NEW YORK--(BUSINESS WIRE)--PJT Partners Inc. (NYSE: PJT) today reported Total Revenues of $200.2 million for first quarter 2020 compared with $128.1 million for the prior year quarter. GAAP Net Income and Adjusted Net Income, If-Converted were $32.0 million and $29.1 million, respectively, for the current quarter compared with $0.9 million and $11.4 million, respectively, for the prior year quarter. GAAP Diluted EPS and Adjusted EPS were $0.72 and $0.71, respectively, for the current quarter compared with $0.04 and $0.28, respectively, for the prior year quarter.

Paul J. Taubman, Chairman and Chief Executive Officer, said, “As the enormity of this pandemic and its economic impact continue to unfold, we are deeply grateful for the extraordinary heroism from healthcare workers and those providing essential services. We are particularly proud of the way our employees have worked to support each other and their broader communities while remaining dedicated to serving our clients, and are pleased to be reporting strong first quarter results that underscore the resiliency of our business. Looking forward, our unique mix of leading businesses and strong financial footing will benefit us in navigating the days ahead. Our insights, expertise and collaborative approach to problem solving have never been more differentiated or valued by clients who are seeking advice on how best to prepare for an uncertain future.”

Revenues

The following table sets forth revenues for the three months ended March 31, 2020 and 2019:

Advisory Revenues were $156.6 million for the current quarter compared with $104.5 million for the prior year quarter, an increase of 50%. Advisory Revenues benefited from strong increases in both our restructuring and strategic advisory businesses.Total Revenues were $200.2 million for first quarter 2020 compared with $128.1 million for the prior year quarter, an increase of 56%.

Placement Revenues were $39.0 million for the current quarter compared with $23.3 million for the prior year quarter, an increase of 67%. Placement Revenues increased driven by growth in corporate private placement activity and increased fundraising activity for alternative asset managers.

Interest Income & Other was $4.6 million for the current quarter compared with $0.3 million for the prior year quarter. Last year’s results were impacted by approximately $3 million of realized and unrealized foreign exchange losses.

Compensation and Benefits Expense

GAAP Compensation and Benefits Expense was $134.0 million for first quarter 2020 compared with $95.2 million for the prior year quarter. Adjusted Compensation and Benefits Expense was $130.1 million for the current quarter compared with $82.0 million for the prior year quarter. The increase in Compensation and Benefits Expense was principally the result of higher revenues during the current quarter.

Non-Compensation Expense

GAAP Non-Compensation Expense was $32.6 million for first quarter 2020 compared with $33.0 million for the prior year quarter. Adjusted Non-Compensation Expense was $30.6 million for the current quarter compared with $31.0 million for the prior year quarter.

GAAP and Adjusted Non-Compensation Expense decreased during the current quarter compared with the prior year quarter, primarily driven by decreases in Travel and Related as well as Professional Fees, and partially offset by an increase in Occupancy and Related. Travel and Related decreased primarily due to a reduction in travel in response to the global health crisis. Professional Fees decreased primarily due to lower legal and employee recruiting costs. Occupancy and Related increased due to the leasing of additional space in certain of our existing locations.

Provision for Taxes

As of March 31, 2020, PJT Partners Inc. owned 60.8% of PJT Partners Holdings LP. PJT Partners Inc. is subject to corporate U.S. federal and state income tax while PJT Partners Holdings LP is subject to New York City unincorporated business tax and other entity-level taxes imposed by certain state and foreign jurisdictions. Please refer to Note 12. “Stockholders’ Equity (Deficit)” in the “Notes to Consolidated Financial Statements” in “Part II. Item 8. Financial Statements and Supplementary Data” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 for further information about the corporate ownership structure.

Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), enacted on March 27, 2020, the Company has elected to carryback certain net operating losses resulting in a $3.7 million decrease in the Company’s GAAP Provision for Taxes during the first quarter of 2020.

In calculating Adjusted Net Income, If-Converted, the Company has assumed that all outstanding Class A partnership units in PJT Partners Holdings LP (“Partnership Units”) (excluding the unvested partnership units that have yet to satisfy certain market conditions) had been exchanged during the period into shares of the Company’s Class A common stock, subjecting all of the Company’s income to corporate-level tax.

The effective tax rate for Adjusted Net Income, If-Converted for the current quarter was 26.0% compared with 25.5% for full year 2019. This tax rate excludes the tax benefits of the adjustments for transaction-related compensation expense, amortization expense, tax benefit recorded pursuant to the CARES Act and certain payments to The Blackstone Group Inc. (“Blackstone”) resulting from the October 1, 2015 spin-off. While the Company benefited from the tax impact relating to the delivery of vested shares at a value in excess of their amortized cost, this benefit was less in 2020 than 2019.

Capital Management and Balance Sheet

As of March 31, 2020, the Company held cash, cash equivalents and short-term investments of $112.7 million, and had no funded debt.

On April 24, 2019, 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. As of March 31, 2020, the Company’s remaining repurchase authorization was $59.9 million.

During first quarter 2020, the Company repurchased 539,297 shares of Class A common stock pursuant to the share repurchase program, net share settled 267,230 shares to satisfy employee tax obligations and repurchased 226,784 Partnership Units for cash pursuant to the quarterly exchange program.

In aggregate during first quarter 2020, the Company repurchased an equivalent of 1.0 million shares at an average price of $47.22 per share.

The Company intends to repurchase an additional 176,929 Partnership Units for cash on May 5, 2020 at a price to be determined by the per share volume-weighted average price of the Company’s Class A common stock on April 30, 2020.

Dividend

The Board of Directors of PJT Partners Inc. has declared a quarterly dividend of $0.05 per share of Class A common stock. The dividend will be paid on June 17, 2020 to Class A common stockholders of record on June 3, 2020.

COVID-19 Impact on Operations and Outlook

• The vast majority of our employees have been working remotely since mid-March and we are prepared to operate in this manner for the foreseeable future, if necessary. There have been no material changes to our internal controls as a result of this new working environment.
• The Company’s financial condition is strong. We have substantial cash balances, currently have no debt, and have not identified any impairments. We also maintain access to our $40 million line of credit facility. While we currently have not experienced a material decline in the demand for our services, we believe COVID-19’s impact on our business, financial performance and operating results will be significantly driven by a number of factors that we are unable to predict or control, such as the severity and duration of the pandemic and the impact on the U.S. and global economies. These external factors could have a material effect on our financial performance and operating results going forward.

About PJT Partners

PJT Partners is a premier global advisory-focused investment bank. Our team of senior professionals delivers a wide array of strategic advisory, shareholder advisory, restructuring and special situations and private fund advisory and fundraising services to corporations, financial sponsors, institutional investors and governments around the world. We offer a unique portfolio of advisory services designed to help our clients achieve their strategic objectives. We also provide, through PJT Park Hill, private fund advisory and fundraising services for alternative investment managers, including private equity funds, real estate funds and hedge funds. To learn more about PJT Partners, please visit the Company’s website at www.pjtpartners.com.