GlobeNewswire Inc | Mar 11, 2021 04:20PM EST

March 11, 2021

- Fourth Quarter 2020 Revenue Grew 91% Year-Over-Year to $69.6 Million -

- Full Year 2020 Revenue Grew 75% Year-Over-Year to $240.9 Million -

- Fourth Quarter 2020 Organic Revenue Growth of 17% -

TAMPA, Fla., March 11, 2021 (GLOBE NEWSWIRE) -- BRP Group, Inc. (BRP Group or the Company) (NASDAQ: BRP), a rapidly growing independent insurance distribution firm delivering tailored insurance solutions, today announced its results for the quarter and full year ended December31, 2020.

FOURTH QUARTER 2020 HIGHLIGHTS

-- Revenue increased 91% year-over-year to $69.6 million -- Pro Forma Revenue(1) grew 158% year-over-year to $94.4 million -- Organic Revenue Growth(2) was 17%(3) year-over-year -- MGA of the Future revenue grew 73%(4) to $16.4 million, compared to $9.5 million in the prior-year period -- GAAP net loss of $19.1 million and GAAP net loss per share of $0.29 -- Adjusted Net Income(5) of $4.9 million, or $0.06(5) per fully diluted share -- MGA of the Future policies in force grew by 24,069 to 524,370 at December31, 2020 from 500,301 at September 30, 2020. Comparatively, in the fourth quarter 2019, policies in force grew sequentially by 18,847 -- Adjusted EBITDA(6) grew 79% to $10.6 million, compared to $5.9 million in the prior-year period -- Adjusted EBITDA Margin(7) of 15%, compared to 16% in the prior-year period -- Pro Forma Adjusted EBITDA(7) of $19.8 million and Pro Forma Adjusted EBITDA Margin(7) of 21%

In 2020, we believe we firmly validated the power and resilience of our hybrid growth strategy and differentiated business model. We made great strides in expanding our platform throughout the country, growing total revenues by 75% and delivering double-digit organic growth in the face of a challenging macroeconomic backdrop, said Trevor Baldwin, Chief Executive Officer of BRP Group. For the fourth quarter, we generated excellent year-over-year revenue growth of 91% to a record $69.6 million, including 17% organic revenue growth, bolstered by our rapidly expanding MGA of the Future platform. Additionally in the fourth quarter, we acquired three of Business Insurances Top 100 largest U.S. brokers, further evidence that we are the destination of choice for the countrys most successful and rapidly growing independent insurance brokers. With a best-in-class Colleague team and a robust Partnership pipeline of opportunities, we are well on our way toward our goal of becoming one of the largest insurance distributors in the country and delivering significant long-term value for our shareholders.

LIQUIDITY AND CAPITAL RESOURCES

As of December31, 2020, cash and cash equivalents were $108.5 million and there was $385.4 million of long-term debt outstanding. The Company had aggregate borrowing capacity of $400.0 million under its revolving credit facility.

FULL YEAR 2020 HIGHLIGHTS

-- Revenue increased 75% year-over-year to $240.9 million -- Pro Forma Revenue(1) grew 179% year-over-year to $426.2 million -- Organic Revenue Growth(2) was 16% year-over-year -- MGA of the Future revenue(9) grew 49% to $58.0 million, compared to $39.0 million in the prior year -- GAAP net loss of $29.9 million and GAAP net loss per share of $0.58 -- Adjusted Net Income(5) of $32.4 million, or $0.44(5) per fully diluted share -- Adjusted EBITDA(6) grew 54% to $44.0 million, compared to $28.5 million in the prior year -- Adjusted EBITDA Margin(6) of 18%, compared to 21% in the prior year -- Pro Forma Adjusted EBITDA(7) of $109.9 million and Pro Forma Adjusted EBITDA Margin(7) of 26% -- Closed 16 Partner acquisitions during 2020 that generated total annualized revenue(8) of approximately $236.2 million for the 12-month period pre-acquisition

WEBCAST AND CONFERENCE CALL INFORMATION

BRP Group will host a webcast and conference call to discuss fourth quarter 2020 results today at 5:00 PM ET. A live webcast and a slide presentation of the conference call will be available on BRP Groups investor relations website at ir.baldwinriskpartners.com.The dial-in number for the conference call is (877) 451-6152 (toll-free) or (201) 389-0879 (international). Please dial the number 10 minutes prior to the scheduled start time.

