NEW YORK, Aug. 3, 2017 /PRNewswire/ -- Silvercrest
Asset Management Group Inc. (NASDAQ: SAMG) (the "Company" or
"Silvercrest") today reported the results of its operations for the
quarter ended June 30, 2017.
Business Update
Silvercrest added to its history of organic growth by obtaining
$180 million in newly committed
client assets from both institutional investors and families during
the second quarter of 2017. We are extraordinarily proud of
Silvercrest's history of strong organic growth at a time when many
asset management firms, and active managers in particular, have
struggled to attract and maintain assets under management. The
second quarter represents the firm's 16th straight
quarter of positive or breakeven asset flows -- 13 have been
positive -- since Silvercrest's initial public offering in
2013.
Our organic growth combined with investment performance
increased Silvercrest's discretionary assets under management by
$370 million during the second
quarter, to reach a total of $14.7
billion as of June 30, 2017,
representing a year-over-year increase in discretionary assets of
17% and a new high in discretionary assets at the firm.
Silvercrest's total assets under management as of June 30, 2017 increased to $19.9 billion.
We ascribe our success to our team-oriented, entrepreneurial
culture which has continued to deliver excellent returns and
superior client service. Silvercrest's equity strategies continue
their long history of good performance against their relative
benchmarks and asset management peers. We maintain our optimism
about growing our high-quality institutional relationships,
especially as we introduce new capabilities to the market.
We have achieved our growth while maintaining or increasing our
Adjusted EBITDA margins while investing in the business. We have
made investments in Silvercrest's next generation of talent and
have funded new growth initiatives. Silvercrest also has made
technological investments to better serve and attract our family
wealth clients.
Finally, Silvercrest continues to evaluate selective and prudent
acquisitions to complement our organic growth, capabilities and
professional talent. We believe our growth, culture, and market
visibility and position make Silvercrest a highly desirable firm
for the right partners.
All of us at Silvercrest are proud of the firm we have built and
continue to improve on behalf of our clients and shareholders.
On August 1, 2017, the Company's
Board of Directors declared a quarterly dividend of $0.12 per share of Class A common
stock. The dividend will be paid on or about
September 22, 2017 to shareholders of
record as of the close of business on September 15, 2017.
Second Quarter 2017 Highlights
- Total Assets Under Management ("AUM") of $19.9 billion, inclusive of discretionary AUM of
$14.7 billion and non-discretionary
AUM of $5.2 billion at June 30, 2017.
- Revenue of $22.1 million.
- U.S. Generally Accepted Accounting Principles ("GAAP")
consolidated net income and net income attributable to Silvercrest
of $3.5 million and $1.9 million, respectively.
- Basic and diluted net income per share of $0.23.
- Adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization ("Adjusted EBITDA")1 of $6.8 million
- Adjusted net income1 of $3.2
million.
- Adjusted basic and diluted earnings per share1 of
$0.24 and $0.23, respectively.
The table below presents a comparison of certain GAAP and
non-GAAP ("adjusted") financial measures and AUM.
|
|
For the Three Months
Ended June 30,
|
|
|
For the Six Months
Ended June 30,
|
(in thousands
except as indicated)
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Revenue
|
|
$
|
22,091
|
|
|
$
|
19,337
|
|
|
$
|
44,042
|
|
|
$
|
38,600
|
|
Income before other
income (expense), net
|
|
$
|
5,154
|
|
|
$
|
3,505
|
|
|
$
|
9,901
|
|
|
$
|
7,129
|
|
Net income
|
|
$
|
3,600
|
|
|
$
|
2,106
|
|
|
$
|
6,900
|
|
|
$
|
4,602
|
|
Net income
margin
|
|
|
16.3
|
%
|
|
|
10.9
|
%
|
|
|
15.7
|
%
|
|
|
11.9
|
%
|
Net income
attributable to Silvercrest
|
|
$
|
1,858
|
|
|
$
|
926
|
|
|
$
|
3,545
|
|
|
$
|
2,233
|
|
Net income per basic
and diluted share
|
|
$
|
0.23
|
|
|
$
|
0.12
|
|
|
$
|
0.44
|
|
|
$
|
0.28
|
|
Adjusted
EBITDA1
|
|
$
|
6,773
|
|
|
$
|
5,416
|
|
|
$
|
13,266
|
|
|
$
|
10,671
|
|
Adjusted EBITDA
margin1
|
|
|
30.7
|
%
|
|
|
28.0
|
%
|
|
|
30.1
|
%
|
|
|
27.6
|
%
|
Adjusted net
income1
|
|
$
|
3,158
|
|
|
$
|
2,334
|
|
|
$
|
6,155
|
|
|
$
|
4,596
|
|
Adjusted basic
earnings per share1, 2
|
|
$
|
0.24
|
|
|
$
|
0.18
|
|
|
$
|
0.47
|
|
|
$
|
0.36
|
|
Adjusted diluted
earnings per share1, 2
|
|
$
|
0.23
|
|
|
$
|
0.17
|
|
|
$
|
0.45
|
|
|
$
|
0.34
|
|
Assets under
management at period end (billions)
|
|
$
|
19.9
|
|
|
$
|
17.2
|
|
|
$
|
19.9
|
|
|
$
|
17.2
|
|
Average assets under
management (billions)3
|
|
$
|
19.6
|
|
|
$
|
17.1
|
|
|
$
|
19.3
|
|
|
$
|
17.7
|
|
Discretionary assets
under management (billions)
|
|
$
|
14.7
|
|
|
$
|
12.6
|
|
|
$
|
14.7
|
|
|
$
|
12.6
|
|
_____________________
|
1
|
Adjusted measures are
non-GAAP measures and are explained and reconciled to the
comparable GAAP
measures in Exhibits 2 and 3.
