Exhibit 99
Gabelli Reports Record Fourth Quarter Earnings of $0.65 vs. $0.54 per diluted
share
Business Editors/Financial Editors
RYE, N.Y.--(BUSINESS WIRE)--Jan. 27, 2005--
2004 Earnings record $2.06 per diluted share vs. $1.65 in 2003;
Record $28.7 billion Assets Under Management
Gabelli Asset Management Inc. (NYSE: GBL) reported record revenues
of $74.2 million for the fourth quarter ended December 31, 2004, up
20.4% from the $61.6 million generated in the comparable year earlier
period. Operating income increased 21.4% to $27.4 million from $22.6
million reported in last year's fourth quarter, principally due to
higher investment advisory revenues from our separate accounts and
closed-end funds. Net income for the quarter was $19.5 million or
$0.65 per fully diluted share versus $16.7 million or $0.54 per fully
diluted share in the prior year's quarter.
For the full year ended December 31, 2004, revenues increased
23.0% to a record $255.2 million from $207.4 million recorded in 2003.
Operating income rose 32.6% to $99.1 million in 2004 from $74.7
million for the prior year reflecting both higher revenues and lower
variable costs as a percent of revenues. Net income for the full year
of 2004 was $62.6 million or $2.06 per fully diluted share versus
$49.8 million or $1.65 per fully diluted share for 2003.
Financial Results
Assets under management (AUM) reached a record $28.7 billion on
December 31, 2004, up 4.0% from year-end 2003 assets of $27.6 billion,
and 5.2% ahead of the $27.2 billion in AUM on September 30, 2004.
Average AUM were $28.1 billion in the quarter, up 10.4% from average
total assets of $25.5 billion in the fourth quarter of 2003. Average
total AUM were $27.9 billion for the full year, up 24.3% from average
total assets of $22.4 billion in the prior year period.
GAMCO, the institutional and high net worth segment of our
business, had AUM of $13.6 billion in separately managed equity
accounts on December 31, 2004, up 4.3% from the $13.0 billion on
December 31, 2003 and up 3.0% from the $13.2 billion on September 30,
2004. AUM in our equity mutual funds were a record $12.4 billion at
quarter end, 6.5% ahead of the $11.6 billion on December 31, 2003 and
9.9% ahead of the $11.3 billion on September 30, 2004. Fixed income
assets totaled $1.89 billion on December 31, 2004, down 14.9% from the
prior year's quarter end assets of $2.22 billion but 1.0% higher than
assets of $1.87 billion on September 30, 2004. Our alternative
investment assets were $814 million, up 17.6% from year end 2003
assets of $692 million but 12.8% below the $934 million on September
30, 2004.
Investment advisory fees, driven by solid investment performance,
totaled $65.0 million during the fourth quarter 2004, an increase of
23.9% from $52.5 million the fourth quarter of 2003. For the full year
of 2004, investment advisory fees totaled $219.9 million, up 24.3%
from $176.9 million in 2003. The growth in investment advisory fees
for the fourth quarter and full year 2004 was driven by our
institutional and high net worth separately managed equity accounts
and closed-end funds. Revenues from our GAMCO business, which totaled
$24.1 million in the fourth quarter 2004 and $87.6 million for the
full year 2004 versus $20.1 million and $69.0 million in the
respective 2003 periods, were higher due to higher average assets
under management and an increase in fulcrum fees earned on certain
accounts traceable to excellent investment performance relative to
benchmark.
Revenues from closed-end funds increased 119% to $14.0 million in
the fourth quarter 2004 from $6.4 million in the prior year quarter
principally due to an increase in management fees earned on preferred
shares of $4.2 million versus the prior year's quarter and a $2.8
million increase due to a complete quarter of revenue earned from The
Gabelli Dividend & Income Trust ("GDV") in the 2004 quarter. In this
regard we point out that we do not earn a management fee on assets of
preferred shares unless the total return of the closed-end fund to
common shareholders during the year exceeds the dividend rate of the
preferred shares. For the year, revenue from closed-end funds
increased 103% to $37.6 million in 2004 from $18.5 million in 2003
principally due to fees earned from GDV.
