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Brown & Brown's (BRO) Powell Brown on Q1 2016 Results - Earnings Call Transcript

Q1 2016 Earnings Conference Call

April 19, 2016, 08:00 AM ET


Powell Brown - President and Chief Executive Officer

Andrew Watts - Executive Vice President and Chief Financial Officer


Kai Pan - Morgan Stanley & Co.

Elyse Greenspan - Wells Fargo Securities, LLC.

Charles Sebaski - BMO Capital Markets Corp.

Quint McMillan - Keefe, Bruyette & Woods, Inc.

Mark Hughes - SunTrust Robinson Humphrey

Michael Nannizzi - Goldman, Sachs & Co.

Ryan Byrnes - Janney Montgomery Scott LLC.


Please standby. Good day and welcome to the Brown & Brown Incorporated 2016 First Quarter Earnings Call. Today’s call is being recorded.

Please note that certain information discussed during this call, including information contained in the slide presentation posted in connection with this call, and including answers given in response to your questions may relate to future results and events, or otherwise be forward-looking in nature. Such statements reflect our current views with respect to future events, including those relating to the company’s anticipated financial results for the first quarter of 2016, and are intended to fall within the Safe Harbor provisions of the Securities Laws.

Actual results or events in the future are subject to a number of risks and uncertainties and may differ materially from those currently anticipated, or desired, or referenced in any forward-looking statements made as a result of a number of factors. Such factors include the company’s determination as it finalizes its financial results for the first quarter of 2016 that its financial results differ from the current preliminary unaudited numbers set forth in the press release issued yesterday, other factors that the company may not have currently identified or quantified, and those risks and uncertainties identified from time-to-time in the company’s reports filed with the Securities and Exchange Commission.

Additional discussion of these and other factors affecting the company’s business and prospects, as well as additional information regarding forward-looking statements is contained in the slide presentation posted in connection with this call and the company’s filings with the Securities and Exchange Commission. We disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

With that said, I would now like to turn the call over to Powell Brown, President and Chief Executive Officer. You may begin.

Powell Brown

Thank you Taylor. Good morning everybody and thanks for joining us for our first quarter earnings call. Now let’s jump right into it.

I'm on Slide Four. We delivered $424.2 million of revenue for the quarter, growing 4.9% in total and 1.3% organically. Once again, each of our four divisions delivered organic growth and for the quarter, our EBITDAC margins remained steady. Contingents were $34.1 million, we delivered $0.44 per share for the quarter, which is an increase of 12.8% over the prior year.

During the first quarter, we continue to talk with a number of acquisition prospects and we acquired three companies with annualized revenues of approximately $14.5 million. While valuations remain high and the acquisition marketplace continues to be very active, we're constantly evaluating organizations that fit culturally and makes sense financially.

On Slide Five, we summarized the quarter as a continuation of what we experienced during much of 2015. Our customers continue with modest hiring construction appears to be picking up in a number of communities throughout the country, sales are up slightly and insurable value through increasing. As we’ve said before, this is not consistent in all industries or geography.