NEW YORK, October 20, 2010– Greenhill & Co., Inc. (NYSE: GHL) today reported revenues of $84.1 million and net income available to common stockholders of $14.5 million for the quarter ended September 30, 2010. Diluted earnings per share were $0.47 for the quarter.
The Firm’s third quarter revenues compare with revenues of $116.3 million for the third quarter of 2009, which represents a decrease of $32.2 million, or 28%. Financial advisory revenues for the third quarter 2010 were $97.0 million as compared to $42.4 million for the same period in 2009, or up 129%. However, total revenues for the period were down versus the prior year, primarily due to an unrealized investment gain of $66.5 million in the third quarter of 2009 from our investment in Iridium Communications, Inc. (“Iridium”).
For the nine months ended September 30, 2010, revenues were $216.4 million, compared to $232.2 million for the comparable period in 2009, representing a decrease of $15.8 million, or 7%. Financial advisory revenues for the nine months ended September 30, 2010 were $195.5 million compared to $153.0 million, or up 28%, versus the same period in 2009, but total revenues for the year-to-date period in 2009 included an unrealized investment gain of $69.1 million from Iridium.
The Firm’s third quarter net income available to common stockholders and diluted earnings per share in 2010 of $14.5 million and $0.47, respectively, compare with net income available to common stockholders of $30.0 million and $1.01 of diluted earnings per share in the third quarter of 2009, which represent decreases of 52% and 54%, respectively. On a year-to-date basis net income available to common stockholders was $32.5 million through September 30, 2010, compared to net income available to common stockholders of $54.2 million for the comparable period in 2009, which represents a decrease of 40%. Diluted earnings per share for the nine months ended September 30, 2010 were $1.06, compared to $1.83 for the same period in 2009.
The Firm’s revenues and net income can fluctuate materially depending on the number and size of completed transactions on which it advised, the number and size of investment gains (or losses) and other factors. Accordingly, the revenues and net income in any particular period may not be indicative of future results.
“We showed substantial improvement in advisory revenue for the quarter, as well as strong year-to-date improvement compared to last year. Australia, Japan and North America were all strong contributors while transaction activity in Europe has remained weaker. While both general transaction activity and the productivity of our Managing Directors remain far below historic levels, our increase in advisory revenue echoes industry transaction data in suggesting that we are seeing the beginning of an upturn in market activity. In its early stages that upturn could produce volatile quarterly results, but it should represent a substantial opportunity for the Firm over time. High corporate cash balances, low interest rates, a stronger equity market and the challenges companies face in achieving organic growth are among the many factors behind that upturn. Apart from reflecting the apparent beginning of a cyclical upturn in activity, our results also demonstrate that we continue to gain market share versus our larger competitors. We believe our independence, our exclusive focus on client advisory work and our substantial expansion of geographic and industry sector coverage in the past three years all position us well for continued success,” Robert F. Greenhill, Chairman, said.
“We continue to have a strong focus on profitability, even while continuing to invest heavily in growing our global franchise. Despite being impacted by both transaction costs and amortization of intangible assets related to our Australian acquisition, our non-compensation costs remain well below those of our most comparable peers, driven by our simple business model, strong culture and commitment to creating shareholder value. With respect to compensation costs, three years of significant growth in senior personnel during a difficult market environment, combined with some severance costs and costs associated with new hires, have resulted in a compensation ratio somewhat above the level we achieved in recent years. While our compensation ratio remains below that of our most comparable companies, our objective is to bring that cost ratio further down toward our historic level as and when the transaction environment improves further,” Scott L. Bok, Chief Executive Officer, added.