For the fourth quarter 2004, our revenues of $19.9 million from
open-end mutual funds were slightly ahead of the $19.8 million
recorded in the 2003 quarter but increased 9.8% to $79.4 million for
the full year 2004 from $72.3 million recorded in 2003. Advisory fees
from alternative investment products increased 18.9% in the fourth
quarter 2004 versus the prior year's quarter due to an increase in
both management and performance fees. For 2004, revenue from
alternative investment products decreased 8.4% as higher management
fees were more than offset by lower performance fees as compared to
2003.
Commission revenues of $4.3 million for our institutional research
affiliate, Gabelli & Company, Inc. during the fourth quarter of 2004
were about the same as the prior year's quarter but were up 21.1% to
$15.6 million for the full year 2004 as compared to $12.9 million in
the 2003 period. Distribution fees rose slightly to $4.9 million in
the fourth quarter 2004 versus $4.8 million in the 2003 quarter and
increased 11.5% to $19.7 million during the full year 2004 from $17.6
million in the comparable 2003 period. The increase in fees is
traceable to higher average assets under management in open-end equity
mutual funds in the 2004 periods as compared to the prior year.
Variable compensation costs, as a percent of revenues, decreased
to 33.1% and 30.6% for the fourth quarter and full year 2004,
respectively, as compared to 33.3% and 32.3% in the respective 2003
periods. This decrease is traceable to a shift in revenue mix from
alternative investments to separately managed accounts and lower
overall variable compensation costs related to separately managed
accounts compared to the prior year's periods. Other variable
operating expenses, as a percent of revenues, fell to 10.4% in the
2004 quarter versus 11.3% in the fourth quarter of 2003 and to 10.8%
for the full year of 2004 versus 11.7% in the comparable prior year
period. Other variable operating expenses included distribution costs
of $0.9 million in the fourth quarter 2004 versus $0.3 million in the
prior year period and $4.0 million during the full year of 2004 versus
$0.3 million in the prior year period which were due to the initial
inclusion of our two new closed-end funds, GDV in November 2003 and
The Gabelli Global Utility & Income Trust ("GLU") in May 2004.
Expenses not directly tied to revenues increased to $11.0 million
in the fourth quarter 2004, up 30.1% from $8.5 million in the prior
year's quarter and up 21.3% to $39.5 million for the full year of 2004
from $32.6 million in the comparable prior year period. The increases
from the comparable periods include costs related to the expensing of
stock options, accruals for incentive compensation, insurance expenses
and compliance costs with Sarbanes-Oxley as well as other regulatory
and corporate governance initiatives.
The effective tax rate for the fourth quarter and full year 2004
was 36.4% versus 37.6% and 37.4%, respectively in comparable 2003
periods, as we adjusted the tax rate in 2004 to reflect our estimate
of the current year-end tax liability.
On December 31, 2004 we had 28,837,034 shares outstanding, which
is approximately 4% lower than our shares outstanding of 30,049,556 at
the end of 2003 and approximately 2% below shares outstanding of
29,557,853 on September 30, 2004.
Other Income
For the fourth quarter 2004, we realized a gain of $3.7 million
from our investments and net interest expense versus a net benefit of
$4.8 million in the 2003 quarter. The net return from our corporate
investment portfolio declined to $7.6 million in the 2004 fourth
quarter as the $8.9 million recorded in the 2003 quarter included a
$1.8 million gain from one of our venture capital investments. For the
full year 2004, investment income totaled $16.1 million versus $21.1
million in the comparable 2003 period. Interest expense fell 2.9%
during the 2004 quarter to $3.9 million compared to $4.0 million in
the prior year's quarter but increased 8.0% to $16.0 million for the
full year period from $14.8 million in 2003. The increase for the full
year 2004 was due to the inclusion of our $100 million of 5.5% senior
notes, which were issued in May 2003, for the entire year offset by a
one percentage point decrease in the interest rate on our convertible
note from 6% to 5% in August 2003 and the decrease of the interest
rate on our mandatory convertible securities to 5.22% from 6.0% due to
the remarketing of the notes in November 2004. Management fee expense
was $3.5 million for the quarter and $11.0 million for the twelve
months of 2004 versus $3.0 million and $9.0 million, respectively for
the comparable 2003 periods.
