Q1 2021 Moelis & Co Earnings Call
Yeah.
[music].
Good afternoon, and welcome to the Moelis and company first quarter of 2021 earnings Conference call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
After today's presentation there'll be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to withdraw your question. Please press Star then two.
Please note this event is being recorded.
I would now like to turn the conference over to Chet Mandel head of Investor Relations. Please go ahead.
Good afternoon, and thank you for joining us for Moelis and company's first quarter 2021 financial results conference call on the phone today are Ken Moelis, Chairman and CEO and Joe Simon Chief Financial Officer before we begin I'd like to note that the remarks made on this call may contain certain forward looking statements, which are subject to various risks and.
Ts, including those identified from time to time and the risk factors section of Moelis and company's filings with the SEC actual results could differ materially from those currently anticipated.
The firm undertakes no obligation to update any forward looking statements. Our comments today include references to certain adjusted financial measures. We believe these measures when presented together with comparable GAAP measures are useful to investors to compare our results across several periods and to better understand our operating results.
The reconciliation of these adjusted financial measures with the relevant GAAP financial information and other information required by Reg G is provided in the firm's earnings release, which can be found on our investor relations website at investors Moelis Dot com.
I will now turn the call over to Joe to discuss our results Joe.
Thanks, Jeff Good afternoon, everyone on today's call I'll go through our financial results and and Ken will comment further on the business.
And we achieved $264 million of revenues and the first quarter and increase of 72% over the prior year period. This represented our second largest quarter of revenue zebra.
The growth during the period was primarily attributable to increased levels of transaction completions are M&A activity remains robust as we are participating and assignments broadly across regions sectors and deal sizes and we also continued to see strong levels of restructuring and capital markets activity in fact, our private funds.
Advisory activity during the quarter was the highest it has ever been.
Moving to expenses, our compensation expenses accrued at 59, 3% consistent with our full year of 2020 ratio, our first quarter non comp expenses were $35 million.
The increment over the expected $30 million was primarily related to transaction related charges the <unk>.
Non comp ratio was a solid 13%, we expect our non compensation expenses to be close to $30 million for the second quarter before possible transaction related charges, we achieved the quarterly pre tax margin of 29% exceeding our 25% target.
Moving to taxes, our underlying corporate tax rate was 26% for the first quarter. The discrete tax benefits related to our equity award settlements contributed approximately 27 per share of EPS and resulted in an overall net tax benefit for the quarter.
Regarding capital allocation the board declared a regular quarterly dividend of <unk> 55 per share and a special dividend of $2 per share. The second special dividend that we've declared and the last five months. In addition, we repurchased approximately one 4 million shares during the first quarter, the dividends and the buybacks together approximate 250.
Yeah.
And capital return to shareholders, we remain committed to returning 100% of our excess cash and lastly, we continue to maintain a fortress balance sheet with substantial liquidity and no debt. We ended the quarter with $228 million of cash and liquid investments and I will now turn the call over to Ken.
Thanks, Joe and good afternoon, everyone. We continue to see strong momentum and our business the pace of our new client activity remains high as there was a real and necessary desire to transact driven in large part by the acceleration of long term strategic positioning caused by technological disruption and co.
The 19 as well as the ready access to capital.
Our M&A platform continues to be the biggest driver of activity and we're advising on a growing number of clients across both strategics and sponsors.
Our restructuring team remains and active and steady contributor even with the backdrop of the healthier global economy.
And finally, our capital markets franchise has quickly become a more meaningful part of our business with deep product experience across the capital structure on both the public and private side.
We have a well balanced and durable business I've never felt better about our go to market positioning with three powerful and highly collaborative engines to provide innovative solutions for our clients.
And with our ongoing expense discipline and focus on profit profitable organic growth.
Confident about our ability to deliver value for our shareholders and both the near and long term.
With that I'll now open it up for questions.
We will now begin our question and answer session to ask a question you May Press Star then one on your telephone keypad.
If you are using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.
Our first question comes from James <unk> with Goldman Sachs. Please go ahead.
Hey, Thanks, a lot for taking my questions. So I'd like to start with restructuring and forgive me I have a couple of questions. Here. So maybe you could talk about the cadence of the restructuring opportunity. This year and whether you think the the opportunity is the same size of different than perhaps last quarter's earnings.
