- Fourth quarter GAAP revenues of $214.9 million; fourth quarter
Adjusted revenues of $214.9 million, up 6% from the prior year
period
- Full year 2023 GAAP revenues of $854.7 million; full year 2023
Adjusted revenues of $860.1 million, down 11% from the prior
year
- GAAP net loss of $0.08 per share for the fourth quarter of 2023
and $0.36 per share for full year 2023; Adjusted net loss of $0.06
per share for the fourth quarter of 2023 and $0.20 per share for
full year 2023
- Continued to execute on our growth strategy:
- In 2023, we promoted eight advisory professionals to Managing
Director and hired 24 Managing Directors in areas of key strategic
importance including Technology, Industrials, Metals & Mining,
Clean Technology, Power & Utilities, Capital Markets, Capital
Structure Advisory and Private Funds Advisory
- Launched Clean Technology Group during the third quarter of
2023
- Since the beginning of 2024, we have added a total of 10
Managing Directors to our platform, including seven through
internal promotions, one new hire focused on enhancing the Firm's
coverage of credit funds, and two focused on Upstream Energy that
will join in the coming weeks
- Strong balance sheet with cash and short-term investments of
$349.3 million and no debt or goodwill
- Declared quarterly dividend of $0.60 per share
Moelis & Company (NYSE: MC) today reported financial results
for the fourth quarter and full year ended December 31, 2023. The
Firm's fourth quarter GAAP revenues were $214.9 million as compared
with $207.2 million in the prior year period. On an Adjusted basis,
the Firm’s fourth quarter revenues of $214.9 million increased 6%
from the prior year period. The Firm reported a GAAP net loss of
$6.5 million and $0.08 per share for the fourth quarter of 2023. On
an Adjusted basis, the Firm reported a net loss of $4.8 million and
$0.06 per share for the fourth quarter of 2023, which compares with
net income of $25.2 million and $0.33 per share (diluted) in the
prior year period.
The Firm's full year 2023 GAAP revenues were $854.7 million. On
an Adjusted basis, the Firm's full year 2023 Adjusted revenues of
$860.1 million decreased 11% from the prior year. The Firm reported
a GAAP net loss of $27.5 million, or $0.36 per share for full year
2023. On an Adjusted basis, the Firm reported a net loss of $15.0
million, or $0.20 per share for full year 2023, as compared with
net income of $169.4 million, or $2.22 per share (diluted), in the
prior year. GAAP and Adjusted net income in full year 2023 include
net tax benefits of approximately $0.05 per share related to the
settlement of share-based awards.
"In 2023, we aggressively expanded our Managing Director
headcount in key areas of growth to position the Firm for the
coming resurgence in M&A activity. We enter 2024 with a focus
on delivering our expanded expertise to our clients," said Ken
Moelis, Chairman and Chief Executive Officer.
The Firm’s revenues and net income can fluctuate materially
depending on the number, size and timing of completed transactions
as well as other factors. Accordingly, financial results in any
particular quarter may not be representative of future results over
a longer period of time.
Currently 91% of the operating partnership (Moelis & Company
Group LP) is owned by the corporate partner (Moelis & Company)
and is subject to corporate U.S. federal and state income tax. The
remaining 9% is owned by other partners of Moelis & Company
Group LP and is primarily subject to U.S. federal tax at the
partner level (certain state, local and foreign income taxes are
incurred at the company level). The Adjusted results included
herein apply certain adjustments from our GAAP results, including
the assumption that 100% of the Firm’s fourth quarter and full year
operating results were taxed at our corporate effective tax rate.
We believe the Adjusted results, when presented together with
comparable GAAP results, are useful to investors to compare our
performance across periods and to better understand our operating
results. A reconciliation between our GAAP results and our Adjusted
results is presented in the Appendix to this press release.
