- Quarterly revenues of $36.0 million, down 17% from prior year’s
second quarter due to few large M&A transaction completions
amid a slowdown in market activity
- Year to date revenues of $81.5 million, down 27% from the same
period in 2021 due to fewer large transaction completions
- Compensation costs for quarter and year to date up slightly
over last year; elevated compensation ratios in each period given
the lower than typical revenue levels
- Non-compensation costs slightly below last year’s first half
level
- Repurchased 850,926 shares of common stock and common stock
equivalents during the quarter for $10.4 million at an average
price of $12.18 per share
- Recruited 2 additional Managing Directors during the
quarter
Greenhill & Co., Inc. (NYSE: GHL) today reported revenues of
$36.0 million, a net loss of $18.7 million and a loss per share of
$1.03 for the quarter ended June 30, 2022.
The Firm’s second quarter 2022 revenues compare to revenues of
$43.2 million in the second quarter of 2021, which represents a
decrease of $7.2 million. The Firm’s second quarter 2022 net loss
and loss per share compare to a net loss of $8.8 million and a loss
per share of $0.45 for the second quarter 2021.
For the six months ended June 30, 2022, revenues of $81.5
million compare to $112.2 million for the comparable period in
2021, a decrease of $30.7 million. For the first half of 2022, a
net loss of $30.8 million and a loss per share of $1.68 compare to
a net loss of $6.7 million and a loss per share of $0.34 for the
same period in 2021.
The Firm’s revenues and net income can fluctuate materially
depending on the number, size and timing of completed transactions
on which it advised and other factors. Accordingly, the revenues
and net income in any particular period may not be indicative of
future results.
“Our teams in all regions remain busily engaged on important
client assignments, but our revenue for the quarter and first half
was light given relatively few significant transaction closings.
While there is no reason to think our business is subject to
predictable seasonality, this year is looking very much like the
prior three, where a weak first half revenue result was followed by
a much stronger second half performance, resulting in a solid full
year revenue outcome. Given we continue to be disciplined on costs,
that would result in another year of strong cash flow generation.
We see our stock as significantly undervalued relative to the
amount of cash we have proven able to generate through a wide
variety of market conditions. Accordingly, we repurchased 1.9
million shares and share equivalents in the first half, and plan to
continue to direct our cash flow toward acquiring additional shares
so long as the market valuation remains attractive,” Scott L. Bok,
Chairman and Chief Executive Officer, commented.
Revenues
Revenues were $36.0 million in the second quarter of 2022
compared to $43.2 million in the second quarter of 2021, a decrease
of $7.2 million, or 17%. The decrease principally resulted from
fewer significant merger and acquisition transaction completion
fees.
For the six months ended June 30, 2022, revenues were $81.5
million compared to $112.2 million in 2021, a decrease of $30.7
million, or 27%. The decrease principally resulted from fewer
significant transaction completion fees.
Recruiting Update
We are announcing today the recruitment of Spencer Crawford
(most recently Managing Director at William Blair) who joined the
Firm as a Managing Director and Co-Head of U.S. Financial Sponsor
Coverage and is based in San Francisco. In addition, we announce
today the addition of Kristin Allen (formerly Managing Director at
Solomon Partners and Credit Suisse) who will join the Firm as a
Managing Director focused on the telecommunications and wireless
infrastructure sector and be based in New York.
Including all Managing Directors whose recruitment we have
announced to date, we have 80 client-facing Managing Directors as
of this date.
Expenses
Operating Expenses
Our total operating expenses for the second quarter of 2022 were
$56.9 million, which compared to $52.4 million of total operating
expenses for the second quarter of 2021. The increase in total
operating expenses of $4.5 million, or 9%, resulted from higher
compensation and benefits expenses and non-compensation operating
expenses, each as described in more detail below.
For the six months ended June 30, 2022, our total operating
expenses were $116.9 million, which compared to $114.1 million of
total operating expenses for the first half of 2021. The increase
in total operating expenses of $2.8 million, or 2%, resulted from
an increase in our compensation and benefits expenses, partially
offset by a decrease in our non-compensation operating expenses,
each as described in more detail below.