And then any way to size what portion of the revenue. It was this quarter and then if there's any way to think about how and when it peaked last year.
Okay.
Well I don't believe its peak for us I don't know for the market.
We've always said or we.
We don't break it out.
But we've said restructuring is naturally 20 to 25 per cent of our revenues and it's actually in that range, probably at the high end of that range and the first quarter.
And that's on a good revenue, that's where the law.
Lot of M&A as well and I continue to believe we're looking for the near term forward. It feels like it's going to continue or at least our backlog seems like that's going to continue.
Again.
So I don't know when it peaked because I'm not sure it peaked.
And.
And I think.
And Theres this feeling that there's a very good economy out there and maybe that will change restructuring.
There are two things and I'm optimistic about first of all for restructuring for.
First of all is that the world changes rapidly every day.
There's a lot of leverage and the system.
And oftentimes different sectors of the economy, even though the other sectors are going full speed.
Issues and the last one that I think is under appreciated.
Is that Oh, well number one we have the best restructuring team on Wall Street. So that's another reason and and second they're very good at doing out of court restructuring and I think.
That's a very unique attribute.
And is being able to fix companies without going through the chapter 11 process most companies would prefer that.
And our team is very good at it.
And I think and an economy like this where there are opportunities to be innovative around capital structure. That's a really that's an asset that might keep us.
Busy.
Longer.
It makes a lot of sense and then in terms of the hiring environment. How competitive is it out there in terms of bringing in new talent and how should we think about how this could impact the comp ratio for the year and are you seeing stronger competition from some of the bulge brackets for retaining talent.
Yeah.
We're not we're not at the senior level, having any issues with the with the bulge bracket and most of our senior bankers don't really want to go back I don't think we have a lot of problems you know theres a lot of talent a hunting out there for for junior talent and that's so.
And so we see that all everywhere.
I'd say the environment for talent is.
Similar to what it's been there are people looking and there are people available I think one of the differences is it's a little it may get more expensive because you've had financial stocks.
Run up and the last year or maybe year and a half.
And remember we have to pick up a lot of deferred.
And you pick up deferred so I think the overall expense of of hiring people has gone up possibly.
And you look at our own stock is more expensive to hire our own people on deferred and it's pretty.
And that's that's common across the street and I think of a lot of firms have their stocks up.
And comp is probably a little higher so you have the marginally more expensive and it's always been competitive so I'd say most people don't they.
They're making of life decision and I think it's always been competitive to get them.
To leave a place that they are at and and change so it's about the same.
Okay that makes sense and then if you could just touch on your non compensation costs over the longer term as the economy continues to reopen and you begin your return to office.
I'll take some of that on the I think you were thinking more about travel and and I know Joe had some.
Thoughts on the quarter, but the.
Again, no one knows but.
Because of the marginal differential I think you're talking about is travel and tenet.
I, obviously, we're gonna give back some of this because we've you know we've gone to almost zero or very marginal.
I think though that a lot of travel is going to change and my guess is that we end up somewhere with a third two of half of our previous travel, but I'm not quite sure.
You know I can't say that I know that I.
I just think we're going to.
Eliminate some of the more commodity travel that can be done by zoom and over the phone call, but but the real relationship building travel I think will be pretty intense and might even be elevated.
When you know maybe the back half of next year when everybody tries to catch up and go see somebody they haven't seen in two years.
Okay. Thanks, so much.
The next question is from Devin Ryan with JMP Securities. Please go ahead.
Hey, Ken Hey, Joe how are you.
Okay.
Yes.
Maybe to start here with the bigger picture question looking back and when the company went public in 2014 revenues were around $500 million and.
Obviously, we'll see how this year plays out, but you know a lot of momentum and and so Billy.
Billions of dollars or maybe even something higher doesn't seem unreasonable so roughly of double.
From from when you went public and so as you look out into the future here and think about kind of the next double from here, maybe just talk a little bit about what some of the big drivers of that might.
Might be whether it's you know the M&A business still having kind of a lot of white space or you know.
The international opportunity just lumped it took maybe think about broad strokes of what some of the bigger and the most compelling opportunities are to kind of take revenue for the next level.
Dave and I think it's not well there is white space, we of white space, but what is even more of it.
The encouraging to me are what's really almost.
