GAMCO Investors, Inc. Reports Record Full Year Earnings

  • Fourth quarter net income was $23.3 million vs. $13.5 million a year ago
  • Fully diluted earnings were $0.81 per share versus $0.46 per share
  • Average AUM for quarter was $37.4 billion vs. $43.0 billion in 2017 quarter

RYE, N.Y.--()--GAMCO Investors, Inc. (“GAMCO”) (NYSE: GBL) today reported fourth quarter 2018 revenues of $81.0 million, net income of $23.3 million, and earnings of $0.81 per diluted share. This compares to fourth quarter 2017 revenues of $98.7 million, net income of $13.5 million, and earnings of $0.46 per diluted share.

Average AUM was $37.4 billion for the fourth quarter of 2018 versus $43.0 billion for the fourth quarter of 2017 and $41.0 billion for the third quarter of 2018.

On December 26, 2018, we announced that our Chairman and CEO, Mr. Mario J. Gabelli, elected to waive all of his compensation that he would otherwise be entitled to for the period from January 1, 2019 to March 31, 2019. This additional waiver both provides the Company with incremental financial flexibility and enhances our ability to execute lift-outs, make acquisitions, and seed new products as well as underscores the intrinsic value of (y)our Company.

Revenues

  • Total revenues for the fourth quarter of 2018 were $81.0 million compared with $98.7 million in the prior year.
  • Investment advisory fees, excluding incentive fees, were $70.7 million in the fourth quarter versus $78.7 million in the fourth quarter of 2017. Open-end and closed-end fund revenues declined to $45.6 million from $51.1 million in the fourth quarter of 2017. Institutional and Private Wealth Management revenues were $23.7 million compared to $26.2 million in 2017. SICAV revenues were $1.4 million in each period.
  • Incentive fees earned were $1.3 million in the fourth quarter of 2018 as compared with $9.1 million in the prior year quarter.
  • Distribution fees from our open-end equity funds and other income were $8.9 million for the fourth quarter of 2018 versus $10.9 million in the prior-year quarter.
 
Financial Highlights
  Fourth Quarter     YTD  
($'s in 000's except AUM and per share data) 2018     2017 2018     2017
 
AUM - average (in millions) $ 37,405 $ 42,965 $ 40,349 $ 42,016
AUM - end of period (in millions) 34,354 43,063 34,354 43,063
                                   
 
Revenues $ 79,689 $ 89,613 $ 338,310 $ 351,382
Incentive fees   1,288   9,053   3,145   9,142
Total revenues $ 80,977 $ 98,666 $ 341,455 $ 360,524
 
Operating income 52,458 39,524 186,787 145,020
 
Income before income taxes 30,636 34,886 154,659 132,888
Effective tax rate 23.8 % 61.3 % 24.2 % 41.4 %
 
Net income 23,337 13,495 117,196 77,809
 
Net income per fully diluted share     $ 0.81   (a)   $ 0.46       $ 4.07   (a)   $ 2.60    
 
Weighted average diluted shares outstanding 28,636 30,336 28,777 30,947
 
Shares outstanding at December 31, 28,982 28,974 28,982 28,974
(a) CEO waiver of compensation bolstered EPS by $0.40 for the quarter and $1.63 for the year.
 

Operating Income

Operating income was $52.5 million in the fourth quarter of 2018 versus $39.5 million in the prior-year period. The previously announced waiver of CEO compensation beginning March 1, 2018 boosted fourth quarter operating income by $15.0 million. Lower amortization of deferred compensation related primarily to the change in GBL share price, a non-cash charge, impacted operating costs by $7.0 million. Excluding GAAP treatment of the deferral, but reflecting the lower compensation expense due to the waiver, adjusted operating income was $43.7 million in the fourth quarter of 2018 versus $37.7 million in the year-ago quarter. See pages 10 and 11 for a reconciliation of GAAP operating income to this adjusted operating income.

Other income/(expense), net

Mark to market investment losses were $21.8 million in the fourth quarter of 2018 versus $4.6 million loss in the prior year quarter. Interest expense for the three months was $0.6 million versus $1.9 million in the year ago quarter. The fourth quarter of 2018 was reduced by $4.8 million for the most recent Shareholder Designated Charitable Contribution program announced in November for registered shareholders of record on December 31, 2018. The full year 2018 was reduced by $5.7 million reflecting the $4.8 million from the November Shareholder Designated Charitable Contribution program as well as $0.9 million relating to the prior program announced earlier this year.

