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BRO · BROWN & BROWN, INC.

36 filings

10-K

BRO 10-K Annual Reports

BROWN & BROWN, INC. - 36 annual reports

Filing record · 2016–202610-K1210-Q388-K126

2025
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2025
Brown & Brown, Inc. reported robust performance for the fiscal year ended December 31, 2025, with total revenues reaching $5.902 billion, a significant increase of 22.8% over the prior year. This growth was largely driven by strong core commissions and fees, which rose by 21.3%, fueled by both organic growth and strategic acquisitions, most notably the significant acquisition of Accession Risk Management Group, Inc. The company's business segments, Retail and Specialty Distribution, both demonstrated growth, with the Retail segment contributing 58.7% of total revenues and the Specialty Distribution segment accounting for 41.3%. Despite increased expenses, particularly related to acquisitions and integration, the company maintained healthy profitability and expanded its EBITDAC - Adjusted margin, indicating efficient operations. The company's strategic focus on growth through acquisitions remains a key driver of its financial results. The significant increase in debt to finance these acquisitions is a notable factor for investors to consider, alongside the company's ongoing efforts to manage its capital structure and operational efficiency. Brown & Brown's commitment to its "teammate" culture and investment in employee development and well-being continue to support its decentralized operational model, which has historically contributed to its success.
Feb 12, 2026
2024
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2024
Brown & Brown, Inc. (BRO) demonstrated robust financial performance in 2024, with total revenues reaching $4.8 billion, a 12.9% increase year-over-year. This growth was primarily driven by strong organic revenue growth of 10.4% and strategic acquisitions, contributing to a consolidated increase in core commissions and fees of 11.6% to $4.5 billion. The company's diversified business segments—Retail, Programs, and Wholesale Brokerage—all showed positive revenue trends, with the Programs segment exhibiting the highest organic revenue growth rate at 22.4%. Net income attributable to the Company grew by 14.0% to $993 million, reflecting effective management of expenses and a solid income before income taxes margin of 27.1%. Acquisitions remain a key component of Brown & Brown's growth strategy, with 32 acquisitions completed in 2024, totaling $890 million in net cash paid. This aggressive acquisition approach, combined with strong organic growth and operational efficiencies, positions the company for continued expansion. The company also maintained a solid liquidity profile, with $675 million in cash and cash equivalents and significant capacity under its revolving credit facility. Management remains focused on delivering value to shareholders through a combination of profitable growth and strategic capital deployment.
Feb 13, 2025
2023
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2023
Brown & Brown, Inc. (BRO) demonstrated robust financial performance in 2023, driven by strong organic revenue growth and strategic acquisitions. The company reported a significant increase in total revenues to $4.26 billion, up 19.1% from the prior year, with core commissions and fees growing by 17.1% to $4.07 billion. This growth was fueled by a solid organic revenue increase of 10.2%, indicating strong underlying business momentum across its segments. The company's diverse business segments, including Retail, National Programs, and Wholesale Brokerage, all contributed positively to revenue growth. The Services segment saw a slight decline in revenue, largely due to the sale of certain businesses in Q4 2023. Brown & Brown also successfully integrated numerous acquisitions, contributing significantly to its overall expansion. The company maintained healthy profitability, with income before income taxes increasing by 30.8% to $1.15 billion, and an improved income before income taxes margin of 26.9%. The balance sheet remains strong, with total assets growing to $14.88 billion, supported by effective capital management and a robust liquidity position. Brown & Brown continues to focus on its core strategies of strategic acquisitions and organic growth, emphasizing its people-centric culture and commitment to client service. The company's consistent revenue growth over decades, coupled with strategic capital allocation and a clear growth path, positions it favorably for continued success in the insurance intermediary market.
Feb 22, 2024
2022
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2022
Brown & Brown, Inc. reported strong performance in 2022, with total revenues reaching $3.57 billion, a 17.1% increase compared to the previous year. This growth was primarily driven by acquisitions and a 8.1% organic revenue growth rate, indicating healthy expansion across its core business segments: Retail, National Programs, Wholesale Brokerage, and Services. The company's net income also saw a significant increase, reaching $671.8 million, up 14.4% from 2021. This robust financial performance reflects effective management and strategic execution, including successful integration of acquired businesses and a continued focus on sales and service culture. Brown & Brown's diversification across insurance segments provides resilience, while its commitment to talent development and operational efficiency supports its long-term growth trajectory.
Feb 27, 2023
2021
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2021
Brown & Brown, Inc. (BRO) reported a strong financial performance for the fiscal year ended December 31, 2021, demonstrating significant growth across its diversified insurance intermediary operations. The company experienced a substantial increase in total revenues, driven by robust performance in its Retail and National Programs segments, supported by organic growth and strategic acquisitions. Net income also saw a healthy increase, reflecting effective cost management and operational efficiencies. The company's balance sheet remains solid, with ample liquidity and capacity for future growth initiatives, including ongoing strategic acquisitions. Management highlighted its commitment to its "teammates" and its strong corporate culture as key drivers of its success and consistent performance.
Feb 23, 2022
2020
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2020
Brown & Brown, Inc. (BRO) reported strong performance for the fiscal year ended December 31, 2020, demonstrating resilience and continued growth in a challenging economic environment. The company achieved a 9.3% increase in total commissions and fees, reaching $2.61 billion, driven by organic revenue growth of 3.8% and strategic acquisitions. Net income saw a significant rise of 20.6% to $480.5 million. The company's diversified business model, spanning Retail, National Programs, Wholesale Brokerage, and Services segments, effectively navigated economic headwinds, with all segments contributing to revenue growth except for the Services segment, which experienced a slight decline. Financially, Brown & Brown maintained a solid liquidity position with $817.4 million in cash and cash equivalents and an expanded credit facility, providing ample resources for ongoing operations and future growth initiatives. The company continued its acquisition strategy, integrating 25 new businesses throughout the year. Management highlighted a strong focus on employee well-being and development as a key driver of its success. Despite the broader economic uncertainties presented by the COVID-19 pandemic, Brown & Brown exhibited robust financial health and operational execution, positioning it favorably for continued success.
