doug-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For The Quarterly Period Ended March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

DOUGLAS ELLIMAN INC.

(Exact name of registrant as specified in its charter)


Delaware	1-41054	87-2176850
(State or other jurisdiction of incorporation	Commission File Number	(I.R.S. Employer Identification No.)
incorporation or organization)

4400 Biscayne Boulevard

Miami, Florida 33137

305-579-8000

(Address, including zip code and telephone number, including area code,

of the principal executive offices)

Securities Registered Pursuant to 12(b) of the Act:


Title of each class:	Trading	Name of each exchange
	Symbol(s)	on which registered:
Common stock, par value $0.01 per share	DOUG	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes o No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

☐

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes x No

At May 3, 2024, Douglas Elliman Inc. had 91,419,787 shares of common stock outstanding.

DOUGLAS ELLIMAN INC.

FORM 10-Q

TABLE OF CONTENTS


			Page
PART I. FINANCIAL INFORMATION

Item 1. Douglas Elliman Inc. Condensed Consolidated Financial Statements (Unaudited):

Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023			2

Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023			3



Condensed Consolidated Statements of Stockholders' Equity for the three months ended March 31, 2024 and 2023			4

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023			5

Notes to Condensed Consolidated Financial Statements			6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			23

Item 3. Quantitative and Qualitative Disclosures About Market Risk			32

Item 4. Controls and Procedures			32

PART II. OTHER INFORMATION

Item 1. Legal Proceedings			33

Item 1A. Risk Factors			33

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			34

Item 5. Other Information			34

Item 6. Exhibits			35

SIGNATURE			36

DOUGLAS ELLIMAN INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands, Except Per Share Amounts)

Unaudited


	March 31, 2024		December 31, 2023
ASSETS:
Current assets:
Cash and cash equivalents	$	91,451	$	119,808
Receivables	19,828		21,809
Agent receivables, net	17,003		11,721
Income taxes receivable, net	—		5,292
Restricted cash and cash equivalents	6,079		7,171
Other current assets	20,440		15,474
Total current assets	154,801		181,275
Property, plant and equipment, net	39,752		39,718
Operating lease right-of-use assets	104,572		108,172
Long-term investments (includes $4,158 and $3,983 at fair value)	11,395		12,871
Contract assets, net	36,511		36,040
Goodwill	32,230		32,230
Other intangible assets, net	72,797		72,964
Deferred income taxes, net	—		977
Equity-method investments	1,950		1,960
Other assets	7,093		7,212
Total assets	$	461,101	$	493,419
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:

Current portion of litigation settlement	$	7,750	$	—
Current operating lease liability	20,618		22,235
Income taxes payable, net	164		—
Accounts payable	5,438		6,136
Commissions payable	17,935		24,561
Accrued salaries and benefits	2,271		12,912
Contract liabilities	14,081		11,234
Other current liabilities	24,247		20,171
Total current liabilities	92,504		97,249


Non-current operating lease liabilities	108,196		110,705
Contract liabilities	54,458		51,178
Litigation settlement	10,000		—
Other liabilities	119		133
Total liabilities	265,277		259,265
Commitments and contingencies (Note 7)
Stockholders' equity:
Preferred stock, par value $0.01 per share, 10,000,000 shares authorized	—		—
Common stock, par value $0.01 per share, 250,000,000 shares authorized, 91,535,412 and 87,925,412 shares issued and outstanding	915		879
Additional paid-in capital	283,223		279,904
Accumulated deficit	(89,027)		(47,552)
Total Douglas Elliman Inc. stockholders' equity	195,111		233,231
Non-controlling interest	713		923
Total stockholders' equity	195,824		234,154
Total liabilities and stockholders' equity	$	461,101	$	493,419

The accompanying notes are an integral part of the condensed consolidated financial statements.

DOUGLAS ELLIMAN INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in Thousands, Except Per Share Amounts)

Unaudited


	Three Months Ended
	March 31,
		2024		2023
Revenues:
Commissions and other brokerage income		$	188,265	$	202,036
Property management		9,047		8,777
Other ancillary services		2,927		3,169
Total revenues		200,239		213,982

Expenses:
Real estate agent commissions		149,016		156,102
Sales and marketing		21,298		21,239
Operations and support		18,799		18,893
General and administrative		27,016		32,295
Technology		5,843		6,012
Depreciation and amortization		1,981		2,039
Litigation settlement		17,750		—
Restructuring		—		1,210
Operating loss		(41,464)		(23,808)

Other income (expenses):
Interest income, net		1,376		1,105
Equity in losses from equity-method investments		(11)		(73)
Investment and other losses		(391)		(454)
Loss before provision for income taxes		(40,490)		(23,230)
Income tax expense (benefit)		1,195		(5,390)

Net loss		(41,685)		(17,840)

Net loss attributed to non-controlling interest		210		216

Net loss attributed to Douglas Elliman Inc.		$	(41,475)	$	(17,624)

Per basic common share:

Net loss applicable to common shares attributed to Douglas Elliman Inc.		$	(0.50)	$	(0.22)

Per diluted common share:

Net loss applicable to common shares attributed to Douglas Elliman Inc.		$	(0.50)	$	(0.22)

The accompanying notes are an integral part of the condensed consolidated financial statements.

