Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 31, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2020 | |
Entity File Number | 001-36101 | |
Entity Registrant Name | RE/MAX Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 80-0937145 | |
Entity Address Line One | 5075 South Syracuse Street | |
Entity Address City or Town | Denver | |
Entity Address State or Province | CO | |
Entity Address Postal Zip Code | 80237 | |
City Area Code | 303 | |
Local Phone Number | 770-5531 | |
Title of 12(b) Security | Class A Common Stock, $0.0001 par value per share | |
Trading Symbol | RMAX | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001581091 | |
Amendment Flag | false | |
Common Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 18,123,963 | |
Common Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 84,545 | $ 83,001 |
Restricted cash | 14,752 | 20,600 |
Accounts and notes receivable, current portion, less allowances of $15,112 and $12,538, respectively | 29,732 | 28,644 |
Income taxes receivable | 639 | 896 |
Other current assets | 9,773 | 9,638 |
Total current assets | 139,441 | 142,779 |
Property and equipment, net of accumulated depreciation of $15,914 and $14,940, respectively | 5,124 | 5,444 |
Operating lease right of use assets | 48,787 | 51,129 |
Franchise agreements, net | 79,933 | 87,670 |
Other intangible assets, net | 27,628 | 32,315 |
Goodwill | 161,814 | 159,038 |
Deferred tax assets, net | 50,169 | 52,595 |
Income taxes receivable, net of current portion | 1,690 | 1,690 |
Other assets, net of current portion | 13,126 | 9,692 |
Total assets | 527,712 | 542,352 |
Current liabilities: | ||
Accounts payable | 4,225 | 2,983 |
Accrued liabilities | 44,442 | 60,163 |
Income taxes payable | 8,210 | 6,854 |
Deferred revenue | 25,362 | 25,663 |
Current portion of debt | 2,566 | 2,648 |
Current portion of payable pursuant to tax receivable agreements | 6,478 | 3,583 |
Operating lease liabilities | 5,381 | 5,102 |
Total current liabilities | 96,664 | 106,996 |
Debt, net of current portion | 222,051 | 223,033 |
Payable pursuant to tax receivable agreements, net of current portion | 30,745 | 33,640 |
Deferred tax liabilities, net | 351 | 293 |
Deferred revenue, net of current portion | 17,905 | 18,763 |
Operating lease liabilities, net of current portion | 53,197 | 55,959 |
Other liabilities, net of current portion | 4,642 | 5,292 |
Total liabilities | 425,555 | 443,976 |
Commitments and contingencies (note 12) | ||
Stockholders' equity: | ||
Additional paid-in capital | 473,451 | 466,945 |
Retained earnings | 28,385 | 30,525 |
Accumulated other comprehensive income, net of tax | 440 | 414 |
Total stockholders' equity attributable to RE/MAX Holdings, Inc. | 502,278 | 497,886 |
Non-controlling interest | (400,121) | (399,510) |
Total stockholders' equity | 102,157 | 98,376 |
Total liabilities and stockholders' equity | 527,712 | 542,352 |
Common Class A | ||
Stockholders' equity: | ||
Common stock | 2 | 2 |
Common Class B | ||
Stockholders' equity: | ||
Common stock | $ 0 | $ 0 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accounts and notes receivable, allowance | $ 15,112 | $ 12,538 |
Property and equipment, accumulated depreciation | $ 15,914 | $ 14,940 |
Common Class A | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 180,000,000 | 180,000,000 |
Common stock, shares issued | 18,123,963 | 17,838,233 |
Common stock, shares outstanding | 18,123,963 | 17,838,233 |
Common Class B | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 1,000 | 1,000 |
Common stock, shares issued | 1 | 1 |
Common stock, shares outstanding | 1 | 1 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue: | ||||
Total revenue | $ 52,207 | $ 71,381 | $ 122,479 | $ 142,559 |
Operating expenses: | ||||
Selling, operating and administrative expenses | 25,348 | 25,710 | 60,025 | 59,613 |
Marketing Funds expenses | 11,765 | 18,060 | 29,287 | 36,832 |
Depreciation and amortization | 6,412 | 5,541 | 12,722 | 11,099 |
Total operating expenses | 43,525 | 49,311 | 102,034 | 107,544 |
Operating income | 8,682 | 22,070 | 20,445 | 35,015 |
Other expenses, net: | ||||
Interest expense | (2,187) | (3,154) | (4,869) | (6,309) |
Interest income | 34 | 342 | 303 | 662 |
Foreign currency transaction gains (losses) | 101 | 61 | (169) | 116 |
Total other expenses, net | (2,052) | (2,751) | (4,735) | (5,531) |
Income before provision for income taxes | 6,630 | 19,319 | 15,710 | 29,484 |
Provision for income taxes | (706) | (3,186) | (4,496) | (5,094) |
Net income | 5,924 | 16,133 | 11,214 | 24,390 |
Less: net income attributable to non-controlling interest (note 3) | 2,435 | 7,563 | 5,094 | 11,411 |
Net income attributable to RE/MAX Holdings, Inc. | $ 3,489 | $ 8,570 | $ 6,120 | $ 12,979 |
Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock | ||||
Basic | $ 0.19 | $ 0.48 | $ 0.34 | $ 0.73 |
Diluted | $ 0.19 | $ 0.48 | $ 0.34 | $ 0.73 |
RMCO, LLC | ||||
Other expenses, net: | ||||
Net income | $ 5,924 | $ 16,133 | $ 11,214 | $ 24,390 |
Less: net income attributable to non-controlling interest (note 3) | 2,435 | 7,563 | 5,094 | 11,411 |
Net income attributable to RE/MAX Holdings, Inc. | $ 3,489 | $ 8,570 | $ 6,120 | $ 12,979 |
Common Class A | ||||
Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock | ||||
Basic | $ 0.19 | $ 0.48 | $ 0.34 | $ 0.73 |
Diluted | $ 0.19 | $ 0.48 | $ 0.34 | $ 0.73 |
Weighted average shares of Class A common stock outstanding | ||||
Basic | 18,123,963 | 17,808,321 | 18,049,114 | 17,791,942 |
Diluted | 18,146,886 | 17,833,958 | 18,090,259 | 17,825,880 |
Cash dividends declared per share of Class A common stock | $ 0.22 | $ 0.21 | $ 0.44 | $ 0.42 |
Continuing franchise fees | ||||
Revenue: | ||||
Total revenue | $ 16,738 | $ 24,894 | $ 40,881 | $ 49,850 |
Annual dues | ||||
Revenue: | ||||
Total revenue | 8,745 | 8,819 | 17,666 | 17,673 |
Broker fees | ||||
Revenue: | ||||
Total revenue | 10,426 | 13,459 | 19,870 | 22,047 |
Marketing Funds fees | ||||
Revenue: | ||||
Total revenue | 11,765 | 18,060 | 29,287 | 36,832 |
Franchise sales and other revenue | ||||
Revenue: | ||||
Total revenue | $ 4,533 | $ 6,149 | $ 14,775 | $ 16,157 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Condensed Consolidated Statements of Comprehensive Income | ||||
Net income | $ 5,924 | $ 16,133 | $ 11,214 | $ 24,390 |
Change in cumulative translation adjustment | 117 | 65 | (113) | 134 |
Other comprehensive income (loss), net of tax | 117 | 65 | (113) | 134 |
Comprehensive income | 6,041 | 16,198 | 11,101 | 24,524 |
Less: comprehensive income attributable to non-controlling interest | 2,490 | 7,595 | 4,955 | 11,476 |
Comprehensive income attributable to RE/MAX Holdings, Inc., net of tax | $ 3,551 | $ 8,603 | $ 6,146 | $ 13,048 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) | Common StockCommon Class A | Common StockCommon Class B | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss), net of tax | Non-controlling interest | Common Class A | Common Class B | Total |
Beginning balance, Value at Dec. 31, 2018 | $ 2,000 | $ 0 | $ 460,101,000 | $ 21,138,000 | $ 328,000 | $ (402,294,000) | $ 79,275,000 | ||
Beginning balance, Shares at Dec. 31, 2018 | 17,754,416 | 1 | |||||||
Net income | $ 0 | $ 0 | 0 | 4,409,000 | 0 | 3,848,000 | 8,257,000 | ||
Distributions to non-controlling unitholders | 0 | 0 | 0 | 0 | 0 | (2,693,000) | (2,693,000) | ||
Equity-based compensation expense and related dividend equivalents, value | $ 0 | $ 0 | 3,213,000 | (42,000) | 0 | 0 | 3,171,000 | ||
Equity-based compensation expense and related dividend equivalents, shares | 70,797 | 0 | |||||||
Dividends to Class A common stockholders | $ 0 | $ 0 | 0 | (3,740,000) | 0 | 0 | (3,740,000) | ||
Change in accumulated other comprehensive income | 0 | 0 | 0 | 0 | 36,000 | 33,000 | 69,000 | ||
Payroll taxes related to net settled restricted stock units, value | $ 0 | $ 0 | (713,000) | 0 | 0 | 0 | (713,000) | ||
Payroll taxes related to net settled restricted stock units, shares | (17,265) | 0 | |||||||
Ending balance, Value at Mar. 31, 2019 | $ 2,000 | $ 0 | 462,601,000 | 21,765,000 | 364,000 | (401,106,000) | 83,626,000 | ||
Ending balance, Shares at Mar. 31, 2019 | 17,807,948 | 1 | |||||||
Beginning balance, Value at Dec. 31, 2018 | $ 2,000 | $ 0 | 460,101,000 | 21,138,000 | 328,000 | (402,294,000) | 79,275,000 | ||
Beginning balance, Shares at Dec. 31, 2018 | 17,754,416 | 1 | |||||||
Net income | 24,390,000 | ||||||||
Change in accumulated other comprehensive income | 134,000 | ||||||||
Ending balance, Value at Jun. 30, 2019 | $ 2,000 | $ 0 | 463,055,000 | 26,595,000 | 397,000 | (398,124,000) | 91,925,000 | ||
Ending balance, Shares at Jun. 30, 2019 | 17,809,119 | 1 | |||||||
Beginning balance, Value at Mar. 31, 2019 | $ 2,000 | $ 0 | 462,601,000 | 21,765,000 | 364,000 | (401,106,000) | 83,626,000 | ||
Beginning balance, Shares at Mar. 31, 2019 | 17,807,948 | 1 | |||||||
Net income | $ 0 | $ 0 | 0 | 8,570,000 | 0 | 7,563,000 | 16,133,000 | ||
Distributions to non-controlling unitholders | 0 | 0 | 0 | 0 | 0 | (4,613,000) | (4,613,000) | ||
Equity-based compensation expense and related dividend equivalents, value | $ 0 | 0 | 182,000 | (1,000) | 0 | 0 | 181,000 | ||
Equity-based compensation expense and related dividend equivalents, shares | 1,740 | ||||||||
Dividends to Class A common stockholders | $ 0 | 0 | 0 | (3,739,000) | 0 | 0 | (3,739,000) | ||
Change in accumulated other comprehensive income | 0 | 0 | 0 | 0 | 33,000 | 32,000 | 65,000 | ||
Payroll taxes related to net settled restricted stock units, value | $ 0 | 0 | (18,000) | 0 | 0 | 0 | (18,000) | ||
Payroll taxes related to net settled restricted stock units, shares | (569) | ||||||||
Other | $ 0 | 0 | 290,000 | 0 | 0 | 0 | 290,000 | ||
Ending balance, Value at Jun. 30, 2019 | $ 2,000 | $ 0 | 463,055,000 | 26,595,000 | 397,000 | (398,124,000) | 91,925,000 | ||
Ending balance, Shares at Jun. 30, 2019 | 17,809,119 | 1 | |||||||
Beginning balance, Value at Dec. 31, 2019 | $ 2,000 | $ 0 | 466,945,000 | 30,525,000 | 414,000 | (399,510,000) | 98,376,000 | ||
Beginning balance, Shares at Dec. 31, 2019 | 17,838,233 | 1 | 17,838,233 | 1 | |||||
Net income | $ 0 | $ 0 | 0 | 2,631,000 | 0 | 2,659,000 | 5,290,000 | ||
Distributions to non-controlling unitholders | 0 | 0 | 0 | 0 | 0 | (2,777,000) | (2,777,000) | ||
Equity-based compensation expense and related dividend equivalents, value | $ 0 | $ 0 | 5,962,000 | (289,000) | 0 | 0 | 5,673,000 | ||
Equity-based compensation expense and related dividend equivalents, shares | 368,375 | 0 | |||||||
Dividends to Class A common stockholders | $ 0 | $ 0 | 0 | (3,986,000) | 0 | 0 | (3,986,000) | ||
Change in accumulated other comprehensive income | 0 | 0 | 0 | 0 | (36,000) | (194,000) | (230,000) | ||
Payroll taxes related to net settled restricted stock units, value | $ 0 | $ 0 | (2,268,000) | 0 | 0 | 0 | (2,268,000) | ||
Payroll taxes related to net settled restricted stock units, shares | (82,645) | 0 | |||||||
Ending balance, Value at Mar. 31, 2020 | $ 2,000 | $ 0 | 470,639,000 | 28,881,000 | 378,000 | (399,822,000) | 100,078,000 | ||
Ending balance, Shares at Mar. 31, 2020 | 18,123,963 | 1 | |||||||
Beginning balance, Value at Dec. 31, 2019 | $ 2,000 | $ 0 | 466,945,000 | 30,525,000 | 414,000 | (399,510,000) | 98,376,000 | ||
Beginning balance, Shares at Dec. 31, 2019 | 17,838,233 | 1 | 17,838,233 | 1 | |||||
Net income | 11,214,000 | ||||||||
Change in accumulated other comprehensive income | (113,000) | ||||||||
Ending balance, Value at Jun. 30, 2020 | $ 2,000 | $ 0 | 473,451,000 | 28,385,000 | 440,000 | (400,121,000) | 102,157,000 | ||
Ending balance, Shares at Jun. 30, 2020 | 18,123,963 | 1 | 18,123,963 | 1 | |||||
Beginning balance, Value at Mar. 31, 2020 | $ 2,000 | $ 0 | 470,639,000 | 28,881,000 | 378,000 | (399,822,000) | 100,078,000 | ||
Beginning balance, Shares at Mar. 31, 2020 | 18,123,963 | 1 | |||||||
Net income | $ 0 | $ 0 | 0 | 3,489,000 | 0 | 2,435,000 | 5,924,000 | ||
Distributions to non-controlling unitholders | 0 | 0 | 0 | 0 | 0 | (2,789,000) | (2,789,000) | ||
Equity-based compensation expense and related dividend equivalents, value | 0 | 0 | 2,812,000 | 0 | 0 | 0 | 2,812,000 | ||
Dividends to Class A common stockholders | 0 | 0 | 0 | (3,987,000) | 0 | 0 | (3,987,000) | ||
Change in accumulated other comprehensive income | 0 | 0 | 0 | 0 | 62,000 | 55,000 | 117,000 | ||
Other | 0 | 0 | 0 | 2,000 | 0 | 0 | 2,000 | ||
Ending balance, Value at Jun. 30, 2020 | $ 2,000 | $ 0 | $ 473,451,000 | $ 28,385,000 | $ 440,000 | $ (400,121,000) | $ 102,157,000 | ||
Ending balance, Shares at Jun. 30, 2020 | 18,123,963 | 1 | 18,123,963 | 1 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 11,214 | $ 24,390 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 12,722 | 11,099 |
Bad debt expense | 3,860 | 2,560 |
Equity-based compensation expense | 4,933 | 5,847 |
Deferred income tax expense | 1,099 | 2,521 |
Fair value adjustments to contingent consideration | (355) | 345 |
Other, net | 229 | 1,048 |
Changes in operating assets and liabilities | (17,379) | (14,827) |
