Cohen & Steers, Inc. | ![]() | |
280 Park Avenue | ||
New York, NY 10017-1216 | ||
Tel 212.832.3232 |
Contact:
Matthew S. Stadler
Executive Vice President
Chief Financial Officer
Cohen & Steers, Inc.
(212) 446-9168
COHEN & STEERS REPORTS FIRST QUARTER 2006 RESULTS
Asset Management Reports Record Quarterly Revenue
Assets Under Management Reach Record High of $23.0 Billion
NEW YORK, NY, April 26, 2006— Cohen & Steers, Inc. (NYSE: CNS) today reported net income of $8.7 million, or $0.22 per share (diluted and basic) for the quarter ended March 31, 2006, up 23.4% from $7.1 million, or $0.18 per share (diluted and basic) for the quarter ended March 31, 2005. The first quarter 2005 results reflect a $0.03 per share after-tax expense associated with the launch of four mutual funds. Total revenue in the first quarter of 2006 was $37.8 million, up 11.0% from $34.1 million in the first quarter of 2005. Record revenue in the asset management segment was offset by a decline in investment banking results.
Assets Under Management
Assets under management reached a record $23.0 billion at March 31, 2006. This represents an increase of 12.1% from $20.5 billion at December 31, 2005 and an increase of 29.2% from $17.8 billion at March 31, 2005.
Led by global and international real estate securities portfolios, the Company recorded net inflows of $452 million during the quarter ended March 31, 2006. “Our expanded global and international product offerings have been well received by many of our clients,” stated Robert Steers, co-chairman and co-chief executive officer of Cohen & Steers. “Almost ten percent of our assets under management are now made up of global and international portfolios.”
Assets managed by Houlihan Rovers, the Company’s Brussels-based investment manager affiliate, increased 29.3% to $2.0 billion at March 31, 2006, from $1.6 billion at December 31, 2005, and increased 156.3% from $796 million at March 31, 2005. Cohen & Steers assets under management at March 31, 2006, December 31, 2005 and March 31, 2005 included $1.3 billion, $709 million and $148 million, respectively, of assets managed by Houlihan Rovers through sub-advisory and similar arrangements.
Recent Developments
“Our first quarter demonstrates the continued success of our global diversification efforts. We recorded record highs in assets under management and revenue in our asset management business,” said Martin Cohen, co-chairman and co-chief executive officer of Cohen & Steers. “In addition, we took a number of steps to further round out our global and international marketing and investment initiatives:
• | We filed registration statements with the Securities and Exchange Commission for an open-end mutual fund and a closed-end mutual fund, both of which will invest in Asia Pacific real estate securities. |
• | We launched two institutional funds in Australia to invest in global real estate securities. |
• | We are awaiting regulatory approval on a global real estate fund to be added to our Luxembourg-domiciled funds and offered to European investors.” |
Further notable developments for the quarter included:
• | Cohen & Steers International Realty Fund completed its first year of operations, finishing the quarter with net assets of $625 million, the best open-end mutual fund launch in the firm’s history. |
• | Cohen & Steers Realty Focus Fund received, for the second consecutive year, the Lipper three-year performance award for consistent returns in the Real Estate Funds category for the period ended December 31, 2005. |
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• | Cohen & Steers Realty Shares was again selected by MONEY magazine for inclusion in its MONEY 65 list of recommended mutual funds. |
• | On April 10, 2006, the Company agreed to terminate additional compensation agreements entered into in connection with the common share offerings of seven Cohen & Steers closed-end mutual funds. In exchange for the termination of these agreements, the Company made a lump sum payment of $72 million. The payment was funded from the Company’s working capital and will be recorded as a one-time expense in the second quarter of 2006. Termination of these additional compensation agreements will reduce the Company’s future distribution expense, and is expected to result in annualized after-tax earnings accretion of approximately $0.12 to $0.14 per share. |
Asset Management Segment
Total revenue for the asset management segment was $37.5 million for the three months ended March 31, 2006, an increase of 19.5% from $31.4 million for the three months ended March 31, 2005. Pretax income was $14.5 million for the three months ended March 31, 2006, up 26.4% from $11.5 million for the first quarter of 2005. Assets under management reached $23.0 billion at March 31, 2006, an increase of 29.2% from $17.8 billion at March 31, 2005.
