Re/Max Holdings Inc (RMAX) 2013 Q4 法說會逐字稿

Good afternoon, and welcome to the RE/MAX Fourth Quarter 2013 Earnings Conference Call.

(Operator Instructions)

Please note, this event is being recorded. I would now like to turn the conference over to Peter Crowe, Director of Investor Relations. Please go ahead.

Thank you, operator, and good afternoon, everyone. Thank you for joining us for the RE/MAX fourth quarter and full-year 2013 earnings conference call. With me today are our Chief Executive Officer, Margaret Kelly; and our Chief Operating Officer and Chief Financial Officer, Dave Metzger.

Before I turn the call over to Margaret, I would like to touch on a few items. First, our earnings release and presentation are available on the Investor Relations page of remax.com.

Second, this call is being recorded. Replays of the call and webcast will be available shortly after the call through April 4th. Please visit the Investor Relations page of remax.com to access either version of the replay.

Turning to slide 2 of our earnings presentation, I would like to remind everyone that on today's call, management's prepared remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today. Examples of forward-looking statements may include those related to agent count, revenue, operating expenses, financial guidance, as well as non-GAAP financial measures.

As a reminder, forward looking statements represent management's current estimates. RE/MAX assumes no obligation to update any forward-looking statements in the future. We encourage listeners to review the more detailed discussions related to these forward-looking statements contained in our filings with the SEC, and the definitions and reconciliations of non-GAAP measures contained in the fourth quarter results press release, which is available on our website.

With that, I would like to turn the call over to RE/MAX CEO, Margaret Kelly. Margaret?

Thank you, Pete, and thanks to everyone on the phone and on the webcast for joining our earnings call.

I would like to start by reviewing our three strategic growth drivers shown on slide 3. The first is agent growth. Our efforts are focused on attracting and retaining highly productive agents and brokers to our network. We saw a great return on our efforts in 2013, as we grew total agent count by 4.7%, adding 4,220 agents to our global network.

Our second growth driver is franchise sales. Selling rights to establish offices and franchises in countries to increase our global network. In 2013, we surpassed 700 franchises sold for the fourth year in a row, which demonstrates our commitment and ability to grow our network.

Our third growth driver is acquiring independently owned RE/MAX regions. We used a portion of the proceeds from our recent IPO to purchase the Southwest and Central Atlantic regions in October of 2013. These acquisitions are very accretive to our business, and have delivered an incremental increase to our revenue.

Post-acquisition, we focus on growing these regions. For example, we acquired the Texas region in December of 2012. And since the acquisition, we grew agent count in Texas by 480 in 2013, versus 86 agents in 2012 as an independent region.

Turning to slide 4, our low fixed costs, low capital investment, and recurring fixed fee revenue model allowed us to deliver revenue growth with high margins and strong cash flow in 2013. Revenues increased to $158.9 million, up 11% compared to 2012. Our recurring revenue streams of annual dues and continuing franchise fees accounted for 59% of our total revenue.

Transaction-based revenue from broker fees was $24.8 million, up 27% compared to 2012, a good indication that we are capitalizing on the recovery. Our adjusted EBITDA was up 16% to $77.3 million in 2013, and the adjusted EBITDA margin was 49% for the full year 2013 compared to 46% in 2012.

And last, we declared our first quarterly dividend of $0.0625. We are in a strong financial position, and we feel paying a dividend reflects the confidence we have in our business, as well as our commitment to returning capital to shareholders.

On the next few slides, I'll provide more detail on our agent growth in 2013. Turning to slide 5, you will see we ended 2013 with 93,228 agents. Now looking at the graph from left to right, note that we increased total agent count by 4.7% or 4,220 agents compared to the year-end of 2012. As for the fourth quarter of 2013, we added 497 agents compared to 105 in the fourth quarter of 2012.

Moving to the right, you will find we added 2,688 agents in the United States since year-end 2012. Our US agent growth of 5.2% outpaced the National Association of Realtors growth of 4.1% in 2013. Ending the year on a strong note in the US, we added 269 agents in the fourth quarter of 2013, for a total of 54,491 agents at December 31st.

