Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 1-May-15 | |
Document And Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | RMAX | |
Entity Registrant Name | RE/MAX Holdings, Inc. | |
Entity Central Index Key | 1581091 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Accelerated Filer | |
Common Class A | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 12,233,041 | |
Common Class B | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $114,546,000 | $107,199,000 |
Escrow cash - restricted | 75,000 | 693,000 |
Accounts and notes receivable, current portion, less allowances of $4,831 and $4,495, respectively | 18,259,000 | 16,641,000 |
Accounts receivable from affiliates | 231,000 | |
Income taxes receivable | 1,214,000 | 765,000 |
Assets held for sale | 1,179,000 | |
Other current assets | 3,674,000 | 5,237,000 |
Total current assets | 138,947,000 | 130,766,000 |
Property and equipment, net of accumulated depreciation of $19,495 and $19,993, respectively | 2,788,000 | 2,661,000 |
Franchise agreements, net of accumulated amortization of $90,721 and $87,330, respectively | 72,114,000 | 75,505,000 |
Other intangible assets, net of accumulated amortization of $8,705 and $8,550, respectively | 2,859,000 | 2,725,000 |
Goodwill | 72,169,000 | 72,463,000 |
Deferred tax assets, net | 66,392,000 | 66,903,000 |
Investments in equity method investees | 3,698,000 | 3,693,000 |
Debt issuance costs, net | 1,756,000 | 1,896,000 |
Other assets | 1,779,000 | 1,715,000 |
Total assets | 362,502,000 | 358,327,000 |
Current liabilities: | ||
Accounts payable | 1,052,000 | 561,000 |
Accounts payable to affiliates | 1,186,000 | 1,114,000 |
Escrow liabilities | 75,000 | 693,000 |
Accrued liabilities | 8,218,000 | 9,380,000 |
Income taxes and tax distributions payable | 92,000 | 189,000 |
Dividends and other distributions payable | 50,213,000 | |
Deferred revenue and deposits | 18,401,000 | 17,142,000 |
Current portion of debt | 12,725,000 | 9,460,000 |
Current portion of payable pursuant to tax receivable agreements | 3,914,000 | 3,914,000 |
Liabilities held for sale | 1,743,000 | |
Other current liabilities | 340,000 | 211,000 |
Total current liabilities | 97,959,000 | 42,664,000 |
Debt, net of current portion | 190,605,000 | 202,213,000 |
Payable pursuant to tax receivable agreements, net of current portion | 63,504,000 | 63,504,000 |
Deferred tax liabilities, net | 178,000 | 190,000 |
Other liabilities, net of current portion | 10,458,000 | 10,473,000 |
Total liabilities | 362,704,000 | 319,044,000 |
Commitments and contingencies | ||
Stockholders' (deficit) equity: | ||
Additional paid-in capital | 244,078,000 | 241,882,000 |
(Accumulated deficit) retained earnings | -4,591,000 | 12,041,000 |
Accumulated other comprehensive income | 353,000 | 886,000 |
Total stockholders' equity attributable to RE/MAX Holdings, Inc. | 239,841,000 | 254,810,000 |
Non-controlling interest | -240,043,000 | -215,527,000 |
Total stockholders' (deficit) equity | -202,000 | 39,283,000 |
Total liabilities and stockholders' equity | 362,502,000 | 358,327,000 |
Common Class A | ||
Stockholders' (deficit) equity: | ||
Common stock | 1,000 | 1,000 |
Total stockholders' (deficit) equity | $1,000 | $1,000 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Allowance for accounts receivable | $4,831 | $4,495 |
Accumulated depreciation, property and equipment | 19,495 | 19,993 |
Accumulated amortization, intangible assets | 8,705 | 8,550 |
Franchise Agreements | ||
Accumulated amortization, intangible assets | 90,721 | 87,330 |
Other Intangible Assets | ||
Accumulated amortization, intangible assets | $8,705 | $8,550 |
Common Class A | ||
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 180,000,000 | 180,000,000 |
Common stock, shares issued | 12,031,609 | 11,768,041 |
Common stock, shares outstanding | 12,031,609 | 11,768,041 |
Common Class B | ||
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 1,000 | 1,000 |
Common stock, shares issued | 1 | 1 |
Common stock, shares outstanding | 1 | 1 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income (USD $) | 3 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Revenue: | ||||
Continuing franchise fees | $17,660 | $17,704 | ||
Annual dues | 7,802 | 7,506 | ||
Broker fees | 6,420 | 5,558 | ||
Franchise sales and other franchise revenue | 8,426 | 7,909 | ||
Brokerage revenue | 3,899 | 3,203 | ||
Total revenue | 44,207 | [1] | 41,880 | [1] |
Operating expenses: | ||||
Selling, operating and administrative expenses | 25,071 | 25,287 | ||
Depreciation and amortization | 3,811 | 3,938 | ||
Loss (gain) on sale or disposition of assets, net | 2 | -1 | ||
Total operating expenses | 28,884 | 29,224 | ||
Operating income | 15,323 | 12,656 | ||
Other expenses, net: | ||||
Interest expense | -2,809 | -2,466 | ||
Interest income | 67 | 81 | ||
Foreign currency transaction losses | -1,421 | -529 | ||
Loss on early extinguishment of debt | -94 | |||
Equity in earnings (losses) of investees | 212 | -59 | ||
Total other expenses, net | -4,045 | -2,973 | ||
Income before provision for income taxes | 11,278 | 9,683 | ||
Provision for income taxes | -2,148 | -1,885 | ||
Net income | 9,130 | 7,798 | ||
Less: net income attributable to non-controlling interest | 6,379 | 5,390 | ||
Net income attributable to RE/MAX Holdings, Inc. | $2,751 | $2,408 | ||
Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock | ||||
Basic | $0.23 | $0.21 | ||
Diluted | $0.22 | $0.20 | ||
Weighted average shares of Class A common stock outstanding | ||||
Basic | 11,817,605 | 11,607,971 | ||
Diluted | 12,293,505 | 12,254,474 | ||
Cash dividends declared per share of Class A common stock | $1.63 | $0.06 | ||
[1] | Transactions between the Real Estate Franchise Services and the Brokerages reportable segments are eliminated in consolidation. Revenues for the Real Estate Franchise Services reportable segment include intercompany amounts paid from the Companybs brokerage services business of $432,000 and $422,000 for the three months ended March 31, 2015 and 2014, respectively. Such amounts are eliminated in the Brokerages reportable segment |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income | $9,130 | $7,798 |
Change in cumulative translation adjustment | -533 | -177 |
Other comprehensive loss | -533 | -177 |
Comprehensive income | 8,597 | 7,621 |
Less: comprehensive income attributable to non-controlling interest | 6,059 | 5,283 |
Comprehensive income attributable to RE/MAX Holdings, Inc. | $2,538 | $2,338 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statement of Stockholders' Equity (USD $) | Total | Common Class A | Common Class B | Additional paid-in capital | (Accumulated deficit) retained earnings | Accumulated other comprehensive income | Non-controlling interest | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |||
Beginning balance, Value at Dec. 31, 2014 | $39,283,000 | $1,000 | $241,882,000 | $12,041,000 | $886,000 | ($215,527,000) | ||
Beginning balance, Shares at Dec. 31, 2014 | 11,768,041 | 1 | ||||||
Net income | 9,130,000 | 2,751,000 | 6,379,000 | |||||
Distributions paid and payable to non-controlling unitholders | -30,895,000 | -30,895,000 | ||||||
Equity-based compensation | 142,000 | 142,000 | ||||||
Dividends payable to Class A common stockholders | -19,383,000 | -1,500,000 | -19,383,000 | |||||
Change in accumulated other comprehensive income | -533,000 | -533,000 | ||||||
Exercise of stock options, Value | 949,000 | 949,000 | ||||||
Exercise of stock options, Shares | 263,568 | [1] | 263,568 | |||||
Excess tax benefit realized on exercise of stock options | 1,105,000 | 1,105,000 | ||||||
Ending balance, Value at Mar. 31, 2015 | ($202,000) | $1,000 | $244,078,000 | ($4,591,000) | $353,000 | ($240,043,000) | ||
Ending balance, Shares at Mar. 31, 2015 | 12,031,609 | 1 | ||||||
[1] | Cash received from stock option exercises for the three months ended March 31, 2015 was $937,000. The Company recorded a corporate income tax benefit relating to the options exercised during the three months ended March 31, 2015 of $1,105,000 in bAdditional paid-in capitalb in the accompanying Condensed Consolidated Balance Sheets and Condensed Consolidated Statement of Stockholdersb Equity. |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Net income | $9,130 | $7,798 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 3,811 | 3,938 |
Bad debt expense | 205 | 201 |
Loss on early extinguishment of debt | 94 | |
Equity-based compensation | 142 | 258 |
Non-cash interest expense | 97 | 89 |
Other | 683 | 650 |
Changes in operating assets and liabilities: | ||
Accounts and notes receivable, current portion | -2,121 | -1,898 |
Advances from/to affiliates | 326 | 72 |
Other current and noncurrent assets | 1,128 | 1,304 |
Other current and noncurrent liabilities | -626 | -333 |
Deferred revenue and deposits | 1,550 | 416 |
Net cash provided by operating activities | 14,419 | 12,495 |
Cash flows from investing activities: | ||
Purchases of property, equipment and software | -335 | -452 |
Proceeds from sale of property and equipment | 10 | |
Capitalization of trademark costs | -23 | -25 |
Net cash used in investing activities | -348 | -477 |
Cash flows from financing activities: | ||
Payments on debt | -7,840 | -575 |
Debt amendment costs | -555 | |
Distributions to non-controlling unitholders | -65 | -2,552 |
Payments on capital lease obligations | -71 | -54 |
Proceeds from exercise of stock options | 937 | |
Excess tax benefit realized on exercise of stock options | 1,105 | |
Net cash used in financing activities | -6,489 | -3,181 |
Effect of exchange rate changes on cash | -235 | -43 |
Net increase in cash and cash equivalents | 7,347 | 8,794 |
Cash and cash equivalents, beginning of year | 107,199 | 88,375 |
Cash and cash equivalents, end of period | 114,546 | 97,169 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest and for debt amendment costs | 2,712 | 2,324 |
Cash paid for income taxes | 846 | 1,097 |
Schedule of non-cash investing and financing activities: | ||
Capital leases for property and equipment | 412 | 18 |
Increase in accounts payable for capitalization of trademark costs and purchases of property and equipment | 148 | 60 |
Distributions payable to non-controlling unitholders | 30,830 | 6,100 |
Dividends payable to Class A common stockholders | 19,383 | 725 |
Increase in accounts and notes receivables from exercise of stock options | $12 |
Business_and_Organization
Business and Organization | 3 Months Ended |
Mar. 31, 2015 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Business and Organization | 1. Business and Organization |
RE/MAX Holdings, Inc. (“RE/MAX Holdings”) was formed as a Delaware corporation on June 25, 2013 and was capitalized on July 8, 2013. On October 7, 2013, RE/MAX Holdings completed an initial public offering (the “IPO”) of 11,500,000 shares of Class A common stock at a public offering price of $22.00 per share. A portion of the proceeds received by RE/MAX Holdings from the IPO was used to acquire the net business assets of HBN, Inc. (“HBN”) and Tails, Inc. (“Tails”) in the Southwest and Central Atlantic regions of the United States (“U.S.”), respectively, which were subsequently contributed to RMCO, LLC and subsidiaries (“RMCO”), and the remaining proceeds were used to purchase common membership units in RMCO. After completion of the IPO, RE/MAX Holdings owned 39.56% of the common membership units in RMCO. As of March 31, 2015, RE/MAX Holdings owns 40.42% of the common membership units in RMCO. RE/MAX Holdings’ only business is to act as the sole manager of RMCO and, in that capacity, RE/MAX Holdings operates and controls all of the business and affairs of RMCO. As a result, RE/MAX Holdings consolidates the financial position and results of operations of RMCO. RE/MAX Holdings and its consolidated subsidiaries, including RMCO, are referred to hereinafter as the “Company.” | |
The Company is one of the world’s leading franchisors of residential and commercial real estate brokerage services throughout the U.S. and globally. The Company also operates a small number of real estate brokerages in the U.S. The Company’s revenue is derived from continuing franchise fees, annual dues from agents, broker fees, franchise sales and other franchise revenue (which consist of fees from initial sales and renewals of franchises, regional franchise fees, preferred marketing arrangements, approved supplier programs and event-based revenue from training and other programs) and brokerage revenue (which consists of fees assessed by the Company’s owned brokerages for services provided to their affiliated real estate agents). The Company, as a franchisor, grants the broker-owner a license to use the RE/MAX brand, trademark, promotional and operating materials and concepts. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies |
Basis of Presentation | |
The accompanying condensed consolidated financial statements are unaudited and comprise the condensed consolidated financial statements of the Company and have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and with Article 10 of Regulation S-X. In compliance with those instructions, 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 RE/MAX 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 March 31, 2015 and December 31, 2014, the results of its operations for the three months ended March 31, 2015 and 2014, changes in its stockholders’ equity for the three months ended March 31, 2015 and results of its cash flows for the three months ended March 31, 2015 and 2014. Interim results may not be indicative of full year performance. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements within the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. | |
Use of Estimates | |
