Perella Weinberg Partners (the “Firm” or “PWP”) (NASDAQ:PWP) today
reported financial results for the full year and fourth quarter
ended December 31, 2022. The Firm reported revenues of $631.5
million for the year ended December 31, 2022, compared with
$801.7 million for the year ended December 31, 2021, a record
year for the firm. GAAP net loss and adjusted net income were
$(31.7) million and $81.6 million, respectively, for the year ended
December 31, 2022, compared with GAAP net income of $4.0
million and adjusted net income of $160.5 million for the year
ended December 31, 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 $(0.46) and $0.78, respectively, for the year
ended December 31, 2022.
The Firm reported fourth quarter revenues of
$183.1 million for the three months ended December 31, 2022,
compared with $198.9 million for the three months ended
December 31, 2021. GAAP net loss and adjusted net income were
$(22.6) million and $12.0 million, respectively, for the three
months ended December 31, 2022, compared with GAAP net loss of
$(18.0) million and adjusted net income of $38.4 million for the
three months ended December 31, 2021. GAAP diluted EPS and
adjusted EPS were $(0.28) and $0.11, respectively, for the three
months ended December 31, 2022.
“Despite one of the most challenging economic
environments in recent memory, it’s a great testament to the firm
that in this context we continued to grow our partnership, our MD
group and the firm; expanded our client relationships around the
world; and returned a significant amount of capital to
shareholders. In addition, we accomplished a smooth transition of
leadership without missing a beat,” stated Peter Weinberg, Founding
Partner and Chairman.
“We enter 2023 with momentum and a continued
focus on scaling our platform over the longer-term. As we begin a
new year, we reflect on how grateful we are for our dedicated
clients, our exceptional teammates, and the outstanding leadership
which Peter provided since the founding of our firm nearly 17 years
ago,” stated Andrew Bednar, Chief Executive Officer.
Selected Financial Data
(Unaudited)(Dollars in Thousands, Except Per Share
Amounts)
|
|
U.S. GAAP |
|
Adjusted |
|
|
Twelve Months Ended December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenues |
|
$ |
631,507 |
|
|
$ |
801,662 |
|
|
$ |
631,507 |
|
|
$ |
801,662 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Total compensation and benefits |
|
|
545,491 |
|
|
|
600,694 |
|
|
|
421,138 |
|
|
|
504,257 |
|
Non-compensation expenses |
|
|
133,749 |
|
|
|
134,384 |
|
|
|
123,116 |
|
|
|
122,973 |
|
Operating income (loss) |
|
|
(47,733 |
) |
|
|
66,584 |
|
|
|
87,253 |
|
|
|
174,432 |
|
Total non-operating income (expenses) |
|
|
26,313 |
|
|
|
(43,634 |
) |
|
|
10,656 |
|
|
|
2,758 |
|
Income (loss) before provision
for income taxes |
|
|
(21,420 |
) |
|
|
22,950 |
|
|
|
97,909 |
|
|
|
177,190 |
|
Income tax benefit (expense) |
|
|
(10,327 |
) |
|
|
(18,927 |
) |
|
|
(16,286 |
) |
|
|
(16,654 |
) |
Net income (loss) |
|
$ |
(31,747 |
) |
|
$ |
4,023 |
|
|
$ |
81,623 |
|
|
$ |
160,536 |
|
Net income (loss) attributable
to non-controlling interests |
|
|
(49,625 |
) |
|
|
13,444 |
|
|
|
|
|
Net income (loss) attributable
to Perella Weinberg Partners |
|
$ |
17,878 |
|
|
$ |
(9,421 |
) |
|
|
|
|
Net income (loss) |
|
|
|
|
|
$ |
81,623 |
|
|
|
Less: Adjusted income tax
benefit (expense) |
|
|
|
|
|
|
16,286 |
|
|
|
Add: If-converted tax
impact |
|
|
|
|
|
|
(27,656 |
) |
|
|
Adjusted if-converted net
income (loss) |
|
|
|
|
|
$ |
70,253 |
|
|
|
Net income (loss) per share
attributable to Class A common shareholders (1) |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.41 |
|
|
$ |
(0.22 |
) |
|
|
|
|
Diluted |
|
$ |
(0.46 |
) |
|
$ |
(0.66 |
) |
|
|
|
|
Diluted, If-Converted |
|
|
|
|
|
$ |
0.78 |
|
|
NM |
Weighted-average shares of
Class A common stock outstanding (1) |
|
|
|
|
|
|
|
|
Basic |
|
|
43,837,640 |
|
|
|
42,595,712 |
|
|
|
|
|
Diluted |
|
|
89,755,632 |
|
|
|
92,749,911 |
|
|
|
90,125,045 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For the twelve months ended
December 31, 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 December 31, 2021, the period following the business
combination with FinTech Acquisition Corp. IV, which closed on June
24, 2021 (the “Business Combination”). Adjusted net income (loss)
per Class A share - Diluted, If-Converted for the twelve months
ended December 31, 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.
