Moelis & Company (MC) 22 Apr 202020 Q1 Earnings call transcript

Company Profile

Participants

Chett Mandel	Vice President of Investor Relations
Ken Moelis	Chairman and Chief Executive Officer
Joe Simon	Chief Financial Officer
Ken Worthington	JPMorgan
Devin Ryan	JMP Securities
Manan Gosalia	Morgan Stanley
Brennan Hawken	UBS
Jeff Harte	Piper Sandler
Michael Brown	KBW
Matt Coad	Autonomous Research

Call transcript

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Operator

Good day, and welcome to the Moelis & Company First Quarter Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Chett Mandel, VP of Investor Relations. ahead. go Please

Chett Mandel

afternoon, Moelis Good conference you joining for Thank Company’s and first for & results quarter us you. thank XXXX call. financial

CEO; Financial phone Moelis, the are and and Joe On Simon, Officer. today Chief Chairman Ken

Moelis Before section which remarks may on Company’s the in note to & made identified to subject in I of various we Risk forward-looking uncertainties, this time statements, from the including would those begin, with certain to SEC that earnings like our contain the are call Factors risks the filings and time and release.

could from differ Actual anticipated. results statements. to materially Firm obligation undertakes no forward-looking currently any update those

useful include when compare our to believe references today and financial adjusted results these across comments several presented measures. better results. comparable measures, with operating periods understand our We are investors Our together to to to measures, GAAP

measures these can Relations is and investors.moelis.com. by information of required adjusted reconciliation website firm’s A release, the the financial information financial our relevant Investor other found on in earnings G GAAP Reg at with provided be which

Ken now discuss call the over to turn to our results. I’ll

Ken Moelis

Thanks, Chett, everyone. afternoon, and good

support the our health During crisis, adapted to quickly a and from health home efforts in well-being we work of team. world to COVID-XX the

environment, defeat helping ingenuity have We challenging human and unprecedented focus need absolute certainly time. has and our have during pandemic. faith science to And active I been quality very in an been this who in clients advice, judgment this while this

has quarter XXXX. world of The changed during completely first the

we focus clear economy, impact virus March. the clients business global first and of radically we the from now balance nothing the importance completely third advising in like months sheets the shifted their month, From year where right the became is would that on our were it models. The and to different moment the two of were

needs, adapt and of Companies this new better and their the should they our environment. to liquidity are expertise to how capital understand business resilience seeking their

you fundamentals – model balance I and are our our is the through to clients as these matters are walk business these the right the just well. now, own it of Moelis that to felt So as of central strength sheet important

have So fortress and we a substantial balance liquidity. first, sheet

and We an revolver. of cash million have undrawn $XXX

absolutely our zero We balance sheet. debt have on

we and And undertaken have space any low-cost favorable have Third, importantly, for very we obligations. on most lease commitments not growth. additional

So on balance we have we there. obligations last, no from have virtually cash lot of a years. prior And flexibility arising compensation sheet,

business model. Secondly, the our strength of

team world. have We the solutions restructuring capital and in the best

structure the firm best Our the firm delivers collaborative one seamlessly the with one to of full and bring capabilities model client. commission segmented the no P&L to solutions

needs resources has We levels since have rapidly our to led support the changing March. which the already shifted to tremendous strong of firm of the activity throughout middle clients,

most on same M&A transactions be of probably in but the are will significant this having dialogues, hiatus time, still environment. At we these

As deliberation, dividend uncertain our share. halved indicated prudent per thing the do current our in press Modifying regular we environment. regular to release, is our after the to dividend in careful $X.XXX

William late comes reliably favorite Screen winning was the quote, pick movies. knows He One and "Nobody from of the anything." in a to Adventures Trade, Goldman of Goldman. all-time the quotes book, by to experts ability wrote movie my I referring

of we know the I until unknown that describes environment sentiment capital have retain the economic decided accurately feel and so today’s timing to recovery, more. we

the if business special of to and and restore dividend, more all excess our future and certain activity to not remain a we However, committed when our declare stabilizes, appropriate. hesitate we will is capital dividend shareholders to returning

the final Joe? who it with environment. pass to now I’ll conclude walk you then few thoughts our through will financial Joe, I’ll and results, on a