The Company recorded net inflows of $219 million into open-end mutual funds during the quarter ended March 31, 2006. This marked the third consecutive quarter of positive flows into open-end mutual funds, and was led by Cohen & Steers International Realty Fund which had net inflows of $266 million.
Institutional separate accounts had net inflows of $179 million during the quarter ended March 31, 2006.
Houlihan Rovers recorded net income of $696,000 during the quarter ended March 31, 2006, compared with $304,000 for the quarter ended March 31, 2005. The Company recorded 50% of Houlihan Rovers’ net income.
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Investment Banking Segment
Total revenue for the investment banking segment was $705,000 for the quarter ended March 31, 2006, compared with $2.9 million for the quarter ended March 31, 2005. The investment banking segment recorded a pre-tax loss of $917,000 for the quarter ended March 31, 2006, compared with pre-tax income of $682,000 for the quarter ended March 31, 2005. Revenue from investment banking activity is dependent on the completion of transactions, the timing of which cannot be predicted.
Conference Call Information
Cohen & Steers will hold a conference call tomorrow, April 27, 2006 at 11:00 a.m. Eastern Time to discuss the Company’s first quarter results. Investors and analysts can access the live conference call by dialing (877) 234-1973 (domestic) and (973) 582-2749 (international); PIN: 7299102. A replay of the call will be available for two weeks starting at approximately 2:00 p.m. (ET) on April 27, 2006 and can be accessed at (877) 519-4471 (domestic) and (973) 341-3080 (international); PIN: 7299102. Internet access to the webcast, which includes audio (listen-only), will be available on the Company’s website at cohenandsteers.com under “Corporate Info.” The webcast will be archived on Cohen & Steers’ website for two weeks. Participants should plan to register at least 10 minutes before the conference call begins.
About Cohen & Steers, Inc.
Cohen & Steers is a manager of high-income equity portfolios, specializing in U.S. REITs, international real estate securities, preferred securities, utilities and large cap value stocks. Headquartered in New York City, the firm serves individual and institutional investors through a wide range of open-end mutual funds, closed-end mutual funds and separate accounts.
Forward-Looking Statements
This press release and other statements that Cohen & Steers may make may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which reflect the Company’s current views with respect to, among other things, its operations and financial performance. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,”
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“should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative versions of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties.
Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. The Company believes that these factors include, but are not limited to, those described in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, which is accessible on the Securities and Exchange Commission’s website at http://www.sec.gov and on Cohen & Steers website at cohenandsteers.com. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
Performance Notes
Cohen & Steers Asia Pacific Realty Fund, Inc.; Cohen & Steers Asia Pacific Realty Shares, Inc. For more complete information about the funds, including charges and expenses, please call (800) 330-7348 for a prospectus. There are special risks associated with an investment in the funds. These risks are described in the prospectus, which you should read carefully before you invest or send money. A registration statement relating to these securities has been filed with the Securities and Exchange Commission, but has not yet become effective. The information in the registration statement is not complete and may be changed. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This communication shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any such state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state.
Cohen & Steers Global (ex-Australia) Listed Property Fund; Cohen & Steers Global Listed Property Fund; Cohen & Steers SIVAC. These funds are intended for non-US investors and are not available to US investors.
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Cohen & Steers International Realty Fund, Inc. As with any investment, the price of the fund’s shares will fluctuate with market conditions and, at the time of sale, may be worth more or less than the original investment.Please consider the investment objectives, risks, charges and expenses of the fund carefully before investing. This and other information about the fund is included in the prospectus. Call 1-800-330-7848 or visit cohenandsteers.com for a prospectus. Please read the prospectus carefully before investing.Cohen & Steers Securities, LLC is the distributor of the fund.
