Moelis & Company

Good day and welcome to the Moelis & Company first quarter earnings conference call. All participants will be in listen-only mode. If you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask a question. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Chet Mandel, VP of Investor Relations. Please go ahead.

Thank you. Good afternoon and thank you for joining us for Moelis & Company's first quarter 2020 financial results conference call. On the phone today are Ken Moelis, Chairman and CEO, and Joe Simon, Chief Financial Officer. Before we begin, I would like to note that the remarks made on this call may contain certain forward-looking statements which are subject to various risks and uncertainties including those identified from time to time in the risk factor section of the Moelis & Company's filings with the SEC and in our earnings release. Actual results could differ materially from those currently anticipated. The firm undertakes no obligation to update any forward-looking statements. Our comments today include references to adjusted financial measures. We believe these measures, when presented together with comparable gap measures, are useful to investors to compare our results across several periods and to better understand our operating results. The reconciliation of these adjusted financial measures with the relevant GAAP financial information and other information required by Reg G is provided in the firm's earnings release, which can be found on our investor relations website at investors.moelis.com. I'll now turn the call over to Ken to discuss our results.

Thanks, Chet, and good afternoon, everyone. During the COVID-19 health crisis, we quickly adapted to a work from home world in efforts to support the health and well-being of our team. We have been very active in helping our clients who need quality advice, judgment, and focus during this challenging time. And while this has certainly been an unprecedented environment, I have absolute faith in science and human ingenuity to defeat this pandemic. The world has completely changed during the first quarter of 2020. The first two months of the year were nothing like the third month, and right now is completely different from where we were in March. From the moment it became clear that the virus would radically impact the global economy, we shifted our focus to advising clients on the importance of balance sheets and their business models. Companies are seeking our expertise to better understand their capital and liquidity needs, the resilience of their business, and how they should adapt to this new environment. So just as these matters are central to our clients right now, I felt that it is important to walk you through the fundamentals of our own balance sheet and the strength of the Moelis business model as well. So first, we have a fortress balance sheet and substantial liquidity. We have $145 million of cash in an undrawn revolver. We have absolutely zero debt on our balance sheet. Third, we have very favorable and low-cost lease obligations. And most importantly, we have not undertaken any commitments on additional space for growth. So we have a lot of flexibility there. And last, on balance sheet, we have virtually no cash compensation obligations arising from prior years. Secondly, the strength of our business model. We have the best restructuring and capitalist solutions team in the world. Our collaborative one firm model with one P&L and no segmented commission structure delivers the full capabilities of the firm seamlessly to bring the best solutions to the client. We have already shifted tremendous resources throughout the firm to support the rapidly changing needs of our clients, which has led to strong activity levels since the middle of March. At the same time, we are still having significant M&A dialogues, but most of these transactions will probably be on hiatus in this environment. As indicated in our press release, after careful deliberation, we halved our regular dividend to 25.5 cents per share. Modifying our regular dividend is the prudent thing to do in the current uncertain environment. One of my all-time favorite quotes comes from a book, Adventures in the Screen Trade, by the late William Goldman. Goldman wrote, and I quote, Nobody knows anything. He was referring to the ability of movie experts to reliably pick winning movies. I feel that sentiment accurately describes today's economic environment and the unknown timing of the recovery, so we have decided to retain capital until we know more. However, we remain committed to returning all of our excess capital to shareholders, and when the future is more certain and business activity stabilizes, we will not hesitate to restore our dividend and declare a special dividend if appropriate. I'll now pass it to Joe who'll walk you through our financial results and then I'll conclude with a few final thoughts on the environment. Joe?