☒
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Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
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☐
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Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
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Delaware
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61-1937225
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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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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Nasdaq Global Select Market
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Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated filer
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☒
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Smaller reporting company
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☒
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Emerging growth company
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☒
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AgencyRM
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AgencyRM LLC, a Medicare Partner effective February 1, 2020
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Book of Business
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Insurance policies bound by us on behalf of our Clients
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Clients
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Our insureds
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Colleagues
|
Our employees
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Exchange Act
|
Securities Exchange Act of 1934, as amended
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Highland
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Highland Risk Services, LLC, a Specialty Partner effective January 1, 2020
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Insurance Company Partners
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Insurance companies with which we have a contractual relationship
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IRP
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Insurance Risk Partners, LLC, a Middle Market Partner effective April 1, 2020
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JPMorgan Credit Agreement
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Fourth amended and restated credit agreement between Baldwin Risk Partners, LLC, as borrower, JPMorgan Chase Bank, N.A., as agent and lender, and the several banks and other financial institutions as lenders entered into on December 19, 2019, pursuant to an amendment and restatement agreement between Baldwin Risk Partners, LLC, as borrower, Cadence Bank, N.A., as existing agent and lender, JPMorgan Chase Bank, N.A., as successor agent and lender, and the several banks and other financial institutions as lenders entered into on December 19, 2019, as amended by the Incremental Facility Amendment No. 1 entered into on March 12, 2020, the Amendment No. 2 to Credit Agreement entered into on April 6, 2020 and the Incremental Facility Amendment No. 3 entered into June 18, 2020
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Lanier
|
Lanier Upshaw, Inc., a Middle Market Partner effective January 1, 2020
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MGA
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Managing General Agent
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Operating Groups
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Our reportable segments
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Partners
|
Companies that we have acquired, or in the case of asset acquisitions, the producers
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Partnerships
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Strategic acquisitions made by the Company
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Pendulum
|
Pendulum, LLC, a Specialty Partner effective May 1, 2020
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Pre-IPO LLC Members
|
Owners of LLC Units of Baldwin Risk Partners, LLC prior to our initial public offering
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Risk Advisors
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Our producers
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Rosenthal
|
Rosenthal Bros., Inc., a Middle Market Partner effective June 1, 2020
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SEC
|
U.S. Securities and Exchange Commission
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Securities Act
|
Securities Act of 1933, as amended
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SPG
|
Southern Protective Group, LLC, a Middle Market Partner effective May 1, 2020,
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TBA/RBA
|
Trinity Benefit Advisors, Inc./Russ Blakely & Associates, LLC, a Middle Market Partner effective June 1, 2020
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Tax Receivable Agreement
|
Tax Receivable Agreement between BRP Group, Inc. and the holders of LLC Units in Baldwin Risk Partners, LLC entered into on October 28, 2019
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VibrantUSA
|
VibrantUSA Inc., a Medicare Partner effective date of February 1, 2020
|
(in thousands, except share and per share data)
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
194,378
|
|
|
$
|
67,689
|
|
Restricted cash
|
|
10,058
|
|
|
3,382
|
|
||
Premiums, commissions and fees receivable, net
|
|
102,575
|
|
|
58,793
|
|
||
Prepaid expenses and other current assets
|
|
3,205
|
|
|
3,019
|
|
||
Due from related parties
|
|
121
|
|
|
43
|
|
||
Total current assets
|
|
310,337
|
|
|
132,926
|
|
||
Property and equipment, net
|
|
6,358
|
|
|
3,322
|
|
||
Other assets
|
|
7,994
|
|
|
5,600
|
|
||
Intangible assets, net
|
|
209,453
|
|
|
92,450
|
|
||
Goodwill
|
|
335,526
|
|
|
164,470
|
|
||
Total assets
|
|
$
|
869,668
|
|
|
$
|
398,768
|
|
Liabilities, Mezzanine Equity and Stockholders’ Equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Premiums payable to insurance companies
|
|
$
|
110,512
|
|
|
$
|
50,541
|
|
Producer commissions payable
|
|
13,223
|
|
|
7,470
|
|
||
Accrued expenses and other current liabilities
|
|
16,650
|
|
|
12,334
|
|
||
Current portion of contingent earnout liabilities
|
|
4,212
|
|
|
2,480
|
|
||
Total current liabilities
|
|
144,597
|
|
|
72,825
|
|
||
Revolving lines of credit
|
|
226,000
|
|
|
40,363
|
|
||
Contingent earnout liabilities, less current portion
|
|
74,323
|
|
|
46,289
|
|
||
Other liabilities
|
|
2,114
|
|
|
2,017
|
|
||
Total liabilities
|
|
447,034
|
|
|
161,494
|
|
||
Commitments and contingencies (Note 14)
|
|
|
|
|
||||
Mezzanine equity:
|
|
|
|
|
||||
Redeemable noncontrolling interest
|
|
71
|
|
|
23
|
|
||
Stockholders’ equity:
|
|
|
|
|
||||
Class A common stock, par value $0.01 per share, 300,000,000 shares authorized; 33,302,477 and 19,362,984 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively
|
|
333
|
|
|
194
|
|
||
Class B common stock, par value $0.0001 per share, 50,000,000 shares authorized; 45,458,763 and 43,257,738 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively
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4
|
|
|
4
|
|
||
Additional paid-in capital
|
|
235,520
|
|
|
82,425
|
|
||
Accumulated deficit
|
|
(10,770
|
)
|
|
(8,650
|
)
|
||
Notes receivable from stockholders
|
|
(573
|
)
|
|
(688
|
)
|
||
Total stockholders’ equity attributable to BRP Group, Inc.
|
|
224,514
|
|
|
73,285
|
|
||
Noncontrolling interest
|
|
198,049
|
|
|
163,966
|
|
||
Total stockholders’ equity
|
|
422,563
|
|
|
237,251
|
|
||
Total liabilities, mezzanine equity and stockholders’ equity
|
|
$
|
869,668
|
|
|
$
|
398,768
|
|
(in thousands)
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
Assets of Consolidated Variable Interest Entities That Can Only be Used to Settle the Obligations of Consolidated Variable Interest Entities:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
60
|
|
|
$
|
47
|
|
Premiums, commissions and fees receivable, net
|
|
167
|
|
|
75
|
|
||
Total current assets
|
|
227
|
|
|
122
|
|
||
Property and equipment, net
|
|
26
|
|
|
31
|
|
||
Other assets
|
|
5
|
|
|
7
|
|
||
Total assets
|
|
$
|
258
|
|
|
$
|
160
|
|
Liabilities of Consolidated Variable Interest Entities for Which Creditors Do Not Have Recourse to the Company:
|
|
|
|
|
||||
Premiums payable to insurance companies
|
|
$
|
59
|
|
|
$
|
6
|
|
Producer commissions payable
|
|
1
|
|
|
15
|
|
||
Accrued expenses and other current liabilities
|
|
7
|
|
|
29
|
|
||
Total liabilities
|
|
$
|
67
|
|
|
$
|
50
|
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
(in thousands, except share and per share data)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Commissions and fees
|
|
$
|
51,268
|
|
|
$
|
33,060
|
|
|
$
|
105,427
|
|
|
$
|
62,897
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Commissions, employee compensation and benefits
|
|
39,263
|
|
|
23,994
|
|
|
73,811
|
|
|
40,280
|
|
||||
Other operating expenses
|
|
9,546
|
|
|
6,389
|
|
|
18,431
|
|
|
10,391
|
|
||||
Amortization expense
|
|
4,450
|
|
|
2,835
|
|
|
8,046
|
|
|
3,711
|
|
||||
Change in fair value of contingent consideration
|
|
4,581
|
|
|
(971
|
)
|
|
6,242
|
|
|
(3,757
|
)
|
||||
Depreciation expense
|
|
240
|
|
|
149
|
|
|
405
|
|
|
276
|
|
||||
Total operating expenses
|
|
58,080
|
|
|
32,396
|
|
|
106,935
|
|
|
50,901
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss)
|
|
(6,812
|
)
|
|
664
|
|
|
(1,508
|
)
|
|
11,996
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
|
(1,047
|
)
|
|
(3,623
|
)
|
|
(1,632
|
)
|
|
(5,213
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes
|
|
(7,859
|
)
|
|
(2,959
|
)
|
|
(3,140
|
)
|
|
6,783
|
|
||||
Income tax provision
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
||||
Net income (loss)
|
|
(7,859
|
)
|
|
(2,959
|
)
|
|
(3,152
|
)
|
|
6,783
|
|
||||
Less: net income (loss) attributable to noncontrolling interests
|
|
(4,271
|
)
|
|
(2,959
|
)
|
|
(1,032
|
)
|
|
6,783
|
|
||||
Net loss attributable to BRP Group, Inc.
|
|
$
|
(3,588
|
)
|
|
$
|
—
|
|
|
$
|
(2,120
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive income (loss)
|
|
$
|
(7,859
|
)
|
|
$
|
(2,959
|
)
|
|
$
|
(3,152
|
)
|
|
$
|
6,783
|
|
Comprehensive income (loss) attributable to noncontrolling interests
|
|
(4,271
|
)
|
|
(2,959
|
)
|
|
(1,032
|
)
|
|
6,783
|
|
||||
Comprehensive loss attributable to BRP Group, Inc.