Feb 23, 2021
2019
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2019
Brown & Brown, Inc. (BRO) demonstrated strong revenue growth in 2019, with total revenues reaching $2.39 billion, an increase of 18.8% over the prior year. This growth was primarily driven by acquisitions, which contributed significantly to the company's core commissions and fees across all segments, particularly in the Retail segment. The company maintained healthy profitability, with net income rising to $398.5 million, up 15.8% from 2018. BRO's strategic focus on organic growth, coupled with its aggressive acquisition strategy, continues to be a key driver of its financial performance, reinforcing its position as a leading insurance intermediary. The company also reported a solid increase in its employee base, reflecting ongoing expansion and operational capacity. Looking ahead, Brown & Brown's financial health appears robust, supported by strong operating cash flow and a significant share repurchase program. The company's diversified business model across Retail, National Programs, Wholesale Brokerage, and Services segments provides resilience. Despite potential headwinds such as increased employee compensation expenses and integration costs from acquisitions, the company's consistent revenue and profit growth, along with a clear strategy for future expansion, position it favorably for continued success. Investors should note the company's ongoing investment in technology, which is expected to impact operating margins in the short term but is crucial for long-term competitiveness.
Feb 24, 2020
2018
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2018
Brown & Brown, Inc. (BRO) presented a strong financial performance for the fiscal year ending December 31, 2018, demonstrating consistent revenue growth and profitability. The company operates as a diversified insurance intermediary, offering a wide array of insurance products and services across its four key segments: Retail, National Programs, Wholesale Brokerage, and Services. With a history of increasing revenues year-over-year, Brown & Brown's business model is characterized by a decentralized sales and service culture, focused on organic growth and strategic acquisitions. The company's financial health is robust, supported by substantial revenue from commissions and fees, which reached $2,009.9 million in 2018. This growth was driven by a combination of new and retained business, as well as contributions from acquisitions, with the Retail segment remaining the largest revenue generator. Brown & Brown also effectively manages its expenses, including employee compensation and benefits, while investing in technology and expanding its operational footprint across 42 states and internationally. The company's strong balance sheet and commitment to shareholder returns, evidenced by share repurchases and dividends, position it well for continued success in the competitive insurance market.
Feb 26, 2019
2017
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2017
Brown & Brown, Inc. (BRO) demonstrated robust growth in its 2017 fiscal year, with total revenues increasing by 6.5% to $1.88 billion. The company's core business, driven by commissions and fees, saw a 5.4% increase, supported by strong organic revenue growth of 4.4%. This growth was consistent across all four operating segments: Retail, National Programs, Wholesale Brokerage, and Services, highlighting the diversified nature of their business model. Net income saw a significant surge of 55.2% to $399.6 million, largely influenced by a substantial legal settlement that contributed to "Other Income." The company continues its strategy of acquiring and integrating new businesses, having completed eleven acquisitions in 2017, adding to its already extensive network of 238 locations across 40 states and several international locations. The company's financial health remains strong, with operating cash flow of $442 million, allowing for continued investment in growth, dividend payments, and share repurchases. Despite a modest increase in employee compensation and benefits as a percentage of revenue, the company maintained operational efficiency. The acquisition strategy, coupled with consistent organic growth and a focus on customer service, positions Brown & Brown for continued success in the insurance intermediary market. Investors can find reassurance in the company's consistent revenue growth trajectory and its ability to effectively integrate acquisitions, contributing to an overall positive financial performance.
Feb 28, 2018
2016
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2016
Brown & Brown, Inc. (BRO) demonstrated consistent revenue growth in its fiscal year ending December 31, 2016, with total revenues reaching $1.77 billion, an increase of 6.4% from the prior year. This growth was primarily driven by its Retail and National Programs segments, which together accounted for approximately 77.4% of total revenues. The company's strategic focus on acquisitions and organic growth continues to be a key driver of its financial performance. Operationally, Brown & Brown operates through four distinct segments: Retail, National Programs, Wholesale Brokerage, and Services. The Retail segment remains the largest contributor to revenue, while the National Programs segment showed strong organic growth. The company also maintained a healthy financial position, with total assets of $5.29 billion and significant shareholder equity. Management expressed confidence in continued organic revenue growth, anticipating positive results in the upcoming year based on current trends in insurable exposure units and premium rates.
Feb 24, 2017
2015-A
BROWN & BROWN, INC. Annual Report (Amendment), Year Ended Dec 31, 2015
This document is Amendment No. 1 on Form 10-K/A to Brown & Brown, Inc.'s (NYSE: BRO) annual report for the fiscal year ended December 31, 2015. It contains no financial statements, operating results, risk factors, or business discussion. Per the explanatory note, the company filed the original 2015 Form 10-K on February 25, 2016. This amendment's sole purpose is to replace an earlier version of the auditor's consent (Exhibit 23) that was inadvertently filed due to a clerical error. The amendment also includes new CEO and CFO certifications under Rule 12b-15. The filing confirms basic registrant details: Florida incorporation, headquarters in Daytona Beach, FL, a large accelerated filer and well-known seasoned issuer status, and 138,616,818 common shares outstanding as of February 22, 2016. The aggregate market value of non-affiliate common stock was $3,818,857,004 as of June 30, 2015. The note states that no other changes were made to the 2015 Form 10-K and that the amendment should be read alongside it. For investors, this amendment carries no new financial or investment information. Any analysis of Brown & Brown's 2015 performance, balance sheet, or strategy requires the original 2015 Form 10-K filed February 25, 2016, which this document incorporates by reference rather than restating.
Feb 29, 2016
2015
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2015
Brown & Brown, Inc. (BRO) reported solid performance in its 2015 10-K filing, highlighting continued revenue growth driven by both organic increases and strategic acquisitions. The company's diversified business model, encompassing Retail, National Programs, Wholesale Brokerage, and Services segments, demonstrated resilience. Total revenues reached $1.66 billion, marking an increase from the previous year, with core commissions and fees contributing the majority of this growth. The company's financial health appears robust, supported by healthy operating cash flows and a diversified revenue stream across its segments. Key areas of focus for investors include the company's ability to integrate acquisitions effectively, manage operating expenses, and navigate the competitive insurance intermediary landscape. The filing also detailed significant strategic initiatives, including substantial investment in growth through acquisitions, as evidenced by the purchase of The Wright Insurance Group, LLC and Beecher Carlson Holdings, Inc. The company's strong emphasis on a decentralized sales and service culture supports its long-term growth strategy. Despite macroeconomic uncertainties and industry competition, Brown & Brown has consistently grown revenues and net income over the years, underscoring its stable business model and effective management.
