Exhibit 99
Gabelli Reports Second Quarter Earnings
of $0.43 per diluted share vs. $0.46 in 2004
RYE, N.Y.--(BUSINESS WIRE)--July 21, 2005--Gabelli Asset
Management Inc. (NYSE: GBL) reported revenues of $59.8 million for the
second quarter ended June 30, 2005, down 0.6% from the $60.2 million
generated in the prior year's quarter. Operating income declined $4.8
million to $19.6 million down 19.7% from the $24.4 million reported in
last year's second quarter. The decline in operating income for the
quarter in part reflects a one-time charge of $1.8 million or $0.03
per fully diluted share related to the accelerated of vesting of stock
options. Net income for the quarter was $13.0 million or $0.43 per
fully diluted share versus $13.9 million or $0.46 per fully diluted
share in the prior year's quarter.
For the six months ended June 30, 2005 revenues were $121.4
million, a decline of 1.9% from the prior year's comparable period
revenues of $123.7 million. Operating income was $39.8 million, down
20.0% from $49.7 million in the first six months of 2004. Contributing
to the decline in operating income in the 2005 period were one-time
charges totaling $4.4 million or $0.07 per fully diluted share related
to costs incurred for the launch of a new closed-end fund, a charge
recorded for the impairment of goodwill and compensation costs for the
acceleration of the vesting of stock options. Net income for the first
half of 2005 was $25.6 million or $0.85 per diluted share versus $30.0
million or $0.98 per diluted share in the comparable 2004 period.
Assets Under Management (AUM) were $27.6 billion on June 30, 2005,
or 1.5% lower than March 31, 2005 assets of $28.0 billion, and 2.1%
below the $28.2 billion in AUM on June 30, 2004.
Financial Highlights
-- Assets Under Management (AUM) - Our equity open-end mutual
funds and closed-end funds had a record $12.5 billion in AUM
at quarter end, slightly ahead of the $12.4 billion on March
31, 2005 and 7.5% ahead of the $11.6 billion on June 30, 2004.
In the institutional and high net worth segment of our
business, Gabelli Asset Management Company (GAMCO) had AUM of
$13.2 billion in separately managed equity accounts on June
30, 2005, a 1.3% slippage from the $13.4 billion on March 31,
2005 and down 3.2% from the $13.6 billion on June 30, 2004.
Fixed income assets, primarily money market mutual funds,
totaled $1.1 billion on June 30, 2005, down 21.1% from the
March 31, 2005 assets of $1.4 billion and 41.5% lower than
assets of $1.9 billion on June 30, 2004. Assets in our
investment partnerships were $831 million versus $854 million
at March 31, 2005 assets and $1.1 billion on June 30, 2004.
-- Revenues - Investment advisory fees totaled $52.4 million
during the second quarter of 2005, an increase of $1.0 million
or 2.0% from the second quarter of 2004. For the first six
months of 2005, investment advisory fees were $106.3 million,
up 1.0% from the prior year period. The higher revenues from
our closed-end funds and investment partnerships were
partially offset by lower revenues from our open-end mutual
funds and separate accounts. For the second quarter of 2005,
our revenues of $19.5 million from open-end mutual funds were
4.7% lower than the $20.5 million recorded in the 2004
quarter. For the first half of 2005, our revenues of $39.6
million from open-end mutual funds were 5.0% lower than the
$41.7 million recorded in the 2004 period. Closed-end fund
revenues increased 16.2% to $9.5 million in the second quarter
2005 up from $8.1 million in the prior year's quarter.
Revenues from our closed-end funds increased 12.0% to $17.9
million in the first six months of 2005 up from $16.0 million
in the prior year's period. The increase in revenues from
closed-end funds in the 2005 periods principally resulted from
our new closed-end fund, The Gabelli Global Gold, Natural
Resources & Income Trust (AMEX: GGN) which launched on March
29, 2005 and the inclusion of The Gabelli Global Utility and
Income Trust (AMEX: GLU) which launched at the end of May 2004
for the entire 2005 periods.
Revenues from our institutional and high net worth separate
accounts business declined by 2.1% and 1.5% to $20.3 million in the
second quarter 2005 and $42.4 million in the first half of 2005, down
from $20.7 million and $43.1 million in the respective 2004 periods.
Incentive fees from investment partnerships increased by $1.5 million
in the second quarter 2005 and $2.1 million for the first six months
of 2005 versus the comparable prior year periods as the second quarter
of 2004 included a clawback in incentive fees that decreased revenues.
