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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 5/11/20 Marcus & Millichap, Inc. 10-Q 3/31/20 100:11M Donnelley … Solutions/FA |
Document/Exhibit Description Pages Size 1: 10-Q Quarterly Report HTML 1.28M 2: EX-10.1 Material Contract HTML 45K 3: EX-31.1 Certification -- §302 - SOA'02 HTML 38K 4: EX-31.2 Certification -- §302 - SOA'02 HTML 38K 5: EX-32.1 Certification -- §906 - SOA'02 HTML 34K 18: R1 Cover Page HTML 85K 66: R2 Condensed Consolidated Balance Sheets HTML 132K 83: R3 Condensed Consolidated Balance Sheets HTML 60K (Parenthetical) 44: R4 Condensed Consolidated Statements of Net and HTML 115K Comprehensive Income 17: R5 Condensed Consolidated Statements of Net and HTML 37K Comprehensive Income (Parenthetical) 65: R6 Condensed Consolidated Statements of Stockholders' HTML 67K Equity 82: R7 Condensed Consolidated Statements of Cash Flows HTML 130K 45: R8 Description of Business and Basis of Presentation HTML 45K 14: R9 Accounting Policies and Recent Accounting HTML 63K Pronouncements 79: R10 Property and Equipment, Net HTML 49K 68: R11 Operating Leases HTML 87K 16: R12 Investments in Marketable Debt Securities HTML 249K 47: R13 Acquisitions, Goodwill and Other Intangible Assets HTML 95K 78: R14 Selected Balance Sheet Data HTML 158K 67: R15 Notes Payable to Former Stockholders HTML 34K 15: R16 Related-Party Transactions HTML 42K 46: R17 Fair Value Measurements HTML 292K 81: R18 Stockholders' Equity HTML 39K 64: R19 Stock-Based Compensation Plans HTML 115K 32: R20 Income Taxes HTML 66K 39: R21 Earnings per Share HTML 76K 100: R22 Commitments and Contingencies HTML 43K 62: R23 Subsequent Events HTML 37K 31: R24 Description of Business and Basis of Presentation HTML 101K (Policies) 38: R25 Property and Equipment, Net (Tables) HTML 46K 99: R26 Operating Leases (Tables) HTML 92K 61: R27 Investments in Marketable Securities (Tables) HTML 249K 30: R28 Acquisitions, Goodwill and Other Intangible Assets HTML 95K (Tables) 40: R29 Selected Balance Sheet Data (Tables) HTML 155K 42: R30 Fair Value Measurements (Tables) HTML 280K 11: R31 Stock-Based Compensation Plans (Tables) HTML 112K 69: R32 Income Taxes (Tables) HTML 64K 84: R33 Earnings per Share (Tables) HTML 76K 43: R34 Description of Business and Basis of Presentation HTML 40K - Additional Information (Detail) 12: R35 Accounting Policies and Recent Accounting HTML 70K Pronouncements - Additional Information (Detail) 70: R36 Property and Equipment, Net - Schedule of Property HTML 45K and Equipment, Net (Detail) 85: R37 Property and Equipment, Net - Additional HTML 40K Information (Detail) 41: R38 Operating Leases - Additional Information (Detail) HTML 34K 13: R39 Operating Leases - Schedule of Operating Lease HTML 41K Cost, Included in Selling, General and Administrative Expense (Detail) 36: R40 Operating Leases - Maturities of lease liabilities HTML 50K (Detail) 27: R41 Operating Leases - Schedule of Supplemental Cash HTML 40K Flow Information and Noncash Activity Related to Operating Leases (Detail) 56: R42 Operating Leases - Schedule of Other Information HTML 36K Related to Operating Leases (Detail) 94: R43 Investments in Marketable Securities - Schedule of HTML 77K Amortized Cost and Fair Value of Marketable Securities, Available-for-Sale, by Type of Security (Detail) 37: R44 Investments in Marketable Securities - Amortized HTML 63K Cost and Fair Value of Investments in Available for Sale Securities (Detail) 28: R45 Investments in Marketable Securities - Additional HTML 53K Information (Detail) 57: R46 Investments in Marketable Securities - Gross HTML 35K Realized Gains and Losses from Sale of Available for Sale Securities (Detail) 95: R47 Investments in Marketable Securities - Schedule of HTML 65K Amortized Cost and Fair Value of Marketable Securities, Available-for-Sale, by Contractual Maturity (Detail) 35: R48 Acquisitions, Goodwill and Other Intangible Assets HTML 32K - Additional Information (Detail) 29: R49 Acquisitions, Goodwill and Other Intangible Assets HTML 51K - Summary of Goodwill and Intangible Assets (Detail) 24: R50 Acquisitions, Goodwill and Other Intangible Assets HTML 34K - Summary of Goodwill and Intangible Assets (Parenthetical) (Detail) 54: R51 Acquisitions, Goodwill and Other Intangible Assets HTML 41K - Summary of Net Change in Carrying Value of Goodwill (Detail) 88: R52 Acquisitions, Goodwill and Other Intangible Assets HTML 48K - Schedule of Estimated Amortization Expense for Intangible Assets (Detail) 72: R53 Selected Balance Sheet Data - Schedule of Advances HTML 37K and Loans, Net (Detail) 23: R54 Selected Balance Sheet Data - Schedule of Other HTML 45K Assets (Detail) 53: R55 Selected Balance Sheet Data - Schedule of Other HTML 33K Assets (Parenthetical) (Detail) 87: R56 Selected Balance Sheet Data - Summary of Net HTML 42K Change in Carrying Value of MSRs (Detail) 71: R57 Selected Balance Sheet Data - Additional HTML 76K Information (Detail) 22: R58 Selected Balance Sheet Data - Components of HTML 55K Deferred Compensation and Commissions (Detail) 55: R59 Selected Balance Sheet Data - Summary of Net HTML 36K Change in Carrying Value of Assets Held in Rabbi Trust and Deferred Compensation Liability (Detail) 97: R60 Selected Balance Sheet Data - Schedule of Other HTML 38K Liabilities (Detail) 60: R61 Selected Balance Sheet Data - Schedule of Other HTML 43K Liabilities (Parenthetical) (Detail) 26: R62 Notes Payable to Former Stockholders - Additional HTML 38K Information (Detail) 34: R63 Related-Party Transactions - Additional HTML 58K Information (Detail) 96: R64 Fair Value Measurements - Schedule of Assets and HTML 165K Liabilities at Fair Value on Recurring Basis (Detail) 59: R65 Fair Value Measurements - Schedule of HTML 44K Reconciliation of Contingent Consideration Measured at Fair Value on Recurring Basis (Detail) 25: R66 Fair Value Measurements - Schedule of HTML 33K Reconciliation of Contingent Consideration Measured at Fair Value on Recurring Basis (Parenthetical) (Detail) 