The Baldwin Group Announces First Quarter 2024 Results

- Total Revenue Growth of 15% to $380.4 Million; Organic Revenue Growth(1) of 16% -

- Net Income of $39.1 Million and Diluted Earnings Per Share of $0.33; Adjusted Diluted EPS(2) Growth of 33% to $0.56 -

- Adjusted EBITDA(3) Growth of 29% Year Over Year to $101.7 Million and Adjusted EBITDA Margin(3) of 27%, a 280 Basis Point Expansion Compared to the Prior-Year Period -

TAMPA, Fla.--()--The Baldwin Group, the go-to-market brand name for The Baldwin Insurance Group, Inc. (formerly BRP Group, Inc.) (“Baldwin” or the “Company”) (NASDAQ: BRP), an independent insurance distribution firm delivering tailored insurance solutions to a wide range of personal and commercial Clients, today announced its results for the first quarter ended March 31, 2024.

FIRST QUARTER 2024 HIGHLIGHTS

  • Total revenue increased 15% year over year to $380.4 million
  • Organic revenue growth of 16% year over year
  • GAAP net income of $39.1 million and GAAP diluted earnings per share of $0.33
  • Adjusted net income(2) of $65.3 million
  • Adjusted diluted EPS grew 33% year over year to $0.56
  • Adjusted EBITDA grew 29% year over year to $101.7 million
  • Adjusted EBITDA margin of 27%, a 280 basis point expansion compared to 24% in the prior-year period
  • Net cash provided by operating activities of $2.9 million
  • Free cash flow(4) grew 51% year over year to $53.3 million

“We are thrilled with our start to 2024, as we delivered another quarter of strong, double-digit organic growth and significantly expanded our adjusted EBITDA margin, profitability and free cash flow generation—a significant testament to the scalability and earnings power of our business model,” said Trevor Baldwin, Chief Executive Officer of The Baldwin Group. “Notably, our growth was broad-based across our platform, led by strong net new Client growth generated through the innovative advice, proprietary products, and unique solutions our Colleagues continue to develop and deliver into the marketplace, all while we continue to thoughtfully expand our footprint, including recently entering the multifamily insurance market in Canada. Additionally, in concert with our integration efforts over the past couple of years, we were excited last week to announce our official rebranding to The Baldwin Group, which we believe better reflects our legacy and aligns with how we are most prominently identified in the marketplace. Looking ahead, we remain very well-positioned to successfully deliver on our strategic priorities and generate continued long-term value for our shareholders.”

TICKER SYMBOL CHANGE

In concert with the Company’s rebranding to The Baldwin Group, the Company will be changing its ticker symbol to BWIN. The ticker symbol change will not take effect until the beginning of trading on NASDAQ on May 20, 2024.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2024, cash and cash equivalents were $112.1 million and the Company had $266.0 million of borrowing capacity under its revolving credit facility.

WEBCAST AND CONFERENCE CALL INFORMATION

Baldwin will host a webcast and conference call to discuss first quarter 2024 results today at 5:00 PM ET. A live webcast and a slide presentation of the conference call will be available on Baldwin’s investor relations website at ir.baldwin.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.baldwin.com for one year following the call.

ABOUT THE BALDWIN GROUP

The Baldwin Group, the go-to-market brand name for The Baldwin Insurance Group, Inc. (NASDAQ: BRP) and its affiliates, is an independent insurance distribution firm providing indispensable expertise and insights that strive to give our Clients the confidence to pursue their purpose, passion and dreams. As a team of dedicated entrepreneurs and insurance professionals, we have come together to help protect the possible for our Clients. We do this by delivering bespoke Client solutions, services, and innovation through our comprehensive and tailored approach to risk management, insurance, and employee benefits. We support our Clients, Colleagues, Insurance Company Partners, and communities through the deployment of vanguard resources and capital to drive our organic and inorganic growth. The Baldwin Group proudly represents more than two million Clients across the United States and internationally. For more information, please visit www.baldwin.com.

FOOTNOTES

(1)

Organic revenue for the three months ended March 31, 2023 used to calculate organic revenue growth for the three months ended March 31, 2024 was $327.0 million, which is adjusted to exclude commissions and fees from divestitures. Organic revenue and organic revenue growth are non-GAAP measures. Reconciliation of organic revenue and organic revenue growth to commissions and fees, the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release.