Net cash provided by operating activities | 16,323 | 32,983 |
Cash flows from investing activities: | ||
Purchases of property, equipment and capitalization of software | (3,102) | (7,378) |
Restricted cash acquired with the Marketing Funds acquisition | 0 | 28,495 |
Other | 0 | (1,200) |
Net cash (used in) provided by investing activities | (3,102) | 19,917 |
Cash flows from financing activities: | ||
Payments on debt | (1,322) | (1,311) |
Distributions paid to non-controlling unitholders | (5,566) | (7,306) |
Dividends and dividend equivalents paid to Class A common stockholders | (8,262) | (7,522) |
Payments related to tax withholding for share-based compensation | (2,268) | (731) |
Net cash used in financing activities | (17,418) | (16,870) |
Effect of exchange rate changes on cash | (107) | 109 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (4,304) | 36,139 |
Cash, cash equivalents and restricted cash, beginning of year | 103,601 | 59,974 |
Cash, cash equivalents and restricted cash, end of period | 99,297 | 96,113 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 4,608 | 5,948 |
Net cash paid for income taxes | 1,682 | 3,885 |
Payments pursuant to tax receivable agreements | $ 0 | $ 2,854 |
Business and Organization
Business and Organization | 6 Months Ended |
Jun. 30, 2020 | |
Business and Organization | |
Business and Organization | 1. Business and Organization RE/MAX Holdings, Inc. (“Holdings”) and its consolidated subsidiaries, including RMCO, LLC (“RMCO”), are referred to hereinafter as the “Company.” The Company is a franchisor in the real estate industry, franchising real estate brokerages globally under the RE/MAX brand (“RE/MAX”) and mortgage brokerages within the United States (“U.S.”) under the Motto Mortgage brand (“Motto”). RE/MAX, founded in 1973, has over 130,000 agents operating in over 8,000 offices and a presence in more than 110 countries and territories. Motto, founded in 2016, is the first nationally franchised mortgage brokerage in the U.S. RE/MAX and Motto are 100% franchised and do not operate any real estate or mortgage brokerage offices. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying Consolidated Balance Sheet at December 31, 2019, which was derived from the audited consolidated financial statements at that date, and the unaudited interim condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying condensed consolidated financial statements are presented on a consolidated basis and include the accounts of Holdings and its consolidated subsidiaries. All significant intercompany accounts and transactions have been eliminated. In the opinion of management, the accompanying condensed consolidated financial statements reflect all normal and recurring adjustments necessary to present fairly the Company’s financial position as of June 30, 2020 and the results of its operations and comprehensive income, cash flows and changes in its stockholders’ equity for the three and six months ended June 30, 2020 and 2019. Interim results may not be indicative of full-year performance. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements within the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 Annual Report on Form 10-K”). Please refer to that document for a fuller discussion of all significant accounting policies. Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition The Company generates the substantial majority of its revenue from contracts with customers. The Company’s major streams of revenue are: ● Continuing franchise fees, which are fixed contractual fees paid monthly by regional franchise owners and franchisees based on the number of RE/MAX agents in the respective franchised region or office and the number of Motto offices. ● Annual dues, which are fees charged directly to RE/MAX agents. ● Broker fees, which are fees paid on real estate commissions when a RE/MAX agent assists a consumer to buy or sell a home. ● Marketing Funds fees, which are fixed contractual fees paid monthly by franchisees based on the number of RE/MAX agents in the respective franchised region or office or the number of Motto offices. ● Franchise sales and other franchise revenue, which consist of fees from initial sales of RE/MAX and Motto franchises, renewals of RE/MAX franchises, master franchise fees, preferred marketing arrangements, approved supplier programs and event-based revenue from training and other programs. Annual Dues The activity in the Company’s deferred revenue for annual dues is included in “Deferred revenue” and “Deferred revenue, net of current portion” on the Condensed Consolidated Balance Sheets, and consists of the following in aggregate (in thousands): Balance at New billings Revenue recognized (a) Balance at end Six Months Ended June 30, 2020 $ 15,982 $ 18,072 $ (17,666) $ 16,388 (a) Revenue recognized related to the beginning balance was $4.5 million and $11.2 million for the three and six months ended June 30, 2020, respectively. Franchise Sales The activity in the Company’s franchise sales deferred revenue accounts consists of the following (in thousands): Balance at New billings Revenue recognized (a) Balance at end Six Months Ended June 30, 2020 $ 25,884 $ 3,758 $ (4,909) $ 24,733 (a) Revenue recognized related to the beginning balance was $2.0 million and $4.6 million for the three and six months ended June 30, 2020, respectively. Commissions Related to Franchise Sales Commissions paid on franchise sales are recognized as an asset and amortized over the contract life of the franchise agreement. The activity in the Company’s capitalized contract costs for commissions (which are included in “other current assets” and “other assets, net of current portion” on the Condensed Consolidated Balance Sheets) consist of the following (in thousands): Balance at Expense Additions to contract Balance at end beginning of period recognized cost for new activity of period Six Months Ended June 30, 2020 $ 3,578 $ (711) $ 740 $ 3,607 Disaggregated Revenue In the following table, segment revenue is disaggregated by geographical area (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 U.S. $ 31,420 $ 41,689 $ 72,529 $ 83,424 Canada 4,625 5,893 9,935 11,242 Global 2,326 2,803 5,812 5,543 Total RE/MAX Franchising 38,371 50,385 88,276 100,209 U.S. 10,596 16,381 26,247 33,053 Canada 1,015 1,500 2,670 3,385 Global 154 179 370 394 Total Marketing Funds 11,765 18,060 29,287 36,832 Motto Franchising (a) 1,070 1,030 2,528 1,989 Other 1,001 1,906 2,388 3,529 Total $ 52,207 $ 71,381 $ 122,479 $ 142,559 (a) Revenue from the Motto Franchising segment is derived exclusively within the U.S. In the following table, segment revenue is disaggregated by Company-Owned or Independent Regions in the U.S., Canada and Global (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Company-Owned Regions $ 29,365 $ 39,823 $ 64,406 $ 75,730 Independent Regions 7,780 8,671 16,565 16,772 Global and Other 1,226 1,891 7,305 7,707 Total RE/MAX Franchising 38,371 50,385 88,276 100,209 Marketing Funds 11,765 18,060 29,287 36,832 Motto Franchising 1,070 1,030 2,528 1,989 Other 1,001 1,906 2,388 3,529 Total $ 52,207 $ 71,381 $ 122,479 $ 142,559 Certain items in the table above have been reclassified in the three and six months ended June 30, 2019 to conform with the current year presentation. Transaction Price Allocated to the Remaining Performance Obligations The following table includes estimated revenue by year, excluding certain other immaterial items, expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period (in thousands): Remaining 6 months of 2021 2022 2023 2024 2025 Thereafter Total Annual dues $ 12,258 $ 4,130 $ — $ — $ — $ — $ — $ 16,388 Franchise sales 3,631 6,274 4,894 3,464 2,178 1,109 3,183 24,733 Total $ 15,889 $ 10,404 $ 4,894 $ 3,464 $ 2,178 $ 1,109 $ 3,183 $ 41,121 Cash, Cash Equivalents and Restricted Cash All cash held by the Marketing Funds is contractually restricted. The following table reconciles the amounts presented for cash, both unrestricted and restricted, in the Condensed Consolidated Balance Sheets to the amounts presented in the Condensed Consolidated Statements of Cash Flows (in thousands): June 30, December 31, 2020 2019 Cash and cash equivalents $ 84,545 $ 83,001 Restricted cash 14,752 20,600 Total cash, cash equivalents and restricted cash $ 99,297 $ 103,601 Services Provided to the Marketing Funds by RE/MAX Franchising RE/MAX Franchising charges the Marketing Funds for various services it performs. These services primarily comprise (a) building and maintaining agent marketing technology, including customer relationship management tools, the remax.com website, agent, office and team websites, and mobile apps, (b) dedicated employees focused on marketing campaigns, and (c) various administrative services including customer support of technology, accounting and legal. Because these costs are ultimately paid by the Marketing Funds, they do not impact the net income of Holdings as the Marketing Funds have no reported net income. Costs charged from RE/MAX Franchising to the Marketing Funds are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Technology development - operating $ 3,722 $ 1,199 $ 6,693 $ 2,164 Technology development - capital 116 1,529 760 2,464 Marketing staff and administrative services 983 1,024 2,211 2,049 Total $ 4,821 $ 3,752 $ 9,664 $ 6,677 Leases The Company leases corporate offices, a distribution center, billboards and certain equipment. As all franchisees are independently owned and operated, there are no leases recognized for any offices used by the Company’s franchisees. All of the Company’s material leases are classified as operating leases. The Company acts as the lessor for four sublease agreements on its corporate headquarters, consisting solely of operating leases. The Company has made an accounting policy election not to recognize right-of-use assets and lease liabilities that arise from any of its short-term leases. All leases with a term of 12 months or less at commencement, for which the Company is not reasonably certain to exercise available renewal options that would extend the lease term past 12 months, will be recognized on a straight-line basis over the lease term. Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, which clarifies that implementation costs incurred by customers in cloud computing arrangements are deferred if they would be capitalized by customers in the software licensing arrangements under the internal-use software guidance. ASU 2018-15 also clarifies that any capitalized costs should not be recorded to “Depreciation and amortization” in the Consolidated Statements of Income. The Company adopted this standard effective January 1, 2020 prospectively to all new implementation costs incurred after adoption. The amendments of ASU 2018-15 did not have a significant impact on the Company’s consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) effective for the Company on January 1, 2020. This new guidance was applied on a prospective basis. The amendments of ASU 2018-13 did not have a significant impact on the Company’s consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, New Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) |
Non-controlling Interest
Non-controlling Interest | 6 Months Ended |
Jun. 30, 2020 | |
Noncontrolling Interest | |
