FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1998. or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ________________ Commission file number 0-7201. POE & BROWN, INC. (Exact name of Registrant as specified in its charter) Florida 59-0864469 ________________________________ _________________________ (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification Number) 220 S. Ridgewood Ave., Daytona Beach, FL 32115 ________________________________________ ____________ (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (904) 252-9601 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No ___ ____ The number of shares of the Registrant's common stock, $.10 par value, outstanding as of November 1, 1998 was 13,500,857. <PAGE2> <TABLE> <CAPTION> POE & BROWN, INC. Index to Form 10-Q For The Quarter Ended September 30, 1998 ________________________________________ <S> <C> Page ____ PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Condensed Consolidated Statements of Income for the three and nine months ended September 30, 1998 and 1997 3 Condensed Consolidated Balance Sheets as of September 30, 1998 and December 31, 1997 4 Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 1998 and 1997 5 Notes to Condensed Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Item 3. Quantitative and Qualitative Disclosures about Market Risk 11 PART II. OTHER INFORMATION Item 1. Legal Proceedings 12 Item 2. Changes in Securities and Use of Proceeds 12 Item 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 14 </TABLE> <PAGE 3> ITEM 1: FINANCIAL STATEMENTS <TABLE> <CAPTION> POE & BROWN, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands, except per share data) <S> <C> <C> <C> <C> For the three months For the nine months ended September 30, ended September 30, ____________________ ___________________ 1998 1997 1998 1997 ____ ____ ____ ____ REVENUES Commissions and fees $37,868 $30,920 $111,928 $94,440 Investment income 896 933 2,484 3,087 Other income 54 213 9 747 _______ _______ ________ _______ Total revenues 38,818 32,066 114,421 98,274 _______ _______ ________ _______ EXPENSES Employee compensation and benefits 20,183 16,175 58,938 49,505 Other operating expenses 7,074 6,406 22,845 20,605 Interest and amortization 1,788 1,254 4,751 4,718 _______ _______ _______ _______ Total expenses 29,045 23,835 86,534 74,828 _______ _______ _______ _______ Income before income taxes 9,773 8,231 27,887 23,446 Income taxes 3,764 3,128 10,919 9,138 _______ _______ _______ _______ NET INCOME $ 6,009 $ 5,103 $ 16,968 $14,308 ======= ======= ======== ======= Other comprehensive income, net of tax: Unrealized (loss) gain on securities: Unrealized holding (loss) gain, net of tax benefit of $598 and tax effect of $(528) for the three-month periods ended September 30, 1998 and 1997, respectively, and net of tax benefit of $2,030 and tax effect of $(27) for the nine-month periods ended September 30, 1998 and 1997, respectively (916) 945 (3,248) 43 _______ _______ ________ ______ Comprehensive Income $ 5,093 $ 6,048 $ 13,720 $14,351 ======= ======= ======== ======= Basic and diluted earnings per share $ .45 $ .39 $ 1.27 $ 1.10 ======= ======= ======== ======= Dividend declared per share $ .11 $ .0933 $ .31 $ .2667 ======= ======= ======== ======= Diluted shares outstanding 13,476 13,169 13,408 13,056 </TABLE> See notes to condensed consolidated financial statements. <PAGE 4> <TABLE> <CAPTION> POE & BROWN, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) <S> <C> <C> (Unaudited) September 30, December 31, 1998 1997 ASSETS Cash and cash equivalents $ 32,339 $ 47,726 Short-term investments 933 1,299 Premiums, commissions and fees receivable 63,295 62,148 Other current assets 10,023 6,507 ________ ________ Total current assets 106,590 117,680 Fixed assets, net 13,335 11,863 Intangible assets, net 76,476 49,593 Investments 7,220 11,480 Other assets 5,166 3,513 ________ ________ Total assets $208,787 $194,129 ======== ======== LIABILITIES Premiums payable to insurance companies $ 88,285 $ 74,598 Premium deposits and credits due customers 6,935 7,035 Accounts payable and accrued expenses 18,972 15,826 Current portion of long-term debt 3,825 5,339 ________ ________ Total current liabilities 118,017 102,798 Long-term debt 4,804 4,093 Deferred income taxes 1,922 3,951 Other liabilities 7,243 6,145 ________ ________ Total liabilities 131,986 116,987 ________ ________ SHAREHOLDERS' EQUITY Common stock, par value $.10 per share: authorized 70,000 shares; issued 13,501 shares at 1998 and 13,107 shares at 1997 1,350 1,311 Retained earnings 71,955 69,087 Accumulated other comprehensive income 3,496 6,744 ________ ________ Total shareholders' equity 76,801 77,142 ________ ________ Total liabilities and shareholders' equity $208,787 $194,129 ======== ======== </TABLE> See notes to condensed consolidated financial statements <PAGE 5> <TABLE> <CAPTION> POE & BROWN, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) <S> <C> <C> For the nine months ended September 30, _______________________________________ 1998 1997 ____ ____ CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 16,968 $ 14,308 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 6,960 6,299 Net gains on sales of investments, fixed assets and customer accounts (6) (990) Premiums, commissions and fees receivable, decrease 3,567 10,231 Other assets (decrease) (1,000) (718) Premiums payable to insurance companies, increase (decrease) 5,566 (6,231) Premium deposits and credits due customers (decrease) (100) (2,065) Accounts payable and accrued expenses, increase 468 2,669 Other liabilities, increase (decrease) 604 (186) _______ _______ NET CASH PROVIDED BY OPERATING ACTIVITIES 33,027 23,317 _______ _______ CASH FLOWS FROM INVESTING ACTIVITIES Additions to fixed assets (3,034) (2,079) Payments for businesses acquired, net of cash acquired (26,088) (1,837) Proceeds from sales of fixed assets and customer accounts 213 435 Purchases of investments (1,097) (252) Proceeds from sales of investments 754 557 ________ _______ NET CASH USED IN INVESTING ACTIVITIES (29,252) (3,176) ________ _______ CASH FLOWS FROM FINANCING ACTIVITIES Payments on long-term debt (7,596) (2,458) Exercise of stock options and issuances of stock 1,278 1,044 Purchases of stock for stock option plan, employee stock purchase plan and performance stock plan (8,835) (1,664) Cash dividends paid (4,009) (3,398) ________ _______ NET CASH USED IN FINANCING ACTIVITIES (19,162) (6,476) ________ _______ Net (decrease) increase in cash and cash equivalents (15,387) 13,665 Cash and cash equivalents at beginning of period 47,726 31,786 ________ _______ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 32,339 $ 45,451 ======== ======== </TABLE> See notes to condensed consolidated financial statements. <PAGE 6> POE & BROWN, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) SEPTEMBER 30, 1998 Note 1 - Basis of Financial Reporting The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1997. Results of operations for the three- and nine-month periods ended September 30, 1998 are not necessarily indicative of the results that may be expected for the year ending December 31, 1998. Note 2 - Basic and Diluted Earnings Per Share All share and per-share information in the financial statements has been adjusted to give effect to the 3-for-2 common stock split which became effective on February 27, 1998. Basic earnings per share is based upon the weighted average number of shares outstanding. Diluted earnings per share is adjusted for the dilutive effect of stock options. Earnings per share is the same on both a basic and a diluted basis. As of December 31, 1997, the Company adopted Statement of Financial Accounting Standards No. 128, "Earnings per Share" (SFAS 128). All prior-period EPS information is required to be restated. The Company's basic and fully diluted earnings per share (EPS) for the period ended September 30, 1997 computed under SFAS 128 is not different than previously computed. <PAGE 7> <TABLE> <CAPTION> <S> <C> <C> <C> <C> Three Months Ended Sept. 30, Nine Months Ended Sept. 30, 1998 1997 1998 1997 BASIC EARNINGS PER SHARE Net Income $ 6,009 $ 5,103 $16,968 $14,308 ======= ======= ======= ======= Weighted average shares outstanding 13,476 13,167 13,408 13,053 ======= ======= ======= ======= Basic earnings per share $ .45 $ .39 $ 1.27 $ 1.10 ======= ======= ======= ======= DILUTED EARNINGS PER SHARE Weighted average number of shares outstanding 13,476 13,167 13,408 13,053 Net effect of dilutive stock options, based on the treasury stock method - 2 - 3 _______ _______ _______ _______ Total diluted shares used in computation 13,476 13,169 13,408 13,056 ======= ======= ======= ======= Diluted earnings per share $ .45 $ .39 $ 1.27 $ 1.10 ======= ======= ======= ======= </TABLE> The Company has adopted SFAS No. 130, "Reporting Comprehensive Income", in the first quarter of 1998, and has reported comprehensive