NEW YORK, Oct. 20 /PRNewswire-FirstCall/ -- Greenhill & Co.,
Inc. (NYSE:GHL) today reported record revenues of $66.0 million and
record net income of $17.8 million for the quarter ended September
30, 2005. Diluted earnings per share were $0.58 per share for the
quarter ended September 30, 2005. The Firm's third quarter revenues
compare with revenues of $36.5 million for the third quarter of
2004, which represents an increase of $29.5 million or 81%. On a
year-to-date basis, revenue through September 30, 2005 was $139.4
million, compared to $100.9 million for the comparable period in
2004, representing an increase of $38.5 million or 38%. The Firm's
quarterly revenues can fluctuate materially depending on the number
and size of completed transactions on which it advised, the number
and size of merchant banking gains (or losses) and other factors.
Accordingly, the revenues in any particular quarter may not be
indicative of future results. The Firm's third quarter net income
in 2005 compares with net income of $8.2 million in the third
quarter of 2004, which represents an increase of $9.6 million or
117%. On a year-to-date basis, net income was $34.8 million through
September 30, 2005, compared to pro forma net income of $22.5
million for the comparable period in 2004, which represents an
increase of $12.3 million or 55%. The Firm had actual net income of
$26.5 million for the nine months ended September 30, 2004. We
believe that pro forma results for the nine months ended September
30, 2004, more accurately depict our results as a public company
and will provide the most meaningful basis for comparison among
present, historical and future periods. Prior to our initial public
offering we operated as a limited liability company and our
earnings did not fully reflect either the compensation expense we
pay our managing directors or the taxes that we pay as a
corporation. Additionally, a portion of our earnings attributable
to our European operations was recorded as minority interest prior
to our initial public offering. Our pro forma results increase
compensation expense and tax expense to amounts we would have paid
as a public corporation and eliminate the minority interest
attributable to our European operations. "We are pleased with our
financial advisory results in a M&A market that has continued
to gain momentum. In merchant banking, our robust results
demonstrate the revenue potential of our strategy, begun in early
2004, of investing Firm capital in merchant banking opportunities.
On the cost side, our disciplined approach ensures that the
benefits of this higher advisory and merchant banking revenue flow
to our shareholders," Robert F. Greenhill, Chairman and CEO, said.
Revenues Revenues By Source The following provides a breakdown of
total revenues by source for the three-month and nine-month periods
ended September 30, 2005 and September 30, 2004, respectively:
Three Months Ended September 30, 2005 September 30, 2004 Amount %
of Total Amount % of Total (in millions, unaudited) Financial
Advisory $35.3 53% $31.3 86% Merchant Banking Fund Management &
Other 30.7 47% 5.2 14% Total Revenues $66.0 100% $36.5 100% Nine
Months Ended September 30, 2005 September 30, 2004 Amount % of
Total Amount % of Total (in millions, unaudited) Financial Advisory
$91.1 65% $84.6 84% Merchant Banking Fund Management & Other
48.3 35% 16.3 16% Total Revenues $139.4 100% $100.9 100% Financial
Advisory Revenues Financial Advisory Revenues were $35.3 million in
the third quarter of 2005 compared to $31.3 million in the third
quarter of 2004, which represents an increase of 13%. This increase
was due to a higher number of significant completed assignments
during the third quarter of 2005 compared to the same period in
2004. For the nine months ended September 30, 2005, Financial
Advisory Revenues were $91.1 million compared to $84.6 million for
the comparable period in 2004, representing an increase of 8%.
