DAYTONA BEACH, Fla., and TAMPA, Fla., Jul 9, 2003 /PRNewswire-FirstCall via COMTEX/ -- Brown & Brown, Inc. (NYSE: BRO) announced net income for the second quarter of 2003 of $27,935,000, or $0.41 per share, an earnings per share increase of 32.3% over the $21,401,000, or $0.31 per share, reported for the quarter ended June 30, 2002. Total revenue for the quarter ended June 30, 2003 was $137,858,000, compared with 2002 second-quarter revenue of $114,903,000, an increase of 20.0%.
Total revenue for the six months ended June 30, 2003 was $282,594,000, compared with first-half 2002 revenue of $225,939,000, up 25.1%. Net income for the first six months of 2003 was $58,471,000 versus $41,564,000 during the same period in 2002, an increase of 40.7%. Net income per share for the six months ended June 30, 2003 was $0.85, versus the $0.62 per share posted during the comparable 2002 period, an increase of 37.1%.
Commenting on the quarter's results, J. Hyatt Brown, Chairman and CEO, noted, "Considering that we are seeing a moderation in general insurance premium increases, we are quite pleased to post our 42nd consecutive quarter of record earnings growth. Our ability to maintain this remarkable pace is a direct reflection of the dogged discipline and fortitude of our determined team of insurance professionals -- it is the hallmark of our culture and they are essential to our continued success."
Jim W. Henderson, President and Chief Operating Officer, added, "Locating and cultivating solid acquisition candidates continues to be a top priority in our overall strategic plan. To this end, we now have two of our most experienced and highly regarded people dedicated 100% to telling our success story and introducing the Brown & Brown culture to potential acquisition candidates. We are encouraged by the active pipeline of high-quality agencies."
Brown & Brown, Inc. and its subsidiaries provide a broad range of insurance and reinsurance products and services, as well as risk management, employee benefit administration, and managed health care services through offices located across the United States. The Company is ranked by Business Insurance magazine as the nation's sixth largest independent insurance intermediary organization. Our Web address is www.bbinsurance.com.
This press release may contain certain statements relating to future results which are forward-looking statements. These statements are not historical facts, but instead represent only the Company's 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 and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Further information concerning the Company and its business, including factors that potentially could materially affect the Company's financial results, 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; and the potential occurrence of a disaster that affects certain areas of the States of Arizona, California, Florida and/or New York, where significant portions of the Company's business are concentrated. 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 Six Months Ended
June 30 June 30
2003 2002 2003 2002
REVENUES
Commissions and fees $137,257 $114,262 $281,509 $225,088
Investment income 442 943 775 1,298
Other income (loss) 159 (302) 310 (447)
Total revenues 137,858 114,903 282,594 225,939
EXPENSES
Employee compensation
and benefits 66,092 55,604 134,333 111,006
Non-cash stock grant
compensation 632 785 1,449 1,561
Other operating
expenses 19,229 16,431 38,635 31,357
Amortization 4,416 3,490 8,753 6,759
Depreciation 2,019 1,745 3,946 3,460
Interest 946 1,158 1,953 2,394
Total expenses 93,334 79,213 189,069 156,537
Income before income
taxes and minority
interest 44,524 35,690 93,525 69,402
Income taxes 16,589 13,741 35,054 26,720
Minority interest,
net of tax -- 548 -- 1,118
Net income $ 27,935 $ 21,401 $ 58,471 $ 41,564
Net income per share:
Basic $0.41 $0.31 $0.86 $0.63
Diluted $0.41 $0.31 $0.85 $0.62
Weighted average number
of shares outstanding:
Basic 68,270 68,327 68,222 66,324
Diluted 68,943 69,231 68,927 67,212
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Commissions and Fees(1)
Three Months Ended June 30, 2003
(In thousands)
(unaudited)
Quarter Quarter Total Total Less Internal
Ended Ended Net Net Acquisition Net
6/30/03 6/30/02 Change Growth % Revenues Growth %
Florida Retail $35,582 $32,576 $3,006 9.2% $386 8.0%
National Retail 35,159 28,860 6,299 21.8% 5,616 2.4%
Western Retail 24,341 18,001 6,340 35.2% 5,637 3.9%
Total Retail 95,082 79,437 15,645 19.7% 11,639 5.0%
Professional
Programs 9,002 3,319 5,683 171.2% 5,638 1.4%
Special Programs 8,914 7,664 1,250 16.3% 367 11.5%
Total Programs 17,916 10,983 6,933 63.1% 6,005 8.4%
Brokerage 6,715 5,536 1,179 21.3% 286 16.1%
TPA Services 7,342 6,980 362 5.2% -- 5.2%
Total Core
Commissions
and Fees (1) $127,055 $102,936 $24,119 23.4% $17,930 6.0%
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
for the Three Months Ended June 30, 2003 and 2002
(in thousands)
(unaudited)
Quarter Quarter
Ended Ended
6/30/03 6/30/02
Total core commissions and fees(1) $127,055 $102,936
Contingent commissions 10,202 8,234
Adjustment for upfront annual commissions (2) -- (492)
Divested business -- 3,584
Total Commission & Fees $137,257 $114,262
(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), (ii) adjustment for upfront annual
commissions (explained below), and (iii) divested business
(commissions and fees generated from offices, books of business or
niches sold by the Company or terminated).
(2) Commissions from a Florida-based workers' compensation carrier that
changed its agency commission payment policy from paying on a monthly
basis to paying on an up-front annual basis only for year 2002.
Beginning January 1, 2003, this carrier reverted back to paying
commissions on a monthly basis.
Brown & Brown, Inc.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
June 30, December 31,
2003 2002
ASSETS
Current assets:
Cash and cash equivalents $51,109 $91,247
Restricted cash 110,206 79,796
Short-term investments 1,957 446
Premiums, commissions and fees receivable 152,423 144,244
Other current assets 14,401 16,527
Total current assets 330,096 332,260
Fixed assets, net 25,060 24,730
Goodwill, net 207,206 176,269
Other intangible assets, net 231,112 203,984
Investments 10,591 8,585
Deferred income taxes, net 1,171 1,788
Other assets 6,387 6,733
Total assets $811,623 $754,349
LIABILITIES
Current liabilities:
Premiums payable to insurance companies $204,109 $191,682
Premium deposits and credits due customers 19,989 16,723
Accounts payable 13,123 12,054
Accrued expenses 42,508 46,586
Current portion of long-term debt 27,016 27,334
Total current liabilities 306,745 294,379
Long-term debt 49,211 57,585
Other liabilities 9,454 8,943
Minority Interest -- 1,852
SHAREHOLDERS' EQUITY
Common stock, par value $0.10 per share;
authorized 280,000 shares; issued and
outstanding, 68,360 at 2003 and 68,178 at 2002 6,836 6,818
Additional paid-in capital 162,429 159,564
Retained earnings 273,721 223,102
Accumulated other comprehensive income 3,227 2,106
Total shareholders' equity 446,213 391,590
Total liabilities and shareholders' equity $811,623 $754,349
SOURCE Brown & Brown, Inc.
Cory T. Walker, Chief Financial Officer of Brown & Brown, Inc., +1-386-239-7250
http://www.bbinsurance.com