Re/max Holdings, Inc. · NYSE:RMAX
Re/max — Q4 2019 Earnings Presentation
27 slides from Re/max's earnings presentation, Feb 20, 2020
Slide 1: Fourth Quarter & Full-Year 2019 Earnings
February 21, 2020 RE/MAX Holdings, Inc. Fourth Quarter & Full-Year 2019 Earnings Exhibit 99.2
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation 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 are often identified by the use of words such as “believe,” “intend,
Slide 3: Q4 2019 Highlights
Revenue of $68.2 million Adjusted EBITDA1 of $22.5 million Adjusted EBITDA Margin1 of 33.0% Adjusted basic and diluted EPS1 of $0.47 U.S. agent count bounces back, increasing almost 600 agents quarter over quarter Record quarterly Motto Mortgage franchise sales Ongoing technology transformation with
Slide 4: Five Consecutive Decades of Increasing Agent Count Growth
Five Consecutive Decades of Increasing Agent Count Growth Growing Our Global Network Year-over-Year Agent Count Growth of 5.3% (+6,609 agents) +5.3% YoY +0.3% YoY (+239 agents) +16.0% YoY (+6,370 agents) December 31, 2018 December 31, 2019 +24.3k agents +30.9k agents +34.6k agents +38.8k agents As o
Slide 5: Agent Count Change in the U.S. and Canada
Agent Count Change in the U.S. and Canada Agents in the U.S. +1.1% (+240 Agents) -0.0% (-1 Agent) Agent Count Change Year-over-Year December 31, 2019 over December 31, 2018 Agents in the Canada
Slide 6: First Conversations
First Conversations Unlock the power of your personal network. ©2019 RE/MAX, LLC. Each Office Independently Owned 1Current First clients not affiliated with RE/MAX may remain on through their current contract’s expiration, or until the end of 2020. 1
Slide 7: Technology: websites, consumer search app, Remax.com
Customized agent, office and team websites introduced New consumer real estate search app launched Remax.com website refreshed and enhanced
Slide 8: Meet Motto Mortgage
Entrepreneur Entrepreneur Entrepreneur FRANCHISE FRANCHISE FRANCHISE 500 TOP RANKED#1 FASTEST DA RANKED IN CATEGORY SONS FASTEST-GROWING —= 2020— = — EMERGING TMOTTO 2020 —= 2020— FRANCHISES’ Meet Motto, Meet busines opportunity, Veer worms 120 rT { MORTGAGE 100 80 60 40 ° U 1 fu6 416 G17 G217 G317
Slide 9: Revenue
Revenue Motto Expansion, Global RE/MAX Agent Growth and Improving Housing Market 1Recurring revenue is comprised of Continuing franchise fees and Annual dues. For Q4 2019: Revenue increased $17.4 million primarily due to the January 1, 2019 acquisition of the Marketing Funds The expansion of Motto a
Slide 10: Selling, Operating and Administrative Expenses
Selling, Operating and Administrative Expenses For Q4 2019: Selling, operating and administrative expenses represented 69.3% of total revenue (excluding the Marketing Funds) in Q4 2019 vs. 59.1% in Q4 2018 Selling, operating and administrative expenses increased primarily due to higher equity-based
Slide 11: Continued Investment for Future Growth
Continued Investment for Future Growth First Acquisition, Capital Allocation Priorities Energize Future Growth Through Organic & M&A Opportunities Acquired using on-hand cash + time-based equity awards RE/MAX agents will gain exclusive access to First’s mobile-based app at a significant discount1 Ex
Slide 12: Looking Ahead – Q1 2020 and FY 2020 Outlook
Looking Ahead – Q1 2020 and FY 2020 Outlook Growing Our Network, Our Business and Our Brands For the first quarter of 2020, RE/MAX Holdings expects: Agent count to increase 4.0% to 5.0% over first quarter 2019; Revenue in a range of $68.0 million to $71.0 million (including revenue from the Marketin
Slide 13: A Leading Dual-Brand Franchisor with Compelling Growth Opportunities
RE/MAX Holdings, Inc.: A Leading Dual-Brand Franchisor with Compelling Growth Opportunities #1 Name in Highly > Real Estate’ Productive conte (US/Canada) Network of Model is and Unmatched More Than Different Global 130,000 and Better Footprint Agents panty First and Among Dé 19 Only National Top 5%
