Douglas Elliman Inc (DOUG) 2022 Q4 法說會逐字稿

Welcome to Douglas Elements Inc.'s Fourth Quarter 2022 Earnings Conference Call. The call is being recorded and simultaneously webcast. An archived version of the webcast will be available on the Investor Relations section of the company's website located at investors.element.com for 1 year.

歡迎來到 Douglas Elements Inc. 的 2022 年第四季度收益電話會議。通話正在錄音並同時進行網絡直播。網絡廣播的存檔版本將在公司網站 investors.element.com 的投資者關係部分提供，有效期為 1 年。

During the call, the terms adjusted EBITDA and adjusted net income will be used. These terms are non-GAAP financial measures and should be considered in addition to, but not as a substitute for other measures of financial performance prepared in accordance with GAAP. Reconciliations to adjusted EBITDA and adjusted net income are contained in the company's earnings release, which have been posted to the Investor Relations section of the company's website.

在通話期間，將使用調整後的 EBITDA 和調整後的淨收入這兩個術語。這些術語是非 GAAP 財務指標，應作為補充考慮，但不能替代根據 GAAP 編制的其他財務業績指標。調整後 EBITDA 和調整後淨收入的對賬包含在公司的收益報告中，該報告已發佈在公司網站的投資者關係部分。

Before the call begins, I would like to read the safe harbor statement. The statements made during this conference call that are not historical facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ from those set forth in, or implied by forward-looking statements. These risks are described in more detail in the company's Securities and Exchange Commission filings.

在通話開始之前，我想閱讀安全港聲明。本次電話會議期間作出的非歷史事實的陳述屬於前瞻性陳述，存在風險和不確定性，可能導致實際結果與前瞻性陳述中所列或暗示的結果不同。這些風險在公司提交給美國證券交易委員會的文件中有更詳細的描述。

Now I'd like to turn the call over to Chairman, President and Chief Executive Officer of Douglas Elliman, Howard Lorber.

現在我想把電話轉給 Douglas Elliman 的董事長、總裁兼首席執行官 Howard Lorber。

Good morning, and thank you for joining us. With me today are Richard Lampen, our Chief Operating Officer; Brian Kirkland, our Chief Financial Officer; and Scott Durkin, President and CEO of Douglas Elliman Realty, our residential real estate brokerage business.

早上好，感謝您加入我們。今天和我在一起的是我們的首席運營官 Richard Lampen；我們的首席財務官 Brian Kirkland；以及我們住宅房地產經紀業務 Douglas Elliman Realty 的總裁兼首席執行官 Scott Durkin。

On today's call, we will discuss trends in residential real estate, Douglas Elliman's financial results for the 3 months and year ended December 31, 2022, and performance in our luxury markets. All numbers presented this morning will be as of December 31, 2022, unless otherwise stated. We will then provide closing comments and open the call for questions.

在今天的電話會議上，我們將討論住宅房地產的趨勢、Douglas Elliman 截至 2022 年 12 月 31 日的三個月和一年的財務業績，以及我們奢侈品市場的表現。除非另有說明，否則今天上午提供的所有數字均截至 2022 年 12 月 31 日。然後我們將提供結束評論並開始提問。

I would like to just begin by discussing the current operating environment for residential real estate, and why we believe Douglas Elliman is well positioned. After reaching a generational peak in 2021, the residential real estate industry faced significant headwords -- headwinds in 2022, with transaction volume and the value of existing home sales each declining by more than 30% according to the National Association of Realtors. Despite these trends, we are proud to report that Douglas Elliman outperformed the industry in 2022, with transaction volume and gross transaction volume declining by approximately 18% and 16%, respectively.

我想首先討論住宅房地產的當前運營環境，以及為什麼我們認為 Douglas Elliman 處於有利地位。根據全國房地產經紀人協會的數據，在 2021 年達到一代人的高峰之後，住宅房地產行業面臨著重大的頭條新聞——2022 年的逆風，交易量和現房銷售價值均下降了 30% 以上。儘管存在這些趨勢，但我們很自豪地報告道格拉斯·艾麗曼 (Douglas Elliman) 在 2022 年的表現優於行業，交易量和總交易量分別下降了約 18% 和 16%。

These declines were driven by significant increases in mortgage interest rates, volatility in the financial markets and listing inventory shortages in luxury markets in which we are active. However, because of the limited inventory available in luxury markets, prices remain stable. Sudden increases in borrowing costs, constrained supply from entering the housing market as homeowners remain reluctant to part with their lower mortgage rates obtained over the past several years.

