RE/MAX Holdings, Inc. Reports Fourth Quarter And Full-Year 2021 Results
Full-Year 2021 Highlights
(Compared to full-year 2020 unless otherwise noted)
- Total Revenue increased 23.9% to $329.7 million
- Revenue excluding the Marketing Funds1 increased 22.7% to $247.3 million, and was comprised of 11.8% organic growth2, 9.8% growth from acquisitions and 1.1% growth from foreign currency movements
- Net loss attributable to RE/MAX Holdings, Inc. of $15.6 million and loss per diluted share (GAAP EPS) of $0.84
- Adjusted EBITDA3 increased 29.3% to $119.7 million, Adjusted EBITDA margin 3 of 36.3% and Adjusted earnings per diluted share (Adjusted EPS3) of $2.43
- Total agent count increased 3.1% to 141,998 agents
- U.S. and Canada combined agent count increased 1.4% to 85,471 agents
- Total open Motto Mortgage franchises increased 32.6% to 187 offices4
Fourth Quarter 2021 Highlights
(Compared to fourth quarter 2020 unless otherwise noted)
- Total Revenue increased 23.1% to $89.2 million
- Revenue excluding the Marketing Funds increased 21.2% to $66.2 million, and was comprised of 5.0% organic growth, 15.3% growth from acquisitions and 0.9% growth from foreign currency movements
- Net income attributable to RE/MAX Holdings, Inc. of $3.1 million and earnings per diluted share (GAAP EPS) of $0.16
- Adjusted EBITDA increased 30.7% to $31.1 million, Adjusted EBITDA margin of 34.8% and Adjusted earnings per diluted share (Adjusted EPS) of $0.60
- Operating Statistics as of January 31, 2022
(Compared to January 31, 2021 unless otherwise noted) - Total agent count increased 2.9% to 141,716 agents
- U.S. and Canada combined agent count increased 1.1% to 84,911 agents
- Total open Motto Mortgage franchises increased 35.2% to 192 offices
February 24, 2022 // Franchising.com // RE/MAX Holdings, Inc. (the "Company" or "RE/MAX Holdings") (NYSE: RMAX), parent company of RE/MAX and Motto Mortgage ("Motto") today announced operating results for the fourth quarter and full year ended December 31, 2021.
"Continued solid organic growth from our core operations and strong contributions from our acquisition of the RE/MAX INTEGRA North American regions drove our fourth quarter outperformance," said Adam Contos, RE/MAX Holdings Chief Executive Officer. "The INTEGRA acquisition has been more impactful than we anticipated, generating higher-than-expected agent count, revenue and Adjusted EBITDA.
"We added more than 2,000 RE/MAX agents in Canada year over year, which more than offset softer results in the U.S. On the mortgage side, Motto Mortgage opened nearly 60 offices in 2021 – a record – and we continue to sell franchises at a healthy pace. We believe both brands are well positioned to grow meaningfully in 2022."
Steve Joyce, RE/MAX Holdings Director and incoming Chief Executive Officer, echoed that outlook: "Over the past few years, Adam and the leadership team have done an outstanding job investing for growth, expanding our services and positioning RE/MAX Holdings for continued future success. The strategic investments we've made have significantly diversified our revenue and broadened our growth opportunities. Those investments started to pay off in 2021, and, as evidenced by our 2022 financial guidance, we expect that to continue in the year ahead."
Joyce continued, "I look forward to working with our talented team to further strengthen RE/MAX Holdings. My goals as CEO are straightforward. First, amplify our growth – and revitalize our U.S. agent count growth, in particular – by focusing on a few core strategic initiatives. And, second, work with our Board of Directors to identify our next company leader. I am excited about both opportunities and look forward to sharing more good news in the coming weeks and months."
Fourth Quarter 2021 Operating Results
Agent Count
The following table compares agent count as of December 31, 2021 and 2020:
Revenue
RE/MAX Holdings generated $89.2 million in the fourth quarter of 2021, an increase of $16.7 million, or 23.1%, compared to $72.4 million in the fourth quarter of 2020. Revenue excluding the Marketing Funds was $66.2 million in the fourth quarter of 2021, an increase of 21.2% versus the same period in 2020. This increase was comprised of 5.0% organic growth, 15.3% acquisitive growth and 0.9% growth from foreign-currency movements. Organic growth increased primarily due to fewer agent recruiting initiatives versus the prior year, a price increase in RE/MAX continuing franchise fees, increased events-related revenue, and Motto growth. Growth attributable to acquisitions was due to revenue from the RE/MAX INTEGRA North American regions acquisition.
Recurring revenue streams, which consist of continuing franchise fees and annual dues, increased $9.0 million, or 26.6%, compared to the fourth quarter of 2020 and accounted for 64.6% of revenue (excluding the Marketing Funds) in the fourth quarter of 2021 compared to 61.8% of revenue in the prior-year period.
Operating Expenses
Total operating expenses were $78.7 million for the fourth quarter of 2021, an increase of $13.2 million, or 20.1%, compared to $65.5 million in the fourth quarter of 2020. Fourth quarter 2021 total operating expenses increased primarily due to higher selling, operating and administrative expenses; increased Marketing Funds expenses; and higher depreciation and amortization expenses.