GAAP and Adjusted (non-GAAP) Selected
Financial Data (Unaudited)
GAAP
Adjusted (non-GAAP)*
Three Months Ended December
31,
($ in thousands except per share
data)
2023
2022
Variance
2023
2022
Variance
Revenues
$
214,878
$
207,183
4
%
$
214,878
$
202,136
6
%
Income (loss) before income
taxes
(4,204)
32,301
N/M
(3,215)
34,165
N/M
Provision (benefit) for income taxes
2,260
9,629
-77
%
1,608
8,918
-82
%
Net income (loss)
(6,464)
22,672
N/M
(4,823)
25,247
N/M
Net income (loss) attributable to
noncontrolling interests
(804)
2,617
N/M
—
—
N/M
Net income (loss) attributable to Moelis
& Company
$
(5,660)
$
20,055
N/M
$
(4,823)
$
25,247
N/M
Diluted earnings (loss) per share
$
(0.08)
$
0.28
N/M
$
(0.06)
$
0.33
N/M
N/M = not meaningful
* See Appendix for a reconciliation of
GAAP to Adjusted (non-GAAP)
GAAP
Adjusted (non-GAAP)*
Year Ended December
31,
($ in thousands except per share
data)
2023
2022
Variance
2023
2022
Variance
Revenues
$
854,748
$
985,297
-13
%
$
860,085
$
970,195
-11
%
Income (loss) before income
taxes
(29,147)
216,320
N/M
(17,233)
218,184
N/M
Provision (benefit) for income taxes
(1,631)
47,638
N/M
(2,282)
48,776
N/M
Net income (loss)
(27,516)
168,682
N/M
(14,951)
169,408
N/M
Net income (loss) attributable to
noncontrolling interests
(2,816)
18,337
N/M
—
—
N/M
Net income (loss) attributable to Moelis
& Company
$
(24,700)
$
150,345
N/M
$
(14,951)
$
169,408
N/M
Diluted earnings (loss) per share
$
(0.36)
$
2.14
N/M
$
(0.20)
$
2.22
N/M
N/M = not meaningful
* See Appendix for a reconciliation of
GAAP to Adjusted (non-GAAP)
Revenues
We earned GAAP revenues of $214.9 million in the fourth quarter
of 2023, as compared with $207.2 million in the prior year period.
On an Adjusted basis, we earned revenues of $214.9 million in the
fourth quarter of 2023, as compared with $202.1 million in the
prior year period, representing an increase of 6%. The increase in
fourth quarter revenues was driven by an increase in fees earned
from restructuring and capital markets transaction completions, as
compared with the prior year period.
For the year ended December 31, 2023, we earned GAAP revenues of
$854.7 million, as compared with $985.3 million in the prior year.
On an Adjusted basis, we earned revenues of $860.1 million, as
compared with $970.2 million in the prior year, representing a
decrease of 11%. The decrease in full year revenues was driven by a
decline in fees earned from M&A transaction completions,
partially offset by an increase in fees earned from restructuring
and capital markets transaction completions, as compared with the
prior year.
We continued to execute on our strategy of organic growth in
2023. We promoted eight advisory professionals to Managing Director
and hired 24 Managing Directors. The 24 Managing Director hires
were in areas of key strategic importance to the Firm including
Technology, Industrials, Metals & Mining, Clean Technology,
Power & Utilities, Capital Markets, Capital Structure Advisory
and Private Funds Advisory.
Since the beginning of 2024, we have added a total of 10
Managing Directors to our platform, including seven through
internal promotions, one new hire focused on enhancing the Firm's
coverage of credit funds, and two additional hires focused on
Upstream Energy that will join in the coming weeks.
The seven advisory professionals promoted to Managing Director
include: Bruno Brandao (U.S./Life Science Tools, Services and
Diagnostics), Matt Janukowicz (U.S./Hospitality & Leisure),
Craig Kolwicz (U.S./Mergers & Acquisitions), Rachel Murray
(U.S./Capital Structure Advisory), James Schiro (U.S./Private
Equity Solutions), Andrew Swift (U.S./Strategic Advisory) and Mark
Webber (U.S./Healthcare Medical Technology).
As of the date of this release, we have 160 advisory Managing
Directors on our platform.
