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:
|
Kieran Caterina or Diane M. LaPointe
|
|
|
SVPs and Co-Chief Accounting Officers
|
|
|
(914) 921-5149 or 7763
|
|
|
|
|
|
For further information please visit
|
|
|
www.gabelli.com
|
Financial Highlights
|
||||||||||||||||||||||||||||||||
|
Fourth Quarter
|
YTD
|
||||||||||||||||||||||||||||||
($'s in 000's except AUM and per share data)
|
2017
|
2016
|
2017
|
2016
|
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
AUM - end of period (in millions)
|
$
|
43,063
|
$
|
39,954
|
(a)
|
$
|
43,063
|
$
|
39,954
|
(a)
|
||||||||||||||||||||||
AUM - average (in millions)
|
42,965
|
39,328
|
42,016
|
38,878
|
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
GAAP
|
||||||||||||||||||||||||||||||||
Revenues
|
$
|
89,613
|
$
|
84,650
|
$
|
351,382
|
$
|
337,579
|
||||||||||||||||||||||||
Incentive fees
|
9,053
|
15,300
|
9,142
|
15,421
|
||||||||||||||||||||||||||||
Total revenues
|
$
|
98,666
|
$
|
99,950
|
$
|
360,524
|
$
|
353,000
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Operating income
|
39,524
|
52,031
|
145,020
|
191,796
|
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Income before income taxes
|
34,886
|
50,569
|
132,888
|
182,227
|
||||||||||||||||||||||||||||
Effective tax rate
|
61.3
|
%
|
35.4
|
%
|
41.4
|
%
|
35.7
|
%
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Net income
|
13,495
|
32,692
|
77,809
|
117,121
|
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Net income per fully diluted share
|
$
|
0.46
|
$
|
1.07
|
$
|
2.60
|
$
|
3.92
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Non-GAAP
|
||||||||||||||||||||||||||||||||
Operating income
|
$
|
42,667
|
$
|
41,455
|
$
|
158,949
|
$
|
153,218
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Adjusted income before income taxes
|
37,197
|
35,995
|
136,314
|
129,285
|
||||||||||||||||||||||||||||
Adjusted effective tax rate
|
37.8
|
%
|
34.5
|
%
|
37.8
|
%
|
37.0
|
%
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Adjusted net income
|
23,147
|
23,583
|
84,811
|
81,399
|
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Adjusted net income per fully diluted share
|
$
|
0.78
|
$
|
0.78
|
$
|
2.82
|
$
|
2.74
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Weighted average diluted shares outstanding
|
30,336
|
31,241
|
30,947
|
30,170
|
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Shares outstanding at December 31
|
28,974
|
29,463
|
28,974
|
29,463
|
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
See the reconciliation to the comparable U.S. GAAP measures starting on page 11.
|
||||||||||||||||||||||||||||||||
(a) Adjusted to include $270 million of Merger Arbitrage assets at December 31, 2016.
|
-
|
Total revenues for the fourth quarter of 2017 were $98.7 million compared with $100.0 million in the prior year.
|
-
|
Investment advisory fees, excluding incentive fees, rose to $78.7 million in the fourth quarter of 2017 from $73.6 million in the fourth quarter of 2016 highlighted by revenues from our open-end and closed-end funds of $51.1 million, an increase from $47.5 million in the year-ago quarter. Institutional and Private Wealth Management accounted for $26.2 million of the revenues in 2017 compared to $25.3 million in 2016. SICAV revenues accelerated to $1.4 million in 2017 from $0.7 million in 2016.
|
-
|
Incentive fees earned were $9.1 million and $15.3 million during the fourth quarter ended December 31, 2017 and December 31, 2016, respectively.
|
-
|
Distribution fees from our open-end equity funds and other income were $10.9 million for the fourth quarter of 2017 versus $11.1 million in the prior-year quarter.
|
·
|
$10.7 million tax expense related to the revaluation of certain deferred income tax assets;
|
·
|
$2.5 million non-cash tax benefit related to the revaluation of certain deferred income tax liabilities
|
-
|
On October 26, 2017, the GAMCO Natural Resources, Gold & Income Trust completed its offering of $30 million of 5.2% Series A Cumulative Preferred Stock. The preferred stock is perpetual, non-callable for five years, and was issued at $25 per share.
|
-
|
During December 2017, the Company completed two rights offerings for two of its closed-end funds, The Gabelli Equity Trust Inc. and The Gabelli Global Small and Mid Cap Value Trust, which raised a combined $203 million. Both offerings were heavily oversubscribed.