Joe Simon

market most has transactions million, its restructuring capabilities, quarter confident increase year of period. of our a capital business, the coupled hold markets in with quarter, tremendous prior Toward caused delayed the we COVID-XX. those first earned longer-term uncertainty contribution. our Ken. time, saw with very deals Thanks, and we to of by the feel XX% end put about the We experienced same up $XXX the mandates revenues At from volatility due on recently, being and

there in short-term restructuring on and raising However, earn as retainers lag but interim we period earn is capital completion a transition fees fees, we a expect most the before transactions.

expenses. Moving to

expense to are first compensation in always compensation And quarter adjusted was charges. fixed due for costs the annual payroll first tax equity our slightly grants retirement XX%. Our elevated the accounting ratio and quarter

period. versus restrictions in ratio implemented decreased non-compensation non-compensation business XX% Our prior March. XX% and to for XX% prior travel expenses largely of year Absolute versus due distancing XXXX by of other year, most development the the for was social declined quarter expenses the first driven

Moving to taxes.

corporate overall tax award was the underlying the primarily tax before for equity This rate tax in an net discrete quarter XX.X% related resulted our the quarter. benefits, Our for settlements. to benefit

And to back I’ll now the hand Ken. call

Ken Moelis

Thanks, Joe.

XX-year control. will will by this. and my an never the coming global but with medical experts lot are be conclude a in what through cessation unpredictable out happen circumstances and different by cycles many experienced So seen governments, that I’ve completely weeks crisis. and A environments and of career, caused I’ve economic of let dictated health our me months

importance. having collaborative fortress of and Because business paramount a the recovery model the timing is diversified, of balance sheet a and is flexible uncertain,

do come we execute and puts to in for our best, a what clients’ position empower prepared, us have We expectations exceed employees, shareholders. our which it our do is

open that, I’ll with questions. And to up it

Operator

question-and-answer the will come Our begin now question We’ll from first JPMorgan. with [Operator Instructions] Worthington Ken session.

Ken Worthington

costs for I’ll Hi, good questions. afternoon, and taking questions. thank you my to for my stick

compensation, the on for in in seemed accrued have compensation the the second level compensation in of And first Moelis in like may part averaged million the year. first year to under- compensation quarter. half of a $XXX under of hindsight, $XX move and for the it touched the and higher So year’s Last year million.

the revenue that is a comfortable for low or XXXX, level level compensation versus to is figure persist comfortable would of million would kind to feels is XXXX not? And we a sort that right year? is – for with So if think the that about as XXXX $XXX the you less that you in million, that about so, $XX of of a rest suggest generation or in if a feel that

Ken Moelis

am to is, know. I careful. be try to answer don’t going I very The

have the was quarter, I that, was next come year pursuant first – control over. we this not – Ken, think did – quarter. got really the I’m I the the maybe it a a first couple if soon the unknowable, end the and they first and we’ve to as of I so of is recovery the to believe that quarters going that ratios quarter quarters as no year are even again,

to as There’s can cure tools the no use the the I CEO virus affect expertise. economy to and back to on, medical turn the

this So wait in all what regard, and that’s to know going see around going how unfolds, have when I I’m what really that decisions the just – we all to that going am to make And and year more. we’re – leave to it – we as we’ll say.

Ken Worthington

Okay, okay.

fair. side, for in the it’s And slowdown on of the of towards social quarter, and end happened distancing full sort not so think I travel quarter. the the the non-compensation then

if as terms the that travel part was at of out of XQ? on What an has guess meeting expect least assumption slow the that As about really get we remains distancing my road. are I think as that, with continues. is latter throw slowed, my And the in that’s social and think guys of you and what assumption the out we maybe travel guys sort is But the non-comp maybe from should should non-comp? the quarter, correct, clients for to assumption error if we it about able in I’ll and next you

Ken Moelis

meetings not Joe lot a lot of – having in-person on correct and of not You’re that. a we’re flights.

you you that? – So to want have do take Joe, do

Joe Simon

absolute Yes, amount natural in look, as non-comp. background, year, And sure. XXXX, decreased still a I we XXXX, headcount. you versus recall, in T&E. of so while mean, seeing we the reduction we’re reviewing non-comp This constantly overall just are adding dollar might

be I’d million less a second into second other And also probably taking on $XX think than We’re action quarter. I the going of quarter variety expect to areas. the

Ken Worthington

Okay, great. Thank much. very you

Ken Moelis

Yes.

