SOURCE: Brown & Brown, Inc.

Brown & Brown, Inc.

February 01, 2013 16:15 ET

Brown & Brown, Inc. Announces Record Fourth-Quarter Earnings of $42.6 Million

DAYTONA BEACH, FL and TAMPA, FL--(Marketwire - Feb 1, 2013) -   Brown & Brown, Inc. (NYSE: BRO) today announced its preliminary, unaudited financial results for the fourth quarter of 2012. 

Net income for the fourth quarter of 2012 was $42,637,000, or $0.29 per share, compared with $36,494,000, or $0.25 per share for the same quarter of 2011, an increase of 16.8%. Total revenue for the fourth quarter was $302,830,000, compared with 2011 fourth-quarter revenue of $244,097,000, an increase of 24.1%. 

Total revenue for the twelve months ended December 31, 2012 was $1,200,032,000, compared with total revenue for the same period of 2011 of $1,013,542,000, an increase of 18.4%. Net income for the twelve-month period ended December 31, 2012 was $184,045,000, or $1.26 per share, compared with $163,995,000, or $1.13 per share for the same period of 2011, an increase of 12.2%.

J. Powell Brown, President and Chief Executive Officer of the Company, noted, "The fourth-quarter results were the culmination of the hard work of our 6,300-plus teammates throughout 2012. Two of our most important goals for 2012 -- to grow our revenues organically and to improve each and every quarter -- were accomplished. I am very proud of what we achieved in the fourth quarter and for the year. We will continue to work tirelessly for the benefit of our clients in 2013."

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' sixth 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 of 2012. 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 of 2012 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, 2011, 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,
 
  2012   2011     2012   2011  
REVENUES                          
Commissions and fees $ 300,296   $ 241,350     $ 1,189,081   $ 1,005,962  
Investment income   236     333       797     1,267  
Other income, net   2,298     2,414       10,154     6,313  
  Total revenues   302,830     244,097       1,200,032     1,013,542  
                           
EXPENSES                          
Employee compensation and benefits   158,467     129,389       608,506     508,675  
Non-cash stock-based compensation   4,472     2,856       15,865     11,194  
Other operating expenses   44,995     34,590       174,389     144,079  
Amortization   16,123     13,965       63,573     54,755  
Depreciation   3,990     3,116       15,373     12,392  
Interest   4,004     3,352       16,097     14,132  
Change in estimated acquisition earn-out payables   1,552     (2,862 )     1,418     (2,206 )
    Total expenses   233,603     184,406       895,221     743,021  
                           
Income before income taxes   69,227     59,691       304,811     270,521  
                           
Income taxes   26,590     23,197       120,766     106,526  
                           
Net income $ 42,637   $ 36,494     $ 184,045   $ 163,995  
                           
Net income per share:                          
  Basic $ 0.30   $ 0.25     $ 1.28   $ 1.15  
  Diluted $ 0.29   $ 0.25     $ 1.26   $ 1.13  
                           
Weighted average number of shares outstanding:                          
  Basic   139,681     138,796       139,364     138,582  
  Diluted   142,314     140,547       142,010     140,264  
                           
Dividends declared per share $ 0.090   $ 0.0850     $ 0.3450   $ 0.3250  
   
   
   
Brown & Brown, Inc.  
INTERNAL GROWTH SCHEDULE  
Core Organic Commissions and Fees(1)  
Three Months Ended December 31, 2012  
(in thousands)  
(unaudited)  
   
    Quarter
Ended
12/31/12
  Quarter
Ended
12/31/11
  Total
Net
Change
  Total
Net
Growth %
    Less
Acquisition
Revenues
  Internal Net
Growth $
  Internal Net
Growth %
 
                                           
Retail(2)   $ 153,230   $ 139,257   $ 13,973   10.0 %   $ 6,166   $ 7,807   5.6 %
                                           
National Programs     64,090     41,057     23,033   56.1 %     22,957     76   0.2 %
                                           
Wholesale Brokerage     40,299     35,595     4,704   13.2 %     1,738     2,966   8.3 %
                                           
Services     34,398     16,482     17,916   108.7 %     16,106     1,810   11.0 %
                                           
Total Core Commissions and Fees (1)   $
292,017
  $
232,391
  $
59,626
 
25.7
%   $
46,967
  $
12,659
 
5.4
%
 
 
 
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
For the Three Months Ended December 31, 2012 and 2011
(in thousands)
(unaudited)
 
    Quarter
Ended
12/31/12
  Quarter
Ended
12/31/11
Total core commissions and fees(1)   $ 292,017   $ 232,391
Profit-sharing contingent commissions     6,342     4,810
Guaranteed supplemental commissions     1,937     2,459
Divested business     -     1,690
             
Total commissions & fees   $ 300,296   $ 241,350
             

(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, 2012   December 31, 2011
ASSETS            
Current assets:            
  Cash and cash equivalents   $ 219,821   $ 286,305
  Restricted cash and investments     164,564     130,535
  Short-term investments     8,183     7,627
  Premiums, commissions and fees receivable     302,725     240,257
  Deferred income taxes     24,408     19,863
  Other current assets     39,811     23,540
    Total current assets     759,512     708,127
             
Fixed assets, net     74,337     61,360
Goodwill     1,711,514     1,323,469
Amortizable intangible assets, net     566,538     496,182
Other assets     16,157     17,873
    Total assets   $ 3,128,058   $ 2,607,011
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
Current liabilities:            
  Premiums payable to insurance companies   $ 406,704   $ 327,096
  Premium deposits and credits due customers     32,867     30,048
  Accounts payable     48,524     22,384
  Accrued expenses and other liabilities     79,593     100,865
  Current portion of long-term debt     93     1,227
    Total current liabilities     567,781     481,620
             
Long-term debt     450,000     250,033
             
Deferred income taxes, net     237,630     178,052
             
Other liabilities     65,314     53,343
             
Shareholders' equity:            
  Common stock, par value $0.10 per share; authorized 280,000 shares; issued and outstanding 143,878 at 2012 and 143,352 at 2011     14,388     14,335
  Additional paid-in capital     335,872     307,059
  Retained earnings     1,457,073     1,322,562
  Accumulated other comprehensive income     -     7
             
    Total shareholders' equity     1,807,333     1,643,963
             
    Total liabilities and shareholders' equity   $ 3,128,058   $ 2,607,011

Contact Information

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