BRP Group, Inc. Announces Fourth Quarter and Full Year 2023 Results
- Strong total revenue growth of 16% year-over-year in Q4 and 24% for the full year 2023
- Organic revenue growth of 15% in Q4 and 19% for the full year
- Adjusted EBITDA grew by 16% in Q4 and 27% for the full year, demonstrating financial stability and growth
- Positive outlook for 2024 with expectations of profitable double-digit organic growth and expanding margins
- None.
Insights
The reported 16% year-over-year growth in total revenues for the fourth quarter, coupled with a 24% growth for the full year, indicates a robust expansion phase for BRP Group. The consistent organic revenue growth, nearing 20%, showcases the company's ability to grow its core business independently of acquisitions. This is a strong signal to investors that the firm is not only expanding its market share but also strengthening its operational efficiencies.
However, the GAAP net loss of $164 million for the full year, contrasted with an adjusted net income of $131.1 million, warrants a closer examination of non-operational factors affecting profitability. Adjusted EBITDA's 27% increase and a 21% margin reflect a healthy cash flow position, which is crucial for future investments and debt management. The liquidity position, evidenced by $116.2 million in cash and cash equivalents and available credit, suggests a solid financial foundation to support ongoing operations and potential strategic initiatives.
The insurance distribution sector is highly competitive and subject to regulatory changes, making BRP Group's double-digit organic growth particularly noteworthy. This growth trajectory suggests that BRP Group is successfully navigating industry challenges and capturing market demand through its tailored insurance solutions. The emphasis on expense rationalization could indicate a strategic shift towards operational excellence, aiming to enhance profitability.
BRP Group's forward-looking statements about profitable growth and margin expansion in 2024 demonstrate confidence in their business model and market position. Investors should consider the long-term implications of these strategies, such as increased market share and improved financial stability, which could lead to enhanced shareholder value.
The macroeconomic context in which BRP Group operates can have significant implications for its performance. Factors such as interest rate fluctuations, economic cycles and regulatory changes in the insurance industry can impact consumer and commercial client behavior. The company's ability to sustain organic growth amidst such conditions suggests resilience and adaptability.
BRP Group's growth and margin expansion plans may benefit from a stable or growing economy, as businesses and individuals are more likely to invest in insurance products. However, economic downturns could pose risks to revenue streams. The company's robust liquidity position provides a buffer against potential economic headwinds, offering flexibility to navigate uncertain markets.
- Fourth Quarter 2023 Total Revenues Grew
- Full Year 2023 Total Revenues Grew
- Fourth Quarter 2023 Organic Revenue Growth(1) of
- Full Year 2023 Organic Revenue Growth of
FOURTH QUARTER 2023 HIGHLIGHTS
-
Total revenues increased
16% year-over-year to$284.6 million -
Organic Revenue Growth of
15% year-over-year -
GAAP net loss of
$62.5 million $0.56 -
Adjusted Net Income(2) of
$16.2 million $0.14 -
Adjusted EBITDA(3) grew
16% year-over-year to$45.6 million -
