Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - MEDLEY MANAGEMENT INC. | v424808_8-k.htm |
Exhibit 99.1
MEDLEY MANAGEMENT INC. REPORTS
THIRD QUARTER 2015 RESULTS AND DECLARES $0.20 PER SHARE DIVIDEND
NEW YORK, November 16, 2015 (GLOBE NEWSWIRE) -- Medley Management Inc. (NYSE: MDLY) today reported its financial results for the three months ended September 30, 2015.
Highlights
| · | Total assets under management were $4.0 billion |
| · | Fee earning assets under management were $3.4 billion |
| · | Core Net Income Per Share was $0.01 for Q3 2015 |
| · | U.S. GAAP net income attributable to Medley Management Inc. was $0.04 per share for Q3 2015 |
| · | Declared $0.20 per share dividend for Q3 2015 payable on December 4, 2015 |
| · | Raised over $500 million of new institutional AUM following quarter-end |
“We are pleased with our performance at Medley over the past year. We now have over $4.5 billion of AUM at the firm, having raised over $500 million from institutional investors already this current quarter,” said Seth Taube, Co-Chief Executive Officer of Medley Management Inc. “For the September quarter, our overall financial results were impacted by significant market volatility. Despite the challenging market environment, our underlying business remains strong, and this same market volatility is creating an increasingly attractive backdrop to deploy capital.”
Standalone Results of Operations for the Three Months Ended September 30, 2015
Management fees increased by 3%, or $0.5 million, to $18.1 million for the three months ended September 30, 2015 as compared to $17.6 million for the same period in 2014. This increase was offset by a reversal in performance fee revenue and a decrease in other income and fees to $(12.7) million for the three months ended September 30, 2015 compared to $6.2 million for the same period in 2014. The decrease of performance fee revenue was due primarily to the reversal of performance fees of our private funds as a result of a decrease in the asset values within their underlying portfolios. Total revenues decreased by 77%, or $18.4 million, to $5.4 million for the three months ended September 30, 2015 compared to $23.8 million for the same period in 2014. Exclusive of the impact of performance fees, total revenues would have decreased by 2%, or $0.4 million, to $20.0 million for the three months ended September 30, 2015 compared to $20.4 million for the same period in 2014.
Total expenses decreased by 53%, or $4.3 million, to $3.9 million for the three months ended September 30, 2015 compared to $8.2 million for the same period in 2014. The decrease was due primarily to reversals in performance fee compensation. Exclusive of performance fee compensation, total expenses would have decreased by 17%, or $1.6 million, to $7.5 million for the three months ended September 30, 2015 compared to $9.1 million for the same period in 2014.
Total other expense, net increased by $0.9 million to $2.8 million for the three months ended September 30, 2015 compared to $1.9 million for the same period in 2014. The increase was due primarily to a $0.8 million increase in other expenses.
Pre-Tax Core Net Income decreased by $12.8 million, to $0.5 million for the three months ended September 30, 2015 compared to the same period in 2014. Core Net Income Per Share was $0.01 per share for the three months ended September 30, 2015, compared to $0.25 per share for the same period in 2014. Exclusive of the impact of performance fees1, Pre-Tax Core Net Income would have decreased by $1.3 million, to $8.3 million for the three months ended September 30, 2015 compared to the same period in 2014. Exclusive of the impact of performance fees1, Core Net Income Per Share would have been $0.16 per share for the three months ended September 30, 2015, compared to $0.18 per share for the same period in 2014.
Core EBITDA decreased by $12.6 million, to $2.8 million for the three months ended September 30, 2015 compared to $15.4 million for the same period in 2014. Exclusive of the impact of performance fees1, Core EBITDA would have decreased by $1.2 million, to $10.5 million for the three months ended September 30, 2015 compared to $11.7 million for the same period in 2014.
Standalone Results of Operations for the Nine Months Ended September 30, 2015
Management fees increased by 19%, or $9.1 million, to $56.6 million for the nine months ended September 30, 2015 compared to $47.5 million for the same period in 2014. This increase was offset by a decrease in performance fee revenue and other income and fees to $(5.1) million for the nine months ended September 30, 2015 compared to $18.7 million for the same period in 2014. Total revenues decreased by 22%, or $14.7 million, to $51.4 million for the nine months ended September 30, 2015 compared to $66.2 million for the same period in 2014. Exclusive of performance fees, total revenues would have increased by 13%, or $7.4 million, to $62.1 million for the nine months ended September 30, 2015 compared to $54.7 million for the same period in 2014.
Total expenses decreased by 14% or, $4.4 million, to $25.7 million for the nine months ended September 30, 2015 compared to $30.1 million for the same period in 2014. The variance was due primarily to reversals in performance fee compensation. Exclusive of performance fee compensation, total expenses would have increased by 9% or $2.5 million to $30.3 million for the nine months ended September 30, 2015 compared to $27.8 million for the same period in 2014.
Total other expense, net increased by $2.3 million to $6.8 million for the nine months ended September 30, 2015 compared to $4.4 million for the same period in 2014. The increase was due primarily to a $3.0 million increase in interest expense.