Income Taxes

The Company’s effective tax rate (“ETR”) for the quarter ended December 31, 2018 was 23.8% versus 61.3% for the quarter ended December 31, 2017. The prior year quarter’s ETR reflects an $8.2 million, or $0.27 per fully diluted share, write down of net deferred tax assets. Absent this write down the effective rate for the 2017 fourth quarter would have been 37.8%.

Commitment to Community - Over $50 million given back

Our firm has long held the belief that generating returns for our stakeholders, while important, is not the only factor in measuring our corporate success. To underscore our principle, we have been involved in the field of responsible investing since 1987. In our program of corporate giving, GAMCO shareholders select which organizations will be recipients of charitable grants. This year, for the program announced in May for shareholders of record on June 30th, the majority of our shareholders registered their shares and were eligible to designate a 501(c)(3) organization. With that $4.9 million distribution in the third quarter 2018 and an estimated first quarter 2019 distribution of $4.8 million, we have donated approximately $27 million to over 150 charities across the United States since the inception of this program in 2013 which brings the total charitable contributions since our IPO to $52 million.

Business Highlights

  • Ian Lapey joined in October 2018 as the Portfolio Manager for the October launch of the Gabelli Global Financial Services Fund. Prior to joining Moerus, Ian was a Partner, Research Analyst, and Portfolio Manager at Third Avenue Management. In 2009 he was appointed Co-Manager of the firm’s flagship Third Avenue Value Fund, and was subsequently named sole Portfolio Manager of that fund in 2012.
  • On October 30, 2018, we announced that Theresa Pope joined GAMCO’s institutional team as Vice President, Consultant Relations. This role underscores GAMCO’s commitment to serving this important distribution channel and delivering superior risk adjusted returns and best in class service to our institutional clients.
  • In October, the Gabelli Convertible and Income Securities Fund completed a common share rights offering raising $23 million.
  • On November 19, 2018, we announced that Peter Tcherepnine, CEO of Loeb Partners Corporation, joined GAMCO as a Senior Vice President along with the private wealth clients that are assigning their assets to GAMCO subject to completion of documentation.
  • In November, the Company announced that both the Gabelli Media Mogul NextShares™ and the Gabelli Pet Parents’™ NextShares™ would be starting as no-load open-end mutual funds registered under the Investment Company Act of 1940 with timing subject to the Federal government shutdown.
  • In December, the Gabelli Global Utility & Income Trust completed a common share rights offering raising $85 million.

Balance Sheet

We ended the quarter with cash and investments of $75.0 million and debt of $24.2 million. In addition, there is $36.0 million, net of tax, still payable in deferred compensation.

Returns to Shareholder

We paid $0.6 million in dividends during the quarter ended December 31, 2018 and purchased 77,139 shares at an average price of $19.60 per share. Since our IPO in February 1999, we have returned $2.0 billion to shareholders consisting of $1.0 billion of spin-offs, $493.3 million in the form of dividends, and $463.7 million through stock buybacks of approximately 10.8 million shares.

On February 5, 2019, GAMCO’s Board of Directors declared a regular quarterly dividend of $0.02 per share payable on April 30, 2019 to its Class A and Class B shareholders of record on April 16, 2019.

About GAMCO Investors, Inc.

GAMCO Investors, Inc., through its subsidiaries, manages open-end funds and closed-end funds (Gabelli Funds, LLC) and private advisory accounts (GAMCO Asset Management Inc.).

 
The Company reported Assets Under Management as follows (in millions):
       
December 31, December 31,
2018 2017
Equities:
Open-end Funds $ 10,589 $ 13,747
Closed-end Funds 6,959 8,053
Institutional & PWM (a) 14,078 18,852
SICAV   507   510
Total Equities   32,133   41,162
Fixed Income:
100% U.S. Treasury Fund 2,195 1,870
Institutional & PWM   26   31
Total Fixed Income   2,221   1,901
Total Assets Under Management $ 34,354 $ 43,063
(a) Includes $247 million and $261 million of 100% U.S. Treasury Fund AUM at December 31, 2018 and December 31, 2017, respectively.
                 