Adjusted EBITDA Margin(3) of
16%
“We capped 2023 with another solid quarter of double-digit organic growth, leading us to generate full year organic revenue growth of nearly
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2023, cash and cash equivalents were
FULL YEAR 2023 HIGHLIGHTS
-
Total revenues increased
24% year-over-year to$1.2 billion -
Organic Revenue Growth of
19% year-over-year -
GAAP net loss of
$164.0 million $1.50 -
Adjusted Net Income of
$131.1 million $1.12 -
Adjusted EBITDA grew
27% year-over-year to$250.2 million -
Adjusted EBITDA Margin of
21%
WEBCAST AND CONFERENCE CALL INFORMATION
BRP Group will host a webcast and conference call to discuss fourth 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, 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, technology and capital to drive our organic and inorganic growth. BRP Group represents over two million Clients across
FOOTNOTES
(1) |
Organic Revenue for the three and twelve months ended December 31, 2022 used to calculate Organic Revenue Growth for the three and twelve months ended December 31, 2023 was |
|
(2) |
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. |
|
(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. |
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, 2023 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, including those risks and other factors relevant to the business, financial condition and results of operations of BRP Group. 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) |
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||||||
Revenues: |
|
|
|
|
|
|
|
|||||||||
Commissions and fees |
$ |
282,522 |
|
|
$ |
246,044 |
|
|
$ |
1,211,828 |
|
|
$ |
980,720 |
|
|
Investment income |
|
2,126 |
|
|
|
— |
|
|
|
6,727 |
|
|
|
— |
|
|
Total revenues |
|
284,648 |
|
|
|
246,044 |
|
|
|
1,218,555 |
|
|
|
980,720 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating expenses: |
|
|
|
|
|
|
|
|||||||||
Commissions, employee compensation and benefits |
|
234,695 |
|
|
|
196,927 |
|
|
|
911,354 |
|
|
|
719,445 |
|
|
Other operating expenses |
|
49,013 |
|
|
|
49,284 |
|
|
|
190,267 |
|
|
|
173,708 |
|
|
Amortization expense |
|
23,199 |
|
|
|
21,826 |
|
|
|
92,704 |
|
|
|
81,738 |
|
|
Change in fair value of contingent consideration |
|
6,018 |
|
|
|
43,116 |
|
|
|
61,083 |
|
|
|
32,307 |
|
|
Depreciation expense |
|
1,448 |
|
|
|
1,311 |
|
|
|
5,698 |
|
|
|
4,620 |
|
|
Total operating expenses |
|
314,373 |
|
|
|
312,464 |
|
|
|
1,261,106 |
|
|
|
1,011,818 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating loss |
|
(29,725 |
) |
|
|
(66,420 |
) |
|
|
(42,551 |
) |
|
|
(31,098 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
Other income (expense): |
|
|
|
|
|
|
|
|||||||||
Interest expense, net |
|
(31,865 |
) |
|
|
(25,324 |
) |
|
|
(119,465 |
) |
|
|
(71,072 |
) |
|
Other income (expense), net |
|
(525 |
) |
|
|
986 |
|
|
|
(718 |
) |
|
|
26,137 |
|
|
Total other expense |
|
(32,390 |
) |
|
|
(24,338 |
) |
|
|
(120,183 |
) |
|
|
(44,935 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes |
|
(62,115 |
) |
|
|
(90,758 |
) |
|
|
(162,734 |
) |
|
|
(76,033 |
) |
|
Income tax expense |
|
381 |
|
|
|
715 |
|
|
|
1,285 |
|
|
|
715 |
|
|
Net loss |
|
(62,496 |
) |
|
|
(91,473 |
) |
|
|
(164,019 |
) |
|
|
(76,748 |
) |
|
Less: net loss attributable to noncontrolling interests |
|
(28,013 |
) |
|
|
(42,983 |
) |
|
|
(73,878 |
) |
|
|
(34,976 |
) |
|
Net loss attributable to BRP Group |
$ |
(34,483 |
) |
|
$ |
(48,490 |
) |
|
$ |
