Pzena Investment Management, Inc. Reports Results For The Second Quarter Of 2010
Total operating expenses were $9.4 million in the second quarter of 2010, compared to $8.0 million in the second quarter of 2009, and $9.3 million in the first quarter of 2010. Operating expenses for the six months ended June 30, 2010 increased by $2.3 million, or 14.0%, compared to the six months ended June 30, 2009. The year-over-year increase in operating expenses was primarily due to increases in discretionary bonus accruals.
As of June 30, 2010, employee headcount was 70, up from 67 at June 30, 2009 and from 68 at March 31, 2010.
The operating margin was 51.4% for the second quarter of 2010, compared to 44.1% for the second quarter of 2009, and 51.4% for the first quarter of 2010. For the six months ended June 30, 2010, the operating margin was 51.4%, compared to 41.1% for the six months ended June 30, 2009. The year-over-year increase in the operating margin is primarily a result of an increase in weighted average assets and revenues.
Other income/(expense) was income of $0.4 million for the second quarter of 2010, income of $2.9 million for the second quarter of 2009, and an expense of $0.7 million for the first quarter of 2010. Second quarter 2010 other income/(expense) included income of $1.1 million associated with a decrease in the Company’s liability to its selling and converting shareholders resulting from changes in the realizability of its related deferred tax asset. Such adjustments generated expenses of $0.6 million and $1.0 million in the second quarter of 2009 and first quarter of 2010, respectively. Details of other income/(expense), as well as a reconciliation of the GAAP and non-GAAP measures, are shown below:
|Other Income/(Expense) (unaudited)|
|Three Months Ended|
|June 30,||March 31,||June 30,|
|Interest and Dividend Income||$||112||$||73||$||127|
|Realized and Unrealized Gain/(Loss), Net on Equity Securities||(871||)||464||3,729|
|GAAP Other Income/(Expense)||372||(665||)||2,936|
|Change in Liability to Selling and Converting Shareholders¹||(1,118||)||1,026||602|
|Outside Interests of Investment Partnerships²||162||-||(2,336||)|
|Non-GAAP Other Income/(Expense), Net of Outside Interests||$||(584||)||$||361||$||1,202|
|Six Months Ended|
|June 30,||June 30,|
|Interest and Dividend Income||$||185||$||247|
|Realized and Unrealized Gain/(Loss), Net on Equity Securities||(407||)||1,909|
|GAAP Other Income/(Expense)||(293||)||205|
|Change in Liability to Selling and Converting Shareholders¹||(92||)||1,204|
|Outside Interests of Investment Partnerships²||162||(1,010||)|
|Non-GAAP Other Income/(Expense), Net of Outside Interests||$||(223||)||$||399|
|(1)||Reflects the change in the liability to the Company’s selling and converting shareholders associated with the deferred tax asset generated by the Company’s initial public offering and subsequent unit conversions.|
|(2)||Represents the non-controlling interest allocation of the loss/(income) of the Company’s consolidated investment partnerships to its external investors.|
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