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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 11/08/19 Marcus & Millichap, Inc. 10-Q 9/30/19 92:13M Donnelley … Solutions/FA |
Document/Exhibit Description Pages Size 1: 10-Q Quarterly Report HTML 1.55M 2: EX-31.1 Certification -- §302 - SOA'02 HTML 35K 3: EX-31.2 Certification -- §302 - SOA'02 HTML 35K 4: EX-32.1 Certification -- §906 - SOA'02 HTML 32K 61: R1 Cover Page HTML 82K 16: R2 Condensed Consolidated Balance Sheets HTML 133K 44: R3 Condensed Consolidated Balance Sheets HTML 48K (Parenthetical) 76: R4 Condensed Consolidated Statements of Net and HTML 116K Comprehensive Income 60: R5 Condensed Consolidated Statements of Net and HTML 35K Comprehensive Income (Parenthetical) 15: R6 Condensed Consolidated Statements of Stockholders' HTML 97K Equity 43: R7 Condensed Consolidated Statements of Cash Flows HTML 127K 74: R8 Description of Business and Basis of Presentation HTML 42K 64: R9 Accounting Policies and Recent Accounting HTML 57K Pronouncements 73: R10 Property and Equipment, Net HTML 46K 63: R11 Operating Leases HTML 97K 13: R12 Investments in Marketable Securities HTML 299K 45: R13 Goodwill and Other Intangible Assets HTML 94K 75: R14 Selected Balance Sheet Data HTML 158K 65: R15 Notes Payable to Former Stockholders HTML 32K 14: R16 Related-Party Transactions HTML 41K 46: R17 Fair Value Measurements HTML 278K 77: R18 Stockholders' Equity HTML 35K 62: R19 Stock-Based Compensation Plans HTML 139K 29: R20 Income Taxes HTML 97K 37: R21 Earnings per Share HTML 113K 91: R22 Commitments and Contingencies HTML 39K 57: R23 Subsequent Events HTML 32K 30: R24 Description of Business and Basis of Presentation HTML 88K (Policies) 38: R25 Property and Equipment, Net (Tables) HTML 45K 92: R26 Operating Leases (Tables) HTML 104K 58: R27 Investments in Marketable Securities (Tables) HTML 301K 28: R28 Goodwill and Other Intangible Assets (Tables) HTML 99K 39: R29 Selected Balance Sheet Data (Tables) HTML 153K 42: R30 Fair Value Measurements (Tables) HTML 268K 11: R31 Stock-Based Compensation Plans (Tables) HTML 135K 67: R32 Income Taxes (Tables) HTML 94K 79: R33 Earnings per Share (Tables) HTML 113K 41: R34 Description of Business and Basis of Presentation HTML 37K - Additional Information (Detail) 10: R35 Accounting Policies and Recent Accounting HTML 75K Pronouncements - Additional Information (Detail) 66: R36 Property and Equipment, Net - Schedule of Property HTML 43K and Equipment, Net (Detail) 78: R37 Property and Equipment, Net - Additional HTML 34K Information (Detail) 40: R38 Operating Leases - Additional Information (Detail) HTML 36K 12: R39 Operating Leases - Schedule of Operating Lease HTML 38K Cost (Detail) 36: R40 Operating Leases - Maturities of lease liabilities HTML 48K (Detail) 26: R41 Operating Leases - Schedule of Supplemental Cash HTML 37K Flow Information and Noncash Activity Related to Operating Leases (Detail) 53: R42 Operating Leases - Schedule of Other Information HTML 33K Related to Operating Leases (Detail) 85: R43 Operating Leases - Schedule of Future Minimum HTML 50K Lease Payments Under Non-cancelable Operating Leases (Detail) 35: R44 Investments in Marketable Securities - Schedule of HTML 68K Amortized Cost and Fair Value of Marketable Securities, Available-for-Sale, by Type of Security (Detail) 24: R45 Investments in Marketable Securities - Amortized HTML 38K Cost and Fair Value of Investments in Available for Sale Securities (Detail) 52: R46 Investments in Marketable Securities - Gross HTML 33K Realized Gains and Losses from Sale of Available for Sale Securities (Detail) 84: R47 Investments in Marketable Securities - Schedule of HTML 62K Amortized Cost and Fair Value of Marketable Securities, Available-for-Sale, by Contractual Maturity (Detail) 34: R48 Goodwill and Other Intangible Assets - Summary of HTML 48K Goodwill and Intangible Assets (Detail) 27: R49 Goodwill and Other Intangible Assets - Summary of HTML 38K Net Change in Carrying Value of Intangible Assets (Detail) 20: R50 Goodwill and Other Intangible Assets - Schedule of HTML 46K Estimated Amortization Expense for Intangible Assets (Detail) 49: R51 Selected Balance Sheet Data - Schedule of Other HTML 45K Assets (Detail) 80: R52 Selected Balance Sheet Data - Schedule of Other HTML 45K Assets (Parenthetical) (Detail) 68: R53 Selected Balance Sheet Data - Summary of Net HTML 40K Change in Carrying Value of MSRs (Detail) 21: R54 Selected Balance Sheet Data - Additional HTML 82K Information (Detail) 50: R55 Selected Balance Sheet Data - Components of HTML 51K Deferred Compensation and Commissions (Detail) 81: R56 Selected Balance Sheet Data - Summary of Net HTML 34K Change in Carrying Value of Assets Held in Rabbi Trust and Deferred Compensation Liability (Detail) 69: R57 Selected Balance Sheet Data - Summary of Deferred HTML 37K Rent and Other Liabilities (Detail) 19: R58 Selected Balance Sheet Data - Summary of Deferred HTML 33K Rent and Other Liabilities (Parenthetical) (Detail) 51: R59 Notes Payable to Former Stockholders - Additional HTML 42K Information (Detail) 86: R60 Related-Party Transactions - Additional HTML 59K Information (Detail) 55: R61 Fair Value Measurements - Schedule of Assets and HTML 155K Liabilities at Fair Value on Recurring Basis (Detail) 22: R62 Fair Value Measurements - Schedule of Assets and HTML 52K Liabilities at Fair Value on Recurring Basis (Parenthetical) (Detail) 32: R63 Fair Value Measurements - Additional Information HTML 40K (Detail) 87: R64 Stockholders' Equity - Additional Information HTML 50K (Detail) 56: R65 Stock-Based Compensation Plans - 2013 Omnibus HTML 35K Equity Incentive Plan - Award Limitations - Additional Information (Detail) 23: R66 Stock-Based Compensation Plans - 2013 Omnibus HTML 59K Equity Incentive Plan - Additional Information (Detail) 33: R67 Stock-Based Compensation Plans - Outstanding HTML 77K Awards Under 2013 Omnibus Equity Incentive Plan (Detail) 89: R68 Stock-Based Compensation Plans - Outstanding HTML 31K Awards Under 2013 Omnibus Equity Incentive Plan (Parenthetical) (Detail) 54: R69 Stock-Based Compensation Plans - Employee Stock HTML 56K Purchase Plan - Additional Information (Detail) 71: R70 Stock-Based Compensation Plans - Amendments to HTML 37K Restricted