這些下降的原因是抵押貸款利率大幅上升、金融市場波動以及我們活躍的奢侈品市場的庫存短缺。然而，由於奢侈品市場的庫存有限，價格保持穩定。借貸成本突然增加，進入房地產市場的供應受限，因為房主仍然不願放棄過去幾年獲得的較低抵押貸款利率。

Looking ahead, we continue to believe tight supply will gradually ease as time passes and consumers adjust to higher interest rates and the sellers adjust price expectations accordingly.

展望未來，我們仍然相信，隨著時間的推移，消費者會適應更高的利率，賣家也會相應地調整價格預期，供應緊張的局面將逐漸緩解。

Importantly, in residential real estate, luxury markets are usually the last markets to enter a down cycle and the first markets to emerge when the cycle ends. Therefore, we see significant growth opportunities in Douglas Elliman's luxury markets when market uncertainty subsides. And we believe we will be well positioned in these markets to capture market share by leveraging our key strengths, which include first and most importantly, our global network and outstanding relationships with our outstanding agents. We increased our agent count by almost 400 agents in 2022, including some of the industry's most celebrated teams and individuals, and remain very proud of our 87% agent retention rate.

重要的是，在住宅房地產中，豪宅市場通常是最後進入下行週期的市場，也是周期結束時最先出現的市場。因此，當市場不確定性消退時，我們看到 Douglas Elliman 的奢侈品市場存在重大增長機會。我們相信，我們將在這些市場中處於有利地位，通過利用我們的主要優勢奪取市場份額，這些優勢首先是也是最重要的，包括我們的全球網絡以及與我們優秀代理商的良好關係。到 2022 年，我們的代理人數量增加了近 400 名，其中包括一些業內最著名的團隊和個人，我們仍然為我們 87% 的代理人保留率感到自豪。

We are also proud to operate our preeminent world-class Douglas Elliman development marketing business. This business provides an incentive for agents to join the Elliman team. In 2022, we added $3.5 billion of gross transaction value to our development and marketing business in Florida, New York, California, Massachusetts and Texas, which will provide long-term value as these transactions close over the next several years. Our next strength is our approach to expansion and the exciting opportunities to expand the Douglas Elliman footprint. In 2022, we entered the Las Vegas, Dallas and D.C. venture markets as well as growing markets such as Ponte Vedra Beach, Vero Beach and tucked New Canyon, Newport Beach and Basalt, Colorado. These markets represent approximately $50 billion of total available annual gross transaction value. And along with our market share gains in our existing markets are a critical part of our growth proposition.

我們也很自豪能夠經營我們卓越的世界級 Douglas Elliman 開發營銷業務。該業務為代理商加入 Elliman 團隊提供了激勵。 2022 年，我們在佛羅里達州、紐約州、加利福尼亞州、馬薩諸塞州和得克薩斯州的開發和營銷業務增加了 35 億美元的總交易價值，隨著這些交易在未來幾年內完成，這將提供長期價值。我們的下一個優勢是我們的擴張方式和擴大 Douglas Elliman 足蹟的令人興奮的機會。 2022 年，我們進入了拉斯維加斯、達拉斯和華盛頓特區的風險投資市場，以及 Ponte Vedra Beach、Vero Beach 和隱蔽的 New Canyon、Newport Beach 和科羅拉多州玄武岩等成長型市場。這些市場代表了大約 500 億美元的可用年度總交易價值。隨著我們在現有市場中的市場份額增加，這是我們增長主張的關鍵部分。

As we expand, our distinct approach to technology will provide agents with state-of-the-art applications designed to increase their productivity and business. Douglas Elliman's agents continue to embrace these enhancements and technology remains a critical component in recruiting. And our financial profile will provide flexibility and competitive advantage to expand. As of December 31, 2022, our strong liquidity consisted of $164 million of cash and cash equivalents and no long-term debt.

