Medley Management Inc. Reports Fourth Quarter and Full Year 2015 Results

NEW YORK, March 18, 2016 (GLOBE NEWSWIRE) -- Medley Management Inc. (NYSE:MDLY) today reported its financial results for its fourth quarter and year ended December 31, 2015.

Highlights

  • Total assets under management were $4.8 billion as of December 31, 2015 and over $5 billion as of January 25, 2016

  • Fee earning assets under management were $3.3 billion as of December 31, 2015

  • Core Net Income Per Share was $0.14 for Q4 2015 and $0.61 for the year ended December 31, 2015

  • U.S. GAAP net income attributable to Medley Management Inc. was $0.08 per share for Q4 2015 and $0.46 per share for the year ended December 31, 2015

“2015 was a strong growth year for Medley. AUM at the firm is now over $5 billion, and we have substantial dry powder to take advantage of opportunities in the market. Combined with our announced and intended product expansion, this positions us well as we look forward in 2016,” said Brook Taube, CEO of Medley.

Results of Operations for the Year Ended December 31, 2015

Management fees increased by 15%, or $9.9 million, to $75.7 million for the year ended December 31, 2015 compared to standalone management fees for the same period in 2014. This increase was offset by a reversal in performance fee revenue of our private funds of $15.7 million for the year ended December 31, 2015 as a result of a decrease in the asset values within their underlying portfolios. Total revenues decreased by 18%, or $15.1 million, to $67.4 million for the year ended December 31, 2015 compared to total standalone revenues for the same period in 2014. Exclusive of performance fees, total revenues would have increased by 11%, or $8.5 million, to $83.1 million compared to total standalone revenues for the same period in 2014.

Total expenses increased by 1% or, $0.5 million, to $35.6 million for the year ended December 31, 2015 compared to total standalone expenses for the same period in 2014. The variance was due primarily to an increase in compensation and benefits expenses, partly offset by a reversal in performance fee compensation.  Exclusive of performance fee compensation, total expenses would have increased by 19%, or $7.0 million, to $43.6 million compared to total standalone expenses for the same period in 2014.

Total other expense, net increased by $2.5 million to $9.2 million for the year ended December 31, 2015 compared to total standalone other expense, net for the same period in 2014.  The increase was due primarily to an increase in interest expense.

Pre-Tax Core Net Income decreased by 22%, or $9.2 million, to $32.8 million for the year ended December 31, 2015 compared to the same period in 2014.  Core Net Income Per Share was $0.61 for the year ended December 31, 2015, compared to $0.79 for the same period in 2014. Exclusive of the impact of performance fees1, Pre-Tax Core Net Income would have increased by $3.1 million, to $37.2 million for the year ended December 31, 2015 compared to the same period in 2014, and Core Net Income Per Share would have been $0.70 for the year ended December 31, 2015, compared to $0.64 for the same period in 2014.

Core EBITDA decreased by $6.2 million to $41.7 million for the year ended December 31, 2015 compared to the same period in 2014. Exclusive of the impact of performance fees1, Core EBITDA would have increased by $6.1 million, to $46.2 million for the year ended December 31, 2015, compared to the same period in 2014.

Results of Operations for the Three Months Ended December 31, 2015

Management fees increased by 5%, or $0.8 million, to $19.1 million for the three months ended December 31, 2015 as compared to standalone management fees for the same period in 2014. This increase was offset by a reversal in performance fee revenue of our private funds of $5.1 million for the three months ended December 31, 2015 as a result of a decrease in the asset values within their underlying portfolios. Total revenues decreased by 2%, or $0.4 million, to $16.0 million for the three months ended December 31, 2015 compared to total standalone revenues for the same period in 2014. Exclusive of the impact of performance fees, total revenues would have increased by 6%, or $1.1 million, to $21.0 million compared to total standalone revenues for the same period in 2014.

Total expenses increased by $4.8 million, to $9.8 million for the three months ended December 31, 2015 compared to total standalone expenses for the same period in 2014. The increase was due primarily to an increase in general, administrative and other expenses as a result of higher expense support agreement expenses related to Sierra Income Corporation, one of our permanent capital vehicles. Exclusive of performance fee compensation, total expenses would have increased by 51%, or $4.5 million, to $13.3 million compared to total standalone expenses for the same period in 2014.

Total other expense, net increased by $0.2 million to $2.5 million for the three months ended December 31, 2015 compared to total standalone other expense, net for the same period in 2014.

