UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 8-K
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): May 6, 2021
 
RE/MAX Holdings, Inc.
(Exact name of registrant as specified in its charter)

Delaware	001-36101	80-0937145	
(State or other jurisdiction of
incorporation or organization)	(Commission
File Number)	(IRS Employer
Identification No.)	
 
5075 South Syracuse Street
Denver, Colorado 80237
(Address of principal executive offices, including Zip code)
 
(303) 770-5531
(Registrant’s telephone number, including area code)

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
 	☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 	☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 	☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 	☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	 	Trading Symbol(s)	 	Name of Each Exchange on Which Registered	
Class A Common Stock
$0.0001 par value per share	 	RMAX	 	New York Stock Exchange	
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 

 
Item 2.02. Results of Operations and Financial Conditions. *
 
On May 6, 2021, RE/MAX Holdings, Inc. issued a press release announcing its financial results for the quarter ended March 31, 2021. The full text of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
 
Item 9.01.    Financial Statements and Exhibits. *  

Exhibit No.	Description	
99.1	Press Release issued on May 6, 2021	
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)	
   The information contained in Items 2.02 and 9.01 of this Current Report on Form 8-K is being “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any registration statement or other filings of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be set forth by specific reference in such filing.

 

 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 	RE/MAX HOLDINGS, INC.	

Date: May 6, 2021	By:	/s/ Karri Callahan	
 	 	Karri Callahan	
 	 	Chief Financial Officer	

 

Exhibit 99.1
RE/MAX Holdings, Inc. Reports First Quarter 2021 Results
DENVER, May 6, 2021 /PRNewswire/ --
First Quarter 2021 Highlights
 (Compared to first quarter 2020 unless otherwise noted)
·	Total agent count increased 6.4% to 140,214 agents
·	U.S. and Canada combined agent count increased 0.7% to 84,771 agents
·	Total open Motto Mortgage franchises increased 27.1% to 150 offices1
·	Total Revenue of $72.3 million; Revenue excluding the Marketing Funds increased 2.7% to $54.2 million
·	Net income attributable to RE/MAX Holdings, Inc. of $1.1 million and earnings per diluted share (GAAP EPS) of $0.06
·	Adjusted EBITDA2 of $23.2 million, Adjusted EBITDA margin2 of 32.0% and Adjusted earnings per diluted share (Adjusted EPS2) of $0.46
Operating Statistics as of April 30, 2021
 (Compared to April 30, 2020 unless otherwise noted)
·	Total agent count increased 6.7% to 139,862 agents
·	U.S. and Canada combined agent count increased 2.0% to 85,076 agents
·	Total open Motto Mortgage franchises increased 27.9% to 156 offices1
RE/MAX Holdings, Inc. (the "Company" or "RE/MAX Holdings") (NYSE: RMAX), parent company of RE/MAX, one of the world's leading franchisors of real estate brokerage services, and Motto Mortgage ("Motto"), the first national mortgage brokerage franchise brand in the U.S., today announced operating results for the first quarter ended March 31, 2021.
"A robust housing market and record Motto growth helped drive strong financial results for the first quarter," stated Adam Contos, RE/MAX Holdings Chief Executive Officer. "During this period, we also saw our largest year-over-year increase in agent count in over a decade, adding more than 8,000 new agents, led by healthy agent growth in Canada and double-digit agent growth globally. Motto continued its record pace of franchise sales, selling the most franchises in its history for the trailing twelve month period ended March 31, 2021. We now have over 150 open Motto offices in almost 40 states. We are encouraged that many of the strong tailwinds we saw in the first quarter continued in April."
Contos continued, "We continue to increase and enhance our value proposition for both of our franchise networks. At our recent RE/MAX agent conference, we introduced an opportunity for virtually all U.S. RE/MAX affiliates to access health benefits as well as new tools, technology, and educational resources for the exclusive benefit of our agents, teams and brokers. Within our mortgage business we continue to ramp up our wemlo acquisition, offering affordable, dependable loan processing services to more of our Motto franchises each week."
First Quarter 2021 Operating Results
Agent Count
The following table compares agent count as of March 31, 2021 and 2020:

			As of March 31, 		Change	
			2021		2020		#		%	
U.S.			62,261		62,668		(407)		(0.6)	
Canada			22,510		21,523		987		4.6	
Subtotal			84,771		84,191		580		0.7	
Outside the U.S. & Canada			55,443		47,625		7,818		16.4	
Total			140,214		131,816		8,398		6.4	

Revenue
RE/MAX Holdings generated total revenue of $72.3 million in the first quarter of 2021, an increase of $2.0 million, or 2.9%, compared to $70.3 million in the first quarter of 2020. Total revenue grew primarily due to increased broker fees stemming from higher total transactions per agent and rising home prices, incremental revenue from acquisitions, Motto growth, and lower agent recruiting initiatives. Revenue growth was partially offset by lower events-related revenue due to COVID-19 restrictions and continued attrition of booj's legacy customer base. Recurring revenue streams, which consist of continuing franchise fees and annual dues, increased $1.0 million, or 3.0%, compared to the first quarter of 2020 and accounted for 62.9% of revenue (excluding the Marketing Funds) in the first quarter of 2021, compared to 62.7% in the comparable period in 2020.
Operating Expenses
Total operating expenses were $68.8 million for the first quarter of 2021, an increase of $10.2 million, or 17.5%, compared to $58.5 million in the first quarter of 2020. First quarter total operating expenses increased primarily due to higher selling, operating and administrative expenses. Excluding the Marketing Funds, first quarter 2021 operating expenses totaled $50.6 million, an increase of $9.6 million or 23.5% compared to $41.0 million in the first quarter of 2020.
Selling, operating and administrative expenses were $43.7 million in the first quarter of 2021, an increase of $9.0 million, or 26.0%, compared to the first quarter of 2020 and, excluding the Marketing Funds, represented 80.7% of revenue, compared to 65.7% in the prior-year period. Selling, operating and administrative expenses increased primarily due to higher equity-based compensation expense related to acquisitions, including $5.5 million from the acceleration of the expense of certain awards; higher bonus expense due to the elimination of the corporate bonus in 2020; and increased personnel costs largely from acquisitions. First quarter 2021 selling, operating and administrative expenses were partially offset by a reduction in travel and events expenses and lower bad debt expense due to strong collections.
Depreciation and amortization expenses increased primarily due to placing internally developed software into service and incremental acquisition-related amortization expense.
Net Income and GAAP EPS
Net income attributable to RE/MAX Holdings was $1.1 million for the first quarter of 2021, a decrease of $1.5 million compared to the first quarter of 2020. Reported basic and diluted GAAP EPS were each $0.06 for the first quarter of 2021 compared to $0.15 each in the first quarter of 2020.
Adjusted EBITDA and Adjusted EPS
Adjusted EBITDA was $23.2 million for the first quarter of 2021, an increase of $3.6 million or 18.5% from the first quarter of 2020. Adjusted EBITDA increased primarily due to higher broker fee revenue as well as reduced bad expense from improved collections, partially offset by higher bonus expense due to the elimination of the corporate bonus in the prior year, and higher legal fees. Adjusted EBITDA margin was 32.0% in the first quarter of 2021, up compared to 27.8% in the first quarter of 2020.
Adjusted basic and diluted EPS were $0.47 and $0.46, respectively, for the first quarter of 2021 compared to Adjusted basic and diluted EPS of $0.39 for the first quarter of 2020. The ownership structure used to calculate Adjusted basic and diluted EPS for the quarter ended March 31, 2021 assumes RE/MAX Holdings owned 100% of RMCO, LLC ("RMCO"). The weighted average ownership RE/MAX Holdings had in RMCO was 59.6% for the quarter ended March 31, 2021.
Balance Sheet
As of March 31, 2021, the Company had cash and cash equivalents of $102.6 million, an increase of $1.3 million from December 31, 2020. As of March 31, 2021, the Company had $223.0 million of outstanding debt, net of an unamortized debt discount and issuance costs, a decrease of $0.6 million compared to $223.6 million as of December 31, 2020.
Dividend
On May 5, 2021, the Company's Board of Directors approved a quarterly cash dividend of $0.23 per share of Class A common stock. The quarterly dividend is payable on June 2, 2021, to shareholders of record at the close of business on May 19, 2021.
Outlook
The Company's second quarter and full-year 2021 Outlook assumes no further currency movements, acquisitions or divestitures.
For the second quarter of 2021, RE/MAX Holdings expects:
·	Agent count to increase 7.0% to 8.0% over second quarter 2020;
·	Revenue in a range of $74.0 million to $78.0 million (including revenue from the Marketing Funds in a range of $17.5 million to $18.5 million); and
·	Adjusted EBITDA in a range of $25.5 million to $28.5 million.
