SOURCE: Brown & Brown, Inc.

Brown & Brown, Inc.

October 19, 2009 17:54 ET

Brown & Brown, Inc. Announces 1% Increase in Net Income

DAYTONA BEACH, FL and TAMPA, FL--(Marketwire - October 19, 2009) - Brown & Brown, Inc. (NYSE: BRO) today announced its net income and net income per share for the third quarter of 2009.

Net income for the third quarter of 2009 was $40,961,000, or $0.29 per share, compared with $40,593,000, or $0.29 per share for the same quarter of 2008. Total revenue for the third quarter ended September 30, 2009 was $243,766,000, compared with 2008 third-quarter revenue of $247,029,000.

Total revenue for the nine months ended September 30, 2009 was $753,715,000, compared with total revenue for the nine months ended September 30, 2008 of $745,464,000. Net income for the nine-month period ended September 30, 2009 was $129,641,000, or $0.91 per share, compared with $132,751,000, or $0.94 per share for the same period of 2008.

J. Powell Brown, President and Chief Executive Officer of Brown & Brown, Inc., noted, "In light of a very challenging operating environment, our team continues to deliver for our clients. Our results are a reflection of significant shrinkage in insurable exposure units and a soft rate environment."

Jim W. Henderson, Vice Chairman and Chief Operating Officer of the Company, added, "The anticipated improvement in economic conditions and the stabilization of the P&C marketplace are factors that we feel will contribute to a more favorable M&A environment going forward. We also hope to see some promising opportunities with respect to employee benefits agencies."

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             For the
                                    Three Months Ended   Nine Months Ended
                                        September 30        September 30
                                    ------------------- -------------------
                                      2009      2008      2009      2008
                                    --------- --------- --------- ---------
REVENUES
Commissions and fees                $ 243,016 $ 243,766 $ 751,575 $ 736,129
Investment income                         175     1,228       945     5,136
Other income, net                         575     2,035     1,195     4,199
                                    --------- --------- --------- ---------
    Total revenues                    243,766   247,029   753,715   745,464
                                    --------- --------- --------- ---------

EXPENSES
Employee compensation and benefits    119,607   122,172   369,573   363,873
Non-cash stock-based compensation       1,732     1,819     5,243     5,563
Other operating expenses               35,523    36,405   107,007   101,993
Amortization                           12,468    12,281    37,372    34,789
Depreciation                            3,323     3,391     9,955     9,929
Interest                                3,622     3,867    10,888    11,045
                                    --------- --------- --------- ---------
     Total expenses                   176,275   179,935   540,038   527,192
                                    --------- --------- --------- ---------

Income before income taxes             67,491    67,094   213,677   218,272

Income taxes                           26,530    26,501    84,036    85,521
                                    --------- --------- --------- ---------

Net income                          $  40,961 $  40,593 $ 129,641 $ 132,751
                                    ========= ========= ========= =========

Net income per share:
  Basic                             $    0.29 $    0.29 $    0.92 $    0.94
                                    ========= ========= ========= =========
  Diluted                           $    0.29 $    0.29 $    0.91 $    0.94
                                    ========= ========= ========= =========

Weighted average number of shares
 outstanding:
  Basic                               137,279   136,409   137,052   136,157
                                    ========= ========= ========= =========
  Diluted                             137,671   136,941   137,403   136,718
                                    ========= ========= ========= =========

Dividends declared per share        $   0.075 $    0.07 $   0.225 $    0.21
                                    ========= ========= ========= =========




                            Brown & Brown, Inc.
                         INTERNAL GROWTH SCHEDULE
                       Core Commissions and Fees(1)
                  Three Months Ended September 30, 2009
                              (in thousands)
                                (unaudited)

                                                  Less
             Quarter  Quarter   Total    Total   Acquis-  Internal Internal
              Ended    Ended     Net      Net     ition     Net      Net
             9/30/09  9/30/08  Change   Growth % Revenues Growth $ Growth %
             -------- -------- -------  -------  -------- -------- -------

