Reliance Global Group Inc (RELI) 2023 Q3 法說會逐字稿

Greetings. Welcome to the Reliance Global third-quarter 2023 financial results and business update conference call. (Operator Instructions) Please note that this conference is being recorded. I will now turn the conference over to your host today, Ted Ayvas, Investor Relations. Ted, you may begin.

問候。歡迎參加 Reliance Global 2023 年第三季財務表現與業務更新電話會議。 （操作員說明）請注意，本次會議正在錄製中。我現在將會議交給今天的東道主，投資者關係部門的泰德·艾瓦斯 (Ted Ayvas)。泰德，你可以開始了。

Thanks, Paul. Good afternoon and thank you for joining Reliance Global Group's 2023 third-quarter financial results and business update conference call. On the call with us today are Ezra Beyman, Chairman and Chief Executive Officer of Reliance Global Group; and Joe Markovits, Chief Financial Officer at Reliance.

謝謝，保羅。下午好，感謝您參加 Reliance Global Group 2023 年第三季財務業績和業務更新電話會議。今天與我們通話的是 Reliance Global Group 董事長兼執行長 Ezra Beyman；喬·馬科維茨 (Joe Markovits)，Reliance 財務長。

Earlier today, the company announced its operating results for the three months ended September 30, 2023. The press release is posted on the company's website, www.relianceglobalgroup.com. In addition, the company has filed its quarterly report on Form 10-Q with the US Securities and Exchange Commission as well which can also be accessed on the company's website as well as the SEC's website at www.sec.gov.

今天早些時候，該公司公佈了截至 2023 年 9 月 30 日的三個月營運業績。新聞稿發佈在該公司網站 www.relianceglobalgroup.com 上。此外，該公司還向美國證券交易委員會提交了 10-Q 表季度報告，該報告也可以在該公司網站以及 SEC 網站 www.sec.gov 上取得。

If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020. Before Mr. Beyman reviews the company's operating results for the quarter ended September 30, 2023, we would like to remind everyone that this conference call may contain forward-looking statements. All statements other than statements of historical facts contained in this conference call, including statements regarding our future results of operations and financial position, strategy and plan, and our expectations for future operations are forward-looking statements.

如果您在通話後有任何疑問或想了解有關該公司的任何其他信息，請致電 212-671-1020 聯繫 Crescendo Communications。在貝曼先生回顧公司截至 2023 年 9 月 30 日的季度營運業績之前，我們想提醒大家，本次電話會議可能包含前瞻性陳述。本次電話會議中除歷史事實陳述外的所有陳述，包括有關我們未來經營業績和財務狀況、戰略和計劃以及我們對未來經營的預期的陳述，均為前瞻性陳述。

The words anticipate, estimate, expect, project, plan, seek, intend, believe, may, might, will, should, could, likely, continue, design, and the negative of such terms and other words and terms of similar expressions are intended to identify forward-looking statements. These forward-looking statements are based largely on the company's current expectations and projections about future events and trends that it believes may affect its financial condition, results of operations, strategy, short-term and long-term business operations and objectives, and financial needs.

預期、估計、期望、項目、計劃、尋求、打算、相信、可能、可能、將、應該、可能、可能、繼續、設計等詞語以及此類術語的否定詞和類似表達的其他詞語和術語均旨在辨識前瞻性陳述。這些前瞻性陳述主要基於公司當前對其認為可能影響其財務狀況、經營業績、策略、短期和長期業務運營和目標以及財務需求的未來事件和趨勢的預期和預測。 。

These forward-looking statements are subject to several risks, uncertainties, and assumptions as described in the company's Form 10-K filed with the US Securities and Exchange Commission on March 30, 2023. Because of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussions in this conference call may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

這些前瞻性陳述受到本公司於2023 年3 月30 日向美國證券交易委員會提交的10-K 表格中所述的多項風險、不確定性和假設的影響。由於這些風險、不確定性和假設，前瞻性陳述- 本次電話會議中討論的前瞻性事件和情況可能不會發生，實際結果可能與前瞻性陳述中預期或暗示的結果有重大和不利的差異。

You should not rely upon forward-looking statements as predictions of future events. Although the company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, level of activity, performance, or achievements. In addition, neither the company or any person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The company disclaims any duty to update any of these forward-looking statements.

