MANAGEMENT’S DISCUSSION AND ANALYSIS | MarketScreener

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our
condensed consolidated financial statements ("financial statements") and
accompanying notes included in Item 1 of Part I of this Quarterly Report on Form
10-Q and with our audited consolidated financial statements and accompanying
notes included in our most recent Annual Report on Form 10-K for the year ended
December 31, 2021 ("2021 Annual Report on Form 10-K").

This Quarterly Report on Form 10-Q contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). These
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; our
business model; cost structure; balance sheet; revenue; operating expenses;
financial outlook; return of capital, including dividends and our share
repurchase program; non-GAAP financial measures; housing and mortgage market
condition and trends; economic and demographic trends; competition; the
anticipated benefits our technology initiatives; our anticipated sources and
uses of liquidity including for potential acquisitions; capital expenditures;
future litigation expenses relating to the Moehrl-related suits; our strategic
and operating plans and business models including our efforts to accelerate the
growth of our businesses; and the expected impact of acquisitions.

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 materiality from those expressed in or suggested by the
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those identified herein, and those
discussed in the section titled "Risk Factors," set forth in Part II, Item 1A of
this Quarterly Report on Form 10-Q and in Part I, Item 1A of our 2021 Annual
Report on Form 10-K. Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date of this report.
Except as required by law, we do not intend, and we undertake no obligation to
update any forward-looking statements to reflect events or circumstances after
the date of such statements.

The results of operations discussed in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" are those of RE/MAX
Holdings, Inc. ("Holdings") and its consolidated subsidiaries, including RMCO,
LLC and its consolidated subsidiaries ("RMCO"), collectively, the "Company,"
"we," "our" or "us."

Business Overview
We are one of the world's leading franchisors in the real estate industry. We
franchise real estate brokerages globally under the RE/MAX brand ("RE/MAX") and
mortgage brokerages in the U.S. under the Motto Mortgage brand ("Motto"). We
also sell ancillary products and services, primarily technology, to our
franchise networks and, in certain instances, we sell those offerings outside
our franchise networks. We organize our business based on the services we
provide in Real Estate, Mortgage and our collective franchise marketing
operations, known as the Marketing Funds. RE/MAX and Motto are 100%
franchised-we do not own any of the brokerages that operate under these brands.
We focus on enabling our networks' success by providing powerful technology,
quality education and training, and valuable marketing to build the strength of
the RE/MAX and Motto brands. We support our franchisees in growing their
brokerages, although they fund the cost of developing their brokerages. As a
result, we maintain a low fixed-cost structure which, combined with our
recurring fee-based model, enables us to capitalize on the economic benefits of
the franchising model, yielding high margins and significant cash flow.

                                       22

Table of Contents

Financial and Operational Highlights – Three Months Ended March 31, 2022

(Compared to the three months ended March 31, 2021, unless otherwise noted)

? Total revenue of $91.0 million, an increase of 25.9% from the prior year.

Revenue excluding the Marketing Funds (a) increased to $68.2 million or 25.9%,

? which was comprised of 10.5% organic growth, 15.1% growth attributable to

acquisitions and 0.3% growth from foreign currency movements (b).

? Net income (loss) attributable to RE/MAX Holdings, Inc. increased to $1.5

million

Adjusted EBITDA of $27.9 million and Adjusted EBITDA margin of 30.7% compared

? to Adjusted EBITDA of $23.2 million and Adjusted EBITDA margin of 32.0% from

the prior year.

? Total agent count increased by 1.6% to 142,405 agents.

? U.S. and Canada combined agent count increased 0.5% to 85,160 agents.

? Total open Motto Mortgage offices increased 27.3% to 191 offices.

(a)

Revenue excluding the Marketing Funds is a non-GAAP measure of financial
performance that differs from the U.S. Generally Accepted Accounting Principles.
Revenue excluding the Marketing Funds is calculated directly from our
consolidated financial statements as Total revenue less Marketing Funds fees.
(b)
We define organic revenue growth as revenue growth from continuing operations
excluding Marketing Funds, revenue attributable to acquisitions, and foreign
currency movements. We define revenue from acquisitions as the incremental
revenue generated from the date of an acquisition to its first anniversary
(excluding Marketing Funds revenue related to acquisitions where applicable).