Non-controlling Interest | 3. Non-controlling Interest Holdings is the sole managing member of RMCO and operates and controls all of the business affairs of RMCO. The ownership of the common units in RMCO is summarized as follows: June 30, 2020 December 31, 2019 Shares Ownership % Shares Ownership % Non-controlling interest ownership of common units in RMCO 12,559,600 40.9 % 12,559,600 41.3 % Holdings outstanding Class A common stock (equal to Holdings common units in RMCO) 18,123,963 59.1 % 17,838,233 58.7 % Total common units in RMCO 30,683,563 100.0 % 30,397,833 100.0 % The weighted average ownership percentages for the applicable reporting periods are used to calculate the “Net income attributable to RE/MAX Holdings, Inc.” A reconciliation of “Income before provision for income taxes” to “Net Income attributable to RE/MAX Holdings, Inc.” and “Net Income attributable to non-controlling interest” in the accompanying Condensed Consolidated Statements of Income for the periods indicated is detailed as follows (in thousands, except percentages): Three Months Ended June 30, 2020 2019 RE/MAX Non-controlling Total RE/MAX Non-controlling Total Weighted average ownership percentage of RMCO (a) 59.1 % 40.9 % 100.00 % 58.6 % 41.4 % 100.0 % Income before provision for income taxes (a) $ 3,895 $ 2,735 $ 6,630 $ 11,328 $ 7,991 $ 19,319 Provision for income taxes (b)(c) (406) (300) (706) (2,758) (428) (3,186) Net income $ 3,489 $ 2,435 $ 5,924 $ 8,570 $ 7,563 $ 16,133 Six Months Ended June 30, 2020 2019 RE/MAX Non-controlling Total RE/MAX Non-controlling Total Weighted average ownership percentage of RMCO (a) 59.0 % 41.0 % 100.0 % 58.6 % 41.4 % 100.0 % Income before provision for income taxes (a) $ 9,447 $ 6,263 $ 15,710 $ 17,286 $ 12,198 $ 29,484 Provision for income taxes (b)(c) (3,327) (1,169) (4,496) (4,307) (787) (5,094) Net income $ 6,120 $ 5,094 $ 11,214 $ 12,979 $ 11,411 $ 24,390 (a) The weighted average ownership percentage of RMCO differs from the allocation of income before provision for income taxes between Holdings and the non-controlling interest due to (i) certain relatively insignificant expenses and (ii) a gain on reduction in the tax receivable agreement liability attributable only to Holdings was recorded for the three months ended March 31, 2020 and subsequently removed for the three months ended June 30, 2020 . (b) The provision for income taxes attributable to Holdings is primarily comprised of U.S. federal and state income taxes on its proportionate share of the pass-through income from RMCO. It also includes Holdings’ share of taxes directly incurred by RMCO and its subsidiaries, related primarily to tax liabilities in certain foreign jurisdictions. For the six months ended June 30, 2020, the provision for income taxes attributable to Holdings also includes a decrease in the value of deferred tax assets. See Note 10, Income Taxes for additional information. (c) The provision for income taxes attributable to the non-controlling interest represents its share of taxes related primarily to tax liabilities in certain foreign jurisdictions directly incurred by RMCO or its subsidiaries. Otherwise, because RMCO is a pass-through entity, there is no U.S. federal and state income tax provision recorded on the non-controlling interest. Distributions and Other Payments to Non-controlling Unitholders Under the terms of RMCO’s limited liability company operating agreement, RMCO makes cash distributions to non-controlling unitholders on a pro-rata basis. The distributions paid or payable to non-controlling unitholders are summarized as follows (in thousands): Six Months Ended June 30, 2020 2019 Tax and other distributions $ 40 $ 2,031 Dividend distributions 5,526 5,275 Total distributions to non-controlling unitholders $ 5,566 $ 7,306 |
Earnings Per Share and Dividend
Earnings Per Share and Dividends | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share and Dividends | |
Earnings Per Share and Dividends | 4. Earnings Per Share and Dividends Earnings Per Share The following is a reconciliation of the numerator and denominator used in the basic and diluted EPS calculations (in thousands, except shares and per share information): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Numerator Net income attributable to RE/MAX Holdings, Inc. $ 3,489 $ 8,570 $ 6,120 $ 12,979 Denominator for basic net income per share of Class A common stock Weighted average shares of Class A common stock outstanding 18,123,963 17,808,321 18,049,114 17,791,942 Denominator for diluted net income per share of Class A common stock Weighted average shares of Class A common stock outstanding 18,123,963 17,808,321 18,049,114 17,791,942 Add dilutive effect of the following: Restricted stock units 22,923 25,637 41,145 33,938 Weighted average shares of Class A common stock outstanding, diluted 18,146,886 17,833,958 18,090,259 17,825,880 Earnings per share of Class A common stock Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock, basic $ 0.19 $ 0.48 $ 0.34 $ 0.73 Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock, diluted $ 0.19 $ 0.48 $ 0.34 $ 0.73 Outstanding Class B common stock does not share in the earnings of Holdings and is therefore not a participating security. Accordingly, basic and diluted net income per share of Class B common stock has not been presented. Dividends Dividends declared and paid during each quarter ended per share on all outstanding shares of Class A common stock were as follows (in thousands, except per share information): Six Months Ended June 30, 2020 2019 Quarter end declared Date paid Per share Amount paid Amount paid Date paid Per share Amount paid Amount paid March 31 March 18, 2020 $ 0.22 $ 3,986 $ 2,763 March 20, 2019 $ 0.21 $ 3,740 $ 2,638 June 30 June 2, 2020 0.22 3,987 2,763 May 29, 2019 0.21 3,739 2,637 $ 0.44 $ 7,973 $ 5,526 $ 0.42 $ 7,479 $ 5,275 On August 5, 2020, the Company’s Board of Directors declared a quarterly dividend of $0.22 per share on all outstanding shares of Class A common stock, which is payable on September 2, 2020 to stockholders of record at the close of business on August 19, 2020. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2020 | |
Acquisitions | |
Acquisitions | 5. Acquisitions First On December 16, 2019, the Company acquired First Leads, Inc. (“First”) for $15 million in cash generated from operations. First provides a mobile app that leverages data science, machine learning and human interaction to help real estate professionals better leverage the value of their personal network and was acquired to complement the Company’s technology offerings and booj Platform. Marketing Funds On January 1, 2019, the Company acquired all of the regional and pan-regional advertising fund entities previously owned by its founder and Chairman of the Board of Directors, David Liniger, for a nominal amount. As in the past, the Marketing Funds are contractually obligated to use the funds collected to support both regional and pan-regional marketing campaigns designed to build and maintain brand awareness and to support the Company’s agent marketing technology. The acquisitions of the Marketing Funds were part of the Company’s succession plan, and ownership of the Marketing Funds by the franchisor is a common structure. Expenses incurred with the acquisition of the Marketing Funds were not material. The total assets equal the total liabilities of the Marketing Funds and beginning January 1, 2019, are reflected in the condensed consolidated financial statements of the Company. The following table summarizes the Company’s allocation of the purchase price to the fair value of assets acquired and liabilities assumed (in thousands): Restricted cash $ 28,495 Other current assets 8,472 Property and equipment 788 Other assets, net of current portion 126 Total assets acquired 37,881 Other current liabilities 37,881 Total liabilities assumed 37,881 Total acquisition price $ - The Company finalized its accounting for the acquisition of the Marketing Funds during the three months ended June 30, 2019. The Marketing Funds constitutes a business and was accounted for using the fair value acquisition method. The total purchase price was allocated to the assets acquired based on their estimated fair values. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Jun. 30, 2020 | |
Intangible Assets and Goodwill | |
Intangible Assets and Goodwill | 6. Intangible Assets and Goodwill The following table provides the components of the Company’s intangible assets (in thousands, except weighted average amortization period in years): Weighted Average As of June 30, 2020 As of December 31, 2019 Amortization Initial Accumulated Net Initial Accumulated Net Period Cost Amortization Balance Cost Amortization Balance Franchise agreements 12.5 $ 180,867 $ (100,934) $ 79,933 $ 180,867 $ (93,197) $ 87,670 Other intangible assets: Software (a) 4.3 $ 36,946 $ (13,628) $ 23,318 $ 36,680 $ (9,653) $ 27,027 Trademarks 9.0 2,021 (1,148) 873 1,904 (1,037) 867 Non-compete agreements 4.5 3,700 (2,168) 1,532 3,700 (1,546) 2,154 Training materials 5.0 2,400 (880) 1,520 2,400 (640) 1,760 Other 3.8 810 (425) 385 800 (293) 507 Total other intangible assets 4.6 $ 45,877 $ (18,249) $ 27,628 $ 45,484 $ (13,169) $ 32,315 (a) As of June 30, 2020 and December 31, 2019, capitalized software development costs of $0.8 million and $ 10.5 million, respectively, were related to technology projects not yet complete and ready for their intended use and thus were not subject to amortization. Amortization expense for the three months ended June 30, 2020 and 2019 was $6.0 million and $5.1 million, respectively. Amortization expense for the six months ended June 30, 2020 and 2019 was $11.8 million and $10.3 million, respectively. The estimated future amortization expense for the next five years related to intangible assets is as follows (in thousands): As of June 30, 2020: Remainder of 2020 $ 17,556 2021 26,133 2022 19,516 2023 15,371 2024 12,916 $ 91,492 The following table presents changes to goodwill (in thousands), by segment: RE/MAX Motto Franchising Total Balance, January 1, 2020 $ 147,238 $ 11,800 $ 159,038 Goodwill recognized from acquisitions (a) 2,927 — 2,927 Effect of changes in foreign currency exchange rates (151) — (151) Balance, June 30, 2020 $ 150,014 $ 11,800 $ 161,814 (a) The purpose of the First acquisition is to deliver technology solutions to RE/MAX franchisees and agents. As such, the Company allocated the goodwill arising from this acquisition to RE/MAX Franchising. The change in goodwill relates to updates to the initial purchase price allocation. |
Accrued Liabilities
Accrued Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
Accrued Liabilities. | |
Accrued Liabilities | 7. Accrued Liabilities Accrued liabilities consist of the following (in thousands): June 30, December 31, 2020 2019 Marketing Funds (a) $ 36,837 $ 39,672 Accrued payroll and related employee costs 2,384 11,900 Accrued taxes 1,317 2,451 Accrued professional fees 1,712 2,047 Other 2,192 4,093 $ 44,442 $ 60,163 (a) Consists primarily of liabilities recognized to reflect the contractual restriction that all funds collected in the Marketing Funds must be spent for designated purposes. See Note 2, Summary of Significant Accounting Policies for additional information. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt | |
Debt | 8. Debt Debt, net of current portion, consists of the following (in thousands): June 30, December 31, 2020 2019 Senior Secured Credit Facility $ 226,188 $ 227,363 Other long-term financing (a) 216 362 Less unamortized debt issuance costs (1,034) (1,182) Less unamortized debt discount costs (753) (862) Less current portion (a) (2,566) (2,648) $ 222,051 $ 223,033 (a) Includes financing assumed with the acquisition of booj. As of June 30, 2020, the carrying value of this financing approximates the fair value. Maturities of debt are as follows (in thousands): Six Months Ended June 30, 2020 Remainder of 2020 $ 1,326 2021 2,414 2022 2,350 2023 220,314 $ 226,404 Senior Secured Credit Facility In July 2013, the Company entered into a credit agreement with several lenders and administered by a bank, referred to herein as the “2013 Senior Secured Credit Facility.” In December 2016, the 2013 Senior Secured Credit Facility was amended and restated, referred to herein as the “Senior Secured Credit Facility.” The Senior Secured Credit Facility consists of a $235.0 million term loan facility which matures on December 15, 2023 and a $10.0 million revolving loan facility for which any loans outstanding must be repaid on December 15, 2021. As of June 30, 2020, the Company had no revolving loans outstanding under its Senior Secured Credit Facility. As of June 30, 2020, the interest rate on the term loan facility was 3.50%. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | 9. Fair Value Measurements Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering assumptions, the Company follows a three-tier fair value hierarchy, which is described in detail in the 2019 Annual Report on Form 10-K. A summary of the Company’s liabilities measured at fair value on a recurring basis is as follows (in thousands): As of June 30, 2020 As of December 31, 2019 Fair Value Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3 Liabilities Contingent consideration $ 4,650 $ — $ — $ 4,650 $ 5,005 $ — $ — $ 5,005 The Company is required to pay additional purchase consideration totaling 8% of gross receipts collected by Motto each year (the “Revenue Share Year”) through September 30, 2026, with no limitation as to the maximum payout. The fair value of the contingent purchase consideration represents the forecasted discounted cash payments that the Company expects to pay. Increases or decreases in the fair value of the contingent purchase consideration can result from changes in discount rates as well as the timing and amount of forecasted revenues. The forecasted revenue growth assumption that is most sensitive is the assumed franchise sales count for which the forecast assumes between 50-80 franchises sold annually, with a weighted average of approximately 70. The model also assumes a discount rate of approximately discount rate applied to the forecast would change the liability by approximately $0.1 million. The Company measures this liability each reporting period and recognizes changes in fair value, if any, in “Selling, operating and administrative expenses” in the accompanying Condensed Consolidated Statements of Income and recorded as a component of “Accrued liabilities” and “Other liabilities, net of current portion” in the accompanying Condensed Consolidated Balance Sheets. The table below presents a reconciliation of this liability (in thousands): Balance at January 1, 2020 $ 5,005 Fair value adjustments (355) Balance at June 30, 2020 $ 4,650 June 30, 2020 December 31, 2019 Carrying Fair Value Carrying Fair Value Senior Secured Credit Facility $ 224,401 $ 218,271 $ 225,319 $ 227,363 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Taxes | |
