EX-99.1 CHARTER 3 er110.htm EARNINGS RELEASE

 

 

  

                                             News Release
                                                                                                Cory T. Walker
April 19, 2010                                                                          Chief Financial Officer
                                                                                                (386) 239-7250

 

 

 

BROWN & BROWN, INC. 

ANNOUNCES

2010 FIRST-QUARTER FINANCIAL RESULTS

 

(Daytona Beach and Tampa, Florida) . . . Brown & Brown, Inc. (NYSE:BRO) today announced its financial results for the first quarter of 2010. 

 

Net income for the first quarter of 2010 was $44,128,000, or $0.31 per share, compared with $48,012,000, or $0.34 per share for the same quarter of 2009.  Total revenue for the first quarter ended March 31, 2010 was $252,273,000, compared with 2009 first-quarter revenue of $263,580,000. 

 

J. Powell Brown, President and Chief Executive Officer of Brown & Brown, Inc., noted, "The economy continues to negatively impact middle-market industries.  Excluding our Proctor Financial, Inc. subsidiary, we fared incrementally better in the first quarter of 2010 than in the first quarter of 2009.  Shrinking insurable exposure units continue to impact our results."

 

Jim W. Henderson, Vice Chairman and Chief Operating Officer of the Company, added, "We continue to accrete cash to a record level in the Company and we remain committed to acquiring quality agencies.  An improving economy is an important component of a robust merger and acquisition environment."

 

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. 

 

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

For the Three Months Ended March 31, 2010 and 2009

  (in thousands, except per share data)

(unaudited)

                    

 

 

2010

2009
REVENUES

 

 

Commissions and fees

$250,674

$263,964

Investment income

331

310

Other income (loss), net

     1,268

       (694)

    Total revenues

  252,273

   263,580

 

 

 
EXPENSES

 

 

Employee compensation and benefits

122,183

127,341

Non-cash stock-based compensation

1,955

1,816

Other operating expenses

36,333

35,864

Amortization

12,553

12,385

Depreciation

3,253

3,333

Interest

3,608

3,634

Change in estimated acquisition earn-out payable

     (696)

               -

     Total expenses

  179,189

  184,373

 

 

 

Income before income taxes

73,084

79,207

 

 

 

Income taxes

   28,956

   31,195

 

 

 

Net income

$ 44,128

$ 48,012

 

 

 

Net income per share:

 

 

  Basic

$0.31

$0.34

  Diluted

$0.31

$0.34

 

 

 

Weighted average number of shares outstanding:

 

 

  Basic

137,623

136,935

  Diluted

137,791

137,220

 

 

 

Dividends declared per share

$0.0775

$0.075

 

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Brown & Brown, Inc.

INTERNAL GROWTH SCHEDULE

Core Commissions and Fees(1)

Three Months Ended March 31, 2010

  (in thousands)

(unaudited)

   

 

 

Quarter
Ended
03/31/10

Quarter
Ended
03/31/09

Total
Net
Change

Total
Net
Growth %

Less
Acquisition
Revenues

Internal
Net
Growth $

Internal
Net
Growth %

 

 

 

 

 

 

 

 

Florida Retail

      $  37,376

      $ 40,079

$ (2,703)

    (6.7)%

$         14

$ (2,717)

   (6.8)%

National Retail

77,905

77,474

    431

   0.6%

   2,140

         (1,709)

   (2.2)%

Western Retail

    21,960

    25,068

   (3,108)

     (12.4)%

         926

    (4,034)

   (16.1)%

  Total Retail

  137,241

  142,621

   (5,380)

   (3.8)%

    3,080

      (8,460)

   (5.9)%

 

 

 

 

 

 

 

 

Professional Programs

9,826

10,729

        (903)

    (8.4)%

        -

          (903)

(8.4)%

Special Programs

28,573

    37,811

   (9,238)

  (24.4)%

      552

    (9,790)

   (25.9)%

  Total National Programs

    38,399

     48,540

  (10,141)

    (20.9)%

      552

    (10,693)

     (22.0)%

 

 

 

 

 

 

 

 

Wholesale Brokerage

33,802

34,462

      (660)

    (1.9)%

     419

     (1,079)

  (3.1)%

 

 

 

 

 

 

 

 

Services

     8,996

     8,085

           911

  11.3%

       886

             25

  0.3%

 

 

 

 

 

 

 

 

Total Core Commissions
    and Fees (1)

 

$218,438

 

$233,708

 

$(15,270)

 

(6.5)%

 

$4,937

 

$(20,207)

 

(8.6)%

 

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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, 2010 and 2009

(in thousands)

(unaudited)

 

 

 

 

Quarter
Ended
03/31/10

Quarter
Ended
03/31/09

Total core commissions and fees(1)

$218,438

$233,708

Contingent commissions

  32,236

  29,926

Divested business

              -

          330

 

 

 

Total commission & fees

$250,674

$263,964

 

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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).

 


 

Brown & Brown, Inc.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(unaudited)

 

                                                                                        

 

March 31,

December 31,

 

2010

2009

ASSETS

 

 

Current assets:

 

 

  Cash and cash equivalents

$   228,805

$    197,113

  Restricted cash and investments

   146,360

   155,257

  Short-term investments

8,345

8,213

  Premiums, commissions and fees receivable

211,897

209,462

  Deferred income taxes

-

11,791

  Other current assets

       30,717

       31,863

     Total current assets

626,124

613,699

 

 

 

Fixed assets, net

60,325

61,467

Goodwill

1,091,791

1,074,397

Amortizable intangible assets, net

465,290

468,862

Other assets

         5,907

       5,801

    Total assets

$2,249,437

$2,224,226

 

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LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

Current liabilities:

 

 

  Premiums payable to insurance companies

$   327,281

$   310,296

  Premium deposits and credits due customers

31,314

37,715

  Accounts payable

29,353

17,431

  Accrued expenses and other liabilities

61,686

96,387

  Current portion of long-term debt

       6,015

       17,124

    Total current liabilities

455,649

478,953

 

 

 

Long-term debt

250,030

250,209

 

 

 

Deferred income taxes, net

119,184

115,609

 

 

 

Other liabilities

19,177

9,581

 

 

 

Shareholders' equity:

 

 

  Common stock, par value $0.10 per share;
     authorized 280,000 shares;  issued and
     outstanding 142,128 at 2010 and 142,076 at 2009

 

14,213

 

14,208

  Additional paid-in capital

270,261

267,856

  Retained earnings

1,120,918

1,087,805

  Accumulated other comprehensive income

                5

              5

 

 

 

    Total shareholders' equity

  1,405,397

  1,369,874

 

 

 

    Total liabilities and shareholders' equity

$2,249,437

$2,224,226

 

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