New York
|
1-14761
|
13-4007862
|
||
(State or other
jurisdiction of incorporation)
|
(Commission File Number)
|
(IRS Employer
Identification No.)
|
||
One Corporate Center, Rye, NY
|
10580
|
|||
(Address of principal executive offices)
|
(Zip Code)
|
Item 9.01. Financial Statements and Exhibits.
|
|
Date:
|
February 7, 2012 |
|
|
Exhibit Index
|
Exhibit No.
|
|
99.1 | GAMCO’s Press Release, dated February 7, 2012. |
For Immediate Release:
|
Contact:
|
Robert S. Zuccaro
|
Executive Vice President
and Chief Financial Officer
|
||
(914) 921-5088
|
||
For further information please visit
|
||
www.gabelli.com
|
-
|
Assets Under Management End Year up 4.8% at $34.1 billion
|
-
|
Operating Income increases to record $113.3 million
|
-
|
EPS of $2.61 per share vs. $2.52 per share was crimped by $0.48 per
share negative swing in other income
|
Financial Highlights
|
Fourth Quarter
|
Full Year
|
||||||||||||||||||||||
2011
|
2010
|
D | % | 2011 | 2010 | D | % | |||||||||||||||||
AUM (in millions)
|
$ | 34,085 | $ | 32,522 | 4.8 | % | $ | 34,085 | $ | 32,522 | 4.8 | % | ||||||||||||
Revenues
|
84,991 | 95,440 | (10.9 | ) | 327,128 | 280,380 | 16.7 | |||||||||||||||||
Operating income:
|
||||||||||||||||||||||||
before management fee
|
35,520 | 34,215 | 3.8 | 125,564 | 103,042 | 21.9 | ||||||||||||||||||
after management fee
|
31,376 | 29,570 | 6.1 | 113,294 | 91,029 | 24.5 | ||||||||||||||||||
Operating margin:
|
||||||||||||||||||||||||
before management fee
|
41.8 | % | 35.8 | % | 38.4 | % | 36.8 | % | ||||||||||||||||
after management fee
|
36.9 | % | 31.0 | % | 34.6 | % | 32.5 | % | ||||||||||||||||
Other income (expense)
|
5,959 | 13,038 | (54.3 | ) | (2,852 | ) | 18,312 | n/m | ||||||||||||||||
Net income attributable to GAMCO
|
23,693 | 26,911 | (12.0 | ) | 69,682 | 68,792 | 1.3 | |||||||||||||||||
Net income attributable to GAMCO per share
|
$ | 0.89 | $ | 0.99 | (10.1 | %) | $ | 2.61 | $ | 2.52 | 3.6 | % | ||||||||||||
Shares outstanding at December 31
|
26,755 | 27,053 |
-
|
Our open-end equity funds’ AUM were $12.3 billion on December 31, 2011, 9.1% higher than the $11.3 billion on December 31, 2010 and 7.0% above the $11.5 billion on September 30, 2011. Net cash flows into our open-end equity funds topped $1.3 billion during 2011, almost 20% ahead of the $1.1 billion in net cash flows in 2010.
|
-
|
Our closed-end funds had AUM of $5.8 billion on December 31, 2011, climbing 6.0% from $5.5 billion on December 31, 2010 and increasing 8.3% from the $5.4 billion on September 30, 2011. Net additions to AUM, largely comprised of preferred stock and rights offerings and the launch of one new fund and offset by shareholder distributions and share repurchases, totaled $0.4 billion in 2011 versus $0.1 billion in 2010.
|
-
|
Our institutional and private wealth management business ended the quarter with $13.5 billion in AUM, down 0.7% from the $13.6 billion on December 31, 2010 but 12.5% higher than the September 30, 2011 level of $12.0 billion. Net cash flows, which encompassed new and closed accounts as well as additional investments or withdrawals from existing accounts, totaled $0.2 billion in 2011 versus net outflows of $0.3 billion in 2010.
|
-
|
Our investment partnerships’ AUM were $605 million on December 31, 2011 versus $515 million on December 31, 2010 and $627 million on September 30, 2011. Net cash inflows in 2011 were $77 million.
|
-
|
The GAMCO International SICAV, our Luxembourg based UCITS fund which has two sub-funds, the GAMCO Strategic Value and the GAMCO Merger Arbitrage, was initially seeded with $100 million of proprietary money. At December 31, 2011, AUM was $105 million.
|
-
|
AUM in The Gabelli U.S. Treasury Money Market Fund, our 100% U.S. Treasury money market fund, which is ranked #1 by Lipper based on total return among 70 U.S. Treasury Money Market Funds for the twelve month period ended December 31, 2011, were $1.8 billion at December 31, 2011, increasing 12.9% from the $1.6 billion at December 31, 2010 but 3.7% lower from the $1.9 billion at September 30, 2011. We continue to provide financial support to our money market fund during this unusually low interest rate environment. 1
|
-
|
In addition to management fees, we earn incentive fees for certain institutional client assets, assets attributable to preferred issues for our closed-end funds, our GDL Fund (NYSE: GDL) and investment partnership assets. As of December 31, 2011, assets with incentive based fees were $3.6 billion, 2.7% lower than the $3.7 billion on December 31, 2010 but 5.9% above the $3.4 billion on September 30, 2011. The majority of these assets have calendar year-end measurement periods; therefore, our incentive fees are primarily recognized in the fourth quarter when the uncertainty is removed at the end of the annual measurement period.
