PZENA INVESTMENT MANAGEMENT, INC. REPORTS RESULTS
FOR THE FOURTH QUARTER AND FULL YEAR 2012
· | 2012 revenue was $19.3 million for the fourth quarter and $76.3 million for the full year. |
· | 2012 operating income was $9.5 million for the fourth quarter and $37.2 million for the full year. |
· | 2012 GAAP diluted earnings per share was $0.08 for the fourth quarter and $0.32 for the full year. For the same periods, non-GAAP diluted earnings per share was $0.08 and $0.31, respectively. |
· | Declared a year-end dividend of $0.16 per share - in line with the targeted cash dividend ratio of 70% to 80% of non-GAAP net income. |
NEW YORK, NEW YORK, February 12, 2013 – Pzena Investment Management, Inc. (NYSE: PZN) reported the following U.S. GAAP (U.S. Generally Accepted Accounting Principles) and non-GAAP basic and diluted net income and earnings per share for the three and twelve months ended December 31, 2012 and 2011 (in thousands, except per-share amounts):
GAAP Basis | Non-GAAP Basis | |||||||||||||||
For the Three Months Ended | For the Three Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
(unaudited) | ||||||||||||||||
Basic Net Income | $ | 956 | $ | 369 | $ | 891 | $ | 854 | ||||||||
Basic Earnings Per Share | $ | 0.09 | $ | 0.03 | $ | 0.08 | $ | 0.08 | ||||||||
Diluted Net Income | $ | 5,226 | $ | 369 | $ | 5,161 | $ | 5,063 | ||||||||
Diluted Earnings Per Share | $ | 0.08 | $ | 0.03 | $ | 0.08 | $ | 0.08 | ||||||||
GAAP Basis | Non-GAAP Basis | |||||||||||||||
For the Twelve Months Ended | For the Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
(unaudited) | ||||||||||||||||
Basic Net Income | $ | 3,840 | $ | 3,382 | $ | 3,419 | $ | 3,611 | ||||||||
Basic Earnings Per Share | $ | 0.36 | $ | 0.34 | $ | 0.32 | $ | 0.36 | ||||||||
Diluted Net Income | $ | 20,821 | $ | 20,631 | $ | 20,399 | $ | 23,156 | ||||||||
Diluted Earnings Per Share | $ | 0.32 | $ | 0.32 | $ | 0.31 | $ | 0.36 |
The results for the three and twelve months ended December 31, 2012 and 2011 include recurring adjustments related to the Company’s tax receivable agreement and the associated liability to its selling and converting shareholders, in addition to the adjustments related to certain one-time charges recognized in operating expense in the fourth quarter of 2011. Management believes that these accounting adjustments add a measure of non-operational complexity which obscures the underlying performance of the business. In evaluating the financial condition and results of operations, management also reviews non-GAAP measures of earnings, which exclude these items. Excluding these adjustments, non-GAAP diluted net income and non-GAAP diluted earnings per share were $5.2 million and $0.08, respectively, for the three months ended December 31, 2012, and $5.1 million and $0.08, respectively, for the three months ended December 31, 2011. Non-GAAP diluted net income and non-GAAP diluted earnings per share were $20.4 million and $0.31, respectively, for the twelve months ended December 31, 2012 and $23.2 million and $0.36, respectively, for the twelve months ended December 31, 2011. GAAP and non-GAAP net income for diluted earnings per share generally assume all operating company membership units are converted into Company stock at the beginning of the reporting period, and the resulting change to Company GAAP and non-GAAP net income associated with its increased interest in the operating company is taxed at the Company's effective tax rate, exclusive of the adjustments noted above and other one-time adjustments. When this conversion results in an increase in earnings per share or a decrease in loss per share, diluted net income and diluted earnings per share are assumed to be equal to basic net income and basic earnings per share for the reporting period.
Management uses the non-GAAP measures to assess the strength of the underlying operations of the business. It believes the non-GAAP measures provide information to better analyze the Company's operations between periods and over time. Investors should consider the non-GAAP measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.
