Goosehead Insurance, Inc. (“Goosehead” or the “Company”) (NASDAQ:
GSHD), a rapidly growing independent personal lines insurance
agency, today announced results for the second quarter ended June
30, 2023.
Second Quarter
2023 Highlights
- Total Revenues grew organically 31%
over the prior-year period to $69.3 million in the second quarter
of 2023
- Second quarter Core Revenues* of
$61.0 million increased 27% over the prior-year period
- Second quarter net income of $7.2
million improved from net income of $2.4 million a year ago. EPS of
$0.15 per share increased 825% and adjusted EPS* of $0.41 per share
increased 161%, over the prior-year period
- Net income margin for the second
quarter was 10%
- Adjusted EBITDA* of $23.1 million
increased from $12.5 million in the prior-year period
- Adjusted EBITDA Margin* increased 9
percentage points over the prior-year period to 33%
- Total written premiums placed for
the second quarter increased 36% over the prior-year period to
$767.3 million
- Policies in force grew 21% from the
prior-year period to approximately 1,427,000
- Corporate sales headcount of 280
was down 44% year-over-year
- Operating franchises remained
steady with the prior-year period at 1,344
- Total franchise producers grew 3%
from a year ago to 2,069
*Core Revenue, Adjusted EPS, Adjusted EBITDA,
and Adjusted EBITDA Margin are non-GAAP measures. Reconciliations
of Core Revenue to total revenues, Adjusted EPS to basic earnings
per share and Adjusted EBITDA to net income, the most directly
comparable financial measures presented in accordance with GAAP,
are set forth in the reconciliation table accompanying this
release.
“We delivered outstanding second quarter results
that demonstrate the tremendous strength and consistency of our
business and the advantages of where we operate in the insurance
value chain. For the quarter, premiums increased 36%, revenues were
up 31%, core revenues grew 27%, and our adjusted EBITDA grew 85%
with adjusted EBITDA margin expanding 900 basis points,” stated
Mark E. Jones, Chairman and CEO. “The restructuring of our
corporate sales team is now complete and is producing extraordinary
results. We are excited to pivot back to growth in this
distribution network. The heaviest lifting to improve the health of
our franchise business is also complete, but we will continue fine
tuning efforts over the next few quarters. We believe our actions
should yield meaningful productivity gains over time. Our ongoing
efforts to enhance quality across our producer force and recruiting
process, and our continued investments and progress on industry
leading technology will further expand our competitive moat, which
we believe positions us to sustain high levels of revenue and
earnings growth for many years. I want to thank our employees and
franchise agents for their exceptional efforts as we drive our
business forward on the path to industry leadership.”
Second Quarter
2023 ResultsFor the second
quarter of 2023, revenues were $69.3 million, an increase of 31%
compared to the corresponding period in 2022. Core Revenues, a
non-GAAP measure which excludes contingent commissions, initial
franchise fees, interest income, and other income, were $61.0
million, a 27% increase from $48.1 million in the prior-year
period. Core Revenues are the most reliable revenue stream for the
Company, consisting of New Business Commissions, Agency Fees, New
Business Royalty Fees, Renewal Commissions, and Renewal Royalty
Fees. Core Revenue growth was driven by improved productivity,
strong client retention of 88%, and rising premium rates. The
Company grew total written premiums, which we consider to be the
leading indicator of future revenue growth, by 36% in the second
quarter.
Total operating expenses, excluding equity-based
compensation, depreciation and amortization and impairment expenses
for the second quarter of 2023 were $46.2 million, up 14% from
$40.5 million in the prior-year period. The increase from the prior
period was due to larger employee compensation and benefits
expenses related to investments in partnership, technology,
marketing, and service functions. Equity-based compensation
increased to $5.9 million for the period, compared to $5.2 million
a year ago. Bad debt expense of $0.9 million decreased from $1.7
million a year ago due to reduced terminations of signed franchises
that have yet to launch. General and Administrative expenses are
also higher versus a year ago due to investments in technology,
systems and marketing efforts to drive growth and continue to
improve the client experience. During the second quarter of 2023,
we consolidated some existing office space resulting in a one time,
non-cash impairment charge of $3.6 million from the write-off of
assets associated with those leases, and certain intangible assets.
