- Third quarter GAAP revenues of $272.2 million; third quarter
Adjusted revenues of $277.7 million, up 19% from the prior year
period
- GAAP revenues for the first nine months of 2023 were $639.9
million; Adjusted revenues for the first nine months of 2023 were
$645.2 million, down 16% from the prior year period
- GAAP net loss of $0.16 per share for the third quarter of 2023
and $0.28 per share for the first nine months of 2023; Adjusted net
loss of $0.15 per share for the third quarter of 2023 and $0.14 per
share for the first nine months of 2023, after excluding $10.4
million of expense related to a regulatory settlement
- Continued to execute on our growth strategy: ― Launched Clean
Technology Group during the third quarter ― Year-to-date, hired 24
Managing Directors, including five since our last earnings release
focused on Clean Technology, Metals & Mining, Power &
Utilities and Industrials
- Strong balance sheet with cash and short term investments of
$297.8 million and no debt or goodwill ― Declared quarterly
dividend of $0.60 per share
Moelis & Company (NYSE: MC) today reported financial results
for the quarter ended September 30, 2023. The Firm's third quarter
GAAP revenues were $272.2 million as compared with $233.5 million
in the prior year period. On an Adjusted basis, the Firm’s third
quarter revenues of $277.7 million increased 19% from the prior
year period. The Firm reported a GAAP net loss of $11.4 million and
$0.16 per share for the third quarter of 2023. On an Adjusted
basis, the Firm reported a net loss of $11.3 million and $0.15 per
share for the third quarter of 2023, which compares with net income
of $27.9 million and $0.37 per share (diluted) in the prior year
period.
GAAP revenues for the first nine months of 2023 were $639.9
million. Adjusted revenues for the first nine months of 2023 were
$645.2 million and represented a decrease of 16% from the prior
year period. The Firm reported a GAAP net loss of $21.1 million, or
$0.28 per share for the first nine months of 2023. On an Adjusted
basis, the Firm reported a net loss of $10.1 million, or $0.14 per
share in the first nine months of 2023, as compared with net income
of $144.2 million, or $1.89 per share (diluted), in the prior year
period. Adjusted net loss for the first nine months of 2023
excludes $10.4 million of expense related to a regulatory
settlement with the U.S. Securities and Exchange Commission (the
"SEC") to resolve an administrative cease-and-desist proceeding
regarding our practices relating to recordkeeping of business
communications on messaging applications (the "Settlement"). GAAP
and Adjusted net income in the first nine months of 2023 include
net tax benefits of approximately $0.05 per share related to the
settlement of share based awards.
"Our aggressive senior banker hiring throughout the year has
enhanced our coverage of the largest sector fee pools and has
significantly improved the Firm's earnings power once the M&A
cycle turns," said Ken Moelis, Chairman and Chief Executive
Officer.
The Firm’s revenues and net income can fluctuate materially
depending on the number, size and timing of completed transactions
as well as other factors. Accordingly, financial results in any
particular quarter may not be representative of future results over
a longer period of time.
Currently 91% of the operating partnership (Moelis & Company
Group LP) is owned by the corporate partner (Moelis & Company)
and is subject to corporate U.S. federal and state income tax. The
remaining 9% is owned by other partners of Moelis & Company
Group LP and is primarily subject to U.S. federal tax at the
partner level (certain state, local and foreign income taxes are
incurred at the company level). The Adjusted results included
herein apply certain adjustments from our GAAP results, including
the assumption that 100% of the Firm’s third quarter operating
results was taxed at our corporate effective tax rate. We believe
the Adjusted results, when presented together with comparable GAAP
results, are useful to investors to compare our performance across
periods and to better understand our operating results. A
reconciliation between our GAAP results and our Adjusted results is
presented in the Appendix to this press release.
