The Rmr Group Inc. · NASDAQ:RMR
The Rmr — Q3 2024 Earnings Presentation
29 slides from The Rmr's earnings presentation, Aug 2, 2024
Slide 1: The RMR Group Inc. Announces Third Quarter Fiscal 2024 Financial Results
The RMR Group Inc. Announces Third Quarter Fiscal 2024 Financial Results August 1, 2024
Slide 2: The RMR Group Inc. Announces Third Quarter Fiscal 2024 Financial Results
THE RMR GROUP INC. ANNOUNCES THIRD QUARTER FISCAL 2024 FINANCIAL RESULTS Newton, MA (August 1, 2024). The RMR Group Inc. (Nasdaq: RMR) today announced its financial results for the fiscal quarter ended June 30, 2024. Dividend "RMR delivered third quarter financial results RMR has declared a quarterl
Slide 3: Warning Regarding Forward-Looking Statements
WARNING REGARDING FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws that are subject to risks and uncertainties. These statements may include words such as “believe”, “
Slide 4: Third Quarter Fiscal 2024 Financial Results
Third Quarter Fiscal 2024 Financial Results
Slide 5: The RMR Group Inc.'s Third Quarter Fiscal 2024 Highlights
THE RMR GROUP INC.'S THIRD QUARTER FISCAL 2024 HIGHLIGHTS • Net Income of $12.4 Million, Net Income Attributable to The RMR Group Inc. of $4.9 Million, or $0.29 Per Diluted Share, and Net Income Margin of 25.2% • Adjusted Net Income Attributable to The RMR Group Inc. of $6.3 Million, or $0.37 Per Di
Slide 6: Private Capital Strategic Growth Initiatives
PRIVATE CAPITAL STRATEGIC GROWTH INITIATIVES • Subsequent to quarter end, RMR closed two first mortgage loans to seed our private capital real estate lending venture and completed our first multifamily acquisition. Real Estate Lending Venture RMR Residential Location Revere, MA Wayne, PA Location De
Slide 7: AUM by Source
AUM BY SOURCE ($ in thousands) AUM Fee-Earning AUM $12,877,139 31% $9,704,050 35% 3Q'24 $17,989,527 $28,437,358 69% 65% $41,314,497 $27,693,577 Perpetual ManagedCapital Public Real Estate Capital Managed Private Private Real Estate Capital Capital $7,666,631 $4,414,846 21% 19% 3Q'23 $28,040,326 $18,
Slide 8: Perpetual Capital AUM
PERPETUAL CAPITAL AUM ($ in thousands) Commercial Real Estate Fee-Earning Sector AUM AUM Hotels & Net Leased Service- Service Properties Trust (NASDAQ: SVC) Focused Retail $ 11,472,436 $ 6,535,337 Medical Office, Life Science & Diversified Healthcare Trust (NASDAQ: DHC) Senior Living 7,731,622 3,845
Slide 9: Private Capital AUM
PRIVATE CAPITAL AUM ($ in thousands) Fee-Earning Strategy AUM AUM Residential Real Estate Funds * Value Add / Core Plus $ 5,252,108 $ 5,252,108 Industrial Real Estate Funds ** Core Plus 3,949,658 894,294 Medical Office & Life Science Real Estate Funds Core Plus 2,413,539 2,413,539 Hotel Real Estate
Slide 10: AUM by Commercial Real Estate Sector
AUM BY COMMERCIAL REAL ESTATE SECTOR Medical Office & Life Science Hotels 12% 17% Retail 12% 16% Office Senior Living 13% 16% 14% Industrial Residential 10
Slide 11: Management and Advisory Services Revenues by Source
MANAGEMENT AND ADVISORY SERVICES REVENUES BY SOURCE ($ in thousands) Base Business Management & Advisory Revenues Base Property Management & Other Revenues $31,364 $16,990 $16,372 $28,957 $28,985 $7,230 $7,226 $6,613 $7,111 $7,165 $11,231 $2,087 $22,372 $24,134 $21,731 $9,207 $9,879 $9,144 3Q'24 2Q'
Slide 12: GAAP Results: Condensed Consolidated Statements of Income
GAAP RESULTS: CONDENSED CONSOLIDATED STATEMENTS OF INCOME ($ in thousands) (unaudited) 3Q'24 2Q'24 3Q'23 Revenues: Management services (1) $ 47,769 $ 48,460 $ 45,872 Termination and incentive fees (2) 370 60 45,474 Advisory services 1,127 1,126 1,141 Total management, termination, incentive and advi
Slide 13: GAAP Results: Earnings Per Common Share
GAAP RESULTS: EARNINGS PER COMMON SHARE (amounts in thousands, except per share amounts) (unaudited) 3Q'24 2Q'24 3Q'23 Numerators: Net income attributable to The RMR Group Inc. $ 4,935 $ 5,862 $ 24,641 Less: income attributable to unvested participating securities (76) (78) (273) Net income attribut
Slide 14: GAAP Results: Condensed Consolidated Balance Sheets
GAAP RESULTS: CONDENSED CONSOLIDATED BALANCE SHEETS ($ in thousands) (unaudited) June 30, 2024 September 30, 2023 Assets Cash and cash equivalents held by The RMR Group Inc. $ 25,368 $ 26,802 Cash and cash equivalents held by The RMR Group LLC 182,608 241,187 Due from related parties 98,697 111,323
Slide 15: Non-GAAP Financial Measures
Non-GAAP Financial Measures 15
Slide 16: Reconciliation of Adjusted Net Income and Adjusted Net Income per Diluted Share
