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Duff & Phelps Reports 2012 Second Quarter Results, And Declares Quarterly Dividend

We define Adjusted EBITDA as operating income before depreciation and amortization, equity-based compensation originating prior to our IPO and associated with grants of ownership units of D&P Acquisitions and stock options granted in conjunction with our IPO and other items which are generally not part of our ongoing operations, including but not limited to restructuring charges and acquisition related expenses. We define Adjusted Pro Forma Net Income as net income before equity compensation associated with grants of ownership units of D&P Acquisitions and stock options granted in conjunction with our IPO, and certain items which are generally not part of our ongoing operations, including but not limited to restructuring charges and acquisition related expenses, less pro forma corporate income tax applied at an assumed effective corporate tax rate. Adjusted Pro Forma Net Income per share consists of Adjusted Pro Forma Net Income divided by the fully dilutive weighted average number of the Company's Class A and Class B shares for the applicable period. These measures are reconciled in the tables below.

Adjusted EBITDA, Adjusted Pro Forma Net Income and Adjusted Pro Forma Net Income per share are non-GAAP financial measures which are not prepared in accordance with, and should not be considered a substitute for or superior to measurements required by GAAP. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. In addition, these non-GAAP measures are not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies.

 
Reconciliation of Adjusted EBITDA
       
Three Months Ended Six Months Ended

June 30,

2012

   

June 30,

2011

June 30,

2012

   

June 30,

2011

Net income attributable to Duff & Phelps Corporation $ 6,593 $ 3,424 $ 10,498 $ 7,537
Net income attributable to noncontrolling interest 1,146 2,223 2,932 4,601
Provision for income taxes 4,894 2,556 8,439 5,620
Other expense/(income), net 685   64   1,190   86
Operating income 13,318 8,267 23,059 17,844
Depreciation and amortization 4,348 2,567 8,245 5,056
Equity-based compensation associated with Legacy Units and IPO Options (1) (49 ) 56 22 473
Acquisition retention expenses 2,444 297 4,487 379
Restructuring charges 239 904 1,418 904
Transaction and integration costs 844   272   1,879   466
Adjusted EBITDA $ 21,144   $ 12,363   $ 39,110   $ 25,122
 
 
Reconciliation of Adjusted Pro Forma Net Income
  Three Months Ended     Six Months Ended

June 30,

2012

   

June 30,

2011

June 30,

2012

   

June 30,

2011

Net income attributable to Duff & Phelps Corporation $ 6,593 $ 3,424 $ 10,498 $ 7,537
Net income attributable to noncontrolling interest 1,146 2,223 2,932 4,601
Equity-based compensation associated with Legacy Units and IPO Options (1) (49 ) 56 22 473
Acquisition retention expenses 2,444 297 4,487 379
Restructuring charges 239 904 1,418 904
Transaction and integration costs 844 272 1,879 466
Loss from the write off of an investment (2) 376
Adjustment to provision for income taxes (3) (1,495 ) (1,405 ) (3,401 ) (2,512 )
Adjusted Pro Forma Net Income, as defined $ 9,722   $ 5,771   $ 18,211   $ 11,848  
 
Fully diluted weighted average shares of Class A common stock 35,076 28,067 32,514 28,095
Weighted average New Class A Units outstanding 3,961   10,947   6,506   11,038  
Pro forma fully exchanged, fully diluted shares outstanding 39,037   39,014   39,020   39,133  
 
Adjusted Pro Forma Net Income per fully exchanged, fully diluted share outstanding $ 0.25   $ 0.15   $ 0.47   $ 0.30  
 
_______________
(1)   Represents elimination of equity-compensation expense from Legacy Units associated with ownership units of D&P Acquisitions ("Legacy Units") and stock options granted in conjunction with our IPO ("IPO Options"). See further detail in the notes to the condensed consolidated financial statements.
 
(2) Reflects a charge from the write off of a minority investment. The charge is reflected in "Other expense" on the Company's Condensed Consolidated Statement of Operations.
 