Investment and Business Highlights
-- In October, The Gabelli Dividend & Income Trust completed an
offering of three series of Preferred Shares valued at a total
of $300 million. The issuance was comprised of $80 million of
5.875% Series A Cumulative Preferred Shares, $100 million of
Series B Auction Market Preferred Shares and $120 million of
Series C Auction Market Preferred Shares. Merrill Lynch & Co.,
Citigroup, A.G. Edwards and Gabelli & Company, Inc. served as
underwriters for the offering.
-- In early December, The Gabelli Utility Trust (NYSE: GUT)
completed its Rights Offering whereby holders of four Rights
were entitled to purchase one newly issued Common Share of the
Gabelli Utility Trust at the subscription price of $7.00 per
Share. The offering was heavily over-subscribed as the Trust
received subscriptions for more than twice the 5,779,547
Shares available to be issued pursuant to the primary
subscription.
-- Howard F. Ward, CFA, portfolio manager of the Gabelli Growth
Fund and a ten-year veteran of Gabelli Asset Management Inc.,
was named Director of Growth Products. He will oversee the
firm's domestic, international and global growth equity
products for mutual funds and separate accounts as well as
become a member of the Gabelli Global Growth Fund's portfolio
management team.
-- GAMCO, the institutional and high net worth segment of our
business, continued to produce solid investment returns for
clients during 2004 as our separate accounts composite(a)
achieved a total net return of 17.8% for the year. GAMCO's
compound annual net return is 18.4% for the over 27 years
since inception.
-- The Gabelli Equity Income Fund (GABEX) is a proud member of
the Louis Rukeyser Honor Roll which is comprised of Funds that
have been on The Rukeyser 100 list more than 80% of the past
three years (at least 29 out of 36 months). The Louis Rukeyser
Honor Roll appears monthly in Louis Rukeyser's Mutual Funds
newsletter. The Fund is also rated 5 Stars overall by
Morningstar(TM) and 5 Stars for each of the 3, 5 and 10-year
periods ended 12/31/04. The Fund was rated among 770, 552 and
233 Large Value Domestic Equity funds for the 3, 5 and 10-year
periods ended 12/31/04, respectively.
-- Gabelli & Company, Inc. hosted its 28th Annual Automotive
Aftermarket Symposium in Las Vegas in November. Over 25
automotive suppliers, retailers, and dealers including Genuine
Parts, Dana Corp., and Midas Inc. presented their investment
theses and strategies to the firm's institutional clients at
this interactive symposium.
-- The Gabelli ABC Fund which began investment operations on May
14, 1993 focuses its investment strategy on achieving total
returns without excessive risk of capital. The fund has earned
a positive total return in each of the 12 calendar years since
its inception. The average annual total returns for the fund
for the one, five and ten year periods ending December 31,
2004 were 1.93%, 4.57% and 7.43%, respectively.
(a) The GAMCO composite does not track all assets under
management. It consists of fully discretionary, tax-exempt accounts
managed for at least one full quarter and meeting minimum account size
requirements. The minimum size requirement for inclusion in 1985 was
$500,000; 1986, $1 million; and 1987 $5 million. The performance
calculations include accounts under management during the respective
periods. As of 12/31/04 the GAMCO composite included 50 accounts with
aggregate market value of $4.0 billion. A complete list of composites
is available upon request. No two portfolios are identical. Accounts
not within this size and type may have experienced different results.
The inception date of the GAMCO composite is 10/1/77.
