BRP Group, Inc. Announces Fourth Quarter and Full Year 2022 Results
BRP Group, Inc. (NASDAQ: BRP) reported robust financial results for Q4 and full year 2022. Q4 revenue surged 55% YoY to $246 million, with organic growth of 26%. Full year revenue increased 73% YoY to $980.7 million, while organic growth stood at 23%. Despite these gains, the company recorded a GAAP net loss of $91.5 million for Q4 and $76.7 million for the year. Adjusted net income for Q4 was $14.4 million, reflecting an adjusted EBITDA of $39.2 million, a 94% increase. As of December 31, 2022, BRP had $118 million in cash and $1.3 billion in outstanding debt, with $95 million available for borrowing.
- Q4 revenue increased 55% YoY to $246 million.
- Full year revenue grew 73% YoY to $980.7 million.
- Adjusted net income for Q4 was $14.4 million.
- Adjusted EBITDA grew 94% to $39.2 million.
- Strong organic revenue growth of 26% in Q4 and 23% for the full year.
- GAAP net loss of $91.5 million in Q4.
- GAAP net loss of $76.7 million for the full year.
- Fourth Quarter 2022 Revenue Grew
- Full Year 2022 Revenue Grew
- Fourth Quarter 2022 Organic Revenue Growth(1) of
- Full Year 2022 Organic Revenue Growth of
FOURTH QUARTER 2022 HIGHLIGHTS
-
Revenue increased
55% year-over-year to$246.0 million
-
Organic Revenue Growth was
26% year-over-year
-
GAAP net loss of
$91.5 million $0.84
-
Adjusted Net Income(2) of
$14.4 million $0.12
-
Adjusted EBITDA(3) grew
94% to$39.2 million
-
Adjusted EBITDA Margin(3) of
16%
“We closed out 2022 with another quarter of double-digit organic growth, which accelerated year over year both in the quarter and for the full year of 2022. This further showcases the strength and resilience of our business model and highlights BRP's ability to deliver clear value for Clients through our innovative solutions and trusted advice,” said
LIQUIDITY AND CAPITAL RESOURCES
As of
FULL YEAR 2022 HIGHLIGHTS
-
Revenue increased
73% year-over-year to$980.7 million
-
Pro Forma Revenue(4) grew
41% year-over-year to$1.0 billion
-
Organic Revenue Growth of
23% year-over-year
-
GAAP net loss of
$76.7 million $0.74
-
Adjusted Net Income of
$119.0 million $1.03
-
Adjusted EBITDA grew
74% to$196.5 million
-
Adjusted EBITDA Margin of
20%
-
Pro Forma Adjusted EBITDA(5) of
$202.9 million 20%
WEBCAST AND CONFERENCE CALL INFORMATION
A webcast replay of the call will be available at ir.baldwinriskpartners.com for one year following the call.
ABOUT
FOOTNOTES
(1) |
|
Organic Revenue for the three and twelve months ended |
(2) |
|
Adjusted Net Income and Adjusted Diluted EPS are non-GAAP measures. Reconciliation of Adjusted Net Income to net loss attributable to |
(3) |
|
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. |
(4) |
|
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. |
(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. |
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
Consolidated Statements of Comprehensive Loss
|
For the Three Months
Ended |
|
For the Years
Ended |
||||||||
(in thousands, except share and per share data) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
Revenues: |
|
|
|
|
|
|
|
||||
Commissions and fees |
$ |
246,044 |
|
$ |
159,200 |
|
$ |
980,720 |
|
$ |
567,290 |
|
|
|
|
|
|
|
|
||||
Operating expenses: |
|
|
|
|
|
|
|
||||
Commissions, employee compensation and benefits |
|
196,927 |
|
|
121,529 |
|
|
719,445 |
|
|
400,050 |
Other operating expenses |
|
49,284 |
|
|
37,782 |
|
|
173,708 |
|
|
102,162 |
Amortization expense |
|
21,826 |
|
|
14,845 |
|
|
81,738 |
|
|
48,720 |
Change in fair value of contingent consideration |
|
43,116 |
|
|
22,033 |
|
|
32,307 |
|
|
45,196 |
Depreciation expense |
|
1,311 |
|
|
868 |
|
|
4,620 |
|
|
2,788 |
Total operating expenses |
|
312,464 |
