NEW YORK, Nov. 16, 2020 /PRNewswire/ -- Medley Management
Inc. (NYSE: MDLY) ("MDLY" or the "Company") today reported its
financial results for its third quarter ended September 30, 2020. All share and per share
results reflect the 1-for-10 reverse stock split which was
effective on October 30, 2020.
Summary
- Fee earning assets under management were $1.7 billion as of September 30, 2020
- Total assets under management were $3.4
billion as of September 30,
2020
- Total revenues were $8.3 million
for the three months ended September 30,
2020 and $24.8 million for the
nine months ended September 30,
2020
- U.S. GAAP net loss per share attributable to Medley Management
Inc. was $0.19 for Q3 2020
- Core Net Loss Per Share was $0.16
for Q3 2020
Results of Operations for the Three Months Ended
September 30, 2020
Total revenues were $8.3 million
for the three months ended September 30,
2020 compared to $11.5 million
for the same period in 2019. Revenues consisted of $7.9 million of management fees and other revenue
and $0.4 million of investment
income. The decrease in total revenues was due primarily to lower
base management fees as a result of a decrease in fee earning
assets under management, which was mainly driven by a reduction in
leverage and change in portfolio valuations.
Total expenses from operations were $7.6
million for the three months ended September 30, 2020 compared to $12.5 million for the same period in 2019. The
variance was attributed to a $3.1
million decrease in compensation and benefits expense and
a$1.8 million decrease in general,
administrative and other expenses. The decrease in compensation and
benefits expense was primarily attributed to a decline in average
headcount and decline in stock compensation expense. The decrease
in other expenses was due primarily to a decrease in professional
fees, primarily driven by lower costs associated with our
terminated merger with Sierra Income Corporation ("Sierra").
General and administrative expenses also declined as a result of
headcount reduction, employees working remotely and restrictions on
travel and other expenses due to the impact of the continuing
COVID-19 pandemic.
Total other expenses, net were $2.7
million for the three months ended September 30, 2020 and consisted of $2.5 million of interest expense and $0.2 million of other expenses. Total other
expenses, net were $0.9 million for
the three months ended September 30,
2019 and consisted of $2.9
million of interest expense, $1.8
million of other income and $0.2
million of dividend income. Of the $1.8 million of other income, $2.0 million relates to an unrealized gain on
shares held of MCC. During the three months ended September 30, 2020, we did not hold any shares of
MCC, resulting in no unrealized gains or losses recorded in the
period.
Net loss attributable to Medley Management Inc. and
non-controlling interests in Medley LLC was $1.7 million for the three months ended
September 30, 2020 compared to a net
loss of $3.3 million for the same
period in 2019. Medley Management Inc.'s net loss per share was
$0.19 for the three months ended
September 30, 2020 compared to a net
loss per share of $0.86 for the same period in 2019.
Pre-Tax Core Net Loss was $1.0
million for the three months ended September 30, 2020 compared to $0.9 million for the same period in 2019. Core
Net Loss Per Share was $0.16 for the
three months ended September 30,
2020, compared to $0.18 for
the same period in 2019. Core EBITDA was $1.7 million for the three months ended
September 30, 2020 compared to
$2.1 million for the same period in
2019.
Results of Operations for the Nine Months Ended
September 30, 2020
Total revenues were $24.8 million
for the nine months ended September 30,
2020 compared to $38.2 million
for the same period in 2019. Revenues consisted of $26.1 million of management fees and other
revenue and $1.3 million of
investment loss. The decrease was due primarily to lower base
management fees as a result of a decrease in fee earning assets
under management, which was mainly driven by a decline in portfolio
valuations, a reduction in leverage, and a decline in investment
income due to equity losses and reversal of previously recorded
carried interest.
Total expenses from operations were $28.8
million for the nine months ended September 30, 2020 compared to $34.8 million for the same period in 2019. The
decrease was due primarily to a decline in compensation and
benefits as a result of lower average headcount and discretionary
bonuses, offset in part by an increase in professional fees.
Included in total expenses are costs associated with our terminated
merger of $3.5 million for each of
the nine months ended September 30,
2020 and 2019.