RECONCILIATION OF ADJUSTED NET INCOME AND ADJUSTED NET INCOME PER DILUTED SHARE The following table presents the impact of certain individually significant items on the financial results for the three months ended June 30, 2024, excluding the assumed redemption of the noncontrolling interest in The
Slide 17: Reconciliation of Adjusted Net Income and Adjusted Net Income per Diluted Share
RECONCILIATION OF ADJUSTED NET INCOME AND ADJUSTED NET INCOME PER DILUTED SHARE The following table presents the impact of certain individually significant items on the financial results for the three months ended March 31, 2024 assuming the redemption of the noncontrolling interest in The RMR Group
Slide 18: Reconciliation of Adjusted Net Income and Adjusted Net Income per Diluted Share
RECONCILIATION OF ADJUSTED NET INCOME AND ADJUSTED NET INCOME PER DILUTED SHARE The following table presents the impact of certain individually significant items on the financial results for the three months ended June 30, 2023, excluding the assumed redemption of the noncontrolling interest in The
Slide 19: Reconciliation of EBITDA and Adjusted EBITDA from Net Income
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA FROM NET INCOME ($ in thousands) (unaudited) 3Q'24 2Q'24 3Q'23 Net income $ 12,404 $ 12,713 $ 55,171 Income tax expense 3,657 2,120 9,214 Depreciation and amortization 1,234 1,223 281 Interest expense 80 80 — EBITDA 17,375 16,136 64,666 Other asset amorti
Slide 20: Calculation of Net Income Margin, Adjusted EBITDA Margin, Distributable Earnings
CALCULATION OF NET INCOME MARGIN, ADJUSTED EBITDA MARGIN, DISTRIBUTABLE EARNINGS AND DISTRIBUTABLE EARNINGS PER SHARE (amounts in thousands, except per share amounts) (unaudited) 3Q'24 2Q'24 3Q'23 Calculation of Net Income Margin: Total management and advisory services revenues $ 49,266 $ 49,646 $ 9
Slide 21: Distribution Payout Ratio for The RMR Group LLC
DISTRIBUTION PAYOUT RATIO FOR THE RMR GROUP LLC (amounts in thousands, except per share amounts) (unaudited) 3Q'24 2Q'24 3Q'23 The RMR Group LLC Shareholders (ownership percentage): The RMR Group Inc. 52.7 % 52.7 % 52.6 % ABP Trust 47.3 % 47.3 % 47.4 % Total 100.0 % 100.0 % 100.0 % Calculation of Di
Slide 22: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES RMR presents certain “non-GAAP financial measures” within the meaning of the applicable rules of the SEC, including Adjusted Net Income Attributable to The RMR Group Inc., Adjusted Net Income Attributable to The RMR Group Inc. per diluted share, EBITDA, Adjusted EBITDA, A
Slide 23: Notes & Definitions
Notes & Definitions 23
Slide 24: Notes
NOTES Notes to page 11 – MANAGEMENT AND ADVISORY SERVICES REVENUES BY SOURCE The following tables present revenues by client and exclude incentive business management fees earned from SEVN of $370, $60 and $192 during the three months ended June 30, 2024, March 31, 2024 and June 30, 2023, respective
Slide 25: Notes (Continued)
NOTES (CONTINUED) Notes to page 11 – MANAGEMENT AND ADVISORY SERVICES REVENUES BY SOURCE (CONTINUED) ($ in thousands) 3Q'24 2Q'24 3Q'23 CONSTRUCTION SUPERVISION REVENUES DHC $ 333 $ 520 $ 684 ILPT 115 73 237 OPI 1,078 771 2,428 SVC 1,334 1,696 909 Total Perpetual Capital 2,860 3,060 4,258 RMR Reside
Slide 26: Notes (Continued)
NOTES (CONTINUED) Notes to page 12 – GAAP RESULTS: CONDENSED CONSOLIDATED STATEMENTS OF INCOME (1) Management services revenues include base business management fees earned from the Managed Equity REITs that are calculated monthly based upon the lower of (i) the average historical cost of each REIT’
Slide 27: Notes (Continued)
NOTES (CONTINUED) Notes to page 13 – GAAP RESULTS: EARNINGS PER COMMON SHARE RMR calculates earnings per share (EPS) using the two-class method. As such, earnings attributable to unvested participating shares are excluded from earnings before calculating per share amounts. In addition, diluted EPS i
Slide 28: Notes (Continued)
NOTES (CONTINUED) Notes to page 21 – DISTRIBUTION PAYOUT RATIO FOR THE RMR GROUP LLC The following illustrative diagram presents certain tax and distribution information pertaining to The RMR Group LLC and The RMR Group Inc. Annual Tax Distributions Annual Dividends Taxing Authorities The RMR Group
Slide 29: Definitions
DEFINITIONS • Assets Under Management (AUM) All references in this presentation to AUM on, or as of, a date are calculated at a point in time. ▪ AUM is calculated as: (i) the historical cost of real estate and related assets, excluding depreciation, amortization, impairment charges or other non-cash