Assets Under Management (unaudited) | |||||||||||||||
($ billions) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||
2012 | 2012 | 2011 | 2012 | 2011 | |||||||||||
Institutional Accounts | |||||||||||||||
Assets | |||||||||||||||
Beginning of Period | $ | 11.2 | $ | 10.9 | $ | 10.0 | $ | 11.3 | $ | 12.5 | |||||
Inflows | 0.1 | 0.3 | 0.7 | 0.7 | 2.1 | ||||||||||
Outflows | (0.6 | ) | (0.7 | ) | (0.5 | ) | (2.8 | ) | (2.2 | ) | |||||
Net Flows | (0.5 | ) | (0.4 | ) | 0.2 | (2.1 | ) | (0.1 | ) | ||||||
Market Appreciation/(Depreciation) | 0.5 | 0.7 | 1.1 | 2.0 | (1.1 | ) | |||||||||
End of Period | $ | 11.2 | $ | 11.2 | $ | 11.3 | $ | 11.2 | $ | 11.3 | |||||
Retail Accounts | |||||||||||||||
Assets | |||||||||||||||
Beginning of Period Assets | $ | 5.6 | $ | 2.2 | $ | 2.2 | $ | 2.2 | $ | 3.1 | |||||
Inflows | 0.4 | 3.3 | 0.2 | 4.0 | 0.9 | ||||||||||
Outflows | (0.3 | ) | (0.3 | ) | (0.5 | ) | (1.0 | ) | (1.6 | ) | |||||
Net Flows | 0.1 | 3.0 | (0.3 | ) | 3.0 | (0.7 | ) | ||||||||
Market Appreciation/(Depreciation) | 0.2 | 0.4 | 0.3 | 0.7 | (0.2 | ) | |||||||||
End of Period | $ | 5.9 | $ | 5.6 | $ | 2.2 | $ | 5.9 | $ | 2.2 | |||||
Total | |||||||||||||||
Assets | |||||||||||||||
Beginning of Period | $ | 16.8 | $ | 13.1 | $ | 12.2 | $ | 13.5 | $ | 15.6 | |||||
Inflows | 0.5 | 3.6 | 0.9 | 4.7 | 3.0 | ||||||||||
Outflows | (0.9 | ) | (1.0 | ) | (1.0 | ) | (3.8 | ) | (3.8 | ) | |||||
Net Flows | (0.4 | ) | 2.6 | (0.1 | ) | 0.9 | (0.8 | ) | |||||||
Market Appreciation/(Depreciation) | 0.7 | 1.1 | 1.4 | 2.7 | (1.3 | ) | |||||||||
End of Period | $ | 17.1 | $ | 16.8 | $ | 13.5 | $ | 17.1 | $ | 13.5 | |||||
Financial Discussion
Revenue (unaudited) | ||||||||||||
($ thousands) | ||||||||||||
Three Months Ended | ||||||||||||
December 31, | September 30, | December 31, | ||||||||||
2012 | 2012 | 2011 | ||||||||||
Institutional Accounts | $ | 15,809 | $ | 15,741 | $ | 16,596 | ||||||
Retail Accounts | 3,503 | 3,120 | 2,340 | |||||||||
Total | $ | 19,312 | $ | 18,861 | $ | 18,936 | ||||||
Twelve Months Ended | ||||||||||||
December 31, | December 31, | |||||||||||
2012 | 2011 | |||||||||||
Institutional Accounts | $ | 64,919 | $ | 72,002 | ||||||||
Retail Accounts | 11,361 | 11,043 | ||||||||||
Total | $ | 76,280 | $ | 83,045 |
Revenue was $19.3 million for the fourth quarter of 2012, an increase of 2.0% from $18.9 million for the fourth quarter of 2011, and an increase of 2.4% from $18.9 million for the third quarter of 2012. For the twelve months ended December 31, 2012, revenues were $76.3 million, a decrease of 8.1%, from $83.0 million, for the twelve months ended December 31, 2011.
Average assets under management for the fourth quarter of 2012 was $16.8 billion, an increase of 27.3% from $13.2 billion for the fourth quarter of 2011, and an increase of 13.5% from $14.8 billion for the third quarter of 2012. The increase from the fourth quarter of 2011 and from the third quarter of 2012 was primarily due to the full quarter impact of the large inflow associated with the Company’s assignment to manage 28% of the Vanguard Windsor Fund as of the beginning of August 2012.
The weighted average fee rate was 0.461% for the fourth quarter of 2012, decreasing from 0.573% for the fourth quarter of 2011, and from 0.508% for the third quarter of 2012. The decrease from the fourth quarter of 2011 was primarily due to performance fees recognized during the fourth quarter of 2011 combined with a higher mix of assets in the Company’s retail Large Cap Expanded Value strategy (formerly known as Large Cap Diversified Value) driven by the Vanguard assignment, which carries a lower fee. The full quarter impact of the higher mix of assets in the Company’s retail Large Cap Expanded Value strategy also drove the variance from the third quarter of 2012.
