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Medley Management Inc. Reports Third Quarter 2015 Results and Declares $0.20 Per Share Dividend

NEW YORK, Nov. 16, 2015 (GLOBE NEWSWIRE) -- Medley Management Inc. (NYSE:MDLY) today reported its financial results for the three months ended September 30, 2015.

Highlights

  • Total assets under management were $4.0 billion
  • Fee earning assets under management were $3.4 billion
  • Core Net Income Per Share was $0.01 for Q3 2015
  • U.S. GAAP net income attributable to Medley Management Inc. was $0.04 per share for Q3 2015
  • Declared $0.20 per share dividend for Q3 2015 payable on December 4, 2015
  • Raised over $500 million of new institutional AUM following quarter-end


“We are pleased with our performance at Medley over the past year. We now have over $4.5 billion of AUM at the firm, having raised over $500 million from institutional investors already this current quarter,” said Seth Taube, Co-Chief Executive Officer of Medley Management Inc. “For the September quarter, our overall financial results were impacted by significant market volatility. Despite the challenging market environment, our underlying business remains strong, and this same market volatility is creating an increasingly attractive backdrop to deploy capital.” 

Standalone Results of Operations for the Three Months Ended September 30, 2015

Management fees increased by 3%, or $0.5 million, to $18.1 million for the three months ended September 30, 2015 as compared to $17.6 million for the same period in 2014. This increase was offset by a reversal in performance fee revenue and a decrease in other income and fees to $(12.7) million for the three months ended September 30, 2015 compared to $6.2 million for the same period in 2014. The decrease of performance fee revenue was due primarily to the reversal of performance fees of our private funds as a result of a decrease in the asset values within their underlying portfolios. Total revenues decreased by 77%, or $18.4 million, to $5.4 million for the three months ended September 30, 2015 compared to $23.8 million for the same period in 2014. Exclusive of the impact of performance fees, total revenues would have decreased by 2%, or $0.4 million, to $20.0 million for the three months ended September 30, 2015 compared to $20.4 million for the same period in 2014.

Total expenses decreased by 53%, or $4.3 million, to $3.9 million for the three months ended September 30, 2015 compared to $8.2 million for the same period in 2014. The decrease was due primarily to reversals in performance fee compensation. Exclusive of performance fee compensation, total expenses would have decreased by 17%, or $1.6 million, to $7.5 million for the three months ended September 30, 2015 compared to $9.1 million for the same period in 2014.

Total other expense, net increased by $0.9 million to $2.8 million for the three months ended September 30, 2015 compared to $1.9 million for the same period in 2014. The increase was due primarily to a $0.8 million increase in other expenses.            

Pre-Tax Core Net Income decreased by $12.8 million, to $0.5 million for the three months ended September 30, 2015 compared to the same period in 2014. Core Net Income Per Share was $0.01 per share for the three months ended September 30, 2015, compared to $0.25 per share for the same period in 2014. Exclusive of the impact of performance fees1, Pre-Tax Core Net Income would have decreased by $1.3 million, to $8.3 million for the three months ended September 30, 2015 compared to the same period in 2014. Exclusive of the impact of performance fees1, Core Net Income Per Share would have been $0.16 per share for the three months ended September 30, 2015, compared to $0.18 per share for the same period in 2014.

Core EBITDA decreased by $12.6 million, to $2.8 million for the three months ended September 30, 2015 compared to $15.4 million for the same period in 2014. Exclusive of the impact of performance fees1, Core EBITDA would have decreased by $1.2 million, to $10.5 million for the three months ended September 30, 2015 compared to $11.7 million for the same period in 2014.

Standalone Results of Operations for the Nine Months Ended September 30, 2015

Management fees increased by 19%, or $9.1 million, to $56.6 million for the nine months ended September 30, 2015 compared to $47.5 million for the same period in 2014. This increase was offset by a decrease in performance fee revenue and other income and fees to $(5.1) million for the nine months ended September 30, 2015 compared to $18.7 million for the same period in 2014. Total revenues decreased by 22%, or $14.7 million, to $51.4 million for the nine months ended September 30, 2015 compared to $66.2 million for the same period in 2014. Exclusive of performance fees, total revenues would have increased by 13%, or $7.4 million, to $62.1 million for the nine months ended September 30, 2015 compared to $54.7 million for the same period in 2014.

