Welcome!

News Feed Item

Brown & Brown, Inc. Announces Quarterly Revenues of $363.6 Million, Increasing 8.5% and Organic Revenue Growth of 3.9%

DAYTONA BEACH, FL and TAMPA, FL--(Marketwired - April 21, 2014) - Brown & Brown, Inc. (NYSE: BRO) today announced its unaudited financial results for the first quarter of 2014. 

Revenues for the first quarter of 2014 under U.S. generally accepted accounting principles ("GAAP") were $363.6 million, increasing $28.6 million or 8.5% as compared to the first quarter of the prior year. Organic Revenues (as defined below) increased by 3.9% after adjusting for Colonial Claims' revenue related to Hurricane Sandy in the first quarter of 2013, among other items. Adjusted Earnings Per Share, Pro Forma (as defined below), is $0.40 for the quarter vs. $0.36 in the first quarter of the prior year, for an 11.1% increase. Diluted earnings per share under GAAP is $0.36 vs. $0.41 in the first quarter of the prior year. 

J. Powell Brown, President and Chief Executive Officer of the Company, noted, "We have started the year with good organic revenue growth and adjusted margin expansion in each of our four divisions, while still operating in a challenging market. We believe our proven strategy is sound and our focus on growing the top line profitably is demonstrated in our results."

                           Brown & Brown, Inc.                            
                            TOTAL REVENUES AND                            
                    ORGANIC REVENUE GROWTH (1) SCHEDULE                   
                    Three Months Ended March 31, 2014                     
                          (in millions, unaudited)                        
                                                                          
                                                                 Organic  
                                                                Revenue   
                                                                          
                     Quarter Ended      Change    Acquisition    Growth   
                   03/31/14 03/31/13   $      %     Revenues     $     %  
                   -------- -------- ----- ------ ----------- ------ -----
Retail(2)            $202.8   $174.8 $28.0  16.0%        20.4   $3.9  2.5%
National Programs      74.2     68.9   5.3   7.7%         2.4    1.0  1.6%
Wholesale Brokerage    55.0     48.7   6.3  12.9%         0.9    5.1 11.8%
Services               31.6     42.6 -11.0 -25.8%         3.8 1.3(3)  4.9%
                   -------- -------- ----- ------ ----------- ------ -----
Total Revenues       $363.6   $335.0 $28.6   8.5%       $27.5  $11.3  3.9%
                                                                          
                                                                          
                       TOTAL REVENUES RECONCILIATION                        
                      TO TOTAL ORGANIC REVENUE GROWTH                       
             Included in the Consolidated Statements of Income              
             For the Three Months Ended March 31, 2014 and 2013             
                          (in millions, unaudited)                          
                                                                            
                                        Quarter Ended           Change      
                                      03/31/14  03/31/13     $         %    
                                     --------- --------- --------- ---------
Total Revenue                           $363.6    $335.0     $28.6      8.5%
  Beecher Carlson Large Accounts         -12.7         -    - 12.7  -5.8%(4)
  Colonial Claims                            -    - 16.2      16.2   7.4%(4)
                                     --------- --------- --------- ---------
Total Revenue less Beecher Carlson                                          
 Large Accounts and Colonial Claims      350.9     318.8      32.1     10.1%
  Other Revenue                          - 1.6     - 1.2     - 0.4         -
                                     --------- --------- --------- ---------
Commissions and Fees less Beecher                                           
 Carlson Large Accounts and Colonial                                        
 Claims                                  349.3     317.6      31.7     10.0%
  Acquisitions / Dispositions                                               
   excluding Beecher Carlson Large                                          
   Accounts                             - 14.8     - 1.8    - 13.0 - 3.9%(4)
  Contingents and GSC's                 - 34.7    - 27.3     - 7.4 - 2.2%(4)
                                     --------- --------- --------- ---------
Organic Revenue Growth (3)              $299.8    $288.5     $11.3      3.9%
                                                                            
  1. Organic Revenue Growth is defined as total commissions and fees less (i) the first twelve months of net commission and fee revenues generated from acquisitions accounted for as purchases less (ii) 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 -- Contingents"), less (iii) guaranteed supplemental commissions (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 -- "GSC's"), and (iv) 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.
  3. Organic Revenue Growth for the Services Division for the first quarter of 2013 excludes $16.2 Million related to Hurricane Sandy within the Colonial Claims business.
  4. Percentages are calculated as a percentage impact on organic revenue growth.

