- Fourth Quarter 2021 Revenue Grew 129%
Year-Over-Year to $159.2 Million -
- Full Year 2021 Revenue Grew 135%
Year-Over-Year to $567.3 Million -
- Fourth Quarter 2021 Organic Revenue Growth(2)
of 18% -
- Full Year 2021 Organic Revenue Growth(2) of
22% -
- Full Year 2021 “MGA of the Future” Revenue
Growth of 47% -
- Full Year 2021 Total Revenue from
Partnerships(6) of $206.2 million -
BRP Group, Inc. (“BRP Group” or the “Company”) (NASDAQ: BRP), an
independent insurance distribution firm, announced its results for
the quarter and full year ended December 31, 2021.
FOURTH QUARTER 2021 HIGHLIGHTS
- Revenue increased 129% year-over-year to $159.2 million
- Pro Forma Revenue(1) grew 80% year-over-year to $170.0
million
- Organic Revenue Growth(2) was 18% year-over-year
- “MGA of the Future” revenue grew organically 36% year-over-year
to $22.4 million
- GAAP net loss of $44.4 million and GAAP loss per share of
$0.41
- Adjusted Net Income(3) grew 118% to $11.7 million, or $0.10(3)
per fully diluted share
- Adjusted EBITDA(4) grew 91% to $20.2 million
- Adjusted EBITDA Margin(4) of 13%
- Pro Forma Adjusted EBITDA(5) of $28.1 million and Pro Forma
Adjusted EBITDA Margin(5) of 17%
- “MGA of the Future” policies in force grew by 30,439 to 692,385
at December 31, 2021. Comparatively, in the fourth quarter 2020,
policies in force grew sequentially by 24,069
- Closed six Partner acquisitions during the fourth quarter 2021
that generated total revenue(6) of approximately $133.7 million for
the 12-month period pre-acquisition
“We had an excellent close to an outstanding year for BRP Group,
as we more than doubled our quarterly revenue year-over-year to
$159.2 million, driven by our recent Partnerships, our ‘MGA of the
Future’ platform and another quarter of strong organic growth, as
highlighted by double-digit organic growth across all four
operating groups in the fourth quarter,” said Trevor Baldwin, Chief
Executive Officer of BRP Group. “Along with our rapid top-line
growth, we were very active in completing six new Partnerships
(including three Top 100 U.S. brokers) while maintaining a robust
pipeline of additional opportunities. We are thrilled with our
performance in 2021, having firmly established BRP Group as the
premier destination for our industry's top talent and independent
brokers, remaining well-positioned to continue delivering
sustainable growth and creating stakeholder value in 2022 and
beyond.”
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2021, cash and cash equivalents were $138.3
million and there was $846.6 million of long-term debt principal
amount outstanding. The Company had outstanding borrowing capacity
of $440.0 million under its revolving credit facility.
FULL YEAR 2021 HIGHLIGHTS
- Revenue increased 135% year-over-year to $567.3 million
- Pro Forma Revenue(1) grew 69% year-over-year to $719.3
million
- Organic Revenue Growth(2) was 22% year-over-year
- “MGA of the Future” revenue grew organically 47% to $85.5
million
- GAAP net loss of $58.1 million and GAAP loss per share of
$0.64
- Adjusted Net Income(3) grew 141% to $80.6 million, or $0.80(3)
per fully diluted share
- Adjusted EBITDA(4) grew 157% to $112.9 million
- Adjusted EBITDA Margin(4) of 20%
- Pro Forma Adjusted EBITDA(5) of $175.0 million and Pro Forma
Adjusted EBITDA Margin(5) of 24%
- Closed 16 Partner acquisitions during 2021 that generated total
revenue(6) of approximately $206.2 million for the 12-month period
pre-acquisition
WEBCAST AND CONFERENCE CALL INFORMATION
BRP Group will host a webcast and conference call to discuss
fourth quarter 2021 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, Inc. (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 900,000 clients across the
United States and internationally. For more information, please
visit www.baldwinriskpartners.com.
FOOTNOTES
(1)
Pro Forma Revenue is a non-GAAP measure.
