NEW YORK, March 27, 2020 /PRNewswire/ -- Medley Management
Inc. (NYSE: MDLY) today reported its financial results for its
fourth quarter and year ended December 31,
2019.
Summary
- Fee earning assets under management were $2.1 billion as of December 31, 2019
- Total assets under management were $4.1
billion as of December 31,
2019
- Total revenues were $10.7 million
for the three months ended December 31,
2019 and $48.8 million for the
year ended December 31, 2019
- U.S. GAAP net loss per share attributable to Medley Management
Inc. was $0.46 for Q4 2019 and
$0.60 for the year ended December 31, 2019
- Core Net Loss Per Share was $0.04
for Q4 2019 and $0.03 for the year
ended December 31, 2019
- The board of directors did not declare a dividend for the
fourth quarter
Results of Operations for the Three Months Ended
December 31, 2019
Total revenues were $10.7 million
for the three months ended December 31,
2019 compared to $12.6 million
for the same period in 2018. The decrease was due primarily to
lower base management fees from our permanent capital vehicles as a
result of a decrease in fee earning assets under management, which
was mainly driven by a reduction in leverage and decline in
portfolio valuations.
Total expenses from operations were $11.3
million for the three months ended December 31, 2019 compared to $14.1 million for the same period in 2018. The
decrease was due primarily to a decline in compensation and
benefits as a result of lower average headcount and discretionary
bonuses. Included in total expenses are costs associated with our
pending merger of $0.9 million and
$1.0 million for the three months
ended December 31, 2019 and 2018,
respectively.
Total other expenses were $6.4
million for the three months ended December 31, 2019 compared to $10.9 million for the same period in 2018. This
decrease was due primarily to a $3.4
million unrealized loss on our investment in shares of MCC
during the three months ended December 31,
2019 as compared to a $9.0
million unrealized loss recorded during the same period in
2018, offset by an $0.8 million
reduction in dividend income from our investment in shares of MCC
during the three months ended December 31,
2019 as compared to the same period in 2018. Unrealized
losses on our investment in shares of MCC were allocated to
redeemable non-controlling interests in consolidated subsidiaries
which did not have any impact on the income attributed to Medley
Management Inc. and non-controlling interests in Medley LLC.
Net loss attributable to Medley Management Inc. and
non-controlling interests in Medley LLC was $8.2 million for the three months ended
December 31, 2019 compared to a net
loss $3.9 million for the same period
in 2018. Medley Management Inc.'s net loss per share was
$0.46 for the three months ended
December 31, 2019 compared to a net
loss per share of $0.16 for the same period in 2018.
Pre-Tax Core Net Loss was $1.9
million for the three months ended December 31, 2019 compared to $1.4 million for the same period in 2018. Core
Net Loss Per Share was $0.04 for the
three months ended December 31, 2019,
compared to $0.03 for the same period
in 2018. Core EBITDA was $1.1
million for the three months ended December 31, 2019 compared to $1.5 million for the same period in 2018.
Results of Operations for the Year Ended December 31, 2019
Total revenues were $48.8 million
for the year ended December 31, 2019
compared to $56.5 million for the
same period in 2018. This decrease was due primarily to lower base
management fees from our permanent capital vehicles as a result of
a decrease in fee earning assets under management, which was mainly
driven by a reduction in leverage and decline in portfolio
valuations, offset in part by an increase in investment income.
Total expenses from operations were $46.1
million for the year ended December
31, 2019 compared to $51.0
million for the same period in 2018. This decrease was due
primarily to a decrease in professional fees and expenses
associated with our consolidated fund, STRF, offset in part by an
increase in expenses associated with our pending merger. Total
expenses associated with our pending merger were $4.6 million and $3.8
million for the years ended December
31, 2019 and 2018, respectively.
Total other expenses were $14.8
million for the year ended December
31, 2019 compared to $26.7
million for the same period in 2018. This favorable variance
was due primarily to a decline of $15.7
million in unrealized losses associated with our investment
in shares of MCC being recognized during 2019 as compared to 2018.
All of the unrealized losses of $4.1
million recognized in 2019 and $16.3
million of the $19.9 million
in unrealized losses recognized in 2018 were allocated to
redeemable non-controlling interests in consolidated subsidiaries
which did not have any impact on the income attributed to Medley
Management Inc. and non-controlling interests in Medley LLC.