Pre-Tax Core Net Income decreased by $3.7 million, to $7.4 million for the three months ended December 31, 2015 compared to the same period in 2014.  Core Net Income Per Share was $0.14 for the three months ended December 31, 2015, compared to $0.21 for the same period in 2014. Exclusive of the impact of performance fees1, Pre-Tax Core Net Income would have decreased by $1.7 million, to $8.7 million for the three months ended December 31, 2015 compared to the same period in 2014 and Core Net Income Per Share would have been $0.16 for the three months ended December 31, 2015, compared to $0.19 for the same period in 2014.

Core EBITDA decreased by $3.8 million, to $9.6 million for the three months ended December 31, 2015 compared to the same period in 2014. Exclusive of the impact of performance fees1, Core EBITDA would have decreased by $1.7 million, to $10.9 million for the three months ended December 31, 2015, compared to the same period in 2014.

Notes:

During fiscal year 2015, we adopted new accounting guidance which resulted in the deconsolidation of our Consolidated Funds, effective January 1, 2015. Accordingly, our results of operations for the three months and year ended December 31, 2015 represent our Consolidated Statements of Operations in accordance with U.S. GAAP. See Exhibit E for a reconciliation of our standalone results for the three months and year ended December 31, 2014, which have been adjusted to reverse the effect of consolidation of Consolidated Funds, to the results of operations for such periods.

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.

Investor Contact

Sam Anderson
Medley Management Inc
212.759.0777

Media Contact

Liz Bruce
Fitzroy Communications
212.498.9197

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

Key Performance Indicators:

 
    For the Three Months Ended
   
    December 31,   For the Years Ended
    (unaudited)   December 31,
    2015   2014   2015   2014
    (Amounts in thousands, except AUM, share and per share amounts)
Consolidated Financial Data:                        
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC   $    3,356     $    9,268     $    21,517     $    37,750  
                         
Non-GAAP Data:                        
Pre-Tax Core Net Income (1)   $    7,364     $    11,111     $    32,798     $    42,036  
Core Net Income (1)        6,870          11,024          29,747          40,882  
Core EBITDA (2)        9,611          13,363          41,721          47,957  
Core Net Income Per Share (3)   $    0.14     $    0.21     $    0.61     $    0.79  
Core Net Income Margin (4)       26.3 %       38.6 %       27.7 %       29.2 %
Pro-Forma Weighted Average Shares Outstanding (5)        30,470,736          30,511,366          30,459,958          30,491,417  
                         
Other Data (at period end, in millions):                        
AUM   $    4,779     $    3,682     $    4,779     $    3,682  
Fee Earning AUM        3,302          3,058          3,302          3,058  
 
(1)  Pre-Tax Core Net Income is calculated as Core Net Income before income taxes. Core Net Income reflects net income attributable to Medley Management Inc. and net income attributed to non-controlling interests in Medley LLC adjusted to exclude reimbursable expenses associated with the launch of funds, certain one-time severance costs, stock-based compensation associated with restricted stock units that were granted in connection with our IPO and, for periods prior to 2015, adjustments to reverse the effect of the consolidation of Consolidated Funds. In addition, for the year ended December 31, 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 and Exhibit E 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 and Exhibit E 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 were 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 C and Exhibit E for additional details.
 
(4)  Core Net Income Margin equals Core Net Income Per Share divided by total revenue per share and, for periods prior to 2015, total standalone revenue per share.
 
(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, vesting and additional grants during the period. Please refer to Exhibit C for additional details.
 

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, September 30, 2015 $    2,306     $    1,095     $    3,401       68 %     32 %
Commitments      23          12          35          
Capital reduction      (1 )        -          (1 )        
Distributions      (33 )        (9 )        (42 )        
Change in fund value      (57 )        (34 )        (91 )        
Ending balance, December 31, 2015 $    2,238     $    1,064     $    3,302       68 %     32 %
 

Total fee earning AUM decreased by 3%, or $99 million, to $3.3 billion at December 31, 2015 compared to September 30, 2015. The permanent capital vehicles’ share of fee earning AUM remained comparable at 68% at December 31, 2015 compared to September 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)        
Ending balance, December 31, 2014 $    2,047     $    1,011     $    3,058       67 %     33 %
Commitments      383          221          604          
Capital reduction      (23 )        (17 )        (40 )        
Distributions      (137 )        (95 )        (232 )        
Change in fund value      (32 )        (56 )        (88 )        
Ending balance, December 31, 2015 $    2,238     $    1,064     $    3,302       68 %     32 %
 

Total fee earning AUM increased by 8%, or $243 million, to $3.3 billion at December 31, 2015 compared to December 31, 2014. The permanent capital vehicles’ share of fee earning AUM increased to 68% at December 31, 2015 compared to 67% at December 31, 2014.

