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Nicole Brunner | Chief Marketing Officer |
Marc Mayer | CEO |
Paul Battaglia | CFO |
Good evening. My name is Angela, and I will be your conference operator today. At this time, I would like to welcome everyone to the Manning & Napier Second Quarter 2020 Earnings Conference Call.
Our hosts for today's call are Nicole Kingsley Brunner, Chief Marketing Officer; Marc Mayer, Chairman and Chief Executive Officer; and Paul Battaglia, Chief Financial Officer. Today's call is being recorded and will be available for replay beginning at 7:00 p.m. today. Eastern is PIN number and XXX-XXX-XXXX dial-in XXXXXXX. enter The my turn the Instructions] It over to now is [Operator floor pleasure to Ms. Nicole Brunner. Kingsley
Angela, everyone, you, discuss second and us XXXX you, quarter to Napier's Manning for results. today & Thank joining thank
Reform within Because statements uncertainties, remind Private known actual unknown financial I there during of any assumes from by statements and deemed are guidance, differ Act Napier obligation not on may cause to call Securities & implied those any including no statements to that historical update certain be these Before forward-looking could we facts, like these or involve statements. the forward-looking Manning to statements risks everyone the begin, forward-looking expressed or based would Litigation meaning important made of this and relating XXXX. factors forward-looking results statements. materially that to responsibility
reference reconciliations and earnings financial related turn some Officer, this non-GAAP that, I Chairman over measures. may the our Mayer. Marc Mr. on Executive to found will call GAAP include to Full release filings. be With our During comments Chief SEC call, Marc? and can
Nicole. you, Thank
always, on XXXX, the and review both performance clients, second done downside rebound, in market last ultimate for to call. what of recovery. half which experienced changing we sharp investors months adapt been with a begin six for market have managers we in our clients: I participating active the committed challenging the first Thus quarter to test exactly I'll XXXX, of detail of strong market have far protecting we our assess conditions. strategic a ability the on during historically fair the and our the will after historically progress to managers. initiatives As in a discussed The In past
adjust outstanding ability changing driven market has results. rapidly conditions Our to to
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as They in of referenced. fundamental trailing in million the eleven date target on retirement trusts, All year-to-date to U.S. our we strong to class relative year. investment and on date performance core the periods both core our their $XXX already edge rank X- year strategies, over points are robust trailing extended core target performance and our equity equity basis top each in XXX, just benchmarks used over competitive extending are beat the XXX respective Continuing strategies have We plans. collective equity, the vintages same X% and bottom-up set multi-asset which the built the their X-year with all non-U.S. is basis quarter, its points, that and Also XXX leads XXX for unrestricted respectively. time second in notable their over portfolios strategy's well.
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like commitment to our on our objectives, goals to upholding our enumerate as comment Before our country. great of I our continuing progress strategic citizens I'd against
and diversity, that and inclusion Our equity work and to our and like embrace to firm, has confront eliminate country, racism. do bias much we ensure
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are We racism from tangible our and steps bias drive taking workplace. to strong
working to strong equity, compensation are build leadership We to already workforce, group a diverse we and steps to ensure efforts our are and taking more Board. further
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transformation. digital Our
made and productive. remain workforce investments XXXX early to continue enable remote our us XXXX the overwhelming technology of important The and majority fully to in --
InvestCloud budgets Our major the set systems year. with going the and very consistent the forward complex continue at of large we schedules initiatives beginning move is to The implementation well.
numerous tax client launch other robo-advice end tools, capabilities portal We planning expect an and data to in enabling hybrid and tools, developments financial portal, XX over superior the and the sophisticated IT, of HR, a better legacy will with the investments, systems and fall, greater a adviser replaced planning By client are powerful substantially next reporting, warehouse bespoke XXXX, the lower SaaS efficiency, months. effort business operations, expense intelligence. state-of-the-art area technology. of will our all distribution, firm: cloud-based in experiences, every client better cost The huge have of we finance, significant enable substantially anticipated
simplification of and will results. improvement, about our at terms In length Paul speak profitability financial
our I our So essential ongoing only and firm. will briefly speak about to rightsize efforts
including First, case commitment the we, to remains many today. the safety, began I that employees note of like security, priority. made employees. in that job our our health companies, March, crisis When said will COVID the and security, we our was the This
second in adjusted unvested million profit. more operating compensation These majority whereby excluding and Employees improved combination Board rapidly do XX% and investable in or employee indicated also $XX and proportion that which we May, of shares. Manning own employees. bought think cash, now Bill a closed still of below discipline. $XX adjusted that our the become approximately or was more below In in incentive The However, shares our awards, when to accretive XX% ratio times. in made exchange ownership. profitable. Employee are desirable standards. And as held It that back represent Last million towards continue to approximately ago ago. acceptable efficient benefits our getting order operating of all million and that or firm and million units operating margin a to improved to greater and the must score progress profit I've we will more will of finally, first to employees from by both and other to employee to private highly X% in levels do decline leaner, is We these need selling their in productivity drive firm approximately cost made a Board more like the time we has X% sales the so, quarter. more unitholders to frame. stood shares year year expectation increasing the Bill with $XX order in outstanding XX% an and quarter, committed some the owners for that our quarter to on shareholders, the of approximately at much at employees ownership, year XX include accretive including The Manning, us exchange long-term the February ownership, share awards this act X% of of ensuring subsequent moved all in our
Finally our Napier we in XXth & at anniversary of the foundation Manning April. our and firm, speaking of celebrated
over that opportune a X an While accomplished for is, pride for it reasons, we have time time many reflect to is challenging now on all celebration, our with first decades.