Selected Financial Data
(Unaudited)(Dollars in Thousands, Except Per Share
Amounts)
|
|
U.S. GAAP |
|
Adjusted |
|
|
Three Months Ended December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenues |
|
$ |
183,148 |
|
|
$ |
198,913 |
|
|
$ |
183,148 |
|
|
$ |
198,913 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Total compensation and benefits |
|
|
167,083 |
|
|
|
162,226 |
|
|
|
134,133 |
|
|
|
118,497 |
|
Non-compensation expenses |
|
|
35,608 |
|
|
|
37,306 |
|
|
|
32,131 |
|
|
|
35,382 |
|
Operating income (loss) |
|
|
(19,543 |
) |
|
|
(619 |
) |
|
|
16,884 |
|
|
|
45,034 |
|
Total non-operating income (expenses) |
|
|
(3,443 |
) |
|
|
(1,171 |
) |
|
|
(3,405 |
) |
|
|
1,706 |
|
Income (loss) before provision
for income taxes |
|
|
(22,986 |
) |
|
|
(1,790 |
) |
|
|
13,479 |
|
|
|
46,740 |
|
Income tax benefit (expense) |
|
|
380 |
|
|
|
(16,232 |
) |
|
|
(1,433 |
) |
|
|
(8,372 |
) |
Net income (loss) |
|
$ |
(22,606 |
) |
|
$ |
(18,022 |
) |
|
$ |
12,046 |
|
|
$ |
38,368 |
|
Net income (loss) attributable
to non-controlling interests |
|
|
(21,185 |
) |
|
|
(17,624 |
) |
|
|
|
|
Net income (loss) attributable
to Perella Weinberg Partners |
|
$ |
(1,421 |
) |
|
$ |
(398 |
) |
|
|
|
|
Net income (loss) |
|
|
|
|
|
$ |
12,046 |
|
|
$ |
38,368 |
|
Less: Adjusted income tax
benefit (expense) |
|
|
|
|
|
|
1,433 |
|
|
|
8,372 |
|
Add: If-converted tax
impact |
|
|
|
|
|
|
(3,504 |
) |
|
|
(15,502 |
) |
Adjusted if-converted net
income (loss) |
|
|
|
|
|
$ |
9,975 |
|
|
$ |
31,238 |
|
Net income (loss) per share
attributable to Class A common shareholders |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.03 |
) |
|
$ |
(0.01 |
) |
|
|
|
|
Diluted |
|
$ |
(0.28 |
) |
|
$ |
(0.26 |
) |
|
|
|
|
Diluted, If-Converted |
|
|
|
|
|
$ |
0.11 |
|
|
$ |
0.33 |
|
Weighted-average shares of
Class A common stock outstanding |
|
|
|
|
|
|
|
|
Basic |
|
|
42,638,357 |
|
|
|
42,591,146 |
|
|
|
|
|
Diluted |
|
|
87,442,255 |
|
|
|
92,745,345 |
|
|
|
88,453,323 |
|
|
|
94,293,814 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
For the year ended December 31, 2022,
revenues were $631.5 million, compared with $801.7 million for
2021, a decrease of 21% off of record year performance. For the
fourth quarter 2022, revenues were $183.1 million, a decrease of 8%
from $198.9 million for the fourth quarter 2021. The
period-over-period decline, for both the full year and the fourth
quarter, was primarily driven by a reduction in mergers and
acquisition activity partially offset by a step-up in fees related
to our financing and capital solutions advisory business. The
decrease in revenues for the full year period can be attributed to
both fewer advisory transaction completions as well as a decrease
in average fee size per client. The decrease in revenues for the
fourth quarter 2022 was driven by a decrease in average fee size
per client as compared to the fourth quarter 2021, despite a modest
increase in the number of advisory transaction completions.