The weighted average fee rate for institutional accounts was 0.569% for the fourth quarter of 2012, decreasing from 0.608% for the fourth quarter of 2011, and decreasing from 0.575% for the third quarter of 2012. The net decrease from the fourth quarter of 2011 was primarily due to performance fees recognized in the fourth quarter of 2011, partially offset by a higher mix of assets in the Company’s Global strategy, which generally carries higher fee rates. The decrease from the third quarter of 2012 was due to the timing of asset flows in our institutional accounts.
The weighted average fee rate for retail accounts was 0.248% for the fourth quarter of 2012, decreasing from 0.407% for the fourth quarter of 2011, and from 0.321% for the third quarter of 2012. The decrease from the fourth quarter of 2011 and from the third quarter of 2012 was primarily due to the full quarter impact of the Vanguard assignment.
Total operating expenses were $9.8 million in the fourth quarter of 2012, decreasing from $14.8 million in the fourth quarter of 2011 and increasing from $9.5 million for the third quarter of 2012. The increase from the third quarter of 2012 was a result of fluctuations in various expense categories and a slight increase in compensation cost. The decrease in quarterly operating expenses year-over-year was primarily due to one-time charges associated with the sublease of excess real estate and a charge related to certain employee departures during the fourth quarter of 2011. A reconciliation of GAAP to non-GAAP operating expenses is shown below:
Operating Expenses (unaudited) | ||||||||||||
($ thousands) | ||||||||||||
Three Months Ended | ||||||||||||
December 31, | September 30, | December 31, | ||||||||||
2012 | 2012 | 2011 | ||||||||||
Compensation and Benefits Expense | $ | 7,881 | $ | 7,689 | $ | 10,190 | ||||||
General and Administrative Expense | 1,963 | 1,764 | 4,654 | |||||||||
GAAP Operating Expenses | 9,844 | 9,453 | 14,844 | |||||||||
One-time Charges | - | - | (4,798 | ) | ||||||||
Non-GAAP Operating Expenses | $ | 9,844 | $ | 9,453 | $ | 10,046 | ||||||
Twelve Months Ended | ||||||||||||
December 31, | December 31, | |||||||||||
2012 | 2011 | |||||||||||
Compensation and Benefits Expense | $ | 31,755 | $ | 34,565 | ||||||||
General and Administrative Expense | 7,346 | 10,626 | ||||||||||
GAAP Operating Expenses | 39,101 | 45,191 | ||||||||||
One-time Charges | - | (4,798 | ) | |||||||||
Non-GAAP Operating Expenses | $ | 39,101 | $ | 40,393 |
As of December 31, 2012, employee headcount was 70, up from 67 at December 31, 2011 and from 68 at September 30, 2012.
The operating margin was 49.0% on a GAAP basis for the fourth quarter of 2012, compared to 21.6% for the fourth quarter of 2011, and 49.9% for the third quarter of 2012. The operating margin was 46.9% on a non-GAAP basis for the fourth quarter of 2011.