The preparation of 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 disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant areas in which management uses assumptions include, among other things, the establishment of the allowance for doubtful trade accounts and notes receivable, the determination of the estimated lives of intangible assets, the estimates for amounts accrued for litigation matters, equity-based compensation, the estimates of the fair value of reporting units used in the annual assessment of goodwill, the fair value of assets acquired and the amounts payable pursuant to the terms of the Tax Receivable Agreements (“TRAs”) discussed in more detail in Note 3, Non-controlling Interest. Actual results could differ from those estimates. | |
Principles of Consolidation | |
RE/MAX Holdings holds an approximate 40% economic interest in RMCO, but as its managing member, RE/MAX Holdings controls RMCO’s operations, management and activities. As a result, RE/MAX Holdings consolidates RMCO and records a non-controlling interest in the accompanying Condensed Consolidated Balance Sheets and records net income attributable to the non-controlling interest in the accompanying Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income. | |
Recent Accounting Pronouncements | |
Under the Jumpstart Our Business Startups Act (“JOBS Act”), the Company meets the definition of an emerging growth company. The Company has irrevocably elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. | |
In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-03, Interest – Imputation of Interest, which requires an entity to present debt issuance costs related to a debt liability as a direct deduction from the debt liability rather than as an asset. ASU 2015-03 is effective retrospectively for fiscal years, and interim reporting periods within those years, beginning on or after December 15, 2015. The adoption of this standard is expected to impact the presentation of certain financial statement line items within the Company’s consolidated balance sheets and related disclosures, but will not affect the Company’s consolidated results of operations. | |
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. As currently proposed, the new standard is effective for the Company on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company has not yet selected a transition method nor has it determined the effect of the standard on its consolidated financial statements and related disclosures. | |
In April 2014, the FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU 2014-08 limits discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on an entity’s operations and financial results. ASU 2014-08 also provides guidance on the financial statement presentation and disclosures of discontinued operations. ASU 2014-08 is effective prospectively for fiscal years, and interim reporting periods within those years, beginning on or after December 15, 2014. The Company adopted this standard effective January 1, 2015 and a disposal group classified as held for sale as of March 31, 2015 did not qualify as a discontinued operation. See Note 5, Dispositions, for additional information. | |
Critical Accounting Judgments and Estimates | |
There have been no changes in the Company’s critical accounting judgments and estimates from those that were disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The Company believes that the disclosures herein are adequate so that the information presented is not misleading. |
Noncontrolling_Interest
Non-controlling Interest | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Noncontrolling Interest [Abstract] | ||||||||||||||||
Non-controlling Interest | 3. Non-controlling Interest | |||||||||||||||
RE/MAX Holdings is the sole managing member of RMCO and subsequent to the IPO, began to operate and control all of the business affairs of RMCO. As a result, RE/MAX Holdings began to consolidate RMCO on October 7, 2013. RE/MAX Holdings owns a 40.42% and 39.89% minority economic interest in RMCO as of March 31, 2015 and December 31, 2014, respectively, and records a non-controlling interest for the remaining 59.58% and 60.11% economic interest in RMCO held by RIHI, Inc. (“RIHI”) as of March 31, 2015 and December 31, 2014, respectively. RE/MAX Holdings’ minority economic interest in RMCO increased due to the increase in common units from the issuance of shares of Class A common stock upon the exercise of 263,568 stock options during the three months ended March 31, 2015, as discussed in Note 10, Equity-Based Compensation. RE/MAX Holdings’ only sources of cash flow from operations are distributions from RMCO and management fees received pursuant to the management services agreement between RE/MAX Holdings and RMCO. Net income attributable to the non-controlling interest in the accompanying Condensed Consolidated Statements of Income represents the portion of earnings attributable to the economic interest in RMCO held by the non-controlling unitholders. As of October 7, 2013, the non-controlling interest in the accompanying Condensed Consolidated Balance Sheets represented the carryover basis of RIHI’s capital account in RMCO. Prospectively, the non-controlling interest has been adjusted to reflect tax and other cash distributions made to, and the income allocated to, the non-controlling unitholders. The ownership of the common units in RMCO is summarized as follows: | ||||||||||||||||
31-Mar-15 | 31-Dec-14 | |||||||||||||||
Shares | Ownership % | Shares | Ownership % | |||||||||||||
Non-controlling unitholders ownership of common units | 17,734,600 | 59.58 | % | 17,734,600 | 60.11 | % | ||||||||||
in RMCO | ||||||||||||||||
RE/MAX Holdings, Inc. outstanding Class A common | 12,031,609 | 40.42 | % | 11,768,041 | 39.89 | % | ||||||||||
stock (equal to RE/MAX Holdings, Inc. common units | ||||||||||||||||
in RMCO) | ||||||||||||||||
29,766,209 | 100 | % | 29,502,641 | 100 | % | |||||||||||
The aforementioned ownership percentages are used to calculate the net income attributable to RE/MAX Holdings. A reconciliation from “Income before provision for income taxes” to “Net income attributable to RE/MAX Holdings, Inc.” for the periods indicated is detailed as follows (in thousands, except percentages): | ||||||||||||||||
Three months ended March 31, | ||||||||||||||||
2015 | 2014 | |||||||||||||||
Income before provision for income taxes | $ | 11,278 | $ | 9,683 | ||||||||||||
Weighted average ownership percentage of controlling interest | 39.99 | % | 39.56 | % | ||||||||||||
Income before provision for income taxes attributable to | 4,510 | 3,831 | ||||||||||||||
RE/MAX Holdings, Inc. | ||||||||||||||||
Provision for income taxes attributable to | (1,759 | ) | (1,423 | ) | ||||||||||||
RE/MAX Holdings, Inc. | ||||||||||||||||
Net income attributable to RE/MAX Holdings, Inc. | $ | 2,751 | $ | 2,408 | ||||||||||||
A reconciliation of the “Provision for income taxes” for the periods indicated is detailed as follows (in thousands): | ||||||||||||||||
Three months ended March 31, | ||||||||||||||||
2015 | 2014 | |||||||||||||||
Provision for income taxes attributable to | $ | (1,759 | ) | $ | (1,423 | ) | ||||||||||
RE/MAX Holdings, Inc. (a) | ||||||||||||||||
Provision for income taxes attributable to entities other than | (389 | ) | (462 | ) | ||||||||||||
RE/MAX Holdings, Inc. (b) | ||||||||||||||||
Provision for income taxes | $ | (2,148 | ) | $ | (1,885 | ) | ||||||||||
(a) | The provision for income taxes attributable to RE/MAX Holdings includes all U.S. federal and state income taxes as well as RE/MAX Holdings’ approximate 40% share of the taxes imposed directly on RE/MAX, LLC, a wholly-owned subsidiary of RMCO, related to tax liabilities in certain foreign jurisdictions of approximately $262,000 and $303,000 for the three months ended March 31, 2015 and 2014, respectively. | |||||||||||||||
(b) | The provision for income taxes attributable to entities other than RE/MAX Holdings represents taxes imposed directly on RE/MAX, LLC related to tax liabilities in certain foreign jurisdictions that are allocated to the non-controlling interest. | |||||||||||||||
Distributions and Other Payments to Non-controlling Unitholders | ||||||||||||||||
Distributions for Taxes | ||||||||||||||||
As a limited liability company (treated as a partnership for income tax purposes), RMCO does not incur significant federal, state or local income taxes, as these taxes are primarily the obligations of its members. As authorized by the Fourth Amended and Restated RMCO Limited Liability Company Agreement (the “RMCO, LLC Agreement”), RMCO is generally required to distribute cash on a pro rata basis to its members to the extent necessary to cover each member’s estimated tax liabilities, if any, with respect to their allocable share of RMCO earnings, but only to the extent that any other discretionary distributions from RMCO for the relevant period were otherwise insufficient to enable each member to cover its estimated tax liabilities. RMCO makes such tax distributions to its members based on an estimated tax rate in accordance with the terms of the RMCO, LLC Agreement. Upon completion of its tax returns with respect to the prior year, RMCO may make other discretionary true-up distributions to its members, if cash is available for such purposes, with respect to actual taxable income for the prior year. Distributions for taxes paid to or on behalf of non-controlling unitholders under the RMCO, LLC Agreement were $65,000 and $2,552,000 during the three months ended March 31, 2015 and 2014, respectively, and are recorded in “Non-controlling interest” in the accompanying Condensed Consolidated Balance Sheets and Condensed Consolidated Statement of Stockholders’ Equity. | ||||||||||||||||
Other Distributions | ||||||||||||||||
Discretionary cash distributions may also be made to non-controlling unitholders based on their ownership percentage in RMCO as determined in accordance with the RMCO, LLC Agreement. The Company expects that future cash distributions will be made to non-controlling unitholders pro rata on a quarterly basis equal to the anticipated dividend payments to the stockholders of the Company’s Class A common stock, or otherwise on a discretionary basis as determined to be necessary or appropriate by the Company. The Company made other distributions of $30,830,000 to non-controlling unitholders in April 2015, which is recorded in “Non-controlling interest” in the accompanying Condensed Consolidated Balance Sheets and Condensed Consolidated Statement of Stockholders’ Equity. On May 7, 2015, the Company declared a distribution to non-controlling unitholders of $2,217,000, which is payable on June 4, 2015. No other distributions were paid to non-controlling unitholders during the three months ended March 31, 2015 and 2014. | ||||||||||||||||
Payments Pursuant to the Tax Receivable Agreements | ||||||||||||||||
As of March 31, 2015, the Company reflected a liability of $67,418,000, representing the payments due to RMCO’s historical owners, RIHI and Weston Presidio V., L.P. (“Weston Presidio”), under the terms of the TRAs (see current and non-current portion of “Payable pursuant to tax receivable agreements” in the accompanying Condensed Consolidated Balance Sheets). | ||||||||||||||||
As of March 31, 2015, the Company estimates that amounts payable pursuant to the TRAs within the next 12 month period will be approximately $3,914,000. To determine the current amount of the payments due to the Historical Owners, the Company estimated the amount of taxable income that RE/MAX Holdings generated during 2014 and the amount of the specified deductions subject to the TRAs which are expected to be realized by RE/MAX Holdings in its 2014 tax return. This amount was then used as a basis for determining the Company’s increase in estimated tax cash savings as a result of such deductions on which a current TRA obligation became due (i.e. payable within 12 months of the Company’s year-end). These calculations are performed pursuant to the terms of the TRAs. No amounts were paid pursuant to the terms of the TRAs during the three months ended March 31, 2015 or 2014. | ||||||||||||||||
The timing and amount of the payments to be made under the TRAs are subject to certain contingencies, including RE/MAX Holdings having sufficient taxable income to utilize all of the tax benefits defined in the TRAs. If the Company elects to terminate the TRAs early, the Company would be required to make an immediate cash payment equal to the present value of the anticipated future tax benefits that are the subject of the TRAs, which payment may be made significantly in advance of the actual realization, if any, of such future tax benefits. | ||||||||||||||||
Obligations pursuant to the TRAs are obligations of RE/MAX Holdings. They do not impact the non-controlling interest. These obligations are not income tax obligations and have no impact on the provision for income taxes in the accompanying Condensed Consolidated Statements of Income. In general, items of income, gain, loss and deduction are allocated on the basis of the members’ ownership interests pursuant to the RMCO, LLC Agreement after taking into consideration all relevant sections of the Internal Revenue Code. |
Earnings_Per_Share_and_Dividen
Earnings Per Share and Dividends | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Earnings Per Share [Abstract] | ||||||||
Earnings Per Share and Dividends | 4. Earnings Per Share and Dividends | |||||||
Earnings Per Share | ||||||||
Basic earnings per share (“EPS”) measures the performance of an entity over the reporting period. Diluted EPS measures the performance of an entity over the reporting period while giving effect to all potentially dilutive common shares that were outstanding during the period. The treasury stock method is used to determine the dilutive potential of stock options and restricted stock units. | ||||||||
