Contact: Darrell W. Crate
Affiliated Managers Group, Inc.
(617) 747-3300
AMG REPORTS FINANCIAL AND
OPERATING RESULTS FOR FIRST QUARTER 2002
COMPANY REPORTS CASH EPS FOR FIRST QUARTER OF $1.08
BOSTON, MA, APRIL 24, 2002 - Affiliated Managers Group, Inc. (NYSE: AMG) today
reported its financial and operating results for the quarter ended March 31,
2002.
Cash earnings per share ("Cash EPS") for the first quarter of 2002 were $1.08.
(Cash EPS is the Company's reported EPS figure plus the non-cash charges on a
per share basis for depreciation and amortization and deferred taxes related to
intangible assets which arise from the use of the purchase method of accounting.
The Company considers Cash EPS to be the most meaningful measure of its
financial performance.) Diluted earnings per share for the first quarter of 2002
were $0.63, and net income for the first quarter was $14.5 million. Cash Net
Income (net income plus the non-cash charges for depreciation and amortization
and deferred taxes related to intangible assets) was $24.7 million. These
operating results reflect changes in the accounting for intangible assets as a
result of the implementation of Financial Accounting Standard No. 142 in the
first quarter of 2002, and therefore are not directly comparable to operating
results for the first quarter of 2001. For the first quarter of 2002, revenue
was $119.3 million, compared to $100.5 million for the first quarter of 2001.
EBITDA for the first quarter of 2002 was $35.4 million, compared to $31.3
million for the same period of 2001.
The aggregate net client cash flows from directly managed assets for the first
quarter were approximately $225 million, while outflows of overlay assets were
approximately $444 million. These aggregate net client cash flows for the
quarter resulted in a net increase of approximately $2.0 million to AMG's
annualized EBITDA. The aggregate assets under management of AMG's affiliated
investment management firms at March 31, 2002 were $81.4 billion.
(MORE)
Affiliated Managers Group, Inc. Reports Financial and Operating Results
for First Quarter 2002
April 24, 2002
Page 2 of 6
"We are pleased with our Affiliates' results, particularly in the face of
continued volatility in the equity markets," stated William J. Nutt, Chairman
and Chief Executive Officer. "The breadth and diversity among our Affiliates'
approximately 150 investment products has provided stability to AMG's earnings
and, with our EBITDA generated almost evenly in the high net worth, mutual fund
and institutional distribution channels, we are well positioned for continued
growth. In addition, AMG continues to benefit from our balanced exposure to
value and growth equity investment styles."
"Especially notable were the results of the small- and mid-cap products of our
value-oriented Affiliates, such as Tweedy, Browne, Systematic and Skyline, who
had strong performance and solid cash flows for the quarter," stated Sean M.
Healey, President and Chief Operating Officer. "Our Affiliate Development team
continues to identify opportunities for Affiliates to expand their product
offerings and broaden their distribution. In addition to the successful launch
of our multi-Affiliate diversified portfolios, we are working with a number of
Affiliates on new collective distribution initiatives. Finally, we are pleased
with our progress toward executing investments in additional growing, high
quality mid-sized investment management firms."
AMG is an asset management company with equity investments in a diverse group of
mid-sized investment management firms. AMG's strategy is to generate growth
through the internal growth of its existing Affiliates, as well as through
investments in new Affiliates. AMG's innovative transaction structure allows
individual members of each Affiliate's management team to retain or receive
significant direct equity ownership in their firm while maintaining operating
autonomy. In addition, AMG provides centralized assistance to its Affiliates in
strategic matters, marketing, distribution, product development and operations.