Shareholder Compensation and Initiatives
During 2004, we returned over $100 million of our earnings to
shareholders through our stock buyback program and dividends. In
November 2004, the Board of Directors authorized a special dividend of
$0.60 per share that was paid January 18, 2005 to all shareholders of
record on January 3, 2005. This follows the $1.00 per share special
dividend paid in the fourth quarter 2004 and a $0.10 per share special
dividend paid in the second quarter 2004. The Board also declared a
quarterly dividend of $0.02 per share that was paid on December 28,
2004 to shareholders of record on December 14, 2004. In total, we
declared $1.76 per share in dividends to our common shareholders in
2004.
During the fourth quarter of 2004, we bought back 1,023,550 shares
at an average investment of $46.76 per share. Our stock buyback
program was initiated in March 1999. Since that time, 2,773,626 Class
A shares have been repurchased through December 31, 2004 at an average
price of $36.38 per share, including 1,596,277 shares during 2004. The
Board of Directors authorized an increase to the buyback program of
one million shares of Class A common stock during October 2004. This
brings the total shares currently available to be repurchased under
the program to approximately 944,000 shares.
Financial Strength and Flexibility
We ended the quarter with roughly $644.0 million in cash,
marketable securities and investments. This includes approximately
$75.8 million of investments in The Gabelli Dividend & Income Trust,
The Gabelli Global Utility & Income Trust, Gabelli open-end mutual
funds and other investments classified as available for sale
securities. Our debt of $282.3 million consists of a $100 million 5%
convertible note, $100 million of 5.5% senior notes, and $82.3 million
of senior notes issued in connection with our mandatory convertible
securities. Expressed another way, we had $12.54 per share of net
cash, marketable securities and investments on December 31, 2004
before taking into effect the $0.60 per share special dividend paid in
January 2005.
Our mandatory convertible securities consist of (a) a purchase
contract under which holders will purchase shares of our Class A
common stock and (b) notes due February 17, 2007. The notes were
successfully remarketed to new holders in November 2004 at an interest
rate of 5.22%. The holders of the purchase contracts are obligated to
purchase newly issued shares of our Class A common stock on February
17, 2005. During December 2004, a holder of 469,600 purchase contracts
purchased 252,456 shares of our Class A common stock through early
settlement. As a result, the total number of shares remaining to be
issued will be approximately 1.5 million if the market price of GBL is
$46.50 or greater, approximately 1.8 million if the market price of
GBL is $39.40 or less, and within this range of 1.5 million to 1.8
million shares if the market price of GBL is between $39.40 and
$46.50. The newly issued Class A shares will be included in our
calculation of earnings per share. Assuming no further stock
repurchases and further assuming that the maximum number of shares
(approximately 1.8 million) are issued, the impact of the share
issuance will be a reduction of earnings of approximately 5.8% on a
fully diluted per share basis.
Stockholders' equity, on a GAAP basis, was $352.2 million or
$12.21 per share on December 31, 2004 compared with $378.3 million or
$12.59 per share on December 31, 2003.
NOTES ON NON-GAAP FINANCIAL MEASURES
A. Cash and investments as adjusted have been computed as follows:
(in millions)
12/31/03 12/31/04
--------- ---------
Cash and cash equivalents $386.5 $257.1
Investments (marketable securities) 228.0 305.9
--------- ---------
Total cash and investments (marketable securities) 614.5 563.0
Net amounts receivable/(payable) to brokers (4.5) 5.2
--------- ---------
Adjusted cash and investments (marketable
securities) 610.0 568.2
Investments (available for sale) 67.4 75.8
--------- ---------
Total adjusted cash and investments $677.4 $644.0
========= =========
We believe cash and investments as adjusted is a more useful
measure of the company's liquidity for analytical purposes.
Net amounts receivable/(payable) from/to brokers reflects cash and
cash equivalents held with brokers and cash payable for securities
purchased and recorded on a trade date basis for which settlement
occurs subsequent to period end.
B. Operating income before management fee expense is used by
management for purposes of evaluating its business operations. We
believe this measure is useful in illustrating the operating results
of the Company as management fee expense is based on pre-tax income
and 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
to operating income is provided in Table IV.