A webcast replay of the call will be available at ir.baldwinriskpartners.comfor one year following the call.

ABOUT BRP GROUP, INC.

BRP Group, Inc. (NASDAQ: BRP) is a rapidly growing independent insurance distribution firm delivering tailored insurance and risk management insights and solutions that give our clients the peace of mind to pursue their purpose, passion and dreams. We are innovating the industry by taking a holistic and tailored approach to risk management, insurance and employee benefits, and support our clients, Colleagues, Insurance Company Partners and communities through the deployment of vanguard resources and capital to drive our growth. BRP represents over 600,000 clients across the United States and internationally. For more information, please visit www.baldwinriskpartners.com.

FOOTNOTES

(1)Pro Forma Revenue is a non-GAAP measure. Reconciliation of Pro Forma Revenue to commissions and fees, the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release.

(2)Organic Revenue for the three months ended December31, 2019 used to calculate Organic Revenue Growth for the three months ended December31, 2020 was $36.6 million, which is adjusted to reflect revenues from Partnerships that reach the 12-month owned mark during the three months ended December31, 2020. Organic Revenue for the year ended December31, 2019 used to calculate Organic Revenue Growth for the year ended December31, 2020 was $137.9 million, which is adjusted to reflect revenues from Partnerships that reach the 12-month owned mark during the year ended December31, 2020. Organic Revenue is a non-GAAP measure. Reconciliation of Organic Revenue to commissions and fees, the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release.

(3)Refer to footnote (4) below for the effect of a cumulative catch up in the organic growth of our MGA of the Future platform.

(4)MGA of the Future revenue growth of 73% includes a cumulative catch-up of 10% as a result of timing of a binding contract.

(5)Adjusted Net Income and Adjusted Diluted EPS are non-GAAP measures. Reconciliation of Adjusted Net Income to net income attributable to BRP Group, Inc. and reconciliation of Adjusted Diluted EPS to diluted loss per share, the most directly comparable GAAP financial measures, are set forth in the reconciliation table accompanying this release.

(6)Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures. Reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release.

(7)Pro Forma Adjusted EBITDA and Pro Forma Adjusted EBITDA Margin are non-GAAP measures. Reconciliation of Pro Forma Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release.

(8)Annualized revenue represents the aggregate revenues of Partners acquired during the relevant period presented, for the most recent trailing 12-month period prior to acquisition by the Company, in each case, at the time the due diligence was concluded based on a quality of earnings review and not an audit.

(9)MGA of the Future was acquired by the Company on April 1, 2019 and, as a result, the revenue of MGA of the Future for a portion of the prior-year period is not included in the consolidated results of operations for the Company for such period and the 49% revenue growth rate for the year ended December31, 2020 was calculated including periods during which MGA of the Future was not owned by the Company.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release may contain various forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which represent BRP Groups expectations or beliefs concerning future events. Forward-looking statements are statements other than historical facts and may include statements that address future operating, financial or business performance or BRP Groups strategies or expectations. In some cases, you can identify these statements by forward-looking words such as may, might, will, should, expects, plans, anticipates, believes, estimates, predicts, projects, potential, outlook or continue, or the negative of these terms or other comparable terminology. Forward-looking statements are based on managements current expectations and beliefs and involve significant risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those contemplated by these statements.

Factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements include, but are not limited to, those described under the caption Risk Factors in BRP Groups Annual Report on Form 10-K for the year ended December31, 2020, and in BRP Groups other filings with the SEC, which are available free of charge on the Securities and Exchange Commission's website at: www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated. All forward-looking statements and all subsequent written and oral forward-looking statements attributable to BRP Group or to persons acting on behalf of BRP Group are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and BRP Group does not undertake any obligation to update them in light of new information, future developments or otherwise, except as may be required under applicable law.