For the full-year 2021, RE/MAX Holdings is increasing its agent count guidance and expects:
·	Agent count to increase 5.0% to 6.0% over full-year 2020, up from 4.0% to 5.0%;
·	Revenue in a range of $300.0 million to $310.0 million (including revenue from the Marketing Funds in a range of $71.0 million to $74.0 million), and
·	Adjusted EBITDA in a range of $103.0 million to $107.0 million.
The effective U.S. GAAP tax rate attributable to RE/MAX Holdings is estimated to be between 22% and 24% in 2021.
Webcast and Conference Call
The Company will host a conference call for interested parties on Friday, May 7, 2021, beginning at 8:30 a.m. Eastern Time. Interested parties can access the conference call using the link below:
http://www.directeventreg.com/registration/event/8293584
Interested parties can access a live webcast through the Investor Relations section of the Company's website at http://investors.remax.com. Please dial-in or join the webcast 10 minutes before the start of the conference call. An archive of the webcast will be available on the Company's website for a limited time as well.
Basis of Presentation
Unless otherwise noted, the results presented in this press release are consolidated and exclude adjustments attributable to the non-controlling interest.
Footnotes:
1Total open Motto Mortgage franchises includes only "bricks and mortar" offices with a unique physical address with rights granted by a full franchise agreement with Motto Franchising, LLC and excludes any "virtual" offices or "Branchises".
2Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EPS are non-GAAP measures. These terms are defined at the end of this release. Please see Tables 5 and 6 appearing later in this release for reconciliations of these non-GAAP measures to the most directly comparable GAAP measures.
About RE/MAX Holdings, Inc.
RE/MAX Holdings, Inc. (NYSE: RMAX) is one of the world's leading franchisors in the real estate industry, franchising real estate brokerages globally under the RE/MAX® brand, and mortgage brokerages within the U.S. under the Motto® Mortgage brand. RE/MAX was founded in 1973 by David and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. Now with nearly 140,000 agents across over 110 countries and territories, nobody in the world sells more real estate than RE/MAX, as measured by total residential transaction sides. Dedicated to innovation and change in the real estate industry, RE/MAX launched Motto Franchising, LLC, a ground-breaking mortgage brokerage franchisor, in 2016. Motto Mortgage has grown to over 150 offices across almost 40 states.
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are often identified by the use of words such as "believe," "intend," "expect," "estimate," "plan," "outlook," "project," "anticipate," "may," "will," "would" and other similar words and expressions that predict or indicate future events or trends that are not statements of historical matters. Forward-looking statements include statements related to: agent count; franchise sales; revenue; operating expenses; the Company's outlook for the second quarter and full year 2021; dividends; non-GAAP financial measures; estimated effective tax rates for 2021; housing and mortgage market conditions; the rollout of booj in Canada; the enhancement of the Company's value proposition; the continued ramp up of the Company's wemlo acquisition; and the Company's strategic and operating plans and business models. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily accurately indicate the times at which such performance or results may be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. These risks and uncertainties include the global COVID-19 pandemic, which continues to pose significant and widespread risks to the Company's business, including the Company's agents, loan originators, franchisees and employees, as well as home buyers and sellers. Other important risks and uncertainties include, without limitation, (1) changes in the real estate market or interest rates and availability of financing, (2) changes in business and economic activity in general, (3) the Company's ability to attract and retain quality franchisees, (4) the Company's franchisees' ability to recruit and retain real estate agents and mortgage loan originators, (5) changes in laws and regulations, (6) the Company's ability to enhance, market, and protect its brands, including the RE/MAX and Motto Mortgage brands, (7) the Company's ability to implement its technology initiatives, and (8) fluctuations in foreign currency exchange rates, and those risks and uncertainties described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission ("SEC") and similar disclosures in subsequent periodic and current reports filed with the SEC, which are available on the investor relations page of the Company's website at www.remax.com and on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Except as required by law, the Company does not intend, and undertakes no obligation, to update this information to reflect future events or circumstances.

