Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries BRP Group, Inc. Announces First Quarter 2023 Results By: BRP Group, Inc. via Business Wire May 09, 2023 at 16:05 PM EDT - First Quarter 2023 Revenue Grew 36% Year-Over-Year to $330.4 Million - - First Quarter 2023 Organic Revenue Growth(1) of 23% - BRP Group, Inc. (“BRP Group” or the “Company”) (NASDAQ: BRP), an independent insurance distribution firm delivering tailored insurance solutions to a wide range of personal and commercial Clients, today announced its results for the first quarter ended March 31, 2023. FIRST QUARTER 2023 HIGHLIGHTS Revenue increased 36% year-over-year to $330.4 million Organic Revenue Growth was 23% year-over-year GAAP net loss of $25.9 million and GAAP diluted loss per share of $0.24 Adjusted Net Income(2) of $49.2 million, or $0.42(2) per fully diluted share Adjusted EBITDA(3) grew 8% to $79.0 million Adjusted EBITDA Margin(3) of 24% “We had a fantastic start to 2023 as we delivered yet another quarter of outsized organic growth of 23%, including double-digit organic growth across all our segments, which represented our highest Q1 organic growth rate to date. This was on top of a strong year-over-year comp of 16%, showcasing the momentum of our differentiated business model and value proposition for Clients,” said Trevor Baldwin, Chief Executive Officer of BRP Group. “We also generated adjusted EBITDA in line with our expectations, and adjusted diluted EPS slightly better than our expectations. After three years of reinvestment into the business focused on technology, talent and building capabilities needed for the insurance brokerage of the future, investments and Colleague headcount growth have moderated to a more normal course level, leaving us well-positioned to generate outsized organic growth and sustainably increase profitability over the years to come.” LIQUIDITY AND CAPITAL RESOURCES As of March 31, 2023, cash and cash equivalents were $81.3 million and the Company had $115.0 million of borrowing capacity under its revolving credit facility. WEBCAST AND CONFERENCE CALL INFORMATION BRP Group will host a webcast and conference call to discuss first quarter 2023 results today at 5:00 PM ET. A live webcast and a slide presentation of the conference call will be available on BRP Group’s investor relations website at ir.baldwinriskpartners.com. The dial-in number for the conference call is (877) 451-6152 (toll-free) or (201) 389-0879 (international). Please dial the number 10 minutes prior to the scheduled start time. A webcast replay of the call will be available at ir.baldwinriskpartners.com for one year following the call. ABOUT BRP GROUP, INC. BRP Group (NASDAQ: BRP) is an independent insurance distribution firm delivering tailored insurance and risk management insights and solutions that give our Clients the peace of mind to pursue their purpose, passion and dreams. We are innovating the industry by taking a holistic and tailored approach to risk management, insurance and employee benefits, and support our Clients, Colleagues, Insurance Company Partners and communities through the deployment of vanguard resources and capital to drive our growth. BRP Group represents over 1.3 million Clients across the United States and internationally. For more information, please visit www.baldwinriskpartners.com. FOOTNOTES (1) Organic Revenue for the three months ended March 31, 2022 used to calculate Organic Revenue Growth for the three months ended March 31, 2023 was $242.8 million, which is adjusted to reflect revenues from Partnerships that have reached the twelve-month owned mark during the three months ended March 31, 2023. Organic Revenue and Organic Revenue Growth are non-GAAP measures. Reconciliation of Organic Revenue and Organic Revenue Growth to commissions and fees, the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release. (2) Adjusted Net Income and Adjusted Diluted EPS are non-GAAP measures. Reconciliation of Adjusted Net Income to net income (loss) attributable to BRP Group and reconciliation of Adjusted Diluted EPS to diluted earnings (loss) per share, the most directly comparable GAAP financial measures, is set forth in the reconciliation table accompanying this release. (3) Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures. Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin to net income (loss), the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release. NOTE REGARDING FORWARD-LOOKING STATEMENTS This press release may contain various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which represent BRP Group’s expectations or beliefs concerning future events. Forward-looking statements are statements other than historical facts and may include statements that address future operating, financial or business performance or BRP Group’s strategies or expectations. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” “outlook” or “continue,” or the negative of these terms or other comparable terminology. Forward-looking statements are based on management’s current expectations and beliefs and involve significant risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those contemplated by these statements. Factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements include, but are not limited to, those described under the caption “Risk Factors” in BRP Group’s Annual Report on Form 10-K for the year ended December 31, 2022, and in BRP Group’s other filings with the SEC, which are available free of charge on the SEC's website at: www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated. All forward-looking statements and all subsequent written and oral forward-looking statements attributable to BRP Group or to persons acting on behalf of BRP Group are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and BRP Group does not undertake any obligation to update them in light of new information, future developments or otherwise, except as may be required under applicable law. BRP GROUP, INC. Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) For the Three Months Ended March 31, (in thousands, except share and per share data) 2023 2022 Revenues: Commissions and fees $ 330,446 $ 242,848 Operating expenses: Commissions, employee compensation and benefits 230,954 153,750 Other operating expenses 46,604 36,442 Amortization expense 23,163 17,562 Change in fair value of contingent consideration 24,758 (5,632 ) Depreciation expense 1,348 988 Total operating expenses 326,827 203,110 Operating income 3,619 39,738 Other income (expense): Interest expense, net (27,884 ) (10,350 ) Other income (expense), net (1,511 ) 15,451 Total other income (expense) (29,395 ) 5,101 Income (loss) before income taxes (25,776 ) 44,839 Income tax expense 78 — Net income (loss) (25,854 ) 44,839 Less: net income (loss) attributable to noncontrolling interests (11,722 ) 21,970 Net income (loss) attributable to BRP Group $ (14,132 ) $ 22,869 Comprehensive income (loss) $ (25,854 ) $ 44,839 Comprehensive income (loss) attributable to noncontrolling interests (11,722 ) 21,970 Comprehensive income (loss) attributable to BRP Group (14,132 ) 22,869 Basic earnings (loss) per share $ (0.24 ) $ 0.41 Diluted earnings (loss) per share $ (0.24 ) $ 0.39 Weighted-average shares of Class A common stock outstanding - basic 58,711,798 55,719,803 Weighted-average shares of Class A common stock outstanding - diluted 58,711,798 58,715,825 BRP GROUP, INC. Condensed Consolidated Balance Sheets (Unaudited) (in thousands, except share and per share data) March 31, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 81,299 $ 118,090 Restricted cash 105,520 112,381 Premiums, commissions and fees receivable, net 580,343 531,992 Prepaid expenses and other current assets 13,199 9,823 Due from related parties 114 113 Total current assets 780,475 772,399 Property and equipment, net 25,470 25,405 Right-of-use assets 95,316 96,465 Other assets 43,878 45,935 Intangible assets, net 1,081,074 1,099,918 Goodwill 1,422,060 1,422,060 Total assets $ 3,448,273 $ 3,462,182 Liabilities, Mezzanine Equity and Stockholders’ Equity Current liabilities: Premiums payable to insurance companies $ 481,131 $ 471,294 Producer commissions payable 62,954 53,927 Accrued expenses and other current liabilities 108,641 125,743 Related party notes payable 1,525 1,525 Current portion of contingent earnout liabilities 118,569 46,717 Total current liabilities 772,820 699,206 Revolving line of credit 485,000 505,000 Long-term debt, less current portion 808,765 809,862 Contingent earnout liabilities, less current portion 167,588 220,219 Operating lease liabilities, less current portion 86,739 87,692 Other liabilities 250 164 Total liabilities 2,321,162 2,322,143 Commitments and contingencies Mezzanine equity: Redeemable noncontrolling interest 538 487 Stockholders’ equity: Class A common stock, par value $0.01 per share, 300,000,000 shares authorized; 62,558,290 and 61,447,368 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively 626 614 Class B common stock, par value $0.0001 per share, 100,000,000 shares authorized; 53,670,277 and 54,504,918 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively 5 5 Additional paid-in capital 716,645 704,291 Accumulated deficit (110,896 ) (96,764 ) Stockholder notes