- First Quarter 2022 Revenue Grew 59%
Year-Over-Year to $242.8 Million -
- First Quarter 2022 Organic Revenue Growth(1)
of 16% -
BRP Group, Inc. (“BRP Group” or the “Company”) (NASDAQ: BRP), an
independent insurance distribution firm delivering tailored
insurance solutions, today announced its results for the first
quarter ended March 31, 2022.
FIRST QUARTER 2022 HIGHLIGHTS AND SUBSEQUENT EVENTS
- Revenue increased 59% year-over-year to $242.8 million
- Organic Revenue Growth was 16% year-over-year
- “MGA of the Future” organic revenue grew 42% year-over-year to
$24.4 million
- GAAP net income of $44.8 million and GAAP earnings per fully
diluted share of $0.39
- Adjusted Net Income(2) of $57.5 million, or $0.50(2) per fully
diluted share
- Adjusted EBITDA(3) grew 37% to $72.9 million
- Adjusted EBITDA Margin(3) of 30%
- Subsequent to March 31, 2022, closed one Partner acquisition
that generated total revenue(4) of approximately $81.8 million for
the 12-month period pre-acquisition
“We enjoyed a strong start to 2022, growing revenue nearly 60%,
highlighted by another quarter of double-digit organic growth
across all four segments and the continued expansion of our ‘MGA of
the Future’ platform,” said Trevor Baldwin, Chief Executive Officer
of BRP Group. “Beyond our continued outsize organic growth, we were
excited to complete the acquisition of Westwood Insurance Agency
post-quarter end. Westwood represents our largest Partnership to
date and will considerably accelerate many of our growth
initiatives in the substantial homeowners insurance market. We
remain well positioned in this ever-changing economic and
geopolitical environment to further deliver sustainable growth,
increased profitability, and stakeholder value as we currently see
our business performance accelerating into Q2.”
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2022, cash and cash equivalents were $156.8
million and there was $919.5 million of long-term debt principal
amount outstanding under the Company's credit facility. Subsequent
to completion of its Partnership with Westwood Insurance Agency on
April 29, 2022, the Company had remaining availability for
borrowing of $70.0 million under its revolving credit facility.
WEBCAST AND CONFERENCE CALL INFORMATION
BRP Group will host a webcast and conference call to discuss
first quarter 2022 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 1,200,000 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, 2021 used to calculate Organic Revenue
Growth for the three months ended March 31, 2022 was $152.9
million, which is adjusted to reflect revenues from Partnerships
that have reached the twelve-month owned mark during the three
months ended March 31, 2022. 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 attributable to BRP Group, Inc. and
reconciliation of Adjusted Diluted EPS to diluted earnings per
share, the most directly comparable GAAP financial measures, are
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, the most directly
comparable GAAP financial measure, is set forth in the
reconciliation table accompanying this release.
(4)
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
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 (Unaudited)
For the Three Months Ended
March 31,
(in thousands, except share and per
share data)
2022
2021
Revenues:
Commissions and fees
$
242,848
$
152,828
Operating expenses:
Commissions, employee compensation and
benefits
153,750
89,375
Other operating expenses
36,442
16,875
Amortization expense
17,562
10,537
Change in fair value of contingent
consideration
(5,632
)
(1,503
)
Depreciation expense
988
594
Total operating expenses
203,110
115,878
Operating income
39,738
36,950
Other income (expense):
Interest expense, net
(10,350
)
(5,643
)
Other income, net
15,451
—
Total other income (expense)
5,101
(5,643
)
Net income
44,839
31,307
Less: net income attributable to
noncontrolling interests
21,970
16,001
Net income attributable to BRP Group,
Inc.
$
22,869
$
15,306
Comprehensive income
$
44,839
$
31,307
Comprehensive income attributable to
noncontrolling interests
21,970
16,001
Comprehensive income attributable to BRP
Group, Inc.