The following is a reconciliation of the numerator and denominator used in the basic and diluted EPS calculations (in thousands, except share and per share information): | ||||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
Numerator | ||||||||
Net income attributable to RE/MAX Holdings, Inc. | $ | 2,751 | $ | 2,408 | ||||
Denominator for basic net income per share of Class A | ||||||||
common stock | ||||||||
Weighted average shares of Class A common stock | 11,817,605 | 11,607,971 | ||||||
outstanding | ||||||||
Denominator for diluted net income per share of Class A | ||||||||
common stock | ||||||||
Weighted average shares of Class A common stock | 11,817,605 | 11,607,971 | ||||||
outstanding | ||||||||
Add dilutive effect of the following: | ||||||||
Stock options | 458,992 | 602,217 | ||||||
Restricted stock units | 16,908 | 44,286 | ||||||
Weighted average shares of Class A common stock | 12,293,505 | 12,254,474 | ||||||
outstanding, diluted | ||||||||
Earnings per share of Class A common stock | ||||||||
Net income attributable to RE/MAX Holdings, Inc. | $ | 0.23 | $ | 0.21 | ||||
per share of Class A common stock, basic | ||||||||
Net income attributable to RE/MAX Holdings, Inc. | $ | 0.22 | $ | 0.2 | ||||
per share of Class A common stock, diluted | ||||||||
The one share of Class B common stock outstanding does not share in the earnings of RE/MAX 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 | ||||||||
During the three months ended March 31, 2015, the Company’s Board of Directors declared a quarterly dividend of $0.125 per share on all outstanding shares of Class A common stock, or $1,500,000 in total dividends, which along with a corresponding distribution to non-controlling unitholders of $2,217,000, was paid on April 8, 2015. Additionally, during the three months ended March 31, 2015, the Company’s Board of Directors declared a special dividend of $1.50 per share on all outstanding shares of Class A common stock, or $17,883,000 in total dividends, which along with a corresponding distribution to non-controlling unitholders of $26,602,000, was paid on April 8, 2015. During the three months ended March 31, 2014, the Company’s Board of Directors declared a quarterly dividend of $0.0625 per share on all outstanding shares of Class A common stock, or $725,000, which was paid on April 18, 2014. On May 7, 2015, the Company’s Board of Directors declared a quarterly dividend of $0.125 per share on all outstanding shares of Class A common stock, which is payable on June 4, 2015 to shareholders of record at the close of business on May 21, 2015. |
Dispositions
Dispositions | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Discontinued Operations And Disposal Groups [Abstract] | ||||
Dispositions | ||||
5. Dispositions | ||||
Disposition of RE/MAX Caribbean Islands, Inc. | ||||
On December 31, 2014, the Company sold substantially all of the assets of its owned and operated regional franchising operations located in the Caribbean and Central America for a net purchase price of approximately $100,000. In connection with the sale of the assets, the Company entered into separate regional franchise agreements effective January 1, 2015 with a term of 20 years with the purchasers, under which the Company will receive ongoing monthly continuing franchise fees, broker fees and franchise sales revenue. | ||||
Subsequent Events | ||||
On April 10, 2015, the Company sold certain operating assets and liabilities, including six owned brokerage offices located in the U.S., of RB2B, LLC d/b/a RE/MAX 100 (“RE/MAX 100”), a wholly owned subsidiary of the Company, for a net sales price of $450,000. The Company expects to recognize a gain on the sale of the assets of approximately $700,000 during the second quarter of 2015, which will be reflected in “Gain on sale or disposition of assets, net” in the Company’s Consolidated Statements of Income. In connection with this sale, the Company transferred separate office franchise agreements to the purchaser, under which the Company will receive ongoing monthly continuing franchise fees, broker fees and franchise sales revenue. The financial position and results of operations of RE/MAX 100 are entirely attributable to the Company’s Brokerages reportable segment. | ||||
As of March 31, 2015, the sale of the assets and liabilities of RE/MAX 100 met the criteria to be classified as held for sale. The Company presented the assets included in the sale of RE/MAX 100 and the liabilities directly associated with those assets separately in the accompanying Condensed Consolidated Balance Sheets (see “Assets held for sale” and “Liabilities held for sale”). The following table provides the major classes of assets and liabilities held for sale for the period indicated (in thousands): | ||||
March 31, | ||||
2015 | ||||
Assets held for sale | ||||
Escrow cash - restricted | $ | 797 | ||
Accounts and notes receivable, current portion | 236 | |||
Other current assets | 50 | |||
Property and equipment, net of accumulated depreciation | 96 | |||
Total assets held for sale | $ | 1,179 | ||
Liabilities held for sale | ||||
Accounts payable | $ | 270 | ||
Escrow liabilities | 797 | |||
Accrued liabilities | 209 | |||
Deferred revenue | 191 | |||
Other liabilities | 276 | |||
Total liabilities held for sale | $ | 1,743 | ||
Intangible_Assets_and_Goodwill
Intangible Assets and Goodwill | 3 Months Ended | |||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||
Intangible Assets and Goodwill | 6. Intangible Assets and Goodwill | |||||||||||||||||||||||||||
The following table provides the components of the Company’s intangible assets (in thousands): | ||||||||||||||||||||||||||||
Initial Weighted | 31-Mar-15 | 31-Dec-14 | ||||||||||||||||||||||||||
Average | ||||||||||||||||||||||||||||
Amortization | ||||||||||||||||||||||||||||
Period | Initial Cost | Accumulated Amortization | Net Balance | Initial Cost | Accumulated Amortization | Net Balance | ||||||||||||||||||||||
(in years) | ||||||||||||||||||||||||||||
Franchise agreements | 12 | $ | 162,835 | $ | (90,721 | ) | $ | 72,114 | $ | 162,835 | $ | (87,330 | ) | $ | 75,505 | |||||||||||||
Other intangible assets: | ||||||||||||||||||||||||||||
Software | 4.3 | $ | 8,633 | $ | (7,236 | ) | $ | 1,397 | $ | 8,356 | $ | (7,126 | ) | $ | 1,230 | |||||||||||||
Trademarks | 14.6 | 2,931 | (1,469 | ) | 1,462 | 2,919 | (1,424 | ) | 1,495 | |||||||||||||||||||
Total other intangible assets | 6.9 | $ | 11,564 | $ | (8,705 | ) | $ | 2,859 | $ | 11,275 | $ | (8,550 | ) | $ | 2,725 | |||||||||||||
Amortization expense for the three months ended March 31, 2015 and 2014 was $3,549,000 and $3,576,000, respectively. | ||||||||||||||||||||||||||||
The estimated future amortization of intangible assets, other than goodwill, is as follows (in thousands): | ||||||||||||||||||||||||||||
Year ending December 31: | ||||||||||||||||||||||||||||
Remainder of 2015 | $ | 10,551 | ||||||||||||||||||||||||||
2016 | 14,031 | |||||||||||||||||||||||||||
2017 | 10,113 | |||||||||||||||||||||||||||
2018 | 6,497 | |||||||||||||||||||||||||||
2019 | 6,487 | |||||||||||||||||||||||||||
Thereafter | 27,294 | |||||||||||||||||||||||||||
$ | 74,973 | |||||||||||||||||||||||||||
Amounts recorded as goodwill in the accompanying Condensed Consolidated Balance Sheets are attributable to the Company’s Real Estate Franchise Services reportable segment. During 2014, the Company performed its annual assessment of goodwill and the fair values of the Company’s reporting units significantly exceeded their respective carrying values. No interim indicators of impairment have been identified. The following table presents changes to goodwill for the three months ended March 31, 2015 (in thousands): | ||||||||||||||||||||||||||||
Balance, January 1, 2015 | $ | 72,463 | ||||||||||||||||||||||||||
Effect of changes in foreign currency exchange rates | (294 | ) | ||||||||||||||||||||||||||
Balance, March 31, 2015 | $ | 72,169 | ||||||||||||||||||||||||||
Accrued_Liabilities
Accrued Liabilities | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Accrued Liabilities Current [Abstract] | ||||||||
Accrued Liabilities | 7. Accrued Liabilities | |||||||
Accrued liabilities, excluding accrued liabilities of $209,000 classified as held for sale as of March 31, 2015 and presented in “Liabilities held for sale” in the accompanying Condensed Consolidated Balance Sheets, consist of the following (in thousands): | ||||||||
31-Mar-15 | December 31, | |||||||
2014 | ||||||||
Accrued payroll and related employee costs | $ | 3,758 | $ | 4,519 | ||||
Accrued property taxes | 1,260 | 1,622 | ||||||
Accrued professional fees | 1,190 | 947 | ||||||
Lease-related accruals | 629 | 773 | ||||||
Other | 1,381 | 1,519 | ||||||
$ | 8,218 | $ | 9,380 | |||||
Debt
Debt | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||
Debt | 8. Debt | |||||||||||||||
Debt consists of the following (in thousands): | ||||||||||||||||
March 31, | December 31, | |||||||||||||||
2015 | 2014 | |||||||||||||||
2013 Senior Secured Credit Facility, principal of $520 | $ | 203,330 | $ | 211,673 | ||||||||||||
payable quarterly, matures in July 2020, net of | ||||||||||||||||
unamortized discount of $864 and $360 as of | ||||||||||||||||
March 31, 2015 and December 31, 2014, | ||||||||||||||||
respectively | ||||||||||||||||
Less current portion | (12,725 | ) | (9,460 | ) | ||||||||||||
$ | 190,605 | $ | 202,213 | |||||||||||||
Maturities of debt are as follows (in thousands): | ||||||||||||||||
As of March 31: | ||||||||||||||||
Remainder of 2015 | $ | 1,560 | ||||||||||||||
2016 | 2,080 | |||||||||||||||
2017 | 2,080 | |||||||||||||||
2018 | 2,080 | |||||||||||||||
2019 | 2,080 | |||||||||||||||
Thereafter | 194,314 | |||||||||||||||
$ | 204,194 | |||||||||||||||
On July 31, 2013, the Company entered into a new credit agreement with several lenders and administered by a bank, referred to herein as the “2013 Senior Secured Credit Facility.” The 2013 Senior Secured Credit Facility consists of a $230,000,000 term loan facility and a $10,000,000 revolving loan facility. The proceeds provided by the term loan facility were used to refinance and repay existing indebtedness and for working capital, capital expenditures and general corporate purposes. | ||||||||||||||||
On March 11, 2015, the 2013 Senior Secured Credit Facility was amended, providing for an increase to the maximum applicable margin for both London Interbank Offered Rate (“LIBOR”) and Alternate Base Rate (“ABR”) loans by 0.25%, and a modification of certain liquidity covenants in order to increase the amounts the Company may distribute in the form of dividends to its non-controlling unitholders and stockholders of its Class A common stock, referred to herein as the “First Amendment.” Interest rates with respect to the amended term loan facility and revolving loan facility are based, at the Company’s option, on (a) adjusted LIBOR, provided that LIBOR shall be no less than 1% plus a maximum applicable margin of 3.25% or (b) ABR, provided that ABR shall be no less than 2%, which is equal to the greater of (1) JPMorgan Chase Bank, N.A.’s prime rate; (2) the Federal Funds Effective Rate plus 0.5% or (3) calculated Eurodollar Rate for a one month interest period plus 1%, plus a maximum applicable margin of 2.25%. The applicable margin is subject to quarterly adjustments based on the Company’s total leverage ratio as defined in the 2013 Senior Secured Credit Facility. In connection with the First Amendment, the Company incurred costs of $1,086,000, of which $555,000 was recorded as an unamortized debt discount and are being amortized over the remaining term of the 2013 Senior Secured Credit Facility and the remaining $531,000 was expensed as incurred. | ||||||||||||||||
The Company is required to make principal payments out of excess cash flow, as defined in the 2013 Senior Secured Credit Facility, as well as from the proceeds of certain asset sales, proceeds from the issuance of indebtedness and from insurance recoveries. The Company made an excess cash flow prepayment of $7,320,000 on March 26, 2015. The Company accounted for the mandatory principal excess cash flow prepayment as an early extinguishment of debt and recorded a loss during the three months ended March 31, 2015 of $94,000 related to unamortized debt discount and issuance costs. As of March 31, 2015, mandatory principal payments of approximately $520,000 are due quarterly until the facility matures on July 31, 2020 and will be reduced pro rata by the amount of any excess cash flow principal payments made. The Company did not make a mandatory principal excess cash flow prepayment during the three months ended March 31, 2014. The Company may make optional prepayments on the term loan facility at any time; however, no such optional prepayments were made during the three months ended March 31, 2015 or 2014. | ||||||||||||||||
The estimated fair value of the Company’s debt as of March 31, 2015 and December 31, 2014 represents the amount that would be paid to transfer or redeem the debt in an orderly transaction between market participants at those dates and maximizes the use of observable inputs. The fair value of the Company’s debt was estimated using a market approach based on the amount at the measurement date that the Company would pay to enter into the identical liability, since quoted prices for the Company’s debt instruments are not available. As a result, the Company has classified the fair value of its 2013 Senior Secured Credit Facility as Level 2 of the fair value hierarchy. The carrying amounts of the Company’s 2013 Senior Secured Credit Facility are included in the accompanying Condensed Consolidated Balance Sheets in “Current portion of debt” and “Debt, net of current portion.” The following table summarizes the carrying value and fair value of the 2013 Senior Secured Credit Facility as of March 31, 2015 and December 31, 2014 (in thousands): | ||||||||||||||||
