DAYTONA BEACH, FL and TAMPA, FL -- 04/21/08 --
Brown & Brown, Inc. (NYSE: BRO) today announced its net income and net income per share for the first
quarter of 2008. Additionally, it announced that its commissions and fees
revenues for the first quarter of 2008 increased 3.2% over the first
quarter of 2007.
Net income for the first quarter of 2008 was $51,760,000 or $0.37 per
share, compared with $59,727,000 or $0.42 per share for the same quarter of
2007. Excluding the non-recurring gain of $8,840,000 on the sale of
Rock-Tenn shares in the first quarter of 2007, net income for the first
quarter of 2007 was $54,343,000 or $0.38 per share.
Total revenues for the quarter ended March 31, 2008 were $256,715,000,
compared with $258,513,000 recorded in the corresponding quarter of 2007.
Excluding the $8,840,000 non-recurring gain on the sale of stock of
Rock-Tenn Company in the first quarter of 2007, total revenues for the
quarter ended March 31, 2008 increased 2.8% over the adjusted total
revenues in the corresponding quarter of 2007, which equaled $249,673,000.
J. Hyatt Brown, Chairman and Chief Executive Officer, noted, "Our results
are not surprising given the continuation of the most difficult insurance
market environment in recent memory. We have great faith in the ability of
our leaders at each of our decentralized office locations to continue to
drive the sales and operating margins in the most effective manner given
their local market environments. This leadership depth is critical to our
ability to continue industry-leading results even in the face of continued
difficult market conditions."
Jim W. Henderson, Vice Chairman and Chief Operating Officer, added, "For
the first quarter and April to date, we have announced the completion of 13
acquisitions with annualized revenue of $43.8 million. We believe this
select group of agencies is the best in class and we are proud to have them
join the team. The continued soft market is a catalyst for change and has
stimulated an abundance of M & A opportunities. Our operating model and
available liquidity combine to make us an attractive option for like-minded
sellers."
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 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 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 recent
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, Georgia, 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.
Brown & Brown, Inc.
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended March 31, 2008 and 2007
(in thousands, except per share data)
(unaudited)
2008 2007
--------- ---------
REVENUES
Commissions and fees $ 253,528 $ 245,559
Investment income 1,999 11,579
Other income, net 1,188 1,375
--------- ---------
Total revenues 256,715 258,513
--------- ---------
EXPENSES
Employee compensation and benefits 121,187 110,810
Non-cash stock-based compensation 1,944 1,502
Other operating expenses 31,204 31,923
Amortization 11,116 9,502
Depreciation 3,246 3,040
Interest 3,434 3,634
--------- ---------
Total expenses 172,131 160,411
--------- ---------
Income before income taxes 84,584 98,102
Income taxes 32,824 38,375
--------- ---------
Net income $ 51,760 $ 59,727
========= =========
Net income per share:
Basic $ 0.37 $ 0.43
========= =========
Diluted $ 0.37 $ 0.42
========= =========
Weighted average number of shares outstanding:
Basic 140,704 140,221
========= =========
Diluted 141,327 141,194
========= =========
Dividends declared per share $ 0.07 $ 0.06
========= =========
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Commissions and Fees(1)
Three Months Ended March 31, 2008
(in thousands)
(unaudited)
Total Less Internal Internal
Quarter Quarter Total Net Acquisi- Net Net
Ended Ended Net Growth tion Growth Growth
3/31/08 3/31/07 Change % Revenues $ %
--------- --------- -------- ----- -------- -------- -----
Florida
Retail $ 41,635 $ 43,891 $ (2,256) (5.1)% $ 921 $ (3,177) (7.2)%
National
Retail 70,685 51,701 18,984 36.7 % 19,842 (858) (1.7)%
Western
Retail 21,704 22,426 (722) (3.2)% 262 (984) (4.4)%
--------- --------- -------- -------- --------
Total
Retail 134,024 118,018 16,006 13.6 % 21,025 (5,019) (4.3)%
--------- --------- -------- -------- --------
Wholesale
Brokerage 37,039 37,267 (228) (0.6)% 4,979 (5,207) (14.0)%
Professional
Programs 10,385 10,438 (53) (0.5)% - (53) (0.5)%
Special
Programs 27,800 24,484 3,316 13.5 % 131 3,185 13.0 %
--------- --------- -------- -------- --------
Total
National
Programs 38,185 34,922 3,263 9.3 % 131 3,132 9.0 %
--------- --------- -------- -------- --------
Services 7,933 8,954 (1,021) (11.4)% - (1,021) (11.4)%
--------- --------- -------- -------- --------
Total Core
Commissions
and Fees
(1) $ 217,181 $ 199,161 $ 18,020 9.0 % $ 26,135 $ (8,115) (4.1)%
========= ========= ======== ======== ========
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
for the Three Months Ended March 31, 2008 and 2007
(in thousands)
(unaudited)
Quarter Quarter
Ended Ended
3/31/08 3/31/07
--------- ---------
Total core commissions and fees(1) $ 217,181 $ 199,161
Contingent commissions 36,347 44,057
Divested business - 2,341
--------- ---------
Total commission & fees $ 253,528 $ 245,559
========= =========
(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,
2008 2007
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 16,990 $ 38,234
Restricted cash and investments 239,350 254,404
Short-term investments 4,673 2,892
Premiums, commissions and fees receivable 231,471 240,680
Deferred income taxes - 17,208
Other current assets 55,022 33,964
----------- -----------
Total current assets 547,506 587,382
Fixed assets, net 62,199 62,327
Goodwill 896,544 846,433
Amortizable intangible assets, net 459,098 443,224
Other assets 20,802 21,293
----------- -----------
Total assets $ 1,986,149 $ 1,960,659
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Premiums payable to insurance companies $ 376,829 $ 394,034
Premium deposits and credits due customers 35,956 41,211
Accounts payable 35,665 18,760
Accrued expenses 52,472 90,599
Current portion of long-term debt 7,421 11,519
----------- -----------
Total current liabilities 508,343 556,123
Long-term debt 252,627 227,707
Deferred income taxes, net 69,048 65,736
Other liabilities 14,300 13,635
Shareholders' equity:
Common stock, par value $0.10 per share;
authorized 280,000 shares; issued and
outstanding 140,724 at 2008 and 140,673 at 2007 14,072 14,067
Additional paid-in capital 234,342 231,888
Retained earnings 893,403 851,490
Accumulated other comprehensive income 14 13
----------- -----------
Total shareholders' equity 1,141,831 1,097,458
----------- -----------
Total liabilities and shareholders' equity $ 1,986,149 $ 1,960,659
=========== ===========
Contact:
Cory T. Walker
Chief Financial Officer
(386) 239-7250