Total other expenses, net were $13.4
million for the nine months ended September 30, 2020 and consisted of $8.0 million of interest expense and $5.6 million of other expenses, offset in part by
$0.1 million of dividend income.
Total other expenses, net were $8.3
million for the nine months ended September 30, 2019 and consisted of $8.6 million of interest expense, $0.6 million of other expenses, offset by
$0.9 million of dividend income. The
increase of $5.6 million in other
expenses was due primarily to the revaluation of our revenue share
payable.
Net loss attributable to Medley Management Inc. and
non-controlling interests in Medley LLC was $15.9 million for the nine months ended
September 30, 2020 compared to
$4.8 million for the same period in
2019. Medley Management Inc.'s net loss per share was $3.39 for the nine months ended September 30, 2020 compared
to $1.32 for the same period in 2019.
Pre-Tax Core Net Income (Loss) was $(11.7) million for the nine months ended
September 30, 2020 compared to
$0.7 million for the same period in
2019. Core Net Loss Per Share was $1.88 for the nine months ended September 30, 2020, compared to Core Net Income
Per Share of $0.13 for the same
period in 2019. Core EBITDA was $(3.3)
million for the nine months ended September 30, 2020 compared to $9.8 million for the same period in 2019.
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
September 30,
(unaudited)
|
|
For the Nine
Months Ended
September 30,
(unaudited)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
(dollars in
thousands, except AUM, share and per share amounts)
|
|
Consolidated
Financial Data:
|
|
|
|
|
|
|
|
|
Pre-Tax (Loss)
Income
|
$
|
(2,015)
|
|
|
$
|
(1,881)
|
|
|
$
|
(17,431)
|
|
|
$
|
(4,989)
|
|
|
Net loss attributable
to Medley Management Inc. and
non-controlling interests in Medley LLC
|
$
|
(1,696)
|
|
|
$
|
(3,312)
|
|
|
$
|
(15,854)
|
|
|
$
|
(4,848)
|
|
|
Net loss per Class A
common stock
|
$
|
(0.19)
|
|
|
$
|
(0.86)
|
|
|
$
|
(3.39)
|
|
|
$
|
(1.32)
|
|
|
Net Income Margin
(1)
|
(20.4)
|
%
|
|
(28.7)
|
%
|
|
(64.0)
|
%
|
|
(12.7)
|
%
|
|
Weighted average
shares - Basic and Diluted
|
639,216
|
|
|
589,933
|
|
|
631,620
|
|
|
583,449
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Data:
|
|
|
|
|
|
|
|
|
Pre-Tax Core Net
Income (Loss) (2)
|
$
|
(1,038)
|
|
|
$
|
(926)
|
|
|
$
|
(11,748)
|
|
|
$
|
656
|
|
|
Core Net Income
(Loss) (2)
|
$
|
(837)
|
|
|
$
|
(987)
|
|
|
$
|
(10,749)
|
|
|
$
|
378
|
|
|
Core EBITDA
(3)
|
$
|
1,677
|
|
|
$
|
2,123
|
|
|
$
|
(3,259)
|
|
|
$
|
9,830
|
|
|
Core Net Income
(Loss) Per Share (4)
|
$
|
(0.16)
|
|
|
$
|
(0.18)
|
|
|
$
|
(1.88)
|
|
|
$
|
0.13
|
|
|
Core Net Income
Margin (5)
|
(7.0)
|
%
|
|
(5.4)
|
%
|
|
(26.5)
|
%
|
|
1.2
|
%
|
|
Pro-Forma Weighted
Average Shares Outstanding (6)
|
3,560,303
|
|
|
3,450,758
|
|
|
3,495,108
|
|
|
3,333,909
|
|
|
|
|
|
|
|
|
|
|
Other Data (at
period end, in millions):
|
|
|
|
|
|
|
|
|
AUM
|
$
|
3,408
|
|
|
$
|
4,271
|
|
|
$
|
3,408
|
|
|
$
|
4,271
|
|
|
Fee Earning
AUM
|
$
|
1,670
|
|
|
$
|
2,320
|