(3) Represents an adjustment to reflect an assumed annual effective corporate tax rate of approximately 39.4% and 40.7% as applied to the six months ended June 30, 2012 and 2011, respectively, which includes a provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and/or foreign jurisdiction. For the three months ended June 30, 2012, the pro forma tax rate of 39.7% reflects a true-up adjustment relating to the three months ended March 31, 2012. Assumes (i) full exchange of existing unitholders' partnership units and Class B common stock of the Company into Class A common stock of the Company, (ii) the Company has adopted a conventional corporate tax structure and is taxed as a C Corporation in the U.S. at prevailing corporate rates and (iii) all deferred tax assets related to foreign operations are fully realizable.
 

Disclosure Regarding Forward-Looking Statements

Statements in this press release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), which reflect the Company's current views with respect to, among other things, future events and financial performance. The Company generally identifies forward looking statements by terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of those words or other comparable words. Any forward-looking statements contained in this discussion are based upon our historical performance and on our current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us, or any other person that the future plans, estimates or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements and the risk factors section that are included in our Annual Report on Form 10-K for the year ended December 31, 2011 and any subsequent filings of our Quarterly Reports on Form 10-Q. The forward-looking statements included in this press release are made only as of the date this press release was issued. The Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

       

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 
Three Months Ended Six Months Ended
June 30,2012     June 30,2011 June 30,2012     June 30,2011
Revenues $ 114,489 $ 87,886 $ 220,834 $ 172,932
Reimbursable expenses 4,422   3,074   7,020   4,966  
Total revenues 118,911 90,960 227,854 177,898
 
Direct client service costs
Compensation and benefits (includes $4,084 and $4,130 of equity-based compensation for the three months ended June 30, 2012 and 2011, respectively, and $10,129 and $9,065 for the six months ended June 30, 2012 and 2011, respectively) 62,171 49,059 120,389 95,967
Other direct client service costs 2,429 1,480 5,313 2,909
Acquisition retention expenses (includes $722 and $297 of equity-based compensation for the three months ended June 30, 2012 and 2011, respectively, and $1,444 and $379 for the six months ended June 30, 2012 and 2011, respectively) 2,444 297 4,487 379
Reimbursable expenses 4,400   3,132   7,009   5,069  
71,444   53,968   137,198   104,324  
Operating expenses
Selling, general and administrative (includes $808 and $769 of equity- based compensation for the three months ended June 30, 2012 and 2011, respectively, and $1,863 and $2,292 for the six months ended June 30, 2012 and 2011, respectively) 28,718 24,982 56,055 49,304
Depreciation and amortization 4,348 2,567 8,245 5,056
Restructuring charges 239 904 1,418 904
Transaction and integration costs 844   272   1,879   466  
34,149   28,725   67,597   55,730  
 
Operating income 13,318 8,267 23,059 17,844
 
Other expense/(income), net
Interest income (5 ) (27 ) (33 ) (55 )
Interest expense 217 91 371 148
Other expense/(income) 473     852   (7 )
685   64   1,190   86  
 
Income before income taxes 12,633 8,203 21,869 17,758
Provision for income taxes 4,894   2,556   8,439   5,620  
Net income 7,739 5,647 13,430 12,138
Less: Net income attributable to noncontrolling interest 1,146   2,223   2,932   4,601  
Net income attributable to Duff & Phelps Corporation $ 6,593   $ 3,424   $ 10,498   $ 7,537  
 
Weighted average shares of Class A common stock outstanding
Basic 33,788 27,296 31,245 27,104
Diluted 35,076 28,067 32,514 28,095
 
Net income per share attributable to stockholders of Class A common stock of Duff & Phelps Corporation
Basic $ 0.18 $ 0.12 $ 0.32 $ 0.27
Diluted $ 0.18 $ 0.12 $ 0.31 $ 0.26
 
Cash dividends declared per common share $ 0.09 $ 0.08 $ 0.18 $ 0.16
 
               

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

QUARTERLY REVENUES BY SEGMENT

(In thousands)

(Unaudited)

