EX-99.1 2 gblex991020322.htm EXHIBIT 99.1, DATED FEBRUARY 3, 2022
Exhibit 99.1


For Immediate Release:
Contact:
Howard Green
 
 
SVP of Corporate Development
(914) 921-7729
 
 
 
 
 
For further information please visit
 
 
www.gabelli.com

GAMCO Investors, Inc. Reports Results for the Year Ended December 31, 2021

-
GAAP earnings of $2.73 per share compared to $2.20 per share in 2020
-
Net income for 2021 was $73.2 million, an increase of $14.5 million
-
December 31, 2021 AUM was $35.0 billion versus $32.6 billion at prior year end
Greenwich, Connecticut, February 3, 2022 – GAMCO Investors, Inc. (“GAMCO”) (NYSE: GBL) today reported its operating results for the year ended December 31, 2021.
Full Year Results

Financial Highlights (Unaudited)
              
 
  
Year Ended
    
(In thousands, except per share data)
  
December 31, 2021
    
December 31, 2020
    
 
              
U.S. GAAP Basis
              
Revenues
  
$
301,126
    
$
259,726
    
Operating income
    
117,420
      
99,609
    
Net income
    
73,199
      
58,693
    
Diluted earnings per common share
  
$
2.73
    
$
2.20
    
Weighted average diluted shares outstanding
      26,809        26,680    
Shares outstanding
    
26,728
      
27,503
    
 
                  
Assets Under Management
                  
AUM - end of period (in millions)
  
$
34,982
    
$
32,561
    
AUM - average (in millions)
    
34,272
      
30,992
    

Giving Back to Society – (Y)our “S” in ESG

We are committed to allowing our shareholders to choose the recipients of our charitable contributions.  The advantage of our shareholder designated charitable contribution (“SDCC”) program is that shareholders designate the 501(c)(3) organizations rather than leaving the selection of charities to the management via a corporate foundation.

The Board of Directors of GAMCO approved a $0.50 per share SDCC for all shareholders of record on December 21, 2021, doubling the prior year’s $0.25 per share designation under the program. We estimate this will total approximately $11.3 million. Since the inception of GAMCO’s SDCC program in 2013, and counting this current amount, shareholders will have designated charitable gifts of $48 million to approximately 350 charitable organizations. When combined with our other charitable donations, this boosts our total contributions to approximately $74 million since our initial public offering in February 1999.

This charitable program underscores our commitment to giving back to society, which emanated in part from our management of socially responsible portfolios since 1987.

New Climate and Environmental Initiative

In February 2021, we launched Love Our Planet & People (NYSE: LOPP), an actively managed, semi-transparent ETF with an emphasis on the environment, the “E” in ESG. The Fund’s adviser agreed to waive the Fund’s expenses, including management fee, on the first $100 million in net assets for one year from commencement of the Fund’s operations.

Results for the Fourth Quarter

Revenues

-
Revenues for the fourth quarter of 2021 were $81.7 million compared with $71.3 million in the fourth quarter of 2020, including incentive fees of $9.2 million in the fourth quarter of 2021 versus $8.5 million in 2020.

-
Investment advisory fees were $75.1 million in the fourth quarter of 2021 versus $64.9 million in the year ago quarter:

-
Mutual Fund revenues were $46.1 million compared to $40.3 million in the fourth quarter of 2020.

-
Institutional and Private Wealth Management revenues, which are generally billed on portfolio values at the beginning of the quarter, were $17.8 million compared to $15.0 million in last year’s fourth quarter.

-
SICAV revenues were $2.0 million for the fourth quarter of 2021 as compared to $1.1 million in the year ago quarter.

-
Distribution fees from our equity mutual funds and other income were $6.6 million during the fourth quarter of 2021 and $6.4 million in the prior year quarter.

Operating Income

Operating income was $29.4 million versus $23.7 million in the fourth quarter of 2020. Waivers of CEO compensation bolstered operating income by $7.6 million versus $4.7 million in the fourth quarter of 2020.

