Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 07, 2019 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | MN | |
Entity Registrant Name | Manning & Napier, Inc. | |
Entity Central Index Key | 0001524223 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 15,645,595 |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 54,308 | $ 59,586 |
Accounts receivable | 10,751 | 11,447 |
Investment securities | 88,106 | 91,190 |
Prepaid expenses and other assets | 6,182 | 5,221 |
Total current assets | 159,347 | 167,444 |
Property and equipment, net | 5,710 | 5,649 |
Operating lease right-of-use assets | 19,957 | |
Net deferred tax assets, non-current | 20,712 | 20,795 |
Goodwill | 4,829 | 4,829 |
Other long-term assets | 4,077 | 3,842 |
Total assets | 214,632 | 202,559 |
Liabilities | ||
Accounts payable | 1,979 | 1,845 |
Accrued expenses and other liabilities | 16,960 | 25,126 |
Deferred revenue | 9,039 | 9,305 |
Total current liabilities | 27,978 | 36,276 |
Operating lease liabilities, non-current | 20,010 | |
Other long-term liabilities | 582 | 2,691 |
Amounts payable under tax receivable agreement, non-current | 17,154 | 17,349 |
Total liabilities | 65,724 | 56,316 |
Commitments and contingencies (Note 9) | ||
Shareholders’ equity | ||
Class A common stock, $0.01 par value; 300,000,000 shares authorized; 15,684,573 and 15,310,958 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively | 157 | 153 |
Additional paid-in capital | 198,811 | 198,604 |
Retained deficit | (38,516) | (38,865) |
Accumulated other comprehensive income | (56) | (77) |
Total shareholders’ equity | 160,396 | 159,815 |
Noncontrolling interests | (11,488) | (13,572) |
Total shareholders’ equity and noncontrolling interests | 148,908 | 146,243 |
Total liabilities, shareholders’ equity and noncontrolling interests | $ 214,632 | $ 202,559 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Condition (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (shares) | 15,684,573 | 15,310,958 |
Common stock, shares outstanding (shares) | 15,684,573 | 15,310,958 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues | ||
Revenues | $ 34,797 | $ 42,224 |
Expenses | ||
Compensation and related costs | 21,448 | 23,773 |
Distribution, servicing and custody expenses | 3,758 | 4,781 |
Other operating costs | 8,307 | 6,454 |
Total operating expenses | 33,513 | 35,008 |
Operating income | 1,284 | 7,216 |
Non-operating income (loss) | ||
Interest expense | (3) | (9) |
Interest and dividend income | 809 | 502 |
Change in liability under tax receivable agreement | 195 | 291 |
Net gains (losses) on investments | 874 | (249) |
Total non-operating income | 1,875 | 535 |
Income before provision for income taxes | 3,159 | 7,751 |
Provision for income taxes | 242 | 478 |
Net income attributable to controlling and noncontrolling interests | 2,917 | 7,273 |
Less: net income attributable to noncontrolling interests | 2,356 | 6,059 |
Net income attributable to Manning & Napier, Inc. | $ 561 | $ 1,214 |
Net income per share available to Class A common stock | ||
Basic (in dollars per share) | $ 0.04 | $ 0.08 |
Diluted (in dollars per share) | $ 0.03 | $ 0.07 |
Weighted average shares of Class A common stock outstanding | ||
Basic (in shares) | 14,927,265 | 14,313,549 |
Diluted (in shares) | 78,581,169 | 78,283,583 |
Separately managed accounts | ||
Revenues | ||
Revenues | $ 21,475 | $ 25,355 |
Mutual funds and collective investment trusts | ||
Revenues | ||
Revenues | 8,228 | 10,980 |
Distribution and shareholder servicing | ||
Revenues | ||
Revenues | 2,624 | 3,178 |
Custodial services | ||
Revenues | ||
Revenues | 1,745 | 1,922 |
Other revenue | ||
Revenues | ||
Revenues | $ 725 | $ 789 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income attributable to controlling and noncontrolling interests | $ 2,917 | $ 7,273 |
Net unrealized holding gains (losses) on investment securities, net of tax | 115 | (147) |
Reclassification adjustment for realized (gains) losses on investment securities included in net income | (14) | 0 |
Comprehensive income | 3,018 | 7,126 |
Less: Comprehensive income attributable to noncontrolling interests | 2,436 | 5,939 |
Comprehensive income attributable to Manning & Napier, Inc. | $ 582 | $ 1,187 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Common StockClass A common stock | Additional Paid in Capital | Retained Deficit | Accumulated Other Comprehensive Income (Loss) | Non Controlling Interests |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative effect of change in accounting principle, net of taxes | $ 1,490 | $ 266 | $ 1,224 | |||
Beginning balance at Dec. 31, 2017 | 138,360 | $ 150 | $ 198,641 | (38,424) | $ (86) | (21,921) |
Beginning balance, Shares at Dec. 31, 2017 | 15,039,347 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to controlling and noncontrolling interests | 7,273 | 1,214 | 6,059 | |||
Distributions to noncontrolling interests | (4,908) | (4,908) | ||||
Net changes in unrealized investment securities gains or losses | (147) | (27) | (120) | |||
Common stock issued under equity compensation plan (in shares) | 224,218 | |||||
Common stock issued under equity compensation plan | 0 | $ 3 | (3) | |||
Equity-based compensation | 1,153 | 209 | 944 | |||
Dividends declared on Class A common stock | (1,221) | (1,221) | ||||
Impact of changes in ownership of Manning & Napier Group, LLC | (1,918) | (440) | (1,478) | |||
Ending balance at Mar. 31, 2018 | 140,082 | $ 153 | 198,407 | (38,165) | (113) | (20,200) |
Ending balance, Shares at Mar. 31, 2018 | 15,263,565 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative effect of change in accounting principle, net of taxes | 76 | 76 | ||||
Beginning balance at Dec. 31, 2018 | 146,243 | $ 153 | 198,604 | (38,865) | (77) | (13,572) |
Beginning balance, Shares at Dec. 31, 2018 | 15,310,958 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to controlling and noncontrolling interests | 2,917 | 561 | 2,356 | |||
Distributions to noncontrolling interests | (1,620) | (1,620) | ||||
Net changes in unrealized investment securities gains or losses | 115 | 21 | 94 | |||
Common stock issued under equity compensation plan (in shares) | 373,615 | |||||
Common stock issued under equity compensation plan | 0 | $ 4 | (4) | |||
Equity-based compensation | 1,465 | 272 | 1,193 | |||
Dividends declared on Class A common stock | (288) | (288) | ||||
Impact of changes in ownership of Manning & Napier Group, LLC | 0 | (61) | 61 | |||
Ending balance at Mar. 31, 2019 | $ 148,908 | $ 157 | $ 198,811 | $ (38,516) | $ (56) | $ (11,488) |
Ending balance, Shares at Mar. 31, 2019 | 15,684,573 |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Class A common stock | ||
Cash dividends declared per share of Class A common stock | $ 0.02 | $ 0.08 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net income attributable to controlling and noncontrolling interests | $ 2,917,000 | $ 7,273,000 |
Adjustment to reconcile net income to net cash provided by operating activities: | ||
Equity-based compensation | 1,465,000 | 1,153,000 |
Depreciation and amortization | 403,000 | 557,000 |
Change in amounts payable under tax receivable agreement | (195,000) | (291,000) |
Gain on sale of intangible assets | (56,000) | (2,388,000) |
Net (gains) losses on investment securities | (874,000) | 249,000 |
Deferred income taxes | 158,000 | 437,000 |
Noncash lease expense | 130,000 | 0 |
(Increase) decrease in operating assets and increase (decrease) in operating liabilities: | ||
Accounts receivable | 695,000 | 1,816,000 |
Prepaid expenses and other assets | (960,000) | (426,000) |
Other long-term assets | 660,000 | (479,000) |
Accounts payable | 134,000 | 104,000 |
Accrued expenses and other liabilities | (10,458,000) | (11,617,000) |
Deferred revenue | (266,000) | 69,000 |
Other long-term liabilities | (500,000) | (173,000) |
Net cash used in operating activities | (6,877,000) | (3,716,000) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (576,000) | (321,000) |
Sale of investments | 2,015,000 | 1,380,000 |
Purchase of investments | (15,301,000) | (12,237,000) |
Sale of intangible assets | 56,000 | 2,388,000 |
Proceeds from maturity of investments | 17,358,000 | 11,761,000 |
Net cash provided by investing activities | 3,552,000 | 2,971,000 |
Cash flows from financing activities: | ||
Distributions to noncontrolling interests | (1,620,000) | (4,908,000) |
Dividends paid on Class A common stock | (306,000) | (1,203,000) |
Payment of capital lease obligations | (27,000) | (33,000) |
Purchase of Class A units of Manning & Napier Group, LLC | 0 | (1,918,000) |
Net cash used in financing activities | (1,953,000) | (8,062,000) |
Net increase (decrease) in cash and cash equivalents | (5,278,000) | (8,807,000) |
Cash and cash equivalents: | ||
Beginning of period | 59,586,000 | 78,262,000 |
End of period | $ 54,308,000 | $ 69,455,000 |
Organization and Nature of the
Organization and Nature of the Business | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of the Business | Organization and Nature of the Business Manning & Napier, Inc. ("Manning & Napier" or the "Company") provides a broad range of investment solutions through separately managed accounts, mutual funds, and collective investment trust funds, as well as a variety of consultative services that complement its investment process. Founded in 1970, the Company offers equity, fixed income and alternative strategies, as well as a range of blended asset portfolios, including life cycle funds. Headquartered in Fairport, New York, the Company serves a diversified client base of high-net-worth individuals and institutions, including 401(k) plans, pension plans, Taft-Hartley plans, platforms, endowments and foundations. The Company was incorporated in 2011 as a Delaware corporation, and is the sole managing member of Manning & Napier Group, LLC and its subsidiaries (“Manning & Napier Group”), a holding company for the investment management businesses conducted by its operating subsidiaries. The diagram below depicts the Company's organizational structure as of March 31, 2019 . (1) The consolidated operating subsidiaries of Manning & Napier Group include Manning & Napier Advisors, LLC ("MNA"), Perspective Partners LLC, Manning & Napier Information Services, LLC, Manning & Napier Investor Services, Inc., Exeter Trust Company and Rainier Investment Management, LLC ("Rainier"). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Critical Accounting Policies The Company's critical accounting policies and estimates are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2018 . The Company believes that the disclosures herein are adequate so that the information presented is not misleading; however, these financial statements should be read in conjunction with the financial statements and the notes thereto in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 . The financial data for the interim periods may not necessarily be indicative of results for future interim periods or for the full year. Changes to the Company's accounting policies as a result of adoption ASU 2016-02, Leases (Topic 842) are discussed under "Leases" below and in Note 8. Basis of Presentation The accompanying unaudited consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and related rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial reporting and include all adjustments, consisting only of normal recurring adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim period. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates or assumptions that affect the reported amounts and disclosures in the consolidated financial statements. Actual results could differ from these estimates or assumptions. Principles of Consolidation The Company consolidates all majority-owned subsidiaries. In addition, as of March 31, 2019 , Manning & Napier holds an economic interest of approximately 18.6% in Manning & Napier Group but, as managing member, controls all of the business and affairs of Manning & Napier Group. As a result, the Company consolidates the financial results of Manning & Napier Group and records a noncontrolling interest on its consolidated statements of financial condition with respect to the remaining economic interest in Manning & Napier Group held by Manning & Napier Group Holdings, LLC (“M&N Group Holdings”) and Manning & Napier Capital Company, LLC (“MNCC”). All material intercompany transactions have been eliminated in consolidation. In accordance with Accounting Standards Update ("ASU") 2015-02, Consolidation (Topic 810) – Amendments to the Consolidation Analysis , the determination of whether a company is required to consolidate an entity is based on, among other things, an entity’s purpose and design, a company’s ability to direct the activities of the entity that most significantly impact the entity’s economic performance, and whether a company is obligated to absorb losses or receive benefits that could potentially be significant to the entity. The standard also requires ongoing assessments of whether a company is the primary beneficiary of a variable interest entity (“VIE”). When utilizing the voting interest entity ("VOE") model, controlling financial interest is generally defined as majority ownership of voting interests. The Company provides seed capital to its investment teams to develop new strategies and services for its clients. The original seed investment may be held in a separately managed account, comprised solely of the Company's investments or within a mutual fund, where the Company's investments may represent all or only a portion of the total equity investment in the mutual fund. Pursuant to U.S. GAAP, the Company evaluates its investments in mutual funds on a regular basis and consolidates such mutual funds for which it holds a controlling financial interest. When no longer deemed to hold a controlling financial interest, the Company would deconsolidate the fund and classify the remaining investment as either an equity method investment or as trading securities, as applicable. The Company serves as the investment adviser for Manning & Napier Fund, Inc. series of mutual funds (the “Fund”), Exeter Trust Company Collective Investment Trusts (“CIT”) and Rainier Multiple Investment Trust. The Fund, CIT and Rainier Multiple Investment Trust are legal entities, the business and affairs of which are managed by their respective boards of directors. As a result, each of these entities is a VOE. The Company holds, in limited cases, direct investments in a mutual fund (which are made on the same terms as are available to other investors) and consolidates each of these entities where it has a controlling financial interest or a majority voting interest. The