Company Quick10K Filing
Quick10K
Focus Financial Partners
10-Q 2019-09-30 Quarter: 2019-09-30
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
8-K 2019-11-20 Regulation FD, Exhibits
8-K 2019-11-07 Earnings, Regulation FD, Exhibits
8-K 2019-08-08 Earnings, Regulation FD, Exhibits
8-K 2019-07-26 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2019-06-05 Regulation FD, Exhibits
8-K 2019-05-28 Shareholder Vote
8-K 2019-05-09 Earnings, Regulation FD, Exhibits
8-K 2019-03-06 Regulation FD, Exhibits
8-K 2019-02-27 Regulation FD
8-K 2019-02-22 Officers, Regulation FD, Exhibits
8-K 2019-02-21 Earnings, Regulation FD, Exhibits
8-K 2019-01-16 Regulation FD
8-K 2018-11-30 M&A, Sale of Shares, Exhibits
8-K 2018-11-12 Earnings, Exhibits
8-K 2018-09-27 Enter Agreement, Sale of Shares
8-K 2018-09-27 Regulation FD, Exhibits
8-K 2018-08-28 Earnings, Regulation FD, Exhibits
8-K 2018-07-25 Enter Agreement, Off-BS Arrangement, Sale of Shares, Shareholder Rights, Officers, Amend Bylaw, Exhibits
EV Eaton Vance 4,748
LAZ Lazard 4,377
AMG Affiliated Managers Group 3,841
HLI Houlihan Lokey 2,896
ARES Ares Management 2,874
CG Carlyle Group 2,499
WHG Westwood Holdings 264
SAMG Silvercrest Asset Management Group 109
MDLY Medley Management 97
GROW US Global Investors 31
FOCS 2019-09-30
Part I: Financial Information
Item 1. Financial Statements
Item 2. Management’S Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part Ii: Other Information
Item 1. Legal Proceedings
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
EX-31.1 focs-20190930ex311686748.htm
EX-31.2 focs-20190930ex3121c09f3.htm
EX-32.1 focs-20190930ex3219b4680.htm

Focus Financial Partners Earnings 2019-09-30

FOCS 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 focs-20190930x10q.htm 10-Q focs_Current_Folio_10Q

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-Q


(Mark One)

     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2019

OR

    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 001-38604


Focus Financial Partners Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

47‑4780811

(State or Other Jurisdiction
of Incorporation or Organization)

(I.R.S. Employer
Identification No.)

 

 

875 Third Avenue, 28th Floor

New York, NY

10022

(Address of Principal Executive Offices)

(Zip Code)

 

(646) 519‑2456

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

Class A common stock, par value
$0.01 per share

 

FOCS

 

Nasdaq Global Select Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒   

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes No 

As of November 5, 2019, the registrant had 47,255,907 shares of Class A common stock and 22,198,665 shares of Class B common stock outstanding.

 

 

 

 

 

FOCUS FINANCIAL PARTNERS INC.

INDEX TO FORM 10‑Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2019

 

 

    

Page No.

PART I FINANCIAL INFORMATION 

 

 

Item 1. 

Financial Statements

 

1

 

Unaudited condensed consolidated balance sheets

 

2

 

Unaudited condensed consolidated statements of operations

 

3

 

Unaudited condensed consolidated statements of comprehensive income (loss)

 

4

 

Unaudited condensed consolidated statements of cash flows

 

5

 

Unaudited condensed consolidated statements of changes in members’ deficit/shareholders’ equity

 

6

 

Notes to unaudited condensed consolidated financial statements

 

8

Item 2. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

24

Item 3. 

Quantitative and Qualitative Disclosures about Market Risk

 

44

Item 4. 

Controls and Procedures

 

44

PART II OTHER INFORMATION 

 

 

Item 1. 

Legal Proceedings

 

44

Item 2. 

Unregistered Sales of Equity Securities and Use of Proceeds

 

45

Item 6. 

