SOURCE: Brown & Brown, Inc.

Brown & Brown, Inc.

October 18, 2010 17:06 ET

Brown & Brown, Inc. Announces an 8.1% Increase in Third-Quarter Net Income

DAYTONA BEACH, FL and TAMPA, FL--(Marketwire - October 18, 2010) - Brown & Brown, Inc. (NYSE: BRO) today announced that it earned net income for the third quarter of 2010 of $44,293,000, or $0.31 per share, an increase of 8.1% from the $40,961,000, or $0.29 per share, reported for the quarter ended September 30, 2009. Total revenue for the quarter ended September 30, 2010 was $247,616,000, compared with 2009 third-quarter revenue of $243,766,000.

Total revenue for the nine months ended September 30, 2010 was $743,554,000, compared with total revenue for the first nine months of 2009 of $753,715,000. Net income for the nine-month period ended September 30, 2010 was $129,606,000, or $0.90 per share, compared with $129,641,000, or $0.91 per share for the same period of 2009.

J. Powell Brown, President and Chief Executive Officer of Brown & Brown, Inc., noted, "Our team continues to work against the headwinds of rate declines and exposure unit decreases. The economy continues to present challenges and opportunities for Brown & Brown. Additionally, we are extremely pleased with the new team members that have joined us in the third quarter through strategic acquisitions."

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; 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
                    --------------------------- ---------------------------
                        2010          2009          2010           2009
                    ------------- ------------- ------------  -------------
REVENUES
Commissions and
 fees               $     246,102 $     243,016 $    737,829  $     751,575
Investment income             345           175        1,022            945
Other income
 (loss), net                1,169           575        4,703          1,195
                    ------------- ------------- ------------  -------------
  Total revenues          247,616       243,766      743,554        753,715
                    ------------- ------------- ------------  -------------

EXPENSES
Employee compensation
 and benefits             122,001       119,607      365,556        369,573
Non-cash stock-based
 compensation               1,495         1,732        5,230          5,243
Other operating
 expenses                  31,301        35,523      101,256        107,007
Amortization               12,869        12,468       38,072         37,372
Depreciation                3,116         3,323        9,498          9,955
Interest                    3,607         3,622       10,847         10,888
Change in estimated
 acquisition earn-out
 payables                     193             -       (1,036)             -
                    ------------- ------------- ------------  -------------
  Total expenses          174,582       176,275      529,423        540,038
                    ------------- ------------- ------------  -------------

Income before
 income taxes              73,034        67,491      214,131        213,677

Income taxes               28,741        26,530       84,525         84,036
                    ------------- ------------- ------------  -------------

Net income          $      44,293 $      40,961 $    129,606  $     129,641
                    ============= ============= ============  =============

Net income per share:
  Basic             $        0.31 $        0.29 $       0.91  $        0.92
                    ============= ============= ============  =============
  Diluted           $        0.31 $        0.29 $       0.90  $        0.91
                    ============= ============= ============  =============

Weighted average
 number of shares
 outstanding:
  Basic                   138,093       137,279      137,802        137,052
                    ============= ============= ============  =============
  Diluted                 139,507       137,671      139,128        137,403
                    ============= ============= ============  =============

Dividends declared
 per share          $      0.0775 $      0.0750 $     0.2325  $      0.2250
                    ============= ============= ============  =============





                               Brown & Brown, Inc.
                            INTERNAL GROWTH SCHEDULE
                          Core Commissions and Fees(1)
                     Three Months Ended September 30, 2010
                                 (in thousands)
                                   (unaudited)


                                       Total             Internal  Internal
              Quarter  Quarter  Total   Net        Less     Net      Net
               Ended    Ended    Net   Growth  Acquisition Growth   Growth
              9/30/10  9/30/09  Change    %       Revenues    $        %
              -------- -------- ------  ------    ------- --------  -----

Florida
 Retail       $ 34,035 $ 34,925 $ (890)   (2.5)%  $    24 $   (914)  (2.6)%
National
 Retail         81,743   80,822    921     1.1 %    5,089   (4,168)  (5.2)%
Western
 Retail         25,656   26,128   (472)   (1.8)%    1,585   (2,057)  (7.9)%
              -------- -------- ------            ------- --------
  Total
   Retail      141,434  141,875   (441)   (0.3)%    6,698   (7,139)  (5.0)%
              -------- -------- ------            ------- --------

Wholesale
 Brokerage      34,135   34,809   (674)   (1.9)%      182     (856)  (2.5)%

Professional
 Programs       11,675   12,632   (957)   (7.6)%        -     (957)  (7.6)%
Special
 Programs       37,555   34,583  2,972     8.6 %        -    2,972    8.6 %
              -------- -------- ------            ------- --------
  Total
   National
   Programs     49,230   47,215  2,015     4.3 %        -    2,015    4.3 %
              -------- -------- ------            ------- --------

Services        11,636    8,296  3,340    40.3 %    3,401      (61)  (0.7)%
              -------- -------- ------            ------- --------

Total Core
 Commissions
 and Fees
 (1)          $236,435 $232,195 $4,240     1.8 %  $10,281  $(6,041)  (2.6)%
              ======== ======== ======            ======= ========





                   Reconciliation of Internal Growth Schedule
                          to Total Commissions and Fees
               Included in the Consolidated Statements of Income
             for the Three Months Ended September 30, 2010 and 2009
                                 (in thousands)
                                   (unaudited)

                                                      Quarter     Quarter
                                                       Ended       Ended
                                                      9/30/10     9/30/09
                                                    ----------- -----------
    Total core commissions and fees(1)              $   236,435 $   232,195
    Contingent commissions                                9,667      10,421
    Divested business                                         -         400
                                                    ----------- -----------

    Total commission & fees                         $   246,102 $   243,016
                                                    =========== ===========

(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,
                                                      2010         2009
                                                  ------------ ------------
ASSETS
Current assets:
  Cash and cash equivalents                       $    257,151 $    197,113
  Restricted cash and investments                      161,318      155,257
  Short-term investments                                 7,669        8,213
  Premiums, commissions and fees receivable            224,299      209,462
  Deferred income taxes                                      -       11,791
  Other current assets                                  19,284       31,863
                                                  ------------ ------------
    Total current assets                               669,721      613,699

Fixed assets, net                                       59,721       61,467
Goodwill                                             1,167,199    1,074,397
Amortizable intangible assets, net                     478,985      468,862
Other assets                                            12,185        5,801
                                                  ------------ ------------
    Total assets                                  $  2,387,811 $  2,224,226
                                                  ============ ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Premiums payable to insurance companies         $    325,903 $    310,296
  Premium deposits and credits due customers            57,805       37,715
  Accounts payable                                      21,303       17,431
  Accrued expenses and other liabilities                87,626       96,387
  Current portion of long-term debt                    101,689       17,124
                                                  ------------ ------------
    Total current liabilities                          594,326      478,953

Long-term debt                                         150,067      250,209

Deferred income taxes, net                             130,905      115,609

Other liabilities                                       31,151        9,581

Shareholders' equity:
  Common stock, par value $0.10 per share;
   authorized 280,000 shares;  issued and
   outstanding 142,643 at 2010 and 142,076 at
   2009                                                 14,264       14,208
  Additional paid-in capital                           282,765      267,856
  Retained earnings                                  1,184,328    1,087,805
  Accumulated other comprehensive income                     5            5
                                                  ------------ ------------

    Total shareholders' equity                       1,481,362    1,369,874
                                                  ------------ ------------

    Total liabilities and shareholders' equity    $  2,387,811 $  2,224,226
                                                  ============ ============

Contact Information

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