Reconciliation of Pro Forma Revenue to commissions and fees, the
most directly comparable GAAP financial measure, is set forth in
the reconciliation table accompanying this release.
(2)
Pro Forma Revenue is a non-GAAP measure.
Reconciliation of Pro Forma Revenue to commissions and fees, the
most directly comparable GAAP financial measure, is set forth in
the reconciliation table accompanying this release.
(3)
Adjusted Net Income and Adjusted Diluted
EPS are non-GAAP measures. Reconciliation of Adjusted Net Income to
net loss attributable to BRP Group,. and reconciliation of Adjusted
Diluted EPS to diluted loss per share, the most directly comparable
GAAP financial measures, are set forth in the reconciliation table
accompanying this release.
(4)
Adjusted EBITDA and Adjusted EBITDA Margin
are non-GAAP measures. Reconciliation of Adjusted EBITDA and
Adjusted EBITDA Margin to net loss, the most directly comparable
GAAP financial measure, is set forth in the reconciliation table
accompanying this release.
(5)
Pro Forma Adjusted EBITDA and Pro Forma
Adjusted EBITDA Margin are non-GAAP measures. Reconciliation of Pro
Forma Adjusted EBITDA and Pro Forma Adjusted EBITDA to net loss,
the most directly comparable GAAP financial measure, is set forth
in the reconciliation table accompanying this release.
(6)
Represents the aggregate revenues of
Partners acquired during the relevant period presented, for the
most recent trailing 12-month period prior to acquisition by the
Company, in each case, at the time the due diligence was concluded
based on a quality of earnings review and not an audit.
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, 2021, and in BRP Group’s other
filings with the SEC, which are available free of charge on the
Securities and Exchange Commission'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.
Consolidated Statements of
Comprehensive Loss
For the Three Months Ended
December 31,
For the Years Ended December
31,
(in thousands, except share and per
share data)
2021
2020
2021
2020
Revenues:
Commissions and fees
$
159,200
$
69,649
$
567,290
$
240,919
Operating expenses:
Commissions, employee compensation and
benefits
121,529
51,834
400,050
174,114
Other operating expenses
37,782
17,483
102,162
48,060
Amortization expense
14,845
5,807
48,720
19,038
Change in fair value of contingent
consideration
22,033
7,819
45,196
20,516
Depreciation expense
868
466
2,788
1,129
Total operating expenses
197,057
83,409
598,916
262,857
Operating loss
(37,857
)
(13,760
)
(31,626
)
(21,938
)
Other income (expense):
Interest expense, net
(8,468
)
(5,303
)
(26,899
)
(7,857
)
Other income (expense), net
1,959
(72
)
424
(95
)
Total other expense
(6,509
)
(5,375
)
(26,475
)
(7,952
)
Loss before income taxes
(44,366
)
(19,135
)
(58,101
)
(29,890
)
Income tax expense (benefit)
19
(17
)
19
(5
)
Net loss
(44,385
)
(19,118
)
(58,120
)
(29,885
)
Less: net loss attributable to
noncontrolling interests
(21,738
)
(8,810
)
(27,474
)
(14,189
)
Net loss attributable to BRP Group,
Inc.
$
(22,647
)
$
(10,308
)
$
(30,646
)
$
(15,696
)
Comprehensive loss
$
(44,385
)
$
(19,118
)
$
(58,120
)
$
(29,885
)
Comprehensive loss attributable to
noncontrolling interests
(21,738
)
(8,810
)
(27,474
)
(14,189
)
Comprehensive loss attributable to BRP
Group, Inc.
(22,647
)
(10,308
)
(30,646
)
(15,696
)
Basic and diluted net loss per share
$
(0.41
)
$
(0.29
)
$
(0.64
)
$
(0.58
)
Basic and diluted weighted-average shares
of Class A common stock outstanding
54,874,756
35,527,936
47,587,866
27,175,705
BRP GROUP, INC.
