Second Quarter Overview
- Total Revenues of $233 million, down 3% from a year ago
- GAAP Pretax Income of $44 million and Adjusted Pretax Income of
$49 million, down 17% and 15%, respectively
- GAAP Diluted EPS of $0.74 and Adjusted EPS of $0.88, both down
17%
Six Months Overview
- Total Revenues of $479 million, up 7% from a year ago
- GAAP Pretax Income of $94 million and Adjusted Pretax Income of
$105 million, down 3% and 2%, respectively
- GAAP Diluted EPS of $1.74 and Adjusted EPS of $1.88, down 9%
and 4%, respectively
Capital Management and Balance Sheet
- Repurchased 1.7 million share equivalents in the first six
months with record open market repurchases of 1.3 million
shares
- Strong balance sheet with $181 million in cash, cash
equivalents and short-term investments
Paul J. Taubman, Chairman and Chief Executive Officer, said,
“Our record six-month revenues reflect the unique depth and breadth
of our franchise and highlight our ability to navigate challenging
market environments. In these uncertain times, clients increasingly
recognize our differentiated insights and expertise as well as our
broad-based capabilities. As before, we remain confident in our
future growth prospects.”
PJT Partners Inc. (the “Company” or “PJT Partners”) (NYSE: PJT)
today announced its financial results for the second quarter and
six months ended June 30, 2022.
Revenues
The following table sets forth revenues for the three and six
months ended June 30, 2022 and 2021:
Three Months Ended
June 30,
Six Months Ended
June 30,
2022
2021
% Change
2022
2021
% Change
(Dollars in Millions)
Revenues
Advisory
$
186.6
$
197.6
(6%)
$
368.3
$
350.2
5%
Placement
49.5
40.3
23%
109.8
90.7
21%
Interest Income & Other
(3.0
)
2.7
N/M
1.3
6.4
(79%)
Total Revenues
$
233.1
$
240.7
(3%)
$
479.5
$
447.4
7%
______________
N/M Not meaningful.
Three Months Ended
Total Revenues decreased 3% to $233 million for second quarter
2022 from $241 million for the prior year quarter.
Advisory Revenues decreased 6% to $187 million for the current
quarter from $198 million for the prior year quarter. The decrease
was driven principally by a decrease in strategic advisory
revenues.
Placement Revenues increased 23% to $49 million for the current
quarter from $40 million for the prior year quarter. The increase
in Placement Revenues was driven by increases in both fund
placement and strategic advisory placement revenues.
Interest Income & Other decreased $5.7 million for the
current quarter compared with the prior year quarter. The decrease
in Interest Income & Other was driven by a reduction in fair
market value on certain equity securities received as part of
transaction compensation.
Six Months Ended
Total Revenues increased 7% to $479 million for the six months
ended June 30, 2022 from $447 million for the same period a year
ago.
Advisory Revenues increased 5% to $368 million for the six
months from $350 million for the same period a year ago. Advisory
Revenues increased principally due to higher restructuring
revenues.
Placement Revenues increased 21% to $110 million for the six
months from $91 million for the same period a year ago. The
increase in Placement Revenues was driven by a significant increase
in fund placement revenues, which was partially offset by a decline
in strategic advisory placement revenues.
Interest Income & Other decreased $5.1 million for the six
months compared with the same period a year ago. The decrease in
Interest Income & Other was driven by a reduction in fair
market value on certain equity securities received as part of
transaction compensation.
