The Rmr Group Inc. · NASDAQ:RMR
The Rmr — Q4 2024 Earnings Presentation
30 slides from The Rmr's earnings presentation, Nov 11, 2024
Slide 1: Fourth Quarter Fiscal 2024 Financial Results
The RMR Group Inc. Announces Fourth Quarter Fiscal 2024 Financial Results November 11, 2024
Slide 2: The RMR Group Inc. Announces Fourth Quarter Fiscal 2024 Financial Results
THE RMR GROUP INC. ANNOUNCES FOURTH QUARTER FISCAL 2024 FINANCIAL RESULTS Newton, MA (November 11, 2024). The RMR Group Inc. (Nasdaq: RMR) today announced its financial results for the fiscal quarter ended September 30, 2024. Dividend "RMR delivered results that were largely RMR has declared a quart
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: Fourth Quarter Fiscal 2024 Financial Results
Fourth Quarter Fiscal 2024 Financial Results
Slide 5: Fourth Quarter Fiscal 2024 Highlights
THE RMR GROUP INC.'S FOURTH QUARTER FISCAL 2024 HIGHLIGHTS • Net income of $12.5 million and net income attributable to The RMR Group Inc. of $5.3 million, or $0.32 per diluted share • Adjusted Net Income Attributable to The RMR Group Inc. of $5.6 million, or $0.34 per diluted share • Adjusted EBITD
Slide 6: AUM by Source
AUM BY SOURCE ($ in thousands) AUM Fee-Earning AUM $12,761,376 31% $9,586,303 34% 4Q'24 $18,215,947 $28,098,949 69% 66% $40,860,325 $27,802,250 Perpetual ManagedCapital Public Real Estate Capital Managed Private Private Real Estate Capital Capital $7,683,344 $4,428,658 21% 19% 4Q'23 $28,191,144 $18,
Slide 7: Perpetual Capital AUM
PERPETUAL CAPITAL AUM ($ in thousands) Commercial Real Estate Fee-Earning Sector AUM AUM Hotels & Net Leased Service- Service Properties Trust (NASDAQ: SVC) Focused Retail $ 11,425,389 $ 6,442,016 Medical Office, Life Science & Diversified Healthcare Trust (NASDAQ: DHC) Senior Living 7,651,487 4,122
Slide 8: Private Capital AUM
PRIVATE CAPITAL AUM ($ in thousands) Fee-Earning Strategy AUM AUM Residential Real Estate Funds * Value Add / Core Plus $ 5,089,210 $ 5,089,210 Industrial Real Estate Funds ** Core Plus 3,951,737 894,850 Medical Office & Life Science Real Estate Funds Core Plus 2,414,805 2,414,805 Hotel Real Estate
Slide 9: AUM by Commercial Real Estate Sector
AUM BY COMMERCIAL REAL ESTATE SECTOR Medical Office & Life Science Hotel 12% 17% Retail 11% 17% Industrial Residential 13% 14% 16% Senior Living Office 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 $29,878 $28,964 $28,957 $16,372 $15,850 $7,020 $7,054 $7,226 $6,660 $7,165 $11,160 $2,103 $21,910 $21,731 $22,858 $9,190 $9,207 $9,057 4Q'24 3Q'
Slide 11: Other Private Capital Activities
OTHER PRIVATE CAPITAL ACTIVITIES Real Estate Lending Venture RMR Residential Location / Property Revere, MA / Hotel Wayne, PA / Industrial Location Denver, CO Type Origination Date July 1, 2024 July 18, 2024 Acquisition July 30, 2024 Date Principal Balance $40.0 million $17.2 million Purchase Maximu
Slide 12: GAAP Results: Condensed Consolidated Statements of Income
GAAP RESULTS: CONDENSED CONSOLIDATED STATEMENTS OF INCOME ($ in thousands) 4Q'24 3Q'24 4Q'23 Revenues: Management services (1) $ 46,878 $ 47,769 $ 44,212 Incentive fees 484 370 468 Advisory services 1,128 1,127 1,149 Total management, incentive and advisory services revenues 48,490 49,266 45,829 Inc
Slide 13: GAAP Results: Condensed Consolidated Statements of Income (Continued)
GAAP RESULTS: CONDENSED CONSOLIDATED STATEMENTS OF INCOME (CONTINUED) ($ in thousands) 4Q'24 3Q'24 4Q'23 Operating income 9,983 12,252 14,784 (2) Change in fair value of Earnout liability 1,825 1,064 — Interest income 1,734 2,638 3,737 Interest expense (612) (81) — Gain on equity method investments