We continue to evaluate the best opportunities, both organic and inorganic, to
drive our near- and longer-term growth. We have two strong, industry-leading
franchise brands, each with their own compelling growth opportunities. Within
those brands, our focus is primarily on identifying and implementing those
strategic initiatives which should help us increase our U.S. agent count and
accelerate the expansion of our growing Mortgage business.

Selected Operating and Financial Highlights

The following tables summarize several key performance indicators and our
results of operations.

                                    As of March 31,            2022 vs. 2021
                                 2022               2021         #        %
Agent Count:
U.S.                                60,717            62,261   (1,544)  (2.5) %
Canada                              24,443            22,510     1,933    8.6 %
Subtotal                            85,160            84,771       389    0.5 %
Outside U.S. and Canada             57,245            55,443     1,802    3.3 %
Total                              142,405           140,214     2,191    1.6 %

Motto open offices (2)                 191               150        41   27.3 %

                             Three Months Ended March 31,      2022 vs. 2021
                                 2022               2021         #        %
RE/MAX franchise sales (1)             177               166        11    6.6 %
Motto franchise sales (2)               17                 9         8   88.9 %

(1) Includes franchise sales in the U.S., Canada and global regions.

(2) Excludes “virtual” offices and BranchiseSM offices.

                                       23

  Table of Contents

                                                          Three Months Ended
                                                              March 31,
                                                           2022         2021
Total revenue                                           $   91,004    $ 72,295
Total selling, operating and administrative expenses    $   47,831    $ 43,676
Operating income (loss)                                 $    7,602    $  3,666
Net income (loss)                                       $    2,945    $  1,763
Net income (loss) attributable to RE/MAX Holdings, Inc. $    1,451    $  1,163
Adjusted EBITDA (1)                                     $   27,917    $ 23,160
Adjusted EBITDA margin (1)                                    30.7 %      32.0 %

See “-Non-GAAP Financial Measures” for further discussion of Adjusted EBITDA

and Adjusted EBITDA margin and a reconciliation of the differences between
(1) Adjusted EBITDA and net income (loss), which is the most comparable U.S.

generally accepted accounting principles (“U.S. GAAP”) measure for operating

performance. Adjusted EBITDA margin represents Adjusted EBITDA as a

percentage of total revenue.

Results of Operations

Comparison of the Three Months Ended March 31, 2022 and 2021

Revenue

A summary of the components of our revenue is as follows (in thousands except
percentages):

                                      Three Months Ended                    Change
                                          March 31,                 Favorable/(Unfavorable)
                                      2022            2021            $                       %
Revenue:
Continuing franchise fees          $    33,499      $ 25,374  $           8,125              32.0 %
Annual dues                              8,920         8,672                248               2.9 %
Broker fees                             15,085        11,953              3,132              26.2 %
Marketing Funds fees                    22,851        18,145              4,706              25.9 %
Franchise sales and other revenue       10,649         8,151              2,498              30.6 %
Total revenue                      $    91,004      $ 72,295  $          18,709              25.9 %


                                           Three Months Ended                    Change
                                               March 31,                 Favorable/(Unfavorable)
                                           2022            2021            $                       %
Revenue excluding the Marketing Funds:
Total revenue                           $    91,004      $ 72,295  $          18,709              25.9 %
Less: Marketing Funds fees                   22,851        18,145              4,706              25.9 %
Revenue excluding the Marketing Funds   $    68,153      $ 54,150  $          14,003              25.9 %


Revenue excluding the Marketing Funds increased to $68.2 million or 25.9%, which
was comprised of 10.5% organic growth, 15.1% growth from acquisitions and 0.3%
growth from foreign currency movements. Organic growth increased primarily due
to increased event-based revenue due to higher attendance at our annual RE/MAX
agent convention, increased Broker fees due to rising home prices, incremental
revenue from fewer agent recruiting initiatives, a price increase in RE/MAX
Continuing franchise fees, and Motto growth. Revenue growth from acquisitions
was attributable to revenue from the RE/MAX INTEGRA North American regions
acquisition ("INTEGRA") completed in July 2021. Consolidated revenue increased
due to the aforementioned factors plus growth in Marketing Funds fees primarily
from the INTEGRA acquisition.