Expenses
The following tables set forth information relating to the
Company’s expenses for the three and six months ended June 30, 2022
and 2021:
Three Months Ended June 30,
2022
2021
GAAP
As Adjusted
GAAP
As Adjusted
(Dollars in Millions)
Expenses
Compensation and Benefits
$
150.6
$
146.9
$
153.9
$
150.4
% of Revenues
64.6
%
63.0
%
64.0
%
62.5
%
Non-Compensation
$
38.9
$
37.1
$
34.3
$
32.3
% of Revenues
16.7
%
15.9
%
14.3
%
13.4
%
Total Expenses
$
189.5
$
184.0
$
188.2
$
182.8
% of Revenues
81.3
%
78.9
%
78.2
%
75.9
%
Pretax Income
$
43.7
$
49.1
$
52.4
$
57.9
% of Revenues
18.7
%
21.1
%
21.8
%
24.1
%
Six Months Ended June 30,
2022
2021
GAAP
As Adjusted
GAAP
As Adjusted
(Dollars in Millions)
Expenses
Compensation and Benefits
$
309.8
$
302.1
$
286.7
$
279.6
% of Revenues
64.6
%
63.0
%
64.1
%
62.5
%
Non-Compensation
$
75.8
$
72.1
$
64.3
$
60.4
% of Revenues
15.8
%
15.0
%
14.4
%
13.5
%
Total Expenses
$
385.6
$
374.1
$
351.0
$
340.0
% of Revenues
80.4
%
78.0
%
78.5
%
76.0
%
Pretax Income
$
93.8
$
105.3
$
96.3
$
107.4
% of Revenues
19.6
%
22.0
%
21.5
%
24.0
%
Compensation and Benefits
Expense
Three Months Ended
GAAP Compensation and Benefits Expense was $151 million for
second quarter 2022 compared with $154 million for the prior year
quarter. Adjusted Compensation and Benefits Expense was $147
million for the current quarter compared with $150 million for the
prior year quarter.
Six Months Ended
GAAP Compensation and Benefits Expense was $310 million for the
six months ended June 30, 2022 compared with $287 million for the
same period a year ago. Adjusted Compensation and Benefits Expense
was $302 million for the six months compared with $280 million for
the same period a year ago. The increase in Compensation and
Benefits Expense was principally due to higher revenues during the
current six month period compared with the same period a year
ago.
Non-Compensation Expense
Three Months Ended
GAAP Non-Compensation Expense was $39 million for second quarter
2022 compared with $34 million for the prior year quarter. Adjusted
Non-Compensation Expense was $37 million for the current quarter
compared with $32 million for the prior year quarter.
GAAP and Adjusted Non-Compensation Expense increased during the
current quarter compared with the prior year quarter, primarily
driven by Travel and Related, which increased $5 million due to
increased levels of business travel.
Six Months Ended
GAAP Non-Compensation Expense was $76 million for the six months
ended June 30, 2022 compared with $64 million for the same period a
year ago. Adjusted Non-Compensation Expense was $72 million for the
six months compared with $60 million for the same period a year
ago.
GAAP and Adjusted Non-Compensation Expense increased during the
six months compared with the same period a year ago, primarily
driven by Travel and Related, which increased $9 million due to
increased levels of business travel. Excluding Travel and Related,
GAAP and Adjusted Non-Compensation Expense increased 4% and 5%,
respectively, during the six months compared with the same period a
year ago, driven by an increase in Other Expenses, which was
partially offset by a decrease in Professional Fees.
Provision for Taxes
As of June 30, 2022, PJT Partners Inc. owned 61.8% of PJT
Partners Holdings LP. PJT Partners Inc. is subject to corporate
U.S. federal and state income tax while PJT Partners Holdings LP is
subject to New York City unincorporated business tax and other
entity-level taxes imposed by certain state and foreign
jurisdictions. Please refer to Note 11. “Stockholders’ Equity” in
the “Notes to Consolidated Financial Statements” in “Part II. Item
8. Financial Statements and Supplementary Data” of the Company’s
Annual Report on Form 10-K for the year ended December 31, 2021 for
further information about the corporate ownership structure. The
effective tax rate for GAAP Net Income for the three months ended
June 30, 2022 and 2021 was 19.4% and 18.3%, respectively. The
effective tax rate for GAAP Net Income for the six months ended
June 30, 2022 and 2021 was 15.1% and 10.1%, respectively.
In calculating Adjusted Net Income, If-Converted, the Company
has assumed that all outstanding Class A partnership units in PJT
Partners Holdings LP (“Partnership Units”) (excluding the unvested
partnership units that have yet to satisfy certain market
conditions) have been exchanged into shares of the Company’s Class
A common stock, subjecting all of the Company’s income to
corporate-level tax.
The effective tax rate for Adjusted Net Income, If-Converted for
the six months ended June 30, 2022 was 25.8% compared with 22.3%
for full year 2021. The tax rate increase was primarily due to a
lesser tax benefit received from the delivery of vested shares at
values in excess of the original grant prices.