Exhibits

 

45

SIGNATURES 

 

46

 

 

 

 

 

PART I: FINANCIAL INFORMATION

Item 1.  Financial Statements

Financial Statements Introductory Note

The unaudited condensed consolidated financial statements and other disclosures contained in this report include those of Focus Financial Partners Inc. (“we,” “us,” “our,” “Focus Inc.,” the “Registrant” or the “Company”), which is the registrant, and those of Focus Financial Partners, LLC, a Delaware limited liability company (“Focus LLC”), which became the principal operating subsidiary of the Registrant in a series of reorganization transactions that were completed on July 30, 2018 (the “Reorganization Transactions”) in connection with our initial public offering (“IPO”). For more information regarding the transactions described above, see Note 3 to the unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10‑Q.

As a result of the IPO and Reorganization Transactions, we became the managing member of Focus LLC. The unaudited condensed consolidated financial statements reflect the historical results of operations and financial position of the Company, including consolidation of its investment in Focus LLC, since July 30, 2018. Prior to July 30, 2018, the closing date of the IPO, the unaudited condensed consolidated financial statements represent the financial statements of Focus LLC. The unaudited condensed consolidated financial statements do not reflect what the financial position, results of operations or cash flows of the Company or Focus LLC would have been had these companies been stand‑alone public companies for the periods presented. Specifically, the historical financial statements of Focus LLC do not give effect to the following matters:

·

IPO and Reorganization Transactions;

·

U.S. corporate federal income taxes; and

·

Non‑controlling interest held by other members of Focus LLC after the IPO and Reorganization Transactions.

 

 

 

FOCUS FINANCIAL PARTNERS INC.

Unaudited condensed consolidated balance sheets

(In thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

    

December 31, 

    

September 30, 

 

 

2018

 

2019

ASSETS

 

 

  

 

 

  

Cash and cash equivalents

 

$

33,213

 

$

51,263

Accounts receivable less allowances of $576 at 2018 and $800 at 2019

 

 

98,596

 

 

130,384

Prepaid expenses and other assets

 

 

76,150

 

 

79,064

Fixed assets—net

 

 

24,780

 

 

40,227

Operating lease assets

 

 

 —

 

 

167,866

Debt financing costs—net

 

 

12,340

 

 

10,319

Deferred tax assets—net

 

 

70,009

 

 

77,919

Goodwill

 

 

860,495

 

 

1,073,283

Other intangible assets—net

 

 

762,195

 

 

1,014,303

TOTAL ASSETS

 

$

1,937,778

 

$

2,644,628

LIABILITIES AND EQUITY

 

 

 

 

 

  

LIABILITIES

 

 

 

 

 

  

Accounts payable

 

$

8,935

 

$

10,456

Accrued expenses

 

 

36,252

 

 

61,337

Due to affiliates

 

 

39,621

 

 

40,151

Deferred revenue

 

 

6,215

 

 

8,653

Other liabilities

 

 

158,497

 

 

204,173

Operating lease liabilities

 

 

 

 

183,491

Borrowings under credit facilities (stated value of $838,985 and $1,282,079 at December 31, 2018 and September 30, 2019, respectively)

 

 

836,582

 

 

1,275,551

Tax receivable agreements obligations

 

 

39,156

 

 

47,242

TOTAL LIABILITIES

 

 

1,125,258

 

 

1,831,054

COMMITMENTS AND CONTINGENCIES (Note 13)

 

 

 

 

 

  

EQUITY

 

 

 

 

 

 

Class A common stock, par value $0.01, 500,000,000 shares authorized; 46,265,903 and 47,255,907 shares issued and outstanding at December 31, 2018 and September 30, 2019, respectively

 

 

462

 

 

472

Class B common stock, par value $0.01, 500,000,000 shares authorized; 22,823,272 and 22,198,665 shares issued and outstanding at December 31, 2018 and September 30, 2019, respectively

 

 

228

 

 

222

Additional paid-in capital

 