|
|
197,057 |
|
|
1,011,818 |
|
|
598,916 |
|
|
|
|
|
|
|
|
||||
Operating loss |
|
(66,420) |
|
|
(37,857) |
|
|
(31,098) |
|
|
(31,626) |
|
|
|
|
|
|
|
|
||||
Other income (expense): |
|
|
|
|
|
|
|
||||
Interest expense, net |
|
(25,324) |
|
|
(8,468) |
|
|
(71,072) |
|
|
(26,899) |
Other income, net |
|
986 |
|
|
1,959 |
|
|
26,137 |
|
|
424 |
Total other expense |
|
(24,338) |
|
|
(6,509) |
|
|
(44,935) |
|
|
(26,475) |
|
|
|
|
|
|
|
|
||||
Loss before income taxes |
|
(90,758) |
|
|
(44,366) |
|
|
(76,033) |
|
|
(58,101) |
Income tax expense |
|
715 |
|
|
19 |
|
|
715 |
|
|
19 |
Net loss |
|
(91,473) |
|
|
(44,385) |
|
|
(76,748) |
|
|
(58,120) |
Less: net loss attributable to noncontrolling interests |
|
(42,983) |
|
|
(21,738) |
|
|
(34,976) |
|
|
(27,474) |
Net loss attributable to |
$ |
(48,490) |
|
$ |
(22,647) |
|
$ |
(41,772) |
|
$ |
(30,646) |
|
|
|
|
|
|
|
|
||||
Comprehensive loss |
$ |
(91,473) |
|
$ |
(44,385) |
|
$ |
(76,748) |
|
$ |
(58,120) |
Comprehensive loss attributable to noncontrolling interests |
|
(42,983) |
|
|
(21,738) |
|
|
(34,976) |
|
|
(27,474) |
Comprehensive loss attributable to |
|
(48,490) |
|
|
(22,647) |
|
|
(41,772) |
|
|
(30,646) |
|
|
|
|
|
|
|
|
||||
Basic and diluted loss per share |
$ |
(0.84) |
|
$ |
(0.41) |
|
$ |
(0.74) |
|
$ |
(0.64) |
Basic and diluted weighted-average shares of Class A common stock outstanding |
|
57,997,896 |
|
|
54,874,756 |
|
|
56,825,348 |
|
|
47,587,866 |
Consolidated Balance Sheets
|
|
|
||||
(in thousands, except share and per share data) |
|
|
2022 |
|
|
2021 |
Assets |
|
|
|
|
||
Current assets: |
|
|
|
|
||
Cash and cash equivalents |
|
$ |
118,090 |
|
$ |
138,292 |
Restricted cash |
|
|
112,381 |
|
|
89,445 |
Premiums, commissions and fees receivable, net |
|
|
531,992 |
|
|
340,837 |
Prepaid expenses and other current assets |
|
|
9,823 |
|
|
8,151 |
Due from related parties |
|
|
113 |
|
|
1,668 |
Total current assets |
|
|
772,399 |
|
|
578,393 |
Property and equipment, net |
|
|
25,405 |
|
|
17,474 |
Right-of-use assets |
|
|
96,465 |
|
|
81,646 |
Other assets |
|
|
45,935 |
|
|
25,586 |
Intangible assets, net |
|
|
1,099,918 |
|
|
944,467 |
|
|
|
1,422,060 |
|
|
1,228,741 |
Total assets |
|
$ |
3,462,182 |
|
$ |
2,876,307 |
Liabilities, Mezzanine Equity and Stockholders’ Equity |
|
|
|
|
||
Current liabilities: |
|
|
|
|
||
Premiums payable to insurance companies |
|
$ |
471,294 |
|
$ |
315,907 |
Producer commissions payable |
|
|
53,927 |
|
|
35,971 |
Accrued expenses and other current liabilities |
|
|
125,743 |
|
|
92,223 |
Related party notes payable |
|
|
1,525 |
|
|
61,500 |
Current portion of contingent earnout liabilities |
|
|
46,717 |
|
|
35,088 |
Total current liabilities |
|
|
699,206 |
|
|
540,689 |
Revolving line of credit |
|
|
505,000 |
|
|
35,000 |
Long-term debt, less current portion |
|
|
809,862 |
|
|
814,614 |
Contingent earnout liabilities, less current portion |
|
|
220,219 |
|
|
223,501 |
Operating lease liabilities, less current portion |
|
|
87,692 |
|
|
71,357 |
Other liabilities |
|
|
164 |
|
|
3,590 |
Total liabilities |
|
|
2,322,143 |
|
|
1,688,751 |
Commitments and contingencies |
|
|
|
|
||
Mezzanine equity: |
|
|
|
|
||
Redeemable noncontrolling interest |
|
|
487 |
|
|
269 |
Stockholders’ equity: |
|
|
|
|
||
Class A common stock, par value |
|
|
614 |
|
|
586 |
Class B common stock, par value |
|
|
5 |
|
|
6 |
Additional paid-in capital |
|
|
704,291 |
|
|
663,002 |
Accumulated deficit |
|
|
(96,764) |
|
|
(54,992) |
Stockholder notes receivable |
|
|
(42) |
|
|
(219) |
Total stockholders’ equity attributable to |
|
|
608,104 |
|
|
608,383 |
Noncontrolling interest |
|
|
531,448 |
|
|
578,904 |
Total stockholders’ equity |
|
|
1,139,552 |
|
|
1,187,287 |
