Sign In  |  Register  |  About Santa Clara  |  Contact Us

Santa Clara, CA
September 01, 2020 1:39pm
7-Day Forecast | Traffic
  • Search Hotels in Santa Clara

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

MediaAlpha Announces Second Quarter 2023 Financial Results

  • Revenue of $85 million, down 18% year over year
  • Transaction Value of $126 million, down 31% year over year
    • Transaction Value from Property & Casualty down 46% year over year to $61 million
    • Transaction Value from Health up 10% year over year to $51 million

MediaAlpha, Inc. (NYSE: MAX), today announced its financial results for the second quarter ended June 30, 2023.

“Our second quarter results exceeded expectations, driven primarily by strength in our Health insurance vertical,” said MediaAlpha co-founder and CEO Steve Yi. “In our Property & Casualty (P&C) insurance vertical, customer acquisition spend remains at cyclically low levels as carriers are taking longer than expected to restore underwriting profitability, and we expect this to continue for the balance of the year. Our ability to operate profitability in the current market environment is a tribute to the efficiency of our business model and the agility of our team, which we believe will enable us to capture outsized growth as the auto insurance market recovers.”

Second Quarter 2023 Financial Results

  • Revenue of $84.8 million, a decrease of 18% year over year;
  • Transaction Value of $125.9 million, a decrease of 31% year over year;
  • Gross margin of 16.2%, compared with 15.0% in the second quarter of 2022;
  • Contribution Margin(1) of 19.5%, compared with 18.1% in the second quarter of 2022;
  • Net loss was $(20.0) million, compared with $(13.0) million in the second quarter of 2022; and
  • Adjusted EBITDA(1) was $3.6 million, compared with $4.5 million in the second quarter of 2022.

(1)A reconciliation of GAAP to Non-GAAP financial measures has been provided at the end of this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

Financial Outlook

Our guidance for the third quarter of 2023 reflects a continuation of low customer acquisition spend levels by P&C carriers as they prioritize profitability over growth. As a result, we expect third quarter Transaction Value in our P&C insurance vertical to decline year over year by 40% to 50%. In addition, we expect third quarter Transaction Value in our Health vertical to grow year over year at a rate similar to the second quarter.

For the third quarter of 2023, MediaAlpha currently expects the following:

  • Transaction Value between $95 million - $110 million, representing a 30% year-over-year decline at the midpoint of the guidance range;
  • Revenue between $65 million - $75 million, representing a 21% year-over-year decline at the midpoint of the guidance range;
  • Adjusted EBITDA between $1.5 million and $3.5 million, representing a 15% year-over-year increase at the midpoint of the guidance range. We are projecting our operating expenses, net of Adjusted EBITDA addbacks, to be approximately $1.5 million lower than Q2 2023 levels, driven primarily by a full quarter impact of the workforce reductions we implemented in May 2023 and continued expense discipline.

With respect to the Company’s projection of Adjusted EBITDA under “Financial Outlook,” MediaAlpha is not providing a reconciliation of Adjusted EBITDA to net income (loss) because the Company is unable to predict with reasonable certainty the reconciling items that may affect net income (loss) without unreasonable effort, including equity-based compensation, transaction expenses and income tax expense. These reconciling items are uncertain, depend on various factors and could significantly impact, either individually or in the aggregate, the corresponding GAAP measures for the applicable period.

For a detailed explanation of the Company’s non-GAAP measures, please refer to the appendix section of this press release.

Conference Call Information

MediaAlpha will host a Q&A conference call today to discuss the Company's second quarter 2023 results and its financial outlook for the third quarter of 2023 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). A live audio webcast of the call will be available on the MediaAlpha Investor Relations website at https://investors.mediaalpha.com. To register for the webcast, click here. Participants may also dial-in, toll-free, at (888) 330-2022 or (646) 960-0690, with passcode 3195092. An audio replay of the conference call will be available for two weeks following the call and available on the MediaAlpha Investor Relations website at https://investors.mediaalpha.com.