Income Taxes | 10. Income Taxes The “Provision for income taxes” in the accompanying Condensed Consolidated Statements of Income is based on an estimate of the Company’s annualized effective income tax rate. For the quarterly period ended March 31, 2020, the Company determined that it was unable to reliably estimate its annual effective tax rate to apply to its income for the quarter, as described in ASC 740 as a result of the uncertainty surrounding the COVID-19 pandemic. Therefore, the Company elected to record its tax provision for the three months ended March 31, 2020 using its actual effective tax rate. During the current period, the Company determined it is able to reliably estimate its annual effective tax rate to apply to its income, therefore, the Company elected to record its tax provision for the three and six months ended June 30, 2020 using its annualized effective income tax rate. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was enacted which includes several significant business tax provisions. The Company recognized the effect of this change in tax law during the first quarter which was not significant. The CARES Act provides a five-year carryback of net operating losses generated in tax years beginning after December 31, 2017 and before January 1, 2020. Based upon this change in law, any 2020 tax loss, if realized, will be able to be carried back five years. On December 22, 2017, the Tax Cuts and Jobs Act (“TCJA”) was enacted which includes significant changes to the U.S. Corporate tax system. The Company will continue to evaluate tax planning opportunities as well as monitor any changes that might be contained in the final regulations related to the TCJA. |
Equity-Based Compensation
Equity-Based Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Equity-Based Compensation | |
Equity-Based Compensation | 11. Equity-Based Compensation Employee equity-based compensation expense, net of the amount capitalized in internally developed software, is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Expense from time-based awards (a) $ 2,358 $ 1,872 $ 4,495 $ 3,963 Expense from performance-based awards (a)(b) 389 (872) 470 250 Expense from bonus to be settled in shares (c) — 920 — 1,818 Equity-based compensation capitalized (a) — (124) (32) (184) Equity-based compensation expense $ 2,747 $ 1,796 $ 4,933 $ 5,847 (a) Includes expense recognized and costs capitalized in connection with the awards granted to booj employees and former owners at the time of acquisition. (b) Expense recognized for performance-based awards is re-assessed each quarter based on expectations of achievement against the performance conditions. The Company granted certain performance awards to booj employees that vested in 2019 and therefore have no comparable amounts in 2020. (c) In 2019, the Company revised its annual bonus plan so that a portion of the bonus for most employees would be settled in shares if the Company met certain performance metrics. The Company eliminated the 2020 corporate bonus as part of cost savings measures in connection with the COVID-19 pandemic. Time-based Restricted Stock Units The following table summarizes equity-based compensation activity related to time-based restricted stock units (“RSUs”): RSUs Weighted average Balance, January 1, 2020 455,452 $ 46.15 Granted 296,000 $ 29.16 Shares vested (including tax withholding) (a) (163,028) $ 45.58 Forfeited (9,076) $ 41.09 Balance, June 30, 2020 579,348 $ 37.71 (a) Pursuant to the terms of the RE/MAX Holdings, Inc. 2013 Omnibus Incentive Plan, RSUs withheld by the Company for the payment of the employee's tax withholding related to an RSU vesting are added back to the pool of shares available for future awards. At June 30, 2020, there was $16.3 million of total unrecognized RSU expense, all of which is related to unvested awards. This compensation expense is expected to be recognized over the weighted-average remaining vesting period of 2.0 years for time-based restricted stock units. Performance-based Restricted Stock Units The following table summarizes equity-based compensation activity related to performance-based restricted stock units (“PSUs”): PSUs Weighted average Balance, January 1, 2020 139,964 $ 45.31 Granted 203,765 $ 28.29 Shares vested (including tax withholding) (a) (6,331) $ 38.49 Forfeited (4,841) $ 45.93 Balance, June 30, 2020 332,557 $ 35.00 (a) Represents the total participant target award. At June 30, 2020, there was $3.3 million of total unrecognized PSU expense, all of which is related to unvested awards. This compensation expense is expected to be recognized over the weighted-average remaining vesting period of 2.3 years for PSUs. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | 12. Commitments and Contingencies In March and April of 2019, three putative class action complaints were filed against National Association of Realtors (“NAR”), Realogy Holdings Corp., HomeServices of America, Inc, RE/MAX Holdings, and Keller Williams Realty, Inc. The first was filed on March 6, 2019, by plaintiff Christopher Moehrl in the Northern District of Illinois. The second was filed on April 15, 2019, by plaintiff Sawbill Strategies, Inc., also in the Northern District of Illinois. These two actions have now been consolidated. A third action was filed by plaintiffs Joshua Sitzer and four other individual plaintiffs in the Western District of Missouri. The complaints (collectively “Moehrl/Sitzer suits”) make substantially similar allegations and seek substantially similar relief. The plaintiffs allege that a NAR rule requires brokers to make a blanket, non-negotiable offer of buyer broker compensation when listing a property, resulting in inflated costs to sellers in violation of federal antitrust law. They further allege that certain defendants use their agreements with franchisees to require adherence to the NAR rule in violation of federal antitrust law. Amended complaints add allegations regarding buyer steering and non-disclosure of buyer-broker compensation to the buyer. Additionally, plaintiffs in the action filed by Sitzer et al allege violations of the Missouri Merchandising Practices Act. By agreement, RE/MAX, LLC was substituted for RE/MAX Holdings as defendant in the actions. Among other requested relief, plaintiffs seek damages against the defendants and an injunction enjoining defendants from requiring sellers to pay the buyer broker. The Company intends to vigorously defend against all of these claims. The Company may become involved in litigation or other legal proceedings concerning the same or similar allegations to those made in the Moehrl/Sitzer suits. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2020 | |
Segment Information | |
Segment Information | 13. Segment Information The Company operates under the following four operating segments: RE/MAX Franchising, Motto Franchising, Marketing Funds and booj. Due to quantitative insignificance, the booj operating segment does not meet the criteria of a reportable segment and is included in “Other”. Motto Franchising does not meet the quantitative significance test; however, management has chosen to report results for the segment as it believes it will be a key driver of future success for Holdings. Management evaluates the operating results of its segments based upon revenue and adjusted earnings before interest, the provision for income taxes, depreciation and amortization and other non-cash and non-recurring cash charges or other items (“Adjusted EBITDA”). The Company’s presentation of Adjusted EBITDA may not be comparable to similar measures used by other companies. Except for the adjustments identified below in arriving at Adjusted EBITDA, the accounting policies of the reportable segments are the same as those described in the Company’s 2019 Annual Report on Form 10-K. Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Continuing franchise fees (a) $ 15,795 $ 23,978 $ 38,672 $ 48,095 Annual dues 8,745 8,819 17,666 17,673 Broker fees (a) 10,426 13,459 19,870 22,047 Franchise sales and other revenue 3,405 4,129 12,068 12,394 Total RE/MAX Franchising 38,371 50,385 88,276 100,209 Continuing franchise fees 943 916 2,209 1,755 Franchise sales and other revenue 127 114 319 234 Total Motto Franchising 1,070 1,030 2,528 1,989 Marketing Funds fees (a) 11,765 18,060 29,287 36,832 Other 1,001 1,906 2,388 3,529 Total revenue $ 52,207 $ 71,381 $ 122,479 $ 142,559 (a) Continuing franchise fees and Marketing Funds fees declined primarily due to the temporary COVID-19 related financial support programs offered to franchisees. Broker fees declined primarily due to reductions in home sale transactions due to the COVID-19 pandemic. The following table presents a reconciliation of Adjusted EBITDA by segment to income before provision for income taxes (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Adjusted EBITDA: RE/MAX Franchising $ 19,318 $ 30,021 $ 40,049 $ 54,165 Adjusted EBITDA: Motto Franchising (741) (719) (1,319) (1,460) Adjusted EBITDA: Other 332 580 (282) 167 Adjusted EBITDA: Consolidated 18,909 29,882 38,448 52,872 Gain (loss) on sale or disposition of assets 11 16 22 (363) Equity-based compensation expense (2,747) (1,796) (4,933) (5,847) Acquisition-related expense (a) (328) (15) (894) (87) Gain on reduction in tax receivable agreement liability (500) — — — Fair value adjustments to contingent consideration (b) (150) (415) 355 (345) Interest income 34 342 303 662 Interest expense (2,187) (3,154) (4,869) (6,309) Depreciation and amortization (6,412) (5,541) (12,722) (11,099) Income before provision for income taxes $ 6,630 $ 19,319 $ 15,710 $ 29,484 (a) Acquisition-related expense includes legal, accounting, advisory and consulting fees incurred in connection with the acquisition and integration of acquired companies. (b) Fair value adjustments to contingent consideration include amounts recognized for changes in the estimated fair value of the contingent consideration liability. See Note 9, Fair Value Measurements for additional information. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying Consolidated Balance Sheet at December 31, 2019, which was derived from the audited consolidated financial statements at that date, and the unaudited interim condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying condensed consolidated financial statements are presented on a consolidated basis and include the accounts of Holdings and its consolidated subsidiaries. All significant intercompany accounts and transactions have been eliminated. In the opinion of management, the accompanying condensed consolidated financial statements reflect all normal and recurring adjustments necessary to present fairly the Company’s financial position as of June 30, 2020 and the results of its operations and comprehensive income, cash flows and changes in its stockholders’ equity for the three and six months ended June 30, 2020 and 2019. Interim results may not be indicative of full-year performance. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements within the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 Annual Report on Form 10-K”). Please refer to that document for a fuller discussion of all significant accounting policies. |
