Exhibit 99.1
For Immediate Release: | Contact: | Robert S. Zuccaro |
| | | Executive Vice President and Chief Financial Officer |
| | | (914) 921-5088 |
| | | |
| | | For further information please visit |
| | | www.gabelli.com |
GAMCO Investors, Inc. Reports First Quarter Results
| · | First Quarter Earnings of $0.97 per diluted share |
Rye, New York, May 5, 2015 – GAMCO Investors, Inc. (“GAMCO”) (NYSE: GBL) today reported its 2015 first quarter results including revenues of $103.8 million, net income of $24.8 million and earnings of $0.97 per diluted share. On a comparable basis, revenues were $104.5 million, net income was $28.0 million, and earnings were $1.09 per diluted share in the first quarter of 2014.
Assets Under Management (“AUM”) were $46.5 billion at March 31, 2015 versus $47.5 billion at December 31, 2014 and $47.6 billion at March 31, 2014.
| Financial Highlights | | | Q1 | | | | | Q1 | | | | | | |
| ($'s in 000's except AUM and per share data) | | | 2015 | | | | | 2014 | | | %D | | | |
| | | | | | | | | | | | | | | |
AUM - end of period (in millions) | | $ | 46,540 | | | | $ | 47,555 | | | | (2.1 | % | ) | |
AUM - average (in millions) | | | 46,772 | | | | | 46,967 | | | | (0.4 | ) | | |
| | | | | | | | | | | | | | | | |
| Revenues | | | 103,845 | | | | | 104,477 | | | | (0.6 | ) | | |
| | | | | | | | | | | | | | | | |
| Operating income before management fee (a) | | | 38,382 | | (b) | | | 41,227 | | | | (6.9 | ) | | |
| Operating margin before management fee | | | 37.0 | % | | | | 39.5 | % | | | | | | |
| | | | | | | | | | | | | | | | |
| Operating income | | | 33,945 | | (b) | | | 36,499 | | | | (7.0 | ) | | |
| Operating margin | | | 32.7 | % | | | | 34.9 | % | | | | | | |
| | | | | | | | | | | | | | | | |
| Other income/(expense), net | | | 5,993 | | | | | 6,093 | | | | | | | |
| | | | | | | | | | | | | | | | |
| Income before income taxes | | | 39,938 | | | | | 42,592 | | | | (6.2 | ) | | |
| Effective tax rate | | | 38.0 | % | | | | 34.3 | % | | | | | | |
| | | | | | | | | | | | | | | | |
| Net income | | | 24,776 | | | | | 27,954 | | | | (11.4 | ) | | |
| | | | | | | | | | | | | | | | |
| Net income per share | | $ | 0.97 | | | | $ | 1.09 | | | | (11.0 | % | ) | |
| | | | | | | | | | | | | | | | |
| Shares outstanding at March 31 | | | 25,810 | | | | | 25,985 | | | | | | | |
(a) See GAAP to non-GAAP reconciliation on page 9.
(b) First quarter 2015 includes $2.5 million of incremental costs as compared to first quarter 2014: $1.0 million for the launch of new closed-end fund; $0.9 million for potential
firm restructuring; and $0.6 million in non-cash RSA expense.
Assets Under Management
| | | | | | | | | | | | % Change From | |
| | | March 31, | | | December 31, | | | March 31, | | | December 31, | | | March 31, | |
| | | 2015 | | | 2014 | | | 2014 | | | 2014 | | | 2014 | |
| Equities: | | | | | | | | | | | | | | | |
| Open-end Funds | | $ | 16,643 | | | $ | 17,684 | | | $ | 17,531 | | | | (5.9 | %) | | | (5.1 | %) |
| Closed-end Funds | | | 7,071 | | | | 6,949 | | | | 6,967 | | | | 1.8 | | | | 1.5 | |
| Institutional & PWM - direct | | | 16,407 | | | | 16,597 | | | | 16,403 | | | | (1.1 | ) | | | 0.0 | |
| Institutional & PWM - sub-advisory | | | 3,814 | | | | 3,704 | | | | 3,822 | | | | 3.0 | | | | (0.2 | ) |
| Investment Partnerships | | | 928 | | | | 905 | | | | 865 | | | | 2.5 | | | | 7.3 | |
| SICAV (a) | | | 105 | | | | 135 | | | | 91 | | | | (22.2 | ) | | | 15.4 | |
| Total Equities | | | 44,968 | | | | 45,974 | | | | 45,679 | | | | (2.2 | ) | | | (1.6 | ) |
| Fixed Income: | | | | | | | | | | | | | | | | | | | | |
| Money-Market Fund | | | 1,520 | | | | 1,455 | | | | 1,812 | | | | 4.5 | | | | (16.1 | ) |
| Institutional & PWM | | | 52 | | | | 58 | | | | 64 | | | | (10.3 | ) | | | (18.8 | ) |
| Total Fixed Income | | | 1,572 | | | | 1,513 | | | | 1,876 | | | | 3.9 | | | | (16.2 | ) |
| Total Assets Under Management | | $ | 46,540 | | | $ | 47,487 | | | $ | 47,555 | | | | (2.0 | ) | | | (2.1 | ) |
| | | | | | | | | | | | | | | | | | | | | |
(a) Includes $40 million, $71 million and $88 million of seed capital at March 31, 2015, December 31, 2014 and March 31, 2014, respectively.
