Silvercrest Asset Management Group Inc. Reports Q1 2024 Results

NEW YORK, May 02, 2024 (GLOBE NEWSWIRE) — Silvercrest Asset Management Group Inc. (NASDAQ: SAMG) (the “Company” or “Silvercrest”) today reported the results of its operations for the quarter ended March 31, 2024.

Business Update

Supportive equity markets in the first quarter of 2024 set the stage for a better environment for our business, continuing progress that began in the fourth quarter of 2023 as the market broadened. While we continue to expect an uncertain economic and market environment, Silvercrest has never had more business opportunities or initiatives underway. We are focused on those new opportunities, as well as investments to drive future growth in the business, including value-added hires. As part of those initiatives, Silvercrest is accruing a higher interim percentage of revenue for compensation and will adjust compensation accruals to match important investments in the business.

Silvercrest just announced hiring a new team to expand its international and global equity investment capabilities and global outreach. The team will complement Silvercrest’s existing International team and capabilities for a more diversified offering. The team brings significant investment expertise, a proven track record, and experience managing significant equity mandates on behalf of large institutions around the world.

Primarily due to more supportive markets, Silvercrest’s Discretionary Assets Under Management (“AUM”) increased by $0.8 billion during the quarter, or 3.7%, to $22.7 billion. The firm’s Total AUM increased by $1.2 billion, to end the first quarter at $34.5 billion. Year-over-year from the first quarter of 2023, our Discretionary AUM and Total AUM increased by 6.6% and 15.4%, respectively. While top-line revenue increased by 2.9% from the end of the first quarter last year, most metrics of the business are down due to higher expenses, primarily related to compensation expense.

Silvercrest’s pipeline of new institutional business opportunities have more than doubled since the fourth quarter of 2023. The firm’s total new business pipeline is now stands at $2.0 billion, which is up substantially from $0.7 billion in the fourth quarter. We expect near-term positive flows to result from those opportunities for both our institutional equity and OCIO capabilities.

As a high-end wealth and asset management firm, Silvercrest serves families and institutions from across the globe. Despite headline news of international tensions, we continue to see substantial new opportunities globally for a firm with our high-quality capabilities coupled with superior client service.

On May 1, 2024, the Company’s Board of Directors declared a quarterly dividend of $0.19 per share of Class A common stock. The dividend will be paid on or about June 21, 2024 to shareholders of record as of the close of business on June 14, 2024.

First Quarter2024 Highlights

• Total AUM of $34.5 billion, inclusive of discretionary AUM of $22.7 billion and non-discretionary AUM of $11.8 billion at March 31, 2024.
• Revenue of $30.3 million.
• U.S. Generally Accepted Accounting Principles (“GAAP”) consolidated net income and net income attributable to Silvercrest of $4.9 million and $3.0 million, respectively.Â
• Basic and diluted net income per share of $0.32.
• Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”)¹ of $7.5 million.
• Adjusted net income¹ of $4.7 million.
• Adjusted basic and diluted earnings per share^{1, 2} of $0.34 and $0.33, respectively.

The table below presents a comparison of certain GAAP and non-GAAP (“Adjusted”) financial measures and AUM.

AUM at $34.5 Billion

Silvercrest’s discretionary assets under management increased by $1.4 billion, or 6.6%, to $22.7 billion at March 31, 2024, from $21.3 billion at March 31, 2023. The increase was attributable to market appreciation of $2.8 billion partially offset by net client outflows of $1.4 billion. Silvercrest’s total AUM increased by $4.6 billion, or 15.4%, to $34.5 billion at March 31, 2024, from $29.9 billion at March 31, 2023. The increase was attributable to market appreciation of $4.2 billion and net client inflows of $0.4 billion. 