|
-
|
Open-end fund revenues for the fourth quarter 2011 were $30.0 million versus $27.3 million in the fourth quarter 2010, an increase of 9.9%. Driving this growth was a 13.4% increase in revenues from the open-end equity funds. Average AUM for open-end equity funds rose 13.1% from the prior year quarter. Average AUM for all open-end funds were 12.9% higher at $14.0 billion in the 2011 quarter versus $12.4 billion in the prior year quarter.
|
-
|
Our closed-end fund revenues declined 26.1% to $16.7 million in the fourth quarter 2011 from $22.6 million in the fourth quarter 2010, entirely due to lower incentive fees earned. Fourth quarter 2011 incentive fees were $7.1 million lower, at $5.0 million compared to $12.1 million earned in the 2010 fourth quarter. Average closed-end fund AUM, excluding certain closed-end fund preferred share assets that generate annual performance based fees, rose 10.2% from the prior year quarter. Asset growth was driven by market performance and benefited from the launch of our new fund, the GAMCO Natural Resources, Gold & Income Trust by Gabelli (NYSE: GNT), which added $392 million in AUM during the first quarter of 2011 as well as $317 million from at the market offerings of the GAMCO Global Gold, Natural Resources & Income Trust by Gabelli (NYSE: GGN).
|
-
|
Institutional and private wealth management account revenues, which are generally based upon beginning of quarter AUM, decreased 25.4% to $20.3 million in the fourth quarter 2011 from $27.2 million in fourth quarter 2010. The decrease was directly related to lower incentive fees. During the fourth quarter 2011, we earned $1.7 million in incentive fees, a decrease of $7.4 million from the fourth quarter 2010 amount of $9.1 million. Certain of the performance fee accounts shifted from annual to quarterly measurement periods which contributed to this decrease. Incentive fees earned in the first three quarters of 2011 which were previously measured and recorded in the fourth quarter of 2010 totaled $3.7 million. In the fourth quarter of 2010 incentive fees from these accounts totaled $4.7 million.
|
-
|
Investment partnership revenues for fourth quarter 2011 were $3.5 million, a decrease of 18.6% from $4.3 million in the fourth quarter 2010. Incentive fees were lower by $1.4 million in the 2011 fourth quarter versus the 2010 fourth quarter and more than offset the increase in investment advisory fees of $0.6 million, which were driven by the 23.8% increase in average assets managed.
|
-
|
Open-end fund revenues for the year ended December 31, 2011 were $119.6 million versus $96.5 million for the year ended December 31, 2010, an increase of 23.9% resulting from a 24.2% increase in average AUM.
|
-
|
Our closed-end fund revenues increased $3.5 million or 7.1% to $53.1 million for the year ended December 31, 2011 from $49.6 million in 2010. Investment advisory fees rose $10.6 million or $28.3%, to $48.1 million in 2011 versus $37.5 million in 2010, which were partially offset by a $7.1 million decline in incentive fees, to $5.0 million in 2011 as compared to $12.1 million during 2010. Average AUM in our closed-end funds, excluding certain closed-end fund preferred share assets for which we earn our fees annually based upon performance, rose 26.9% and include $392 million in AUM from the launch of GNT during the first quarter of 2011.
|
-
|
Institutional and private wealth management account revenues increased 12.7% to $88.6 million for the year ended December 31, 2011 from $78.6 million for the year ended December 31, 2010. This increase was primarily related to higher AUM resulting from market appreciation, partially offset by lower incentive fees. For 2011, we earned $8.2 million in incentive fees as compared to $10.8 million in 2010.
|
-
|
Investment partnership revenues for the year ended December 31, 2011 fell 1.5% to $6.4 million from $6.5 million in 2010, due primarily to $1.4 million in lower incentive fees partially offset by an increase in investment advisory fees resulting from higher AUM.
|
-
|
GAMCO Merger Arbitrage, a sub-fund within the GAMCO International SICAV, provides non-U.S. investors with direct access to GAMCO’s merger arbitrage strategy in a UCITS form. The sub-fund is being offered to retail and institutional investors and initially registered retail shares in Switzerland, Germany and Italy with currency classes being offered including U.S. Dollar, Swiss Franc and Euro. This fund joins our initial offering, the GAMCO Strategic Value Fund. During 2011, we incurred $0.6 million in start-up costs associated with these products.
|
-
|
In May 2011, Mitsuyoshi Kikuchi joined us to establish and lead our Tokyo office, joining Caesar Bryan and Mark Yim in strengthening our research in Japan. This new office, along with our current research offices in Shanghai and Hong Kong, further underscores our commitment to building our presence and capabilities in Asia and the Pacific Far East.
|
-
|
As part of our rebranding efforts:
|
-
|
During the year, we received our highest ever single mandate in our Private Wealth Management business.
|
-
|
During the year Gabelli & Company hosted its 35th Automotive Aftermarket Symposium, 21st annual Pump Valve & Motor Symposium, 17th annual Aircraft Supplier Conference, 4th Annual Best Ideas Conference, 3rd annual Specialty Chemicals Conference and 3rd annual Movie Industry Conference.
|
-
|
Mario Gabelli was named Money Manager of the Year by Institutional Investor for its second annual U.S. Investment Management Awards. The award selection is based on performance as well as a survey of U.S. institutions. In 2010, GAMCO returned 28.6% for institutional clients; and since inception in 1977, it has generated annualized returns of 16.3%.
|
-
|
GAM STAR GAMCO US Equity Fund was awarded Standard & Poor’s (“S&P”) AAA Rating for the eighth consecutive year. Our investment team is especially honored by this S&P AAA rating, which again underscores our research driven Private Market Value with a CatalystTM approach to “stock picking”. The S&P AAA rating is a widely acknowledged measure of excellence, awarded only when, in S&P’s words:
|
A.
|
Stockholders’ book value per share:
|
(in millions, except per share data)
|
12/31/2011
|
9/30/2011
|
12/31/2010
|
|||||||||
Stockholders' book value
|
$ | 403.97 | $ | 404.00 | $ | 386.03 | ||||||
Shares outstanding
|
26.75 | 26.77 | 27.05 | |||||||||
Stockholders' book value per share
|
$ | 15.10 | $ | 15.09 | $ | 14.27 |
B.
|
Operating income before management fee expense is used by management to evaluate its business operations. We believe this measure is useful in illustrating the operating results of GAMCO Investors, Inc. (the “Company”) as management fee expense is based on pre-tax income before management fee expense, which 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 expense to operating income is provided in Table VII.
|
C.
|
Accelerated RSA expense, net of management fee and tax benefit, per diluted share:
|
Fourth
|
||||
(in thousands, except per share data)
|
Quarter 2010
|
|||
Accelerated RSA expense
|
$ | 5,797 | ||
Related benefits and tax benefit
|
2,521 | |||
Net expense
|
$ | 3,276 | ||
Accelerated RSA expense per share
|
$ | 0.12 | ||
Diluted weighted average shares outstanding
|
27,260 |
D.
|
Operating income before management fee expense per share and other income, net per share is used by management for purposes of evaluating its business operations. We believe this measure is useful in comparing the operating and non-operating results of the Company for the purposes of understanding the composition of net income per fully diluted share. The negative swing of $21.3 million in other income is calculated by taking the expense of $3.0 million in 2011 and subtracting the income of $18.3 million in 2010. The impact on fully diluted earnings per share of ($0.52) is derived by making certain necessary adjustments, as shown in the table below, to arrive at a net impact for each period and then calculating the difference. The reconciliation of operating income before management fee expense per share and other income, net per share to net income per fully diluted share, is provided below.
|
4th Quarter
|
Full Year
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Operating income before management fee
|
$ | 35,520 | $ | 34,215 | $ | 125,564 | $ | 103,042 | ||||||||
Management fee expense
|
(3,561 | ) | (3,341 | ) | (12,568 | ) | (10,182 | ) | ||||||||
Tax expense
|
(11,803 | ) | (10,829 | ) | (41,710 | ) | (33,398 | ) | ||||||||
Noncontrolling interest (expense)/income
|
37 | 305 | 609 | 461 | ||||||||||||
Operating income (after management fee and taxes)
|
20,193 | 20,350 | 71,895 | 59,923 | ||||||||||||
Per fully diluted share
|
$ | 0.76 | $ | 0.75 | $ | 2.69 | $ | 2.12 | ||||||||
Other income, net
|
$ | 5,959 | $ | 13,038 | $ | (2,852 | ) | $ | 18,312 | |||||||
Management fee expense
|
(583 | ) | (1,304 | ) | 298 | (1,831 | ) | |||||||||
Tax expense
|
(1,986 | ) | (4,116 | ) | 943 | (5,928 | ) | |||||||||
Noncontrolling interest expense
|
110 | (1,057 | ) | (602 | ) | (1,684 | ) | |||||||||
Other income, net (after management fee and taxes)
|
$ | 3,500 | $ | 6,561 | $ | (2,213 | ) | $ | 8,869 | |||||||
Add back interest on convertible notes
|
$ | - | $ | 139 | $ | - | $ | 4,461 | ||||||||
Management fee expense
|
- | (14 | ) | - | (446 | ) | ||||||||||
Tax expense
|
- | (47 | ) | - | (1,494 | ) | ||||||||||
Net income attributable to interest add back
|
- | 78 | - | 2,521 | ||||||||||||
Per fully diluted share
|
$ | 0.13 | $ | 0.24 | $ | (0.08 | ) | $ | 0.40 | |||||||
Net income per fully diluted share
|
$ | 0.89 | $ | 0.99 | $ | 2.61 | $ | 2.52 | ||||||||
Diluted weighted average shares outstanding
|
26,584 | 27,260 | 26,724 | 28,348 |
The Company reported Assets Under Management as follows (in millions):
|
|||||||||||||||||||||
Table I: Fund Flows - 4th Quarter 2011
|
|||||||||||||||||||||
Closed-end Fund
|
|||||||||||||||||||||
Market
|
distributions,
|
||||||||||||||||||||
September 30,
|
appreciation/
|
Net cash
|
net of
|
December 31,
|
|||||||||||||||||
2011
|
(depreciation)
|
flows
|
reinvestments
|
2011
|
|||||||||||||||||
Equities:
|
|||||||||||||||||||||
Open-end Funds
|
