DAYTONA BEACH, Fla. and TAMPA, Fla., Feb 10, 2005 /PRNewswire-FirstCall via COMTEX/ -- Brown & Brown, Inc. (NYSE: BRO) today announced record earnings for 2004, the twelfth consecutive year the Company has hit record highs in both revenues and net income. Net income for 2004 rose to $128,843,000, or $1.86 per share, an increase of 16.3% in per share earnings over the $110,322,000, or $1.60 per share earned in 2003. Total revenues for the year rose to $646,934,000, up 17.4% compared with the $551,040,000 attained in 2003.
During the fourth quarter of 2004, net income increased to $30,256,000, or $0.43 per share, compared with 2003 fourth quarter net income of $25,800,000, or $0.37 per share, a 16.2% increase. Total revenue for the fourth quarter of 2004 was $163,046,000, a 20.9% increase over 2003 fourth quarter revenues of $134,901,000.
J. Hyatt Brown, Chairman and Chief Executive Officer, said of the results, "Our outstanding record of earnings per share growth of 15% or more continues for the twelfth straight year, thanks primarily to the remarkable men and women who have adopted the Brown & Brown culture as their own. Just as we achieved our last interim goal, 'Project 28,' we continue to aggressively pursue our current intermediate goal of achieving over the coming years 'B- 40,' that is, $1 billion in revenue and a 40% operating margin (pre-tax income with interest and amortization expense added back). We feel quite comfortable in our ability to continue growing and rewarding those who elect to grow with us."
Jim W. Henderson, President and Chief Operating Officer, noted, "During 2004 and carrying right into the new year, we have been favored by the excep- tional caliber of organizations seeking to join the Brown & Brown team. The results that we continue to produce are proof of the win-win culture we achieve with acquisitions. Looking forward, we continue to see a large number of extremely fine potential new opportunities. 2004 also signaled a higher level of success in the recruitment and hiring of new future leaders. Many of them are expected to be successful graduates of our own Brown & Brown Insur- ance University."
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, and managed health care programs. Providing service to busi- ness, public entity, individual, trade and professional association clients nationwide, the Company is ranked by Business Insurance magazine as the United States' eighth largest independent insurance intermediary. Our Web address is http://www.bbinsurance.com .
This press release may contain certain statements relating to future results which are forward-looking statements, including those relating to continuing our revenue, earnings and operating growth, and to identifying and consummating attractive 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 indicated in these forward-looking statements. Further informa- tion concerning the Company and its business, including factors that poten- tially 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 competitive environment; the integration of the Com- pany'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 Arizona, California, Florida, New Jersey, New York and/or Washington, where significant portions of the Company's business are concentrated; the actual costs of resolution of contingent liabilities; those factors relevant to Brown & Brown's identification, consummation and integration of acquisitions, including any matters analyzed in the due dili- gence process, material adverse changes in the customers of the companies whose operations are acquired, and material adverse changes in the business and financial condition of either or both companies and their respective customers; and the cost and impact on the Company of previously disclosed pending litigation and regulatory inquiries regarding industry and Company practices with respect to compensation received from insurance carriers, certain of which practices are currently under review by a committee of independent members of the Company's Board of Directors. 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
2004 2003 2004 2003
REVENUES
Commissions and fees $158,352 $131,632 $638,267 $545,287
Investment income 1,108 344 2,715 1,428
Other income, net 3,586 2,925 5,952 4,325
Total revenues 163,046 134,901 646,934 551,040
EXPENSES
Employee compensation
and benefits 82,220 67,157 314,221 268,372
Non-cash stock grant
compensation 741 448 2,625 2,272
Other operating expenses 21,506 18,503 84,927 74,617
Amortization 6,069 4,508 22,146 17,470
Depreciation 2,249 2,141 8,910 8,203
Interest 3,457 813 7,156 3,624
Total expenses 116,242 93,570 439,985 374,558
Income before income
taxes 46,804 41,331 206,949 176,482
Income taxes 16,548 15,531 78,106 66,160
Net income $30,256 $25,800 $128,843 $110,322
Net income per share:
Basic $0.44 $0.38 $1.87 $1.61
Diluted $0.43 $0.37 $1.86 $1.60
Weighted average number
of shares outstanding:
Basic 69,152 68,532 68,909 68,327
Diluted 69,687 68,964 69,444 68,897
Dividends declared per
share: $0.08 $0.07 $0.29 $0.2425
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Commissions and Fees(1)
Three Months Ended December 31, 2004
(in thousands)
(unaudited)
Quarter Quarter Total Total Less Internal
Ended Ended Net Net Acquisition Net
12/31/04 12/31/03 Change Growth% Revenues Growth %
Florida Retail $35,242 $31,973 $3,269 10.2% $574 8.4%
National Retail 45,765 30,244 15,521 51.3% 14,382 3.8%
Western Retail 24,960 23,926 1,034 4.3% 1,940 (3.8)%
Total Retail 105,967 86,143 19,824 23.0% 16,896 3.4%
Professional Programs 11,095 9,571 1,524 15.9% 650 9.1%
Special Programs 22,466 16,927 5,539 32.7% 4,640 5.3%
Total Programs 33,561 26,498 7,063 26.7% 5,290 6.7%
Brokerage 12,108 7,307 4,801 65.7% 3,304 20.5%
TPA Services 6,348 5,608 740 13.2% -- 13.2%
Total Core
Commissions and
Fees (1) $157,984 $125,556 $32,428 25.8% $25,490 5.5%
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
for the Three Months Ended December 31, 2004 and 2003
(in thousands)
(unaudited)
Quarter Quarter
Ended Ended
12/31/04 12/31/03
Total core commissions and fees (1) $157,984 $125,556
Contingent commissions 368 2,957
Divested business -- 3,119
Total Commission & Fees $158,352 $131,632
(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), 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)
(unaudited)
December 31, December 31,
2004 2003
ASSETS
Current assets:
Cash and cash equivalents $188,106 $56,926
Restricted cash 147,483 116,543
Short-term investments 3,163 382
Premiums, commissions and fees
receivable 173,416 146,672
Other current assets 28,819 22,943
Total current assets 540,987 343,466
Fixed assets, net 33,438 32,396
Goodwill 360,843 237,753
Amortizable intangible assets, net 293,009 232,934
Investments 9,328 10,845
Other assets 12,933 8,460
Total assets $1,250,538 $865,854
LIABILITIES
Current liabilities:
Premiums payable to insurance
companies $240,867 $199,628
Premium deposits and credits
due customers 34,841 22,223
Accounts payable 16,257 11,282
Accrued expenses 58,031 49,691
Current portion of long-term debt 16,135 18,692
Total current liabilities 366,131 301,516
Long-term debt 227,063 41,107
Deferred income taxes, net 24,859 15,018
Other liabilities 8,160 10,178
SHAREHOLDERS' EQUITY
Common stock, par value $0.10
per share; authorized 280,000
shares; issued and outstanding,
69,159 at 2004 and 68,561 at 2003 6,916 6,856
Additional paid-in capital 187,280 170,130
Retained earnings 425,662 316,822
Accumulated other comprehensive
income 4,467 4,227
Total shareholders' equity 624,325 498,035
Total liabilities and shareholders'
equity $1,250,538 $865,854
SOURCE Brown & Brown, Inc.
Cory T. Walker, Chief Financial Officer, Brown & Brown, Inc., +1-386-239-7250
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