NEW YORK, March 31, 2021 /PRNewswire/ -- Medley Management
Inc. (NYSE: MDLY) today reported its financial results for its
fourth quarter and year ended December 31,
2020.
Summary
- Fee earning assets under management were $1.3 billion as of December 31, 2020
- Total assets under management were $2.9
billion as of December 31,
2020
- Total revenues were $8.5 million
for the three months ended December 31,
2020 and $33.3 million for the
year ended December 31, 2020
- U.S. GAAP net loss per share attributable to Medley Management
Inc. was $0.88 for Q4 2020 and
$4.26 for the year ended December 31, 2020
- Core Net Loss Per Share was $0.24
for Q4 2020 and $2.12 for the year
ended December 31, 2020
Results of Operations for the Three Months Ended
December 31, 2020
Total revenues were $8.5 million
for the three months ended December 31,
2020 compared to $10.7 million
for the same period in 2019. 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, offset
in part by an increase in investment income.
Total expenses from operations were $9.2
million for the three months ended December 31, 2020 compared to $11.3 million for the same period in 2019. The
variance was attributed to a $2.5 million decrease
in compensation and benefits expense offset by a $0.3 million increase in general,
administrative and other expenses. The decrease in compensation and
benefits expense was primarily attributed to a decline in average
headcount, stock compensation expense and discretionary
bonuses. The increase in other expenses was due primarily to an
increase in professional fees.
Total expenses, net were $2.1 million for the
three months ended December 31, 2020 and consisted
of $2.5 million of interest expense, $0.4 million of other income and less
than $0.1 million of dividend income.
Total other expenses, net were $6.4 million for the three
months ended December 31, 2019 and consisted of $2.9
million of interest expense, $3.8 million of other
expenses and $0.2 million of dividend income. Of
the $3.8 million of other
expenses, $3.6 million was related to an unrealized
loss on shares held of MCC which were no longer held by us
during the year ended December 31, 2020.
Net loss attributable to Medley Management Inc. and
non-controlling interests in Medley LLC was $2.6 million for the three months ended
December 31, 2020 compared to a net
loss $8.2 million for the same period
in 2019. Medley Management Inc.'s net loss per share was
$0.88 for the three months ended
December 31, 2020 compared to a net
loss per share of $4.59 for the same
period in 2019.
Pre-Tax Core Net Loss was $1.5 million for the three months ended
December 31, 2020 compared to
$1.9 million for the same period
in 2019. Core Net Loss Per Share was $0.24 for the three months ended December 31, 2020, compared to $0.37 for the same period in 2019. Core EBITDA
was $1.2 million for the three
months ended December 31,
2020 compared to $1.1 million for the same period in
2019.
Results of Operations for the Year Ended December 31, 2020
Total revenues were $33.3 million
for the year ended December 31,
2020 compared to $48.8 million in 2019. 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 $38.0
million for the year ended December
31, 2020 compared to $46.1
million in 2019. The variance was attributed to
a $7.4 million decrease in compensation and benefits
expense and a $0.7 million decrease in general,
administrative and other expenses. The decrease in compensation and
benefits expense was primarily attributed to a decline in average
headcount, stock compensation expense and discretionary
bonuses. The decrease in other expenses was due primarily to a
decrease in general and administrative expenses 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 expenses, net were $15.5 million for the year ended
December 31, 2020, and consisted
of $10.5 million of interest expense
and $5.2 million of other expenses, net, offset
in part by $0.2 million of dividend income. Total
other expenses, net were $14.8 million for the year
ended December 31, 2019 and consisted
of $11.5 million of interest
expense, $4.4 million of other expenses, offset in
part by $1.1 million of dividend income. The increase
of $0.7 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 $18.5 million for the year ended
December 31, 2020 compared to a
net loss of $13.1 million in
2019. Medley Management Inc.'s net loss per share was $4.26 for the year ended December 31, 2020 compared to net loss per
share of $6.00 in 2019.