Operator

Our next with question comes Securities. Devin Ryan JMP from

Devin Ryan

Joe. afternoon, Ken, Good Great. and

Ken Moelis

Good afternoon, Devin.

Devin Ryan

upside trying long the line and our I the time A is and frequently restructuring appreciate question restructuring frame clients closings. revenues, restructuring from I get on pretty for case to

the how of was a the better get the just beginning the stress continues? set kind there much you guys so to do prior good think guys But little have a cycle? I for about appreciate extent firm at be think given that of doubling to any frameworks tends of you And bit maybe potential how that M&A slows. a upside Or or the other as there you opinion as could And mismatch conditions kind restructuring business of really more? pretty up is about case, this

Ken Moelis

to number, have Yes. know, like easy. but doubling hard I exact seems don’t it’s an it’s and

it and can now been calls surprised was can forward, I go we think in stop said, up. and go fast I’ve the it’s picking going are go? of the over pleasantly ramp backward, like and there is fast car And up, We – you going a put how how transition – probably we from and when fast. we’re at level going conversations again, as we it get Joe

one reasons of the think benefits the is of business. I relationship M&A is, one a is,

you. the years weeks and be before and and sorry, clients the will on over hire had years to road You they out your before meeting weeks –

that I’ve of always of is business. restructuring kind type said department fire a

don’t restructure going places balance a your sheet with You because on and aren’t the thinking to most you’re planning time person that. spend lot who’s that of not

calls much interaction. less the is barrier, in so being that actually and there having And fairly of are immediate not a person personal not

It’s and kid’s able out I And said, an or When the we’re just or stunning as had or to and then is we’ve to quickly we minutes calls that, everybody up people, ideas nobody at or on XX on Board top dinner efficiency. help at airplane of done work their X because, a calls meeting. with extremely a later. come for get gotten ballgame phone, on

think, to four business short the last M&A over you three, fairly I the answer So a large became is, years.

can cycle, restructuring work paper to team. how probably there. advice whole it. it almost last one And five every cycle, we’ve don’t or our think one I gets this that larger we guy said, in from to too. was our replace our sure I restructuring actually worked, I went be that XXXX, on people We cycle, M&A to more. restructuring. we’re firm, making looked to could lot one, committed retained over promoted know much the from given And a working of he that than MDs within and ever MDs, transitioned finding out back except In as be and and time XXXX But was

Devin Ryan

normal that clear are there’s pretty What helpful, you more more as there’s follow-up every but kind the of willingness it’s the just move signposts Very clients anything, moment? from and of Ken. maybe M&A it. versus forward uncertainty. if company but a we’re And the in would a much maybe from to bit of on starting corporate moved some behaving that well. between of at on early your sponsors nuance And and here, Got here, to talking as of a little they’re then up different how any indicators the suggest of a an still clients a pretty about world some as bit days, And maybe back focus lot spin, thinking and transaction? the think dialogues on business that to of outside would a kind pick operations hyper health their about employees you’re

Ken Moelis

in equity And lot return at the say you’re secured lot close – because volume of lot – or to of in a are PIPE almost about in They’re common above they’re for I around for a position is and call that it, you’re rates just return There levels of I’d So transactional sometimes transactions. There’s financing. risk-adjusted control. M&A. coming stock a a rescue those, talking of return. not

of there right is So lot now and that’s going. transactions a where they’re

able as it to underwrite think the you able XX we’ll see almost see when it, have signpost be the be and next I you’ll months. to

some to months XX next underwrite after either. of cannot even you the of XX you couldn’t certainty do if the right operations or company now level a buy cannot that, You months

government out reaction that most remember how figure figuring that’s that, it again, because and slow health control we’re financial crisis financial the outside reasons on to not expertise maybe your a you is. in you I M&A do, could has long to to of out own wage the you and to And is one what of to crisis. say XXXX a the of crisis, wanted goes because also The of and in want In how crisis could again management purview deep the was and to boards the down. this, teams crisis just underwrite of health

have I C-suite, own destiny your the things, to think into boardroom your the control or the you come So ability two see to inside back company. somewhere

are even not healthcare there. to level of your the way, negatively in And can in outcomes. control need business are You think some this, some by an M&A to or significant companies there’s a are are you technology why able I that you do. not to involved uniquely and There the affected And is underwrite to are. that’s that – be need that by own but be amount significant also the majority able economy that

