GlobeNewswire Inc | Aug 13, 2020 04:10PM EDT

August 13, 2020

- Second Quarter 2020 Revenue Grew 55% Year-Over-Year to $51.3 Million -

- Pro Forma Second Quarter 2020 Revenue, Including Revenue from Partnerships in Unowned Period, of $55.8 Million -

- Second Quarter 2020 Organic Revenue Growth of 19% -

TAMPA, Fla., Aug. 13, 2020 (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 second quarter ended June30, 2020.

SECOND QUARTER 2020 AND SUBSEQUENT EVENT HIGHLIGHTS

-- Revenue increased 55% year-over-year to $51.3 million -- Pro Forma Revenue(1) grew 60% year-over-year to $55.8 million -- Organic Revenue Growth(2) was 19% year-over-year -- MGA of the Future revenue grew 39% to $13.1 million, compared to $9.5 million in the prior-year period -- GAAP net loss of $7.9 million and GAAP loss per share of $0.18 -- Adjusted Net Income(3) of $6.5 million, or $0.10(3) per fully diluted share -- MGA of the Future policies in force grew by 44,468 to 445,988 at June30, 2020 from 401,520 at March31, 2020. Comparatively, in the second quarter 2019, policies in force grew sequentially by 20,192 -- Adjusted EBITDA(4) grew 84% to $8.4 million, compared to $4.6 million in the prior-year period -- Pro Forma Adjusted EBITDA(5) of $9.6 million and Pro Forma Adjusted EBITDA Margin(5) of 17% (Pro Forma Adjusted EBITDA and Pro Forma Adjusted EBITDA Margin excludes all Partnerships closed after June30, 2020) -- Closed five Partner acquisitions that generated total annualized revenue(6) of over $47 million for the 12-month period pre-acquisition; subsequent to June30, 2020, closed two additional Partner acquisitions that generated additional total annualized revenue(6) of over $3 million for the 12-month period pre-acquisition -- Upsized senior revolving credit facility to $400.0 million -- Completed follow-on offering of 13.225 million shares of Class A common stock that raised net proceeds of $166.6 million

We are very proud of our second quarter performance, which is a testament to the power and resiliency of our differentiated business model and hybrid growth strategy to thrive in the face of the unprecedented economic headwinds, said Trevor Baldwin, Chief Executive Officer of BRP Group. The strength of the company we are building at BRP Group is clearly evidenced by our 19% organic growth. I want to offer a huge thank you to all of our Colleagues, who have executed tremendously for our clients during this challenging period, and without whom these results would not have been possible.

LIQUIDITY AND CAPITAL RESOURCES

As of June30, 2020, cash and cash equivalents were $194.4 million and there was $226.0 million of long-term debt outstanding. The Company has aggregate borrowing capacity of $400.0 million under its revolving credit facility.

SIX MONTHS 2020 RESULTS

-- Revenue increased 68% year-over-year to $105.4 million -- Pro Forma Revenue(1) grew 73% year-over-year to $133.9 million -- Organic Revenue Growth(2) of 12% year-over-year -- MGA of the Future revenue grew 40% to $24.2 million, compared to $17.3 million in the prior-year period -- GAAP net loss of $3.2 million and GAAP loss per share of $0.11 -- Adjusted Net Income(3) of $18.5 million, or $0.29(3) per fully diluted share -- Adjusted EBITDA(4) grew 53% to $22.4 million, compared to $14.7 million in the prior-year period -- Pro Forma Adjusted EBITDA(5) of $36.0 million and Pro Forma Adjusted EBITDA Margin(5) of 27% (Pro Forma Adjusted EBITDA and Pro Forma Adjusted EBITDA Margin excludes all Partnerships closed after June30, 2020) -- Closed nine Partner acquisitions that generated total annualized revenue(6) of approximately $78.0 million for the 12-month period pre-acquisition

WEBCAST AND CONFERENCE CALL INFORMATION

BRP Group will host a webcast and conference call to discuss second 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 replay will be available following the end of the call through Thursday, August 27, 2020, by telephone at (844) 512-2921 (toll-free) or (412) 317-6671 (international), passcode 13706249. A webcast replay of the call will be available atir.baldwinriskpartners.com for 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 500,000 Clients across the United States and internationally. For more information, please visit www.baldwinriskpartners.com.

FOOTNOTES

Pro Forma Revenue is a non-GAAP measure. Reconciliation of Pro Forma(1) Revenue to commissions and fees, the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release. 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(2) revenues from Partnerships that reached the twelve-month owned mark during the three and six months ended June 30, 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. Adjusted Net Income and Adjusted Diluted EPS are non-GAAP measures. Reconciliation of Adjusted Net Income to net income attributable to BRP(3) 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. Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures.(4) 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. Pro Forma Adjusted EBITDA and Pro Forma Adjusted EBITDA Margin are non-GAAP(5) 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. Annualized revenue represents the aggregate revenues of Partners acquired during the relevant period presented, for the most recent trailing twelve(6) 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.