Expenses
|
|
U.S. GAAP |
|
Adjusted |
(Dollars in
thousands) |
|
Twelve Months Ended December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Total compensation and
benefits |
|
$ |
545,491 |
|
|
$ |
600,694 |
|
|
$ |
421,138 |
|
|
$ |
504,257 |
|
% of Revenues |
|
|
86 |
% |
|
|
75 |
% |
|
|
67 |
% |
|
|
63 |
% |
Non-compensation expenses |
|
$ |
133,749 |
|
|
$ |
134,384 |
|
|
$ |
123,116 |
|
|
$ |
122,973 |
|
% of Revenues |
|
|
21 |
% |
|
|
17 |
% |
|
|
19 |
% |
|
|
15 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP total compensation and benefits were $545.5
million for the year ended December 31, 2022, compared to
$600.7 million for the year ended December 31, 2021. Adjusted
total compensation and benefits were $421.1 million for the year
ended December 31, 2022, compared to $504.3 million for the
year ended December 31, 2021. The decrease in both GAAP total
compensation and benefits and adjusted total compensation and
benefits was due to a smaller bonus accrual on an absolute dollar
basis associated with lower revenues, despite a higher compensation
margin necessitated to attract, motivate and retain talent. On a
GAAP basis, the smaller bonus accrual amount was partially offset
by increased equity-based compensation related to equity awards
issued in connection with or subsequent to the Business
Combination.
GAAP non-compensation expenses were $133.7
million for the year ended December 31, 2022, compared with
$134.4 million for the year ended December 31, 2021. Adjusted
non-compensation expenses were $123.1 million for the year ended
December 31, 2022, compared with $123.0 million for the year
ended December 31, 2021. The relative stability experienced in
both GAAP non-compensation expenses and non-compensation expenses
on an adjusted basis was the result of a step-up in certain spend,
including an increase in travel and related expenses as our teams
returned to more normalized travel, an increase in technology and
recruiting spend, a full year of public company costs including
D&O insurance, and an increase in bad debt expense, offset by a
moderation in other spend categories including a decrease in
professional fees related to consulting and legal expense, lower
rent and occupancy costs as a result of our New York lease
extension, and reduced depreciation and amortization expense due to
office locations reaching the end of their initial lease terms. On
a GAAP basis, non-compensation expenses also comprised of costs
associated with a potential future partnership restructuring that
had been contemplated during the implementation of the up-C
structure as well as costs associated with the warrant exchange
transaction.
|
|
U.S. GAAP |
|
Adjusted |
(Dollars in
thousands) |
|
Three Months Ended December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Total compensation and
benefits |
|
$ |
167,083 |
|
|
$ |
162,226 |
|
|
$ |
134,133 |
|
|
$ |
118,497 |
|
% of Revenues |
|
|
91 |
% |
|
|
82 |
% |
|
|
73 |
% |
|
|
60 |
% |
Non-compensation expenses |
|
$ |
35,608 |
|
|
$ |
37,306 |
|
|
$ |
32,131 |
|
|
$ |
35,382 |
|
% of Revenues |
|
|
19 |
% |
|
|
19 |
% |
|
|
18 |
% |
|
|
18 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP total compensation and benefits were $167.1
million for the fourth quarter 2022, compared to $162.2 million for
the fourth quarter 2021. Adjusted total compensation and benefits
were $134.1 million for the fourth quarter 2022 as compared to
$118.5 million for the same period a year ago. The increase in both
GAAP total compensation and benefits and adjusted total
compensation and benefits in the fourth quarter 2022 was due to a
higher compensation margin which was the result of a decision made
in the fourth quarter to increase the full year compensation margin
from the level where the Firm was previously accruing.
