[X]
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
[
]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
GAMCO
INVESTORS, INC.
|
||||||
(Exact
name of Registrant as specified in its charter)
|
||||||
New
York
|
13-4007862
|
|||||
(State
of other jurisdiction of incorporation
or organization)
|
(I.R.S.
Employer Identification
No.)
|
|||||
One
Corporate Center, Rye, NY
|
10580-1422
|
|||||
(Address
of principle executive offices)
|
(Zip
Code)
|
|||||
(914)
921-5100
|
||||||
Registrant’s
telephone number, including area
code
|
Yes
|
x
|
No
|
o
|
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer",
"accelerated filer", and "smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):
|
|||
Large
accelerated filer ¨
|
Accelerated
filer x
|
||
Non-accelerated
filer o
|
Smaller
reporting company o
|
Yes
|
o |
No
|
x
|
Class
|
Outstanding at July 31,
2008
|
||||
Class
A Common Stock, .001 par value
|
7,316,045
|
||||
Class
B Common Stock, .001 par value
|
20,626,644
|
INDEX
|
|||||
GAMCO
INVESTORS, INC. AND SUBSIDIARIES
|
|||||
PART
I.
|
FINANCIAL
INFORMATION
|
||||
Item
1.
|
Unaudited
Condensed Consolidated Financial Statements
|
||||
Condensed
Consolidated Statements of Income:
|
|||||
- Three
months ended June 30, 2008 and 2007
|
|||||
- Six
months ended June 30, 2008 and 2007
|
|||||
Condensed
Consolidated Statements of Financial Condition:
|
|||||
- June
30, 2008
|
|||||
- December
31, 2007 (audited)
|
|||||
- June
30, 2007
|
|||||
Condensed
Consolidated Statements of Stockholders’ Equity and Comprehensive
Income:
|
|||||
- Six
months ended June 30, 2008 and 2007
|
|||||
|
|||||
Condensed
Consolidated Statements of Cash Flows:
|
|||||
- Six
months ended June 30, 2008 and 2007
|
|||||
|
|||||
Notes
to Condensed Consolidated Financial Statements
|
|||||
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
||||
(Including
Quantitative and Qualitative Disclosure
about Market Risk)
|
|||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | ||||
Item
4.
|
Controls
and Procedures
|
||||
PART
II.
|
OTHER
INFORMATION
|
||||
Item
2.
|
Changes
in Securities, Use of Proceeds and Issuer Purchases of Equity
Securities
|
||||
|
|||||
Item 4. | Submission of Matters to a Vote of Security Holders | ||||
Item
6.
|
Exhibits
|
||||
SIGNATURES
|
|||||
GAMCO
INVESTORS, INC. AND SUBSIDIARIES
|
||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
||||||||
UNAUDITED
|
||||||||
(In
thousands, except per share data)
|
||||||||
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Revenues
|
||||||||||||||||
Investment
advisory and incentive fees
|
$
|
55,131
|
$
|
57,654
|
$
|
111,972
|
$
|
114,214
|
||||||||
Commission
revenue
|
3,664
|
4,036
|
6,920
|
8,056
|
||||||||||||
Distribution
fees and other income
|
6,629
|
6,587
|
13,080
|
12,613
|
||||||||||||
Total
revenues
|
65,424
|
68,277
|
131,972
|
134,883
|
||||||||||||
Expenses
|
||||||||||||||||
Compensation
costs
|
27,763
|
29,905
|
56,610
|
58,279
|
||||||||||||
Management
fee
|
2,586
|
3,449
|
4,567
|
6,850
|
||||||||||||
Distribution
costs
|
6,794
|
10,161
|
13,203
|
16,047
|
||||||||||||
Other
operating expenses
|
7,074
|
7,594
|
13,128
|
16,028
|
||||||||||||
Total
expenses
|
44,217
|
51,109
|
87,508
|
97,204
|
||||||||||||
Operating
income
|
21,207
|
17,168
|
44,464
|
37,679
|
||||||||||||
Other
income (expense)
|
||||||||||||||||
Net
gain (loss) from investments
|
10
|
11,193
|
(8,379
|
) |
16,763
|
|||||||||||
Interest
and dividend income
|
4,196
|
6,166
|
8,970
|
14,168
|
||||||||||||
Interest
expense
|
(2,199
|
)
|
(3,329
|
)
|
(4,266
|
)
|
(6,709
|
)
|
||||||||
