8-K
eXp World Holdings, Inc. (AGNT)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 2, 2023
EXP WORLD HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
| | | | | |
|---|---|---|---|---|
| Delaware | **** | 001-38493 | **** | 98-0681092 |
| (State or other jurisdiction | | (Commission | | (IRS Employer |
| of incorporation) | | File Number) | | Identification No.) |
| | | |
|---|---|---|
| 2219 Rimland Drive, Suite 301 , Bellingham , WA | | 98226 |
| (Address of principal executive offices) | | (Zip Code) |
| ( 360 ) 685-4206 | ||
| (Registrant’s telephone number, including area code) | ||
| Not applicable | ||
| (Former name or former address, if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to section 12(b) of the Act:
| | | | |
|---|---|---|---|
| Title of Each Class | Trading Symbol(s) | | Name of each exchange on which registered |
| Common Stock, 0.00001 par value per share | EXPI | **** | The Nasdaq Stock Market |
All values are in US Dollars.
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02.Results of Operations and Financial Condition.
On November 2, 2023, eXp World Holdings, Inc. (the “Company”) issued a press release announcing its financial results for the three and nine months ended September 30, 2023. A copy of the press release is attached hereto as Exhibit 99.1.
The information in this Item 2.02 and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing by the Company under the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”), except as expressly set forth by specific reference in such filing.
Exhibit 99.1 contains certain non-GAAP financial information. The reconciliation of such non-GAAP financial information to GAAP financial measures is included in Exhibit 99.1. Further, Exhibit 99.1 contains statements intended as “forward-looking statements,” all of which are subject to the cautionary statements about forward-looking statements set forth therein.
Item 7.01 Regulation FD Disclosure.
In the press release issued on November 2, 2023, and attached hereto as Exhibit 99.1, the Company also announced that it would conduct a virtual fireside chat today, Thursday, November 2, 2023, at 2:00 p.m. (Pacific Time) to discuss its financial results for the three and nine months ended September 30, 2023.
On October 25, 2023, the Company’s Board of Directors declared a cash dividend of $0.05 per share of the Company’s outstanding common stock. The dividend is expected to be paid on November 30, 2023 to the stockholders of record on November 16, 2023.
The information in this Item 7.01 shall not be deemed “filed” for purposes of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing by the Company under the Exchange Act or the Securities Act, except as expressly set forth by specific reference in such filing.
The information in this report and Exhibit 99.1 hereto may contain “forward-looking statements” within the meaning of the Securities Act and the Exchange Act. There can be no assurance that future dividends will be declared. The declaration of future dividends is subject to approval of the Board of Directors after its review of the Company’s financial performance and cash needs. Declaration of future dividends is also subject to various risks and uncertainties.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release dated November 2, 2023 |
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| eXp World Holdings, Inc. | |
|---|---|
| (Registrant) | |
| Date: November 2, 2023 | /s/ James Bramble |
| James Bramble | |
| Chief Legal Counsel |
Exhibit 99.1
eXp World Holdings Reports Q3 2023 Results
Agent Count Grew 5% Compared to Q3 2022 to More Than 89,000 Agent s in 24 Global Markets
International Realty Revenue Increased 47% Compared to Q3 2022 to an All-Time Record
Company Declares Cash Dividend for Q4 2023 of $0.05 per Share of Common Stock
BELLINGHAM, Wash. — Nov. 2, 2023 — eXp World Holdings, Inc. (Nasdaq: EXPI), or the “Company”, the holding company for eXp Realty^®^, Virbela and SUCCESS^®^ Enterprises, today announced financial results for the third quarter ended Sept. 30, 2023.
