Medley Management Inc. (NYSE:MDLY) today reported its financial
results for its fourth quarter and year ended December 31,
2016.
Highlights
- Total assets under management were over $5.3 billion as of
December 31, 2016
- Fee earning assets under management were $3.2 billion as of
December 31, 2016
- U.S. GAAP net income attributable to Medley Management Inc. was
$0.07 per share for Q4 2016 and $0.02 for the year ended December
31, 2016
- Core Net Income Per Share was $0.14 for Q4 2016 and $0.54 for
the year ended December 31, 2016
“The fourth quarter of 2016 was another
consistent quarter of earnings for Medley. During the quarter, AUM
increased over 6% to $5.3 billion. We continued to diversify our
platform and are pleased with the launch of Sierra Total Return
Fund which occurred in January,” said Brook Taube, CEO of
Medley.
Results of Operations for the Three
Months Ended December 31, 2016
Total revenues increased by $2.3 million to
$18.3 million for the three months ended December 31, 2016
compared to the same period in 2015. The increase was due primarily
to an accrual of performance fee revenue which was partly offset by
a decrease in management fees due primarily to lower incentive fees
from our permanent capital vehicles.
Total expenses from operations decreased by $0.7
million to $9.2 million for the three months ended
December 31, 2016 compared to the same period in 2015. The
decrease was due primarily to lower expenses under our expense
support agreement with Sierra Income Corporation ("SIC") and lower
compensation and benefit expenses. The decrease was partly offset
by changes in performance fee compensation.
Total other expense, net decreased by $0.9
million to $1.6 million for the three months ended
December 31, 2016 compared to the same period in 2015. The
decrease was due primarily to a decrease in expense associated with
our revenue share payable.
Net income attributable to Medley Management
Inc. and non-controlling interests in Medley LLC increased by $1.9
million to $5.3 million for the three months ended
December 31, 2016 compared to the same period in 2015. Medley
Management Inc.’s net income per share was $0.07 for the three
months ended December 31, 2016 compared to $0.08 for the same
period in 2015.
Pre-Tax Core Net Income remained consistent at
$7.4 million for the three months ended December 31, 2016
compared to the same period in 2015. Core Net Income Per Share
remained consistent at $0.14 for the three months ended
December 31, 2016, compared to the same period in
2015. Core EBITDA increased by $0.2 million to $9.8 million
for the three months ended December 31, 2016 compared to the
same period in 2015.
Results of Operations for the Year Ended
December 31, 2016
Total revenues increased by $8.6 million to
$76.0 million for the year ended December 31, 2016 compared to
the same period in 2015. The increase was due primarily to an
accrual of performance fee revenue which was partly offset by a
decrease in management fees due primarily to lower incentive fees
from our permanent capital vehicles.
Total expenses from operations increased by
$20.5 million to $56.0 million for the year ended December 31,
2016 compared to the same period in 2015. The increase was due
primarily to higher expenses under our expense support agreement
with SIC and changes in performance fee compensation.
Total other expense, net decreased by $0.2
million to $9.0 million for the year ended December 31, 2016
compared to the same period in 2015. The decrease was due primarily
to changes in fair value of our investment in SIC.
Net income attributable to Medley Management
Inc. and non-controlling interests in Medley LLC decreased by $14.1
million to $7.4 million for the year ended December 31, 2016
compared to the same period in 2015. Medley Management Inc.’s net
income per share was $0.02 for the year ended December 31,
2016 compared to $0.46 for the same period in 2015.
Pre-Tax Core Net Income decreased by $3.8
million to $29.0 million for the year ended December 31, 2016
compared to the same period in 2015. Core Net Income per Share was
$0.54 for the year ended December 31, 2016 compared to $0.61
for the same period in 2015. Core EBITDA decreased by $3.2
million to $38.5 million for the year ended December 31, 2016
compared to the same period in 2015.
