QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
(Exact name of Registrant as specified in its charter)
|
||
|
|
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
One Corporate Center, Rye, NY 10580
|
|
(
|
(Address of principle executive offices)(Zip Code)
|
|
Registrant’s telephone number, including area code
|
|
|
|
N/A
|
(Former name, former address and former fiscal year, if changed since last report)
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
||
|
|
|
Large accelerated filer ☐
|
|
|
Non-accelerated filer ☐
|
Smaller reporting company
|
Emerging growth company
|
Class
|
Outstanding at April 30, 2022
|
|
Class A Common Stock, $0.001 par value
|
(Including 406,200 restricted stock awards)
|
|
Class B Common Stock, $0.001 par value
|
|
|
In addition, there are 375,800 phantom restricted stock awards outstanding as of April 30, 2022.
|
INDEX
|
||
PART I.
|
FINANCIAL INFORMATION
|
Page
|
Item 1.
|
Unaudited Condensed Consolidated Financial Statements
|
|
Condensed Consolidated Statements of Financial Condition as of March 31, 2022 (unaudited) and December 31, 2021
|
3
|
|
Condensed Consolidated Statements of Income for the three months ended March 31, 2022 and 2021 (unaudited)
|
4
|
|
Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2022 and 2021 (unaudited)
|
5
|
|
Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2022 and 2021 (unaudited)
|
6
|
|
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021 (unaudited)
|
7
|
|
Notes to Condensed Consolidated Financial Statements (unaudited)
|
8
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
18
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
26
|
Item 4.
|
Controls and Procedures
|
27
|
PART II.
|
OTHER INFORMATION *
|
|
Item 1.
|
Legal Proceedings
|
27
|
Item 1A.
|
Risk Factors
|
27
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
28
|
Item 6.
|
Exhibits
|
28
|
Signature
|
28
|
March 31,
|
December 31, | |||||||
2022
|
2021
|
|||||||
ASSETS
|
||||||||
Cash and cash equivalents (a)
|
$
|
|
$
|
|
||||
Investments in equity securities, at fair value
|
|
|
||||||
Investment advisory fees receivable
|
|
|
||||||
Deferred tax asset and income tax receivable
|
|
|
||||||
Finance lease
|
|
|
||||||
Receivable from affiliates
|
|
|
||||||
Goodwill and identifiable intangible assets
|
|
|
||||||
Receivable from brokers
|
|
|
||||||
Other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Compensation payable
|
$
|
|
$
|
|
||||
Lease liability obligations
|
|
|
||||||
Income taxes payable
|
|
|
||||||
Payable to affiliates
|
|
|
||||||
Payable for investments purchased
|
|
|
||||||
Accrued expenses and other liabilities
|
|
|
||||||
Sub-total
|
|
|
||||||
Subordinated Notes (net of issuance costs of $
|
|
|
||||||
Total liabilities
|
|
|
||||||
Commitments and contingencies (Note 10)
|
||||||||
Stockholders' Equity
|
||||||||
Preferred stock, $
|
|
|
||||||
Class A Common Stock, $
|
|
|
||||||
Class B Common Stock, $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Retained earnings
|
|
|
||||||
Accumulated other comprehensive loss
|
(
|
)
|
(
|
)
|
||||
Treasury stock, at cost (
|
(
|
)
|
(
|
)
|
||||
Total stockholders' equity
|
|
|
||||||
Total liabilities and stockholders' equity
|
$
|
|
$
|
|
(a) |
Includes U.S. Treasury Bills with maturities of
three months or less when purchased of $
|
Three Months Ended
|
||||||||
|
March 31,
|
|||||||
|
2022
|
2021
|
||||||
Revenues
|
||||||||
Investment advisory and incentive fees
|
$
|
|
$
|
|
||||
Distribution fees and other income
|
|
|
||||||
Total revenues
|
|
|
||||||
Expenses
|
||||||||
Compensation
|
|
|
||||||
Management fee
|
|
|
||||||
Distribution costs
|
|
|
||||||
Other operating expenses
|
|
|
||||||
Total expenses
|
|
|
||||||
|
||||||||
Operating income
|
|
|
||||||
Non-operating income / (loss)
|
||||||||
Gain / (loss) from investments, net
|
(
|
)
|
|
|||||
Interest and dividend income
|
|
|
||||||
Interest expense
|
(
|
)
|
(
|
)
|
||||
Total non-operating income / (loss)
|
(
|
)
|
|
|||||
Income before income taxes
|
|
|
||||||
Provision for income taxes
|
|
|
||||||
Net income
|
$
|
|
$
|
|
||||
|
||||||||
Earnings per share:
|
||||||||
Basic
|
$
|
|
$
|
|
||||
Diluted
|
$
|
|
$
|
|
||||
Weighted average shares outstanding:
|
||||||||
Basic
|
|
|
||||||
Diluted
|
|
|
Three Months Ended
|
||||||||
|
March 31,
|
|||||||
|
2022
|
2021
|
||||||
Net income
|
$
|
|
$
|
|
||||
Other comprehensive income / (loss):
|
||||||||
Foreign currency translation gain / (loss)
|
(
|
)
|
|
|||||
Total comprehensive income
|
$
|
|
$
|
|
Accumulated
|
||||||||||||||||||||||||
Additional
|
Other
|
|||||||||||||||||||||||
Common
|
Paid-in
|
Retained
|
Comprehensive
|
Treasury
|
||||||||||||||||||||
Stock
|
Capital
|
Earnings
|
Loss
|
Stock
|
Total
|
|||||||||||||||||||
Balance at December 31, 2021
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
||||||||||
Net income
|
|
|
|
|
|
|
||||||||||||||||||
Foreign currency translation
|
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||
Dividends declared ($
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||
Stock based compensation expense
|
|
|
|
|
|
|
||||||||||||||||||
Purchase of treasury stock
|
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Balance at March 31, 2022
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
Accumulated
|
||||||||||||||||||||||||
Additional
|
Other
|
|||||||||||||||||||||||
Common
|
Paid-in
|
Retained
|
Comprehensive
|
Treasury
|
||||||||||||||||||||
Stock
|
Capital
|
Earnings
|
Loss
|
Stock
|
Total
|
|||||||||||||||||||
Balance at December 31, 2020
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
||||||||||
Net income
|
|
|
|
|
|
|
||||||||||||||||||
Foreign currency translation
|
|
|
|
|
|
|
||||||||||||||||||
Dividends declared ($
|
|
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||
Stock based compensation expense
|
|
|
|
|
|
|
||||||||||||||||||
Purchase of treasury stock
|
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Balance at March 31, 2021
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2022 |
2021
|
||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
|
|
||||||
Accretion of discounts and amortization of premiums
|
(
|
)
|
(
|
)
|
||||
Stock based compensation expense
|
|
|
||||||
Deferred income taxes
|
(
|
)
|
(
|
)
|
||||
Foreign currency translation income / (loss)
|
(
|
)
|
|
|||||
Unrealized (gains) / losses on securities
|
|
(
|
)
|
|||||
Net realized losses on securities
|
|
|
||||||
(Increase) decrease in assets:
|
||||||||
Investments in securities
|
(
|
)
|
(
|
)
|
||||
Investment advisory fees receivable
|
|
|
||||||
Income taxes receivable
|
|
|
||||||
Receivable from affiliates
|
(
|
)
|
|
|||||
Receivable from brokers
|
|
|
||||||
Other assets
|
(
|
)
|
(
|
)
|
||||
Increase (decrease) in liabilities:
|
||||||||
Compensation payable
|
(
|
)
|
|
|||||
Income taxes payable
|
|
|
||||||
Payable to affiliates
|
(
|
)
|
(
|
)
|
||||
Payable for investments purchased
|
(
|
)
|
|
|||||
Accrued expenses and other liabilities
|
(
|
)
|
|
|||||
Total adjustments
|
(
|
)
|
|
|||||
Net cash provided by operating activities
|
|
|
||||||
Cash flows from investing activities:
|
||||||||
Purchases of securities hled for investment
|
(
|
)
|
(
|
)
|
||||
Proceeds from sales and maturities of securities
|
|
|
||||||
Net cash provided by/ (used in) investing activities
|
(
|
)
|
|
|||||
Cash flows from financing activities:
|
||||||||
Dividends paid
|
(
|
)
|
(
|
)
|
||||
Purchase of treasury stock
|
(
|
)
|
(
|
)
|
||||
Repayment of principal portion of lease liability
|
(
|
)
|
(
|
)
|
||||
Repurchase of 2-year puttable note due 6/15/23
|
(
|
)
|
|
|||||
Net cash used in financing activities
|
(
|
)
|
(
|
)
|
||||
Effect of exchange rates on cash and cash equivalents
|
|
(
|
)
|
|||||
Net increase in cash and cash equivalents
|
|
|
||||||
Cash and cash equivalents, beginning of period
|
|
|
||||||
Cash and cash equivalents, end of period
|
$
|
|
$
|
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid for interest
|
$
|
|
$
|
|
||||
Cash paid for taxes
|
$
|
|
$
|
|
Three Months Ended March 31,
|
||||||||
2022
|
2021
|
|||||||
Investment advisory and incentive fees:
|
||||||||
Open-end Funds
|
$
|
|
$
|
|
||||
Closed-end Funds
|
|
|
||||||
Sub-advisory accounts
|
||||||||
Institutional & Private Wealth Management
|
|
|
||||||
SICAVs
|
|
|
||||||
Performance-based
|
|
|
||||||
Total investment advisory and incentive fees
|
|
|
||||||
Distribution fees and other income
|
|
|
||||||
Total revenues
|
$
|
|
$
|
|
March 31,
2022
|
December 31, 2021
|
|||||||||||||||
Cost
|
Estimated
Fair Value
|
Cost
|
Estimated
Fair Value
|
|||||||||||||
Investments in equity securities:
|
||||||||||||||||
Common stocks
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Actively managed semi-transparent ETFs
|
||||||||||||||||
Open-end funds
|
|
|
|
|
||||||||||||
Closed-end funds
|
|
|
|
|
||||||||||||
Other
|
|
|
|
|
||||||||||||
Total investments in equity securities
|
$
|
|
$
|
|
$
|
|
$
|
|
-
|
Level 1 - the valuation methodology utilizes quoted prices (unadjusted) in active markets for identical assets or liabilities
at the reporting date. Level 1 assets include cash equivalents, government obligations, mutual funds, closed-end funds, and listed equities.