 

471,386

 

 

502,341

Accumulated deficit

 

 

(590)

 

 

(1,463)

Accumulated other comprehensive loss

 

 

(1,824)

 

 

(3,576)

Total shareholders' equity

 

 

469,662

 

 

497,996

Non-controlling interests

 

 

342,858

 

 

315,578

Total equity

 

 

812,520

 

 

813,574

TOTAL LIABILITIES AND EQUITY

 

$

1,937,778

 

$

2,644,628

 

See notes to unaudited condensed consolidated financial statements

2

FOCUS FINANCIAL PARTNERS INC.

Unaudited condensed consolidated statements of operations

(In thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

For the nine months ended

 

 

 

September 30, 

 

September 30, 

 

 

    

2018

    

2019

    

2018

    

2019

 

REVENUES:

 

 

  

 

 

  

 

 

  

 

 

  

 

Wealth management fees

 

$

220,235

 

$

299,348

 

$

620,886

 

$

825,728

 

Other

 

 

15,466

 

 

17,293

 

 

42,479

 

 

52,382

 

Total revenues

 

 

235,701

 

 

316,641

 

 

663,365

 

 

878,110

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and related expenses

 

 

107,382

 

 

111,829

 

 

262,004

 

 

318,808

 

Management fees

 

 

62,487

 

 

81,112

 

 

169,346

 

 

217,370

 

Selling, general and administrative

 

 

43,832

 

 

58,665

 

 

121,612

 

 

170,658

 

Management contract buyout

 

 

 —

 

 

 —

 

 

 —

 

 

1,428

 

Intangible amortization

 

 

23,616

 

 

34,898

 

 

65,400

 

 

94,860

 

Non-cash changes in fair value of estimated contingent consideration

 

 

10,564

 

 

14,435

 

 

28,879

 

 

25,696

 

Depreciation and other amortization

 

 

2,077

 

 

2,797

 

 

6,121

 

 

7,535

 

Total operating expenses

 

 

249,958

 

 

303,736

 

 

653,362

 

 

836,355

 

INCOME (LOSS) FROM OPERATIONS

 

 

(14,257)

 

 

12,905

 

 

10,003

 

 

41,755

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

432

 

 

291

 

 

809

 

 

827

 

Interest expense

 

 

(12,996)

 

 

(15,852)

 

 

(45,480)

 

 

(43,135)

 

Amortization of debt financing costs

 

 

(828)

 

 

(919)

 

 

(2,716)

 

 

(2,483)

 

Gain on sale of investment

 

 

 —

 

 

 —

 

 

5,509

 

 

 —

 

Loss on extinguishment of borrowings

 

 

(7,060)

 

 

 —

 

 

(21,071)

 

 

 —

 

Other (expense) income—net

 

 

(525)

 

 

 9

 

 

(229)

 

 

(695)

 

Income from equity method investments

 

 

55

 

 

53

 

 

208

 

 

696

 

Total other expense—net

 

 

(20,922)

 

 

(16,418)

 

 

(62,970)

 

 

(44,790)

 

LOSS BEFORE INCOME TAX

 

 

(35,179)

 

 

(3,513)

 

 

(52,967)

 

 

(3,035)

 

INCOME TAX EXPENSE (BENEFIT)

 

 

3,745

 

 

(3,905)

 

 

5,667

 

 

(3,701)

 

NET INCOME (LOSS)

 

 

(38,924)

 

 

392

 

 

(58,634)

 

 

666

 

Non-controlling interest

 

 

28,726

 

 

881

 

 

48,436

 

 

(1,539)

 

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS

 

$

(10,198)

 

$

1,273

 

$

(10,198)

 

$

(873)

 

Income (loss) per share of Class A common stock:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.24)

 

$

0.03

 

$

(0.24)

 

$

(0.02)

 

Diluted

 

$

(0.24)

 

$

0.03

 

$

(0.24)

 

$

(0.02)

 

Weighted average shares of Class A common stock outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

42,351,043

 

 

47,044,507

 

 

42,351,043

 

 

46,653,820

 

Diluted

 

 

42,351,043

 

 

47,058,613

 

 

42,351,043

 

 

46,653,820

 

 

See notes to unaudited condensed consolidated financial statements

3

FOCUS FINANCIAL PARTNERS INC.

