NEW YORK, Nov. 14, 2019 /PRNewswire/ -- Medley
Management Inc. (NYSE: MDLY) today reported its financial results
for its third quarter ended September 30,
2019.
Highlights
- Fee earning assets under management were $2.3 billion as of September 30, 2019
- Total assets under management were $4.3
billion as of September 30,
2019
- Total revenues were $11.5 million
for the three months ended September 30,
2019 and $38.2 million for the
nine months ended September 30,
2019
- U.S. GAAP net loss per share attributable to Medley Management
Inc. was $0.09 for Q3 2019
- Core Net Loss Per Share was $0.02
for Q3 2019
- The board of directors did not declare a dividend for this
quarter
Results of Operations for the Three Months Ended
September 30, 2019
Total revenues were $11.5 million
for the three months ended September 30,
2019 compared to $14.4 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 $12.5
million for each of the three months ended September 30, 2019 and 2018. Compensation and
benefits increased by $0.8 million to
$7.1 million for the three months
ended September 30, 2019 as compared
to the same period in 2018. This increase was offset by a
decrease in professional fees and employee recruiting related
expenses. Included in total expenses are costs associated with our
pending merger of $2.1 million for
each of the three months ended September 30,
2019 and 2018.
Total other income (expenses), net were $(0.9) million for the three months ended
September 30, 2019 compared to
$1.0 million for the same period in
2018. This unfavorable variance was due primarily to a $1.9 million unrealized gain on our investment in
shares of MCC during the three months ended September 30, 2019 as compared to a $2.7 million unrealized gain recorded during the
same period in 2018, as well as, an $0.8
million reduction in dividend income from our investment in
shares of MCC during the three months ended September 30, 2019 as compared to the same period
in 2018. Such unrealized gains 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 $3.3 million for the three months ended
September 30, 2019 compared to a net
loss $1.4 million for the same period
in 2018. Medley Management Inc.'s net loss per share was
$0.09 for the three months ended
September 30, 2019 compared to net
loss per share of $0.15 for the same period in 2018.
Pre-Tax Core Net Loss was $0.9
million for the three months ended September 30, 2019 compared to Pre-Tax Core Net
Income of $2.7 million for the same
period in 2018. Core Net Loss Per Share was $0.02 for the three months ended September 30, 2019, compared to Core Net Income
Per Share of $0.06 for the same
period in 2018. Core EBITDA was $2.1
million for the three months ended September 30, 2019 compared to $5.6 million for the same period in 2018.
Results of Operations for the Nine Months Ended
September 30, 2019
Total revenues were $38.2 million
for the nine months ended September 30,
2019 compared to $43.9 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 $34.8
million for the nine months ended September 30, 2019 compared to $37.0 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. Included in
total expenses are costs associated with our pending merger of
$3.5 million and $3.9 million for the nine months ended
September 30, 2019 and 2018,
respectively.
Total other income (expenses), net were $(8.3) million for the nine months ended
September 30, 2019 compared to
$(15.8) million for the same period
in 2018. This favorable variance was due primarily to unrealized
losses of $0.5 million from our
investment in shares of MCC compared to $10.9 million in the comparable period in 2018.
All of the $0.5 million in unrealized
losses during the nine months ended September 30, 2019 and $7.3 million of the $10.9
million in unrealized losses during the same period 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 $4.8 million for the nine months ended
September 30, 2019 compared to a net
loss of $6.6 million for the same
period in 2018. Medley Management Inc.'s net loss per share was
$0.13 for the nine months ended
September 30, 2019 compared to net
loss per share of $0.49 for the same period in 2018.