Other income/(expense) were income of $0.2 million and $1.5 million for the fourth quarters of 2012 and 2011, respectively, and an expense of $1.2 million for the third quarter of 2012. Other income/(expense) includes the net realized and unrealized gain/(loss) recognized by the Company on its direct investments, as well as those recognized by the Company’s external investors on their investments in investment partnerships that the Company is required to consolidate. A portion of realized and unrealized gain/(loss) associated with the investments of the Company’s outside interests are offset in net income attributable to non-controlling interests. Fourth quarter 2012 other income/(expense) also included an expense of $0.3 million associated with an increase in the Company’s liability to its selling and converting shareholders resulting from changes in the realizability of its related deferred tax asset. Such adjustments generated income of $0.7 million in the fourth quarter of 2011 and an expense of $1.7 million in the third quarter of 2012. Details of other income/(expense), as well as a reconciliation of the related GAAP and non-GAAP measures, are shown below:
Other Income/(Expense) (unaudited) | ||||||||||||
($ thousands) | ||||||||||||
Three Months Ended | ||||||||||||
December 31, | September 30, | December 31, | ||||||||||
2012 | 2012 | 2011 | ||||||||||
Net Interest and Dividend Income | $ | 97 | $ | 94 | $ | 161 | ||||||
Net Realized and Unrealized Gain from Investments | 459 | 395 | 354 | |||||||||
Change in Liability to Selling and Converting Shareholders¹ | (305 | ) | (1,684 | ) | 726 | |||||||
Other Income/ (Expense) | (43 | ) | (44 | ) | 297 | |||||||
GAAP Other Income/ (Expense) | 208 | (1,239 | ) | 1,538 | ||||||||
Change in Liability to Selling and Converting Shareholders¹ | 305 | 1,684 | (726 | ) | ||||||||
Outside Interests of Investment Partnerships² | (291 | ) | (210 | ) | (336 | ) | ||||||
Non-GAAP Other Income, Net of Outside Interests | $ | 222 | $ | 235 | $ | 476 | ||||||
Twelve Months Ended | ||||||||||||
December 31, | December 31, | |||||||||||
2012 | 2011 | |||||||||||
Net Interest and Dividend Income | $ | 318 | $ | 405 | ||||||||
Net Realized and Unrealized Gain/(Loss) from Investments | 1,520 | (355 | ) | |||||||||
Change in Liability to Selling and Converting Shareholders¹ | (2,647 | ) | (1,581 | ) | ||||||||
Other Income/ (Expense) | (54 | ) | 65 | |||||||||
GAAP Other Income/ (Expense) | (863 | ) | (1,466 | ) | ||||||||
Change in Liability to Selling and Converting Shareholders¹ | 2,647 | 1,581 | ||||||||||
Outside Interests of Investment Partnerships² | (854 | ) | 327 | |||||||||
Non-GAAP Other Income, Net of Outside Interests | $ | 930 | $ | 442 | ||||||||
(1) Reflects the change in the liability to the Company’s selling and converting shareholders associated with | ||||||||||||
the deferred tax asset generated by the Company’s initial public offering and subsequent unit conversions. | ||||||||||||
(2) Represents the non-controlling interest allocation of the loss/(income) of the Company's consolidated | ||||||||||||
investment partnerships to its external investors. |
The Company recognized $1.0 million and $1.6 million in income tax expense for the fourth quarters of 2012 and 2011, respectively, and a $0.8 million income tax benefit for the third quarter of 2012. Fourth quarter 2012 income taxes included $0.4 million in income associated with a decrease to the valuation allowance recorded against the Company’s deferred tax asset related to the basis step ups associated with operating company unit exchanges. Such adjustments generated $0.8 million in income tax expense in the fourth quarter of 2011 and $2.1 million in income tax benefit in the third quarter of 2012. Details of the income tax expense/ (benefit), as well as a reconciliation of the related GAAP and non-GAAP measures, are shown below:
Income Tax (Benefit)/Expense (unaudited) | ||||||||||||
($ thousands) | ||||||||||||
Three Months Ended | ||||||||||||
December 31, | September 30, | December 31, | ||||||||||
2012 | 2012 | 2011 | ||||||||||
GAAP Corporate Income Tax Expense | $ | 686 | $ | 654 | $ | 255 | ||||||
Add Back: Effects of One-Time Adjustments¹ | - | - | 333 | |||||||||
Non-GAAP Corporate Income Tax Expense | 686 | 654 | 588 | |||||||||
GAAP Unincorporated Business Tax Expense | 642 | 594 | 555 | |||||||||
Add Back: Effects of One-Time Adjustments¹ | - | - | 5 | |||||||||
Non-GAAP Unincorporated Business Tax Expense | 642 | 594 | 560 | |||||||||