For more information about the non-cash impairment, see Note 2,
Summary of Significant Accounting Policies, of the Notes to
Condensed Consolidated Financial Statements in Part I, Item 1. of
the Company’s June 30, 2023 Form 10-Q.
Net income in the second quarter of 2023 was
$7.2 million versus net income of $2.4 million a year ago, with the
improvement due to strong revenue growth and expense discipline.
Earnings per share and Net Income Margin for the first quarter of
2023 were $0.15 and 10%, respectively. Adjusted EPS for the second
quarter of 2023, which excludes equity-based compensation and
impairment expense, was $0.41 per share. Total Adjusted EBITDA was
$23.1 million for the second quarter of 2023 compared to $12.5
million in the prior-year period. Adjusted EBITDA Margin of 33% was
up 9 percentage points in the quarter.
Liquidity and Capital
ResourcesAs of June 30, 2023, the Company had cash and
cash equivalents of $19.1 million. We had an unused line of credit
of $49.8 million as of June 30, 2023. Total outstanding term note
payable balance was $81.3 million as of June 30, 2023.
2023
OutlookThe Company is raising its outlook for full
year 2023 as follows:
- Total written premiums placed for
2023 are expected to be between $2.87 billion and $2.99 billion,
representing organic growth of 30% on the low end of the range to
35% on the high end of the range.
- Total revenues for 2023 are
expected to be between $260 million and $267 million, representing
organic growth of 24% on the low end of the range to 28% on the
high end of the range.
- Adjusted EBITDA Margin is expected
to expand for the full year 2023. Adjusted EBITDA margin and a
reconciliation to the most comparable GAAP metric are not provided
because they cannot be calculated without unreasonable effort.
Conference Call
InformationGoosehead will host a conference call and
webcast today at 4:30 PM ET to discuss these results.
The dial-in number for the conference call is
(855) 327-6837 (toll-free) or (631) 891-4304 (international).
Please dial the number 10 minutes prior to the scheduled start
time.
In addition, a live webcast of the conference
call will also be available on Goosehead’s investor relations
website at http://ir.goosehead.com.
A webcast replay of the call will be available
at http://ir.goosehead.com for one year following the
call.
About Goosehead
Goosehead (NASDAQ: GSHD) is a rapidly growing
and innovative independent personal lines insurance agency that
distributes its products and services through corporate and
franchise locations throughout the United States. Goosehead was
founded on the premise that the consumer should be at the center of
our universe and that everything we do should be directed at
providing extraordinary value by offering broad product choice and
a world-class service experience. Goosehead represents over 150
insurance companies that underwrite personal and commercial lines.
For more information, please visit goosehead.com or
goosehead.com/become-a-franchisee.
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
Goosehead’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 Goosehead’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,
conditions impacting insurance carriers or other parties with which
Goosehead does business, the loss of one or more key executives or
an inability to attract and retain qualified personnel and the
failure to attract and retain highly qualified franchisees. These
risks and uncertainties also include, but are not limited to, those
described under the captions “1A. Risk Factors” in Goosehead’s
Annual Report on Form 10-K for the year ended December 31, 2022 and
in Goosehead’s other filings with the SEC, which are available free
of charge on the Securities 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 Goosehead or to persons
acting on behalf of Goosehead 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 Goosehead 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.