Third Quarter 2023 Consolidated Financial Highlights as Compared to the Same Year-Ago Quarter:
| ● | Revenue decreased 2% to $1.2 billion. |
|---|---|
| ● | Gross profit decreased 10% to $83.6 million. |
| --- | --- |
| ● | Net income of $1.3 million. Earnings per diluted share of $0.01 compared to earnings per diluted share of $0.03 in the year-ago quarter. |
| --- | --- |
| ● | Adjusted EBITDA (a non-GAAP financial measure) increased 53% to $19.0 million. |
| --- | --- |
| ● | Generated $56.8 million of Adjusted Operating Cash Flow (a non-GAAP financial measure). |
| --- | --- |
| ● | As of Sept. 30, 2023, cash and cash equivalents totaled $120.1 million, compared to $121.6 million as of Dec. 31, 2022. The Company repurchased approximately $55.9 million of common stock during the third quarter of 2023. |
| --- | --- |
| ● | The Company paid a cash dividend for the third quarter of 2023 of $0.05 per share of common stock on Sept. 4, 2023. On Oct. 25, 2023, the Company’s Board of Directors declared a cash dividend of $0.05 per share of common stock for the fourth quarter of 2023, expected to be paid on Nov. 30, 2023 to stockholders of record on Nov. 16, 2023. |
| --- | --- |
Management Commentary
“During the third quarter, we continued to focus on agent-centric innovation that drove meaningful results, as we once again increased eXp’s agent Net Promoter Score (aNPS) while extending our market share gains,” said Glenn Sanford, Founder, Chairman and CEO of eXp World Holdings. “In a slower market environment where every transaction counts, eXp’s agents in the U.S. significantly outperformed the market during the third quarter. This outstanding performance speaks to the differentiated nature of eXp’s platform and the power of our unique, success-oriented culture.
“Moving forward, we see many opportunities to further iterate on our agent-centric value proposition with programs like Boost, Accelerate, Thrive, and eXp exclusives and partnerships with Opendoor and the HomeRiver Group. Internationally, we recently announced a partnership with HomeHunter Global. All of this ultimately empowers our agents to spend more of their time on revenue-generating opportunities. We continue to believe that our investments in agent success are the key to driving superior growth over the long term.”
“We delivered solid financial performance during the third quarter, with year-over-year Adjusted EBITDA growth of 53% despite challenging market conditions as we continued to improve the efficiency of our operations,” said Jeff Whiteside, CFO and Chief Collaboration Officer of eXp World Holdings. “We once again gained market share, despite lower market activity due to elevated mortgage rates, which resulted in decreased transaction value compared to the prior year quarter.
“While we continue to prudently manage expenses, our strong cash flow profile enables us to simultaneously pursue an ambitious and innovative agent-centric agenda while allocating capital to our shareholders through share repurchases and cash dividends. By continuing to invest in our agents through the current market cycle, we are building a strong foundation for accelerated growth and continued share gains despite fluctuations in the market.”
Third Quarter 2023 Operational Highlights as Compared to the Same Year-Ago Period:
| ● | eXp Realty ended the third quarter of 2023 with a global agent Net Promoter Score of 74, up from 71 a year ago. NPS is a measure of agent satisfaction and an important key performance indicator (KPI) given the Company’s intense focus on improving the agent experience. |
|---|---|
| ● | Agents and brokers on the eXp Realty platform increased 5% to 89,156 as of Sept. 30, 2023. |
| --- | --- |
| ● | Transactions increased 1% to 139,480. |
| --- | --- |
| ● | Transaction volume decreased 4% to $48.5 billion. |
| --- | --- |
| ● | Announced the first brokerage, The Bean Group, to join eXp Realty through the Boost program on Sept. 12, 2023. |
| --- | --- |
| ● | Hosted the inaugural EXPCON Canada, the Company’s first signature event held outside the United States, on Sept. 6-8, 2023. |
| --- | --- |
| ● | Announced the expansion of its partnership with Realty.com into Canada with the launch of Realty.ca on Sept. 7, 2023. |
| --- | --- |
| ● | Appointed Bain Fellow and NPS creator Fred Reichheld to the eXp World Holdings Board of Directors on Sept. 7, 2023. |
| --- | --- |
| ● | Announced eXp Realty exceeded the 1,000-agent milestone in South Africa on Aug. 10, 2023. |
| --- | --- |
| ● | Launched eXp Luxury Division in Canada on Sept. 7, 2023. |
| --- | --- |
Third Quarter 2023 Results – Virtual Fireside Chat
The Company will hold a virtual fireside chat and investor Q&A with eXp World Holdings Founder and CEO Glenn Sanford and CFO Jeff Whiteside on Thursday, Nov. 2, 2023 at 2 p.m. PT / 5 p.m. ET.