GAAP and Adjusted (non-GAAP) Selected
Financial Data (Unaudited)
GAAP
Adjusted (non-GAAP)*
Three Months Ended September
30,
($ in thousands except per share
data)
2023
2022
2023 vs. 2022 Variance
2023
2022
2023 vs. 2022 Variance
Revenues
$
272,179
$
233,506
17
%
$
277,665
$
232,407
19
%
Income (loss) before income
taxes
(10,083)
37,674
N/M
(9,799)
37,674
N/M
Provision (benefit) for income taxes
1,286
9,115
-86
%
1,518
9,756
-84
%
Net income (loss)
(11,369)
28,559
N/M
(11,317)
27,918
N/M
Net income (loss) attributable to
noncontrolling interests
(637)
2,947
N/M
—
—
N/M
Net income (loss) attributable to Moelis
& Company
$
(10,732)
$
25,612
N/M
$
(11,317)
$
27,918
N/M
Diluted earnings (loss) per share
$
(0.16)
$
0.37
N/M
$
(0.15)
$
0.37
N/M
N/M = not meaningful
* See Appendix for a reconciliation of
GAAP to Adjusted (non-GAAP)
GAAP
Adjusted (non-GAAP)*
Nine Months Ended September
30,
($ in thousands except per share
data)
2023
2022
2023 vs. 2022 Variance
2023
2022
2023 vs. 2022 Variance
Revenues
$
639,870
$
778,114
-18
%
$
645,207
$
768,059
-16
%
Income (loss) before income
taxes
(24,943)
184,019
N/M
(14,018)
184,019
N/M
Provision (benefit) for income taxes
(3,891)
38,009
N/M
(3,890)
39,858
N/M
Net income (loss)
(21,052)
146,010
N/M
(10,128)
144,161
N/M
Net income (loss) attributable to
noncontrolling interests
(2,012)
15,720
N/M
—
—
N/M
Net income (loss) attributable to Moelis
& Company
$
(19,040)
$
130,290
N/M
$
(10,128)
$
144,161
N/M
Diluted earnings (loss) per share
$
(0.28)
$
1.86
N/M
$
(0.14)
$
1.89
N/M
N/M = not meaningful
* See Appendix for a reconciliation of
GAAP to Adjusted (non-GAAP)
Revenues
We earned GAAP revenues of $272.2 million in the third quarter
of 2023, as compared with $233.5 million in the prior year period.
On an Adjusted basis, we earned revenues of $277.7 million in the
third quarter of 2023, as compared with $232.4 million in the prior
year period, representing an increase of 19%. The increase in third
quarter revenues was driven by an increase in fees earned from
restructuring and capital markets transactions as compared with the
prior year period.
For the first nine months of 2023, we earned GAAP revenues of
$639.9 million, as compared with $778.1 million in the prior year
period. On an Adjusted basis, we earned revenues of $645.2 million
in the first nine months of 2023, as compared with $768.1 million
in the first nine months of 2022, or a decrease of 16%.
We continued to execute on our strategy of organic growth. Since
our last earnings release, we announced the formation of our Clean
Technology Group and hired five Managing Directors. These five
Managing Directors are focused on Clean Technology, Metals &
Mining, Power & Utilities and Industrials. Year-to-date, we
have hired 24 Managing Directors.
Expenses
The following tables set forth information relating to the
Firm’s operating expenses.
GAAP
Adjusted (non-GAAP)*
Three Months Ended September
30,
($ in thousands)
2023
2022
2023 vs. 2022 Variance
2023
2022
2023 vs. 2022 Variance
Expenses:
Compensation and benefits
$
242,231
$
160,437
51
%
$
241,489
$
160,187
51
%
% of revenues
89.0
%
68.7
%
87.0
%
68.9
%
Non-compensation expenses
$
49,974
$
38,020
31
%
$
49,974
$
38,020
31
%
% of revenues
18.4
%
16.3
%
18.0
%
16.4
%
Total operating expenses
$
292,205
$
198,457
47
%
$
291,463
$
198,207
47
%
% of revenues
107.4
%
85.0
%
105.0
%
85.3
%
* See Appendix for a reconciliation of
GAAP to Adjusted (non-GAAP)
GAAP
Adjusted (non-GAAP)*
Nine Months Ended September
30,
($ in thousands)
2023
2022
2023 vs. 2022 Variance
2023
2022
2023 vs. 2022 Variance
Expenses:
Compensation and benefits
$
536,264
$
477,166
12
%
$
535,522
$
476,222
12
%
% of revenues
83.8
%
61.3
%
83.0
%
62.0
%
Non-compensation expenses
$
134,609
$
114,273
18
%
$
134,189
$
114,273
17
%
% of revenues
21.0
%
14.7
%
20.8
%
14.9
%
Total operating expenses
$
670,873
$
591,439
13
%
$
669,711
$
590,495
13
%
% of revenues
104.8
%
76.0
%
103.8
%
76.9
%
* See Appendix for a reconciliation of
GAAP to Adjusted (non-GAAP)
Total operating expenses on a GAAP basis were $292.2 million for
the third quarter of 2023 and $670.9 million for the first nine
months of 2023. On an Adjusted basis, operating expenses were
$291.5 million for the third quarter of 2023, as compared with
$198.2 million in the prior year period. For the first nine months
of 2023, Adjusted operating expenses were $669.7 million as
compared with $590.5 million in the prior year period. The increase
in Adjusted operating expenses in both current year periods is
attributable to increased compensation and benefits and
non-compensation expenses as compared with the prior year
period.
