DAYTONA BEACH, FL and TAMPA, FL, Apr 24, 2006 (MARKET WIRE via COMTEX News Network) -- Brown & Brown, Inc. (NYSE: BRO) today announced new records for its net income and net income per share in the first quarter.
Net income per share for the quarter ended March 31, 2006 was $0.36, an increase of 16.1% over the $0.31 in net income per share reported for the quarter ended March 31, 2005. Net income rose to $50,026,000 for the first quarter of 2006, versus net income of $43,018,000 for the quarter ended March 31, 2005, an increase of 16.3%.
Total revenue for the quarter ended March 31, 2006 was up 13.9%, to $230,582,000, compared with $202,374,000 recorded in the corresponding quarter in 2005.
J. Hyatt Brown, Chairman and Chief Executive Officer, noted, "The wind storm capacity crunch, in coastal areas from Texas to Virginia, is the most severe that I have seen in my 47-year insurance career. This tumultuous market place, combined with softening property and casualty pricing, outside of wind-prone areas, presents challenges for our customers and our professionals. We are responding positively and aggressively in finding solutions to those needs. That being said, all-in-all we are pleased with the quarter's results."
Jim W. Henderson, President and Chief Operating Officer, added, "Since the beginning of the year, we have completed seven acquisitions with total annualized revenues of approximately $24.6 million, most of which already operate at expected Brown & Brown margin levels. Our operating model continues to attract the best-in-class of acquisition candidates, including small and medium agencies with industry-leading margins. Our success with both small and large agencies has provided Brown & Brown with a unique pipeline of opportunities."
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, 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 continuing our revenue, earnings and operating growth, as well as 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 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 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, Georgia, New Jersey, New York, Pennsylvania 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 consummation and integration of announced acquisitions, including any matters analyzed in the due diligence 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 litigation initiated against the Company and 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
For the Three Months Ended March 31, 2006 and 2005
(in thousands, except per share data)
(unaudited)
2006 2005
---------- ----------
REVENUES
Commissions and fees $ 227,915 $ 200,315
Investment income 2,209 965
Other income, net 458 1,094
---------- ----------
Total revenues 230,582 202,374
---------- ----------
EXPENSES
Employee compensation and benefits 100,730 90,384
Non-cash stock-based compensation 2,330 891
Other operating expenses 30,969 27,142
Amortization 9,000 7,535
Depreciation 2,595 2,367
Interest 3,522 3,542
---------- ----------
Total expenses 149,146 131,861
---------- ----------
Income before income taxes 81,436 70,513
Income taxes 31,410 27,495
---------- ----------
Net income $ 50,026 $ 43,018
========== ==========
Net income per share:
Basic $ 0.36 $ 0.31
========== ==========
Diluted $ 0.36 $ 0.31
========== ==========
Weighted average number of shares outstanding:
Basic 139,383 138,324
========== ==========
Diluted 140,823 139,422
========== ==========
Dividends declared per share $ 0.05 $ 0.04
========== ==========
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Commissions and Fees(1)
Three Months Ended March 31, 2006
(in thousands)
(unaudited)
Less
Quarter Quarter Total Total Acquis- Internal
Ended Ended Net Net ition Net
3/31/06 3/31/05 Change Growth % Revenues Growth %
-------- -------- ------ ------- ------- ------
Florida Retail $ 39,260 $ 37,311 $ 1,949 5.2% $ 284 4.5%
National Retail 51,257 49,426 1,831 3.7% 3,075 (2.5)%
Western Retail 25,028 25,117 (89) (0.4)% 1,370 (5.8)%
-------- -------- ------- -------
Total Retail 115,545 111,854 3,691 3.3% 4,729 (0.9)%
-------- -------- ------- -------
Professional Programs 10,338 10,966 (628) (5.7)% - (5.7)%
Special Programs 26,778 21,413 5,365 25.1% 2,523 13.3%
-------- -------- ------- -------
Total Programs 37,116 32,379 4,737 14.6% 2,523 6.8%
-------- -------- ------- -------
Brokerage 35,143 21,366 13,777 64.5% 13,065 3.3%
TPA Services 6,644 6,384 260 4.1% - 4.1%
-------- -------- ------- -------
Total Core Commissions
and Fees(1) $194,448 $171,983 $22,465 13.1% $20,317 1.2%
======== ======== ======= =======
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
for the Three Months Ended March 31, 2006 and 2005
(in thousands)
(unaudited)
Quarter Quarter
Ended Ended
3/31/06 3/31/05
---------- ----------
Total core commissions and fees(1) $ 194,448 $ 171,983
Contingent commissions 33,467 27,844
Divested business - 488
---------- ----------
Total commission & fees $ 227,915 $ 200,315
========== ==========
(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)
March 31, December 31,
2006 2005
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 73,683 $ 100,580
Restricted cash and investments 256,085 229,872
Short-term investments 2,767 2,748
Premiums, commissions and fees receivable 245,357 257,930
Other current assets 29,141 28,637
---------- ----------
Total current assets 607,033 619,767
Fixed assets, net 41,726 39,398
Goodwill 623,124 549,040
Amortizable intangible assets, net 387,151 377,907
Investments 9,119 8,421
Other assets 14,249 14,127
---------- ----------
Total assets $1,682,402 $1,608,660
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Premiums payable to insurance companies $ 419,097 $ 397,466
Premium deposits and credits due customers 27,048 34,027
Accounts payable 50,318 21,161
Accrued expenses 42,870 74,534
Current portion of long-term debt 73,370 55,630
---------- ----------
Total current liabilities 612,703 582,818
Long-term debt 210,832 214,179
Deferred income taxes, net 34,961 35,489
Other liabilities 13,304 11,830
Shareholders' equity:
Common stock, par value $0.10 per share;
authorized 280,000 shares; issued and
outstanding 139,516 at 2006 and 139,383
at 2005 13,952 13,938
Additional paid-in capital 196,013 193,313
Retained earnings 595,703 552,647
Accumulated other comprehensive income 4,934 4,446
---------- ----------
Total shareholders' equity 810,602 764,344
---------- ----------
Total liabilities and shareholders' equity $1,682,402 $1,608,660
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Contact: Cory T. Walker Chief Financial Officer (386) 239-7250
SOURCE: Brown & Brown, Inc.