$ | 11,469 | $ | 919 | $ | (115 | ) | $ | - | $ | 12,273 | ||||||||||
Closed-end Funds
|
5,355 | 476 | 79 | (111 | ) | 5,799 | |||||||||||||||
Institutional & PWM - direct
|
9,644 | 1,207 | 2 | - | 10,853 | ||||||||||||||||
Institutional & PWM - sub-advisory
|
2,326 | 297 | (23 | ) | - | 2,600 | |||||||||||||||
Investment Partnerships
|
627 | 5 | (27 | ) | - | 605 | |||||||||||||||
SICAV
|
- | - | 105 |
(b)
|
- | 105 | |||||||||||||||
Total Equities
|
29,421 | 2,904 | 21 | (111 | ) | 32,235 | |||||||||||||||
Fixed Income:
|
|||||||||||||||||||||
Money-Market Fund
|
1,895 | - | (71 | ) | - | 1,824 | |||||||||||||||
Institutional & PWM
|
26 | - | - | - | 26 | ||||||||||||||||
Total Fixed Income
|
1,921 | - | (71 | ) | - | 1,850 | |||||||||||||||
Total Assets Under Management
|
$ | 31,342 | $ | 2,904 | $ | (50 | ) | $ | (111 | ) | $ | 34,085 |
Table II: Fund Flows - Full Year 2011
|
|||||||||||||||||||||
Closed-end Fund
|
|||||||||||||||||||||
Market
|
distributions,
|
||||||||||||||||||||
December 31,
|
appreciation/
|
Net cash
|
net of
|
December 31,
|
|||||||||||||||||
2010
|
(depreciation)
|
flows
|
reinvestments
|
2011
|
|||||||||||||||||
Equities:
|
|||||||||||||||||||||
Open-end Funds
|
$ | 11,252 | $ | (309 | ) | $ | 1,330 | $ | - | $ | 12,273 | ||||||||||
Closed-end Funds
|
5,471 | (80 | ) | 804 |
(a)
|
(396 | ) | 5,799 | |||||||||||||
Institutional & PWM - direct
|
11,005 | (316 | ) | 164 | - | 10,853 | |||||||||||||||
Institutional & PWM - sub-advisory
|
2,637 | (78 | ) | 41 | - | 2,600 | |||||||||||||||
Investment Partnerships
|
515 | 13 | 77 | - | 605 | ||||||||||||||||
SICAV
|
- | - | 105 |
(b)
|
- | 105 | |||||||||||||||
Total Equities
|
30,880 | (770 | ) | 2,521 | (396 | ) | 32,235 | ||||||||||||||
Fixed Income:
|
|||||||||||||||||||||
Money-Market Fund
|
1,616 | - | 208 | - | 1,824 | ||||||||||||||||
Institutional & PWM
|
26 | - | - | - | 26 | ||||||||||||||||
Total Fixed Income
|
1,642 | - | 208 | - | 1,850 | ||||||||||||||||
Total Assets Under Management
|
$ | 32,522 | $ | (770 | ) | $ | 2,729 | $ | (396 | ) | $ | 34,085 | |||||||||
(a) Includes $392 million from the launch of a new closed-end fund.
|
|||||||||||||||||||||
(b) Includes $100 million of proprietary seed capital.
|
Table III: Assets Under Management
|
||||||||||||
December 31,
|
December 31,
|
%
|
||||||||||
2010
|
2011
|
Inc.(Dec.)
|
||||||||||
Equities:
|
||||||||||||
Open-end Funds
|
$ | 11,252 | $ | 12,273 | 9.1 | % | ||||||
Closed-end Funds
|
5,471 | 5,799 | 6.0 | |||||||||
Institutional & PWM - direct
|
11,005 | 10,853 | (1.4 | ) | ||||||||
Institutional & PWM - sub-advisory
|
2,637 | 2,600 | (1.4 | ) | ||||||||
Investment Partnerships
|
515 | 605 | 17.5 | |||||||||
SICAV
|
- | 105 | n/m | |||||||||
Total Equities
|
30,880 | 32,235 | 4.4 | |||||||||
Fixed Income:
|
||||||||||||
Money-Market Fund
|
1,616 | 1,824 | 12.9 | |||||||||
Institutional & PWM
|
26 | 26 | - | |||||||||
Total Fixed Income
|
1,642 | 1,850 | 12.7 | |||||||||
Total Assets Under Management
|
$ | 32,522 | $ | 34,085 | 4.8 | % |
Table IV: Assets Under Management by Quarter
|
||||||||||||||||||||||||||||
% Increase/
|
||||||||||||||||||||||||||||
(decrease) from
|
||||||||||||||||||||||||||||
12/10 | 3/11 | 6/11 | 9/11 | 12/11 | 12/10 | 9/11 | ||||||||||||||||||||||
Equities:
|
||||||||||||||||||||||||||||
Open-end Funds
|
$ | 11,252 | $ | 12,348 | $ | 12,912 | $ | 11,469 | $ | 12,273 | 9.1 | % | 7.0 | % | ||||||||||||||
Closed-end Funds
|
5,471 | 6,170 | 6,259 | 5,355 | 5,799 | 6.0 | 8.3 | |||||||||||||||||||||
Institutional & PWM - direct
|
11,005 | 11,780 | 11,735 | 9,644 | 10,853 | (1.4 | ) | 12.5 | ||||||||||||||||||||
Institutional & PWM - sub-advisory
|
2,637 | 2,937 | 2,953 | 2,326 | 2,600 | (1.4 | ) | 11.8 | ||||||||||||||||||||
Investment Partnerships
|
515 | 547 | 609 | 627 | 605 | 17.5 | (3.5 | ) | ||||||||||||||||||||
SICAV
|
- | - | - | - | 105 | n/m | n/m | |||||||||||||||||||||
Total Equities
|
30,880 | 33,782 | 34,468 | 29,421 | 32,235 | 4.4 | 9.6 | |||||||||||||||||||||
Fixed Income:
|
||||||||||||||||||||||||||||
Money-Market Fund
|
1,616 | 1,583 | 1,643 | 1,895 | 1,824 | 12.9 | (3.7 | ) | ||||||||||||||||||||
Institutional & PWM
|
26 | 26 | 26 | 26 | 26 | - | - | |||||||||||||||||||||
Total Fixed Income
|
1,642 | 1,609 | 1,669 | 1,921 | 1,850 | 12.7 | (3.7 | ) | ||||||||||||||||||||
Total Assets Under Management
|
$ | 32,522 | $ | 35,391 | $ | 36,137 | $ | 31,342 | $ | 34,085 | 4.8 | % | 8.8 | % |
Table V
|
||||||||||||
GAMCO INVESTORS, INC.
|
||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
||||||||||||
(Dollars in thousands, except per share data)
|
||||||||||||
For the Three Months Ended December 31,
|
||||||||||||
% Inc.
|
||||||||||||
2011
|
2010
|
(Dec.)
|
||||||||||
Investment advisory and incentive fees
|
$ | 70,617 | $ | 81,407 | (13.3 | %) | ||||||
Institutional research services
|
2,977 | 4,647 | (35.9 | ) | ||||||||
Distribution fees and other income
|
11,397 | 9,386 | 21.4 | |||||||||
Total revenues
|
84,991 | 95,440 | (10.9 | ) | ||||||||
Compensation costs
|
33,178 | 45,095 | (26.4 | ) | ||||||||
Distribution costs
|
10,319 | 9,208 | 12.1 | |||||||||
Other operating expenses
|
5,974 | 6,922 | (13.7 | ) | ||||||||
Total expenses
|
49,471 | 61,225 | (19.2 | ) | ||||||||
Operating income before management fee
|
35,520 | 34,215 | 3.8 | |||||||||
Investment income
|
10,268 | 15,029 | (31.7 | ) | ||||||||
Interest expense
|
(4,309 | ) | (1,991 | ) | 116.4 | |||||||
Other income, net
|
5,959 | 13,038 | (54.3 | ) | ||||||||
Income before management fee and income taxes
|
41,479 | 47,253 | (12.2 | ) | ||||||||
Management fee expense
|
4,144 | 4,645 | (10.8 | ) | ||||||||
Income before income taxes
|
37,335 | 42,608 | (12.4 | ) | ||||||||
Income tax expense
|
13,789 | 14,945 | (7.7 | ) | ||||||||
Net income
|
23,546 | 27,663 | (14.9 | ) | ||||||||
Net income attributable to noncontrolling interests
|
(147 | ) | 752 | (119.5 | ) | |||||||
Net income attributable to GAMCO Investors, Inc.
|
$ | 23,693 | $ | 26,911 | (12.0 | ) | ||||||
Net income attributable to GAMCO Investors, Inc. per share:
|
||||||||||||
Basic
|
$ | 0.89 | $ | 1.00 | (11.0 | ) | ||||||
Diluted
|
$ | 0.89 | $ | 0.99 | (10.1 | ) | ||||||
Weighted average shares outstanding (a):
|
||||||||||||
Basic
|
26,488 | 26,851 | (1.4 | ) | ||||||||
Diluted
|
26,584 | 27,260 | (2.5 | %) | ||||||||
Notes:
|
||||||||||||
(a) Actual shares outstanding at December 31, 2011 were 26,754,895, including 275,600 RSAs.
|
||||||||||||
See GAAP to non-GAAP reconciliation on page 16.
|
Table VI
|
|||||||||||||
GAMCO INVESTORS, INC.
|
|||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
|||||||||||||
(Dollars in thousands, except per share data)
|
|||||||||||||
For the Years Ended December 31,
|
|||||||||||||
% Inc.
|
|||||||||||||
2011
|
2010
|
(Dec.)
|
|||||||||||
Investment advisory and incentive fees
|
$ | 268,024 | $ | 231,269 | 15.9 | % | |||||||
Institutional research services
|
14,288 | 16,600 | (13.9 | ) | |||||||||
Distribution fees and other income
|
44,816 | 32,511 | 37.8 | ||||||||||
Total revenues
|
327,128 | 280,380 | 16.7 | ||||||||||
Compensation costs
|
132,970 | 123,840 | 7.4 | ||||||||||
Distribution costs
|
44,427 | 31,048 | 43.1 | ||||||||||
Other operating expenses
|
24,167 | 22,450 | 7.6 | ||||||||||
Total expenses
|
201,564 |
(a)
|
177,338 | 13.7 | |||||||||
Operating income before management fee
|
125,564 | 103,042 | 21.9 | ||||||||||
Investment income
|
12,145 | 30,296 | (59.9 | ) | |||||||||
Interest expense
|
(14,997 | ) | (11,984 | ) | 25.1 | ||||||||
Other income/(expense), net
|
(2,852 | ) | 18,312 | n/m | |||||||||
Income before management fee and income taxes
|
122,712 | 121,354 | 1.1 | ||||||||||
Management fee expense
|
12,270 | 12,013 | 2.1 | ||||||||||
Income before income taxes
|
110,442 | 109,341 | 1.0 | ||||||||||
Income tax expense
|
40,767 | 39,326 | 3.7 | ||||||||||
Net income
|
69,675 | 70,015 | (0.5 | ) | |||||||||
Net income attributable to noncontrolling interests
|
(7 | ) | 1,223 | (100.6 | ) | ||||||||
Net income attributable to GAMCO Investors, Inc.
|
$ | 69,682 | $ | 68,792 | 1.3 | ||||||||
Net income attributable to GAMCO Investors, Inc. per share:
|
|||||||||||||
Basic
|
$ | 2.62 | $ | 2.55 | 2.7 | ||||||||
Diluted
|
$ | 2.61 | $ | 2.52 | 3.6 | ||||||||
Weighted average shares outstanding (b):
|
|||||||||||||
Basic
|
26,636 | 26,959 | (1.2 | ) | |||||||||
Diluted
|
26,724 | 28,348 | (5.7 | %) | |||||||||
Notes:
|
|||||||||||||
(a) Includes $0.4 million in compensation, $4.7 million in distribution costs and $0.5 million in other operating expenses directly related to the launch of a new closed-end fund.
|
|||||||||||||
(b) Actual shares outstanding at December 31, 2011 were 26,754,895, including 275,600 RSAs.
|
|||||||||||||
See GAAP to non-GAAP reconciliation on page 16.
|
Table VII
|
|||||||||||||||||||||||||||||||||
GAMCO INVESTORS, INC.
|
|||||||||||||||||||||||||||||||||
UNAUDITED QUARTERLY CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
|||||||||||||||||||||||||||||||||
(Dollars in thousands, except per share data)
|
|||||||||||||||||||||||||||||||||
2011
|
2010
|
||||||||||||||||||||||||||||||||
1st
|
2nd
|
3rd
|
4th
|
1st
|
2nd
|
3rd
|
4th
|
||||||||||||||||||||||||||
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Full Year
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Full Year
|
||||||||||||||||||||||||
Income Statement Data:
|
|||||||||||||||||||||||||||||||||
Revenues
|
$ | 76,905 | $ | 85,081 | $ | 80,151 | $ | 84,991 | $ | 327,128 | $ | 59,998 | $ | 62,499 | $ | 62,443 | $ | 95,440 | $ | 280,380 | |||||||||||||
Expenses
|
53,032 |
(a)
|
50,958 | 48,103 | 49,471 | 201,564 | 38,180 | 38,539 | 39,394 | 61,225 |
(b)
|
177,338 | |||||||||||||||||||||
Operating income before
|
|||||||||||||||||||||||||||||||||
management fee
|
23,873 | 34,123 | 32,048 | 35,520 | 125,564 | 21,818 | 23,960 | 23,049 | 34,215 | 103,042 | |||||||||||||||||||||||
Investment income/(loss)
|
10,676 | 5,530 | (14,329 | ) | 10,268 | 12,145 | 6,047 | (6,708 | ) | 15,928 | 15,029 | 30,296 | |||||||||||||||||||||
Interest expense
|
(2,867 | ) | (3,403 | ) | (4,418 | ) | (4,309 | ) | (14,997 | ) | (3,292 | ) | (3,406 | ) | (3,295 | ) | (1,991 | ) | (11,984 | ) | |||||||||||||
Other income/(expense), net
|
7,809 | 2,127 | (18,747 | ) | 5,959 | (2,852 | ) | 2,755 | (10,114 | ) | 12,633 | 13,038 | 18,312 | ||||||||||||||||||||
Income before management
|
|||||||||||||||||||||||||||||||||
fee and income taxes
|
31,682 | 36,250 | 13,301 | 41,479 | 122,712 | 24,573 | 13,846 | 35,682 | 47,253 | 121,354 | |||||||||||||||||||||||
Management fee expense
|
3,113 | 3,626 | 1,387 | 4,144 | 12,270 | 2,448 | 1,380 | 3,540 | 4,645 | 12,013 | |||||||||||||||||||||||
Income before income taxes
|
28,569 | 32,624 | 11,914 | 37,335 | 110,442 | 22,125 | 12,466 | 32,142 | 42,608 | 109,341 | |||||||||||||||||||||||
Income tax expense
|
10,288 | 11,945 | 4,745 | 13,789 | 40,767 | 8,294 | 4,401 | 11,686 | 14,945 | 39,326 | |||||||||||||||||||||||
Net income
|
18,281 | 20,679 | 7,169 | 23,546 | 69,675 | 13,831 | 8,065 | 20,456 | 27,663 | 70,015 | |||||||||||||||||||||||
Net income/(loss) attributable
|
|||||||||||||||||||||||||||||||||
to noncontrolling interests
|
638 | 32 | (530 | ) | (147 | ) | (7 | ) | 105 | 16 | 350 | 752 | 1,223 | ||||||||||||||||||||
Net income attributable to
|
|||||||||||||||||||||||||||||||||
GAMCO Investors, Inc.
|
$ | 17,643 | $ | 20,647 | $ | 7,699 | $ | 23,693 | $ | 69,682 | $ | 13,726 | $ | 8,049 | $ | 20,106 | $ | 26,911 | $ | 68,792 | |||||||||||||
Net income attributable to
|
|||||||||||||||||||||||||||||||||
GAMCO Investors, Inc.