31-Mar-15 | 31-Dec-14 | |||||||||||||||
Carrying amounts | Estimated fair value | Carrying amounts | Estimated fair value | |||||||||||||
2013 Senior Secured Credit Facility | $ | 203,330 | $ | 202,152 | $ | 211,673 | $ | 208,853 | ||||||||
The Company had no borrowings drawn on the revolving loan facility during the three months ended March 31, 2015 or 2014 and had $10,000,000 available under the revolving loan facility as of March 31, 2015. The Company must pay a quarterly commitment fee equal to 0.5% on the average daily amount of the unused portion of the revolving loan facility. |
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes |
RE/MAX Holdings is subject to U.S. federal and state income taxation on its allocable portion of the income of RMCO. The “Provision for income taxes” in the accompanying Condensed Consolidated Statements of Income for the three months ended March 31, 2015 and 2014 is based on an estimate of the Company’s annualized effective income tax rate. The Company’s effective tax rate includes a rate benefit attributable to the fact that the Company’s subsidiaries operate as a series of limited liability companies which are not themselves subject to federal income tax. Accordingly, the portion of the Company’s subsidiaries earnings attributable to the non-controlling interest are subject to tax when reported as a component of the non-controlling interests’ taxable income. The “Provision for income taxes” is comprised of a provision for income taxes attributable to RE/MAX Holdings and to entities other than RE/MAX Holdings. The provision for income taxes attributable to RE/MAX Holdings includes all U.S. federal and state income taxes and RE/MAX Holdings’ approximate 40% share of taxes imposed directly on RE/MAX, LLC related to tax liabilities in certain foreign jurisdictions. The provision for income taxes attributable to entities other than RE/MAX Holdings represents taxes imposed directly on RE/MAX, LLC that are allocated to the non-controlling interest. | |
The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. As of March 31, 2015, the Company does not believe it has any significant uncertain tax positions. |
EquityBased_Compensation
Equity-Based Compensation | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||||||
Equity-Based Compensation | 10. Equity-Based Compensation | |||||||
On September 30, 2013, the Company’s Board of Directors adopted the RE/MAX Holdings, Inc. 2013 Omnibus Incentive Plan (the “2013 Incentive Plan”) that provides for the grant of incentive stock options to the Company’s employees, and for the grant of shares of RE/MAX Holdings’ Class A common stock, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, cash-based awards and any combination thereof to employees, directors and consultants of RE/MAX Holdings and RMCO. | ||||||||
On March 11, 2015, RE/MAX Holdings granted 74,893 restricted stock units at a value of $32.45 per unit to certain employees, which vest over a three-year period beginning on April 1, 2016, and 10,787 restricted stock units at a value of $32.45 per unit to its directors, which vest on April 1, 2016. The grant-date fair value of $32.45 per unit equaled the closing price of RE/MAX Holdings’ Class A common stock on March 11, 2015. | ||||||||
For the three months ended March 31, 2015 and 2014, the Company recognized equity-based compensation expense of $142,000 and $258,000, respectively, in the accompanying Condensed Consolidated Statements of Income resulting from restricted stock units that were granted on March 11, 2015 and October 7, 2013. | ||||||||
The following table summarizes equity-based compensation activity for the three months ended March 31, 2015: | ||||||||
Restricted Stock Units | Options | |||||||
Balance as of January 1, 2015 | 40,472 | 652,500 | ||||||
Granted | 85,680 | - | ||||||
Exercised (a) | - | (263,568 | ) | |||||
Forfeited | (2,904 | ) | - | |||||
Cancelled | - | - | ||||||
Balance as of March 31, 2015 | 123,248 | 388,932 | ||||||
Vested | - | 388,932 | ||||||
Unvested | 123,248 | - | ||||||
(a) | Cash received from stock option exercises for the three months ended March 31, 2015 was $937,000. The Company recorded a corporate income tax benefit relating to the options exercised during the three months ended March 31, 2015 of $1,105,000 in “Additional paid-in capital” in the accompanying Condensed Consolidated Balance Sheets and Condensed Consolidated Statement of Stockholders’ Equity. | |||||||
At March 31, 2015, there were 1,926,599 additional shares available for the Company to grant under the 2013 Incentive Plan. |
Leadership_Changes_and_Restruc
Leadership Changes and Restructuring Activities | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Restructuring And Related Activities [Abstract] | ||||
Leadership Changes and Restructuring Activities | ||||
11. Leadership Changes and Restructuring Activities | ||||
The Company’s former Chief Executive Officer retired on December 31, 2014 and pursuant to the terms of the Separation and Release of Claims Agreement (the “Separation Agreement”), the Company is required to provide severance and other related benefits over a 36 month period, beginning on December 31, 2014. The Company recorded a liability, measured at its estimated fair value, for payments that will be made under the Separation Agreement, with a corresponding charge of $3,545,000 recorded in 2014. As of March 31, 2015 and December 31, 2014, the short-term portion of the liability was $453,000 and $500,000, respectively, and is included in “Accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets. As of March 31, 2015 and December 31, 2014, the long-term portion of the liability was $1,321,000 and $1,488,000, respectively, and is included in “Other liabilities, net of current portion” in the accompanying Condensed Consolidated Balance Sheets. | ||||
As a result of realignment of Company resources subsequent to the retirement of the Company’s former Chief Executive Officer, the Company incurred severance and other related expenses of $451,000 during the three months ended March 31, 2015, which was included in “Selling, operating and administrative expenses” in the accompanying Condensed Consolidated Statements of Income. | ||||
In addition, management of the Company approved and implemented a restructuring plan during the fourth quarter of 2014 designed to improve operating efficiencies, which reduced the Company’s overall headcount at its corporate headquarters (the “Restructuring Plan”). In connection with the Restructuring Plan, the Company incurred $1,303,000 of expenses in 2014 related to severance and outplacement services provided to certain former employees of the Company. | ||||
The following table presents a rollforward of the estimated fair value liability established for the aforementioned severance and other related costs, which are entirely attributable to the Company’s Real Estate Franchise Services reportable segment, from January 1, 2015 to March 31, 2015 (in thousands): | ||||
Balance, January 1, 2015 | $ | 2,408 | ||
Additional severance and other related expenses | 451 | |||
Accretion | 17 | |||
Cash payments | (744 | ) | ||
Balance, March 31, 2015 | $ | 2,132 | ||
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies |
Commitments | |
The Company leases offices and equipment under non-cancelable operating leases, subject to certain provisions for renewal options and escalation clauses. | |
Litigation | |
The Company is subject to litigation claims arising in the ordinary course of business. The Company believes that it has adequately accrued for legal matters as appropriate. The Company records litigation accruals for legal matters which are both probable and estimable and for related legal costs as incurred. | |
In connection with the Company’s acquisition of the net assets of HBN on October 7, 2013, several shareholders of HBN dissented from the transaction alleging the Company purchased the net assets of HBN below fair value and demanded payment for their shares in excess of consideration paid. Pursuant to the dissenters’ rights statute in the State of Colorado, on February 11, 2014, HBN petitioned the District Court of Denver County, Colorado (the “Court”) to determine the fair value of HBN. Based on both the plaintiff’s and the defendants’ expert valuation reports, the Company believes that the potential impact to its financial position and results of operations could range from $26,000 to approximately $2,656,000. HBN vigorously defended its position that the consideration paid for the net assets of HBN approximated fair value. Discovery continued during the three months ended March 31, 2015 and a trial to hear the case before the Court occurred between April 14, 2015 and April 17, 2015. At the conclusion thereof, a decision had not been rendered and post-trial briefs have been mandated by the Court. As a result, the Company has determined that no amount within the range of potential impact is a better estimate than any other amount and therefore, no changes to the previously recorded accrual of $26,000 occurred during the three months ended March 31, 2015. | |
Except for the ongoing litigation concerning the acquisition of the net assets of HBN, management of the Company believes other such litigation matters involving a reasonably possible chance of loss will not, individually or in the aggregate, result in a material adverse effect on the Company's financial condition, results of operations and cash flows. |
Guarantees
Guarantees | 3 Months Ended |
Mar. 31, 2015 | |
Guarantees [Abstract] | |
Guarantees | |
13. Guarantees | |
In May 2014, the Company entered into a guarantee of the full and prompt payment and performance when due of all obligations due to a financial institution under a commercial line-of-credit agreement and note entered into by the Company’s equity-method investee, a residential mortgage operation in which the Company has a 50% interest. The term of the line-of-credit agreement is 12 months and the total amount of advances requested and unpaid principal balance cannot exceed $15,000,000. The line of credit bears interest at 0.5% over the financial institution’s base rate with a floor of 3.75%. The Company had entered into a similar guarantee during May 2013, which expired as of May 2015. The outstanding balance on the line of credit was approximately $6,895,000 and $4,548,000 as of March 31, 2015 and December 31, 2014, respectively. The Company did not incur any payments under this guarantee during the three months ended March 31, 2015, or in any prior periods, and does not anticipate that it will incur any payments through the duration of the guarantee. |
RelatedParty_Transactions
Related-Party Transactions | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Related Party Transactions [Abstract] | ||||||||
Related-Party Transactions | 14. Related-Party Transactions | |||||||
The Company’s real estate brokerage operations pay advertising fees to regional and national advertising funds, which promote the RE/MAX brand. These advertising funds are corporations owned by a majority stockholder of RIHI, who is also the Company’s Chief Executive Officer and Co-Founder, as trustee for RE/MAX agents, who does not receive any compensation from these corporations, as all funds received by the corporations are required to be spent on advertising for the respective regions. During the three months ended March 31, 2015 and 2014, the Company’s real estate brokerage operations paid $282,000 and $283,000, respectively, to these advertising funds. These payments are included in “Selling, operating and administrative expenses” in the accompanying Condensed Consolidated Statements of Income. | ||||||||
Prior to October 7, 2013, the Company’s real estate brokerage operations in the Washington, D.C. area paid regional continuing franchise fees, broker fees and franchise sales revenue, as do all other RE/MAX franchisees in the Central Atlantic region, to Tails. Several of the Company’s officers and stockholders of RIHI were also stockholders and officers of Tails, and as such, prior to October 7, 2013, Tails was a related party to the Company. As described in Note 1, Business and Organization, a portion of the proceeds raised during the IPO was used to purchase certain assets of Tails. In addition, the Company’s owned real estate brokerage operations in the Washington, D.C. area recorded a payable to Tails and its affiliated regional advertising fund. As of March 31, 2015 and December 31, 2014, the amount of the payable was $1,093,000 and $1,031,000, respectively, and is included in “Accounts payable to affiliates” in the accompanying Condensed Consolidated Balance Sheets. | ||||||||
The majority stockholders of RIHI, including the Company’s current Chief Executive Officer, have made and continue to make a golf course they own available to the Company for business purposes. During the three months ended March 31, 2015 and 2014, the Company used the golf course for business purposes at no charge. | ||||||||
The Company also provides services to certain affiliated entities such as accounting, legal, marketing, technology, human resources and public relations services as it allows these companies to share its leased office space. During the three months ended March 31, 2015 and 2014, the total amounts allocated for services rendered and rent for office space provided on behalf of affiliated entities were $416,000 and $562,000, respectively. Such amounts are generally paid within 30 days and no such amounts were outstanding at March 31, 2015 or December 31, 2014. | ||||||||