Completed assignments in the third quarter of 2005 included:
America West Holdings' merger with the US Airways Group; T&F
Informa plc's acquisition of IIR Holdings Limited; the sale of
Scottish Radio Holdings to EMAP plc; the divestiture of various
assets for Texas Genco LLC; and the sale of Telecity plc to 3i plc
and Oak Hill Capital Partners. "The combination of an improving
M&A market, an increased desire by corporate clients for
independent advice and greater recognition of our Firm in corporate
boardrooms across Europe and the U.S. has continued to work in our
favor. During the third quarter, our clients completed some
important transactions, and we also became involved in a number of
significant M&A situations that remain pending," Scott L. Bok
and Simon A. Borrows, Co- Presidents, commented. Merchant Banking
& Interest Income The Firm earned $30.7 million in Merchant
Banking & Interest Income in the third quarter of 2005 compared
to $5.2 million in the third quarter of 2004, representing an
increase of 490%. In the first nine months of 2005, the Firm earned
$48.3 million in Merchant Banking & Interest Income compared to
$16.3 million in the first nine months of 2004, an increase of
196%. These increases are primarily due to higher asset management
fees resulting from greater assets under management, higher
dividend income and distributions of earnings from portfolio
companies, higher realized and unrealized principal investment
gains in the Greenhill Capital Partners (GCP) portfolio, an
increase in the recognized amounts of profit overrides associated
with gains in the GCP portfolio and an increase in interest income.
Included in Merchant Banking & Interest Income for the three
and nine months ended September 30, 2005 is $0.7 million and $0.9
million, respectively, related to the interests in GCP Managing
Partner I, L.P. and GCP Managing Partner II, L.P., general partners
of GCP, held directly by various managing directors of the Firm,
which is also deducted as minority interest. During the third
quarter, two GCP companies completed their initial public offering:
Heartland Payment Systems (NYSE:HPY) and Republic Companies Group,
Inc. (NASDAQ:RUTX). In both cases GCP monetized a portion of its
investment in the offering. One private portfolio company, Exco
Holdings, Inc., announced its agreement to be sold in a transaction
in which GCP would monetize a portion of its investment. With
respect to third quarter revenue, GCP benefited from a significant
increase in the value of its holdings in Hercules Offshore Inc., a
private energy services company which expects to complete its
initial public offering during the fourth quarter, Global Signal
Inc. (NYSE:GSL) and Heartland Payments Systems, Inc. In total, GCP
earned revenue relating to 7 portfolio companies in the third
quarter, partially offset by losses relating to 2 portfolio
companies. GCP gains and losses relating to investments made in
2004 or later have a larger impact on Firm revenue because of the
Firm's increased investment in, and increased participation in
profit overrides relating to, GCP starting in early 2004. In terms
of new investment activity during the third quarter, GCP invested
$18.2 million (12% of which was Firm capital) in 2 portfolio
companies, compared to $13.3 million (12% of which was Firm
capital) invested in 4 portfolio companies in the same period of
2004. In the first nine months of 2005, GCP invested $102.9 million
(11% of which was Firm capital) in 8 portfolio companies, compared
to $30.0 million (7% of which was Firm capital) in 4 companies for
the same period of 2004. For the nine months ended September 30,
2005, the Firm made one other merchant banking investment of $0.3
million. "Greenhill Capital Partners has continued to produce
outstanding results for its limited partners, and the Firm's
participation since 2004 as a significant limited partner has made
this activity an important contributor to Firm revenue and profit.
