SOURCE: Brown & Brown, Inc.

Brown & Brown, Inc.

July 16, 2012 16:33 ET

Brown & Brown, Inc. Announces 17.9% Increase in Total Revenues

DAYTONA BEACH, FL and TAMPA, FL--(Marketwire - Jul 16, 2012) - Brown & Brown, Inc. (NYSE: BRO) today announced its preliminary, unaudited financial results for the second quarter of 2012. 

Net income for the second quarter of 2012 was $42,471,000, or $0.29 per share, compared with $37,035,000, or $0.26 per share for the same quarter of 2011, an increase of 11.5%. Total revenue for the second quarter was $290,916,000, compared with 2011 second-quarter revenue of $246,816,000, an increase of 17.9%. 

Total revenue for the six months ended June 30, 2012 was $593,402,000, compared with total revenue for the same period of 2011 of $509,044,000, an increase of 16.6%. Net income for the six-month period ended June 30, 2012 was $91,904,000, or $0.63 per share, compared with $83,328,000, or $0.57 per share for the same period of 2011, an increase of 10.5%.

J. Powell Brown, President and Chief Executive Officer of the Company, noted, "We are pleased with our continued incremental revenue growth and the fact that each of our four business divisions reported positive organic growth in the second quarter of 2012."

Brown & Brown, Inc., through its subsidiaries, offers a broad range of insurance and reinsurance products and services. Additionally, certain Brown & Brown subsidiaries offer a variety of risk management, third party administration, and other services. Serving 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 the Company's anticipated financial results for the second quarter of 2012. 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. These risks and uncertainties include, but are not limited to, the Company's determination as it finalizes its financial results for the second quarter of 2012 that its financial results differ from the current preliminary unaudited numbers set forth herein, other factors that the Company may not have currently identified or quantified, and other risks, relevant factors and uncertainties identified in the Company's Annual Report on Form 10-K for the year ended December 31, 2011, and the Company's other filings with the Securities and Exchange Commission. 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 Months Ended
June 30,
  For the
Six Months Ended
June 30,
    2012     2011   2012     2011
REVENUES                            
Commissions and fees   $ 289,942     $ 245,983   $ 586,475     $ 507,435
Investment income     187       393     322       617
Other income, net     787       440     6,605       992
    Total revenues     290,916       246,816     593,402       509,044
                             
EXPENSES                            
Employee compensation and benefits     150,752       125,852     300,348       252,409
Non-cash stock-based compensation     3,738       2,709     7,485       5,482
Other operating expenses     42,220       34,979     85,620       71,055
Amortization     15,881       13,556     31,494       27,065
Depreciation     3,784       3,079     7,425       6,214
Interest     4,000       3,608     8,087       7,215
Change in estimated acquisition earn-out payables    
(604
)    
1,565
    (992 )     1,466
    Total expenses     219,771       185,348     439,467       370,906
                             
Income before income taxes     71,145       61,468     153,935       138,138
                             
Income taxes     28,674       24,433     62,031       54,810
                             
Net income   $ 42,471     $ 37,035   $ 91,904     $ 83,328
                             
Net income per share:                            
  Basic   $ 0.30     $ 0.26   $ 0.64     $ 0.58
  Diluted   $ 0.29     $ 0.26   $ 0.63     $ 0.57
                             
Weighted average number of shares outstanding:                            
  Basic     139,086       138,379     139,044       138,365
  Diluted     141,828       139,942     141,664       140,950
                             
Dividends declared per share   $ 0.085     $ 0.08   $ 0.17     $ 0.16
                             
                             
                             
Brown & Brown, Inc.  
INTERNAL GROWTH SCHEDULE  
Core Organic Commissions and Fees(1)  
Three Months Ended June 30, 2012  
(in thousands)  
(unaudited)  
   
   
    Quarter
Ended
06/30/12
  Quarter
Ended
06/30/11
  Total
Net
Change
Total
Net
Growth %
    Less
Acquisition
Revenues
  Internal
Net
Growth $
  Internal
Net
Growth %
 
                                         
Retail(2)   $ 159,684   $ 147,826   $ 11,858 8.0 %   $ 11,431   $ 427   0.3 %
                                         
National Programs     53,135     31,424     21,711 69.1 %     19,464     2,247   7.2 %
                                         
Wholesale Brokerage     46,301     42,493     3,808 9.0 %     443     3,365   7.9 %
                                         
Services     27,521     16,120     11,401 70.7 %     9,772     1,629   10.1 %
                                         
Total Core Commissions and Fees (1)   $
286,641
  $
237,863
  $
48,778

20.5
%   $
41,110
  $
7,668
 
3.2
%
                                         
                                         
                                         
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
For the Three Months Ended June 30, 2012 and 2011
(in thousands)
(unaudited)
 
 
    Quarter
Ended
06/30/12
  Quarter
Ended
06/30/11
Total core commissions and fees(1)   $ 286,641   $ 237,863
Profit-sharing contingent commissions     1,043     2,275
Guaranteed supplemental commissions     2,258     2,856
Divested business     -     2,989
             
Total commissions & fees   $ 289,942   $ 245,983
             
(1) Total core organic commissions and fees are our total commissions and fees less (i) profit-sharing contingent commissions (revenues 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), (ii) guaranteed supplemental commissions (GSC) (revenues derived from special revenue-sharing commissions from insurance companies based solely upon the volume of the business placed with such companies during the current year),and (iii) divested business (commissions and fees generated from offices, books of business or niches sold by the Company or terminated).
 
(2) The Retail segment includes commissions and fees reported in the "Other" column of the Segment Information, which includes corporate and consolidation items.
 
 
 
Brown & Brown, Inc.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
 
 
    June 30,   December 31,
    2012   2011
ASSETS            
Current assets:            
  Cash and cash equivalents   $ 193,712   $ 286,305
  Restricted cash and investments     192,540     130,535
  Short-term investments     7,729     7,627
  Premiums, commissions and fees receivable     295,758     240,257
  Deferred income taxes     16,281     19,863
  Other current assets     45,018     23,540
    Total current assets     751,038     708,127
             
Fixed assets, net     70,986     61,360
Goodwill     1,674,903     1,323,469
Amortizable intangible assets, net     577,203     496,182
Other assets     23,161     17,873
    Total assets   $ 3,097,291   $ 2,607,011
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
Current liabilities:            
  Premiums payable to insurance companies   $ 461,022   $ 327,096
  Premium deposits and credits due customers     29,246     30,048
  Accounts payable     55,802     22,384
  Accrued expenses and other liabilities     94,546     100,865
  Current portion of long-term debt     663     1,227
    Total current liabilities     641,279     481,620
             
Long-term debt     450,033     250,033
             
Deferred income taxes, net     222,773     178,052
             
Other liabilities     64,959     53,343
             
Shareholders' equity:            
  Common stock, par value $0.10 per share; authorized 280,000 shares; issued and outstanding 143,281 at 2012 and 143,352 at 2011    

14,328
   

14,335
  Additional paid-in capital     313,810     307,059
  Retained earnings     1,390,109     1,322,562
  Accumulated other comprehensive income     -     7
             
    Total shareholders' equity     1,718,247     1,643,963
             
    Total liabilities and shareholders' equity   $ 3,097,291   $ 2,607,011
             

Contact Information

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