 

(2)

Adjusted net income and adjusted diluted EPS are non-GAAP measures. Reconciliation of adjusted net income to net income (loss) attributable to Baldwin and reconciliation of adjusted diluted EPS to diluted earnings (loss) per share, the most directly comparable GAAP financial measures, is set forth in the reconciliation table accompanying this release.

 

(3)

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

 

(4)

Free cash flow is a non-GAAP measure. Reconciliation of free cash flow to net cash provided by (used in) operating activities, the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

Factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements include, but are not limited to, those described under the caption “Risk Factors” in Baldwin’s Annual Report on Form 10-K for the year ended December 31, 2023 and in Baldwin’s other filings with the SEC, which are available free of charge on the SEC's website at: www.sec.gov, including those risks and other factors relevant to the business, financial condition and results of operations of Baldwin. 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 Baldwin or to persons acting on behalf of Baldwin 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 Baldwin 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.

THE BALDWIN INSURANCE GROUP, INC.

 

Condensed Consolidated Statements of Comprehensive Income (Loss)

 

(Unaudited)

 

 

 

For the Three Months

Ended March 31,

(in thousands, except share and per share data)

 

2024

 

2023

Revenues:

 

 

 

 

Commissions and fees

 

$

378,096

 

 

$

329,523

 

Investment income

 

 

2,271

 

 

 

923

 

Total revenues

 

 

380,367

 

 

 

330,446

 

 

 

 

 

 

Operating expenses:

 

 

 

 

Commissions, employee compensation and benefits

 

 

262,092

 

 

 

230,954

 

Other operating expenses

 

 

45,795

 

 

 

46,604

 

Amortization expense

 

 

24,041

 

 

 

23,163

 

Change in fair value of contingent consideration

 

 

12,676

 

 

 

24,758

 

Depreciation expense

 

 

1,505

 

 

 

1,348

 

Total operating expenses

 

 

346,109

 

 

 

326,827

 

 

 

 

 

 

Operating income

 

 

34,258

 

 

 

3,619

 

 

 

 

 

 

Other income (expense):

 

 

 

 

Interest expense, net

 

 

(31,545

)

 

 

(27,884

)

Gain on divestitures

 

 

36,516

 

 

 

 

Other income (expense), net

 

 

538

 

 

 

(1,511

)

Total other income (expense), net

 

 

5,509

 

 

 

(29,395

)

 

 

 

 

 

Income (loss) before income taxes

 

 

39,767

 

 

 

(25,776

)

Income tax expense

 

 

667

 

 

 

78

 

Net income (loss)

 

 

39,100

 

 

 

(25,854

)

Less: net income (loss) attributable to noncontrolling interests

 

 

17,522

 

 

 

(11,722

)

Net income (loss) attributable to Baldwin

 

$

21,578

 

 

$

(14,132

)

 

 

 

 

 

Comprehensive income (loss)

 

$

39,100

 

 

$

(25,854

)

Comprehensive income (loss) attributable to noncontrolling interests

 

 

17,522

 

 

 

(11,722

)

Comprehensive income (loss) attributable to Baldwin

 

 

21,578

 

 

 

(14,132

)

 

 

 

 

 

Basic earnings (loss) per share

 

$

0.35

 

 

$

(0.24

)

Diluted earnings (loss) per share

 

$

0.33

 

 

$

(0.24

)

Weighted-average shares of Class A common stock outstanding - basic

 

 

61,856,147

 

 

 

58,711,798

 

Weighted-average shares of Class A common stock outstanding - diluted

 

 

65,314,248

 

 

 

58,711,798

 

THE BALDWIN INSURANCE GROUP, INC.