Feb 26, 2016
2014
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2014
Brown & Brown, Inc. (NYSE: BRO) closed 2014 with a substantially larger footprint after its May 2014 acquisition of The Wright Insurance Group (Wright, about $609.2 million in cash) and the July 2013 Beecher Carlson deal. Total revenues rose 15.6% to $1.58 billion, and commissions and fees reached $1.57 billion. Net income fell 4.7% to $206.9 million, and diluted EPS declined to $1.41 from $1.48. The decline was driven by a $47.4 million pretax loss on the disposal of Axiom Re, which the company is exiting as part of a strategy to leave the reinsurance brokerage business, along with higher interest expense (up 72.8% to $28.4 million) and a $9.9 million charge from changes in acquisition earn-out estimates. Underlying organic growth improved. Net internal growth in core organic commissions and fees was 2.0% for 2014, compared with 6.7% in 2013, and management attributes the slowdown to Superstorm Sandy-related claims revenue in 2013 that did not recur. Excluding Sandy, the Services Segment's 2014 internal growth would have been 6.8%. Management cites new business, rising exposure units, and improving employee benefit rates as tailwinds, while coastal property rate pressure and the Affordable Care Act's effect on small-employer coverage are headwinds. The balance sheet expanded significantly. Total assets grew to $4.96 billion from $3.65 billion, and long-term debt rose to $1.15 billion from $380 million, largely to fund Wright. The company issued $500 million of 4.200% senior notes due 2024, and its $1.35 billion credit agreement includes a $550 million term loan. Shareholders' equity rose to $2.11 billion. Management says cash and facilities are sufficient through at least the end of 2015. The company also repurchased $50 million of stock under a $200 million authorization, and 2014 dividends were $0.41 per share, up from $0.37.
Mar 2, 2015
2013
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2013
Brown & Brown, Inc. (NYSE: BRO) closed 2013 with a strong year of growth, driven by both organic momentum and acquisitions. Total revenues rose 13.6% to $1.363 billion, commissions and fees grew 14.0% to $1.356 billion, and net income increased 18.0% to $217.1 million, or $1.48 per diluted share. The company reported a 6.7% net internal growth rate in core commissions and fees, up from 2.6% in 2012 and a negative 2.4% in 2011, signaling that the post-2008 soft market and economic weakness are giving way to a firmer pricing and exposure environment. Income before taxes rose 17.3% to $357.6 million, and the effective tax rate was 39.3%. Employee compensation remained the largest expense at 50.1% of revenues, improving slightly from 50.7% in 2012. Growth was also acquisition-heavy. The July 2013 Beecher Carlson acquisition (aggregate price $469.3 million) and nine other 2013 deals contributed substantially to top-line growth, and the company has announced the $602.5 million Wright Insurance Group acquisition, expected to close around April 1, 2014. Financing for Wright is expected to come from a mix of cash and new or existing credit facilities. Total debt stood at $480 million at year-end, up from $450 million, and the company had $203 million in cash. Operating cash flow was $389.4 million, which covered $53.5 million in dividends and about $16.4 million in capex, while acquisitions consumed $367.7 million. Key risks for investors include commission dependence on insurer premium rates, which are cyclical and difficult to forecast; geographic concentration, with about 83% of commissions and fees from 14 states, including Florida, California, and New York; goodwill of $2.0 billion (about 55% of total assets), which would be exposed to impairment if market conditions deteriorate; and acquisition integration risk as the company's growth strategy depends on continued deal activity. Management also expects premium rates and exposure units to rise modestly in 2014, though Colonial Claims' Superstorm Sandy-related revenue from 2013 will not repeat.
Feb 28, 2014
2012
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2012
Brown & Brown, Inc. (NYSE: BRO) closed 2012 as a clear inflection year. Total revenues rose 18.4% to $1.20 billion and net income rose 12.2% to $184.0 million, or $1.26 diluted EPS (vs. $1.13 in 2011). Growth was driven largely by acquisitions, including the $395 million cash purchase of Arrowhead General Insurance Agency in January 2012, but management also reported positive internal (organic) core commissions and fees growth of 2.6% for the first time since 2006, after five years of negative organic growth. That reversal reflects modestly rising premium rates and stabilizing insurable exposure units. Income before taxes grew 12.7%, though management noted that same-office profit growth was weaker once acquisition effects, earn-out adjustments, and a one-time $6.8 million producer bonus were excluded. Balance sheet leverage increased meaningfully. Goodwill rose to $1.71 billion, total assets to $3.13 billion, and long-term debt to $450 million (from $250 million), largely to fund Arrowhead. Shareholders' equity grew to $1.81 billion. Operating cash flow was $220.3 million, below the $237.5 million in 2011, while $425.1 million went to acquisitions. The company paid $49.5 million in dividends (quarterly dividend raised to $0.09) and bought back no stock under its $100 million authorization. Management states liquidity is sufficient through at least the end of 2013, and Deloitte issued unqualified opinions on both the financial statements and internal controls. Key risks for investors include the cyclical nature of premium rates, dependence on acquisitions for growth, goodwill impairment exposure given the large intangible base, geographic concentration (about 78.5% of commissions and fees from 11 states, with Florida and California prominent), and the ongoing regulatory scrutiny of profit-sharing contingent commissions. Profit-sharing contingent commissions are also less predictable and represented about 4.3% to 5.7% of prior-year revenue over the last three years.
Mar 1, 2013
2011
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2011
Brown & Brown, Inc. (BRO) closed fiscal 2011 with total revenues of $1.014 billion, up 4.1% year over year, and net income of $164.0 million, up 1.4%. Diluted EPS was $1.13 versus $1.12 in 2010. Growth came mainly from acquisitions: the company completed 37 acquisitions in 2011 with estimated annualized revenues of $88.7 million. Underlying organic performance remained weak, with core organic commissions and fees down 2.6% (about $23.3 million of net lost revenue), though this was an improvement from the (4.7)% decline in 2010. Management noted that exposure units appear to be declining more slowly and that premium rates are showing early signs of modest increases in 2012. The most important subsequent event is the January 9, 2012 acquisition of Arrowhead General Insurance Agency, a large managing general agent, for a cash purchase price of about $395.0 million. It was financed with new SunTrust and JPMorgan debt, and management estimates Arrowhead's 2011 revenues at roughly $107.5 million. This substantially increases leverage. Long-term debt was $250.0 million at year-end 2011, and new borrowings include a $100 million SunTrust term loan, a $100 million JPMorgan term loan, and up to $50 million of revolver draws. The deal also raises the effective tax rate guidance for 2012 to about 41.0%, and goodwill rose to $1.32 billion, which represents a significant share of total assets of $2.61 billion. Key risks for investors include revenue dependence on premium rates the company does not control, concentration in a few states (76.1% of commissions and fees from 11 states), and goodwill that would need to be written down if the business deteriorates. Shareholder equity rose to $1.64 billion, and the company paid $46.5 million in dividends during 2011 with a quarterly rate increased to $0.085.