The activity in the Company’s “Accounts receivable from affiliates” and “Accounts payable to affiliates” in the accompanying Condensed Consolidated Balance Sheets consists of the following (in thousands): | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Accounts receivable from affiliates: | ||||||||
RE/MAX of Texas Advertising Fund | $ | - | $ | 246 | ||||
Other | - | (15 | ) | |||||
Total accounts receivable from affiliates | - | 231 | ||||||
Accounts payable to affiliates: | ||||||||
Other | (1,186 | ) | (1,114 | ) | ||||
Total accounts payable to affiliates | (1,186 | ) | (1,114 | ) | ||||
Net accounts payable to affiliates | $ | (1,186 | ) | $ | (883 | ) | ||
Segment_Information
Segment Information | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Segment Reporting [Abstract] | ||||||||
Segment Information | RE/MAX HOLDINGS, INC. | |||||||
Notes to Condensed Consolidated Financial Statements | ||||||||
(Unaudited) | ||||||||
15. Segment Information | ||||||||
The Company has two reportable segments: Real Estate Franchise Services and Brokerages. Management evaluates the operating results of its reportable 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. The accounting policies of the reportable segments are the same as those described in Note 2, Summary of Significant Accounting Policies. | ||||||||
As a result of changes in management’s process to assess performance and allocate resources, the Company implemented a new segment structure beginning in the second quarter of 2014. The changes in the Company’s segment structure relate to certain corporate-wide professional services expenses, which were previously reflected in the Brokerage and Other reportable segment and, beginning in the second quarter of 2014, are being reflected in the Real Estate Franchise Services reportable segment. All prior segment information has been reclassified to reflect the Company’s new segment structure and current presentation. Adjusted EBITDA for the reportable segments excludes depreciation, amortization, interest expense, net and the provision for income taxes and is then adjusted for other non-cash and non-recurring cash charges or other items. Adjusted EBITDA for the reportable segments is also a key factor that is used by the Company’s internal decision makers to (i) determine how to allocate resources to segments and (ii) evaluate the effectiveness of management for purposes of annual and other incentive compensation plans. The additional items that are adjusted to determine Adjusted EBITDA for the reportable segments include loss or gain on the sale or disposition of assets and sublease, loss on early extinguishment of debt, non-cash straight-line rent expense, non-recurring severance and other related expenses and acquisition integration and professional fees expense. The Company’s Real Estate Franchise Services reportable segment comprises the operations of the Company’s owned and independent global franchising operations under the RE/MAX brand name and the Company’s corporate-wide professional services expenses. All of the Company’s brokerage offices in its Real Estate Franchise Services reportable segment are franchised. The Company’s Brokerages reportable segment includes the Company’s brokerage services business and reflects the elimination of intersegment revenue and other consolidation entries. | ||||||||
The following tables present the revenue and Adjusted EBITDA results of the Company’s reportable segments for the three months ended March 31, 2015 and 2014, respectively: | ||||||||
Revenue (a) | ||||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Real Estate Franchise Services | $ | 40,740 | $ | 39,099 | ||||
Brokerages | 3,467 | 2,781 | ||||||
Consolidated revenue | $ | 44,207 | $ | 41,880 | ||||
(a) | Transactions between the Real Estate Franchise Services and the Brokerages reportable segments are eliminated in consolidation. Revenues for the Real Estate Franchise Services reportable segment include intercompany amounts paid from the Company’s brokerage services business of $432,000 and $422,000 for the three months ended March 31, 2015 and 2014, respectively. Such amounts are eliminated in the Brokerages reportable segment. | |||||||
Adjusted EBITDA | ||||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Real Estate Franchise Services: | ||||||||
Net income | $ | 8,972 | $ | 8,370 | ||||
Depreciation and amortization | 3,732 | 3,868 | ||||||
Interest expense | 2,793 | 2,462 | ||||||
Interest income | (67 | ) | (81 | ) | ||||
Provision for income taxes | 2,120 | 1,983 | ||||||
EBITDA | 17,550 | 16,602 | ||||||
Gain on sale or disposition of assets and sublease | (83 | ) | (196 | ) | ||||
Loss on early extinguishment of debt | 94 | - | ||||||
Non-cash straight-line rent expense | 274 | 212 | ||||||
Non-recurring severance and other related expenses | 451 | - | ||||||
Acquisition integration and professional fees expense | 183 | 18 | ||||||
Adjusted EBITDA | $ | 18,469 | $ | 16,636 | ||||
Brokerages: | ||||||||
Net income (loss) | $ | 158 | $ | (572 | ) | |||
Depreciation and amortization | 79 | 70 | ||||||
Interest expense | 16 | 4 | ||||||
Interest income | - | - | ||||||
Provision (benefit) for income taxes | 28 | (98 | ) | |||||
EBITDA | 281 | (596 | ) | |||||
Loss on sale or disposition of assets and sublease | 40 | 18 | ||||||
Non-cash straight-line rent expense | (43 | ) | (65 | ) | ||||
Adjusted EBITDA | $ | 278 | $ | (643 | ) | |||
Consolidated: | ||||||||
Net income | $ | 9,130 | $ | 7,798 | ||||
Depreciation and amortization | 3,811 | 3,938 | ||||||
Interest expense | 2,809 | 2,466 | ||||||
Interest income | (67 | ) | (81 | ) | ||||
Provision for income taxes | 2,148 | 1,885 | ||||||
EBITDA | 17,831 | 16,006 | ||||||
Gain on sale or disposition of assets and sublease | (43 | ) | (178 | ) | ||||
Loss on early extinguishment of debt | 94 | - | ||||||
Non-cash straight-line rent expense | 231 | 147 | ||||||
Non-recurring severance and other related expenses | 451 | - | ||||||
Acquisition integration and professional fees expense | 183 | 18 | ||||||
Adjusted EBITDA | $ | 18,747 | $ | 15,993 | ||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation |
The accompanying condensed consolidated financial statements are unaudited and comprise the condensed consolidated financial statements of the Company and have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and with Article 10 of Regulation S-X. In compliance with those instructions, 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 RE/MAX 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 March 31, 2015 and December 31, 2014, the results of its operations for the three months ended March 31, 2015 and 2014, changes in its stockholders’ equity for the three months ended March 31, 2015 and results of its cash flows for the three months ended March 31, 2015 and 2014. Interim results may not be indicative of full year performance. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements within the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. | |
Use of Estimates | Use of Estimates |
The preparation of 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 disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant areas in which management uses assumptions include, among other things, the establishment of the allowance for doubtful trade accounts and notes receivable, the determination of the estimated lives of intangible assets, the estimates for amounts accrued for litigation matters, equity-based compensation, the estimates of the fair value of reporting units used in the annual assessment of goodwill, the fair value of assets acquired and the amounts payable pursuant to the terms of the Tax Receivable Agreements (“TRAs”) discussed in more detail in Note 3, Non-controlling Interest. Actual results could differ from those estimates. | |
Principles of Consolidation | RE/MAX Holdings holds an approximate 40% economic interest in RMCO, but as its managing member, RE/MAX Holdings controls RMCO’s operations, management and activities. As a result, RE/MAX Holdings consolidates RMCO and records a non-controlling interest in the accompanying Condensed Consolidated Balance Sheets and records net income attributable to the non-controlling interest in the accompanying Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
Under the Jumpstart Our Business Startups Act (“JOBS Act”), the Company meets the definition of an emerging growth company. The Company has irrevocably elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. | |
In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-03, Interest – Imputation of Interest, which requires an entity to present debt issuance costs related to a debt liability as a direct deduction from the debt liability rather than as an asset. ASU 2015-03 is effective retrospectively for fiscal years, and interim reporting periods within those years, beginning on or after December 15, 2015. The adoption of this standard is expected to impact the presentation of certain financial statement line items within the Company’s consolidated balance sheets and related disclosures, but will not affect the Company’s consolidated results of operations. | |
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. As currently proposed, the new standard is effective for the Company on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company has not yet selected a transition method nor has it determined the effect of the standard on its consolidated financial statements and related disclosures. | |
In April 2014, the FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU 2014-08 limits discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on an entity’s operations and financial results. ASU 2014-08 also provides guidance on the financial statement presentation and disclosures of discontinued operations. ASU 2014-08 is effective prospectively for fiscal years, and interim reporting periods within those years, beginning on or after December 15, 2014. The Company adopted this standard effective January 1, 2015 and a disposal group classified as held for sale as of March 31, 2015 did not qualify as a discontinued operation. See Note 5, Dispositions, for additional information. | |
Critical Accounting Judgments and Estimates | Critical Accounting Judgments and Estimates |
There have been no changes in the Company’s critical accounting judgments and estimates from those that were disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The Company believes that the disclosures herein are adequate so that the information presented is not misleading. |
Noncontrolling_Interest_Tables
Non-controlling Interest (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Noncontrolling Interest [Abstract] | ||||||||||||||||
Summary of Ownership of the Common Units | The ownership of the common units in RMCO is summarized as follows: | |||||||||||||||
31-Mar-15 | 31-Dec-14 | |||||||||||||||
Shares | Ownership % | Shares | Ownership % | |||||||||||||
Non-controlling unitholders ownership of common units | 17,734,600 | 59.58 | % | 17,734,600 | 60.11 | % | ||||||||||
in RMCO | ||||||||||||||||
RE/MAX Holdings, Inc. outstanding Class A common | 12,031,609 | 40.42 | % | 11,768,041 | 39.89 | % | ||||||||||
stock (equal to RE/MAX Holdings, Inc. common units | ||||||||||||||||
in RMCO) | ||||||||||||||||
29,766,209 | 100 | % | 29,502,641 | 100 | % | |||||||||||
Summary of Reconciliation from Income Before Provision for Income Taxes to Net Income | ||||||||||||||||
The aforementioned ownership percentages are used to calculate the net income attributable to RE/MAX Holdings. A reconciliation from “Income before provision for income taxes” to “Net income attributable to RE/MAX Holdings, Inc.” for the periods indicated is detailed as follows (in thousands, except percentages): | ||||||||||||||||
Three months ended March 31, | ||||||||||||||||
2015 | 2014 | |||||||||||||||
Income before provision for income taxes | $ | 11,278 | $ | 9,683 | ||||||||||||
Weighted average ownership percentage of controlling interest | 39.99 | % | 39.56 | % | ||||||||||||
Income before provision for income taxes attributable to | 4,510 | 3,831 | ||||||||||||||
RE/MAX Holdings, Inc. | ||||||||||||||||
Provision for income taxes attributable to | (1,759 | ) | (1,423 | ) | ||||||||||||
RE/MAX Holdings, Inc. | ||||||||||||||||
Net income attributable to RE/MAX Holdings, Inc. | $ | 2,751 | $ | 2,408 | ||||||||||||
Summary of Reconciliation of Provision for Income Taxes | ||||||||||||||||
A reconciliation of the “Provision for income taxes” for the periods indicated is detailed as follows (in thousands): | ||||||||||||||||
Three months ended March 31, | ||||||||||||||||
2015 | 2014 | |||||||||||||||
Provision for income taxes attributable to | $ | (1,759 | ) | $ | (1,423 | ) | ||||||||||
RE/MAX Holdings, Inc. (a) | ||||||||||||||||
Provision for income taxes attributable to entities other than | (389 | ) | (462 | ) | ||||||||||||
RE/MAX Holdings, Inc. (b) | ||||||||||||||||
Provision for income taxes | $ | (2,148 | ) | $ | (1,885 | ) | ||||||||||
(a) | The provision for income taxes attributable to RE/MAX Holdings includes all U.S. federal and state income taxes as well as RE/MAX Holdings’ approximate 40% share of the taxes imposed directly on RE/MAX, LLC, a wholly-owned subsidiary of RMCO, related to tax liabilities in certain foreign jurisdictions of approximately $262,000 and $303,000 for the three months ended March 31, 2015 and 2014, respectively. | |||||||||||||||
(b) | The provision for income taxes attributable to entities other than RE/MAX Holdings represents taxes imposed directly on RE/MAX, LLC related to tax liabilities in certain foreign jurisdictions that are allocated to the non-controlling interest. |
Earnings_Per_Share_and_Dividen1
Earnings Per Share and Dividends (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Earnings Per Share [Abstract] | ||||||||
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 share and per share information): | |||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