Conference Call and Webcast Information

We will host an earnings conference call and audio webcast at 10:00 a.m. (Eastern Time) on Friday, March 18, 2016 to discuss our fourth quarter and full year 2015 financial results.

All interested parties may participate in the conference call by dialing (877) 299-4454 approximately 5-10 minutes prior to the call. International callers should dial (617) 597-5447. Participants should reference Medley Management Inc. and the participant passcode of 77619245 when prompted. Following the call you may access a replay of the event via audio webcast. This conference call will also be broadcast live over the Internet and can be accessed by all interested parties through the Investor Relations section of our website, http://www.mdly.com. Presentation slides to be referred to on the conference call will also be available on the Investor Relations section of our website. 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 January 25, 2016, Medley had over $5 billion of assets under management in two business development companies, Medley Capital Corporation (NYSE:MCC) and Sierra Income Corporation, as well as private investment vehicles. Over the past 13 years, we have provided in excess of $6 billion of capital to over 300 companies 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, 2015. 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.

Non-GAAP Financial Measures

We make reference to certain non-GAAP financial measures in this press release. A reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP is contained in the tables attached hereto.

Prior to our adoption of new accounting guidance on January 1, 2015, we were required to consolidate certain funds in our financial results. Information derived from our consolidated balance sheets and statements of operations for periods prior to 2015 have been adjusted to eliminate the consolidating effects of certain funds on our consolidated balance sheets and statements of operations and are referred to as “standalone financial information” or information presented on a “standalone basis.” During such periods, revenues from management fees, performance fees and investment income on a standalone basis were greater than those presented on a combined and consolidated basis in accordance with U.S. GAAP because certain revenues received from these consolidated funds were eliminated in consolidation. Furthermore, expenses on a standalone basis were lower than related amounts presented on a combined and consolidated basis in accordance with U.S. GAAP due to the exclusion of the expenses of the consolidated funds.

Non-GAAP measures used by management include Pre-Tax Core Net Income, Core Net Income, Core EBITDA, Core Net Income Per Share and Core Net Income Margin.  Management uses these non-GAAP measures to assess the performance of our business and believes that these non-GAAP measures also provide investors with useful information to evaluate our performance.  These non-GAAP measures supplement and should be considered in addition to and not in lieu of our consolidated results of operations calculated and presented in accordance with U.S. GAAP.

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. Consolidated Statements of Operations of Medley Management Inc. (Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

Our consolidated financial statements have been prepared on substantially the same basis for all historical periods presented; however, our Consolidated Funds are not the same entities in all periods shown due to the early adoption of ASU 2015-02, Consolidation – Principal versus Agent Analysis, which resulted in the deconsolidation of our Consolidated Funds effective January 1, 2015. For the periods in 2014, the consolidation of these funds had the impact of increasing interest and other income of Consolidated Funds, interest and other expenses of Consolidated Funds and net investment gains (losses) of Consolidated Funds, but had no net effect on the net income attributable to our consolidated results.

 
  For the Three Months Ended
   
  December 31,   For the Years Ended
  (unaudited)   December 31,
  2015   2014   2015   2014
                       
  (Amounts in thousands, except share and per share data)
Revenues                      
Management fees $    19,097     $    17,786     $    75,675     $    61,252  
Performance fees      (5,058 )        (1,287 )        (15,685 )        2,050  
Other revenues and fees      1,940          1,688          7,436          8,871  
Total revenues      15,979          18,187          67,426          72,173  
                       
Expenses                      
Compensation and benefits      7,236          5,312          26,768          20,322  
Performance fee compensation      (3,471 )        (3,780 )        (8,049 )        (1,543 )
Consolidated Funds expenses      -          541          -          1,670  
General, administrative and other expenses      6,080          3,491          16,836          16,312  
Total expenses      9,845          5,564          35,555          36,761  
                       
Other income (expense)                      
Dividend income      221          221          886          886  
Interest expense      (2,134 )        (2,140 )        (8,469 )        (5,520 )
Other expenses, net      (554 )        (187 )        (1,641 )        (1,773 )
Interest and other income of Consolidated Funds      -          19,992          -          71,468  
Interest expense of Consolidated Funds      -          (4,365 )        -          (9,951 )
Net realized gain (loss) on investments of Consolidated Funds      -          -          -          789  
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds      -          (11,017 )        -          (20,557 )
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds      -          1,071          -          1,174  
Total other income, net      (2,467 )        3,575          (9,224 )        36,516  
Income before income taxes      3,667          16,198          22,647          71,928  
Provision for (benefit from) income taxes      62          354          2,015          2,528  
Net income      3,605          15,844          20,632          69,400  
Net income attributable to non-controlling interests in Consolidated Funds      -          6,815          -          29,717  
Net income (loss) attributable to non-controlling interests in consolidated subsidiaries      249          (239 )        (885 )        1,933  
Net income attributable to non-controlling interests in Medley LLC      2,830          7,951          18,406          36,055  
Net income attributable to Medley Management Inc. $    526     $    1,317     $    3,111     $    1,695  
                       