Feb 29, 2012
2010
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2010
Brown & Brown, Inc. (NYSE: BRO) reported FY2010 total revenues of $973.5 million, up 0.6% from $967.9 million in 2009, and net income of $161.8 million (diluted EPS $1.12, up from $1.08). Growth was modest and driven by acquisitions and higher profit-sharing contingent commissions, while core commissions and fees fell 4.7% on an internal basis, the fourth consecutive year of negative internal growth. Management attributes the weakness to a prolonged soft market in premium rates and declining insurable exposure units, with the Florida property market and the Wholesale Brokerage Division under particular pressure. Income before taxes rose 4.5% to $266.1 million, helped by cost efficiencies in rent and legal expense and a $1.7 million earn-out credit. Balance sheet and cash generation remained strong. Operating cash flow was $296.1 million, cash rose to $273.0 million, and goodwill reached $1.19 billion after 33 acquisitions costing $158.6 million in cash. Long-term debt was roughly flat at $250.1 million, and the company agreed in January 2011 to issue $100 million of 4.5% Series E notes, with funding in September 2011 to coincide with the maturity of the $100 million Series A notes. Management expects premium rates to stay soft in 2011 while exposure units decline more slowly, which it views as a gradual stabilization. Investors should weigh the company's disciplined acquisition strategy and cash generation against persistent organic revenue declines and concentration risk. Key risks include goodwill impairment exposure if the stock price or cash flows weaken, dependence on profit-sharing commissions from a few insurers, geographic concentration in nine states that produced 73.4% of commissions and fees, and a significant ownership stake held by the Brown family (about 16.9%). In addition, former executives who left in 2010 and early 2011 are forming a competing firm backed by up to $250 million of private equity.
Mar 1, 2011
2009
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2009
Brown & Brown, Inc. (BRO) experienced a challenging year in 2009, marked by a 0.1% decline in total revenues to $967.9 million, the first revenue decrease since 1993. This downturn was attributed to a prolonged "soft market" in insurance premium rates and, more significantly, a decline in "insurable exposure units" due to the weakening U.S. economy. Net income also saw a decrease, falling to $153.3 million from $166.1 million in 2008. Despite the revenue headwinds, the company demonstrated resilience through strategic acquisitions, adding 11 new entities. Management highlighted the company's long-term growth trajectory, with a 15.6% compound annual growth rate in revenue from 1993 to 2009 and a 20.3% compound annual growth rate in net income over the same period. The company maintained a strong focus on managing expenses, with employee compensation and benefits as a percentage of revenue rising slightly, but controlled through headcount reductions. The report also indicates no goodwill impairment for the year. Investors should note the company's heavy concentration in nine key states (California, Florida, Indiana, Michigan, New Jersey, New York, Pennsylvania, Texas, and Washington), which accounted for 74.3% of revenues in 2009, making it susceptible to regional economic downturns and regulatory changes. Additionally, the company is navigating a competitive landscape and ongoing governmental investigations into industry compensation practices, which could pose future risks.
Mar 1, 2010
2008
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2008
Brown & Brown, Inc. (BRO) reported its fiscal year results for 2008 amidst a challenging economic environment. Total revenues increased by 1.9% to $977.6 million, driven by acquisitions, though internal core commission and fee revenue experienced a decline of 5.5%. This decline was attributed to a "soft market" for insurance premiums, reduced insurable exposure units due to the economic downturn, and specific regional impacts like the competitive pricing from Florida's Citizens Property Insurance Corporation. Despite these headwinds, the company successfully completed a record number of acquisitions in 2008, integrating 43 insurance intermediary entities and several books of business, which contributed significantly to the overall revenue growth. The company maintained a solid financial position with a current ratio of 1.00 and managed its debt effectively, ending the year with $78.6 million in cash and cash equivalents. Management highlighted the ongoing challenges related to premium rate declines and economic weakness, projecting that declining exposure units would have a greater impact in 2009 than rate declines. However, the company's decentralized sales culture and consistent focus on long-term growth through acquisitions remain core strategies. The company also continued to pay quarterly dividends, demonstrating a commitment to shareholder returns. The report also noted the upcoming succession of J. Powell Brown as CEO in July 2009, with J. Hyatt Brown remaining Chairman.
Mar 2, 2009
2007-A
BROWN & BROWN, INC. Annual Report (Amendment), Year Ended Dec 31, 2007
Brown & Brown, Inc. (NYSE: BRO) closed 2007 with total revenues of $959.7 million (up 9.3%) and net income of $191.0 million (up 10.8%), with diluted EPS of $1.35 versus $1.22 in 2006. Growth was almost entirely acquisition-driven: the company completed 41 acquisitions with roughly $108.3 million of estimated annual revenue, while core commissions and fees fell 3.4% on an internal basis, the first negative internal growth year since the company began tracking it in 1997. The decline was concentrated in Florida, where state-backed Citizens Property Insurance cut rates roughly in half and captured market share, and in the home-building-exposed wholesale operations in southern California. Reported earnings were also flattered by one-time items, including an $18.7 million gain on the sale of its Rock-Tenn stake and $13.5 million (per the MD&A, $13.7 million in the Retail discussion) from sales of customer accounts. Balance sheet and cash flow remain solid. Operating cash flow was $215.3 million, funding $212.3 million of acquisitions and $35.1 million of dividends, and goodwill and intangibles together reached roughly $1.29 billion of the $1.96 billion asset base, so future impairment risk is a relevant consideration. Management guides that Citizens' 2008 rates will be similar to 2007 and that competitive Florida casualty pricing (down as much as 20-25%) will persist into at least the first half of 2008. Investors should weigh the strong acquisition-led compounding record against the organic growth slowdown and the concentration of revenue in a few states and two insurance carriers, which together account for roughly 10.6% of total revenues. The filing also flags ongoing state investigations into contingent commission practices and an unresolved derivative demand. Management states that no material liability is expected, but it acknowledges that outcomes could affect profit-sharing contingent commissions, which represented about 5.8% of prior-year revenues on average over the last three years.