您不應依賴前瞻性陳述作為未來事件的預測。儘管公司認為前瞻性陳述中反映的預期是合理的，但它不能保證未來的結果、活動水準、績效或成就。此外，本公司或任何個人均不對任何這些前瞻性陳述的準確性和完整性承擔責任。該公司不承擔更新任何這些前瞻性陳述的義務。

All forward-looking statements attributable to the company are expressly qualified in their entirety by these cautionary statements as well as others made in this conference call. You should evaluate all forward-looking statements made by the company in the context of these risks and uncertainties.

所有歸屬於該公司的前瞻性陳述均完全受到這些警告性陳述以及本次電話會議中所做的其他陳述的明確限制。您應該在這些風險和不確定性的背景下評估公司所做的所有前瞻性陳述。

Having said that, I would now like to turn the call over to Ezra Beyman, Chairman and Chief Executive Officer of Reliance Global Group. Ezra?

話雖如此，我現在想將電話轉給 Reliance Global Group 董事長兼執行長 Ezra Beyman。以斯拉？

Thank you, Ted. Good afternoon and thanks to everyone for joining us today. We are pleased to report a 16% and 90% year-over increase in revenue for the third quarter and first nine months of 2023, respectively. That growth primarily stems from the organic expansion of our business, bolstered by our acquisition of our associates in April 2022. Following the acquisition and the rebranding to RELI Exchange, our agency network has demonstrated consistent growth. Despite substantial investments in RELI Exchange, we managed to cut our operational losses by over 21% in the first nine months of 2023 compared to the same period last year.

謝謝你，泰德。下午好，感謝大家今天加入我們。我們很高興地報告 2023 年第三季和前 9 個月的營收分別年增 16% 和 90%。這一成長主要源自於我們業務的有機擴張，這得益於我們於 2022 年 4 月收購聯營公司。收購並更名為 RELI Exchange 後，我們的代理商網路呈現出持續成長的勢頭。儘管對 RELI Exchange 進行了大量投資，但我們仍設法在 2023 年前 9 個月將營運虧損比去年同期減少了 21% 以上。

Additionally, our working capital has increased $5.3 million or 117% since the end of the 2022 fiscal year. RELI Exchange is crucial to our long-term strategic vision and growth, and we are extremely pleased with the significant progress we've made in such a short time. By equipping independent agency with a robust array of business tools, which include cutting-edge technologies and AI capabilities, RELI Exchange enables these agencies to not only compete but often outperform larger national agencies in their services.

此外，自 2022 財年結束以來，我們的營運資金增加了 530 萬美元，即 117%。 RELI Exchange 對於我們的長期策略願景和發展至關重要，我們對在如此短的時間內取得的重大進展感到非常高興。透過為獨立機構配備一系列強大的業務工具（包括尖端技術和人工智慧功能），RELI Exchange 使這些機構不僅能夠競爭，而且在服務方面往往優於較大的國家機構。

Looking ahead, we're moving to consolidate our stand-alone agencies under the umbrella of RELI Exchange. We are confident this move will bring substantial benefit and efficiencies to both our agents and their clients. This consolidation is expected to significantly enhance the company's market presence across the US as Reliance Global Group will now operate under a unified brand across all business lines.

展望未來，我們將把我們的獨立機構整合到 RELI Exchange 的旗下。我們相信此舉將為我們的代理商及其客戶帶來巨大的利益和效率。此次合併預計將顯著增強該公司在美國的市場份額，因為 Reliance Global Group 現在將在所有業務線中以統一品牌運作。

We also anticipate that this will fortify our relationships with carriers, enabling us to negotiate better commissions and bonus contracts thanks to increased business volumes. Additionally, this strategy will empower our RELI Exchange agency partners, assuring them that the company can sit and effectively securing policies along a broad range of insurance products. It will also create more cross-selling opportunities for our agency partners and allow the company to more efficiently leverage the extensive talent within our organization, particularly in their insurance specialties.

