Perella Weinberg Partners (the “Firm” or “PWP”) (NASDAQ:PWP) today
reported financial results for the third quarter ended
September 30, 2022. The Firm reported third quarter revenues
of $145.4 million for the three months ended September 30,
2022, compared with $177.4 million for the three months ended
September 30, 2021. GAAP net loss and adjusted net income were
$(12.9) million and $25.9 million, respectively, for the three
months ended September 30, 2022, compared with GAAP net loss
of $(9.5) million and adjusted net income of $28.9 million for the
three months ended September 30, 2021. GAAP diluted net loss
per Class A share (also referred to as “GAAP Diluted EPS”) and
adjusted diluted if-converted net income per Class A share (also
referred to as “Adjusted EPS”) were $(0.19) and $0.26,
respectively, for the three months ended September 30, 2022.
For the nine months ended September 30,
2022, revenues were $448.4 million, compared with $602.7 million
for the nine months ended 2021. GAAP net loss and adjusted net
income were $(9.1) million and $69.6 million, respectively, for the
nine months ended September 30, 2022, compared with GAAP net
income of $22.0 million and adjusted net income of $122.2 million
for the nine months ended September 30, 2021. GAAP diluted net
loss per Class A share and adjusted diluted if-converted net income
per Class A share were ($0.19) and $0.66, respectively, for the
nine months ended September 30, 2022.
“Against a very stressed environment, PWP
delivered a solid third quarter supported by a diversified client
base and product suite. Despite a significant slowdown in global
M&A closings year-to-date, PWP’s performance speaks to the
strength, breadth, and resiliency of our platform, as does our
stable gross pipeline, though revenue timelines remain less
defined. PWP is a larger, more diverse, more established firm today
than in previous cycles and we are better positioned than ever
before to deliver for our clients and shareholders. Further, we
remain committed to our capital return strategy, as demonstrated by
our year-to-date deployment of nearly $87 million, and will
continue to return all excess capital over the long-term,” stated
Peter Weinberg, Chief Executive Officer.
Selected Financial Data
(Unaudited)(Dollars in Thousands, Except Per Share
Amounts)
|
|
U.S. GAAP |
|
Adjusted |
|
|
Three Months Ended September 30, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenues |
|
$ |
145,379 |
|
|
$ |
177,427 |
|
|
$ |
145,379 |
|
|
$ |
177,427 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Total compensation and benefits |
|
|
123,259 |
|
|
|
151,372 |
|
|
|
93,041 |
|
|
|
113,524 |
|
Non-compensation expenses |
|
|
30,938 |
|
|
|
36,382 |
|
|
|
27,786 |
|
|
|
33,127 |
|
Operating income (loss) |
|
|
(8,818 |
) |
|
|
(10,327 |
) |
|
|
24,552 |
|
|
|
30,776 |
|
Total non-operating income (expenses) |
|
|
529 |
|
|
|
1,015 |
|
|
|
6,860 |
|
|
|
4,058 |
|
Income (loss) before provision
for income taxes |
|
|
(8,289 |
) |
|
|
(9,312 |
) |
|
|
31,412 |
|
|
|
34,834 |
|
Income tax benefit (expense) |
|
|
(4,570 |
) |
|
|
(150 |
) |
|
|
(5,463 |
) |
|
|
(5,887 |
) |
Net income (loss) |
|
$ |
(12,859 |
) |
|
$ |
(9,462 |
) |
|
$ |
25,949 |
|
|
$ |
28,947 |
|
Net income (loss) attributable
to non-controlling interests |
|
|
(13,999 |
) |
|
|
(12,938 |
) |
|
|
|
|
Net income (loss) attributable
to Perella Weinberg Partners |
|
$ |
1,140 |
|
|
$ |
3,476 |
|
|
|
|
|
Net income (loss) |
|
|
|
|
|
$ |
25,949 |
|
|
$ |
28,947 |
|
Less: Adjusted income tax
benefit (expense) |
|
|
|
|
|
|
5,463 |
|
|
|
5,887 |
|
Add: If-converted tax
impact |
|
|
|
|
|
|
(8,591 |
) |
|
|
(10,764 |
) |
Adjusted if-converted net
income (loss) |
|
|
|
|
|
$ |
22,821 |
|
|
$ |
24,070 |
|
Net income (loss) per share
attributable to Class A common shareholders |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.03 |
|
|
$ |
0.08 |
|
|
|
|
|
Diluted |
|
$ |
(0.19 |
) |
|
$ |
(0.09 |
) |
|
|
|
|
Diluted, If-Converted |
|
|
|
|
|
$ |
0.26 |
|
|
$ |
0.26 |
|
Weighted-average shares of
Class A common stock outstanding |
|
|
|
|
|
|
|
|
Basic |
|
|
42,263,427 |
|
|
|
42,572,813 |
|
|
|
|
|
Diluted |
|
|
87,745,776 |
|
|
|
92,727,012 |
|
|
|
87,875,488 |
|
|
|
93,818,451 |
|
Selected Financial Data
(Unaudited)(Dollars in Thousands, Except Per Share
Amounts)
|
|
U.S. GAAP |