GAAP non-compensation expenses were $35.6
million for the fourth quarter 2022, compared with $37.3 million
for the fourth quarter 2021. Adjusted non-compensation expenses
were $32.1 million for the fourth quarter 2022, compared with $35.4
million for the same period a year ago. The decrease in both GAAP
non-compensation expenses and non-compensation expenses on an
adjusted basis was primarily driven by lower professional fees
related to consulting and recruiting, reduced depreciation and
amortization expense due to office locations reaching the end of
their initial lease terms, and reduced D&O insurance costs over
the prior year period, partially offset by an increase in travel
and related expenses as our teams returned to more normalized
travel, periods of overlapping rent related to our new headquarter
locations, and an increase in technology spend. On a GAAP basis,
the decrease in non-compensation expenses was also partially offset
by costs incurred in the fourth quarter 2022 relating to a
potential future partnership restructuring that had been
contemplated during the implementation of the up-C structure at the
time of the Business Combination.
Provision for Income Taxes
Perella Weinberg Partners currently owns 48.39%
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 twelve months ended
December 31, 2022, the effective tax rate for adjusted
if-converted net income was 28.25%.
Balance Sheet and Capital
Management
As of December 31, 2022, PWP had $311.7
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.
On February 8, 2023, the Firm’s Board of
Directors authorized the additional repurchase of shares of PWP’s
Class A common stock in an amount of up to $100 million incremental
to the remaining value of approximately $25 million as of February
8, 2023 from February 2022’s authorization. The authorization does
not require the purchase of any minimum number of shares.
PWP may purchase shares from time to time at the
discretion of management through open market purchases, privately
negotiated transactions, block trades, accelerated or other
structured share repurchase programs, or other means. The manner,
timing, pricing and amount of any transactions will be subject to
the discretion of PWP and may be based upon market conditions and
alternative opportunities that PWP may have for the use or
investment of its capital. The Company may also from time to time
establish one or more plans under Rule 10b5-1 of the Securities
Exchange Act of 1934, as amended. The repurchase program may be
modified, suspended or discontinued at any time.
During the twelve months ended December 31,
2022, PWP returned $104 million dollars to shareholders through the
repurchase of 9,544,016 shares at an average price per share of
$7.20 in open market transactions pursuant to PWP’s Class A common
stock repurchase program, the net settlement of 1,045,847 share
equivalents to satisfy tax withholding obligations at an average
price per share of $9.28 and the payment of $25.7 million dollars
in pro rata distributions to limited partners which allowed PWP to
pay its dividends of $12.8 million dollars.
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 March 10, 2023 to Class A common
stockholders of record on February 28, 2023.
Conference Call and Webcast
Management will host a webcast and conference
call on Thursday, February 9, 2023 at 9:00 am ET to discuss PWP’s
financial results for the full year and fourth quarter ended