Our first quarter 2015 decrease in AUM was due to net outflows of $1.4 billion and open- and closed-end fund net distributions of $143 million partially offset by market appreciation of $604 million.
Revenues
| - | Total revenues for the first quarter of 2015 were $103.8 million, down 0.6% from $104.5 million in the prior year reflecting lower fees earned in distribution and other income partially offset by an increase in investment advisory and institutional research services. |
| - | Investment advisory fees increased to $88.0 million in the first quarter of 2015 from $87.8 million in the comparable 2014 quarter. Revenues in our investment partnerships and closed-end funds rose on higher levels of average AUM which were partially offset by a decline of average AUM in our open-end funds and lower billable assets in our institutional and private wealth management accounts. |
| - | Incentive fees earned were $0.5 million during the 2015 quarter, slightly ahead of the $0.4 million reported in the first quarter of 2014. |
| - | Distribution fees from our open-end equity mutual funds and other income were $13.7 million for the first quarter 2015, a decrease of $1.2 million, or 7.6%, from $14.9 million in the prior year quarter. Driving this decrease is a shift to Class I shares, typically available to institutional investors and retirement plan participants, for which we do not collect a distribution fee. Average AUM in other classes of open-end equity funds, for which we do collect a distribution fee, declined 8.3% quarter over quarter. |
| - | Our institutional research services revenues were $2.1 million in the first quarter 2015, rising 14.3% from $1.8 million in the prior year period. |
Operating Income – First Quarter
Operating income, which is net of management fee expense decreased 7.0%, or $2.6 million, to $33.9 million in the first quarter of 2015 versus $36.5 million in the prior year period. The first quarter of 2015 was impacted by $2.5 million of incremental costs: $1.0 million of costs incurred to launch a new London Stock Exchange closed-end fund; $0.9 million related to a potential firm restructuring; and $0.6 million in incremental non-cash expenses related to RSAs issued subsequent to the first quarter of 2014. The 2014 quarter also benefitted from $0.4 million in insurance reimbursements for expenses incurred and reported in prior years. Excluding those costs identified above, adjusted operating income was $36.4 million in the first quarter of 2015, an increase of $0.3 million, from the $36.1 million in the first quarter of 2014. Management fee expense, which is entirely variable, is based on pre-tax income.
Operating income before management fee was $38.4 million in the first quarter 2015 versus $41.2 million in the first quarter 2014. Operating margin before management fee was 37.0% versus 39.5% in the first quarter of 2014. Excluding those costs identified above, adjusted operating income before management fee was $40.8 million in both the first quarters of 2015 and 2014. Operating margins, before management fee and adjusted for those items identified above, increased to 39.3% versus 39.0% in the first quarter of 2014. Management believes evaluating operating income before management fee is an important measure in analyzing the Company’s operating results. Further information regarding Non-GAAP measures is included in Notes on Non-GAAP Financial Measures and Table III included elsewhere herein.
Other income (expense)
We recognized other income of $6.0 million in the 2015 quarter versus $6.1 million in the first quarter of 2014. Investment gains were $7.0 million in the 2015 quarter versus $6.9 million in the 2014 quarter. Dividend and interest income remained the same at $1.1 million in the 2015 and 2014 quarters.