|
Adjusted |
|
|
Nine Months Ended September 30, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenues |
|
$ |
448,359 |
|
|
$ |
602,749 |
|
|
$ |
448,359 |
|
|
$ |
602,749 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Total compensation and benefits |
|
|
378,408 |
|
|
|
438,468 |
|
|
|
287,005 |
|
|
|
385,760 |
|
Non-compensation expenses |
|
|
98,141 |
|
|
|
97,078 |
|
|
|
90,985 |
|
|
|
87,591 |
|
Operating income (loss) |
|
|
(28,190 |
) |
|
|
67,203 |
|
|
|
70,369 |
|
|
|
129,398 |
|
Total non-operating income (expenses) |
|
|
29,756 |
|
|
|
(42,463 |
) |
|
|
14,061 |
|
|
|
1,052 |
|
Income (loss) before provision
for income taxes |
|
|
1,566 |
|
|
|
24,740 |
|
|
|
84,430 |
|
|
|
130,450 |
|
Income tax benefit (expense) |
|
|
(10,707 |
) |
|
|
(2,695 |
) |
|
|
(14,853 |
) |
|
|
(8,281 |
) |
Net income (loss) |
|
$ |
(9,141 |
) |
|
$ |
22,045 |
|
|
$ |
69,577 |
|
|
$ |
122,169 |
|
Net income (loss) attributable
to non-controlling interests |
|
|
(28,440 |
) |
|
|
31,068 |
|
|
|
|
|
Net income (loss) attributable
to Perella Weinberg Partners |
|
$ |
19,299 |
|
|
$ |
(9,023 |
) |
|
|
|
|
Net income (loss) |
|
|
|
|
|
$ |
69,577 |
|
|
|
Less: Adjusted income tax
benefit (expense) |
|
|
|
|
|
|
14,853 |
|
|
|
Add: If-converted tax
impact |
|
|
|
|
|
|
(24,152 |
) |
|
|
Adjusted if-converted net
income (loss) |
|
|
|
|
|
$ |
60,278 |
|
|
|
Net income (loss) per share
attributable to Class A common shareholders (1) |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.44 |
|
|
$ |
(0.21 |
) |
|
|
|
|
Diluted |
|
$ |
(0.19 |
) |
|
$ |
(0.40 |
) |
|
|
|
|
Diluted, If-Converted |
|
|
|
|
|
$ |
0.66 |
|
|
NM |
Weighted-average shares of
Class A common stock outstanding (1) |
|
|
|
|
|
|
|
|
Basic |
|
|
44,241,794 |
|
|
|
42,599,954 |
|
|
|
|
|
Diluted |
|
|
90,535,232 |
|
|
|
92,754,153 |
|
|
|
90,690,759 |
|
|
NM |
(1) For the nine months ended
September 30, 2021, net income (loss) per share of Class A
common stock and weighted-average shares of Class A common stock
outstanding is representative of the period from June 24, 2021
through September 30, 2021, the period following the Business
Combination. Adjusted net income (loss) per Class A share -
Diluted, If-Converted for the nine months ended September 30,
2021 is not meaningful or comparative to GAAP diluted earnings per
share, as it excludes activity prior to the Business Combination on
June 24, 2021.
Revenues
For the third quarter 2022, revenues were $145.4
million, a decrease of 18% from $177.4 million for the third
quarter 2021. For the nine months ended September 30, 2022,
revenues were $448.4 million, a decrease of 26% from $602.7 million
for the nine months ended September 30, 2021. Performance in
both the third quarter and first nine months of 2021 represented
record revenue periods for the firm. The period-over-period
decline, for both the third quarter and nine months ended 2022, was
primarily driven by a reduction in mergers and acquisition activity
across most industry groups. For the quarter period, the decline
was partially offset by increased activity in our capital solutions
advisory business, which includes restructuring and liability
management services and capital markets advisory. The decrease in
revenues can be attributed to both fewer advisory transaction
completions and a decrease in average fee size per client.
Expenses
|
|
U.S. GAAP |
|
Adjusted |
(Dollars in
thousands) |
|
Three Months Ended September 30, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Total compensation and
benefits |
|
$ |
123,259 |
|
|
$ |
151,372 |
|
|
$ |
93,041 |
|
|
$ |
113,524 |
|
% of Revenues |
|
|
85 |
% |
|
|
85 |
% |
|
|
64 |
% |
|
|
64 |
% |
Non-compensation expenses |
|
$ |
30,938 |
|
|
$ |
36,382 |
|
|
$ |
27,786 |
|
|
$ |
33,127 |
|
% of Revenues |
|
|
21 |
% |
|
|
21 |
% |
|
|
19 |
% |
|
|
19 |
% |
GAAP total compensation and benefits were $123.3
million for the third quarter of 2022, compared to $151.4 million
for the third quarter of 2021. Adjusted total compensation and
benefits were $93.0 million for the third quarter of 2022 as
compared to $113.5 million for the same period a year ago. The
decrease in both GAAP total compensation and benefits and adjusted
total compensation and benefits in the third quarter of 2022 was
due to a smaller bonus accrual associated with lower revenues.