 

Condensed Consolidated Balance Sheets

 

(Unaudited)

 

(in thousands, except share and per share data)

 

March 31, 2024

 

December 31, 2023

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

112,113

 

 

$

116,209

 

Restricted cash

 

 

122,204

 

 

 

104,824

 

Premiums, commissions and fees receivable, net

 

 

701,892

 

 

 

627,791

 

Prepaid expenses and other current assets

 

 

14,909

 

 

 

12,730

 

Assets held for sale

 

 

 

 

 

64,351

 

Total current assets

 

 

951,118

 

 

 

925,905

 

Property and equipment, net

 

 

22,994

 

 

 

22,713

 

Right-of-use assets

 

 

83,461

 

 

 

85,473

 

Other assets

 

 

39,777

 

 

 

38,134

 

Intangible assets, net

 

 

1,000,274

 

 

 

1,017,343

 

Goodwill

 

 

1,412,369

 

 

 

1,412,369

 

Total assets

 

$

3,509,993

 

 

$

3,501,937

 

Liabilities, Mezzanine Equity and Stockholders Equity

 

 

 

 

Current liabilities:

 

 

 

 

Premiums payable to insurance companies

 

$

599,828

 

 

$

555,569

 

Producer commissions payable

 

 

85,687

 

 

 

64,304

 

Accrued expenses and other current liabilities

 

 

132,234

 

 

 

152,954

 

Related party notes payable

 

 

5,691

 

 

 

1,525

 

Current portion of contingent earnout liabilities

 

 

229,529

 

 

 

215,157

 

Liabilities held for sale

 

 

 

 

 

43,931

 

Total current liabilities

 

 

1,052,969

 

 

 

1,033,440

 

Revolving line of credit

 

 

334,000

 

 

 

341,000

 

Long-term debt, less current portion

 

 

966,962

 

 

 

968,183

 

Contingent earnout liabilities, less current portion

 

 

6,336

 

 

 

61,310

 

Operating lease liabilities, less current portion

 

 

77,830

 

 

 

78,999

 

Other liabilities

 

 

123

 

 

 

123

 

Total liabilities

 

 

2,438,220

 

 

 

2,483,055

 

Commitments and contingencies

 

 

 

 

Mezzanine equity:

 

 

 

 

Redeemable noncontrolling interest

 

 

455

 

 

 

394

 

Stockholders’ equity:

 

 

 

 

Class A common stock, par value $0.01 per share, 300,000,000 shares authorized; 65,205,532 and 64,133,950 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

 

 

652

 

 

 

641

 

Class B common stock, par value $0.0001 per share, 100,000,000 shares authorized; 51,622,192 and 52,422,494 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

 

 

5

 

 

 

5

 

Additional paid-in capital

 

 

762,609

 

 

 

746,671

 

Accumulated deficit

 

 

(165,327

)

 

 

(186,905

)

Total stockholders’ equity attributable to Baldwin

 

 

597,939

 

 

 

560,412

 

Noncontrolling interest

 

 

473,379

 

 

 

458,076

 

Total stockholders’ equity

 

 

1,071,318

 

 

 

1,018,488

 

Total liabilities, mezzanine equity and stockholders’ equity

 

$

3,509,993

 

 

$

3,501,937

 

THE BALDWIN INSURANCE GROUP, INC.

 

Condensed Consolidated Statements of Cash Flows

 

(Unaudited)

 

 

 

For the Three Months
Ended March 31,

(in thousands)

 

2024

 

2023

Cash flows from operating activities:

 

 

 

 

Net income (loss)

 

$

39,100

 

 

$

(25,854

)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

Depreciation and amortization

 

 

25,546

 

 

 

24,511

 

Change in fair value of contingent consideration

 

 

12,676

 

 

 

24,758

 

Share-based compensation expense

 

 

14,094

 

 

 

13,281

 

Payment of contingent earnout consideration in excess of purchase price accrual

 

 

(16,318

)

 

 

(857

)

Gain on divestitures

 

 

(36,516

)

 

 

 

Amortization of deferred financing costs

 

 

1,552

 

 

 

1,239

 

Loss on interest rate caps

 

 

26

 

 

 

1,407

 

Other (gain) loss

 

 

(4

)

 

 

100

 

Changes in operating assets and liabilities:

 

 

 

 

Premiums, commissions and fees receivable, net

 

 

(73,558

)

 

 

(48,351

)

Prepaid expenses and other current assets

 

 

(4,629

)

 

 

(4,860

)

Right-of-use assets

 

 

4,186

 

 

 

1,149

 

Accounts payable, accrued expenses and other current liabilities

 

 

39,451

 

 

 

(163

)

Operating lease liabilities

 

 

(2,712

)

 

 

(468

)

Other liabilities

 

 

 

 

 

77

 

Net cash provided by (used in) operating activities

 

 

2,894

 

