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Delaware
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001-39095
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61-1937225
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(State or other jurisdiction of
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(Commission
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(I.R.S. Employer
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incorporation or organization)
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File No.)
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Identification No.)
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4211 W. Boy Scout Blvd, Suite 800
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Tampa, Florida
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33607
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(Address of principal executive offices)
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(Zip Code)
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(Registrant's telephone number, including area code): (866) 279-0698
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Not Applicable
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(Former Name, former address and former fiscal year, if changed since last report)
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Check the appropriate box below if the form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications pursuant to Rule 14d-2 (b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Class A Common Stock, par value $0.01 per share
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BRP
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The Nasdaq Global Select Market
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Emerging Growth Company
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x
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Exhibit No.
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Description
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23.1
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23.2
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99.1
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99.2
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99.3
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99.4
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99.5
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BRP GROUP, INC.
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Date: June 15, 2020
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By:
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/s/ Kristopher A. Wiebeck
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Name: Kristopher A. Wiebeck
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Title: Chief Financial Officer
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Page
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Independent Auditor's Report
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|
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Financial Statements
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|
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Balance Sheet
|
|
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Statement of Income
|
|
|
Statement of Members' Deficit
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|
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Statement of Cash Flows
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|
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Notes to Financial Statements
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|
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1. Business and Basis of Presentation
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2. Significant Accounting Policies
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3. Revenue
|
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4. Property and Equipment, Net
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|
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5. Long-Term Debt
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6. Related Party Debt
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7. Retirement Plan
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8. Commitments and Contingencies
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9. Subsequent Events
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December 31, 2019
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||
(in thousands)
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|
|||
Assets
|
|
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||
Current assets:
|
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||
Cash and cash equivalents
|
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$
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4,755
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Premiums, commissions and fees receivable
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10,421
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Prepaid expenses and other current assets
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28
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Total current assets
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15,204
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Property and equipment, net
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133
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Deposits and other assets
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10
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Total assets
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$
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15,347
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Liabilities and Members’ Deficit
|
|
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Current liabilities:
|
|
|
||
Premiums payable to insurance companies
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$
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14,877
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Producer commissions payable
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27
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Accrued expenses and other current liabilities
|
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348
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Current maturities of related party debt
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36
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|
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Current maturities of long-term debt
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756
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|
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Total current liabilities
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16,044
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Related party debt, less current maturities
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36
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|
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Other liabilities
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25
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|
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Total liabilities
|
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16,105
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|
|
|
|
|
||
Commitments and contingencies (Note 8)
|
|
|
||
|
|
|
||
Members’ deficit:
|
|
|
||
Members’ capital (deficit)
|
|
(758
|
)
|
|
Total members’ deficit
|
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(758
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)
|
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Total liabilities and members’ deficit
|
|
$
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15,347
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For the Year Ended December 31, 2019
|
||
(in thousands)
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|
|||
Revenues:
|
|
|
||
Commissions and fees
|
|
$
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6,995
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|
|
|
|
||
Operating expenses:
|
|
|
||
Commissions, employee compensation and benefits
|
|
3,866
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|
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Other operating expenses
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1,393
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Depreciation expense
|
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36
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Total operating expenses
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5,295
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|
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|
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Operating income
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1,700
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|
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|
|
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Other income:
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|
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Interest income
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66
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|
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Interest expense
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(57
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)
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Other expense, net
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(1
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)
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Total other income
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8
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|
|
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Net income
|
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$
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1,708
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|
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Members' Capital (Deficit)
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Retained Earnings
|
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Total
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||||||
(in thousands)
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|
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|||||||||
Balance at January 1, 2019
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$
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(561
|
)
|
|
$
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—
|
|
|
$
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(561
|
)
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Net income
|
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—
|
|
|
1,708
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|
|
1,708
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|
|||
Distributions/return of capital
|
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(197
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)
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(1,708
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)
|
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(1,905
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)
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|||
Balance at December 31, 2019
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$
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(758
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)
|
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$
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—
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$
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(758
|
)
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For the Year Ended December 31, 2019
|
||
(in thousands)
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|
|||
Cash flows from operating activities:
|
|
|
||
Net income
|
|
$
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1,708
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Depreciation expense
|
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36
|
|
|
Changes in operating assets and liabilities:
|
|
|
||
Premiums, commissions and fees receivable
|
|
(8,309
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)
|
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Prepaid expenses and other current assets
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(11
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)
|
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Premiums payable to insurance companies
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9,228
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|
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Producer commissions payable
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7
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|
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Accrued expenses and other current liabilities
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275
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|
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Other liabilities
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(6
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)
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Net cash provided by operating activities
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2,928
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|
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|
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Cash flows from financing activities:
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|
|
||
Payments on long-term debt
|
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(282
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)
|
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Distributions and return of capital
|
|
(1,905
|
)
|
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Net cash used in financing activities
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(2,187
|
)
|
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|
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Net increase in cash and cash equivalents
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741
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Cash and cash equivalents at beginning of year
|
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4,014
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|
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Cash and cash equivalents at end of year
|
|
$
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4,755
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|
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Years
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Leasehold improvements
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5-7
|
Computer equipment
|
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5
|
(1)
|
Agency bill revenue represents commissions earned through the distribution of insurance products to consumers using a network of agents and brokers on behalf of various insurance carriers. The Company acts as an agent on behalf of the insured for the term of the insurance policy.
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(2)
|
Service fee revenue represents negotiated fees charged in lieu of a commission for providing agent related services to clients on behalf of insurance carriers.
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(3)
|
Profit-sharing revenue represents bonus-type revenue that is earned by the Company as a sales incentive provided by certain insurance carriers.
|
(4)
|
Direct bill revenue represents commission revenue earned by facilitating the arrangement between individuals or businesses and insurance carriers by providing insurance placement services to clients with insurance carriers, primarily for private risk management, commercial risk management and employee benefits insurance types.
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•
|
The Company considers the policyholders as representative of its customers.
|
•
|
The Company recognizes separately contracted commissions revenue at the effective date of insurance placement and considers any ongoing interaction with the customer to be immaterial in the context of the contract.
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•
|
Variable consideration includes estimates of direct bill commissions and a reserve for policy cancellations.
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•
|
Due to the relatively short time period between the information gathering phase and binding insurance coverage, the Company has determined that costs to fulfill contracts are not significant. Therefore, costs to fulfill a contract are expensed as incurred.
