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Investor Presentation
March 31, 2016
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include the information concerning future results of operations, business strategies, financing plans, competitive position, potential growth opportunities, potential operating performance improvements, benefits resulting from the separation of PJT Partners from Blackstone, the effects of competition and the effects of future legislation or regulations. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “might,” “should,” “could” or the negative of these terms or similar expressions. Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in such forward-looking statements. You should not put undue reliance on any forward-looking statements contained herein. PJT Partners undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. The risk factors discussed in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2015, as well as the other filings made by PJT Partners with the Securities and Exchange Commission, could cause the results of PJT Partners to differ materially from those expressed in forward-looking statements. There may be other risks and uncertainties that PJT Partners is unable to predict at this time or that are not currently expected to have a material adverse effect on its business. Any such risks could cause the results of PJT Partners to differ materially from those expressed in forward-looking statements. Non-GAAP Financial Measures This presentation contains certain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”) in the statements of operations, financial condition or statements of cash flow of the company. The Company has provided a reconciliation of non-GAAP financial measures in the Appendix to this presentation. These financial non-GAAP measures are presented because management believes that such a financial measures, when viewed with the Company’s results of operations in accordance with GAAP provide additional information to investors about certain transaction-related charges arising from the spin-off related transactions. You should not consider these non-GAAP financial measures in isolation or as a substitute for analysis of results as reported under GAAP. For additional information about our non-GAAP financial measures, see our filings with the Securities and Exchange Commission. Disclaimers This document is “as is” and is based, in part, on information obtained from other sources. Our use of such information does not imply that we have independently verified or necessarily agree with any of such information, and we have assumed and relied upon the accuracy and completeness of such information for purposes of this document. Neither we nor any of our affiliates or agents, make any representation or warranty, express or implied, in relation to the accuracy or completeness of the information contained in this document or any oral information provided in connection herewith, or any data it generates and expressly disclaim any and all liability (whether direct or indirect, in contract, tort or otherwise) in relation to any of such information or any errors or omissions therein. Any views or terms contained herein are preliminary, and are based on financial, economic, market and other conditions prevailing as of the date of this document and are subject to change. We undertake no obligations or responsibility to update any of the information contained in this document. Past performance does not guarantee or predict future performance. This document does not constitute an offer to sell or the solicitation of an offer to buy any security, nor does it constitute an offer or commitment to lend, syndicate or arrange a financing, underwrite or purchase or act as an agent or advisor or in any other capacity with respect to any transaction, or commit capital, or to participate in any trading strategies, and does not constitute legal, regulatory, accounting or tax advice to the recipient. This document does not constitute and should not be considered as any form of financial opinion or recommendation by us or any of our affiliates. This document is not a research report nor should it be construed as such. Presentation of Information All facts, metrics and other information provided herein are presented as of March 31, 2016 unless otherwise stated.
Copyright © 2016, PJT Partners Inc. (and its affiliates, as applicable).
Notices and Disclaimers
2
A Powerful Beginning
> 30-years new: proven track record with start-up feel
> Premier destination for best-in-class talent
> Unshackled from constraints to better pursue opportunities
> Bringing together relationships and capabilities to better serve clients
3
Built to be an alpha play
A Start-Up with Instant Scale
Note: Data as of March 31, 2016.
8 offices Headquartered in New York, NY
48 partners
38 Americas, 10 Europe
368 employees
261 Americas, 97 Europe, 10 Asia-Pacific
20+ years Average partner experience
October 1, 2015 Merger and Spin-off; NYSE listing
30 Years
Proven track record with start-up feel
4
Unshackled from Constraints to Be Even More Powerful
Historical Constraints
Financial Sponsors Investing Businesses
within Blackstone Corporate Clients
Strategic Advisory
Restructuring & Special Situations
Park Hill
5
Bringing Together Relationships and Capabilities to Better Serve Clients
Strategic Advisory
Park Hill Restructuring
Access
Relationships
Transaction Flows
Capital
6
Create long-term value
Make a difference
Be part of a premier franchise
Be surrounded by leading talent
Client relationships
Collaboration
Premier Destination for Best-in-Class Talent
WHAT WE OFFER WHAT WE VALUE
Alpha players with:
Content
Character
7
8
PJT Partners Strategic Initiatives
> Enhance collaboration among our three businesses to better serve clients
> Capitalize on our significantly expanded addressable market
> Significantly increase the breadth and depth of our Advisory franchise
> Remain the premier destination for talent
Park Hill: The Leading Intermediary in the Alternative Asset Space
(1) As of March 31, 2016. (2) Prominent Placement Agents in 2015.
