SOURCE: Brown & Brown, Inc.

Brown & Brown, Inc.

October 14, 2013 16:30 ET

Brown & Brown, Inc. Announces a 14.7% Increase in Earnings per Share

DAYTONA BEACH, FL and TAMPA, FL--(Marketwired - Oct 14, 2013) - Brown & Brown, Inc. (NYSE: BRO) today announced its preliminary, unaudited financial results for the third quarter of 2013.

Net income for the third quarter of 2013 was $57,749,000, or $0.39 per share, compared with $49,504,000, or $0.34 per share for the same quarter of 2012, an increase of 14.7%. Total revenue for the third quarter was $359,310,000, compared with 2012 third-quarter revenue of $303,800,000, an increase of 18.3%.

Total revenue for the nine months ended September 30, 2013 was $1,020,114,000, compared with total revenue for the same period of 2012 of $897,202,000, an increase of 13.7%. Net income for the nine-month period ended September 30, 2013 was $169,887,000, or $1.16 per share, compared with $141,408,000, or $0.97 per share for the same period of 2012, an increase of 19.6%.

J. Powell Brown, President and Chief Executive Officer of the Company, noted, "The third quarter wrapped up with $0.39 earnings per share, however one-time, non-recurring acquisition-related expenses accounted for $0.01 per share. Additionally, all four of our business divisions enjoyed strong quarterly organic revenue growth rates, most notably our Wholesale Brokerage Division, with a growth rate of 15.8%."

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 the Company's anticipated financial results for the third quarter of 2013. 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 third quarter of 2013 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, 2012, and the Company's other subsequent 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
September 30,
  For the
Nine Months Ended
September 30,
 
    2013     2012   2013   2012  
REVENUES                            
Commissions and fees   $ 358,196     $ 302,310   $ 1,016,139   $ 888,785  
Investment income     85       239     510     561  
Other income, net     1,029       1,251     3,465     7,856  
  Total revenues     359,310       303,800     1,020,114     897,202  
                             
EXPENSES                            
Employee compensation and benefits     180,528       149,691     503,540     450,039  
Non-cash stock-based compensation     7,431       3,908     14,904     11,393  
Other operating expenses     50,102       43,774     143,838     129,394  
Amortization     17,858       15,956     50,140     47,450  
Depreciation     4,466       3,958     12,896     11,383  
Interest     4,135       4,006     12,116     12,093  
Change in estimated acquisition earn-out payables     (665 )     858     1,513     (134 )
  Total expenses     263,855       222,151     738,947     661,618  
                             
Income before income taxes     95,455       81,649     281,167     235,584  
                             
Income taxes     37,706       32,145     111,280     94,176  
                             
Net income   $ 57,749     $ 49,504   $ 169,887   $ 141,408  
                             
Net income per share:                            
  Basic   $ 0.40     $ 0.34   $ 1.18   $ 0.99  
  Diluted   $ 0.39     $ 0.34   $ 1.16   $ 0.97  
                             
Weighted average number of shares outstanding:                            
  Basic     141,139       139,465     140,925     139,185  
  Diluted     142,789       142,097     142,476     141,769  
                             
Dividends declared per share   $ 0.0900     $ 0.0850   $ 0.2700   $ 0.2550  
                             
                             
                             
Brown & Brown, Inc.  
INTERNAL GROWTH SCHEDULE  
Core Organic Commissions and Fees(1)  
Three Months Ended September 30, 2013  
(in thousands)  
(unaudited)  
   
    Quarter
Ended
09/30/13
  Quarter
Ended
09/30/12
  Total
Net
Change
  Total
Net
Growth %
    Less
Acquisition
Revenues
  Internal
Net
Growth $
  Internal
Net
Growth %
 
                                 
Retail(2)   $ 187,043   $ 152,109   $ 34,934   23.0 %   $ 31,078   $ 3,856   2.5 %
                                           
National Programs     73,678     62,406     11,272   18.1 %     2,522     8,750   14.0 %
                                           
Wholesale Brokerage     51,234     43,200     8,034   18.6 %     1,193     6,841   15.8 %
                                           
Services     29,884     28,566     1,318   4.6 %     -     1,318   4.6 %
                                           
Total Core Commissions and Fees (1)   $
341,839
  $
286,281
  $
55,558
 
19.4
%   $
34,793
  $
20,765
 
7.3
%
                                           
                                           
                                           
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
For the Three Months Ended September 30, 2013 and 2012
(in thousands)
(unaudited)
 
    Quarter
Ended
09/30/13
  Quarter
Ended
09/30/12
Total core commissions and fees(1)   $ 341,839   $ 286,281
Profit-sharing contingent commissions     13,951     12,077
Guaranteed supplemental commissions     2,406     2,359
Divested business     -     1,593
             
Total commissions & fees   $ 358,196   $ 302,310
             

(1) Total core 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)
         
    September 30,   December 31,
    2013   2012
ASSETS            
Current assets:            
  Cash and cash equivalents   $ 170,965   $ 219,821
  Restricted cash and investments     247,315     164,564
  Short-term investments     11,693     8,183
  Premiums, commissions and fees receivable     314,634     302,725
  Deferred income taxes     21,268     24,408
  Other current assets     26,802     39,811
    Total current assets     792,677     759,512
             
Fixed assets, net     74,482     74,337
Goodwill     1,990,940     1,711,514
Amortizable intangible assets, net     625,298     566,538
Other assets     20,320     16,157
    Total assets   $ 3,503,717   $ 3,128,058
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
Current liabilities:            
  Premiums payable to insurance companies   $ 466,773   $ 406,704
  Premium deposits and credits due customers     57,331     32,867
  Accounts payable     42,460     48,524
  Accrued expenses and other liabilities     144,154     79,593
  Current portion of long-term debt     100,000     93
    Total current liabilities     810,718     567,781
             
Long-term debt     380,000     450,000
             
Deferred income taxes, net     284,257     237,630
             
Other liabilities     63,958     65,314
             
Shareholders' equity:            
  Common stock, par value $0.10 per share; authorized 280,000 shares; issued and outstanding 145,441 at 2013 and 143,878 at 2012     14,544    
14,388
  Additional paid-in capital     362,293     335,872
  Retained earnings     1,587,947     1,457,073
    Total shareholders' equity     1,964,784     1,807,333
               
    Total liabilities and shareholders' equity   $ 3,503,717   $ 3,128,058

Contact Information

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