Date of Report (Date of earliest event reported) | July 28, 2017 |
VIRTUS INVESTMENT PARTNERS, INC. | ||||
(Exact Name of Registrant as Specified in Charter) |
Delaware | 1-10994 | 26-3962811 |
(State or other jurisdiction | (Commission | (I.R.S. Employer |
of incorporation) | File Number) | Identification No.) |
100 Pearl Street, Hartford, CT | 06103 |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code | (800) 248-7971 |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Emerging growth company | ¨ |
VIRTUS INVESTMENT PARTNERS, INC. | ||||
Dated: | July 28, 2017 | By: | /s/ Michael A. Angerthal | |
Name: | Michael A. Angerthal | |||
Title: | Chief Financial Officer | |||
News Release |
▪ | EPS of ($0.34); EPS, As Adjusted, of $1.61 |
▪ | Total Sales of $3.5B; Net Flows of ($0.2B); Long-Term AUM of $85.0B |
Three Months Ended | Three Months Ended | ||||||||||||||||
6/30/2017 | 6/30/2016 | Change | 3/31/2017 | Change | |||||||||||||
U.S. GAAP Financial Measures | |||||||||||||||||
Revenues | $ | 94.1 | $ | 80.1 | 18 | % | $ | 79.8 | 18 | % | |||||||
Operating expenses | $ | 90.9 | $ | 71.3 | 27 | % | $ | 69.7 | 30 | % | |||||||
Operating income | $ | 3.2 | $ | 8.7 | (64 | %) | $ | 10.0 | (68 | %) | |||||||
Operating margin | 3.4 | % | 10.9 | % | 12.6 | % | |||||||||||
Net (loss) income attributable to common stockholders | $ | (2.4 | ) | $ | 8.1 | N/M | $ | 10.9 | N/M | ||||||||
(Loss) earnings per share - diluted | $ | (0.34 | ) | $ | 0.97 | N/M | $ | 1.62 | N/M | ||||||||
Weighted average shares outstanding - diluted | 7.064 | 8.314 | (15 | %) | 6.773 | 4 | % | ||||||||||
Non-GAAP Financial Measures (1) | |||||||||||||||||
Revenues, as adjusted | $ | 78.6 | $ | 62.6 | 26 | % | $ | 64.7 | 21 | % | |||||||
Operating expenses, as adjusted | $ | 55.9 | $ | 45.9 | 22 | % | $ | 51.2 | 9 | % | |||||||
Operating income, as adjusted | $ | 22.7 | $ | 16.7 | 36 | % | $ | 13.5 | 68 | % | |||||||
Operating margin, as adjusted | 28.8 | % | 26.6 | % | 20.9 | % | |||||||||||
Net income attributable to common stockholders, as adjusted | $ | 13.4 | $ | 10.3 | 30 | % | $ | 8.6 | 55 | % | |||||||
Earnings per share - diluted, as adjusted | $ | 1.61 | $ | 1.24 | 30 | % | $ | 1.16 | 39 | % | |||||||
Weighted average shares outstanding - diluted, as adjusted | 8.311 | 8.314 | — | % | 7.447 | 12 | % |
Three Months Ended | Three Months Ended | ||||||||||||||||
6/30/2017 | 6/30/2016 | Change | 3/31/2017 | Change | |||||||||||||
Ending long-term assets under management (1) | $ | 85.0 | $ | 45.2 | 88 | % | $ | 48.0 | 77 | % | |||||||
Ending total assets under management | $ | 88.6 | $ | 45.2 | 96 | % | $ | 48.0 | 84 | % | |||||||
Average long-term assets under management (1) | $ | 60.7 | $ | 44.8 | 35 | % | $ | 46.4 | 31 | % | |||||||
Average total assets under management | $ | 62.0 | $ | 44.8 | 38 | % | $ | 46.4 | 34 | % | |||||||
Gross sales | $ | 3.5 | $ | 2.4 | 44 | % | $ | 3.3 | 6 | % | |||||||
Net flows | $ | (0.2 | ) | $ | (2.2 | ) | 91 | % | $ | 0.5 | N/M |
As of | As of | ||||||||||||||||
6/30/2017 | 6/30/2016 | Change | 3/31/2017 | Change | |||||||||||||
Cash and cash equivalents | $ | 127.6 | $ | 155.5 | (18 | %) | $ | 235.9 | (46 | %) | |||||||
Contingent consideration | $ | 51.7 | $ | — | N/M | $ | — | N/M | |||||||||
Debt | $ | 248.1 | $ | — | N/M | $ | — | N/M | |||||||||
Total equity attributable to stockholders | $ | 573.6 | $ | 466.1 | 23 | % | $ | 552.4 | 4 | % | |||||||
Working capital (1) | $ | 49.1 | $ | 151.9 | (68 | %) | $ | 224.8 | (78 | %) | |||||||
Net debt (cash) (2) | $ | 184.1 | $ | (155.5 | ) | N/M | $ | (235.9 | ) | N/M |
Jeanne Hess, Investor Relations (860) 263-4730 jeanne.hess@virtus.com | Joe Fazzino, Media Relations (860) 263-4725 joe.fazzino@virtus.com |