Total expenses decreased by 14% or, $4.4 million, to $25.7 million for the nine months ended September 30, 2015 compared to $30.1 million for the same period in 2014. The variance was due primarily to reversals in performance fee compensation. Exclusive of performance fee compensation, total expenses would have increased by 9% or $2.5 million to $30.3 million for the nine months ended September 30, 2015 compared to $27.8 million for the same period in 2014.   

Total other expense, net increased by $2.3 million to $6.8 million for the nine months ended September 30, 2015 compared to $4.4 million for the same period in 2014. The increase was due primarily to a $3.0 million increase in interest expense.

Pre-Tax Core Net Income decreased by 18%, or $5.5 million, to $25.4 million for the nine months ended September 30, 2015 compared to $30.9 million for the same period in 2014.  Core Net Income Per Share decreased by 17% to $0.48 per share for the nine months ended September 30, 2015, compared to $0.58 per share for the same period in 2014. Exclusive of the impact of performance fees1, Pre-Tax Core Net Income would have increased by 20%, or $4.7 million, to $28.6 million for the nine months ended September 30, 2015 compared to $23.9 million for the same period in 2014. Exclusive of the impact of performance fees1, Core Net Income Per Share would have increased by 18% to $0.53 per share for the nine months ended September 30, 2015, compared to $0.45 per share for the same period in 2014.

Core EBITDA decreased by $2.5 million to $32.1 million for the nine months ended September 30, 2015 compared to $34.6 million for the same period in 2014. Exclusive of the impact of performance fees1, Core EBITDA would have increased by $7.7 million to $35.2 million for the nine months ended September 30, 2015 compared to $27.5 million for the same period in 2014.

Investor Contact       Media Contact
         
 Sam Anderson       Liz Bruce – Fitzroy Communications 
 212.759.0777       212.498.9197

_________________________

1 The impact of performance fees on our standalone income statement includes the impact of performance fee revenue, performance fee compensation and the portion of net income attributable to non-controlling interests in consolidated subsidiaries relating to performance fee revenue.

Medley has also provided additional information in its Third Quarter 2015 Earnings Presentation, which can be viewed at www.mdly.com under “Investor Relations – Events/Investor Presentations.”

Note: The financial results prior to September 29, 2014 reflect those of our operating subsidiaries, Medley LLC and Medley GP Holdings LLC and their consolidated subsidiaries prior to our initial public offering (“IPO”) and the related reorganization.

Key Performance Indicators:                        
                         
    For the Three Months Ended
  For the Nine Months Ended
    September 30,   September 30,
    (unaudited)   (unaudited)
    2015   2014   2015   2014
    (Amounts in thousands, except AUM, share and per share data)
Consolidated Financial Data:                        
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC   $   1,057     $   12,513     $   18,161     $   28,482  
                         
Standalone Data:                        
Pre-Tax Core Net Income (1)   $   540     $   13,297     $   25,434     $   30,925  
Core Net Income (1)       701         12,713         22,877         29,858  
Core EBITDA (2)       2,790         15,416         32,110         34,594  
Core Net Income Per Share (3)   $   0.01     $   0.25     $   0.48     $   0.58  
Core Net Income Margin (4)       5.7 %       31.8 %       28.2 %       26.6 %
Pro-Forma Weighted Average Shares Outstanding (5)       30,455,796         30,484,637         30,456,326         30,484,693  
                         
Other Data (at period end, in millions):                        
AUM   $   4,002     $   3,635     $   4,002     $   3,635  
Fee Earning AUM       3,401         3,036         3,401         3,036  
                                         
(1) Pre-Tax Core Net Income is calculated as Core Net Income before income taxes. Core Net Income reflects standalone net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC adjusted to exclude reimbursable expenses associated with the launch of funds, certain one-time severance costs and stock-based compensation associated with restricted stock units that were granted in connection with our IPO. In addition, for the three and nine months ended September 30, 2014, Core Net Income includes the pro-forma adjustment to reflect guaranteed payments to Medley LLC members as compensation expense, that, prior to our reorganization and IPO, were recorded as distributions from members’ capital. Please refer to the reconciliation of Core Net Income to Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC in Exhibit B for additional details. 
                                         
(2) Core EBITDA is calculated as Core Net Income before interest expense, income taxes and depreciation. Please refer to the reconciliation of Core EBITDA to Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC in Exhibit B for additional details.
                                         