We have also posted to our investor relations website a letter to shareholders. We have used, and intend to continue to use, our investor relations website at https://investors.mediaalpha.com as a means of disclosing material nonpublic information and for complying with our disclosure obligations under Regulation FD.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation statements regarding our expectation that customer acquisition spend by carriers will remain at cyclically low levels for the balance of this year, our belief that we will capture outsized growth as the auto insurance market recovers, and our financial outlook for the third quarter of 2023. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would,” and “outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including those more fully described in MediaAlpha’s filings with the Securities and Exchange Commission (“SEC”), including the Form 10-K filed on February 27, 2023. These factors should not be construed as exhaustive. MediaAlpha disclaims any obligation to update any forward-looking statements to reflect events or circumstances that occur after the date of this press release.

Non-GAAP Financial Measures and Operating Metrics

This press release includes Adjusted EBITDA and Contribution Margin, which are non-GAAP financial measures. The Company also presents Transaction Value, which is an operating metric not presented in accordance with GAAP. See the appendix for definitions of Adjusted EBITDA, Contribution, Contribution Margin and Transaction Value, as well as reconciliations to the corresponding GAAP financial metrics, as applicable.

We present Transaction Value, Adjusted EBITDA and Contribution Margin because they are used extensively by our management and board of directors to manage our operating performance, including evaluating our operational performance against budget and assessing our overall operating efficiency and operating leverage. Accordingly, we believe that Transaction Value, Adjusted EBITDA and Contribution Margin provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team and board of directors. Each of Transaction Value, Adjusted EBITDA and Contribution Margin has limitations as a financial measure and investors should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.

 

MediaAlpha, Inc. and subsidiaries

Consolidated Balance Sheets

(Unaudited; in thousands, except share data and per share amounts)

 

 

June 30,

2023

 

December 31,

2022

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

20,029

 

 

$

14,542

 

Accounts receivable, net of allowance for credit losses of $325 and $575, respectively

 

32,589

 

 

 

59,998

 

Prepaid expenses and other current assets

 

3,484

 

 

 

5,880

 

Total current assets

 

56,102

 

 

 

80,420

 

Intangible assets, net

 

29,474

 

 

 

32,932

 

Goodwill

 

47,739

 

 

 

47,739

 

Other assets

 

6,885

 

 

 

8,990

 

Total assets

$

140,200

 

 

$

170,081

 

Liabilities and stockholders' deficit

 

 

 

Current liabilities

 

 

 

Accounts payable

$

37,815

 

 

$

53,992

 

Accrued expenses

 

13,241

 

 

 

14,130

 

Current portion of long-term debt

 

8,787

 

 

 

8,770

 

Total current liabilities

 

59,843

 

 

 

76,892

 

Long-term debt, net of current portion

 

169,899

 

 

 

174,300

 

Other long-term liabilities

 

4,852

 

 

 

4,973

 

Total liabilities

$

234,594

 

 

$

256,165

 

Commitments and contingencies (Note 7)

 

 

 

Stockholders' (deficit):

 

 

 

Class A common stock, $0.01 par value - 1.0 billion shares authorized; 45.9 million and 43.7 million shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

 

459

 

 

 

437

 

Class B common stock, $0.01 par value - 100 million shares authorized; 18.1 million and 18.9 million shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

 

181

 

 

 

189

 

Preferred stock, $0.01 par value - 50 million shares authorized; 0 shares issued and outstanding as of June 30, 2023 and December 31, 2022

 

 

 

 

 

Additional paid-in capital

 

489,831

 

 

 

465,523

 

Accumulated deficit

 

(506,694

)

 

 

(482,142

)

Total stockholders' (deficit) attributable to MediaAlpha, Inc.

$

(16,223

)

 

$

(15,993

)

Non-controlling interests

 

(78,171

)

 

 

(70,091

)

Total stockholders' (deficit)

$

(94,394

)

 

$

(86,084

)

Total liabilities and stockholders' deficit

$

140,200

 

 

$

170,081

 

 

MediaAlpha, Inc. and subsidiaries

Consolidated Statements of Operations

(Unaudited; in thousands, except share data and per share amounts)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue

$

84,772

 

 

$

103,449

 

 

$

196,402

 

 

$

246,048

 

Costs and operating expenses

 

 

 

 

 

 

 

Cost of revenue

 

71,006

 

 

 

87,925

 

 

 

164,268

 

 

 

208,806

 

Sales and marketing

 

6,707

 