The following table sets forth information relating to our
operating expenses.
For the Three Months Ended June
30,
For the Six Months Ended June
30,
2022
2021
2022
2021
(in millions, unaudited)
Employee compensation and benefits
expenses
$43.2
$39.8
$90.0
$87.1
% of revenues
120%
92%
110%
78%
Non-compensation operating expenses
13.8
12.6
26.9
27.0
% of revenues
38%
29%
33%
24%
Total operating expenses
56.9
52.4
116.9
114.1
% of revenues
158%
121%
143%
102%
Total operating income (loss)
(20.9)
(9.2)
(35.4)
(2.0)
Operating profit margin
NM
NM
NM
NM
Compensation and Benefits Expenses
Our employee compensation and benefits expenses were $43.2
million in the second quarter of 2022 as compared to $39.8 million
for the second quarter of 2021. The increase in expense of $3.4
million, or 8%, was principally due to growth in professional
headcount and a market driven increase in salaries. The ratios of
compensation to revenues for the second quarters in both 2022 and
2021 were elevated due to lower than average quarterly
revenues.
For the six months ended June 30, 2022, our employee
compensation and benefits expenses were $90.0 million compared to
$87.1 million for the same period in 2021. The increase in expense
of $2.9 million, or 3%, was principally attributable to headcount
growth and higher salary levels of our professional staff. The
ratio of compensation to revenues for the six month periods in 2022
and 2021 was elevated due to the low level of first half revenues
in each year.
Our compensation expense is generally based upon revenues and
can fluctuate materially in any particular period depending upon
changes in headcount, amount of revenues recognized, as well as
other factors. Accordingly, the amount of compensation expense
recognized in any particular period may not be indicative of
compensation expense in a future period.
Non-Compensation Operating Expenses
For the three months ended June 30, 2022, our non-compensation
operating expenses of $13.8 million increased $1.2 million, or 9%,
as compared to $12.6 million in the same period in 2021. The
increase principally resulted from higher costs for business travel
and entertainment.
Non-compensation expenses as a percentage of revenues for the
three months ended June 30, 2022 were 38% compared to 29% for the
same period in 2021. The increase in non-compensation expenses as a
percentage of revenues resulted from the effect of spreading
slightly higher non-compensation costs over lower revenues in the
three months ended June 30, 2022 as compared to the same period in
2021.
For the first half of 2022, our non-compensation operating
expenses of $26.9 million decreased $0.1 million, or 1% as compared
to $27.0 million in the comparable period in 2021. The slight
decrease principally resulted from the benefit of a small foreign
currency gain compared to a small foreign currency loss in the same
period in the prior year, partially offset by increased travel and
entertainment costs.
Non-compensation expenses as a percentage of revenues for the
six months ended June 30, 2022 were 33% compared to 24% for the
same period in 2021. The increase in non-compensation expenses as a
percentage of revenues resulted from the effect of spreading
comparable non-compensation costs over much lower revenues in the
first half of 2022 as compared to the same period in 2021.
Our non-compensation operating expenses can vary as a result of
a variety of factors such as changes in headcount, the amount of
recruiting and business development activity, the amount of office
expansion, the amount of client reimbursed expenses, the impact of
currency movements and other factors. Accordingly, the
non-compensation operating expenses in any particular period may
not be indicative of the non-compensation operating expenses in
future periods.
Interest Expense
For the three months ended June 30, 2022, we incurred interest
expense of $3.3 million as compared to $3.1 million for the same
period in 2021. The increase of $0.2 million principally related to
higher market borrowing rates in the second quarter of 2022
compared to the same period in 2021, offset in part by lower
borrowings outstanding as a result of accelerated debt repayments
made during 2021.