|
|
$
|
1,670
|
|
|
$
|
2,320
|
|
|
(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 terminated
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 44.0%
and 33.0% for 2020 and 2019, respectively. The rate differential in
2020 from 2019 is attributed to the tax benefit from the
CARES Act which allows for the current year carryback of
net operating losses to years in which the Federal rate was
34.0%
rather than the current rate of 21.0%. 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 2,673,516 and 2,631,658 vested and unvested LLC Units for
2,673,516 and 2,631,658 shares of Class A common stock at the
beginning of each of the periods ended 2020 and 2019, respectively,
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, June
30, 2020
|
$
|
983
|
|
|
$
|
674
|
|
|
$
|
1,657
|
|
|
59
|
%
|
|
41
|
%
|
|
Commitments
|
—
|
|
|
25
|
|
|
25
|
|
|
|
|
|
|
Capital
reduction
|
(14)
|
|
|
—
|
|
|
(14)
|
|
|
|
|
|
|
Distributions
|
—
|
|
|
(14)
|
|
|
(14)
|
|
|
|
|
|
|
Change in fund
value
|
26
|
|
|
(10)
|
|
|
16
|
|
|
|
|
|
|
Ending balance,
September 30, 2020
|
$
|
995
|
|
|
$
|
675
|
|
|
$
|
1,670
|
|
|
60
|
%
|
|
40
|
%
|
|
Total fee earning AUM
increased by $13.0 million, or 0.8%, to $1.7 billion as of
September 30, 2020 compared to June 30,
2020, due primarily to permanent reductions in leverage during the
period.
|
|
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, 2019
|
$
|
1,361
|
|
|
$
|
777
|
|
|
$
|
2,138
|
|
|
64
|
%
|
|
36
|
%
|
|
Commitments
|
(91)
|
|
|
59
|
|
|
(32)
|
|
|
|
|
|
|
Capital
reduction
|
(106)
|
|
|
—
|
|
|
(106)
|
|
|
|
|
|
|
Distributions
|
(21)
|
|
|
(90)
|
|
|
(111)
|
|
|
|
|
|
|
Change in fund
value
|
(148)
|
|
|
(71)
|
|
|
(219)
|
|
|
|
|
|
|
Ending balance,
September 30, 2020
|
$
|
995
|
|
|
$
|
675
|
|
|
$
|
1,670
|
|
|
60
|
%
|
|
40
|
%
|
|
Total fee earning AUM
decreased by $468.0 million, or 22%, to $1.7 billion as of
September 30, 2020 compared to
December 31, 2019, due primarily to changes in fund value,
distributions and debt repayments representing capital
reductions.
|
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 $3.4 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).
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
September 30, 2020.
|
Exhibit A.
Consolidated Statements of Operations of Medley Management
Inc.
|
|
|
|
|
|
For the Three
Months Ended September 30,
(unaudited)
|
|
For the Nine
Months Ended September 30,
(unaudited)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
(in thousands,
except share and per share data)
|
|
Revenues
|
|
|
|
|
|
|
|
|
Management
fees
|
$
|
6,275
|
|
|
$
|
9,607
|
|
|
$
|
19,807
|
|
|
$
|
30,728
|
|
|
Other revenues and
fees
|
1,635
|
|
|
2,621
|
|
|
6,269
|
|
|
7,731
|
|
|
Investment income
(loss):
|
|
|
|
|
|
|
|
|
Carried
interest
|
(3)
|
|
|
(142)
|
|
|
83
|
|
|
651
|
|
|
Other investment
income (loss), net
|
419
|
|
|
(550)
|
|
|
(1,384)
|
|
|
(922)
|
|
|
Total
Revenues
|
8,326
|
|
|
11,536
|
|
|
24,775
|
|
|
38,188
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
4,040
|
|
|