DOUGLAS ELLIMAN INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Dollars in Thousands, Except Share Amounts)

Unaudited


	Douglas Elliman Inc. Stockholders' Equity
				Additional Paid-In				Non- controlling
	Common Stock					Accumulated
	Shares	Amount		Capital		Deficit		Interest		Total
Balance as of January 1, 2024	87,925,412	$	879	$	279,904	$	(47,552)	$	923	$	234,154
Net loss	—	—		—		(41,475)		(210)		(41,685)

Restricted stock grants	3,610,000	36		(36)		—		—		—


Stock-based compensation	—	—		3,355		—		—		3,355


Balance as of March 31, 2024	91,535,412	$	915	$	283,223	$	(89,027)	$	713	$	195,824


	Douglas Elliman Inc. Stockholders' Equity
				Additional Paid-In				Non- controlling
	Common Stock					Accumulated
	Shares	Amount		Capital		Deficit		Interest		Total
Balance as of January 1, 2023	80,881,022	$	809	$	273,111	$	(5,000)	$	1,537	$	270,457
Net loss	—	—		—		(17,624)		(216)		(17,840)
Dividends on common stock ($0.05 per share)	—	—		(4,221)		—		—		(4,221)
Restricted stock grants	3,535,000	35		(35)		—		—		—

Effect of stock dividend	4,220,801	42		(42)		—		—		—
Stock-based compensation	—	—		2,823		—		—		2,823

Balance as of March 31, 2023	88,636,823	$	886	$	271,636	$	(22,624)	$	1,321	$	251,219

The accompanying notes are an integral part of the condensed consolidated financial statements.

DOUGLAS ELLIMAN INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

Unaudited


	Three Months Ended
	March 31,
	2024		2023
Cash flows from operating activities:
Net loss	$	(41,685)	$	(17,840)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,981		2,039
Non-cash stock-based compensation expense	3,355		2,823
Loss on sale of assets	70		—
Deferred income taxes	977		(5,390)
Net losses on investment securities	391		454
Equity in losses from equity-method investments	11		73

Non-cash lease expense	5,907		5,400

Provision for credit losses	1,304		1,428
Changes in assets and liabilities:
Receivables	(4,605)		(10,361)
Income taxes receivables, net	5,456		(100)
Accounts payable and accrued liabilities	(3,248)		13,257
Operating right-of-use assets and operating lease liabilities, net	(6,433)		(5,568)
Accrued salary and benefits	(10,641)		(14,857)
Litigation settlement	17,750		—
Other	2,119		(2,933)
Net cash used in operating activities	(27,291)		(31,575)
Cash flows from investing activities:


Purchase of debt securities	—		(25)
Proceeds from sale or liquidation of long-term investments	8		—
Purchase of equity securities	—		(275)
Purchase of long-term investments	(85)		(55)
Capital expenditures	(2,081)		(3,627)
Net cash used in investing activities	(2,158)		(3,982)
Cash flows from financing activities:

Dividends on common stock	—		(4,221)



Net cash used in financing activities	—		(4,221)
Net decrease in cash, cash equivalents and restricted cash	(29,449)		(39,778)
Cash, cash equivalents and restricted cash, beginning of period	129,517		171,382
Cash, cash equivalents and restricted cash, end of period	$	100,068	$	131,604

The accompanying notes are an integral part of the condensed consolidated financial statements.

DOUGLAS ELLIMAN INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Thousands, Except Per Share Amounts)

Unaudited

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)Basis of Presentation:

Douglas Elliman Inc. (“Douglas Elliman” or the “Company”) is engaged in the real estate services and property technology investment business and is seeking to acquire or invest in additional real estate services and property technology, or PropTech, companies. The condensed consolidated financial statements of Douglas Elliman include the accounts of DER Holdings LLC and New Valley Ventures LLC (“New Valley Ventures”), directly and indirectly wholly owned subsidiaries of the Company. DER Holdings LLC owns Douglas Elliman Realty, LLC and Douglas Elliman of California, Inc., which are engaged in the residential real estate brokerage business with their subsidiaries. The operations of New Valley Ventures consist of minority investments in innovative and cutting-edge PropTech companies.

