Medley Management Inc.

For the quarter ended March 31, 2019, total revenues were $13.8 million versus $14.4 million in the same period of 2018. Total expenses were $11.3 million versus $12.8 million a year ago. Other income, net was $1.2 million compared with other expense, net of $11 million in the prior-year period, including a $3.5 million unrealized gain on MCC stock that did not affect income attributed to Medley Management Inc. Pre-tax core net income was $0.8 million versus $2.1 million, core net income per share was $0.02 versus $0.05, and core EBITDA was $3.9 million versus $5 million. Management did not give next-quarter or full-year financial guidance, but said it expects AUM growth in tactical opportunities and structured credit through the rest of 2019 and into 2020.

Brook Taube framed the quarter around operating momentum in the platform rather than near-term financial growth. He said tactical opportunities and structured credit are seeing attractive investment opportunities, with early wins and liquidity events supporting the case for raising dedicated capital in the back half of 2019 and into 2020. He also stressed that Medley is focused on a successful path forward for the announced merger plan, while acknowledging the vote delay.

Rick Allorto walked through the quarter’s financials: revenue of $13.8 million, expenses of $11.3 million, pre-tax core net income of $0.8 million, core net income per share of $0.02, and core EBITDA of $3.9 million. He noted that other income, net included a $3.5 million unrealized gain on MCC stock, but that gain was allocated to non-controlling interests and consolidated subsidiaries and did not impact income attributed to Medley Management Inc. He did not discuss capital allocation beyond the dividend omission already noted by the CEO.

There was no substantive analyst Q&A in the transcript. The main issues raised during prepared remarks were the postponed shareholder vote on the MCC/Sierra merger and the fact that the merger agreements have not been terminated. Management said it is still evaluating potential amendments with the other counterparties. Investors also heard commentary on growth plans for tactical opportunities, structured credit, and the direct lending positioning.