|
-
|
We will be launching our third exchange traded managed fund, the Gabelli RBITM NextSharesTM Trust (the “Fund”). The Fund will invest primarily in equity securities, such as common stock of domestic and foreign services and equipment companies focused on physical asset development, including roads, bridges, and infrastructure (“RBI”).
|
|
|
||||||||
|
December 31,
|
December 31,
|
|
||||||
|
2017
|
2016
|
|
||||||
Equities:
|
|
||||||||
Open-end Funds
|
$
|
13,747
|
$
|
13,462
|
|
||||
Closed-end Funds
|
8,053
|
7,150
|
|
||||||
Institutional & PWM - direct (a)
|
13,420
|
13,441
|
|
||||||
Institutional & PWM - sub-advisory
|
5,432
|
3,783
|
|
||||||
SICAV
|
510
|
320
|
(b)
|
||||||
Total Equities
|
41,162
|
38,156
|
|
||||||
Fixed Income:
|
|
||||||||
Money-Market Fund
|
1,870
|
1,767
|
|
||||||
Institutional & PWM
|
31
|
31
|
|
||||||
Total Fixed Income
|
1,901
|
1,798
|
|
||||||
Total Assets Under Management
|
$
|
43,063
|
$
|
39,954
|
|
||||
(a) Includes $261 million and $290 million of Money Market Fund AUM at
|
|||||||||
December 31, 2017 and December 31, 2016, respectively.
|
|||||||||
(b) Adjusted to include $270 million of Merger Arbitrage assets.
|
|||||||||
|
|
The Company reported Assets Under Management as follows (in millions):
|
||||||||||||||||||||
|
||||||||||||||||||||
Table I: Fund Flows - 4th Quarter 2017
|
||||||||||||||||||||
|
Fund
|
|||||||||||||||||||
|
Market
|
distributions,
|
||||||||||||||||||
|
September 30,
|
appreciation/
|
Net cash
|
net of
|
December 31,
|
|||||||||||||||
|
2017
|
(depreciation)
|
flows
|
reinvestments
|
2017
|
|||||||||||||||
Equities:
|
||||||||||||||||||||
Open-end Funds
|
$
|
13,762
|
$
|
278
|
$
|
(255
|
)
|
$
|
(38
|
)
|
$
|
13,747
|
||||||||
Closed-end Funds
|
7,668
|
282
|
230
|
(127
|
)
|
8,053
|
||||||||||||||
Institutional & PWM - direct
|
13,893
|
523
|
(996
|
)
|
-
|
13,420
|
||||||||||||||
Institutional & PWM - sub-advisory
|
5,346
|
139
|
(53
|
)
|
-
|
5,432
|
||||||||||||||
SICAV (a)
|
504
|
12
|
(6
|
)
|
-
|
510
|
||||||||||||||
Total Equities
|
41,173
|
1,234
|
(1,080
|
)
|
(165
|
)
|
41,162
|
|||||||||||||
Fixed Income:
|
||||||||||||||||||||
Money-Market Fund
|
1,890
|
5
|
(25
|
)
|
-
|
1,870
|
||||||||||||||
Institutional & PWM
|
26
|
-
|
5
|
-
|
31
|
|||||||||||||||
Total Fixed Income
|
1,916
|
5
|
(20
|
)
|
-
|
1,901
|
||||||||||||||
Total Assets Under Management
|
$
|
43,089
|
$
|
1,239
|
$
|
(1,100
|
)
|
$
|
(165
|
)
|
$
|
43,063
|
||||||||
|
||||||||||||||||||||
|
Table II: Fund Flows - Full Year 2017
|
|
||||||||||||||||||||
|
|
Fund
|
|||||||||||||||||||
|
Market
|
|
distributions,
|
||||||||||||||||||
|
December 31,
|
appreciation/
|
Net cash
|
|
net of
|
December 31,
|
|||||||||||||||
|
2016
|
(depreciation)
|
flows
|
|
reinvestments
|
2017
|
|||||||||||||||
Equities:
|
|
||||||||||||||||||||
Open-end Funds
|
$
|
13,462
|
$
|
1,632
|
$
|
(1,264
|
)
|
|
$
|
(83
|
)
|
$
|
13,747
|
||||||||
Closed-end Funds
|
7,150
|
994
|
392
|
|
(483
|
)
|
8,053
|
||||||||||||||
Institutional & PWM - direct
|
13,441
|
2,046
|
(2,067
|
)
|
|
-
|
13,420
|
||||||||||||||
Institutional & PWM - sub-advisory
|
3,783
|
661
|
988
|
(b)
|
-
|
5,432
|
|||||||||||||||
SICAV (a)
|
320
|
41
|
149
|
|
-
|
510
|
|||||||||||||||
Total Equities
|
38,156
|
5,374
|
(1,802
|
)
|
|
(566
|
)
|
41,162
|
|||||||||||||
Fixed Income:
|
|
||||||||||||||||||||
Money-Market Fund
|
1,767
|
14
|
89
|
|
-
|
1,870
|
|||||||||||||||
Institutional & PWM
|
31
|
-
|
-
|
|
-
|
31
|
|||||||||||||||
Total Fixed Income
|
1,798
|
14
|
89
|
|
-
|
1,901
|
|||||||||||||||
Total Assets Under Management
|
$
|
39,954
|
$
|
5,388
|
$
|
(1,713
|
)
|
|
$
|
(566
|
)
|
$
|
43,063
|
||||||||
|
|
||||||||||||||||||||
(a) Adjusted to include $270 million of Merger Arbitrage assets at December 31, 2016.