22,869
15,306
Basic earnings per share
$
0.41
$
0.35
Diluted earnings per share
$
0.39
$
0.33
Weighted-average shares of Class A common
stock outstanding - basic
55,719,803
44,255,011
Weighted-average shares of Class A common
stock outstanding - diluted
58,715,825
45,783,086
BRP GROUP, INC. Condensed
Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per
share data)
March 31, 2022
December 31, 2021
Assets
Current assets:
Cash and cash equivalents
$
156,811
$
138,292
Restricted cash
87,097
89,445
Premiums, commissions and fees receivable,
net
375,290
340,837
Prepaid expenses and other current
assets
14,226
8,151
Due from related parties
1,757
1,668
Total current assets
635,181
578,393
Property and equipment, net
18,280
17,474
Right-of-use assets
83,014
81,646
Other assets
45,543
25,586
Intangible assets, net
927,605
944,467
Goodwill
1,232,399
1,228,741
Total assets
$
2,942,022
$
2,876,307
Liabilities, Mezzanine Equity
and Stockholders’ Equity
Current liabilities:
Premiums payable to insurance
companies
$
309,257
$
310,045
Producer commissions payable
52,314
41,833
Accrued expenses and other current
liabilities
87,316
92,223
Related party notes payable
61,500
61,500
Current portion of contingent earnout
liabilities
20,897
35,088
Total current liabilities
531,284
540,689
Revolving lines of credit
75,000
35,000
Long-term debt, less current portion
813,172
814,614
Contingent earnout liabilities, less
current portion
206,950
223,501
Operating lease liabilities, less current
portion
72,622
71,357
Other liabilities
3,959
3,590
Total liabilities
1,702,987
1,688,751
Commitments and contingencies
Mezzanine equity:
Redeemable noncontrolling interest
288
269
Stockholders’ equity:
Class A common stock, par value $0.01 per
share, 300,000,000 shares authorized; 58,790,758 and 58,602,859
shares issued and outstanding at March 31, 2022 and December 31,
2021, respectively
588
586
Class B common stock, par value $0.0001
per share, 100,000,000 shares authorized; 56,268,051 and 56,338,051
shares issued and outstanding at March 31, 2022 and December 31,
2021, respectively
6
6
Additional paid-in capital
671,143
663,002
Accumulated deficit
(32,123
)
(54,992
)
Stockholder notes receivable
(175
)
(219
)
Total stockholders’ equity attributable to
BRP Group, Inc.
639,439
608,383
Noncontrolling interest
599,308
578,904
Total stockholders’ equity
1,238,747
1,187,287
Total liabilities, mezzanine equity and
stockholders’ equity
$
2,942,022
$
2,876,307
BRP GROUP, INC. Condensed
Consolidated Statements of Cash Flows (Unaudited)
For the Three Months Ended
March 31,
(in thousands)
2022
2021
Cash flows from operating activities:
Net income
$
44,839
$
31,307
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization
18,550
11,131
Change in fair value of contingent
consideration
(5,632
)
(1,503
)
Share-based compensation expense
7,564
3,542
Amortization of deferred financing
costs
1,286
693
Change in fair value of interest rate
caps
(15,810
)
—
Payment of contingent earnout
consideration in excess of purchase price accrual
(11,117
)
—
Changes in operating assets and
liabilities, net of effect of acquisitions:
Premiums, commissions and fees receivable,
net
(35,359
)
(50,364
)
Prepaid expenses and other current
assets
(8,908
)
(467
)
Due to/from related parties
(89
)
174
Right-of-use assets
(1,368
)
(54,856
)
Accounts payable, accrued expenses and
other current liabilities
627
7,751
Operating lease liabilities
1,984
55,879
Net cash provided by (used in) operating
activities
(3,433
)
3,287
Cash flows from investing activities:
Capital expenditures
(1,793
)
(1,000
)
Investment in business venture
(639
)
—
Cash consideration paid for asset
acquisitions, net of cash received
(700
)
—
Cash consideration paid for business
combinations, net of cash received
—
(17,358
)
Net cash used in investing activities
(3,132
)
(18,358
)
Cash flows from financing activities:
Payment of contingent earnout
consideration up to amount of purchase price accrual
(13,993
)
—
Proceeds from revolving line of credit
40,000
—
Payments on long-term debt
(2,127
)
(1,000
)
Payments of debt issuance costs
(1,188
)
(59
)
Purchase of interest rate caps
—
(3,461
)
Proceeds from repayment of stockholder
notes receivable
44
116
Net cash provided by (used in) financing
activities
22,736
(4,404
)
Net increase (decrease) in cash and cash
equivalents and restricted cash
16,171
(19,475
)
Cash and cash equivalents and restricted
cash at beginning of period
227,737
142,022
Cash and cash equivalents and restricted
cash at end of period
$
243,908
$
122,547
NON-GAAP FINANCIAL MEASURES
Adjusted EBITDA, Adjusted EBITDA Margin, Organic Revenue,
Organic Revenue Growth, Adjusted Net Income and Adjusted Diluted
Earnings Per Share (“EPS”) 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, 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.
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, 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, 2021 are excluded from
Organic Revenue for 2021. However, after June 1, 2022, results from
June 1, 2021 to December 31, 2021 for such Partners are compared to
results from June 1, 2022 to December 31, 2022 for purposes of
calculating Organic Revenue Growth in 2022. 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, 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.
