Exhibit 99.1
Contact: Darrell W. Crate
Affiliated Managers Group, Inc.
(617) 747-3300
AMG REPORTS FINANCIAL AND OPERATING RESULTS
FOR SECOND QUARTER AND FIRST HALF OF 2002
COMPANY REPORTS CASH EPS FOR SECOND QUARTER OF $1.12
BOSTON, MA, JULY 24, 2002 - Affiliated Managers Group, Inc. (NYSE: AMG) today
reported its financial and operating results for the quarter and six months
ended June 30, 2002.
Cash earnings per share ("Cash EPS") for the second quarter of 2002 were $1.12.
(Cash EPS is the Company's reported EPS figure plus non-cash charges on a per
share basis 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 second quarter of 2002 were
$0.67, and net income for the second quarter was $15.4 million. Cash Net Income
(net income plus the non-cash charges for depreciation and amortization and
deferred taxes related to intangible assets) was $25.7 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
second quarter of 2001. For the second quarter of 2002, revenue was $129.6
million, compared to $100.7 million for the second quarter of 2001. EBITDA for
the second quarter of 2002 was $37.4 million, compared to $33.6 million for the
same period of 2001. For the six months ended June 30, 2002, revenue was $249.0
million, compared to $201.1 million for the six months ended June 30, 2001.
EBITDA for the six months ended June 30, 2002 was $72.8 million, compared to
$64.9 million for the same period of 2001.
The aggregate assets under management of AMG's affiliated investment management
firms at June 30, 2002 were $74.1 billion. The aggregate net client cash flows
were approximately $11 million, with outflows from directly managed assets for
the second quarter of approximately $107 million, and net inflows of
approximately $118 million in overlay assets. Given a favorable mix of inflows
to higher margin products and Affiliates in which AMG has a larger financial
interest, the net effect of these client cash flows was an increase of
approximately $1.1 million to AMG's annualized EBITDA.
"Given the continued challenges of a difficult equity market environment, our
Affiliates produced solid results for the quarter and the year-to-date," stated
William J. Nutt, Chairman and Chief Executive Officer. "The diversity among our
Affiliates' investment styles and distribution channels continues to provide
stability to our earnings. While our overall assets were impacted by adverse
market conditions, our Affiliates continue to generate internal growth in
earnings through client cash flows, and on an overall basis, Cash EPS rose
quarter over quarter."
(MORE)
Affiliated Managers Group, Inc. Reports Financial and Operating Results
for Second Quarter and First Half of 2002
July 24, 2002
Page 2 of 7
"While our value-oriented managers, such as Tweedy, Browne, Systematic and
Skyline, were less affected by unfavorable markets, our growth managers,
including Friess, Essex and Davis Hamilton, also posted strong relative results
for the quarter and the year-to-date," stated Sean M. Healey, President and
Chief Operating Officer. "Our Affiliate Development team continues to execute
growth initiatives with our Affiliates, including the launch of another series
of multi-Affiliate portfolios with Wells Fargo Private Client Services. The
portfolios are similar to those introduced earlier this year, but will offer a
different set of asset allocation models and Affiliate managers. Finally, this
quarter we announced our agreement to invest in Third Avenue Management. Third
Avenue's excellent long-term performance record and its value-oriented
investments, which include real estate and distressed securities, further
strengthen and diversify our Affiliate group."
Separately, AMG's Board of Directors approved an increase in the Company's share
repurchase program, authorizing the purchase of up to an additional five percent
of shares outstanding. The purchases would be effected at times and in amounts
determined at the discretion of AMG's management.
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 ABILITY TO
COMPLETE PENDING ACQUISITIONS, 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
1-888-467-1742 (DOMESTIC CALLS) OR 1-703-871-3722 (INTERNATIONAL CALLS) STARTING
AT 10:45 A.M. EASTERN TIME. PLEASE 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, JULY 31, 2002. TO ACCESS THE REPLAY, PLEASE DIAL
1-888-266-2086 (DOMESTIC CALLS) OR 1-703-925-2435 (INTERNATIONAL CALLS), PASS
CODE 6104431. THE LIVE CALL AND THE REPLAY (THROUGH JULY 31, 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 Second Quarter and First Half of 2002
July 24, 2002
Page 3 of 7
AFFILIATED MANAGERS GROUP, INC.
FINANCIAL HIGHLIGHTS
(dollars in thousands, except per share data)
Three Months Three Months
Ended Ended
6/30/01 6/30/02
--------------------- ---------------------
Revenue $ 100,663 $ 129,631
EBITDA (A) $ 33,564 $ 37,448
Net Income $ 13,107 $ 15,353
Cash Net Income (B) $ 21,475 $ 25,708
Average shares outstanding - diluted 22,654,951 22,862,980
Earnings per share - diluted $ 0.58 $ 0.67
Cash earnings per share - diluted (C) $ 0.95 $ 1.12
December 31, June 30,
2001 2002
--------------------- ---------------------
Cash and cash equivalents $ 73,427 $ 127,914
Senior debt $ 452,894 $ 483,461
Stockholders' equity $ 543,340 $ 568,340
(MORE)
Affiliated Managers Group, Inc. Reports Financial and Operating Results
for Second Quarter and First Half of 2002
July 24, 2002
Page 4 of 7
AFFILIATED MANAGERS GROUP, INC.
