RE/MAX : Second Quarter 2020 Earnings Presentatio

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The real estate agent remains the most important part of the transaction.

Importantly, consumers, and millennials in particular, are using agents at an increased rate as they want a professional advisor to offer guidance, explain options and validate their decisions.

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							As of
	June 30,		March 31,		December 31,		September 30,	June 30,		March 31,		December 31,		September 30,
	2020	2020	2019	2019			2019	2019	2018	2018
Agent Count:
U.S.
Company-ow ned Regions	47,886	48,840	49,267	48,576			48,748	48,904	49,318	50,342
Independent Regions	13,791	13,828	13,854	13,972			13,952	13,760	13,804	13,948
U.S. Total	61,677	62,668	63,121	62,548			62,700	62,664	63,122	64,290
Canada
Company-ow ned Regions	6,102	6,217	6,338	6,402			6,510	6,549	6,702	6,858
Independent Regions	15,193		15,306		15,229		15,117			14,923		14,818		14,625		14,550
Canada Total	21,295		21,523		21,567		21,519			21,433		21,367		21,327		21,408
U.S. and Canada Total	82,972	84,191	84,688	84,067			84,133	84,031	84,449	85,698
Outside U.S. and Canada
Independent Regions	48,933		47,625		46,201		44,191			42,887		41,501		39,831		38,207
Outside U.S. and Canada Total	48,933		47,625		46,201		44,191			42,887		41,501		39,831		38,207
Total	131,905		131,816		130,889		128,258			127,020		125,532		124,280		123,905
Net change in agent count compared to the prior period	89	927	2,631	1,238			1,488	1,252	375	823

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		Three Months Ended			Six Months Ended
		June 30,				June 30,
(Amounts in 000s)
	2020			2019			2020			2019
Net income	$	5,924	$	16,133		$	11,214	$	24,390
Depreciation and amortization		6,412			5,541			12,722			11,099
Interest expense		2,187			3,154			4,869			6,309
Interest income		(34)			(342)			(303)			(662)
Provision for income taxes		706			3,186			4,496			5,094
EBITDA		15,195			27,672			32,998			46,230
(Gain) loss on sale or disposition of assets		(11)			(16)			(22)			363
Equity-based compensation expense		2,747			1,796			4,933			5,847
Acquisition-related expense (1)		328			15			894			87
Gain on reduction in tax receivable agreement liability		500			-			-			-
Fair value adjustments to contingent consideration (2)		150			415			(355)			345
Adjusted EBITDA (3)
$	18,909	$	29,882		$	38,448	$	52,872
Adjusted EBITDA Margin (3)
	36.2	%		41.9	%		31.4	%		37.1	%

Footnote:

1. Acquisition-relatedexpense includes legal, accounting, advisory and consulting fees incurred in connection w ith the acquisition and integration of acquired companies.
2. Fair value adjustments to contingent consideration include amounts recognized for changes in the estimated fair value of the contingent consideration liability.
3. Non-GAAPmeasure. See the end of this press release for definitions of non-GAAP measures.

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					Three Months Ended			Six Months Ended
					June 30,				June 30,
(Amounts in 000s)					2020			2019			2020			2019
Net income				$	5,924		$	16,133		$	11,214		$	24,390
Amortization of acquired intangible assets				4,849			4,466			9,698			8,931
Provision for income taxes					706			3,186			4,496			5,094
Add-backs:
(Gain) loss on sale or disposition of assets				(11)			(16)			(22)			363
Equity-based compensation expense				2,747			1,796			4,933			5,847
Acquisition-related expense	(1)				328			15			894			87
Gain on reduction in tax receivable agreement liability			500			-			-			-
Fair value adjustments to contingent consideration	(2)			150			415			(355)			345
Adjusted pre-tax net income					15,193			25,995			30,858			45,057
Less: Provision for income taxes at 24% (3)				(3,646)			(6,239)			(7,406)			(10,814)
Adjusted net income (4)			$	11,547	$	19,756	$	23,452	$	34,243
Total basic pro forma shares outstanding				30,683,563			30,367,921			30,608,714			30,351,542
Total diluted pro forma shares outstanding				30,706,486			30,393,558			30,649,859			30,385,480
Adjusted net income basic earnings per share (4)		$	0.38		$	0.65		$	0.77		$	1.13
Adjusted net income diluted earnings per share (4		$	0.38	$	0.65		$	0.77	$	1.13

Footnote:

1. Acquisition-relatedexpense includes legal, accounting, advisory and consulting fees incurred in connection w ith the acquisition and integration of acquired companies.
2. Fair value adjustments to contingent consideration include amounts recognized for changes in the estimated fair value of the contingent consideration liability.
3. 24% is the combined federal and state statutory rate and is an estimate of our long-term tax rate assuming the full exchange of all outstanding non- controlling interests for Class A common stock. It excludes the impacts of (a) our partnership structure, (b) unusual, non-recurring tax matters, such as the conversion of First to an LLC, and (c) low er income for 2020 due to the pandemic, w hich is causing distorted impacts to differences betw een tax and GAAP accounting, and causing certain foreign taxes to be nondeductible in 2020 w hen they otherw ise have been and w e expect w ill be again in the future.
4. Non-GAAPmeasure. See the end of this press release for definitions of non-GAAP measures.

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		Six months ended
		June 30,
		2020			2019
Cash flow from operations	$	16,323	$	32,983
Less: Purchases of property, equipment and capitalization of softw are		(3,102)			(7,378)
Decreases in restricted cash of the Marketing Funds (1)		5,848			4,868
Free cash flow (2)		19,069			30,473
Free cash flow		19,069			30,473
Less: Tax/Other non-dividend distributions to RIHI		(40)			(2,031)
Free cash flow after tax/non-dividend distributions to RIHI (2)
	19,029			28,442
Free cash flow after tax/non-dividend distributions to RIHI		19,029			28,442
Less: Debt principal payments		(1,322)			(1,311)
Unencumbered cash generated (2)
$	17,707	$	27,131
Summary
Cash flow from operations	$	16,323	$	32,983
Free cash flow (2)	$	19,069	$	30,473
Free cash flow after tax/non-dividend distributions to RIHI (2)	$	19,029	$	28,442
Unencumbered cash generated (2)	$	17,707	$	27,131
Adjusted EBITDA	$	38,448	$	52,872
Free cash flow as % of Adjusted EBITDA (2)		49.6%			57.6%
Free cash flow less distributions to RIHI as % of Adjusted EBITDA (2)		49.5%			53.8%
Unencumbered cash generated as % of Adjusted EBITDA (2)		46.1%			51.3%

Footnote:

1. This line reflects any subsequent changes in the restricted cash balance (w hich under GAAP reflects as either (a) an increase or decrease in cash flow from operations or (b) an incremental amount of purchases of property and equipment and capitalization of developed softw are) so as to remove the impact of changes in restricted cash in determining free cash flow .
2. Non-GAAPmeasure. See the end of this presentation for definitions of non-GAAP measures.

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