GAAP non-compensation expenses were $30.9
million for the third quarter of 2022, compared with $36.4 million
for the third quarter of 2021. Adjusted non-compensation expenses
were $27.8 million for the third quarter of 2022, compared with
$33.1 million for the same period a year ago. The decrease
experienced in both GAAP non-compensation expenses and
non-compensation expenses on an adjusted basis was primarily driven
by lower legal, consulting and D&O insurance costs this year as
compared to those costs incurred last year as a newly-public
company, reduced depreciation and amortization expense due to our
New York and London headquarters each reaching the end of their
initial lease term, and a bad debt reserve in the third quarter of
2021, partially offset by an increase in travel and related
expenses as our teams returned to more normalized travel.
|
|
U.S. GAAP |
|
Adjusted |
(Dollars in
thousands) |
|
Nine Months Ended September 30, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Total compensation and
benefits |
|
$ |
378,408 |
|
|
$ |
438,468 |
|
|
$ |
287,005 |
|
|
$ |
385,760 |
|
% of Revenues |
|
|
84 |
% |
|
|
73 |
% |
|
|
64 |
% |
|
|
64 |
% |
Non-compensation expenses |
|
$ |
98,141 |
|
|
$ |
97,078 |
|
|
$ |
90,985 |
|
|
$ |
87,591 |
|
% of Revenues |
|
|
22 |
% |
|
|
16 |
% |
|
|
20 |
% |
|
|
15 |
% |
GAAP total compensation and benefits were $378.4
million for the nine months ended September 30, 2022, compared
to $438.5 million for the nine months ended September 30,
2021. Adjusted total compensation and benefits were $287.0 million
for the nine months ended September 30, 2022, compared to
$385.8 million for the nine months ended September 30, 2021.
The decrease in both GAAP total compensation and benefits and
adjusted total compensation and benefits was due to a smaller bonus
accrual associated with lower revenues. On a GAAP basis, the
smaller bonus accrual was partially offset by increased
equity-based compensation related to restricted stock units
(“RSUs”) issued in connection with or subsequent to the Business
Combination.
GAAP non-compensation expenses were $98.1
million for the nine months ended September 30, 2022, compared
with $97.1 million for the nine months ended September 30,
2021. Adjusted non-compensation expenses were $91.0 million for the
nine months ended September 30, 2022, compared with $87.6
million for the nine months ended September 30, 2021. The
increase experienced in both GAAP non-compensation expenses and
non-compensation expenses on an adjusted basis was primarily driven
by an increase in travel and related expenses as our teams returned
to more normalized travel, an increase in recruiting spend and
technology, three quarters of public company costs including
D&O insurance, and a bad debt reserve, partially offset by
lower rent and occupancy costs as a result of our New York lease
extension, reduced depreciation and amortization expense due to our
New York and London headquarters each reaching the end of their
initial lease term, and a decrease in professional fees related to
consulting and legal spend.
Provision for Income Taxes
Perella Weinberg Partners currently owns 48.99%
of the operating partnership (PWP Holdings LP) and is subject to
U.S. federal and state corporate income tax. Income earned by the
operating partnership is subject to certain state and foreign
income taxes.
Prior to the close of the Business Combination
on June 24, 2021, all of our operating income was derived from the
predecessor PWP entity and was not subject to U.S. corporate income
tax.
For purposes of calculating adjusted
if-converted net income, we have presented our results as if all
partnership units had been converted to shares of Class A Common
Stock, and as if all of our adjusted income for the period was
subjected to U.S. corporate income tax. For the nine months ended
September 30, 2022, the effective tax rate for adjusted
if-converted net income was 28.61%.
Balance Sheet and Capital
Management
As of September 30, 2022, PWP had $281.7
million of cash, cash equivalents and short-term investments in
U.S. Treasury Securities. The Firm has no outstanding indebtedness
and has an undrawn revolving credit facility.
The Board of Directors of PWP has declared a
quarterly dividend of $0.07 per share of Class A common stock. The
dividend will be paid on December 9, 2022 to Class A common
stockholders of record on November 25, 2022.
During the three months ended September 30,
2022, PWP net settled 373,939 share equivalents to satisfy tax
withholding obligations at an average price per share of $7.23, and
repurchased 1,289,459 shares at an average price per share of $6.62
in open market transactions pursuant to PWP’s Class A common stock
repurchase program, which was paused during PWP’s warrant exchange
process. The aggregate 1,663,398 shares were acquired at an average
price per share of $6.76 for a total cost of $11.2 million.
During the nine months ended September 30,
2022, PWP net settled 986,101 share equivalents to satisfy tax
withholding obligations at an average price per share of $9.27, and
repurchased 7,729,666 shares at an average price per share of $6.96
in open market transactions pursuant to PWP’s Class A common stock
repurchase program, which was paused during PWP’s warrant exchange
process in the third quarter 2022. The aggregate 8,715,767 shares
were acquired at an average price per share of $7.22 for a total
cost of $63.0 million.
Conference Call and Webcast
Management will host a webcast and conference
call on Thursday, November 3, 2022 at 9:00 am ET to discuss PWP’s
financial results for the third quarter ended September 30,
2022.
The conference call will be made available in
the Investors section of PWP’s website at
https://investors.pwpartners.com/.
The conference call can also be accessed by the
following dial-in information:
- Domestic: (800) 579-2543
- International: (785) 424-1789
- Conference ID: PWPQ322
Replay
A replay of the call will also be available on
PWP’s website approximately two hours after the live call through
November 10, 2022. To access the replay, dial (800) 934-2123
(Domestic) or (402) 220-1137 (International). The replay can also
be accessed on the investors section of PWP’s website at
https://investors.pwpartners.com/.
About PWP
Perella Weinberg Partners is a leading global
independent advisory firm, providing strategic and financial advice
to a broad client base, including corporations, institutions,
governments, sovereign wealth funds and the financial sponsor
community. The firm offers a wide range of advisory services to
clients in the most active industry sectors and global markets.
With approximately 650 employees, PWP currently maintains offices
in New York, Houston, London, Calgary, Chicago, Denver, Los
Angeles, Paris, Munich, and San Francisco. The financial
information of PWP herein refers to the business operations of PWP
Holdings LP and Subsidiaries.