Capital Management and Balance Sheet
As of June 30, 2022, the Company held cash, cash equivalents and
short-term investments of $181.5 million, and had no funded
debt.
During the second quarter 2022, the Company repurchased 404
thousand shares of Class A common stock in the open market and
repurchased 65 thousand Partnership Units for cash as a result of
Partnership Unit exchanges. During the second quarter 2022, the
Company repurchased 469 thousand share equivalents at an average
price of $67.75 per share. During the six months ended June 30,
2022, the Company repurchased 1.7 million share equivalents at an
average price of $64.84 per share.
As of June 30, 2022, the Company’s remaining repurchase
authorization was $199.2 million.
The Company intends to repurchase 20 thousand Partnership Units
for cash on August 2, 2022 at a price to be determined by the
volume-weighted average price per share of the Company’s Class A
common stock on July 28, 2022.
Dividend
The Board of Directors of PJT Partners Inc. has declared a
quarterly dividend of $0.25 per share of Class A common stock. The
dividend will be paid on September 21, 2022 to Class A common
stockholders of record on September 7, 2022.
Quarterly Investor Call Details
PJT Partners will host a conference call on July 26, 2022 at
8:30 a.m. ET to discuss its second quarter 2022 results. The
conference call can be accessed via the internet at
www.pjtpartners.com or by dialing +1 (800) 289-0717 (U.S. domestic)
or +1 (720) 543-2175 (international), passcode 273235. For those
unable to listen to the live broadcast, a replay will be available
following the call at www.pjtpartners.com or by dialing +1 (888)
203-1112 (U.S. domestic) or +1 (719) 457-0820 (international),
passcode 273235.
About PJT Partners
PJT Partners is a premier global advisory-focused investment
bank. We offer a unique portfolio of advisory services designed to
help our clients achieve their strategic objectives. Our team of
senior professionals delivers a range of strategic advisory,
capital markets advisory, restructuring and special situations and
shareholder advisory services to corporations, financial sponsors,
institutional investors and governments around the world. We also
provide private fund advisory and fundraising services for
alternative investment strategies, including private equity, real
estate, hedge funds and private credit. To learn more about PJT
Partners, please visit our website at www.pjtpartners.com.
Forward-Looking Statements
Certain material presented herein contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”). Forward-looking
statements include certain information concerning future results of
operations, business strategies, acquisitions, financing plans,
competitive position, potential growth opportunities, potential
operating performance improvements, the effects of competition and
the effects of future legislation or regulations. Forward-looking
statements include all statements that are not historical facts and
can be identified by the use of forward-looking terminology such as
the words “believe,” “expect,” “opportunity,” “plan,” “intend,”
“anticipate,” “estimate,” “predict,” “potential,” “continue,”
“may,” “might,” “should,” “could” or the negative of these terms or
similar expressions.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
our current beliefs, expectations, and assumptions regarding the
future of our business, future plans and strategies, projections,
anticipated events and trends, the economy, and other future
conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks, and
changes in circumstances that are difficult to predict, many of
which are outside our control. Our actual results and financial
condition may differ materially from those indicated in the
forward-looking statements. Therefore, you should not place undue
reliance upon any of these forward-looking statements. Important
factors that could cause our actual results and financial condition
to differ materially from those indicated in the forward-looking
statements include, among others, the following: (a) changes in
governmental regulations and policies; (b) cyberattacks, security
vulnerabilities, and internet disruptions, including breaches of
data security and privacy leaks, data loss, and business
interruptions; (c) failure of our computer systems or communication
systems during a catastrophic event, including as a result of the
increased use of remote work environments and virtual platforms;
(d) the impact of catastrophic events, such as COVID-19 or other
pandemics, on the U.S. and the global economy, including business
disruptions, reductions in employment and an increase in business
failures; (e) the impact of catastrophic events, such as COVID-19
or other pandemics, on our employees and our ability to provide
services to our clients and respond to their needs; (f) the failure
of third-party service providers to perform their functions; and
(g) volatility in the political and economic environment.