Due to the cyclical nature of the revenue stream of the Beecher Carlson Large Accounts business and a relatively stable expense base we believe it is appropriate to adjust for the margin impact in order to arrive at a comparative Pro Forma with the prior year.

                            Brown & Brown, Inc.                             
                    EARNINGS PER SHARE RECONCILIATION TO                    
                        ADJUSTED EARNINGS PER SHARE                         
                     Three Months Ended March 31, 2014                      
                                (unaudited)                                 
                                                                            
                                        Quarter Ended           Change      
                                       3/31/14   3/31/13     $         %    
                                                         --------- ---------
GAAP earnings per share -- as                                               
 reported                                $0.36     $0.41    -$0.05    -12.2%
  Colonial Claims                            -     -0.04      0.04         -
  Adjustment for acquisition earn-                                          
   outs                                   0.02     -0.01      0.03         -
  Margin impact of Beecher Carlson                                          
   large accounts                         0.02         -      0.02         -
                                     --------- --------- --------- ---------
Adjusted earnings per share -- pro                                          
 forma                                   $0.40     $0.36     $0.04     11.1%
                                                                            
                                                                            

Expenses for the quarter under GAAP increased by 17.5%, with such increase primarily related to acquisitions and dispositions. After removing the effect of these acquisitions, our Total Expenses, Pro Forma (as defined below) increased by 6.5%. This includes the non-cash charge for the increase in the adjustment for earn-outs related to acquisitions. We believe such information is of interest to the investment community because it provides an additional meaningful method of evaluating the Company's remaining expenses. After removing the earn-out adjustments, our expenses increased by 4.5% year over year. This increase compares with our Organic Revenue growth of 3.9%. The year over year change in Total Expenses, Pro Forma was primarily related to standard annual compensation increases, the impact of incentive stock grants in the prior year and approximately $1 million of costs related to the retirement of the previous CFO as well as the additional costs incurred in hiring the new CFO for part of the first quarter. 

                            Brown & Brown, Inc.                             
                      TOTAL EXPENSES RECONCILIATION TO                      
                         TOTAL EXPENSES, PRO FORMA                          
                     Three Months Ended March 31, 2014                      
                          (in millions, unaudited)                          
                                                                            
                                        Quarter Ended           Change      
                                       3/31/14   3/31/13     $         %    
                                                         --------- ---------
EXPENSES                                                                    
------------------------------------                                        
Total Expenses                          $276.8    $235.5     $41.3     17.5%
  Acquisitions / Dispositions           - 27.6     - 1.4    - 26.2         -
                                     --------- --------- --------- ---------
Expenses less Acquisitions /                                                
 Dispositions                            249.2     234.1      15.1      6.5%
  Acquisition Earn-out Adjustments       - 6.1     - 1.5     - 4.6         -
                                     --------- --------- --------- ---------
Total Expenses, Pro-Forma               $243.1    $232.6     $10.5      4.5%
                                                                            
                                                                            
                            Brown & Brown, Inc.                             
                     CONSOLIDATED STATEMENTS OF INCOME                      
               (in millions, except per share data; unaudited)              
                                                                            
                                                              For the       
                                                         Three Months Ended 
                                                             March 31,      
                                                       ---------------------
                                                          2014       2013   
                                                       ---------- ----------
REVENUES                                                                    
Commissions and fees                                       $362.0     $333.8
Investment income                                             0.1        0.2
Other income, net                                             1.5        1.0
                                                       ---------- ----------
  Total revenues                                            363.6      335.0
                                                       ---------- ----------
                                                                            
EXPENSES                                                                    
Employee compensation and benefits                          184.1      159.5
Non-cash stock-based compensation                             7.5        3.9
Other operating expenses                                     52.5       46.3
Amortization                                                 17.9       16.1
Depreciation                                                  4.6        4.2
Interest                                                      4.1        4.0
Change in estimated acquisition earn-out payables             6.1        1.5
                                                       ---------- ----------
  Total expenses                                            276.8      235.5
                                                       ---------- ----------
                                                                            
Income before income taxes                                   86.8       99.5
                                                                            
Income taxes                                                 34.4       39.4
                                                       ---------- ----------
                                                                            
Net income                                                 $ 52.4     $ 60.1
                                                       ========== ==========
                                                                            
Net income per share:                                                       
  Basic                                                     $0.36      $0.42
                                                       ========== ==========
  Diluted                                                   $0.36      $0.41
                                                       ========== ==========
                                                                            
Weighted average number of shares outstanding:                              
  Basic                                                   141,610    140,796
                                                       ========== ==========
  Diluted                                                 143,309    142,947
                                                       ========== ==========
                                                                            
