Virtus Investment Partners Announces Financial Results for Second Quarter 2024
Virtus Investment Partners (NYSE: VRTS) reported financial results for Q2 2024. Key highlights include:
- Earnings per share (diluted) of $2.43, adjusted EPS of $6.53
- Total sales of $6.1B, net flows of ($2.6B)
- Assets under management of $173.6B, down 3% from Q1
- Revenues increased 5% year-over-year to $224.4M
- Operating income up 13% year-over-year to $44.2M
- Operating margin improved to 19.7% from 18.3% in Q2 2023
The company saw decreased sales and net outflows in U.S. retail funds and institutional accounts, partially offset by positive flows in retail separate accounts, ETFs, and global funds. Virtus maintained a strong balance sheet with $183M in cash and reduced debt levels.
Virtus Investment Partners (NYSE: VRTS) ha riportato i risultati finanziari per il secondo trimestre del 2024. Le principali evidenze includono:
- Utile per azione (diluito) di $2.43, EPS rettificato di $6.53
- Vendite totali di $6.1 miliardi, flussi netti di ($2.6 miliardi)
- Attività gestite di $173.6 miliardi, in calo del 3% rispetto al primo trimestre
- I ricavi sono aumentati del 5% rispetto all'anno precedente, per un totale di $224.4 milioni
- L'utile operativo è aumentato del 13% rispetto all'anno precedente, raggiungendo $44.2 milioni
- Il margine operativo è migliorato al 19.7% rispetto al 18.3% del secondo trimestre del 2023
L'azienda ha registrato una diminuzione delle vendite e deflussi netti nei fondi retail statunitensi e nei conti istituzionali, parzialmente compensati da flussi positivi in conti separati retail, ETF e fondi globali. Virtus ha mantenuto un solido bilancio con $183 milioni in contante e livelli di indebitamento ridotti.
Virtus Investment Partners (NYSE: VRTS) reportó resultados financieros para el segundo trimestre de 2024. Los aspectos más destacados incluyen:
- Ganancias por acción (diluida) de $2.43, EPS ajustado de $6.53
- Ventas totales de $6.1 mil millones, flujos netos de ($2.6 mil millones)
- Activos bajo gestión de $173.6 mil millones, una disminución del 3% con respecto al primer trimestre
- Los ingresos aumentaron un 5% interanual, alcanzando $224.4 millones
- El ingreso operativo aumentó un 13% interanual a $44.2 millones
- El margen operativo mejoró al 19.7% desde el 18.3% en el segundo trimestre de 2023
La empresa experimentó una disminución en las ventas y flujos netos en fondos minoristas de EE. UU. y cuentas institucionales, compensados en parte por flujos positivos en cuentas separadas minoristas, ETF y fondos globales. Virtus mantuvo un balance sólido con $183 millones en efectivo y niveles de deuda reducidos.
Virtus Investment Partners (NYSE: VRTS)는 2024년 2분기 재무 결과를 발표했습니다. 주요 내용은 다음과 같습니다:
- 희석 주당 순이익이 $2.43, 조정 주당 순이익이 $6.53
- 총 매출이 $6.1억으로, 순유출이 ($2.6억)
- 관리 자산이 $173.6억으로, 1분기 대비 3% 감소
- 매출이 전년 대비 5% 증가하여 $224.4백만에 도달
- 운영 소득이 전년 대비 13% 증가하여 $44.2백만에 도달
- 운영 마진이 2023년 2분기 18.3%에서 19.7%로 개선됨
회사는 미국 소매 펀드와 기관 계좌에서 매출 감소 및 순유출을 경험했으나, 소매 분리 계좌, ETF 및 글로벌 펀드에서 긍정적인 유입으로 부분적으로 상쇄되었습니다. Virtus는 $183백만의 현금과 감소한 부채 수준으로 강력한 재무 상태를 유지했습니다.
Virtus Investment Partners (NYSE: VRTS) a publié ses résultats financiers pour le 2ème trimestre 2024. Les points clés incluent :
- Bénéfice par action (dilué) de 2,43 $, bénéfice ajusté par action de 6,53 $
- Chiffre d'affaires total de 6,1 milliards de dollars, flux nets de (2,6 milliards de dollars)
- Actifs sous gestion de 173,6 milliards de dollars, en baisse de 3 % par rapport au 1er trimestre
- Les revenus ont augmenté de 5 % par rapport à l'année précédente, atteignant 224,4 millions de dollars
- Le résultat d'exploitation a augmenté de 13 % par rapport à l'année précédente, atteignant 44,2 millions de dollars
- La marge opérationnelle s'est améliorée à 19,7 % contre 18,3 % au 2ème trimestre 2023
L'entreprise a constaté une baisse des ventes et des sorties nettes dans les fonds de détail américains et les comptes institutionnels, partiellement compensées par des flux positifs dans les comptes séparés de détail, les ETF et les fonds mondiaux. Virtus a maintenu une solide situation financière avec 183 millions de dollars en espèces et un niveau d'endettement réduit.
Virtus Investment Partners (NYSE: VRTS) hat die finanziellen Ergebnisse für das 2. Quartal 2024 veröffentlicht. Wichtige Eckdaten sind:
- Verwässerter Gewinn pro Aktie von $2,43 und angepasster Gewinn pro Aktie von $6,53
- Gesamtumsatz von $6,1 Milliarden, Nettoabflüsse von ($2,6 Milliarden)
- Verwalte Vermögenswerte von $173,6 Milliarden, ein Rückgang um 3% im Vergleich zum 1. Quartal
- Die Einnahmen stiegen im Vergleich zum Vorjahr um 5% auf $224,4 Millionen
- Das Betriebsergebnis stieg im Vergleich zum Vorjahr um 13% auf $44,2 Millionen
- Die operative Marge verbesserte sich von 18,3% im 2. Quartal 2023 auf 19,7%
Das Unternehmen verzeichnete einen Rückgang der Verkaufszahlen und netto Abflüsse bei US-Retailfonds und institutionellen Konten, die teilweise durch positive Zuflüsse in separaten Einzelkonten, ETFs und globalen Fonds ausgeglichen wurden. Virtus hielt eine starke Bilanz mit $183 Millionen in bar und reduzierten Schulden.
- Adjusted EPS increased 20% year-over-year to $6.53
- Operating income grew 13% year-over-year to $44.2M
- Operating margin improved to 19.7% from 18.3% in Q2 2023
- Revenues increased 5% year-over-year to $224.4M
- Positive net flows in retail separate accounts, ETFs, and global funds
- Reduced gross debt by 16% year-over-year to $252.4M
- Total net flows were negative at ($2.6B), worsening from ($1.2B) in Q1
- Assets under management decreased 3% from Q1 to $173.6B
- Total sales declined 19% quarter-over-quarter to $6.1B
- Institutional net outflows increased to ($1.7B) from ($1.3B) in Q1
- Open-end fund net outflows worsened to ($1.3B) from ($0.6B) in Q1
Virtus Investment Partners' Q2 2024 results present a mixed picture. While the company showed some positive trends, there are also areas of concern that investors should note.
On the positive side, adjusted earnings per share increased by
However, there are some red flags. Total assets under management (AUM) decreased by
The decline in total sales from
From a balance sheet perspective, the company has made progress in reducing its debt and improving its net cash position. Net debt decreased to
In conclusion, while Virtus has shown improved profitability, the declining AUM and persistent net outflows pose significant challenges for future growth. Investors should closely monitor these trends in the coming quarters.
Virtus Investment Partners' Q2 2024 results reveal some interesting trends in investor behavior and market dynamics that warrant closer examination.