Pre-Tax Core Net Income decreased by 18%, or $5.5 million, to $25.4 million for the nine months ended September 30, 2015 compared to $30.9 million for the same period in 2014. Core Net Income Per Share decreased by 17% to $0.48 per share for the nine months ended September 30, 2015, compared to $0.58 per share for the same period in 2014. Exclusive of the impact of performance fees1, Pre-Tax Core Net Income would have increased by 20%, or $4.7 million, to $28.6 million for the nine months ended September 30, 2015 compared to $23.9 million for the same period in 2014. Exclusive of the impact of performance fees1, Core Net Income Per Share would have increased by 18% to $0.53 per share for the nine months ended September 30, 2015, compared to $0.45 per share for the same period in 2014
Core EBITDA decreased by $2.5 million to $32.1 million for the nine months ended September 30, 2015 compared to $34.6 million for the same period in 2014. Exclusive of the impact of performance fees1, Core EBITDA would have increased by $7.7 million to $35.2 million for the nine months ended September 30, 2015 compared to $27.5 million for the same period in 2014.
| Investor Contact | Media Contact |
| Sam Anderson | Liz Bruce – Fitzroy Communications |
| 212.759.0777 | 212.498.9197 |
1 The impact of performance fees on our standalone income statement includes the impact of performance fee revenue, performance fee compensation and the portion of net income attributable to non-controlling interests in consolidated subsidiaries relating to performance fee revenue.
Medley has also provided additional information in its Third Quarter 2015 Earnings Presentation, which can be viewed at www.mdly.com under “Investor Relations – Events/Investor Presentations.”
Note: The financial results prior to September 29, 2014 reflect those of our operating subsidiaries, Medley LLC and Medley GP Holdings LLC and their consolidated subsidiaries prior to our initial public offering (“IPO”) and the related reorganization.
Key Performance Indicators:
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| (Amounts in thousands, except AUM, share and per share data) | ||||||||||||||||
| Consolidated Financial Data: | ||||||||||||||||
| Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC | $ | 1,057 | $ | 12,513 | $ | 18,161 | $ | 28,482 | ||||||||
| Standalone Data: | ||||||||||||||||
| Pre-Tax Core Net Income (1) | $ | 540 | $ | 13,297 | $ | 25,434 | $ | 30,925 | ||||||||
| Core Net Income (1) | 701 | 12,713 | 22,877 | 29,858 | ||||||||||||
| Core EBITDA (2) | 2,790 | 15,416 | 32,110 | 34,594 | ||||||||||||
| Core Net Income Per Share (3) | $ | 0.01 | $ | 0.25 | $ | 0.48 | $ | 0.58 | ||||||||
| Core Net Income Margin (4) | 5.7 | % | 31.8 | % | 28.2 | % | 26.6 | % | ||||||||
| Pro-Forma Weighted Average Shares Outstanding (5) | 30,455,796 | 30,484,637 | 30,456,326 | 30,484,693 | ||||||||||||
| Other Data (at period end, in millions): | ||||||||||||||||
| AUM | $ | 4,002 | $ | 3,635 | $ | 4,002 | $ | 3,635 | ||||||||
| Fee Earning AUM | 3,401 | 3,036 | 3,401 | 3,036 | ||||||||||||
| (1) | Pre-Tax Core Net Income is calculated as Core Net Income before income taxes. Core Net Income reflects standalone net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC adjusted to exclude reimbursable expenses associated with the launch of funds, certain one-time severance costs and stock-based compensation associated with restricted stock units that were granted in connection with our IPO. In addition, for the three and nine months ended September 30, 2014, Core Net Income includes the pro-forma adjustment to reflect guaranteed payments to Medley LLC members as compensation expense, that, prior to our reorganization and IPO, were recorded as distributions from members’ capital. Please refer to the reconciliation of Core Net Income to Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC in Exhibit B for additional details. |
| (2) | Core EBITDA is calculated as Core Net Income before interest expense, income taxes and depreciation. Please refer to the reconciliation of Core EBITDA to Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC in Exhibit B for additional details. |
| (3) | 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 are subject to federal, state and local corporate income taxes, divided by Pro-Forma Weighted Average Shares Outstanding (as defined below). We assumed an effective corporate tax rate of 43.0% for all periods presented. Please refer to the calculation of Core Net Income Per Share in Exhibit B and C for additional details. |
| (4) | Core Net Income Margin equals Core Net Income Per Share divided by total standalone revenue per share for the respective periods presented. |
| (5) | The calculation of Pro-Forma Weighted Average Shares Outstanding assumes the conversion by the pre-IPO holders of 23,333,333 Medley LLC units for 23,333,333 shares of Class A common stock at the beginning of each period presented and, at the beginning of each period in 2014, the issuance of 6,000,000 shares of Class A common stock in connection with our IPO and the grant of 1,151,389 restricted stock units in connection with our IPO, adjusted for actual forfeitures and additional grants during the period. |
Fee Earning AUM
The table below presents the quarter to date roll forward of our total fee earning AUM:
| % of AUM | ||||||||||||||||||||
| Permanent | Long-dated | Permanent | Long-dated | |||||||||||||||||
| Capital | Private Funds | Capital | Private Funds | |||||||||||||||||
| Vehicles | and SMAs | Total | Vehicles | and SMAs | ||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||
| Beginning balance, June 30, 2015 | $ | 2,241 | $ | 1,109 | $ | 3,350 | 67 | % | 33 | % | ||||||||||
| Commitments | 143 | 21 | 164 | |||||||||||||||||
| Capital reduction | (12 | ) | - | (12 | ) | |||||||||||||||
| Distributions | (32 | ) | (18 | ) | (50 | ) | ||||||||||||||
| Change in fund value | (34 | ) | (17 | ) | (51 | ) | ||||||||||||||
| Ending balance, September 30, 2015 | $ | 2,306 | $ | 1,095 | $ | 3,401 | 68 | % | 32 | % | ||||||||||
Total fee earning AUM increased by 2%, or $51 million, to $3.4 billion at September 30, 2015 compared to June 30, 2015. The permanent capital vehicles’ share of fee earning AUM increased to 68% at September 30, 2015 compared to 67% at June 30, 2015.