Numerator | ||||||||
Net income attributable to RE/MAX Holdings, Inc. | $ | 2,751 | $ | 2,408 | ||||
Denominator for basic net income per share of Class A | ||||||||
common stock | ||||||||
Weighted average shares of Class A common stock | 11,817,605 | 11,607,971 | ||||||
outstanding | ||||||||
Denominator for diluted net income per share of Class A | ||||||||
common stock | ||||||||
Weighted average shares of Class A common stock | 11,817,605 | 11,607,971 | ||||||
outstanding | ||||||||
Add dilutive effect of the following: | ||||||||
Stock options | 458,992 | 602,217 | ||||||
Restricted stock units | 16,908 | 44,286 | ||||||
Weighted average shares of Class A common stock | 12,293,505 | 12,254,474 | ||||||
outstanding, diluted | ||||||||
Earnings per share of Class A common stock | ||||||||
Net income attributable to RE/MAX Holdings, Inc. | $ | 0.23 | $ | 0.21 | ||||
per share of Class A common stock, basic | ||||||||
Net income attributable to RE/MAX Holdings, Inc. | $ | 0.22 | $ | 0.2 | ||||
per share of Class A common stock, diluted | ||||||||
Dispositions_Tables
Dispositions (Tables) (R E M A X Hundred) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
R E M A X Hundred | ||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||
Summary of Assets and Liabilities Held for Sale | As of March 31, 2015, the sale of the assets and liabilities of RE/MAX 100 met the criteria to be classified as held for sale. The Company presented the assets included in the sale of RE/MAX 100 and the liabilities directly associated with those assets separately in the accompanying Condensed Consolidated Balance Sheets (see “Assets held for sale” and “Liabilities held for sale”). The following table provides the major classes of assets and liabilities held for sale for the period indicated (in thousands): | |||
March 31, | ||||
2015 | ||||
Assets held for sale | ||||
Escrow cash - restricted | $ | 797 | ||
Accounts and notes receivable, current portion | 236 | |||
Other current assets | 50 | |||
Property and equipment, net of accumulated depreciation | 96 | |||
Total assets held for sale | $ | 1,179 | ||
Liabilities held for sale | ||||
Accounts payable | $ | 270 | ||
Escrow liabilities | 797 | |||
Accrued liabilities | 209 | |||
Deferred revenue | 191 | |||
Other liabilities | 276 | |||
Total liabilities held for sale | $ | 1,743 | ||
Intangible_Assets_and_Goodwill1
Intangible Assets and Goodwill (Tables) | 3 Months Ended | |||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||
Components of Company's Intangible Assets | The following table provides the components of the Company’s intangible assets (in thousands): | |||||||||||||||||||||||||||
Initial Weighted | 31-Mar-15 | 31-Dec-14 | ||||||||||||||||||||||||||
Average | ||||||||||||||||||||||||||||
Amortization | ||||||||||||||||||||||||||||
Period | Initial Cost | Accumulated Amortization | Net Balance | Initial Cost | Accumulated Amortization | Net Balance | ||||||||||||||||||||||
(in years) | ||||||||||||||||||||||||||||
Franchise agreements | 12 | $ | 162,835 | $ | (90,721 | ) | $ | 72,114 | $ | 162,835 | $ | (87,330 | ) | $ | 75,505 | |||||||||||||
Other intangible assets: | ||||||||||||||||||||||||||||
Software | 4.3 | $ | 8,633 | $ | (7,236 | ) | $ | 1,397 | $ | 8,356 | $ | (7,126 | ) | $ | 1,230 | |||||||||||||
Trademarks | 14.6 | 2,931 | (1,469 | ) | 1,462 | 2,919 | (1,424 | ) | 1,495 | |||||||||||||||||||
Total other intangible assets | 6.9 | $ | 11,564 | $ | (8,705 | ) | $ | 2,859 | $ | 11,275 | $ | (8,550 | ) | $ | 2,725 | |||||||||||||
Estimated Future Amortization of Intangible Assets, Other Than Goodwill | The estimated future amortization of intangible assets, other than goodwill, is as follows (in thousands): | |||||||||||||||||||||||||||
Year ending December 31: | ||||||||||||||||||||||||||||
Remainder of 2015 | $ | 10,551 | ||||||||||||||||||||||||||
2016 | 14,031 | |||||||||||||||||||||||||||
2017 | 10,113 | |||||||||||||||||||||||||||
2018 | 6,497 | |||||||||||||||||||||||||||
2019 | 6,487 | |||||||||||||||||||||||||||
Thereafter | 27,294 | |||||||||||||||||||||||||||
$ | 74,973 | |||||||||||||||||||||||||||
Schedule of Changes in Goodwill | Amounts recorded as goodwill in the accompanying Condensed Consolidated Balance Sheets are attributable to the Company’s Real Estate Franchise Services reportable segment. During 2014, the Company performed its annual assessment of goodwill and the fair values of the Company’s reporting units significantly exceeded their respective carrying values. No interim indicators of impairment have been identified. The following table presents changes to goodwill for the three months ended March 31, 2015 (in thousands): | |||||||||||||||||||||||||||
Balance, January 1, 2015 | $ | 72,463 | ||||||||||||||||||||||||||
Effect of changes in foreign currency exchange rates | (294 | ) | ||||||||||||||||||||||||||
Balance, March 31, 2015 | $ | 72,169 | ||||||||||||||||||||||||||
Accrued_Liabilities_Tables
Accrued Liabilities (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Accrued Liabilities Current [Abstract] | ||||||||
Schedule of Accrued Liabilities | Accrued liabilities, excluding accrued liabilities of $209,000 classified as held for sale as of March 31, 2015 and presented in “Liabilities held for sale” in the accompanying Condensed Consolidated Balance Sheets, consist of the following (in thousands): | |||||||
31-Mar-15 | December 31, | |||||||
2014 | ||||||||
Accrued payroll and related employee costs | $ | 3,758 | $ | 4,519 | ||||
Accrued property taxes | 1,260 | 1,622 | ||||||
Accrued professional fees | 1,190 | 947 | ||||||
Lease-related accruals | 629 | 773 | ||||||
Other | 1,381 | 1,519 | ||||||
$ | 8,218 | $ | 9,380 | |||||
Debt_Tables
Debt (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||
Schedule of Debt | Debt consists of the following (in thousands): | |||||||||||||||
March 31, | December 31, | |||||||||||||||
2015 | 2014 | |||||||||||||||
2013 Senior Secured Credit Facility, principal of $520 | $ | 203,330 | $ | 211,673 | ||||||||||||
payable quarterly, matures in July 2020, net of | ||||||||||||||||
unamortized discount of $864 and $360 as of | ||||||||||||||||
March 31, 2015 and December 31, 2014, | ||||||||||||||||
respectively | ||||||||||||||||
Less current portion | (12,725 | ) | (9,460 | ) | ||||||||||||
$ | 190,605 | $ | 202,213 | |||||||||||||
Schedule of Maturities of Debt | Maturities of debt are as follows (in thousands): | |||||||||||||||
As of March 31: | ||||||||||||||||
Remainder of 2015 | $ | 1,560 | ||||||||||||||
2016 | 2,080 | |||||||||||||||
2017 | 2,080 | |||||||||||||||
2018 | 2,080 | |||||||||||||||
2019 | 2,080 | |||||||||||||||
Thereafter | 194,314 | |||||||||||||||
$ | 204,194 | |||||||||||||||
Schedule of Senior Secured Credit Facility | The following table summarizes the carrying value and fair value of the 2013 Senior Secured Credit Facility as of March 31, 2015 and December 31, 2014 (in thousands): | |||||||||||||||
31-Mar-15 | 31-Dec-14 | |||||||||||||||
Carrying amounts | Estimated fair value | Carrying amounts | Estimated fair value | |||||||||||||
2013 Senior Secured Credit Facility | $ | 203,330 | $ | 202,152 | $ | 211,673 | $ | 208,853 | ||||||||
EquityBased_Compensation_Table
Equity-Based Compensation (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||||||
Summary of Equity-Based Compensation Activity | The following table summarizes equity-based compensation activity for the three months ended March 31, 2015: | |||||||
Restricted Stock Units | Options | |||||||
Balance as of January 1, 2015 | 40,472 | 652,500 | ||||||
Granted | 85,680 | - | ||||||
Exercised (a) | - | (263,568 | ) | |||||
Forfeited | (2,904 | ) | - | |||||
Cancelled | - | - | ||||||
Balance as of March 31, 2015 | 123,248 | 388,932 | ||||||
Vested | - | 388,932 | ||||||
Unvested | 123,248 | - | ||||||
(a) | Cash received from stock option exercises for the three months ended March 31, 2015 was $937,000. The Company recorded a corporate income tax benefit relating to the options exercised during the three months ended March 31, 2015 of $1,105,000 in “Additional paid-in capital” in the accompanying Condensed Consolidated Balance Sheets and Condensed Consolidated Statement of Stockholders’ Equity. | |||||||
Leadership_Changes_and_Restruc1
Leadership Changes and Restructuring Activities (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Restructuring And Related Activities [Abstract] | ||||
Summary of Estimated Fair Value Liability Established for the Aforementioned Severance and Other Related Costs | The following table presents a rollforward of the estimated fair value liability established for the aforementioned severance and other related costs, which are entirely attributable to the Company’s Real Estate Franchise Services reportable segment, from January 1, 2015 to March 31, 2015 (in thousands): | |||
Balance, January 1, 2015 | $ | 2,408 | ||
Additional severance and other related expenses | 451 | |||
Accretion | 17 | |||
Cash payments | (744 | ) | ||
Balance, March 31, 2015 | $ | 2,132 | ||
RelatedParty_Transactions_Tabl
Related-Party Transactions (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Related Party Transactions [Abstract] | ||||||||
Schedule of Related Party Transactions | The activity in the Company’s “Accounts receivable from affiliates” and “Accounts payable to affiliates” in the accompanying Condensed Consolidated Balance Sheets consists of the following (in thousands): | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Accounts receivable from affiliates: | ||||||||
RE/MAX of Texas Advertising Fund | $ | - | $ | 246 | ||||
Other | - | (15 | ) | |||||
Total accounts receivable from affiliates | - | 231 | ||||||
Accounts payable to affiliates: | ||||||||
Other | (1,186 | ) | (1,114 | ) | ||||
Total accounts payable to affiliates | (1,186 | ) | (1,114 | ) | ||||
Net accounts payable to affiliates | $ | (1,186 | ) | $ | (883 | ) | ||
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Segment Reporting [Abstract] | ||||||||
Schedule of Company's Reportable Segments Revenue and Adjusted EBITDA | The following tables present the revenue and Adjusted EBITDA results of the Company’s reportable segments for the three months ended March 31, 2015 and 2014, respectively: | |||||||
Revenue (a) | ||||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Real Estate Franchise Services | $ | 40,740 | $ | 39,099 | ||||
Brokerages | 3,467 | 2,781 | ||||||
Consolidated revenue | $ | 44,207 | $ | 41,880 | ||||
(a) | Transactions between the Real Estate Franchise Services and the Brokerages reportable segments are eliminated in consolidation. Revenues for the Real Estate Franchise Services reportable segment include intercompany amounts paid from the Company’s brokerage services business of $432,000 and $422,000 for the three months ended March 31, 2015 and 2014, respectively. Such amounts are eliminated in the Brokerages reportable segment. | |||||||
Segment Adjusted EBITDA to Net Income | Adjusted EBITDA | |||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Real Estate Franchise Services: | ||||||||
Net income | $ | 8,972 | $ | 8,370 | ||||
Depreciation and amortization | 3,732 | 3,868 | ||||||
Interest expense | 2,793 | 2,462 | ||||||
Interest income | (67 | ) | (81 | ) | ||||
Provision for income taxes | 2,120 | 1,983 | ||||||
EBITDA | 17,550 | 16,602 | ||||||
Gain on sale or disposition of assets and sublease | (83 | ) | (196 | ) | ||||
Loss on early extinguishment of debt | 94 | - | ||||||
Non-cash straight-line rent expense | 274 | 212 | ||||||
Non-recurring severance and other related expenses | 451 | - | ||||||
Acquisition integration and professional fees expense | 183 | 18 | ||||||
Adjusted EBITDA | $ | 18,469 | $ | 16,636 | ||||
Brokerages: | ||||||||
Net income (loss) | $ | 158 | $ | (572 | ) | |||
Depreciation and amortization | 79 | 70 | ||||||
Interest expense | 16 | 4 | ||||||
Interest income | - | - | ||||||
Provision (benefit) for income taxes | 28 | (98 | ) | |||||
EBITDA | 281 | (596 | ) | |||||
Loss on sale or disposition of assets and sublease | 40 | 18 | ||||||
Non-cash straight-line rent expense | (43 | ) | (65 | ) | ||||
Adjusted EBITDA | $ | 278 | $ | (643 | ) | |||
Consolidated: | ||||||||
Net income | $ | 9,130 | $ | 7,798 | ||||
Depreciation and amortization | 3,811 | 3,938 | ||||||
Interest expense | 2,809 | 2,466 | ||||||
Interest income | (67 | ) | (81 | ) | ||||
Provision for income taxes | 2,148 | 1,885 | ||||||
EBITDA | 17,831 | 16,006 | ||||||
Gain on sale or disposition of assets and sublease | (43 | ) | (178 | ) | ||||
Loss on early extinguishment of debt | 94 | - | ||||||
Non-cash straight-line rent expense | 231 | 147 | ||||||
Non-recurring severance and other related expenses | 451 | - | ||||||
Acquisition integration and professional fees expense | 183 | 18 | ||||||
Adjusted EBITDA | $ | 18,747 | $ | 15,993 | ||||
Business_and_Organization_Addi
Business and Organization - Additional Information (Detail) (USD $) | 0 Months Ended | ||
Oct. 07, 2013 | Mar. 31, 2015 | Dec. 31, 2014 | |
RMCO, LLC | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Percentage of common membership units in subsidiaries | 39.56% | 40.42% | 39.89% |
Common Class A | IPO | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Common stock issued at initial public offering | 11,500,000 | ||
Common stock at public offering price per share | $22 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies - Additional Information (Detail) (RMCO, LLC) | Mar. 31, 2015 | Dec. 31, 2014 | Oct. 07, 2013 |
RMCO, LLC | |||
Significant Accounting Policies [Line Items] | |||
Percentage of common membership units in subsidiaries | 40.42% | 39.89% | 39.56% |
Noncontrolling_Interest_Additi
Non-controlling Interest - Additional Information (Detail) (USD $) | 3 Months Ended | 1 Months Ended | |||||