The company's net outflows of
The decline in institutional sales from
Interestingly, Virtus saw higher sales in large cap and global equity strategies, but these were offset by declines in other strategies. This suggests that investors are favoring more established, liquid markets over potentially riskier or more specialized investment approaches.
The positive net flows in retail separate accounts, particularly in the private client segment, indicate that high-net-worth individuals are still actively seeking professional investment management. This could be a bright spot for Virtus if they can capitalize on this trend.
The company's ETF and global funds also saw positive net flows, aligning with the broader industry trend towards these investment vehicles. Virtus might want to consider expanding its offerings in these areas to capture more of this growing market segment.
Overall, these results reflect a challenging environment for active asset managers, with investors becoming more cost-conscious and increasingly favoring passive strategies. Virtus will need to adapt its product mix and distribution strategies to align with these evolving investor preferences to maintain its competitive position in the market.
-
Earnings Per Share - Diluted of
; Earnings Per Share - Diluted, as Adjusted, of$2.43 $6.53
-
Total Sales of
; Net Flows of ($6.1B ); Assets Under Management of$2.6B $173.6B
Financial Highlights (Unaudited)
|
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|
Three Months Ended |
|
|
|
Three
|
|
|
||||||||||
|
6/30/2024 |
|
6/30/2023 |
|
Change |
|
3/31/2024 |
|
Change |
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues |
$ |
224.4 |
|
|
$ |
213.5 |
|
|
5 |
% |
|
$ |
222.0 |
|
|
1 |
% |
Operating expenses |
$ |
180.2 |
|
|
$ |
174.5 |
|
|
3 |
% |
|
$ |
189.7 |
|
|
(5 |
%) |
Operating income (loss) |
$ |
44.2 |
|
|
$ |
39.0 |
|
|
13 |
% |
|
$ |
32.3 |
|
|
37 |
% |
Operating margin |
|
19.7 |
% |
|
|
18.3 |
% |
|
|
|
|
14.5 |
% |
|
|
||
Net income (loss) attributable to Virtus Investment Partners, Inc. |
$ |
17.6 |
|
|
$ |
30.3 |
|
|
(42 |
%) |
|
$ |
29.9 |
|
|
(41 |
%) |
Earnings (loss) per share - diluted |
$ |
2.43 |
|
|
$ |
4.10 |
|
|
(41 |
%) |
|
$ |
4.10 |
|
|
(41 |
%) |
Weighted average shares outstanding - diluted |
|
7.242 |
|
|
|
7.385 |
|
|
(2 |
%) |
|
|
7.287 |
|
|
(1 |
%) |
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP Financial Measures (1) |
|
|
|
|
|
|
|
|
|
||||||||
Revenues, as adjusted |
$ |
203.0 |
|
|
$ |
190.6 |
|
|
7 |
% |
|
$ |
200.2 |
|
|
1 |
% |
Operating expenses, as adjusted |
$ |
137.0 |
|
|
$ |
129.0 |
|
|
6 |
% |
|
$ |
143.8 |
|
|
(5 |
%) |
Operating income (loss), as adjusted |
$ |
66.0 |
|
|
$ |
61.6 |
|
|
7 |
% |
|
$ |
56.4 |
|
|
17 |
% |
Operating margin, as adjusted |
|
32.5 |
% |
|
|
32.3 |
% |
|
|
|
|
28.2 |
% |
|
|
||
Net income (loss) attributable to Virtus Investment Partners, Inc., as adjusted |
$ |
47.3 |
|
|
$ |
40.1 |
|
|
18 |
% |
|
$ |
39.4 |
|
|
20 |
% |
Earnings (loss) per share - diluted, as adjusted |
$ |
6.53 |
|
|
$ |
5.43 |
|
|
20 |
% |
|
$ |
5.41 |
|
|
21 |
% |
(1) See the information beginning on page 10 for reconciliations to the most directly comparable |
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Earnings Summary
The company presents
Assets Under Management and Asset Flows
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Three Months Ended |
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|
|
Three
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|
|||||||
|
6/30/2024 |
|
6/30/2023 |
|
Change |
|
3/31/2024 |
|
Change |
|||||
Ending total assets under management |
$ |
173.6 |
|
|
$ |
168.3 |
|
|
|
$ |
179.3 |
|
|
( |
Average total assets under management |
$ |
175.2 |
|
|
$ |
163.0 |
|
|
|
$ |
173.4 |
|
|
|
Total sales |
$ |
6.1 |
|
|
$ |
7.6 |
|
( |
|
$ |
7.6 |
|
|
( |
Net flows |
$ |
(2.6 |
) |
|
$ |
— |
|
N/M |
|
$ |
(1.2 |
) |
|
|
N/M - Not Meaningful |
||||||||||||||
Total assets under management of
Total sales of
Net flows of
GAAP Results
Operating income of
Net income attributable to Virtus Investment Partners, Inc. of
The effective tax rate of
Non-GAAP Results
Revenues, as adjusted, of
Employment expenses, as adjusted, of
Operating income, as adjusted, of
Net income attributable to Virtus Investment Partners, Inc., as adjusted, per diluted share was
The effective tax rate, as adjusted, of
Select Balance Sheet Items (Unaudited)
|
||||||||||||||
|
As of |
|
|
|
As of |
|
|
|||||||
|
6/30/2024 |
|
6/30/2023 |
|
Change |
|
3/31/2024 |
|
Change |
|||||
Cash and cash equivalents |
$ |
183.0 |
|
$ |
201.5 |
|
(9 |
%) |
|
$ |
123.9 |
|
48 |
% |
Gross debt (1) |
$ |
252.4 |
|
$ |
300.2 |
|
(16 |
%) |
|
$ |
258.1 |
|
(2 |
%) |
Contingent consideration (2) |
$ |
63.4 |
|
$ |
94.4 |
|
(33 |
%) |
|
$ |
66.7 |
|
(5 |
%) |
Redeemable noncontrolling interests (3) |
$ |
84.7 |
|
$ |
87.6 |
|
(3 |
%) |
|
$ |
80.0 |
|
6 |
% |
Total equity exc. noncontrolling interests |
$ |
868.7 |
|
$ |
851.5 |
|
2 |
% |
|
$ |
871.7 |
|
— |
% |
Other Metrics |
|
|
|
|
|
|
|
|
|
|||||
Working capital (4) |
$ |
143.0 |
|
$ |
162.0 |
|
(12 |
%) |
|
$ |
123.4 |
|
16 |
% |
Net debt (cash) (5) |
$ |
69.4 |
|
$ |
98.7 |
|
(30 |
%) |
|
$ |
134.2 |
|
(48 |
%) |
(1) |
Excludes deferred financing costs of |
|
(2) | Represents estimated revenue participation and contingent payments |
|
(3) |
Excludes redeemable noncontrolling interests of consolidated investment products of |
|
(4) | Defined as cash and cash equivalents plus accounts receivable, net, and deferred compensation related investments less accrued compensation and benefits excluding affiliate minority interests, accounts payable and accrued liabilities, dividends payable, debt principal payments due over next 12 months and revenue participation amounts earned as of the balance sheet date and due within 12 months. As of March 31, 2024, minority interest liabilities accounted for as accrued compensation were removed from the definition of working capital and prior periods have been adjusted to conform to this definition. |
|
(5) | Defined as gross debt less cash and cash equivalents in accordance with the company's credit agreement |
Working capital of
During the quarter, the company repurchased 55,099 shares for
Gross debt at June 30, 2024 was
Conference Call and Investor Presentation
Management will host an investor conference call and webcast on Friday, July 26, 2024, at 10 a.m. Eastern to discuss these financial results and related matters. The presentation that will accompany the conference call is available in the Investor Relations section of virtus.com. A replay of the call will be available in the Investor Relations section for at least one year. We routinely post important information for investors on the Investor Relations section of our website and may use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. We may also use social media channels to communicate with our investors and the public about our company, our products and other matters, and those communications could be deemed to be material information. The information contained on, or that may be accessed through, our website or social media channels are not incorporated by reference into, and are not a part of, this document.