income on the accompanying consolidated statements of income. Note 3 - Acquisitions During the third quarter of 1998, the Company acquired substantially all of the assets of MacMillan-Buchanan Insurance Agency, of Melbourne, Florida; Lake Sumter Insurance, of Wildwood, Florida; Franchini Consolidated Agency, of Albuquerque, New Mexico; Gulfcoast Commercial Insurance, of Naples, Florida and KRB & Associates, of Houston, Texas. There were no acquisitions of agency assets during the third quarter of 1997. During the second quarter of 1998, the Company acquired substantially all of the assets of the John F. Phillips Insurance Agency, of Prescott, Arizona; Harris Insurance Services, of Las Vegas, Nevada; the Fordham Agency, of St. Petersburg, Florida; Adlerman, Click & Co., of Princeton, New Jersey; Zel Schwanz & Associates, of Phoenix, Arizona; and the Fort Lauderdale office of Hilb, Rogal and Hamilton Company. There were no acquisitions of agency assets during the second quarter of 1997. During the first quarter of 1998, the Company acquired substantially all of the assets of Arizona General Insurance, of Tucson, Arizona; Boynton Brothers & Company, of Perth Amboy, New Jersey; Great Northern Insurance, of Phoenix, Arizona; and the Heine-Miles Insurance Agency, of Phoenix, Arizona. During the first quarter of 1997, the Company acquired substantially all of the assets of Dade Underwriters Insurance Agency, of Aventura, Florida and Willits Insurance Agency, of Ft. Lauderdale, Florida. <PAGE 8> These acquisitions have been accounted for using the purchase method of accounting. The results of operations for the acquired companies have been combined with those of the Company since their respective acquisition dates. If the acquisitions had occurred at the beginning of the periods presented, the Company's results of operations would be as shown in the following table. These unaudited pro forma results are not necessarily indicative of the actual results of operations that would have occurred had the acquisitions actually been made at the beginning of the respective periods <TABLE> <CAPTION> NINE-MONTH PERIOD ENDED SEPTEMBER 30 (Unaudited), (In thousands, except per share data) <S> <C> <C> 1998 1997 ____ ____ Operating revenue $119,782 $112,367 Income before income taxes 28,250 25,117 Net income 17,232 15,321 Earnings per share $ 1.29 $ 1.16 </TABLE> During the third quarter of 1998, the Company issued 92,188 shares of its common stock in exchange for all of the outstanding stock of Jerry F. Nichols & Associates, located in Naples, Florida. During the quarter, the Company also issued 65,131 shares of its common stock for all of the outstanding stock of Boulton Agency, Inc., located in Miami, Florida. During the third quarter of 1997 the Company issued 25,471 shares of its common stock for all of the outstanding stock of Shanahan, McGrath & Bradley, Inc., an Arizona corporation. During the second quarter of 1998, the Company issued 278,765 shares of its common stock in exchange for all of the outstanding stock of Daniel-James Insurance Agency, Inc., an Ohio corporation with offices in Perrysburg, Ohio and Indianapolis, Indiana, and for all of the outstanding membership interests of Becky-Lou Realty Limited, an Ohio limited liability company with offices in Perrysburg, Ohio. During the first quarter of 1998, the Company issued 22,500 shares of its common stock in exchange for all of the outstanding stock of Thim Insurance Agency, Inc., an Arizona corporation. These acquisitions have been accounted for as poolings-of-interests; however, due to the immaterial nature of the transactions, the Company's consolidated financial statements have not been restated for all periods prior to the transactions. The operating results of each company for periods prior to their respective acquisitions are not material to the Company's consolidated operating results. Note 4 - Long-Term Debt The Company continues to maintain its credit agreement with a major insurance company under which $4 million (the maximum amount available for borrowing) was outstanding at September 30, 1998, at an interest rate equal to the prime lending rate plus one percent (9.0% at September 30, 1998). In accordance with the amendment to the loan agreement dated August 1, 1998, the available amount will decrease by $1 million each October beginning in 2000. In November, 1994, the Company entered into a revolving credit facility with a national banking institution