Additional Information
For additional information that management
believes to be useful for investors, please refer to the latest
presentation posted on the Investors section of PWP’s website at
https://investors.pwpartners.com/.
Contacts
For Perella Weinberg Partners Investor
Relations: investors@pwpartners.comFor Perella Weinberg Partners
Media: media@pwpartners.com
Non-GAAP Financial Measures
In addition to financial measures presented in
accordance with GAAP, we monitor certain non-GAAP financial
measures to manage our business, make planning decisions, evaluate
our performance and allocate resources. We believe that these
non-GAAP financial measures are key financial indicators of our
business performance over the long term and provide useful
information regarding whether cash provided by operating activities
is sufficient to maintain and grow our business. We believe that
the methodology for determining these non-GAAP financial measures
can provide useful supplemental information to help investors
better understand the economics of our platform.
These non-GAAP financial measures have
limitations as analytical tools and should not be considered in
isolation from, or as a substitute for, the analysis of other GAAP
financial measures. These non-GAAP financial measures are not
universally consistent calculations, limiting their usefulness as
comparative measures. Other companies may calculate similarly
titled financial measures differently. Additionally, these non-GAAP
financial measures are not measurements of financial performance or
liquidity under GAAP. In order to facilitate a clear understanding
of our consolidated historical operating results, you should
examine our non-GAAP financial measures in conjunction with our
historical consolidated financial statements and notes thereto
included elsewhere in this press release.
Management compensates for the inherent
limitations associated with using these non-GAAP financial measures
through disclosure of such limitations, presentation of our
financial statements in accordance with GAAP and reconciliation of
such non-GAAP financial measures to the most directly comparable
GAAP financial measures. See “Non-GAAP Financial Measures” and the
tables at the end of this release for an explanation of the
adjustments and reconciliations to the comparable GAAP numbers.
Cautionary Statement Regarding Forward Looking
Statements
Certain statements made in this press release,
and oral statements made from time to time by representatives of
PWP are “forward-looking statements” within the meaning of the
federal securities laws, including the Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. Statements regarding the expectations regarding
the combined business are “forward looking statements.” In
addition, words such as “estimates,” “projected,” “expects,”
“estimated,” “anticipates,” “forecasts,” “plans,” “intends,”
“believes,” “seeks,” “may,” “will,” “would,” “future,” “propose,”
“target,” “goal,” “objective,” “outlook” and variations of these
words or similar expressions (or the negative versions of such
words or expressions) are intended to identify forward-looking
statements. These forward-looking statements are not guarantees of
future performance, conditions or results, and involve a number of
known and unknown risks, uncertainties, assumptions and other
important factors, many of which are outside the control of the
parties, that could cause actual results or outcomes to differ
materially from those discussed in the forward-looking statements.
Important factors, among others, that may affect actual results or
outcomes include:
- the projected
financial information, anticipated growth rate, and market
opportunity of the Firm;
- the ability to
maintain the listing of the Firm’s Class A common stock on Nasdaq
following the Business Combination;
- our public
securities’ potential liquidity and trading;
- our success in
retaining or recruiting partners and other employees, or changes
related to, our officers, key employees or directors following the
completion of the Business Combination;
- members of our
management team allocating their time to other businesses and
potentially having conflicts of interest with our business;
- factors relating
to the business, operations and financial performance of the Firm,
including:
- whether the Firm
realizes all or any of the anticipated benefits from the Business
Combination;
- whether the
Business Combination results in any increased or unforeseen costs
or has an impact on the Firm’s ability to retain or compete for
professional talent or investor capital;
- global economic,
business, market and geopolitical conditions, including the impact
of public health crises, such as the ongoing rapid, worldwide
spread of a novel strain of coronavirus and the pandemic caused
thereby (collectively, “COVID-19”) as well as the impact of recent
hostilities between Russia and Ukraine;
- the Firm’s
dependence on and ability to retain working partners and other key
employees;
- the Firm’s
ability to successfully identify, recruit and develop talent;
- risks associated
with strategic transactions, such as joint ventures, strategic
investments, acquisitions and dispositions;
- conditions
impacting the corporate advisory industry;
- the Firm’s
dependence on its fee-paying clients and fluctuating revenues from
its non-exclusive, engagement-by-engagement business model;
- the high
volatility of the Firm’s revenues as a result of its reliance on
advisory fees that are largely contingent on the completion of
events which may be out of its control;
- the ability of
the Firm’s clients to pay for its services, including its
restructuring clients;
- the Firm’s ability to appropriately
manage conflicts of interest and tax and other regulatory factors
relevant to the Firm’s business, including actual, potential or
perceived conflicts of interest and other factors that may damage
its business and reputation;
- strong
competition from other financial advisory and investment banking
firms;
- potential
impairment of goodwill and other intangible assets, which represent
a significant portion of the Firm’s assets;
- the Firm’s
successful formulation and execution of its business and growth
strategies;
- the outcome of
third-party litigation involving the Firm;
- substantial
litigation risks in the financial services industry;
- cybersecurity
and other operational risks;
- the Firm’s
ability to expand into new markets and lines of businesses for the
advisory business;
- exposure to
fluctuations in foreign currency exchange rates;
- assumptions
relating to the Firm’s operations, financial results, financial
condition, business prospects, growth strategy and liquidity;
and
- extensive
regulation of the corporate advisory industry and U.S. and foreign
regulatory developments relating to, among other things, financial
institutions and markets, government oversight, fiscal and tax
policy and laws (including the treatment of carried interest)
The forward-looking statements in this press
release and oral statements made from time to time by
representatives of PWP are based on current expectations and
beliefs concerning future developments and their potential effects
on the Firm. There can be no assurance that future developments
affecting the Firm will be those that the Firm has anticipated.