for the doing to financials. Paul? right details Paul more right as we for over I'll always, turn believe business our do the As And we by that for well. with that, will call clients, on
everyone I remarks I'll starting approximately Thanks, management. and outlined with of $XX.X quarter finished the second We Marc financial healthy on afternoon, $XX.X rebound of XX. everyone, well. assets June results, This the up AUM X% as billion, with under from earlier, thanks that on today. begin us us call Marc. during heels of million XXXX of March increase on billion and my is the million, came $XXX must place with client restrictions. also market is in period our second of quarter hope with $XXX joining $X billion for were Good XXXX client quarter market million. QX trailing the that by client from Gross took from which down flows appreciation outflows. four XXXX and $XXX travel in a offset million average, net cash our our Analysis inflows consider $XXX exclusively net of of COVID-related of approximately
our traction traction And environment. restrictions team, sales intermediary us. of where generally strategy were some $XXX allowed trailing toward encouraged second retention reported in X-quarter wealth million XX%. to team model we with $X.X separate priority Gross channel, However, quarter for team billion, is for By was our achieve through us had of with million million rate $XXX that client wholesaling brought outflows our second been outflows outflows client approximately goal. the portion service-driven million comparable an inflows a a last quarter outflows. sales net caused in XXXX management that Reducing outflows. from We line gaining improvement team during an Also travel account billion. quarter what inflows during has challenging notable And through our of approximately COVID, from our wealth the were a average indicator our single the for despite institutional/intermediary a management quarter the of institutional was portfolio in the $XXX that approximately and inflows of $XXX approximately their rebalanced quarter, competitive that results outflows have that investment been net of quarter, here, efforts. limited and us $XXX to have away the in relationship there intermediary/institutional client million and had of Taft-Hartley $X.X we
Aside in quarter. outflows that that been would line from last single have relationship, channel for with
We impacts client reduced of that prior are of despite have the COVID. net outflows compared we rate the periods pleased to
with see the our that gaining opportunities. strategy Taft-Hartley in and to intermediaries form of our with is momentum third-party management our conversations indicators quality wealth and the continue improved We in prospects activity of
conservative client we market the to However, be such, and term. continue have in to uncertainty of environment. near continues economic a net outlook And flows the this as theme regarding
quarter QX in a paid compensation-related stock a and expenses as margins match. costs, drop were charges is benefits, to million decrease change quarter. by quarter a $XX.X compared costs. the in $XX.X average well million by majority the QX of XXX(k) payroll included XX first sequential like driven We by points. of basis The the This second during quarter, directors $X.X XXXX. Operating were the XX% compensation quarter, severance attributable $X.X down Overall is including X% our or quarter, million in million decrease reported for compared to our decline seasonality last million revenue from AUM our explained of in our the to in to to $XX.X revenue the reduction reported Turning X% as P&L. of the
the which in workforce, seeing overall are impact our as down of the XX. also of employees to We June reduction the of size XXX is
in changes revenue XX%, quarter. operating the impairment from and a downsizing. the down collective nearly Our servicing in workforce for by of The includes a last by or compensation-related of to a were trust quarter. is from And decrease approximately $XXX,XXX current points percentage Fairport, assets. which charge driven quarter expenses attributable was sequentially as $XXX,XXX of the we million leased basis portion XX% our increased expenses custody space in of quarter fund part cost as XX and of average the Other first our noncash AUM. Distribution, for quarter vacated $X.X million $XXX,XXX to $X.X
half in expect securities $X in in million million quarter a of P&L. we online on a the beginning the expenses the $X.X $X.X compared outsized the was XXXX associated quarter. compared improved QX. Non-operating million million into hitting recognized gain with and operating operating fourth income, we also reduction to begin as of to the The attributable technologies marketable increase improvement loss About last and operating quarter income gains in to mentioned will in for that income our million Marc that operating $X.X as in our $X.X come quarter. ahead, Looking resulted other improvement expenses new earlier fees the
of $X million gains compared quarter. receivable to is our last in attributable The nearly agreement. tax the improvement the $X.X reporting are remainder the investments on losses for million accounting We in to
$XXX,XXX As last quarter, non-operating $X of under CARES Act nearly to in a changes from million reported we loss compared the the QX. resulting income
I for to quarter economic $XXX,XXX a million. with associated of As restructuring for costs, $X.X mentioned pretax on our of accounting we $X.X result, million that facilities million charge nearly reported million strategic a earlier, vacated basis, we quarter. noncash compared income reported a including income the loss $X.X the After last of $X GAAP
Our in second the effective improvement economic quarter. $X reduced count attributable increase per share exchange from $X.XX tax the adjusted we and rate net stemming accretive the resulting share reported we This $X.XX, transaction both operating million. a was share our of in told, for last that results closed net XX%, a quarter per is adjusted result quarter improvement $X.XX to also during the All from of approximately of economic income income the quarter.
