Exhibit 99.1
DUFF & PHELPS ANNOUNCES THIRD QUARTER 2007 FINANCIAL RESULTS
NEW YORK, NY — November 13, 2007 — Duff & Phelps Corporation (NYSE: DUF), a leading independent financial advisory and investment banking firm, today announced financial results for the third quarter and nine months ended September 30, 2007. The financial results described below relate to the results for Duff & Phelps Acquisitions, LLC (together with Duff & Phelps Corporation, referred to as Duff & Phelps), which upon completion of Duff & Phelps Corporation’s initial public offering on October 3, 2007 became consolidated into the results of Duff & Phelps Corporation. Prior to the initial public offering, Duff & Phelps Corporation did not engage in any business or activities except in connection with its formation.
For the quarter, revenues excluding reimbursable expenses increased 23.6% to $83.9 million, compared with $67.9 million for the year-ago quarter. The company generated net income for the third quarter of $10.7 million compared with net income of $7.4 million for the year-ago quarter. Adjusted EBITDA for the third quarter was $17.1 million, representing 20.3% of revenue excluding reimbursable expenses, compared with $16.2 million for the year-ago quarter, representing 23.9% of revenue excluding reimbursable expenses.
Duff & Phelps believes that Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), which is a non-GAAP measure, viewed alongside GAAP financial performance metrics, provides a relevant and useful benchmark for investors to assess the company’s financial performance and comparability to other companies in its industry, given Duff & Phelps’ recent level of acquisition activity and related capital investments and equity grants.*
For the nine months ended September 30, 2007, Duff & Phelps generated revenues excluding reimbursable expenses of $248.5 million, an increase of 45.7% compared with $170.6 million for the year-ago period. For the nine months ended September 30, 2007, the company’s net income was $6.0 million, compared with net income of $5.7 million for the year-ago period. Adjusted EBITDA for the period was $51.4 million, representing 20.7% of revenue excluding reimbursable expenses, compared with $28.6 million for the year-ago period, representing 16.8% of revenue excluding reimbursable expenses.
As of September 30, 2007, Duff & Phelps had 763 client service professionals, compared to 636 client service professionals as of September 30, 2006.
Additionally, as previously announced, on October 31, 2007 Duff & Phelps acquired Rash & Associates, L.P., a nationwide provider of property tax management services, consistent with the company’s ongoing strategy of growing its presence in services that are highly complementary with its existing offerings. Rash & Associates, L.P. employs over 70 professionals.
Noah Gottdiener, Chairman and Chief Executive Officer, said, “We are delighted to kick off our first quarter as a publicly-traded company with financial results that are consistent with our commitment to achieving worldwide growth. Our business continues to be driven by increasing global demand for independent assessments of complex valuation-related matters.
“We are also committed to ensuring that our service offerings remain broad and well-balanced. Our mix of businesses across both our Financial Advisory and Investment Banking segments are highly complementary, and position us to perform consistently across market and economic cycles. Finally, providing outstanding client service is directly linked, in our view, to the creation of superior shareholder value, and this will remain one of our key objectives.”
* Adjusted EBITDA, as defined by Duff & Phelps, consists of net income before interest income and expense, provision for income taxes, other income, depreciation and amortization, acquisition retention expenses, equity-based compensation as included in both “compensation and benefits” and “selling, general and administrative”, and merger & acquisition costs.
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Gerry Creagh, President, said, “We are pleased with the continued growth of our Financial Advisory segment, both in the U.S. and internationally. Our Investment Banking segment continues to show strength, taking into account the fact that during the third quarter of 2006 this segment earned the largest success fee in our history.”
Earnings Call Webcast
As previously announced, Duff & Phelps will be hosting a conference call today, November 13, 2007, at 8:30am ET, to discuss the company’s financial results. Interested parties can access the webcast for this call through http://ir.duffandphelps.com/events.cfm.
About Duff & Phelps
Duff & Phelps Corporation (NYSE: DUF) is a leading provider of independent financial advisory and investment banking services, supporting client needs principally in the areas of valuation, transactions, financial restructurings and disputes. Founded in 1932, the company’s mission is to protect, recover and maximize value for its clients, by providing independent and unbiased advice on issues related to highly technical and complex assessments of value. Services include financial reporting valuation, tax services, real estate and fixed asset services, M&A advisory, corporate finance consulting, fairness and solvency opinions, restructuring advisory, and dispute and legal management consulting. Investment banking services are provided by Duff & Phelps Securities, LLC. With over 1,000 employees serving clients worldwide through offices located in the United States, Europe and Asia, Duff & Phelps is committed to delivering insightful advice and service of exceptional quality, integrity and objectivity. For more information, visit www.duffandphelps.com.
