Newmark Group, Inc. (NASDAQ:NMRK) Q3 2018 Earnings Conference Call Transcript

Oct 25, 2018 • 11:00 am ET

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Newmark Group, Inc. (NASDAQ:NMRK) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning. My name is Stephanie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Newmark Third Quarter 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks there will be a question and answer session. (Operator Instructions).

Thank you. I'll now turn the call over to Jason McGruder, Head of Investor Relations. Sir, you may now begin.

Executive
Jason McGruder

Thank you, Operator. Good morning. We issued our third quarter 2018 financial results press release and a presentation summarizing these results this morning. You can find these documents at ir.ngkf.com.

Unless otherwise stated, the results provided on today's call compare only the third quarter of 2018 with the year earlier period. We'll be referring to results today only on an adjusted earnings basis, unless otherwise stated. We may also refer to adjusted EBITDA. Please see today's press release results on the Generally Accepted Accounting Principles or GAAP.

Please see the sections in the (inaudible) press release for the complete definitions of any such non-GAAP terms, reconciliations of these items to corresponding GAAP results, and how, when, and why the management uses them.

(Forward-looking Cautionary Statements). I'm happy to turn the call over to our host, Howard Lutnick, Chairman of Newmark Group, Inc.

Executive
Howard Lutnick

Thank you, Jason. Good morning and thank you for joining us for Newmark's third quarter 2018 conference call. With me today are Newmark's CEO, Barry Gosin; our COO, Jim Ficarro; and our CFO, Mike Rispoli.

Newmark had another excellent quarter, generating approximately 30% growth in revenues, adjusted EBITDA and post-tax adjusted earnings. Our quarterly pre-tax earnings and post-tax earnings per share would have been approximately $6 million higher or $0.02 a share respectively after the decline of Nasdaq stock price since August. Because we established the downside redemption value related to these expected earnouts for 2019 through 2022, while retaining all the potential upsides, our cash position will only be the same or better with respect to Nasdaq over the next four years.

I'm pleased to report that the company's Board of Directors declared a dividend through the third quarter of $0.09 per common share, we expect our dividend to remain consistent for each of the four fiscal quarters of 2018. In addition, we recently received our credit ratings and continue to make progress towards the plant spin-off with BGC intended to complete by the end of 2018, Mike will provide more details a little later on in the call.

So with that, I will turn it over to Barry.

Executive
Barry Gosin

Thank you, Howard. Good morning. The company had a great quarter producing strong topline growth across leasing, investment sales, mortgage brokerage, multifamily agency origination, servicing, valuation and advisory, management services and global corporate services.

Over 90% of Newmark's revenue growth for the quarter and year-to-date was organic and market share gains in the quarter were fuelled by a 14% improvement in revenue per producer and a 13% increase in the number