DAYTONA BEACH, FL and TAMPA, FL, Jul 19, 2010 (MARKETWIRE via COMTEX) --
Brown & Brown, Inc. (NYSE: BRO) today announced that it earned net income for the second quarter of 2010 of $41,185,000, or $0.29 per share, an increase of 1.3% from the $40,668,000, or $0.29 per share, reported for the quarter ended June 30, 2009. Total revenue for the quarter ended June 30, 2010 was $243,665,000, compared with 2009 second-quarter revenue of $246,369,000.
Total revenue for the six months ended June 30, 2010 was $495,938,000, compared with total revenue for the first half of 2009 of $509,949,000. Net income for the six-month period ended June 30, 2010 was $85,313,000, or $0.59 per share, compared with $88,680,000, or $0.63 per share for the same period of 2009.
J. Powell Brown, President and Chief Executive Officer of Brown & Brown, Inc., noted, "The insurance marketplace continues to bump around. Exposure units and insurance premium rates remain 'soft' with no significant changes anticipated in the foreseeable future. The increase in our quarterly earnings in the face of such a challenging environment is a tribute to the dedication and ability of our decentralized local office teams."
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, managed health care, and Medicare set-aside services and programs. Providing service to business, public entity, quasi-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 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 Three Months For the Six Months
Ended June 30 Ended June 30
-------------------- --------------------
2010 2009 2010 2009
--------- ---------- --------- ----------
REVENUES
Commissions and fees $ 241,053 $ 244,595 $ 491,727 $ 508,559
Investment income 346 460 677 770
Other income (loss), net 2,266 1,314 3,534 620
--------- ---------- --------- ----------
Total revenues 243,665 246,369 495,938 509,949
--------- ---------- --------- ----------
EXPENSES
Employee compensation and
benefits 121,372 122,625 243,555 249,966
Non-cash stock-based
compensation 1,780 1,695 3,735 3,511
Other operating expenses 33,622 35,620 69,955 71,484
Amortization 12,650 12,519 25,203 24,904
Depreciation 3,129 3,299 6,382 6,632
Interest 3,632 3,632 7,240 7,266
Change in estimated acquisition
earn-out payables (533) - (1,229) -
--------- ---------- --------- ----------
Total expenses 175,652 179,390 354,841 363,763
--------- ---------- --------- ----------
Income before income taxes 68,013 66,979 141,097 146,186
Income taxes 26,828 26,311 55,784 57,506
--------- ---------- --------- ----------
Net income $ 41,185 $ 40,668 $ 85,313 $ 88,680
========= ========== ========= ==========
Net income per share:
Basic $ 0.29 $ 0.29 $ 0.60 $ 0.63
========= ========== ========= ==========
Diluted $ 0.29 $ 0.29 $ 0.59 $ 0.63
========= ========== ========= ==========
Weighted average number of
shares outstanding:
Basic 137,685 136,939 137,654 136,937
========= ========== ========= ==========
Diluted 139,105 137,304 138,937 137,261
========= ========== ========= ==========
Dividends declared per share $ 0.0775 $ 0.075 $ 0.155 $ 0.150
========= ========== ========= ==========
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Commissions and Fees(1)
Three Months Ended June 30, 2010
(in thousands)
(unaudited)
Quarter Quarter Total Total Less Internal Internal
Ended Ended Net Net Acquisition Net Net
6/30/10 6/30/09 Change Growth% Revenues Growth$ Growth%
--------- --------- -------- ------ ------- -------- ------
Florida
Retail $ 42,320 $ 43,910 $ (1,590) (3.6)% $ 19 $ (1,609) (3.7)%
National
Retail 80,093 78,638 1,455 1.9 % 3,078 (1,623) (2.1)%
Western
Retail 23,885 24,459 (574) (2.3)% 1,558 (2,132) (8.7)%
--------- --------- -------- ------- --------
Total
Retail 146,298 147,007 (709) (0.5)% 4,655 (5,364) (3.6)%
--------- --------- -------- ------- --------
Wholesale
Brokerage 41,385 41,409 (24) (0.1)% 434 (458) (1.1)%
Professional
Programs 9,343 9,734 (391) (4.0)% - (391) (4.0)%
Special
Programs 27,854 30,893 (3,039) (9.8)% 188 (3,227) (10.4)%
--------- --------- -------- ------- --------
Total
National
Programs 37,197 40,627 (3,430) (8.4)% 188 (3,618) (8.9)%
--------- --------- -------- ------- --------
Services 9,729 8,259 1,470 17.8 % 1,442 28 0.3 %
--------- --------- -------- ------- --------
Total Core
Commissions
and Fees
(1) $ 234,609 $ 237,302 $ (2,693) (1.1)% $ 6,719 $ (9,412) (4.0)%
========= ========= ======== ======= ========
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
for the Three Months Ended June 30, 2010 and 2009
(in thousands)
(unaudited)
Quarter Quarter
Ended Ended
6/30/10 6/30/09
----------- -----------
Total core commissions and fees(1) $ 234,609 $ 237,302
Contingent commissions 6,444 6,806
Divested business - 487
----------- -----------
Total commission & fees $ 241,053 $ 244,595
=========== ===========
(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)
June 30, December 31,
2010 2009
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 293,011 $ 197,113
Restricted cash and investments 145,848 155,257
Short-term investments 8,135 8,213
Premiums, commissions and fees receivable 233,597 209,462
Deferred income taxes - 11,791
Other current assets 28,670 31,863
----------- -----------
Total current assets 709,261 613,699
Fixed assets, net 60,074 61,467
Goodwill 1,103,998 1,074,397
Amortizable intangible assets, net 457,939 468,862
Other assets 5,540 5,801
----------- -----------
Total assets $ 2,336,812 $ 2,224,226
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Premiums payable to insurance companies $ 356,355 $ 310,296
Premium deposits and credits due customers 34,437 37,715
Accounts payable 24,704 17,431
Accrued expenses and other liabilities 82,820 96,387
Current portion of long-term debt 5,766 17,124
----------- -----------
Total current liabilities 504,082 478,953
Long-term debt 250,000 250,209
Deferred income taxes, net 124,667 115,609
Other liabilities 18,969 9,581
Shareholders' equity:
Common stock, par value $0.10 per share;
authorized 280,000 shares; issued and
outstanding 142,224 at 2010 and 142,076 at 2009 14,222 14,208
Additional paid-in capital 273,781 267,856
Retained earnings 1,151,088 1,087,805
Accumulated other comprehensive income 3 5
----------- -----------
Total shareholders' equity 1,439,094 1,369,874
----------- -----------
Total liabilities and shareholders' equity $ 2,336,812 $ 2,224,226
=========== ===========
Cory T. Walker Chief Financial Officer (386) 239-7250
SOURCE: Brown & Brown, Inc.