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||%|
|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||)|
|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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