December 31, 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) 245-3047
- International: (203) 518-9765
- Conference ID: PWPQ422
Replay
A replay of the call will also be available on
PWP’s website approximately two hours after the live call through
February 16, 2023. To access the replay, dial (800) 839-5493
(Domestic) or (402) 220-2552 (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 EndedDecember
31, |
|
Twelve Months EndedDecember
31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenues |
|
$ |
183,148 |
|
|
$ |
198,913 |
|
|
$ |
631,507 |
|
|
$ |
801,662 |
|
Expenses |
|
|
|
|
|
|
|
|
Compensation and benefits |
|
|
127,241 |
|
|
|
117,168 |
|
|
|
391,333 |
|
|
|
504,364 |
|
Equity-based compensation |
|
|
39,842 |
|
|
|
45,058 |
|
|
|
154,158 |
|
|
|
96,330 |
|
Total compensation and benefits |
|
|
167,083 |
|
|
|
162,226 |
|
|
|
545,491 |
|
|
|
600,694 |
|
Professional fees |
|
|
8,922 |
|
|
|
12,937 |
|
|
|
34,824 |
|
|
|
41,891 |
|
Technology and infrastructure |
|
|
7,670 |
|
|
|
6,890 |
|
|
|
30,084 |
|
|
|
28,355 |
|
Rent and occupancy |
|
|
7,387 |
|
|
|
6,338 |
|
|
|
24,898 |
|
|
|
26,406 |
|
Travel and related expenses |
|
|
4,187 |
|
|
|
2,756 |
|
|
|
13,034 |
|
|
|
6,261 |
|
General, administrative and other expenses |
|
|
4,801 |
|
|
|
4,977 |
|
|
|
20,215 |
|
|
|
16,982 |
|
Depreciation and amortization |
|
|
2,641 |
|
|
|
3,408 |
|
|
|
10,694 |
|
|
|
14,489 |
|
Total expenses |
|
|
202,691 |
|
|
|
199,532 |
|
|
|
679,240 |
|
|
|
735,078 |
|
Operating income
(loss) |
|
|
(19,543 |
) |
|
|
(619 |
) |
|
|
(47,733 |
) |
|
|
66,584 |
|
Non-operating income
(expenses) |
|
|
|
|
|
|
|
|
Related party income |
|
|
557 |
|
|
|
2,213 |
|
|
|
2,805 |
|
|
|
7,516 |
|
Other income (expense) |
|
|
(3,930 |
) |
|
|
(475 |
) |
|
|
7,978 |
|
|
|
761 |
|
Change in fair value of warrant liabilities |
|
|
— |
|
|
|
(2,839 |
) |
|
|
15,806 |
|
|
|
(4,897 |
) |
Loss on debt extinguishment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(39,408 |
) |
Interest expense |
|
|
(70 |
) |
|
|
(70 |
) |
|
|
(276 |
) |
|
|
(7,606 |
) |
Total non-operating income (expenses) |
|
|
(3,443 |
) |
|
|
(1,171 |
) |
|
|
26,313 |
|
|
|
(43,634 |
) |
Income (loss) before
income taxes |
|
|
(22,986 |
) |
|
|
(1,790 |
) |
|
|
(21,420 |
) |
|
|
22,950 |
|
Income tax benefit (expense) |
|
|
380 |
|
|
|
(16,232 |
) |
|
|
(10,327 |
) |
|
|
(18,927 |
) |
Net income
(loss) |
|
|
(22,606 |
) |
|
|
(18,022 |
) |
|
|
(31,747 |
) |
|
|
4,023 |
|
Less: Net income
(loss) attributable to non-controlling interests |
|
|
(21,185 |
) |
|
|
(17,624 |
) |
|
|
(49,625 |
) |
|
|
13,444 |
|
Net income (loss)
attributable to Perella Weinberg Partners |
|
$ |
(1,421 |
) |
|
$ |
(398 |
) |
|
$ |
17,878 |
|
|
$ |
(9,421 |
) |
Net income (loss) per
share attributable to Class A common shareholders (1) |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.03 |
) |
|
$ |
(0.01 |
) |
|
$ |
0.41 |
|
|
$ |
(0.22 |
) |
Diluted |
|
$ |
(0.28 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.46 |
) |
|
$ |
(0.66 |
) |
Weighted-average
shares of Class A common stock outstanding (1) |
|
|
|
|
|
|
|
|
Basic |
|
|
42,638,357 |
|
|
|
42,591,146 |
|
|
|
43,837,640 |
|
|
|
42,595,712 |
|
Diluted |
|
|
87,442,255 |
|
|
|
92,745,345 |
|
|
|
89,755,632 |
|
|
|
92,749,911 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For the twelve months ended December
31, 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 December
31, 2021, the period following the Business Combination.
