AUA1,2 and Revenue

Profitability and Cash Flow

Balance Sheet

TORONTO, Feb. 27, 2025 /CNW/ - RF Capital Group Inc. (RF Capital or the Company) (TSX: RCG) today reported revenue of $369.3 million in fiscal 2024, up 5% from prior year. The increase in revenue was driven by 12% growth in AUA1,2, as strong equity markets and recruiting over the past 12 months offset advisor attrition. Adjusted EBITDA1 decreased 4% due to a 6% increase in adjusted operating expenses, despite a 5% revenue increase.

In the fourth quarter of 2024, the Company generated revenue of $96.9 million, up $10.1 million or 12% compared to the same period in 2023. Revenue benefited from a $9.7 million or 15% increase in fee revenue, offset by a $2.1 million or 19% decline in interest income mainly due to lower benchmark rates. This revenue growth more than offset $2.5 million or 7% higher adjusted operating expenses, leading to adjusted EBITDA of $16.2 million or growth of $1.7 million or 12% compared to prior year.

For more detail on the Company's results, please refer to our 2024 MD&A.

Dave Kelly, President and Chief Executive Officer, commented, "We achieved a major milestone in 2024, reaching $40 billion of AUA. Our next milestone objective is to reach $50 billion of AUA. With a concentrated effort on two of the three core pillars of our growth strategy: pillar one â?? double down on support for advisory teams; and pillar two â?? continue to drive recruitment, our path is set. For the third pillar â?? acquiring or partnering with like-minded firms â?? we will continue to identify and evaluate all opportunities that align with our strategy and generate shareholder value."

Outlook and Key Performance Drivers

Our current view on the drivers of our financial performance and profitability for 2025 is as follows:

Preferred Share Dividend

On February 27, 2025, the board of directors approved a cash dividend of $0.233313 per Series B Preferred Share for a total of $1,073,000 payable on March 28, 20253 to preferred shareholders of record on March 14, 2025.

Q4 and Fiscal 2024 Conference Call

A conference call and live audio webcast to discuss RF Capital's fourth quarter and fiscal 2024 financial results will be held on Friday, February 28, 2025, at 10:00 a.m. (EST). Interested parties are invited to access the quarterly conference call on a listen-only basis by dialing 416-406-0743 or 1-800-898-3989 (toll free) and entering participant passcode 7715540#. The conference call will also be accessible as a live audio webcast through the Investor Relations section of the Company's website at https://richardsonwealth.com/investor-relations/financial-information/. A recording of the conference call will be available until Sunday, March 30, 2025, by dialing 905-694-9451 or 1-800-408-3053 (toll free) and entering access code 9059350#. The webcast will be archived at https://richardsonwealth.com/investor-relations/financial-information/.

Select Financial Information

The following table presents the Company's financial results for fiscal 2024 and the two preceding periods.

Quarterly Results

The following table presents select financial information for our eight most recently completed financial quarters.

Non-GAAP and Supplementary Financial Measures

In addition to GAAP prescribed measures, we use a variety of non-GAAP financial measures, non-GAAP ratios and SFMs to assess our performance. We use these non-GAAP financial measures and SFMs because we believe that they provide useful information to investors regarding our performance and results of operations. Readers are cautioned that non-GAAP financial measures, including non-GAAP ratios, and SFMs often do not have any standardized meaning and therefore may not be comparable to similar measures presented by other issuers. Non-GAAP measures are reported in addition to, and should not be considered alternatives to, measures of performance according to IFRS.

Adjusted Results

Some of our non-GAAP financial measures (including non-GAAP ratios) reflect adjusted results. In periods that we determine adjusting items have a significant impact on a user's assessment of ongoing business performance, we may present adjusted results in addition to reported results by removing these items from the reported results. Management considers the adjusting items to be outside of our core operating performance. We believe that adjusted results can enhance comparability across reporting periods and provide the reader with a better understanding of how management views core performance. Adjusted results are also intended to provide the user with results that have greater consistency and comparability to those of other issuers. All adjusting items affect reported expenses.

Adjusting items in this release include the following:

Non-GAAP Financial Measures

A non-GAAP financial measure is a financial measure used to depict our historical or expected future financial performance, financial position or cash flow and, with respect to its composition, either excludes an amount that is included in, or includes an amount that is excluded from, the composition of the most directly comparable financial measure disclosed in our 2024 Annual Financial Statements. A non-GAAP ratio is a financial measure disclosed in the form of a ratio, fraction, percentage, or similar representation and that has a non-GAAP financial measure as one or more of its components.

The primary non-GAAP financial measures (including non-GAAP ratios) used in this release are:

EBITDA

EBITDA is commonly used in the wealth management industry. We believe it provides a more accurate measure of our core operating results and is a commonly used basis for enterprise valuation. EBITDA is used to evaluate core operating performance by adjusting net income/(loss) to exclude:

Adjusted EBITDA is defined as EBITDA excluding adjusting items.