Total liabilities, mezzanine equity and stockholders’ equity |
|
$ |
3,462,182 |
$ |
2,876,307 |
|
Consolidated Statements of Cash Flows
|
|
For the Years Ended |
||||
(in thousands) |
|
|
2022 |
|
|
2021 |
Cash flows from operating activities: |
|
|
|
|
||
Net loss |
|
$ |
(76,748) |
|
$ |
(58,120) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
|
|
||
Depreciation and amortization |
|
|
86,358 |
|
|
51,508 |
Change in fair value of contingent consideration |
|
|
32,307 |
|
|
45,196 |
Share-based compensation expense |
|
|
47,389 |
|
|
19,193 |
(Gain) loss on interest rate caps |
|
|
(26,220) |
|
|
123 |
Payment of contingent earnout consideration in excess of purchase price accrual |
|
|
(49,926) |
|
|
(4,825) |
Amortization of deferred financing costs |
|
|
5,120 |
|
|
3,506 |
Other fair value adjustments |
|
|
135 |
|
|
311 |
Changes in operating assets and liabilities, net of effect of acquisitions: |
|
|
|
|
||
Premiums, commissions and fees receivable, net |
|
|
(183,006) |
|
|
(64,501) |
Prepaid expenses and other assets |
|
|
(11,320) |
|
|
(8,032) |
Due to/from related parties |
|
|
937 |
|
|
(1,649) |
Right-of-use assets |
|
|
(13,492) |
|
|
(81,646) |
Accounts payable, accrued expenses and other current liabilities |
|
|
173,362 |
|
|
55,188 |
Operating lease liabilities |
|
|
16,531 |
|
|
83,877 |
Other liabilities |
|
|
(3,889) |
|
|
— |
Net cash provided by (used in) operating activities |
|
|
(2,462) |
|
|
40,129 |
Cash flows from investing activities: |
|
|
|
|
||
Cash consideration paid for business combinations, net of cash received |
|
|
(387,919) |
|
|
(668,033) |
Cash consideration paid for asset acquisitions |
|
|
(3,356) |
|
|
(3,212) |
Capital expenditures, net |
|
|
(21,979) |
|
|
(5,321) |
Investment in business ventures |
|
|
(1,103) |
|
|
(1,907) |
Net cash used in investing activities |
|
|
(414,357) |
|
|
(678,473) |
Cash flows from financing activities: |
|
|
|
|
||
Proceeds from issuance of Class A common stock, net of underwriting discounts |
|
|
— |
|
|
269,375 |
Payment of common stock offering costs |
|
|
— |
|
|
(1,054) |
Payment of contingent earnout consideration up to amount of purchase price accrual |
|
|
(48,309) |
|
|
(7,723) |
Proceeds from revolving line of credit |
|
|
512,000 |
|
|
420,210 |
Payments on revolving line of credit |
|
|
(42,000) |
|
|
(385,210) |
Proceeds from long-term debt |
|
|
— |
|
|
441,430 |
Payments on long-term debt |
|
|
(8,509) |
|
|
(5,630) |
Payments of debt issuance costs |
|
|
(1,821) |
|
|
(1,124) |
Proceeds from the sales and settlements of interest rate caps |
|
|
21,246 |
|
|
— |
Purchase of interest rate caps |
|
|
(3,838) |
|
|
(6,461) |
Tax distributions to BRP's LLC Members |
|
|
(9,393) |
|
|
— |
Proceeds received from repayment of stockholder notes receivable |
|
|
177 |
|
|
246 |
Net cash provided by financing activities |
|
|
419,553 |
|
|
724,059 |
Net increase in cash and cash equivalents and restricted cash |
|
|
2,734 |
|
|
85,715 |
Cash and cash equivalents and restricted cash at beginning of year |
|
|
227,737 |
|
|
142,022 |
Cash and cash equivalents and restricted cash at end of year |
|
$ |
230,471 |
|
$ |
227,737 |
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, Pro Forma Adjusted EBITDA Margin 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, 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
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 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
Adjusted Net Income is presented for the purpose of calculating Adjusted Diluted EPS. We define Adjusted Net Income as net income (loss) attributable to
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 Partnership and integration expenses, 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.