 
2011 2012 Q2

2012 vs 2011

YTD

2012 vs 2011

Q1     Q2     Q3     Q4     Total Q1     Q2     Total Dollar     Percent Dollar     Percent
Financial Advisory
Valuation Advisory $ 37,614 $ 32,604 $ 33,887 $ 39,046 $ 143,151 $ 39,490 $ 33,610 $ 73,100 $ 1,006 3.1 % 2,882 4.1 %
Tax Services 7,547 15,128 9,572 8,698 40,945 5,488 13,035 18,523 (2,093 ) (13.8 )% (4,152 ) (18.3 )%
Dispute & Legal Management Consulting 13,436   13,005   18,319   22,032   66,792   14,675   19,979   34,654   6,974   53.6 % 8,213   31.1 %
58,597   60,737   61,778   69,776   250,888   59,653   66,624   126,277   5,887   9.7 % 6,943   5.8 %
 
Alternative Asset Advisory
Portfolio Valuation 6,519 6,220 6,730 6,272 25,741 7,622 6,059 13,681 (161 ) (2.6 )% 942 7.4 %
Complex Asset Solutions 5,321 4,125 3,998 4,631 18,075 4,904 4,048 8,952 (77 ) (1.9 )% (494 ) (5.2 )%
Due Diligence 1,645   4,070   2,643   3,492   11,850   2,423   2,312   4,735   (1,758 ) (43.2 )% (980 ) (17.1 )%
13,485   14,415   13,371   14,395   55,666   14,949   12,419   27,368   (1,996 ) (13.8 )% (532 ) (1.9 )%
 
Investment Banking
M&A Advisory 1,450 1,853 5,741 16,568 25,612 9,354 14,953 24,307 13,100 707.0 % 21,004 635.9 %
Transaction Opinions 8,231 7,266 7,466 5,811 28,774 6,742 8,171 14,913 905 12.5 % (584 ) (3.8 )%
Global Restructuring Advisory 3,283   3,615   3,672   12,430   23,000   15,647   12,322   27,969   8,707   240.9 % 21,071   305.5 %
12,964   12,734   16,879   34,809   77,386   31,743   35,446   67,189   22,712   178.4 % 41,491   161.5 %
 
Total Revenues (excluding reimbursables) $ 85,046   $ 87,886   $ 92,028   $ 118,980   $ 383,940   $ 106,345   $ 114,489   $ 220,834   $ 26,603   30.3 % $ 47,902   27.7 %
 
       

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

RESULTS OF OPERATIONS BY SEGMENT

(In thousands, except headcount data)

(Unaudited)

 
Three Months Ended Six Months Ended
June 30,2012     June 30,2011 June 30,2012     June 30,2011
Financial Advisory
Revenues (excluding reimbursables) $ 66,624 $ 60,737 $ 126,277 $ 119,334
Segment operating income $ 13,298 $ 9,787 $ 23,604 $ 19,369
Segment operating income margin 20.0 % 16.1 % 18.7 % 16.2 %
 
Alternative Asset Advisory
Revenues (excluding reimbursables) $ 12,419 $ 14,415 $ 27,368 $ 27,900
Segment operating income $ 2,385 $ 3,302 $ 6,531 $ 6,524
Segment operating income margin 19.2 % 22.9 % 23.9 % 23.4 %
 
Investment Banking
Revenues (excluding reimbursables) $ 35,446 $ 12,734 $ 67,189 $ 25,698
Segment operating income/(loss) $ 5,439 $ (668 ) $ 8,964 $ (668 )
Segment operating income/(loss) margin 15.3 % (5.2 )% 13.3 % (2.6 )%
 
Totals
Revenues (excluding reimbursables) $ 114,489 $ 87,886 $ 220,834 $ 172,932
 
Segment operating income $ 21,122 $ 12,421 $ 39,099 $ 25,225
Net client reimbursable expenses 22 (58 ) 11 (103 )
Equity-based compensation from Legacy Units and IPO Options 49 (56 ) (22 ) (473 )
Depreciation and amortization (4,348 ) (2,567 ) (8,245 ) (5,056 )
Acquisition retention expenses (2,444 ) (297 ) (4,487 ) (379 )
Restructuring charges (239 ) (904 ) (1,418 ) (904 )
Transaction and integration costs (844 ) (272 ) (1,879 ) (466 )
Operating income $ 13,318   $ 8,267   $ 23,059   $ 17,844  
 
