The Baldwin Group Announces Third Quarter 2024 Results
The Baldwin Group (NASDAQ: BWIN) reported Q3 2024 results with total revenue growing 11% to $338.9 million and organic revenue growth of 14%. Despite posting a GAAP net loss of $14.5 million ($0.13 per share), the company showed strong adjusted metrics with adjusted diluted EPS growing 14% to $0.33. Adjusted EBITDA increased 14% to $72.8 million with a margin of 21.5%, expanding 60 basis points year-over-year. For the nine months of 2024, revenue reached $1.1 billion, up 13%, with organic growth of 16%. The company maintained strong liquidity with $181.8 million in cash and $600.0 million available under its credit facility.
Il Baldwin Group (NASDAQ: BWIN) ha riportato i risultati del terzo trimestre 2024, con un incremento del fatturato totale del 11% a 338,9 milioni di dollari e una crescita del fatturato organico del 14%. Nonostante un perdita netta GAAP di 14,5 milioni di dollari (0,13 dollari per azione), l'azienda ha mostrato metriche corrette molto solide, con un utile per azione diluito corretto che è cresciuto del 14% a $0,33. L’EBITDA corretto è aumentato del 14% a $72,8 milioni, con un margine del 21,5%, che si espande di 60 punti base anno su anno. Nei nove mesi del 2024, il fatturato ha raggiunto 1,1 miliardi di dollari, in aumento del 13%, con una crescita organica del 16%. L'azienda ha mantenuto una forte liquidità con 181,8 milioni di dollari in contanti e 600,0 milioni di dollari disponibili attraverso la sua linea di credito.
El Grupo Baldwin (NASDAQ: BWIN) informó los resultados del tercer trimestre de 2024, con un aumento del 11% en los ingresos totales a 338,9 millones de dólares y un crecimiento de ingresos orgánicos del 14%. A pesar de reportar una pérdida neta GAAP de 14,5 millones de dólares (0,13 dólares por acción), la compañía mostró métricas ajustadas sólidas, con un EPS diluido ajustado que creció un 14% a 0,33 dólares. El EBITDA ajustado aumentó un 14% a 72,8 millones de dólares, con un margen del 21,5%, ampliándose en 60 puntos básicos en comparación con el año anterior. Durante los nueve meses de 2024, los ingresos alcanzaron 1,1 mil millones de dólares, un aumento del 13%, con un crecimiento orgánico del 16%. La compañía mantuvo una fuerte liquidez con 181,8 millones de dólares en efectivo y 600,0 millones de dólares disponibles bajo su línea de crédito.
발드윈 그룹 (NASDAQ: BWIN)은 2024년 3분기 실적을 보고했으며, 총 수익이 11% 증가하여 3억 3,890만 달러에 이르렀고, 유기적 수익 성장률이 14%에 달했습니다. GAAP 기준으로 1,450만 달러(주당 0.13달러)의 순손실을 기록했음에도 불구하고, 회사는 조정된 메트릭에서 견고한 성과를 보여주었으며, 조정된 희석 주당순이익(EPS)은 14% 증가하여 0.33달러에 달했습니다. 조정된 EBITDA는 14% 증가하여 7,280만 달러를 기록했으며, 마진은 21.5%로 전년 대비 60베이시스 포인트 확대되었습니다. 2024년 9개월 동안 매출은 11억 달러에 달해 13% 증가했으며, 유기적 성장률은 16%에 이릅니다. 회사는 1억 8,180만 달러의 현금과 6억 달러의 신용 시설 예산으로 강력한 유동성을 유지했습니다.
Le Groupe Baldwin (NASDAQ: BWIN) a annoncé les résultats du troisième trimestre 2024, avec un chiffre d'affaires total en hausse de 11% à 338,9 millions de dollars et une croissance organique des revenus de 14%. Bien qu'une perte nette GAAP de 14,5 millions de dollars (0,13 dollar par action) ait été enregistrée, la société a montré des indicateurs ajustés solides, avec un BPA ajusté dilué en hausse de 14% à 0,33 dollar. EBITDA ajusté a augmenté de 14% pour atteindre 72,8 millions de dollars, avec une marge de 21,5%, s'élargissant de 60 points de base par rapport à l'année précédente. Au cours des neuf premiers mois de 2024, le chiffre d'affaires a atteint 1,1 milliard de dollars, en hausse de 13%, avec une croissance organique de 16%. La société a maintenu une solide liquidité avec 181,8 millions de dollars en espèces et 600,0 millions de dollars disponibles dans le cadre de sa ligne de crédit.
