RF Capital Group Inc.
Q3 2023 Report to Shareholders
Management's Discussion & Analysis - Q3 2023 | |
Contents | |
Unaudited Interim Condensed Consolidated Financial Statements | 21 |
Notes to Unaudited Interim Condensed Consolidated Financial Statements | 26 |
2
A Message from our President & CEO
Throughout the third quarter, our focus remained squarely on executing our three-pillar growth strategy and enhancing the experience of our advisory teams. And even amidst challenging macroeconomic and geopolitical conditions that led to a 3% drop in the TSX index, our advisors helped their clients through the market volatility and delivered consistent year over year top line results.
Our AUA increased 3% year-over-year, which in turn resulted in a 2% increase in overall revenue and a 5% increase in wealth management revenue. Adjusted EBITDA of $16.9 million was flat compared to the same period last year. Free cash flow available for growth was $11.3 million during the quarter compared to $12.4 million in Q3 2022. After funding our growth, Free cash flow was $5.9 million, up $7.3 million from the same period last year.
Our corporate development team had a busy quarter, onboarding two teams and hosting promising diligence meetings across the country with many others who have expressed interest in joining us. As for the third pillar of our growth strategy - acquisition of similar businesses or partnerships that afford us additional capabilities in the wealth management industry - we have several opportunities we are evaluating for fit and long-term value creation.
Although our digital transformation has proved to be more challenging than expected, we are encouraged by
the constructive feedback we are getting from our people, both anecdotally and formally, through a Great Place to Work® survey. This survey, conducted in September, captured the engagement levels of our employees and advisors. Notably, our participation rate was 78%, a very positive indicator. Along with their positive comments, advisor teams also told us we need to continue to work closely with Fidelity, Envestnet and our advisory teams to identify and address gaps, improve service, and simplify processes to ensure an extraordinary experience.
80% of respondents agreed with the statement - Taking everything into account, I would say this is a Great Place to Work
- and 84% agreed with the statement - I am proud to tell others I work here. This contributed to us being recognized as a Great Place to Work ®, for the sixth consecutive year.
Our financial story, recruiting momentum, and survey results indicate we are moving the business in the right direction, and that our people - our greatest assets - are committed to our long-term success and our shared vision. As we continue to drive growth, we remain confident that our efforts will be reflected in our share price.
I look forward to keeping you apprised over the coming quarters.
Sincerely,
Kish Kapoor
3
Management's Discussion & Analysis - Q3 2023
About this Management's Discussion and Analysis
The purpose of this management's discussion and analysis (MD&A) is to help readers understand the consolidated financial condition and results of the consolidated operations of RF Capital Group Inc. (the Company) as at and for the three and nine months ended September 30, 2023.
This MD&A, dated November 2, 2023, should be read in conjunction with the unaudited interim condensed consolidated financial statements and related notes as at and for the three and nine months ended September 30, 2023 (Third Quarter 2023 Financial Statements). This document as well as additional information relating to the Company, including our annual MD&A (2022 Annual MD&A), our audited consolidated financial statements and related notes as at and for the year ended December 31, 2022 (2022 Annual Financial Statements), and our latest annual information form (AIF), can be accessed at www.rfcapgroup.com and under our profile at www.sedarplus.ca and are incorporated by reference herein.
This MD&A refers to certain non-GAAP and supplemental financial measures (including non-GAAP ratios), which we believe are useful in assessing our financial performance. Readers are cautioned that these measures do not have any standard meaning prescribed by GAAP under International Financial Reporting Standards (IFRS) and are therefore unlikely to be comparable to similar measures presented by other issuers. For further information related to adjusted results and a reconciliation to their nearest IFRS measures, please read the "Non-GAAP and Supplemental Financial Measures" section at the end of this MD&A.
Unless otherwise specified herein, financial results contained in this MD&A, including related historical comparatives, are based on our Third Quarter 2023 Financial Statements, which we have prepared in accordance with International Accounting Standard 34, Interim Financial Reporting as issued by the International Accounting Standards Board (IASB).