|
2
|
Adjusted basic and
diluted earnings per share measures for the three and six months
ended June 30, 2017 are based on the number of shares of Class A
common stock and Class B common stock outstanding as of June 30,
2017. Adjusted diluted earnings per share are further based
on the addition of unvested restricted stock units to the extent
dilutive at the end of the reporting period.
|
3
|
We have computed
average AUM by averaging AUM at the beginning of the applicable
period and AUM at the end of the applicable period.
|
AUM at $19.9 billion
Silvercrest's discretionary assets under management increased by
$2.1 billion, or 16.7%, to
$14.7 billion at June 30, 2017 from $12.6
billion at June 30,
2016. Silvercrest's total AUM increased by $2.7 billion, or 15.7%, to $19.9 billion at June 30,
2017 from $17.2 billion at
June 30, 2016. The increase in
total AUM was attributable to net client inflows of $0.8 billion and market appreciation of
$1.9 billion.
Silvercrest's discretionary assets under management increased by
$0.4 billion, or 2.8%, to
$14.7 billion at June 30, 2017 from $14.3
billion at March 31,
2017. Silvercrest's total AUM increased by $0.6 billion, or 3.1%, to $19.9 billion at June 30,
2017 from $19.3 billion at
March 31, 2017. The increase in
total AUM was attributable to market appreciation of $0.4 billion and net client inflows of
$0.2 billion.
Our total assets under management exclude approximately
$15.7 billion of non-discretionary
assets of a public treasurers' office for which we became advisor
in connection with the acquisition of Jamison, Eaton & Wood,
Inc. (the "Jamison acquisition"), which closed on June 30, 2015. Silvercrest provides
advisory services to this office with a fee cap of $825 thousand per annum. We exclude these assets
because they are related to a unique client relationship for which
the fee cap is significantly disproportionate to the related assets
under management. This fee arrangement is not indicative of our
average fee rate.
Second Quarter 2017 vs. Second Quarter 2016
Revenue increased by $2.8 million,
or 14.2%, to $22.1 million for the
three months ended June 30, 2017,
from $19.3 million for the three
months ended June 30, 2016. This
increase was driven by growth in our management and advisory fees
as a result of increased assets under management.
Total expenses increased by $1.1
million, or 7.0%, to $16.9
million for the three months ended June 30, 2017 from $15.8
million for the three months ended June 30, 2016. Compensation and benefits expense
increased by $1.2 million, or 10.6%,
to $13.0 million for the three months
ended June 30, 2017 from $11.8 million for the three months ended
June 30, 2016. The increase was
primarily attributable to an increase in the accrual for bonuses of
$1.1 million and an increase in
salaries expense of $0.1 million
primarily as a result of merit-based increases. General and
administrative expenses decreased by $0.1
million, or 3.5%, to $3.9
million for the three months ended June 30, 2017 from $4.0
million for the three months ended June 30, 2016. The decrease was primarily
attributable to a decrease in investment research costs of
$0.2 million mainly due to a
reduction in accrued soft dollar-related research costs, a decrease
in sub-advisory and referral fees of $0.1
million due to a decrease in sub-advisory revenue and a
decrease in business taxes of $0.1
million, partially offset by an increase in telephone
expense of $0.1 million, an increase
in marketing costs of $0.1 million
and an increase in occupancy and related costs of $0.1 million.
Consolidated net income was $3.6
million. Net income attributable to Silvercrest was
$1.9 million, or $0.23 per basic and diluted share for the three
months ended June 30, 2017. Our
Adjusted Net Income1 was $3.2
million, or $0.24 per adjusted
basic share and $0.23 per adjusted
diluted share1, 2 for the three months ended
June 30, 2017.
Adjusted EBITDA1 was $6.8
million or 30.7% of revenue for the three months ended
June 30, 2017 as compared to
$5.4 million or 28.0% of revenue for
the same period in the prior year.
Six Months Ended June 30, 2017
vs. Six Months Ended June 30,
2016
Revenue increased by $5.4 million,
or 14.1%, to $44.0 million for the
six months ended June 30, 2017, from
$38.6 million for the six months
ended June 30, 2016. This increase
was driven by growth in our management and advisory fees as a
result of increased assets under management.
Total expenses increased by $2.7
million, or 8.5%, to $34.1
million for the six months ended June
30, 2017 from $31.5 million
for the six months ended June 30,
2016. Compensation and benefits expense increased by
$2.9 million, or 12.4%, to
$26.1 million for the six months
ended June 30, 2017 from $23.2 million for the six months ended
June 30, 2016. The increase was
primarily attributable to an increase in the accrual for bonuses of
$2.4 million and an increase in
salaries expense of $0.5 million
primarily as a result of merit-based increases. General and
administrative expenses decreased by $0.2
million, or 2.6%, to $8.0
million for the six months ended June
30, 2017 from $8.2 million for
the six months ended June 30, 2016.
The decrease was primarily attributable to a decrease in investment
research costs of $0.3 million mainly
due to a reduction in accrued soft dollar-related research costs, a
decrease in sub-advisory and referral fees of $0.2 million due to a decrease in sub-advisory
revenue and a decrease in client reimbursements of $0.1 million, partially offset by an increase in
professional fees of $0.2 million
mainly due to an enhanced documentation project related to our
operations group, an increase in marketing costs of $0.1 million and an increase in occupancy and
related costs of $0.1 million.
Consolidated net income was $6.9
million. Net income attributable to Silvercrest was
$3.5 million, or $0.44 per basic and diluted share for the six
months ended June 30, 2017. Our
Adjusted Net Income1 was $6.2
million, or $0.47 per adjusted
basic share and $0.45 per adjusted
diluted share1, 2 for the six months ended June 30, 2017.