我們也預計，這將加強我們與營運商的關係，使我們能夠透過業務量的增加來談判更好的佣金和獎金合約。此外，這項策略也將增強我們的 RELI Exchange 代理合作夥伴的能力，確保他們公司能夠有效地保護各種保險產品的保單。它還將為我們的代理商合作夥伴創造更多交叉銷售機會，並使公司能夠更有效地利用我們組織內的廣泛人才，特別是在他們的保險專業領域。

Lastly, we believe this unified single firm approach will position us to scale rapidly and seamlessly integrate new acquisitions.

最後，我們相信這種統一的單一公司方法將使我們能夠快速擴展並無縫整合新的收購。

I would now like to turn the call over to Joe Markovits, Chief Financial Officer of Reliance Global, who will review the financial results for the quarter ended September 30, 2023.

我現在想將電話轉給 Reliance Global 財務長 Joe Markovits，他將審查截至 2023 年 9 月 30 日的季度的財務表現。

Thank you, Ezra, and good afternoon. Great to be here with you all today. I'm super excited to share our financial results for the third quarter of 2023. Figures presented are approximates. The company's revenue for the three and nine months ended September 30, 2023, was $3.3 million and $10.4 million, respectively, For the three months, this represents a 16% increase from $2.8 million in the previous year. For nine months, this represents a 19% increase from $8.7 million in the previous year.

謝謝你，以斯拉，下午好。很高興今天能和大家在一起。我非常高興分享我們 2023 年第三季的財務表現。所提供的數據均為近似值。截至2023年9月30日的三個月和九個月，該公司的營收分別為330萬美元和1,040萬美元。這三個月的營收比前一年的280萬美元成長了16%。九個月以來，這比去年的 870 萬美元增加了 19%。

As mentioned by Ezra, the two primary factors driving the enhancements, organic growth and the Q2 '22 acquisition of Barra Associates, now known as RELI Exchange. Total operating expense for the three months ended 9/30/2023 increased by only 13% of $554,000 from the same period in the prior year, notwithstanding a 16% increase in top-line revenue. For the nine months ended September 30, 2023, total operating expense increased by only 4% of $516,000 compared to the same period in the prior year, notwithstanding a 9% increase in top-line revenue.

正如 Ezra 所提到的，推動增強的兩個主要因素是有機成長和 22 年第二季收購 Barra Associates（現稱為 RELI Exchange）。截至 2023 年 9 月 30 日的三個月總營運費用僅比去年同期增加 13%，即 554,000 美元，儘管營收成長了 16%。截至 2023 年 9 月 30 日的九個月，儘管總收入增長了 9%，但總營運費用僅比去年同期增長了 4%，即 516,000 美元。

Loss from operations increased modestly by only 7% to $100,000 for the three months ended 9/30/2023 and actually decreased for the nine months ended 9/30/2023 by 21% or $1.2 million. These results continue to demonstrate the effectiveness of efficiencies Reliance has incorporated in its operations, which are clearly evident and enhanced financial figures.

截至 2023 年 9 月 30 日止的三個月，營運虧損僅小幅增加 7% 至 10 萬美元，而截至 2023 年 9 月 30 日止的九個月，實際減少了 21% 或 120 萬美元。這些結果繼續證明了 Reliance 在其營運中所採用的效率的有效性，這些效率是顯而易見的，並且財務數據也得到了提高。

Net loss for the three and nine months ended September 30, 2023 was $139,000 and $3 million, respectively, for the same periods in the prior year. There was net income that was due to significant unrealized noncash gains in the fair valuation of our derivative positions, which did not reoccur in 2023. Working capital increased by $5.4 million or 117% as of September 30, 2023, from December 31, 2022, due in part to a capital raise earlier this year, a cash collection from a legal settlement, and of course, enhanced cash management incorporated by the company.

