News Release
Cory T. Walker
February 15, 2010 Chief Financial Officer
(386) 239-7250
BROWN & BROWN, INC. |
ANNOUNCES |
2009 FOURTH-QUARTER AND YEAR-END FINANCIAL RESULTS |
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(Daytona Beach and Tampa, Florida) . . . Brown & Brown, Inc. (NYSE:BRO) today announced its net income and net income per share for the fourth quarter of 2009. |
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Net income for the fourth quarter of 2009 was $23,653,000, or $0.17 per share, compared with $33,373,000, or $0.24 per share for the same quarter of 2008. Total revenue for the fourth quarter ended December 31, 2009 was $214,162,000, compared with 2008 fourth-quarter revenue of $232,090,000.
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Total revenue for the twelve months ended December 31, 2009 was $967,877,000, compared with total revenue for the twelve months ended December 31, 2008 of $977,554,000. Net income for the twelve-month period ended December 31, 2009 was $153,294,000, or $1.08 per share, compared with $166,124,000, or $1.17 per share, for the same period of 2008. |
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J. Powell Brown, President and Chief Executive Officer of Brown & Brown, Inc., noted, "In 2009 we faced three strong headwinds - decreasing insurance rates, adverse economic conditions, and a soft merger and acquisition environment. Yet, in spite of these challenges, we became more efficient, added exceptional new talent and maintained the quality of service our clients expect and deserve." |
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Jim W. Henderson, Vice Chairman and Chief Operating Officer of the Company, added, "Since December 31, we have closed three deals that together represent $10.5 million of forward annualized revenues. In recent months, we have experienced an increase in merger and acquisition deal flow and we are encouraged by the quality of the opportunities and the depth of discussions. This is a great time in the market cycle to put our cash to work for our shareholders through investment in quality acquisition opportunities." |
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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, quasi-public entity, individual, trade and professional association clients nationwide, the Company is ranked by Business Insurance magazine as the United States' sixth largest independent insurance intermediary. The Company's Web address is www.bbinsurance.com. |
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This press release may contain certain statements relating to future results which are forward-looking statements, including those relating to future financial results and to 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 effects of legislative and regulatory changes in Florida pertaining to the insurance industry, including those relating to coastal property coverages; 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, Indiana, Michigan, New Jersey, New York, Pennsylvania, Texas and/or Washington, where significant portions of the Company's business are concentrated; and the cost and impact on the Company of previously disclosed 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. |
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Brown & Brown, Inc. |
CONSOLIDATED STATEMENTS OF INCOME |
(in thousands, except per share data) |
(unaudited) |
| For the |
| For the | ||
Three Months Ended |
| Twelve Months Ended | |||
December 31 |
| December 31 | |||
2009 | 2008 |
| 2009 | 2008 | |
REVENUES |
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Commissions and fees | $213,288 | $229,854 |
| $964,863 | $965,983 |
Investment income | 216 | 943 |
| 1,161 | 6,079 |
Other income, net | 658 | 1,293 |
| 1,853 | 5,492 |
Total revenues | 214,162 | 232,090 |
| 967,877 | 977,554 |
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EXPENSES |
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Employee compensation and benefits | 115,107 | 121,910 |
| 484,680 | 485,783 |
Non-cash stock-based compensation | 2,115 | 1,751 |
| 7,358 | 7,314 |
Other operating expenses | 36,382 | 35,359 |
| 143,389 | 137,352 |
Amortization | 12,485 | 11,842 |
| 49,857 | 46,631 |
Depreciation | 3,285 | 3,357 |
| 13,240 | 13,286 |
Interest | 3,711 | 3,645 |
| 14,599 | 14,690 |
Total expenses | 173,085 | 177,864 |
| 713,123 | 705,056 |
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Income before income taxes | 41,077 | 54,226 |
| 254,754 | 272,498 |
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Income taxes | 17,424 | 20,853 |
| 101,460 | 106,374 |
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Net income | $ 23,653 | $ 33,373 |
| $153,294 | $166,124 |
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Net income per share: |
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Basic | $0.17 | $0.24 |
| $1.08 | $1.18 |
Diluted | $0.17 | $0.24 |
| $1.08 | $1.17 |