Any of these factors, as well as such other factors discussed in
the “Risk Factors” section of the Company’s Annual Report on Form
10-K for the year ended December 31, 2021, filed with the United
States Securities and Exchange Commission (“SEC”), as such factors
may be updated from time to time in the Company’s periodic filings
with the SEC, accessible on the SEC’s website at www.sec.gov, could
cause the Company’s results to differ materially from those
expressed in forward-looking statements. There may be other risks
and uncertainties that the Company is unable to predict at this
time or that are not currently expected to have a material adverse
effect on its business. Any such risks could cause the Company’s
results to differ materially from those expressed in
forward-looking statements.
Non-GAAP Financial Measures
The following represent key performance measures that management
uses in making resource allocation and/or compensation decisions.
These measures should not be considered substitutes for, or
superior to, financial measures prepared in accordance with
GAAP.
Management believes the following non-GAAP measures, when
presented together with comparable GAAP measures, are useful to
investors in understanding the Company’s operating results:
Adjusted Pretax Income; Adjusted Net Income; Adjusted Net Income,
If-Converted, in total and on a per-share basis (referred to as
“Adjusted EPS”); Adjusted Compensation and Benefits Expense and
Adjusted Non-Compensation Expense. These non-GAAP measures,
presented and discussed in this earnings release, remove the
significant accounting impact of: (a) transaction-related
compensation expense, including expense related to Partnership
Units with both time-based vesting and market conditions as well as
equity-based and cash awards granted in connection with the
acquisition of CamberView Partners Holdings, LLC (“CamberView”);
(b) intangible asset amortization associated with Blackstone Inc.’s
(“Blackstone”) initial public offering (“IPO”), the acquisition of
PJT Capital LP, and the acquisition of CamberView; and (c) the net
change to the amount the Company has agreed to pay Blackstone
related to the net realized cash benefit from certain
compensation-related tax deductions. Reconciliations of the
non-GAAP measures to their most directly comparable GAAP measures
and further detail regarding the adjustments are provided in the
Appendix.
To help investors understand the effect of the Company’s
ownership structure on its Adjusted Net Income, the Company has
presented Adjusted Net Income, If-Converted. This measure
illustrates the impact of taxes on Adjusted Pretax Income, assuming
all Partnership Units (excluding the unvested Partnership Units
that have yet to satisfy certain market conditions) were exchanged
for shares of the Company’s Class A common stock, resulting in all
of the Company’s income becoming subject to corporate-level tax,
considering both current and deferred income tax effects. This tax
rate excludes a number of adjustments, including the tax benefits
of the adjustments for transaction-related compensation expense and
amortization expense.
Appendix
GAAP Condensed Consolidated Statements of Operations
(unaudited)
Reconciliations of GAAP to Non-GAAP Financial Data
(unaudited)
Summary of Shares Outstanding (unaudited)
Footnotes
PJT Partners Inc.
GAAP Condensed Consolidated
Statements of Operations (unaudited)
(Dollars in Thousands, Except
Share and Per Share Data)
Three Months Ended
June 30,
Six Months Ended
June 30,
2022
2021
2022
2021
Revenues
Advisory
$
186,649
$
197,624
$
368,307
$
350,224
Placement
49,482
40,337
109,833
90,720
Interest Income and Other
(2,990
)
2,720
1,320
6,437
Total Revenues
233,141
240,681
479,460
447,381
Expenses
Compensation and Benefits
150,587
153,924
309,819
286,717
Occupancy and Related
8,658
8,760
17,600
17,219
Travel and Related
6,677
1,697
11,135
2,214
Professional Fees
7,226
8,233
14,277
15,950
Communications and Information
Services
4,241
5,033
8,664
9,207
Depreciation and Amortization
4,094
3,809
8,401
7,643
Other Expenses
7,970
6,779
15,728
12,096
Total Expenses
189,453
188,235
385,624
351,046
Income Before Provision for Taxes
43,688
52,446
93,836
96,335
Provision for Taxes
8,495
9,590
14,175
9,683
Net Income
35,193
42,856
79,661
86,652
Net Income Attributable to Non-Controlling
Interests
16,025
19,711
34,789
36,825
Net Income Attributable to PJT Partners
Inc.
