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GAMCO Investors, Inc. Reports Fourth Quarter & Full Year Results

GAMCO Investors, Inc. (GAMCO) (NYSE: GBL) announced fourth quarter 2012 earnings of $17.6 million or $0.67 per fully diluted share versus $23.7 million or $0.89 per fully diluted share in the fourth quarter 2011. Fourth quarter 2012 earnings reflect after tax costs of $5.7 million, or $0.22 per diluted share, for accelerating all outstanding restricted stock awards (“RSAs”).

For the year ended December 31, 2012, earnings were $75.5 million or $2.86 per diluted share versus $69.7 million or $2.61 per diluted share in 2011. The current year results include after tax costs of $7.8 million, or $0.30 per diluted share, for charges related to the extinguishment of debt ($0.08 per diluted share) and acceleration of all outstanding RSAs ($0.22 per diluted share). The prior year results included after tax costs of $3.2 million, or $0.12 per diluted share, related to the launch of a new closed-end fund. Excluding these charges, earnings were $83.3 million, or $3.16 per diluted share, in 2012 versus $72.9 million, or $2.73 per diluted share, in 2011.

                     
Financial Highlights   Fourth Quarter     Full Year    
($'s in 000's except AUM and per share data) 2012   2011

% ∆

2012 2011

% ∆

 
AUM (in millions) $ 36,405 $ 34,085 6.8 % $ 36,405 $ 34,085 6.8 %
Revenues 99,277 84,991 16.8 344,281 327,128 5.2
Operating income:
before management fee 27,902 35,520 (21.4 ) 124,148 125,564 (1.1 )
after management fee 24,739 31,376 (21.2 ) 111,130 113,294 (1.9 )
Operating margin:
before management fee 28.1 % 41.8 % 36.1 % 38.4 %
after management fee 24.9 % 36.9 % 32.3 % 34.6 %
Extinguishment of debt - 2 (6,307 ) 2 n/m
Other income/(expense), net 3,740 5,959 (37.2 ) 6,186 (2,852 ) n/m
Net income attributable to GAMCO 17,594 23,693 (25.7 ) 75,539 69,682 8.4
Net income attributable to GAMCO per share $ 0.67 $ 0.89 (24.7 %) $ 2.86 $ 2.61 9.6 %
Shares outstanding at December 31     25,746       26,755           25,746       26,755      

We note that operating income and margin in 2013 will benefit from the absence of pre-tax RSA expense which, in 2012, totaled $13.6 million. Everything else constant, Other Income, net will benefit from lower interest expense of approximately $5.0 million from lower average debt outstanding and the absence of the $6.3 million loss related to the extinguishment of debt in 2012.

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