(3) Core Net Income Per Share is calculated as Core Net Income, adjusted for the income tax effect of assuming that all of our pre-tax earnings are subject to federal, state and local corporate income taxes, divided by Pro-Forma Weighted Average Shares Outstanding (as defined below).  We assumed an effective corporate tax rate of 43.0% for all periods presented. Please refer to the calculation of Core Net Income Per Share in Exhibit B and C for additional details.
                                         
(4) Core Net Income Margin equals Core Net Income Per Share divided by total standalone revenue per share for the respective periods presented.
                                         
(5) The calculation of Pro-Forma Weighted Average Shares Outstanding assumes the conversion by the pre-IPO holders of 23,333,333 Medley LLC units for 23,333,333 shares of Class A common stock at the beginning of each period presented and, at the beginning of each period in 2014, the issuance of 6,000,000 shares of Class A common stock in connection with our IPO and the grant of 1,151,389 restricted stock units in connection with our IPO, adjusted for actual forfeitures and additional grants during the period.


Fee Earning AUM

The table below presents the quarter to date roll forward of our total fee earning AUM:
                         
                    % of AUM
  Permanent   Long-dated       Permanent   Long-dated
  Capital   Private Funds       Capital    Private Funds
  Vehicles    and SMAs   Total   Vehicles   and SMAs
  (Dollars in millions)        
Beginning balance, June 30, 2015 $    2,241     $    1,109     $    3,350       67 %     33 %
Commitments      143          21          164          
Capital reduction      (12 )        -          (12 )        
Distributions      (32 )        (18 )        (50 )        
Change in fund value      (34 )        (17 )        (51 )        
Ending balance, September 30, 2015 $    2,306     $    1,095     $    3,401       68 %     32 %


Total fee earning AUM increased by 2%, or $51 million, to $3.4 billion at September 30, 2015 compared to June 30, 2015. The permanent capital vehicles’ share of fee earning AUM increased to 68% at September 30, 2015 compared to 67% at June 30, 2015.

The table below presents the year-to-date roll forward of our total fee earning AUM:
                         
                    % of AUM
  Permanent   Long-dated       Permanent   Long-dated
  Capital   Private Funds       Capital    Private Funds
  Vehicles    and SMAs   Total   Vehicles   and SMAs
  (Dollars in millions)        
Beginning balance, December 31, 2014 $    2,047     $    1,011     $    3,058       67 %     33 %
Commitments      360          209          569          
Capital reduction      (22 )        (17 )        (39 )        
Distributions      (104 )        (86 )        (190 )        
Change in fund value      25          (22 )        3          
Ending balance, September 30, 2015 $    2,306     $    1,095     $    3,401       68 %     32 %


Total fee earning AUM increased by 11%, or $342 million, to $3.4 billion at September 30, 2015 compared to December 31, 2014. The permanent capital vehicles’ share of fee earning AUM increased to 68% at September 30, 2015 compared to 67% at December 31, 2014.

Dividend Declaration

On November 12, 2015, the Company’s Board of Directors declared a quarterly dividend of $0.20 per share of Class A common stock, for the third quarter 2015, payable on December 4, 2015, to shareholders of record of the Company’s Class A common stock as of the close of business on November 25, 2015.

Subsequent Event

Following quarter end, Medley executed investment management agreements with new and existing institutional investors, increasing AUM by in excess of $500 million. These commitments increased our assets under management to over $4.5 billion.

Conference Call and Webcast Information

We will host an earnings conference call and audio webcast at 10:00 a.m. (Eastern Time) on Monday, November 16, 2015 to discuss our third quarter 2015 financial results. 

All interested parties may participate in the conference call by dialing (877) 474-9504 approximately 5-10 minutes prior to the call. International callers should dial (857) 244-7557. Participants should reference Medley Management Inc. and the participant passcode of 77294151 when prompted. Following the call you may access a replay of the event via audio webcast. This conference call will be broadcast live over the Internet and can be accessed by all interested parties through the Company's website, http://www.mdly.com. To listen to the live call, please go to the Company's website at least 15 minutes prior to the start of the call to register and download any necessary audio software. For those who are not able to listen to the live broadcast, a replay will be available shortly after the call on the Company's website.

About Medley

Medley is an asset management firm offering yield solutions to retail and institutional investors. Medley's national direct origination franchise, with over 80 people, is a premier provider of capital to the middle market in the U.S. As of November 11, 2015, Medley had in excess of $4.5 billion of assets under management in two business development companies, Medley Capital Corporation (NYSE:MCC), the Sierra Income Corporation, as well as private investment vehicles. Over the past 13 years, we have invested in excess of $6.0 billion to help over 300 companies grow across 35 industries in North America. For additional information, please visit Medley Management Inc. at www.mdly.com.