Stunning to me, I'd say and and and it's why I think this is the busiest time I've ever seen and my life.
Life.
And the reason is.
You know a few years ago, maybe only 10 or 15 years ago. It would take a decade.
To build the business to the point where.
We kind of would be interested that are minimum fee level or where we would want to participate I don't know many companies that got to be worth of $1 billion 15 years ago.
And a short period of time.
And today that could be weeks I mean it.
Months I mean, it's there are new companies being formed created and reaching relevant value.
And.
And <unk>.
Record time, so like when you say.
How deep is the M&A market I would suspect there as you know like 30 to 50 companies or more of that didn't exist 18 months ago that are in our fees that are in the range of something we'd want to talk about.
And I'm sure of light on that by the way.
So the creation of value and the by the way and also the creation of market cap. So the revaluation.
Is amazing.
The the amount of middle market companies that are now worth.
And five to 10 billion and fairly rapidly that's a large fee event for us and they are in transition and other companies are looking to buy them to fill in their digital strategy.
So look I think that the creation of market capitalization alone and then the need for almost every company in the world to rethink how they go to market ESG digital and climate change the.
The amount of change going on is also rapid so I think the velocity and lastly, again, something we didn't even talk about the.
The amount of capital going to alternatives, which are in the business of transacting and you put all of that together and I think it's what's leading to the incredible.
You know robustness of this market and.
And I don't see it stopping I mean I guess.
Could there could be a of external event, but without without and external event that I cant foresee it feels like it's going to continue.
Yes, Thanks, Ken Great color and and maybe this is somewhat interrelated, but kind of more.
And the near term you know the obviously the stock market has been kind of a big development and.
I know, you're very familiar with what's going on there and involved and just thinking about the amount of spec ipos that we saw and the first quarter of more than all of last year true.
And this amount of company irrespective of you'd be looking for targets and just kind of thinking about I guess, maybe the opportunity that that's creating for moelis to be involved with snacks also maybe bigger picture of kind of how that's affecting kind of sponsor clients and.
And does that crowding out the opportunities for them or do you think it will and on the.
And the flip side, you know I think they're all benefiting from selling assets into the market as well. So just maybe kind of the some thoughts on how that is also affecting activity within most of the world or the outlook for your M&A activity.
So I think the spec market is here to stay youre going to have a valuation and repricing changes and also refocus some of them I think.
With focus for a while a lot of hyper growth companies and certain industries, maybe it'll move a little more of the cash flow, but again Dev and I think what is interesting is the rise of what I call. The very large late stage venture almost venture capital need and the.
Theres, a huge hole and that market, where these companies are getting to.
And three to five to 10 of them of a private.
Market capitalization.
And when you say private equity private equity wasn't actually formed.
To to.
To fund that kind of hyper growth.
Hi Tech type companies now.
I think they were going to try to look I think they were and a good position over time to say Hey, we're the best way to fund. These we get to see five year projections, we get to see due diligence.
But the spot market has moved into that space and almost bridged.
A market that didn't exist three years ago, which is very large high growth companies that need a lot of capital to get to the next stage and it's like I was saying before those companies are being created.
<unk> and and and so I think theres a lot of specs out there, but there's a lot of growth capital needed.
And and a lot of great entrepreneurs and a lot of it and there's a lot of businesses are.
Debt.
You might not have heard about but they are fundamentally changing the world and disrupting and they're going to they're going to meet each other and I think that's.
Funding source that will continue.
And I think it's additive so it's a long way of saying I think you have private equity will be booming and their own asset class I think this is almost a new class.
Of a very late stage venture.
And and it's needed.
Yeah, Okay, great I will leave it there, but really appreciate it.
The next question is from Ken Worthington with JP Morgan. Please go ahead.
Hi, good afternoon. So.
And clearly see and and and and knew that the business is doing.
Particularly well and what's typically a seasonally slower quarter, what areas, maybe were more subdued either by region or by by service, what what hasn't been working quite as well as the majority of the business and.
And what might be the outlook there.
Oh by the way Ken you must have been the first time since we went public you were not the first question of very very disappointed it's like look like.
And when Luke Eric and of the streak. There. So just wanted to note debt.
And dropped the ball.
[laughter] what slow look it's it's the classic stuff I think it's the parts of the economy and and we're pretty strong across most of the sectors that are important but of course and things like retail or you know, there's not much to do but not much progress.