Pre-Tax Core Net Loss was $13.3
million for the year ended December
31, 2020 as compared to Pre-Tax Core Net Loss of
$1.3 million in 2019. Core Net Loss
Per Share was $2.12 for the year
ended December 31, 2020
as compared to $0.25 in 2019. Core EBITDA was
($2.1) million for the year
ended December 31, 2020 as compared
to $10.9 million 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
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Key Performance
Indicators:
|
|
|
|
For the Three
Months
Ended December 31,
(unaudited)
|
|
|
For the Years
Ended
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
|
(dollars in
thousands, except AUM, share and per share amounts)
|
|
|
Consolidated
Financial Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-Tax (Loss)
Income
|
|
$
|
(2,753)
|
|
|
$
|
(7,070)
|
|
|
$
|
(20,184)
|
|
|
$
|
(12,060)
|
|
|
Net loss attributable
to Medley Management Inc. and non-
controlling interests in Medley LLC
|
|
$
|
(2,600)
|
|
|
$
|
(8,225)
|
|
|
$
|
(18,454)
|
|
|
$
|
(13,074)
|
|
|
Net loss per Class A
common stock
|
|
$
|
(0.88)
|
|
|
$
|
(4.59)
|
|
|
$
|
(4.26)
|
|
|
$
|
(6.00)
|
|
|
Net (Loss) Income
Margin (1)
|
|
|
(30.7)
|
%
|
|
|
(77.2)
|
%
|
|
|
(55.7)
|
%
|
|
|
(26.8)
|
%
|
|
Weighted average
shares - Basic and Diluted
|
|
|
678,288
|
|
|
|
600,795
|
|
|
|
643,351
|
|
|
|
578,821
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-Tax Core Net
(Loss) Income (2)
|
|
$
|
(1,510)
|
|
|
$
|
(1,910)
|
|
|
$
|
(13,258)
|
|
|
$
|
(1,254)
|
|
|
Core Net (Loss) Income
(2)
|
|
$
|
(1,362)
|
|
|
$
|
(7,030)
|
|
|
$
|
(12,111)
|
|
|
$
|
(6,652)
|
|
|
Core EBITDA
(3)
|
|
$
|
1,206
|
|
|
$
|
1,115
|
|
|
$
|
(2,053)
|
|
|
$
|
10,945
|
|
|
Core Net (Loss) Income
Per Share (4)
|
|
$
|
(0.24)
|
|
|
$
|
(0.37)
|
|
|
$
|
(2.12)
|
|
|
$
|
(0.25)
|
|
|
Core Net (Loss) Income
Margin (5)
|
|
|
(10.0)
|
%
|
|
|
(12.1)
|
%
|
|
|
(22.6)
|
%
|
|
|
(1.7)
|
%
|
|
Pro-Forma Weighted
Average Shares Outstanding (6)
|
|
|
3,539,023
|
|
|
|
3,438,806
|
|
|
|
3,506,147
|
|
|
|
3,360,349
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Data (at
period end, in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM
|
|
$
|
2,859
|
|
|
$
|
4,122
|
|
|
$
|
2,859
|
|
|
$
|
4,122
|
|
|
Fee Earning
AUM
|
|
$
|
1,325
|
|
|
$
|
2,138
|
|
|
$
|
1,325
|
|
|
$
|
2,138
|
|
|
|
|
(1)
|
Net (Loss) Income
Margin equals net loss attributable to Medley Management Inc.
and non-controlling interests in Medley LLC
divided by total revenue.
|
|
|
|
(2)
|
Pre-Tax Core Net
(Loss) Income is calculated as Core Net Income before income taxes.
Core Net (Loss) Income reflects net 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
(Loss)
Income to Net 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 (Loss) Income before interest expense,
income taxes, depreciation and amortization.
Please refer to the reconciliation of Core EBITDA to Net
loss attributable to Medley Management Inc. and
non-controlling interests
in Medley LLC in Exhibit B for additional details.
|
|
|
|
(4)
|
Core Net (Loss)
Income Per Share is calculated as Core Net (Loss) 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% for the three
months and year ended December 31, 2020 and 33.0% for the three
months and year ended December 31, 2019. Please refer
to the calculation of Core Net (Loss) Income Per Share in Exhibit C
for additional details.