Consolidated Balance
Sheets
December 31,
(in thousands, except share and per
share data)
2021
2020
Assets
Current assets:
Cash and cash equivalents
$
138,292
$
108,462
Restricted cash
89,445
33,560
Premiums, commissions and fees receivable,
net
340,837
155,501
Prepaid expenses and other current
assets
8,151
4,447
Due from related parties
1,668
19
Total current assets
578,393
301,989
Property and equipment, net
17,474
11,019
Right-of-use assets
81,646
—
Other assets
25,586
11,084
Intangible assets, net
944,467
554,320
Goodwill
1,228,741
651,502
Total assets
$
2,876,307
$
1,529,914
Liabilities, Mezzanine Equity
and Stockholders’ Equity
Current liabilities:
Premiums payable to insurance
companies
$
310,045
$
135,576
Producer commissions payable
41,833
24,260
Accrued expenses and other current
liabilities
92,223
51,490
Related party notes payable
61,500
—
Current portion of contingent earnout
liabilities
35,088
6,094
Total current liabilities
540,689
217,420
Revolving line of credit
35,000
—
Long-term debt, less current portion
814,614
381,382
Contingent earnout liabilities, less
current portion
223,501
158,725
Operating lease liabilities, less current
portion
71,357
—
Other liabilities
3,590
2,419
Total liabilities
1,688,751
759,946
Commitments and contingencies
Mezzanine equity:
Redeemable noncontrolling interest
269
98
Stockholders’ equity:
Class A common stock, par value $0.01 per
share, 300,000,000 shares authorized; 58,602,859 and 44,953,166
shares issued and outstanding at December 31, 2021 and 2020,
respectively
586
450
Class B common stock, par value $0.0001
per share, 100,000,000 shares authorized; 56,338,051 and 49,828,383
shares issued and outstanding at December 31, 2021 and 2020,
respectively
6
5
Additional paid-in capital
663,002
392,139
Accumulated deficit
(54,992
)
(24,346
)
Stockholder notes receivable
(219
)
(465
)
Total stockholders’ equity attributable to
BRP Group, Inc.
608,383
367,783
Noncontrolling interest
578,904
402,087
Total stockholders’ equity
1,187,287
769,870
Total liabilities, mezzanine equity and
stockholders’ equity
$
2,876,307
$
1,529,914
BRP GROUP, INC.
Consolidated Statements of
Cash Flows
For the Years Ended December
31,
(in thousands)
2021
2020
Cash flows from operating activities:
Net loss
$
(58,120
)
$
(29,885
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
51,508
20,167
Change in fair value of contingent
consideration
45,196
20,516
Share-based compensation expense
19,193
7,744
Amortization of deferred financing
costs
3,506
1,002
Payment of contingent earnout
consideration in excess of purchase price accrual
(4,825
)
(1,727
)
Other fair value adjustments
311
67
Change in fair value of interest rate
caps
123
—
Changes in operating assets and
liabilities, net of effect of acquisitions:
Premiums, commissions and fees receivable,
net
(64,501
)
(6,828
)
Prepaid expenses and other assets
(8,032
)
(1,611
)
Due to/from related parties
(1,649
)
24
Right-of-use assets
(81,646
)
—
Accounts payable, accrued expenses and
other current liabilities
55,188
27,348
Operating lease liabilities
83,877
—
Net cash provided by operating
activities
40,129
36,817
Cash flows from investing activities:
Cash consideration paid for business
combinations, net of cash received
(668,033
)
(669,236
)
Capital expenditures
(5,321
)
(5,469
)
Investment in business venture
(1,907
)
(1,250
)
Cash consideration paid for asset
acquisitions, net of cash received
(3,212
)
(1,854
)
Net cash used in investing activities
(678,473
)
(677,809
)
Cash flows from financing activities:
Proceeds from issuance of Class A common
stock, net of underwriting discounts
269,375
451,574
Purchase of LLC Units from
shareholders
—
(78,274
)
Payment of offering costs
(1,054
)
(1,868
)
Payment of contingent and guaranteed
earnout consideration
(7,723
)
(1,192
)
Proceeds from revolving line of credit
420,210
385,637
Repayments of revolving line of credit
(385,210
)
(325,000
)
Proceeds from long-term debt
441,430
286,331
Repayments of long-term debt
(5,630
)
(1,000
)
Payments of debt issuance and debt
extinguishment costs
(1,124
)
(4,507
)