Investor Contact:Sam AndersonHead of Capital Markets & Risk
ManagementMedley Management Inc.212.759.0777
Media Contact:Liz BruceFitzroy Communications212.498.9197
Key Performance Indicators:
| |
|
For the Three Months Ended December 31,
(unaudited) |
|
For the Years Ended December 31, |
| |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| |
|
(Amounts in thousands, except AUM, share and per share
amounts) |
| Consolidated
Financial Data: |
|
|
|
|
|
|
|
|
| Pre-Tax
Income |
|
$ |
7,472 |
|
|
$ |
3,667 |
|
|
$ |
11,015 |
|
|
$ |
22,647 |
|
| Net
income attributable to Medley Management Inc. and non-controlling
interests in Medley LLC |
|
5,257 |
|
|
3,356 |
|
|
7,403 |
|
|
21,517 |
|
| Net
income per Class A common stock |
|
$ |
0.07 |
|
|
$ |
0.08 |
|
|
$ |
0.02 |
|
|
$ |
0.46 |
|
| Net
Income Margin (1) |
|
28.8 |
% |
|
21.0 |
% |
|
9.7 |
% |
|
31.9 |
% |
| Weighted
average shares - Basic and Diluted |
|
5,809,130 |
|
|
6,009,400 |
|
|
5,804,042 |
|
|
6,002,422 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-GAAP
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Pre-Tax
Core Net Income (2) |
|
$ |
7,376 |
|
|
$ |
7,364 |
|
|
$ |
28,954 |
|
|
$ |
32,798 |
|
| Core Net
Income (2) |
|
6,451 |
|
|
6,870 |
|
|
25,531 |
|
|
29,747 |
|
| Core
EBITDA (3) |
|
9,843 |
|
|
9,611 |
|
|
38,481 |
|
|
41,721 |
|
| Core Net
Income Per Share (4) |
|
$ |
0.14 |
|
|
$ |
0.14 |
|
|
$ |
0.54 |
|
|
$ |
0.61 |
|
| Core Net
Income Margin (5) |
|
23.0 |
% |
|
26.3 |
% |
|
21.7 |
% |
|
27.7 |
% |
| Pro-Forma Weighted Average Shares Outstanding (6) |
30,800,512 |
|
|
30,470,736 |
|
|
30,689,412 |
|
|
30,459,958 |
|
| |
|
|
|
|
|
|
|
|
| Other Data (at
period end, in millions): |
|
|
|
|
|
|
|
|
| AUM |
|
$ |
5,335 |
|
|
$ |
4,779 |
|
|
$ |
5,335 |
|
|
$ |
4,779 |
|
| Fee
Earning AUM |
|
3,190 |
|
|
3,302 |
|
|
3,190 |
|
|
3,302 |
|
(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 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. 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,
September 30, 2016 |
$ |
2,183 |
|
|
$ |
928 |
|
|
$ |
3,111 |
|
|
70 |
% |
|
30 |
% |
|
Commitments |
29 |
|
|
116 |
|
|
145 |
|
|
|
|
|
|
|
| Capital
reduction |
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
Distributions |
(27 |
) |
|
(79 |
) |
|
(106 |
) |
|
|
|
|
|
|
| Change in
fund value |
22 |
|
|
18 |
|
|
40 |
|
|
|
|
|
|
|
| Ending balance,
December 31, 2016 |
$ |
2,207 |
|
|
$ |
983 |
|
|
$ |
3,190 |
|
|
69 |
% |
|
31 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total fee earning AUM increased by $79 million,
or 3% as of December 31, 2016 compared to total fee earning
AUM as of September 30, 2016. The permanent capital vehicles’ share
of fee earning AUM decreased to 69% as of December 31, 2016
compared to September 30, 2016.
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, 2015 |
$ |
2,238 |
|
|
$ |
1,064 |
|
|
$ |
3,302 |
|
|
68 |
% |
|
32 |
% |
|
Commitments |
22 |
|
|
194 |
|
|
216 |
|
|
|
|
|
|
|
| Capital
reduction |
(12 |
) |
|
— |
|
|
(12 |
) |
|
|
|
|
|
|
|
Distributions |
(126 |
) |
|
(285 |
) |
|
(411 |
) |
|
|
|
|
|
|
| Change in
fund value |
85 |
|
|
10 |
|
|
95 |
|
|
|
|
|
|
|
| Ending balance,
December 31, 2016 |
$ |
2,207 |
|
|
$ |
983 |
|
|
$ |
3,190 |
|
|
69 |
% |
|
31 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total fee earning AUM decreased by $112 million,
or 3%, to $3.2 billion as of December 31, 2016 compared to
total fee earning AUM as of December 31, 2015. The permanent
capital vehicles’ share of fee earning AUM increased to 69% as of
December 31, 2016 compared to December 31, 2015.