Income Taxes
The firm’s effective tax rate (“ETR”) for the quarter ended March 31, 2015 was 38.0% versus 34.3% for the quarter ended March 31, 2014 and 37.3% for the full year 2014. The first quarter 2014 ETR reflected a benefit related to donated appreciated securities which did not occur in the 2015 quarter.
Business and Investment Highlights
| - | On February 19, 2015, we completed the offering of The Gabelli Value Plus+ Trust (the “Trust”), a London Stock Exchange listed closed-end fund, raising over £100 million. The Trust is the firm’s first direct closed-end fund in the U.K. investment community. The Trust invests in U.S. equities. |
| - | During the first quarter, G.research, Inc. hosted several conferences, including our 25th annual Pump, Valve & Motor Symposium, our 9th Annual Omaha Research Trip, our 6th Annual Specialty Chemicals Conference and our inaugural Waste & Environmental Services Symposium. |
| - | On April 10, 2015, we announced that our Board of Directors approved the next step in the process of splitting the Company into two separate public companies. |
| - | The GAMCO Global Growth Fund (GGGIX) received top honors from Lipper in the Global Large-Cap Growth Fund category for the second year in a row for its three-year and five-year risk-adjusted returns. |
Balance Sheet
We ended the quarter with cash and investments, excluding noncontrolling interests, of $710.0 million, debt of $109.9 million ($110.4 million face value) and equity attributable to GAMCO shareholders of $546.6 million. We renewed our universal shelf registration for $500 million which will expire in May 2018. Together with earnings from operations, the shelf provides us with flexibility to do acquisitions, lift-outs, seed new investment strategies, and co-invest, as well as to fund shareholder compensation, including share repurchases and dividends.
Shareholder Compensation
During the quarter ended March 31, 2015, we returned $5.0 million of our earnings to shareholders through dividends and stock repurchases. We repurchased 41,393 shares at an average price of $77.19 per share, for a total investment of $3.2 million and distributed $1.8 million in dividends. Since our IPO, in February 1999, we have returned nearly $885 million in total to shareholders of which $481 million was in the form of dividends and $404 million was through stock buybacks of 9,167,418 shares at an average investment of $44.07 per share.
On May 5, 2015, GAMCO’s Board of Directors declared a regular quarterly dividend of $0.07 per share payable on June 30, 2015 to its Class A and Class B shareholders of record on June 16, 2015.
About GAMCO Investors, Inc.
GAMCO Investors, Inc., through its subsidiaries, manages private advisory accounts (GAMCO Asset Management Inc.), mutual funds and closed-end funds (Gabelli Funds, LLC), and partnerships and offshore funds (Gabelli Securities, Inc.).
NOTES ON NON-GAAP FINANCIAL MEASURES
| A. | Operating income before management fee expense is used by management to evaluate its business operations. We believe this measure is useful in illustrating the operating results of GAMCO Investors, Inc. (the “Company”) as management fee expense is based on pre-tax income before management fee expense, which includes non-operating items including investment gains and losses from the Company’s proprietary investment portfolio and interest expense. The reconciliation of operating income before management fee expense to operating income is provided in Table III. |
| B. | Operating income before management fee expense per share and other income/(expense), net per share are used by management for purposes of evaluating its business operations. We believe these measures are useful in comparing the operating and non-operating results of the Company for the purposes of understanding the composition of net income per fully diluted share. The swings in other income/(expense), net of ($0.02) per fully diluted share for the quarter was derived by making certain necessary adjustments, as shown in the table below, to arrive at a net impact for each period and then calculating the difference. The reconciliation of operating income before management fee expense per share and other income/(expense), net per share to net income per fully diluted share, is provided below. |