Non-Operating Income

Mark-to-market investment losses were $1.9 million in the fourth quarter of 2021 versus gains of $4.5 million in the fourth quarter of 2020. Interest expense was $0.8 million in the fourth quarter of 2021 versus $0.6 million in the fourth quarter of 2020. The fourth quarter of 2021 included an expense for the SDCC of $11.3 million.

Income Taxes

GAMCO’s effective tax rate for the quarter ended December 31, 2021 was 28.8% versus 28.4% for the quarter ended December 31, 2020.

Full Year Financials

Revenues for 2021 were $301.1 million compared with $259.7 million in 2020.

For 2021, operating income of $117.4 million was bolstered by a $20.8 million benefit from CEO compensation waivers. Operating income for 2020 was $99.6 million, enhanced by the $14.7 million benefit from CEO compensation waivers.

For the year, mark-to-market investment gains were $8.7 million higher at $0.8 million in 2021 versus losses of $7.9 million in 2020. Interest expense was higher at $2.9 million for 2021 and $2.6 million for 2020. There were charges for the SDCC programs of $11.3 million and $5.4 million in 2021 and 2020, respectively.

GAMCO’s effective tax rate for 2021 was 29.6% versus 29.9% for 2020.

Management Market Commentary

Last year was a good one for the economy and for markets.  This year has begun with added volatility as the market is influenced by a set of dynamics we frame as the “Six I’s”: Inflation, Interest Rates, Infrastructure, Income Taxes, International/Internal Relations and Infection.  Ultimately, we expect the economy and earnings growth to remain strong.  The normalization of financial conditions should be positive for fundamental driven investing in general and our style of Value investing in particular.

For a more detailed outlook, please see our annual client letter on our website:
https://gab-pr.s3.us-east-2.amazonaws.com/2021GAMCOAnnualLetter.pdf

Business Highlights

-
The Gabelli Dividend & Income Trust (NYSE: GDV) completed the offering of $150 million of 4.25% Series K Cumulative Preferred Shares.

-
The Gabelli Healthcare & Wellness Trust (NYSE: GRX) completed a private placement of $40 million of 4% Series E Cumulative Preferred Shares.

-
The Gabelli Equity Trust (NYSE: GAB) has an initial closing of a private placement of 4.25% Series M Cumulative Preferred Shares.

-
The Gabelli Global Small and Mid Cap Value Trust (NYSE: GGZ) raised $40 million via a private placement of 4% Series B Cumulative Preferred Shares.

-
On November 1st and 2nd, we hosted our 45th Annual Automotive Conference, “Batteries Included,” in person in Las Vegas and virtually. The symposium featured presentations from senior management of leading automotive and electric vehicle suppliers, with an emphasis on the battery ecosystem, technological innovation, and industry dynamics.

-
We hosted our Third Annual Healthcare Symposium in conjunction with Columbia Business School on November 19th.

Subsequent to the end of the 4th quarter:

-
On January 3, 2022, the third Gabelli actively managed semi-transparent ETF was launched.  The ETF will focus on firms that design, develop, support, or manufacture automation equipment, related technology, software, or processes. The Fund’s adviser is absorbing expenses including management fees on the first $25 million of net assets for one year from the commencement of the Fund’s operations.

Balance Sheet

GAMCO ended the quarter with cash and investments of $159.4 million and $51.0 million of subordinated debt maturing on June 15, 2023.

Return to Shareholders

During the quarter, GAMCO doubled its regular quarterly dividend to $0.04 per share and purchased 353,333 shares for $8.7 million at an average price of $24.62 per share. From January 1, 2022 to February 3, 2022, the Company has purchased 56,336 shares at an average price of $23.46 per share.

On February 3 2022, GAMCO’s board of directors declared a regular quarterly dividend of $0.04 per share, which is payable on March 29, 2022 to class A and class B shareholders of record on March 15, 2022.

About GAMCO Investors, Inc.

GAMCO is known for its research-driven approach to equity investing. GAMCO conducts its investment advisory business principally through two subsidiaries: GAMCO Asset Management Inc. (approximately 1,400 institutional and private wealth separate accounts, principally in the U.S.) and Gabelli Funds, LLC (24 open-end funds, 14 closed-end funds, 3 actively managed semi-transparent ETFs, and a SICAV). GAMCO serves a broad client base including institutions, intermediaries, offshore investors, private wealth, and direct retail investors. In recent years, GAMCO has successfully integrated new teams of RIAs by providing attractive compensation arrangements and paying finder’s fees.