ContactsInvestor Contact:Dan FarrellGoosehead
Insurance - VP Capital MarketsPhone: (214) 838-5290Email:
dan.farrell@goosehead.com; IR@goosehead.com
PR Contact:Mission North for Goosehead InsuranceEmail:
goosehead@missionnorth.com; PR@goosehead.com
Goosehead Insurance, Inc.Condensed
Consolidated Statements of
Operations(Unaudited)(In thousands,
except per share amounts)
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenues: |
|
|
|
|
|
|
|
|
Commissions and agency fees |
|
$ |
31,173 |
|
|
$ |
26,265 |
|
|
$ |
56,657 |
|
|
$ |
46,274 |
|
Franchise revenues |
|
|
37,687 |
|
|
|
26,427 |
|
|
|
69,761 |
|
|
|
47,377 |
|
Interest income |
|
|
417 |
|
|
|
330 |
|
|
|
814 |
|
|
|
649 |
|
Total revenues |
|
|
69,277 |
|
|
|
53,022 |
|
|
|
127,232 |
|
|
|
94,300 |
|
Operating
Expenses: |
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
|
37,483 |
|
|
|
31,659 |
|
|
|
74,365 |
|
|
|
63,143 |
|
General and administrative expenses |
|
|
17,332 |
|
|
|
12,378 |
|
|
|
33,188 |
|
|
|
25,902 |
|
Bad debts |
|
|
900 |
|
|
|
1,660 |
|
|
|
2,555 |
|
|
|
2,456 |
|
Depreciation and amortization |
|
|
2,372 |
|
|
|
1,658 |
|
|
|
4,465 |
|
|
|
3,234 |
|
Total operating expenses |
|
|
58,087 |
|
|
|
47,355 |
|
|
|
114,573 |
|
|
|
94,735 |
|
Income (loss) from operations |
|
|
11,190 |
|
|
|
5,667 |
|
|
|
12,659 |
|
|
|
(435 |
) |
Other Income
(Expense): |
|
|
|
|
|
|
|
|
Interest expense |
|
|
(1,709 |
) |
|
|
(1,114 |
) |
|
|
(3,440 |
) |
|
|
(1,997 |
) |
Income (loss) before taxes |
|
|
9,481 |
|
|
|
4,553 |
|
|
|
9,219 |
|
|
|
(2,432 |
) |
Tax expense |
|
|
2,301 |
|
|
|
2,164 |
|
|
|
2,220 |
|
|
|
562 |
|
Net income (loss) |
|
|
7,180 |
|
|
|
2,389 |
|
|
|
6,999 |
|
|
|
(2,994 |
) |
Less: net income (loss)
attributable to non-controlling interests |
|
|
3,514 |
|
|
|
2,047 |
|
|
|
3,414 |
|
|
|
(1,050 |
) |
Net income (loss)
attributable to Goosehead Insurance, Inc. |
|
$ |
3,666 |
|
|
$ |
342 |
|
|
$ |
3,585 |
|
|
$ |
(1,944 |
) |
Earnings per
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.15 |
|
|
$ |
0.02 |
|
|
$ |
0.15 |
|
|
$ |
(0.10 |
) |
Diluted |
|
$ |
0.15 |
|
|
$ |
0.02 |
|
|
$ |
0.15 |
|
|
$ |
(0.10 |
) |
Weighted average shares
of Class A common stock outstanding |
|
|
|
|
|
|
|
|
Basic |
|
|
23,689 |
|
|
|
20,454 |
|
|
|
23,448 |
|
|
|
20,348 |
|
Diluted |
|
|
24,333 |
|
|
|
21,245 |
|
|
|
23,981 |
|
|
|
20,348 |
|
Goosehead Insurance, Inc.Condensed
Consolidated Statements of
Operations(Unaudited)(In thousands,
except per share amounts)
|
|
Three months endedJune 30, |
|
Six Months EndedJune 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenues: |
|
|
|
|
|
|
|
|
Core Revenue: |
|
|
|
|
|
|
|
|
Renewal Commissions(1) |
|
$ |
18,541 |
|
|
$ |
14,541 |
|
|
$ |
34,359 |
|
|
$ |
24,748 |
|
Renewal Royalty Fees(2) |
|
|
27,552 |
|
|
|
18,870 |