7,090
|
|
|
17,119
|
|
|
22,069
|
|
|
General,
administrative and other expenses
|
3,599
|
|
|
5,403
|
|
|
11,682
|
|
|
12,763
|
|
|
Total
Expenses
|
7,639
|
|
|
12,493
|
|
|
28,801
|
|
|
34,832
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense)
|
|
|
|
|
|
|
|
|
Dividend
income
|
—
|
|
|
182
|
|
|
137
|
|
|
942
|
|
|
Interest
expense
|
(2,535)
|
|
|
(2,874)
|
|
|
(7,950)
|
|
|
(8,646)
|
|
|
Other (expenses)
income, net
|
(167)
|
|
|
1,768
|
|
|
(5,592)
|
|
|
(641)
|
|
|
Total other expenses,
net
|
(2,702)
|
|
|
(924)
|
|
|
(13,405)
|
|
|
(8,345)
|
|
|
Loss before income
taxes
|
(2,015)
|
|
|
(1,881)
|
|
|
(17,431)
|
|
|
(4,989)
|
|
|
Benefit from income
taxes
|
(320)
|
|
|
(188)
|
|
|
(1,637)
|
|
|
(281)
|
|
|
Net Loss
|
(1,695)
|
|
|
(1,693)
|
|
|
(15,794)
|
|
|
(4,708)
|
|
|
Net income
attributable to redeemable non-controlling
interests and non-controlling interests in consolidated
subsidiaries
|
1
|
|
|
1,619
|
|
|
60
|
|
|
140
|
|
|
Net loss attributable
to non-controlling interests in
Medley LLC
|
(1,574)
|
|
|
(2,796)
|
|
|
(13,788)
|
|
|
(4,078)
|
|
|
Net Loss Attributable
to Medley Management Inc.
|
$
|
(122)
|
|
|
$
|
(516)
|
|
|
$
|
(2,066)
|
|
|
$
|
(770)
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Share
of Class A Common Stock:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.19)
|
|
|
$
|
(0.86)
|
|
|
$
|
(3.39)
|
|
|
$
|
(1.32)
|
|
|
Diluted
|
$
|
(0.19)
|
|
|
$
|
(0.86)
|
|
|
$
|
(3.39)
|
|
|
$
|
(1.32)
|
|
|
Weighted average
shares outstanding - Basic and Diluted
|
639,216
|
|
|
589,933
|
|
|
631,620
|
|
|
583,449
|
|
|
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 September 30,
(unaudited)
|
|
For the Nine
Months Ended September 30,
(unaudited)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
(in
thousands)
|
|
Net loss attributable
to Medley Management Inc.
|
$
|
(122)
|
|
|
$
|
(516)
|
|
|
$
|
(2,066)
|
|
|
$
|
(770)
|
|
|
Net loss attributable
to non-controlling interests in
Medley LLC
|
(1,574)
|
|
|
(2,796)
|
|
|
(13,788)
|
|
|
(4,078)
|
|
|
Net loss attributable
to Medley Management Inc. and non-
controlling interests in Medley LLC
|
$
|
(1,696)
|
|
|
$
|
(3,312)
|
|
|
$
|
(15,854)
|
|
|
$
|
(4,848)
|
|
|
Reimbursable fund
startup expenses
|
—
|
|
|
22
|
|
|
1
|
|
|
283
|
|
|
IPO date award
stock-based compensation
|
—
|
|
|
282
|
|
|
—
|
|
|
555
|
|
|
Expenses associated
with strategic initiatives
|
992
|
|
|
2,070
|
|
|
3,519
|
|
|
3,486
|
|
|
Other non-core
items:
|
|
|
|
|
|
|
|
|
Severance expense
|
(14)
|
|
|
200
|
|
|
2,103
|
|
|
1,462
|
|
|
Other
|
—
|
|
|
—
|
|
|
120
|
|
|
—
|
|
|
Income tax expense on
adjustments
|
(119)
|
|
|
(249)
|
|
|
(638)
|
|
|
(560)
|
|
|
Core Net Income
(Loss)
|
$
|
(837)
|
|
|
$
|
(987)
|
|
|
$
|
(10,749)
|
|
|
$
|
378
|
|
|
Interest
expense
|
2,535
|
|
|
2,874
|
|
|
7,950
|
|
|
8,647
|
|
|
Income
taxes
|
(201)
|
|
|
61
|
|
|
(999)
|
|
|
278
|
|
|
Depreciation and
amortization
|
180
|
|
|
175
|
|
|
539
|
|
|
527
|
|
|
Core
EBITDA
|
$
|
1,677
|
|
|
$
|
2,123
|
|
|
$
|
(3,259)
|
|
|
$
|
9,830
|
|
|
Exhibit C.