For the six months ended June 30, 2022, we incurred interest
expense of $6.0 million, a decrease of $0.3 million as compared to
$6.3 million for the same period in 2021. The decrease related to
lower borrowings outstanding, offset in part by higher average
market borrowing rates in the first six months of 2022 as compared
to the same period in 2021.
The rate of interest on our borrowing is based on LIBOR and can
vary from period to period. Accordingly, the amount of interest
expense in any particular period may not be indicative of the
amount of interest expense in future periods. There can be no
certainty that our borrowing rate will not increase in future
periods as a result of the transition from LIBOR to SOFR or another
alternative rate.
Provision for Income Taxes
For the three months ended June 30, 2022, we recognized an
income tax benefit of $5.4 million as compared to an income tax
benefit of $3.4 million for the same period in 2021. The tax
benefit recognized in the second quarter of 2022 increased as
compared to the same period in 2021 as a result of a higher pre-tax
loss in the recent three-month period.
For the six months ended June 30, 2022, due to our pre-tax loss
we recognized an income tax benefit of $10.6 million, which
included an additional benefit of $1.0 million related to the tax
effect of the vesting of restricted stock units at a market price
higher than the grant price. This compared to an income tax benefit
for the six month period ended June 30, 2021 of $1.5 million, which
included a charge of $0.6 million related to the tax effect of the
difference between the grant price value and the market price value
of restricted stock awards at the time of the vesting. Excluding
these benefits/charges, the effective tax rates for the six month
periods ended June 30, 2022 and 2021 would have been 23% and 25%,
respectively. The lower effective rate for the six months ended
June 30, 2022 is principally the result of a greater portion of
earnings expected to be generated in the relatively low tax
jurisdiction of the U.K. in 2022 as compared to 2021.
The effective tax rate can fluctuate as a result of variations
in the relative amounts of income earned and the tax rate imposed
in the tax jurisdictions in which we operate. Accordingly, the
effective tax rate in any particular period may not be indicative
of the effective tax rate in future periods.
Liquidity and Capital Resources
As of June 30, 2022, we had cash and cash equivalents of $64.5
million and term loan debt with an outstanding principal balance of
$271.9 million. The remaining principal balance of the term loan is
due at maturity on April 12, 2024 and may be repaid further in
advance of maturity without penalty.
During the second quarter of 2022, we repurchased in the open
market 648,534 shares of our common stock at an average price of
$12.06 per share, for a total cost of $7.8 million. Also during the
second quarter of 2022, we repurchased 202,392 restricted stock
units from employees at the time of vesting to settle tax
liabilities at an average price of $12.54 per share, for a total
cost of $2.5 million. In aggregate for the year, as of June 30,
2022, we have repurchased 1,913,611 shares of our common shares and
common stock equivalents at an average price of $15.78, for a total
cost of $30.2 million.
For the twelve month period through January 31, 2023, our Board
of Directors has authorized up to $70 million in purchases of
shares and share equivalents (via tax withholding on vesting of
restricted stock units). As of July 31, 2022, we have $44.6 million
remaining under that authorization. Going forward, we intend to
take a balanced approach to our use of available cash, allocating
funds for a combination of deleveraging, share repurchases and
dividends depending on such factors as our financial position,
capital requirements, results of operations and outlook, as well as
any legal, tax, regulatory or contractual constraints and any other
factors deemed relevant.
Dividend
The Board of Directors of Greenhill & Co., Inc. has declared
a dividend of $0.10 per share to be paid on September 28, 2022 to
common stockholders of record on September 14, 2022.
Investor Presentation
An updated investor presentation highlighting the Firm’s results
for the second quarter and other matters relevant for investors has
been posted on its website today (www.greenhill.com).
Earnings Call
Greenhill will host a conference call beginning at 4:30 p.m.
Eastern Time on Tuesday, August 2, 2022, accessible via telephone
and the internet. Scott L. Bok, Chairman and Chief Executive
Officer, will review the Firm’s second quarter 2022 financial
results and related matters. Following the review, there will be a
question and answer session.