These forward-looking statements involve a number of risks,
uncertainties (some of which are beyond the Firm’s control) or
other assumptions that may cause actual results or performance to
be materially different from those expressed or implied by these
forward-looking statements. These risks and uncertainties include,
but are not limited to, those factors described in the section
entitled “Risk Factors” in our Amendment No. 1 to our Annual Report
on Form 10-K/A filed with the SEC on July 7, 2022 and the other
documents filed by the Firm from time to time with the SEC. Should
one or more of these risks or uncertainties materialize, or should
any of our assumptions prove incorrect, actual results may vary in
material respects from those projected in these forward-looking
statements. The Firm undertakes no obligation to update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required
under applicable securities laws.
Consolidated Statements of Operations
(Unaudited)(Dollars in Thousands, Except Per Share
Amounts)
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenues |
|
$ |
145,379 |
|
|
$ |
177,427 |
|
|
$ |
448,359 |
|
|
$ |
602,749 |
|
Expenses |
|
|
|
|
|
|
|
|
Compensation and benefits |
|
|
86,260 |
|
|
|
113,322 |
|
|
|
264,092 |
|
|
|
387,196 |
|
Equity-based compensation |
|
|
36,999 |
|
|
|
38,050 |
|
|
|
114,316 |
|
|
|
51,272 |
|
Total compensation and benefits |
|
|
123,259 |
|
|
|
151,372 |
|
|
|
378,408 |
|
|
|
438,468 |
|
Professional fees |
|
|
8,180 |
|
|
|
11,006 |
|
|
|
25,902 |
|
|
|
28,954 |
|
Technology and infrastructure |
|
|
7,337 |
|
|
|
7,368 |
|
|
|
22,414 |
|
|
|
21,465 |
|
Rent and occupancy |
|
|
6,404 |
|
|
|
6,773 |
|
|
|
17,511 |
|
|
|
20,068 |
|
Travel and related expenses |
|
|
2,912 |
|
|
|
1,629 |
|
|
|
8,847 |
|
|
|
3,505 |
|
General, administrative and other expenses |
|
|
3,648 |
|
|
|
6,127 |
|
|
|
15,414 |
|
|
|
12,005 |
|
Depreciation and amortization |
|
|
2,457 |
|
|
|
3,479 |
|
|
|
8,053 |
|
|
|
11,081 |
|
Total expenses |
|
|
154,197 |
|
|
|
187,754 |
|
|
|
476,549 |
|
|
|
535,546 |
|
Operating income
(loss) |
|
|
(8,818 |
) |
|
|
(10,327 |
) |
|
|
(28,190 |
) |
|
|
67,203 |
|
Non-operating income
(expenses) |
|
|
|
|
|
|
|
|
Related party income |
|
|
740 |
|
|
|
1,529 |
|
|
|
2,248 |
|
|
|
5,303 |
|
Other income (expense) |
|
|
6,152 |
|
|
|
2,564 |
|
|
|
11,908 |
|
|
|
1,236 |
|
Change in fair value of warrant liabilities |
|
|
(6,294 |
) |
|
|
(3,006 |
) |
|
|
15,806 |
|
|
|
(2,058 |
) |
Loss on debt extinguishment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(39,408 |
) |
Interest expense |
|
|
(69 |
) |
|
|
(72 |
) |
|
|
(206 |
) |
|
|
(7,536 |
) |
Total non-operating income (expenses) |
|
|
529 |
|
|
|
1,015 |
|
|
|
29,756 |
|
|
|
(42,463 |
) |
Income (loss) before
income taxes |
|
|
(8,289 |
) |
|
|
(9,312 |
) |
|
|
1,566 |
|
|
|
24,740 |
|
Income tax benefit (expense) |
|
|
(4,570 |
) |
|
|
(150 |
) |
|
|
(10,707 |
) |
|
|
(2,695 |
) |
Net income
(loss) |
|
|
(12,859 |
) |
|
|
(9,462 |
) |
|
|
(9,141 |
) |
|
|
22,045 |
|
Less: Net income
(loss) attributable to non-controlling interests |
|
|
(13,999 |
) |
|
|
(12,938 |
) |
|
|
(28,440 |
) |
|
|
31,068 |
|
Net income (loss)
attributable to Perella Weinberg Partners |
|
$ |
1,140 |
|
|
$ |
3,476 |
|
|
$ |
19,299 |
|
|
$ |
(9,023 |
) |
Net income (loss) per
share attributable to Class A common shareholders (1) |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.03 |
|
|
$ |
0.08 |
|
|
$ |
0.44 |
|
|
$ |
(0.21 |
) |
Diluted |
|
$ |
(0.19 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.40 |
) |
Weighted-average
shares of Class A common stock outstanding (1) |
|
|
|
|
|
|
|
|
Basic |
|
|
42,263,427 |
|
|
|
42,572,813 |
|
|
|
44,241,794 |
|
|
|
42,599,954 |
|
Diluted |
|
|
87,745,776 |
|
|
|
92,727,012 |
|
|
|
90,535,232 |
|
|
|
92,754,153 |
|
(1) For the nine months ended
September 30, 2021, net income (loss) per share of Class A
common stock and weighted-average shares of Class A common stock
outstanding is representative of the period from June 24, 2021
through September 30, 2021, the period following the Business
Combination.