Proceeds received from repayment of
stockholder/member notes receivable
246
223
Purchase of interest rate caps
(6,461
)
—
Other financing activity
—
19
Net cash provided by financing
activities
724,059
711,943
Net increase in cash and cash equivalents
and restricted cash
85,715
70,951
Cash and cash equivalents and restricted
cash at beginning of year
142,022
71,071
Cash and cash equivalents and restricted
cash at end of year
$
227,737
$
142,022
NON-GAAP FINANCIAL MEASURES
Adjusted EBITDA, Adjusted EBITDA Margin, Organic Revenue,
Organic Revenue Growth, Adjusted Net Income, Adjusted Diluted
Earnings Per Share (“EPS”), Pro Forma Revenue, Pro Forma Adjusted
EBITDA and Pro Forma Adjusted EBITDA Margin are not measures of
financial performance under GAAP and should not be considered
substitutes for GAAP measures, including commissions and fees (for
Organic Revenue, Organic Revenue Growth and Pro Forma Revenue), net
income (loss) (for Adjusted EBITDA, Adjusted EBITDA Margin, Pro
Forma Adjusted EBITDA and Pro Forma Adjusted EBITDA Margin), net
income (loss) attributable to BRP Group, Inc. (for Adjusted Net
Income) or diluted earnings (loss) per share (for Adjusted Diluted
EPS), 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, Inc. 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.
Adjusted EBITDA eliminates the effects of financing,
depreciation, amortization and change in fair value of contingent
consideration. 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 expenses related to Partnerships including
severance, and certain non-recurring costs, including those related
to raising capital. We believe that Adjusted EBITDA is an
appropriate measure of operating performance because it eliminates
the impact of 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 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 Growth based on commissions and
fees for the relevant period by excluding 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 for Organic Revenues 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, 2020 are excluded from
Organic Revenue for 2020. However, after June 1, 2021, results from
June 1, 2020 to December 31, 2020 for such Partners are compared to
results from June 1, 2021 to December 31, 2021 for purposes of
calculating Organic Revenue Growth in 2021. 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.
Adjusted Net Income is presented for the purpose of calculating
Adjusted Diluted EPS. We define Adjusted Net Income as net income
(loss) attributable to BRP Group, Inc. 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 expenses related to
Partnerships including 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.
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.
Pro Forma Revenue reflects GAAP revenue (commissions and fees),
plus revenue from Partnerships in the unowned periods.
Pro Forma Adjusted EBITDA takes into account Adjusted EBITDA
from Partnerships in the unowned periods and eliminates the effects
of financing, depreciation and amortization. We define Pro Forma
Adjusted EBITDA as pro forma 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
expenses related to Partnerships including severance, and certain
non-recurring costs, including those related to raising capital. We
believe that Pro Forma Adjusted EBITDA is an appropriate measure of
operating performance because it eliminates the impact of expenses
that do not relate to business performance, and that the
presentation of this measure enhances an investor’s understanding
of our financial performance.
Pro Forma Adjusted EBITDA Margin is Pro Forma Adjusted EBITDA
divided by Pro Forma Revenue. Pro Forma Adjusted EBITDA Margin is a
key metric used by management and our board of directors to assess
our financial performance. We believe that Pro Forma Adjusted
EBITDA Margin is an appropriate measure of operating performance
because it eliminates the impact of 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 Pro Forma Adjusted EBITDA Margin is helpful in
measuring profitability of operations on a consolidated level.
