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

November 01, 2012 | About:
10qk

10qk

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Greenhill & Co. Inc. (GHL) filed Quarterly Report for the period ended 2012-09-30.

Greenhill & Co, Inc. has a market cap of $1.36 billion; its shares were traded at around $47.94 with a P/E ratio of 33.7 and P/S ratio of 4.6. The dividend yield of Greenhill & Co, Inc. stocks is 3.8%.

Highlight of Business Operations:

Advisory revenues were $72.7 million in the third quarter of 2012 compared to $83.2 million in the third quarter of 2011, a decrease of 13%. For the nine months ended September 30, 2012 advisory revenues were $191.2 million compared to $217.3 million for the comparable period in 2011, representing a decrease of 12%. During the same nine month periods, global completed M&A volume decreased by 26% from $1,899 billion in 2011 to $1,401 billion in 2012.(1) Within our business, through the third quarter of 2012 our North American advisory business has been our strongest revenue performer in 2012, with Europe beginning to show some improvement, while activity in Australia has declined from last years strong pace consistent with general market activity in that region. In terms of type of advice, financing and restructuring advisory work has been a strong contributor alongside M&A, while our capital advisory (fund placement) business is slightly down versus last year as it is still being negatively impacted by continued market volatility and uncertainty.

On a year-to-date basis total revenues were $192.8 million compared to $199.5 million for the comparable period in 2011, a decline of 3%. Advisory revenues for the nine months ended September 30, 2012 were $191.2 million compared to $217.3 million over the same year-to-date period in 2011. Investment revenues for the nine months ended September 30, 2012 were $1.6 million compared to negative $17.8 million for the same period in the prior year. The decrease in our year-to-date revenues as compared to the same period in 2011 resulted from a decrease in advisory revenues of $26.1 million offset, in part, by an increase in investment revenues of $19.4 million.

Our third quarter 2012 net income allocable to common stockholders of $8.6 million and diluted earnings per share of $0.28 remained the same as net income allocable to common stockholders of $8.6 million and diluted earnings per share of $0.28 in the third quarter of 2011. On a year-to-date basis, net income allocable to common stockholders was $27.0 million through September 30, 2012 compared to $28.5 million for the comparable period in 2011. Diluted earnings per share for the nine months ended September 30, 2012 were $0.88 compared to $0.92 for the same period in 2011.

Our first sale of our Iridium common stock occurred on October 3, 2011, and through September 30, 2012 we have sold 39% of our holdings. Subsequent sales will continue systematically under the plan until all of our interests in Iridium have been sold. The plan calls for the sale of our shares in Iridium in small daily increments, which represent a small percentage of recent daily trading volume levels. Specifically, we will sell 15,000 shares of Iridium common stock per trading day when the prior days closing price of Iridium common stock is below $8.50, 20,000 shares per day when the prior days closing price is between $8.50 and $9.50, or 25,000 shares per day when the prior days closing price is above $9.50. The only exception is that we will not sell shares on the last five trading days of any calendar quarter. We expect to use the net proceeds from the sales to repurchase our common stock. Since we began our plan to sell shares of Iridium we have sold 3,865,000 shares of Iridium at an average price of $7.95 per share. During the nine months ended September 30, 2012, we sold 2,995,000 shares of Iridium at an average price of $8.32 per share for total proceeds of $24.9 million. At September 30, 2012, we owned 5,939,016 shares of Iridium, which had a value of $43.5 million, representing approximately 8% of Iridiums fully diluted common stock.

In the first nine months of 2011, our cash and cash equivalents decreased by $16.1 million from December 31, 2010. We generated $75.7 million from operating activities, as we used $81.0 million generated from earnings (after giving effect to the non-cash items) to fund a net decrease in working capital of $5.2 million principally from the annual payment of bonuses. We generated $50.2 million from investing activities, primarily from the sale of our interests in two merchant banking funds for $49.4 million and distributions from other merchant banking funds of $4.2 million which was used in part to fund $0.9 million for capital calls on our remaining merchant banking fund investments and $2.5 million for the build-out of new office space. We used $140.5 million in financing activities, including $41.7 million of net repayments on our revolving loan facility, $42.6 million for the payment of dividends, $36.7 million for open market repurchases of our common stock, $18.5 million for the repurchase of our common stock from employees in conjunction with the payment of tax liabilities in settlement of restricted stock units (net of $0.4 million of tax benefits from the delivery of restricted stock units), and $1.0 million of distributions of excess 2010 profits to GCP Capital.

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