Net loss attributable to Medley Management Inc. and
non-controlling interests in Medley LLC was $13.1 million for the year ended December 31, 2019 compared to a net loss of
$10.4 million for the same period in
2018. Medley Management Inc.'s net loss per share was $0.60 for the year ended December 31, 2019 compared to net loss per share
of $0.65 for the same period in 2018.
Pre-Tax Core Net Income was $1.3
million for the year ended December
31, 2019 compared to Pre-Tax Core Net Income of $5.8 million for the same period in 2018. Core
Net Loss Per Share was $0.03 for the
year ended December 31, 2019,
compared to Core Net Income Per Share of $0.12 for the same period in 2018. Core
EBITDA was $10.9 million for the year
ended December 31, 2019 compared to
$17.4 million for the same period in
2018.
Investor Contact:
Sam Anderson
Head of Capital Markets & Risk Management
Medley Management Inc.
212-759-0777
Media Contact:
Jonathan Gasthalter/Nathaniel Garnick
Gasthalter & Co. LP
212-257-4170
|
Key Performance
Indicators:
|
|
|
|
|
|
For the Three
Months Ended
December 31,
(unaudited)
|
|
For the Years
Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
(dollars in
thousands, except AUM, share and per share amounts)
|
|
Consolidated
Financial Data:
|
|
|
|
|
|
|
|
|
Pre-Tax (Loss)
Income
|
$
|
(7,070)
|
|
|
$
|
(12,421)
|
|
|
$
|
(12,060)
|
|
|
$
|
(21,268)
|
|
|
Net loss attributable
to Medley Management Inc. and non-controlling interests in Medley
LLC
|
$
|
(8,225)
|
|
|
$
|
(3,874)
|
|
|
$
|
(13,074)
|
|
|
$
|
(10,443)
|
|
|
Net loss per Class A
common stock
|
$
|
(0.46)
|
|
|
$
|
(0.16)
|
|
|
$
|
(0.60)
|
|
|
$
|
(0.65)
|
|
|
Net Income Margin
(1)
|
(77.2)
|
%
|
|
(30.8)
|
%
|
|
(26.8)
|
%
|
|
(18.5)
|
%
|
|
Weighted average
shares - Basic and Diluted
|
6,007,954
|
|
|
5,697,802
|
|
|
5,878,211
|
|
|
5,579,628
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Data:
|
|
|
|
|
|
|
|
|
Pre-Tax Core Net
(Loss) Income (2)
|
$
|
(1,910)
|
|
|
$
|
(1,397)
|
|
|
$
|
(1,254)
|
|
|
$
|
5,818
|
|
|
Core Net (Loss)
Income (2)
|
$
|
(7,030)
|
|
|
$
|
(1,107)
|
|
|
$
|
(6,652)
|
|
|
$
|
4,058
|
|
|
Core EBITDA
(3)
|
$
|
1,115
|
|
|
$
|
1,477
|
|
|
$
|
10,945
|
|
|
$
|
17,420
|
|
|
Core Net (Loss)
Income Per Share (4)
|
$
|
(0.04)
|
|
|
$
|
(0.03)
|
|
|
$
|
(0.03)
|
|
|
$
|
0.12
|
|
|
Core Net Income
Margin (5)
|
(12.1)
|
%
|
|
(7.4)
|
%
|
|
(1.7)
|
%
|
|
7.0
|
%
|
|
Pro-Forma Weighted
Average Shares Outstanding (6)
|
34,388,060
|
|
|
32,158,366
|
|
|
33,603,488
|
|
|
31,695,208
|
|
|
|
|
|
|
|
|
|
|
Other Data (at
period end, in millions):
|
|
|
|
|
|
|
|
|
AUM
|
$
|
4,122
|
|
|
$
|
4,712
|
|
|
$
|
4,122
|
|
|
$
|
4,712
|
|
|
Fee Earning
AUM
|
$
|
2,138
|
|
|
$
|
2,785
|
|
|
$
|
2,138
|
|
|
$
|
2,785
|
|
|
(1)
|
Net Income Margin
equals Net income (loss) 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 (loss) attributable to
Medley Management Inc. and 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, non-recurring expenses associated with strategic initiatives,
such as our pending merger with Sierra, 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
(loss) attributable to Medley Management Inc. and non-controlling
interests in Medley LLC in Exhibit B 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 (loss) attributable to
Medley Management Inc. and non-controlling interests in Medley LLC
in Exhibit B 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 assume that all of our pre-tax earnings are subject to federal,
state and local corporate income taxes. In determining corporate
income taxes, we used a combined effective corporate tax rate of
33.0% for all of the periods presented above. Please refer to the
calculation of Core Net Income Per Share in Exhibit C 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
conversion by the pre-IPO holders of up to 26,449,973 vested and
unvested LLC Units for 26,449,973 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 granted to
employees and directors during each of the periods
presented.
