Medley Management Inc. (NYSE:MDLY) today reported its financial
results for its second quarter ended June 30, 2017.
Highlights
- Fee earning assets under management increased to $3.3 billion
as of June 30, 2017
- Total assets under management were $5.4 billion as of June 30,
2017
- U.S. GAAP net income attributable to Medley Management Inc. was
$0.06 per share for Q2 2017
- Core Net Income Per Share was $0.10 for Q2 2017
- Declared $0.20 per share dividend for Q2 2017 payable on
September 6, 2017
“At Medley, we continue to expand our
alternative asset management platform by increasing our product
offerings, hiring seasoned professionals and investing capital
across our different investment disciplines. During the quarter we
increased Fee Earning AUM to $3.3B and have additional dry-powder
to deploy in the quarters ahead,” said Brook Taube, CEO of
Medley.
Results of Operations for the Three
Months Ended June 30, 2017
Total revenues were $16.4 million for the three
months ended June 30, 2017 compared to $21.3 million for the same
period in 2016. The decrease was due primarily to a decrease in
Part I incentive fees from our permanent capital vehicles as well
as a decrease in performance fees from our separately managed
accounts, partly offset by an increase in other revenue and
fees.
Total expenses from operations were $8.5 million
for the three months ended June 30, 2017 compared to $17.5 million
for the same period in 2016. The decrease was due primarily to a
decrease in expenses associated with our expense support agreement
with Sierra Income Corporation ("SIC"), a reduction in compensation
and benefits expense as well as lower general, administrative and
other expenses.
Total other expense, net was $2.0 million for
the three months ended June 30, 2017 compared to $2.7 million for
the same period in 2016. The decrease was due primarily to a
decrease in expense associated with our revenue share payable and
an increase in dividend income, partly offset by an increase in
interest expense.
Net income attributable to Medley Management
Inc. and non-controlling interests in Medley LLC was $4.2 million
for the three months ended June 30, 2017 compared to $0.6 million
for the same period in 2016. Medley Management Inc.’s net income
per share was $0.06 for the three months ended June 30, 2017
compared to a net loss per share of $0.03 for the same period in
2016.
Pre-Tax Core Net Income was $5.2 million for the
three months ended June 30, 2017 compared to $7.4 million for the
same period in 2016. Core Net Income Per Share was $0.10 for the
three months ended June 30, 2017, compared to $0.14 for the same
period in 2016. Core EBITDA was $8.2 million for the three
months ended June 30, 2017 compared to $9.8 million for the same
period in 2016.
Results of Operations for the Six Months
Ended June 30, 2017
Total revenues were $30.4 million for the
six months ended June 30, 2017 compared to $38.9 million for the
same period in 2016. The decrease was due primarily to a decrease
in Part I incentive fees from our permanent capital vehicles and a
reversal of performance fees from our separately managed accounts,
partly offset by an increase in other revenue and fees.
Total expenses from operations were $16.1
million for the six months ended June 30, 2017 compared to $31.3
million for the same period in 2016. The decrease was due primarily
to a reduction in expenses associated with our expense support
agreement with SIC, a reduction in compensation and benefits
expense, a decrease in performance compensation and lower general
and administrative expenses.
Total other expense, net was $3.4 million for
the six months ended June 30, 2017 compared to $5.4 million for the
same period in 2016. The decrease was due primarily to a decrease
in expense associated with our revenue share payable and an
increase in dividend income, partly offset by an increase in
interest expense.
Net income attributable to Medley Management
Inc. and non-controlling interests in Medley LLC was $7.4 million
for the six months ended June 30, 2017 compared to $1.4 million for
the same period in 2016. Medley Management Inc.’s net income per
share was $0.14 for the six months ended June 30, 2017 compared to
a net loss per share of $0.04 for the same period in 2016.
Pre-Tax Core Net Income was $10.4 million for
the six months ended June 30, 2017 compared to $14.2 million for
the same period in 2016. Core Net Income Per Share was $0.19 for
the six months ended June 30, 2017, compared to $0.26 for the same
period in 2016. Core EBITDA was $16.1 million for the six
months ended June 30, 2017 compared $18.8 million for the same
period in 2016.