The table below presents the year-to-date roll forward of our total fee earning AUM:
| % of AUM | ||||||||||||||||||||
| Permanent | Long-dated | Permanent | Long-dated | |||||||||||||||||
| Capital | Private Funds | Capital | Private Funds | |||||||||||||||||
| Vehicles | and SMAs | Total | Vehicles | and SMAs | ||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||
| Beginning balance, December 31, 2014 | $ | 2,047 | $ | 1,011 | $ | 3,058 | 67 | % | 33 | % | ||||||||||
| Commitments | 360 | 209 | 569 | |||||||||||||||||
| Capital reduction | (22 | ) | (17 | ) | (39 | ) | ||||||||||||||
| Distributions | (104 | ) | (86 | ) | (190 | ) | ||||||||||||||
| Change in fund value | 25 | (22 | ) | 3 | ||||||||||||||||
| Ending balance, September 30, 2015 | $ | 2,306 | $ | 1,095 | $ | 3,401 | 68 | % | 32 | % | ||||||||||
Total fee earning AUM increased by 11%, or $342 million, to $3.4 billion at September 30, 2015 compared to December 31, 2014. The permanent capital vehicles’ share of fee earning AUM increased to 68% at September 30, 2015 compared to 67% at December 31, 2014.
Dividend Declaration
On November 12, 2015, the Company’s Board of Directors declared a quarterly dividend of $0.20 per share of Class A common stock, for the third quarter 2015, payable on December 4, 2015, to shareholders of record of the Company’s Class A common stock as of the close of business on November 25, 2015.
Subsequent Event
Following quarter end, Medley executed investment management agreements with new and existing institutional investors, increasing AUM by in excess of $500 million. These commitments increased our assets under management to over $4.5 billion.
Conference Call and Webcast Information
We will host an earnings conference call and audio webcast at 10:00 a.m. (Eastern Time) on Monday November 16, 2015 to discuss our third quarter 2015 financial results.
All interested parties may participate in the conference call by dialing (877) 474-9504 approximately 5-10 minutes prior to the call. International callers should dial (857) 244-7557. Participants should reference Medley Management Inc. and the participant passcode of 77294151 when prompted. Following the call you may access a replay of the event via audio webcast. This conference call will be broadcast live over the Internet and can be accessed by all interested parties through the Company's website, http://www.mdly.com. To listen to the live call, please go to the Company's website at least 15 minutes prior to the start of the call to register and download any necessary audio software. For those who are not able to listen to the live broadcast, a replay will be available shortly after the call on the Company's website.
About Medley
Medley is an asset management firm offering yield solutions to retail and institutional investors. Medley's national direct origination franchise, with over 80 people, is a premier provider of capital to the middle market in the U.S. As of November 11, 2015, Medley had in excess of $4.5 billion of assets under management in two business development companies, Medley Capital Corporation (NYSE:MCC), the Sierra Income Corporation, as well as private investment vehicles. Over the past 13 years, we have invested in excess of $6.0 billion to help over 300 companies grow across 35 industries in North America. For additional information, please visit Medley Management Inc. at www.mdly.com.
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, 2014. 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.
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.
Exhibit A. Standalone Statements of Operations of Medley Management Inc. (Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| (Amounts in thousands) | ||||||||||||||||
| Revenues | ||||||||||||||||
| Management fees | $ | 18,135 | $ | 17,616 | $ | 56,578 | $ | 47,516 | ||||||||
| Performance fees | (14,595 | ) | 3,395 | (10,627 | ) | 11,471 | ||||||||||
| Other revenues and fees | 1,891 | 2,787 | 5,496 | 7,183 | ||||||||||||
| Total revenues | 5,431 | 23,798 | 51,447 | 66,170 | ||||||||||||
| Expenses | ||||||||||||||||
| Compensation and benefits | 5,914 | 5,677 | 19,532 | 15,010 | ||||||||||||
| Performance fee compensation | (3,660 | ) | (921 | ) | (4,578 | ) | 2,237 | |||||||||
| General, administrative and other expenses | 1,626 | 3,458 | 10,756 | 12,821 | ||||||||||||
| Total expenses | 3,880 | 8,214 | 25,710 | 30,068 | ||||||||||||
| Other income (expense) | ||||||||||||||||
| Dividend income | 222 | 222 | 665 | 665 | ||||||||||||
| Interest expense | (2,141 | ) | (2,016 | ) | (6,335 | ) | (3,380 | ) | ||||||||
| Other expenses, net | (838 | ) | (87 | ) | (1,087 | ) | (1,707 | ) | ||||||||