Devin Ryan

there’s is in similar of here have there differences there equity thoughts it’s values M&A? outside all and of say corporates or And and there lower, in I kind Right. there’s fair I maybe difference and terms is firms a any still that your equities maybe could need those guess kind that so financing would more moved nuance mean, but use leverage, some between of on all have the or swap. also versus are conversations of sponsors reacting any kind you how a quite

Ken Moelis

say in to is your and prospects, due environment. become if you Even a to stock stock with No. business have you diligence think person’s have your is other underwrite to because it’s the very do model. hard comfortable do going which and swap of low, do own this fairly due to and able similar, diligence be you sort I’d to business you’re do

So that’s difficult.

the to they attracting is of more it I And I trying are think part where than looking the are market. transactions. financing the get But you willing say I middle do risk-adjusted capital at to for only think do their will on their this think lastly The come. doing to available to I track sponsors rescue for in is most large put caps. And and opportunities, attention whole time Financing things. can being I’ll company back be that think is, thing to difficult going already the

that start helped companies the has junk and angel, the the even open to move to you’ve market. of investment-grade seen You’ve and rushed credits have liquidity some fallen Fed’s really buy – the to seen

leveraged back take that has after, part think some I well. don’t time market the might is basic that that financing market – for of rebuilding the longer is this middle time people rebuild coming and that to have as company financing, a going to

Devin Ryan

it Yes. Appreciate, Got it. Ken. I’ll leave there.

Ken Moelis

Thanks.

Operator

Stanley. question Our next comes from Manan Gosalia Morgan with

Manan Gosalia

Hi, good afternoon.

a pivot doubling in see mentioned there for capacity that to of restructuring team much limit business, how easy you right facing You take possible. significant restructuring how pressure industries to spike you that it a are multiple on now towards you very have and could given more your is is entire restructuring? Is activity, on pretty

Ken Moelis

good you a started thing. good capital read restructuring. it’s very rescue that markets and starting for restructuring might is It’s we – thing. And trade, it pricey do Yes, type as with can as the awhile, markets having would of ending opportunity. a by in total going of you we really think think be for way, remember limit? By I I way, which financing It’s how a way the might if lot has so there’s I the A by as companies there is might – not the be this No, the terrible be do It’s and in stayed a is restructuring. to most think a more capital amount But limit. restructuring. I this good. define a what and for for immediate doubling see baseline we up the environment of it. depends that

get you’re more I have kind think workforce they of very an mean, as business. that. to you a it’s businesses, senior Managing learn some the in is our Director, to those So one if much the reason, willing trouble of of into want I to don’t is sometimes directors new part flexible – managing

Director restructuring ago and told know, he grid I a who a a what Google’d hired him when went my few we good home he a he told Managing had group, does. group energy said, know a was, restructuring he think, really shook that’s in me, what years hand, we to I didn’t restructuring then

our he’s have but restructuring before. we it’s probably, that not guy probably he’s he’s and our in Now happening group, media experienced in retail, restructuring in most that’s happened

And so really will I expand think expand, we could rapidly. the very workforce

dedicated sort people. have restructuring XX of XX or We

one pretty leadership. will how We to leadership will two will our pair do deals their with it. in They be in them space up then expert do and or the

Manan Gosalia

a can and then, know, little thinking Got you’re I some in short-term said billion more $XXX it. liquidity? high what us helpful. you separately, than your had how know you’ve you in you you securities and give have And that’s quarters. about That’s on cash

I you dividend before wondering up? back building would you buffer was So what be comfortable take the

Ken Moelis

not It’s the really buffer.

