Realogy Holdings Corp recently provided preliminary estimates of certain of its financial and operational results for the first quarter ended March 31, 2013:
• Net revenue is expected to be in the range of $950 million to $960 million, representing an increase of 9 percent to 10 percent compared to first quarter 2012.
• Adjusted EBITDA(1) is expected to be in the range of $70 million to $74 million, representing a 32 percent to 40 percent increase from prior year results.
• The net loss attributable to the Company for the quarter is expected to be in the range of $69 million to $78 million. The net loss includes approximately $89 million of interest expense, a reduction of approximately $81 million, or 48 percent, from first quarter of 2012, and approximately $42 million of depreciation and amortization. Annual cash interest for 2013 is expected to be $315 to $320 million, which gives effect to the credit agreement refinancing and the April 2013 note redemptions.
The improved results were largely due to an increase in sales volume (homesale transaction sides times average sale price) at the franchise (RFG) and company-owned (NRT) real estate services segments combined. Overall, Realogy’s first quarter sales volume increased 14 percent year-over-year. The first quarter of 2013 contained one less business day than the first quarter of 2012, which adversely impacted the results by about two percentage points. Specifically, RFG had a 9 percent increase in average home-sale price and a 6 percent increase in home-sale transaction sides year-over-year, while NRT had a 6 percent increase in average homesale price and a 5 percent increase in home-sale transaction sides during the first quarter.
“First quarter sales volume for RFG and NRT combined was at the top of the range we provided in February 2013,” says Richard A. Smith, Realogy’s chairman, chief executive officer and president. “On a national level, pricing continues to react to low inventory levels as demand is exceeding available supply. As anticipated for the spring selling season, inventory levels are starting to modestly increase. Consistent with the views we expressed in the first quarter, we remain confident in the strength of the housing recovery.”
“Based on the visibility we have into the coming months from our open contracts in February and March, we currently anticipate seeing sales volume percentage increases in the low- to mid-teens in the second quarter at the RFG and NRT segments combined,” said Anthony E. Hull, executive vice president chief financial officer and treasurer. “We will provide an update on second quarter 2013 driver trends when we hold our conference call in May.”
At March 31, 2013, the Company’s net debt was $4.1 billion, which included $135 million of borrowings under its revolving credit facility. As previously disclosed, the Company will redeem an aggregate of approximately $330 million of debt in the next two weeks, constituting all outstanding Senior Subordinated Notes and its 12 percent Senior Notes.
The preliminary estimate of the Company’s first quarter 2013 financial results presented in this release have not yet been finalized by management or reviewed by our independent registered public accounting firm. When the Company’s actual unaudited first quarter 2013 financial results are reported, they will be reviewed by our independent registered public accounting firm. Realogy’s actual first quarter 2013 financial results could vary materially from those included herein.
For more information, visit www.realogy.com.