|
|
(3,588
|
)
|
|
—
|
|
|
(2,120
|
)
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net loss per share
|
|
$
|
(0.18
|
)
|
|
|
|
$
|
(0.11
|
)
|
|
|
||||
Basic and diluted weighted-average shares of Class A common stock outstanding
|
|
20,426,082
|
|
|
|
|
19,959,828
|
|
|
|
For the Three Months Ended June 30, 2020
|
||||||||||||||||||||||||||||||||||||||
|
Stockholders’ Equity
|
|
|
Mezzanine Equity
|
||||||||||||||||||||||||||||||||||
|
Class A Common Stock
|
|
Class B Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
(in thousands, except share data)
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
APIC
|
|
Accumulated Deficit
|
|
Notes Receivable from Stockholders
|
|
Non-controlling Interest
|
|
Total
|
|
|
Redeemable Non-controlling Interest
|
||||||||||||||||||
Balance at March 31, 2020
|
19,847,354
|
|
$
|
199
|
|
|
43,544,362
|
|
$
|
4
|
|
|
$
|
90,443
|
|
|
$
|
(7,182
|
)
|
|
$
|
(647
|
)
|
|
$
|
171,988
|
|
|
$
|
254,805
|
|
|
|
$
|
39
|
|
||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,588
|
)
|
|
—
|
|
|
(4,292
|
)
|
|
(7,880
|
)
|
|
|
21
|
|
||||||||
Issuance of Class A common stock in offering, net of underwriting discounts and offering costs
|
13,225,000
|
|
132
|
|
|
(2,475,000
|
)
|
|
—
|
|
|
144,525
|
|
|
—
|
|
|
—
|
|
|
(9,398
|
)
|
|
135,259
|
|
|
|
—
|
|
|||||||||
Equity issued in business combinations
|
—
|
|
|
—
|
|
|
4,518,948
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39,953
|
|
|
39,953
|
|
|
|
—
|
|
|||||||||
Share-based compensation, net of forfeitures
|
189,361
|
|
2
|
|
|
—
|
|
|
—
|
|
|
1,346
|
|
|
—
|
|
|
—
|
|
|
296
|
|
|
1,644
|
|
|
|
—
|
|
|||||||||
Redemptions and repurchases of common stock
|
40,762
|
|
|
—
|
|
|
(129,547
|
)
|
|
—
|
|
|
(794
|
)
|
|
—
|
|
|
—
|
|
|
(498
|
)
|
|
(1,292
|
)
|
|
|
—
|
|
||||||||
Repayment of stockholder notes receivable
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74
|
|
|
—
|
|
|
74
|
|
|
|
—
|
|
||||||||
Contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
11
|
|
||||||||
Balance at June 30, 2020
|
33,302,477
|
|
$
|
333
|
|
|
45,458,763
|
|
$
|
4
|
|
|
$
|
235,520
|
|
|
$
|
(10,770
|
)
|
|
$
|
(573
|
)
|
|
$
|
198,049
|
|
|
$
|
422,563
|
|
|
|
$
|
71
|
|
For the Six Months Ended June 30, 2020
|
||||||||||||||||||||||||||||||||||||||
|
Stockholders’ Equity
|
|
|
Mezzanine Equity
|
||||||||||||||||||||||||||||||||||
|
Class A Common Stock
|
|
Class B Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
(in thousands, except share data)
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
APIC
|
|
Accumulated Deficit
|
|
Notes Receivable from Stockholders
|
|
Non-controlling Interest
|
|
Total
|
|
|
Redeemable Non-controlling Interest
|
||||||||||||||||||
Balance at December 31, 2019
|
19,362,984
|
|
$
|
194
|
|
|
43,257,738
|
|
$
|
4
|
|
|
$
|
82,425
|
|
|
$
|
(8,650
|
)
|
|
$
|
(688
|
)
|
|
$
|
163,966
|
|
|
$
|
237,251
|
|
|
|
$
|
23
|
|
||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,120
|
)
|
|
—
|
|
|
(1,069
|
)
|
|
(3,189
|
)
|
|
|
37
|
|
||||||||
Issuance of Class A common stock in offering, net of underwriting discounts and offering costs
|
13,225,000
|
|
132
|
|
|
(2,475,000
|
)
|
|
—
|
|
|
144,525
|
|
|
—
|
|
|
—
|
|
|
(9,398
|
)
|
|
135,259
|
|
|
|
—
|
|
|||||||||
Equity issued in business combinations
|
487,534
|
|
5
|
|
|
4,805,572
|
|
—
|
|
|
7,672
|
|
|
—
|
|
|
—
|
|
|
44,453
|
|
|
52,130
|
|
|
|
—
|
|
||||||||||
Share-based compensation, net of forfeitures
|
186,197
|
|
2
|
|
|
—
|
|
|
—
|
|
|
1,692
|
|
|
—
|
|
|
—
|
|
|
595
|
|
|
2,289
|
|
|
|
—
|
|
|||||||||
Redemptions and repurchases of common stock
|
40,762
|
|
|
—
|
|
|
(129,547
|
)
|
|
—
|
|
|
(794
|
)
|
|
—
|
|
|
—
|
|
|
(498
|
)
|
|
(1,292
|
)
|
|
|
—
|
|
||||||||
Repayment of stockholder notes receivable
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
115
|
|
|
—
|
|
|
115
|
|
|
|
—
|
|
||||||||
Contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
11
|
|
||||||||
Balance at June 30, 2020
|
33,302,477
|
|
$
|
333
|
|
|
45,458,763
|
|
$
|
4
|
|
|
$
|
235,520
|
|
|
$
|
(10,770
|
)
|
|
$
|
(573
|
)
|
|
$
|
198,049
|
|
|
$
|
422,563
|
|
|
|
$
|
71
|
|
For the Three Months Ended June 30, 2019
|
||||||||||||||||||||||||
|
Members’ Equity (Deficit)
|
|
|
Mezzanine Equity
|
||||||||||||||||||||
(in thousands)
|
Members’ Deficit
|
|
Notes Receivable from Members
|
|
Noncontrolling Interest
|
|
Total
|
|
|
Redeemable Noncontrolling Interest
|
|
Redeemable Members’ Capital
|
||||||||||||
Balance at March 31, 2019
|
$
|
(91,956
|
)
|
|
$
|
(355
|
)
|
|
$
|
2,451
|
|
|
$
|
(89,860
|
)
|
|
|
$
|
41,391
|
|
|
$
|
73,688
|
|
Net income (loss)
|
(2,607
|
)
|
|
—
|
|
|
39
|
|
|
(2,568
|
)
|
|
|
788
|
|
|
(1,179
|
)
|
||||||
Contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
19
|
|
|
—
|
|
||||||
Repayment of member notes receivable
|
—
|
|
|
99
|
|
|
—
|
|
|
99
|
|
|
|
—
|
|
|
—
|
|
||||||
Issuance and vesting of Management Incentive Units
|
230
|
|
|
—
|
|
|
—
|
|
|
230
|
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of common units
|
612
|
|
|
—
|
|
|
—
|
|
|
612
|
|
|
|
—
|
|
|
—
|
|
||||||
Equity issued in business combinations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
30,963
|
|
|
—
|
|
||||||
Change in the redemption value of redeemable interests
|
(33,271
|
)
|
|
—
|
|
|
—
|
|
|
(33,271
|
)
|
|
|
(5,479
|
)
|
|
38,750
|
|
||||||
Distributions
|
(1,877
|
)
|
|
—
|
|
|
(66
|
)
|
|
(1,943
|
)
|
|
|
(1,776
|
)
|
|
(663
|
)
|
||||||
Balance at June 30, 2019
|
$
|
(128,869
|
)
|
|
$
|
(256
|
)
|
|
$
|
2,424
|
|
|
$
|
(126,701
|
)
|
|
|
$
|
65,906
|
|
|
$
|
110,596
|
|
For the Six Months Ended June 30, 2019
|
||||||||||||||||||||||||
|
Members’ Equity (Deficit)
|
|
|
Mezzanine Equity
|
||||||||||||||||||||
(in thousands)
|
Members’ Deficit
|
|
Notes Receivable from Members
|
|
Noncontrolling Interest
|
|
Total
|
|
|
Redeemable Noncontrolling Interest
|
|
Redeemable Members’ Capital
|
||||||||||||
Balance at December 31, 2018
|
$
|
(63,606
|
)
|
|
$
|
(90
|
)
|
|
$
|
937
|
|
|
$
|
(62,759
|
)
|
|
|
$
|
46,208
|
|
|
$
|
39,354
|
|
Net income
|
2,697
|
|
|
—
|
|
|
132
|
|
|
2,829
|
|
|
|
2,321
|
|
|
1,633
|
|
||||||
Contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
34
|
|
|
—
|
|
||||||
Contributions through issuance of member notes receivable
|
—
|
|
|
(310
|
)
|
|
47
|
|
|
(263
|
)
|
|
|
263
|
|
|
—
|
|
||||||
Repayment of member notes receivable
|
—
|
|
|
144
|
|
|
—
|
|
|
144
|
|
|
|
—
|
|
|
—
|
|
||||||
Issuance and vesting of Management Incentive Units
|
360
|
|
|
—
|
|
|
—
|
|
|
360
|
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of common units
|
612
|
|
|
—
|
|
|
386
|
|
|
998
|
|
|
|
—
|
|
|
5,509
|
|
||||||
Repurchase of common units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
(11,177
|
)
|
||||||
Repurchase redemption value adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
(1,323
|
)
|
||||||
Equity issued in business combinations
|
—
|
|
|
—
|
|
|
1,000
|
|
|
1,000
|
|
|
|
30,963
|
|
|
—
|
|
||||||
Change in the redemption value of redeemable interests
|
(66,542
|
)
|
|
—
|
|
|
—
|
|
|
(66,542
|
)
|
|
|
(10,958
|
)
|
|
77,500
|
|
||||||
Distributions
|
(2,390
|
)
|
|
—
|
|
|
(78
|
)
|
|
(2,468
|
)
|
|
|
(2,925
|
)
|
|
(900
|
)
|
||||||
Balance at June 30, 2019
|
$
|
(128,869
|
)
|
|
$
|
(256
|
)
|
|
$
|
2,424
|
|
|
$
|
(126,701
|
)
|
|
|
$
|
65,906
|
|
|
$
|
110,596
|
|
|
|
For the Six Months Ended June 30,
|
||||||
(in thousands)
|
|
2020
|
|
2019
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
(3,152
|
)
|
|
$
|
6,783
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
8,451
|
|
|
3,987
|
|
||
Change in fair value of contingent consideration
|
|
6,242
|
|
|
(3,757
|
)
|
||
Share-based compensation expense
|
|
3,117
|
|
|
31
|
|
||
Payment of contingent earnout consideration in excess of purchase price accrual
|
|
(1,316
|
)
|
|
—
|
|
||
Amortization of deferred financing costs
|
|
195
|