Compensation and benefits expenses on a GAAP basis were $242.2
million for the third quarter of 2023 and $536.3 million for the
first nine months of 2023. Adjusted compensation and benefits
expenses were $241.5 million for the third quarter of 2023, as
compared with $160.2 million in the prior year period. The increase
in compensation and benefits expenses in the third quarter of 2023
is attributable to increased headcount and a higher bonus expense
accrual, associated with higher revenues earned, as compared with
the prior year period. For the first nine months of 2023, Adjusted
compensation and benefits expenses were $535.5 million, as compared
with $476.2 million in the prior year period. The increase in
Adjusted compensation and benefits expenses in the first nine
months of 2023 is attributable to increased headcount as compared
with the prior year period.
Non-compensation expenses on a GAAP basis were $50.0 million for
the third quarter of 2023 and $134.6 million for the first nine
months of 2023. Adjusted non-compensation expenses for the third
quarter of 2023 were $50.0 million, as compared with $38.0 million
in the prior year period. The increase in Adjusted non-compensation
expenses in the third quarter of 2023 is primarily due to increased
professional fees directly connected to specific completed
transactions. For the first nine months of 2023, Adjusted
non-compensation expenses were $134.2 million, as compared with
$114.3 million in the prior year period. The increase in Adjusted
non-compensation expenses for the first nine months of 2023 is
primarily due to increased professional fees, communication and
technology expenses, and deal-related travel and related expenses
as compared with the prior year period.
Other Income (Expenses)
GAAP
Adjusted (non-GAAP)*
Three Months Ended September
30,
($ in thousands)
2023
2022
2023 vs. 2022 Variance
2023
2022
2023 vs. 2022 Variance
Other income (expenses)
$
9,943
$
2,625
279
%
$
3,999
$
3,474
15
%
* See Appendix for a reconciliation of
GAAP to Adjusted (non-GAAP)
GAAP
Adjusted (non-GAAP)*
Nine Months Ended September
30,
($ in thousands)
2023
2022
2023 vs. 2022 Variance
2023
2022
2023 vs. 2022 Variance
Other income (expenses)
$
6,060
$
(2,656)
N/M
$
10,486
$
6,455
62
%
N/M = not meaningful
* See Appendix for a reconciliation of
GAAP to Adjusted (non-GAAP)
Other income (expenses) on a GAAP basis was $9.9 million for the
third quarter of 2023, as compared with $2.6 million in the prior
year period. On an Adjusted basis, other income for the third
quarter of 2023 was $4.0 million, as compared with $3.5 million in
the prior year period. In the third quarter of 2023, we recorded
gains of $5.5 million on certain shares sold during the period.
Consistent with prior periods, the $5.5 million in gains are
included within Adjusted revenues and the adjustment did not impact
our GAAP or Adjusted earnings per share.
For the first nine months of 2023, other income (expenses) on a
GAAP basis was income of $6.1 million as compared with $2.7 million
expense in the prior year period. On an Adjusted basis, other
income for the first nine months of 2023 was $10.5 million as
compared with $6.5 million in the prior year period. For the first
nine months of 2023, we recorded net gains of $5.3 million on
certain shares during the period. Consistent with prior periods,
the $5.3 million in gains are included within Adjusted revenues and
the adjustment did not impact our GAAP or Adjusted earnings per
share.
Adjusted other income for the first nine months of 2023 excludes
$10.0 million of expenses related to the Settlement.
Provision for Income Taxes
The corporate partner (Moelis & Company) currently owns 91%
of the operating partnership (Moelis & Company Group LP) and is
subject to corporate U.S. federal and state income tax on its
allocable share of earnings. The remaining 9% of activity is
subject to certain state, local and foreign income taxes (including
New York City Unincorporated Business Tax), which is accounted for
at the partner level through the noncontrolling interests. For
Adjusted purposes, we have assumed that 100% of the Firm’s third
quarter 2023 operating results were taxed at our corporate
effective tax rate and together with the impact of certain
non-deductible expenses incurred in the ordinary course of
business, we have a net tax expense of approximately $1.5
million.