The increase in incentive fees was slightly offset by a decrease in
management fees for both the second quarter and first half of 2005
versus the prior year's periods.
Lower trading volume contributed to declines of 36.7% and 39.7% in
commission revenues from our institutional research affiliate, Gabelli
& Company, Inc., where revenues were $2.6 million and $5.0 million in
the second quarter and first half of 2005 versus $4.1 million and $8.4
million in the prior year's periods, respectively. Mutual fund
distribution fees of $4.9 million in the second quarter of 2005 were
slightly higher than the $4.8 million recorded in the 2004 quarter,
and of $10.0 million in the first six months of 2005, were slightly
lower than the $10.2 million recorded in the 2004 period.
-- Operating Margin - Variable compensation costs were 31.2% of
revenues for the second quarter 2005 compared to 27.0% in 2004
quarter and 31.1% versus 28.5% for the six month period. This
increase is primarily due to higher compensation costs in our
separate accounts business and investment partnerships. Higher
investment partnership variable compensation was driven by
higher incentive fee revenues in the 2005 periods as compared
to the prior year's periods as the clawback in incentive fees
during the second quarter 2004 contributed to lower
compensation costs in the 2004 periods.
Expenses not directly tied to revenues increased to $13.1 million
in the second quarter 2005, up 30.4% from $10.1 million in the prior
year's quarter and to $26.6 million for the first half of 2005, up
33.9% from $19.9 million in the prior year's period. This increase
included higher compensation costs and stock option expense, including
a one-time charge of $1.8 million relating to the accelerated of
vesting of stock options, in addition to an increase in accounting and
legal costs to comply with Sarbanes-Oxley as well as other regulatory
and corporate governance dynamics. For the six month period this
increase also included a one-time charge of $1.1 million recorded for
the impairment of goodwill related to our fixed income business and
one-time launch costs of $1.5 million for our new closed-end fund, The
Gabelli Global Gold, Natural Resources & Income Trust (AMEX: GGN). We
note that in the third and fourth quarters of 2005, our results will
benefit from the absence of costs related to stock options.
The effective tax rate for both the second quarter and six months
period of 2005 was adjusted to 37.5% versus 36.4% in the comparable
2004 periods to reflect our estimate of the current year-end tax
liability.
-- Other Income/Expense - For the second quarter 2005, there was
a $3.8 million positive swing in our other income from the
2004 second quarter. The net return from our corporate
investment portfolio improved to $4.5 million in the 2005
second quarter from $1.5 million in the prior year's quarter.
For the first half of 2005, investment income totaled $8.6
million versus $5.8 million in the comparable 2004 period. The
returns from our corporate investment portfolio in the first
half of 2005 improved despite a $3.3 million loss recorded for
the write down to fair value of certain securities held as
available for sale. This loss was partially offset by a $2.1
million unrealized gain from an investment within our
proprietary portfolio which completed an initial public
offering during the first quarter 2005.
Interest expense fell to $3.3 million and $7.2 million in the
second quarter and first half of 2005, respectively, as compared to
$4.0 million and $8.1 million in the prior year's periods. This
decrease is principally due to the repurchase of $50 million of the
$100 million 5% convertible note on April 1, 2005.
Management fee expense was $2.3 million for the quarter of 2005
versus $2.4 million for the comparable 2004 period and $4.6 million
for the first six months of 2005 lower than the $5.3 million in the
first six months of 2004.
Investment and Business Highlights
-- GAMCO, the institutional and high net worth segment of our
business, continued to produce solid investment returns for
clients during the first half of 2005 as our separate accounts
composite(a) achieved a total net return of 1.3% for the
period. GAMCO's compound annual net return is 18.1% for the
over 27 years since inception through June 30, 2005.
-- The Gabelli Equity Income Fund(b) and The Gabelli Utilities
Fund(c) are rated five Stars and four Stars overall by
Morningstar(TM), respectively and have produced returns of
1.92% and 8.91% through the first six months of 2005,
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 6/30/05, the GAMCO composite included 46 accounts with
aggregate market value of $3.8 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.
(b) The Gabelli Equity Income Fund is rated 5 Stars for the 3 and
10-year periods and 4 Stars for the 5-year period all ended 6/30/05.
The Fund was rated among 828, 576 and 259 Large Cap Value Domestic
Equity funds for the 3, 5 and 10-year periods ended 6/30/05,
respectively.