that provides for borrowings of up to $10 million. As of September 30, 1998, there were no outstanding borrowings against the line of credit. <PAGE 9> Note 5 - Contingencies The Company is not a party to any legal proceedings other than various claims and lawsuits arising in the normal course of business. Management of the Company does not believe that any such claims or lawsuits will have a material effect on the Company's financial condition or results of operations. Note 6 - Supplemental Disclosures of Cash Flow Information The Company's significant non-cash investing and financing activities are as follows: <TABLE> <CAPTION> <S> <C> <C> For the nine-month period ended Sept. 30, _________________________________________ (in thousands) 1998 1997 ____ ____ Unrealized (depreciation) appreciation of available- for-sale securities net of tax benefit of $2,030 for 1998 and tax effect of $(27) in 1997 $(3,248) $ 43 Long-term debt issued for purchased customer accounts 3,463 - Notes received on the sale of fixed assets and customer accounts 1,011 228 Common stock issued in acquisitions 12,128 144 Cash paid during the year for: Interest 745 464 Income taxes 9,992 8,314 </TABLE> Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Net Income. Net income for the third quarter of 1998 was $6,009,000, or $.45 per share, compared with net income in the third quarter of 1997 of $5,103,000, or $.39 per share, an 18% increase. Net income for the nine months ended September 30, 1998 was $16,968,000, or $1.27 per share, compared with 1997 same period net income of $14,308,000, or $1.10 per share, a 19% increase. Commissions and Fees. Commissions and fees for the third quarter of 1998 increased $6,948,000, or 22%, from the same period in 1997. This increase is primarily attributable to revenues from acquired agencies. Commissions and fees for the nine months ended September 30, 1998 were $111,928,000 compared to $94,440,000 for the same period in 1997, a 19% increase. The 1998 increase is due to approximately $15,372,000 of revenues from acquired agencies, with the remainder due to new business production. Investment Income. Investment income for the quarter and nine-month periods ended September 30, 1998 decreased $37,000 and $603,000, respectively, from the same periods in 1997, primarily due to a decrease in available cash to invest and a decrease in recorded gains in the sale of certain investments. <PAGE 10> Other Income. Other income for the third quarter ended September 30, 1998 decreased $159,000 over the same period in 1997, primarily due to reductions in gains from the sale of customer accounts and other assets. Other income for the nine-month period ended September 30, 1998 decreased $738,000 over the same period in 1997, due primarily to the disposition of the assets of the Company's Charlotte, North Carolina office, in the first quarter of 1998, which resulted in a loss of $518,000. Employee Compensation and Benefits Employee compensation and benefits increased 25% and 19%, respectively, during the three-month and nine-month periods ended September 30, 1998 over the same periods in 1997. These increases primarily relate to the addition of new employees as a result of acquisitions. Employee compensation and benefits as a percentage of total revenue increased to 52% in both the three- and nine-month periods ended September 30, 1998, compared to 50% in each of the same periods in 1997. Other Operating Expenses. Other operating expenses for the third quarter of 1998 increased $668,000, or 10%, over the same period in 1997, primarily due to acquisitions, but decreased as a percentage of total revenues from 20% to 18%. Other operating expenses increased $2,240,000 for the nine months ended September 30, 1998 versus the prior year, but decreased as a percentage of total revenues from 21% to 20%. Interest and Amortization. Interest and amortization increased $534,000, or 43%, and $33,000, or 1%, for the three-and nine-month periods ended September 30, 1998, respectively, over the same periods in 1997. The increase for the three-month period is primarily due to increased amortization from acquisitions. The change for the nine-month period is due to increased amortization from acquisitions, offset by the effect of a one-time write-off of the remaining intangible assets related to a terminated agreement in the second quarter of 1997. Liquidity and Capital Resources ________________________________ The Company's cash