Florida
 Retail      $ 35,008 $ 40,025 $(5,017)  (12.5)% $     - $ (5,017)  (12.5)%
National
 Retail        80,962   77,217   3,745     4.8 %   7,394   (3,649)   (4.7)%
Western
 Retail        26,279   26,774    (495)   (1.8)%   2,725   (3,220)  (12.0)%
             -------- -------- -------           ------- --------
  Total
   Retail     142,249  144,016  (1,767)   (1.2)%  10,119  (11,886)   (8.3)%
             -------- -------- -------           ------- --------

Wholesale
 Brokerage     34,809   36,491  (1,682)   (4.6)%     277   (1,959)   (5.4)%

Professional
 Programs      12,451   11,582     869     7.5 %       -      869     7.5 %
Special
 Programs      34,790   33,433   1,357     4.1 %     892      465     1.4 %
             -------- -------- -------           ------- --------
Total
 National
 Programs      47,241   45,015   2,226     4.9 %     892    1,334     3.0 %
             -------- -------- -------           ------- --------

Services        8,296    7,917     379     4.8 %       -      379     4.8 %
             -------- -------- -------           ------- --------

Total Core
 Commissions
 and Fees(1) $232,595 $233,439 $  (844)   (0.4)% $11,288 $(12,132)   (5.2)%
             ======== ======== =======           ======= ========




                Reconciliation of Internal Growth Schedule
                      to Total Commissions and Fees
            Included in the Consolidated Statements of Income
          for the Three Months Ended September 30, 2009 and 2008
                              (in thousands)
                                (unaudited)

                                            Quarter     Quarter
                                             Ended       Ended
                                            9/30/09     9/30/08
                                           ---------   ---------
Total core commissions and fees(1)         $ 232,595   $ 233,439
Contingent commissions                        10,421       9,730
Divested business                                  -         597
                                           ---------   ---------

Total commission & fees                    $ 243,016   $ 243,766
                                           =========   =========


(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)

                                                 September 30, December 31,
                                                      2009         2008
                                                  ------------ ------------
ASSETS
Current assets:
  Cash and cash equivalents                       $    186,247 $     78,557
  Restricted cash and investments                      158,843      144,750
  Short-term investments                                 8,219        7,511
  Premiums, commissions and fees receivable            238,525      244,515
  Deferred income taxes                                      -       14,171
  Other current assets                                  36,487       33,528
                                                  ------------ ------------
    Total current assets                               628,321      523,032

Fixed assets, net                                       62,324       63,520
Goodwill                                             1,063,357    1,023,372
Amortizable intangible assets, net                     477,541      495,627
Other assets                                             6,579       14,029
                                                  ------------ ------------
    Total assets                                  $  2,238,122 $  2,119,580
                                                  ============ ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Premiums payable to insurance companies         $    349,777 $    357,707
  Premium deposits and credits due customers            48,224       43,577
  Accounts payable                                      14,987       18,872
  Accrued expenses                                      83,493       96,325
  Current portion of long-term debt                     11,464        6,162
                                                  ------------ ------------
    Total current liabilities                          507,945      522,643

Long-term debt                                         250,589      253,616

Deferred income taxes, net                             107,996       90,143

Other liabilities                                       16,898       11,437

Shareholders' equity:
  Common stock, par value $0.10 per share;
   authorized 280,000 shares; issued and
   outstanding 142,046 at 2009 and 141,544 at 2008      14,205       14,154
  Additional paid-in capital                           265,324      250,167
  Retained earnings                                  1,075,161      977,407
  Accumulated other comprehensive income                     4           13
                                                  ------------ ------------

    Total shareholders' equity                       1,354,694    1,241,741
                                                  ------------ ------------

    Total liabilities and shareholders' equity    $  2,238,122 $  2,119,580
                                                  ============ ============

Contact Information

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