ANYWHERE REAL ESTATE INC. REPORTS THIRD QUARTER 2024 FINANCIAL RESULTS
MADISON, N.J., Nov. 7, 2024 /PRNewswire/ -- Anywhere Real Estate Inc. (NYSE:HOUS) ("Anywhere" or the "Company"), a global leader in residential real estate services, today reported financial results for the third quarter ended September 30, 2024.
"I am proud of our third quarter performance as Anywhere delivered strong Operating EBITDA and free cash flow, invested meaningfully in the business for future growth, gained luxury share, and strengthened our balance sheet," said Ryan Schneider, Anywhere president and CEO. "Anywhere stands out because of our strategic strengths and profitability, along with our outstanding affiliated agents, franchisees, and employees who continue to deliver great value to consumers as we move real estate to what's next."
"Anywhere delivered differentiated profitability, optimized our balance sheet, and drove efficiencies to fuel even greater financial octane and flexibility for the future," said Charlotte Simonelli, Anywhere executive vice president, chief financial officer, and treasurer. "We are capitalizing on this moment to accelerate our strategic progress, invest in our future, and set Anywhere up for growth and further competitive differentiation as the housing market improves."
Third Quarter 2024 Highlights
Generated Revenue of $1.5 billion, a decrease of 3% year-over-year.
Combined closed transaction volume remained flat year-over-year in the third quarter with units down about 5% and price up 6%.
Our strength in luxury continued as our Corcoran and Sotheby's International Realty brands outperformed the market, with 5% transaction volume growth in the third quarter, including growing our luxury unit share year-over-year.
Reported Net Income of $7 million decreased $122 million primarily driven by lapping gains on the early extinguishment of debt which were $7 million during the third quarter of 2024 compared to $169 million during the same period last year. Adjusted Net Income of $6 million decreased $11 million versus 2023 (See Table 1a).
Operating EBITDA of $94 million, a $13 million decrease year-over-year (See Table 5a).
Realized cost savings of approximately $30 million and on track to realize full year cost savings of $120 million.
Agent commission splits in the third quarter were up 15 basis points year-over-year to 80.4%, but down versus the prior quarter. It is the 10th straight quarter of stable commission splits at approximately 80%.
Free Cash Flow of $99 million versus $95 million for the corresponding quarter last year (See Table 7).
The Company repaid its $196 million Term Loan A and repurchased $26 million of unsecured notes for $19 million, capturing $7 million of discount.
The Company's preliminary October 2024 closed transaction volume was up approximately 9% year-over-year and October open transaction volume, which represents new contracts and future closings, was up approximately 16% year-over-year. These preliminary October results on open and closed volumes have been adjusted to reflect like-for-like number of business days. October 2024 included one more business day than October 2023.
The Anywhere AI-enhanced marketing platform, Listing Concierge, won the Inman AI Award for Best Use of AI by a Brokerage in October 2024.
Anywhere was recognized in October 2024 by Forbes as a World's Best Employer for the fourth consecutive year.
Third Quarter 2024 Financial Highlights
The following table sets forth the Company's financial highlights for the periods presented (in millions, except per share data) (unaudited):
Three Months Ended September 30,
2024
2023
Change
% Change
Revenue
$ 1,535
$ 1,584
$ (49)
(3) %
Operating EBITDA 1
94
107
(13)
(12)
Net income attributable to Anywhere
7
129
(122)
(95)
Adjusted net income 2
6
17
(11)
(65)
Earnings per share
0.06
1.17
(1.11)
(95)
Free Cash Flow 3
99
95
4
4
Net cash provided by operating activities
$ 120
$ 145
$ (25)
(17) %
Select Key Drivers
Anywhere Brands - Franchise Group 4 5
Closed homesale sides
189,833
200,619
(5) %
Average homesale price
$ 502,512
$ 470,818
7 %
Anywhere Advisors - Owned Brokerage Group 5
Closed homesale sides
67,625
71,794
(6) %
Average homesale price
$ 741,623
$ 712,232
4 %
Anywhere Integrated Services - Title Group
Purchase title and closing units
27,631
28,453
(3) %
Refinance title and closing units
2,661
2,304
15 %
Footnotes:
1 See Table 5a for a reconciliation of Net income attributable to Anywhere to Operating EBITDA. Operating EBITDA is defined as net income (loss) adjusted for depreciation and amortization, interest expense, net (excluding relocation services interest for securitization assets and securitization obligations), income taxes, and certain non-core items. Non-core items include restructuring charges, former parent legacy items, gains or losses on the early extinguishment of debt, impairments, and gains or losses on discontinued operations or the sale of businesses, investments or other assets.