Total
other income (expense), net
|
2,007
|
14,030
|
(3,675
|
) |
24,222
|
|||||||||||
Income
before income taxes and minority interest
|
23,214
|
31,198
|
40,789
|
61,901
|
||||||||||||
Income
tax provision
|
8,719
|
12,856
|
16,045
|
24,063
|
||||||||||||
Minority
interest
|
36
|
345
|
(201
|
) |
677
|
|||||||||||
Net
income
|
$
|
14,459
|
$
|
17,997
|
$
|
24,945
|
$
|
37,161
|
||||||||
Net
income per share:
|
||||||||||||||||
Basic
|
$
|
0.52
|
$
|
0.64
|
$
|
0.89
|
$
|
1.32
|
||||||||
Diluted
|
$
|
0.51
|
$
|
0.63
|
$
|
0.89
|
$
|
1.30
|
||||||||
Weighted
average shares outstanding:
|
||||||||||||||||
Basic
|
27,948
|
28,160
|
28,070
|
28,194
|
||||||||||||
Diluted
|
28,743
|
29,147
|
28,896
|
29,172
|
||||||||||||
Dividends
declared:
|
$
|
0.03
|
$
|
0.03
|
$
|
0.06
|
$
|
0.06
|
||||||||
See
accompanying notes.
|
GAMCO
INVESTORS, INC. AND SUBSIDIARIES
|
||||||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
|
||||||||||||
(In
thousands)
|
||||||||||||
June
30,
|
December
31,
|
June
30,
|
||||||||||
2008
|
2007
|
2007
|
||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||
Cash
and cash equivalents, including restricted cash of $0, $0, and
$443
|
$ | 266,344 | $ | 168,319 | $ |
104,726
|
||||||
Investments
in securities, including restricted securities of $0, $0, and
$52,117
|
319,833 | 394,977 |
550,273
|
|||||||||
Investments
in partnerships and affiliates
|
77,955 | 100,031 |
69,869
|
|||||||||
Receivable
from brokers
|
21,936 | 40,145 |
43,187
|
|||||||||
Investment
advisory fees receivable
|
17,434 | 33,701 |
18,439
|
|||||||||
Other
assets
|
20,643 | 20,407 |
19,577
|
|||||||||
Total
assets
|
$ | 724,145 | $ | 757,580 | $ |
806,071
|
||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||||||
Payable
to brokers
|
$ | 4,888 | $ | 7,562 | $ |
30,973
|
||||||
Income
taxes payable, including deferred taxes of $3,201, $5,814, and
$10,012
|
5,546 | 17,539 |
14,951
|
|||||||||
Compensation
payable
|
29,162 | 25,362 |
46,075
|
|||||||||
Capital
lease obligation
|
2,377 | 2,525 |
2,659
|
|||||||||
Securities
sold, not yet purchased
|
2,105 | 2,229 |
21,021
|
|||||||||
Accrued
expenses and other liabilities
|
18,094 | 38,810 |
35,597
|
|||||||||
Total
operating liabilities
|
62,172 | 94,027 |
151,276
|
|||||||||
Long
term liabilities
|
||||||||||||
5.5%
Senior notes (due May 15, 2013)
|
100,000 | 100,000 |
100,000
|
|||||||||
6%
Convertible note (due August 14, 2011) (A)
|
39,726 | 49,608 |
49,561
|
|||||||||
Total
liabilities
|
201,898 | 243,635 |
300,837
|
|||||||||
Minority
interest
|
11,318 | 12,630 |
14,441
|
|||||||||
Stockholders’
equity
|
||||||||||||
Class
A Common Stock, $0.001 par value; 100,000,000
|
||||||||||||
shares
authorized; 12,757,024, 12,574,995, 12,172,423
|
||||||||||||
issued,
respectively; 7,549,145, 7,819,741, and 7,489,369
outstanding,
respectively
|
12 | 12 |
12
|
|||||||||
Class
B Common Stock, $0.001 par value; 100,000,000
|
||||||||||||
shares
authorized; 24,000,000 shares issued,
20,626,644,
20,626,644, 20,645,816 shares outstanding
|
21 | 21 |
21
|
|||||||||
Additional
paid-in capital
|
243,449 | 230,483 |
230,010
|
|||||||||
Retained
earnings
|
468,365 | 445,121 |
432,542
|
|||||||||
Accumulated
comprehensive gain
|
17,445 | 20,815 |
19,791
|
|||||||||
Treasury
stock, at cost (5,207,879, 4,755,254, and 4,683,054 shares,
respectively)
|
(218,363 | ) | (195,137 | ) |
(191,583
|
) | ||||||
Total
stockholders' equity
|
510,929 | 501,315 |
490,793
|
|||||||||
Total
liabilities and stockholders' equity
|
$ | 724,145 | $ | 757,580 | $ |
806,071
|
|
||||||
See accompanying
notes.