Non-GAAP Income Tax Expense | 1,328 | 1,248 | 1,148 | |||||||||
Change in Valuation Allowance2 | (370 | ) | (2,075 | ) | 768 | |||||||
Less: Effects of One-Time Adjustments¹ | - | - | (338 | ) | ||||||||
GAAP Income Tax Expense/(Benefit) | $ | 958 | $ | (827 | ) | $ | 1,578 | |||||
Twelve Months Ended | ||||||||||||
December 31, | December 31, | |||||||||||
2012 | 2011 | |||||||||||
GAAP Corporate Income Tax Expense | $ | 2,559 | $ | 2,323 | ||||||||
Add Back: Effects of One-Time Adjustments¹ | - | 333 | ||||||||||
Non-GAAP Corporate Income Tax Expense | 2,559 | 2,656 | ||||||||||
GAAP Unincorporated Business Tax Expense | 2,420 | 2,617 | ||||||||||
Add Back: Effects of One-Time Adjustments¹ | - | 5 | ||||||||||
Non-GAAP Unincorporated Business Tax Expense | 2,420 | 2,622 | ||||||||||
Non-GAAP Income Tax Expense | 4,979 | 5,278 | ||||||||||
Change in Valuation Allowance2 | (3,068 | ) | (1,795 | ) | ||||||||
Less: Effects of One-Time Adjustments¹ | - | (338 | ) | |||||||||
GAAP Income Tax Expense/(Benefit) | $ | 1,911 | $ | 3,145 | ||||||||
(1) Reflects the effects of certain one-time charges on income tax expense/(benefit). | ||||||||||||
(2) Reflects the change in the valuation allowance assessed against the deferred tax asset established | ||||||||||||
as part of the Company's initial public offering and subquent unit conversions. |
Details of the non-controlling interests in the operations of the Company’s operating company and consolidated subsidiaries, as well as a reconciliation of the related GAAP and non-GAAP measures, are shown below:
Non-Controlling Interests (unaudited) | ||||||||||||
($ thousands) | ||||||||||||
Three Months Ended | ||||||||||||
December 31, | September 30, | December 31, | ||||||||||
2012 | 2012 | 2011 | ||||||||||
GAAP Operating Company Allocation¹ | $ | 7,471 | $ | 7,523 | $ | 3,347 | ||||||
Add Back: Effects of One-Time Adjustments2 | - | - | 4,017 | |||||||||
Non-GAAP Operating Company Allocation | 7,471 | 7,523 | 7,364 | |||||||||
Outside Interests of Investment Partnerships3 | 291 | 210 | 336 | |||||||||
Non-GAAP Net Income Attributable to Non-Controlling Interests | 7,762 | 7,733 | 7,700 | |||||||||
Less: Effects of One-Time Adjustments2 | - | - | (4,017 | ) | ||||||||
GAAP Net Income Attributable to Non-Controlling Interests | $ | 7,762 | $ | 7,733 | $ | 3,683 | ||||||
Twelve Months Ended | ||||||||||||
December 31, | December 31, | |||||||||||
2012 | 2011 | |||||||||||
GAAP Operating Company Allocation¹ | $ | 29,711 | $ | 30,188 | ||||||||
Add Back: Effects of One-Time Adjustments2 | - | 4,017 | ||||||||||
Non-GAAP Operating Company Allocation | 29,711 | 34,205 | ||||||||||
Outside Interests of Investment Partnerships3 | 854 | (327 | ) | |||||||||
Non-GAAP Net Income Attributable to Non-Controlling Interests | 30,565 | 33,878 | ||||||||||
Less: Effects of One-Time Adjustments2 | - | (4,017 | ) | |||||||||
GAAP Net Income Attributable to Non-Controlling Interests | $ | 30,565 | $ | 29,861 | ||||||||
(1) Reflects the change in the liability to the Company’s selling and converting shareholders associated with | ||||||||||||
the deferred tax asset generated by the Company’s initial public offering and subsequent unit conversions. | ||||||||||||
(2) Represents the effects of certain one-time charges on non-controlling interests. | ||||||||||||
(3) Represents the non-controlling interest allocation of the loss/(income) of the Company's consolidated | ||||||||||||
investment partnerships to its external investors. |
On February 5, 2013, the Company’s Board of Directors approved a quarterly dividend of $0.16 per share of its Class A common stock to be declared on February 12, 2013. The following dates apply to the dividend:
Record Date: February 22, 2013
Payment Date: March 7, 2013
During the last twelve months, inclusive of the dividend noted above, the Company declared total dividends of $0.25 per share of its Class A common stock.
Fourth quarter 2012 Earnings Call Information
Pzena Investment Management, Inc. (NYSE: PZN) will hold a conference call to discuss the Company’s financial results and outlook at 10:00 a.m. ET, Wednesday, February 13, 2013. The call will be open to the public.
Webcast Instructions: To gain access to the webcast, which will be "listen-only," go to the Events page in the Investor Relations area of the Company’s website, www.pzena.com.
Teleconference Instructions: To gain access to the conference call via telephone, U.S./Canada callers should dial 866-700-6067; international callers should dial 617-213-8834. The conference ID number is 70941776.