Mar 20, 2008
2007
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2007
Brown & Brown, Inc. (NYSE: BRO) closed 2007 with total commissions and fees of $914.7 million (up 5.8%) and total revenues of $959.7 million (up 9.3%), while net income rose 10.8% to $191.0 million and diluted EPS reached $1.35, up from $1.22. Headline growth, however, was flattered by acquisitions and one-time gains. The company made 41 acquisitions in 2007 with estimated annual revenues of $108.3 million, and it booked an $18.7 million gain on the sale of its Rock-Tenn Company stake plus $13.5 million to $13.7 million of gains from selling customer accounts. Core organic performance deteriorated sharply: the net internal growth rate of core commissions and fees was (3.4)%, the first negative year since tracking began in 1997. Management attributed this to a soft property and casualty pricing market, Florida's state-run insurer Citizens cutting rates roughly in half, and weakness in the Southern California home-building segment. Profitability held up better than organic growth suggests. The employee compensation ratio rose modestly to 46.3%, while the other operating expense ratio improved to 13.7%, and the effective tax rate was 38.7%. Operating cash flow was $215.3 million, and capital expenditures were $30.6 million. Shareholders' equity grew to $1.10 billion, with a book value per share of $7.80, and long-term debt was about $228 million. Management expects Citizens' 2008 rates to be similar to 2007, so the year-over-year headwind should ease, though casualty pricing pressure in Florida (rates down as much as 20%-25%) is expected to persist for at least the first half of 2008. Brown & Brown also plans its first international expansion, into the United Kingdom. For investors, the central question is whether the acquisition-driven growth model can offset negative organic growth. Continued acquisition spending ($212.3 million in 2007, with another $71.1 million of deals closed in January and February 2008) and the company's dependence on profit-sharing contingent commissions remain key variables, along with the unresolved state investigations into broker compensation practices.
Feb 29, 2008
2006
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2006
Brown & Brown, Inc. (NYSE: BRO) closed fiscal 2006 with record results: total revenues rose 11.7% to $878.0 million, net income grew 14.5% to $172.4 million, and diluted EPS reached $1.22 versus $1.08 in 2005. Growth was driven by a mix of net new business, acquisitions (32 agency operations acquired in 2006 with about $56.4 million of annualized revenue), and profit-sharing contingent commissions, which rose 17.4% to $41.0 million. Core commissions and fees grew an internal 4.0%, a modest organic rate that management attributes to softening premium rates in most U.S. regions, partly offset by coastal property rate increases in the Southeast. Margin discipline held up: the pre-tax margin was about 31.9%, and employee compensation fell to 46.1% of revenue from 47.7%. The balance sheet strengthened, with shareholders' equity up 21.6% to $929.3 million, though goodwill and intangibles now make up roughly 60% of total assets. Operating cash flow was $225.2 million, funding $143.7 million of acquisitions and $29.3 million of dividends, and the company repaid $87.4 million of debt. Management reports a current ratio of 1.10 and says liquidity is sufficient through at least 2007. The company also placed $25 million of new 5.66% Series C senior notes and reduced its revolver commitment from $75 million to $20 million. Key risks for investors include the cyclical, hard-to-forecast nature of commission revenue; regulatory scrutiny of contingent commissions and related antitrust class actions, which management says cannot yet be estimated; geographic concentration, with about 71% of commissions and fees from eight states; and reliance on two insurance carriers for roughly 10% of total revenue. Florida's early-2007 regulatory changes are expected to substantially reduce FIU (condominium program) revenue in 2007.
Mar 1, 2007
2005
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2005
Brown & Brown, Inc. (NYSE: BRO) closed fiscal 2005 with record results: total revenues rose 21.5% to $785.8 million and net income grew 16.9% to $150.6 million, or $1.08 diluted EPS (up from $0.93). Growth was driven by an aggressive acquisition program (32 agency acquisitions in 2005 with about $125.9 million of annualized revenue, including the $175 million Hull & Company deal, the largest in company history) and by a 2005 net internal growth rate in core commissions and fees of only 3.1%, down from 4.3% in 2004 and 5.9% in 2003. The softening of premium rates is the key organic headwind, and the 2005 hurricane season is expected to put upward pressure on coastal property premiums in 2006. The balance sheet expanded considerably: total assets grew to $1.61 billion, goodwill reached $549 million, and debt was modestly lower at roughly $270 million including current maturities. Operating cash flow was $215 million, funding $262 million of acquisitions and $23.6 million of dividends. Management says liquidity is sufficient through at least 2006, and the company retains about $90 million of its $250 million shelf registration. The main risk for investors is regulatory and legal. Brown & Brown is among more than ten intermediaries named in multi-district antitrust class actions over contingent commissions, and it has received subpoenas or information requests from roughly 19 state agencies. A Florida Attorney General suit against Marsh & McLennan, filed March 14, 2006, raises the prospect of similar exposure in the company's home state. Management could not estimate a range of possible loss and warned that the outcome could be material, and that it could lead to the loss of contingent commissions, which made up about 6% of prior-year commissions and fees.
Mar 16, 2006
2004
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2004
Brown & Brown, Inc. (BRO) reported strong revenue growth in its 2004 10-K filing, with total revenues reaching $646.9 million, a 17.1% increase over the previous year. This growth was primarily driven by a robust acquisition strategy, with 32 agencies and several books of business acquired during the year, alongside consistent net new business production. The company's core commission and fee revenue saw a notable increase, demonstrating the resilience of its diversified business segments, including Retail, National Programs, Brokerage, and Services. Net income for 2004 was $128.8 million, a significant increase from $110.3 million in 2003, reflecting successful integration of acquisitions and operational efficiencies. The company maintained its objective of at least 15% annual net income per share growth, achieving this for the 12th consecutive year. Despite a moderating insurance premium rate environment, Brown & Brown continued to expand its market presence and enhance shareholder value through strategic acquisitions and operational execution.
