Delaware
|
|
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 2.02
|
|
Results of Operations and Financial Condition.
|
|
|
|
Item 9.01
|
|
Financial Statements and Exhibits.
|
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
|
·
|
AUM at $46.5 billion
|
·
|
First Quarter Earnings of $0.97 per diluted share
|
Financial Highlights
|
Q1
|
Q1
|
|||||||||||||
($'s in 000's except AUM and per share data)
|
2015
|
2014
|
%D
|
|
|||||||||||
AUM - end of period (in millions)
|
$
|
46,540
|
$
|
47,555
|
(2.1
|
%
|
)
|
||||||||
AUM - average (in millions)
|
46,772
|
46,967
|
(0.4
|
)
|
|||||||||||
Revenues
|
103,845
|
104,477
|
(0.6
|
)
|
|||||||||||
Operating income before management fee (a)
|
38,382
|
(b)
|
41,227
|
(6.9
|
)
|
||||||||||
Operating margin before management fee
|
37.0
|
%
|
39.5
|
%
|
|||||||||||
Operating income
|
33,945
|
(b)
|
36,499
|
(7.0
|
)
|
||||||||||
Operating margin
|
32.7
|
%
|
34.9
|
%
|
|||||||||||
Other income/(expense), net
|
5,993
|
6,093
|
|||||||||||||
Income before income taxes
|
39,938
|
42,592
|
(6.2
|
)
|
|||||||||||
Effective tax rate
|
38.0
|
%
|
34.3
|
%
|
|||||||||||
Net income
|
24,776
|
27,954
|
(11.4
|
)
|
|||||||||||
Net income per share
|
$
|
0.97
|
$
|
1.09
|
(11.0
|
%
|
)
|
||||||||
Shares outstanding at March 31
|
25,810
|
25,985
|
% Change From
|
||||||||||||||||||||
March 31,
|
December 31,
|
March 31,
|
December 31,
|
March 31,
|
||||||||||||||||
2015
|
2014
|
2014
|
2014
|
2014
|
||||||||||||||||
Equities:
|
||||||||||||||||||||
Open-end Funds
|
$
|
16,643
|
$
|
17,684
|
$
|
17,531
|
(5.9
|
%)
|
(5.1
|
%)
|
||||||||||
Closed-end Funds
|
7,071
|
6,949
|
6,967
|
1.8
|
1.5
|
|||||||||||||||
Institutional & PWM - direct
|
16,407
|
16,597
|
16,403
|
(1.1
|
)
|
0.0
|
||||||||||||||
Institutional & PWM - sub-advisory
|
3,814
|
3,704
|
3,822
|
3.0
|
(0.2
|
)
|
||||||||||||||
Investment Partnerships
|
928
|
905
|
865
|
2.5
|
7.3
|
|||||||||||||||
SICAV (a)
|
105
|
135
|
91
|
(22.2
|
)
|
15.4
|
||||||||||||||
Total Equities
|
44,968
|
45,974
|
45,679
|
(2.2
|
)
|
(1.6
|
)
|
|||||||||||||
Fixed Income:
|
||||||||||||||||||||
Money-Market Fund
|
1,520
|
1,455
|
1,812
|
4.5
|
(16.1
|
)
|
||||||||||||||
Institutional & PWM
|
52
|
58
|
64
|
(10.3
|
)
|
(18.8
|
)
|
|||||||||||||
Total Fixed Income
|
1,572
|
1,513
|
1,876
|
3.9
|
(16.2
|
)
|
||||||||||||||
Total Assets Under Management
|
$
|
46,540
|
$
|
47,487
|
$
|
47,555
|
(2.0
|
)
|
(2.1
|
)
|
||||||||||
-
|
Total revenues for the first quarter of 2015 were $103.8 million, down 0.6% from $104.5 million in the prior year reflecting lower fees earned in distribution and other income partially offset by an increase in investment advisory and institutional research services.
|
-
|
Investment advisory fees increased to $88.0 million in the first quarter of 2015 from $87.8 million in the comparable 2014 quarter. Revenues in our investment partnerships and closed-end funds rose on higher levels of average AUM which were partially offset by a decline of average AUM in our open-end funds and lower billable assets in our institutional and private wealth management accounts.
|
-
|
Incentive fees earned were $0.5 million during the 2015 quarter, slightly ahead of the $0.4 million reported in the first quarter of 2014.