Pre-Tax Core Net Income was $0.7
million for the nine months ended September 30, 2019 compared to Pre-Tax Core Net
Income of $7.2 million for the same
period in 2018. Core Net Income Per Share was $0.01 for the nine months ended September 30, 2019, compared to Core Net Income
Per Share of $0.16 for the same
period in 2018. Core EBITDA was $9.8
million for the nine months ended September 30, 2019 compared to $15.9 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
September 30,
(unaudited)
|
|
For the Nine
Months Ended
September 30,
(unaudited)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(dollars in
thousands, except AUM, share and per share amounts)
|
|
Consolidated
Financial Data:
|
|
|
|
|
|
|
|
|
Pre-Tax (Loss)
Income
|
$
|
(1,881)
|
|
|
$
|
2,868
|
|
|
$
|
(4,989)
|
|
|
$
|
(8,847)
|
|
|
Net loss attributable
to Medley Management Inc. and
non-controlling interests in Medley LLC
|
$
|
(3,312)
|
|
|
$
|
(1,448)
|
|
|
$
|
(4,848)
|
|
|
$
|
(6,570)
|
|
|
Net loss per Class A
common stock
|
$
|
(0.09)
|
|
|
$
|
(0.15)
|
|
|
$
|
(0.13)
|
|
|
$
|
(0.49)
|
|
|
Net Income Margin
(1)
|
(28.7)
|
%
|
|
(10.1)
|
%
|
|
(12.7)
|
%
|
|
(15.0)
|
%
|
|
Weighted average
shares - Basic and Diluted
|
5,899,328
|
|
|
5,591,123
|
|
|
5,834,489
|
|
|
5,539,804
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Data:
|
|
|
|
|
|
|
|
|
Pre-Tax Core Net
(Loss) Income (2)
|
$
|
(926)
|
|
|
$
|
2,684
|
|
|
$
|
656
|
|
|
$
|
7,212
|
|
|
Core Net (Loss)
Income (2)
|
$
|
(987)
|
|
|
$
|
1,889
|
|
|
$
|
378
|
|
|
$
|
5,163
|
|
|
Core EBITDA
(3)
|
$
|
2,123
|
|
|
$
|
5,582
|
|
|
$
|
9,830
|
|
|
$
|
15,941
|
|
|
Core Net (Loss)
Income Per Share (4)
|
$
|
(0.02)
|
|
|
$
|
0.06
|
|
|
$
|
0.01
|
|
|
$
|
0.16
|
|
|
Core Net Income
Margin (5)
|
(5.4)
|
%
|
|
12.5
|
%
|
|
1.2
|
%
|
|
11.0
|
%
|
|
Pro-Forma Weighted
Average Shares Outstanding (6)
|
34,507,579
|
|
|
32,174,946
|
|
|
33,339,090
|
|
|
31,539,125
|
|
|
|
|
|
|
|
|
|
|
Other Data (at
period end, in millions):
|
|
|
|
|
|
|
|
|
AUM
|
$
|
4,271
|
|
|
$
|
4,796
|
|
|
$
|
4,271
|
|
|
$
|
4,796
|
|
|
Fee Earning
AUM
|
$
|
2,320
|
|
|
$
|
2,891
|
|
|
$
|
2,320
|
|
|
$
|
2,891
|
|
|
(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%. 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 26,316,642 vested and
unvested LLC Units for 26,316,642 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, June
30, 2019
|
$
|
1,527
|
|
|
$
|
945
|
|
|
$
|
2,472
|
|
|
62
|
%
|
|
38
|
%
|
|
Commitments
|
(14)
|
|
|
15
|
|
|
1
|
|
|
|
|
|
|
Capital
reduction
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
Distributions
|
(16)
|
|
|
(62)
|
|
|
(78)
|
|
|
|
|
|
|
Change in fund
value
|
(53)
|
|
|
(22)
|
|
|
(75)
|
|
|
|
|
|
|
Ending balance,
September 30, 2019
|
$
|
1,444
|
|
|
$
|
876
|
|
|
$
|
2,320
|
|
|
62
|
%
|
|
38
|
%
|
Total fee earning AUM decreased by $152.0
million, or 6%, to $2.3
billion as of September 30,
2019 compared to June 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 nine months ended September 30,
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
|
(6)
|
|
|
96
|
|
|
90
|
|
|
|
|
|
|
Capital
reduction
|
(135)
|
|
|
—
|
|
|
(135)
|
|
|
|
|
|
|
Distributions
|
(51)
|
|
|
(193)
|
|
|
(244)
|
|
|
|
|
|
|
Change in fund
value
|
(107)
|
|
|
(69)
|
|
|
(176)
|
|
|
|
|
|
|
Ending balance,
September 30, 2019
|
$
|
1,444
|
|
|
$
|
876
|
|
|
$
|
2,320
|
|
|
62
|
%
|
|
38
|
%
|
Total fee earning AUM decreased by $465.0
million, or 17%, to $2.3
billion as of September 30,
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 $4.3 billion of assets under management in two
business development companies, Medley Capital Corporation
(NYSE:MCC) (TASE:MCC) and Sierra Income Corporation, a credit
interval fund, Sierra Total Return Fund (NASDAQ:SRNTX) and several
private investment vehicles. Over the past 17 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, 2018. Except as required
by law, the Company undertakes no duty to update any
forward-looking statement made herein. All forward-looking
statements made herein speak only as of the date of this press
release.