|
-
|
Level 2 - the valuation methodology utilizes inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities that are not active, and inputs other
than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly-quoted intervals.
|
-
|
Level 3 - the valuation methodology utilizes unobservable inputs for the asset or liability, and includes situations where
there is little, if any, market activity for the asset or liability.
|
Assets
|
Quoted Prices in Active
Markets for Identical
Assets (Level 1)
|
Significant Other
Observable
Inputs (Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
Balance as of
March 31,
2022
|
||||||||||||
Cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Investments in securities:
|
||||||||||||||||
Common stocks
|
|
|
|
|
||||||||||||
Actively managed semi-transparent ETFs
|
|
|
|
|
||||||||||||
Open-end funds
|
|
|
|
|
||||||||||||
Closed-end funds
|
|
|
|
|
||||||||||||
Other
|
|
|
|
|
||||||||||||
Total investments in securities
|
|
|
|
|
||||||||||||
Total assets at fair value
|
$
|
|
$
|
|
$
|
|
$
|
|
Assets
|
Quoted Prices in Active
Markets for Identical
Assets (Level 1)
|
Significant Other
Observable
Inputs (Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
Balance as of
December 31,
2021
|
||||||||||||
Cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Investments in securities:
|
||||||||||||||||
Common stocks
|
|
|
|
|
||||||||||||
Actively managed semi-transparent ETFs
|
||||||||||||||||
Open-end funds
|
|
|
|
|
||||||||||||
Closed-end funds
|
|
|
|
|
||||||||||||
Other
|
||||||||||||||||
Total investments in securities
|
|
|
|
|
||||||||||||
Total assets at fair value
|
$
|
|
$
|
|
$
|
|
$
|
|
March 31, 2022
|
December 31, 2021
|
|||||||||||||||
Carrying
Value
|
Fair Value
Level 2
|
Carrying
Value
|
Fair Value
Level 2
|
|||||||||||||
Subordinated Notes
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
|
Three Months Ended
March 31,
|
|||||||
2022
|
2021
|
|||||||
Basic:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Weighted average shares outstanding
|
|
|
||||||
Basic net income per share
|
$
|
|
$
|
|
||||
|
||||||||
Diluted:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
|
||||||||
Weighted average shares outstanding
|
|
|
||||||
Restricted stock awards
|
|
|
||||||
Total
|
|
|
||||||
|
||||||||
Diluted net income per share
|
$
|
|
$
|
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2022
|
2021
|
|||||||
Finance lease cost - interest expense
|
$
|
|
$
|
|
||||
Finance lease cost - amortization of right-of-use asset
|
|
|
||||||
Operating lease cost
|
|
|
||||||
Sublease income
|
(
|
)
|
(
|
)
|
||||
Total lease cost
|
$
|
|
$
|
|
||||
Other information:
|
||||||||
Cash paid for amounts included in the measurement of lease liabilities
|
||||||||
Operating cash flows from finance lease
|
$
|
|
$
|
|
||||
Operating cash flows from operating leases
|
|
|
||||||
Financing cash flows from finance lease
|
|
|
||||||
Total cash paid for amounts included in the measurement of lease liabilities
|
$
|
|
$
|
|
||||
Right-of-use assets obtained in exchange for new operating lease liabilities
|
$
|
|
$
|
|
||||
Weighted average remaining lease term—finance lease (years)
|
|
|
||||||
Weighted average remaining lease term—operating leases (years)
|
|
|
||||||
Weighted average discount rate—finance lease
|
|
%
|
|
%
|
||||
Weighted average discount rate—operating leases
|
|
%
|
|
%
|
Year ending December 31,
|
Finance Leases
|
Operating Leases
|
Total Leases
|
|||||||||
2022 (excluding the three months ended March 31, 2022)
|
$
|
|
$
|
|
$
|
|
||||||
2023
|
|
|
|
|||||||||
2024
|
|
|
|
|||||||||
2025
|
|
|
|
|||||||||
2026
|
|
|
|
|||||||||
Thereafter
|
|
|
|
|||||||||
Total lease payments
|
$
|
|
$
|
|
$
|
|
||||||
Less imputed interest
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Total lease liabilities
|
$
|
|
$
|
|
$
|
|
Three Months Ended March 31,
|
||||||||
2022
|
2021
|
|||||||
Equities:
|
||||||||
Mutual Funds
|
||||||||
Beginning of period assets
|
$
|
10,249
|
$
|
9,541
|
||||
Inflows
|
326
|
285
|
||||||
Outflows
|
(396
|
)
|
(541
|
)
|
||||
Net inflows (outflows)
|
(70
|
)
|
(256
|
)
|
||||
Market appreciation (depreciation)
|
(351
|
)
|
544
|
|||||
Fund distributions, net of reinvestment
|
(4
|
)
|
(4
|
)
|
||||
Total increase (decrease)
|
(425
|
)
|
284
|
|||||
End of period assets
|
$
|
9,824
|
$
|
9,825
|
||||
Percentage of total assets under management
|
29.4
|
%
|
29.4
|
%
|
||||
Average assets under management
|
$
|
9,719
|
$
|
9,750
|
||||
Closed-end Funds
|
||||||||
Beginning of period assets
|
$
|
8,656
|
$
|
7,773
|
||||
Inflows
|
36
|
-
|
||||||
Outflows
|
(245
|
)
|
(17
|
)
|
||||
Net inflows (outflows)
|
(209
|
)
|
(17
|
)
|
||||
Market appreciation (depreciation)
|
(211
|
)
|
464
|
|||||
Fund distributions, net of reinvestment
|
(139
|
)
|
(120
|
)
|
||||
Total increase (decrease)
|
(559
|
)
|
327
|
|||||
End of period assets
|
$
|
8,097
|
$
|
8,100
|
||||
Percentage of total assets under management
|
24.3
|
%
|
24.2
|
%
|
||||
Average assets under management
|
$
|
8,173
|
$
|
8,000
|
||||
Institutional & PWM
|
||||||||
Beginning of period assets
|
$
|
13,497
|
$
|
12,371
|
||||
Inflows
|
127
|
127
|
||||||
Outflows
|
(387
|
)
|
(830
|
)
|
||||
Net inflows (outflows)
|
(260
|
)
|
(703
|
)
|
||||
Market appreciation (depreciation)
|
(563
|
)
|
1,477
|
|||||
Total increase (decrease)
|
(823
|
)
|
774
|
|||||
End of period assets (a)
|
$
|
12,674
|
$
|
13,145
|
||||
Percentage of total assets under management
|
38.0
|
%
|
39.3
|
%
|
||||
Average assets under management
|
$
|
12,828
|
$
|
12,734
|
||||
SICAV
|
||||||||
Beginning of period assets
|
$
|
831
|
$
|
474
|
||||
Inflows
|
196
|
190
|
||||||
Outflows
|
(133
|
)
|
(78
|
)
|
||||
Net inflows (outflows)
|
63
|
112
|
||||||
Market appreciation (depreciation)
|
(15
|
)
|
(4
|
)
|
||||
Total increase (decrease)
|
48
|
108
|
||||||
End of period assets
|
$
|
879
|
$
|
582
|
||||
Percentage of total assets under management
|
2.6
|
%
|
1.7
|
%
|
||||
Average assets under management
|
$
|
852
|
$
|
525
|
(a)
|
Includes $185 million and $180 million of 100% U.S. Treasury Fund AUM at March 31,
2022 and 2021, respectively.