|
|
|
50,304 |
|
|
|
32,872 |
|
New Business Commissions(1) |
|
|
6,257 |
|
|
|
6,730 |
|
|
|
11,774 |
|
|
|
12,097 |
|
New Business Royalty Fees(2) |
|
|
6,267 |
|
|
|
4,821 |
|
|
|
11,909 |
|
|
|
9,113 |
|
Agency Fees(1) |
|
|
2,404 |
|
|
|
3,114 |
|
|
|
4,634 |
|
|
|
5,751 |
|
Total Core Revenue |
|
|
61,021 |
|
|
|
48,076 |
|
|
|
112,980 |
|
|
|
84,581 |
|
Cost Recovery Revenue: |
|
|
|
|
|
|
|
|
Initial Franchise Fees(2) |
|
|
3,287 |
|
|
|
2,591 |
|
|
|
6,350 |
|
|
|
4,887 |
|
Interest Income |
|
|
417 |
|
|
|
330 |
|
|
|
814 |
|
|
|
649 |
|
Total Cost Recovery Revenue |
|
|
3,704 |
|
|
|
2,921 |
|
|
|
7,164 |
|
|
|
5,536 |
|
Ancillary Revenue: |
|
|
|
|
|
|
|
|
Contingent Commissions(1) |
|
|
3,971 |
|
|
|
1,880 |
|
|
|
5,890 |
|
|
|
3,678 |
|
Other Franchise Revenues(2) |
|
|
581 |
|
|
|
145 |
|
|
|
1,198 |
|
|
|
505 |
|
Total Ancillary Revenue |
|
|
4,552 |
|
|
|
2,025 |
|
|
|
7,088 |
|
|
|
4,183 |
|
Total
Revenues |
|
|
69,277 |
|
|
|
53,022 |
|
|
|
127,232 |
|
|
|
94,300 |
|
Operating
Expenses: |
|
|
|
|
|
|
|
|
Employee compensation and benefits, excluding equity-based
compensation |
|
|
31,611 |
|
|
|
26,486 |
|
|
|
61,873 |
|
|
|
52,182 |
|
General and administrative expenses, excluding impairment |
|
|
13,704 |
|
|
|
12,378 |
|
|
|
29,560 |
|
|
|
25,902 |
|
Bad debts |
|
|
900 |
|
|
|
1,660 |
|
|
|
2,555 |
|
|
|
2,456 |
|
Total |
|
|
46,215 |
|
|
|
40,524 |
|
|
|
93,988 |
|
|
|
80,540 |
|
Adjusted
EBITDA |
|
|
23,062 |
|
|
|
12,498 |
|
|
|
33,244 |
|
|
|
13,760 |
|
Adjusted EBITDA Margin |
|
|
33 |
% |
|
|
24 |
% |
|
|
26 |
% |
|
|
15 |
% |
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(1,709 |
) |
|
|
(1,114 |
) |
|
|
(3,440 |
) |
|
|
(1,997 |
) |
Depreciation and amortization |
|
|
(2,372 |
) |
|
|
(1,658 |
) |
|
|
(4,465 |
) |
|
|
(3,234 |
) |
Tax expense |
|
|
(2,301 |
) |
|
|
(2,164 |
) |
|
|
(2,220 |
) |
|
|
(562 |
) |
Equity-based compensation |
|
|
(5,872 |
) |
|
|
(5,173 |
) |
|
|
(12,492 |
) |
|
|
(10,961 |
) |
Impairment expense |
|
|
(3,628 |
) |
|
|
— |
|
|
|
(3,628 |
) |
|
|
— |
|
Net Income
(Loss) |
|
$ |
7,180 |
|
|
$ |
2,389 |
|
|
$ |
6,999 |
|
|
$ |
(2,994 |
) |
Net Income (Loss) Margin |
|
|
10 |
% |
|
|
5 |
% |
|
|
6 |
% |
|
|
(3 |
)% |
(1) Renewal Commissions, New Business Commissions, Agency Fees,
and Contingent Commissions are included in "Commissions and agency
fees" as shown on the Condensed Consolidated statements of
operations within Goosehead’s Form 10-Q for the three and six
months ended June 30, 2023 and 2022.(2) Renewal Royalty Fees, New
Business Royalty Fees, Initial Franchise Fees, and Other Franchise
Revenues are included in "Franchise revenues" as shown on the
Condensed Consolidated statements of operations within Goosehead’s
Form 10-Q for the three and six months ended June 30, 2023 and
2022.