Stock and SARs - Additional Information (Detail) 83: R71 Stock-Based Compensation Plans - Schedule of HTML 36K Future Share Settlements (Detail) 48: R72 Stock-Based Compensation Plans - Stock-Based HTML 49K Compensation Expense (Detail) 18: R73 Income Taxes - Additional Information (Detail) HTML 32K 70: R74 Income Taxes - Components of Provision for Income HTML 68K Taxes and Income before Provision for Income Taxes (Detail) 82: R75 Earnings per Share - Computation of Basic and HTML 69K Diluted Earnings Per Share, Including Antidilutive Securities Excluded from Computation of Earnings Per Share (Detail) 47: R76 Earnings per Share - Computation of Basic and HTML 37K Diluted Earnings Per Share, Including Antidilutive Securities Excluded from Computation of Earnings Per Share (Parenthetical) (Detail) 17: R77 Commitments and Contingencies - Additional HTML 84K Information Credit Agreement (Detail) 72: R78 Commitments and Contingencies - Additional HTML 31K Information Other (Detail) 25: XML IDEA XML File -- Filing Summary XML 175K 59: XML XBRL Instance -- d597783d10q_htm XML 3.64M 90: EXCEL IDEA Workbook of Financial Reports XLSX 89K 6: EX-101.CAL XBRL Calculations -- mmi-20190930_cal XML 216K 7: EX-101.DEF XBRL Definitions -- mmi-20190930_def XML 591K 8: EX-101.LAB XBRL Labels -- mmi-20190930_lab XML 1.36M 9: EX-101.PRE XBRL Presentations -- mmi-20190930_pre XML 1.00M 5: EX-101.SCH XBRL Schema -- mmi-20190930 XSD 227K 31: JSON XBRL Instance as JSON Data -- MetaLinks 392± 626K 88: ZIP XBRL Zipped Folder -- 0001193125-19-287779-xbrl Zip 235K
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 |
i 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, i 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 ☐ |
(Unaudited) |
||||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | i 226,081 |
$ | i 214,683 |
||||
Commissions receivable |
i 6,316 |
i 4,948 |
||||||
Prepaid expenses |
i 9,330 |
i 7,904 |
||||||
Income tax receivable |
i 7,786 |
i — |
||||||
Marketable securities, available-for-sale |
i 124,475 |
i 137,436 |
||||||
Other assets, net |
i 12,352 |
i 6,368 |
||||||
Total current assets |
i 386,340 |
i 371,339 |
||||||
Prepaid rent |
i — |
i 13,892 |
||||||
Property and equipment, net |
i 21,609 |
i 19,550 |
||||||
Operating lease right-of-use assets, net |
i 90,165 |
i — |
||||||
Marketable securities, available-for-sale |
i 70,785 |
i 83,209 |
||||||
Assets held in rabbi trust |
i 9,102 |
i 8,268 |
||||||
Deferred tax assets, net |
i 18,513 |
i 22,959 |
||||||
Goodwill and other intangible assets, net |
i 14,647 |
i 15,385 |
||||||
Other assets |
i 53,432 |
i 31,778 |
||||||
Total assets |
$ | i 664,593 |
$ | i 566,380 |
||||
Liabilities and stockholders’ equity |
||||||||
Current liabilities: |
||||||||
Accounts payable and other liabilities |
$ | i 11,003 |
$ | i 11,035 |
||||
Notes payable to former stockholders |
i 6,564 |
i 1,087 |
||||||
Deferred compensation and commissions |
i 32,450 |
i 47,910 |
||||||
Income tax payable |
i — |
i 4,486 |
||||||
Operating lease liabilities |
i 17,500 |
i — |
||||||
Accrued bonuses and other employee related expenses |
i 16,964 |
i 28,338 |
||||||
Total current liabilities |
i 84,481 |
i 92,856 |
||||||
Deferred compensation and commissions |
i 41,695 |
i 49,887 |
||||||
Notes payable to former stockholders |
i — |
i 6,564 |
||||||
Operating lease liabilities |
i 64,316 |
i — |
||||||
Deferred rent and other liabilities |
i 2,001 |
i 7,499 |
||||||
Total liabilities |
i 192,493 |
i 156,806 |
||||||
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 September 30, 2019 and December 31, 2018, respectively |
i — |
i — |
||||||
Common stock, $ i i 0.0001 /
par value: |
||||||||
Authorized shares – i i 150,000,000 / ;
issued and outstanding shares – i i 39,132,236 / and i i 38,814,464 /
at September 30, 2019 and December 31, 2018, respectively |
i 4 |
i 4 |
||||||
Additional paid-in capital |
i 102,142 |
i 97,458 |
||||||
Stock notes receivable from employees |
( i 4 |
) | ( i 4 |
) | ||||
Retained earnings |
i 367,550 |
i 311,341 |
||||||
Accumulated other comprehensive income |
i 2,408 |
i 775 |
||||||
Total stockholders’ equity |
i 472,100 |
i 409,574 |
||||||
Total liabilities and stockholders’ equity |
$ | i 664,593 |
$ | i 566,380 |
||||
Three Months Ended September 30, |
Nine Months Ended |
|||||||||||||||
2018 |
2019 |
2018 |
||||||||||||||
Revenues: |
||||||||||||||||
Real estate brokerage commissions |
$ | i 180,198 |
$ | i 191,980 |
$ | i 513,815 |
$ | i 536,145 |
||||||||
Financing fees |
i 16,013 |
i 15,947 |
i 47,487 |
i 41,234 |
||||||||||||
Other revenues |
i 2,009 |
i 2,663 |
i 7,218 |
i 7,154 |
||||||||||||
Total revenues |
i 198,220 |
i 210,590 |
i 568,520 |
i 584,533 |
||||||||||||
Operating expenses: |
||||||||||||||||
Cost of services |
i 124,147 |
i 132,896 |
i 343,682 |
i 354,414 |
||||||||||||
Selling, general and administrative expense |
i 48,091 |
i 48,659 |
i 149,845 |
i 145,792 |
||||||||||||
Depreciation and amortization expense |
i 1,910 |
i 1,651 |
i 5,674 |
i 4,529 |
||||||||||||
Total operating expenses |
i 174,148 |
i 183,206 |
i 499,201 |
i 504,735 |
||||||||||||
Operating income |
i 24,072 |
i 27,384 |
i 69,319 |
i 79,798 |
||||||||||||
Other income (expense), net |
i 2,573 |
i 2,127 |
i 9,067 |
i 5,060 |
||||||||||||
Interest expense |
( i 329 |
) | ( i 342 |
) | ( i 1,018 |
) | ( i 1,054 |
) | ||||||||
Income before provision for income taxes |
i 26,316 |
i 29,169 |
i 77,368 |
i 83,804 |
||||||||||||
Provision for income taxes |
i 7,024 |
i 8,315 |
i 21,159 |
i 22,772 |
||||||||||||
Net income |
i 19,292 |
i 20,854 |
i 56,209 |
i 61,032 |
||||||||||||
Other comprehensive income (loss): |
||||||||||||||||
Marketable securities, available-for-sale: |
||||||||||||||||
Change in unrealized gains (losses) |
i 160 |
( i 115 |
) | i 1,874 |
( i 779 |
) | ||||||||||
Less: reclassification adjustment for net (gains) losses included in other income (expense), net |
( i 23 |
) | i — |
( i 41 |
) | i 8 |
||||||||||
Net change, net of tax of $ i 46 , $( i 38),
$ i 617 and $( i 259) for the three and nine
monthsended September 30, 2019 and 2018, respectively |
i 137 |
( i 115 |
) | i 1,833 |
( i 771 |
) | ||||||||||
Foreign currency translation gain (loss), net of tax of $ i i i i 0 / / /