Die Baldwin Group (NASDAQ: BWIN) hat die Ergebnisse für das 3. Quartal 2024 veröffentlicht, mit einem Gesamtumsatzwachstum von 11% auf 338,9 Millionen US-Dollar und einem organischen Umsatzwachstum von 14%. Trotz eines GAAP-Nettoverlusts von 14,5 Millionen US-Dollar (0,13 US-Dollar pro Aktie) zeigte das Unternehmen starke angepasste Kennzahlen, mit einem um 14% gesteigerten bereinigten verwässerten EPS von 0,33 US-Dollar. Bereinigtes EBITDA stieg um 14% auf 72,8 Millionen US-Dollar, mit einer Marge von 21,5%, die um 60 Basispunkte im Jahresvergleich zugenommen hat. In den neun Monaten des Jahres 2024 erreichte der Umsatz 1,1 Milliarden US-Dollar, was einem Anstieg von 13% entspricht, mit einem organischen Wachstum von 16%. Das Unternehmen behielt eine starke Liquidität mit 181,8 Millionen US-Dollar in bar und 600,0 Millionen US-Dollar, die über seine Kreditlinie verfügbar sind.
- Revenue growth of 11% to $338.9 million
- Strong organic revenue growth of 14%
- Adjusted EBITDA growth of 14% to $72.8 million
- Adjusted EBITDA margin expansion of 60 basis points to 21.5%
- Adjusted free cash flow growth of 31% to $99.2 million
- Available credit facility of $600 million
- GAAP net loss of $14.5 million in Q3 2024
- Diluted loss per share of $0.13
Insights
Strong quarterly performance with
The company maintains a robust liquidity position with
The margin expansion trend and strong organic growth suggest effective pricing power and market share gains in the insurance distribution sector.
The insurance distribution sector is showing resilience amid market challenges, with Baldwin's performance indicating strong market positioning. The
The expansion in EBITDA margins points to successful operational optimization and pricing power. The company's ability to maintain double-digit growth while improving profitability metrics demonstrates effective scale benefits and strong competitive positioning in the insurance distribution market.
- Total Revenue Growth of
- Net Loss of
- Adjusted EBITDA(3) Growth of
THIRD QUARTER 2024 HIGHLIGHTS
-
Total revenue increased
11% year-over-year to$338.9 million
-
Organic revenue growth of
14% year-over-year
-
GAAP net loss of
$14.5 million $0.13
-
Adjusted net income(2) of
$38.5 million
-
Adjusted diluted EPS grew
14% year-over-year to$0.33
-
Adjusted EBITDA grew
14% year-over-year to$72.8 million
-
Adjusted EBITDA margin of
21.5% , a 60 basis point expansion compared to20.9% in the prior-year period
-
Pro forma adjusted EBITDA grew
18% year-over-year to$72.8 million
“We delivered another strong quarter highlighting the resiliency of our business model in what has been an outstanding year for The Baldwin Group,” said Trevor Baldwin, Chief Executive Officer of The Baldwin Group. “We once again generated industry-leading double-digit organic growth and continued to expand our adjusted EBITDA margin and adjusted free cash flow, driven by a relentless focus on operational effectiveness and efficiency. Our team’s fantastic execution over the past couple years, along with our considerably stronger financial profile, has positioned us exceedingly well for sustained long-term growth and margin expansion.”
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2024, cash and cash equivalents were
NINE MONTHS 2024 RESULTS
-
Revenue increased
13% year-over-year to$1.1 billion
-
Organic revenue growth of
16% year-over-year
-
GAAP net loss of
$6.2 million $0.07
-
Adjusted net income of
$144.8 million
-
Adjusted diluted EPS grew
26% year-over-year to$1.23
-
Adjusted EBITDA grew
22% year-over-year to$249.3 million
-
Adjusted EBITDA margin of
23.5% , a 160 basis point expansion compared to21.9% in the prior-year period
-
Pro forma adjusted EBITDA grew
24% year-over-year to$247.7 million
-
Net cash provided by operating activities of
$85.7 million
-
Adjusted free cash flow(5) grew
31% year-over-year to$99.2 million
WEBCAST AND CONFERENCE CALL INFORMATION
Baldwin will host a webcast and conference call to discuss third quarter 2024 results today at 5:00 PM ET. A live webcast and a slide presentation of the conference call will be available on Baldwin’s investor relations website at ir.baldwin.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.baldwin.com for one year following the call.
ABOUT THE BALDWIN GROUP
The Baldwin Group, the brand name for The Baldwin Insurance Group, Inc. (NASDAQ: BWIN) and its affiliates, is an independent insurance distribution firm providing indispensable expertise and insights that strive to give our Clients the confidence to pursue their purpose, passion and dreams. As a team of dedicated entrepreneurs and insurance professionals, we have come together to help protect the possible for our Clients. We do this by delivering bespoke Client solutions, services, and innovation through our comprehensive and tailored approach to risk management, insurance, and employee benefits. We support our Clients, Colleagues, Insurance Company Partners, and communities through the deployment of vanguard resources and capital to drive our organic and inorganic growth. The Baldwin Group proudly represents more than two million Clients across
FOOTNOTES
(1) Organic revenue for the three and nine months ended September 30, 2023 used to calculate organic revenue growth for the three and nine months ended September 30, 2024 was
(2) Adjusted net income and adjusted diluted EPS are non-GAAP measures. Reconciliation of adjusted net income to net loss attributable to Baldwin and reconciliation of adjusted diluted EPS to diluted loss per share, the most directly comparable GAAP financial measures, is set forth in the reconciliation table accompanying this release.