(90,141 |
) |
|
$ |
(41,772 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss |
$ |
(62,496 |
) |
|
$ |
(91,473 |
) |
|
$ |
(164,019 |
) |
|
$ |
(76,748 |
) |
|
Comprehensive loss attributable to noncontrolling interests |
|
(28,013 |
) |
|
|
(42,983 |
) |
|
|
(73,878 |
) |
|
|
(34,976 |
) |
|
Comprehensive loss attributable to BRP Group |
|
(34,483 |
) |
|
|
(48,490 |
) |
|
|
(90,141 |
) |
|
|
(41,772 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
Basic and diluted loss per share |
$ |
(0.56 |
) |
|
$ |
(0.84 |
) |
|
$ |
(1.50 |
) |
|
$ |
(0.74 |
) |
|
Basic and diluted weighted-average shares of Class A common stock outstanding |
|
61,153,612 |
|
|
|
57,997,896 |
|
|
|
60,134,776 |
|
|
|
56,825,348 |
|
|
BRP GROUP, INC. |
||||||||
Consolidated Balance Sheets |
||||||||
|
|
December 31, |
||||||
(in thousands, except share and per share data) |
|
2023 |
|
2022 |
||||
Assets |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
116,209 |
|
|
$ |
118,090 |
|
Restricted cash |
|
|
104,824 |
|
|
|
112,381 |
|
Premiums, commissions and fees receivable, net |
|
|
627,791 |
|
|
|
531,992 |
|
Prepaid expenses and other current assets |
|
|
12,730 |
|
|
|
9,936 |
|
Assets held for sale |
|
|
64,351 |
|
|
|
— |
|
Total current assets |
|
|
925,905 |
|
|
|
772,399 |
|
Property and equipment, net |
|
|
22,713 |
|
|
|
25,405 |
|
Right-of-use assets |
|
|
85,473 |
|
|
|
96,465 |
|
Other assets |
|
|
38,134 |
|
|
|
45,935 |
|
Intangible assets, net |
|
|
1,017,343 |
|
|
|
1,099,918 |
|
Goodwill |
|
|
1,412,369 |
|
|
|
1,422,060 |
|
Total assets |
|
$ |
3,501,937 |
|
|
$ |
3,462,182 |
|
Liabilities, Mezzanine Equity and Stockholders’ Equity |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Premiums payable to insurance companies |
|
$ |
555,569 |
|
|
$ |
471,294 |
|
Producer commissions payable |
|
|
64,304 |
|
|
|
53,927 |
|
Accrued expenses and other current liabilities |
|
|
152,954 |
|
|
|
125,743 |
|
Related party notes payable |
|
|
1,525 |
|
|
|
1,525 |
|
Current portion of contingent earnout liabilities |
|
|
215,157 |
|
|
|
46,717 |
|
Liabilities held for sale |
|
|
43,931 |
|
|
|
— |
|
Total current liabilities |
|
|
1,033,440 |
|
|
|
699,206 |
|
Revolving line of credit |
|
|
341,000 |
|
|
|
505,000 |
|
Long-term debt, less current portion |
|
|
968,183 |
|
|
|
809,862 |
|
Contingent earnout liabilities, less current portion |
|
|
61,310 |
|
|
|
220,219 |
|
Operating lease liabilities, less current portion |
|
|
78,999 |
|
|
|
87,692 |
|
Other liabilities |
|
|
123 |
|
|
|
164 |
|
Total liabilities |
|
|
2,483,055 |
|
|
|
2,322,143 |
|
Commitments and contingencies |
|
|
|
|
||||
Mezzanine equity: |
|
|
|
|
||||
Redeemable noncontrolling interest |
|
|
394 |
|
|
|
487 |
|
Stockholders’ equity: |
|
|
|
|
||||
Class A common stock, par value |
|
|
641 |
|
|
|
614 |
|
Class B common stock, par value |
|
|
5 |
|
|
|
5 |
|
Additional paid-in capital |
|
|
746,671 |
|
|
|
704,291 |
|
Accumulated deficit |
|
|
(186,905 |
) |
|
|
(96,764 |
) |
Stockholder notes receivable |
|
|
— |
|
|
|
(42 |
) |
Total stockholders’ equity attributable to BRP Group |
|
|
560,412 |
|
|
|
608,104 |
|
Noncontrolling interest |
|
|
458,076 |
|
|
|
531,448 |
|
Total stockholders’ equity |
|
|
1,018,488 |
|
|
|
1,139,552 |
|
Total liabilities, mezzanine equity and stockholders’ equity |
|
$ |
3,501,937 |
|
|
$ |
3,462,182 |
|
BRP GROUP, INC. |
||||||||
Consolidated Statements of Cash Flows |
||||||||
|
|
For the Years Ended December 31, |
||||||
(in thousands) |
|
2023 |
