Q1 2025 Financial Highlights(compared to Q1 2024)

AUA1,2 and Revenue

Profitability and Cash Flow

Balance sheet

TORONTO, April 30, 2024 /CNW/ - RF Capital Group Inc. (RF Capital or the Company) (TSX: RCG) today reported revenue of $99.4 million in the first quarter of 2025, up 11% compared to the prior year. The increase in revenue was driven by AUA1,2 of $39.2 billion, up $2.1 billion compared to prior year Q1 attributable mainly to strong equity markets, recruiting, and net new asset gains. With year-over-year growth in operating expenses1 increasing 17% to $46.0 million due to balance sheet revaluation adjustments, EBITDA1 decreased 30% to $9.5 million.

For more detail on our results, please refer to our MD&A for the period ending March 31, 2025.

Dave Kelly, President and Chief Executive Officer, commented, "Looking ahead in 2025, in light of the political and macroeconomic uncertainty in the markets, we will continue to be laser-focused on our three strategic growth pillars. We expect to continue deploying our free cash flow available for growth1 to ensure our advisor teams have the products, services, and tools needed to provide superior client advice and service, as well as into recruitment. We are excited by the recent appointment of Kevin Shubley to SVP, Head of Advisor Experience and Growth. Kevin will lead the work to help our advisor teams grow, make their practices more valuable and to ensure a relentless focus on creating operational excellence. With our corporate teams, advisor teams, and the Executive Committee aligned, we are the best independent choice for Canada's top advisors and their clients." |

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 April 30, 2025, the board of directors approved a cash dividend of $0.233313 per Series B Preferred Share for a total of $1,073, payable on June 30, 20253 to preferred shareholders of record on June 13, 2025.

First Quarter 2025 and Annual Meeting of Shareholders

The Company will hold its annual meeting of shareholders (the Meeting), in person, at its head office in Toronto, on the 25th floor, at 100 Queens Quay East, on Thursday, May 1, at 11:00 a.m. (EST).

The Chair of RF Capital's Board of Directors, Donald Wright, will host the Meeting. President and CEO, Dave Kelly, will then discuss the financial and strategic highlights of 2024, and provide a brief update on the Company's first quarter 2025 results and outlook for the remainder of the year. A live and archived audio webcast with slide presentation will be accessible at https://richardsonwealth.com/investor-relations/shareholder-meetings/.

Select Financial Information

The following table presents the Company's financial results for Q1 2025, Q4 2024 and Q1 2024.

Quarterly Results

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

Non-GAAP and Supplemental 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 document 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 table in the "Quarterly Non-GAAP Information" section below reconciles 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, amortization and depreciation of premises and equipment, and amortization of intangibles. These are the expenses that factor into the EBITDA calculation discussed above.

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

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 table in the "Quarterly Non-GAAP Information" section below reconciles 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 table in the "Quarterly Non-GAAP Information" section below reconciles 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

Commencing Q4 2024, we updated our calculation to exclude the non-repayable portion of employee and other loans receivable from current assets.

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 "Quarterly Non-GAAP Information" section below provides our net working capital calculation.

Free Cash Flow

Commencing Q1 2025, we have updated our free cash flow available for growth and free cash flow calculations to consider cash impacts of non-cash operating items and RF Capital preferred share dividends. Comparative periods have been revised to conform with the current period presentation.

Free cash flow available for growth is the cash flow the Company generates from its continuing operations before any investments in growth or transformation initiatives. We use this metric to evaluate the efficiency of our operations and assess the capital available to reinvest in growth activities. It is calculated as cash provided by/(used in) operating activities per the Consolidated Statement of Cash Flows add adjusting items and net outlays to attract new advisors to the firm, less lease payments, RF Capital preferred share dividends, and maintenance capital expenditures.

Free cash flow is the net cash flow that the Company generates from its continuing operations after investments in growth and transformation initiatives. We use free cash flow to evaluate the efficiency of our growth initiatives and assess the capital available after investments in growth. It is calculated as free cash flow available for growth less net outlays to attract new advisors to the firm, capital expenditures on growth initiatives, and adjusting items.

The table in the "Quarterly Non-GAAP Information" section below reconciles 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 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.

Quarterly Non-GAAP Information

The following table presents select quarterly 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 brand, the Company is one of the largest independent wealth management firms in Canada with $39.2 billion in assets under administration (as of March 31, 2025) and 23 offices across the country. The firm's Advisor 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.

To learn more about the Company, please visit www.rfcapgroup.com and www.RichardsonWealth.com to view our 2024 annual report and our latest recruiting brochure.

SOURCE RF Capital Group Inc.

SOURCE: RF Capital Group Inc.

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

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