隨著我們的擴張，我們獨特的技術方法將為代理商提供最先進的應用程序，旨在提高他們的生產力和業務。道格拉斯·艾麗曼 (Douglas Elliman) 的代理人繼續接受這些改進，技術仍然是招聘的關鍵組成部分。我們的財務狀況將為擴展提供靈活性和競爭優勢。截至 2022 年 12 月 31 日，我們強大的流動性包括 1.64 億美元的現金和現金等價物，沒有長期債務。

Our strong balance sheet underscores Douglas Elliman's long history of profitability and our ability to adjust to various market conditions. Our liquidity provides us with a competitive advantage to grow our core brokerage business as well as scale our overhead expenses when entering new markets.

我們強勁的資產負債表凸顯了 Douglas Elliman 長期的盈利能力以及我們適應各種市場條件的能力。我們的流動性為我們提供了競爭優勢，以發展我們的核心經紀業務，並在進入新市場時擴大我們的管理費用。

Turning to our stewardship of expenses. As you are aware, in 2020, we successfully reduced enterprise-wide nonactivity based expenses across our regions. While we continue to monitor these expenses during 2021 and 2022, we also made opportunistic investments in our support network for agents as well as our technology infrastructure.

轉向我們的費用管理。如您所知，在 2020 年，我們成功地減少了我們各地區的企業範圍內基於非活動的支出。在我們繼續監控 2021 年和 2022 年期間這些費用的同時，我們還對我們的代理商支持網絡以及我們的技術基礎設施進行了機會性投資。

While this increased total expenses from '20 to '22, we believe these investments will provide long-term value for our stockholders. Leveraging decades of real estate industry experience, Douglas Elliman's management team is taking additional steps to better position Douglas Elliman for the future without impacting the service level we provide to agents. For example, in 2023, thus far, we have frozen hiring, and by normal attrition, reduce head count. In the event of an opportunity to add a position that will serve our agent network, we have implemented policies to require senior approval for any new position, reduced sponsorships and streamlined advertising and have begun the process of consolidating office space, which we will -- expect will begin to reduce rent expenses during 2023 and more meaningful in the second half of 2024.

雖然這將總支出從 20 年增加到 22 年，但我們相信這些投資將為我們的股東提供長期價值。憑藉數十年的房地產行業經驗，Douglas Elliman 的管理團隊正在採取額外措施，在不影響我們為代理商提供的服務水平的情況下，更好地定位 Douglas Elliman 的未來。例如，在 2023 年，到目前為止，我們已經凍結了招聘，並通過正常減員來減少員工人數。如果有機會增加一個為我們的代理網絡服務的職位，我們已經實施了要求高級批准任何新職位的政策，減少贊助和簡化廣告，並開始整合辦公空間的過程，我們將 -預計將在 2023 年開始減少租金支出，並在 2024 年下半年更有意義。

We believe that these changes will result in a nimbler Douglas Elliman.

我們相信，這些變化將使 Douglas Elliman 變得更加靈活。

Now returning to Douglas Elliman's financial results for the 3 months ended December 31, 2022. Douglas Elliman reported $207.3 million in revenues compared to $334 million in the 2021 quarter. Net loss attributed to Douglas Elliman for the 3 months ended was $18.4 million or $0.24 per diluted share compared to net income of $20.2 million or $0.26 per diluted share in the 2021 quarterly period. Adjusted EBITDA attributed to Douglas Elliman was a loss of $17.1 million compared to income of $21.3 million in the 2021 quarterly period.

現在回到 Douglas Elliman 截至 2022 年 12 月 31 日的三個月的財務業績。Douglas Elliman 報告的收入為 2.073 億美元，而 2021 年季度為 3.34 億美元。截至 3 個月，道格拉斯·埃利曼 (Douglas Elliman) 的淨虧損為 1840 萬美元或攤薄後每股收益 0.24 美元，而 2021 年季度的淨收入為 2020 萬美元或攤薄後每股收益 0.26 美元。歸因於 Douglas Elliman 的調整後 EBITDA 虧損 1,710 萬美元，而 2021 年季度的收入為 2,130 萬美元。

Douglas Elliman began operating as a stand-alone public company in 2022, following its spin-off from Vector Group. Expenses incurred by our public company operations are reported in the Corporate and Other segment, and the operations of our brokerage businesses are reported in our real estate brokerage segment.