33: R67 Fair Value Measurements - Schedule of Fair Value HTML 64K Liabilities Measured On Recurring Basis Valuation Techniques (Detail) 98: R68 Fair Value Measurements - Schedule of Fair Value HTML 61K Liabilities Measured On Non-Recurring Basis Valuation Techniques (Detail) 58: R69 Fair Value Measurements - Additional Information HTML 48K (Detail) 73: R70 Stockholders' Equity - Additional Information HTML 52K (Detail) 90: R71 Stock-Based Compensation Plans - 2013 Omnibus HTML 38K Equity Incentive Plan - Award Limitations - Additional Information (Detail) 48: R72 Stock-Based Compensation Plans - 2013 Omnibus HTML 58K Equity Incentive Plan - Additional Information (Detail) 19: R73 Stock-Based Compensation Plans - Outstanding HTML 80K Awards Under 2013 Omnibus Equity Incentive Plan (Detail) 76: R74 Stock-Based Compensation Plans - Outstanding HTML 34K Awards Under 2013 Omnibus Equity Incentive Plan (Parenthetical) (Detail) 93: R75 Stock-Based Compensation Plans - Employee Stock HTML 55K Purchase Plan - Additional Information (Detail) 51: R76 Stock-Based Compensation Plans - Amendments to HTML 38K Restricted Stock and SARs - Additional Information (Detail) 21: R77 Stock-Based Compensation Plans - Schedule of HTML 39K Future Share Settlements (Detail) 77: R78 Stock-Based Compensation Plans - Stock-Based HTML 46K Compensation Expense (Detail) 89: R79 Income Taxes - Components of Provision for Income HTML 69K Taxes and Income before Provision for Income Taxes (Detail) 74: R80 Income Taxes - Additional Information (Detail) HTML 34K 91: R81 Earnings per Share - Computation of Basic and HTML 70K Diluted Earnings Per Share, Including Antidilutive Securities Excluded from Computation of Earnings Per Share (Detail) 49: R82 Earnings per Share - Computation of Basic and HTML 39K Diluted Earnings Per Share, Including Antidilutive Securities Excluded from Computation of Earnings Per Share (Parenthetical) (Detail) 20: R83 Commitments and Contingencies - Additional HTML 64K Information Credit Agreement (Detail) 75: R84 Commitments and Contingencies - Additional HTML 33K Information Other (Detail) 92: R85 Subsequent Events - Additional Information HTML 38K (Detail) 80: XML IDEA XML File -- Filing Summary XML 191K 52: XML XBRL Instance -- d183092d10q_htm XML 3.24M 86: EXCEL IDEA Workbook of Financial Reports XLSX 97K 7: EX-101.CAL XBRL Calculations -- mmi-20200331_cal XML 201K 8: EX-101.DEF XBRL Definitions -- mmi-20200331_def XML 748K 9: EX-101.LAB XBRL Labels -- mmi-20200331_lab XML 1.43M 10: EX-101.PRE XBRL Presentations -- mmi-20200331_pre XML 1.13M 6: EX-101.SCH XBRL Schema -- mmi-20200331 XSD 240K 50: JSON XBRL Instance as JSON Data -- MetaLinks 407± 658K 63: ZIP XBRL Zipped Folder -- 0001193125-20-138459-xbrl Zip 233K
10-Q |
i ☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
i ☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware |
i 35-2478370 | |
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) | |
i 23975 Park Sorrento, Suite 400 i Calabasas, California |
i 91302 | |
(Address of Principal Executive Offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
i Common Stock, par value $0.0001 per share |
i MMI |
i New York Stock Exchange |
i Large accelerated filer |
☒ |
Accelerated filer |
☐ | |||
Non-accelerated filer |
☐ |
Smaller reporting company |
i ☐ | |||
Emerging growth company |
i ☐ |
2020 (Unaudited) |
||||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | i 189,760 |
$ | i 232,670 |
||||
Commissions receivable, net |
i 3,600 |
i 5,003 |
||||||
Prepaid expenses |
i 9,072 |
i 10,676 |
||||||
Income tax receivable |
i 929 |
i 4,999 |
||||||
Marketable debt securities, available-for-sale (includes amortized cost and an allowance for credit losses of $ i 143,115 and $ i 0,
respectively, at March 31, 2020) |
i 143,864 |
i 150,752 |
||||||
Advances and loans, net |
i 1,969 |
i 2,882 |
||||||
Other assets |
i 2,871 |
i 3,185 |
||||||
Total current assets |
i 352,065 |
i 410,167 |
||||||
Property and equipment, net |
i 23,173 |
i 22,643 |
||||||
Operating lease right-of-use assets, net |
i 88,454 |
i 90,535 |
||||||
Marketable debt securities, available-for-sale (includes amortized cost and an allowance for credit losses of $ i 44,954 and $ i 0,
respectively, at March 31, 2020) |
i 45,210 |
i 60,809 |
||||||
Assets held in rabbi trust |
i 7,992 |
i 9,452 |
||||||
Deferred tax assets, net |
i 20,959 |
i 22,122 |
||||||
Goodwill and other intangible assets, net |
i 31,254 |
i 22,312 |
||||||
Advances and loans, net |
i 96,857 |
i 66,647 |
||||||
Other assets |
i 4,365 |
i 4,347 |
||||||
Total assets |
$ | i 670,329 |
$ | i 709,034 |
||||
Liabilities and stockholders’ equity |
||||||||
Current liabilities: |
||||||||
Accounts payable and other liabilities |
$ | i 10,642 |
$ | i 10,790 |
||||
Notes payable to former stockholders |
i 6,564 |
i 6,564 |
||||||
Deferred compensation and commissions |
i 25,253 |
i 44,301 |
||||||
Operating lease liabilities |
i 17,715 |
i 17,762 |
||||||
Accrued bonuses and other employee related expenses |
i 5,339 |
i 22,388 |
||||||
Total current liabilities |
i 65,513 |
i 101,805 |
||||||
Deferred compensation and commissions |
i 28,220 |
i 45,628 |
||||||
Operating lease liabilities |
i 61,677 |
i 63,155 |
||||||
Other liabilities |
i 5,627 |
i 3,539 |
||||||
Total liabilities |
i 161,037 |
i 214,127 |
||||||
Commitments and contingencies |
i — |
i — |
||||||
Stockholders’ equity: |
||||||||
Preferred stock, $ i i 0.0001 /
par value: |
||||||||
Authorized shares – i i 25,000,000 / ;
issued and outstanding shares – i i i i none / / /
at March 31, 2020 and December 31, 2019, respectively |
i — |
i — |
||||||
Common stock, $ i i 0.0001 /
par value: |
||||||||
Authorized shares – i i 150,000,000 / ;
issued and outstanding shares – i i 39,272,429 / and i i 39,153,195 /
at March 31, 2020 and December 31, 2019, respectively |
i 4 |
i 4 |
||||||
Additional paid-in capital |
i 105,601 |
i 104,658 |
||||||
Stock notes receivable from employees |
( i 4 |
) | ( i 4 |
) | ||||
