Company Quick10K Filing
Quick10K
Hamilton Lane
10-Q 2019-09-30 Quarter: 2019-09-30
10-Q 2019-06-30 Quarter: 2019-06-30
10-K 2019-03-31 Annual: 2019-03-31
10-Q 2018-12-31 Quarter: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-K 2018-03-31 Annual: 2018-03-31
10-Q 2017-12-31 Quarter: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-K 2017-03-31 Annual: 2017-03-31
8-K 2019-11-05 Earnings, Exhibits
8-K 2019-09-09 Other Events, Exhibits
8-K 2019-09-05 Shareholder Vote
8-K 2019-08-20 Other Events
8-K 2019-08-06 Earnings, Exhibits
8-K 2019-05-29 Earnings, Exhibits
8-K 2019-03-11 Other Events, Exhibits
8-K 2019-02-05 Earnings, Exhibits
8-K 2018-11-06 Earnings, Exhibits
8-K 2018-11-01 Regulation FD
8-K 2018-09-17 Other Events, Exhibits
8-K 2018-09-06 Officers, Shareholder Vote, Exhibits
8-K 2018-08-07 Earnings, Exhibits
8-K 2018-06-07 Earnings, Exhibits
8-K 2018-02-06 Earnings, Exhibits
AMP Ameriprise Financial 16,770
MORN Morningstar 6,870
LM Legg Mason 3,161
FII Federated Investors 3,037
HLI Houlihan Lokey 2,896
APAM Artisan Partners Asset Management 2,003
VRTS Virtus Investment Partners 712
DHIL Diamond Hill Investment Group 464
MDLY Medley Management 97
MC Moelis 0
HLNE 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 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
EX-31.1 exhibit3119301910q.htm
EX-31.2 exhibit3129301910q.htm
EX-32 exhibit329301910q.htm

Hamilton Lane Earnings 2019-09-30

HLNE 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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
For the transition period from _______________________ to ___________________________

Commission file number 001-38021

HAMILTON LANE INCORPORATED

(Exact name of Registrant as specified in its charter)
Delaware26-2482738
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
One Presidential Blvd.,4th Floor
Bala Cynwyd, PA19004
(Address of principal executive offices)(Zip Code)
(610) 934-2222
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, $0.001 par value per shareHLNEThe Nasdaq Stock Market LLC

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 x No o
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 x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerx
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. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No x 
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: As of November 4, 2019, there were 29,824,071 shares of the registrant’s Class A common stock, par value $0.001, and 22,049,727 shares of the registrant’s Class B common stock, par value $0.001, outstanding.




Table of Contents
Page

This Quarterly Report on Form 10-Q (“Form 10-Q”) includes certain information regarding the historical performance of our specialized funds and customized separate accounts. An investment in shares of our Class A common stock is not an investment in our specialized funds or customized separate accounts. In considering the performance information relating to our specialized funds and customized separate accounts contained herein, current and prospective Class A common stockholders should bear in mind that the performance of our specialized funds and customized separate accounts is not indicative of the possible performance of shares of our Class A common stock and is also not necessarily indicative of the future results of our specialized funds or customized separate accounts, even if fund investments were in fact liquidated on the dates indicated, and there can be no assurance that our specialized funds or customized separate accounts will continue to achieve, or that future specialized funds and customized separate accounts will achieve, comparable results.
We own or have rights to trademarks, service marks or trade names that we use in connection with the operation of our business. In addition, our names, logos and website names and addresses are owned by us or licensed by us. We also own or have the rights to copyrights that protect the content of our solutions. Solely for convenience, the trademarks, service marks, trade names and copyrights referred to in this Form 10-Q are listed without the ©, ® and ™ symbols, but we will assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks, trade names and copyrights.



