Binah Capital Group, Inc.(BCG) - 2023 Q4 - Annual Report

Financial Performance - For the year ended December 31, 2023, the company reported a net income of approximately $571,000 and total revenue of approximately$168.0 million, a decrease from net income of $910,331 and total revenue of approximately$178.0 million for 2022[162]. - Gross profit for the year ended December 31, 2023, was $31.8 million, a decrease of 4$33.2 million in 2022[164]. - EBITDA for the year ended December 31, 2023, was $6.8 million, an increase from$6.3 million in 2022[168]. - Total expenses for the year ended December 31, 2023, were $167.5 million, down 5.6$177.4 million in 2022[176]. - Commission revenues decreased by 7.4% to $138.2 million in 2023 from$149.3 million in 2022[175]. - Advisory fees also declined by 6.2% to $21.7 million in 2023 from$23.1 million in 2022[175]. - Total commission revenue for the year ended December 31, 2023, was $159.9 million, down from$172.4 million in 2022, representing a decrease of $12.5 million or 7.3$23.9 billion at December 31, 2023, up from $22.2 billion at December 31, 2022[163]. - The company experienced net new assets of$(3.6) billion for the year ended December 31, 2023, compared to $1.6 billion for the same period in 2022[169]. - The company maintained brokerage assets of$21.8 billion at December 31, 2023, an increase of 8% from $20.1 billion at December 31, 2022[169]. - Brokerage assets increased to$21.8 billion as of December 31, 2023, from $20.1 billion at the beginning of the period, with a net new brokerage asset decrease of$3.1 million[183]. - Advisory assets decreased to $2.087 billion as of December 31, 2023, from$2.129 billion in 2022, reflecting a decrease of approximately 2% due to net outflows[186]. Economic Context - The U.S. economy grew by 2.5% in 2023, with an unemployment rate averaging 3.7% in the fourth quarter[173]. Financial Obligations and Debt - As of December 31, 2023, the outstanding balance of the Oak Street note was $17.6 million, down from$19.5 million in 2022[204]. - The Company had $20.82 million outstanding under its Senior Credit Facility as of December 31, 2023[204]. - Total contractual obligations as of December 31, 2023, amounted to$45.3 million, including long-term debt obligations of $21.5 million and interest payments of$7.2 million[215]. - As of December 31, 2023, $20.8 million of outstanding debt was subject to floating interest rate risk, but short-term interest rate changes are not expected to materially impact net income[229]. Tax and Interest - The effective income tax rate decreased to (17.49)$1.8 million for the year ended December 31, 2023, due to an increase in the interest rate of the credit facility[198]. Cash Flow - Net cash provided by operating activities decreased by 52% to $2.5 million in 2023 from$5.3 million in 2022[212]. - Net cash used in investing activities decreased to $0.08 million in 2023 from$0.33 million in 2022, primarily due to reduced purchases of property and equipment[213]. - Net cash used in financing activities decreased to $2.7 million in 2023 from$4.5 million in 2022, mainly due to a reduction in capital distributions[214]. Employee Compensation - Employee compensation and benefits decreased by $0.8 million for the year ended December 31, 2023, due to a headcount reduction of approximately 6%[194]. - The payout rate for financial advisors increased to 77.96% for the year ended December 31, 2023, compared to 75.48% in 2022, an increase of 2.49%[193]. Risk Management - The company has a credit risk exposure primarily from receivables and cash equivalents, with an established allowance for uncollectible accounts to mitigate this risk[230]. - The estimated fair value of reporting units was 257% greater than their carrying value in 2023, indicating no impairment was necessary[221].