About Virtus Investment Partners, Inc.
Virtus Investment Partners (NYSE: VRTS) is a distinctive partnership of boutique investment managers singularly committed to the long-term success of individual and institutional investors. We provide investment management products and services from our affiliated managers, each with a distinct investment style and autonomous investment process, as well as select subadvisers. Investment solutions are available across multiple disciplines and product types to meet a wide array of investor needs. Additional information about our firm, investment partners, and strategies is available at virtus.com.
|
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|
Three Months Ended |
|
|
|
Three
|
|
|
|
Six Months Ended |
|
|
|||||||||||||||||
|
6/30/2024 |
|
6/30/2023 |
|
Change |
|
3/31/2024 |
|
Change |
|
6/30/2024 |
|
6/30/2023 |
|
Change |
|||||||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Investment management fees |
$ |
191,652 |
|
|
$ |
179,979 |
|
|
6 |
% |
|
$ |
188,360 |
|
|
2 |
% |
|
$ |
380,012 |
|
|
$ |
344,457 |
|
|
10 |
% |
Distribution and service fees |
|
13,410 |
|
|
|
14,132 |
|
|
(5 |
%) |
|
|
14,030 |
|
|
(4 |
%) |
|
|
27,440 |
|
|
|
28,285 |
|
|
(3 |
%) |
Administration and shareholder service fees |
|
18,308 |
|
|
|
18,240 |
|
|
— |
% |
|
|
18,678 |
|
|
(2 |
%) |
|
|
36,986 |
|
|
|
36,599 |
|
|
1 |
% |
Other income and fees |
|
1,014 |
|
|
|
1,185 |
|
|
(14 |
%) |
|
|
974 |
|
|
4 |
% |
|
|
1,988 |
|
|
|
2,069 |
|
|
(4 |
%) |
Total revenues |
|
224,384 |
|
|
|
213,536 |
|
|
5 |
% |
|
|
222,042 |
|
|
1 |
% |
|
|
446,426 |
|
|
|
411,410 |
|
|
9 |
% |
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Employment expenses |
|
105,667 |
|
|
|
104,694 |
|
|
1 |
% |
|
|
115,163 |
|
|
(8 |
%) |
|
|
220,830 |
|
|
|
203,308 |
|
|
9 |
% |
Distribution and other asset-based expenses |
|
23,695 |
|
|
|
25,460 |
|
|
(7 |
%) |
|
|
24,348 |
|
|
(3 |
%) |
|
|
48,043 |
|
|
|
49,175 |
|
|
(2 |
%) |
Other operating expenses |
|
33,050 |
|
|
|
33,483 |
|
|
(1 |
%) |
|
|
31,375 |
|
|
5 |
% |
|
|
64,425 |
|
|
|
64,213 |
|
|
— |
% |
Operating expenses of consolidated investment products |
|
2,909 |
|
|
|
360 |
|
|
N/M |
|
|
|
690 |
|
|
322 |
% |
|
|
3,599 |
|
|
|
1,060 |
|
|
240 |
% |
Restructuring expense |
|
690 |
|
|
|
— |
|
|
N/M |
|
|
|
797 |
|
|
(13 |
%) |
|
|
1,487 |
|
|
|
— |
|
|
N/M |
|
Change in fair value of contingent consideration |
|
(3,300 |
) |
|
|
(6,800 |
) |
|
(51 |
%) |
|
|
— |
|
|
N/M |
|
|
|
(3,300 |
) |
|
|
(6,800 |
) |
|
(51 |
%) |
Depreciation expense |
|
2,270 |
|
|
|
1,485 |
|
|
53 |
% |
|
|
2,028 |
|
|
12 |
% |
|
|
4,298 |
|
|
|
2,630 |
|
|
63 |
% |
Amortization expense |
|
15,198 |
|
|
|
15,808 |
|
|
(4 |
%) |
|
|
15,335 |
|
|
(1 |
%) |
|
|
30,533 |
|
|
|
30,199 |
|
|
1 |
% |
Total operating expenses |
|
180,179 |
|
|
|
174,490 |
|
|
3 |
% |
|
|
189,736 |
|
|
(5 |
%) |
|
|
369,915 |
|
|
|
343,785 |
|
|
8 |
% |
Operating Income (Loss) |
|
44,205 |
|
|
|
39,046 |
|
|
13 |
% |
|
|
32,306 |
|
|
37 |
% |
|
|
76,511 |
|
|
|
67,625 |
|
|
13 |
% |
Other Income (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Realized and unrealized gain (loss) on investments, net |
|
(1,553 |
) |
|
|
1,717 |
|
|
N/M |
|
|
|
3,416 |
|
|
N/M |
|
|
|
1,863 |
|
|
|
4,387 |
|
|
(58 |
%) |
Realized and unrealized gain (loss) of consolidated investment products, net |
|
(12,936 |
) |
|
|
(4,436 |
) |
|
192 |
% |
|
|
1,535 |
|
|
N/M |
|
|
|
(11,401 |
) |
|
|
(1,840 |
) |
|
N/M |
|
Other income (expense), net |
|
597 |
|
|
|
(847 |
) |
|
N/M |
|
|
|
550 |
|
|
9 |
% |
|
|
1,147 |
|
|
|
(1,190 |
) |
|
N/M |
|
Total other income (expense), net |
|
(13,892 |
) |
|
|
(3,566 |
) |
|
290 |
% |
|
|
5,501 |
|
|
N/M |
|
|
|
(8,391 |
) |
|
|
1,357 |
|
|
N/M |
|
Interest Income (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Interest expense |
|
(5,611 |
) |
|
|
(6,217 |
) |
|
(10 |
%) |
|
|
(5,681 |
) |
|
(1 |
%) |
|
|
(11,292 |
) |
|
|
(11,222 |
) |
|
1 |
% |
Interest and dividend income |
|
2,643 |
|
|
|
2,675 |
|
|
(1 |
%) |
|
|
3,469 |
|
|
(24 |
%) |
|
|
6,112 |
|
|
|
5,913 |
|
|
3 |
% |
Interest and dividend income of investments of consolidated investment products |
|
52,385 |
|
|
|
47,884 |
|
|
9 |
% |
|
|
51,115 |
|
|
2 |
% |
|
|
103,500 |
|
|
|
94,698 |
|
|
9 |
% |
Interest expense of consolidated investment products |
|
(41,960 |
) |
|
|
(38,732 |
) |
|
8 |
% |
|
|
(40,012 |
) |
|
5 |
% |
|
|
(81,972 |
) |
|
|
(73,935 |
) |
|
11 |
% |
Total interest income (expense), net |
|
7,457 |
|
|
|
5,610 |
|
|
33 |
% |
|
|
8,891 |
|
|
(16 |
%) |
|
|
16,348 |
|
|
|
15,454 |
|
|
6 |
% |
Income (Loss) Before Income Taxes |
|
37,770 |
|
|
|
41,090 |
|
|
(8 |
%) |
|
|
46,698 |
|
|
(19 |
%) |
|
|
84,468 |
|
|
|
84,436 |
|
|
— |
% |
Income tax expense (benefit) |
|
11,748 |
|
|
|
10,910 |
|
|
8 |
% |
|
|
8,831 |
|
|
33 |
% |
|
|
20,579 |
|
|
|
19,613 |
|
|
5 |
% |
Net Income (Loss) |
|
26,022 |
|
|
|
30,180 |
|
|
(14 |
%) |
|
|
37,867 |
|
|
(31 |
%) |
|
|
63,889 |
|
|
|
64,823 |
|
|
(1 |
%) |
Noncontrolling interests |
|
(8,408 |
) |
|
|
77 |
|
|
N/M |
|
|
|
(8,009 |
) |
|
5 |
% |
|
|
(16,417 |
) |
|
|
4,058 |
|
|
N/M |
|
Net Income (Loss) Attributable to Virtus Investment Partners, Inc. |
$ |
17,614 |
|
|
$ |
30,257 |
|
|
(42 |
%) |
|
$ |
29,858 |
|
|
(41 |
%) |
|
$ |
47,472 |
|
|
$ |
68,881 |
|
|
(31 |
%) |
Earnings (Loss) Per Share - Basic |
$ |
2.47 |
|
|
$ |
4.14 |
|
|
(40 |
%) |
|
$ |
4.19 |
|
|
(41 |
%) |
|
$ |
6.66 |
|
|
$ |
9.47 |
|
|
(30 |
%) |
Earnings (Loss) Per Share - Diluted |
$ |
2.43 |
|
|
$ |
4.10 |
|
|
(41 |
%) |
|
$ |
4.10 |
|
|
(41 |
%) |
|
$ |
6.54 |
|
|
$ |
9.31 |
|
|
(30 |
%) |
Cash Dividends Declared Per Common Share |
$ |
1.90 |
|
|
$ |
1.65 |
|
|
15 |
% |
|
$ |
1.90 |
|
|
— |
% |
|
$ |
3.80 |
|
|
$ |
3.30 |
|
|
15 |
% |
Weighted Average Shares Outstanding - Basic |
|
7,127 |
|
|
|
7,308 |
|
|
(2 |
%) |
|
|
7,119 |
|
|
— |
% |
|
|
7,123 |
|
|
|
7,277 |
|
|
