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UNITED
STATES
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SECURITIES
AND EXCHANGE COMMISSION
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Washington,
D.C. 20549
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FORM
8-K
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CURRENT
REPORT
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Pursuant
to Section 13 or 15(d) of the
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Securities
Exchange Act of 1934
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Date
of Report (Date of earliest event reported): April 24,
2006
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BROWN
& BROWN, INC.
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(Exact
name of registrant as specified in its charter)
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Florida
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0-7201
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59-0864469
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(State
or other jurisdiction
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(Commission
File Number)
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(IRS
Employer
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of
incorporation)
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Identification
No.)
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220
South Ridgewood Avenue, Florida 32114
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(Address
of principal executive offices) (Zip Code)
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Registrant's
telephone number, including area code: (386)
252-9601
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N/A
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(Former
name or former address, if changed since last report)
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Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under
any
of the following provisions:
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[
] Written communications pursuant to Rule 425 under the Securities
Act (17
CFR 230.425)
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[
] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17
CFR 240.14a-12)
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[
] Pre-commencement communications pursuant to Rule 14d-2(b) under
the
Exchange Act (17 CFR 240.14d-2(b))
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[
] Pre-commencement communications pursuant to Rule 13e-4(c) under
the
Exchange Act (17 CFR 240.13e-4(c))
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| Item 2.02 Results of Operations and Financial Condition. | |
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On
April 24, 2006, Brown & Brown, Inc. issued
a press release announcing its results of operations for the first
quarter
ended March 31, 2006. A copy of the press release is furnished as
Exhibit
99.1 hereto and is incorporated herein by reference.
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The
information furnished herewith pursuant to Item 2.02 of this Current
Report shall not be deemed to be filed for the purposes of Section 18
of the Securities Exchange Act of 1934, as amended, or otherwise
subject
to the liabilities of that section. The information in this Current
Report
shall not be incorporated by reference into any registration statement
or
other document pursuant to the Securities Act of 1933, as amended,
except
as shall be expressly set forth by specific reference in such
filing.
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SIGNATURES
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Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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| BROWN & BROWN, INC. | |
| (Registrant) | |
| By: /S/ CORY T. WALKER | |
| Cory T. Walker, Chief Financial Officer | |
| Date: April 24, 2006 |
2
 |
News Release |
| Cory T. Walker | |
| April 24, 2006 | Chief Financial Officer |
| (386) 239-7250 |
BROWN
& BROWN, INC.
ANNOUNCES
A 16.3% INCREASE IN FIRST QUARTER NET INCOME
(Daytona
Beach and Tampa, Florida)
. . .
Brown & Brown, Inc. (NYSE:BRO) today announced new records for its net
income and net income per share in the first quarter.
Net
income per share for the quarter ended March 31, 2006 was $0.36, an increase
of
16.1% over the $0.31 in net income per share reported for the quarter ended
March 31, 2005. Net income rose to $50,026,000 for the first quarter of 2006,
versus net income of $43,018,000 for the quarter ended March 31, 2005, an
increase of 16.3%.
Total
revenue for the quarter ended March 31, 2006 was up 13.9%, to $230,582,000,
compared with $202,374,000 recorded in the corresponding quarter in 2005.
J.
Hyatt
Brown, Chairman and Chief Executive Officer, noted, “The wind storm capacity
crunch, in coastal areas from Texas to Virginia, is the most severe that I
have
seen in my 47-year insurance career. This tumultuous market place, combined
with
softening property and casualty pricing, outside of wind-prone areas, presents
challenges for our customers and our professionals. We are responding positively
and aggressively in finding solutions to those needs. That being said,
all-in-all we are pleased with the quarter’s results.”
Jim
W.
Henderson, President and Chief Operating Officer, added, “Since the beginning of
the year, we have completed seven acquisitions with total annualized revenues
of
approximately $24.6 million, most of which already operate at expected Brown
& Brown margin levels. Our operating model continues to attract the best-in-
class of acquisition candidates, including small and medium agencies with
industry-leading margins. Our success with both small and large agencies has
provided Brown & Brown with a unique pipeline of 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, 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 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
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.
#
# # # #
-2-
Brown
& Brown, Inc.
CONSOLIDATED
STATEMENTS OF INCOME
For
the Three Months Ended March 31, 2006 and 2005
(in
thousands, except per share data)
(unaudited)
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2006
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2005
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REVENUES
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Commissions
and fees
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$
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227,915
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$
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200,315
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Investment
income
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2,209
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965
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|||||
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Other
income, net
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458
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1,094
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Total
revenues
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230,582
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202,374
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EXPENSES
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Employee
compensation and benefits
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100,730
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90,384
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Non-cash
stock-based compensation
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2,330
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891
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Other
operating expenses
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30,969
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27,142
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Amortization
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9,000
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7,535
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Depreciation
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2,595
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2,367
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Interest
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3,522
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3,542
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Total
expenses
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149,146
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131,861
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Income
before income taxes
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81,436
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70,513
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Income
taxes
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31,410
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27,495
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Net
income
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$
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50,026
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$
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43,018
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Net
income per share:
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Basic
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$
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0.36
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$
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0.31
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Diluted
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$
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0.36
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$
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0.31
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Weighted
average number of shares outstanding:
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Basic
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139,383
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138,324
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Diluted
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140,823
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139,422
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Dividends
declared per share
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$
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0.05
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$
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0.04
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-3-
Brown
& Brown, Inc.
INTERNAL
GROWTH SCHEDULE
Core
Commissions and Fees(1)
Three
Months Ended March 31, 2006
(in
thousands)
(unaudited)
|
Quarter
Ended
3/31/06
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Quarter
Ended
3/31/05
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Total
Net
Change
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Total
Net
Growth
%
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Less
Acquisition
Revenues
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Internal
Net
Growth
%
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Florida
Retail
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$
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39,260
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$
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37,311
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$
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1,949
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5.2%
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$
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284
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4.5%
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National
Retail
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51,257
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49,426
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1,831
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3.7%
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3,075
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(2.5)%
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Western
Retail
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25,028
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25,117
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(89
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)
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(0.4)%
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1,370
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(5.8)%
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Total
Retail
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115,545
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111,854
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3,691
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3.3%
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4,729
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(0.9)%
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Professional
Programs
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10,338
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10,966
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(628
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)
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(5.7)%
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-
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(5.7)%
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Special
Programs
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26,778
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21,413
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5,365
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25.1%
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2,523
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13.3%
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Total
Programs
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37,116
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32,379
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4,737
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14.6%
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2,523
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6.8%
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Brokerage
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35,143
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21,366
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13,777
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64.5%
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13,065
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3.3%
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TPA
Services
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6,644
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6,384
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260
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4.1%
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-
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4.1%
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Total
Core Commissions and Fees (1)
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$
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194,448
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$
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171,983
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$
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22,465
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13.1%
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$
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20,317
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1.2%
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|||||||
Reconciliation
of Internal Growth Schedule
to
Total Commissions and Fees
Included
in the Consolidated Statements of Income
for
the Three Months Ended March 31, 2006 and 2005
(in
thousands)
(unaudited)
|
Quarter
Ended
3/31/06
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Quarter
Ended
3/31/05
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||||||
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Total
core commissions and fees(1)
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$
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194,448
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$
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171,983
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Contingent
commissions
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33,467
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27,844
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Divested
business
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-
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488
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Total
commission & fees
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$
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227,915
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$
|
200,315
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| (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). |
-4-
Brown
& Brown, Inc.
CONSOLIDATED
BALANCE SHEETS
(in
thousands, except per share data)
(unaudited)
|
March
31,
2006
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December
31,
2005
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ASSETS
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Current
assets:
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Cash
and cash equivalents
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$
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73,683
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$
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100,580
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Restricted
cash and investments
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256,085
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229,872
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Short-term
investments
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2,767
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2,748
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Premiums,
commissions and fees receivable
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245,357
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257,930
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|||||
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Other
current assets
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29,141
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28,637
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|||||
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Total
current assets
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607,033
|
619,767
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|||||
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Fixed
assets, net
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41,726
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39,398
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|||||
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Goodwill
|
623,124
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549,040
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|||||
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Amortizable
intangible assets, net
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387,151
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377,907
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|||||
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Investments
|
9,119
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8,421
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|||||
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Other
assets
|
14,249
|
14,127
|
|||||
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Total
assets
|
$
|
1,682,402
|
$
|
1,608,660
|
|||
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LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|||||||
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Current
liabilities:
|
|||||||
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Premiums
payable to insurance companies
|
$
|
419,097
|
$
|
397,466
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|||
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Premium
deposits and credits due customers
|
27,048
|
34,027
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|||||
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Accounts
payable
|
50,318
|
21,161
|
|||||
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Accrued
expenses
|
42,870
|
74,534
|
|||||
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Current
portion of long-term debt
|
73,370
|
55,630
|
|||||
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Total
current liabilities
|
612,703
|
582,818
|
|||||
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Long-term
debt
|
210,832
|
214,179
|
|||||
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Deferred
income taxes, net
|
34,961
|
35,489
|
|||||
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Other
liabilities
|
13,304
|
11,830
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|||||
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Shareholders’
equity:
|
|||||||
|
Common
stock, par value $0.10 per share;
authorized
280,000 shares; issued and
outstanding
139,516 at 2006 and 139,383 at 2005
|
13,952
|
13,938
|
|||||
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Additional
paid-in capital
|
196,013
|
193,313
|
|||||
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Retained
earnings
|
595,703
|
552,647
|
|||||
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Accumulated
other comprehensive income
|
4,934
|
4,446
|
|||||
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Total
shareholders’ equity
|
810,602
|
764,344
|
|||||
|
Total liabilities and shareholders’ equity
|
$
|
1,682,402
|
$
|
1,608,660
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-5-