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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2023

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

Commission File Number: 001-36869

 

 

img51815189_0.jpg 

PJT Partners Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

36-4797143

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

 

280 Park Avenue

New York, New York 10017

(Address of principal executive offices)(Zip Code)

(212) 364-7810

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Class A common stock, par value $0.01 per share

 

PJT

 

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer

 

Accelerated Filer

Non-Accelerated Filer

 

Smaller Reporting Company

 

 

 

Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of July 24, 2023, there were 24,193,651 shares of Class A common stock, par value $0.01 per share, and 140 shares of Class B common stock, par value $0.01 per share, outstanding.

 

 

 


TABLE OF CONTENTS

 

 

Page

PART I.

FINANCIAL INFORMATION

 

 

 

 

 

ITEM 1.

FINANCIAL STATEMENTS

4

 

 

 

 

 

Unaudited Condensed Consolidated Financial Statements — June 30, 2023 and 2022:

 

 

 

 

 

Condensed Consolidated Statements of Financial Condition as of June 30, 2023 and December 31, 2022

4

 

 

 

 

 

Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2023 and 2022

5

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2023 and 2022

6

 

 

 

 

 

Condensed Consolidated Statements of Changes in Equity for the Three and Six Months Ended June 30, 2023 and 2022

7

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022

9

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

10

 

 

 

 

 

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

22

 

 

 

 

 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

31

 

 

 

 

 

ITEM 4.

CONTROLS AND PROCEDURES

31

 

 

 

 

 

PART II.

OTHER INFORMATION

 

 

 

 

 

ITEM 1.

LEGAL PROCEEDINGS

32

 

 

 

 

 

ITEM 1A.

RISK FACTORS

32

 

 

 

 

 

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

33

 

 

 

 

 

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

33

 

 

 

 

 

ITEM 4.

MINE SAFETY DISCLOSURES

33

 

 

 

 

 

ITEM 5.

OTHER INFORMATION

33

 

 

 

 

 

ITEM 6.

EXHIBITS

34

 

 

 

 

 

SIGNATURES

35

 

 

 

 


 

PJT Partners Inc. was formed in connection with certain merger and spin-off transactions whereby the financial and strategic advisory services, restructuring and reorganization advisory services and Park Hill Group businesses of Blackstone Inc. (“Blackstone” or our “former Parent”) were combined with PJT Capital LP, a financial advisory firm founded by Paul J. Taubman in 2013 (together with its then affiliates, “PJT Capital”), and the combined business was distributed to Blackstone’s unitholders to create PJT Partners Inc., a stand-alone, independent publicly traded company. Throughout this Quarterly Report on Form 10-Q, we refer to this transaction as the “spin-off.” PJT Partners Inc. is a holding company and its only material asset is its controlling equity interest in PJT Partners Holdings LP, a holding partnership that holds the Company’s operating subsidiaries, and certain cash and cash equivalents it may hold from time to time. As the sole general partner of PJT Partners Holdings LP, PJT Partners Inc. operates and controls all of the business and affairs of PJT Partners Holdings LP and its operating subsidiaries.

In this Quarterly Report on Form 10-Q, unless the context requires otherwise, the words “PJT Partners Inc.” refers to PJT Partners Inc., and “PJT Partners,” the “Company,” “we,” “us” and “our” refer to PJT Partners Inc., together with its consolidated subsidiaries, including PJT Partners Holdings LP and its operating subsidiaries.

Forward-Looking Statements

Certain material presented herein 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 (the “Exchange Act”). Forward-looking statements include certain information concerning future results of operations, business strategies, acquisitions, financing plans, competitive position, potential growth opportunities, potential operating performance improvements, 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,” “opportunity,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “might,” “should,” “could” or the negative of these terms or similar expressions.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict, many of which are outside our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not place undue reliance upon any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (a) changes in governmental regulations and policies; (b) cyberattacks, security vulnerabilities, and internet disruptions, including breaches of data security and privacy leaks, data loss, and business interruptions; (c) failures of our computer systems or communication systems, including as a result of a catastrophic event and the use of remote work environments and virtual platforms; (d) the impact of catastrophic events, including business disruptions, pandemics, reductions in employment and an increase in business failures on (1) the U.S. and the global economy, and (2) our employees and our ability to provide services to our clients and respond to their needs; (e) the failure of third-party service providers to perform their functions; and (f) volatility in the political and economic environment, including as a result of inflation, rising interest rates, international conflict, and recent events affecting the financial services industry.