Certain references to “Douglas Elliman Realty” refer to the Company’s residential real estate brokerage business, including the operations of Douglas Elliman Realty, LLC and Douglas Elliman of California Inc., unless otherwise specified.

The unaudited, interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and, in management’s opinion, contain all adjustments, consisting only of normal recurring items, necessary for a fair statement of the results for the periods presented. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. References to U.S. GAAP issued by the Financial Accounting Standards Board (“FASB”) are to the FASB Accounting Standards Codification, also referred to as the “Codification” or “ASC.” These condensed consolidated financial statements should be read in conjunction with the combined consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission (“SEC”). The condensed consolidated results of operations for interim periods should not be regarded as necessarily indicative of the results that may be expected for the entire year.

In presenting the condensed consolidated financial statements, management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ from those estimates.

(b) Principles of Consolidation:

The condensed consolidated financial statements include the assets, liabilities, revenues, expenses and cash flows of DER Holdings LLC and New Valley Ventures as well as all other entities in which Douglas Elliman has a controlling financial interest. All intercompany balances and transactions have been eliminated in the condensed consolidated financial statements.

When evaluating an entity for consolidation, Douglas Elliman first determines whether an entity is within the scope of the guidance for consolidation of variable interest entities (“VIE”) and if it is deemed to be a VIE. If the entity is considered to be a VIE, Douglas Elliman determines whether it would be considered the entity’s primary beneficiary. Douglas Elliman consolidates those VIEs for which it has determined that it is the primary beneficiary. Douglas Elliman will consolidate an entity that is not deemed a VIE upon a determination that it has a controlling financial interest. For entities where Douglas Elliman does not have a controlling financial interest, the investments in such entities are classified as available-for-sale securities or accounted for using the equity or cost method, as appropriate.

DOUGLAS ELLIMAN INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Dollars in Thousands, Except Per Share Amounts)

Unaudited

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. Significant estimates subject to material changes in the near term include impairment charges and valuation of intangible assets. Actual results could differ from those estimates.

(d) Loss Per Share (“EPS”):

The Company has restricted stock awards which will provide dividends at the same rate as paid on the common stock with respect to the shares underlying the restricted stock awards. These outstanding restricted stock awards represent participating securities under authoritative guidance. The participating securities holders do not participate in the Company’s net losses. There were no outstanding non-participating securities during the three months ended March 31, 2024 and 2023, respectively. The Company paid a cash dividend during each of the quarters beginning with the quarter ended March 31, 2022 through March 31, 2023.

Information concerning the Company’s common stock has been adjusted to give retroactive effect to the 5% stock dividend distributed to Company stockholders on June 30, 2023. All per-share amounts and references to share amounts have been updated to reflect the retrospective effect of the stock dividend.


	Three Months Ended
	March 31,
		2024		2023
Net loss attributed to Douglas Elliman Inc.		$	(41,475)	$	(17,624)
Income attributable to participating securities		—		(307)
Net loss available to common stockholders attributed to Douglas Elliman Inc.		$	(41,475)	$	(17,931)

Basic EPS is computed by dividing net loss available to common stockholders attributed to Douglas Elliman Inc. by the weighted-average number of shares outstanding, which will include vested restricted stock.

Basic and diluted EPS were calculated using the following shares of common stock for the periods presented below:


	Three Months Ended
	March 31,
		2024	2023
Weighted-average shares for basic EPS		83,334,101	82,193,761
Incremental shares related to non-vested restricted stock		—	—
Weighted-average shares for diluted EPS		83,334,101	82,193,761

(e) Reconciliation of Cash, Cash Equivalents and Restricted Cash:

Restricted cash amounts included in current assets and other assets represent cash and cash equivalents required to be deposited into escrow for amounts required for letters of credit related to office leases, and certain deposit requirements for banking arrangements. The restrictions related to the letters of credit will remain in place for the duration of the respective lease. The restrictions related to the banking arrangements will remain in place for the duration of the arrangement.

DOUGLAS ELLIMAN INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Dollars in Thousands, Except Per Share Amounts)

Unaudited

The components of “Cash, cash equivalents and restricted cash” in the condensed consolidated statements of cash flows were as follows:


	March 31, 2024		December 31, 2023
Cash and cash equivalents	$	91,451	$	119,808
Restricted cash and cash equivalents included in current assets	6,079

SEC Form 10-Q filed by Douglas Elliman Inc.