|
|
731
|
|
||
Loss on extinguishment of debt
|
|
—
|
|
|
115
|
|
||
Issuance and vesting of Management Incentive Units
|
|
—
|
|
|
360
|
|
||
Participation unit compensation
|
|
—
|
|
|
61
|
|
||
Changes in operating assets and liabilities, net of effect of acquisitions:
|
|
|
|
|
||||
Premiums, commissions and fees receivable, net
|
|
(9,464
|
)
|
|
8,309
|
|
||
Prepaid expenses and other current assets
|
|
(334
|
)
|
|
(439
|
)
|
||
Due from related parties
|
|
(78
|
)
|
|
114
|
|
||
Accounts payable, accrued expenses and other current liabilities
|
|
39,983
|
|
|
(7,981
|
)
|
||
Other liabilities
|
|
—
|
|
|
548
|
|
||
Net cash provided by operating activities
|
|
43,644
|
|
|
8,862
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Capital expenditures
|
|
(2,619
|
)
|
|
(780
|
)
|
||
Investment in business venture
|
|
—
|
|
|
(200
|
)
|
||
Cash consideration paid for asset acquisitions, net of cash received
|
|
(695
|
)
|
|
(375
|
)
|
||
Cash consideration paid for business combinations, net of cash received
|
|
(224,112
|
)
|
|
(76,186
|
)
|
||
Net cash used in investing activities
|
|
(227,426
|
)
|
|
(77,541
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Proceeds from issuance of Class A common stock, net of underwriting discounts
|
|
167,346
|
|
|
—
|
|
||
Repurchase/redemption of LLC Units and Class B common stock
|
|
(32,610
|
)
|
|
—
|
|
||
Payment of common stock offering costs
|
|
(769
|
)
|
|
—
|
|
||
Payment of contingent and guaranteed earnout consideration
|
|
(665
|
)
|
|
(813
|
)
|
||
Proceeds from revolving line of credit
|
|
185,637
|
|
|
55,795
|
|
||
Proceeds from related party debt
|
|
—
|
|
|
38,920
|
|
||
Payments on long-term debt
|
|
—
|
|
|
(205
|
)
|
||
Payments of debt issuance costs and debt extinguishment costs
|
|
(1,918
|
)
|
|
(15
|
)
|
||
Proceeds from repayment of stockholder/member notes receivable
|
|
115
|
|
|
144
|
|
||
Repurchase of common units
|
|
—
|
|
|
(12,500
|
)
|
||
Distributions
|
|
—
|
|
|
(6,292
|
)
|
||
Other
|
|
11
|
|
|
1,479
|
|
||
Net cash provided by financing activities
|
|
317,147
|
|
|
76,513
|
|
||
Net increase in cash and cash equivalents and restricted cash
|
|
133,365
|
|
|
7,834
|
|
||
Cash and cash equivalents and restricted cash at beginning of period
|
|
71,071
|
|
|
7,995
|
|
||
Cash and cash equivalents and restricted cash at end of period
|
|
$
|
204,436
|
|
|
$
|
15,829
|
|
BRP GROUP, INC.
|
||||||||
Condensed Consolidated Statements of Cash Flows (Continued)
|
||||||||
(Unaudited)
|
||||||||
|
|
For the Six Months Ended June 30,
|
||||||
(in thousands)
|
|
2020
|
|
2019
|
||||
Supplemental schedule of cash flow information:
|
|
|
|
|
||||
Cash paid during the period for interest
|
|
$
|
1,486
|
|
|
$
|
4,102
|
|
Disclosure of non-cash investing and financing activities:
|
|
|
|
|
||||
Equity issued in business combinations
|
|
52,130
|
|
|
31,963
|
|
||
Contingent earnout consideration issuances
|
|
25,188
|
|
|
25,619
|
|
||
Change in the redemption value of redeemable interests
|
|
—
|
|
|
66,542
|
|
||
Capitalization of issuance to redeemable common member
|
|
—
|
|
|
5,509
|
|
||
Debt issuance costs added to revolving line of credit
|
|
—
|
|
|
2,554
|
|
||
Transfer of long-term debt to revolving line of credit
|
|
—
|
|
|
1,820
|
|
•
|
Lanier, a Middle Market Partner effective January 1, 2020, was made to expand the Company’s Middle Market presence in the healthcare, higher education, construction, property and non-profit businesses throughout Florida and other states.
|
•
|
Highland, a Specialty Partner effective January 1, 2020, was made to expand the Company’s Specialty presence in the healthcare and cyber insurance businesses and to add capabilities within the real estate business.
|
•
|
AgencyRM, a Medicare Partner effective February 1, 2020, was made to expand the Company’s Medicare business presence in Texas.
|
•
|
VibrantUSA, a Medicare Partner effective February 1, 2020, was made to expand the Company’s Medicare business presence in Washington.
|
•
|
IRP, a Middle Market Partner effective April 1, 2020, was made to expand the Company’s capabilities within the energy and infrastructure business.
|
•
|
Southern Protective Group, a Middle Market Partner effective May 1, 2020, was made to expand the Company's risk consulting capabilities in the medical malpractice market.
|
•
|
Pendulum, a Specialty Partner effective May 1, 2020, was made to expand the Company's specialty risk consulting capabilities in the long-term care and senior living markets.
|
•
|
Rosenthal, a Middle Market Partner effective June 1, 2020, was made to expand the Company’s capabilities within the habitational real estate industry.
|
•
|
TBA/RBA, a Middle Market Partner effective June 1, 2020, was made to expand the Company’s employee benefits business in Tennessee and across the Southeastern U.S.
|
(in thousands)
|
Lanier
|
|
Highland
|
|
IRP
|
|
Rosenthal
|
|
TBA/RBA
|
|
All Others
|
|
Totals
|
||||||||||||||
Cash consideration paid
|
$
|
24,450
|
|
|
$
|
6,603
|
|
|
$
|
26,223
|
|
|
$
|
75,936
|
|
|
$
|
76,272
|
|
|
$
|
22,253
|
|
|
$
|
231,737
|
|
Fair value of contingent earnout consideration
|
1,628
|
|
|
788
|
|
|
5,521
|
|
|
7,051
|
|
|
7,000
|
|
|
3,200
|
|
|
25,188
|
|
|||||||
Fair value of equity interest
|
6,119
|
|
|
4,500
|
|
|
7,535
|
|
|
10,147
|
|
|
21,427
|
|
|
2,402
|
|
|
52,130
|
|
|||||||
Deferred payment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300
|
|
|
—
|
|
|
300
|
|
|||||||
Total consideration
|
$
|
32,197
|
|
|
$
|
11,891
|
|
|
$
|
39,279
|
|
|
$
|
93,134
|
|
|
$
|
104,999
|
|
|
$
|
27,855
|
|
|
$
|
309,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash
|
$
|
2,413
|
|
|
$
|
1,542
|
|
|
$
|
1,694
|
|
|
$
|
954
|
|
|
$
|
—
|
|
|
$
|
1,022
|
|
|
$
|
7,625
|
|
Premiums, commissions and fees receivable
|
2,494
|
|
|
5,977
|
|
|
3,229
|
|
|
4,734
|
|
|
8,731
|
|
|
1,598
|
|
|
26,763
|
|
|||||||
Property and equipment
|
294
|
|
|
—
|
|
|
123
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
444
|
|
|||||||
Other assets
|
168
|
|
|
13
|
|
|
22
|
|
|
11
|
|
|
—
|
|
|
16
|
|
|
230
|
|
|||||||
Intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||
Purchased customer accounts
|
6,308
|
|
|
—
|
|
|
8,262
|
|
|
33,670
|
|
|
53,900
|
|
|
4,993
|
|
|
107,133
|
|
|||||||
Distributor relationships
|
—
|
|
|
6,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,100
|
|
|
14,600
|
|
|||||||
Carrier relationships
|
—
|
|
|
659
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
659
|
|
|||||||
Software
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
565
|
|
|
565
|
|
|||||||
Trade names
|
—
|
|
|
214
|
|
|
—
|
|
|
939
|
|
|
179
|
|
|
57
|
|
|
1,389
|
|
|||||||
Goodwill
|
23,739
|
|
|
4,228
|
|
|
30,250
|
|
|
56,253
|
|
|
44,264
|
|
|
12,322
|
|
|
171,056
|
|
|||||||
Total assets acquired
|
35,416
|
|
|
19,133
|
|
|
43,580
|
|
|
96,561
|
|
|
107,074
|
|
|
28,700
|
|
|
330,464
|
|
|||||||
Premiums and producer commissions payable
|
(2,954
|
)
|
|
(6,374
|
)
|
|
(4,301
|
)
|
|
(3,427
|
)
|
|
(2,075
|
)
|
|
(584
|
)
|
|
(19,715
|
)
|
|||||||
Accrued expenses and other current liabilities
|
(265
|
)
|
|
(868
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(261
|
)
|
|
(1,394
|
)
|
|||||||
Total liabilities acquired
|
(3,219
|
)
|
|
(7,242
|
)
|
|
(4,301
|
)
|
|
(3,427
|
)
|
|
(2,075
|
)
|
|
(845
|
)
|
|
(21,109
|
)
|
|||||||
Net assets acquired
|
$
|
32,197
|
|
|
$
|
11,891
|
|
|
$
|
39,279
|
|
|
$
|
93,134
|
|
|
$
|
104,999
|
|
|
$
|
27,855
|
|
|
$
|
309,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Maximum potential contingent earnout consideration (1)
|
$
|
11,000
|
|
|
$
|
2,450
|
|
|
$
|
44,399
|
|
|
$
|
30,843
|
|
|
$
|
30,147
|
|
|
$
|
8,689
|
|
|
$
|
127,528
|
|
(1)
|
IRP has an uncapped earnout. The maximum potential earnout consideration represented has been calculated assuming 50% compound annual revenue growth for three years.