for each of the three and nine months ended September 30, 2019 and 2018 |
i 114 |
( i 29 |
) | ( i 200 |
) | i 44 |
||||||||||
Total other comprehensive income (loss) |
i 251 |
( i 144 |
) | i 1,633 |
( i 727 |
) | ||||||||||
Comprehensive income |
$ | i 19,543 |
$ | i 20,710 |
$ | i 57,842 |
$ | i 60,305 |
||||||||
Earnings per share: |
||||||||||||||||
Basic |
$ | i 0.49 |
$ | i 0.53 |
$ | i 1.43 |
$ | i 1.56 |
||||||||
Diluted |
$ | i 0.49 |
$ | i 0.53 |
$ | i 1.42 |
$ | i 1.55 |
||||||||
Weighted average common shares outstanding: |
||||||||||||||||
Basic |
i 39,441 |
i 39,191 |
i 39,383 |
i 39,147 |
||||||||||||
Diluted |
i 39,550 |
i 39,484 |
i 39,527 |
i 39,359 |
Three Months Ended September 30, 2019 |
||||||||||||||||||||||||||||||||||||
|
|
Additional Paid-In |
Stock Notes Receivable From |
Retained |
Accumulated Other Comprehensive |
|
||||||||||||||||||||||||||||||
Preferred Stock |
Common Stock |
|||||||||||||||||||||||||||||||||||
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Employees |
|
|
Earnings |
|
|
Income |
|
|
Total |
| ||||||||||
Balance at June 30, 2019 |
i — |
$ |
i — |
i 39,090,861 |
$ |
i 4 |
$ |
i 100,098 |
$ |
( i 4 |
) |
$ |
|
$ |
i 2,157 |
$ |
|
|||||||||||||||||||
Net and comprehensive income |
— |
i — |
— |
i — |
i — |
i — |
i 19,292 |
i 251 |
i 19,543 |
|||||||||||||||||||||||||||
Stock-based award activity |
||||||||||||||||||||||||||||||||||||
Stock-based compensation |
i — |
i — |
i — |
i — |
i 2,114 |
i — |
i — |
i — |
i 2,114 |
|||||||||||||||||||||||||||
Shares issued pursuant to employee stock purchase plan |
i — |
i — |
i — |
i — |
i — |
i — |
i — |
i — |
i — |
|||||||||||||||||||||||||||
Issuance of common stock for vesting of restricted stock units |
i — |
i — |
i 41,257 |
i — |
i — |
i — |
i — |
i — |
i — |
|||||||||||||||||||||||||||
Issuance of common stock for unvested restricted stock awards |
i — |
i — |
i 2,264 |
i — |
i — |
i — |
i — |
i — |
i — |
|||||||||||||||||||||||||||
Shares withheld related to net share settlement of stock-based awards |
i — |
i — |
( i 2,146 |
) |
i — |
( i 70 |
) |
i — |
i — |
i — |
( i 70 |
) | ||||||||||||||||||||||||
Balance as of September 30, 2019 |
i — |
$ |
i — |
i 39,132,236 |
$ |
i 4 |
$ |
i 102,142 |
$ |
( i 4 |
) |
$ |
i 367,550 |
$ |
i 2,408 |
$ |
i 472,100 |
Three Months Ended September 30, 2018 |
||||||||||||||||||||||||||||||||||||
Preferred Stock |
Common Stock |
Additional Paid-In |
Stock Notes Receivable From |
Retain ed |
Accumulated Other Comprehensive |
|
||||||||||||||||||||||||||||||
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Employees |
|
|
Earnings |
|
|
Income (Loss) |
|
|
Total |
| ||||||||||
Balance at June 30, 2018 |
i — |
$ |
i — |
i 38,621,712 |
$ |
i 4 |
$ |
|
$ |
( i 4 |
) |
$ |
|
$ |
i 344 |
$ |
|
|||||||||||||||||||
Net and comprehensive income |
— |
i — |
— |
i — |
i — |
i — |
i 20,854 |
( i 144 |
) |
i 20,710 |
||||||||||||||||||||||||||
Stock-based award activity |
||||||||||||||||||||||||||||||||||||
Stock-based compensation |
i — |
i — |
i — |
i — |
i 3,147 |
i — |
i — |
i — |
i 3,147 |
|||||||||||||||||||||||||||
Issuance of common stock for vesting of restricted stock units |
i — |
i — |
i 31,235 |
i — |
i — |
i — |
i — |
i — |
i — |
|||||||||||||||||||||||||||
Shares withheld related to net share settlement of stock-based awards |
i — |
i — |
( i 1,587 |
) |
i — |
( i 63 |
) |
i — |
i — |
i — |
( i 63 |
) | ||||||||||||||||||||||||
Balance as of September 30, 2018 |
i — |
$ |
i — |
i 38,651,360 |
$ |
i 4 |
$ |
i 97,375 |
$ |
( i 4 |
) |
$ |
i 285,116 |
$ |
i 200 |
$ |
i 382,691 |
|||||||||||||||||||
Nine Months Ended September 30, 2019 |
||||||||||||||||||||||||||||||||||||
|
|
|
Stock Notes |
|
Accumulated |
|||||||||||||||||||||||||||||||
Preferred Stock |
Common Stock |
Additional Paid-I n |
Receivable From |
Retained |
Other Comprehensive |
|
||||||||||||||||||||||||||||||
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Employees |
|
|
Earnings |
|
|
Income |
|
|
Total |
| ||||||||||
Balance at December 31, 2018 |
i — |
$ |
i — |
i 38,814,464 |
$ |
i 4 |
$ |
i 97,458 |
$ |
( i 4 |
) |
$ |
|
$ |
i 775 |
$ |
|
|||||||||||||||||||
Net and comprehensive income |
— |
i — |
— |
i — |
i — |
i — |
i 56,209 |
i 1,633 |
i 57,842 |
|||||||||||||||||||||||||||
Stock-based award activity |
||||||||||||||||||||||||||||||||||||
Stock-based compensation |
i — |
i — |
i — |
i — |
i 7,040 |
i — |
i — |
i — |
i 7,040 |
|||||||||||||||||||||||||||
Shares issued pursuant to employee stock purchase plan |
i — |
i — |
i 11,022 |
i — |
i 338 |
i — |
i — |
i — |
i 338 |
|||||||||||||||||||||||||||
Issuance of common stock for vesting of restricted stock units |
i — |
i — |
i 366,476 |
i — |
i — |
i — |
i — |
i — |
i — |
|||||||||||||||||||||||||||
Issuance of common stock for unvested restricted stock awards |
i — |
i — |
i 12,806 |
i — |
i — |
i — |
i — |
i — |
i — |
|||||||||||||||||||||||||||
Shares withheld related to net share settlement of stock-based awards |
i — |
i — |
( i 72,532 |
) |
i — |
( i 2,694 |
) |
i — |
i — |
i — |
( i 2,694 |
) | ||||||||||||||||||||||||
Balance as of September 30, 2019 |
i — |
$ |
i — |
i 39,132,236 |
$ |
i 4 |
$ |
i 102,142 |
$ |
( i 4 |
) |
$ |
i 367,550 |
$ |
i 2,408 |
$ |
i 472,100 |
|||||||||||||||||||
Nine Months Ended September 30, 2018 |
||||||||||||||||||||||||||||||||||||
|
|
Additional Paid-In |
Stock Notes Receivable |
|
Accumulated Other |
|||||||||||||||||||||||||||||||
Preferred Stock |
Common Stock |
From |
Retained |
Comprehensive |
|
|||||||||||||||||||||||||||||||
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Employees |
|
|
Earnings |
|
|
Income (Loss) |
|
|
Total |
| ||||||||||
Balance at December 31, 2017 |
i — |
$ |
i — |
i 38,374,011 |
$ |
i 4 |
$ |
i 89,877 |
$ |
( i 4 |
) |
$ |
i 224,071 |
$ |
i 940 |
$ |
i 314,888 |
|||||||||||||||||||
Cumulative effect of a change in accounting principle |
— |
i — |
— |
i — |
i — |
i — |
i 13 |
( i 13 |
) |
i — |
||||||||||||||||||||||||||
Balance at January 1, 2018, as adjusted |
i — |
i — |
i 38,374,011 |
i 4 |
i 89,877 |
( i 4 |
) |
i 224,084 |
i 927 |
i 314,888 |
||||||||||||||||||||||||||
Net and comprehensive income |
— |
i — |
— |
i — |
i — |
i — |
i 61,032 |
( i 727 |
) |
i 60,305 |
||||||||||||||||||||||||||
Stock-based award activity |
