DOUG - Earnings call transcript Q4 2021

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Operator

Welcome to Douglas Elliman Inc.’s Fourth Quarter and Full Year 2021 Earnings Conference Call.

During this call, the terms, adjusted net income and adjusted EBITDA will be used. These terms are non-GAAP financial measures and should be considered in addition to, but not as a substitute for other measures of financial performance prepared in accordance with GAAP. Reconciliations to adjusted operating income and adjusted EBITDA are contained in the Company's earnings release, which has been posted to the Investor Relations section of the Company's website located at investors.elliman.com.

Before the call begins, I would like to read a safe harbor statement. results this statements that risks or that that cause during facts not and implied made from could forward-looking materially are are actual by statements forward-looking conference forth are call historical uncertainties those statements. The set differ in to subject to Company's risks These the described Commission Exchange more in and are filings. in detail Securities

Douglas Now, and Chief President to the I Chairman, Lorber. would like M. Officer to Elliman of turn Howard the call over Inc. Executive

Howard Lorber

our employees thank first This and for agents you Douglas milestone us for nationwide. call afternoon Elliman. earnings Good is for joining as our and meaningful a company, our our

will quarter real Joining Chief brokerage Lampen, Financial the our and business. Vector estate market Douglas Elliman Richard me, we why Scott and US and call, strength Operating residential financial Durkin, President are Elman Officer, fourth demonstrate of estate recap our Officer Douglas discuss CEO On residential Bryant from Kirkland, of the Chief our spinoff our performance. continues real discuss Group, today's to Realty,

then will concluding today's questions answer before meetings. your We

Let the of an as strategy key company. me reiterating our independent points by begin

edge estate investments, Elliman year a relations capitalize highly XXXX. US over As our its suite technology, XX.X% potential. brand estate Douglas of accelerating publicly traded as its solutions, in three synonymous real hires, attractive acquisitions, footprint, residential of to with to equity through grown leverages aqua recruitment a and on According team PropTech luxury talent CoreLogic, and Douglas real of suite The technology-enabled dynamics cutting agents to has and into comprehensive US continued our as named positioned market. year the the operational quarter create homeowner With public unleash efficiencies. standalone plans and its as real is marketing of class expansion services company well Elliman and of estate employees, of adoption best value the a talented company, comprehensive growth in of stockholder

underpinnings As flexibility, remain Douglas many are appreciation has Elliman greatest to inventory this XXXX X will in price housing of our in return trend the space one XX.X XXXX, fuel in in The XXXX. particular to of close XXXX momentum billion sales X.X buy. This multiple of billion buyers in we demand for decreased fact, the meaning in the [ph] of significant have XXXX, and Realtors well the XX% by because a tax significant international XXXX, association existing resulted and million in drop estate fact of real from purchases continue, to new billion markets. across leading buyer for growth US is realtors, growth to represented purchases can recovered of in the new from to forecast the increased in are According by expect XXXX. in strong that millennials approximately residential and in market. work from The continue mobility in also dynamics future units we demand of propelled strengthened believe that Elliman's and Douglas The the buyers. generationally transaction entering grow the markets millennial growth and regions, low to importance also related strong further millennials presence even up increased units units luxury mortgages. XXXX home value to transaction sales homes. migration is a the remote the in of traditional the data from in occurred as volume National XX% volume XX% international of the XX driven states, increase overall billion of $XX.X $XX.X this strong record and or X.X in growing gross believe with include of combined continued COVID in million up industry without markets. in our to from as luxury particularly We leading in our markets Association have market Elliman Douglas low who recent national These will inclined in million reported

on meet We and our residential and robust in predicted are the will our recruiting luxury States. attracted demand agents brand. thanks who who drive who We decade's the United among the profile, are to the attracted platform to of pride increased are market Douglas long markets in to agents ourselves our the Elliman our our US optimistic in agents transaction to that XXXX best strength We estate particularly international high buyers successful real luxury most volumes. and return history visible can of and most current class