Conference Call and Webcast
Information
We will host an earnings conference call and
audio webcast at 11:00 a.m. (Eastern Time) on Thursday, March 16,
2017 to discuss our fourth quarter and full year 2016 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 69291290 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 a credit-focused 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 December 31, 2016, Medley had in excess
of $5.3 billion of assets under management in two
business development companies, Medley Capital
Corporation (NYSE:MCC) and Sierra Income Corporation, as
well as private investment vehicles. Over the past 15 years, Medley
has provided capital to over 350 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:MCQ), (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 December 31,
(unaudited) |
|
For the Years Ended December 31, |
| |
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
| |
(Amounts in thousands, except share and per share
data) |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees |
$ |
15,276 |
|
|
$ |
19,097 |
|
|
$ |
65,496 |
|
|
$ |
75,675 |
|
|
Performance fees |
715 |
|
|
(5,058 |
) |
|
2,421 |
|
|
(15,685 |
) |
| Other
revenues and fees |
2,260 |
|
|
1,940 |
|
|
8,111 |
|
|
7,436 |
|
| Total
revenues |
18,251 |
|
|
15,979 |
|
|
76,028 |
|
|
67,426 |
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Compensation and benefits |
6,404 |
|
|
7,236 |
|
|
27,800 |
|
|
26,768 |
|
|
Performance fee compensation |
(81 |
) |
|
(3,471 |
) |
|
(319 |
) |
|
(8,049 |
) |
| General,
administrative and other expenses |
2,861 |
|
|
6,080 |
|
|
28,540 |
|
|
16,836 |
|
| Total
expenses |
9,184 |
|
|
9,845 |
|
|
56,021 |
|
|
35,555 |
|
|
|
|
|
|
|
|
|
|
| Other income
(expense) |
|
|
|
|
|
|
|
| Dividend
income |
549 |
|
|
221 |
|
|
1,304 |
|
|
886 |
|
| Interest
expense |
(2,633 |
) |
|
(2,134 |
) |
|
(9,226 |
) |
|
(8,469 |
) |
| Other
income (expenses), net |
489 |
|
|
(554 |
) |
|
(1,070 |
) |
|
(1,641 |
) |
|
Total other income (expense), net |
(1,595 |
) |
|
(2,467 |
) |
|
(8,992 |
) |
|
(9,224 |
) |
| Income
(loss) before income taxes |
7,472 |
|
|
3,667 |
|
|
11,015 |
|
|
22,647 |
|
| Provision
for (benefit from) income taxes |
772 |
|
|
62 |
|
|
1,063 |
|
|
2,015 |
|
|
Net income (loss) |
6,700 |
|
|
3,605 |
|
|
9,952 |
|
|
20,632 |
|
| Net
income (loss) attributable to redeemable non-controlling interests
and non-controlling interests in consolidated subsidiaries |
1,443 |
|
|
249 |
|
|
2,549 |
|
|
(885 |
) |
| Net
income attributable to non-controlling interests in Medley LLC |
4,632 |
|
|
2,830 |
|
|
6,406 |
|
|
18,406 |
|
|
Net income attributable to Medley Management
Inc. |
$ |
625 |
|
|
$ |
526 |
|
|
$ |
997 |
|
|
$ |
3,111 |
|
| |
|
|
|
|
|
|
|
| Net income per Class A
common stock: |
|
|
|
|
|
|
|
|
Basic |
$ |
0.07 |
|
|
$ |
0.08 |
|
|
$ |
0.02 |
|
|
$ |
0.46 |
|
|
Diluted |
$ |
0.07 |
|
|
$ |
0.08 |
|
|
$ |
0.02 |
|
|
$ |
0.46 |
|
| Weighted average shares
outstanding - Basic and Diluted |
5,809,130 |
|
|
6,009,400 |
|
|
5,804,042 |
|
|
6,002,422 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit B. Consolidated Statements of Comprehensive
Income |
|
|
| |
For the Three Months Ended December 31,
(unaudited) |
|
For the Years Ended December 31, |
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
| |
(Amounts in thousands) |
| Net income (loss) |
$ |
6,700 |
|
|
$ |
3,605 |
|
|
$ |
9,952 |
|
$ |
20,632 |
|
| Other comprehensive
income (loss): |
|
|
|
|
|
|
|
| Change in