|
|
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, 2019
|
$
|
1,444
|
|
|
$
|
876
|
|
|
$
|
2,320
|
|
|
62
|
%
|
|
38
|
%
|
|
Commitments
|
(60)
|
|
|
20
|
|
|
(40)
|
|
|
|
|
|
|
Capital
reduction
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
Distributions
|
(16)
|
|
|
(115)
|
|
|
(131)
|
|
|
|
|
|
|
Change in fund
value
|
(7)
|
|
|
(4)
|
|
|
(11)
|
|
|
|
|
|
|
Ending balance,
December 30, 2019
|
$
|
1,361
|
|
|
$
|
777
|
|
|
$
|
2,138
|
|
|
64
|
%
|
|
36
|
%
|
Total fee earning AUM decreased by $182.0
million, or 8%, to $2.1
billion as of December 31,
2019 compared to September 30, 2019, due primarily to
debt repayments representing capital reductions, distributions and
changes in fund value.
|
The table below
presents the roll forward of fee earning AUM for the year ended
December 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% 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, 2018
|
$
|
1,743
|
|
|
$
|
1,042
|
|
|
$
|
2,785
|
|
|
63
|
%
|
|
37
|
%
|
|
Commitments
|
(66)
|
|
|
113
|
|
|
47
|
|
|
|
|
|
|
Capital
reduction
|
(135)
|
|
|
—
|
|
|
(135)
|
|
|
|
|
|
|
Distributions
|
(67)
|
|
|
(293)
|
|
|
(360)
|
|
|
|
|
|
|
Change in fund
value
|
(114)
|
|
|
(85)
|
|
|
(199)
|
|
|
|
|
|
|
Ending balance,
December 31, 2019
|
$
|
1,361
|
|
|
$
|
777
|
|
|
$
|
2,138
|
|
|
64
|
%
|
|
36
|
%
|
Total fee earning AUM decreased by $647.0
million, or 23%, to $2.1
billion as of December 31,
2019 compared to December 31, 2018, due primarily to
distributions, debt repayments representing capital reductions and
changes in fund value.
Dividend Declaration
Medley did not declare a dividend this quarter. Medley's board
of directors will continue to monitor the dividend policy on an
ongoing basis.
About Medley
Medley is an alternative asset management firm offering yield
solutions to retail and institutional investors. Medley's national
direct origination franchise is a premier provider of capital to
the middle market in the U.S. Medley has $4.1 billion of assets under management in two
business development companies, Medley Capital Corporation
(NYSE:MCC) (TASE:MCC) and Sierra Income Corporation, and several
private investment vehicles. Over the past 18 years, Medley has
provided capital to over 400 companies across 35 industries in
North America.(1)
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 is
dual-listed on the New York Stock Exchange (NYSE:MCC) and the Tel
Aviv Stock Exchange (TASE:MCC) and has outstanding bonds which
trade on both the New York Stock Exchange under the symbols
(NYSE:MCV), (NYSE:MCX) and the Tel Aviv Stock Exchange under the
symbol (TASE: MCC.B1).
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, 2019. 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 exhibits attached hereto.
Non-GAAP measures used by management include Pre-Tax Core Net
Income (Loss), Core Net Income (Loss), Core EBITDA, Core Net Income
(Loss) 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.
|
(1)
|
Medley Management
Inc. is the parent company of Medley LLC and several registered
investment advisors (collectively, "Medley"). Assets under
management refers to assets of our funds, which represents the sum
of the net asset value of such funds, the drawn and undrawn debt
(at the fund level, including amounts subject to restrictions) and
uncalled committed capital (including commitments to funds
that have yet to commence their investment periods). Assets under
management are as of December 31, 2019.
|
|
Exhibit A.
