10-Q 1 pjt-10q_20220331.htm 10-Q pjt-10q_20220331.htm
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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 MARCH 31, 2022

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: 001-36869

 

 

PJT Partners Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

36-4797143

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

 

280 Park Avenue

New York, New York 10017

(Address of principal executive offices)(Zip Code)

(212) 364-7800

(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

 

PJT

 

New York Stock Exchange

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, 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 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 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 April 25, 2022, there were 24,632,442 shares of Class A common stock, par value $0.01 per share, and 164 shares of Class B common stock, par value $0.01 per share, outstanding.

 

 

 

 


 

 

TABLE OF CONTENTS

 

 

 

Page

PART I.

 

FINANCIAL INFORMATION

 

 

 

 

 

 

 

ITEM 1.

 

FINANCIAL STATEMENTS

 

4

 

 

 

 

 

 

 

Unaudited Condensed Consolidated Financial Statements — March 31, 2022 and 2021:

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Financial Condition as of March 31, 2022 and December 31, 2021

 

4

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2022 and 2021

 

5

 

 

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2022 and 2021

 

6

 

 

 

 

 

 

 

Condensed Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2022 and 2021

 

7

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021

 

8

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

9

 

 

 

 

 

ITEM 2.

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

23

 

 

 

 

 

ITEM 3.

 

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

31

 

 

 

 

 

ITEM 4.

 

CONTROLS AND PROCEDURES

 

31

 

 

 

 

 

PART II.

 

OTHER INFORMATION

 

 

 

 

 

 

 

ITEM 1.

 

LEGAL PROCEEDINGS

 

32

 

 

 

 

 

ITEM 1A.

 

RISK FACTORS

 

32

 

 

 

 

 

ITEM 2.

 

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

33

 

 

 

 

 

ITEM 3.

 

DEFAULTS UPON SENIOR SECURITIES

 

33

 

 

 

 

 

ITEM 4.

 

MINE SAFETY DISCLOSURES

 

33

 

 

 

 

 

ITEM 5.

 

OTHER INFORMATION

 

33

 

 

 

 

 

ITEM 6.

 

EXHIBITS

 

34

 

 

 

 

 

SIGNATURES

 

35

 

 

 

1


 

 

PJT Partners Inc. was formed in connection with certain merger and spin-off transactions whereby the financial and strategic advisory services, restructuring and reorganization advisory services and Park Hill Group businesses of Blackstone Inc. (“Blackstone” or our “former Parent”) were combined with PJT Capital LP, a financial advisory firm founded by Paul J. Taubman in 2013 (together with its then affiliates, “PJT Capital”), and the combined business was distributed to Blackstone’s unitholders to create PJT Partners Inc., a stand-alone, independent publicly traded company. Throughout this Quarterly Report on Form 10-Q, we refer to this transaction as the “spin-off.” PJT Partners Inc. is a holding company and its only material asset is its controlling equity interest in PJT Partners Holdings LP, a holding partnership that holds the Company’s operating subsidiaries, and certain cash and cash equivalents it may hold from time to time. As the sole general partner of PJT Partners Holdings LP, PJT Partners Inc. operates and controls all of the business and affairs of PJT Partners Holdings LP and its operating subsidiaries.

In this Quarterly Report on Form 10-Q, unless the context requires otherwise, the words “PJT Partners Inc.” refers to PJT Partners Inc., and “PJT Partners,” the “Company,” “we,” “us” and “our” refer to PJT Partners Inc., together with its consolidated subsidiaries, including PJT Partners Holdings LP and its operating subsidiaries.

Forward-Looking Statements

Certain material presented herein contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include certain information concerning future results of operations, business strategies, acquisitions, financing plans, competitive position, potential growth opportunities, potential operating performance improvements, the effects of competition and the effects of future legislation or regulations. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “opportunity,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “might,” “should,” “could” or the negative of these terms or similar expressions.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict, many of which are outside our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not place undue reliance upon any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (a) changes in governmental regulations and policies; (b) cyberattacks, security vulnerabilities, and internet disruptions, including breaches of data security and privacy leaks, data loss, and business interruptions; (c) failure of our computer systems or communication systems during a catastrophic event, including as a result of the increased use of remote work environments and virtual platforms; (d) the impact of catastrophic events, such as COVID-19 or other pandemics, on the U.S. and the global economy, including business disruptions, reductions in employment and an increase in business failures; (e) the impact of catastrophic events, such as COVID-19 or other pandemics, on our employees and our ability to provide services to our clients and respond to their needs; (f) the failure of third-party service providers to perform their functions; and (g) volatility in the political and economic environment.

