Net income for the second quarter of 2009 was $40,668,000, or $0.29 per share, compared with $40,398,000, or $0.29 per share for the same quarter of 2008. Total revenue for the second quarter ended June 30, 2009 was $246,369,000, compared with 2008 second-quarter revenue of $241,720,000.
Total revenue for the six months ended June 30, 2009 was $509,949,000, compared with total revenue for the first half of 2008 of $498,435,000. Net income for the six-month period ended June 30, 2009 was $88,680,000, or $0.63 per share, compared with $92,158,000, or $0.65 per share for the same period of 2008.
J. Powell Brown, President and Chief Executive Officer of Brown & Brown, Inc., noted, "This insurance market continues to be challenging due principally to the current economic environment. However, by delivering for our existing clients and securing new business, we were able to sustain our revenues and earnings quarter over quarter."
Jim W. Henderson, Vice Chairman and Chief Operating Officer of the Company, added, "We continue to evaluate an ample inventory of acquisition prospects. The temporary pause in deal closings is in part due to the current economic environment. We remain optimistic about the long-term M & A 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' 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 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 For the
Three Months Ended Six Months Ended
June 30 June 30
--------------------- ---------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
REVENUES
Commissions and fees $ 244,595 $ 238,835 $ 508,559 $ 492,363
Investment income 460 1,909 770 3,908
Other income, net 1,314 976 620 2,164
---------- ---------- ---------- ----------
Total revenues 246,369 241,720 509,949 498,435
---------- ---------- ---------- ----------
EXPENSES
Employee compensation and
benefits 122,625 120,514 249,966 241,701
Non-cash stock-based
compensation 1,695 1,800 3,511 3,744
Other operating expenses 35,620 34,384 71,484 65,588
Amortization 12,519 11,392 24,904 22,508
Depreciation 3,299 3,292 6,632 6,538
Interest 3,632 3,744 7,266 7,178
---------- ---------- ---------- ----------
Total expenses 179,390 175,126 363,763 347,257
---------- ---------- ---------- ----------
Income before income taxes 66,979 66,594 146,186 151,178
Income taxes 26,311 26,196 57,506 59,020
---------- ---------- ---------- ----------
Net income $ 40,668 $ 40,398 $ 88,680 $ 92,158
========== ========== ========== ==========
Net income per share:
Basic $ 0.29 $ 0.29 $ 0.63 $ 0.65
========== ========== ========== ==========
Diluted $ 0.29 $ 0.29 $ 0.63 $ 0.65
========== ========== ========== ==========
Weighted average number of
shares outstanding:
Basic 141,523 140,723 141,540 140,713
========== ========== ========== ==========
Diluted 141,888 141,265 141,865 141,330
========== ========== ========== ==========
Dividends declared per share $ 0.075 $ 0.07 $ 0.15 $ 0.14
========== ========== ========== ==========
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Commissions and Fees(1)
Three Months Ended June 30, 2009
(in thousands)
(unaudited)
Total Less Internal Internal
Quarter Quarter Total Net Acqui- Net Net
Ended Ended Net Growth sition Growth Growth
6/30/09 6/30/08 Change % Revenues $ %
-------- -------- ------- ----- -------- --------- ------
Florida
Retail $ 43,991 $ 45,334 $(1,343) (3.0)% $ 2,536 $ (3,879) (8.6)%
National
Retail 78,857 73,603 5,254 7.1% 9,345 (4,091) (5.6)%
Western
Retail 24,646 23,688 958 4.0% 4,467 (3,509) (14.8)%
-------- -------- ------- -------- ---------
Total
Retail 147,494 142,625 4,869 3.4% 16,348 (11,479) (8.0)%
-------- -------- ------- -------- ---------
Wholesale
Brokerage 41,409 44,370 (2,961) (6.7)% 364 (3,325) (7.5)%
Professional
Programs 9,531 9,335 196 2.1% - 196 2.1%
Special
Programs 31,096 27,412 3,684 13.4% 314 3,370 12.3%
-------- -------- ------- -------- ---------
Total
National
Programs 40,627 36,747 3,880 10.6% 314 3,566 9.7%
-------- -------- ------- -------- ---------
Services 8,259 7,982 277 3.5% - 277 3.5%
-------- -------- ------- -------- ---------
Total Core
Commissions
and Fees
(1) $237,789 $231,724 $ 6,065 2.6% $ 17,026 $ (10,961) (4.7)%
======== ======== ======= ======== =========
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
for the Three Months Ended June 30, 2009 and 2008
(in thousands)
(unaudited)
Quarter Quarter
Ended Ended
6/30/09 6/30/08
--------------- ---------------
Total core commissions and fees(1) $ 237,789 $ 231,724
Contingent commissions 6,806 5,412
Divested business - 1,699
--------------- ---------------
Total commission & fees $ 244,595 $ 238,835
=============== ===============
(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,
2009 2008
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 189,994 $ 78,557
Restricted cash and investments 160,121 144,750
Short-term investments 7,640 7,511
Premiums, commissions and fees receivable 235,463 244,515
Deferred income taxes - 14,171
Other current assets 24,302 33,528
------------- -------------
Total current assets 617,520 523,032
Fixed assets, net 63,189 63,520
Goodwill 1,050,720 1,023,372
Amortizable intangible assets, net 488,021 495,627
Other assets 10,762 14,029
------------- -------------
Total assets $ 2,230,212 $ 2,119,580
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Premiums payable to insurance companies $ 397,991 $ 357,707
Premium deposits and credits due customers 39,003 43,577
Accounts payable 33,378 18,872
Accrued expenses 78,493 96,325
Current portion of long-term debt 4,015 6,162
------------- -------------
Total current liabilities 552,880 522,643
Long-term debt 250,289 253,616
Deferred income taxes, net 98,635 90,143
Other liabilities 15,223 11,437
Shareholders' equity:
Common stock, par value $0.10 per share;
authorized 280,000 shares; issued and
outstanding 141,481 at 2009 and 141,544 at
2008 14,148 14,154
Additional paid-in capital 254,185 250,167
Retained earnings 1,044,852 977,407
Accumulated other comprehensive income - 13
------------- -------------
Total shareholders' equity 1,313,185 1,241,741
------------- -------------
Total liabilities and shareholders' equity $ 2,230,212 $ 2,119,580
============= =============
Cory T. Walker Chief Financial Officer (386) 239-7250
SOURCE: Brown & Brown, Inc.