U.S. GAAP Reconciliation of Adjusted
Results (Unaudited)(Dollars in
Thousands)
|
|
Three Months EndedDecember
31, |
|
Twelve Months Ended December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Total compensation and benefits—GAAP |
|
$ |
167,083 |
|
|
$ |
162,226 |
|
|
$ |
545,491 |
|
|
$ |
600,694 |
|
Equity-based compensation not dilutive to investors in PWP or PWP
OpCo (1) |
|
|
(18,633 |
) |
|
|
(21,085 |
) |
|
|
(74,616 |
) |
|
|
(51,439 |
) |
Public company transaction related incentives (2) |
|
|
(14,317 |
) |
|
|
(22,644 |
) |
|
|
(49,737 |
) |
|
|
(44,998 |
) |
Adjusted total compensation and benefits |
|
$ |
134,133 |
|
|
$ |
118,497 |
|
|
$ |
421,138 |
|
|
$ |
504,257 |
|
|
|
|
|
|
|
|
|
|
Non-compensation expense—GAAP |
|
$ |
35,608 |
|
|
$ |
37,306 |
|
|
$ |
133,749 |
|
|
$ |
134,384 |
|
TPH
business combination related expenses (3) |
|
|
(1,645 |
) |
|
|
(1,645 |
) |
|
|
(6,580 |
) |
|
|
(6,580 |
) |
Business Combination transaction expenses (4) |
|
|
(1,832 |
) |
|
|
(279 |
) |
|
|
(2,752 |
) |
|
|
(4,831 |
) |
Warrant Exchange transaction expenses (5) |
|
|
— |
|
|
|
— |
|
|
|
(1,301 |
) |
|
|
— |
|
Adjusted non-compensation expense (6) |
|
$ |
32,131 |
|
|
$ |
35,382 |
|
|
$ |
123,116 |
|
|
$ |
122,973 |
|
|
|
|
|
|
|
|
|
|
Operating income (loss)—GAAP |
|
$ |
(19,543 |
) |
|
$ |
(619 |
) |
|
$ |
(47,733 |
) |
|
$ |
66,584 |
|
Equity-based compensation not dilutive to investors in PWP or PWP
OpCo (1) |
|
|
18,633 |
|
|
|
21,085 |
|
|
|
74,616 |
|
|
|
51,439 |
|
Public company transaction related incentives (2) |
|
|
14,317 |
|
|
|
22,644 |
|
|
|
49,737 |
|
|
|
44,998 |
|
TPH
business combination related expenses (3) |
|
|
1,645 |
|
|
|
1,645 |
|
|
|
6,580 |
|
|
|
6,580 |
|
Business Combination transaction expenses (4) |
|
|
1,832 |
|
|
|
279 |
|
|
|
2,752 |
|
|
|
4,831 |
|
Warrant Exchange transaction expenses (5) |
|
|
— |
|
|
|
— |
|
|
|
1,301 |
|
|
|
— |
|
Adjusted operating income (loss) |
|
$ |
16,884 |
|
|
$ |
45,034 |
|
|
$ |
87,253 |
|
|
$ |
174,432 |
|
|
|
|
|
|
|
|
|
|
Non-operating income (expense)—GAAP |
|
$ |
(3,443 |
) |
|
$ |
(1,171 |
) |
|
$ |
26,313 |
|
|
$ |
(43,634 |
) |
Change in fair value of warrant liabilities (7) |
|
|
— |
|
|
|
2,839 |
|
|
|
(15,806 |
) |
|
|
4,897 |
|
Loss
on debt extinguishment (8) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
39,408 |
|
Amortization of debt costs (9) |
|
|
38 |
|
|
|
38 |
|
|
|
149 |
|
|
|
2,087 |
|
Adjusted non-operating income (expense) |
|
$ |
(3,405 |
) |
|
$ |
1,706 |
|
|
$ |
10,656 |
|
|
$ |
2,758 |
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes—GAAP |
|
$ |
(22,986 |
) |
|
$ |
(1,790 |
) |
|
$ |
(21,420 |
) |
|
$ |
22,950 |
|
Equity-based compensation not dilutive to investors in PWP or PWP
OpCo (1) |
|
|
18,633 |
|
|
|
21,085 |
|
|
|
74,616 |
|
|
|
51,439 |
|
Public company transaction related incentives (2) |
|
|
14,317 |
|
|
|
22,644 |
|
|
|
49,737 |
|
|
|
44,998 |
|
TPH
business combination related expenses (3) |
|
|
1,645 |
|
|
|
1,645 |
|
|
|
6,580 |
|
|
|
6,580 |
|
Business Combination transaction expenses (4) |
|
|
1,832 |
|
|
|
279 |
|
|
|
2,752 |
|
|
|
4,831 |
|
Warrant Exchange transaction expenses (5) |
|
|
— |
|
|
|
— |
|
|
|
1,301 |
|
|
|
— |
|
Change in fair value of warrant liabilities (7) |
|
|
— |
|
|
|
2,839 |
|
|
|
(15,806 |
) |
|
|
4,897 |
|
Loss