Non-GAAP Financial Measures
We make reference to certain non-GAAP financial measures in this
press release. A reconciliation of these non-GAAP financial
measures to the most directly comparable financial measures
calculated and presented in accordance with U.S. GAAP is contained
in the tables attached hereto.
Non-GAAP measures used by management include Pre-Tax Core Net
Income, Core Net Income, Core EBITDA, Core Net Income Per Share and
Core Net Income Margin. Management believes that these measures
provide analysts, investors and management with helpful information
regarding our underlying operating performance and our business, as
they remove the impact of items management believes are not
reflective of underlying operating performance. These non-GAAP
measures are also used by management for planning purposes,
including the preparation of internal budgets; and for evaluating
the effectiveness of operational strategies. Additionally, we
believe these non-GAAP measures provide another tool for investors
to use in comparing our results with other companies in our
industry, many of whom use similar non-GAAP measures. There are
limitations associated with the use of non-GAAP financial measures
as compared to the use of the most directly comparable U.S. GAAP
financial measure and these measures supplement and should be
considered in addition to and not in lieu of the results of
operations discussed below. Furthermore, such measures may be
inconsistent with measures presented by other companies.
This press release does not constitute an offer for any Medley
fund.
Available Information
Medley Management Inc.'s filings with the Securities and
Exchange Commission, press releases, earnings releases and other
financial information are available at www.mdly.com.
|
(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, 2019.
|
|
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)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(in thousands,
except share and per share data)
|
|
Revenues
|
|
|
|
|
|
|
|
|
Management
fees
|
$
|
9,607
|
|
|
$
|
12,336
|
|
|
$
|
30,728
|
|
|
$
|
36,386
|
|
|
Other revenues and
fees
|
2,621
|
|
|
2,769
|
|
|
7,731
|
|
|
8,136
|
|
|
Investment
income:
|
|
|
|
|
|
|
|
|
Carried
interest
|
(142)
|
|
|
(326)
|
|
|
651
|
|
|
271
|
|
|
Other investment
loss, net
|
(550)
|
|
|
(382)
|
|
|
(922)
|
|
|
(849)
|
|
|
Total
Revenues
|
11,536
|
|
|
14,397
|
|
|
38,188
|
|
|
43,944
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
7,090
|
|
|
6,241
|
|
|
22,069
|
|
|
21,879
|
|
|
General,
administrative and other expenses
|
5,403
|
|
|
6,244
|
|
|
12,763
|
|
|
15,095
|
|
|
Total
Expenses
|
12,493
|
|
|
12,485
|
|
|
34,832
|
|
|
36,974
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense)
|
|
|
|
|
|
|
|
|
Dividend
income
|
182
|
|
|
962
|
|
|
942
|
|
|
3,351
|
|
|
Interest
expense
|
(2,874)
|
|
|
(2,717)
|
|
|
(8,646)
|
|
|
(8,113)
|
|
|
Other expenses,
net
|
1,768
|
|
|
2,711
|
|
|
(641)
|
|
|
(11,055)
|
|
|
Total other expenses,
net
|
(924)
|
|
|
956
|
|
|
(8,345)
|
|
|
(15,817)
|
|
|
Loss before income
taxes
|
(1,881)
|
|
|
2,868
|
|
|
(4,989)
|
|
|
(8,847)
|
|
|
(Benefit from)
provision for income taxes
|
(188)
|
|
|
450
|
|
|
(281)
|
|
|
835
|
|
|
Net Loss
|
(1,693)
|
|
|
2,418
|
|
|
(4,708)
|
|
|
(9,682)
|
|
|
Net loss attributable
to redeemable non-controlling
interests and non-controlling interests in consolidated
subsidiaries
|
1,619
|
|
|
3,866
|
|
|
140
|
|
|
(3,112)
|
|
|
Net (loss) income
attributable to non-controlling interests in Medley LLC
|
(2,796)
|
|
|
(963)
|
|
|
(4,078)
|
|
|
(4,729)
|
|
|
Net Loss Attributable
to Medley Management Inc.
|
$
|
(516)
|
|
|
$
|
(485)
|
|
|
$
|
(770)
|
|
|
$
|
(1,841)
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Share
of Class A Common Stock:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.09)
|
|
|
$
|
(0.15)
|
|
|
$
|
(0.13)
|
|
|
$
|
(0.49)
|
|
|
Diluted
|
$
|
(0.09)
|
|
|
$
|
(0.15)
|
|
|
$
|
(0.13)
|
|
|
$
|
(0.49)
|
|
|
Weighted average
shares outstanding - Basic and Diluted
|
5,899,328
|
|
|
5,591,123
|
|
|
5,834,489
|
|
|
5,539,804
|
|
|
Exhibit B.