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|
|
December 31, 2019
|
||
(in thousands)
|
|
|||
Leasehold improvements
|
|
$
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213
|
|
Computer equipment
|
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7
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|
|
Total property and equipment
|
|
220
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|
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Less: accumulated depreciation
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|
(87
|
)
|
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Property and equipment, net
|
|
$
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133
|
|
|
|
December 31, 2019
|
||
(in thousands)
|
|
|||
$1,050,000 term loan payable to First Liberty Bank, payable in monthly installments of principal and interest at the Wall Street Journal Prime Rate Index plus 0.5% with a 5.00% floor and a 21.00% ceiling (5.25% at December 31, 2019) of $16,185 through March 2020, and all remaining principal and interest payable in full in April 2020
|
|
$
|
756
|
|
Total long-term debt
|
|
756
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|
|
Less current maturities
|
|
756
|
|
|
Long-term debt, less current maturities
|
|
$
|
—
|
|
|
|
Page
|
Financial Statements (Unaudited)
|
|
|
Balance Sheet
|
|
|
Statement of Loss
|
|
|
Statement of Members' Deficit
|
|
|
Statement of Cash Flows
|
|
|
Notes to Unaudited Financial Statements
|
|
|
1. Business and Basis of Presentation
|
|
|
2. Revenue
|
|
|
3. Long-Term Debt
|
|
|
4. Related Party Debt
|
|
|
5. Commitments and Contingencies
|
|
|
6. Subsequent Events
|
|
|
|
March 31, 2020
|
||
(in thousands)
|
|
|||
Assets
|
|
|
||
Current assets:
|
|
|
||
Cash and cash equivalents
|
|
$
|
1,540
|
|
Premiums, commissions and fees receivable
|
|
3,158
|
|
|
Prepaid expenses and other current assets
|
|
12
|
|
|
Total current assets
|
|
4,710
|
|
|
Property and equipment, net
|
|
124
|
|
|
Deposits and other assets
|
|
10
|
|
|
Total assets
|
|
$
|
4,844
|
|
|
|
|
||
Liabilities and Members’ Deficit
|
|
|
||
Current liabilities:
|
|
|
||
Premiums payable to insurance companies
|
|
$
|
4,301
|
|
Producer commissions payable
|
|
23
|
|
|
Accrued expenses and other current liabilities
|
|
340
|
|
|
Current maturities of related party debt
|
|
36
|
|
|
Current maturities of long-term debt
|
|
1,325
|
|
|
Total current liabilities
|
|
6,025
|
|
|
Related party debt, less current maturities
|
|
36
|
|
|
Other liabilities
|
|
23
|
|
|
Total liabilities
|
|
6,084
|
|
|
|
|
|
||
Commitments and contingencies (Note 5)
|
|
|
||
|
|
|
||
Members’ deficit:
|
|
|
||
Members’ capital (deficit)
|
|
(758
|
)
|
|
Accumulated deficit
|
|
(482
|
)
|
|
Total members’ deficit
|
|
(1,240
|
)
|
|
Total liabilities and members’ deficit
|
|
$
|
4,844
|
|
|
|
For the Three Months Ended March 31, 2020
|
||
(in thousands)
|
|
|||
Revenues:
|
|
|
||
Commissions and fees
|
|
$
|
960
|
|
|
|
|
||
Operating expenses:
|
|
|
||
Commissions, employee compensation and benefits
|
|
1,036
|
|
|
Other operating expenses
|
|
394
|
|
|
Depreciation expense
|
|
9
|
|
|
Total operating expenses
|
|
1,439
|
|
|
|
|
|
||
Operating loss
|
|
(479
|
)
|
|
|
|
|
||
Other income (expense):
|
|
|
||
Interest income
|
|
11
|
|
|
Interest expense
|
|
(12
|
)
|
|
Other expense, net
|
|
(2
|
)
|
|
Total other expense
|
|
(3
|
)
|
|
|
|
|
||
Net loss
|
|
$
|
(482
|
)
|
|
|
Members' Capital (Deficit)
|
|
Accumulated Deficit
|
|
Total
|
||||||
(in thousands)
|
|
|
|
|||||||||
Balance at December 31, 2019
|
|
$
|
(758
|
)
|
|
$
|
—
|
|
|
$
|
(758
|
)
|
Net loss
|
|
—
|
|
|
(482
|
)
|
|
(482
|
)
|
|||
Balance at March 31, 2020
|
|
$
|
(758
|
)
|
|
$
|
(482
|
)
|
|
$
|
(1,240
|
)
|
|
|
For the Three Months Ended March 31, 2020
|
||
(in thousands)
|
|
|||
Cash flows from operating activities:
|
|
|
||
Net loss
|
|
$
|
(482
|
)
|
Depreciation expense
|
|
9
|
|
|
Changes in operating assets and liabilities:
|
|
|
||
Premiums, commissions and fees receivable
|
|
7,263
|
|
|
Prepaid expenses and other current assets
|
|
16
|
|
|
Premiums payable to insurance companies
|
|
(10,576
|
)
|
|
Producer commissions payable
|
|
(4
|
)
|
|
Accrued expenses and other current liabilities
|
|
(8
|
)
|
|
Other liabilities
|
|
(2
|
)
|
|
Net cash used in operating activities
|
|
(3,784
|
)
|
|
|
|
|
||
Cash flows from financing activities:
|
|
|
||
Proceeds from borrowings on long-term debt
|
|
600
|
|
|
Payments on long-term debt
|
|
(31
|
)
|
|
Net cash provided by financing activities
|
|
569
|
|
|
|
|
|
||
Net decrease in cash and cash equivalents
|
|
(3,215
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
4,755
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
1,540
|
|
|
|
For the Three Months Ended March 31, 2020
|
||
(in thousands)
|
|
|||
Agency bill revenue (1)
|
|
$
|
360
|
|
Service fee revenue (2)
|
|
332
|
|
|
Profit-sharing revenue (3)
|
|
137
|
|
|
Direct bill revenue (4)
|
|
106
|
|
|
Other income
|
|
25
|
|
|
Total commissions and fees
|
|
$
|
960
|
|
(1)
|
Agency bill revenue represents commission and fee revenue earned through the distribution of insurance products to consumers using a network of agents and brokers on behalf of various insurance carriers. The Company acts as an agent on behalf of the insured for the term of the insurance policy.
|
(2)
|
Service fee revenue represents negotiated fees charged in lieu of a commission for providing agent related services to clients on behalf of insurance carriers.
|
(3)
|
Profit-sharing revenue represents bonus-type revenue that is earned by the Company as a sales incentive provided by certain insurance carriers.
|
(4)
|
Direct bill revenue represents commission revenue earned by facilitating the arrangement between individuals or businesses and insurance carriers by providing insurance placement services to clients with insurance carriers, primarily for private risk management, commercial risk management and employee benefits insurance types.
|
•
|
The Company considers the policyholders as representative of its customers.
|
•
|
The Company recognizes separately contracted commissions revenue at the effective date of insurance placement and considers any ongoing interaction with the customer to be immaterial in the context of the contract.
|
•
|
Variable consideration includes estimates of direct bill commissions and a reserve for policy cancellations.
|
•
|
Due to the relatively short time period between the information gathering phase and binding insurance coverage, the Company has determined that costs to fulfill contracts are not significant. Therefore, costs to fulfill a contract are expensed as incurred.
