Associated Capital Group, Inc. Reports Second Quarter Results
-Book Value per share ended the quarter at
-AUM:
-Board approves
Financial Highlights - GAAP Basis
($ in 000's except AUM and per share data)
(Unaudited) |
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
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||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
AUM - end of period (in millions) |
|
$ |
1,549 |
|
|
$ |
1,802 |
|
|
$ |
1,549 |
|
|
$ |
1,802 |
|
AUM - average (in millions) |
|
|
1,640 |
|
|
|
1,851 |
|
|
|
1,740 |
|
|
|
1,826 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
2,382 |
|
|
|
2,546 |
|
|
|
4,847 |
|
|
|
5,128 |
|
Operating loss before management fee (Non-GAAP) |
|
|
(2,927 |
) |
|
|
(2,211 |
) |
|
|
(5,517 |
) |
|
|
(5,517 |
) |
Investment and other non-operating income/(loss), net |
|
|
8,611 |
|
|
|
(35,917 |
) |
|
|
33,346 |
|
|
|
(50,964 |
) |
Income/(loss) before income taxes |
|
|
5,140 |
|
|
|
(38,128 |
) |
|
|
24,742 |
|
|
|
(56,481 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) |
|
|
3,371 |
|
|
|
(29,887 |
) |
|
|
21,125 |
|
|
|
(46,073 |
) |
Net income/(loss) per share-diluted |
|
|
0.15 |
|
|
|
(1.36 |
) |
|
0.96 |
|
|
(2.09 |
) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A shares outstanding (000’s) |
|
|
2,763 |
|
|
|
3,052 |
|
|
|
2,763 |
|
|
|
3,052 |
|
Class B " " |
|
|
18,963 |
|
|
|
18,963 |
|
|
|
18,963 |
|
|
|
18,963 |
|
Total " " |
|
|
21,726 |
|
|
|
22,015 |
|
|
|
21,726 |
|
|
|
22,015 |
|
Book Value Per Share |
|
$ |
41.41 |
|
|
$ |
40.30 |
|
|
$ |
41.41 |
|
|
$ |
40.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter Financial Data
-Assets under management ended the quarter at
-Book value was
-For the first six months, Investment and other non-operating income was
Second Quarter Results
Second quarter revenues were
Net investment and other non-operating income was
Management fee was
Our income tax expense of
Assets Under Management (AUM)
Assets under management at June 30, 2023 were
|
|
June 30, |
|
|
December 31, |
|
|
June 30, |
|
|||
|
|
2023 |
|
|
2022 |
|
|
2022 |
|
|||
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Merger Arbitrage(a) |
|
$ |
1,286 |
|
|
$ |
1,588 |
|
|
$ |
1,591 |
|
Long/Short Value(b) |
|
|
230 |
|
|
|
222 |
|
|
|
174 |
|
Other |
|
|
33 |
|
|
|
32 |
|
|
|
37 |
|
Total AUM |
|
$ |
1,549 |
|
|
$ |
1,842 |
|
|
$ |
1,802 |
|
(a) Includes
(b) AUM represents the assets invested in this strategy that are attributable to Associated Capital Group, Inc.
Alternative Investment Management
The alternative investment strategy offerings center around our merger arbitrage strategy which has an absolute return focus of generating returns independent of the broad equity and fixed income markets. We also offer strategies utilizing fundamental, active, event-driven and special situations investments.
Merger Arbitrage
For the second quarter 2023, the longest continuously offered fund in the merger arbitrage strategy generated gross returns of -
|
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Full Year |
|
|
|
|
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|
|
|
|
|||||||||||||
Performance%(a) |
|
2Q '23 |
|
|
2Q '22 |
|
|
YTD '23 |
|
|
YTD '22 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
5 Year(b) |
|
|
Since
|
|
||||||||||
Merger Arb |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross |
|
|
-0.24 |
|
|
|
-3.05 |
|
|
|
-0.63 |
|
|
|
-2.24 |
|
|
|
4.47 |
|
|
|
10.81 |
|
|
|
9.45 |
|
|
|
8.55 |
|
|
|
6.84 |
|
|
|
10.06 |
|
Net |
|
|
-0.50 |
|
|
|
-3.18 |
|
|
|
-1.13 |
|
|
|
-2.73 |
|
|
|
2.75 |
|
|
|
7.78 |
|
|
|
6.70 |
|
|
|
5.98 |
|
|
|
4.59 |
|
|
|
7.11 |
|
(a) Net performance is net of fees and expenses, unless otherwise noted. Performance shown for an actual fund in this strategy. The performance of other funds in this strategy may vary. Past performance is no guarantee of future results.
(b) Represents annualized returns through June 30, 2023
(c) Inception Date: February 1985
Merger and acquisitions activity was stronger in the second quarter, increasing
The Merger Arbitrage strategy is offered by mandate and client type through partnerships and offshore corporations serving accredited as well as institutional investors. The strategy is also offered in separately managed accounts, a Luxembourg UCITS and a London Stock Exchange listed investment company, Gabelli Merger Plus + Trust Plc (GMP-LN).
