Brown & Brown, Inc. Announces Record Third-Quarter Earnings of $49.5 Million
DAYTONA BEACH, FL and TAMPA, FL -- (Marketwire) -- 10/15/12 -- Brown & Brown, Inc. (NYSE: BRO) today announced its preliminary, unaudited financial results for the third quarter of 2012.
Net income for the third quarter of 2012 was $49,504,000, or $0.34 per share, compared with $44,173,000, or $0.30 per share for the same quarter of 2011, an increase of 12.1%. Total revenue for the third quarter was $303,800,000, compared with 2011 third-quarter revenue of $260,401,000, an increase of 16.7%.
Total revenue for the nine months ended September 30, 2012 was $897,202,000, compared with total revenue for the same period of 2011 of $769,445,000, an increase of 16.6%. Net income for the nine-month period ended September 30, 2012 was $141,408,000, or $0.97 per share, compared with $127,501,000, or $0.88 per share for the same period of 2011, an increase of 10.9%.
J. Powell Brown, President and Chief Executive Officer of the Company, noted, "We are pleased with our record earnings in the third quarter. Our Retail Division continues to show increasing organic growth, which suggests that economic conditions are improving for our clients across the country, who are predominantly in the middle market."
Brown & Brown, Inc., through its subsidiaries, offers a broad range of insurance and reinsurance products and services. Additionally, certain Brown & Brown (BRO) subsidiaries offer a variety of risk management, third party administration, and other services. Serving 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 the Company's anticipated financial results for the third quarter of 2012. 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. These risks and uncertainties include, but are not limited to, the Company's determination as it finalizes its financial results for the third quarter of 2012 that its financial results differ from the current preliminary unaudited numbers set forth herein, other factors that the Company may not have currently identified or quantified, and other risks, relevant factors and uncertainties identified in the Company's Annual Report on Form 10-K for the year ended December 31, 2011, and the Company's other filings with the Securities and Exchange Commission. 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,
2012 2011 2012 2011
---------- ---------- ---------- ----------
REVENUES
Commissions and fees $ 302,310 $ 257,177 $ 888,785 $ 764,612
Investment income 239 317 561 934
Other income, net 1,251 2,907 7,856 3,899
---------- ---------- ---------- ----------
Total revenues 303,800 260,401 897,202 769,445
---------- ---------- ---------- ----------
EXPENSES
Employee compensation and
benefits 149,691 126,877 450,039 379,286
Non-cash stock-based
compensation 3,908 2,856 11,393 8,338
Other operating expenses 43,774 38,434 129,394 109,489
Amortization 15,956 13,725 47,450 40,790
Depreciation 3,958 3,062 11,383 9,276
Interest 4,006 3,565 12,093 10,780
Change in estimated
acquisition earn-out
payables 858 (810) (134) 656
---------- ---------- ---------- ----------
Total expenses 222,151 187,709 661,618 558,615
---------- ---------- ---------- ----------
Income before income taxes 81,649 72,692 235,584 210,830
Income taxes 32,145 28,519 94,176 83,329
---------- ---------- ---------- ----------
Net income $ 49,504 $ 44,173 $ 141,408 $ 127,501
========== ========== ========== ==========
Net income per share:
Basic $ 0.34 $ 0.31 $ 0.99 $ 0.89
========== ========== ========== ==========
Diluted $ 0.34 $ 0.30 $ 0.97 $ 0.88
========== ========== ========== ==========
Weighted average number of
shares outstanding:
Basic 139,465 138,690 139,185 138,475
========== ========== ========== ==========
Diluted 142,097 140,443 141,769 140,120
========== ========== ========== ==========
Dividends declared per share $ 0.0850 $ 0.0800 $ 0.2550 $ 0.2400
========== ========== ========== ==========
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Organic Commissions and Fees(1)
Three Months Ended September 30, 2012
(in thousands)
(unaudited)
Total Less Internal Internal
Quarter Quarter Total Net Acquisiti Net Net
Ended Ended Net Growth on Growth Growth
09/30/12 09/30/11 Change % Revenues $ %
-------- -------- ------- ------ --------- -------- --------
Retail(2) $153,702 $143,681 $10,021 7.0% $ 8,593 $ 1,428 1.0%
National
Programs 62,406 42,265 20,141 47.7% 21,536 (1,395) (3.3)%
Wholesale
Brokerage 43,200 41,192 2,008 4.9% 868 1,140 2.8%
Services 28,566 16,450 12,116 73.7% 10,845 1,271 7.7%
-------- -------- ------- --------- --------
Total Core
Commissions
and Fees
(1) $287,874 $243,588 $44,286 18.2% $ 41,842 $ 2,444 1.0%
======== ======== ======= ========= ========
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
For the Three Months Ended September 30, 2012 and 2011
(in thousands)
(unaudited)
Quarter Quarter
Ended Ended
09/30/12 09/30/11
--------- ---------
Total core commissions and fees(1) $ 287,874 $ 243,588
Profit-sharing contingent commissions
12,077 7,233
Guaranteed supplemental commissions
2,359 3,460
Divested business - 2,896
--------- ---------
Total commissions & fees $ 302,310 $ 257,177
========= =========
(1) Total core commissions and fees are our total commissions and fees less
(i) profit-sharing contingent commissions (revenues 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), (ii) guaranteed supplemental
commissions (GSC) (revenues derived from special revenue-sharing
commissions from insurance companies based solely upon the volume of the
business placed with such companies during the current year),and (iii)
divested business (commissions and fees generated from offices, books of
business or niches sold by the Company or terminated).
(2) The Retail segment includes commissions and fees reported in the "Other"
column of the Segment Information, which includes corporate and
consolidation items.
Brown & Brown, Inc.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
September 30, December 31,
2012 2011
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 244,637 $ 286,305
Restricted cash and investments 198,137 130,535
Short-term investments 8,176 7,627
Premiums, commissions and fees receivable 282,972 240,257
Deferred income taxes 18,792 19,863
Other current assets 32,794 23,540
------------- -------------
Total current assets 785,508 708,127
Fixed assets, net 73,191 61,360
Goodwill 1,686,460 1,323,469
Amortizable intangible assets, net 567,489 496,182
Other assets 22,081 17,873
------------- -------------
Total assets $ 3,134,729 $ 2,607,011
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Premiums payable to insurance companies $ 397,995 $ 327,096
Premium deposits and credits due customers 47,798 30,048
Accounts payable 57,046 22,384
Accrued expenses and other liabilities 120,667 100,865
Current portion of long-term debt 93 1,227
------------- -------------
Total current liabilities 623,599 481,620
Long-term debt 450,000 250,033
Deferred income taxes, net 229,458 178,052
Other liabilities 62,858 53,343
Shareholders' equity:
Common stock, par value $0.10 per share;
authorized 280,000 shares; issued and
outstanding 143,817 at 2012 and 143,352 at
2011 14,382 14,335
Additional paid-in capital 327,053 307,059
Retained earnings 1,427,379 1,322,562
Accumulated other comprehensive income - 7
------------- -------------
Total shareholders' equity 1,768,814 1,643,963
------------- -------------
Total liabilities and shareholders' equity $ 3,134,729 $ 2,607,011
============= =============
Cory T. Walker
Chief Financial Officer
(386) 239-7250
Source: Brown & Brown, Inc.