(c) The Gabelli Utilities Fund is rated 3 Stars for the 3-year
period and 4 Stars for the 5-year period, both ended 6/30/05. The Fund
was rated among 72 and 62 Utilities funds for the 3 and 5-year periods
ended 6/30/05, respectively.
Past performance does not guarantee future results. The 1 year, 5
year and 10 year average annual returns through June 30, 2005 were
10.57%, 8.19% and 12.21% for the Gabelli Equity Income Fund,
respectively and 21.42%, 5.63% and 9.17% (since inception on August
31, 1999) for the Gabelli Utilities Fund, respectively. Total returns
and average annual returns reflect changes in share price, reinvested
dividends and capital gains and are net of expenses. Due to market
volatility, current performance may be lower of higher than the
figures shown. If Investment results and the principal value of an
investment will fluctuate. When shares are redeemed, they may be worth
more or less than their original cost. Performance pertains to the
Class AAA shares only. Other share classes may have different
performance characteristics. Visit www.gabelli.com for performance
information as of the most recent month-end. Investors should consider
the investment objectives, risks, sales charges and expense of the
fund carefully before investing. The prospectus contains more complete
information about this and other matters. The prospectus should be
read carefully before investing. Call Gabelli & Company for a
prospectus at 1-800-GABELLI (422-3554).
-- Shareholders approved the re-naming of the company to GAMCO
Investors, Inc at our May 10th annual meeting. This step was
taken as part of a branding initiative to more accurately
reflect the broader product offerings of the firm and to focus
the Gabelli brand with the Private Market with a Catalyst(TM)
investment approach.
-- Gabelli Asset Management announced its sponsorship of two
Value Investing Seminars in our Graham and Dodd Lecture Series
to be held in Milan and London in July and August. These
lectures will be hosted by Bruce N. Greenwald, the Robert
Heilbrunn Professor of Finance and Asset Management at
Columbia University Graduate School of Business and the
academic Director of the Heilbrunn Center for Graham & Dodd
Investing.
-- In our mutual fund business:
-- The Gabelli Global Gold, Natural Resources & Income Trust
(AMEX: GGN), launched on March 29, 2005, received an
incremental $20 million in gross proceeds from the
exercise of the underwriters' overallotment option in May
2005. This brought total gross assets from the initial
public offering to $352 million. The team-managed
closed-end fund invests primarily in equity securities of
gold and natural resources companies and utilizes a
covered call option writing program to generate current
income.
-- The Gabelli Woodland Small Cap Value Fund (Gabelli
Woodland Fund) completed the acquisition of the
approximately $7 million of assets of FMI Woodland Small
Capitalization Value Fund (FMI Woodland Fund) in a
tax-free reorganization on June 30, 2005. Shareholders of
the FMI Woodland Fund became shareholders of the Gabelli
Woodland Fund. Gabelli Funds, LLC, a wholly owned
subsidiary of Gabelli Asset Management Inc., manages the
Gabelli Woodland Fund.
-- GAMCO Telecom Plus, a telecom sector hedge fund was launched
in July 2005. Evan Miller, who oversees the global
telecommunications sector from London, and Ivan Arteaga who
follows this sector from New York will manage the fund. Mr.
Miller's investment career spans nearly a quarter century in
the telecom industry with corporate positions at British
Telecom, Sprint and Viatel in strategy and business
development in addition to covering the European
telecommunications companies as a research analyst. Mr.
Arteaga has covered the global telecommunications sector for
over 10 years as a research analyst and associate portfolio
manager.
-- GAMCO hosted its twentieth annual meeting for high net worth
individuals during May in New York with over five hundred
clients and guests in attendance.
-- GAMCO awarded the first Graham & Dodd, Murray, Greenwald Prize
for Value Investing to Columbia University Graduate School of
Business Adjunct Professor, Joel M. Greenblatt at its May 2005
meeting.
-- Gabelli & Company, Inc., our institutional research affiliate,
hosted two investor symposiums during the second quarter:
-- The First Annual RFID (Radio Frequency Identification)
Conference was held at the Harvard Club in New York during
May. RFID technology has evolved significantly in recent
months, driven by applications in Supply Chain Management,
such as those being mandated by Wal-Mart and the
Department of Defense. Leading RFID manufacturers and
suppliers discussed the outlook for the industry and their
respective companies with the firm's institutional
clients.
