Perella Weinberg Partners Reports Third Quarter 2022 Results
Perella Weinberg Partners (PWP) reported Q3 2022 revenues of $145.4 million, an 18% decrease from $177.4 million in Q3 2021. For the first nine months, revenues were $448.4 million, down 26% year-over-year. The firm posted an adjusted net income of $25.9 million for Q3 and $69.6 million for the nine months, contrasting with a GAAP net loss of $(12.9) million and $(9.1) million, respectively. PWP's strong balance sheet features $281.7 million in cash and no debt, and a quarterly dividend of $0.07 per share has been declared.
- Adjusted net income of $25.9 million for Q3 2022.
- Strong balance sheet with $281.7 million in cash and no debt.
- Declared quarterly dividend of $0.07 per share.
- Repurchased 8,715,767 shares for $63 million in 2022.
- Q3 2022 revenues decreased by 18% from Q3 2021.
- First nine months of 2022 revenues down 26% from 2021.
- GAAP net loss of $(12.9) million in Q3 2022.
- Third Quarter 2022 Revenues of
$145.4 Million; First Nine Months 2022 Revenues of$448.4 Million - Adjusted Operating Income Margin of
16.9% for the Third Quarter 2022 and15.7% for the First Nine Months 2022; GAAP Operating Loss Margin of (6.1)% for the Third Quarter 2022 and (6.3)% for the First Nine Months 2022 - Adjusted Net Income of
$25.9 Million for the Third Quarter 2022 and$69.6 Million for the First Nine Months 2022; GAAP Net Loss of$(12.9) Million for the Third Quarter 2022 and$(9.1) Million for the First Nine Months 2022 - Adjusted EPS of
$0.26 for the Third Quarter 2022 and$0.66 for the First Nine Months 2022; GAAP Diluted EPS of$(0.19) for both the Third Quarter 2022 and the First Nine Months 2022 - Year-to-Date have Added Eight Advisory Partners; Continue to Add Senior Talent to Support Strategic Growth and Expand Coverage and Expertise
- No Outstanding Indebtedness; Strong Balance Sheet with
$281.7 Million of Cash, Cash Equivalents, and Short-Term Investments - Repurchased 8,715,767 Shares and Share Equivalents in the Nine Months Ended September 30, 2022 with 7,729,666 in Open Market Repurchases
- Exchanged All 7,869,975 Outstanding Warrants for 1,565,948 Shares of Class A Common Stock and De Minimis Cash in Lieu of Partial Shares
- Declared Quarterly Dividend of
$0.07 Per Share
NEW YORK, Nov. 03, 2022 (GLOBE NEWSWIRE) -- 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
For the nine months ended September 30, 2022, revenues were
“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
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
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
GAAP non-compensation expenses were
| 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
GAAP non-compensation expenses were
Provision for Income Taxes
Perella Weinberg Partners currently owns
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
Balance Sheet and Capital Management
As of September 30, 2022, PWP had
The Board of Directors of PWP has declared a quarterly dividend of
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
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
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.com
For 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 Ended September 30, | Nine Months Ended September 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
(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.
FAQ
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