|
|
Weighted-Average Life
|
Purchased customer accounts
|
19.1 years
|
Distributor relationships
|
20.0 years
|
Carrier relationships
|
0.8 years
|
Software
|
2.0 years
|
Trade names
|
4.3 years
|
(in thousands)
|
|
Amount
|
||
For the remainder of 2020
|
|
$
|
4,780
|
|
2021
|
|
8,775
|
|
|
2022
|
|
8,490
|
|
|
2023
|
|
8,313
|
|
|
2024
|
|
8,096
|
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
(in thousands, except per share data)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Pro forma results:
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
$
|
55,821
|
|
|
$
|
50,809
|
|
|
$
|
133,905
|
|
|
$
|
105,645
|
|
Net income (loss)
|
|
(8,178
|
)
|
|
(4,115
|
)
|
|
6,144
|
|
|
8,656
|
|
||||
Net income (loss) attributable to BRP Group, Inc.
|
|
(2,845
|
)
|
|
|
|
2,030
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per share
|
|
$
|
(0.14
|
)
|
|
|
|
$
|
0.10
|
|
|
|
||||
Diluted earnings (loss) per share
|
|
$
|
(0.14
|
)
|
|
|
|
$
|
0.10
|
|
|
|
||||
Weighted-average shares of Class A common stock outstanding - basic
|
|
20,426
|
|
|
|
|
19,983
|
|
|
|
||||||
Weighted-average shares of Class A common stock outstanding - diluted
|
|
20,426
|
|
|
|
|
20,344
|
|
|
|
|
|
At June 30, 2020
|
||||||||||||||
(in thousands)
|
|
Laureate
|
|
Smith
|
|
Saunders
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
$
|
58
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
60
|
|
Premiums, commissions and fees receivable, net
|
|
—
|
|
|
88
|
|
|
79
|
|
|
167
|
|
||||
Total current assets
|
|
58
|
|
|
88
|
|
|
81
|
|
|
227
|
|
||||
Property and equipment, net
|
|
26
|
|
|
—
|
|
|
—
|
|
|
26
|
|
||||
Other assets
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Total assets
|
|
$
|
89
|
|
|
$
|
88
|
|
|
$
|
81
|
|
|
$
|
258
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Premiums payable to insurance companies
|
|
$
|
7
|
|
|
$
|
49
|
|
|
$
|
3
|
|
|
$
|
59
|
|
Producer commissions payable
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Accrued expenses and other current liabilities
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||
Total liabilities
|
|
$
|
15
|
|
|
$
|
49
|
|
|
$
|
3
|
|
|
$
|
67
|
|
|
|
At December 31, 2019
|
||||||||||||||
(in thousands)
|
|
Laureate
|
|
Smith
|
|
Saunders
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
$
|
46
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
47
|
|
Premiums, commissions and fees receivable, net
|
|
—
|
|
|
44
|
|
|
31
|
|
|
75
|
|
||||
Total current assets
|
|
46
|
|
|
45
|
|
|
31
|
|
|
122
|
|
||||
Property and equipment, net
|
|
31
|
|
|
—
|
|
|
—
|
|
|
31
|
|
||||
Other assets
|
|
5
|
|
|
—
|
|
|
2
|
|
|
7
|
|
||||
Total assets
|
|
$
|
82
|
|
|
$
|
45
|
|
|
$
|
33
|
|
|
$
|
160
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Premiums payable to insurance companies
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
6
|
|
Producer commissions payable
|
|
2
|
|
|
5
|
|
|
8
|
|
|
15
|
|
||||
Accrued expenses and other current liabilities
|
|
4
|
|
|
25
|
|
|
—
|
|
|
29
|
|
||||
Total liabilities
|
|
$
|
9
|
|
|
$
|
30
|
|
|
$
|
11
|
|
|
$
|
50
|
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Direct bill revenue (1)
|
|
$
|
22,430
|
|
|
$
|
15,990
|
|
|
$
|
50,539
|
|
|
$
|
35,594
|
|
Agency bill revenue (2)
|
|
20,256
|
|
|
12,261
|
|
|
36,685
|
|
|
16,831
|
|
||||
Profit-sharing revenue (3)
|
|
2,626
|
|
|
1,837
|
|
|
7,750
|
|
|
6,290
|
|
||||
Policy fee and installment fee revenue (4)
|
|
3,653
|
|
|
2,393
|
|
|
7,035
|
|
|
2,393
|
|
||||
Consulting and service fee revenue (5)
|
|
793
|
|
|
579
|
|
|
1,508
|
|
|
1,226
|
|
||||
Other income (6)
|
|
1,510
|
|
|
—
|
|
|
1,910
|
|
|
563
|
|
||||
Total commissions and fees
|
|
$
|
51,268
|
|
|
$
|
33,060
|
|
|
$
|
105,427
|
|
|
$
|
62,897
|
|
(1)
|
Direct bill revenue represents commission revenue earned by facilitating the arrangement between individuals or businesses and Insurance Company Partners by providing insurance placement services to Clients, primarily for private risk management, commercial risk management, employee benefits and Medicare insurance types.
|
(2)
|
Agency bill revenue primarily represents commission revenue earned by facilitating the arrangement between individuals or businesses and Insurance Company Partners by providing insurance placement services to Clients. The Company acts as an agent on behalf of the Client 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 Company Partners.
|
(4)
|
Policy fee revenue represents revenue earned for acting in the capacity of an MGA on behalf of the Insurance Company Partner and fulfilling certain services including delivery of policy documents, processing payments and other administrative functions. Installment fee revenue represents revenue earned by the Company for providing payment processing services on behalf of the Insurance Company Partner related to policy premiums paid on an installment basis.
|
(5)
|
Service fee revenue is earned by receiving negotiated fees in lieu of a commission and consulting revenue is earned by providing specialty insurance consulting.
|
(6)
|
Other income consists of Medicare marketing income that is based on agreed-upon cost reimbursement for fulfilling specific targeted marketing campaigns in addition to other fee income and premium financing income generated across all Operating Groups.
|
•
|
The Company considers the policyholders as representative of its customers in the majority of contractual relationships, with the exception of contracts in its Medicare operating segment, where the Insurance Company Partner is considered its customer.
|
•
|
Contracts in the Medicare operating segment are multi-year arrangements in which the Company is entitled to renewal commissions. However, the Company has applied a constraint to renewal commission that limits revenue recognized on new policies to the policy year in effect, and revenue recognized on renewed policies to the receipt of periodic cash, when a risk of significant reversals exists based on: (i) insufficient history; and (ii) the influence of external factors outside of the Company’s control, including policyholder discretion over plans and Insurance Company Partner relationship, political influence, and a contractual provision, which limits the Company’s right to receive renewal commissions to ongoing compliance and regulatory approval of the relevant Insurance Company Partner and compliance with the Centers for Medicare and Medicaid Services.
|
•
|
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 revenue.
|
•
|
Costs to obtain a contract are deferred and recognized over five years, which represents management’s estimate of the average period over which a Client maintains its initial coverage relationship with the original Insurance Company Partner.
