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TheStreet Open House

Manning & Napier, Inc. Reports First Quarter Earnings Results

Investors should consider the non-GAAP measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP. Additionally, the Company’s non-GAAP measures may differ from similar measures by other companies, even if similar terms are used to identify such measures.

About Manning & Napier, Inc.

Manning & Napier (NYSE: MN) provides a broad range of investment solutions through separately managed accounts, mutual funds, and collective investment trust funds, as well as a variety of consultative services that complement our investment process. Founded in 1970, we offer equity and fixed income portfolios as well as a range of blended asset portfolios, such as life cycle funds, that use a mix of stocks and bonds. We serve a diversified client base of high-net-worth individuals and institutions, including 401(k) plans, pension plans, Taft-Hartley plans, endowments and foundations. For many of these clients, our relationship goes beyond investment management and includes customized solutions that address key issues and solve client-specific problems. We are headquartered in Fairport, NY and had 489 employees as of March 31, 2012.

Safe Harbor Statement

This press release and other statements that the Company may make may contain forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which reflect the Company’s current views with respect to, among other things, its operations and financial performance. Words like “believes,” “expects,” “may,” “estimates,” “will,” “should,” “intends,” “plans,” or “anticipates” or the negative thereof or other variations thereon or comparable terminology, are used to identify forward-looking statements, although not all forward-looking statements contain these words. Although the Company believes that it is basing its expectations and beliefs on reasonable assumptions within the bounds of what it currently knows about its business and operations, there can be no assurance that its actual results will not differ materially from what the Company expects or believes. Some of the factors that could cause the Company’s actual results to differ from its expectations or beliefs include, without limitation: changes in securities or financial markets or general economic conditions; a decline in the performance of the Company’s products; client sales and redemption activity; changes of government policy or regulations; and other risks discussed from time to time in the Company’s filings with the Securities and Exchange Commission.

Manning & Napier, Inc. Combined Consolidated Statements of Income (in thousands, except per share data) (unaudited)
Three Months Ended
March 31,   December 31, March 31,
2012 2011 2011
 
Revenues
Investment management services revenue $ 85,014 $ 80,358 $ 78,040
 
Expenses
Compensation and related costs 27,732 235,113 22,894
Sub-transfer agent and shareholder service costs 12,674 12,255 11,695
Other operating costs   8,589   8,479   6,225
Total operating expenses   48,995   255,847   40,814
Operating income (loss) 36,019 (175,489) 37,226
 
Non-operating income (loss)
Interest expense on shares subject to mandatory redemption - (3,111) (13,288)
Other non-operating income   395   138   8
 
Total non-operating income (loss)   395   (2,973)   (13,280)
Income (loss) before provision for income taxes 36,414 (178,462) 23,946
Provision for income taxes   1,990   1,191   286

Net income (loss) attributable to the controlling and the

noncontrolling interests

34,424 (179,653) 23,660
Less: net income (loss) attributable to the

noncontrolling interests

  31,521   (152,486)   23,660
Net income (loss) attributable to Manning & Napier, Inc. $ 2,903 $ (27,167) $ -
 
 
Three Months November 18, 2011
Ended through
March 31, 2012 December 31, 2011

Net income (loss) attributable to the controlling and the noncontrolling interests

 

$ 34,424 $ (197,874)
 
Less: net income (loss) attributable to the noncontrolling interests   31,521   (170,707)
Net income (loss) attributable to Manning & Napier, Inc. $ 2,903 $ (27,167)
 
Net income per share available to Class A common stock
Basic $ 0.21 $ (2.11)

  (1)

Diluted $ 0.21 $ (2.11)

  (1)

 

Weighted average shares of Class A common stock outstanding

Basic   13,583,873   12,894,136

  (2)

Diluted   13,583,873   12,894,136

  (2)

 

(1) The Company consummated its initial public offering on November 18, 2011. Since that date, the Company has consolidated the results of Manning & Napier Group, LLC due to the Company's role as its managing member. Therefore, all income for the period prior to November 18, 2011 is entirely attributable to the noncontrolling interest which existed prior to the initial public offering. As a result, in the computation of GAAP earnings per share, only the net income attributable to the Company's controlling interest from the period subsequent to the initial public offering is considered.

 

 

(2) The computation of weighted average basic and diluted shares of Class A common stock outstanding considers the outstanding shares from the date of the initial public offering, November 18, 2011, through December 31, 2011.