Company's investments in the Fund amounted to approximately $3.9 million as of March 31, 2019 and $3.6 million as of December 31, 2018 . As of March 31, 2019 and December 31, 2018 the Company did not have a controlling financial interest in any mutual fund. Revenue Investment Management: Investment management fees are computed as a percentage of assets under management ("AUM"). The Company's performance obligation is a series of services that form part of a single performance obligation satisfied over time. Separately managed accounts are paid in advance, typically for a semi-annual or quarterly period, or in arrears, typically for a monthly or quarterly period. When investment management fees are paid in advance, the Company defers the revenue as a contract liability and recognizes it over the applicable period. When investment management fees are paid in arrears, the Company estimates revenue and records a contract asset (accrued accounts receivable) based on AUM as of the most recent month end date. Mutual funds and collective investment trust investment management revenue is calculated and earned daily based on AUM. Revenue is presented net of cash rebates and fees waived pursuant to contractual expense limitations of the funds. The Company also has agreements with third parties who provide recordkeeping and administrative services for employee benefit plans participating in the collective investment trusts. The Company is acting as an agent on behalf of the employee benefit plan sponsors, therefore, investment management revenue is recorded net of fees paid to third party service providers. Distribution and shareholder servicing: The Company receives distribution and servicing fees for providing services to its affiliated mutual funds. Revenue is computed and earned daily based on a percentage of AUM. The performance obligation is a series of services that form part of a single performance obligation satisfied over time. The Company has agreements with third parties who provide distribution and administrative services for its mutual funds. The agreements are evaluated to determine whether revenue should be reported gross or net of payments to third-party service providers. The Company controls the services provided and acts as a principal in the relationship. Therefore, distribution and shareholder servicing revenue is recorded gross of fees paid to third parties. Custodial services: Custodial service fees are calculated as a percentage of the client’s market value with additional fees charged for certain transactions. For the safeguarding and administrative services that are subject to a percentage of market value fee, the Company's performance obligation is a series of services that form part of a single performance obligation satisfied over time. Revenue for transactions assigned a stand-alone selling price is recognized in the period which the transaction is executed. Custodial service fees are billed monthly in arrears. The Company has agreements with third parties who provide safeguarding, recordkeeping and administrative services for their clients. The Company controls the services provided and acts as a principal in the relationship. Therefore, custodial service revenue is recorded gross of fees paid to third parties. Costs to Obtain a Contract Incremental first year commissions directly associated with new separate account and collective investment trust contracts are capitalized and amortized on a straight-line basis over the estimated customer contract period of 7 years for separate accounts and 3 years for collective investment trust contracts. Refer to Note 3 for further discussion. Cash and Cash Equivalents The Company generally considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents are primarily held in operating accounts at major financial institutions and also in money market securities. Cash equivalents are stated at cost, which approximates market value due to the short-term maturity of these investments. The fair value of cash equivalents have been classified as Level 1 in accordance with the fair value hierarchy. Investment Securities Investment securities are classified as either trading, equity method investments or available-for-sale and are carried at fair value. Fair value is determined based on quoted market prices in active markets for identical or similar instruments. Investment securities classified as trading consist of equity securities, fixed income securities, and investments in mutual funds for which the Company provides advisory services. Realized and unrealized gains and losses on trading securities are recorded in net gains (losses) on investments in the consolidated statements of operations. At March 31, 2019 , trading securities consist of investments held by the Company to provide initial cash seeding for product development purposes and investments to hedge economic exposure to market movements on its deferred compensation plan. Investments classified as equity method investments represent seed investments in which the Company owns between 20-50% of the outstanding voting interests in the affiliated fund or when it is determined that the Company is able to exercise significant influence but not control over the investments. If the seed investment results in significant influence, but not control, the investment will be accounted for as an equity method investment. When using the equity method, the Company recognizes its share of the investee's net income or loss for the period which is recorded in net gains (losses) on investments in the consolidated statements of operations. Investment securities classified as available-for-sale consist of U.S. Treasury notes and other short-term investments. Unrealized gains and losses on available-for-sale securities are excluded from earnings and are reported, net of deferred income tax, as a separate component of accumulated other comprehensive income in stockholders’ equity until realized. The Company periodically reviews each individual security position that has an unrealized loss, or impairment, to determine if that impairment is other-than-temporary. If impairment is determined to be other-than-temporary, the carrying value of the security will be written down to fair value and the loss will be recognized in earnings. Realized gains and losses on sales of available-for-sale securities are computed on a specific identification basis and are recorded in net gains (losses) on investments in the consolidated statements of operations. Property and Equipment Property and equipment is presented net of accumulated depreciation of approximately $11.2 million and $11.3 million as of March 31, 2019 and December 31, 2018 , respectively. Goodwill and Intangible Assets Goodwill represents the excess cost over the fair value of the identifiable net assets of acquired companies. Identifiable intangible assets generally represent the cost of client relationships and investment management agreements acquired as well as trademarks. Goodwill and indefinite-lived assets are tested for impairment annually or more frequently if events or circumstances indicate that the carrying value may not be recoverable. Intangible assets subject to amortization are tested for impairment whenever events or circumstances indicate that the carrying value may not be recoverable. Goodwill and intangible assets require significant management estimate and judgment, including the valuation and expected life determination in connection with the initial purchase price allocation and the ongoing evaluation for impairment. Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets, accrued expenses and other liabilities and operating lease liabilities, non-current on its consolidated statements of financial condition. Finance leases are included in other long-term assets, accrued expenses and other liabilities, and other long-term liabilities on its consolidated statements of financial condition. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate, for each identified lease, is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term. The operating lease ROU asset is reduced for any lease incentives. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are combined for all classes of underlying assets. Operating Segments The Company operates in one segment, the investment management industry. Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which is intended to increase transparency and comparability among organizations by recognizing all lease transactions (with terms in excess of 12 months) on the balance sheet as a lease liability and a right-of-use asset (as defined). In July 2018, the FASB issued ASU 2018-11, Leases - Targeted Improvements , which provides an optional transition method related to implementing the new lease standard. The Company adopted the new standard on its effective date of January 1, 2019. Refer to Note 8 for further discussion regarding the impact of adoption. In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The ASU requires a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the newly enacted federal corporate income tax rate as a result of the Tax Cuts and Jobs Act. The amount of the reclassification is the difference between the historical corporate income tax rate and the newly enacted 21% corporate income tax rate. The ASU will be effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company's adoption of ASU 2018-02 on January 1, 2019 did not have a material impact on its consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment , which simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test. The ASU requires goodwill impairments to be measured on the basis of the fair value of the reporting unit relative to the reporting unit's carrying amount rather than on the basis of the implied amount of goodwill relative to the goodwill balance of the reporting unit. The ASU is effective for annual and interim impairment tests for periods beginning after December 15, 2019. Early adoption is allowed for annual and interim impairment tests occurring after January 1, 2017. The Company is evaluating the effect of adopting this new accounting standard. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregated Revenue The following table represents the Company’s separately managed account and mutual fund and collective investment trust investment management revenue by investment portfolio during the three months ended March 31, 2019 and March 31, 2018 : Three months ended March 31, 2019 Three months ended March 31, 2018 Separately managed accounts Mutual funds and collective investment trusts Total Separately managed accounts Mutual funds and collective investment trusts Total (in thousands) Blended Asset $ 16,271 $ 5,055 $ 21,326 $ 18,309 $ 6,452 $ 24,761 Equity 4,612 3,106 7,718 6,356 4,488 10,844 Fixed Income 592 67 659 690 40 730 Total $ 21,475 $ 8,228 $ 29,703 $ 25,355 $ 10,980 $ 36,335 Accounts Receivable Accounts receivable as of March 31, 2019 and December 31, 2018 consisted of the following: March 31, 2019 December 31, 2018 (in thousands) Accounts receivable - third parties $ 6,318 $ 5,342 Accounts receivable - affiliated mutual funds and collective investment trusts 4,433 6,105 Total accounts receivable $ 10,751 $ 11,447 Accounts receivable : Accounts receivable represents the Company's unconditional rights to consideration arising from its performance under separately managed account, mutual fund and collective investment trust, distribution and shareholder servicing, and custodial service contracts. Accounts receivable balances do not include an allowance for doubtful accounts nor has any significant bad debt expense attributable to accounts receivable been recorded during the three months ended March 31, 2019 or 2018 . Advisory and Distribution Agreements The Company earns investment advisory fees, distribution fees and administrative service fees under agreements with affiliated mutual funds and collective investment trusts. Fees earned for advisory and distribution services provided were approximately $11.1 million and $14.5 million during the three months ended March 31, 2019 and 2018 , respectively, which represents greater than 25% of revenue in each period. The following provides amounts due from affiliated mutual funds and collective investment trusts reported within accounts receivable in the consolidated statement of financial condition as of March 31, 2019 and December 31, 2018 : March 31, 2019 December 31, 2018 (in thousands) Affiliated mutual funds $ 3,071 $ 4,802 Affiliated collective investment trusts 1,362 1,303 Accounts receivable - affiliated mutual funds and collective investment trusts $ 4,433 $ 6,105 Contract assets and liabilities Accrued accounts receivable : Accrued accounts receivable represents the Company's contract asset for revenue that has been recognized in advance of billing separately managed account contracts. Consideration for the period billed in arrears is dependent on the client’s AUM on a future billing date and therefore conditional as of the reporting period end. During the three months ended March 31, 2019 , revenue was increased by less than $0.1 million for changes in transaction price. Accrued accounts receivable of approximately $0.3 million and $0.2 million is reported within prepaid expenses and other assets in the consolidated statement of financial condition as of March 31, 2019 and December 31, 2018 , respectively. Deferred revenue: Deferred revenue is recorded when consideration is received or unconditionally due in advance of providing services to the Company's customer. Revenue recognized during the three months ended March 31, 2019 that was included in deferred revenue at the beginning of the period was approximately $7.1 million . Costs to obtain a contract: Incremental first year commissions directly associated with new separate account and collective investment trust contracts are capitalized and amortized straight-line over an estimated customer contract period of 7 years for separate accounts and 3 years for collective investment trust contracts. The total net asset as of both March 31, 2019 and December 31, 2018 was approximately $1.2 million . Amortization expense included in compensation and related costs totaled approximately $0.1 million during the three months ended March 31, 2019 . An impairment loss of less than $0.1 million was recognized during the three months ended March 31, 2019 related to contract acquisition costs for client contracts that canceled during the period. |
Noncontrolling Interests
Noncontrolling Interests | 3 Months Ended |