CONTACTS

INVESTOR RELATIONS

Investor Relations(813) 259-8032IR@baldwinriskpartners.com

PRESS

Rachel CarrBaldwin Risk Partners(813) 418-5166Rachel.carr@baldwinriskpartners.com

BRP GROUP, INC.Consolidated Statements of Comprehensive Loss

For the Three Months For the Years Ended December 31, Ended December 31,(in thousands, exceptshare and per share 2020 2019 2020 2019data)Revenues: Commissions and fees $ 69,649 $ 36,561 $ 240,919 $ 137,841 Operating expenses: Commissions, employeecompensation and 51,834 29,887 174,114 96,955 benefitsOther operating 17,483 7,865 48,060 24,576 expensesAmortization expense 5,807 3,214 19,038 10,007 Change in fair value ofcontingent 7,819 14,051 20,516 10,829 considerationDepreciation expense 466 82 1,129 542 Total operating 83,409 55,099 262,857 142,909 expenses Operating loss (13,760 ) (18,538 ) (21,938 ) (5,068 ) Other income (expense): Interest expense, net (5,303 ) (1,757 ) (7,857 ) (10,640 )Loss on extinguishment ? (6,617 ) ? (6,732 )of debtOther income (expense), (72 ) (2 ) (95 ) 3 netTotal other expense (5,375 ) (8,376 ) (7,952 ) (17,369 ) Loss before income (19,135 ) (26,914 ) (29,890 ) (22,437 )taxesIncome tax expense (17 ) 17 (5 ) 17 (benefit)Net loss (19,118 ) (26,931 ) (29,885 ) (22,454 )Less: net lossattributable to (8,810 ) (18,281 ) (14,189 ) (13,804 )noncontrollinginterestsNet loss attributable $ (10,308 ) $ (8,650 ) $ (15,696 ) $ (8,650 )to BRP Group, Inc. Comprehensive loss $ (19,118 ) $ (26,931 ) $ (29,885 ) $ (22,454 )Comprehensive lossattributable to (8,810 ) (18,281 ) (14,189 ) (13,804 )noncontrollinginterestsComprehensive lossattributable to BRP (10,308 ) (8,650 ) (15,696 ) (8,650 )Group, Inc. Basic and diluted net $ (0.29 ) $ (0.58 ) loss per shareBasic and dilutedweighted-average shares 35,527,936 27,175,705 of Class A common stockoutstanding

BRP GROUP, INC.Consolidated Balance Sheets

December 31,(in thousands, except share and per share data) 2020 2019Assets Current assets: Cash and cash equivalents $ 108,462 $ 67,689 Restricted cash 33,560 3,382 Premiums, commissions and fees receivable, net 155,501 58,793 Prepaid expenses and other current assets 4,447 3,019 Due from related parties 19 43 Total current assets 301,989 132,926 Property and equipment, net 11,019 3,322 Other assets 11,084 5,600 Intangible assets, net 554,320 92,450 Goodwill 651,502 164,470 Total assets $ 1,529,914 $ 398,768 Liabilities, Mezzanine Equity and Stockholders? EquityCurrent liabilities: Premiums payable to insurance companies $ 135,576 $ 50,541 Producer commissions payable 24,260 7,470 Accrued expenses and other current liabilities 47,490 12,334 Current portion of long-term debt 4,000 ? Current portion of contingent earnout liabilities 6,094 2,480 Total current liabilities 217,420 72,825 Revolving lines of credit ? 40,363 Long-term debt, less current portion 381,382 ? Contingent earnout liabilities, less current 158,725 46,289 portionOther liabilities 2,419 2,017 Total liabilities 759,946 161,494 Commitments and contingencies Mezzanine equity: Redeemable noncontrolling interest 98 23 Stockholders? equity: Class A common stock, par value $0.01 per share,300,000,000 shares authorized; 44,953,166 and 450 194 19,362,984 shares issued and outstanding atDecember 31, 2020 and 2019Class B common stock, par value $0.0001 pershare, 100,000,000 and 50,000,000 sharesauthorized; 49,828,383 and 43,257,738 shares 5 4 issued and outstanding at December 31, 2020 and2019, respectivelyAdditional paid-in capital 392,139 82,425 Accumulated deficit (24,346 ) (8,650 )Notes receivable from stockholders (465 ) (688 )Total stockholders? equity attributable to BRP 367,783 73,285 Group, Inc.Noncontrolling interest 402,087 163,966 Total stockholders? equity 769,870 237,251 Total liabilities, mezzanine equity and $ 1,529,914 $ 398,768 stockholders? equity

