Reliance Global Group, Inc. Q1 FY2024 earnings call

• Emphasized the OneFirm approach integrating 9 owned and operated agencies into a unified entity, expecting improvement in revenue and profitability.
• Announced acquisition of Spetner Associates, a benefits and enrollment company, which is expected to enhance market position, expand service offering, and accelerate growth. Spetner is projected to bring over $14 million in revenue and $4 million in EBITDA for 2024.
• Integration of Spetner's expertise and client base is expected to create synergies, especially in cross-selling personal lines of insurance through the RELI Exchange platform.
• Committed to evolving into a profitable, multibillion-dollar enterprise through operational efficiency, technological innovation, and strategic acquisitions.

Revenues: Commission income increased by $143,000 or 4% to $4.1 million in Q1 2024 compared to $3.9 million in Q1 2023, driven by sustained organic growth. Commission expense increased by $193,000 or 18% to $1.3 million in Q1 2024 from $1.1 million in Q1 2023. Salaries and wages increased slightly by $76,000 or 4%. General and administrative expenses increased to $1.4 million in Q1 2024 from $838,000 in 2023, driven by acquisition costs and higher regulatory compliance-related costs. Net loss was $5.3 million in Q1 2024 compared to $1.8 million in Q1 2023, primarily due to a $3.9 million intangible asset noncash impairment charge. Adjusted EBITDA was a nominal negative $74,000 for the quarter, with expectation of improvement throughout the fiscal year, especially post-Spetner acquisition.

• Expect EBITDA to further improve throughout the fiscal year, especially post-closing of the Spetner M&A transaction.
• Anticipate the Spetner acquisition to close in the third quarter, with about half of the projected $14 million revenue and $4 million EBITDA contributing in the fiscal year.
• The acquisition is expected to be turnkey initially, with opportunities for synergies and cross-selling to enhance results.

Forward-looking statements are subject to several risks, uncertainties, and assumptions as described in the company's Form 10-K filed with the SEC, and actual results could differ materially from those anticipated.

Q: Congrats on signing the definitive agreement to acquire Spetner. When do you expect the deal to close? And how much of the projected revenue and EBITDA will be contributed in the fiscal year?

A: The deal is expected to close in the third quarter. About half of the projected $14 million revenue and $4 million EBITDA is expected to be contributed in the fiscal year, with the acquisition already running on target.

Q: You mentioned your OneFirm vision is materializing. Can you provide additional context on the progress with the OneFirm vision?

A: Currently making headway in consolidating carrier contracts for property and casualty, Health, and life groups. Unifying agency management systems for P&C and Health/Group benefits to streamline administrative processes and enhance reporting. Pooling vendor contracts for volume discounts, rolling out best-in-class systems across offices, and redesigning teams aligned with revenue streams to spur cross-selling and improve employee satisfaction.