Continuing Franchise Fees

Revenue from Continuing franchise fees increased primarily due to contributions
from the acquisition of INTEGRA, incremental revenue from fewer agent recruiting
initiatives, a price increase in RE/MAX and Motto growth.

                                       24

  Table of Contents

Broker Fees

Revenue from Broker fees increased primarily from the acquisition of INTEGRA and
rising home prices, partially offset by lower total transactions per agent as
compared to the prior year.

Marketing Funds Fees

Revenue from Marketing Funds fees increased primarily from the acquisition of
INTEGRA and fewer agent recruiting initiatives in the current year.

Franchise Sales and Other Revenue

Franchise sales and other revenue increased primarily due to higher attendance
at our annual RE/MAX agent convention.

Operating Expenses

A summary of the components of our operating expenses is as follows (in
thousands, except percentages):

                                                  Three Months Ended                  Change
                                                      March 31,              Favorable/(Unfavorable)
                                                   2022         2021            $                    %
Operating expenses:
Selling, operating and administrative expenses  $    47,831   $ 43,676   $        (4,155)           (9.5) %
Marketing Funds expenses                             22,851     18,145            (4,706)          (25.9) %
Depreciation and amortization                         8,985      6,808            (2,177)          (32.0) %
Settlement and impairment charges                     3,735          -            (3,735)             n/m
Total operating expenses                        $    83,402   $ 68,629   $ 
     (14,773)          (21.5) %
Percent of revenue                                     91.6 %     94.9 %

n/m - not meaningful

Selling, operating and administrative expenses consists of personnel costs,
professional fee expenses, lease costs and other expenses. Other expenses within
Selling, operating and administrative expenses include certain marketing and
production costs that are not paid by the Marketing Funds, including travel and
entertainment costs, and costs associated with our annual conventions in the
U.S. and other events and technology services.

                                                           Three Months Ended                       Change
                                                               March 31,                    Favorable/(Unfavorable)
                                                           2022           2021               $                      %
Selling, operating and administrative expenses:
Personnel                                              $     26,710    $    28,333    $         1,623                 5.7 %
Professional fees                                             4,788          4,254              (534)              (12.6) %
Lease costs                                                   2,328          2,083              (245)              (11.8) %
Other                                                        14,005          9,006            (4,999)              (55.5) %
Total selling, operating and administrative expenses   $     47,831    $    43,676    $       (4,155)               (9.5) %
Percent of revenue                                             52.6 %         60.4 %

n/m - not meaningful

Total Selling, operating and administrative expenses increased as follows:

Personnel costs decreased primarily due to lower equity-based compensation

expense, driven by $5.5 million of equity-based compensation expense due to the

one-time acceleration of certain equity awards during the first quarter of

? 2021, see Note 11, Equity-Based Compensation. This decrease in equity-based

   compensation was partially offset by increased headcount, including from
   acquisitions, higher costs associated with acquiring and integrating new
   companies, and the reinstatement of the full 401(k) match.

Professional fees increased primarily due to an increase in legal fees. See

section titled “Legal Proceedings,” set forth in Part II, Item 1 of this

? Quarterly Report on Form 10-Q. We expect to incur an additional $2.5 million to

$3.5 million in legal expenses related to the Moehrl-related suits during the

   remainder of this year because of this ongoing litigation.


                                       25

  Table of Contents

Other selling, operating and administrative expenses increased primarily due

? higher travel and events expenses, primarily related to our annual RE/MAX agent

convention, and increased investments in technology.

Marketing Funds Expenses

We recognize an equal and offsetting amount of expenses to revenue such that
there is no impact to our overall profitability.

Depreciation and Amortization

Depreciation and amortization expense increased primarily due to new
amortization related to our acquisitions.

Settlement and Impairment Charges

Impairment Charge – Leased Assets

During the first quarter of 2022, we subleased a portion of our corporate
headquarters. As a result, we performed an impairment test on the portion
subleased and recognized an impairment charge of $3.7 million. See Note
2, Summary of Significant Accounting Policies for additional information about
our leases.