Forward-Looking and Cautionary Statements
Statements in this press release, which are not historical in nature and concern Duff & Phelps Corporation’s current expectations about the company’s reported results for 2007 and future results in 2007 and beyond may contain “forward-looking” statements as defined in Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are identified by words such as “outlook,” “may,” “will,” “could,” “should,” “seeks,” “expects,” “predicts,” “intends,” “plans,” “anticipates,” “believes,” “approximately,” “estimates,” “potential,” or “continue” or the negative version of those words or other comparable words. Any forward-looking statements reflect our current expectation about our future results, levels of activity, performance or achievements, including without limitation, that our business continues to grow at the current expectations with respect to, among other factors, utilization and billing rates, number of revenue-generating professionals; that we are able to expand our service offerings; that we successfully integrate the businesses we acquire; and that existing market conditions do not change from current expectations. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Therefore you should not place undue reliance on these forward-looking statements. Please see “Risk Factors” in our Registration Statement on Form S-1 and in other documents we file with the Securities and Exchange Commission for a complete description of the material risks we face. We do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
(Financial tables follow)
2
DUFF & PHELPS ACQUISITIONS, LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except unit and per unit amounts)
|
| Three Months |
| Three Months |
| Nine Months |
| Nine Months |
| ||||
|
| Ended |
| Ended |
| Ended |
| Ended |
| ||||
|
| September 30, |
| September 30, |
| September 30, |
| September 30, |
| ||||
|
| 2007 |
| 2006 |
| 2007 |
| 2006 |
| ||||
|
| (unaudited) |
| (unaudited) |
| (unaudited) |
| (unaudited) |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Revenues: |
|
|
|
|
|
|
|
|
| ||||
Financial Advisory |
| $ | 63,362 |
| $ | 46,350 |
| $ | 187,795 |
| $ | 131,429 |
|
Investment Banking |
| 20,525 |
| 21,530 |
| 60,655 |
| 39,127 |
| ||||
Reimbursable expenses |
| 3,695 |
| 2,655 |
| 9,753 |
| 9,229 |
| ||||
Total revenues |
| 87,582 |
| 70,535 |
| 258,203 |
| 179,785 |
| ||||
Direct client service costs |
|
|
|
|
|
|
|
|
| ||||
Compensation and benefits (including $1,030 and $2,742 of equity-based compensation for the three months ended September 30, 2007 and 2006, respectively, and $23,071 and $5,632 for the nine months ended September 30, 2007 and 2006, respectively) |
| 46,303 |
| 37,566 |
| 156,353 |
| 101,662 |
| ||||
Other direct client service costs |
| 1,194 |
| 133 |
| 2,007 |
| 474 |
| ||||
Acquisition retention expenses |
| 696 |
| 1,114 |
| 2,026 |
| 5,292 |
| ||||
Reimbursable expenses |
| 3,740 |
| 2,563 |
| 9,825 |
| 8,903 |
| ||||
Total direct client service costs |
| 51,933 |
| 41,376 |
| 170,211 |
| 116,331 |
| ||||
Operating expenses: |
|
|
|
|
|
|
|
|
| ||||
Selling, general and administrative (including $406 and $914 of equity-based compensation for the three months ended September 30,2007 and 2006, respectively, and $8,204 and $2,212 for the nine months ended September 30, 2007 and 2006, respectively) |
| 20,720 |
| 17,695 |
| 69,882 |
| 48,000 |
| ||||
Depreciation and amortization |
| 2,284 |
| 1,842 |
| 6,683 |
| 5,891 |
| ||||
Total operating expenses |
| 23,004 |
| 19,537 |
| 76,565 |
| 53,891 |
| ||||
Operating income |
| 12,645 |
| 9,622 |
| 11,427 |
| 9,563 |
| ||||
Other expense/(income): |
|
|
|
|
|
|
|
|
| ||||
Interest income |
| (458 | ) | (164 | ) | (1,287 | ) | (291 | ) | ||||