|
|||||||||||||||||||||||||||||||||
per share:
|
|||||||||||||||||||||||||||||||||
Basic
|
$ | 0.66 | $ | 0.77 | $ | 0.29 | $ | 0.89 | $ | 2.62 | $ | 0.50 | $ | 0.30 | $ | 0.75 | $ | 1.00 | $ | 2.55 | |||||||||||||
Diluted
|
$ | 0.65 | $ | 0.77 | $ | 0.29 | $ | 0.89 | $ | 2.61 | $ | 0.50 | $ | 0.30 | $ | 0.73 | $ | 0.99 | $ | 2.52 | |||||||||||||
Weighted average shares outstanding:
|
|||||||||||||||||||||||||||||||||
Basic
|
26,901 | 26,665 | 26,496 | 26,488 | 26,636 | 27,184 | 26,979 | 26,828 | 26,851 | 26,959 | |||||||||||||||||||||||
Diluted
|
27,008 | 26,733 | 26,576 | 26,584 | 26,724 | 28,148 | 27,219 | 28,364 | 27,260 | 28,348 | |||||||||||||||||||||||
Reconciliation of non-GAAP
|
|||||||||||||||||||||||||||||||||
financial measures to GAAP:
|
|||||||||||||||||||||||||||||||||
Operating income before
|
|||||||||||||||||||||||||||||||||
management fee
|
$ | 23,873 | $ | 34,123 | $ | 32,048 | $ | 35,520 | $ | 125,564 | $ | 21,818 | $ | 23,960 | $ | 23,049 | $ | 34,215 | $ | 103,042 | |||||||||||||
Deduct: management fee expense
|
3,113 | 3,626 | 1,387 | 4,144 | 12,270 | 2,448 | 1,380 | 3,540 | 4,645 | 12,013 | |||||||||||||||||||||||
Operating income
|
$ | 20,760 | $ | 30,497 | $ | 30,661 | $ | 31,376 | $ | 113,294 | $ | 19,370 | $ | 22,580 | $ | 19,509 | $ | 29,570 | $ | 91,029 | |||||||||||||
Operating margin before
|
|||||||||||||||||||||||||||||||||
management fee
|
31.0 | % | 40.1 | % | 40.0 | % | 41.8 | % | 38.4 | % | 36.4 | % | 38.3 | % | 36.9 | % | 35.8 | % | 36.8 | % | |||||||||||||
Operating margin after
|
|||||||||||||||||||||||||||||||||
management fee
|
27.0 | % | 35.8 | % | 38.3 | % | 36.9 | % | 34.6 | % | 32.3 | % | 36.1 | % | 31.2 | % | 31.0 | % | 32.5 | % | |||||||||||||
(a) Includes $5.6 million in expenses directly related to the launch of a new closed-end fund.
|
|||||||||||||||||||||||||||||||||
(b) Includes $5.8 million in expense from the acceleration of vesting of RSAs.
|
Table VIII
|
||||||||
GAMCO INVESTORS, INC.
|
||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
|
||||||||
(Dollars in thousands, except per share data)
|
||||||||
December 31,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
ASSETS
|
||||||||
Cash and cash equivalents
|
$ | 261,340 | $ | 169,601 | ||||
Investments
|
413,440 | 388,357 | ||||||
Receivable from brokers
|
20,913 | 46,621 | ||||||
Other receivables
|
43,424 | 51,744 | ||||||
Income tax receivable
|
39 | 325 | ||||||
Other assets
|
17,593 | 16,088 | ||||||
Total assets
|
$ | 756,749 | $ | 672,736 | ||||
LIABILITIES AND EQUITY
|
||||||||
Payable to brokers
|
$ | 10,770 | $ | 1,554 | ||||
Income taxes payable and deferred tax liabilities
|
15,296 | 23,225 | ||||||
Compensation payable
|
17,695 | 23,771 | ||||||
Securities sold short, not yet purchased
|
5,488 | 19,299 | ||||||
Accrued expenses and other liabilities
|
30,899 | 29,715 | ||||||
Sub-total
|
80,148 | 97,564 | ||||||
5.5% Senior notes (due May 15, 2013)
|
99,000 | 99,000 | ||||||
5.875% Senior notes (due June 1, 2021)
|
100,000 | - | ||||||
Zero coupon subordinated debentures (due December 31, 2015) (a)
|
64,119 | 59,580 | ||||||
Total debt
|
263,119 | 158,580 | ||||||
Total liabilities
|
343,267 | 256,144 | ||||||
Redeemable noncontrolling interests
|
1,150 | 26,984 | ||||||
GAMCO Investors, Inc.'s stockholders' equity
|
403,972 | 386,029 | ||||||
Noncontrolling interests
|
8,360 | 3,579 | ||||||
Total equity
|
412,332 | 389,608 | ||||||
Total liabilities and equity
|
$ | 756,749 | $ | 672,736 | ||||
(a) The zero coupon subordinated debentures due December 31, 2015 have a face value of $86.3 million.