Aggressiveness I, even think even even the restructuring part of retail sort of got in the cycle early last year, and that's not and and maybe.
And I'd say oil and gas that part of the world still slower than most but.
Those are very episodic.
Those are very unique as to what they're facing you know most of the rest of our sectors were pretty <unk>.
Pretty.
Busy.
And I'm trying to think of one that you would consider.
Ah you know outside of those two which seemed you know for fairly obvious on the outside I don't know one that debt I don't know another one that I'm missing that would've been unusually slow.
Yeah and then.
Europe Cross border Cross border Asia.
Anything standout as being you know.
Slower of weaker than the other regions or is everything sort of light white hot by region too.
As usual the U S. When things are slow the use of some of the busiest when things are hot the Hewitt busy so I think.
And the U S stands out again in terms of it's the velocity of transactions, but interestingly I think we had and white house might be too, but we had a very.
And substantial and very good business and almost every region. You mentioned I think in every region you mentioned to be clear.
Okay.
And that's it for me. Thank you so much.
Yes.
The next question is from Steven <unk> with Wolfe Research. Please go ahead.
Hey, good afternoon.
Good afternoon, and wanted to start off with the question just given some of the potential tax changes that could be forthcoming whether it's the higher corporate tax rate or just changes in the capital gains.
It's impacting any of the CLO of the discussion and then you guys are having.
Yeah.
I haven't seen.
A lot I asked I assume there's a transaction of two we have where somebody thinks they're going to get a capital gain out before tax increase.
Well, it's hard to define that because.
We don't get told that they may be thinking that I assume it's happening a little bit, but I don't I don't see of driving right now.
I think the other thing that I've talked about.
Or what's driving the market now and if somebody put in place of 43% capital gains tax and said.
Yeah. That's effective January one of 2022, you might see some real step up and and activity, but you know I don't think people are expecting that.
And for right now I'd call it marginal and hard to measure.
Okay and I appreciate that color and then I just wanted to ask the follow up with regards to the restructuring outlook and I. Appreciate a lot of the context of you had provided earlier on the the challenge of each from from from my seat is every other corporate has indicated that we're seeing.
The restructuring rebase to pre pandemic levels and just wanted to get a sense as to whether one are you comfortable at least indicating or should we be comfortable underwriting I should say, 20% to 25 per cent of your revenue is still being from restructuring even with the better backdrop that you had cited.
And I guess sort of secondarily. If you can just provide maybe a little bit more perspective in terms of of what are some of the other idiosyncrasy, there and maybe driving greater resiliency and your business relative to some of your peers.
So.
I would I would feel comfortable in the near term thinking that we're going to stay at $20 25 per cent and you know and as far as like you know for the relevant and future that I can see I would tell you the biggest risk to that.
And I think that the numerator changes to the high side and in shrink the the ratio because of the the strength of M&A.
More and more so than debt restructuring tricks.
And if that makes sense and again I do believe we have the best team. It's a phenomenal team we've kept it together we have a lot of the people who of young.
Junior bankers, seven or eight years ago, and now moved up and bringing in their own right the fees.
These they're very innovative.
<unk> tend to keep the companies from filing chapter 11, and when you have access to capital markets and you can figure out ways to use them to stave off bankruptcy.
I think that's the real asset and it could be why we continue to have a good level because.
Right now you don't have to go but you know there's a good chance that there's a solution there.
That is innovative and around the markets and not not.
Just going through a chapter 11, and I think we're I think that's the specialty of ours.
And thanks for that color and just one quick ticket and I guess numbers of modeling question could you share just where the banker count as well as where the MD count stands as of the end of the quarter.
That's it you have and in front of me. So I think the of the MD count as of today is the 127.
And the banker count is 618.
That's as of today at the end of the quarter. It was a little less 126 and.
$6 15.
Okay, Great that's perfect. Thanks for taking my questions.
Thank you the.
The next question is from Brennan Hawken with UBS. Please go ahead.
Hey, good afternoon, and thanks for taking my questions.
Just wanted to circle back to Joe.
Some of the comments that you made on non comp in the prepared remarks.
They were quick you guys jumped right to it here today, so I might not have gotten.
But and I appreciate not messing around and just get straight to it.
But.