In Canada, we added 56 agents since year-end 2012. With 18,922 agents, Canada is a strategically important market for us. As of year-end 2013, RE/MAX agents represent over 17% of the Canadian Real Estate Association membership.

And finally, outside the US and Canada, we ended 2013 with 19,815 agents. We increased our agent count by 1,476 or 8% over year-end 2012.

The majority of these agents are in independent regions. Adding 11 countries in 2013, we continue to build our International infrastructure, and will add regions, offices, and agents in the years to come.

On slide 6, you will see the breakdown of agents and company-owned and independent regions in the US and Canada. The graph on the left shows our independent agent count declined 12.6% from year-end 2012. This is due to the conversion of the Southwest and Central Atlantic agents from independent to company-owned as a result of the acquisition of these regions in October of 2013.

As you can see in the green portion of the graph, we did have organic growth of 866 agents in our independent regions in 2013, for an organic growth rate of 2.6%. The graph on the right highlights the agent growth in our company-owned regions.

The majority of the growth is due to the conversion of the Southwest and Central Atlantic agents from independent to company-owned. We did have organic growth of 1,693 agents since year-end 2012, for an organic growth rate of 5.3%.

And with that, I'll turn the call over to Dave Metzger.

Thank you, Margaret. On the next several slides, we will review our key operating metrics.

Turning to slide 7, fourth quarter 2013 revenue of $40.2 million was up 15% compared to $35.1 million for the same period in 2012. For the full year 2013, our revenue was $158.9 million, up 11% from the same period last year.

The increase in revenue for both the fourth quarter and full-year 2013 was attributable to growth in agent count, and additional revenue as a result of the acquisition of the Texas, Southwest, and Central Atlantic regions, which were completed in December 2012 and October 2013 respectively. Another key driver of revenue for the quarter and the year, was higher broker fee revenue, which increased due to a rise in commissions, resulting from increased home sale transactions and higher home prices.

Turning to slide 8, you will find a breakdown of our 2013 revenue by revenue stream and geographic area. The graph on the left highlights our five revenue streams.

The blue shaded parts of that graph represent our fixed re-occurring revenue streams, which account for 59% of our revenue in 2013, and is comprised of annual dues and continuing franchise fees. This is a very positive attribute of our franchise business model, because it gives us stability when the market fluctuates. Broker fees is our third core revenue stream. When combined with our re-occurring revenue, these three revenue streams make up 75% of our total revenue on an annual basis.

On the right, you will note that we generated 94% of our revenue in the US and Canada in 2013. While we are focused on growing our network and our brand globally, our revenue per agent is substantially higher in North America. So a large part of our focus will continue to be growing the business in North America.

On slide 9, we break out our five revenue streams in more detail. First, we have continuing franchise fees, which are fixed fees paid monthly by the broker owner or an independent region to the Company based on agent count. Continuing franchise fees were $17.4 million for the fourth quarter, up $3.4 million or 24% over the same period last year.

Continuing franchise fees were $64.5 million for the full year 2013, up 14% from full year 2012. The fourth quarter and full-year increases are attributable to the acquisition of the Texas, Southwest, and Central Atlantic regions, and overall growth in US agent count. The acquisitions resulted in $6.9 million of additional continuing franchise fees in 2013. Organic agent count growth in the Company-owned regions in the US and Canada added $2.1 million in continuing franchise fees in 2013. These increases were partially offset by a net decrease of $1.3 million in continuing franchise fees from the Australia and New Zealand regions, which were sold during the fourth quarter of 2012 and are now independent regions.

On January 1, 2014, we increased continuing franchise fees by $3 per month or $36 per year for each agent in a US Company-owned region. This fee is paid on a per agent basis by each brokerage.

Next, we have the second part of our fixed re-occurring revenue stream, annual dues, which are fixed fees paid annually by each of our agents directly to RE/MAX. In the fourth quarter, annual dues revenue was $7.5 million down approximately 1% from the same period in 2012. The decrease is due to the fourth quarter of 2012 not reflecting an adjustment of approximately $300,000, which was subsequently recorded in 2013.