Douglas Elliman 在從 Vector Group 分拆出來後，於 2022 年開始作為一家獨立的上市公司運營。我們的上市公司運營產生的費用在公司和其他部門報告，我們的經紀業務運營在我們的房地產經紀部門報告。

For comparison purposes, our real estate brokerage segment reported an operating loss of $15.6 million in 2022 compared to operating income of $19.2 million in the 2021 quarterly period.

為了進行比較，我們的房地產經紀部門報告 2022 年營業虧損為 1560 萬美元，而 2021 年季度營業收入為 1920 萬美元。

Adjusted EBITDA attributed to our real estate brokerage segment was a loss of $12.6 million in the 2022 period compared to income of $21.3 million in the 2021 quarterly period. Adjusted net loss attributed to Douglas Elliman was $18.4 million or $0.24 per share compared to adjusted net income of $18.6 million or $0.24 per share in the 2021 quarterly period. We anticipate that the results for the first quarter of 2023 will reflect the same trends of significant year-over-year declines.

歸因於我們房地產經紀業務的調整後 EBITDA 在 2022 年期間虧損 1260 萬美元，而 2021 年季度期間的收入為 2130 萬美元。歸因於 Douglas Elliman 的調整後淨虧損為 1840 萬美元或每股 0.24 美元，而 2021 年季度的調整後淨收入為 1860 萬美元或每股 0.24 美元。我們預計 2023 年第一季度的業績將反映出同比大幅下降的相同趨勢。

Moving now to Douglas Elliman's financial results for the year ended December 31, 2022. Douglas Elliman reported $1.15 billion in revenues in 2022 compared to $1.35 billion in 2021. Net loss attributed to Douglas Elliman was $5.6 million or $0.08 per diluted share compared to net income of $98.8 million or $1.27 per diluted share in 2021.

現在轉到 Douglas Elliman 截至 2022 年 12 月 31 日止年度的財務業績。Douglas Elliman 報告 2022 年的收入為 11.5 億美元，而 2021 年為 13.5 億美元。與淨收入相比，Douglas Elliman 的淨虧損為 560 萬美元或攤薄後每股虧損 0.08 美元2021 年每股收益為 9880 萬美元或 1.27 美元。

Adjusted EBITDA attributed to Douglas Elliman was $15 million compared to $110.7 million in 2021. For comparison purposes, our real estate brokerage segment reported operating income of $22.0 million compared to $102.1 million in 2021. Adjusted EBITDA attributed to our real estate brokerage segment was $34.5 million compared to $110.7 million in 2021. Adjusted net loss attributed to Douglas Elliman was $6.2 million or $0.09 per share compared to adjusted net income of $100.5 million or $1.29 per share in 2021.

歸因於 Douglas Elliman 的調整後 EBITDA 為 1500 萬美元，而 2021 年為 1.107 億美元。為了進行比較，我們的房地產經紀部門報告的營業收入為 2200 萬美元，而 2021 年為 1.021 億美元。調整後的 EBITDA 歸因於我們的房地產經紀部門為 3450 萬美元與 2021 年的 1.107 億美元相比。歸因於 Douglas Elliman 的調整後淨虧損為 620 萬美元或每股 0.09 美元，而 2021 年調整後的淨收入為 1.005 億美元或每股 1.29 美元。

In summary, Douglas Elliman weathered the macro -- macroeconomic challenges of 2022, and we believe our differentiated platform positions us for long-term growth.

總而言之，Douglas Elliman 經受住了 2022 年的宏觀經濟挑戰，我們相信我們的差異化平台為我們的長期增長奠定了基礎。

Our proven management team has a successful history of navigating many economic cycles and applying financial discipline that balances the importance of maintaining revenue and managing operating expenses to create long-term stockholder value. Looking ahead, in addition to driving operational efficiencies, we are focused on strategic market expansion, continued recruitment of outstanding talent and further adoption of innovative solutions to empower our agents.

我們久經考驗的管理團隊在駕馭許多經濟周期和應用財務紀律方面有著成功的歷史，這些紀律平衡了維持收入和管理運營支出的重要性，以創造長期股東價值。展望未來，除了提高運營效率外，我們還專注於戰略性市場擴張、持續招聘優秀人才以及進一步採用創新解決方案來增強我們代理商的能力。

Finally, during the fourth quarter, we were pleased to pay another $0.05 per share dividend to our stockholders. It is our expectation that the dividend will serve as a key component of our capital allocation going forward.