 

 

(14,031

)

Cash flows from investing activities:

 

 

 

 

Proceeds from divestitures, net of cash transferred

 

 

54,448

 

 

 

 

Capital expenditures

 

 

(8,146

)

 

 

(3,499

)

Investments in and loans for business ventures

 

 

(3,189

)

 

 

(100

)

Proceeds from repayment of related party loans

 

 

1,500

 

 

 

 

Cash consideration paid for asset acquisitions

 

 

 

 

 

(1,500

)

Net cash provided by (used in) investing activities

 

 

44,613

 

 

 

(5,099

)

Cash flows from financing activities:

 

 

 

 

Payment of contingent earnout consideration up to amount of purchase price accrual

 

 

(32,794

)

 

 

(4,680

)

Proceeds from revolving line of credit

 

 

70,000

 

 

 

50,000

 

Payments on revolving line of credit

 

 

(77,000

)

 

 

(70,000

)

Payments on long-term debt

 

 

(2,561

)

 

 

(2,127

)

Proceeds from the settlement of interest rate caps

 

 

2,300

 

 

 

2,275

 

Tax distributions to Baldwin Holdings LLC members

 

 

(98

)

 

 

(11

)

Proceeds from repayment of stockholder notes receivable

 

 

 

 

 

21

 

Net cash used in financing activities

 

 

(40,153

)

 

 

(24,522

)

Net increase (decrease) in cash and cash equivalents and restricted cash

 

 

7,354

 

 

 

(43,652

)

Cash and cash equivalents and restricted cash at beginning of period

 

 

226,963

 

 

 

230,471

 

Cash and cash equivalents and restricted cash at end of period

 

$

234,317

 

 

$

186,819

 

NON-GAAP FINANCIAL MEASURES

Adjusted EBITDA, adjusted EBITDA margin, organic revenue, organic revenue growth, adjusted net income, adjusted diluted earnings per share (“EPS”) and adjusted net cash provided by operating activities (“free cash flow”) are not measures of financial performance under GAAP and should not be considered substitutes for GAAP measures, including commissions and fees (for organic revenue and organic revenue growth), net income (loss) (for adjusted EBITDA and adjusted EBITDA margin), net income (loss) attributable to Baldwin (for adjusted net income), diluted earnings (loss) per share (for adjusted diluted EPS) or net cash provided by (used in) operating activities (for free cash flow), 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 Baldwin, diluted earnings (loss) per share, net cash provided by (used in) operating activities 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.

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 Partnership and integration expenses, severance, and certain non-recurring items, including those related to raising capital. We believe that adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of income and expenses that do not relate to business performance, and that the presentation of this measure enhances an investor’s understanding of our financial performance.

Adjusted EBITDA margin is adjusted EBITDA divided by total revenue. 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 income and expenses that do not relate to business performance, and that the presentation of this measure enhances an investor’s 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 based on commissions and fees for the relevant period by excluding (i) the first twelve months of commissions and fees generated from new Partners and (ii) commissions and fees from divestitures. Organic revenue growth is the change in organic revenue period-to-period, with prior period results adjusted to (i) include commissions and fees that were excluded from organic revenue 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, and (ii) exclude commissions and fees related to divestitures from organic revenue. For example, commissions and fees from a Partner acquired on June 1, 2023 are excluded from organic revenue for 2023. However, after June 1, 2024, results from June 1, 2023 to December 31, 2023 for such Partners are compared to results from June 1, 2024 to December 31, 2024 for purposes of calculating organic revenue growth in 2024. 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.

We define adjusted net income as net income (loss) attributable to Baldwin adjusted for depreciation, amortization, change in fair value of contingent consideration and certain items of income and expense, including share-based compensation expense, transaction-related Partnership and integration expenses, 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. We believe that adjusted net income is an appropriate measure of operating performance because it eliminates the impact of income and expenses that do not relate to business performance.

Adjusted diluted EPS measures our per share earnings excluding certain expenses as discussed above for adjusted net income and assuming all shares of Class B common stock were exchanged for Class A common stock on a one-for-one basis. Adjusted diluted EPS is calculated as adjusted net income divided by adjusted diluted 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.