Mar 16, 2005
2003
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2003
Brown & Brown, Inc. (BRO) reported a strong 2003. Total revenues rose 20.9% to $551.0 million, and net income grew 32.7% to $110.3 million, with diluted EPS of $1.60 versus $1.22 in 2002. Commissions and fees, the core revenue line, increased 20.6%, but organic (core) growth was a more modest 5.9%, as acquisitions drove much of the gain. Management attributes the slowdown in top-line growth to moderating premium rate increases during 2003, which it expects to continue through 2004. The company's stated objective of growing EPS at least 15% annually was met again, and pre-tax margins held up well at roughly 32%. The balance sheet expanded meaningfully. Total assets reached $865.9 million and shareholders' equity rose to $498.0 million, largely from retained earnings. Long-term debt fell to $41.1 million, down from $57.6 million, and the company generated $142.7 million of operating cash flow. The company completed 23 agency acquisitions in 2003 for about $86 million, and it entered 2004 with 11 more acquisitions totaling roughly $92.9 million. Goodwill and amortizable intangibles together now exceed $470 million, which is a significant share of total assets and a key area for investors to monitor. Risk factors include a concentration of business in Florida, New York, California, Arizona, and Washington; reliance on two insurance carriers that together generated about 10.8% of revenues; a Physicians' Protector Plan contract that expired in March 2003 with no replacement yet secured; and contingent commissions, which averaged about 6.8% of prior-year commission and fee revenues. The Gresham litigation, which had sought more than $10 million in damages, was resolved in the company's favor, with the appellate affirmance in January 2004 and the time for further appeal having expired.
Mar 15, 2004
2002-A
BROWN & BROWN, INC. Annual Report (Amendment), Year Ended Dec 31, 2002
Brown & Brown, Inc. (BRO) closed fiscal 2002 with its strongest year on record, extending a long streak of growth. Total revenues rose 24.9% to $455.7 million, commissions and fees rose 25.7% to $452.3 million, and net income climbed 54.2% to $83.1 million, or $1.22 per diluted share (up 43.5%). Pre-tax margin, measured as income before taxes and minority interest over total revenues, was roughly 29.5% in 2002, versus 24.8% as restated in 2001. Much of the expansion came from acquisitions (32 agencies with about $62 million in annualized revenue), a general firming of premium rates that began in early 2000, and solid net new business growth. Core commissions and fees, which exclude acquisitions and divestitures, grew 12.1%, a useful gauge of organic momentum. The balance sheet was substantially reshaped. A March 2002 follow-on offering of 5 million shares raised $149.4 million, which funded $120.9 million of acquisitions and helped repay debt. Shareholders' equity more than doubled to $391.6 million, total assets rose 54% to $754.3 million, and long-term debt fell to $57.6 million (total debt of about $84.9 million including current portions). Management noted that the company was in covenant compliance and expects premium rates to keep rising through at least 2003, though it flagged a specific risk: a professional medical program lost its carrier, which will cut 2003 revenue from that program to under $0.5 million from about $2.3 million. Also noted is a concentration risk, since one carrier accounted for 3.4% of 2002 revenues, down from 6.5% in 2000. The filing also records a number of items relevant to investors. The effective tax rate fell to 36.6% from 38.5%, helped by a $1 million state tax credit that management does not expect to recur, and the ongoing rate is estimated at 38.0%. Stock performance plan expense rose to $3.8 million, and management intends to issue new performance stock grants in 2003 at $35.00. Operating cash flow was $93.3 million. Investor focus should center on whether organic growth can hold near the low-teens level as premium rate increases eventually moderate, and on the cost of the acquisition-driven growth model.
May 27, 2003
2002
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2002
Brown & Brown, Inc. (NYSE: BRO) closed 2002 with a strong year of growth driven by a firm premium-rate environment, acquisitions, and net new business. Total revenues rose 24.9% to $455.7 million, commissions and fees grew 25.7% to $452.3 million, and net income increased 54.2% to $83.1 million, or $1.22 diluted EPS (up 43.5%). Pre-tax margin reached roughly 29.5% in 2002, and management notes that 2002 is the first full year free of pooling-of-interests restatement effects, making it the most representative baseline for ongoing profitability. Core commissions and fees (excluding acquisitions and divestitures) grew 12.1%, which suggests that organic growth, rather than acquisitions alone, is supporting the top line. Management says it expects premium rates to keep rising through at least 2003. The balance sheet strengthened materially. A March 2002 follow-on offering of 5 million shares raised $149.4 million net, which funded $120.9 million of acquisitions and debt repayment. Total assets grew 54% to $754.3 million, shareholders' equity more than doubled to $391.6 million, and long-term debt fell to $57.6 million from $78.2 million. Concentration and litigation risks are modest: one carrier accounted for 3.4% of revenues, the Retail Division is not dependent on any single client, and the principal pending lawsuit (Gresham & Associates) has been resolved in the company's favor at the summary judgment stage. Key watch items for investors include the expiration of the Physicians Protector Plan carrier contract in March 2003 (2002 revenue of about $2.3 million, with 2003 revenue expected below $0.5 million without a replacement), a continued reliance on acquisitions for growth, and the cyclical nature of commission revenue tied to premium rates.
Mar 24, 2003
2001
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2001
Brown & Brown, Inc. (BRO) demonstrated robust growth in its 2001 fiscal year, with total revenues reaching $365.0 million, a significant increase driven by a higher-than-historical number of acquisitions and a favorable insurance premium rate environment. The company's core objective of achieving at least 15% annual net income per share growth has been met for nine consecutive years, highlighting a consistent focus on profitability and operational efficiency. The company's diversified business model, comprising Retail, National Programs, Services, and Brokerage divisions, continues to perform well, with the Retail Division remaining the largest contributor to revenue. Acquisitions played a pivotal role in 2001, partly due to the anticipated elimination of pooling-of-interests accounting, leading to a substantial expansion in the company's operational footprint across 28 states. While this accelerated acquisition pace increased debt levels and reduced short-term liquidity temporarily, the company's management believes its current cash flow and credit facilities are sufficient to meet its liquidity needs. The increasing insurance premium rates, expected to continue into 2002, provide a positive outlook for continued revenue growth and commission stability.