(3) Adjusted EBITDA and adjusted EBITDA margin are non-GAAP measures. Reconciliation of adjusted EBITDA and adjusted EBITDA margin to net loss, the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release.
(4) Pro Forma Adjusted EBITDA is a non-GAAP measure. Reconciliation of Pro Forma Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release.
(5) Adjusted free cash flow is a non-GAAP measure. Reconciliation of adjusted free cash flow to net cash provided by operating activities, 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 Baldwin’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 Baldwin’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 Baldwin’s Annual Report on Form 10-K for the year ended December 31, 2023 and in Baldwin’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 Baldwin. 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 Baldwin or to persons acting on behalf of Baldwin 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 Baldwin 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.
THE BALDWIN INSURANCE GROUP, INC.
Condensed Consolidated Statements of Comprehensive Loss
(Unaudited) |
||||||||||||||||
|
|
For the Three Months Ended September 30, |
|
For the Nine Months Ended September 30, |
||||||||||||
(in thousands, except share and per share data) |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues: |
|
|
|
|
|
|
|
|
||||||||
Commissions and fees |
|
$ |
335,210 |
|
|
$ |
304,232 |
|
|
$ |
1,050,409 |
|
|
$ |
929,306 |
|
Investment income |
|
|
3,728 |
|
|
|
2,038 |
|
|
|
8,736 |
|
|
|
4,601 |
|
Total revenues |
|
|
338,938 |
|
|
|
306,270 |
|
|
|
1,059,145 |
|
|
|
933,907 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Commissions, employee compensation and benefits |
|
|
247,189 |
|
|
|
220,469 |
|
|
|
753,596 |
|
|
|
676,659 |
|
Other operating expenses |
|
|
48,839 |
|
|
|
47,165 |
|
|
|
141,198 |
|
|
|
141,254 |
|
Amortization expense |
|
|
26,899 |
|
|
|
23,183 |
|
|
|
76,334 |
|
|
|
69,505 |
|
Change in fair value of contingent consideration |
|
|
(952 |
) |
|
|
13,914 |
|
|
|
17,276 |
|
|
|
55,065 |
|
Depreciation expense |
|
|
1,557 |
|
|
|
1,453 |
|
|
|
4,619 |
|
|
|
4,250 |
|
Total operating expenses |
|
|
323,532 |
|
|
|
306,184 |
|
|
|
993,023 |
|
|
|
946,733 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss) |
|
|
15,406 |
|
|
|
86 |
|
|
|
66,122 |
|
|
|
(12,826 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Other income (expense): |
|
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
|
(31,329 |
) |
|
|
(30,580 |
) |
|
|
(94,203 |
) |
|
|
(87,600 |
) |
Gain on divestitures |
|
|
1,809 |
|
|
|
— |
|
|
|
38,953 |
|
|
|
— |
|
Loss on extinguishment and modification of debt |
|
|
(389 |
) |
|
|
— |
|
|
|
(15,068 |
) |
|
|
— |
|
Other income (expense), net |
|
|
28 |
|
|
|
(1,351 |
) |
|
|
105 |
|
|
|
(193 |
) |
Total other expense, net |
|
|
(29,881 |
) |
|
|
(31,931 |
) |
|
|
(70,213 |
) |
|
|
(87,793 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Loss before income taxes |
|
|
(14,475 |
) |
|
|
(31,845 |
) |
|
|
(4,091 |
) |
|
|
(100,619 |
) |
Income tax expense |
|
|
— |
|
|
|
161 |
|
|
|
2,151 |
|
|
|
904 |
|
Net loss |
|
|
(14,475 |
) |
|
|
(32,006 |
) |
|
|
(6,242 |
) |
|
|
(101,523 |
) |
Less: net loss attributable to noncontrolling interests |
|
|
(6,098 |
) |
|
|
(14,377 |
) |
|
|
(1,886 |
) |
|
|
(45,865 |
) |
Net loss attributable to Baldwin |
|
$ |
(8,377 |
) |
|
$ |
(17,629 |
) |
|
$ |
(4,356 |
) |
|
$ |
(55,658 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive loss |
|
$ |
(14,475 |
) |
|
$ |
(32,006 |
) |
|
$ |
(6,242 |
) |
|
$ |
(101,523 |
) |
Comprehensive loss attributable to noncontrolling interests |
|
|
(6,098 |
) |
|
|
(14,377 |
) |
|
|
(1,886 |
) |
|
|
(45,865 |
) |
Comprehensive loss attributable to Baldwin |
|
|
(8,377 |
) |
|
|
(17,629 |
) |
|
|
(4,356 |
) |
|
|
(55,658 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted loss per share |
|
$ |
(0.13 |
) |
|
$ |
(0.29 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.93 |
) |
Basic and diluted weighted-average shares of Class A common stock outstanding |
|
|
64,011,515 |
|
|
|
60,549,080 |
|
|
|
63,001,125 |
|
|
|
59,791,435 |
|
THE BALDWIN INSURANCE GROUP, INC.