Average Client Service Professionals
Financial Advisory 612 562 606 567
Alternative Asset Advisory 101 94 101 90
Investment Banking 291   128   297   129  
Total 1,004   784   1,004   786  
 
End of Period Client Service Professionals
Financial Advisory 612 552 612 552
Alternative Asset Advisory 103 97 103 97
Investment Banking 292   131   292   131  
Total 1,007   780   1,007   780  
 
Revenue per Client Service Professional
Financial Advisory $ 109 $ 108 $ 208 $ 210
Alternative Asset Advisory $ 123 $ 153 $ 271 $ 310
Investment Banking $ 122 $ 99 $ 226 $ 199
Total $ 114 $ 112 $ 220 $ 220
 
       

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

RESULTS OF OPERATIONS BY SEGMENT—CONTINUED

(In thousands, except utilization, rate-per-hour and headcount data)

(Unaudited)

 
Three Months Ended Six Months Ended
June 30,2012     June 30,2011 June 30,2012     June 30,2011
Utilization (a)
Financial Advisory 71.5 % 67.6 % 73.2 % 71.3 %
Alternative Asset Advisory 56.0 % 61.5 % 58.0 % 61.7 %
 
Rate-Per-Hour (b)
Financial Advisory $ 352 $ 363 $ 328 $ 338
Alternative Asset Advisory $ 457 $ 515 $ 506 $ 522
 
Revenues (excluding reimbursables)
Financial Advisory $ 66,624 $ 60,737 $ 126,277 $ 119,334
Alternative Asset Advisory 12,419 14,415 27,368 27,900
Investment Banking 35,446   12,734   67,189   25,698  
Total $ 114,489   $ 87,886   $ 220,834   $ 172,932  
 
Average Managing Directors
Financial Advisory 95 93 93 93
Alternative Asset Advisory 23 25 23 25
Investment Banking 74   41   75   40  
Total 192   159   191   158  
 
End of Period Managing Directors
Financial Advisory 95 91 95 91
Alternative Asset Advisory 23 25 23 25
Investment Banking 73   43   73   43  
Total 191   159   191   159  
 
Revenue per Managing Director
Financial Advisory $ 701 $ 653 $ 1,358 $ 1,283
Alternative Asset Advisory $ 540 $ 577 $ 1,190 $ 1,116
Investment Banking $ 479 $ 311 $ 896 $ 642
Total $ 596 $ 553 $ 1,156 $ 1,095
 
_______________
(a)   The utilization rate for any given period is calculated by dividing the number of hours incurred by client service professionals who worked on client assignments (including internal projects for the Company) during the period by the total available working hours for all of such client service professionals during the same period, assuming a 40 hour work week, less paid holidays and vacation days. Utilization excludes client service professionals associated with certain property tax services due to the nature of the work performed and client service professionals from certain acquisitions prior to their transition to the Company's financial system.
 
(b) Average billing rate-per-hour is calculated by dividing revenues for the period by the number of hours worked on client assignments (including internal projects for the Company) during the same period. Financial Advisory revenues used to calculate rate-per-hour exclude revenues associated with certain property tax engagements. The average billing rate excludes certain hours from our acquisitions prior to their transition to the Company's financial system.
 
