Brown & Brown, Inc. Achieves 10th Consecutive Record Year With 2002 Results
DAYTONA BEACH, Fla. and TAMPA, Fla., Jan. 15 /PRNewswire-FirstCall/ -- Brown & Brown, Inc. (NYSE: BRO) today announced record earnings for 2002. Net income rose to $83,122,000, or $1.22 per share, an increase of 54.2% over the $53,913,000, or $0.85 per share earned in year 2001. Total revenues for the year rose to $455,742,000, up 24.9% versus the $365,029,000 achieved in 2001.
Fourth quarter 2002 net income increased to $21,380,000, or $0.31 per share, compared with the 2001 fourth quarter net income of $15,215,000, or $0.24 per share, a 40.5% increase. Total revenue for the 2002 fourth quarter was $119,147,000, compared to 2001 fourth quarter revenue of $95,877,000, a 24.3% increase.
"Consistency of earnings is the benchmark investors use to gain confidence in the future of their investment. When we became publicly owned in 1993, a commitment was made to grow at least 15% per quarter, ad infinitum. For 10 years, we have delivered on that commitment! Our commitment for continued exceptional earnings growth was exemplified by our 46% EPS growth in 2001 followed by 2002's 44% EPS growth. Because of our operating systems and the quality of our people, Brown & Brown is well positioned to continue to deliver outstanding results. Four years ago we announced our goal to record a 28% pre-tax margin by 2002. We have achieved that goal. The stage is now set to accomplish our next goal, in the not too distant future, of a billion dollars in revenue and a 40% operating margin (pre-tax income with interest and amortization expense added back)," noted Chairman and Chief Executive Officer, J. Hyatt Brown.
Jim W. Henderson, President and Chief Operating Officer added, "We con- tinue to see ever increasing opportunity for new merger and acquisition relationships that should continue our external growth. At the same time, we anticipate the continuation of firm insurance rates and rationed capacity, to help us maintain favorable internal growth through 2003, and probably beyond."
Brown & Brown, Inc. and its subsidiaries provide a broad range of insur- ance 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 inter- mediary 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 his- torical 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 pres- sures; the competitive environment; the integration of the Company's opera- tions 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 circum- stances that subsequently occur or of which we hereafter become aware.
BROWN & BROWN, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share data)
For the For the
Three-Months Twelve-Months
Ended Ended
December 31, December 31,
2002 2001 2002 2001
REVENUES
Commissions and fees $117,402 $95,127 $452,289 $359,697
Investment income 723 773 2,945 3,686
Other income (loss) 1,022 (23) 508 1,646
Total revenues 119,147 95,877 455,742 365,029
EXPENSES
Employee compensation and benefits 60,224 47,052 224,755 187,653
Non-cash stock grant compensation 798 512 3,823 1,984
Other operating expenses 19,381 15,954 66,554 56,815
Amortization 3,848 4,289 14,042 15,860
Depreciation 1,926 1,319 7,245 6,536
Interest 1,103 878 4,659 5,703
Total expenses 87,280 70,004 321,078 274,551
Income before income taxes and
minority interest 31,867 25,873 134,664 90,478
Income taxes 9,721 10,031 49,271 34,834
Minority interest, net of income
taxes 766 627 2,271 1,731
Net income $21,380 $15,215 $83,122 $53,913
Net income per share:
Basic $0.31 $0.24 $1.24 $0.86
Diluted $0.31 $0.24 $1.22 $0.85
Weighted average number of shares
outstanding:
Basic 68,187 63,053 67,283 62,563
Diluted 68,953 63,837 68,043 63,222
BROWN & BROWN, INC.
INTERNAL GROWTH SCHEDULE
CORE COMMISSIONS AND FEES (1)
THREE-MONTHS ENDED DECEMBER 31, 2002
(Unaudited)
(in thousands)
Less
Quarter Quarter Total Total Acquisi- Internal
Ended Ended Net Net tion Net
12/31/02 12/31/01 Change Growth% Revenues Growth%
Florida Retail $31,843 $28,098 $3,745 13.3% $130 12.9%
National Retail 31,627 25,977 5,650 21.8% 5,130 2.0%
Western Retail 18,459 15,065 3,394 22.5% 2,269 7.5%
Total Retail 81,929 69,140 12,789 18.5% 7,529 7.6%
Professional
Programs 6,871 3,546 3,325 93.8% 3,318 0.2%
Special Programs 11,858 8,745 3,113 35.6% -- 35.6%
Total Programs 18,729 12,291 6,438 52.4% 3,318 25.4%
Brokerage 6,482 2,969 3,513 118.3% 1,295 74.7%
TPA Services 7,245 6,338 907 14.3% -- 14.3%
Total Core
Commissions and
Fees (1) $114,385 $90,738 $23,647 26.1% $12,142 12.7%
(1) Total Commissions and Fees excluding profit sharing contingency revenues and divestitures.
BROWN & BROWN, INC.
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands)
December 31, December 31,
2002 2001
ASSETS
Current Assets:
Cash and cash equivalents $91,247 $16,048
Restricted cash 79,796 50,328
Short-term investments 446 451
Premiums, commissions and fees 144,244 101,449
receivable
Other current assets 16,527 8,230
Total current assets 332,260 176,506
Fixed assets, net 24,730 25,544
Goodwill, net 176,269 112,974
Other intangible assets, net 203,984 155,337
Investments 8,585 8,983
Deferred income taxes 1,788 1,519
Other assets 6,733 7,874
Total assets $754,349 $488,737
LIABILITIES
Currrent Liabilities:
Premiums payable to insurance
companies $191,682 $151,649
Premium deposits and credits due
clients 16,723 12,078
Accounts payable 15,393 10,085
Accrued expenses 46,586 31,930
Current portion of long-term
debt 27,334 20,855
Total current liabilities 297,718 226,597
Long-term debt 57,585 78,195
Other liabilities 5,604 6,308
Minority Interest 1,852 2,352
SHAREHOLDERS' EQUITY
Common stock, par value $0.10 per
share; authorized 140,000 shares;
issued 68,178 at 2002 and 63,194 at 2001 6,818 6,319
Additional paid-in capital 159,564 11,181
Retained earnings 223,102 153,392
Accumulated other comprehensive
income 2,106 4,393
Total shareholders' equity 391,590 175,285
Total liabilities and share
holders' equity $754,349 $488,737
SOURCE Brown & Brown, Inc.
-0- 01/15/2003
/CONTACT: Cory T. Walker, Chief Financial Officer, Brown & Brown, Inc., +1-386-239-7250/