|
-
|
Distribution fees from our open-end equity mutual funds and other income were $13.7 million for the first quarter 2015, a decrease of $1.2 million, or 7.6%, from $14.9 million in the prior year quarter. Driving this decrease is a shift to Class I shares, typically available to institutional investors and retirement plan participants, for which we do not collect a distribution fee. Average AUM in other classes of open-end equity funds, for which we do collect a distribution fee, declined 8.3% quarter over quarter.
|
-
|
Our institutional research services revenues were $2.1 million in the first quarter 2015, rising 14.3% from $1.8 million in the prior year period.
|
-
|
On February 19, 2015, we completed the offering of The Gabelli Value Plus+ Trust (the “Trust”), a London Stock Exchange listed closed-end fund, raising over £100 million. The Trust is the firm’s first direct closed-end fund in the U.K. investment community. The Trust invests in U.S. equities.
|
-
|
During the first quarter, G.research, Inc. hosted several conferences, including our 25th annual Pump, Valve & Motor Symposium, our 9th Annual Omaha Research Trip, our 6th Annual Specialty Chemicals Conference and our inaugural Waste & Environmental Services Symposium.
|
-
|
On April 10, 2015, we announced that our Board of Directors approved the next step in the process of splitting the Company into two separate public companies.
|
-
|
The GAMCO Global Growth Fund (GGGIX) received top honors from Lipper in the Global Large-Cap Growth Fund category for the second year in a row for its three-year and five-year risk-adjusted returns.
|
A.
|
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 III.
|
B.
|
Operating income before management fee expense per share and other income/(expense), net per share are used by management for purposes of evaluating its business operations. We believe these measures are 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 swings in other income/(expense), net of ($0.02) per fully diluted share for the quarter was 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/(expense), net per share to net income per fully diluted share, is provided below.
|
1st Quarter
|
||||||||
2015
|
2014
|
|||||||
Operating income before management fee
|
$
|
38,382
|
$
|
41,227
|
||||
Management fee expense
|
(3,838
|
)
|
(4,119
|
)
|
||||
Tax expense
|
(13,129
|
)
|
(12,734
|
)
|
||||
Noncontrolling interest expense
|
61
|
117
|
||||||
Operating income (after management fee and taxes)
|
21,476
|
24,491
|
||||||
Per fully diluted share
|
$
|
0.85
|
$
|
0.95
|
||||
Other income, net
|
$
|
5,993
|
$
|
6,093
|
||||
Management fee expense
|
(599
|
)
|
(609
|
)
|
||||
Tax expense
|
(2,050
|
)
|
(1,882
|
)
|
||||
Noncontrolling interest (expense)/benefit
|
(44
|
)
|
(139
|
)
|
||||
Other income, net (after management fee and taxes)
|
$
|
3,300
|
$
|
3,463
|
||||
Per fully diluted share
|
$
|
0.12
|
$
|
0.14
|
||||
Net income per fully diluted share
|
$
|
0.97
|
$
|
1.09
|
||||
Diluted weighted average shares outstanding
|
25,414
|
25,684
|
||||||
C.
|
Adjusted operating income and adjusted operating income before management fee expense is used by management to evaluate its ongoing business operations. We believe this measure is useful in evaluating the ongoing operating results of the Company absent any of these adjustments.