Forward-Looking Statements

Statements included herein may contain "forward-looking statements". Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of assumptions, risks and uncertainties, which change over time. Actual results may differ materially from those anticipated in any forward-looking statements as a result of a number of factors, including those described from time to time in filings by the Company with the Securities and Exchange Commission, including those described in the section “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014. Except as required by law, the Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements made herein speak only as of the date of this press release.

This press release does not constitute an offer for any Medley fund.

Available Information

Medley Management Inc.’s filings with the Securities and Exchange Commission, press releases, earnings releases and other financial information are available at www.mdly.com.

Exhibit A.  Standalone Statements of Operations of Medley Management Inc. (Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)
                       
  For the Three Months Ended   For the Nine Months Ended
  September 30,   September 30,
  (unaudited)   (unaudited)
  2015   2014   2015   2014
  (Amounts in thousands)
Revenues                      
Management fees $    18,135     $    17,616     $    56,578     $    47,516  
Performance fees      (14,595 )        3,395          (10,627 )        11,471  
Other revenues and fees      1,891          2,787          5,496          7,183  
Total revenues      5,431          23,798          51,447          66,170  
                       
Expenses                      
Compensation and benefits      5,914          5,677          19,532          15,010  
Performance fee compensation      (3,660 )        (921 )        (4,578 )        2,237  
General, administrative and other expenses      1,626          3,458          10,756          12,821  
Total expenses      3,880          8,214          25,710          30,068  
                       
Other income (expense)                      
Dividend income      222          222          665          665  
Interest expense      (2,141 )        (2,016 )        (6,335 )        (3,380 )
Other expenses, net      (838 )        (87 )        (1,087 )        (1,707 )
Total other expense, net      (2,757 )        (1,881 )        (6,757 )        (4,422 )
Income before income taxes $    (1,206 )   $    13,703     $    18,980     $    31,680  
Provision for (benefit from) income taxes      (113 )        578          1,953          1,026  
Net income (loss)      (1,093 )        13,125          17,027          30,654  
Net income (loss) attributable to non-controlling interests in consolidated subsidiaries      (2,150 )        612          (1,134 )        2,172  
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC $    1,057     $    12,513     $    18,161     $    28,482  


Exhibit B.  Reconciliation of Standalone Core Net Income and Core EBITDA to Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC
                       
  For the Three Months Ended   For the Nine Months Ended
  September 30,   September 30,
  (unaudited)   (unaudited)
  2015   2014   2015   2014
  (Amounts in thousands)
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC $    1,057     $    12,513     $  18,161   $    28,482  
Reimbursable fund startup expenses (1)      (943 )        1,195        2,751        4,591  
Severance expense (1)      -          -        121        (5 )
IPO date award stock-based compensation (1)      587          74        1,844        74  
Adjustment for pre-IPO guaranteed payments to members (1)(2)      -          (1,069 )      -        (3,284 )
Core Net Income $    701     $    12,713     $  22,877   $    29,858  
Interest expense      2,141          2,016        6,335        3,380  
Income taxes      (161 )        584        2,557        1,067  
Depreciation and amortization      109          103        341        289  
Core EBITDA $    2,790     $    15,416     $  32,110   $    34,594  
                                   
(1) Amounts are presented net of income taxes.
 
(2) Represents a pro-forma adjustment to reflect guaranteed payments to Medley LLC members as compensation expense, that, prior to our reorganization and IPO, were treated as distributions from members’ capital.


Exhibit C. Calculation of Core Net Income Per Share (Standalone)
                       
  For the Three Months Ended   For the Nine Months Ended
  September 30,   September 30,
  (unaudited)   (unaudited)
  2015   2014   2015   2014
  (Amounts in thousands, except share and per share amounts)
Numerator                      
Core Net Income $    701     $    12,713     $    22,877     $    29,858  
Add: Income taxes      (161 )        584          2,557          1,067  
Pre-Tax Core Net Income      540          13,297          25,434          30,925  
                       