|
|
|
March 31, 2020
|
||
(in thousands)
|
|
|||
$1,050,000 term loan payable to First Liberty Bank, payable in monthly installments of principal and interest at the Wall Street Journal Prime Rate Index plus 0.5% with a 5.00% floor and a 21.00% ceiling (5.00% at March 31, 2020) of $16,185 through March 2020, and all remaining principal and interest payable in full in April 2020
|
|
$
|
725
|
|
Borrowings on $900,000 revolving line of credit with First Liberty Bank, payable in monthly installments of interest at the Wall Street Journal Prime Rate Index plus 0.5% with a 5.25% floor and a 21.00% ceiling (5.25% at March 31, 2020) through March 2020, and all remaining principal and interest payable in full in April 2020
|
|
600
|
|
|
Total long-term debt
|
|
1,325
|
|
|
Less current maturities
|
|
1,325
|
|
|
Long-term debt, less current maturities
|
|
$
|
—
|
|
|
|
Page
|
Independent Auditor's Report
|
|
|
Financial Statements
|
|
|
Balance Sheet
|
|
|
Statement of Income
|
|
|
Statement of Stockholders' Equity
|
|
|
Statement of Cash Flows
|
|
|
Notes to Financial Statements
|
|
|
1. Business and Basis of Presentation
|
|
|
2. Significant Accounting Policies
|
|
|
3. Revenue
|
|
|
4. Property and Equipment, Net
|
|
|
5. Customer Lists, Net
|
|
|
6. Stockholders' Equity
|
|
|
7. Profit-Sharing Plan
|
|
|
8. Commitments and Contingencies
|
|
|
9. Subsequent Events
|
|
|
|
|
||
(in thousands, except share data)
|
|
December 31, 2019
|
||
Assets
|
|
|
||
Current assets:
|
|
|
||
Cash and cash equivalents
|
|
$
|
1,835
|
|
Restricted cash
|
|
958
|
|
|
Premiums, commissions and fees receivable
|
|
8,075
|
|
|
Prepaid expenses and other current assets
|
|
53
|
|
|
Total current assets
|
|
10,921
|
|
|
Property and equipment, net
|
|
512
|
|
|
Customer lists, net
|
|
2,021
|
|
|
Deposits and other assets
|
|
49
|
|
|
Total assets
|
|
$
|
13,503
|
|
|
|
|
||
Liabilities and Stockholders’ Equity
|
|
|
||
Current liabilities:
|
|
|
||
Premiums payable to insurance companies
|
|
$
|
4,788
|
|
Producer commissions payable, net
|
|
2,620
|
|
|
Accrued expenses
|
|
1,469
|
|
|
Total current liabilities
|
|
8,877
|
|
|
Other liabilities
|
|
701
|
|
|
Total liabilities
|
|
9,578
|
|
|
|
|
|
||
Commitments and contingencies (Note 8)
|
|
|
||
|
|
|
||
Stockholders’ equity:
|
|
|
||
Common stock, no par value, 5,000 shares authorized, 823.53 shares issued and outstanding
|
|
255
|
|
|
Retained earnings
|
|
3,670
|
|
|
Total stockholders’ equity
|
|
3,925
|
|
|
Total liabilities and stockholders’ equity
|
|
$
|
13,503
|
|
|
|
For the Year Ended December 31, 2019
|
||
(in thousands)
|
|
|||
Revenues:
|
|
|
||
Commissions and fees
|
|
$
|
19,021
|
|
|
|
|
||
Operating expenses:
|
|
|
||
Commissions, employee compensation and benefits
|
|
10,899
|
|
|
Other operating expenses
|
|
1,841
|
|
|
Depreciation expense
|
|
163
|
|
|
Amortization expense
|
|
53
|
|
|
Total operating expenses
|
|
12,956
|
|
|
|
|
|
||
Operating income
|
|
6,065
|
|
|
|
|
|
||
Other income (expense):
|
|
|
||
Other expense
|
|
(18
|
)
|
|
Interest income
|
|
11
|
|
|
Total other expense
|
|
(7
|
)
|
|
|
|
|
||
Income before income taxes
|
|
6,058
|
|
|
Income tax provision
|
|
93
|
|
|
Net income
|
|
$
|
5,965
|
|
|
Common Stock
|
|
Retained Earnings
|
|
Total
|
|||||||||
(in thousands, except share data)
|
Shares
|
|
Amount
|
|
|
|||||||||
Balance at January 1, 2019
|
823.53
|
|
|
$
|
255
|
|
|
$
|
3,471
|
|
|
$
|
3,726
|
|
Net income
|
—
|
|
|
—
|
|
|
5,965
|
|
|
5,965
|
|
|||
Dividends
|
—
|
|
|
—
|
|
|
(5,766
|
)
|
|
(5,766
|
)
|
|||
Balance at December 31, 2019
|
823.53
|
|
|
$
|
255
|
|
|
$
|
3,670
|
|
|
$
|
3,925
|
|
|
|
For the Year Ended December 31, 2019
|
||
(in thousands)
|
|
|||
Cash flows from operating activities:
|
|
|
||
Net income
|
|
$
|
5,965
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
||
Depreciation expense
|
|
163
|
|
|
Amortization expense
|
|
53
|
|
|
Loss on sale of assets
|
|
18
|
|
|
Reserve for policy cancellations
|
|
236
|
|
|
Changes in operating assets and liabilities:
|
|
|
||
Premiums, commissions and fees receivable
|
|
(3,105
|
)
|
|
Prepaid expenses and other current assets
|
|
(28
|
)
|
|
Deposits and other assets
|
|
1
|
|
|
Premiums payable to insurance companies
|
|
950
|
|
|
Producer commissions payable, net
|
|
1,168
|
|
|
Accrued expenses
|
|
64
|
|
|
Other liabilities
|
|
(7
|
)
|
|
Net cash provided by operating activities
|
|
5,478
|
|
|
|
|
|
||
Cash flows from investing activities:
|
|
|
||
Purchases of property and equipment
|
|
(178
|
)
|
|
Proceeds from sale of assets
|
|
48
|
|
|
Purchase of customer list
|
|
(175
|
)
|
|
Net cash used in investing activities
|
|
(305
|
)
|
|
|
|
|
||
Cash flows from financing activities:
|
|
|
||
Payment of dividends
|
|
(5,766
|
)
|
|
Net cash used in financing activities
|
|
(5,766
|
)
|
|
|
|
|
||
Net decrease in cash and cash equivalents and restricted cash
|
|
(593
|
)
|
|
Cash and cash equivalents and restricted cash at beginning of year
|
|
3,386
|
|
|
Cash and cash equivalents and restricted cash at end of year
|
|
$
|
2,793
|
|
|
|
|
||
Supplemental schedule of cash flow information:
|
|
|
||
Cash paid during the year for taxes
|
|
$
|
21
|
|
Disclosure of non-cash investing and financing activities:
|
|
|
||
Liabilities assumed for consideration payable in an asset acquisition
|
|
$
|
1,622
|
|
|
|
Years
|
Vehicles
|
|
5
|
Office and computer equipment
|
|
5
|
Furniture and fixtures
|
|
7
|
Computer software
|
|
3
|
(1)
|
Direct bill revenue represents commission revenue earned by facilitating the arrangement between individuals or businesses and insurance carriers by providing insurance placement services to clients with insurance carriers, primarily for private risk management, commercial risk management and employee benefits insurance types.