|
1st Quarter
|
|||||||||
2015
|
2014
|
||||||||
Operating income
|
$
|
33,945
|
$
|
36,499
|
|||||
Adjustments:
|
|||||||||
Add back:
|
Incremental RSA expense
|
577
|
-
|
||||||
Costs to launch Closed-end fund
|
1,000
|
-
|
|||||||
Costs related to firm restructuring
|
850
|
-
|
|||||||
Deduct:
|
Reimbursement of prior year expense
|
-
|
(438
|
)
|
|||||
Adjusted operating income
|
36,372
|
36,061
|
|||||||
Adjusted operating margin
|
35.0
|
%
|
34.5
|
%
|
|||||
1st Quarter
|
|||||||||
2015
|
2014
|
||||||||
Operating income before management fee
|
$
|
38,382
|
$
|
41,227
|
|||||
Adjustments:
|
|||||||||
Add back:
|
Incremental RSA expense
|
577
|
-
|
||||||
Costs to launch Closed-end fund
|
1,000
|
-
|
|||||||
Costs related to firm restructuring
|
850
|
-
|
|||||||
Deduct:
|
Reimbursement of prior year expense
|
-
|
(438
|
)
|
|||||
Adjusted operating income before management fee
|
40,809
|
40,789
|
|||||||
Adjusted operating margin before management fee
|
39.3
|
%
|
39.0
|
%
|
|||||
The Company reported Assets Under Management as follows (in millions):
|
||||||||||||||||||||
Table I: Fund Flows - 1st Quarter 2015
|
||||||||||||||||||||
Fund
|
||||||||||||||||||||
Market
|
distributions,
|
|||||||||||||||||||
December 31,
|
appreciation/
|
Net cash
|
net of
|
March 31,
|
||||||||||||||||
2014
|
(depreciation)
|
flows
|
reinvestments
|
2015
|
||||||||||||||||
Equities:
|
||||||||||||||||||||
Open-end Funds
|
$
|
17,684
|
$
|
185
|
$
|
(1,199
|
)
|
$
|
(27
|
)
|
$
|
16,643
|
||||||||
Closed-end Funds
|
6,949
|
93
|
145
|
(116
|
)
|
7,071
|
||||||||||||||
Institutional & PWM - direct
|
16,597
|
140
|
(330
|
)
|
-
|
16,407
|
||||||||||||||
Institutional & PWM - sub-advisory
|
3,704
|
172
|
(62
|
)
|
-
|
3,814
|
||||||||||||||
Investment Partnerships
|
905
|
19
|
4
|
-
|
928
|
|||||||||||||||
SICAV (a)
|
135
|
(5
|
)
|
(25
|
)
|
-
|
105
|
|||||||||||||
Total Equities
|
45,974
|
604
|
(1,467
|
)
|
(143
|
)
|
44,968
|
|||||||||||||
Fixed Income:
|
||||||||||||||||||||
Money-Market Fund
|
1,455
|
-
|
65
|
-
|
1,520
|
|||||||||||||||
Institutional & PWM
|
58
|
-
|
(6
|
)
|
-
|
52
|
||||||||||||||
Total Fixed Income
|
1,513
|
-
|
59
|
-
|
1,572
|
|||||||||||||||
Total Assets Under Management
|
$
|
47,487
|
$
|
604
|
$
|
(1,408
|
)
|
$
|
(143
|
)
|
$
|
46,540
|
||||||||
Table II
|
||||||||||||
GAMCO INVESTORS, INC.
|
||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
||||||||||||
(Dollars in thousands, except per share data)
|
||||||||||||
For the Quarter Ended March 31,
|
||||||||||||
% Inc.
|
||||||||||||
2015
|
2014
|
(Dec.)
|
||||||||||
Investment advisory and incentive fees
|
$
|
88,037
|
$
|
87,797
|
0.3
|
%
|
||||||
Distribution fees and other income
|
13,743
|
14,873
|
(7.6
|
)
|
||||||||
Institutional research services
|
2,065
|
1,807
|
14.3
|
|||||||||
Total revenues
|
103,845
|
104,477
|
(0.6
|
)
|
||||||||
Compensation costs
|
44,494
|
43,897
|
1.4
|
|||||||||
Distribution costs
|
14,283
|
13,963
|
2.3
|
|||||||||
Other operating expenses
|
6,686
|
5,390
|
24.0
|
|||||||||
Total expenses
|
65,463
|
63,250
|
3.5
|
|||||||||
Operating income before management fee
|
38,382
|
41,227
|
(6.9
|
)
|
||||||||
Investment income
|
8,012
|
8,085
|
||||||||||
Interest expense
|
(2,019
|
)
|
(1,992
|
)
|
||||||||
Other income, net
|
5,993
|
6,093
|
||||||||||
Income before management fee and income taxes
|
44,375
|
47,320
|
(6.2
|
)
|
||||||||
Management fee expense
|
4,437
|
4,728
|
||||||||||
Income before income taxes
|
39,938
|
42,592
|
(6.2
|
)
|
||||||||
Income tax expense
|
15,179
|
14,616
|
||||||||||
Net income
|
24,759
|
27,976
|
(11.5
|
)
|
||||||||
Net income (loss) attributable to noncontrolling interests
|
(17
|
)
|
22
|
|||||||||
Net income attributable to GAMCO Investors, Inc.