receivable (21 ) (42 ) Total stockholders’ equity attributable to BRP Group, Inc. 606,359 608,104 Noncontrolling interest 520,214 531,448 Total stockholders’ equity 1,126,573 1,139,552 Total liabilities, mezzanine equity and stockholders’ equity $ 3,448,273 $ 3,462,182 BRP GROUP, INC. Condensed Consolidated Statements of Cash Flows (Unaudited) For the Three Months Ended March 31, (in thousands) 2023 2022 Cash flows from operating activities: Net income (loss) $ (25,854 ) $ 44,839 Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 24,511 18,550 Change in fair value of contingent consideration 24,758 (5,632 ) Share-based compensation expense 13,281 7,564 (Gain) loss on interest rate caps 1,407 (15,810 ) Payment of contingent earnout consideration in excess of purchase price accrual (857 ) (11,117 ) Amortization of deferred financing costs 1,239 1,286 Other loss 100 — Changes in operating assets and liabilities: Premiums, commissions and fees receivable, net (48,351 ) (35,359 ) Prepaid expenses and other current assets (4,859 ) (8,908 ) Due to/from related parties (1 ) (89 ) Right-of-use assets 1,149 (1,368 ) Accounts payable, accrued expenses and other current liabilities (163 ) 627 Operating lease liabilities (468 ) 1,984 Other liabilities 77 — Net cash used in operating activities (14,031 ) (3,433 ) Cash flows from investing activities: Capital expenditures (3,499 ) (1,793 ) Cash consideration paid for asset acquisitions (1,500 ) (700 ) Investment in business ventures (100 ) (639 ) Net cash used in investing activities (5,099 ) (3,132 ) Cash flows from financing activities: Payment of contingent earnout consideration up to amount of purchase price accrual (4,680 ) (13,993 ) Proceeds from revolving line of credit 50,000 40,000 Payments on revolving line of credit (70,000 ) — Payments on long-term debt (2,127 ) (2,127 ) Payments of debt issuance costs — (1,188 ) Proceeds from settlements of interest rate caps 2,275 — Tax distributions to BRP LLC members (11 ) — Proceeds from repayment of stockholder notes receivable 21 44 Net cash provided by (used in) financing activities (24,522 ) 22,736 Net increase (decrease) in cash and cash equivalents and restricted cash (43,652 ) 16,171 Cash and cash equivalents and restricted cash at beginning of period 230,471 227,737 Cash and cash equivalents and restricted cash at end of period $ 186,819 $ 243,908 NON-GAAP FINANCIAL MEASURES Adjusted EBITDA, Adjusted EBITDA Margin, Organic Revenue, Organic Revenue Growth, Adjusted Net Income, Adjusted Diluted Earnings Per Share (“EPS”) and adjusted net cash provided by operating activities (“free cash flow”) are not measures of financial performance under GAAP and should not be considered substitutes for GAAP measures, including commissions and fees (for Organic Revenue and Organic Revenue Growth), net income (loss) (for Adjusted EBITDA and Adjusted EBITDA Margin), net income (loss) attributable to BRP Group (for Adjusted Net Income), diluted earnings (loss) per share (for Adjusted Diluted EPS) or net cash provided by (used in) operating activities (for free cash flow), which we consider to be the most directly comparable GAAP measures. These non-GAAP financial measures have limitations as analytical tools, and when assessing our operating performance, you should not consider these non-GAAP financial measures in isolation or as substitutes for commissions and fees, net income (loss), net income (loss) attributable to BRP Group, diluted earnings (loss) per share, net cash provided by (used in) operating activities or other consolidated income statement data prepared in accordance with GAAP. Other companies in our industry may define or calculate these non-GAAP financial measures differently than we do, and accordingly, these measures may not be comparable to similarly titled measures used by other companies. We define Adjusted EBITDA as net income (loss) before interest, taxes, depreciation, amortization, change in fair value of contingent consideration and certain items of income and expense, including share-based compensation expense, transaction-related Partnership and integration expenses, severance, and certain non-recurring items, including those related to raising capital. We believe that Adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of income and expenses that do not relate to business performance, and that the presentation of this measure enhances an investor’s understanding of our financial performance. Adjusted EBITDA Margin is Adjusted EBITDA divided by commissions and fees. Adjusted EBITDA Margin is a key metric used by management and our board of directors to assess our financial performance. We believe that Adjusted EBITDA Margin is an appropriate measure of operating performance because it eliminates the impact of income and expenses that do not relate to business performance, and that the presentation of this measure enhances an investor’s understanding of our financial performance. We believe that Adjusted EBITDA Margin is helpful in measuring profitability of operations on a consolidated level. Adjusted EBITDA and Adjusted EBITDA Margin have important limitations as analytical tools. For example, Adjusted EBITDA and Adjusted EBITDA Margin: do not reflect any cash capital expenditure requirements for the assets being depreciated and amortized that may have to be replaced in the future; do not reflect changes in, or cash requirements for, our working capital needs; do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; do not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our debt; do not reflect share-based compensation expense and other non-cash charges; and exclude certain tax payments that may represent a reduction in cash available to us. We calculate Organic Revenue based on commissions and fees for the relevant period by excluding investment income and the first twelve months of commissions and fees generated from new Partners. Organic Revenue Growth is the change in Organic Revenue period-to-period, with prior period results adjusted to include commissions and fees that were excluded in the prior period because the relevant Partners had not yet reached the twelve-month owned mark, but which have reached the twelve-month owned mark in the current period. For example, revenues from a Partner acquired on June 1, 2022 are excluded from Organic Revenue for 2022. However, after June 1, 2023, results from June 1, 2022 to December 31, 2022 for such Partners are compared to results from June 1, 2023 to December 31, 2023 for purposes of calculating Organic Revenue Growth in 2023. Organic Revenue Growth is a key metric used by management and our board of directors to assess our financial performance. We believe that Organic Revenue and Organic Revenue Growth are appropriate measures of operating performance as they allow investors to measure, analyze and compare growth in a meaningful and consistent manner. We define Adjusted Net Income as net income (loss) attributable to BRP Group adjusted for depreciation, amortization, change in fair value of contingent consideration and certain items of income and expense, including share-based compensation expense, transaction-related Partnership and integration expenses, severance, and certain non-recurring costs that, in the opinion of management, significantly affect the period-over-period assessment of operating results, and the related tax effect of those adjustments. We believe that Adjusted Net Income is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. Adjusted Diluted EPS measures our per share earnings excluding certain expenses as discussed above and assuming all shares of Class B common stock were exchanged for Class A common stock. Adjusted Diluted EPS is calculated as Adjusted Net Income divided by adjusted dilutive weighted-average shares outstanding. We believe Adjusted Diluted EPS is useful to investors because it enables them to better evaluate per share operating performance across reporting periods. We calculate free cash flow because we hold fiduciary cash designated for our Insurance Company Partners on behalf of our Clients and incur substantial earnout liabilities in conjunction with our Partnership strategy. Free cash flow is calculated as net cash provided by (used in) operating activities excluding the impact of: (i) the change in premiums, commissions and fees receivable, net; (ii) the change in accounts payable, accrued expenses and other current liabilities; and (iii) the payment of contingent earnout consideration in excess of purchase price accrual. We believe that free cash flow is an important financial measure for use in evaluating financial performance because it measures our ability to generate additional cash from our business operations. Reconciliation of guidance regarding Adjusted EBITDA Margin, Organic Revenue Growth and Adjusted Diluted EPS to the most directly comparable GAAP measures is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity, and low visibility with respect to commissions and fees, net income (loss), diluted earnings (loss) per share or other consolidated income statement data prepared in accordance with GAAP. The Company is currently unable to predict with a reasonable degree of certainty the type and extent of items that would