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Nicole Kingsley Brunner | Chief Marketing & Strategy Officer |
Marc Mayer | Chairman & CEO |
Paul Battaglia | CFO |
Good evening. My name is Britney, and I will be your conference operator today. At this time, I would like to welcome everyone to the Manning & Napier Third Quarter 2021 Earnings Conference call.
Our hosts for today's call are Nicole Kingsley Brunner, Chief Marketing and Strategy Officer; Marc Mayer, Chairman and Chief Executive Officer; and Paul Battaglia, Chief Financial Officer. Today's call is being recorded and will be available for replay beginning at 8:00 p.m. today. Time Standard Eastern is number XXX-XXX-XXXX. dial-in The required. No passcode is to [Operator over floor pleasure Instructions] is now It turn to the my Ms. Nicole Kingsley Brunner.
XXXX & Thank everyone, you, third Manning for you, quarter Napier's joining us Britney, today to and results. thank discuss
Act Because factors actual Before Securities unknown those we are differ forward-looking remind certain these no these any XXXX. known on made and risks assumes or within and of from statements Napier deemed by obligation statements based meaning forward-looking like Litigation relating statements any that this the statements. not involve guidance, facts, responsibility the everyone forward-looking forward-looking uncertainties, there may call be & update statements. expressed that materially results important during or historical I begin, implied cause Manning would Reform to including could Private to of to financial statements to
to reconciliations Executive earnings During related turn include Mayer. may measures. that, I Chief over reference this the our Marc? in Marc financial found will call GAAP some to call, release filings. be With our non-GAAP Full Officer, SEC comments and can
you, Thank Nicole.
made towards continue quarter, helping track disciplines to investment objectives, strategic meeting on progress this their execute while on stay We our clients on we initiatives. further our
and clients returns performance Our universe much for in saw negative The the fixed quarter of flattish flat the to equity quarter. was muted for across absolute income. returns
than quarter, flat S&P declined. the the and U.S. While the less U.S. X%, outside equity rose the for was equities slightly broader market roughly XXX
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decades a We and want they we to thoughtfully it. returns. architected integrate many our have hires that clients publicly new carefully century, ensure of For embrace our solutions distinctive culture and consistently that our fully superior, audited, culture providing half and available enrich with to prize have been
confident flows are XXXX. time, we management wealth We that positive are patient in accelerate in over and targeting net are results wealth management and will in
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And can Paul? that, turn Paul enable to focus to the on more over to shareholders. details superior with deliver Our total our returns call I'll us financials. for
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against periods by AUM For offset funds XX, fund our X, accounts. level account. months to to $XXX wrap Through that flows, positive We results, we urgency but will reporting row, $XXX the our growth, and the up think, the the of set. XX of the first for net half September net our track and prior. the million important $XX outflows net strength million had quarter from achieve million, our interest million second To into where and to of months in net years flows with have drive product our our net quarter flows inflows significant are the experienced XXXX. equally represents brings we've to outflows outflows year net we the $XXX X collective third to out of outflows first we of collective and collective improvement separate We peers were of continue trust, reported optimistic billion come from a of X we've outflows million through $XXX and X across from fund our with September records approximately when million of in $X.X net and combined from for approximately inflows trusts net net X-year of us net it's from entire and of in our turn across outflows benchmarks strategies, to and positive for and compared a mutual separate remain $X recognize XXXX of levels sustainable the recognize we
redemption that report redemption pandemic, the institutional provided. during to client official received and to $XXX the that originally notice decision further client's to want I just we was in now Lastly, various of a January due will XXXX, occur is side, note the notice terminate that has exacerbated It been the made XXXX. to million by on complications worthwhile
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and then, decision reiterate this is we are we that earlier. reflection stated made we where firm mid-XXXX, were in of Our not decision undergone that Despite today. enormous where believe will a since this news, point an I originally transformation was Marc has the this
XXXX. Our positive cash goal remains net flow to be in
was in InvestCloud several the Turning last the compared consulting quarter down with from $XX.X in quarter implementation. other to third rose The and or during by with fees last of comparing XX% million representing And margin for at slightly $X.X of as to last sales increase expenses line fees by being approximately been $XX,XXX operating expenses quarter that were an offset income of Compensation We $XX.X overall last that for an for operating were X% a and to hiring third costs of of growth slightly Compensation custody Operating quarter, expenses increased quarter. of to quarter headcount over effectively a revenue on modest of income $X with against related million attributable of by the steady When balance our X%. of ceded to and place. are losses XX%. points. payroll operating revenue non-operating additional last along and quarter to our our by the a $X.X XX% incurred in took in accruals and revenue Other operating with and increased And revenue. revenue. of costs have costs XXXX. other operating third compared resulting the primarily XXX. reported XX%. million reported $XXX,XXX Distribution, expenses costs revenue nearly products the and quarter, we result costs other in P&L. is $XXX,XXX revenues, a a operating We -- basis decreased quarter, and unchanged in quarter, related increased related operating expenses increase during case we million. with a costs increasing of XX to were in pre-tax compensation a points percentage again increase quarter no margins effectively XX% servicing the variable compensation in third our change reported sequentially with loss as since stemming $XX.X reported QX, that the increase as stemming the quarters decreases of operating quarter sheet, revenue $XXX,XXX from from million on to in percentage of driven million marketable revenue XX quarter expenses increase overall average basis X%, partially With sequential our the the severance securities