For the full year of 2013, annual dues were $29.5 million, up 2% over 2012. The full-year increase was driven by agent growth of 4,220 in 2013, of which 2,744 were located in the US and Canada, where we derive substantially all of our annual dues revenue.

As of January 1, 2014, we increased our annual dues for agents in the US and Canada from $390 to $400 per year in the respective domestic currency. It is important to note, that Canadian agents pay their annual dues in Canadian dollars, and therefore, we are subject to foreign exchange rate exposure.

In the third row of the table, you will see our broker fees, which are fees paid to us by the broker based on commissions received from agent transactions. During the fourth quarter and full-year 2013, we saw broker fees grow as the real estate recovery continued to gain momentum.

Broker fees were $6.1 million, up 28% or $1.3 million compared to the fourth quarter of 2012. Broker fees were up 27% to $24.8 million for the full year of 2013 compared with 2012, which is a sign our growing agent base is well-established and taking advantage of the housing recovery.

Franchise sales and other franchise revenue were $5.8 million for the fourth quarter, up 19% from the fourth quarter of 2012. For the full year of 2013, franchise sales and other franchise revenue were up 4% to $23.6 million compared to 2012. The increase is due to a higher number of regional and master franchises sold in 2013 compared to 2012.

In 2013, we sold the franchise rights for 18 regions and countries, including Japan for $1 million, compared to the sale of 10 regions and countries in 2012. During 2013, other franchise revenue increased $1.3 million, primarily due to an increase in registration revenue associated with higher attendance at our annual convention. Finally, brokerage revenue for our Company-owned brokerages for the full year of 2013 was $16.5 million, up 2% from 2012 due to increased transaction volume.

On slide 10, you will see in the graph on the left that our adjusted EBITDA for the full year of 2013 was $77.3 million, up 16% or $10.5 million from 2012. Adjusted EBITDA was up 4% or $657,000 for the fourth quarter of 2013 compared to the same period in 2012. The increase in adjusted EBITDA for the full year was primarily the result of an increase in total revenue of $15.2 million arising from the acquisition of the Texas, Southwest, and Central Atlantic regions, agent growth, and higher broker fees.

Offsetting the additional revenue, we had additional selling, operating, and administrative expenses net of our one-time EBITDA adjustments and foreign currency losses. I will discuss our selling, operating, and administrative expenses in more detail later on the call.

Our adjusted EBITDA margin was 49% for the full year of 2013, up from 46% in 2012. This is an important metric for us, as our goal is to have adjusted EBITDA margins in the high 40% range on an annual basis. Our adjusted EBITDA margin was 46% in the fourth quarter of 2013, compared to 51% in the fourth quarter of 2012.

The decrease in margin is primarily attributable to higher selling, operating, and administrative expenses, net of our one-time EBITDA adjustments, and increased foreign currency losses. Due to seasonality, our historical first quarter adjusted EBITDA margin has been in the 38% to 39% range. Our margins fluctuate from quarter to quarter, so it's important to look at our margins on a full-year basis.

Turning to slide 11, the graph on the left side highlights our annual net income. Net income for 2013 was $28.3 million, down $5.1 million from 2012. The decline was driven by an increase in selling, operating, and administrative expenses of $11.9 million, as well as an additional amortization of $4.1 million related to the acquisition of the Texas, Southwest, and Central Atlantic regions.

Net income was also impacted by an increase in other expenses related to additional interest expense on the incremental $45 million of long-term debt borrowed in December 2012 to finance the acquisition of the Texas region. We also had a $1.7 million loss on early extinguishment of debt in the third quarter, and a one-time cost associated with the refinancing of our senior debt facility in July 2013.

These increases were partially offset by a reduction in interest rate. Additionally, we had a foreign currency transaction loss of $764,000 associated with a portion of our cash held in Canadian dollars.

Looking at the graph on the right, net income was $5.6 million in the fourth quarter of 2013, down $1.5 million from the same period in 2012 due to the same factors that affected full-year net income, with the exception of the costs associated with the refinancing of our debt which occurred in the third quarter of 2013.