We look. have in we’re great – a

We no debt. have

We have burn rate. a low

We we’re or as back I bit have a lease move. just I embarrassed cures are work. and it’s have was Fine, go little things thing all careful somebody no low move. be I’ll offensive an that than anybody a happen, the two view we very it offensive cash. this could And, a to and believe pay further. deferred I’ll and could structure best There I overly behold, special. that

I think this to the grow. prepared time take to get is to

talent the that used people I moment thing a could XX last we have eight & was only People went available. ever plus we to in acquire And what’s hired It regretted? Moelis never when year. I greatest public, five the ago me one ask Company to the crisis. created was years becomes we said,

the banks have in, or their its that work people environment, to they boutiques big going this want going could of they’re them. want and great they’re in going and for, to look whether in companies a that career balance they think of to to at are safety sheets I front know be

buffer, it’s opportunity. an me the is we so can not this be that have to So the offensive aggressive if move we

Manan Gosalia

Got it. my for questions. taking Thanks

Operator

comes Hawken UBS. next Brennan with from Our question

Brennan Hawken

question. Hey, good evening. the Thanks taking for

Ken Moelis

Brennan. Hi,

Brennan Hawken

on follow clear up since with your something on and the IPO. would been I of that’s And mean, for I very, to guess, the I question. seems point. wanted strength very I balance you is sheet agree certainly dividend this you flagged it you priority the a that

leading the that, this move dividend, be of such the to that think might what is a about asset, a sending balance you’re not maybe strong then think such is worried if facing, move I so seen of as to you cutting you are or mixed sheet, confusion of weakness. message whether some some strength have And an if wonder might which not lead it��s or usually you

built And do up light over the fortress what that sheet risk balance sending a especially many to of of years? you so in have these wrong you’ve message, is the the how priority balance

Ken Moelis

that’s people So We way, dividend said, are we lot the there like there spectrum, By I’d question. the good half? that there out science like be. it It skipping you and a a about of felt felt let’s thought, ranges to good a the around was yes, half. a thought that. fair. a the are extreme place We lot obviously go to but tell to of

our payout we lot much lot share competitors easier. say of method capital weren’t in and have purchase. the spigot share repurchase recently has can dividend one, stock. managed until our capital They that dividends. lower net things, our excess are And the of have return of a in stop buying out almost comps through comps, let’s a been to pay a A two XXX% income Now

is part really have the but So last asked extra the we the said it’ll the I prepared for the that is this. is stretching. and and franchise. shareholder I’ve to nobody but we of happen said, are not is is investment the be in base, X% what and decided the we’re in it and a of biggest happen do because, look, grow an largest happened myself the the own largest won’t because want else and a employee way the best will to cash to year we probably best going me non-receiver And this a good in I’ve in – past. bank People by be It’ll downturn markets world, that

I’m going XX% the And too, there’s Tony to is, everybody on – decision. grow it’s not in going if gear. I’m when it my might I to the Trump, we Fauci under answer it’s not lastly driving the I lot was a here, things important – people car long And or was up I’m market. give of it’s don’t can. when Donald and to during do car I for with know to decisions and can bad and different of but here I XX% driving But know. Brennan, think say, I not you trying Governors, and a the get a If that control, the I back I what could to predict

it going give because post we for. the the clean play this if much happened to And franchise now keep doesn’t my not be valuable what three advantage what tough matter we our crisis, That’s cards sheet to I tougher it, to know crisis. advantage And years I gets. will happen kept I’m if that it financial but how than extremely that from get want that’s this, balance it. a five during to I’m hope more right. keep keep will I I’ve no up going

Brennan Hawken

too thank approach in pretty using it also is dividend set the is for up the that comp and have all might. regular others it topic that. but philosophy quickly same a it than it also a adjusting the you the say have it as the repurchase you’re that… Moelis the quickly Is the to is described around like more philosophy is you Is And some specialists, of used more Okay, difference now, valve, what share is more a much, others just in ratcheted flexible you In then to you actually. my other follow-up the – dividend. words, overstating just on maybe a

Ken Moelis

No.

Brennan Hawken

Okay.