|
(2)
|
Agency bill revenue represents commission revenue earned through the distribution of insurance products to consumers using a network of agents and brokers on behalf of various insurance carriers. The Company acts as an agent on behalf of the insured for the term of the insurance policy.
|
(3)
|
Profit-sharing revenue represents bonus-type revenue that is earned by the Company as a sales incentive provided by certain insurance carriers.
|
(4)
|
Service fee revenue represents negotiated fees charged in lieu of a commission for providing agent related services to clients on behalf of insurance carriers.
|
•
|
The Company considers the policyholders as representative of its customers.
|
•
|
The Company recognizes separately contracted commissions revenue at the effective date of insurance placement and considers any ongoing interaction with the customer to be immaterial in the context of the contract.
|
•
|
Variable consideration includes estimates of direct bill commissions, a reserve for policy cancellations and an estimate of profit-sharing income.
|
•
|
Due to the relatively short time period between the information gathering phase and binding insurance coverage, the Company has determined that costs to fulfill contracts are not significant. Therefore, costs to fulfill a contract are expensed as incurred.
|
|
|
|
||
(in thousands)
|
|
December 31, 2019
|
||
Vehicles
|
|
$
|
683
|
|
Office and computer equipment
|
|
149
|
|
|
Furniture and fixtures
|
|
80
|
|
|
Computer software
|
|
9
|
|
|
Total property and equipment
|
|
921
|
|
|
Less: accumulated depreciation
|
|
(409
|
)
|
|
Property and equipment, net
|
|
$
|
512
|
|
|
|
|
||
(in thousands)
|
|
December 31, 2019
|
||
Gross carrying value
|
|
$
|
2,302
|
|
Less: accumulated amortization
|
|
(281
|
)
|
|
Net carrying value
|
|
$
|
2,021
|
|
Year Ending December 31,
|
|
Amount
|
||
2020
|
|
$
|
209
|
|
2021
|
|
197
|
|
|
2022
|
|
185
|
|
|
2023
|
|
174
|
|
|
2024
|
|
163
|
|
Year Ending December 31,
|
|
Amount
|
||
2020
|
|
$
|
208
|
|
2021
|
|
151
|
|
|
2022
|
|
52
|
|
|
Total
|
|
$
|
411
|
|
|
|
|
||
(in thousands, except share data)
|
|
March 31, 2020
|
||
Assets
|
|
|
||
Current assets:
|
|
|
||
Cash and cash equivalents
|
|
$
|
884
|
|
Restricted cash
|
|
1,132
|
|
|
Premiums, commissions and fees receivable
|
|
5,583
|
|
|
Prepaid expenses and other current assets
|
|
109
|
|
|
Total current assets
|
|
7,708
|
|
|
Property and equipment, net
|
|
477
|
|
|
Customer lists, net
|
|
1,968
|
|
|
Deposits and other assets
|
|
49
|
|
|
Total assets
|
|
$
|
10,202
|
|
|
|
|
||
Liabilities and Stockholders’ Equity
|
|
|
||
Current liabilities:
|
|
|
||
Premiums payable to insurance companies
|
|
$
|
3,306
|
|
Producer commissions payable, net
|
|
1,953
|
|
|
Accrued expenses
|
|
164
|
|
|
Total current liabilities
|
|
5,423
|
|
|
Other liabilities
|
|
698
|
|
|
Total liabilities
|
|
6,121
|
|
|
|
|
|
||
Commitments and contingencies (Note 3)
|
|
|
||
|
|
|
||
Stockholders’ equity:
|
|
|
||
Common stock, no par value, 5,000 shares authorized, 823.53 shares issued and outstanding
|
|
255
|
|
|
Retained earnings
|
|
3,826
|
|
|
Total stockholders’ equity
|
|
4,081
|
|
|
Total liabilities and stockholders’ equity
|
|
$
|
10,202
|
|
|
|
For the Three Months Ended March 31, 2020
|
||
(in thousands)
|
|
|||
Revenues:
|
|
|
||
Commissions and fees
|
|
$
|
6,809
|
|
|
|
|
||
Operating expenses:
|
|
|
||
Commissions, employee compensation and benefits
|
|
3,169
|
|
|
Other operating expenses
|
|
613
|
|
|
Amortization expense
|
|
53
|
|
|
Depreciation expense
|
|
43
|
|
|
Total operating expenses
|
|
3,878
|
|
|
|
|
|
||
Operating income
|
|
2,931
|
|
|
|
|
|
||
Interest income
|
|
1
|
|
|
|
|
|
||
Income before income taxes
|
|
2,932
|
|
|
Income tax provision
|
|
21
|
|
|
Net income
|
|
$
|
2,911
|
|
|
Common Stock
|
|
Retained Earnings
|
|
Total
|
|||||||||
(in thousands, except share data)
|
Shares
|
|
Amount
|
|
|
|||||||||
Balance at December 31, 2019
|
823.53
|
|
|
$
|
255
|
|
|
$
|
3,670
|
|
|
$
|
3,925
|
|
Net income
|
—
|
|
|
—
|
|
|
2,911
|
|
|
2,911
|
|
|||
Dividends
|
—
|
|
|
—
|
|
|
(2,755
|
)
|
|
(2,755
|
)
|
|||
Balance at March 31, 2020
|
823.53
|
|
|
$
|
255
|
|
|
$
|
3,826
|
|
|
$
|
4,081
|
|
|
|
For the Three Months Ended March 31, 2020
|
||
(in thousands)
|
|
|||
Cash flows from operating activities:
|
|
|
||
Net income
|
|
$
|
2,911
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
||
Depreciation expense
|
|
43
|
|
|
Amortization expense
|
|
53
|
|
|
Reserve for policy cancellations
|
|
(31
|
)
|
|
Changes in operating assets and liabilities:
|
|
|
||
Premiums, commissions and fees receivable
|
|
2,523
|
|
|
Prepaid expenses and other current assets
|
|
(56
|
)
|
|
Premiums payable to insurance companies
|
|
(1,482
|
)
|
|
Producer commissions payable, net
|
|
(667
|
)
|
|
Accrued expenses
|
|
(1,305
|
)
|
|
Other liabilities
|
|
(3
|
)
|
|
Net cash provided by operating activities
|
|
1,986
|
|
|
|
|
|
||
Cash flows from investing activities:
|
|
|
||
Purchases of property and equipment
|
|
(8
|
)
|
|
Net cash used in investing activities
|
|
(8
|
)
|
|
|
|
|
||
Cash flows from financing activities:
|
|
|
||
Payment of dividends
|
|
(2,755
|
)
|
|
Net cash used in financing activities
|
|
(2,755
|
)
|
|
|
|
|
||
Net decrease in cash and cash equivalents and restricted cash
|
|
(777
|
)
|
|
Cash and cash equivalents and restricted cash at beginning of period
|
|
2,793
|
|
|
Cash and cash equivalents and restricted cash at end of period
|
|
$
|
2,016
|
|
|
|
|
||
Supplemental schedule of cash flow information:
|
|
|
||
Cash paid during the period for taxes
|
|
$
|
93
|
|
|
|
For the Three Months Ended March 31, 2020
|
||
(in thousands)
|
|
|||
Direct bill revenue (1)
|
|
$
|
3,168
|
|
Profit-sharing revenue (3)
|
|
2,418
|
|
|
Agency bill revenue (3)
|
|
988
|
|
|
Service fee revenue (4)
|
|
173
|
|
|
Other income
|
|
62
|
|
|
Total commissions and fees
|
|
$
|
6,809
|
|
(1)
|
Direct bill revenue represents commission revenue earned by facilitating the arrangement between individuals or businesses and insurance carriers by providing insurance placement services to clients with insurance carriers, primarily for private risk management, commercial risk management and employee benefits insurance types.
