OREANDA-NEWS. Realogy Holdings Corp. (NYSE: RLGY), the preeminent and most integrated provider of residential real estate services in the United States, today reported financial results for the third quarter ended September 30, 2015, including the following highlights:
  • Revenue of $1.7 billion, which represents a 9% increase compared to third quarter 2014, was driven by higher homesale transaction volume.
  • Net income was $110 million, and basic earnings per share was $0.75.
  • Adjusted net income for the quarter was $111 million, and adjusted basic earnings per share is $0.76, increases of 14% and 15%, respectively, on a comparable basis to third quarter 2014 (See Table 1a).
  • Adjusted EBITDA was $308 million, compared to $287 million in the third quarter of 2014, a year-over-year increase of $21 million, or 7%. (See Table 6). Adjusted EBITDA for the third quarter of 2015 would have increased 10% over the prior year quarter on a comparable basis, which normalizes incentive performance accruals by reducing the 2014 third quarter Adjusted EBITDA by $8 million.
  • Free cash flow was $249 million, or $1.70 per share, compared to $234 million, or $1.60 per share, in the prior year period. Year-to-date in 2015 the Company has generated $400 million of free cash flow compared with $251 million during the comparable period in 2014 (See Tables 7a and 7b).
  • In October, the Company completed a successful financing, which included increasing its Revolving Credit Facility to $815 million from $475 million and raising $435 million under a Term Loan A Facility.

Realogy's franchise (RFG) and company-owned (NRT) business segments achieved an 8% increase in combined homesale transaction volume (transaction sides multiplied by average sale price) compared to third quarter 2014. RFG reported a homesale transaction increase of 4% and an average homesale price increase of 5%. NRT reported a homesale transaction increase of 12% and an average homesale price decrease of 4%. The increase in NRT's transaction sides was bolstered by the strategic addition of the Coldwell Banker United brokerage operations, which have a lower average sales price.

"Our strong third quarter results reflect our solid financial and operating performance," said Richard A. Smith, Realogy's chairman, chief executive officer and president. "Thus far, we believe 2015 represents a sustainable and steady housing recovery that is still in its early stages, that most of the relevant economic and demographic factors that impact housing are moving in the right direction, and we expect to benefit from that trend."

"We remain focused on our strategic initiatives, enhancing our platforms and growth opportunities with the ZAP technology roll-out while continuing to drive efficiencies throughout our business," continued Smith. "We are highly focused on continuing to generate strong free cash flow and delivered in the third quarter, generating $249 million of free cash flow for the quarter and $400 million total year-to-date."

"Looking ahead to the fourth quarter of 2015, we expect to achieve homesale transaction volume gains in the range of 7% to 10% year-over-year on a company-wide basis," continued Smith. "Based on our closed and open sales activity in September and October, we expect fourth quarter homesale transaction sides to be up 4% to 6% year-over-year and average homesale price to increase 3% to 4% for RFG and NRT combined."

"In October, we completed a successful financing which included increasing the revolving credit facility from $475 million to $815 million and raising $435 million under a new Term Loan A Facility," said Anthony E. Hull, executive vice president, chief financial officer and treasurer. "This financing, coupled with Realogy's strong free cash flow, will enable Realogy to repay approximately $800 million of high cost debt by year-end, be positioned to repay the $500 million of senior notes due next May and reduce our run-rate corporate cash interest expense to approximately $170 million in 2016, down from the current annualized run rate of $210 million."