|
Three Months Ended March 31,
|
||||||||
2022
|
2021
|
|||||||
Total Equities
|
||||||||
Beginning of period assets
|
$
|
33,233
|
$
|
30,159
|
||||
Inflows
|
685
|
602
|
||||||
Outflows
|
(1,161
|
)
|
(1,466
|
)
|
||||
Net inflows (outflows)
|
(476
|
)
|
(864
|
)
|
||||
Market appreciation (depreciation)
|
(1,140
|
)
|
2,481
|
|||||
Fund distributions, net of reinvestment
|
(143
|
)
|
(124
|
)
|
||||
Total increase (decrease)
|
(1,759
|
)
|
1,493
|
|||||
End of period assets
|
$
|
31,474
|
$
|
31,652
|
||||
Percentage of total assets under management
|
94.3
|
%
|
94.7
|
%
|
||||
Average assets under management
|
$
|
31,572
|
$
|
31,009
|
||||
Fixed Income:
|
||||||||
100% U.S. Treasury fund
|
||||||||
Beginning of period assets
|
$
|
1,717
|
$
|
2,370
|
||||
Inflows
|
967
|
664
|
||||||
Outflows
|
(812
|
)
|
(1,309
|
)
|
||||
Net inflows (outflows)
|
155
|
(645
|
)
|
|||||
Market appreciation (depreciation)
|
-
|
-
|
||||||
Total increase (decrease)
|
155
|
(645
|
)
|
|||||
End of period assets
|
$
|
1,872
|
$
|
1,725
|
||||
Percentage of total assets under management
|
5.6
|
%
|
5.2
|
%
|
||||
Average assets under management
|
$
|
1,682
|
$
|
2,339
|
||||
Institutional & PWM
|
||||||||
Beginning of period assets
|
$
|
32
|
$
|
32
|
||||
Inflows
|
-
|
-
|
||||||
Outflows
|
-
|
-
|
||||||
Net inflows (outflows)
|
-
|
-
|
||||||
Market appreciation (depreciation)
|
-
|
-
|
||||||
Total increase (decrease)
|
-
|
-
|
||||||
End of period assets
|
$
|
32
|
$
|
32
|
||||
Percentage of total assets under management
|
0.1
|
%
|
0.1
|
%
|
||||
Average assets under management
|
$
|
32
|
$
|
32
|
||||
Total Fixed Income
|
||||||||
Beginning of period assets
|
$
|
1,749
|
$
|
2,402
|
||||
Inflows
|
967
|
664
|
||||||
Outflows
|
(812
|
)
|
(1,309
|
)
|
||||
Net inflows (outflows)
|
155
|
(645
|
)
|
|||||
Market appreciation (depreciation)
|
-
|
-
|
||||||
Total increase (decrease)
|
155
|
(645
|
)
|
|||||
End of period assets
|
$
|
1,904
|
$
|
1,757
|
||||
Percentage of total assets under management
|
5.7
|
%
|
5.3
|
%
|
||||
Average assets under management
|
$
|
1,714
|
$
|
2,371
|
||||
Total AUM
|
||||||||
Beginning of period assets
|
$
|
34,982
|
$
|
32,561
|
||||
Inflows
|
1,652
|
1,266
|
||||||
Outflows
|
(1,973
|
)
|
(2,775
|
)
|
||||
Net inflows (outflows)
|
(321
|
)
|
(1,509
|
)
|
||||
Market appreciation (depreciation)
|
(1,140
|
)
|
2,481
|
|||||
Fund distributions, net of reinvestment
|
(143
|
)
|
(124
|
)
|
||||
Total increase (decrease)
|
(1,604
|
)
|
848
|
|||||
End of period assets
|
$
|
33,378
|
$
|
33,409
|
||||
Average assets under management
|
$
|
33,286
|
$
|
33,380
|
Funds
|
Institutional &
PWM
|
SICAV
|
Total
|
|||||||||||||
Value
|
$
|
10,338 |
$
|
12,012 |
$
|
16 |
$
|
22,366 | ||||||||
Utilities
|
2,662 | - | - | 2,662 | ||||||||||||
Growth
|
1,251 | 356 | - | 1,607 | ||||||||||||
Sector-focused
|
730 | - | - | 730 | ||||||||||||
100% U.S. Treasury Fund | 1,872 | - | - | 1,872 | ||||||||||||
Gold and Natural Resources
|
1,337 | 73 | - | 1,410 | ||||||||||||
Event-driven
|
1,082 | 194 | 855 | 2,131 | ||||||||||||
Convertibles
|
520 | 72 | 8 | 600 | ||||||||||||
Total
|
$
|
19,792
|
$
|
12,707
|
$
|
879
|
$
|
33,378
|
Three Months Ended
March 31,
|
||||||||
|
2022
|
2021
|
||||||
Revenues
|
||||||||
Investment advisory and incentive fees
|
$
|
63,762
|
$
|
61,470
|
||||
Distribution fees and other income
|
5,861
|
6,458
|
||||||
Total revenues
|
69,623
|
67,928
|
||||||
Expenses
|
||||||||
Compensation
|
29,058
|
30,682
|
||||||
Management fee
|
1,312
|
2,517
|
||||||
Distribution costs
|
7,145
|
6,971
|
||||||
Other operating expenses
|
6,147
|
5,304
|
||||||
Total expenses
|
43,662
|
45,474
|
||||||
Operating income
|
25,961
|
22,454
|
||||||
Non-operating income / (loss)
|
||||||||
Gain / (loss) from investments, net
|
(2,822
|
)
|
680
|
|||||
Interest and dividend income
|
228
|
185
|
||||||
Interest expense
|
(816
|
)
|
(662
|
)
|
||||
Total non-operating income / (loss)
|
(3,410
|
)
|
203
|
|||||
Income before income taxes
|
22,551
|
22,657
|
||||||
Provision for income taxes
|
5,097
|
6,707
|
||||||
Net income
|
$
|
17,454
|
$
|
15,950
|
||||
|
||||||||
Earnings per share:
|
||||||||
Basic
|
$
|
0.67
|
$
|
0.60
|
||||
Diluted
|
$
|
0.66
|
$
|
0.59
|
Three Months Ended
March 31,
|
||||||||
2022
|
2021
|
|||||||
Revenues, U.S. GAAP basis
|
$
|
69,623
|
$
|
67,928
|
||||
Operating income, U.S. GAAP basis
|
25,961
|
22,454
|
||||||
Add back: management fee expense
|
1,312
|
2,517
|
||||||
Operating income before management fee
|
$
|
27,273
|
$
|
24,971
|
||||
Operating margin
|
37.3
|
%
|
33.1
|
%
|
||||
Operating margin before management fee
|
39.2
|
%
|
36.8
|
%
|
|
Three months ended
March 31,
|
|||||||
|
2022
|
2021
|
||||||
Cash flows provided by/(used in) activities :
|
||||||||
Operating activities
|
$
|
14,692
|
$
|
36,665
|
||||
Investing activities
|
(8,014
|
)
|
51,283
|
|||||
Financing activities
|
(4,339
|
)
|
(2,403
|
)
|
||||
Net increase in cash and cash equivalents from activities
|
2,339
|
85,545
|
||||||
Effect of exchange rates on cash and cash equivalents
|
3
|
(2
|
)
|
|||||
Net increase in cash and cash equivalents
|
2,342
|
85,543
|
||||||
Cash and cash equivalents, beginning of period
|
142,027
|
33,325
|
||||||
Cash and cash equivalents, end of period
|
$
|
144,369
|
$
|
118,868
|
||||
Short-term investments in U.S. Treasury Bills
|
-
|
9,999
|
||||||
Cash, cash equivalents, short-term investments in U.S Treasury Bills, and investments in fixed
maturity securities
|
$
|
144,369
|
$
|
128,867
|
(unaudited)
|
Fair Value
|
Fair Value
assuming
10% decrease in
equity prices
|
Fair Value
assuming
10% increase in
equity prices
|
|||||||||
At March 31, 2022:
|
||||||||||||
Equity price sensitive investments, at fair value
|
$
|
37,982
|
$
|
34,184
|
$
|
41,780
|
||||||
At December 31, 2021:
|
||||||||||||
Equity price sensitive investments, at fair value
|
$
|
32,344
|
$
|
29,110
|
$
|
35,578
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Total Number of | Maximum | |||||||||||||||
Total | Shares Purchased as | Number of Shares | ||||||||||||||
Number of | Average | Part of Publicly | That May Yet Be | |||||||||||||
Shares | Price Paid Per | Announced Plans | Purchased Under | |||||||||||||
Period
|
Purchased (1)
|
Share
|
or Programs (1)
|
the Plans or Programs
|
||||||||||||
1/01/22 - 1/31/22
|
46,136
|
$
|
23.72
|
46,136
|
2,127,801
|
|||||||||||
2/01/22 - 2/28/22
|
63,575
|
21.87
|
63,575
|
2,064,226
|
||||||||||||
3/01/22 - 3/31/22
|
31,184
|
21.27
|
31,184
|
2,033,042
|
||||||||||||
Totals
|
140,895
|
$
|
22.34
|
140,895
|
(1)
|
On trade date basis.