Ken Moelis

No.

raised I last years a in every Let reason raising that We now were raised from we our really dividend That year. my dividend one doing. mind did those is, of slightly. and dividend guys, we raise. me what be have And that you wanted it plan. I was the And XX I it be would some, that’s to aristocrat, was my I tell have we’d

I But nobody shut they’d ended in shut told up maybe The me of for in unknowable of a the have but my dividend because or and economy did the be amount I would of? have the I franchise planning the balance only down, the home we most chose, world whole a XX did powerful around sheet, run advantage decided could like be dividend I Roger one an Maris’ want powerful – we balance I think other they’ll that didn’t economy. global chose skipped and with a I to good years or just aristocrat We that from and be Asterisk. franchise pandemic. position now aristocrats the chose want the footnote take I during I hope like It’d did one. to I day, have said

Operator

next Sandler. with question Jeff Harte Piper comes Our from

Jeff Harte

guys. that like longer, talked me, be to the think for and to appears kind impact normally kind to very from recognition it M&A? extent longer. or revenue that make of timeline active pandemic give may and to of kind you environment restructuring you one, Hey, strategic of recognition being kind what that string things Can of timeline be would doing out what us revenue good with of an idea evening and being the Couple you about

Ken Moelis

restructuring that’s But, has longer months just restructuring had you fee about some usually XX become and monthly leveraged months, I I’ll to in you cash to a court, the slightly may a XX months therefore situation could actually, of it’s depending have of there Look, amount it’s In so stream have restructuring, now. either we’ve six this be the do shorter. think something and term, get and I some had is it��s less I out leverage. the mean, short much EBITDA go solution immediate. to is I that it why, but go crisis. pandemic that it you goes court, zero the how whether or liquidity gone between short-term. problem less and shorter some and – zero substantial to over we’ve there’s of a very kind want a – a If of an out companies revenue a and have becomes six capital tell

have to fix balance you’re fix position. You trying do the sheet. don’t enough time the to All is cash

So a assignments is amount capital of as the substantial to be quicker early be XX usual six to actually, but might I markets, fundamentally a think and restructuring. conclusion reported months could here

Jeff Harte

I of to, And Okay. tends say, of, that along there. is would fee environment capital give in us that idea those general lines, kind markets some markets advisory see would mean, to potential for expect sizes think, a I the relative there’s of that out normal advisory? up pick can with advisory, advisory, – capital even up some And kind what pick you a as well? to bring you to

Ken Moelis

Normal M&A advisory?

Jeff Harte

of capital advisory it mean, in idea – Just Yes. size on be on fee or kind it I’m trying of can general advisory I of normal versus to just what transactions? underwriting? get the how markets versus falls versus an kind

Ken Moelis

is fee pool in. rescue has capital But X – the The still X kind smaller. in – to points anywhere liquidity all brought being of X place, been is probably secured it capital, now, as from of of on much over depends is some the private of Equity points. because much credit. coming course, Right capital point but it’s

coming in is unsecured. Some

of I points into X anywhere be point secured rescue financing, is go like I Some going from to broad the preferred lot PIPE, from a going – be as – financing would as There’s brush. you to I’d equity. large a bet going guess is but to on the it like on it’s And PIPE and some broad, say it’s get the equity. could specifics, X as

Jeff Harte

I Okay. conversations side, And guess I’m a about taking bit how the far a of underlying can turn get acting much little client how as place? maybe in talk maybe prior as they on finally you ongoing how C-suite focus they’re are and on recessions? back more me, for dialogue, to to survival compares mode, of feel strategic has for in could trying kind today it strategically desire not so in to kind quickly. still If

Ken Moelis

Well, a – crisis, of coming good we quality the there of into end a just lot had was the assets. backlog

markets so to assets best when As as I The ready used all-time I will And valuation, highs good and in said, were assets come a art up. a the high, we you good their world in I valuations in January, substantial to getting we are are February put think, a that. best people the very had had peaking because market example. backlog – have

continuing So that talk them. to we’re with about

the that, forward. moving should conversation not should And lot weeks, we, way, that happened of few we. them a a on we’ve in really We’re for By put hiatus.