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, 2019, BRP Groups Quarterly Reports on Form 10-Q for the three months ended March 31, 2020 and for the three months ended June 30, 2020 and 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.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

For the Three Months For the Six Months Ended Ended June 30, June 30,(in thousands, except 2020 2019 2020 2019share and per share data)Revenues: Commissions and fees $ 51,268 $ 33,060 $ 105,427 $ 62,897 Operating expenses: Commissions, employee 39,263 23,994 73,811 40,280 compensation and benefitsOther 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 4,581 (971 ) 6,242 (3,757 )contingent considerationDepreciation 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 (7,859 ) (2,959 ) (3,140 ) 6,783 income taxesIncome tax provision ? ? 12 ? Net income (loss) (7,859 ) (2,959 ) (3,152 ) 6,783 Less: net income (loss)attributable to (4,271 ) (2,959 ) (1,032 ) 6,783 noncontrolling interestsNet loss attributable to $ (3,588 ) $ ? $ (2,120 ) $ ? BRP Group, Inc. Comprehensive income $ (7,859 ) $ (2,959 ) $ (3,152 ) $ 6,783 (loss)Comprehensive income(loss) attributable to (4,271 ) (2,959 ) (1,032 ) 6,783 noncontrolling interestsComprehensive lossattributable to BRP Group, (3,588 ) ? (2,120 ) ? Inc. Basic and diluted net loss $ (0.18 ) $ (0.11 ) per shareBasic and dilutedweighted-average shares of Class A commonstock outstanding 20,426,082 19,959,828

BRP GROUP, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and per share data) June 30, December 2020 31, 2019Assets 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? EquityCurrent 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 Mezzanine equity: Redeemable noncontrolling interest 71 23 Stockholders? equity: Class A common stock, par value $0.01 per share, 300,000,000 shares authorized; 33,302,477and 19,362,984 shares issued and outstanding at June30, 2020 and December 31, 2019, 333 194 respectivelyClass B common stock, par value $0.0001 per share, 50,000,000 shares authorized; 45,458,763and 43,257,738 shares issued and outstanding at June30, 2020 and December 31, 2019, 4 4 respectivelyAdditional 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 224,514 73,285 Group, Inc.Noncontrolling interest 198,049 163,966 Total stockholders? equity 422,563 237,251 Total liabilities, mezzanine equity and $ 869,668 $ 398,768 stockholders? equity

BRP GROUP, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

For the Six Months Ended June 30,(in thousands) 2020 2019Cash 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 (1,316 ) ? of purchase price accrualAmortization 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 39,983 (7,981 )liabilitiesOther 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 (695 ) (375 )of cash receivedCash consideration paid for business combinations, (224,112 ) (76,186 )net of cash receivedNet cash used in investing activities (227,426 ) (77,541 )Cash flows from financing activities: Proceeds from issuance of Class A common stock, net 167,346 ? of underwriting discountsRepurchase/redemption of LLC Units and Class B common (32,610 ) ? stockPayment of common stock offering costs (769 ) ? Payment of contingent and guaranteed earnout (665 ) (813 )considerationProceeds 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 (1,918 ) (15 )extinguishment costsProceeds from repayment of stockholder/member notes 115 144 receivableRepurchase 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 133,365 7,834 restricted cashCash and cash equivalents and restricted cash at 71,071 7,995 beginning of periodCash and cash equivalents and restricted cash at end $ 204,436 $ 15,829 of period

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) 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 is a key metric used by management and our board of directors to assess our financial performance. 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. 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 Six Months Ended Ended June 30, June 30, 2020 2019 2020 2019Commissions 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 4,581 (971 ) 6,242 (3,757 )contingent considerationShare-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 2,020 313 3,868 570 Partnership expensesSeverance related to 360 300 413 300 Partnership activityCapital 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 %

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 Ended For the Six Months Ended June 30, June 30,(in thousands,except 2020 2019 2020 2019percentages)Commissions and $ 51,268 $ 33,060 $ 105,427 $ 62,897 feesPartnershipcommissions and (12,064 ) (13,947 ) (34,932 ) (19,305 )fees^ (1)Organic Revenue $ 39,204 $ 19,113 $ 70,495 $ 43,592 Organic Revenue $ 6,130 $ 417 $ 7,584 $ 3,110 Growth^ (2)Organic Revenue 19 % 2 % 12 % 8 %Growth %^ (2)

_________(1) Includes the first twelve months of such commissions and fees generated from newly acquired Partners. 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(2) 30, 2020 was $33.1 million and $62.9 million, respectively, 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.