Expenses
The following tables set forth information relating to the
Firm’s operating expenses.
GAAP
Adjusted (non-GAAP)*
Three Months Ended December
31,
($ in thousands)
2023
2022
Variance
2023
2022
Variance
Expenses:
Compensation and benefits
$
178,485
$
141,029
27
%
$
175,636
$
134,997
30
%
% of revenues
83.1
%
68.1
%
81.7
%
66.8
%
Non-compensation expenses
$
45,742
$
36,729
25
%
$
44,593
$
36,729
21
%
% of revenues
21.3
%
17.7
%
20.8
%
18.2
%
Total operating expenses
$
224,227
$
177,758
26
%
$
220,229
$
171,726
28
%
% of revenues
104.4
%
85.8
%
102.5
%
85.0
%
* See Appendix for a reconciliation of
GAAP to Adjusted (non-GAAP)
GAAP
Adjusted (non-GAAP)*
Year Ended December
31,
($ in thousands)
2023
2022
Variance
2023
2022
Variance
Expenses:
Compensation and benefits
$
714,749
$
618,195
16
%
$
711,158
$
611,219
16
%
% of revenues
83.6
%
62.7
%
82.7
%
63.0
%
Non-compensation expenses
$
180,351
$
151,002
19
%
$
178,782
$
151,002
18
%
% of revenues
21.1
%
15.3
%
20.8
%
15.6
%
Total operating expenses
$
895,100
$
769,197
16
%
$
889,940
$
762,221
17
%
% of revenues
104.7
%
78.1
%
103.5
%
78.6
%
* See Appendix for a reconciliation of
GAAP to Adjusted (non-GAAP)
Total operating expenses on a GAAP basis were $224.2 million for
the fourth quarter of 2023 and $895.1 million for the year ended
December 31, 2023. On an Adjusted basis, operating expenses were
$220.2 million for the fourth quarter of 2023, as compared with
$171.7 million in the prior year period, and $889.9 million for the
full year as compared with $762.2 million in the prior year. The
increase in Adjusted operating expenses is attributable to
increased compensation and benefits and non-compensation expenses
as compared with the prior year periods.
Compensation and benefits expenses on a GAAP basis were $178.5
million for the fourth quarter of 2023 and $714.7 million for the
year ended December 31, 2023. Adjusted compensation and benefits
expenses were $175.6 million for the fourth quarter of 2023, as
compared with $135.0 million in the prior year period. The increase
in Adjusted compensation and benefits expenses in the fourth
quarter of 2023 is attributable to increased Managing Director
headcount. For the year ended December 31, 2023, Adjusted
compensation and benefits expenses were $711.2 million, as compared
with $611.2 million in the prior year. The increase in Adjusted
compensation and benefits expenses in full year 2023 is
attributable to increased headcount as compared with the prior
year.
Non-compensation expenses on a GAAP basis were $45.7 million for
the fourth quarter of 2023 and $180.4 million for the year ended
December 31, 2023. Adjusted non-compensation expenses for the
fourth quarter of 2023 were $44.6 million, as compared with $36.7
million in the prior year period. The increase in Adjusted
non-compensation expenses in the fourth quarter of 2023 is
primarily attributable to increased professional fees and
communication and technology and occupancy expenses associated with
increased headcount. For the year ended December 31, 2023, Adjusted
non-compensation expenses were $178.8 million, as compared with
$151.0 million in the prior year. The increase in Adjusted
non-compensation expenses in full year 2023 is primarily
attributable to increased professional fees, communication and
technology expenses, and deal-related travel and entertainment
expenses as compared with the prior year.
