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Medley Management Inc. Declares $0.20 Per Share Dividend and Reports Third Quarter 2017 Results

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NEW YORK, Nov. 14, 2017 (GLOBE NEWSWIRE) -- Medley Management Inc. (NYSE:MDLY) today reported its financial results for its third quarter ended September 30, 2017.

Highlights

  • Fee earning assets under management were $3.2 billion as of September 30, 2017
  • Total assets under management were $5.3 billion as of September 30, 2017
  • Declared $0.20 per share dividend for Q3 2017 payable on December 6, 2017
  • U.S. GAAP net income attributable to Medley Management Inc. was $0.03 per share for Q3 2017
  • Core Net Income Per Share was $0.09 for Q3 2017

"The third quarter of 2017 was another consistent quarter for Medley where we saw increased investment activity across our platform. We continue to grow our investment capabilities and our team and I am pleased to announce the filing for our first public real estate fund, Sierra Real Estate Fund," said Brook Taube, CEO of Medley.

Results of Operations for the Three Months Ended September 30, 2017

Total revenues were $16.7 million for the three months ended September 30, 2017 compared to $18.9 million for the same period in 2016. The decrease was due primarily to a decrease in performance and incentive fees.

Total expenses from operations were $9.9 million for the three months ended September 30, 2017 compared to $15.6 million for the same period in 2016. The decrease was due primarily to a decrease in expenses associated with our expense support agreement with Sierra Income Corporation ("SIC") as well as a reduction in compensation and benefits expense, partly offset by an increase in general, administrative and other expenses. 

Total other expense, net was $1.6 million for the three months ended September 30, 2017 compared to $2.0 million for the same period in 2016. The decrease was due primarily to a decrease in expense associated with our revenue share payable and an increase in dividend income from our permanent capital vehicles, partly offset by an increase in interest expense.

Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC was $2.6 million for the three months ended September 30, 2017 compared to $0.8 million for the same period in 2016. Medley Management Inc.'s net income per share was $0.03 for the three months ended September 30, 2017 compared to $0.00 for the same period in 2016.

Pre-Tax Core Net Income was $4.7 million for the three months ended September 30, 2017 compared to $7.4 million for the same period in 2016. Core Net Income Per Share was $0.09 for the three months ended September 30, 2017, compared to $0.14 for the same period in 2016. Core EBITDA was $7.6 million for the three months ended September 30, 2017 compared to $9.8 million for the same period in 2016.

Results of Operations for the Nine Months Ended September 30, 2017

Total revenues were $47.1 million for the nine months ended September 30, 2017 compared to $57.8 million for the same period in 2016. The decrease was due primarily to a decrease in performance and incentive fees, partly offset by an increase in other revenue and fees.

Total expenses from operations were $26.0 million for the nine months ended September 30, 2017 compared to $46.8 million for the same period in 2016. The decrease was due primarily to a reduction in expenses associated with our expense support agreement with SIC, a reduction in compensation and benefits expense, a decrease in performance compensation and lower general and administrative expenses. 

Total other expense, net was $4.9 million for the nine months ended September 30, 2017 compared to $7.4 million for the same period in 2016. The decrease was due primarily to a decrease in expense associated with our revenue share payable and an increase in dividend income, partly offset by an increase in interest expense.

Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC was $10.0 million for the nine months ended September 30, 2017 compared to $2.1 million for the same period in 2016. Medley Management Inc.'s net income per share was $0.18 for the nine months ended September 30, 2017 compared to a net loss per share of $0.05 for the same period in 2016.

Pre-Tax Core Net Income was $15.1 million for the nine months ended September 30, 2017 compared to $21.6 million for the same period in 2016. Core Net Income Per Share was $0.28 for the nine months ended September 30, 2017, compared to $0.40 for the same period in 2016. Core EBITDA was $23.7 million for the nine months ended September 30, 2017 compared to $28.6 million for the same period in 2016.