Certain prior year amounts have been reclassified to correspond to the current period presentation. All numbers and discussion in this MD&A relate to continuing operations unless otherwise specified.
Our Board of Directors (Board) has approved this document.
Forward-Looking Information
This MD&A contains forward-looking information as defined under applicable Canadian securities laws. This information includes, but is not limited to, statements concerning objectives and strategies to achieve those objectives, as well as statements made with respect to management's beliefs, plans, estimates, projections and intentions, and similar statements concerning anticipated future events, results, circumstances, performance, or expectations that are not historical facts. Forward-looking information generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans" or "continue", or similar expressions suggesting future outcomes or events. Such forward-looking information reflects management's current beliefs and is based on information currently available to management. The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement.
The forward-looking statements included in this MD&A, including statements regarding our normal course issuer bid (NCIB), our recruiting pipeline, the nature of our growth strategy, and execution of any of our potential plans, are not guarantees of future results and involve numerous risks and uncertainties that may cause actual results to differ materially from the potential results discussed or anticipated in the forward-looking statements, including those described in this MD&A and our AIF. Such risks and uncertainties include, but are not limited to, market, credit, liquidity, operational, legal and regulatory risks, and other
4
Management's Discussion & Analysis - Q3 2023
risk factors, including variations in the market value of securities, dependence on key personnel and service organizations, and sustainability of fees.
Our results can also be influenced by other factors such as general economic conditions, including interest rate and exchange rate fluctuations, natural disasters, or other unanticipated events. For a description of additional risks that could cause actual results to differ materially from current expectations, see the "Risk Management" section in our 2022 Annual MD&A.
Although we attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not presently known to us or that we presently believe are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information.
Certain statements included in this MD&A may be considered a "financial outlook" for purposes of applicable Canadian securities laws. The financial outlook may not be appropriate for purposes other than this MD&A.
Forward-looking information contained in this MD&A is:
- based on our reliance on certain assumptions we consider reasonable; however, there can be no assurance that such expectations will prove correct. As such, readers should not place undue reliance on the forward-looking statements and information contained in this MD&A. When relying on forward-looking statements to make decisions, readers should carefully consider the foregoing factors, the list of which is not exhaustive;
- made as of the date of this MD&A and should not be relied upon as representing our view as of any date subsequent to the date of this MD&A. Except as required by applicable law, our management and Board undertake no obligation to update or revise any forward-looking information publicly, whether as a result of new information, future events, or otherwise; and
- expressly qualified in its entirety by the foregoing cautionary statements.
Business Overview
RF Capital is one of Canada's largest independent wealth management firms, with total AUA of $34.7 billion (September 30, 2023). We conduct our business under the Richardson Wealth and Patrimoine Richardson brands. Our 159 advisor teams operate out of 21 offices and serve over 31,000 clients across Canada. The Company's common and preferred shares trade on the Toronto Stock Exchange (TSX) under the ticker symbols RCG and RCG.PR.B.
For more information on the Company's business and our three-pillar growth strategy please visit our website at www.richardsonwealth.com or refer to our 2022 Annual Report, The Courage to Rebuild.
5
Management's Discussion & Analysis - Q3 2023
Items of Note
The adjusted financial results presented in this MD&A exclude the impact of transformation program expenses, costs associated with legacy legal matters, and the amortization of acquired intangibles.
Q3 2023
The third quarter did not include any transformation costs or other provisions.
Q2 2023
The second quarter included $0.4 million of pre-tax transformation costs and other provisions:
- $0.8 million of pre-tax charges related to outsourcing our carrying broker operations to Fidelity ($0.4 million after-tax).
- $0.4 million of pre-tax recoveries related to legacy legal and other transformation matters ($0.3 million after-tax).
Q3 2022
The third quarter included $2.1 million of pre-tax charges for our ongoing transformation ($1.5 million after-tax). These charges are related largely to developing our growth strategy and outsourcing our carrying broker operations.