Condensed Consolidated Balance Sheets
(Unaudited) |
||||||||
(in thousands, except share and per share data) |
|
September 30, 2024 |
|
December 31, 2023 |
||||
Assets |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
181,759 |
|
|
$ |
116,209 |
|
Restricted cash |
|
|
162,957 |
|
|
|
104,824 |
|
Premiums, commissions and fees receivable, net |
|
|
656,111 |
|
|
|
627,791 |
|
Prepaid expenses and other current assets |
|
|
13,454 |
|
|
|
12,730 |
|
Assets held for sale |
|
|
— |
|
|
|
64,351 |
|
Total current assets |
|
|
1,014,281 |
|
|
|
925,905 |
|
Property and equipment, net |
|
|
21,263 |
|
|
|
22,713 |
|
Right-of-use assets |
|
|
74,960 |
|
|
|
85,473 |
|
Other assets |
|
|
47,356 |
|
|
|
38,134 |
|
Intangible assets, net |
|
|
968,811 |
|
|
|
1,017,343 |
|
Goodwill |
|
|
1,412,369 |
|
|
|
1,412,369 |
|
Total assets |
|
$ |
3,539,040 |
|
|
$ |
3,501,937 |
|
Liabilities, Mezzanine Equity and Stockholders’ Equity |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Premiums payable to insurance companies |
|
$ |
589,157 |
|
|
$ |
555,569 |
|
Producer commissions payable |
|
|
71,179 |
|
|
|
64,304 |
|
Accrued expenses and other current liabilities |
|
|
164,302 |
|
|
|
152,954 |
|
Related party notes payable |
|
|
5,635 |
|
|
|
1,525 |
|
Current portion of contingent earnout liabilities |
|
|
201,281 |
|
|
|
215,157 |
|
Liabilities held for sale |
|
|
— |
|
|
|
43,931 |
|
Total current liabilities |
|
|
1,031,554 |
|
|
|
1,033,440 |
|
Revolving line of credit |
|
|
— |
|
|
|
341,000 |
|
Long-term debt, less current portion |
|
|
1,399,010 |
|
|
|
968,183 |
|
Contingent earnout liabilities, less current portion |
|
|
2,509 |
|
|
|
61,310 |
|
Operating lease liabilities, less current portion |
|
|
69,235 |
|
|
|
78,999 |
|
Other liabilities |
|
|
123 |
|
|
|
123 |
|
Total liabilities |
|
|
2,502,431 |
|
|
|
2,483,055 |
|
Commitments and contingencies |
|
|
|
|
||||
Mezzanine equity: |
|
|
|
|
||||
Redeemable noncontrolling interest |
|
|
375 |
|
|
|
394 |
|
Stockholders’ equity: |
|
|
|
|
||||
Class A common stock, par value |
|
|
675 |
|
|
|
641 |
|
Class B common stock, par value |
|
|
5 |
|
|
|
5 |
|
Additional paid-in capital |
|
|
785,931 |
|
|
|
746,671 |
|
Accumulated deficit |
|
|
(191,261 |
) |
|
|
(186,905 |
) |
Total stockholders’ equity attributable to Baldwin |
|
|
595,350 |
|
|
|
560,412 |
|
Noncontrolling interest |
|
|
440,884 |
|
|
|
458,076 |
|
Total stockholders’ equity |
|
|
1,036,234 |
|
|
|
1,018,488 |
|
Total liabilities, mezzanine equity and stockholders’ equity |
|
$ |
3,539,040 |
|
|
$ |
3,501,937 |
|
THE BALDWIN INSURANCE GROUP, INC. Condensed Consolidated Statements of Cash Flows (Unaudited) |
||||||||
|
|
For the Nine Months Ended September 30, |
||||||
(in thousands) |
|
|
2024 |
|
|
|
2023 |
|
Cash flows from operating activities: |
|
|
|
|
||||
Net loss |
|
$ |
(6,242 |
) |
|
$ |
(101,523 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
80,953 |
|
|
|
73,755 |
|
Change in fair value of contingent consideration |
|
|
17,276 |
|
|
|
55,065 |
|
Share-based compensation expense |
|
|
46,764 |
|
|
|
46,637 |
|
Payment of contingent earnout consideration in excess of purchase price accrual |
|
|
(21,145 |
) |
|
|
(22,639 |
) |
Gain on divestitures |
|
|
(38,953 |
) |
|
|
— |
|
Amortization of deferred financing costs |
|
|
4,419 |
|
|
|
3,577 |
|
Loss on extinguishment of debt |
|
|
1,034 |
|
|
|
— |
|
Loss on interest rate caps |
|
|
244 |
|
|
|
489 |
|
Other loss |
|
|
346 |
|
|
|
797 |
|
Changes in operating assets and liabilities: |
|
|
|
|
||||
Premiums, commissions and fees receivable, net |
|
|
(27,777 |
) |
|
|
(63,367 |
) |
Prepaid expenses and other current assets |
|
|
(7,980 |
) |
|
|
(6,294 |
) |
Right-of-use assets |
|
|
12,562 |
|
|
|
7,671 |
|
Accounts payable, accrued expenses and other current liabilities |