|
(2)
|
Profit-sharing revenue represents bonus-type revenue that is earned by the Company as a sales incentive provided by certain insurance carriers.
|
(3)
|
Agency bill revenue represents commission revenue earned through the distribution of insurance products to consumers using a network of agents and brokers on behalf of various insurance carriers. The Company acts as an agent on behalf of the insured for the term of the insurance policy.
|
(4)
|
Service fee revenue represents negotiated fees charged in lieu of a commission for providing agent related services to clients on behalf of insurance carriers.
|
•
|
The Company considers the policyholders as representative of its customers.
|
•
|
The Company recognizes separately contracted commissions revenue at the effective date of insurance placement and considers any ongoing interaction with the customer to be immaterial in the context of the contract.
|
•
|
Variable consideration includes estimates of direct bill commissions, a reserve for policy cancellations and an estimate of profit-sharing income.
|
•
|
Due to the relatively short time period between the information gathering phase and binding insurance coverage, the Company has determined that costs to fulfill contracts are not significant. Therefore, costs to fulfill a contract are expensed as incurred.
|
•
|
audited historical consolidated financial statements of BRP Group as of and for the year ended December 31, 2019, and the related notes included in the Company's Annual Report on Form 10-K for the annual period ended December 31, 2019;
|
•
|
unaudited historical interim condensed consolidated financial statements of BRP Group as of and for the three months ended March 31, 2020 and the related notes included in the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020;
|
•
|
audited historical financial statements of IRP as of and for the year ended December 31, 2019, and the related notes included as exhibit 99.1 to this Current Report on Form 8-K;
|
•
|
unaudited historical interim financial statements of IRP as of and for the three months ended March 31, 2020, and the related notes included as exhibit 99.2 to this Current Report on Form 8-K;
|
•
|
audited historical financial statements of Rosenthal Bros as of and for the year ended December 31, 2019, and the related notes included as exhibit 99.3 to this Current Report on Form 8-K; and
|
•
|
unaudited historical interim financial statements of Rosenthal Bros as of and for the three months ended March 31, 2020, and the related notes included as exhibit 99.4 to this Current Report on Form 8-K.
|
|
Historical
|
Pro Forma Partnership Related Adjustments
|
|
Pro Forma BRP Group, Inc.
|
||||||||||||
(in thousands)
|
BRP Group, Inc.
|
IRP
|
Rosenthal Bros
|
|
||||||||||||
|
|
A
|
A
|
|
|
(1)
|
||||||||||
Assets
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
52,125
|
|
$
|
1,540
|
|
$
|
884
|
|
$
|
(7,051
|
)
|
B
|
$
|
47,498
|
|
Restricted cash
|
3,840
|
|
—
|
|
1,132
|
|
—
|
|
|
4,972
|
|
|||||
Premiums, commissions and fees receivable, net
|
71,637
|
|
3,158
|
|
5,583
|
|
—
|
|
|
80,378
|
|
|||||
Prepaid expenses and other current assets
|
3,287
|
|
12
|
|
109
|
|
—
|
|
|
3,408
|
|
|||||
Due from related parties
|
34
|
|
—
|
|
—
|
|
—
|
|
|
34
|
|
|||||
Total current assets
|
130,923
|
|
4,710
|
|
7,708
|
|
(7,051
|
)
|
|
136,290
|
|
|||||
Property and equipment, net
|
4,027
|
|
124
|
|
477
|
|
—
|
|
|
4,628
|
|
|||||
Deposits and other assets
|
6,505
|
|
10
|
|
49
|
|
—
|
|
|
6,564
|
|
|||||
Intangible assets, net
|
111,264
|
|
—
|
|
1,968
|
|
41,335
|
|
C
|
154,567
|
|
|||||
Goodwill
|
197,531
|
|
—
|
|
—
|
|
86,823
|
|
C
|
284,354
|
|
|||||
Total assets
|
$
|
450,250
|
|
$
|
4,844
|
|
$
|
10,202
|
|
$
|
121,107
|
|
|
$
|
586,403
|
|
Liabilities, Mezzanine Equity and Stockholders’/Members’ Equity (Deficit)
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
||||||||||
Premiums payable to insurance companies
|
$
|
58,390
|
|
$
|
4,301
|
|
$
|
3,306
|
|
$
|
—
|
|
|
$
|
65,997
|
|
Producer commissions payable
|
9,681
|
|
23
|
|
1,953
|
|
—
|
|
|
11,657
|
|
|||||
Accrued expenses and other current liabilities
|
11,094
|
|
340
|
|
164
|
|
—
|
|
|
11,598
|
|
|||||
Current portion of contingent earnout liabilities
|
2,788
|
|
—
|
|
—
|
|
—
|
|
|
2,788
|
|
|||||
Current portion of long-term debt
|
—
|
|
1,361
|
|
—
|
|
(1,361
|
)
|
D
|
—
|
|
|||||
Total current liabilities
|
81,953
|
|
6,025
|
|
5,423
|
|
(1,361
|
)
|
|
92,040
|
|
|||||
Revolving line of credit
|
60,363
|
|
—
|
|
—
|
|
94,535
|
|
B
|
154,898
|
|
|||||
Long-term debt, less current portion
|
—
|
|
36
|
|
—
|
|
(36
|
)
|
D
|
—
|
|
|||||
Contingent earnout liabilities, less current portion