Mar. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests | Noncontrolling Interests Manning & Napier holds an economic interest of approximately 18.6% in Manning & Napier Group, but as managing member controls all of the business and affairs of Manning & Napier Group. As a result, the Company consolidates the financial results of Manning & Napier Group and records a noncontrolling interest on its consolidated statement of financial condition with respect to the remaining approximately 81.4% economic interest in Manning & Napier Group held by M&N Group Holdings and MNCC. Net income attributable to noncontrolling interests on the statements of operations represents the portion of earnings attributable to the economic interest in Manning & Napier Group held by the noncontrolling interests. The following provides a reconciliation from “Income before provision for income taxes” to “Net income attributable to Manning & Napier, Inc.”: Three months ended March 31, 2019 2018 (in thousands) Income before provision for income taxes $ 3,159 $ 7,751 Less: income before provision for income taxes of Manning & Napier, Inc. (1) 191 271 Income before provision for income taxes, as adjusted 2,968 7,480 Controlling interest percentage (2) 18.6 % 18.1 % Net income attributable to controlling interest 552 1,352 Plus: income before provision for income taxes of Manning & Napier, Inc. (1) 191 271 Income before income taxes attributable to Manning & Napier, Inc. 743 1,623 Less: provision for income taxes of Manning & Napier, Inc. (3) 182 409 Net income attributable to Manning & Napier, Inc. $ 561 $ 1,214 ________________________ (1) Manning & Napier, Inc. incurs certain income or expenses that are only attributable to it and are therefore excluded from the net income attributable to noncontrolling interests. (2) Income before provision for income taxes is allocated to the controlling interest based on the percentage of units of Manning & Napier Group held by Manning & Napier, Inc. The amount represents the Company's weighted ownership of Manning & Napier Group for the respective periods. (3) The consolidated provision for income taxes is equal to the sum of (i) the provision for income taxes for entities other than Manning & Napier, Inc. and (ii) the provision for income taxes of Manning & Napier, Inc. which includes all U.S. federal and state income taxes. The consolidated provision for income taxes was $0.2 million and $0.5 million for the three months ended March 31, 2019 and 2018 , respectively. As of March 31, 2019 , a total of 63,349,721 units of Manning & Napier Group were held by the noncontrolling interests. Pursuant to the terms of the exchange agreement entered into at the time of the Company's initial public offering ("Exchange Agreement"), such units may be exchangeable for shares of the Company's Class A common stock. For any units exchanged, the Company will (i) pay an amount of cash equal to the number of units exchanged multiplied by the value of one share of the Company's Class A common stock less a market discount and expected expenses, or, at the Company's election, (ii) issue shares of the Company's Class A common stock on a one-for-one basis, subject to customary adjustments. As the Company receives units of Manning & Napier Group that are exchanged, the Company's ownership of Manning & Napier Group will increase. See Note 14 for further discussion. During the three months ended March 31, 2019 , Class A common stock was issued under the Company's 2011 Equity Compensation Plan (the "Equity Plan") for which Manning & Napier, Inc. acquired an equivalent number of Class A units of Manning & Napier Group, net of forfeitures of unvested restricted stock awards. The following is the impact to the Company's equity ownership interest in Manning & Napier Group for the three months ended March 31, 2019 : Manning & Napier Group Class A Units Held Manning & Napier Total Manning & Napier Ownership % As of December 31, 2018 14,126,736 63,349,721 77,476,457 18.2% Class A Units issued 351,532 — 351,532 0.4% Class A Units exchanged — — — —% As of March 31, 2019 14,478,268 63,349,721 77,827,989 18.6% Since the Company continues to have a controlling interest in Manning & Napier Group, the aforementioned changes in ownership of Manning & Napier Group were accounted for as equity transactions under ASC 810, Consolidation . Additional paid-in capital and noncontrolling interests in the Consolidated Statements of Financial Position are adjusted to reallocate the Company's historical equity to reflect the change in ownership of Manning & Napier Group. At March 31, 2019 and December 31, 2018 , the Company had recorded a liability of $17.8 million and $18.0 million , respectively, representing the estimated payments due to the selling unit holders under the tax receivable agreement ("TRA") entered into between Manning & Napier and the other holders of Class A Units of Manning & Napier Group. Of these amounts, $0.7 million were included in accrued expenses and other liabilities at both March 31, 2019 and December 31, 2018 . The Company made no payments pursuant to the TRA during the three months ended March 31, 2019 and 2018 . Obligations pursuant to the TRA are obligations of Manning & Napier. They do not impact the noncontrolling interests. These obligations are not income tax obligations. Furthermore, the TRA has no impact on the allocation of the provision for income taxes to the Company’s net income. |
Investment Securities
Investment Securities | 3 Months Ended |
Mar. 31, 2019 | |
Investments [Abstract] | |
Investment Securities | Investment Securities The following represents the Company’s investment securities holdings as of March 31, 2019 and December 31, 2018 : March 31, 2019 Cost Unrealized Gains Unrealized Losses Fair Value (in thousands) Available-for-sale securities U.S. Treasury notes $ 17,561 $ 90 $ — $ 17,651 Fixed income securities 17,939 — (13 ) 17,926 Short-term investments 43,423 — — 43,423 79,000 Trading securities Equity securities 5,242 Mutual funds 3,864 9,106 Total investment securities $ 88,106 December 31, 2018 Cost Unrealized Gains Unrealized Losses Fair Value (in thousands) Available-for-sale securities U.S. Treasury notes $ 21,613 $ 36 $ — $ 21,649 Fixed income securities 15,488 — (75 ) 15,413 Short-term investments 45,879 — — 45,879 82,941 Trading securities Equity securities 4,683 Mutual funds 3,566 8,249 Total investment securities $ 91,190 Investment securities are classified as either trading or available-for-sale and are carried at fair value. Fair value is determined based on quoted market prices in active markets for identical or similar instruments. Investment securities classified as trading consist of equity securities, fixed income securities and investments in mutual funds for which the Company provides advisory services. At March 31, 2019 and December 31, 2018 , trading securities consist of investments held by the Company to provide initial cash seeding for product development purposes and investments in mutual funds to hedge economic exposure to market movements on its deferred compensation plan. The Company recognized approximately $0.9 million of net unrealized gains and $0.2 million of net unrealized losses related to investments classified as trading during the three months ended March 31, 2019 and 2018 , respectively. Investment securities classified as available-for-sale consist of U.S. Treasury notes, corporate bonds and other short-term investments to optimize cash management opportunities and for compliance with certain regulatory requirements. As of March 31, 2019 and December 31, 2018 , approximately $0.6 million of these securities was considered restricted. The Company periodically reviews each individual security position that has an unrealized loss, or impairment, to determine if that impairment is other-than-temporary. No other-than-temporary impairment charges have been recognized by the Company during the three months ended March 31, 2019 and 2018 . |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that the Company would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. A fair value hierarchy is provided that gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The following three-tier fair value hierarchy prioritizes the inputs used in measuring fair value: • Level 1—observable inputs such as quoted prices in active markets for identical securities; • Level 2—other significant observable inputs (including but not limited to quoted prices for similar securities, interest rates, prepayment rates, credit risk, etc.); and • Level 3—significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments). The following provides the hierarchy of inputs used to derive the fair value of the Company’s assets as of March 31, 2019 and December 31, 2018 : March 31, 2019 Level 1 Level 2 Level 3 Totals (in thousands) Equity securities $ 5,242 $ — $ — $ 5,242 Fixed income securities — 17,926 — 17,926 Mutual funds 3,864 — — 3,864 U.S. Treasury notes — 17,651 — 17,651 Short-term investments 40,225 3,198 — 43,423 Total assets at fair value $ 49,331 $ 38,775 $ — $ 88,106 Contingent consideration liability $ — $ — $ — $ — Total liabilities at fair value $ — $ — $ — $ — December 31, 2018 Level 1 Level 2 Level 3 Totals (in thousands) Equity securities $ 4,683 $ — $ — $ 4,683 Fixed income securities — 15,413 — 15,413 Mutual funds 3,566 — — 3,566 U.S. Treasury notes — 21,649 — 21,649 Short-term investments 43,914 1,965 — 45,879 Total assets at fair value $ 52,163 $ 39,027 $ — $ 91,190 Contingent consideration liability $ — $ — $ — $ — Total liabilities at fair value $ — $ — $ — $ — Short-term investments consists of certificate of deposits that are stated at cost, which approximate fair value due to the short maturity of the investments and U.S. Treasury bills. Valuations of investments in fixed income securities and U.S. Treasury notes and bills can generally be obtained through independent pricing services. For most bond types, the pricing service utilizes matrix pricing, which considers one or more of the following factors: yield or price of bonds of comparable quality, coupon, maturity, current cash flows, type and current day trade information, as well as dealer supplied prices. These valuations are categorized as Level 2 in the hierarchy. Contingent consideration was a component of the purchase price of Rainier in 2016 of additional cash payments of up to $32.5 million over the period ending December 31, 2019, contingent upon Rainier's achievement of certain financial targets. The fair value of the contingent consideration is calculated on a quarterly basis by forecasting Rainier’s adjusted earnings before interest, taxes and amortization over the contingency period. There were no changes in contingent consideration liability measured at fair value using significant unobservable inputs (Level 3) for the three months ended March 31, 2019 . The Company’s policy is to recognize transfers in and transfers out of the valuation levels as of the beginning of the reporting period. There were no transfers between valuation levels during the three months ended March 31, 2019 . |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses and other liabilities as of March 31, 2019 and December 31, 2018 consisted of the following: March 31, 2019 December 31, 2018 (in thousands) Accrued bonus and sales commissions $ 6,885 $ 16,121 Accrued payroll and benefits 2,880 4,087 Accrued sub-transfer agent fees 760 1,451 Dividends payable 314 306 Amounts payable under tax receivable agreement 674 674 Short-term operating lease liabilities 2,722 — Other accruals and liabilities 2,725 2,487 Total accrued expenses and other liabilities $ 16,960 $ 25,126 During the year ended December 31, 2018 , the Company commenced a voluntary employee retirement offering (the "offering"), available to employees meeting certain age and length-of-service requirements as well as business function criteria. Employees electing to participate in the offering were subject to approval by the Company, and received enhanced separation benefits. These employees are required to render service until their agreed upon termination date (which varies from person to person) in order to receive the benefits and as such, the liability will be recognized ratably over the applicable service period. The Company estimates the total employee severance costs under the offering to be approximately $2.6 million , of which approximately $2.2 million was recognized during the year ended December 31, 2018 . During the three months ended March 31, 2019 , the Company recognized approximately $0.1 million of severance costs under the offering and approximately $0.4 million as a result of involuntary workforce reductions. Employee severance costs recognized are included in compensation and related costs in the consolidated statements of operations. The following table summarizes the changes in accrued employee severance costs recognized by the Company during the three months ended March 31, 2019 , as included in accrued expenses and other liabilities in the consolidated statements of financial condition: Three months ended March 31, 2019 (in thousands) Accrued employee severance costs as of December 31, 2018 $ 1,642 Employee severance costs recognized 502 Payment of employee severance costs (1,230 ) Accrued employee severance costs as of March 31, 2019 $ 914 The following table summarizes the changes in accrued employee severance costs recognized by the Company during the three months ended March 31, 2019 , as included in accrued expenses and other liabilities in the consolidated statements of financial condition: Three months ended March 31, 2019 (in thousands) Accrued employee severance costs as of December 31, 2018 $ 1,642 Employee severance costs recognized 502 Payment of employee severance costs (1,230 ) Accrued employee severance costs as of March 31, 2019 $ 914 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases Adoption of ASU 2016-02, Leases (Topic 842) On January 1, 2019, the Company adopted Topic 842 using the optional transition method. Consequently, financial information and disclosures for the reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historic accounting policies under Topic 840. Topic 842 provides a number of optional practical expedients as part of the transition from Topic 840. The Company elected the ‘package of practical expedients’, which permits it to not reassess, under Topic 842, its prior conclusions about lease identification, lease classification and initial direct costs. Topic 842 also provides practical expedients for an entity’s ongoing accounting under Topic 842. The Company elected the short-term lease recognition exemption for all leases that qualify, and elected the practical expedient to combine lease and