Table I: Fund Flows - 4th Quarter 2018
  Fund
Market distributions,
September 30, appreciation/ Net cash net of December 31,
2018 (depreciation) flows reinvestments 2018
Equities:
Open-end Funds $ 12,799 $ (1,502 ) $ (674 ) $ (34 ) $ 10,589
Closed-end Funds 7,895 (862 ) 68 (142 ) 6,959
Institutional & PWM 17,374 (2,659 ) (637 ) - 14,078
SICAV   548   (17 )   (24 )   -     507
Total Equities   38,616   (5,040 )   (1,267 )   (176 )   32,133
Fixed Income:
100% U.S. Treasury Fund 2,004 11 180 - 2,195
Institutional & PWM   26   -     -     -     26
Total Fixed Income   2,030   11     180     -     2,221
Total Assets Under Management $ 40,646 $ (5,029 ) $ (1,087 ) $ (176 ) $ 34,354
 
Table II: Fund Flows - Full Year 2018
                Fund    
Market distributions,
December 31, appreciation/ Net cash net of December 31,
2017 (depreciation) flows reinvestments 2018
Equities:
Open-end Funds $ 13,747 $ (998 ) $ (2,088 ) $ (72 ) $ 10,589
Closed-end Funds 8,053 (593 ) 21 (522 ) 6,959
Institutional & PWM 18,852 (2,310 ) (2,464 ) - 14,078
SICAV   510   (31 )   28     -     507
Total Equities   41,162   (3,932 )   (4,503 )   (594 )   32,133
Fixed Income:
100% U.S. Treasury Fund 1,870 35 290 - 2,195
Institutional & PWM   31   -     (5 )   -     26
Total Fixed Income   1,901   35     285     -     2,221
Total Assets Under Management $ 43,063 $ (3,897 ) $ (4,218 ) $ (594 ) $ 34,354
 
Table III      
 
GAMCO INVESTORS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
 
For the Quarter Ended
December 31,
2018 2017
 
Investment advisory and incentive fees $ 72,035 $ 87,763
Distribution fees and other income   8,942     10,903  
Total revenues 80,977 98,666
 
Compensation costs 11,304 (a) 36,536
Distribution costs 9,319 11,074
Other operating expenses   6,447     7,321  
Total expenses 27,070 54,931
 
Operating income before management fee 53,907 43,735
 
Investment income / (loss) (16,391 ) 833
Loss on extinguishment of debt - (3,300 )
Interest expense (644 ) (1,891 )
Shareholder-designated contribution   (4,787 )   (280 )
Other expense, net   (21,822 )   (4,638 )
 
Income before management fee and income taxes 32,085 39,097
Management fee expense   1,449   (a)   4,211  
Income before income taxes 30,636 34,886
Income tax expense   7,299     21,391  
Net income attributable to GAMCO Investors, Inc. $ 23,337   $ 13,495  
 
Net income per share attributable to GAMCO Investors, Inc.:
Basic $ 0.82   $ 0.46  
 
Diluted $ 0.81   $ 0.46  
 
Weighted average shares outstanding:
Basic   28,611     29,103  
 
Diluted   28,636     30,336  
 
Actual shares outstanding (b)   28,982     28,974  
Notes:
(a) CEO waiver reduced compensation costs by $13,063 and management fee expense by $1,902.
(b) Includes 427,650 and 19,400 of RSAs, respectively.
 
See GAAP to non-GAAP reconciliation on page 8.
 
Table IV      
 
GAMCO INVESTORS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
 
For the Year Ended
December 31,
2018 2017
 
Investment advisory and incentive fees $ 302,651 $ 316,705
Distribution fees and other income   38,804     43,819  
Total revenues 341,455 360,524
 
Compensation costs 83,768 (a) 134,170
Distribution costs 39,194 44,447
Other operating expenses   22,692     23,221  
Total expenses 145,654 201,838
 
Operating income before management fee 195,801 158,686
 
Investment income / (loss) (22,932 ) 5,465
Loss on extinguishment of debt - (3,300 )
Interest expense (3,525 ) (10,160 )
Shareholder-designated contribution   (5,671 )   (4,137 )
Other expense, net   (32,128 )   (12,132 )
 
Income before management fee and income taxes 163,673 146,554
Management fee expense   9,014   (a)   13,666  
Income before income taxes 154,659 132,888
Income tax expense   37,463     55,079  
Net income attributable to GAMCO Investors, Inc. $ 117,196   $ 77,809  
 
Net income per share attributable to GAMCO Investors, Inc.:
Basic $ 4.08   $ 2.68  
 
Diluted $ 4.07   $ 2.60  
 
Weighted average shares outstanding:
Basic   28,744     28,980  
 
Diluted   28,777     30,947  
 
Actual shares outstanding (b)   28,982     28,974  
Notes:
(a) CEO waiver reduced compensation costs by $46,607 and management fee expense by $9,889.
(b) Includes 427,650 and 19,400 of RSAs, respectively.
 