|
|
||||||||||||||||||||
(b) Includes $1.2 billion from being approved as the sub-advisor on two sub-advisory entities as of February 27, 2017.
|
|||||||||||||||||||||
|
|
Table III
|
||||||||
|
||||||||
GAMCO INVESTORS, INC.
|
||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
||||||||
(Dollars in thousands, except per share data)
|
||||||||
|
||||||||
|
For the Quarter Ended
|
|||||||
|
December 31,
|
|||||||
|
2017
|
2016
|
||||||
|
||||||||
Investment advisory and incentive fees
|
$
|
87,763
|
$
|
88,865
|
||||
Distribution fees and other income
|
10,903
|
11,085
|
||||||
Total revenues
|
98,666
|
99,950
|
||||||
|
||||||||
Compensation costs
|
36,536
|
24,442
|
||||||
Distribution costs
|
11,074
|
11,403
|
||||||
Other operating expenses
|
7,321
|
8,932
|
||||||
Total expenses
|
54,931
|
44,777
|
||||||
|
||||||||
Operating income before management fee
|
43,735
|
55,173
|
||||||
|
||||||||
Investment income
|
833
|
1,483
|
||||||
Loss on extinguishment of debt
|
(3,300
|
)
|
-
|
|||||
Interest expense
|
(1,891
|
)
|
(2,945
|
)
|
||||
Shareholder-designated contribution
|
(280
|
)
|
-
|
|||||
Other expense, net
|
(4,638
|
)
|
(1,462
|
)
|
||||
|
||||||||
Income before management fee and income taxes
|
39,097
|
53,711
|
||||||
Management fee expense
|
4,211
|
3,142
|
||||||
Income before income taxes
|
34,886
|
50,569
|
||||||
Income tax expense
|
21,391
|
17,877
|
||||||
Net income attributable to GAMCO Investors, Inc.
|
$
|
13,495
|
$
|
32,692
|
||||
|
||||||||
Net income per share attributable to GAMCO Investors, Inc.:
|
||||||||
Basic
|
$
|
0.46
|
$
|
1.12
|
||||
|
||||||||
Diluted
|
$
|
0.46
|
$
|
1.07
|
||||
|
||||||||
Weighted average shares outstanding:
|
||||||||
Basic
|
29,103
|
29,062
|
||||||
|
||||||||
Diluted
|
30,336
|
31,241
|
||||||
|
||||||||
Actual shares outstanding (a)
|
28,974
|
29,463
|
||||||
|
||||||||
Notes:
|
||||||||
(a) Includes 19,400 and 424,340 of RSAs, respectively.
|
||||||||
|
||||||||
See GAAP to non-GAAP reconciliation on page 9.
|
Table IV
|
||||||||
|
||||||||
GAMCO INVESTORS, INC.