- -------------------------------------------------------------------------------
CERTAIN MATTERS DISCUSSED IN THIS PRESS RELEASE MAY CONSTITUTE FORWARD-LOOKING
STATEMENTS WITHIN THE MEANING OF THE FEDERAL SECURITIES LAWS. ACTUAL RESULTS AND
THE TIMING OF CERTAIN EVENTS COULD DIFFER MATERIALLY FROM THOSE PROJECTED IN OR
CONTEMPLATED BY THE FORWARD-LOOKING STATEMENTS DUE TO A NUMBER OF FACTORS,
INCLUDING CHANGES IN THE SECURITIES OR FINANCIAL MARKETS OR IN GENERAL ECONOMIC
CONDITIONS, THE AVAILABILITY OF EQUITY AND DEBT FINANCING, COMPETITION FOR
ACQUISITIONS OF INTERESTS IN INVESTMENT MANAGEMENT FIRMS, THE INVESTMENT
PERFORMANCE OF OUR AFFILIATES AND THEIR ABILITY TO EFFECTIVELY MARKET THEIR
INVESTMENT STRATEGIES, AND OTHER RISKS DETAILED FROM TIME TO TIME IN AMG'S
FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. REFERENCE IS HEREBY MADE TO
THE "CAUTIONARY STATEMENTS" SET FORTH IN THE COMPANY'S FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 2001.
FINANCIAL TABLES FOLLOW
A TELECONFERENCE WILL BE HELD WITH AMG'S MANAGEMENT AT 11:00 A.M. EASTERN TIME
TODAY. PARTIES INTERESTED IN LISTENING TO THE TELECONFERENCE SHOULD DIAL
1-800-482-5547 (DOMESTIC CALLS) OR 1-303-267-1001 (INTERNATIONAL CALLS) STARTING
AT 10:45 A.M. EASTERN TIME. THOSE WISHING TO LISTEN TO THE TELECONFERENCE SHOULD
DIAL THE APPROPRIATE NUMBER AT LEAST TEN MINUTES BEFORE THE CALL BEGINS. THE
TELECONFERENCE WILL BE AVAILABLE FOR REPLAY FROM APPROXIMATELY ONE HOUR AFTER
THE CONCLUSION OF THE CALL UNTIL 5:00 P.M. EASTERN TIME ON WEDNESDAY, MAY 1,
2002. TO ACCESS THE REPLAY, PLEASE DIAL 1-800-696-1588 (DOMESTIC CALLS) OR
1-303-804-1727 (INTERNATIONAL CALLS), PASS CODE 1716183. THE LIVE CALL AND THE
REPLAY (THROUGH MAY 1, 2002) MAY ALSO BE ACCESSED VIA THE WEB AT WWW.AMG.COM.
###
FOR MORE INFORMATION ON AFFILIATED MANAGERS GROUP, INC.,
PLEASE VISIT AMG'S WEB SITE AT WWW.AMG.COM.
Affiliated Managers Group, Inc. Reports Financial and Operating Results
for First Quarter 2002
April 24, 2002
Page 3 of 6
AFFILIATED MANAGERS GROUP, INC.
FINANCIAL HIGHLIGHTS
(dollars in thousands, except per share data)
Three Months Three Months
Ended Ended
3/31/01 3/31/02
------------------ ------------------
Revenue $ 100,475 $ 119,335
EBITDA (A) $ 31,304 $ 35,398
Net Income $ 11,930 $ 14,508
Cash Net Income (B) $ 20,190 $ 24,687
Average shares outstanding - diluted 22,567,819 22,963,309
Earnings per share - diluted $ 0.53 $ 0.63
Cash earnings per share - diluted (C) $ 0.89 $ 1.08
December 31, March 31,
2001 2002
------------------ ------------------
Cash and cash equivalents $ 73,427 $ 110,433
Senior debt $ 452,894 $ 483,174
Stockholders' equity $ 543,340 $ 558,363
(MORE)
Affiliated Managers Group, Inc. Reports Financial and Operating Results
for First Quarter 2002
April 24, 2002
Page 4 of 6
AFFILIATED MANAGERS GROUP, INC.
FINANCIAL HIGHLIGHTS
(dollars in thousands, except as indicated)
Three Months
Ended
3/31/02
-----------------
Assets under management (at period end, in millions): $ 81,350
Revenue: $ 119,335
Owners' Allocation (D): $ 60,764
EBITDA Contribution (E): $ 41,398
RECONCILIATION OF EBITDA CONTRIBUTION TO EBITDA:
Total EBITDA Contribution (as above) $ 41,398
Less, holding company expenses (6,000)
-----------------
EBITDA $ 35,398
=================
Notes:
(A) EBITDA represents earnings before interest expense, income taxes,
depreciation and amortization.