 

 

7,958

 

 

 

13,701

 

 

 

15,181

 

Product development

 

5,061

 

 

 

5,661

 

 

 

10,229

 

 

 

10,877

 

General and administrative

 

18,070

 

 

 

12,316

 

 

 

33,825

 

 

 

29,464

 

Total costs and operating expenses

 

100,844

 

 

 

113,860

 

 

 

222,023

 

 

 

264,328

 

(Loss) from operations

 

(16,072

)

 

 

(10,411

)

 

 

(25,621

)

 

 

(18,280

)

Other (income) expense, net

 

(116

)

 

 

44

 

 

 

1,265

 

 

 

(479

)

Interest expense

 

3,874

 

 

 

1,956

 

 

 

7,450

 

 

 

3,315

 

Total other expense, net

 

3,758

 

 

 

2,000

 

 

 

8,715

 

 

 

2,836

 

(Loss) before income taxes

 

(19,830

)

 

 

(12,411

)

 

 

(34,336

)

 

 

(21,116

)

Income tax expense

 

150

 

 

 

611

 

 

 

228

 

 

 

1,754

 

Net (loss)

$

(19,980

)

 

$

(13,022

)

 

$

(34,564

)

 

$

(22,870

)

Net (loss) attributable to non-controlling interest

 

(5,694

)

 

 

(3,883

)

 

 

(10,012

)

 

 

(6,655

)

Net (loss) attributable to MediaAlpha, Inc.

$

(14,286

)

 

$

(9,139

)

 

$

(24,552

)

 

$

(16,215

)

Net (loss) per share of Class A common stock

 

 

 

 

 

 

 

-Basic and diluted

$

(0.32

)

 

$

(0.22

)

 

$

(0.55

)

 

$

(0.39

)

Weighted average shares of Class A common stock outstanding

 

 

 

 

 

 

 

-Basic and diluted

 

45,160,646

 

 

 

41,705,344

 

 

 

44,518,890

 

 

 

41,279,146

 

 

MediaAlpha, Inc. and subsidiaries

Consolidated Statements of Cash Flows

(Unaudited; in thousands)

 

 

Six Months Ended

June 30,

 

 

2023

 

 

 

2022

 

Cash flows from operating activities

 

 

 

Net (loss)

$

(34,564

)

 

$

(22,870

)

Adjustments to reconcile net (loss) to net cash provided by operating activities:

 

 

 

Non-cash equity-based compensation expense

 

29,489

 

 

 

29,616

 

Non-cash lease expense

 

337

 

 

 

357

 

Depreciation expense on property and equipment

 

188

 

 

 

197

 

Amortization of intangible assets

 

3,458

 

 

 

2,360

 

Amortization of deferred debt issuance costs

 

398

 

 

 

418

 

Change in fair value of contingent consideration

 

 

 

 

(2,845

)

Impairment of cost method investment

 

1,406

 

 

 

 

Credit losses

 

(250

)

 

 

(127

)

Deferred taxes

 

 

 

 

1,630

 

Tax receivable agreement liability adjustments

 

6

 

 

 

(589

)

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

27,659

 

 

 

38,691

 

Prepaid expenses and other current assets

 

2,364

 

 

 

4,057

 

Other assets

 

250

 

 

 

198

 

Accounts payable

 

(16,177

)

 

 

(28,354

)

Accrued expenses

 

1,777

 

 

 

(2,629

)

Net cash provided by operating activities

$

16,341

 

 

$

20,110

 

Cash flows from investing activities

 

 

 

Purchases of property and equipment

 

(47

)

 

 

(79

)

Cash consideration paid in connection with CHT acquisition

 

 

 

 

(49,677

)

Net cash (used in) investing activities

$

(47

)

 

$

(49,756

)

Cash flows from financing activities

 

 

 

Proceeds received from:

 

 

 

Revolving credit facility

 

 

 

 

25,000

 

Payments made for:

 

 

 

Repayments on long-term debt

 

(4,750

)

 

 

(4,750

)

Repurchases of Class A common stock

 

 

 

 

(3,382

)

Distributions

 

(1,296

)

 

 

(590

)

Payments pursuant to tax receivable agreement

 

(2,822

)

 

 

(216

)