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
Our disclosure and analysis in this press release contain some
forward-looking statements. Forward-looking statements give 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, there can
be no assurance that our actual results will not differ materially
from what we expect or believe. Some of the factors that could cause
our actual results to differ from our expectations or beliefs include,
without limitation: the adverse effect from a decline in the
securities markets; a decline in the performance of our products; a
general downturn in the economy; changes in government policy or
regulation; changes in our ability to attract or retain key employees;
and unforeseen costs and other effects related to legal proceedings or
investigations of governmental and self-regulatory organizations. We
also direct your attention to any more specific discussions of risk
contained in our Form 10-K and other public filings. We are providing
these statements as permitted by the Private Litigation Reform Act of
1995. We do not undertake to update publicly any forward-looking
statements if we subsequently learn that we are unlikely to achieve
our expectations or if we receive any additional information relating
to the subject matters of our forward-looking statements.
Assets Under Management
The company reported assets under management as follows:
Table I
Assets Under Management
(in millions)
---------------------
December 31
----------------
% Inc.
2003 2004 (Dec.)
------------------------
Mutual Funds:
Open End $8,088 $8,029 (0.7%)
Closed End 3,530 4,342 23.0
Fixed Income 1,714 1,499 (12.5)
----------------
Total Mutual Funds 13,332 13,870 4.0
----------------
Institutional & High Net Worth Separate
Accounts:
Equities 13,031 13,587 4.3
Fixed Income 504 388 (23.0)
----------------
Total Institutional & High Net Worth Separate
Accounts 13,535 13,975 3.3
----------------
Alternative Investments 692 814 17.6
----------------
Total Assets Under Management $27,559 $28,659 4.0
================
Table II
Fund Flows - 4th Quarter 2004
(in millions)
----------------------------------
Market
September Net Appreciation / December
30, Cash (Depreciation) 31,
2004 Flows 2004
--------- --------- --------------- --------
Mutual Funds:
Equities $11,261 $ 78 $1,032 $12,371
Fixed Income 1,524 (29) 4 1,499
--------- --------- --------------- --------
Total Mutual Funds 12,785 49 1,036 13,870
--------- --------- --------------- --------
Institutional & HNW
Separate Accounts
Equities 13,185 (1,094) 1,496 13,587
Fixed Income 344 42 2 388
--------- --------- --------------- --------
Total Institutional &
HNW Separate
Accounts 13,529 (1,052) 1,498 13,975
--------- --------- --------------- --------
Alternative
Investments 934 (159) 39 814
--------- --------- --------------- --------
Total Assets Under
Management $27,248 $(1,162) $2,573 $28,659
========= ========= =============== ========
Table III
Assets Under Management
(in millions)
-----------------------------------------
% Increase/
(decrease)
12/03 3/04 6/04 9/04 12/04 9/04 12/03
--------------------------------------------------------
Mutual Funds
Open end $8,088 $8,106 $7,852 $7,534 $8,029 6.6% (0.7%)
Closed end 3,530 3,739 3,764 3,727 4,342 16.5 23.0
Fixed
income 1,714 1,717 1,563 1,524 1,499 (1.6) (12.5)
-----------------------------------------
Total Mutual
Funds 13,332 13,562 13,179 12,785 13,870 8.5 4.0
-----------------------------------------
Institutional
& HNW
Separate
Accounts:
Equities 13,031 13,383 13,628 13,185 13,587 3.0 4.3
Fixed
Income 504 369 354 344 388 12.8 (23.0)
-----------------------------------------
Total
Institutional
& HNW
Separate
Accounts 13,535 13,752 13,982 13,529 13,975 3.3 3.3
-----------------------------------------
Alternative
Investments 692 901 1,061 934 814 (12.8) 17.6
-----------------------------------------
Total Assets
Under
Management $27,559 $28,215 $28,222 $27,248 $28,659 5.2 4.0
=========================================
Table IV
GABELLI ASSET MANAGEMENT INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
---------------------------------------------------
For the Three Months For the Twelve Months
Ended Ended
December 31, December 31,
------------------------ --------------------------
%Inc. %Inc.