(2 |
%) |
Weighted Average Shares Outstanding - Diluted |
|
7,242 |
|
|
|
7,385 |
|
|
(2 |
%) |
|
|
7,287 |
|
|
(1 |
%) |
|
|
7,264 |
|
|
|
7,398 |
|
|
(2 |
%) |
N/M - Not Meaningful |
||||||||||||||||||||||||||||
Assets Under Management - Product and Asset Class
|
||||||||||||||
|
Three Months Ended |
|||||||||||||
|
6/30/2023 |
|
9/30/2023 |
|
12/31/2023 |
|
3/31/2024 |
|
6/30/2024 |
|||||
By Product (period end): |
|
|
|
|
|
|
|
|
|
|||||
Open-End Funds (1) |
$ |
56,828 |
|
$ |
54,145 |
|
$ |
56,062 |
|
$ |
57,818 |
|
$ |
55,852 |
Closed-End Funds |
|
10,166 |
|
|
9,472 |
|
|
10,026 |
|
|
10,064 |
|
|
9,915 |
Retail Separate Accounts (2) |
|
38,992 |
|
|
38,665 |
|
|
43,202 |
|
|
46,816 |
|
|
45,672 |
Institutional Accounts (3) |
|
62,330 |
|
|
60,257 |
|
|
62,969 |
|
|
64,613 |
|
|
62,146 |
Total |
$ |
168,316 |
|
$ |
162,539 |
|
$ |
172,259 |
|
$ |
179,311 |
|
$ |
173,585 |
|
|
|
|
|
|
|
|
|
|
|||||
By Product (average) (4) |
|
|
|
|
|
|
|
|
|
|||||
Open-End Funds (1) |
$ |
56,120 |
|
$ |
56,511 |
|
$ |
54,132 |
|
$ |
56,828 |
|
$ |
56,692 |
Closed-End Funds |
|
10,224 |
|
|
10,001 |
|
|
9,591 |
|
|
9,862 |
|
|
9,894 |
Retail Separate Accounts |
|
37,397 |
|
|
38,992 |
|
|
38,665 |
|
|
43,202 |
|
|
46,816 |
Institutional Accounts (3) |
|
59,248 |
|
|
62,368 |
|
|
60,319 |
|
|
63,466 |
|
|
61,773 |
Total |
$ |
162,989 |
|
$ |
167,872 |
|
$ |
162,707 |
|
$ |
173,358 |
|
$ |
175,175 |
|
|
|
|
|
|
|
|
|
|
|||||
By Asset Class (period end): |
|
|
|
|
|
|
|
|
|
|||||
Equity |
$ |
91,211 |
|
$ |
87,984 |
|
$ |
96,703 |
|
$ |
103,501 |
|
$ |
99,224 |
Fixed Income |
|
38,361 |
|
|
37,352 |
|
|
37,192 |
|
|
37,037 |
|
|
36,970 |
Multi-Asset (5) |
|
20,914 |
|
|
19,937 |
|
|
21,411 |
|
|
21,975 |
|
|
21,060 |
Alternatives (6) |
|
17,830 |
|
|
17,266 |
|
|
16,953 |
|
|
16,798 |
|
|
16,331 |
Total |
$ |
168,316 |
|
$ |
162,539 |
|
$ |
172,259 |
|
$ |
179,311 |
|
$ |
173,585 |
Assets Under Management - Average Management Fees Earned (7)
|
|||||||||
|
Three Months Ended |
||||||||
|
6/30/2023 |
|
9/30/2023 |
|
12/31/2023 |
|
3/31/2024 |
|
6/30/2024 |
By Product: |
|
|
|
|
|
|
|
|
|
Open-End Funds (1) |
49.3 |
|
51.1 |
|
49.7 |
|
49.9 |
|
50.9 |
Closed-End Funds |
57.6 |
|
58.2 |
|
58.4 |
|
58.7 |
|
58.6 |
Retail Separate Accounts (2) |
44.1 |
|
43.3 |
|
43.3 |
|
43.9 |
|
43.3 |
Institutional Accounts (3)(8) |
31.6 |
|
30.3 |
|
33.2 |
|
30.8 |
|
30.7 |
All Products (8) |
42.2 |
|
42.0 |
|
42.6 |
|
41.9 |
|
42.2 |
(1) |
Represents assets under management of |
|
(2) | Includes investment models provided to managed account sponsors |
|
(3) | Represents assets under management of institutional separate and commingled accounts including structured products |
|
(4) | Averages are calculated as follows: |
|
- Funds - average daily or weekly balances |
||
- Retail Separate Accounts - prior-quarter ending balance |
||
- Institutional Accounts - average of month-end balances in quarter |
||
(5) | Consists of multi-asset offerings not included in equity, fixed income, and alternatives |
|
(6) | Consists of managed futures, event-driven, real estate securities, infrastructure, long/short, and other strategies |
|
(7) | Represents investment management fees, as adjusted, divided by average assets. Investment management fees, as adjusted, exclude the impact of consolidated investment products and are net of revenue-related adjustments. Revenue-related adjustments are based on specific agreements and reflect the portion of investment management fees passed through to third-party client intermediaries for services to investors in sponsored investment products |
|
(8) | Includes performance-related fees, in basis points, earned during the three months ended as follows: |
|
6/30/2023 |
|
9/30/2023 |
|
12/31/2023 |
|
3/31/2024 |
|
6/30/2024 |
||||||||||||||
Institutional Accounts |
0.2 |
|
|
|
0.4 |
|
|
|
2.2 |
|
|
|
0.3 |
|
|
|
0.3 |
||||||
All Products |
0.1 |
|
|
|
0.1 |
|
|
|
0.8 |
|
|
|
0.1 |
|
|
|
0.1 |
||||||
Assets Under Management - Asset Flows by Product
|
|||||||||||||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||||||||
|
6/30/2023 |
|
9/30/2023 |
|
12/31/2023 |
|
3/31/2024 |
|
6/30/2024 |
|
6/30/2023 |
|
6/30/2024 |
||||||||||||||
Open-End Funds (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Beginning balance |
$ |
53,865 |
|
|
$ |
56,828 |
|
|
$ |
54,145 |
|
|
$ |
56,062 |
|
|
$ |
57,818 |
|
|
$ |
53,000 |
|
|
$ |
56,062 |
|
Inflows |
|
2,550 |
|
|
|
2,687 |
|
|
|
2,940 |
|
|
|
3,476 |
|
|
|
2,777 |
|
|
|
5,561 |
|
|
|
6,253 |
|
Outflows |
|
(4,692 |
) |
|
|
(4,137 |
) |
|
|
(4,905 |
) |
|
|
(4,104 |
) |
|
|
(4,120 |
) |
|
|
(9,484 |
) |
|
|
(8,224 |
) |
Net flows |
|
(2,142 |
) |
|
|
(1,450 |
) |
|
|
(1,965 |
) |
|
|
(628 |
) |
|
|
(1,343 |
) |
|
|
(3,923 |
) |
|
|
(1,971 |
) |
Market performance |
|
2,163 |
|
|
|
(1,034 |
) |
|
|
4,260 |
|
|
|
2,560 |
|
|
|
(480 |
) |
|
|
4,934 |
|
|
|
2,080 |
|
Other (2) |
|
2,942 |
|
|
|
(199 |
) |
|
|
(378 |
) |
|
|
(176 |
) |
|
|
(143 |
) |
|
|
2,817 |
|
|
|
(319 |
) |
Ending balance |
$ |
56,828 |
|
|
$ |
54,145 |
|
|
$ |
56,062 |
|
|
$ |
57,818 |
|
|
$ |
55,852 |
|
|
$ |
56,828 |
|
|
$ |
55,852 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Closed-End Funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Beginning balance |
$ |
10,358 |
|
|
$ |
10,166 |
|
|
$ |
9,472 |
|
|
$ |
10,026 |
|
|
$ |
10,064 |
|
|
$ |
10,361 |
|
|
$ |
10,026 |
|
Inflows |
|
20 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
24 |
|
|
|
— |
|
Outflows |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(41 |
) |
|
|
— |
|
|
|
(41 |
) |
Net flows |
|
20 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(41 |
) |
|
|
24 |
|
|
|
(41 |
) |
Market performance |
|
(1 |
) |
|
|
(504 |
) |
|
|
753 |
|
|
|
239 |
|
|
|
83 |
|
|
|
204 |
|
|
|
322 |
|
Other (2) |
|
(211 |
) |
|
|
(190 |
) |
|
|
(199 |
) |
|
|
(201 |
) |
|
|
(191 |
) |
|
|
(423 |
) |
|
|
(392 |
) |
Ending balance |
$ |
