NEW YORK, Feb. 17, 2022 (GLOBE NEWSWIRE) — Perella Weinberg Partners (NASDAQ:PWP) today reported financial results for the full year and fourth quarter ended December 31, 2021. The firm reported record revenues of $801.7 million for the year ended December 31, 2021, compared with $519.0 million for the year ended 2020. GAAP net income and adjusted net income were $4.0 million and $160.5 million for the year ended December 31, 2021, respectively, compared with GAAP net loss and adjusted net income of $(24.3) million and $34.6 million for the year ended December 31, 2020. GAAP diluted earnings (loss) per Class A share was $(0.66) for the year ended December 31, 2021. All net income prior to the closing of the business combination with FinTech Acquisition Corp. IV on June 24, 2021 (the “Business Combination”) is allocated to GAAP net income attributable to non-controlling interests and excluded from the earnings per share calculation. Adjusted net income per share has not been presented for the year ended December 31, 2021 as it is not meaningful or comparative to GAAP diluted earnings per share, as it excludes activity prior to the Business Combination on June 24, 2021.
The Firm reported fourth quarter revenues of $198.9 million for the three months ended December 31, 2021 compared with $189.1 million for the three months ended December 31, 2020. GAAP net loss and adjusted net income were $(18.0) million and $38.4 million, respectively, for the three months ended December 31, 2021, compared with GAAP net income of $2.9 million and adjusted net income of $20.6 million for the three months ended December 31, 2020. GAAP diluted net income (loss) per Class A share and adjusted diluted, if-converted net income per Class A share were $(0.26) and $0.33, respectively, for the three months ended December 31, 2021.
“PWP’s record 2021 results were driven by a broad-based rise in M&A activity levels across our industries and geographies. Our strong performance benefited from our historical investment in the business, which we saw play out in our increased scale and in our balanced and diversified revenue contribution. We continue to invest in the platform to support our strategic growth and the build-out of our franchises around the world. Our public listing has accentuated our attention on building long term shareholder value through providing first class advice to clients, adding and developing exceptional talent, demonstrating margin discipline and returning capital to shareholders. As such, this morning we announced the adoption of a $100 million share repurchase plan which underscores the confidence which we have in our business and our ongoing commitment to delivering value to PWP’s shareholders,” stated Peter Weinberg, Chief Executive Officer.
* Throughout this release, adjusted figures represent Non-GAAP information. See “Non-GAAP Financial Measures” and the tables at the end of this release for an explanation of the adjustments and reconciliations to the comparable GAAP numbers.
Selected Financial Data (Unaudited)
(Dollars in Thousands, Except Per Share Amounts)
| U.S. GAAP | Adjusted | |||||||||||||||
| Year Ended December 31, | ||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenues | $ | 801,662 | $ | 518,986 | $ | 801,662 | $ | 518,986 | ||||||||
| Operating expenses | ||||||||||||||||
| Total compensation and benefits | 600,694 | 399,147 | 504,257 | 365,618 | ||||||||||||
| Non-compensation expenses | 134,384 | 134,435 | 122,973 | 113,024 | ||||||||||||
| Operating income (loss) | 66,584 | (14,596 | ) | 174,432 | 40,344 | |||||||||||
| Total non-operating income (expenses) | (43,634 | ) | (6,293 | ) | 2,758 | (2,329 | ) | |||||||||
| Income (loss) before provision for income taxes | 22,950 | (20,889 | ) | 177,190 | 38,015 | |||||||||||
| Income tax benefit (expense) | (18,927 | ) | (3,453 | ) | (16,654 | ) | (3,453 | ) | ||||||||
| Net income (loss) | $ | 4,023 | $ | (24,342 | ) | $ | 160,536 | $ | 34,562 | |||||||
| Net income (loss) attributable to non-controlling interests | 13,444 | |||||||||||||||
| Net income (loss) attributable to Perella Weinberg Partners | $ | (9,421 | ) | |||||||||||||
| Net income (loss) | $ | 160,536 | ||||||||||||||
| Less: Adjusted income tax benefit (expense) | NM | |||||||||||||||
| Add: If-converted tax impact | NM | |||||||||||||||
| Adjusted if-converted net income (loss) | NM | |||||||||||||||
| Net income (loss) per share attributable to Class A common shareholders (1) | ||||||||||||||||
| Basic | $ | (0.22 | ) | |||||||||||||
| Diluted | $ | (0.66 | ) | |||||||||||||
| Diluted, If-Converted (2) | NM | |||||||||||||||
| Weighted-average shares of Class A common stock outstanding (1) | ||||||||||||||||
| Basic | 42,595,712 | |||||||||||||||
| Diluted | 92,749,911 | |||||||||||||||
| (1) | Represents net income (loss) per share of Class A common stock and weighted-average shares of Class A common stock outstanding for the period from June 24, 2021 through December 31, 2021, the period following the Business Combination. |