TABLE 1	
RE/MAX Holdings, Inc.
 Consolidated Statements of Income
 (In thousands, except share and per share amounts)
 (Unaudited)	

		Three Months Ended March 31, 	
		2021		2020	
Revenue:							
Continuing franchise fees		$	25,374		$	24,143	
Annual dues			8,672			8,921	
Broker fees			11,953			9,444	
Marketing Funds fees			18,145			17,522	
Franchise sales and other revenue			8,151			10,242	
Total revenue			72,295			70,272	
Operating expenses:							
Selling, operating and administrative expenses			43,676			34,677	
Marketing Funds expenses			18,145			17,522	
Depreciation and amortization			6,937			6,310	
Total operating expenses			68,758			58,509	
Operating income			3,537			11,763	
Other expenses, net:							
Interest expense			(2,098)			(2,682)	
Interest income			163			269	
Foreign currency transaction gains (losses)			(20)			(270)	
Total other expenses, net			(1,955)			(2,683)	
Income before provision for income taxes			1,582			9,080	
Provision for income taxes			58			(3,790)	
Net income		$	1,640		$	5,290	
Less: net income attributable to non-controlling interest			548			2,659	
Net income attributable to RE/MAX Holdings, Inc.		$	1,092		$	2,631	
							
Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock							
Basic		$	0.06		$	0.15	
Diluted		$	0.06		$	0.15	
Weighted average shares of Class A common stock outstanding							
Basic			18,496,532			17,974,264	
Diluted			18,866,727			18,033,631	
Cash dividends declared per share of Class A common stock		$	0.23		$	0.22	

TABLE 2	
RE/MAX Holdings, Inc.
Consolidated Balance Sheets
 (In thousands, except share and per share amounts)
(Unaudited)	

		March 31, 		December 31, 	
		2021		2020	
Assets							
Current assets:							
Cash and cash equivalents		$	102,632		$	101,355	
Restricted cash			21,500			19,872	
Accounts and notes receivable, current portion, less allowances of $11,705 and $11,724, respectively			29,544			29,985	
Income taxes receivable			2,158			1,222	
Other current assets			14,715			13,938	
Total current assets			170,549			166,372	
Property and equipment, net of accumulated depreciation of $15,292 and $14,731, respectively			9,184			7,872	
Operating lease right of use assets			37,816			38,878	
Franchise agreements, net			68,337			72,196	
Other intangible assets, net			28,284			29,969	
Goodwill			176,008			175,835	
Deferred tax assets, net			49,162			48,855	
Income taxes receivable, net of current portion			1,980			1,980	
Other assets, net of current portion			17,068			15,435	
Total assets		$	558,388		$	557,392	
Liabilities and stockholders' equity							
Current liabilities:							
Accounts payable		$	5,782		$	2,108	
Accrued liabilities			67,208			68,571	
Income taxes payable			9,884			9,579	
Deferred revenue			24,689			25,282	
Current portion of debt			2,356			2,428	
Current portion of payable pursuant to tax receivable agreements			3,590			3,590	
Operating lease liabilities			5,826			5,687	
Total current liabilities			119,335			117,245	
Debt, net of current portion			220,676			221,137	
Payable pursuant to tax receivable agreements, net of current portion			29,974			29,974	
Deferred tax liabilities, net			496			490	
Deferred revenue, net of current portion			19,601			19,864	
Operating lease liabilities, net of current portion			48,794			50,279	
Other liabilities, net of current portion			5,411			5,722	
Total liabilities			444,287			444,711	
Commitments and contingencies							
Stockholders' equity:							
Class A common stock, par value $.0001 per share, 180,000,000 shares authorized; 18,719,248 and 18,390,691 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively			2			2	
Class B common stock, par value $.0001 per share, 1,000 shares authorized; 1 share issued and outstanding as of March 31, 2021 and December 31, 2020, respectively			—			—	
Additional paid-in capital			498,810			491,422	
Retained earnings			21,433			25,139	
Accumulated other comprehensive income, net of tax			653			612	
Total stockholders' equity attributable to RE/MAX Holdings, Inc.			520,898			517,175	
Non-controlling interest			(406,797)			(404,494)	
Total stockholders' equity			114,101			112,681	
Total liabilities and stockholders' equity		$	558,388		$	557,392	