||||||||||||||||||||||||||||||||||||
Stock-based compensation |
i — |
i — |
i — |
i — |
i 8,919 |
i — |
i — |
i — |
i 8,919 |
|||||||||||||||||||||||||||
Shares issued pursuant to employee stock purchase plan |
i — |
i — |
i 13,028 |
i — |
i 356 |
i — |
i — |
i — |
i 356 |
|||||||||||||||||||||||||||
Issuance of common stock for vesting of restricted stock units |
i — |
i — |
i 305,975 |
i — |
i — |
i — |
i — |
i — |
i — |
|||||||||||||||||||||||||||
Issuance of common stock for unvested restricted stock awards |
i — |
i — |
i 12,852 |
i — |
i — |
i — |
i — |
i — |
i — |
|||||||||||||||||||||||||||
Shares withheld related to net share settlement of stock-based awards |
i — |
i — |
( i 54,506 |
) |
i — |
( i 1,777 |
) |
i — |
i — |
i — |
( i 1,777 |
) | ||||||||||||||||||||||||
Balance as of September 30, 2018 |
i — |
$ |
i — |
i 38,651,360 |
$ |
i 4 |
$ |
i 97,375 |
$ |
( i 4 |
) |
$ |
i 285,116 |
$ |
i 200 |
$ |
i 382,691 |
|||||||||||||||||||
Nine Months Ended |
||||||||
2018 |
||||||||
Cash flows from operating activities |
||||||||
Net income |
$ | i 56,209 |
$ | i 61,032 |
||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: |
||||||||
Depreciation and amortization expense |
i 5,674 |
i 4,529 |
||||||
Amortization of right-of-use assets |
i 15,433 |
i — |
||||||
Provision of bad debt expense |
i 75 |
i 52 |
||||||
Stock-based compensation |
i 7,040 |
i 8,919 |
||||||
Deferred taxes, net |
i 3,829 |
( i 735 |
) | |||||
Net realized gains on marketable securities, available-for-sale |
( i 70 |
) | ( i 12 |
) | ||||
Other non-cash items |
i 489 |
( i 148 |
) | |||||
Changes in operating assets and liabilities: |
||||||||
Commissions receivable |
( i 1,368 |
) | i 4,183 |
|||||
Prepaid expenses |
( i 1,426 |
) | i 3,145 |
|||||
Prepaid rent |
i — |
i 875 |
||||||
Other assets, net |
( i 31,302 |
) | ( i 9,066 |
) | ||||
Accounts payable and other liabilities |
i 103 |
( i 1,552 |
) | |||||
Income tax receivable/payable |
( i 12,272 |
) | i 7,271 |
|||||
Accrued bonuses and other employee related expenses |
( i 11,314 |
) | ( i 558 |
) | ||||
Deferred compensation and commissions |
( i 24,409 |
) | ( i 23,739 |
) | ||||
Operating lease liabilities |
( i 12,725 |
) | i — |
|||||
Deferred rent and other liabilities |
( i 19 |
) | i 817 |
|||||
Net cash (used in) provided by operating activities |
( i 6,053 |
) | i 55,013 |
|||||
Cash flows from investing activities |
||||||||
Acquisition, net of cash received |
i — |
( i 6,990 |
) | |||||
Purchases of marketable securities, available-for-sale |
( i 115,744 |
) | ( i 168,672 |
) | ||||
Proceeds from sales and maturities of marketable securities, available-for-sale |
i 143,638 |
i 88,027 |
||||||
Issuances of employee notes receivable |
( i 200 |
) | ( i 126 |
) | ||||
Payments received on employee notes receivable |
i 28 |
i 12 |
||||||
Purchase of property and equipment |
( i 6,643 |
) | ( i 4,574 |
) | ||||
Net cash provided by (used in) investing activities |
i 21,079 |
( i 92,323 |
) | |||||
Cash flows from financing activities |
||||||||
Taxes paid related to net share settlement of stock-based awards |
( i 2,694 |
) | ( i 1,777 |
) | ||||
Proceeds from issuance of shares pursuant to employee stock purchase plan |
i 338 |
i 356 |
||||||
Principal payments on notes payable to former stockholders |
( i 1,087 |
) | ( i 1,035 |
) | ||||
Principal payments on stock appreciation rights liability |
( i 185 |
) | i — |
|||||
Net cash used in financing activities |
( i 3,628 |
) | ( i 2,456 |
) | ||||
Net increase (decrease) in cash and cash equivalents |
i 11,398 |
( i 39,766 |
) | |||||
Cash and cash equivalents at beginning of period |
i 214,683 |
i 220,786 |
||||||
Cash and cash equivalents at end of period |
$ | i 226,081 |
$ | i 181,020 |
||||
Supplemental disclosures of cash flow information |
||||||||
Interest paid during the period |
$ | i 2,092 |
$ | i 2,180 |
||||
Income taxes paid, net |
$ | i 29,602 |
$ | i 16,237 |
||||
1. |
Description of Business and Basis of Presentation |
2. |
Accounting Policies and Recent Accounting Pronouncements |
3. |
Property and Equipment, Net |
Computer software and hardware equipment |
$ | i 24,489 |
$ | i 20,427 |
||||
Furniture, fixtures, and equipment |
i 23,410 |
i 24,227 |
||||||
Less: accumulated depreciation and amortization |
( i 26,290 |
) | ( i 25,104 |
) | ||||
$ | i 21,609 |
$ | i 19,550 |
|||||
4. |
Operating Leases |
Three Months Ended |
Nine Months Ended |
|||||||
Operating lease cost: |
||||||||
Lease cost (1) |
$ | i 6,148 |
$ | i 18,163 |
||||
Variable lease cost (2) |
i 1,423 |
i 3,913 |
||||||
Sublease income |
( i 68 |
) | ( i 199 |
) | ||||
$ | i 7,503 |
$ | i 21,877 |
|||||
(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 2019 |
$ | i 5,187 |
||
2020 |
i 20,724 |
|||
2021 |
i 18,233 |
|||
2022 |
i 14,158 |
|||
2023 |
i 10,959 |
|||
Thereafter |
i 21,345 |
|||
Total future minimum lease payments |
i 90,606 |
|||
Less imputed interest |
( i 8,790 |
) | ||
Present value of operating lease liabilities |
$ | i 81,816 |
||
Nine Months Ended |
||||
Operating cash flow information: |
||||
Cash paid for amounts included in the measurement of operating lease liabilities |
$ |
i 15,064 |
||
Noncash activity: |
||||
ROU assets obtained in exchange for operating lease liabilities |
$ |
i 17,806 |
||
Tenant improvements owned by lessor related to ROU assets (1) |
$ |
i 3,642 |
(1) |
Reclassification from other assets current. |
Weighted average remaining operating lease term |
i 5.18 years |
|||
Weighted average discount rate |
i 3.9 |
% |
2019 |
$ | i 19,649 |
||
2020 |
i 19,287 |
|||
2021 |
i 16,833 |
|||
2022 |
i 12,368 |
|||
2023 |
i 8,805 |
|||
Thereafter |
i 10,452 |
|||
$ | i 87,394 |
|||
5. |
Investments in Marketable Securities |
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
|||||||||||||||||||||||||
Short-term investments: |
||||||||||||||||||||||||||||||||
U.S. treasuries |
$ |
i 109,208 |
$ |
i 192 |
$ |
( i 1 |
) |
$ |
i 109,399 |
$ |
i 121,252 |
$ |
i 7 |
$ |
( i 79 |
) |
$ |
i 121,180 |
||||||||||||||
U.S. government sponsored entities |
i — |
i — |
i — |
i — |
i 3,512 |
i — |
( i 7 |
) |
i 3,505 |
|||||||||||||||||||||||
Corporate debt securities |
i 15,019 |
i 57 |
i — |
i 15,076 |
i 11,962 |
i — |
( i 11 |
) |
i 11,951 |
|||||||||||||||||||||||