Adjusted EBITDA1 was $13.3
million or 30.1% of revenue for the six months ended
June 30, 2017 as compared to
$10.7 million or 27.6% of revenue for
the same period in the prior year.
Liquidity and Capital Resources
Cash and cash equivalents were approximately $30.0 million at June 30, 2017,
compared to $37.5 million at December 31, 2016.
Silvercrest L.P. had notes payable of $1.7
million at June 30, 2017 and $2.5 million at
December 31, 2016. As of June 30,
2017, no amount had been drawn down on our term loan and
there was nothing outstanding on our revolving credit facility with
City National Bank.
Total stockholders' equity was $49.0
million at June 30, 2017. We
had 8,107,101 shares of Class A common stock outstanding
and 4,852,711 shares of Class B common stock outstanding
at June 30, 2017.
Non-GAAP Financial Measures
To provide investors with additional insight, promote
transparency and allow for a more comprehensive understanding of
the information used by management in its financial and operational
decision-making, we supplement our consolidated financial
statements presented on a basis consistent with GAAP with Adjusted
EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted
Earnings Per Share which are non-GAAP financial measures of
earnings. These adjustments, and the non-GAAP financial
measures that are derived from them, provide supplemental
information to analyze our operations between periods and over
time. Investors should consider our non-GAAP financial measures in
addition to, and not as a substitute for, financial measures
prepared in accordance with GAAP.
- EBITDA represents net income before provision for income taxes,
interest income, interest expense, depreciation and
amortization.
- We define Adjusted EBITDA as EBITDA without giving effect to
the Delaware franchise tax,
professional fees associated with acquisitions or financing
transactions, gains on extinguishment of debt or other obligations
related to acquisitions, impairment charges and losses on disposals
or abandonment of assets and leaseholds, client reimbursements and
fund redemption costs, severance and other similar expenses, but
including partner incentive allocations, prior to our initial
public offering, as an expense. We feel that it is important to
management and investors to supplement our consolidated financial
statements presented on a GAAP basis with Adjusted EBITDA, a
non-GAAP financial measure of earnings, as this measure provides a
perspective of recurring earnings of the Company, taking into
account earnings attributable to both Class A and Class B
shareholders.
- Adjusted EBITDA Margin is calculated by dividing Adjusted
EBITDA by total revenue. We feel that it is important to management
and investors to supplement our consolidated financial statements
presented on a GAAP basis with Adjusted EBITDA Margin, a non-GAAP
financial measure of earnings, as this measure provides a
perspective of recurring profitability of the Company, taking into
account profitability attributable to both Class A and Class B
shareholders.
- Adjusted Net Income represents recurring net income without
giving effect to professional fees associated with acquisitions or
financing transactions, losses on forgiveness of notes receivable
from our principals, gains on extinguishment of debt or other
obligations related to acquisitions, impairment charges and losses
on disposals or abandonment of assets and leaseholds, client
reimbursements and fund redemption costs, severance and other
similar expenses, but including partner incentive allocations,
prior to our initial public offering, as an expense. Furthermore,
Adjusted Net Income includes income tax expense assuming a blended
corporate rate of 40%. We feel that it is important to management
and investors to supplement our consolidated financial statements
presented on a GAAP basis with Adjusted Net Income, a non-GAAP
financial measure of earnings, as this measure provides a
perspective of recurring income of the Company, taking into account
income attributable to both Class A and Class B shareholders.
- Adjusted Earnings Per Share represents Adjusted Net Income
divided by the actual Class A and Class B shares outstanding as of
the end of the reporting period for basic Adjusted Earnings Per
Share, and to the extent dilutive, we add unvested deferred equity
units, restricted stock units and performance units to the total
shares outstanding to compute diluted Adjusted Earnings Per Share.
As a result of our structure, which includes a non-controlling
interest, we feel that it is important to management and investors
to supplement our consolidated financial statements presented on a
GAAP basis with Adjusted Earnings Per Share, a non-GAAP financial
measure of earnings, as this measure provides a perspective of
recurring earnings per share of the Company as a whole as opposed
to being limited to our Class A common stock.
Conference Call
The Company will host a conference call on August 4, 2017,
at 8:30 am (Eastern Time) to discuss
these results. Hosting the call will be Richard R. Hough III, Chief Executive Officer
and President and Scott A. Gerard,
Chief Financial Officer. Listeners may access the call by dialing
1-866-394-9665 or for international listeners the call may be
accessed by dialing 1-253-237-1128. An archived replay of the
call will be available after the completion of the live call on the
Investor Relations page of the Silvercrest website at
http://ir.silvercrestgroup.com/.