|
||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
||||||||
(Dollars in thousands, except per share data)
|
||||||||
|
||||||||
|
For the Year Ended
|
|||||||
|
December 31,
|
|||||||
|
2017
|
2016
|
||||||
|
||||||||
Investment advisory and incentive fees
|
$
|
316,705
|
$
|
308,459
|
||||
Distribution fees and other income
|
43,819
|
44,541
|
||||||
Total revenues
|
360,524
|
353,000
|
||||||
|
||||||||
Compensation costs
|
134,170
|
86,572
|
||||||
Distribution costs
|
44,447
|
44,189
|
||||||
Other operating expenses
|
23,221
|
23,925
|
||||||
Total expenses
|
201,838
|
154,686
|
||||||
|
||||||||
Operating income before management fee
|
158,686
|
198,314
|
||||||
|
||||||||
Investment income
|
5,465
|
3,105
|
||||||
Loss on extinguishment of debt
|
(3,300
|
)
|
-
|
|||||
Interest expense
|
(10,160
|
)
|
(12,674
|
)
|
||||
Shareholder-designated contribution
|
(4,137
|
)
|
-
|
|||||
Other expense, net
|
(12,132
|
)
|
(9,569
|
)
|
||||
|
||||||||
Income before management fee and income taxes
|
146,554
|
188,745
|
||||||
Management fee expense
|
13,666
|
6,518
|
||||||
Income before income taxes
|
132,888
|
182,227
|
||||||
Income tax expense
|
55,079
|
65,106
|
||||||
Net income attributable to GAMCO Investors, Inc.
|
$
|
77,809
|
$
|
117,121
|
||||
|
||||||||
Net income per share attributable to GAMCO Investors, Inc.:
|
||||||||
Basic
|
$
|
2.68
|
$
|
4.01
|
||||
|
||||||||
Diluted
|
$
|
2.60
|
$
|
3.92
|
||||
|
||||||||
Weighted average shares outstanding:
|
||||||||
Basic
|
28,980
|
29,182
|
||||||
|
||||||||
Diluted
|
30,947
|
30,170
|
||||||
|
||||||||
Actual shares outstanding (a)
|
28,974
|
29,463
|
||||||
|
||||||||
Notes:
|
||||||||
(a) Includes 19,400 and 424,340 of RSAs, respectively.
|
||||||||
See GAAP to non-GAAP reconciliation on page 9.
|
Table V
|
||||||||||||||||||||||||||||||||||||||||
GAMCO INVESTORS, INC.
|
||||||||||||||||||||||||||||||||||||||||
UNAUDITED QUARTERLY CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands, except per share data)
|
||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
|
2017
|
2016
|
||||||||||||||||||||||||||||||||||||||
|
1st
|
2nd
|
3rd
|
4th
|
1st
|
2nd
|
3rd
|
4th
|
||||||||||||||||||||||||||||||||
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Full Year
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Full Year
|
||||||||||||||||||||||||||||||
Income Statement Data:
|
||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Revenues
|
$
|
85,917
|
$
|
87,600
|
$
|
88,341
|
$
|
98,666
|
$
|
360,524
|
$
|
81,385
|
$
|
83,944
|
$
|
87,721
|
$
|
99,950
|
$
|
353,000
|
||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Expenses
|
41,310
|
45,584
|
60,013
|
54,931
|
201,838
|
35,363
|
36,064
|
38,482
|
44,777
|
154,686
|
||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Operating income before
|
||||||||||||||||||||||||||||||||||||||||
management fee
|
44,607
|
42,016
|
28,328
|
43,735
|
158,686
|
46,022
|
47,880
|
49,239
|
55,173
|
198,314
|
||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Investment income
|
509
|
537
|
(271
|
)
|
(2,747
|
)
|
(1,972
|
)
|
591
|
605
|
426
|
1,483
|
3,105
|
|||||||||||||||||||||||||||
Interest expense
|
(2,832
|
)
|
(2,749
|
)
|
(2,688
|
)
|
(1,891
|
)
|
(10,160
|
)
|
(3,406
|
)
|
(3,168
|
)
|
(3,155
|
)
|
(2,945
|
)
|
(12,674
|
)
|
||||||||||||||||||||
Other expense, net
|
(2,323
|
)
|
(2,212
|
)
|
(2,959
|
)
|
(4,638
|
)
|
(12,132
|
)
|
(2,815
|
)
|
(2,563
|
)
|
(2,729
|
)
|
(1,462
|
)
|
(9,569
|
)
|
||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Income before management
|
||||||||||||||||||||||||||||||||||||||||
fee and income taxes
|
42,284
|
39,804
|
25,369
|
39,097
|
146,554
|
43,207
|
45,317
|
46,510
|
53,711
|
188,745
|
||||||||||||||||||||||||||||||
Management fee expense
|
2,164
|
2,356
|
4,935
|
4,211
|
13,666
|
1,080
|
1,133
|
1,163
|
3,142
|
6,518
|
||||||||||||||||||||||||||||||
Income before income taxes
|
40,120
|
37,448
|
20,434
|
34,886
|
132,888
|
42,127
|
44,184
|
45,347
|
50,569
|
182,227
|
||||||||||||||||||||||||||||||
Income tax expense
|
15,300
|
14,554
|
3,834
|
21,391
|
55,079
|
16,102
|
16,641
|
14,486
|
17,877
|
65,106
|
||||||||||||||||||||||||||||||
Net income attributable to
|
||||||||||||||||||||||||||||||||||||||||
GAMCO Investors, Inc.