BRP GROUP, INC.Consolidated Statements of Cash Flows

For the Years Ended December 31,(in thousands) 2020 2019Cash flows from operating activities: Net loss $ (29,885 ) $ (22,454 )Adjustments to reconcile net loss to net cash provided by operating activities:Depreciation and amortization 20,167 10,549 Amortization of deferred financing costs 1,002 1,312 Loss on extinguishment of debt ? 6,732 Loss on disposal of property and equipment 67 ? Issuance of management incentive units ? 1,334 Participation unit compensation ? 50 Share-based compensation expense 7,744 3,227 Change in fair value of contingent consideration 20,516 10,829 Payment of contingent earnout consideration in (1,727 ) (8 )excess of purchase price accrualChanges in operating assets and liabilities, net of effect of acquisitions:Premiums, commissions and fees receivable, net (6,828 ) (6,000 )Prepaid expenses and other assets (1,611 ) (2,631 )Due from related parties 24 74 Accounts payable, accrued expenses and other current 27,348 9,000 liabilitiesNet cash provided by operating activities 36,817 12,014 Cash flows from investing activities: Capital expenditures (5,469 ) (1,718 )Investment in business venture (1,250 ) (200 )Cash consideration paid for asset acquisitions, net (1,854 ) (679 )of cash receivedCash consideration paid for business combinations, (669,236 ) (98,423 )net of cash receivedNet cash used in investing activities (677,809 ) (101,020 )Cash flows from financing activities: Proceeds from issuance of Class A common stock, net 451,574 246,208 of underwriting discountsPurchase of LLC Units from shareholders (78,274 ) (31,332 )Payment of offering costs (1,868 ) (4,840 )Payment of contingent and guaranteed earnout (1,192 ) (980 )considerationProceeds from revolving line of credit 385,637 69,592 Repayments of revolving line of credit (325,000 ) (66,200 )Proceeds from related party debt ? 49,845 Repayments of related party debt ? (88,425 )Proceeds from long-term debt 286,331 ? Repayments of long-term debt (1,000 ) (204 )Payments of debt issuance and debt extinguishment (4,507 ) (481 )costsProceeds received from repayment of stockholder/ 223 164 member notes receivablePayments for repurchase of common units ? (12,500 )Proceeds from issuance of LLC Units ? 998 Proceeds from advisor incentive buy-ins ? 746 Contributions 19 40 Distributions ? (10,549 )Net cash provided by financing activities 711,943 152,082 Net increase in cash and cash equivalents and 70,951 63,076 restricted cashCash and cash equivalents and restricted cash at 71,071 7,995 beginning of yearCash and cash equivalents and restricted cash at end $ 142,022 $ 71,071 of year