Feb 15, 2002
2000-A
BROWN & BROWN, INC. Annual Report (Amendment), Year Ended Dec 31, 2000
Brown & Brown, Inc. (NYSE: BRO) reported strong fiscal 2000 results, with total revenues up 11.3% to $209.7 million and net income up 23.9% to $33.2 million, or $1.16 per diluted share (up 23.4%). Commissions and fees rose 11.5% to $204.9 million, though growth excluding acquisitions was a more modest 8%. Pre-tax margin improved to 25.7% from 23.4% in 1999, driven by a general firming of premium rates after years of soft market conditions, modest new business growth, and cost containment under the company's "Project 28" initiative. Other operating expenses fell to 16% of revenues from 18%. The company's most significant forward-looking event is the January 1, 2001 acquisition of Riedman Corporation's insurance agency operations, which adds more than 60 offices in 13 states and generated roughly $53.4 million of revenue in 2000. The purchase price of about $83 million is funded by a $90 million seven-year term loan. Management estimates Riedman could contribute up to $0.06 to 2001 net income per share, and expects premium rate increases to continue through at least the first half of 2001. Pooling-of-interest acquisitions completed in 2000 and early 2001 further expanded the footprint, and the balance sheet shows total assets of $276.7 million, shareholders' equity of $121.9 million, and cash of $31.3 million. This filing is Amendment No. 1 to the 2000 Form 10-K, filed solely to correct typographical and alignment errors in the electronic version of Exhibit 13 (the Annual Report financials). The amendment does not change the reported financial results. Investors should weigh the company's concentration risk: about 7% of 2000 revenues came from a single insurance carrier, and a significant share of business is concentrated in Arizona, Florida, and New York, which exposes results to regional economic conditions and natural disasters.
Mar 27, 2001
2000
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2000
Brown & Brown, Inc. (NYSE: BRO) closed fiscal 2000 with strong top- and bottom-line growth. Commissions and fees rose 11.5% to $204.9 million, total revenues grew 11.3% to $209.7 million, and net income increased 23.9% to $33.2 million, or $1.16 per diluted share. Pre-tax margin expanded to 25.7% from 23.4% in 1999, driven by a general increase in property and casualty premium rates, modest new business growth, and cost containment under the 'Project 28' initiative. Management noted that premium rates rose for four consecutive quarters in 2000, ending the soft market that had persisted since the mid-1980s, and expects increases to continue through at least the first half of 2001. Core (organic) commissions and fees grew only 8% in 2000, versus 2% in each of 1999 and 1998, so much of the growth still came from acquisitions. The most significant event for investors is the January 3, 2001 acquisition of Riedman Corporation's agency operations, which added more than 60 offices in 13 states and roughly $53.4 million of 2000 revenue. The purchase price is expected to be about $83 million, funded by a new $90 million seven-year term loan, and management expects Riedman could add up to $0.06 to 2001 EPS. Total locations rise from 39 to 108 across 24 states, and the company's 2001 workforce grows from 1,614 to 2,277 full-time equivalents. This materially increases leverage and integration risk, although the balance sheet entering 2001 was lightly levered, with only $5.3 million of long-term debt at year-end 2000. Risks remain concentrated. About 7% of 2000 revenues came from a single carrier, down from 17% in 1998, and the company's business is concentrated in Arizona, Florida, and New York. Commission revenue remains exposed to premium-rate cycles, and the National Programs division's commissions declined for a third consecutive year. A pending lawsuit (Gresham & Associates) seeks punitive damages of at least $10 million, although management characterizes the claims as defensible and does not expect a material adverse effect.
Mar 14, 2001
1999
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 1999
Brown & Brown, Inc. (NYSE: BRO) reported a solid 1999 with commissions and fees up 10.9% to $172.5 million and total revenues up 11.0% to $176.4 million. Net income rose 16.4% to $27.2 million, and diluted EPS increased 16.5% to $1.98. Pre-tax margin improved to 25.1% from 23.9% in 1998, reflecting revenue growth and cost containment under the company's "Project 28" initiative, with other operating expenses falling to 19% of revenue from 20%. Much of the growth came from acquisitions. Excluding acquisitions, commissions and fees grew only about 2%, reflecting the continuing soft market in property and casualty premium pricing. The balance sheet strengthened considerably. Long-term debt fell to $3.9 million from $17.4 million after the company repaid $17.1 million, and shareholders' equity rose to $103.0 million from $83.7 million. Cash flow from operations was $39.7 million. The current ratio declined to 0.95, which management attributed to debt repayment. The company also deployed $18.2 million on acquisitions in 1999, and it maintains a $50 million revolving credit facility that was undrawn at year-end, with a maturity date of October 2000. Investors should weigh several risks. The company is concentrated in Florida, and one insurance carrier accounted for roughly 14% of 1999 revenues. A pending Georgia lawsuit (Gresham & Associates) seeks at least $10 million in punitive damages, which management is contesting vigorously. Revenue growth remains dependent on premium rates that management cannot control and that have been declining since the mid-1980s. The stock closed at $32.94 on March 3, 2000, and the annual dividend rose to $0.46 per share.
Mar 15, 2000
1998
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 1998
Poe & Brown, Inc. (now Brown & Brown, Inc.) reported 1998 commissions and fees of $150.44 million, up from $133.25 million in 1997, and total revenues of $153.79 million. Pre-tax income rose to $37.49 million from $30.46 million, and net income reached $23.05 million, or $1.72 per share, versus $18.67 million, or $1.40 per share, in 1997. The company, headquartered in Daytona Beach and Tampa, Florida, is a diversified insurance brokerage and agency earning commissions and fees, with a Service Division providing third-party administration and benefit consulting. Management attributed growth to new business production and acquisitions, while noting that a soft property and casualty premium-rate environment continued to weigh on commissions. The company made 19 agency acquisitions plus several customer-account purchases in 1998 at an aggregate cost of $34.6 million, and completed a pooling-of-interests merger with Daniel-James Insurance Agency. Long-term debt rose to $17.21 million from $6.26 million, mainly because the revolving credit facility balance reached $12.0 million, and the facility was expanded to $50 million. Shareholders' equity grew to $84.21 million, and the company paid cash dividends of $0.41 per share. Florida concentration, reliance on one insurance carrier for about 17% of revenues, and Year 2000 readiness were highlighted as risks.