Each quarter noted above also included $3.3 million of pre-tax amortization of acquired intangible assets ($2.4 million after- tax). The amortization arose from intangible assets created on the acquisition of Richardson Wealth and will continue through 2035.
6
Management's Discussion & Analysis - Q3 2023
Select Financial Information
As at or for the three months ended | As at or for the nine months ended | |||||||
September 30, | June 30, | Increase/ | September 30, | Increase/ | September 30, | September 30, | Increase/ | |
($000s, except as otherwise indicated) | 2023 | 2023 | (decrease) | 2022 | (decrease) | 2023 | 2022 | (decrease) |
Key Performance Drivers 1: | ||||||||
AUA - ending2 ($ millions) | 34,726 | 35,788 | (3%) | 33,604 | 3% | 34,726 | 33,604 | 3% |
AUA - average2 ($ millions) | 35,630 | 35,880 | (1%) | 34,679 | 3% | 35,793 | 35,631 | 0% |
Fee revenue | 65,505 | 64,047 | 2% | 61,974 | 6% | 192,084 | 192,176 | (0%) |
Fee revenue3 (%) | 91 | 90 | +107 bps | 92 | (83) bps | 90 | 87 | +288 bps |
Adjusted operating expense ratio4 (%) | 67. 3 | 70.9 | (357) bps | 66.9 | +40 bps | 71. 0 | 70.4 | +54 bps |
Adjusted EBITDA margin5 (%) | 19. 3 | 16.9 | +240 bps | 19.8 | (50) bps | 17. 0 | 16.8 | +20 bps |
Asset yield6 (%) | 0. 87 | 0.86 | +1 bps | 0.86 | +1 bps | 0. 86 | 0.84 | +2 bps |
Advisory teams7 (#) | 159 | 158 | 1 | 161 | (2) | 159 | 161 | (2) |
Operating Performance | ||||||||
Reported Results: | ||||||||
Revenue | 87,836 | 88,832 | (1%) | 85,928 | 2% | 264,366 | 265,441 | (0%) |
Operating expenses1,8 | 34,892 | 36,947 | (6%) | 36,435 | (4%) | 114,486 | 112,340 | 2% |
EBITDA1 | 16,932 | 14,580 | 16% | 14,938 | 13% | 40,468 | 38,629 | 5% |
Income (loss) before income taxes | 2,092 | 217 | 863% | 606 | 245% | (3,341) | (1,720) | 94% |
Net income (loss) from continuing operations | (189) | (1,425) | (87%) | (724) | n/m | (6,946) | (3,813) | 82% |
Net income (loss) from discontinued operations9 | - | (2,064) | (100%) | - | n/m | (2,064) | - | n/m |
Earnings per common share from continuing | ||||||||
operations - diluted10 | (0. 10) | (0.20) | (49%) | (0.19) | (47%) | (0. 82) | (0.73) | 11% |
Adjusted Results 1 : | ||||||||
Operating expenses8 | 34,892 | 36,533 | (4%) | 34,380 | 1% | 109,971 | 106,327 | 3% |
EBITDA | 16,932 | 14,993 | 13% | 16,993 | (0%) | 44,983 | 44,642 | 1% |
Income (loss) before income taxes | 5,355 | 3,892 | 38% | 5,924 | (10%) | 10,961 | 14,082 | (22%) |
Net income (loss) | 2,388 | 1,279 | n/m | 3,197 | (25%) | 3,771 | 7,600 | (50%) |
Adjusted earnings per common share - diluted10 | 0. 08 | 0.01 | 541% | 0.13 | (38%) | 0. 03 | 0.28 | (87%) |
Select balance sheet information: | ||||||||
Total assets | 1,390,770 | 1,518,918 | (8%) | 2,050,638 | (32%) | 1,390,770 | 2,050,638 | (32%) |
Debt | 110,922 | 110,922 | - | 110,922 | - | 110,922 | 110,922 | - |
Shareholders' equity | 335,513 | 336,310 | (0%) | 348,866 | (4%) | 335,513 | 348,866 | (4%) |
Net working capital1 | 90,949 | 90,019 | 1% | 101,980 | (11%) | 90,949 | 101,980 | (11%) |
Common share information: | ||||||||
Book value per common share ($) | 14. 15 | 14.20 | (0%) | 14.93 | (5%) | 14. 15 | 14.92 | (5%) |
Closing share price ($) | 5. 13 | 9.44 | (46%) | 14.46 | (65%) | 5. 13 | 14.46 | (65%) |