Three Months Ended | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
6/30/2017 | 6/30/2016 | Change | 3/31/2017 | Change | 6/30/2017 | 6/30/2016 | Change | |||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||
Investment management fees | $ | 74,062 | $ | 58,192 | 27 | % | $ | 59,271 | 25 | % | $ | 133,333 | $ | 115,836 | 15 | % | ||||||||||||
Distribution and service fees | 10,439 | 12,167 | (14 | %) | 10,783 | (3 | %) | 21,222 | 24,645 | (14 | %) | |||||||||||||||||
Administration and transfer agent fees | 9,476 | 9,499 | — | % | 8,981 | 6 | % | 18,457 | 19,497 | (5 | %) | |||||||||||||||||
Other income and fees | 155 | 227 | (32 | %) | 741 | (79 | %) | 896 | 402 | 123 | % | |||||||||||||||||
Total revenues | 94,132 | 80,085 | 18 | % | 79,776 | 18 | % | 173,908 | 160,380 | 8 | % | |||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||||||
Employment expenses | 42,992 | 33,065 | 30 | % | 39,641 | 8 | % | 82,633 | 69,042 | 20 | % | |||||||||||||||||
Distribution and other asset-based expenses | 15,764 | 17,432 | (10 | %) | 15,323 | 3 | % | 31,087 | 35,533 | (13 | %) | |||||||||||||||||
Other operating expenses | 20,236 | 12,457 | 62 | % | 13,226 | 53 | % | 33,462 | 23,222 | 44 | % | |||||||||||||||||
Operating expenses of consolidated investment products | 473 | 4,618 | (90 | %) | 642 | (26 | %) | 1,115 | 5,807 | (81 | %) | |||||||||||||||||
Restructuring and severance | 8,894 | 2,391 | 272 | % | — | N/M | 8,894 | 2,391 | 272 | % | ||||||||||||||||||
Depreciation and other amortization | 776 | 776 | — | % | 664 | 17 | % | 1,440 | 1,638 | (12 | %) | |||||||||||||||||
Amortization expense | 1,813 | 603 | 201 | % | 233 | N/M | 2,046 | 1,254 | 63 | % | ||||||||||||||||||
Total operating expenses | 90,948 | 71,342 | 27 | % | 69,729 | 30 | % | 160,677 | 138,887 | 16 | % | |||||||||||||||||
Operating Income | 3,184 | 8,743 | (64 | %) | 10,047 | (68 | %) | 13,231 | 21,493 | (38 | %) | |||||||||||||||||
Other (Expense) Income | ||||||||||||||||||||||||||||
Realized and unrealized gain on investments, net | 1,287 | 3,281 | (61 | %) | 297 | 333 | % | 1,584 | 2,623 | (40 | %) | |||||||||||||||||
Realized and unrealized (loss) gain on investments of consolidated investment products, net | (1,424 | ) | 3,678 | N/M | 4,444 | N/M | 3,020 | 6,208 | (51 | %) | ||||||||||||||||||
Other income, net | 47 | (15 | ) | N/M | 646 | (93 | %) | 693 | 213 | 225 | % | |||||||||||||||||
Total other (expense) income, net | (90 | ) | 6,944 | N/M | 5,387 | N/M | 5,297 | 9,044 | (41 | %) | ||||||||||||||||||
Interest (Expense) Income | ||||||||||||||||||||||||||||
Interest expense | (3,739 | ) | (129 | ) | N/M | (243 | ) | N/M | (3,982 | ) | (261 | ) | N/M | |||||||||||||||
Interest and dividend income | 446 | 619 | (28 | %) | 188 | 137 | % | 634 | 892 | (29 | %) | |||||||||||||||||
Interest and dividend income of investments of consolidated investment products | 5,102 | 4,278 | 19 | % | 5,656 | (10 | %) | 10,758 | 9,445 | 14 | % | |||||||||||||||||
Interest expense of consolidated investment products | (2,995 | ) | (5,668 | ) | 47 | % | (2,857 | ) | (5 | %) | (5,852 | ) | (6,400 | ) | 9 | % | ||||||||||||
Total interest (expense) income, net | (1,186 | ) | (900 | ) | (32 | %) | 2,744 | N/M | 1,558 | 3,676 | (58 | %) | ||||||||||||||||
Income Before Income Taxes | 1,908 | 14,787 | (87 | %) | 18,178 | (90 | %) | 20,086 | 34,213 | (41 | %) | |||||||||||||||||
Income tax expense | 1,880 | 6,087 | (69 | %) | 4,433 | (58 | %) | 6,313 | 13,643 | (54 | %) | |||||||||||||||||
Net Income | 28 | 8,700 | (100 | %) | 13,745 | (100 | %) | 13,773 | 20,570 | (33 | %) | |||||||||||||||||