Retained earnings |
i 401,308 |
i 388,271 |
||||||
Accumulated other comprehensive income |
i 2,383 |
i 1,978 |
||||||
Total stockholders’ equity |
i 509,292 |
i 494,907 |
||||||
Total liabilities and stockholders’ equity |
$ | i 670,329 |
$ | i 709,034 |
||||
Three Months Ended |
||||||||
2019 |
||||||||
Revenues: |
||||||||
Real estate brokerage commissions |
$ | i 171,829 |
$ |
i 144,937 |
||||
Financing fees |
i 15,351 |
i 13,732 |
||||||
Other revenues |
i 3,537 |
i 2,038 |
||||||
Total revenues |
i 190,717 |
i 160,707 |
||||||
Operating expenses: |
||||||||
Cost of services |
i 113,757 |
i 91,688 |
||||||
Selling, general and administrative expense |
i 54,860 |
i 48,918 |
||||||
Depreciation and amortization expense |
i 2,464 |
i 1,832 |
||||||
Total operating expenses |
i 171,081 |
i 142,438 |
||||||
Operating income |
i 19,636 |
i 18,269 |
||||||
Other (expense) income, net |
( i 366 |
) | i 3,375 |
|||||
Interest expense |
( i 283 |
) | ( i 349 |
) | ||||
Income before provision for income taxes |
i 18,987 |
i 21,295 |
||||||
Provision for income taxes |
i 5,917 |
i 5,657 |
||||||
Net income |
i 13,070 |
i 15,638 |
||||||
Other comprehensive (loss) income: |
||||||||
Marketable debt securities, available-for-sale: |
||||||||
Change in unrealized (losses) gains |
( i 497 |
) | i 858 |
|||||
Less: reclassification adjustment for net losses (gains) included in other (expense) income, net |
i 11 |
( i 9 |
) | |||||
Net change, net of tax of $( i 168) and $ i 288
for the three months ended March 31, 2020 and 2019, respectively |
( i 486 |
) | i 849 |
|||||
Foreign currency translation gain (loss), net of tax of $ i i 0 /
for each of the three months ended March 31, 2020 and 2019 |
i 891 |
( i 98 |
) | |||||
Total other comprehensive income |
i 405 |
i 751 |
||||||
Comprehensive income |
$ | i 13,475 |
$ | i 16,389 |
||||
Earnings per share: |
||||||||
Basic |
$ | i 0.33 |
$ | i 0.40 |
||||
Diluted |
$ | i 0.33 |
$ | i 0.40 |
||||
Weighted average common shares outstanding: |
||||||||
Basic |
i 39,541 |
i 39,311 |
||||||
Diluted |
i 39,646 |
i 39,515 |
Three Months Ended March 31, 2020 |
||||||||||||||||||||||||||||||||||||
Preferred Stock |
Common Stock |
Additional Paid-In Capital |
Stock Notes Receivable From Employees |
Retained Earnings |
Accumulated Other Comprehensive Income |
Total |
||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||
Balance at December 31, 2019 |
i — |
$ |
i — |
i 39,153,195 |
$ |
i 4 |
$ |
i 104,658 |
$ |
( i 4 |
) |
$ |
i 388,271 |
$ |
i 1,978 |
$ |
i 494,907 |
|||||||||||||||||||
Cumulative effect of a change in accounting principle, net of tax |
— |
i — |
— |
i — |
i — |
i — |
( i 33 |
) |
i — |
( i 33 |
) | |||||||||||||||||||||||||
Balance at January 1, 2020, as adjusted |
i — |
i — |
i 39,153,195 |
i 4 |
i 104,658 |
( i 4 |
) |
i 388,238 |
i 1,978 |
i 494,874 |
||||||||||||||||||||||||||
Net and comprehensive income |
— |
i — |
— |
i — |
i — |
i — |
i 13,070 |
i 405 |
i 13,475 |
|||||||||||||||||||||||||||
Stock-based award activity |
||||||||||||||||||||||||||||||||||||
Stock-based compensation |
i — |
i — |
i — |
i — |
i 2,632 |
i — |
i — |
i — |
i 2,632 |
|||||||||||||||||||||||||||
Issuance of common stock for vesting of restricted stock units |
i — |
i — |
i 170,106 |
i — |
i — |
i — |
i — |
i — |
i — |
|||||||||||||||||||||||||||
Shares withheld related to net share settlement of stock-based awards |
i — |
i — |
( i 50,872 |
) |
i — |
( i 1,689 |
) |
i — |
i — |
i — |
( i 1,689 |
) | ||||||||||||||||||||||||
Balance as of March 31, 2020 |
i — |
$ |
i — |
i 39,272,429 |
$ |
i 4 |
$ |
i 105,601 |
$ |
( i 4 |
) |
$ |
i 401,308 |
$ |
i 2,383 |
$ |
i 509,292 |
|||||||||||||||||||
Three Months Ended March 31, 20 19 |
||||||||||||||||||||||||||||||||||||
Preferred Stock |
Common Stock |
Additional Paid-In Capital |
Stock Notes Receivable From Employees |
Retained Earnings |
Accumulated Other Comprehensive Income |
Total |
||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||
Balance at December 31, 2018 |
i — |
$ |
i — |
i 38,814,464 |
$ |
i 4 |
$ |
i 97,458 |
$ |
( i 4 |
) |
$ |
i 311,341 |
$ |
i 775 |
$ |
i 409,574 |
|||||||||||||||||||
Net and comprehensive income |
— |
i — |
— |
i — |
i — |
i — |
i 15,638 |
i 751 |
i 16,389 |
|||||||||||||||||||||||||||
Stock-based award activity |
||||||||||||||||||||||||||||||||||||
Stock-based compensation |
i — |
i — |
i — |
i — |
i 2,341 |
i — |
i — |
i — |
i 2,341 |
|||||||||||||||||||||||||||
Issuance of common stock for vesting of restricted stock units |
i — |
i — |
i 284,396 |
i — |
i — |
i — |
i — |
i — |
i — |
|||||||||||||||||||||||||||
Shares withheld related to net share settlement of stock-based awards |
i — |
i — |
( i 56,426 |
) |
i — |
( i 2,212 |
) |
i — |
i — |
i — |
( i 2,212 |
) | ||||||||||||||||||||||||
Balance as of March 31, 2019 |
i — |
$ |
i — |
i 39,042,434 |
$ |
i 4 |
$ |
i 97,587 |
$ |
( i 4 |
) |
$ |
i 326,979 |
$ |
i 1,526 |
$ |
i 426,092 |
|||||||||||||||||||
Three Months Ended |
||||||||
2019 |
||||||||
Cash flows from operating activities |
||||||||
Net income |
$ | i 13,070 |
$ | i 15,638 |
||||
Adjustments to reconcile net income to net cash used in operating activities: |
||||||||
Depreciation and amortization expense |
i 2,464 |
i 1,832 |
||||||
Amortization of right-of-use assets |
i 5,500 |
i 5,081 |
||||||
Credit loss recovery |
( i 120 |
) | ( i 104 |
) | ||||
Stock-based compensation |
i 2,632 |
i 2,341 |
||||||
Deferred taxes, net |
i 1,345 |
i 2,243 |
||||||
Unrealized f oreign exchange lo ss |
i 1,024 |
i — |
||||||
Net realized (gains) losses on marketable debt securities, available-for-sale |
( i 53 |
) | i 12 |
|||||
Other non-cash items |
i 485 |
i 28 |
||||||
Changes in operating assets and liabilities: |
||||||||
Commissions receivable |
i 1,350 |
( i 1,171 |
) | |||||
Prepaid expenses |
i 1,576 |
( i 929 |
) | |||||
Advances and loans |
( i 29,441 |
) | ( i 6,663 |
) | ||||
Other assets |
( i 100 |
) | ( i 2,149 |
) | ||||
Accounts payable and other liabilities |
( i 923 |
) | i 2,067 |