be expected to impact these GAAP financial measures for these periods. The unavailable information could have a significant impact on the non-GAAP measures. Adjusted EBITDA and Adjusted EBITDA Margin The following table reconciles Adjusted EBITDA and Adjusted EBITDA Margin to net income (loss), which we consider to be the most directly comparable GAAP financial measure: For the Three Months Ended March 31, (in thousands, except percentages) 2023 2022 Commissions and fees $ 330,446 $ 242,848 Net income (loss) $ (25,854 ) $ 44,839 Adjustments to net income (loss): Interest expense, net 27,884 10,350 Change in fair value of contingent consideration 24,758 (5,632 ) Amortization expense 23,163 17,562 Share-based compensation 13,281 7,564 Transaction-related Partnership and integration expenses 5,432 8,216 (Gain) loss on interest rate caps 1,407 (15,810 ) Depreciation expense 1,348 988 Severance 167 222 Income tax provision 78 — Other(1) 7,342 4,633 Adjusted EBITDA $ 79,006 $ 72,932 Adjusted EBITDA Margin 24 % 30 % _______________________ (1) Other addbacks to Adjusted EBITDA include certain expenses that are considered to be non-recurring or non-operational, including certain recruiting costs, professional fees, litigation costs and bonuses. In 2022, these addbacks also included certain expenses related to remediation efforts. Organic Revenue and Organic Revenue Growth The following table reconciles Organic Revenue and Organic Revenue Growth to commissions and fees, which we consider to be the most directly comparable GAAP financial measure: For the Three Months Ended March 31, (in thousands, except percentages) 2023 2022 Commissions and fees $ 330,446 $ 242,848 Partnership commissions and fees(1) (30,871 ) (64,777 ) Investment income (923 ) — Organic Revenue $ 298,652 $ 178,071 Organic Revenue Growth(2) $ 55,804 $ 25,181 Organic Revenue Growth %(2) 23 % 16 % ________________ (1) Includes the first twelve months of such commissions and fees generated from newly acquired Partners. (2) Organic Revenue for the three months ended March 31, 2022 used to calculate Organic Revenue Growth for the three months ended March 31, 2023 was $242.8 million, which is adjusted to reflect revenues from Partnerships that have reached the twelve-month owned mark during the three months ended March 31, 2023. Adjusted Net Income and Adjusted Diluted EPS The following table reconciles Adjusted Net Income to net income (loss) attributable to BRP Group and reconciles Adjusted Diluted EPS to diluted earnings (loss) per share, which we consider to be the most directly comparable GAAP financial measures: For the Three Months Ended March 31, (in thousands, except per share data) 2023 2022 Net income (loss) attributable to BRP Group $ (14,132 ) $ 22,869 Net income (loss) attributable to noncontrolling interests (11,722 ) 21,970 Change in fair value of contingent consideration 24,758 (5,632 ) Amortization expense 23,163 17,562 Share-based compensation 13,281 7,564 Transaction-related Partnership and integration expenses 5,432 8,216 (Gain) loss on interest rate caps, net of cash settlements 3,682 (15,810 ) Depreciation 1,348 988 Amortization of deferred financing costs 1,239 1,286 Severance 167 222 Other(1) 7,342 4,633 Adjusted pre-tax income 54,558 63,868 Adjusted income taxes(2) 5,401 6,323 Adjusted Net Income $ 49,157 $ 57,545 Weighted-average shares of Class A common stock outstanding - diluted 58,712 58,716 Dilutive effect of non-vested restricted shares of Class A common stock 3,603 — Exchange of Class B common stock(3) 54,094 56,269 Adjusted dilutive weighted-average shares outstanding 116,409 114,985 Adjusted Diluted EPS $ 0.42 $ 0.50 Diluted earnings (loss) per share $ (0.24 ) $ 0.39 Effect of exchange of Class B common stock and net income (loss) attributable to noncontrolling interests per share 0.02 — Other adjustments to earnings (loss) per share 0.69 0.16 Adjusted income taxes per share (0.05 ) (0.05 ) Adjusted Diluted EPS $ 0.42 $ 0.50 _______________ (1) Other addbacks to Adjusted Net Income include certain expenses that are considered to be non-recurring or non-operational, including certain recruiting costs, professional fees, litigation costs and bonuses. In 2022, these addbacks also included certain expenses related to remediation efforts. (2) Represents corporate income taxes at an assumed effective tax rate of 9.9% applied to adjusted pre-tax income. (3) Assumes the full exchange of Class B common stock for Class A common stock pursuant to the Amended LLC Agreement. Adjusted Net Cash Provided by Operating Activities (“Free Cash Flow”) The following table reconciles free cash flow to net cash used in operating activities, which we consider to be the most directly comparable GAAP financial measure: For the Three Months Ended March 31, (in thousands) 2023 2022 Net cash used in operating activities $ (14,031 ) $ (3,433 ) Adjustments to net cash used in operating activities: Change in premiums, commissions and fees receivable 48,351 35,359 Payment of contingent earnout in excess of purchase price accrual 857 11,117 Change in accounts payable, accrued expenses and other current liabilities 163 (627 ) Free cash flow $ 35,340 $ 42,416 COMMONLY USED DEFINED TERMS The following terms have the following meanings throughout this press release unless the context indicates or requires otherwise: Amended LLC Agreement Third Amended and Restated Limited Liability Company Agreement of Baldwin Risk Partners, LLC, as amended Clients Our insureds Colleagues Our employees GAAP Accounting principles generally accepted in the United States of America Insurance Company Partners Insurance companies with which we have a contractual relationship Partners Companies that we have acquired, or in the case of asset acquisitions, the producers Partnerships Strategic acquisitions made by the Company SEC U.S. Securities and Exchange Commission View source version on businesswire.com: https://www.businesswire.com/news/home/20230509006074/en/Contacts INVESTOR RELATIONS Bonnie Bishop, Executive Director Baldwin Risk Partners (813) 259-8032 | IR@baldwinriskpartners.com PRESS Anna R. Rozenich, Senior Director - Enterprise Communications Baldwin Risk Partners (630) 561-5907 | anna.rozenich@baldwinriskpartners.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
BRP Group, Inc. Announces First Quarter 2023 Results By: BRP Group, Inc. via Business Wire May 09, 2023 at 16:05 PM EDT - First Quarter 2023 Revenue Grew 36% Year-Over-Year to $330.4 Million - - First Quarter 2023 Organic Revenue Growth(1) of 23% - BRP Group, Inc. (“BRP Group” or the “Company”) (NASDAQ: BRP), an independent insurance distribution firm delivering tailored insurance solutions to a wide range of personal and commercial Clients, today announced its results for the first quarter ended March 31, 2023. FIRST QUARTER 2023 HIGHLIGHTS Revenue increased 36% year-over-year to $330.4 million Organic Revenue Growth was 23% year-over-year GAAP net loss of $25.9 million and GAAP diluted loss per share of $0.24 Adjusted Net Income(2) of $49.2 million, or $0.42(2) per fully diluted share Adjusted EBITDA(3) grew 8% to $79.0 million Adjusted EBITDA Margin(3) of 24% “We had a fantastic start to 2023 as we delivered yet another quarter of outsized organic growth of 23%, including double-digit organic growth across all our segments, which represented our highest Q1 organic growth rate to date. This was on top of a strong year-over-year comp of 16%, showcasing the momentum of our differentiated business model and value proposition for Clients,” said Trevor Baldwin, Chief Executive Officer of BRP Group. “We also generated adjusted EBITDA in line with our expectations, and adjusted diluted EPS slightly better than our expectations. After three years of reinvestment into the business focused on technology, talent and building capabilities needed for the insurance brokerage of the future, investments and Colleague headcount growth have moderated to a more normal course level, leaving us well-positioned to generate outsized organic growth and sustainably increase profitability over the years to come.” LIQUIDITY AND CAPITAL RESOURCES As of March 31, 2023, cash and cash equivalents were $81.3 million and the Company had $115.0 million of borrowing capacity under its revolving credit facility. WEBCAST AND CONFERENCE CALL INFORMATION BRP Group will host a webcast and conference call to discuss first quarter 2023 results today at 5:00 PM ET. A live webcast and a slide presentation of the conference call will be available on BRP Group’s investor relations website at ir.baldwinriskpartners.com. The dial-in number for the conference call is (877) 451-6152 (toll-free) or (201) 389-0879 (international). Please dial the number 10 minutes prior to the scheduled start time. A webcast replay of the call will be available at ir.baldwinriskpartners.com for one year following the call. ABOUT BRP GROUP, INC. BRP Group (NASDAQ: BRP) is an independent insurance distribution firm delivering tailored insurance and risk management insights and solutions that give our Clients the peace of mind to pursue their purpose, passion and dreams. We are innovating the industry by taking a holistic and tailored approach to risk management, insurance and employee benefits, and support our Clients, Colleagues, Insurance Company Partners and communities through the deployment of vanguard resources and capital to drive our growth. BRP Group represents over 1.3 million Clients across the United States and internationally. For more information, please visit www.baldwinriskpartners.com. FOOTNOTES (1) Organic Revenue for the three months ended March 31, 2022 used to calculate Organic Revenue Growth for the three months ended March 31, 2023 was $242.8 million, which is adjusted to reflect revenues from Partnerships that have reached the twelve-month owned mark during the three months ended March 31, 2023. Organic Revenue and Organic Revenue Growth are non-GAAP measures. Reconciliation of Organic Revenue and Organic Revenue Growth to commissions and fees, the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release. (2) Adjusted Net Income and Adjusted Diluted EPS are non-GAAP measures. Reconciliation of Adjusted Net Income to net income (loss) attributable to BRP Group and reconciliation of Adjusted Diluted EPS to diluted earnings (loss) per share, the most directly comparable GAAP financial measures, is set forth in the reconciliation table accompanying this release. (3) Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures. Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin to net income (loss), the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release. NOTE REGARDING FORWARD-LOOKING STATEMENTS This press release may contain various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which represent BRP Group’s expectations or beliefs concerning future events. Forward-looking statements are statements other than historical facts and may include statements that address future operating, financial or business performance or BRP Group’s strategies or expectations. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” “outlook” or “continue,” or the negative of these terms or other comparable terminology. Forward-looking statements are based on management’s current expectations and beliefs and involve significant risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those contemplated by these statements. Factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements include, but are not limited to, those described under the caption “Risk Factors” in BRP Group’s Annual Report on Form 10-K for the year ended December 31, 2022, and in BRP Group’s other filings with the SEC, which are available free of charge on the SEC's website at: www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated. All forward-looking statements and all subsequent written and oral forward-looking statements attributable to BRP Group or to persons acting on behalf of BRP Group are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and BRP Group does not undertake any obligation to update them in light of new information, future developments or otherwise, except as may be required under applicable law. BRP GROUP, INC. Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) For the Three Months Ended March 31, (in thousands, except share and per share data) 2023 2022 Revenues: Commissions and fees $ 330,446 $ 242,848 Operating expenses: Commissions, employee compensation and benefits 230,954 153,750 Other operating expenses 46,604 36,442 Amortization expense 23,163 17,562 Change in fair value of contingent consideration 24,758 (5,632 ) Depreciation expense 1,348 988 Total operating expenses 326,827 203,110 Operating income 3,619 39,738 Other income (expense): Interest expense, net (27,884 ) (10,350 ) Other income (expense), net (1,511 ) 15,451 Total other income (expense) (29,395 ) 5,101 Income (loss) before income taxes (25,776 ) 44,839 Income tax expense 78 — Net income (loss) (25,854 ) 44,839 Less: net income (loss) attributable to noncontrolling interests (11,722 ) 21,970 Net income (loss) attributable to BRP Group $ (14,132 ) $ 22,869 Comprehensive income (loss) $ (25,854 ) $ 44,839 Comprehensive income (loss) attributable to noncontrolling interests (11,722 ) 21,970 Comprehensive income (loss) attributable to BRP Group (14,132 ) 22,869 Basic earnings (loss) per share $ (0.24 ) $ 0.41 Diluted earnings (loss) per share $ (0.24 ) $ 0.39 Weighted-average shares of Class A common stock outstanding - basic 58,711,798 55,719,803 Weighted-average shares of Class A common stock outstanding - diluted 58,711,798 58,715,825 BRP GROUP, INC. Condensed Consolidated Balance Sheets (Unaudited) (in thousands, except share and per share data) March 31, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 81,299 $ 118,090 Restricted cash 105,520 112,381 Premiums, commissions and fees receivable, net 580,343 531,992 Prepaid expenses and other current assets 13,199 9,823 Due from related parties 114 113 Total current assets 780,475 772,399 Property and equipment, net 25,470 25,405 Right-of-use assets 95,316 96,465 Other assets 43,878 45,935 Intangible assets, net 1,081,074 1,099,918 Goodwill 1,422,060 1,422,060 Total assets $ 3,448,273 $ 3,462,182 Liabilities, Mezzanine Equity and Stockholders’ Equity Current liabilities: Premiums payable to insurance companies $ 481,131 $ 471,294 Producer commissions payable 62,954 53,927 Accrued expenses and other current liabilities 108,641 125,743 Related party notes payable 1,525 1,525 Current portion of contingent earnout liabilities 118,569 46,717 Total current liabilities 772,820 699,206 Revolving line of credit 485,000 505,000 Long-term debt, less current portion 808,765 809,862 Contingent earnout liabilities, less current portion 167,588 220,219 Operating lease liabilities, less current portion 86,739 87,692 Other liabilities 250 164 Total liabilities 2,321,162 2,322,143 Commitments and contingencies Mezzanine equity: Redeemable noncontrolling interest 538 487 Stockholders’ equity: Class A common stock, par value $0.01 per share, 300,000,000 shares authorized; 62,558,290 and 61,447,368 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively 626 614 Class B common stock, par value $0.0001 per share, 100,000,000 shares authorized; 53,670,277 and 54,504,918 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively 5 5 Additional paid-in capital 716,645 704,291 Accumulated deficit (110,896 ) (96,764 ) Stockholder notes receivable (21 ) (42 ) Total stockholders’ equity attributable to BRP Group, Inc. 606,359 608,104 Noncontrolling interest 520,214 531,448 Total stockholders’ equity 1,126,573 1,139,552 Total liabilities, mezzanine equity and stockholders’ equity $ 3,448,273 $ 3,462,182 BRP GROUP, INC. Condensed Consolidated Statements of Cash Flows (Unaudited) For the Three Months Ended March 31, (in thousands) 2023 2022 Cash flows from operating activities: Net income (loss) $ (25,854 ) $ 44,839 Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 24,511 18,550 Change in fair value of contingent consideration 24,758 (5,632 ) Share-based compensation expense 13,281 7,564 (Gain) loss on interest rate caps 1,407 (15,810 ) Payment of contingent earnout consideration in excess of purchase price accrual (857 ) (11,117 ) Amortization of deferred financing costs 1,239 1,286 Other loss 100 — Changes in operating assets and liabilities: Premiums, commissions and fees receivable, net (48,351 ) (35,359 ) Prepaid expenses and other current assets (4,859 ) (8,908 ) Due to/from related parties (1 ) (89 ) Right-of-use assets 1,149 (1,368 ) Accounts payable, accrued expenses and other current liabilities (163 ) 627 Operating lease liabilities (468 ) 1,984 Other liabilities 77 — Net cash used in operating activities (14,031 ) (3,433 ) Cash flows from investing activities: Capital expenditures (3,499 ) (1,793 ) Cash consideration paid for asset acquisitions (1,500 ) (700 ) Investment in business ventures (100 ) (639 ) Net cash used in investing activities (5,099 ) (3,132 ) Cash flows from financing activities: Payment of contingent earnout consideration up to amount of purchase price accrual (4,680 ) (13,993 ) Proceeds from revolving line of credit 50,000 40,000 Payments on revolving line of credit (70,000 ) — Payments on long-term debt (2,127 ) (2,127 ) Payments of debt issuance costs — (1,188 ) Proceeds from settlements of interest rate caps 2,275 — Tax distributions to BRP LLC members (11 ) — Proceeds from repayment of stockholder notes receivable 21 44 Net cash provided by (used in) financing activities (24,522 ) 22,736 Net increase (decrease) in cash and cash equivalents and restricted cash (43,652 ) 16,171 Cash and cash equivalents and restricted cash at beginning of period 230,471 227,737 Cash and cash equivalents and restricted cash at end of period $ 186,819 $ 243,908 NON-GAAP FINANCIAL MEASURES Adjusted EBITDA, Adjusted EBITDA Margin, Organic Revenue, Organic Revenue Growth, Adjusted Net Income, Adjusted Diluted Earnings Per Share (“EPS”) and adjusted net cash provided by operating activities (“free cash flow”) are not measures of financial performance under GAAP and should not be considered substitutes for GAAP measures, including commissions and fees (for Organic Revenue and Organic Revenue Growth), net income (loss) (for Adjusted EBITDA and Adjusted EBITDA Margin), net income (loss) attributable to BRP Group (for Adjusted Net Income), diluted earnings (loss) per share (for Adjusted Diluted EPS) or net cash provided