Use of Estimates | Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition The Company generates the substantial majority of its revenue from contracts with customers. The Company’s major streams of revenue are: ● Continuing franchise fees, which are fixed contractual fees paid monthly by regional franchise owners and franchisees based on the number of RE/MAX agents in the respective franchised region or office and the number of Motto offices. ● Annual dues, which are fees charged directly to RE/MAX agents. ● Broker fees, which are fees paid on real estate commissions when a RE/MAX agent assists a consumer to buy or sell a home. ● Marketing Funds fees, which are fixed contractual fees paid monthly by franchisees based on the number of RE/MAX agents in the respective franchised region or office or the number of Motto offices. ● Franchise sales and other franchise revenue, which consist of fees from initial sales of RE/MAX and Motto franchises, renewals of RE/MAX franchises, master franchise fees, preferred marketing arrangements, approved supplier programs and event-based revenue from training and other programs. Annual Dues The activity in the Company’s deferred revenue for annual dues is included in “Deferred revenue” and “Deferred revenue, net of current portion” on the Condensed Consolidated Balance Sheets, and consists of the following in aggregate (in thousands): Balance at New billings Revenue recognized (a) Balance at end Six Months Ended June 30, 2020 $ 15,982 $ 18,072 $ (17,666) $ 16,388 (a) Revenue recognized related to the beginning balance was $4.5 million and $11.2 million for the three and six months ended June 30, 2020, respectively. Franchise Sales The activity in the Company’s franchise sales deferred revenue accounts consists of the following (in thousands): Balance at New billings Revenue recognized (a) Balance at end Six Months Ended June 30, 2020 $ 25,884 $ 3,758 $ (4,909) $ 24,733 (a) Revenue recognized related to the beginning balance was $2.0 million and $4.6 million for the three and six months ended June 30, 2020, respectively. Commissions Related to Franchise Sales Commissions paid on franchise sales are recognized as an asset and amortized over the contract life of the franchise agreement. The activity in the Company’s capitalized contract costs for commissions (which are included in “other current assets” and “other assets, net of current portion” on the Condensed Consolidated Balance Sheets) consist of the following (in thousands): Balance at Expense Additions to contract Balance at end beginning of period recognized cost for new activity of period Six Months Ended June 30, 2020 $ 3,578 $ (711) $ 740 $ 3,607 Disaggregated Revenue In the following table, segment revenue is disaggregated by geographical area (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 U.S. $ 31,420 $ 41,689 $ 72,529 $ 83,424 Canada 4,625 5,893 9,935 11,242 Global 2,326 2,803 5,812 5,543 Total RE/MAX Franchising 38,371 50,385 88,276 100,209 U.S. 10,596 16,381 26,247 33,053 Canada 1,015 1,500 2,670 3,385 Global 154 179 370 394 Total Marketing Funds 11,765 18,060 29,287 36,832 Motto Franchising (a) 1,070 1,030 2,528 1,989 Other 1,001 1,906 2,388 3,529 Total $ 52,207 $ 71,381 $ 122,479 $ 142,559 (a) Revenue from the Motto Franchising segment is derived exclusively within the U.S. In the following table, segment revenue is disaggregated by Company-Owned or Independent Regions in the U.S., Canada and Global (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Company-Owned Regions $ 29,365 $ 39,823 $ 64,406 $ 75,730 Independent Regions 7,780 8,671 16,565 16,772 Global and Other 1,226 1,891 7,305 7,707 Total RE/MAX Franchising 38,371 50,385 88,276 100,209 Marketing Funds 11,765 18,060 29,287 36,832 Motto Franchising 1,070 1,030 2,528 1,989 Other 1,001 1,906 2,388 3,529 Total $ 52,207 $ 71,381 $ 122,479 $ 142,559 Certain items in the table above have been reclassified in the three and six months ended June 30, 2019 to conform with the current year presentation. Transaction Price Allocated to the Remaining Performance Obligations The following table includes estimated revenue by year, excluding certain other immaterial items, expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period (in thousands): Remaining 6 months of 2021 2022 2023 2024 2025 Thereafter Total Annual dues $ 12,258 $ 4,130 $ — $ — $ — $ — $ — $ 16,388 Franchise sales 3,631 6,274 4,894 3,464 2,178 1,109 3,183 24,733 Total $ 15,889 $ 10,404 $ 4,894 $ 3,464 $ 2,178 $ 1,109 $ 3,183 $ 41,121 |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash All cash held by the Marketing Funds is contractually restricted. The following table reconciles the amounts presented for cash, both unrestricted and restricted, in the Condensed Consolidated Balance Sheets to the amounts presented in the Condensed Consolidated Statements of Cash Flows (in thousands): June 30, December 31, 2020 2019 Cash and cash equivalents $ 84,545 $ 83,001 Restricted cash 14,752 20,600 Total cash, cash equivalents and restricted cash $ 99,297 $ 103,601 |
Services Provided to the Marketing Funds By RE/MAX Franchising | Services Provided to the Marketing Funds by RE/MAX Franchising RE/MAX Franchising charges the Marketing Funds for various services it performs. These services primarily comprise (a) building and maintaining agent marketing technology, including customer relationship management tools, the remax.com website, agent, office and team websites, and mobile apps, (b) dedicated employees focused on marketing campaigns, and (c) various administrative services including customer support of technology, accounting and legal. Because these costs are ultimately paid by the Marketing Funds, they do not impact the net income of Holdings as the Marketing Funds have no reported net income. Costs charged from RE/MAX Franchising to the Marketing Funds are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Technology development - operating $ 3,722 $ 1,199 $ 6,693 $ 2,164 Technology development - capital 116 1,529 760 2,464 Marketing staff and administrative services 983 1,024 2,211 2,049 Total $ 4,821 $ 3,752 $ 9,664 $ 6,677 |
Leases | Leases The Company leases corporate offices, a distribution center, billboards and certain equipment. As all franchisees are independently owned and operated, there are no leases recognized for any offices used by the Company’s franchisees. All of the Company’s material leases are classified as operating leases. The Company acts as the lessor for four sublease agreements on its corporate headquarters, consisting solely of operating leases. The Company has made an accounting policy election not to recognize right-of-use assets and lease liabilities that arise from any of its short-term leases. All leases with a term of 12 months or less at commencement, for which the Company is not reasonably certain to exercise available renewal options that would extend the lease term past 12 months, will be recognized on a straight-line basis over the lease term. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, which clarifies that implementation costs incurred by customers in cloud computing arrangements are deferred if they would be capitalized by customers in the software licensing arrangements under the internal-use software guidance. ASU 2018-15 also clarifies that any capitalized costs should not be recorded to “Depreciation and amortization” in the Consolidated Statements of Income. The Company adopted this standard effective January 1, 2020 prospectively to all new implementation costs incurred after adoption. The amendments of ASU 2018-15 did not have a significant impact on the Company’s consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) effective for the Company on January 1, 2020. This new guidance was applied on a prospective basis. The amendments of ASU 2018-13 did not have a significant impact on the Company’s consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, |
New Accounting Pronouncements Not Yet Adopted | New Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Commissions related to franchise sales | The activity in the Company’s capitalized contract costs for commissions (which are included in “other current assets” and “other assets, net of current portion” on the Condensed Consolidated Balance Sheets) consist of the following (in thousands): Balance at Expense Additions to contract Balance at end beginning of period recognized cost for new activity of period Six Months Ended June 30, 2020 $ 3,578 $ (711) $ 740 $ 3,607 |
Schedule of disaggregated revenue | In the following table, segment revenue is disaggregated by geographical area (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 U.S. $ 31,420 $ 41,689 $ 72,529 $ 83,424 Canada 4,625 5,893 9,935 11,242 Global 2,326 2,803 5,812 5,543 Total RE/MAX Franchising 38,371 50,385 88,276 100,209 U.S. 10,596 16,381 26,247 33,053 Canada 1,015 1,500 2,670 3,385 Global 154 179 370 394 Total Marketing Funds 11,765 18,060 29,287 36,832 Motto Franchising (a) 1,070 1,030 2,528 1,989 Other 1,001 1,906 2,388 3,529 Total $ 52,207 $ 71,381 $ 122,479 $ 142,559 (a) Revenue from the Motto Franchising segment is derived exclusively within the U.S. In the following table, segment revenue is disaggregated by Company-Owned or Independent Regions in the U.S., Canada and Global (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Company-Owned Regions $ 29,365 $ 39,823 $ 64,406 $ 75,730 Independent Regions 7,780 8,671 16,565 16,772 Global and Other 1,226 1,891 7,305 7,707 Total RE/MAX Franchising 38,371 50,385 88,276 100,209 Marketing Funds 11,765 18,060 29,287 36,832 Motto Franchising 1,070 1,030 2,528 1,989 Other 1,001 1,906 2,388 3,529 Total $ 52,207 $ 71,381 $ 122,479 $ 142,559 |
Schedule of transaction price allocated to the remaining performance obligations | The following table includes estimated revenue by year, excluding certain other immaterial items, expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period (in thousands): Remaining 6 months of 2021 2022 2023 2024 2025 Thereafter Total Annual dues $ 12,258 $ 4,130 $ — $ — $ — $ — $ — $ 16,388 Franchise sales 3,631 6,274 4,894 3,464 2,178 1,109 3,183 24,733 Total $ 15,889 $ 10,404 $ 4,894 $ 3,464 $ 2,178 $ 1,109 $ 3,183 $ 41,121 |
Schedule of reconciliation of cash, both unrestricted and restricted | The following table reconciles the amounts presented for cash, both unrestricted and restricted, in the Condensed Consolidated Balance Sheets to the amounts presented in the Condensed Consolidated Statements of Cash Flows (in thousands): June 30, December 31, 2020 2019 Cash and cash equivalents $ 84,545 $ 83,001 Restricted cash 14,752 20,600 Total cash, cash equivalents and restricted cash $ 99,297 $ 103,601 |
Schedule of cost charges to intersegment | Costs charged from RE/MAX Franchising to the Marketing Funds are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Technology development - operating $ 3,722 $ 1,199 $ 6,693 $ 2,164 Technology development - capital 116 1,529 760 2,464 Marketing staff and administrative services 983 1,024 2,211 2,049 Total $ 4,821 $ 3,752 $ 9,664 $ 6,677 |
Annual dues | |
Schedule of contract liability | The activity in the Company’s deferred revenue for annual dues is included in “Deferred revenue” and “Deferred revenue, net of current portion” on the Condensed Consolidated Balance Sheets, and consists of the following in aggregate (in thousands): Balance at New billings Revenue recognized (a) Balance at end Six Months Ended June 30, 2020 $ 15,982 $ 18,072 $ (17,666) $ 16,388 (a) Revenue recognized related to the beginning balance was $4.5 million and $11.2 million for the three and six months ended June 30, 2020, respectively. |
Franchise sales | |
Schedule of contract liability | The activity in the Company’s franchise sales deferred revenue accounts consists of the following (in thousands): Balance at New billings Revenue recognized (a) Balance at end Six Months Ended June 30, 2020 $ 25,884 $ 3,758 $ (4,909) $ 24,733 (a) Revenue recognized related to the beginning balance was $2.0 million and $4.6 million for the three and six months ended June 30, 2020, respectively. |
Non-controlling Interest (Table
Non-controlling Interest (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Noncontrolling Interest | |
Summary of Ownership of the Common Units | June 30, 2020 December 31, 2019 Shares Ownership % Shares Ownership % Non-controlling interest ownership of common units in RMCO 12,559,600 40.9 % 12,559,600 41.3 % Holdings outstanding Class A common stock (equal to Holdings common units in RMCO) 18,123,963 59.1 % 17,838,233 58.7 % Total common units in RMCO 30,683,563 100.0 % 30,397,833 100.0 % |
Reconciliation from Income Before Provision for Income Taxes to Net Income | The weighted average ownership percentages for the applicable reporting periods are used to calculate the “Net income attributable to RE/MAX Holdings, Inc.” A reconciliation of “Income before provision for income taxes” to “Net Income attributable to RE/MAX Holdings, Inc.” and “Net Income attributable to non-controlling interest” in the accompanying Condensed Consolidated Statements of Income for the periods indicated is detailed as follows (in thousands, except percentages): Three Months Ended June 30, 2020 2019 RE/MAX Non-controlling Total RE/MAX Non-controlling Total Weighted average ownership percentage of RMCO (a) 59.1 % 40.9 % 100.00 % 58.6 % 41.4 % 100.0 % Income before provision for income taxes (a) $ 3,895 $ 2,735 $ 6,630 $ 11,328 $ 7,991 $ 19,319 Provision for income taxes (b)(c) (406) (300) (706) (2,758) (428) (3,186) Net income $ 3,489 $ 2,435 $ 5,924 $ 8,570 $ 7,563 $ 16,133 Six Months Ended June 30, 2020 2019 RE/MAX Non-controlling Total RE/MAX Non-controlling Total Weighted average ownership percentage of RMCO (a) 59.0 % 41.0 % 100.0 % 58.6 % 41.4 % 100.0 % Income before provision for income taxes (a) $ 9,447 $ 6,263 $ 15,710 $ 17,286 $ 12,198 $ 29,484 Provision for income taxes (b)(c) (3,327) (1,169) (4,496) (4,307) (787) (5,094) Net income $ 6,120 $ 5,094 $ 11,214 $ 12,979 $ 11,411 $ 24,390 (a) The weighted average ownership percentage of RMCO differs from the allocation of income before provision for income taxes between Holdings and the non-controlling interest due to (i) certain relatively insignificant expenses and (ii) a gain on reduction in the tax receivable agreement liability attributable only to Holdings was recorded for the three months ended March 31, 2020 and subsequently removed for the three months ended June 30, 2020 . (b) The provision for income taxes attributable to Holdings is primarily comprised of U.S. federal and state income taxes on its proportionate share of the pass-through income from RMCO. It also includes Holdings’ share of taxes directly incurred by RMCO and its subsidiaries, related primarily to tax liabilities in certain foreign jurisdictions. For the six months ended June 30, 2020, the provision for income taxes attributable to Holdings also includes a decrease in the value of deferred tax assets. See Note 10, Income Taxes for additional information. (c) The provision for income taxes attributable to the non-controlling interest represents its share of taxes related primarily to tax liabilities in certain foreign jurisdictions directly incurred by RMCO or its subsidiaries. Otherwise, because RMCO is a pass-through entity, there is no U.S. federal and state income tax provision recorded on the non-controlling interest. |