Other Income (Expenses)
GAAP
Adjusted (non-GAAP)*
Three Months Ended December
31,
($ in thousands)
2023
2022
Variance
2023
2022
Variance
Other income (expenses)
$
5,145
$
2,876
79
%
$
2,136
$
3,755
-43
%
* See Appendix for a reconciliation of
GAAP to Adjusted (non-GAAP)
GAAP
Adjusted (non-GAAP)*
Year Ended December
31,
($ in thousands)
2023
2022
Variance
2023
2022
Variance
Other income (expenses)
$
11,205
$
220
4,993
%
$
12,622
$
10,210
24
%
* See Appendix for a reconciliation of
GAAP to Adjusted (non-GAAP)
Other income (expenses) on a GAAP basis was $5.1 million for the
fourth quarter of 2023, as compared with $2.9 million in the prior
year period. On an Adjusted basis, other income for the fourth
quarter of 2023 was $2.1 million, as compared with $3.8 million in
the prior year period.
For the year ended December 31, 2023, other income on a GAAP
basis was $11.2 million as compared with $0.2 million in the prior
year. On an Adjusted basis, other income for the year ended
December 31, 2023, was $12.6 million as compared with $10.2 million
in the prior year. For the year ended December 31, 2023, we
recorded net gains of $5.3 million on certain share sales 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.
As previously disclosed, Adjusted other income for the year
ended December 31, 2023, excludes $10.0 million of expense related
to a regulatory settlement with the SEC in the second quarter.
Additional details can be found in footnote (c) in appendix
A-4.
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 fourth
quarter and full year 2023 operating results were taxed at our
corporate effective tax rate. Together with the excess tax benefit
of approximately $3.9 million related to the delivery of
equity-based compensation for the year and the impact of certain
non-deductible expenses incurred in the ordinary course of
business, we have a net tax benefit of approximately $2.3 million
for the year.
Capital Management and Balance Sheet
Moelis & Company continues to maintain a strong financial
position, and as of December 31, 2023, we held cash and liquid
investments of $349.3 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 March 28, 2024, to common stockholders of record on
February 20, 2024.
Earnings Call
We will host a conference call beginning at 5:00pm ET on
Wednesday, February 7, 2024, accessible via telephone and the
internet. Ken Moelis, Chairman and Chief Executive Officer, and Joe
Simon, Chief Financial Officer, will review our fourth 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 non-compensation expenses and 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 December
31,
Year Ended December
31,
2023
2022
2023
2022
Revenues
$
214,878
$
207,183
$
854,748
$
985,297
Expenses
Compensation and benefits
178,485
141,029
714,749
618,195
Occupancy
8,721
6,144
28,608
24,243
Professional fees
7,418
5,038
32,796
20,971
Communication, technology and information
services
12,220
10,452
45,978
39,310
Travel and related expenses
8,430
8,018
37,005
32,416
Depreciation and amortization
2,294
2,177
8,317
7,975
Other expenses
6,659
4,900
27,647
26,087
Total Expenses
224,227
177,758
895,100
769,197
Operating income (loss)
(9,349)
29,425
(40,352)
216,100
Other income (expenses)
5,145
2,876
11,205
220
Income (loss) before income
taxes
(4,204)
32,301
(29,147)
216,320
Provision (benefit) for income taxes
2,260
9,629
(1,631)
47,638
Net income (loss)
(6,464)
22,672
(27,516)
168,682
Net income (loss) attributable to
noncontrolling interests
(804)
2,617
(2,816)
18,337
Net income (loss) attributable to Moelis
& Company
$
(5,660)
$
20,055
$
(24,700)
$
150,345
Weighted-average shares of Class A common
stock outstanding
Basic
68,880,740
65,874,665
68,501,018
65,766,439
Diluted
68,880,740
70,414,247
68,501,018
70,320,182
Net income (loss) attributable to holders
of shares of Class A common stock per share
Basic
$
(0.08)
$
0.30
$
(0.36)
$
2.29
Diluted
$
(0.08)
$
0.28
$
(0.36)
$
2.14
Moelis & Company
Reconciliation of GAAP to
Adjusted (non-GAAP) Financial Information
Unaudited
(dollars in thousands, except
share and per share data)
Three Months Ended December
31, 2023
Adjusted items
GAAP
Adjustments
Adjusted (non-GAAP)
Revenues
$
214,878
$
—
$
214,878
Compensation and benefits
178,485
(2,849)
(a)
175,636
Non-compensation expenses
45,742
(1,149)
(b)
44,593
Other income (expenses)
5,145
(3,009)
(a)(b)(c)
2,136
Income (loss) before income taxes
(4,204)
989
(3,215)
Provision (benefit) for income taxes
2,260
(652)
(c)(d)
1,608
Net income (loss)
(6,464)
1,641
(4,823)
Net income (loss) attributable to
noncontrolling interests
(804)
804
(e)
—
Net income (loss) attributable to Moelis
& Company
$
(5,660)
$
837
$
(4,823)
Weighted-average shares of Class A common
stock outstanding
Basic
68,880,740
6,286,001
(e)
75,166,741
Diluted
68,880,740
6,286,001
(e)
75,166,741
Net income (loss) attributable to holders
of shares of Class A common stock per share
Basic
$
(0.08)
$
(0.06)
Diluted
$
(0.08)
$
(0.06)
(a)
Reflects a reclassification of $2.8
million of other income to compensation and benefits expense
associated with the enforcement of non-compete provisions.