Other Expenses, Net

A summary of the components of our Other expenses, net is as follows (in
thousands, except percentages):

                                               Three Months Ended                  Change
                                                   March 31,              Favorable/(Unfavorable)
                                                2022        2021             $                    %
Other expenses, net:
Interest expense                             $  (3,651)   $ (2,098)   $       (1,553)           (74.0) %
Interest income                                      19         163             (144)           (88.3) %
Foreign currency transaction gains (losses)         180        (20)               200              n/m
Total other expenses, net                    $  (3,452)   $ (1,955)   $       (1,497)           (76.6) %
Percent of revenue                                  3.8 %       2.7 %

n/m - not meaningful


Other expenses, net increased primarily due to an increase in interest expense
because of the refinance of and increase to our Senior Secured Credit Facility
(see Note 8, Debt, for more information) in the prior year. Foreign currency
transaction gains (losses) are primarily the result of transactions denominated
in the Canadian Dollar.

Provision for Income Taxes
Our effective income tax rate increased to 29.0% from (3.0)% for the three
months ended March 31, 2022 and 2021, respectively, primarily driven by the
vesting of equity based compensation during the three months ended March 31,
2022 where the tax deductible expense was less than the GAAP expense, as
compared to excess tax deductible expense as compared to GAAP expense related to
vested equity awards in the three months ended March 31, 2021. Our effective
income tax rate depends on many factors, including a rate benefit attributable
to the fact that the portion of RMCO's earnings attributable to the
non-controlling interests are not subject to corporate-level taxes because RMCO
is classified as a partnership for U.S. federal income tax purposes and
therefore is treated as a "flow-through entity," as well as annual changes in
state and foreign income tax rates. See Note 3, Non-controlling Interest to the
accompanying unaudited condensed consolidated financial statements for further
details on the allocation of income taxes between Holdings and the
non-controlling interest and see Note 10, Income Taxes for additional
information.

Adjusted EBITDA

See “-Non-GAAP Financial Measures” for our definition of Adjusted EBITDA and for
further discussion of our presentation of Adjusted EBITDA as well as a
reconciliation of Adjusted EBITDA to net income (loss), which is the most
comparable GAAP measure for operating performance.

                                       26

Table of Contents

Adjusted EBITDA was $27.9 million for the three months ended March 31, 2022, an
increase of $4.8 million from the comparable prior year period. Adjusted EBITDA
increased primarily due to contributions from the INTEGRA acquisition, higher
Broker fees revenue due to rising home prices, incremental revenue from fewer
agent recruiting initiatives, and a price increase in RE/MAX Continuing
franchise fees, partially offset by higher personnel costs due to headcount
increases and the reinstatement of the full 401(k) match.

Non-GAAP Financial Measures

The Securities and Exchange Commission ("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 Revenue excluding the Marketing
Funds and Adjusted EBITDA and the ratios related thereto. These measures are
derived on the basis of methodologies other than in accordance with U.S. GAAP.

Revenue excluding the Marketing Funds is a non-GAAP measure of financial
performance that differs from the U.S. Generally Accepted Accounting Principles.
Revenue excluding the Marketing Funds is calculated directly from our
consolidated financial statements as Total revenue less Marketing Funds fees.

We define Adjusted EBITDA as EBITDA (consolidated net income (loss) before
depreciation and amortization, interest expense, interest income and the
provision for income taxes, each of which is presented in our unaudited
condensed consolidated financial statements included elsewhere in this Quarterly
Report on Form 10-Q), adjusted for the impact of the following items that are
either non-cash or that we do not consider representative of our ongoing
operating performance: gain or loss on sale or disposition of assets, settlement
and impairment charges, equity-based compensation expense, acquisition-related
expense, gain or losses from changes in the tax receivable agreement liability,
expense or income related to changes in the estimated fair value measurement of
contingent consideration and other non-recurring items.

As Adjusted EBITDA omits certain non-cash items and other non-recurring cash
charges or other items, we believe that it is less susceptible to variances that
affect our operating performance resulting from depreciation, amortization and
other non-cash and non-recurring cash charges or other items. We present
Adjusted EBITDA, and the related Adjusted EBITDA margin, because we believe they
are useful as supplemental measures in evaluating the performance of our
operating businesses and provides greater transparency into our results of
operations. Our management uses Adjusted EBITDA and Adjusted EBITDA margin as
factors in evaluating the performance of our business.

Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools,
and you should not consider these measures either in isolation or as a
substitute for analyzing our results as reported under U.S. GAAP. Some of these
limitations are:

? these measures do not reflect changes in, or cash requirements for, our working

capital needs;

? these measures do not reflect our interest expense, or the cash requirements

necessary to service interest or principal payments on our debt;

? these measures do not reflect our income tax expense or the cash requirements

to pay our taxes;

these measures do not reflect the cash requirements to pay dividends to

? stockholders of our Class A common stock and tax and other cash distributions

to our non-controlling unitholders;

? these measures do not reflect the cash requirements pursuant to the Tax

Receivable Agreements (“TRAs”);

? these measures do not reflect the cash requirements for share repurchases

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.

                                       27

  Table of Contents

A reconciliation of Adjusted EBITDA to net income (loss) is set forth in the
following table (in thousands):

                                                           Three Months Ended
                                                               March 31,
                                                           2022            2021
Net income (loss)                                       $     2,945      $  1,763
Depreciation and amortization                                 8,985         6,808
Interest expense                                              3,651         2,098
Interest income                                                (19)         (163)
Provision for income taxes                                    1,205          (52)
EBITDA                                                       16,767        10,454
Impairment charge - leased assets (1)                         3,735        

Equity-based compensation expense                             5,637       

12,054

Acquisition-related expense (2)                               1,257        

943

Fair value adjustments to contingent consideration (2)          285         (280)
Other                                                           236          (11)
Adjusted EBITDA                                         $    27,917      $ 23,160

Represents the impairment recognized on a portion of the Company’s corporate
(1) headquarters office building. See Note 2, Summary of Significant Accounting

Policies for additional information.

Acquisition-related expense includes personnel, legal, accounting, advisory
(2) and consulting fees incurred in connection with the evaluation, due

diligence, execution and integration of acquisitions.

Fair value adjustments to contingent consideration include amounts recognized

for changes in the estimated fair value of the contingent consideration
(3) liabilities. See Note 9, Fair Value Measurements to the accompanying

unaudited condensed consolidated financial statements for additional

information.

Liquidity and Capital Resources

Overview of Factors Affecting Our Liquidity

Our liquidity position is affected by the growth of our franchise networks and
conditions in the real estate market. In this regard, our short-term liquidity
position from time to time has been, and will continue to be, affected by
several factors including agents in the RE/MAX network, particularly in
Company-Owned Regions and open offices in the Motto network. Our cash flows are
primarily related to the timing of:

(i) cash receipt of revenues;

(ii) payment of selling, operating and administrative expenses;

(iii) investments in technology and the growth of our mortgage business;

(iv) cash consideration for acquisitions and acquisition-related expenses;

(v) principal payments and related interest payments on our Senior Secured Credit

Facility;

(vi) dividend payments to stockholders of our Class A common stock;

distributions and other payments to non-controlling unitholders pursuant to

(vii) the terms of RMCO’s limited liability company operating agreement (“the

RMCO, LLC Agreement”);

(viii) corporate tax payments paid by the Company;

(ix) payments to the TRA parties pursuant to the TRAs; and

(x) share repurchases.

We have satisfied these needs primarily through our existing cash balances, cash
generated by our operations and funds available under our Senior Secured Credit
Facility. We may also utilize our Senior Secured Credit Facility, and we may
pursue other sources of capital that may include other forms of external
financing, such as additional financing in the public capital markets, in order
to increase our cash position and preserve financial flexibility as needs arise.

                                       28

  Table of Contents

Financing Resources

RMCO and RE/MAX, LLC, a wholly owned subsidiary of RMCO, have a credit agreement
with JPMorgan Chase Bank, N.A., as administrative agent, and various lenders
party thereto (the "Senior Secured Credit Facility"). On July 21, 2021, we
amended and restated our Senior Secured Credit Facility to fund the acquisition
of INTEGRA and refinance our existing facility. The revised facility provides
for a seven-year $460.0 million term loan facility and a five-year $50.0 million
revolving loan facility. The revised facility also provides for incremental
facilities under which RE/MAX, LLC may request to add one or more tranches of
term facilities or increase any then existing credit facility in the aggregate
principal amount of up to $100 million (or a higher amount subject to the terms
and conditions of the Senior Secured Credit Facility), subject to lender
participation.