2 See Table 1a for a reconciliation of Net income attributable to Anywhere to Adjusted net income. Adjusted net income (loss) is defined as net income (loss) before mark-to-market interest rate swap adjustments, former parent legacy items, restructuring charges, (gain) loss on the early extinguishment of debt, impairments, (gain) loss on the sale of businesses, investments or other assets and the tax effect of the foregoing adjustments.
3 See Table 7 for a reconciliation of Net income attributable to Anywhere to Free Cash Flow. Free Cash Flow is defined as net income (loss) attributable to Anywhere before income tax expense (benefit), income tax payments, net interest expense, cash interest payments, depreciation and amortization, capital expenditures, restructuring costs and former parent legacy costs (benefits), net of payments, impairments, (gain) loss on the sale of businesses, investments or other assets, (gain) loss on the early extinguishment of debt, working capital adjustments and relocation receivables (assets), net of change in securitization obligations.
4 Includes all franchisees except for Owned Brokerage Group.
5 In the quarter ended September 30, 2024, the Company's combined homesale transaction volume (transaction sides multiplied by average sale price) remained flat compared with the third quarter of 2023.
2024 Financial Estimates
The Company is expecting to realize $120 million in cost savings in 2024.
The Company expects its Free Cash Flow excluding one-time items to be approximately $100 million in 2024. The one-time items are estimated to be approximately $60 million, and consist of a $20 million payment towards our antitrust litigation settlement and approximately $39 million for a 1999 Cendant legacy tax matter.
The antitrust litigation settlement totaled $83.5 million, $10 million of which was paid in the fourth quarter of 2023 and $20 million of which was paid in the second quarter of 2024. The remaining $53.5 million will be due when appeals are resolved, the timing of which is uncertain. We currently expect the payment to occur no earlier than mid-2025.
The approximately $39 million 1999 Cendant legacy tax matter will be due once statutory notice is received, which we have assumed will occur in 2024.
For further discussion of these matters, see our SEC periodic reports, including the Form 10-Q we filed this morning.
These estimates are subject to, among other things, macroeconomic and housing market uncertainties, including those related to rising inflation, declining affordability and constrained inventory as well as competitive, litigation and regulatory uncertainties. In addition, our free cash flow estimates do not include any potential financial impact relating to the implementation of industry settlement practice changes, which remain uncertain.
Balance Sheet
Total corporate debt, including the short-term portion, net of cash and cash equivalents (net corporate debt), totaled $2.5 billion at September 30, 2024. The Company ended the quarter with cash and cash equivalents of $102 million. The Company's Senior Secured Leverage Ratio was 1.32x at September 30, 2024 (see Table 8a). The Company's Net Debt Leverage Ratio was 7.4x at September 30, 2024 (see Table 8b).
On August 30, 2024, the Company repaid the entire outstanding principal amount of approximately $196 million along with accrued interest under the Term Loan A Facility, as amended, with a combination of cash on hand and borrowings from our Revolving Credit Facility.
During the third quarter of 2024, the Company repurchased a total of $26 million of its Unsecured Notes at an aggregate purchase price of $19 million, plus accrued interest to the respective repurchase dates.
As of November 5, 2024 the Company had $555 million of outstanding borrowings under its Revolving Credit Facility.
A consolidated balance sheet is included as Table 2 of this press release.