invaluable the The US by agents Elliman cash, luxury than we home, Our brokerage average supplemented the are and it and revenues price with exclusive Frank interest This in with higher an provides prices luxury rising results singular are be XXXX our markets higher by our per world. our agents environment and competitors. sales ranked less rate to truly rates unprecedented all in are luxury across our in commission our The these sales with and having believe our transaction many our that of strong consistently around impacted closed of are referral leading average and residential sharing important of that knowledge markets is per X,XXX,XXX will our among brand substantially than network. resonates and note markets. with competitors, business a in important and to relationship economics is exposure the best the international global its relationship is luxury community buyers attractive Knight

million markets for is this Our to as average the large our in per complimentary in is grow existing only creates business, home, City, believe transaction X.XX need of national New per to price which a markets, well. above but contain runway outside us our average. not We York well

to share in organic market our recruiting to addition adjacent we significant in opportunities the where our known and markets well have name is growth, In through Elliman increase markets, trusted. major

transaction While XXXX, with $X market value our transaction Florida. approximately continue gross billion or New in home sales close price remains our $XX.X City in strength billion value market close gross sales, South $XX.X in show to or per million Florida South selling and and was New York in City largest average with both York

also York maintained We New market Florida. a in both and strong share City South

increasing to for Florida, are market building quarter quarter market XX% in in our the the presence example, and our West year on was and the the In of significant Miami XX% and the our strength York was New on XX% Our have looking City we the growth Florida experienced and and share Palm into South Naples state. for Coast Petersburg Coast for Recently, Sarasota to Beach, also respectively. St. Gulf on year Tampa. and we share expand and are we and were in from

opened our gross advantage Coast, East and markers. advantages development In working as and our new enhancing particular. Douglas actively with transaction Vero York, Jacksonville. the The is recruit presence to the in Florida and in Elliman presence competency recently value while in star as we platform Douglas a provides DEDM On us and in will we a luxury in us our expand Elliman also marketing XXXX ours, DEDM's to one development continue Texas. experience for Douglas we agents of into core it California $X.X sales competitive is in particular, client serve business pipeline of billion with New allows competitive Beach marketing's marketing are development strong. expand to model markets of Elliman

have aggressively made strategic Texas. grow to in We a current business decision our

and agents Texas us top Austin, for in could a recruit we and talent actively in and Dallas major are We Houston, future. be market the believe

in in adoptions and agents new financial edge solutions Douglas Douglas propTech XX, buy the resources, us selecters, services approach XXXX. us a our disruptive sheet while Douglas of which maintained to that in differentiated and investments brokerage to and with balance edge provides approach competitive also uses by technology. foundation. invests, outlays This our further Unlike technology keeping industry require our cash Elliman invested large backdrop, services. and With models stage on our of can will spending the internal to ancillary boost results. peers position leading balance and Elliman's Douglas us technology integrated our our technology Beyond and to services cutting strong our of asset with at We our keep us strength is build be residential Elliman a subsidiary million of whose market. our move breed put this places growth. light. will sheet easily differentiated We nimble flexible allows and products the Elliman a let on technology believe into companies be Elliman's advantage, December early on and $XXX.X that believe

$XX per diluted ended the Elliman ended attributed in three December or With $XXX.X other compared is Net of months for period. revenues to markets reported share million million million income from of per share Douglas three we in to the estate in primarily to the serve. because period. Elliman The $X.XX income compared brokerage revenues or million strong luxury XXXX and Douglas the year diluted was increased commission months the real residential $XX.X income prior in net $X.XX XXXX market increase December and the XXXX XX, XX, $XXX.X

in EBITDA million ended quarter fourth Elliman compared months of of the adjusted $XX.X three the For Douglas December to million XXXX, XX, reported $XX.X XXXX.