Unaudited condensed consolidated statements of comprehensive income (loss)

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

For the nine months ended

 

 

 

September 30, 

 

September 30, 

 

 

    

2018

    

2019

    

2018

    

2019

 

Net income (loss)

 

$

(38,924)

 

$

392

 

$

(58,634)

 

$

666

 

Other comprehensive loss, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(318)

 

 

(2,464)

 

 

(1,824)

 

 

(2,797)

 

Comprehensive loss

 

 

(39,242)

 

 

(2,072)

 

 

(60,458)

 

 

(2,131)

 

Less: Comprehensive (income) loss attributable to noncontrolling interest

 

 

28,799

 

 

1,769

 

 

50,015

 

 

(494)

 

Comprehensive loss attributable to common shareholders

 

$

(10,443)

 

$

(303)

 

$

(10,443)

 

$

(2,625)

 

 

See notes to unaudited condensed consolidated financial statements

4

FOCUS FINANCIAL PARTNERS INC.

Unaudited condensed consolidated statements of cash flows

(In thousands)

 

 

 

 

 

 

 

 

 

 

For the nine months ended

 

 

September 30, 

 

    

2018

    

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

  

 

 

  

Net income (loss)

 

$

(58,634)

 

$

666

Adjustments to reconcile net income (loss) to net cash provided by operating activities—net of effect of acquisitions:

 

 

  

 

 

  

Intangible amortization

 

 

65,400

 

 

94,860

Depreciation and other amortization

 

 

6,121

 

 

7,535

Amortization of debt financing costs

 

 

2,716

 

 

2,483

Non-cash equity compensation expense

 

 

31,612

 

 

13,375

Non-cash changes in fair value of estimated contingent consideration

 

 

28,879

 

 

25,696

Income from equity method investments

 

 

(208)

 

 

(696)

Distributions received from equity method investments

 

 

739

 

 

668

Other non-cash items

 

 

787

 

 

117

Loss on extinguishment of borrowings

 

 

19,001

 

 

 —

Changes in cash resulting from changes in operating assets and liabilities:

 

 

  

 

 

  

Accounts receivable

 

 

(30,172)

 

 

(30,367)

Prepaid expenses and other assets

 

 

(6,035)

 

 

(4,820)

Accounts payable

 

 

1,219

 

 

1,240

Accrued expenses

 

 

21,382

 

 

39,968

Due to affiliates

 

 

7,503

 

 

365

Other liabilities

 

 

(6,315)

 

 

(21,964)

Deferred revenue

 

 

2,223

 

 

794

Net cash provided by operating activities

 

 

86,218

 

 

129,920

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

  

 

 

  

Cash paid for acquisitions and contingent consideration—net of cash acquired

 

 

(296,821)

 

 

(494,336)

Purchase of fixed assets

 

 

(6,326)

 

 

(20,758)

Investment and other

 

 

(24,300)

 

 

 —

Net cash used in investing activities

 

 

(327,447)

 

 

(515,094)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

  

 

 

  

Borrowings under credit facilities

 

 

250,000

 

 

939,125

Repayments of borrowings under credit facilities

 

 

(449,019)

 

 

(496,906)

Proceeds from issuance of common stock, net

 

 

565,160

 

 

 —

Payments in connection with unit redemption, net

 

 

(61,539)

 

 

 —

Contingent consideration paid

 

 

(10,286)

 

 

(20,514)

Payments of debt financing costs

 

 

(4,612)

 

 

(3,743)

Proceeds from exercise of stock options

 

 

 —

 

 

796

Payments on finance lease obligations

 