Acquisitions
Associated Capital Group's plan is to accelerate the use of its capital. We intend to leverage our research and investment capabilities by pursuing acquisitions and alliances that will broaden our product offerings and add new sources of distribution. In addition, we may make direct investments in operating businesses using a variety of techniques and structures to accomplish our objectives.
Charitable Contributions, Shareholder Dividends and Buybacks
AC seeks to be a good corporate citizen by supporting our community through sponsoring local organizations. On August 9, 2023, the Board of Directors approved a
On May 10, 2023, the Board of Directors declared a semi-annual dividend of
During the second quarter, AC repurchased 211,870 Class A shares, for
Since our spin-off from GAMCO on November 30, 2015, AC has returned
At June 30, 2023, there were 2.763 million Class A shares and 18.963 million Class B shares outstanding.
About Associated Capital Group, Inc.
Associated Capital Group, Inc. (NYSE:AC), based in
Operating Loss Before Management Fee
Operating loss before management fee expense represents a non-GAAP financial measure used by management to evaluate its business operations. We believe this measure is useful in illustrating the operating results of the Company as management fee expense is based on pre-tax income before management fee expense, which includes non-operating items including investment gains and losses from the Company’s proprietary investment portfolio and interest expense.
|
|
Year-to-date |
|
|||||
($ in 000's) |
|
2023 |
|
|
2022 |
|
||
|
|
|
|
|
|
|
|
|
Operating loss - GAAP |
|
$ |
(8,604 |
) |
|
$ |
(5,517 |
) |
|
|
|
|
|
|
|
|
|
Add: management fee expense (1) |
|
|
3,087 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Operating loss before management fee - Non-GAAP |
|
$ |
(5,517 |
) |
|
$ |
(5,517 |
) |
(1) Management fee expense is incentive-based and is equal to
Table I |
||||||||||||
ASSOCIATED CAPITAL GROUP, INC. |
||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION |
||||||||||||
(Amounts in thousands) |
||||||||||||
|
|
June 30, |
|
|
December 31, |
|
|
June 30, |
|
|||
|
|
2023 |
|
|
2022 |
|
|
2022 |
|
|||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and US Treasury Bills |
|
$ |
382,382 |
|
|
$ |
404,463 |
|
|
$ |
369,237 |
(a) |
Investments in securities and partnerships |
|
|
445,585 |
|
|
|
435,610 |
|
|
|
468,335 |
|
Investment in GAMCO stock |
|
|
46,087 |
|
|
|
36,683 |
|
|
|
50,526 |
|
Receivable from brokers |
|
|
28,767 |
|
|
|
12,072 |
|
|
|
22,184 |
|
Income taxes receivable, including deferred tax assets, net |
|
7,510 |
|
|
|
10,320 |
|
|
|
8,179 |
|
|
Other receivables |
|
|
1,561 |
|
|
|
6,324 |
|
|
|
1,426 |
|
Other assets |
|
|
21,621 |
|
|
|
22,218 |
|
|
|
24,708 |
|
Investments in marketable securities held in trust |
|
|
- |
|
|
|
- |
|
|
|
175,420 |
(a) |
Total assets |
|
$ |
933,513 |
|
|
$ |
927,690 |
|
|
$ |
1,120,015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable to brokers |
|
$ |
9,917 |
|
|
$ |
7,784 |
|
|
$ |
12,107 |
|
Compensation payable |
|
|
11,005 |
|
|
|
13,936 |
|
|
|
5,941 |
|
Securities sold short, not yet purchased |
|
|
3,927 |
|
|
|
2,874 |
|
|
|
3,569 |
|
Accrued expenses and other liabilities |
|
|
2,011 |
|
|
|
2,707 |
|
|
|
2,181 |
(a) |
Deferred underwriting fee payable |
|
|
- |
|
|
|
- |
|
|
|
6,125 |
(a) |
PMV warrant liability |
|
|
- |
|
|
|
- |
|
|
|
908 |
(a) |
Total liabilities |
|
$ |
26,860 |
|
|
$ |
27,301 |
|
|
$ |
30,831 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interests |
|
|
7,086 |
|
|
|
10,193 |
|
|
|
203,327 |
(a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Associated Capital Group, Inc. equity |
|
|
899,567 |
|
|
|
890,196 |
|
|
|
887,294 |
|
Noncontrolling interests |
|
|
- |
|
|
|
- |
|
|
|
(1,437 |
) |
Total equity |
|
|
899,567 |
|
|
|
890,196 |
|
|
|
885,857 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
933,513 |
|
|
$ |
927,690 |
|
|
$ |
1,120,015 |
|
(a) Amounts related to PMV Sponsor and SPAC were deconsolidated during the quarter ended September 30, 2022 and resulted in a reduction of
(1) Certain captions include amounts related to consolidated variable interest entities ("VIEs") and voting interest entities ("VOEs"), refer to footnote 4 of the Condensed Consolidated Financial Statements included in the 10-Q report to be filed for the quarter ended June 30, 2023 for more details on the impact of consolidating these entities.