Adjusted EBITDA and Adjusted EBITDA Margin
The following table reconciles Adjusted EBITDA and Adjusted
EBITDA Margin to net loss, which we consider to be the most
directly comparable GAAP financial measure to Adjusted EBITDA and
Adjusted EBITDA Margin:
For the Three Months Ended
December 31,
For the Years Ended December
31,
(in thousands, except
percentages)
2021
2020
2021
2020
Commissions and fees
$
159,200
$
69,649
$
567,290
$
240,919
Net loss
$
(44,385
)
$
(19,118
)
$
(58,120
)
$
(29,885
)
Adjustments to net loss:
Amortization expense
14,845
5,807
48,720
19,038
Change in fair value of contingent
consideration
22,033
7,819
45,196
20,516
Interest expense, net
8,468
5,303
26,899
7,857
Share-based compensation
7,272
2,387
19,193
7,744
Transaction-related Partnership
expenses
7,956
7,079
19,182
13,851
Depreciation expense
868
466
2,788
1,129
Severance
390
—
871
89
Change in fair value of interest rate
caps
(1,036
)
—
123
—
Income tax provision
19
(17
)
19
(5
)
Capital related expenses
—
87
—
1,087
Other
3,816
802
8,038
2,535
Adjusted EBITDA
$
20,246
$
10,615
$
112,909
$
43,956
Adjusted EBITDA Margin
13
%
15
%
20
%
18
%
Organic Revenue and Organic Revenue Growth
The following table reconciles Organic Revenue to commissions
and fees, which we consider to be the most directly comparable GAAP
financial measure to Organic Revenue:
For the Three Months Ended
December 31,
For the Years Ended December
31,
(in thousands, except
percentages)
2021
2020
2021
2020
Commissions and fees
$
159,200
$
69,649
$
567,290
$
240,919
Partnership commissions and fees (1)
(75,888
)
(26,682
)
(272,272
)
(81,250
)
Organic Revenue (2)
$
83,312
$
42,967
$
295,018
$
159,669
Organic Revenue Growth (2)
$
12,904
$
6,387
$
54,004
$
21,780
Organic Revenue Growth % (2)
18
%
17
%
22
%
16
%
__________
(1)
Includes the first twelve months of such
commissions and fees generated from newly acquired Partners. For
the year ended December 31, 2021, amount is reduced by
approximately $830,000 for the timing of certain cash receipts that
were fully constrained under ASC Topic 606 in the post-partnership
period for our partnership with Agency RM, which closed February 1,
2020.
(2)
Organic Revenue for the three and twelve
months ended December 31, 2020 used to calculate Organic Revenue
Growth for the three and twelve months ended December 31, 2021 was
$70.4 million and $241.0 million, respectively, which is adjusted
to reflect revenues from Partnerships that reached the twelve-month
owned mark during the three and twelve months ended December 31,
2021.
Adjusted Net Income and Adjusted Diluted EPS
The following table reconciles Adjusted Net Income to net loss
attributable to BRP Group, Inc. and reconciles Adjusted Diluted EPS
to diluted net loss per share attributable to BRP Group, Inc. Class
A common stock:
For the Three Months Ended
December 31,
For the Years Ended December
31,
(in thousands, except percentages,
share and per share data)
2021
2020
2021
2020
Net loss attributable to BRP Group,
Inc.
$
(22,647
)
$
(10,308
)
$
(30,646
)
$
(15,696
)
Net loss attributable to noncontrolling
interests
(21,738
)
(8,810
)
(27,474
)
(14,189
)
Amortization expense
14,845
5,807
48,720
19,038
Change in fair value of contingent
consideration
22,033
7,819
45,196
20,516
Share-based compensation
7,272
2,387
19,193
7,744
Transaction-related Partnership
expenses
7,956
7,079
19,182
13,851
Amortization of deferred financing
costs
1,205
618
3,506
1,002
Depreciation
868
466
2,788
1,129
Severance
390
—
871
89
Change in fair value of interest rate
caps
(1,036
)
—
123
—
Capital related expenses
—
87
—
1,087
Other
3,816
802
8,038
2,535
Adjusted pre-tax income
12,964
5,947
89,497
37,106
Adjusted income taxes (1)
1,283
589
8,860
3,673
Adjusted Net Income
$
11,681
$
5,358
$
80,637
$
33,433
Weighted-average shares of Class A common
stock outstanding - diluted
54,875
35,528
47,588
27,176
Dilutive effect of unvested restricted
shares of Class A common stock
2,710
832
1,982
571
Exchange of Class B shares (2)
55,638
46,280
51,811
45,147
Adjusted dilutive weighted-average shares
outstanding
113,223
82,640
101,381
72,894
Adjusted Diluted EPS
$
0.10
$
0.06
$
0.80
$
0.46
Diluted net loss per share
$
(0.41
)
$
(0.29
)
$
(0.64
)
$
(0.58
)
Effect of exchange of Class B shares and
net loss attributable to noncontrolling interests per share
0.02
0.06
0.07
0.17
Other adjustments to net loss per
share
0.50
0.30
1.46
0.92
Adjusted income taxes per share
(0.01
)
(0.01
)
(0.09
)
(0.05
)
Adjusted Diluted EPS
$
0.10
$
0.06
$
0.80
$
0.46
___________
(1)
Represents corporate income taxes at
assumed effective tax rate of 9.9% applied to adjusted pre-tax
income.
