Moelis & Co [MC] Filings

10-Q 1 mc-20230630.htm 10-Q 10-Q

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 June 30, 2023


☐	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: 001-36418

Moelis & Company

(Exact name of registrant as specified in its charter)


Delaware		46-4500216
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
399 Park Avenue, 4th Floor, New York NY		10022
(Address of principal executive offices)		(Zip Code)

(212) 883-3800

(Registrant’s telephone number, including area code)

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


Title	Trading Symbol	Name of Exchange on which registered
Class A Common Stock	MC	New York Stock Exchange (NYSE)

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 and 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, non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “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 July 12, 2023, there were 66,573,485 shares of Class A common stock, par value $0.01 per share, and 4,489,778 shares of Class B common stock, par value $0.01 per share, outstanding.

TABLE OF CONTENTS


		Page

Part I. Financial Information			3
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35
Part II. Other Information			36
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	38
Signatures		39

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Financial Statements (Unaudited)


	Page

Condensed Consolidated Statements of Financial Condition as of June 30, 2023 and December 31, 2022	4
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022	5
Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2023 and 2022	6
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022	7
Condensed Consolidated Statements of Changes in Equity for the three and six months ended June 30, 2023 and 2022	8
Notes to Condensed Consolidated Financial Statements	10

Moelis & Company

Condensed Consolidated Statements of Financial Condition

(Unaudited)

(dollars in thousands, except per share amounts)


	June 30,		December 31,
	2023		2022
Assets
Cash and cash equivalents	$	160,199	$	206,794
Restricted cash		615		745
Receivables:
Accounts receivable, net of allowance for credit losses of $1,768 and $1,729 as of June 30, 2023 and December 31, 2022, respectively		36,127		47,825
Accrued and other receivables		15,598		8,514
Total receivables		51,725		56,339
Deferred compensation		27,766		15,100
Investments		87,210		265,245
Right-of-use assets		161,298		152,341
Equipment and leasehold improvements, net		59,826		57,152
Deferred tax assets		437,595		429,649
Prepaid expenses and other assets		31,692		33,504
Total assets	$	1,017,926	$	1,216,869
Liabilities and Equity
Compensation payable	$	68,773	$	243,176
Accounts payable, accrued expenses and other liabilities		27,188		11,929
Amount due pursuant to tax receivable agreement		304,780		302,356
Deferred revenue		10,379		7,708
Lease liabilities		201,117		192,762
Total liabilities		612,237		757,931
Commitments and Contingencies (See Note 11)
Class A common stock, par value $0.01 per share (1,000,000,000 shares authorized, 76,713,672 issued and 66,573,485 outstanding at June 30, 2023; 1,000,000,000 authorized, 73,063,181 issued and 63,986,404 outstanding at December 31, 2022)		767		730
Class B common stock, par value $0.01 per share (1,000,000,000 shares authorized, 4,489,778 issued and outstanding at June 30, 2023; 1,000,000,000 authorized, 4,635,898 issued and outstanding at December 31, 2022)		45		46
Treasury stock, at cost; 10,140,187 and 9,076,777 shares at June 30, 2023 and December 31, 2022, respectively		(448,613)		(403,857)
Additional paid-in-capital		1,502,470		1,412,795
Retained earnings (accumulated deficit)		(660,529)		(560,690)
Accumulated other comprehensive income (loss)		(3,988)		(4,529)
Total Moelis & Company equity		390,152		444,495
Noncontrolling interests		15,537		14,443
Total equity		405,689		458,938
Total liabilities and equity	$	1,017,926	$	1,216,869

See notes to the condensed consolidated financial statements (unaudited).

