SAMG - Earnings call transcript Q3 2018 | Silvercrest Asset Management Group Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Silvercrest Asset Management Group Inc.

Third Quarter 2018 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

Before we begin, let me remind you that during today's call, Silvercrest will make forward-looking statements pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding future events and developments, and Silvercrest's future performance as well as management's current expectations, beliefs, plans, estimates or projections relating to the future are forward-looking statements. only events. on are projections expectations statements future about forward-looking predictions current based and These statements subject that forward-looking achievements and results, These are of to there and of level the are uncertainties differ risks materially important statements performance factors activity, could from actual to cause or a made. number and adverse brand growth are the focusing on management other fluctuations factors annual strategy, these of to quarterly and Silvercrest results, of effects a maintain incurrence factors disclosed Among in of and failure develop net the losses, listed implementation company's filed XXXX, report year “Risk the filings those in the with the XX, annual under Factors” with including SEC, the company's on factors for December entitled, Form SEC. XX-K the caption ended in statements as be words and these likely, can forward-looking other goal, project, estimate, plan, of expressions. these believe, anticipate, will, negative by such could, may, continue, words similar the predict, identified some In plural expect or cases, statements future current These forward-looking on its events. projections Silvercrest's and expectations are predictions based about forward-looking update Mr. of and obligation for introduce conference, the host no are Silvercrest I assumes made date to made as your on All forward-looking now like hereof, statements today's would to this these call statements Rick CEO of Hough, Chairman Silvercrest. and you may Sir, begin.

Richard Hough

X% client The achieved drives everyone in you, third of quarter $XXX of to third by an third increase capital thank has the under $X.X discretionary the during high million end assets driven quarter, increased under over Silvercrest's growth. $XX.X of good discretionary it [ph] of firm management management AUM new prior by and assets joining billion results. XXXX. of in capital XXXX. firm's the Lynn Silvercrest quarter new you, quarterly billion us and for revenue, markets. our approximately for the a markets primarily XXXX year-over-year, Thank organic quarter experienced its increase driven discretionary A

complete its superb the assets, with of our increased CIO outsourced aggressively quarter plan net investment of would has business business result discretionary to team. announced during groundwork have in increased the also grow firm Silvercrest's firm's second complement business, year-over-year. the that investment X.X% revenue growth We the its Silvercrest a value-added quarterly launched addition As high has by and a to pipeline and opportunities. a We we advisory capability. good this Silvercrest laid in the worth for of business, future developed family professionals

to grow our management, to determined initiatives, new now office management, family strategic for potential acquisitions, capital intellectual are asset new and hiring capabilities. and the We asset prepared management outsourced capital institutional use wealth businesses. including We CIO our remain of

I'll the common of In October Directors and addition, Scott XX. or questions. XXXX, of about on Thank XX, that, declared XX, our on to stock close as company's turn of Class business share Gerard, of per will shareholders December and be A paid the you. CFO, dividend on we dividend it Board then With over our to record December of that will of $X.XX take quarterly

Scott Gerard

Thanks, Rick.

of as was quarter of income $XX.X release the and total $X.X million. for the net same for quarter $XX.X XX, quarter September disclosed our And for third as in was XXXX, reported consolidated the Revenue was as AUM discretionary So the billion. billion, period million. $XX.X earnings was AUM

of hired because as increase effect in New year the benefits and general expense merit-based an increase increases a of $X.X of lease and in And XX% and on up, $X.X $XX.X more growth October primarily of for million million million result a million increases of was Class units same the net of restricted for outstanding the EPS. result adjusted equal Reported in effect driven hired which in was same giving Expenses York share assuming year, on by This million $XX.X to the for Looking a revenue and earnings revenue of and $X Act, last the occupancy period net EBITDA management and quarter, had cost as to went we advisory million or the X result fees newly detail of $X.X third compensation compute $X.X quarter, as in City expense, approximately and in Tax accrual approximately primarily, expense and nonrecurring Cuts both to million, G&A adjusted corporate increase the year. compensation increased beginning X, noncore third increase expenses salary Jobs approximately a by new for for ago. consolidated shares million revenue revenue end basic EPS. also income $X.XX Class rate a attributable increases approximately net of the B increase was of approximately as $X and Comp as define EBITDA, tax the extent share. approximately to representing expenses & of of income million, And same shares in the or newly in to actual and or the January year. increased of outstanding share. giving items, without bonuses, diluted The XX% effect to per Silvercrest in basic Adjusted from divided and basic as same had compared as primarily we XXXX. million was income this increase of due total we compared $XX.X this to staff. in A result for cost of $X.X income, a third without of an was to Class for that for that or for $XX.X the for period to represented items, quarter diluted to the $X.X and were which our the net is X% to we primarily unvested the million AUM. net expense increase XX.X% a noncore, approximately of benefits was Adjusted of last reporting attributable quarter a and of per A year. quarter, periods period XXXX, define took A XX.X% quarter the last of recruiting Class to million. the Reported nonrecurring and or adjusted dilutive, period was the related adjusted third the XXXX This administrative to Adjusted shareholders income for diluted income period quarter staff. stock equity-based per $X.XX during the

