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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