| Total other expense, net | (2,757 | ) | (1,881 | ) | (6,757 | ) | (4,422 | ) | ||||||||
| Income before income taxes | $ | (1,206 | ) | $ | 13,703 | $ | 18,980 | $ | 31,680 | |||||||
| Provision for (benefit from) income taxes | (113 | ) | 578 | 1,953 | 1,026 | |||||||||||
| Net income (loss) | (1,093 | ) | 13,125 | 17,027 | 30,654 | |||||||||||
| Net income (loss) attributable to non-controlling interests in consolidated subsidiaries | (2,150 | ) | 612 | (1,134 | ) | 2,172 | ||||||||||
| Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC | $ | 1,057 | $ | 12,513 | $ | 18,161 | $ | 28,482 | ||||||||
Exhibit B. Reconciliation of Standalone Core Net Income and Core EBITDA to Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| (Amounts in thousands) | ||||||||||||||||
| Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC | $ | 1,057 | $ | 12,513 | $ | 18,161 | $ | 28,482 | ||||||||
| Reimbursable fund startup expenses (1) | (943 | ) | 1,195 | 2,751 | 4,591 | |||||||||||
| Severance expense (1) | - | - | 121 | (5 | ) | |||||||||||
| IPO date award stock-based compensation (1) | 587 | 74 | 1,844 | 74 | ||||||||||||
| Adjustment for pre-IPO guaranteed payments to members (1)(2) | - | (1,069 | ) | - | (3,284 | ) | ||||||||||
| Core Net Income | $ | 701 | $ | 12,713 | $ | 22,877 | $ | 29,858 | ||||||||
| Interest expense | 2,141 | 2,016 | 6,335 | 3,380 | ||||||||||||
| Income taxes | (161 | ) | 584 | 2,557 | 1,067 | |||||||||||
| Depreciation and amortization | 109 | 103 | 341 | 289 | ||||||||||||
| Core EBITDA | $ | 2,790 | $ | 15,416 | $ | 32,110 | $ | 34,594 | ||||||||
| (1) | Amounts are presented net of income taxes. |
| (2) | Represents a pro-forma adjustment to reflect guaranteed payments to Medley LLC members as compensation expense, that, prior to our reorganization and IPO, were treated as distributions from members’ capital. |
Exhibit C. Calculation of Core Net Income Per Share (Standalone)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| (Amounts in thousands, except share and per share amounts) | ||||||||||||||||
| Numerator | ||||||||||||||||
| Core Net Income | $ | 701 | $ | 12,713 | $ | 22,877 | $ | 29,858 | ||||||||
| Add: Income taxes | (161 | ) | 584 | 2,557 | 1,067 | |||||||||||
| Pre-Tax Core Net Income | 540 | 13,297 | 25,434 | 30,925 | ||||||||||||
| Denominator | ||||||||||||||||
| Class A shares | 6,000,211 | 6,000,000 | 6,000,071 | 6,000,000 | ||||||||||||
| Conversion of LLC Units to Class A shares | 23,333,333 | 23,333,333 | 23,333,333 | 23,333,333 | ||||||||||||
| Restricted stock units (1) | 1,122,252 | 1,151,304 | 1,122,922 | 1,151,360 | ||||||||||||
| Pro-Forma Weighted Average Shares Outstanding (1) | 30,455,796 | 30,484,637 | 30,456,326 | 30,484,693 | ||||||||||||
| Pre-Tax Core Net Income Per Share | $ | 0.02 | $ | 0.44 | $ | 0.84 | $ | 1.01 | ||||||||
| Less: corporate income taxes per share (2) | (0.01 | ) | (0.19 | ) | (0.36 | ) | (0.43 | ) | ||||||||
| Core Net Income Per Share | $ | 0.01 | $ | 0.25 | $ | 0.48 | $ | 0.58 | ||||||||
| (1) | The calculation of Pro-Forma Weighted Average Shares Outstanding assumes the conversion by the pre-IPO holders of 23,333,333 Medley LLC units for 23,333,333 shares of Class A common stock at the beginning of each period presented and, at the beginning of each period in 2014, the issuance of 6,000,000 shares of Class A common stock in connection with our IPO and the grant of 1,151,389 restricted stock units in connection with our IPO, adjusted for actual forfeitures and additional grants during the period. |
| (2) | Represents a per share adjustment for income taxes assuming that all of our standalone pre-tax earnings were subject to federal, state and local income taxes. We assumed an effective corporate tax rate of 43.0% for all periods presented. |
Exhibit D. Condensed Consolidated Statements of Operations of Medley Management Inc. (Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| (Amounts in thousands, except share and per share data) | ||||||||||||||||
| Revenues | ||||||||||||||||
| Management fees | $ | 15,870 | $ | 17,013 | $ | 52,280 | $ | 43,466 | ||||||||
| Performance fees | (1,948 | ) | 965 | 920 | 3,337 | |||||||||||
| Other revenues and fees | 1,891 | 2,787 | 5,496 | 7,183 | ||||||||||||
| Total revenues | 15,813 | 20,765 | 58,696 | 53,986 | ||||||||||||
| Expenses | ||||||||||||||||
| Compensation and benefits | 5,914 | 5,677 | 19,532 | 15,010 | ||||||||||||
| Performance fee compensation | (3,660 | ) | (921 | ) | (4,578 | ) | 2,237 | |||||||||
| Consolidated Funds expenses | 542 | 296 | 1,969 | 1,129 | ||||||||||||
| General, administrative and other expenses | 1,626 | 3,458 | 10,756 | 12,821 | ||||||||||||
| Total expenses | 4,422 | 8,510 | 27,679 | 31,197 | ||||||||||||