2


 

Any of these factors, as well as such other factors discussed in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the United States Securities and Exchange Commission (“SEC”), as such factors may be updated from time to time in our periodic filings with the SEC, accessible on the SEC’s website at www.sec.gov, could cause our results to differ materially from those expressed in forward-looking statements. There may be other risks and uncertainties that we are unable to predict at this time or that are not currently expected to have a material adverse effect on our business. Any such risks could cause our results to differ materially from those expressed in forward-looking statements.

Website Disclosure

We use our website (www.pjtpartners.com) as a channel of distribution of Company information. The information we post may be deemed material. Accordingly, investors should monitor the website, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive e-mail alerts and other information about PJT Partners when you enroll your e-mail address by visiting the “Investor Relations” page of our website at ir.pjtpartners.com/investor-relations. Although we refer to our website in this report, the contents of our website are not included or incorporated by reference into this report. All references to our website in this report are intended to be inactive textual references only.

 

3


 

 

PART I.

FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

PJT Partners Inc.

Condensed Consolidated Statements of Financial Condition (Unaudited)

(Dollars in Thousands, Except Share and Per Share Data)

 

 

 

March 31,

2022

 

 

December 31,

2021

 

Assets

 

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

$

75,807

 

 

$

200,481

 

Investments

 

 

19,974

 

 

 

 

Accounts Receivable (net of allowance for credit losses of $3,317 and

   $1,853 at March 31, 2022 and December 31, 2021, respectively)

 

 

352,245

 

 

 

289,267

 

Intangible Assets, Net

 

 

22,458

 

 

 

24,386

 

Goodwill

 

 

172,725

 

 

 

172,725

 

Furniture, Equipment and Leasehold Improvements, Net

 

 

35,338

 

 

 

37,147

 

Operating Lease Right-of-Use Assets

 

 

131,362

 

 

 

137,916

 

Other Assets

 

 

89,230

 

 

 

61,921

 

Deferred Tax Asset, Net

 

 

64,732

 

 

 

63,782

 

Total Assets

 

$

963,871

 

 

$

987,625

 

Liabilities and Equity

 

 

 

 

 

 

 

 

Accrued Compensation and Benefits

 

$

63,058

 

 

$

121,717

 

Accounts Payable, Accrued Expenses and Other Liabilities

 

 

21,758

 

 

 

23,753

 

Operating Lease Liabilities

 

 

150,050

 

 

 

157,013

 

Amount Due Pursuant to Tax Receivable Agreement

 

 

31,714

 

 

 

31,131

 

Taxes Payable

 

 

2,553

 

 

 

3,492

 

Deferred Revenue

 

 

14,702

 

 

 

12,947

 

Revolving Credit Facility Payable

 

 

25,000

 

 

 

 

Total Liabilities

 

 

308,835

 

 

 

350,053

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

Class A Common Stock, par value $0.01 per share (3,000,000,000

   shares authorized; 30,593,822 and 29,248,457 issued at March 31,

   2022 and December 31, 2021, respectively; 24,777,849 and 24,319,413

   outstanding at March 31, 2022 and December 31, 2021,

   respectively)

 

 

305

 

 

 

292

 

Class B Common Stock, par value $0.01 per share (1,000,000

   shares authorized; 164 issued and outstanding at March 31, 2022;

   159 issued and outstanding at December 31, 2021)

 

 

 

 

 

 

Additional Paid-In Capital

 

 

438,634

 

 

 

391,242

 

Retained Earnings (Deficit)

 

 

14,503

 

 

 

(4,933

)

Accumulated Other Comprehensive Income (Loss)

 

 

(156

)

 

 

631

 

Treasury Stock at Cost (5,815,973 and 4,929,044 shares at March 31,

   2022 and December 31, 2021, respectively)

 

 

(323,569

)

 

 

(267,000

)

Total PJT Partners Inc. Equity

 

 

129,717

 

 

 

120,232

 

Non-Controlling Interests

 

 

525,319

 

 

 

517,340

 

Total Equity

 

 

655,036

 

 

 

637,572

 

Total Liabilities and Equity

 

$

963,871

 

 

$

987,625

 

 

See notes to condensed consolidated financial statements.

4


 

PJT Partners Inc.