Net income per Class A common stock:                      
Basic $    0.08     $    0.19     $    0.46     $    0.24  
Diluted $    0.08     $    0.19     $    0.46     $    0.24  
Weighted average shares - Basic and Diluted  6,009,400    6,000,000    6,002,422    6,000,000
 

Exhibit B.  Reconciliation of 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    
  December 31,   For the Year Ended
  (unaudited)   December 31,
  2015   2014   2015   2014
  (Amounts in thousands)
                       
Net income attributable to Medley Management Inc. $  526   $  1,317   $  3,111   $    1,695  
Net income attributable to non-controlling interests in Medley LLC    2,830      7,951      18,406        36,055  
Net income attributable to Medley Management Inc. and non-controlling interests in Medley LLC    3,356      9,268      21,517        37,750  
Reimbursable fund startup expenses (1)    2,914      1,008      5,665        5,599  
Severance expense (1)    148      -      269        (5 )
IPO date award stock-based compensation (1)    452      748      2,296        822  
Adjustment for pre-IPO guaranteed payments to members (1)(2)    -      -      -        (3,284 )
Core Net Income $  6,870   $  11,024   $  29,747   $    40,882  
Interest expense    2,134      2,140      8,469        5,520  
Income taxes    494      87      3,051        1,154  
Depreciation and amortization    113      112      454        401  
Core EBITDA $  9,611   $  13,363   $  41,721   $    47,957  
 
(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

 
  For the Three Months Ended    
  December 31,   For the Years Ended
  (unaudited)   December 31,
  2015   2014   2015   2014
  (Amounts in thousands, except share and per share amounts)
Numerator                      
Core Net Income $    6,870     $    11,024     $    29,747     $    40,882  
Add: Income taxes      494          87          3,051          1,154  
Pre-Tax Core Net Income      7,364          11,111          32,798          42,036  
                       
Denominator                      
Class A shares     6,009,400         6,000,000         6,002,422         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)     1,128,003         1,178,033         1,124,203         1,158,084  
Pro-Forma Weighted Average Shares Outstanding (1)     30,470,736         30,511,366         30,459,958         30,491,417  
Pre-Tax Core Net Income Per Share $    0.24     $    0.37     $    1.08     $    1.38  
Less: corporate income taxes per share (2)      (0.10 )        (0.16 )        (0.47 )        (0.59 )
Core Net Income Per Share $    0.14     $    0.21     $    0.61     $    0.79  
 
(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, vesting and additional grants during the period.
 
(2)  Represents a per share adjustment for income taxes assuming that all of our 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.  Consolidated Balance Sheets of Medley Management Inc.

 
  As of December 31,
   2015    2014
  (Amounts in thousands)
Assets          
Cash and cash equivalents $    71,688     $    87,206  
Investments, at fair value      16,360          9,901  
Management fees receivable      16,172          15,173  
Performance fees receivable      2,518          5,573  
Other assets      14,727          9,230  
           
Assets of Consolidated Funds:          
Cash and cash equivalents      -          38,111  
Investments, at fair value      -          734,870  
Interest and dividends receivable      -          6,654  
Other assets      -          3,681  
Total assets $    121,465     $    910,399  
           
Liabilities and Equity          
Loans payable $    102,583     $    103,057  
Accounts payable, accrued expenses and other liabilities      34,746          27,583  
Performance fee compensation payable      1,823          11,807  
           
Liabilities of Consolidated Funds:          
Accounts payable, accrued expenses and other liabilities      -          5,767  
Secured borrowings      -          141,135  
Total liabilities      139,152          289,349  
           
Equity          
Class A Common Stock      60          60  
Class B Common Stock      -          -  
Additional paid in capital (capital deficit)      631          (2,384 )
Retained earnings (accumulated deficit)      (730 )        272  
Total stockholders' equity (deficit), Medley Management Inc.      (39 )        (2,052 )
Non-controlling interests in Consolidated Funds      -          625,548  
Non-controlling interests in consolidated subsidiaries      (459 )        1,526  
Non-controlling interests in Medley LLC      (17,189 )        (3,972 )
Total equity (deficit)      (17,687 )        621,050  
Total liabilities and equity $    121,465     $    910,399  
 

Exhibit E.  Consolidating Statements of Operations and Consolidated Balance Sheet of Medley Management Inc. (Prior to September 29, 2014, Medley LLC and Medley GP Holdings LLC)

The following financial information illustrates the consolidating effects of the Consolidated Funds on our financial position as of December 31, 2014, and on our results from operations for the three months and year ended December 31, 2014. The financial position and results of operations for Medley Management Inc., adjusted to eliminate the consolidating effects of the Consolidated Funds, are presented in the tables under the “Standalone” column.