Selling, operating and administrative expenses were $46.3 million in the fourth quarter of 2021, an increase of $5.5 million, or 13.6%, compared to the fourth quarter of 2020 and represented 69.9% of revenue, excluding the Marketing Funds, compared to 74.6% in the prior-year period. Fourth quarter 2021 selling, operating and administrative expenses increased primarily due to an increase in acquisition-related expenses, higher travel and events expenses, and higher personnel costs from headcount increases.
Fourth quarter 2021 depreciation and amortization expenses increased primarily due to incremental acquisition-related amortization expense and placing internally developed software into service.
Net Income and GAAP EPS
Net income attributable to RE/MAX Holdings was $3.1 million for the fourth quarter of 2021 compared to $1.4 million the fourth quarter of 2020. Reported basic and diluted GAAP income per share were $0.17 and $0.16, respectively, for the fourth quarter of 2021 compared to basic and diluted GAAP EPS of $0.07 each in the fourth quarter of 2020.
Adjusted EBITDA and Adjusted EPS
Adjusted EBITDA was $31.1 million for the fourth quarter of 2021, an increase of $7.3 million, or 30.7%, compared to the fourth quarter of 2020. Fourth quarter 2021 Adjusted EBITDA increased primarily due to contributions from the acquisition of RE/MAX INTEGRA's North American regions. Adjusted EBITDA also increased due to incremental revenue from fewer agent recruiting initiatives in the current year and increased revenue from a price increase in RE/MAX continuing franchise fees partially offset by increased travel costs and continued investment in our mortgage business. Adjusted EBITDA margin was 34.8% in the fourth quarter of 2021, up compared to 32.8% in the fourth quarter of 2020.
Adjusted basic and diluted EPS were $0.61 and $0.60, respectively, for the fourth quarter of 2021 compared to Adjusted basic and diluted EPS of $0.48 and $0.47, respectively, for the fourth quarter of 2020. The ownership structure used to calculate Adjusted basic and diluted EPS for the quarter ended December 31, 2021 assumes RE/MAX Holdings owned 100% of RMCO, LLC ("RMCO"). The weighted average ownership RE/MAX Holdings had in RMCO was 60.0% for the quarter ended December 31, 2021.
Balance Sheet
As of December 31, 2021, the Company had cash and cash equivalents of $126.3 million, an increase of $24.9 million from December 31, 2020. As of December 31, 2021, the Company had $452.1 million of outstanding debt, net of an unamortized debt discount and issuance costs, compared to $223.6 million as of December 31, 2020.
Share Repurchase Program
RE/MAX Holdings previously announced on January 11, 2022, that its Board of Directors authorized a common stock repurchase program of up to $100 million, reflecting confidence in the Company's performance and the strength of its balance sheet.
Dividend
On February 22, 2022, the Company announced that its Board of Directors approved a quarterly cash dividend of $0.23 per share of Class A common stock. The quarterly dividend is payable on March 16, 2022, to shareholders of record at the close of business on March 4, 2022.
Outlook
The Company's first quarter and full-year 2022 Outlook assumes no further currency movements, acquisitions or divestitures.
For the first quarter of 2022, RE/MAX Holdings expects:
- Agent count to increase 1.5% to 2.5% over first quarter 2021;
- Revenue in a range of $88.0 million to $92.0 million (including revenue from the Marketing Funds in a range of $22.0 million to $24.0 million); and
- Adjusted EBITDA in a range of $25.0 million to $28.0 million.
For the full-year 2022, the Company expects:
- Agent count to increase 2.0% to 4.0% over full-year 2021;
- Revenue in a range of $366.0 million to $376.0 million (including revenue from the Marketing Funds in a range of $91.5 million to $95.5 million); and
- Adjusted EBITDA in a range of $130.0 million to $135.0 million.
Webcast and Conference Call
The Company will host a conference call for interested parties on Thursday, February 24, 2022, beginning at 8:30 a.m. Eastern Time.
Interested parties also can access a live webcast through the Investor Relations section of the Company's website. 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.
Basis of Presentation
Unless otherwise noted, the results presented in this press release are consolidated and exclude adjustments attributable to the non-controlling interest.
Footnotes:
1Revenue excluding the Marketing Funds is a non-GAAP measure of financial performance that differs from the U.S. Generally Accepted Accounting Principles and a reconciliation to the most directly comparable U.S. GAAP measure is as follows (in thousands):
2The Company defines organic revenue growth as revenue growth from continuing operations excluding (i) revenue from Marketing Funds, (ii) revenue from acquisitions, and (iii) the impact of foreign currency movements. The Company defines revenue from acquisitions as the revenue generated from the date of an acquisition to its first anniversary (excluding Marketing Funds revenue related to acquisitions where applicable).
3Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EPS are non-GAAP measures. These terms are defined at the end of this release. Please see Tables 5 and 6 appearing later in this release for reconciliations of these non-GAAP measures to the most directly comparable GAAP measures.
4Total open Motto Mortgage franchises includes only "bricks and mortar" offices with a unique physical address with rights granted by a full franchise agreement with Motto Franchising, LLC and excludes any "virtual" offices or "Branchises".
SOURCE RE/MAX Holdings, Inc.
###
ADVERTISE | SPONSORED CONTENT |
ADVERTISE | SPONSORED CONTENT |