GAMCO Investors, Inc. Reports 2021 Second Quarter Results

• Second quarter net income was $17.1 million vs. $11.3 million a year ago
• Fully diluted second quarter earnings were $0.64 per share vs. $0.42 per share a year ago
• June 30, 2021 AUM of $34.6 billion vs. $29.4 billion a year ago
  • Equity AUM were $33.0 billion at June 30, 2021 vs. $26.4 billion at June 30, 2020

GREENWICH, Conn.--(BUSINESS WIRE)--GAMCO Investors, Inc. (“GAMCO”) (NYSE: GBL) today reported its operating results for the quarter ended June 30, 2021.

Second Quarter Results

Financial Highlights (Unaudited)
	Three Months Ended
(In thousands, except per share data)	June 30, 2021		June 30, 2020
U.S. GAAP Basis
Revenues	$	75,624	$	57,559
Operating income		24,849		18,763
Net income		17,101		11,290
Diluted earnings per common share	$	0.64	$	0.42
Weighted average diluted shares outstanding		26,869		26,656
Shares outstanding		27,204		27,630
Assets Under Management
AUM - end of period (in millions)	$	34,625	$	29,356
AUM - average (in millions)		34,603		29,135

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

GAMCO contributed $5.4 million in April 2021 to over sixty 501(c)(3) institutions based on the February 28, 2021 record date for the 2021 shareholder designated charitable contribution (“SDCC”) of $0.25 per share. Eligible shareholders chose the recipient of corporate contributions based on their ownership interest. Since the inception of GAMCO’s SDCC program in 2013, shareholders have designated charitable gifts of close to $37 million to more than 280 charitable organizations. When combined with our other charitable donations, this boosts our total contributions to approximately $62 million since our initial public offering in February 1999.

This charitable program underscores our giving back to society as part of our commitment to managing socially responsible portfolios since 1987, which has evolved to include integrating ESG (environmental, social, and governance) factors.

Revenues

• Total revenues for the second quarter of 2021 were $75.6 million compared with $57.6 million in the second quarter of 2020.

• Investment advisory fees were $68.9 million in the second quarter of 2021 versus $51.5 million in the year ago quarter:
  
  
  • Gabelli Funds’ revenues were $48.4 million compared to $35.8 million in the second quarter of 2020.
    
    
  • Institutional and Private Wealth Management revenues, which are generally billed on portfolio values at the beginning of the quarter, were $18.6 million compared to $14.5 million in last year’s second quarter.
    
    
  • SICAV revenues were $1.9 million for the second quarter of 2021 as compared to $1.2 million in the year ago quarter.

• Distribution fees from our equity mutual funds and other income were $6.7 million during the second quarter of 2021 and $6.1 million in the prior year quarter.

Operating Income

For the second quarter of 2021, operating income was $24.8 million versus $18.8 million in the second quarter of 2020.

Non-Operating Income

Mark-to-market investment gains were $3.1 million in the second quarter of 2021 versus gains of $0.4 million in the second quarter of 2020. Interest expense was $0.6 million in the second quarters of 2021 and 2020.

Income Taxes

GAMCO’s effective tax rate for the quarter ended June 30, 2021 was 37.4% versus 39.1% for the quarter ended June 30, 2020.

Business Highlights

• On April 15^th, the Gabelli Utility Trust (NYSE: GUT) completed an oversubscribed rights offering raising approximately $43 million.

• On May 14^th, we hosted our 36^th GAMCO Investor Client Symposium with over 500 clients and prospects attending on a virtual basis.

• On June 3^rd, more than a dozen media and entertainment companies participated in our 13^th Annual Entertainment & Broadcasting Symposium.

• On June 15^th, the Company paid a $2.00 dividend in the form of a Subordinated Note totaling $52.2 million to holders of record on June 1, 2021.

• The Company opened a relationship center in Charleston, SC with Christina Bronec, Senior Vice President.

• On July 20^th, the Company held a special meeting where shareholders approved an amendment to the Company’s Amended and Restated Certificate of Incorporation.

• On July 21^st, the Gabelli Equity Trust (NYSE: GAB) completed an oversubscribed rights offering raising approximately $144 million.

• On July 21^st, the Company filed a shelf registration statement to register up to $500 million of securities, including common stock, preferred stock, warrants, rights, and convertible securities.

Balance Sheet

GAMCO ended the quarter with cash and investments of $152 million and $52 million of debt maturing on June 15, 2023.

Return to Shareholders

During the quarter, in addition to the $2.00 per share special dividend, GAMCO paid a regular dividend of $0.02 per share. The Company purchased 157,884 shares for $3.5 million at an average price of $22.29 per share.

On August 3, 2021, GAMCO’s board of directors declared a regular quarterly dividend of $0.02 per share, which is payable on September 28, 2021 to class A and class B shareholders of record on September 14, 2021.