TABLE 3	
RE/MAX Holdings, Inc.
 Consolidated Statements of Cash Flows
 (In thousands)
 (Unaudited)	
	
		Three Months Ended March 31, 	
		2021		2020	
Cash flows from operating activities:							
Net income		$	1,640		$	5,290	
Adjustments to reconcile net income to net cash provided by operating activities:							
Depreciation and amortization			6,937			6,310	
Bad debt expense			287			3,435	
Equity-based compensation expense			12,054			2,186	
Deferred income tax expense			(320)			2,241	
Fair value adjustments to contingent consideration			(280)			(505)	
Non-cash lease expense (benefit)			(284)			—	
Other, net			87			(504)	
Changes in operating assets and liabilities			711			(4,804)	
Net cash provided by operating activities			20,832			13,649	
Cash flows from investing activities:							
Purchases of property, equipment and capitalization of software			(4,381)			(1,965)	
Net cash used in investing activities			(4,381)			(1,965)	
Cash flows from financing activities:							
Payments on debt			(660)			(660)	
Distributions paid to non-controlling unitholders			(2,889)			(2,777)	
Dividends and dividend equivalents paid to Class A common stockholders			(4,798)			(4,275)	
Payments related to tax withholding for share-based compensation			(5,291)			(2,268)	
Net cash used in financing activities			(13,638)			(9,980)	
Effect of exchange rate changes on cash			92			(205)	
Net increase in cash, cash equivalents and restricted cash			2,905			1,499	
Cash, cash equivalents and restricted cash, beginning of period			121,227			103,601	
Cash, cash equivalents and restricted cash, end of period		$	124,132		$	105,100	

TABLE 4	
RE/MAX Holdings, Inc.
 Agent Count
 (Unaudited)	
	
		As of		
		March 31,		December 31,		September 30,		June 30, 		March 31,		December 31,		September 30,		June 30,		
		2021		2020		2020		2020		2020		2019		2019		2019		
Agent Count:																		
U.S.																		
Company-Owned Regions		48,041		48,212		48,263		47,886		48,840		49,267		48,576		48,748		
Independent Regions		14,220		14,091		14,041		13,791		13,828		13,854		13,972		13,952		
U.S. Total		62,261		62,303		62,304		61,677		62,668		63,121		62,548		62,700		
Canada																		
Company-Owned Regions		6,262		6,182		6,135		6,102		6,217		6,338		6,402		6,510		
Independent Regions		16,248		15,765		15,363		15,193		15,306		15,229		15,117		14,923		
Canada Total		22,510		21,947		21,498		21,295		21,523		21,567		21,519		21,433		
U.S. and Canada Total		84,771		84,250		83,802		82,972		84,191		84,688		84,067		84,133		
Outside U.S. and Canada																		
Independent Regions		55,443		53,542		50,967		48,933		47,625		46,201		44,191		42,887		
Outside U.S. and Canada Total		55,443		53,542		50,967		48,933		47,625		46,201		44,191		42,887		
Total		140,214		137,792		134,769		131,905		131,816		130,889		128,258		127,020		