| | | 1st Quarter | |
| | | 2015 | | | 2014 | |
| Operating income before management fee | | $ | 38,382 | | | $ | 41,227 | |
| Management fee expense | | | (3,838 | ) | | | (4,119 | ) |
| Tax expense | | | (13,129 | ) | | | (12,734 | ) |
| Noncontrolling interest expense | | | 61 | | | | 117 | |
| Operating income (after management fee and taxes) | | | 21,476 | | | | 24,491 | |
| Per fully diluted share | | $ | 0.85 | | | $ | 0.95 | |
| | | | | | | | | |
| Other income, net | | $ | 5,993 | | | $ | 6,093 | |
| Management fee expense | | | (599 | ) | | | (609 | ) |
| Tax expense | | | (2,050 | ) | | | (1,882 | ) |
| Noncontrolling interest (expense)/benefit | | | (44 | ) | | | (139 | ) |
| Other income, net (after management fee and taxes) | | $ | 3,300 | | | $ | 3,463 | |
| Per fully diluted share | | $ | 0.12 | | | $ | 0.14 | |
| | | | | | | | | |
| Net income per fully diluted share | | $ | 0.97 | | | $ | 1.09 | |
| Diluted weighted average shares outstanding | | | 25,414 | | | | 25,684 | |
| | | | | | | | | |
| C. | Adjusted operating income and adjusted operating income before management fee expense is used by management to evaluate its ongoing business operations. We believe this measure is useful in evaluating the ongoing operating results of the Company absent any of these adjustments. |
| | | | 1st Quarter | |
| | | | 2015 | | | 2014 | |
| Operating income | | $ | 33,945 | | | $ | 36,499 | |
| Adjustments: | | | | | | | | |
| Add back: | Incremental RSA expense | | | 577 | | | | - | |
| Costs to launch Closed-end fund | | | 1,000 | | | | - | |
| Costs related to firm restructuring | | | 850 | | | | - | |
| Deduct: | Reimbursement of prior year expense | | | - | | | | (438 | ) |
| Adjusted operating income | | | 36,372 | | | | 36,061 | |
| Adjusted operating margin | | | 35.0 | % | | | 34.5 | % |
| | | | | | | | | | |
| | | | 1st Quarter | |
| | | | 2015 | | | 2014 | |
| Operating income before management fee | | $ | 38,382 | | | $ | 41,227 | |
| Adjustments: | | | | | | | | |
| Add back: | Incremental RSA expense | | | 577 | | | | - | |
| Costs to launch Closed-end fund | | | 1,000 | | | | - | |
| Costs related to firm restructuring | | | 850 | | | | - | |
| Deduct: | Reimbursement of prior year expense | | | - | | | | (438 | ) |
| Adjusted operating income before management fee | | | 40,809 | | | | 40,789 | |
| Adjusted operating margin before management fee | | | 39.3 | % | | | 39.0 | % |
| | | | | | | | | | |
| The Company reported Assets Under Management as follows (in millions): | | | | | | | |
| | | | | | | | | | | | | | | | |
| Table I: Fund Flows - 1st Quarter 2015 | | | | | | | | | | | | | |
| | | | | | | | | | | | Fund | | | | |
| | | | | | Market | | | | | | distributions, | | | | |
| | | December 31, | | | appreciation/ | | | Net cash | | | net of | | | March 31, | |
| | | 2014 | | | (depreciation) | | | flows | | | reinvestments | | | 2015 | |
| Equities: | | | | | | | | | | | | | | | |
| Open-end Funds | | $ | 17,684 | | | $ | 185 | | | $ | (1,199 | ) | | $ | (27 | ) | | $ | 16,643 | |
| Closed-end Funds | | | 6,949 | | | | 93 | | | | 145 | | | | (116 | ) | | | 7,071 | |
| Institutional & PWM - direct | | | 16,597 | | | | 140 | | | | (330 | ) | | | - | | | | 16,407 | |
| Institutional & PWM - sub-advisory | | | 3,704 | | | | 172 | | | | (62 | ) | | | - | | | | 3,814 | |
| Investment Partnerships | | | 905 | | | | 19 | | | | 4 | | | | - | | | | 928 | |
| SICAV (a) | | | 135 | | | | (5 | ) | | | (25 | ) | | | - | | | | 105 | |
| Total Equities | | | 45,974 | | | | 604 | | | | (1,467 | ) | | | (143 | ) | | | 44,968 | |
| Fixed Income: | | | | | | | | | | | | | | | | | | | | |
| Money-Market Fund | | | 1,455 | | | | - | | | | 65 | | | | - | | | | 1,520 | |
| Institutional & PWM | | | 58 | | | | - | | | | (6 | ) | | | - | | | | 52 | |
| Total Fixed Income | | | 1,513 | | | | - | | | | 59 | | | | - | | | | 1,572 | |
| Total Assets Under Management | | $ | 47,487 | | | $ | 604 | | | $ | (1,408 | ) | | $ | (143 | ) | | $ | 46,540 | |
| | | | | | | | | | | | | | | | | | | | | |
(a) Includes $40 million, $71 million and $88 million of seed capital at March 31, 2015, December 31, 2014 and March 31, 2014, respectively.