Noncontrolling interests | (333 | ) | (612 | ) | 46 | % | (718 | ) | 54 | % | (1,051 | ) | (119 | ) | N/M | |||||||||||||
Net (Loss) Income Attributable to Stockholders | (305 | ) | 8,088 | N/M | 13,027 | N/M | 12,722 | 20,451 | (38 | %) | ||||||||||||||||||
Preferred stockholder dividends | (2,084 | ) | — | N/M | (2,084 | ) | — | % | (4,168 | ) | — | N/M | ||||||||||||||||
Net (Loss) Income Attributable to Common Stockholders | $ | (2,389 | ) | $ | 8,088 | N/M | $ | 10,943 | N/M | $ | 8,554 | $ | 20,451 | (58 | %) | |||||||||||||
(Loss) Earnings Per Share - Basic | $ | (0.34 | ) | $ | 0.99 | N/M | $ | 1.67 | N/M | $ | 1.26 | $ | 2.48 | (49 | %) | |||||||||||||
(Loss) Earnings Per Share - Diluted | $ | (0.34 | ) | $ | 0.97 | N/M | $ | 1.62 | N/M | $ | 1.22 | $ | 2.43 | (50 | %) | |||||||||||||
Cash Dividends Declared Per Preferred Share | $ | 1.81 | $ | — | N/M | $ | 1.81 | — | % | $ | 3.63 | $ | — | N/M | ||||||||||||||
Cash Dividends Declared Per Common Share | $ | 0.45 | $ | 0.45 | — | % | $ | 0.45 | — | % | $ | 0.90 | $ | 0.90 | — | % | ||||||||||||
Weighted Average Shares Outstanding - Basic | 7,064 | 8,170 | (14 | %) | 6,542 | 8 | % | 6,804 | 8,257 | (18 | %) | |||||||||||||||||
Weighted Average Shares Outstanding - Diluted | 7,064 | 8,314 | (15 | %) | 6,773 | 4 | % | 7,020 | 8,410 | (17 | %) |
Three Months Ended | |||||||||||||||||||
Jun 30, 2016 | Sep 30, 2016 | Dec 31, 2016 | Mar 31, 2017 | Jun 30, 2017 | |||||||||||||||
By product (period end): | |||||||||||||||||||
Open-End Funds (1) | $ | 24,813.8 | $ | 25,266.4 | $ | 23,432.8 | $ | 24,716.8 | $ | 41,452.8 | |||||||||
Closed-End Funds | 6,959.6 | 6,887.3 | 6,757.4 | 6,814.3 | 6,707.2 | ||||||||||||||
Exchange Traded Funds | 399.4 | 460.6 | 596.8 | 863.3 | 968.8 | ||||||||||||||
Retail Separate Accounts | 7,407.2 | 7,924.8 | 8,473.5 | 9,312.1 | 12,351.1 | ||||||||||||||
Institutional Accounts | 4,920.0 | 5,376.6 | 5,492.7 | 5,711.3 | 20,639.1 | ||||||||||||||
Structured Products | 669.7 | 623.8 | 613.1 | 602.0 | 2,899.8 | ||||||||||||||
Total Long-Term | $ | 45,169.7 | $ | 46,539.5 | $ | 45,366.3 | $ | 48,019.8 | $ | 85,018.8 | |||||||||
Liquidity (3) | — | — | — | — | 3,570.6 | ||||||||||||||
Total | 45,169.7 | 46,539.5 | 45,366.3 | 48,019.8 | 88,589.4 | ||||||||||||||
By product (average) (2) | |||||||||||||||||||
Open-End Funds (1) | $ | 25,537.7 | $ | 25,149.9 | $ | 24,223.1 | $ | 24,157.6 | $ | 30,651.6 | |||||||||
Closed-End Funds | 6,659.9 | 6,853.4 | 6,668.9 | 6,786.1 | 6,809.6 | ||||||||||||||
Exchange Traded Funds | 371.9 | 426.0 | 490.1 | 759.2 | 900.8 | ||||||||||||||
Retail Separate Accounts | 7,015.0 | 7,413.6 | 7,898.6 | 8,463.6 | 10,143.7 | ||||||||||||||
Institutional Accounts | 4,831.6 | 5,044.2 | 5,400.8 | 5,603.2 | 10,795.1 | ||||||||||||||
Structured Products | 392.3 | 643.4 | 614.2 | 603.3 | 1,392.9 | ||||||||||||||
Total Long-Term | $ | 44,808.4 | $ | 45,530.5 | $ | 45,295.7 | $ | 46,373.0 | $ | 60,693.7 | |||||||||
Liquidity (3) | — | — | — | — | 1,328.6 | ||||||||||||||
Total | $ | 44,808.4 | $ | 45,530.5 | $ | 45,295.7 | $ | 46,373.0 | $ | 62,022.3 | |||||||||
By asset class (period end): | |||||||||||||||||||
Equity | $ | 26,206.9 | $ | 26,669.5 | $ | 25,822.3 | $ | 27,990.5 | $ | 41,672.6 | |||||||||
Fixed Income | 15,450.6 | 15,756.8 | 15,523.6 | 15,908.7 | 39,102.1 | ||||||||||||||
Alternatives (4) | 3,512.2 | 4,113.2 | 4,020.4 | 4,120.6 | 4,244.1 | ||||||||||||||
Liquidity (3) | — | — | — | — | 3,570.6 | ||||||||||||||
Total | $ | 45,169.7 | $ | 46,539.5 | $ | 45,366.3 | $ | 48,019.8 | $ | 88,589.4 |
Three Months Ended | ||||||||||||||
Jun 30, 2016 | Sep 30, 2016 | Dec 31, 2016 | Mar 31, 2017 | Jun 30, 2017 | ||||||||||
Total Products | ||||||||||||||
Open-End Funds (1) | 49.4 | 50.1 | 50.5 | 50.5 | 50.7 | |||||||||