|
51,067
|
|
—
|
|
—
|
|
13,129
|
|
E
|
64,196
|
|
|||||
Other liabilities
|
2,023
|
|
23
|
|
698
|
|
—
|
|
|
2,744
|
|
|||||
Total liabilities
|
195,406
|
|
6,084
|
|
6,121
|
|
106,267
|
|
|
313,878
|
|
|||||
Mezzanine equity:
|
|
|
|
|
|
|
||||||||||
Redeemable noncontrolling interest
|
39
|
|
—
|
|
—
|
|
—
|
|
|
39
|
|
|||||
Stockholders’/members’ equity (deficit):
|
|
|
|
|
|
|
||||||||||
Members’ deficit
|
—
|
|
(758
|
)
|
—
|
|
758
|
|
F
|
—
|
|
|||||
Class A common stock
|
199
|
|
—
|
|
255
|
|
(255
|
)
|
F
|
199
|
|
|||||
Class B common stock
|
4
|
|
—
|
|
—
|
|
—
|
|
|
4
|
|
|||||
Additional paid-in capital
|
90,443
|
|
—
|
|
—
|
|
—
|
|
|
90,443
|
|
|||||
Retained earnings (accumulated deficit)
|
(7,182
|
)
|
(482
|
)
|
3,826
|
|
(3,344
|
)
|
G
|
(7,182
|
)
|
|||||
Notes receivable from stockholders
|
(647
|
)
|
—
|
|
—
|
|
—
|
|
|
(647
|
)
|
|||||
Noncontrolling interest
|
171,988
|
|
—
|
|
—
|
|
17,681
|
|
F
|
189,669
|
|
|||||
Total stockholders’/members’ equity (deficit)
|
254,805
|
|
(1,240
|
)
|
4,081
|
|
14,840
|
|
|
272,486
|
|
|||||
Total liabilities, mezzanine equity and stockholders’/members’ equity (deficit)
|
$
|
450,250
|
|
$
|
4,844
|
|
$
|
10,202
|
|
$
|
121,107
|
|
|
$
|
586,403
|
|
(1)
|
In accordance with Article 11 of Regulation S-X, these pro forma financial statements give effect to the IRP and Rosenthal Bros Partnerships as if each had occurred on March 31, 2020.
|
|
Historical
|
|
Transaction Adjustments
|
|
|
||||||||||||||||
(in thousands, except per share data)
|
BRP Group, Inc.
|
IRP (three months unowned)
|
Rosenthal Bros (five months unowned)
|
|
IRP
|
|
Rosenthal Bros
|
|
Pro Forma BRP Group, Inc.
|
||||||||||||
|
|
H
|
H
|
|
|
|
|
|
(1)
|
||||||||||||
Commissions and fees
|
$
|
54,159
|
|
$
|
960
|
|
$
|
6,809
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
61,928
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commissions, employee compensation and benefits
|
34,548
|
|
1,036
|
|
3,169
|
|
|
—
|
|
|
—
|
|
|
38,753
|
|
||||||
Other operating expenses
|
8,885
|
|
394
|
|
613
|
|
|
(184
|
)
|
I
|
(95
|
)
|
I
|
9,613
|
|
||||||
Amortization expense
|
3,596
|
|
—
|
|
53
|
|
|
259
|
|
J
|
721
|
|
J
|
4,629
|
|
||||||
Change in fair value of contingent consideration
|
1,661
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,661
|
|
||||||
Depreciation expense
|
165
|
|
9
|
|
43
|
|
|
—
|
|
|
—
|
|
|
217
|
|
||||||
Total operating expenses
|
48,855
|
|
1,439
|
|
3,878
|
|
|
75
|
|
|
626
|
|
|
54,873
|
|
||||||
Operating income (loss)
|
5,304
|
|
(479
|
)
|
2,931
|
|
|
(75
|
)
|
|
(626
|
)
|
|
7,055
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest income (expense)
|
(585
|
)
|
(1
|
)
|
1
|
|
|
(184
|
)
|
K
|
(525
|
)
|
K
|
(1,294
|
)
|
||||||
Other expense
|
—
|
|
(2
|
)
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||
Total other income (expense)
|
(585
|
)
|
(3
|
)
|
1
|
|
|
(184
|
)
|
|
(525
|
)
|
|
(1,296
|
)
|
||||||
Income (loss) before income taxes
|
4,719
|
|
(482
|
)
|
2,932
|
|
|
(259
|
)
|
|
(1,151
|
)
|
|
5,759
|
|
||||||
Income tax provision
|
12
|
|
—
|
|
21
|
|
|
—
|
|
|
—
|
|
|
33
|
|
||||||
Net income (loss)
|
4,707
|
|
(482
|
)
|
2,911
|
|
|
(259
|
)
|
|
(1,151
|
)
|
|
5,726
|
|
||||||
Net income (loss) attributable to noncontrolling interest
|
3,239
|
|
—
|
|
—
|
|
|
(91
|
)
|
|
(190
|
)
|
|
2,958
|
|
||||||
Net income (loss) attributable to controlling interest
|
$
|
1,468
|
|
$
|
(482
|
)
|
$
|
2,911
|
|
|
$
|
(168
|
)
|
|
$
|
(961
|
)
|
|
$
|
2,768
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pro forma net income per share data: L
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pro forma net income available to Class A common stockholders per share
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
|
|
|
|
|
|
|
|
$
|
0.14
|
|
||||||||||
Diluted
|
|
|
|
|
|
|
|
|
$
|
0.14
|
|
||||||||||
Pro forma weighted-average shares of Class A common stock outstanding
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
|
|
|
|
|
|
|
|
19,482
|
|
|||||||||||
Diluted
|
|
|
|
|
|
|
|
|
19,816
|
|
(1)
|
In accordance with Article 11 of Regulation S-X, these pro forma financial statements give effect to (i) the IRP and Rosenthal Bros Partnerships and (ii) the Significant Historical Businesses Acquired as if each had occurred on January 1, 2019.
|
|
Historical
|
|
|
Transaction Adjustments
|
|
||||||||||||||||||||||||||||||||||||||||||||
(in thousands, except per share data)
|
BRP Group, Inc.
|
Lykes (two months unowned)
|
MSI (three months unowned)
|
Lanier
|
Highland
|
IRP
|
Rosenthal Bros
|
|
Lykes
|
|
MSI
|
|
Lanier
|
|
Highland
|
|
|
IRP
|
|
Rosenthal Bros
|
|
Pro Forma BRP Group, Inc.