-- The Third Annual Dental Conference was held at the Yale
Club in New York during June. Portfolio managers and
securities analysts met with senior management from
suppliers, distributors, and manufacturers of dental
products and services who shared their thoughts on the
market, competition, and the challenges and opportunities
in their businesses. An aging population, limited
longevity of natural teeth, increasing dental plan
coverage, and aesthetic procedures continue to drive the
demographics behind a strong dental market.
-- Gabelli & Company added eleven analysts to our sell side
research team in June and July 2005 as the firm now has
twenty-five sell side analysts covering companies and sectors
on a global basis.
-- Nancy E. Stuebe rejoined the firm as the Associate Portfolio
Manager of the Gabelli Small Cap Growth Fund in May. Ms.
Stuebe has wide ranging management, investment banking and
research experience with firms including Weiss, Peck and Greer
Investments, Advent Capital Management, Oppenheimer Capital
LP, and James D. Wolfensohn Incorporated.
-- In June, the firm filed a "shelf" registration statement on
Form S-3. The shelf process will provide us opportunistic
flexibility to sell any combination of senior and subordinate
debt securities, convertible debt securities and equity
securities (including common and preferred securities) up to a
total amount of $400 million. This authorization is in
addition to the remaining $120 million available under our
"shelf" registration filed in 2001.
Financial Highlights
We ended the quarter with roughly $668 million in cash and
investments in securities. This includes approximately $81 million, at
market value, 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 $232.3 million consists of a $50 million 5%
convertible note, $100 million of 5.5% senior notes, and $82.3 million
of 5.22% senior notes issued in connection with our mandatory
convertible securities. Expressed another way, we had $14.55 per share
of net cash and investments in securities on June 30, 2005 compared
with $13.67 per share on June 30, 2004 and $12.54 per share on
December 31, 2004. The increase in net cash per share from the end of
2004 was boosted by the settlement in February 2005 of the purchase
contracts issued in connection with our mandatory convertible
securities. The decrease during the last six months of 2004 was
principally the result of share repurchases. This liquidity coupled
with borrowing power provides us with the flexibility to be
opportunistic in ways to grow our business.
Stockholders' equity, on a GAAP basis, was $417.3 million or
$13.93 per share on June 30, 2005 compared with $392.8 million or
$13.17 per share on June 30, 2004 and $334.9 million or $11.61 per
share on December 31, 2004.
Our Board of Directors declared a quarterly dividend of $0.02 per
share that was paid on June 28, 2005 to shareholders of record on June
15, 2005. During the first half of 2005, we have paid total dividends
of $0.64 per share to all shareholders, which includes a special
dividend of $0.60 per share on January 18, 2005. This follows the
$1.16 per share of dividends paid in 2004 which included special
dividends of $0.10 per share in the second quarter 2004 and $1.00 per
share in the fourth quarter 2004.
Shares outstanding on June 30, 2005 were 29,949,142, approximately
1.2% lower than March 31, 2005 outstanding shares of 30,321,492 and
approximately 0.4% above our shares outstanding of 29,822,853 on June
30, 2004. Fully diluted shares outstanding for the second quarter of
2005 were 31,211,347 approximately 1.5% lower than first quarter 2005
fully diluted shares of 31,684,268 and approximately 2.5% lower than
our fully diluted shares of 32,010,303 for the second quarter 2004.
Our stock buyback program was initiated in March 1999. Since that
time, 3,201,226 class A common shares have been repurchased through
June 30, 2005 at an average investment of $37.08 per share. During
2005, we have repurchased 427,600 shares at an average investment of
$41.58, including 381,100 at an average investment of $41.25 during
the second quarter 2005 At the end of June, the shares currently
available to be repurchased under the program was approximately
516,000 shares.
NOTES ON NON-GAAP FINANCIAL MEASURES
A. Cash and investments as adjusted have been computed as follows:
(in millions)
12/31/04 6/30/04 6/30/05
------- ------- -------
Cash and cash equivalents $ 257.1 $ 327.5 $ 191.4
Investments (marketable securities) 305.9 276.3 371.5
------- ------- -------
Total cash and investments (marketable
securities) 563.0 603.8 562.9
Net amounts receivable/(payable) to brokers 5.2 16.8 24.3
------- ------- -------
Adjusted cash and investments (marketable
securities) 568.2 620.6 587.2
Investments (available for sale) 75.8 69.8 80.9
------- ------- -------
Total adjusted cash and investments $ 644.0 $ 690.4 $ 668.1
======= ======= =======
We believe adjusted cash and investments 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)
------------------------
June 30 %
----------------
Inc.