       

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

SUMMARY OF CLIENT SERVICE PROFESSIONALS

(Unaudited)

 
2011 2012
Q1     Q2     Q3     Q4     YTD Q1     Q2     YTD
Average Client Service Professionals
Financial Advisory 574 562 576 584 575 600 612 606
Alternative Asset Advisory 87 94 98 99 94 99 101 101
Investment Banking 129   128   147   213   158   302   291   297
790   784   821   896   827   1,001   1,004   1,004
 
 
End of Period Client Service Professionals
Financial Advisory 571 552 580 590 605 612
Alternative Asset Advisory 90 97 100 100 94 103
Investment Banking 127   131   149   303   294   292  
788   780   829   993   993   1,007  
 
 
 
2011 2012
Q1 Q2 Q3 Q4 YTD Q1 Q2 YTD
Average Managing Directors
Financial Advisory 94 93 91 90 92 92 95 93
Alternative Asset Advisory 26 25 25 24 25 23 23 23
Investment Banking 39   41   48   58   47   76   74   75
159   159   164   172   164   191   192   191
 
 
End of Period Managing Directors
Financial Advisory 94 91 90 92 95 95
Alternative Asset Advisory 26 25 25 24 23 23
Investment Banking 39   43   50   76   73   73  
159   159   165   192   191   191  
 
       

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

(Unaudited)

June 30,

December 31,

2012

2011

ASSETS
Current assets
Cash and cash equivalents $ 49,283 $ 38,986
Accounts receivable (net of allowance for doubtful accounts of $1,761 and $1,753 at June 30, 2012 and December 31, 2011, respectively) 75,444 77,795
Unbilled services 54,795 51,427
Prepaid expenses and other current assets 11,493 8,257
Net deferred income taxes, current 1,478   2,545
Total current assets 192,493   179,010
 
Property and equipment (net of accumulated depreciation of $34,446 and $32,516 at June 30, 2012 and December 31, 2011, respectively) 40,080 33,632
Goodwill 194,643 192,970
Intangible assets (net of accumulated amortization of $30,290 and $25,626 at June 30, 2012 and December 31, 2011, respectively) 35,980 40,977
Other assets 13,108 13,942
Investments related to deferred compensation plan 26,890 23,542
Net deferred income taxes, less current portion 140,771   115,826
Total non-current assets 451,472   420,889
Total assets $ 643,965   $ 599,899
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 5,562 $ 4,148
Accrued expenses 24,234 22,612
Accrued compensation and benefits 22,691 41,518
Liability related to deferred compensation plan, current portion 594 646
Deferred revenues 5,842 4,185
Due to noncontrolling unitholders, current portion 6,209   6,209
Total current liabilities 65,132   79,318
 
Long-term debt 22,500
Liability related to deferred compensation plan, less current portion 26,396 23,083
Other long-term liabilities 29,716 32,248
Due to noncontrolling unitholders, less current portion 130,337   101,557
Total non-current liabilities 208,949   156,888
Total liabilities 274,081   236,206
 
Commitments and contingencies
 
Stockholders' equity
Preferred stock (50,000 shares authorized; zero issued and outstanding)
Class A common stock, par value $0.01 per share (100,000 shares authorized; 38,599 and 31,646 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively) 386 316
Class B common stock, par value $0.0001 per share (50,000 shares authorized; 3,952 and 10,488 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively) 1
Additional paid-in capital 306,682 252,572
Accumulated other comprehensive income 323 287
Retained earnings 29,529   25,631
Total stockholders' equity of Duff & Phelps Corporation 336,920 278,807
Noncontrolling interest 32,964   84,886
Total stockholders' equity 369,884   363,693
Total liabilities and stockholders' equity $ 643,965   $ 599,899
 
   

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 
Six Months Ended
June 30,2012     June 30,2011
 
Cash flows from operating activities:
Net income $ 13,430 $ 12,138
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 8,245 5,056
Equity-based compensation 13,436 11,736
Bad debt expense 445 1,347
Net deferred income taxes 4,902 6,151
Other 1,796 359
Changes in assets and liabilities providing/(using) cash, net of acquired balances:
Accounts receivable 2,148 (1,148 )
Unbilled services (3,152 ) (18,317 )
Prepaid expenses and other current assets (2,355 ) (285 )
Other assets 356 (381 )
Accounts payable and accrued expenses 835 (8,223 )
Accrued compensation and benefits (13,041 ) (22,674 )
Deferred revenues 1,656 1,520
Other liabilities (4,987 ) 83  
Net cash provided by/(used in) operating activities 23,714   (12,638 )
 