Replay: The conference call will be available for replay through February 28, 2013, on the web using the information given above.
About Pzena Investment Management
Pzena Investment Management, LLC, the firm’s operating company, is a value-oriented investment management firm. Founded in 1995, Pzena Investment Management has built a diverse, global client base. More firm and stock information is posted at www.pzena.com.
Forward-Looking Statements
This press release may contain, in addition to historical information, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the Company's current assumptions, expectations and projections about future events. Words like “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” and similar expressions are used to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements are necessarily estimates reflecting the best judgment of the Company's management and involve a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed or implied by the forward-looking statements.
Among the factors that could cause actual results to differ from those expressed or implied by a forward-looking statement are those described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K, as filed with the SEC on March 14, 2012 and in the Company’s Quarterly Reports on Form 10-Q as filed with the SEC. In light of these risks, uncertainties, assumptions, and factors, actual results could differ materially from those expressed or implied in the forward-looking statements.
You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this release.
The Company is not under any obligation and does not intend to make publicly available any update or other revisions to any forward-looking statements to reflect circumstances existing after the date of this release or to reflect the occurrence of future events even if experience or future events make it clear that any expected results expressed or implied by those forward-looking statements will not be realized.
Contact: Gary Bachman, 212-355-1600 or bachman@pzena.com
PZENA INVESTMENT MANAGEMENT, INC. | ||||||||
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | ||||||||
(in thousands) | ||||||||
As of | ||||||||
December 31, | December 31, | |||||||
2012 | 2011 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Cash and Cash Equivalents | $ | 32,645 | $ | 35,083 | ||||
Restricted Cash | 1,030 | 1,030 | ||||||
Due from Broker | 22 | 457 | ||||||
Advisory Fees Receivable | 14,626 | 14,717 | ||||||
Investments, at Fair Value | 5,170 | 4,919 | ||||||
Prepaid Expenses and Other Assets | 719 | 808 | ||||||
Deferred Tax Asset, Net of Valuation Allowance | ||||||||
of $59,917 and $61,050, respectively | 9,688 | 8,835 | ||||||
Property and Equipment, Net | ||||||||
of Accumulated Depreciation of | ||||||||
$2,695 and $2,516, respectively | 779 | 829 | ||||||
TOTAL ASSETS | $ | 64,679 | $ | 66,678 | ||||
LIABILITIES AND EQUITY | ||||||||
Liabilities: | ||||||||
Accounts Payable and Accrued Expenses | $ | 4,305 | $ | 6,062 | ||||
Due to Broker | 23 | - | ||||||
Liability to Selling and Converting Shareholders | 9,656 | 11,218 | ||||||
Lease Liability | 1,203 | 1,795 | ||||||
Deferred Compensation Liability | 1,327 | 1,173 | ||||||
Other Liabilities | 199 | 206 | ||||||
TOTAL LIABILITIES | 16,713 | 20,454 | ||||||
Equity: | ||||||||
Total Pzena Investment Management, Inc.'s Equity | 14,569 | 13,937 | ||||||
Non-Controlling Interests | 33,397 | 32,287 | ||||||
TOTAL EQUITY | 47,966 | 46,224 | ||||||
TOTAL LIABILITIES AND EQUITY | $ | 64,679 | $ | 66,678 | ||||
PZENA INVESTMENT MANAGEMENT, INC. | ||||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(in thousands, except share and per-share amounts) | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
REVENUE | $ | 19,312 | $ | 18,936 | $ | 76,280 | $ | 83,045 | ||||||||