2004 2005 (Dec.)
-------- ------- -------
Mutual Funds:
Equities
Open end $7,852 $7,798 (0.7%)
Closed-end 3,764 4,684 24.4
Fixed Income 1,563 852 (45.5)
------- --------
Total Mutual Funds 13,179 13,334 1.2
------- --------
Institutional & High Net Worth Separate
Accounts:
Equities 13,628 13,189 (3.2)
Fixed Income 354 269 (24.0)
------- --------
Total Institutional & High Net Worth Separate
Accounts 13,982 13,458 (3.7)
------- --------
Investment Partnerships 1,061 831 (21.7)
------- --------
Total Assets Under Management $28,222 $27,623 (2.1)
======= ========
Table II: Fund Flows - 2nd Quarter 2005 (in millions)
March Net Market
31, Cash Appreciation / June 30,
2005 Flows (Depreciation) 2005
-------- --------- --------------- --------
Mutual Funds:
Equities $12,410 ($ 140) $212 $12,482
Fixed Income 1,154 (308) 6 852
-------- --------- --------------- --------
Total Mutual Funds 13,564 (448) 218 13,334
-------- --------- --------------- --------
Institutional & HNW
Separate Accounts
Equities 13,364 (478) 303 13,189
Fixed Income 266 1 2 269
-------- --------- --------------- --------
Total Institutional & HNW
Separate Accounts 13,630 (477) 305 13,458
-------- --------- --------------- --------
Investment Partnerships 854 (31) 8 831
-------- --------- --------------- --------
Total Assets Under
Management $28,048 ($ 956) $531 $27,623
======== ========= =============== ========
Assets Under Management
(in millions)
---------------------------------
Table III:
% Increase/
(decrease)
6/04 9/04 12/04 3/05 6/05 3/05 6/04
------- ------- ------- ------- ------- ---- ----
Mutual Funds
Open end $7,852 $7,534 $8,029 $7,808 $7,798 (0.1%) (0.7)
Closed-end 3,764 3,727 4,342 4,602 4,684 1.8 24.4
Fixed income 1,563 1,524 1,499 1,154 852 (26.2)(45.5)
------- ------- ------- ------- --------
Total Mutual Funds 13,179 12,785 13,870 13,564 13,334 (1.7) 1.2
------- ------- ------- ------- --------
Institutional &
HNW Separate
Accounts:
Equities 13,628 13,185 13,587 13,364 13,189 (1.3) (3.2)
Fixed Income 354 344 388 266 269 1.1 (24.0)
------- ------- ------- ------- --------
Total
Institutional &
HNW Separate
Accounts 13,982 13,529 13,975 13,630 13,458 (1.3) (3.7)
------- ------- ------- ------- --------
Investment
Partnerships 1,061 934 814 854 831 (2.7)(21.7)
------- ------- ------- ------- --------
Total Assets Under
Management $28,222 $27,248 $28,659 $28,048 $27,623 (1.5) (2.1)
======= ======= ======= ======= ========
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 Six Months
Ended Ended
June 30, June 30,
---------------------- ------------------------
% %
Inc. Inc.
2004 2005 (Dec.) 2004 2005 (Dec.)
------- ------- ------ -------- -------- -------
Revenues $60,204 $59,841 (0.6%) $123,743 $121,372 (1.9%)
Expenses 33,332 37,888 13.7 68,758 77,010 12.0
------- ------- -------- --------
Operating income
before management
fee 26,872 21,953 (18.3) 54,985 44,362 (19.3)
Investment income 1,549 4,544 193.4 5,839 8,611 47.5
Interest expense (4,035) (3,275) (18.8) (8,081) (7,204) (10.9)
------- ------- -------- --------
Other income
(expense), net (2,486) 1,269 151.0 (2,242) 1,407 162.8
------- ------- -------- --------
Income before
management fee,
income taxes and
minority interest 24,386 23,222 (4.8) 52,743 45,769 (13.2)
Management fee 2,438 2,322 5,274
4,577
------- ------- -------- --------
Income before income
taxes and minority
interest 21,948 20,900 47,469 41,192
Income taxes 7,989 7,838 17,285 15,447
Minority interest 41 107 195 108
--------------- -----------------
Net income $13,918 $12,955 (6.9) $ 29,989 $ 25,637 (14.5)
======= ======= ======== ========
Net income per share:
Basic $0.47 $0.43 (8.5) $1.00 $0.86 (14.0)
======= ======= ======== ========
Diluted $0.46 $0.43 (6.5) $0.98 $0.85 (13.3)
======= ======= ======== ========
Weighted average
shares outstanding:
Basic 29,890 30,079 0.6 29,977 29,821 (0.5)
=============== ======== ========
Diluted 32,010 31,211 (2.5) 32,108 31,447 (2.1)
======= ======= ======== ========
Reconciliation of Non-
GAAP Financial
Measures
to GAAP:
Operating income
before management
fee $26,872 $21,953 (18.3) $ 54,985 $ 44,362 (19.3)
Deduct: management
fee 2,438 2,322 5,274 4,577
------- ------- -------- --------
Operating income $24,434 $19,631 (19.7) $ 49,711 $ 39,785 (20.0)
------- ------- -------- --------
Operating margin
before management
fee 44.6% 36.7% 44.4% 36.6%
------- ------- -------- --------
Operating margin
after management fee 40.6% 32.8% 40.2% 32.8%
------- ------- -------- --------
Table V
GABELLI ASSET MANAGEMENT INC.