The non comp came in a little bit heavier than.
We were expecting and the was.
Adjusted last quarter.
It looks like it is and that other line. So wanted to try to understand maybe what was there were there. Some one time items and they're just sort of understand the composition of that divergence versus the prior expectations and then.
Thank Joe you'd said.
30 million Bucks and non comp per quarter before transaction related.
Can you can you kind of put a little bit more context around that so we can understand how to how to frame does that mean basically the.
And then as revenue is humming you guys are going to have some transactional related.
You know expenses, which will flow through that line and if that's the case why didn't we see that last year.
Sorry, I know, it's a multi partner.
Yes.
So let me start with the first part of your question. The $5 million is made up of the combination of co.
Personal fees as well as new seasonal reserves.
And that related to some aged receivables on the.
The reserves most of that we fully expect to collect so this is just a function of the new GAAP and how we it's more formulaic theres less judgment involved and ultimately we absorbed some additional cost this quarter that we werent expecting so ultimately we view both of those.
Things is episodic.
And we continue our I continue to believe that 30 million is the underlying run rate and.
And that really assumes continued light travel for the second quarter, we're thinking travel might pick up but we're thinking that that probably won't happen until the back half of this year.
The Guy does that answer your questions.
Yeah, It does but it sort of leads to more seasonal reserves Jesus thing Ken.
And your of bank.
Wow.
Fortunately and unfortunately receivables, our credit and it applies to everyone.
And we had to create a methodology around it and ultimately we had a few million dollars that ultimately emerged and that due to some aged receivables, but again, we fully expect those to be collected.
And the short term.
Okay.
And.
Is it is it that based upon how sometimes these receivables kind of age we should we should expect this might crop up from time to time and and that its basically related to just of just a little bit of a lag the billing and there might be some noise and in that regard day, yes, it could but it.
It should be unexpected we're pretty good about keeping on top of this and there were just some specific client situations that that gave rise to this but it's nothing to be alarmed about and its nothing that concerns us.
Got it for sure and.
And you said that was like two or three of a million of the five yeah.
Yeah exactly.
Got it okay alright.
And when we think about.
The quarter.
And this was quite a quarter.
For snacks and.
And.
Can you were.
Early to embrace of this.
Emerging trend and the middle and seem to remember it being the July call of last year. When you were.
And you, particularly flagged how Oh this was powerful of this shift and you were you were it was prescient.
How much of the factor where capital markets and spent a lot of time this afternoon and talking about restructuring.
And that's fair, but and it's helpful. But I'm curious from a capital markets I think capital markets last year was the was a record center for you guys. If I am remembering this correctly.
How did the quarter fair what was like the pace.
Was it running hotter than it did last year and as we've seen spec start to slow.
Has that.
Likewise, the impact on your capital markets business or are you staying busy.
I think our capital markets guys regret coming over here in September they haven't slept the.
[laughter].
And Brandon the it's funny because we.
For producing across the board, there's a lots of privates and very innovative transactions I think Joe we tried to look at specs and was fairly minimal in the quarter.
Yeah.
Modest and the context, I mean again capital markets has historically been kind of 2% to 4% I think this quarter.
We saw 10% to 13% and certainly stacks was a component of it but not all of the.
Yeah.
Because the big part of it you know specs I think we made some money we were co book runner on a few and you know that.
That's a good thing, it's not a M&A type fee.
And it but it puts you also inside of <unk> and now Youre of the company's banker and you're you know there should be other things that come and the future.
So yeah, we didn't see you know like the there weren't a back of a bunch of big D specs, which is where the fees would be it was more of the beginnings of the capital markets raising the money.
Right.
You would think could end up turning and do the dis back down.
Down the line.
That's the the point is to stay with them through pipe now you have the ability to do the pipe, which is the decent fee event and the D spec.
Right and.
And how about the more recent velocity it seems as though there's been a bit of a slowdown and some of the some of those markets have you seen that too or has.
And has it not is that velocity and not really sort of for you. All you you're talking about spec specifically.
And capital markets, both specs and capital markets more broadly.
Well capital markets broadly know and and in fact that the M&A market. Just continues to go from strength to strength and and so and similar with the broad based.
Capital markets, and but let me say on specs there was a point here, where the FCC came out and sit and.
