10-QPeriod: Q2 FY2017

BROWN & BROWN, INC. Quarterly Report for Q2 Ended Jun 30, 2017

Filed August 4, 2017For Securities:BRO

Summary

Brown & Brown, Inc. (BRO) reported its financial results for the quarter and six months ended June 30, 2017. For the quarter, total revenues increased by 4.4% to $466.3 million, while net income slightly decreased by 0.2% to $66.1 million. For the six-month period, total revenues grew by 7.0% to $931.4 million, and net income saw a more substantial increase of 6.2% to $136.2 million. Acquisitions continue to be a key growth driver, contributing significantly to revenue. Organic revenue growth, a key performance indicator excluding acquisitions and divestitures, was 1.6% for the quarter and 2.5% for the six-month period, indicating solid underlying business performance. The company's balance sheet remains strong, with total assets at $5.3 billion and shareholders' equity at $2.5 billion. Management expects sufficient liquidity to cover its obligations for at least the next twelve months.

Financial Highlights

48 data points
Beta

Revenue

$446.52M

Net Income

$66.25M

14.8% Net Margin

EPS (Diluted)

$0.00

Total Assets

$5.21B

Cash & Equivalents

$453.94M

Free Cash Flow

$154.20M

Financial Statements
Beta
Revenue$446.52M
Operating Expenses$337.44M
Interest Expense$9.84M
Net Income$66.25M
EPS (Basic)$0.00
EPS (Diluted)$0.00
Shares Outstanding (Basic)271.98M
Shares Outstanding (Diluted)275.16M

Key Highlights

  • 1Total revenues for the second quarter of 2017 increased by 4.4% to $466.3 million compared to the prior year period.
  • 2Net income for the six months ended June 30, 2017, increased by 6.2% to $136.2 million.
  • 3Organic revenue growth, a non-GAAP measure, was 1.6% for the quarter and 2.5% for the six-month period, demonstrating underlying business strength.
  • 4The company completed three acquisitions in the first six months of 2017, contributing to revenue growth.
  • 5Employee compensation and benefits increased as a percentage of total revenues, reflecting investments in staff and incentive programs.
  • 6The company amended and restated its credit agreement, extending maturity dates and adjusting loan terms.
  • 7Cash and cash equivalents, inclusive of restricted cash, increased significantly to $876.9 million as of June 30, 2017.

Frequently Asked Questions

Total revenues for the second quarter of 2017 increased by 4.4% to $466.3 million, up from $446.5 million in the second quarter of 2016. This growth was driven by a combination of acquisitions and core business performance, with organic revenue growth of 1.6%.

For the first six months of 2017, net income increased by 6.2% to $136.2 million, compared to $128.3 million in the same period of 2016. This improvement reflects overall revenue growth and effective expense management.

Brown & Brown's total debt decreased by $88.5 million to $985.4 million as of June 30, 2017. The company amended and restated its credit agreement, extending maturity dates and managing its borrowing capacity. Liquidity remains strong, with cash and cash equivalents (including restricted cash) totaling $876.9 million, which management believes is sufficient to meet its obligations for at least the next twelve months.

Organic revenue is a non-GAAP financial measure that represents core commissions and fees, excluding revenues from newly acquired operations within their first twelve months and divested businesses. For the second quarter of 2017, Brown & Brown reported an organic revenue growth rate of 1.6%, and for the first six months of 2017, it was 2.5%. This indicates the underlying growth of the company's established businesses.