Moelis & Company

Good afternoon and welcome to the Moelis & Company first quarter 2021 earnings conference call. All participants will be in listen-only mode. Should 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 questions. To ask a question, you may press star then one on your telephone keypad. 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, Head of Investor Relations. Please go ahead.

Good afternoon, and thank you for joining us for Moelis & Company's first quarter 2021 financial results conference call. On the phone today are Ken Moelis, Chairman and CEO, and Joe Simon, Chief Financial Officer. Before we begin, I'd 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 Moelis & Company's filings with the SEC. 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 certain 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 GATT 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 will now turn the call over to Joe to discuss our results. Joe?

Thanks, Chad. Good afternoon, everyone. On today's call, I'll go through our financial results and then Ken will comment further on the business. We achieved $264 million of revenues in the first quarter, an increase of 72% over the prior year period. This represented our second largest quarter of revenues ever. Our growth during the period was primarily attributable to increased levels of transaction completions. Our M&A activity remains robust as we are participating in assignments broadly across regions, sectors, and deal sizes. We also continue to see strong levels of restructuring and capital markets activity. In fact, our private funds advisory activity during the quarter was the highest it has ever been. Moving to expenses, our compensation expense was accrued at 59.3%, consistent with our full year 2020 ratio. Our first quarter non-comp expenses were $35 million. The increment over the expected $30 million was primarily related to transaction-related charges. The non-comp ratio was a solid 13%. We expect our non-compensation expenses to be close to $30 million We achieved a quarterly pre-tax margin of 29% exceeding our 25% target. Moving to taxes, our underlying corporate tax rate was 26% for the first quarter. The discrete tax benefits related to our equity award settlements contributed approximately 27 cents per share of EPS and resulted in an overall net tax benefit for the quarter. Regarding capital allocations, The Board declared a regular quarterly dividend of $0.55 per share and a special dividend of $2 per share, the second special dividend that we've declared in the last five months. In addition, we repurchased approximately 1.4 million shares during the first quarter. The dividends and the buybacks together approximate $250 million in capital return to shareholders. We remain committed to returning 100% of our excess cash. And lastly, we continue to maintain a fortress balance sheet with substantial liquidity and no debt. We ended the quarter with $228 million of cash and liquid investments. And I'll now turn the call over to Ken. Thanks, Joe.