|
$
|
24,820
|
$
|
22,894
|
$
|
16,600
|
$
|
13,495
|
$
|
77,809
|
$
|
26,025
|
$
|
27,543
|
$
|
30,861
|
$
|
32,692
|
$
|
117,121
|
||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Net income per share
|
||||||||||||||||||||||||||||||||||||||||
attributable to GAMCO
|
||||||||||||||||||||||||||||||||||||||||
Investors, Inc.:
|
||||||||||||||||||||||||||||||||||||||||
Basic
|
$
|
0.86
|
$
|
0.79
|
$
|
0.57
|
$
|
0.46
|
$
|
2.68
|
$
|
0.89
|
$
|
0.94
|
$
|
1.06
|
$
|
1.12
|
$
|
4.01
|
||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Diluted
|
$
|
0.82
|
$
|
0.76
|
$
|
0.55
|
$
|
0.46
|
$
|
2.60
|
$
|
0.88
|
$
|
0.93
|
$
|
1.03
|
$
|
1.07
|
$
|
3.92
|
||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Weighted average shares outstanding:
|
||||||||||||||||||||||||||||||||||||||||
Basic
|
28,970
|
28,896
|
28,926
|
29,103
|
28,980
|
29,247
|
29,234
|
29,185
|
29,062
|
29,182
|
||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Diluted
|
31,160
|
31,100
|
31,173
|
30,336
|
30,947
|
29,684
|
29,522
|
30,406
|
31,241
|
30,170
|
||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Reconciliation of non-GAAP
|
||||||||||||||||||||||||||||||||||||||||
financial measures to GAAP:
|
||||||||||||||||||||||||||||||||||||||||
Operating income before
|
||||||||||||||||||||||||||||||||||||||||
management fee
|
44,607
|
42,016
|
28,328
|
43,735
|
158,686
|
46,022
|
47,880
|
49,239
|
55,173
|
198,314
|
||||||||||||||||||||||||||||||
Deduct: management fee expense
|
2,164
|
2,356
|
4,935
|
4,211
|
13,666
|
1,080
|
1,133
|
1,163
|
3,142
|
6,518
|
||||||||||||||||||||||||||||||
Operating income
|
$
|
42,443
|
$
|
39,660
|
$
|
23,393
|
$
|
39,524
|
$
|
145,020
|
$
|
44,942
|
$
|
46,747
|
$
|
48,076
|
$
|
52,031
|
$
|
191,796
|
||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Operating margin before
|
||||||||||||||||||||||||||||||||||||||||
management fee
|
51.9
|
%
|
48.0
|
%
|
32.1
|
%
|
44.3
|
%
|
44.0
|
%
|
56.5
|
%
|
57.0
|
%
|
56.1
|
%
|
55.2
|
%
|
56.2
|
%
|
||||||||||||||||||||
Operating margin after
|
||||||||||||||||||||||||||||||||||||||||
management fee
|
49.4
|
%
|
45.3
|
%
|
26.5
|
%
|
40.1
|
%
|
40.2
|
%
|
55.2
|
%
|
55.7
|
%
|
54.8
|
%
|
52.1
|
%
|
54.3
|
%
|
||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Notes on Non-GAAP Financial Measures:
|
||||||||||||||||||||||||||||||||||||||||
Operating income before management fee 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.
|
Table VI
|
||||||||
GAMCO INVESTORS, INC.