Closed-End Funds | 65.4 | 65.9 | 66.5 | 66.2 | 65.8 | |||||||||
Exchange Traded Funds | 36.2 | 32.4 | 24.6 | 31.7 | 27.2 | |||||||||
Retail Separate Accounts | 55.2 | 53.2 | 52.8 | 53.9 | 49.7 | |||||||||
Institutional Accounts | 37.1 | 37.0 | 37.7 | 37.2 | 32.7 | |||||||||
Structured Products | 24.9 | 76.3 | 32.9 | 33.5 | 33.5 | |||||||||
All Long-Term Products | 51.1 | 51.8 | 51.2 | 51.3 | 48.3 | |||||||||
Liquidity (3) | — | — | — | — | 11.4 | |||||||||
All Products | 51.1 | 51.8 | 51.2 | 51.3 | 47.5 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
6/30/2016 | 9/30/2016 | 12/31/2016 | 3/31/2017 | 6/30/2017 | 6/30/2016 | 6/30/2017 | |||||||||||||||||||||
Open-End Funds (1) | |||||||||||||||||||||||||||
Beginning balance | $ | 26,536.0 | $ | 24,813.8 | $ | 25,266.4 | $ | 23,432.8 | $ | 24,716.8 | $ | 28,882.1 | $ | 23,432.8 | |||||||||||||
Inflows | 1,351.9 | 1,882.5 | 1,642.3 | 2,032.7 | 2,253.9 | 3,545.3 | 4,286.6 | ||||||||||||||||||||
Outflows | (3,799.8 | ) | (2,139.4 | ) | (2,384.2 | ) | (2,134.7 | ) | (2,278.6 | ) | (8,594.1 | ) | (4,413.3 | ) | |||||||||||||
Net flows | (2,447.9 | ) | (256.9 | ) | (741.9 | ) | (102.0 | ) | (24.7 | ) | (5,048.8 | ) | (126.7 | ) | |||||||||||||
Market performance | 887.5 | 736.5 | (1,021.2 | ) | 1,444.5 | 1,212.3 | 1,183.4 | 2,656.8 | |||||||||||||||||||
Other (2) | (161.8 | ) | (27.0 | ) | (70.5 | ) | (58.5 | ) | 15,548.4 | (202.9 | ) | 15,489.9 | |||||||||||||||
Ending balance | $ | 24,813.8 | $ | 25,266.4 | $ | 23,432.8 | $ | 24,716.8 | $ | 41,452.8 | $ | 24,813.8 | $ | 41,452.8 | |||||||||||||
Closed-End Funds | |||||||||||||||||||||||||||
Beginning balance | $ | 6,543.6 | $ | 6,959.6 | $ | 6,887.3 | $ | 6,757.4 | $ | 6,814.3 | $ | 6,222.3 | $ | 6,757.4 | |||||||||||||
Inflows | — | — | — | — | — | — | — | ||||||||||||||||||||
Outflows | (103.3 | ) | — | — | (81.6 | ) | (31.2 | ) | (103.3 | ) | (112.8 | ) | |||||||||||||||
Net flows | (103.3 | ) | — | — | (81.6 | ) | (31.2 | ) | (103.3 | ) | (112.8 | ) | |||||||||||||||
Market performance | 481.7 | (63.3 | ) | (44.8 | ) | 280.8 | 16.4 | 903.0 | 297.2 | ||||||||||||||||||
Other (2) | 37.6 | (9.0 | ) | (85.1 | ) | (142.3 | ) | (92.3 | ) | (62.4 | ) | (234.6 | ) | ||||||||||||||
Ending balance | $ | 6,959.6 | $ | 6,887.3 | $ | 6,757.4 | $ | 6,814.3 | $ | 6,707.2 | $ | 6,959.6 | $ | 6,707.2 | |||||||||||||
Exchange Traded Funds | |||||||||||||||||||||||||||
Beginning balance | $ | 353.6 | $ | 399.4 | $ | 460.6 | $ | 596.8 | $ | 863.3 | $ | 340.8 | $ | 596.8 | |||||||||||||
Inflows | 52.8 | 66.9 | 200.8 | 265.7 | 185.1 | 115.1 | 450.8 | ||||||||||||||||||||
Outflows | (20.8 | ) | (19.6 | ) | (50.6 | ) | (23.0 | ) | (51.3 | ) | (54.6 | ) | (74.3 | ) | |||||||||||||
Net flows | 32.0 | 47.3 | 150.2 | 242.7 | 133.8 | 60.5 | 376.5 | ||||||||||||||||||||
Market performance | 17.4 | 19.4 | (2.9 | ) | 34.6 | (8.5 | ) | 3.8 | 26.1 | ||||||||||||||||||
Other (2) | (3.6 | ) | (5.5 | ) | (11.1 | ) | (10.8 | ) | (19.8 | ) | (5.7 | ) | (30.6 | ) | |||||||||||||
Ending balance | $ | 399.4 | $ | 460.6 | $ | 596.8 | $ | 863.3 | $ | 968.8 | $ | 399.4 | $ | 968.8 | |||||||||||||
Retail Separate Accounts | |||||||||||||||||||||||||||
Beginning balance | $ | 7,021.1 | $ | 7,407.2 | $ | 7,924.8 | $ | 8,473.5 | $ | 9,312.1 | $ | 6,784.4 | $ | 8,473.5 | |||||||||||||
Inflows | 444.2 | 516.1 | 466.0 | 689.2 | 656.2 | 843.4 | 1,345.4 | ||||||||||||||||||||
Outflows | (314.6 | ) | (182.0 | ) | (296.0 | ) | (297.9 | ) | (455.7 | ) | (678.9 | ) | (753.6 | ) | |||||||||||||
Net flows | 129.6 | 334.1 | 170.0 | 391.3 | 200.5 | 164.5 | 591.8 | ||||||||||||||||||||
Market performance | 246.5 | 189.9 | 376.3 | 453.8 | 341.6 | 457.3 | 795.4 | ||||||||||||||||||||