2003 2004 (Dec.) 2003 2004 (Dec.)
-------- -------- ------ --------- --------- ------
Revenues $61,605 $74,183 20.4% $207,437 $255,163 23.0%
Expenses 35,996 43,318 20.3 123,721 145,078 17.3
-------- -------- --------- ---------
Operating income
before
management fee 25,609 30,865 20.5 83,716 110,085 31.5
Investment income 8,863 7,649 (13.7) 21,140 16,108 (23.8)
Interest expense (4,048) (3,932) (2.9) (14,838) (16,027) 8.0
-------- -------- --------- ---------
Other income
(expense), net 4,815 3,717 (22.8) 6,302 81 (98.7)
-------- -------- --------- ---------
Income before
management fee,
income taxes and
minority
interest 30,424 34,582 13.7 90,018 110,166 22.4
Management fee 3,043 3,459 9,002 11,017
-------- -------- --------- ---------
Income before
income taxes and
minority
interest 27,381 31,123 81,016 99,149
Income taxes 10,295 11,329 30,339 36,097
Minority
interest 428 255 833 493
-------- -------- --------- ---------
Net income $16,658 $19,539 17.3 $49,844 $62,559 25.5
======== ======== ========= =========
Net income per
share:
Basic $0.55 $0.67 21.8 $1.66 $2.11 27.1
======== ======== ========= =========
Diluted $0.54 $0.65 20.4 $1.65 $2.06 24.8
======== ======== ========= =========
Weighted average
shares
outstanding:
Basic 30,065 29,037 (3.4) 30,018 29,673 (1.1)
======== ======== ========= =========
Diluted 32,155 31,179 (3.0) 32,081 31,804 (0.9)
======== ======== ========= =========
Reconciliation of
Non-GAAP
Financial
Measures
to GAAP:
Operating income
before
management fee $25,609 $30,865 20.5 $83,716 $110,085 31.5
Deduct:
management fee 3,043 3,459 9,002 11,017
-------- -------- --------- ---------
Operating income $22,566 $27,406 21.4 $74,714 $99,068 32.6
-------- -------- --------- ---------
Operating margin
before
management fee 41.6% 41.6% 40.4% 43.1%
-------- -------- --------- ---------
Operating margin
after management
fee 36.6% 36.9% 36.0% 38.8%
-------- -------- --------- ---------
Table V
GABELLI ASSET MANAGEMENT INC.
UNAUDITED QUARTERLY CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
-----------------------------------------------------
2003
-------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
-------------------------------------------
Income
Statement
Data:
Revenues $46,053 $47,956 $51,823 $61,605 $207,437
Expenses 28,044 29,454 30,227 35,996 123,721
-------------------------------------------
Operating
income
before
management
fee 18,009 18,502 21,596 25,609 83,716
Investment
income 1,690 6,079 4,508 8,863 21,140
Interest
expense (3,011) (3,605) (4,174) (4,048) (14,838)
-------------------------------------------
Other income
(expense),
net (1,321) 2,474 334 4,815 6,302
-------------------------------------------
Income before
management
fee,
income
taxes and
minority
interest 16,688 20,976 21,930 30,424 90,018
Management
fee 1,669 2,097 2,193 3,043 9,002
-------------------------------------------
Income before
income
taxes and
minority
interest 15,019 18,879 19,737 27,381 81,016
Income taxes 5,647 7,099 7,298 10,295 30,339
Minority
interest 45 223 137 428 833
-------------------------------------------
Net income $9,327 $11,557 $12,302 $16,658 $49,844
===========================================
Net income
per share:
Basic $0.31 $0.38 $0.41 $0.55 $1.66
===========================================
Diluted $0.31 $0.38 $0.41 $0.54 $1.65
===========================================
Weighted average shares
outstanding:
Basic 29,918 30,025 30,061 30,065 30,018
===========================================
Diluted 30,031 30,139 32,170 32,155 32,081
===========================================
Reconciliation
of Non-GAAP
Financial
Measures
to GAAP:
Operating
income
before
management
fee $18,009 $18,502 $21,596 $25,609 $83,716
Deduct:
management
fee 1,669 2,097 2,193 3,043 9,002
-------------------------------------------