Slide 14: GAAP Results: Earnings Per Common Share
GAAP RESULTS: EARNINGS PER COMMON SHARE (amounts in thousands, except per share amounts) 4Q'24 3Q'24 4Q'23 Numerators: Net income attributable to The RMR Group Inc. $ 5,336 $ 4,935 $ 7,696 Less: income attributable to unvested participating securities (79) (76) (78) Net income used in calculating ba
Slide 15: GAAP Results: Condensed Consolidated Balance Sheets
GAAP RESULTS: CONDENSED CONSOLIDATED BALANCE SHEETS ($ in thousands) September 30, 2024 September 30, 2023 Assets Cash and cash equivalents held by The RMR Group Inc. $ 23,189 $ 26,802 Cash and cash equivalents held by The RMR Group LLC 118,410 241,187 Due from related parties 134,030 111,323 Prepai
Slide 16: Non-GAAP Financial Measures
Non-GAAP Financial Measures 16
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 September 30, 2024, excluding the assumed redemption of the noncontrolling interest in
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, 2024, excluding the assumed redemption of the noncontrolling interest in The
Slide 19: 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 September 30, 2023, excluding the assumed redemption of the noncontrolling interest in
Slide 20: Reconciliation of EBITDA and Adjusted EBITDA from Net Income
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA FROM NET INCOME ($ in thousands) 4Q'24 3Q'24 4Q'23 Net income $ 12,486 $ 12,404 $ 17,058 Income tax expense 2,904 3,657 3,187 Depreciation and amortization 1,833 1,234 281 Interest expense (1) 81 80 — EBITDA 17,304 17,375 20,526 Other asset amortization 2
Slide 21: 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) 4Q'24 3Q'24 4Q'23 Calculation of Net Income Margin: Total management and advisory services revenues $ 48,490 $ 49,266 $ 45,829 Net in
Slide 22: Distribution Payout Ratio for The RMR Group LLC
DISTRIBUTION PAYOUT RATIO FOR THE RMR GROUP LLC (amounts in thousands, except per share amounts) 4Q'24 3Q'24 4Q'23 The RMR Group LLC Shareholders (ownership percentage): The RMR Group Inc. 52.9% 52.7% 52.6% ABP Trust 47.1% 47.3% 47.4% Total 100.0% 100.0% 100.0% Calculation of Distribution Payout Rat
Slide 23: 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 24: Notes & Definitions
Notes & Definitions 24
Slide 25: Notes
NOTES Notes to page 10 – MANAGEMENT AND ADVISORY SERVICES REVENUES BY SOURCE The following tables present revenues by client and exclude incentive fees earned from SEVN of $484, $370 and $468 during the three months ended September 30, 2024, June 30, 2024 and September 30, 2023. ($ in thousands) 4Q'
Slide 26: Notes (Continued)
NOTES (CONTINUED) Notes to page 10 – MANAGEMENT AND ADVISORY SERVICES REVENUES BY SOURCE (CONTINUED) ($ in thousands) 4Q'24 3Q'24 4Q'23 CONSTRUCTION SUPERVISION REVENUES DHC $ 450 $ 333 $ 805 ILPT 119 115 171 OPI 519 1,078 1,908 SVC 1,540 1,334 1,109 Total Perpetual Capital 2,628 2,860 3,993 RMR Res
Slide 27: Notes (Continued)
NOTES (CONTINUED) Notes to page 12 and 13 – 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 eac
Slide 28: Notes (Continued)
NOTES (CONTINUED) Notes to page 14 – 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, if dilutive,
Slide 29: Notes (Continued)
NOTES (CONTINUED) Notes to page 22 – 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 30: Definitions
DEFINITIONS • Annualized NOI refers to annualized income from rental property revenues less annualized rental property expenses. Annualized NOI excludes interest expense and depreciation and amortization expense of the rental property. • Assets Under Management (AUM) All references in this presentat