Other (2) | 10.0 | (6.4 | ) | 2.4 | (6.5 | ) | 2,496.9 | 1.0 | 2,490.4 | ||||||||||||||||||
Ending balance | $ | 7,407.2 | $ | 7,924.8 | $ | 8,473.5 | $ | 9,312.1 | $ | 12,351.1 | $ | 7,407.2 | $ | 12,351.1 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
6/30/2016 | 9/30/2016 | 12/31/2016 | 3/31/2017 | 6/30/2017 | 6/30/2016 | 6/30/2017 | |||||||||||||||||||||
Institutional Accounts | |||||||||||||||||||||||||||
Beginning balance | $ | 4,848.3 | $ | 4,920.0 | $ | 5,376.6 | $ | 5,492.7 | $ | 5,711.3 | $ | 4,799.7 | $ | 5,492.7 | |||||||||||||
Inflows | 224.9 | 612.5 | 321.7 | 277.7 | 357.1 | 411.1 | 634.8 | ||||||||||||||||||||
Outflows | (292.0 | ) | (207.2 | ) | (263.5 | ) | (191.9 | ) | (612.1 | ) | (568.6 | ) | (804.0 | ) | |||||||||||||
Net flows | (67.1 | ) | 405.3 | 58.2 | 85.8 | (255.0 | ) | (157.5 | ) | (169.2 | ) | ||||||||||||||||
Market performance | 144.1 | 56.4 | 63.7 | 138.3 | 168.1 | 292.5 | 306.4 | ||||||||||||||||||||
Other (2) | (5.3 | ) | (5.1 | ) | (5.8 | ) | (5.5 | ) | 15,014.7 | (14.7 | ) | 15,009.2 | |||||||||||||||
Ending balance | $ | 4,920.0 | $ | 5,376.6 | $ | 5,492.7 | $ | 5,711.3 | $ | 20,639.1 | $ | 4,920.0 | $ | 20,639.1 | |||||||||||||
Structured Products | |||||||||||||||||||||||||||
Beginning balance | $ | 348.6 | $ | 669.7 | $ | 623.8 | $ | 613.1 | $ | 602.0 | $ | 356.0 | $ | 613.1 | |||||||||||||
Inflows | 316.3 | — | — | — | — | 316.3 | — | ||||||||||||||||||||
Outflows | (13.5 | ) | (45.2 | ) | (11.6 | ) | (16.7 | ) | (224.0 | ) | (13.5 | ) | (240.7 | ) | |||||||||||||
Net flows | 302.8 | (45.2 | ) | (11.6 | ) | (16.7 | ) | (224.0 | ) | 302.8 | (240.7 | ) | |||||||||||||||
Market performance | 9.5 | 3.9 | 6.7 | 10.3 | 13.5 | 9.5 | 23.8 | ||||||||||||||||||||
Other (2) | 8.8 | (4.6 | ) | (5.8 | ) | (4.7 | ) | 2,508.3 | 1.4 | 2,503.6 | |||||||||||||||||
Ending balance | $ | 669.7 | $ | 623.8 | $ | 613.1 | $ | 602.0 | $ | 2,899.8 | $ | 669.7 | $ | 2,899.8 | |||||||||||||
Total Long-Term | |||||||||||||||||||||||||||
Beginning balance | $ | 45,651.2 | $ | 45,169.7 | $ | 46,539.5 | $ | 45,366.3 | $ | 48,019.8 | $ | 47,385.3 | $ | 45,366.3 | |||||||||||||
Inflows | 2,390.1 | 3,078.0 | 2,630.8 | 3,265.3 | 3,452.3 | 5,231.2 | 6,717.6 | ||||||||||||||||||||
Outflows | (4,544.0 | ) | (2,593.4 | ) | (3,005.9 | ) | (2,745.8 | ) | (3,652.9 | ) | (10,013.0 | ) | (6,398.7 | ) | |||||||||||||
Net flows | (2,153.9 | ) | 484.6 | (375.1 | ) | 519.5 | (200.6 | ) | (4,781.8 | ) | 318.9 | ||||||||||||||||
Market performance | 1,786.7 | 942.8 | (622.2 | ) | 2,362.3 | 1,743.4 | 2,849.5 | 4,105.7 | |||||||||||||||||||
Other (2) | (114.3 | ) | (57.6 | ) | (175.9 | ) | (228.3 | ) | 35,456.2 | (283.3 | ) | 35,227.9 | |||||||||||||||
Ending balance | $ | 45,169.7 | $ | 46,539.5 | $ | 45,366.3 | $ | 48,019.8 | $ | 85,018.8 | $ | 45,169.7 | $ | 85,018.8 | |||||||||||||
Liquidity | |||||||||||||||||||||||||||
Beginning balance | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Other (2) | — | — | — | — | 3,570.6 | — | 3,570.6 | ||||||||||||||||||||
Ending balance | $ | — | $ | — | $ | — | $ | — | $ | 3,570.6 | $ | — | $ | 3,570.6 | |||||||||||||
Total | |||||||||||||||||||||||||||
Beginning balance | $ | 45,651.2 | $ | 45,169.7 | $ | 46,539.5 | $ | 45,366.3 | $ | 48,019.8 | $ | 47,385.3 | $ | 45,366.3 | |||||||||||||
Inflows | 2,390.1 | 3,078.0 | 2,630.8 | 3,265.3 | 3,452.3 | 5,231.2 | 6,717.6 | ||||||||||||||||||||
Outflows | (4,544.0 | ) | (2,593.4 | ) | (3,005.9 | ) | (2,745.8 | ) | (3,652.9 | ) | (10,013.0 | ) | (6,398.7 | ) | |||||||||||||
Net flows | (2,153.9 | ) | 484.6 | (375.1 | ) | 519.5 | (200.6 | ) | (4,781.8 | ) | 318.9 | ||||||||||||||||
Market performance | 1,786.7 | 942.8 | (622.2 | ) | 2,362.3 | 1,743.4 | 2,849.5 | 4,105.7 | |||||||||||||||||||