| Table II | | | | | | | | | |
| | | | | | | | | | |
| GAMCO INVESTORS, INC. | |
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME | | | | |
| (Dollars in thousands, except per share data) | |
| | | | | | | | | | |
| | | For the Quarter Ended March 31, | |
| | | | | | | | | % Inc. | |
| | | 2015 | | | 2014 | | | (Dec.) | |
| | | | | | | | | | |
| Investment advisory and incentive fees | | $ | 88,037 | | | $ | 87,797 | | | | 0.3 | % |
| Distribution fees and other income | | | 13,743 | | | | 14,873 | | | | (7.6 | ) |
| Institutional research services | | | 2,065 | | | | 1,807 | | | | 14.3 | |
| Total revenues | | | 103,845 | | | | 104,477 | | | | (0.6 | ) |
| | | | | | | | | | | | | |
| Compensation costs | | | 44,494 | | | | 43,897 | | | | 1.4 | |
| Distribution costs | | | 14,283 | | | | 13,963 | | | | 2.3 | |
| Other operating expenses | | | 6,686 | | | | 5,390 | | | | 24.0 | |
| Total expenses | | | 65,463 | | | | 63,250 | | | | 3.5 | |
| | | | | | | | | | | | | |
| Operating income before management fee | | | 38,382 | | | | 41,227 | | | | (6.9 | ) |
| | | | | | | | | | | | | |
| Investment income | | | 8,012 | | | | 8,085 | | | | | |
| Interest expense | | | (2,019 | ) | | | (1,992 | ) | | | | |
| Other income, net | | | 5,993 | | | | 6,093 | | | | | |
| | | | | | | | | | | | | |
| Income before management fee and income taxes | | | 44,375 | | | | 47,320 | | | | (6.2 | ) |
| Management fee expense | | | 4,437 | | | | 4,728 | | | | | |
| Income before income taxes | | | 39,938 | | | | 42,592 | | | | (6.2 | ) |
| Income tax expense | | | 15,179 | | | | 14,616 | | | | | |
| Net income | | | 24,759 | | | | 27,976 | | | | (11.5 | ) |
| Net income (loss) attributable to noncontrolling interests | | | (17 | ) | | | 22 | | | | | |
| Net income attributable to GAMCO Investors, Inc. | | $ | 24,776 | | | $ | 27,954 | | | | (11.4 | ) |
| | | | | | | | | | | | | |
| Net income per share attributable to GAMCO Investors, Inc.: | | | | | | | | | | | | |
| Basic | | $ | 0.99 | | | $ | 1.10 | | | | (10.0 | ) |
| | | | | | | | | | | | | |
| Diluted | | $ | 0.97 | | | $ | 1.09 | | | | (11.0 | ) |
| | | | | | | | | | | | | |
| Weighted average shares outstanding: | | | | | | | | | | | | |
| Basic | | | 25,132 | | | | 25,481 | | | | (1.4 | ) |
| | | | | | | | | | | | | |
| Diluted | | | 25,414 | | | | 25,684 | | | | (1.1 | ) |
| | | | | | | | | | | | | |
| Actual shares outstanding (a) | | | 25,810 | | | | 25,985 | | | | (0.7 | ) |
| | | | | | | | | | | | | |
| Notes: | | | | | | | | | | | | |
| (a) Includes 707,050 and 566,850 of RSAs, respectively. | | | | | | | | | | | | |
| See GAAP to non-GAAP reconciliation on page 9. | | | | | | | | | | | | |
| Table III | | | | | | | | | | | | | | | | | | |
| GAMCO INVESTORS, INC. | |
| UNAUDITED QUARTERLY CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |
| (Dollars in thousands, except per share data) | |
| | | | | | | | | | | | | | | | | | | |
| | | 2015 | | | 2014 | |
| | | 1st | | | 1st | | | 2nd | | | 3rd | | | 4th | | | | |
| | | Quarter | | | Quarter | | | Quarter | | | Quarter | | | Quarter | | | Full Year | |
| Income Statement Data: | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Revenues | | $ | 103,845 | | | $ | 104,477 | | | $ | 108,296 | | | $ | 110,858 | | | $ | 116,751 | | | $ | 440,382 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Expenses | | | 65,463 | | | | 63,250 | | | | 65,615 | | | | 63,516 | | | | 69,848 | | | | 262,229 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating income before | | | | | | | | | | | | | | | | | | | | | | | | |
| management fee | | | 38,382 | | | | 41,227 | | | | 42,681 | | | | 47,342 | | | | 46,903 | | | | 178,153 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment income/(loss) | | | 8,012 | | | | 8,085 | | | | 11,076 | | | | (8,002 | ) | | | 5,119 | | | | 16,278 | |
| Interest expense | | | (2,019 | ) | | | (1,992 | ) | | | (2,021 | ) | | | (1,987 | ) | | | (2,049 | ) | | | (8,049 | ) |
| Shareholder-designated contribution | | | - | | | | - | | | | (134 | ) | | | - | | | | - | | | | (134 | ) |
