NEW YORK, Nov. 13, 2013 /PRNewswire/ -- Silvercrest Asset Management Group Inc. (NASDAQ: SAMG) (the "Company" or "Silvercrest") today reported the results of its operations for the quarter ended September 30, 2013.

Business Update

We have had strong growth in assets under management for the twelve months ended September 30, 2013. In addition we have experienced strong revenue growth in the three month period ending September 30, 2013. At September 30, 2013, assets under management had risen to $14.6 billion from $13.9 billion as of June 30, 2013.  We are very pleased with these results and in conjunction with this, we are announcing that the amount of our initial dividend will be 12 cents per share payable on December 19, 2013 to shareholders of record on December 5, 2013.

Third Quarter 2013 Highlights

• Assets Under Management ("AUM") of $14.6 billion at September 30, 2013
• Revenue of $14.7 million
• U.S. Generally Accepted Accounting Principles ("GAAP") consolidated net income and net income attributable to Silvercrest of $2.2 million and $0.7 million, respectively.
• Basic and diluted net income per share of $0.14
• Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA")¹ of $4.3 million
• Adjusted net income¹ of $1.9 million
• Adjusted basic and diluted earnings per share¹ of $0.16

The table below presents a comparison of certain GAAP and non-GAAP ("adjusted") financial measures and AUM.

 

AUM Increased to $14.6 billion

Silvercrest's AUM increased by $0.7 billion, or 5.0%, to $14.6 billion at September 30, 2013 from $13.9 billion at June 30, 2013.  The increase was attributable to $0.5 billion in market appreciation in addition to net client inflows of $0.2 billion.

Silvercrest's AUM increased by $3.4 billion, or 30.4%, to $14.6 billion at September 30, 2013 from $11.2 billion at December 31, 2012. The increase was attributable to $1.9 billion of net client inflows, related primarily to the Ten-Sixty Asset Management, LLC ("Ten-Sixty") asset acquisition, and $1.5 billion in market appreciation.   

Third Quarter 2013 vs. Third Quarter 2012

Revenue increased by $1.9 million, or 15.5%, to $14.7 million for the three months ended September 30, 2013, from $12.8 million for the three months ended September 30, 2012. This increase was driven primarily by growth in the Company's management and advisory fees as a result of increased AUM.

Total expenses increased by $3.7 million, or 47.7%, to $11.5 million for the three months ended September 30, 2013 from $7.8 million for the three months ended September 30, 2012. This increase was primarily attributable to increases in compensation and benefits expense and general and administrative expenses of $3.6 million and $0.1 million, respectively.  The increase in compensation and benefits expense was primarily attributable to an increase in the accrual for bonuses of $3.2 million as a result of the recognition of partner incentive payments as compensation expense that began in the third quarter of this year subsequent to the completion of our IPO. 

Consolidated net income was $2.2 million.  Net income attributable to Silvercrest was $0.7 million, or $0.14 per basic and diluted share for the three months ended September 30, 2013.   The Company's Adjusted Net Income¹ was $1.9 million, or $0.16 per adjusted basic and diluted share⁴ for the three months ended September 30, 2013.

Adjusted EBITDA¹ was $4.3 million or 29.1% of revenue for the three months ended September 30, 2013 as compared to $3.8 million or 29.7% of revenue for the same period in the prior year.

Nine Months Ended September 30, 2013 vs. Nine Months Ended September 30, 2012

Revenue increased by $5.3 million, or 14.2%, to $42.9 million for the nine months ended September 30, 2013, from $37.6 million for the nine months ended September 30, 2012. This increase was driven primarily by growth in the Company's management and advisory fees as a result of increased AUM.

Total expenses increased by $5.5 million, or 24.2%, to $28.1 million for the nine months ended September 30, 2013 from $22.6 million for the nine months ended September 30, 2012. This increase was primarily attributable to increases in compensation and benefits expense and general and administrative expenses of $5.1 million and $0.4 million, respectively.  The increase in compensation and benefits expense was primarily attributable to an increase in the accrual for bonuses of $3.2 million as a result of the recognition of partner incentive payments as compensation expense that began in the third quarter of this year subsequent to the completion of our IPO.   Also, special non-principal bonuses of $0.8 million that were paid in July 2013 upon completion of Silvercrest's initial public offering, an increase in salaries and benefits expense of $0.6 million and $0.2 million, respectively, as a result of both merit increases and increased headcount, and increased equity-based compensation expense of $0.3 million, primarily due to an increase in the fair value of the Company's previously issued deferred equity units.  The increase in general and administrative expenses was primarily due to an increase in occupancy expense of $0.6 million because in 2012, after reoccupying space at the Company's headquarters, it reversed a lease abandonment liability that was originally recorded in 2009.  This had the effect of reducing occupancy expense in 2012. 

The portion of the results for the nine months ended September 30, 2013 represented by the results for the six months ended June 30, 2013 are those of the Company's accounting predecessor, Silvercrest L.P., and as a result, did not take into consideration changes related to the Company's initial public offering³.  Consolidated net income was $13.2 million.  Net income attributable to Silvercrest was $11.7 million, or $1.34 and $1.31 per basic and diluted share/unit, respectively, for the nine months ended September 30, 2013.  Weighted average shares/units for the nine months ended September 30, 2013 includes weighting for our units outstanding, on a converted basis, as of the completion of our initial public offering in addition to the weighted average Class A shares outstanding for the three months ended September 30, 2013.