Mar. 31, 2015 | Mar. 31, 2014 | Apr. 30, 2015 | Dec. 31, 2014 | 7-May-15 | Oct. 07, 2013 | ||
Minority Interest [Line Items] | |||||||
Exercise of stock options, Shares | 263,568 | [1] | |||||
Distributions for Taxes, non-controlling unitholders | $65,000 | $2,552,000 | |||||
Other Distributions, non-controlling unitholders | 0 | 0 | |||||
Distribution declaration date | 7-May-15 | ||||||
Distribution payable date | 4-Jun-15 | ||||||
Tax benefit from tax receivable agreements | 67,418,000 | ||||||
Current portion of payable to related parties pursuant to tax receivable agreements | 3,914,000 | 3,914,000 | |||||
Amounts paid to related parties pursuant to Tax Receivable Agreements (TRAs) | 0 | 0 | |||||
Subsequent Event | |||||||
Minority Interest [Line Items] | |||||||
Other Distributions, non-controlling unitholders | 30,830,000 | ||||||
Distributions declared to non-controlling unitholders | 2,217,000 | ||||||
RMCO, LLC | |||||||
Minority Interest [Line Items] | |||||||
Percentage of common membership units in subsidiaries | 40.42% | 39.89% | 39.56% | ||||
RMCO, LLC | Non-controlling interest | |||||||
Minority Interest [Line Items] | |||||||
Total percentage of common stock units | 59.58% | 60.11% | |||||
Common Class A | |||||||
Minority Interest [Line Items] | |||||||
Exercise of stock options, Shares | 263,568 | ||||||
Distributions declared to non-controlling unitholders | $2,217,000 | ||||||
[1] | Cash received from stock option exercises for the three months ended March 31, 2015 was $937,000. The Company recorded a corporate income tax benefit relating to the options exercised during the three months ended March 31, 2015 of $1,105,000 in bAdditional paid-in capitalb in the accompanying Condensed Consolidated Balance Sheets and Condensed Consolidated Statement of Stockholdersb Equity. |
Noncontrolling_Interest_Summar
Non-controlling Interest - Summary of Ownership of the Common Units (Detail) (RMCO, LLC) | Mar. 31, 2015 | Dec. 31, 2014 | Oct. 07, 2013 |
Minority Interest [Line Items] | |||
Total number of common stock units | 29,766,209 | 29,502,641 | |
Total percentage of common stock units | 40.42% | 39.89% | 39.56% |
Total percentage of common stock units | 100.00% | 100.00% | |
Non-controlling interest | |||
Minority Interest [Line Items] | |||
Total number of common stock units | 17,734,600 | 17,734,600 | |
Total percentage of common stock units | 59.58% | 60.11% | |
RE/MAX Holdings outstanding Class A common stock (equal to RE/MAX Holdings Common Units in RMCO) | |||
Minority Interest [Line Items] | |||
Total number of common stock units | 12,031,609 | 11,768,041 | |
Total percentage of common stock units | 40.42% | 39.89% |
Noncontrolling_Interest_Summar1
Non-controlling Interest - Summary of Reconciliation from Income Before Provision for Income Taxes to Net Income (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Noncontrolling Interest [Abstract] | ||
Income before provision for income taxes | $11,278 | $9,683 |
Weighted average ownership percentage of controlling interest | 39.99% | 39.56% |
Income before provision for income taxes attributable to RE/MAX Holdings, Inc. | 4,510 | 3,831 |
Provision for income taxes attributable to RE/MAX Holdings, Inc. | -1,759 | -1,423 |
Net income attributable to RE/MAX Holdings, Inc. | $2,751 | $2,408 |
Noncontrolling_Interest_Summar2
Non-controlling Interest - Summary of Reconciliation of Provision for Income Taxes (Detail) (USD $) | 3 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | |||
Schedule Of Reconciliation Of Provision For Income Taxes [Line Items] | ||||
Provision for income taxes | ($2,148,000) | ($1,885,000) | ||
RE/MAX Holdings, Inc. | ||||
Schedule Of Reconciliation Of Provision For Income Taxes [Line Items] | ||||
Provision for income taxes | -1,759,000 | [1] | -1,423,000 | [1] |
Entities other than RE/MAX Holdings, Inc. | ||||
Schedule Of Reconciliation Of Provision For Income Taxes [Line Items] | ||||
Provision for income taxes | ($389,000) | [2] | ($462,000) | [2] |
[1] | The provision for income taxes attributable to RE/MAX Holdings includes all U.S. federal and state income taxes as well as RE/MAX Holdingsb approximate 40% share of the taxes imposed directly on RE/MAX, LLC, a wholly-owned subsidiary of RMCO, related to tax liabilities in certain foreign jurisdictions of approximately $262,000 and $303,000 for the three months ended March 31, 2015 and 2014, respectively. | |||
[2] | The provision for income taxes attributable to entities other than RE/MAX Holdings represents taxes imposed directly on RE/MAX, LLC related to tax liabilities in certain foreign jurisdictions that are allocated to the non-controlling interest |
Noncontrolling_Interest_Summar3
Non-controlling Interest - Summary of Reconciliation of Provision for Income Taxes (Parenthetical) (Detail) (USD $) | 3 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | |||
Schedule Of Reconciliation Of Provision For Income Taxes [Line Items] | ||||
Controlling interest ownership percentage | 40.00% | |||
Provision for income taxes | $2,148,000 | $1,885,000 | ||
RE/MAX Holdings outstanding Class A common stock (equal to RE/MAX Holdings Common Units in RMCO) | ||||
Schedule Of Reconciliation Of Provision For Income Taxes [Line Items] | ||||
Controlling interest ownership percentage | 40.00% | |||
Provision for income taxes | 1,759,000 | [1] | 1,423,000 | [1] |
RE/MAX Holdings outstanding Class A common stock (equal to RE/MAX Holdings Common Units in RMCO) | Parent share of Subsidiary Tax Liability | ||||
Schedule Of Reconciliation Of Provision For Income Taxes [Line Items] | ||||
Provision for income taxes | $303,000 | $262,000 | ||
[1] | The provision for income taxes attributable to RE/MAX Holdings includes all U.S. federal and state income taxes as well as RE/MAX Holdingsb approximate 40% share of the taxes imposed directly on RE/MAX, LLC, a wholly-owned subsidiary of RMCO, related to tax liabilities in certain foreign jurisdictions of approximately $262,000 and $303,000 for the three months ended March 31, 2015 and 2014, respectively. |
Earnings_Per_Share_and_Dividen2
Earnings Per Share and Dividends - Reconciliation of Numerator and Denominator used in Basic and Diluted EPS Calculations (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Denominator for diluted net income per share of Class A common stock | ||
Basic | 11,817,605 | 11,607,971 |
Add dilutive effect of the following: | ||
Weighted average shares of Class A common stock outstanding, diluted | 12,293,505 | 12,254,474 |
Numerator | ||
Net income attributable to RE/MAX Holdings, Inc. | $2,751 | $2,408 |
Weighted average shares of Class A common stock outstanding | ||
Basic | 11,817,605 | 11,607,971 |
Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock | ||
Basic | $0.23 | $0.21 |
Diluted | $0.22 | $0.20 |
Employee Stock Option | ||
Add dilutive effect of the following: | ||
Denominator for diluted net income per share of Class A common stock add dilutive effect | 458,992 | 602,217 |
Restricted Stock Units (RSUs) | ||
Add dilutive effect of the following: | ||
Denominator for diluted net income per share of Class A common stock add dilutive effect | 16,908 | 44,286 |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) (USD $) | 3 Months Ended | 0 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | Apr. 18, 2014 | 7-May-15 | Apr. 08, 2015 | |
Dividends Payable [Line Items] | |||||
Dividends to Class A common stockholders | $19,383,000 | ||||
Cash dividends declared per share of Class A common stock | $1.63 | $0.06 | |||
Common Class A | |||||
Dividends Payable [Line Items] | |||||
Dividends to Class A common stockholders | 1,500,000 | 725,000 | |||
Cash dividends declared per share of Class A common stock | $0.13 | $0.06 | |||
Distributions declared to non-controlling unitholders | 2,217,000 | ||||
Dividends paid date | 18-Apr-14 | ||||
Special Dividend Declared | Common Class A | |||||
Dividends Payable [Line Items] | |||||
Dividends to Class A common stockholders | 17,883,000 | ||||
Cash dividends declared per share of Class A common stock | $1.50 | ||||
Distributions declared to non-controlling unitholders | 26,602,000 | ||||
Subsequent Event | |||||
Dividends Payable [Line Items] | |||||
Distributions declared to non-controlling unitholders | $2,217,000 | ||||
Subsequent Event | Common Class A | |||||
Dividends Payable [Line Items] | |||||
Cash dividends declared per share of Class A common stock | $0.13 | ||||
Dividends paid date | 4-Jun-15 | 8-Apr-15 | |||
Distributions declared per Class A common stock, record date | 21-May-15 | ||||
Subsequent Event | Special Dividend Declared | Common Class A | |||||
Dividends Payable [Line Items] | |||||
Dividends paid date | 8-Apr-15 |
Dispositions_Additional_Inform
Dispositions - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Apr. 10, 2015 | |
Facility | ||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||
Gain on sale or disposition of assets | ($2,000) | $1,000 | ||
Re Max Caribbean Islands Inc | ||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||
Sale of assets | 100,000 | |||
Business acquisition date | 1-Jan-15 | |||
Term of regional franchise agreements | 20 years | |||
R E M A X Hundred | ||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||
Disposal date | 10-Apr-15 | |||
R E M A X Hundred | Subsequent Event | ||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||
Number of closed additional real estate brokerage offices | 6 | |||
Disposition of assets and liabilities sale price | 450,000 | |||
Gain on sale or disposition of assets | $700,000 |
Dispositions_Summary_of_Assets
Dispositions - Summary of Assets and Liabilities Held for Sale (Detail) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Assets held for sale | |
Escrow cash - restricted | $797 |
Accounts and notes receivable, current portion | 236 |
Other current assets | 50 |
Property and equipment, net of accumulated depreciation | 96 |
Total assets held for sale | 1,179 |
Liabilities held for sale | |
Accounts payable | 270 |
Escrow liabilities | 797 |
Accrued liabilities | 209 |
Deferred revenue | 191 |
Other liabilities | 276 |
Total liabilities held for sale | $1,743 |
Intangible_Assets_and_Goodwill2
Intangible Assets and Goodwill - Components of Company's Intangible Assets (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Finite Lived Intangible Assets [Line Items] | ||
Initial Weighted Average Amortization Period (in years) | 6 years 10 months 24 days | |
Initial Cost | $11,564 | $11,275 |
Accumulated Amortization | -8,705 | -8,550 |
Net Balance | 72,114 | 75,505 |
Net Balance | 2,859 | 2,725 |
Franchise Agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Initial Weighted Average Amortization Period (in years) | 12 years | |
Initial Cost | 162,835 | 162,835 |
Accumulated Amortization | -90,721 | -87,330 |
Net Balance | 72,114 | 75,505 |
Software | ||
Finite Lived Intangible Assets [Line Items] | ||
Initial Weighted Average Amortization Period (in years) | 4 years 3 months 18 days | |
Initial Cost | 8,633 | 8,356 |
Accumulated Amortization | -7,236 | -7,126 |
Net Balance | 1,397 | 1,230 |
Trademarks | ||
Finite Lived Intangible Assets [Line Items] | ||
Initial Weighted Average Amortization Period (in years) | 14 years 7 months 6 days | |
Initial Cost | 2,931 | 2,919 |
Accumulated Amortization | -1,469 | -1,424 |
Net Balance | $1,462 | $1,495 |
Intangible_Assets_and_Goodwill3
Intangible Assets and Goodwill - Additional Information (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $3,549,000 | $3,576,000 |
Intangible_Assets_and_Goodwill4
Intangible Assets and Goodwill - Estimated Future Amortization of Intangible Assets, Other Than Goodwill (Detail) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Finite Lived Intangible Assets Future Amortization Expense Current And Five Succeeding Fiscal Years [Abstract] | |
Remainder of 2015 | $10,551 |
2016 | 14,031 |
2017 | 10,113 |
2018 | 6,497 |
2019 | 6,487 |
Thereafter | 27,294 |
Net Balance | $74,973 |
Intangible_Assets_and_Goodwill5
Intangible Assets and Goodwill - Schedule of Changes in Goodwill (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Beginning Balance | $72,463 |
Effect of changes in foreign currency exchange rates | -294 |
Ending Balance | $72,169 |
Accrued_Liabilities_Additional
Accrued Liabilities - Additional Information (Detail) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Accrued Liabilities Current [Abstract] | |
Liabilities held for sale | $209 |
Accrued_Liabilities_Schedule_o
Accrued Liabilities - Schedule of Accrued Liabilities (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Payables And Accruals [Abstract] | ||
Accrued payroll and related employee costs | $3,758 | $4,519 |
Accrued property taxes | 1,260 | 1,622 |
Accrued professional fees | 1,190 | 947 |
Lease-related accruals | 629 | 773 |
Other | 1,381 | 1,519 |
Accrued liabilities | $8,218 | $9,380 |
Debt_Schedule_of_Debt_Detail
Debt - Schedule of Debt (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Debt Instrument [Line Items] | ||
Less current portion | ($12,725) | ($9,460) |
Debt, net of current portion | 190,605 | 202,213 |
2013 Senior Secured Credit Facility | ||
Debt Instrument [Line Items] | ||
2013 Senior Secured Credit Facility, principal of $520 payable quarterly, matures in July 2020, net of unamortized discount of $864 and $360 as of March 31, 2015 and December 31, 2014, respectively | $203,330 | $211,673 |
Debt_Schedule_of_Debt_Parenthe
Debt - Schedule of Debt (Parenthetical) (Detail) (2013 Senior Secured Credit Facility, USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
2013 Senior Secured Credit Facility | ||
Debt Instrument [Line Items] | ||
Principal payments are due on quarterly | $520 | |
Credit Facility, Maturity Date | 31-Jul-20 | |
Credit Facility, unamortized discount | $864 | $360 |