|
|
|
|
(5)
|
Core Net (Loss)
Income Margin equals Core Net (Loss) 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 2,686,848 vested and
unvested LLC Units for 2,686,848 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
|
|
|
Long-dated
|
|
|
|
|
|
|
Permanent
|
|
|
Long-dated
|
|
|
|
Capital
|
|
|
Private
Funds
|
|
|
|
|
|
|
Capital
|
|
|
Private
Funds
|
|
|
|
Vehicles
|
|
|
and
SMAs
|
|
|
Total
|
|
|
Vehicles
|
|
|
and
SMAs
|
|
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance,
September 30, 2020
|
|
$
|
995
|
|
|
$
|
675
|
|
|
$
|
1,670
|
|
|
|
60
|
%
|
|
|
40
|
%
|
|
Commitments
|
|
|
(35)
|
|
|
|
33
|
|
|
|
(2)
|
|
|
|
|
|
|
|
|
|
|
Capital
reduction
|
|
|
(306)
|
|
|
|
—
|
|
|
|
(306)
|
|
|
|
|
|
|
|
|
|
|
Distributions
|
|
|
(3)
|
|
|
|
(67)
|
|
|
|
(70)
|
|
|
|
|
|
|
|
|
|
|
Change in fund
value
|
|
|
27
|
|
|
|
6
|
|
|
|
33
|
|
|
|
|
|
|
|
|
|
|
Ending balance,
December 30, 2020
|
|
|
678
|
|
|
$
|
647
|
|
|
$
|
1,325
|
|
|
|
51
|
%
|
|
|
49
|
%
|
Total fee earning AUM decreased by $345.0
million, or 21%, to $1.3 billion as of December 31, 2020 compared to September 30, 2020, 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, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Fee Earning
AUM
|
|
|
|
Permanent
|
|
|
Long-dated
|
|
|
|
|
|
|
Permanent
|
|
|
Long-dated
|
|
|
|
Capital
|
|
|
Private
Funds
|
|
|
|
|
|
|
Capital
|
|
|
Private
Funds
|
|
|
|
Vehicles
|
|
|
and
SMAs
|
|
|
Total
|
|
|
Vehicles
|
|
|
and
SMAs
|
|
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance,
December 31, 2019
|
|
$
|
1,361
|
|
|
$
|
777
|
|
|
$
|
2,138
|
|
|
|
64
|
%
|
|
|
36
|
%
|
|
Commitments
|
|
|
(126)
|
|
|
|
92
|
|
|
|
(34)
|
|
|
|
|
|
|
|
|
|
|
Capital
reduction
|
|
|
(412)
|
|
|
|
—
|
|
|
|
(412)
|
|
|
|
|
|
|
|
|
|
|
Distributions
|
|
|
(24)
|
|
|
|
(157)
|
|
|
|
(181)
|
|
|
|
|
|
|
|
|
|
|
Change in fund
value
|
|
|
(121)
|
|
|
|
(65)
|
|
|
|
(186)
|
|
|
|
|
|
|
|
|
|
|
Ending balance,
December 31, 2020
|
|
$
|
678
|
|
|
$
|
647
|
|
|
$
|
1,325
|
|
|
|
51
|
%
|
|
|
49
|
%
|
Total fee earning AUM decreased by $813.0
million, or 38%, to $1.3
billion as of December 31,
2020 compared to December 31,
2019, 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
has $2.9 billion of assets under management in one
business development company, Sierra Income Corporation, and
several private investment vehicles. Over the past 19 years,
Medley has provided capital to over 450 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
(the "SEC"), 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, 2020.
Such forward-looking statements include, without limitation: the
impact of COVID19 on our business; the ability of the Company to
continue as a going concern; the timing and outcome of the SEC's
investigation and pending Chapter 11 proceedings; Medley LLC's
ability to repay, refinance or restructure its debt; general
volatility of the capital markets and the market price of our
common stock; availability, terms and deployment of capital; and
availability of qualified personnel. These and other risk factors
are more fully discussed in the Company's filings with the SEC.
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, 2020.
|
|
Exhibit A.