And said they want to change some accounting that that affected that was just sort of like a four week hiatus as.
People tried to find and accountant that was available to redo their financials. It really became a backlog line.
And sort of everybody. If you were in mid transaction or you were going public you had to redo your financials.
And so yeah, there's been a hiatus that that was caused by that in the spec market and almost every day.
Got it okay. Thanks for the color.
The next question is from Michael Brown with K B W. Please go ahead.
Great.
Hi, Ken and Joe.
And just to start off.
And maybe kind of close the loop here and you know obviously you had some very positive comments on the momentum that you're seeing across across the business, but I'm just hoping you could characterize your backlogs.
And specifically for advisory I think you had said on the last call that they.
And they were running at record levels and they never as bad debt.
And never been at that level of before so just curious after this first quarter of how they stack up relative to last quarter.
I think significantly higher we're at our highest levels are I don't want to get used to our reporting that but.
They continue to increase and.
We have we have of.
We have a think of NBRC and new business Review Committee and the amount of submissions is up significantly over any period, we've ever seen.
Okay, great great.
Impressive.
And then to follow up on some of the spec commentary you know obviously, there is going to be a lot of M&A activity industry wide.
The.
Related to the <unk>.
And the Destocking processes and snacks line targets.
What is your general timeline and when do you think that activity really pick up meaningfully as kind of the back half of this year of fair expectation or because of there's kind of a lag between when the supposedly the announced and ultimately closes and more of like a 2022 of them just trying to think through.
How that could play out.
Looking forward.
Yeah.
I think it will start again.
Quicker than you think one of the reasons you know there was a REIT I think there was a re pricing of a lot of pipes. There were a lot of deals that were negotiated.
And I think January February.
And then did the LOI and went to the pipe market and there was a there was a change and look it's really an IPO market and some sense and there was a change and that market there.
And there was a pretty significant change and how.
I call it almost hyper growth, but high growth companies were valued and so the pipe market started to I think re price.
And I think Theres a lot of transactions out there under LOI that are both waiting for their accounting.
So that they can file and our and our repricing pipes, as we speak and changing values and.
And so I don't I don't know that you won't see of summer of the spec.
But I think it'll be pretty you know look again, there's 500 of them I don't see them, all but I think that's going on and I think it'll be pretty even.
And Theres a lot of growth companies. It is of bridge, it's a new play of raising capital almost very very late stage venture and large chunks of money those companies need capital and they want to grow and they're going to come and I think it'll be fairly significant once this hiatus.
Both the accounting and re pricing.
Is over and that should be I think that's and.
And the next three or four weeks.
Okay, that's interesting commentary.
And maybe just one last one from me obviously you saw the eight.
Okay about the changes to the the board structure.
And to shift to a controlled company.
One of my interest and non interest income on regional and company.
A.
Correct. Thank you for that clarification.
Very important.
But you know one of my key observations and there was that after the you announced the resignation of the co presidents and C. O O that there would be just five members on the on the board and three of which were independent.
And I know that this is really a board matter, but just curious if you could give some comments about you know the desire to grow the size of the board and bring and maybe you know, bringing more of independent members overtime.
Okay.
We're probably I think will probably bring in at least one more.
But I don't I don't really want to have a gigantic board we've got a good board.
We can make decisions last year when COVID-19 hit I.
I think we were moving very rapidly to make decisions.
You know I think we have enough I don't I don't really see the benefits of having what I would consider a pretty unwieldy board both expense wise and.
And the ability to move so what we're gonna have a and independent board and.
It'll probably be mortgage spread the workload around and get some expertise, but I'm not I'm not that interested and building a gigantic board.
Okay.
And thanks for taking my questions.
The next question is from Jim Mitchell with Seaport Global Securities. Please go ahead.
Hey, good afternoon, maybe.
And maybe just a question.
I mean everyone's been pretty pretty opt.
The optimistic about activity. It seems like dialogues are strong and it doesn't sound like there's been any yet pushback on valuation from financial sponsors or anything are you sensing any any hesitation at all creeping into the.
Dialogues just based on valuation or is it hey, we're in a recovery and it doesn't matter.
Well that would be and.
Kind to some of our clients to say they don't care.
But.
Let's just say that things are.
And things are trading there's not a lot of they're not of lot of deals that you know the co broken.
Because and that usually means people are getting their value.