Investor Relations Contact:Sam AndersonHead of
Capital Markets & Risk ManagementMedley Management
Inc.212-759-0777
Media Contact:Erin ClarkTeneo
Strategy646-214-8355
Key Performance Indicators:
|
|
For the Three Months Ended June 30,
(unaudited) |
|
For the Six Months Ended June 30,
(unaudited) |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
(Amounts in thousands, except AUM, share and per share
amounts) |
Consolidated
Financial Data: |
|
|
|
|
|
|
|
|
Pre-Tax
Income |
|
$ |
5,923 |
|
|
$ |
1,104 |
|
|
$ |
10,986 |
|
|
$ |
2,252 |
|
Net
income attributable to Medley Management Inc. and non-controlling
interests in Medley LLC |
|
4,191 |
|
|
597 |
|
|
7,353 |
|
|
1,370 |
|
Net
income (loss) per Class A common stock |
|
$ |
0.06 |
|
|
$ |
(0.03 |
) |
|
$ |
0.14 |
|
|
$ |
(0.04 |
) |
Net
Income Margin (1) |
|
25.5 |
% |
|
2.8 |
% |
|
24.1 |
% |
|
3.5 |
% |
Weighted
average shares - Basic and Diluted |
|
5,588,978 |
|
|
5,777,726 |
|
|
5,697,483 |
|
|
5,814,428 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Data: |
|
|
|
|
|
|
|
|
Pre-Tax
Core Net Income (2) |
|
$ |
5,228 |
|
|
$ |
7,434 |
|
|
$ |
10,415 |
|
|
$ |
14,195 |
|
Core Net
Income (2) |
|
4,733 |
|
|
6,563 |
|
|
9,321 |
|
|
12,528 |
|
Core
EBITDA (3) |
|
8,226 |
|
|
9,753 |
|
|
16,146 |
|
|
18,820 |
|
Core Net
Income Per Share (4) |
|
$ |
0.10 |
|
|
$ |
0.14 |
|
|
$ |
0.19 |
|
|
$ |
0.26 |
|
Core Net
Income Margin (5) |
|
18.1 |
% |
|
19.9 |
% |
|
19.5 |
% |
|
20.8 |
% |
Pro-Forma
Weighted Average Shares Outstanding (6) |
|
31,028,903 |
|
|
30,771,830 |
|
|
30,997,006 |
|
|
30,587,862 |
|
|
|
|
|
|
|
|
|
|
Other Data (at
period end, in millions): |
|
|
|
|
|
|
|
|
AUM |
|
$ |
5,438 |
|
|
$ |
5,025 |
|
|
$ |
5,438 |
|
|
$ |
5,025 |
|
Fee
Earning AUM |
|
3,279 |
|
|
3,158 |
|
|
3,279 |
|
|
3,158 |
|
(1) Net Income Margin equals Net income
attributable to Medley Management Inc. and non-controlling
interests in Medley LLC divided by total revenue.
(2) Pre-Tax Core Net Income is calculated as
Core Net Income before income taxes. Core Net Income reflects net
income attributable to Medley Management Inc. and net income
attributable to non-controlling interests in Medley LLC adjusted to
exclude reimbursable expenses associated with the launch of funds,
stock-based compensation associated with restricted stock units
that were granted in connection with our IPO, other non-core items
and the income tax expense associated with the foregoing
adjustments. Please refer to the reconciliation of Core Net Income
to Net income attributable to Medley Management Inc. and
non-controlling interests in Medley LLC in Exhibit C for additional
details.
(3) Core EBITDA is calculated as Core Net Income
before interest expense, income taxes, depreciation and
amortization. Please refer to the reconciliation of Core
EBITDA to Net income attributable to Medley Management Inc. and
non-controlling interests in Medley LLC in Exhibit C for additional
details.
(4) Core Net Income Per Share is calculated as
Core Net Income, adjusted for the income tax effect of assuming
that all of our pre-tax earnings were subject to federal, state and
local corporate income taxes, divided by Pro-Forma Weighted Average
Shares Outstanding (as defined below). We assumed an effective
corporate tax rate of 43.0% for all periods presented. Please refer
to the calculation of Core Net Income Per Share in Exhibit D for
additional details.
(5) Core Net Income Margin equals Core Net
Income Per Share divided by total revenue per share.
(6) The calculation of Pro-Forma Weighted
Average Shares Outstanding assumes the vesting of restricted stock
units and conversion by the pre-IPO holders of 23,333,333 LLC Units
for 23,333,333 shares of Class A common stock at the beginning of
each period presented, respectively. Please refer to Exhibit D for
additional details.