2


 

Any of these factors, as well as such other factors discussed in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the United States Securities and Exchange Commission (“SEC”), as such factors may be updated from time to time in our periodic filings with the SEC, accessible on the SEC’s website at www.sec.gov, could cause our results to differ materially from those expressed in forward-looking statements. There may be other risks and uncertainties that we are unable to predict at this time or that are not currently expected to have a material adverse effect on our business. Any such risks could cause our results to differ materially from those expressed in forward-looking statements.

Website Disclosure

We use our website (www.pjtpartners.com) as a channel of distribution of Company information. The information we post may be deemed material. Accordingly, investors should monitor the website, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive e-mail alerts and other information about PJT Partners when you enroll your e-mail address by visiting the “Investor Relations” page of our website at ir.pjtpartners.com. Although we refer to our website in this report, the contents of our website are not included or incorporated by reference into this report. All references to our website in this report are intended to be inactive textual references only.

 

3


 

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PJT Partners Inc.

Condensed Consolidated Statements of Financial Condition (Unaudited)

(Dollars in Thousands, Except Share and Per Share Data)

 

 

 

June 30,
2023

 

 

December 31,
2022

 

Assets

 

 

 

 

 

 

Cash and Cash Equivalents

 

$

151,496

 

 

$

173,235

 

Investments (at fair value)

 

 

74,144

 

 

 

50,242

 

Accounts Receivable (net of allowance for credit losses of $2,977 and
   $
1,945 at June 30, 2023 and December 31, 2022, respectively)

 

 

333,059

 

 

 

317,751

 

Intangible Assets, Net

 

 

15,420

 

 

 

17,880

 

Goodwill

 

 

172,725

 

 

 

172,725

 

Furniture, Equipment and Leasehold Improvements, Net

 

 

29,358

 

 

 

30,693

 

Operating Lease Right-of-Use Assets

 

 

110,654

 

 

 

119,025

 

Other Assets

 

 

129,327

 

 

 

99,929

 

Deferred Tax Asset, Net

 

 

70,919

 

 

 

69,172

 

Total Assets

 

$

1,087,102

 

 

$

1,050,652

 

Liabilities and Equity

 

 

 

 

 

 

Accrued Compensation and Benefits

 

$

123,190

 

 

$

83,920

 

Accounts Payable, Accrued Expenses and Other Liabilities

 

 

25,178

 

 

 

24,782

 

Operating Lease Liabilities

 

 

126,210

 

 

 

135,627

 

Amount Due Pursuant to Tax Receivable Agreement

 

 

32,244

 

 

 

30,315

 

Taxes Payable

 

 

3,844

 

 

 

3,451

 

Deferred Revenue

 

 

11,245

 

 

 

12,999

 

Total Liabilities

 

 

321,911

 

 

 

291,094

 

Commitments and Contingencies

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Class A Common Stock, par value $0.01 per share (3,000,000,000
   shares authorized;
32,251,216 and 31,062,575 issued at
   June 30, 2023 and December 31, 2022, respectively;
24,220,466 and
   
24,479,286 outstanding at June 30, 2023 and December 31, 2022,
   respectively)

 

 

322

 

 

 

310

 

Class B Common Stock, par value $0.01 per share (1,000,000
   shares authorized;
140 issued and outstanding at June 30, 2023;
   
158 issued and outstanding at December 31, 2022)

 

 

 

 

 

 

Additional Paid-In Capital

 

 

541,750

 

 

 

502,585

 

Retained Earnings

 

 

88,149

 

 

 