|
ITEM 6.
|
EXHIBITS
|
Certification of CEO pursuant to Rule 13a-14(a).
|
Certification of PFO pursuant to Rule 13a-14(a).
|
Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
Certification of PFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
|
101.INS
|
Inline XBRL Instance Document
|
|
|
|
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
|
By: /s/ Kieran Caterina
|
||
|
Name: Kieran Caterina | |
|
Title: Principal Financial Officer | |
|
||
|
Date: May 6, 2022 |
1.
|
I have reviewed this report on Form 10-Q of GAMCO Investors, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial
reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial data; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial reporting.
|
By:
|
/s/ Mario J. Gabelli
|
Mario J. Gabelli
|
|
Chief Executive Officer
|
|
Date:
|
May 6, 2022
|
1.
|
I have reviewed this report on Form 10-Q of GAMCO Investors, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial
reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial data; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial reporting.
|
By:
|
/s/ Kieran Caterina
|
Kieran Caterina
|
|
Principal Financial Officer
|
|
Date:
|
May 6, 2022
|
/s/ Kieran Caterina
|
|
|||
Name:
|
Kieran Caterina
|
|
|
|
Title:
|
Principal Financial Officer
|
|
|
|
Date:
|
May 6, 2022
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | ||
Net income | $ 17,454 | $ 15,950 |
Other comprehensive income / (loss): | ||
Foreign currency translation gain / (loss) | (31) | 10 |
Total comprehensive income | $ 17,423 | $ 15,960 |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Accumulated Other Comprehensive Income [Member] |
Treasury Stock [Member] |
Total |
---|---|---|---|---|---|---|
Balance at Dec. 31, 2020 | $ 33 | $ 21,219 | $ 394,386 | $ (165) | $ (328,562) | $ 86,911 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 0 | 0 | 15,950 | 0 | 0 | 15,950 |
Foreign currency translation | 0 | 0 | 0 | 10 | 0 | 10 |
Dividends declared | 0 | 0 | (548) | 0 | 0 | (548) |
Stock based compensation expense | 0 | 1,166 | 0 | 0 | 0 | 1,166 |
Purchase of treasury stock | 0 | 0 | 0 | 0 | (1,814) | (1,814) |
Balance at Mar. 31, 2021 | 33 | 22,385 | 409,788 | (155) | (330,376) | 101,675 |
Balance at Dec. 31, 2021 | 33 | 28,753 | 410,333 | (177) | (345,062) | 93,880 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 0 | 0 | 17,454 | 0 | 0 | 17,454 |
Foreign currency translation | 0 | 0 | 0 | (31) | 0 | (31) |
Dividends declared | 0 | 0 | (1,077) | 0 | 0 | (1,077) |
Stock based compensation expense | 0 | 339 | 0 | 0 | 0 | 339 |
Purchase of treasury stock | 0 | 0 | 0 | 0 | (3,150) | (3,150) |
Balance at Mar. 31, 2022 | $ 33 | $ 29,092 | $ 426,710 | $ (208) | $ (348,212) | $ 107,415 |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Dividends declared (in dollars per share) | $ 0.04 | $ 0.02 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Supplemental disclosure of non-cash activity: | ||
Accrued restricted stock award dividends | $ 30 | $ 20 |
Organization and Description of Business |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Organization and Description of Business [Abstract] | |
Organization and Description of Business |
Organization and Description of Business
Unless indicated otherwise, or the context otherwise requires, references in this report to “GAMCO Investors, Inc.,” “GAMCO,” “the Company,” “the Firm,”
and “GBL” or similar terms are to GAMCO Investors, Inc., its predecessors, and its subsidiaries.
GAMCO (New York Stock Exchange (“NYSE”): GBL), a
company incorporated under the laws of Delaware, is a widely-recognized provider of investment advisory services to 24 open-end funds, 14 closed-end funds, 3 actively managed
semi-transparent exchange traded funds (“ETFs”), one société d’investissement à capital variable
(“SICAV”), and approximately 1,400 institutional and private wealth management (“Institutional and PWM”) investors principally in the
United States (U.S.). The Company generally manages assets on a fully discretionary basis and invests in a variety of U.S. and international securities through various investment styles including value, growth, non-market correlated, and convertible
securities. The Company’s revenues are based primarily on the levels of assets under management (“AUM”) and fees associated with the various investment products. GAMCO serves a broad client base, including institutions, intermediaries, offshore
investors, private wealth, and direct retail investors.
GAMCO offers a wide range of solutions for clients across Value and 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 well-known All Cap Value strategy, Gabelli Value, and in 1986 entered the mutual fund business.
The investment advisory business is conducted principally through the following subsidiaries: Gabelli Funds, LLC (open-end funds, closed-end funds, and
actively managed semi-transparent ETFs) (“Gabelli Funds”) and GAMCO Asset Management Inc. (Institutional and PWM) (“GAMCO Asset”). The distribution of open-end funds and actively managed semi-transparent ETFs are conducted through G.distributors, LLC
(“G.distributors”), the Company’s broker-dealer subsidiary.
|
Significant Accounting Policies |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies |
1. Significant Accounting Policies
Basis of Presentation
The unaudited interim condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles
(“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial
statements. The unaudited interim condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for the fair presentation of financial position, results of operations, and cash flows of GAMCO
for the interim periods presented and are not necessarily indicative of a full year’s results.
The interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries including: Gabelli Funds,
GAMCO Asset, G.distributors, and GAMCO Asset Management (UK) Limited. Intercompany accounts and transactions have been eliminated. Subsidiaries are fully consolidated from the date of acquisition, being the date on which GBL obtains control, and
continue to be consolidated until the date that such control ceases.
These interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements
included in our annual report on Form 10-K for the year ended December 31, 2021.
Use of Estimates
The preparation of the interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Recent Accounting Developments
In June 2016, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Accounting for Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13”), which requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable
forecasts. Currently, U.S. GAAP requires an “incurred loss” methodology that delays recognition until it is probable a loss has been incurred. Under ASU 2016-13, the allowance for credit losses must be deducted from the amortized cost of the
financial asset to present the net amount expected to be collected. The consolidated statement of income will reflect the measurement of credit losses for newly recognized financial assets as well as the expected increases or decreases of expected
credit losses that have taken place during the period. In November 2019, the FASB issued ASU 2019-10, Financial
Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), Leases (Topic 842): Effective Dates (ASU 2019-10), which deferred the
effective date of this guidance for smaller reporting companies for three years. This guidance is effective for the Company on January 1, 2023 and requires a modified retrospective transition method, which will result in a cumulative-effect
adjustment in retained earnings upon adoption. Early adoption is permitted. The Company is currently assessing the potential impact of this new guidance on the Company’s consolidated financial statements.