| (2) | Adjusted net income (loss) per Class A share—Diluted, If Converted for the year ended December 31, 2021 is not meaningful or comparative to GAAP diluted earnings per share, as it excludes activity prior to the Business Combination on June 24, 2021. |
Selected Financial Data (Unaudited)
(Dollars in Thousands, Except Per Share Amounts)
| U.S. GAAP | Adjusted | |||||||||||||||
| Three Months Ended December 31, | ||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenues | $ | 198,913 | $ | 189,145 | $ | 198,913 | $ | 189,145 | ||||||||
| Operating expenses | ||||||||||||||||
| Total compensation and benefits | 162,226 | 151,113 | 118,497 | 136,068 | ||||||||||||
| Non-compensation expenses | 37,306 | 29,864 | 35,382 | 28,219 | ||||||||||||
| Operating income (loss) | (619 | ) | 8,168 | 45,034 | 24,858 | |||||||||||
| Total non-operating income (expenses) | (1,171 | ) | (4,317 | ) | 1,706 | (3,301 | ) | |||||||||
| Income (loss) before provision for income taxes | (1,790 | ) | 3,851 | 46,740 | 21,557 | |||||||||||
| Income tax benefit (expense) | (16,232 | ) | (935 | ) | (8,372 | ) | (935 | ) | ||||||||
| Net income (loss) | $ | (18,022 | ) | $ | 2,916 | $ | 38,368 | $ | 20,622 | |||||||
| Net income (loss) attributable to non-controlling interests | (17,624 | ) | ||||||||||||||
| Net income (loss) attributable to Perella Weinberg Partners | $ | (398 | ) | |||||||||||||
| Net income (loss) | $ | 38,368 | ||||||||||||||
| Less: Adjusted income tax benefit (expense) | 8,372 | |||||||||||||||
| Add: If-converted tax impact | (15,502 | ) | ||||||||||||||
| Adjusted if-converted net income (loss) | $ | 31,238 | ||||||||||||||
| Net income (loss) per share attributable to Class A common shareholders | ||||||||||||||||
| Basic | $ | (0.01 | ) | |||||||||||||
| Diluted | $ | (0.26 | ) | |||||||||||||
| Diluted, If-Converted | $ | 0.33 | ||||||||||||||
| Weighted-average shares of Class A common stock outstanding | ||||||||||||||||
| Basic | 42,591,146 | |||||||||||||||
| Diluted | 92,745,345 | 94,293,814 | ||||||||||||||
Revenues
For the year ended December 31, 2021, revenues were $801.7 million, compared with $519.0 million for 2020, an increase of 54%. For the fourth quarter 2021, revenues were $198.9 million, an increase of 5% from $189.1 million for the fourth quarter 2020. The period-over-period growth, for both the full year and the fourth quarter reflects high levels of activity across several service lines, sectors and geographies. The increase in revenues for the full year period can be attributed to both an increase in the number of advisory transaction completions and the average fee size per client, particularly in mergers and acquisitions advice, as compared to the same period in 2020. The increase in revenues for the fourth quarter 2021 was driven by an increase in average fee size per client as compared to the fourth quarter 2020. The increase in revenues for both the full year and fourth quarter was partially offset by a reduction in restructuring and liability management fees as compared to the prior year.
Expenses
| U.S. GAAP | Adjusted | |||||||||||||||
| (Dollars in thousands) | Year Ended December 31, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Total compensation and benefits | $ | 600,694 | $ | 399,147 | $ | 504,257 | $ | 365,618 | ||||||||
| % of Revenues | 75 | % | 77 | % | 63 | % | 70 | % | ||||||||
| Non-compensation expenses | $ | 134,384 | $ | 134,435 | $ | 122,973 | $ | 113,024 | ||||||||
| % of Revenues | 17 | % | 26 | % | 15 | % | 22 | % | ||||||||
GAAP total compensation and benefits were $600.7 million for the year ended December 31, 2021, compared to $399.1 million for the year ended December 31, 2020. Adjusted total compensation and benefits were $504.3 million for the year ended December 31, 2021, compared to $365.6 million for the year ended December 31, 2020. The increase in GAAP total compensation and benefits was primarily attributable to both a larger bonus accrual associated with the increase in revenue as well as increased equity-based compensation related to PWP’s transition to becoming a publicly-traded company in June 2021. Our GAAP compensation expense includes equity-based compensation expense related to the amortization of transaction-related restricted-stock units (“RSUs”) as well as the amortization of certain partnership units that were granted in connection with the Business Combination which has no economic impact on PWP. The additional equity-based compensation and additional bonus accrual associated with the increase in revenue was partially offset by a lower compensation margin as compared to the prior year period. The increase in adjusted total compensation and benefits for the year ended December 31, 2021 compared to the prior period was primarily attributable to higher revenues despite a lower adjusted compensation margin compared to the prior year period.