(B) Cash Net Income represents net income plus depreciation, amortization
and deferred taxes. In periods prior to 2002, Cash Net Income
represents net income plus depreciation and amortization.
(C) Cash earnings per share represents Cash Net Income divided by average
shares outstanding.
(D) Owners' Allocation represents the portion of an Affiliate's revenue
which is allocated to the owners of that Affiliate, including AMG,
generally in proportion to their ownership interest, pursuant to the
revenue sharing agreement with such Affiliate.
(E) EBITDA Contribution represents the portion of an Affiliate's revenue
that is allocated to AMG after amounts retained by the Affiliate for
compensation and day-to-day operating and overhead expenses, but before
the interest, income taxes, depreciation and amortization expenses of
the Affiliate.
(MORE)
Affiliated Managers Group, Inc. Reports Financial and Operating Results
for First Quarter 2002
April 24, 2002
Page 5 of 6
AFFILIATED MANAGERS GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except share data)
Quarter Ended March 31,
2001 2002
------------------ ------------------
Revenue $ 100,475 $ 119,335
Operating expenses:
Compensation and related expenses 34,208 41,442
Amortization of intangible assets 6,902 3,332
Depreciation and other amortization 1,358 1,350
Selling, general and administrative 18,080 19,607
Other operating expenses 2,615 3,866
------------------ ------------------
63,163 69,597
------------------ ------------------
Operating income 37,312 49,738
------------------ ------------------
Non-operating (income) and expenses:
Investment and other income (524) (600)
Interest expense 3,161 6,536
------------------ ------------------
2,637 5,936
------------------ ------------------
Income before minority interest and taxes 34,675 43,802
Minority interest (14,792) (19,622)
------------------ ------------------
Income before income taxes 19,883 24,180
Income taxes 7,953 9,672
------------------ ------------------
Net income $ 11,930 $ 14,508
================== ==================
Average shares outstanding - basic 22,063,166 22,224,931
Average shares outstanding - diluted 22,567,819 22,963,309
Earnings per share - basic $ 0.54 $ 0.65
Earnings per share - diluted $ 0.53 $ 0.63
(MORE)
Affiliated Managers Group, Inc. Reports Financial and Operating Results
for First Quarter 2002
April 24, 2002
Page 6 of 6
AFFILIATED MANAGERS GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, March 31,
2001 2002
------------------- -------------------
ASSETS
Current assets:
Cash and cash equivalents $ 73,427 $ 110,433
Investment advisory fees receivable 57,148 59,164
Other current assets 9,464 10,314
------------------- -------------------
Total current assets 140,039 179,911
Fixed assets, net 17,802 17,724
Equity investment in Affiliate 1,732 1,846
Acquired client relationships, net 319,645 318,039
Goodwill, net 655,311 660,727
Other assets 25,792 24,480
------------------- -------------------
Total assets $ 1,160,321 $ 1,202,727
=================== ===================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 67,136 $ 59,676
Zero coupon convertible debt 227,894 -
Senior bank debt 25,000 25,000
------------------- -------------------
Total current liabilities 320,030 84,676
Mandatory convertible debt 200,000 230,000
Zero coupon convertible debt - 228,174
Deferred taxes 38,081 43,578
Other long-term liabilities 23,795 29,385
------------------- -------------------
Total liabilities 581,906 615,813
Minority interest 35,075 28,551
Stockholders' equity:
Common stock 235 235
Additional paid-in capital 405,087 404,323
Accumulated other comprehensive income (846) (704)
Retained earnings 190,502 205,010
------------------- -------------------
594,978 608,864
Less treasury shares (51,638) (50,501)
Total stockholders' equity 543,340 558,363
------------------- -------------------
Total liabilities and
stockholders' equity $ 1,160,321 $ 1,202,727
=================== ===================