Cash flows from investing activities:
Purchases of property and equipment (7,150 ) (4,012 )
Business acquisitions, net of cash acquired (1,400 ) (5,891 )
Purchases of investments (2,550 ) (3,250 )
Net cash used in investing activities (11,100 ) (13,153 )
 
Cash flows from financing activities:
Borrowings under revolving line of credit 30,000
Repayments of revolving line of credit (7,500 )
Net proceeds from sale of Class A common stock 49,244
Redemption of noncontrolling unitholders (58,972 )
Dividends (6,645 ) (5,012 )
Repurchases of Class A common stock (5,226 ) (13,649 )
Payments of contingent consideration related to acquisitions (1,682 )
Distributions and other payments to noncontrolling unitholders (1,636 ) (2,378 )
Proceeds from exercises of stock options 16 267
Excess tax benefit from equity-based compensation 561   911  
Net cash used in financing activities (1,840 ) (19,861 )
 
Effect of exchange rate on cash and cash equivalents (477 ) 1,799  
 
Net increase/(decrease) in cash and cash equivalents 10,297 (43,853 )
Cash and cash equivalents at beginning of year 38,986   113,328  
Cash and cash equivalents at end of period $ 49,283   $ 69,475  
 
   

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

ADJUSTED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 
Three Months Ended June 30, 2012
        Adjusted Pro
As Reported Adjustments Forma
Revenues $ 114,489 $ $ 114,489
Reimbursable expenses 4,422     4,422  
Total revenues 118,911     118,911  
 
Direct client service costs
Compensation and benefits 62,171 47 (1 ) 62,218
Other direct client service costs 2,429 2,429
Acquisition retention expenses 2,444 (2,444 )
Reimbursable expenses 4,400     4,400  
71,444   (2,397 ) 69,047  
 
Operating expenses
Selling, general and administrative 28,718 2 (1 ) 28,720
Depreciation and amortization 4,348 4,348
Restructuring charges 239 (239 )
Transaction and integration costs 844   (844 )  
34,149   (1,081 ) 33,068  
 
Operating income 13,318 3,478 16,796
 
Other expense/(income), net
Interest income (5 ) (5 )
Interest expense 217 217
Other expense/(income) 473     473  
685     685  
 
Income before income taxes 12,633 3,478 16,111
Provision for income taxes 4,894   1,495   (3 ) 6,389  
Net income 7,739 1,983 9,722
Less: Net income attributable to noncontrolling interest 1,146   (1,146 )  
Net income attributable to Duff & Phelps Corporation $ 6,593   $ 3,129   $ 9,722  
 
 
Pro forma fully exchanged, fully diluted shares outstanding 39,037  
 
Adjusted Pro Forma Net Income per fully exchanged, fully diluted shares outstanding $ 0.25  
 

See definition of Adjusted Pro Forma Net Income and accompanying footnotes in the preceding section of this press release.

 
   

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

ADJUSTED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 
Three Months Ended June 30, 2011
        Adjusted Pro
As Reported Adjustments Forma
Revenues $ 87,886 $ $ 87,886
Reimbursable expenses 3,074     3,074  
Total revenues 90,960     90,960  
 
Direct client service costs
Compensation and benefits 49,059 55 (1 ) 49,114
Other direct client service costs 1,480 1,480
Acquisition retention expenses 297 (297 )
Reimbursable expenses 3,132     3,132  
53,968   (242 ) 53,726  
 
Operating expenses
Selling, general and administrative 24,982 (111 ) (1 ) 24,871
Depreciation and amortization 2,567 2,567
Restructuring charges 904 (904 )
Transaction and integration costs 272   (272 )  
28,725   (1,287 ) 27,438  
 
Operating income 8,267 1,529 9,796
 
Other expense/(income), net
Interest income (27 ) (27 )
Interest expense 91 91
Other expense/(income)      
64     64  
 
