Ryan McKeveny : Hey. Good morning. Thank you for all the detail. Wanted to dig in, I think, with Nick on the US agent count side. So it sounds like some good traction on the initiatives that you discussed, but on an overall basis obviously, the US agent count is still kind of ticking lower. So I guess wanted to see if you could shed any light on kind of where the attrition is happening. Any sense of just, is it competitive dynamics of agents moving to other brokerages? Is it things like retirements? Is it, you know, the macro dynamic of just you know, volume is so low that some are choosing to leave the industry. And I guess similarly, just in terms of the tenure of agents, is there any distinction between attrition between, let’s say agents who have been with you or in the industry quite a long time versus those who might be might be newer to the business?
Stephen Joyce : Nick?
Nick Bailey: No, sorry, Steve. Go ahead.
Stephen Joyce : No. Go ahead please.
Nick Bailey: Yeah. I love your question, Ryan, because you answered it exactly how I would have it. It’s really a combination of all those things that you mentioned. We wish we could point and say it’s one thing. If it was just competitive threat or if it was just retirement, or if it was just new agents. There might be a singular response to each and every one of those, but it is definitely a combination of all of the above. We do have recruiting that happens between all of our companies. There’s not one singular organization or competitor. We’re all aggressive recruiters in this business and that’s just part of it. But the other part of it, I think that goes to your main question is where is the attrition coming from? We see some on the retirement.
We see some that needed one more good market that maybe would have retired 10 years ago and stayed in the business a little longer than they would have. I think we’ve seen that in the average age. And also there were a lot of new licensees that came into the business in the last few years. And some of them were team members and when there’s contraction, just not the volume out there to support as many agents, what we find is that’s where we’re unique. We’re not all things to all people. And our very top producers, even though we lose one here and there, are generally, excuse me, our most loyal and, the base that is the foundation of our organization. And so I think as we see the overall number of agents in the industry reduce, we’re just not immune to it.
What we are trying to do though is look at what are the other growth initiatives like we mentioned with teams, with CMNA, with some of our recruiting initiatives that do take time, but they are showing some very positive momentum. And that’s what we’re going to continue on try to counteract any level of attrition of the overall industry.
Ryan McKeveny : Got it. Thanks, Nick. That’s helpful. And one for Karri, on the reduction in force, I might have missed this. Did you say what we should expect in terms of cost savings going forward either per quarter annually, or are you able to frame that for us?
Karri Callahan: Sure. So we did say in the scripted remarks that, if we look ahead kind of the annual cash savings from that is around $6.5 million, I Think keep in mind as we go ahead, obviously into 2024, we’ll have a lot more to say on the 2024 outlook in February. But we’re also managing other inflationary pressures on the business as well. And so just kind of keep that in mind as we head into next year.
Ryan McKeveny : Okay, perfect. Thank you.
Operator: Your next question comes from the line of Stephen Sheldon from William Blair. Please go ahead.
Stephen Sheldon: Hey. Good morning. Thanks. First on the dividend seems to make sense to suspend it in the current environment with the recent settlement. But what would you and the board want to see in order to think about reinstating that down the road?
Nick Bailey: That’s a good question because we obviously talked a lot about that. So look, our number one measurement for our performance is total shareholder return. So that is means that our top priority is return to capital to shareholders. And obviously this is not contributing to that. And so that is our top priority. The most urgent thing for us is to get our settlement approved so that we don’t face all of the things that others are going to face going forward. And so once we do that and once we see the relative conditions in the marketplace around all these risks settling, you should see us then returning to looking at reinstating the dividend and looking at other ways to return capital including share repurchase. We have just been on sort of the cautious side recently because of the potential threats, which turned out to be pretty [frail] (ph).
And so we’re happy that we’ve been careful with our cash and that we have the money to make the settlement, and we want to get through that piece of it. And then you’ll see us immediately turn to looking at how and when and what is the best way to return capital.
Stephen Sheldon: Got it. Thanks. And then just as we as we start to think about 2024 adjusted EBITDA, I know there’s still a lot of moving pieces on the top line. Just on some of the expense items, can you help us think through things like legal expenses, which seem like they may have been elevated this year? In any rough impact on the cost saving initiatives, although I think you noted some inflationary pressures in response to the last question. Just anything to call out as we think about bridging 2023 EBITDA guidance to what it could potentially look like in 2024?
Stephen Joyce: Karri?
Karri Callahan: Yeah. Thanks, Steven. Good question. You know, you’re right. I mentioned a little bit before, kind of where — what the impacts were from the reduction in force and some inflationary pressures. From a legal expense perspective might see that ticked down a little bit. There’s obviously some other litigation that’s ongoing. And we’ve just got to make sure that we’re calibrated appropriately. One other thing I’d mention is we think ahead to 2024 and I noted it with regards to some of the top line variability this year is in our other income. So our other revenue, sorry, obviously, the shift in the technology strategy that we announced last year had seen some run off of some of those legacy businesses, which we don’t expect to really be meaningfully contributing to the top line next year.
So, booj and first and, continue kind of run off of the Gadberry business. So do expect some attrition on the top line from that perspective as we head into next year. As you noted, there’s a lot of uncertainty still. But we’re not expecting significant deviation probably outside of kind of where we’re looking at ending 2023 as we go into next year. But we’ll have more to say in February.
Stephen Sheldon: Alright. Thank you.
Operator: Your next question comes from the line of Matthew Erdner from JonesTrading. Please go ahead.