TABLE 5	
RE/MAX Holdings, Inc.
 Adjusted EBITDA Reconciliation to Net Income
 (In thousands, except percentages)
 (Unaudited)	
	
		Three Months Ended		
		March 31, 		
		2021		2020		
Net income		$	1,640		$	5,290		
Depreciation and amortization			6,937			6,310		
Interest expense			2,098			2,682		
Interest income			(163)			(269)		
Provision for income taxes			(58)			3,790		
EBITDA			10,454			17,803		
(Gain) loss on sale or disposition of assets			(11)			(11)		
Equity-based compensation expense			12,054			2,186		
Acquisition-related expense (1)			943			566		
Gain on reduction in tax receivable agreement liability			—			(500)		
Fair value adjustments to contingent consideration (2)			(280)			(505)		
Adjusted EBITDA (3)		$	23,160		$	19,539		
Adjusted EBITDA Margin (3)			32.0	%		27.8	%	

(1)	Acquisition-related expense includes personnel, legal, accounting, advisory and consulting fees incurred in connection with acquisition activities 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 liabilities.	
(3)	Non-GAAP measure. See the end of this press release for definitions of non-GAAP measures.	

TABLE 6	
RE/MAX Holdings, Inc.
 Adjusted Net Income and Adjusted Earnings per Share
 (In thousands, except share and per share amounts)
 (Unaudited)	
	
		Three Months Ended	
		March 31, 	
		2021		2020	
Net income		$	1,640		$	5,290	
Amortization of acquired intangible assets			4,855			4,849	
Provision for income taxes			(58)			3,790	
Add-backs:							
(Gain) loss on sale or disposition of assets			(11)			(11)	
Equity-based compensation expense			12,054			2,186	
Acquisition-related expense (1)			943			566	
Gain on reduction in tax receivable agreement liability			—			(500)	
Fair value adjustments to contingent consideration (2)			(280)			(505)	
Adjusted pre-tax net income			19,143			15,665	
Less: Provision for income taxes at 24% (3)			(4,594)			(3,760)	
Adjusted net income (5)		$	14,549		$	11,905	
							
Total basic pro forma shares outstanding			31,056,132			30,533,864	
Total diluted pro forma shares outstanding			31,426,327			30,593,231	
							
Adjusted net income basic earnings per share (4)		$	0.47		$	0.39	
Adjusted net income diluted earnings per share (4)		$	0.46		$	0.39	

(1)	Acquisition-related expense includes personnel, legal, accounting, advisory and consulting fees incurred in connection with acquisition activities 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 liabilities. 	
(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 and wemlo to LLCs, and (c) lower income for 2020 due to the pandemic.	
(4)	Non-GAAP measure. See the end of this press release for definitions of non-GAAP measures.	

TABLE 7	
RE/MAX Holdings, Inc.
 Pro Forma Shares Outstanding
 (Unaudited)	
	
		Three Months Ended	
		March 31, 	
		2021		2020	
Total basic weighted average shares outstanding:					
Weighted average shares of Class A common stock outstanding		18,496,532		17,974,264	
Remaining equivalent weighted average shares of stock outstanding on a pro forma basis assuming RE/MAX Holdings owned 100% of RMCO		12,559,600		12,559,600	
Total basic pro forma weighted average shares outstanding		31,056,132		30,533,864	
					
Total diluted weighted average shares outstanding:					
Weighted average shares of Class A common stock outstanding		18,496,532		17,974,264	
Remaining equivalent weighted average shares of stock outstanding on a pro forma basis assuming RE/MAX Holdings owned 100% of RMCO		12,559,600		12,559,600	
Dilutive effect of unvested restricted stock units (1)		370,195		59,367	
Total diluted pro forma weighted average shares outstanding		31,426,327		30,593,231	

(1)  In accordance with the treasury stock method.	