 
 
 
Manning & Napier, Inc. Reconciliation of Non-GAAP Financial Measures (in thousands, except per share data) (unaudited)
Three Months Ended
March 31, December 31, March 31,
2012 2011 2011
Reconciliation of non-GAAP financial measures:
 
Net income (loss) attributable to Manning & Napier, Inc. $ 2,903 $ (27,167) $ -
Plus: net (loss) income attributable to the noncontrolling interests   31,521   (152,486)   23,660
Net income (loss) attributable to the controlling and the

noncontrolling interests

34,424 (179,653) 23,660
Provision for income taxes   1,990   1,191   286
Income (loss) before provision for income taxes 36,414 (178,462) 23,946
Interest expense on shares subject to mandatory redemption - 3,111 13,288

Reorganization-related share-based compensation

  3,709   215,324   -
Economic income 40,123 39,973 37,234
Adjusted income taxes   15,347   15,289   14,242
Economic net income   24,776 $ 24,684 $ 22,992
 
Reconciliation of non-GAAP per share financial measures:
 

Net income (loss) available to Class A common stock per basic share

$ 0.21 $ (2.11)

Plus: net income (loss) attributable to the noncontrolling interests per basic share

  2.32   (11.82)

Net income (loss) attributable to the controlling and the noncontrolling

interests per basic share

2.53 (13.93)
Provision for income taxes per basic share   0.15   0.09
 
Income (loss) before provision for income taxes per basic share 2.68 (13.84)

Interest expense on shares subject to mandatory redemption per basic

share

- 0.24
 
Reorganization-related share-based compensation per basic share   0.27   16.70
Economic income per basic share 2.95 3.10
Adjusted income taxes per basic share   1.13   1.19
Economic net income per basic share 1.82 1.91
Less: Impact of Manning & Napier Group, LLC units converted to

publicly traded shares

  (1.54)   (1.64)
Economic net income per adjusted share $ 0.28 $ 0.27
 
Total basic shares of Class A common stock outstanding 13,583,873 13,583,873
Total units of Manning & Napier Group, LLC   76,400,000   76,400,000
Total adjusted Class A common stock outstanding   89,983,873   89,983,873
                                 
Manning & Napier, Inc.Assets Under Management (in millions)
   
                                 
Vehicle Portfolio
 

Separate accounts

Mutual funds

and collective

investment

trusts

Total Blended Equity Fixed Income Total

Assets Under Management

 
 
As of December 31, 2011 $ 22,658.1 $ 17,542.0 $ 40,200.1 $ 18,122.5 $ 20,812.0 $ 1,265.6 $ 40,200.1
Gross client inflows 879.2 1,853.1 2,732.3 1,031.3 1,613.6 87.4 2,732.3
Gross client outflows (939.3) (1,472.2) (2,411.5) (820.2) (1,494.5) (96.8) (2,411.5)

Market appreciation (depreciation)

  2,229.7   1,981.4   4,211.1   1,324.5   2,887.9   (1.3)   4,211.1
As of March 31, 2012 $ 24,827.7 $ 19,904.3 $ 44,732.0 $ 19,658.1 $ 23,819.0 $ 1,254.9 $ 44,732.0
 
 
As of September 30, 2011 $ 21,551.7 $ 17,217.1 $ 38,768.8 $ 17,183.1 $ 20,356.4 $ 1,229.3 $ 38,768.8
Gross client inflows 777.9 1,902.3 2,680.2 839.8 1,781.1 59.3 2,680.2
Gross client outflows (897.6) (2,283.4) (3,181.0) (830.9) (2,297.9) (52.2) (3,181.0)
Market appreciation   1,226.1   706.0   1,932.1   930.5   972.4   29.2   1,932.1
As of December 31, 2011 $ 22,658.1 $ 17,542.0 $ 40,200.1 $ 18,122.5 $ 20,812.0 $ 1,265.6 $ 40,200.1
 
 
As of December 31, 2010 $ 22,935.1 $ 15,906.6 $ 38,841.7 $ 17,280.5 $ 20,256.9 $ 1,304.3 $ 38,841.7
Gross client inflows 961.3 2,413.8 3,375.1 1,146.2 2,202.2 26.7 3,375.1
Gross client outflows (497.7) (841.4) (1,339.1) (674.1) (594.9) (70.1) (1,339.1)
Market appreciation (depreciation)   985.4   701.0   1,686.4   667.8   1,007.1   11.5   1,686.4
As of March 31, 2011 $ 24,384.1 $ 18,180.0 $ 42,564.1 $ 18,420.4 $ 22,871.3 $ 1,272.4 $ 42,564.1
 




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