(b)
Reflects adjustments of $1.7 million
related to asset impairments associated with the Company's exit
from a duplicate U.S. office location.
(c)
Tax Receivable Agreement liability related
adjustments are made to other income (expenses) for GAAP purposes.
The adjustment of $0.7 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 for the period stated. Our Adjusted
tax provision excludes any benefits or costs related to the
adjustment to the step-up in tax basis in Group LP assets and TRA
liabilities in connection with past partnership unit exchanges;
such adjustment for this period was a net expense of $0.1 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 December
31, 2022
Adjusted items
GAAP
Adjustments
Adjusted (non-GAAP)
Revenues
$
207,183
$
(5,047)
(a)
$
202,136
Compensation and benefits
141,029
(6,032)
(b)
134,997
Other income (expenses)
2,876
879
(a)(b)(c)(d)
3,755
Income (loss) before income taxes
32,301
1,864
34,165
Provision (benefit) for income taxes
9,629
(711)
(c)(e)
8,918
Net income (loss)
22,672
2,575
25,247
Net income (loss) attributable to
noncontrolling interests
2,617
(2,617)
(f)
—
Net income (loss) attributable to Moelis
& Company
$
20,055
$
5,192
$
25,247
Weighted-average shares of Class A common
stock outstanding
Basic
65,874,665
5,888,027
(f)
71,762,692
Diluted
70,414,247
5,888,027
(f)
76,302,274
Net income (loss) attributable to holders
of shares of Class A common stock per share
Basic
$
0.30
$
0.35
Diluted
$
0.28
$
0.33
(a)
Reflects a reclassification of $5.0
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 $6.0
million of other income to compensation and benefits expense
associated with the enforcement of non-compete provisions.
(c)
Adjustments to TRA liability and
associated costs are made to other income (expenses) for GAAP
purposes. Such amounts are reclassified to the provision for income
taxes line.
(d)
Reflects an adjustment of $1.0 million in
realized losses related to the wind-up of certain Atlas Crest
Entities.
