DAYTONA BEACH and TAMPA, Fla., Oct. 17 /PRNewswire-FirstCall/ -- Brown & Brown, Inc. (NYSE: BRO) announced net income for the third quarter of 2005 of $34,783,000, or $0.50 per share, an increase of 15.6% from the $30,086,000, or $0.43 per share, reported for the quarter ended September 30, 2004. Total revenue for the quarter ended September 30, 2005 was $190,645,000, compared with 2004 third-quarter revenue of $160,381,000, an increase of 18.9%.
Total revenue for the first nine months of 2005 was $588,950,000, compared with revenue of $483,888,000 for the comparable period in 2004, an increase of 21.7%. Net income for the first nine months of 2005 was $114,834,000, versus $98,587,000 during the comparable 2004 period, an increase of 16.5%. Net income per share for the nine months ended September 30, 2005 was $1.65, versus the $1.42 per share posted during the same 2004 period, an increase of 16.2%.
J. Hyatt Brown, Chairman and CEO, noted, "The third quarter was challenging given the continued softening of insurance premium rates, coupled with another heavy August/September hurricane season. Despite these challenges, our outstanding team of insurance professionals remains focused on driving new business sales and providing outstanding service to our customers."
President and Chief Operating Officer Jim W. Henderson added, "We are very proud of how well our recent acquisitions are performing and the strong operating results that they have added to our Company. Hyatt and I would also like to pay special tribute to our employees in our four Louisiana offices that were directly impacted by hurricanes Katrina and Rita. The manner in which our team responded to the needs of our customers and neighbors was remarkable. Our employees throughout the country have additionally responded with financial aid to the victims of these horrific storms."
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, 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' seventh largest independent insurance intermediary. The Company's Web address is http://www.bbinsurance.com .
This press release may contain 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 Arizona, 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
(in thousands, except per share data)
(unaudited)
For the For the
Three Months Ended Nine Months Ended
September 30 September 30
2005 2004 2005 2004
REVENUES
Commissions and fees $188,444 $158,852 $581,497 $479,915
Investment income 1,786 586 4,275 1,607
Other income, net 415 943 3,178 2,366
Total revenues 190,645 160,381 588,950 483,888
EXPENSES
Employee compensation and
benefits 94,009 79,449 278,493 232,000
Non-cash stock grant
compensation 681 374 2,360 1,885
Other operating expenses 25,638 22,042 78,760 63,421
Amortization 8,452 5,777 24,344 16,077
Depreciation 2,538 2,238 7,432 6,661
Interest 3,638 2,245 10,891 3,699
Total expenses 134,956 112,125 402,280 323,743
Income before income taxes 55,689 48,256 186,670 160,145
Income taxes 20,906 18,170 71,836 61,558
Net income $34,783 $30,086 $114,834 $98,587
Net income per share:
Basic $0.50 $0.44 $1.66 $1.43
Diluted $0.50 $0.43 $1.65 $1.42
Weighted average number of
shares outstanding:
Basic 69,242 69,009 69,187 68,828
Diluted 69,819 69,588 69,752 69,361
Dividends declared per share $0.08 $0.07 $0.24 $0.21
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Commissions and Fees(1)
Three Months Ended September 30, 2005
(in thousands)
(unaudited)
Quarter Quarter Total Total Less Internal
Ended Ended Net Net Acquisition Net
9/30/05 9/30/04 Change Growth % Revenues Growth %
Florida Retail $38,153 $33,917 $4,236 12.5 % $1,456 8.2 %
National Retail 49,174 49,177 (3) (0.0)% 1,176 (2.4)%
Western Retail 27,116 28,388 (1,272) (4.5)% 642 (6.7)%
Total Retail 114,443 111,482 2,961 2.7 % 3,274 (0.3)%
Professional
Programs 10,682 10,964 (282) (2.6)% -- (2.6)%
Special Programs 21,945 19,712 2,233 11.3 % 2,566 (1.7)%
Total Programs 32,627 30,676 1,951 6.4 % 2,566 (2.0)%
Brokerage 31,990 8,949 23,041 257.5 % 20,717 26.0 %
TPA Services 6,821 6,163 658 10.7 % -- 10.7 %
Total Core
Commissions
and Fees (1) $185,881 $157,270 $28,611 18.2 % $26,557 1.3 %
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
for the Three Months Ended September 30, 2005 and 2004
(in thousands)
(unaudited)
Quarter Quarter
Ended Ended
9/30/05 9/30/04
Total core commissions and fees(1) $185,881 $157,270
Contingent commissions 2,563 986
Divested business -- 596
Total commissions & fees $188,444 $158,852
(1) Total core commissions and fees are our total commissions and fees
less (i) contingent commissions (revenue derived from special revenue-
sharing commissions paid by insurance companies based primarily upon
the profitability of the business placed with such companies during
the prior year, and in some cases upon the volume or growth of that
business), 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)
September 30, December 31,
2005 2004
ASSETS
Current assets:
Cash and cash equivalents $ 76,730 $ 188,106
Restricted cash and investments 235,263 147,483
Short-term investments 2,639 3,163
Premiums, commissions and fees receivable 235,116 172,395
Other current assets 27,473 28,819
Total current assets 577,221 539,966
Fixed assets, net 38,526 33,438
Goodwill 528,296 360,843
Amortizable intangible assets, net 362,381 293,009
Investments 9,294 9,328
Other assets 10,021 12,933
Total assets $1,525,739 $1,249,517
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Premiums payable to insurance
companies $ 372,053 $ 242,414
Premium deposits and credits due
customers 36,083 32,273
Accounts payable 19,238 16,257
Accrued expenses 57,430 58,031
Current portion of long-term debt 50,065 16,135
Total current liabilities 534,869 365,110
Long-term debt 217,455 227,063
Deferred income taxes, net 29,571 24,859
Other liabilities 9,045 8,160
Shareholders' equity:
Common stock, par value $0.10 per share;
authorized 280,000 shares; issued and
outstanding 69,502 at 2005 and
69,159 at 2004 6,950 6,916
Additional paid-in capital 199,189 187,280
Retained earnings 523,879 425,662
Accumulated other comprehensive income 4,781 4,467
Total shareholders' equity 734,799 624,325
Total liabilities and shareholders'
equity $1,525,739 $1,249,517
SOURCE Brown & Brown, Inc.
-0- 10/17/2005
/CONTACT: Cory T. Walker, Chief Financial Officer, Brown & Brown,
+1-386-239-7250/
/Web site: http://www.bbinsurance.com /
(BRO)
CO: Brown & Brown, Inc.
ST: Florida
IN: INS
SU: ERN
AC-MD
-- FLM026 --
5124 10/17/2005 16:30 EDT http://www.prnewswire.com