Common shares outstanding (millions) | 15. 8 | 15.8 | - | 15.8 | (0%) | 15. 8 | 15.9 | (1%) |
Common share market capitalization ($ millions) | 81 | 149 | (46%) | 229 | (65%) | 81 | 229 | (65%) |
Cash flow 1: | ||||||||
Free cash flow available for growth | 11,300 | 8,561 | 32% | 12,357 | (9%) | 27,028 | 29,438 | (8%) |
Free cash flow | 5,932 | 6,558 | (10%) | (1,405) | (522%) | 4,986 | (7,008) | (171%) |
- Considered to be non-GAAP or supplemental financial measures, which do not have any standardized meaning prescribed by GAAP under IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. For further information, please see the "Non-GAAP and Supplemental Financial Measures" section of this MD&A.
- AUA is a measure of client assets and is common in the wealth management business. It represents the market value of client assets managed and administered by us.
- Calculated as fee revenue divided by commissionable revenue. Commissionable revenue includes wealth management revenue and commissions earned in connection with the placement of new issues and the sale of insurance products.
- Calculated as adjusted operating expenses divided by gross margin
- Calculated as Adjusted EBITDA divided by revenue
- Calculated as wealth management revenue plus interest on cash divided by average AUA
- Prior year has been revised to reflect the internal consolidation of certain teams
- Operating expenses include employee compensation and benefits, selling, general, and administrative expenses, and transformation costs and other provisions. Adjusted operating expenses are calculated as operating expenses less transformation costs and other provisions.
- In Q2 2023, we recorded a provision for a legacy employment litigation matter related to the 2019 sale of our capital markets business to Stifel Nicolaus Canada Inc. See Note 14 to the Third Quarter 2023 Financial Statements.
- In 2022, we consolidated our common shares at a 10:1 ratio. Prior period common share information has been adjusted to reflect this consolidation.
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Management's Discussion & Analysis - Q3 2023
Quarterly Results
The following table presents select financial information for the eight most recently completed financial quarters.
2023 | 2022 | 2021 | ||||||||
($000s, except as otherwise indicated) | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | ||
Key Performance Drivers 1 : | ||||||||||
AUA - ending2 ($ millions) | 34,726 | 35,788 | 35,965 | 34,948 | 33,604 | 33,841 | 37,084 | 36,847 | ||
AUA - average2 ($ millions) | 35,630 | 35,880 | 35,872 | 34,788 | 34,679 | 35,607 | 36,629 | 35,905 | ||
Fee revenue | 65,505 | 64,047 | 62,532 | 62,625 | 61,974 | 62,312 | 67,890 | 64,414 | ||
Fee revenue3 (%) | 91 | 90 | 90 | 90 | 92 | 81 | 89 | 86 | ||
Adjusted operating expense ratio4 (%) | 67. 3 | 70.9 | 74.7 | 68.1 | 66.9 | 67.9 | 76.9 | 74.3 | ||
Adjusted EBITDA margin5 (%) | 19. 3 | 16.9 | 14.9 | 19.2 | 19.8 | 18.3 | 12.5 | 14.3 | ||
Asset yield6 (%) | 0. 87 | 0.86 | 0.86 | 0.87 | 0.86 | 0.82 | 0.85 | 0.81 | ||
Advisory teams7 (#) | 159 | 158 | 158 | 161 | 161 | 162 | 159 | 162 | ||
Operating Performance: | ||||||||||
Reported Results: | ||||||||||
Revenue | 87,836 | 88,832 | 87,700 | 88,531 | 85,928 | 90,753 | 88,760 | 86,111 | ||