|
2022 |
||||
Cash flows from operating activities: |
|
|
|
|
||||
Net loss |
|
$ |
(164,019 |
) |
|
$ |
(76,748 |
) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
98,402 |
|
|
|
86,358 |
|
Change in fair value of contingent consideration |
|
|
61,083 |
|
|
|
32,307 |
|
Share-based compensation expense |
|
|
60,008 |
|
|
|
47,389 |
|
Payment of contingent earnout consideration in excess of purchase price accrual |
|
|
(24,326 |
) |
|
|
(49,926 |
) |
Amortization of deferred financing costs |
|
|
5,129 |
|
|
|
5,120 |
|
(Gain) loss on interest rate caps |
|
|
1,670 |
|
|
|
(26,220 |
) |
Other loss |
|
|
361 |
|
|
|
135 |
|
Changes in operating assets and liabilities, net of effect of acquisitions: |
|
|
|
|
||||
Premiums, commissions and fees receivable, net |
|
|
(132,269 |
) |
|
|
(183,006 |
) |
Prepaid expenses and other current assets |
|
|
(6,849 |
) |
|
|
(10,383 |
) |
Right-of-use assets |
|
|
17,963 |
|
|
|
(13,492 |
) |
Accounts payable, accrued expenses and other current liabilities |
|
|
140,675 |
|
|
|
173,362 |
|
Operating lease liabilities |
|
|
(13,184 |
) |
|
|
16,531 |
|
Other liabilities |
|
|
— |
|
|
|
(3,889 |
) |
Net cash provided by (used in) operating activities |
|
|
44,644 |
|
|
|
(2,462 |
) |
Cash flows from investing activities: |
|
|
|
|
||||
Capital expenditures |
|
|
(21,376 |
) |
|
|
(21,979 |
) |
Proceeds from the sale of assets |
|
|
3,259 |
|
|
|
— |
|
Cash consideration paid for asset acquisitions |
|
|
(2,118 |
) |
|
|
(3,356 |
) |
Investments in and loans to business ventures |
|
|
(1,687 |
) |
|
|
(1,103 |
) |
Cash consideration paid for business combinations, net of cash received |
|
|
— |
|
|
|
(387,919 |
) |
Net cash used in investing activities |
|
|
(21,922 |
) |
|
|
(414,357 |
) |
Cash flows from financing activities: |
|
|
|
|
||||
Payment of contingent earnout consideration up to amount of purchase price accrual |
|
|
(27,949 |
) |
|
|
(48,309 |
) |
Proceeds from revolving line of credit |
|
|
111,000 |
|
|
|
512,000 |
|
Payments on revolving line of credit |
|
|
(275,000 |
) |
|
|
(42,000 |
) |
Proceeds from long-term debt |
|
|
170,000 |
|
|
|
— |
|
Payments on long-term debt |
|
|
(9,376 |
) |
|
|
(8,509 |
) |
Payments of debt issuance costs |
|
|
(4,998 |
) |
|
|
(1,821 |
) |
Proceeds from the sale and settlement of interest rate caps |
|
|
10,918 |
|
|
|
21,246 |
|
Purchase of interest rate caps |
|
|
— |
|
|
|
(3,838 |
) |
Tax distributions to BRP's LLC Members |
|
|
(482 |
) |
|
|
(9,393 |
) |
Proceeds from repayment of stockholder notes receivable |
|
|
42 |
|
|
|
177 |
|
Distributions to variable interest entities |
|
|
(385 |
) |
|
|
— |
|
Net cash provided by (used in) financing activities |
|
|
(26,230 |
) |
|
|
419,553 |
|
Net increase (decrease) in cash and cash equivalents and restricted cash |
|
|
(3,508 |
) |
|
|
2,734 |
|
Cash and cash equivalents and restricted cash at beginning of year |
|
|
230,471 |
|
|
|
227,737 |
|
Cash and cash equivalents and restricted cash at end of year |
|
$ |
226,963 |
|
|
$ |
230,471 |
|
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 total revenues. 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 from Organic Revenue 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 income and 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 on a one-for-one basis. Adjusted Diluted EPS is calculated as Adjusted Net Income divided by adjusted diluted 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, Organic Revenue Growth, Adjusted Diluted EPS and free cash flow 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 loss, which we consider to be the most directly comparable GAAP financial measure:
|
|
For the Three Months Ended December 31, |
|
For the Years Ended December 31, |
||||||||||||
(in thousands, except percentages) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Revenues |
|
$ |
284,648 |
|
|
$ |
246,044 |
|
|
$ |
1,218,555 |
|
|
$ |
980,720 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss |
|
$ |
(62,496 |
) |
|
$ |
(91,473 |
) |
|
$ |
(164,019 |
) |
|
$ |
(76,748 |
) |
Adjustments to net loss: |
|
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
|
31,865 |
|
|
|
25,324 |
|
|
|
119,465 |
|
|
|
71,072 |
|
Amortization expense |
|
|
23,199 |
|
|
|
21,826 |
|
|
|
92,704 |
|
|
|
81,738 |
|
Change in fair value of contingent consideration |
|
|
6,018 |
|
|
|
43,116 |
|
|
|
61,083 |
|
|
|
32,307 |
|
Share-based compensation |
|
|
9,585 |
|
|
|
21,324 |
|
|
|
56,222 |
|
|
|
47,389 |
|
Transaction-related Partnership and integration expenses |
|
|
10,741 |
|
|
|
5,036 |
|
|
|
28,748 |
|
|
|
34,588 |
|
Severance |
|
|
15,141 |
|
|
|
120 |
|
|
|
18,514 |
|
|
|
1,255 |
|
Depreciation expense |
|
|
1,448 |
|
|
|
1,311 |
|
|
|
5,698 |
|
|
|
4,620 |
|
(Gain) loss on interest rate caps |
|
|
1,181 |
|
|
|
(800 |
) |
|
|
1,670 |
|
|
|
(26,220 |
) |
Income tax provision |
|
|
381 |
|
|
|
715 |
|
|
|
1,285 |
|
|
|
715 |
|
Other(1) |
|
|
8,545 |
|
|
|
12,691 |
|
|
|
28,834 |
|
|
|
25,774 |
|
Adjusted EBITDA |
|
$ |
45,608 |
|
|
$ |
39,190 |
|
|
$ |
250,204 |
|
|
$ |
196,490 |
|
Adjusted EBITDA Margin |
|
|
16 |
% |
|
|
16 |
% |
|
|
21 |
% |
|
|
20 |
% |
__________ |
||
(1) |
Other addbacks to Adjusted EBITDA include certain income and 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 December 31, |
|
For the Years Ended December 31, |
||||||||||||
(in thousands, except percentages) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Commissions and fees |
|
$ |
282,522 |
|
|
$ |
246,044 |
|
|
$ |
1,211,828 |
|
|
$ |
980,720 |
|
Partnership commissions and fees(1) |
|
|
— |
|
|
|
(46,059 |
) |
|
|
(44,696 |
) |
|
|
(280,660 |
) |
Organic Revenue |
|
$ |
282,522 |
|
|
$ |
199,985 |
|
|
$ |
1,167,132 |
|
|
$ |
700,060 |
|
Organic Revenue Growth(2) |
|
$ |
36,742 |
|
|
$ |
40,785 |
|
|
$ |
187,213 |
|
|
$ |
132,610 |
|
Organic Revenue Growth %(2) |
|
|
15 |
% |
|
|
26 |
% |
|
|
19 |
% |
|
|
23 |
% |
__________ |
||
(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 December 31, 2022 used to calculate Organic Revenue Growth for the three and twelve months ended December 31, 2023 was |
|
Adjusted Net Income and Adjusted Diluted EPS
The following table reconciles Adjusted Net Income to net loss attributable to BRP Group and reconciles Adjusted Diluted EPS to diluted loss per share, which we consider to be the most directly comparable GAAP financial measures:
|
|
For the Three Months Ended December 31, |
|
For the Years Ended December 31, |
||||||||||||
(in thousands, except per share data) |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net loss attributable to BRP Group |
|
$ |
(34,483 |
) |
|
$ |
(48,490 |
) |
|
$ |
(90,141 |
) |
|
$ |
(41,772 |
) |
Net loss attributable to noncontrolling interests |
|
|
(28,013 |
) |
|
|
(42,983 |
) |
|
|
(73,878 |
) |
|
|
(34,976 |
) |
Amortization expense |
|
|
23,199 |
|
|
|
21,826 |
|
|
|
92,704 |
|
|
|
81,738 |
|
Change in fair value of contingent consideration |
|
|
6,018 |
|
|
|
43,116 |
|
|
|
61,083 |
|
|
|
32,307 |
|
Share-based compensation |