See GAAP to non-GAAP reconciliation on page 8.
 
Table V                                        
GAMCO INVESTORS, INC.
UNAUDITED QUARTERLY CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
 
2018   2017  
1st 2nd 3rd 4th 1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Full Year Quarter Quarter Quarter Quarter Full Year
Income Statement Data:
 
Revenues $ 87,497 $ 87,193 $ 85,788 $ 80,977 $ 341,455 $ 85,917 $ 87,600 $ 88,341 $ 98,666 $ 360,524
 
Expenses   41,607     44,338     32,639     27,070     145,654     41,310     45,584     60,013     54,931     201,838  
 
Operating income before
management fee 45,890 42,855 53,149 53,907 195,801 44,607 42,016 28,328 43,735 158,686
 
Investment income / (loss) (4,855 ) 2,111 (3,797 ) (16,391 ) (22,932 ) 509 537 3,586 (2,467 ) 2,165
Interest expense (1,200 ) (922 ) (759 ) (644 ) (3,525 ) (2,832 ) (2,749 ) (2,688 ) (1,891 ) (10,160 )
Shareholder-designated contribution   -     (176 )   (708 )   (4,787 )   (5,671 )   -     -     (3,857 )   (280 )   (4,137 )
Other income/(expense), net (6,055 ) 1,013 (5,264 ) (21,822 ) (32,128 ) (2,323 ) (2,212 ) (2,959 ) (4,638 ) (12,132 )
 
Income before management
fee and income taxes 39,835 43,868 47,885 32,085 163,673 42,284 39,804 25,369 39,097 146,554
Management fee expense   4,634     1,482     1,449     1,449     9,014     2,164     2,356     4,935     4,211     13,666  
Income before income taxes 35,201 42,386 46,436 30,636 154,659 40,120 37,448 20,434 34,886 132,888
Income tax expense   7,940     10,804     11,420     7,299     37,463     15,300     14,554     3,834     21,391     55,079  
Net income attributable to
GAMCO Investors, Inc. $ 27,261   $ 31,582   $ 35,016   $ 23,337   $ 117,196   $ 24,820   $ 22,894   $ 16,600   $ 13,495   $ 77,809  
 
Net income per share
attributable to GAMCO
Investors, Inc.:
Basic $ 0.94   $ 1.10   $ 1.22   $ 0.82   $ 4.08   $ 0.86   $ 0.79   $ 0.57   $ 0.46   $ 2.68  
 
Diluted $ 0.94   $ 1.10   $ 1.22   $ 0.81   $ 4.07   $ 0.82   $ 0.76   $ 0.55   $ 0.46   $ 2.60  
 
Weighted average shares outstanding:
Basic   28,916     28,777     28,677     28,611     28,744     28,970     28,896     28,926     29,103     28,980  
 
Diluted   28,916     28,819     28,739     28,636     28,777     31,160     31,100     31,173     30,336     30,947  
 
Reconciliation of non-GAAP
financial measures to GAAP:
Operating income before
management fee 45,890 42,855 53,149 53,907 195,801 44,607 42,016 28,328 43,735 158,686
Deduct: management fee expense   4,634     1,482     1,449     1,449     9,014     2,164     2,356     4,935     4,211     13,666  
Operating income $ 41,256   $ 41,373   $ 51,700   $ 52,458   $ 186,787   $ 42,443   $ 39,660   $ 23,393   $ 39,524   $ 145,020  
 
Operating margin before
management fee   52.4 %   49.1 %   62.0 %   66.6 %   57.3 %   51.9 %   48.0 %   32.1 %   44.3 %   44.0 %
Operating margin after
management fee   47.2 %   47.4 %   60.3 %   64.8 %   54.7 %   49.4 %   45.3 %   26.5 %   40.1 %   40.2 %
 

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,
2018 2017  
 
ASSETS
 
Cash and cash equivalents $ 41,202 $ 17,821
Investments 33,789 36,790
Receivable from brokers 3,423 1,578
Other receivables 31,135 45,621
Deferred tax asset and income tax receivable 15,001 15,615
Other assets   10,062   10,861  
 
Total assets $ 134,612 $ 128,286  
 
LIABILITIES AND EQUITY
 
Payable to brokers $ 112 $ 14,926
Income taxes payable and deferred tax liabilities 2,388 3,128
Compensation payable (a) 53,993 82,907
Accrued expenses and other liabilities   44,341   34,454  
Sub-total 100,834 135,415
 
