rmr-20231231

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 December 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-37616

THE RMR GROUP INC.

(Exact Name of Registrant as Specified in Its Charter)


Maryland			47-4122583
(State of Organization)			(IRS Employer Identification No.)

Two Newton Place, 255 Washington Street, Suite 300, Newton, MA 02458-1634

(Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone Number, Including Area Code 617-796-8230

Securities registered pursuant to Section 12(b) of the Act:

Title Of Each Class

Trading Symbol

Name Of Each Exchange On Which Registered

Class A common stock, $0.001 par value per share

RMR

The Nasdaq Stock Market LLC

(Nasdaq Capital Market)

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. Yes ☒ 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ 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 in Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of February 5, 2024, there were 15,708,723 shares of Class A common stock, par value $0.001 per share, 1,000,000 shares of Class B-1 common stock, par value $0.001 per share, and 15,000,000 shares of Class B-2 common stock, par value $0.001 per share outstanding.

Table of Contents

THE RMR GROUP INC.

FORM 10-Q

December 31, 2023

Table of Contents


		Page
PART I.	Financial Information

Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Balance Sheets — December 31, 2023 and September 30, 2023	3

	Condensed Consolidated Statements of Income — Three Months Ended December 31, 2023 and 2022	4

	Condensed Consolidated Statements of Shareholders’ Equity — Three Months Ended December 31, 2023 and 2022	5

	Condensed Consolidated Statements of Cash Flows — Three Months Ended December 31, 2023 and 2022	6

	Notes to Unaudited Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29

Item 4.	Controls and Procedures	30

	Warning Concerning Forward-Looking Statements	30

PART II.	Other Information

Item 1A.	Risk Factors	31

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31

Item 6.	Exhibits	32

	Signatures	33

Table of Contents

PART I. Financial Information

Item 1. Financial Statements

The RMR Group Inc.

Condensed Consolidated Balance Sheets

(dollars in thousands, except per share amounts)

(unaudited)


	December 31,		September 30,
	2023		2023
Assets

Cash and cash equivalents	$	202,428	$	267,989
Due from related parties	114,006		111,323
Prepaid and other current assets	9,271		6,997
Total current assets	325,705		386,309



Property and equipment, net of accumulated depreciation of $3,112 and $3,212, respectively	14,728		5,446
Due from related parties, net of current portion	8,987		7,261


Equity method investments	22,102		18,651

Goodwill	71,620		1,859
Intangible assets, net of accumulated amortization of $1,113 and $983, respectively	21,356		167

Operating lease right of use assets	30,464		29,032
Deferred tax asset	17,356		18,220
Other assets, net of accumulated amortization of $80,678 and $78,324, respectively	113,125		115,479
Total assets	$	625,443	$	582,424

Liabilities and Equity

Reimbursable accounts payable and accrued expenses	$	77,709	$	77,924



Accounts payable and accrued expenses	42,494		22,578
Operating lease liabilities	5,875		5,068
Total current liabilities	126,078		105,570


Operating lease liabilities, net of current portion	25,580		25,044
Amounts due pursuant to tax receivable agreement, net of current portion	20,886		20,886


Other liabilities	23,534		7,261
Mortgage note payable	4,730		—
Total liabilities	200,808		158,761

Commitments and contingencies

Equity:
Class A common stock, $0.001 par value; 31,950,000 shares authorized; 15,710,555 and 15,712,007 shares issued and outstanding, respectively	16		16
Class B-1 common stock, $0.001 par value; 1,000,000 shares authorized, issued and outstanding	1		1
Class B-2 common stock, $0.001 par value; 15,000,000 shares authorized, issued and outstanding	15		15
Additional paid in capital	116,598		116,010
Retained earnings	420,093		413,096

Cumulative common distributions	(295,756)		(289,072)
Total shareholders’ equity	240,967		240,066
Noncontrolling interest in The RMR Group LLC	183,226		183,597
Noncontrolling interest in consolidated entity	442		—
Total noncontrolling interests	183,668		183,597
Total equity	424,635		423,663
Total liabilities and equity	$	625,443	$	582,424

See accompanying notes.

Table of Contents

The RMR Group Inc.

Condensed Consolidated Statements of Income

(amounts in thousands, except per share amounts)

(unaudited)


	Three Months Ended
	December 31,
	2023		2022
Revenues:
Management services	$	45,094	$	48,548

Incentive fees	299		—
Advisory services	1,125		1,091
Total management, incentive and advisory services revenues	46,518		49,639
Reimbursable compensation and benefits	16,828		14,323
Reimbursable equity based compensation	2,327		2,289
Other reimbursable expenses	195,998

SEC Form 10-Q filed by The RMR Group Inc.