Other (2) | (114.3 | ) | (57.6 | ) | (175.9 | ) | (228.3 | ) | 39,026.8 | (283.3 | ) | 38,798.5 | |||||||||||||||
Ending balance | $ | 45,169.7 | $ | 46,539.5 | $ | 45,366.3 | $ | 48,019.8 | $ | 88,589.4 | $ | 45,169.7 | $ | 88,589.4 |
Three Months Ended | |||||||||||
6/30/2017 | 6/30/2016 | 3/31/2017 | |||||||||
Total revenues, GAAP | $ | 94,132 | $ | 80,085 | $ | 79,776 | |||||
Distribution and other asset-based expenses (1) | (15,764 | ) | (17,432 | ) | (15,323 | ) | |||||
Consolidated investment products revenues (2) | 236 | (27 | ) | 286 | |||||||
Total revenues, as adjusted | $ | 78,604 | $ | 62,626 | $ | 64,739 |
Three Months Ended | |||||||||||
6/30/2017 | 6/30/2016 | 3/31/2017 | |||||||||
Total operating expenses, GAAP | $ | 90,948 | $ | 71,342 | $ | 69,729 | |||||
Distribution and other asset-based expenses (1) | (15,764 | ) | (17,432 | ) | (15,323 | ) | |||||
Consolidated investment products expenses (2) | (473 | ) | (4,618 | ) | (642 | ) | |||||
Amortization of intangible assets (3) | (1,813 | ) | (603 | ) | (233 | ) | |||||
Restructuring and severance (4) | (255 | ) | (2,391 | ) | — | ||||||
Acquisition and integration expenses (5) | (16,327 | ) | — | (1,629 | ) | ||||||
Other (6) | (374 | ) | (358 | ) | (669 | ) | |||||
Total operating expenses, as adjusted | $ | 55,942 | $ | 45,940 | $ | 51,233 |
Three Months Ended | |||||||||||
6/30/2017 | 6/30/2016 | 3/31/2017 | |||||||||
Operating income, GAAP | $ | 3,184 | $ | 8,743 | $ | 10,047 | |||||
Consolidated investment products earnings (2) | 709 | 4,591 | 928 | ||||||||
Amortization of intangible assets (3) | 1,813 | 603 | 233 | ||||||||
Restructuring and severance (4) | 255 | 2,391 | — | ||||||||
Acquisition and integration expenses (5) | 16,327 | — | 1,629 | ||||||||
Other (6) | 374 | 358 | 669 | ||||||||
Operating income, as adjusted | $ | 22,662 | $ | 16,686 | $ | 13,506 | |||||
Operating margin, GAAP | 3.4 | % | 10.9 | % | 12.6 | % | |||||
Operating margin, as adjusted | 28.8 | % | 26.6 | % | 20.9 | % |
Three Months Ended | |||||||||||
6/30/2017 | 6/30/2016 | 3/31/2017 | |||||||||
Net (loss) income attributable to common stockholders, GAAP | $ | (2,389 | ) | $ | 8,088 | $ | 10,943 | ||||
Amortization of intangible assets, net of tax (3) | 1,124 | 371 | 143 | ||||||||
Restructuring and severance, net of tax (4) | 158 | 1,470 | — | ||||||||
Acquisition and integration expenses, net of tax (5) | 11,540 | — | 1,001 | ||||||||
Other, net of tax (6) | 3,779 | 220 | 2,209 | ||||||||
Seed capital and CLO investments (earnings) losses, net of tax (7) | (859 | ) | 149 | (5,679 | ) | ||||||
Net income attributable to common stockholders, as adjusted | $ | 13,353 | $ | 10,298 | $ | 8,617 | |||||
Weighted Average Shares Outstanding - Basic | 7,064 | 8,170 | 6,542 | ||||||||
Preferred stockA | 1,045 | — | 675 | ||||||||
Weighted Average Shares Outstanding - Basic, as adjusted | 8,109 | 8,170 | 7,217 | ||||||||
Weighted Average Shares Outstanding - Diluted | 7,064 | 8,314 | 6,773 | ||||||||
Preferred stockA | 1,045 | — | 674 | ||||||||
Restricted stock units | 202 | — | — | ||||||||
Weighted Average Shares Outstanding - Diluted, as adjusted | 8,311 | 8,314 | 7,447 | ||||||||
(Loss) Earnings Per Share - Basic, GAAP | $ | (0.34 | ) | $ | 0.99 | $ | 1.67 | ||||
(Loss) Earnings Per Share - Diluted, GAAP | $ | (0.34 | ) | $ | 0.97 | $ | 1.62 | ||||
Earnings Per Share - Basic, as adjusted | $ | 1.65 | $ | 1.26 | $ | 1.19 | |||||
Earnings Per Share - Diluted, as adjusted | $ | 1.61 | $ | 1.24 | $ | 1.16 |
Three Months Ended | |||||||||||
6/30/2017 | 6/30/2016 | 3/31/2017 | |||||||||
Income before taxes, GAAP | $ | 1,908 | $ | 14,787 | $ | 18,178 | |||||