$
19,168
$
23,145
$
44,872
$
49,827
Net Income Per Share of Class A Common
Stock
Basic
$
0.76
$
0.92
$
1.79
$
1.99
Diluted
$
0.74
$
0.89
$
1.74
$
1.91
Weighted-Average Shares of Class A Common
Stock
Outstanding
Basic
25,141,339
25,051,017
25,065,684
25,010,968
Diluted
26,421,087
42,096,035
26,486,899
42,614,627
PJT Partners Inc.
Reconciliations of GAAP to
Non-GAAP Financial Data (unaudited)
(Dollars in Thousands, Except
Share and Per Share Data)
Three Months Ended
June 30,
Six Months Ended
June 30,
2022
2021
2022
2021
GAAP Net Income
$
35,193
$
42,856
$
79,661
$
86,652
Less: GAAP Provision for Taxes
8,495
9,590
14,175
9,683
GAAP Pretax Income
43,688
52,446
93,836
96,335
Adjustments to GAAP Pretax
Income
Transaction-Related Compensation
Expense(1)
3,708
3,497
7,759
7,104
Amortization of Intangible Assets(2)
1,862
1,942
3,790
3,922
Spin-Off-Related Payable Due to
Blackstone(3)
(116
)
24
(65
)
56
Adjusted Pretax Income
49,142
57,909
105,320
107,417
Adjusted Taxes(4)
9,441
10,049
16,064
11,037
Adjusted Net Income
39,701
47,860
89,256
96,380
If-Converted Adjustments
Less: Adjusted Taxes(4)
(9,441
)
(10,049
)
(16,064
)
(11,037
)
Add: If-Converted Taxes(5)
12,685
13,450
27,173
24,439
Adjusted Net Income, If-Converted
$
36,457
$
44,459
$
78,147
$
82,978
GAAP Net Income Per Share of Class A
Common Stock
Basic
$
0.76
$
0.92
$
1.79
$
1.99
Diluted
$
0.74
$
0.89
$
1.74
$
1.91
GAAP Weighted-Average Shares of Class
A
Common Stock Outstanding
Basic
25,141,339
25,051,017
25,065,684
25,010,968
Diluted
26,421,087
42,096,035
26,486,899
42,614,627
Adjusted Net Income, If-Converted Per
Share
$
0.88
$
1.06
$
1.88
$
1.95
Weighted-Average Shares Outstanding,
If-Converted
41,554,991
42,101,220
41,653,293
42,619,812
PJT Partners Inc.
Reconciliations of GAAP to
Non-GAAP Financial Data – continued (unaudited)
(Dollars in Thousands)
Three Months Ended
June 30,
Six Months Ended
June 30,
2022
2021
2022
2021
GAAP Compensation and Benefits Expense
$
150,587
$
153,924
$
309,819
$
286,717
Transaction-Related Compensation
Expense(1)
(3,708
)
(3,497
)
(7,759
)
(7,104
)
Adjusted Compensation and Benefits
Expense
$
146,879
$
150,427
$
302,060
$
279,613
Non-Compensation Expenses
Occupancy and Related
$
8,658
$
8,760
$
17,600
$
17,219
Travel and Related
6,677
1,697
11,135
2,214
Professional Fees
7,226
8,233
14,277
15,950
Communications and Information
Services
4,241
5,033
8,664
9,207
Depreciation and Amortization
4,094
3,809
8,401
7,643
Other Expenses
7,970
6,779
15,728
12,096
GAAP Non-Compensation Expense
38,866
34,311
75,805
64,329
Amortization of Intangible Assets(2)
(1,862
)
(1,942
)
(3,790
)
(3,922
)
Spin-Off-Related Payable Due to
Blackstone(3)
116
(24
)
65
(56
)
Adjusted Non-Compensation Expense
$
37,120
$
32,345
$
72,080
$
60,351
PJT Partners Inc. Summary of Shares Outstanding
(unaudited)
The following table provides a summary of weighted-average
shares outstanding for the three and six months ended June 30, 2022
and 2021 for both basic and diluted shares. The table also provides
a reconciliation to If-Converted Shares Outstanding assuming that
all Partnership Units and unvested PJT Partners Inc. restricted
stock units (“RSUs”) were converted to shares of the Company’s
Class A common stock:
Three Months Ended
June 30,
Six Months Ended
June 30,
2022
2021
2022
2021
Weighted-Average Shares Outstanding -
GAAP
Basic Shares Outstanding, GAAP
25,141,339
25,051,017
25,065,684
25,010,968
Dilutive Impact of Unvested RSUs(6)
1,279,748
1,197,577
1,421,215
1,563,341
Dilutive Impact of Partnership
Units(7)
—
15,847,441
—
16,040,318
Diluted Shares Outstanding, GAAP
26,421,087
42,096,035
26,486,899
42,614,627
Weighted-Average Shares Outstanding -