Consolidated Statements of Operations of Medley Management
Inc.
|
|
|
|
|
|
For the Three
Months Ended
December 31,
(unaudited)
|
|
For the Years
Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
(in thousands,
except share and per share data)
|
|
Revenues
|
|
|
|
|
|
|
|
|
Management
fees
|
$
|
8,745
|
|
|
$
|
10,699
|
|
|
$
|
39,473
|
|
|
$
|
47,085
|
|
|
Other revenues and
fees
|
1,972
|
|
|
2,367
|
|
|
9,703
|
|
|
10,503
|
|
|
Investment
income:
|
|
|
|
|
|
|
|
|
Carried
interest
|
168
|
|
|
(129)
|
|
|
819
|
|
|
142
|
|
|
Other investment
loss, net
|
(231)
|
|
|
(372)
|
|
|
(1,154)
|
|
|
(1,221)
|
|
|
Total
Revenues
|
10,654
|
|
|
12,565
|
|
|
48,841
|
|
|
56,509
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
6,856
|
|
|
9,787
|
|
|
28,925
|
|
|
31,666
|
|
|
General,
administrative and other expenses
|
4,423
|
|
|
4,271
|
|
|
17,186
|
|
|
19,366
|
|
|
Total
Expenses
|
11,279
|
|
|
14,058
|
|
|
46,111
|
|
|
51,032
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense)
|
|
|
|
|
|
|
|
|
Dividend
income
|
177
|
|
|
960
|
|
|
1,119
|
|
|
4,311
|
|
|
Interest
expense
|
(2,851)
|
|
|
(2,693)
|
|
|
(11,497)
|
|
|
(10,806)
|
|
|
Other expenses,
net
|
(3,771)
|
|
|
(9,195)
|
|
|
(4,412)
|
|
|
(20,250)
|
|
|
Total other expenses,
net
|
(6,445)
|
|
|
(10,928)
|
|
|
(14,790)
|
|
|
(26,745)
|
|
|
Loss before income
taxes
|
(7,070)
|
|
|
(12,421)
|
|
|
(12,060)
|
|
|
(21,268)
|
|
|
Provision for
(benefit from) income taxes
|
4,991
|
|
|
(576)
|
|
|
4,710
|
|
|
258
|
|
|
Net Loss
|
(12,061)
|
|
|
(11,845)
|
|
|
(16,770)
|
|
|
(21,526)
|
|
|
Net loss attributable
to redeemable non-controlling interests and non-controlling
interests in consolidated subsidiaries
|
(3,836)
|
|
|
(7,971)
|
|
|
(3,696)
|
|
|
(11,083)
|
|
|
Net loss attributable
to non-controlling interests in Medley LLC
|
(5,617)
|
|
|
(3,282)
|
|
|
(9,695)
|
|
|
(8,011)
|
|
|
Net Loss Attributable
to Medley Management Inc.
|
$
|
(2,608)
|
|
|
$
|
(592)
|
|
|
$
|
(3,379)
|
|
|
$
|
(2,432)
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Share
of Class A Common Stock:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.46)
|
|
|
$
|
(0.16)
|
|
|
$
|
(0.60)
|
|
|
$
|
(0.65)
|
|
|
Diluted
|
$
|
(0.46)
|
|
|
$
|
(0.16)
|
|
|
$
|
(0.60)
|
|
|
$
|
(0.65)
|
|
|
Weighted average
shares outstanding - Basic and Diluted
|
6,007,954
|
|
|
5,697,802
|
|
|
5,878,211
|
|
|
5,579,628
|
|
|
Exhibit B.
Reconciliation of Core Net Income (Loss) and Core EBITDA to Net
income (loss) 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,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
(in
thousands)
|
|
Net loss attributable
to Medley Management Inc.
