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Patriot National Reports Record Fee Income For The Fourth Quarter Ended December 31, 2015 And Record Fee Income And Adjusted Ebitda For The Year Ended December 31, 2015

The following excerpt is from the company's SEC filing.

Solid Execution of Growth Strategy and Well Diversified Insurance Platform Position Company for Long-Term Growth

FORT LAUDERDALE, FL., February 24, 2016

Patriot National, Inc

. (NYSE: PN), a leading provider of technology and outsourcing solutions, today announced its financial results for the fourth quarter and full year ended December 31, 2015.

Highlights:

For the quarter ended December 31, 2015:

(Comparisons to the corresponding prior-year period)

Total Revenues and Fee Income of $60.9 million, increased 51%

GAAP Net Loss of $5.4 million, or $0.19 per share

Adjusted Earnings of $5.5 million, or $0.19 per diluted share, up 204%

Adjusted EBITDA of $14.6 million, up 49%

Operating Cash Flow of $5.6 million, up 65%

For the year ended December 31, 2015:

Total Revenues of $209.7 million and Fee Income of $209.8 million, up 79% and 104%, respectively

GAAP Net Loss of $5.4 million, or $0.20 per share

Adjusted Earnings of $20.1 million, or $0.75 per diluted share, up 236%

Adjusted EBITDA of $51.5 million, up 90%

Operating Cash Flow of $37.1 million, up 729%

Invested $3 million to add 90 insurance carrier clients

Recent Developments:

On February 16, 2016, Patriot National announced an expanded relationship with Travelers, the second largest writer of commercial U.S. property and casualty insurance, whereby Patriot National will initially offer all lines of Travelers small business insurance in 15 states, with plans for national expansion.

On January 28, 2016, Patriot National acquired Mid Atlantic Insurance Services, which increased Patriot Nationals property and casualty service offering with eight new products, added 12 new carrier relationships and 1,100 new retail agencies.

On January 26, 2016, the Company appointed financial services industry veteran Michael Corey as its fourth independent director, expanding the board to a total of six members.

-more-

Patriot National, Inc.

Page 2

In early January, the Company expanded its hospitality program through a partnership with ProSight Specialty Insurance to launch a new restaurants, bars and taverns program encompassing property, general liability and liquor liability.

In February, Patriot Technology Solutions launched PN ClaimsAlert, a mobile application that streamlines incident reporting.

Management Commentary

I am very proud of what our team accomplished in 2015. Our strong execution on our two-pronged growth strategy that combines organic growth with acquisitions helped us build one of the most powerful platforms in the insurance industry today, said

Steven M. Mariano

, Chief Executive Officer of Patriot National.

The January 2016 acquisition of Mid Atlantic solidifies our position as a premier workers compensation exchange of choice for agencies and employers. Through our exchange, agencies and employers can access a minimum of five quotes and bind coverage in real time in 44 states.

We also continue to strengthen and diversify our platform. Including the recent acquisition of Mid Atlantic, today we have relationships with 139 carriers, up eight-fold compared to 17 in 2014. Our distribution network stands at 4,100 agencies, which is four times larger than in 2014. In addition, our menu of products and services is five times greater than in 2014, spanning beyond workers compensation to include a wide array of commercial property and casualty insurance lines as well as human capital management. Not only does this extensive product depth, carrier choice and distribution directly translate into increased submissions and fee income, it also reduces revenue concentration by carrier, agency and product line.

We achieved this scale and diversification in a relatively short period of time, partly due to the addition of 90 more carriers than we had originally anticipated at the time of our IPO. Adding these carriers strengthens our platform and sets the stage for accelerated growth and profitability over the long term as we capitalize on cross selling opportunities across a large base of carriers. We invested approximately $3 million of incremental costs in 2015 to integrate these carriers into our platform. Excluding these costs, our Adjusted EBITDA for 2015 would have been $54.5 million.

Our financial performance was stellar in the first full year of being a public company. Total Fee Income and Adjusted EBITDA increased approximately 79% and 90%, respectively, over 2014. When excluding the additional costs associated with the onboarding of new insurance carrier clients during 2015, Adjusted EBITDA margin would approximate 26%.

Our scalable, state-of-the-art technology is foundational to our ability to deliver world-class services to our customers. In 2015, we made great strides in advancing our technology platform and began to offer our solution on a standalone basis. We secured a major win with Missouri Employers Mutual who will implement our fully integrated SaaS-based suite of solutions across their entire insurance value chain. We are pleased with the pipeline of potential additional carrier customers and we expect standalone technology sales to accelerate in 2016.

Most importantly, this year we built one of the most powerful platforms and value propositions in the insurance industry and we are well positioned for long-term sustainable growth.

Page 3

Operating Results

Three Months Ended December 31, 2015

Total revenues were $60.9 million for the fourth quarter of 2015, compared with $40.2 million in the fourth quarter of 2014. Total fee income was $60.9 million for the fourth quarter of 2015, an increase of 51.2% compared with $40.2 million in the fourth quarter of 2014. The increase in fee income during the fourth quarter of 2015 was primarily due to an increase in customer relationships and expanded number of service offerings. Organic fee income of $46.0 million grew 14.4% year-over-year.

Fee income from related party was 30% this quarter compared to 40% in the prior quarter and the Company is on track to achieve its goal of reducing fee income from related party to less than 20% by March 31, 2016.

Total expenses for the fourth quarter of 2015 were $59.6 million, compared with $41.4 million in the fourth quarter of 2014. The increase was largely attributable to organic growth and the acquisitions closed during the twelve months ended December 31, 2015.

Fourth quarter 2015 GAAP net loss was $5.4 million, or $0.19 per share, compared with a net loss of $2.4 million, or $0.13 per share, in the fourth quarter of 2014. The net loss includes income tax expense of $6.6 million which reflects the book to tax timing differences in computing our full year 2015 tax provision. Adjusted earnings for the fourth quarter of 2015 were $5.5 million, or $0.19 per diluted share, compared with Adjusted earnings...


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