Interest expense |
| 1,871 |
| 1,524 |
| 5,442 |
| 4,093 |
| ||||
Other (income/expense) |
| 408 |
| 379 |
| 215 |
| (407 | ) | ||||
Total other expenses, net |
| 1,821 |
| 1,739 |
| 4,370 |
| 3,395 |
| ||||
Income before taxes |
| 10,824 |
| 7,883 |
| 7,057 |
| 6,168 |
| ||||
Provision for income taxes |
| 88 |
| 514 |
| 1,034 |
| 488 |
| ||||
Net income |
| $ | 10,736 |
| $ | 7,369 |
| $ | 6,023 |
| $ | 5,680 |
|
|
|
|
|
|
|
|
|
|
| ||||
3
DUFF & PHELPS ACQUISITIONS, LLC AND SUBSIDIARIES
OTHER OPERATING DATA (UNAUDITED)
|
|
|
| Three Months |
| Three Months |
| Nine Months |
| Nine Months |
| ||||
|
|
|
| Ended |
| Ended |
| Ended |
| Ended |
| ||||
|
|
|
| September 30, 2007 |
| September 30, 2006 |
| September 30, 2007 |
| September 30, 2006 |
| ||||
Other Financial Data |
|
|
|
|
|
|
|
|
| ||||||
Adjusted EBITDA ($ in thousands) (1) |
| $ | 17,061 |
| $ | 16,234 |
| $ | 51,411 |
| $ | 28,590 |
| ||
|
|
|
|
|
|
|
|
|
|
|
| ||||
Other Operating Data |
|
|
|
|
|
|
|
|
| ||||||
Number of client service professionals |
|
|
|
|
|
|
|
|
| ||||||
(at period end) |
|
|
|
|
|
|
|
|
| ||||||
Financial Advisory |
| 663 |
| 558 |
| 663 |
| 558 |
| ||||||
Investment Banking |
| 100 |
| 78 |
| 100 |
| 78 |
| ||||||
Total |
| 763 |
| 636 |
| 763 |
| 636 |
| ||||||
Average number of client service professionals for the period |
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
| |||||||
Financial Advisory |
| 657 |
| 542 |
| 607 |
| 487 |
| ||||||
Investment Banking |
| 99 |
| 80 |
| 102 |
| 82 |
| ||||||
Total |
| 756 |
| 622 |
| 709 |
| 569 |
| ||||||
Financial Advisory utilization rate (2) |
| 66.7 | % | 61.4 | % | 68.7 | % | 65.5 | % | ||||||
Financial advisory rate-per-hour (3) |
| $ | 315 |
| $ | 312 |
| $ | 322 |
| $ | 300 |
| ||
(1) The Adjusted EBITDA measure presented consists of net income/(loss) before (a) interest income and expense,(b) provision/(benefit) for income taxes, (c) other (income / expense), (d) depreciation and amortization, (e) acquisition retention expenses, (f) equity-based compensation included in “Compensation and benefits” (g) equity-based compensation included in “Selling, general & administrative”, and (h) merger and acquisition costs
|
|
|
| Adjusted EBITDA Reconciliation (in thousands ) |
| ||||||||||
|
|
|
| Three Months |
| Three Months |
| Nine Months |
| Nine Months |
| ||||
|
|
|
| Ended |
| Ended |
| Ended |
| Ended |
| ||||
|
|
|
| September 30, 2007 |
| September 30, 2006 |
| September 30, 2007 |
| September 30, 2006 |
| ||||
Net income |
| $ | 10,736 |
| $ | 7,369 |
| $ | 6,023 |
| $ | 5,680 |
| ||
Provision for income taxes |
| 88 |
| 514 |
| 1,034 |
| 488 |
| ||||||
Interest income |
| (458 | ) | (164 | ) | (1,287 | ) | (291 | ) | ||||||
Interest expense |
| 1,871 |
| 1,524 |
| 5,442 |
| 4,093 |
| ||||||
Other income |
| 408 |
| 379 |
| 215 |
| (407 | ) | ||||||
Depreciation and amortization |
| 2,284 |
| 1,842 |
| 6,683 |
| 5,891 |
| ||||||
Acquisition retention expenses |
| 696 |
| 1,114 |
| 2,026 |
| 5,292 |
| ||||||
Equity based compensation included in |
|
|
|
|
|
|
|
|
| ||||||
“compensation and benefits” |
| 1,030 |
| 2,742 |
| 23,071 |
| 5,632 |
| ||||||
Equity based compensation included |
|
|
|
|
|
|
|
|
| ||||||
in “selling, general and administrative” |
| 406 |
| 914 |
| 8,204 |
| 2,212 |
| ||||||
Adjusted EBITDA |
| $ | 17,061 |
| $ | 16,234 |
| $ | 51,411 |
| $ | 28,590 |
| ||
(2) The utilization rate for any given period is calculated by dividing the number of hours all our Financial Advisory client service professional worked on client assignments during the period by the total available working hours for all of such client service professionals during the same period, assuming a 40 hour work week, less paid holidays and vacation days.
