Net income for the fourth quarter of 2009 was $23,653,000, or $0.17 per share, compared with $33,373,000, or $0.24 per share for the same quarter of 2008. Total revenue for the fourth quarter ended December 31, 2009 was $214,162,000, compared with 2008 fourth-quarter revenue of $232,090,000.
Total revenue for the twelve months ended December 31, 2009 was $967,877,000, compared with total revenue for the twelve months ended December 31, 2008 of $977,554,000. Net income for the twelve-month period ended December 31, 2009 was $153,294,000, or $1.08 per share, compared with $166,124,000, or $1.17 per share, for the same period of 2008.
J. Powell Brown, President and Chief Executive Officer of Brown & Brown, Inc., noted, "In 2009 we faced three strong headwinds -- decreasing insurance rates, adverse economic conditions, and a soft merger and acquisition environment. Yet, in spite of these challenges, we became more efficient, added exceptional new talent and maintained the quality of service our clients expect and deserve."
Jim W. Henderson, Vice Chairman and Chief Operating Officer of the Company, added, "Since December 31, we have closed three deals that together represent $10.5 million of forward annualized revenues. In recent months, we have experienced an increase in merger and acquisition deal flow and we are encouraged by the quality of the opportunities and the depth of discussions. This is a great time in the market cycle to put our cash to work for our shareholders through investment in quality acquisition 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, 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 For the Twelve
Months Ended Months Ended
December 31 December 31
------------------- -------------------
2009 2008 2009 2008
--------- --------- --------- ---------
REVENUES
Commissions and fees $ 213,288 $ 229,854 $ 964,863 $ 965,983
Investment income 216 943 1,161 6,079
Other income, net 658 1,293 1,853 5,492
--------- --------- --------- ---------
Total revenues 214,162 232,090 967,877 977,554
--------- --------- --------- ---------
EXPENSES
Employee compensation and benefits 115,107 121,910 484,680 485,783
Non-cash stock-based compensation 2,115 1,751 7,358 7,314
Other operating expenses 36,382 35,359 143,389 137,352
Amortization 12,485 11,842 49,857 46,631
Depreciation 3,285 3,357 13,240 13,286
Interest 3,711 3,645 14,599 14,690
--------- --------- --------- ---------
Total expenses 173,085 177,864 713,123 705,056
--------- --------- --------- ---------
Income before income taxes 41,077 54,226 254,754 272,498
Income taxes 17,424 20,853 101,460 106,374
--------- --------- --------- ---------
Net income $ 23,653 $ 33,373 $ 153,294 $ 166,124
========= ========= ========= =========
Net income per share:
Basic $ 0.17 $ 0.24 $ 1.08 $ 1.18
========= ========= ========= =========
Diluted $ 0.17 $ 0.24 $ 1.08 $ 1.17
========= ========= ========= =========
Weighted average number of shares
outstanding:
Basic 137,531 136,799 137,173 136,319
========= ========= ========= =========
Diluted 137,779 137,274 137,507 136,884
========= ========= ========= =========
Dividends declared per share $ 0.0775 $ 0.0750 $ 0.3025 $ 0.2850
========= ========= ========= =========
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Commissions and Fees(1)
Three Months Ended December 31, 2009
(in thousands)
(unaudited)
Total Internal
Quarter Quarter Total Net Less Internal Net
Ended Ended Net Growth Acquisition Net Growth
12/31/09 12/31/08 Change % Revenues Growth $ %
-------- -------- -------- ------- -------- -------- ------
Florida
Retail $ 36,687 $ 40,922 $ (4,235) (10.3)% $ - $ (4,235) (10.3)%
National
Retail 72,040 72,772 (732) (1.0)% 4,531 (5,263) (7.2)%
Western
Retail 22,670 24,606 (1,936) (7.9)% 1,544 (3,480) (14.1)%
-------- -------- -------- -------- --------
Total
Retail 131,397 138,300 (6,903) (5.0)% 6,075 (12,978) (9.4)%
-------- -------- -------- -------- --------
Wholesale
Brokerage 31,410 32,156 (746) (2.3)% 243 (989) (3.1)%
Professional
Programs 12,034 12,719 (685) (5.4)% - (685) (5.4)%
Special
Programs 29,914 33,188 (3,274) (9.9)% 513 (3,787) (11.4)%
-------- -------- -------- -------- --------
Total
National
Programs 41,948 45,907 (3,959) (8.6)% 513 (4,472) (9.7)%
-------- -------- -------- -------- --------
Services 8,049 8,305 (256) (3.1)% - (256) (3.1)%
-------- -------- -------- -------- --------
Total Core
Commissions
and
Fees(1) $212,804 $224,668 $(11,864) (5.3)% $ 6,831 $(18,695) (8.3)%
======== ======== ======== ======== ========
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
for the Three Months Ended December 31, 2009 and 2008
(in thousands)
(unaudited)
Quarter Quarter
Ended Ended
12/31/09 12/31/08
--------- ---------
Total core commissions and fees(1) $ 212,804 $ 224,668
Contingent commissions 484 4,930
Divested business - 256
--------- ---------
Total commission & fees $ 213,288 $ 229,854
========= =========
(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)
December 31, December 31,
2009 2008
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 197,113 $ 78,557
Restricted cash and investments 155,257 144,750
Short-term investments 8,213 7,511
Premiums, commissions and fees receivable 209,462 244,515
Deferred income taxes 11,791 14,171
Other current assets 31,863 33,528
------------- -------------
Total current assets 613,699 523,032
Fixed assets, net 61,467 63,520
Goodwill 1,074,397 1,023,372
Amortizable intangible assets, net 468,862 495,627
Other assets 5,801 14,029
------------- -------------
Total assets $ 2,224,226 $ 2,119,580
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Premiums payable to insurance companies $ 310,296 $ 357,707
Premium deposits and credits due customers 37,715 43,577
Accounts payable 17,431 18,872
Accrued expenses and other liabilities 96,387 96,325
Current portion of long-term debt 17,124 6,162
------------- -------------
Total current liabilities 478,953 522,643
Long-term debt 250,209 253,616
Deferred income taxes, net 115,609 90,143
Other liabilities 9,581 11,437
Shareholders' equity:
Common stock, par value $0.10 per share;
authorized 280,000 shares; issued and
outstanding 142,076 at 2009 and 141,544
at 2008 14,208 14,154
Additional paid-in capital 267,856 250,167
Retained earnings 1,087,805 977,407
Accumulated other comprehensive income 5 13
------------- -------------
Total shareholders' equity 1,369,874 1,241,741
------------- -------------
Total liabilities and shareholders' equity $ 2,224,226 $ 2,119,580
============= =============
Cory T. Walker Chief Financial Officer (386) 239-7250
SOURCE: Brown & Brown, Inc.