Advisor variable compensation | 36,012 | 37,305 | 36,095 | 35,276 | 34,555 | 39,078 | 40,839 | 38,285 | ||
Gross margin9 | 51,824 | 51,527 | 51,605 | 53,255 | 51,373 | 51,675 | 47,921 | 47,826 | ||
Operating expenses1,10 | 34,892 | 36,947 | 42,647 | 38,867 | 36,435 | 37,493 | 38,412 | 37,263 | ||
EBITDA1 | 16,932 | 14,580 | 8,958 | 14,388 | 14,938 | 14,182 | 9,509 | 10,564 | ||
Interest | 3,527 | 3,675 | 3,511 | 3,294 | 3,015 | 2,348 | 2,140 | 1,543 | ||
Depreciation and amortization | 6,856 | 6,805 | 6,895 | 7,851 | 6,936 | 6,743 | 6,534 | 6,510 | ||
Advisor loan amortization | 4,457 | 3,884 | 4,201 | 4,634 | 4,381 | 4,240 | 4,012 | 4,054 | ||
Income (loss) before income taxes | 2,092 | 217 | (5,649) | (1,391) | 606 | 851 | (3,177) | (1,544) | ||
Net income (loss) from continuing operations | (189) | (1,425) | (5,332) | (990) | (724) | 58 | (3,147) | (2,357) | ||
Net income (loss) from discontinued operations11 | - | (2,064) | - | - | - | - | - | - | ||
Adjusting items 13 : | ||||||||||
Transformation costs and other provisions | - | 413 | 4,101 | 2,621 | 2,055 | 2,415 | 1,543 | 1,730 | ||
Amortization of acquired intangibles | 3,263 | 3,263 | 3,263 | 3,263 | 3,263 | 3,263 | 3,263 | 3,263 | ||
Total adjusting items | 3,263 | 3,675 | 7,364 | 5,884 | 5,318 | 5,678 | 4,806 | 4,995 | ||
Adjusted Results 1: | ||||||||||
Operating expenses10 | 34,892 | 36,533 | 38,546 | 36,246 | 34,380 | 35,078 | 36,869 | 35,534 | ||
EBITDA | 16,932 | 14,993 | 13,059 | 17,009 | 16,993 | 16,597 | 11,052 | 12,294 | ||
Income (loss) before income taxes | 5,355 | 3,892 | 1,715 | 4,493 | 5,924 | 6,529 | 1,629 | 3,451 | ||
Net income (loss) | 2,388 | 1,279 | 105 | 3,500 | 3,197 | 4,010 | 393 | 1,395 | ||
Cash flow 1: | ||||||||||
Free cash flow available for growth | 11,300 | 8,561 | 7,168 | 10,761 | 12,357 | 11,511 | 5,569 | 8,618 | ||
Free cash flow | 5,932 | 6,558 | (7,504) | (4,276) | (1,405) | (3,878) | (1,725) | (377) |
- Considered to be non-GAAP or supplemental financial measures, which do not have any standardized meaning prescribed by GAAP under IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. For further information, please see the "Non-GAAP and Supplemental Financial Measures" section of this MD&A.
- AUA is a measure of client assets and is common in the wealth management business. It represents the market value of client assets managed and administered by us.
- Calculated as fee revenue divided by commissionable revenue. Commissionable revenue includes wealth management revenue and commissions earned in connection with the placement of new issues and the sale of insurance products.
- Calculated as adjusted operating expenses divided by gross margin
- Calculated as Adjusted EBITDA divided by revenue
- Calculated as wealth management revenue plus interest on cash divided by average AUA
- Prior year has been revised to reflect the internal consolidation of certain teams
- Wealth management revenue includes both fee revenue and commissions earned for trading activity in client accounts
- Calculated as revenue less advisor variable compensation. We use gross margin to measure operating profitability on the revenue that accrues to the Company after making advisor payments that are directly linked to revenue.