by (used in) operating activities (for free cash flow), which we consider to be the most directly comparable GAAP measures. These non-GAAP financial measures have limitations as analytical tools, and when assessing our operating performance, you should not consider these non-GAAP financial measures in isolation or as substitutes for commissions and fees, net income (loss), net income (loss) attributable to BRP Group, diluted earnings (loss) per share, net cash provided by (used in) operating activities or other consolidated income statement data prepared in accordance with GAAP. Other companies in our industry may define or calculate these non-GAAP financial measures differently than we do, and accordingly, these measures may not be comparable to similarly titled measures used by other companies. We define Adjusted EBITDA as net income (loss) before interest, taxes, depreciation, amortization, change in fair value of contingent consideration and certain items of income and expense, including share-based compensation expense, transaction-related Partnership and integration expenses, severance, and certain non-recurring items, including those related to raising capital. We believe that Adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of income and expenses that do not relate to business performance, and that the presentation of this measure enhances an investor’s understanding of our financial performance. Adjusted EBITDA Margin is Adjusted EBITDA divided by commissions and fees. Adjusted EBITDA Margin is a key metric used by management and our board of directors to assess our financial performance. We believe that Adjusted EBITDA Margin is an appropriate measure of operating performance because it eliminates the impact of income and expenses that do not relate to business performance, and that the presentation of this measure enhances an investor’s understanding of our financial performance. We believe that Adjusted EBITDA Margin is helpful in measuring profitability of operations on a consolidated level. Adjusted EBITDA and Adjusted EBITDA Margin have important limitations as analytical tools. For example, Adjusted EBITDA and Adjusted EBITDA Margin: do not reflect any cash capital expenditure requirements for the assets being depreciated and amortized that may have to be replaced in the future; do not reflect changes in, or cash requirements for, our working capital needs; do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; do not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our debt; do not reflect share-based compensation expense and other non-cash charges; and exclude certain tax payments that may represent a reduction in cash available to us. We calculate Organic Revenue based on commissions and fees for the relevant period by excluding investment income and the first twelve months of commissions and fees generated from new Partners. Organic Revenue Growth is the change in Organic Revenue period-to-period, with prior period results adjusted to include commissions and fees that were excluded in the prior period because the relevant Partners had not yet reached the twelve-month owned mark, but which have reached the twelve-month owned mark in the current period. For example, revenues from a Partner acquired on June 1, 2022 are excluded from Organic Revenue for 2022. However, after June 1, 2023, results from June 1, 2022 to December 31, 2022 for such Partners are compared to results from June 1, 2023 to December 31, 2023 for purposes of calculating Organic Revenue Growth in 2023. Organic Revenue Growth is a key metric used by management and our board of directors to assess our financial performance. We believe that Organic Revenue and Organic Revenue Growth are appropriate measures of operating performance as they allow investors to measure, analyze and compare growth in a meaningful and consistent manner. We define Adjusted Net Income as net income (loss) attributable to BRP Group adjusted for depreciation, amortization, change in fair value of contingent consideration and certain items of income and expense, including share-based compensation expense, transaction-related Partnership and integration expenses, severance, and certain non-recurring costs that, in the opinion of management, significantly affect the period-over-period assessment of operating results, and the related tax effect of those adjustments. We believe that Adjusted Net Income is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. Adjusted Diluted EPS measures our per share earnings excluding certain expenses as discussed above and assuming all shares of Class B common stock were exchanged for Class A common stock. Adjusted Diluted EPS is calculated as Adjusted Net Income divided by adjusted dilutive weighted-average shares outstanding. We believe Adjusted Diluted EPS is useful to investors because it enables them to better evaluate per share operating performance across reporting periods. We calculate free cash flow because we hold fiduciary cash designated for our Insurance Company Partners on behalf of our Clients and incur substantial earnout liabilities in conjunction with our Partnership strategy. Free cash flow is calculated as net cash provided by (used in) operating activities excluding the impact of: (i) the change in premiums, commissions and fees receivable, net; (ii) the change in accounts payable, accrued expenses and other current liabilities; and (iii) the payment of contingent earnout consideration in excess of purchase price accrual. We believe that free cash flow is an important financial measure for use in evaluating financial performance because it measures our ability to generate additional cash from our business operations. Reconciliation of guidance regarding Adjusted EBITDA Margin, Organic Revenue Growth and Adjusted Diluted EPS to the most directly comparable GAAP measures is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity, and low visibility with respect to commissions and fees, net income (loss), diluted earnings (loss) per share or other consolidated income statement data prepared in accordance with GAAP. The Company is currently unable to predict with a reasonable degree of certainty the type and extent of items that would be expected to impact these GAAP financial measures for these periods. The unavailable information could have a significant impact on the non-GAAP measures. Adjusted EBITDA and Adjusted EBITDA Margin The following table reconciles Adjusted EBITDA and Adjusted EBITDA Margin to net income (loss), which we consider to be the most directly comparable GAAP financial measure: For the Three Months Ended March 31, (in thousands, except percentages) 2023 2022 Commissions and fees $ 330,446 $ 242,848 Net income (loss) $ (25,854 ) $ 44,839 Adjustments to net income (loss): Interest expense, net 27,884 10,350 Change in fair value of contingent consideration 24,758 (5,632 ) Amortization expense 23,163 17,562 Share-based compensation 13,281 7,564 Transaction-related Partnership and integration expenses 5,432 8,216 (Gain) loss on interest rate caps 1,407 (15,810 ) Depreciation expense 1,348 988 Severance 167 222 Income tax provision 78 — Other(1) 7,342 4,633 Adjusted EBITDA $ 79,006 $ 72,932 Adjusted EBITDA Margin 24 % 30 % _______________________ (1) Other addbacks to Adjusted EBITDA include certain expenses that are considered to be non-recurring or non-operational, including certain recruiting costs, professional fees, litigation costs and bonuses. In 2022, these addbacks also included certain expenses related to remediation efforts. Organic Revenue and Organic Revenue Growth The following table reconciles Organic Revenue and Organic Revenue Growth to commissions and fees, which we consider to be the most directly comparable GAAP financial measure: For the Three Months Ended March 31, (in thousands, except percentages) 2023 2022 Commissions and fees $ 330,446 $ 242,848 Partnership commissions and fees(1) (30,871 ) (64,777 ) Investment income (923 ) — Organic Revenue $ 298,652 $ 178,071 Organic Revenue Growth(2) $ 55,804 $ 25,181 Organic Revenue Growth %(2) 23 % 16 % ________________ (1) Includes the first twelve months of such commissions and fees generated from newly acquired Partners. (2) Organic Revenue for the three months ended March 31, 2022 used to calculate Organic Revenue Growth for the three months ended March 31, 2023 was $242.8 million, which is adjusted to reflect revenues from Partnerships that have reached the twelve-month owned mark during the three months ended March 31, 2023. Adjusted Net Income and Adjusted Diluted EPS The following table reconciles Adjusted Net Income to net income (loss) attributable to BRP Group and reconciles Adjusted Diluted EPS to diluted earnings (loss) per share, which we consider to be the most directly comparable GAAP financial measures: For the Three Months Ended March 31, (in thousands, except per share data) 2023 2022 Net income (loss) attributable to BRP Group $ (14,132 ) $ 22,869 Net income (loss) attributable to noncontrolling interests (11,722 ) 21,970 Change in fair value of contingent consideration 24,758 (5,632 ) Amortization expense 23,163 17,562 Share-based compensation 13,281 7,564 Transaction-related Partnership and integration expenses 5,432 8,216 (Gain) loss on interest rate caps, net of cash settlements 3,682 (15,810 ) Depreciation 1,348 988 Amortization of deferred financing costs 1,239 1,286 Severance 167 222 Other(1) 7,342 4,633 Adjusted pre-tax income 54,558 63,868 Adjusted income taxes(2) 5,401 6,323 Adjusted Net Income $ 49,157 $ 57,545 Weighted-average shares of Class A common stock outstanding - diluted 58,712 58,716 Dilutive effect of non-vested restricted shares of Class A common stock 3,603 — Exchange of Class B common stock(3) 54,094 56,269 Adjusted dilutive weighted-average shares outstanding 116,409 114,985 Adjusted Diluted EPS $ 0.42 $ 0.50 Diluted earnings (loss) per share $ (0.24 ) $ 0.39 Effect of exchange of Class B common stock and net income (loss) attributable to noncontrolling interests per share 0.02 — Other adjustments to earnings (loss) per share 0.69 0.16 Adjusted income taxes per share (0.05 ) (0.05 ) Adjusted Diluted EPS $ 0.42 $ 0.50 _______________ (1) Other addbacks to Adjusted Net Income include certain expenses that are considered to be non-recurring or non-operational, including certain recruiting costs, professional fees, litigation costs and bonuses. In 2022, these addbacks also included certain expenses related to remediation efforts. (2) Represents corporate income taxes at an assumed effective tax rate of 9.9% applied to adjusted pre-tax income. (3) Assumes the full exchange of Class B common stock for Class A common stock pursuant to the Amended LLC Agreement. Adjusted Net Cash Provided by Operating Activities (“Free Cash Flow”) The following table reconciles free cash flow to net cash used in operating activities, which we consider to be the most directly comparable GAAP financial measure: For the Three Months Ended March 31, (in thousands) 2023 2022 Net cash used in operating activities $ (14,031 ) $ (3,433 ) Adjustments to net cash used in operating activities: Change in premiums, commissions and fees receivable 48,351 35,359 Payment of contingent earnout in excess of purchase price accrual 857 11,117 Change in accounts payable, accrued expenses and other current liabilities 163 (627 ) Free cash flow $ 35,340 $ 42,416 COMMONLY USED DEFINED TERMS The following terms have the following meanings throughout this press release unless the context indicates or requires otherwise: Amended LLC Agreement Third Amended and Restated Limited Liability Company Agreement of Baldwin Risk Partners, LLC, as amended Clients Our insureds Colleagues Our employees GAAP Accounting principles generally accepted in the United States of America Insurance Company Partners Insurance companies with which we have a contractual relationship Partners Companies that we have acquired, or in the case of asset acquisitions, the producers Partnerships Strategic acquisitions made by the Company SEC U.S. Securities and Exchange Commission View source version on businesswire.com: https://www.businesswire.com/news/home/20230509006074/en/Contacts INVESTOR RELATIONS Bonnie Bishop, Executive Director Baldwin Risk Partners (813) 259-8032 | IR@baldwinriskpartners.com PRESS Anna R. Rozenich, Senior Director - Enterprise Communications Baldwin Risk Partners (630) 561-5907 | anna.rozenich@baldwinriskpartners.com
- First Quarter 2023 Revenue Grew 36% Year-Over-Year to $330.4 Million - - First Quarter 2023 Organic Revenue Growth(1) of 23% -
BRP Group, Inc. (“BRP Group” or the “Company”) (NASDAQ: BRP), an independent insurance distribution firm delivering tailored insurance solutions to a wide range of personal and commercial Clients, today announced its results for the first quarter ended March 31, 2023. FIRST QUARTER 2023 HIGHLIGHTS Revenue increased 36% year-over-year to $330.4 million Organic Revenue Growth was 23% year-over-year GAAP net loss of $25.9 million and GAAP diluted loss per share of $0.24 Adjusted Net Income(2) of $49.2 million, or $0.42(2) per fully diluted share Adjusted EBITDA(3) grew 8% to $79.0 million Adjusted EBITDA Margin(3) of 24% “We had a fantastic start to 2023 as we delivered yet another quarter of outsized organic growth of 23%, including double-digit organic growth across all our segments, which represented our highest Q1 organic growth rate to date. This was on top of a strong year-over-year comp of 16%, showcasing the momentum of our differentiated business model and value proposition for Clients,” said Trevor Baldwin, Chief Executive Officer of BRP Group. “We also generated adjusted EBITDA in line with our expectations, and adjusted diluted EPS slightly better than our expectations. After three years of reinvestment into the business focused on technology, talent and building capabilities needed for the insurance brokerage of the future, investments and Colleague headcount growth have moderated to a more normal course level, leaving us well-positioned to generate outsized organic growth and sustainably increase profitability over the years to come.” LIQUIDITY AND CAPITAL RESOURCES As of March 31, 2023, cash and cash equivalents were $81.3 million and the Company had $115.0 million of borrowing capacity under its revolving credit facility. WEBCAST AND CONFERENCE CALL INFORMATION BRP Group will host a webcast and conference call to discuss first quarter 2023 results today at 5:00 PM ET. A live webcast and a slide presentation of the conference call will be available on BRP Group’s investor relations website at ir.baldwinriskpartners.com. The dial-in number for the conference call is (877) 451-6152 (toll-free) or (201) 389-0879 (international). Please dial the number 10 minutes prior to the scheduled start time. A webcast replay of the call will be available at ir.baldwinriskpartners.com for one year following the call. ABOUT BRP GROUP, INC. BRP Group (NASDAQ: BRP) is an independent insurance distribution firm delivering tailored insurance and risk management insights and solutions that give our Clients the peace of mind to pursue their purpose, passion and dreams. We are innovating the industry by taking a holistic and tailored approach to risk management, insurance and employee benefits, and support our Clients, Colleagues, Insurance Company Partners and communities through the deployment of vanguard resources and capital to drive our growth. BRP Group represents over 1.3 million Clients across the United States and internationally. For more information, please visit www.baldwinriskpartners.com. FOOTNOTES (1) Organic Revenue for the three months ended March 31, 2022 used to calculate Organic Revenue Growth for the three months ended March 31, 2023 was $242.8 million, which is adjusted to reflect revenues from Partnerships that have reached the twelve-month owned mark during the three months ended March 31, 2023. Organic Revenue and Organic Revenue Growth are non-GAAP measures. Reconciliation of Organic Revenue and Organic Revenue Growth to commissions and fees, the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release. (2) Adjusted Net Income and Adjusted Diluted EPS are non-GAAP measures. Reconciliation of Adjusted Net Income to net income (loss) attributable to BRP Group and reconciliation of Adjusted Diluted EPS to diluted earnings (loss) per share, the most directly comparable GAAP financial measures, is set forth in the reconciliation table accompanying this release. (3) Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures. Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin to net income (loss), the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release. NOTE REGARDING FORWARD-LOOKING STATEMENTS This press release may contain various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which represent BRP Group’s expectations or beliefs concerning future events. Forward-looking statements are statements other than historical facts and may include statements that address future operating, financial or business performance or BRP Group’s strategies or expectations. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” “outlook” or “continue,” or the negative of these terms or other comparable terminology. Forward-looking statements are based on management’s current expectations and beliefs and involve significant risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those contemplated by these statements. Factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements include, but are not limited to, those described under the caption “Risk Factors” in BRP Group’s Annual Report on Form 10-K for the year ended December 31, 2022, and in BRP Group’s other filings with the SEC, which are available free of charge on the SEC's website at: www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated. All forward-looking statements and all subsequent written and oral forward-looking statements attributable to BRP Group or to persons acting on behalf of BRP Group are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and BRP Group does not undertake any obligation to update them in light of new information, future developments or otherwise, except as may be required under applicable law. BRP GROUP, INC. Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) For the Three Months Ended March 31, (in thousands, except share and per share data) 2023 2022 Revenues: Commissions and fees $ 330,446 $ 242,848 Operating expenses: Commissions, employee compensation and benefits 230,954 153,750 Other operating expenses 46,604 36,442 Amortization expense 23,163 17,562 Change in fair value of contingent consideration 24,758 (5,632 ) Depreciation expense 1,348 988 Total operating expenses 326,827 203,110 Operating income 3,619 39,738 Other income (expense): Interest expense, net (27,884 ) (10,350 ) Other income (expense), net (1,511 ) 15,451 Total other income (expense) (29,395 ) 5,101 Income (loss) before income taxes (25,776 ) 44,839 Income tax expense 78 — Net income (loss) (25,854 ) 44,839 Less: net income (loss) attributable to noncontrolling interests (11,722 ) 21,970 Net income (loss) attributable to BRP Group $ (14,132 ) $ 22,869 Comprehensive income (loss) $ (25,854 ) $ 44,839 Comprehensive income (loss) attributable to noncontrolling interests (11,722 ) 21,970 Comprehensive income (loss) attributable to BRP Group (14,132 ) 22,869 Basic earnings (loss) per share $ (0.24 ) $ 0.41 Diluted earnings (loss) per share $ (0.24 ) $ 0.39 Weighted-average shares of Class A common stock outstanding - basic 58,711,798 55,719,803 Weighted-average shares of Class A common stock outstanding - diluted 58,711,798 58,715,825 BRP GROUP, INC. Condensed Consolidated Balance Sheets (Unaudited) (in thousands, except share and per share data) March 31, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 81,299 $ 118,090 Restricted cash 105,520 112,381 Premiums, commissions and fees receivable, net 580,343 531,992 Prepaid expenses and other current assets 13,199 9,823 Due from related parties 114 113 Total current assets 780,475 772,399 Property and equipment, net 25,470 25,405 Right-of-use assets 95,316 96,465 Other assets 43,878 45,935 Intangible assets, net 1,081,074 1,099,918 Goodwill 1,422,060 1,422,060 Total assets $ 3,448,273 $ 3,462,182 Liabilities, Mezzanine Equity and Stockholders’ Equity Current liabilities: Premiums payable to insurance companies $ 481,131 $ 471,294 Producer commissions payable 62,954 53,927 Accrued expenses and other current liabilities 108,641 125,743 Related party notes payable 1,525 1,525 Current portion of contingent earnout liabilities 118,569 46,717 Total current liabilities 772,820 699,206 Revolving line of credit 485,000 505,000 Long-term debt, less current portion 808,765 809,862 Contingent earnout liabilities, less current portion 167,588 220,219 Operating lease liabilities, less current portion 86,739 87,692 Other liabilities 250 164 Total liabilities 2,321,162 2,322,143 Commitments and contingencies Mezzanine equity: Redeemable noncontrolling interest 538 487 Stockholders’ equity: Class A common stock, par value $0.01 per share, 300,000,000 shares authorized; 62,558,290 and 61,447,368 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively 626 614 Class B common stock, par value $0.0001 per share, 100,000,000 shares authorized; 53,670,277 and 54,504,918 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively 5 5 Additional paid-in capital 716,645 704,291 Accumulated deficit (110,896 ) (96,764 ) Stockholder notes receivable (21 ) (42 ) Total stockholders’ equity attributable to BRP Group, Inc. 606,359 608,104 Noncontrolling interest 520,214 531,448 Total stockholders’ equity 1,126,573 1,139,552 Total liabilities, mezzanine equity and stockholders’ equity $ 3,448,273 $ 3,462,182 BRP GROUP, INC. Condensed Consolidated Statements of Cash Flows (Unaudited) For the Three Months Ended March 31, (in thousands) 2023 2022 Cash flows from operating activities: Net income (loss) $ (25,854 ) $ 44,839 Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 24,511 18,550 Change in fair value of contingent consideration 24,758 (5,632 ) Share-based compensation expense 13,281 7,564 (Gain) loss on interest rate caps 1,407 (15,810 ) Payment of contingent earnout consideration in excess of purchase price accrual (857 ) (11,117 ) Amortization of deferred financing costs 1,239 1,286 Other loss 100 — Changes in operating assets and liabilities: Premiums, commissions and fees receivable, net (48,351 ) (35,359 ) Prepaid expenses and other current assets (4,859 ) (8,908 ) Due to/from related parties (1 ) (89 ) Right-of-use assets 1,149 (1,368 ) Accounts payable, accrued expenses and other current liabilities (163 ) 627 Operating lease liabilities (468 ) 1,984 Other liabilities 77 — Net cash used in operating activities (14,031 ) (3,433 ) Cash flows from investing activities: Capital expenditures (3,499 ) (1,793 ) Cash consideration paid for asset acquisitions (1,500 ) (700 ) Investment in business ventures (100 ) (639 ) Net cash used in investing activities (5,099 ) (3,132 ) Cash flows from financing activities: Payment of contingent earnout consideration up to amount of purchase price accrual (4,680 ) (13,993 ) Proceeds from revolving line of credit 50,000 40,000 Payments on revolving line of credit (70,000 ) — Payments on long-term debt (2,127 ) (2,127 ) Payments of debt issuance costs — (1,188 ) Proceeds from settlements of interest rate caps 2,275 — Tax distributions to BRP LLC members (11 ) — Proceeds from repayment of stockholder notes receivable 21 44 Net cash provided by (used in) financing activities (24,522 ) 22,736 Net increase (decrease) in cash and cash equivalents and restricted cash (43,652 ) 16,171 Cash and cash equivalents and restricted cash at beginning of period 230,471 227,737 Cash and cash equivalents and restricted cash at end of period $ 186,819 $ 243,908 NON-GAAP FINANCIAL MEASURES Adjusted EBITDA, Adjusted EBITDA Margin, Organic Revenue, Organic Revenue Growth, Adjusted Net Income, Adjusted Diluted Earnings Per Share (“EPS”) and adjusted net cash provided by operating activities (“free cash flow”) are not measures of financial performance under GAAP and should not be considered substitutes for GAAP measures, including commissions and fees (for Organic Revenue and Organic Revenue Growth), net income (loss) (for Adjusted EBITDA and Adjusted EBITDA Margin), net income (loss) attributable to BRP Group (for Adjusted Net Income), diluted earnings (loss) per share (for Adjusted Diluted EPS) or net cash provided by (used in) operating activities (for free cash flow), which we consider to be the most directly comparable GAAP measures. These non-GAAP financial measures have limitations as analytical tools, and when assessing our operating performance, you should not consider these non-GAAP financial measures in isolation or as substitutes for commissions and fees, net income (loss), net income (loss) attributable to BRP Group, diluted earnings (loss) per share, net cash provided by (used in) operating activities or other consolidated income statement data prepared in accordance with GAAP. Other companies in our industry may define or calculate these non-GAAP financial measures differently than we do, and accordingly, these measures may not be comparable to similarly titled measures used by other companies. We define Adjusted EBITDA as net income (loss) before interest, taxes, depreciation, amortization, change in fair value of contingent consideration and certain items of income and expense, including share-based compensation expense, transaction-related Partnership and integration expenses, severance, and certain non-recurring items, including those related to raising capital. We believe that Adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of income and expenses that do not relate to business performance, and that the presentation of this measure enhances an investor’s understanding of our financial performance. Adjusted EBITDA Margin is Adjusted EBITDA divided by commissions and fees. Adjusted EBITDA Margin is a key metric used by management and our board of directors to assess our financial performance. We believe that Adjusted EBITDA Margin is an appropriate measure of operating performance because it eliminates the impact of income and expenses that do not relate to business performance, and that the presentation of this measure enhances an investor’s understanding of our financial performance. We believe that Adjusted EBITDA Margin is helpful in measuring profitability of operations on a consolidated level. Adjusted EBITDA and Adjusted EBITDA Margin have important limitations as analytical tools. For example, Adjusted EBITDA and Adjusted EBITDA Margin: do not reflect any cash capital expenditure requirements for the assets being depreciated and amortized that may have to be replaced in the future; do not reflect changes in, or cash requirements for, our working capital needs; do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; do not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our debt; do not reflect share-based compensation expense and other non-cash charges; and exclude certain tax payments that may represent a reduction in cash available to us. We calculate Organic Revenue based on commissions and fees for the relevant period by excluding investment income and the first twelve months of commissions and fees generated from new Partners. Organic Revenue Growth is the change in Organic Revenue period-to-period, with prior period results adjusted to include commissions and fees that were excluded in the prior period because the relevant Partners had not yet reached the twelve-month owned mark, but which have reached the twelve-month owned mark