Operating
income $16,340 $16,405 $19,403 $22,566 $74,714
-------------------------------------------
Operating
margin
before
management
fee 39.1% 38.6% 41.7% 41.6% 40.4%
-------------------------------------------
Operating
margin
after
Management
fee 35.5% 34.2% 37.4% 36.6% 36.0%
-------------------------------------------
2004
------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------
Income
Statement
Data:
Revenues $63,539 $60,204 $57,237 $74,183 $255,163
Expenses 35,426 33,332 33,002 43,318 145,078
-------------------------------------------------------
Operating
income
before
management
fee 28,113 26,872 24,235 30,865 110,085
Investment
income 4,290 1,549 2,620 7,649 16,108
Interest
expense (4,046) (4,035) (4,014) (3,932) (16,027)
-------------------------------------------------------
Other income
(expense),
net 244 (2,486) (1,394) 3,717 81
-------------------------------------------------------
Income before
management
fee, income
taxes and
minority
interest 28,357 24,386 22,841 34,582 110,166
Management
fee 2,836 2,438 2,284 3,459 11,017
-------------------------------------------------------
Income before
income
taxes and
minority
interest 25,521 21,948 20,557 31,123 99,149
Income taxes 9,296 7,989 7,483 11,329 36,097
Minority
interest 154 41 43 255 493
-------------------------------------------------------
Net income $16,071 $13,918 $13,031 $19,539 $62,559
=======================================================
Net income
per share:
Basic $0.53 $0.47 $0.44 $0.67 $2.11
=======================================================
Diluted $0.52 $0.46 $0.43 $0.65 $2.06
=======================================================
Weighted average
shares
outstanding:
Basic 30,064 29,890 29,707 29,037 29,673
=======================================================
Diluted 32,202 32,010 31,820 31,179 31,804
=======================================================
Reconciliation
of Non-GAAP
Financial
Measures to
GAAP:
Operating
income
before
management
fee $28,113 $26,872 $24,235 $30,865 $110,085
Deduct:
management
fee 2,836 2,438 2,284 3,459 11,017
-------------------------------------------------------
Operating
income $25,277 $24,434 $21,951 $27,406 $99,068
-------------------------------------------------------
Operating
margin
before
management
fee 44.2% 44.6% 42.3% 41.6% 43.1%
-------------------------------------------------------
Operating
margin after
Management
fee 39.8% 40.6% 38.4% 36.9% 38.8%
-------------------------------------------------------
Table VI
GABELLI ASSET MANAGEMENT INC.
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
(In thousands)
---------------------------------------------------
December December
31, 31,
2003 2004
------------------------
ASSETS (unaudited)
Cash and cash equivalents $386,511 $257,096
Investments 295,411 381,689
Receivables 39,667 46,571
Other assets 14,922 13,616
------------------------
Total assets $736,511 $698,972
========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Compensation payable $25,552 $27,645
Income taxes payable 12,323 8,526
Accrued expenses and other liabilities 27,900 22,142
------------------------
Total operating liabilities 65,775 58,313
5.5% Senior notes (due May 15, 2013) 100,000 100,000
5% Convertible note (conversion price, $52 per
share; note due August 14, 2011) 100,000 100,000
Mandatory convertible securities (purchase
contract settlement date, February 17, 2005;
notes due February 17, 2007) 84,030 82,308
------------------------
Total liabilities 349,805 340,621
Minority interest 8,395 6,171
Stockholders' equity 378,311 352,180
------------------------
Total liabilities and stockholders' equity $736,511 $698,972
========================
CONTACT: Gabelli Asset Management Inc.
Michael R. Anastasio, 914-921-5147
www.gabelli.com