Debt_Schedule_of_Maturities_of
Debt - Schedule of Maturities of Debt (Detail) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Debt Disclosure [Abstract] | |
Remainder of 2015 | $1,560 |
2016 | 2,080 |
2017 | 2,080 |
2018 | 2,080 |
2019 | 2,080 |
Thereafter | 194,314 |
Maturities of debt | $204,194 |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 0 Months Ended | ||
Mar. 26, 2015 | Mar. 31, 2015 | Mar. 11, 2015 | 31-May-14 | Mar. 31, 2014 | |
Debt Instrument [Line Items] | |||||
Credit facility, borrowing capacity | $15,000,000 | ||||
Loss on early extinguishment of debt | 94,000 | ||||
Excess cash flow payment | 7,320,000 | ||||
London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Basis Spread on Variable Rate | 3.25% | ||||
London Interbank Offered Rate (LIBOR) | Minimum | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Basis Spread on Variable Rate | 1.00% | ||||
Alternative Base Rate | Minimum | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Basis Spread on Variable Rate | 2.00% | ||||
Federal Funds Effective Swap Rate | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | ||||
Eurodollar | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Basis Spread on Variable Rate | 1.00% | ||||
Eurodollar | Maximum | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Basis Spread on Variable Rate | 2.25% | ||||
2013 Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Credit facility, borrowing capacity | 230,000,000 | ||||
Interest rate terms | Interest rates with respect to the amended term loan facility and revolving loan facility are based, at the Companybs option, on (a) adjusted LIBOR, provided that LIBOR shall be no less than 1% plus a maximum applicable margin of 3.25% or (b) ABR, provided that ABR shall be no less than 2%, which is equal to the greater of (1) JPMorgan Chase Bank, N.A.bs prime rate; (2) the Federal Funds Effective Rate plus 0.5% or (3) calculated Eurodollar Rate for a one month interest period plus 1%, plus a maximum applicable margin of 2.25%. The applicable margin is subject to quarterly adjustments based on the Companybs total leverage ratio as defined in the 2013 Senior Secured Credit Facility | ||||
2013 Revolving Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Credit facility, borrowing capacity | 10,000,000 | ||||
Revolving loan facility commitment fee on average daily amount of unused portion | 0.50% | ||||
Outstanding balance of line of credit | 0 | 0 | |||
Line of Credit Facility, Remaining Borrowing Capacity | 10,000,000 | ||||
2013 Amended Senior Secured Credit Facility | London Interbank Offered Rate (LIBOR) | Maximum | |||||
Debt Instrument [Line Items] | |||||
Maximum applicable margin | 0.25% | ||||
2013 Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Unamortized discount in connection with first amendment | 555,000 | ||||
Debt issuance costs | 1,086,000 | ||||
Debt Instrument, expense incurred | 531,000 | ||||
Loss on early extinguishment of debt | 94,000 | ||||
2013 Senior Secured Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Principal payments are due on quarterly | $520,000 | ||||
Credit Facility, Maturity Date | 31-Jul-20 |
Debt_Schedule_of_Senior_Secure
Debt - Schedule of Senior Secured Credit Facility (Detail) (2013 Senior Secured Credit Facility, USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
2013 Senior Secured Credit Facility | ||
Debt Instrument [Line Items] | ||
Carrying amounts | $203,330 | $211,673 |
Estimated fair value | $202,152 | $208,853 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Controlling interest ownership percentage | 40.00% |
EquityBased_Compensation_Addit
Equity-Based Compensation - Additional Information (Detail) (USD $) | 3 Months Ended | 0 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 11, 2015 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Equity-based compensation | $142 | $258 | |
2013 Stock Incentive Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Additional shares available to grant under plan | 1,926,599 | ||
Common Class A | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Restricted stock units granted, value per unit | $32.45 | ||
Restricted Stock Units (RSUs) | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Equity-based compensation | $142 | $258 | |
Restricted Stock Units (RSUs) | Employees | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Restricted stock units granted | 74,893 | ||
Restricted stock units granted, value per unit | $32.45 | ||
Restricted Stock Units (RSUs) | Directors | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Restricted stock units granted | 10,787 | ||
Restricted stock units granted, value per unit | $32.45 |
Summary_of_EquityBased_Compens
Summary of Equity-Based Compensation Activity (Detail) | 3 Months Ended | |
Mar. 31, 2015 | ||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Restricted Stock Units, Balance as of January 1, 2015 | 40,472 | |
Restricted Stock Units, Granted | 85,680 | |
Restricted Stock Units, Forfeited | -2,904 | |
Restricted Stock Units, Balance as of March 31, 2015 | 123,248 | |
Restricted Stock Units, Unvested | 123,248 | |
Options, Balance as of January 1, 2015 | 652,500 | |
Options, Exercised | -263,568 | [1] |
Options, Balance as of March 31, 2015 | 388,932 | |
Options, Vested | 388,932 | |
[1] | Cash received from stock option exercises for the three months ended March 31, 2015 was $937,000. The Company recorded a corporate income tax benefit relating to the options exercised during the three months ended March 31, 2015 of $1,105,000 in bAdditional paid-in capitalb in the accompanying Condensed Consolidated Balance Sheets and Condensed Consolidated Statement of Stockholdersb Equity. |
Summary_of_EquityBased_Compens1
Summary of Equity-Based Compensation Activity (Parenthetical) (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Cash received related to exercise of stock options | $937 |
Excess tax benefit realized on exercise of stock options | $1,105 |
Leadership_Changes_and_Restruc2
Leadership Changes and Restructuring Activities - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Restructuring And Related Activities [Abstract] | ||
Restructuring and related cost, cost incurred during end of year | $3,545,000 | |
Restructuring reserve, short-term portion | 453,000 | 500,000 |
Restructuring reserve, long-term portion | 1,321,000 | 1,488,000 |
Additional severance and other related charges | 451,000 | |
Expenses related to severance and outplacement services | $1,303,000 |
Leadership_Changes_and_Restruc3
Leadership Changes and Restructuring Activities - Summary of Estimated Fair Value Liabilities (Detail) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Restructuring And Related Activities [Abstract] | |
Balance, January 1, 2015 | $2,408,000 |
Additional severance and other related charges | 451,000 |
Accretion | 17,000 |
Cash payments | -744,000 |
Balance, March 31, 2015 | $2,132,000 |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | Mar. 31, 2015 | Oct. 07, 2013 |
In Thousands, unless otherwise specified | ||
Loss Contingencies [Line Items] | ||
HBN liability accrual, impact to financial position and results of operations | $26 | |
Minimum | ||
Loss Contingencies [Line Items] | ||
HBN liability accrual, impact to financial position and results of operations | 26 | |
Maximum | HBN | ||
Loss Contingencies [Line Items] | ||
HBN liability accrual, impact to financial position and results of operations | $2,656 |
Guarantees_Additional_Informat
Guarantees - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | |
31-May-14 | Mar. 31, 2015 | Dec. 31, 2014 | |
Guarantee Obligations [Line Items] | |||
Equity method investment, ownership percentage | 50.00% | ||
Term of line-of-credit agreement | 12 months | ||
Maximum amount of advances requested and unpaid principal balance | $15,000,000 | ||
Guarantee expiration date | 31-May-15 | ||
Outstanding balance of line of credit | $6,895,000 | $4,548,000 | |
Base Rate | |||
Guarantee Obligations [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | ||
Line of credit base interest with floor rate | 3.75% |
RelatedParty_Transactions_Addi
Related-Party Transactions - Additional Information (Detail) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | |||
Accounts payable to affiliates | $1,186,000 | $1,114,000 | |
Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Accounts payable to affiliates | 1,186,000 | 1,114,000 | |
Amounts allocated for services rendered and rent for office space | 416,000 | 562,000 | |
Advertising Funds | |||
Related Party Transaction [Line Items] | |||
Related party transactions expenses | 282,000 | 283,000 | |
Tails Inc. | |||
Related Party Transaction [Line Items] | |||
Accounts payable to affiliates | $1,093,000 | $1,031,000 |
RelatedParty_Transactions_Deta
Related-Party Transactions (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Accounts receivable from affiliates: | ||
Total accounts receivable from affiliates | $231,000 | |
Accounts payable to affiliates: | ||
Total accounts payable to affiliates | -1,186,000 | -1,114,000 |
Affiliated Entity | ||
Accounts receivable from affiliates: | ||
Total accounts receivable from affiliates | 231,000 | |
Accounts payable to affiliates: | ||
Total accounts payable to affiliates | -1,186,000 | -1,114,000 |
Net accounts payable to affiliates | -1,186,000 | -883,000 |
Affiliated Entity | Other Affiliates | ||
Accounts receivable from affiliates: | ||
Total accounts receivable from affiliates | -15,000 | |
Accounts payable to affiliates: | ||
Total accounts payable to affiliates | -1,186,000 | -1,114,000 |
Affiliated Entity | Re Max Of Texas Advertising Fund | ||
Accounts receivable from affiliates: | ||
Total accounts receivable from affiliates | $246,000 |
Segment_information_Additional
Segment information - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2015 | |
Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment_information_Reportable
Segment information - Reportable Segments Revenue and Adjusted EBITDA (Detail) (USD $) | 3 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | |||
Segment Reporting Information [Line Items] | ||||
Consolidated revenue | $44,207,000 | [1] | $41,880,000 | [1] |
Operating Segments | Real Estate Franchise Services | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated revenue | 40,740,000 | [1] | 39,099,000 | [1] |
Operating Segments | Brokerages | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated revenue | $3,467,000 | [1] | $2,781,000 | [1] |
[1] | Transactions between the Real Estate Franchise Services and the Brokerages reportable segments are eliminated in consolidation. Revenues for the Real Estate Franchise Services reportable segment include intercompany amounts paid from the Companybs brokerage services business of $432,000 and $422,000 for the three months ended March 31, 2015 and 2014, respectively. Such amounts are eliminated in the Brokerages reportable segment |
Segment_information_Reportable1
Segment information - Reportable Segments Revenue and Adjusted EBITDA (Parenthetical) (Detail) (USD $) | 3 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | |||
Segment Reporting Information [Line Items] | ||||
Total segment reporting revenues | ($44,207,000) | [1] | ($41,880,000) | [1] |
Intersegment Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Total segment reporting revenues | $432,000 | $422,000 | ||
[1] | Transactions between the Real Estate Franchise Services and the Brokerages reportable segments are eliminated in consolidation. Revenues for the Real Estate Franchise Services reportable segment include intercompany amounts paid from the Companybs brokerage services business of $432,000 and $422,000 for the three months ended March 31, 2015 and 2014, respectively. Such amounts are eliminated in the Brokerages reportable segment |
Segment_information_Segment_Ad
Segment information - Segment Adjusted EBITDA to Net Income (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Segment Reporting Information [Line Items] | ||
Net income | $9,130,000 | $7,798,000 |
Depreciation and amortization | 3,811,000 | 3,938,000 |
Interest expense | 2,809,000 | 2,466,000 |
Interest income | -67,000 | -81,000 |
Provision for income taxes | 2,148,000 | 1,885,000 |
EBITDA | 17,831,000 | 16,006,000 |
(Gain) loss on sale or disposition of assets and sublease | -43,000 | -178,000 |
Loss on early extinguishment of debt | 94,000 | |
Non-cash straight-line rent expense | 231,000 | 147,000 |
Non-recurring severance and other related expenses | 451,000 | |
Acquisition integration and professional fees expense | 183,000 | 18,000 |
Adjusted EBITDA | 18,747,000 | 15,993,000 |
Operating Segments | Real Estate Franchise Services | ||
Segment Reporting Information [Line Items] | ||
Net income | 8,972,000 | 8,370,000 |
Depreciation and amortization | 3,732,000 | 3,868,000 |
Interest expense | 2,793,000 | 2,462,000 |
Interest income | -67,000 | -81,000 |
Provision for income taxes | 2,120,000 | 1,983,000 |
EBITDA | 17,550,000 | 16,602,000 |
(Gain) loss on sale or disposition of assets and sublease | -83,000 | -196,000 |
Loss on early extinguishment of debt | 94,000 | |
Non-cash straight-line rent expense | 274,000 | 212,000 |
Non-recurring severance and other related expenses | 451,000 | |
Acquisition integration and professional fees expense | 183,000 | 18,000 |
Adjusted EBITDA | 18,469,000 | 16,636,000 |
Operating Segments | Brokerages | ||
Segment Reporting Information [Line Items] | ||
Net income | 158,000 | -572,000 |
Depreciation and amortization | 79,000 | 70,000 |
Interest expense | 16,000 | 4,000 |
Interest income | 0 | 0 |
Provision for income taxes | 28,000 | -98,000 |
EBITDA | 281,000 | -596,000 |
(Gain) loss on sale or disposition of assets and sublease | -40,000 | -18,000 |
Non-cash straight-line rent expense | -43,000 | -65,000 |
Adjusted EBITDA | $278,000 | ($643,000) |