- Operating expenses include employee compensation and benefits, selling, general, and administrative expenses, and transformation costs and other provisions. Adjusted operating expenses are calculated as operating expenses less transformation costs and other provisions.
- In Q2 2023, we recorded a provision for a legacy employment litigation matter related to the 2019 sale of our capital markets business to Stifel Nicolaus Canada Inc. See Note 14 to the Third Quarter 2023 Financial Statements.
- In 2022, we consolidated our common shares at a 10:1 ratio. Prior period common share information has been adjusted to reflect this consolidation.
- For further information, please see "Items of Note" of this MD&A
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Management's Discussion & Analysis - Q3 2023
Q3 Financial Performance Summary
Revenue was $88 million, up $1.9 million from the same period last year, driven by higher AUA1,2 and steady revenue yields. AUA was up by $1.1 billion or 3% from a year ago, primarily due to market-driven gains during Q4 of 2022. AUA has been in the $35 to $36 billion range since the end of last year, with the movement tracking closely to that of the TSX, leading to steady revenues across each quarter of 2023. While recruiting has not contributed materially to AUA1,2 growth in recent quarters, we are gaining recruiting momentum and expect it to help drive AUA and revenue growth in the coming quarters.
Q3 2023 Adjusted EBITDA2 was $16.9 million, flat to Q3 of last year and $1.9 million above the previous quarter. It was up from these prior periods partly because of $3.5 million of mark-to-market recoveries on restricted and deferred share units (RSUs and DSUs). In comparison, RSU and DSU recoveries were $0.2 million in Q3 of last year and $1.9 million last quarter. Q3 2023 also contained $1.7 million of bonus true-ups and other adjustments, which reduced expenses in that period.
Excluding those mark-to-market recoveries, most other operating expense categories have experienced modest growth over the past year, even in this inflationary environment. While we have achieved the savings that we expected from outsourcing our carrying broker operations to Fidelity, those savings have been offset by investments that we have made in other parts of our business.
This quarter, we introduced two new financial metrics to enhance disclosure of our operating performance: Free cash flow available for growth2 and Free cash flow2. These new cash flow disclosures were developed in part due to feedback we received from the investment community. Free cash flow available for growth2 demonstrates the cash flow that we have available to invest in growth initiatives such as recruiting, and Free cash flow2 highlights the residual after growth investments and transformation costs. In Q3, we generated Free cash flow available for growth2 of $11.3 million and Free cash flow2 of $5.9 million.
Outlook
We believe that the investments we have made in our operating platform and strategic initiatives will create long-term value for our shareholders. With respect to the near-term, recent equity market softness has caused us to revise our 2023 Adjusted EBITDA forecast downward. We now expect Adjusted EBITDA2 to be slightly below 2022.
We expect that Free cash flow available for growth2 will be ample enough to support our investments over the balance of 2023. As a result, we do not expect to draw on our credit facility throughout the remainder of the year but will likely do so in 2024 to finance recruiting and other growth initiatives.
- AUA is a measure of client assets and is common in the wealth management business. It represents the market value of client assets managed and administered by us from which we earn commissions and fee revenue.
- Considered to be non-GAAP or supplemental financial measures, which do not have any standardized meaning prescribed under IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. For further information, please see the "Non-GAAP and Supplemental Financial Measures" section at the end of this MD&A.