Asset-backed securities and other |
i — |
i — |
i — |
i — |
i 806 |
i — |
( i 6 |
) |
i 800 |
|||||||||||||||||||||||
$ |
i 124,227 |
$ |
i 249 |
$ |
( i 1 |
) |
$ |
i 124,475 |
$ |
i 137,532 |
$ |
i 7 |
$ |
( i 103 |
) |
$ |
i 137,436 |
|||||||||||||||
Long-term investments: |
||||||||||||||||||||||||||||||||
U.S. treasuries |
$ |
i 30,146 |
$ |
i 325 |
$ |
( i 15 |
) |
$ |
i 30,456 |
$ |
i 44,997 |
$ |
i 128 |
$ |
( i 115 |
) |
$ |
i 45,010 |
||||||||||||||
U.S. government sponsored entities |
i 1,415 |
i 2 |
( i 4 |
) |
i 1,413 |
i 1,569 |
i — |
( i 62 |
) |
i 1,507 |
||||||||||||||||||||||
Corporate debt securities |
i 29,870 |
i 980 |
( i 8 |
) |
i 30,842 |
i 32,467 |
i 3 |
( i 633 |
) |
i 31,837 |
||||||||||||||||||||||
Asset-backed securities and other |
i 7,965 |
i 113 |
( i 4 |
) |
i 8,074 |
i 4,889 |
i 12 |
( i 46 |
) |
i 4,855 |
||||||||||||||||||||||
$ |
i 69,396 |
$ |
i 1,420 |
$ |
( i 31 |
) |
$ |
i 70,785 |
$ |
i 83,922 |
$ |
i 143 |
$ |
( i 856 |
) |
$ |
i 83,209 |
|||||||||||||||
Unrealized Loss |
Fair Value |
Unrealized Loss |
Fair Value |
|||||||||||||
Less than 12 months |
$ |
( i 28 |
) | $ | i 11,931 |
$ | ( i 576 |
) | $ | i 127,326 |
||||||
12 months or longer |
$ | ( i 4 |
) | $ | i 1,071 |
$ | ( i 383 |
) | $ | i 30,609 |
||||||
Three Months Ended September 30, |
Nine Months Ended |
|||||||||||||||
2018 |
2019 |
2018 |
||||||||||||||
Gross realized gains (1) |
$ | i 58 |
$ | i — |
$ | i 117 |
$ | i 12 |
||||||||
Gross realized losses (1) |
$ | i — |
$ | i — |
$ | ( i 47 |
) | $ | i — |
|||||||
(1) |
Recorded in other income (expense), 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 |
Fair Value |
Amortized |
Fair Value |
|||||||||||||
Due in one year or less |
$ | i 124,227 |
$ | i 124,475 |
$ | i 137,532 |
$ | i 137,436 |
||||||||
Due after one year through five years |
i 49,754 |
i 50,435 |
i 61,875 |
i 61,846 |
||||||||||||
Due after five years through ten years |
i 14,923 |
i 15,601 |
i 17,310 |
i 16,747 |
||||||||||||
Due after ten years |
i 4,719 |
i 4,749 |
i 4,737 |
i 4,616 |
||||||||||||
$ | i 193,623 |
$ | i 195,260 |
$ | i 221,454 |
$ | i 220,645 |
|||||||||
Weighted average contractual maturity |
i 1.9 years |
i 1.8 years |
6. |
Goodwill and Other Intangible Assets |
Gross Amount |
Accumulated Amortization |
Net Book Value |
Gross Amount |
Accumulated Amortization |
Net Book Value |
|||||||||||||||||||
Goodwill and intangible assets: |
||||||||||||||||||||||||
Goodwill (1) |
$ | i 11,459 |
$ | i — |
$ | i 11,459 |
$ | i 11,459 |
$ | i — |
$ | i 11,459 |
||||||||||||
Intangible assets (1) |
i 4,240 |
( i 1,052 |
) | i 3,188 |
i 4,240 |
( i 314 |
) | i 3,926 |
||||||||||||||||
$ | i 15,699 |
$ | ( i 1,052 |
) | $ | i 14,647 |
$ | i 15,699 |
$ | ( i 314 |
) | $ | i 15,385 |
|||||||||||
(1) |
Represents additions from acquisitions. |
Nine Months Ended |
||||||||
2018 |
||||||||
Beginning balance |
$ | i 11,459 |
$ | i — |
||||
Additions from acquisitions |
i — |
i 4,186 |
||||||
Impairment losses |
i — |
i — |
||||||
Ending balance |
$ | i 11,459 |
$ | i 4,186 |
||||
2019 |
||||
Remainder of 2019 |
$ | i 205 |
||
2020 |
i 817 |
|||
2021 |
i 743 |
|||
2022 |
i 621 |
|||
2023 |
i 493 |
|||
Thereafter |
i 309 |
|||
$ | i 3,188 |
|||
7. |
Selected Balance Sheet Data |
Current |
Non-Current |
|||||||||||||||
2019 |
2019 |
|||||||||||||||
MSRs, net of amortization |
$ | i — |
$ | i — |
$ | i 2,039 |
$ | i 2,209 |
||||||||
Due from independent contractors, net (1) (2) |
i 2,381 |
i 3,831 |
i 48,911 |
i 27,157 |
||||||||||||
Security deposits |
i — |
i — |
i 1,313 |
i 1,196 |
||||||||||||
Employee notes receivable (3) |
i 150 |
i 156 |
i 373 |
i 370 |
||||||||||||
Customer trust accounts and other |
i 9,821 |
i 2,381 |
i 796 |
i 846 |
||||||||||||
$ | i 12,352 |
$ | i 6,368 |
$ | i 53,432 |
$ | i 31,778 |
|||||||||
(1) |
Represents amounts advanced, notes receivable and other receivables due from the Company’s investment sales and financing professionals. The notes receivable along with interest are typically collected from future commissions and are generally due in one to i five years. |
(2) |
Includes allowance for doubtful accounts related to current receivables of $ i 404 and $ i 514 as of September 30,
2019 and December 31, 2018, respectively. The Company recorded a provision for bad debt expense of $ i 88 and $ i 81
and wrote-off $ i 82 and $ i 17 of these receivables
for the three months ended September 30, 2019 and 2018, respectively. The Company recorded a provision for bad debt expense of $ i 75 and $ i 52
and wrote-off $ i 185 and $ i 72 of these receivables
for the nine months ended September 30, 2019 and 2018, respectively. Any cash receipts on notes are applied first to unpaid principal balance prior to any income being recognized. |
(3) |
Reduction of accrued bonuses and other employee related expenses in settlement of employee notes receivable were $ i 60 and $ i 192 for the nine months ended September 30, 2019 and 2018, respectively. See Note 9 – “Related-Party Transactions” for additional information. |
2019 |
||||||||
Beginning balance |
$ | i 2,209 |
$ | i — |
||||
Additions from acquisition |
i — |
i 2,121 |
||||||
Additions |
i 243 |
i 391 |
||||||
Amortization |
( i 413 |
) | ( i 303 |
) | ||||
Ending balance |
$ | i 2,039 |
$ | i 2,209 |
||||
Current |
Non-Current |
|||||||||||||||
2019 |
2019 |
|||||||||||||||
Stock appreciation rights (“SARs”) liability (1) |
$ | i 1,895 |
$ | i 1,810 |
$ | i 18,082 |
$ | i 19,299 |
||||||||
Commissions payable to investment sales and financing professionals |
i 29,118 |
i 44,812 |
i 16,858 |
i 23,983 |
||||||||||||
Deferred compensation liability (1) |
i 1,437 |
i 1,288 |
i 6,755 |
i 6,605 |
||||||||||||
$ | i 32,450 |
$ | i 47,910 |
$ | i 41,695 |
$ | i 49,887 |
|||||||||
(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 September 30, |
Nine Months Ended |
|||||||||||||||
2018 |
2019 |
2018 |
||||||||||||||
Increase in the carrying value of the assets held in the rabbi trust (1) |
$ | i 31 |
$ | i 266 |
$ | i 959 |
$ | i 456 |
||||||||
Increase in the net carrying value of the deferred compensation obligation (2) |
$ | i 31 |
$ | i 267 |
$ | i 943 |
$ | i 455 |
||||||||
(1) |
Recorded in other income (expense), 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 |