FINANCIAL HIGHLIGHTS
(dollars in thousands, except per share data)
Six Months Six Months
Ended Ended
6/30/01 6/30/02
--------------------- ---------------------
Revenue $ 201,138 $ 248,966
EBITDA (A) $ 64,868 $ 72,845
Net Income $ 25,037 $ 29,860
Cash Net Income (B) $ 41,665 $ 50,394
Average shares outstanding - diluted 22,612,010 22,912,528
Earnings per share - diluted $ 1.11 $ 1.30
Cash earnings per share - diluted (C) $ 1.84 $ 2.20
(MORE)
Affiliated Managers Group, Inc. Reports Financial and Operating Results
for Second Quarter and First Half of 2002
July 24, 2002
Page 5 of 7
AFFILIATED MANAGERS GROUP, INC.
FINANCIAL HIGHLIGHTS
(dollars in thousands, except as indicated)
Three Months Six Months
Ended Ended
6/30/02 6/30/02
--------------------- ---------------------
Assets under management (at period end, in millions): $ 74,143 $ 74,143
Revenue: $ 129,631 $ 248,966
Owners' Allocation (D): $ 69,181 $ 129,945
EBITDA Contribution (E): $ 43,448 $ 84,845
RECONCILIATION OF EBITDA CONTRIBUTION TO EBITDA:
Total EBITDA Contribution (as above) $ 43,448 $ 84,845
Less, holding company expenses (6,000) (12,000)
--------------------- ---------------------
EBITDA $ 37,448 $ 72,845
===================== =====================
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 Second Quarter and First Half of 2002
July 24, 2002
Page 6 of 7
AFFILIATED MANAGERS GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except share data)
Quarter Ended June 30, Year to Date June 30,
2001 2002 2001 2002
---------------- ---------------- --------------- ----------------
Revenue $ 100,663 $ 129,631 $ 201,138 $ 248,966
Operating expenses:
Compensation and related expenses 32,698 42,046 66,906 83,488
Amortization of intangible assets 6,940 3,364 13,842 6,696
Depreciation and other amortization 1,428 1,452 2,786 2,802
Selling, general and administrative 19,034 24,061 37,115 43,669
Other operating expenses 2,673 3,148 5,288 7,014
---------------- ---------------- --------------- ----------------
62,773 74,071 125,937 143,669
---------------- ---------------- --------------- ----------------
Operating income 37,890 55,560 75,201 105,297
---------------- ---------------- --------------- ----------------
Non-operating (income) and expenses:
Investment and other income (1,470) (792) (1,994) (1,392)
Interest expense 3,351 7,044 6,512 13,580
---------------- ---------------- --------------- ----------------
1,881 6,252 4,518 12,188
---------------- ---------------- --------------- ----------------
Income before minority interest and
taxes 36,009 49,308 70,683 93,109
Minority interest (14,164) (23,720) (28,956) (43,342)
---------------- ---------------- --------------- ----------------
Income before income taxes 21,845 25,588 41,727 49,767
Income taxes - current 8,110 4,696 13,947 8,871
Income taxes - deferred 628 5,539 2,743 11,036
---------------- ---------------- --------------- ----------------
Net income $ 13,107 $ 15,353 $ 25,037 $ 29,860
================ ================ =============== ================
Average shares outstanding - basic 22,109,068 22,196,540 22,086,244 22,210,658
Average shares outstanding - diluted 22,654,951 22,862,980 22,612,010 22,912,528
Earnings per share - basic $ 0.59 $ 0.69 $ 1.13 $ 1.34
Earnings per share - diluted $ 0.58 $ 0.67 $ 1.11 $ 1.30
(MORE)
Affiliated Managers Group, Inc. Reports Financial and Operating Results
for Second Quarter and First Half of 2002
July 24, 2002
Page 7 of 7
AFFILIATED MANAGERS GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, June 30,
2001 2002
--------------------- ---------------------
ASSETS
Current assets:
Cash and cash equivalents $ 73,427 $ 127,914
Investment advisory fees receivable 57,148 61,149
Other current assets 9,464 8,966
--------------------- ---------------------
Total current assets 140,039 198,029
Fixed assets, net 17,802 19,853
Equity investment in Affiliate 1,732 -
Acquired client relationships, net 319,645 323,384
Goodwill, net 655,311 673,381
Other assets 25,792 25,604
--------------------- ---------------------
Total assets $ 1,160,321 $ 1,240,251
===================== =====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 67,136 $ 73,503
Zero coupon convertible debt 227,894 -
Senior bank debt 25,000 25,000
--------------------- ---------------------
Total current liabilities 320,030 98,503
Mandatory convertible debt 200,000 230,000
Zero coupon convertible debt - 228,461
Deferred taxes 38,081 49,251
Other long-term liabilities 23,795 36,440
--------------------- ---------------------
Total liabilities 581,906 642,655
Minority interest 35,075 29,256
Stockholders' equity:
Common stock 235 235
Additional paid-in capital 405,087 405,769
Accumulated other comprehensive income (846) (564)
Retained earnings 190,502 220,362
--------------------- ---------------------
594,978 625,802
Less treasury shares, at cost (51,638) (57,462)
--------------------- ---------------------
Total stockholders' equity 543,340 568,340
--------------------- ---------------------
Total liabilities and stockholders' equity $ 1,160,321 $ 1,240,251
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