|
|
35,395 |
|
|
|
32,793 |
|
Operating lease liabilities |
|
|
(11,188 |
) |
|
|
(4,162 |
) |
Net cash provided by operating activities |
|
|
85,708 |
|
|
|
22,799 |
|
Cash flows from investing activities: |
|
|
|
|
||||
Proceeds from divestitures, net of cash transferred |
|
|
56,977 |
|
|
|
— |
|
Capital expenditures |
|
|
(28,897 |
) |
|
|
(14,157 |
) |
Investments in and loans for business ventures |
|
|
(3,703 |
) |
|
|
(673 |
) |
Proceeds from repayment of related party loans |
|
|
1,500 |
|
|
|
— |
|
Cash consideration paid for asset acquisitions |
|
|
(268 |
) |
|
|
(2,118 |
) |
Net cash provided by (used in) investing activities |
|
|
25,609 |
|
|
|
(16,948 |
) |
Cash flows from financing activities: |
|
|
|
|
||||
Payment of contingent earnout consideration up to amount of purchase price accrual |
|
|
(64,698 |
) |
|
|
(26,808 |
) |
Proceeds from revolving line of credit |
|
|
95,000 |
|
|
|
88,000 |
|
Payments on revolving line of credit |
|
|
(436,000 |
) |
|
|
(269,000 |
) |
Proceeds from refinancing of long-term debt |
|
|
1,440,000 |
|
|
|
170,000 |
|
Payments relating to extinguishment and modification of long-term debt |
|
|
(996,177 |
) |
|
|
— |
|
Payments on long-term debt |
|
|
(4,661 |
) |
|
|
(6,815 |
) |
Payments of deferred financing costs |
|
|
(17,988 |
) |
|
|
(4,447 |
) |
Proceeds from the settlement of interest rate caps |
|
|
2,300 |
|
|
|
7,893 |
|
Tax distributions to Baldwin Holdings LLC members |
|
|
(11,076 |
) |
|
|
(408 |
) |
Distributions to variable interest entities |
|
|
(264 |
) |
|
|
(385 |
) |
Proceeds from repayment of stockholder notes receivable |
|
|
— |
|
|
|
42 |
|
Net cash provided by (used in) financing activities |
|
|
6,436 |
|
|
|
(41,928 |
) |
Net increase (decrease) in cash and cash equivalents and restricted cash |
|
|
117,753 |
|
|
|
(36,077 |
) |
Cash and cash equivalents and restricted cash at beginning of period |
|
|
226,963 |
|
|
|
230,471 |
|
Cash and cash equivalents and restricted cash at end of period |
|
$ |
344,716 |
|
|
$ |
194,394 |
|
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 (“adjusted 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), revenues (for 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 Baldwin (for adjusted net income), diluted earnings (loss) per share (for adjusted diluted EPS) or net cash provided by (used in) operating activities (for adjusted 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 Baldwin, 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 revenue. 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 (i) the first twelve months of commissions and fees generated from new Partners and (ii) commissions and fees from divestitures. Organic revenue growth is the change in organic revenue period-to-period, with prior period results adjusted to (i) 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, and (ii) exclude commissions and fees related to divestitures from organic revenue. For example, commissions and fees from a Partner acquired on June 1, 2023 are excluded from organic revenue for 2023. However, after June 1, 2024, results from June 1, 2023 to December 31, 2023 for such Partners are compared to results from June 1, 2024 to December 31, 2024 for purposes of calculating organic revenue growth in 2024. 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 Baldwin 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 for adjusted net income 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.
The pro forma information presented herein removes the effects of 2024 divestitures for all periods in 2024 and 2023 as if the divestitures had occurred on January 1, 2024 and January 1, 2023, respectively. Pro forma revenue reflects GAAP revenues less revenue derived from business divestitures that occurred during 2024.