non-lease components as a single combined lease component for all of its leases. On adoption, the Company recognized lease liabilities of approximately $23.2 million and right-of-use assets for approximately $20.6 million , based on the present value of the remaining minimum rental payments under Topic 840 for operating leases that existed as of the date of adoption. In addition, the Company wrote-down approximately $2.6 million of unamortized deferred lease costs and tenant incentives previously recorded as deferred rent liability in the consolidated statements of financial condition as of December 31, 2018. The Company recognized an increase to opening shareholders' equity and noncontrolling interest of approximately $0.1 million , as of January 1, 2019, related to the deferred tax impacts of adopting Topic 842. Leases The Company has operating and finance leases for office space and certain equipment. For these leases, the office space or equipment is an explicitly identified asset within the contract. The Company has determined that it has obtained substantially all of the economic benefits from the use of the underlying asset and directs how and for what purpose the asset is used during the term of the contract. The Company's leases have remaining lease terms ranging between 1 year and approximately 9 years. The Company's lease term on certain of its multi-year office space leases, including its headquarters, include options for the Company to extend those leases for periods ranging from an additional five to ten years. In addition, the Company has the option to reduce a portion of its square footage at certain times throughout the term of the lease for its headquarters. The Company determined it is not reasonably certain at this time it will exercise the options to extend these leases or will exercise the options to reduce its square footage; therefore, the payment amounts related to these lease term extensions and contraction options have been excluded from determining its right-of-use asset and lease liability. Certain of the Company's operating leases for office space include variable lease payments, including non-lease components (such as utilities and operating expenses) that vary based on actual expenses and are adjusted on an annual basis. The Company concluded that these variable lease payments are in substance fixed payments and included the estimated variable payments in its determination of right-of-use assets and lease liabilities. Changes in the lease terms, including renewal options and options to reduce its square footage, incremental borrowing rates, and/or variable lease payments, and the corresponding impact to the right-of-use assets and lease liabilities, are recognized in the period incurred. Certain of the Company's operating leases have been subleased for which the Company will receive cash totaling approximately $0.4 million over the term of such leases. The lease terms for the two subleased operating leases end in 2019 and 2021. The components of lease expense for the three months ended March 31, 2019 were as follows: Three months ended March 31, 2019 (in thousands) Finance lease expense Amortization of right-of-use assets $ 29 Interest on lease liabilities 3 Operating lease expense 923 Short-term lease expense 4 Variable lease expense 46 Sublease income (123 ) Total $ 882 Supplemental cash flow information related to leases for the three months ended March 31, 2019 was as follows: Three months ended March 31, 2019 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 3 Finance cash flows from finance leases $ 27 Operating cash flows from operating leases $ 794 Right-of-use assets obtained in exchange for new lease obligations: Finance leases $ 163 Operating leases $ — Supplemental balance sheet information related to leases as of March 31, 2019 was as follows: (in thousands, except lease term and discount rate) March 31, 2019 Finance Leases Finance lease right-of-use assets (1) $ 284 Accrued expenses and other liabilities $ 127 Other long-term liabilities 173 Total finance lease liabilities $ 300 Operating Leases Operating lease right-of-use assets $ 19,957 Accrued expenses and other liabilities $ 2,722 Operating lease liabilities, non-current 20,010 Total operating lease liabilities $ 22,732 Weighted average remaining lease term Finance leases 3.10 years Operating leases 8.03 years Weighted average discount rate Finance leases 4.27 % Operating leases 5.21 % _______________________ (1) Amounts included in other long-term assets within the consolidated statements of financial condition. Maturities of lease liabilities were as follows: Twelve month period ending March 31, Finance Leases Operating Leases (in thousands) 2020 $ 137 $ 3,839 2021 82 3,643 2022 53 3,544 2023 30 3,228 2024 20 2,964 Thereafter — 10,695 Total lease payments 322 27,913 Less imputed interest (22 ) (5,181 ) Total lease liabilities $ 300 $ 22,732 As of December 31, 2018 , minimum rent payments relating to the office leases for each of the following five years and thereafter were as follows: Year Ending December 31, Minimum Payments (in thousands) 2019 $ 3,748 2020 3,780 2021 3,712 2022 3,668 2023 3,369 Thereafter 13,397 Total undiscounted lease payments $ 31,674 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company may from time to time enter into agreements that contain certain representations and warranties and which provide general indemnifications. The Company may also serve as a guarantor of such obligations. The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. The Company expects any risk of liability associated with such guarantees to be remote. Regulation As an investment adviser to a variety of investment products, the Company and its affiliated broker-dealer are subject to routine reviews and inspections by the SEC and the Financial Industry Regulatory Authority, Inc. Additionally, the Company could be subject to non-routine reviews and inspections by the National Futures Association and U.S. Commodity Futures Trading Commission in regards to the Company’s de minimis exposure to commodity interest investments in the mutual funds and collective investment trust vehicles it operates. From time to time the Company may also be subject to claims, or be involved in various legal proceedings, arising in the ordinary course of its business and other contingencies. The Company does not believe that the outcome of any of these reviews, inspections or other legal proceedings will have a material impact on its consolidated financial statements; however, litigation is subject to many uncertainties, and the outcome of individual litigated matters is difficult to predict. The Company will establish accruals for matters that are probable, can be reasonably estimated, and may take into account any related insurance recoveries to the extent of such recoveries. As of March 31, 2019 and December 31, 2018 , the Company has not accrued for any such claims, legal proceedings, or other contingencies. |
Earnings per Common Share
Earnings per Common Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per Common Share | Earnings per Common Share Basic earnings per share (“basic EPS”) is computed using the two-class method to determine net income available to Class A common stock. The two-class method includes an earnings allocation formula that determines earnings per share for each participating security according to dividends declared and undistributed earnings for the period. The Company's restricted Class A common shares granted under the Equity Plan have non-forfeitable dividend rights during their vesting period and are therefore considered participating securities under the two-class method. Under the two-class method, the Company's net income available to Class A common stock is reduced by the amount allocated to the unvested restricted Class A common stock. Basic EPS is calculated by dividing net income available to Class A common stock by the weighted average number of common shares outstanding during the period. Diluted earnings per share (“diluted EPS”) is computed under the more dilutive of either the treasury method or the two-class method. For the diluted calculation, the weighted average number of common shares outstanding during the period is increased by the assumed conversion into Class A common stock of the unvested equity awards and the exchangeable Class A units of Manning & Napier Group, to the extent that such conversion would dilute earnings per share. The following is a reconciliation of the income and share data used in the basic and diluted EPS computations for the three months ended March 31, 2019 and 2018 under the two-class method: Three months ended March 31, 2019 2018 (in thousands, except share data) Net income attributable to controlling and noncontrolling interests $ 2,917 $ 7,273 Less: net income attributable to noncontrolling interests 2,356 6,059 Net income attributable to Manning & Napier, Inc. $ 561 $ 1,214 Less: allocation to participating securities (5 ) 63 Net income available to Class A common stock $ 566 $ 1,151 Weighted average shares of Class A common stock outstanding - basic 14,927,265 14,313,549 Dilutive effect of unvested equity awards 304,183 51,888 Dilutive effect of exchangeable Class A Units 63,349,721 63,918,146 Weighted average shares of Class A common stock outstanding - diluted 78,581,169 78,283,583 Net income available to Class A common stock per share - basic $ 0.04 $ 0.08 Net income available to Class A common stock per share - diluted $ 0.03 $ 0.07 For the three-months ended March 31, 2019 , 3,000,000 unvested performance-based stock options were excluded from the calculation of diluted EPS because the associated market condition had not yet been achieved. For the three-months ended March 31, 2019 and 2018 , 1,413,560 and 866,103 , respectively, unvested equity awards were excluded from the calculation of diluted EPS because the effect would have been anti-dilutive. |
Equity Based Compensation
Equity Based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Compensation [Abstract] | |
Equity Based Compensation | Equity Based Compensation The Equity Plan was adopted by the Company's board of directors and approved by stockholders prior to the consummation of the Company's 2011 initial public offering. Under the Equity Plan, a total of 13,142,813 equity interests are authorized for issuance, and may be issued in the form of Class A common stock, restricted stock units, stock options, units of Manning & Napier Group, or certain classes of membership interests in the Company which may convert into units of Manning & Napier Group. The following table summarizes activity related to awards of restricted stock and restricted stock units (collectively, "stock awards") activity under the Equity Plan for the three months ended March 31, 2019 : Stock Awards Weighted Average Grant Date Fair Value Outstanding at January 1, 2019 1,602,337 $ 5.31 Granted 723,842 $ 2.40 Vested (388,615 ) $ 2.56 Forfeited (15,000 ) $ 12.20 Outstanding at March 31, 2019 1,922,564 $ 4.72 The weighted average fair value of stock awards granted during the three months ended March 31, 2019 was $2.40 , based on the closing sale price of Manning & Napier Inc.'s Class A common stock as reported on the New York Stock Exchange on the date of grant, and, if not entitled to dividends or dividend equivalents during the vesting period, reduced by the present value of such amounts expected to be paid on the underlying shares during the requisite service period. For the three months ended March 31, 2019 and 2018 , the Company recorded approximately $1.4 million and $1.2 million , respectively, of compensation expense related to stock awards under the Equity Plan. As of March 31, 2019 , there was unrecognized compensation expense of approximately $5.3 million related to stock awards, which the Company expects to recognize over a weighted average period of approximately 2.2 years . The aggregate intrinsic value of stock awards that vested during the three months ended March 31, 2019 was approximately $1.0 million . A summary of activity under the Equity Plan related to stock option awards during the three months ended March 31, 2019 is presented below: Stock Option Awards Weighted Average Exercise Price Weighted Average Contractual Term (years) Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2019 — $ — Granted 3,500,000 $ 2.01 Vested — $ — Forfeited — $ — Outstanding at March 31, 2019 3,500,000 $ 2.01 4.1 $ 315 Exercisable at March 31, 2019 — $ — For the three months ended March 31, 2019 , the Company recorded approximately $0.1 million of compensation expense related to stock options under the Equity Plan. As of March 31, 2019 , there was unrecognized compensation expense of approximately $1.4 million related to stock options, which the Company expects to recognize over a weighted average period of approximately 1.4 years. During the three months ended March 31, 2019 , the Company granted a total of 3,500,000 stock option awards under the Equity Plan, 3,000,000 of which are subject to the achievement of specified performance criteria ("performance options"). The performance options vest in installments, only if the closing price per share of the Company's Class A common stock as reported on the New York Stock Exchange exceeds a certain threshold for 20 consecutive days ("target price") prior to a specified date ("target date"). Target prices range from $3.25 to $7.75 . Target dates by which each target price must be achieved range from three to seven years from the grant date. These performance options are considered to have a market condition, the effect of which is reflected in the grant date fair value of the award. As such, as long as the requisite service is rendered for these awards, compensation expense will be recognized regardless of whether the market condition is achieved. The fair value of these performance options was estimated using a Monte Carlo simulation model and the weighted average grant date fair value for the performance options granted was $0.38 . For stock option awards with service conditions only ("service-based options"), the Company determines the fair value of each option award on the date of grant using the Black-Scholes option pricing model. The weighted average grant date fair value of service-based options granted during the three months ended March 31, 2019 was $0.62 , using the following assumptions: Three months ended March 31, 2019 Expected volatility 45.00% Expected term (in years) 4.9 - 6.9 Risk-free interest rate 2.49% - 2.58% Expected dividend yield 3.98% |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company is comprised of entities that have elected to be treated as either a limited liability company ("LLC") or a “C-Corporation". As such, the entities functioning as LLCs are not liable for or able to benefit from U.S. federal and most state income taxes on their earnings, and earnings (losses) will be included in the personal income tax returns of each entity’s unit holders. The entities functioning as C-Corporations are liable for or able to benefit from U.S. federal and state and local income taxes on their earnings and losses, respectively. The Company’s income tax provision and effective tax rate were as follows: Three months ended March 31, 2019 2018 (in thousands) Earnings from continuing operations before income taxes $ 3,159 $ 7,751 Effective tax rate 7.7 % 6.2 % Provision for income taxes 242 478 Provision for income taxes at statutory rate 663 1,628 Difference between tax at effective vs. statutory rate $ (421 ) $ (1,150 ) For both the three months ended March 31, 2019 and 2018 , the difference between the Company’s recorded provision and the provision that would result from applying the U.S. statutory rate of 21% is primarily attributable to the benefit resulting from the fact that a significant portion of the Company’s operations include a series of flow-through entities which are generally not subject to federal and most state income taxes. Accordingly, a portion of the Company’s earnings are not subject to corporate level taxes. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Transactions with noncontrolling members From time to time, the Company may be asked to provide certain services, including accounting, legal and other administrative functions for the noncontrolling members of Manning & Napier Group. While immaterial, the Company has not received any reimbursement for such services. The Company manages the personal funds of certain of the Company's current and former executive officers and directors, including William Manning. Pursuant to the respective investment management agreements, in some instances the Company waives or reduces its regular advisory fees for these accounts and personal funds utilized to incubate products. The aggregate value of the fees earned and the value of fees waived was less than $0.1 million for each of the three months ended March 31, 2019 and 2018 . Affiliated fund transactions The Company earns investment advisory fees and administrative service fees under agreements with affiliated mutual funds and collective investment trusts. The aggregate value of revenue earned was approximately $11.6 million and $15.0 million for the three months ended March 31, 2019 and 2018, respectively. As of March 31, 2019 and December 31, 2018 , amounts due from the affiliated mutual funds was approximately $3.1 million and $4.8 million , respectively. As of March 31, 2019 and December 31, 2018 , amounts due from affiliated collective investment trusts was approximately $1.4 million and $1.3 million , respectively. The Company incurs certain expenses on behalf of the collective investment trusts and has contractually agreed to limit its fees and reimburse expenses to limit operating expenses incurred by certain affiliated fund series. The aggregate value of fees waived and expenses reimbursed to, or incurred for, affiliated mutual funds and collective investment trusts was $1.5 million and $1.7 million for the three months ended March 31, 2019 and 2018 , respectively. As of March 31, 2019 and December 31, 2018 , the Company recorded a receivable of approximately $0.2 million for expenses paid on behalf of an affiliated mutual fund. These expenses are reimbursable to the Company under an agreement with the affiliated mutual fund, and are included within other long-term assets on the consolidated statements of financial condition. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Exchange of Class A units of Manning & Napier Group Pursuant to the terms of the Exchange Agreement (Note 4), M&N Group Holdings and MNCC exchanged a total of 1,315,521 Class A units of Manning & Napier Group on May 2, 2019, for approximately $3.1 million in cash. Subsequent to the exchange, the Class A units were retired. As a result of the exchange and retirement, the Company's ownership of Manning & Napier Group increased to approximately 18.9% . Distributions and dividends On April 23, 2019 , the Board of Directors approved a distribution from Manning & Napier Group to Manning & Napier and the noncontrolling interests of Manning & Napier Group. The amount of the distribution will be based on earnings for the quarter ending June 30, 2019. Concurrently, the Board of Directors declared a $0.02 per share dividend to the holders of Class A common stock. The dividend is payable on or about August 1, 2019 to shareholders of record as of July 15, 2019 . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and related rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial reporting and include all adjustments, consisting only of normal recurring adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim period. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates or assumptions that affect the reported amounts and disclosures in the consolidated financial statements. Actual results could differ from these estimates or assumptions. |
Principles of Consolidation | Principles of Consolidation The Company consolidates all majority-owned subsidiaries. In addition, as of March 31, 2019 , Manning & Napier holds an economic interest of approximately 18.6% in Manning & Napier Group but, as managing member, controls all of the business and affairs of Manning & Napier Group. As a result, the Company consolidates the financial results of Manning & Napier Group and records a noncontrolling interest on its consolidated statements of financial condition with respect to the remaining economic interest in Manning & Napier Group held by Manning & Napier Group Holdings, LLC (“M&N Group Holdings”) and Manning & Napier Capital Company, LLC (“MNCC”). All material intercompany transactions have been eliminated in consolidation. In accordance with Accounting Standards Update ("ASU") 2015-02, Consolidation (Topic 810) – Amendments to the Consolidation Analysis , the determination of whether a company is required to consolidate an entity is based on, among other things, an entity’s purpose and design, a company’s ability to direct the activities of the entity that most significantly impact the entity’s economic performance, and whether a company is obligated to absorb losses or receive benefits that could potentially be significant to the entity. The standard also requires ongoing assessments of whether a company is the primary beneficiary of a variable interest entity (“VIE”). When utilizing the voting interest entity ("VOE") model, controlling financial interest is generally defined as majority ownership of voting interests. The Company provides seed capital to its investment teams to develop new strategies and services for its clients. The original seed investment may be held in a separately managed account, comprised solely of the Company's investments or within a mutual fund, where the Company's investments may represent all or only a portion of the total equity investment in the mutual fund. Pursuant to U.S. GAAP, the Company evaluates its investments in mutual funds on a regular basis and consolidates such mutual funds for which it holds a controlling financial interest. When no longer deemed to hold a controlling financial interest, the Company would deconsolidate the fund and classify the remaining investment as either an equity method investment or as trading securities, as applicable. The Company serves as the investment adviser for Manning & Napier Fund, Inc. series of mutual funds (the “Fund”), Exeter Trust Company Collective Investment Trusts (“CIT”) and Rainier Multiple Investment Trust. The Fund, CIT and Rainier Multiple Investment Trust are legal entities, the business and affairs of which are managed by their respective boards of directors. As a result, each of these entities is a VOE. The Company holds, in limited cases, direct investments in a mutual fund (which are made on the same terms as are available to other investors) and consolidates each of these entities where it has a controlling financial interest or a majority voting interest. The Company's investments in the Fund amounted to approximately $3.9 million as of March 31, 2019 and $3.6 million as of December 31, 2018 . As of March 31, 2019 and December 31, 2018 the Company did not have a controlling financial interest in any mutual fund. |
Revenue, and Costs to Obtain a Contract | Revenue Investment Management: Investment management fees are computed as a percentage of assets under management ("AUM"). The Company's performance obligation is a series of services that form part of a single performance obligation satisfied over time. Separately managed accounts are paid in advance, typically for a semi-annual or quarterly period, or in arrears, typically for a monthly or quarterly period. When investment management fees are paid in advance, the Company defers the revenue as a contract liability and recognizes it over the applicable period. When investment management fees are paid in arrears, the Company estimates revenue and records a contract asset (accrued accounts receivable) based on AUM as of the most recent month end date. Mutual funds and collective investment trust investment management revenue is calculated and earned daily based on AUM. Revenue is presented net of cash rebates and fees waived pursuant to contractual expense limitations of the funds. The Company also has agreements with third parties who provide recordkeeping and administrative services for employee benefit plans participating in the collective investment trusts. The Company is acting as an agent on behalf of the employee benefit plan sponsors, therefore, investment management revenue is recorded net of fees paid to third party service providers. Distribution and shareholder servicing: The Company receives distribution and servicing fees for providing services to its affiliated mutual funds. Revenue is computed and earned daily based on a percentage of AUM. The performance obligation is a series of services that form part of a single performance obligation satisfied over time. The Company has agreements with third parties who provide distribution and administrative services for its mutual funds. The agreements are evaluated to determine whether revenue should be reported gross or net of payments to third-party service providers. The Company controls the services provided and acts as a principal in the relationship. Therefore, distribution and shareholder servicing revenue is recorded gross of fees paid to third parties. Custodial services: Custodial service fees are calculated as a percentage of the client’s market value with additional fees charged for certain transactions. For the safeguarding and administrative services that are subject to a percentage of market value fee, the Company's performance obligation is a series of services that form part of a single performance obligation satisfied over time. Revenue for transactions assigned a stand-alone selling price is recognized in the period which the transaction is executed. Custodial service fees are billed monthly in arrears. The Company has agreements with third parties who provide safeguarding, recordkeeping and administrative services for their clients. The Company controls the services provided and acts as a principal in the relationship. Therefore, custodial service revenue is recorded gross of fees paid to third parties. Costs to Obtain a Contract Incremental first year commissions directly associated with new separate account and collective investment trust contracts are capitalized and amortized on a straight-line basis over the estimated customer contract period of 7 years for separate accounts and 3 years for collective investment trust contracts. Refer to Note 3 for further discussion. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company generally considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents are primarily held in operating accounts at major financial institutions and also in money market securities. Cash equivalents are stated at cost, which approximates market value due to the short-term maturity of these investments. The fair value of cash equivalents have been classified as Level 1 in accordance with the fair value hierarchy. |
Investment Securities | Investment Securities Investment securities are classified as either trading, equity method investments or available-for-sale and are carried at fair value. Fair value is determined based on quoted market prices in active markets for identical or similar instruments. Investment securities classified as trading consist of equity securities, fixed income securities, and investments in mutual funds for which the Company provides advisory services. Realized and unrealized gains and losses on trading securities are recorded in net gains (losses) on investments in the consolidated statements of operations. At March 31, 2019 , trading securities consist of investments held by the Company to provide initial cash seeding for product development purposes and investments to hedge economic exposure to market movements on its deferred compensation plan. Investments classified as equity method investments represent seed investments in which the Company owns between 20-50% of the outstanding voting interests in the affiliated fund or when it is determined that the Company is able to exercise significant influence but not control over the investments. If the seed investment results in significant influence, but not control, the investment will be accounted for as an equity method investment. When using the equity method, the Company recognizes its share of the investee's net income or loss for the period which is recorded in net gains (losses) on investments in the consolidated statements of operations. Investment securities classified as available-for-sale consist of U.S. Treasury notes and other short-term investments. Unrealized gains and losses on available-for-sale securities are excluded from earnings and are reported, net of deferred income tax, as a separate component of accumulated other comprehensive income in stockholders’ equity until realized. The Company periodically reviews each individual security position that has an unrealized loss, or impairment, to determine if that impairment is other-than-temporary. If impairment is determined to be other-than-temporary, the carrying value of the security will be written down to fair value and the loss will be recognized in earnings. Realized gains and losses on sales of available-for-sale securities are computed on a specific identification basis and are recorded in net gains (losses) on investments in the consolidated statements of operations. |
