Summary
Arthur J. Gallagher & Co. (AJG) reported its third-quarter and year-to-date results for the period ending September 30, 2011. The company demonstrated revenue growth across both its brokerage and risk management segments, driven by a combination of organic growth and strategic acquisitions. While facing economic headwinds, AJG managed to improve its operating results compared to the prior year's comparable periods. Key financial metrics indicate a positive trajectory, with increases in total revenues, adjusted total revenues, and adjusted EBITDAC (Earnings Before Interest, Taxes, Depreciation, Amortization, and Change in Estimated Acquisition Earnout Payables). The company's acquisition strategy remains active, with a significant number of acquisitions completed year-to-date, contributing substantially to revenue growth. Investors should note the ongoing integration of the Heath Lambert acquisition, which is expected to impact margins in the short term but is part of AJG's broader international expansion strategy.
Financial Highlights
46 data points| Revenue | $562.80M |
| Cost of Revenue | $700K |
| Gross Profit | $562.10M |
| Operating Expenses | $110.50M |
| Operating Income | $46.70M |
| Interest Expense | $10.30M |
| Net Income | $46.70M |
| EPS (Basic) | $0.41 |
| EPS (Diluted) | $0.41 |
| Shares Outstanding (Basic) | 112.60M |
Key Highlights
- 1Total revenues increased by 21% in the third quarter and 14% year-to-date, driven by strong performance in both brokerage and risk management segments.
- 2Organic growth in commissions, fees, and supplemental commissions was 2.6% for the brokerage segment and 12.9% for the risk management segment in the third quarter.
- 3Adjusted EBITDAC (a non-GAAP measure) increased by 20% year-to-date for combined segments, reflecting operational improvements and strategic execution.
- 4The company completed 21 acquisitions year-to-date, contributing significantly to revenue growth, including the substantial acquisition of Heath Lambert in the UK.
- 5Net earnings from continuing operations for the nine-month period were $103.6 million, a decrease from $117.3 million in the prior year, impacted by various adjustments and acquisition-related costs.
- 6The company maintained compliance with its debt covenants and has a strong liquidity position with $241.4 million in cash and cash equivalents and $483.5 million available under its credit facility.
- 7Dividends declared per common share increased to $0.33 in Q3 2011 from $0.32 in Q3 2010, signaling continued commitment to returning value to shareholders.