The Rmr Group Inc. · NASDAQ:RMR
The Rmr — Q2 2024 Earnings Presentation
28 slides from The Rmr's earnings presentation, May 8, 2024
Slide 1: The RMR Group Inc. Announces Second Quarter Fiscal 2024 Financial Results
The RMR Group Inc. Announces Second Quarter Fiscal 2024 Financial Results May 7, 2024
Slide 2: The RMR Group Inc. Announces Second Quarter Fiscal 2024 Financial Results
THE RMR GROUP INC. ANNOUNCES SECOND QUARTER FISCAL 2024 FINANCIAL RESULTS Newton, MA (May 7, 2024). The RMR Group Inc. (Nasdaq: RMR) today announced its financial results for the fiscal quarter ended March 31, 2024. Dividend "This quarter, RMR increased management and advisory services revenue by 7%
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: Second Quarter Fiscal 2024 Financial Results
Second Quarter Fiscal 2024 Financial Results
Slide 5: The RMR Group Inc.'s Second Quarter Fiscal 2024 Highlights
THE RMR GROUP INC.'S SECOND QUARTER FISCAL 2024 HIGHLIGHTS • Net Income of $12.7 Million, Net Income Attributable to The RMR Group Inc. of $5.9 Million, or $0.34 Per Diluted Share, and Net Income Margin of 25.6% • Adjusted Net Income Attributable to The RMR Group Inc. of $6.9 Million, or $0.39 Per D
Slide 6: AUM by Source
AUM BY SOURCE ($ in thousands) AUM Fee-Earning AUM $13,111,701 32% $9,853,514 35% 2Q'24 $18,340,383 $28,295,844 68% 65% $41,407,545 $28,193,897 Perpetual ManagedCapital Public Real Estate Capital Private Managed Capital Private Real Estate Capital $7,640,481 $4,391,904 21% 17% 2Q'23 $29,628,801 $20,
Slide 7: Perpetual Capital AUM
PERPETUAL CAPITAL AUM ($ in thousands) Commercial Real Estate Fee-Earning Sector AUM AUM Service Properties Trust (NASDAQ: SVC) Hotels / Retail $ 11,424,841 $ 6,756,986 Medical Office & Life Science / Diversified Healthcare Trust (NASDAQ: DHC) Senior Living 7,719,866 3,644,100 Office Properties Inco
Slide 8: Private Capital AUM
PRIVATE CAPITAL AUM ($ in thousands) Fee-Earning Strategy AUM AUM Residential Real Estate Funds * Value Add / Core Plus $ 5,405,459 $ 5,405,459 Industrial Real Estate Funds ** Core Plus 3,947,889 893,411 Medical Office & Life Science Real Estate Funds Core Plus 2,412,284 2,412,284 Hotel Real Estate
Slide 9: 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 9
Slide 10: 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 $32,785 $16,990 $28,985 $29,357 $6,377 6,613 $6,682 $7,111 $11,591 $11,408 $2,742 $2,121 $26,408 $22,372 $22,675 $9,879 $8,849 $9,287 2Q'24 1Q'2
Slide 11: GAAP Results: Condensed Consolidated Statements of Income
GAAP RESULTS: CONDENSED CONSOLIDATED STATEMENTS OF INCOME ($ in thousands) (unaudited) 2Q'24 1Q'24 2Q'23 Revenues: Management services (1) $ 48,460 $ 45,094 $ 47,070 Incentive fees 60 299 — Advisory services 1,126 1,125 1,139 Total management, incentive and advisory services revenues 49,646 46,518 4
Slide 12: GAAP Results: Earnings per Common Share
GAAP RESULTS: EARNINGS PER COMMON SHARE (amounts in thousands, except per share amounts) (unaudited) 2Q'24 1Q'24 2Q'23 Numerators: Net income attributable to The RMR Group Inc. $ 5,862 $ 6,997 $ 18,473 Less: income attributable to unvested participating securities (78) (85) (219) Net income attribut
Slide 13: GAAP Results: Condensed Consolidated Balance Sheets
GAAP RESULTS: CONDENSED CONSOLIDATED BALANCE SHEETS ($ in thousands) (unaudited) March 31, 2024 September 30, 2023 Assets Cash and cash equivalents held by The RMR Group Inc. $ 25,918 $ 26,802 Cash and cash equivalents held by The RMR Group LLC 166,190 241,187 Due from related parties 87,336 111,323
Slide 14: Non-GAAP Financial Measures
Non-GAAP Financial Measures 14
Slide 15: 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 16: Reconciliation of Adjusted Net Income per Diluted Share (Continued)
RECONCILIATION OF ADJUSTED NET INCOME AND ADJUSTED NET INCOME PER DILUTED SHARE (CONTINUED) The following table presents the impact of certain individually significant items on the financial results for the three months ended December 31, 2023 assuming the redemption of the noncontrolling interest i
Slide 17: Reconciliation of Adjusted Net Income per Diluted Share (Continued)
RECONCILIATION OF ADJUSTED NET INCOME AND ADJUSTED NET INCOME PER DILUTED SHARE (CONTINUED) The following table presents the impact of certain individually significant items on the financial results for the three months ended March 31, 2023 assuming the redemption of the noncontrolling interest in T
Slide 18: Reconciliation of EBITDA and Adjusted EBITDA from Net Income
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA FROM NET INCOME ($ in thousands) (unaudited) 2Q'24 1Q'24 2Q'23 Net income $ 12,713 $ 15,526 $ 41,302 Income tax expense 2,120 2,638 6,883 Depreciation and amortization 1,223 423 272 Interest expense 80 11 — EBITDA 16,136 18,598 48,457 Other asset amortiza
Slide 19: Calculation of Margins, Distributable Earnings and Distributable Earnings per Share
CALCULATION OF NET INCOME MARGIN, ADJUSTED EBITDA MARGIN, DISTRIBUTABLE EARNINGS AND DISTRIBUTABLE EARNINGS PER SHARE (amounts in thousands, except per share amounts) (unaudited) 2Q'24 1Q'24 2Q'23 Calculation of Net Income Margin: Total management and advisory services revenues $ 49,646 $ 46,518 $ 4
Slide 20: Distribution Payout Ratio for The RMR Group LLC
DISTRIBUTION PAYOUT RATIO FOR THE RMR GROUP LLC (amounts in thousands, except per share amounts) (unaudited) 2Q'24 1Q'24 2Q'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 21: 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 22: Notes & Definitions
Notes & Definitions 22
Slide 23: Notes
NOTES Notes to page 10 – MANAGEMENT AND ADVISORY SERVICES REVENUES BY SOURCE The following tables present revenues by client and exclude incentive business management fees earned from SEVN of $60 and $299 during the three months ended March 31, 2024 and December 31, 2023, respectively: ($ in thousan
Slide 24: Notes (Continued)
NOTES (CONTINUED) Notes to page 10 – MANAGEMENT AND ADVISORY SERVICES REVENUES BY SOURCE (CONTINUED) ($ in thousands) 2Q'24 1Q'24 2Q'23 CONSTRUCTION SUPERVISION REVENUES DHC $ 520 $ 1,056 $ 577 ILPT 73 124 138 OPI 771 1,712 2,620 SVC 1,696 2,182 467 Total Perpetual Capital 3,060 5,074 3,802 RMR Resi
Slide 25: Notes (Continued)
NOTES (CONTINUED) Notes to page 11 – 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 26: Notes (Continued)
NOTES (CONTINUED) Notes to page 12 – 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 27: Notes (Continued)
NOTES (CONTINUED) Notes to page 20 – 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 28: 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