Property and Equipment | Property and Equipment Property and equipment is presented net of accumulated depreciation of approximately $11.2 million and $11.3 million as of March 31, 2019 and December 31, 2018 , respectively. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess cost over the fair value of the identifiable net assets of acquired companies. Identifiable intangible assets generally represent the cost of client relationships and investment management agreements acquired as well as trademarks. Goodwill and indefinite-lived assets are tested for impairment annually or more frequently if events or circumstances indicate that the carrying value may not be recoverable. Intangible assets subject to amortization are tested for impairment whenever events or circumstances indicate that the carrying value may not be recoverable. Goodwill and intangible assets require significant management estimate and judgment, including the valuation and expected life determination in connection with the initial purchase price allocation and the ongoing evaluation for impairment. |
Leases | Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets, accrued expenses and other liabilities and operating lease liabilities, non-current on its consolidated statements of financial condition. Finance leases are included in other long-term assets, accrued expenses and other liabilities, and other long-term liabilities on its consolidated statements of financial condition. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate, for each identified lease, is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term. The operating lease ROU asset is reduced for any lease incentives. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are combined for all classes of underlying assets. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which is intended to increase transparency and comparability among organizations by recognizing all lease transactions (with terms in excess of 12 months) on the balance sheet as a lease liability and a right-of-use asset (as defined). In July 2018, the FASB issued ASU 2018-11, Leases - Targeted Improvements , which provides an optional transition method related to implementing the new lease standard. The Company adopted the new standard on its effective date of January 1, 2019. Refer to Note 8 for further discussion regarding the impact of adoption. In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The ASU requires a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the newly enacted federal corporate income tax rate as a result of the Tax Cuts and Jobs Act. The amount of the reclassification is the difference between the historical corporate income tax rate and the newly enacted 21% corporate income tax rate. The ASU will be effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company's adoption of ASU 2018-02 on January 1, 2019 did not have a material impact on its consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment , which simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test. The ASU requires goodwill impairments to be measured on the basis of the fair value of the reporting unit relative to the reporting unit's carrying amount rather than on the basis of the implied amount of goodwill relative to the goodwill balance of the reporting unit. The ASU is effective for annual and interim impairment tests for periods beginning after December 15, 2019. Early adoption is allowed for annual and interim impairment tests occurring after January 1, 2017. The Company is evaluating the effect of adopting this new accounting standard. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table represents the Company’s separately managed account and mutual fund and collective investment trust investment management revenue by investment portfolio during the three months ended March 31, 2019 and March 31, 2018 : Three months ended March 31, 2019 Three months ended March 31, 2018 Separately managed accounts Mutual funds and collective investment trusts Total Separately managed accounts Mutual funds and collective investment trusts Total (in thousands) Blended Asset $ 16,271 $ 5,055 $ 21,326 $ 18,309 $ 6,452 $ 24,761 Equity 4,612 3,106 7,718 6,356 4,488 10,844 Fixed Income 592 67 659 690 40 730 Total $ 21,475 $ 8,228 $ 29,703 $ 25,355 $ 10,980 $ 36,335 |
Schedule of Accounts Receivable | Accounts receivable as of March 31, 2019 and December 31, 2018 consisted of the following: March 31, 2019 December 31, 2018 (in thousands) Accounts receivable - third parties $ 6,318 $ 5,342 Accounts receivable - affiliated mutual funds and collective investment trusts 4,433 6,105 Total accounts receivable $ 10,751 $ 11,447 The following provides amounts due from affiliated mutual funds and collective investment trusts reported within accounts receivable in the consolidated statement of financial condition as of March 31, 2019 and December 31, 2018 : March 31, 2019 December 31, 2018 (in thousands) Affiliated mutual funds $ 3,071 $ 4,802 Affiliated collective investment trusts 1,362 1,303 Accounts receivable - affiliated mutual funds and collective investment trusts $ 4,433 $ 6,105 |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Reconciliation from Income Before Provision for Income Taxes to Net Income Attributable to Manning & Napier, Inc. | The following provides a reconciliation from “Income before provision for income taxes” to “Net income attributable to Manning & Napier, Inc.”: Three months ended March 31, 2019 2018 (in thousands) Income before provision for income taxes $ 3,159 $ 7,751 Less: income before provision for income taxes of Manning & Napier, Inc. (1) 191 271 Income before provision for income taxes, as adjusted 2,968 7,480 Controlling interest percentage (2) 18.6 % 18.1 % Net income attributable to controlling interest 552 1,352 Plus: income before provision for income taxes of Manning & Napier, Inc. (1) 191 271 Income before income taxes attributable to Manning & Napier, Inc. 743 1,623 Less: provision for income taxes of Manning & Napier, Inc. (3) 182 409 Net income attributable to Manning & Napier, Inc. $ 561 $ 1,214 ________________________ (1) Manning & Napier, Inc. incurs certain income or expenses that are only attributable to it and are therefore excluded from the net income attributable to noncontrolling interests. (2) Income before provision for income taxes is allocated to the controlling interest based on the percentage of units of Manning & Napier Group held by Manning & Napier, Inc. The amount represents the Company's weighted ownership of Manning & Napier Group for the respective periods. (3) The consolidated provision for income taxes is equal to the sum of (i) the provision for income taxes for entities other than Manning & Napier, Inc. and (ii) the provision for income taxes of Manning & Napier, Inc. which includes all U.S. federal and state income taxes. The consolidated provision for income taxes was $0.2 million and $0.5 million for the three months ended March 31, 2019 and 2018 , respectively. |
Impact to the Company's ownership interest in Manning & Napier Group | The following is the impact to the Company's equity ownership interest in Manning & Napier Group for the three months ended March 31, 2019 : Manning & Napier Group Class A Units Held Manning & Napier Total Manning & Napier Ownership % As of December 31, 2018 14,126,736 63,349,721 77,476,457 18.2% Class A Units issued 351,532 — 351,532 0.4% Class A Units exchanged — — — —% As of March 31, 2019 14,478,268 63,349,721 77,827,989 18.6% |
Investment Securities (Tables)
Investment Securities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments [Abstract] | |
Company's Investment Securities Holdings | The following represents the Company’s investment securities holdings as of March 31, 2019 and December 31, 2018 : March 31, 2019 Cost Unrealized Gains Unrealized Losses Fair Value (in thousands) Available-for-sale securities U.S. Treasury notes $ 17,561 $ 90 $ — $ 17,651 Fixed income securities 17,939 — (13 ) 17,926 Short-term investments 43,423 — — 43,423 79,000 Trading securities Equity securities 5,242 Mutual funds 3,864 9,106 Total investment securities $ 88,106 December 31, 2018 Cost Unrealized Gains Unrealized Losses Fair Value (in thousands) Available-for-sale securities U.S. Treasury notes $ 21,613 $ 36 $ — $ 21,649 Fixed income securities 15,488 — (75 ) 15,413 Short-term investments 45,879 — — 45,879 82,941 Trading securities Equity securities 4,683 Mutual funds 3,566 8,249 Total investment securities $ 91,190 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Hierarchy of Inputs Used to Derive the Fair Value of Company's Financial Instruments | The following provides the hierarchy of inputs used to derive the fair value of the Company’s assets as of March 31, 2019 and December 31, 2018 : March 31, 2019 Level 1 Level 2 Level 3 Totals (in thousands) Equity securities $ 5,242 $ — $ — $ 5,242 Fixed income securities — 17,926 — 17,926 Mutual funds 3,864 — — 3,864 U.S. Treasury notes — 17,651 — 17,651 Short-term investments 40,225 3,198 — 43,423 Total assets at fair value $ 49,331 $ 38,775 $ — $ 88,106 Contingent consideration liability $ — $ — $ — $ — Total liabilities at fair value $ — $ — $ — $ — December 31, 2018 Level 1 Level 2 Level 3 Totals (in thousands) Equity securities $ 4,683 $ — $ — $ 4,683 Fixed income securities — 15,413 — 15,413 Mutual funds 3,566 — — 3,566 U.S. Treasury notes — 21,649 — 21,649 Short-term investments 43,914 1,965 — 45,879 Total assets at fair value $ 52,163 $ 39,027 $ — $ 91,190 Contingent consideration liability $ — $ — $ — $ — Total liabilities at fair value $ — $ — $ — $ — |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses and other liabilities as of March 31, 2019 and December 31, 2018 consisted of the following: March 31, 2019 December 31, 2018 (in thousands) Accrued bonus and sales commissions $ 6,885 $ 16,121 Accrued payroll and benefits 2,880 4,087 Accrued sub-transfer agent fees 760 1,451 Dividends payable 314 306 Amounts payable under tax receivable agreement 674 674 Short-term operating lease liabilities 2,722 — Other accruals and liabilities 2,725 2,487 Total accrued expenses and other liabilities $ 16,960 $ 25,126 During the year ended December 31, 2018 , the Company commenced a voluntary employee retirement offering (the "offering"), available to employees meeting certain age and length-of-service requirements as well as business function criteria. Employees electing to participate in the offering were subject to approval by the Company, and received enhanced separation benefits. These employees are required to render service until their agreed upon termination date (which varies from person to person) in order to receive the benefits and as such, the liability will be recognized ratably over the applicable service period. The Company estimates the total employee severance costs under the offering to be approximately $2.6 million , of which approximately $2.2 million was recognized during the year ended December 31, 2018 . During the three months ended March 31, 2019 , the Company recognized approximately $0.1 million of severance costs under the offering and approximately $0.4 million as a result of involuntary workforce reductions. Employee severance costs recognized are included in compensation and related costs in the consolidated statements of operations. The following table summarizes the changes in accrued employee severance costs recognized by the Company during the three months ended March 31, 2019 , as included in accrued expenses and other liabilities in the consolidated statements of financial condition: Three months ended March 31, 2019 (in thousands) Accrued employee severance costs as of December 31, 2018 $ 1,642 Employee severance costs recognized 502 Payment of employee severance costs (1,230 ) Accrued employee severance costs as of March 31, 2019 $ 914 The following table summarizes the changes in accrued employee severance costs recognized by the Company during the three months ended March 31, 2019 , as included in accrued expenses and other liabilities in the consolidated statements of financial condition: Three months ended March 31, 2019 (in thousands) Accrued employee severance costs as of December 31, 2018 $ 1,642 Employee severance costs recognized 502 Payment of employee severance costs (1,230 ) Accrued employee severance costs as of March 31, 2019 $ 914 |
Accrued severance costs | Accrued expenses and other liabilities as of March 31, 2019 and December 31, 2018 consisted of the following: March 31, 2019 December 31, 2018 (in thousands) Accrued bonus and sales commissions $ 6,885 $ 16,121 Accrued payroll and benefits 2,880 4,087 Accrued sub-transfer agent fees 760 1,451 Dividends payable 314 306 Amounts payable under tax receivable agreement 674 674 Short-term operating lease liabilities 2,722 — Other accruals and liabilities 2,725 2,487 Total accrued expenses and other liabilities $ 16,960 $ 25,126 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Components of Lease Expense, and Supplemental Cash Flow Information Related to Leases | The components of lease expense for the three months ended March 31, 2019 were as follows: Three months ended March 31, 2019 (in thousands) Finance lease expense Amortization of right-of-use assets $ 29 Interest on lease liabilities 3 Operating lease expense 923 Short-term lease expense 4 Variable lease expense 46 Sublease income (123 ) Total $ 882 Supplemental cash flow information related to leases for the three months ended March 31, 2019 was as follows: Three months ended March 31, 2019 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 3 Finance cash flows from finance leases $ 27 Operating cash flows from operating leases $ 794 Right-of-use assets obtained in exchange for new lease obligations: Finance leases $ 163 Operating leases $ — |
Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases as of March 31, 2019 was as follows: (in thousands, except lease term and discount rate) March 31, 2019 Finance Leases Finance lease right-of-use assets (1) $ 284 Accrued expenses and other liabilities $ 127 Other long-term liabilities 173 Total finance lease liabilities $ 300 Operating Leases Operating lease right-of-use assets $ 19,957 Accrued expenses and other liabilities $ 2,722 Operating lease liabilities, non-current 20,010 Total operating lease liabilities $ 22,732 Weighted average remaining lease term Finance leases 3.10 years Operating leases 8.03 years Weighted average discount rate Finance leases 4.27 % Operating leases 5.21 % _______________________ (1) Amounts included in other long-term assets within the consolidated statements of financial condition. |