Denominator                      
Class A shares     6,000,211          6,000,000          6,000,071          6,000,000  
Conversion of LLC Units to Class A shares      23,333,333         23,333,333         23,333,333         23,333,333  
Restricted stock units (1)     1,122,252         1,151,304         1,122,922         1,151,360  
Pro-Forma Weighted Average Shares Outstanding (1)      30,455,796         30,484,637         30,456,326         30,484,693  
Pre-Tax Core Net Income Per Share $    0.02     $    0.44     $    0.84     $    1.01  
Less: corporate income taxes per share (2)      (0.01 )        (0.19 )        (0.36 )        (0.43 )
Core Net Income Per Share $    0.01     $    0.25     $    0.48     $    0.58  
                                       
(1) The calculation of Pro-Forma Weighted Average Shares Outstanding assumes the conversion by the pre-IPO holders of 23,333,333 Medley LLC units for 23,333,333 shares of Class A common stock at the beginning of each period presented and, at the beginning of each period in 2014, the issuance of 6,000,000 shares of Class A common stock in connection with our IPO and the grant of 1,151,389 restricted stock units in connection with our IPO, adjusted for actual forfeitures and additional grants during the period.
                                       
(2) Represents a per share adjustment for income taxes assuming that all of our standalone pre-tax earnings were subject to federal, state and local income taxes. We assumed an effective corporate tax rate of 43.0% for all periods presented.


Exhibit D. Condensed Consolidated Statements of Operations of Medley Management Inc. (Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)
                       
  For the Three Months Ended
  For the Nine Months Ended
  September 30,   September 30,
  (unaudited)   (unaudited)
  2015   2014   2015   2014
  (Amounts in thousands, except share and per share data)
Revenues                      
Management fees $    15,870     $    17,013     $    52,280     $    43,466  
Performance fees      (1,948 )        965          920          3,337  
Other revenues and fees      1,891          2,787          5,496          7,183  
Total revenues      15,813          20,765          58,696          53,986  
                       
Expenses                      
Compensation and benefits      5,914          5,677          19,532          15,010  
Performance fee compensation      (3,660 )        (921 )        (4,578 )        2,237  
Consolidated Funds expenses      542          296          1,969          1,129  
General, administrative and other expenses      1,626          3,458          10,756          12,821  
Total expenses      4,422          8,510          27,679          31,197  
                       
Other income (expense)                      
Dividend income      222          222          665          665  
Interest expense      (2,141 )        (2,016 )        (6,335 )        (3,380 )
Other expenses, net      (865 )        (268 )        (1,317 )        (1,586 )
Interest and other income of Consolidated Funds      21,843          17,880          61,739          51,476  
Interest expense of Consolidated Funds      (3,804 )        (2,524 )        (11,418 )        (5,586 )
Net realized gain (loss) on investments of Consolidated Funds      (31,965 )        (499 )        (31,013 )        789  
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds      16,011          (2,369 )        13,616          (9,540 )
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds      1,610          1,300          1,112          103  
Total other income, net      911          11,726          27,049          32,941  
Income before income taxes      12,302          23,981          58,066          55,730  
Provision for (benefit from) income taxes      (77 )        923          2,864          2,174  
Net income      12,379          23,058          55,202          53,556  
Net income attributable to non-controlling interests in Consolidated Funds      13,472          9,933          38,175          22,902  
Net income (loss) attributable to non-controlling interests in consolidated subsidiaries      (2,150 )        612          (1,134 )        2,172  
Net income attributable to non-controlling interests in Medley LLC      785     $    12,135          15,576     $    28,104  
Net income attributable to Medley Management Inc. $    272          378     $    2,585          378  
                       
Net income per Class A common stock:                      
Basic $    0.04     $    0.05(1)     $    0.38     $    0.05(1)  
Diluted $    0.04     $    0.05(1)     $    0.38     $    0.05(1)  
Weighted average shares - Basic and Diluted      6,000,211         6,000,000         6,000,071         6,000,000  
 
(1) Based on net income attributed to Medley Management Inc. from September 29, 2014 to September 30, 2014


Exhibit E.  Condensed Consolidated Balance Sheets of Medley Management Inc.
           