|
•
|
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)
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
Contract assets
|
|
$
|
74,126
|
|
|
$
|
47,337
|
|
Contract liabilities
|
|
4,213
|
|
|
5,349
|
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Balance at beginning of period
|
|
$
|
3,792
|
|
|
$
|
3,003
|
|
|
$
|
3,621
|
|
|
$
|
2,882
|
|
Costs capitalized
|
|
617
|
|
|
333
|
|
|
1,109
|
|
|
681
|
|
||||
Amortization
|
|
(349
|
)
|
|
(242
|
)
|
|
(670
|
)
|
|
(469
|
)
|
||||
Balance at end of period
|
|
$
|
4,060
|
|
|
$
|
3,094
|
|
|
$
|
4,060
|
|
|
$
|
3,094
|
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||||||||||||||||||||
(in thousands)
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
||||||||||||
Purchased customer accounts
|
|
$
|
161,815
|
|
|
$
|
(12,800
|
)
|
|
$
|
149,015
|
|
|
$
|
53,987
|
|
|
$
|
(9,143
|
)
|
|
$
|
44,844
|
|
Software
|
|
31,161
|
|
|
(8,196
|
)
|
|
22,965
|
|
|
30,590
|
|
|
(5,070
|
)
|
|
25,520
|
|
||||||
Distributor relationships
|
|
27,600
|
|
|
(816
|
)
|
|
26,784
|
|
|
13,000
|
|
|
(331
|
)
|
|
12,669
|
|
||||||
Carrier relationships
|
|
7,859
|
|
|
(687
|
)
|
|
7,172
|
|
|
7,200
|
|
|
(170
|
)
|
|
7,030
|
|
||||||
Trade names
|
|
4,002
|
|
|
(485
|
)
|
|
3,517
|
|
|
2,613
|
|
|
(226
|
)
|
|
2,387
|
|
||||||
Totals
|
|
$
|
232,437
|
|
|
$
|
(22,984
|
)
|
|
$
|
209,453
|
|
|
$
|
107,390
|
|
|
$
|
(14,940
|
)
|
|
$
|
92,450
|
|
(in thousands)
|
|
Middle Market
|
|
Specialty
|
|
MainStreet
|
|
Medicare
|
|
Total
|
||||||||||
Balance at December 31, 2019
|
|
$
|
52,932
|
|
|
$
|
60,115
|
|
|
$
|
38,892
|
|
|
$
|
12,531
|
|
|
$
|
164,470
|
|
Goodwill of acquired businesses
|
|
159,743
|
|
|
6,219
|
|
|
—
|
|
|
5,094
|
|
|
171,056
|
|
|||||
Balance at June 30, 2020
|
|
$
|
212,675
|
|
|
$
|
66,334
|
|
|
$
|
38,892
|
|
|
$
|
17,625
|
|
|
$
|
335,526
|
|
|
|
Shares
|
|
Weighted-Average Grant-Date Fair Value Per Share
|
|
Weighted-Average Contractual Term (in years)
|
|
Aggregate Intrinsic Value (in thousands)
|
|||||
Outstanding at December 31, 2019
|
|
330,244
|
|
|
$
|
14.00
|
|
|
3.66
|
|
$
|
677
|
|
Granted
|
|
238,691
|
|
|
11.22
|
|
|
1.88
|
|
|
|||
Vested and settled
|
|
(152,206
|
)
|
|
11.08
|
|
|
|
|
—
|
|
||
Forfeited
|
|
(18,705
|
)
|
|
14.01
|
|
|
|
|
|
|||
Outstanding at June 30, 2020
|
|
398,024
|
|
|
$
|
13.45
|
|
|
3.40
|
|
$
|
1,522
|
|
(in thousands, except per share data)
|
|
For the Three Months Ended June 30, 2020
|
|
For the Six Months Ended June 30, 2020
|
||||
Basic and diluted net loss per share:
|
|
|
|
|
||||
Net loss attributable to BRP Group, Inc.
|
|
$
|
(3,588
|
)
|
|
$
|
(2,120
|
)
|
Shares used for basic net loss per share:
|
|
|
|
|
||||
Basic and diluted weighted-average shares of Class A common stock outstanding
|
|
20,426
|
|
19,960
|
||||
Basic and diluted net loss per share
|
|
$
|
(0.18
|
)
|
|
$
|
(0.11
|
)
|
Level 1:
|
Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.
|
Level 2:
|
Inputs to the valuation methodology are quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
|
Level 3:
|
Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
|
(in thousands)
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
Level 3
|
|
|
|
|
||||
Contingently returnable consideration
|
|
$
|
387
|
|
|
$
|
70
|
|
Level 3 Assets
|
|
$
|
387
|
|
|
$
|
70
|
|
|
|
|
|
|
||||
Contingent earnout liabilities
|
|
$
|
78,535
|
|
|
$
|
48,769
|
|
Level 3 Liabilities
|
|
$
|
78,535
|
|
|
$
|
48,769
|
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||||||||||
(in thousands)
|
|
Contingently Returnable Consideration
|
|
Contingent Earnout Liabilities
|
|
Contingent Earnout Liabilities
|
|
Contingently Returnable Consideration
|
|
Contingent Earnout Liabilities
|
|
Contingent Earnout Liabilities
|
||||||||||||
Balance at beginning of period
|
|
$
|
258
|
|
|
$
|
53,855
|
|
|
$
|
6,463
|
|
|
$
|
70
|
|
|
$
|
48,769
|
|
|
$
|
9,249
|
|
Fair value of contingent consideration issuances
|
|
—
|
|
|
21,951
|
|
|
25,619
|
|
|
—
|
|
|
25,188
|
|
|
25,619
|
|
||||||
Change in fair value of contingent consideration
|
|
129
|
|
|
4,710
|
|
|
(971
|
)
|
|
317
|
|
|
6,559
|
|
|
(3,757
|
)
|
||||||
Payment of contingent consideration
|
|
—
|
|
|
(1,981
|
)
|
|
—
|
|
|
—
|
|
|
(1,981
|
)
|
|
—
|
|
||||||
Balance at end of period
|
|
$
|
387
|
|
|
$
|
78,535
|
|
|
$
|
31,111
|
|
|
$
|
387
|
|
|
$
|
78,535
|
|
|
$
|
31,111
|
|
•
|
Middle Market provides private risk management, commercial risk management and employee benefits solutions for mid-to-large size businesses and high net worth individuals and families.
|
•
|
Specialty represents a wholesale co-brokerage platform that delivers specialty insurers, professionals, individuals and niche industry businesses expanded access to exclusive specialty markets, capabilities and programs requiring complex underwriting and placement. Specialty also represents a leading technology platform, MGA of the Future, which is a national renter’s insurance product distributed via sub-agent partners and property management software providers, which has expanded distribution capabilities for new products through our wholesale and retail networks.
|
•
|
MainStreet offers personal insurance, commercial insurance and life and health solutions to individuals and businesses in their communities.
|
•
|
Medicare offers consultation for government assistance programs and solutions, including traditional Medicare and Medicare Advantage, to seniors and Medicare-eligible individuals through a network of agents.
|
|
For the Three Months Ended June 30, 2020
|
||||||||||||||||||||||
(in thousands)
|
Middle Market
|
|
Specialty
|
|
MainStreet
|
|
Medicare
|
|
Corporate and Other
|
|
Total
|
||||||||||||
Commissions and fees
|
$
|
20,718
|
|
|
$
|
19,456
|
|
|
$
|
7,704
|
|
|
$
|
3,390
|
|
|
$
|
—
|
|
|
$
|
51,268
|
|
Net income (loss)
|
2,425
|
|
|
(3,223
|
)
|
|
956
|
|
|
(167
|
)
|
|
(7,850
|
)
|
|
(7,859
|
)
|
|
For the Three Months Ended June 30, 2019
|
||||||||||||||||||||||
(in thousands)
|
Middle Market
|
|
Specialty
|
|
MainStreet
|
|
Medicare
|
|
Corporate and Other
|
|
Total
|
||||||||||||
Commissions and fees
|
$
|
12,106
|
|
|
$
|
12,934
|
|
|
$
|
5,769
|
|
|
$
|
2,251
|
|
|
$
|
—
|
|
|
$
|
33,060
|
|
Net income (loss)
|
2,280
|
|
|
(767
|
)
|
|
1,311
|
|
|
605
|
|
|
(6,388
|
)
|
|
(2,959
|
)
|
|
For the Six Months Ended June 30, 2020
|
||||||||||||||||||||||
(in thousands)
|
Middle Market
|
|
Specialty
|
|
MainStreet
|
|
Medicare
|
|
Corporate and Other
|
|
Total
|
||||||||||||
Commissions and fees
|
$
|
42,750
|
|
|
$
|
36,872
|
|
|
$
|
16,012
|
|
|
$
|
9,793
|
|
|
$
|
—
|
|
|
$
|
105,427
|
|
Net income (loss)
|
10,614
|
|
|
(4,912
|
)
|
|
2,200
|
|
|
2,447
|
|
|
(13,501
|
)
|
|
(3,152
|
)
|
|
For the Six Months Ended June 30, 2019
|
||||||||||||||||||||||
(in thousands)
|
Middle Market
|
|
Specialty
|
|
MainStreet
|
|
Medicare
|
|
Corporate and Other
|
|
Total
|
||||||||||||
Commissions and fees
|
$
|
28,645
|
|
|
$
|
15,765
|
|
|
$
|
12,300
|
|
|
$
|
6,187
|
|
|
$
|
—
|
|
|
$
|
62,897
|
|
Net income (loss)
|
10,180
|
|
|
(600
|
)
|
|
3,580
|
|
|
2,445
|
|
|
(8,822
|
)
|
|
6,783
|
|
(in thousands)
|
Middle Market
|
|
Specialty
|
|
MainStreet
|
|
Medicare
|
|
Corporate and Other
|
|
Total
|
||||||||||||
Total assets at June 30, 2020
|
$
|
446,363
|
|
|
$
|
178,815
|
|
|
$
|
58,806
|
|
|
$
|
32,700
|
|
|
$
|
152,984
|
|
|
$
|
869,668
|
|
Total assets at December 31, 2019
|
105,353
|
|
|
154,983
|
|
|
60,253
|
|
|
17,533
|
|
|
60,646
|
|
|
398,768
|
|
•
|
Middle Market provides expertly-designed private risk management, commercial risk management and employee benefits solutions for mid-to-large-size businesses and high net worth individuals, as well as their families.