Forward-Looking Statements and Other Disclosures
This report contains, and from time to time our management may
make, forward-looking statements within the meaning of the safe
harbor provisions of the U.S. Private Securities Litigation Reform
Act of 1995. In some cases, you can identify these statements by
forward-looking words such as "may", "might", "will", "should",
"expects", "intends", "plans", "anticipates", "believes",
"estimates", "predicts", "potential" or "continue", the negative of
these terms and other comparable terminology. These forward-looking
statements, which are subject to risks, uncertainties and
assumptions, may include projections of our future financial
performance, future expenses, anticipated growth strategies,
descriptions of new business initiatives and anticipated trends in
our business or financial results. These statements are only
predictions based on our current expectations and projections about
future events. Important factors that could cause actual results,
level of activity, performance or achievements to differ materially
from those indicated by such forward-looking statements include but
are not limited to: incurrence of net losses, fluctuations in
quarterly and annual results, adverse economic or market
conditions, our expectations with respect to future levels of
assets under management, inflows and outflows, our ability to
retain clients from whom we derive a substantial portion of our
assets under management, our ability to maintain our fee structure,
our particular choices with regard to investment strategies
employed, our ability to hire and retain qualified investment
professionals, the cost of complying with current and future
regulation, coupled with the cost of defending ourselves from
related investigations or litigation, failure of our operational
safeguards against breaches in data security, privacy, conflicts of
interest or employee misconduct, our expected tax rate, and our
expectations with respect to deferred tax assets, adverse
economic or market conditions, incurrence of net losses, adverse
effects of management focusing on implementation of a growth
strategy, failure to develop and maintain the Silvercrest brand and
other factors disclosed under "Risk Factors" in our annual report
on Form 10-K for the year ended December 31,
2016 which is accessible on the SEC's website at
www.sec.gov. We undertake no obligation to publicly update or
review any forward-looking statement, whether as a result of new
information, future developments or otherwise, except as required
by law.
About Silvercrest
Silvercrest was founded in April
2002 as an independent, employee-owned registered investment
adviser. With offices in New York,
Boston, Virginia and New Jersey, Silvercrest provides traditional
and alternative investment advisory and family office services to
wealthy families and select institutional investors.
Exhibit
1
|
Silvercrest Asset
Management Group Inc.
Condensed
Consolidated Statements of Operations
(Unaudited and in
thousands, except share and per share amounts or as
noted)
|
|
|
|
|
Three months ended June
30,
|
|
|
Six months ended June
30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management and
advisory fees
|
|
$
|
21,107
|
|
|
$
|
18,403
|
|
|
$
|
42,126
|
|
|
$
|
36,737
|
|
Performance fees and
allocations
|
|
|
10
|
|
|
|
—
|
|
|
|
10
|
|
|
|
—
|
|
Family office
services
|
|
|
974
|
|
|
|
934
|
|
|
|
1,906
|
|
|
|
1,863
|
|
Total
revenue
|
|
|
22,091
|
|
|
|
19,337
|
|
|
|
44,042
|
|
|
|
38,600
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
|
13,030
|
|
|
|
11,782
|
|
|
|
26,110
|
|
|
|
23,224
|
|
General and
administrative
|
|
|
3,907
|
|
|
|
4,050
|
|
|
|
8,031
|
|
|
|
8,247
|
|
Total
expenses
|
|
|
16,937
|
|
|
|
15,832
|
|
|
|
34,141
|
|
|
|
31,471
|
|
Income before
other (expense) income, net
|
|
|
5,154
|
|
|
|
3,505
|
|
|
|
9,901
|
|
|
|
7,129
|
|
Other (expense)
income, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income,
net
|
|
|
8
|
|
|
|
108
|
|
|
|
16
|
|
|
|
116
|
|
Interest
income
|
|
|
11
|
|
|
|
15
|
|
|
|
22
|
|
|
|
32
|
|
Interest
expense
|
|
|
(34)
|
|
|
|
(62)
|
|
|
|
(68)
|
|
|
|
(127)
|
|
Total other
(expense) income, net
|
|
|
(15)
|
|
|
|
61
|
|
|
|
(30)
|
|
|
|
21
|
|
Income before
provision for income taxes
|
|
|
5,139
|
|
|
|
3,566
|
|
|
|
9,871
|
|
|
|
7,150
|
|
Provision for income
taxes
|
|
|
1,539
|
|
|
|
1,460
|
|
|
|
2,971
|
|
|
|
2,548
|
|
Net income
|
|
|
3,600
|
|
|
|
2,106
|
|
|
|
6,900
|
|
|
|
4,602
|
|
Less: net income
attributable to non-controlling interests
|
|
|
(1,742)
|
|
|
|
(1,180)
|
|
|
|
(3,355)
|
|
|
|
(2,369)
|
|
Net income
attributable to Silvercrest
|
|
$
|
1,858
|
|
|
$
|
926
|
|
|
$
|
3,545
|
|
|
$
|
2,233
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.23
|
|
|
$
|
0.12
|
|
|
$
|
0.44
|
|
|
$
|
0.28
|
|
Diluted
|
|
$
|
0.23
|
|
|
$
|
0.12
|
|
|
$
|
0.44
|
|
|
$
|
0.28
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
8,104,697
|
|
|
|
8,027,825
|
|
|
|
8,091,742
|
|
|
|
8,011,773
|
|
Diluted
|
|
|
8,111,930
|
|
|
|
8,034,686
|
|
|
|
8,100,640
|
|
|
|
8,015,203
|
|
Exhibit
2
|
Silvercrest Asset
Management Group Inc.
