Medley Management Inc. Reports Third Quarter 2020 Results
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
Total expenses from operations were
Total other expenses, net were
Net loss attributable to Medley Management Inc. and non-controlling interests in Medley LLC was
Pre-Tax Core Net Loss was
Results of Operations for the Nine Months Ended September 30, 2020
Total revenues were
Total expenses from operations were
Total other expenses, net were
Net loss attributable to Medley Management Inc. and non-controlling interests in Medley LLC was
Pre-Tax Core Net Income (Loss) was
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 | For the Nine Months Ended | ||||||||||||||
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 | $ | (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 |
(2) | Pre-Tax Core Net Income is calculated as Core Net Income before income taxes. Core Net Income reflects net income (loss) |
(3) | Core EBITDA is calculated as Core Net Income before interest expense, income taxes, depreciation and amortization. Please |
(4) | Core Net Income Per Share is calculated as Core Net Income, adjusted for the income tax effect of assuming that all of our |
(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 |
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 | Total | Permanent | Long-dated | |||||||||||||
(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 |
The table below presents the year-to-date roll forward of our total fee earning AUM: | |||||||||||||||||
% of Fee Earning AUM | |||||||||||||||||
Permanent | Long-dated | Total | Permanent | Long-dated | |||||||||||||
(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 |
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
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, | For the Nine Months Ended September 30, | ||||||||||||||
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 | 1 | 1,619 | 60 | 140 | |||||||||||
Net loss attributable to non-controlling interests in | (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 | |||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
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 | (1,574) | (2,796) | (13,788) | (4,078) | |||||||||||
Net loss attributable to Medley Management Inc. and non- | $ | (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, | For the Nine Months Ended September 30, | ||||||||||||||
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 | 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 |
(2) | Assumes that all of our pre-tax earnings are subject to federal, state and local corporate income taxes. In determining |
Exhibit D. Reconciliation of Net Income Margin to Core Net Income Margin | |||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||
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 |
(2) | Assumes that all our pre-tax earnings, including adjustments above, are subject to federal, state and local corporate income |
Exhibit E. Consolidated Balance Sheets of Medley Management Inc. | |||||||
As of | |||||||
September 30, 2020 | 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 |
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SOURCE Medley Management Inc.