|
||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
|
||||||||
(Dollars in thousands, except per share data)
|
||||||||
|
||||||||
|
December 31,
|
December 31,
|
||||||
|
2017
|
2016
|
||||||
|
||||||||
ASSETS
|
||||||||
|
||||||||
Cash and cash equivalents
|
$
|
17,821
|
$
|
39,812
|
||||
Investments
|
36,790
|
37,285
|
||||||
Receivable from brokers
|
1,578
|
453
|
||||||
Other receivables
|
45,621
|
50,756
|
||||||
Income tax receivable and deferred tax asset
|
15,615
|
9,349
|
||||||
Other assets
|
10,861
|
11,574
|
||||||
|
||||||||
Total assets
|
$
|
128,286
|
$
|
149,229
|
||||
|
||||||||
LIABILITIES AND EQUITY
|
||||||||
|
||||||||
Payable to brokers
|
$
|
14,926
|
$
|
66
|
||||
Income taxes payable and deferred tax liabilities
|
3,128
|
3,815
|
||||||
Compensation payable (a)
|
82,907
|
42,384
|
||||||
Accrued expenses and other liabilities
|
34,454
|
35,656
|
||||||
Sub-total
|
135,415
|
81,921
|
||||||
|
||||||||
5.875% Senior notes (due June 1, 2021)
|
24,144
|
24,120
|
||||||
4.5% Convertible note (due August 15, 2021)
|
-
|
109,835
|
||||||
4% PIK note (due November 30, 2020)
|
50,000
|
100,000
|
||||||
1.6% AC Note (due February 28, 2018)
|
15,000
|
-
|
||||||
Total debt
|
89,144
|
233,955
|
||||||
Total liabilities
|
224,559
|
315,876
|
||||||
|
||||||||
GAMCO Investors, Inc.'s stockholders' deficit
|
(96,273
|
)
|
(166,647
|
)
|
||||
|
||||||||
Total liabilities and equity
|
$
|
128,286
|
$
|
149,229
|
||||
|
||||||||
(a) Excludes $59.0 million of DCCA expense that is not yet recorded under GAAP.
|
||||||||
|
GAMCO’s non-GAAP measures include adjusted income before taxes, adjusted effective tax rate, adjusted net income and adjusted net income per fully diluted share. GAMCO’s calculation of these non-GAAP measures may not be comparable to similarly titled measures of other companies due to potential differences between companies in the method of calculation. As a result, the use of these non-GAAP measures has limitations and should not be considered superior to, in isolation from, or a substitute for, related U.S. GAAP measures.
These non-GAAP measures allow management and investors to view operating trends, perform analytical comparisons and benchmark performance between periods to understand operating performance without regard to items that we do not consider to be a component of our core operating performance. Management uses these measures in its financial, investment and operational decision-making processes, for internal reporting and as part of its forecasting and budgeting processes. For these reasons we believe these non-GAAP measures are useful for our investors.
Adjusted income before taxes, adjusted effective tax rate, adjusted net income and adjusted net income per fully diluted share can be used by investors to review our results on a consistent basis. Examples of adjustments to these measures include the GAAP impact of the 2016 Deferred Cash Compensation Agreement (“DCCA”), First Half 2017 DCCA, and the Fourth Quarter 2017 DCCA that were put in place to enable the Company to more quickly pay down its debt, the acceleration of outstanding RSAs, charitable contributions, closed-end fund launch expenses, extinguishment of debt, and the recently enacted Tax Cuts and Jobs Act.
|
|
For the three months ended December 31, 2017
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
|
Reported
|
Fourth Quarter
|
First Half
|
RSA
|
||||||||||||||||||||||||
|
GAAP
|
2017 DCCA
|
2017 DCCA
|
2016 DCCA
|
Acceleration
|
Other
|
Adjusted
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
Total revenues
|
$
|
98,666
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
98,666
|
||||||||||||||
|
||||||||||||||||||||||||||||
Compensation costs
|
36,536
|
10,318
|
(4,771
|
)
|
(3,148
|
)
|
(1,331
|
)
|
-
|
37,604
|
||||||||||||||||||
Distribution costs
|
11,074
|
-
|
-
|
-
|
-
|
11,074
|
||||||||||||||||||||||
Other operating expenses
|
7,321
|
-
|
-
|
-
|
-
|
-
|
7,321
|
|||||||||||||||||||||
Total expenses
|
54,931
|
10,318
|
(4,771
|
)
|
(3,148
|
)
|
(1,331
|
)
|
-
|
55,999
|
||||||||||||||||||
|
||||||||||||||||||||||||||||
Operating income before management fee
|
43,735
|
(10,318
|
)
|
4,771
|
3,148
|
1,331
|
-
|
42,667
|
||||||||||||||||||||
|
||||||||||||||||||||||||||||
Other expense, net
|
(4,638
|
)
|
-
|
-
|
-
|
-
|
3,300
|
(1,338
|
)
|
|||||||||||||||||||
|
||||||||||||||||||||||||||||
Income before management fee and income taxes
|
39,097
|
(10,318
|
)
|
4,771
|
3,148
|
1,331
|
3,300
|
41,329
|
||||||||||||||||||||
Management fee expense
|
4,211
|
1,064
|
(891
|
)
|
(715
|
)
|
133
|
330
|
4,132
|
|||||||||||||||||||
Income before income taxes
|
34,886
|
(11,382
|
)
|
5,662
|
3,863
|
1,198
|
2,970
|
37,197
|
||||||||||||||||||||
Income tax expense
|
21,391
|
(4,325
|
)
|
2,152
|
1,468
|
455
|
(7,091
|
)
|
14,050
|
|||||||||||||||||||
Net income attributable to GAMCO Investors, Inc.