|
||||||
(A) $50 million
outstanding on December 31, 2007 and June 30, 2007. $40 million
outstanding on June 30, 2008.
|
||||||
GAMCO
INVESTORS, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE
INCOME
|
UNAUDITED
|
(In
thousands)
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||||
June
30,
|
June
30,
|
||||||||||||||
2008 |
2007
|
2008
|
2007
|
||||||||||||
Stockholders’
equity – beginning of period
|
$ | 507,862 | $ | 467,488 |
$
|
501,315
|
$
|
451,576
|
|||||||
Cumulative
effect of applying the provisions of FIN 48
at
January 1, 2007
|
- | - |
-
|
|
(822
|
) | |||||||||
Comprehensive
income:
|
|||||||||||||||
Net
income
|
14,459 | 17,997 |
24,945
|
37,161
|
|||||||||||
Foreign
currency translation adjustments
|
(21 |
)
|
12 |
-
|
13
|
|
|||||||||
Net
unrealized gain/(loss) on securities available for sale
|
730 | 8,666 |
(3,371
|
) |
9,352
|
||||||||||
Total
comprehensive income
|
15,168 | 26,675 |
21,574
|
46,526
|
|||||||||||
Dividends
declared
|
(844 |
)
|
(844 |
)
|
(1,700
|
)
|
(1,691
|
)
|
|||||||
Stock
based compensation expense
|
1,204 | 24 |
2,402
|
45
|
|||||||||||
Conversion of 6% convertible note | - | - | 10,000 | - | |||||||||||
Exercise
of stock options including tax benefit
|
(48 |
)
|
194 |
564
|
266
|
||||||||||
Purchase
of treasury stock
|
(12,413 |
)
|
(2,744 |
)
|
(23,226
|
)
|
(5,107
|
)
|
|||||||
Stockholders’
equity – end of period
|
$ | 510,929 | $ | 490,793 |
$
|
510,929
|
$
|
490,793
|
|||||||
See accompanying notes. |
GAMCO
INVESTORS, INC. AND
SUBSIDIARIES
|
||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
UNAUDITED
|
||||||||
(In
thousands)
|
||||||||
Six
Months Ended
|
||||||||
June
30,
|
||||||||
2008
|
2007
|
|||||||
Operating
activities
|
||||||||
Net
income
|
$ |
24,945
|
$ |
37,161
|
||||
Adjustments
to reconcile net income to net cash provided
by operating activities:
|
||||||||
Equity
in net gains from partnerships and affiliates
|
1,498
|
(4,744
|
) | |||||
Depreciation
and amortization
|
483
|
522
|
||||||
Stock
based compensation expense
|
2,402
|
45
|
||||||
Deferred
income tax
|
858
|
4,905
|
|
|||||
Tax
(expense) benefit from exercise of stock
options
|
(6
|
) |
57
|
|||||
Foreign
currency loss
|
-
|
13
|
||||||
Other-than-temporary
loss on available for sale securities
|
262
|
-
|
||||||
Impairment
of goodwill
|
-
|
56
|
||||||
Acquisition of intangible asset
|
(3,479
|
) |
-
|
|||||
Market
value of donated securities
|
157
|
122
|
||||||
Minority
interest in net income of consolidated subsidiaries
|
3
|
520
|
||||||
Realized
gains on sales of available for sale securities
|
(415
|
) |
(473
|
) | ||||
Realized
gains on sales of trading investments in securities, net
|
(3,209
|
) |
(11,874
|
) | ||||
Change
in unrealized value of trading investments in securities and securities
sold, not yet purchased, net
|
9,249
|
(2,498
|
)
|
|||||
Realized (gains) losses on covers of securities sold, not yet
purchased, net
|
(378
|
) |
979
|
|
||||
Amortization
on discount on debt
|
118
|
56
|
|
|||||
(Increase)
decrease in operating assets:
|
|
|||||||
Purchases
of trading investments in securities
|
(221,966
|
) |
(809,424
|
) | ||||
Proceeds
from sales of trading investments in securities
|
282,645
|
816,521
|
|
|||||
Cost of covers on securities sold, not yet purchased
|
(18,481
|
) |
(49,161
|
) | ||||
Proceeds from sales of securities sold, not yet purchased
|
19,015
|
65,145
|
|
|||||
Investments
in partnerships and affiliates
|
(182
|
) |
(4,050
|
) | ||||
Distributions
from partnerships and affiliates
|
20,626