Since there were a number of one-time expenses and non-cash items this quarter, let's turn our attention to adjusted net income on slide 12. Our adjusted net income was $37.9 million for the full year of 2013, an increase of approximately $6 million or 19% from 2012. The major add backs we had during 2013 included our public offering related expenses, equity-based compensation, and loss on extinguishment of debt.

Adjusted net income for the fourth quarter of 2013 was $9.4 million, up 8% from the same period in 2012. Based on adjusted net income, we reported basic adjusted earnings-per-share of $0.32, and diluted adjusted EPS of $0.31 for the fourth quarter of 2013.

Looking to slide 13. Our selling, operating, and administrative expenses for the full year 2013 were $96.2 million, up 14% or $11.9 million compared to 2012. This is primarily due to a $3.3 million increase in personnel costs driven by $1.9 million of additional equity-based compensation in connection with the IPO, $1.5 million in additional personnel costs associated with our acquisition of the Texas, Southwest, and Central Atlantic regions, and $2.2 million associated with increased headcount and employee incentives. These increases were offset by the divestiture of Australia and New Zealand in the fourth quarter of 2012.

Professional fees increased $6.1 million from 2012, due to $6.5 million of expenses incurred in connection with the IPO, offset by a reduction in professional fees incurred by Australia and New Zealand, which were sold in the fourth quarter of 2012. Rent increased by $600,000 to $14.6 million, due to a $1.2 million loss related to a sublease in our corporate office. Offset by $600,000 reduction in rent expense at our Company-owned brokerages.

Other selling, operating, and administrative expenses increased $1.9 million to $24.1 million for the full year of 2013 compared to 2012. This increase is due to higher total marketing expenses of $1.7 million, driven by additional costs associated with our annual convention in the first quarter and expenses associated with the acquisition of the Texas, Southwest, and Central Atlantic regions.

Our expenses were skewed in 2013 due to the IPO and regional acquisitions. In 2014, we will see our selling, operating, and administrative expenses normalize to a new run rate that included the costs associated with the ongoing activities of a public company. Margaret will provide further details related to 2014 later on the call.

Turning to slide 14, I'd like to give a quick overview of our balance sheet and dividend. Our cash position as of December 31, 2013 stood at $88.4 million, up $19.9 million from December 31, 2012.

With $228.4 million in term loans outstanding at the end of 2013, our debt to adjusted EBITDA ratio stood at 2.96 times and our net debt to adjusted EBITDA ratio stood at 1.81 times. Earlier this week, we announced our first quarterly dividend of $0.0625 cents per share payable on April 18, 2014 to shareholders of record at the close of business on April 4, 2014.

Now I'd like to turn it back over to Margaret who will take us through the rest of the presentation.

Thanks, Dave.

Now turning to slide 15, you will see that Fannie Mae and the National Association of Realtors are predicting existing home sales for 2014 to be essentially steady with 2013 numbers. Existing home sales have had a slow start in 2014 for various reasons, including harsh winter weather and constrained inventory. However, we believe the improving economy and continued job growth are factors that should bring more buyers and sellers into the market.

Home price appreciation is expected to grow 5% to 6% over the strong increases seen in 2013. While inventory is still tight, we are seeing a positive trend in February that should help improve affordability.

Mortgage rates have held steady at 4.25% to 4.5% range since last summer. Fannie Mae and NAR are expecting mortgage rates to rise slightly this year.

But keep in mind, 4.25% or 4.5% rates are still well below the 40-year average of 8.6% for a 30-year fixed rate mortgage. In fact, last year interest rates rose 1%, yet we had the strongest year of existing home sales since 2006. We do not see rising rates as a deterrent to buyers coming into the market, as rates are merely one of many factors in the home buying process.

On slide 16, I would like to touch on a few points related to our outlook for the full year and for the first quarter of 2014. For the full year 2014, agent count is estimated to increase 4% to 5% over 2013.