60,969

 

Accumulated Other Comprehensive Loss

 

 

(562

)

 

 

(2,274

)

Treasury Stock at Cost (8,030,750 and 6,583,289 shares at June 30,
   2023 and December 31, 2022, respectively)

 

 

(480,552

)

 

 

(376,484

)

Total PJT Partners Inc. Equity

 

 

149,107

 

 

 

185,106

 

Non-Controlling Interests

 

 

616,084

 

 

 

574,452

 

Total Equity

 

 

765,191

 

 

 

759,558

 

Total Liabilities and Equity

 

$

1,087,102

 

 

$

1,050,652

 

 

 

See notes to condensed consolidated financial statements.

4


 

PJT Partners Inc.

Condensed Consolidated Statements of Operations (Unaudited)

(Dollars in Thousands, Except Share and Per Share Data)

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Advisory Fees

 

$

323,794

 

 

$

186,649

 

 

$

491,884

 

 

$

368,307

 

Placement Fees

 

 

20,028

 

 

 

49,482

 

 

 

47,613

 

 

 

109,833

 

Interest Income and Other

 

 

2,455

 

 

 

(2,990

)

 

 

6,768

 

 

 

1,320

 

Total Revenues

 

 

346,277

 

 

 

233,141

 

 

 

546,265

 

 

 

479,460

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and Benefits

 

 

246,614

 

 

 

150,587

 

 

 

379,657

 

 

 

309,819

 

Occupancy and Related

 

 

9,920

 

 

 

8,658

 

 

 

19,931

 

 

 

17,600

 

Travel and Related

 

 

8,314

 

 

 

7,977

 

 

 

15,286

 

 

 

13,030

 

Professional Fees

 

 

11,454

 

 

 

7,226

 

 

 

18,381

 

 

 

14,277

 

Communications and Information Services

 

 

3,761

 

 

 

4,241

 

 

 

7,838

 

 

 

8,664

 

Depreciation and Amortization

 

 

3,597

 

 

 

4,094

 

 

 

7,040

 

 

 

8,401

 

Other Expenses

 

 

8,448

 

 

 

6,670

 

 

 

14,770

 

 

 

13,833

 

Total Expenses

 

 

292,108

 

 

 

189,453

 

 

 

462,903

 

 

 

385,624

 

Income Before Provision for Taxes

 

 

54,169

 

 

 

43,688

 

 

 

83,362

 

 

 

93,836

 

Provision for Taxes

 

 

13,117

 

 

 

8,495

 

 

 

14,324

 

 

 

14,175

 

Net Income

 

 

41,052

 

 

 

35,193

 

 

 

69,038

 

 

 

79,661

 

Net Income Attributable to
   Non-Controlling Interests

 

 

18,911

 

 

 

16,025

 

 

 

29,561

 

 

 

34,789

 

Net Income Attributable to PJT Partners Inc.

 

$

22,141

 

 

$

19,168

 

 

$

39,477

 

 

$

44,872

 

Net Income Per Share of Class A Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.88

 

 

$

0.76

 

 

$

1.56

 

 

$

1.79

 

Diluted

 

$

0.86

 

 

$

0.74

 

 

$

1.53

 

 

$

1.74

 

Weighted-Average Shares of Class A Common
   Stock Outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

25,238,144

 

 

 

25,141,339

 

 

 

25,234,983

 

 

 

25,065,684

 

Diluted

 

 

26,333,261

 

 

 

26,421,087

 

 

 

26,625,890

 

 

 

26,486,899

 

See notes to condensed consolidated financial statements.

5


 

PJT Partners Inc.

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(Dollars in Thousands)

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net Income

 

$

41,052

 

 

$

35,193

 

 

$

69,038

 

 

$

79,661

 

Other Comprehensive Income (Loss), Net of Tax
   
Currency Translation Adjustment

 

 

1,677

 

 

 

(3,659

)

 

 

3,065

 

 

 

(5,095

)

Comprehensive Income

 

 

42,729

 

 

 

31,534

 

 

 

72,103

 

 

 

74,566

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive Income Attributable to Non-
   Controlling Interests

 

 

19,652

 

 

 

14,377

 

 

 

30,914

 

 

 

32,492

 

Comprehensive Income Attributable to PJT Partners Inc.