|
13,149
|
||||||
Receivable
from brokers
|
15,738
|
10,022
|
||||||
Investment
advisory fees receivable
|
16,367
|
12,681
|
|
|||||
Other
receivables from affiliates
|
2,950
|
5,106
|
|
|||||
Other
assets
|
(194
|
) |
(153
|
) | ||||
Increase
(decrease) in operating liabilities:
|
|
|||||||
Payable
to brokers
|
(3,443
|
) |
(3,957
|
)
|
||||
Income
taxes payable
|
(9,541
|
) |
(9,562
|
) | ||||
Compensation
payable
|
4,567
|
14,289
|
||||||
Accrued
expenses and other liabilities
|
(20,819
|
) |
(5,050
|
) | ||||
Effects
of consolidation of investment partnerships and offshore funds
consolidated under
FIN 46R and EITF 04-5:
|
|
|
||||||
Realized gains
on sales of investments in securities and securities sold, not yet
purchased, net
|
(17
|
) |
(607
|
)
|
||||
Change
in unrealized value of investments in securities and securities sold, not
yet purchased, net
|
511
|
85
|
|
|||||
Equity
in net gains from partnerships and affiliates
|
761
|
(733
|
) | |||||
Purchases
of trading investments in securities
|
(6,848
|
) |
(34,002
|
)
|
||||
Proceeds
from sales of trading investments in securities
|
7,105
|
34,074
|
||||||
Cost
of covers on securities sold, not yet purchased
|
(11
|
) |
(434
|
) | ||||
Proceeds
from sales of securities sold, not yet purchased
|
-
|
477
|
||||||
Investments
in partnerships and affiliates
|
-
|
(2,000
|
)
|
|||||
Distributions
from partnerships and affiliates
|
-
|
825
|
||||||
Increase
in investment advisory fees receivable
|
(100
|
) |
(26
|
)
|
||||
Decrease in
receivable from brokers
|
2,471
|
473
|
||||||
Decrease
(increase) in other assets
|
5
|
(244
|
) | |||||
Increase
(decrease) in payable to brokers
|
769
|
(1,416
|
)
|
|||||
(Decrease)
increase in accrued expenses and other liabilities
|
(48
|
) |
315
|
|||||
(Loss)
income related to investment partnerships and offshore
funds consolidated under FIN 46R and EITF 04-5, net
|
(1,050
|
) |
996
|
|
||||
Total
adjustments
|
98,373
|
41,025
|
|
|||||
Net
cash provided by operating activities
|
123,318
|
78,186
|
GAMCO
INVESTORS, INC. AND SUBSIDIARIES
|
||
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)
|
||
UNAUDITED
|
||
(In
thousands)
|
||
Six
Months Ended
|
|||||||
June
30,
|
|||||||
2008
|
2007
|
|
|||||
Investing
activities
|
|||||||
Purchases
of available for sale securities
|
$ |
(777
|
) | $ |
(25,254
|
) | |
Proceeds
from sales of available for sale securities
|
618
|
2,292
|
|||||
Net
cash used in investing activities
|
(159
|
) |
(22,962
|
) | |||
Financing
activities
|
|||||||
Retirement
of 5.22% senior notes
|
-
|
(82,308
|
) | ||||
Contributions
related to investment partnerships and offshore funds consolidated
under FIN 46R and EITF 04-5, net
|
(169
|
) |
511
|
||||
Proceeds
from exercise of stock options
|
570
|
209
|
|||||
Dividends
paid
|
(1,700
|
) |
(1,691
|
) | |||
Dividends
declared on subsidiary stock to minority shareholders
|
(608
|
) |
(241
|
) | |||
Purchase
of treasury stock
|
(23,226
|
) |
(5,107
|
) | |||
Net
cash used in financing activities
|
(25,133
|
) |
(88,627
|
) | |||
Net
increase (decrease) in cash and cash equivalents
|
98,026
|
(33,403
|
) | ||||
Effect
of exchange rates on cash and cash equivalents
|
(1
|
) |
16
|
||||
Cash
and cash equivalents at beginning of period
|
168,319
|
138,113
|
|
||||
Cash
and cash equivalents at end of period
|
$
|
266,344
|
$ |
104,726
|
|
||
Non-cash
activity: On January 22, 2008, Cascade Investment LLC elected to
convert $10 million of the 6% convertible note into 188,697 GAMCO
Investors Inc. common shares.