In January 2017, the FASB issued ASU 2017-04, Intangibles
- Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which simplifies the process used to test for goodwill impairment by eliminating the requirement to calculate the implied fair value of goodwill, and instead any goodwill impairment
will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. In November 2019, the FASB issued ASU 2019-10, which deferred the effective date of this guidance for smaller
reporting companies for three years. This guidance will be effective for the Company on January 1, 2023 using a prospective transition method and early adoption is permitted. The Company is currently evaluating the potential effect of this new
guidance on the Company’s consolidated financial statements.
|
Revenue Recognition |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition |
2. Revenue Recognition
In all cases for all revenue streams discussed below, the revenue generated is from a single transaction price and there is no need to
allocate the amounts across more than a single revenue stream. The customer for all revenues derived from open-end and closed-end funds described in detail below has been determined to be each fund itself and not the ultimate underlying investor in
each fund.
Significant judgments that affect the amounts and timing of revenue recognition:
The Company’s analysis of the timing of revenue recognition for each revenue stream is based upon an analysis of the current terms of each contract.
Performance obligations could, however, change from time to time if and when existing contracts are modified or new contracts are entered into. These changes could potentially affect the timing of satisfaction of performance obligations, the
determination of the transaction price, and the allocation of the price to performance obligations. In the case of the revenue streams discussed below, the performance obligation is satisfied either at a point in time or over time. For incentive fee
revenues, the performance obligation (advising a client portfolio) is satisfied over time, while the recognition of revenues effectively occurs at the end of the measurement period as defined within the contract, as such amounts are subject to
reduction to zero on the date where the measurement period ends even if the performance benchmarks were exceeded during the intervening
period. The judgments outlined below, where the determination as to these factors is discussed in detail, are continually reviewed and monitored by the Company when new contracts or contract modifications occur. Transaction price is in all instances
formulaic and not subject to significant (or any) judgment at the current time. The allowance for doubtful accounts is subject to judgment.
Advisory Fee Revenues
Advisory fees for Funds, sub-advisory accounts, and the SICAV are earned based on predetermined percentages of the average net assets of
the individual Funds and are recognized as revenues as the related services are performed. Fees for open-end Funds, one non-U.S.
closed-end Fund, sub-advisory accounts, and the SICAV are computed on a daily basis based on average daily net AUM. Fees for U.S. closed-end Funds are computed on average weekly net AUM and fees for one non-U.S. closed-end fund are computed on a
daily basis based on daily market value. These fees are received in cash after the end of each monthly period within 30 days. The
revenue recognition occurs ratably as the performance obligation (advising the Fund) is met continuously over time. There is a risk of non-payment and, therefore, an impairment loss on these receivables is possible at each reporting date. There
were no such impairment losses for the periods presented.
Advisory fees for Institutional and PWM accounts are earned based on predetermined percentages of the AUM and are generally computed quarterly based on
account values at the end of the preceding quarter. The revenue recognition occurs daily as the performance obligation (advising the client portfolio) is met continuously. These fees are received in cash, typically within 60 days of the client being billed. There is a risk of non-payment and, therefore, an impairment loss on these receivables is possible at each
reporting date. There were no such impairment losses for the periods presented.
Performance Correlated and Conditional Revenues
Investment advisory fees are earned on a portion of some closed-end funds’ preferred shares at year-end if the total return to common
shareholders of the respective closed-end fund for the year exceeds the dividend rate of the preferred shares. These fees are recognized at the end of the measurement period, which coincides with the calendar year. These fees would also be earned
and the contract period ended at any interim point in time that the respective preferred shares are redeemed. These fees are received in cash after the end of each annual measurement period, within 30 days.
The Company earns an incentive fee from two
closed-end funds. For The GDL Fund (GDL), there is an incentive fee, which is earned and recognized as of the end of each calendar year and varies to the extent the total return of the fund is in excess of the ICE Bank of America Merrill Lynch
3-month U.S. Treasury Bill Index total return. For the Gabelli Merger Plus+ Trust Plc (GMP), there is an incentive fee, which is earned and recognized as of the end of each measurement period, June 30th, and varies to the extent the
total return of the fund is in excess of twice the rate of return of the 13-week Treasury Bills over the performance period.
The Company earns an incentive fee from a SICAV sub-fund, the GAMCO Merger Arbitrage SICAV. This fee is recognized at the end of the
measurement period, which coincides with the calendar year. The fee would also be earned and the measurement period ended at any interim point in time that a client redeemed their respective shares. This fee is received in cash after the end of the
measurement period, within 30 days.
In all cases of the incentive fees, because of the variable nature of the consideration, revenue recognition is delayed until it is
probable that a significant reversal in the amount of cumulative revenue recognized will not occur, which is generally when the uncertainty associated with the variable consideration is subsequently resolved (for example, the measurement period has
concluded and the hurdle rate has been exceeded). There is a risk of non-payment and, therefore, an impairment loss on these receivables is possible at each reporting date. There were no such impairment losses for the periods presented.
Distribution Fees and Other Income
Distribution fees and other income primarily includes distribution fee revenue earned in accordance with Rule 12b-1 of the Company Act
along with sales charges and underwriting fees associated with the sale of the class A shares of open-end Funds. Distribution fees are computed based on average daily net assets of certain classes of each fund and are recognized during the period
in which they are earned. These fees are received in cash after the end of each monthly period within 30 days. In evaluating the
appropriate timing of the recognition of these fees, the Company applied the guidance on up-front fees to determine whether such fees are related to the transfer of a promised service (a distinct performance obligation). The Company’s conclusion is
that the service being provided by G.distributors to the customer in exchange for the fee is for the initial distribution of certain classes of the open-end Funds and is completed at the time of each respective sale. Any fixed amounts are
recognized on the trade date and variable amounts are recognized to the extent it is probable that a significant revenue reversal will not occur once the uncertainty is resolved. For variable amounts, as the uncertainty is dependent on the value of
the shares at future points in time as well as the length of time the investor remains in the fund, both of which are highly susceptible to factors outside the Company’s influence, the Company does not believe that it can overcome this constraint
until the market value of the fund and the investor activities are known, which are generally monthly. Sales charges and underwriting fees associated with the sale of certain classes of the open-end Funds are recognized on the trade date of the
sale of the respective shares. There is a risk of non-payment and, therefore, an impairment loss on these receivables is possible at each reporting date. There were no such impairment losses for the periods presented.
Revenue Disaggregated
The following table presents the Company’s revenue disaggregated by investment vehicle (in thousands):
|
Investment in Securities |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment in Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment in Securities |
3. Investment in Securities
Investments in equity securities at March 31, 2022 and December 31, 2021 consisted
of the following (in thousands):
Investments in equity securities, including the Company’s investments in common stocks and the Funds, are stated at fair value with any
unrealized gains or losses reported in each respective period’s earnings.
|
Fair Value |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value |
4. Fair Value
All of the instruments within cash and cash equivalents and investments in securities are measured at fair value, except for those
investments designated as held-to-maturity. The Company’s assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy in accordance with the FASB Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement (“ASC 820”), guidance on fair value measurement. The levels of the fair value hierarchy and their applicability to the Company
are described below:
The following tables summarize the Company’s assets and liabilities measured at fair value on a recurring basis by the above fair value
hierarchy levels as of March 31, 2022 and December 31, 2021 (in thousands):
Assets and liabilities measured at fair value on a recurring basis as of March 31, 2022
Assets and liabilities measured at fair value on a recurring basis as of December 31, 2021
Cash equivalents are comprised primarily of U.S. Treasury Bills and our money market fund which invests in U.S. Treasury Bills.
