Focus Financial Partners Inc.

CIK:0001651052|SEC Filings

Unaudited condensed consolidated statements of operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
REVENUES:
Total revenues	$ 583,805	$ 539,211	$ 1,141,312	$ 1,075,778
OPERATING EXPENSES:
Compensation and related expenses	208,532	178,131	414,948	359,931
Management fees	139,035	136,802	263,629	274,641
Selling, general and administrative	114,991	94,771	227,807	183,421
Intangible amortization	74,623	64,649	146,409	124,925
Non-cash changes in fair value of estimated contingent consideration	6,076	(42,757)	22,564	(51,742)
Depreciation and other amortization	4,053	3,805	8,020	7,438
Total operating expenses	547,310	435,401	1,083,377	898,614
INCOME FROM OPERATIONS	36,495	103,810	57,935	177,164
OTHER INCOME (EXPENSE):
Interest income	639	17	1,103	20
Interest expense	(48,341)	(19,892)	(92,270)	(37,508)
Amortization of debt financing costs	(1,115)	(949)	(2,220)	(2,050)
Other expense-net	(229)	(1,451)	(2,954)	(1,487)
Income from equity method investments	354	11	529	106
Total other expense-net	(48,692)	(22,264)	(95,812)	(40,919)
INCOME (LOSS) BEFORE INCOME TAX	(12,197)	81,546	(37,877)	136,245
INCOME TAX EXPENSE (BENEFIT)	(41,279)	32,228	(59,982)	47,845
NET INCOME	29,082	49,318	22,105	88,400
Non-controlling interest	3,095	(16,235)	9,440	(26,215)
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	32,177	33,083	31,545	62,185
Wealth management fees
REVENUES:
Total revenues	555,574	517,421	1,089,463	1,032,600
Other
REVENUES:
Total revenues	$ 28,231	$ 21,790	$ 51,849	$ 43,178
Class A common stock
Income (loss) per share of Class A common stock:
Basic (in dollars per share)	$ 0.49	$ 0.51	$ 0.48	$ 0.95
Diluted (in dollars per share)	$ (0.10)	$ 0.50	$ (0.32)	$ 0.95
Weighted average shares of Class A common stock outstanding:
Basic (in shares)	65,999,323	65,389,642	65,969,827	65,360,667
Diluted (in shares)	85,668,061	65,596,377	85,144,280	65,682,081

Unaudited condensed consolidated statements of cash flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 22,105	$ 88,400
Adjustments to reconcile net income to net cash provided by operating activities-net of effect of acquisitions:
Intangible amortization	146,409	124,925
Depreciation and other amortization	8,020	7,438
Amortization of debt financing costs	2,220	2,050
Non-cash equity compensation expense	15,599	14,210
Non-cash changes in fair value of estimated contingent consideration	22,564	(51,742)
Income from equity method investments	(529)	(106)
Distributions received from equity method investments	681	776
Deferred taxes and other non-cash items	(7,249)	29,576
Changes in cash resulting from changes in operating assets and liabilities:
Accounts receivable	(16,985)	(9,398)
Prepaid expenses and other assets	(60,847)	(9,776)
Accounts payable	818	4,778
Accrued expenses	17,551	21,446
Due to affiliates	(30,000)	(51,962)
Contingent consideration and other liabilities	(11,420)	(40,201)
Deferred revenue	(2,116)	(1,122)
Net cash used in operating activities	106,821	129,292
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisitions and contingent consideration-net of cash acquired	(140,265)	(252,056)
Purchase of fixed assets	(9,468)	(6,429)
Investment and other	(500)	(5,232)
Net cash used in investing activities	(150,233)	(263,717)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under credit facilities	98,500	100,000
Repayments of borrowings under credit facilities	(13,152)	(12,348)
Payments in connection with tax receivable agreements	(9,598)	(3,856)
Contingent consideration paid	(22,186)	(21,397)
Payments of deferred cash consideration	(12,505)
Payments of debt financing costs		(1,111)
Proceeds from exercise of stock options	3,067	422
Equity awards withholding	(704)
Distributions for unitholders	(3,172)	(15,956)
Other		375
Net cash provided by financing activities	40,250	46,129
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS	229	(1,339)
CHANGE IN CASH AND CASH EQUIVALENTS	(2,933)	(89,635)
CASH AND CASH EQUIVALENTS:
Beginning of period	139,973	310,684
End of period	$ 137,040	$ 221,049

Unaudited condensed consolidated balance sheets - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
ASSETS
Cash and cash equivalents	$ 137,040	$ 139,973
Accounts receivable less allowances of $3,862 at 2022 and $4,349 at 2023	236,790	217,219
Prepaid expenses and other assets	206,983	151,356
Fixed assets-net	56,796	54,748
Operating lease assets	269,592	258,697
Debt financing costs-net	6,818	7,590
Deferred tax assets-net	238,677	230,130
Goodwill	2,310,675	2,167,917
Other intangible assets-net	1,757,799	1,639,124
TOTAL ASSETS	5,221,170	4,866,754
LIABILITIES
Accounts payable	13,605	12,213
Accrued expenses	97,443	80,679
Deferred revenue	9,826	10,726
Contingent consideration and other liabilities	523,568	335,033
Deferred tax liabilities	46,587	29,579
Operating lease liabilities	302,861	288,895
Borrowings under credit facilities (stated value of $2,563,970 and $2,650,818 at December 31, 2022 and June 30, 2023, respectively)	2,600,437	2,510,749
Tax receivable agreements obligations	215,013	224,611
TOTAL LIABILITIES	3,850,339	3,563,459
COMMITMENTS AND CONTINGENCIES (Note 12)
EQUITY
Additional paid-in capital	913,612	918,044
Retained earnings	148,324	116,779
Accumulated other comprehensive income	18,606	18,318
Total shareholders' equity	1,081,327	1,053,918
Non-controlling interest	289,504	249,377
Total equity	1,370,831	1,303,295
TOTAL LIABILITIES AND EQUITY	5,221,170	4,866,754
Related Party
LIABILITIES
Due to affiliates	40,999	70,974
Class A common stock
EQUITY
Common stock	660	659
Class B common stock
EQUITY
Common stock	$ 125	$ 118