Moelis & Company

Condensed Consolidated Statements of Operations

(Unaudited)

(dollars in thousands, except per share amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenues	$	179,871	$	242,520	$	367,691	$	544,608
Expenses
Compensation and benefits		145,794		140,092		294,033		316,729
Occupancy		6,872		6,267		12,706		12,077
Professional fees		6,907		5,570		11,853		9,885
Communication, technology and information services		11,215		10,108		22,049		18,887
Travel and related expenses		9,213		9,366		20,181		17,009
Depreciation and amortization		1,936		1,841		4,009		3,880
Other expenses		7,520		7,077		13,837		14,515
Total expenses		189,457		180,321		378,668		392,982
Operating income (loss)		(9,586)		62,199		(10,977)		151,626
Other income and (expenses)		(5,629)		(3,046)		(3,883)		(5,281)
Income (loss) before income taxes		(15,215)		59,153		(14,860)		146,345
Provision (benefit) for income taxes		(1,969)		15,296		(5,177)		28,894
Net income (loss)		(13,246)		43,857		(9,683)		117,451
Net income (loss) attributable to noncontrolling interests		(1,272)		4,894		(1,375)		12,773
Net income (loss) attributable to Moelis & Company	$	(11,974)	$	38,963	$	(8,308)	$	104,678
Weighted-average shares of Class A common stock outstanding
Basic		68,504,772		66,290,442		67,852,077		65,572,013
Diluted		68,504,772		69,811,979		67,852,077		70,171,256
Net income (loss) per share attributable to holders of shares of Class A common stock
Basic	$	(0.17)	$	0.59	$	(0.12)	$	1.60
Diluted	$	(0.17)	$	0.56	$	(0.12)	$	1.49

See notes to the condensed consolidated financial statements (unaudited).

Moelis & Company

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

(dollars in thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income (loss)	$	(13,246)	$	43,857	$	(9,683)	$	117,451
Foreign currency translation adjustment, net of tax		305		(4,605)		589		(5,369)
Other comprehensive income (loss)		305		(4,605)		589		(5,369)
Comprehensive income (loss)		(12,941)		39,252		(9,094)		112,082
Less: Comprehensive income (loss) attributable to noncontrolling interests		(1,252)		4,512		(1,327)		12,314
Comprehensive income (loss) attributable to Moelis & Company	$	(11,689)	$	34,740	$	(7,767)	$	99,768

See notes to the condensed consolidated financial statements (unaudited).

Moelis & Company

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(dollars in thousands)


	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities
Net income (loss)	$	(9,683)	$	117,451
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Bad debt expense (benefit)		42		90
Depreciation and amortization		4,009		3,880
Equity-based compensation		93,219		67,923
Deferred tax provision		(5,135)		27,632
Other		(2,881)		6,458
Changes in assets and liabilities:
Accounts receivable		11,948		(9,864)
Accrued and other receivables		(6,947)		1,946
Prepaid expenses and other assets		1,956		(26,389)
Deferred compensation		(12,555)		(9,462)
Compensation payable		(174,492)		(353,855)
Accounts payable, accrued expenses and other liabilities		14,681		(45,084)
Deferred revenue		2,661		2,306
Dividends received		2,189		2,029
Net cash provided by (used in) operating activities		(80,988)		(214,939)
Cash flows from investing activities
Purchases of investments		(34,615)		(191,621)
Proceeds from sales of investments		213,331		254,500
Purchases of equipment and leasehold improvements		(6,684)		(2,794)
Net cash provided by (used in) investing activities		172,032		60,085
Cash flows from financing activities
Payments for dividends and tax distributions		(92,953)		(88,137)
Payments for treasury stock purchases		(44,756)		(132,831)
Payments under tax receivable agreement		—		(248)
Other proceeds		—		100
Net cash provided by (used in) financing activities		(137,709)		(221,116)
Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash		(60)		(5,610)
Net increase (decrease) in cash, cash equivalents, and restricted cash		(46,725)		(381,580)
Cash, cash equivalents, and restricted cash, beginning of period		207,539		521,014
Cash, cash equivalents, and restricted cash, end of period	$	160,814	$	139,434
Supplemental cash flow disclosure:
Cash paid during the period for:
Income taxes, net	$	2,622	$	72,466
Other non-cash activity:
Class A Partnership Units or other equity converted into Class A Common Stock	$	302	$	7,645
Dividends in kind	$	11,199	$	10,903

See notes to the condensed consolidated financial statements (unaudited).