Financial assets not carried at fair value
At March 31, 2022 and December 31,
2021, the 2-year subordinated notes (“Subordinated Notes”) were recorded at face value, net of amortized issuance costs, as follows (in
thousands) on the Condensed Consolidated Statements of Financial Condition:
The carrying value of other financial assets and liabilities approximates their fair value based on the short-term nature of these items.
|
Income Taxes |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Income Taxes [Abstract] | |
Income Taxes |
5. Income Taxes
The effective tax rate (“ETR”) for the three months ended March 31, 2022 and 2021 was 22.6% and 29.6%, respectively. The decrease in the ETR for the first quarter of
2022 was due to less non-deductible compensation as compared to the first quarter of 2021.
|
Earnings Per Share |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share |
6. Earnings Per Share
Basic earnings per share is calculated by dividing net income by the weighted average shares outstanding. Diluted earnings per share is
calculated using the treasury stock method by dividing net income by the total weighted average shares of common stock outstanding and restricted stock awards. The computations of basic and diluted net income per share were as follows (in thousands,
except per share amounts):
|
Debt |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Debt [Abstract] | |
Debt |
7. Debt
Subordinated Notes
On June 14, 2021, the Company entered into an indenture with Computershare Trust Company, N.A., as trustee, relating to GAMCO’s issuance of up to
approximately $54.0 million of Subordinated Notes. The Subordinated Notes were issued to shareholders as a special dividend of $2.00 per share on GAMCO’s class A common stock (“Class A Stock”) and class B common stock (“Class B Stock”). The Company issued approximately $52.2 million of Subordinated Notes in connection with the special dividend, paid out $0.4 million of cash in lieu of fractional Subordinated Notes, and reserved approximately $1.9 million of Subordinated Notes to be issued upon vesting of restricted stock awards (“RSAs”). The Subordinated Notes bear interest at a rate of 4% per annum for the one-year period ending June 15, 2022 and 5%
per annum for the one-year period ending June 15, 2023 and mature on June 15, 2023. The Subordinated Notes are transferable, callable at
the option of GAMCO, in whole or in part, at any time or from time to time at a redemption price equal to 100% of the principal amount of
the Subordinated Notes to be redeemed plus interest, and puttable, in whole or in part, at any time after September 15, 2021 at a redemption price equal to 100%
of the principal amount of the Subordinated Notes to be redeemed upon notice of redemption of at least 60 days but not more than 90 days before the redemption date.
During the three months ended March 31, 2022, the Company redeemed $68 thousand of Subordinated Notes during the first quarter of 2022 relating to put notices received at least 60
days prior to the end of the quarter. As of March 31, 2022, there are $50.9 million of Subordinated Notes outstanding.
On March 28, 2022, the Company commenced a tender offer (the “Offer”) to purchase for cash up to $10 million aggregate principal amount of the Subordinated Notes at a price equal to $1,014 per $1,000 principal amount of validly tendered and not properly withdrawn Subordinated Notes.
The Offer will expire at 12:00 Midnight, Eastern Time, on Monday, April 25, unless extended.
|
Stockholders' Equity |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity |
8. Stockholders’ Equity
Shares outstanding were 26.6
million and 26.7 million on March 31, 2022
and December 31, 2021, respectively.
Voting Rights
The holders of Class A Stock and Class B Stock have identical rights except that (i) holders of Class A Stock are entitled to one vote per share, while holders of Class B Stock are entitled to ten votes per share, on all
matters to be voted on by shareholders in general, and (ii) holders of Class A Stock are not eligible to vote on matters relating exclusively to Class B Stock and vice versa.
Stock Award and Incentive Plan
The Company maintains a stock award and incentive plan approved by the shareholders (the “Plan”), which is designed to provide incentives which will attract
and retain individuals key to the success of GBL through direct or indirect ownership of our common stock. A maximum of 7.5 million shares
of Class A Stock have been reserved for issuance under the Plan by a committee of GBL’s board of directors (the “Board of Directors”) responsible for administering the Plan (“Compensation Committee”). Benefits under the Plan may be granted in any one
or a combination of stock options, stock appreciation rights, restricted stock, restricted stock units, stock awards, phantom stock awards, dividend equivalents, and other stock or cash based awards. Under the Plan, the Compensation Committee may grant
RSAs, each of which entitles the grantee to one share of Class A Stock subject to restrictions, phantom RSAs, each of which entitles the
grantee to the cash value of one share of Class A Stock subject to restrictions, and either incentive or nonqualified stock options, with a
term not to exceed ten years from the grant date and at an exercise price that the Compensation Committee may determine, which were
recommended by the Company’s Chairman who did not receive any awards.
On June 15, 2021, 396,800 phantom RSAs were
issued at a grant price of $25.02 per phantom RSA and have similar vesting terms to the RSAs. The phantom RSAs, which will be settled in cash
based on the fair value of the shares on the vesting date, were determined to be liability awards and are adjusted for changes in the Company’s stock price at each reporting date.
As of March 31, 2022 and December 31, 2021, there were 407,700 and 411,200, respectively, RSAs outstanding with weighted average grant prices per RSA of $14.81 and $14.93, respectively, and 10,000 stock options outstanding with an exercise price of $25.55. As of March 31, 2022 and December 31, 2021, there were 377,300 and
380,300, respectively, phantom RSAs outstanding with weighted average grant prices per phantom RSA of $25.02 and $25.02, respectively.
For the three months ended March 31, 2022 and 2021, the Company
recognized stock-based non-cash RSA compensation expense of $0.3 million and $1.2 million, respectively. For the three months ended March 31, 2022, the Company recognized stock-based phantom RSA compensation expense of $0.3 million. As of March 31, 2022 and December 31, 2021, the accrued phantom RSA compensation payable was $1.5 million and $1.2 million, respectively,and was included within compensation
payable in the Condensed Consolidated Statements of Financial Condition.
The total compensation costs related to non-vested RSA and phantom RSA awards to teammates, excluding the CEO who received none, not yet
recognized was approximately $3.2 million and $6.1
million, respectively, as of March 31, 2022.
Stock Repurchase Program
In March 1999, the Board of Directors established a stock
repurchase program (the “Stock Repurchase Program”) to grant management the authority to repurchase shares of Class A Stock.
For the three months ended March 31, 2022 and 2021, the Company
repurchased 140,895 and 97,078
shares, respectively, at an average price per share of $22.34 and $18.68, respectively. At March 31, 2022, the total shares available under the Stock Repurchase Program to be repurchased in the future were 2,033,042. The Stock Repurchase Program is not subject to an expiration date.
Dividends
During the three months ended March 31, 2022 and 2021, the Company declared cash dividends of $0.04 and $0.02, respectively, per share to shareholders of Class A Stock and Class B Stock.
Shelf Registration
In July 2021, the SEC declared effective the Company’s “shelf” registration statement on Form S-3 giving the Company the flexibility to
sell any combination of senior and subordinated debt securities, convertible debt securities, and equity securities (including common and preferred stock) and other securities up to a total amount of $500 million. The shelf expires in July 2024.
|
Goodwill and Identifiable Intangible Assets |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Goodwill and Identifiable Intangible Assets [Abstract] | |
Goodwill and Identifiable Intangible Assets |
9. Goodwill and Identifiable Intangible Assets
Goodwill is initially measured as the excess of the cost of
the acquired business over the sum of the amounts assigned to assets acquired less the liabilities assumed. At March 31, 2022
and December 31, 2021, there was goodwill of $0.2 million maintained on the Condensed Consolidated Statements of
Financial Condition related to G.distributors.
As a result of becoming the advisor to the Gabelli Enterprise Mergers and Acquisitions Fund (the “Enterprise Fund”) and the associated
consideration paid, the Company maintains an identifiable intangible asset of $1.3 million at March 31, 2022 and December 31, 2021. The investment advisory
agreement for the Enterprise Fund is next up for renewal in February 2023. As a result of becoming the advisor to the Bancroft Fund Ltd. (the “Bancroft Fund”) and the Ellsworth Growth and Income Fund Ltd. (the “Ellsworth Fund”) and the associated
consideration paid, the Company maintains an identifiable intangible asset of $1.6 million at March 31, 2022 and December 31, 2021. The investment advisory
agreements for the Bancroft Fund and the Ellsworth Fund are next up for renewal in August 2022. Each of these investment advisory agreements are subject to annual renewal by the respective fund’s board of directors, which the Company expects to be
renewed, and the Company does not expect to incur additional expense as a result, which is consistent with other investment advisory agreements entered into by the Company.
The Company assesses the recoverability of goodwill and intangible assets at least annually, or more often should events warrant. There were no
indicators of impairment for the three months ended March 31, 2022 and March 31, 2021 and, as such, there was no impairment analysis performed or charge recorded for such period.
|
Commitments and Contingencies |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies |
10. Commitments and Contingencies
From time to time, the Company may be named in legal actions and proceedings in the normal course of business. These actions may seek
substantial or indeterminate compensatory, as well as punitive damages or injunctive relief. The Company is also subject to governmental or regulatory examinations or investigations, which could result in adverse judgments, settlements, fines,
injunctions, or other relief. For any such matters, the condensed consolidated financial statements include the necessary provisions for losses that the Company believes are probable and estimable. Furthermore, the Company evaluates whether
there exist losses which may be reasonably possible and, if material, makes the necessary disclosures. Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties, and other sources are recorded when it
is probable that a liability has been incurred and the amount of loss or range of loss can be reasonably estimated. Except as disclosed in Note 13, Subsequent
Events, there are currently no such matters pending that the Company believes could have a material adverse effect on its consolidated financial condition, operations, or cash flows at March 31, 2022.