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Management's Discussion & Analysis - Q3 2023
Financial Performance
For the three months ended | For the nine months ended | |||||||
September 30, | June 30, | Increase/ | September 30, | Increase/ | September 30, September 30, | Increase/ | ||
($000s) | 2023 | 2023 | (decrease) | 2022 | (decrease) | 2023 | 2022 | (decrease) |
Wealth management1 | 70,157 | 68,972 | 2% | 67,064 | 5% | 206,936 | 210,837 | (2%) |
Corporate finance | 1,314 | 2,366 | (44%) | 2,121 | (38%) | 4,661 | 6,783 | (31%) |
Interest | 11,901 | 12,361 | (4%) | 12,082 | (1%) | 37,662 | 24,566 | 53% |
Insurance | 3,126 | 3,821 | (18%) | 2,013 | 55% | 10,528 | 14,451 | (27%) |
Other | 1,338 | 1,312 | 2% | 2,648 | (49%) | 4,579 | 8,804 | (48%) |
Revenue | 87,836 | 88,832 | (1%) | 85,928 | 2% | 264,366 | 265,441 | (0%) |
Variable advisor compensation | 36,012 | 37,305 | (3%) | 34,555 | 4% | 109,412 | 114,472 | (4%) |
Gross margin2 | 51,824 | 51,527 | 1% | 51,373 | 1% | 154,954 | 150,969 | 3% |
Employee compensation and benefits | 17,319 | 18,107 | (4%) | 18,083 | (4%) | 55,571 | 55,901 | (1%) |
Selling, general and administrative | 16,222 | 16,578 | (2%) | 13,982 | 16% | 49,041 | 44,380 | 11% |
Corporate costs3 | 1,351 | 1,849 | (27%) | 2,315 | (42%) | 5,359 | 6,046 | (11%) |
Transformation costs and other provisions | - | 413 | (100%) | 2,055 | (100%) | 4,515 | 6,013 | (25%) |
Operating expenses4,5 | 34,892 | 36,947 | (6%) | 36,435 | (4%) | 114,486 | 112,340 | 2% |
EBITDA4 | 16,932 | 14,580 | 16% | 14,938 | 13% | 40,468 | 38,629 | 5% |
Interest | 3,527 | 3,675 | (4%) | 3,015 | 17% | 10,712 | 7,503 | 43% |
Depreciation and amortization | 6,856 | 6,805 | 1% | 6,936 | (1%) | 20,555 | 20,213 | 2% |
Advisor loan amortization | 4,457 | 3,884 | 15% | 4,381 | 2% | 12,542 | 12,633 | (1%) |
Income (loss) before income taxes | 2,092 | 217 | 863% | 606 | 245% | (3,341) | (1,720) | 94% |
Adjusting items6: | ||||||||
Transformation costs and other provisions | - | 413 | (100%) | 2,055 | (100%) | 4,515 | 6,013 | (25%) |
Total adjusting items | - | 413 | (100%) | 2,055 | (100%) | 4,515 | 6,013 | (25%) |
Adjusted results4: | ||||||||
Operating expenses5 | 34,892 | 36,533 | (4%) | 34,380 | 1% | 109,971 | 106,327 | 3% |
EBITDA | 16,932 | 14,993 | 13% | 16,993 | (0%) | 44,983 | 44,642 | 1% |
Income (loss) before income taxes | 5,355 | 3,892 | 38% | 5,924 | (10%) | 10,961 | 14,082 | (22%) |
Cash flow4: | ||||||||
Free cash flow available for growth | 11,300 | 8,561 | 32% | 12,357 | (9%) | 27,028 | 29,438 | (8%) |
Free cash flow | 5,932 | 6,558 | (10%) | (1,405) | (522%) | 4,986 | (7,008) | (171%) |
- Wealth management revenue includes both fee revenue and commissions earned for trading activity in client accounts.
- Calculated as revenue less advisor variable compensation. We use gross margin to measure operating profitability on the revenue that accrues to the Company after making advisor payments that are directly linked to revenue.
- Corporate costs refer to employee compensation and benefits and selling, general, and administrative expenses related to our corporate functions
- Considered to be non-GAAP or supplemental financial measures, which do not have any standardized meaning prescribed by GAAP under IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. For further information, please see the "Non-GAAP and Supplemental Financial Measures" section of this MD&A.
- Operating expenses include employee compensation and benefits, selling, general, and administrative expenses, and transformation costs and other provisions. Adjusted operating expenses are calculated as operating expenses less transformation costs and other provisions.
- For further information, please see "Items of Note" of this MD&A
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RF Capital Group Inc. published this content on 03 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 November 2023 00:12:46 UTC.