Our third quarter results particularly benefited from what has been
a very favorable environment for monetizing the value of our
investments in each of our three focus areas of energy, financial
services and telecommunications," Robert H. Niehaus, Chairman of
Greenhill Capital Partners, commented. The following table sets
forth additional information relating to our merchant banking and
interest income: Three Months Nine Months Ended September 30, Ended
September 30, 2005 2004 2005 2004 (in million, unaudited)
Management fees $3.4 $1.1 $7.9 $3.4 Net realized and unrealized
gains on investments in GCP 14.2 2.6 20.8 9.1 Merchant banking
overrides 12.1 1.2 16.9 3.2 Other unrealized investment income 0.2
0.1 0.5 0.2 Interest income 0.8 0.2 2.2 0.4 Merchant banking
revenue $30.7 $5.2 $48.3 $16.3 Expenses Operating Expenses Our
Total Operating Expenses for the third quarter were $37.5 million,
which compares to $23.2 million of Total Operating Expenses for the
third quarter of 2004. This represents an increase in Total
Operating Expenses of $14.3 million or 62%. The pre-tax income
margin was 42% in the third quarter of 2005 compared to 36% for the
third quarter of 2004. For the nine months ended September 30,
2005, Total Operating Expenses were $83.7 million, which compares
to pro forma Total Operating Expenses of $63.0 million for the
comparable period in 2004. The increase of $20.7 million or 33% is
described in more detail below. The pre-tax income margin for the
nine months ended September 30, 2005 was 39% compared to 38% for
the comparable period in 2004 on a pro forma basis. The following
table sets forth information relating to our actual and pro forma
operating expenses, which are reported net of reimbursements: Three
Months Nine Months Ended September 30, Ended September 30, 2005
2004 2005 2004 (in millions, unaudited) Actual Compensation &
Benefits Expense $30.7 $16.3 $62.4 $39.0 % of Revenues 47% 45% 45%
39% Pro Forma Compensation & Benefits Expense(a) 30.7 16.3 62.4
45.3 % of Revenues 47% 45% 45% 45% Non-Compensation Expense: Other
Operating Expenses 6.2 6.0 19.4 15.2 Depreciation &
Amortization 0.6 0.9 1.9 2.5 Total Non-Compensation Expense 6.8 6.9
21.3 17.7 % of Revenues 10% 19% 15% 18% Total Actual Operating
Expense 37.5 23.2 83.7 56.7 % of Revenues 57% 64% 60% 56% Total Pro
Forma Operating Expense (a) 37.5 23.2 83.7 63.0 % of Revenues 57%
64% 60% 62% Minority Interest in Net Income of Subsidiary 0.7 - 0.9
6.5 Total Actual Income Before Tax 27.8 13.3 54.8 37.7 Actual
Pre-tax Income Margin 42% 36% 39% 37% Total Pro Forma Income Before
Tax (a) 27.8 13.3 54.8 37.9 Pro Forma Pre-tax Income Margin (a) 42%
36% 39% 38% (a) We have operated as a public company since our
initial public offering in May 2004, and the amounts for the three
months and nine months ended September 30, 2005 and three month
ended September 30, 2004 reflect actual expenses; the amounts for
the nine months ended September 30, 2004 reflect pro forma
expenses. Compensation and Benefits Our Compensation and Benefits
Expense in the third quarter of 2005 was $30.7 million, which
reflects a 47% ratio of compensation to revenues. This amount
compares to $16.3 million in the third quarter of 2004, which
reflected a 45% ratio of compensation to revenues. The increase of
$14.4 million or 88% is due to the higher level of revenues in the
third quarter of 2005 compared to the third quarter of 2004 and a
decision to increase the compensation ratio in the third quarter of
2005 to return the year-to-date compensation ratio to a level
consistent with its level in 2004. For the nine months ended
September 30, 2005, our Compensation and Benefits Expense was $62.4
million, which reflects a 45% compensation ratio for the
year-to-date period. This compares to $45.3 million of pro forma
Compensation and Benefits Expense for the nine months ended
September 30, 2004. The increase of $17.1 million or 38% is due to
the higher level of revenues in the first nine months of 2005
compared to the comparable period in 2004. The pro forma
compensation ratio was 45% for the nine months ended September 30,
2004. The principal component of our operating expenses is
compensation and benefits expense. Because we were a limited
liability company prior to our initial public offering in May 2004,
payments for services rendered by our managing directors generally
were accounted for as distributions of members' capital or minority
interest expense attributable to our European operations rather
than as compensation expense. As a result, our pre-IPO compensation
and benefits expense did not reflect a large portion of payments
for services rendered by our managing directors and understated the
operating costs that we expect we would have incurred as a public
company. As a corporation, we include all payments for services
rendered by our managing directors in compensation and benefits
expense. For the nine months ended September 30, 2004, actual
Compensation and Benefits Expense was $39.0 million.