and cash equivalents of $32,339,000 at September 30, 1998 decreased by $15,387,000 from $47,726,000 at December 31, 1997. During the nine months ended September 30, 1998, $33,027,000 of cash was provided from operating activities. From both this amount and existing cash balances, $26,088,000 was used to acquire businesses, $8,835,000 was used for purchases of the Company's stock, $7,596,000 was used to repay long-term debt, $4,009,000 was used for payment of dividends, and $3,034,000 was used for additions to fixed assets. The current ratio at September 30, 1998 was 0.90 compared to 1.14 as of December 31, 1997. The Company has a revolving credit agreement with a major insurance company under which up to $4 million presently may be borrowed at an interest rate equal to the prime lending rate plus one percent. The amount of available credit will decrease by $1 million each year beginning in October 2000 in accordance with the August 1, 1998 amendment to the original loan agreement. As of September 30, 1998, the maximum amount of borrowings was outstanding. In November 1994, the Company entered into a revolving credit facility with a national banking institution that provides for available borrowings of up to $10 million. As of September 30, 1998, there were no borrowings against this line of credit. The Company believes that its existing cash, cash equivalents, short-term investments portfolio, funds generated from operations, and available credit facility borrowings are sufficient to satisfy its normal financial needs. Year 2000 Date Conversion __________________________ Year 2000 issues relate to system failures or errors resulting from computer programs and embedded computer chips which utilize dates with only two digits instead of four digits to represent a year. A data field with two digits representing a year may result in an error or failure due to the inability of a system to recognize "00" as the Year 2000. The Company is reviewing its computer systems for Year 2000 readiness and is implementing a plan to resolve existing issues. <PAGE 11> The Company has evaluated and identified the risks of failure of its information and financial systems which may be adversely affected by Year 2000 issues. This internal assessment is approximately 60% complete at present and the Company expects to finish the assessment process by the end of January 1999. To date, limited testing of systems has been performed. The Company may conduct further testing and/or an external evaluation following the conclusion of its internal assessment. To date, approximately $120,000 has been expended in systems upgrades directly relating to Year 2000 issues. Present estimates for further expenditures to address Year 2000 issues are between $300,000 and $750,000. Based on its assessments to date, the Company believes it will not experience any material disruption as a result of Year 2000 issues in processing information, interfacing with key vendors, or with processing orders and billing. However, the Year 2000 issue creates risk for the Company from unforeseen problems in its own computer systems and from third parties on which the Company relies. Accordingly, the Company is requesting assurances from software vendors from which it has purchased or from which it may purchase software that the software sold to the Company will continue to correctly process date information through the Year 2000 and beyond. In addition, the Company is querying its independent brokers and insurance carriers as to their progress in identifying and addressing problems that their computer systems may experience in correctly processing date information as the year 2000 approaches and thereafter. However, there are no assurances that the Company will identify all date-handling problems in its business systems or that the Company will be able to successfully remedy Year 2000 compliance issues that are discovered. To the extent that the Company is unable to resolve its Year 2000 issues prior to January 1, 2000, operating results could be adversely affected. In addition, the Company could be adversely affected if other entities (e.g., insurance carriers and independent agents through which the Company brokers business) not affiliated with the Company do not appropriately address their own Year 2000 compliance issues in advance of their occurrence. There is also risk that insureds may attempt to recover damages from the Company if their insurance policies procured with the assistance of the Company are believed by such insureds to cover Year 2000-related claims, but do not do so. The impact of these potential legal disputes cannot be reasonably estimated. At present, the Company has not developed contingency plans but intends to determine whether to develop any such plan early in 1999. There can be no assurance that Year 2000 issues will not have a material adverse effect on the Company's business, results of operation and financial condition. ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not Applicable. <PAGE 12> POE & BROWN, INC. PART II - OTHER INFORMATION ITEM 1 - LEGAL PROCEEDINGS The Company is involved in various pending or threatened proceedings by or against the Company or one or more of its subsidiaries which involve routine litigation relating to insurance risks placed by the Company and other contractual matters. The Company's management does not believe that any of such pending or threatened proceedings will have a material adverse effect on the Company's financial position or results of operations. ITEM 2 - CHANGE IN SECURITIES AND USE OF PROCEEDS Effective July 1, 1998 and August 4, 1998, the Company acquired all of the outstanding shares of Jerry F. Nichols & Associates, Inc. (Nichols) and Boulton Agency, Inc. (Boulton), respectively. In exchange for all of the outstanding stock of Nichols and Boulton, the Company issued 92,188 and 65,131 shares, respectively, of the Company's common stock to the former shareholders of those agencies. The Company's shares were offered and sold privately in both transactions and no underwriting was involved in either transaction. The Company issued the shares without registration under the Securities Act of 1993 (the "Act"). The Company relied upon the exemptions set forth in Section 4(2) of the Act and Rule 505 (in the case of the Boulton transaction) and Rule 506 (in the case of the Nichols transaction) of Regulation D, promulgated thereunder. In each transaction, the Company (i) made available to the purchasers the information required by Rule 502(b) of Regulation D, (ii) did not offer the shares by means of any advertisement, general solicitation or other means proscribed by Rule 502(c) of Regulation D, (iii) informed the purchasers of the limitations on resale of the shares and placed an appropriate restrictive legend on the share certificates, and (iv) filed a notice on Form D with the Securities and Exchange Commission within 15 days after the sale. In the Nichols transaction, the Company shares were offered privately by the issuer to fewer than 35 purchasers and the issuer reasonably believed that each purchaser (or representative of such purchaser) had such knowledge and experience in financial and business matters that he was capable of evaluating the merits and risks of the prospective investment. In the Boulton transaction, (i) the aggregate offering price of the Company shares offered to the purchasers, together with all other Company shares offered during the prior twelve months in reliance on an exemption under Rule 505, did not exceed $5 million, and (ii) the shares were offered privately to fewer than 35 purchasers. ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit 3a - Amended and Restated Articles of Incorporation (filed herewith) Exhibit 3b - Amended and Restated Bylaws (incorporated by reference to Exhibit 3b to Form 10-K for the year ended December 31, 1996) Exhibit 10c(2) - Extension to Loan Agreement, dated August 1, 1998, between the Registrant and Continental Casualty Company (filed herewith) Exhibit 10k - Employment Agreement, dated May 6, 1998, between the Registrant and Kenneth E. Hill (filed herewith) <PAGE 13> Exhibit 10l - Deferred Compensation Agreement, dated May 6, 1998, between Brown & Brown, Inc. and Kenneth E. Hill (filed herewith) Exhibit 10m - Letter Agreement, dated May 4, 1998, between the Registrant and Kenneth E. Hill (filed herewith) Exhibit 11 - Statement re: Computation of Basic and Diluted Earnings Per Share Exhibit 27 - Financial Data Schedule (for SEC use only) (b) There were no reports filed on Form 8-K during the quarter ended September 30, 1998. <PAGE 14> SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. POE & BROWN, INC. Date: November 13, 1998 /s/ WILLIAM A. ZIMMER ___________________________________ William A. Zimmer Chief Financial Officer and Treasurer (duly authorized officer, principal financial officer and principal accounting officer)