|
$
|
24,776
|
$
|
27,954
|
(11.4
|
)
|
||||||
Net income per share attributable to GAMCO Investors, Inc.:
|
||||||||||||
Basic
|
$
|
0.99
|
$
|
1.10
|
(10.0
|
)
|
||||||
Diluted
|
$
|
0.97
|
$
|
1.09
|
(11.0
|
)
|
||||||
Weighted average shares outstanding:
|
||||||||||||
Basic
|
25,132
|
25,481
|
(1.4
|
)
|
||||||||
Diluted
|
25,414
|
25,684
|
(1.1
|
)
|
||||||||
Actual shares outstanding (a)
|
25,810
|
25,985
|
(0.7
|
)
|
||||||||
Notes:
|
||||||||||||
(a) Includes 707,050 and 566,850 of RSAs, respectively.
|
||||||||||||
See GAAP to non-GAAP reconciliation on page 9.
|
Table III
|
||||||||||||||||||||||||
GAMCO INVESTORS, INC.
|
||||||||||||||||||||||||
UNAUDITED QUARTERLY CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
||||||||||||||||||||||||
(Dollars in thousands, except per share data)
|
||||||||||||||||||||||||
2015
|
2014
|
|||||||||||||||||||||||
1st
|
1st
|
2nd
|
3rd
|
4th
|
||||||||||||||||||||
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Full Year
|
|||||||||||||||||||
Income Statement Data:
|
||||||||||||||||||||||||
Revenues
|
$
|
103,845
|
$
|
104,477
|
$
|
108,296
|
$
|
110,858
|
$
|
116,751
|
$
|
440,382
|
||||||||||||
Expenses
|
65,463
|
63,250
|
65,615
|
63,516
|
69,848
|
262,229
|
||||||||||||||||||
Operating income before
|
||||||||||||||||||||||||
management fee
|
38,382
|
41,227
|
42,681
|
47,342
|
46,903
|
178,153
|
||||||||||||||||||
Investment income/(loss)
|
8,012
|
8,085
|
11,076
|
(8,002
|
)
|
5,119
|
16,278
|
|||||||||||||||||
Interest expense
|
(2,019
|
)
|
(1,992
|
)
|
(2,021
|
)
|
(1,987
|
)
|
(2,049
|
)
|
(8,049
|
)
|
||||||||||||
Shareholder-designated contribution
|
-
|
-
|
(134
|
)
|
-
|
-
|
(134
|
)
|
||||||||||||||||
Other income/(expense), net
|
5,993
|
6,093
|
8,921
|
(9,989
|
)
|
3,070
|
8,095
|
|||||||||||||||||
Income before management
|
||||||||||||||||||||||||
fee and income taxes
|
44,375
|
47,320
|
51,602
|
37,353
|
49,973
|
186,248
|
||||||||||||||||||
Management fee expense
|
4,437
|
4,728
|
5,144
|
3,756
|
4,999
|
18,627
|
||||||||||||||||||
Income before income taxes
|
39,938
|
42,592
|
46,458
|
33,597
|
44,974
|
167,621
|
||||||||||||||||||
Income tax expense
|
15,179
|
14,616
|
17,135
|
13,045
|
17,709
|
62,505
|
||||||||||||||||||
Net income
|
24,759
|
27,976
|
29,323
|
20,552
|
27,265
|
105,116
|
||||||||||||||||||
Net income/(loss) attributable
|
||||||||||||||||||||||||
to noncontrolling interests
|
(17
|
)
|
22
|
373
|
(3,113
|
)
|
(1,556
|
)
|
(4,274
|
)
|
||||||||||||||
Net income attributable to
|
||||||||||||||||||||||||
GAMCO Investors, Inc.