Silvercrest’s discretionary assets under management increased by $0.8 billion, or 3.7%, to $22.7 billion at March 31, 2024, from $21.9 billion at December 31, 2023. The increase was attributable to market appreciation of $1.2 billion partially offset by net client outflows of $0.4 billion. Silvercrest’s total AUM increased by $1.2 billion, or 3.6%, to $34.5 billion at March 31, 2024, from $33.3 billion at December 31, 2023. The increase was attributable to market appreciation of $1.5 billion partially offset by net client outflows of $0.3 billion.

First Quarter 2024 vs. First Quarter 2023

Revenue increased by $0.8 million, or 2.8%, to $30.3 million for the three months ended March 31, 2024, from $29.4 million for the three months ended March 31, 2023. This increase was driven by market appreciation partially offset by net client outflows.

Total expenses increased by $1.7 million, or 7.4%, to $24.4 million for the three months ended March 31, 2024, from $22.7 million for the three months ended March 31, 2023. Compensation and benefits expense increased by $1.2 million, or 7.1%, to $17.7 million for the three months ended March 31, 2024, from $16.5 million for the three months ended March 31, 2023. The increase was primarily attributable to an increase in the accrual for bonuses of $1.0 million, an increase in salaries and benefits of $0.1 million primarily as a result of merit-based increases  and severance of $0.1 million paid in the current quarter. General and administrative expenses increased by $0.5 million, or 8.4%, to $6.7 million for the three months ended March 31, 2024, from $6.2 million for the three months ended March 31, 2023. This was primarily attributable to increases in travel and entertainment expenses of $0.1 million, occupancy and related costs of $0.1 million, professional fees of $0.2 million and depreciation and amortization expense of $0.1 million.

Consolidated net income was $4.9 million for the three months ended March 31, 2024, as compared to consolidated net income of $5.3 million for the same period in the prior year. Net income attributable to Silvercrest was $3.0 million, or $0.32 per basic share and diluted share for the three months ended March 31, 2024. Our Adjusted Net Income¹ was $4.7 million, or $0.34 per adjusted basic share and $0.33 per adjusted diluted share² for the three months ended March 31, 2024.

Adjusted EBITDA¹ was $7.5 million, or 24.6% of revenue for the three months ended March 31, 2024, as compared to $8.2 million or 27.8% of revenue for the same period in the prior year.

Liquidity and Capital Resources

Cash and cash equivalents were $39.7 million at March 31, 2024, compared to $70.3 million at December 31, 2023.  As of March 31, 2024, there was $1.8 million outstanding under our term loan with City National Bank and nothing outstanding on our revolving credit facility with City National Bank. 

Silvercrest Asset Management Group Inc.’s total equity was $83.9 million at March 31, 2024.  We had 9,482,022 shares of Class A common stock outstanding and 4,428,080 shares of Class B common stock outstanding at March 31, 2024.

Non-GAAP Financial Measures

To provide investors with additional insight, promote transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making, we supplement our consolidated financial statements presented on a basis consistent with GAAP with Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Earnings Per Share, which are non-GAAP financial measures of earnings.  These adjustments, and the non-GAAP financial measures that are derived from them, provide supplemental information to analyze our operations between periods and over time. Investors should consider our non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.