截至 2023 年 9 月 30 日的三個月和九個月的淨虧損分別為 139,000 美元和 300 萬美元，去年同期。淨利潤是由於我們的衍生性商品頭寸公允估值中出現重大未實現非現金收益，這種情況在2023 年沒有再次發生。截至2023 年9 月30 日，營運資金較2022 年12 月31 日增加了540 萬美元，即117%，部分原因是今年稍早的融資、透過法律和解籌集的現金，當然還有公司加強的現金管理。

With this, we conclude our prepared remarks. Happy to answer any questions or comments participants may have. Operator, can you open the lines, please?

至此，我們結束了準備好的發言。很樂意回答參與者可能提出的任何問題或意見。接線員，您能開通線路嗎？

(Operator Instructions) Mike Albanese, EF Hutton.

（操作員說明）Mike Albanese，EF Hutton。

Hey, guys. How you doing?

大家好。你好嗎？

Okay.

好的。

Good. Thanks for taking my questions here. Just a couple of quick ones. First, regarding the nice growth here, attributable to both organic and then the acquisition. Can you dissect that a little bit further and maybe just provide some insight into how much of that is organic versus how much is actually due to the acquisition?

好的。感謝您在這裡提出我的問題。只是幾個快速的。首先，關於這裡的良好成長，歸因於有機成長和收購。您能否進一步剖析這一點，也許只是提供一些見解，了解其中有多少是有機的，有多少實際上是由於收購造成的？

(multiple speakers)

（多個發言者）

Sure. So organic, I'd say the Q3 numbers, so three months ended, that's all organic growth, right? I think it was 16% growth. And then we have 19% for the nine months, that would be partially organic and due to the acquisition. If we want to get more precise, we have to take it a little further, but certainly for the three months ended, that's all organic because we did have Barra throughout both periods, both 2022 and 2023. So any growth in these numbers would be organic growth.

當然。所以有機成長，我想說的是第三季的數據，所以三個月結束了，這都是有機成長，對吧？我認為增長了 16%。然後我們在這九個月裡有 19%，這將部分是有機的並且由於收購。如果我們想要更精確，我們必須更進一步，但肯定是在結束的三個月中，這都是有機的，因為我們在2022 年和2023 年這兩個時期都確實有巴拉。因此，這些數字的任何增長都將是有機增長。

Got it. That's super helpful. Okay. So 16% is organic and obviously the acquisition has held through that whole period. So that makes sense. And then just regarding expense management, any cost-cutting you've done? I mean, how much room is left for you to continue to do that, rightsize your G&A, and your cost structure? Is there more on the table we can pull things in a little bit tighter? Or how are you thinking about that?

知道了。這非常有幫助。好的。所以 16% 是有機的，顯然這次收購在整個時期都有效。所以這是有道理的。然後就費用管理而言，您進行過任何成本削減嗎？我的意思是，您還有多少空間可以繼續這樣做，調整您的一般管理費用和成本結構？我們還有更多可以讓事情變得更緊的事情嗎？還是你怎麼想的？

Yeah. Certainly, there is more room for areas where we can trim down our costs. We continue to enhance our one-term vision. I'm sure you've seen some of the messaging around that, and there's more to come also in the future. So that really consolidates our entities and streamlines our operations. And as we move the needle forward, and we bring together our carrier contracts, and then start operating at a streamlined, cohesive one firm company where we cross-sell cross-use talent across our geographical locations, I think we'll see additional cost efficiencies come through.

是的。當然，我們還有更多空間可以削減成本。我們繼續增強我們的短期願景。我相信您已經看到了一些與此相關的訊息，並且將來會有更多消息。這確實鞏固了我們的實體並簡化了我們的營運。隨著我們向前推進，我們將我們的運營商合約整合在一起，然後開始在一家精簡、有凝聚力的公司中運營，我們在我們的地理位置上交叉銷售交叉使用的人才，我認為我們會看到額外的成本效率得以實現。

(multiple speakers)

（多個發言者）

And by the way, I'll just add to that. Joel, that was excellent, but it's from both ends. As we do this, you could see both ends revenue going up because of getting better commissions and more cross-selling, which is very significant and cutting expenses. So it's really both pulling both ends in the right direction.