|||||
Income tax receivable/payable |
i 4,070 |
i 3,117 |
||||||
Accrued bonuses and other employee related expenses |
( i 17,035 |
) | ( i 20,060 |
) | ||||
Deferred compensation and commissions |
( i 33,898 |
) | ( i 35,838 |
) | ||||
Operating lease liabilities |
( i 4,477 |
) | ( i 4,110 |
) | ||||
Other liabilities |
( i 262 |
) | i 67 |
|||||
Net cash used in operating activities |
( i 52,793 |
) | ( i 38,598 |
) | ||||
Cash flows from investing activities |
||||||||
Acquisition, net of cash received |
( i 6,000 |
) | i — |
|||||
Purchases of marketable debt securities, available-for-sale |
( i 28,919 |
) | ( i 30,117 |
) | ||||
Proceeds from sales and maturities of marketable debt securities, available-for-sale |
i 50,623 |
i 55,833 |
||||||
Issuances of employee notes receivable |
( i 211 |
) | i — |
|||||
Payments received on employee notes receivable |
i 1 |
i 1 |
||||||
Purchase of property and equipment |
( i 2,397 |
) | ( i 1,644 |
) | ||||
Net cash provided by investing activities |
i 13,097 |
i 24,073 |
||||||
Cash flows from financing activities |
||||||||
Taxes paid related to net share settlement of stock-based awards |
( i 1,689 |
) | ( i 2,212 |
) | ||||
Principal payments on stock appreciation rights liability |
( i 1,251 |
) | i 186 |
|||||
Net cash used in financing activities |
( i 2,940 |
) | ( i 2,026 |
) | ||||
Effect of currency exchange rate changes on cash and cash equivalents |
( i 274 |
) |
i — |
|||||
Net decrease in cash and cash equivalents |
( i 42,910 |
) | ( i 16,551 |
) | ||||
Cash and cash equivalents at beginning of period |
i 232,670 |
i 214,683 |
||||||
Cash and cash equivalents at end of period |
$ | i 189,760 |
$ | i 198,132 |
||||
Supplemental disclosures of cash flow information |
||||||||
Interest paid during the period |
$ | i 845 |
$ | i 1,751 |
||||
Income taxes paid, net |
$ | i 503 |
$ | i 296 |
||||
1. |
Description of Business and Basis of Presentation |
2. |
Accounting Policies and Recent Accounting Pronouncements |
3. |
Property and Equipment, Net |
2020 |
||||||||
Computer software and hardware equipment |
$ | i 27,191 |
$ | i 25,252 |
||||
Furniture, fixtures, and equipment |
i 23,375 |
i 23,468 |
||||||
Less: accumulated depreciation and amortization |
( i 27,393 |
) | ( i 26,077 |
) | ||||
$ | i 23,173 |
$ | i 22,643 |
|||||
4. |
Operating Leases |
|
Three Months Ended |
|||||||
|
2019 |
|||||||
Operating lease cost: |
||||||||
Lease cost (1) |
$ |
i 6,263 |
$ |
i 5,909 |
||||
Variable lease cost (2) |
i 1,396 |
i 1,206 |
||||||
Sublease income |
( i 77 |
) | ( i 88 |
) | ||||
$ | i 7,582 |
$ | i 7,027 |
|||||
(1) |
Includes short-term lease cost and ROU asset amortization. |
(2) |
Primarily relates to common area maintenance, property taxes, insurance, utilities and parking. |
Remainder of 2020 |
$ | i 15,952 |
||
2021 |
i 19,294 |
|||
2022 |
i 15,342 |
|||
2023 |
i 12,065 |
|||
2024 |
i 9,887 |
|||
Thereafter |
i 14,838 |
|||
Total future minimum lease payments |
i 87,378 |
|||
Less imputed interest |
( i 7,986 |
) | ||
Present value of operating lease liabilities |
$ | i 79,392 |
||
Three Months Ended |
||||||||
2019 |
||||||||
Operating cash flow information: |
||||||||
Cash paid for amounts included in the measurement of operating lease liabilities |
$ | i 5,223 |
$ | i 4,842 |
||||
Noncash activity: |
||||||||
ROU assets obtained in exchange for operating lease liabilities |
$ |
i 3,109 |
$ |
i 3,227 |
||||
Tenant improvements owned by lessor related to ROU assets (1) |
$ | i 317 |
$ | i 1,306 |
(1) |
Reclassification from other assets current. |
Weighted average remaining operating lease term |
i 5.04 years |
i 5.04 years |
||||||
Weighted average discount rate |
i 3.7 |
% | i 3.8 |
% |
5. |
Investments in Marketable Debt Securities |
Amortized Cost |
Allowance for Credit Losses |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
||||||||||||||||
Short-term investments: |
||||||||||||||||||||
U.S. treasuries |
$ |
i 113,885 |
$ | i — |
$ | i 835 |
$ | i — |
$ | i 114,720 |
||||||||||
U.S. government sponsored entities |
i 9,128 |
i — |
i 9 |
i — |
i 9,137 |
|||||||||||||||
Corporate debt |
i 19,801 |
i — |
i 5 |
( i 95 |
) | i 19,711 |
||||||||||||||
ABS and other |
i 301 |
i — |
i — |
( i 5 |
) | i 296 |
||||||||||||||
$ | i 143,115 |
$ | i — |
$ | i 849 |
$ | ( i 100 |
) | $ | i 143,864 |
||||||||||
Long-term investments: |
||||||||||||||||||||
U.S. treasuries |
$ | i 10,015 |
$ | i — |
$ | i 495 |
$ | i — |
$ | i 10,510 |
||||||||||
U.S. government sponsored entities |
i 1,299 |
i — |
i 29 |
i — |
i 1,328 |
|||||||||||||||
Corporate debt |
i 25,633 |
i — |
i 634 |
( i 661 |
) | i 25,606 |
||||||||||||||
ABS and other |
i 8,007 |
i — |
i 44 |
( i 285 |
) | i 7,766 |
||||||||||||||
$ | i 44,954 |
$ | i — |
$ | i 1,202 |
$ | ( i 946 |
) | $ | i 45,210 |
||||||||||
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
|||||||||||||
Short-term investments: |
||||||||||||||||
U.S. treasuries |
$ | i 124,389 |
$ | i 196 |
$ | ( i 5 |
) | $ | i 124,580 |
|||||||
U.S. government sponsored entities |
i — |
i — |
i — |
i — |
||||||||||||
Corporate debt |
i 26,128 |
i 44 |
i — |
i 26,172 |
||||||||||||
$ | i 150,517 |
$ | i 240 |
$ | ( i 5 |
) | $ |
i 150,752 |
||||||||
Long-term investments: |
||||||||||||||||
U.S. treasuries |
$ | i 24,188 |
$ | i 235 |
$ | i — |
$ | i 24,423 |
||||||||
U.S. government sponsored entities |
i 1,353 |
i 3 |
( i 1 |
) | i 1,355 |
|||||||||||
Corporate debt |
i 25,447 |
i 1,027 |
( i 3 |
) | i 26,471 |
|||||||||||
ABS and other |
i 8,480 |
i 93 |
( i 13 |
) | i 8,560 |
|||||||||||
$ | i 59,468 |
$ | i 1,358 |
$ | ( i 17 |
) | $ | i 60,809 |
||||||||
Less than 12 months |
12 months or |
Total |
||||||||||||||||||||||
Fair Value |
Gross Unrealized Losses |
Fair Value |
Gross Unrealized Losses |
Fair Value |
Gross Unrealized Losses |
|||||||||||||||||||
Corporate debt |
$ | i 17,553 |
$ | ( i 756 |
) | $ | i — |
$ | i — |
$ | i 17,553 |
$ | ( i 756 |
) | ||||||||||
ABS and other |
i 6,207 |
( i 290 |
) | i — |
i — |
i 6,207 |