And of market people they’d dialogue. talking about back. if what accomplish So comes part the like are the to then that’s

do that of I be an maybe it’s, So thinking they’ll and think at that that’s and interesting I think should and that kind about we It’s – thing. maybe asset – something there’s need it price, wouldn’t I approach. to just should say – we

finger it’s on say So the but they wouldn’t the conversational, I have trigger.

Jeff Harte

you. Okay. Thank

Operator

from Brown question Michael Our KBW. with comes next

Michael Brown

Hey, guys. good evening

Ken Moelis

Hi.

Michael Brown

one a couple you So wave we than there. stimulus announcement element quick how my how at cycle? you about cycle, that and next restructuring had off, other it’s get get do given of rollout And the have kind think of impact possible questions And then think was cycles? to some this market will how been And say, most is, wears about programs. is this your different kind follow-on asked, programs with I some restructuring. support I see the kind just to how We second QE yourself these of year? when of saw to just of prior the really I on quite but trying of came thoughts wanted of for to help a one of government it treasury the on

typical mandates? color Thanks. they gave fees of could Just kind little to on bit as you out and those how a you side, some of advisory the compare color debt play give how on

Ken Moelis

Okay.

second to we about So don’t talk with I’m start I – to specific going assignments. one. No. don’t the want

talk announced about look, first was you oh, So was, were – I know. Fed about still I so asked it, but I question policies how the that I And again, won’t. don’t will I do know can’t publicly, about so think the

try As could to a a with "Nobody I like be don’t think here. so I I stick anything," wave. there genius knows the said, But to point, to your second be

consumer? and went have I I the the a day. me, come Lehman come do, what’s every they they feel to And didn’t every when it damage day. mom-and-pop This of depth happening your on to will in to it’s is day. What liquidity a people unbelievable, what’s bars do the like, It’s the this work to jobs the XXXX go Brothers come and on. XX% going now every shut again, about. if crises the most down There retail, of But And the just the but with it’s guess, went the job? haven’t to crisis, didn’t going to restaurants, to firm crisis, – they going work money going comparing was had in and waves. in right then, what’s

do second derivatives and don’t and we all who their third to structure, make to going that consumer There’s How distance be in socially is have to travel scared and the those. money it’s liquidity. spend. the a And to wave. businesses fly second And I a Today, goes know do conservative. being so I’m it yes, have don’t about yet. And you’ll I hand. be think chance to think why replay there’ll

will down think, I road, leverage. about be the it

Michael Brown

just And one quick Okay. follow-up.

to So opportunity you’re for is consider, environment. the uncertain it sounds the Is time that environment, color you given, the your significant down for the looking hiring, dividend environment repositioning also existing and the of could saw Clearly, need in on But what to kind similar very reassess of gave like outlook the there industry financial you appreciate radically the that hunkering a crisis. all kind for of some for the an to kind that given to in relative workforce? really you may has happen shift I changed. a in this change

workforce? any to kind about as Thanks. of So color existing the thinking

Ken Moelis

we’ll workforce it We the some to as have event. during every of we’ve day we and management your not do crisis. say operation. of out. places, I shape point, for address we happy Last if will we time. planning take wrong Yes. want the have if you. people shape pretty second, the to year, a We COVID, majority this And wrong a being, the a anything we’re – the shape do with we continuously. the an maybe post Thank continuously. moved the of have. the It’s changes, doing – But whole what for the People hard look, been every the that. continuing don’t we’re you not time it’s And year, workforce of how industry, in anything, work

Look, a we because to always be going all in. give we expertise, could had could we grow move and we we’ll new if And XX% that not want the contacting about sector maybe have room we this expense work estate less we we help, why on lot have to our all really real industries. to out. want we will we home. a great question – needs can their pointed And restructuring up it’s from it But finally about XX% expansion And world do so don’t yes, bankers to restructuring, everybody I going question, be lease XX% when We even because there’s that so connectivity. be was the XX% of have your look, to if do figure the XX% that’s about reassess. out excess talking thought is, you if but we It’s tight, it expansion. less, lot of

that we And happy we’re those of when the look shape our don’t at obligations. what coverage again, So know happened. workforce, work I’m in whole we’ll we the have back and to

Michael Brown

Thank questions. my for taking Okay. you Great.

