MADISON, N.J. - May 4, 2015 // PRNewswire // - Realogy Holdings Corp. (NYSE: RLGY), a global leader in residential real estate franchising and prominent provider of real estate brokerage, relocation, and title and settlement services, today reported financial results for the first quarter ended March 31, 2015, including the following highlights:
"With 10% home sale volume growth, the first quarter was stronger than the 5% to 9% range we anticipated," said Richard A. Smith, Realogy's chairman, chief executive officer and president. "The increases we saw in homesale transaction sides and average sale price in March, along with the strength of the sales contracts opened in March and April, are indicating a healthy spring selling season for the existing homesale market."
Smith continued: "Operationally, the first quarter momentum has carried over into the second quarter with NRT's acquisition of Coldwell Banker United, Realtors. We expect it to be an immediately accretive acquisition that geographically strengthens NRT's presence in Florida and Texas, expands into new markets in the Carolinas and now connects its Eastern Seaboard presence contiguously from Maine to Florida."
"Looking ahead at the second quarter of 2015, we expect to see homesale transaction volume gains in the range of 8% to 11% year-over-year on a company-wide basis," said Anthony E. Hull, executive vice president, chief financial officer and treasurer. "Based on our closed and open sales activity in March and April, we expect second quarter homesale transaction sides to be up 5% to 7% year-over-year and average sale price to increase 3% to 4% for RFG and NRT combined."
Hull continued: "Traditionally, the first quarter is our weakest due to the seasonality of residential real estate and represents our lowest share of the year for transaction volume, revenue and EBITDA. We also have historically reported a net loss in the first quarter as the period EBITDA is not sufficient to offset interest expense, depreciation and amortization which are reflected on a straight line basis throughout the year. As the spring selling season unfolds, we expect our aggregate number of homesale transaction sides to increase sequentially from approximately 272,000 in the first quarter of 2015 to between 400,000 and 408,000 in the second quarter."
The Company ended the quarter with a cash and cash equivalents balance of $184 million and no outstanding borrowings under its revolving credit facility. Total long-term corporate debt, including the short term portion, net of cash and cash equivalents totaled $3,722 million at March 31, 2015.
A consolidated balance sheet is included as Table 2 of this press release.
Today, May 4, at 8:30 a.m. (EDT), Realogy will hold a conference call via webcast to review its first quarter 2015 results. The call will be hosted by Richard A. Smith, chairman, chief executive officer and president, and Anthony E. Hull, executive vice president, chief financial officer and treasurer, and will conclude with an investor Q&A period with management.
Investors may access the conference call live via webcast at www.realogy.com under "Investors" or by dialing (888) 895-3527 (toll free); international participants should dial (706) 679-2250. Please dial in at least 5 to 10 minutes prior to start time. A webcast replay also will be available from May 5 through May 18, 2015.
Realogy Holdings Corp. (NYSE: RLGY) is a global leader in residential real estate franchising and brokerage with many of the best-known industry brands including Better Homes and Gardens® Real Estate, CENTURY 21®, Coldwell Banker®, Coldwell Banker Commercial®, The Corcoran Group®, ERA®, and Sotheby's International Realty®, as well as ZipRealty®, its technology-focused brand. Collectively, Realogy's franchise system members operate approximately 13,500 offices with more than 251,200 independent sales associates conducting business in 105 countries and territories around the world. NRT LLC, Realogy's company-owned real estate brokerage, is the largest residential brokerage company in the United States, operates under several of Realogy's brands and also provides related residential real estate services. The Company also owns Cartus, a prominent worldwide provider of relocation services to corporate and affinity clients, and Title Resource Group, a leading provider of title, settlement and underwriting services. Realogy is headquartered in Madison, New Jersey.
Certain statements in this press release constitute "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Realogy Holdings Corp. to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words "believes", "expects", "anticipates", "intends", "projects", "estimates" and "plans" and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical facts. Any statements that refer to expectations or other characterizations of future events, circumstances or results are forward-looking statements.
Various factors that could cause actual future results and other future events to differ materially from those estimated by management include, but are not limited to: adverse developments or the absence of sustained improvement in general business, economic and political conditions; adverse developments or the absence of improvement in the residential real estate markets including but not limited to the lack of sustained improvement in the number of home sales and/or stagnant or declining home prices, low levels of consumer confidence, the impact of slow economic growth or future recessions and related high levels of unemployment in the U.S. and abroad, continued low inventory levels, renewed high levels of foreclosures, seasonal fluctuations in the residential real estate brokerage business, and increasing mortgage rates and down payment requirements and/or constraints on the availability of mortgage financing; the Company's geographic and high-end market concentration, particularly with respect to its Company-owned brokerage operations; the Company's failure to enter into or renew franchise agreements or maintain its brands; risks relating to our outstanding debt and interest obligations; variable rate indebtedness which subjects the Company to interest rate risk; the Company's inability to access capital; the Company's inability to realize the benefits from acquisitions, including the 2014 acquisition of ZipRealty, Inc.; any outbreak or escalation of hostilities on a national, regional or international basis; government regulation as well as legislative, tax or regulatory changes that would adversely impact the residential real estate market, including but not limited to potential reform of the financing of the U.S. housing and mortgage markets and/or the Internal Revenue Code and changes in state or federal employment laws or regulations that would require reclassification of independent contractor sales associates to employee status, and wage and hour regulations; the Company's inability to sustain improvements in its operating efficiency; and the final resolution or outcomes with respect to Cendant's (our former parent) remaining contingent liabilities.