順便說一句，我將對此進行補充。喬爾，這很棒，但這是從兩端開始的。當我們這樣做時，您可以看到兩端的收入都在增加，因為獲得了更好的佣金和更多的交叉銷售，這非常重要並且可以削減開支。所以它實際上是將兩端拉向正確的方向。

Got it. Yes. So you've been trimming expenses. You can trim a little bit further while at the same time, you're gaining operating leverage.

知道了。是的。所以你一直在削減開支。您可以進一步削減一點，同時獲得營運槓桿。

Right. Exactly.

正確的。確切地。

Sure. Okay. Great. All right. That's really it on my end. Nice quarter, guys, continuing to march towards profitability from a cash flow standpoint. So congrats on the quarter there.

當然。好的。偉大的。好的。我的情況確實如此。夥計們，這個季度不錯，從現金流的角度來看，我們繼續朝著獲利邁進。所以恭喜這個季度。

Thank you very much.

非常感謝。

Thanks, Mike.

謝謝，麥克。

(Operator Instructions) [Nick Pincus], Forest Capital.

（操作員說明）[Nick Pincus]，森林之都。

Hey, guys. Congratulations. Again, another strong quarter. So you've been successful in the acquisition strategy and now that you've digested Barra, are you looking at additional acquisitions? And if so, what are the criteria that you look at when you're evaluating those acquisitions?

大家好。恭喜。又是一個強勁的季度。那麼，您的收購策略已經取得了成功，現在您已經消化了 Barra，您是否正在考慮進行更多收購？如果是這樣，您在評估這些收購時會考慮哪些標準？

Okay. Thanks. I'll handle that. Yes. First of all, the answer is a resounding yes. Absolutely, we're looking for acquisitions. In fact, we're actively evaluating opportunities that could be very interesting, really very interesting. And that is a way to grow. But we do look at my experience in the private world 30 years in business, we know and we see a good management team in place, and we don't like to reinvent the wheel and if it ain't broke, don't fix it.

好的。謝謝。我會處理的。是的。首先，答案是肯定的。當然，我們正在尋找收購。事實上，我們正​​在積極評估可能非常有趣、真的非常有趣的機會。這是一種成長的方式。但我們確實看看我在私人領域 30 年的商業經驗，我們知道並且我們看到了一個優秀的管理團隊，我們不喜歡重新發明輪子，如果它沒有壞，就不要修理它。

But we come in with -- use cost efficiencies and everything else, but without killing the business, but if it makes sense to the business, and it's not a crazy multiple, we are definitely and we do -- we have a reputation of coming to the table. That's extremely important to the brokers and the sellers when we say we're going to do it, buy a deal, if it makes sense, we buy it. So not just tire kickers. So the answer to your question, definitely, yes. And that's one of the things I'm very involved in and very much so.

但我們進來時——利用成本效率和其他一切，但不會扼殺業務，但如果這對業務有意義，而且不是一個瘋狂的倍數，我們絕對是，而且我們確實這樣做——我們有來的聲譽到桌子上。當我們說我們要這麼做、購買一筆交易時，這對經紀人和賣家來說非常重要，如果有意義，我們就會購買。所以不只是輪胎踢腳器。所以你的問題的答案肯定是肯定的。這是我非常參與的事情之一。

Great. Thank you.

偉大的。謝謝。

Thank you.

謝謝。

Thank you. And there were no other questions. At this time, I'd like to hand the call back over to the management team for closing remarks.

謝謝。沒有其他問題了。此時，我想將電話轉回給管理團隊進行總結發言。

Thank you very much. On behalf of Ezra and the entire Reliance team, we appreciate your participation in this business update and we're truly excited about the prospects of the company. Thanks again for joining us in our journey. Until next time. All the best.

非常感謝。我們謹代表 Ezra 和整個 Reliance 團隊，感謝您參與本次業務更新，我們對公司的前景感到由衷的興奮。再次感謝您加入我們的旅程。直到下一次。一切順利。

Thank you. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.

謝謝。今天的會議到此結束。此時您可以斷開線路。感謝您的參與。