5.875% Senior notes (due June 1, 2021) 24,168 24,144
4% PIK note (due November 30, 2020) - 50,000
1.6% AC Note (due February 28, 2018)   -   15,000  
Total debt   24,168   89,144  
Total liabilities 125,002 224,559
 
GAMCO Investors, Inc.'s stockholders' equity (deficit)   9,610   (96,273 )
 
Total liabilities and equity $ 134,612 $ 128,286  

(a) Excludes $11.3 million and $59.0 million of DCCA expense that is not yet recorded under GAAP as of December 31, 2018 and December 31, 2017, respectively.

 

Non-GAAP information and reconciliation:

GAMCO’s non-GAAP measures include adjusted operating income, 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 operating income, 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 following tables reconcile adjusted income before taxes, adjusted effective tax rate, adjusted net income and adjusted net income per share to their closest GAAP equivalent:

     
For the three months ended December 31, 2018
    Impact of      
Reported Fourth Quarter Impact of
GAAP 2017 DCCA 2016 DCCA Adjusted
 
Total revenues $ 80,977 $ - $ - $ 80,977
 
Compensation costs 11,304 1,236 8,978 21,518
Distribution costs 9,319 - - 9,319
Other operating expenses   6,447     -     -     6,447  
Total expenses 27,070 1,236 8,978 37,284
 
Operating income before management fee 53,907 (1,236 ) (8,978 ) 43,693
 
Other income/(expense), net (21,822 ) - - (21,822 )
 
Income before management fee and income taxes 32,085 (1,236 ) (8,978 ) 21,871
Management fee expense   1,449     (419 )   (1,030 )   -  
Income before income taxes 30,636 (817 ) (7,948 ) 21,871
Income tax expense   7,299     (204 )   (1,987 )   5,108  
Net income attributable to GAMCO Investors, Inc. $ 23,337   $ (613 ) $ (5,961 ) $ 16,763  
 
Net income per share attributable to GAMCO Investors, Inc.:
Basic $ 0.82   $ (0.02 ) $ (0.21 ) $ 0.59  
Diluted $ 0.81   $ (0.02 ) $ (0.21 ) $ 0.59  
 
Reconciliation of non-GAAP financial measures to GAAP:
 
Operating income before management fee $ 53,907 $ (1,236 ) $ (8,978 ) $ 43,693
Deduct: management fee expense   (1,449 )   419     1,030     -  
Operating income $ 52,458   $ (817 ) $ (7,948 ) $ 43,693  
 
    For the three months ended December 31, 2017
Reported     Fourth Quarter     First Half        
GAAP 2017 DCCA 2017 DCCA 2016 DCCA Adjusted
 
Total revenues $ 98,666 $ - $ - $ - $ 98,666
 
Compensation costs 36,536 10,318 (4,771 ) (3,148 ) 38,935
Distribution costs 11,074 - - - 11,074
Other operating expenses   7,321     -     -     -     7,321  
Total expenses 54,931 10,318 (4,771 ) (3,148 ) 57,330
 
Operating income before management fee 43,735 (10,318 ) 4,771 3,148 41,336
 
Other expense, net (4,638 ) - - - (4,638 )
 
Income before management fee and income taxes 39,097 (10,318 ) 4,771 3,148 36,698
Management fee expense   4,211     1,064     (891 )   (715 )   3,669  
Income before income taxes 34,886 (11,382 ) 5,662 3,863 33,029
Income tax expense   21,391     (4,325 )   2,152     1,468     20,686  
Net income attributable to GAMCO Investors, Inc. $ 13,495   $ (7,057 ) $ 3,510   $ 2,395   $ 12,343  
 
Net income per share attributable to GAMCO Investors, Inc.:
Basic $ 0.46   $ (0.24 ) $ 0.12   $ 0.08   $ 0.42  
Diluted $ 0.46   $ (0.23 ) $ 0.12   $ 0.08   $ 0.42  
 
Reconciliation of non-GAAP financial measures to GAAP:
 
Operating income before management fee $ 43,735 $ (10,318 ) $ 4,771 $ 3,148 $ 41,336
Deduct: management fee expense   (4,211 )   (1,064 )   891     715     (3,669 )
Operating income $ 39,524   $ (11,382 ) $ 5,662   $ 3,863   $ 37,667  
 