Non-Compensation Expense Our non-compensation expenses were $6.8
million in the third quarter of 2005, which compared to $6.9
million in the third quarter of 2004, representing a decrease of
1%. The decrease is related principally to lower recruiting costs
($0.3 million), the recovery of receivables previously written off
($0.4 million), and lower depreciation costs ($0.3 million), offset
in part by an increase in occupancy costs ($0.4 million) for
additional office space in New York and Dallas, increased
professional fees ($0.3 million), primarily related to Sarbanes
Oxley compliance, and increased information services ($0.2 million)
as a result of additional personnel and business development
activity. For the first nine months of 2005, our non-compensation
expenses were $21.3 million, which compared to $17.7 million in the
first nine months of 2004, representing an increase of 20%. The
increase is related principally to the net write-off of
uncollectible accounts ($0.6 million), a third-party fee related to
the fundraising for Greenhill Capital Partners II ($1.0 million),
greater travel expenses ($0.6 million) and information services
($0.6 million) as a result of additional personnel and business
development activity, increase in occupancy costs ($0.5 million)
for additional office space in New York and Dallas, and increases
in expenses associated with operating as a public entity ($1.0
million), offset in part by lower depreciation expense ($0.6
million) and recruiting costs ($0.4 million). Non-compensation
expenses as a percentage of revenue in the three months and nine
months ended September 30, 2005 were 10% and 15%, respectively.
This compares to 19% and 18% for the three months and nine months
ended September 30, 2004, respectively. The decrease in these
expenses as a percentage of revenue is principally related to
higher level of revenue offset in part by the higher level of
expenses for the nine months ended September 30, 2005. The Firm's
non-compensation expense as a percentage of revenue can vary as a
result of a variety of factors including fluctuation in quarterly
revenue amounts, the amount of recruiting and business development
activity, the amount of reimbursement of engagement-related
expenses by clients, currency movements and other factors.
Accordingly, the non-compensation expense as a percentage of
revenue in any particular quarter may not be indicative of the
non-compensation expense as a percentage of revenue in future
periods. Provision for Income Taxes The Provision for Taxes in the
third quarter of 2005 was $10.0 million, which reflects a 36%
effective tax rate. This compares to a Provision for Taxes in the
third quarter of 2004 of $5.1 million, which reflects a 38%
effective tax rate for the period. This represents an increase of
$4.9 million, which is primarily attributable to the higher level
of pre-tax income partially offset by a lower effective tax rate
due to a higher proportion of investment income and foreign
business income, which generally benefit from relatively lower tax
rates than U.S.-based advisory income. For the nine months ended
September 30, 2005, the Provision for Taxes was $20.0 million
compared to a pro forma Provision for Taxes of $15.4 million for
the nine months ended September 30, 2004, assuming a blended tax
rate of 41% for the period. This represents an increase of $4.6
million, primarily attributable to a higher level of pre-tax income
partially offset by the lower effective tax rate as compared to the
same period in the prior year. The decrease in the effective rate
for the nine months ended September 30, 2005 results from a higher
proportion of investment income and foreign business income, which
generally benefit from relatively lower tax rates than U.S. based
advisory income. As a limited liability company, Greenhill was not
subject to U.S. federal or state income taxes and its U.K.
controlled affiliate Greenhill & Co. International LLP, as a
limited liability partnership, was generally not subject to U.K.