Capital Management and Balance Sheet
Moelis & Company continues to maintain a strong financial
position, and as of September 30, 2023, we held cash and liquid
investments of $297.8 million and had no debt or goodwill on our
balance sheet.
The Board of Directors of Moelis & Company declared a
regular quarterly dividend of $0.60 per share. The $0.60 per share
will be paid on December 22, 2023 to common stockholders of record
on November 13, 2023.
Earnings Call
We will host a conference call beginning at 5:00pm ET on
Thursday, November 2, 2023, accessible via telephone and the
internet. Ken Moelis, Chairman and Chief Executive Officer, and Joe
Simon, Chief Financial Officer, will review our third quarter 2023
financial results. Following the review, there will be a question
and answer session.
Investors and analysts may participate in the live conference
call by dialing 1-888-300-4150 (domestic) or 1-646-970-1530
(international) and using access code 8014191. Please dial in 15
minutes before the conference call begins. The conference call will
also be accessible as a listen-only audio webcast through the
Investor Relations section of the Moelis & Company website at
www.moelis.com.
For those unable to listen to the live broadcast, a replay of
the call will be available for one month via telephone starting
approximately one hour after the live call ends. The replay can be
accessed at 1-800-770-2030 (domestic) or 1-647-362-9199
(international); the conference number is 8014191.
About Moelis &
Company
Moelis & Company is a leading global independent investment
bank that provides innovative strategic advice and solutions to a
diverse client base, including corporations, governments and
financial sponsors. The Firm assists its clients in achieving their
strategic goals by offering comprehensive integrated financial
advisory services across all major industry sectors. Moelis &
Company’s experienced professionals advise clients on their most
critical decisions, including mergers and acquisitions,
recapitalizations and restructurings, capital markets transactions,
private fund raisings and secondary transactions and other
corporate finance matters. The Firm serves its clients from 23
locations in North and South America, Europe, the Middle East, Asia
and Australia. For further information, please visit:
www.moelis.com.
Forward-Looking
Statements
This press release contains forward-looking statements, which
reflect the Firm’s current views with respect to, among other
things, its operations and financial performance. You can identify
these forward-looking statements by the use of words such as
“outlook,” “believes,” “expects,” “potential,” “continues,” “may,”
“will,” “should,” “seeks,” “target,” “approximately,” “predicts,”
“intends,” “plans,” “estimates,” “anticipates” or the negative
version of these words or other comparable words. Such
forward-looking statements are based on certain assumptions and
estimates and subject to various risks and uncertainties.
Accordingly, there are or will be important factors that could
cause actual outcomes or results to differ materially from those
indicated in these statements. We believe these factors include,
but are not limited to, those described under "Risk Factors"
discussed in our Annual Report on Form 10-K for the year ended
December 31, 2022, subsequent reports filed on Form 10-Q and our
other filings with the SEC. These factors should not be construed
as exhaustive and should be read in conjunction with the other
cautionary statements that are included in this release. In
addition, new risks and uncertainties emerge from time to time, and
it is not possible for us to predict all risks and uncertainties,
nor can we assess the impact of all factors on our business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements. Accordingly, you should not rely upon
forward-looking statements as a prediction of actual results. The
Firm undertakes no obligation to publicly update or review any
forward-looking statement, whether as a result of new information,
future developments or otherwise.
Non-GAAP Financial
Measures
The Company prepares its consolidated financial statements using
accounting principles generally accepted in the United States
(GAAP). From time to time, the Company may disclose certain
“non-GAAP financial measures” in the course of its earnings
releases, earnings conference calls, financial presentations and
otherwise. The Securities and Exchange Commission defines a
“non-GAAP financial measure” as a numerical measure of historical
or future financial performance, financial position, or cash flows
that is subject to adjustments that effectively exclude, or include
amounts from the most directly comparable measure calculated and
presented in accordance with GAAP. Non-GAAP financial measures
disclosed by the Company are provided as additional information to
analysts, investors and other stakeholders in order to provide them
with greater transparency about, or an alternative method for
assessing our financial condition, operating results, or capital
adequacy. Adjusted results are a non-GAAP financial measure which
provide additional information on management’s view of operating
results. These measures are not in accordance with, or a substitute
for GAAP, and may be different from or inconsistent with non-GAAP
financial measures used by other companies. Whenever we refer to a
non-GAAP financial measure, we will also generally define it or
present the most directly comparable financial measure calculated
and presented in accordance with GAAP, along with a reconciliation
of the differences between the non-GAAP financial measure we
reference and such comparable GAAP financial measure.