Moelis & Company

Condensed Consolidated Statements of Changes in Equity

(Unaudited)

(dollars in thousands, except share amounts)


	Shares											Retained		Accumulated
	Class A	Class B		Class A		Class B				Additional		Earnings		Other
	Common	Common	Treasury	Common		Common		Treasury		Paid-In		(Accumulated		Comprehensive		Noncontrolling		Total
	Stock	Stock	Stock	Stock		Stock		Stock		Capital		Deficit)		Income (Loss)		Interests		Equity
Balance as of January 1, 2023	73,063,181	4,635,898	(9,076,777)	$	730	$	46	$	(403,857)	$	1,412,795	$	(560,690)	$	(4,529)	$	14,443	$	458,938
Net income (loss)	—	—	—		—		—		—		—		3,666		—		(103)		3,563
Equity-based compensation	3,396,802	—	—		34		—		—		48,656		—		—		10,948		59,638
Other comprehensive income (loss)	—	—	—		—		—		—		—		—		256		28		284
Dividends declared ($0.60 per share of Class A common stock) and tax distributions	—	—	—		—		—		—		5,711		(46,097)		—		(5,645)		(46,031)
Treasury Stock Purchases	—	—	(1,057,278)		—		—		(44,526)		—		—		—		—		(44,526)
Class A Partnership Units or other equity converted into Class A Common Stock	240,027	(146,120)	—		3		(1)		—		(1,101)		—		—		1,325		226
Equity-based payments to non-employees	—	—	—		—		—		—		18		—		—		—		18
Balance as of March 31, 2023	76,700,010	4,489,778	(10,134,055)	$	767	$	45	$	(448,383)	$	1,466,079	$	(603,121)	$	(4,273)	$	20,996	$	432,110
Net income (loss)	—	—	—		—		—		—		—		(11,974)		—		(1,272)		(13,246)
Equity-based compensation	13,662	—	—		—		—		—		30,817		—		—		2,764		33,581
Other comprehensive income (loss)	—	—	—		—		—		—		—		—		285		20		305
Dividends declared ($0.60 per share of Class A Common Stock) and tax distributions	—	—	—		—		—		—		5,488		(45,434)		—		(6,976)		(46,922)
Treasury Stock Purchases	—	—	(6,132)		—		—		(230)		—		—		—		—		(230)
Class A Partnership Units or other equity converted into Class A Common Stock	—	—	—		—		—		—		71		—		—		5		76
Equity-based payments to non-employees	—	—	—		—		—		—		15		—		—		—		15
Balance as of June 30, 2023	76,713,672	4,489,778	(10,140,187)	$

Moelis & Co [MC] Filings
10-Q	[2023-07-27]
10-Q	[2023-04-27]
10-K	[2023-02-23]
10-Q	[2022-11-03]
10-Q	[2022-07-28]
10-Q	[2022-04-28]
10-K	[2022-02-23]
10-Q	[2021-10-28]
10-Q	[2021-07-28]
10-Q	[2021-04-29]
10-K	[2021-02-24]
10-Q	[2020-10-28]
10-Q	[2020-07-30]
10-Q	[2020-04-29]
10-K	[2020-02-27]
10-Q	[2019-10-31]
10-Q	[2019-07-31]
10-Q	[2019-05-01]
10-K	[2019-02-27]
10-Q	[2018-10-31]
10-Q	[2018-07-27]
10-Q	[2018-05-03]
10-K	[2018-02-28]
10-Q	[2017-11-02]
10-Q	[2017-08-02]
10-Q	[2017-05-04]
10-K	[2017-02-28]
10-Q	[2016-11-03]
10-Q	[2016-08-05]
10-Q	[2016-05-05]
10-K	[2016-03-14]
10-Q	[2015-11-04]
10-Q	[2015-08-06]
10-Q	[2015-05-08]
10-K	[2015-02-27]
S-1	[2014-11-10]
10-Q	[2014-11-07]
10-Q	[2014-08-13]
10-Q	[2014-05-22]
S-1	[2014-03-04]