We calculate free cash flow because we hold fiduciary cash designated for our
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:
|
|
For the Three Months
|
|
For the Years
|
||||||||
(in thousands, except percentages) |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
Commissions and fees |
|
$ |
246,044 |
|
$ |
159,200 |
|
$ |
980,720 |
|
$ |
567,290 |
|
|
|
|
|
|
|
|
|
||||
Net loss |
|
$ |
(91,473) |
|
$ |
(44,385) |
|
$ |
(76,748) |
|
$ |
(58,120) |
Adjustments to net loss: |
|
|
|
|
|
|
|
|
||||
Amortization expense |
|
|
21,826 |
|
|
14,845 |
|
|
81,738 |
|
|
48,720 |
Interest expense, net |
|
|
25,324 |
|
|
8,468 |
|
|
71,072 |
|
|
26,899 |
Share-based compensation |
|
|
21,324 |
|
|
7,272 |
|
|
47,389 |
|
|
19,193 |
|
|
|
5,036 |
|
|
7,956 |
|
|
34,588 |
|
|
19,182 |
Change in fair value of contingent consideration |
|
|
43,116 |
|
|
22,033 |
|
|
32,307 |
|
|
45,196 |
(Gain) loss on interest rate caps |
|
|
(800) |
|
|
(1,036) |
|
|
(26,220) |
|
|
123 |
Depreciation expense |
|
|
1,311 |
|
|
868 |
|
|
4,620 |
|
|
2,788 |
Severance |
|
|
120 |
|
|
390 |
|
|
1,255 |
|
|
871 |
Income tax provision |
|
|
715 |
|
|
19 |
|
|
715 |
|
|
19 |
Other(1) |
|
|
12,691 |
|
|
3,816 |
|
|
25,774 |
|
|
8,038 |
Adjusted EBITDA |
|
$ |
39,190 |
|
$ |
20,246 |
|
$ |
196,490 |
|
$ |
112,909 |
Adjusted EBITDA Margin |
|
|
16 % |
|
|
13 % |
|
|
20 % |
|
|
20 % |
__________
(1) |
|
Other addbacks to Adjusted EBITDA include certain expenses that are considered to be non-recurring or non-operational, including certain recruiting costs, remediation efforts, professional fees, litigation costs and bonuses. |
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:
|
|
For the Three Months
|
|
For the Years
|
||||||||
(in thousands, except percentages) |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
Commissions and fees |
|
$ |
246,044 |
|
$ |
159,200 |
|
$ |
980,720 |
|
$ |
567,290 |
Partnership commissions and fees(1) |
|
|
(46,059) |
|
|
(75,888) |
|
|
(280,660) |
|
|
(272,272) |
Organic Revenue |
|
$ |
199,985 |
|
$ |
83,312 |
|
$ |
700,060 |
|
$ |
295,018 |
Organic Revenue Growth(2) |
|
$ |
40,785 |
|
$ |
12,904 |
|
$ |
132,610 |
|
$ |
54,004 |
Organic Revenue Growth %(2) |
|
|
26 % |
|
|
18 % |
|
|
23 % |
|
|
22 % |
__________
(1) |
|
Includes the first twelve months of such commissions and fees generated from newly acquired Partners. |
(2) |
|
Organic Revenue for the three and twelve months ended |
Adjusted Net Income and Adjusted Diluted EPS
The following table reconciles Adjusted Net Income to net loss attributable to
|
|
For the Three Months
|
|
For the Years
|
||||||||
(in thousands, except per share data) |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
Net loss attributable to |
|
$ |
(48,490) |
|
$ |
(22,647) |
|
$ |
(41,772) |
|
$ |
(30,646) |
Net loss attributable to noncontrolling interests |
|
|
(42,983) |
|
|
(21,738) |
|
|
(34,976) |
|
|
(27,474) |
Amortization expense |
|
|
21,826 |
|
|
14,845 |
|
|
81,738 |
|
|
48,720 |
Share-based compensation |
|
|
21,324 |
|
|