|
|||||||||||||||||||||||||||
|
|
H
|
H
|
H
|
H
|
H
|
H
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
||||||||||||||||||||||||||||
Commissions and fees
|
$
|
137,841
|
|
$
|
2,825
|
|
$
|
7,828
|
|
$
|
8,324
|
|
$
|
13,173
|
|
$
|
6,995
|
|
$
|
19,021
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
196,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Commissions, employee compensation and benefits
|
96,955
|
|
1,054
|
|
5,206
|
|
5,544
|
|
12,315
|
|
3,866
|
|
10,899
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
135,839
|
|
||||||||||||||
Other operating expenses
|
24,576
|
|
262
|
|
470
|
|
2,171
|
|
539
|
|
1,393
|
|
1,841
|
|
|
(84
|
)
|
I
|
(240
|
)
|
I
|
(174
|
)
|
I
|
(74
|
)
|
I
|
—
|
|
|
—
|
|
|
30,680
|
|
||||||||||||||
Amortization expense
|
10,007
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
53
|
|
|
92
|
|
J
|
1,743
|
|
J
|
371
|
|
J
|
1,053
|
|
J
|
1,029
|
|
J
|
2,862
|
|
J
|
17,210
|
|
||||||||||||||
Change in fair value of contingent consideration
|
10,829
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,829
|
|
||||||||||||||
Depreciation expense
|
542
|
|
—
|
|
9
|
|
32
|
|
—
|
|
36
|
|
163
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
782
|
|
||||||||||||||
Total operating expenses
|
142,909
|
|
1,316
|
|
5,685
|
|
7,747
|
|
12,854
|
|
5,295
|
|
12,956
|
|
|
8
|
|
|
1,503
|
|
|
197
|
|
|
979
|
|
|
1,029
|
|
|
2,862
|
|
|
195,340
|
|
||||||||||||||
Operating income (loss)
|
(5,068
|
)
|
1,509
|
|
2,143
|
|
577
|
|
319
|
|
1,700
|
|
6,065
|
|
|
(8
|
)
|
|
(1,503
|
)
|
|
(197
|
)
|
|
(979
|
)
|
|
(1,029
|
)
|
|
(2,862
|
)
|
|
667
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Interest income (expense)
|
(10,640
|
)
|
—
|
|
—
|
|
(59
|
)
|
2
|
|
9
|
|
11
|
|
|
(558
|
)
|
K
|
(1,010
|
)
|
K
|
—
|
|
|
—
|
|
|
(751
|
)
|
K
|
(2,159
|
)
|
K
|
(15,155
|
)
|
||||||||||||||
Loss on extinguishment of debt
|
(6,732
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,732
|
)
|
||||||||||||||
Other income (expense)
|
3
|
|
—
|
|
—
|
|
131
|
|
2
|
|
(1
|
)
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
117
|
|
||||||||||||||
Total other income (expense)
|
(17,369
|
)
|
—
|
|
—
|
|
72
|
|
4
|
|
8
|
|
(7
|
)
|
|
(558
|
)
|
|
(1,010
|
)
|
|
—
|
|
|
—
|
|
|
(751
|
)
|
|
(2,159
|
)
|
|
(21,770
|
)
|
||||||||||||||
Income (loss) before income taxes
|
(22,437
|
)
|
1,509
|
|
2,143
|
|
649
|
|
323
|
|
1,708
|
|
6,058
|
|
|
(566
|
)
|
|
(2,513
|
)
|
|
(197
|
)
|
|
(979
|
)
|
|
(1,780
|
)
|
|
(5,021
|
)
|
|
(21,103
|
)
|
||||||||||||||
Income tax provision
|
17
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
93
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
110
|
|
||||||||||||||
Net income (loss)
|
(22,454
|
)
|
1,509
|
|
2,143
|
|
649
|
|
323
|
|
1,708
|
|
5,965
|
|
|
(566
|
)
|
|
(2,513
|
)
|
|
(197
|
)
|
|
(979
|
)
|
|
(1,780
|
)
|
|
(5,021
|
)
|
|
(21,213
|
)
|
||||||||||||||
Net loss attributable to noncontrolling interest
|
(13,804
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
(523
|
)
|
|
(74
|
)
|
|
(432
|
)
|
|
(360
|
)
|
|
(755
|
)
|
|
(15,948
|
)
|
||||||||||||||
Net income (loss) attributable to controlling interest
|
$
|
(8,650
|
)
|
$
|
1,509
|
|
$
|
2,143
|
|
$
|
649
|
|
$
|
323
|
|
$
|
1,708
|
|
$
|
5,965
|
|
|
$
|
(566
|
)
|
|
$
|
(1,990
|
)
|
|
$
|
(123
|
)
|
|
$
|
(547
|
)
|
|
$
|
(1,420
|
)
|
|
$
|
(4,266
|
)
|
|
$
|
(5,265
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Pro forma net loss per share data: L
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Pro forma net loss available to Class A common stockholders per share - basic and diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.29
|
)
|
||||||||||||||||||||||||||
Pro forma weighted-average shares of Class A common stock outstanding - basic and diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,917
|
|
(1)
|
In accordance with Article 11 of Regulation S-X, these pro forma financial statements give effect to (i) the IRP and Rosenthal Bros Partnerships and (ii) the Significant Historical Businesses Acquired as if each had occurred on January 1, 2019.
|
Consideration Transferred (in thousands)
|
|
IRP
|
|
Rosenthal Bros
|
||||
Cash paid to owners
|
|
$
|
26,600
|
|
|
$
|
74,986
|
|
Class B common stock (814,340 and 1,164,393 shares)
|
|
7,533
|
|
|
10,148
|
|
||
Fair value of contingent earnout consideration
|
|
6,078
|
|
|
7,051
|
|
||
Total consideration transferred
|
|
$
|
40,211
|
|
|
$
|
92,185
|
|
A
|
On April 1, 2020, the Company acquired certain assets and intellectual and intangible rights and assumed certain liabilities of IRP for cash consideration of $26.6 million and fair value of noncontrolling interest of $7.5 million. The Partnership was made to expand the Company’s capabilities within the energy and infrastructure business. IRP will also have the opportunity to receive additional contingent earnout consideration in cash and Class A common stock based upon the achievement of certain post-closing revenue focused performance measures.
|
B
|
Reflects the funding of cash consideration for the IRP and Rosenthal Bros Partnerships, which consisted the following:
|
(in thousands)
|
|
IRP
|
|
Rosenthal Bros
|
||||
Cash on hand
|
|
$
|
2,065
|
|
|
$
|
4,986
|
|
Borrowings on revolving line of credit
|
|
24,535
|
|
|
70,000
|
|
||
Cash consideration paid
|
|
$
|
26,600
|
|
|
$
|
74,986
|
|
C
|
Reflects allocation of purchase price to record intangible assets and goodwill at their estimated fair value assuming the IRP and Rosenthal Bros Partnerships occurred on March 31, 2020. Reflects the pro forma allocations to intangible assets, which include $8.4 million of purchased customer accounts for IRP and $34.9 million of purchased customer accounts and trade names for Rosenthal Bros, offset in part by elimination of Rosenthal Bros' historical intangible assets of $2.0 million. Reflects the pro forma allocations to goodwill, which include $31.7 million and $55.1 million related to IRP and Rosenthal Bros, respectively.