Fee Earning AUM
The table below presents the quarter-to-date
roll forward of our total fee earning AUM:
|
|
|
|
|
|
|
|
% of Fee Earning AUM |
|
|
Permanent Capital Vehicles |
|
Long-dated Private Funds and SMAs |
|
Total |
|
Permanent Capital Vehicles |
|
Long-dated Private Funds and SMAs |
|
|
(Dollars in millions) |
|
|
|
|
Ending balance, March
31, 2017 |
|
$ |
2,214 |
|
|
$ |
1,000 |
|
|
$ |
3,214 |
|
|
69 |
% |
|
31 |
% |
Commitments |
|
59 |
|
|
68 |
|
|
127 |
|
|
|
|
|
Capital
reduction |
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
Distributions |
|
(24 |
) |
|
(53 |
) |
|
(77 |
) |
|
|
|
|
Change in
fund value |
|
10 |
|
|
5 |
|
|
15 |
|
|
|
|
|
Ending balance, June
30, 2017 |
|
$ |
2,259 |
|
|
$ |
1,020 |
|
|
$ |
3,279 |
|
|
69 |
% |
|
31 |
% |
Total fee earning AUM increased by $65 million,
or 2% as of June 30, 2017 compared to total fee earning AUM as of
March 31, 2017. The permanent capital vehicles’ share of fee
earning AUM remained at 69% as of June 30, 2017 compared to March
31, 2017.
The table below presents the year-to-date roll
forward of our total fee earning AUM:
|
|
|
|
|
|
|
% of Fee Earning AUM |
|
Permanent Capital Vehicles |
|
Long-dated Private Funds and SMAs |
|
Total |
|
Permanent Capital Vehicles |
|
Long-dated Private Funds and SMAs |
|
(Dollars in millions) |
|
|
|
|
Ending balance,
December 31, 2016 |
$ |
2,207 |
|
|
$ |
983 |
|
|
$ |
3,190 |
|
|
69 |
% |
|
31 |
% |
Commitments |
97 |
|
|
157 |
|
|
254 |
|
|
|
|
|
Capital
reduction |
— |
|
|
— |
|
|
— |
|
|
|
|
|
Distributions |
(51 |
) |
|
(111 |
) |
|
(162 |
) |
|
|
|
|
Change in
fund value |
6 |
|
|
(9 |
) |
|
(3 |
) |
|
|
|
|
Ending balance, June
30, 2017 |
$ |
2,259 |
|
|
$ |
1,020 |
|
|
$ |
3,279 |
|
|
69 |
% |
|
31 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total fee earning AUM increased by $89 million,
or 3% as of June 30, 2017 compared to total fee earning AUM as of
December 31, 2016. The permanent capital vehicles’ share of fee
earning AUM remained at 69% as of June 30, 2017 compared to
December 31, 2016.
Dividend Declaration
On August 8, 2017, the Company’s Board of
Directors declared a quarterly dividend of $0.20 per share of Class
A common stock for the second quarter of 2017. The dividend will be
paid on September 6, 2017 to stockholders of record as of August
23, 2017.
Conference Call and Webcast
Information
We will host an earnings conference call and
audio webcast at 10:00 a.m. (Eastern Time) on Thursday, August 10,
2017 to discuss our second quarter financial results.
All interested parties may participate in the
conference call by dialing (877) 524-5743 approximately 5-10
minutes prior to the call. International callers should dial
(615) 247-0088. Participants should reference Medley
Management Inc. and the conference ID of 51870178 when
prompted. Following the call you may access a replay of the event
via audio webcast. This conference call will be broadcast live over
the Internet and can be accessed by all interested parties through
the Company's website, http://www.mdly.com. To listen to the live
call, please go to the Company's website at least 15 minutes prior
to the start of the call to register and download any necessary
audio software. For those who are not able to listen to the live
broadcast, a replay will be available shortly after the call on the
Company’s website.
About Medley
Medley is an alternative asset management firm
offering yield solutions to retail and institutional investors.