  As of    
  September 30,   As of
  2015   December 31,
  (unaudited)    2014
  (Amounts in thousands)
Assets          
Cash and cash equivalents $    63,754     $    87,206  
Investments, at fair value      10,884          9,901  
Management fees receivable      14,800          15,173  
Performance fees receivable      6,493          5,573  
Other assets      13,966          9,230  
           
Assets of Consolidated Funds:          
Cash and cash equivalents      105,122          38,111  
Investments, at fair value      778,971          734,870  
Interest and dividends receivable      6,124          6,654  
Other assets      3,803          3,681  
Total assets $    1,003,917     $    910,399  
           
Liabilities and Equity          
Loans payable $    102,697     $    103,057  
Accounts payable, accrued expenses and other liabilities      20,739          27,583  
Performance fee compensation payable      5,759          11,807  
           
Liabilities of Consolidated Funds:          
Accounts payable, accrued expenses and other liabilities      2,199          5,767  
Secured borrowings      134,047          141,135  
Total liabilities      265,441          289,349  
           
Equity          
Class A Common Stock      60          60  
Class B Common Stock      -          -  
Capital deficit      (8 )        (2,384 )
Retained earnings      108          272  
Total stockholders' equity (deficit), Medley Management Inc.      160          (2,052 )
Non-controlling interests in Consolidated Funds      755,827          625,548  
Non-controlling interests in consolidated subsidiaries      (708 )        1,526  
Non-controlling interests in Medley LLC      (16,803 )        (3,972 )
Total equity      738,476          621,050  
Total liabilities and equity $    1,003,917     $    910,399  


Exhibit F.  Condensed Consolidating Statements of Operations and Consolidated Balance Sheets of Medley Management Inc. (Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC) 
                       
  For the Three Months Ended September 30, 2015
   (unaudited)
      Consolidated        
  Standalone   Funds   Eliminations   Consolidated
  (Amounts in thousands)
Revenues:                      
Management fees $    18,135     $    -     $    (2,265 )   $    15,870  
Performance fees      (14,595 )        -          12,647          (1,948 )
Other revenues and fees      1,891          -          -          1,891  
Total revenues      5,431          -          10,382          15,813  
                       
Expenses:                      
Compensation and benefits      5,914          -          -          5,914  
Performance fee compensation      (3,660 )        -          -          (3,660 )
Consolidated Funds expenses      -          2,807          (2,265 )        542  
General, administrative and other expenses      1,626          -          -          1,626  
Total expenses      3,880          2,807          (2,265 )        4,422  
                       
Other income (expense):                      
Dividend income      222          -          -          222  
Interest expense      (2,141 )        -          -          (2,141 )
Other income (expenses), net      (838 )        -          (27 )        (865 )
Interest and other income of Consolidated Funds      -          21,843          -          21,843  
Interest expense of Consolidated Funds      -          (3,804 )        -          (3,804 )
Net realized gain (loss) on investments of Consolidated Funds      -          (31,965 )        -          (31,965 )
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds      -          16,011          -          16,011  
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds      -          1,610          -          1,610  
Total other income (expense), net      (2,757 )        3,695          (27 )        911  
Income (loss) before income taxes      (1,206 )        888          12,620          12,302  
Provision for (benefit from) income taxes      (113 )        36          -          (77 )
Net income (loss)      (1,093 )        852          12,620          12,379  
Net income attributable to non-controlling interests in Consolidated Funds      -          -          13,472          13,472  
Net income (loss) attributable to non-controlling interests in consolidated subsidiaries      (2,150 )        -          -          (2,150 )
Net income attributable to non-controlling interests in Medley LLC      785          -          -          785  
Net income attributable to Medley Management Inc. $    272     $    852     $    (852 )   $    272  


  For the Nine Months Ended September 30, 2015
  (unaudited)
      Consolidated        
  Standalone   Funds   Eliminations   Consolidated
  (Amounts in thousands)
Revenues:                      
Management fees $    56,578     $    -     $    (4,298 )   $    52,280  
Performance fees      (10,627 )        -          11,547          920  
Other revenues and fees      5,496          -          -          5,496  
Total revenues      51,447          -          7,249          58,696  
                       
Expenses:                      
Compensation and benefits      19,532          -          -          19,532  
Performance fee compensation      (4,578 )        -          -          (4,578 )
Consolidated Funds expenses      -          6,267          (4,298 )        1,969  
General, administrative and other expenses      10,756          -          -          10,756  
Total expenses      25,710          6,267          (4,298 )        27,679  
                       
