Mon, 23 Oct 2006 13:31:00 PDT
DAYTONA BEACH and TAMPA, FL -- (MARKET WIRE) -- 10/23/2006 -- Brown & Brown, Inc. (
Total revenue for the first nine months of 2006 was $663,354,000, compared with revenue of $588,950,000 for the comparable period in 2005, an increase of 12.6%. Net income for the first nine months of 2006 was $134,727,000, versus $114,834,000 during the comparable 2005 period, an increase of 17.3%. Net income per share for the nine months ended September 30, 2006 was $0.96, versus the $0.82 per share posted during the same 2005 period, an increase of 17.1%.
J. Hyatt Brown, Chairman and CEO, noted, "We had another very good quarter, thanks in part to a light hurricane season so far this year and the improved operating results from our National Retail Segment. We continue to focus on driving new business sales and providing outstanding service to our customers."
President and Chief Operating Officer Jim W. Henderson added, "We remain bullish on the prospects for acquisitions as a component of our long-term strategy for growth in earning. For 2006, we have completed 13 transactions that represent $55.5 million in annualized revenue. During the recent quarter, we announced the return of Paul Vredenburg to the Brown & Brown Team. Paul's return signals our commitment to deploy additional resources to scout an even greater number of prospective acquisition candidates and to tell the Brown & Brown story."
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, 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 continuing our revenue, earnings and operating growth, as well as 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 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, 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 consummation and integration of announced 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 litigation initiated against the Company and 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
(in thousands, except per share data)
(unaudited)
For the For the
Three Months Ended Nine Months Ended
September 30 September 30
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
REVENUES
Commissions and fees $ 208,558 $ 188,444 $ 653,900 $ 581,497
Investment income 3,218 1,786 8,383 4,275
Other income, net 189 415 1,071 3,178
--------- --------- --------- ---------
Total revenues 211,965 190,645 663,354 588,950
--------- --------- --------- ---------
EXPENSES
Employee compensation and benefits 100,821 94,009 304,731 278,493
Non-cash stock-based compensation 837 681 4,601 2,360
Other operating expenses 29,502 25,638 90,605 78,760
Amortization 9,089 8,452 27,067 24,344
Depreciation 2,922 2,538 8,302 7,432
Interest 3,229 3,638 10,080 10,891
--------- --------- --------- ---------
Total expenses 146,400 134,956 445,386 402,280
--------- --------- --------- ---------
Income before income taxes 65,565 55,689 217,968 186,670
Income taxes 25,295 20,906 83,241 71,836
--------- --------- --------- ---------
Net income $ 40,270 $ 34,783 $ 134,727 $ 114,834
========= ========= ========= =========
Net income per share:
Basic $ 0.29 $ 0.25 $ 0.97 $ 0.83
========= ========= ========= =========
Diluted $ 0.29 $ 0.25 $ 0.96 $ 0.82
========= ========= ========= =========
Weighted average number of shares
outstanding:
Basic 139,668 138,484 139,522 138,374
========= ========= ========= =========
Diluted 141,027 139,638 140,949 139,504
========= ========= ========= =========
Dividends declared per share $ 0.05 $ 0.04 $ 0.15 $ 0.12
========= ========= ========= =========
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Commissions and Fees(1)
Three Months Ended September 30, 2006
(in thousands)
(unaudited)
Quarter Quarter Total Total Less Internal
Ended Ended Net Net Acquisition Net
9/30/06 9/30/05 Change Growth% Revenues Growth%
---------- ---------- --------- ----- --------- --------
Florida
Retail $ 44,083 $ 38,146 $ 5,937 15.6% $ 109 15.3%
National
Retail 52,874 48,555 4,319 8.9% 3,896 0.9%
Western
Retail 26,896 26,848 48 0.2% 1,269 (4.5)%
---------- ---------- --------- ---------
Total
Retail 123,853 113,549 10,304 9.1% 5,274 4.4%
---------- ---------- --------- ---------
Professional
Programs 10,806 10,820 (14) (0.1)% - (0.1)%
Special
Programs 26,626 22,080 4,546 20.6% 2,376 9.8%
---------- ---------- --------- ---------
Total
Programs 37,432 32,900 4,532 13.8% 2,376 6.6%
---------- ---------- --------- ---------
Wholesale
Brokerage 36,017 31,990 4,027 12.6% 2,238 5.6%
Services 9,164 6,821 2,343 34.3% 1,608 10.8%
---------- ---------- --------- ---------
Total Core
Commissions
and Fees(1) $ 206,466 $ 185,260 $ 21,206 11.4% $ 11,496 5.2%
========== ========== ========= =========
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
for the Three Months Ended September 30, 2006 and 2005
(in thousands)
(unaudited)
Quarter Quarter
Ended Ended
9/30/06 9/30/05
------------- -------------
Total core commissions and fees(1) $ 206,466 $ 185,260
Contingent commissions 2,092 2,563
Divested business - 621
------------- -------------
Total commission & fees $ 208,558 $ 188,444
============= =============
(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)
September 30, December 31,
2006 2005
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 62,655 $ 100,580
Restricted cash and investments 278,043 229,872
Short-term investments 2,757 2,748
Premiums, commissions and fees receivable 268,195 257,930
Other current assets 36,610 28,637
----------- -----------
Total current assets 648,260 619,767
Fixed assets, net 44,630 39,398
Goodwill 677,799 549,040
Amortizable intangible assets, net 407,849 377,907
Investments 11,748 8,421
Other assets 12,882 14,127
----------- -----------
Total assets $ 1,803,168 $ 1,608,660
=========== ===========
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Premiums payable to insurance companies $ 449,819 $ 397,466
Premium deposits and credits due customers 42,708 34,027
Accounts payable 19,675 21,161
Accrued expenses 68,691 74,534
Current portion of long-term debt 64,418 55,630
----------- -----------
Total current liabilities 645,311 582,818
Long-term debt 204,901 214,179
Deferred income taxes, net 44,466 35,489
Other liabilities 12,568 11,830
Shareholders’ equity:
Common stock, par value $0.10 per
share; authorized 280,000 shares; issued
and outstanding 139,967 at 2006 and 139,383 at
2005 13,997 13,938
Additional paid-in capital 208,926 193,313
Retained earnings 666,431 552,647
Accumulated other comprehensive income 6,568 4,446
----------- -----------
Total shareholders’ equity 895,922 764,344
----------- -----------
Total liabilities and shareholders’ equity $ 1,803,168 $ 1,608,660
=========== ===========
Contact: Cory T. Walker Chief Financial Officer (386) 239-7250
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