Goosehead Insurance, Inc.Condensed
Consolidated Balance
Sheets(Unaudited) (In thousands,
except per share amounts)
|
|
June 30, |
|
December 31, |
|
|
|
2023 |
|
|
|
2022 |
|
Assets |
|
|
|
|
Current Assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
19,131 |
|
|
$ |
28,743 |
|
Restricted cash |
|
|
1,790 |
|
|
|
1,644 |
|
Commissions and agency fees receivable, net |
|
|
10,459 |
|
|
|
14,440 |
|
Receivable from franchisees, net |
|
|
9,489 |
|
|
|
4,932 |
|
Prepaid expenses |
|
|
12,046 |
|
|
|
4,334 |
|
Total current assets |
|
|
52,915 |
|
|
|
54,093 |
|
Receivable from franchisees, net of current portion |
|
|
15,446 |
|
|
|
23,835 |
|
Property and equipment, net of accumulated depreciation |
|
|
33,176 |
|
|
|
35,347 |
|
Right-of-use asset |
|
|
41,177 |
|
|
|
44,080 |
|
Intangible assets, net of accumulated amortization |
|
|
12,384 |
|
|
|
4,487 |
|
Deferred income taxes, net |
|
|
164,549 |
|
|
|
155,318 |
|
Other assets |
|
|
3,532 |
|
|
|
4,193 |
|
Total assets |
|
$ |
323,179 |
|
|
$ |
321,353 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
Current Liabilities: |
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
14,238 |
|
|
$ |
15,958 |
|
Premiums payable |
|
|
1,790 |
|
|
|
1,644 |
|
Lease liability |
|
|
8,468 |
|
|
|
6,627 |
|
Contract liabilities |
|
|
5,207 |
|
|
|
6,031 |
|
Note payable |
|
|
8,125 |
|
|
|
6,875 |
|
Total current liabilities |
|
|
37,828 |
|
|
|
37,135 |
|
Lease liability, net of current
portion |
|
|
61,662 |
|
|
|
64,947 |
|
Note payable, net of current
portion |
|
|
72,449 |
|
|
|
86,711 |
|
Contract liabilities, net of
current portion |
|
|
30,992 |
|
|
|
40,522 |
|
Liabilities under tax receivable
agreement |
|
|
133,696 |
|
|
|
125,662 |
|
Total liabilities |
|
|
336,627 |
|
|
|
354,977 |
|
Class A common stock, $0.01 par
value per share - 300,000 shares authorized, 23,900 shares issued
and outstanding as of June 30, 2023, 23,034 shares issued and
outstanding as of December 31, 2022 |
|
|
237 |
|
|
|
228 |
|
Class B common stock, $0.01 par
value per share - 50,000 shares authorized, 13,795 issued and
outstanding as of June 30, 2023, 14,471 shares issued and
outstanding as of December 31, 2022 |
|
|
139 |
|
|
|
146 |
|
Additional paid in capital |
|
|
86,859 |
|
|
|
70,866 |
|
Accumulated deficit |
|
|
(57,565 |
) |
|
|
(60,570 |
) |
Total stockholders' equity |
|
|
29,670 |
|
|
|
10,670 |
|
Non-controlling interests |
|
|
(43,118 |
) |
|
|
(44,294 |
) |
Total equity |
|
|
(13,448 |
) |
|
|
(33,624 |
) |
Total liabilities and equity |
|
$ |
323,179 |
|
|
$ |
321,353 |
|
Goosehead Insurance, Inc.Reconciliation
Non-GAAP Measures to GAAP
This release includes Core Revenue, Cost
Recovery Revenue, Ancillary Revenue, Adjusted EBITDA, Adjusted
EBITDA Margin and Adjusted EPS that are not required by, nor
presented in accordance with, generally accepted accounting
principles in the United States (“GAAP”). The Company refers to
these measures as “non-GAAP financial measures.” The Company uses
these non-GAAP financial measures when planning, monitoring and
evaluating its performance and considers these non-GAAP financial
measures to be useful metrics for management and investors to
facilitate operating performance comparisons from period to period
by excluding potential differences caused by variations in capital
structures, tax position, depreciation, amortization and certain
other items that the Company believes are not representative of its
core business. The Company uses Core Revenue, Cost Recovery
Revenue, Ancillary Revenue, Adjusted EBITDA, Adjusted EBITDA Margin
and Adjusted EPS for business planning purposes and in measuring
its performance relative to that of its competitors.