Investors and analysts may participate in the live conference
call by dialing (888) 317 - 6003 (toll-free domestic) or (412) 317
- 6061 (international); passcode: 7425786. Please register at least
10 minutes before the conference call begins. The conference call
will also be accessible as an audio webcast through the Investor
Relations section of Greenhill’s website at www.greenhill.com. There is no charge to access
the call.
For those unable to listen to the live broadcast, a replay of
the call will be available for one month via telephone starting
approximately one hour after the call ends. The replay can be
accessed at (877) 344 - 7529 (toll-free domestic) or (412) 317 -
0088 (international); passcode: 3904687.
Greenhill & Co., Inc. is a leading independent investment
bank entirely focused on providing financial advice on significant
mergers, acquisitions, restructurings, financings and capital
raising to corporations, partnerships, institutions and governments
globally. It acts for clients located throughout the world from its
offices in New York, Chicago, Frankfurt, Hong Kong, Houston,
London, Madrid, Melbourne, Paris, San Francisco, Singapore,
Stockholm, Sydney, Tokyo and Toronto.
Cautionary Note Regarding Forward-Looking
Statements
The preceding discussion should be read in conjunction with our
condensed consolidated financial statements and the related notes
that appear below. We have made statements in this discussion that
are forward-looking statements. In some cases, you can identify
these statements by forward-looking words such as “may”, “might”,
“will”, “should”, “expect”, “plan”, “anticipate”, “believe”,
“estimate”, “intend”, “predict”, “potential” or “continue”, the
negative of these terms and other comparable terminology. These
forward-looking statements, which are subject to risks,
uncertainties and assumptions about us, may include projections of
our future financial performance, based on our growth strategies
and anticipated trends in our business. These statements are only
predictions based on our current expectations and projections about
future events. There are important factors that could cause our
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. In particular, you should consider the numerous risks
outlined under ‘‘Risk Factors” in our Report on Form 10-K for the
fiscal year 2021 as well as other public filings. We are under no
duty and we do not undertake any obligation to update or review any
of these forward-looking statements after the date on which they
are made, whether as a result of new information, future
developments or otherwise.
Greenhill & Co., Inc. and
Subsidiaries
Condensed Consolidated
Statements of Operations (Unaudited)
(In thousands, except share and
per share data)
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
2022
2021
2022
2021
Revenues
$
36,049
$
43,237
$
81,490
$
112,161
Operating Expenses
Employee compensation and benefits
43,163
39,791
90,012
87,083
Occupancy and equipment rental
4,439
4,600
8,842
8,997
Depreciation and amortization
625
793
1,245
1,580
Information services
2,336
2,327
4,636
4,685
Professional fees
2,231
1,704
4,197
3,900
Travel related expenses
1,549
516
2,669
708
Other operating expenses
2,579
2,695
5,290
7,172
Total operating expenses
56,922
52,426
116,891
114,125
Total operating income (loss)
(20,873
)
(9,189
)
(35,401
)
(1,964
)
Interest expense
3,258
3,078
6,013
6,286
Income (loss) before taxes
(24,131
)
(12,267
)
(41,414
)
(8,250
)
Provision (benefit) for taxes
(5,399
)
(3,442
)
(10,576
)
(1,509
)
Net income (loss)
$
(18,732
)
$
(8,825
)
$
(30,838
)
$
(6,741
)
Average shares outstanding:
Basic
18,237,538
19,447,717
18,330,545
19,560,997
Diluted
18,237,538
19,447,717
18,330,545
19,560,997
Earnings (loss) per share:
Basic
$
(1.03
)
$
(0.45
)
$
(1.68
)
$
(0.34
)
Diluted
$
(1.03
)
$
(0.45
)
$
(1.68
)
$
(0.34
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220802006076/en/
Patrick Suehnholz Director of Investor Relations Greenhill &
Co., Inc. (212) 389-1800
Grafico Azioni Greenhill (NYSE:GHL)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni Greenhill (NYSE:GHL)
Storico
Da Gen 2024 a Gen 2025