|
•
|
MainStreet offers personal insurance, commercial insurance and life and health solutions to individuals and businesses in their communities.
|
•
|
Medicare offers consultation for government assistance programs and solutions to seniors and Medicare-eligible individuals through a network of agents.
|
•
|
Specialty delivers specialty insurers, professionals, individuals and niche industry businesses expanded access to exclusive specialty markets, capabilities and programs requiring complex underwriting and placement.
|
|
For the Three Months Ended June 30,
|
|
|
|
For the Six Months Ended June 30,
|
|
|
||||||||||||||||
(in thousands)
|
2020
|
|
2019
|
|
Variance
|
|
2020
|
|
2019
|
|
Variance
|
||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commissions and fees
|
$
|
51,268
|
|
|
$
|
33,060
|
|
|
$
|
18,208
|
|
|
$
|
105,427
|
|
|
$
|
62,897
|
|
|
$
|
42,530
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commissions, employee compensation and benefits
|
39,263
|
|
|
23,994
|
|
|
15,269
|
|
|
73,811
|
|
|
40,280
|
|
|
33,531
|
|
||||||
Other operating expenses
|
9,546
|
|
|
6,389
|
|
|
3,157
|
|
|
18,431
|
|
|
10,391
|
|
|
8,040
|
|
||||||
Amortization expense
|
4,450
|
|
|
2,835
|
|
|
1,615
|
|
|
8,046
|
|
|
3,711
|
|
|
4,335
|
|
||||||
Change in fair value of contingent consideration
|
4,581
|
|
|
(971
|
)
|
|
5,552
|
|
|
6,242
|
|
|
(3,757
|
)
|
|
9,999
|
|
||||||
Depreciation expense
|
240
|
|
|
149
|
|
|
91
|
|
|
405
|
|
|
276
|
|
|
129
|
|
||||||
Total operating expenses
|
58,080
|
|
|
32,396
|
|
|
25,684
|
|
|
106,935
|
|
|
50,901
|
|
|
56,034
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating income (loss)
|
(6,812
|
)
|
|
664
|
|
|
(7,476
|
)
|
|
(1,508
|
)
|
|
11,996
|
|
|
(13,504
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense, net
|
(1,047
|
)
|
|
(3,623
|
)
|
|
2,576
|
|
|
(1,632
|
)
|
|
(5,213
|
)
|
|
3,581
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) before income taxes
|
(7,859
|
)
|
|
(2,959
|
)
|
|
(4,900
|
)
|
|
(3,140
|
)
|
|
6,783
|
|
|
(9,923
|
)
|
||||||
Income tax provision
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||||
Net income (loss)
|
(7,859
|
)
|
|
(2,959
|
)
|
|
(4,900
|
)
|
|
(3,152
|
)
|
|
6,783
|
|
|
(9,935
|
)
|
||||||
Less: net income (loss) attributable to noncontrolling interests
|
(4,271
|
)
|
|
(2,959
|
)
|
|
(1,312
|
)
|
|
(1,032
|
)
|
|
6,783
|
|
|
(7,815
|
)
|
||||||
Net loss attributable to BRP Group, Inc.
|
$
|
(3,588
|
)
|
|
$
|
—
|
|
|
$
|
(3,588
|
)
|
|
$
|
(2,120
|
)
|
|
$
|
—
|
|
|
$
|
(2,120
|
)
|
|
|
For the Three Months Ended June 30,
|
|
|
|
For the Six Months Ended June 30,
|
|
|
||||||||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
Variance
|
|
2020
|
|
2019
|
|
Variance
|
||||||||||||
Direct bill revenue
|
|
$
|
22,430
|
|
|
$
|
15,990
|
|
|
$
|
6,440
|
|
|
$
|
50,539
|
|
|
$
|
35,594
|
|
|
$
|
14,945
|
|
Agency bill revenue
|
|
20,256
|
|
|
12,261
|
|
|
7,995
|
|
|
36,685
|
|
|
16,831
|
|
|
19,854
|
|
||||||
Profit-sharing revenue
|
|
2,626
|
|
|
1,837
|
|
|
789
|
|
|
7,750
|
|
|
6,290
|
|
|
1,460
|
|
||||||
Policy fee and installment fee revenue
|
|
3,653
|
|
|
2,393
|
|
|
1,260
|
|
|
7,035
|
|
|
2,393
|
|
|
4,642
|
|
||||||
Consulting and service fee revenue
|
|
793
|
|
|
579
|
|
|
214
|
|
|
1,508
|
|
|
1,226
|
|
|
282
|
|
||||||
Other income
|
|
1,510
|
|
|
—
|
|
|
1,510
|
|
|
1,910
|
|
|
563
|
|
|
1,347
|
|
||||||
Total commissions and fees
|
|
$
|
51,268
|
|
|
$
|
33,060
|
|
|
$
|
18,208
|
|
|
$
|
105,427
|
|
|
$
|
62,897
|
|
|
$
|
42,530
|
|
•
|
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.
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
(in thousands, except percentages)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Commissions and fees
|
|
$
|
51,268
|
|
|
$
|
33,060
|
|
|
$
|
105,427
|
|
|
$
|
62,897
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
$
|
(7,859
|
)
|
|
$
|
(2,959
|
)
|
|
$
|
(3,152
|
)
|
|
$
|
6,783
|
|
Adjustments to net income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Amortization expense
|
|
4,450
|
|
|
2,835
|
|
|
8,046
|
|
|
3,711
|
|
||||
Change in fair value of contingent consideration
|
|
4,581
|
|
|
(971
|
)
|
|
6,242
|
|
|
(3,757
|
)
|
||||
Share-based compensation
|
|
1,978
|
|
|
261
|
|
|
3,117
|
|
|
391
|
|
||||
Interest expense, net
|
|
1,047
|
|
|
3,623
|
|
|
1,632
|
|
|
5,213
|
|
||||
Depreciation expense
|
|
240
|
|
|
149
|
|
|
405
|
|
|
276
|
|
||||
Transaction-related Partnership expenses
|
|
2,020
|
|
|
313
|
|
|
3,868
|
|
|
570
|
|
||||
Severance related to Partnership activity
|
|
360
|
|
|
300
|
|
|
413
|
|
|
300
|
|
||||
Capital related expenses
|
|
1,000
|
|
|
1,008
|
|
|
1,000
|
|
|
1,046
|
|
||||
Income tax provision
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
||||
Other
|
|
568
|
|
|
—
|
|
|
834
|
|
|
155
|
|
||||
Adjusted EBITDA
|
|
$
|
8,385
|
|
|
$
|
4,559
|
|
|
$
|
22,417
|
|
|
$
|
14,688
|
|
Adjusted EBITDA Margin
|
|
16
|
%
|
|
14
|
%
|
|
21
|
%
|
|
23
|
%
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
(in thousands, except percentages)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Commissions and fees
|
|
$
|
51,268
|
|
|
$
|
33,060
|
|
|
$
|
105,427
|
|
|
$
|
62,897
|
|
Partnership commissions and fees (1)
|
|
(12,064
|
)
|
|
(13,947
|
)
|
|
(34,932
|
)
|
|
(19,305
|
)
|
||||
Organic Revenue
|
|
$
|
39,204
|
|
|
$
|
19,113
|
|
|
$
|
70,495
|
|
|
$
|
43,592
|
|
Organic Revenue Growth (2)
|
|
$
|
6,130
|
|
|
$
|
417
|
|
|
$
|
7,584
|
|
|
$
|
3,110
|
|
Organic Revenue Growth % (2)
|
|
19
|
%
|
|
2
|
%
|
|
12
|
%
|
|
8
|
%
|
(1)
|
Includes the first twelve months of such commissions and fees generated from newly acquired Partners.
|
(2)
|
Organic Revenue for the three and six months ended June 30, 2019 used to calculate Organic Revenue Growth for the three and six months ended June 30, 2020 was $33.1 million and $62.9 million, which is adjusted to reflect revenues from Partnerships that reached the twelve-month owned mark during the three and six months ended June 30, 2020.
|
(in thousands, except per share data)
|
|
For the Three Months Ended June 30, 2020
|
|
For the Six Months Ended June 30, 2020
|
||||
Net income (loss) attributable to BRP Group, Inc.