10,166 |
|
|
$ |
9,472 |
|
|
$ |
10,026 |
|
|
$ |
10,064 |
|
|
$ |
9,915 |
|
|
$ |
10,166 |
|
|
$ |
9,915 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Retail Separate Accounts (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Beginning balance |
$ |
37,397 |
|
|
$ |
38,992 |
|
|
$ |
38,665 |
|
|
$ |
43,202 |
|
|
$ |
46,816 |
|
|
$ |
35,352 |
|
|
$ |
43,202 |
|
Inflows |
|
1,346 |
|
|
|
1,849 |
|
|
|
2,118 |
|
|
|
2,373 |
|
|
|
2,172 |
|
|
|
2,713 |
|
|
|
4,545 |
|
Outflows |
|
(1,434 |
) |
|
|
(1,524 |
) |
|
|
(1,726 |
) |
|
|
(1,695 |
) |
|
|
(1,688 |
) |
|
|
(2,722 |
) |
|
|
(3,383 |
) |
Net flows |
|
(88 |
) |
|
|
325 |
|
|
|
392 |
|
|
|
678 |
|
|
|
484 |
|
|
|
(9 |
) |
|
|
1,162 |
|
Market performance |
|
1,683 |
|
|
|
(652 |
) |
|
|
4,144 |
|
|
|
2,936 |
|
|
|
(1,631 |
) |
|
|
3,649 |
|
|
|
1,305 |
|
Other (2) |
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
3 |
|
|
|
— |
|
|
|
3 |
|
Ending balance |
$ |
38,992 |
|
|
$ |
38,665 |
|
|
$ |
43,202 |
|
|
$ |
46,816 |
|
|
$ |
45,672 |
|
|
$ |
38,992 |
|
|
$ |
45,672 |
|
Institutional Accounts (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Beginning balance |
$ |
53,229 |
|
|
$ |
62,330 |
|
|
$ |
60,257 |
|
|
$ |
62,969 |
|
|
$ |
64,613 |
|
|
$ |
50,663 |
|
|
$ |
62,969 |
|
Inflows |
|
3,660 |
|
|
|
1,274 |
|
|
|
1,179 |
|
|
|
1,734 |
|
|
|
1,188 |
|
|
|
5,512 |
|
|
|
2,922 |
|
Outflows |
|
(1,478 |
) |
|
|
(1,648 |
) |
|
|
(3,406 |
) |
|
|
(3,022 |
) |
|
|
(2,913 |
) |
|
|
(3,525 |
) |
|
|
(5,935 |
) |
Net flows |
|
2,182 |
|
|
|
(374 |
) |
|
|
(2,227 |
) |
|
|
(1,288 |
) |
|
|
(1,725 |
) |
|
|
1,987 |
|
|
|
(3,013 |
) |
Market performance |
|
2,440 |
|
|
|
(1,434 |
) |
|
|
5,165 |
|
|
|
3,001 |
|
|
|
(549 |
) |
|
|
5,346 |
|
|
|
2,452 |
|
Other (2) |
|
4,479 |
|
|
|
(265 |
) |
|
|
(226 |
) |
|
|
(69 |
) |
|
|
(193 |
) |
|
|
4,334 |
|
|
|
(262 |
) |
Ending balance |
$ |
62,330 |
|
|
$ |
60,257 |
|
|
$ |
62,969 |
|
|
$ |
64,613 |
|
|
$ |
62,146 |
|
|
$ |
62,330 |
|
|
$ |
62,146 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Beginning balance |
$ |
154,849 |
|
|
$ |
168,316 |
|
|
$ |
162,539 |
|
|
$ |
172,259 |
|
|
$ |
179,311 |
|
|
$ |
149,376 |
|
|
$ |
172,259 |
|
Inflows |
|
7,576 |
|
|
|
5,810 |
|
|
|
6,237 |
|
|
|
7,583 |
|
|
|
6,137 |
|
|
|
13,810 |
|
|
|
13,720 |
|
Outflows |
|
(7,604 |
) |
|
|
(7,309 |
) |
|
|
(10,037 |
) |
|
|
(8,821 |
) |
|
|
(8,762 |
) |
|
|
(15,731 |
) |
|
|
(17,583 |
) |
Net flows |
|
(28 |
) |
|
|
(1,499 |
) |
|
|
(3,800 |
) |
|
|
(1,238 |
) |
|
|
(2,625 |
) |
|
|
(1,921 |
) |
|
|
(3,863 |
) |
Market performance |
|
6,285 |
|
|
|
(3,624 |
) |
|
|
14,322 |
|
|
|
8,736 |
|
|
|
(2,577 |
) |
|
|
14,133 |
|
|
|
6,159 |
|
Other (2) |
|
7,210 |
|
|
|
(654 |
) |
|
|
(802 |
) |
|
|
(446 |
) |
|
|
(524 |
) |
|
|
6,728 |
|
|
|
(970 |
) |
Ending balance |
$ |
168,316 |
|
|
$ |
162,539 |
|
|
$ |
172,259 |
|
|
$ |
179,311 |
|
|
$ |
173,585 |
|
|
$ |
168,316 |
|
|
$ |
173,585 |
|
(1) |
Represents assets under management of |
|
(2) | Represents open-end and closed-end fund distributions net of reinvestments, the net change in assets from cash management strategies, and the impact of non-sales related activities such as asset acquisitions/(dispositions), seed capital investments/(withdrawals), current income or capital returned by structured products and the use of leverage |
|
(3) | Includes investment models provided to managed account sponsors |
|
(4) | Represents assets under management of institutional separate and commingled accounts including structured products |
|
Non-GAAP Information and Reconciliations
(in thousands except per share data)
The non-GAAP financial measures included in this release differ from financial measures determined in accordance with
The following are reconciliations and related notes of the most directly comparable
|
Three Months Ended |
||||||||||
Revenues |
6/30/2024 |
|
6/30/2023 |
|
3/31/2024 |
||||||
Total revenues, GAAP |
$ |
224,384 |
|
|
$ |
213,536 |
|
|
$ |
222,042 |
|
Consolidated investment products revenues (1) |
|
2,326 |
|
|
|
2,479 |
|
|
|
2,544 |
|
Investment management fees (2) |
|
(10,282 |
) |
|
|
(11,326 |
) |
|
|
(10,316 |
) |
Distribution and service fees (2) |
|
(13,413 |
) |
|
|
(14,134 |
) |
|
|
(14,032 |
) |
Total revenues, as adjusted |
$ |
203,015 |
|
|
$ |
190,555 |
|
|
$ |
200,238 |
|
Operating Expenses |
|
|
|
|
|
||||||
Total operating expenses, GAAP |
$ |
180,179 |
|
|
$ |
174,490 |
|
|
$ |
189,736 |
|
Consolidated investment products expenses (1) |
|
(2,909 |
) |
|
|
(360 |
) |
|
|
(690 |
) |
Distribution and other asset-based expenses (3) |
|
(23,695 |
) |
|
|
(25,460 |
) |
|
|
(24,348 |
) |
Amortization of intangible assets (4) |
|
(15,198 |
) |
|
|
(15,808 |
) |
|
|
(15,335 |
) |
Restructuring expense (5) |
|
(690 |
) |
|
|
— |
|
|
|
(797 |
) |
Deferred compensation and related investments (6) |
|
36 |
|
|
|
(747 |
) |
|
|
(1,249 |
) |
Acquisition and integration expenses (7) |
|
2,201 |
|
|
|
(3,165 |
) |
|
|
(1,042 |
) |
Other (8) |
|
(2,907 |
) |
|
|
49 |
|
|
|
(2,444 |
) |
Total operating expenses, as adjusted |
$ |
137,017 |
|
|
$ |
128,999 |
|
|
$ |
143,831 |
|
|
|
|
|
|
|
||||||
Operating Income (Loss) |
|
|
|
|
|
||||||
Operating income (loss), GAAP |
$ |
44,205 |
|
|
$ |
39,046 |
|
|
$ |
32,306 |
|
Consolidated investment products (earnings) losses (1) |
|
5,235 |
|
|
|
2,839 |
|
|
|
3,234 |
|
Amortization of intangible assets (4) |
|
15,198 |
|
|
|
15,808 |
|
|
|
15,335 |
|
Restructuring expense (5) |
|
690 |
|
|
|
— |
|
|
|
797 |
|
Deferred compensation and related investments (6) |
|
(36 |
) |
|
|
747 |
|
|
|
1,249 |
|
Acquisition and integration expenses (7) |
|
(2,201 |
) |
|
|
3,165 |
|
|
|
1,042 |
|
Other (8) |
|
2,907 |
|
|
|
(49 |
) |
|
|
2,444 |
|
Operating income (loss), as adjusted |
$ |
65,998 |
|
|
$ |
61,556 |
|
|
$ |
56,407 |
|
|
|
|
|
|
|
||||||
Operating margin, GAAP |
|
19.7 |
% |
|
|
18.3 |
% |
|
|
14.5 |
% |