GAMCO offers a wide range of solutions for clients across Value, Growth Equity, ESG, Convertibles, actively managed semi-transparent ETFs, sector-focused strategies including Gold and Utilities, Merger Arbitrage, and Fixed Income. In 1977, GAMCO launched its flagship All Cap Value strategy, Gabelli Value, and in 1986 launched its mutual fund business.

Table I: Assets Under Management and Fund Flows - 4th Quarter 2021 (in millions)
                    
 
                          
Fund
              
 
                    
Market
    
distributions,
              
 
  
September 30,
                
appreciation/
    
net of
    
December 31,
    
December 31,
  
 
  
2021
    
Inflows
    
Outflows
    
(depreciation)
    
reinvestments
    
2021
    
2020
  
Equities:
                                          
Mutual Funds
  
$
9,856
    
$
280
    
$
(473
)
  
$
617
    
$
(31
)
  
$
10,249
    
$
9,541
  
Closed-end Funds
    
8,238
      
298
      
(4
)
    
281
      
(157
)
    
8,656
      
7,773
  
Institutional & PWM (a)
    
13,051
      
126
      
(456
)
    
776
      
-
      
13,497
      
12,371
  
SICAV
    
728
      
134
      
(29
)
    
(2
)
    
-
      
831
      
474
  
Total Equities
    
31,873
      
838
      
(962
)
    
1,672
      
(188
)
    
33,233
      
30,159
  
 
                                                        
100% U.S. Treasury Fund
    
1,634
      
868
      
(785
)
    
-
      
-
      
1,717
      
2,370
  
Institutional & PWM Fixed Income
    
32
      
-
      
-
      
-
      
-
      
32
      
32
  
Total Treasuries & Fixed Income
    
1,666
      
868
      
(785
)
    
-
      
-
      
1,749
      
2,402
  
Total Assets Under Management
  
$
33,539
    
$
1,706
    
$
(1,747
)
  
$
1,672
    
$
(188
)
  
$
34,982
    
$
32,561
  
 
                                                        
(a) Includes $178, $183, and $166 of 100% U.S. Treasury Fund AUM at September 30, 2021, December 31, 2021, and December 31, 2020, respectively.
    
 
                                                        

Table II
                        
GAMCO INVESTORS, INC.
  
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
  
(In thousands, except per share data)
  
 
                        
 
  
Three Months Ended
    
Twelve Months Ended
  
 
  
December 31,
    
December 31,
  
 
  
2021
    
2020
    
2021
    
2020
  
 
                        
Investment advisory and incentive fees
  
$
75,029
    
$
64,991
    
$
274,531
    
$
233,628
  
Distribution fees and other income
    
6,638
      
6,357
      
26,595
      
26,098
  
Total revenues
    
81,667
      
71,348
      
301,126
      
259,726
  
 
                                
Compensation costs (a) (b)
    
34,241
      
29,859
      
118,186
      
102,347
  
Management fee expense (b)
    
-
      
1,651
      
5,552
      
5,376
  
Distribution costs
    
7,753
      
7,216
      
30,276
      
28,474
  
Other operating expenses
    
10,232
      
8,938
      
29,692
      
23,920
  
Total expenses
    
52,226
      
47,664
      
183,706
      
160,117
  
 
                                
Operating income
    
29,441
      
23,684
      
117,420
      
99,609
  
 
                                
Investment gain/(loss)
    
(1,916
)
    
4,492
      
819
      
(7,869
)
Interest expense
    
(818
)
    
(635
)
    
(2,919
)
    
(2,620
)
Shareholder-designated contribution
    
(11,279
)
    
-
      
(11,279
)
    
(5,436
)
Non-operating gain/(loss)
    
(14,013
)
    
3,857
      
(13,379
)
    
(15,925
)
 