最後，在第四季度，我們很高興再次向股東支付每股 0.05 美元的股息。我們預計股息將成為我們未來資本配置的重要組成部分。

With that, we will be happy to answer questions. Operator?

有了這個，我們將很樂意回答問題。操作員？

(Operator Instructions) Our first question comes from the line of Daniel Fannon from Jefferies LLC.

（操作員說明）我們的第一個問題來自 Jefferies LLC 的 Daniel Fannon。

Wanted to follow up on the comments of just around the current environment. I think you said in your prepared remarks that 1Q would be similar to 4Q. So hoping you could maybe expand upon -- maybe regions or areas where there is some change or things that might be looking a little better or worse, more inventory, more activity? I guess if there's any delineation across the geographies, that would be helpful.

想跟進剛剛圍繞當前環境的評論。我想你在準備好的發言中說過，第一季度與第四季度類似。所以希望你可以擴展——也許有一些變化的地區或地區，或者看起來更好或更糟的東西，更多的庫存，更多的活動？我想如果有任何跨地域的劃分，那會很有幫助。

Sure. I think that when you look in New York, especially in Manhattan, has probably performed the best, but that's because it has years of subpar performance even before the pandemic. So the comparison to 2021 realistically -- this is not a really good comparison. Probably better comparisons are towards the years right before the pandemic, as I said, 2016, '17, '18, '19. So when you do a comparison there, Manhattan, New York City is looking pretty strong. The other markets which are markets such as Aspen, Aspen went up tremendously in 2021, has come down to a small degree. The real issue that I said is the fact that there is very little inventory. The only place where there is inventory or new inventory is new development. That's why we're very strong and have signed up many new development projects. And the new development projects we are in the market with now are doing well. Again, I think there's a number of reasons for that. First of all, when you start selling a new development project, it's generally around 3 years until the project is finished and the closings are happening. And that gives people also that period of time to hope that interest rates, mortgage rates will be lower during that 3-year period of time. So that's why the -- that's why the market is producing the most new inventory.

當然。我認為，當你看紐約，尤其是曼哈頓時，它可能表現最好，但那是因為它甚至在大流行之前就已經有多年不佳的表現。所以實際上與 2021 年的比較——這不是一個很好的比較。正如我所說，2016 年、17 年、18 年、19 年，比較大流行之前的幾年可能會更好。因此，當您在那裡進行比較時，紐約市曼哈頓看起來非常強大。其他市場是阿斯彭等市場，阿斯彭在 2021 年大幅上漲，但已小幅回落。我說的真正問題是存貨很少。唯一有庫存或新庫存的地方就是新開發項目。這就是為什麼我們非常強大並簽署了許多新的開發項目。我們現在在市場上的新開發項目表現良好。同樣，我認為這有很多原因。首先，當你開始銷售一個新的開發項目時，通常需要 3 年左右的時間才能完成項目並進行交割。這也讓人們有一段時間希望在這 3 年期間利率和抵押貸款利率會更低。這就是為什麼 - 這就是為什麼市場正在生產最新庫存的原因。

As we said, people are worried about selling what they have today because they may not be able to find something else to buy. And then, at the same time, even if they do, they're going to be giving up a low mortgage rate and going into a much higher mortgage rate environment.

正如我們所說，人們擔心賣掉他們今天擁有的東西，因為他們可能找不到其他東西可以買。然後，與此同時，即使他們這樣做了，他們也會放棄低抵押貸款利率並進入抵押貸款利率更高的環境。

Understood. Okay. I wanted to follow up just on the balance sheet. You mentioned the dividend, but obviously, you have a lot of cash. Thinking, given where the stock is, if there's any thoughts of a buyback potentially? And then also just looking at the change in cash, if I heard you correct, I think you said $164 million. So that's around $29 million change quarter-over-quarter, didn't lose that much. I don't know, is there a lot of CapEx in the quarter? Just curious as the uses of cash and how we should think about that going forward?

明白了。好的。我只想跟進資產負債表。你提到了股息，但很明顯，你有很多現金。考慮到股票的位置，是否有任何潛在的回購想法？然後再看看現金的變化，如果我沒聽錯的話，我想你說的是 1.64 億美元。因此，環比變化約為 2900 萬美元，並沒有損失那麼多。我不知道，這個季度有很多資本支出嗎？只是好奇現金的用途以及我們應該如何考慮未來的發展？

B.K., do you want to go through that?