We calculate free cash flow because we hold fiduciary cash designated for our Insurance Company Partners on behalf of our Clients and incur substantial earnout liabilities in conjunction with our Partnership strategy. Free cash flow is calculated as net cash provided by (used in) operating activities excluding the impact of: (i) the change in premiums, commissions and fees receivable, net; (ii) the change in accounts payable, accrued expenses and other current liabilities; and (iii) the payment of contingent earnout consideration in excess of purchase price accrual. We believe that free cash flow is an important financial measure for use in evaluating financial performance because it measures our ability to generate additional cash from our business operations.

Reconciliation of guidance regarding adjusted EBITDA, organic revenue growth, adjusted diluted EPS and free cash flow to the most directly comparable GAAP measures is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity, and low visibility with respect to commissions and fees, net income (loss), diluted earnings (loss) per share or other consolidated income statement data prepared in accordance with GAAP. The Company is currently unable to predict with a reasonable degree of certainty the type and extent of items that would be expected to impact these GAAP financial measures for these periods. The unavailable information could have a significant impact on the non-GAAP measures.

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:

 

 

For the Three Months
Ended March 31,

(in thousands, except percentages)

 

2024

 

2023

Revenues

 

$

380,367

 

 

$

330,446

 

 

 

 

 

 

Net income (loss)

 

$

39,100

 

 

$

(25,854

)

Adjustments to net income (loss):

 

 

 

 

Gain on divestitures

 

 

(36,516

)

 

 

 

Interest expense, net

 

 

31,545

 

 

 

27,884

 

Amortization expense

 

 

24,041

 

 

 

23,163

 

Share-based compensation

 

 

14,094

 

 

 

13,281

 

Change in fair value of contingent consideration

 

 

12,676

 

 

 

24,758

 

Transaction-related Partnership and integration expenses

 

 

4,904

 

 

 

5,432

 

Colleague earnout incentives

 

 

3,583

 

 

 

 

Severance

 

 

1,689

 

 

 

167

 

Depreciation expense

 

 

1,505

 

 

 

1,348

 

Income and other taxes

 

 

1,501

 

 

 

78

 

Loss on interest rate caps

 

 

26

 

 

 

1,407

 

Other(1)

 

 

3,538

 

 

 

7,342

 

Adjusted EBITDA

 

$

101,686

 

 

$

79,006

 

Adjusted EBITDA margin

 

 

27

%

 

 

24

%

___________________

(1)

Other addbacks to adjusted EBITDA include certain expenses that are considered to be non-recurring or non-operational, including certain recruiting costs, professional fees, litigation costs and bonuses.

Organic Revenue and Organic Revenue Growth

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

 

 

For the Three Months
Ended March 31,

(in thousands, except percentages)

 

2024

 

2023

Commissions and fees

 

$

378,096

 

 

$

329,523

 

Partnership commissions and fees(1)

 

 

 

 

 

(30,871

)

Organic revenue

 

$

378,096

 

 

$

298,652

 

Organic revenue growth(2)

 

$

51,051

 

 

$

55,804

 

Organic revenue growth %(2)

 

 

16

%

 

 

23

%

___________________

(1)

Includes the first twelve months of such commissions and fees generated from newly acquired Partners.

(2)

Organic revenue for the three months ended March 31, 2023 used to calculate organic revenue growth for the three months ended March 31, 2024 was $327.0 million, which is adjusted to exclude commissions and fees from divestitures.

Adjusted Net Income and Adjusted Diluted EPS

The following table reconciles adjusted net income to net income (loss) attributable to Baldwin and reconciles adjusted diluted EPS to diluted earnings (loss) per share, which we consider to be the most directly comparable GAAP financial measures:

 

 

For the Three Months
Ended March 31,

(in thousands, except per share data)

 

2024

 

2023

Net income (loss) attributable to Baldwin

 

$

21,578

 

 

$

(14,132

)

Net income (loss) attributable to noncontrolling interests

 

 

17,522

 

 

 

(11,722

)

Gain on divestitures

 

 

(36,516

)

 

 

 

Amortization expense

 

 

24,041

 

 

 

23,163

 

Share-based compensation

 

 

14,094

 

 

 

13,281

 

Change in fair value of contingent consideration

 

 

12,676

 

 

 

24,758

 

Transaction-related Partnership and integration expenses

 

 

4,904

 

 

 

5,432

 

Colleague earnout incentives

 