Reconciliation of
GAAP to non-GAAP ("Adjusted") Adjusted EBITDA Measure
(Unaudited and in
thousands, except share and per share amounts or as
noted)
|
|
|
Adjusted
EBITDA
|
|
Three Months Ended June
30,
|
|
|
Six
Months Ended June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Reconciliation of
non-GAAP financial measure:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
3,600
|
|
|
$
|
2,106
|
|
|
$
|
6,900
|
|
|
$
|
4,602
|
|
Provision for income
taxes
|
|
|
1,539
|
|
|
|
1,460
|
|
|
|
2,971
|
|
|
|
2,548
|
|
Delaware Franchise
Tax
|
|
|
45
|
|
|
|
45
|
|
|
|
90
|
|
|
|
90
|
|
Interest
expense
|
|
|
34
|
|
|
|
62
|
|
|
|
68
|
|
|
|
127
|
|
Interest
income
|
|
|
(11)
|
|
|
|
(15)
|
|
|
|
(22)
|
|
|
|
(32)
|
|
Depreciation and
amortization
|
|
|
682
|
|
|
|
676
|
|
|
|
1,347
|
|
|
|
1,341
|
|
Equity-based
compensation
|
|
|
805
|
|
|
|
803
|
|
|
|
1,615
|
|
|
|
1,575
|
|
Other adjustments
(A)
|
|
|
79
|
|
|
|
279
|
|
|
|
297
|
|
|
|
420
|
|
Adjusted
EBITDA
|
|
$
|
6,773
|
|
|
$
|
5,416
|
|
|
$
|
13,266
|
|
|
$
|
10,671
|
|
Adjusted EBITDA
Margin
|
|
|
30.7
|
%
|
|
|
28.0
|
%
|
|
|
30.1
|
%
|
|
|
27.6
|
%
|
(A) Other adjustments
consist of the following:
|
|
Three Months Ended June
30,
|
|
Six Months Ended
June 30,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition costs
(a)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
22
|
|
Non-acquisition
expansion costs (b)
|
|
|
(26)
|
|
|
79
|
|
|
51
|
|
|
157
|
|
Severance
|
|
|
—
|
|
|
6
|
|
|
123
|
|
|
6
|
|
Other (c)
|
|
|
105
|
|
|
194
|
|
|
123
|
|
|
235
|
|
Total other
adjustments
|
|
$
|
79
|
|
$
|
279
|
|
$
|
297
|
|
$
|
420
|
|
|
|
(a)
|
For the six months
ended June 30, 2016, reflects the $12 of legal fees associated with
the Cappiccille Acquisition
and $10 of professional fees related to the Jamison
Acquisition.
|
(b)
|
For the three months
ended June 30, 2017 and 2016, represents accrued earnout of ($26)
and $79, respectively, related to our Richmond, VA office
expansion. For the six months ended June 30, 2017 and 2016,
represents accrued earnout of $51 and $157, respectively, related
to our Richmond, VA office
expansion.
|
(c)
|
For the three and six
months ended June 30, 2017, represents a sign-on bonus paid to an
employee of $105 and professional fees of $0 and $18, respectively,
related to a mock audit in advance of the requirements of Section
404 of the Sarbanes-Oxley Act as it relates to emerging growth
companies. For the three and six months ended June 30, 2016,
represents costs associated with the upgrade of our telephone
system of $25 and $44, respectively, costs related to the
implementation of software of $8 and $13, respectively, a sign on
bonus of $261 paid to a new employee and professional fees of $0
and $17, respectively, related to a mock compliance audit,
partially offset by a true up adjustment of $100 to our tax
receivable agreement. The adjustment in fair value is the result in
a reduction in future effective corporate tax rate in New York City
as a result of a law change. The reduction in the future effective
corporate tax rate will result in less tax benefits being
recognized by the Company from future amortization reducing its
liability pursuant to the tax receivable
agreement.
|
Exhibit
3
|
Silvercrest Asset
Management Group Inc.
Reconciliation of GAAP to non-GAAP ("Adjusted")
Adjusted Net Income and Adjusted Earnings Per Share Measures
(Unaudited and in thousands, except per share amounts or as
noted)
|
|
|
Adjusted Net
Income and Adjusted Earnings Per
Share
|
|
Three Months Ended June
30,
|
|
|
Six
Months Ended June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
non-GAAP financial measure:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
3,600
|
|
|
$
|
2,106
|
|
|
$
|
6,900
|
|
|
$
|
4,602
|
|
GAAP Provision for
income taxes
|
|
|
1,539
|
|
|
|
1,460
|
|
|
|
2,971
|
|
|
|
2,548
|
|
Delaware Franchise
Tax
|
|
|
45
|
|
|
|
45
|
|
|
|
90
|
|
|
|
90
|
|
Other adjustments (See
A in Exhibit 2)
|
|
|
79
|
|
|
|
279
|
|
|
|
297
|
|
|
|
420
|
|
Adjusted earnings
before provision for income taxes
|
|
|
5,263
|
|
|
|
3,890
|
|
|
|
10,258
|
|
|
|
7,660
|
|
Adjusted provision for
income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted provision for
income taxes (40% assumed tax rate)
|
|
|
(2,105)
|
|
|
|
(1,556)
|
|
|
|
(4,103)
|
|
|
|
(3,064)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
|
$
|
3,158
|
|
|
$
|
2,334
|
|
|
$
|
6,155
|
|
|
$
|
4,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income per
share (B):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
0.23
|
|
|
$
|
0.12
|
|
|
$
|
0.44
|
|
|
$
|
0.28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings
per share/unit (B):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.24
|
|
|
$
|
0.18
|
|
|
$
|
0.47
|
|
|
$
|
0.36
|
|
Diluted
|
|
$
|
0.23
|
|
|
$
|
0.17
|
|
|
$
|
0.45
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares/units
outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Class A shares
outstanding
|
|
|
8,107
|
|
|
|
8,028
|
|
|
|
8,107
|
|
|
|
8,028
|
|
Basic Class B
shares/units outstanding
|
|
|
4,853
|
|
|
|
4,671
|
|
|
|
4,853
|
|
|
|
4,671
|
|
Total basic
shares/units outstanding
|
|
|
12,960
|
|
|
|
12,699
|
|
|
|
12,960
|
|
|
|
12,699
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Class A shares
outstanding (C)
|
|
|
8,113
|
|
|
|
8,038
|
|
|
|
8,113
|
|
|
|
8,038
|
|
Diluted Class B
shares/units outstanding (D)
|
|
|
5,580
|
|
|
|
5,641
|
|
|
|
5,580
|
|
|
|
5,641
|
|
Total diluted
shares/units outstanding
|
|
|
13,693
|
|
|
|
13,679
|
|
|
|
13,693
|
|
|
|
13,679
|
|
|
|
(B)
|
GAAP earnings per
share is strictly attributable to Class A shareholders.