TABLE 8	
RE/MAX Holdings, Inc.
 Free Cash Flow & Unencumbered Cash
 (Unaudited)	
	
		Three Months Ended	
		March 31, 	
		2021		2020	
Cash flow from operations		$	20,832		$	13,649	
Less: Purchases of property, equipment and capitalization of software			(4,381)			(1,965)	
(Increases) decreases in restricted cash of the Marketing Funds(1)			(1,628)			(3,595)	
Free cash flow (2)			14,823			8,089	
							
Free cash flow			14,823			8,089	
Less: Tax/Other non-dividend distributions to RIHI			—			(14)	
Free cash flow after tax/non-dividend distributions to RIHI(2)			14,823			8,075	
							
Free cash flow after tax/non-dividend distributions to RIHI			14,823			8,075	
Less: Debt principal payments			(660)			(660)	
Unencumbered cash generated (2)		$	14,163		$	7,415	
							
Summary							
Cash flow from operations		$	20,832		$	13,649	
Free cash flow (2)		$	14,823		$	8,089	
Free cash flow after tax/non-dividend distributions to RIHI (2)		$	14,823		$	8,075	
Unencumbered cash generated (2)		$	14,163		$	7,415	
							
Adjusted EBITDA		$	23,160		$	19,539	
Free cash flow as % of Adjusted EBITDA (2)			64.0%			41.4%	
Free cash flow less distributions to RIHI as % of Adjusted EBITDA(2)			64.0%			41.3%	
Unencumbered cash generated as % of Adjusted EBITDA (2)			61.2%			37.9%	

(1)	This line reflects any subsequent changes in the restricted cash balance (which 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 software) so as to remove the impact of changes in restricted cash in determining free cash flow.	
(2)	Non-GAAP measure. See the end of this press release for definitions of non-GAAP measures. 	