 

3,583

 

 

 

 

Loss on interest rate caps, net of cash settlements

 

 

2,326

 

 

 

3,682

 

Severance

 

 

1,689

 

 

 

167

 

Amortization of deferred financing costs

 

 

1,552

 

 

 

1,239

 

Depreciation

 

 

1,505

 

 

 

1,348

 

Other(1)

 

 

3,538

 

 

 

7,342

 

Adjusted pre-tax income

 

 

72,492

 

 

 

54,558

 

Adjusted income taxes(2)

 

 

7,177

 

 

 

5,401

 

Adjusted net income

 

$

65,315

 

 

$

49,157

 

 

 

 

 

 

Weighted-average shares of Class A common stock outstanding - diluted

 

 

65,314

 

 

 

58,712

 

Dilutive weighted-average shares of Class A common stock

 

 

 

 

 

3,603

 

Exchange of Class B common stock(3)

 

 

51,994

 

 

 

54,094

 

Adjusted diluted weighted-average shares outstanding

 

 

117,308

 

 

 

116,409

 

 

 

 

 

 

Adjusted diluted EPS

 

$

0.56

 

 

$

0.42

 

 

 

 

 

 

Diluted earnings (loss) per share

 

$

0.33

 

 

$

(0.24

)

Effect of exchange of Class B common stock and net income (loss) attributable to noncontrolling interests per share

 

 

 

 

 

0.02

 

Other adjustments to earnings (loss) per share

 

 

0.29

 

 

 

0.69

 

Adjusted income taxes per share

 

 

(0.06

)

 

 

(0.05

)

Adjusted diluted EPS

 

$

0.56

 

 

$

0.42

 

_____________________

(1)

Other addbacks to adjusted net income include certain expenses that are considered to be non-recurring or non-operational, including certain recruiting costs, professional fees, litigation costs and bonuses.

(2)

Represents corporate income taxes at an assumed effective tax rate of 9.9% applied to adjusted pre-tax income.

(3)

Assumes the full exchange of Class B common stock for Class A common stock pursuant to the Amended LLC Agreement.

Adjusted Net Cash Provided by Operating Activities (“Free Cash Flow”)

The following table reconciles free cash flow to net cash provided by (used in) operating activities, which we consider to be the most directly comparable GAAP financial measure:

 

 

For the Three Months
Ended March 31,

(in thousands)

 

2024

 

2023

Net cash provided by (used in) operating activities

 

$

2,894

 

 

$

(14,031

)

Adjustments to net cash provided by (used in) operating activities:

 

 

 

 

Change in premiums, commissions and fees receivable, net

 

 

73,558

 

 

 

48,351

 

Change in accounts payable, accrued expenses and other current liabilities

 

 

(39,451

)

 

 

163

 

Payment of contingent earnout consideration in excess of purchase price accrual

 

 

16,318

 

 

 

857

 

Free cash flow

 

$

53,319

 

 

$

35,340

 

COMMONLY USED DEFINED TERMS

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

Amended LLC Agreement

 

Third Amended and Restated Limited Liability Company Agreement of The Baldwin Insurance Group Holdings, LLC (formerly Baldwin Risk Partners, LLC), as amended

Clients

 

Our insureds

Colleagues

 

Our employees

GAAP

 

Accounting principles generally accepted in the United States of America

Insurance Company Partners

 

Insurance companies with which we have a contractual relationship

Partners

 

Companies that we have acquired, or in the case of asset acquisitions, the producers

Partnerships

 

Strategic acquisitions made by the Company

SEC

 

U.S. Securities and Exchange Commission

 

Contacts

MEDIA RELATIONS

Anna Rozenich, Senior Director, Enterprise Communications
The Baldwin Group
(630) 561-5907 | anna.rozenich@baldwin.com

INVESTOR RELATIONS

Bonnie Bishop, Executive Director, Investor Relations
The Baldwin Group
(813) 259-8032 | IR@baldwin.com

Contacts

MEDIA RELATIONS

Anna Rozenich, Senior Director, Enterprise Communications
The Baldwin Group
(630) 561-5907 | anna.rozenich@baldwin.com

INVESTOR RELATIONS

Bonnie Bishop, Executive Director, Investor Relations
The Baldwin Group
(813) 259-8032 | IR@baldwin.com