Operating margin, as adjusted |
|
32.5 |
% |
|
|
32.3 |
% |
|
|
28.2 |
% |
Three Months Ended |
|||||||||||
Income (Loss) Before Taxes |
6/30/2024 |
|
6/30/2023 |
|
3/31/2024 |
||||||
Income (loss) before taxes, GAAP |
$ |
37,770 |
|
|
$ |
41,090 |
|
|
$ |
46,698 |
|
Consolidated investment products (earnings) losses (1) |
|
268 |
|
|
|
283 |
|
|
|
(1,819 |
) |
Amortization of intangible assets (4) |
|
15,198 |
|
|
|
15,808 |
|
|
|
15,335 |
|
Restructuring expense (5) |
|
690 |
|
|
|
— |
|
|
|
797 |
|
Deferred compensation and related investments (6) |
|
545 |
|
|
|
(596 |
) |
|
|
(400 |
) |
Acquisition and integration expenses (7) |
|
(2,201 |
) |
|
|
3,165 |
|
|
|
1,042 |
|
Other (8) |
|
2,907 |
|
|
|
(49 |
) |
|
|
2,444 |
|
Seed capital and CLO investments (gains) losses (9) |
|
12,175 |
|
|
|
(1,057 |
) |
|
|
(7,333 |
) |
Income (loss) before taxes, as adjusted |
$ |
67,352 |
|
|
$ |
58,644 |
|
|
$ |
56,764 |
|
Income Tax Expense (Benefit) |
|
|
|
|
|
||||||
Income tax expense (benefit), GAAP |
$ |
11,748 |
|
|
$ |
10,910 |
|
|
$ |
8,831 |
|
Tax impact of: |
|
|
|
|
|
||||||
Amortization of intangible assets (4) |
|
3,973 |
|
|
|
4,334 |
|
|
|
3,993 |
|
Restructuring expense (5) |
|
180 |
|
|
|
— |
|
|
|
208 |
|
Deferred compensation and related investments (6) |
|
142 |
|
|
|
(163 |
) |
|
|
(104 |
) |
Acquisition and integration expenses (7) |
|
(575 |
) |
|
|
868 |
|
|
|
271 |
|
Other (8) |
|
1,415 |
|
|
|
628 |
|
|
|
1,056 |
|
Seed capital and CLO investments (gains) losses (9) |
|
725 |
|
|
|
(497 |
) |
|
|
529 |
|
Income tax expense (benefit), as adjusted |
$ |
17,608 |
|
|
$ |
16,080 |
|
|
$ |
14,784 |
|
|
|
|
|
|
|
||||||
Effective tax rate, GAAPA |
|
31.1 |
% |
|
|
26.6 |
% |
|
|
18.9 |
% |
Effective tax rate, as adjustedB |
|
26.1 |
% |
|
|
27.4 |
% |
|
|
26.0 |
% |
A Reflects income tax expense (benefit), GAAP, divided by income (loss) before taxes, GAAP |
|||||||||||
B Reflects income tax expense (benefit), as adjusted, divided by income (loss) before taxes, as adjusted |
|||||||||||
Net Income (Loss) Attributable to Virtus Investment Partners, Inc. |
|
|
|
|
|||||||
Net income (loss) attributable to Virtus Investment Partners, Inc. |
$ |
17,614 |
|
|
$ |
30,257 |
|
|
$ |
29,858 |
|
Amortization of intangible assets, net of tax (4) |
|
10,738 |
|
|
|
10,775 |
|
|
|
10,863 |
|
Restructuring expense, net of tax (5) |
|
510 |
|
|
|
— |
|
|
|
589 |
|
Deferred compensation and related investments (6) |
|
403 |
|
|
|
(433 |
) |
|
|
(296 |
) |
Acquisition and integration expenses, net of tax (7) |
|
(1,626 |
) |
|
|
2,297 |
|
|
|
771 |
|
Other, net of tax (8) |
|
8,164 |
|
|
|
(2,253 |
) |
|
|
5,476 |
|
Seed capital and CLO investments (gains) losses, net of tax (9) |
|
11,450 |
|
|
|
(560 |
) |
|
|
(7,862 |
) |
Net income (loss) attributable to Virtus Investment Partners, Inc., as adjusted |
$ |
47,253 |
|
|
$ |
40,083 |
|
|
$ |
39,399 |
|
Weighted average shares outstanding - diluted |
|
7,242 |
|
|
|
7,385 |
|
|
|
7,287 |
|
|
|
|
|
|
|
||||||
Earnings (loss) per share - diluted, GAAP |
$ |
2.43 |
|
|
$ |
4.10 |
|
|
$ |
4.10 |
|
Earnings (loss) per share - diluted, as adjusted |
$ |
6.53 |
|
|
$ |
5.43 |
|
|
$ |
5.41 |
|
|
Three Months Ended |
|||||||
Administration and Shareholder Services Fees |
6/30/2024 |
|
6/30/2023 |
|
3/31/2024 |
|||
Administration and shareholder service fees, GAAP |
$ |
18,308 |
|
$ |
18,240 |
|
$ |
18,678 |
Consolidated investment products fees (1) |
|
23 |
|
|
33 |
|
|
39 |
Administration and shareholder service fees, as adjusted |
$ |
18,331 |
|
$ |
18,273 |
|
$ |
18,717 |
|
|
|
|
|
|
Employment Expenses |
|
|
|
|
|
||||||
Employment expenses, GAAP |
$ |
105,667 |
|
|
$ |
104,694 |
|
|
$ |
115,163 |
|
Deferred compensation and related investments (6) |
|
36 |
|
|
|
(747 |
) |
|
|
(1,249 |
) |
Acquisition and integration expenses (7) |
|
(1,099 |
) |
|
|
(8,183 |
) |
|
|
(1,042 |
) |
Other (8) |
|
(1,134 |
) |
|
|
49 |
|
|
|
(1,262 |
) |
Employment expenses, as adjusted |
$ |
103,470 |
|
|
$ |
95,813 |
|
|
$ |
111,610 |
|
Other Operating Expenses |
|
|
|
|
|
||||||
Other operating expenses, GAAP |
$ |
33,050 |
|
|
$ |
33,483 |
|
|
$ |
31,375 |
|
Acquisition and integration expenses (7) |
|
— |
|
|
|
(1,782 |
) |
|
|
— |
|
Other (8) |
|
(1,773 |
) |
|
|
— |
|
|
|
(1,182 |
) |
Other operating expenses, as adjusted |
$ |
31,277 |
|
|
$ |
31,701 |
|
|
$ |
30,193 |
|
Total Other Income (Expense), Net |
|
|
|
|
|
||||||
Total other income (expense), net GAAP |
$ |
(13,892 |
) |
|
$ |
(3,566 |
) |
|
$ |
5,501 |
|
Consolidated investment products (1) |
|
1,492 |
|
|
|
4,868 |
|
|
|
4,127 |
|
Deferred compensation and related investments (6) |
|
611 |
|
|
|
(1,312 |
) |
|
|
(1,623 |
) |
Seed capital and CLO investments (gains) losses (9) |
|
12,175 |
|
|
|
(1,057 |
) |
|
|
(7,333 |
) |
Total other income (expense), net as adjusted |
$ |
386 |
|
|
$ |
(1,067 |
) |
|
$ |
672 |
|
Interest and Dividend Income |
|
|
|
|
|
||||||
Interest and dividend income, GAAP |
$ |
2,643 |
|
|
$ |
2,675 |
|
|
$ |
3,469 |
|
Consolidated investment products (1) |
|
3,966 |
|
|
|
1,728 |
|
|
|
1,923 |
|
Deferred compensation and related investments (6) |
|
(30 |
) |
|
|
(31 |
) |
|
|
(26 |
) |
Interest and dividend income, as adjusted |
$ |
6,579 |
|
|
$ |
4,372 |
|
|
$ |
5,366 |
|
Total Noncontrolling Interests |
|
|
|
|
|
||||||
Total noncontrolling interests, GAAP |
$ |
(8,408 |
) |
|
$ |
77 |
|
|
$ |
(8,009 |
) |
Consolidated investment products (1) |
|
(268 |
) |
|
|
(283 |
) |
|
|
1,819 |
|
Amortization of intangible assets (4) |
|
(487 |
) |
|
|
(699 |
) |
|
|
(479 |
) |
Other (8) |
|
6,672 |
|
|
|
(1,576 |
) |
|
|
4,088 |
|
Total noncontrolling interests, as adjusted |
$ |
(2,491 |
) |
|
$ |
(2,481 |
) |
|
$ |
(2,581 |
) |
Notes to Reconciliations: |
||
Reclassifications: |
||