Calculation of Core Net Income (Loss) Per Share
|
|
|
|
|
|
For the Three
Months Ended September 30,
(unaudited)
|
|
For the Nine
Months Ended September 30,
(unaudited)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
(in thousands, except
share and per share amounts)
|
|
Numerator
|
|
|
|
|
|
|
|
|
Core Net Income
(Loss)
|
$
|
(837)
|
|
|
$
|
(987)
|
|
|
$
|
(10,749)
|
|
|
$
|
378
|
|
|
Add: Income
taxes
|
(201)
|
|
|
61
|
|
|
(999)
|
|
|
278
|
|
|
Pre-Tax Core Net
Income (loss)
|
$
|
(1,038)
|
|
|
$
|
(926)
|
|
|
$
|
(11,748)
|
|
|
$
|
656
|
|
|
|
|
|
|
|
|
|
|
Denominator
|
|
|
|
|
|
|
|
|
Class A common
stock
|
639,216
|
|
|
589,933
|
|
|
631,620
|
|
|
583,449
|
|
|
Conversion of LLC
Units and restricted LLC Units to
Class A common stock
|
2,673,516
|
|
|
2,631,664
|
|
|
2,655,031
|
|
|
2,538,974
|
|
|
Restricted Stock
Units
|
247,571
|
|
|
229,161
|
|
|
208,457
|
|
|
211,486
|
|
|
Pro-Forma Weighted
Average Shares Outstanding (1)
|
3,560,303
|
|
|
3,450,758
|
|
|
3,495,108
|
|
|
3,333,909
|
|
|
Pre-Tax Core Net
Income (Loss) Per Share
|
$
|
(0.29)
|
|
|
$
|
(0.27)
|
|
|
$
|
(3.36)
|
|
|
$
|
0.20
|
|
|
Less: corporate
income taxes per share (2)
|
0.13
|
|
|
0.09
|
|
|
1.48
|
|
|
(0.07)
|
|
|
Core Net Income
(Loss) Per Share
|
$
|
(0.16)
|
|
|
$
|
(0.18)
|
|
|
$
|
(1.88)
|
|
|
$
|
0.13
|
|
|
(1)
|
The calculation of
Pro-Forma Weighted Average Shares Outstanding assumes the
conversion by the pre-IPO holders of up
to 2,673,516 and 2,631,658 vested and unvested LLC Units for
2,673,516 and 2,631,658 shares of Class A common stock at
the beginning of each of the periods ended 2020 and 2019,
respectively, 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 44.0% and 33.0% for 2020 and 2019, respectively.
The rate differential in 2020 from 2019 is attributed to the tax
benefit from the CARES Act which allows for the current
year
carryback of net operating losses to years in which the
Federal rate was 34.0% rather than the current rate of
21.0%.
|
|
Exhibit D.