Cohen & Steers Realty Focus Fund, Inc. The highest Lipper Leader for Consistent Return (Effective Return) value within each eligible classification determines the fund classification winner over three, five, or 10 years. Lipper Leader scores for Consistent Return reflect funds’ historical risk-adjusted returns, adjusted for volatility, relative to peers. The scores are subject to change every month and are calculated for the following time periods: three-year, five-year, 10-year, and overall. The overall calculation is based on an equal-weighted average of percentile ranks for the Consistent Return metrics over three-, five-, and 10-year periods (if applicable). The highest 20% of funds in each classification are named Lipper Leaders for Consistent Return, the next 20% receive a score of 2, the middle 20% are scored 3, the next 20% are scored 4, and the lowest 20% are scored 5. For periods ended December 31, 2005, the fund was designated as a Lipper Leader for the three-year period (out of 157 funds in the Real Estate category), five-year period (out of 122 funds in the Real Estate category) and overall (out of 158 funds in the Real Estate category).
Investors are cautioned that some peer groups are inherently more volatile than others, and even Lipper Leaders for Consistent Return in the most volatile groups may not be well suited to shorter-term goals or less risk-tolerant investors.
The fund’s advisor has agreed to waive fees and/or reimburse expenses for the fund. Without this arrangement, returns would have been lower. Because the fund concentrates its investments in real estate securities, there are special risks associated with investing in the fund. These include falling property values due to increasing vacancies or declining rents resulting from economic, legal, or technological developments. In addition, because of the fund’s policy of investing in a limited number of issuers, the fund may be subject to greater risk of loss than a fund that has a more diversified portfolio.
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Period | Cohen & Steers (Class I Shares)* | NAREIT Equity REIT Index | S&P 500 Index | ||||||
1 Year | 14.41 | % | 12.16 | % | 4.93 | % | |||
3 Years | 33.31 | % | 26.51 | % | 14.41 | % | |||
5 Years | 21.64 | % | 19.07 | % | 0.55 | % | |||
Since Inception (5/8/97) | 14.90 | % | 13.17 | % | 6.62 | % |
* | The Lipper award was based on Class I shares, which are subject to a $100,000 minimum investment. Returns for Class A, B and C shares, which were first offered on September 30, 2004, will be lower due to sales charges and differing expenses. |
Performance data quoted represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Total returns for the fund, current to the most recent month-end, can be obtained by visiting cohenandsteers.com. The performance data quoted include change in net asset value and reinvestment of dividends and capital gains.
Cohen & Steers Realty Shares, Inc. Average annual total return performance information (periods ended December 31, 2005) for Cohen & Steers Realty Shares, Inc. is as follows:
One year | Three years | Five years | Ten Years | ||||||
14.89% | 30.00 | % | 19.01 | % | 15.61 | % |
In selecting mutual funds to be included in the Money 65, the following criteria were generally used: (i) funds with at least $100 million in assets; (ii) funds run by the same person or team for at least several years; (iii) funds that were deemed not to have above-average fees or excessive trading; (iv) funds that received at least a certain grade from analysts at Morningstar, Inc.; and (v) funds that performed better than 60% of their peers for the past five years. In cases in which several mutual funds scored closely on these criteria, funds with the lowest expenses and most consistent strategy were generally selected.