And I'll tell you one of the things that as I always say this and a bull market.
People find a way to get around issues and a bear market of pebble and it looks like the Boulder, you know you're running down the deal and a little pebble and the road comes up and if things are negative and because all we don't know how to get around the pebble and and a bull market you could put a bolder and front of the deal and people drive right over it.
So and so things accelerate they closed quicker the.
Day, they reach agreement quicker and and and I think you're seeing some of that and that will continue I think as the recovery happens, but you know.
I don't want to say people aren't trying to find value. The they are trying to find value and the people do have limits as to where they want to go.
But we are finding of most most processes find a buyer.
Right, Okay, well, that's helpful and and maybe just on the on the the dividend.
Is there a <unk>.
Level of cash should we think about going forward you prior to the COVID-19 you guys were pretty consistent with two specials, a year or are we kind of back and that flow and is there a way for us to think about what kind of a minimum cash level you you prefer to keep and and what how we can better estimate excess for you guys.
And.
And a second I'll, let Joe do that so one of the reasons and I look I do think about too because we talk about it and we don't like to hold it for more than of you know we don't like to hold it we we havent and treasury bills, earning nothing.
And we don't think that's a good use of your capital all of our shareholders capital. So as soon as we get to a large enough of Mt, which is usually.
And kind of six month cycles, it's large enough to be administratively good.
To pump it out of this.
And this year.
Because we were.
Because we were conservative going into the crisis, we ended up with more cash at the end of the year and then the reason you know we paid the $2 dividend right I think the three months ago, we paid it and we're doing another two.
One of the reasons was also the fourth quarter.
It was so strong that by the time, we had organized and paid of $2 dividend and other Honeywell and it was so strong that we ended up probably with more cash from that quarter than we are.
We wanted to get that paid in 2019 and case tax rates moved and it meant something to the to the organizations that got the dividend. We thought it was prudent to get that money out the door.
So we had of declared before he really had a total understanding of how and how what that quarter was going to be so so this timing is a little strange because of the deferred you know we didn't pay the second quarter, we wanted to get it back we had of tax change.
The short answer is going forward, we probably will if if if times are good and we probably would go to twice a year and Joe you want to talk about when you considered minimal cash.
Yes, so our minimum capital remains around 50 million after the.
Earmarked amounts for things like taxes and bonuses.
And and as Ken said, our primary focus is beyond that amount, we consider and access and we just want of distributed or for return it and some for them.
Okay, that's great. Thanks.
Okay.
The next question is from Jeff Harte with Piper Sandler. Please go ahead.
And good afternoon guys.
Couple of kind of cleanup of sort of maybe a strategic one.
Cleanup wise, Joe as far as the share count creep outlook goes and it impacted at all by the ramp up and kind of price. We've seen recently or should we still think of the same kind of quarterly creep going forward.
Yeah the.
Creep and you know kind of with prices being stable or somewhere around eight to 900000 shares per quarter. So when you have a of lift under the share price and it will ultimately accelerate that and that's why you saw something closer to a million a little more than a million shares this quarter.
Okay and.
[laughter] windup asking this every quarter, but is there anything to highlight as far as <unk> closings kind of having revenues pulled back into the first quarter.
And I mean, the pull forward.
Referring to it was a couple of transactions that added up to I think about $11 million.
Okay, and then you mentioned earlier the stack book runner and see you guys show up in the equity underwriting league tables to get catch our eyes.
Is your involvement there really just something and opportunity within the spec specifically or did you guys give any thought to.
Kind of equity underwriting business beyond specs going forward.
Yeah the.
One of the things that got me interested last year in beefing up as we had done two direct registered placements on utility companies.
Of substantial size and.
And I started to and by the way we had done a heck of equity I mean, it was it was equity direct equity.
So I kept I started to think there is a a virtual method to do this without the overhead of all of the trading floor overhead and.
And yes, we are talking about ways and programs and.
And different things that we think are innovative around equity offerings.
You know with the equity.
The equity light and virtual or other light asset light I think we can do more and more and that space. It's not just specs.
Okay and interesting thank you.
This concludes our question and answer session I would like to turn the conference back over to Ken Moelis for any closing remarks.
Okay I appreciate all of the support and I look forward to talking to you at the next quarter. Thank you.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Okay.
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