Distributions Paid or Payable | Six Months Ended June 30, 2020 2019 Tax and other distributions $ 40 $ 2,031 Dividend distributions 5,526 5,275 Total distributions to non-controlling unitholders $ 5,566 $ 7,306 |
Earnings Per Share and Divide_2
Earnings Per Share and Dividends (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share and Dividends | |
Reconciliation of Numerator and Denominator used in Basic and Diluted EPS Calculations | The following is a reconciliation of the numerator and denominator used in the basic and diluted EPS calculations (in thousands, except shares and per share information): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Numerator Net income attributable to RE/MAX Holdings, Inc. $ 3,489 $ 8,570 $ 6,120 $ 12,979 Denominator for basic net income per share of Class A common stock Weighted average shares of Class A common stock outstanding 18,123,963 17,808,321 18,049,114 17,791,942 Denominator for diluted net income per share of Class A common stock Weighted average shares of Class A common stock outstanding 18,123,963 17,808,321 18,049,114 17,791,942 Add dilutive effect of the following: Restricted stock units 22,923 25,637 41,145 33,938 Weighted average shares of Class A common stock outstanding, diluted 18,146,886 17,833,958 18,090,259 17,825,880 Earnings per share of Class A common stock Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock, basic $ 0.19 $ 0.48 $ 0.34 $ 0.73 Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock, diluted $ 0.19 $ 0.48 $ 0.34 $ 0.73 |
Schedule of Dividends Declared and Paid Quarterly per Share | Dividends declared and paid during each quarter ended per share on all outstanding shares of Class A common stock were as follows (in thousands, except per share information): Six Months Ended June 30, 2020 2019 Quarter end declared Date paid Per share Amount paid Amount paid Date paid Per share Amount paid Amount paid March 31 March 18, 2020 $ 0.22 $ 3,986 $ 2,763 March 20, 2019 $ 0.21 $ 3,740 $ 2,638 June 30 June 2, 2020 0.22 3,987 2,763 May 29, 2019 0.21 3,739 2,637 $ 0.44 $ 7,973 $ 5,526 $ 0.42 $ 7,479 $ 5,275 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Marketing funds | |
Acquisitions | |
Schedule of Fair Value Of Assets at Acquisition Date | The following table summarizes the Company’s allocation of the purchase price to the fair value of assets acquired and liabilities assumed (in thousands): Restricted cash $ 28,495 Other current assets 8,472 Property and equipment 788 Other assets, net of current portion 126 Total assets acquired 37,881 Other current liabilities 37,881 Total liabilities assumed 37,881 Total acquisition price $ - |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Intangible Assets and Goodwill | |
Schedule of components of intangible assets | The following table provides the components of the Company’s intangible assets (in thousands, except weighted average amortization period in years): Weighted Average As of June 30, 2020 As of December 31, 2019 Amortization Initial Accumulated Net Initial Accumulated Net Period Cost Amortization Balance Cost Amortization Balance Franchise agreements 12.5 $ 180,867 $ (100,934) $ 79,933 $ 180,867 $ (93,197) $ 87,670 Other intangible assets: Software (a) 4.3 $ 36,946 $ (13,628) $ 23,318 $ 36,680 $ (9,653) $ 27,027 Trademarks 9.0 2,021 (1,148) 873 1,904 (1,037) 867 Non-compete agreements 4.5 3,700 (2,168) 1,532 3,700 (1,546) 2,154 Training materials 5.0 2,400 (880) 1,520 2,400 (640) 1,760 Other 3.8 810 (425) 385 800 (293) 507 Total other intangible assets 4.6 $ 45,877 $ (18,249) $ 27,628 $ 45,484 $ (13,169) $ 32,315 (a) As of June 30, 2020 and December 31, 2019, capitalized software development costs of $0.8 million and $ 10.5 million, respectively, were related to technology projects not yet complete and ready for their intended use and thus were not subject to amortization. |
Schedule of estimated future amortization of intangible assets, other than goodwill | The estimated future amortization expense for the next five years related to intangible assets is as follows (in thousands): As of June 30, 2020: Remainder of 2020 $ 17,556 2021 26,133 2022 19,516 2023 15,371 2024 12,916 $ 91,492 |
Schedule of changes to goodwill | The following table presents changes to goodwill (in thousands), by segment: RE/MAX Motto Franchising Total Balance, January 1, 2020 $ 147,238 $ 11,800 $ 159,038 Goodwill recognized from acquisitions (a) 2,927 — 2,927 Effect of changes in foreign currency exchange rates (151) — (151) Balance, June 30, 2020 $ 150,014 $ 11,800 $ 161,814 (a) The purpose of the First acquisition is to deliver technology solutions to RE/MAX franchisees and agents. As such, the Company allocated the goodwill arising from this acquisition to RE/MAX Franchising. The change in goodwill relates to updates to the initial purchase price allocation. |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accrued Liabilities. | |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following (in thousands): June 30, December 31, 2020 2019 Marketing Funds (a) $ 36,837 $ 39,672 Accrued payroll and related employee costs 2,384 11,900 Accrued taxes 1,317 2,451 Accrued professional fees 1,712 2,047 Other 2,192 4,093 $ 44,442 $ 60,163 (a) Consists primarily of liabilities recognized to reflect the contractual restriction that all funds collected in the Marketing Funds must be spent for designated purposes. See Note 2, Summary of Significant Accounting Policies for additional information. |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt | |
Schedule of debt | Debt, net of current portion, consists of the following (in thousands): June 30, December 31, 2020 2019 Senior Secured Credit Facility $ 226,188 $ 227,363 Other long-term financing (a) 216 362 Less unamortized debt issuance costs (1,034) (1,182) Less unamortized debt discount costs (753) (862) Less current portion (a) (2,566) (2,648) $ 222,051 $ 223,033 (a) Includes financing assumed with the acquisition of booj. As of June 30, 2020, the carrying value of this financing approximates the fair value. |
Schedule of Maturities of Debt | Maturities of debt are as follows (in thousands): Six Months Ended June 30, 2020 Remainder of 2020 $ 1,326 2021 2,414 2022 2,350 2023 220,314 $ 226,404 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Measurements | |
Liabilities measured at fair value on a recurring basis | A summary of the Company’s liabilities measured at fair value on a recurring basis is as follows (in thousands): As of June 30, 2020 As of December 31, 2019 Fair Value Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3 Liabilities Contingent consideration $ 4,650 $ — $ — $ 4,650 $ 5,005 $ — $ — $ 5,005 |
Reconciliation of all liabilities of Company measured at fair value on a recurring basis using significant unobservable inputs | The table below presents a reconciliation of this liability (in thousands): Balance at January 1, 2020 $ 5,005 Fair value adjustments (355) Balance at June 30, 2020 $ 4,650 |
Summary of carrying value and fair value of senior secured credit facility | The following table summarizes the carrying value and fair value of the Senior Secured Credit Facility (in thousands): June 30, 2020 December 31, 2019 Carrying Fair Value Carrying Fair Value Senior Secured Credit Facility $ 224,401 $ 218,271 $ 225,319 $ 227,363 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Employee Stock-Based Compensation Expense | Employee equity-based compensation expense, net of the amount capitalized in internally developed software, is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Expense from time-based awards (a) $ 2,358 $ 1,872 $ 4,495 $ 3,963 Expense from performance-based awards (a)(b) 389 (872) 470 250 Expense from bonus to be settled in shares (c) — 920 — 1,818 Equity-based compensation capitalized (a) — (124) (32) (184) Equity-based compensation expense $ 2,747 $ 1,796 $ 4,933 $ 5,847 (a) Includes expense recognized and costs capitalized in connection with the awards granted to booj employees and former owners at the time of acquisition. (b) Expense recognized for performance-based awards is re-assessed each quarter based on expectations of achievement against the performance conditions. The Company granted certain performance awards to booj employees that vested in 2019 and therefore have no comparable amounts in 2020. (c) In 2019, the Company revised its annual bonus plan so that a portion of the bonus for most employees would be settled in shares if the Company met certain performance metrics. The Company eliminated the 2020 corporate bonus as part of cost savings measures in connection with the COVID-19 pandemic. |
Time-based awards | |
Restricted Stock Units | RSUs Weighted average Balance, January 1, 2020 455,452 $ 46.15 Granted 296,000 $ 29.16 Shares vested (including tax withholding) (a) (163,028) $ 45.58 Forfeited (9,076) $ 41.09 Balance, June 30, 2020 579,348 $ 37.71 (a) Pursuant to the terms of the RE/MAX Holdings, Inc. 2013 Omnibus Incentive Plan, RSUs withheld by the Company for the payment of the employee's tax withholding related to an RSU vesting are added back to the pool of shares available for future awards. |
Performance-based awards | |
Restricted Stock Units | PSUs Weighted average Balance, January 1, 2020 139,964 $ 45.31 Granted 203,765 $ 28.29 Shares vested (including tax withholding) (a) (6,331) $ 38.49 Forfeited (4,841) $ 45.93 Balance, June 30, 2020 332,557 $ 35.00 (a) Represents the total participant target award. |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Information | |
Schedule of Revenue from External Customers By Segment | The following table presents revenue from external customers by segment (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Continuing franchise fees (a) $ 15,795 $ 23,978 $ 38,672 $ 48,095 Annual dues 8,745 8,819 17,666 17,673 Broker fees (a) 10,426 13,459 19,870 22,047 Franchise sales and other revenue 3,405 4,129 12,068 12,394 Total RE/MAX Franchising 38,371 50,385 88,276 100,209 Continuing franchise fees 943 916 2,209 1,755 Franchise sales and other revenue 127 114 319 234 Total Motto Franchising 1,070 1,030 2,528 1,989 Marketing Funds fees (a) 11,765 18,060 29,287 36,832 Other 1,001 1,906 2,388 3,529 Total revenue $ 52,207 $ 71,381 $ 122,479 $ 142,559 (a) Continuing franchise fees and Marketing Funds fees declined primarily due to the temporary COVID-19 related financial support programs offered to franchisees. Broker fees declined primarily due to reductions in home sale transactions due to the COVID-19 pandemic. |
Schedule of Revenue and Adjusted EBITDA of the Company's Reportable Segment | The following table presents a reconciliation of Adjusted EBITDA by segment to income before provision for income taxes (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Adjusted EBITDA: RE/MAX Franchising $ 19,318 $ 30,021 $ 40,049 $ 54,165 Adjusted EBITDA: Motto Franchising (741) (719) (1,319) (1,460) Adjusted EBITDA: Other 332 580 (282) 167 Adjusted EBITDA: Consolidated 18,909 29,882 38,448 52,872 Gain (loss) on sale or disposition of assets 11 16 22 (363) Equity-based compensation expense (2,747) (1,796) (4,933) (5,847) Acquisition-related expense (a) (328) (15) (894) (87) Gain on reduction in tax receivable agreement liability (500) — — — Fair value adjustments to contingent consideration (b) (150) (415) 355 (345) Interest income 34 342 303 662 Interest expense (2,187) (3,154) (4,869) (6,309) Depreciation and amortization (6,412) (5,541) (12,722) (11,099) Income before provision for income taxes $ 6,630 $ 19,319 $ 15,710 $ 29,484 (a) Acquisition-related expense includes legal, accounting, advisory and consulting fees incurred in connection with the acquisition and integration of acquired companies. (b) Fair value adjustments to contingent consideration include amounts recognized for changes in the estimated fair value of the contingent consideration liability. See Note 9, Fair Value Measurements for additional information. |
Business and Organization (Deta
Business and Organization (Details) | 6 Months Ended |
Jun. 30, 2020countryOfficeitem | |
Minimum | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |
Number of agents | item | 130,000 |