• EBITDA represents net income before provision for income taxes, interest income, interest expense, depreciation and amortization.
• We define Adjusted EBITDA as EBITDA without giving effect to the Delaware franchise tax, professional fees associated with acquisitions or financing transactions, gains on extinguishment of debt or other obligations related to acquisitions, impairment charges and losses on disposals or abandonment of assets and leaseholds, client reimbursements and fund redemption costs, severance and other similar expenses, but including partner incentive allocations, prior to our initial public offering, as an expense.  We feel that it is important to management and investors to supplement our consolidated financial statements presented on a GAAP basis with Adjusted EBITDA, a non-GAAP financial measure of earnings, as this measure provides a perspective of recurring earnings of the Company, taking into account earnings attributable to both Class A and Class B shareholders. Â
• Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by total revenue. We feel that it is important to management and investors to supplement our consolidated financial statements presented on a GAAP basis with Adjusted EBITDA Margin, a non-GAAP financial measure of earnings, as this measure provides a perspective of recurring profitability of the Company, taking into account profitability attributable to both Class A and Class B shareholders.
• Adjusted Net Income represents recurring net income without giving effect to professional fees associated with acquisitions or financing transactions, losses on forgiveness of notes receivable from our principals, gains on extinguishment of debt or other obligations related to acquisitions, impairment charges and losses on disposals or abandonment of assets and leaseholds, client reimbursements and fund redemption costs, severance and other similar expenses, but including partner incentive allocations, prior to our initial public offering, as an expense. Furthermore, Adjusted Net Income includes income tax expense assuming a blended corporate rate of 26%.  We feel that it is important to management and investors to supplement our consolidated financial statements presented on a GAAP basis with Adjusted Net Income, a non-GAAP financial measure of earnings, as this measure provides a perspective of recurring income of the Company, taking into account income attributable to both Class A and Class B shareholders.Â
• Adjusted Earnings Per Share represents Adjusted Net Income divided by the actual Class A and Class B shares outstanding as of the end of the reporting period for basic Adjusted Earnings Per Share, and to the extent dilutive, we add unvested RSUs and non-qualified stock options to the total shares outstanding to compute diluted Adjusted Earnings Per Share. As a result of our structure, which includes a non-controlling interest, we feel that it is important to management and investors to supplement our consolidated financial statements presented on a GAAP basis with Adjusted Earnings Per Share, a non-GAAP financial measure of earnings, as this measure provides a perspective of recurring earnings per share of the Company as a whole as opposed to being limited to our Class A common stock.

Conference Call

The Company will host a conference call on May 3, 2024, at 8:30 am (Eastern Time) to discuss these results. Hosting the call will be Richard R. Hough III, Chief Executive Officer and President and Scott A. Gerard, Chief Financial Officer. Listeners may access the call by dialing 1-844-836-8743 or for international listeners the call may be accessed by dialing 1-412-317-5723.  A live, listen-only webcast will also be available via the investor relations section of www.silvercrestgroup.com.  An archived replay of the call will be available after the completion of the live call on the Investor Relations page of the Silvercrest website at http://ir.silvercrestgroup.com/.

Forward-Looking Statements and Other Disclosures

This release contains, and from time to time our management may make, 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, each as amended. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.  These forward-looking statements are subject to risks, uncertainties and assumptions. These statements are only predictions based on our current expectations and projections about future events. Important factors that could cause actual results, level of activity, performance or achievements to differ materially from those indicated by such forward-looking statements include, but are not limited to: incurrence of net losses; fluctuations in quarterly and annual results; adverse economic or market conditions; our expectations with respect to future levels of assets under management, inflows and outflows; our ability to retain clients; our ability to maintain our fee structure; our particular choices with regard to investment strategies employed; our ability to hire and retain qualified investment professionals; the cost of complying with current and future regulation coupled with the cost of defending ourselves from related investigations or litigation; failure of our operational safeguards against breaches in data security, privacy, conflicts of interest or employee misconduct; our expected tax rate; and our expectations with respect to deferred tax assets, adverse economic or market conditions, including the continued adverse effects of the coronavirus pandemic; incurrence of net losses; adverse effects of management focusing on implementation of a growth strategy; failure to develop and maintain the Silvercrest brand; and other factors disclosed under “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2023, which is accessible on the U.S. Securities and Exchange Commission’s website at www.sec.gov. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

About Silvercrest

Silvercrest was founded in April 2002 as an independent, employee-owned registered investment adviser. With offices in New York, Boston, Virginia, New Jersey, California and Wisconsin, Silvercrest provides traditional and alternative investment advisory and family office services to wealthy families and select institutional investors.

Silvercrest Asset Management Group Inc.

Contact: Richard Hough
212-649-0601
rhough@silvercrestgroup.com