Pro forma net income (loss) reflects GAAP net income (loss) less net income derived from business divestitures that occurred during 2024, including the gain on divestitures. 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, after removing the effect of divestitures that occurred during 2024. We believe that pro forma adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of income and expenses that do not relate to ongoing 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 ongoing business 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 ongoing 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 adjusted 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. Adjusted 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 adjusted 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 adjusted 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 September 30, |
|
For the Nine Months Ended September 30, |
||||||||||||
(in thousands, except percentages) |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues |
|
$ |
338,938 |
|
|
$ |
306,270 |
|
|
$ |
1,059,145 |
|
|
$ |
933,907 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss |
|
$ |
(14,475 |
) |
|
$ |
(32,006 |
) |
|
$ |
(6,242 |
) |
|
$ |
(101,523 |
) |
Adjustments to net loss: |
|
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
|
31,329 |
|
|
|
30,580 |
|
|
|
94,203 |
|
|
|
87,600 |
|
Amortization expense |
|
|
26,899 |
|
|
|
23,183 |
|
|
|
76,334 |
|
|
|
69,505 |
|
Share-based compensation |
|
|
17,949 |
|
|
|
14,598 |
|
|
|
46,764 |
|
|
|
46,637 |
|
Gain on divestitures |
|
|
(1,809 |
) |
|
|
— |
|
|
|
(38,953 |
) |
|
|
— |
|
Change in fair value of contingent consideration |
|
|
(952 |
) |
|
|
13,914 |
|
|
|
17,276 |
|
|
|
55,065 |
|
Loss on extinguishment and modification of debt |
|
|
389 |
|
|
|
— |
|
|
|
15,068 |
|
|
|
— |
|
Colleague earnout incentives |
|
|
4,327 |
|
|
|
— |
|
|
|
10,706 |
|
|
|
— |
|
Transaction-related Partnership and integration expenses |
|
|
2,047 |
|
|
|
3,774 |
|
|
|
9,042 |
|
|
|
18,007 |
|
Depreciation expense |
|
|
1,557 |
|
|
|
1,453 |
|
|
|
4,619 |
|
|
|
4,250 |
|
Severance |
|
|
678 |
|
|
|
875 |
|
|
|
3,554 |
|
|
|
3,373 |
|
Income and other taxes |
|
|
82 |
|
|
|
161 |
|
|
|
3,300 |
|
|
|
904 |
|
Loss on interest rate caps |
|
|
84 |
|
|
|
818 |
|
|
|
244 |
|
|
|
489 |
|
Other(1) |
|
|
4,646 |
|
|
|
6,659 |
|
|
|
13,410 |
|
|
|
20,289 |
|
Adjusted EBITDA |
|
$ |
72,751 |
|
|
$ |
64,009 |
|
|
$ |
249,325 |
|
|
$ |
204,596 |
|
Adjusted EBITDA margin |
|
|
21 |
% |
|
|
21 |
% |
|
|
24 |
% |
|
|
22 |
% |
(1) Other addbacks to adjusted EBITDA include certain expenses that are considered to be non-recurring or non-operational, including certain recruiting costs, professional fees, litigation costs and bonuses.
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 September 30, |
For the Nine Months Ended September 30, |
|||||||||||||
(in thousands, except percentages) |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Commissions and fees |
|
$ |
335,210 |
|
|
$ |
304,232 |
|
|
$ |
1,050,409 |
|
|
$ |
929,306 |
|
Partnership commissions and fees(1) |
|
|
— |
|
|
|
(985 |
) |
|
|
— |
|
|
|
(44,696 |
) |
Organic revenue |
|
$ |
335,210 |
|
|
$ |
303,247 |
|
|
$ |
1,050,409 |
|
|
$ |
884,610 |
|
Organic revenue growth(2) |
|
$ |
40,672 |
|
|
$ |
47,523 |
|
|
$ |
144,844 |
|
|
$ |
150,471 |
|
Organic revenue growth %(2) |
|
|
14 |
% |
|
|
19 |
% |
|
|
16 |
% |
|
|
20 |
% |
(1) Includes the first twelve months of such commissions and fees generated from newly acquired Partners.