Number of offices | Office | 8,000 |
Number of countries in which entity operates | country | 110 |
REMAX | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |
Percentage of Company consisting of franchises | 100.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule of Deferred Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | |
Annual dues | ||
Disaggregation of Revenue [Line Items] | ||
Balance at beginning of period | $ 15,982 | |
New billings | 18,072 | |
Revenue recognized | (17,666) | |
Balance at the end of period | $ 16,388 | 16,388 |
Revenue recognized | 4,500 | 11,200 |
Franchise sales | ||
Disaggregation of Revenue [Line Items] | ||
Balance at beginning of period | 25,884 | |
New billings | 3,758 | |
Revenue recognized | (4,909) | |
Balance at the end of period | 24,733 | 24,733 |
Revenue recognized | $ 2,000 | $ 4,600 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Commissions Related to Franchise Sales (Details) - Commissions Related to Franchise Sales $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Capitalized Contract Cost [Line Items] | |
Balance at beginning of period | $ 3,578 |
Expense recognized | (711) |
Additions to contract cost for new activity | 740 |
Balance at end of period | $ 3,607 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Disaggregated revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 52,207 | $ 71,381 | $ 122,479 | $ 142,559 |
Company -owned Regions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 29,365 | 39,823 | 64,406 | 75,730 |
Independent Regions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 7,780 | 8,671 | 16,565 | 16,772 |
Global and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,226 | 1,891 | 7,305 | 7,707 |
RE/MAX Franchising | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 38,371 | 50,385 | 88,276 | 100,209 |
Total Marketing Funds | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 11,765 | 18,060 | 29,287 | 36,832 |
Motto Franchising | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,070 | 1,030 | 2,528 | 1,989 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,001 | 1,906 | 2,388 | 3,529 |
U.S. | RE/MAX Franchising | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 31,420 | 41,689 | 72,529 | 83,424 |
U.S. | Total Marketing Funds | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 10,596 | 16,381 | 26,247 | 33,053 |
Canada | RE/MAX Franchising | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,625 | 5,893 | 9,935 | 11,242 |
Canada | Total Marketing Funds | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,015 | 1,500 | 2,670 | 3,385 |
Global | RE/MAX Franchising | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 2,326 | 2,803 | 5,812 | 5,543 |
Global | Total Marketing Funds | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 154 | $ 179 | $ 370 | $ 394 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Transaction Price (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 41,121 |
Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | 16,388 |
Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | 24,733 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 15,889 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 12,258 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 3,631 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 10,404 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 4,130 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 6,274 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 4,894 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 4,894 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 3,464 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 3,464 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 2,178 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 2,178 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 1,109 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 1,109 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Annual Dues And Franchise Sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 3,183 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Annual dues | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Franchise sales | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation revenue | $ 3,183 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Cash, Cash Equivalents and Restricted Cash | ||||
Cash and cash equivalents | $ 84,545 | $ 83,001 | ||
Total cash, cash equivalents and restricted cash | 99,297 | 103,601 | $ 96,113 | $ 59,974 |
Marketing funds | ||||
Cash, Cash Equivalents and Restricted Cash | ||||
Cash and cash equivalents | 84,545 | 83,001 | ||
Restricted Cash | 14,752 | 20,600 | ||
Total cash, cash equivalents and restricted cash | $ 99,297 | $ 103,601 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Services Provided to Marketing Funds by RE/MAX Franchising (Details) - Marketing funds - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Cost charges | $ 4,821 | $ 3,752 | $ 9,664 | $ 6,677 |
Technology development - operating | ||||
Cost charges | 3,722 | 1,199 | 6,693 | 2,164 |
Technology development - capital | ||||
Cost charges | 116 | 1,529 | 760 | 2,464 |
Marketing staff and administrative services | ||||
Cost charges | $ 983 | $ 1,024 | $ 2,211 | $ 2,049 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Leases (Details) | 6 Months Ended |
Jun. 30, 2020lease | |
Leases | |
Number of franchisees' leases recognized by the Company | 0 |
Number of sublease agreements | 4 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Restatement Adjustment | ASU 2016-13 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect adjustment from change in accounting principle | $ 0 |
Non-controlling Interest - Owne
Non-controlling Interest - Ownership of common units in RMCO (Details) - RMCO, LLC - shares | Jun. 30, 2020 | Dec. 31, 2019 |
Shares | ||
Non-controlling interest ownership of common units in RMCO | 12,559,600 | 12,559,600 |
Holdings outstanding Class A common stock (equal to Holdings common units in RMCO) | 18,123,963 | 17,838,233 |
Total number of common stock units in RMCO | 30,683,563 | 30,397,833 |
Ownership Percentage | ||
Non-controlling interest ownership of common units in RMCO as a percentage | 40.90% | 41.30% |
Holdings outstanding Class A common stock (equal to Holdings common units in RMCO) | 59.10% | 58.70% |
Total percentage of common stock units | 100.00% | 100.00% |
Non-controlling Interest - Net
Non-controlling Interest - Net income reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Minority Interest [Line Items] | ||||||
Weighted average ownership percentage of controlling interest | 59.10% | 58.60% | 59.00% | 58.60% | ||
Weighted average ownership percentage of noncontrolling interest | 40.90% | 41.40% | 41.00% | 41.40% | ||
Total (as a percentage) | 100.00% | 100.00% | 100.00% | 100.00% | ||
Income before provision for income taxes attributable to RE/MAX Holdings, Inc. | $ 3,895 | $ 11,328 | $ 9,447 | $ 17,286 | ||
Income before provision for income taxes: Non-controlling interest | 2,735 | 7,991 | 6,263 | 12,198 | ||
Income before provision for income taxes | 6,630 | 19,319 | 15,710 | 29,484 | ||
Provision for income taxes attributable to RE/MAX Holdings, Inc. | (406) | (2,758) | (3,327) | (4,307) | ||
Provision for income taxes: Non-controlling interest | (300) | (428) | (1,169) | (787) | ||
Provision for income taxes | (706) | (3,186) | (4,496) | (5,094) | ||
Net income attributable to RE/MAX Holdings, Inc. | 3,489 | 8,570 | 6,120 | 12,979 | ||
Net income: Non-controlling interest | 2,435 | 7,563 | 5,094 | 11,411 | ||
Net income | 5,924 | $ 5,290 | 16,133 | $ 8,257 | 11,214 | 24,390 |
RMCO, LLC | ||||||
Minority Interest [Line Items] | ||||||
Net income attributable to RE/MAX Holdings, Inc. | 3,489 | 8,570 | 6,120 | 12,979 | ||
Net income: Non-controlling interest | 2,435 | 7,563 | 5,094 | 11,411 | ||
Net income | $ 5,924 | $ 16,133 | $ 11,214 | $ 24,390 |
Non-controlling Interest - Dist
Non-controlling Interest - Distributions Paid or Payable (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Tax and other distributions | ||
Dividends Payable [Line Items] | ||
Distributions paid or payable to or on behalf of non-controlling unitholders | $ 40 | $ 2,031 |
Dividend distributions | ||
Dividends Payable [Line Items] | ||
Distributions paid or payable to or on behalf of non-controlling unitholders | 5,526 | 5,275 |
Quarterly distribution | ||
Dividends Payable [Line Items] | ||
Distributions paid or payable to or on behalf of non-controlling unitholders | $ 5,566 | $ 7,306 |
Earnings Per Share and Divide_3
Earnings Per Share and Dividends - Reconciliation of the numerator and denominator used in basic and diluted EPS calculations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Numerator | ||||
Net income attributable to RE/MAX Holdings, Inc. | $ 3,489 | $ 8,570 | $ 6,120 | $ 12,979 |
Earnings per share of Class A common stock | ||||
Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock, basic | $ 0.19 | $ 0.48 | $ 0.34 | $ 0.73 |
Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock, diluted | $ 0.19 | $ 0.48 | $ 0.34 | $ 0.73 |
RMCO, LLC | ||||
Numerator | ||||
Net income attributable to RE/MAX Holdings, Inc. | $ 3,489 | $ 8,570 | $ 6,120 | $ 12,979 |
Common Class A | ||||
Denominator for basic net income per share of Class A common stock | ||||
Weighted average shares of Class A common stock outstanding | 18,123,963 | 17,808,321 | 18,049,114 | 17,791,942 |
Denominator for diluted net income per share of Class A common stock | ||||
Weighted average shares of Class A common stock outstanding | 18,123,963 | 17,808,321 | 18,049,114 | 17,791,942 |
Add dilutive effect of the following: | ||||
Weighted average shares of Class A common stock outstanding, diluted | 18,146,886 | 17,833,958 | 18,090,259 | 17,825,880 |
Earnings per share of Class A common stock | ||||
Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock, basic | $ 0.19 | $ 0.48 | $ 0.34 | $ 0.73 |
Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock, diluted | $ 0.19 | $ 0.48 | $ 0.34 | $ 0.73 |
Employee Stock Option | Common Class A | ||||
Denominator for basic net income per share of Class A common stock | ||||
Weighted average shares of Class A common stock outstanding | 18,123,963 | 17,808,321 | 18,049,114 | 17,791,942 |
Denominator for diluted net income per share of Class A common stock | ||||
Weighted average shares of Class A common stock outstanding | 18,123,963 | 17,808,321 | 18,049,114 | 17,791,942 |
Restricted Stock Units (RSUs) | ||||
Add dilutive effect of the following: | ||||
Restricted stock units | 22,923 | 25,637 | 41,145 | 33,938 |
Restricted Stock Units (RSUs) | Common Class A | ||||
Add dilutive effect of the following: | ||||
Weighted average shares of Class A common stock outstanding, diluted | 18,146,886 | 17,833,958 | 18,090,259 | 17,825,880 |
Earnings Per Share and Divide_4
Earnings Per Share and Dividends - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 05, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Dividends Payable [Line Items] | |||||||
Dividends to Class A common stockholders | $ 3,987 | $ 3,986 | $ 3,739 | $ 3,740 | |||
Common Class A | |||||||
Dividends Payable [Line Items] | |||||||
Cash dividends declared per share of Class A common stock | $ 0.22 | $ 0.21 | $ 0.44 | $ 0.42 | |||
Quarterly dividend | |||||||
Dividends Payable [Line Items] | |||||||
Distributions declared to non-controlling unitholders | $ 2,763 | $ 2,763 | $ 2,637 | $ 2,638 | $ 5,526 | $ 5,275 | |
Quarterly dividend | Common Class A | |||||||
Dividends Payable [Line Items] | |||||||
Cash dividends declared per share of Class A common stock | $ 0.22 | $ 0.22 | $ 0.21 | $ 0.21 | $ 0.44 | $ 0.42 | |
Dividends to Class A common stockholders | $ 3,987 | $ 3,986 | $ 3,739 | $ 3,740 | $ 7,973 | $ 7,479 | |
Quarterly dividend | Common Class A | Subsequent Event | |||||||
Dividends Payable [Line Items] | |||||||
Cash dividends declared per share of Class A common stock | $ 0.22 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | Dec. 16, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | Jan. 01, 2019 |
Purchase Price Allocation | ||||
Goodwill | $ 161,814 | $ 159,038 | ||
First Leads | ||||
Business Acquisition [Line Items] | ||||
Cash consideration | $ 15,000 | |||
Marketing funds | ||||
Purchase Price Allocation | ||||
Restricted cash | $ 28,495 | |||
Other current assets | 8,472 | |||
Property and equipment | 788 | |||
Other assets, net of current portion | 126 | |||
Total assets acquired | 37,881 | |||
Other current liabilities | 37,881 | |||
Total liabilities assumed | $ 37,881 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Components of Company's Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Finite Lived Intangible Assets [Line Items] | |||||
Net Balance | $ 79,933 | $ 79,933 | $ 87,670 | ||
Amortization expense | 6,000 | $ 5,100 | 11,800 | $ 10,300 | |
Franchise agreements | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Initial Cost | 180,867 | 180,867 | 180,867 | ||