|
GABELLI/GAMCO FUNDS
|
Gabelli/GAMCO Funds Lipper Rankings as of December 31, 2011
|
||||||||
1 Yr - 12/31/10-12/31/11
|
3 Yrs - 12/31/08-12/31/11
|
5 Yrs - 12/31/06-12/31/11
|
10 Yrs - 12/31/01-12/31/11
|
||||||
Percentile
|
Rank /
|
Percentile
|
Rank /
|
Percentile
|
Rank /
|
Percentile
|
Rank /
|
||
Fund Name
|
Lipper Category
|
Rank
|
Total Funds
|
Rank
|
Total Funds
|
Rank
|
Total Funds
|
Rank
|
Total Funds
|
Gabelli Asset; AAA
|
Multi-Cap Core Funds
|
31
|
221/729
|
20
|
123/629
|
9
|
48/549
|
10
|
28/291
|
Gabelli Value Fund; A
|
Multi-Cap Core Funds
|
25
|
176/729
|
4
|
19/629
|
16
|
85/549
|
25
|
71/291
|
Gabelli SRI; AAA
|
Global Small/Mid-Cap Funds
|
54
|
44/81
|
57
|
41/72
|
-
|
-
|
-
|
-
|
Gabelli Eq:Eq Inc; AAA
|
Equity Income Funds
|
64
|
182/285
|
17
|
40/248
|
27
|
57/212
|
7
|
7/106
|
GAMCO Growth; AAA
|
Large-Cap Core Funds
|
80
|
849/1066
|
11
|
98/958
|
40
|
325/827
|
92
|
456/498
|
Gabelli Eq:SC Gro; AAA
|
Small-Cap Core Funds
|
69
|
478/692
|
54
|
335/629
|
15
|
72/498
|
11
|
32/303
|
Gabelli Eq:Wd SCV; AAA
|
Small-Cap Core Funds
|
85
|
583/692
|
65
|
409/629
|
46
|
227/498
|
-
|
-
|
GAMCO Gl:Oppty; AAA
|
Global Large-Cap Growth
|
67
|
69/102
|
15
|
13/88
|
38
|
28/74
|
5
|
2/41
|
GAMCO Gl:Growth; AAA
|
Global Large-Cap Growth
|
24
|
24/102
|
5
|
4/88
|
23
|
17/74
|
41
|
17/41
|
GAMCO Gold; AAA
|
Precious Metal Funds
|
30
|
22/73
|
46
|
27/58
|
55
|
28/50
|
39
|
13/33
|
GAMCO Intl Gro; AAA
|
International Large-Cap Growth
|
20
|
47/240
|
6
|
12/222
|
25
|
46/190
|
31
|
35/112
|
Gabelli Dividend Growth Fund; AAA
|
Large-Cap Core Funds
|
50
|
532/1066
|
35
|
328/958
|
45
|
369/827
|
32
|
155/498
|
Gabelli Inv:ABC; AAA
|
Specialty Diversified Equity Funds
|
23
|
11/47
|
58
|
19/32
|
38
|
10/26
|
10
|
1/9
|
GAMCO Mathers; AAA
|
Specialty Diversified Equity Funds
|
59
|
28/47
|
70
|
23/32
|
67
|
18/26
|
50
|
5/9
|
Comstock Cap Val; A
|
Specialty Diversified Equity Funds
|
50
|
24/47
|
88
|
29/32
|
86
|
23/26
|
70
|
7/9
|
GAMCO Gl:Telecom; AAA
|
Telecommunications Funds
|
70
|
27/38
|
69
|
26/37
|
47
|
14/29
|
19
|
4/21
|
GAMCO Gl:Vertumnus; AAA
|
Convertible Securities Funds
|
71
|
46/64
|
48
|
24/49
|
95
|
37/38
|
91
|
30/32
|
Gabelli Utilities; AAA
|
Utility Funds
|
60
|
44/73
|
60
|
41/68
|
26
|
16/61
|
40
|
16/40
|
787:Gabelli Merg&Acq; A
|
Mid-Cap Core Funds
|
16
|
48/308
|
97
|
260/268
|
64
|
147/231
|
83
|
129/156
|
Gabelli Capital Asset Fund
|
Distributed through Insurance Channel
|
28
|
87/309
|
5
|
16/292
|
15
|
36/240
|
11
|
16/142
|
% of funds in top half
|
50.0%
|
55.0%
|
73.7%
|
77.8%
|
|||||
Data presented reflects past performance, which is no guarantee of future results. Strong rankings are not indicative of positive fund performance. Absolute performance for some
|
|||||||||
funds was negative for certain periods. Other share classes are available which may have different performance characteristics.
|
|||||||||
Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and
|
|||||||||
expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives.
|
|||||||||
Rankings are historical with capital gains and dividends reinvested and do not include the effect of loads. If an expense waiver was in effect, it may have had a material effect on the
|
|||||||||
total return or yield for the period. | |||||||||
Relative long-term investment performance remained strong with approximately 50%, 55%, 74% and 78% of firmwide mutual funds in the top half of their Lipper categories on a one-,
|
|||||||||
three-, five-, andten-year total-return basis, respectively, as of December 31, 2011.
|
|||||||||
Investors should carefully consider the investment objective, risks, charges, and expenses of each fund before investing. Each fund's prospectus contains information about these
|
|||||||||
and other matters and should be read carefully before investing. Each fund’s share price will fluctuate with changes in the market value of the fund’s portfolio securities. Stocks are
|
|||||||||
subject to market, economic and business risks that cause their prices to fluctuate. When you sell fund shares, they may be worth less than what you paid for them. Consequently,
|
|||||||||
you can lose money by investing in a fund. You can obtain a prospectus by calling 800-GABELLI (422-3554), online at www.gabelli.com, or from your financial advisor.
|
|||||||||
Distributed by G.distributors, LLC., One Corporate Center, Rye New York, 10580. Other share classes are available that have different performance characteristics.
|
|||||||||
The inception date for the Gabelli SRI Green Fund was June 1, 2007. The inception date for the Gabelli Woodland Small Cap Value Fund was December 31, 2002.
|