If-Converted
Basic Shares Outstanding, GAAP
25,141,339
25,051,017
25,065,684
25,010,968
Unvested RSUs(8)
1,282,341
1,202,762
1,423,808
1,568,526
Partnership Units(7)
15,131,311
15,847,441
15,163,801
16,040,318
If-Converted Shares Outstanding
41,554,991
42,101,220
41,653,293
42,619,812
As of June 30,
2022
2021
Fully-Diluted Shares Outstanding(9)
43,994,683
44,485,568
As of June 30, 2022, 1.1 million Partnership Units and 1.5
million RSUs that have yet to satisfy certain market conditions
were excluded from any share count calculations.
Of the total 2.6 million share equivalents subject to market
conditions, 1.3 million require the Company to achieve a
volume-weighted average share price over any consecutive 20-day
trading period (“20-day VWAP”) of $100 prior to February 26, 2027.
The remaining 1.3 million vest ratably upon the Company achieving a
20-day VWAP between $100 and $130 prior to February 26, 2027. The
awards are also subject to a five year vesting requirement, with
20% vesting per annum.
Footnotes
(1)
This adjustment adds back to GAAP Pretax
Income transaction-related compensation expense for Partnership
Units with both time-based vesting and market conditions as well as
equity-based and cash awards granted in connection with the
acquisition of CamberView.
(2)
This adjustment adds back to GAAP Pretax
Income amounts for the amortization of intangible assets that are
associated with Blackstone’s IPO, the acquisition of PJT Capital LP
on October 1, 2015 and the acquisition of CamberView on
October 1, 2018.
(3)
This adjustment adds back to GAAP Pretax
Income the net change to the amount the Company has agreed to pay
Blackstone related to the net realized cash benefit from certain
compensation-related tax deductions. Such amounts are reflected in
Other Expenses in the Condensed Consolidated Statements of
Operations.
(4)
Represents taxes on Adjusted Pretax
Income, considering both current and deferred income tax effects
for the current ownership structure.
(5)
Represents taxes on Adjusted Pretax
Income, assuming all Partnership Units (excluding the unvested
Partnership Units that have yet to satisfy market conditions) were
exchanged for shares of the Company’s Class A common stock,
resulting in all of the Company’s income becoming subject to
corporate-level tax, considering both current and deferred income
tax effects. This tax rate excludes a number of adjustments,
including the tax benefits of the adjustments for
transaction-related compensation expense and amortization
expense.
(6)
Represents the dilutive impact under the
treasury method of unvested, non-participating RSUs that have a
remaining service requirement.
(7)
Represents the number of shares assuming
the conversion of vested Partnership Units and Partnership Units
that achieved certain market conditions.
(8)
Represents the dilutive impact of unvested
RSUs that have a remaining service requirement.
(9)
Assumes all Partnership Units and unvested
participating RSUs have been converted to shares of the Company’s
Class A common stock. As of June 30, 2022,
1.1 million Partnership Units and 1.5 million RSUs that
have yet to satisfy certain market conditions were excluded from
any share count calculations.
Note:
Amounts presented in tables above may not
add or recalculate due to rounding
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220725005847/en/
Media Relations: Jon Keehner Joele Frank, Wilkinson
Brimmer Katcher Tel: +1 212.355.4449 PJT-JF@joelefrank.com
Investor Relations: Sharon Pearson PJT Partners Inc. Tel:
+1 212.364.7120 pearson@pjtpartners.com
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