1. | Consolidated investment products - Revenues and expenses generated by operating activities of mutual funds and CLOs that are consolidated in the financial statements. Management believes that excluding these operating activities to reflect net revenues and expenses of the company prior to the consolidation of these products is consistent with the approach of reflecting its operating results from managing third-party client assets. |
|
Other Adjustments: |
||
Revenue Related |
||
2. | Investment management/Distribution and service fees - Each of these revenue line items is reduced to exclude fees passed through to third-party client intermediaries who own the retail client relationship and are responsible for distributing company sponsored investment products and servicing the client. The amount of fees fluctuates each period, based on a predetermined percentage of the value of assets under management, and varies based on the type of investment product. The specific adjustments are as follows: |
|
Investment management fees - Based on specific agreements, the portion of investment management fees passed-through to third-party intermediaries for services to investors in sponsored investment products. |
||
Distribution and service fees - Based on distinct arrangements, fees collected by the company then passed-through to third-party client intermediaries for services to investors in sponsored investment products. The adjustment represents all of the company's distribution and service fees that are recorded as a separate line item on the condensed consolidated statements of operations. |
||
Management believes that making these adjustments aids in comparing the company's operating results with other asset management firms that do not utilize third-party client intermediaries. |
||
Expense Related |
||
3. |
Distribution and other asset-based expenses - Primarily payments to third-party client intermediaries for providing services to investors in sponsored investment products. Management believes that making this adjustment aids in comparing the company’s operating results with other asset management firms that do not utilize third-party client intermediaries. |
|
4. | Amortization of intangible assets - Non-cash amortization expense or impairment expense, if any, attributable to acquisition-related intangible assets, including any portion that is allocated to noncontrolling interests. Management believes that making this adjustment aids in comparing the company’s operating results with other asset management firms that have not engaged in acquisitions. |
|
5. | Restructuring expense - Certain non-recurring expenses associated with restructuring the business, including lease abandonment-related expenses and severance costs associated with staff reductions that are not reflective of ongoing earnings generation of the business. |
|
6. | Deferred compensation and related investments - Compensation expense, gains and losses (realized and unrealized), and interest and dividend income related to market performance of deferred compensation and related balance sheet investments. Market performance of deferred compensation plans and related investments can vary significantly from period to period. Management believes that making this adjustment aids in comparing the Company's operating results with prior periods. | |
7. | Acquisition and integration expenses - Expenses that are directly related to acquisition and integration activities. Acquisition expenses include certain transaction related employment expenses, transaction closing costs, change in fair value of contingent consideration, certain professional fees, and financing fees. Integration expenses include costs incurred that are directly attributable to combining businesses, including compensation, restructuring and severance charges, professional fees, consulting fees, and other expenses. Management believes that making these adjustments aids in comparing the company’s operating results with other asset management firms that have not engaged in acquisitions. |
|
Components of Acquisition and Integration Expenses for the respective periods are shown below: |
|
Three Months Ended |
|||||||||
Acquisition and Integration Expenses |
6/30/2024 |
|
6/30/2023 |
|
3/31/2024 |
|||||
Employment expenses |
$ |
1,099 |
|
|
$ |
8,183 |
|
|
$ |
1,042 |
Other operating expenses |
|
— |
|
|
|
1,782 |
|
|
|
— |
Change in fair value of contingent consideration |
|
(3,300 |
) |
|
|
(6,800 |
) |
|
|
— |
Total Acquisition and Integration Expenses |
$ |
(2,201 |
) |
|
$ |
3,165 |
|
|
$ |
1,042 |
8. | Other - Certain expenses that are not reflective of the ongoing earnings generation of the business. Employment expenses and noncontrolling interests are adjusted for fair value measurements of affiliate minority interests. Other operating expenses are adjusted for non-capitalized debt issuance costs and amortization of lease termination fees. Interest expense is adjusted to remove gains on early extinguishment of debt and the write-off of previously capitalized costs associated with the modification of debt. Income tax expense (benefit) items are adjusted for uncertain tax positions, changes in tax law, valuation allowances, and other unusual or infrequent items not related to current operating results to reflect a normalized effective rate. Management believes that making these adjustments aids in comparing the company’s operating results with prior periods. |
|
Components of Other for the respective periods are shown below: |
|
Three Months Ended |
||||||||||
Other |
6/30/2024 |
|
6/30/2023 |
|
3/31/2024 |
||||||
Employment expense fair value adjustments |
$ |
1,134 |
|
|
$ |
(49 |
) |
|
$ |
1,262 |
|
Amortization of lease termination fees |
|
1,773 |
|
|
|
— |
|
|
|
1,182 |
|
Tax impact of adjustments |
|
(760 |
) |
|
|
13 |
|
|
|
(637 |
) |
Other discrete tax adjustments |
|
(655 |
) |
|
|
(641 |
) |
|
|
(419 |
) |
Affiliate minority interest fair value adjustments |
|
6,672 |
|
|
|
(1,576 |
) |
|
|