(3) Average billing rate per hour is calculated by dividing revenues for the period by the number of hours worked on client assignments during the same period.
4
DUFF & PHELPS ACQUISITIONS, LLC AND SUBSIDIARIES
SEGMENT OPERATING RESULTS (UNAUDITED)
(In thousands)
|
| Three Months ended |
| Nine Months ended |
| ||||||||||
|
| September 30, |
| September 30, |
| ||||||||||
|
| 2007 |
| 2006 |
| 2007 |
| 2006 |
| ||||||
Financial Advisory: |
|
|
|
|
|
|
|
|
| ||||||
Revenues |
| $ | 63,362 |
| 46,350 |
| $ | 187,795 |
| 131,429 |
| ||||
Segment operating income |
| 9,970 |
| 5,816 |
| 30,508 |
| 14,802 |
| ||||||
Segment operating income margin |
| 15.7 | % | 12.5 | % | 16.2 | % | 11.3 | % | ||||||
Investment Banking: |
|
|
|
|
|
|
|
|
| ||||||
Revenues |
| 20,525 |
| 21,530 |
| 60,655 |
| 39,127 |
| ||||||
Segment operating income |
| 7,137 |
| 10,327 |
| 20,975 |
| 13,460 |
| ||||||
Segment operating income margin |
| 34.8 | % | 48.0 | % | 34.6 | % | 34.4 | % | ||||||
Total Company: |
|
|
|
|
|
|
|
|
| ||||||
Revenues |
| 83,887 |
| 67,880 |
| 248,450 |
| 170,556 |
| ||||||
Reimbursable expenses |
| 3,695 |
| 2,655 |
| 9,753 |
| 9,229 |
| ||||||
Total revenues and reimbursable expenses |
| $ | 87,582 |
| 70,535 |
| $ | 258,203 |
| 179,785 |
| ||||
Statement of operations reconciliation: |
|
|
|
|
|
|
|
|
| ||||||
Total segment operating income |
| $ | 17,107 |
| 16,143 |
| $ | 51,483 |
| 28,262 |
| ||||
Charges not allocated at the segment level: |
|
|
|
|
|
|
|
|
| ||||||
Net client reimbursable expenses |
| 45 |
| (92 | ) | 72 |
| (327 | ) | ||||||
Equity-based compensation |
| 1,437 |
| 3,657 |
| 31,275 |
| 7,844 |
| ||||||
Depreciation and amortization |
| 2,284 |
| 1,842 |
| 6,683 |
| 5,891 |
| ||||||
Acquisition retention expenses |
| 696 |
| 1114 |
| 2,026 |
| 5,292 |
| ||||||
Operating income |
| 12,645 |
| 9,622 |
| 11,427 |
| 9,562 |
| ||||||
Interest expense, net |
| 1,413 |
| 1,360 |
| 4,155 |
| 3,801 |
| ||||||
Other expense/(income) |
| 408 |
| 379 |
| 215 |
| (407 | ) | ||||||
Net income before provision for income taxes |
| 10,824 |
| 7,883 |
| 7,057 |
| 6,168 |
| ||||||
Provision for income taxes |
| 88 |
| 514 |
| 1,034 |
| 488 |
| ||||||
Net income |
| $ | 10,736 |
| 7,369 |
| $ | 6,023 |
| 5,680 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||||
# # #
Investor Relations Breanna Downes (212) 871-7700 Breanna.DownesIR@duffandphelps.com | Media Relations Sherri Saltzman (973) 775-8329 Sherri.Saltzman@duffandphelps.com |
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