EXPENSES | ||||||||||||||||
Compensation and Benefits Expense | 7,881 | 10,190 | 31,755 | 34,565 | ||||||||||||
General and Administrative Expense | 1,963 | 4,654 | 7,346 | 10,626 | ||||||||||||
TOTAL OPERATING EXPENSES | 9,844 | 14,844 | 39,101 | 45,191 | ||||||||||||
Operating Income | 9,468 | 4,092 | 37,179 | 37,854 | ||||||||||||
Other Income/(Expense) | 208 | 1,538 | (863 | ) | (1,466 | ) | ||||||||||
Income Before Taxes | 9,676 | 5,630 | 36,316 | 36,388 | ||||||||||||
Income Tax Expense | 958 | 1,578 | 1,911 | 3,145 | ||||||||||||
Consolidated Net Income | 8,718 | 4,052 | 34,405 | 33,243 | ||||||||||||
Less: Net Income Attributable to Non-Controlling Interests | 7,762 | 3,683 | 30,565 | 29,861 | ||||||||||||
Net Income Attributable to Pzena | ||||||||||||||||
Investment Management, Inc. | $ | 956 | $ | 369 | $ | 3,840 | $ | 3,382 | ||||||||
Earnings per Share - Basic and Diluted Attributable to | ||||||||||||||||
Pzena Investment Management, Inc. Common Stockholders: | ||||||||||||||||
Net Income for Basic Earnings per Share | $ | 956 | $ | 369 | $ | 3,840 | $ | 3,382 | ||||||||
Basic Earnings per Share | $ | 0.09 | $ | 0.03 | $ | 0.36 | $ | 0.34 | ||||||||
Basic Weighted Average Shares Outstanding | 11,224,339 | 10,575,089 | 10,787,540 | 9,972,978 | ||||||||||||
Net Income for Diluted Earnings per Share | $ | 5,226 | $ | 369 | $ | 20,821 | $ | 20,631 | ||||||||
Diluted Earnings per Share | $ | 0.08 | $ | 0.03 | $ | 0.32 | $ | 0.32 | ||||||||
Diluted Weighted Average Shares Outstanding | 65,529,624 | 10,575,089 | 65,491,273 | 65,095,797 |
PZENA INVESTMENT MANAGEMENT, INC. | ||||||||||||||||
UNAUDITED NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(in thousands, except share and per-share amounts) | ||||||||||||||||
Non-GAAP Basis | Non-GAAP Basis | |||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
REVENUE | $ | 19,312 | $ | 18,936 | $ | 76,280 | $ | 83,045 | ||||||||
EXPENSES | ||||||||||||||||
Compensation and Benefits Expense | 7,881 | 8,007 | 31,755 | 32,382 | ||||||||||||
General and Administrative Expense | 1,963 | 2,039 | 7,346 | 8,011 | ||||||||||||
TOTAL OPERATING EXPENSES | 9,844 | 10,046 | 39,101 | 40,393 | ||||||||||||
Operating Income | 9,468 | 8,890 | 37,179 | 42,652 | ||||||||||||
Other Income, Net of Outside Interests | 222 | 476 | 930 | 442 | ||||||||||||
Income Before Taxes and Operating Company Allocation | 9,690 | 9,366 | 38,109 | 43,094 | ||||||||||||
Unincorporated Business Tax Expense | 642 | 560 | 2,420 | 2,622 | ||||||||||||
Allocable Income | 9,048 | 8,806 | 35,689 | 40,472 | ||||||||||||
Operating Company Allocation | 7,471 | 7,364 | 29,711 | 34,205 | ||||||||||||
Income Before Corporate Income Taxes | 1,577 | 1,442 | 5,978 | 6,267 | ||||||||||||
Corporate Income Tax Expense | 686 | 588 | 2,559 | 2,656 | ||||||||||||
Non-GAAP Net Income | $ | 891 | $ | 854 | $ | 3,419 | $ | 3,611 | ||||||||
Effect of One-time Adjustments | - | (443 | ) | - | (443 | ) | ||||||||||
Tax Receivable Agreement Income, Net of Taxes | 65 | (42 | ) | 421 | 214 | |||||||||||
GAAP Net Income | $ | 956 | $ | 369 | $ | 3,840 | $ | 3,382 | ||||||||
Earnings Per Share - Basic and Diluted Attributable to | ||||||||||||||||
Pzena Investment Management, Inc. Common Stockholders: | ||||||||||||||||
Net Income for Basic Earnings per Share | $ | 891 | $ | 854 | $ | 3,419 | $ | 3,611 | ||||||||
Basic Earnings per Share | $ | 0.08 | $ | 0.08 | $ | 0.32 | $ | 0.36 | ||||||||
Basic Weighted Average Shares Outstanding | 11,224,339 | 10,575,089 | 10,787,540 | 9,972,978 | ||||||||||||
Net Income for Diluted Earnings per Share | $ | 5,161 | $ | 5,063 | $ | 20,399 | $ | 23,156 | ||||||||
Diluted Earnings per Share | $ | 0.08 | $ | 0.08 | $ | 0.31 | $ | 0.36 | ||||||||
Diluted Weighted Average Shares Outstanding | 65,529,624 | 64,930,708 | 65,491,273 | 65,095,797 |