Mar 15, 1999
1997
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 1997
This 10-K for fiscal 1997 was filed by Poe & Brown, Inc. (NYSE: PBR), a Florida-based property and casualty insurance agency. The request named Brown & Brown, Inc. (BRO), but the filing itself is Poe & Brown's, which was formed in a 1993 merger of Poe & Associates and Brown & Brown. The company reported 1997 commissions and fees of $124.4 million, up 9% from $114.4 million, and total revenues of $129.2 million. Net income rose 17.5% to $19.4 million, and pre-tax margin improved to 24.5% from 22.8%. Growth came mainly from new business and acquisitions, while the soft market for premium rates continued to pressure renewal commissions. Organic commission growth was 6%, and the company has been expanding through small agency acquisitions. The balance sheet is conservative. Cash and equivalents rose to $47.7 million, long-term debt fell to $4.1 million from $5.3 million, and shareholders' equity grew to $77.1 million. Operating cash flow was $33.0 million, funding $5.9 million of share repurchases, $4.6 million of dividends, and $3.1 million of acquisitions. Key risks include Florida geographic concentration, a single carrier that accounts for about 20% of revenues, and a $11.2 million Puerto Rico lawsuit scheduled for a June 1998 hearing, which management believes is defensible and insured. The per-share figures are pre-split: a three-for-two stock split took effect February 27, 1998.
Mar 24, 1998
1996
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 1996
This 10-K is for Poe & Brown, Inc. (Nasdaq: POBR), a Florida general insurance agency, not Brown & Brown, Inc. (BRO) as the request states. The company does not underwrite risk. It earns commissions and fees by placing property and casualty coverage, and it runs third-party administration and benefit consulting services. For fiscal 1996, commissions and fees rose 12% to $114.4 million, and total revenues reached $118.7 million, up 11.6%. Net income grew 11.5% to $16.5 million, or $1.90 per share, compared with $1.70 in 1995. Pre-tax margin improved to 22.8% from 21.9%. Management attributes most of the growth to acquisitions. Organic commission growth was a more modest 4%, and the company cited a long-running soft market in property and casualty premium rates. The balance sheet expanded materially in 1996. Total assets rose to $179.7 million from $151.1 million, driven by a $13.6 million increase in intangibles, mainly purchased customer accounts, after $12.3 million of cash acquisitions. Shareholders' equity increased to $67.3 million, helped by $6.5 million of unrealized gains on its Rock-Tenn holdings. Total debt was about $10.7 million, and operating cash flow was $28.6 million. The current ratio was a thin 1.06 to 1.0, largely because of current debt and premiums payable to carriers. Liquidity is supported by an undrawn $10 million revolver expiring in November 1998. Key risks include concentration in Florida, where most of the business is written, and dependence on one carrier that accounted for about 22% of revenues. The company also faces an $11.2 million damages suit tied to a 1994 fire-related coverage dispute, with trial set for December 1997. Management says insurance should cover any loss, and it does not expect material adverse effects from other claims. The stock closed at $26.50 on March 7, 1997, with a non-affiliate market value of about $177 million.
Mar 21, 1997
1995
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 1995
This Form 10-K is for Poe & Brown, Inc. (Nasdaq: POBR), a Florida-based general insurance agency, not Brown & Brown, Inc. (NYSE: BRO) as the request header states. The company formed from a 1993 merger of Poe & Associates and Brown & Brown, Inc. It earns commissions and fees, and does not underwrite risk. For fiscal 1995, commissions and fees rose 6% to $102.0 million, total revenues reached $106.4 million, and net income rose about 9% to $14.8 million, or $1.70 per share. Pre-tax margin improved to 21.9% from 20.3%, and total expenses fell to 78.1% of revenue from 79.7%. Management attributes the gains to acquisitions, operating efficiencies, and lower interest expense from debt repayment, while noting that a multi-year soft market in premium rates continues to pressure revenue. The balance sheet strengthened over the year. Shareholders' equity grew to $54.4 million from $44.1 million, long-term debt was reduced to about $8.8 million, and cash rose to $28.4 million. Operating cash flow was $21.2 million, and the company paid $0.48 per share in dividends. Intangibles of $36.6 million are a significant asset, which investors should keep in mind if acquisition pricing or customer-account values weaken. Key risks include concentration in Florida, with about 24% of revenue from one insurance carrier (CNA-underwritten programs), an $11.2 million Puerto Rico lawsuit that management says insurance should cover, and the ongoing soft market. The company said its resources are sufficient through at least the end of 1996. At the March 4, 1996 price of $25.25, non-affiliate market value was about $161.7 million.
Mar 20, 1996
1994
BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 1994
This 10-K for fiscal 1994 is from Poe & Brown, Inc. (NASDAQ: POBR), a Daytona Beach/Tampa, Florida insurance agency. The prompt names the filer as Brown & Brown, Inc. (BRO), but the filing itself is Poe & Brown's. Brown & Brown was a closely held agency acquired by Poe & Associates in a April 1993 pooling-of-interests merger, and the combined company took the Poe & Brown name. Revenue rose 4% to $99.5 million, with commissions and fees up 2% to $93.8 million. Net income more than doubled to $13.3 million, or $1.56 per share, from $8.0 million ($0.95) in 1993. Management says that excluding a $0.16 gain from selling part of its Rock-Tenn stake and a $0.08 benefit from a tax reserve reduction, EPS grew about 39%, driven by a roughly 4% drop in expenses and modest revenue growth. The balance sheet strengthened considerably. Long-term debt fell from $17.3 million to $7.4 million after the company repaid its bank term loans and a large portion of other debt, and cash remained solid at $23.0 million. Shareholders' equity rose to $44.0 million from $27.2 million, though $5.3 million of that increase reflects an unrealized gain on available-for-sale securities under the new SFAS 115 rules. Book value per share was $5.15 at year-end 1994. Key risks remain. Revenue depends on commission rates, which have been falling in a soft property and casualty market since 1986, and the company is heavily concentrated in Florida. About 23% of revenue comes from one insurer, CNA, which underwrites its flagship professional-liability programs. Pending matters include an $11.2 million Puerto Rico lawsuit and a third-party claim tied to a Lloyd's loss, both of which management says it will contest and believes insurance would cover. The IRS dispute appears largely resolved, with a reserve of $0.8 million against an assessment that was settled in March 1995 at about $0.6 million.
Mar 31, 1995