Consolidated investment products (earnings) (2) | (333 | ) | (612 | ) | (718 | ) | |||||
Amortization of intangible assets (3) | 1,813 | 603 | 233 | ||||||||
Restructuring and severance (4) | 255 | 2,391 | — | ||||||||
Acquisition and integration expenses (5) | 18,613 | — | 1,629 | ||||||||
Other (6) | 374 | 358 | 669 | ||||||||
Seed capital and CLO investments (earnings) (7) | (1,096 | ) | (781 | ) | (5,967 | ) | |||||
Income before taxes, as adjusted | $ | 21,534 | $ | 16,746 | $ | 14,024 |
Three Months Ended | |||||||||||
6/30/2017 | 6/30/2016 | 3/31/2017 | |||||||||
Income tax expense, GAAP | $ | 1,880 | $ | 6,087 | $ | 4,433 | |||||
Tax impact of: | |||||||||||
Amortization of intangible assets (3) | 689 | 232 | 90 | ||||||||
Restructuring and severance (4) | 97 | 921 | — | ||||||||
Acquisition and integration expenses (5) | 7,073 | — | 628 | ||||||||
Other (6) | (1,321 | ) | 138 | 544 | |||||||
Seed capital and CLO investments (earnings) (7) | (237 | ) | (930 | ) | (288 | ) | |||||
Income tax expense, as adjusted | $ | 8,181 | $ | 6,448 | $ | 5,407 | |||||
Effective tax rate, GAAPA | 98.5 | % | 41.2 | % | 24.4 | % | |||||
Effective tax rate, as adjustedB | 38.0 | % | 38.5 | % | 38.6 | % |
Three Months Ended | |||||||||||
6/30/2017 | 6/30/2016 | 3/31/2017 | |||||||||
Investment management fees, GAAP | $ | 74,062 | $ | 58,192 | $ | 59,271 | |||||
Consolidated investment products fees (2) | 210 | (88 | ) | 242 | |||||||
Investment management fees, as adjusted | $ | 74,272 | $ | 58,104 | $ | 59,513 |
Three Months Ended | |||||||||||
6/30/2017 | 6/30/2016 | 3/31/2017 | |||||||||
Administration and transfer agent fees, GAAP | $ | 9,476 | $ | 9,499 | $ | 8,981 | |||||
Consolidated investment products fees (2) | 19 | 49 | 34 | ||||||||
Administration and transfer agent fees, as adjusted | $ | 9,495 | $ | 9,548 | $ | 9,015 |
Three Months Ended | |||||||||||
6/30/2017 | 6/30/2016 | 3/31/2017 | |||||||||
Employment expenses, GAAP | $ | 42,992 | $ | 33,065 | $ | 39,641 | |||||
Acquisition and integration expenses (5) | (2,059 | ) | — | — | |||||||
Employment expenses, as adjusted | $ | 40,933 | $ | 33,065 | $ | 39,641 |
Three Months Ended | |||||||||||
6/30/2017 | 6/30/2016 | 3/31/2017 | |||||||||
Restructuring and severance, GAAP | $ | 8,894 | $ | 2,391 | $ | — | |||||
Restructuring and severance (4) | (255 | ) | (2,391 | ) | — | ||||||
Acquisition and integration expenses (5) | (8,639 | ) | — | — | |||||||
Restructuring and severance, as adjusted | $ | — | $ | — | $ | — |
Three Months Ended | |||||||||||
6/30/2017 | 6/30/2016 | 3/31/2017 | |||||||||
Other operating expenses, GAAP | $ | 20,236 | $ | 12,457 | $ | 13,226 | |||||
Acquisition and integration expenses (5) | (5,629 | ) | — | (1,629 | ) | ||||||
Other (6) | (374 | ) | (358 | ) | (669 | ) | |||||
Other operating expenses, as adjusted | $ | 14,233 | $ | 12,099 | $ | 10,928 |
1. | Distribution and other asset-based expenses - Primarily payments to third-party distribution partners and third-party service providers for providing services to investors in our sponsored funds and payments to third-party service providers for investment management-related services. Management believes that making this adjustment aids in comparing the company’s operating results with other asset management firms that do not utilize intermediary distribution partners or third-party service providers. |
2. | Consolidated investment products - Revenues and expenses generated by operating activities of majority-owned mutual funds and CLOs that are consolidated in the financial statements. Management believes that excluding these operating activities to reflect net revenues and expenses of the company prior to the consolidation of these products is consistent with the approach of reflecting its operating results from managing third-party client assets. |