in the current period. For example, revenues from a Partner acquired on June 1, 2022 are excluded from Organic Revenue for 2022. However, after June 1, 2023, results from June 1, 2022 to December 31, 2022 for such Partners are compared to results from June 1, 2023 to December 31, 2023 for purposes of calculating Organic Revenue Growth in 2023. Organic Revenue Growth is a key metric used by management and our board of directors to assess our financial performance. We believe that Organic Revenue and Organic Revenue Growth are appropriate measures of operating performance as they allow investors to measure, analyze and compare growth in a meaningful and consistent manner. We define Adjusted Net Income as net income (loss) attributable to BRP Group adjusted for depreciation, amortization, change in fair value of contingent consideration and certain items of income and expense, including share-based compensation expense, transaction-related Partnership and integration expenses, severance, and certain non-recurring costs that, in the opinion of management, significantly affect the period-over-period assessment of operating results, and the related tax effect of those adjustments. We believe that Adjusted Net Income is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. Adjusted Diluted EPS measures our per share earnings excluding certain expenses as discussed above and assuming all shares of Class B common stock were exchanged for Class A common stock. Adjusted Diluted EPS is calculated as Adjusted Net Income divided by adjusted dilutive weighted-average shares outstanding. We believe Adjusted Diluted EPS is useful to investors because it enables them to better evaluate per share operating performance across reporting periods. We calculate free cash flow because we hold fiduciary cash designated for our Insurance Company Partners on behalf of our Clients and incur substantial earnout liabilities in conjunction with our Partnership strategy. Free cash flow is calculated as net cash provided by (used in) operating activities excluding the impact of: (i) the change in premiums, commissions and fees receivable, net; (ii) the change in accounts payable, accrued expenses and other current liabilities; and (iii) the payment of contingent earnout consideration in excess of purchase price accrual. We believe that free cash flow is an important financial measure for use in evaluating financial performance because it measures our ability to generate additional cash from our business operations. Reconciliation of guidance regarding Adjusted EBITDA Margin, Organic Revenue Growth and Adjusted Diluted EPS to the most directly comparable GAAP measures is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity, and low visibility with respect to commissions and fees, net income (loss), diluted earnings (loss) per share or other consolidated income statement data prepared in accordance with GAAP. The Company is currently unable to predict with a reasonable degree of certainty the type and extent of items that would be expected to impact these GAAP financial measures for these periods. The unavailable information could have a significant impact on the non-GAAP measures. Adjusted EBITDA and Adjusted EBITDA Margin The following table reconciles Adjusted EBITDA and Adjusted EBITDA Margin to net income (loss), which we consider to be the most directly comparable GAAP financial measure: For the Three Months Ended March 31, (in thousands, except percentages) 2023 2022 Commissions and fees $ 330,446 $ 242,848 Net income (loss) $ (25,854 ) $ 44,839 Adjustments to net income (loss): Interest expense, net 27,884 10,350 Change in fair value of contingent consideration 24,758 (5,632 ) Amortization expense 23,163 17,562 Share-based compensation 13,281 7,564 Transaction-related Partnership and integration expenses 5,432 8,216 (Gain) loss on interest rate caps 1,407 (15,810 ) Depreciation expense 1,348 988 Severance 167 222 Income tax provision 78 — Other(1) 7,342 4,633 Adjusted EBITDA $ 79,006 $ 72,932 Adjusted EBITDA Margin 24 % 30 % _______________________ (1) Other addbacks to Adjusted EBITDA include certain expenses that are considered to be non-recurring or non-operational, including certain recruiting costs, professional fees, litigation costs and bonuses. In 2022, these addbacks also included certain expenses related to remediation efforts. Organic Revenue and Organic Revenue Growth The following table reconciles Organic Revenue and Organic Revenue Growth to commissions and fees, which we consider to be the most directly comparable GAAP financial measure: For the Three Months Ended March 31, (in thousands, except percentages) 2023 2022 Commissions and fees $ 330,446 $ 242,848 Partnership commissions and fees(1) (30,871 ) (64,777 ) Investment income (923 ) — Organic Revenue $ 298,652 $ 178,071 Organic Revenue Growth(2) $ 55,804 $ 25,181 Organic Revenue Growth %(2) 23 % 16 % ________________ (1) Includes the first twelve months of such commissions and fees generated from newly acquired Partners. (2) Organic Revenue for the three months ended March 31, 2022 used to calculate Organic Revenue Growth for the three months ended March 31, 2023 was $242.8 million, which is adjusted to reflect revenues from Partnerships that have reached the twelve-month owned mark during the three months ended March 31, 2023. Adjusted Net Income and Adjusted Diluted EPS The following table reconciles Adjusted Net Income to net income (loss) attributable to BRP Group and reconciles Adjusted Diluted EPS to diluted earnings (loss) per share, which we consider to be the most directly comparable GAAP financial measures: For the Three Months Ended March 31, (in thousands, except per share data) 2023 2022 Net income (loss) attributable to BRP Group $ (14,132 ) $ 22,869 Net income (loss) attributable to noncontrolling interests (11,722 ) 21,970 Change in fair value of contingent consideration 24,758 (5,632 ) Amortization expense 23,163 17,562 Share-based compensation 13,281 7,564 Transaction-related Partnership and integration expenses 5,432 8,216 (Gain) loss on interest rate caps, net of cash settlements 3,682 (15,810 ) Depreciation 1,348 988 Amortization of deferred financing costs 1,239 1,286 Severance 167 222 Other(1) 7,342 4,633 Adjusted pre-tax income 54,558 63,868 Adjusted income taxes(2) 5,401 6,323 Adjusted Net Income $ 49,157 $ 57,545 Weighted-average shares of Class A common stock outstanding - diluted 58,712 58,716 Dilutive effect of non-vested restricted shares of Class A common stock 3,603 — Exchange of Class B common stock(3) 54,094 56,269 Adjusted dilutive weighted-average shares outstanding 116,409 114,985 Adjusted Diluted EPS $ 0.42 $ 0.50 Diluted earnings (loss) per share $ (0.24 ) $ 0.39 Effect of exchange of Class B common stock and net income (loss) attributable to noncontrolling interests per share 0.02 — Other adjustments to earnings (loss) per share 0.69 0.16 Adjusted income taxes per share (0.05 ) (0.05 ) Adjusted Diluted EPS $ 0.42 $ 0.50 _______________ (1) Other addbacks to Adjusted Net Income include certain expenses that are considered to be non-recurring or non-operational, including certain recruiting costs, professional fees, litigation costs and bonuses. In 2022, these addbacks also included certain expenses related to remediation efforts. (2) Represents corporate income taxes at an assumed effective tax rate of 9.9% applied to adjusted pre-tax income. (3) Assumes the full exchange of Class B common stock for Class A common stock pursuant to the Amended LLC Agreement. Adjusted Net Cash Provided by Operating Activities (“Free Cash Flow”) The following table reconciles free cash flow to net cash used in operating activities, which we consider to be the most directly comparable GAAP financial measure: For the Three Months Ended March 31, (in thousands) 2023 2022 Net cash used in operating activities $ (14,031 ) $ (3,433 ) Adjustments to net cash used in operating activities: Change in premiums, commissions and fees receivable 48,351 35,359 Payment of contingent earnout in excess of purchase price accrual 857 11,117 Change in accounts payable, accrued expenses and other current liabilities 163 (627 ) Free cash flow $ 35,340 $ 42,416 COMMONLY USED DEFINED TERMS The following terms have the following meanings throughout this press release unless the context indicates or requires otherwise: Amended LLC Agreement Third Amended and Restated Limited Liability Company Agreement of Baldwin Risk Partners, LLC, as amended Clients Our insureds Colleagues Our employees GAAP Accounting principles generally accepted in the United States of America Insurance Company Partners Insurance companies with which we have a contractual relationship Partners Companies that we have acquired, or in the case of asset acquisitions, the producers Partnerships Strategic acquisitions made by the Company SEC U.S. Securities and Exchange Commission View source version on businesswire.com: https://www.businesswire.com/news/home/20230509006074/en/
INVESTOR RELATIONS Bonnie Bishop, Executive Director Baldwin Risk Partners (813) 259-8032 | IR@baldwinriskpartners.com PRESS Anna R. Rozenich, Senior Director - Enterprise Communications Baldwin Risk Partners (630) 561-5907 | anna.rozenich@baldwinriskpartners.com