Shares withheld for taxes on vesting of restricted stock units

 

(1,939

)

 

 

(1,786

)

Net cash (used in) provided by financing activities

$

(10,807

)

 

$

14,276

 

Net increase (decrease) in cash and cash equivalents

 

5,487

 

 

 

(15,370

)

Cash and cash equivalents, beginning of period

 

14,542

 

 

 

50,564

 

Cash and cash equivalents, end of period

$

20,029

 

 

$

35,194

 

Key business and operating metrics and Non-GAAP financial measures

Transaction Value

We define “Transaction Value” as the total gross dollars transacted by our partners on our platform. Transaction Value is a driver of revenue, with differing revenue recognition based on the economic relationship we have with our partners. Our partners use our platform to transact via Open and Private Marketplace transactions. In our Open Marketplace model, Transaction Value is equal to revenue recognized and revenue share payments to our supply partners represent costs of revenue. In our Private Marketplace model, revenue recognized represents a platform fee billed to the demand partner or supply partner based on an agreed-upon percentage of the Transaction Value for the Consumer Referrals transacted, and accordingly there are no associated costs of revenue. We utilize Transaction Value to assess revenue and to assess the overall level of transaction activity through our platform. We believe it is useful to investors to assess the overall level of activity on our platform and to better understand the sources of our revenue across our different transaction models and verticals.

The following table presents Transaction Value by platform model for the three and six months ended June 30, 2023 and 2022:

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

(dollars in thousands)

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Open Marketplace transactions

 

$

82,856

 

 

$

99,633

 

 

$

190,515

 

 

$

237,729

 

Percentage of total Transaction Value

 

 

65.8

%

 

 

54.5

%

 

 

59.7

%

 

 

56.3

%

Private Marketplace transactions

 

 

43,055

 

 

 

83,237

 

 

 

128,561

 

 

 

184,154

 

Percentage of total Transaction Value

 

 

34.2

%

 

 

45.5

%

 

 

40.3

%

 

 

43.7

%

Total Transaction Value

 

$

125,911

 

 

$

182,870

 

 

$

319,076

 

 

$

421,883

 

The following table presents Transaction Value by vertical for the three and six months ended June 30, 2023 and 2022:

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

(dollars in thousands)

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Property & Casualty insurance

 

$

60,666

 

 

$

111,930

 

 

$

178,590

 

 

$

260,014

 

Percentage of total Transaction Value

 

 

48.2

%

 

 

61.2

%

 

 

56.0

%

 

 

61.6

%

Health insurance

 

 

50,828

 

 

 

46,394

 

 

 

110,240

 

 

 

106,649

 

Percentage of total Transaction Value

 

 

40.4

%

 

 

25.4

%

 

 

34.5

%

 

 

25.3

%

Life insurance

 

 

8,359

 

 

 

12,467

 

 

 

18,476

 

 

 

24,858

 

Percentage of total Transaction Value

 

 

6.6

%

 

 

6.8

%

 

 

5.8

%

 

 

5.9

%

Other(1)

 

 

6,058

 

 

 

12,079

 

 

 

11,770

 

 

 

30,362

 

Percentage of total Transaction Value

 

 

4.8

%

 

 

6.6

%

 

 

3.7

%

 

 

7.2

%

Total Transaction Value

 

$

125,911

 

 

$

182,870

 

 

$

319,076

 

 

$

421,883

 

(1) Our other verticals include Travel, Education and Consumer Finance.

Contribution and Contribution Margin

We define “Contribution” as revenue less revenue share payments and online advertising costs, or, as reported in our consolidated statements of operations, revenue less cost of revenue (i.e., gross profit), as adjusted to exclude the following items from cost of revenue: equity-based compensation; salaries, wages, and related costs; internet and hosting costs; amortization; depreciation; other services; and merchant-related fees. We define “Contribution Margin” as Contribution expressed as a percentage of revenue for the same period. Contribution and Contribution Margin are non-GAAP financial measures that we present to supplement the financial information we present on a GAAP basis. We use Contribution and Contribution Margin to measure the return on our relationships with our supply partners (excluding certain fixed costs), the financial return on and efficacy of our online advertising costs to drive consumers to our proprietary websites, and our operating leverage. We do not use Contribution and Contribution Margin as measures of overall profitability. We present Contribution and Contribution Margin because they are used by our management and board of directors to manage our operating performance, including evaluating our operational performance against budget and assessing our overall operating efficiency and operating leverage. For example, if Contribution increases and our headcount costs and other operating expenses remain steady, our Adjusted EBITDA and operating leverage increase. If Contribution Margin decreases, we may choose to re-evaluate and re-negotiate our revenue share agreements with our supply partners, to make optimization and pricing changes with respect to our bids for keywords from primary traffic acquisition sources, or to change our overall cost structure with respect to headcount, fixed costs and other costs. Other companies may calculate Contribution and Contribution Margin differently than we do. Contribution and Contribution Margin have their limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results presented in accordance with GAAP.