Investor Conference Call
Today, November 7, at 8:30 a.m. (ET), Anywhere will hold a conference call via webcast to review its Q3 2024 results and provide a business update. The webcast will be hosted by Ryan Schneider, chief executive officer and president, and Charlotte Simonelli, chief financial officer, and will conclude with an investor Q&A period with management.
Investors may access the conference call live via webcast at ir.anywhere.re or by dialing (800) 715-9871 (toll free); international participants should dial (646) 307-1963. Please dial in at least 5 to 10 minutes prior to start time. A webcast replay also will be available on the website.
About Anywhere Real Estate Inc.
Anywhere Real Estate Inc. (NYSE: HOUS) is moving the real estate industry to what's next. A leader of integrated residential real estate services, Anywhere includes franchise, brokerage, relocation, and title and settlement businesses, as well as mortgage and title insurance underwriter minority owned joint ventures. The diverse Anywhere brand portfolio includes some of the most recognized names in real estate: Better Homes and Gardens® Real Estate, CENTURY 21®, Coldwell Banker®, Coldwell Banker Commercial®, Corcoran®, ERA®, and Sotheby's International Realty®. Using innovative technology, data and marketing products, high-quality lead generation programs, and best-in-class learning and support services, Anywhere fuels the productivity of its approximately 182,100 independent sales agents in the U.S. and approximately 131,600 independent sales agents in 118 other countries and territories, helping them build stronger businesses and best serve today's consumers. Recognized for 13 consecutive years as one of the World's Most Ethical Companies, Anywhere has also been designated a Great Place to Work six years in a row, honored on the Forbes list of World's Best Employers for four years, named one of America's Most Innovative Companies by Fortune for two years, and featured by Newsweek as one of the World's Most Trustworthy Companies.
Forward-Looking Statements
This press release contains "forward-looking statements," within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "believes", "expects", "anticipates", "intends", "projects", "estimates", "potential" and "plans" and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could", and include statements that refer to expectations or other characterizations of future events, circumstances or results. Examples of forward-looking statements include the information appearing under 2024 Financial Estimates.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Anywhere Real Estate Inc. to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
The following include some, but not all, of the factors that could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements: adverse developments or the absence of sustained improvement in the U.S. residential real estate markets, either regionally or nationally, which could include, but are not limited to, factors that impact homesale transaction volume, such as: prolonged periods of a high mortgage rate environment, high rates of inflation, reduced housing affordability and increasing costs of home ownership, a lack of housing inventory and a continued low number of home sales; adverse developments or the absence of sustained improvement in macroeconomic conditions (such as business, economic or political conditions) on a global, domestic or local basis, which could include, but are not limited to, contraction or stagnation in the U.S. economy, geopolitical and economic instability, including as related to foreign conflicts and supply chain disruptions, continued or accelerated increases in inflation and fiscal and monetary policies of the federal government; continued or expanded scrutiny from the Department of Justice (DOJ) on broker commissions, offers of compensation and various other industry rules and practices; industry structure changes (including as a result of litigation, legislative or regulatory developments and/or consumer behavior changes) that disrupt the functioning of the residential real estate market, including the manner in which any broker commissions are communicated, negotiated or paid; the impact of evolving competitive and consumer dynamics, including meaningful decreases in the average broker commission rate, continued erosion of the Company's share of the commission income generated by homesale transactions, our ability to compete against traditional and non-traditional competitors, including those that grow via acquisition, our ability to adapt our business to changing consumer preferences and lessening of multiple listing services obligations that may result in more unlisted properties and less inventory broadly available for sale; our ability to execute our business strategy and achieve growth, including with respect to the recruitment and retention of productive independent sales agents, attraction and retention of franchisees, development or procurement of products, services and technology, including the integration of Artificial Intelligence (AI) and other machine learning, achievement or maintenance of a beneficial cost structure and our ability to realize the expected benefits from our existing or future joint ventures