( i 290 |
) | ||||||||||||||||
$ | i 23,760 |
$ | ( i 1,046 |
) | $ | i — |
$ | i — |
$ | i 23,760 |
$ | ( i 1,046 |
) | |||||||||||
Less than 12 months |
12 months or greater |
Total |
||||||||||||||||||||||
Fair Value |
Gross Unrealized Losses |
Fair Value |
Gross Unrealized Losses |
Fair Value |
Gross Unrealized Losses |
|||||||||||||||||||
U.S. treasuries |
$ | i 39,823 |
$ | ( i 5 |
) | $ | i — |
$ | i — |
$ | $ | ( i 5 |
) | |||||||||||
U.S. government sponsored entities |
i — |
i — |
i 566 |
( i 1 |
) | i 566 |
( i 1 |
) | ||||||||||||||||
Corporate debt |
i 6,029 |
( i 3 |
) | i — |
i — |
i 6,029 |
( i 3 |
) | ||||||||||||||||
ABS and other |
i 1,971 |
( i 13 |
) | i — |
i — |
i 1,971 |
( i 13 |
) | ||||||||||||||||
$ |
i 47,823 |
$ | ( i 21 |
) | $ | i 566 |
$ | ( i 1 |
) | $ | i 48,389 |
$ | ( i 22 |
) | ||||||||||
Three Months Ended |
||||||||
2019 |
||||||||
Gross realized gains (1) |
$ |
i 53 |
$ |
i 35 |
||||
Gross realized losses (1) |
$ | i — |
$ | ( i 47 |
) | |||
(1) |
Recorded in other (expense) income, net in the condensed consolidated statements of net and comprehensive income. The cost basis of securities sold were determined based on the specific identification method. |
Amortized Cost |
Fair Value |
Amortized Cost |
Fair Value |
|||||||||||||
Due in one year or less |
$ | i 143,115 |
$ | i 143,864 |
$ | i 150,517 |
$ | i 150,752 |
||||||||
Due after one year through five years |
i 28,923 |
i 29,204 |
i 41,123 |
i 41,794 |
||||||||||||
Due after five years through ten years |
i 10,840 |
i 10,960 |
i 12,813 |
i 13,467 |
||||||||||||
Due after ten years |
i 5,191 |
i 5,046 |
i 5,532 |
i 5,548 |
||||||||||||
$ | i 188,069 |
$ | i 189,074 |
$ | i 209,985 |
$ | i 211,561 |
|||||||||
Weighted average contractual maturity |
i 1.8 years |
i 1.7 years |
6. |
Acquisitions, Goodwill and Other Intangible Assets |
Gross Carrying Amount |
Accumulated Amortization |
Net Book Value |
Gross Carrying Amount |
Accumulated Amortization |
Net Book Value |
|||||||||||||||||||
Goodwill and intangible assets: |
||||||||||||||||||||||||
Goodwill (1) |
$ | i 19,062 |
$ | i — |
$ | i 19,062 |
$ | i 15,072 |
$ | i — |
$ | i 15,072 |
||||||||||||
Intangible assets (2) |
i 14,851 |
( i 2,659 |
) | i 12,192 |
i 9,050 |
( i 1,810 |
) | i 7,240 |
||||||||||||||||
$ | i 33,913 |
$ | ( i 2,659 |
) | $ | i 31,254 |
$ | i 24,122 |
$ | ( i 1,810 |
) | $ | i 22,312 |
|||||||||||
(1) |
Represents additions from acquisitions. |
(2) |
Total weighted average amortization period was i 5.00 years and i 4.37 years as of March 31, 2020 and December 31, 2019, respectively. |
Three Months Ended |
||||||||
2019 |
||||||||
Beginning balance |
$ |
i 15,072 |
$ |
i 11,459 |
||||
Additions from acquisitions |
i 3,990 |
i — |
||||||
Impairment losses |
i — |
i — |
||||||
Ending balance |
$ | i 19,062 |
$ | i 11,459 |
||||
Remainder of 2020 |
$ | i 2,589 |
||
2021 |
i 2,594 |
|||
2022 |
i 2,212 |
|||
2023 |
i 2,209 |
|||
2024 |
i 1,622 |
|||
Thereafter |
i 966 |
|||
$ | i 12,192 |
|||
7. |
Selected Balance Sheet Data |
Three Months Ended |
||||||||
2019 |
||||||||
Beginning balance |
$ | i 512 |
$ | i 514 |
||||
Credit loss recovery |
( i 120 |
) | ( i 104 |
) | ||||
Write-offs |
( i 2 |
) | ( i 3 |
) | ||||
Ending balance |
$ | i 390 |
$ | i 407 |
||||
Current |
Non-Current |
|||||||||||||||
2020 |
2020 |
|||||||||||||||
Mortgage servicing rights (“MSRs”), net of amortization |
$ | i — |
$ | i — |
$ | i 1,950 |
$ | i 2,002 |
||||||||
Security deposits |
i — |
i — |
i 1,391 |
i 1,345 |
||||||||||||
Employee notes receivable (1) |
i 166 |
i 65 |
i 432 |
i 323 |
||||||||||||
Customer trust accounts and other |
i 2,705 |
i 3,120 |
i 592 |
i 677 |
||||||||||||
$ | i 2,871 |
$ | i 3,185 |
$ | i 4,365 |
$ | i 4,347 |
|||||||||
(1) |
Reduction of accrued bonuses and other employee related expenses in settlement of employee notes receivable were $ i 0 and $ i 60 for the three months ended March 31, 2020 and 2019, respectively. See Note 9 – “Related-Party Transactions” for additional information. |
Three Months Ended |
||||||||
2019 |
||||||||
Beginning balance |
$ | i 2,002 |
$ | i 2,209 |
||||
Additions from acquisition |
i — |
i — |
||||||
Additions |
i 77 |
i 129 |
||||||
Amortization |
( i 129 |
) | ( i 135 |
) | ||||
Ending balance |
$ | i 1,950 |
$ | i 2,203 |
||||
Current |
Non-Current |
|||||||||||||||
2020 |
2020 |
|||||||||||||||
Stock appreciation rights (“SARs”) liability (1) |
$ | i 2,162 |
$ | i 2,080 |
$ | i 16,138 |
$ | i 18,122 |
||||||||
Commissions payable to investment sales and financing professionals |
i 21,159 |
i 40,235 |
i 6,391 |
i 20,818 |
||||||||||||
Deferred compensation liability (1) |
i 1,553 |
i 1,553 |
i 5,691 |
i 6,688 |
||||||||||||
Other |
i 379 |
i 433 |
i — |
i — |
||||||||||||
$ | i 25,253 |
$ | i 44,301 |
$ | i 28,220 |
$ | i 45,628 |
|||||||||
(1) |
The SARs and deferred compensation liability become subject to payout as a result of a participant no longer being considered as a service provider. As a result of the retirement of certain participants, estimated amounts to be paid to the participants within the next twelve months have been classified as current. |
Three Months Ended |
||||||||
2019 |
||||||||
(Decrease) increase in the carrying value of the assets held in the rabbi trust (1) |
$ | ( i 1,388 |
) | $ | i 703 |
|||
(Decrease) increase in the net carrying value of the deferred compensation obligation (2) |
$ | ( i 1,273 |
) | $ | i 685 |
|||
(1) |
Recorded in other (expense) income, net in the condensed consolidated statements of net and comprehensive income. |
(2) |
Recorded in selling, general and administrative expense in the condensed consolidated statements of net and comprehensive income. |
Non-Current |
||||||||
2020 |
||||||||
Deferred consideration and other (1) (2) |
$ | i 3,129 |
$ | i 830 |
||||
Contingent consideration (1) (2) |
i 2,498 |
i 2,709 |
||||||
$ | i 5,627 |
$ | i 3,539 |
|||||
(1) |
