Brown & Brown, Inc. Continues to Achieve New Levels of Record Earnings
DAYTONA BEACH, Fla., and TAMPA, Fla., Oct. 9 /PRNewswire-FirstCall/ -- Brown & Brown, Inc. (NYSE: BRO) announced record quarterly earnings for the third quarter of 2002 of $20,178,000 compared with $13,402,000 recorded in the third quarter of 2001, an increase of 50.6%. Net income per share rose 38.1% to $0.29 per share, compared with $0.21 per share in the third quarter of last year. Total revenue for the quarter ended September 30, 2002 was up 23.2% to $110,657,000 compared with the 2001 third-quarter revenue of $89,809,000.
Total revenue for the nine months ended September 30, 2002 was $336,595,000, compared with revenue for the same period in 2001 of $269,152,000, up 25.1%. Net income for the nine months ended September 30, 2002 was $61,741,000, or $0.91 per share, compared with the $38,698,000, or $0.61 per share, posted during the same period last year. This represents a 59.5% and 49.2% increase in net income and net income per share, respectively, over the same period in 2001.
J. Hyatt Brown, President and CEO, commented on the results, noting, We continue to be extremely pleased with our very strong pattern of growth, which has resulted in our 39th consecutive quarter of record increased earnings per share. These results are confirmation that our culture and operating model continue to produce expected results. Also, we are pleased to report that the acquisitions completed to date are contributing nicely to our growth in both revenues and net income, and that the acquisition pipeline continues to be full with many high-quality agencies at various stages of negotiation.
Brown & Brown, Inc. and its subsidiaries provide a broad range of insurance 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 intermediary 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 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; and the potential occurrence of a disaster that affects certain areas of the States of Arizona, 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 circumstances 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 Nine-Months
Ended Ended
September 30, September 30,
2002 2001 2002 2001
REVENUES
Commissions and fees $109,799 $89,092 $334,887 $264,570
Investment income 924 604 2,222 2,913
Other (loss) income (66) 113 (514) 1,669
Total revenues 110,657 89,809 336,595 269,152
EXPENSES
Employee compensation
and benefits 53,527 47,011 164,531 140,601
Non-cash stock
grant compensation 1,463 487 3,025 1,472
Other operating
expenses 15,815 13,232 47,173 40,861
Amortization 3,435 3,985 10,194 11,571
Depreciation 1,859 1,776 5,319 5,217
Interest 1,162 1,695 3,556 4,825
Total expenses 77,261 68,186 233,798 204,547
Income before income
taxes and minority
interest 33,396 21,623 102,797 64,605
Income taxes 12,830 7,907 39,550 24,803
Minority interest,
net of income taxes 388 314 1,506 1,104
Net income $20,178 $13,402 $61,741 $38,698
Net income per share:
Basic $0.30 $0.21 $0.92 $0.62
Diluted $0.29 $0.21 $0.91 $0.61
Weighted average number
of shares outstanding:
Basic 68,266 62,575 66,979 62,398
Diluted 68,994 63,243 67,745 62,998
BROWN & BROWN, INC.
INTERNAL GROWTH SCHEDULE
CORE COMMISSIONS AND FEES (1)
NINE-MONTHS ENDED SEPTEMBER 30, 2002
(Unaudited)
(in thousands)
Quarter Quarter Total Total Less Internal
Ended Ended Net Net Acquisition Net
9/30/02 9/30/01 Change Growth % Revenues Growth %
Florida Retail $31,780 $27,407 $4,373 16.0% $179 15.3%
National Retail 32,810 24,201 8,609 36.6% 7,358 5.2%
Western Retail 19,874 15,629 4,245 27.2% 3,339 5.8%
Total Retail 84,464 67,237 17,227 25.6% 10,876 9.4%
Professional
Programs 4,504 4,129 375 9.1% -- 9.1%
Special Programs 6,968 5,840 1,128 19.3% 609 8.9%
Total Programs 11,472 9,969 1,503 15.1% 609 9.0%
Brokerage 6,110 2,999 3,111 103.7% 1,573 51.3%
TPA Services 7,279 6,189 1,090 17.6% 214 14.2%
Total Core
Commissions
and Fees(1) $109,325 $86,394 $22,931 26.5% $13,272 11.2%
(1) Total Commissions and Fees excluding profit sharing contingency
revenues and divestitures.
BROWN & BROWN, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, December 31,
2002 2001
(Unaudited)
ASSETS
Cash and cash equivalents $144,982 $16,048
Restricted cash 89,530 50,328
Short-term investments 436 451
Premiums, commissions and fees receivable 112,363 101,449
Other current assets 14,657 8,230
Total current assets 361,968 176,506
Fixed assets, net 25,154 25,544
Goodwill, net 136,948 112,974
Other intangible assets, net 169,099 155,337
Investments 9,623 8,983
Deferred income taxes 3,297 1,519
Other assets 6,608 7,874
Total assets $712,697 $488,737
LIABILITIES
Premiums payable to insurance companies $172,056 $151,649
Premium deposits and credits due customers 18,134 12,078
Accounts payable 17,215 10,085
Accrued expenses 41,807 31,930
Current portion of long-term debt 19,456 20,855
Total current liabilities 268,668 226,597
Long-term debt 62,237 78,195
Other liabilities 5,470 6,308
Minority Interest 2,314 2,352
SHAREHOLDERS' EQUITY
Common stock, par value $0.10 per share;
authorized 140,000 shares; issued
68,196 at 2002 and 63,194 at 2001 6,820 6,319
Additional paid-in capital 158,775 11,181
Retained earnings 205,642 153,392
Accumulated other comprehensive income 2,771 4,393
Total shareholders' equity 374,008 175,285
Total liabilities
and shareholders' equity $712,697 $488,737
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SOURCE Brown & Brown, Inc.
-0- 10/09/2002
/CONTACT: Cory T. Walker, Chief Financial Officer of Brown & Brown, Inc., +1-386-239-7250/
/Web site: http://www.bbinsurance.com /