The Company’s Adjusted revenues includes amounts reflected
within other income (expenses) which are considered the equivalent
of revenues for compensation. Such adjustments may include gains on
founder investments where our employees and the Moelis advisory
platform contributed meaningfully to the value creation; or the
mark-to-market impact of equity instruments held by the Company
that were originally received as payment for our banking services
and included in revenues. We believe these adjustments are useful
to allow comparability of period-to-period operating performance
and compensation levels.
The Company’s Adjusted compensation and benefits expenses may
include adjustments reflected within other income (expenses)
associated with compensation awards forfeited due to the
enforcement of non-compete provisions. Management views the credits
associated with such forfeitures as an offset to compensation and
benefits expenses since the Firm will utilize the forfeited
economics to recruit and or retain talent. We believe the netted
presentation of forfeiture credits and compensation expenses is
useful to allow comparability of period-to-period operating
performance.
The Company’s Adjusted other income (expenses) may exclude
certain one-time items that reduce the comparability of our
operating performance as well as the amounts related to revenues
and compensation and benefits expenses discussed above and
adjustments to our provision for income taxes discussed below. Such
adjustments increase the comparability of our financial performance
across reporting periods and versus our peers.
The Company’s Adjusted provision (benefit) for income taxes is
adjusted to illustrate the result as if 100% of the Firm’s income
is being taxed at our corporate effective tax rates for the periods
presented. Adjusted provision (benefit) for income taxes
periodically includes the tax impact related to the settlement of
share-based awards, the reclassification of TRA liability
adjustments, or adjustments to our deferred tax assets and
liabilities that occur in connection with new tax legislation. Such
adjustments increase the comparability of our financial performance
across reporting periods and versus our peers.
The Company’s Adjusted basic and diluted shares of Class A
common stock outstanding is presented for each period as if all
outstanding Class A partnership units have been exchanged into
Class A common stock. The Adjusted presentation helps analysts,
investors, and other stakeholders understand the effect of the
Firm’s ownership structure on its results, including the impact of
all the Firm’s income becoming subject to corporate-level tax.
Appendix
GAAP Consolidated Statement of Operations (Unaudited)
Reconciliation of GAAP to Adjusted (non-GAAP) Financial
Information (Unaudited)
Moelis & Company
GAAP Consolidated Statement of
Operations
Unaudited
(dollars in thousands, except
for share and per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Revenues
$
272,179
$
233,506
$
639,870
$
778,114
Expenses
Compensation and benefits
242,231
160,437
536,264
477,166
Occupancy
7,181
6,022
19,887
18,099
Professional fees
13,525
6,048
25,378
15,933
Communication, technology and information
services
11,709
9,971
33,758
28,858
Travel and related expenses
8,394
7,389
28,575
24,398
Depreciation and amortization
2,014
1,918
6,023
5,798
Other expenses
7,151
6,672
20,988
21,187
Total Expenses
292,205
198,457
670,873
591,439
Operating income (loss)
(20,026)
35,049
(31,003)
186,675
Other income (expenses)
9,943
2,625
6,060
(2,656)
Income (loss) before income
taxes
(10,083)
37,674
(24,943)
184,019
Provision (benefit) for income taxes
1,286
9,115
(3,891)
38,009
Net income (loss)
(11,369)
28,559
(21,052)
146,010
Net income (loss) attributable to
noncontrolling interests
(637)
2,947
(2,012)
15,720
Net income (loss) attributable to Moelis
& Company
$
(10,732)
$
25,612
$
(19,040)
$
130,290
Weighted-average shares of Class A common
stock outstanding
Basic
68,752,061
65,873,976
68,260,558
65,684,485
Diluted
68,752,061
69,829,338
68,260,558
70,183,414