The current portions of deferred consideration in the amounts of $ i 1,783 and $ i 560 as of March 31, 2020 and December 31, 2019, respectively, are included in accounts payable and other liabilities in the condensed consolidated balance sheets. The current portions of contingent consideration in the amounts of $ i 664 and $ i 678 as of March 31, 2020 and December 31, 2019, respectively, are included in accounts payable and other liabilities in the condensed consolidated balance sheets. |
(2) |
Deferred consideration in the aggregate amount of $ i 1,401 was reclassified from contingent consideration during the three months ended March 31, 2020 and of this amount, $ i 560
and $ i 841 pertained to the current and non-current portions, respectively. |
8. |
Notes Payable to Former Stockholders |
9. |
Related-Party Transactions |
10. |
Fair Value Measurements |
• | Level 1: |
• | Level 2: |
• | Level 3: |
Fair Value |
Level 1 |
Level 2 |
Level 3 |
Fair Value |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||||||||||||||
Assets: |
||||||||||||||||||||||||||||||||
Assets held in rabbi trust |
$ | i 7,992 |
$ | i — |
$ | i 7,992 |
$ | i — |
$ | i 9,452 |
$ | i — |
$ | i 9,452 |
$ | i — |
||||||||||||||||
Cash equivalents (1) : |
||||||||||||||||||||||||||||||||
Commercial paper and other |
$ | i 9,498 |
$ | i — |
$ | i 9,498 |
$ | i — |
$ | i 5,087 |
$ | i — |
$ | i 5,087 |
$ | i — |
||||||||||||||||
Money market funds |
i 146,769 |
i 146,769 |
i — |
i — |
i 185,513 |
i 185,513 |
i — |
i — |
||||||||||||||||||||||||
$ | i 156,267 |
$ | i 146,769 |
$ | i 9,498 |
$ | i — |
$ | i 190,600 |
$ | i 185,513 |
$ | i 5,087 |
$ | i — |
|||||||||||||||||
Marketable debt securities, available-for-sale: |
||||||||||||||||||||||||||||||||
Short-term investments: |
||||||||||||||||||||||||||||||||
U.S. treasuries |
$ | i 114,720 |
$ | i 114,720 |
$ | i — |
$ | i — |
$ | i 124,580 |
$ | i 124,580 |
$ | i — |
$ | i — |
||||||||||||||||
U.S. government sponsored entities |
i 9,137 |
i — |
i 9,137 |
i — |
i — |
i — |
i — |
i — |
||||||||||||||||||||||||
Corporate debt |
i 19,711 |
i — |
i 19,711 |
i — |
i 26,172 |
i — |
i 26,172 |
i — |
||||||||||||||||||||||||
ABS and other |
i 296 |
i — |
i 296 |
i — |
i — |
i — |
i — |
i — |
||||||||||||||||||||||||
$ | i 143,864 |
$ | i 114,720 |
$ | i 29,144 |
$ | i — |
$ | i 150,752 |
$ | i 124,580 |
$ | i 26,172 |
$ | i — |
|||||||||||||||||
Long-term investments: |
||||||||||||||||||||||||||||||||
U.S. treasuries |
$ | i 10,510 |
$ | i 10,510 |
$ | i — |
$ | i — |
$ | i 24,423 |
$ | i 24,423 |
$ | i — |
$ | i — |
||||||||||||||||
U.S. government sponsored entities |
i 1,328 |
i — |
i 1,328 |
i — |
i 1,355 |
i — |
i 1,355 |
i — |
||||||||||||||||||||||||
Corporate debt |
i 25,606 |
i — |
i 25,606 |
i — |
i 26,471 |
i — |
i 26,471 |
i — |
||||||||||||||||||||||||
ABS and other |
i 7,766 |
i — |
i 7,766 |
i — |
i 8,560 |
i — |
i 8,560 |
i — |
||||||||||||||||||||||||
$ | i 45,210 |
$ | i 10,510 |
$ | i 34,700 |
$ | i — |
$ | i 60,809 |
$ | i 24,423 |
$ | i 36,386 |
$ | i — |
|||||||||||||||||
Liabilities: |
||||||||||||||||||||||||||||||||
Contingent consideration |
$ | i 3,162 |
$ | i — |
$ | i — |
$ | |
$ | i 3,387 |
$ | i — |
$ | i — |
$ | i 3,387 |
||||||||||||||||
Deferred compensation liability |
$ | i 7,244 |
$ | i 7,244 |
$ | i — |
$ | i — |
$ | |
$ | i 8,241 |
$ | |
$ | |
||||||||||||||||
(1) |
Included in cash and cash equivalents on the accompanying condensed consolidated balance sheets. |
Three Months Ended |
||||||||
2019 |
||||||||
Beginning balance (1) |
$ | $ | i 2,875 |
|||||
Contingent consideration in connection with acquisitions (2) |
i — |
i — |
||||||
Change in fair value of contingent consideration |
( i 225 |
) | i 48 |
|||||
Payments of contingent consideration |
i — |
i — |
||||||
Ending balance |
$ | i 3,162 |
$ |
i 2,923 |
||||
(1) |
Beginning balance for 2020 reflects the reclassification of $ i 1,401 from contingent consideration related to deferred consideration. See Note 7 – “Selected Balance Sheet Data – Other Liabilities” for additional information. |
(2) |
Contingent consideration in connections with acquisitions represents a noncash investing activity. |
Fair Value at |
Valuation Technique |
Unobservable inputs |
Range (Weighted Average) (1) |
|||||||||
Contingent consideration |
$ |
i 3,162 |
Discounted cash flow |
Expected life of cash flows |
i 0.2- i 5.5 years ( i 2.1 years) |
|||||||
Discount rate |
i 6.7%- i 6.9% ( i 6.8%)
|
|||||||||||
Probability of achievement |
i 33.0%- i 100.0% ( i 74.0%)
|
|||||||||||
Fair Value at |
Valuation Technique |
Unobservable inputs |
Range (Weighted Average) (1) |
|||||||||
Contingent consideration |
$ |
i 3,387 |
Discounted cash flow |
Expected life of cash flows |
i 0.4- i 5.8 years ( i 2.4 years) |
|||||||
Discount rate |
i 3.6%- i 4.9% ( i 4.1%)
|
|||||||||||
Probability of achievement |
i 33.0%- i 100.0% ( i 74.3%)
|
(1) |
Unobservable inputs were weighted by the relative fair value of the instruments. |
Fair Value at |
Valuation Technique |
Unobservable inputs |
Range (Weighted Average) (1) |
|||||||||
MSRs |
$ |
i 2,125 |
Discounted cash flow |
Constant prepayment rates |
i 0.0%- i 20.0% ( i 10.0%) |
|||||||
Constant default rate |
i 1.5%- i 1.5%
( i 1.5%) |
|||||||||||
Loss severity |
i 30.2%- i 30.2% ( i 30.2%)
|
|||||||||||
Discount rate |
i 10.0%- i 10.0%
( i 10.0%) |
Fair Value at |
Valuation Technique |
Unobservable inputs |
Range (Weighted Average) (1) |
|||||||||
MSRs |
$ |
i 2,204 |
Discounted cash flow |
Constant prepayment rates |
i 0.0%- i 20.0% ( i 10.0%) |
|||||||
Constant default rate |
i 2.0%- i 2.0% ( i 2.0%)
|
|||||||||||
Loss severity |
i 40.0%- i 40.0% ( i 40.0%)
|
|||||||||||
Discount rate |
i 9.5%- i 9.7% ( i 9.7%)
|
(1) |
Weighted average is based on the 10% constant prepayment rate scenario which the Company uses as the reported fair value. |
11. |
Stockholders’ Equity |
12. |
Stock-Based Compensation Plans |
RSA Grants to Non-employee Directors |
RSU Grants to Employees |
RSU Grants to Independent Contractors |
Total |
Weighted- Average Grant Date Fair Value Per Share |
||||||||||||||||