The investor Q&A is open to investors, current shareholders and anyone interested in learning more about eXp World Holdings and its companies. Submit questions in advance for inclusion to investors@eXpWorldHoldings.com.
Date: Thursday, Nov. 2, 2023
Time: 2 p.m. PT / 5 p.m. ET
Location: EXPI Campus. Join at https://expworldholdings.com/contact/download/
Livestream: expworldholdings.com/events
About eXp World Holdings, Inc.
eXp World Holdings, Inc. (Nasdaq: EXPI) is the holding company for eXp Realty^®^, Virbela and SUCCESS^®^ Enterprises.
eXp Realty is the largest independent real estate company in the world with more than 89,000 agents in the United States, Canada, the United Kingdom, Australia, South Africa, India, Mexico, Portugal, France, Puerto Rico, Brazil, Italy, Hong Kong, Colombia, Spain, Israel, Panama, Germany, Dominican Republic, Greece, New Zealand, Chile, Poland and Dubai and continues to scale internationally. As a publicly traded Company, eXp World Holdings provides real estate professionals the unique opportunity to earn equity awards for production goals and contributions to overall Company growth. eXp World Holdings and its businesses offer a full suite of brokerage and real estate tech solutions, including its innovative residential and commercial brokerage model, professional services, collaborative tools and personal development. The cloud-based brokerage is powered by Virbela, an immersive 3D platform that is deeply social and collaborative, enabling agents to be more connected and productive. SUCCESS® Enterprises, anchored by SUCCESS® magazine and its related media properties, was established in 1897 and is a leading personal and professional development brand and publication.
For more information, visit https://expworldholdings.com.
Use of Non-GAAP Financial Measures
To provide investors with additional information regarding our financial results, this press release includes references to Adjusted EBITDA and Adjusted Operating Cash Flow, which are non-U.S. GAAP financial measures that may be different than similarly titled measures used by other companies. These measures are presented to enhance investors’ overall understanding of the Company’s financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP.
The Company’s Adjusted EBITDA provides useful information about financial performance, enhances the overall understanding of past performance and future prospects, and allows for greater transparency with respect to a key metric used by management for financial and operational decision-making. Adjusted EBITDA helps identify underlying trends in the business that otherwise could be masked by the effect of the expenses that are excluded in Adjusted EBITDA. In particular, the Company believes the exclusion of stock and stock option expenses provides a useful supplemental measure in evaluating the performance of operations and provides better transparency into results of operations.
The Company defines the non-U.S. GAAP financial measure of Adjusted EBITDA to mean net income (loss), excluding other income (expense), income tax benefit (expense), depreciation, amortization, impairment charges, stock-based compensation expense, and stock option expense. The Company
defines the non-U.S. GAAP financial measure of Adjusted Operating Cash Flow to mean net cash provided by operating activities, excluding the change in customer deposits. Adjusted EBITDA and Adjusted Operating Cash Flow may assist investors in seeing financial performance through the eyes of management, and may provide an additional tool for investors to use in comparing core financial performance over multiple periods with other companies in the industry.
Adjusted EBITDA and Adjusted Operating Cash Flow should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP. There are a number of limitations related to the use of Adjusted EBITDA compared to Net Income (loss), the closest comparable U.S. GAAP measure. Some of these limitations are:
| ● | Adjusted EBITDA excludes stock-based compensation expense and stock option expense, which have been, and will continue to be for the foreseeable future, significant recurring expenses in the business and an important part of the compensation strategy; and |
|---|---|
| ● | Adjusted EBITDA excludes certain recurring, non-cash charges such as depreciation of fixed assets, amortization of acquired intangible assets, and impairment charges related to these long-lived assets, and, although these are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future. |
| --- | --- |
Safe Harbor Statement
The statements contained herein may include statements of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. These statements include, but are not limited to, statements about the continued growth of our agent and broker base; engagement in third party affiliations; improvements in technology and operational processes; expansion of our residential real estate brokerage business into foreign markets; revenue growth; share repurchases; dividends; and financial performance. Such forward-looking statements speak only as of the date hereof, and the Company undertakes no obligation to revise or update them. Such statements are not guarantees of future performance. Important factors that may cause actual results to differ materially and adversely from those expressed in forward-looking statements include changes in business or other market conditions; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the Company’s Securities and Exchange Commission filings, including but not limited to the most recently filed Quarterly Report on Form 10-Q and Annual Report on Form 10-K.