Condensed Consolidated Statements of Operations (Unaudited)

(Dollars in Thousands, Except Share and Per Share Data)

 

 

 

Three Months Ended

March 31,

 

 

 

2022

 

 

2021

 

Revenues

 

 

 

 

 

 

 

 

Advisory Fees

 

$

181,658

 

 

$

152,600

 

Placement Fees

 

 

60,351

 

 

 

50,383

 

Interest Income and Other

 

 

4,310

 

 

 

3,717

 

Total Revenues

 

 

246,319

 

 

 

206,700

 

Expenses

 

 

 

 

 

 

 

 

Compensation and Benefits

 

 

159,232

 

 

 

132,793

 

Occupancy and Related

 

 

8,942

 

 

 

8,459

 

Travel and Related

 

 

4,458

 

 

 

517

 

Professional Fees

 

 

7,051

 

 

 

7,717

 

Communications and Information Services

 

 

4,423

 

 

 

4,174

 

Depreciation and Amortization

 

 

4,307

 

 

 

3,834

 

Other Expenses

 

 

7,758

 

 

 

5,317

 

Total Expenses

 

 

196,171

 

 

 

162,811

 

Income Before Provision for Taxes

 

 

50,148

 

 

 

43,889

 

Provision for Taxes

 

 

5,680

 

 

 

93

 

Net Income

 

 

44,468

 

 

 

43,796

 

Net Income Attributable to Non-Controlling Interests

 

 

18,764

 

 

 

17,114

 

Net Income Attributable to PJT Partners Inc.

 

$

25,704

 

 

$

26,682

 

Net Income Per Share of Class A Common Stock

 

 

 

 

 

 

 

 

Basic

 

$

1.03

 

 

$

1.07

 

Diluted

 

$

1.00

 

 

$

1.03

 

Weighted-Average Shares of Class A Common Stock Outstanding

 

 

 

 

 

 

 

 

Basic

 

 

24,989,152

 

 

 

24,969,388

 

Diluted

 

 

26,551,835

 

 

 

42,858,757

 

 

See notes to condensed consolidated financial statements.

5


 

PJT Partners Inc.

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(Dollars in Thousands)

 

 

 

Three Months Ended

March 31,

 

 

 

2022

 

 

2021

 

Net Income

 

$

44,468

 

 

$

43,796

 

Other Comprehensive Income (Loss), Net of Tax Currency Translation

   Adjustment

 

 

(1,436

)

 

 

124

 

Comprehensive Income

 

 

43,032

 

 

 

43,920

 

Less:

 

 

 

 

 

 

 

 

Comprehensive Income Attributable to Non-Controlling

   Interests

 

 

18,115

 

 

 

17,171

 

Comprehensive Income Attributable to PJT Partners Inc.

 

$

24,917

 

 

$

26,749

 

 

See notes to condensed consolidated financial statements.

 

 

6


 

 

PJT Partners Inc.

Condensed Consolidated Statements of Changes in Equity (Unaudited)

(Dollars in Thousands, Except Share Data)

 

 

 

Three Months Ended March 31, 2022

 

 

 

Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A

 

 

Class B

 

 

 

 

 

 

Class A

 

 

Class B

 

 

Additional

 

 

Retained

 

 

Other

 

 

 

 

 

 

Non-

 

 

 

 

 

 

 

Common

 

 

Common

 

 

Treasury

 

 

Common

 

 

Common

 

 

Paid-In

 

 

Earnings

 

 

Comprehensive

 

 

Treasury

 

 

Controlling

 

 

 

 

 

 

 

Stock

 

 

Stock

 

 

Stock

 

 

Stock

 

 

Stock

 

 

Capital

 

 

(Deficit)

 

 

Income (Loss)

 

 

Stock

 

 

Interests

 

 

Total

 

Balance at December 31, 2021

 

 

29,248,457

 

 

 

159

 

 

 

(4,929,044

)

 

$

292

 

 

$

 

 

$

391,242

 

 

$

(4,933

)

 

$

631

 

 

$

(267,000

)

 

$

517,340

 

 

$

637,572

 

Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25,704

 

 

 

 

 

 

 

 

 

18,764

 

 

 

44,468

 

Other Comprehensive Loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(787

)

 

 

 

 

 

(649

)

 

 

(1,436

)

Dividends Declared ($0.25 Per Share of

   Class A Common Stock)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,268

)

 

 

 

 

 

 

 

 

 

 

 

(6,268

)