NON-GAAP FINANCIAL MEASURES

Adjusted EBITDA, Adjusted EBITDA Margin, Organic Revenue, Organic Revenue Growth, Adjusted Net Income, Adjusted Diluted Earnings Per Share (EPS), Pro Forma Revenue, Pro Forma Adjusted EBITDA and Pro Forma Adjusted EBITDA Margin are not measures of financial performance under GAAP and should not be considered substitutes for GAAP measures, including commissions and fees (for Organic Revenue, Organic Revenue Growth and Pro Forma Revenue), net income (loss) (for Adjusted EBITDA, Adjusted EBITDA Margin, Pro Forma Adjusted EBITDA and Pro Forma Adjusted EBITDA Margin), net income (loss) attributable to BRP Group, Inc. (for Adjusted Net Income) or diluted earnings (loss) per share (for Adjusted Diluted EPS), which we consider to be the most directly comparable GAAP measures. These non-GAAP financial measures have limitations as analytical tools, and when assessing our operating performance, you should not consider these non-GAAP financial measures in isolation or as substitutes for commissions and fees, net income (loss), net income (loss) attributable to BRP Group, Inc. or other consolidated income statement data prepared in accordance with GAAP. Other companies in our industry may define or calculate these non-GAAP financial measures differently than we do, and accordingly these measures may not be comparable to similarly titled measures used by other companies.

Adjusted EBITDA eliminates the effects of financing, depreciation, amortization and change in fair value of contingent consideration. We define Adjusted EBITDA as net income (loss) before interest, taxes, depreciation, amortization, change in fair value of contingent consideration and certain items of income and expense, including share-based compensation expense, transaction-related expenses related to Partnerships including severance, and certain non-recurring costs, including those related to raising capital. We believe that Adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance, and that the presentation of this measure enhances an investors understanding of our financial performance.

Adjusted EBITDA Margin is Adjusted EBITDA divided by commissions and fees. Adjusted EBITDA Margin is a key metric used by management and our board of directors to assess our financial performance. We believe that Adjusted EBITDA Margin is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance, and that the presentation of this measure enhances an investors understanding of our financial performance. We believe that Adjusted EBITDA Margin is helpful in measuring profitability of operations on a consolidated level.

Adjusted EBITDA and Adjusted EBITDA Margin have important limitations as analytical tools. For example, Adjusted EBITDA and Adjusted EBITDA Margin:

-- do not reflect any cash capital expenditure requirements for the assets being depreciated and amortized that may have to be replaced in the future; -- do not reflect changes in, or cash requirements for, our working capital needs; -- do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; -- do not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our debt; -- do not reflect share-based compensation expense and other non-cash charges; and -- exclude certain tax payments that may represent a reduction in cash available to us.

We calculate Organic Revenue Growth based on commissions and fees for the relevant period by excluding the first twelve months of commissions and fees generated from new Partners. Organic Revenue Growth is the change in Organic Revenue period-to-period, with prior period results adjusted for Organic Revenues that were excluded in the prior period because the relevant Partners had not yet reached the twelve-month owned mark, but which have reached the twelve-month owned mark in the current period. For example, revenues from a Partner acquired on June 1, 2019 are excluded from Organic Revenue for 2019. However, after June 1, 2020, results from June 1, 2019 to December 31, 2019 for such Partners are compared to results from June 1, 2020 to December 31, 2020 for purposes of calculating Organic Revenue Growth in 2020. Organic Revenue Growth is a key metric used by management and our board of directors to assess our financial performance. We believe that Organic Revenue and Organic Revenue Growth are appropriate measures of operating performance as they allow investors to measure, analyze and compare growth in a meaningful and consistent manner.

Adjusted Net Income is presented for the purpose of calculating Adjusted Diluted EPS. We define Adjusted Net Income as net income (loss) attributable to BRP Group, Inc. adjusted for amortization, change in fair value of contingent consideration and certain items of income and expense, including share-based compensation expense, transaction-related expenses related to Partnerships including severance, and certain non-recurring costs that, in the opinion of management, significantly affect the period-over-period assessment of operating results, and the related tax effect of those adjustments.

Adjusted Diluted EPS measures our per share earnings excluding certain expenses as discussed above and assuming all shares of Class B common stock were exchanged for Class A common stock. Adjusted Diluted EPS is calculated as Adjusted Net Income divided by adjusted dilutive weighted-average shares outstanding. We believe Adjusted Diluted EPS is useful to investors because it enables them to better evaluate per share operating performance across reporting periods.