|
D
|
Reflects the elimination of IRP's debt, which was settled with proceeds from the closing of the acquisition of IRP by BRP Group.
|
E
|
Represents the pro forma adjustments to reflect the estimated contingent earnout consideration exchanged in the IRP and Rosenthal Bros Partnerships.
|
F
|
Reflects the elimination of IRP's historical members' deficit and Rosenthal Bros' historical stockholders' common stock, offset by the issuance of Class B common stock to IRP and Rosenthal Bros as a form of rollover equity consideration:
|
(in thousands)
|
|
IRP
|
|
Rosenthal Bros
|
||||
Eliminate IRP's historical members' deficit and Rosenthal Bros' historical common stock
|
|
$
|
758
|
|
|
$
|
(255
|
)
|
Record adjustment to noncontrolling interest for Class B common stock issuance
|
|
7,533
|
|
|
10,148
|
|
||
Total adjustments to members' deficit, common stock and noncontrolling interest
|
|
$
|
8,291
|
|
|
$
|
9,893
|
|
G
|
Reflects the elimination of IRP and Rosenthal Bros' historical retained earnings at March 31, 2020.
|
H
|
On March 1, 2019, the Company acquired certain assets and intellectual and intangible rights and assumed certain liabilities of Lykes for cash consideration of $36.0 million and fair value of noncontrolling interest of $1.0 million. The Partnership was made to expand the Company’s Middle Market business presence in Florida. As a result of the Lykes Partnership, the Company recognized goodwill in the amount of $28.7 million.
|
I
|
For the three months ended March 31, 2020, reflects the pro forma adjustment to remove transaction expenses including due diligence and attorneys’ fees incurred in connection with the acquisitions of IRP and Rosenthal Bros.
|
J
|
For the three months ended March 31, 2020, reflects the pro forma adjustment to amortization expense related to purchased customer accounts recorded in connection with the acquisition of IRP in April 2020 and purchased customer accounts and trade names recorded in connection with the acquisition of Rosenthal Bros in June 2020.
|
Intangible Assets
|
|
Useful Life (in years)
|
|
Purchased customer accounts (Rosenthal Bros)
|
|
20
|
|
Purchased customer accounts (Lykes, Lanier and IRP)
|
|
15
|
|
Purchased customer accounts (MSI)
|
|
5
|
|
Software
|
|
5
|
|
Purchased carrier relationships (MSI)
|
|
20
|
|
Purchased carrier relationships (Highland)
|
|
0.75
|
|
Purchased distributor relationships (MSI and Highland)
|
|
20
|
|
Trade names (MSI, Highland and Rosenthal Bros)
|
|
5
|
|
|
|
Amortization Expense Over the Next Five Years
|
||||||||||||||||||
(in thousands)
|
|
Year 1
|
|
Year 2
|
|
Year 3
|
|
Year 4
|
|
Year 5
|
||||||||||
Lykes
|
|
$
|
982
|
|
|
$
|
939
|
|
|
$
|
857
|
|
|
$
|
763
|
|
|
$
|
679
|
|
MSI
|
|
6,935
|
|
|
7,259
|
|
|
7,556
|
|
|
3,163
|
|
|
1,193
|
|
|||||
Lanier
|
|
373
|
|
|
380
|
|
|
388
|
|
|
396
|
|
|
404
|
|
|||||
Highland
|
|
726
|
|
|
410
|
|
|
421
|
|
|
422
|
|
|
403
|
|
|||||
IRP
|
|
1,029
|
|
|
1,035
|
|
|
994
|
|
|
920
|
|
|
825
|
|
|||||
Rosenthal Bros
|
|
2,372
|
|
|
2,876
|
|
|
2,834
|
|
|
2,735
|
|
|
2,724
|
|
K
|
For the three months ended March 31, 2020, reflects the pro forma adjustment to interest expense related to the incremental debt borrowed in connection with the acquisitions of IRP in April 2020 and Rosenthal Bros in June 2020.
|
(in thousands)
|
|
For the Three Months Ended March 31, 2020
|
|
For the Year Ended December 31, 2019
|
||||
Interest on revolving lines of credit
|
|
$
|
709
|
|
|
$
|
3,430
|
|
Interest on related party debt
|
|
—
|
|
|
636
|
|
||
Pro forma cash interest expense
|
|
709
|
|
|
4,066
|
|
||
Amortization of capitalized debt issuance costs
|
|
—
|
|
|
412
|
|
||
Total pro forma interest expense
|
|
$
|
709
|
|
|
$
|
4,478
|
|
L
|
Pro forma basic net income (loss) per share is computed by dividing the pro forma net income (loss) available to Class A common stockholders by the weighted-average shares of Class A common stock outstanding during the period. Pro forma diluted net income (loss) per share is computed by adjusting the net loss available to Class A common stockholders and the weighted-average shares of Class A common stock outstanding to give effect to potentially dilutive securities. The calculation of diluted net loss per share excludes 45,523,095 shares of Class B common stock that are convertible into Class A common stock under the “if-converted” method as the inclusion of such shares would have an anti-dilutive effect to the periods presented. The following table sets forth a reconciliation of the numerators and denominators used to compute pro forma basic and diluted net income (loss) per share.
|
(in thousands, except per share data)
|
|
For the Three Months Ended March 31, 2020
|
|
For the Year Ended December 31, 2019
|
||||
Pro forma basic and diluted net income (loss) per share
|
|
|
|
|
||||
Numerator
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
5,726
|
|
|
$
|
(21,213
|
)
|
Less: net income (loss) attributable to noncontrolling interest
|
|
2,958
|
|
|
(15,948
|
)
|
||
Pro forma net income (loss) attributable to Class A common stockholders - basic and diluted
|
|
$
|
2,768
|
|
|
$
|
(5,265
|
)
|
|
|
|
|
|
||||
Denominator
|
|
|
|
|
||||
Shares of Class A common stock outstanding
|
|
19,482
|
|
|
17,917
|
|
||
Pro forma weighted-average shares of Class A common stock outstanding - basic
|
|
19,482
|
|
|
17,917
|
|
||
|
|
|
|
|
||||
Pro forma weighted-average shares of Class A common stock outstanding - basic
|
|
19,482
|
|
|
17,917
|
|
||
Dilutive effect of unvested restricted shares of Class A common stock
|
|
334
|
|
|
—
|
|
||
Pro forma weighted-average shares of Class A common stock outstanding - diluted
|
|
19,816
|
|
|
17,917
|
|
||
|
|
|
|
|
||||
Pro forma net income (loss) per share - basic
|
|
$
|
0.14
|
|
|
$
|
(0.29
|
)
|
Pro forma net income (loss) per share - diluted
|
|
$
|
0.14
|
|
|
$
|
(0.29
|
)
|