fair value of available-for-sale securities |
(74 |
) |
|
— |
|
|
194 |
|
|
— |
|
|
Total comprehensive income (loss) |
6,626 |
|
|
3,605 |
|
|
10,146 |
|
|
20,632 |
|
|
Comprehensive income (loss) attributable to redeemable
non-controlling interests and non-controlling interests in
consolidated subsidiaries |
1,440 |
|
|
249 |
|
|
2,577 |
|
|
(885 |
) |
|
Comprehensive income attributable to Medley LLC |
4,575 |
|
|
2,830 |
|
|
6,539 |
|
|
18,406 |
|
| Comprehensive
income attributable to Medley Management Inc. |
$ |
611 |
|
|
$ |
526 |
|
|
$ |
1,030 |
|
|
$ |
3,111 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 December
31, (unaudited) |
|
For the Years Ended December 31, |
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
| |
(Amounts in thousands) |
| Net income
attributable to Medley Management Inc. |
$ |
625 |
|
|
$ |
526 |
|
|
$ |
997 |
|
|
$ |
3,111 |
|
| Net
income attributable to non-controlling interests in Medley LLC |
4,632 |
|
|
2,830 |
|
|
6,406 |
|
|
18,406 |
|
| Net income
attributable to Medley Management Inc. and non-controlling
interests in Medley LLC |
$ |
5,257 |
|
|
$ |
3,356 |
|
|
$ |
7,403 |
|
|
$ |
21,517 |
|
|
Reimbursable fund startup expenses |
(62 |
) |
|
3,275 |
|
|
16,329 |
|
|
6,378 |
|
| IPO date
award stock-based compensation |
793 |
|
|
505 |
|
|
2,811 |
|
|
2,585 |
|
| Other
non-core items (1) |
616 |
|
|
166 |
|
|
1,348 |
|
|
303 |
|
| Income
tax benefit (expense) on adjustments |
(153 |
) |
|
(432 |
) |
|
(2,360 |
) |
|
(1,036 |
) |
| Core Net
Income |
$ |
6,451 |
|
|
$ |
6,870 |
|
|
$ |
25,531 |
|
|
$ |
29,747 |
|
| Interest
expense |
2,232 |
|
|
2,134 |
|
|
8,614 |
|
|
8,469 |
|
| Income
taxes |
925 |
|
|
494 |
|
|
3,423 |
|
|
3,051 |
|
|
Depreciation and amortization |
235 |
|
|
113 |
|
|
913 |
|
|
454 |
|
| Core
EBITDA |
$ |
9,843 |
|
|
$ |
9,611 |
|
|
$ |
38,481 |
|
|
$ |
41,721 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For the three months ended December 31, 2016, other non-core
items consist of a $0.4 million 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 a $0.2
million severance cost to a former employee. For the year ended
December 31, 2016, other non-core items also include a $0.5 million
impairment loss on our investment in CK Pearl Fund and an
additional $0.2 million 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. For the
three months and year ended December 31, 2015, other non-core items
consist of severance costs to former employees.
|
|
|
|
|
Exhibit D. Calculation of Core Net Income Per
Share |
|
|
| |
For the Three Months Ended
December 31, (unaudited) |
|
For the Years Ended December
31, |
| |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
| |
|
(Amounts
in thousands, except share and per share amounts) |
|
|
Numerator |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Core Net Income |
|
$ |
6,451 |
|
|
$ |
6,870 |
|
|
$ |
25,531 |
|
|
$ |
29,747 |
|
| Add: Income taxes |
|
925 |
|
|
494 |
|
|
3,423 |
|
|
3,051 |
|
| Pre-Tax Core Net
Income |
|
7,376 |
|
|
7,364 |
|
|
28,954 |
|
|
32,798 |
|
| |
|
|
|
|
|
|
|
|
|
Denominator |
|
|
|
|
|
|
|
|
| Class A common
stock |
|
5,809,130 |
|
|
6,009,400 |
|
|
5,804,042 |
|
|
6,002,422 |
|
| Conversion of LLC Units
to Class A common stock |
|
23,333,333 |
|
|
23,333,333 |
|
|
23,333,333 |
|
|
23,333,333 |
|
| Restricted stock
units |
|
1,658,049 |
|
|
1,128,003 |
|
|
1,552,037 |
|
|
1,124,203 |
|
| Pro-Forma Weighted
Average Shares Outstanding (1) |
|
30,800,512 |
|
|
30,470,736 |
|
|
30,689,412 |
|
|
30,459,958 |
|
| Pre-Tax Core
