Item 5. Market for Registrant’s Common Equity
Item 5. Market for registrant’s common equity, related stockholder matters and issuer purchases of equity securities
Market Information
Our Class A Common Stock is traded on NASDAQ under the symbol “GSHD.”
Our Class B Common Stock is not listed nor traded on any stock exchange.
Holders of Record
As of February 26, 2021, there were 9 shareholders of record of our Class A common stock. The number of record holders does not include persons who held shares of our Class A common stock in nominee or "street name" accounts through brokers. As of February 26, 2021, there were 49 shareholders of record of our Class B common stock.
Dividend Policy
Subject to funds being legally available, we intend to cause Goosehead Financial, LLC to make pro rata distributions to the Pre-IPO LLC Members and us in an amount at least sufficient to allow us and the Pre-IPO LLC Members to pay all applicable taxes, to make payments under the tax receivable agreement we entered into with the Pre-IPO LLC Members and to pay our corporate and other overhead expenses. The declaration and payment of any dividends by Goosehead Insurance, Inc. will be at the sole discretion of our board of directors, which may change our dividend policy at any time. Our board of directors will take into account:
• general economic and business conditions;
• our financial condition and operating results;
• our available cash and current and anticipated cash needs;
• our capital requirements;
• contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries (including Goosehead Financial, LLC) to us; and
• such other factors as our board of directors may deem relevant.
Goosehead Insurance, Inc. is a holding company and does not have material assets other than its ownership of LLC Units in Goosehead Financial, LLC, and as a consequence, our ability to declare and pay dividends to the holders of our Class A common stock is subject to the ability of Goosehead Financial, LLC to provide distributions to us. If Goosehead Financial, LLC makes such distributions, the Pre-IPO LLC Members will be entitled to receive equivalent distributions from Goosehead Financial, LLC. However, because we must pay taxes, make payments under the tax receivable agreement and pay our expenses, amounts ultimately distributed as dividends to holders of our Class A common stock are expected to be less than the amounts distributed by Goosehead Financial, LLC to the Pre-IPO LLC Members on a per share basis. See "Item 13. Certain relationships and related transactions, and director independence."
Assuming Goosehead Financial, LLC makes distributions to its members in any given year, the determination to pay dividends, if any, to our Class A common stockholders out of the portion, if any, of such distributions remaining after our payment of taxes, tax receivable agreement payments and expenses (any such portion, an “excess distribution”) will be made by our board of directors. Because our board of directors may determine to pay or not pay dividends to our Class A common stockholders, our Class A common stockholders may not necessarily receive dividend distributions relating to excess distributions, even if Goosehead Financial, LLC makes such distributions to us.
41
Stock Performance Graph
The following graph and table illustrate the total return from May 1, 2018 through December 31, 2020 for (i) our Class A common stock, (ii) the Standard and Poor's 500 Index, and (iii) the Russell 2000 Index, assuming an investment of $100 on May 1, 2018 including the reinvestment of dividends.
5/1/2018 12/31/2018 12/31/2019 12/31/2020
GSHD $ 100 $ 178 $ 291 $ 865
S&P 500 100 96 126 149
Russell 2000 100 88 111 133
Securities Authorized for Issuance Under Equity Incentive Plans
The following table provides information about our compensation plans under which our Class A Common Stock is authorized for issuance, as of December 31, 2020:
Number of securities to be issued upon exercise of outstanding options (in thousands) 2,290
Weighted-average exercise price of outstanding options 24.63
Number of securities remaining available for future issuances under equity compensation plans (in thousands) 1,260
Number of securities issued in connection with the Employee Stock Purchase Plan 21
Number of securities remaining available for future issuance in connection with the Employee Stock Purchase Plan 19
Issuer Purchases of Equity Securities
None.
Use of Proceeds
42
Not applicable.
Item 6. Selected financial data
The following table sets forth our selected historical consolidated financial data for the periods ended and as of the dates indicated below. We have derived the selected historical consolidated financial data as of December 31, 2020 and 2019, and for each of the twelve months ended December 31, 2020, 2019 and 2018 from our audited consolidated financial statements included elsewhere in this report. We have derived the selected historical consolidated financial data as of December 31, 2018, 2017, and 2016 and for the twelve months ended December 31, 2017 and 2016, from our audited consolidated financial statements, which are not included in this report.
The Company adopted ASC 842, Leases (‘ASC 842’) and ASC 606, Revenue from Contracts with Customers (‘ASC 606’) in 2020 and 2019, respectively. Financial information presented for years prior to the respective adoptions has not been adjusted in accordance with the provisions of those new standards.
Our historical results are not necessarily indicative of the results expected for any future period. You should read the following financial data together with Part I, Item 1A, “Risk Factors,” Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our audited consolidated financial statements and related notes appearing elsewhere in this report, and our audited consolidated financial statements and related notes included in our annual reports on Form 10-K for the years ended December 31, 2019 and December 31, 2018 previously filed with the SEC.
43
Years ended December 31,
2020
(ASC 606) 2019
(ASC 606) 2018
(ASC 605) 2017
(ASC 605) 2016
(ASC 605)
Selected statements of operations data (in thousands):
Commissions and agency fees (1)
71,811 46,366 36,704 27,030 21,283
Franchise revenues (1)
44,390 30,503 23,022 15,438 10,101
Employee compensation and benefits (1)
66,819 41,715 58,256 24,544 19,469
General and administrative expenses 25,532 19,042 13,060 8,597 5,732
Income (loss) from operations (1)
19,940 14,073 (13,930) 7,611 5,136
Net income (loss) (1)
18,755 10,382 (18,667) 8,678 4,723
Net income (loss) attributable to Goosehead Insurance, Inc. (1)
9,287 3,567 (8,903) — —
Per share data:
Earnings per share - basic (1)(2)
0.55 0.24 (0.66) n/a n/a
Earnings per share - diluted (1)(2)
0.51 0.22 (0.66) n/a n/a
Selected balance sheets data (at period end, in thousands):
Cash and restricted cash 26,236 15,260 19,011 4,948 3,778
Total current assets (1)
50,645 26,733 22,839 7,719 6,098
Total assets (1)
185,837 64,628 34,798 16,706 8,695
Total current liabilities (1)
20,360 13,410 7,812 5,767 3,476
Total debt 82,908 46,161 48,447 48,656 29,373
Total liabilities (1)
224,241 95,635 60,001 57,839 32,935
Total equity (1)
(38,404) (31,007) (25,203) (41,133) (24,240)
Selected cash flow data (in thousands):
Net cash provided by operating activities 24,643 21,241 10,275 13,542 4,402
Net cash used for investing activities (10,333) (4,078) (2,222) (6,135) (696)
Net cash (used for) provided by financing activities (3,334) (20,914) 5,592 (6,237) (965)
Selected operating data:
Adjusted EBITDA (in thousands) (1)(3)
27,832 17,530 14,752 10,718 8,112
Adjusted EBITDA margin (1)(3)
24 % 23 % 25 % 25 % 26 %
Total Written Premium (in thousands) 1,074,076 739,009 509,012 342,330 240,994
Corporate sales agents (at period end) 364 248 167 111 69
Operating franchises (at period end) 891 614 457 292 190
(1)The impact from the adoption of ASC 606 may affect the comparability to 2018. See Form 10-K for the year ended December 31, 2019 for additional information regarding the impact.
44
(2) Adjusted EBITDA and Adjusted EBITDA margin are Non-GAAP Measures. See Item 7 "Management's discussion and analysis of financial condition and results of operation" for additional information and a reconciliation to the most directly comparable GAAP financial measure.
45
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.