Revenue is estimated to increase 6% to 7% over 2013. Selling, operating, and administrative expenses are estimated to be 52% to 54% of revenue, and adjusted EBITDA margin is estimated to be at the 47% to 49% range.

For the first quarter of 2014, agent count is estimated to increase by 4% to 4.5% over the first quarter of 2013. Revenue is estimated to increase 6% to 7% over first quarter 2013, subject to fluctuations in the Canadian dollar exchange rate.

Selling, operating, and administrative expenses are estimated to be 60% to 62% of revenue, and adjusted EBITDA margin is estimated to be in the 38% to 40% range, due to normal seasonality. Our SO&A expenses are generally $3 million to $5 million higher in the first quarter compared to later quarters, due to expenses associated with our annual global convention, which is a very important agent and broker engagement and recruiting event for us.

In addition to the increased expenses associated with our convention, seasonality is a key factor in the first quarter. Revenues associated with agents, as well as commissions, are lower in the first quarter compared to the second and third quarters.

Turning to slide 17, I would like to close by saying 2013 was a great year for RE/MAX. We increased the power of our global network and brand by adding high-quality agents, adding offices, and increasing the number of countries where RE/MAX does business.

We are off to a fast start in 2014, as we have released an updated version of our mobile RE/MAX app and launched our new national advertising campaign Dream With Your Eyes Open, which highlights the critical bond between home buyers and sellers and RE/MAX agents. This month, we are also pushing out a new agent recruiting campaign, which is tied to the national ad campaign. With over 93,000 agents in 97 countries we have created a powerful network of agents backed by a single powerful brand, and we are focused on continuing to grow the business and the brand in 2014.

And with that, operator, let's open the line for questions.

(Operator Instructions)

Vikram Malhotra, Morgan Stanley.

I had a couple of questions. Just one on the -- for the quarter. The SG&A, apart from the add backs, were there any other either IPO related costs or other costs that you may have not added back that you may have been recurring that would have elevated the SG&A?

Vikram, this is Dave Metzger. In Q4, there were a couple of other one-time items that would not be add backs. There was some additional costs associated with travel.

We call them IPO costs, but it was really travel to New York and some other things. But they weren't considered IPO costs as part of the IPO per se, they would be one-time costs in Q4. If you take those plus you take -- we had a higher bonus accrual in Q4 2013 than we did in Q4 2012 just because we hit our numbers and there was a larger bonus pool, and then there was some FX losses associated with our Canadian dollars. So if you add a couple of those items back, it gets us back into the high 40%s, 50% adjusted EBITDA margin range which is where we would expect to be.

Okay. And looking at your agent growth expectation for the year, so for next year, for 1Q, you're at 4% to 4.5% and then for the full-year you're at 4% to 5%. So I assume some acceleration throughout the year. Is that how you're expecting agent growth to trend?

I think, and Margaret join in on this, as we see some seasonality in agents joining us typically in Q4 and Q1, we have historically seen losses in those quarters as we're in the new normal now. I think we've seen less attrition, and so we'll start to see more agent growth.

But typically Q1, you wouldn't see as much new agent number of agents coming to RE/MAX. It should accelerate, and that's what we're anticipating into Q2, Q3 time frame, and that's why the percentage -- there was a little bit of difference in the percentages.

Exactly, and, Vikram, as Dave said, it's kind of a new normal. We used to have -- be able to predict it on almost a monthly basis the increases and decreases, but now we have to see what happens going forward.

Okay. And last one from me, and you guys have a nice cash balance now on your books. Any update on any talks with any of the regional owners?

As you know, we continue to have discussions with the region owners just to let them know that we're interested. We -- as those opportunities come up, we'll evaluate them and decide if they're the right opportunity for us, the right transaction for us and the region owner. So, the conversation continues, but there's nothing that's hot right now.

Okay. Thank you, guys.

David Ridley-Lane, Bank of America Merrill Lynch.

I had a question on franchise sales revenue. In 2012, it was about $23 million. In 2013, ex-the Japan sale, it was about the same level. Curious if you see things in the pipeline of franchisee prospects that would be suggestive of growth in that revenue line, or is $23 million in the right revenue run rate for that revenue line in 2014?