2005 Year established
84 Professionals in New York, Chicago, Hong Kong, London, San Francisco and Sydney(1)
3,000+ Investor relationships
20+ Average years of experience across 14 partners(1)
$276bn+ Raised by Park Hill clients since inception, representing 221 primary funds(1)
#1 Placement Agent 2016 Preqin Global Private Equity & Venture Capital Report(2)
9
Park Hill: Leading Market Position in Each of the Principal Alternative Asset Categories
10
Private Equity Hedge Fund Real Estate Secondary Advisory
> Buyouts
> Sector Specific
> Energy
> Distressed
> Special Situations
> Credit-Direct Lending
> Infrastructure
> Long/Short Equity
> Global Macro
> Event-Driven
> Structured Finance
> Commodities
> Credit
> Multi-strats
> Opportunistic & Value-Add
> Sector & Regional Operator Strategies
> Core/Core+ (Closed & Open-End)
> Debt
> JV Programs
> Direct Recaps
> LP Fund Portfolios
> Fund Recaps
> Securitizations
11
Park Hill: Leading Market Share and Brand Recognition
Scale enables product specialization
SPECIALIST MODEL
CONSISTENT PROCESS
GLOBAL REACH
Leading position in each vertical allows cross collaboration
New cross vertical products
UNRIVALED SCALE
FREQUENT MANAGER IDENTIFICATION
12
Park Hill: Growth Opportunities
Benefit from PJT Advisory Alignment
> Leveraging investor relationships across Advisory and Park Hill
> Portfolio monetization opportunities
> Bespoke investment opportunities
> Enhanced real estate capabilities/collaboration
Build Out Existing Capabilities/Execute on
Core Strengths
> Continue to capture GP recapitalization and securitization opportunities
> Increase market share via specialist model
> Expand breadth of products across all four verticals
Restructuring & Special Situations: Market Leadership in Advising Distressed Companies
(1) As of March 31, 2016 (2) Represents total liabilities restructured by professionals based in New York and London. Certain transactions were previously attributed to the advisory business.
MBLM
1991 Year established
72 Professionals based in New York and London(1)
~470 Distressed advisory situations(1)
#1 Worldwide and US Completed and Announced Restructuring – Thomson Reuters 1Q 2016(1)
20+ Average years of experience across 13 partners(1)
~$1.8 trillion Total liabilities restructured(1)(2)
13
14
Restructuring & Special Situations: Global Reach and Unmatched Expertise
B T A BANK
Completed Restructurings in More than 30 Countries
In-Court Assignments Creditor Assignments Out-of-Court Assignments
Caesars Entertainment
Foxwoods Casino
Mohegan Tribal Gaming
New World Resources
Arch Coal
Walter Energy
Dow Corning
Specialty Products Holding
W.R. Grace & Co.
CEDC
Eastman Kodak
Hostess Brands
Dynegy
Edison Mission Energy
Energy Future Holdings
Ambac Financial Group
MBIA re: Bank of America
Northern Rock
Cengage Learning
Houghton Mifflin
GateHouse Media
15
Restructuring & Special Situations: Significant Industry Expertise and Experience in Key Sectors
Gaming
Chemicals Coal Communications
Consumer Products Energy & Power Financial Services
Healthcare Leisure Manufacturing Media
Municipal Oil & Gas Publishing Real Estate
Retail Shipping Sovereign Transportation
Clearwire
Lightsquared
Oi
Angiotech Pharmaceuticals
Four Seasons Health Care
M*Modal
Indianapolis Downs
Los Angeles Dodgers
Travelport
Covalent Materials
Essar Steel Algoma
NewPage
CSN Houston
Relativity Media
Tribune Company
Detroit
Jefferson County
Puerto Rico
Endeavour International
OGX
Samson Resources
Homex
Kerzner International
IVG Immobilien
Barneys New York
BCBG Max Azria Group
J.C. Penney
Genco Shipping & Trading
ZIM Integrated Shipping
Nautilus Holdings
Dubai World
Greece
Iceland
Delta Air Lines
Gol
Kenya Airways
Ford Motor Company
General Motors
Goodyear Tire & Rubber
Automotive
16
Restructuring & Special Situations: Growth Opportunities
Stronger M&A/Capital Markets Advisory Presence
> Enhanced M&A capabilities and industry expertise complement the skillset and business dynamics of Restructuring
‒ Ability to leverage strong industry expertise and relationships and deep market insights
‒ M&A and Capital Markets Advisory leadership provide differentiation vis-à-vis competitors
> Advisory relationships facilitate earlier client introductions
Expanded Sponsor Opportunities
> Increases opportunities to expand PE relationships
‒ Sponsor owned businesses represent recurring revenue stream
‒ More opportunities to advise on distressed M&A transactions
‒ Eliminates reluctance to do business with a competitor
‒ Eliminates concerns about the optics of hiring Blackstone to assist with troubled investments
Unencumbered
> Eliminates conflicts with Blackstone’s hundreds of billions of credit, real estate and private equity investments/dry powder
‒ Passed on numerous substantial assignments due to conflicts (e.g. Lehman Brothers)
> Creates opportunity to transform Blackstone/GSO relationships into a more traditional client/advisor relationship