|
|
$
|
(3,588
|
)
|
|
$
|
(2,120
|
)
|
Net income (loss) attributable to noncontrolling interests
|
|
(4,271
|
)
|
|
(1,032
|
)
|
||
Amortization expense
|
|
4,450
|
|
|
8,046
|
|
||
Change in fair value of contingent consideration
|
|
4,581
|
|
|
6,242
|
|
||
Share-based compensation
|
|
1,978
|
|
|
3,117
|
|
||
Transaction-related Partnership expenses
|
|
2,020
|
|
|
3,868
|
|
||
Capital related expenses
|
|
1,000
|
|
|
1,000
|
|
||
Amortization of deferred financing costs
|
|
119
|
|
|
195
|
|
||
Severance related to Partnership activity
|
|
360
|
|
|
413
|
|
||
Other
|
|
568
|
|
|
834
|
|
||
Adjusted pre-tax income
|
|
7,217
|
|
|
20,563
|
|
||
Adjusted income taxes (1)
|
|
715
|
|
|
2,036
|
|
||
Adjusted Net Income
|
|
$
|
6,502
|
|
|
$
|
18,527
|
|
|
|
|
|
|
||||
Weighted-average shares of Class A common stock outstanding - diluted
|
|
20,426
|
|
|
19,960
|
|
||
Dilutive effect of unvested restricted shares of Class A common stock
|
|
365
|
|
|
344
|
|
||
Exchange of Class B shares (2)
|
|
45,466
|
|
|
44,503
|
|
||
Adjusted dilutive weighted-average shares outstanding
|
|
66,257
|
|
|
64,807
|
|
||
|
|
|
|
|
||||
Adjusted Diluted EPS
|
|
$
|
0.10
|
|
|
$
|
0.29
|
|
|
|
|
|
|
||||
Diluted loss per share
|
|
$
|
(0.18
|
)
|
|
$
|
(0.11
|
)
|
Effect of exchange of Class B shares and net income attributable to noncontrolling interests per share
|
|
0.06
|
|
|
0.06
|
|
||
Other adjustments to net income per share
|
|
0.23
|
|
|
0.37
|
|
||
Adjusted income taxes per share
|
|
(0.01
|
)
|
|
(0.03
|
)
|
||
Adjusted Diluted EPS
|
|
$
|
0.10
|
|
|
$
|
0.29
|
|
(1)
|
Represents corporate income taxes at assumed effective tax rate of 9.9% applied to adjusted pre-tax income.
|
(2)
|
Assumes the full exchange of Class B shares for Class A common stock pursuant to the Amended LLC Agreement.
|
Commissions and Fees by Operating Group (in thousands)
|
|||||||||||||||||||||||||||||||
|
For the Three Months Ended June 30,
|
|
|
|
For the Six Months Ended June 30,
|
|
|
||||||||||||||||||||||||
|
2020
|
2019
|
Variance
|
|
2020
|
2019
|
Variance
|
||||||||||||||||||||||||
Operating Group
|
Amount
|
Percent of Business
|
Amount
|
Percent of Business
|
Amount
|
%
|
|
Amount
|
Percent of Business
|
Amount
|
Percent of Business
|
Amount
|
%
|
||||||||||||||||||
Middle Market
|
$
|
20,718
|
|
40
|
%
|
$
|
12,106
|
|
37
|
%
|
$
|
8,612
|
|
71
|
%
|
|
$
|
42,750
|
|
41
|
%
|
$
|
28,645
|
|
46
|
%
|
$
|
14,105
|
|
49
|
%
|
Specialty
|
19,456
|
|
38
|
%
|
12,934
|
|
39
|
%
|
6,522
|
|
50
|
%
|
|
36,872
|
|
35
|
%
|
15,765
|
|
25
|
%
|
21,107
|
|
134
|
%
|
||||||
MainStreet
|
7,704
|
|
15
|
%
|
5,769
|
|
17
|
%
|
1,935
|
|
34
|
%
|
|
16,012
|
|
15
|
%
|
12,300
|
|
20
|
%
|
3,712
|
|
30
|
%
|
||||||
Medicare
|
3,390
|
|
7
|
%
|
2,251
|
|
7
|
%
|
1,139
|
|
51
|
%
|
|
9,793
|
|
9
|
%
|
6,187
|
|
10
|
%
|
3,606
|
|
58
|
%
|
||||||
|
$
|
51,268
|
|
|
$
|
33,060
|
|
|
$
|
18,208
|
|
|
|
$
|
105,427
|
|
|
$
|
62,897
|
|
|
$
|
42,530
|
|
|
Commissions, Employee Compensation and Benefits by Operating Group (in thousands)
|
|||||||||||||||||||||||||||||||
|
For the Three Months Ended June 30,
|
|
|
|
For the Six Months Ended June 30,
|
|
|
||||||||||||||||||||||||
|
2020
|
2019
|
Variance
|
|
2020
|
2019
|
Variance
|
||||||||||||||||||||||||
Operating Group
|
Amount
|
Percent of Business
|
Amount
|
Percent of Business
|
Amount
|
%
|
|
Amount
|
Percent of Business
|
Amount
|
Percent of Business
|
Amount
|
%
|
||||||||||||||||||
Middle Market
|
$
|
13,463
|
|
34
|
%
|
$
|
9,157
|
|
38
|
%
|
$
|
4,306
|
|
47
|
%
|
|
$
|
26,083
|
|
35
|
%
|
$
|
17,753
|
|
44
|
%
|
$
|
8,330
|
|
47
|
%
|
Specialty
|
15,330
|
|
39
|
%
|
9,305
|
|
39
|
%
|
6,025
|
|
65
|
%
|
|
28,131
|
|
38
|
%
|
11,858
|
|
29
|
%
|
16,273
|
|
137
|
%
|
||||||
MainStreet
|
4,810
|
|
12
|
%
|
3,286
|
|
14
|
%
|
1,524
|
|
46
|
%
|
|
8,772
|
|
12
|
%
|
6,369
|
|
16
|
%
|
2,403
|
|
38
|
%
|
||||||
Medicare
|
2,215
|
|
6
|
%
|
1,302
|
|
5
|
%
|
913
|
|
70
|
%
|
|
5,231
|
|
7
|
%
|
2,990
|
|
7
|
%
|
2,241
|
|
75
|
%
|
||||||
Corporate and Other
|
3,445
|
|
9
|
%
|
944
|
|
4
|
%
|
2,501
|
|
265
|
%
|
|
5,594
|
|
8
|
%
|
1,310
|
|
3
|
%
|
4,284
|
|
327
|
%
|
||||||
|
$
|
39,263
|
|
|
$
|
23,994
|
|
|
$
|
15,269
|
|
|
|
$
|
73,811
|
|
|
$
|
40,280
|
|
|
$
|
33,531
|
|
|
Other Operating Expenses by Operating Group (in thousands)
|
|||||||||||||||||||||||||||||||
|
For the Three Months Ended June 30,
|
|
|
|
For the Six Months Ended June 30,
|
|
|
||||||||||||||||||||||||
|
2020
|
2019
|
Variance
|
|
2020
|
2019
|
Variance
|
||||||||||||||||||||||||
Operating Group
|
Amount
|
Percent of Business
|
Amount
|
Percent of Business
|
Amount
|
%
|
|
Amount
|
Percent of Business
|
Amount
|
Percent of Business
|
Amount
|
%
|
||||||||||||||||||
Middle Market
|
$
|
2,878
|
|
30
|
%
|
$
|
2,205
|
|
35
|
%
|
$
|
673
|
|
31
|
%
|
|
$
|
5,619
|
|
30
|
%
|
$
|
3,997
|
|
38
|
%
|
$
|
1,622
|
|
41
|
%
|
Specialty
|
1,313
|
|
14
|
%
|
1,053
|
|
16
|
%
|
260
|
|
25
|
%
|
|
2,796
|
|
15
|
%
|
1,408
|
|
14
|
%
|
1,388
|
|
99
|
%
|
||||||
MainStreet
|
1,010
|
|
11
|
%
|
925
|
|
14
|
%
|
85
|
|
9
|
%
|
|
2,007
|
|
11
|
%
|
1,851
|
|
18
|
%
|
156
|
|
8
|
%
|
||||||
Medicare
|
997
|
|
10
|
%
|
412
|
|
6
|
%
|
585
|
|
142
|
%
|
|
1,787
|
|
10
|
%
|
885
|
|
9
|
%
|
902
|
|
102
|
%
|
||||||
Corporate and Other
|
3,348
|
|
35
|
%
|
1,794
|
|
28
|
%
|
1,554
|
|
87
|
%
|
|
6,222
|
|
34
|
%
|
2,250
|
|
22
|
%
|
3,972
|
|
177
|
%
|
||||||
|
$
|
9,546
|
|
|
$
|
6,389
|
|
|
$
|
3,157
|
|
|
|
$
|
18,431
|
|
|
$
|
10,391
|
|
|
$
|
8,040
|
|
|
Amortization Expense by Operating Group (in thousands)
|
|||||||||||||||||||||||||||||||
|
For the Three Months Ended June 30,
|
|
|
|
For the Six Months Ended June 30,
|
|
|
||||||||||||||||||||||||
|
2020
|
2019
|
Variance
|
|
2020
|
2019
|
Variance
|
||||||||||||||||||||||||
Operating Group
|
Amount
|
Percent of Business
|
Amount
|
Percent of Business
|
Amount
|
%
|
|
Amount
|
Percent of Business
|
Amount
|
Percent of Business
|
Amount
|
%
|
||||||||||||||||||
Middle Market
|
$
|
1,384
|
|
31
|
%
|
$
|
496
|
|
17
|
%
|
$
|
888
|
|
179
|
%
|
|
$
|
1,955
|
|
24
|
%
|
$
|
797
|
|
21
|
%
|
$
|
1,158
|
|
145
|
%
|
Specialty
|
2,325
|
|
52
|
%
|
2,036
|
|
72
|
%
|
289
|
|
14
|
%
|
|
4,691
|
|
58
|
%
|
2,303
|
|
62
|
%
|
2,388
|
|
104
|
%
|
||||||
MainStreet
|
445
|
|
10
|
%
|
191
|
|
7
|
%
|
254
|
|
133
|
%
|
|
876
|
|
11
|
%
|
385
|
|
10
|
%
|
491
|
|
128
|
%
|