| Other income (expense) | ||||||||||||||||
| Dividend income | 222 | 222 | 665 | 665 | ||||||||||||
| Interest expense | (2,141 | ) | (2,016 | ) | (6,335 | ) | (3,380 | ) | ||||||||
| Other expenses, net | (865 | ) | (268 | ) | (1,317 | ) | (1,586 | ) | ||||||||
| Interest and other income of Consolidated Funds | 21,843 | 17,880 | 61,739 | 51,476 | ||||||||||||
| Interest expense of Consolidated Funds | (3,804 | ) | (2,524 | ) | (11,418 | ) | (5,586 | ) | ||||||||
| Net realized gain (loss) on investments of Consolidated Funds | (31,965 | ) | (499 | ) | (31,013 | ) | 789 | |||||||||
| Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds | 16,011 | (2,369 | ) | 13,616 | (9,540 | ) | ||||||||||
| Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds | 1,610 | 1,300 | 1,112 | 103 | ||||||||||||
| Total other income, net | 911 | 11,726 | 27,049 | 32,941 | ||||||||||||
| Income before income taxes | 12,302 | 23,981 | 58,066 | 55,730 | ||||||||||||
| Provision for (benefit from) income taxes | (77 | ) | 923 | 2,864 | 2,174 | |||||||||||
| Net income | 12,379 | 23,058 | 55,202 | 53,556 | ||||||||||||
| Net income attributable to non-controlling interests in Consolidated Funds | 13,472 | 9,933 | 38,175 | 22,902 | ||||||||||||
| Net income (loss) attributable to non-controlling interests in consolidated subsidiaries | (2,150 | ) | 612 | (1,134 | ) | 2,172 | ||||||||||
| Net income attributable to non-controlling interests in Medley LLC | 785 | $ | 12,135 | 15,576 | $ | 28,104 | ||||||||||
| Net income attributable to Medley Management Inc. | $ | 272 | 378 | $ | 2,585 | 378 | ||||||||||
| Net income per Class A common stock: | ||||||||||||||||
| Basic | $ | 0.04 | $ | 0.05 | (1) | $ | 0.38 | $ | 0.05 | (1) | ||||||
| Diluted | $ | 0.04 | $ | 0.05 | (1) | $ | 0.38 | $ | 0.05 | (1) | ||||||
| Weighted average shares - Basic and Diluted | 6,000,211 | 6,000,000 | 6,000,071 | 6,000,000 | ||||||||||||
| (1) | Based on net income attributable to Medley Management Inc. from September 29, 2014 to September 30, 2014. |
Exhibit E. Condensed Consolidated Balance Sheets of Medley Management Inc.
| As of | ||||||||
| September 30, | As of | |||||||
| 2015 | December 31, | |||||||
| (unaudited) | 2014 | |||||||
| (Amounts in thousands) | ||||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 63,754 | $ | 87,206 | ||||
| Investments, at fair value | 10,884 | 9,901 | ||||||
| Management fees receivable | 14,800 | 15,173 | ||||||
| Performance fees receivable | 6,493 | 5,573 | ||||||
| Other assets | 13,966 | 9,230 | ||||||
| Assets of Consolidated Funds: | ||||||||
| Cash and cash equivalents | 105,122 | 38,111 | ||||||
| Investments, at fair value | 778,971 | 734,870 | ||||||
| Interest and dividends receivable | 6,124 | 6,654 | ||||||
| Other assets | 3,803 | 3,681 | ||||||
| Total assets | $ | 1,003,917 | $ | 910,399 | ||||
| Liabilities and Equity | ||||||||
| Loans payable | $ | 102,697 | $ | 103,057 | ||||
| Accounts payable, accrued expenses and other liabilities | 20,739 | 27,583 | ||||||
| Performance fee compensation payable | 5,759 | 11,807 | ||||||
| Liabilities of Consolidated Funds: | ||||||||
| Accounts payable, accrued expenses and other liabilities | 2,199 | 5,767 | ||||||
| Secured borrowings | 134,047 | 141,135 | ||||||
| Total liabilities | 265,441 | 289,349 | ||||||
| Equity | ||||||||
| Class A Common Stock | 60 | 60 | ||||||
| Class B Common Stock | - | - | ||||||
| Capital deficit | (8 | ) | (2,384 | ) | ||||
| Retained earnings | 108 | 272 | ||||||
| Total stockholders' equity (deficit), Medley Management Inc. | 160 | (2,052 | ) | |||||
| Non-controlling interests in Consolidated Funds | 755,827 | 625,548 | ||||||
| Non-controlling interests in consolidated subsidiaries | (708 | ) | 1,526 | |||||
| Non-controlling interests in Medley LLC | (16,803 | ) | (3,972 | ) | ||||
| Total equity | 738,476 | 621,050 | ||||||
| Total liabilities and equity | $ | 1,003,917 | $ | 910,399 | ||||
Exhibit F. Condensed Consolidating Statements of Operations and Consolidated Balance Sheets of Medley Management Inc. (Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)
| For the Three Months Ended September 30, 2015 | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Consolidated | ||||||||||||||||
| Standalone | Funds | Eliminations | Consolidated | |||||||||||||
| (Amounts in thousands) | ||||||||||||||||
| Revenues: | ||||||||||||||||
| Management fees | $ | 18,135 | $ | - | $ | (2,265 | ) | $ | 15,870 | |||||||
| Performance fees | (14,595 | ) | - | 12,647 | (1,948 | ) | ||||||||||
| Other revenues and fees | 1,891 | - | - | 1,891 | ||||||||||||
| Total revenues | 5,431 | - | 10,382 | 15,813 | ||||||||||||
| Expenses: | ||||||||||||||||
| Compensation and benefits | 5,914 | - | - | 5,914 | ||||||||||||