Strategic Advisory: Small Firm Feel with Big Firm Capabilities
As of March 31, 2016. 17
10 Product Experts
5 Partners with 20+ years experience at previous firm
7 Regional Experts
7 Institutions Represented
13 Industry Experts
9 Partners with 10+ years experience at previous firm
18… and counting Partners
100% Former Group Heads/Senior Management Positions
Strategic Advisory: Breadth of Services & Capabilities
Providing independent M&A and capital markets advisory services to corporate clients and raising capital from the private and public capital markets
Overview
> Serve as advisor to companies, management teams, boards of directors and sponsors regarding the timing, structuring and process of raising equity and debt capital in the private or public markets.
Scope of services includes:
> Capital structure advisory
> Capital markets support to M&A Advisory and Restructuring
> Capital structure optimization
> Debt execution assistance
> Covenant review and assessment
> Pre-IPO advisory
> IPO advisory
Overview
> Serve as placement agent to companies looking to raise private equity, equity-linked or debt capital, including helping the company prepare to approach the capital markets, managing all aspects of contact with potential investors, and structuring and negotiating the transaction.
Scope of services includes:
> Pre-IPO private capital raises
> Founder / sponsor secondary monetization
> Minority / structured equity raises
> Joint ventures / capital formation
> Dual-track M&A and private placement
> Acquisition-related PIPEs
> Sponsor-style / negotiated PIPEs
Private Capital Markets
18
Providing M&A and capital markets advisory services to corporate clients and raising capital from the private and public capital markets
Capital Markets Advisory M&A
Overview
> Serve as advisor to companies, management teams, boards of directors and sponsors on strategic acquisitions, divestitures, and combinations. Provide customized M&A and corporate finance solutions with dedicated Structured Products team.
Scope of services includes:
> Mergers and Acquisitions
> Joint Ventures
> Divestitures
> Takeover Defenses
> Distressed Sales
> Spin-offs
> Asset Swaps
An Alpha Play on Advisory
> Continue to transform the Strategic Advisory business
> Commercial impact of difference makers
> Footprint expansion
> Enhanced win rate through collaboration with other businesses
> Share/influence of smaller, more focused firms continues to grow
> M&A as an essential corporate tool
MACRO
Embedded Growth Favorable Long-Term Trends
+
19
20
Early Signs of Progress Against Strategic Initiatives
Enhance collaboration among our three businesses to better
serve clients
> Multiple referrals made between businesses to date, a number of which have led to mandates
> Numerous joint mandates currently underway
Capitalize on our significantly expanded
addressable market
> Engaged in Advisory dialogues with Sponsors and Corporates that would not have occurred pre-spin
> Restructuring involved in significant projects that were previously denied due to conflicts
Significantly increase the breadth and depth of our
Advisory franchise
> 9 Advisory partners hired in 2015
> Advisory backlog continues to build with many new mandates and significant assignments
Remain the premier destination for talent
> Continue to attract top talent at all levels
> Significant success on campus
> Stable despite significant merger dislocations
> Largely Blackstone allocations
> Significant one-time costs
Outlook: Focus on Growth in Revenue and Pre-Tax Income
> Revenue growth
> Lower than 2015
> Greater productivity from existing talent
> Introduction of new talent to the franchise
> Accelerating revenue growth
> Evidence of operating leverage
2015A 2016F 2017F+
Year of Transition
Franchise Building
Growth through Franchise Building/
Return on Investment
21
Revenue
Non-Compensation Expense
Compensation Expense
22
Why PJT Partners
Differentiated growth strategy
> Market share rather than a market size story
‒ Firm built to grow in any market environment
> Spin-off a significant catalyst for growth
‒ Unshackled from constraints / conflicts
‒ Integrating three highly complementary businesses
‒ Substantial advisory buildout
Efficient global operation
> Global presence and connectivity with less overhead
Management highly aligned with shareholders
1
2
3
Your Results Are Our Reputation
23
Financials
24
$59 $82
$24
$34 $82
$115
1Q15 1Q16
Historical Financials – Revenues
FY 2012 - 2015
$244 $256 $271 $286
$110
$141 $130
$120
$355
$397 $401 $406
2012 2013 2014 2015
(1) Includes interest income and other revenue. 25
$244 $256 $271 $286
$110
$141 $130
$120
$355
$397 $401 $406
2012 2013 2014 2015
Advisory Revenues Placement Revenues/Other(1)
1Q15/1Q16
($ in millions)
Note: Totals may not add due to rounding.