So, David, are you talking about country revenue or office revenue? Are we seeing any additional countries coming on?

This -- I'm talking about the franchise sales and other line.

Yes, that line will be pretty steady at about 15%, 16% of our overall revenue. The dollars from the new office sales are pretty steady year over year, as are the renewals. The delta that we've seen in the past, as you've suggested, the Japan that we got for $1 million last year, those typically come along when we have big countries.

China the year before that, don't see a lot of those bigger countries, just because we're in so many countries now we don't see those big opportunities for a large country like a Japan or China out there. So that number will stay pretty steady.

That number will have a touch of growth we think as we start to develop the Japan and China market, as we start to sell subregions there. But for right now, we don't see significant growth in that line item, no.

Also keep in mind that it's franchise sales and other revenue, and that's the other true revenue, which is our convention revenue, the registration, sponsorships, and things like that. So those numbers tend to be fairly steady, so we won't see a significant increase in that line item.

And, David, on the China revenue, we had talked before about the two offices open for one year. And that one year isn't up until the end of April, and so it won't be until after that that we hope to see that regional sales begin.

Got it. Maybe a couple of quick numbers questions. Just since we don't have a normal run rate, what's the right pace of stock based comp going forward?

Well, that would be at the Board's discretion. I do imagine the charge that we see now will be for the 2014 incentive plan. I can't remember the exact number, but we'll get back to you on that, the exact numbers. And then obviously going forward in 2015 and beyond, it will be at the Board's discretion for what stock they issue.

Okay. And are we done with the acquisition and IPO costs, or will there be some follow-through in the first quarter?

There should be no follow-through. All of that should be in 2013, and we'll start to get rid of some of that noise and get some of the normal expense operating run rate in 2014. So nothing in 2014.

Sure. Okay. And on the very few Company-owned brokerage offices that you have, any update on those? Any refranchising possibilities that you have from that line? Thank you.

For right now, those are -- the Company-owned brokerages are there. They're starting to improve in their performance. We're just going to wait and see if there's any opportunities in the future to divest of ourselves of those, but right now it's just stay the course.

Yes. Business as usual.

Okay. Thank you very much.

Sean Kim, RBC Capital Markets.

A few questions. First, in terms of your adjusted EBITDA margin guidance for the full year, at the midpoint, I think it's in likely to maybe a little lower than 2013. I understand there's some public Company costs.

First, can you quantify what the public company costs, and theoretically I think you should get a little more operating leverage. So do you think there's a bit of conservatism in your guidance? I was just wondering why margins are not going up more.

Good question. The public company costs, we baked in the full-year cost of being a public company now in terms of personnel, and professional fees, and things like that. That's probably around $4 million total. So it's an increase of -- over 2013, because we had part year of those expenses in 2013, probably $3 million to $3.5 million additional cost.

But part of the reason for the guidance on that is, we are settling into being a public company. And we think that we've always said the high 40% range we wanted to give the range of 47% to 50%. We'll have to see. I don't think there's a whole lot of additional other expenses, I think those margins are going to hold pretty steady and we might as revenue picks up, be sure to hit those numbers.

There was a little uptick in personnel expenses that we previously hadn't talked about. We added a few new people, some franchise salespeople. We'll add revenue producing people all day long, and some travel expenses getting out in the -- our regional services people out in the field.

So there was a little uptick there, which impacted the margins and ability to tip over the 49% range. But we think that those margins will hold steady, and there may be a little bit of improvement. We'll see, we're very cost conscious and want to keep our costs under control.

So hopefully, we'll be able to improve on that a touch. But right now, we're pretty committed to the 47% to 49% range.

That's helpful. And for your agent count guidance, can you talk about the difference between the regions US, Canada and other? Because the economics are different, so I think it will be helpful to know if there's any differences in trends by region.

Sean, for the most part, a lot of the growth is in the United States. Canada, for the most part, we project pretty flat, as far as agent growth goes. We're already over 17% of the Canadian Real Estate Association, so we don't see that growing a whole lot more. So quite a bit of it in the US, and then modest in the International regions.