(2)
Assumes the full exchange of Class B
shares for Class A common stock pursuant to the Amended LLC
Agreement.
Pro Forma Revenue
The following table reconciles Pro Forma Revenue and Pro Forma
Revenue Growth to commissions and fees, which we consider to be the
most directly comparable GAAP financial measure to Pro Forma
Revenue:
For the Three Months Ended
December 31,
For the Years Ended December
31,
2021
2020
2021
2020
Commissions and fees
$
159,200
$
69,649
$
567,290
$
240,919
Revenue for Partnerships in the unowned
period(1)
10,773
24,757
152,030
185,330
Pro Forma Revenue
$
169,973
$
94,406
$
719,320
$
426,249
Pro Forma Revenue Growth
$
75,567
$
57,845
$
293,071
$
273,639
Pro Forma Revenue Growth %
80
%
158
%
69
%
179
%
___________
(1)
The adjustments for the three months ended
December 31, 2021 reflect commissions and fees revenue for Wood
Guttman & Bogart Insurance Brokers, Construction Risk Partners,
LLC, Brush Creek, LLC and Arcana Insurance Services, LP as if the
Company had acquired the Partners on January 1, 2021. The
adjustments for the three months ended December 31, 2020 reflect
commissions and fees revenue for Insgroup, Inc., Armfield, Harrison
& Thomas, Inc., Westward Insurance Services, Inc., Burnham
Benefits Insurance Services, Inc. and Tanner, Ballew & Maloof,
Inc. as if the Company had acquired the Partners on January 1,
2020. The adjustments for the year ended December 31, 2021 reflect
commissions and fees revenue for LeaseTrack Services LLC/Effective
Coverage LLC, Riley Financial, Inc., Tim Altman, Inc., Seniors’
Insurance Services of Washington, Inc., Mid-Continent Companies,
Ltd., RogersGray Inc., EBSME, LLC, FounderShield LLC, The Capital
Group, LLC, River Oak Risk, LLC, White Hill Plaza, Inc., Jacobson,
Goldfarb & Scott, Inc, Wood Guttman & Bogart Insurance
Brokers, Construction Risk Partners, LLC, Brush Creek, LLC and
Arcana Insurance Services, LP as if the Company had acquired the
Partners on January 1, 2021. The adjustments for the year ended
December 31, 2020 reflect commissions and fees revenue for AgencyRM
LLC, VibrantUSA Inc., Insurance Risk Partners, LLC, Southern
Protective Group, LLC, Pendulum, LLC, Rosenthal Bros., Inc.,
Trinity Benefit Advisors, Inc./Russ Blakely & Associates, LLC,
Fletcher Financial Group, Inc., Medicare Insurance Advisors, Inc.,
Insgroup, Inc., Armfield, Harrison & Thomas, Inc., Westward
Insurance Services, Inc., Burnham Benefits Insurance Services, Inc.
and Tanner, Ballew & Maloof, Inc. as if the Company had
acquired the Partners on January 1, 2020. This unaudited pro forma
information should not be relied upon as being indicative of the
historical results that would have been obtained if the
acquisitions had occurred on that date, nor the results that may be
obtained in the future.
