DAYTONA BEACH, Fla., and TAMPA, Fla., July 12 /PRNewswire-FirstCall/ -- Brown & Brown, Inc. (NYSE: BRO) announced net income for the second quarter of 2004 of $32,153,000, or $0.46 per share, an increase of 15.1% over the $27,935,000, or $0.41 per share, reported for the quarter ended June 30, 2003. Total revenue for the quarter ended June 30, 2004 was $157,942,000 compared with 2003 second-quarter revenue of $137,858,000 an increase of 14.6%.
Total revenue for the six months ended June 30, 2004 was $323,507,000, compared with first-half 2003 revenue of $282,594,000, up 14.5%. Net income for the first six months of 2004 was $68,501,000 versus $58,471,000 during the same period in 2003, an increase of 17.2%. Net income per share for the six months ended June 30, 2004 was $0.99, versus the $0.85 per share posted during the comparable 2003 period, an increase of 16.5%.
J. Hyatt Brown, Chairman and CEO, commenting on the results said, "We are very pleased with our second quarter results. The internal growth rate of 5.1% exceeded our expectations, particularly in view of continued rate erosion; which was possibly offset by increases in exposure units. Brown & Brown's high quality sustained growth continues to be recognized by investors as our market capitalization recently crossed the $3 billion level."
President and Chief Operating Officer, Jim W. Henderson added, "We continue our steady march to our intermediate goal of B-40. We have been assisted in this march by the addition of many fine, high quality, insurance agencies that have joined our team during the second quarter of 2004. Since April 1, 2004, we have completed ten acquisitions with estimated annual revenues of $38 million, bringing the total for the year to 21 with $86 million of estimated annual revenues. Among those most recently joining us is The McDuffee Insurance Agency, which represented our initial entry into New Hampshire and Massachusetts. We continue to be quite pleased with the active pipeline of high-quality agencies."
Brown & Brown, Inc. and its subsidiaries offer a broad range of insurance and reinsurance products and services, as well as risk management, employee benefit administration, and managed health care 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' sixth largest independent insurance intermediary. Our Web address is http://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; the potential occurrence of a disaster that affects certain areas of the States of Arizona, California, Florida, New Jersey, New York and/or Washington, where significant portions of the Company's business are concentrated; the actual costs of resolution of contingent liabilities; and 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. 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
2004 2003 2004 2003
REVENUES
Commissions and fees $156,749 $137,257 $321,063 $281,509
Investment income 333 442 1,021 775
Other income, net 860 159 1,423 310
Total revenues 157,942 137,858 323,507 282,594
EXPENSES
Employee compensation and benefits 76,270 66,092 152,552 134,333
Non-cash stock grant compensation 665 632 1,510 1,449
Other operating expenses 19,983 19,229 41,379 38,635
Amortization 5,483 4,416 10,300 8,753
Depreciation 2,269 2,019 4,423 3,946
Interest 743 946 1,454 1,953
Total expenses 105,413 93,334 211,618 189,069
Income before income taxes 52,529 44,524 111,889 93,525
Income taxes 20,376 16,589 43,388 35,054
Net income $32,153 $27,935 $68,501 $58,471
Net income per share:
Basic $0.47 $0.41 $1.00 $0.86
Diluted $0.46 $0.41 $0.99 $0.85
Weighted average number of shares
outstanding:
Basic 68,790 68,270 68,736 68,222
Diluted 69,370 68,943 69,283 68,927
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Commissions and Fees(1)
Three Months Ended June 30, 2004
(in thousands)
(unaudited)
Quarter Quarter Total Total Less Internal
Ended Ended Net Net Acquisition Net
6/30/04 6/30/03 Change Growth% Revenues Growth%
Florida Retail $36,032 $34,762 $1,270 3.7% $ - 3.7%
National Retail 47,508 33,673 13,835 41.1% 13,815 0.1%
Western Retail 29,146 24,212 4,934 20.4% 2,581 9.7%
Total Retail 112,686 92,647 20,039 21.6% 16,396 3.9%
Professional Programs 10,087 8,885 1,202 13.5% 849 4.0%
Special Programs 14,659 9,540 5,119 53.7% 4,997 1.3%
Total Programs 24,746 18,425 6,321 34.3% 5,846 2.6%
Brokerage 8,270 6,351 1,919 30.2% 895 16.1%
TPA Services 6,086 4,952 1,134 22.9% - 22.9%
Total Core Commissions
and Fees (1) $151,788 $122,375 $29,413 24.0% $23,137 5.1%
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
for the Three Months Ended June 30, 2004 and 2003
(in thousands)
(unaudited)
Quarter Quarter
Ended Ended
6/30/04 6/30/03
Total core commissions and fees(1) $151,788 $122,375
Contingent commissions 3,522 10,202
Divested business 1,439 4,680
Total Commission & Fees $156,749 $137,257
(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), 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)
(Unaudited)
June 30, December 31,
2004 2003
ASSETS
Current assets:
Cash and cash equivalents $36,384 $56,926
Restricted cash 133,194 116,543
Short-term investments 386 382
Premiums, commissions and fees receivable 146,669 146,672
Other current assets 17,833 22,943
Total current assets 334,466 343,466
Fixed assets, net 32,990 32,396
Goodwill, net 300,732 237,753
Amortizable intangible assets, net 308,361 232,934
Investments 10,353 10,845
Other assets 7,197 8,460
Total assets $994,099 $865,854
LIABILITIES
Current liabilities:
Premiums payable to insurance companies $216,788 $199,628
Premium deposits and credits due customers 23,769 22,223
Accounts payable 20,163 11,282
Accrued expenses 38,474 49,691
Current portion of long-term debt 68,455 18,692
Total current liabilities 367,649 301,516
Long-term debt 34,313 41,107
Deferred income taxes, net 17,176 15,018
Other liabilities 9,063 10,178
SHAREHOLDERS' EQUITY
Common stock, par value $0.10 per share;
authorized 280,000 shares; issued and
outstanding, 68,808 at 2004 and 68,561 at 6,881 6,856
2003
Additional paid-in capital 178,577 170,130
Retained earnings 375,695 316,822
Accumulated other comprehensive income 4,745 4,227
Total shareholders' equity 565,898 498,035
Total liabilities and shareholders' equity $994,099 $865,854
SOURCE Brown & Brown, Inc.
-0- 07/12/2004
/CONTACT: Cory T. Walker, Chief Financial Officer of Brown & Brown, Inc.,
+1-386-239-7250/
/Web site: http://www.bbinsurance.com/
(BRO)
CO: Brown & Brown, Inc.
ST: Florida
IN: INS
SU: ERN
KB
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3358 07/12/2004 20:06 EDT http://www.prnewswire.com