Net income (loss) attributable to holders
of shares of Class A common stock per share
Basic
$
(0.16)
$
0.39
$
(0.28)
$
1.98
Diluted
$
(0.16)
$
0.37
$
(0.28)
$
1.86
Moelis & Company
Reconciliation of GAAP to
Adjusted (non-GAAP) Financial Information
Unaudited
(dollars in thousands, except
share and per share data)
Three Months Ended September
30, 2023
Adjusted items
GAAP
Adjustments
Adjusted (non-GAAP)
Revenues
$
272,179
$
5,486
(a)
$
277,665
Compensation and benefits
242,231
(742)
(b)
241,489
Non-compensation expenses
49,974
—
49,974
Other income (expenses)
9,943
(5,944)
(a)(b)(c)
3,999
Income (loss) before income taxes
(10,083)
284
(9,799)
Provision (benefit) for income taxes
1,286
232
(c)(d)
1,518
Net income (loss)
(11,369)
52
(11,317)
Net income (loss) attributable to
noncontrolling interests
(637)
637
(e)
—
Net income (loss) attributable to Moelis
& Company
$
(10,732)
$
(585)
$
(11,317)
Weighted-average shares of Class A common
stock outstanding
Basic
68,752,061
6,286,214
(e)
75,038,275
Diluted
68,752,061
6,286,214
(e)
75,038,275
Net income (loss) attributable to holders
of shares of Class A common stock per share
Basic
$
(0.16)
$
(0.15)
Diluted
$
(0.16)
$
(0.15)
(a)
Reflects a reclassification of $5.5
million of other income to revenues related to shares received as
partial payment for advisory services provided on certain
transactions.
(b)
Reflects a reclassification of $0.7
million of other income to compensation and benefits expense
associated with the enforcement of non-compete provisions.
(c)
Tax Receivable Agreement liability related
adjustments are made to other income (expenses) for GAAP purposes.
The adjustment of $0.3 million is reclassified to the provision for
income taxes line.
(d)
An adjustment has been made to illustrate
the result as if 100% of the Firm’s income is being taxed at our
corporate effective tax rate. Our adjusted tax provision excludes
any benefits or costs related to the adjustment to the TRA
liability originated from past partnership unit exchanges; such
adjustment for this period was a net expense of $0.3 million, which
is not included in the corporate tax provision for the period
presented.
(e)
Assumes all outstanding Class A
partnership units have been exchanged into Class A common
stock.
Moelis & Company
Reconciliation of GAAP to
Adjusted (non-GAAP) Financial Information
Unaudited
(dollars in thousands, except
share and per share data)
Three Months Ended September
30, 2022
Adjusted items
GAAP
Adjustments
Adjusted (non-GAAP)
Revenues
$
233,506
$
(1,099)
(a)
$
232,407
Compensation and benefits
160,437
(250)
(b)
160,187
Other income (expenses)
2,625
849
(a)(b)
3,474
Income (loss) before income taxes
37,674
—
37,674
Provision (benefit) for income taxes
9,115
641
(c)
9,756
Net income (loss)
28,559
(641)
27,918
Net income (loss) attributable to
noncontrolling interests
2,947
(2,947)
(d)
—
Net income (loss) attributable to Moelis
& Company
$
25,612
$
2,306
$
27,918
Weighted-average shares of Class A common
stock outstanding
Basic
65,873,976
5,875,338
(d)
71,749,314
Diluted
69,829,338
5,875,338
(d)
75,704,676
Net income (loss) attributable to holders
of shares of Class A common stock per share
Basic
$
0.39
$
0.39
Diluted
$
0.37
$
0.37
(a)
Reflects a reclassification of $1.1
million of other income to revenues related to unrealized losses
from the mark-to-market impact on shares received as partial
payment for advisory services provided on certain transactions.
(b)
Reflects a reclassification of $0.3
million of other income to compensation and benefits expense
associated with the enforcement of non-compete provisions.
(c)
An adjustment has been made to illustrate
the result as if 100% of the Firm’s income is being taxed at our
corporate effective tax rate of approximately 25.9% for the period
stated. Our tax provision includes a tax benefit related to the
settlement of share-based awards of $0.5 million; excluding such
discrete benefit, our effective tax rate for the period presented
would have been 27.1%.
(d)
Assumes all outstanding Class A
partnership units have been exchanged into Class A common
stock.