This Form 10-Q may include trademarks, service marks or trade names of other companies. Our use or display of other parties’ trademarks, service marks, trade names or products is not intended to, and does not imply a relationship with, or endorsement or sponsorship of us by, the trademark, service mark or trade name owners.
Unless otherwise indicated, information contained in this Form 10-Q concerning our industry and the markets in which we operate is based on information from independent industry and research organizations, other third-party sources (including industry publications, surveys and forecasts), and management estimates. Management estimates are derived from publicly available information released by independent industry analysts and third-party sources, as well as data from our internal research, and are based on assumptions made by us upon reviewing such data and our knowledge of such industry and markets that we believe to be reasonable. Although we believe the data from these third-party sources is reliable, we have not independently verified any third-party information.
Unless otherwise indicated or the context otherwise requires, all references in this Form 10-Q to “we,” “us,” “our,” the “Company,” “Hamilton Lane” and similar terms refer to Hamilton Lane Incorporated and its consolidated subsidiaries. As used in this Form 10-Q, (i) the term “HLA” refers to Hamilton Lane Advisors, L.L.C. and (ii) the terms “Hamilton Lane Incorporated” and “HLI” refer solely to Hamilton Lane Incorporated, a Delaware corporation, and not to any of its subsidiaries.
Cautionary Note Regarding Forward-Looking Information
Some of the statements in this Form 10-Q may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. Words such as “will,” “expect,” “believe,” “estimate,” “continue,” “anticipate,” “intend,” “plan” and similar expressions are intended to identify these forward-looking statements. Forward-looking statements discuss management’s current expectations and projections relating to our financial position, results of operations, plans, objectives, future performance and business. All forward-looking statements are subject to known and unknown risks, uncertainties and other important factors that may cause actual results to be materially different, including risks relating to our ability to manage growth, fund performance, changes in our regulatory environment and tax status; market conditions generally; our ability to access suitable investment opportunities for our clients; our ability to maintain our fee structure; our ability to attract and retain key employees; our ability to manage our obligations under our debt agreements; defaults by clients and third-party investors on their obligations to us; our ability to comply with investment guidelines set by our clients; and our ability to receive distributions from HLA to fund our payment of dividends, taxes and other expenses.
The foregoing list of factors is not exhaustive. For more information regarding these risks and uncertainties as well as additional risks that we face, you should refer to the “Risk Factors” detailed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended March 31, 2019 (our “2019 Form 10-K”) and in our subsequent reports filed from time to time with the Securities and Exchange Commission (the “SEC”). The forward-looking statements included in this Form 10-Q are made only as of the date we filed this report. We undertake no obligation to update or revise any forward-looking statement as a result of new information or future events, except as otherwise required by law.










2


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
Hamilton Lane Incorporated
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share and per share amounts)

September 30,March 31,
20192019
Assets
Cash and cash equivalents$71,899  $49,357  
Restricted cash3,184  2,233  
Fees receivable17,628  20,320  
Prepaid expenses5,401  4,714  
Due from related parties4,198  2,628  
Furniture, fixtures and equipment, net8,026  8,108  
Lease right-of-use assets, net9,689  —  
Investments174,134  154,491  
Deferred income taxes140,745  107,726  
Other assets10,478  11,014  
Total assets$445,382  $360,591  
Liabilities and Equity
Accounts payable$1,964  $2,619  
Accrued compensation and benefits20,689  12,216  
Deferred incentive fee revenue3,704  3,704  
Debt69,107  70,954  
Accrued members’ distributions3,836  17,081  
Payable to related parties pursuant to tax receivable agreement101,322  69,636  
Dividends payable8,023  5,673  
Lease liabilities10,471  —  
Other liabilities (includes $15,913 and $0 at fair value)
21,635  8,986  
Total liabilities240,751  190,869  
Commitments and contingencies (Note 13)
Preferred stock, $0.001 par value, 10,000,000 authorized, none issued
    
Class A common stock, $0.001 par value, 300,000,000 authorized; 29,824,686 and 27,367,477 issued and outstanding as of September 30, 2019 and March 31, 2019, respectively
30  27  
Class B common stock, $0.001 par value, 50,000,000 authorized; 22,049,727 and 23,516,439 issued and outstanding as of September 30, 2019 and March 31, 2019, respectively
22  24  
Additional paid-in-capital107,718  92,482  
Retained earnings28,998  17,686  
Accumulated other comprehensive (loss) income(7) 7  
Total Hamilton Lane Incorporated stockholders’ equity136,761  110,226  
Non-controlling interests in general partnerships5,592  5,716  
Non-controlling interests in Hamilton Lane Advisors, L.L.C.62,278  53,780  
Total equity204,631  169,722  
Total liabilities and equity$445,382  $360,591  
See accompanying notes to the condensed consolidated financial statements.