Historical Financials – Adjusted Compensation Expense
FY 2012 - 2015
$235 $258
$226
$278
2012 2013 2014 2015
$68 $73
1Q15 1Q16
26
1Q15/1Q16
($ in millions)
Note: See appendix for reconciliation of non-GAAP adjustments.
Adj. GAAP Comp. / Revenue
66% 65% 56% 69% 82% 63%
Historical Financials – Adjusted Non-Comp. Expense
FY 2012 - 2015
$73 $68
$73
$86
2012 2013 2014 2015
$17 $22
1Q15 1Q16
27
1Q15/1Q16
($ in millions)
Note: See appendix for reconciliation of non-GAAP adjustments. (1) 2015 Adjusted Non-Compensation Expense includes a number of costs relating to the merger & subsequent spin-off. (2) Non-Compensation Expense for the three months ended March 31, 2016 reflects a $3.3 million charge discussed in our Current Report on Form 8-K filed on April 8, 2016. The $3.3
million charge includes an offset for insurance recovery deemed to be probable of receipt.
Adj. GAAP Non-Comp. /
Revenue 21% 17% 18% 21%
(2)
20% 19% (1)
($2)
$21
1Q15 1Q16
1Q15/1Q16
Historical Financials – Adjusted Pretax Income / (Loss)
FY 2012 - 2015
$47
$71
$101
$42
2012 2013 2014 2015
28
($ in millions)
Note: See appendix for reconciliation of non-GAAP adjustments.
Adj. GAAP Pre-Tax Income Margin
13% 18% 25% 10% NM 18%
29
GAAP Statements of Operations
(1) Non-Compensation Expense for the three months ended March 31, 2016 reflects a $3.3 million charge discussed in our Current Report on Form 8-K filed on April 8, 2016. The $3.3 million charge includes an offset for insurance recovery deemed to be probable of receipt.
($ in thousands)
3 Months Ended March 31, Year Ended Decem ber 31,
2016 2015 2015 2014 2013 2012
Revenues
Advisory Fees $81,554 $58,674 $286,014 $271,278 $256,433 $244,439
Placement Fees 31,951 23,134 114,058 127,664 136,726 106,764
Interest Income and Other 1,799 517 5,866 2,127 3,795 3,414
Total Revenues 115,304 82,325 405,938 401,069 396,954 354,617
Expenses
Compensation and Benefits 88,171 79,635 315,195 317,478 339,778 318,255
Occupancy and Related 6,418 5,282 32,682 25,601 21,715 22,332
Travel and Related 2,745 3,304 14,082 13,382 13,678 13,606
Professional Fees 3,496 2,529 19,814 10,837 12,344 13,713
Communications and Information Services 2,053 1,406 7,622 7,048 6,772 7,855
Depreciation and Amortization 3,901 1,527 14,872 7,773 8,775 10,612
Other Expenses 5,787 3,331 7,607 11,412 7,692 7,435
Total Expenses 112,571 97,014 411,874 393,531 410,754 393,808
Income (Loss) Before Provision for Taxes 2,733 (14,689) (5,936) 7,538 (13,800) (39,191)
Provision for Taxes 1,302 1,418 239 3,046 3,373 3,357
Net Income (Loss) $1,431 $(16,107) $(6,175) $4,492 $(17,173) $(42,548)
(1)
30
Adjusted Pretax Income / (Loss)
RECONCILIATION OF INCOME (LOSS) BEFORE PROVISION FOR TAXES TO ADJUSTED PRETAX INCOME / (LOSS) ($ in thousands)
(1) This adjustment adds back to Income (Loss) Before Provision for Taxes certain transactional amounts related to Blackstone’s IPO in 2007 and the spin-off from Blackstone on October 1, 2015. The adjustment to Compensation and Benefits relates principally to equity-based compensation charges. An adjustment has been made for equity-based compensation charges associated with the vesting during the periods presented of awards granted in connection with the Blackstone IPO in 2007 and severance incurred in connection with the spin-off (for periods through the third quarter of 2015). Additionally, for periods after October 1, 2015, the transactional equity-base compensation adjustment includes equity-based compensation expense associated with Partnership Units with both time-based vesting and market conditions and retention awards granted in connection with the spin-off.
