Brown & Brown, Inc. Announces an 18.4% Increase in First Quarter Net Income
DAYTONA BEACH, Fla. and TAMPA, Fla., April 19 /PRNewswire-FirstCall/ -- Brown & Brown, Inc. (NYSE: BRO) today announced a new record for its net income and net income per share in the first quarter.
Net income per share for the quarter ended March 31, 2005 was $0.62, an increase of 17% over the $0.53 in net income per share reported for the quarter ended March 31, 2004. Net income rose to $43,018,000 for the first quarter of 2005, versus net income of $36,348,000 for the quarter ended March 31, 2004, an increase of 18.4%.
Total revenue for the quarter ended March 31, 2005 was up 22.2%, to $202,374,000, compared with $165,565,000 recorded in the corresponding quarter in 2004.
J. Hyatt Brown, Chairman and Chief Executive Officer, noted, "Our results continue to reflect the shoulder-to-the-wheel efforts of our people. Our results are even more rewarding when considering the current softening of commercial insurance premium rates. Our goal is to maintain our intense focus on the execution of our stated game plan and to continue providing the very best possible service to our growing list of clients across the nation."
Jim W. Henderson, President and Chief Operating Officer, added, "In the mergers and acquisitions arena, 2005 has started even better than we could have imagined. We completed several outstanding acquisitions during the first quarter, with estimated annualized revenues of $91.6 million. Most of these entities already operate within our desired operating profit percent range. We will continue to exercise our dogged discipline to choose the best acquisition opportunities."
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 and trade and association clients nationwide, the Company is ranked by Business Insurance magazine as the United States' eighth 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, including those relating to continuing our revenue, earnings and operating growth, and to 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 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 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 identification, consummation and integration of 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 pending litigation and regulatory inquiries regarding industry and Company practices with respect to compensation received from insurance carriers, certain of which practices are currently under review by a committee of independent members of the Company's Board of Directors. 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
For the Three Months Ended March 31, 2005 and 2004
(in thousands, except per share data)
(unaudited)
2005 2004
REVENUES
Commissions and fees $200,315 $164,314
Investment income 965 688
Other income, net 1,094 563
Total revenues 202,374 165,565
EXPENSES
Employee compensation and benefits 90,384 76,282
Non-cash stock grant compensation 891 845
Other operating expenses 27,142 21,396
Amortization 7,535 4,817
Depreciation 2,367 2,154
Interest 3,542 711
Total expenses 131,861 106,205
Income before income taxes 70,513 59,360
Income taxes 27,495 23,012
Net income $43,018 $36,348
Net income per share:
Basic $0.62 $0.53
Diluted $0.62 $0.53
Weighted average number of shares outstanding:
Basic 69,162 68,681
Diluted 69,711 69,207
Dividends declared per share $0.08 $0.07
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Commissions and Fees(1)
Three Months Ended March 31, 2005
(in thousands)
(unaudited)
Quarter Quarter Total Total Less Internal
Ended Ended Net Net Acquisition Net
3/31/05 3/31/04 Change Growth % Revenues Growth %
Florida Retail $37,205 $33,873 $3,332 9.8% $1,047 6.7%
National Retail 50,476 40,098 10,378 25.9% 10,288 0.2%
Western Retail 25,351 25,629 (278) (1.1)% 857 (4.4)%
Total Retail 113,032 99,600 13,432 13.5% 12,192 1.2%
Professional
Programs 10,828 10,317 511 5.0% 715 (2.0)%
Special Programs 20,861 11,781 9,080 77.1% 7,320 14.9%
Total
Programs 31,689 22,098 9,591 43.4% 8,035 7.0%
Brokerage 21,366 8,670 12,696 146.4% 11,355 15.5%
TPA Services 6,384 5,737 647 11.3% -- 11.3%
Total Core
Commissions
and Fees (1) $172,471 $136,105 $36,366 26.7% $31,582 3.5%
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
for the Three Months Ended March 31, 2005 and 2004
(in thousands)
(unaudited)
Quarter Quarter
Ended Ended
3/31/05 3/31/04
Total core commissions and fees(1) $172,471 $136,105
Contingent commissions 27,844 25,776
Divested business -- 2,433
Total commission & fees $200,315 $164,314
(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, except per share data)
(unaudited)
March 31, December 31,
2005 2004
ASSETS
Current assets:
Cash and cash equivalents $84,982 $188,106
Restricted cash and investments 198,132 147,483
Short-term investments 3,342 3,163
Premiums, commissions and fees receivable 214,702 172,395
Other current assets 22,532 28,819
Total current assets 523,690 539,966
Fixed assets, net 37,451 33,438
Goodwill 511,082 360,843
Amortizable intangible assets, net 371,134 293,009
Investments 8,305 9,328
Other assets 9,863 12,933
Total assets $1,461,525 $1,249,517
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Premiums payable to insurance companies $333,173 $242,414
Premium deposits and credits due customers 24,715 32,273
Accounts payable 43,661 16,257
Accrued expenses 38,058 58,031
Current portion of long-term debt 66,019 16,135
Total current liabilities 505,626 365,110
Long-term debt 258,545 227,063
Deferred income taxes, net 24,576 24,859
Other liabilities 10,279 8,160
Shareholders' equity:
Common stock, par value $0.10 per share;
authorized 280,000 shares; issued and
outstanding 69,157 at 2005 and 69,159 at 6,916 6,916
2004
Additional paid-in capital 188,452 187,280
Retained earnings 463,147 425,662
Accumulated other comprehensive income 3,984 4,467
Total shareholders' equity 662,499 624,325
Total liabilities and shareholders' equity $1,461,525 $1,249,517
SOURCE Brown & Brown, Inc.
-0- 04/19/2005
/CONTACT: Cory T. Walker, Chief Financial Officer, Brown & Brown, Inc.,
+1-386-239-7250/
/Web site: http://www.bbinsurance.com /
(BRO)
CO: Brown & Brown, Inc.
ST: Florida
IN: INS FIN
SU: ERN
MR-MD
-- FLTU025 --
6743 04/19/2005 16:22 EDT http://www.prnewswire.com