These non-GAAP financial measures are defined by
the Company as follows:
- "Core Revenue" is
a supplemental measure of our performance and includes Renewal
Commissions, Renewal Royalty Fees, New Business Commissions, New
Business Royalty Fees, and Agency Fees. We believe that Core
Revenue is an appropriate measure of operating performance because
it summarizes all of our revenues from sales of individual
insurance policies.
- "Cost Recovery
Revenue" is a supplemental measure of our performance and includes
Initial Franchise Fees and Interest Income. We believe that Cost
Recovery Revenue is an appropriate measure of operating performance
because it summarizes revenues that are viewed by management as
cost recovery mechanisms.
- "Ancillary
Revenue" is a supplemental measure of our performance and includes
Contingent Commissions and Other Income. We believe that Ancillary
Revenue is an appropriate measure of operating performance because
it summarizes revenues that are ancillary to our core
business.
- "Adjusted EBITDA"
is a supplemental measure of the Company's performance. We believe
that Adjusted EBITDA is an appropriate measure of operating
performance because it eliminates the impact of items that do not
relate to business performance. Adjusted EBITDA is defined as net
income (the most directly comparable GAAP measure) before interest,
income taxes, depreciation and amortization, adjusted to exclude
equity-based compensation and other non-operating items, including,
among other things, certain non-cash charges and certain
non-recurring or non-operating gains or losses.
- "Adjusted EBITDA
Margin" is Adjusted EBITDA as defined above, divided by total
revenue excluding other non-operating items. Adjusted EBITDA Margin
is helpful in measuring profitability of operations on a
consolidated level.
- "Adjusted EPS" is
a supplemental measure of our performance, defined as earnings per
share (the most directly comparable GAAP measure) before
non-recurring or non-operating income and expenses. Adjusted EPS is
a useful measure to management because it eliminates the impact of
items that do not relate to business performance and helps measure
our profitability on a consolidated level.
While the Company believes that these non-GAAP
financial measures are useful in evaluating its business, this
information should be considered as supplemental in nature and is
not meant as a substitute for revenues, net income, or earnings per
share, in each case as recognized in accordance with GAAP. In
addition, other companies, including companies in the Company’s
industry, may calculate such measures differently, which reduces
their usefulness as comparative measures.