U.S. GAAP Reconciliation of Adjusted
Results (Unaudited)(Dollars in
Thousands)
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Total compensation and benefits—GAAP |
|
$ |
123,259 |
|
|
$ |
151,372 |
|
|
$ |
378,408 |
|
|
$ |
438,468 |
|
Equity-based compensation not
dilutive to investors in PWP or PWP OpCo (1) |
|
|
(18,748 |
) |
|
|
(17,132 |
) |
|
|
(55,983 |
) |
|
|
(30,354 |
) |
Public company transaction
related incentives (2) |
|
|
(11,470 |
) |
|
|
(20,716 |
) |
|
|
(35,420 |
) |
|
|
(22,354 |
) |
Adjusted total
compensation and benefits |
|
$ |
93,041 |
|
|
$ |
113,524 |
|
|
$ |
287,005 |
|
|
$ |
385,760 |
|
|
|
|
|
|
|
|
|
|
Non-compensation
expense—GAAP |
|
$ |
30,938 |
|
|
$ |
36,382 |
|
|
$ |
98,141 |
|
|
$ |
97,078 |
|
TPH business combination
related expenses (3) |
|
|
(1,645 |
) |
|
|
(1,645 |
) |
|
|
(4,935 |
) |
|
|
(4,935 |
) |
Business Combination
transaction expenses (4) |
|
|
(331 |
) |
|
|
(1,610 |
) |
|
|
(920 |
) |
|
|
(4,552 |
) |
Warrant Exchange transaction
expenses (5) |
|
|
(1,176 |
) |
|
|
— |
|
|
|
(1,301 |
) |
|
|
— |
|
Adjusted
non-compensation expense (6) |
|
$ |
27,786 |
|
|
$ |
33,127 |
|
|
$ |
90,985 |
|
|
$ |
87,591 |
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)—GAAP |
|
$ |
(8,818 |
) |
|
$ |
(10,327 |
) |
|
$ |
(28,190 |
) |
|
$ |
67,203 |
|
Equity-based compensation not
dilutive to investors in PWP or PWP OpCo (1) |
|
|
18,748 |
|
|
|
17,132 |
|
|
|
55,983 |
|
|
|
30,354 |
|
Public company transaction
related incentives (2) |
|
|
11,470 |
|
|
|
20,716 |
|
|
|
35,420 |
|
|
|
22,354 |
|
TPH business combination
related expenses (3) |
|
|
1,645 |
|
|
|
1,645 |
|
|
|
4,935 |
|
|
|
4,935 |
|
Business Combination
transaction expenses (4) |
|
|
331 |
|
|
|
1,610 |
|
|
|
920 |
|
|
|
4,552 |
|
Warrant Exchange transaction
expenses (5) |
|
|
1,176 |
|
|
|
— |
|
|
|
1,301 |
|
|
|
— |
|
Adjusted operating
income (loss) |
|
$ |
24,552 |
|
|
$ |
30,776 |
|
|
$ |
70,369 |
|
|
$ |
129,398 |
|
|
|
|
|
|
|
|
|
|
Non-operating income
(expense)—GAAP |
|
$ |
529 |
|
|
$ |
1,015 |
|
|
$ |
29,756 |
|
|
$ |
(42,463 |
) |
Change in fair value of
warrant liabilities (7) |
|
|
6,294 |
|
|
|
3,006 |
|
|
|
(15,806 |
) |
|
|
2,058 |
|
Loss on debt extinguishment
(8) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
39,408 |
|
Amortization of debt costs
(9) |
|
|
37 |
|
|
|
37 |
|
|
|
111 |
|
|
|
2,049 |
|
Adjusted non-operating
income (expense) |
|
$ |
6,860 |
|
|
$ |
4,058 |
|
|
$ |
14,061 |
|
|
$ |
1,052 |
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes—GAAP |
|
$ |
(8,289 |
) |
|
$ |
(9,312 |
) |
|
$ |
1,566 |
|
|
$ |
24,740 |
|
Equity-based compensation not
dilutive to investors in PWP or PWP OpCo (1) |
|
|
18,748 |
|
|
|
17,132 |
|
|
|
55,983 |
|
|
|
30,354 |
|
Public company transaction
related incentives (2) |
|
|
11,470 |
|
|
|
20,716 |
|
|
|
35,420 |
|
|
|
22,354 |
|
TPH business combination
related expenses (3) |
|
|
1,645 |
|
|
|
1,645 |
|
|
|
4,935 |
|
|
|
4,935 |
|
Business Combination
transaction expenses (4) |
|
|
331 |
|
|
|
1,610 |
|
|
|
920 |
|
|
|
4,552 |
|
Warrant Exchange transaction
expenses (5) |
|
|
1,176 |
|
|
|
— |
|
|
|
1,301 |
|
|
|
— |
|
Change in fair value of
warrant liabilities (7) |
|
|
6,294 |
|
|
|
3,006 |
|
|
|
(15,806 |
) |
|
|
2,058 |
|
Loss on debt extinguishment
(8) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
39,408 |
|
Amortization of debt costs
(9) |
|
|
37 |
|
|
|
37 |
|
|
|
111 |
|
|
|
2,049 |
|
Adjusted income (loss)
before income taxes |
|
$ |
31,412 |
|
|
$ |
34,834 |
|
|
$ |
84,430 |
|
|
$ |
130,450 |
|
|
|
|
|
|
|
|
|
|
Income tax benefit
(expense)—GAAP |
|
$ |
(4,570 |
) |
|
$ |
(150 |
) |
|
$ |
(10,707 |
) |
|
$ |
(2,695 |
) |
Tax impact of non-GAAP
adjustments (10) |
|
|
(893 |
) |
|
|
(5,737 |
) |
|
|
(4,146 |
) |
|
|
(5,586 |
) |
Adjusted income tax
benefit (expense) |
|
$ |
(5,463 |
) |
|
$ |
(5,887 |
) |
|
$ |
(14,853 |
) |
|
$ |
(8,281 |
) |
|
|
|
|
|
|
|
|
|
Net income
(loss)—GAAP |
|
$ |
(12,859 |
) |
|
$ |
(9,462 |
) |