UNAUDITED QUARTERLY CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
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%
------- ------- ------- ------- --------
2005
-------------------------
1st 2nd
Quarter Quarter Total
-------------------------
Income Statement Data:
Revenues $61,531 $59,841 $121,372
Expenses 39,122 37,888 77,010
------- ------- --------
Operating income before
management fee 22,409 21,953 44,362
Investment income 4,067 4,544 8,611
Interest expense (3,929) (3,275) (7,204)
------- ------- --------
Other income (expense), net 138 1,269 1,407
------- ------- ---------
Income before
management fee,
income taxes and
minority interest 22,547 23,222 45,769
Management fee 2,255 2,322 4,577
------- ------- --------
Income before income
taxes and minority interest 20,292 20,900 41,192
Income taxes 7,609 7,838 15,447
Minority interest 1 107 108
------- ------- --------
Net income $12,682 $12,955 $ 25,637
======= ======= ========
Net income per share:
Basic $ 0.43 $ 0.43 $ 0.86
======= ======= ========
Diluted $ 0.42 $ 0.43 $ 0.85
======= ======= ========
Weighted average shares outstanding:
Basic 29,560 30,079 29,821
======= ======= ========
Diluted 31,684 31,211 31,447
======= ======= ========
Reconciliation of Non-GAAP
Financial Measures to GAAP:
Operating income before
management fee $22,409 $21,953 $44,362
Deduct: management fee 2,255 2,322 4,577
------- ------- --------
Operating income $20,154 $19,631 $39,785
------- ------- --------
Operating margin before
management fee 36.4% 36.7% 36.6%
------- ------- --------
Operating margin after
Management fee 32.8% 32.8% 32.8%
------- ------- --------
Table VI
GABELLI ASSET MANAGEMENT INC.
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
(In thousands)
Dec. 31, June 30, June 30,
2004 2004 2005
-------- --------- --------
ASSETS (unaudited) (unaudited)
Cash and cash equivalents $257,096 $327,458 $191,413
Investments 381,689 346,141 452,380
Receivables 46,571 45,536 55,376
Other assets 13,616 15,075 13,104
-------- -------- --------
Total assets $698,972 $734,210 $712,273
======== ======== ========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Compensation payable $ 27,645 $ 29,290 $ 31,914
Dividends payable 17,302 - -
Income taxes payable 8,526 3,402 3,050
Accrued expenses and other
liabilities 22,142 19,973 21,948
-------- -------- --------
Total operating
liabilities 75,615 52,665 56,912
5.5% Senior notes (due May 15,
2013) 100,000 100,000 100,000
5% Convertible note (conversion
price, $52 per share; note due
August 14, 2011) 100,000 100,000 50,000
5.22% Senior notes (due
February 17, 2007) - - 82,308
Mandatory convertible
securities (purchase contract
settlement date, February 17,
2005; notes due February 17,
2007) 82,308 82,870 -
-------- -------- --------
Total liabilities 357,923 335,535 289,220
Minority interest 6,171 5,872 5,735
Stockholders' equity 334,878 392,803 417,318
-------- -------- --------
Total liabilities and
stockholders' equity $698,972 $734,210 $712,273
======== ======== ========
CONTACT: Gabelli Asset Management Inc.
Michael R. Anastasio, 914-921-5147
or
For further information please visit www.gabelli.com