SOURCE: Brown & Brown, Inc.

Brown & Brown, Inc.

April 18, 2011 17:55 ET

Brown & Brown, Inc. Announces 4.9% Increase in First-Quarter Net Income

DAYTONA BEACH, FL and TAMPA, FL--(Marketwire - Apr 18, 2011) - Brown & Brown, Inc. (NYSE: BRO) today announced its financial results for the first quarter of 2011.

Net income for the first quarter of 2011 was $46,293,000, or $0.32 per share, compared with $44,128,000, or $0.31 per share for the same quarter of 2010, an increase of 4.9%. Total revenue for the first quarter ended March 31, 2011 was $262,228,000, compared with 2010 first-quarter revenue of $252,273,000, and increase of 3.9%.

J. Powell Brown, President and Chief Executive Officer of Brown & Brown, Inc., noted, "We are pleased with the continued incremental improvement in our operating results. Many of our middle-market clients continue to experience pressure on their businesses, with the consequence that their revenues and payrolls are flat to slightly down. Yet our team continues to deliver for our clients, as evidenced by our Wholesale Brokerage Division's positive first-quarter performance."

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' seventh 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; and 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. 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, 2011 and 2010
(in thousands, except per share data)
(unaudited)
20112010
REVENUES
Commissions and fees$261,452$250,674
Investment income224331
Other income, net 5521,268
Total revenues262,228252,273
EXPENSES
Employee compensation and benefits126,557122,183
Non-cash stock-based compensation2,7731,955
Other operating expenses36,07636,333
Amortization13,50912,553
Depreciation3,1353,253
Interest3,6073,608
Change in estimated acquisition earn-out payables(99)(696)
Total expenses185,558179,189
Income before income taxes76,67073,084
Income taxes30,37728,956
Net income$46,293$44,128
Net income per share:
Basic$0.32$0.31
Diluted$0.32$0.31
Weighted average number of shares outstanding:
Basic138,351137,623
Diluted140,648137,791
Dividends declared per share$0.0800$0.0775
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Commissions and Fees(1)
Three Months Ended March 31, 2011
(in thousands)
(unaudited)
Quarter
Ended
03/31/11
Quarter
Ended
03/31/10
Total
Net
Change
Total
Net
Growth %
Less
Acquisition
Revenues
Internal
Net
Growth $
Internal
Net
Growth %
Florida Retail$38,626$37,778$8482.2%$1,779$(931)(2.5)%
National Retail82,22377,3244,8996.3%7,422(2,523)(3.3)%
Western Retail24,65821,9582,70012.3%3,360(660)(3.0)%
Total Retail145,507137,0608,4476.2%12,561(4,114)(3.0)%
Professional Programs9,5239,826(303)(3.1)%-(303)(3.1)%
Special Programs27,66328,542(879)(3.1)%-(879)(3.1)%
Total National Programs37,18638,368(1,182)(3.1)%-(1,182)(3.1)%
Wholesale Brokerage34,05633,7233331.0%-3331.0%
Services15,8238,9966,82775.9%6,856(29)(0.3)%
Total Core Commissions and Fees(1)$
232,572
$
218,147
$
14,425

6.6
%$
19,417
$
(4,992
)
(2.3
)%
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
For the Three Months Ended March 31, 2011 and 2010
(in thousands)
(unaudited)
Quarter
Ended
03/31/11
Quarter
Ended
03/31/10
Total core commissions and fees(1)$232,572$218,147
Contingent commissions28,88032,236
Divested business-291
Total commission & fees$261,452$250,674
(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, 2011December 31, 2010
ASSETS
Current assets:
Cash and cash equivalents$265,682$272,984
Restricted cash and investments115,635123,594
Short-term investments7,4817,678
Premiums, commissions and fees receivable232,688214,446
Deferred income taxes8,23520,076
Other current assets25,24214,031
Total current assets654,963652,809
Fixed assets, net59,57459,713
Goodwill1,225,3571,194,827
Amortizable intangible assets, net485,530481,900
Other assets18,57211,565
Total assets$2,443,996$2,400,814
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Premiums payable to insurance companies$330,745$311,346
Premium deposits and credits due customers31,55528,509
Accounts payable31,62733,693
Accrued expenses and other liabilities64,70994,947
Current portion of long-term debt1,2121,662
Total current liabilities459,848470,157
Long-term debt250,067250,067
Deferred income taxes, net153,160146,482
Other liabilities36,50927,764
Shareholders' equity:
Common stock, par value $0.10 per share; authorized 280,000 shares; issued and outstanding 142,548 at 2011 and 142,795 at 2010

14,255


14,279
Additional paid-in capital290,197286,997
Retained earnings1,239,9541,205,061
Accumulated other comprehensive income67
Total shareholders' equity1,544,4121,506,344
Total liabilities and shareholders' equity$2,443,996$2,400,814

Contact Information

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