PR Newswire
DENVER, Aug. 3, 2017
DENVER, Aug. 3, 2017 /PRNewswire/ --
Second Quarter 2017 Highlights
(Compared to second quarter 2016 unless otherwise noted)
RE/MAX Holdings, Inc. (the "Company" or "RE/MAX Holdings") (NYSE: RMAX), parent company of RE/MAX, one of the world's leading franchisors of real estate brokerage services, and Motto Mortgage ("Motto"), an innovative mortgage brokerage franchise, today announced operating results for the quarter ended June 30, 2017.
"Execution on our core business drivers and a robust housing market drove increased agent count and double-digit revenue growth year-over-year," stated Adam Contos, Co-Chief Executive Officer. "Our ability to expand our network, reacquire independent regions, and grow Motto Mortgage provides us with multiple levers of growth."
Contos continued, "For the third year in a row, RE/MAX agents and teams named 'America's Best Real Estate Agents' outnumbered every other brand according to REAL Trends' rankings. One out of every five agents included in this year's survey is a member of our network. Our agents are incredibly dedicated to their clients and this ranking confirms that many of the industry's best are affiliated with RE/MAX."
Second Quarter 2017 Operating Results
Agent Count
The following table compares agent count as of June 30, 2017 and 2016:
| | | | | | | | ||||
| As of June 30, | | Change | | |||||||
| 2017 | | 2016 | | # | | % | | |||
U.S. | 63,249 | | 61,635 | | 1,614 | | 2.6% | | |||
Canada | 21,053 | | 20,336 | | 717 | | 3.5% | | |||
Subtotal | 84,302 | | 81,971 | | 2,331 | | 2.8% | | |||
Outside the U.S. & Canada | 31,968 | | 27,989 | | 3,979 | | 14.2% | | |||
Total | 116,270 | | 109,960 | | 6,310 | | 5.7% | | |||
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Revenue
RE/MAX Holdings generated total revenue of $48.8 million for the second quarter of 2017, an increase of $5.4 million or 12.5% compared to $43.4 million in the second quarter of 2016, primarily due to contributions from the acquired independent regions, agent count growth and fee increases in the Company-owned regions.
Recurring revenue streams, which consist of continuing franchise fees and annual dues, increased $3.7 million or 13.3% over the second quarter of 2016 and accounted for 64.7% of revenue in the second quarter of 2017 compared to 64.3% in the prior-year period.
Operating Expenses
Total operating expenses were $26.0 million for the second quarter of 2017, an increase of $3.3 million or 14.6% compared to the second quarter of 2016. This increase was due to additional amortization expense from the acquired independent regions as well as increased selling, operating and administrative expenses, many of which related to the acquired independent regions and the initial investment in Motto.
Selling, operating and administrative expenses were $20.6 million in the second quarter of 2017, an increase of $1.8 million or 9.5% from the second quarter of 2016 and represented 42.3% of revenue compared to 43.4% in the prior-year period. Expenses increased primarily due to continued investments in Motto and higher professional fees and other expenses, including costs related to the acquired independent regions and investments to support the Company's technology infrastructure.
Net Income and GAAP EPS
Net income attributable to RE/MAX Holdings was $7.5 million for the second quarter of 2017, an increase of $0.6 million or 8.2% from the second quarter of 2016. Net income grew primarily due to the contribution from acquired independent regions, agent count growth and fee increases in the Company-owned regions. The increase was partially offset by higher amortization expense and operating expenses, as well as a decrease in revenue from preferred marketing arrangements. Reported basic and diluted EPS attributable to RE/MAX Holdings were $0.43 and $0.42 per share, respectively, for the second quarter of 2017.
Adjusted EBITDA and Adjusted EPS
Adjusted EBITDA was $29.2 million for the second quarter of 2017, an increase of $3.9 million or 15.3% from the second quarter of 2016. Adjusted EBITDA grew primarily due to contributions from the acquired independent regions, agent count growth and fee increases in the Company-owned regions, partially offset by investments in Motto and a decrease in revenue from preferred marketing arrangements. Adjusted EBITDA margin was 59.7% in the second quarter of 2017 compared to 58.3% in the second quarter of 2016.
Adjusted basic and diluted EPS were both $0.54 for the second quarter of 2017. The ownership structure used to calculate Adjusted basic and diluted EPS for the quarter ended June 30, 2017 assumes RE/MAX Holdings owned 100% of RMCO, LLC ("RMCO"). The weighted average ownership RE/MAX Holdings had in RMCO was 58.5% for the three months ended June 30, 2017.