|
|
9,585 |
|
|
|
21,324 |
|
|
|
56,222 |
|
|
|
47,389 |
|
Transaction-related Partnership and integration expenses |
|
|
10,741 |
|
|
|
5,036 |
|
|
|
28,748 |
|
|
|
34,588 |
|
Severance |
|
|
15,141 |
|
|
|
120 |
|
|
|
18,514 |
|
|
|
1,255 |
|
(Gain) loss on interest rate caps, net of cash settlements |
|
|
4,206 |
|
|
|
859 |
|
|
|
12,588 |
|
|
|
(24,012 |
) |
Depreciation |
|
|
1,448 |
|
|
|
1,311 |
|
|
|
5,698 |
|
|
|
4,620 |
|
Amortization of deferred financing costs |
|
|
1,552 |
|
|
|
1,226 |
|
|
|
5,129 |
|
|
|
5,120 |
|
Other(1) |
|
|
8,545 |
|
|
|
12,691 |
|
|
|
28,834 |
|
|
|
25,774 |
|
Adjusted pre-tax income |
|
|
17,939 |
|
|
|
16,036 |
|
|
|
145,501 |
|
|
|
132,031 |
|
Adjusted income taxes(2) |
|
|
1,776 |
|
|
|
1,587 |
|
|
|
14,405 |
|
|
|
13,071 |
|
Adjusted Net Income |
|
$ |
16,163 |
|
|
$ |
14,449 |
|
|
$ |
131,096 |
|
|
$ |
118,960 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares of Class A common stock outstanding - diluted |
|
|
61,154 |
|
|
|
57,998 |
|
|
|
60,135 |
|
|
|
56,825 |
|
Dilutive effect of unvested stock awards |
|
|
3,709 |
|
|
|
3,706 |
|
|
|
3,874 |
|
|
|
3,526 |
|
Exchange of Class B common stock(3) |
|
|
52,434 |
|
|
|
54,579 |
|
|
|
53,132 |
|
|
|
55,450 |
|
Adjusted diluted weighted-average shares outstanding |
|
|
117,297 |
|
|
|
116,283 |
|
|
|
117,141 |
|
|
|
115,801 |
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted Diluted EPS |
|
$ |
0.14 |
|
|
$ |
0.12 |
|
|
$ |
1.12 |
|
|
$ |
1.03 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted loss per share |
|
$ |
(0.56 |
) |
|
$ |
(0.84 |
) |
|
$ |
(1.50 |
) |
|
$ |
(0.74 |
) |
Effect of exchange of Class B common stock and net loss attributable to noncontrolling interests per share |
|
|
0.03 |
|
|
|
0.05 |
|
|
|
0.10 |
|
|
|
0.08 |
|
Other adjustments to loss per share |
|
|
0.69 |
|
|
|
0.92 |
|
|
|
2.64 |
|
|
|
1.80 |
|
Adjusted income taxes per share |
|
|
(0.02 |
) |
|
|
(0.01 |
) |
|
|
(0.12 |
) |
|
|
(0.11 |
) |
Adjusted Diluted EPS |
|
$ |
0.14 |
|
|
$ |
0.12 |
|
|
$ |
1.12 |
|
|
$ |
1.03 |
|
___________ |
||
(1) |
Other addbacks to Adjusted Net Income include certain income and 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 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. |
|
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 December 31, |
||||||
(in thousands) |
|
2023 |
|
2022 |
||||
Net cash provided by (used in) operating activities |
|
$ |
44,644 |
|
|
$ |
(2,462 |
) |
Adjustments to net cash provided by (used in) operating activities: |
|
|
|
|
||||
Change in premiums, commissions and fees receivable, net |
|
|
132,269 |
|
|
|
183,006 |
|
Change in accounts payable, accrued expenses and other current liabilities |
|
|
(140,675 |
) |
|
|
(173,362 |
) |
Payment of contingent earnout consideration in excess of purchase price accrual |
|
|
24,326 |
|
|
|
49,926 |
|
Free cash flow |
|
$ |
60,564 |
|
|
$ |
57,108 |
|
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 |
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 |
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240228050048/en/
INVESTOR RELATIONS
Bonnie Bishop, Executive Director, Investor Relations
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
Source: BRP Group, Inc.
FAQ
What was BRP Group's total revenue growth in the fourth quarter of 2023?
What was the organic revenue growth for BRP Group in 2023?
How did BRP Group's Adjusted EBITDA perform in the fourth quarter of 2023?
What is the outlook for BRP Group in 2024 based on the PR?