(2) This adjustment adds back to Income (Loss) Before Provision for Taxes amounts for the amortization of intangible assets which are associated with Blackstone’s IPO and amortization related to intangible assets identified in connection with the acquisition of PJT Capital LP on October 1, 2015.
3 Months Ended March 31, Year Ended December 31,
2016 2015 2015 2014 2013 2012
Income (Loss) Before Provision for Taxes $2,733 $(14,689) $(5,936) $7,538 $(13,800) $(39,191)
Transactional Adjustments
Compensation and Benefits(1) 15,368 11,904 36,924 91,294 81,981 83,529
Non-Compensation(2) 2,801 663 10,939 2,653 2,653 2,653
Adjusted Pretax Income / (Loss) $20,902 $(2,122) $41,927 $101,485 $70,834 $46,991
NON-COMPENSATION EXPENSE ($ in thousands)
COMPENSATION EXPENSE ($ in thousands)
GAAP Reconciliation
(1) See Footnote 1 on previous page. (2) See Footnote 2 on previous page. 31
3 Months Ended March 31, Year Ended December 31,
2016 2015 2015 2014 2013 2012
GAAP Compensation Expense $88,171 $79,635 $315,195 $317,478 $339,778 $318,255
Transactional Adjustments(1) (15,368) (11,904) (36,924) (91,294) (81,981) (83,529)
Adjusted Compensation Expense $72,803 $67,731 $278,271 $226,184 $257,797 $234,726
3 Months Ended March 31, Year Ended December 31,
2016 2015 2015 2014 2013 2012
GAAP Total Expenses $112,571 $97,014 $411,874 $393,531 $410,754 $393,808
GAAP Compensation Expense (88,171) (79,635) (315,195) (317,478) (339,778) (318,255)
Transactional Adjustments(2) (2,801) (663) (10,939) (2,653) (2,653) (2,653)
Adjusted Non-Compensation Expense $21,599 $16,716 $85,740 $73,400 $68,323 $72,900
17.2 0.8
10.1
5.9
5.8 39.836.4
0.0
10.0
20.0
30.0
40.0
Unrestricted
Class A
Common Shares
Restricted
Class A Common
Shares
Vested PJT
Holdings Held by
Blackstone
Unvested PJT
Holdings Held by
PJT Executives
and Partners
Unvested RSU's
to PJT Employees
Post Spin
Fully-Diluted
Shares
Outstanding
(If-Converted)
Wtd. Avg.
FD Shares
Outstanding
(Treasury Stock
Method)
32
Share Count
Shares in millions
Note: As of March 31, 2016. (1) Approximately 1% held by Blackstone employees who transferred to PJT. (2) Excluded from Fully Diluted Shares Outstanding are 6.5 million unvested Partnership Units in PJT Partners Holdings LP that have yet to satisfy performance vesting conditions.
October 2016 1 year 5.3 mm Units
Oct. 2017 – 20% Oct. 2018 – 30% Oct. 2019 – 50%
0.6mm Units Various through 2021
3.7 mm Stay Incentives Mar. 2018 - 100%
0.4 mm March 2019 - 100%
1.7 mm Various through 2021
Lock Up Term
No Restrictions
Class A Common Partnership Units Unvested Class A
Common
(1)
(2)
(2)
2.3
16.1
18.0
Balance Sheet Highlights
> Debt-free at quarter-end
‒ Undrawn revolver of up to $80mm
‒ One-time build-out/start-up costs behind us
> Ended the first quarter with net working capital of approximately $114mm
> Deferred Tax Asset of $69mm1
‒ $57mm of the DTA is solely for the benefit of the public company and its shareholders1
‒ Amortized over a weighted average period of approximately 10 years1
(1) As of December 31, 2015. 33
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