or strategic partnerships; adverse developments or outcomes in current or future litigation, in particular pending antitrust litigation and litigation related to the Telephone Consumer Protection Act (TCPA); risks related to our substantial indebtedness, particularly heightened during industry downturns or broader recessions, which could adversely limit our operations, including our ability to grow our business, whether organically or via acquisitions, adversely impact our liquidity and/or and our ability, and any actions we may take, to refinance, restructure or repay our indebtedness; risks related to our business structure, including our geographic and high-end market concentration, the operating results of our affiliated franchisees, their ability to pay franchise and related fees and potential claims we could face due to their actions, the continued consolidation among our top 250 franchisees, and risks related to our reliance on information technology to operate our business and maintain our competitiveness; disruption in the residential real estate brokerage industry related to listing aggregator market power and concentration; our failure or alleged failure to comply with laws, regulations and regulatory interpretations and any changes or stricter interpretations of any of the foregoing, including but not limited to (1) antitrust laws and regulations, (2) the Real Estate Settlement Procedures Act or other federal or state consumer protection or similar laws, (3) state or federal employment laws or regulations that would require reclassification of independent contractor sales agents to employee status, (4) the TCPA, and (5) privacy or data security laws and regulations; cybersecurity incidents; impairment of our goodwill and other long-lived assets; the accuracy of market forecasts and estimates; and significant fluctuation in the price of our common stock.
Consideration should be given to the areas of risk described above, as well as those risks set forth under the headings "Forward-Looking Statements," "Summary of Risk Factors," "Risk Factors" and "Legal Proceedings" in our filings with the Securities and Exchange Commission, including our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024, June 30, 2024 and September 30, 2024 and our Annual Report on Form 10-K for the year ended December 31, 2023, and our other filings made from time to time, in connection with considering any forward-looking statements that may be made by us and our businesses generally. We undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events except as required by law.
Non-GAAP Financial Measures
This release includes certain non-GAAP financial measures as defined under SEC rules. As required by SEC rules, important information regarding such measures is contained in the Tables attached to this release. See Tables 8a, 8b and 9 for definitions of these non-GAAP financial measures and Tables 1a, 5a, 5b, 6a, 6b, 7, 8a and 8b for reconciliations of the historical non-GAAP financial measures to their most comparable GAAP terms.
A reconciliation of the Company's estimate of full-year Free Cash Flow excluding one-time items, which is a non-GAAP financial measure, to Net income attributable to Anywhere is not provided because of the difficulty in forecasting and quantifying the items that would be necessary for such reconciliation. The Company also believes that providing estimates of the amounts that would be required to provide a reconciliation would imply a degree of precision that would be confusing or misleading to investors. These items are uncertain, depend on various factors and may have a material impact on GAAP results.
Investor Contacts:
Media Contacts:
Alicia Swift
Trey Sarten
(973) 407-4669
(973) 407-2162
Tim Swanson
Gabriella Chiera
(973) 407-2612
(973) 407-5236
Table 1
ANYWHERE REAL ESTATE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
Revenues
Gross commission income
$ 1,242
$ 1,293
$ 3,525
$ 3,559
Service revenue
156
155
434
445
Franchise fees
98
99
269
270
Other
39
37
102
112
Net revenues
1,535
1,584
4,330
4,386
Expenses
Commission and other agent-related costs
998
1,037
2,832
2,852
Operating
287
284
845
869
Marketing
51
56
143
161
General and administrative
111
104
303
331
Former parent legacy (benefit) cost, net
(1)
—
1
17
Restructuring costs, net
6
9
24
40
Impairments
1
3
9
11
Depreciation and amortization
48
50
151
149
Interest expense, net
38
37
117
114
Gain on the early extinguishment of debt
(7)
(169)
(7)
(169)
Other expense (income), net
—
3
(1)
1
Total expenses
1,532
1,414
4,417
4,376
Income (loss) before income taxes, equity in earnings and noncontrolling interests
3
170
(87)
10
Income tax expense (benefit)
2
45
(15)
7
Equity in earnings of unconsolidated entities
(6)
(4)
(8)
(7)
Net income (loss)
7
129
(64)
10
Less: Net income attributable to noncontrolling interests
—
—
—
—
Net income (loss) attributable to Anywhere
$ 7
$ 129
$ (64)
$ 10
Earnings (loss) per share attributable to Anywhere shareholders:
Basic earnings (loss) per share
$ 0.06
$ 1.17
$ (0.58)
$ 0.09
Diluted earnings (loss) per share
$ 0.06
$ 1.15
$ (0.58)
$ 0.09
Weighted average common and common equivalent shares of Anywhere outstanding:
Basic
111.3
110.5
111.1
110.2
Diluted
112.2
112.1
111.1
111.6
Table 1a
ANYWHERE REAL ESTATE INC.