Consolidated Statements of Operations of Medley Management
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended December 31,
|
|
|
For the Years
Ended
December 31,
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
|
(in thousands, except
share and per share data)
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management
fees
|
|
$
|
6,328
|
|
|
$
|
8,745
|
|
|
$
|
26,135
|
|
|
$
|
39,473
|
|
|
Other revenues and
fees
|
|
|
1,598
|
|
|
|
1,972
|
|
|
|
7,867
|
|
|
|
9,703
|
|
|
Investment
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carried
interest
|
|
|
254
|
|
|
|
168
|
|
|
|
337
|
|
|
|
819
|
|
|
Other investment loss,
net
|
|
|
297
|
|
|
|
(231)
|
|
|
|
(1,087)
|
|
|
|
(1,154)
|
|
|
Total
Revenues
|
|
|
8,477
|
|
|
|
10,654
|
|
|
|
33,252
|
|
|
|
48,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
|
4,401
|
|
|
|
6,856
|
|
|
|
21,520
|
|
|
|
28,925
|
|
|
General,
administrative and other expenses
|
|
|
4,755
|
|
|
|
4,423
|
|
|
|
16,437
|
|
|
|
17,186
|
|
|
Total
Expenses
|
|
|
9,156
|
|
|
|
11,279
|
|
|
|
37,957
|
|
|
|
46,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend
income
|
|
|
22
|
|
|
|
177
|
|
|
|
159
|
|
|
|
1,119
|
|
|
Interest
expense
|
|
|
(2,537)
|
|
|
|
(2,851)
|
|
|
|
(10,487)
|
|
|
|
(11,497)
|
|
|
Other expenses,
net
|
|
|
441
|
|
|
|
(3,771)
|
|
|
|
(5,151)
|
|
|
|
(4,412)
|
|
|
Total other expenses,
net
|
|
|
(2,074)
|
|
|
|
(6,445)
|
|
|
|
(15,479)
|
|
|
|
(14,790)
|
|
|
Loss before income
taxes
|
|
|
(2,753)
|
|
|
|
(7,070)
|
|
|
|
(20,184)
|
|
|
|
(12,060)
|
|
|
(Benefit from)
provision for income taxes
|
|
|
(319)
|
|
|
|
4,991
|
|
|
|
(1,956)
|
|
|
|
4,710
|
|
|
Net Loss
|
|
|
(2,434)
|
|
|
|
(12,061)
|
|
|
|
(18,228)
|
|
|
|
(16,770)
|
|
|
Net income (loss)
attributable to redeemable non-controlling interests and
non-controlling
interests in consolidated subsidiaries
|
|
|
166
|
|
|
|
(3,836)
|
|
|
|
226
|
|
|
|
(3,696)
|
|
|
Net loss attributable
to non-controlling interests in Medley LLC
|
|
|
(2,002)
|
|
|
|
(5,617)
|
|
|
|
(15,790)
|
|
|
|
(9,695)
|
|
|
Net Loss Attributable
to Medley Management Inc.
|
|
$
|
(598)
|
|
|
$
|
(2,608)
|
|
|
$
|
(2,664)
|
|
|
$
|
(3,379)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Share
of Class A Common Stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.88)
|
|
|
$
|
(4.59)
|
|
|
$
|
(4.26)
|
|
|
$
|
(6.00)
|
|
|
Diluted
|
|
$
|
(0.88)
|
|
|
$
|
(4.59)
|
|
|
$
|
(4.26)
|
|
|
$
|
(6.00)
|
|
|
Weighted average
shares outstanding - Basic and Diluted
|
|
|
678,288
|
|
|
|
600,795
|
|
|
|
643,351
|
|
|
|
587,821
|
|
|
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,
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to Medley Management Inc.
