BRP Group, Inc. (“BRP Group” or the “Company”) (NASDAQ: BRP), an independent insurance distribution firm delivering tailored insurance solutions to a wide range of personal and commercial Clients, today announced its results for the second quarter ended June 30, 2023.
SECOND QUARTER 2023 HIGHLIGHTS
- Revenue increased 28% year-over-year to $297.2 million
- Organic Revenue Growth was 22% year-over-year
- GAAP net loss of $43.7 million and GAAP diluted loss per share of $0.40
- Adjusted Net Income(2) of $32.0 million, or $0.27(2) per fully diluted share
- Adjusted EBITDA(3) grew 45% to $61.6 million
- Adjusted EBITDA Margin(3) of 21%
“The strength of our colleague and client franchise was highlighted by organic growth of 22%, showcasing leading execution on behalf of our clients,” said Trevor Baldwin, Chief Executive Officer of BRP Group. “Additionally, we made progress in de-levering our balance sheet, which further positions us to take advantage of future opportunities. The deep investments we made over the past three years to scale the business are clearly beginning to bear fruit, and we believe they will become more evident in our margin and earnings profile in the second half of the year and beyond.”
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2023, cash and cash equivalents were $105.5 million and the Company had $130.0 million of borrowing capacity under its revolving credit facility.
SIX MONTHS 2023 RESULTS
- Revenue increased 32% year-over-year to $627.6 million
- Organic Revenue Growth of 22% year-over-year
- GAAP net loss of $69.5 million and GAAP diluted loss per share of $0.64
- Adjusted Net Income of $81.2 million, or $0.69 per fully diluted share
- Adjusted EBITDA grew 22% to $140.6 million
- Adjusted EBITDA Margin of 22%
WEBCAST AND CONFERENCE CALL INFORMATION
BRP Group will host a webcast and conference call to discuss second 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 (NASDAQ: BRP) is an independent insurance distribution firm delivering tailored insurance and risk management insights and solutions that give our Clients the peace of mind to pursue their purpose, passion and dreams. We are innovating the industry by taking a holistic and tailored approach to risk management, insurance and employee benefits, and support our Clients, Colleagues, Insurance Company Partners and communities through the deployment of vanguard resources and capital to drive our growth. BRP Group represents over 1.3 million Clients across the United States and internationally. For more information, please visit www.baldwinriskpartners.com.
| FOOTNOTES | ||
(1) | Organic Revenue for the three and six months ended June 30, 2022 used to calculate Organic Revenue Growth for the three and six months ended June 30, 2023 was $232.3 million and $475.1 million, respectively, which is adjusted to reflect revenues from Partnerships that have reached the twelve-month owned mark during the three and six months ended June 30, 2023. Organic Revenue and Organic Revenue Growth are non-GAAP measures. Reconciliation of Organic Revenue and Organic Revenue Growth to commissions and fees, the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release. | |
(2) | Adjusted Net Income and Adjusted Diluted EPS are non-GAAP measures. Reconciliation of Adjusted Net Income to net income (loss) attributable to BRP Group and reconciliation of Adjusted Diluted EPS to diluted earnings (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 income (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, 2022, and in BRP Group’s other filings with the SEC, which are available free of charge on the SEC's website at: www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated. All forward-looking statements and all subsequent written and oral forward-looking statements attributable to BRP Group or to persons acting on behalf of BRP Group are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and BRP Group does not undertake any obligation to update them in light of new information, future developments or otherwise, except as may be required under applicable law.
BRP GROUP, INC. | ||||||||||||||||
Condensed Consolidated Statements of Comprehensive Income (Loss) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
For the Three Months
| For the Six Months
| |||||||||||||||
(in thousands, except share and per share data) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Revenues: | ||||||||||||||||
Commissions and fees | $ | 297,191 | $ | 232,460 | $ | 627,637 | $ | 475,308 | ||||||||
Operating expenses: | ||||||||||||||||
Commissions, employee compensation and benefits | 225,236 | 172,848 | 456,190 | 326,598 | ||||||||||||
Other operating expenses | 47,485 | 40,770 | 94,089 | 77,212 | ||||||||||||
Amortization expense | 23,159 | 19,170 | 46,322 | 36,732 | ||||||||||||
Change in fair value of contingent consideration | 16,393 | (26,872 | ) | 41,151 | (32,504 | ) | ||||||||||
Depreciation expense | 1,449 | 1,105 | 2,797 | 2,093 | ||||||||||||
Total operating expenses | 313,722 | 207,021 | 640,549 | 410,131 | ||||||||||||
Operating income (loss) | (16,531 | ) | 25,439 | (12,912 | ) | 65,177 | ||||||||||
Other income (expense): | ||||||||||||||||
Interest expense, net | (29,136 | ) | (14,632 | ) | (57,020 | ) | (24,982 | ) | ||||||||
Other income, net | 2,669 | 5,786 | 1,158 | 21,237 | ||||||||||||
Total other expense | (26,467 | ) | (8,846 | ) | (55,862 | ) | (3,745 | ) | ||||||||
Income (loss) before income taxes | (42,998 | ) | 16,593 | (68,774 | ) | 61,432 | ||||||||||
Income tax expense | 665 | — | 743 | — | ||||||||||||
Net income (loss) | (43,663 | ) | 16,593 | (69,517 | ) | 61,432 | ||||||||||
Less: net income (loss) attributable to noncontrolling interests | (19,766 | ) | 7,951 | (31,488 | ) | 29,921 | ||||||||||
Net income (loss) attributable to BRP Group | $ | (23,897 | ) | $ | 8,642 | $ | (38,029 | ) | $ | 31,511 | ||||||
Comprehensive income (loss) | $ | (43,663 | ) | $ | 16,593 | $ | (69,517 | ) | $ | 61,432 | ||||||
Comprehensive income (loss) attributable to noncontrolling interests | (19,766 | ) | 7,951 | (31,488 | ) | 29,921 | ||||||||||
Comprehensive income (loss) attributable to BRP Group | (23,897 | ) | 8,642 | (38,029 | ) | 31,511 | ||||||||||
Basic earnings (loss) per share | $ | (0.40 | ) | $ | 0.15 | $ | (0.64 | ) | $ | 0.56 | ||||||
Diluted earnings (loss) per share | $ | (0.40 | ) | $ | 0.14 | $ | (0.64 | ) | $ | 0.53 | ||||||
Weighted-average shares of Class A common stock outstanding - basic | 60,093,228 | 56,270,491 | 59,406,331 | 55,996,668 | ||||||||||||
Weighted-average shares of Class A common stock outstanding - diluted | 60,093,228 | 59,858,816 | 59,406,331 | 59,354,168 | ||||||||||||
BRP GROUP, INC. | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(Unaudited) | ||||||||
(in thousands, except share and per share data) | June 30, 2023 | December 31, 2022 | ||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 105,546 | $ | 118,090 | ||||
Restricted cash | 107,350 | 112,381 | ||||||
Premiums, commissions and fees receivable, net | 593,858 | 531,992 | ||||||
Prepaid expenses and other current assets | 11,654 | 9,936 | ||||||
Total current assets | 818,408 | 772,399 | ||||||
Property and equipment, net | 24,402 | 25,405 | ||||||
Right-of-use assets | 92,921 | 96,465 | ||||||
Other assets | 44,582 | 45,935 | ||||||
Intangible assets, net | 1,062,969 | 1,099,918 | ||||||
Goodwill | 1,421,849 | 1,422,060 | ||||||
Total assets | $ | 3,465,131 | ||||||