|
$
|
24,776
|
$
|
27,954
|
$
|
28,950
|
$
|
23,665
|
$
|
28,821
|
$
|
109,390
|
||||||||||||
Net income per share
|
||||||||||||||||||||||||
attributable to GAMCO
|
||||||||||||||||||||||||
Investors, Inc.:
|
||||||||||||||||||||||||
Basic
|
$
|
0.99
|
$
|
1.10
|
$
|
1.14
|
$
|
0.94
|
$
|
1.14
|
$
|
4.32
|
||||||||||||
Diluted
|
$
|
0.97
|
$
|
1.09
|
$
|
1.13
|
$
|
0.93
|
$
|
1.13
|
$
|
4.28
|
||||||||||||
Weighted average shares outstanding:
|
||||||||||||||||||||||||
Basic
|
25,132
|
25,481
|
25,381
|
25,296
|
25,184
|
25,335
|
||||||||||||||||||
Diluted
|
25,414
|
25,684
|
25,586
|
25,517
|
25,449
|
25,558
|
||||||||||||||||||
Reconciliation of non-GAAP
|
||||||||||||||||||||||||
financial measures to GAAP:
|
||||||||||||||||||||||||
Operating income before
|
||||||||||||||||||||||||
management fee
|
38,382
|
41,227
|
42,681
|
47,342
|
46,903
|
178,153
|
||||||||||||||||||
Deduct: management fee expense
|
4,437
|
4,728
|
5,144
|
3,756
|
4,999
|
18,627
|
||||||||||||||||||
Operating income
|
$
|
33,945
|
$
|
36,499
|
$
|
37,537
|
$
|
43,586
|
$
|
41,904
|
$
|
159,526
|
||||||||||||
Operating margin before
|
||||||||||||||||||||||||
management fee
|
37.0
|
%
|
39.5
|
%
|
39.4
|
%
|
42.7
|
%
|
40.2
|
%
|
40.5
|
%
|
||||||||||||
Operating margin after
|
||||||||||||||||||||||||
management fee
|
32.7
|
%
|
34.9
|
%
|
34.7
|
%
|
39.3
|
%
|
35.9
|
%
|
36.2
|
%
|
||||||||||||
Table IV
|
||||||||||||
GAMCO INVESTORS, INC.
|
||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
|
||||||||||||
(Dollars in thousands, except per share data)
|
||||||||||||
March 31,
|
December 31,
|
March 31,
|
||||||||||
2015
|
2014
|
2014
|
||||||||||
ASSETS
|
||||||||||||
Cash and cash equivalents
|
$
|
331,634
|
$
|
298,224
|
$
|
243,142
|
||||||
Investments (a)
|
386,562
|
406,711
|
382,696
|
|||||||||
Receivable from brokers
|
21,615
|
76,079
|
54,084
|
|||||||||
Other receivables
|
41,231
|
67,228
|
41,650
|
|||||||||
Income tax receivable
|
2,443
|
2,477
|
445
|
|||||||||
Other assets
|
16,422
|
15,711
|
17,803
|
|||||||||
Total assets
|
$
|
799,907
|
$
|
866,430
|
$
|
739,820
|
||||||
LIABILITIES AND EQUITY
|
||||||||||||
Payable to brokers
|
$
|
10,174
|
$
|
43,409
|
$
|
11,370
|
||||||
Income taxes payable and deferred tax liabilities
|
32,830
|
27,939
|
41,427
|
|||||||||
Compensation payable
|
43,394
|
39,983
|
41,447
|
|||||||||
Securities sold short, not yet purchased
|
8,569
|
10,595
|
10,788
|
|||||||||
Accrued expenses and other liabilities
|
40,150
|
36,212
|
37,303
|
|||||||||
Sub-total
|
135,117
|
158,138
|
142,335
|
|||||||||
5.875% Senior notes (due June 1, 2021)
|
100,000
|
100,000
|
100,000
|
|||||||||
0% Subordinated Debentures (due December 31, 2015) (b)
|
9,936
|
12,163
|
12,098
|
|||||||||
Total debt
|
109,936
|
112,163
|
112,098
|
|||||||||
Total liabilities
|
245,053
|
270,301
|
254,433
|
|||||||||
Redeemable noncontrolling interests
|
5,519
|
68,334
|
8,464
|
|||||||||
GAMCO Investors, Inc.'s stockholders' equity
|
546,609
|
525,061
|
474,112
|
|||||||||
Noncontrolling interests
|
2,726
|
2,734
|
2,811
|
|||||||||
Total equity
|
549,335
|
527,795
|
476,923
|
|||||||||
Total liabilities and equity
|
$
|
799,907
|
$
|
866,430
|
$
|
739,820
|
||||||
(a) Includes investments in sponsored registered investment companies of $120.8 million, $39.5 million and $42.4 million, respectively.
|
||||||||||||
(b) The 0% Subordinated Debentures due December 31, 2015 have a face value of $10.4 million, $13.1 million and $13.8 million, respectively.
|