Medley’s national direct origination franchise, with over 85
people, is a premier provider of capital to the middle market in
the U.S. As of June 30, 2017, Medley had over $5
billion of assets under management in two business development
companies, Medley Capital Corporation (NYSE:MCC)
and Sierra Income Corporation, a credit interval fund, Sierra
Total Return Fund (NASDAQ:SRNTX) and several private investment
vehicles. Over the past 15 years, Medley has provided capital to
over 380 companies across 35 industries in North America. For
additional information, please visit Medley Management Inc. at
www.mdly.com.
Medley LLC, the operating company of Medley
Management Inc., has outstanding bonds which trade on the NYSE
under the symbols (NYSE:MDLX) and (NYSE:MDLQ). Medley Capital
Corporation (NYSE:MCC) has outstanding bonds which trade on the
NYSE under the symbols (NYSE:MCV), and (NYSE:MCX).
Forward-Looking Statements
Statements included herein may contain
"forward-looking statements." Statements other than statements of
historical facts included in this press release may constitute
forward-looking statements and are not guarantees of future
performance or results and involve a number of assumptions, risks
and uncertainties, which change over time. Actual results may
differ materially from those anticipated in any forward-looking
statements as a result of a number of factors, including those
described from time to time in filings by the Company with the
Securities and Exchange Commission, including those described in
the section “Risk Factors” in the Company’s Annual Report on Form
10-K for the fiscal year ended December 31, 2016. Except as
required by law, the Company undertakes no duty to update any
forward-looking statement made herein. All forward-looking
statements made herein speak only as of the date of this press
release.
Non-GAAP Financial Measures
We make reference to certain non-GAAP financial
measures in this press release. A reconciliation of these non-GAAP
financial measures to the most directly comparable financial
measures calculated and presented in accordance with U.S. GAAP is
contained in the tables attached hereto.
Non-GAAP measures used by management include
Pre-Tax Core Net Income, Core Net Income, Core EBITDA, Core Net
Income Per Share and Core Net Income Margin. Management believes
that these measures provide analysts, investors and management with
helpful information regarding our underlying operating performance
and our business, as they remove the impact of items management
believes are not reflective of underlying operating performance.
These non-GAAP measures are also used by management for planning
purposes, including the preparation of internal budgets; and for
evaluating the effectiveness of operational strategies.
Additionally, we believe these non-GAAP measures provide another
tool for investors to use in comparing our results with other
companies in our industry, many of whom use similar non-GAAP
measures. There are limitations associated with the use of non-GAAP
financial measures as compared to the use of the most directly
comparable U.S. GAAP financial measure and these measures
supplement and should be considered in addition to and not in lieu
of the results of operations discussed below. Furthermore, such
measures may be inconsistent with measures presented by other
companies.
This press release does not constitute an offer
for any Medley fund.
Available Information
Medley Management Inc.’s filings with the
Securities and Exchange Commission, press releases, earnings
releases and other financial information are available at
www.mdly.com.
Exhibit A. Consolidated Statements of
Operations of Medley Management Inc.