| Performance fee compensation | (3,660 | ) | - | - | (3,660 | ) | ||||||||||
| Consolidated Funds expenses | - | 2,807 | (2,265 | ) | 542 | |||||||||||
| General, administrative and other expenses | 1,626 | - | - | 1,626 | ||||||||||||
| Total expenses | 3,880 | 2,807 | (2,265 | ) | 4,422 | |||||||||||
| Other income (expense): | ||||||||||||||||
| Dividend income | 222 | - | - | 222 | ||||||||||||
| Interest expense | (2,141 | ) | - | - | (2,141 | ) | ||||||||||
| Other income (expenses), net | (838 | ) | - | (27 | ) | (865 | ) | |||||||||
| Interest and other income of Consolidated Funds | - | 21,843 | - | 21,843 | ||||||||||||
| Interest expense of Consolidated Funds | - | (3,804 | ) | - | (3,804 | ) | ||||||||||
| Net realized gain (loss) on investments of Consolidated Funds | - | (31,965 | ) | - | (31,965 | ) | ||||||||||
| Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds | - | 16,011 | - | 16,011 | ||||||||||||
| Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds | - | 1,610 | - | 1,610 | ||||||||||||
| Total other income (expense), net | (2,757 | ) | 3,695 | (27 | ) | 911 | ||||||||||
| Income (loss) before income taxes | (1,206 | ) | 888 | 12,620 | 12,302 | |||||||||||
| Provision for (benefit from) income taxes | (113 | ) | 36 | - | (77 | ) | ||||||||||
| Net income (loss) | (1,093 | ) | 852 | 12,620 | 12,379 | |||||||||||
| Net income attributable to non-controlling interests in Consolidated Funds | - | - | 13,472 | 13,472 | ||||||||||||
| Net income (loss) attributable to non-controlling interests in consolidated subsidiaries | (2,150 | ) | - | - | (2,150 | ) | ||||||||||
| Net income attributable to non-controlling interests in Medley LLC | 785 | - | - | 785 | ||||||||||||
| Net income attributable to Medley Management Inc. | $ | 272 | $ | 852 | $ | (852 | ) | $ | 272 | |||||||
| For the Nine Months Ended September 30, 2015 | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Consolidated | ||||||||||||||||
| Standalone | Funds | Eliminations | Consolidated | |||||||||||||
| (Amounts in thousands) | ||||||||||||||||
| Revenues: | ||||||||||||||||
| Management fees | $ | 56,578 | $ | - | $ | (4,298 | ) | $ | 52,280 | |||||||
| Performance fees | (10,627 | ) | - | 11,547 | 920 | |||||||||||
| Other revenues and fees | 5,496 | - | - | 5,496 | ||||||||||||
| Total revenues | 51,447 | - | 7,249 | 58,696 | ||||||||||||
| Expenses: | ||||||||||||||||
| Compensation and benefits | 19,532 | - | - | 19,532 | ||||||||||||
| Performance fee compensation | (4,578 | ) | - | - | (4,578 | ) | ||||||||||
| Consolidated Funds expenses | - | 6,267 | (4,298 | ) | 1,969 | |||||||||||
| General, administrative and other expenses | 10,756 | - | - | 10,756 | ||||||||||||
| Total expenses | 25,710 | 6,267 | (4,298 | ) | 27,679 | |||||||||||
| Other income (expense): | ||||||||||||||||
| Dividend income | 665 | - | - | 665 | ||||||||||||
| Interest expense | (6,335 | ) | - | - | (6,335 | ) | ||||||||||
| Other income (expenses), net | (1,087 | ) | - | (230 | ) | (1,317 | ) | |||||||||
| Interest and other income of Consolidated Funds | - | 61,739 | - | 61,739 | ||||||||||||
| Interest expense of Consolidated Funds | - | (11,418 | ) | - | (11,418 | ) | ||||||||||
| Net realized gain (loss) on investments of Consolidated Funds | - | (31,013 | ) | - | (31,013 | ) | ||||||||||
| Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds | - | 13,616 | - | 13,616 | ||||||||||||
| Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds | - | 1,112 | - | 1,112 | ||||||||||||
| Total other income (expense), net | (6,757 | ) | 34,036 | (230 | ) | 27,049 | ||||||||||
| Income before income taxes | 18,980 | 27,769 | 11,317 | 58,066 | ||||||||||||
| Provision for income taxes | 1,953 | 911 | - | 2,864 | ||||||||||||
| Net income | 17,027 | 26,858 | 11,317 | 55,202 | ||||||||||||
| Net income attributable to non-controlling interests in Consolidated Funds | - | - | 38,175 | 38,175 | ||||||||||||
| Net income (loss) attributable to non-controlling interests in consolidated subsidiaries | (1,134 | ) | - | - | (1,134 | ) | ||||||||||
| Net income attributable to non-controlling interests in Medley LLC | 15,576 | - | - | 15,576 | ||||||||||||
| Net income attributable to Medley Management Inc. | $ | 2,585 | $ | 26,858 | $ | (26,858 | ) | $ | 2,585 | |||||||
| For the Three Months Ended September 30, 2014 | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Consolidated | ||||||||||||||||
| Standalone | Funds | Eliminations | Consolidated | |||||||||||||
| (Amounts in thousands) | ||||||||||||||||
| Revenues: | ||||||||||||||||
| Management fees | $ | 17,616 | $ | - | $ | (603 | ) | $ | 17,013 | |||||||
| Performance fees | 3,395 | - | (2,430 | ) | 965 | |||||||||||