|
$
|
13,495
|
$
|
(7,057
|
)
|
$
|
3,510
|
$
|
2,395
|
$
|
743
|
$
|
10,061
|
$
|
23,147
|
|||||||||||||
|
||||||||||||||||||||||||||||
Net income per share attributable to GAMCO Investors, Inc.:
|
||||||||||||||||||||||||||||
Basic
|
$
|
0.46
|
$
|
(0.24
|
)
|
$
|
0.12
|
$
|
0.08
|
$
|
0.03
|
$
|
0.35
|
$
|
0.80
|
|||||||||||||
Diluted
|
$
|
0.46
|
$
|
(0.23
|
)
|
$
|
0.12
|
$
|
0.08
|
$
|
0.02
|
$
|
0.33
|
$
|
0.78
|
|||||||||||||
|
|
For the three months ended December 31, 2016
|
|||||||||||
|
Reported
|
|||||||||||
|
GAAP
|
2016 DCCA
|
Adjusted
|
|||||||||
|
||||||||||||
Total revenues
|
$
|
99,950
|
$
|
-
|
$
|
99,950
|
||||||
|
||||||||||||
Compensation costs
|
24,442
|
13,718
|
38,160
|
|||||||||
Distribution costs
|
11,403
|
-
|
11,403
|
|||||||||
Other operating expenses
|
8,932
|
-
|
8,932
|
|||||||||
Total expenses
|
44,777
|
13,718
|
58,495
|
|||||||||
|
||||||||||||
Operating income before management fee
|
55,173
|
(13,718
|
)
|
41,455
|
||||||||
|
||||||||||||
Other expense, net
|
(1,462
|
)
|
-
|
(1,462
|
)
|
|||||||
|
||||||||||||
Income before management fee and income taxes
|
53,711
|
(13,718
|
)
|
39,993
|
||||||||
Management fee expense
|
3,142
|
856
|
3,998
|
|||||||||
Income before income taxes
|
50,569
|
(14,574
|
)
|
35,995
|
||||||||
Income tax expense
|
17,877
|
(5,465
|
)
|
12,412
|
||||||||
Net income attributable to GAMCO Investors, Inc.
|
$
|
32,692
|
$
|
(9,109
|
)
|
$
|
23,583
|
|||||
|
||||||||||||
Net income per share attributable to GAMCO Investors, Inc.:
|
||||||||||||
Basic
|
$
|
1.12
|
$
|
(0.31
|
)
|
$
|
0.81
|
|||||
Diluted
|
$
|
1.07
|
$
|
(0.27
|
)
|
$
|
0.78
|
|||||
|
|
For the year ended December 31, 2017
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
|
Reported
|
Fourth Quarter
|
First Half
|
RSA
|
||||||||||||||||||||||||
|
GAAP
|
2017 DCCA
|
2017 DCCA
|
2016 DCCA
|
Acceleration
|
Other
|
Adjusted
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
Total revenues
|
$
|
360,524
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
360,524
|
||||||||||||||
|
||||||||||||||||||||||||||||
Compensation costs
|
134,170
|
10,318
|
9,619
|
(12,322
|
)
|
(6,810
|
)
|
-
|
134,975
|
|||||||||||||||||||
Distribution costs
|
44,447
|
-
|
-
|
-
|
-
|
(1,068
|
)
|
43,379
|
||||||||||||||||||||
Other operating expenses
|
23,221
|
-
|
-
|
-
|
-
|
-
|
23,221
|
|||||||||||||||||||||
Total expenses
|
201,838
|
10,318
|
9,619
|
(12,322
|
)
|
(6,810
|
)
|
(1,068
|
)
|
201,575
|
||||||||||||||||||
|
||||||||||||||||||||||||||||
Operating income before management fee
|
158,686
|
(10,318
|
)
|
(9,619
|
)
|
12,322
|