|
For the Three Months Ended June 30,
(unaudited) |
|
For the Six Months Ended June 30,
(unaudited) |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
(Amounts in thousands, except share and per share
data) |
Revenues |
|
|
|
|
|
|
|
Management fees |
$ |
13,201 |
|
|
$ |
18,695 |
|
|
$ |
27,096 |
|
|
$ |
34,958 |
|
Performance fees |
575 |
|
|
851 |
|
|
(1,644 |
) |
|
260 |
|
Other
revenues and fees |
2,668 |
|
|
1,780 |
|
|
4,988 |
|
|
3,679 |
|
Total
revenues |
16,444 |
|
|
21,326 |
|
|
30,440 |
|
|
38,897 |
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
Compensation and benefits |
5,705 |
|
|
8,564 |
|
|
11,499 |
|
|
14,432 |
|
Performance fee compensation |
50 |
|
|
45 |
|
|
(831 |
) |
|
(26 |
) |
General,
administrative and other expenses |
2,754 |
|
|
8,899 |
|
|
5,422 |
|
|
16,878 |
|
Total
expenses |
8,509 |
|
|
17,508 |
|
|
16,090 |
|
|
31,284 |
|
|
|
|
|
|
|
|
|
Other income
(expense) |
|
|
|
|
|
|
|
Dividend
income |
733 |
|
|
221 |
|
|
1,468 |
|
|
443 |
|
Interest
expense |
(2,766 |
) |
|
(2,072 |
) |
|
(6,413 |
) |
|
(4,190 |
) |
Other
income (expenses), net |
21 |
|
|
(863 |
) |
|
1,581 |
|
|
(1,614 |
) |
Total other expense, net |
(2,012 |
) |
|
(2,714 |
) |
|
(3,364 |
) |
|
(5,361 |
) |
Income
before income taxes |
5,923 |
|
|
1,104 |
|
|
10,986 |
|
|
2,252 |
|
Provision
for income taxes |
428 |
|
|
102 |
|
|
841 |
|
|
214 |
|
Net income |
5,495 |
|
|
1,002 |
|
|
10,145 |
|
|
2,038 |
|
Net
income attributable to redeemable non-controlling interests and
non-controlling interests in consolidated subsidiaries |
1,304 |
|
|
405 |
|
|
2,792 |
|
|
668 |
|
Net
income attributable to non-controlling interests in Medley LLC |
3,617 |
|
|
539 |
|
|
6,386 |
|
|
1,218 |
|
Net income attributable to Medley Management
Inc. |
$ |
574 |
|
|
$ |
58 |
|
|
$ |
967 |
|
|
$ |
152 |
|
|
|
|
|
|
|
|
|
Net income (loss) per
share of Class A common stock: |
|
|
|
|
|
|
|
Basic |
$ |
0.06 |
|
|
$ |
(0.03 |
) |
|
$ |
0.14 |
|
|
$ |
(0.04 |
) |
Diluted |
$ |
0.06 |
|
|
$ |
(0.03 |
) |
|
$ |
0.14 |
|
|
$ |
(0.04 |
) |
Weighted average shares
outstanding - Basic and Diluted |
5,588,978 |
|
|
5,777,726 |
|
|
5,697,483 |
|
|
5,814,428 |
|
Exhibit B. Consolidated Statements of Comprehensive
Income
|
For the ThreeMonths Ended June 30,
(unaudited) |
|
For the Six Months Ended June 30,
(unaudited) |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
(Amounts in thousands) |
Net income |
$ |
5,495 |
|
|
$ |
1,002 |
|
|
$ |
10,145 |
|
|
$ |
2,038 |
|
Other comprehensive
income: |
|
|
|
|
|
|
|
Change in
fair value of available-for-sale securities (net of taxes of $0.2
million for Medley Management Inc. for each of the three and six
months ended June 30, 2017 and $0.1 million for Non-controlling
interests in Medley LLC for each of the three and six months ended
June 30, 2017) |
(2,651 |
) |
|
— |
|
|
(2,166 |
) |
|
— |
|
Total comprehensive income |
2,844 |
|
|
1,002 |
|
|
7,979 |
|
|
2,038 |
|
Comprehensive income attributable to redeemable non-controlling
interests and non-controlling interests in consolidated
subsidiaries |
952 |
|
|
405 |
|
|
2,763 |
|
|
668 |
|
Comprehensive income attributable to Medley LLC |
1,646 |
|
|
539 |
|
|
4,545 |
|
|
1,218 |
|
Comprehensive income attributable to Medley Management
Inc. |
$ |
246 |
|
|
$ |
58 |
|
|
$ |
671 |
|
|
$ |
152 |
|
Exhibit C. Reconciliation of Core Net Income and Core
EBITDA to Net income attributable to Medley Management Inc. and
non-controlling interests in Medley LLC
|
For the Three Months Ended June 30,
(unaudited) |
|
For the Six Months Ended June 30,
(unaudited) |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
(Amounts in thousands) |
Net income
attributable to Medley Management Inc. |