Slide 14: Appendix
RE/MAX W® Appendix
Slide 15: About The RE/MAX National Housing Report
About The RE/MAX National Housing Report Description The RE/MAX National Housing Report (the “Report”) is distributed each month on or about the 15th. The first Report was distributed in August 2008. The Report is based on MLS data in approximately 54 metropolitan areas, includes all residential pro
Slide 16: Housing Report: January Sales Jump
Closed Transactions year over year change 10 Percent Jump in January Sales, Best Start to Year Since 2009 Source: RE/MAX National Housing Report based on January 2020 MLS data. See About The RE/MAX National Housing Report in the Appendix for Description and Definitions. Months Supply 6-months consid
Slide 17: Housing Industry Forecasts
Housing Starts - Single Family3,4 (Thousands) Industry Forecasts 1Source: NAR (National Association of Realtors) – Existing Home Sales, numbers presented are not seasonally adjusted; May 2014 through December 2019 2Source: NAR (National Association of Realtors) – U.S. Economic Outlook, January 2020
Slide 18: Mortgage Finance Forecasts
Mortgage Finance Forecasts Purchase Originations Expected to Grow, Rates to Flatten 1Source: Mortgage Bankers Association – MBA Mortgage Finance Forecast January 2020 Loan Originations1 ($’s in billions) Mortgage & Interest Rates1
Slide 19: Adjusted EBITDA Decreased 3.3%
Adjusted EBITDA1 ($M) Adjusted EBITDA1 Decreased 3.3% For Q4 2019: Adjusted EBITDA1 was $22.5 million for Q4 2019, a decrease of $0.8 million or 3.3% from Q4 2018. Adjusted EBITDA margin1 was 33.0% in Q4 2019 compared to 45.8% in Q4 2018 primarily due to the acquisition of the Marketing Funds. 1Adju
Slide 20: Strong Balance Sheet Bolsters Ability to Reinvest and Return Capital
Strong Balance Sheet Bolsters Ability to Reinvest and Return Capital to Shareholders Balance Sheet & Leverage Cash balance of $83.0 million on December 31, 2019, up $23.0 million from December 31, 2018 $225.7 million in outstanding debt1 and no revolving loans outstanding Total Debt / Adjusted EBITD
Slide 21: Motto Mortgage Continues to Expand
Motto Mortgage Continues to Expand Year-over-Year Revenue Growth of Almost 80%, Losses Narrowing as Motto Scales 1Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Basic and Diluted EPS are non-GAAP measures and exclude all adjustments attributable to the non-controlling interest. See the Appendi
Slide 22: RE/MAX Holdings, Inc. Agent Count
RE/MAX Holdings, Inc. Agent Count
Slide 23: Adjusted EBITDA Reconciliation to Net Income
RE/MAX Holdings, Inc. Adjusted EBITDA Reconciliation to Net Income (Reflects RE/MAX Holdings with 100% ownership of RMCO, LLC)
Slide 24: Adjusted Net Income & Adjusted Earnings per Share
RE/MAX Holdings, Inc. Adjusted Net Income & Adjusted Earnings per Share (Reflects RE/MAX Holdings with 100% ownership of RMCO, LLC)
Slide 25: Free Cash Flow & Unencumbered Cash Generation
RE/MAX Holdings, Inc. Free Cash Flow & Unencumbered Cash Generation
Slide 26: Non-GAAP Financial Measures Definitions
The SEC has adopted rules to regulate the use in filings with the SEC and in public disclosures of financial measures that are not in accordance with U.S. GAAP, such as Adjusted EBITDA and the ratios related thereto, Adjusted net income, Adjusted basic and diluted earnings per share (Adjusted EPS) a
Slide 27: Adjusted Net Income and Adjusted EPS Definitions
Adjusted net income is calculated as Net income attributable to RE/MAX Holdings, assuming the full exchange of all outstanding non-controlling interests for shares of Class A common stock as of the beginning of the period (and the related increase to the provision for income taxes after such exchang