Adjusted EBITDA and Adjusted EBITDA Margin
The following table reconciles Adjusted EBITDA and Adjusted
EBITDA Margin to net income, which we consider to be the most
directly comparable GAAP financial measure:
For the Three Months Ended
March 31,
(in thousands, except
percentages)
2022
2021(1)
Commissions and fees
$
242,848
$
152,828
Net income
$
44,839
$
31,307
Adjustments to net income:
Amortization expense
17,562
10,537
Change in fair value of interest rate
caps
(15,810
)
—
Interest expense, net
10,350
5,643
Transaction-related Partnership
expenses
8,216
2,445
Share-based compensation
7,564
3,542
Change in fair value of contingent
consideration
(5,632
)
(1,503
)
Depreciation expense
988
594
Severance
222
—
Other(2)
4,633
859
Adjusted EBITDA
$
72,932
$
53,424
Adjusted EBITDA Margin
30
%
35
%
__________
(1)
We revised operating expenses for
the three months ended March 31, 2021 to reflect the adoption of
Topic 842 as described further in our Quarterly Report of Form 10-Q
filed with the SEC on May 10, 2022. This adjustment affected net
income and Adjusted EBITDA values.
(2)
Other addbacks to Adjusted EBITDA
include non-recurring recruiting costs, non-recurring remediation
efforts, non-recurring professional fees and litigation costs, and
non-recurring bonuses.
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)
2022
2021
Commissions and fees
$
242,848
$
152,828
Partnership commissions and fees(1)
(64,777
)
(91,215
)
Organic Revenue
$
178,071
$
61,613
Organic Revenue Growth(2)
$
25,181
$
7,447
Organic Revenue Growth %(2)
16
%
14
%
__________
(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, 2021 used to calculate Organic Revenue
Growth for the three months ended March 31, 2022 was $152.9
million, which is adjusted to reflect revenues from Partnerships
that have reached the twelve-month owned mark during the three
months ended March 31, 2022.
Adjusted Net Income and Adjusted Diluted EPS
The following table reconciles Adjusted Net Income to net income
attributable to BRP Group, Inc. and reconciles Adjusted Diluted EPS
to diluted earnings 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)
2022
2021(1)(2)
Net income attributable to BRP Group,
Inc.
$
22,869
$
15,306
Net income attributable to noncontrolling
interests
21,970
16,001
Amortization expense
17,562
10,537
Change in fair value of interest rate
caps
(15,810
)
—
Transaction-related Partnership
expenses
8,216
2,445
Share-based compensation
7,564
3,542
Change in fair value of contingent
consideration
(5,632
)
(1,503
)
Amortization of deferred financing
costs
1,286
693
Depreciation
988
594
Severance
222
—
Other(3)
4,633
859
Adjusted pre-tax income
63,868
48,474
Adjusted income taxes(4)
6,323
4,799
Adjusted Net Income
$
57,545
$
43,675
Weighted-average shares of Class A common
stock outstanding - diluted
58,716
45,783
Exchange of Class B shares(5)
56,269
49,789
Adjusted dilutive weighted-average shares
outstanding
114,985
95,572
Adjusted Diluted EPS
$
0.50
$
0.46
Diluted earnings per share
$
0.39
$
0.33
Other adjustments to earnings per
share
0.16
0.18
Adjusted income taxes per share
(0.05
)
(0.05
)
Adjusted Diluted EPS
$
0.50
$
0.46
___________
(1)
We revised operating expenses for
the three months ended March 31, 2021 to reflect the adoption of
Topic 842 as described further in our Quarterly Report of Form 10-Q
filed with the SEC on May 10, 2022. This adjustment affected net
income attributable to BRP Group, Inc. and Adjusted Net Income
values as well as diluted earnings per share and Adjusted Diluted
EPS.
(2)
Calculation was adjusted in the
fourth quarter of 2021 to include depreciation. Prior year amounts
have been conformed to current year presentation.
(3)
Other addbacks to Adjusted EBITDA
include non-recurring recruiting costs, non-recurring remediation
efforts, non-recurring professional fees and litigation costs, and
non-recurring bonuses.
(4)
Represents corporate income taxes
at assumed effective tax rate of 9.9% applied to adjusted pre-tax
income.
(5)
Assumes the full exchange of
Class B shares for Class A common stock pursuant to the Amended LLC
Agreement.
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
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
Topic 842
Accounting Standards Codification Topic
842, Leases
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220510006241/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
Baldwin Insurance (NASDAQ:BRP)
Historical Stock Chart
From May 2024 to Jun 2024
Baldwin Insurance (NASDAQ:BRP)
Historical Stock Chart
From Jun 2023 to Jun 2024