| Other revenues and fees | 2,787 | - | - | 2,787 | ||||||||||||
| Total revenues | 23,798 | - | (3,033 | ) | 20,765 | |||||||||||
| Expenses: | ||||||||||||||||
| Compensation and benefits | 5,677 | - | - | 5,677 | ||||||||||||
| Performance fee compensation | (921 | ) | - | - | (921 | ) | ||||||||||
| Consolidated Funds expenses | - | 899 | (603 | ) | 296 | |||||||||||
| General, administrative and other expenses | 3,458 | - | - | 3,458 | ||||||||||||
| Total expenses | 8,214 | 899 | (603 | ) | 8,510 | |||||||||||
| Other income (expense): | ||||||||||||||||
| Dividend income | 222 | - | - | 222 | ||||||||||||
| Interest expense | (2,016 | ) | - | - | (2,016 | ) | ||||||||||
| Other income (expenses), net | (87 | ) | - | (181 | ) | (268 | ) | |||||||||
| Interest and other income of Consolidated Funds | - | 17,880 | - | 17,880 | ||||||||||||
| Interest expense of Consolidated Funds | - | (2,524 | ) | - | (2,524 | ) | ||||||||||
| Net realized gain (loss) on investments of Consolidated Funds | - | (499 | ) | - | (499 | ) | ||||||||||
| Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds | - | (2,369 | ) | - | (2,369 | ) | ||||||||||
| Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds | - | 1,300 | - | 1,300 | ||||||||||||
| Total other income (expense), net | (1,881 | ) | 13,788 | (181 | ) | 11,726 | ||||||||||
| Income before income taxes | 13,703 | 12,889 | (2,611 | ) | 23,981 | |||||||||||
| Provision for income taxes | 578 | 345 | - | 923 | ||||||||||||
| Net income | 13,125 | 12,544 | (2,611 | ) | 23,058 | |||||||||||
| Net income attributable to non-controlling interests in Consolidated Funds | - | - | 9,933 | 9,933 | ||||||||||||
| Net income attributable to non-controlling interests in consolidated subsidiaries | 612 | - | - | 612 | ||||||||||||
| Net income attributable to non-controlling interests in Medley LLC | 12,135 | - | - | 12,135 | ||||||||||||
| Net income attributable to Medley LLC | $ | 378 | $ | 12,544 | $ | (12,544 | ) | $ | 378 | |||||||
| For the Nine Months Ended September 30, 2014 | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Consolidated | ||||||||||||||||
| Standalone | Funds | Eliminations | Consolidated | |||||||||||||
| (Amounts in thousands) | ||||||||||||||||
| Revenues: | ||||||||||||||||
| Management fees | $ | 47,516 | $ | - | $ | (4,050 | ) | $ | 43,466 | |||||||
| Performance fees | 11,471 | - | (8,134 | ) | 3,337 | |||||||||||
| Other revenues and fees | 7,183 | - | - | 7,183 | ||||||||||||
| Total revenues | 66,170 | - | (12,184 | ) | 53,986 | |||||||||||
| Expenses: | ||||||||||||||||
| Compensation and benefits | 15,010 | - | - | 15,010 | ||||||||||||
| Performance fee compensation | 2,237 | - | - | 2,237 | ||||||||||||
| Consolidated Funds expenses | - | 5,179 | (4,050 | ) | 1,129 | |||||||||||
| General, administrative and other expenses | 12,821 | - | - | 12,821 | ||||||||||||
| Total expenses | 30,068 | 5,179 | (4,050 | ) | 31,197 | |||||||||||
| Other income (expense): | ||||||||||||||||
| Dividend income | 665 | - | - | 665 | ||||||||||||
| Interest expense | (3,380 | ) | - | - | (3,380 | ) | ||||||||||
| Other income (expenses), net | (1,707 | ) | - | 121 | (1,586 | ) | ||||||||||
| Interest and other income of Consolidated Funds | - | 51,476 | - | 51,476 | ||||||||||||
| Interest expense of Consolidated Funds | - | (5,586 | ) | - | (5,586 | ) | ||||||||||
| Net realized gain (loss) on investments of Consolidated Funds | - | 789 | - | 789 | ||||||||||||
| Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds | - | (9,540 | ) | - | (9,540 | ) | ||||||||||
| Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds | - | 103 | - | 103 | ||||||||||||
| Total other income (expense), net | (4,422 | ) | 37,242 | 121 | 32,941 | |||||||||||
| Income before income taxes | 31,680 | 32,063 | (8,013 | ) | 55,730 | |||||||||||
| Provision for income taxes | 1,026 | 1,148 | - | 2,174 | ||||||||||||
| Net income | 30,654 | 30,915 | (8,013 | ) | 53,556 | |||||||||||
| Net income attributable to non-controlling interests in Consolidated Funds | - | - | 22,902 | 22,902 | ||||||||||||
| Net income attributable to non-controlling interests in consolidated subsidiaries | 2,172 | - | - | 2,172 | ||||||||||||
| Net income attributable to non-controlling interests in Medley LLC | 28,104 | - | - | 28,104 | ||||||||||||
| Net income attributable to Medley LLC | $ | 378 | $ | 30,915 | $ | (30,915 | ) | $ | 378 | |||||||
| As of September 30, 2015 | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Consolidated | ||||||||||||||||
| Standalone | Funds | Eliminations | Consolidated | |||||||||||||
| (Amounts in thousands) | ||||||||||||||||
| Assets | ||||||||||||||||