Adjusted earnings per share takes into account
earnings attributable to both Class A and Class B
shareholders.
|
(C)
|
Includes 5,687 and
10,582 unvested restricted stock units at June 30, 2017 and 2016,
respectively.
|
(D)
|
Includes 727,725 and
970,301 unvested restricted stock units at June 30, 2017 and 2016,
respectively.
|
Exhibit
4
|
Silvercrest Asset
Management Group Inc.
Condensed
Consolidated Statements of
Financial
Condition
(in
thousands)
|
|
|
|
June 30,
2017
|
|
|
December 31,
2016
|
|
Assets
|
|
(Unaudited)
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
30,015
|
|
|
$
|
37,517
|
|
Investments
|
|
13
|
|
|
|
335
|
|
Receivables,
net
|
|
5,465
|
|
|
|
6,270
|
|
Due from Silvercrest
Funds
|
|
3,054
|
|
|
|
2,876
|
|
Furniture, equipment
and leasehold improvements, net
|
|
2,585
|
|
|
|
2,411
|
|
Goodwill
|
|
25,168
|
|
|
|
25,168
|
|
Intangible assets,
net
|
|
12,491
|
|
|
|
13,404
|
|
Deferred tax asset –
tax receivable agreement
|
|
19,463
|
|
|
|
20,221
|
|
Prepaid expenses and
other assets
|
|
3,352
|
|
|
|
4,079
|
|
Total
assets
|
$
|
101,606
|
|
|
$
|
112,281
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
$
|
2,923
|
|
|
$
|
4,485
|
|
Accrued
compensation
|
|
13,232
|
|
|
|
23,797
|
|
Notes
payable
|
|
1,654
|
|
|
|
2,486
|
|
Deferred
rent
|
|
242
|
|
|
|
436
|
|
Deferred tax and
other liabilities
|
|
15,170
|
|
|
|
14,993
|
|
Total
liabilities
|
|
33,221
|
|
|
|
46,197
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
Preferred Stock, par
value $0.01,
|
|
|
|
|
|
|
|
10,000,000 shares
authorized; none issued and outstanding
|
|
—
|
|
|
|
—
|
|
Class A Common Stock,
par value $0.01,
|
|
|
|
|
|
|
|
50,000,000 shares
authorized; 8,107,101 and 8,074,197 issued and outstanding as of
June 30, 2017 and December 31, 2016, respectively
|
|
81
|
|
|
|
81
|
|
Class B Common Stock,
par value $0.01,
|
|
|
|
|
|
|
|
25,000,000 shares
authorized; 4,852,711 and 4,866,303 issued and outstanding as of
June 30, 2017 and December 31, 2016, respectively
|
|
48
|
|
|
|
48
|
|
Additional Paid-In
Capital
|
|
41,428
|
|
|
|
41,260
|
|
Retained
earnings
|
|
7,519
|
|
|
|
5,916
|
|
Total Silvercrest
Asset Management Group Inc.'s equity
|
|
49,076
|
|
|
|
47,305
|
|
Non-controlling
interests
|
|
19,309
|
|
|
|
18,779
|
|
Total
equity
|
|
68,385
|
|
|
|
66,084
|
|
Total liabilities
and equity
|
$
|
101,606
|
|
|
$
|
112,281
|
|
Exhibit
5
|
Silvercrest Asset
Management Group Inc.
Total Assets Under
Management
(Unaudited and in
billions)
|
|
Total Assets Under
Management:
|
|
Three Months
Ended
June 30,
|
|
|
% Change
From
June 30,
|
|
|
2017
|
|
|
2016
|
|
|
2016
|
|
Beginning assets
under management
|
$
|
19.3
|
|
|
$
|
17.0
|
|
|
|
13.5
|
%
|
Gross client
inflows
|
|
1.8
|
|
|
|
1.2
|
|
|
|
50.0
|
%
|
Gross client
outflows
|
|
(1.6)
|
|
|
|
(1.2)
|
|
|
|
33.3
|
%
|
Market
appreciation
|
|
0.4
|
|
|
|
0.2
|
|
|
|
100.0
|
%
|
Ending assets
under management
|
$
|
19.9
|
|
|
$
|
17.2
|
|
|
|
15.7
|
%
|
|
|
Six Months
Ended
June 30,
|
|
|
% Change
From
June 30,
|
|
|
2017
|
|
|
2016
|
|
|
2016
|
|
Beginning assets
under management
|
$
|
18.6
|
|
|
$
|
18.1
|
|
|
|
2.8
|
%
|
Gross client
inflows
|
|
3.5
|
|
|
|
2.2
|
|
|
|
59.1
|
%
|
Gross client
outflows
|
|
(3.1)
|
|
|
|
(3.1)
|
|
|
|
0.0
|
%
|
Market appreciation
(depreciation)
|
|
0.9
|
|
|
|
─
|
|
|
|
NM
|
%
|
Ending assets
under management
|
$
|
19.9
|
|
|
$
|
17.2
|
|
|
|
15.7
|
%
|
Exhibit
6
|
Silvercrest Asset
Management Group Inc.