Income before income taxes 8,203 1,529 9,732
Provision for income taxes 2,556   1,405   (3 ) 3,961  
Net income 5,647 124 5,771
Less: Net income attributable to noncontrolling interest 2,223   (2,223 )  
Net income attributable to Duff & Phelps Corporation $ 3,424   $ 2,347   $ 5,771  
 
 
Pro forma fully exchanged, fully diluted shares outstanding 39,014  
 
Adjusted Pro Forma Net Income per fully exchanged, fully diluted shares outstanding $ 0.15  
 

See definition of Adjusted Pro Forma Net Income and accompanying footnotes in the preceding section of this press release.

 
   

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

ADJUSTED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 
Six Months Ended June 30, 2012
        Adjusted Pro
As Reported Adjustments Forma
Revenues $ 220,834 $ $ 220,834
Reimbursable expenses 7,020     7,020  
Total revenues 227,854     227,854  

 

Direct client service costs

 

Compensation and benefits 120,389 43 (1 ) 120,432
Other direct client service costs 5,313 5,313
Acquisition retention expenses 4,487 (4,487 )
Reimbursable expenses 7,009     7,009  
137,198   (4,444 ) 132,754  
 
Operating expenses

 

Selling, general and administrative 56,055 (65 ) (1 ) 55,990
Depreciation and amortization 8,245 8,245
Restructuring charges 1,418 (1,418 )
Transaction and integration costs 1,879   (1,879 )  
67,597   (3,362 ) 64,235  

 

Operating income 23,059 7,806 30,865

 

Other expense/(income), net

 

Interest income (33 ) (33 )
Interest expense 371 371
Other expense/(income) 852   (376 ) (2 ) 476  
1,190   (376 ) 814  

 

Income before income taxes 21,869 8,182 30,051
Provision for income taxes 8,439   3,401   (3 ) 11,840  
Net income 13,430 4,781 18,211
Less: Net income attributable to noncontrolling interest 2,932   (2,932 )  
Net income attributable to Duff & Phelps Corporation $ 10,498   $ 7,713   $ 18,211  
 
 
Pro forma fully exchanged, fully diluted shares outstanding 39,020  
 
Adjusted Pro Forma Net Income per fully exchanged, fully diluted shares outstanding $ 0.47  
 

See definition of Adjusted Pro Forma Net Income and accompanying footnotes in the preceding section of this press release.

 
   

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

ADJUSTED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 
Six Months Ended June 30, 2011
        Adjusted Pro
As Reported Adjustments Forma
Revenues $ 172,932 $ $ 172,932
Reimbursable expenses 4,966     4,966  
Total revenues 177,898     177,898  
 
Direct client service costs
Compensation and benefits 95,967 (178 ) (1 ) 95,789
Other direct client service costs 2,909 2,909
Acquisition retention expenses 379 (379 )
Reimbursable expenses 5,069     5,069  
104,324   (557 ) 103,767  
 
Operating expenses
Selling, general and administrative 49,304 (295 ) (1 ) 49,009
Depreciation and amortization 5,056 5,056
Restructuring charges 904 (904 )
Transaction and integration costs 466   (466 )  
55,730   (1,665 ) 54,065  
 
Operating income 17,844 2,222 20,066
 
Other expense/(income), net
Interest income (55 ) (55 )
Interest expense 148 148
Other expense/(income) (7 )   (7 )
86     86  
 
Income before income taxes 17,758 2,222 19,980
Provision for income taxes 5,620   2,512   (3 ) 8,132  
Net income 12,138 (290 ) 11,848
Less: Net income attributable to noncontrolling interest 4,601   (4,601 )  
Net income attributable to Duff & Phelps Corporation $ 7,537   $ 4,311   $ 11,848  
 
 
Pro forma fully exchanged, fully diluted shares outstanding 39,133  
 
Adjusted Pro Forma Net Income per fully exchanged, fully diluted shares outstanding $ 0.30  
 

See definition of Adjusted Pro Forma Net Income and accompanying footnotes in the preceding section of this press release.

 




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