Pro Forma Adjusted EBITDA and Pro Forma Adjusted EBITDA
Margin
The following table reconciles Pro Forma Adjusted EBITDA and Pro
Forma Adjusted EBITDA Margin to net loss, which we consider to be
the most directly comparable GAAP financial measure to Pro Forma
Adjusted EBITDA and Pro Forma Adjusted EBITDA Margin:
For the Three Months Ended
December 31,
For the Years Ended December
31,
2021
2020
2021
2020
Pro forma revenue
$
169,973
$
94,406
$
719,320
$
426,249
Net loss
(44,385
)
(19,118
)
(58,120
)
(29,885
)
Net income for Partnerships in the unowned
period(1)
5,421
4,005
29,078
25,205
Pro forma net loss
(38,964
)
(15,113
)
(29,042
)
(4,680
)
Adjustments to pro forma net loss:
Amortization expense
16,451
10,439
68,805
43,965
Change in fair value of contingent
consideration
22,033
7,819
45,196
20,516
Interest expense, net
9,333
5,586
39,852
22,290
Share-based compensation
7,272
2,387
19,193
7,744
Transaction-related Partnership
expenses
7,956
7,079
19,182
13,851
Depreciation expense
868
746
2,788
2,474
Severance related to Partnership
activity
390
—
871
89
Change in fair value of interest rate
caps
(1,036
)
—
123
—
Income tax provision
19
(17
)
19
(5
)
Capital related expenses
—
87
—
1,087
Other
3,816
802
8,038
2,535
Pro Forma Adjusted EBITDA
$
28,138
$
19,815
$
175,025
$
109,866
Pro Forma Adjusted EBITDA Margin
17
%
21
%
24
%
26
%
___________
(1)
The adjustments for the three months ended
December 31, 2021 reflect net income (loss) for Wood Guttman &
Bogart Insurance Brokers, Construction Risk Partners, LLC, Brush
Creek, LLC and Arcana Insurance Services, LP as if the Company had
acquired the Partners on January 1, 2021. The adjustments for the
three months ended December 31, 2020 reflect net income (loss) for
Insgroup, Inc., Armfield, Harrison & Thomas, Inc., Westward
Insurance Services, Inc., Burnham Benefits Insurance Services, Inc.
and Tanner, Ballew & Maloof, Inc. as if the Company had
acquired the Partners on January 1, 2020. The adjustments for the
year ended December 31, 2021 reflect net income (loss) for
LeaseTrack Services LLC/Effective Coverage LLC, Riley Financial,
Inc., Tim Altman, Inc., Seniors’ Insurance Services of Washington,
Inc., Mid-Continent Companies, Ltd., RogersGray Inc., EBSME, LLC,
FounderShield LLC, The Capital Group, LLC, River Oak Risk, LLC,
White Hill Plaza, Inc., Jacoson, Goldfarb & Scott, Inc, Wood
Guttman & Bogart Insurance Brokers, Construction Risk Partners,
LLC, Brush Creek, LLC and Arcana Insurance Services, LP as if the
Company had acquired the Partners on January 1, 2021. The
adjustments for the year ended December 31, 2020 reflect net income
(loss) for AgencyRM LLC, VibrantUSA Inc., Insurance Risk Partners,
LLC, Southern Protective Group, LLC, Pendulum, LLC, Rosenthal
Bros., Inc., Trinity Benefit Advisors, Inc./Russ Blakely &
Associates, LLC, Fletcher Financial Group, Inc., Medicare Insurance
Advisors, Inc., Insgroup, Inc., Armfield, Harrison & Thomas,
Inc., Westward Insurance Services, Inc., Burnham Benefits Insurance
Services, Inc. and Tanner, Ballew & Maloof, Inc. as if the
Company had acquired the Partners on January 1, 2020. This
unaudited pro forma information should not be relied upon as being
indicative of the historical results that would have been obtained
if the acquisitions had occurred on that date, nor the results that
may be obtained in the future.
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
ASC Topic 606
Accounting Standards Codification Topic
606, Revenue from Contracts with Customers
Clients
Our insureds
Colleagues
Our employees
GAAP
Accounting principles generally accepted
in the United States of America
Partners
Companies that we have acquired, or in the
case of asset acquisitions, the producers
Partnerships
Strategic acquisitions made by the
Company
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220301006142/en/
INVESTOR RELATIONS Bonnie Bishop, Executive Director
Baldwin Risk Partners (813) 259-8032 |
IR@baldwinriskpartners.com
PRESS Rachel DeAngelo, Communications Manager Baldwin
Risk Partners (813) 387-6842 |
rdeangelo@baldwinriskpartners.com
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