SOURCE: Brown & Brown, Inc.

Brown & Brown, Inc.

April 19, 2010 17:37 ET

Brown & Brown, Inc. Announces 2010 First-Quarter Financial Results

DAYTONA BEACH, FL and TAMPA, FL--(Marketwire - April 19, 2010) - 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
                                                ============= =============

Contact Information

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