The following tables show a reconciliation from
total revenues to Core Revenue, Cost Recovery Revenue, and
Ancillary Revenue (non-GAAP basis) for the three and six months
ended June 30, 2023 and 2022 (in thousands):
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Total Revenues |
$ |
69,277 |
|
|
$ |
53,022 |
|
|
$ |
127,232 |
|
|
$ |
94,300 |
|
|
|
|
|
|
|
|
|
Core Revenue: |
|
|
|
|
|
|
|
Renewal Commissions(1) |
$ |
18,541 |
|
|
$ |
14,541 |
|
|
$ |
34,359 |
|
|
$ |
24,748 |
|
Renewal Royalty Fees(2) |
|
27,552 |
|
|
|
18,870 |
|
|
|
50,304 |
|
|
|
32,872 |
|
New Business Commissions(1) |
|
6,257 |
|
|
|
6,730 |
|
|
|
11,774 |
|
|
|
12,097 |
|
New Business Royalty Fees(2) |
|
6,267 |
|
|
|
4,821 |
|
|
|
11,909 |
|
|
|
9,113 |
|
Agency Fees(1) |
|
2,404 |
|
|
|
3,114 |
|
|
|
4,634 |
|
|
|
5,751 |
|
Total Core Revenue |
|
61,021 |
|
|
|
48,076 |
|
|
|
112,980 |
|
|
|
84,581 |
|
Cost Recovery Revenue: |
|
|
|
|
|
|
|
Initial Franchise Fees(2) |
|
3,287 |
|
|
|
2,591 |
|
|
|
6,350 |
|
|
|
4,887 |
|
Interest Income |
|
417 |
|
|
|
330 |
|
|
|
814 |
|
|
|
649 |
|
Total Cost Recovery
Revenue |
|
3,704 |
|
|
|
2,921 |
|
|
|
7,164 |
|
|
|
5,536 |
|
Ancillary Revenue: |
|
|
|
|
|
|
|
Contingent Commissions(1) |
|
3,971 |
|
|
|
1,880 |
|
|
|
5,890 |
|
|
|
3,678 |
|
Other Franchise Revenues(2) |
|
581 |
|
|
|
145 |
|
|
|
1,198 |
|
|
|
505 |
|
Total Ancillary Revenue |
|
4,552 |
|
|
|
2,025 |
|
|
|
7,088 |
|
|
|
4,183 |
|
Total Revenues |
$ |
69,277 |
|
|
$ |
53,022 |
|
|
$ |
127,232 |
|
|
$ |
94,300 |
|
(1) Renewal Commissions, New Business Commissions, Agency Fees,
and Contingent Commissions are included in "Commissions and agency
fees" as shown on the Condensed Consolidated statements of
operations.(2) Renewal Royalty Fees, New Business Royalty Fees,
Initial Franchise Fees, and Other Franchise Revenues are included
in "Franchise revenues" as shown on the Condensed Consolidated
statements of operations.
The following tables show a reconciliation from
net income to Adjusted EBITDA and Adjusted EBITDA Margin (non-GAAP
basis) for the three and six months ended June 30, 2023 and 2022
(in thousands):
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net loss |
|
$ |
7,180 |
|
|
$ |
2,389 |
|
|
$ |
6,999 |
|
|
$ |
(2,994 |
) |
Interest expense |
|
|
1,709 |
|
|
|
1,114 |
|
|
|
3,440 |
|
|
|
1,997 |
|
Depreciation and amortization |
|
|
2,372 |
|
|
|
1,658 |
|
|
|
4,465 |
|
|
|
3,234 |
|
Tax expense |
|
|
2,301 |
|
|
|
2,164 |
|
|
|
2,220 |
|
|
|
562 |
|
Equity-based compensation |
|
|
5,872 |
|
|
|
5,173 |
|
|
|
12,492 |
|
|
|
10,961 |
|
Impairment expense |
|
|
3,628 |
|
|
|
— |
|
|
|
3,628 |
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
23,062 |
|
|
$ |
12,498 |
|
|
$ |
33,244 |
|
|
$ |
13,760 |
|
Net Income Margin(1) |
|
|
10 |
% |
|
|
5 |
% |
|
|
6 |
% |
|
|
(3 |
)% |
Adjusted EBITDA Margin(2) |
|
|
33 |
% |
|
|
24 |
% |
|
|
26 |
% |
|
|
15 |
% |
(1) Net Income Margin is calculated as Net
Income divided by Total Revenue ($7,180/$69,277) and
($2,389/$53,022) for the three months ended June 30, 2023 and 2022.