(2) Investment in GAMCO stock: 2,405,370, 2,417,500 and 2,417,500 shares, respectively.
Table II | ||||||||||||||||
ASSOCIATED CAPITAL GROUP, INC. |
||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||||||
(Amounts in thousands, except per share data) |
||||||||||||||||
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory and incentive fees |
|
$ |
2,280 |
|
|
$ |
2,451 |
|
|
$ |
4,691 |
|
|
$ |
4,937 |
|
Other revenues |
|
|
102 |
|
|
|
95 |
|
|
|
156 |
|
|
|
191 |
|
Total revenues |
|
|
2,382 |
|
|
|
2,546 |
|
|
|
4,847 |
|
|
|
5,128 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation |
|
|
3,789 |
|
|
|
3,007 |
|
|
|
7,359 |
|
|
|
6,940 |
|
Other operating expenses |
|
|
1,520 |
|
|
|
1,750 |
|
|
|
3,005 |
|
|
|
3,705 |
|
Total expenses |
|
|
5,309 |
|
|
|
4,757 |
|
|
|
10,364 |
|
|
|
10,645 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss before management fee |
|
|
(2,927 |
) |
|
|
(2,211 |
) |
|
|
(5,517 |
) |
|
|
(5,517 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment gain/(loss) |
|
|
3,297 |
|
|
|
(37,803 |
) |
|
|
23,808 |
|
|
|
(53,413 |
) |
Interest and dividend income from GAMCO |
|
|
177 |
|
|
|
120 |
|
|
|
273 |
|
|
|
273 |
|
Interest and dividend income, net |
|
|
5,635 |
|
|
|
1,766 |
|
|
|
10,634 |
|
|
|
2,384 |
|
Shareholder-designated contribution |
|
|
(498 |
) |
|
|
- |
|
|
|
(1,369 |
) |
|
|
(208 |
) |
Investment and other non-operating income/(loss), net |
|
|
8,611 |
|
|
|
(35,917 |
) |
|
|
33,346 |
|
|
|
(50,964 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(loss) before management fee and income taxes |
|
|
5,684 |
|
|
|
(38,128 |
) |
|
|
27,829 |
|
|
|
(56,481 |
) |
Management fee |
|
|
544 |
|
|
|
- |
|
|
|
3,087 |
|
|
|
- |
|
Income/(loss) before income taxes |
|
|
5,140 |
|
|
|
(38,128 |
) |
|
|
24,742 |
|
|
|
(56,481 |
) |
Income tax expense/(benefit) |
|
|
1,840 |
|
|
|
(8,036 |
) |
|
|
3,420 |
|
|
|
(12,884 |
) |
Income/(loss) before noncontrolling interests |
|
|
3,300 |
|
|
|
(30,092 |
) |
|
|
21,322 |
|
|
|
(43,597 |
) |
Income/(loss) attributable to noncontrolling interests |
|
|
(71 |
) |
|
|
(205 |
) |
|
|
197 |
|
|
|
2,476 |
|
Net income/(loss) attributable to AC |
|
$ |
3,371 |
|
|
$ |
(29,887 |
) |
|
$ |
21,125 |
|
|
$ |
(46,073 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) per share attributable to AC: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.15 |
|
|
$ |
(1.36 |
) |
|
$ |
0.96 |
|
|
$ |
(2.09 |
) |
Diluted |
|
$ |
0.15 |
|
|
$ |
(1.36 |
) |
|
$ |
0.96 |
|
|
$ |
(2.09 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
21,870 |
|
|
|
22,036 |
|
|
|
21,920 |
|
|
|
22,045 |
|
Diluted |
|
|
21,870 |
|
|
|
22,036 |
|
|
|
21,920 |
|
|
|
22,045 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual shares outstanding - end of period |
|
|
21,726 |
|
|
|
22,015 |
|
|
|
21,726 |
|
|
|
22,015 |
|
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
The financial results set forth in this press release are preliminary. Our disclosure and analysis in this press release, which do not present historical information, contain “forward-looking statements” within the meaning of the
Forward-looking statements involve a number of known and unknown risks, uncertainties and other important factors, some of which are listed below, that are difficult to predict and could cause actual results and outcomes to differ materially from any future results or outcomes expressed or implied by such forward-looking statements. Some of the factors that could cause our actual results to differ from our expectations or beliefs include a decline in the securities markets that adversely affect our assets under management, negative performance of our products, the failure to perform as required under our investment management agreements, and a general downturn in the economy that negatively impacts our operations. We also direct your attention to the more specific discussions of these and other risks, uncertainties and other important factors contained in our Form 10 and other public filings. Other factors that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We do not undertake to update publicly any forward-looking statements if we subsequently learn that we are unlikely to achieve our expectations whether as a result of new information, future developments or otherwise, except as may be required by law.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230808163008/en/
Ian J. McAdams
Interim Co-Chief Financial Officer
(914) 921 5078
Associated-Capital-Group.com
Source: Associated Capital Group, Inc.