Pro Forma Revenue reflects GAAP revenue (commissions and fees), plus revenue from Partnerships in the unowned periods.

Pro Forma Adjusted EBITDA takes into account Adjusted EBITDA from Partnerships in the unowned periods and eliminates the effects of financing, depreciation and amortization. We define Pro Forma Adjusted EBITDA as pro forma net income (loss) before interest, taxes, depreciation, amortization, change in fair value of contingent consideration and certain items of income and expense, including share-based compensation expense, transaction-related expenses related to Partnerships including severance, and certain non-recurring costs, including those related to raising capital. We believe that Pro Forma Adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance, and that the presentation of this measure enhances an investors understanding of our financial performance.

Pro Forma Adjusted EBITDA Margin is Pro Forma Adjusted EBITDA divided by Pro Forma Revenue. Pro Forma Adjusted EBITDA is a key metric used by management and our board of directors to assess our financial performance. We believe that Pro Forma Adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance, and that the presentation of this measure enhances an investors understanding of our financial performance. We believe that Pro Forma Adjusted EBITDA Margin is helpful in measuring profitability of operations on a consolidated level.

Adjusted EBITDA and Adjusted EBITDA Margin

The following table reconciles Adjusted EBITDA and Adjusted EBITDA Margin to net income (loss), which we consider to be the most directly comparable GAAP financial measure to Adjusted EBITDA and Adjusted EBITDA Margin:

For the Three Months For the Years Ended December 31, Ended December 31,(in thousands) 2020 2019 2020 2019Commissions and $ 69,649 $ 36,561 $ 240,919 $ 137,841 fees Net loss $ (19,118 ) $ (26,931 ) $ (29,885 ) $ (22,454 ) Adjustments to net loss:Change in fairvalue of contingent 7,819 14,051 20,516 10,829 considerationAmortization 5,807 3,214 19,038 10,007 expenseTransaction-relatedPartnership 7,079 669 13,851 2,204 expensesShare-based 2,387 3,788 7,744 4,561 compensationInterest expense, 5,303 1,757 7,857 10,640 netLoss onextinguishment of ? 6,617 ? 6,732 debtDepreciation 466 82 1,129 542 expenseCapital related 87 2,525 1,087 4,739 expensesSeverance relatedto Partnership ? 29 89 329 activityIncome tax (17 ) 17 (5 ) 17 provisionOther 802 99 2,535 375 Adjusted EBITDA $ 10,615 $ 5,917 $ 43,956 $ 28,521 Adjusted EBITDA 15 % 16 % 18 % 21 %Margin

Organic Revenue and Organic Revenue Growth

The following table reconciles Organic Revenue to commissions and fees, which we consider to be the most directly comparable GAAP financial measure to Organic Revenue:

For the Three Months For the Years Ended December 31, Ended December 31,(in 2020 2019 2020 2019thousands)Commissions $ 69,649 $ 36,561 $ 240,919 $ 137,841 and feesPartnershipcommissions (26,682 ) (13,275 ) (81,250 ) (50,163 ) and fees^(1)OrganicRevenue^ $ 42,967 $ 23,286 $ 159,669 $ 87,678 (2)OrganicRevenue $ 6,387 $ 2,435 21,780 7,780 Growth^ (2)OrganicRevenue 17 % 12 % 16 % 10 %Growth %^(2)

__________

(1) Includes the first twelve months of such commissions and fees generated from newly acquired Partners.(2) Organic Revenue for the three and twelve months ended December31, 2019 used to calculate Organic Revenue Growth for the three and twelve months ended December31, 2020 was $36.6 million and $137.9 million, respectively, which is adjusted to reflect revenues from Partnerships that reached the twelve-month owned mark during the three and twelve months ended December31, 2020.

