RE/MAX(US:RMAX)2021-08-03 16:00Financial Performance - Revenue for the second quarter reached $77.2 million, an increase of 48.0% from the prior year[109] - Net income attributable to RE/MAX Holdings, Inc. increased 49.1% to $5.2 million[109] - Adjusted EBITDA grew 61.3% to $30.5 million, with an adjusted EBITDA margin of 39.5%[109] - Total revenue for the six months ended June 30, 2021, was $149.5 million, an increase of $27.1 million or 22.1% compared to the prior year[128] - Adjusted EBITDA for the three months ended June 30, 2021, was $30.5 million, an increase of $11.6 million or 61.6% from the comparable prior year period[126] - Net income for the six months ended June 30, 2021, was $11.9 million, compared to $11.2 million for the same period in 2020, showing a slight increase of 6.2%[147] - Cash provided by operating activities increased to $30.3 million for the six months ended June 30, 2021, up from $16.3 million in 2020, reflecting a growth of 85.5%[157] Expenses and Costs - Total operating expenses decreased by 46.7% to $63.836 million, representing 82.6% of revenue[118] - Personnel costs for the six months ended June 30, 2021, increased to $51.0 million, a rise of $20.2 million or 65.6% compared to the prior year[135] - Total selling, operating, and administrative expenses for the six months ended June 30, 2021, were $82.5 million, a decrease of $22.5 million or 37.4% from the prior year[134] - Total operating expenses for the six months ended June 30, 2021, were $132.6 million, a decrease of $30.6 million or 30.0% from the prior year[134] - Other expenses, net for the six months ended June 30, 2021, totaled $(4.4) million, a decrease of $0.3 million or 6.6% from the prior year[139] - Professional fees increased by $5.0 million or 86.1% for the six months ended June 30, 2021, primarily due to acquisition-related expenses[135] Franchise and Agent Metrics - Total agent count grew by 6.3% to 140,201 agents, with U.S. and Canada combined agent count increasing 3.0% to 85,494 agents[108] - Motto open offices increased by 29.1% year-over-year, totaling 164 offices[109] - RE/MAX franchise sales increased by 10.0% to 395, while Motto franchise sales decreased by 7.7% to 24[110] - Continuing franchise fees rose by 61.0% to $26.955 million, driven by fee increases and fewer recruiting initiatives[112] - Continuing franchise fees revenue increased by $11.4 million or 28.0% for the six months ended June 30, 2021, compared to the prior year[128] - Broker fees increased by 67.4% to $17.453 million, attributed to higher transactions per agent and rising home prices[112] - Broker fees revenue increased by $9.5 million or 48.0% for the six months ended June 30, 2021, compared to the prior year[128] Capital and Investments - The company acquired the operating companies of RE/MAX INTEGRA North America for approximately $235 million to enhance scalability and value delivery[101] - Total capital expenditures for the six months ended June 30, 2021, were $7.6 million, compared to $3.1 million in 2020, indicating a significant increase of 145.2%[162] - The company plans to continue investing in technology and operational efficiencies, with total capital expenditures for 2021 expected to be between $13 million and $16 million[165] Debt and Financing - As of June 30, 2021, the company had $222.6 million in term loans outstanding under its Senior Secured Credit Facility, with an interest rate of 3.5%[153] - The company amended its Senior Secured Credit Facility on July 21, 2021, to include a $460 million term loan facility and a $50 million revolving loan facility[154] - As of June 30, 2021, $223.8 million in term loans were outstanding under the Senior Secured Credit Facility[174] - The interest rate on the Senior Secured Credit Facility was 3.5% as of June 30, 2021[174] - A hypothetical 0.25% increase in LIBOR would result in additional annual interest expense of $0.6 million[174] Currency and Risk Management - The company has exposure to currency risk with significant fluctuations in revenue and operating income due to foreign currency exchange rates[175] - A hypothetical 5% strengthening/weakening of the U.S. dollar against the Canadian dollar would impact operating income by approximately $0.3 million and $0.6 million for the three and six months ended June 30, 2021, respectively[175] - The company does not currently engage in foreign exchange hedging but may consider it in the future[175] - The Canadian dollar represents the most significant currency exposure for the company[175] - The company actively converts cash balances into U.S. dollars to mitigate currency risk on cash positions[175] - The company performs quarterly reviews of credit exposure for franchisees above an established threshold[174] Taxation - The effective income tax rate decreased to 5.1% for the six months ended June 30, 2021, down from 28.6% in the prior year[140] Dividends - The company declared a quarterly cash dividend of $0.23 per share for the first two quarters of 2021, up from $0.22 per share in the same period of 2020, marking a 4.5% increase[166]