The Senior Secured Credit Facility requires RE/MAX, LLC to repay term loans at
$1.2 million per quarter. We are also required to repay the term loans and
reduce revolving commitments with (i) 100.0% of proceeds of any incurrence of
additional debt not permitted by the Senior Secured Credit Facility, (ii) 100.0%
of proceeds of asset sales and 100.0% of amounts recovered under insurance
policies, subject to certain exceptions and a reinvestment right and (iii) 50%
of Excess Cash Flow (or "ECF" as defined in the Senior Secured Credit Facility)
at the end of the applicable fiscal year if RE/MAX, LLC's Total Leverage Ratio
(or "TLR" as defined in the Senior Secured Credit Facility) is in excess of
4.25:1. If the TLR as of the last day of such fiscal year is equal to or less
than 4.25:1 but above 3.75:1, the repayment percentage is 25% of ECF and if the
TLR as of the last day of such fiscal year is less than 3.75:1, no repayment
from ECF is required.

The Senior Secured Credit Facility is guaranteed by RMCO and is secured by a
lien on substantially all of the assets of RE/MAX, LLC and other operating
companies.

The Senior Secured Credit Facility provides for customary restrictions on, among
other things, additional indebtedness, liens, dispositions of property,
dividends, transactions with affiliates and fundamental changes such as mergers,
consolidations and liquidations. With certain exceptions, any default under any
of our other agreements evidencing indebtedness in the amount of $15.0 million
or more constitutes an event of default under the Senior Secured Credit
Facility.

Borrowings under the term loans and revolving loans accrue interest, at our
option on (a) LIBOR, provided LIBOR shall be no less than 0.50% plus an
applicable margin of 2.50% and, provided further that such rate shall be
adjusted for reserve requirements for eurocurrency liabilities, if any (the
"LIBOR Rate") or (b) the greatest of (i) the prime rate as quoted by the Wall
Street Journal, (ii) the NYFRB Rate (as defined in the Senior Secured Credit
Facility) plus 0.50% and (iii) the one-month Eurodollar Rate plus 1.00%, (such
greatest rate, the "ABR") plus, in each case, an applicable margin of 1.50%. As
of March 31, 2022, the interest rate on the term loan facility was 3.0%.

A commitment fee of 0.5% per annum (subject to reductions) accrues on the amount
of unutilized revolving line of credit.

As of March 31, 2022, we had $451.1 million of term loans outstanding, net of an
unamortized discount and issuance costs, and no revolving loans outstanding
under our Senior Secured Credit Facility.

Sources and Uses of Cash

As of March 31, 2022, and December 31, 2021, we had $118.5 million and $126.3
million
, respectively, of cash and cash equivalents, of which approximately
$16.5 million and $8.9 million, respectively, were denominated in foreign
currencies.

                                       29

  Table of Contents

The following table summarizes our cash flows from operating, investing, and
financing activities (in thousands):

                                                            Three Months Ended
                                                                March 31,
                                                             2022        2021
Cash provided by (used in):
Operating activities                                      $   16,502  $   20,832
Investing activities                                         (3,723)     (4,381)
Financing activities                                        (16,068)    (13,638)
Effect of exchange rate changes on cash                          274       

92

Net change in cash, cash equivalents and restricted cash $ (3,015) $ 2,905



Operating Activities

Cash provided by operating activities decreased primarily as a result of:

? higher payments of certain employee related liabilities;

? an increase in Adjusted EBITDA of $4.8 million;

? a decrease due to higher interest payments of $1.5 million, due to the increase

of our Senior Secured Credit Facility in July 2021; and

? timing differences on various operating assets and liabilities.

Investing Activities

During the three months ended March 31, 2022 the change in cash (used in)
provided by investing activities was primarily due to lower investments on our
corporate headquarters refresh.

Financing Activities

During the three months ended March 31, 2022, the change in cash provided by
(used in) financing activities was primarily due to the initiation of our share
repurchase program and an increase in principal payments on our Senior Secured
Credit Facility.

Capital Allocation Priorities

Liquidity

Our objective is to maintain a strong liquidity position. We have existing cash
balances, cash flows from operating activities, access to our revolving facility
and incremental facilities under our Senior Secured Credit Facility available to
support the needs of our business. As needs arise, we may seek additional
financing in the public capital markets.