|
$
|
(2,608)
|
|
|
$
|
(592)
|
|
|
$
|
(3,379)
|
|
|
$
|
(2,432)
|
|
|
Net loss attributable
to non-controlling interests in Medley LLC
|
(5,617)
|
|
|
(3,282)
|
|
|
(9,695)
|
|
|
(8,011)
|
|
|
Net loss attributable
to Medley Management Inc. and non-controlling interests in Medley
LLC
|
$
|
(8,225)
|
|
|
$
|
(3,874)
|
|
|
$
|
(13,074)
|
|
|
$
|
(10,443)
|
|
|
Reimbursable fund
startup expenses
|
6
|
|
|
179
|
|
|
289
|
|
|
1,483
|
|
|
IPO date award
stock-based compensation
|
222
|
|
|
428
|
|
|
777
|
|
|
1,446
|
|
|
Expenses associated
with strategic initiatives
|
1,070
|
|
|
975
|
|
|
4,556
|
|
|
4,833
|
|
|
Other non-core
items:
|
|
|
|
|
|
|
|
|
Unrealized (losses)
gains on shares of MCC
|
(70)
|
|
|
—
|
|
|
(70)
|
|
|
3,543
|
|
|
Severance
expense
|
96
|
|
|
467
|
|
|
1,558
|
|
|
2,730
|
|
|
Other
|
—
|
|
|
1,004
|
|
|
—
|
|
|
1,967
|
|
|
Income tax expense on
adjustments
|
(129)
|
|
|
(286)
|
|
|
(688)
|
|
|
(1,501)
|
|
|
Core Net Income
(Loss)
|
$
|
(7,030)
|
|
|
$
|
(1,107)
|
|
|
$
|
(6,652)
|
|
|
$
|
4,058
|
|
|
Interest
expense
|
2,850
|
|
|
2,693
|
|
|
11,497
|
|
|
10,806
|
|
|
Income
taxes
|
5,120
|
|
|
(290)
|
|
|
5,398
|
|
|
1,760
|
|
|
Depreciation and
amortization
|
175
|
|
|
181
|
|
|
702
|
|
|
796
|
|
|
Core
EBITDA
|
$
|
1,115
|
|
|
$
|
1,477
|
|
|
$
|
10,945
|
|
|
$
|
17,420
|
|
|
Exhibit C.
Calculation of Core Net Income (Loss) Per Share
|
|
|
|
|
|
For the Three
Months Ended
December 31,
(unaudited)
|
|
For the Years
Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
(in thousands, except
share and per share amounts)
|
|
Numerator
|
|
|
|
|
|
|
|
|
Core Net Income
(Loss)
|
$
|
(7,030)
|
|
|
$
|
(1,107)
|
|
|
$
|
(6,652)
|
|
|
$
|
4,058
|
|
|
Add: Income
taxes
|
5,120
|
|
|
(290)
|
|
|
5,398
|
|
|
1,760
|
|
|
Pre-Tax Core Net
Income (loss)
|
$
|
(1,910)
|
|
|
$
|
(1,397)
|
|
|
$
|
(1,254)
|
|
|
$
|
5,818
|
|
|
|
|
|
|
|
|
|
|
Denominator
|
|
|
|
|
|
|
|
|
Class A common
stock
|
6,007,954
|
|
|
5,697,802
|
|
|
5,878,211
|
|
|
5,579,628
|
|
|
Conversion of LLC
Units and restricted LLC Units to Class A common stock
|
26,316,641
|
|
|
24,215,302
|
|
|
25,623,372
|
|
|
24,060,861
|
|
|
Restricted Stock
Units
|
2,063,465
|
|
|
2,245,262
|
|
|
2,101,905
|
|
|
2,054,719
|
|
|
Pro-Forma Weighted
Average Shares Outstanding (1)
|
34,388,060
|
|
|
32,158,366
|
|
|
33,603,488
|
|
|
31,695,208
|
|
|
Pre-Tax Core Net
Income (Loss) Per Share
|
$
|
(0.06)
|
|
|
$
|
(0.04)
|
|
|
$
|
(0.04)
|
|
|
$
|
0.18
|
|
|
Less: corporate
income taxes per share (2)
|
0.02
|
|
|
0.01
|
|
|
0.01
|
|
|
(0.06)
|
|
|
Core Net Income
(Loss) Per Share
|
$
|
(0.04)
|
|
|
$
|
(0.03)
|
|
|
$
|
(0.03)
|
|
|
$
|
0.12
|
|
|
(1)
|
The calculation of
Pro-Forma Weighted Average Shares Outstanding assumes the
conversion by the pre-IPO holders of up to 26,449,973 vested and
unvested LLC Units for 26,449,973 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 granted to
employees and directors during each of the periods
presented.
|
|
(2)
|
Assumes that all of
our pre-tax earnings are subject to federal, state and local
corporate income taxes. In determining corporate income taxes, we
used a combined effective corporate tax rate of 33.0%.
|
|
Exhibit D.
