Brown & Brown, Inc. Announces Record Quarterly Net Income of $60.1 Million

Marketwired

DAYTONA BEACH, FL and TAMPA, FL--(Marketwired - Apr 15, 2013) - Brown & Brown, Inc. (NYSE: BRO) today announced its preliminary, unaudited financial results for the first quarter of 2013. 

Net income for the first quarter of 2013 was $60,131,000, or $0.41 per share, compared with $49,433,000, or $0.34 per share for the same quarter of 2012, an increase of 21.6%. Total revenue for the first quarter was $335,012,000, compared with 2012 first-quarter revenue of $302,486,000, an increase of 10.8%. 

J. Powell Brown, President and Chief Executive Officer of the Company, noted, "We are pleased to have surpassed a quarterly milestone of $60 million of quarterly net income, and to have achieved a quarterly internal growth rate of our core commissions and fees revenue of 10.2%."

Brown & Brown, Inc., through its subsidiaries, offers a broad range of insurance and reinsurance products and services. Additionally, certain Brown & Brown 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 first quarter of 2013. 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 first quarter of 2013 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, 2012, 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
Three Months Ended
March 31,
 
    2013   2012  
REVENUES              
Commissions and fees   $ 333,793   $ 296,533  
Investment income     186     135  
Other income, net     1,033     5,818  
    Total revenues     335,012     302,486  
               
EXPENSES              
Employee compensation and benefits     159,498     149,596  
Non-cash stock-based compensation     3,850     3,747  
Other operating expenses     46,339     43,400  
Amortization     16,161     15,613  
Depreciation     4,167     3,641  
Interest     3,984     4,087  
Change in estimated acquisition earn-out payables     1,522     (388 )
    Total expenses     235,521     219,696  
               
Income before income taxes     99,491     82,790  
               
Income taxes     39,360     33,357  
               
Net income   $ 60,131   $ 49,433  
               
Net income per share:              
  Basic   $ 0.42   $ 0.34  
  Diluted   $ 0.41   $ 0.34  
               
Weighted average number of shares outstanding:              
  Basic     140,796     139,001  
  Diluted     142,947     141,500  
               
Dividends declared per share   $ 0.090   $ 0.0850  
               
   
Brown & Brown, Inc.  
INTERNAL GROWTH SCHEDULE  
Core Organic Commissions and Fees(1)  
Three Months Ended March 31, 2013  
(in thousands)  
(unaudited)  
   
   
    Quarter
Ended
03/31/13
  Quarter
Ended
03/31/12
  Total
Net
Change
  Total
Net
Growth %
 
  Less
Acquisition
Revenues
  Internal
Net
Growth $
  Internal
Net
Growth %
                                           
Retail(2)   $ 158,950   $ 149,971   $ 8,979   6.0 %   $ 7,830   $ 1,149   0.8 %
                                           
National Programs     61,706     53,630     8,076   15.1 %     1,483     6,593   12.3 %
                                           
Wholesale Brokerage     43,271     38,366     4,905   12.8 %     1,547     3,358   8.8 %
                                           
Services     42,605     25,762     16,843   65.4 %     657     16,186   62.8 %
                                           
Total Core Commissions and Fees (1)   $
306,532
  $
267,729
  $
38,803
 
14.5
%   $
11,517
  $
27,286
 
10.2
%
                                           
 
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
For the Three Months Ended March 31, 2013 and 2012
(in thousands)
(unaudited)
 
 
    Quarter
Ended
03/31/13
  Quarter
Ended
03/31/12
Total core commissions and fees(1)   $ 306,532   $ 267,729
Profit-sharing contingent commissions     25,039     24,221
Guaranteed supplemental commissions     2,222     2,592
Divested business     -     1,991
             
Total commissions & fees   $ 333,793   $ 296,533
             
(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)
 
    March 31,   December 31,
    2013   2012
ASSETS            
Current assets:            
  Cash and cash equivalents   $ 340,206   $ 219,821
  Restricted cash and investments     186,768     164,564
  Short-term investments     7,228     8,183
  Premiums, commissions and fees receivable     303,882     302,725
  Deferred income taxes     16,041     24,408
  Other current assets     27,488     39,811
    Total current assets     881,613     759,512
             
Fixed assets, net     73,067     74,337
Goodwill     1,709,279     1,711,514
Amortizable intangible assets, net     550,689     566,538
Other assets     15,712     16,157
    Total assets   $ 3,230,360   $ 3,128,058
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
Current liabilities:            
  Premiums payable to insurance companies   $ 443,290   $ 406,704
  Premium deposits and credits due customers     25,343     32,867
  Accounts payable     63,303     48,524
  Accrued expenses and other liabilities     85,285     79,593
  Current portion of long-term debt     93     93
    Total current liabilities     617,314     567,781
             
Long-term debt     450,000     450,000
             
Deferred income taxes, net     244,883     237,630
             
Other liabilities     58,907     65,314
             
Shareholders' equity:            
  Common stock, par value $0.10 per share; authorized 280,000 shares; issued and outstanding 143,990 at 2013 and 143,878 at 2012    
14,399
   
14,388
  Additional paid-in capital     340,606     335,872
  Retained earnings     1,504,251     1,457,073
  Total shareholders' equity     1,859,256     1,807,333
             
  Total liabilities and shareholders' equity   $ 3,230,360   $ 3,128,058
             
Contact:
Cory T. Walker
Chief Financial Officer
(386) 239-7250

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