XX, compared the $X.XX fourth three $XX.X $X.XX December net share ended months in million XXXX, per of million adjusted or share to For income of XXXX. the adjusted per or quarter $XX.X was net income

year December in was a $X.XX XX, in in $XX.X loss a year to reported XX, income revenues $X.XX million or $XX.X per the or XXXX share compared XXXX. Douglas XXXX compared diluted December Elliman me, $XXX to of for $X.XX, per the ended million share For the diluted net XXXX million excuse billion $X.XX period. ended Net

the XX, Douglas of $XXX.X $XX.X XXXX. million Elliman XXXX, ended EBITDA to compared For reported adjusted year in million December

compared creating for will have a ended year and the $X.XX was to strong Elliman net company we to $XXX.X markets value We're per we answer to In XX, $XX.X fourth Douglas shareholders. of in questions. million sustainable believe a and demonstrated growth. committed our adjusted to or adjusted the are long $X.XX a operate December that, standalone continued million term XXXX For access to year we as quarter be income XXXX. summary, share excited and have to results full strong share Operator? we public With net happy XXXX, platform or and in per income a for officially

Operator

[Operator instructions] The Roy Jeffries. first question comes Please with proceed. from Ritwik

Ritwik Roy

on Hi Rick Fannon at Jeffries. Dan is Roy for everyone. This

seeming of down yeah, so expenses, non-commission support and with that clearly Would investor return First solid congratulations fourth levels. part quarter to kind on or it. call right your run Appreciate into sales as to that, out. would plus rate you I the down seasonality being numbers going spin this reasonable into for up matter? first guess And first and a marketing of just last or of year is a characterize you XXXX going even quarter a the call way often this that another

Howard Lorber

be still but reasonable it open a and been run some have Well, would hope to rate, positions say, do will fill. we hard we I they've

future. costs So probably that will sometime near to continue people we feel able because We're hoping, we're our means up growth. payroll go our hire that the we in to need the

Bryant Kirkland

is we're for costs, XXXX. we've made XXXX and what discretionary non-activity or million. is I you or down all since million out to real closer except here acquisitions, subtract about made one $XX at cost number think and the between bonus the which the expense, advertising cost, $XX if that compensation $XX bonuses looking And we to roughly million based are reductions call stories we XXXX and of

Ritwik Roy

if may that's Got it. And ask if right. I follow Thank all you. up a

you South into the So Florida alluded into Texas markets. and expanding

in into Going that characterize or terms activity where is where of, sort that you in you'd markets play that of of or kind I where is or guess -- also levels XXXX, you yeah, are

Howard Lorber

Texas. in opened already We

states substantial. making We on just low So cost we're a seems push revenue it as mind month going build, month starting in we no be relates on people, doing basis, and just states. cost like to is do brokers, is to as up states have well really strategize of no a taxes. other and are Florida, lots to state we to that of we're lots taxes low the pretty cost hiring or

a think lots much of We're we probably at And Texan we bigger could in, like So build Nevada. Tennessee really existing build states some at going looking markets, looking then Florida's to but we I at have we are are in, the big in And into point. we can slightly consider a also still different Arizona, state. places that Florida,

Ritwik Roy

taking especially, could I if do look And upcoming future in years? in to cap, Understood. share one the for do cash plans you current a just have at market last relative all the sneak repurchase levels a here, one

Howard Lorber

We, future it's then our have right like It's we the it no share also we should, nice debt, the plan way right we now believe the have cash becomes based If nice would million have to that for any so market over it. $XXX some to consider and of repurchase. on not any in competitors. is

Bryant Kirkland

Yes, quarter I pay the year was a announce be to that for did our the spinoff, shortly. plan first with address We and one expect for conjunction about would the in to per announcement $X.XX coming first that. dividend will the

Ritwik Roy

for my you questions. all addressing Got it. Thank

Operator

Please Thalmann. Mr. proceed. you, John question next with Ladenburg from Roy. Thank The comes Massocca

John Massocca

Good evening.

are York you mix of a York market kind How current versus we transactions of the with pre kind pandemic? New markets, your were specifically in to you trends of this their guess normalized I at seeing? kind point of seeing say market, of what spread are kind kind would close current more So of New what