|
$ |
(9,141 |
) |
|
$ |
22,045 |
|
Equity-based compensation not
dilutive to investors in PWP or PWP OpCo (1) |
|
|
18,748 |
|
|
|
17,132 |
|
|
|
55,983 |
|
|
|
30,354 |
|
Public company transaction
related incentives (2) |
|
|
11,470 |
|
|
|
20,716 |
|
|
|
35,420 |
|
|
|
22,354 |
|
TPH business combination
related expenses (3) |
|
|
1,645 |
|
|
|
1,645 |
|
|
|
4,935 |
|
|
|
4,935 |
|
Business Combination
transaction expenses (4) |
|
|
331 |
|
|
|
1,610 |
|
|
|
920 |
|
|
|
4,552 |
|
Warrant Exchange transaction
expenses (5) |
|
|
1,176 |
|
|
|
— |
|
|
|
1,301 |
|
|
|
— |
|
Change in fair value of
warrant liabilities (7) |
|
|
6,294 |
|
|
|
3,006 |
|
|
|
(15,806 |
) |
|
|
2,058 |
|
Loss on debt extinguishment
(8) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
39,408 |
|
Amortization of debt costs
(9) |
|
|
37 |
|
|
|
37 |
|
|
|
111 |
|
|
|
2,049 |
|
Tax impact of non-GAAP
adjustments (10) |
|
|
(893 |
) |
|
|
(5,737 |
) |
|
|
(4,146 |
) |
|
|
(5,586 |
) |
Adjusted net income
(loss) |
|
$ |
25,949 |
|
|
$ |
28,947 |
|
|
$ |
69,577 |
|
|
$ |
122,169 |
|
|
|
|
|
|
|
|
|
|
Less: Adjusted income tax
benefit (expense) |
|
$ |
5,463 |
|
|
$ |
5,887 |
|
|
|
14,853 |
|
|
NM |
Add: If-converted tax impact
(11) |
|
|
(8,591 |
) |
|
|
(10,764 |
) |
|
|
(24,152 |
) |
|
NM |
Adjusted if-converted net
income (loss) |
|
$ |
22,821 |
|
|
$ |
24,070 |
|
|
$ |
60,278 |
|
|
NM |
|
|
|
|
|
|
|
|
|
Weighted-average diluted
shares of Class A common stock outstanding |
|
|
87,745,776 |
|
|
|
92,727,012 |
|
|
|
90,535,232 |
|
|
NM |
Weighted average number of
incremental shares from assumed exercise of warrants (12) |
|
|
— |
|
|
|
1,075,327 |
|
|
|
— |
|
|
NM |
Weighted average number of
incremental shares from assumed vesting of RSUs and PSUs (12) |
|
|
129,712 |
|
|
|
16,112 |
|
|
|
155,527 |
|
|
NM |
Weighted-average adjusted
diluted shares of Class A common stock outstanding |
|
|
87,875,488 |
|
|
|
93,818,451 |
|
|
|
90,690,759 |
|
|
NM |
|
|
|
|
|
|
|
|
|
Adjusted net income (loss) per
Class A share—diluted, if—converted (13) |
|
$ |
0.26 |
|
|
$ |
0.26 |
|
|
$ |
0.66 |
|
|
NM |
Notes to U.S. GAAP Reconciliation of Adjusted
Results:
(1) Equity-based compensation not
dilutive to investors in PWP or PWP Holdings LP (“PWP OpCo”)
includes amortization of legacy awards granted to certain partners
prior to the Business Combination and PWP Professional Partners LP
(“Professional Partners”) ACU and VCU awards. The vesting of these
awards does not dilute PWP shareholders relative to Professional
Partners as Professional Partners’ interest in PWP OpCo does not
change as a result of granting those equity awards to its working
partners.
(2) Public company transaction
related incentives includes discretionary bonus payments as well as
equity-based compensation for transaction-related RSUs which are
directly related to milestone events that were part of the Business
Combination process and reorganization. These payments were outside
of PWP’s normal and recurring bonus and compensation processes.
(3) On November 30,
2016, we completed a business combination with Tudor, Pickering,
Holt & Co., LLC (TPH), an independent advisory firm focused on
the energy industry. TPH business combination related expenses
include intangible asset amortization associated with the
acquisition.
(4) Transaction
costs that were expensed associated with the Business Combination
as well as equity-based vesting for transaction-related RSUs issued
to non-employees.
(5) Transaction
costs that were expensed associated with the exchange offer and
solicitation (together, the “Warrant Exchange”) relating to the
Company’s outstanding warrants, which the Company completed on
August 23, 2022.
(6) See
reconciliation below for the components of the consolidated
statements of operations included in non-compensation expense—GAAP
as well as Adjusted non-compensation expense.
(7) Change in fair
value of warrant liabilities is non-cash and we believe not
indicative of our core performance.