3

Hamilton Lane Incorporated
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share amounts)


Three Months Ended
September 30,
Six Months Ended September 30,
2019201820192018
Revenues
Management and advisory fees$59,196  $53,248  $119,747  $104,227  
Incentive fees5,096  2,585  9,231  14,968  
Total revenues64,292  55,833  128,978  119,195  
Expenses
Compensation and benefits23,353  22,771  46,999  49,393  
General, administrative and other14,014  11,695  28,061  22,743  
Total expenses37,367  34,466  75,060  72,136  
Other income (expense)
Equity in income of investees3,664  5,276  9,877  5,162  
Interest expense(745) (728) (1,562) (1,493) 
Interest income148  43  428  85  
Non-operating income4,957  12,194  4,078  12,059  
Total other income (expense)8,024  16,785  12,821  15,813  
Income before income taxes34,949  38,152  66,739  62,872  
Income tax expense2,676  5,580  7,013  7,197  
Net income32,273  32,572  59,726  55,675  
Less: Income attributable to non-controlling interests in general partnerships45  514  549  394  
Less: Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.16,929  20,836  32,497  35,214  
Net income attributable to Hamilton Lane Incorporated$15,299  $11,222  $26,680  $20,067  
Basic earnings per share of Class A common stock$0.56  $0.49  $0.99  $0.89  
Diluted earnings per share of Class A common stock$0.56  $0.49  $0.98  $0.88  
Dividends declared per share of Class A common stock$0.275  $0.2125  $0.55  $0.425  
See accompanying notes to the condensed consolidated financial statements.






4

Hamilton Lane Incorporated
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
(In thousands)

Three Months Ended
September 30,
Six Months Ended September 30,
2019201820192018
Net income$32,273  $32,572  $59,726  $55,675  
Other comprehensive loss, net of tax
Foreign currency translation
(42)   (29)   
Total other comprehensive loss, net of tax(42)   (29)   
Comprehensive income32,231  32,572  59,697  55,675  
Less:
Comprehensive income attributable to non-controlling interests in general partnerships45  514  549  394  
Comprehensive income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.16,908  20,836  32,482  35,214  
Total comprehensive income attributable to Hamilton Lane Incorporated$15,278  $11,222  $26,666  $20,067  
See accompanying notes to the condensed consolidated financial statements.































5


Hamilton Lane Incorporated
Condensed Consolidated Statement of Stockholders' Equity
(Unaudited)
(In thousands)

Class A Common StockClass B Common StockAdditional Paid in CapitalRetained EarningsAccumulated Other Comprehensive IncomeNon-Controlling Interests in General PartnershipsNon-Controlling Interests in Hamilton Lane Advisors, L.L.C.Total Equity
Balance at June 30, 2019$27  $24  $93,543  $21,722  $14  $5,932  $56,573  $177,835  
Net income
—  —  —  15,299  —  45  16,929  32,273  
Other comprehensive loss
—  —  —  —  (21) —  (21) (42) 
Equity-based compensation
—  —  902  —  —  —  859  1,761  
Repurchase of Class A shares for employee tax withholding
—  —  (14) —  —  —  (14) (28) 
Deferred tax adjustment
—  —  6,207  —  —  —  —  6,207  
Dividends declared
—  —  —  (8,023) —  —  —  (8,023) 
Capital contributions from (distributions to) non-controlling interests, net
—  —  —  —  —  (385) —  (385) 
Member distributions
—  —  —  —  —  —  (5,281) (5,281) 
Secondary offering
3  (2) 6,367  —  —  —  (6,370) (2) 
Employee Share Purchase Plan share issuance
—  —  162  —  —  —  154  316  
Equity reallocation between controlling and non-controlling interests
—  —  551  —  —  —  (551)   
Balance at September 30, 2019$30  $22  $107,718  $28,998  $(7) $5,592  $62,278  $204,631  
Class A Common StockClass B Common StockAdditional Paid in CapitalRetained EarningsAccumulated Other Comprehensive IncomeNon-Controlling
Interests in General Partnerships
Non-Controlling
Interests in Hamilton Lane Advisors, L.L.C.
Total Equity
Balance at March 31, 2019$27  $24  $92,482  $17,686  $7  $5,716  $53,780  $169,722  
Net income
—  —  —  26,680  —  549  32,497  59,726  
Other comprehensive loss
—  —  —  —  (14) —  (15) (29) 
Equity-based compensation
—  —  1,777  —  —  —  1,725  3,502  
Issuance of shares for contingent compensation payout
—  —  214  —  —  —  211  425  
Repurchase of Class A shares for employee tax withholding
—  —  (23) —  —  —  (22) (45) 
Deferred tax adjustment
—  —  6,211  —  —  —  —  6,211  
Dividends declared
—  —  —  (15,368) —  —  —  (15,368) 
Capital contributions from (distributions to) non-controlling interests, net
—  —  —  —  —  (673) —  (673) 
Member distributions
—  —  —  —  —  —  (19,430) (19,430) 
Secondary Offering
3  (2) 6,367  —  —  —  (6,370) (2) 
Employee Share Purchase Plan share issuance
—  —  301  —  —  —  291  592  
Equity reallocation between controlling and non-controlling interests
—  —  389  —  —  —  (389)   
Balance at September 30, 2019$30  $22  $107,718  $28,998  $(7) $5,592  $62,278  $204,631  