Media Relations Contact:
eXp World Holdings, Inc.
mediarelations@expworldholdings.com
****
Investor Relations Contact:
Denise Garcia
investors@expworldholdings.com
EXP WORLD HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share amounts and per share data)
| | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|
| | | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
| | | 2023 | | 2022 | | 2023 | | 2022 | |
| Revenues | | $ 1,214,513 | | $ 1,238,975 | | $ 3,298,056 | | $ 3,664,766 | |
| Operating expenses | | | | | | | | | |
| Commissions and other agent-related costs | | 1,130,888 | | 1,145,853 | | 3,044,858 | | 3,380,930 | |
| General and administrative expenses | | 78,568 | | 89,460 | | 232,876 | | 256,173 | |
| Sales and marketing expenses | | 3,194 | | 3,636 | | 9,035 | | 11,546 | |
| Total operating expenses | | 1,212,650 | | 1,238,949 | | 3,286,769 | | 3,648,649 | |
| Operating income | | 1,863 | | 26 | | 11,287 | | 16,117 | |
| Other (income) expense | | | | | | | | | |
| Other (income) expense, net | | (708) | | (78) | | (2,887) | | 394 | |
| Equity in losses of unconsolidated affiliates | | 354 | | 329 | | 839 | | 1,213 | |
| Total other (income) expense, net | | (354) | | 251 | | (2,048) | | 1,607 | |
| Income (loss) before income tax expense | | 2,217 | | (225) | | 13,335 | | 14,510 | |
| Income tax (benefit) expense | | 868 | | (4,627) | | 1,111 | | (8,115) | |
| Net income | | 1,349 | | 4,402 | | 12,224 | | 22,625 | |
| Net income attributable to noncontrolling interest | | - | | - | | - | | 18 | |
| Net income attributable to eXp World Holdings, Inc. | | $ 1,349 | | $ 4,402 | | $ 12,224 | | $ 22,643 | |
| Earnings per share | | | | | | | | | |
| Basic | | 0.01 | | 0.03 | | 0.08 | | 0.15 | |
| Diluted | | 0.01 | | 0.03 | | 0.08 | | 0.14 | |
| Weighted average shares outstanding | | | | | | | | | |
| Basic | | 153,392,005 | | 151,826,315 | | 153,065,727 | | 150,622,845 | |
| Diluted | | 158,183,888 | | 155,915,307 | | 156,834,985 | | 156,434,440 | |
The following tables reflects Revenues and Adjusted Segment EBITDA by reportable segments:
| | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | |
| SEGMENT REVENUES | ||||||||||
| (In thousands) | | |||||||||
| | | |||||||||
| | | Three Months Ended September 30, | | Nine Months Ended September 30, | ||||||
| Revenues | 2023 | 2022 | | | 2023 | 2022 | | |||
| North American Realty | | $ 1,198,207 | | $ 1,226,368 | | | $ 3,254,666 | | $ 3,632,276 | |
| International Realty | | 14,896 | | 10,146 | | | 37,644 | | 26,148 | |
| Virbela | | 1,720 | | 2,328 | | | 5,694 | | 6,181 | |
| Other Affiliated Services | | 979 | | 1,417 | | | 3,729 | | 3,298 | |
| Revenues reconciliation: | | | | | | | | | | |
| Segment eliminations | | (1,289) | | (1,284) | | | ($ 3,677) | | ($ 3,137) | |
| Consolidated revenues | | $ 1,214,513 | | $ 1,238,975 | | | $ 3,298,056 | | $ 3,664,766 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | |
| ADJUSTED SEGMENT EBITDA | ||||||||||
| (In thousands) | | |||||||||
| | | |||||||||
| | | Three Months Ended September 30, | | Nine Months Ended September 30, | ||||||
| | 2023 | 2022 | | | 2023 | 2022 | | |||
| North American Realty | | $ 27,171 | | $ 22,445 | | | $ 82,496 | | $ 91,115 | |
| International Realty | | (2,647) | | (4,614) | | | (10,105) | | (9,584) | |
| Virbela | | (1,297) | | (3,197) | | | (3,789) | | (8,684) | |
| Other Affiliated Services | | (918) | | (563) | | | (2,767) | | (2,139) | |