Adjusted EBITDA margin is a non-GAAP ratio defined as adjusted EBITDA as a percentage of revenue.

The tables in the "Annual Non-GAAP Information" and "Quarterly Non-GAAP Information" sections below reconcile our reported net income/(loss) to EBITDA and adjusted EBITDA.

Operating Expenses

Operating expenses are defined as total reported expenses less interest, advisor award and loan amortization, depreciation of premises and equipment, and amortization of intangibles. These are the expenses that factor into the EBITDA calculation discussed above.

Adjusted operating expenses are defined as operating expenses less adjusting items.

Adjusted operating expense ratio is a non-GAAP ratio defined as adjusted operating expenses divided by gross margin.

The tables in the "Annual Non-GAAP Information" and "Quarterly Non-GAAP Information" sections below reconcile our reported total expenses to operating expenses and adjusted operating expenses.

Adjusted Net Income

Adjusted net income is defined as net income/(loss) from continuing operations less adjusting items.

The tables in the "Annual Non-GAAP Information" and "Quarterly Non-GAAP Information" sections below reconcile our reported net income/(loss) to adjusted net income/(loss).

Commissionable Revenue

Commissionable revenue includes fee revenue, trading commissions, commission revenue earned in connection with the placement of new issues, and revenue earned on the sale of insurance products. We use commissionable revenue to evaluate advisor compensation paid on that revenue.

Net Working Capital

Net working capital represents the excess capital available to deploy in operations or growth and is comprised of current assets less current liabilities. We use net working capital to manage our liquidity as well as evaluate the efficiency of our operations. Net working capital is widely used across the wealth management industry and beyond to assess the financial health of entities and associated risks.

The table in the "Annual Non-GAAP Information" section below provides our net working capital calculation.

Free Cash Flow

Free cash flow available for growth is the cash flow that the Company generates from its continuing operations before any investments in growth or transformation initiatives. It is calculated as cash provided by/(used in) operating activities per the Consolidated Statement of Cash Flows before any changes in non-cash operating items, less lease payments and maintenance capital expenditures. It does not consider adjusting items or the income/(loss) from discontinued operations.

Free cash flow is the net cash flow that the Company generates from its operations after funding its growth and transformation initiatives, including building out new offices to accommodate its growth. It is calculated as free cash flow available for growth plus the income/(loss) from discontinued operations and leasehold inducements less cash outlays to recruit new advisors to the firm, capital expenditures on growth initiatives, adjusting items, and the net change in balance sheet provisions.

The tables in the "Annual Non-GAAP Information" and "Quarterly Non-GAAP Information" sections below reconcile our reported cash provided by/(used in) operating activities to free cash flow for growth and free cash flow.

Supplementary Financial Measures

An SFM is a financial measure that is not reported in our 2024 Annual Financial Statements, and is, or is intended to be, reported periodically to represent historical or expected future financial performance, financial position, or cash flows. The Company's key SFMs disclosed in this release include AUA, average AUA per team, recruited assets, and asset yield. Management uses these measures to assess the operational performance of the Company. These measures do not have any definition prescribed under IFRS and do not meet the definition of a non-GAAP measure or non-GAAP ratio and may differ from the methods used by other companies and therefore these measures may not be comparable to other companies. The composition and explanation of an SFM is provided in this release where the measure is first disclosed if the SFM's labeling is not sufficiently descriptive.

Annual Non-GAAP Information

The following table presents select non-GAAP financial information for the most recent and prior fiscal years.

 

Quarterly Non-GAAP Information

The following table presents select non-GAAP financial information for our eight most recently completed financial quarters.

About RF Capital Group Inc.

RF Capital Group Inc. is a TSX-listed (TSX: RCG) wealth management-focused company. Operating under the Richardson Wealth Limited brand, the Company is one of the largest independent wealth management firms in Canada with $40 billion in assets under administration (as of January 31, 2025) and 22 offices across the country. The firm's advisory teams are focused exclusively on providing strategic wealth advice and innovative investment solutions customized for high net worth or ultra-high net worth families and entrepreneurs. The Company is committed to maintaining exceptional fiduciary standards and has earned certification â?? determined annually â?? from the Centre for Fiduciary Excellence for its Separately Managed and Portfolio Management Account platforms. For the seventh year in a row, Richardson Wealth has been certified as a "great place to work" by Great Place to WorkÂR, a global authority on workplace culture. For further information, please visit www.rfcapgroup.com and www.RichardsonWealth.com.

SOURCE RF Capital Group Inc.

SOURCE: RF Capital Group Inc.

SOURCE: Richardson Wealth

For Further Information Please Contact: RF Capital Group Inc., Investor Relations,
Tel: (416) 943-6607, e-mail investorrelations@rfcapgroup.com

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