Moelis & Company
Reconciliation of GAAP to
Adjusted (non-GAAP) Financial Information
Unaudited
(dollars in thousands, except
share and per share data)
Nine Months Ended September
30, 2023
Adjusted items
GAAP
Adjustments
Adjusted (non-GAAP)
Revenues
$
639,870
$
5,337
(a)
$
645,207
Compensation and benefits
536,264
(742)
(b)
535,522
Non-compensation expenses
134,609
(420)
(c)
134,189
Other income (expenses)
6,060
4,426
(a)(b)(c)(d)
10,486
Income (loss) before income taxes
(24,943)
10,925
(14,018)
Provision (benefit) for income taxes
(3,891)
1
(d)(e)
(3,890)
Net income (loss)
(21,052)
10,924
(10,128)
Net income (loss) attributable to
noncontrolling interests
(2,012)
2,012
(f)
—
Net income (loss) attributable to Moelis
& Company
$
(19,040)
$
8,912
$
(10,128)
Weighted-average shares of Class A common
stock outstanding
Basic
68,260,558
6,222,685
(f)
74,483,243
Diluted
68,260,558
6,222,685
(f)
74,483,243
Net income (loss) attributable to holders
of shares of Class A common stock per share
Basic
$
(0.28)
$
(0.14)
Diluted
$
(0.28)
$
(0.14)
(a)
Reflects a reclassification of $5.3
million of other income to revenues related to shares received as
partial payment for advisory services provided on certain
transactions.
(b)
Reflects a reclassification of $0.7
million of other income to compensation and benefits expense
associated with the enforcement of non-compete provisions.
(c)
Reflects adjustments of $10.4 million for
expenses related to the Settlement.
(d)
Tax Receivable Agreement liability related
adjustments are made to other income (expenses) for GAAP purposes.
The adjustment of $0.5 million is reclassified to the provision for
income taxes line.
(e)
An adjustment has been made to illustrate
the result as if 100% of the Firm’s income is being taxed at our
corporate effective tax rate for the period stated; together with
the tax benefit related to the settlement of share-based awards of
$3.6 million, we have a net tax benefit of $3.9 million. Our
adjusted tax provision excludes any benefits or costs related to
the adjustment to the TRA liability originated from past
partnership unit exchanges; such adjustment for this period was a
net expense of $0.5 million, which is not included in the corporate
tax provision for the period presented.
(f)
Assumes all outstanding Class A
partnership units have been exchanged into Class A common
stock.
Moelis & Company
Reconciliation of GAAP to
Adjusted (non-GAAP) Financial Information
Unaudited
(dollars in thousands, except
share and per share data)
Nine Months Ended September
30, 2022
Adjusted items
GAAP
Adjustments
Adjusted (non-GAAP)
Revenues
$
778,114
$
(10,055)
(a)
$
768,059
Compensation and benefits
477,166
(944)
(b)
476,222
Other income (expenses)
(2,656)
9,111
(a)(b)
6,455
Income (loss) before income taxes
184,019
—
184,019
Provision (benefit) for income taxes
38,009
1,849
(c)
39,858
Net income (loss)
146,010
(1,849)
144,161
Net income (loss) attributable to
noncontrolling interests
15,720
(15,720)
(d)
—
Net income (loss) attributable to Moelis
& Company
$
130,290
$
13,871
$
144,161
Weighted-average shares of Class A common
stock outstanding
Basic
65,684,485
6,092,931
(d)
71,777,416
Diluted
70,183,414
6,092,931
(d)
76,276,345
Net income (loss) attributable to holders
of shares of Class A common stock per share
Basic
$
1.98
$
2.01
Diluted
$
1.86
$
1.89
(a)
Reflects a reclassification of $10.1
million of other income to revenues related to unrealized losses
from the mark-to-market impact on shares received as partial
payment for advisory services provided on certain transactions.
(b)
Reflects a reclassification of $0.9
million of other income to compensation and benefits expense
associated with the enforcement of non-compete provisions.
(c)
An adjustment has been made to illustrate
the result as if 100% of the Firm’s income is being taxed at our
corporate effective tax rate of 21.7% for the period stated. Our
tax provision includes a tax benefit related to the settlement of
share-based awards of $10.0 million; excluding such discrete
benefit, our effective tax rate for the period presented would have
been 27.1%.
(d)
Assumes all outstanding Class A
partnership units have been exchanged into Class A common
stock.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231102849482/en/
Investor Contact: Matt Tsukroff Moelis & Company t: +
1 212 883 3800 m: +1 917 526 2340 matthew.tsukroff@moelis.com
Media Contact: Alyssa Castelli Moelis & Company t: +
1 212 883 3802 m: +1 929 969 2918 alyssa.castelli@moelis.com
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