Reconciliation of Net Income Margin to Core Net Income
Margin
|
|
|
|
|
|
For the Three
Months Ended
December 31,
(unaudited)
|
|
For the Years
Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
Net Income
Margin
|
(77.2)
|
%
|
|
(30.8)
|
%
|
|
(26.8)
|
%
|
|
(18.5)
|
%
|
|
Reimbursable fund
startup expenses (1)
|
0.1
|
%
|
|
1.4
|
%
|
|
0.6
|
%
|
|
2.6
|
%
|
|
IPO date award
stock-based compensation (1)
|
2.1
|
%
|
|
3.4
|
%
|
|
1.6
|
%
|
|
2.6
|
%
|
|
Expenses associated
with strategic initiatives (1)
|
10.0
|
%
|
|
7.8
|
%
|
|
9.3
|
%
|
|
8.6
|
%
|
|
|
|
|
|
|
|
|
|
Other non-core
items:(1)
|
|
|
|
|
|
|
|
|
Unrealized losses on
shares of MCC
|
(0.7)
|
%
|
|
—
|
%
|
|
(0.1)
|
%
|
|
6.3
|
%
|
|
Severance
expense
|
0.9
|
%
|
|
3.7
|
%
|
|
3.2
|
%
|
|
4.8
|
%
|
|
Other
|
—
|
%
|
|
8.0
|
%
|
|
—
|
%
|
|
3.5
|
%
|
|
Provision for income
taxes (1)
|
46.8
|
%
|
|
(4.6)
|
%
|
|
9.6
|
%
|
|
0.5
|
%
|
|
Corporate income
taxes (2)
|
5.9
|
%
|
|
3.7
|
%
|
|
0.8
|
%
|
|
(3.4)
|
%
|
|
Core Net Income
Margin
|
(12.1)
|
%
|
|
(7.4)
|
%
|
|
(1.7)
|
%
|
|
7.0
|
%
|
|
(1)
|
Adjustments to Net
income (loss) 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)
|
Assumes that all of
our pre-tax earnings are subject to federal, state and local
corporate income taxes. In determining corporate income taxes, we
used a combined effective corporate tax rate of 33.0% for all of
the periods presented above.
|
|
Exhibit E.
Consolidated Balance Sheets of Medley Management
Inc.
|
|
|
|
As of December
31,
|
|
2019
|
|
2018
|
|
|
|
|
|
(in
thousands)
|
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
10,558
|
|
|
$
|
17,219
|
|
|
Investments, at fair
value
|
13,287
|
|
|
36,425
|
|
|
Management fees
receivable
|
8,104
|
|
|
10,274
|
|
|
Right-of-use assets
under operating leases
|
6,564
|
|
|
—
|
|
|
Other
assets
|
10,283
|
|
|
14,298
|
|
|
Total
Assets
|
$
|
48,796
|
|
|
$
|
78,216
|
|
|
|
|
|
|
Liabilities,
Redeemable Non-controlling Interests and Equity
|
|
|
|
|
Liabilities
|
|
|
|
|
Senior unsecured
debt, net
|
$
|
118,382
|
|
|
$
|
117,618
|
|
|
Loans payable,
net
|
10,000
|
|
|
9,892
|
|
|
Due to former
minority interest holder, net
|
8,145
|
|
|
11,402
|
|
|
Operating lease
liabilities
|
8,267
|
|
|
—
|
|
|
Accounts payable,
accrued expenses and other liabilities
|
22,835
|
|
|
26,739
|
|
|
Total
Liabilities
|
167,629
|
|
|
165,651
|
|
|
|
|
|
|
Redeemable
Non-controlling Interests
|
(748)
|
|
|
23,186
|
|
|
|
|
|
|
Equity
|
|
|
|
|
Class A common
stock
|
62
|
|
|
57
|
|
|
Class B common
stock
|
—
|
|
|
—
|
|
|
Additional paid in
capital
|
13,779
|
|
|
7,529
|
|
|
Accumulated
deficit
|
(22,960)
|
|
|
(19,618)
|
|
|
Total stockholders'
deficit, Medley Management Inc.
|
(9,119)
|
|
|
(12,032)
|
|
|
Non-controlling
interests in consolidated subsidiaries
|
(391)
|
|
|
(747)
|
|
|
Non-controlling
interests in Medley LLC
|
(108,575)
|
|
|
(97,842)
|
|
|
Total
Deficit
|
(118,085)
|
|
|
(110,621)
|
|
|
Total Liabilities,
Redeemable Non-controlling Interests and Equity
|
$
|
48,796
|
|
|
$
|
78,216
|
|
View original
content:http://www.prnewswire.com/news-releases/medley-management-inc-reports-fourth-quarter-and-full-year-2019-results-301031262.html
SOURCE Medley Management Inc.