Nonvested shares at December 31, 2019 |
i 17,480 |
i 525,115 |
i 257,480 |
i 800,075 |
$ | i 33.91 |
||||||||||||||
Granted |
i — |
i 229,315 |
i 20,384 |
i 249,699 |
i 36.74 |
|||||||||||||||
Vested |
i — |
( i 139,152 |
) | ( i 30,954 |
) | ( i 170,106 |
) | i 31.75 |
||||||||||||
Transferred |
i — |
( i 14,911 |
) | i 14,911 |
i — |
i 32.26 |
||||||||||||||
Forfeited/canceled |
i — |
( i 8,087 |
) | ( i 223 |
) | ( i 8,310 |
) | i 38.19 |
||||||||||||
Nonvested shares at March 31, 2020 (1) |
i 17,480 |
i 592,280 |
i 261,598 |
i 871,358 |
$ | i 35.10 |
||||||||||||||
Unrecognized stock-based compensation expense as of March 31, 2020 (2) |
$ | i 74 |
$ | i 20,079 |
$ | i 8,132 |
$ | i 28,285 |
||||||||||||
Weighted average remaining vesting period (years) as of March 31, 2020 |
i 0.17 |
i 4.05 |
i 3.30 |
i 3.83 |
||||||||||||||||
(1) |
Nonvested RSUs will be settled through the issuance of new shares of common stock. |
(2) |
The total unrecognized compensation expense is expected to be recognized over a weighted-average period of approximately i 3.83 years. |
2021 |
i 60,373 |
|||
2022 |
i 281,193 |
|||
i 341,566 |
||||
Three Months Ended |
||||||||
2019 |
||||||||
ESPP |
$ | i 47 |
$ | i 30 |
||||
RSAs – non-employee directors |
i 160 |
i 170 |
||||||
RSUs – employees (1) |
i 1,656 |
i 1,345 |
||||||
RSUs – independent contractors |
i 769 |
i 796 |
||||||
$ | i 2,632 |
$ | i 2,341 |
|||||
(1) |
Includes expense related to the acceleration of vesting of certain RSUs. |
13. |
Income Taxes |
Three Months Ended March 31, |
||||||||||||||||
2019 |
||||||||||||||||
Amount |
Rate |
Amount |
Rate |
|||||||||||||
Income tax expense at the federal statutory rate |
$ | i 3,987 |
i 21.0 |
% | $ | i 4,472 |
i 21.0 |
% | ||||||||
State income tax expense, net of federal benefit |
i 1,018 |
i 5.4 |
% | i 894 |
i 4.2 |
% | ||||||||||
Windfall tax benefits, net related to stock-based compensation |
( i 17 |
) | ( i 0.1 |
)% | ( i 265 |
) | ( i 1.2 |
)% | ||||||||
Change in valuation allowance |
i 367 |
i 1.9 |
% | i 259 |
i 1.2 |
% | ||||||||||
Permanent and other items (1) |
i 562 |
i 3.0 |
% | i 297 |
i 1.4 |
% | ||||||||||
$ |
i 5,917 |
i 31.2 |
% | $ |
i 5,657 |
i 26.6 |
% | |||||||||
(1) | Permanent items relate principally to compensation charges, qualified transportation fringe benefits, reversal of uncertain tax positions, meals and entertainment and our tax-exempt deferred compensation plan assets. |
14. |
Earnings per Share |
Three Months Ended |
||||||||
2019 |
||||||||
Numerator (Basic and Diluted): |
||||||||
Net income |
$ | i 13,070 |
$ | i 15,638 |
||||
Denominator: |
||||||||
Basic |
||||||||
Weighted average common shares issued and outstanding |
i 39,217 |
i 38,996 |
||||||
Deduct: Unvested RSAs (1) |
( i 18 |
) | ( i 27 |
) | ||||
Add: Fully vested DSUs (2) |
i 342 |
i 342 |
||||||
Weighted Average Common Shares Outstanding |
i 39,541 |
i 39,311 |
||||||
Basic earnings per common share |
$ | i 0.33 |
$ | i 0.40 |
||||
Diluted |
||||||||
Weighted Average Common Shares Outstanding from above |
i 39,541 |
i 39,311 |
||||||
Add: Dilutive effect of RSUs, RSAs & ESPP |
i 105 |
i 204 |
||||||
Weighted Average Common Shares Outstanding |
i 39,646 |
i 39,515 |
||||||
Diluted earnings per common share |
$ | i 0.33 |
$ | i 0.40 |
||||
Antidilutive shares excluded from diluted earnings per common share (3) |
i 521 |
i 212 |
||||||
(1) |
RSAs were issued and outstanding to the non-employee directors and have a one-year or three-year vesting term subject to service requirements. See Note 12 – “Stock-Based Compensation Plans” for additional information. |
(2) |
Shares are included in weighted average common shares outstanding as the shares are fully vested but have not yet been delivered. See Note 12 – “Stock-Based Compensation Plans” for additional information. |
(3) |
Primarily pertaining to RSU grants to the Company’s employees and independent contractors. |
15. |
Commitments and Contingencies |
16. |
Subsequent Events |
• | Properties priced less than $1 million; |
• | Private client market: |
• | Middle market: |
• | Larger transaction market: |
Three Months Ended March 31, |
||||||||||||||||||||||||||||||||||||
2019 |
Change |
|||||||||||||||||||||||||||||||||||
Real Estate Brokerage |
Number |
Volume |
Revenues |
Number |
Volume |
Revenues |
Number |
Volume |
Revenues |
|||||||||||||||||||||||||||
(in millions) |
(in thousands) |
(in millions) |
(in thousands) |
(in millions) |
(in thousands) |
|||||||||||||||||||||||||||||||
<$1 million |
216 |
$ | 136 |
$ | 5,742 |
201 |
$ | 131 |
$ | 5,288 |
15 |
$ | 5 |
$ | 454 |
|||||||||||||||||||||
Private client market ($1 - $10 million) |
1,242 |
4,001 |
114,264 |
1,060 |
3,320 |
96,058 |
182 |
681 |
18,206 |
|||||||||||||||||||||||||||
Middle market ( ≥ $10 - $20 million) |
91 |
1,222 |
22,668 |
92 |
1,245 |
23,580 |
(1 |
) | (23 |
) | (912 |
) | ||||||||||||||||||||||||
Larger transaction market ( ≥ $20 million) |
66 |
3,083 |
29,155 |
52 |
2,407 |
20,011 |
14 |
676 |
9,144 |
|||||||||||||||||||||||||||
1,615 |
$ | 8,442 |
$ | 171,829 |
1,405 |
$ | 7,103 |
$ | 144,937 |
210 |
$ | 1,339 |
$ | 26,892 |
||||||||||||||||||||||
Three Months Ended March 31, |
||||||||
Real Estate Brokerage |
2020 |
2019 |
||||||
Average Number of Investment Sales Professionals |
1,889 |
1,818 |
||||||
Average Number of Transactions per Investment Sales Professional |
0.85 |
0.77 |
||||||
Average Commission per Transaction |
$ | 106,396 |
$ | 103,158 |
||||
Average Commission Rate |
2.04 |
% | 2.04 |
% | ||||
Average Transaction Size (in thousands) |
$ | 5,227 |
$ | 5,056 |
||||
Total Number of Transactions |
1,615 |
1,405 |
||||||
Total Sales Volume (in millions) |
$ | 8,442 |
$ | 7,103 |
||||
Three Months Ended March 31, |
||||||||
Financing (1) |
2020 |
2019 |
||||||
Average Number of Financing Professionals |
89 |
106 |
||||||
Average Number of Transactions per Financing Professional |
5.37 |
3.66 |
||||||
Average Fee per Transaction |
$ | 30,900 |
$ | 33,541 |
||||
Average Fee Rate |
0.84 |