Equity-Based Compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

53,717

 

 

 

 

 

 

 

 

 

 

 

 

5,352

 

 

 

59,069

 

Net Share Settlement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(15,367

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(15,367

)

Deliveries of Vested Shares of

   Class A Common Stock

 

 

1,345,365

 

 

 

 

 

 

 

 

 

13

 

 

 

 

 

 

(13

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in Ownership Interest

 

 

 

 

 

5

 

 

 

 

 

 

 

 

 

 

 

 

9,055

 

 

 

 

 

 

 

 

 

 

 

 

(15,488

)

 

 

(6,433

)

Treasury Stock Purchases

 

 

 

 

 

 

 

 

(886,929

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(56,569

)

 

 

 

 

 

(56,569

)

Balance at March 31, 2022

 

 

30,593,822

 

 

 

164

 

 

 

(5,815,973

)

 

$

305

 

 

$

 

 

$

438,634

 

 

$

14,503

 

 

$

(156

)

 

$

(323,569

)

 

$

525,319

 

 

$

655,036

 

 

 

 

Three Months Ended March 31, 2021

 

 

 

Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A

 

 

Class B

 

 

 

 

 

 

Class A

 

 

Class B

 

 

Additional

 

 

 

 

 

 

Other

 

 

 

 

 

 

Non-

 

 

 

 

 

 

 

Common

 

 

Common

 

 

Treasury

 

 

Common

 

 

Common

 

 

Paid-In

 

 

Accumulated

 

 

Comprehensive

 

 

Treasury

 

 

Controlling

 

 

 

 

 

 

 

Stock

 

 

Stock

 

 

Stock

 

 

Stock

 

 

Stock

 

 

Capital

 

 

Deficit

 

 

Income

 

 

Stock

 

 

Interests

 

 

Total

 

Balance at December 31, 2020

 

 

27,293,085

 

 

 

194

 

 

 

(3,476,731

)

 

$

267

 

 

$

 

 

$

349,363

 

 

$

(33,127

)

 

$

1,414

 

 

$

(163,658

)

 

$

533,587

 

 

$

687,846

 

Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26,682

 

 

 

 

 

 

 

 

 

17,114

 

 

 

43,796

 

Other Comprehensive Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

67

 

 

 

 

 

 

57

 

 

 

124

 

Dividends Declared ($0.05 Per Share of

   Class A Common Stock)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,270

)

 

 

 

 

 

 

 

 

 

 

 

(1,270

)

Equity-Based Compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27,938

 

 

 

 

 

 

 

 

 

 

 

 

2,010

 

 

 

29,948

 

Net Share Settlement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(20,415

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(20,415

)

Deliveries of Vested Shares of

  Class A Common Stock

 

 

1,818,722

 

 

 

 

 

 

 

 

 

2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

 

Change in Ownership Interest

 

 

 

 

 

(24

)

 

 

 

 

 

 

 

 

 

 

 

20,939

 

 

 

 

 

 

 

 

 

 

 

 

(68,498

)

 

 

(47,559

)

Treasury Stock Purchases

 

 

 

 

 

 

 

 

(657,907

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(45,896

)

 

 

 

 

 

(45,896

)

Balance at March 31, 2021

 

 

29,111,807

 

 

 

170

 

 

 

(4,134,638

)

 

$

269

 

 

$

 

 

$

377,825

 

 

$

(7,715

)

 

$

1,481

 

 

$

(209,554

)

 

$

484,270

 

 

$

646,576

 

 

See notes to condensed consolidated financial statements.

7


 

 

 

PJT Partners Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Dollars in Thousands)

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Operating Activities

 

 

 

 

 

 

 

 

Net Income

 

$

44,468

 

 

$

43,796

 

Adjustments to Reconcile Net Income to Net Cash Used in

   Operating Activities

 

 

 

 

 

 

 

 

Equity-Based Compensation Expense

 

 

59,069

 

 

 

29,948

 

Depreciation and Amortization Expense

 

 

4,307

 

 

 

3,834

 

Amortization of Operating Lease Right-of-Use Assets

 

 

5,362

 

 

 

4,780

 

Provision for Credit Losses

 

 

1,464

 

 

 

(192

)

Other

 

 

(1,836

)

 

 

(1,414

)

Cash Flows Due to Changes in Operating Assets and Liabilities

 

 

 

 

 

 

 

 

Accounts Receivable

 

 

(64,972

)

 

 

(41,087