| Corporate expenses and other | | (3,359) | | (1,722) | | | (8,829) | | (13,737) | |
| Consolidated Adjusted EBITDA | | $ 18,950 | | $ 12,349 | | | $ 57,006 | | $ 56,971 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED US-GAAP NET INCOME TO ADJUSTED EBITDA RECONCILIATION | ||||||||||
| (In thousands) | | |||||||||
| | | |||||||||
| | | Three Months Ended September 30, | | Nine Months Ended September 30, | ||||||
| | 2023 | 2022 | | | 2023 | 2022 | | |||
| Net income | | $ 1,349 | | $ 4,402 | | | $ 12,224 | | $ 22,625 | |
| Other (income) expense, net | | (354) | | 251 | | | (2,048) | | 1,607 | |
| Income tax (benefit) expense | | 868 | | (4,627) | | | 1,111 | | (8,115) | |
| Depreciation and amortization | | 2,790 | | 2,767 | | | 8,148 | | 7,154 | |
| Stock compensation expense ^(1)^ | | 11,764 | | 5,800 | | | 29,912 | | 22,828 | |
| Stock option expense | | 2,533 | | 3,756 | | | 7,659 | | 10,872 | |
| Adjusted EBITDA | | $ 18,950 | | $ 12,349 | | | $ 57,006 | | $ 56,971 | |
| | | | | | | | | | | |
| ^(1)^This includes agent growth incentive stock compensation expense and stock compensation expense related to business acquisitions. | |
| | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | |
| ADJUSTED OPERATING CASH FLOW | |||||||||
| (In thousands) | | ||||||||
| | | ||||||||
| | | Three Months Ended September 30, | | Nine Months Ended September 30, | |||||
| | 2023 | 2022 | | 2023 | 2022 | | |||
| Net Cash Provided by Operating Activities | | $ 22,348 | | $ 22,026 | | $ 176,516 | | $ 187,324 | |
| Less: Customer Deposits | | (34,433) | | (42,028) | | 16,421 | | (16,135) | |
| Adjusted Operating Cash Flow | | $ 56,781 | | $ 64,054 | | $ 160,095 | | $ 203,459 | |
| | | | | | | | | | |
EXP WORLD HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
| | | | | |
|---|---|---|---|---|
| | | September 30, 2023 | | December 31, 2022 |
| | | (Unaudited) | | |
| ASSETS | | | | |
| CURRENT ASSETS | | | | |
| Cash and cash equivalents | | $ 120,141 | | $ 121,594 |
| Restricted cash | | 54,000 | | 37,789 |
| Accounts receivable, net of allowance for credit losses of $1,803 and $4,014, respectively | | 113,344 | | 87,262 |
| Prepaids and other assets | | 12,325 | | 8,468 |
| TOTAL CURRENT ASSETS | | 299,810 | | 255,113 |
| Property, plant, and equipment, net | | 13,862 | | 18,151 |
| Operating lease right-of-use assets | | 14 | | 2,127 |
| Other noncurrent assets | | 7,598 | | 1,703 |
| Intangible assets, net | | 11,458 | | 8,700 |
| Deferred tax assets | | 65,241 | | 68,676 |
| Goodwill | | 24,879 | | 27,212 |
| TOTAL ASSETS | | $ 422,862 | | $ 381,682 |
| LIABILITIES AND EQUITY | | | | |
| CURRENT LIABILITIES | | | | |
| Accounts payable | | $ 9,322 | | $ 10,391 |
| Customer deposits | | 54,210 | | 37,789 |
| Accrued expenses | | 108,385 | | 78,944 |
| Current portion of lease obligation - operating lease | | 14 | | 175 |
| TOTAL CURRENT LIABILITIES | | 171,931 | | 127,299 |
| Long-term payable | | 5 | | 4,697 |
| Long-term lease obligation - operating lease, net of current portion | | - | | 694 |
| TOTAL LIABILITIES | | 171,936 | | 132,690 |
| EQUITY | | | | |
| Common Stock, $0.00001 par value 900,000,000 shares authorized; 180,883,383 issued and 153,798,815 outstanding at September 30, 2023; 171,656,030 issued and 152,839,239 outstanding at December 31, 2022 | | 2 | | 2 |
| Additional paid-in capital | | 757,006 | | 611,872 |
| Treasury stock, at cost: 27,084,568 and 18,816,791 shares held, respectively | | (519,635) | | (385,010) |