(2) Organic revenue for the three and nine months ended September 30, 2023 used to calculate organic revenue growth for the three and nine months ended September 30, 2024 was
Adjusted Net Income and Adjusted Diluted EPS
The following table reconciles adjusted net income to net loss attributable to Baldwin 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 September 30, |
|
For the Nine Months Ended September 30, |
||||||||||||
(in thousands, except per share data) |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net loss attributable to Baldwin |
|
$ |
(8,377 |
) |
|
$ |
(17,629 |
) |
|
$ |
(4,356 |
) |
|
$ |
(55,658 |
) |
Net loss attributable to noncontrolling interests |
|
|
(6,098 |
) |
|
|
(14,377 |
) |
|
|
(1,886 |
) |
|
|
(45,865 |
) |
Amortization expense |
|
|
26,899 |
|
|
|
23,183 |
|
|
|
76,334 |
|
|
|
69,505 |
|
Share-based compensation |
|
|
17,949 |
|
|
|
14,598 |
|
|
|
46,764 |
|
|
|
46,637 |
|
Gain on divestitures |
|
|
(1,809 |
) |
|
|
— |
|
|
|
(38,953 |
) |
|
|
— |
|
Change in fair value of contingent consideration |
|
|
(952 |
) |
|
|
13,914 |
|
|
|
17,276 |
|
|
|
55,065 |
|
Loss on extinguishment and modification of debt |
|
|
389 |
|
|
|
— |
|
|
|
15,068 |
|
|
|
— |
|
Colleague earnout incentives |
|
|
4,327 |
|
|
|
— |
|
|
|
10,706 |
|
|
|
— |
|
Transaction-related Partnership and integration expenses |
|
|
2,047 |
|
|
|
3,774 |
|
|
|
9,042 |
|
|
|
18,007 |
|
Depreciation |
|
|
1,557 |
|
|
|
1,453 |
|
|
|
4,619 |
|
|
|
4,250 |
|
Amortization of deferred financing costs |
|
|
1,422 |
|
|
|
1,244 |
|
|
|
4,419 |
|
|
|
3,577 |
|
Severance |
|
|
678 |
|
|
|
875 |
|
|
|
3,554 |
|
|
|
3,373 |
|
Loss on interest rate caps, net of cash settlements |
|
|
84 |
|
|
|
3,771 |
|
|
|
2,544 |
|
|
|
8,382 |
|
Income tax expense |
|
|
— |
|
|
|
— |
|
|
|
2,151 |
|
|
|
— |
|
Other(1) |
|
|
4,646 |
|
|
|
6,659 |
|
|
|
13,410 |
|
|
|
20,289 |
|
Adjusted pre-tax income |
|
|
42,762 |
|
|
|
37,465 |
|
|
|
160,692 |
|
|
|
127,562 |
|
Adjusted income taxes(2) |
|
|
4,234 |
|
|
|
3,709 |
|
|
|
15,909 |
|
|
|
12,629 |
|
Adjusted net income |
|
$ |
38,528 |
|
|
$ |
33,756 |
|
|
$ |
144,783 |
|
|
$ |
114,933 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares of Class A common stock outstanding - diluted |
|
|
64,012 |
|
|
|
60,549 |
|
|
|
63,001 |
|
|
|
59,791 |
|
Dilutive weighted-average shares of Class A common stock |
|
|
4,014 |
|
|
|
3,941 |
|
|
|
3,570 |
|
|
|
3,931 |
|
Exchange of Class B common stock(3) |
|
|
50,490 |
|
|
|
52,862 |
|
|
|
51,234 |
|
|
|
53,367 |
|
Adjusted diluted weighted-average shares outstanding |
|
|
118,516 |
|
|
|
117,352 |
|
|
|
117,805 |
|
|
|
117,089 |
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted diluted EPS |
|
$ |
0.33 |
|
|
$ |
0.29 |
|
|
$ |
1.23 |
|
|
$ |
0.98 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted loss per share |
|
$ |
(0.13 |
) |
|
$ |
(0.29 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.93 |
) |
Effect of exchange of Class B common stock and net loss attributable to noncontrolling interests per share |
|
|
0.01 |
|
|
|
0.02 |
|
|
|
0.02 |
|
|
|
0.06 |
|
Other adjustments to loss per share |
|
|
0.49 |
|
|
|
0.59 |
|
|
|
1.42 |
|
|
|
1.96 |
|
Adjusted income taxes per share |
|
|
(0.04 |
) |
|
|
(0.03 |
) |
|
|
(0.14 |
) |
|
|
(0.11 |
) |
Adjusted diluted EPS |
|
$ |
0.33 |
|
|
$ |
0.29 |
|
|
$ |
1.23 |
|
|
$ |
0.98 |
|
(1) Other addbacks to adjusted net income include certain expenses that are considered to be non-recurring or non-operational, including certain recruiting costs, professional fees, litigation costs and bonuses.