the for the as in in and months of the increases $XX.X quarter by were attributable, of ended ended the was and up again, same of again, advisory for and went newly and $XX.X $XX.X again, approximately increase $X.X expense. in last management was of G&A The year that of from last was bonuses, increased September for comp expense approximately revenue a at This a G&A year. period revenue because represented represented similar this of same increased both and period growth million, our And million was $XX.X to This million and $X.X as driven the -- of increase increased driven months, of by, AUM. merit-based Looking increased increased increase staff. this a million, million. result approximately a this salary year. XX, and XX% benefits nine increase expenses rent for XX% expense for the fees nine Expenses increase result primarily benefits hired was accrual Again, comp million. increase

some million net were And ended that in sub-advisory Reported for ended amortization nine to and period $X.XX the for revenue. In $X.X $XX.X expenses. last per from Adjusted this hired was year as a diluted to share. year, this and and months then result miscellaneous Silvercrest the recruiting $XX.X and the offset other period same the of of depreciation Class revenue of ended advisory this or addition compared to XX.X% months addition million revenue compared increases A $XX.X increased fees or or to These nine the XX.X% to income attributable consolidated year. last a was to newly million same months the was in basic by million G&A referral for income September increased year, that year. EBITDA cost partially decrease net expense. related sub nine for million $XX.X and Reported staff

Looking XX, per adjusted this was $X.XX year net September $XX.X outstanding year. the no amount share as it we that basic year. the balance end income, were and of equivalents last as and at $XXX.X year of million compared ended notes at months September end to Cash at million million XX $X.XX the that last XX adjusted $X.X last the or $XX.X September of million were adjusted this had approximately for diluted a have We cash assets year. outstanding of compares sheet, per about approximately $XX.X payable million at the at looking and nine and at of $XXX.X million of small to total Quickly share. end and

Lastly, to over year. total Rick, this That turn concludes million September I'll of Class equity to my stockholders’ go approximately A XX we'll $XX.X at was it remarks. Q&A. and

Richard Hough

Thanks very much, Scott. talk about take business. Thanks. the questions, This time we'll

Operator

And with question Brian from Boston comes Instructions] Rohman our first Thank you. [Operator Partners.

line now is Your open.

Brian Rohman

Good for question. morning. taking Thanks my

Richard Hough

morning. Good Brian. Sure,

Brian Rohman

your these pinpoint lives? couple outsourced or and are Just any you initiatives highlight of there the office initiatives, questions quick can -- a too yet, -- early here; revenue still family advisory; are in two CIO any revenues

Richard Hough

Yes.

to after their as side family important For they Brian, seeks explain a they still acting business. families, wealthy that on efforts as -- think role And the the their advisory they’re businesses, new part, business as behind table things business rationale one, Number advisory recapitalize, same new. to fiduciary let the will done I family the development be effort most of the very in capacity, have long perhaps, a me well. business look sale. strategic of restructure The is term early. undertake for too an families That with it serve helping the in as

operating be not as will or investment We bankers bankers.

will net Silvercrest family open high really before. those term. to good We have so worth and professionals that with felt to situations, long in We the grow those working is the relationship over benefit what that the be liquidity, a those they new to lead for will have Obviously, long-term client initiative that's have faced our may through need assets the that's order to families help initiatives base, they in proactive advice of the hope managed a families provide more a and through helping desire about. find strictly never to

hired. future the that current It'll regards develops, and in size, in on early. with We're Yes? opportunity at it’s mover announced itself. But So, add of families. regards to long-term the revenue as of too it very needle the expect really business we've It's it. big the something. excited way about its the don’t with new be just behalf new to a professional AUM to business We’ve I

Brian Rohman

generate something that Will AUM? fees, advisory fees from other than

Richard Hough

of we are It's on fees Yes. those the a we behalf these table projects we And each matter Correct. businesses. it for side the undertake that providing convert then, assets we family for because to where into would advice hope advisory of discretionary can relationships, of their is trusting that on management.

Brian Rohman

And the business, farther you’re that kind along little Okay. but a with it. CIO like of

Richard Hough

little We're right. a further along, much a larger build. team That's Correct. to it’s

As business on hired I our just third We we the that, that an were update we in announced quarter. professional. him last hiring during development call. him hired

can getting just couple we’re So going. of a interesting I things. report that

significant. nice quite all, pipeline business. a have RFP very of we for First It’s that

take it expect it about institutional to to will but just a excited meaningful some build do we the business us bear time took we’re time, fruit. It some here, So as opportunity.

institutions a from that family label group, we on providing advice the revenue and seen to -- we for that the last versus financial Secondly, basis other the this nine months year. of increased of months offices and year XX% white nine are the have over

some lot group a and revenue the in that us giving to support is that new So experience hires. more

look we've about which one Third, allocation our results asset good done indices We the is peers, by against track main well index, of of foundations. against others, that. endowments asset NACUBO feel we we performance and and very so our for of favorable our course, allocation the that used track

you management and as know, are, first. We an an investing asset firm

don't So that Brian. get have report I otherwise, this at we right time, for well have that anything and bodes that to to effort. But

Brian Rohman

number? a Okay. answer. outflows number, other seems The just That’s like big Two good questions.