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Weighted average number of shares |
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outstanding: |
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Basic | 137,531 | 136,799 |
| 137,173 | 136,319 |
| ====== | ====== |
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Diluted | 137,779 | 137,274 |
| 137,507 | 136,884 |
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Dividends declared per share | $0.0775 | $0.0750 |
| $0.3025 | $0.2850 |
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Brown & Brown, Inc. |
INTERNAL GROWTH SCHEDULE |
Core Commissions and Fees(1) |
Three Months Ended December 31, 2009 |
(in thousands) |
(unaudited) |
| Quarter | Quarter | Total | Total | Less | Internal | Internal |
| Ended | Ended | Net | Net | Acquisition | Net | Net |
| 12/31/09 | 12/31/08 | Change | Growth % | Revenues | Growth $ | Growth % |
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Florida Retail | $ 36,687 | $ 40,922 | $ (4,235) | (10.3)% | $ - | $ (4,235) | (10.3)% |
National Retail | 72,040 | 72,772 | (732) | (1.0)% | 4,531 | (5,263) | (7.2)% |
Western Retail | 22,670 | 24,606 | (1,936) | (7.9)% | 1,544 | (3,480) | (14.1)% |
Total Retail | 131,397 | 138,300 | (6,903) | (5.0)% | 6,075 | (12,978) | (9.4)% |
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Wholesale Brokerage | 31,410 | 32,156 | (746) | (2.3)% | 243 | (989) | (3.1)% |
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Professional Programs | 12,034 | 12,719 | (685) | (5.4)% | - | (685) | (5.4)% |
Special Programs | 29,914 | 33,188 | (3,274) | (9.9)% | 513 | (3,787) | (11.4)% |
Total National Programs | 41,948 | 45,907 | (3,959) | (8.6)% | 513 | (4,472) | (9.7)% |
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Services | 8,049 | 8,305 | (256) | (3.1)% | - | (256) | (3.1)% |
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Total Core Commissions |
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and Fees (1) | $212,804 | $224,668 | $(11,864) | (5.3)% | $6,831 | $(18,695) | (8.3)% |
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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 December 31, 2009 and 2008 |
(in thousands) |
(unaudited) |
| Quarter | Quarter |
| Ended | Ended |
| 12/31/09 | 12/31/08 |
Total core commissions and fees(1) | $212,804 | $224,668 |
Contingent commissions | 484 | 4,930 |
Divested business | - | 256 |
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Total commission & fees | $213,288 | $229,854 |
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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). |
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Brown & Brown, Inc. |
CONSOLIDATED BALANCE SHEETS |
(in thousands, except per share data) |
(unaudited) |
| December 31, | December 31, |
| 2009 | 2008 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents | $ 197,113 | $ 78,557 |
Restricted cash and investments | 155,257 | 144,750 |
Short-term investments | 8,213 | 7,511 |
Premiums, commissions and fees receivable | 209,462 | 244,515 |
Deferred income taxes | 11,791 | 14,171 |
Other current assets | 31,863 | 33,528 |
Total current assets | 613,699 | 523,032 |
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Fixed assets, net | 61,467 | 63,520 |
Goodwill | 1,074,397 | 1,023,372 |
Amortizable intangible assets, net | 468,862 | 495,627 |
Other assets | 5,801 | 14,029 |
Total assets | $2,224,226 | $2,119,580 |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current liabilities: |
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Premiums payable to insurance companies | $ 310,296 | $ 357,707 |
Premium deposits and credits due customers | 37,715 | 43,577 |
Accounts payable | 17,431 | 18,872 |
Accrued expenses and other liabilities | 96,387 | 96,325 |
Current portion of long-term debt | 17,124 | 6,162 |
Total current liabilities | 478,953 | 522,643 |
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Long-term debt | 250,209 | 253,616 |
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Deferred income taxes, net | 115,609 | 90,143 |
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Other liabilities | 9,581 | 11,437 |
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Shareholders' equity: |
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Common stock, par value $0.10 per share; |
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authorized 280,000 shares; issues and |
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outstanding 142,076 at 2009 and 141,544 at 2008 | 14,208 | 14,154 |
Additional paid-in capital | 267,856 | 250,167 |
Retained earnings | 1,087,805 | 977,407 |
Accumulated other comprehensive income | 5 | 13 |
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Total shareholders' equity | 1,369,874 | 1,241,741 |
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Total liabilities and shareholders' equity | $2,224,226 | $2,119,580 |
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