on debt extinguishment (8) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
39,408 |
|
Amortization of debt costs (9) |
|
|
38 |
|
|
|
38 |
|
|
|
149 |
|
|
|
2,087 |
|
Adjusted income (loss) before income taxes |
|
$ |
13,479 |
|
|
$ |
46,740 |
|
|
$ |
97,909 |
|
|
$ |
177,190 |
|
|
|
|
|
|
|
|
|
|
Income tax benefit (expense)—GAAP |
|
$ |
380 |
|
|
$ |
(16,232 |
) |
|
$ |
(10,327 |
) |
|
$ |
(18,927 |
) |
Tax
impact of non-GAAP adjustments (10) |
|
|
(1,813 |
) |
|
|
7,860 |
|
|
|
(5,959 |
) |
|
|
2,273 |
|
Adjusted income tax benefit (expense) |
|
$ |
(1,433 |
) |
|
$ |
(8,372 |
) |
|
$ |
(16,286 |
) |
|
$ |
(16,654 |
) |
|
|
|
|
|
|
|
|
|
Net income (loss)—GAAP |
|
$ |
(22,606 |
) |
|
$ |
(18,022 |
) |
|
$ |
(31,747 |
) |
|
$ |
4,023 |
|
Equity-based compensation not dilutive to investors in PWP or PWP
OpCo (1) |
|
|
18,633 |
|
|
|
21,085 |
|
|
|
74,616 |
|
|
|
51,439 |
|
Public company transaction related incentives (2) |
|
|
14,317 |
|
|
|
22,644 |
|
|
|
49,737 |
|
|
|
44,998 |
|
TPH
business combination related expenses (3) |
|
|
1,645 |
|
|
|
1,645 |
|
|
|
6,580 |
|
|
|
6,580 |
|
Business Combination transaction expenses (4) |
|
|
1,832 |
|
|
|
279 |
|
|
|
2,752 |
|
|
|
4,831 |
|
Warrant Exchange transaction expenses (5) |
|
|
— |
|
|
|
— |
|
|
|
1,301 |
|
|
|
— |
|
Change in fair value of warrant liabilities (7) |
|
|
— |
|
|
|
2,839 |
|
|
|
(15,806 |
) |
|
|
4,897 |
|
Loss
on debt extinguishment (8) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
39,408 |
|
Amortization of debt costs (9) |
|
|
38 |
|
|
|
38 |
|
|
|
149 |
|
|
|
2,087 |
|
Tax
impact of non-GAAP adjustments (10) |
|
|
(1,813 |
) |
|
|
7,860 |
|
|
|
(5,959 |
) |
|
|
2,273 |
|
Adjusted net income (loss) |
|
$ |
12,046 |
|
|
$ |
38,368 |
|
|
$ |
81,623 |
|
|
$ |
160,536 |
|
|
|
|
|
|
|
|
|
|
Less:
Adjusted income tax benefit (expense) |
|
$ |
1,433 |
|
|
$ |
8,372 |
|
|
|
16,286 |
|
|
NM |
Add:
If-converted tax impact (11) |
|
|
(3,504 |
) |
|
|
(15,502 |
) |
|
|
(27,656 |
) |
|
NM |
Adjusted if-converted net income (loss) |
|
$ |
9,975 |
|
|
$ |
31,238 |
|
|
$ |
70,253 |
|
|
NM |
|
|
|
|
|
|
|
|
|
Weighted-average diluted shares of Class A common stock
outstanding |
|
|
87,442,255 |
|
|
|
94,293,814 |
|
|
|
89,755,632 |
|
|
NM |
Weighted average number of incremental shares from assumed vesting
of RSUs and PSUs (12) |
|
|
1,011,068 |
|
|
|
— |
|
|
|
369,413 |
|
|
NM |
Weighted-average adjusted diluted shares of Class A common stock
outstanding |
|
|
88,453,323 |
|
|
|
94,293,814 |
|
|
|
90,125,045 |
|
|
NM |
|
|
|
|
|
|
|
|
|
Adjusted net income (loss) per Class A share—diluted, if—converted
(13) |
|
$ |
0.11 |
|
|
$ |
0.33 |
|
|
$ |
0.78 |
|
|
NM |
|
|
|
|
|
|
|
|
|
Key metrics: (a) |
|
|
|
|
|
|
|
|
GAAP
operating income (loss) margin |
|
(10.7) % |
|
(0.3) % |
|
(7.6) % |
|
|
8.3 |
% |
Adjusted operating income (loss) margin |
|
|
9.2 |
% |
|
|
22.6 |
% |
|
|
13.8 |
% |
|
|
21.8 |
% |
|
|
|
|
|
|
|
|
|
(a)
Reconciliations of key metrics from U.S. GAAP to Adjusted results
are a derivative of the reconciliation of their components
above. |
|
|
|
|
|
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, including costs
incurred in 2022 relating to a potential future partnership
restructuring that had been contemplated during the implementation
of the up-C structure at the time of the Business Combination.
