SOURCE: Brown & Brown, Inc.

Brown & Brown, Inc.

February 03, 2014 17:04 ET

Brown & Brown, Inc. Announces Company Record Fourth-Quarter Earnings of $47.2 Million and 2013 Net Income Growth of 18.0%

DAYTONA BEACH, FL and TAMPA, FL--(Marketwired - Feb 3, 2014) - Brown & Brown, Inc. (NYSE: BRO) today announced its preliminary, unaudited financial results for the fourth quarter of 2013.

Net income for the fourth quarter of 2013 was $47,225,000, or $0.32 per share, compared with $42,637,000, or $0.29 per share for the same quarter of 2012, an increase of 10.8%. Total revenue for the fourth quarter was $343,165,000, compared with 2012 fourth-quarter revenue of $302,830,000, an increase of 13.3%.

Total revenue for the twelve months ended December 31, 2013 was $1,363,279,000, compared with total revenue for the same period of 2012 of $1,200,032,000, an increase of 13.6%. Net income for the twelve-month period ended December 31, 2013 was $217,112,000, or $1.48 per share, compared with $184,045,000, or $1.26 per share for the same period of 2012, an increase of 18.0%.

J. Powell Brown, President and Chief Executive Officer of the Company, noted, "We are very pleased that we grew our net income 18.0% in 2013. Our Colonial Claims subsidiary, which adjusts flood claims, had core commissions and fees of $1.3 million in the fourth quarter of 2013, but had $7.4 million of core commissions and fees in the fourth quarter of 2012 as a result of the significant flood claims attributable to SuperStorm Sandy. Excluding the impact of Colonial Claims, our core organic commissions and fees in the fourth quarter of 2013 grew by 4.5%.  In addition, we continued to improve certain operating profit margins in the fourth quarter."

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 fourth quarter and full year 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 fourth quarter and full year 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 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
December 31,
  For the
Twelve Months Ended
December 31,
    2013   2012   2013   2012
REVENUES                        
Commissions and fees   $ 339,364   $ 300,296   $ 1,355,503   $ 1,189,081
Investment income     128     236     638     797
Other income, net     3,673     2,298     7,138     10,154
    Total revenues     343,165     302,830     1,363,279     1,200,032
                         
EXPENSES                        
Employee compensation and benefits     179,460     158,467     683,000     608,506
Non-cash stock-based compensation     7,699     4,472     22,603     15,865
Other operating expenses     51,839     44,995     195,677     174,389
Amortization     17,792     16,123     67,932     63,573
Depreciation     4,589     3,990     17,485     15,373
Interest     4,324     4,004     16,440     16,097
Change in estimated acquisition earn-out payables     1,020     1,552     2,533     1,418
    Total expenses     266,723     233,603     1,005,670     895,221
                         
Income before income taxes     76,442     69,227     357,609     304,811
                         
Income taxes     29,217     26,590     140,497     120,766
                         
Net income   $ 47,225   $ 42,637   $ 217,112   $ 184,045
                         
Net income per share:                        
  Basic   $ 0.32   $ 0.30   $ 1.50   $ 1.28
  Diluted   $ 0.32   $ 0.29   $ 1.48   $ 1.26
                         
Weighted average number of shares outstanding:                        
  Basic     141,355     139,681     141,033     139,364
  Diluted     143,036     142,314     142,624     142,010
                         
Dividends declared per share   $ 0.100   $ 0.090   $ 0.3700   $ 0.3450
                         
                         
                         
Brown & Brown, Inc.  
INTERNAL GROWTH SCHEDULE  
Core Organic Commissions and Fees(1)  
Three Months Ended December 31, 2013  
(in thousands)  
(unaudited)  
   
    Quarter
Ended
12/31/13
  Quarter
Ended
12/31/12
  Total
Net
Change
    Total
Net
Growth %
    Less
Acquisition
Revenues
  Internal
Net
Growth $
    Internal
Net
Growth %
 
                                     
Retail(2)   $ 184,996   $ 151,041   $ 33,955     22.5 %   $ 33,625   $ 330     0.2 %
                                               
National Programs     73,528     64,090     9,438     14.7 %     3,094     6,344     9.9 %
                                               
Wholesale Brokerage     46,238     40,299     5,939     14.7 %     -     5,939     14.7 %
                                               
Services     28,273     34,398     (6,125 )   -17.8 %     -     (6,125 )   -17.8 %
                                               
Total Core Commissions and Fees (1)   $
333,035
  $
289,828
  $
43,207
   
14.9
%   $
36,719
  $
6,488
   
2.2
%
                                               
                                               
                                               
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
For the Three Months Ended December 31, 2013 and 2012
(in thousands)
(unaudited)
 
    Quarter
Ended
12/31/13
  Quarter
Ended
12/31/12
Total core commissions and fees(1)   $ 333,035   $ 289,828
Profit-sharing contingent commissions      4,382     6,342
Guaranteed supplemental commissions      1,947      1,937
Divested business     -     2,189
             
Total commissions & fees   $ 339,364   $ 300,296
     
(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)
 
    December 31,   December 31,
    2013   2012
ASSETS            
Current assets:            
  Cash and cash equivalents   $ 202,952   $ 219,821
  Restricted cash and investments     250,009     164,564
  Short-term investments     10,624     8,183
  Premiums, commissions and fees receivable     395,915     302,725
  Deferred income taxes     29,276     24,408
  Other current assets     39,260     39,811
    Total current assets     928,036     759,512
             
Fixed assets, net     74,733     74,337
Goodwill     2,006,173     1,711,514
Amortizable intangible assets, net     618,888     566,538
Other assets     21,678     16,157
    Total assets   $ 3,649,508   $ 3,128,058
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
Current liabilities:            
  Premiums payable to insurance companies   $ 534,360   $ 406,704
  Premium deposits and credits due customers     80,959     32,867
  Accounts payable     34,158     48,524
  Accrued expenses and other liabilities     157,400     79,593
  Current portion of long-term debt     100,000     93
    Total current liabilities     906,877     567,781
             
Long-term debt     380,000     450,000
             
Deferred income taxes, net     291,704     237,630
             
Other liabilities     63,786     65,314
             
Shareholders' equity:            
  Common stock, par value $0.10 per share; authorized 280,000 shares; issued and outstanding 145,419 at 2013 and 143,878 at 2012     14,542     14,388
  Additional paid-in capital     371,960     335,872
  Retained earnings     1,620,639     1,457,073
    Total shareholders' equity     2,007,141     1,807,333
             
    Total liabilities and shareholders' equity   $ 3,649,508   $ 3,128,058

Contact Information

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