Adjusted Net Income and Adjusted Diluted EPS

The following table reconciles Adjusted Net Income to net loss attributable to BRP Group, Inc. and reconciles Adjusted Diluted EPS to diluted net loss per share attributable to BRP Group, Inc. Class A common stock:

For the Three Months For the Years Ended December 31, Ended December 31,(in thousands, except share 2020 2019 2020 2019and per share data)Net loss attributable to (10,308 ) $ (8,650 ) $ (15,696 ) $ (8,650 )BRP Group, Inc.Net loss attributable to (8,810 ) (18,281 ) (14,189 ) (13,804 )noncontrolling interestsChange in fair value of 7,819 14,051 20,516 10,829 contingent considerationAmortization expense 5,807 3,214 19,038 10,007 Transaction-related 7,079 669 13,851 2,204 Partnership expensesShare-based compensation 2,387 3,788 7,744 4,561 Loss on extinguishment of ? 6,617 ? 6,732 debtCapital related expenses 87 2,525 1,087 4,739 Amortization of deferred 618 195 1,002 1,312 financing costsSeverance related to ? 29 89 329 Partnership activityOther 802 99 2,535 375 Adjusted pre-tax income 5,481 4,256 35,977 18,634 Adjusted income taxes^ (1) 543 421 3,562 1,845 Adjusted Net Income $ 4,938 $ 3,835 $ 32,415 $ 16,789 Weighted-average shares ofClass A common stock 35,528 17,917 27,176 17,917 outstanding - dilutedDilutive effect of unvestedrestricted shares of Class 832 330 571 330 A common stockExchange of Class B shares^ 46,280 43,194 45,147 43,194 (2)Adjusted dilutiveweighted-average shares 82,640 61,441 72,894 61,441 outstanding Adjusted Diluted EPS $ 0.06 $ 0.06 $ 0.44 $ 0.27 Diluted net loss per share (0.29 ) $ (0.48 ) $ (0.58 ) $ (0.48 )Effect of exchange of ClassB shares and net lossattributable to 0.06 0.04 0.17 0.11 noncontrolling interestsper shareOther adjustments to net 0.30 0.51 0.90 0.67 loss per shareAdjusted income taxes per (0.01 ) (0.01 ) (0.05 ) (0.03 )shareAdjusted Diluted EPS $ 0.06 $ 0.06 $ 0.44 $ 0.27

___________(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.

Pro Forma Revenue

The following table reconciles Pro Forma Revenue to commissions and fees, which we consider to be the most directly comparable GAAP financial measure to Pro Forma Revenue:

For the Three Months For the Years Ended December 31, Ended December 31, 2020 2019 2020 2019Commissions and fees $ 69,649 $ 36,561 $ 240,919 $ 137,841Revenue for Partnerships in 24,757 ? 185,330 14,769the unowned period^ (1)Pro Forma Revenue $ 94,406 $ 36,561 $ 426,249 $ 152,610Proforma Revenue Growth $ 57,845 $ ? $ 273,639 $ ?Proforma Revenue Growth % 158 % ? 179 % ?

___________

(1) The adjustments for the three months ended December31, 2020 reflect commissions and fees revenue for Insgroup, Inc., Armfield, Harrison & Thomas, Inc., Burnham Benefits Insurance Services, Inc. and Tanner, Ballew & Maloof, Inc. as if the Company had acquired the Partners on January 1, 2020. The adjustments for the year ended December31, 2020 reflect commissions and fees revenue for AgencyRM LLC, VibrantUSA Inc., Insurance Risk Partners, LLC, Southern Protective Group, LLC, Pendulum, LLC, Rosenthal Bros., Inc., Trinity Benefit Advisors, Inc./Russ Blakely & Associates, LLC, Fletcher Financial Group, Inc. and Medicare Insurance Advisors, Inc., Insgroup, Inc., Armfield, Harrison & Thomas, Inc., Burnham Benefits Insurance Services, Inc. and Tanner, Ballew & Maloof, Inc. as if the Company had acquired the Partners on January 1, 2020. The adjustments for the year ended December31, 2019 reflect commissions and fees revenue for Lykes Insurance, Inc., Millennial Specialty Insurance LLC, Fiduciary Partners Retirement Group, Inc. and Foundation Insurance of Florida, LLC, as well as two asset acquisitions for the unowned period, as if the Company had acquired the Partners on January 1, 2019. This unaudited pro forma information should not be relied upon as being indicative of the historical results that would have been obtained if the acquisitions had occurred on that date, nor the results that may be obtained in the future.