||||||||
2019 |
||||||||
Deferred rent (1) |
$ | i — |
$ | i 5,445 |
||||
Contingent consideration and other (2) |
i 2,001 |
i 2,054 |
||||||
$ | i 2,001 |
$ | i 7,499 |
|||||
(1) |
The Company does not have deferred rent in 2019 due to adoption of the new lease standard on January 1, 2019. |
(2) |
The current portions of contingent consideration in the amounts of $ i 853 and $ i 821 as of September 30, 2019 and December 31, 2018, respectively, are included in accounts payable and other liabilities in the condensed consolidated balance sheets. |
8. |
Notes Payable to Former Stockholders |
9. |
Related-Party Transactions |
10. |
Fair Value Measurements |
Fair Value |
Level 1 |
Level 2 |
Level 3 |
Fair Value |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||||||||||||||
Assets: |
||||||||||||||||||||||||||||||||
Assets held in rabbi trust |
$ | i 9,102 |
$ | i — |
$ | i 9,102 |
$ |
i — |
$ | i 8,268 |
$ | i — |
$ | i 8,268 |
$ | i — |
||||||||||||||||
Cash equivalents (1) : |
||||||||||||||||||||||||||||||||
Commercial paper and other |
$ | i 12,480 |
$ | i — |
$ | i 12,480 |
$ | i — |
$ | i 1,599 |
$ | i 1,599 |
$ | i — |
$ | i — |
||||||||||||||||
Money market funds |
i 167,321 |
i 167,321 |
i — |
i — |
i 163,126 |
i 163,126 |
i — |
i — |
||||||||||||||||||||||||
$ | i 179,801 |
$ | i 167,321 |
$ | |
$ | i — |
$ | i 164,725 |
$ | i 164,725 |
$ | i — |
$ | i — |
|||||||||||||||||
Marketable securities, available-for-sale: |
||||||||||||||||||||||||||||||||
Short-term investments: |
||||||||||||||||||||||||||||||||
U.S. treasuries |
$ | i 109,399 |
$ | i 109,399 |
$ | i — |
$ | i — |
$ | i 121,180 |
$ | i 121,180 |
$ | i — |
$ | i — |
||||||||||||||||
U.S. government sponsored entities |
i — |
i — |
i — |
i — |
i 3,505 |
i — |
i 3,505 |
i — |
||||||||||||||||||||||||
Corporate debt securities |
i 15,076 |
i — |
i 15,076 |
i — |
i 11,951 |
i — |
i 11,951 |
i — |
||||||||||||||||||||||||
Asset-backed securities and other |
i — |
i — |
i — |
i — |
i 800 |
i — |
i 800 |
i — |
||||||||||||||||||||||||
$ | i 124,475 |
$ | i 109,399 |
$ | i 15,076 |
$ | i — |
$ | i 137,436 |
$ | i 121,180 |
$ | i 16,256 |
$ | i — |
|||||||||||||||||
Long-term investments: |
||||||||||||||||||||||||||||||||
U.S. treasuries |
$ | i 30,456 |
$ | i 30,456 |
$ | i — |
$ | i — |
$ | i 45,010 |
$ | i 45,010 |
$ | i — |
$ | i — |
||||||||||||||||
U.S. government sponsored entities |
i 1,413 |
i — |
i 1,413 |
i — |
i 1,507 |
i — |
i 1,507 |
i — |
||||||||||||||||||||||||
Corporate debt securities |
i 30,842 |
i — |
i 30,842 |
i — |
i 31,837 |
i — |
i 31,837 |
i — |
||||||||||||||||||||||||
Asset-backed securities and other |
i 8,074 |
i — |
i 8,074 |
i — |
i 4,855 |
i — |
i 4,855 |
i — |
||||||||||||||||||||||||
$ | i 70,785 |
$ | i 30,456 |
$ | i 40,329 |
$ | i — |
$ | i 83,209 |
$ | i 45,010 |
$ | i 38,199 |
$ | i — |
|||||||||||||||||
Liabilities: |
||||||||||||||||||||||||||||||||
Contingent consideration (2) |
$ | i 2,864 |
$ | i — |
$ | i — |
$ | i 2,864 |
$ | i 2,875 |
$ | i — |
$ | i — |
$ | i 2,875 |
||||||||||||||||
Deferred compensation liability |
$ | i 8,192 |
$ | i 8,192 |
$ | i — |
$ | i — |
$ | i 7,893 |
$ | i 7,893 |
$ | i — |
$ | i — |
||||||||||||||||
(1) |
Included in cash and cash equivalents on the accompanying condensed consolidated balance sheets. |
(2) |
As of September 30, 2019, contingent consideration has a maximum undiscounted payment of $ i 4.2 million. Assuming
the achievement of the applicable performance criteria, the Company anticipates these earn-out payments will be made over the next three to seven-year period. A reconciliation of contingent consideration measured at fair value on a recurring basis consisted of the following (in thousands): |
2019 |
||||||||
Beginning balance |
$ | i 2,875 |
$ | i — |
||||
Contingent consideration in connection with acquisitions |
i — |
i 2,674 |
||||||
Change in fair value of contingent consideration |
( i 11 |
) | i 201 |
|||||
Payments of contingent consideration |
i — |
i — |
||||||
Ending balance |
$ | i 2,864 |
$ | i 2,875 |
||||
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, 2018 |
i 27,096 |
i 471,782 |
i 392,697 |
i 891,575 |
$ | |||||||||||||||
Granted |
i 12,806 |
i 241,932 |
i 76,642 |
i 331,380 |
i 38.62 |
|||||||||||||||
Vested |
( i 22,422 |
) | ( i 182,714 |
) | ( i 183,762 |
) | ( i 388,898 |
) | i 24.11 |
|||||||||||
Transferred |
i — |
( i 8,136 |
) | i 8,136 |
i — |
i 29.68 |
||||||||||||||
Forfeited/canceled |
i — |
( i 8,119 |
) | ( i 32,354 |
) | ( i 40,473 |
) | i 30.99 |
||||||||||||
Nonvested shares at September 30, 2019 (1) |
i 17,480 |
i 514,745 |
i 261,359 |
i 793,584 |
$ | i 33.73 |
||||||||||||||
$ | i 397 |
$ | i 14,629 |
$ | i 8,473 |
$ | i 23,499 |
|||||||||||||
Weighted average remaining vesting period (years) as of September 30, 2019 |
i 0.63 |
i 3.70 |
i 3.45 |
i 3.56 |
||||||||||||||||
(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 3.56 years. |
2021 |
i 60,373 |
|||
2022 |
i 281,193 |
|||
i 341,566 |
||||
Three Months Ended September 30, |
Nine Months Ended |
|||||||||||||||
2018 |
2019 |
2018 |
||||||||||||||
ESPP |
$ | i 40 |
$ | i 37 |
$ | i 108 |
$ | i 100 |
||||||||
RSAs – non-employee directors |
i 157 |
i 182 |
i 481 |
i 458 |
||||||||||||
RSUs – employees (1) |
i 1,230 |
i 1,112 |
i 4,197 |
i 3,161 |
||||||||||||
RSUs – independent contractors (2) |
i 687 |
i 1,816 |
i 2,254 |
i 5,200 |
||||||||||||
$ | $ | $ | $ | |||||||||||||
(1) |
2019 includes expense related to the acceleration of vesting of certain RSUs. |
(2) |
The Company grants RSUs to independent contractors (i.e. investment sales and financing professionals), who are considered non-employees. Prior to the adoption of ASU No. 2018-07 on July 1, 2018, such awards were required to be measured at fair value at the end of each reporting period until settlement. Stock-based compensation expense was therefore impacted by the changes in the Company’s common stock price during each reporting period prior to the date of adoption. New awards after the date of adoption are measured based on the grant date closing price of the
Company’s common stock consistent with awards made to the Company’s employees and non-employee directors. |
13. |
Income Taxes |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||||
2018 |