| Other income/(expense), net | | | 5,993 | | | | 6,093 | | | | 8,921 | | | | (9,989 | ) | | | 3,070 | | | | 8,095 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Income before management | | | | | | | | | | | | | | | | | | | | | | | | |
| fee and income taxes | | | 44,375 | | | | 47,320 | | | | 51,602 | | | | 37,353 | | | | 49,973 | | | | 186,248 | |
| Management fee expense | | | 4,437 | | | | 4,728 | | | | 5,144 | | | | 3,756 | | | | 4,999 | | | | 18,627 | |
| Income before income taxes | | | 39,938 | | | | 42,592 | | | | 46,458 | | | | 33,597 | | | | 44,974 | | | | 167,621 | |
| Income tax expense | | | 15,179 | | | | 14,616 | | | | 17,135 | | | | 13,045 | | | | 17,709 | | | | 62,505 | |
| Net income | | | 24,759 | | | | 27,976 | | | | 29,323 | | | | 20,552 | | | | 27,265 | | | | 105,116 | |
| Net income/(loss) attributable | | | | | | | | | | | | | | | | | | | | | | | | |
| to noncontrolling interests | | | (17 | ) | | | 22 | | | | 373 | | | | (3,113 | ) | | | (1,556 | ) | | | (4,274 | ) |
| Net income attributable to | | | | | | | | | | | | | | | | | | | | | | | | |
| GAMCO Investors, Inc. | | $ | 24,776 | | | $ | 27,954 | | | $ | 28,950 | | | $ | 23,665 | | | $ | 28,821 | | | $ | 109,390 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net income per share | | | | | | | | | | | | | | | | | | | | | | | | |
| attributable to GAMCO | | | | | | | | | | | | | | | | | | | | | | | | |
| Investors, Inc.: | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.99 | | | $ | 1.10 | | | $ | 1.14 | | | $ | 0.94 | | | $ | 1.14 | | | $ | 4.32 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Diluted | | $ | 0.97 | | | $ | 1.09 | | | $ | 1.13 | | | $ | 0.93 | | | $ | 1.13 | | | $ | 4.28 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding: | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic | | | 25,132 | | | | 25,481 | | | | 25,381 | | | | 25,296 | | | | 25,184 | | | | 25,335 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Diluted | | | 25,414 | | | | 25,684 | | | | 25,586 | | | | 25,517 | | | | 25,449 | | | | 25,558 | |
| Reconciliation of non-GAAP | | | | | | | | | | | | | | | | | | | | | | | | |
| financial measures to GAAP: | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating income before | | | | | | | | | | | | | | | | | | | | | | | | |
| management fee | | | 38,382 | | | | 41,227 | | | | 42,681 | | | | 47,342 | | | | 46,903 | | | | 178,153 | |
| Deduct: management fee expense | | | 4,437 | | | | 4,728 | | | | 5,144 | | | | 3,756 | | | | 4,999 | | | | 18,627 | |
| Operating income | | $ | 33,945 | | | $ | 36,499 | | | $ | 37,537 | | | $ | 43,586 | | | $ | 41,904 | | | $ | 159,526 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating margin before | | | | | | | | | | | | | | | | | | | | | | | | |
| management fee | | | 37.0 | % | | | 39.5 | % | | | 39.4 | % | | | 42.7 | % | | | 40.2 | % | | | 40.5 | % |
| Operating margin after | | | | | | | | | | | | | | | | | | | | | | | | |
| management fee | | | 32.7 | % | | | 34.9 | % | | | 34.7 | % | | | 39.3 | % | | | 35.9 | % | | | 36.2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Table IV | | | | | | | | | |
| GAMCO INVESTORS, INC. | |
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | |
| (Dollars in thousands, except per share data) | |
| | | | | | | | | | |
| | | March 31, | | | December 31, | | | March 31, | |
| | | 2015 | | | 2014 | | | 2014 | |
| | | | | | | | | | |
| ASSETS | | | | | | | | | |
| | | | | | | | | | |
| Cash and cash equivalents | | $ | 331,634 | | | $ | 298,224 | | | $ | 243,142 | |
| Investments (a) | | | 386,562 | | | | 406,711 | | | | 382,696 | |
| Receivable from brokers | | | 21,615 | | | | 76,079 | | | | 54,084 | |
| Other receivables | | | 41,231 | | | | 67,228 | | | | 41,650 | |
| Income tax receivable | | | 2,443 | | | | 2,477 | | | | 445 | |
| Other assets | | | 16,422 | | | | 15,711 | | | | 17,803 | |
| | | | | | | | | | | | | |
| Total assets | | $ | 799,907 | | | $ | 866,430 | | | $ | 739,820 | |