 
  For the Year Ended December 31, 2014
      Consolidated        
  Standalone   Funds   Eliminations   Consolidated
                       
  (Amounts in thousands)
Revenues:                      
Management fees $     65,765     $     -      $     (4,513 )   $     61,252  
Performance fees       7,884           -            (5,834 )         2,050  
Other revenues and fees       8,871           -            -            8,871  
Total revenues       82,520           -            (10,347 )         72,173  
                       
Expenses:                      
Compensation and benefits       20,322           -            -            20,322  
Performance fee compensation       (1,543 )         -            -            (1,543 )
Consolidated Funds expenses       -            6,183           (4,513 )         1,670  
General, administrative and other expenses       16,312           -            -            16,312  
Total expenses       35,091           6,183           (4,513 )         36,761  
                       
Other income (expense):                      
Dividend income       886           -            -            886  
Interest expense       (5,520 )         -            -            (5,520 )
Other income (expenses), net       (2,097 )         -            324           (1,773 )
Interest and other income of Consolidated Funds       -            71,468           -            71,468  
Interest expense of Consolidated Funds       -            (9,951 )         -            (9,951 )
Net realized gain (loss) on investments of Consolidated Funds       -            789           -            789  
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds       -            (20,557 )         -            (20,557 )
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds       -            1,174           -            1,174  
Total other income (expense), net       (6,731 )         42,923           324           36,516  
Income (loss) before income taxes       40,698           36,740           (5,510 )         71,928  
Provision for (benefit from) income taxes       1,015           1,513           -            2,528  
Net income (loss)       39,683           35,227           (5,510 )         69,400  
Net income attributable to non-controlling interests in Consolidated Funds       -            -            29,717           29,717  
Net income (loss) attributable to non-controlling interests in consolidated subsidiaries       1,933           -            -            1,933  
Net income attributable to non-controlling interests in Medley LLC       36,055           -            -            36,055  
Net income attributable to Medley Management Inc. $     1,695     $     35,227     $     (35,227 )   $     1,695  
 
 
  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  
 
 
  For the Three Months Ended December 31, 2014
  (unaudited)
      Consolidated        
  Standalone   Funds   Eliminations   Consolidated
                       
  (Amounts in thousands)
Revenues:                      
Management fees $     18,249     $     -      $     (463 )   $     17,786  
Performance fees       (3,587 )         -            2,300           (1,287 )
Other revenues and fees       1,688           -            -            1,688  
Total revenues       16,350           -            1,837           18,187  
                       
Expenses:                      
Compensation and benefits       5,312           -            -            5,312  
Performance fee compensation       (3,780 )         -            -            (3,780 )
Consolidated Funds expenses       -            1,004           (463 )         541  
General, administrative and other expenses       3,491           -            -            3,491  
Total expenses       5,023           1,004           (463 )         5,564  
                       
Other income (expense):                      
Dividend income       221           -            -            221  
Interest expense       (2,140 )         -            -            (2,140 )
Other income (expenses), net       (390 )         -            203           (187 )
Interest and other income of Consolidated Funds       -            19,992           -            19,992  
Interest expense of Consolidated Funds       -            (4,365 )         -            (4,365 )
Net realized gain (loss) on investments of Consolidated Funds       -            -            -            -   
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds       -            (11,017 )         -            (11,017 )
Net change in unrealized depreciation (appreciation) on secured borrowings of Consolidated Funds       -            1,071           -            1,071  
Total other income (expense), net       (2,309 )         5,681           203           3,575  
Income before income taxes       9,018           4,677           2,503           16,198  
Provision for income taxes       (11 )         365           -            354  
Net income       9,029           4,312           2,503           15,844  
Net income attributable to non-controlling interests in Consolidated Funds       -            -            6,815           6,815  
Net income attributable to non-controlling interests in consolidated subsidiaries       (239 )         -            -            (239 )
Net income attributable to non-controlling interests in Medley LLC       7,951           -            -            7,951  
Net income attributable to Medley LLC $     1,317     $     4,312     $     (4,312 )   $     1,317  


Medley Management Inc