income taxes. Since completion of our initial public offering in
May 2004, we have been subject to federal, foreign and state
corporate income taxes. Actual taxes for the nine months ended
September 30, 2004 were $11.2 million. The effective tax rate can
fluctuate as a result of variations in the relative amounts of
advisory and merchant banking income earned in the tax
jurisdictions in which the Firm operates and invests. Accordingly,
the effective tax rate in any particular quarter may not be
indicative of the effective tax rate in future periods. Liquidity
and Capital Resources As of September 30, 2005, our cash totaled
$88.5 million, and we had no debt. Our stockholders' equity as of
September 30, 2005 was $123.2 million. We had total commitments
(not reflected on our balance sheet) relating to future principal
investments in merchant banking funds of $95.7 million as of
September 30, 2005. These commitments are expected to be drawn on
from time to time over a period of up to five years from the
relevant commitment dates. The Firm repurchased 171,188 shares of
its common stock at an average price of $40.77 in open market
transactions during the third quarter of 2005. In addition, the
Firm purchased 800,000 shares at a price of $26.22 per share from a
former employee pursuant to a previously announced agreement. The
Board of Directors of Greenhill & Co., Inc. has previously
authorized the repurchase in open market transactions of up to
$25.0 million of common stock, of which $18.0 million of repurchase
authority remains. Dividend The Board of Directors of Greenhill
& Co., Inc. has declared a dividend of $0.12 per share to be
paid on December 14, 2005 to common stockholders of record on
November 23, 2005. Greenhill & Co., Inc. is an independent
investment banking firm that (i) provides financial advice on
significant mergers, acquisitions, restructurings and similar
corporate finance matters and (ii) manages merchant banking funds
and commits capital to those funds. Greenhill acts for clients
located throughout the world from offices in New York, London
Frankfurt and Dallas. Cautionary Note Regarding Forward-Looking
Statements The preceding discussion should be read in conjunction
with our condensed consolidated financial statements and the
related notes that appear below. We have made statements in this
discussion that are forward-looking statements. In some cases, you
can identify these statements by forward-looking words such as
"may", "might", "will", "should", "expect", "plan", "anticipate",
"believe", "estimate", "predict", "potential" or "continue", the
negative of these terms and other comparable terminology. These
forward-looking statements, which are subject to risks,
uncertainties and assumptions about us, may include projections of
our future financial performance, based on our growth strategies
and anticipated trends in our business. These statements are only
predictions based on our current expectations and projections about
future events. There are important factors that could cause our
actual results, level of activity, performance or achievements to
differ materially from the results, level of activity, performance
or achievements expressed or implied by the forward-looking
statements. These factors include, but are not limited to, those
discussed in our Registration Statement on Form S-1 (Commission
file number 333-124082) under the caption "Risk Factors". Greenhill
& Co., Inc. and Subsidiaries Condensed Consolidated Statements
of Income (Unaudited) For the Three Months For the Nine Months
Ended September 30, Ended September 30, 2005 2004 2005 2004
Revenues Financial advisory fees $35,299,486 $31,275,180
$91,086,984 $84,614,422 Merchant banking revenue 29,911,754
4,994,660 46,174,382 15,881,146 Interest income 820,434 228,706
2,160,453 421,647 Total Revenues 66,031,674 36,498,546 139,421,819
100,917,215 Expenses Employee compensation and benefits 30,707,309
16,278,351 62,360,470 39,033,719 Occupancy and equipment rental
1,801,945 1,389,600 4,765,690 4,221,472 Depreciation and
amortization 622,941 969,268 1,897,102 2,500,818 Information
services 894,643 696,691 2,702,949 2,121,992 Professional fees
895,362 609,970 3,171,177 1,457,749 Travel related expenses
1,215,157 1,356,093 3,619,541 3,052,261 Other operating expenses
1,358,434 1,916,233 5,140,011 4,360,151 Total Expenses 37,495,791
23,216,206 83,656,940 56,748,162 Income before Tax and Minority
Interest 28,535,883 13,282,340 55,764,879 44,169,053 Minority
interest in net income of subsidiary 696,409 - 925,384 6,487,050
Income before Tax 27,839,474 13,282,340 54,839,495 37,682,003
Provision for taxes 10,022,201 5,052,099 20,017,218 11,163,050 Net
Income $17,817,273 $8,230,241 $34,822,277 $26,518,953 Average
common shares outstanding: Basic 30,628,431 30,829,458 30,843,199
28,050,657 Diluted 30,765,357 30,851,693 30,923,528 28,067,517
Earnings per share Basic $0.58 $0.27 $1.13 $0.95 Diluted $0.58
$0.27 $1.13 $0.94 Pro forma average shares outstanding (see notes a