$ |
574 |
|
|
$ |
58 |
|
|
$ |
967 |
|
|
$ |
152 |
|
Net
income attributable to non-controlling interests in Medley LLC |
3,617 |
|
|
539 |
|
|
6,386 |
|
|
1,218 |
|
Net income
attributable to Medley Management Inc. and non-controlling
interests in Medley LLC |
$ |
4,191 |
|
|
$ |
597 |
|
|
$ |
7,353 |
|
|
$ |
1,370 |
|
Reimbursable fund startup expenses |
226 |
|
|
5,541 |
|
|
226 |
|
|
10,744 |
|
IPO date
award stock-based compensation |
318 |
|
|
673 |
|
|
(343 |
) |
|
1,346 |
|
Other
non-core items (1) |
65 |
|
|
521 |
|
|
2,338 |
|
|
521 |
|
Income
tax expense on adjustments |
(67 |
) |
|
(769 |
) |
|
(253 |
) |
|
(1,453 |
) |
Core Net
Income |
$ |
4,733 |
|
|
$ |
6,563 |
|
|
$ |
9,321 |
|
|
$ |
12,528 |
|
Interest
expense |
2,766 |
|
|
2,072 |
|
|
5,264 |
|
|
4,190 |
|
Income
taxes |
495 |
|
|
871 |
|
|
1,094 |
|
|
1,667 |
|
Depreciation and amortization |
232 |
|
|
247 |
|
|
467 |
|
|
435 |
|
Core
EBITDA |
$ |
8,226 |
|
|
$ |
9,753 |
|
|
$ |
16,146 |
|
|
$ |
18,820 |
|
(1) For the three months ended June 30, 2017,
other non-core items consist of $0.1 million of severance costs to
former employees. For the six months ended June 30, 2017, other
non-core items consist of $1.2 million in additional interest
expense associated with the acceleration of amortization of debt
issuance costs and discount relating to prepayments made on our
Term Loan Facility as a result of the refinancing of our
indebtedness from the issuance of senior unsecured debt and $1.2
million in severance costs to former employees. For the three
and six months ended June 30, 2016, other non-core items consists
of a $0.5 million impairment loss on our investment in CK Pearl
Fund.
Exhibit D. Calculation of Core Net Income Per
Share
|
For the Three Months Ended June 30,
(unaudited) |
|
For the Six Months Ended June 30,
(unaudited) |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
(Amounts in thousands, except share and per share
amounts) |
Numerator |
|
|
|
|
|
|
|
Core Net
Income |
$ |
4,733 |
|
|
$ |
6,563 |
|
|
$ |
9,321 |
|
|
$ |
12,528 |
|
Add:
Income taxes |
495 |
|
|
871 |
|
|
1,094 |
|
|
1,667 |
|
Pre-Tax
Core Net Income |
$ |
5,228 |
|
|
$ |
7,434 |
|
|
$ |
10,415 |
|
|
$ |
14,195 |
|
|
|
|
|
|
|
|
|
Denominator |
|
|
|
|
|
|
|
Class A
common stock |
5,588,978 |
|
|
5,777,726 |
|
|
5,697,483 |
|
|
5,814,428 |
|
Conversion of LLC Units and restricted LLC Units to Class A common
stock |
23,653,333 |
|
|
23,333,333 |
|
|
23,561,400 |
|
|
23,333,333 |
|
Restricted Stock Units |
1,786,592 |
|
|
1,660,771 |
|
|
1,738,123 |
|
|
1,440,101 |
|
Pro-Forma
Weighted Average Shares Outstanding (1) |
31,028,903 |
|
|
30,771,830 |
|
|
30,997,006 |
|
|
30,587,862 |
|
Pre-Tax Core
Net Income Per Share |
$ |
0.17 |
|
|
$ |
0.24 |
|
|
$ |
0.34 |
|
|
$ |
0.46 |
|
Less:
corporate income taxes per share (2) |
(0.07 |
) |
|
(0.10 |
) |
|
(0.15 |
) |
|
(0.20 |
) |
Core Net Income
Per Share |
$ |
0.10 |
|
|
$ |
0.14 |
|
|
$ |
0.19 |
|
|
$ |
0.26 |
|
(1) The calculation of Pro-Forma Weighted
Average Shares Outstanding assumes the conversion by the pre-IPO
holders of 23,333,333 Medley LLC units for 23,333,333 shares
of Class A common stock at the beginning of each period presented,
as well as the vesting of the weighted average number of restricted
stock units and, in 2017, 320,000 restricted LLC units during each
of the periods presented and conversion of such restricted LLC
units for an equal number of shares of Class A common stock.
(2) Represents a per share adjustment for income
taxes assuming that all of our pre-tax earnings were subject to
federal, state and local income taxes. We assumed an effective
corporate tax rate of 43.0% for all periods presented.
