for the same period of 2008.

J. Powell Brown, President and Chief Executive Officer of Brown & Brown, Inc., noted, "In 2009 we faced three strong headwinds -- decreasing insurance rates, adverse economic conditions, and a soft merger and acquisition environment. Yet, in spite of these challenges, we became more efficient, added exceptional new talent and maintained the quality of service our clients expect and deserve."

Jim W. Henderson, Vice Chairman and Chief Operating Officer of the Company, added, "Since December 31, we have closed three deals that together represent $10.5 million of forward annualized revenues. In recent months, we have experienced an increase in merger and acquisition deal flow and we are encouraged by the quality of the opportunities and the depth of discussions. This is a great time in the market cycle to put our cash to work for our shareholders through investment in quality 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, 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
                     (in thousands, except per share data)
                                 (unaudited)


                                      For the Three       For the Twelve
                                       Months Ended        Months Ended
                                       December 31         December 31
                                    ------------------- -------------------
                                      2009      2008      2009      2008
                                    --------- --------- --------- ---------
REVENUES
Commissions and fees                $ 213,288 $ 229,854 $ 964,863 $ 965,983
Investment income                         216       943     1,161     6,079
Other income, net                         658     1,293     1,853     5,492
                                    --------- --------- --------- ---------
    Total revenues                    214,162   232,090   967,877   977,554
                                    --------- --------- --------- ---------

EXPENSES
Employee compensation and benefits    115,107   121,910   484,680   485,783
Non-cash stock-based compensation       2,115     1,751     7,358     7,314
Other operating expenses               36,382    35,359   143,389   137,352
Amortization                           12,485    11,842    49,857    46,631
Depreciation                            3,285     3,357    13,240    13,286
Interest                                3,711     3,645    14,599    14,690
                                    --------- --------- --------- ---------
    Total expenses                    173,085   177,864   713,123   705,056
                                    --------- --------- --------- ---------

Income before income taxes             41,077    54,226   254,754   272,498

Income taxes                           17,424    20,853   101,460   106,374
                                    --------- --------- --------- ---------

Net income                          $  23,653 $  33,373 $ 153,294 $ 166,124
                                    ========= ========= ========= =========

Net income per share:
  Basic                             $    0.17 $    0.24 $    1.08 $    1.18
                                    ========= ========= ========= =========
  Diluted                           $    0.17 $    0.24 $    1.08 $    1.17
                                    ========= ========= ========= =========

Weighted average number of shares
 outstanding:
  Basic                               137,531   136,799   137,173   136,319
                                    ========= ========= ========= =========
  Diluted                             137,779   137,274   137,507   136,884
                                    ========= ========= ========= =========

Dividends declared per share        $  0.0775 $  0.0750 $  0.3025 $  0.2850
                                    ========= ========= ========= =========




                              Brown & Brown, Inc.
                           INTERNAL GROWTH SCHEDULE
                          Core Commissions and Fees(1)
                     Three Months Ended December 31, 2009
                                (in thousands)
                                  (unaudited)



                                        Total                      Internal
           Quarter  Quarter   Total      Net     Less    Internal    Net
            Ended    Ended     Net     Growth Acquisition  Net     Growth
           12/31/09 12/31/08  Change      %     Revenues Growth $     %
           -------- -------- --------  -------  -------- --------  ------

Florida
 Retail    $ 36,687 $ 40,922 $ (4,235)  (10.3)% $      - $ (4,235)  (10.3)%
National
 Retail      72,040   72,772     (732)   (1.0)%    4,531   (5,263)   (7.2)%
Western
 Retail      22,670   24,606   (1,936)   (7.9)%    1,544   (3,480)  (14.1)%
           -------- -------- --------           -------- --------

Total
 Retail     131,397  138,300   (6,903)   (5.0)%    6,075  (12,978)   (9.4)%
           -------- -------- --------           -------- --------

Wholesale
 Brokerage   31,410   32,156     (746)   (2.3)%      243     (989)   (3.1)%

Professional
 Programs    12,034   12,719     (685)   (5.4)%        -     (685)   (5.4)%
Special
 Programs    29,914   33,188   (3,274)   (9.9)%      513   (3,787)  (11.4)%
           -------- -------- --------           -------- --------
Total
 National
 Programs    41,948   45,907   (3,959)   (8.6)%      513   (4,472)   (9.7)%
           -------- -------- --------           -------- --------

Services      8,049    8,305     (256)   (3.1)%        -     (256)   (3.1)%
           -------- -------- --------           -------- --------

Total Core
 Commissions
 and
 Fees(1)   $212,804 $224,668 $(11,864)   (5.3)% $  6,831 $(18,695)   (8.3)%
           ======== ======== ========           ======== ========




             Reconciliation of Internal Growth Schedule
                   to Total Commissions and Fees
         Included in the Consolidated Statements of Income
       for the Three Months Ended December 31, 2009 and 2008
                          (in thousands)
                            (unaudited)


                                              Quarter   Quarter
                                                Ended     Ended
                                              12/31/09  12/31/08
                                              --------- ---------
 Total core commissions and fees(1)           $ 212,804 $ 224,668
 Contingent commissions                             484     4,930
 Divested business                                    -       256
                                              --------- ---------

 Total commission & fees                      $ 213,288 $ 229,854
                                              ========= =========

(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)


                                                December 31,  December 31,
                                                    2009          2008
                                                ------------- -------------
ASSETS
Current assets:
  Cash and cash equivalents                     $     197,113 $      78,557
  Restricted cash and investments                     155,257       144,750
  Short-term investments                                8,213         7,511
  Premiums, commissions and fees receivable           209,462       244,515
  Deferred income taxes                                11,791        14,171
  Other current assets                                 31,863        33,528
                                                ------------- -------------
    Total current assets                              613,699       523,032

Fixed assets, net                                      61,467        63,520
Goodwill                                            1,074,397     1,023,372
Amortizable intangible assets, net                    468,862       495,627
Other assets                                            5,801        14,029
                                                ------------- -------------
    Total assets                                $   2,224,226 $   2,119,580
                                                ============= =============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Premiums payable to insurance companies       $     310,296 $     357,707
  Premium deposits and credits due customers           37,715        43,577
  Accounts payable                                     17,431        18,872
  Accrued expenses and other liabilities               96,387        96,325
  Current portion of long-term debt                    17,124         6,162
                                                ------------- -------------
    Total current liabilities                         478,953       522,643

Long-term debt                                        250,209       253,616

Deferred income taxes, net                            115,609        90,143

Other liabilities                                       9,581        11,437

Shareholders' equity:
  Common stock, par value $0.10 per share;
   authorized 280,000 shares; issued and
   outstanding 142,076 at 2009 and 141,544
   at 2008                                             14,208        14,154
  Additional paid-in capital                          267,856       250,167
  Retained earnings                                 1,087,805       977,407
  Accumulated other comprehensive income                    5            13
                                                ------------- -------------

    Total shareholders' equity                      1,369,874     1,241,741
                                                ------------- -------------

    Total liabilities and shareholders' equity  $   2,224,226 $   2,119,580
                                                ============= =============

Contact Information

  • Cory T. Walker
    Chief Financial Officer
    (386) 239-7250