| Accumulated earnings | | 11,968 | | 20,723 |
| Accumulated other comprehensive income | | 416 | | 236 |
| Total eXp World Holdings, Inc. stockholders' equity | | 249,757 | | 247,823 |
| Equity attributable to noncontrolling interest | | 1,169 | | 1,169 |
| TOTAL EQUITY | | 250,926 | | 248,992 |
| TOTAL LIABILITIES AND EQUITY | | $ 422,862 | | $ 381,682 |
| | | | | |
|---|---|---|---|---|
| | | | | |
| EXP WORLD HOLDINGS, INC. | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
| (In thousands) | ||||
| | ||||
| | | Nine Months Ended September 30, | ||
| | | 2023 | | 2022 |
| OPERATING ACTIVITIES | | | | |
| Net income | | $ 12,224 | | $ 22,625 |
| Reconciliation of net income to net cash provided by operating activities: | | | | |
| Depreciation expense | | 6,299 | | 5,699 |
| Amortization expense - intangible assets | | 1,849 | | 1,455 |
| Loss on disposition of business | | 472 | | 361 |
| Allowance for credit losses on receivables/bad debt on receivables | | (2,211) | | 588 |
| Equity in loss of unconsolidated affiliates | | 839 | | 1,213 |
| Agent growth incentive stock compensation expense | | 29,912 | | 22,828 |
| Stock option compensation | | 7,659 | | 10,872 |
| Agent equity stock compensation expense | | 104,548 | | 131,230 |
| Deferred income taxes, net | | 3,435 | | (10,845) |
| Changes in operating assets and liabilities: | | | | |
| Accounts receivable | | (23,401) | | 13,603 |
| Prepaids and other assets | | (3,966) | | (3,003) |
| Customer deposits | | 16,421 | | (16,135) |
| Accounts payable | | (1,069) | | 1,952 |
| Accrued expenses | | 28,039 | | 4,770 |
| Long term payable | | (4,692) | | - |
| Other operating activities | | 158 | | 111 |
| NET CASH PROVIDED BY OPERATING ACTIVITIES | | 176,516 | | 187,324 |
| INVESTING ACTIVITIES | | | | |
| Purchases of property, plant, equipment | | (4,193) | | (9,222) |
| Proceeds from sale of business | | 330 | | - |
| Acquisition of business, net of cash acquired | | - | | (9,668) |
| Investments in unconsolidated affiliates | | (5,525) | | - |
| Capitalized software development costs in intangible assets | | (1,930) | | - |
| NET CASH USED IN INVESTING ACTIVITIES | | (11,318) | | (18,890) |
| FINANCING ACTIVITIES | | | | |
| Repurchase of common stock | | (134,625) | | (139,635) |
| Proceeds from exercise of options | | 4,761 | | 2,221 |
| Transactions with noncontrolling interests | | - | | (425) |
| Dividends declared and paid | | (20,979) | | (18,537) |
| NET CASH USED IN FINANCING ACTIVITIES | | (150,843) | | (156,376) |
| Effect of changes in exchange rates on cash, cash equivalents and restricted cash | | 403 | | (771) |
| Net change in cash, cash equivalents and restricted cash | | 14,758 | | 11,287 |
| Cash, cash equivalents and restricted cash, beginning balance | | 159,383 | | 175,910 |
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING BALANCE | | $ 174,141 | | $ 187,197 |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | | | | |
| Cash paid for income taxes | | 2,382 | | 2,933 |
| SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | | | | |
| Termination of lease obligation - operating lease | | 855 | | - |
| Issuance of treasury stock, for acquisition | | - | | 4,800 |
| Contingent consideration for disposition of business | | 1,209 | | - |
| Property, plant and equipment increase due to transfer of right-of-use lease asset | | 1,100 | | - |
| Property, plant and equipment purchases in accounts payable | | 27 | | 20 |