DAYTONA BEACH and TAMPA, Fla., Jan. 14 /PRNewswire-FirstCall/ -- Brown & Brown, Inc. (NYSE: BRO) today announced record earnings for 2003, the eleventh consecutive year the Company has hit record highs in both revenues and income. Net income for 2003 rose to $110,322,000, or $1.60 per share, an increase of 32.7% over the $83,122,000, or $1.22 per share earned in 2002. Total revenues for the year rose to $551,040,000, up 20.9% compared with $455,742,000 attained in 2002.
During the fourth quarter of 2003 net income increased to $25,800,000, or $0.37 per share, compared with 2002 fourth quarter net income of $21,380,000 or $0.31 per share, a 20.7% increase. Total revenues for the fourth quarter of 2003 was $134,901,000, a 13.2% increase over 2002 fourth quarter revenues of $119,147,000.
J. Hyatt Brown, Chairman and Chief Executive Officer, said of the results, "Year 2003 was a continuation of our commitment made eleven years ago to grow earnings per share 15% or more, ad infinitum. The actual 2003 earnings per share growth of 31.1% is very pleasing to all of the Brown & Brown team who have performed so well in a changing market. Our operating margin (income before income taxes and minority interest with interest expense and amortization expense added back) grew positively from 33.7% in 2002 to 35.9% in 2003. We are very focused on our intermediate term goal of B-40 - $1 billion dollars of revenues and a 40% operating profit margin. We view 2004 as another step toward reaching that goal."
Jim W. Henderson, President and Chief Operating Officer noted, "We are seeing stronger real interest in the acquisition and merger arena than we saw in early 2003. As we move into 2004, more and more entrepreneurs seem to be recognizing the value of joining forces with larger, stronger partners, like Brown & Brown, and are more inclined to pull the trigger."
Brown & Brown, Inc. and its subsidiaries offer a broad range of insurance and reinsurance products and services, as well as risk management, employee benefit administration, and managed health care programs. Providing service to business, public entity, individual and trade and association clients nationwide, the Company is ranked by Business Insurance magazine as the United States' sixth largest independent insurance intermediary. Our Web address is www.bbinsurance.com.
This press release may contain certain statements relating to future results which are forward-looking statements. These statements are not historical facts, but instead represent only the Company's 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 and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Further information concerning the Company and its business, including factors that potentially could materially affect the Company's financial results, 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 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; and the potential occurrence of a disaster that affects certain areas of the States of Arizona, California, Florida, New York, and/or Washington, where significant portions of the Company's business are concentrated. All forward-looking statements included in this press release are made only as of the date of this press release, and we do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur or of which we hereafter become aware.
Brown & Brown, Inc.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
For the For the
Three Months Ended Twelve Months Ended
December 31 December 31
2003 2002 2003 2002
REVENUES
Commissions and fees $131,632 $117,402 $545,287 $452,289
Investment income 344 723 1,428 2,945
Other income, net 2,925 1,022 4,325 508
Total revenues 134,901 119,147 551,040 455,742
EXPENSES
Employee compensation and benefits 67,157 60,224 268,372 224,755
Non-cash stock grants compensation 448 798 2,272 3,823
Other operating expenses 18,503 19,381 74,617 66,554
Amortization 4,508 3,848 17,470 14,042
Depreciation 2,141 1,926 8,203 7,245
Interest 813 1,103 3,624 4,659
Total expenses 93,570 87,280 374,558 321,078
Income before income taxes and 41,331 31,867 176,482 134,664
minority interest
Income taxes 15,531 9,721 66,160 49,271
Minority interest, net of income
tax -- 766 -- 2,271
Net income $25,800 $21,380 $110,322 $83,122
Net income per share:
Basic $0.38 $0.31 $1.61 $1.24
Diluted $0.37 $0.31 $1.60 $1.22
Weighted average number of shares
outstanding:
Basic 68,532 68,187 68,327 67,283
Diluted 68,964 68,953 68,897 68,043
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Commissions and Fees(1)
Three Months Ended December 31, 2003
(in thousands)
(unaudited)
Quarter Quarter Total Total Less Internal
Ended Ended Net Net Acquisition Net
12/31/03 12/31/02 Change Growth% Revenues Growth%
Florida Retail $33,148 $31,514 $1,634 5.2% $287 4.3%
National Retail 31,372 30,749 623 2.0% 2,783 (7.0)%
Western Retail 24,150 18,300 5,850 32.0% 4,744 6.0%
Total Retail 88,670 80,563 8,107 10.1% 7,814 0.4%
Professional Programs 9,627 6,565 3,062 46.6% 2,420 9.8%
Special Programs 16,300 11,631 4,669 40.1% 1,967 23.2%
Total Programs 25,927 18,196 7,731 42.5% 4,387 18.4%
Brokerage 7,466 6,179 1,287 20.8% 660 10.1%
TPA Services 6,612 5,755 857 14.9% - 14.9%
Total Core Commissions
and Fees (1) $128,675 $110,693 $17,982 16.2% $12,861 4.6%
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
for the Three Months Ended December 31, 2003 and 2002
(in thousands)
(unaudited)
Quarter Quarter
Ended Ended
12/31/03 12/31/02
Total core commissions and
fees(1) $128,675 $110,693
Contingent commissions 2,957 3,513
Adjustment for upfront annual
commissions (2) - (492)
Divested business - 3,688
Total Commission & Fees $131,632 $117,402
(1) Total core commissions and fees are our total commissions and fees
less (i) 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), (ii) adjustment for
upfront annual commissions (explained below), and (iii) divested
business (commissions and fees generated from offices, books of
business or niches sold by the Company or terminated).
(2) Commissions from a Florida-based workers' compensation carrier that
changed its agency commission payment policy from paying on a monthly
basis to paying on an up-front annual basis only for year 2002.
Beginning January 1, 2003, this carrier reverted back to paying
commissions on a monthly basis.
Brown & Brown, Inc.
CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
December 31, December 31,
2003 2002
ASSETS
Current assets:
Cash and cash equivalents $56,926 $68,050
Restricted cash 116,543 102,993
Short-term investments 382 446
Premiums, commissions and fees receivable 146,672 144,244
Other current assets 22,943 16,527
Total current assets 343,466 332,260
Fixed assets, net 32,396 24,730
Goodwill, net 237,753 176,269
Other intangible assets, net 232,934 203,984
Investments 10,845 8,585
Deferred income taxes, net - 1,788
Other assets 8,460 6,733
Total assets $865,854 $754,349
LIABILITIES
Current liabilities:
Premiums payable to insurance companies $199,628 $191,682
Premium deposits and credits due customers 22,223 16,723
Accounts payable 11,282 12,284
Accrued expenses 49,691 44,545
Current portion of long-term debt 18,692 27,334
Total current liabilities 301,516 292,568
Long-term debt 41,107 57,585
Deferred income taxes, net 15,018 -
Other liabilities 10,178 10,754
Minority Interest - 1,852
SHAREHOLDERS' EQUITY
Common stock, par value $0.10 per share;
authorized 280,000 shares; issued and
outstanding, 68,561 at 2003 and 68,178 at
2002 6,856 6,818
Additional paid-in capital 170,130 159,564
Retained earnings 316,822 223,102
Accumulated other comprehensive income 4,227 2,106
Total shareholders' equity 498,035 391,590
Total liabilities and shareholders' equity $865,854 $754,349
SOURCE Brown & Brown, Inc.
-0- 01/14/2004
/CONTACT: Cory T. Walker, Chief Financial Officer of Brown & Brown, Inc.,
+1-386-239-7250/
/Web site: http://www.bbinsurance.com /
(BRO)
CO: Brown & Brown, Inc.
ST: Florida
IN: FIN INS
SU: ERN
DO
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