Non-GAAP Financial Measures
The SEC has adopted rules to regulate the use in filings with the SEC and in public disclosures of financial measures that are not in accordance with U.S. GAAP, such as Adjusted EBITDA and the ratios related thereto, Adjusted net income, Adjusted basic and diluted earnings per share (Adjusted EPS) and free cash flow. These measures are derived on the basis of methodologies other than in accordance with U.S. GAAP.
The Company defines Adjusted EBITDA as EBITDA (consolidated net income before depreciation and amortization, interest expense, interest income and the provision for income taxes, each of which is presented in the unaudited consolidated financial statements included earlier in this press release), adjusted for the impact of the following items that are either non-cash or that the Company does not consider representative of its ongoing operating performance: loss or gain on sale or disposition of assets and sublease, non-cash impairment charges, equity-based compensation expense, acquisition-related expense, gain on reduction in tax receivable agreement liability, expense or income related to changes in the estimated fair value measurement of contingent consideration, and other non-recurring items.
Because Adjusted EBITDA and Adjusted EBITDA margin omit certain non-cash items and other non-recurring cash charges or other items, the Company believes that each measure is less susceptible to variances that affect its operating performance resulting from depreciation, amortization and other non-cash and non-recurring cash charges or other items. The Company presents Adjusted EBITDA and the related Adjusted EBITDA margin because the Company believes they are useful as supplemental measures in evaluating the performance of its operating businesses and provides greater transparency into the Company's results of operations. The Company's management uses Adjusted EBITDA and Adjusted EBITDA margin as factors in evaluating the performance of the business.
Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools, and you should not consider these measures in isolation or as a substitute for analyzing the Company's results as reported under U.S. GAAP. Some of these limitations are:
·	these measures do not reflect changes in, or cash requirements for, the Company's working capital needs;
·	these measures do not reflect the Company's interest expense, or the cash requirements necessary to service interest or principal payments on its debt;
·	these measures do not reflect the Company's income tax expense or the cash requirements to pay its taxes;
·	these measures do not reflect the cash requirements to pay dividends to stockholders of the Company's Class A common stock and tax and other cash distributions to its non-controlling unitholders;
·	these measures do not reflect the cash requirements pursuant to the tax receivable agreements;
·	although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often require replacement in the future, and these measures do not reflect any cash requirements for such replacements;
·	although equity-based compensation is a non-cash charge, the issuance of equity-based awards may have a dilutive impact on earnings per share; and
·	other companies may calculate these measures differently so similarly named measures may not be comparable.
The Company's Adjusted EBITDA guidance does not include certain charges and costs. The adjustments to EBITDA in future periods are generally expected to be similar to the kinds of charges and costs excluded from Adjusted EBITDA in prior quarters, such as gain on sale or disposition of assets and sublease and acquisition-related expense, among others. The exclusion of these charges and costs in future periods will have a significant impact on the Company's Adjusted EBITDA. The Company is not able to provide a reconciliation of the Company's non-GAAP financial guidance to the corresponding U.S. GAAP measures without unreasonable effort because of the uncertainty and variability of the nature and amount of these future charges and costs.
Adjusted net income is calculated as Net income attributable to RE/MAX Holdings, assuming the full exchange of all outstanding non-controlling interests for shares of Class A common stock as of the beginning of the period (and the related increase to the provision for income taxes after such exchange), plus primarily non-cash items and other items that management does not consider to be useful in assessing the Company's operating performance (e.g., amortization of acquired intangible assets, gain on sale or disposition of assets and sub-lease, non-cash impairment charges, acquisition-related expense and equity-based compensation expense).
Adjusted basic and diluted earnings per share (Adjusted EPS) are calculated as Adjusted net income (as defined above) divided by pro forma (assuming the full exchange of all outstanding non-controlling interests) basic and diluted weighted average shares, as applicable.
When used in conjunction with GAAP financial measures, Adjusted net income and Adjusted EPS are supplemental measures of operating performance that management believes are useful measures to evaluate the Company's performance relative to the performance of its competitors as well as performance period over period. By assuming the full exchange of all outstanding non-controlling interests, management believes these measures:
·	facilitate comparisons with other companies that do not have a low effective tax rate driven by a non-controlling interest on a pass-through entity;
·	facilitate period over period comparisons because they eliminate the effect of changes in Net income attributable to RE/MAX Holdings, Inc. driven by increases in its ownership of RMCO, LLC, which are unrelated to the Company's operating performance; and
·	eliminate primarily non-cash and other items that management does not consider to be useful in assessing the Company's operating performance.
Free cash flow is calculated as cash flows from operations less capital expenditures and any changes in restricted cash of the Marketing Funds, all as reported under GAAP, and quantifies how much cash a company has to pursue opportunities that enhance shareholder value. The restricted cash of the Marketing Funds is limited in use for the benefit of franchisees and any impact to free cash flow is removed. The Company believes free cash flow is useful to investors as a supplemental measure as it calculates the cash flow available for working capital needs, re-investment opportunities, potential independent region and strategic acquisitions, dividend payments or other strategic uses of cash.
Free cash flow after tax and non-dividend distributions to RIHI is calculated as free cash flow less tax and other non-dividend distributions paid to RIHI (the non-controlling interest holder) to enable RIHI to satisfy its income tax obligations. Similar payments would be made by the Company directly to federal and state taxing authorities as a component of the Company's consolidated provision for income taxes if a full exchange of non-controlling interests occurred in the future. As a result and given the significance of the Company's ongoing tax and non-dividend distribution obligations to its non-controlling interest, free cash flow after tax and non-dividend distributions, when used in conjunction with GAAP financial measures, provides a meaningful view of cash flow available to the Company to pursue opportunities that enhance shareholder value.
Unencumbered cash generated is calculated as free cash flow after tax and non-dividend distributions to RIHI less quarterly debt principal payments less annual excess cash flow payment on debt, as applicable. Given the significance of the Company's excess cash flow payment on debt, when applicable, unencumbered cash generated, when used in conjunction with GAAP financial measures, provides a meaningful view of the cash flow available to the Company to pursue opportunities that enhance shareholder value after considering its debt service obligations.

CONTACT: Investor Contact: Andy Schulz, (303) 796-3287, aschulz@remax.com; Media Contact: Kerry McGovern, (303) 796-3283, kmcgovern@remax.com