|
|
$
|
(598)
|
|
|
$
|
(2,608)
|
|
|
$
|
(2,664)
|
|
|
$
|
(3,379)
|
|
|
Net loss attributable
to non-controlling interests in Medley LLC
|
|
|
(2,002)
|
|
|
|
(5,617)
|
|
|
|
(15,790)
|
|
|
|
(9,695)
|
|
|
Net loss attributable
to Medley Management Inc. and non-controlling interests in Medley
LLC
|
|
$
|
(2,600)
|
|
|
$
|
(8,225)
|
|
|
$
|
(18,454)
|
|
|
$
|
(13,074)
|
|
|
Reimbursable fund
startup expenses
|
|
|
—
|
|
|
|
6
|
|
|
|
1
|
|
|
|
289
|
|
|
IPO date award
stock-based compensation
|
|
|
—
|
|
|
|
222
|
|
|
|
—
|
|
|
|
777
|
|
|
Expenses associated
with strategic initiatives
|
|
|
1,409
|
|
|
|
1,070
|
|
|
|
4,928
|
|
|
|
4,556
|
|
|
Other non-core
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized
loss on shares of MCC
|
|
|
—
|
|
|
|
(70)
|
|
|
|
—
|
|
|
|
(70)
|
|
|
Severance
expense
|
|
|
—
|
|
|
|
96
|
|
|
|
2,103
|
|
|
|
1,558
|
|
|
Other
|
|
|
—
|
|
|
|
—
|
|
|
|
120
|
|
|
|
—
|
|
|
Income tax expense on
adjustments
|
|
|
(171)
|
|
|
|
(129)
|
|
|
|
(809)
|
|
|
|
(688)
|
|
|
Core Net Income
(Loss)
|
|
$
|
(1,362)
|
|
|
$
|
(7,030)
|
|
|
$
|
(12,111)
|
|
|
$
|
(6,652)
|
|
|
Interest
expense
|
|
|
2,537
|
|
|
|
2,850
|
|
|
|
10,487
|
|
|
|
11,497
|
|
|
Income
taxes
|
|
|
(148)
|
|
|
|
5,120
|
|
|
|
(1,147)
|
|
|
|
5,398
|
|
|
Depreciation and
amortization
|
|
|
179
|
|
|
|
175
|
|
|
|
718
|
|
|
|
702
|
|
|
Core
EBITDA
|
|
$
|
1,206
|
|
|
$
|
1,115
|
|
|
$
|
(2,053)
|
|
|
$
|
10,945
|
|
|
Exhibit C.
Calculation of Core Net Income (Loss) Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months
Ended December 31,
(unaudited)
|
|
|
For the Years
Ended December 31,
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
|
(in thousands, except
share and per share amounts)
|
|
|
Numerator
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Net Income
(Loss)
|
|
$
|
(1,362)
|
|
|
$
|
(7,030)
|
|
|
$
|
(12,111)
|
|
|
$
|
(6,652)
|
|
|
Add: Income
taxes
|
|
|
(148)
|
|
|
|
5,120
|
|
|
|
(1,147)
|
|
|
|
5,398
|
|
|
Pre-Tax Core Net
Income (loss)
|
|
$
|
(1,510)
|
|
|
$
|
(1,910)
|
|
|
$
|
(13,258)
|
|
|
$
|
(1,254)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common
stock
|
|
|
678,288
|
|
|
|
600,795
|
|
|
|
643,351
|
|
|
|
587,821
|
|
|
Conversion of LLC
Units and restricted LLC Units to Class A common stock
|
|
|
2,673,516
|
|
|
|
2,631,664
|
|
|
|
2,659,678
|
|
|
|
2,562,337
|
|
|
Restricted Stock
Units
|
|
|
187,219
|
|
|
|
206,347
|
|
|
|
203,118
|
|
|
|
210,191
|
|
|
Pro-Forma Weighted
Average Shares Outstanding (1)
|
|
|
3,539,023
|
|
|
|
3,438,806
|
|
|
|
3,506,147
|
|
|
|
3,360,349
|
|
|
Pre-Tax Core Net
Income (Loss) Per Share
|
|
$
|
(0.43)
|
|
|
$
|
(0.56)
|
|
|
$
|
(3.78)
|
|
|
$
|
(0.37)
|
|
|
Less: corporate income
taxes per share (2)
|
|
|
0.19
|
|
|
|
0.18
|
|
|
|
1.66
|
|
|
|
0.12
|
|
|
Core Net Income
(Loss) Per Share
|
|
$
|
(0.24)
|
|
|
$
|
(0.37)
|
|
|
$
|
(2.12)
|
|
|
$
|
(0.25)
|
|
|
(1)
|
The calculation of
Pro-Forma Weighted Average Shares Outstanding assumes the
conversion by the pre-IPO holders of up
to 2,686,848 vested and unvested LLC Units for 2,686,848 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
44.0% for the three months and year ended December 31, 2020
and 33.0% for the three months and year ended December 31,
2019
|
|
Exhibit D.