(8) Loss on debt
extinguishment resulted from the payoff of the 7.0% Subordinated
Unsecured Convertible Notes due 2026 in conjunction with the
Business Combination.
(9) Amortization of
debt costs is comprised of the amortization of debt discounts and
issuance costs, which is included in interest expense.
(10) The non-GAAP
tax expense represents the Company’s calculated tax expense on
adjusted non-GAAP income. It excludes the impact on income taxes of
certain transaction-related items and other items not reflected in
our adjusted non-GAAP results. It does not represent the cash that
the Company expects to pay for taxes in the current periods.
(11) The
if-converted tax expense represents the Company's calculated tax
expense on adjusted non-GAAP income assuming the exchange of all
partnership units for PWP Class A common stock, resulting in all of
the Company’s income being subject to corporate-level tax.
(12) Assumed
exercise of warrants and vesting of RSUs and performance restricted
stock units (“PSUs”) as calculated using the treasury stock method
and to the extent dilutive to Adjusted net income (loss) per Class
A share—diluted, if-converted.
(13) Adjusted net
income (loss) per Class A share—diluted, if-converted for the nine
month period ended June 30, 2021 is not meaningful or comparative
to GAAP diluted earnings per share, as it excludes activity prior
to the Business Combination on June 24, 2021.
U.S. GAAP Reconciliation of Adjusted
Results (Unaudited)(Dollars in
Thousands)
|
|
Three Months Ended September 30, 2022 |
|
|
U.S. GAAP |
|
Adjustments |
|
Adjusted |
Professional fees |
|
$ |
8,180 |
|
|
$ |
(1,507 |
) |
(1) |
$ |
6,673 |
|
Technology and
infrastructure |
|
|
7,337 |
|
|
|
— |
|
|
|
7,337 |
|
Rent and occupancy |
|
|
6,404 |
|
|
|
— |
|
|
|
6,404 |
|
Travel and related
expenses |
|
|
2,912 |
|
|
|
— |
|
|
|
2,912 |
|
General, administrative and
other expenses |
|
|
3,648 |
|
|
|
— |
|
|
|
3,648 |
|
Depreciation and
amortization |
|
|
2,457 |
|
|
|
(1,645 |
) |
(2) |
|
812 |
|
Non-compensation expense |
|
$ |
30,938 |
|
|
$ |
(3,152 |
) |
|
$ |
27,786 |
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2021 |
|
|
U.S. GAAP |
|
Adjustments |
|
Adjusted |
Professional fees |
|
$ |
11,006 |
|
|
$ |
(1,610 |
) |
(1) |
$ |
9,396 |
|
Technology and
infrastructure |
|
|
7,368 |
|
|
|
|
|
7,368 |
|
Rent and occupancy |
|
|
6,773 |
|
|
|
|
|
6,773 |
|
Travel and related
expenses |
|
|
1,629 |
|
|
|
|
|
1,629 |
|
General, administrative and
other expenses |
|
|
6,127 |
|
|
|
|
|
6,127 |
|
Depreciation and
amortization |
|
|
3,479 |
|
|
|
(1,645 |
) |
(2) |
|
1,834 |
|
Non-compensation expense |
|
$ |
36,382 |
|
|
$ |
(3,255 |
) |
|
$ |
33,127 |
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2022 |
|
|
U.S. GAAP |
|
Adjustments |
|
Adjusted |
Professional fees |
|
$ |
25,902 |
|
|
$ |
(2,221 |
) |
(1) |
$ |
23,681 |
|
Technology and
infrastructure |
|
|
22,414 |
|
|
|
— |
|
|
|
22,414 |
|
Rent and occupancy |
|
|
17,511 |
|
|
|
— |
|
|
|
17,511 |
|
Travel and related
expenses |
|
|
8,847 |
|
|
|
— |
|
|
|
8,847 |
|
General, administrative and
other expenses |
|
|
15,414 |
|
|
|
— |
|
|
|
15,414 |
|
Depreciation and
amortization |
|
|
8,053 |
|
|
|
(4,935 |
) |
(2) |
|
3,118 |
|
Non-compensation expense |
|
$ |
98,141 |
|
|
$ |
(7,156 |
) |
|
$ |
90,985 |
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2021 |
|
|
U.S. GAAP |
|
Adjustments |
|
Adjusted |
Professional fees |
|
$ |
28,954 |
|
|
$ |
(4,552 |
) |
(1) |
$ |
24,402 |
|
Technology and
infrastructure |
|
|
21,465 |
|
|
|
|
|
21,465 |
|
Rent and occupancy |
|
|
20,068 |
|
|
|
|
|
20,068 |
|
Travel and related
expenses |
|
|
3,505 |
|
|
|
|
|
3,505 |
|
General, administrative and
other expenses |
|
|
12,005 |
|
|
|
|
|
12,005 |
|
Depreciation and
amortization |
|
|
11,081 |
|
|
|
(4,935 |
) |
(2) |
|
6,146 |
|
Non-compensation expense |
|
$ |
97,078 |
|
|
$ |
(9,487 |
) |
|
$ |
87,591 |
|
|
|
|
|
|
|
|
(1) Reflects an adjustment to exclude transaction costs
associated with the Business Combination and the Warrant
Exchange.
(2) Reflects an adjustment to exclude the amortization of
intangible assets related to the TPH business combination.
* Throughout this release, adjusted figures represent Non-GAAP
information. See “Non-GAAP Financial Measures” and the tables at
the end of this release for an explanation of the adjustments and
reconciliations to the comparable GAAP numbers.
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