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Cohen & Steers, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
For the Periods Ended
(in thousands, except per share data)
Three Months Ended | % Change From | |||||||||||||||||
March 31, 2006 | December 31, 2005 | March 31, 2005 | December 31, 2005 | March 31, 2005 | ||||||||||||||
Revenue | ||||||||||||||||||
Investment advisory and administration fees | $ | 33,006 | $ | 31,463 | $ | 27,320 | ||||||||||||
Distribution and service fee revenue | 3,201 | 3,014 | 2,869 | |||||||||||||||
Portfolio consulting and other | 934 | 730 | 1,029 | |||||||||||||||
Investment banking fees | 705 | 2,205 | 2,889 | |||||||||||||||
Total revenue | 37,846 | 37,412 | 34,107 | 1.2 | % | 11.0 | % | |||||||||||
Expenses | ||||||||||||||||||
Employee compensation and benefits | 10,597 | 8,306 | 8,659 | |||||||||||||||
Distribution and service fee expenses | 7,676 | 7,524 | 6,660 | |||||||||||||||
General and administrative | 5,695 | 6,900 | 5,403 | |||||||||||||||
Depreciation and amortization | 1,551 | 2,139 | 1,375 | |||||||||||||||
Amortization, deferred commissions | 749 | 734 | 989 | |||||||||||||||
Total expenses | 26,268 | 25,603 | 23,086 | 2.6 | % | 13.8 | % | |||||||||||
Operating income | 11,578 | 11,809 | 11,021 | (2.0 | )% | 5.1 | % | |||||||||||
Non-operating income (expense) | ||||||||||||||||||
Interest and dividend income | 1,058 | 1,390 | 551 | |||||||||||||||
Gain from sale of marketable securities | 659 | 558 | 507 | |||||||||||||||
Foreign currency transaction loss | (16 | ) | (22 | ) | (21 | ) | ||||||||||||
Interest expense | (1 | ) | — | (22 | ) | |||||||||||||
Total non-operating income | 1,700 | 1,926 | 1,015 | (11.7 | )% | 67.5 | % | |||||||||||
Income before provision for income taxes and equity in earnings of affiliate | 13,278 | 13,735 | 12,036 | (3.3 | )% | 10.3 | % | |||||||||||
Provision for income taxes | 4,909 | 5,630 | 5,123 | |||||||||||||||
Equity in earnings of affiliate | 348 | 239 | 152 | |||||||||||||||
Net income | $ | 8,717 | $ | 8,344 | $ | 7,065 | 4.5 | % | 23.4 | % | ||||||||
Earnings per share | ||||||||||||||||||
Basic | $ | 0.22 | $ | 0.21 | $ | 0.18 | 4.9 | % | 24.1 | % | ||||||||
Diluted | $ | 0.22 | $ | 0.21 | $ | 0.18 | 4.6 | % | 23.1 | % | ||||||||
Weighted average shares outstanding | ||||||||||||||||||
Basic | 39,803 | 39,982 | 40,022 | |||||||||||||||
Diluted | 40,327 | 40,393 | 40,235 | |||||||||||||||
Certain | prior period amounts have been reclassified to conform with the current period’s presentation. |
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Cohen & Steers, Inc. and Subsidiaries
Selected Segment Financial Data (Unaudited)
For the Periods Ended
(in thousands)
Three Months Ended | % Change From | |||||||||||||||||
March 31, 2006 | December 31, 2005 | March 31, 2005 | December 31, 2005 | March 31, 2005 | ||||||||||||||
Asset Management | ||||||||||||||||||
Total revenue, including equity in earnings of affiliate | $ | 37,489 | $ | 35,446 | $ | 31,370 | 5.8 | % | 19.5 | % | ||||||||
Total expenses | (24,517 | ) | (23,353 | ) | (20,855 | ) | 5.0 | % | 17.6 | % | ||||||||
Net non-operating income | 1,571 | 1,835 | 991 | (14.4 | )% | 58.5 | % | |||||||||||
Income before provision for income taxes | $ | 14,543 | $ | 13,928 | $ | 11,506 | 4.4 | % | 26.4 | % | ||||||||
Investment Banking | ||||||||||||||||||
Total revenue | $ | 705 | $ | 2,205 | $ | 2,889 | (68.0 | )% | (75.6 | )% | ||||||||
Total expenses | (1,751 | ) | (2,250 | ) | (2,231 | ) | (22.2 | )% | (21.5 | )% | ||||||||
Net non-operating income | 129 | 91 | 24 | 41.8 | % | 437.5 | % | |||||||||||
Income (loss) before provision for income taxes | $ | (917 | ) | $ | 46 | $ | 682 | * | * | |||||||||
Total | ||||||||||||||||||
Total revenue, including equity in earnings of affiliate | $ | 38,194 | $ | 37,651 | $ | 34,259 | 1.4 | % | 11.5 | % | ||||||||
Total expenses | (26,268 | ) | (25,603 | ) | (23,086 | ) | 2.6 | % | 13.8 | % | ||||||||
Net non-operating income | 1,700 | 1,926 | 1,015 | (11.7 | )% | 67.5 | % | |||||||||||
Income before provision for income taxes | $ | 13,626 | $ | 13,974 | $ | 12,188 | (2.5 | )% | 11.8 | % | ||||||||
Certain prior period amounts have been reclassified to conform with the current period’s presentation.