and e): Basic 30,628,431 30,829,458 30,843,199 28,050,657 Diluted
30,765,357 30,851,693 30,923,528 28,067,517 Pro forma earnings per
share (see note a): Basic $0.58 $0.27 $1.13 $0.80 Diluted $0.58
$0.27 $1.13 $0.80 See notes to Pro Forma Condensed Consolidated
Statements of Income. Greenhill & Co., Inc. and Subsidiaries
Pro Forma Condensed Consolidated Statements of Income (Unaudited)
For the Nine Months Ended September 30, 2005 2004 (a) (actual) (pro
forma) (in thousands) Total Revenues $139,422 $100,917 Compensation
and benefits (b) 62,360 45,267 Other expenses 21,297 17,714 Total
expenses 83,657 62,981 Income before tax and minority interest
55,765 37,936 Minority interest in net income of subsidiary (c) 926
- Income before tax 54,839 37,936 Tax expense (d) 20,017 15,406 Net
income $34,822 $22,530 Actual and pro forma average common shares
outstanding: (e) Basic 30,843 28,051 Diluted 30,924 28,068 Actual
and pro forma earnings per share: Basic $1.13 $0.80 Diluted $1.13
$0.80 See notes to Pro Forma Condensed Consolidated Statements of
Income. Notes to the Pro Forma Condensed Consolidated Statements of
Income (a) Prior to the initial public offering we were a limited
liability company and our historical earnings did not fully reflect
the compensation expense we pay our managing directors or taxes
that we pay as a public corporation. Additionally, a portion of our
earnings attributable to our European operations was recorded as
minority interest. We believe that the pro forma results, which
increase compensation expense and tax expense to amounts we expect
we would have paid as a corporation and eliminate the minority
interest of our European operations, more accurately depict our
results as a public company. During the three and nine months ended
September 30, 2005 and the three months ended September 30, 2004,
we operated as a public company for the entire period, and the
amounts presented above reflect actual results of operations for
that period. The amounts for the nine months ended September 30,
2004 include the pro forma results of operations as if the Firm
operated as a public company during the period January 1, 2004 to
the date of our public offering on May 11, 2004 combined with the
actual results of operations for the period after the public
offering. (b) Because the Firm had been a limited liability company
prior to the initial public offering, payments for services
rendered by managing directors generally had been accounted for as
distributions of members' capital rather than as compensation
expense. As a corporation, the Firm includes all payments for
services rendered by managing directors in compensation and
benefits expense. Compensation and benefits expense, reflecting the
Firm's conversion to corporate form, consists of cash compensation
and non-cash compensation related to the restricted stock units
awarded to employees at the time of the Firm's initial public
offering consummated on May 11, 2004, as well as any additional
restricted stock units awarded in the future. It is the Firm's
policy that total compensation and benefits, including that payable
to the managing directors, will not exceed 50% of total revenues
each year (although the Firm retains the ability to change this
policy in the future). An adjustment to increase compensation
expense for the nine months ended September 30, 2004 of $6.2
million has been made to record total compensation and benefits
expense at 45% of total revenues, which is consistent with the
compensation expense ratio we used as a public company in 2004. (c)
For the nine months ended September 30, 2004, historical income
before tax has been increased by $6.5 million to reflect the
elimination on a pro forma basis of minority interests held by the
European managing directors in Greenhill & Co. International.
(d) As a limited liability company, the Firm was generally not
subject to income taxes except in foreign and local jurisdictions.
For the nine months ended September 30, 2004, the provision for
taxes was increased by $4.2 million on a pro forma basis to adjust
the Firm's effective tax rate to 42%, reflecting assumed federal,
foreign, state and local income taxes as if we were a corporation
on January 1, 2004. (e) For the nine months ended September 30,
2004 the actual and pro forma numbers of common shares outstanding
give effect to (i) 25,000,000 shares issued in connection with the
reorganization of the Firm in conjunction with the initial public
offering as if it occurred on January 1, 2004 and (ii) the weighted
average of the 5,750,000 shares and the common stock equivalents
issued in conjunction with and subsequent to the initial public
offering. Contact: John D. Liu, Chief Financial Officer Greenhill
& Co., Inc. (212) 389-1800 DATASOURCE: Greenhill & Co.,
Inc. CONTACT: John D. Liu, Chief Financial Officer of Greenhill
& Co., Inc., +1-212-389-1800
Copyright
Republic Companies (NASDAQ:RUTX)
Gráfico Histórico do Ativo
De Mai 2024 até Jun 2024
Republic Companies (NASDAQ:RUTX)
Gráfico Histórico do Ativo
De Jun 2023 até Jun 2024