Net Income Per Share |
|
$ |
0.24 |
|
|
$ |
0.24 |
|
|
$ |
0.94 |
|
|
$ |
1.08 |
|
| Less: corporate income
taxes per share (2) |
|
(0.10 |
) |
|
(0.10 |
) |
|
(0.40 |
) |
|
(0.47 |
) |
| Core Net Income
Per Share |
|
$ |
0.14 |
|
|
$ |
0.14 |
|
|
$ |
0.54 |
|
|
$ |
0.61 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
during each of the periods presented. (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 December 31,
(unaudited) |
|
For the Years Ended December 31, |
| |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| |
|
|
|
|
|
|
|
|
| Net Income
Margin |
|
28.8 |
% |
|
21.0 |
% |
|
9.7 |
% |
|
31.9 |
% |
|
Reimbursable fund startup expenses (1) |
|
(0.3 |
)% |
|
20.5 |
% |
|
21.5 |
% |
|
9.5 |
% |
| IPO date
award stock-based compensation (1) |
|
4.3 |
% |
|
3.2 |
% |
|
3.7 |
% |
|
3.8 |
% |
| Other
non-core items (1)(2) |
|
3.4 |
% |
|
1.0 |
% |
|
1.8 |
% |
|
0.4 |
% |
| Provision
for income taxes (1) |
|
4.2 |
% |
|
0.4 |
% |
|
1.4 |
% |
|
3.0 |
% |
| Corporate
income taxes (3) |
|
(17.4 |
)% |
|
(19.8 |
)% |
|
(16.4 |
)% |
|
(20.9 |
)% |
| Core Net Income
Margin |
|
23.0 |
% |
|
26.3 |
% |
|
21.7 |
% |
|
27.7 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
(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 months ended December 31, 2016, other non-core items
consist of a $0.4 million 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 a $0.2
million severance cost to a former employee. For the year ended
December 31, 2016, other non-core items also include a $0.5 million
impairment loss on our investment in CK Pearl Fund and an
additional $0.2 million 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. For the
three months and year ended December 31, 2015, other non-core items
consist of severance costs to former employees.(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 of December 31, |
| |
|
2016 |
|
|
|
2015 |
|
| |
|
|
|
| |
(Amounts
in thousands) |
|
Assets |
|
|
|
|
|
|
|
| Cash and
cash equivalents |
$ |
49,666 |
|
|
$ |
71,688 |
|
|
Restricted cash equivalents |
4,897 |
|
|
— |
|
|
Investments, at fair value |
31,904 |
|
|
16,360 |
|
|
Management fees receivable |
12,630 |
|
|
16,172 |
|
|
Performance fees receivable |
4,961 |
|
|
2,518 |
|
| Other
assets |
18,311 |
|
|
13,015 |
|
|
Total assets |
$ |
122,369 |
|
|
$ |
119,753 |
|
|
|
|
|
|
| Liabilities and
Equity |
|
|
|
| Loans
payable |
$ |
52,178 |
|
|
$ |
100,871 |
|
| Senior
unsecured debt |
49,793 |
|
|
— |
|
| Accounts
payable, accrued expenses and other liabilities |
36,270 |
|
|
34,746 |
|
|
Performance fee compensation payable |
985 |
|
|
1,823 |
|
|
Total liabilities |
139,226 |
|
|
137,440 |
|
| |
|
|
|
| Redeemable
Non-controlling Interests |
30,805 |
|
|
— |
|
| |
|
|
|
|
Equity |
|
|
|
| Class A
common stock |
58 |
|
|
60 |
|
| Class B
common stock |
— |
|
|
— |
|
|
Additional paid in capital (capital deficit) |
3,310 |
|
|
631 |
|
|
Accumulated other comprehensive income (loss) |
33 |
|
|
— |
|
| Retained
earnings (accumulated deficit) |
(5,254 |
) |
|
(730 |
) |
| Total
stockholders' equity (deficit), Medley Management Inc. |
(1,853 |
) |
|
(39 |
) |
|
Non-controlling interests in consolidated subsidiaries |
(1,717 |
) |
|
(459 |
) |
|
Non-controlling interests in Medley LLC |
(44,092 |
) |
|
(17,189 |
) |
| Total
equity (deficit) |
(47,662 |
) |
|
(17,687 |
) |
|
Total liabilities, redeemable non-controlling interests and
equity |
$ |
122,369 |
|
|
$ |
119,753 |
|
|
|
|
|
|
|
|
|
|
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