Discretionary Assets
Under Management
(Unaudited and in
billions)
|
|
Discretionary
Assets Under Management:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
|
% Change
From
June 30,
|
|
|
2017
|
|
|
2016
|
|
|
2016
|
|
Beginning assets
under management
|
$
|
14.3
|
|
|
$
|
12.2
|
|
|
|
17.2
|
%
|
Gross client
inflows
|
|
1.7
|
|
|
|
1.2
|
|
|
|
41.7
|
%
|
Gross client
outflows
|
|
(1.5)
|
|
|
|
(1.1)
|
|
|
|
36.4
|
%
|
Market
appreciation
|
|
0.2
|
|
|
|
0.3
|
|
|
|
(33.3)
|
%
|
Ending assets
under management
|
$
|
14.7
|
|
|
$
|
12.6
|
|
|
|
16.7
|
%
|
|
|
|
Six Months
Ended
June 30,
|
|
|
% Change
From
June 30,
|
|
|
2017
|
|
|
2016
|
|
|
2016
|
|
Beginning assets
under management
|
$
|
13.8
|
|
|
$
|
12.1
|
|
|
|
14.1
|
%
|
Gross client
inflows
|
|
3.3
|
|
|
|
2.1
|
|
|
|
57.1
|
%
|
Gross client
outflows
|
|
(2.9)
|
|
|
|
(2.1)
|
|
|
|
38.1
|
%
|
Market
appreciation
|
|
0.5
|
|
|
|
0.5
|
|
|
|
0.0
|
%
|
Ending assets
under management
|
$
|
14.7
|
|
|
$
|
12.6
|
|
|
|
16.7
|
%
|
Exhibit
7
|
Silvercrest Asset
Management Group Inc.
Non-Discretionary
Assets Under Management
(Unaudited and in
billions)
|
|
Non-Discretionary
Assets Under Management:
|
|
|
Three Months
Ended June 30,
|
|
|
% Change
From
June 30,
|
|
|
2017
|
|
|
2016
|
|
|
2016
|
|
Beginning assets
under management
|
$
|
5.0
|
|
|
$
|
4.8
|
|
|
|
4.2
|
%
|
Gross client
inflows
|
|
0.1
|
|
|
|
─
|
|
|
|
NM
|
%
|
Gross client
outflows
|
|
(0.1)
|
|
|
|
(0.1)
|
|
|
|
0.0
|
%
|
Market appreciation
(depreciation)
|
|
0.2
|
|
|
|
(0.1)
|
|
|
|
(300.0)
|
%
|
Ending assets
under management
|
$
|
5.2
|
|
|
$
|
4.6
|
|
|
|
13.0
|
%
|
|
|
|
Six Months
Ended June 30,
|
|
|
% Change
From
June 30,
|
|
|
2017
|
|
|
2016
|
|
|
2016
|
|
Beginning assets
under management
|
$
|
4.8
|
|
|
$
|
6.0
|
|
|
|
(20.0)
|
%
|
Gross client
inflows
|
|
0.2
|
|
|
|
0.1
|
|
|
|
100.0
|
%
|
Gross client
outflows
|
|
(0.2)
|
|
|
|
(1.0)
|
|
|
|
(80.0)
|
%
|
Market appreciation
(depreciation)
|
|
0.4
|
|
|
|
(0.5)
|
|
|
|
(180.0)
|
%
|
Ending assets
under management
|
$
|
5.2
|
|
|
$
|
4.6
|
|
|
|
13.0
|
%
|
Exhibit
8
|
Silvercrest Asset
Management Group Inc.
Assets Under
Management
(Unaudited and in
billions)
|
|
|
|
Three Months
Ended
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
Total AUM as of
March 31,
|
$
|
19.345
|
|
|
$
|
17.017
|
|
|
Discretionary
AUM:
|
|
|
|
|
|
|
|
|
Total Discretionary
AUM as of March 31,
|
|
14.339
|
|
|
|
12.180
|
|
|
New client
accounts/assets (1)
|
|
0.111
|
|
|
|
0.242
|
|
|
Closed accounts
(2)
|
|
(0.019)
|
|
|
|
(0.086)
|
|
|
Net cash
inflow/(outflow) (3)
|
|
0.070
|
|
|
|
(0.075)
|
|
|
Non-discretionary to
discretionary AUM (4)
|
|
─
|
|
|
|
0.001
|
|
|
Market
appreciation
|
|
0.209
|
|
|
|
0.298
|
|
|
Change to
Discretionary AUM
|
|
0.370
|
|
|
|
0.380
|
|
|
Total Discretionary
AUM as of June 30,
|
|
14.709
|
|
|
|
12.560
|
|
|
Change to
Non-Discretionary AUM (5)
|
|
0.169
|
|
|
|
(0.204)
|
|
|
Total AUM as of
June 30,
|
$
|
19.884
|
|
|
$
|
17.193
|
|
|
|
|
|
Six Months
Ended
June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
Total AUM as of
January 1,
|
$
|
18.602
|
|
|
$
|
18.147
|
|
|
Discretionary
AUM:
|
|
|
|
|
|
|
|
|
Total Discretionary
AUM as of January 1,
|
|
13.801
|
|
|
|
12.077
|
|
|
New client
accounts/assets (1)
|
|
0.192
|
|
|
|
0.337
|
|
|
Closed accounts
(2)
|
|
(0.021)
|
|
|
|
(0.134)
|
|
|
Net cash
inflow/(outflow) (3)
|
|
0.218
|
|
|
|
(0.184)
|
|
|
Non-discretionary to
discretionary AUM (4)
|
|
0.001
|
|
|
|
0.001
|
|
|
Market
appreciation
|
|
0.518
|
|
|
|
0.462
|
|
|
Change to
Discretionary AUM
|
|
0.908
|
|
|
|
0.482
|
|
|
Total Discretionary
AUM as of June 30,
|
|
14.709
|
|
|
|
12.560
|
|
|
Change to
Non-Discretionary AUM (5)
|
|
0.375
|
|
|
|
(1.436)
|
|
|
Total AUM as of
June 30,
|
$
|
19.884
|
|
|
$
|
17.193
|
|
|
|
|
|
|
(1)
|
Represents new
account flows from both new and existing client
relationships
|
(2)
|
Represents closed
accounts of existing client relationships and those that
terminated
|
(3)
|
Represents periodic
cash flows related to existing accounts
|
(4)
|
Represents client
assets that converted to Discretionary AUM from Non-Discretionary
AUM
|
(5)
|
Represents the net
change to Non-Discretionary AUM
|
Exhibit
9
|
Silvercrest Asset
Management Group Inc.