6,810
|
1,068
|
158,949
|
|||||||||||||||||||
|
||||||||||||||||||||||||||||
Other expense, net
|
(12,132
|
)
|
-
|
-
|
-
|
-
|
4,336
|
(7,796
|
)
|
|||||||||||||||||||
|
||||||||||||||||||||||||||||
Income before management fee and income taxes
|
146,554
|
(10,318
|
)
|
(9,619
|
)
|
12,322
|
6,810
|
5,404
|
151,153
|
|||||||||||||||||||
Management fee expense
|
13,666
|
1,064
|
1,775
|
(2,887
|
)
|
681
|
540
|
14,839
|
||||||||||||||||||||
Income before income taxes
|
132,888
|
(11,382
|
)
|
(11,394
|
)
|
15,209
|
6,129
|
4,864
|
136,314
|
|||||||||||||||||||
Income tax expense
|
55,079
|
(4,325
|
)
|
(4,442
|
)
|
5,818
|
1,376
|
(2,003
|
)
|
51,503
|
||||||||||||||||||
Net income attributable to GAMCO Investors, Inc.
|
$
|
77,809
|
$
|
(7,057
|
)
|
$
|
(6,952
|
)
|
$
|
9,391
|
$
|
4,753
|
$
|
6,867
|
$
|
84,811
|
||||||||||||
|
||||||||||||||||||||||||||||
Net income per share attributable to GAMCO Investors, Inc.:
|
||||||||||||||||||||||||||||
Basic
|
$
|
2.68
|
$
|
(0.24
|
)
|
$
|
(0.24
|
)
|
$
|
0.32
|
$
|
0.16
|
$
|
0.24
|
$
|
2.93
|
||||||||||||
Diluted
|
$
|
2.60
|
$
|
(0.23
|
)
|
$
|
(0.22
|
)
|
$
|
0.30
|
$
|
0.15
|
$
|
0.22
|
$
|
2.82
|
||||||||||||
|
|
For the year ended December 31, 2016
|
|||||||||||||||
|
Reported
|
|||||||||||||||
|
GAAP
|
2016 DCCA
|
Other
|
Adjusted
|
||||||||||||
|
||||||||||||||||
Total revenues
|
$
|
353,000
|
$
|
-
|
$
|
-
|
$
|
353,000
|
||||||||
|
||||||||||||||||
Compensation costs
|
86,572
|
45,734
|
-
|
132,306
|
||||||||||||
Distribution costs
|
44,189
|
-
|
(638
|
)
|
43,551
|
|||||||||||
Other operating expenses
|
23,925
|
-
|
-
|
23,925
|
||||||||||||
Total expenses
|
154,686
|
45,734
|
(638
|
)
|
199,782
|
|||||||||||
|
||||||||||||||||
Operating income before management fee
|
198,314
|
(45,734
|
)
|
638
|
153,218
|
|||||||||||
|
||||||||||||||||
Other expense, net
|
(9,569
|
)
|
-
|
-
|
(9,569
|
)
|
||||||||||
|
||||||||||||||||
Income before management fee and income taxes
|
188,745
|
(45,734
|
)
|
638
|
143,649
|
|||||||||||
Management fee expense
|
6,518
|
7,782
|
64
|
14,364
|
||||||||||||
Income before income taxes
|
182,227
|
(53,516
|
)
|
574
|
129,285
|
|||||||||||
Income tax expense
|
65,106
|
(20,069
|
)
|
2,849
|
47,886
|
|||||||||||
Net income attributable to GAMCO Investors, Inc.
|
$
|
117,121
|
$
|
(33,447
|
)
|
$
|
(2,275
|
)
|
$
|
81,399
|
||||||
|
||||||||||||||||
Net income per share attributable to GAMCO Investors, Inc.:
|
||||||||||||||||
Basic
|
$
|
4.01
|
$
|
(1.15
|
)
|
$
|
(0.08
|
)
|
$
|
2.79
|
||||||
Diluted
|
$
|
3.92
|
$
|
(1.07
|
)
|
$
|
(0.08
|
)
|
$
|
2.74
|
||||||
|