Leases
On December 5, 1997, the Company entered into a fifteen-year lease, expiring on April 30, 2013, of office space from an entity controlled by members of the Chairman’s family. On June 11, 2013, the Company modified and extended its lease
with M4E, LLC, the Company’s landlord at One Corporate Center, Rye, NY. The lease term was extended to December 31, 2028 and the base rental remained at $18
per square foot, or $1.1 million, for 2014. For each subsequent year through December 31, 2028, the base rental is determined by the change
in the consumer price index for the New York Metropolitan Area for November of the immediate prior year with the base period as November 2008 for the New York Metropolitan Area.
This lease has been accounted for as a finance lease under FASB ASC Topic 842 (and prior to 2019, as a capital lease under FASB ASC Topic
840, Leases) as it transfers substantially all the benefits and risks of ownership to the Company. The Company has recorded the leased property as
an asset and a lease obligation for the present value of the obligation of the leased property. The leased property is amortized on a straight-line basis from the date of the most recent extension to the end of the lease. The lease obligation is
amortized over the same term using the interest method of accounting. Finance lease improvements are amortized from the date of expenditure through the end of the lease term or the useful life, whichever is shorter, on a straight-line basis. The
lease provides that all operating expenses relating to the property (such as property taxes, utilities, and maintenance) are to be paid by the lessee, GAMCO. These are recognized as expenses in the periods in which they are incurred. Accumulated
amortization on the leased property at March 31, 2022 and December 31, 2021 was approximately $5.8 million and $5.7 million, respectively.
The Company also rents office space under operating leases, which expire at various dates through December 31, 2030.
The following table summarizes the Company’s leases for the periods presented (in thousands, except lease term and discount rate):
The finance lease right-of-use asset, net of amortization, at March 31, 2022 and December 31, 2021 was $1.4 million and $1.5 million, respectively,
and the operating right-of-use assets, net of amortization, were $2.4 million and $2.6 million, respectively, and these right-of-use assets were included within other assets in the Condensed Consolidated Statements of Financial Condition.
The following table summarizes the maturities of lease liabilities at March 31, 2022 (in thousands):
The finance lease contains an escalation clause tied to the change in the New York Metropolitan Area Consumer Price Index, which may
cause the future minimum payments to exceed the amounts shown above. Future minimum lease payments have not been reduced by related minimum future sublease rentals of approximately $1.1 million due over the next eight years, which are due from affiliated
entities.
|
Related Party Transactions |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions |
11. Related Party Transactions
On February 15, 2022, the Chief Executive Officer (“CEO”) of the Company elected to irrevocably waive all of his compensation that he would otherwise have
been entitled to for the period from March 1, 2022 to May 31, 2022. For the three months ended March 31, 2022, the waiver reduced compensation expense by $3.4 million and management fee expense by $0.7 million.
|
Regulatory Requirements |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Regulatory Requirements [Abstract] | |
Regulatory Requirements |
12. Regulatory Requirements
The Company’s broker-dealer subsidiary, G.distributors, is subject to certain net capital requirements. G.distributors computes its net
capital under the alternative method permitted, which requires minimum net capital of the greater of $250,000 or 2% of the aggregate debit items in the reserve formula for those broker-dealers subject to Rule 15c3-3 promulgated under the Securities Exchange Act of
1934, as amended. The requirement was $250,000 for the broker-dealer at March 31, 2022. At March 31, 2022, G.distributors had net
capital, as defined, of approximately $2.1 million, exceeding the regulatory requirement by approximately $1.9 million. Net capital requirements for the Company’s affiliated broker-dealer may increase in accordance with the rules and regulations applicable to
broker-dealers to the extent G.distributors engages in other business activities.
|
Subsequent Events |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events |
13. Subsequent Events
From April 1, 2022 to May 6, 2022, the Company repurchased 136,027 shares at $20.80 per share.
From April 1, 2022 to May 6, 2022, the
Company redeemed $0.1 million of Subordinated Notes as a result of put notices received. In addition, as of the April 25, 2022 expiration of
the Offer, $4.0 million of Subordinated Notes were validly tendered and not properly withdrawn. Since such aggregate principal amount of
tendered Subordinated Notes was less than $10 million, all Subordinated Notes tendered were accepted and funded with cash on hand.
On May 2, 2022, the Company received correspondence from a regulatory agency outlining the agency’s findings and a request for a response
to those findings. The Company has not accrued any amount related to this matter given the preliminary nature of the agency’s findings and analysis, and the uncertainty of the outcome. However, it is reasonably possible that upon
conclusion of this matter the Company may incur a charge to the Company’s financial results. An estimate of a range of any potential charge cannot be made at this time.
On May 3, 2022, the Board of
Directors declared its regular quarterly dividend of $0.04 per share to all of the Company’s shareholders, payable on June 28, 2022 to shareholders of record on June 14, 2022.
|
Significant Accounting Policies (Policies) |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Significant Accounting Policies [Abstract] | |
Basis of Presentation |
Basis of Presentation
The unaudited interim condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles
(“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial
statements. The unaudited interim condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for the fair presentation of financial position, results of operations, and cash flows of GAMCO
for the interim periods presented and are not necessarily indicative of a full year’s results.
The interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries including: Gabelli Funds,
GAMCO Asset, G.distributors, and GAMCO Asset Management (UK) Limited. Intercompany accounts and transactions have been eliminated. Subsidiaries are fully consolidated from the date of acquisition, being the date on which GBL obtains control, and
continue to be consolidated until the date that such control ceases.
These interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements
included in our annual report on Form 10-K for the year ended December 31, 2021.
|
Use of Estimates |
Use of Estimates
The preparation of the interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
|
Recent Accounting Developments |
Recent Accounting Developments
In June 2016, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Accounting for Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13”), which requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable
forecasts. Currently, U.S. GAAP requires an “incurred loss” methodology that delays recognition until it is probable a loss has been incurred. Under ASU 2016-13, the allowance for credit losses must be deducted from the amortized cost of the
financial asset to present the net amount expected to be collected. The consolidated statement of income will reflect the measurement of credit losses for newly recognized financial assets as well as the expected increases or decreases of expected
credit losses that have taken place during the period. In November 2019, the FASB issued ASU 2019-10, Financial
Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), Leases (Topic 842): Effective Dates (ASU 2019-10), which deferred the
effective date of this guidance for smaller reporting companies for three years. This guidance is effective for the Company on January 1, 2023 and requires a modified retrospective transition method, which will result in a cumulative-effect
adjustment in retained earnings upon adoption. Early adoption is permitted. The Company is currently assessing the potential impact of this new guidance on the Company’s consolidated financial statements.
In January 2017, the FASB issued ASU 2017-04, Intangibles
- Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which simplifies the process used to test for goodwill impairment by eliminating the requirement to calculate the implied fair value of goodwill, and instead any goodwill impairment
will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. In November 2019, the FASB issued ASU 2019-10, which deferred the effective date of this guidance for smaller
reporting companies for three years. This guidance will be effective for the Company on January 1, 2023 using a prospective transition method and early adoption is permitted. The Company is currently evaluating the potential effect of this new
guidance on the Company’s consolidated financial statements.