B.K.，你想經歷那個嗎？

Well, in addition to the EBITDA loss, we also pay a dividend every quarter, which is about $4 million. So I think if you do that, along with working capital, that reconciles the cash change.

那麼，除了 EBITDA 損失之外，我們每個季度還支付股息，大約是 400 萬美元。所以我認為，如果你這樣做，再加上營運資金，就可以調和現金變化。

It was our internal buyback.

這是我們的內部回購。

Yes. there was a debt repayment of $3 million in October.

是的。 10 月份償還了 300 萬美元的債務。

Okay. And the buyback? Or other uses of cash perspective.

好的。回購呢？或現金角度的其他用途。

As far as the perspective of internal buyback and -- because we were spun off from Vector Group and -- at the end of 2021, our ability to buy back stock is somewhat limited until we get 2 years past that spinoff. And after that, the company, we'll always be opportunistic. You've seen that insiders have bought the stock over the last year. And we always view this as a very good value because you're buying one of the best names in real estate and Douglas Elliman.

就內部回購的角度而言——因為我們是從 Vector Group 中分離出來的——在 2021 年底，我們回購股票的能力在一定程度上受到限制，直到我們在分拆之後 2 年。在那之後，公司，我們將永遠是機會主義的。您已經看到內部人士在去年購買了該股票。我們始終認為這是一個非常好的價值，因為您購買的是房地產和 Douglas Elliman 中最好的名字之一。

Understood. Okay. That's helpful. And then the -- all the initiatives that you announced proactively around expenses, the frozen hiring, reduced sponsor, consolidated office space. And I know it's going to come through later in the year, but is there a way to put a dollar amount around some of those initiatives?

明白了。好的。這很有幫助。然後——你主動宣布的所有關於開支、凍結招聘、減少贊助商、合併辦公空間的舉措。我知道它會在今年晚些時候通過，但有沒有辦法為其中一些舉措投入資金？

Well, look, I mean, yes, we have eliminated certain expenses on the marketing and on the event side. I don't think we could give you a really -- an exact amount at this particular moment. What we do know is -- we do know when leases expire, okay? And that's why we believe, for instance, that this year and next year will be the first couple of years that really show reductions in expenses with consolidation of some of our offices. And they're somewhat large leases that we've been stuck with for many years and that we really don't need that space anymore.

好吧，我的意思是，是的，我們已經取消了營銷和活動方面的某些費用。我不認為我們可以在這個特定時刻給你一個真正的 - 一個確切的數量。我們所知道的是——我們確實知道租約何時到期，好嗎？這就是為什麼我們相信，例如，今年和明年將是頭幾年真正顯示出通過合併我們的一些辦公室來減少開支的原因。它們是我們多年來一直堅持的大型租約，我們真的不再需要那個空間了。

And so when those consolidations start happening, which they will over this year and next year, I think that will really be a big help to getting our numbers more in line with where we want to be.

因此，當這些合併開始發生時，他們將在今年和明年進行，我認為這將真正有助於使我們的數字更符合我們想要的位置。

Okay. And then just lastly, the -- I think another number you threw out was an 87% retention rate. Was that for the fourth quarter? Or is that for the full year?

好的。最後，我認為你拋出的另一個數字是 87% 的保留率。那是第四季度的嗎？或者是全年？

Full year.

整年。

And did that change much in 4Q?

第四季度變化很大嗎？

No, that was stable. I believe it was 88% in the 3rd -- at September 30 -- for the 12 months trailing September 30, 2022, Dan.

不，那是穩定的。丹，我相信在 2022 年 9 月 30 日之後的 12 個月裡，第三次——9 月 30 日——是 88%。

Ladies and gentlemen, those are all the questions that we have today. Thank you for joining us on Douglas Element's Fourth Quarter 2022 Earnings Conference Call. This will conclude our call. We hope you have a good day, and you may now disconnect.

女士們，先生們，這些就是我們今天要提出的所有問題。感謝您參加 Douglas Element 的 2022 年第四季度收益電話會議。這將結束我們的通話。我們希望您今天過得愉快，現在您可以斷開連接了。