Okay. And your revenue growth guidance, does that imply any sort of impact from FX?

We've taken that into account. We've readjusted our numbers, given that there's been a little bit more flux in the Canadian dollar. So we've taken that into account. And if the Canadian dollar exchange rate stays the way it is to the US dollar, we feel comfortable hitting those revenues numbers. So it has been baked into the revenue projections, yes.

Okay. Great. Thank you very much.

(Operator Instructions)

Brandon Dobell, William Blair.

Maybe if you could discuss a little bit about how the slow start to the year for volumes has impacted your conversations from a recruiting point of view? And touching on both what you're hearing from your franchise partners as well as the Company-owned efforts here in the US. And maybe as part of that, as a slow start to the year, has it changed the way that some of the franchise operations are thinking about the fee structures and things like that relative to what you've seen in past years?

So the slow start for the year actually it isn't bothering us too much. What we're seeing is some seasonality. We're also seeing a strong impact of the harsh weather we've had.

It's impacted both existing home sales and new home starts, kind of difficult to get a house out of the ground when it's got a lot of snow out there. And so what we anticipate seeing is that really this pent up demand carried over from the harsh weather in the early parts of the year, we hope to see that correct itself in the months going forward and we'll catch up.

We're also going into the spring buying time, which is always normally much more robust than it is during the winter months and during the holidays. So we are continuing to grow our agent count, as you can see. We grew more than the National Association of Realtors did in 2013, and we anticipate that continuing.

Would any of your internal metrics give us a better feel for the momentum? It sounds like you're relatively confident in the usual spring selling season returning. But maybe from a listings, a traffic, some of the internal metrics that you guys track, is that the source of your confidence around the return to spring selling season momentum, or is there something else that we should be paying attention to as well?

We really look at everything. We go to the National Association of Realtors, we look at CoreLogic, we look at Fannie and Freddie, and we pull all the information together. We get anecdotal information from our franchisees and our agents out in the field, and what they're seeing is it's been seasonally slow.

But we also have to look at it, it isn't just a national market. Everything is on a very local level, and some markets are incredibly hot, other ones are a bit slow.

For instance, you look at New York, Maryland, Colorado, and in those markets, the median home price actually now matches or exceeds the pre-recession highs. Florida, Arizona, and Nevada are still 20% below those levels. So depending on where prices are, there are some very hot markets, and other markets are stabilizing.

And, Brandon, one thing -- this is Dave, one thing I would add and it's just based upon the fact that the Q4 or the Q1 outlook that Margaret gave, you can see there's some optimism there. And based on just how we're tracking so far in the year, it allowed us to have more optimism.

We would not have given that type of outlook last year or the year before just because of the way the economy is going and everything. So just the way that everything seems to be tracking right now gives us a little bit more optimism than we've had in years past.

Okay. Then final one for me, as you think about maybe some technology initiatives this year for the network, is there anything big or outsized that we should think about, or a major directional change in terms of how you use technology to drive either the brand, more traffic towards the websites, or how you expect to give your agents some more help on productivity from a tech perspective this year? Thanks.

I think one of the things we just started a new ad campaign, Dream With Your Eyes Open, and all of those end with it has Remax.com or it really does drive traffic out to our websites. But the important thing that we look at is getting leads into our agents' hands. We've had 13.6 million leads since 2006 that we've given to our agents referral fee free.

And so our advertising and so much of what we do is to drive traffic to our various websites, again to get leads out into our agents' hands. As far as technology, we did do our updated new mobile app.

And the fact is, technology changes, and we are staying on top of that and continue to improve and enhance as much as we possibly can the tools for our agents. So much of search now is going on on mobile, and we watch that and continue to improve our mobile applications.

Okay. Thanks a lot. Appreciate it.

Thank you, operator, and thanks for everyone for joining us on our call today. We'll talk you again next quarter.

Your conference is now concluded. Thank you for attending today's presentation. You may now disconnect.