Reconciliation of Net Income Margin to Core Net Income
Margin
|
|
|
|
|
|
For the Three
Months Ended
September 30,
(unaudited)
|
|
For the Nine
Months Ended
September 30,
(unaudited)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
Net Income
Margin
|
(20.4)
|
%
|
|
(28.7)
|
%
|
|
(64.0)
|
%
|
|
(12.7)
|
%
|
|
Reimbursable fund
startup expenses (1)
|
—
|
%
|
|
0.2
|
%
|
|
—
|
%
|
|
0.7
|
%
|
|
IPO date award
stock-based compensation (1)
|
—
|
%
|
|
2.4
|
%
|
|
—
|
%
|
|
1.5
|
%
|
|
Expenses associated
with strategic initiatives (1)
|
11.9
|
%
|
|
17.9
|
%
|
|
14.2
|
%
|
|
9.1
|
%
|
|
Other non-core items:
(1)
|
|
|
|
|
|
|
|
|
Severance
expense
|
(0.2)
|
%
|
|
1.7
|
%
|
|
8.5
|
%
|
|
3.8
|
%
|
|
Other
|
—
|
%
|
|
—
|
%
|
|
0.5
|
%
|
|
—
|
%
|
|
Provision for income
taxes (1)
|
(3.8)
|
%
|
|
(1.6)
|
%
|
|
(6.6)
|
%
|
|
(0.7)
|
%
|
|
Corporate income
taxes (2)
|
5.5
|
%
|
|
2.7
|
%
|
|
20.9
|
%
|
|
(0.6)
|
%
|
|
Core Net Income
Margin
|
(7.0)
|
%
|
|
(5.4)
|
%
|
|
(26.5)
|
%
|
|
1.2
|
%
|
|
(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 our
pre-tax earnings, including adjustments above, are subject to
federal, state and local corporate income
taxes. In determining corporate income taxes, we used a combined
effective corporate tax rate of 44.0% and 33.0% for the
three and nine months ended September 30, 2020 and 2019,
respectively. The rate differential in 2020 from 2019 is
attributed
to the tax benefit from the CARES Act which allows for the current
year carryback of net operating losses to years in which
the Federal rate was 34.0% rather than the current rate of
21.0%.
|
|
Exhibit E.
Consolidated Balance Sheets of Medley Management
Inc.
|
|
|
|
As
of
|
|
September 30,
2020
(unaudited)
|
|
December 31,
2019
|
|
|
|
|
|
(in
thousands)
|
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
6,048
|
|
|
$
|
10,558
|
|
|
Investments, at fair
value
|
9,637
|
|
|
13,287
|
|
|
Management fees
receivable
|
5,799
|
|
|
8,104
|
|
|
Right-of-use assets
under operating leases
|
5,206
|
|
|
6,564
|
|
|
Other
assets
|
12,021
|
|
|
10,283
|
|
|
Total
Assets
|
$
|
38,711
|
|
|
$
|
48,796
|
|
|
|
|
|
|
Liabilities,
Redeemable Non-controlling Interests and Equity
|
|
|
|
|
Liabilities
|
|
|
|
|
Senior unsecured
debt, net
|
$
|
118,958
|
|
|
$
|
118,382
|
|
|
Loans payable,
net
|
10,000
|
|
|
10,000
|
|
|
Due to former
minority interest holder, net
|
7,233
|
|
|
8,145
|
|
|
Operating lease
liabilities
|
7,420
|
|
|
8,267
|
|
|
Accounts payable,
accrued expenses and other liabilities
|
27,080
|
|
|
22,835
|
|
|
Total
Liabilities
|
170,691
|
|
|
167,629
|
|
|
|
|
|
|
Redeemable
Non-controlling Interests
|
—
|
|
|
(748)
|
|
|
|
|
|
|
Equity
|
|
|
|
|
Class A common
stock
|
7
|
|
|
6
|
|
|
Class B common
stock
|
—
|
|
|
—
|
|
|
Additional paid in
capital
|
16,657
|
|
|
13,835
|
|
|
Accumulated
deficit
|
(24,796)
|
|
|
(22,960)
|
|
|
Total stockholders'
deficit, Medley Management Inc.
|
(8,132)
|
|
|
(9,119)
|
|
|
Non-controlling
interests in consolidated subsidiaries
|
(477)
|
|
|
(391)
|
|
|
Non-controlling
interests in Medley LLC
|
(123,371)
|
|
|
(108,575)
|
|
|
Total
Deficit
|
(131,980)
|
|
|
(118,085)
|
|
|
Total Liabilities,
Redeemable Non-controlling Interests and Equity
|
$
|
38,711
|
|
|
$
|
48,796
|
|
View original
content:http://www.prnewswire.com/news-releases/medley-management-inc-reports-third-quarter-2020-results-301173123.html
SOURCE Medley Management Inc.