Equity Investment
Strategy Composite Performance1, 2
As of June 30,
2017
(Unaudited)
|
|
|
PROPRIETARY EQUITY
PERFORMANCE
|
|
ANNUALIZED
PERFORMANCE
|
as of June 30,
2017
|
|
INCEPTION
|
|
1-YEAR
|
|
3-YEAR
|
|
5-YEAR
|
|
7-YEAR
|
|
INCEPTION
|
Large Cap Value
Composite
|
|
4/1/02
|
|
16.3
|
|
9.1
|
|
15.0
|
|
14.6
|
|
8.6
|
Russell 1000 Value
Index
|
|
|
|
15.5
|
|
7.4
|
|
13.9
|
|
14.3
|
|
7.3
|
Small Cap Value
Composite
|
|
4/1/02
|
|
25.6
|
|
9.8
|
|
15.4
|
|
16.5
|
|
11.5
|
Russell 2000 Value
Index
|
|
|
|
24.9
|
|
7.0
|
|
13.4
|
|
13.5
|
|
8.4
|
Smid Cap Value
Composite
|
|
10/1/05
|
|
25.4
|
|
10.2
|
|
16.1
|
|
16.1
|
|
10.5
|
Russell 2500 Value
Index
|
|
|
|
18.4
|
|
6.2
|
|
13.7
|
|
14.1
|
|
7.8
|
Multi Cap Value
Composite
|
|
7/1/02
|
|
18.4
|
|
9.4
|
|
15.4
|
|
15.6
|
|
9.7
|
Russell 3000 Value
Index
|
|
|
|
16.2
|
|
7.3
|
|
13.9
|
|
14.2
|
|
8.1
|
Equity Income
Composite
|
|
12/1/03
|
|
15.0
|
|
9.8
|
|
15.4
|
|
16.3
|
|
11.9
|
Russell 3000 Value
Index
|
|
|
|
16.2
|
|
7.3
|
|
13.9
|
|
14.2
|
|
8.3
|
Focused Value
Composite
|
|
9/1/04
|
|
18.3
|
|
10.1
|
|
15.7
|
|
15.3
|
|
11.1
|
Russell 3000 Value
Index
|
|
|
|
16.2
|
|
7.3
|
|
13.9
|
|
14.2
|
|
8.0
|
|
|
1
|
Returns are based
upon a time weighted rate of return of various fully discretionary
equity portfolios with similar investment objectives, strategies
and policies and other relevant criteria managed by Silvercrest
Asset Management Group LLC ("SAMG LLC"), a subsidiary of
Silvercrest. Performance results are gross of fees and net of
commission charges. An investor's actual return will be reduced by
the advisory fees and any other expenses it may incur in the
management of the investment advisory account. SAMG LLC's standard
advisory fees are described in Part 2 of its Form ADV. Actual fees
and expenses will vary depending on a variety of factors, including
the size of a particular account. Returns greater than one year are
shown as annualized compounded returns and include gains and
accrued income and reinvestment of distributions. Past performance
is no guarantee of future results. This piece contains no
recommendations to buy or sell securities or a solicitation of an
offer to buy or sell securities or investment services or adopt any
investment position. This piece is not intended to constitute
investment advice and is based upon conditions in place during the
period noted. Market and economic views are subject to change
without notice and may be untimely when presented here. Readers are
advised not to infer or assume that any securities, sectors or
markets described were or will be profitable. SAMG LLC is an
independent investment advisory and financial services firm created
to meet the investment and administrative needs of individuals with
substantial assets and select institutional investors. SAMG LLC
claims compliance with the Global Investment Performance Standards
(GIPS®).
|
|
|
2
|
The market indices
used to compare to the performance of Silvercrest's strategies are
as follows:
|
|
|
|
The Russell 1000
Index is a capitalization-weighted, unmanaged index that measures
the 1000 smallest companies in the Russell 3000. The Russell 1000
Value Index is a capitalization-weighted, unmanaged index that
includes those Russell 1000 Index companies with lower
price-to-book ratios and lower expected growth values.
|
|
|
|
The Russell 2000
Index is a capitalization-weighted, unmanaged index that measures
the 2000 smallest companies in the Russell 3000. The Russell 2000
Value Index is a capitalization-weighted, unmanaged index that
includes those Russell 2000 Index companies with lower
price-to-book ratios and lower expected growth values.
|
|
|
|
The Russell 2500
Index is a capitalization-weighted, unmanaged index that measures
the 2500 smallest companies in the Russell 3000. The Russell 2500
Value Index is a capitalization-weighted, unmanaged index that
includes those Russell 2000 Index companies with lower
price-to-book ratios and lower expected growth values.
|
|
|
|
The Russell 3000
Value Index is a capitalization-weighted, unmanaged index that
measures those Russell 3000 Index companies with lower
price-to-book ratios and lower forecasted growth.
|
View original
content:http://www.prnewswire.com/news-releases/silvercrest-asset-management-group-inc-reports-q2-2017-results-300499433.html
SOURCE Silvercrest Asset Management Group Inc.