Consideration should be given to the areas of risk described above, as well as those risks set forth under the headings "Forward-Looking Statements" and "Risk Factors" in our filings with the Securities and Exchange Commission, including our Quarterly Reports filed on Form 10-Q for the quarter ended March 31, 2015, and our Annual Report on Form 10-K for the year ended December 31, 2014, and our other filings made from time to time, in connection with considering any forward-looking statements that may be made by us and our businesses generally. Except for our ongoing obligations to disclose material information under the federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events unless we are required to do so by law.
This release includes certain non-GAAP financial measures as defined under SEC rules. As required by SEC rules, important information regarding such measures is contained in the Tables attached to this release.
(1) See Table 8 for definitions of these non-GAAP financial measures and Tables 5a, 5b, 6 and 7 for reconciliations of these non-GAAP financial measures to their most comparable GAAP terms.
SOURCE Realogy Holdings Corp.
Mark Panus
Media Relataions
(973) 407-7215
mark.panus@realogy.com
Alicia Swift
Investor Relations
(973) 407-4669
alicia.swift@realogy.com
Jennifer Pepper
Investor Relations
(973) 407-7487
jennifer.pepper@realogy.com
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Adjusted net loss is defined by us as net loss before loss on the early extinguishment of debt. Adjusted loss per share is Adjusted net loss divided by the weighted average common and common equivalent shares outstanding. We present Adjusted net loss and Adjusted loss per share because we believe these measures are useful as supplemental measures in evaluating the performance of our operating businesses and provides greater transparency into our results of operations.
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Non-GAAP Definitions
EBITDA is defined by us as net income (loss) before depreciation and amortization, interest expense, net (other than relocation services interest for securitization assets and securitization obligations) and income taxes. Adjusted EBITDA calculated for a twelve-month period is presented to demonstrate our compliance with the senior secured leverage ratio covenant in the senior secured credit facility. Adjusted EBITDA calculated for a twelve-month period corresponds to the definition of "EBITDA," calculated on a "pro forma basis," used in the senior secured credit facility to calculate the senior secured leverage ratio. Adjusted EBITDA includes adjustments to EBITDA for restructuring costs, former parent legacy cost (benefit) items, net, loss on the early extinguishment of debt, non-cash charges, non-recurring fair value adjustments for purchase accounting, fees for secondary equity offerings and incremental securitization interest costs, as well as pro forma cost savings for restructuring initiatives, the pro forma effect of business optimization initiatives and the pro forma effect of acquisitions and new franchisees, in each case calculated as of the beginning of the twelve-month period. Adjusted EBITDA calculated for a three-month period adjusts for the same items as for a twelve-month period, except that the pro forma effect of cost savings, business optimizations and acquisitions and new franchisees are calculated as of the beginning of the three-month period instead of the twelve-month period.
We present EBITDA and Adjusted EBITDA because we believe EBITDA and Adjusted EBITDA are useful as supplemental measures in evaluating the performance of our operating businesses and provide greater transparency into our results of operations. Our management, including our chief operating decision maker, uses EBITDA as a factor in evaluating the performance of our business. EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for net income or other statement of operations data prepared in accordance with GAAP.
We believe EBITDA facilitates company-to-company operating performance comparisons by backing out potential differences caused by variations in capital structures (affecting interest expense), taxation, the age and book depreciation of facilities (affecting relative depreciation expense) and the amortization of intangibles, which may vary for different companies for reasons unrelated to operating performance. We further believe that EBITDA is frequently used by securities analysts, investors and other interested parties in their evaluation of companies, many of which present an EBITDA measure when reporting their results.
EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider EBITDA or Adjusted EBITDA either in isolation or as substitutes for analyzing our results as reported under GAAP. Some of these limitations are:
In addition to the limitations described above, Adjusted EBITDA includes pro forma cost savings, the pro forma effect of business optimization initiatives and the pro forma full period effect of acquisitions and new franchisees. These adjustments may not reflect the actual cost savings or pro forma effect recognized in future periods.
Free Cash Flow is defined as net income (loss) attributable to Realogy before income tax expense (benefit), net of payments, interest expense, net, depreciation and amortization, capital expenditures, restructuring costs and former parent legacy costs (benefits), net of payments, loss on the early extinguishment of debt, working capital adjustments and relocation assets, net of change in securitization obligations. Cash Earnings Per Share is defined as Free Cash Flow divided by the weighted average basic shares outstanding. We use Free Cash Flow and Cash Earnings Per Share in our internal evaluation of operating effectiveness and decisions regarding the allocation of resources. Free Cash Flow and Cash Earnings Per Share are not defined by GAAP and should not be considered in isolation or as an alternative to net income (loss), net cash provided by (used in) operating, investing and financing activities or other financial data prepared in accordance with GAAP or as an indicator of the Company's operating performance. Free Cash Flow and Cash Earnings Per Share may differ from similarly titled measures presented by other companies.
SOURCE Realogy Holdings Corp.
Realogy's company-owned real estate brokerage, is the largest residential brokerage company in the United States, operates under several of Realogy's brands and also provides related residential real estate services.