Dividends declared per share                                $0.10      $0.09
                                                       ========== ==========
                                                                            
                                                                            
                            Brown & Brown, Inc.                             
                        CONSOLIDATED BALANCE SHEETS                         
               (in millions, except per share data, unaudited)              
                                                                            
                                                     March 31,  December 31,
                                                          2014         2013 
                                                   ------------ ------------
ASSETS                                                                      
Current assets:                                                             
  Cash and cash equivalents                        $      250.0 $      203.0
  Restricted cash and investments                         252.9        250.0
  Short-term investments                                   11.0         10.6
  Premiums, commissions and fees receivable               404.2        395.9
  Deferred income taxes                                    12.4         29.3
  Other current assets                                     33.6         39.3
                                                   ------------ ------------
    Total current assets                                  964.1        928.1
                                                                            
Fixed assets, net                                          74.6         74.7
Goodwill                                                2,006.5      2,006.2
Amortizable intangible assets, net                        601.6        618.9
Deferred income taxes, net                                    -            -
Other assets                                               27.3         21.7
                                                   ------------ ------------
    Total assets                                   $    3,674.1 $    3,649.6
                                                   ============ ============
                                                                            
LIABILITIES AND SHAREHOLDERS' EQUITY                                        
Current liabilities:                                                        
  Premiums payable to insurance companies          $      532.2 $      534.4
  Premium deposits and credits due customers               91.4         81.0
  Accounts payable                                         62.4         34.2
  Accrued expenses and other liabilities                  106.4        157.4
  Current portion of long-term debt                           -        100.0
                                                   ------------ ------------
    Total current liabilities                             792.4        907.0
                                                                            
Long-term debt                                            480.0        380.0
                                                                            
Deferred income taxes, net                                285.5        291.7
                                                                            
Other liabilities                                          63.4         63.8
                                                                            
Shareholders' equity:                                                       
  Common stock, par value $0.10 per share;                                  
   authorized 280,000,000 shares; issued and                                
   outstanding 145,409 at 2014 and 145,419 at 2013                          
   -- in thousands                                         14.5         14.5
  Additional paid-in capital                              379.8        372.0
  Retained earnings                                     1,658.5      1,620.6
                                                   ------------ ------------
    Total shareholders' equity                          2,052.8      2,007.1
                                                   ------------ ------------
                                                                            
    Total liabilities and shareholders' equity     $    3,674.1 $    3,649.6
                                                   ============ ============
                                                                            
                                                                            

Conference call, webcast and slide presentation
A conference call to discuss the first quarter 2014 results will be held on Tuesday, April 22, 2014 at 8:30 AM Eastern Time. You can access the webcast by visiting the "Investor Relations" section of www.bbinsurance.com. The Company may refer to a slide presentation during its conference call. The slides will be available to view and download from the "Investor Relations" section of the Company's website at www.bbinsurance.com

About Brown & Brown
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' seventh largest independent insurance intermediary. The Company's Web address is www.bbinsurance.com

Forward-looking statements
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 2014. 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 2014 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, 2013, 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. 

Non-GAAP supplemental financial information
This press release contains references to non-GAAP financial measures as defined in Regulation G of SEC rules, including Organic Revenue Growth and Adjusted Earnings Per Share, Pro Forma and Total Expenses, Pro Forma. A reconciliation of this supplemental non-GAAP financial information to our GAAP information is contained in this earnings release. We present such non-GAAP supplemental financial information, as we believe such information is of interest to the investment community because it provides additional meaningful methods of evaluating certain aspects of the Company's operating performance from period to period on a basis that may not be otherwise apparent on a GAAP basis. This supplemental financial information should be viewed in addition to, not in lieu of, the Company's condensed consolidated financial statements.