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to for with $X.XX reported economic September reported $XXX adjusted returned from as share revenue of during mid-teens income the $X.XX last reported economic We've $X.XX quarter $XX which the is the income our in to first rates overall rate third adjusted results XX. tax basis XXXX. After the XX% taxes, for we revenue share, with QX of per of half normalized in approximately net or now compared in our points. up income this summarize the XX of and through Our generally per line margins year million, million $X.X accounting net and adjusted rate of respectively. XX% I'll non-GAAP time in effective year, QX, of million
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operating to we year. result, of last through a As $XX income $X compared million time million reported this
improvement Our share year-to-date per from share notable adjusted adjusted non-GAAP earnings of continues $X.XX per in be to a XXXX. $X.XX
with another $XX We unitholders. the to what outstanding change XX, cash of example September as million only compared in on is cash June and capital structure legacy balance by $XX investments of million in the about improved our X% XX. to of remaining we Turning approximately an sheet. shares of increase reported adjusted held reported This
Our periods have simpler, more more efficient capital even to mid-year place. QX during structure we like cash rapidly allows taking incentive payouts when accumulate us
We continue maintain a structure. to capital debt-free
completed share share following capital of returned $X to return of approved initiatives, we through we month, The nearly our payout authorized next last $X.X we reinstatement shareholders in prior of will $X.X any quarter pace may share Board the Upon in progress start our million of third and of place. quarter. on the year. returning any fourth cash quarter, returned our We'll of dividend purchases $X.XX of that of considering to Regarding during of quarter, on the XXXX million have million shareholders Directors through A dividend. the September share slowed further for dividend of total, remaining Class out million shareholders our our the to that the And will provide during fourth yesterday, call. the have capital announced the a have repurchases the dividend -- per take Directors Board updates by XX, next capital $XX to at we
ownership. to Turning
during are our outstanding provided investor adjusted on XX. shares Our The the of components September shares in million decreased XX the adjusted adjusted share shares outstanding supplement. Slide as quarter by of to approximately count XX XXX,XXX
XX% common directors our and own approximately of unvested XX% Class count, employees the and share of stock. of the As including adjusted September XX, A awards approximately votable
vestings share in XXXX. units and restricted unvested RSUs already upcoming awarded again the take As These December previously of XXXX accounted are adjusted for we count $XX ahead, will place look there million. February that of in stock are in
will However, A count. upon vesting, the to they share Class added be
time tax Class vesting count until known Class vesting. A not by settlements though shares and of the and will awards of the the of of net satisfy withholding these with amount company. exchange withhold retired the have the been awards options, the approximately requirements. stock precise share effect stock connection will unvests, historical A our equity that XXX,XXX increase when the repurchased share by to shares In income We shares These of common are estimating employee practice to be has
result result, In provide the increase are our vesting. call. outstanding updated the of of our next goals expect are we outstanding decline settled upon will the metrics RSU closing, and a will for taxes the vestings a As way as adjusted Class shares shares XXXX on share A clear. count because We'll
and line headcount, with flows more will First to We best overall activity deliver positive. to to continue for Thinking foremost, be Sustainable strong must way further and XXXX increase leverage we structure, turn increased revenues. to given top value. results along remain clients P&L, them help net expansion their managing existing goals. inflows our our achieve sales investment and cost exceptional achieve financial current our results, must to growth including shareholder investment our those margin our boost gross prudently we client about client committed
are make We continuing investments committed business to to equally in to growth initiatives. our support
however, will spending strategic clients of XXXX shareholders, initiatives also in have opportunity those up, result technology expenses. timing and will past been over of to be incurred as and and plausible depreciation made amount of compared few namely technology-related begin interest be the from as of Under investments when years, to That remember area the include the of next a an a we these of these that increase to the support few the is earnings initiatives strong and with that on to will to digital a amortization, value over be to support cash -- said, and from now ramp important in of The the our quarters. installations for depreciation us. deployed best can of return all that final scenarios, operations XXXX expect today's behind continue earnings our to timing completion us will driving That it is also accumulating or shareholders. that scenario continue be the especially call. operations from to while with pursue the non-cash cash to non-cash the decrease afford P&L sheet amortization. majority concludes We remaining during XXXX, expenses transformation the that result strength contingent expenses an of generate balance P&L virtually It our to will costs that non-cash
If in inquiries for now Investor any on Manning we've I'll addressed interest you website, the over to inquiry. & operator portal Napier. the Relations listening we'll contact please on questions turn our address your Operator? today, up. and And the promptly call using for again, us have to Thank back topics and your the you, wrap
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