Other income (expense):                      
Dividend income      665          -          -          665  
Interest expense      (6,335 )        -          -          (6,335 )
Other income (expenses), net      (1,087 )        -          (230 )        (1,317 )
Interest and other income of Consolidated Funds      -          61,739          -          61,739  
Interest expense of Consolidated Funds      -          (11,418 )        -          (11,418 )
Net realized gain (loss) on investments of Consolidated Funds      -          (31,013 )        -          (31,013 )
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds      -          13,616          -          13,616  
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds      -          1,112          -          1,112  
Total other income (expense), net      (6,757 )        34,036          (230 )        27,049  
Income before income taxes      18,980          27,769          11,317          58,066  
Provision for income taxes      1,953          911          -          2,864  
Net income      17,027          26,858          11,317          55,202  
Net income attributable to non-controlling interests in Consolidated Funds      -          -          38,175          38,175  
Net income (loss) attributable to non-controlling interests in consolidated subsidiaries      (1,134 )        -          -          (1,134 )
Net income attributable to non-controlling interests in Medley LLC      15,576          -          -          15,576  
Net income attributable to Medley Management Inc. $    2,585     $    26,858     $    (26,858 )   $    2,585  


  For the Three Months Ended September 30, 2014
  (unaudited)
      Consolidated        
  Standalone   Funds   Eliminations   Consolidated
  (Amounts in thousands)
Revenues:                      
Management fees $    17,616     $    -     $    (603 )   $    17,013  
Performance fees      3,395          -          (2,430 )        965  
Other revenues and fees      2,787          -          -          2,787  
Total revenues      23,798          -          (3,033 )        20,765  
                       
Expenses:                      
Compensation and benefits      5,677          -          -          5,677  
Performance fee compensation      (921 )        -          -          (921 )
Consolidated Funds expenses      -          899          (603 )        296  
General, administrative and other expenses      3,458          -          -          3,458  
Total expenses      8,214          899          (603 )        8,510  
                       
Other income (expense):                      
Dividend income      222          -          -          222  
Interest expense      (2,016 )        -          -          (2,016 )
Other income (expenses), net      (87 )        -          (181 )        (268 )
Interest and other income of Consolidated Funds      -          17,880          -          17,880  
Interest expense of Consolidated Funds      -          (2,524 )        -          (2,524 )
Net realized gain (loss) on investments of Consolidated Funds      -          (499 )        -          (499 )
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds      -          (2,369 )        -          (2,369 )
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds      -          1,300          -          1,300  
Total other income (expense), net      (1,881 )        13,788          (181 )        11,726  
Income before income taxes      13,703          12,889          (2,611 )        23,981  
Provision for income taxes      578          345          -          923  
Net income      13,125          12,544          (2,611 )        23,058  
Net income attributable to non-controlling interests in Consolidated Funds      -          -          9,933          9,933  
Net income attributable to non-controlling interests in consolidated subsidiaries      612          -          -          612  
Net income attributable to non-controlling interests in Medley LLC      12,135          -          -          12,135  
Net income attributable to Medley LLC $    378     $    12,544     $    (12,544 )   $    378  



  For the Nine Months Ended September 30, 2014
  (unaudited)
      Consolidated        
  Standalone   Funds   Eliminations   Consolidated
  (Amounts in thousands)
Revenues:                      
Management fees $    47,516     $    -     $    (4,050 )   $    43,466  
Performance fees      11,471          -          (8,134 )        3,337  
Other revenues and fees      7,183          -          -          7,183  
Total revenues      66,170          -          (12,184 )        53,986  
                       
Expenses:                      
Compensation and benefits      15,010          -          -          15,010  
Performance fee compensation      2,237          -          -          2,237  
Consolidated Funds expenses      -          5,179          (4,050 )        1,129  
General, administrative and other expenses      12,821          -          -          12,821  
Total expenses      30,068          5,179          (4,050 )        31,197  
                       
Other income (expense):                      
Dividend income      665          -          -          665  
Interest expense      (3,380 )        -          -          (3,380 )
Other income (expenses), net      (1,707 )        -          121          (1,586 )
Interest and other income of Consolidated Funds      -          51,476          -          51,476  
Interest expense of Consolidated Funds      -          (5,586 )        -          (5,586 )
Net realized gain (loss) on investments of Consolidated Funds      -          789          -          789  
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds      -          (9,540 )        -          (9,540 )
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds      -          103          -          103  
Total other income (expense), net      (4,422 )        37,242          121          32,941  
Income before income taxes      31,680          32,063          (8,013 )        55,730  
Provision for income taxes      1,026          1,148          -          2,174  
Net income      30,654          30,915          (8,013 )        53,556  
Net income attributable to non-controlling interests in Consolidated Funds      -          -          22,902          22,902  
Net income attributable to non-controlling interests in consolidated subsidiaries      2,172          -          -          2,172  
Net income attributable to non-controlling interests in Medley LLC      28,104          -          -          28,104  
Net income attributable to Medley LLC $    378     $    30,915     $    (30,915 )   $    378  