||||||
Medicare
|
291
|
|
7
|
%
|
94
|
|
3
|
%
|
197
|
|
210
|
%
|
|
516
|
|
6
|
%
|
190
|
|
5
|
%
|
326
|
|
172
|
%
|
||||||
Corporate and Other
|
5
|
|
—
|
%
|
18
|
|
1
|
%
|
(13
|
)
|
(72
|
)%
|
|
8
|
|
—
|
%
|
36
|
|
1
|
%
|
(28
|
)
|
(78
|
)%
|
||||||
|
$
|
4,450
|
|
|
$
|
2,835
|
|
|
$
|
1,615
|
|
|
|
$
|
8,046
|
|
|
$
|
3,711
|
|
|
$
|
4,335
|
|
|
Change in Fair Value of Contingent Consideration by Operating Group (in thousands)
|
|||||||||||||||||||||||||||||||
|
For the Three Months Ended June 30,
|
|
|
|
For the Six Months Ended June 30,
|
|
|
||||||||||||||||||||||||
|
2020
|
2019
|
Variance
|
|
2020
|
2019
|
Variance
|
||||||||||||||||||||||||
Operating Group
|
Amount
|
Percent of Business
|
Amount
|
Percent of Business
|
Amount
|
%
|
|
Amount
|
Percent of Business
|
Amount
|
Percent of Business
|
Amount
|
%
|
||||||||||||||||||
Middle Market
|
$
|
444
|
|
10
|
%
|
$
|
(2,116
|
)
|
218
|
%
|
$
|
2,560
|
|
(121
|
)%
|
|
$
|
(1,722
|
)
|
(28
|
)%
|
$
|
(4,234
|
)
|
113
|
%
|
$
|
2,512
|
|
(59
|
)%
|
Specialty
|
3,671
|
|
80
|
%
|
1,295
|
|
(133
|
)%
|
2,376
|
|
183
|
%
|
|
6,118
|
|
98
|
%
|
777
|
|
(21
|
)%
|
5,341
|
|
n/m
|
|
||||||
MainStreet
|
427
|
|
9
|
%
|
16
|
|
(2
|
)%
|
411
|
|
n/m
|
|
|
2,054
|
|
33
|
%
|
31
|
|
(1
|
)%
|
2,023
|
|
n/m
|
|
||||||
Medicare
|
39
|
|
1
|
%
|
(166
|
)
|
17
|
%
|
205
|
|
(123
|
)%
|
|
(208
|
)
|
(3
|
)%
|
(331
|
)
|
9
|
%
|
123
|
|
(37
|
)%
|
||||||
|
$
|
4,581
|
|
|
$
|
(971
|
)
|
|
$
|
5,552
|
|
|
|
$
|
6,242
|
|
|
$
|
(3,757
|
)
|
|
$
|
9,999
|
|
|
n/m
|
not meaningful
|
Total Net Leverage Ratio
|
|
Applicable Margin for Eurodollar Loans
|
|
Applicable Margin for Alternate Base Rate Loans
|
< 2.50x
|
|
200 bps
|
|
100 bps
|
≥ 2.50x < 3.00x
|
|
225 bps
|
|
125 bps
|
≥ 3.00x < 3.75x
|
|
250 bps
|
|
150 bps
|
≥ 3.75x
|
|
300 bps
|
|
200 bps
|
|
Payments Due by Period
|
||||||||||||||||||
(in thousands)
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than
5 years
|
||||||||||
Operating leases (1)
|
$
|
46,715
|
|
|
$
|
6,816
|
|
|
$
|
12,530
|
|
|
$
|
10,248
|
|
|
$
|
17,121
|
|
Debt obligations payable (2)
|
247,012
|
|
|
4,944
|
|
|
9,888
|
|
|
232,180
|
|
|
—
|
|
|||||
Maximum future acquisition contingency payments (3)
|
227,333
|
|
|
35,594
|
|
|
179,702
|
|
|
12,037
|
|
|
—
|
|
|||||
Total
|
$
|
521,060
|
|
|
$
|
47,354
|
|
|
$
|
202,120
|
|
|
$
|
254,465
|
|
|
$
|
17,121
|
|
(1)
|
The Company leases facilities and equipment under noncancelable operating leases. Rent expense was $2.7 million and $1.9 million for the six months ended June 30, 2020 and 2019, respectively.
|
(2)
|
Represents scheduled debt obligations and estimated interest payments.
|
(3)
|
Includes $78.5 million of current and noncurrent estimated contingent earnout liabilities at June 30, 2020.
|
|
For the Six Months Ended June 30,
|
|
|
||||||||
(in thousands)
|
2020
|
|
2019
|
|
Variance
|
||||||
Net cash provided by operating activities
|
$
|
43,644
|
|
|
$
|
8,862
|
|
|
$
|
34,782
|
|
Net cash used in investing activities
|
(227,426
|
)
|
|
(77,541
|
)
|
|
(149,885
|
)
|
|||
Net cash provided by financing activities
|
317,147
|
|
|
76,513
|
|
|
240,634
|
|
|||
Net increase in cash and cash equivalents and restricted cash
|
133,365
|
|
|
7,834
|
|
|
125,531
|
|
|||
Cash and cash equivalents and restricted cash at beginning of period
|
71,071
|
|
|
7,995
|
|
|
63,076
|
|
|||
Cash and cash equivalents and restricted cash at end of period
|
$
|
204,436
|
|
|
$
|
15,829
|
|
|
$
|
188,607
|
|
•
|
On April 1, 2020, as partial consideration for the acquisition by Baldwin Krystyn Sherman Partners, LLC ("BKS-Partners") of substantially all of the assets of IRP, BRP Group issued 814,640 shares of Class B common stock.
|
•
|
On May 1, 2020, as partial consideration for the acquisition by BKS-Partners of substantially all of the assets of SPG, BRP Group issued 81,263 shares of Class B common stock.
|
•
|
On June 1, 2020, as partial consideration for the acquisition by BKS-Partners of substantially all of the assets of Rosenthal, BRP Group issued 1,164,393 shares of Class B common stock.
|
•
|
On June 1, 2020, as partial consideration for the acquisition by BKS-Partners of substantially all of the assets of TBA-RBA, BRP Group issued 2,458,652 shares of Class B common stock.
|
|
Total Number of Shares Purchased(1)
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Value that may yet be Purchased under the Plans or Programs
|
||||||
April 1, 2020 to April 30, 2020
|
33,789
|
|
|
$
|
10.55
|
|
|
—
|
|
|
$
|
—
|
|
May 1, 2020 to May 31, 2020
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
June 1, 2020 to June 30, 2020
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total
|
33,789
|
|
|
$
|
10.55
|
|
|
—
|
|
|
$
|
—
|
|
(1)
|
We purchased 33,789 shares during the three months ended June 30, 2020, which were acquired from our employees to cover required tax withholdings on the vesting of shares granted under the BRP Group, Inc. Omnibus Incentive Plan.
|
Exhibit No.
|
|
Description of Exhibit
|
10.1
|
|
|
31.1*
|
|
|
31.2*
|
|
|
32*
|
|
|
101.INS*
|
|
XBRL Instance Document
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
104*
|
|
Cover Page Interactive Data File (formatted in inline XBRL and included in Exhibit 101)
|
*
|
Filed or furnished herewith
|
|
|
BRP GROUP, INC.
|
|
|
|
Date: August 13, 2020
|
By:
|
/s/ Trevor L. Baldwin
|
|
|
Trevor L. Baldwin
|
|
|
Chief Executive Officer
|
|
|
|
Date: August 13, 2020
|
By:
|
/s/ Kristopher A. Wiebeck
|
|
|
Kristopher A. Wiebeck
|
|
|
Chief Financial Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of BRP Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
[Reserved];
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(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Trevor L. Baldwin
|
Trevor L. Baldwin
|
Chief Executive Officer
|
Date: August 13, 2020
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of BRP Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
[Reserved];
|
(c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Kristopher A. Wiebeck
|
Kristopher A. Wiebeck
|
Chief Financial Officer
|
Date: August 13, 2020
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: August 13, 2020
|
By:
|
/s/ Trevor L. Baldwin
|
|
|
Trevor L. Baldwin
|
|
|
Chief Executive Officer
|
|
|
|
Date: August 13, 2020
|
By:
|
/s/ Kristopher A. Wiebeck
|
|
|
Kristopher A. Wiebeck
|
|
|
Chief Financial Officer
|