SOURCE: Brown & Brown, Inc.

Brown & Brown, Inc.

April 20, 2009 16:32 ET

Brown & Brown, Inc. Announces a 4.1% Increase in Commissions and Fees Revenues

DAYTONA BEACH, FL and TAMPA, FL--(Marketwire - April 20, 2009) - Brown & Brown, Inc. (NYSE: BRO) today announced its net income and net income per share for the first quarter of 2009. Additionally, it announced that its commissions and fees revenues for the first quarter of 2009 increased 4.1% over the first quarter of 2008.

Net income for the first quarter of 2009 was $48,012,000, or $0.34 per share, compared with $51,760,000, or $0.37 per share for the same quarter of 2008.

Total revenues for the quarter ended March 31, 2009 were $263,580,000, compared with $256,715,000 recorded in the corresponding quarter of 2008, an increase of 2.7%.

J. Powell Brown, President of Brown & Brown, Inc., noted, "We are pleased to be delivering innovative and very cost effective insurance products and services to our new and existing customers, as well as generating industry-leading margins. Our first-quarter results reflect a continued slowdown in the economy, which has caused significant decreases in insurance exposure units. These results also demonstrate the effect of the very competitive insurance rate environment for property and casualty insurance that has prevailed over the last few years."

Jim W. Henderson, Vice Chairman and Chief Operating Officer of the Company, added, "Our acquisition activity remains active and promising. For the year, we have closed on four deals representing a total of approximately $12.5 million in forward annualized revenues. We remain conservative in our pricing and insistent on sustainable earnings. Substantially all of our acquisitions are funded by our robust internal cash flows."

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' 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 recent 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, 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, 2009 and 2008
               (in thousands, except per share data)
                          (unaudited)



                                                         2009       2008
                                                      ---------  ----------

REVENUES
Commissions and fees                                  $ 263,964  $  253,528
Investment income                                           310       1,999
Other (loss) income, net                                   (694)      1,188
                                                      ---------  ----------
     Total revenues                                     263,580     256,715
                                                      ---------  ----------

EXPENSES
Employee compensation and benefits                      127,341     121,187
Non-cash stock-based compensation                         1,816       1,944
Other operating expenses                                 35,864      31,204
Amortization                                             12,385      11,116
Depreciation                                              3,333       3,246
Interest                                                  3,634       3,434
                                                      ---------  ----------
     Total expenses                                     184,373     172,131
                                                      ---------  ----------

Income before income taxes                               79,207      84,584

Income taxes                                             31,195      32,824
                                                      ---------  ----------

Net income                                            $  48,012  $   51,760
                                                      =========  ==========

Net income per share:
  Basic                                               $    0.34  $     0.37
                                                      =========  ==========
  Diluted                                             $    0.34  $     0.37
                                                      =========  ==========

Weighted average number of shares outstanding:
  Basic                                                 141,558     140,704
                                                      =========  ==========
  Diluted                                               141,843     141,327
                                                      =========  ==========

Dividends declared per share                          $   0.075  $    0.070
                                                      =========  ==========





                             Brown & Brown, Inc.
                          INTERNAL GROWTH SCHEDULE
                        Core Commissions and Fees(1)
                      Three Months Ended March 31, 2009
                               (in thousands)
                                (unaudited)



                                          Total           Internal Internal
               Quarter  Quarter   Total    Net      Less    Net     Net
                Ended    Ended     Net  Growth Acquisition Growth  Growth
               3/31/09  3/31/08  Change     %     Revenues   $        %
               -------- -------- -------  -----   ------- -------  ------

Florida Retail $ 40,131 $ 41,227 $(1,096)  (2.7)% $ 3,667 $(4,763)  (11.6)%
National
 Retail          77,527   70,156   7,371   10.5%   11,443  (4,072)   (5.8)%
Western Retail   25,293   21,087   4,206   19.9%    7,566  (3,360)  (15.9)%
               -------- -------- -------          ------- -------
  Total Retail  142,951  132,470  10,481    7.9%   22,676 (12,195)   (9.2)%
               -------- -------- -------          ------- -------

Wholesale
 Brokerage       34,462   36,878  (2,416)  (6.6)%     718  (3,134)   (8.5)%

Professional
 Programs        10,572   10,245     327    3.2%        -     327     3.2%
Special
 Programs        37,968   27,800  10,168   36.6%        -  10,168    36.6%
               -------- -------- -------          ------- -------
Total National
 Programs        48,540   38,045  10,495   27.6%        -  10,495    27.6%
               -------- -------- -------          ------- -------

Services          8,085    7,933     152    1.9%        -     152     1.9%
               -------- -------- -------          ------- -------

Total Core
 Commissions
 and Fees (1)  $234,038 $215,326 $18,712    8.7%  $23,394 $(4,682)   (2.2)%
               ======== ======== =======          ======= =======




                Reconciliation of Internal Growth Schedule
                     to Total Commissions and Fees
            Included in the Consolidated Statements of Income
            for the Three Months Ended March 31, 2009 and 2008
                            (in thousands)
                              (unaudited)


                                                         Quarter   Quarter
                                                           Ended     Ended
                                                         3/31/09   3/31/08
                                                        --------- ---------
 Total core commissions and fees(1)                     $ 234,038 $ 215,326
 Contingent commissions                                    29,926    36,347
 Divested business                                              -     1,855
                                                        --------- ---------

 Total commission & fees                                $ 263,964 $ 253,528
                                                        ========= =========



(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,
                                                      2009         2008
                                                  -----------  ------------
ASSETS
Current assets:
   Cash and cash equivalents                      $   126,439  $     78,557
   Restricted cash and investments                    140,840       144,750
   Short-term investments                               7,471         7,511
   Premiums, commissions and fees receivable          230,838       244,515
   Deferred income taxes                                    -        14,171
   Other current assets                                26,821        33,528
                                                  -----------  ------------
      Total current assets                            532,409       523,032

Fixed assets, net                                      63,354        63,520
Goodwill                                            1,044,417     1,023,372
Amortizable intangible assets, net                    493,444       495,627
Other assets                                           13,692        14,029
                                                  -----------  ------------
      Total assets                                $ 2,147,316  $  2,119,580
                                                  ===========  ============

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
   Premiums payable to insurance companies        $   367,438  $    357,707
   Premium deposits and credits due customers          45,008        43,577
   Accounts payable                                    31,802        18,872
   Accrued expenses                                    55,797        96,325
   Current portion of long-term debt                    6,526         6,162
                                                  -----------  ------------
      Total current liabilities                       506,571       522,643

Long-term debt                                        251,427       253,616

Deferred income taxes, net                             93,289        90,143

Other liabilities                                      14,596        11,437

Shareholders’ equity:
   Common stock, par value $0.10 per
    share; authorized 280,000 shares; issued
    and outstanding 141,549 at 2009 and 141,544
    at 2008                                            14,155        14,154
   Additional paid-in capital                         252,478       250,167
   Retained earnings                                1,014,801       977,407
   Accumulated other comprehensive income                  (1)           13
                                                  -----------  ------------

      Total shareholders’ equity                    1,281,433     1,241,741
                                                  -----------  ------------

      Total liabilities and shareholders’ equity  $ 2,147,316  $  2,119,580
                                                  ===========  ============

Contact Information

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