|
|||||||
-
|
Level
1 inputs utilize quoted prices (unadjusted) in active markets for
identical assets or liabilities.
|
-
|
Level
2 inputs utilize inputs other than quoted prices included in Level 1 that
are observable for the asset or liability, either directly or indirectly.
Level 2 inputs include quoted prices for similar assets and liabilities in
active markets and inputs other than quoted prices that are observable for
the asset or liability, such as interest rates and yield curves that are
observable at commonly-quoted
intervals.
|
-
|
Level
3 inputs are unobservable inputs for the asset or liability, and include
situations where there is little, if any, market activity for the asset or
liability.
|
Assets
|
Quoted
Prices in Active Markets for Identical Assets (Level 1)
|
Significant
Other Observable Inputs (Level 2)
|
Significant
Unobservable Inputs (Level 3)
|
Balance
as of June 30, 2008
|
||||||||||||
Cash and cash equivalents | $ | 266,344 | $ | - | $ | - | $ | 266,344 | ||||||||
Investments in securities: | ||||||||||||||||
Available-for-sale | 127,126 | - | - | 127,126 | ||||||||||||
Trading | 190,512 | 183 | 2,012 | 192,707 | ||||||||||||
Total investments in securities | 317,638 | 183 | 2,012 | 319,833 | ||||||||||||
Total financial instruments owned | $ | 583,982 | $ | 183 | $ | 2,012 | $ | 586,177 | ||||||||
Liabilities
|
||||||||||||||||
Securities sold, not yet purchased | $ | 2,105 | $ | - | $ | - | $ | 2,105 |
Total
Realized and Unrealized Gains or (Losses) in Income
|
||||||||||||||||||||||||||||||||
Asset
|
Beginning
Balance
|
Trading
|
Investments
|
Total
Unrealized Gains or (Losses) Included in Other Comprehensive
Income
|
Total
Realized and Unrealized Gains or (Losses)
|
Purchases
and Sales, net
|
Net
Transfers In and/or (Out) of Level 3
|
Ending
Balance
|
||||||||||||||||||||||||
Financial instruments owned: | ||||||||||||||||||||||||||||||||
Investments in securities - trading | $ | 1,188 | $ | (302 | ) | $ | - | $ | - | $ | (302 | ) | $ | 735 | $ | 391 | $ | 2,012 | ||||||||||||||
Total | $ | 1,188 | $ | (302 | ) | $ | - | $ | - | $ | (302 | ) | $ | 735 | $ | 391 | $ | 2,012 |
Total
Realized and Unrealized Gains or (Losses) in Income
|
||||||||||||||||||||||||||||||||
Asset
|
Beginning
Balance
|
Trading
|
Investments
|
Total
Unrealized Gains or (Losses) Included in Other Comprehensive
Income
|
Total
Realized and Unrealized Gains or (Losses)
|
Purchases
and Sales, net
|
Net
Transfers In and/or (Out) of Level 3
|
Ending
Balance
|
||||||||||||||||||||||||
Financial instruments owned: | ||||||||||||||||||||||||||||||||
Investments in securities - trading | $ | 1,423 | $ | (537 | ) | $ | - | $ | - | $ | (537 | ) | $ | 735 | $ | 391 | $ | 2,012 | ||||||||||||||
Total | $ | 1,423 | $ | (537 | ) | $ | - | $ | - | $ | (537 | ) | $ | 735 | $ | 391 | $ | 2,012 |
(in
thousands, except per share amounts)
|
Three
Months Ended
June
30, 2008
|
Three
Months Ended
June
30, 2007
|
Six
Months Ended
June