 

(147)

 

 

(138)

Distributions for unitholders

 

 

(1,308)

 

 

(15,225)

Net cash provided by financing activities

 

 

288,249

 

 

403,395

EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS

 

 

(97)

 

 

(171)

CHANGE IN CASH AND CASH EQUIVALENTS

 

 

46,923

 

 

18,050

CASH AND CASH EQUIVALENTS:

 

 

  

 

 

  

Beginning of period

 

 

51,455

 

 

33,213

End of period

 

$

98,378

 

$

51,263

 

See Note 14 for supplemental cash flow disclosure

See notes to unaudited condensed consolidated financial statements

 

 

5

FOCUS FINANCIAL PARTNERS INC.

Unaudited condensed consolidated statements of changes in members’ deficit/shareholders’ equity

Three months ended September 30, 2018 and 2019

(In thousands, except share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

Total Members’

 

 

 

 

 

 

Class A

 

Class B

 

Additional

 

 

 

 

Other

 

 

 

Deficit/

 

 

 

 

 

 

Common Stock

 

Common Stock

 

Paid - In

 

Accumulated

 

Comprehensive

 

Common

 

Shareholders’

 

Non - controlling

 

 

 

    

Shares

    

Amount

    

Shares

    

Amount

    

 Capital

    

Deficit

    

Loss

    

Units

    

Equity

    

Interest

    

Total  Equity

Balance at July 1, 2018

 

 —

 

$

 —

 

 

 —

 

$

 —

 

$

38,286

 

$

(825,230)

 

$

(9,775)

 

$

37,176

 

$

(759,543)

 

$

 —

 

$

(759,543)

Net loss

 

 —

 

 —

 —

 

 —

 —

 

 —

 —

 

 

 —

 

 

(28,111)

 

 

 —

 

 

 —

 

 

(28,111)

 

 

 —

 

 

(28,111)

Issuance of restricted common units in connection with acquisitions and contingent consideration

 

 —

 

 —

 —

 

 —

 —

 

 —

 —

 

 

 —

 

 

 —

 

 

 —

 

 

7,560

 

 

7,560

 

 

 —

 

 

7,560

Non-cash equity compensation expense-net of related forfeitures, related to incentive units

 

 —

 

 —

 —

 

 —

 —

 

 —

 —

 

 

17,432

 

 

 —

 

 

 —

 

 

 —

 

 

17,432

 

 

 —

 

 

17,432

Currency translation adjustment-net of tax

 

 —

 

 —

 —

 

 —

 —

 

 —

 —

 

 

 —

 

 

 —

 

 

108

 

 

 —

 

 

108

 

 

 —

 

 

108

Retirement of treasury stock

 

 —

 

 —

 —

 

 —

 —

 

 —

 —

 

 

(2,067)

 

 

 —

 

 

 —

 

 

(842)

 

 

(2,909)

 

 

 —

 

 

(2,909)

Distribution for unitholders

 

 —

 

 —

 —

 

 —

 —

 

 —

 —

 

 

 —

 

 

(2,174)

 

 

 —

 

 

 —

 

 

(2,174)

 

 

 —

 

 

(2,174)

Reorganization of equity structure - July 30, 2018

 

23,881,002

 

 

239

 

 

22,499,665

 

 

225

 

 

(271,307)

 

 

855,515

 

 

9,667

 

 

(43,894)

 

 

550,445

 

 

258,670

 

 

809,115

Balance post-reorganization

 

23,881,002

 

 

239

 

 

22,499,665

 

 

225

 

 

(217,656)

 

 

 —

 

 

 —

 

 

 —

 

 

(217,192)

 

 

258,670

 

 

41,478

Net loss

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(10,198)

 

 

 —

 

 

 —

 

 

(10,198)

 

 

(615)

 

 

(10,813)

Issuance of common stock

 

18,648,649

 

 

186

 

 

 —

 

 

 —

 

 

564,974

 