Silvercrest's Adjusted Net Income¹ was $5.8 million, or $0.49 and $0.47 per adjusted basic and diluted share⁴, respectively, for the nine months ended September 30, 2013.

Adjusted EBITDA¹ was $12.8 million or 29.9% of revenue for the nine months ended September 30, 2013 as compared to $10.6 million or 28.2% of revenue for the same period in the prior year.

Liquidity and Capital Resources

Cash and cash equivalents were $25.1 million at September 30, 2013, compared to $13.4 million at December 31, 2012. Silvercrest L.P. had notes payable of $9.7 million at September 30, 2013 and $3.3 million at December 31, 2012.    As of September 30, 2013, the principal balance on our revolving credit facility with City National Bank was $5.0 million.  In July 2013, Silvercrest completed its initial public offering of 4,790,684 of its Class A common shares at $11.00 per share (the "IPO").  Silvercrest's stock began trading on June 27, 2013 on NASDAQ under the symbol "SAMG".  The net proceeds from the IPO, which were received on July 2, 2013, were $47.9 million.  In connection with the IPO, the Company used a portion of the net proceeds to purchase 3,540,684 Class B units from partners of Silvercrest L.P. for $35.4 million.  The amounts due to Silvercrest L.P. partners were paid out on July 2, 2013.  Furthermore, on July 12, 2013, Silvercrest sold an additional 718,603 shares of its Class A common stock at $11.00 per share pursuant to the underwriters' exercise in full of the over-allotment option that Silvercrest granted to the underwriters in connection with its IPO.  The net proceeds from this exercise, which were received on July 12, 2013, were $7.4 million.

Total stockholders' equity was $34.3 million at September 30, 2013.  The Company had 5,509,297 million shares of Class A common stock outstanding and 6,461,764 million shares of Class B common stock outstanding at September 30, 2013.

On November 12, 2013, the Company's Board of Directors declared a quarterly dividend of $0.12 per share payable on December 19, 2013 to Class A stockholders of record as of the close of business on December 5, 2013. The dividend marks the first quarterly dividend since Silvercrest's IPO in July 2013.

Non-GAAP Financial Measures

To provide investors with additional insight, promote transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making, the Company supplements its consolidated financial statements presented on a basis consistent with GAAP with Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Earnings Per Share which are non-GAAP financial measures of earnings.  These adjustments, and the non-GAAP financial measures that are derived from them, provide supplemental information to analyze the Company's operations between periods and over time. Investors should consider the Company's non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.

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¹ Adjusted measures are non-GAAP measures and are explained and reconciled to the comparable GAAP measures in Exhibits 2 and 3.

² The Company has computed average AUM by averaging AUM at the beginning of the applicable period and AUM at the end of the applicable period.

³ The Company became the general partner of Silvercrest L.P. on June 26, 2013, but net income of Silvercrest L.P. was allocated to the Company effective July 2013 as allocable net income prior to July 2013 was de minimis.  Accordingly, the portion of the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2013 represented by the six months ended June 30, 2013 does not represent earnings attributable to the Class A stockholders.

⁴Adjusted basic and diluted earnings per share measures for the three and nine months ended September 30, 2013 are based on the number of shares of Class A common stock and Class B common stock outstanding as of September 30, 2013.

Conference Call

The Company will host a conference call on November 14, 2013, at 8:30am (Eastern Time) to discuss these results. Hosting the call will be G. Moffett Cochran, Chief Executive Officer, Richard R. Hough III, President and Chief Operating Officer and Scott A. Gerard, Chief Financial Officer. Listeners may access the call by dialing 1-866-394-9665 or for international listeners the call may be accessed by dialing 1-253-237-1128. An archived replay of the call will be available after the completion of the live call on the Investor Relations page of the Silvercrest website at http://ir.silvercrestgroup.com/.

Forward-Looking Statements And Other Disclosures

Certain statements in this release, and other written or oral statements made by or on behalf of the Company, are "forward-looking statements" within the meaning of the federal securities laws. Statements regarding future events and developments and Silvercrest's future performance, as well as management's current expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of these laws. These forward-looking statements are only predictions based on current expectations and projections about future events. These forward-looking statements are subject to a number of risks and uncertainties, and there are important factors that could cause 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. Among the important factors that could cause actual results, level of activity, performance or achievements to differ materially from those indicated by such forward-looking statements are: fluctuations in quarterly and annual results, incurrence of net losses, adverse effects of management focusing on implementation of a growth strategy, failure to develop and maintain the Silvercrest brand and other factors disclosed in the Company's filings with the Securities and Exchange Commission, including those factors listed under the caption entitled "Risk Factors" in the Company's prospectus dated June 26, 2013, filed with the Securities and Exchange Commission in accordance with Rule 424(b) and the Securities Act of 1933, as amended. The Company undertakes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.  Any discrepancies included in this release between totals and the sums of the amounts listed are due to rounding.

About Silvercrest

Silvercrest was founded in April 2002 as an independent, employee-owned registered investment adviser. With offices in New York, Boston, Charlottesville and Los Angeles, Silvercrest provides traditional and alternative investment advisory and family office services to wealthy families and select institutional investors.

 

 

 

 

 

 

 

 

 

 

 

 

SOURCE Silvercrest Asset Management Group Inc.