Accumulated Amortization | (100,934) | (100,934) | (93,197) | ||
Net Balance | 79,933 | $ 79,933 | 87,670 | ||
Franchise agreements | Weighted Average | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 12 years 6 months | ||||
Other intangible assets | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Initial Cost | 45,877 | $ 45,877 | 45,484 | ||
Accumulated Amortization | (18,249) | (18,249) | (13,169) | ||
Net Balance | 27,628 | $ 27,628 | 32,315 | ||
Other intangible assets | Weighted Average | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 4 years 7 months 6 days | ||||
Software | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Initial Cost | 36,946 | $ 36,946 | 36,680 | ||
Accumulated Amortization | (13,628) | (13,628) | (9,653) | ||
Net Balance | 23,318 | $ 23,318 | 27,027 | ||
Software | Weighted Average | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 4 years 3 months 18 days | ||||
Trademarks | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Initial Cost | 2,021 | $ 2,021 | 1,904 | ||
Accumulated Amortization | (1,148) | (1,148) | (1,037) | ||
Net Balance | 873 | $ 873 | 867 | ||
Trademarks | Weighted Average | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 9 years | ||||
Software Development | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Capitalized software development costs | 800 | $ 800 | 10,500 | ||
Non-compete agreements | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Initial Cost | 3,700 | 3,700 | 3,700 | ||
Accumulated Amortization | (2,168) | (2,168) | (1,546) | ||
Net Balance | 1,532 | $ 1,532 | 2,154 | ||
Non-compete agreements | Weighted Average | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 4 years 6 months | ||||
Training materials | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Initial Cost | 2,400 | $ 2,400 | 2,400 | ||
Accumulated Amortization | (880) | (880) | (640) | ||
Net Balance | 1,520 | $ 1,520 | 1,760 | ||
Training materials | Weighted Average | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 5 years | ||||
Other | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Initial Cost | 810 | $ 810 | 800 | ||
Accumulated Amortization | (425) | (425) | (293) | ||
Net Balance | $ 385 | $ 385 | $ 507 | ||
Other | Weighted Average | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 3 years 9 months 18 days |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Estimated Future Amortization of Intangible Assets, Other Than Goodwill (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |
Remainder of 2020 | $ 17,556 |
2021 | 26,133 |
2022 | 19,516 |
2023 | 15,371 |
2024 | 12,916 |
Estimated future amortization expense over next five years | $ 91,492 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Schedule of Changes in Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Changes to goodwill | |
Beginning Balance | $ 159,038 |
Goodwill recognized from acquisitions | 2,927 |
Effect of changes in foreign currency exchange rates | (151) |
Ending Balance | 161,814 |
RE/MAX Franchising | |
Changes to goodwill | |
Beginning Balance | 147,238 |
Goodwill recognized from acquisitions | 2,927 |
Effect of changes in foreign currency exchange rates | (151) |
Ending Balance | 150,014 |
Motto Franchising | |
Changes to goodwill | |
Beginning Balance | 11,800 |
Goodwill recognized from acquisitions | 0 |
Effect of changes in foreign currency exchange rates | 0 |
Ending Balance | $ 11,800 |
Accrued Liabilities - Schedule
Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accrued Liabilities. | ||
Marketing Funds | $ 36,837 | $ 39,672 |
Accrued payroll and related employee costs | 2,384 | 11,900 |
Accrued taxes | 1,317 | 2,451 |
Accrued professional fees | 1,712 | 2,047 |
Other | 2,192 | 4,093 |
Accrued liabilities | $ 44,442 | $ 60,163 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Senior Secured Credit Facility | $ 226,404 | |
Less current portion | (2,566) | $ (2,648) |
Debt, net of current portion | 222,051 | 223,033 |
Senior Secured Credit Facility | ||
Debt Instrument [Line Items] | ||
Senior Secured Credit Facility | 226,188 | 227,363 |
Other long-term financing | 216 | 362 |
Less unamortized debt issuance costs | (1,034) | (1,182) |
Less unamortized debt discount costs | (753) | (862) |
Less current portion | (2,566) | (2,648) |
Debt, net of current portion | $ 222,051 | $ 223,033 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Debt (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Debt | |
Remainder of 2020 | $ 1,326 |
2021 | 2,414 |
2022 | 2,350 |
2023 | 220,314 |
Long term debt | $ 226,404 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 3.50% | |
Term loan | Senior Secured Credit Facility | ||
Debt Instrument [Line Items] | ||
Notes Payable to Bank | $ 235 | |
Revolving loan facility | ||
Debt Instrument [Line Items] | ||
Amounts drawn on line of credit | $ 0 | |
Revolving loan facility | Senior Secured Credit Facility | ||
Debt Instrument [Line Items] | ||
Credit facility, borrowing capacity | $ 10 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020USD ($)item | Dec. 31, 2019USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | $ 4,650 | $ 5,005 |
Percentage of gross revenues to be paid yearly | 8.00% | |
Franchise Sale Reduction, Percentage | 10 | |
Change in discount rate | 1.00% | |
Business Combination, Contingent Consideration, Liability, Measurement Input [Extensible List] | us-gapp:MeasurementInputDiscountRateMember | |
Business Combination, Contingent Consideration, Liability, Measurement Input | 15 | |
Measured on a recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | $ 4,650 | 5,005 |
Level 1 | Measured on a recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | 0 | 0 |
Level 2 | Measured on a recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | 0 | 0 |
Level 3 | Measured on a recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | 4,650 | $ 5,005 |
Ten Percent Reduction In Franchise Sales [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred revenue, current and noncurrent | 300 | |
One Percent Change To Discount Rate [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred revenue, current and noncurrent | $ 100 | |
Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assumed number of franchises sold annually | item | 50 | |
Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assumed number of franchises sold annually | item | 80 | |
Weighted Average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assumed number of franchises sold annually | item | 70 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Assets and Liabilities Measured Using Significant Unobservable Inputs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Balance at Beginning | $ 5,005 | |||
Fair value adjustment | $ 150 | $ 415 | (355) | $ 345 |
Balance at Ending | 4,650 | 4,650 | ||
Measured on a recurring basis | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Balance at Beginning | 5,005 | |||
Balance at Ending | 4,650 | 4,650 | ||
Level 3 | Measured on a recurring basis | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Balance at Beginning | 5,005 | |||
Balance at Ending | $ 4,650 | $ 4,650 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Senior Secured Credit Facility (Details) - Senior Secured Credit Facility - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Carrying amounts | ||
Debt Instrument [Line Items] | ||
Long term debt, carrying amount | $ 224,401 | $ 225,319 |
Level 2 | Estimated fair value | ||
Debt Instrument [Line Items] | ||
Long term debt, fair value | $ 218,271 | $ 227,363 |
Equity-Based Compensation (Deta
Equity-Based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Employee stock-based compensation expense | ||||
Equity-based compensation capitalized (a) | $ 0 | $ (124) | $ (32) | $ (184) |
Equity-based compensation expense | 2,747 | 1,796 | 4,933 | 5,847 |
Time-based awards | ||||
Employee stock-based compensation expense | ||||
Equity-based compensation expense | $ 2,358 | 1,872 | $ 4,495 | 3,963 |
Restricted Stock Units | ||||
Nonvested at beginning of period | 455,452 | |||
Granted | 296,000 | |||
Shares vested | (163,028) | |||
Forfeited | (9,076) | |||
Nonvested at end of period | 579,348 | 579,348 | ||
Nonvested at beginning of period, Weighted average grant date fair value per share | $ 46.15 | |||
Granted, Weighted average grant date fair value per share | 29.16 | |||
Shares vested, Weighted average grant date fair value per share | 45.58 | |||
Forfeited, Weighted average grant date fair value per share | 41.09 | |||
Nonvested at end of period, Weighted average grant date fair value per share | $ 37.71 | $ 37.71 | ||
Unrecognized compensation cost | $ 16,300 | $ 16,300 | ||
Period for recognition of RSU compensation expense | 2 years | |||
Performance-based awards | ||||
Employee stock-based compensation expense | ||||
Equity-based compensation expense | $ 389 | (872) | $ 470 | 250 |
Restricted Stock Units | ||||
Nonvested at beginning of period | 139,964 | |||
Granted | 203,765 | |||
Shares vested | (6,331) | |||
Forfeited | (4,841) | |||
Nonvested at end of period | 332,557 | 332,557 | ||
Nonvested at beginning of period, Weighted average grant date fair value per share | $ 45.31 | |||
Granted, Weighted average grant date fair value per share | 28.29 | |||
Shares vested, Weighted average grant date fair value per share | 38.49 | |||
Forfeited, Weighted average grant date fair value per share | 45.93 | |||
Nonvested at end of period, Weighted average grant date fair value per share | $ 35 | $ 35 | ||
Unrecognized compensation cost | $ 3,300 | $ 3,300 | ||
Period for recognition of RSU compensation expense | 2 years 3 months 18 days | |||
Bonus settled in shares | ||||
Employee stock-based compensation expense | ||||
Equity-based compensation expense | $ 0 | $ 920 | $ 0 | $ 1,818 |
Segment Information (Details)
Segment Information (Details) | 6 Months Ended |
Jun. 30, 2020segment | |
Segment Information | |
Number of Operating Segments | 4 |
Segment Information - Revenue (
Segment Information - Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting Information | ||||
Total revenue | $ 52,207 | $ 71,381 | $ 122,479 | $ 142,559 |
RE/MAX Franchising | ||||
Segment Reporting Information | ||||
Total revenue | 38,371 | 50,385 | 88,276 | 100,209 |
Motto Franchising | ||||
Segment Reporting Information | ||||
Total revenue | 1,070 | 1,030 | 2,528 | 1,989 |
Marketing Funds fees | ||||
Segment Reporting Information | ||||
Total revenue | 11,765 | 18,060 | 29,287 | 36,832 |
Other | ||||
Segment Reporting Information | ||||
Total revenue | 1,001 | 1,906 | 2,388 | 3,529 |
Continuing franchise fees | ||||
Segment Reporting Information | ||||
Total revenue | 16,738 | 24,894 | 40,881 | 49,850 |
Continuing franchise fees | RE/MAX Franchising | ||||
Segment Reporting Information | ||||
Total revenue | 15,795 | 23,978 | 38,672 | 48,095 |
Continuing franchise fees | Motto Franchising | ||||
Segment Reporting Information | ||||
Total revenue | 943 | 916 | 2,209 | 1,755 |
Annual dues | ||||
Segment Reporting Information | ||||
Total revenue | 8,745 | 8,819 | 17,666 | 17,673 |
Annual dues | RE/MAX Franchising | ||||
Segment Reporting Information | ||||
Total revenue | 8,745 | 8,819 | 17,666 | 17,673 |
Broker fees | ||||
Segment Reporting Information | ||||
Total revenue | 10,426 | 13,459 | 19,870 | 22,047 |
Broker fees | RE/MAX Franchising | ||||
Segment Reporting Information | ||||
Total revenue | 10,426 | 13,459 | 19,870 | 22,047 |
Franchise sales and other revenue | ||||
Segment Reporting Information | ||||
Total revenue | 4,533 | 6,149 | 14,775 | 16,157 |
Franchise sales and other revenue | RE/MAX Franchising | ||||
Segment Reporting Information | ||||
Total revenue | 3,405 | 4,129 | 12,068 | 12,394 |
Franchise sales and other revenue | Motto Franchising | ||||
Segment Reporting Information | ||||
Total revenue | $ 127 | $ 114 | $ 319 | $ 234 |
Segment Information - Reconcili
Segment Information - Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated | ||||
Adjusted EBITDA | $ 18,909 | $ 29,882 | $ 38,448 | $ 52,872 |
Gain (loss) on sale or disposition of assets | 11 | 16 | 22 | (363) |
Equity-based compensation expense | (2,747) | (1,796) | (4,933) | (5,847) |
Acquisition-related expense | (328) | (15) | (894) | (87) |
Gain on reduction in tax receivable agreement liability | (500) | 0 | 0 | 0 |
Fair value adjustments to contingent consideration | (150) | (415) | 355 | (345) |
Interest income | 34 | 342 | 303 | 662 |
Interest expense | (2,187) | (3,154) | (4,869) | (6,309) |
Depreciation and amortization | (6,412) | (5,541) | (12,722) | (11,099) |
Income before provision for income taxes | 6,630 | 19,319 | 15,710 | 29,484 |
RE/MAX Franchising | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated | ||||
Adjusted EBITDA | 19,318 | 30,021 | 40,049 | 54,165 |
Motto Franchising | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated | ||||
Adjusted EBITDA | (741) | (719) | (1,319) | (1,460) |
Other | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated | ||||
Adjusted EBITDA | $ 332 | $ 580 | $ (282) | $ 167 |