See accompanying notes to the condensed consolidated financial statements.

6


Hamilton Lane Incorporated
Condensed Consolidated Statement of Stockholders' Equity
(Unaudited)
(In thousands)

Class A Common StockClass B Common StockAdditional Paid in CapitalRetained EarningsAccumulated Other Comprehensive IncomeNon-Controlling Interests in General PartnershipsNon-Controlling Interests in Hamilton Lane Advisors, L.L.C.Total Equity
Balance at June 30, 2018$22  $26  $74,802  $8,685  $  $6,709  $54,681  $144,925  
Net income
—  —  —  11,222  —  514  20,836  32,572  
Equity-based compensation
—  —  691  —  —  —  919  1,610  
Repurchase of Class A shares for employee tax withholding
—  —  (10) —  —  —  (14) (24) 
Deferred tax adjustment
—  —  6,170  —  —  —  —  6,170  
Dividends declared
—  —  —  (4,729) —  —  —  (4,729) 
Capital contributions from (distributions to) non-controlling interests, net
—  —  —  —  —  (350) —  (350) 
Member distributions
—  —  —  —  —  —  (18,025) (18,025) 
Secondary offering
3  (2) 5,891  —  —  —  (5,894) (2) 
Equity reallocation between controlling and non-controlling interests
—  —  (1,455) —  —  —  1,455    
Balance at September 30, 2018$25  $24  $86,089  $15,178  $  $6,873  $53,958  $162,147  

Class A Common StockClass B Common StockAdditional Paid in CapitalRetained EarningsAccumulated Other Comprehensive IncomeNon-Controlling
Interests in General Partnerships
Non-Controlling
Interests in Hamilton Lane Advisors, L.L.C.
Total Equity
Balance at March 31, 2018$22  $26  $73,829  $4,549  $  $7,266  $50,382  $136,074  
Cumulative-effect adjustment from adoption of accounting guidance
—  —  411  20  —  —  566  997  
Net income
—  —  —  20,067  —  394  35,214  55,675  
Equity-based compensation
—  —  1,369  —  —  —  1,851  3,220  
Repurchase of Class A shares for employee tax withholding
—  —  (73) —  —  —  (101) (174) 
Deferred tax adjustment
—  —  6,170  —  —  —  —  6,170  
Dividends declared
—  —  —  (9,458) —  —  —  (9,458) 
Capital contributions from (distributions to) non-controlling interests, net
—  —  —  —  —  (787) —  (787) 
Member distributions
—  —  —  —  —  —  (29,568) (29,568) 
Secondary offering
3  (2) 5,891  —  —  —  (5,894) (2) 
Equity reallocation between controlling and non-controlling interests
—  —  (1,508) —  —  —  1,508    
Balance at September 30, 2018$25  $24  $