 

 —

 

 

 —

 

 

 —

 

 

565,160

 

 

 —

 

 

565,160

Issuance of common stock in connection with acquisitions

 

 —

 

 

 —

 

 

323,607

 

 

 3

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 3

 

 

 —

 

 

 3

Change in noncontrolling interest allocation

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

1,522

 

 

 —

 

 

 —

 

 

 —

 

 

1,522

 

 

10,911

 

 

12,433

Non-cash equity compensation expenses

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

4,409

 

 

 —

 

 

 —

 

 

 —

 

 

4,409

 

 

 —

 

 

4,409

Currency translation adjustment-net of tax

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(245)

 

 

 —

 

 

(245)

 

 

(181)

 

 

(426)

Adjustment of deferred tax assets, net of amounts payable under tax receivable agreements and changes from Focus LLC interest transactions

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

36,581

 

 

 —

 

 

 —

 

 

 —

 

 

36,581

 

 

 —

 

 

36,581

Balance at September 30, 2018

 

42,529,651

 

$

425

 

 

22,823,272

 

$

228

 

$

389,830

 

$

(10,198)

 

$

(245)

 

$

 —

 

$

380,040

 

$

268,785

 

$

648,825

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at July 1, 2019

 

47,116,817

 

$

471

 

 

22,308,446

 

$

223

 

$

489,566

 

$

(2,736)

 

$

(2,000)

 

$

 —

 

$

485,524

 

$

330,331

 

$

815,855

Net income

 

 —

 

 

 —

 

 

 

 

 —

 

 

 —

 

 

1,273

 

 

 —

 

 

 —

 

 

1,273

 

 

(881)

 

 

392

Issuance (cancellation) of common stock in connection with exercise of Focus LLC common unit exchange rights

 

109,781

 

 

 1

 

 

(109,781)

 

 

(1)

 

 

2,252

 

 

 —

 

 

 —

 

 

 —

 

 

2,252

 

 

 —

 

 

2,252

Issuance of common stock in connection with exercise of Focus LLC incentive unit exchange rights

 

40,900

 

 

 —

 

 

 —

 

 

 —

 

 

838

 

 

 —

 

 

 —

 

 

 —

 

 

838

 

 

 —

 

 

838

Forfeiture of unvested Class A common stock

 

(11,591)

 

 

 —

 

 

 —

 

 

 —

 

 

(382)

 

 

 —

 

 

 —

 

 

 —

 

 

(382)

 

 

 —

 

 

(382)

Change in non-controlling interest allocation

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

9,263

 

 

 —

 

 

 —

 

 

 —

 

 

9,263

 

 

(12,984)

 

 

(3,721)

Non-cash equity compensation expenses

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

903

 

 

 —

 

 

 —

 

 

 —

 

 

903

 

 

 —

 

 

903

Currency translation adjustment-net of tax

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(1,576)

 

 

 —

 

 

(1,576)

 

 

(888)

 

 

(2,464)

Adjustments of deferred taxes, net of amounts payable under tax receivable agreements and changes from Focus LLC interest transactions

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(99)

 

 

 —

 

 

 —

 

 

 —

 

 

(99)

 

 

 —

 

 

(99)

Balance at September 30, 2019

 

47,255,907

 

$

472

 

 

22,198,665

 

$

222

 

$

502,341

 

$

(1,463)

 

$

(3,576)

 

$

 —

 

$

497,996

 

$

315,578

 

$

813,574

 

See notes to unaudited condensed consolidated financial statements

6

FOCUS FINANCIAL PARTNERS INC.

Unaudited condensed consolidated statements of changes in members’ deficit/shareholders’ equity

Nine months ended September 30, 2018 and 2019

(In thousands, except share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

Total

 

 

 

 

 

 

Class A

 

Class B

 

Additional

 

 

 

 

Other

 

 

 

Members' Deficit/

 

 

 

 

 

 

 

 

Common Stock

 

Common Stock