* | Not meaningful |
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Cohen & Steers, Inc. and Subsidiaries
Assets Under Management (Unaudited)
For the Periods Ended
(in millions)
Three Months Ended | % Change From | |||||||||||||||||
March 31, 2006 | December 31, 2005 | March 31, 2005 | December 31, 2005 | March 31, 2005 | ||||||||||||||
Closed-End Mutual Funds | ||||||||||||||||||
Assets under management, beginning of period | $ | 9,674 | $ | 10,085 | $ | 8,984 | ||||||||||||
Inflows | 54 | 74 | 605 | |||||||||||||||
Market appreciation (depreciation) | 534 | (485 | ) | (463 | ) | |||||||||||||
Total increase (decrease) | 588 | (411 | ) | 142 | ||||||||||||||
Assets under management, end of period | $ | 10,262 | $ | 9,674 | $ | 9,126 | 6.1 | % | 12.4 | % | ||||||||
Open-End Mutual Funds | ||||||||||||||||||
Assets under management, beginning of period | $ | 5,591 | $ | 5,596 | $ | 5,199 | ||||||||||||
Inflows | 719 | 439 | 418 | |||||||||||||||
Outflows | (500 | ) | (431 | ) | (423 | ) | ||||||||||||
Net inflows (outflows) | 219 | 8 | (5 | ) | ||||||||||||||
Market appreciation (depreciation) | 767 | (13 | ) | (370 | ) | |||||||||||||
Total increase (decrease) | 986 | (5 | ) | (375 | ) | |||||||||||||
Assets under management, end of period | $ | 6,577 | $ | 5,591 | $ | 4,824 | 17.6 | % | 36.3 | % | ||||||||
Institutional Separate Accounts | ||||||||||||||||||
Assets under management, beginning of period | $ | 5,226 | $ | 4,479 | $ | 4,118 | ||||||||||||
Inflows | 405 | 864 | 86 | |||||||||||||||
Outflows | (226 | ) | (179 | ) | (112 | ) | ||||||||||||
Net inflows (outflows) | 179 | 685 | (26 | ) | ||||||||||||||
Market appreciation (depreciation) | 719 | 62 | (264 | ) | ||||||||||||||
Total increase (decrease) | 898 | 747 | (290 | ) | ||||||||||||||
Assets under management, end of period | $ | 6,124 | $ | 5,226 | $ | 3,828 | 17.2 | % | 60.0 | % | ||||||||
Total | ||||||||||||||||||
Assets under management, beginning of period | $ | 20,491 | $ | 20,160 | $ | 18,301 | ||||||||||||
Inflows | 1,178 | 1,377 | 1,109 | |||||||||||||||
Outflows | (726 | ) | (610 | ) | (535 | ) | ||||||||||||
Net inflows | 452 | 767 | 574 | |||||||||||||||
Market appreciation (depreciation) | 2,020 | (436 | ) | (1,097 | ) | |||||||||||||
Total increase (decrease) | 2,472 | 331 | (523 | ) | ||||||||||||||
Assets under management, end of period (1) | $ | 22,963 | $ | 20,491 | $ | 17,778 | 12.1 | % | 29.2 | % | ||||||||
(1) | As of March 31, 2006, December 31, 2005 and March 31, 2005, assets under management included $1.3 billion, $709 million and $148 million, respectively, of assets managed by Houlihan Rovers through sub-advisory and similar arrangements. |
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