| | | | | | | | | | | | | |
| LIABILITIES AND EQUITY | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Payable to brokers | | $ | 10,174 | | | $ | 43,409 | | | $ | 11,370 | |
| Income taxes payable and deferred tax liabilities | | | 32,830 | | | | 27,939 | | | | 41,427 | |
| Compensation payable | | | 43,394 | | | | 39,983 | | | | 41,447 | |
| Securities sold short, not yet purchased | | | 8,569 | | | | 10,595 | | | | 10,788 | |
| Accrued expenses and other liabilities | | | 40,150 | | | | 36,212 | | | | 37,303 | |
| Sub-total | | | 135,117 | | | | 158,138 | | | | 142,335 | |
| | | | | | | | | | | | | |
| 5.875% Senior notes (due June 1, 2021) | | | 100,000 | | | | 100,000 | | | | 100,000 | |
| 0% Subordinated Debentures (due December 31, 2015) (b) | | | 9,936 | | | | 12,163 | | | | 12,098 | |
| Total debt | | | 109,936 | | | | 112,163 | | | | 112,098 | |
| Total liabilities | | | 245,053 | | | | 270,301 | | | | 254,433 | |
| | | | | | | | | | | | | |
| Redeemable noncontrolling interests | | | 5,519 | | | | 68,334 | | | | 8,464 | |
| | | | | | | | | | | | | |
| GAMCO Investors, Inc.'s stockholders' equity | | | 546,609 | | | | 525,061 | | | | 474,112 | |
| Noncontrolling interests | | | 2,726 | | | | 2,734 | | | | 2,811 | |
| Total equity | | | 549,335 | | | | 527,795 | | | | 476,923 | |
| | | | | | | | | | | | | |
| Total liabilities and equity | | $ | 799,907 | | | $ | 866,430 | | | $ | 739,820 | |
| | | | | | | | | | | | | |
| (a) Includes investments in sponsored registered investment companies of $120.8 million, $39.5 million and $42.4 million, respectively. | |
| (b) The 0% Subordinated Debentures due December 31, 2015 have a face value of $10.4 million, $13.1 million and $13.8 million, respectively. | |
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
The financial results set forth in this press release are preliminary. Our disclosure and analysis in this press release, which do not present historical information, contain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements convey our current expectations or forecasts of future events. You can identify these statements because they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning. They also appear in any discussion of future operating or financial performance. In particular, these include statements relating to future actions, future performance of our products, expenses, the outcome of any legal proceedings, and financial results. Although we believe that we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know about our business and operations, the economy and other conditions, there can be no assurance that our actual results will not differ materially from what we expect or believe. Therefore, you should proceed with caution in relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance.
Forward-looking statements involve a number of known and unknown risks, uncertainties and other important factors, some of which are listed below, that are difficult to predict and could cause actual results and outcomes to differ materially from any future results or outcomes expressed or implied by such forward-looking statements. Some of the factors that could cause our actual results to differ from our expectations or beliefs include a decline in the securities markets that adversely affect our assets under management, negative performance of our products, the failure to perform as required under our investment management agreements, a general downturn in the economy that negatively impacts our operations. We also direct your attention to the more specific discussions of these and other risks, uncertainties and other important factors contained in our Form 10-K and other public filings. Other factors that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We do not undertake to update publicly any forward-looking statements if we subsequently learn that we are unlikely to achieve our expectations whether as a result of new information, future developments or otherwise, except as may be required by law.