(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. Our Adjusted
effective tax rate for the period presented is 26.1%. Our adjusted
tax provision includes an expense related to the adjustment to the
tax benefit on the settlement of share-based awards of $0.5
million; excluding such discrete adjustment, our effective tax rate
for the period presented would have been 24.5%. In addition, our
Adjusted tax provision excludes any benefits or costs relating to
the adjustment to the step-up in tax basis in Group LP assets and
TRA liabilities in connection with past partnership unit exchanges
and offerings; such adjustment for this period was a net expense of
$2.4 million, which is not included in the adjusted corporate
effective tax rate 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)
Year Ended December 31,
2023
Adjusted items
GAAP
Adjustments
Adjusted (non-GAAP)
Revenues
$
854,748
$
5,337
(a)
$
860,085
Compensation and benefits
714,749
(3,591)
(b)
711,158
Non-compensation expenses
180,351
(1,569)
(c)(d)
178,782
Other income (expenses)
11,205
1,417
(a)(b)(c)(d)(e)
12,622
Income (loss) before income taxes
(29,147)
11,914
(17,233)
Provision (benefit) for income taxes
(1,631)
(651)
(e)(f)
(2,282)
Net income (loss)
(27,516)
12,565
(14,951)
Net income (loss) attributable to
noncontrolling interests
(2,816)
2,816
(g)
—
Net income (loss) attributable to Moelis
& Company
$
(24,700)
$
9,749
$
(14,951)
Weighted-average shares of Class A common
stock outstanding
Basic
68,501,018
6,238,470
(g)
74,739,488
Diluted
68,501,018
6,238,470
(g)
74,739,488
Net income (loss) attributable to holders
of shares of Class A common stock per share
Basic
$
(0.36)
$
(0.20)
Diluted
$
(0.36)
$
(0.20)
(a)
Reflects a reclassification of $5.3
million of other income to revenues related to shares sold that
were received as partial payment for advisory services provided on
certain transactions.
(b)
Reflects a reclassification of $3.6
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 resulting from a regulatory settlement with the SEC
relating to recordkeeping of business communications on messaging
applications.
(d)
Reflects adjustments of $1.7 million
related to asset impairments associated with the Company's exit
from a duplicate U.S. office location.
(e)
Tax Receivable Agreement liability related
adjustments are made to other income (expenses) for GAAP purposes.
The adjustment of $0.2 million is reclassified to the provision for
income taxes line.
(f)
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
$3.9 million, we have a net tax benefit of $2.3 million. Our
Adjusted tax provision excludes any benefits or costs related to
the adjustment to the step-up in tax basis in Group LP assets and
TRA liabilities in connection with the past partnership unit
exchanges; such adjustment for this period was a net expense of
$0.6 million, which is not included in the corporate tax provision
for the period presented.
(g)
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)
Year Ended December 31,
2022
Adjusted items
GAAP
Adjustments
Adjusted (non-GAAP)
Revenues
$
985,297
$
(15,102)
(a)
$
970,195
Compensation and benefits
618,195
(6,976)
(b)
611,219
Other income (expenses)
220
9,990
(a)(b)(c)(d)
10,210
Income (loss) before income taxes
216,320
1,864
218,184
Provision (benefit) for income taxes
47,638
1,138
(c)(e)
48,776
Net income (loss)
168,682
726
169,408
Net income (loss) attributable to
noncontrolling interests
18,337
(18,337)
(f)
—
Net income (loss) attributable to Moelis
& Company
$
150,345
$
19,063
$
169,408
Weighted-average shares of Class A common
stock outstanding
Basic
65,766,439
6,041,284
(f)
71,807,723
Diluted
70,320,182
6,041,284
(f)
76,361,466
Net income (loss) attributable to holders
of shares of Class A common stock per share
Basic
$
2.29
$
2.36
Diluted
$
2.14
$
2.22
(a)
Reflects a reclassification of $15.1
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 $7.0
million of other income to compensation and benefits expense
associated with the enforcement of non-compete provisions.
(c)
Adjustments to TRA liability and
associated costs are made to other income (expenses) for GAAP
purposes. Such amounts are reclassified to the provision for income
taxes line.
(d)
Reflects an adjustment of $1.0 million in
realized losses related to the wind-up of certain Atlas Crest
Entities.
(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. Our Adjusted
effective tax rate for the period presented is 22.4%. Our adjusted
tax provision includes a tax benefit related to the settlement of
share-based awards of $9.5 million; excluding such discrete
benefit, our effective tax rate for the period presented would have
been 26.7%. In addition, our Adjusted tax provision excludes any
benefits or costs relating to the adjustment to the step-up in tax
basis in Group LP assets and TRA liabilities in connection with
past partnership unit exchanges and offerings; such adjustment for
this period was a net expense of $2.4 million, which is not
included in the adjusted corporate effective tax rate for the
period presented.
(f)
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/20240207932281/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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