R. Andrew Watts
Chief Financial Officer
(386) 239-5770

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
The 22nd International Cloud Expo | 1st DXWorld Expo has announced that its Call for Papers is open. Cloud Expo | DXWorld Expo, to be held June 5-7, 2018, at the Javits Center in New York, NY, brings together Cloud Computing, Digital Transformation, Big Data, Internet of Things, DevOps, Machine Learning and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding busin...
Digital transformation is about embracing digital technologies into a company's culture to better connect with its customers, automate processes, create better tools, enter new markets, etc. Such a transformation requires continuous orchestration across teams and an environment based on open collaboration and daily experiments. In his session at 21st Cloud Expo, Alex Casalboni, Technical (Cloud) Evangelist at Cloud Academy, explored and discussed the most urgent unsolved challenges to achieve f...
SYS-CON Events announced today that Synametrics Technologies will exhibit at SYS-CON's 22nd International Cloud Expo®, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. Synametrics Technologies is a privately held company based in Plainsboro, New Jersey that has been providing solutions for the developer community since 1997. Based on the success of its initial product offerings such as WinSQL, Xeams, SynaMan and Syncrify, Synametrics continues to create and hone inn...
Digital Transformation (DX) is not a "one-size-fits all" strategy. Each organization needs to develop its own unique, long-term DX plan. It must do so by realizing that we now live in a data-driven age, and that technologies such as Cloud Computing, Big Data, the IoT, Cognitive Computing, and Blockchain are only tools. In her general session at 21st Cloud Expo, Rebecca Wanta explained how the strategy must focus on DX and include a commitment from top management to create great IT jobs, monitor ...
In a recent survey, Sumo Logic surveyed 1,500 customers who employ cloud services such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). According to the survey, a quarter of the respondents have already deployed Docker containers and nearly as many (23 percent) are employing the AWS Lambda serverless computing framework. It’s clear: serverless is here to stay. The adoption does come with some needed changes, within both application development and operations. Tha...
Cloud Expo | DXWorld Expo have announced the conference tracks for Cloud Expo 2018. Cloud Expo will be held June 5-7, 2018, at the Javits Center in New York City, and November 6-8, 2018, at the Santa Clara Convention Center, Santa Clara, CA. Digital Transformation (DX) is a major focus with the introduction of DX Expo within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive ov...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
You know you need the cloud, but you're hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You're looking at private cloud solutions based on hyperconverged infrastructure, but you're concerned with the limits inherent in those technologies. What do you do?
Recently, REAN Cloud built a digital concierge for a North Carolina hospital that had observed that most patient call button questions were repetitive. In addition, the paper-based process used to measure patient health metrics was laborious, not in real-time and sometimes error-prone. In their session at 21st Cloud Expo, Sean Finnerty, Executive Director, Practice Lead, Health Care & Life Science at REAN Cloud, and Dr. S.P.T. Krishnan, Principal Architect at REAN Cloud, discussed how they built...
Recently, WebRTC has a lot of eyes from market. The use cases of WebRTC are expanding - video chat, online education, online health care etc. Not only for human-to-human communication, but also IoT use cases such as machine to human use cases can be seen recently. One of the typical use-case is remote camera monitoring. With WebRTC, people can have interoperability and flexibility for deploying monitoring service. However, the benefit of WebRTC for IoT is not only its convenience and interopera...
In his general session at 21st Cloud Expo, Greg Dumas, Calligo’s Vice President and G.M. of US operations, discussed the new Global Data Protection Regulation and how Calligo can help business stay compliant in digitally globalized world. Greg Dumas is Calligo's Vice President and G.M. of US operations. Calligo is an established service provider that provides an innovative platform for trusted cloud solutions. Calligo’s customers are typically most concerned about GDPR compliance, application p...
Modern software design has fundamentally changed how we manage applications, causing many to turn to containers as the new virtual machine for resource management. As container adoption grows beyond stateless applications to stateful workloads, the need for persistent storage is foundational - something customers routinely cite as a top pain point. In his session at @DevOpsSummit at 21st Cloud Expo, Bill Borsari, Head of Systems Engineering at Datera, explored how organizations can reap the bene...
With tough new regulations coming to Europe on data privacy in May 2018, Calligo will explain why in reality the effect is global and transforms how you consider critical data. EU GDPR fundamentally rewrites the rules for cloud, Big Data and IoT. In his session at 21st Cloud Expo, Adam Ryan, Vice President and General Manager EMEA at Calligo, examined the regulations and provided insight on how it affects technology, challenges the established rules and will usher in new levels of diligence arou...
Continuous Delivery makes it possible to exploit findings of cognitive psychology and neuroscience to increase the productivity and happiness of our teams. In his session at 22nd Cloud Expo | DXWorld Expo, Daniel Jones, CTO of EngineerBetter, will answer: How can we improve willpower and decrease technical debt? Is the present bias real? How can we turn it to our advantage? Can you increase a team’s effective IQ? How do DevOps & Product Teams increase empathy, and what impact does empath...
"I focus on what we are calling CAST Highlight, which is our SaaS application portfolio analysis tool. It is an extremely lightweight tool that can integrate with pretty much any build process right now," explained Andrew Siegmund, Application Migration Specialist for CAST, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.