|
Revenue Recognition (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Disaggregated |
The following table presents the Company’s revenue disaggregated by investment vehicle (in thousands):
|
Investment in Securities (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment in Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Equity Securities |
Investments in equity securities at March 31, 2022 and December 31, 2021 consisted
of the following (in thousands):
|
Fair Value (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis |
Assets and liabilities measured at fair value on a recurring basis as of March 31, 2022
Assets and liabilities measured at fair value on a recurring basis as of December 31, 2021
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Assets and Liabilities Disclosed But Not Carried at Fair Value |
At March 31, 2022 and December 31,
2021, the 2-year subordinated notes (“Subordinated Notes”) were recorded at face value, net of amortized issuance costs, as follows (in
thousands) on the Condensed Consolidated Statements of Financial Condition:
|
Earnings Per Share (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computations of Basic and Diluted Net Income per Share |
Basic earnings per share is calculated by dividing net income by the weighted average shares outstanding. Diluted earnings per share is
calculated using the treasury stock method by dividing net income by the total weighted average shares of common stock outstanding and restricted stock awards. The computations of basic and diluted net income per share were as follows (in thousands,
except per share amounts):
|
Commitments and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Leases |
The following table summarizes the Company’s leases for the periods presented (in thousands, except lease term and discount rate):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturities of Lease Liabilities |
The following table summarizes the maturities of lease liabilities at March 31, 2022 (in thousands):
|
Organization and Description of Business (Details) |
Mar. 31, 2022
Investor
Fund
|
---|---|
Organization and Description of Business [Abstract] | |
Number of open-end funds | 24 |
Number of closed-end funds | 14 |
Number of actively managed semi-transparent exchange traded funds | 3 |
Number of open-end investment funds | 1 |
Number of institutional investors | Investor | 1,400 |
Investment in Securities, Investment in Equity Securities (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Investments in Equity Securities and Funds [Abstract] | ||
Cost | $ 57,170 | $ 48,833 |
Estimated Fair Value | 37,982 | 32,344 |
Common Stock [Member] | ||
Investments in Equity Securities and Funds [Abstract] | ||
Cost | 33,912 | 33,575 |
Estimated Fair Value | 15,261 | 16,210 |
Actively Managed Semi-transparent EFTs [Member] | ||
Investments in Equity Securities and Funds [Abstract] | ||
Cost | 17,000 | 9,000 |
Estimated Fair Value | 16,539 | 9,599 |
Open-end Funds [Member] | ||
Investments in Equity Securities and Funds [Abstract] | ||
Cost | 5,722 | 5,722 |
Estimated Fair Value | 5,664 | 5,995 |
Closed-end Funds [Member] | ||
Investments in Equity Securities and Funds [Abstract] | ||
Cost | 530 | 530 |
Estimated Fair Value | 514 | 534 |
Other [Member] | ||
Investments in Equity Securities and Funds [Abstract] | ||
Cost | 6 | 6 |
Estimated Fair Value | $ 4 | $ 6 |
Fair Value, Financial Assets and Liabilities Disclosed But Not Carried at Fair Value (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Carrying Value [Member] | ||
Debt instruments [Abstract] | ||
Total | $ 50,935 | $ 50,990 |
Carrying Value [Member] | Subordinated Notes [Member] | ||
Debt instruments [Abstract] | ||
Notes payable | 50,935 | 50,990 |
Level 2 [Member] | Fair Value [Member] | ||
Debt instruments [Abstract] | ||
Total | 50,935 | 50,990 |
Level 2 [Member] | Fair Value [Member] | Subordinated Notes [Member] | ||
Debt instruments [Abstract] | ||
Notes payable | $ 50,935 | $ 50,990 |
Income Taxes (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Income Taxes [Abstract] | ||
Effective income tax rate | 22.60% | 29.60% |
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Basic [Abstract] | ||
Net income | $ 17,454 | $ 15,950 |
Weighted average shares outstanding (in shares) | 26,237 | 26,393 |
Basic net income per share (in dollars per share) | $ 0.67 | $ 0.60 |
Diluted [Abstract] | ||
Net income | $ 17,454 | $ 15,950 |
Weighted average shares outstanding (in shares) | 26,237 | 26,393 |
Restricted stock awards (in shares) | 256 | 494 |
Total (in shares) | 26,493 | 26,887 |
Diluted net income per share (in dollars per share) | $ 0.66 | $ 0.59 |
Stockholders' Equity, Shares Outstanding (Details) - shares shares in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Stockholders' Equity [Abstract] | ||
Shares outstanding (in shares) | 26.6 | 26.7 |
Stockholders' Equity, Stock Repurchase Program, Dividends and Shelf Registration (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Jul. 21, 2021 |
|
Dividends [Abstract] | |||
Dividends declared (in dollars per share) | $ 0.04 | $ 0.02 | |
Shelf Registration [Abstract] | |||
Maximum amount of debt and equity to be issued under shelf registration | $ 500 | ||
Class A Stock [Member] | |||
Dividends [Abstract] | |||
Dividends declared (in dollars per share) | $ 0.04 | $ 0.02 | |
Class A Stock [Member] | Stock Repurchase Program [Member] | |||
Stock Repurchase Program [Abstract] | |||
Shares repurchased (in shares) | 140,895 | 97,078 | |
Average price per share of repurchased shares (in dollars per share) | $ 22.34 | $ 18.68 | |
Share available under program to repurchase (in shares) | 2,033,042 | ||
Class B Stock [Member] | |||
Dividends [Abstract] | |||
Dividends declared (in dollars per share) | $ 0.04 | $ 0.02 |
Goodwill and Identifiable Intangible Assets (Details) - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Goodwill and Identifiable Intangible Assets [Abstract] | ||
Goodwill | $ 0.2 | $ 0.2 |
Investment Advisory Contract [Member] | Enterprise Fund [Member] | ||
Intangible assets, net [Abstract] | ||
Identifiable intangible asset | 1.3 | 1.3 |
Investment Advisory Contract [Member] | Bancroft Fund Ltd. and the Ellsworth Growth and Income Fund Ltd. [Member] | ||
Intangible assets, net [Abstract] | ||
Identifiable intangible asset | $ 1.6 | $ 1.6 |
Related Party Transactions (Details) - Chief Executive Officer [Member] $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
Related Party Transactions [Abstract] | |
Compensation | $ (3.4) |
Management fee | $ (0.7) |
Regulatory Requirements (Details) |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
Regulatory Requirements [Abstract] | |
Minimum capital requirement | $ 250,000 |
Percentage of minimum capital requirement | 2.00% |
Net capital | $ 2,100,000 |
Net capital exceeding regulatory requirements | $ 1,900,000 |
NW21RV<_%.E*'BRO#4*W7^98(6"N$+!6A6"W
MR2UV17FNP"KJ]VP-BE_>?N*^)G,%@+4J +,4OE"*(PJ[Y18[U%HR7+&!S%D^
M:V7Y=M\&]1P<=:5T_0K =2:^+T$"!()"#*-SGL]:>?YE(O7*#N0U*)C0+K.U
M2.LQ<<&F#2]WGL];>?X\$7%,+C89_)S53K$&G8:O3NZ,GN,^O0,*)0 A&6J0
M: >TNM!J$I&B=I5S !-7$@$1TE46*(5E>P+$S5Z?BMJ
M.UO DHIBMP-8WJT&E#:*35L>"U>F9MZ)+4T+2>,UW3-8\D/J8VDJRHBTL/Q\
M17J&YJ/2AYFB:4.]X#K=8LY]=1-1IUSFL%(B]6[O+1?< EKY1810T%@==&[2IP:\,+8AKAJ%W3[**:'JE<6USHB
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MB,;.0ASIA VF
M)[.'V/0Z.96?'<[WGJJ70I4\M[P0/GVP8\U>GM%PJR1!+^>?.HF>]0#.58-4
M9H0%3'(5[8Z\:20P;:+BVE-J/-(]=\7QNS\AMZ@\WZ @?M9H:)@%4X,Z:&LU
M%YRJ'6C0$#]#BPZ;5I$,'ZFB4M5EUUJ0,8]R.]+@@UJ&[VO:3W8,^J&5=T O
MI@@< .,M/ NJV?"X73KI0&/U4GN^9[1KJ5OB!MA8L[L]763YC?[KH RQQ&Y?GPG)A_O3P]'/--INS(+OB#M
MJW/G2HD:1_Y7"/H.B@^G>V@#5["Y,LMM=N8=VI!DLI.\@,'&2T13%D(2,93*
M$D3'H[5J0B*/F#6LL@;3:\"-)L^0?
M[VT9R=4"1J?7 -_@BB38"('*$R/IL\]9!/![-4*8U:)D8)
M'[]>S5C5G_9#Z::9Q1[(FXF6+ G% - /EAO;4X[X"^XR&9/4'EH="E5D3'R"%-*E"-759#Z=/IK4VMCA\9$\N_3'1ZZ)E;%TZ55HZEK[[2E5[N;Y
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MQK>VL@H8Z;P<" DN836;[O\FLF^;BG@UG7&
B/6E/Q9*77E*+&@D>MB1/0AS+MXA617M2R)
M1RCE\85TD#*>32N"Z:@0!"S2F%IE8%C/
M-M(A%&*++]:(&E"3)-7J\HP)*2NTTF206U,"WX&T@.X.>-"=V/=W8@"W'84*
MBPAE>__0W[^.>8"V_8=J+4^3K$X9\J16W/DUPGH/K\:#";M-J3 X=,:.TSRB
M>!@1Y)SGH
U<9,?&\$FI!Z/
MS6WS<[FJ9^H[O/XS8:(V#.N$PQI-P_8 9[FJIWU],+)P$W8E#