  As of September 30, 2015
  (unaudited)
      Consolidated        
  Standalone   Funds   Eliminations   Consolidated
  (Amounts in thousands)
Assets                      
Cash and cash equivalents $    63,754     $  -   $    -     $    63,754  
Investments, at fair value      11,114        -        (230 )        10,884  
Management fees receivable      15,215        -        (415 )        14,800  
Performance fees receivable      6,493        -        -          6,493  
Other assets      15,268        -        (1,302 )        13,966  
                       
Assets of Consolidated Funds:                      
Cash and cash equivalents      -        105,122        -          105,122  
Investments, at fair value      -        778,971        -          778,971  
Interest and dividends receivable      -        6,124        -          6,124  
Other assets      -        3,803        -          3,803  
Total assets $    111,844     $  894,020   $    (1,947 )   $    1,003,917  
                       
Liabilities and equity                      
Loans payable $    102,697     $  -   $    -     $    102,697  
Accounts payable, accrued expenses and other liabilities      20,739        -        -          20,739  
Performance fee compensation payable      5,759        -        -          5,759  
                       
Liabilities of Consolidated Funds:                      
Accounts payable, accrued expenses and other liabilities      -        3,916        (1,717 )        2,199  
Secured borrowings      -        134,047        -          134,047  
Total liabilities      129,195        137,963        (1,717 )        265,441  
                       
Equity                      
Class A Common Stock      60        -        -          60  
Class B Common Stock      -        -        -          -  
Capital deficit      (8 )      -        -          (8 )
Retained earnings      108        -        -          108  
Total stockholders' equity (deficit), Medley Management Inc.      160        -        -          160  
Non-controlling interests in Consolidated Funds      -        -        755,827          755,827  
Non-controlling interests in consolidated subsidiaries      (708 )      -        -          (708 )
Non-controlling interests in Medley LLC      (16,803 )      -        -          (16,803 )
Members' equity of consolidated funds      -        756,057        (756,057 )        -  
Total (deficit) equity      (17,351 )      756,057        (230 )        738,476  
Total liabilities and equity $    111,844     $  894,020   $    (1,947 )   $    1,003,917  


  As of December 31, 2014
      Consolidated        
  Standalone   Funds   Eliminations   Consolidated
  (Amounts in thousands)
Assets                      
Cash and cash equivalents $    87,206     $  -   $    -     $    87,206  
Investments, at fair value      22,143        -        (12,242 )        9,901  
Management fees receivable      15,173        -        -          15,173  
Performance fees receivable      5,573        -        -          5,573  
Other assets      9,230        -        -          9,230  
                       
Assets of Consolidated Funds:                      
Cash and cash equivalents      -        38,111        -          38,111  
Investments, at fair value      -        734,870        -          734,870  
Interest and dividends receivable      -        6,654        -          6,654  
Other assets      -        5,057        (1,376 )        3,681  
Total assets $    139,325     $  784,692   $    (13,618 )   $    910,399  
                       
Liabilities and equity                      
Loans payable $    103,057     $  -   $    -     $    103,057  
Accounts payable, accrued expenses and other liabilities      28,959        -        (1,376 )        27,583  
Performance fee compensation payable      11,807        -        -          11,807  
                       
Liabilities of Consolidated Funds:                      
Accounts payable, accrued expenses and other liabilities      -        5,767        -          5,767  
Secured borrowings      -        141,135        -          141,135  
Total liabilities      143,823        146,902        (1,376 )        289,349  
                       
Equity                      
Class A Common Stock      60        -        -          60  
Class B Common Stock      -        -        -          -  
Capital deficit      (2,384 )      -        -          (2,384 )
Retained earnings      272        -        -          272  
Total stockholders' equity (deficit), Medley Management Inc.      (2,052 )      -        -          (2,052 )
Non-controlling interests in Consolidated Funds      -        -        625,548          625,548  
Non-controlling interests in consolidated subsidiaries      1,526        -        -          1,526  
Non-controlling interests in Medley LLC      (3,972 )      -        -          (3,972 )
Members' equity of consolidated funds      -        637,790        (637,790 )        -  
Total (deficit) equity      (4,498 )      637,790        (12,242 )        621,050  
Total liabilities and equity $    139,325     $  784,692   $    (13,618 )   $    910,399  

 

Medley Management Inc