Howard Lorber

story. Well, pre-pandemic say not let me is the really whole this,

the called it was people And a from many Thank Peter although and that of government. going living with part a saying around were it surely for. and that just when have happen. they the this away to recording floated it, looking living right was City sorry think tax help city taxes what be Part COVID before marketplace, mortgage the 'XX, a tax they is big 'XX. because that taxes, in different the seen there I type of that change taxes down so as about a is probably think transfer because that was but and God. mayor. starting in that New were of the than a But passed 'XX, think [ph] good suffered I that people trended say, 'XX, But didn't I COVID, feeling far renewed York is face much how better that's to things people But not to yet yet go. pickup fresh was in then we and of change It 'XX. the mansion

a end always to a So on bullish business. back we're my our York we're and be of I remarks high as business was good of pretty international pretty mentioned then that And New in City. the that's buyers expecting been part lot and

So, this happy way we're it's quite going New in the York at point.

John Massocca

target markets it's rough create York would a in, City going expanding understanding of markets that's guess you're I normalized the because expect in at a bit of kind if a as kind of portfolio or today, further transactions what of New is But moving into look the to and a more diversity. new kind like of it you percentage? mix of terms you're you

Howard Lorber

would business coming York? the You much New of mean total how be from

John Massocca

Correct.

Howard Lorber

billion. out Well, did billion $XX the $XX We Yeah. $XX billion. of

$XX of out XX% was some that billion. So

been look, New in was been matured. New York the in company completely started yeah, So in We've other York, the XXXX. markets have

been long in New a time. York So for very it's City

say, So it's percentage because could the the but, expect go growth stay we big down in stable, New growth York in and Texas, because hard area. to California could big we, growth Boston in big but

on lot buyers. to right or isn't but worried people worried. But about going exactly know they quite things I think don't going to strong of, figure what's come I now, how what you who from we're are react tell believe business. important or reason can't that go of how it the I percentages is So worried, state. come is. from I honestly going sort how or to more could are you do what percentage and A that

worried market. priced So everyone for rates up, buy want that's to they'll an out buyers. the added be going them of a of And about away don't you interest the afraid that's market in when they top of and we've going the add that, to rates then what history inflation seen make is spook up to the their was They're interest start now. as come opportunity. decision on because to buyers reason lose But fact right going that

in So years of a I we're a market. for few still think strong very

John Massocca

sheet you about availability sheet deployment of in that and maybe balance acquisitions balance through position we position. of more expansion and dry of And How think mentioned Okay. cash kind the powder doing should terms of kind of kind and M&A?

Howard Lorber

much acquisitions. increase there's new Well, business only four increase right. pretty the the only get there's could there's could only, -- and could we buyback. We could that. four asked grow make to we where it's We regions. there's someone our could necessary more agents about do -- We do time could stock dividend, only We things spending a open

the in of place really to the any that's not I only said, isn't. we're spend money. Like an There enviable having really position So debt.

around that don't buybacks then expansion, you always to million. have is that So if stockholders but do than pretty we'll business or debt. -- this a some to we'll it's better. acquisitions next nothing more we're It's we people argue we the some people better. think something there's made like decide. money dividend $XXX the a the half of besides continue going make have point we At our type And and at the whether Half trade-off, have again, debt. regular could point like think any and the year for as and stock raising corner. we'll simple pay, We're our lot year, We

full end year of are but time and do surely We we at to where not least to as year. see ourselves to the those company a the quickly. a very have deal public we'll So things going with want the when any we're of it at comes, give

John Massocca

the queue. very back you much. That's very in helpful. Okay. Thank I'll hop

Okay.

Operator

earnings are This we call. and those Mr. Massocca, have We Thank our conclude the disconnect. Thank good call. may on fourth you Elliman and today. gentlemen, a the questions you will ladies all have you, evening XXXX Douglas joining for for now that quarter us you hope conference

Howard Lorber	President and CEO of Vector Group
Bryant Kirkland	CFO
Richard Lampen	COO
Scott Durkin	President and CEO of Douglas Elliman Realty, LLC
Ritwik Roy	Jeffries
John Massocca	Ladenburg Thalmann

Douglas Elliman (DOUG) 2 Mar 222021 Q4 Earnings call transcript