                                
Income before income taxes
    
15,428
      
27,541
      
104,041
      
83,684
  
Provision for income taxes
    
4,441
      
7,818
      
30,842
      
24,991
  
Net income
  
$
10,987
    
$
19,723
    
$
73,199
    
$
58,693
  
 
                                
Net income:
                                
Basic
  
$
0.42
    
$
0.75
    
$
2.79
    
$
2.21
  
Diluted
  
$
0.41
    
$
0.74
    
$
2.73
    
$
2.20
  
 
                                
Weighted average shares outstanding:
                                
Basic
    
26,142
      
26,439
      
26,267
      
26,571
  
Diluted
    
26,654
      
26,680
      
26,809
      
26,680
  
 
                                
Actual shares outstanding (c)
    
26,728
      
27,503
      
26,728
      
27,503
  
 
                                
(a) For the twelve months ended December 31, 2020, compensation costs were reduced by $1,409
          
due to indexing of deferred compensation to the GBL stock price.
                          
(b) The CEO waiver reduced compensation costs by $6,741, $3,821, $17,118, and $12,367, respectively
          
and management fee expense by $869, $885, $3,696, and $2,293, respectively.
                  
(c) Includes 411 and 1,080 RSA shares at December 31, 2021 and 2020, respectively.
                  


Table III
            
GAMCO INVESTORS, INC.
  
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
  
(In thousands)
  
 
            
 
  
December 31,
    
December 31,
  
 
  
2021
    
2020
  
 
            
ASSETS
            
Cash, cash equivalents, and U.S. Treasury Bills
  
$
142,027
    
$
98,313
  
Investments in securities
    
32,344
      
25,845
  
Other receivables
    
35,269
      
34,054
  
Deferred tax asset and income tax receivable
    
6,707
      
9,462
  
Other assets
    
15,651
      
17,728
  
  Total assets
  
$
231,998
    
$
185,402
  
 
                
LIABILITIES AND STOCKHOLDERS' EQUITY
                
Payable for investments purchased
  
$
14,990
    
$
-
  
Securities sold, not yet purchased
    
-
      
799
  
Income taxes payable
    
315
      
3,910
  
Compensation payable
    
21,049
      
21,543
  
Accrued expenses and other liabilities
    
50,774
      
48,024
  
Sub-total
    
87,128
      
74,276
  
5.875% Senior Notes (due June 1, 2021)
    
-
      
24,215
  
Subordinated Notes (due June 15, 2023)
    
50,990
      
-
  
Total liabilities
    
138,118
      
98,491
  
 
                
Stockholders' equity (a)
    
93,880
      
86,911
  
 
                
Total liabilities and stockholders' equity
  
$
231,998
    
$
185,402
  
 
                
(a) Shares outstanding of 26,728, and 27,503, respectively.
                


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Our disclosure and analysis in this press release, which do not present historical information, contain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements convey our current expectations or forecasts of future events. You can identify these statements because they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning. They also appear in any discussion of future operating or financial performance. In particular, these include statements relating to future actions, future performance of our products, expenses, the outcome of any legal proceedings, and financial results. Although we believe that we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know about our business and operations, the economy, the effects of the Tax Cuts and Jobs Act, and other conditions, there can be no assurance that our actual results will not differ materially from what we expect or believe. Therefore, you should proceed with caution in relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance.

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 may cause our actual results to differ from our expectations include risks associated with the duration and scope of the ongoing coronavirus pandemic resulting in volatile market conditions, 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, a general downturn in the economy that negatively impacts our operations, and the ongoing impacts of the Tax Cuts and Jobs Act with respect to tax rates and the non-deductibility of certain portions of named executive officer compensation. We also direct your attention to the more specific discussions of these and other risks, uncertainties and other important factors contained in our Annual Report on Form 10-K 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.

Gabelli Funds, LLC is a registered investment adviser with the Securities and Exchange Commission and is a wholly owned subsidiary of GAMCO Investors, Inc. (NYSE: GBL).
Investors should carefully consider the investment objectives, risks, charges and expenses of the Fund before investing. The prospectus, which contains more complete information about this and other matters, should be read carefully before investing. To obtain a prospectus, please call 800 GABELLI or visit www.gabelli.com