(2) Represents corporate income taxes at an 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 Adjusted EBITDA and Pro Forma Adjusted EBITDA Margin
The following table reconciles pro forma revenue to revenues and 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 measures:
|
|
For the Three Months Ended September 30, |
|
For the Nine Months Ended September 30, |
||||||||||||
(in thousands, except percentages) |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues |
|
$ |
338,938 |
|
|
$ |
306,270 |
|
|
$ |
1,059,145 |
|
|
$ |
933,907 |
|
Less revenue from 2024 divestitures(1) |
|
|
— |
|
|
|
(9,823 |
) |
|
|
(6,260 |
) |
|
|
(27,130 |
) |
Pro forma revenue |
|
$ |
338,938 |
|
|
$ |
296,447 |
|
|
$ |
1,052,885 |
|
|
$ |
906,777 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss |
|
$ |
(14,475 |
) |
|
$ |
(32,006 |
) |
|
$ |
(6,242 |
) |
|
$ |
(101,523 |
) |
Less net income from 2024 divestitures(2) |
|
|
(1,809 |
) |
|
|
(1,798 |
) |
|
|
(39,264 |
) |
|
|
(3,194 |
) |
Pro forma net loss |
|
|
(16,284 |
) |
|
|
(33,804 |
) |
|
|
(45,506 |
) |
|
|
(104,717 |
) |
Adjustments to pro forma net loss: |
|
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
|
31,329 |
|
|
|
30,580 |
|
|
|
94,203 |
|
|
|
87,600 |
|
Amortization expense |
|
|
26,899 |
|
|
|
22,705 |
|
|
|
76,334 |
|
|
|
68,077 |
|
Share-based compensation |
|
|
17,949 |
|
|
|
14,598 |
|
|
|
46,764 |
|
|
|
46,637 |
|
Change in fair value of contingent consideration |
|
|
(952 |
) |
|
|
13,914 |
|
|
|
17,276 |
|
|
|
55,043 |
|
Loss on extinguishment and modification of debt |
|
|
389 |
|
|
|
— |
|
|
|
15,068 |
|
|
|
— |
|
Colleague earnout incentives |
|
|
4,327 |
|
|
|
— |
|
|
|
10,706 |
|
|
|
— |
|
Transaction-related Partnership and integration expenses |
|
|
2,047 |
|
|
|
3,774 |
|
|
|
7,992 |
|
|
|
18,007 |
|
Depreciation expense |
|
|
1,557 |
|
|
|
1,441 |
|
|
|
4,619 |
|
|
|
4,214 |
|
Severance |
|
|
678 |
|
|
|
814 |
|
|
|
3,527 |
|
|
|
3,130 |
|
Income and other taxes |
|
|
82 |
|
|
|
161 |
|
|
|
3,300 |
|
|
|
904 |
|
Loss on interest rate caps |
|
|
84 |
|
|
|
818 |
|
|
|
244 |
|
|
|
489 |
|
Other(3) |
|
|
4,646 |
|
|
|
6,657 |
|
|
|
13,201 |
|
|
|
20,283 |
|
Pro forma adjusted EBITDA |
|
$ |
72,751 |
|
|
$ |
61,658 |
|
|
$ |
247,728 |
|
|
$ |
199,667 |
|
Pro forma adjusted EBITDA margin |
|
|
21 |
% |
|
|
21 |
% |
|
|
24 |
% |
|
|
22 |
% |
(1) The adjustments exclude revenue from 2024 divestitures for all periods in 2024 and 2023 as if the divestitures had occurred on January 1, 2024 and January 1, 2023, respectively.
(2) The adjustments exclude net income from 2024 divestitures, including the gain on divestitures, for all periods in 2024 and 2023 as if the divestitures had occurred on January 1, 2024 and January 1, 2023, respectively.
(3) Other addbacks to pro forma adjusted EBITDA include certain expenses that are considered to be non-recurring or non-operational, including certain recruiting costs, professional fees, litigation costs and bonuses.
Adjusted Net Cash Provided by Operating Activities (“Adjusted Free Cash Flow”)
The following table reconciles adjusted free cash flow to net cash provided by operating activities, which we consider to be the most directly comparable GAAP financial measure:
|
|
For the Nine Months Ended September 30, |
||||||
(in thousands) |
|
|
2024 |
|
|
|
2023 |
|
Net cash provided by operating activities |
|
$ |
85,708 |
|
|
$ |
22,799 |
|
Adjustments to net cash provided by operating activities: |
|
|
|
|
||||
Change in premiums, commissions and fees receivable, net |
|
|
27,777 |
|
|
|
63,367 |
|
Change in accounts payable, accrued expenses and other current liabilities |
|
|
(35,395 |
) |
|
|
(32,793 |
) |
Payment of contingent earnout consideration in excess of purchase price accrual |
|
|
21,145 |
|
|
|
22,639 |
|
Adjusted free cash flow(1) |
|
$ |
99,235 |
|
|
$ |
76,012 |
|
(1) Without the impact of one-time, third-party refinancing costs of
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 The Baldwin Insurance Group Holdings, LLC (formerly 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/20241104793983/en/
MEDIA RELATIONS
Anna Rozenich, Senior Director, Enterprise Communications
The Baldwin Group
630.561.5907 | anna.rozenich@baldwin.com
INVESTOR RELATIONS
Bonnie Bishop, Executive Director, Investor Relations
The Baldwin Group
813.259.8032 | IR@baldwin.com
Source: The Baldwin Group
FAQ
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