7,272 |
|
|
47,389 |
|
|
19,193 |
|
|
|
5,036 |
|
|
7,956 |
|
|
34,588 |
|
|
19,182 |
Change in fair value of contingent consideration |
|
|
43,116 |
|
|
22,033 |
|
|
32,307 |
|
|
45,196 |
(Gain) loss on interest rate caps, net of cash settlements |
|
|
859 |
|
|
(1,036) |
|
|
(24,012) |
|
|
123 |
Amortization of deferred financing costs |
|
|
1,226 |
|
|
1,205 |
|
|
5,120 |
|
|
3,506 |
Depreciation |
|
|
1,311 |
|
|
868 |
|
|
4,620 |
|
|
2,788 |
Severance |
|
|
120 |
|
|
390 |
|
|
1,255 |
|
|
871 |
Other(1) |
|
|
12,691 |
|
|
3,816 |
|
|
25,774 |
|
|
8,038 |
Adjusted pre-tax income |
|
|
16,036 |
|
|
12,964 |
|
|
132,031 |
|
|
89,497 |
Adjusted income taxes(2) |
|
|
1,587 |
|
|
1,283 |
|
|
13,071 |
|
|
8,860 |
Adjusted Net Income |
|
$ |
14,449 |
|
$ |
11,681 |
|
$ |
118,960 |
|
$ |
80,637 |
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares of Class A common stock outstanding - diluted |
|
|
57,998 |
|
|
54,875 |
|
|
56,825 |
|
|
47,588 |
Dilutive effect of non-vested restricted shares of Class A common stock |
|
|
3,706 |
|
|
2,710 |
|
|
3,526 |
|
|
1,982 |
Exchange of Class B common stock(3) |
|
|
54,579 |
|
|
55,638 |
|
|
55,450 |
|
|
51,811 |
Adjusted dilutive weighted-average shares outstanding |
|
|
116,283 |
|
|
113,223 |
|
|
115,801 |
|
|
101,381 |
|
|
|
|
|
|
|
|
|
||||
Adjusted Diluted EPS |
|
$ |
0.12 |
|
$ |
0.10 |
|
$ |
1.03 |
|
$ |
0.80 |
|
|
|
|
|
|
|
|
|
||||
Diluted loss per share |
|
$ |
(0.84) |
|
$ |
(0.41) |
|
$ |
(0.74) |
|
$ |
(0.64) |
Effect of exchange of Class B common stock and net loss attributable to noncontrolling interests per share |
|
|
0.05 |
|
|
0.02 |
|
|
0.08 |
|
|
0.07 |
Other adjustments to loss per share |
|
|
0.92 |
|
|
0.50 |
|
|
1.80 |
|
|
1.46 |
Adjusted income taxes per share |
|
|
(0.01) |
|
|
(0.01) |
|
|
(0.11) |
|
|
(0.09) |
Adjusted Diluted EPS |
|
$ |
0.12 |
|
$ |
0.10 |
|
$ |
1.03 |
|
$ |
0.80 |
___________
(1) |
|
Other addbacks to Adjusted Net Income include certain expenses that are considered to be non-recurring or non-operational, including certain recruiting costs, remediation efforts, professional fees, litigation costs and bonuses. |
(2) |
|
Represents corporate income taxes at assumed effective tax rate of |
(3) |
|
Assumes the full exchange of Class B common stock 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:
|
|
For the Three Months
Ended |
|
For the Years
Ended |
||||||||
(in thousands, except percentages) |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
Commissions and fees |
|
$ |
246,044 |
|
$ |
159,200 |
|
$ |
980,720 |
|
$ |
567,290 |
Revenue for Partnerships in the unowned period(1) |
|
|
— |
|
|
10,773 |
|
|
33,768 |
|
|
152,030 |
Pro Forma Revenue |
|
$ |
246,044 |
|
$ |
169,973 |
|
$ |
1,014,488 |
|
$ |
719,320 |
Pro Forma Revenue Growth |
|
$ |
76,071 |
|
$ |
75,567 |
|
$ |
295,168 |
|
$ |
293,071 |
Pro Forma Revenue Growth % |
|
|
45 % |
|
|
80 % |
|
|
41 % |
|
|
69 % |
___________
(1) |
|
The adjustments for the three months ended |
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:
|
|