2019 |
2018 |
||||||||||||||||||||||||||||||
Amount |
Rate |
Amount |
Rate |
Amount |
Rate |
Amount |
Rate |
|||||||||||||||||||||||||
Income tax expense at the federal statutory rate |
$ | i 21.0 |
% | $ | i 21.0 |
% | $ | i 21.0 |
% | $ | i 21.0 |
% | ||||||||||||||||||||
State income tax expense, net of federal benefit |
i 1,118 |
i 4.2 |
% | i 1,462 |
i 5.0 |
% | i 3,359 |
i 4.3 |
% | i 3,974 |
i 4.7 |
% | ||||||||||||||||||||
Windfall (shortfall) tax benefits, net related to stock-based compensation |
i 53 |
i 0.2 |
% | ( i 17 |
) | ( i 0.1 |
)% | ( i 201 |
) | ( i 0.2 |
)% | ( i 261 |
) | ( i 0.3 |
)% | |||||||||||||||||
Change in valuation allowance |
i 408 |
i 1.6 |
% | i 162 |
i 0.6 |
% | i 874 |
i 1.1 |
% | i 284 |
i 0.3 |
% | ||||||||||||||||||||
Permanent and other items (1) |
( i 81 |
) | ( i 0.3 |
)% | i 583 |
i 2.0 |
% | i 880 |
i 1.1 |
% | i 1,176 |
i 1.5 |
% | |||||||||||||||||||
$ | i 7,024 |
i 26.7 |
% | $ | i 8,315 |
i 28.5 |
% | $ | i 21,159 |
i 27.3 |
% | $ | i 22,772 |
i 27.2 |
% | |||||||||||||||||
(1) |
Permanent items relate principally to compensation charges, qualified transportation fringe benefits, reversal of uncertain tax positions and meals and entertainment. |
14. |
Earnings per Share |
Three Months Ended September 30, |
Nine Months Ended |
|||||||||||||||
2018 |
2019 |
2018 |
||||||||||||||
Numerator (Basic and Diluted): |
||||||||||||||||
Net income |
$ | $ | $ | $ | ||||||||||||
Denominator: |
||||||||||||||||
Basic |
||||||||||||||||
Weighted average common shares issued and outstanding |
i 39,116 |
i 38,641 |
i 39,062 |
i 38,598 |
||||||||||||
Deduct: Unvested RSAs (1) |
( i 17 |
) | ( i 29 |
) | ( i 21 |
) | ( i 30 |
) | ||||||||
Add: Fully vested DSUs (2) |
i 342 |
i 579 |
i 342 |
i 579 |
||||||||||||
Weighted Average Common Shares Outstanding |
i 39,441 |
i 39,191 |
i 39,383 |
i 39,147 |
||||||||||||
Basic earnings per common share |
$ | i 0.49 |
$ | i 0.53 |
$ | i 1.43 |
$ | i 1.56 |
||||||||
Diluted |
||||||||||||||||
Weighted Average Common Shares Outstanding from above |
i 39,441 |
i 39,191 |
i 39,383 |
i 39,147 |
||||||||||||
Add: Dilutive effect of RSUs, RSAs & ESPP |
i 109 |
i 293 |
i 144 |
i 212 |
||||||||||||
Weighted Average Common Shares Outstanding |
i 39,550 |
i 39,484 |
i 39,527 |
i 39,359 |
||||||||||||
Diluted earnings per common share |
$ | i 0.49 |
$ | i 0.53 |
$ | i 1.42 |
$ | i 1.55 |
||||||||
Antidilutive shares excluded from diluted earnings per common share (3) |
i 425 |
i 76 |
i 325 |
i 250 |
||||||||||||
(1) |
RSAs were issued and outstanding to the non-employee directors and have a i one-year or i 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 September 30, |
||||||||||||||||||||||||||||||||||||
2018 |
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 |
274 |
$ | 173 |
$ | 7,182 |
268 |
$ | 166 |
$ | 7,224 |
6 |
$ | 7 |
$ | (42 |
) | ||||||||||||||||||||
Private client market ($1 - $10 million) |
1,301 |
4,257 |
121,228 |
1,352 |
4,382 |
125,898 |
(51 |
) | (125 |
) | (4,670 |
) | ||||||||||||||||||||||||
Middle market ( ≥ $10 - $20 million) |
109 |
1,466 |
25,997 |
119 |
1,581 |
31,158 |
(10 |
) | (115 |
) | (5,161 |
) | ||||||||||||||||||||||||
Larger transaction market ( ≥ $20 million) |
69 |
3,675 |
25,791 |
70 |
3,169 |
27,700 |
(1 |
) | 506 |
(1,909 |
) | |||||||||||||||||||||||||
1,753 |
$ | 9,571 |
$ | 180,198 |
1,809 |
$ | 9,298 |
$ | 191,980 |
(56 |
) | $ | 273 |
$ | (11,782 |
) | ||||||||||||||||||||
Nine Months Ended September 30, |
||||||||||||||||||||||||||||||||||||
2018 |
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 |
733 |
$ | 474 |
$ | 19,607 |
764 |
$ | 489 |
$ | 20,819 |
(31 |
) | $ | (15 |
) | $ | (1,212 |
) | ||||||||||||||||||
Private client market ($1 - $10 million) |
3,753 |
12,160 |
345,812 |
3,819 |
12,038 |
350,062 |
(66 |
) | 122 |
(4,250 |
) | |||||||||||||||||||||||||
Middle market ( ≥ $10 - $20 million) |
312 |
4,234 |
76,521 |
350 |
4,789 |
85,984 |
(38 |
) | (555 |
) | (9,463 |
) | ||||||||||||||||||||||||
Larger transaction market ( ≥ $20 million) |
194 |
9,040 |
71,875 |
213 |
8,846 |
79,280 |
(19 |
) | 194 |
(7,405 |
) | |||||||||||||||||||||||||
4,992 |
$ | 25,908 |
$ | 513,815 |
5,146 |
$ | 26,162 |
$ | 536,145 |
(154 |
) | $ | (254 |
) | $ | (22,330 |
) | |||||||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
Real Estate Brokerage |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Average Number of Investment Sales Professionals |
1,837 |
1,738 |
1,829 |
1,701 |
||||||||||||
Average Number of Transactions per Investment Sales Professional |
0.95 |
1.04 |
2.73 |
3.03 |
||||||||||||
Average Commission per Transaction |
$ | 102,794 |
$ | 106,125 |
$ | 102,928 |
$ | 104,187 |
||||||||
Average Commission Rate |
1.88 |
% | 2.06 |
% | 1.98 |
% | 2.05 |
% | ||||||||
Average Transaction Size (in thousands) |
$ | 5,460 |
$ | 5,140 |
$ | 5,190 |
$ | 5,084 |
||||||||
Total Number of Transactions |
1,753 |
1,809 |
4,992 |
5,146 |
||||||||||||
Total Sales Volume (in millions) |
$ | 9,571 |
$ | 9,298 |
$ | 25,908 |
$ | 26,162 |
||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
Financing (1) |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Average Number of Financing Professionals |
98 |
104 |
103 |
97 |
||||||||||||
Average Number of Transactions per Financing Professional |
5.01 |
4.17 |
13.23 |
12.28 |
||||||||||||
Average Fee per Transaction |
$ | 31,203 |
$ | 34,733 |
$ | 33,361 |
$ | 33,326 |
||||||||
Average Fee Rate |
0.90 |
% | 0.84 |
% | 0.91 |
% | 0.90 |
% | ||||||||
Average Transaction Size (in thousands) |
$ | 3,460 |
$ | 4,112 |
$ | 3,685 |
$ | 3,717 |
||||||||
Total Number of Transactions |
491 |
434 |
1,363 |
1,191 |
||||||||||||
Total Financing Volume (in millions) |
$ | 1,699 |
$ | 1,785 |
$ | 5,023 |
$ | 4,427 |
(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 |
$ | 180,198 |
90.9 |
% | $ | 191,980 |
91.2 |
% | $ | (11,782 |
) | (6.1 |
)% | |||||||||||
Financing fees |
16,013 |
8.1 |
15,947 |
7.6 |
66 |
0.4 |
% | |||||||||||||||||
Other revenues |
2,009 |
1.0 |
2,663 |
1.2 |
(654 |
) | (24.6 |
)% | ||||||||||||||||
Total revenues |
198,220 |
100.0 |
210,590 |
100.0 |
(12,370 |
) | (5.9 |
)% | ||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||
Cost of services |
124,147 |
62.6 |
132,896 |
63.1 |
(8,749 |