Transaction costs also include 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 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 twelve month period
ended December 31, 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)
|
|
Twelve Months Ended December 31, 2022 |
|
|
U.S. GAAP |
|
Adjustments |
|
Adjusted |
Professional fees |
|
$ |
34,824 |
|
$ |
(4,053 |
) |
(1 |
) |
$ |
30,771 |
Technology and
infrastructure |
|
|
30,084 |
|
|
— |
|
|
|
30,084 |
Rent and occupancy |
|
|
24,898 |
|
|
— |
|
|
|
24,898 |
Travel and related
expenses |
|
|
13,034 |
|
|
— |
|
|
|
13,034 |
General, administrative and
other expenses |
|
|
20,215 |
|
|
— |
|
|
|
20,215 |
Depreciation and
amortization |
|
|
10,694 |
|
|
(6,580 |
) |
(2 |
) |
|
4,114 |
Non-compensation expense |
|
$ |
133,749 |
|
$ |
(10,633 |
) |
|
$ |
123,116 |
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31, 2021 |
|
|
U.S. GAAP |
|
Adjustments |
|
Adjusted |
Professional fees |
|
$ |
41,891 |
|
$ |
(4,831 |
) |
(1 |
) |
$ |
37,060 |
Technology and
infrastructure |
|
|
28,355 |
|
|
— |
|
|
|
28,355 |
Rent and occupancy |
|
|
26,406 |
|
|
— |
|
|
|
26,406 |
Travel and related
expenses |
|
|
6,261 |
|
|
— |
|
|
|
6,261 |
General, administrative and
other expenses |
|
|
16,982 |
|
|
— |
|
|
|
16,982 |
Depreciation and
amortization |
|
|
14,489 |
|
|
(6,580 |
) |
(2 |
) |
|
7,909 |
Non-compensation expense |
|
$ |
134,384 |
|
$ |
(11,411 |
) |
|
$ |
122,973 |
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2022 |
|
|
U.S. GAAP |
|
Adjustments |
|
Adjusted |
Professional fees |
|
$ |
8,922 |
|
$ |
(1,832 |
) |
(1 |
) |
$ |
7,090 |
Technology and
infrastructure |
|
|
7,670 |
|
|
— |
|
|
|
7,670 |
Rent and occupancy |
|
|
7,387 |
|
|
— |
|
|
|
7,387 |
Travel and related
expenses |
|
|
4,187 |
|
|
— |
|
|
|
4,187 |
General, administrative and
other expenses |
|
|
4,801 |
|
|
— |
|
|
|
4,801 |
Depreciation and
amortization |
|
|
2,641 |
|
|
(1,645 |
) |
(2 |
) |
|
996 |
Non-compensation expense |
|
$ |
35,608 |
|
$ |
(3,477 |
) |
|
$ |
32,131 |
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2021 |
|
|
U.S. GAAP |
|
Adjustments |
|
Adjusted |
Professional fees |
|
$ |
12,937 |
|
$ |
(279 |
) |
(1 |
) |
$ |
12,658 |
Technology and
infrastructure |
|
|
6,890 |
|
|
— |
|
|
|
6,890 |
Rent and occupancy |
|
|
6,338 |
|
|
— |
|
|
|
6,338 |
Travel and related
expenses |
|
|
2,756 |
|
|
— |
|
|
|
2,756 |
General, administrative and
other expenses |
|
|
4,977 |
|
|
— |
|
|
|
4,977 |
Depreciation and
amortization |
|
|
3,408 |
|
|
(1,645 |
) |
(2 |
) |
|
1,763 |
Non-compensation expense |
|
$ |
37,306 |
|
$ |
(1,924 |
) |
|
$ |
35,382 |
|
|
|
|
|
|
|
(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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