Net Income Margin is calculated as Net Income divided by Total
Revenue ($6,999/$127,232) and ($(2,994)/$94,300) for the six months
ended June 30, 2023 and 2022(2) Adjusted EBITDA Margin is
calculated as Adjusted EBITDA divided by Total Revenue
($23,062/$69,277), and ($12,498/$53,022) for the three months ended
June 30, 2023 and 2022, respectively. Adjusted EBITDA Margin is
calculated as Adjusted EBITDA divided by Total Revenue
($33,244/$127,232), and ($13,760/$94,300) for the six months ended
June 30, 2023 and 2022.
The following tables show a reconciliation from
basic earnings per share to Adjusted EPS (non-GAAP basis) for the
three and six months ended June 30, 2023 and 2022. Note that totals
may not sum due to rounding:
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Earnings per share - basic
(GAAP) |
|
$ |
0.15 |
|
|
$ |
0.02 |
|
|
$ |
0.15 |
|
|
$ |
(0.10 |
) |
Add: equity-based
compensation(1) |
|
|
0.16 |
|
|
|
0.14 |
|
|
|
0.33 |
|
|
|
0.30 |
|
Add: impairment
expense(2) |
|
|
0.10 |
|
|
|
— |
|
|
|
0.10 |
|
|
|
— |
|
Adjusted EPS (non-GAAP) |
|
$ |
0.41 |
|
|
$ |
0.16 |
|
|
$ |
0.58 |
|
|
$ |
0.20 |
|
(1) Calculated as equity-based compensation divided by sum of
weighted average Class A and Class B shares [$5.9 million/(23.7
million + 13.9 million)] for the three months ended June 30, 2023
and [$5.2 million/ (20.5 million + 16.7 million)] for the three
months ended June 30, 2022. Calculated as equity-based compensation
divided by sum of weighted average Class A and Class B shares
[$12.5 million/(23.4 million + 14.1 million)] for the six months
ended June 30, 2023 and [$11.0 million/ (20.3 million + 16.8
million)] for the six months ended June 30, 2022.(2) Calculated as
impairment expense divided by sum of weighted average Class A and
Class B shares [$3.6 million/(23.7 million + 13.9 million)] for the
three months ended June 30, 2023. Calculated as impairment expense
divided by sum of weighted average Class A and Class B shares [$3.6
million/(23.4 million + 14.1 million)] for the six months ended
June 30, 2023.
Goosehead Insurance, Inc.Key
Performance Indicators
|
|
June 30, 2023 |
|
December 31, 2022 |
|
June 30, 2022 |
Corporate sales agents < 1 year tenured |
|
|
146 |
|
|
|
165 |
|
|
|
312 |
|
Corporate sales agents > 1
year tenured |
|
|
134 |
|
|
|
155 |
|
|
|
191 |
|
Operating franchises < 1
year tenured (TX) |
|
|
64 |
|
|
|
71 |
|
|
|
67 |
|
Operating franchises > 1
year tenured (TX) |
|
|
251 |
|
|
|
236 |
|
|
|
231 |
|
Operating franchises < 1
year tenured (Non-TX) |
|
|
284 |
|
|
|
401 |
|
|
|
354 |
|
Operating franchises > 1
year tenured (Non-TX) |
|
|
745 |
|
|
|
705 |
|
|
|
692 |
|
Total franchise producers |
|
|
2,069 |
|
|
|
2,101 |
|
|
|
2,005 |
|
Policies in Force |
|
|
1,427,000 |
|
|
|
1,284,000 |
|
|
|
1,181,000 |
|
Client Retention |
|
|
88 |
% |
|
|
88 |
% |
|
|
89 |
% |
Premium Retention |
|
|
103 |
% |
|
|
100 |
% |
|
|
95 |
% |
QTD Written Premium (in
thousands) |
|
$ |
767,253 |
|
|
$ |
584,575 |
|
|
$ |
565,961 |
|
Net Promoter Score
("NPS") |
|
|
91 |
|
|
|
90 |
|
|
|
90 |
|
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