3. | Amortization of intangible assets - Non-cash amortization expense or impairment expense, if any, attributable to acquisition-related intangible assets. Management believes that making this adjustment aids in comparing the company’s operating results with other asset management firms that have not engaged in acquisitions. |
4. | Restructuring and severance - Certain expenses associated with restructuring the business, including lease abandonment-related expenses and severance costs associated with staff reductions, that are not reflective of the ongoing earnings generation of the business. Management believes that making this adjustment aids in comparing the company's operating results with prior periods. |
5. | Acquisition and integration expenses - Expenses that are directly related to acquisition and integration activities. Acquisition expenses include transaction closing costs, professional fees and financing fees. Integration expenses include costs incurred that are directly attributable to combining businesses, including compensation, restructuring and severance charges, professional fees, consulting fees and other expenses. Management believes that making these adjustments aids in comparing the company’s operating results with other asset management firms that have not engaged in acquisitions. |
Three Months Ended | |||||||||||
Acquisition Related Expenses | 6/30/2017 | 6/30/2016 | 3/31/2017 | ||||||||
Employment expenses | $ | 2,059 | $ | — | $ | — | |||||
Restructuring and severance | 8,639 | — | — | ||||||||
Other operating expenses | 5,629 | — | 1,629 | ||||||||
Total Acquisition Operating Expenses | 16,327 | — | 1,629 | ||||||||
Interest expense | 2,286 | — | — | ||||||||
Total Acquisition Related Expenses | $ | 18,613 | $ | — | $ | 1,629 |
6. | Other - Certain expenses that are not reflective of the ongoing earnings generation of the business. In addition, it includes income tax expense (benefit) items, such as adjustments for uncertain tax positions, valuation allowances and other unusual or infrequent items not related to current operating results to reflect a normalized effective rate. Preferred dividends are adjusted as the shares are mandatorily convertible into common shares at the end of three years and the non-GAAP weighted average shares are adjusted to reflect the conversion. Management believes that making these adjustments aids in comparing the company’s operating results with prior periods. |
Three Months Ended | |||||||||||
Other | 6/30/2017 | 6/30/2016 | 3/31/2017 | ||||||||
System transition expenses | $ | 374 | $ | 358 | $ | 669 | |||||
Tax impact of system transition expenses | (141 | ) | (138 | ) | (258 | ) | |||||
Discrete tax adjustments | 1,462 | — | (286 | ) | |||||||
Preferred stockholder dividends | 2,084 | — | 2,084 | ||||||||
Total Other | $ | 3,779 | $ | 220 | $ | 2,209 |
7. | Seed capital and CLO investments earnings (losses) - Gains and losses (realized and unrealized), dividends and interest income generated by seed capital and CLO investments. Earnings or losses generated by investments in seed capital and CLO investments can vary significantly from period to period and do not reflect the company’s operating results from providing investment management and related services. Management believes that making this adjustment aids in comparing the company’s operating results with prior periods and with other asset management firms that do not have meaningful seed capital and CLO investments. |
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