    For the year ended December 31, 2018
    Impact of     Impact of        
Reported Fourth Quarter First Half Impact of
GAAP 2017 DCCA 2017 DCCA 2016 DCCA Non-GAAP
 
Total revenues $ 341,455 $ - $ - $ - $ 341,455
 
Compensation costs 83,768 (3,210 ) (2,335 ) 9,113 87,336
Distribution costs 39,194 - - - 39,194
Other operating expenses   22,692     -     -     -     22,692  
Total expenses 145,654 (3,210 ) (2,335 ) 9,113 149,222
 
Operating income before management fee 195,801 3,210 2,335 (9,113 ) 192,233
 
Other expense, net (32,128 ) - - - (32,128 )
 
Income before management fee and income taxes 163,673 3,210 2,335 (9,113 ) 160,105
Management fee expense   9,014     (1,676 )   (1,401 )   (4,120 )   1,817  
Income before income taxes 154,659 4,886 3,736 (4,993 ) 158,288
Income tax expense   37,463     1,222     934     (1,249 )   38,370  
Net income attributable to GAMCO Investors, Inc. $ 117,196   $ 3,664   $ 2,802   $ (3,744 ) $ 119,918  
 
Net income per share attributable to GAMCO Investors, Inc.:
Basic $ 4.08   $ 0.13   $ 0.10   $ (0.13 ) $ 4.17  
Diluted $ 4.07   $ 0.13   $ 0.10   $ (0.13 ) $ 4.17  
   
For the year ended December 31, 2017
               
Reported Fourth Quarter First Half
GAAP 2017 DCCA 2017 DCCA 2016 DCCA Adjusted
 
Total revenues $ 360,524 $ - $ - $ - $ 360,524
 
Compensation costs 134,170 10,318 9,619 (12,322 ) 141,785
Distribution costs 44,447 - - - 44,447
Other operating expenses   23,221     -     -     -     23,221  
Total expenses 201,838 10,318 9,619 (12,322 ) 209,453
 
Operating income before management fee 158,686 (10,318 ) (9,619 ) 12,322 151,071
 
Other expense, net (12,132 ) - - - (12,132 )
 
Income before management fee and income taxes 146,554 (10,318 ) (9,619 ) 12,322 138,939
Management fee expense   13,666     1,064     1,775     (2,887 )   13,618  
Income before income taxes 132,888 (11,382 ) (11,394 ) 15,209 125,321
Income tax expense   55,079     (4,325 )   (4,442 )   5,818     52,130  
Net income attributable to GAMCO Investors, Inc. $ 77,809   $ (7,057 ) $ (6,952 ) $ 9,391   $ 73,191  
 
Net income per share attributable to GAMCO Investors, Inc.:
Basic $ 2.68   $ (0.24 ) $ (0.24 ) $ 0.32   $ 2.53  
Diluted $ 2.60   $ (0.23 ) $ (0.22 ) $ 0.30   $ 2.45  
 

SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

The financial results set forth in this press release are preliminary. Our disclosure and analysis in this press release, which do not present historical information, contain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements convey our current expectations or forecasts of future events. You can identify these statements because they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning. They also appear in any discussion of future operating or financial performance. In particular, these include statements relating to future actions, future performance of our products, expenses, the outcome of any legal proceedings, and financial results. Although we believe that we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know about our business and operations, the economy, the effects of the Tax Cuts and Jobs Act, and other conditions, there can be no assurance that our actual results will not differ materially from what we expect or believe. Therefore, you should proceed with caution in relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance.

Forward-looking statements involve a number of known and unknown risks, uncertainties and other important factors, some of which are listed below, that are difficult to predict and could cause actual results and outcomes to differ materially from any future results or outcomes expressed or implied by such forward-looking statements. Some of the factors that could cause our actual results to differ from our expectations or beliefs include a decline in the securities markets that adversely affect our assets under management, negative performance of our products, the failure to perform as required under our investment management agreements, a general downturn in the economy that negatively impacts our operations, and the ongoing impacts of the Tax Cuts and Jobs Act with respect to tax rates and the non-deductibility of certain portions of NEO compensation. We also direct your attention to the more specific discussions of these and other risks, uncertainties and other important factors contained in our Form 10-K and other public filings. Other factors that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We do not undertake to update publicly any forward-looking statements if we subsequently learn that we are unlikely to achieve our expectations whether as a result of new information, future developments or otherwise, except as may be required by law.

Contacts

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

Contacts

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