Exhibit E. Reconciliation of Net Income
Margin to Core Net Income Margin
|
For the Three Months Ended June 30,
(unaudited) |
|
For the Six Months Ended June 30,
(unaudited) |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
Net Income
Margin |
25.5 |
% |
|
2.8 |
% |
|
24.1 |
% |
|
3.5 |
% |
Reimbursable fund startup expenses (1) |
1.4 |
% |
|
26.0 |
% |
|
0.7 |
% |
|
27.6 |
% |
IPO date
award stock-based compensation (1) |
1.9 |
% |
|
3.2 |
% |
|
(1.1 |
)% |
|
3.5 |
% |
Other
non-core items (1)(2) |
0.4 |
% |
|
2.4 |
% |
|
7.7 |
% |
|
1.3 |
% |
Provision
for income taxes (1) |
2.6 |
% |
|
0.5 |
% |
|
2.8 |
% |
|
0.6 |
% |
Corporate
income taxes (3) |
(13.7 |
)% |
|
(15.0 |
)% |
|
(14.7 |
)% |
|
(15.7 |
)% |
Core Net Income
Margin |
18.1 |
% |
|
19.9 |
% |
|
19.5 |
% |
|
20.8 |
% |
(1) Adjustments to Net income attributable to Medley Management
Inc. and non-controlling interests in Medley LLC to calculate Core
Net Income are presented as a percentage of total revenue.
(2) For the three and six months ended June 30, 2017, other
non-core items consist of $0 and $1.2 million, respectively, in
additional interest expense associated with the acceleration of
amortization of debt issuance costs and discount relating to
prepayments made on our Term Loan Facility as a result of the
refinancing of our indebtedness from the issuance of senior
unsecured debt and $0.1 million and $1.1 million, respectively, in
severance costs to former employees. For the three and six months
ended June 30, 2016, other non-core items consists of a $0.5
million impairment loss on our investment in CK Pearl Fund.
(3) Assumes that all of our pre-tax earnings, including
adjustments above, are subject to federal, state and local income
taxes. In determining corporate income taxes, we used a combined
effective corporate tax rate of 43.0% and presented the calculation
as a percentage of total revenue.
Exhibit F. Consolidated Balance Sheets of Medley
Management Inc.
|
As ofJune 30,
2017(unaudited) |
|
As ofDecember 31,
2016 |
|
(Amounts in thousands) |
Assets |
|
|
|
Cash and
cash equivalents |
$ |
45,789 |
|
|
$ |
49,666 |
|
Cash and
cash equivalents of consolidated fund |
1,509 |
|
|
— |
|
Restricted cash equivalents |
2,657 |
|
|
4,897 |
|
Investments, at fair value |
63,045 |
|
|
31,904 |
|
Management fees receivable |
11,289 |
|
|
12,630 |
|
Performance fees receivable |
3,319 |
|
|
4,961 |
|
Other
assets |
16,851 |
|
|
18,311 |
|
Total assets |
$ |
144,459 |
|
|
$ |
122,369 |
|
|
|
|
|
Liabilities and
Equity |
|
|
|
Senior
unsecured debt |
$ |
116,503 |
|
|
$ |
49,793 |
|
Loans
payable |
8,900 |
|
|
52,178 |
|
Accounts
payable, accrued expenses and other liabilities |
23,595 |
|
|
37,255 |
|
Total liabilities |
148,998 |
|
|
139,226 |
|
|
|
|
|
Redeemable
Non-controlling Interests |
53,506 |
|
|
30,805 |
|
|
|
|
|
Equity |
|
|
|
Class A
common stock |
54 |
|
|
58 |
|
Class B
common stock |
— |
|
|
— |
|
Additional paid in capital (capital deficit) |
2,239 |
|
|
3,310 |
|
Accumulated other comprehensive income (loss) |
(263 |
) |
|
33 |
|
Retained
earnings (accumulated deficit) |
(6,952 |
) |
|
(5,254 |
) |
Total
stockholders' equity (deficit), Medley Management Inc. |
(4,922 |
) |
|
(1,853 |
) |
Non-controlling interests in consolidated subsidiaries |
(1,712 |
) |
|
(1,717 |
) |
Non-controlling interests in Medley LLC |
(51,411 |
) |
|
(44,092 |
) |
Total
equity (deficit) |
(58,045 |
) |
|
(47,662 |
) |
Total liabilities, redeemable non-controlling interests and
equity |
$ |
144,459 |
|
|
$ |
122,369 |
|
|
|
|
|
|
|
|
|
Medley Management (NYSE:MDLY)
Historical Stock Chart
From Aug 2024 to Sep 2024
Medley Management (NYSE:MDLY)
Historical Stock Chart
From Sep 2023 to Sep 2024