Balance Sheet
As of June 30, 2017, the Company had a cash balance of $70.3 million, an increase of $12.7 million from December 31, 2016. As of June 30, 2017, RE/MAX had $229.9 million of term loans outstanding, net of unamortized debt discount and issuance costs, essentially flat compared with $230.8 million as of December 31, 2016.
"We generated nearly $32 million in free cash flow during the first half of 2017, highlighting the growth and positive cash flow characteristics of our business model," said Karri Callahan, Chief Financial Officer. "Second quarter margins, while benefiting from the favorable timing of expenses, also showcased the inherent leverage in our 100%-franchised business. Certain investments initially planned for the second quarter are now anticipated to occur in the second half of the year and are reflected in our third-quarter and full-year 2017 Outlook."
Dividend
On August 2, 2017, the Company's Board of Directors approved a quarterly cash dividend of $0.18 per share. The quarterly dividend is payable on August 30, 2017, to shareholders of record at the close of business on August 16, 2017.
Outlook
The Company's third-quarter and full-year 2017 Outlook assumes no further currency movements, acquisitions or divestitures.
For the third quarter of 2017, RE/MAX Holdings expects:
For the full-year 2017, RE/MAX Holdings is increasing its agent count guidance, reiterating its full-year 2017 financial guidance and expects:
The effective U.S. GAAP tax rate attributable to RE/MAX Holdings is estimated to be between 23% and 25% in 2017.
Webcast and Conference Call
The Company will host a conference call for interested parties on Friday, August 4, 2017, beginning at 8:30 a.m. Eastern Time. Interested parties are able to access the conference call using the following dial-in numbers:
U.S. | 1-877-201-0168 |
Canada & International | 1-647-788-4901 |
Interested parties are also able to access a live webcast through the Investor Relations section of the Company's website at investors.remax.com. Please dial-in or join the webcast 10 minutes before the start of the conference call. An archive of the webcast will be available on the Company's website for a limited time as well. For the RE/MAX Quarterly Update Q2 2017 infographic, visit http://rem.ax/2cYFT50.
Basis of Presentation
Unless otherwise noted, the results presented in this press release are consolidated and exclude adjustments attributable to the non-controlling interest.
About the RE/MAX Network
RE/MAX was founded in 1973 by David and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. Over 115,000 agents provide RE/MAX a global reach of over 100 countries and territories. Nobody sells more real estate than RE/MAX as measured by total residential transaction sides.
RE/MAX, one of the world's leading franchisors of real estate brokerage services, and Motto Mortgage, an innovative mortgage brokerage franchise, are subsidiaries of RMCO, LLC, which is controlled and managed by RE/MAX Holdings, Inc. (NYSE: RMAX).
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "believe," "intend," "expect," "estimate," "plan," "outlook," "project" and other similar words and expressions that predict or indicate future events or trends that are not statements of historical matters. These forward-looking statements include statements regarding the Company's outlook for the third quarter and full fiscal year, including expectations regarding agent count, revenue, SO&A (Selling, operating and administrative) expenses, and Adjusted EBITDA margins for its third quarter of 2017 and full fiscal year; the Company's focus in 2017 and over the long term on successfully growing its strategic initiatives related to its acquisition of six independent regions and the launch of Motto Mortgage; as well as other statements regarding the Company's strategic and operational plans and business models. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Such risks and uncertainties include, without limitation, (1) changes in business and economic activity in general, (2) changes in the real estate market, including changes due to interest rates and availability of financing, (3) the Company's ability to attract and retain quality franchisees, (4) the Company's franchisees' ability to recruit and retain real estate agents and mortgage loan originators, (5) changes in laws and regulations that may affect the business or the real estate market, (6) failure to maintain, protect and enhance the RE/MAX and Motto Mortgage brands, (7) fluctuations in foreign currency exchange rates, as well as those risks and uncertainties described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") and similar disclosures in subsequent periodic and current reports filed with the SEC, which are available on the investor relations page of the Company's website at www.remax.com and on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Except as required by law, the Company does not intend, and undertakes no duty, to update this information to reflect future events or circumstances.
1 | Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EPS are non-GAAP measures. These terms are defined elsewhere in this release. Please see the schedules appearing later in this release for reconciliations of these non-GAAP measures to the most directly comparable GAAP measures. |
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| | 2017 | | 2016 | | 2017 | | 2016 | ||||
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Revenue: | | | | | | | | | | | | |
Continuing franchise fees | | $ | 23,284 | | $ | 19,846 | | $ | 46,249 Werbung Mehr Nachrichten zur Re/max Holdings A Aktie kostenlos abonnieren
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