The following table reconciles Contribution with gross profit, the most directly comparable financial measure calculated and presented in accordance with GAAP, for the three and six months ended June 30, 2023 and 2022:

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

(in thousands)

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue

 

$

84,772

 

 

$

103,449

 

 

$

196,402

 

 

$

246,048

 

Less cost of revenue

 

 

(71,006

)

 

 

(87,925

)

 

 

(164,268

)

 

 

(208,806

)

Gross profit

 

 

13,766

 

 

 

15,524

 

 

 

32,134

 

 

 

37,242

 

Adjusted to exclude the following (as related to cost of revenue):

 

 

 

 

 

 

 

 

Equity-based compensation

 

 

981

 

 

 

1,240

 

 

 

1,947

 

 

 

1,638

 

Salaries, wages, and related

 

 

907

 

 

 

1,034

 

 

 

1,954

 

 

 

1,690

 

Internet and hosting

 

 

130

 

 

 

119

 

 

 

280

 

 

 

223

 

Other expenses

 

 

162

 

 

 

215

 

 

 

334

 

 

 

342

 

Depreciation

 

 

10

 

 

 

12

 

 

 

21

 

 

 

18

 

Other services

 

 

566

 

 

 

576

 

 

 

1,281

 

 

 

1,106

 

Merchant-related fees

 

 

7

 

 

 

44

 

 

 

3

 

 

 

59

 

Contribution

 

 

16,529

 

 

 

18,764

 

 

 

37,954

 

 

 

42,318

 

Gross margin

 

 

16.2

%

 

 

15.0

%

 

 

16.4

%

 

 

15.1

%

Contribution Margin

 

 

19.5

%

 

 

18.1

%

 

 

19.3

%

 

 

17.2

%

Adjusted EBITDA

We define “Adjusted EBITDA” as net income excluding interest expense, income tax benefit (expense), depreciation expense on property and equipment, amortization of intangible assets, as well as equity-based compensation expense and certain other adjustments as listed in the table below. Adjusted EBITDA is a non-GAAP financial measure that we present to supplement the financial information we present on a GAAP basis. We monitor and present Adjusted EBITDA because it is a key measure used by our management to understand and evaluate our operating performance, to establish budgets and to develop operational goals for managing our business. We believe that Adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in the calculations of Adjusted EBITDA. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects. In addition, presenting Adjusted EBITDA provides investors with a metric to evaluate the capital efficiency of our business.

Adjusted EBITDA is not presented in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures presented in accordance with GAAP. There are a number of limitations related to the use of Adjusted EBITDA rather than net income, which is the most directly comparable financial measure calculated and presented in accordance with GAAP. These limitations include the fact that Adjusted EBITDA excludes interest expense on debt, income tax benefit (expense), equity-based compensation expense, depreciation and amortization, and certain other adjustments that we consider useful information to investors and others in understanding and evaluating our operating results. In addition, other companies may use other measures to evaluate their performance, including different definitions of “Adjusted EBITDA,” which could reduce the usefulness of our Adjusted EBITDA as a tool for comparison.