Operator

from with Autonomous next comes Our Matt Research. Coad question

Matt Coad

And Thanks fine. Ken really just this it taking question. strange Joe. making guys are Hey, you and I through time hope for the

on incredibly you you stand economy could various and conversations this right and of to have open-ended it’s M&A one like the activity globe, cycle But leaders provide once I could have begins business on now. a potential one, any across know the country recover? given So with ramifications take difficult your like we to tell number with the where

Ken Moelis

Okay.

that real from get – able optimistic good has companies, they very leverage M&A thing a have wave. not possible the you So a over but Look, they’re happened and this – there may not to and their M&A is industries feet. concentrated very going continuing sheets restructuring survive environment their up lot the think see a in who folks large industry to had accessibility really see to a we obviously a are balance you to and – could are large consolidate doing And end just have I capital. out it’s middle I have you to back be it’s consolidation that of biggest wave people in this who on a a market industries could the really where And consolidation. with you very the and a also middle

why outcome being you we so could both things lot. likely happen. do have very that’s that And I and see a a can And

marketing. We have great middle

that’s the it a think event. large to next a it but If great could this-year be year, – happen, think have happen. But I starts cover that could see We happen. We I don’t will that I cap. everything.

Matt Coad

the a just Awesome. and just Thanks – Is typical like success? there between Ken. kind kind And question broad-brush nitpicky guidance could restructuring. mix contract of on any you of then of fee one progress retention give on

Ken Moelis

call $XXX look, where like – to And complex usually It’s never the if million with different with a them Obviously, more. than dealing XXX are $X trouble, ones monthlies with lot a because that’s in of, then a are billion. dealing a the way. success a $XXX,XXX there’s I success, $XXX,XXX. of by you’re to if some a vast within different, big company it, everything the can’t charge who’s you’re And you is range give you majority – ratio company with

way, not working have are They a than usually in The So range. But monthlies end easy-to-define a ratio. by in larger ratio size. it’s the the very can get a because range fee, of the that so kind fees you’re And a transaction then doesn’t been of that, certain back more want there. success standard is you get to by no monthlies. if then, there’s has

Joe Simon

But on of maybe thinking this a the total fee in the the is the – form of and, X/X in in fee, comes X/Xs average. at another we’ve typically, of form the of comes X/X and or past fee about way completion looked of typically it retainers

Matt Coad

much, you Thank so Awesome. guys.

Operator

question is Our with Hawken from UBS. follow-up next a Brennan

Brennan Hawken

taking my for follow-up. thanks Hey,

benefit one, the I be company just quick a that your what Act unaware that. taxes? the of, another you Act I’m and heard you of how Just and through it but Could something CARES guys? might haven’t to benefit flows piece to walk find through just

Ken Moelis

Yes. I’ll let Joe that. do

Joe Simon

Yes.

current net with trying full rate operating virtually forecast, to discrete come five this be a back a than year rather CARES uncertainties, up carried the our So impossible. we permits Act to calculating tax years. on were that’s on losses quarterly Based basis year

we one, So in NOL generate to had stock income, the generate for tax. quarter we size accordingly, due an that large GAAP we but

taxable the benefit. That ultimately for is starting to that applying quarter had corporate comes tax It’s we the rate years today, what NOL through NOL the then with calculated applied the And XX%. income, rate when to XX%. so was XXXX, differential

Brennan Hawken

Okay. Thanks for that Joe.

Joe Simon

Sure.

Operator

like turn concludes session. to This remarks. conference Moelis would any question-and-answer the I over back to our Ken for closing

Ken Moelis

you Thank everybody. Okay.

I side Miyakawa know wanted is banker, all over to have throw of Miyakawa you’ve transitioning to past I and to I’m contributions important Before over Mandel, Michele who of sure Chett some and thank Michele Relations worked for member try and her closely the is business. a firm, banking a of five the founding go, Investor met the back Taking with a business. she She’s as the got years. Please her. to lot function you great have

families your as thoughts forward your and time are stay navigate time. speaking My again, extended Thanks. this we and to of healthy, with soon. safe look you families with this we afternoon. thank your and you Please for So you, all difficult

Operator

concluded. now Thank attending today’s you The for conference presentation. has

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