For the Three Months
|
|
For the Years
|
||||||||
(in thousands, except percentages) |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
Pro forma revenue |
|
$ |
246,044 |
|
$ |
169,973 |
|
$ |
1,014,488 |
|
$ |
719,320 |
|
|
|
|
|
|
|
|
|
||||
Net loss |
|
|
(91,473) |
|
|
(44,385) |
|
|
(76,748) |
|
|
(58,120) |
Net income (loss) for Partnerships in the unowned period(1) |
|
636 |
|
|
5,421 |
|
|
(2,069) |
|
|
29,078 |
|
Pro forma net loss |
|
|
(90,837) |
|
|
(38,964) |
|
|
(78,817) |
|
|
(29,042) |
Adjustments to pro forma net loss: |
|
|
|
|
|
|
|
|
||||
Amortization expense |
|
|
21,826 |
|
|
16,451 |
|
|
88,537 |
|
|
68,805 |
Interest expense, net |
|
|
24,688 |
|
|
9,333 |
|
|
72,789 |
|
|
39,852 |
Share-based compensation |
|
|
21,324 |
|
|
7,272 |
|
|
47,389 |
|
|
19,193 |
|
|
|
5,036 |
|
|
7,956 |
|
|
34,588 |
|
|
19,182 |
Change in fair value of contingent consideration |
|
|
43,116 |
|
|
22,033 |
|
|
32,307 |
|
|
45,196 |
(Gain) loss on interest rate caps |
|
|
(800) |
|
|
(1,036) |
|
|
(26,220) |
|
|
123 |
Depreciation expense |
|
|
1,311 |
|
|
868 |
|
|
4,620 |
|
|
2,788 |
Severance |
|
|
120 |
|
|
390 |
|
|
1,255 |
|
|
871 |
Income tax provision |
|
|
715 |
|
|
19 |
|
|
715 |
|
|
19 |
Other |
|
|
12,691 |
|
|
3,816 |
|
|
25,774 |
|
|
8,038 |
Pro Forma Adjusted EBITDA |
|
$ |
39,190 |
|
$ |
28,138 |
|
$ |
202,937 |
|
$ |
175,025 |
Pro Forma Adjusted EBITDA Margin |
|
|
16 % |
|
|
17 % |
|
|
20 % |
|
|
24 % |
___________
(1) |
|
The adjustments for the three months ended |
Adjusted Net Cash Provided by Operating Activities (“Free Cash Flow”)
The following table reconciles free cash flow to net cash provided by (used in) operating activities, which we consider to be the most directly comparable GAAP financial measure:
|
|
For the Years
Ended |
||||
(in thousands) |
|
|
2022 |
|
|
2021 |
Net cash provided by (used in) operating activities |
|
$ |
(2,462) |
|
$ |
40,129 |
Adjustments to net cash provided by (used in) operating activities: |
|
|
|
|
||
Payment of contingent earnout consideration in excess of purchase price accrual |
|
|
49,926 |
|
|
4,825 |
Change in premiums, commissions and fees receivable, net |
|
|
183,006 |
|
|
64,501 |
Change in accounts payable, accrued expenses and other current liabilities |
|
|
(173,362) |
|
|
(55,188) |
Free cash flow |
|
$ |
57,108 |
|
$ |
54,267 |
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 |
Clients |
|
Our insureds |
Colleagues |
|
Our employees |
GAAP |
|
Accounting principles generally accepted in |
|
|
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 |
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230228006271/en/
INVESTOR RELATIONS
(813) 259-8032 | IR@baldwinriskpartners.com
PRESS
(630) 561-5907 | anna.rozenich@baldwinriskpartners.com
Source:
FAQ
What were BRP's Q4 2022 financial highlights?
What was BRP's revenue for the full year 2022?
How did BRP perform in terms of organic revenue growth in 2022?
What was BRP's adjusted EBITDA for Q4 2022?
What were BRP's cash reserves as of December 31, 2022?