results. million in the the adjusted shares, in share AUM the XX% our more or weighted half We XX XX, points. down reported from first June compensation, closed well the nearly million, me overall time are reductions was as year, as from $X.X exchange a impact count from P&L down an the and is reductions of Our from million across time Operating to from down million regarding than as shortly. last largely this margins leave expense $XX.X attributable workforce, approximately of we basis last last quarter of for last million I'll But $X.X year. down the this million, from summarize decrease that as adjusted year. to discussion, XX year last improvement from our year-to-date have $X let COVID. XX transaction $XX.X result of with million in average reported comments of quarter. resulting of quickly revenue XX% before XXX million XXX board mid-May We $XX.X XX, revenue were income expenses of reductions year a June through operating the of smaller in expenses More though decrease
June XX, quarter driven the volatility. the COVID-related the through reported recognized from loss $X.X we XXXX, stemming non-operating first addition, losses of In in a by million
and XX income down despite pretax million, million are respectively, income, of June result, and economic through $X operating a $X.X As in from last the earnings improvement year.
following share an shows the of year However, improvement adjusted income this economic reduced result per count exchange last from the as share a net transaction. time
balance discussed and XX with sheet. investments million approximately that March decrease cash from reported to is cash being have entirely previously, buy completion the with attributable exchange We no the annual we The $XX debt. and was of the million approximately $XX of units a the million XX retire Class to share other exchange subsequently and million in led adjusted by accretion approximately and the A the reduction million Bill for and outstanding held share non-selling Post-exchange, private shares adjusted completion shareholders. shares. legacy count to of of used The Manning back at expected meaningful count XX transaction XX Looking includes of shareholders.
XX, approximately As shares team with directors the achieving including shareholders. employees volatility market our we've quarter, meaningful in most for the April by the exchange ever. the achieved largest challenging to closing, as accretion adjusted grateful transactions, working to to quarter, implementation people throughout our of while pandemic of new our Class June everything including tirelessly focus of unprecedented during technology annual our million we In and that portion privately we initiatives, units. caused circumstances. the the own a strategic completed unvested XX% and reflect a with our shares, we And our all led along of active started worked back awards of on are platform, period May, XX on held A In trading remotely. the equity
achieved we executed and this in of clients We environment. shareholders how the we proud and are results very for
work as significant about pressure the to we future P&L we continue during time navigate for our positioning near excited still growth to long-term done expect in are be there's but this which distribution term, environment. We and prospects,
channels of uncertainty will We continue expect to that slowed flows by be the times. across the
we technology our product to quarter, evaluate resources continue into installations While multiyear processes service back-office will and business. the improve phase come identify our simplify platforms begin and will to these online are first to the use of third to our And that and XXXX. to opportunities continue offerings during
is despite will our However, of technology in that current far focus this implementation that remain likely first expectation the overall It second is thus for in the environment. is the year have faced and be on complex pressure strategic and concludes returns on our operator, build the earnings crucial line the time to of I'll that half of we shareholders that the in can call my on status the clients XXXX from pressure growth formal remarks. can of clients the turn and this It we'll part and which place top and we foundation deliver any on evaluation and questions. the because our back XXXX. during the grow executing now earnings the take future. for over and a plan so Operator? we our both That
there And your Please today's conclude a time. at does wonderful you. Instructions] Thank this This are at no call. [Operator questions disconnect conference time, lines day. this and have
Thanks Bye. everyone.
you. Thank
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