4,088 |
|
Total Other |
$ |
8,164 |
|
|
$ |
(2,253 |
) |
|
$ |
5,476 |
|
Seed Capital and CLO Related |
||
9. | Seed capital and CLO investments (gains) losses - Gains and losses (realized and unrealized) of seed capital and CLO investments. Gains and losses (realized and unrealized) generated by investments in seed capital and CLO investments can vary significantly from period to period and do not reflect the company’s operating results from providing investment management and related services. Management believes that making this adjustment aids in comparing the company’s operating results with prior periods and with other asset management firms that do not have meaningful seed capital and CLO investments. |
Definitions:
Revenues, as adjusted, comprise the fee revenues paid by clients for investment management and related services. Revenues, as adjusted, for purposes of calculating net income attributable to Virtus Investment Partners, Inc., as adjusted, differ from
Operating expenses, as adjusted, is calculated to reflect expenses from ongoing continuing operations. Operating expenses, as adjusted, for purposes of calculating net income attributable to Virtus Investment Partners, Inc., as adjusted, differ from
Operating margin, as adjusted, is a metric used to evaluate efficiency represented by operating income, as adjusted, divided by revenues, as adjusted.
Earnings (loss) per share, as adjusted, represent net income (loss) attributable to Virtus Investment Partners, Inc., as adjusted, divided by weighted average shares outstanding, as adjusted, on either a basic or diluted basis.
Forward-Looking Information
This press release contains statements that are, or may be considered to be, forward-looking statements. All statements that are not historical facts, including statements about our beliefs or expectations, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may be identified by such forward-looking terminology as “expect,” “estimate,” “intent,” “plan,” “intend,” “believe,” “anticipate,” “may,” “will,” “should,” “could,” “continue,” “project,” “opportunity,” “predict,” “would,” “potential,” “future,” “forecast,” “guarantee,” “assume,” “likely,” “target” or similar statements or variations of such terms.
Our forward-looking statements are based on a series of expectations, assumptions and projections about the company and the markets in which we operate, are not guarantees of future results or performance, and involve substantial risks and uncertainty including assumptions and projections concerning our assets under management, net asset inflows and outflows, operating cash flows, business plans, and ability to borrow, for all future periods. All forward-looking statements are as of the date of this release only. The company can give no assurance that such expectations or forward-looking statements will prove to be correct. Actual results may differ materially.
Our business and our forward- looking statements involve substantial known and unknown risks and uncertainties, including those discussed under "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our 2023 Annual Report on Form 10-K, as supplemented by our periodic filings with the Securities and Exchange Commission (the "SEC"), as well as the following risks and uncertainties resulting from: (i) any reduction in our assets under management; (ii) inability to achieve expected benefits of strategic transactions; (iii) withdrawal, renegotiation or termination of investment management agreements; (iv) damage to our reputation; (v) inability to satisfy financial debt covenants and required payments; (vi) inability to attract and retain key personnel; (vii) challenges from competition; (viii) adverse developments related to unaffiliated subadvisers; (ix) negative changes in key distribution relationships; (x) interruptions, breaches, or failures of technology systems; (xi) loss on our investments; (xii) lack of sufficient capital on satisfactory terms; (xiii) adverse regulatory and legal developments; (xiv) failure to comply with investment guidelines or other contractual requirements; (xv) adverse civil litigation, government investigations, or proceedings; (xvi) unfavorable changes in tax laws or limitations; (xvii) inability to make common stock dividend payments; (xviii) impediments from certain corporate governance provisions; (xix) losses or costs not covered by insurance; (xx) impairment of goodwill or other intangible assets; and other risks and uncertainties. Any occurrence of, or any material adverse change in, one or more risk factors or risks and uncertainties referred to above, in our 2023 Annual Report on Form 10-K and our other periodic reports filed with the SEC could materially and adversely affect our operations, financial results, cash flows, prospects and liquidity.
Certain other factors that may impact our continuing operations, prospects, financial results and liquidity, or that may cause actual results to differ from such forward-looking statements, are discussed or included in the company’s periodic reports filed with the SEC and are available on our website at virtus.com under “Investor Relations.” You are urged to carefully consider all such factors.
The company does not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections, or other circumstances occurring after the date of this release, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. If there are any future public statements or disclosures by us that modify or affect any of the forward-looking statements contained in or accompanying this release, such statements or disclosures will be deemed to modify or supersede such statements in this release.
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Investor Relations Contact
Sean Rourke
(860) 263-4709
sean.rourke@Virtus.com
Source: Virtus Investment Partners
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