| Cash and cash equivalents | $ | 63,754 | $ | - | $ | - | $ | 63,754 | ||||||||
| Investments, at fair value | 11,114 | - | (230 | ) | 10,884 | |||||||||||
| Management fees receivable | 15,215 | - | (415 | ) | 14,800 | |||||||||||
| Performance fees receivable | 6,493 | - | - | 6,493 | ||||||||||||
| Other assets | 15,268 | - | (1,302 | ) | 13,966 | |||||||||||
| Assets of Consolidated Funds: | ||||||||||||||||
| Cash and cash equivalents | - | 105,122 | - | 105,122 | ||||||||||||
| Investments, at fair value | - | 778,971 | - | 778,971 | ||||||||||||
| Interest and dividends receivable | - | 6,124 | - | 6,124 | ||||||||||||
| Other assets | - | 3,803 | - | 3,803 | ||||||||||||
| Total assets | $ | 111,844 | $ | 894,020 | $ | (1,947 | ) | $ | 1,003,917 | |||||||
| Liabilities and equity | ||||||||||||||||
| Loans payable | $ | 102,697 | $ | - | $ | - | $ | 102,697 | ||||||||
| Accounts payable, accrued expenses and other liabilities | 20,739 | - | - | 20,739 | ||||||||||||
| Performance fee compensation payable | 5,759 | - | - | 5,759 | ||||||||||||
| Liabilities of Consolidated Funds: | ||||||||||||||||
| Accounts payable, accrued expenses and other liabilities | - | 3,916 | (1,717 | ) | 2,199 | |||||||||||
| Secured borrowings | - | 134,047 | - | 134,047 | ||||||||||||
| Total liabilities | 129,195 | 137,963 | (1,717 | ) | 265,441 | |||||||||||
| Equity | ||||||||||||||||
| Class A Common Stock | 60 | - | - | 60 | ||||||||||||
| Class B Common Stock | - | - | - | - | ||||||||||||
| Capital deficit | (8 | ) | - | - | (8 | ) | ||||||||||
| Retained earnings | 108 | - | - | 108 | ||||||||||||
| Total stockholders' equity (deficit), Medley Management Inc. | 160 | - | - | 160 | ||||||||||||
| Non-controlling interests in Consolidated Funds | - | - | 755,827 | 755,827 | ||||||||||||
| Non-controlling interests in consolidated subsidiaries | (708 | ) | - | - | (708 | ) | ||||||||||
| Non-controlling interests in Medley LLC | (16,803 | ) | - | - | (16,803 | ) | ||||||||||
| Members' equity of consolidated funds | - | 756,057 | (756,057 | ) | - | |||||||||||
| Total (deficit) equity | (17,351 | ) | 756,057 | (230 | ) | 738,476 | ||||||||||
| Total liabilities and equity | $ | 111,844 | $ | 894,020 | $ | (1,947 | ) | $ | 1,003,917 | |||||||
| As of December 31, 2014 | ||||||||||||||||
| Consolidated | ||||||||||||||||
| Standalone | Funds | Eliminations | Consolidated | |||||||||||||
| (Amounts in thousands) | ||||||||||||||||
| Assets | ||||||||||||||||
| Cash and cash equivalents | $ | 87,206 | $ | - | $ | - | $ | 87,206 | ||||||||
| Investments, at fair value | 22,143 | - | (12,242 | ) | 9,901 | |||||||||||
| Management fees receivable | 15,173 | - | - | 15,173 | ||||||||||||
| Performance fees receivable | 5,573 | - | - | 5,573 | ||||||||||||
| Other assets | 9,230 | - | - | 9,230 | ||||||||||||
| Assets of Consolidated Funds: | ||||||||||||||||
| Cash and cash equivalents | - | 38,111 | - | 38,111 | ||||||||||||
| Investments, at fair value | - | 734,870 | - | 734,870 | ||||||||||||
| Interest and dividends receivable | - | 6,654 | - | 6,654 | ||||||||||||
| Other assets | - | 5,057 | (1,376 | ) | 3,681 | |||||||||||
| Total assets | $ | 139,325 | $ | 784,692 | $ | (13,618 | ) | $ | 910,399 | |||||||
| Liabilities and equity | ||||||||||||||||
| Loans payable | $ | 103,057 | $ | - | $ | - | $ | 103,057 | ||||||||
| Accounts payable, accrued expenses and other liabilities | 28,959 | - | (1,376 | ) | 27,583 | |||||||||||
| Performance fee compensation payable | 11,807 | - | - | 11,807 | ||||||||||||
| Liabilities of Consolidated Funds: | ||||||||||||||||
| Accounts payable, accrued expenses and other liabilities | - | 5,767 | - | 5,767 | ||||||||||||
| Secured borrowings | - | 141,135 | - | 141,135 | ||||||||||||
| Total liabilities | 143,823 | 146,902 | (1,376 | ) | 289,349 | |||||||||||
| Equity | ||||||||||||||||
| Class A Common Stock | 60 | - | - | 60 | ||||||||||||
| Class B Common Stock | - | - | - | - | ||||||||||||
| Capital deficit | (2,384 | ) | - | - | (2,384 | ) | ||||||||||
| Retained earnings | 272 | - | - | 272 | ||||||||||||
| Total stockholders' equity (deficit), Medley Management Inc. | (2,052 | ) | - | - | (2,052 | ) | ||||||||||
| Non-controlling interests in Consolidated Funds | - | - | 625,548 | 625,548 | ||||||||||||
| Non-controlling interests in consolidated subsidiaries | 1,526 | - | - | 1,526 | ||||||||||||
| Non-controlling interests in Medley LLC | (3,972 | ) | - | - | (3,972 | ) | ||||||||||
| Members' equity of consolidated funds | - | 637,790 | (637,790 | ) | - | |||||||||||
| Total (deficit) equity | (4,498 | ) | 637,790 | (12,242 | ) | 621,050 | ||||||||||
| Total liabilities and equity | $ | 139,325 | $ | 784,692 | $ | (13,618 | ) | $ | 910,399 | |||||||