30, 2008
|
Six
Months Ended
June
30, 2007
|
||||||||||||
Basic:
|
||||||||||||||||
Net
income
|
$
|
14,459
|
$
|
17,997
|
$
|
24,945
|
$
|
37,161
|
||||||||
Average
shares outstanding
|
27,948
|
28,160
|
28,070
|
28,194
|
||||||||||||
Basic
net income per share
|
$
|
0.52
|
$
|
0.64
|
$
|
0.89
|
$
|
1.32
|
||||||||
Diluted:
|
||||||||||||||||
Net
income
|
$
|
14,459
|
$
|
17,997
|
$
|
24,945
|
$
|
37,161
|
||||||||
Add
interest expense on convertible note, net of management fee and
taxes
|
343
|
429
|
709
|
857
|
||||||||||||
Total
|
$
|
14,802
|
$
|
18,426
|
$
|
25,654
|
$
|
38,018
|
||||||||
Average
shares outstanding
|
27,948
|
28,160
|
28,070
|
28,194
|
||||||||||||
Dilutive
stock options
|
40
|
44
|
46
|
35
|
||||||||||||
Assumed
conversion of convertible note
|
755
|
943
|
780
|
943
|
||||||||||||
Total
|
28,743
|
29,147
|
28,896
|
29,172
|
||||||||||||
Diluted
net income per share
|
$
|
0.51
|
$
|
0.63
|
|
$
|
0.89
|
$
|
1.30
|
2007
|
2008
|
2009
|
2010
|
2011
|
2012
|
|||||||||||||||||||||
Q1
|
$ | 21 | $ | 1,198 | $ | 1,199 | $ | 1,188 | $ | 694 | $ | 687 | ||||||||||||||
Q2
|
24 | 1,204 | 1,195 | 1,185 | 689 | 686 | ||||||||||||||||||||
Q3
|
24 | 1,207 | 1,194 | 1,185 | 687 | 685 | ||||||||||||||||||||
Q4
|
414 |
1,201
|
1,192 | 1,021 | 687 | 457 | ||||||||||||||||||||
Full
Year
|
$ | 483 | $ | 4,810 | $ | 4,780 | $ | 4,579 | $ | 2,757 | $ | 2,515 |
-
|
Our
open-end equity fund AUM were $9.5 billion on June 30, 2008, unchanged
from March 31, 2008 and June 30,
2007.
|
-
|
Our
closed-end equity funds had AUM of $5.7 billion on June 30, 2008, down
1.0% from $5.8 billion on March 31, 2008 and 11.0% from the $6.4 billion
on June 30, 2007.
|
-
|
Our
institutional and private wealth management business ended the quarter
with $11.6 billion in separately managed accounts, level with March 31,
2008 and 14.0% lower than the $13.5 billion on June 30, 2007. The
reclassification of the Gabelli Enterprise Mergers and Acquisitions Fund
from institutional sub-advisory to mutual fund advisory in March 2008
partially accounted for the decline in institutional and private wealth
management AUM. On a pro-forma basis, AUM was 8.4% lower than the $12.7
million AUM on June 30, 2007.
|
-
|
Our
Investment Partnerships AUM were $354 million on June 30, 2008 versus $396
million on March 31, 2008 and $486 million on June 30,
2007.
|
-
|
Fixed
income AUM were up 67.5% to $1.2 billion on June 30, 2008, versus the $0.7
billion on June 30, 2007. For the quarter, the assets were down 18.4% as
of March 31, 2008.
|
-
|
We
receive incentive and fulcrum fees for certain institutional client assets
as well as for preferred issues for our closed-end funds, fulcrum fees for
the Gabelli Global Deal Fund (NYSE: GDL) common shares, and incentive fees
for investment partnership assets. As of June 30, 2008, incentive and
fulcrum fee assets were $3.2 billion, slightly below $3.3 billion on March
31, 2008 and 12.1% below $3.6 billion on June 30,
2007.
|
Table I:
|
||||||||||
Mutual
Funds:
|
June
30, 2008
|
June
30, 2007
|
%
Inc. (Dec.)
|
Adjusted
% Inc. (Dec) (a)
|
||||||
Open-end
|
$
|
9,486
|
$
|
9,529
|
(0.5
|
)
|
(4.0
|
)
|
||
Closed-end
|
5,704
|
6,412
|
(11.0
|
)
|
(11.0
|
)
|
||||
Fixed
Income
|
1,164
|
684
|
70.2
|
70.2
|
||||||
Total
Mutual Funds
|
16,354
|
16,625
|
(1.6
|
)
|
(3.6
|
)
|
||||
Institutional
& PWM:
|
||||||||||
Equities:
direct
|
9,564
|
11,116
|
(14.0
|
)
|
(14.0
|
)
|
||||
“ " sub-advisory
|
2,043
|
2,383
|
(14.3
|
)
|
0.0
|
|||||
Fixed
Income
|
17
|
21
|
(19.0
|
)
|
(19.0
|
)
|
||||
Total
Institutional & PWM
|
11,624
|
13,520
|
(14.0
|
)
|
(11.5
|
)
|
||||
Investment
Partnerships
|
354
|
486
|
(27.2
|
)
|
(27.2
|
)
|
||||
Total
Assets Under Management
|
$
|
28,332
|
$
|
30,631
|
(7.5
|
)
|
(7.5
|
)
|
||
Equities
|
$
|
27,151
|
$
|
29,926
|
(9.3
|
)
|
(9.3
|
)
|
||
Fixed
Income
|
1,181
|
705
|
67.5
|
67.5
|
||||||
Total
Assets Under Management
|
$
|
28,332
|
$
|
30,631
|
(7.5
|
)
|
(7.5
|
)
|
Table
II:
|
Assets
Under Management By Quarter (millions)
|
||||||||||||||||||||||||||||||
%
Increase/(decrease)
|
|||||||||||||||||||||||||||||||
Mutual
Funds
|
6/08
|
3/08
|
12/07
|
9/07
|
6/07
|
12/07
(a)
|
|
3/08
|
|||||||||||||||||||||||
Open-end
|
$
|
9,486
|
$
|
9,459
|
$
|
9,774
|
$
|
9,866
|
$
|
9,529
|
(6.4
|
)
|
0.3
|
||||||||||||||||||
Closed-end
|
5,704
|
5,762
|
6,341
|
6,443
|
6,412
|
(10.0
|
)
|
(1.0
|
)
|
||||||||||||||||||||||
Fixed
income
|
1,164
|
1,445
|
1,122
|
1,048
|
684
|
3.7
|
(19.4
|
)
|
|||||||||||||||||||||||
Total
Mutual Funds
|
16,354
|
16,666
|
17,237
|
17,357
|
16,625
|
(7.1
|
)
|
(1.9
|
)
|
||||||||||||||||||||||
Institutional
& PWM:
|
|||||||||||||||||||||||||||||||
Equities:
direct
|
9,564
|
9,746
|
10,708
|
11,266
|
11,116
|
(10.7
|
)
|
(1.9
|
)
|
||||||||||||||||||||||
“ sub-advisory
|
2,043
|
1,887
|
2,584
|
2,494
|
2,383
|
(7.7
|
)
|
8.3
|
|||||||||||||||||||||||
Fixed
Income
|
17
|
2
|
24
|
27
|
21
|
(29.2
|
)
|
750.0
|
|||||||||||||||||||||||
Total
Institutional & PWM
|
11,624
|
11,635
|
13,316
|
13,787
|
13,520
|
(12.7
|
)
|
(0.1
|
)
|
||||||||||||||||||||||
Investment
Partnerships
|
354
|
396
|
460
|
491
|
486
|
(23.0)
|
(10.6
|
)
|
|||||||||||||||||||||||
Total
Assets Under Management
|
$
|
28,332
|
$
|
28,697
|
$
|
31,013
|
$
|
31,635
|
$
|
30,631
|
(8.6
|
)
|
(1.3
|
)
|
Table
III:
|
||||||||||||||||||
March
31, 2008
|
Net
Cash Flows
|
Market
Appreciation
/ (Depreciation)
|
June
30, 2008
|
|||||||||||||||
Mutual
Funds:
|
||||||||||||||||||
Equities
|
$
|
15,221
|
$
|
(51
|
)
|
20
|
$
|
15,190
|
||||||||||
Fixed
Income
|
1,445
|
(282
|
)
|
1
|
1,164
|
|||||||||||||
Total
Mutual Funds
|
16,666
|
(333
|
)
|
21
|
16,354
|
|||||||||||||
Institutional
& PWM
|
||||||||||||||||||
Equities:
direct
|
9,746
|
(39
|
)
|
(143
|
)
|
9,564
|
||||||||||||
“ " sub-advisory
|
1,887
|
163
|
(7
|
)
|
2,043
|
|||||||||||||
Fixed
Income
|
2
|
16
|
(1
|
)
|
17
|
|||||||||||||
Total
Institutional & PWM
|
11,635
|
140
|
(151
|
)
|
11,624
|
|||||||||||||
Investment
Partnerships
|
396
|
(46
|
)
|
4
|
354
|
|||||||||||||
Total
Assets Under Management
|
$
|
28,697
|
$
|
(239
|
)
|
(126
|
)
|
$
|
28,332
|
2008
|
2007
|
|||||||
Revenues
|
||||||||
Investment
advisory and incentive fees
|
$ | 55,131 | $ | 57,654 | ||||
Commission
revenue
|
3,664 | 4,036 | ||||||
Distribution
fees and other income
|
6,629 | 6,587 | ||||||
Total
revenues
|
65,424 | 68,277 | ||||||
Expenses
|
||||||||
Compensation
and related costs
|
27,763 | 29,905 | ||||||
Management
fee
|
2,586 | 3,449 | ||||||
Distribution
costs
|
6,794 | 10,161 | ||||||
Other
operating expenses
|
7,074 | 7,594 | ||||||
Total
expenses
|
44,217 | 51,109 | ||||||
Operating
income
|
21,207 | 17,168 | ||||||
Other
income
|
||||||||
Net
gain from investments
|
10 | 11,193 | ||||||
Interest
and dividend income
|
4,196 | 6,166 | ||||||
Interest
expense
|
(2,199 | ) | (3,329 | ) | ||||
Total
other income, net
|
2,007 | 14,030 | ||||||
Income
before taxes and minority interest
|
23,214 | 31,198 | ||||||
Income
tax provision
|
8,719 | 12,856 | ||||||
Minority
interest
|
36 | 345 | ||||||
Net
income
|
$ | 14,459 | $ | 17,997 | ||||
Net
income per share:
|
||||||||
Basic
|
$ | 0.52 | $ | 0.64 | ||||
Diluted
|
$ | 0.51 | $ | 0.63 | ||||
Reconciliation
of Net income to Adjusted EBITDA:
|
||||||||
Net
income
|
$ | 14,459 | $ | 17,997 | ||||
Interest
Expense
|
2,199 | 3,329 | ||||||
Income
tax provision and minority interest
|
8,755 | 13,201 | ||||||
Depreciation
and amortization
|
254 | 216 | ||||||
Adjusted
EBITDA (a)
|
$ | 25,667 | $ | 34,743 | ||||
(a) Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, and minority interest. Adjusted EBITDA is a non-GAAP measure and should not be considered as an alternative to any measure of performance as promulgated under accounting principles generally accepted in the United States nor should it be considered as an indicator of our overall financial performance. We use Adjusted EBITDA as a supplemental measure of performance as we believe it gives investors a more complete understanding of our operating results before the impact of financing activities as a tool for determining the private market value of an enterprise. |
2008
|
2007
|
|||||||
Revenues
|
||||||||
Investment
advisory and incentive fees
|
$ | 111,972 | $ | 114,214 | ||||
Commission
revenue
|
6,920 | 8,056 | ||||||
Distribution
fees and other income
|
13,080 | 12,613 | ||||||
Total
revenues
|
131,972 | 134,883 | ||||||
Expenses
|
||||||||
Compensation
and related costs
|
56,610 | 58,279 | ||||||
Management
fee
|
4,567 | 6,850 | ||||||
Distribution
costs
|
13,203 | 16,047 | ||||||
Other
operating expenses
|
13,128 | 16,028 | ||||||
Total
expenses
|
87,508 | 97,204 | ||||||