Adjusted Net Income and Adjusted Diluted EPS

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

For the For the Six Three Months(in thousands, except per share data) Months Ended Ended June 30, June 30, 2020 2020Net income (loss) attributable to BRP Group, Inc. $ (3,588 ) $ (2,120 )Net income (loss) attributable to noncontrolling (4,271 ) (1,032 )interestsAmortization 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 20,426 19,960 outstanding - dilutedDilutive effect of unvested restricted shares of 365 344 Class A common stockExchange of Class B shares^ (2) 45,466 44,503 Adjusted dilutive weighted-average shares 66,257 64,807 outstanding Adjusted Diluted EPS $ 0.10 $ 0.29 Diluted loss per share $ (0.18 ) $ (0.11 )Effect of exchange of Class B shares and netincome attributable to noncontrolling interests 0.06 0.06 per shareOther 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.

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 Ended For the Six Months Ended June 30, June 30,(in thousands) 2020 2019 2020 2019Commissions and $ 51,268 $ 33,060 $ 105,427 $ 62,897 feesRevenue forPartnerships in 4,553 1,905 28,478 14,339 the unowned period^ (1)Pro Forma Revenue $ 55,821 $ 34,965 $ 133,905 $ 77,236

_________ The adjustments for the three months ended June 30, 2020 reflect commissions and fees revenue for Southern Protective Group, LLC, Pendulum, LLC, Rosenthal Bros., Inc. and Trinity Benefit Advisors, Inc./Russ Blakely & Associates, LLC as if the Company had acquired the Partners on January 1, 2020. The adjustments for the six months ended June 30, 2020 reflect commissions and fees revenue for AgencyRM LLC, VibrantUSA Inc., Insurance Risk Partners, LLC, Southern Protective Group, LLC, Pendulum, LLC, Rosenthal Bros., Inc. and Trinity Benefit Advisors, Inc./Russ Blakely & Associates, LLC as if the Company had acquired the Partners on January 1, 2020. The adjustments for the three months ended June 30, 2019 reflect(1) commissions and fees revenue for Foundation Insurance of Florida, LLC and Fiduciary Partners Retirement Group, Inc., as well as two asset acquisitions for the unowned period, as if the Company had acquired the Partners on January 1, 2019. The adjustments for the six months ended June 30, 2019 reflect commissions and fees revenue for Lykes Insurance, Inc., Millennial Specialty Insurance LLC, Foundation Insurance of Florida, LLC and Fiduciary Partners Retirement Group, Inc., 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 income (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 Six Months Ended Ended June 30, June 30,(in thousands) 2020 2019 2020 2019Pro Forma Revenue $ 55,821 $ 34,965 $ 133,905 $ 77,236 Net income (loss) $ (7,859 ) $ (2,959 ) $ (3,152 ) $ 6,783 Net income (loss) forPartnerships in the (319 ) (262 ) 9,296 (608 )unowned period^ (1)Pro Forma Net Income (8,178 ) (3,221 ) 6,144 6,175 (Loss)Adjustments to pro forma net income (loss):Interest expense, net 1,570 4,618 3,075 9,226 Amortization expense 5,446 2,835 10,903 5,575 Change in fair value of 4,581 (971 ) 6,242 (3,757 )contingent considerationShare-based compensation 1,978 261 3,117 391 Transaction-related 2,020 313 3,868 570 Partnership expensesDepreciation expense 240 149 405 276 Severance related to 360 300 413 300 Partnership activityCapital related expenses 1,000 1,008 1,000 1,046 Income tax provision ? ? 12 ? Other 568 ? 834 155 Pro Forma Adjusted EBITDA $ 9,585 $ 5,292 $ 36,013 $ 19,957 Pro Forma Adjusted EBITDA 17 % 15 % 27 % 26 %Margin

_________ The adjustments for the three months ended June 30, 2020 reflect commissions and fees revenue for Southern Protective Group, LLC, Pendulum, LLC, Rosenthal Bros., Inc. and Trinity Benefit Advisors, Inc./Russ Blakely & Associates, LLC as if the Company had acquired the Partners on January 1, 2020. The adjustments for the six months ended June 30, 2020 reflect commissions and fees revenue for AgencyRM LLC, VibrantUSA Inc., Insurance Risk Partners, LLC, Southern Protective Group, LLC, Pendulum, LLC, Rosenthal Bros., Inc. and Trinity Benefit Advisors, Inc./Russ Blakely & Associates, LLC as if the Company had acquired the Partners on January 1, 2020. The adjustments for the three months ended June 30, 2019 reflect(1) commissions and fees revenue for Foundation Insurance of Florida, LLC and Fiduciary Partners Retirement Group, Inc., as well as two asset acquisitions for the unowned period, as if the Company had acquired the Partners on January 1, 2019. The adjustments for the six months ended June 30, 2019 reflect commissions and fees revenue for Lykes Insurance, Inc., Millennial Specialty Insurance LLC, Foundation Insurance of Florida, LLC and Fiduciary Partners Retirement Group, Inc., 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 insureds Colleagues Our employees GAAP Accounting principles generally accepted in the United States of America Partners Companies that we have acquired, or in the case of asset acquisitions, the producers Partnerships Strategic acquisitions made by the Company