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Greenhill & Co. Inc. Reports Operating Results (10-Q)

October 28, 2010 | About:
10qk

10qk

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Greenhill & Co. Inc. (GHL) filed Quarterly Report for the period ended 2010-09-30.

Greenhill & Co. Inc. has a market cap of $2.3 billion; its shares were traded at around $77.06 with a P/E ratio of 67.3 and P/S ratio of 7.7. The dividend yield of Greenhill & Co. Inc. stocks is 2.4%. Greenhill & Co. Inc. had an annual average earning growth of 11.8% over the past 5 years.GHL is in the portfolios of John Keeley of Keeley Fund Management, Kenneth Fisher of Fisher Asset Management, LLC, Ron Baron of Baron Funds, Murray Stahl of Horizon Asset Management, Chuck Royce of Royce& Associates, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

Our non-compensation expenses were $15.9 million in the third quarter of 2010, compared to $11.8 million in the third quarter of 2009, reflecting an increase of $4.1 million, or 35%. The increase in non-compensation expenses includes costs from our recently acquired Australian business of approximately $2.1 million of which $0.8 million related to the amortization of acquired intangible assets. As compared to the third quarter of 2009, the remainder of the increase in costs principally resulted from higher occupancy, travel and other costs related to the increase in personnel and the addition and expansion of office space. Effective in the third quarter of 2010 our occupancy expense increased as we significantly expanded our office space in New York and Tokyo under attractive lease terms to accommodate our future growth.

For the first nine months of 2010, our non-compensation expenses were $44.4 million, compared to $34.5 million for the same period in 2009, reflecting an increase of $9.9 million, or 29%. The increase in non-compensation expenses includes costs from our Australian business of $4.2 million, including $1.5 million related to the amortization of intangible assets. For the nine months ended September 30, 2010 we

During the nine months ended September 30, 2010 the firm repurchased 181,550 shares of its common stock in open market purchases at an average price of $68.21. As of October 22, 2010 we had remaining authorization to repurchase up to $87.6 million. Additionally, during the nine months ended September 30, 2010, the firm is deemed to have repurchased 312,870 shares of its common stock at an average price of $78.21 per share in conjunction with the payment of tax liabilities in respect of stock delivered to its employees in settlement of restricted stock units. Based upon the number of RSU grants outstanding we expect to fund repurchases of our common stock from our employees in conjunction with the cash settlement of tax liabilities incurred on vesting of restricted stock units of approximately $95.0 million (as calculated based upon current share price) over the next five years, of which approximately $27.0 million will be payable in 2011. We will realize a corporate income tax benefit of slightly less than the amount of such payments concurrently with the cash settlement payments.

In the first nine months of 2010, our cash and cash equivalents decreased by $17.7 million from December 31, 2009. We generated $41.5 million in operating activities as we used $73.9 million generated from net income (after giving effect to the non-cash items) to fund a net decrease in working capital of $32.4 million (principally from the payments of year-end bonuses and an increase in accounts receivable). We used $11.5 million in investing activities, including $11.7 million in new investments in our merchant banking funds and other investments, $3.8 million for the build-out of new office space and $3.0 million for the payment of post closing distributions of accrued profits prior to the acquisition date to the founders of Caliburn, partially offset by distributions from investments of $7.1 million. We used $46.8 million for financing activities, including $24.5 million for the repurchase of our common stock from employees in

conjunction with the payment of tax liabilities in settlement of restricted stock units, $12.4 million in open market repurchases of our common stock, and $42.2 million for the payment of dividends, partially offset by $25.4 million of net borrowing from our revolving loan facility and $8.3 million of net tax benefits from the delivery of restricted stock units.

In the first nine months of 2009, our cash and cash equivalents decreased by $4.3 million from December 31, 2008. We generated $39.6 million in operating activities as we used $18.9 million from net income (after giving effect to the non-cash items), including a net increase in working capital of $20.7 million (principally from the collection of financial advisory fees receivable and an increase in the amount of accrued compensation). We used $3.9 million in investing activities, including $6.6 million in new investments in our merchant banking funds and other investments and $2.8 million for the build-out of new office space, partially offset by distributions from investments of $5.5 million. We used $42.0 million for financing activities, including $8.9 million for the repurchase of our common stock from employees in conjunction with the payment of tax liabilities in settlement of restricted stock units and $41.7 million for the payment of dividends, partially offset by $7.1 million of net borrowing from our revolving loan facility.

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