% | 0.89 |
% | ||||
Average Transaction Size (in thousands) |
$ | 3,670 |
$ | 3,763 |
||||
Total Number of Transactions |
478 |
388 |
||||||
Total Financing Volume (in millions) |
$ | 1,754 |
$ | 1,460 |
(1) |
Operating metrics calculated excluding certain financing fees not directly associated with transactions. |
|
Percentage of Revenue |
|
Percentage of Revenue |
Change |
||||||||||||||||||||
Dollar |
Percentage |
|||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||
Real estate brokerage commissions |
$ | 171,829 |
90.1 |
% | $ | 144,937 |
90.2 |
% | $ | 26,892 |
18.6 |
% | ||||||||||||
Financing fees |
15,351 |
8.0 |
13,732 |
8.5 |
1,619 |
11.8 |
% | |||||||||||||||||
Other revenues |
3,537 |
1.9 |
2,038 |
1.3 |
1,499 |
73.6 |
% | |||||||||||||||||
Total revenues |
190,717 |
100.0 |
160,707 |
100.0 |
30,010 |
18.7 |
% | |||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||
Cost of services |
113,757 |
59.6 |
91,688 |
57.1 |
22,069 |
24.1 |
% | |||||||||||||||||
Selling, general and administrative expense |
54,860 |
28.8 |
48,918 |
30.4 |
5,942 |
12.1 |
% | |||||||||||||||||
Depreciation and amortization expense |
2,464 |
1.3 |
1,832 |
1.1 |
632 |
34.5 |
% | |||||||||||||||||
Total operating expenses |
171,081 |
89.7 |
142,438 |
88.6 |
28,643 |
20.1 |
% | |||||||||||||||||
Operating income |
19,636 |
10.3 |
18,269 |
11.4 |
1,367 |
7.5 |
% | |||||||||||||||||
Other (expense) income, net |
(366 |
) | (0.2 |
) | 3,375 |
2.1 |
(3,741 |
) | (110.8 |
)% | ||||||||||||||
Interest expense |
(283 |
) | (0.1 |
) | (349 |
) | (0.2 |
) | 66 |
(18.9 |
)% | |||||||||||||
Income before provision for income taxes |
18,987 |
10.0 |
21,295 |
13.3 |
(2,308 |
) | (10.8 |
)% | ||||||||||||||||
Provision for income taxes |
5,917 |
3.1 |
5,657 |
3.6 |
260 |
4.6 |
% | |||||||||||||||||
Net income |
$ | 13,070 |
6.9 |
% | $ | 15,638 |
9.7 |
% | $ | (2,568 |
) | (16.4 |
)% | |||||||||||
Adjusted EBITDA (1) |
$ | 22,378 |
11.7 |
% | $ | 23,159 |
14.4 |
% | $ | (781 |
) | (3.4 |
)% | |||||||||||
(1) |
Adjusted EBITDA is not a measurement of our financial performance under U.S. generally accepted accounting principles (“U.S. GAAP”) and should not be considered as an alternative to net income, operating income or any other measures derived in accordance with U.S. GAAP. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, see “Non-GAAP Financial Measure.” |
Three Months Ended |
||||||||
2019 |
||||||||
Net income |
$ | 13,070 |
$ | 15,638 |
||||
Adjustments: |
||||||||
Interest income and other (1) |
(2,003 |
) | (2,541 |
) | ||||
Interest expense |
283 |
349 |
||||||
Provision for income taxes |
5,917 |
5,657 |
||||||
Depreciation and amortization |
2,464 |
1,832 |
||||||
Stock-based compensation |
2,632 |
2,341 |
||||||
Non-cash MSR activity (2) |
15 |
(117 |
) | |||||
Adjusted EBITDA (3) |
$ | 22,378 |
$ | 23,159 |
||||
(1) |
Other includes net realized gains (losses) on marketable debt securities available-for-sale. |
(2) |
Non-cash MSR activity includes the assumption of servicing obligations. |
(3) |
The decrease in Adjusted EBITDA for the three months ended March 31, 2020 compared to the same period in 2019 is primarily due to a higher proportion of operating expenses compared to total revenues. |
Three Months Ended |
||||||||
2019 |
||||||||
Net cash used in operating activities |
$ | (52,793 |
) | $ | (38,598 |
) | ||
Net cash provided by investing activities |
13,097 |
24,073 |
||||||
Net cash used in financing activities |
(2,940 |
) | (2,026 |
) | ||||
Effect of currency exchange rate changes on cash and cash equivalents |
(274 |
) | — |
|||||
Net decrease in cash and cash equivalents |
(42,910 |
) | (16,551 |
) | ||||
Cash and cash equivalents at beginning of period |
232,670 |
214,683 |
||||||
Cash and cash equivalents at end of period |
$ | 189,760 |
$ | 198,132 |
||||
Change in Interest Rates |
Approximate Change in Fair Value of Investments Increase (Decrease) |
|||
2% Decrease |
$ | 2,703 |
||
1% Decrease |
$ | 1,469 |
||
1% Increase |
$ | (2,114 |
) | |
2% Increase |
$ | (4,228 |
) |
• | Any impairment in value of our investments in marketable debt securities, available-for-sale, tangible or intangible assets, which could be recorded as a result of weaker economic conditions. |
• | A potential negative impact on the health of our employees and investment sales and financing professionals, particularly if a significant number of them are impacted, could result in a deterioration in our ability to ensure business continuity during a disruption. |
• | If significant portions of our workforce are unable to work effectively, including because of quarantines, facility closures, ineffective remote work arrangements or technology failures or limitations, our operations would be adversely impacted. |
Exhibit No. |
Description | |||
10.1* |
||||
31.1* |
||||
31.2* |
||||
32.1** |
||||
101 |
The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Net and Comprehensive Income, (iii) Condensed Consolidated Statements of Stockholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags. | |||
104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* |
Filed herewith. |
** |
Furnished, not filed. |
Marcus & Millichap, Inc . | ||||||
Date: |
By: |
/s/ Hessam Nadji | ||||
President and Chief Executive Officer (Principal Executive Officer) | ||||||
Date: |
By: |
/s/ Martin E. Louie | ||||
Chief Financial Officer (Principal Financial Officer) |
This ‘10-Q’ Filing | Date | Other Filings | ||
---|---|---|---|---|
12/31/22 | ||||
6/1/22 | ||||
5/31/22 | ||||
1/1/21 | ||||
12/31/20 | ||||
12/15/20 | ||||
Filed on: | 5/11/20 | |||
5/4/20 | ||||
For Period end: | 3/31/20 | |||
3/15/20 | ||||
3/2/20 | 10-K | |||
1/1/20 | ||||
12/31/19 | 10-K | |||
11/27/19 | ||||
5/28/19 | 8-K | |||
3/31/19 | 10-Q, 4 | |||
1/1/19 | ||||
12/31/18 | 10-K | |||
6/18/14 | 8-K | |||
1/1/14 | ||||
3/31/13 | ||||
List all Filings |
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 3/01/21 Marcus & Millichap, Inc. 10-K 12/31/20 110:13M Donnelley … Solutions/FA |