NON-GAAP RECONCILIATION
ADJUSTED NET INCOME (LOSS)
(In millions, except per share data)
Set forth in the table below is a reconciliation of Net income (loss) attributable to Anywhere to Adjusted net income (loss) as defined in Table 9 for the three and nine months ended September 30, 2024 and 2023:
Three Months Ended September 30,
Nine Months EndedSeptember 30,
2024
2023
2024
2023
Net income (loss) attributable to Anywhere
$ 7
$ 129
$ (64)
$ 10
Addback:
Former parent legacy (benefit) cost, net (a)
(1)
—
1
17
Restructuring costs, net
6
9
24
40
Impairments
1
3
9
11
Gain on the early extinguishment of debt (b)
(7)
(169)
(7)
(169)
Loss on the sale of businesses, investments or other assets, net
—
3
—
2
Adjustments for tax effect (c)
—
42
(7)
27
Adjusted net income (loss) attributable to Anywhere
$ 6
$ 17
$ (44)
$ (62)
(a)
Former parent legacy items relate to a legacy tax matter.
(b)
The gain on the early extinguishment of debt relates to the repurchases of Unsecured Notes in 2024, as well as the debt exchange transactions and open market debt repurchases in 2023.
(c)
Reflects tax effect of adjustments at the Company's blended state and federal statutory rate.
Table 2
ANYWHERE REAL ESTATE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
(Unaudited)
September 30,2024
December 31,2023
ASSETS
Current assets:
Cash and cash equivalents
$ 102
$ 106
Restricted cash
4
13
Trade receivables (net of allowance for doubtful accounts of $17 and $18)
124
105
Relocation receivables
199
138
Other current assets
219
218
Total current assets
648
580
Property and equipment, net
248
280
Operating lease assets, net
346
380
Goodwill
2,499
2,499
Trademarks
586
586
Franchise agreements, net
837
887
Other intangibles, net
111
127
Other non-current assets
473
500
Total assets
$ 5,748
$ 5,839
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$ 102
$ 99
Securitization obligations
148
115
Current portion of long-term debt
500
307
Current portion of operating lease liabilities
114
113
Accrued expenses and other current liabilities
583
573
Total current liabilities
1,447
1,207
Long-term debt
2,030
2,235
Long-term operating lease liabilities
291
333
Deferred income taxes
190
207
Other non-current liabilities
164
176
Total liabilities
4,122
4,158
Commitments and contingencies
Equity:
Anywhere preferred stock: $0.01 par value; 50,000,000 shares authorized, none issuedand outstanding at September 30, 2024 and December 31, 2023
—
—
Anywhere common stock: $0.01 par value; 400,000,000 shares authorized, 111,258,655shares issued and outstanding at September 30, 2024 and 110,488,093 shares issuedand outstanding at December 31, 2023
1
1
Additional paid-in capital
4,822
4,813
Accumulated deficit
(3,155)
(3,091)
Accumulated other comprehensive loss
(44)
(44)
Total stockholders' equity
1,624
1,679
Noncontrolling interests
2
2
Total equity
1,626
1,681
Total liabilities and equity
$ 5,748
$ 5,839
Table 3
ANYWHERE REAL ESTATE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Nine Months Ended September 30,
2024
2023
Operating Activities