 

$

23,077

 

 

$

17,157

 

 

$

41,189

 

 

$

42,074

 

 

See notes to condensed consolidated financial statements.

6


 

PJT Partners Inc.

Condensed Consolidated Statements of Changes in Equity (Unaudited)

(Dollars in Thousands, Except Share Data)

 

 

 

Three Months Ended June 30, 2023

 

 

 

Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

Class A

 

 

Class B

 

 

 

 

 

Class A

 

 

Class B

 

 

Additional

 

 

 

 

 

Other

 

 

 

 

 

Non-

 

 

 

 

 

 

Common

 

 

Common

 

 

Treasury

 

 

Common

 

 

Common

 

 

Paid-In

 

 

Retained

 

 

Comprehensive

 

 

Treasury

 

 

Controlling

 

 

 

 

 

 

Stock

 

 

Stock

 

 

Stock

 

 

Stock

 

 

Stock

 

 

Capital

 

 

Earnings

 

 

Loss

 

 

Stock

 

 

Interests

 

 

Total

 

Balance at March 31, 2023

 

 

32,238,601

 

 

 

159

 

 

 

(7,438,407

)

 

$

322

 

 

$

 

 

$

531,034

 

 

$

72,076

 

 

$

(1,498

)

 

$

(442,664

)

 

$

578,879

 

 

$

738,149

 

Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22,141

 

 

 

 

 

 

 

 

 

18,911

 

 

 

41,052

 

Other Comprehensive Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

936

 

 

 

 

 

 

741

 

 

 

1,677

 

Dividends Declared ($0.25 Per Share
   of Class A Common Stock)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,068

)

 

 

 

 

 

 

 

 

 

 

 

(6,068

)

Tax Distributions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12,149

)

 

 

(12,149

)

Equity-Based Compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

44,596

 

 

 

 

 

 

 

 

 

 

 

 

4,604

 

 

 

49,200

 

Net Share Settlement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(175

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(175

)

Deliveries of Vested Shares of
   Class A Common Stock

 

 

12,615

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in Ownership Interest

 

 

 

 

 

(19

)

 

 

 

 

 

 

 

 

 

 

 

(33,705

)

 

 

 

 

 

 

 

 

 

 

 

25,098

 

 

 

(8,607

)

Treasury Stock Purchases

 

 

 

 

 

 

 

 

(592,343

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(37,888

)

 

 

 

 

 

(37,888

)

Balance at June 30, 2023

 

 

32,251,216

 

 

 

140

 

 

 

(8,030,750

)

 

$

322

 

 

$

 

 

$

541,750

 

 

$

88,149

 

 

$

(562

)

 

$

(480,552

)

 

$

616,084

 

 

$

765,191

 

 

 

 

Six Months Ended June 30, 2023

 

 

 

Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

Class A

 

 

Class B

 

 

 

 

 

Class A

 

 

Class B

 

 

Additional

 

 

 

 

 

Other

 

 

 

 

 

Non-

 

 

 

 

 

 

Common

 

 

Common

 

 

Treasury

 

 

Common

 

 

Common

 

 

Paid-In

 

 

Retained

 

 

Comprehensive

 

 

Treasury

 

 

Controlling

 

 

 

 

 

 

Stock

 

 

Stock

 

 

Stock

 

 

Stock

 

 

Stock

 

 

Capital

 

 

Earnings

 

 

Loss

 

 

Stock

 

 

Interests

 

 

Total

 

Balance at December 31, 2022

 

 

31,062,575

 

 

 

158

 

 

 

(6,583,289

)

 

$

310

 

 

$

 

 

$

502,585

 

 

$

60,969

 

 

$

(2,274

)

 

$

(376,484

)

 

$

574,452

 

 

$

759,558

 

Net Income