Summary
Arthur J. Gallagher & Co. (AJG) reported solid financial results for the second quarter and the first half of 2013, demonstrating growth across its core brokerage and risk management segments. Total revenues increased by 15% for the first six months of the year compared to the same period in 2012, driven by both organic growth and strategic acquisitions. The company highlighted a 7.0% increase in combined organic commissions and fee revenues for the brokerage and risk management segments, indicating healthy underlying business performance. Profitability also improved, with adjusted EBITDAC (Earnings Before Interest, Taxes, Depreciation, Amortization, and Change in Estimated Acquisition Earnout Payables) up 19% for the combined segments. The company continues to actively pursue its acquisition strategy, completing several deals that expand its geographic reach and service offerings. Additionally, AJG's corporate segment benefited from strong performance in its clean energy investments, contributing significantly to net earnings.
Financial Highlights
45 data points| Revenue | $779.50M |
| Cost of Revenue | $76.60M |
| Gross Profit | $702.90M |
| Operating Expenses | $137.80M |
| Operating Income | -$134.00M |
| Interest Expense | $11.90M |
| Net Income | $93.50M |
| EPS (Basic) | $0.73 |
| EPS (Diluted) | $0.73 |
| Shares Outstanding (Basic) | 127.30M |
Key Highlights
- 1Total revenues increased by 15% to $1,453.6 million for the six months ended June 30, 2013, compared to $1,196.7 million in the prior year.
- 2Combined organic commissions and fee revenues for the brokerage and risk management segments grew by 7.0% in the first half of 2013.
- 3Adjusted EBITDAC for the combined brokerage and risk management segments increased by 19% to $282.7 million for the first six months of 2013.
- 4The company completed nine acquisitions in the first six months of 2013, with annualized revenues of approximately $40.9 million.
- 5Net earnings for the six months ended June 30, 2013, were $134.0 million, up from $99.8 million in the comparable period of 2012.
- 6The corporate segment saw improved earnings from clean energy investments, contributing $24.1 million to net earnings in the second quarter of 2013.
- 7The company maintained compliance with its debt covenants and had $484.1 million available under its credit agreement as of June 30, 2013.