The following table reconciles Adjusted EBITDA with net (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, for the three and six months ended June 30, 2023 and 2022:

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

(in thousands)

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net (loss)

 

$

(19,980

)

 

$

(13,022

)

 

$

(34,564

)

 

$

(22,870

)

Equity-based compensation expense

 

 

15,148

 

 

 

15,843

 

 

 

29,489

 

 

 

29,616

 

Interest expense

 

 

3,874

 

 

 

1,956

 

 

 

7,450

 

 

 

3,315

 

Income tax expense

 

 

150

 

 

 

611

 

 

 

228

 

 

 

1,754

 

Depreciation expense on property and equipment

 

 

92

 

 

 

99

 

 

 

188

 

 

 

197

 

Amortization of intangible assets

 

 

1,729

 

 

 

1,677

 

 

 

3,458

 

 

 

2,360

 

Transaction expenses(1)

 

 

254

 

 

 

150

 

 

 

548

 

 

 

530

 

SOX implementation costs(2)

 

 

 

 

 

 

 

 

 

 

 

110

 

Fair value adjustment to contingent consideration(3)

 

 

 

 

 

(2,845

)

 

 

 

 

 

(2,845

)

Impairment of cost method investment

 

 

 

 

 

 

 

 

1,406

 

 

 

 

Changes in TRA related liability(4)

 

 

 

 

 

40

 

 

 

6

 

 

 

(590

)

Changes in Tax Indemnification Receivable(5)

 

 

(14

)

 

 

(15

)

 

 

(28

)

 

 

(29

)

Settlement of federal and state income tax refunds(6)

 

 

 

 

 

4

 

 

 

3

 

 

 

92

 

Legal expenses(7)

 

 

1,106

 

 

 

 

 

 

1,439

 

 

 

 

Reduction in force costs (8)

 

 

1,233

 

 

 

 

 

$

1,233

 

 

$

 

Adjusted EBITDA

 

$

3,592

 

 

$

4,498

 

 

$

10,856

 

 

$

11,640

 

(1)

Transaction expenses consist of $0.3 million and $0.5 million of legal, and accounting fees incurred by us for the three and six months ended June 30, 2023, respectively, in connection with the amendment to the 2021 Credit Facilities, the tender offer filed by the Company's largest shareholder in May 2023, and a resale registration statement filed with the SEC. For the three and six months ended June 30, 2022, transaction expenses consist of $0.2 million and $0.5 million of expenses, respectively, incurred by us in connection with our acquisition of CHT.

(2)

SOX implementation costs consist of $0.1 million of expenses for the six months ended June 30, 2022 for third-party consultants to assist us with the development, implementation, and documentation of new and enhanced internal controls and processes for compliance with SOX Section 404(b) for fiscal 2021.

(3)

Fair value adjustment to contingent consideration consists of $2.8 million of gain for the three and six months ended June 30, 2022, in connection with the remeasurement of the contingent consideration for the acquisition of CHT as of June 30, 2022.

(4)

Changes in TRA related liability consist of immaterial expenses for the six months ended June 30, 2023, and immaterial expenses and $0.6 million of income for the three and six months ended June 30, 2022, respectively, due to a change in the estimated future state tax benefits and other changes in the estimate resulting in reductions of the TRA liability.

(5)

Changes in Tax Indemnification Receivable consists of immaterial income for the three and six months ended June 30, 2023 and 2022, related to a reduction in the tax indemnification receivable recorded in connection with the Reorganization Transactions. The reduction also resulted in a benefit of the same amount which has been recorded within income tax expense.

(6)

Settlement of federal and state tax refunds consist of immaterial expenses incurred by us for the six months ended June 30, 2023, and immaterial expenses and $0.1 million of expense incurred by us for the three and six months ended June 30, 2022, respectively, related to a payment to White Mountains for state tax refunds for the period prior to the Reorganization Transactions related to 2020 tax returns. The settlement also resulted in a benefit of the same amount which has been recorded within income tax expense.

(7)

Legal expenses of $1.1 million and $1.4 million for the three and six months ended June 30, 2023, respectively, consist of legal fees incurred in connection with a civil investigative demand received from the Federal Trade Commission (FTC) in February 2023.

(8)

Reduction in force costs for the three and six months ended June 30, 2023 consist of $1.2 million of severance benefits provided to the terminated employees in connection with the plan to reduce our workforce implemented in May 2023. Additionally, equity-based compensation expense includes $0.3 million of charges related to the plan for the three and six months ended June 30, 2023.

 

Contacts

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Copyright © 2010-2020 SantaClara.com & California Media Partners, LLC. All rights reserved.