Reconciliation of Core Net Income 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)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(in
thousands)
|
|
Net loss attributable
to Medley Management Inc.
|
$
|
(516)
|
|
|
$
|
(485)
|
|
|
$
|
(770)
|
|
|
$
|
(1,841)
|
|
|
Net (loss) income
attributable to non-controlling interests in Medley LLC
|
(2,796)
|
|
|
(963)
|
|
|
(4,078)
|
|
|
(4,729)
|
|
|
Net (loss) income
attributable to Medley Management Inc.
and non-controlling interests in Medley LLC
|
$
|
(3,312)
|
|
|
$
|
(1,448)
|
|
|
$
|
(4,848)
|
|
|
$
|
(6,570)
|
|
|
Reimbursable fund
startup expenses
|
22
|
|
|
240
|
|
|
283
|
|
|
1,304
|
|
|
IPO date award
stock-based compensation
|
282
|
|
|
444
|
|
|
555
|
|
|
1,018
|
|
|
Expenses associated
with strategic initiatives
|
2,070
|
|
|
2,067
|
|
|
3,486
|
|
|
3,858
|
|
|
Other non-core
items:
|
|
|
|
|
|
|
|
|
Unrealized losses on
shares of MCC
|
—
|
|
|
—
|
|
|
—
|
|
|
3,543
|
|
|
Severance
expense
|
200
|
|
|
39
|
|
|
1,462
|
|
|
2,263
|
|
|
Other
|
—
|
|
|
892
|
|
|
—
|
|
|
961
|
|
|
Income tax expense on
adjustments
|
(249)
|
|
|
(345)
|
|
|
(560)
|
|
|
(1,214)
|
|
|
Core Net
Income
|
$
|
(987)
|
|
|
$
|
1,889
|
|
|
$
|
378
|
|
|
$
|
5,163
|
|
|
Interest
expense
|
2,874
|
|
|
2,717
|
|
|
8,647
|
|
|
8,113
|
|
|
Income
taxes
|
61
|
|
|
795
|
|
|
278
|
|
|
2,049
|
|
|
Depreciation and
amortization
|
175
|
|
|
181
|
|
|
527
|
|
|
616
|
|
|
Core
EBITDA
|
$
|
2,123
|
|
|
$
|
5,582
|
|
|
$
|
9,830
|
|
|
$
|
15,941
|
|
|
Exhibit C.
Calculation of Core Net Income Per Share
|
|
|
|
|
|
For the Three
Months Ended
September 30,
(unaudited)
|
|
For the Nine
Months Ended
September 30,
(unaudited)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
(in thousands, except
share and per share amounts)
|
|
Numerator
|
|
|
|
|
|
|
|
|
Core Net
Income
|
$
|
(987)
|
|
|
$
|
1,889
|
|
|
$
|
378
|
|
|
$
|
5,163
|
|
|
Add: Income
taxes
|
61
|
|
|
795
|
|
|
278
|
|
|
2,049
|
|
|
Pre-Tax Core Net
Income
|
$
|
(926)
|
|
|
$
|
2,684
|
|
|
$
|
656
|
|
|
$
|
7,212
|
|
|
|
|
|
|
|
|
|
|
Denominator
|
|
|
|
|
|
|
|
|
Class A common
stock
|
5,899,328
|
|
|
5,591,123
|
|
|
5,834,489
|
|
|
5,539,804
|
|
|
Conversion of LLC
Units and restricted LLC Units to
Class A common stock
|
26,316,642
|
|
|
24,215,302
|
|
|
25,389,742
|
|
|
24,008,815
|
|
|
Restricted Stock
Units
|
2,291,609
|
|
|
2,368,521
|
|
|
2,114,859
|
|
|
1,990,506
|
|
|
Pro-Forma Weighted
Average Shares Outstanding (1)
|
34,507,579
|
|
|
32,174,946
|
|
|
33,339,090
|
|
|
31,539,125
|
|
|
Pre-Tax Core Net
Income Per Share
|
$
|
(0.03)
|
|
|
$
|
0.08
|
|
|
$
|
0.02
|
|
|
$
|
0.23
|
|
|
Less: corporate
income taxes per share (2)
|
0.01
|
|
|
(0.02)
|
|
|
(0.01)
|
|
|
(0.07)
|
|
|
Core Net Income Per
Share
|
$
|
(0.02)
|
|
|
$
|
0.06
|
|
|
$
|
0.01
|
|
|
$
|
0.16
|
|
|
|
|
|
(1)
|
The calculation of
Pro-Forma Weighted Average Shares Outstanding assumes the
conversion by the pre-IPO holders of up to 26,316,642 vested and