Lessee, Operating Lease, Liability, Maturity | Maturities of lease liabilities were as follows: Twelve month period ending March 31, Finance Leases Operating Leases (in thousands) 2020 $ 137 $ 3,839 2021 82 3,643 2022 53 3,544 2023 30 3,228 2024 20 2,964 Thereafter — 10,695 Total lease payments 322 27,913 Less imputed interest (22 ) (5,181 ) Total lease liabilities $ 300 $ 22,732 |
Finance Lease, Liability, Maturity | Maturities of lease liabilities were as follows: Twelve month period ending March 31, Finance Leases Operating Leases (in thousands) 2020 $ 137 $ 3,839 2021 82 3,643 2022 53 3,544 2023 30 3,228 2024 20 2,964 Thereafter — 10,695 Total lease payments 322 27,913 Less imputed interest (22 ) (5,181 ) Total lease liabilities $ 300 $ 22,732 |
Schedule of Future Minimum Rental Payments for Operating Leases | As of December 31, 2018 , minimum rent payments relating to the office leases for each of the following five years and thereafter were as follows: Year Ending December 31, Minimum Payments (in thousands) 2019 $ 3,748 2020 3,780 2021 3,712 2022 3,668 2023 3,369 Thereafter 13,397 Total undiscounted lease payments $ 31,674 |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Calculation of basic and diluted earnings per share | The following is a reconciliation of the income and share data used in the basic and diluted EPS computations for the three months ended March 31, 2019 and 2018 under the two-class method: Three months ended March 31, 2019 2018 (in thousands, except share data) Net income attributable to controlling and noncontrolling interests $ 2,917 $ 7,273 Less: net income attributable to noncontrolling interests 2,356 6,059 Net income attributable to Manning & Napier, Inc. $ 561 $ 1,214 Less: allocation to participating securities (5 ) 63 Net income available to Class A common stock $ 566 $ 1,151 Weighted average shares of Class A common stock outstanding - basic 14,927,265 14,313,549 Dilutive effect of unvested equity awards 304,183 51,888 Dilutive effect of exchangeable Class A Units 63,349,721 63,918,146 Weighted average shares of Class A common stock outstanding - diluted 78,581,169 78,283,583 Net income available to Class A common stock per share - basic $ 0.04 $ 0.08 Net income available to Class A common stock per share - diluted $ 0.03 $ 0.07 |
Equity Based Compensation (Tabl
Equity Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Compensation [Abstract] | |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | The following table summarizes activity related to awards of restricted stock and restricted stock units (collectively, "stock awards") activity under the Equity Plan for the three months ended March 31, 2019 : Stock Awards Weighted Average Grant Date Fair Value Outstanding at January 1, 2019 1,602,337 $ 5.31 Granted 723,842 $ 2.40 Vested (388,615 ) $ 2.56 Forfeited (15,000 ) $ 12.20 Outstanding at March 31, 2019 1,922,564 $ 4.72 |
Share-based Compensation, Stock Options, Activity | A summary of activity under the Equity Plan related to stock option awards during the three months ended March 31, 2019 is presented below: Stock Option Awards Weighted Average Exercise Price Weighted Average Contractual Term (years) Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2019 — $ — Granted 3,500,000 $ 2.01 Vested — $ — Forfeited — $ — Outstanding at March 31, 2019 3,500,000 $ 2.01 4.1 $ 315 Exercisable at March 31, 2019 — $ — |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The weighted average grant date fair value of service-based options granted during the three months ended March 31, 2019 was $0.62 , using the following assumptions: Three months ended March 31, 2019 Expected volatility 45.00% Expected term (in years) 4.9 - 6.9 Risk-free interest rate 2.49% - 2.58% Expected dividend yield 3.98% |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Tax Provision and Effective Tax Rate | The Company’s income tax provision and effective tax rate were as follows: Three months ended March 31, 2019 2018 (in thousands) Earnings from continuing operations before income taxes $ 3,159 $ 7,751 Effective tax rate 7.7 % 6.2 % Provision for income taxes 242 478 Provision for income taxes at statutory rate 663 1,628 Difference between tax at effective vs. statutory rate $ (421 ) $ (1,150 ) |
Organization and Nature of th_2
Organization and Nature of the Business (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Outside ownership interest in limited liability and limited partnership companies | 1.00% |
Limited Liability Company (LLC) or Limited Partnership (LP), Managing Member or General Partner, Ownership Interest | 18.60% |
Majority Outside Ownership Interest in limited liability and limited partnership companies | 80.40% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)Segment | Dec. 31, 2018USD ($) | |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||
Trading securities, at fair value | $ 9,106 | $ 8,249 |
Accumulated depreciation | $ 11,200 | 11,300 |
Number of segments | Segment | 1 | |
Managed Mutual Funds and Managed Mutual Consolidated Funds | Manning & Napier Fund | ||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||
Trading securities, at fair value | $ 3,900 | $ 3,600 |
Manning & Napier Group, LLC | ||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||
Percentage of economic interest in Manning & Napier Group held by Manning & Napier, Inc (percent) | 18.60% |
Revenue (Disaggregation of Reve
Revenue (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 34,797 | $ 42,224 |
Separately managed accounts | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 21,475 | 25,355 |
Separately managed accounts | Blended Asset [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 16,271 | 18,309 |
Separately managed accounts | Equity Funds [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 4,612 | 6,356 |
Separately managed accounts | Fixed Income Investments [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 592 | 690 |
Mutual funds and collective investment trusts | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 8,228 | 10,980 |
Mutual funds and collective investment trusts | Blended Asset [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 5,055 | 6,452 |
Mutual funds and collective investment trusts | Equity Funds [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 3,106 | 4,488 |
Mutual funds and collective investment trusts | Fixed Income Investments [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 67 | 40 |
Management Fees | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 29,703 | 36,335 |
Management Fees | Blended Asset [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 21,326 | 24,761 |
Management Fees | Equity Funds [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 7,718 | 10,844 |
Management Fees | Fixed Income Investments [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 659 | $ 730 |
Revenue (Schedule of Accounts R
Revenue (Schedule of Accounts Receivable) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Disaggregation of Revenue [Line Items] | ||
Accounts receivable | $ 10,751 | $ 11,447 |
Accounts receivable - third parties | ||
Disaggregation of Revenue [Line Items] | ||
Accounts receivable | 6,318 | 5,342 |
Accounts receivable - affiliated mutual funds and collective investment trusts | ||
Disaggregation of Revenue [Line Items] | ||
Accounts receivable | 4,433 | 6,105 |
Affiliated Mutual Funds [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Accounts receivable | 3,071 | 4,802 |
Affiliated Collective Investment Trusts | ||
Disaggregation of Revenue [Line Items] | ||
Accounts receivable | $ 1,362 | $ 1,303 |
Revenue (Additional Information
Revenue (Additional Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Revenues | $ 34,797 | $ 42,224 | |
Contract with Customer, Asset, Cumulative Catch-up Adjustment to Revenue, Change in Estimate of Transaction Price | 100 | ||
Accrued Accounts Receivable | 300 | $ 200 | |
Contract with Customer, Liability, Revenue Recognized | 7,100 | ||
Capitalized Contract Cost, Net | 1,200 | $ 1,200 | |
Capitalized Contract Cost, Amortization | 100 | ||
Capitalized Contract Cost, Impairment Loss | 100 | ||
Advisory Related Services [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Revenues | 11,100 | 14,500 | |
Separately managed accounts | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Revenues | $ 21,475 | $ 25,355 | |
Customer Contract Period | 7 years | ||
Collective Investment Trust Contracts [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Customer Contract Period | 3 years |
Noncontrolling Interests (Textu
Noncontrolling Interests (Textual) (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Noncontrolling Interest [Line Items] | |||
Purchase of Class A units of Manning & Napier Group, LLC | $ 0 | $ 1,918 | |
Estimated payments due to selling unit holders | $ 17,800 | $ 18,000 | |
Manning & Napier Group, LLC | |||
Noncontrolling Interest [Line Items] | |||
Percentage of economic interest in Manning & Napier Group held by Manning & Napier, Inc (percent) | 18.60% | ||
Manning And Napier Group Holding LLC | |||
Noncontrolling Interest [Line Items] | |||
Percentage of economic interest in Manning & Napier Group held by MN Group Holdings, MNCC and the other members of Manning & Napier Group (percent) | 81.40% | ||
Class A Units | Manning & Napier Group, LLC | |||
Noncontrolling Interest [Line Items] | |||
Noncontrolling Interest, Shares, Total | 77,827,989 | 77,476,457 | |
Percentage of economic interest in Manning & Napier Group held by Manning & Napier, Inc (percent) | 18.60% | 18.20% | |
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests, Shares | 0 | ||
Accrued expenses and other liabilities | |||
Noncontrolling Interest [Line Items] | |||
Estimated payments due to selling unit holders | $ 700 | $ 700 |
Noncontrolling Interests (Recon
Noncontrolling Interests (Reconciliation of Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Noncontrolling Interest [Abstract] | ||
Income before provision for income taxes | $ 3,159 | $ 7,751 |
Less: gain (loss) before provision for income taxes of Manning & Napier, Inc. | 191 | 271 |
Income before provision for income taxes, as adjusted | $ 2,968 | $ 7,480 |
Controlling interest percentage | 18.60% | 18.10% |
Net income attributable to controlling interest | $ 552 | $ 1,352 |
Plus: gain (loss) before provision for income taxes of Manning & Napier, Inc. | 191 | 271 |
Income before income taxes attributable to Manning & Napier, Inc. | 743 | 1,623 |
Less: provision for income taxes of Manning & Napier, Inc. | 182 | 409 |
Net income attributable to Manning & Napier, Inc. | 561 | 1,214 |
Provision for income taxes | $ 242 | $ 478 |
Noncontrolling Interests (Summa
Noncontrolling Interests (Summary of Equity Ownership Interest) (Details) - Manning & Napier Group, LLC | 3 Months Ended |
Mar. 31, 2019shares | |
Noncontrolling Interest [Line Items] | |
Noncontrolling interest ownership percentage by Parent, ending balance | 18.60% |
Class A Units | |
Noncontrolling Interest [Line Items] | |
Noncontrolling Interest, Shares Held by Parent, beginning balance | 14,126,736 |
Noncontrolling Interest, Shares Held by Parent, Issued | 351,532 |
Noncontrolling Interest, Shares Held by Parent, Exchanged | 0 |
Noncontrolling Interest, Shares Held by Parent, ending balance | 14,478,268 |
Noncontrolling Interest, Shared Held by Noncontrolling Owners, beginning balance | 63,349,721 |
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests, Shares | 0 |
Noncontrolling Interest, Shared Held by Noncontrolling Owners, ending balance | 63,349,721 |
Noncontrolling Interest, Shares, Beginning Balance | 77,476,457 |
Noncontrolling Interest, Shares Total, Issued | 351,532 |
Noncontrolling Interest, Shares Total, Exchanged | 0 |
Noncontrolling Interest, Shares, Ending Balance | 77,827,989 |
Noncontrolling interest ownership percentage by Parent, beginning balance | 18.20% |
Noncontrolling Interest, Ownership Percentage by Parent, Issued | 0.40% |
Noncontrolling Interest, Ownership Percentage by Parent, Exchanged | 0.00% |
Noncontrolling interest ownership percentage by Parent, ending balance | 18.60% |
Investment Securities (Company'
Investment Securities (Company's Investment Securities Holdings) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Investment Holdings [Line Items] | ||
Fair Value | $ 79,000 | $ 82,941 |
Trading securities, at fair value | 9,106 | 8,249 |
Total investment securities | 88,106 | 91,190 |
U.S. Treasury notes | ||
Investment Holdings [Line Items] | ||
Cost | 17,561 | 21,613 |
Unrealized Gains | 90 | 36 |
Unrealized Losses | 0 | 0 |
Fair Value | 17,651 | 21,649 |
Fixed income securities | ||
Investment Holdings [Line Items] | ||
Cost | 17,939 | 15,488 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (13) | (75) |
Fair Value | 17,926 | 15,413 |
Short-term investments | ||
Investment Holdings [Line Items] | ||
Cost | 43,423 | 45,879 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | 43,423 | 45,879 |
Equity securities | ||
Investment Holdings [Line Items] | ||
Trading securities, at fair value | 5,242 | 4,683 |
Mutual Funds | ||
Investment Holdings [Line Items] | ||
Trading securities, at fair value | 3,864 | 3,566 |
Manning & Napier Fund | Mutual Funds | ||
Investment Holdings [Line Items] | ||
Trading securities, at fair value | 3,864 | 3,566 |
Level 2 | U.S. Treasury notes | ||
Investment Holdings [Line Items] | ||
Fair Value | 17,651 | 21,649 |
Level 2 | Fixed income securities | ||
Investment Holdings [Line Items] | ||
Fair Value | 17,926 | 15,413 |
Level 2 | Short-term investments | ||
Investment Holdings [Line Items] | ||
Fair Value | 3,198 | 1,965 |
Level 2 | Equity securities | ||
Investment Holdings [Line Items] | ||
Trading securities, at fair value | 0 | 0 |
Level 2 | Mutual Funds | ||
Investment Holdings [Line Items] | ||
Trading securities, at fair value | $ 0 | $ 0 |
Investment Securities (Textual)
Investment Securities (Textual) (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Investments [Abstract] | |||
Recognized net unrealized gains (loss) on trading securities | $ 900,000 | $ (200,000) | |
Available-for-sale Securities, Restricted | 600,000 | $ 600,000 | |
Other than temporary impairment losses | $ 0 | $ 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities, at fair value | $ 9,106 | $ 8,249 |
Available-for-sale securities, at fair value | 79,000 | 82,941 |
Total assets at fair value | 88,106 | 91,190 |
Contingent consideration liability | 0 | 0 |
Total liabilities at fair value | 0 | 0 |
Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities, at fair value | 5,242 | 4,683 |
Fixed income securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, at fair value | 17,926 | 15,413 |
Mutual Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities, at fair value | 3,864 | 3,566 |
Short-term investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, at fair value | 43,423 | 45,879 |
U.S. Treasury notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, at fair value | 17,651 | 21,649 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets at fair value | 49,331 | 52,163 |
Contingent consideration liability | 0 | 0 |
Total liabilities at fair value | 0 | 0 |
Level 1 | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities, at fair value | 5,242 | 4,683 |
Level 1 | Fixed income securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, at fair value | 0 | |
Level 1 | Mutual Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities, at fair value | 3,864 | 3,566 |
Level 1 | Short-term investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, at fair value | 40,225 | 43,914 |
Level 1 | U.S. Treasury notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, at fair value | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets at fair value | 38,775 | 39,027 |
Contingent consideration liability | 0 | 0 |
Total liabilities at fair value | 0 | 0 |
Level 2 | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities, at fair value | 0 | 0 |
Level 2 | Fixed income securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, at fair value | 17,926 | 15,413 |
Level 2 | Mutual Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities, at fair value | 0 | 0 |
Level 2 | Short-term investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, at fair value | 3,198 | 1,965 |
Level 2 | U.S. Treasury notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, at fair value | 17,651 | 21,649 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets at fair value | 0 | 0 |
Contingent consideration liability | 0 | 0 |
Total liabilities at fair value | 0 | 0 |
Level 3 | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities, at fair value | 0 | 0 |
Level 3 | Fixed income securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, at fair value | 0 | |
Level 3 | Mutual Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities, at fair value | 0 | 0 |
Level 3 | Short-term investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, at fair value | 0 | 0 |
Level 3 | U.S. Treasury notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, at fair value | 0 | $ 0 |
Maximum | Rainier Investment Management, LLC | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | $ 32,500 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Accrued bonus and sales commissions | $ 6,885 | $ 16,121 |
Accrued payroll and benefits | 2,880 | 4,087 |
Accrued sub-transfer agent fees | 760 | 1,451 |
Dividends payable | 314 | 306 |
Amounts payable under tax receivable agreement | 674 | 674 |
Short-term operating lease liabilities | 2,722 | |
Other accruals and liabilities | 2,725 | 2,487 |
Total accrued expenses and other liabilities | 16,960 | 25,126 |
Movement In Accrued Employee Severance Costs [Roll Forward] | ||
Accrued employee severance costs as of December 31, 2017 | 1,642 | |
Employee severance costs recognized | 502 | |
Payment of employee severance costs | (1,230) | |
Accrued employee severance costs as of December 31, 2018 | 914 | 1,642 |
Supplemental Employee Retirement Plan | Voluntary Employee Retirement Offering | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Estimated costs and benefits to be recorded | 2,600 | |
Severance costs | 100 | $ 2,200 |
Involuntary Workforce Reduction | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Severance costs | $ 400 |
Leases (Additional Information)
Leases (Additional Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
Leases [Abstract] | |||||
Total lease liabilities | $ 22,732 | $ 23,200 | |||
Operating lease, right-of-use assets | 19,957 | 20,600 | |||
Unamortized deferred lease costs wrote down | 2,600 | ||||
Lessee, Lease, Description [Line Items] | |||||
Shareholders’ equity | 148,908 | $ 146,243 | $ 140,082 | $ 138,360 | |
Sublease income expected | 400 | ||||
Accounting Standards Update 2016-02 | |||||
Lessee, Lease, Description [Line Items] | |||||
Shareholders’ equity | 100 | ||||
Non Controlling Interests | |||||
Lessee, Lease, Description [Line Items] | |||||
Shareholders’ equity | $ (11,488) | $ (13,572) | $ (20,200) | $ (21,921) | |
Non Controlling Interests | Accounting Standards Update 2016-02 | |||||
Lessee, Lease, Description [Line Items] | |||||
Shareholders’ equity | $ 100 | ||||
Minimum | |||||
Lessee, Lease, Description [Line Items] | |||||
Lessee remaining lease term | 1 year | ||||
Maximum | |||||
Lessee, Lease, Description [Line Items] | |||||
Lessee remaining lease term | 9 years |
Leases (Components of Lease Exp
Leases (Components of Lease Expense) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Finance lease expense | |
Amortization of right-of-use assets | $ 29 |
Interest on lease liabilities | 3 |
Operating lease expense | 923 |
Short-term lease expense | 4 |
Variable lease expense | 46 |
Sublease income | (123) |
Total | $ 882 |
Leases (Supplemental Cash Flow
Leases (Supplemental Cash Flow Information related to Leases) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows from finance leases | $ 3 |
Finance cash flows from finance leases | 27 |
Operating cash flows from operating leases | 794 |
Right-of-use assets obtained in exchange for finance lease obligations | 163 |
Right-of-use assets obtained in exchange for operating lease obligations | $ 0 |
Leases (Supplemental Balance Sh
Leases (Supplemental Balance Sheet Information Related to Leases) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Jan. 01, 2019 | |
Leases [Abstract] | ||
Finance lease right-of-use assets | $ 284 | |
Finance lease liabilities, current | 127 | |
Finance lease liabilities, noncurrent | 173 | |
Total finance lease liabilities | 300 | |
Operating lease right-of-use assets | 19,957 | $ 20,600 |
Short-term operating lease liabilities | 2,722 | |
Operating lease liabilities, non-current | 20,010 | |
Total operating lease liabilities | $ 22,732 | $ 23,200 |
Finance Lease, Weighted Average Remaining Lease Term | 3 years 1 month 6 days | |
Operating Lease, Weighted Average Remaining Lease Term | 8 years 12 days | |
Finance Lease, Weighted Average Discount Rate, Percent | 4.27% | |
Operating Lease, Weighted Average Discount Rate, Percent | 5.21% |
Leases (Maturities of Lease Lia
Leases (Maturities of Lease Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 |
Finance Leases | ||
2020 | $ 137 | |
2021 | 82 | |
2022 | 53 | |
2023 | 30 | |
2024 | 20 | |
Thereafter | 0 | |
Total lease payments | 322 | |
Less imputed interest | (22) | |
Total lease liabilities | 300 | |
Operating Leases | ||
2020 | 3,839 | |
2021 | 3,643 | |
2022 | 3,544 | |
2023 | 3,228 | |
2024 | 2,964 | |
Thereafter | 10,695 | |
Total lease payments | 27,913 | |
Less imputed interest | (5,181) | |
Total lease liabilities | $ 22,732 | $ 23,200 |
Leases (Minimum Rent Payments r
Leases (Minimum Rent Payments relating to Office Leases) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 3,748 |
2020 | 3,780 |
2021 | 3,712 |
2022 | 3,668 |
2023 | 3,369 |
Year Ending December 31, | 13,397 |
Total undiscounted lease payments | $ 31,674 |
Earnings per Common Share (Deta
Earnings per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Net income attributable to controlling and noncontrolling interests | $ 2,917 | $ 7,273 |
Less: net income attributable to noncontrolling interests | 2,356 | 6,059 |
Net income attributable to Manning & Napier, Inc. | 561 | 1,214 |
Less: allocation to participating securities | (5) | 63 |
Net income available to Class A common stock | $ 566 | $ 1,151 |
Weighted average shares of Class A common stock outstanding - basic (in shares) | 14,927,265 | 14,313,549 |
Dilutive effect from unvested equity awards (in shares) | 304,183 | 51,888 |
Dilutive effect of exchangeable Class A Units (in shares) | 63,349,721 | 63,918,146 |
Weighted average shares of Class A common stock outstanding - diluted (in shares) | 78,581,169 | 78,283,583 |
Net income available to Class A common stock per share - basic (in dollars per share) | $ 0.04 | $ 0.08 |
Net income available to Class A common stock per share - diluted (in dollars per share) | $ 0.03 | $ 0.07 |
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,413,560 | 866,103 |
Employee Stock Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 3,000,000 |
Equity Based Compensation (Rest
Equity Based Compensation (Restricted Stock Awards) (Details) | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Stock Units | |
Stock unit awards, beginning balance (shares) | shares | 1,602,337 |
Granted (shares) | shares | 723,842 |
Vested (shares) | shares | (388,615) |
Forfeited (shares) | shares | (15,000) |
Stock unit awards, ending balance (shares) | shares | 1,922,564 |
Weighted Average Grant Date Fair Value | |
Stock unit awards, beginning balance, weighted average grant date fair value (dollars per share) | $ / shares | $ 5.31 |
Granted, weighted average grant date fair value (dollars per share) | $ / shares | 2.40 |
Vested, weighted average grant date fair value (dollars per share) | $ / shares | 2.56 |
Forfeited, weighted average grant date fair value (dollars per share) | $ / shares | 12.20 |
Stock unit awards, ending balance, weighted average grant date fair value (dollars per share) | $ / shares | $ 4.72 |
Equity Based Compensation (Text
Equity Based Compensation (Textual) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted, weighted average grant date fair value (dollars per share) | $ 2.40 | |
Aggregate Intrinsic Value, Vested | $ 1 | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 1.4 | |
Granted (in shares) | 3,500,000 | |
Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 0.1 | |
Weighted average period of unrecognized compensation expense (years) | 1 year 5 months | |
Performance Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted, weighted average grant date fair value (dollars per share) | $ 0.38 | |
Granted (in shares) | 3,000,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vesting Term, Target Period | 20 days | |
Service Based Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted, weighted average grant date fair value (dollars per share) | $ 0.62 | |
2011 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 13,142,813 | |
Share-based compensation expense | $ 1.4 | $ 1.2 |
Unrecognized compensation expense related to unvested awards | $ 5.3 | |
Weighted average period of unrecognized compensation expense (years) | 2 years 2 months | |
Minimum | Performance Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vesting Term, Target Price | $ 3.25 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vesting Term, Target Achievement Period From Grant Date | 3 years | |
Maximum | Performance Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vesting Term, Target Price | $ 7.75 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vesting Term, Target Achievement Period From Grant Date | 7 years |
Equity Based Compensation (Stoc
Equity Based Compensation (Stock Option Activity) (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($)$ / sharesshares | |
Stock Option Awards | |
Outstanding at January 1, 2019 (in shares) | shares | 0 |
Granted (in shares) | shares | 3,500,000 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Outstanding at March 31, 2019 (in shares) | shares | 3,500,000 |
Weighted Average Exercise Price | |
Outstanding at January 1, 2019 (in USD per share) | $ / shares | $ 0 |
Granted (in USD per share) | $ / shares | 2.01 |
Vested (in USD per share) | $ / shares | 0 |
Forfeited (in USD per share) | $ / shares | 0 |
Outstanding at March 31, 2019 (in USD per share) | $ / shares | $ 2.01 |
Weighted Average Contractual Term (years) | 4 years 1 month |
Aggregate Intrinsic Value (in thousands) | $ | $ 315 |
Exercisable at March 31, 2019 (in shares) | shares | 0 |
Exercisable at March 31, 2019 (in USD per share) | $ / shares | $ 0 |
Equity Based Compensation (Assu
Equity Based Compensation (Assumptions Used) (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 45.00% |
Expected dividend yield | 3.98% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Minimum | 2.49% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Maximum | 2.58% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (in years) | 4 years 11 months |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (in years) | 6 years 11 months |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Earnings from continuing operations before income taxes | $ 3,159 | $ 7,751 |
Effective Tax Rate (percent) | 7.70% | 6.20% |
Provision for income taxes | $ 242 | $ 478 |
Provision for income taxes at statutory rate | 663 | 1,628 |
Difference between tax at effective vs. statutory rate | $ (421) | $ (1,150) |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||
Accounts receivable | $ 10,751 | $ 11,447 | |
Executive Officer [Member] | |||
Related Party Transaction [Line Items] | |||
Fees earned from related parties | 100 | $ 100 | |
Advisory Fees Waived | 100 | 100 | |
Affiliated Mutual Funds [Member] | |||
Related Party Transaction [Line Items] | |||
Accounts receivable | 3,071 | 4,802 | |
Affiliated Collective Investment Trusts | |||
Related Party Transaction [Line Items] | |||
Accounts receivable | 1,362 | 1,303 | |
Advisory Fees Waived | 1,500 | 1,700 | |
Accounts receivable - affiliated mutual funds and collective investment trusts | |||
Related Party Transaction [Line Items] | |||
Accounts receivable | 4,433 | 6,105 | |
Due from Affiliate, Current | 200 | $ 200 | |
Accounts receivable - affiliated mutual funds and collective investment trusts | Affiliated Entity [Member] | |||
Related Party Transaction [Line Items] | |||
Fees earned from related parties | $ 11,600 | $ 15,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | May 02, 2019 | Mar. 31, 2019 | Mar. 31, 2018 |
Class A common stock | |||
Subsequent Event [Line Items] | |||
Per share dividend declared to the holders of Class A common stock | $ 0.02 | $ 0.08 | |
Subsequent Event | Class A common stock | |||
Subsequent Event [Line Items] | |||
Number of shares exchanged | 1,315,521 | ||
Consideration received on stock exchange | $ 3.1 | ||
Manning & Napier Group, LLC | |||
Subsequent Event [Line Items] | |||
Noncontrolling interest ownership percentage by Parent | 18.60% | ||
Manning & Napier Group, LLC | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Noncontrolling interest ownership percentage by Parent | 18.90% |