Richard Hough

is it, yes, XX. $XX had pretty closed it’s of we accounts worth was closed We level It account And on -- net the flows no cash just have we mean accounts, high side. closed at existing accounts, the tiny. from net But lost you relationships look out had that we if million. I did would accounts have moderate.

about $XXX It's that's Now million. pretty small.

you we We flows business. The as for outflow strong the million, into as had mentioned I was primarily have past before, this $XXX big year the years unusually had, taxes. over few paying know,

always is tough a quarter Second very one.

overcome, in at So about all. moderated it's And that unusual Those definitely it nothing quarter. to but tough going see numbers. are to was the I be third lumpy

Brian Rohman

you And forgot quarter the Cash in a I have Last don’t was debt, third year, the depending you’ve measure number. but -- versus built or $X your of the are share quarter, for to on the at plans what of the EBITDA generating any number got you on balance sheet of cash, Uses in question. good beginning cash. very five $X the you’re a cash. how it, thoughts? sort it

Richard Hough

Yes. asking. for Thanks

your agree I with one, observations. number So

is structure in capital definitely one Our direction. weighted

built cash We debt have zero of significant amount and up.

Brian Rohman

enviable, position financial your be. describe will to so good point I as

Richard Hough

capital But the across mean look and number we services it, been that say distributed financial about the of strong was, I will I’ll cash really strong intention our having we $X point years our the increasing adjusted efficiently policy And I dividend couple firm I over prudent. that it through for one, table, So if out most dividend we it financial XX me felt the to doesn’t when announced that. is at reiterate our it, this thoughts, and it is EBITDA, also good that were of a see continue a hit before million dividend the right? our was very nice for have crisis quarter is volatility. this ago, a now, quarter. wondering was what just a let have in have a It that position just I supporting number we you as shareholders flow, think, and

distributions, announced in there in that used on cash to the pay cash cash course, goes to even the road affect we hire And that spring dividend is some for which support our there the sufficient were bumps is C if we of pay to the revenue. we markets, dividend. As there significant is would to time, Corp, new hit the that

a there to intention policy. just very course, cap to our I company. been, dividend our maintain this is stock options, that. is of thinking Historically, is small Other reiterate So a has buyback. want our

That which out shareholders. careful in the potential limited shareholders have liquidity of and obvious extent affect as bit stock. said, it's time other the We we push liquidity have to we there, we diluted to and out could about somewhat the that very amount there to and effects. stock both about, are institutional shareholders, a talk want the have we don’t a available thinking buy who definitely is do with more over with to for and We be for and market are there and have the potential something sell requirements board,

debt Brian, and implied account, take with your just may statement that no let in it. say We the I that, a for on the we purpose to But fact strategic cash. also sheet, a is question me understand there have into have that balance

Brian Rohman

you Fair answers. your enough. Okay. very right. All much Good Thank quarter. for

Richard Hough

Thank it. you very Appreciate much Ryan.

Operator

Instructions] time, any Thank And not Rick any now turn call I’m you. closing back I this over showing to further [Operator would for questions. to the like Hough remarks. Mr. at

Richard Hough

capability mention wasn’t our review of should but a you morning solid. in organic thanks the equity flows each searches One and as us we great value that we're are quarter. and our we the equity very was we I and have SMid-cap much, business on income to progress we good call of it third thank and to discuss this making in flows it; after large-cap marketplace Great, on large-cap is was small-cap It great you as involved for into for thing seeing and joining terms focused quarter. discussed, in the didn't the institutional introduced income. It

those as what both into very of that, but and contributor past terms out do institutional we have profitability that about revenue the building the to the of marketplace. in and business in look future. feel positioned expect the business, how we've good So the been quality another business team achieve, overall strategies the We is and of well to we that able the in to

hiring combine side strategy company. and with of of with personnel on would new are can you say that implement bottom the net CIO the So that this determined to some additional contribute I attempting to new long-term by high initiatives worth businesses. line our on outsourced are who aggressively some capability, along grow we we revenue the based to And our those

we've make our I larger joining profitable so we build Thank I of as much. from a shareholders support appreciate company. morning. this and us those to all appreciate more And very the you that received you investments

Operator

and and disconnect. today’s program you a Ladies gentlemen, Everyone, thank conference. in today’s does conclude you This may participating have all for day. wonderful

Silvercrest Asset Management (SAMG) 4 Nov 182018 Q3 Earnings call transcript