unvested LLC Units for 26,316,642 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
September 30,
(unaudited)
|
|
For the Nine
Months Ended
September 30,
(unaudited)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
Net Income
Margin
|
(28.7)
|
%
|
|
(10.1)
|
%
|
|
(12.7)
|
%
|
|
(15.0)
|
%
|
|
Reimbursable fund
startup expenses (1)
|
0.2
|
%
|
|
1.7
|
%
|
|
0.7
|
%
|
|
3.0
|
%
|
|
IPO date award
stock-based compensation (1)
|
2.4
|
%
|
|
3.1
|
%
|
|
1.5
|
%
|
|
2.3
|
%
|
|
Expenses associated
with strategic initiatives (1)
|
17.9
|
%
|
|
14.4
|
%
|
|
9.1
|
%
|
|
8.8
|
%
|
|
|
|
|
|
|
|
|
|
Other non-core
items:(1)
|
|
|
|
|
|
|
|
|
Unrealized losses on
shares of MCC
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
8.1
|
%
|
|
Severance
expense
|
1.7
|
%
|
|
0.3
|
%
|
|
3.8
|
%
|
|
5.1
|
%
|
|
Other
|
—
|
%
|
|
6.2
|
%
|
|
—
|
%
|
|
2.2
|
%
|
|
Provision for income
taxes (1)
|
(1.6)
|
%
|
|
3.1
|
%
|
|
(0.7)
|
%
|
|
1.9
|
%
|
|
Corporate income
taxes (2)
|
2.7
|
%
|
|
(6.2)
|
%
|
|
(0.6)
|
%
|
|
(5.4)
|
%
|
|
Core Net Income
Margin
|
(5.4)
|
%
|
|
12.5
|
%
|
|
1.2
|
%
|
|
11.0
|
%
|
|
|
|
(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%
|
|
Exhibit E.
Consolidated Balance Sheets of Medley Management
Inc.
|
|
|
|
As
of
|
|
September 30,
2019
(unaudited)
|
|
December 31,
2018
|
|
(in
thousands)
|
|
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
11,125
|
|
|
$
|
17,219
|
|
|
Investments, at fair
value
|
34,331
|
|
|
36,425
|
|
|
Management fees
receivable
|
8,526
|
|
|
10,274
|
|
|
Right-of-use assets
under operating leases
|
6,996
|
|
|
—
|
|
|
Other
assets
|
14,444
|
|
|
14,298
|
|
|
Total
Assets
|
$
|
75,422
|
|
|
$
|
78,216
|
|
|
|
|
|
|
Liabilities,
Redeemable Non-controlling Interests and Equity
|
|
|
|
|
Liabilities
|
|
|
|
|
Senior unsecured
debt, net
|
$
|
118,190
|
|
|
$
|
117,618
|
|
|
Loans payable,
net
|
10,000
|
|
|
9,892
|
|
|
Due to former
minority interest holder, net
|
8,735
|
|
|
11,402
|
|
|
Operating lease
liabilities
|
8,772
|
|
|
—
|
|
|
Accounts payable,
accrued expenses and other liabilities
|
20,371
|
|
|
26,739
|
|
|
Total
Liabilities
|
166,068
|
|
|
165,651
|
|
|
|
|
|
|
Redeemable
Non-controlling Interests
|
20,503
|
|
|
23,186
|
|
|
|
|
|
|
Equity
|
|
|
|
|
Class A common
stock
|
60
|
|
|
57
|
|
|
Class B common
stock
|
—
|
|
|
—
|
|
|
Additional paid in
capital
|
12,242
|
|
|
7,529
|
|
|
Accumulated
deficit
|
(20,290)
|
|
|
(19,618)
|
|
|
Total stockholders'
deficit, Medley Management Inc.
|
(7,988)
|
|
|
(12,032)
|
|
|
Non-controlling
interests in consolidated subsidiaries
|
(509)
|
|
|
(747)
|
|
|
Non-controlling
interests in Medley LLC
|
(102,652)
|
|
|
(97,842)
|
|
|
Total
Deficit
|
(111,149)
|
|
|
(110,621)
|
|
|
Total Liabilities,
Redeemable Non-controlling Interests and Equity
|
$
|
75,422
|
|
|
$
|
78,216
|
|
View original
content:http://www.prnewswire.com/news-releases/medley-management-inc-reports-third-quarter-2019-results-300958758.html
SOURCE Medley Management Inc.