Acquisitions

As part of our growth strategy, we may pursue acquisitions of Independent
Regions in the U.S. and Canada as well as additional acquisitions or investments
in complementary businesses, services and technologies that would provide access
to new markets, revenue streams, or otherwise complement or accelerate the
growth of our existing operations. We may fund any such growth with various
sources of capital including existing cash balances and cash flow from
operations, as well as proceeds from debt financings including under existing
credit facilities or new arrangements raised in the public capital markets.

Capital Expenditures

The total aggregate amount for purchases of property and equipment and
capitalization of developed software was $3.7 million and $4.4 million during
the three months ended March 31, 2022 and 2021, respectively. These amounts
primarily relate to spend on our corporate headquarters refresh and investments
in technology. In order to expand our technology, we plan to continue to
re-invest in our business in order to improve operational efficiencies and
enhance the tools and services provided to the affiliates in our networks. Total
capital expenditures for 2022 are expected to be between $10 million and $13
million.

                                       30

  Table of Contents

Return of Capital
Return of capital to shareholders is one of our primary capital allocation
priorities. Our Board of Directors declared and we paid quarterly cash dividends
of $0.23 per share on all outstanding shares of Class A common stock during the
first quarter of 2022. On April 27, 2022, our Board of Directors declared a
quarterly cash dividend of $0.23 per share on all outstanding shares of Class A
common stock, which was payable on May 25, 2022 to stockholders of record at the
close of business on May 11, 2022.

Our Board of Directors has authorized a common stock repurchase program of up to
$100 million. During the three months ended March 31, 2022, 45,885 million
shares of our Class A common stock were repurchased and retired for $1.3 million
excluding commissions, at an average cost of $28.63. As of March 31, 2022, $98.7
million remained available under the share repurchase authorization.

Future capital allocation decision with respect to return of capital either in
the form of additional future dividends, and if declared, the amount of any such
future dividend, or in the form of share repurchases, will be subject to our
actual future earnings and capital requirements and any amounts authorized will
be at the discretion of our Board of Directors.

Distributions and Other Payments to Non-controlling Unitholders by RMCO

Distributions and other payments pursuant to the RMCO, LLC Agreement and TRAs
were comprised of the following (in thousands):

                                                                                 Three Months Ended
                                                                                     March 31,
                                                                              2022                 2021

Distributions and other payments pursuant to the RMCO, LLC Agreement:
Pro rata distributions to RIHI as a result of distributions to RE/MAX
Holdings
in order to satisfy its estimated tax liabilities

               $            5        $          -
Dividend distributions                                                            2,889               2,889
Total distributions to RIHI                                                       2,894               2,889
Payments pursuant to the TRAs                                                         -                   -
Total distributions to RIHI and TRA payments                             $ 

2,894 $ 2,889

Commitments and Contingencies

See Note 12, Commitments and Contingencies to the accompanying unaudited
condensed consolidated financial statements for additional information.

Off Balance Sheet Arrangements

We have no material off balance sheet arrangements as of March 31, 2022.

Critical Accounting Judgments and Estimates

The preparation of financial statements in conformity with U.S. GAAP requires
management to make estimates and assumptions that affect the amounts and
disclosures in the financial statements and accompanying notes. Actual results
could differ from those estimates. Our Critical Accounting Judgments and
Estimates disclosed in "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Critical Accounting Judgments and
Estimates" in our 2021 Annual Report on Form 10-K for which there were no
material changes, included:

 ? Motto Goodwill

? Purchase Accounting for Acquisitions

? Deferred Tax Assets and TRA Liability

New Accounting Pronouncements

See Note 2, Summary of Significant Accounting Policies to the accompanying
unaudited condensed consolidated financial statements for additional
information.

                                       31

Table of Contents

© Edgar Online, source Glimpses

Next Post

Seven changes to a CRM for business that drive customer growth

Customer relationship management (CRM) software is central to running and growing a successful small business. Putting the customer at the heart of everything you do means that every client communication, product sale, or service provision is based on their needs.  When you’re looking for the best CRM software, it’s important […]

Subscribe US Now