The RMR Group Inc. Announces Fourth Quarter and Fiscal Year End 2018 Results
The RMR Group Inc. (Nasdaq: RMR) today announced its financial results for the fiscal quarter ended September 30, 2018.
Adam Portnoy, President and Chief Executive Officer, made the following statement regarding the fourth quarter fiscal 2018 results:
"The fourth quarter marked the close of another strong fiscal year with continued growth in revenues, net income per share and Adjusted EBITDA. We are especially pleased with this fiscal quarter's Adjusted EBITDA of $31.2 million and Adjusted EBITDA margin of 59.7%, both at their highest levels since we became a public company in 2015 and reflecting the strength and stability of our operating platform.
In this fiscal year we also made progress on our goals to diversify our revenues and grow assets under management through the formation of two new client companies, including our first real estate investment vehicle targeting private investors."
Fourth Quarter Fiscal 2018 Highlights:
- Total revenues for the quarter ended September 30, 2018 were $65.1 million, compared to total revenues for the quarter ended September 30, 2017 of $56.6 million.
- The RMR Group Inc. earned management services revenues for the three months ended September 30, 2018 and 2017 from the following sources (dollars in thousands):
|Three Months Ended September 30,|
|Managed Equity REITs (1)||$||41,032||83.5||%||$||36,845||83.3||%|
|Managed Operators (2)||6,903||14.0||%||6,779||15.3||%|
|Total Management Services Revenues||49,137||100.0||%||44,258||100.0||%|
|(1)||Managed Equity REITs collectively refers to: Government Properties Income Trust (GOV), Hospitality Properties Trust (HPT), Industrial Logistics Properties Trust (ILPT), Select Income REIT (SIR) and Senior Housing Properties Trust (SNH).|
|(2)||Managed Operators collectively refers to: Five Star Senior Living Inc. (FVE), Sonesta International Hotels Corporation and TravelCenters of America LLC (TA).|
- For the three months ended September 30, 2018, net income was $19.0 million and net income attributable to The RMR Group Inc. was $8.2 million, or $0.50 per diluted share, compared to net income of $13.1 million and net income attributable to The RMR Group Inc. of $5.0 million, or $0.31 per diluted share, for the three months ended September 30, 2017.
- For the three months ended September 30, 2018, adjusted net income attributable to The RMR Group Inc. was $9.9 million, or $0.61 per diluted share, compared to $7.1 million, or $0.44 per diluted share, for the three months ended September 30, 2017. The adjustments to net income attributable to The RMR Group Inc. this quarter included $1.6 million, or $0.10 per diluted share, of impairment losses on our investment in Tremont Mortgage Trust, or TRMT, as well as $0.5 million, or $0.03 per diluted share, of separation costs related to former officers, and $0.3 million, or $0.02 per diluted share, of transaction costs related to the formation of the RMR Office Property Fund LP, or the Private Fund, offset by $0.7 million, or $0.04 per diluted share, related to certain one time compensation adjustments. The adjustments to net income attributable to The RMR Group Inc. for the fiscal fourth quarter last year were primarily related to $2.1 million, or $0.13 per share, of transaction costs.
- For the three months ended September 30, 2018, Adjusted EBITDA was $31.2 million and Adjusted EBITDA Margin was 59.7%, compared to Adjusted EBITDA of $27.1 million and Adjusted EBITDA Margin of 56.8% for the three months ended September 30, 2017.
- As of September 30, 2018, The RMR Group Inc. had $256.8 million in cash and cash equivalents on a consolidated basis with no outstanding debt obligations.
- As of September 30, 2018, The RMR Group Inc. had $30.1 billion of total assets under management, compared to total assets under management of $28.5 billion as of September 30, 2017.
Reconciliations to GAAP: