[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
|
Large
accelerated filer ¨
|
Accelerated
filer x
|
Non-accelerated
filer ¨
|
Class
|
Outstanding
at July 31, 2007
|
|
Class
A Common Stock, .001 par value
|
7,489,369
|
|
Class
B Common Stock, .001 par value
|
20,645,816
|
INDEX
|
|
GAMCO
INVESTORS, INC. AND SUBSIDIARIES
|
|
PART
I.
|
FINANCIAL
INFORMATION
|
Item
1.
|
Financial
Statements (Unaudited)
|
Condensed
Consolidated Statements of Income:
|
|
- Three
months ended June 30, 2006 and 2007
- Six
months ended June 30, 2006 and 2007
|
|
Condensed
Consolidated Statements of Financial Condition:
|
|
- December
31, 2006 (Audited)
|
|
- June
30, 2006
|
|
- June
30, 2007
|
|
Condensed
Consolidated Statements of Stockholders’ Equity and Comprehensive
Income:
|
|
- Three
months ended June 30, 2006 and 2007
- Six
months ended June 30, 2006 and 2007
|
|
Condensed
Consolidated Statements of Cash Flows:
|
|
- Three
months ended June 30, 2006 and 2007
- Six
months ended June 30, 2006 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
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
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
|
June
30,
|
June
30,
|
||||||||||||||
2007
|
2006
(a)
|
2007
|
2006
(a)
|
|||||||||||||
Revenues
|
||||||||||||||||
Investment
advisory and incentive fees
|
$ |
57,654
|
$ |
53,586
|
$ |
114,214
|
$ |
103,984
|
||||||||
Commission
revenue
|
4,036
|
2,829
|
8,056
|
6,380
|
||||||||||||
Distribution
fees and other income
|
6,587
|
5,244
|
12,613
|
10,579
|
||||||||||||
Total
revenues
|
68,277
|
61,659
|
134,883
|
120,943
|
||||||||||||
Expenses
|
||||||||||||||||
Compensation
and related costs
|
29,905
|
25,436
|
58,279
|
50,212
|
||||||||||||
Management
fee
|
3,449
|
1,818
|
6,850
|
5,235
|
||||||||||||
Distribution
costs
|
10,161
|
5,329
|
16,047
|
10,544
|
||||||||||||
Other
operating expenses
|
7,594
|
7,713
|
16,028
|
15,104
|
||||||||||||
Reserve
for settlement
|
-
|
11,900
|
-
|
11,900
|
||||||||||||
Total
expenses
|
51,109
|
52,196
|
97,204
|
92,995
|
||||||||||||
Operating
income
|
17,168
|
9,463
|
37,679
|
27,948
|
||||||||||||
Other
income (expense)
|
||||||||||||||||
Net
gain from investments
|
11,193
|
4,244
|
16,763
|
27,369
|
||||||||||||
Interest
and dividend income
|
6,166
|
6,111
|
14,168
|
12,484
|
||||||||||||
Interest
expense
|
(3,329 | ) | (3,394 | ) | (6,709 | ) | (7,269 | ) | ||||||||
Total
other income, net
|
14,030
|
6,961
|
24,222
|
32,584
|
||||||||||||
Income
before income taxes and minority interest
|
31,198
|
16,424
|
61,901
|
60,532
|
||||||||||||
Income
tax provision
|
12,856
|
7,360
|
24,063
|
23,901
|
||||||||||||
Minority
interest
|
345
|
119
|
677
|
8,727
|
||||||||||||
Net
income
|
$ |
17,997
|
$ |
8,945
|
$ |
37,161
|
$ |
27,904
|
||||||||
Net
income per share:
|
||||||||||||||||
Basic
|
$ |
0.64
|
$ |
0.31
|
$ |
1.32
|
$ |
0.97
|
||||||||
Diluted
|
$ |
0.63
|
$ |
0.31
|
$ |
1.30
|
$ |
0.96
|
||||||||
Weighted
average shares outstanding:
|
||||||||||||||||
Basic
|
28,160
|
28,507
|
28,194
|
28,842
|
||||||||||||
Diluted
|
29,147
|
29,496
|
29,172
|
29,838
|
||||||||||||
Dividends
declared:
|
$ |
0.03
|
$ |
0.03
|
$ |
0.06
|
$ |
0.06
|
December
31,
|
June
30,
|
June
30,
|
||||||||||
2006
(a)
|
2006
(a)
|
2007
|
||||||||||
ASSETS
|
(Unaudited)
|
(Unaudited)
|
||||||||||
Cash
and cash equivalents, including restricted cash of $2,079, $730 and
$443.
|
$ |
138,113
|
$ |
116,852
|
$ |
104,726
|
||||||
Investments
in securities, including restricted securities of $52,116, $52,141
and
$52,117.
|
507,595
|
466,056
|
550,273
|
|||||||||
Investments
in partnerships and affiliates
|
81,884
|
83,752
|
69,869
|
|||||||||
Receivable
from brokers
|
53,682
|
41,326
|
43,187
|
|||||||||
Investment
advisory fees receivable
|
31,093
|
15,874
|
18,439
|
|||||||||
Other
assets
|
24,866
|
16,426
|
19,577
|
|||||||||
Total
assets
|
$ |
837,231
|
$ |
740,286
|
$ |
806,071
|
||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||||||
Payable
to brokers
|
$ |
36,346
|
$ |
9,228
|
$ |
30,973
|
||||||
Income
taxes payable, including deferred taxes of $363, $4,323, and
$10,012.
|
13,922
|
2,556
|
14,951
|
|||||||||
Compensation
payable
|
30,174
|
34,366
|
46,075
|
|||||||||
Capital
lease obligation
|
2,781
|
2,891
|
2,659
|
|||||||||
Securities
sold, not yet purchased
|
8,244
|
7,621
|
21,021
|
|||||||||
Accrued
expenses and other liabilities
|
41,052
|
29,150
|
35,597
|
|||||||||
Total
operating liabilities
|
132,519
|
85,812
|
151,276
|
|||||||||
5.5%
Senior notes (due May 15, 2013)
|
100,000
|
100,000
|
100,000
|
|||||||||
6%
Convertible note, $50 million outstanding (due August 14, 2011)
(b)
|
49,504
|
50,000
|
49,561
|
|||||||||
5.22%
Senior notes (due February 17, 2007)
|
82,308
|
82,308
|
-
|
|||||||||
Total
liabilities
|
364,331
|
318,120
|
300,837
|
|||||||||
Minority
interest
|
21,324
|
19,724
|
14,441
|
|||||||||
Stockholders’
equity
|
||||||||||||
Class
A Common Stock, $0.001 par value; 100,000,000
|
||||||||||||
shares
authorized; 12,055,872, 12,010,812 and 12,172,423
|
||||||||||||
issued,
respectively; 7,487,018, 7,509,058 and 7,489,369 outstanding,
respectively
|
12
|
10
|
12
|
|||||||||
Class
B Common Stock, $0.001 par value; 100,000,000
|
||||||||||||
shares
authorized; 24,000,000 shares issued, 20,754,217, 20,781,027 and
20,645,816 shares outstanding, respectively
|
21
|
23
|
21
|
|||||||||
Additional
paid-in capital
|
229,699
|
228,573
|
230,010
|
|||||||||
Retained
earnings
|
397,893
|
355,565
|
432,542
|
|||||||||
Accumulated
comprehensive gain
|
10,427
|
2,423
|
19,791
|
|||||||||
Treasury
stock, at cost (4,501,754, 4,012,354 and 4,683,054
|
||||||||||||
shares,
respectively)
|
(186,476 | ) | (184,152 | ) | (191,583 | ) | ||||||
Total
stockholders' equity
|
451,576
|
402,442
|
490,793
|
|||||||||
Total
liabilities and stockholders' equity
|
$ |
837,231
|
$ |
740,286
|
$ |
806,071
|
(a) As
restated to reflect the reversal of certain previously-accrued expenses
for investment partnership compensation as described in Note A of
this
report on Form 10-Q.
|
(b) At
June 30, 2007 and December 31, 2006, the $50 million note conversion
price
was $53 per share. At June 30, 2006, the convertible note was 5%
with a
conversion price of $52 per share.
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2007
|
2006
(a)
|
2007
|
2006
(a)
|
|||||||||||||
Stockholders’
equity – beginning of period
|
$ |
467,488
|
$ |
412,828
|
$ |
451,576
|
$ |
424,502
|
||||||||
Cumulative
effect of applying the provisions of FIN 48
at
January 1, 2007
|
-
|
-
|
(822 | ) |
-
|
|||||||||||
Comprehensive
income:
|
||||||||||||||||
Net
income
|
17,997
|
8,945
|
37,161
|
27,904
|
||||||||||||
Foreign
currency translation adjustments
|
12
|
(129 | ) |
13
|
(54 | ) | ||||||||||
Net
unrealized gain on securities available for sale
|
8,666
|
(589 | ) |
9,352
|
1,867
|
|||||||||||
Total
comprehensive income
|
26,675
|
8,227
|
46,526
|
29,717
|
||||||||||||
Dividends
declared
|
(844 | ) | (851 | ) | (1,691 | ) | (1,718 | ) | ||||||||
Excess
tax benefit for exercised stock options
|
-
|
-
|
-
|
1,782
|
||||||||||||
Stock
based compensation expense
|
24
|
14
|
45
|
20
|
||||||||||||
Exercise
of stock options including tax benefit
|
194
|
137
|
266
|
418
|
||||||||||||
Purchase
of treasury stock
|
(2,744 | ) | (17,913 | ) | (5,107 | ) | (52,279 | ) | ||||||||
Stockholders’
equity – end of period
|
$ |
490,793
|
$ |
402,442
|
$ |
490,793
|
$ |
402,442
|
||||||||
(a)
As restated to reflect the reversal of certain previously-accrued
expenses
for investment partnership compensation as described in Note A of
this
report on Form 10-Q.
|
See
accompanying notes.
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2007
|
2006
(a)
|
2007
|
2006
(a)
|
|||||||||||||
Operating
activities
|
||||||||||||||||
Net
income
|
$ |
17,997
|
$ |
8,945
|
$ |
37,161
|
$ |
27,904
|
||||||||
Adjustments
to reconcile net income to net cash
|
||||||||||||||||
provided
by (used in) operating activities:
|
||||||||||||||||
Cumulative
effect of applying the provisions of FIN 48
|
-
|
-
|
(822 | ) |
-
|
|||||||||||
Equity
in gains from partnerships and affiliates
|
(2,498 | ) | (474 | ) | (4,744 | ) | (3,338 | ) | ||||||||
Depreciation
and amortization
|
216
|
220
|
522
|
444
|
||||||||||||
Stock
based compensation expense
|
24
|
14
|
45
|
20
|
||||||||||||
Tax
benefit from exercise of stock options
|
32
|
21
|
57
|
87
|
||||||||||||
Foreign
currency loss
|
12
|
30
|
13
|
30
|
||||||||||||
Other-than-temporary
loss on available for sale securities
|
-
|
56
|
-
|
56
|
||||||||||||
Market
value of donated securities
|
-
|
-
|
122
|
-
|
||||||||||||
Impairment
of goodwill
|
-
|
-
|
56
|
-
|
||||||||||||
Amortization
of debt discount
|
23
|
-
|
56
|
-
|
||||||||||||
Minority
interest in net income of consolidated subsidiaries
|
244
|
81
|
520
|
343
|
||||||||||||
Realized
gains on sales of available for sale securities, net
|
(316 | ) |
-
|
(473 | ) | (442 | ) | |||||||||
Realized
gains on sales of trading investments in securities, net
|
(4,406 | ) | (3,389 | ) | (10,875 | ) | (9,974 | ) | ||||||||
Change
in unrealized value of investments in securities, net
|
(5,022 | ) | (2,318 | ) | (2,498 | ) | (3,336 | ) | ||||||||
Excess
tax benefit adjustment
|
-
|
1,782
|
-
|
1,782
|
||||||||||||
(Increase)
decrease in operating assets:
|
||||||||||||||||
Purchases
of trading investments in securities
|
(417,321 | ) | (250,014 | ) | (852,789 | ) | (537,616 | ) | ||||||||
Proceeds
from sales of trading investments in securities
|
425,979
|
205,993
|
875,850
|
527,522
|
||||||||||||
Investments
in partnerships and affiliates
|
(978 | ) | (2,823 | ) | (4,050 | ) | (4,048 | ) | ||||||||
Distributions
from partnerships and affiliates
|
1,664
|
7,065
|
13,149
|
7,913
|
||||||||||||
Investment
advisory fees receivable
|
1,917
|
696
|
12,681
|
6,126
|
||||||||||||
Other
receivables from affiliates
|
302
|
3,423
|
5,106
|
10,092
|
||||||||||||
Receivable
from brokers
|
(20,171 | ) |
35,314
|
10,022
|
(27,559 | ) | ||||||||||
Other
assets
|
201
|
764
|
(153 | ) | (120 | ) | ||||||||||
Increase
(decrease) in operating liabilities:
|
||||||||||||||||
Payable
to brokers
|
(6,917 | ) |
3,975
|
(3,957 | ) |
3,444
|
||||||||||
Income
taxes payable
|
2,160
|
(12,062 | ) | (3,835 | ) | (9,009 | ) | |||||||||
Compensation
payable
|
6,066
|
1,364
|
14,289
|
6,953
|
||||||||||||
Accrued
expenses and other liabilities
|
3,603
|
10,362
|
(5,050 | ) |
10,578
|
|||||||||||
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 short,
net
|
(330 | ) | (163 | ) | (607 | ) | (12,080 | ) | ||||||||
Change
in unrealized value of investments in securities and securities sold
short, net
|
(115 | ) | (2,839 | ) | 85 | (4,269 | ) | |||||||||
Purchases
of trading investments in securities and securities sold
short
|
(19,885 | ) | (8,882 | ) | (34,436 | ) | (650,941 | ) | ||||||||
Proceeds
from sales of trading investments in securities and securities sold
short
|
22,467
|
9,517
|
34,551
|
629,221
|
||||||||||||
Investments
in partnerships and affiliates
|
-
|
(336 | ) |
(2,000)
|
(1,318 | ) | ||||||||||
Distributions
from partnerships and affiliates
|
325
|
-
|
825
|
380
|
||||||||||||
Equity
in earnings of partnerships and affiliates
|
25
|
(103 | ) |
(733)
|
(528 | ) | ||||||||||
Decrease
in advisory fees receivable
|
19
|
98
|
(26 | ) |
98
|
|||||||||||
(Increase)
decrease in receivable from brokers
|
(222 | ) |
1,042
|
473
|
(11,427 | ) | ||||||||||
Decrease
(increase) in other assets
|
(186 | ) | (21 | ) | (244 | ) |
333
|
|||||||||
Increase
in payable to brokers
|
(2,551 | ) |
1,847
|
(1,416 | ) |
7,630
|
||||||||||
(Decrease)
increase in accrued expenses and other liabilities
|
266
|
(1,892 | ) |
315
|
(11,678 | ) | ||||||||||
Income
related to investment partnerships and offshore funds consolidated
under
FIN 46R and EITF 04-5, net
|
506
|
207
|
996
|
14,637
|
||||||||||||
Total
adjustments
|
(14,867 | ) | (1,445 | ) |
41,025
|
(59,994 | ) | |||||||||
Net
cash provided by (used in) operating activities
|
3,130
|
7,500
|
78,186
|
(32,090 | ) |
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2007
|
2006
(a)
|
2007
|
2006
(a)
|
|||||||||||||
Investing
activities
|
||||||||||||||||
Purchases
of available for sale securities
|
(223 | ) | (247 | ) | (25,254 | ) | (3,253 | ) | ||||||||
Proceeds
from sales of available for sale securities
|
1,353
|
-
|
2,292
|
1,486
|
||||||||||||
Net
cash provided by (used in) investing activities
|
1,130
|
(247 | ) | (22,962 | ) | (1,767 | ) | |||||||||
Financing
activities
|
||||||||||||||||
Contributions
related to investment partnerships and offshore funds
consolidated
under FIN 46R and EITF 04-5, net
|
(5 | ) |
1,537
|
511
|
29,727
|
|||||||||||
Retirement
of 5.22% senior notes
|
-
|
-
|
(82,308 | ) |
-
|
|||||||||||
Proceeds
from exercise of stock options
|
162
|
116
|
209
|
332
|
||||||||||||
Dividends
paid
|
(844 | ) | (851 | ) | (1,691 | ) | (1,718 | ) | ||||||||
Subsidiary
stock repurchased from minority shareholders
|
-
|
-
|
(241 | ) |
-
|
|||||||||||
Purchase
of treasury stock
|
(2,744 | ) | (17,913 | ) | (5,107 | ) | (52,279 | ) | ||||||||
Net
cash used in financing activities
|
(3,431 | ) | (17,111 | ) | (88,627 | ) | (23,938 | ) | ||||||||
Net
increase (decrease) in cash and cash equivalents
|
829
|
(9,858 | ) | (33,403 | ) | (57,795 | ) | |||||||||
Effect
of exchange rates on cash and cash equivalents
|
15
|
(132 | ) |
16
|
(64 | ) | ||||||||||
Net
increase in cash from partnerships and offshore funds consolidated
under
FIN 46R and EITF 04-5
|
-
|
-
|
-
|
1,550
|
||||||||||||
Cash
and cash equivalents at beginning of period
|
103,882
|
126,842
|
138,113
|
173,161
|
||||||||||||
Cash
and cash equivalents at end of period
|
$ |
104,726
|
$ |
116,852
|
$ |
104,726
|
$ |
116,852
|
(a) As
restated to reflect the reversal of certain previously-accrued expenses
for investment partnership compensation as described in Note A of
this
report on Form 10-Q.
|
2006
|
||||||||||||||||||||
(in
thousands, except per share data)
|
1st
|
2nd
|
3rd
|
4th
|
Full
Year
|
|||||||||||||||
Revenues
|
$ |
59,284
|
$ |
61,659
|
$ |
57,994
|
$ |
82,526
|
$ |
261,463
|
||||||||||
Operating
income
|
18,485
|
9,463
|
18,498
|
29,901
|
76,347
|
|||||||||||||||
Net
income
|
18,960
|
8,944
|
17,043
|
26,980
|
71,927
|
|||||||||||||||
Net
income per share:
|
||||||||||||||||||||
Basic
|
0.65
|
0.31
|
0.60
|
0.96
|
2.52
|
|||||||||||||||
Diluted
|
0.64
|
0.31
|
0.60
|
0.94
|
2.49
|
2006
|
||||||||||||||||||||
(in
thousands, except per share data)
|
1st
|
2nd
|
3rd
|
4th
|
Full
Year
|
|||||||||||||||
Revenues
|
$ |
59,284
|
$ |
61,659
|
$ |
57,994
|
$ |
82,526
|
$ |
261,463
|
||||||||||
Operating
income
|
18,034
|
8,936
|
18,220
|
26,971
|
72,161
|
|||||||||||||||
Net
income
|
18,700
|
8,641
|
16,884
|
25,293
|
69,518
|
|||||||||||||||
Net
income per share:
|
||||||||||||||||||||
Basic
|
0.64
|
0.30
|
0.60
|
0.90
|
2.44
|
|||||||||||||||
Diluted
|
0.63
|
0.30
|
0.59
|
0.88
|
2.40
|
(in
thousands, except per share amounts)
|
Three
Months Ended
June
30, 2007
|
Three
Months Ended
June
30, 2006 (a)
|
Six
Months Ended
June
30, 2007
|
Six
Months Ended
June
30, 2006 (a)
|
||||||||||||
Basic:
|
||||||||||||||||
Net
income
|
$ |
17,997
|
$ |
8,945
|
$ |
37,161
|
$ |
27,904
|
||||||||
Average
shares outstanding
|
28,160
|
28,507
|
28,194
|
28,842
|
||||||||||||
Basic
net income per share
|
$ |
0.64
|
$ |
0.31
|
$ |
1.32
|
$ |
0.97
|
||||||||
Diluted:
|
||||||||||||||||
Net
income
|
$ |
17,997
|
$ |
8,945
|
$ |
37,161
|
$ |
27,904
|
||||||||
Add
interest expense on convertible note, net of management fee and
taxes
|
429
|
351
|
857
|
703
|
||||||||||||
Total
|
$ |
18,426
|
$ |
9,296
|
$ |
38,018
|
$ |
28,607
|
||||||||
Average
shares outstanding
|
28,160
|
28,507
|
28,194
|
28,842
|
||||||||||||
Dilutive
stock options
|
44
|
27
|
35
|
34
|
||||||||||||
Assumed
conversion of convertible note
|
943
|
962
|
943
|
962
|
||||||||||||
Total
|
29,147
|
29,496
|
29,172
|
29,838
|
||||||||||||
Diluted
net income per share
|
$ |
0.63
|
$ | 0.31 | (b) | $ |
1.30
|
$ |
0.96
|
(a)
|
As
restated to reflect the reversal of certain previously-accrued
expenses
for investment partnership compensation as described in Note A
of this
report on Form 10-Q.
|
(b)
|
Diluted
net income per share is anti-dilutive and has therefore been reported
at
basic net income per share.
|
Remainder
of
2007
|
2008
|
2009
|
2010
|
|||||||||||
$ |
47,000
|
$ |
89,000
|
$ |
47,000
|
$ |
10,000
|
ITEM
2:
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(INCLUDING QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK)
|
Mutual
Funds:
|
June
30, 2006
|
June
30, 2007
|
%
Inc. (Dec.)
|
|||||||||
Open-end
|
$ |
7,796
|
$ |
9,529
|
22.2 | % | ||||||
Closed-end
|
5,258
|
6,412
|
21.9
|
|||||||||
Fixed
Income
|
863
|
684
|
(20.7 | ) | ||||||||
Total
Mutual Funds
|
13,917
|
16,625
|
19.5
|
|||||||||
Institutional
& Separate Accounts:
|
||||||||||||
Equities:
direct
|
9,520
|
11,116
|
16.8
|
|||||||||
“ sub-advisory
|
2,750
|
2,383
|
(13.3 | ) | ||||||||
Fixed
Income
|
55
|
21
|
(61.8 | ) | ||||||||
Total
Institutional & Separate Accounts
|
12,325
|
13,520
|
9.7
|
|||||||||
Investment
Partnerships
|
536
|
486
|
(9.3 | ) | ||||||||
Total
Assets Under Management
|
$ |
26,778
|
$ |
30,631
|
14.4
|
|||||||
Equities
|
$ |
25,860
|
$ |
29,926
|
15.7
|
|||||||
Fixed
Income
|
918
|
705
|
(23.2 | ) | ||||||||
Total
Assets Under Management
|
$ |
26,778
|
$ |
30,631
|
14.4
|
Assets
Under Management (millions)
|
||||||||||||||||||||||||||||
%
Increase/(decrease)
|
||||||||||||||||||||||||||||
Mutual
Funds
|
6/06
|
9/06
|
12/06
|
3/07
|
6/07
|
3/07
|
6/06
|
|||||||||||||||||||||
Open-end
|
$ |
7,796
|
$ |
7,854
|
$ |
8,389
|
$ |
8,858
|
$ |
9,529
|
7.6 | % | 22.2 | % | ||||||||||||||
Closed-end
|
5,258
|
5,327
|
5,806
|
6,188
|
6,412
|
3.6
|
21.9
|
|||||||||||||||||||||
Fixed
income
|
863
|
683
|
744
|
591
|
684
|
15.7
|
(20.7 | ) | ||||||||||||||||||||
Total
Mutual Funds
|
13,917
|
13,864
|
14,939
|
15,637
|
16,625
|
6.3
|
19.5
|
|||||||||||||||||||||
Institutional
& Separate Accounts:
|
||||||||||||||||||||||||||||
Equities:
direct
|
9,520
|
9,470
|
10,282
|
10,587
|
11,116
|
5.0
|
16.8
|
|||||||||||||||||||||
“ sub-advisory
|
2,750
|
2,725
|
2,340
|
2,608
|
2,383
|
(8.6 | ) | (13.3 | ) | |||||||||||||||||||
Fixed
Income
|
55
|
54
|
50
|
49
|
21
|
(57.1 | ) | (61.8 | ) | |||||||||||||||||||
Total
Institutional & Separate Accounts
|
12,325
|
12,249
|
12,672
|
13,244
|
13,520
|
2.1
|
9.7
|
|||||||||||||||||||||
Investment
Partnerships
|
536
|
488
|
491
|
477
|
486
|
1.9
|
(9.3 | ) | ||||||||||||||||||||
Total
Assets Under Management
|
$ |
26,778
|
$ |
26,601
|
$ |
28,102
|
$ |
29,358
|
$ |
30,631
|
4.3
|
14.4
|
Table
III:
|
Fund
Flows – 2nd
Quarter 2007
(millions)
|
|||
|
|
|||
March
31,
2007
|
Net
Cash
Flows
|
Market Appreciation
/ (Depreciation) |
June
30,
2007
|
Mutual
Funds:
|
||||||||||||||||
Equities
|
$ |
15,046
|
$ |
149
|
$ |
746
|
$ |
15,941
|
||||||||
Fixed
Income
|
591
|
80
|
13
|
684
|
||||||||||||
Total
Mutual Funds
|
15,637
|
229
|
759
|
16,625
|
||||||||||||
Institutional
& Separate Accounts
|
||||||||||||||||
Equities:
direct
|
10,587
|
(161 | ) |
690
|
11,116
|
|||||||||||
“ sub-advisory
|
2,608
|
(415 | ) |
190
|
2,383
|
|||||||||||
Fixed
Income
|
49
|
(29 | ) |
1
|
21
|
|||||||||||
Total
Institutional & Separate Accounts
|
13,244
|
(605 | ) |
881
|
13,520
|
|||||||||||
Investment
Partnerships
|
477
|
(3 | ) |
12
|
486
|
|||||||||||
Total
Assets Under Management
|
$ |
29,358
|
$ | (379 | ) | $ |
1,652
|
$ |
30,631
|
2007
|
2006
(a)
|
|||||||
Revenues
|
||||||||
Investment
advisory and incentive fees
|
$ |
57,654
|
$ |
53,586
|
||||
Commission
revenue
|
4,036
|
2,829
|
||||||
Distribution
fees and other income
|
6,587
|
5,244
|
||||||
Total
revenues
|
68,277
|
61,659
|
||||||
Expenses
|
||||||||
Compensation
and related costs
|
29,905
|
25,436
|
||||||
Management
fee
|
3,449
|
1,818
|
||||||
Distribution
costs
|
10,161
|
5,329
|
||||||
Other
operating expenses
|
7,594
|
7,713
|
||||||
Reserve
for settlement
|
-
|
11,900
|
||||||
Total
expenses
|
51,109
|
52,196
|
||||||
Operating
income
|
17,168
|
9,463
|
||||||
Other
income (expense)
|
||||||||
Net
gain from investments
|
11,193
|
4,244
|
||||||
Interest
and dividend income
|
6,166
|
6,111
|
||||||
Interest
expense
|
(3,329 | ) | (3,394 | ) | ||||
Total
other income (expense), net
|
14,030
|
6,961
|
||||||
Income
before taxes and minority interest
|
31,198
|
16,424
|
||||||
Income
tax provision
|
12,856
|
7,360
|
||||||
Minority
interest
|
345
|
119
|
||||||
Net
income
|
$ |
17,997
|
$ |
8,945
|
||||
Net
income per share:
|
||||||||
Basic
|
$ |
0.64
|
$ |
0.31
|
||||
Diluted
|
$ |
0.63
|
$ |
0.31
|
||||
Reconciliation
of Net income to Adjusted EBITDA:
|
||||||||
Net
income
|
$ |
17,997
|
$ |
8,945
|
||||
Interest
Expense
|
3,329
|
3,394
|
||||||
Income
tax provision and minority interest
|
13,201
|
7,479
|
||||||
Depreciation
and amortization
|
216
|
220
|
||||||
Adjusted
EBITDA(b)
|
$ |
34,743
|
$ |
20,038
|
|
(a)
As restated to reflect the reversal of certain previously-accrued
expenses
for investment partnership compensation as described in note A in
item 1
of this report on Form 10-Q.
|
|
(b)
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 investing
and
financing activities as a tool for determining the private market
value of
an enterprise.
|
2006
(a)
|
2006
(b)
|
Adjust-
ments(c)
|
2006
(d)
|
2007
(e)
|
||||||||||||||||
Revenues
|
||||||||||||||||||||
Investment
advisory and incentive fees
|
$ |
106,413
|
$ |
104,947
|
$ | (963 | ) | $ |
103,984
|
$ |
114,214
|
|||||||||
Commission
revenue
|
6,380
|
6,380
|
-
|
6,380
|
8,056
|
|||||||||||||||
Distribution
fees and other income
|
10,579
|
10,579
|
-
|
10,579
|
12,613
|
|||||||||||||||
Total
revenues
|
123,372
|
121,906
|
(963 | ) |
120,943
|
134,883
|
||||||||||||||
Expenses
|
||||||||||||||||||||
Compensation
and related costs
|
54,233
|
50,212
|
-
|
50,212
|
58,279
|
|||||||||||||||
Management
fee
|
5,282
|
5,235
|
-
|
5,235
|
6,850
|
|||||||||||||||
Distribution
costs
|
10,544
|
10,544
|
-
|
10,544
|
16,047
|
|||||||||||||||