Pro Forma Adjusted EBITDA and Pro Forma Adjusted EBITDA Margin

The following table reconciles Pro Forma Adjusted EBITDA and Pro Forma Adjusted EBITDA Margin to net loss, which we consider to be the most directly comparable GAAP financial measure to Pro Forma Adjusted EBITDA and Pro Forma Adjusted EBITDA Margin:

For the Three Months For the Years Ended December 31, Ended December 31, 2020 2019 2020 2019Pro forma revenue $ 94,406 $ 36,561 $ 426,249 $ 152,610 Net loss (19,118 ) (26,931 ) (29,885 ) (22,454 ) Net income (loss)for Partnerships in 4,005 ? 25,205 (472 ) the unowned period^(1)Pro forma net loss (15,113 ) (26,931 ) (4,680 ) (22,926 ) Adjustments to pro forma net loss:Interest expense, 5,586 1,757 22,290 14,768 netAmortization 10,439 3,214 43,965 11,866 expenseChange in fairvalue of contingent 7,819 14,051 20,516 10,829 considerationTransaction-relatedPartnership 7,079 669 13,851 2,204 expensesShare-based 2,387 3,788 7,744 4,561 compensationLoss onextinguishment of ? 6,617 ? 6,732 debtDepreciation 746 82 2,474 542 expenseCapital related 87 2,525 1,087 4,739 expensesSeverance relatedto Partnership ? 29 89 329 activityIncome tax (17 ) 17 (5 ) 17 provisionOther 802 99 2,535 375 Pro Forma Adjusted $ 19,815 $ 5,917 $ 109,866 $ 34,036 EBITDAPro Forma Adjusted 21 % 16 % 26 % 22 %EBITDA Margin

___________

(1) The adjustments for the three months ended December31, 2020 reflect commissions and fees revenue for Insgroup, Inc., Armfield, Harrison & Thomas, Inc., Burnham Benefits Insurance Services, Inc. and Tanner, Ballew & Maloof, Inc. as if the Company had acquired the Partners on January 1, 2020. The adjustments for the year ended December31, 2020 reflect commissions and fees revenue for AgencyRM LLC, VibrantUSA Inc., Insurance Risk Partners, LLC, Southern Protective Group, LLC, Pendulum, LLC, Rosenthal Bros., Inc., Trinity Benefit Advisors, Inc./Russ Blakely & Associates, LLC, Fletcher Financial Group, Inc. and Medicare Insurance Advisors, Inc., Insgroup, Inc., Armfield, Harrison & Thomas, Inc., Burnham Benefits Insurance Services, Inc. and Tanner, Ballew & Maloof, Inc. as if the Company had acquired the Partners on January 1, 2020. The adjustments for the year ended December31, 2019 reflect commissions and fees revenue for Lykes Insurance, Inc., Millennial Specialty Insurance LLC, Fiduciary Partners Retirement Group, Inc. and Foundation Insurance of Florida, LLC, as well as two asset acquisitions for the unowned period, as if the Company had acquired the Partners on January 1, 2019. This unaudited pro forma information should not be relied upon as being indicative of the historical results that would have been obtained if the acquisitions had occurred on that date, nor the results that may be obtained in the future.

COMMONLY USED DEFINED TERMS

The following terms have the following meanings throughout this press release unless the context indicates or requires otherwise:

Clients Our insuredsColleagues Our employeesExchange Act Securities Exchange Act of 1934, as amendedGAAP Accounting principles generally accepted in the United States of AmericaOperating Our reportable segmentsGroupsPartners Companies that we have acquired, or in the case of asset acquisitions, the producersPartnerships Strategic acquisitions made by the CompanySEC U.S. Securities and Exchange CommissionSecurities Securities Act of 1933, as amendedAct