GAAP non-compensation expenses were $134.4 million for the year ended December 31, 2021, compared with $134.4 million for the year ended December 31, 2020. Adjusted non-compensation expenses were $123.0 million for the year ended December 31, 2021, compared with $113.0 million for the year ended December 31, 2020. The nominal decrease in GAAP non-compensation expenses was primarily the result of increased professional fees in the second quarter of 2020 related to the write-off of previously deferred offering costs of $14.8 million that were expensed due to termination of an IPO process in May of 2020, which offset other increased professional fees, public company costs and technology and infrastructure initiatives in 2021. The increase in adjusted non-compensation expenses was primarily attributable to certain increased professional fees such as consulting and recruiting, increased public company costs including D&O insurance, and an increase in technology and infrastructure related to certain new initiatives.
| U.S. GAAP | Adjusted | |||||||||||||||
| (Dollars in thousands) | Three Months Ended December 31, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Operating expenses | ||||||||||||||||
| Total compensation and benefits | $ | 162,226 | $ | 151,113 | $ | 118,497 | $ | 136,068 | ||||||||
| % of Revenues | 82 | % | 80 | % | 60 | % | 72 | % | ||||||||
| Non-compensation expenses | $ | 37,306 | $ | 29,864 | $ | 35,382 | $ | 28,219 | ||||||||
| % of Revenues | 19 | % | 16 | % | 18 | % | 15 | % | ||||||||
GAAP total compensation and benefits were $162.2 million for the fourth quarter of 2021, compared to $151.1 million for the fourth quarter of 2020. Adjusted total compensation and benefits were $118.5 million for the fourth quarter of 2021 as compared to $136.1 million for the same period a year ago. The increase in GAAP total compensation and benefits was primarily due to increased equity-based compensation related to PWP’s transition to becoming a publicly-traded company in June 2021. The additional equity-based compensation was partially offset by a lower compensation margin despite higher revenues as compared to the prior year period. The decrease in adjusted total compensation and benefits in the fourth quarter of 2021 compared to the fourth quarter of 2020 was primarily attributable to a lower adjusted compensation margin despite higher revenues as compared to the prior year period.
GAAP non-compensation expenses were $37.3 million for the fourth quarter of 2021, compared with $29.9 million for the fourth quarter of 2020. Adjusted non-compensation expenses were $35.4 million for the fourth quarter of 2021, compared with $28.2 million for the same period a year ago. The increase experienced in both GAAP non-compensation expenses and non-compensation expenses on an adjusted basis was primarily driven by increased professional fees related to consulting and recruiting, increased public company costs including D&O insurance, and an increase in travel and related expenses as pandemic-related travel restrictions ease.
Provision for Income Taxes
As of December 31, 2021, Perella Weinberg Partners owned 45.99% of the operating partnership (PWP Holdings LP) and is subject to corporate U.S. federal and state income tax. Income earned by the operating partnership is subject to certain state, local, and foreign income taxes.
Prior to the close of the Business Combination on June 24, 2021, all of our operating income was derived from the predecessor PWP entity and was not subject to corporate U.S. income tax.
For the three months ended December 31, 2021, for purposes of calculating adjusted if-converted net income, we have presented our results as if all partnership units had been converted to shares of Class A Common Stock, and as if all of our adjusted income before provision for income taxes was subject to an effective tax rate of 33.2%. This rate reflects the average blended rate applicable to the Company since the June 24, 2021 business combination through December 31, 2021.
Balance Sheet and Capital Management
On February 16, 2022, the Company’s Board of Directors authorized the repurchase of shares of the Company’s Class A common stock in an amount up to $100 million, enabling the Company to opportunistically return value to shareholders. The authorization does not require the purchase of any minimum number of shares. Based on the closing price of PWP shares as of February 16, 2022, the full authorization would currently represent approximately 20% of the Company’s outstanding Class A common stock.
PWP may purchase shares from time to time at the discretion of management through open market purchases, privately negotiated transactions, block trades, accelerated or other structured share repurchase programs, or other means. The manner, timing, pricing and amount of any transactions will be subject to the discretion of PWP and may be based upon market conditions and alternative opportunities that PWP may have for the use or investment of its capital. The Company may also from time to time establish one or more plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The repurchase program may be modified, suspended or discontinued at any time.
Since consummation of our business combination on June 24, 2021, PWP Holdings LP made $13 million in pro rata distributions to its partners including PWP, which enabled PWP to pay the quarterly dividends on its Class A common stock, repurchased $12 million in shares from the sponsor of FTIV and redeemed $10 million of common share equivalents through net settlement to satisfy the tax withholding obligations related to vested RSUs.
The Board of Directors of PWP has declared a quarterly dividend of $0.07 per share of Class A common stock. The dividend will be paid on March 17, 2022 to Class A common stockholders of record as of March 3, 2022.
As of December 31, 2021, PWP had $502.8 million of cash and cash equivalents and $311.5 million of accrued compensation liability. The Firm has no outstanding indebtedness and has an undrawn revolving credit facility.
About PWP
Perella Weinberg Partners is a leading global independent advisory firm, providing strategic and financial advice to a broad client base, including corporations, institutions, governments, sovereign wealth funds and the financial sponsor community. The firm offers a wide range of advisory services to clients in the most active industry sectors and global markets. With approximately 600 employees, PWP currently maintains offices in New York, Houston, London, Calgary, Chicago, Denver, Los Angeles, Paris, Munich, and San Francisco. The financial information of PWP herein refers to the business operations of PWP Holdings LP and Subsidiaries.