Investor Contact:

Sam Anderson
Head of Capital Markets & Risk Management
Medley Management Inc.
212-759-0777

Media Contact:

Erin Clark
Teneo Strategy
646-214-8355

Key Performance Indicators:

  For the Three Months Ended
September 30,
(unaudited)
  For the Nine Months Ended
September 30,
(unaudited)
  2017   2016   2017   2016
  (Amounts in thousands, except AUM, share and per share amounts)
Consolidated Financial Data:              
Pre-Tax Income $ 5,202     $ 1,291     $ 16,188     $ 3,543  
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC $ 2,633     $ 776     $ 9,986     $ 2,146  
Net income (loss) per Class A common stock $ 0.03     $     $ 0.18     $ (0.05 )
Net Income Margin (1) 15.8 %   4.1 %   21.2 %   3.7 %
Weighted average shares - Basic and Diluted 5,342,939     5,778,409     5,578,003     5,802,334  
               
Non-GAAP Data:              
Pre-Tax Core Net Income (2) $ 4,651     $ 7,383     $ 15,065     $ 21,578  
Core Net Income  (2) $ 3,851     $ 6,552     $ 13,171     $ 19,080  
Core EBITDA  (3) $ 7,592     $ 9,818     $ 23,737     $ 28,638  
Core Net Income Per Share (4) $ 0.09     $ 0.14     $ 0.28     $ 0.40  
Core Net Income Margin (5) 15.9 %   22.3 %   18.2 %   21.3 %
Pro-Forma Weighted Average Shares Outstanding (6) 30,777,252     30,779,206     30,922,950     30,652,109  
               
Other Data (at period end, in millions):              
AUM $ 5,296     $ 5,011     $ 5,296     $ 5,011  
Fee Earning AUM $ 3,241     $ 3,111     $ 3,241     $ 3,111  
                               


(1)   Net Income Margin equals Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC divided by total revenue.
(2)   Pre-Tax Core Net Income is calculated as Core Net Income before income taxes. Core Net Income reflects net income attributable to Medley Management Inc. and net income attributable to non-controlling interests in Medley LLC adjusted to exclude reimbursable expenses associated with the launch of funds, stock-based compensation associated with restricted stock units that were granted in connection with our IPO, other non-core items and the income tax expense associated with the foregoing adjustments. Please refer to the reconciliation of Core Net Income to Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC in Exhibit C for additional details.
(3)   Core EBITDA is calculated as Core Net Income before interest expense, income taxes, depreciation and amortization. Please refer to the reconciliation of Core EBITDA to Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC in Exhibit C for additional details.
(4)   Core Net Income Per Share is calculated as Core Net Income, adjusted for the income tax effect of assuming that all of our pre-tax earnings were subject to federal, state and local corporate income taxes, divided by Pro-Forma Weighted Average Shares Outstanding (as defined below). We 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 D for additional details.
(5)   Core Net Income Margin equals Core Net Income Per Share divided by total revenue per share.
(6)   The calculation of Pro-Forma Weighted Average Shares Outstanding assumes the vesting of restricted stock units and conversion by the pre-IPO holders of 23,333,333 LLC Units for 23,333,333 shares of Class A common stock at the beginning of each period presented, respectively. Please refer to Exhibit D for additional details.

 

Fee Earning AUM

The table below presents the quarter-to-date roll forward of our total fee earning AUM:

              % of  Fee Earning AUM
  Permanent
Capital
Vehicles
  Long-dated
Private
Funds
and SMAs
  Total   Permanent
Capital
Vehicles
  Long-dated
Private
Funds
and SMAs
  (Dollars in millions)        
Ending balance, June 30, 2017 $ 2,259     $ 1,020     $ 3,279     69%     31%  
Commitments (37 )   74     37          
Capital reduction                  
Distributions (23 )   (36 )   (59 )        
Change in fund value (8 )   (8 )  
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