Reconciliation of Net Income Margin to Core Net Income
Margin
|
|
|
|
For the Three
Months
Ended December 31,
|
|
|
For the Years
Ended December 31,
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
Margin
|
|
|
(30.9)
|
%
|
|
|
(77.2)
|
%
|
|
|
(55.7)
|
%
|
|
|
(26.8)
|
%
|
|
Reimbursable fund
startup expenses (1)
|
|
|
—
|
%
|
|
|
0.1
|
%
|
|
|
—
|
%
|
|
|
0.6
|
%
|
|
IPO date award
stock-based compensation (1)
|
|
|
—
|
%
|
|
|
2.1
|
%
|
|
|
—
|
%
|
|
|
1.6
|
%
|
|
Expenses associated
with strategic initiatives (1)
|
|
|
16.7
|
%
|
|
|
10.0
|
%
|
|
|
14.8
|
%
|
|
|
9.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-core
items:(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized losses on
shares of MCC
|
|
|
—
|
%
|
|
|
(0.7)
|
%
|
|
|
—
|
%
|
|
|
(0.1)
|
%
|
|
Severance
expense
|
|
|
—
|
%
|
|
|
0.9
|
%
|
|
|
6.3
|
%
|
|
|
3.2
|
%
|
|
Other
|
|
|
—
|
%
|
|
|
—
|
%
|
|
|
0.4
|
%
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes (1)
|
|
|
(3.8)
|
%
|
|
|
46.8
|
%
|
|
|
(5.9)
|
%
|
|
|
9.6
|
%
|
|
Corporate income taxes
(2)
|
|
|
7.9
|
%
|
|
|
5.9
|
%
|
|
|
17.6
|
%
|
|
|
0.9
|
%
|
|
Core Net Income
Margin
|
|
|
(10.0)
|
%
|
|
|
(12.1)
|
%
|
|
|
(22.6)
|
%
|
|
|
(1.7)
|
%
|
|
|
|
(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 44.0% for the three months and year ended
December 31, 2020 and 33.0% for the three months and year ended
December 31, 2019
|
|
Exhibit E.
Consolidated Balance Sheets of Medley Management
Inc.
|
|
|
|
As of December
31,
|
|
|
|
2020
|
|
|
2019
|
|
|
|
(in
thousands)
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
3,862
|
|
|
$
|
10,558
|
|
|
Investments, at fair
value
|
|
|
9,498
|
|
|
|
13,287
|
|
|
Management fees
receivable
|
|
|
5,870
|
|
|
|
8,104
|
|
|
Right-of-use assets
under operating leases
|
|
|
4,731
|
|
|
|
6,564
|
|
|
Other
assets
|
|
|
11,592
|
|
|
|
10,283
|
|
|
Total
Assets
|
|
$
|
35,553
|
|
|
$
|
48,796
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities,
Redeemable Non-controlling Interests and Equity
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Senior unsecured debt,
net
|
|
$
|
119,151
|
|
|
$
|
118,382
|
|
|
Loans payable,
net
|
|
|
10,000
|
|
|
|
10,000
|
|
|
Due to former minority
interest holder, net
|
|
|
7,022
|
|
|
|
8,145
|
|
|
Operating lease
liabilities
|
|
|
6,019
|
|
|
|
8,267
|
|
|
Accounts payable,
accrued expenses and other liabilities
|
|
|
27,031
|
|
|
|
22,835
|
|
|
Total
Liabilities
|
|
|
169,223
|
|
|
|
167,629
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
Non-controlling Interests
|
|
|
—
|
|
|
|
(748)
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Class A common
stock
|
|
|
7
|
|
|
|
6
|
|
|
Class B common
stock
|
|
|
—
|
|
|
|
—
|
|
|
Additional paid in
capital
|
|
|
17,645
|
|
|
|
13,835
|
|
|
Accumulated
deficit
|
|
|
(25,394)
|
|
|
|
(22,960)
|
|
|
Total stockholders'
deficit, Medley Management Inc.
|
|
|
(7,742)
|
|
|
|
(9,119)
|
|
|
Non-controlling
interests in consolidated subsidiaries
|
|
|
(555)
|
|
|
|
(391)
|
|
|
Non-controlling
interests in Medley LLC
|
|
|
(125,373)
|
|
|
|
(108,575)
|
|
|
Total
Deficit
|
|
|
(133,670)
|
|
|
|
(118,085)
|
|
|
Total Liabilities,
Redeemable Non-controlling Interests and Equity
|
|
$
|
35,553
|
|
|
$
|
48,796
|
|
View original
content:http://www.prnewswire.com/news-releases/medley-management-inc-reports-fourth-quarter-and-full-year-2020-results-301260028.html
SOURCE Medley Management Inc.