) | (6.6 |
)% | ||||||||||||||||
Selling, general and administrative expense |
48,091 |
24.3 |
48,659 |
23.1 |
(568 |
) | (1.2 |
)% | ||||||||||||||||
Depreciation and amortization expense |
1,910 |
1.0 |
1,651 |
0.8 |
259 |
15.7 |
% | |||||||||||||||||
Total operating expenses |
174,148 |
87.9 |
183,206 |
87.0 |
(9,058 |
) | (4.9 |
)% | ||||||||||||||||
Operating income |
24,072 |
12.1 |
27,384 |
13.0 |
(3,312 |
) | (12.1 |
)% | ||||||||||||||||
Other income (expense), net |
2,573 |
1.4 |
2,127 |
1.0 |
446 |
21.0 |
% | |||||||||||||||||
Interest expense |
(329 |
) | (0.2 |
) | (342 |
) | (0.2 |
) | 13 |
(3.8 |
)% | |||||||||||||
Income before provision for income taxes |
26,316 |
13.3 |
29,169 |
13.8 |
(2,853 |
) | (9.8 |
)% | ||||||||||||||||
Provision for income taxes |
7,024 |
3.6 |
8,315 |
3.9 |
(1,291 |
) | (15.5 |
)% | ||||||||||||||||
Net income |
$ | 19,292 |
9.7 |
% | $ | 20,854 |
9.9 |
% | $ | (1,562 |
) | (7.5 |
)% | |||||||||||
Adjusted EBITDA (1) |
$ | 27,865 |
14.1 |
% | $ | 32,155 |
15.3 |
% | $ | (4,290 |
) | (13.3 |
)% | |||||||||||
Earnings per share: |
||||||||||||||||||||||||
Basic |
$ | 0.49 |
$ | 0.53 |
||||||||||||||||||||
Diluted |
$ | 0.49 |
$ | 0.53 |
||||||||||||||||||||
Weighted average common shares outstanding: |
||||||||||||||||||||||||
Basic |
39,441 |
39,191 |
||||||||||||||||||||||
Diluted |
39,550 |
39,484 |
(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.” |
Nine Months Ended 2019 |
Percentage of Revenue |
Nine Months Ended 2018 |
Percentage of Revenue |
Change |
||||||||||||||||||||
Dollar |
Percentage |
|||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||
Real estate brokerage commissions |
$ | 513,815 |
90.4 |
% | $ | 536,145 |
91.7 |
% | $ | (22,330 |
) | (4.2 |
)% | |||||||||||
Financing fees |
47,487 |
8.4 |
41,234 |
7.1 |
6,253 |
15.2 |
% | |||||||||||||||||
Other revenues |
7,218 |
1.2 |
7,154 |
1.2 |
64 |
0.9 |
% | |||||||||||||||||
Total revenues |
568,520 |
100.0 |
584,533 |
100.0 |
(16,013 |
) | (2.7 |
)% | ||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||
Cost of services |
343,682 |
60.5 |
354,414 |
60.6 |
(10,732 |
) | (3.0 |
)% | ||||||||||||||||
Selling, general, and administrative expense |
149,845 |
26.3 |
145,792 |
24.9 |
4,053 |
2.8 |
% | |||||||||||||||||
Depreciation and amortization expense |
5,674 |
1.0 |
4,529 |
0.8 |
1,145 |
25.3 |
% | |||||||||||||||||
Total operating expenses |
499,201 |
87.8 |
504,735 |
86.3 |
(5,534 |
) | (1.1 |
)% | ||||||||||||||||
Operating income |
69,319 |
12.2 |
79,798 |
13.7 |
(10,479 |
) | (13.1 |
)% | ||||||||||||||||
Other income (expense), net |
9,067 |
1.6 |
5,060 |
0.8 |
4,007 |
79.2 |
% | |||||||||||||||||
Interest expense |
(1,018 |
) | (0.2 |
) | (1,054 |
) | (0.2 |
) | 36 |
(3.4 |
)% | |||||||||||||
Income before provision for income taxes |
77,368 |
13.6 |
83,804 |
14.3 |
(6,436 |
) | (7.7 |
)% | ||||||||||||||||
Provision for income taxes |
21,159 |
3.7 |
22,772 |
3.9 |
(1,613 |
) | (7.1 |
)% | ||||||||||||||||
Net income |
56,209 |
9.9 |
% | $ | 61,032 |
10.4 |
% | $ | (4,823 |
) | (7.9 |
)% | ||||||||||||
Adjusted EBITDA (1) |
$ | 83,040 |
14.6 |
% | $ | 93,309 |
16.0 |
% | $ | (10,269 |
) | (11.0 |
)% | |||||||||||
Earnings per share: |
||||||||||||||||||||||||
Basic |
$ | 1.43 |
$ | 1.56 |
||||||||||||||||||||
Diluted |
$ | 1.42 |
$ | 1.55 |
||||||||||||||||||||
Weighted average common shares outstanding: |
||||||||||||||||||||||||
Basic |
39,383 |
39,147 |
||||||||||||||||||||||
Diluted |
39,527 |
39,359 |
(1) |
Adjusted EBITDA is not a measurement of our financial performance under 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 September 30, |
Nine Months Ended |
|||||||||||||||
2018 |
2019 |
2018 |
||||||||||||||
Net income |
$ | 19,292 |
$ | 20,854 |
$ | 56,209 |
$ | 61,032 |
||||||||
Adjustments: |
||||||||||||||||
Interest income and other (1) |
(2,725 |
) | (1,824 |
) | (7,828 |
) | (4,626 |
) | ||||||||
Interest expense |
329 |
342 |
1,018 |
1,054 |
||||||||||||
Provision for income taxes |
7,024 |
8,315 |
21,159 |
22,772 |
||||||||||||
Depreciation and amortization |
1,910 |
1,651 |
5,674 |
4,529 |
||||||||||||
Stock-based compensation |
2,114 |
3,147 |
7,040 |
8,919 |
||||||||||||
Non-cash MSR activity (2) |
(79 |
) | (330 |
) | (232 |
) | (371 |
) | ||||||||
Adjusted EBITDA (3) |
$ | 27,865 |
$ | 32,155 |
$ | 83,040 |
$ | 93,309 |
||||||||
(1) |
Other for the three and nine months ended September 30, 2019 and 2018 includes net realized gains (losses) on marketable securities, available-for-sale. |
(2) |
Non-cash MSR activity relates to the assumption of servicing obligations. |
(3) |
The decrease in Adjusted EBITDA for the three and nine months ended September 30, 2019 compared to the same periods in 2018 is primarily due to lower total revenues and a higher proportion of operating expenses compared to total revenues. |
Nine Months Ended |
||||||||
2018 |
||||||||
Net cash (used in) provided by operating activities |
$ | (6,053) |
$ | 55,013 |
||||
Net cash provided by (used in) investing activities |
21,079 |
(92,323 |
) | |||||
Net cash used in financing activities |
(3,628 |
) | (2,456 |
) | ||||
Net increase (decrease) in cash and cash equivalents |
11,398 |
(39,766 |
) | |||||
Cash and cash equivalents at beginning of period |
214,683 |
220,786 |
||||||
Cash and cash equivalents at end of period |
$ | 226,081 |
$ | 181,020 |
||||
Change in Interest Rates |
Approximate Change in Fair Value of Investments Increase (Decrease) |
|||
2% Decrease |
$ | 4,587 |
||
1% Decrease |
$ | 2,404 |
||
1% Increase |
$ | (2,404) |
||
2% Increase |
$ | (4,807) |
Exhibit No. |
Description | |||
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 September 30, 2019, 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 | ||
---|---|---|---|---|
6/1/22 | ||||
5/31/22 | ||||
6/30/20 | 10-Q | |||
1/1/20 | ||||
12/31/19 | 10-K | |||
12/15/19 | ||||
Filed on: | 11/8/19 | 8-K | ||
For Period end: | 9/30/19 | |||
6/30/19 | 10-Q | |||
5/28/19 | 8-K | |||
3/1/19 | 10-K, 4 | |||
1/1/19 | ||||
12/31/18 | 10-K | |||
9/30/18 | 10-Q | |||
7/1/18 | ||||
6/30/18 | 10-Q | |||
1/1/18 | ||||
12/31/17 | 10-K | |||
6/18/14 | 8-K | |||
6/1/14 | ||||
1/1/14 | ||||
10/30/13 | 3, 4, EFFECT | |||
3/31/13 | ||||
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