About GAMCO Investors, Inc.

GAMCO is known for its research-driven approach to equity investing. GAMCO conducts its investment advisory business principally through two subsidiaries: GAMCO Asset Management Inc. (approximately 1,400 institutional and private wealth separate accounts, principally in the U.S.) and Gabelli Funds, LLC (24 open-end funds, 16 closed-end funds, 2 actively managed semi-transparent ETFs, and a SICAV). GAMCO serves a broad client base including institutions, intermediaries, offshore investors, private wealth, and direct retail investors.

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

Table I: Assets Under Management and Fund Flows - 2nd Quarter 2021 (in millions)
										Fund
								Market		distributions,
	March 31,		Client		Client			appreciation/		net of			June 30,		June 30,
	2021		Inflows		Outflows			(depreciation)		reinvestments			2021		2020
Equities:
Mutual Funds	$	9,825	$	249	$	(403	)	$	539	$	(4	)	$	10,206	$	8,651
Closed-end Funds		8,100		-		38			483		(122	)		8,499		6,859
Institutional & PWM (a)		13,145		137		(360	)		668		-			13,590		10,455
SICAV		582		102		(37	)		18		-			665		451
Total Equities		31,652		488		(762	)		1,708		(126	)		32,960		26,416
100% U.S. Treasury Fund		1,725		640		(732	)		-		-			1,633		2,921
Institutional & PWM Fixed Income		32		-		-			-		-			32		19
Total Treasuries & Fixed Income		1,757		640		(732	)		-		-			1,665		2,940
Total Assets Under Management	$	33,409	$	1,128	$	(1,494	)	$	1,708	$	(126	)	$	34,625	$	29,356
(a) Includes $180, $154, and $252 of 100% U.S. Treasury Fund AUM at March 31, 2021, June 30, 2021, and June 30, 2020, respectively.

Table II
GAMCO INVESTORS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
	Three Months Ended						Six Months Ended
	June 30						June 30
		2021			2020			2021			2020
Investment advisory and incentive fees	$	68,885		$	51,470		$	130,355		$	113,743
Distribution fees and other income		6,739			6,089			13,197			13,383
Total revenues		75,624			57,559			143,552			127,126
Compensation costs (a)		31,298			25,516			61,980			54,766
Management fee expense		3,035			2,060			5,552			3,725
Distribution costs		7,771			6,634			14,742			14,264
Other operating expenses		8,671			4,586			13,975			10,288
Total expenses		50,775			38,796			96,249			83,043
Operating income		24,849			18,763			47,303			44,083
Investment gain/(loss)		3,088			424			3,953			(9,269	)
Interest expense		(625	)		(647	)		(1,287	)		(1,294	)
Non-operating gain/(loss)		2,463			(223	)		2,666			(10,563	)
Income before income taxes		27,312			18,540			49,969			33,520
Provision for income taxes		10,211			7,250			16,918			10,985
Net income	$	17,101		$	11,290		$	33,051		$	22,535
Net income:
Basic	$	0.65		$	0.42		$	1.25		$	0.85
Diluted	$	0.64		$	0.42		$	1.24		$	0.84
Weighted average shares outstanding:
Basic		26,316			26,629			26,354			26,658
Diluted		26,869			26,656			26,632			26,713
Actual shares outstanding (b)		27,204			27,630			27,204			27,630

(a)	For the year ended June 30, 2020, compensation costs were reduced by $1,409 due to indexing of deferred compensation to the GBL stock price.
(b)	Includes 967 and 1,031 RSA shares at June 30, 2021 and 2020, respectively.

Table III
GAMCO INVESTORS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands)
	June 30,		December 31,		June 30,
	2021		2020		2020
ASSETS
Cash, cash equivalents, and U.S. Treasury Bills	$	118,194	$	98,313	$	108,080
Investments in securities		33,743		25,845		20,669
Receivable from brokers		5,615		5,833		4,677
Other receivables		28,626		34,054		22,501
Deferred tax asset and income tax receivable		8,616		9,462		9,032
Other assets		12,334		11,895		9,353
Total assets	$	207,128	$	185,402	$	174,312
LIABILITIES AND STOCKHOLDERS' EQUITY
Payable to brokers	$	12	$	1	$	-
Securities sold, not yet purchased		-		799		-
Income taxes payable		1,917		3,910		4,740
Compensation payable		44,980		21,543		30,947
Accrued expenses and other liabilities		46,895		48,023		37,978
Sub-total		93,804		74,276		73,665
5.875% Senior Notes (due June 1, 2021)		-		24,215		24,203
Subordinated Notes (due June 15, 2023)		52,178		-		-
Total liabilities		145,982		98,491		97,868
Stockholders' equity (a)		61,146		86,911		76,444
Total liabilities and stockholders' equity	$	207,128	$	185,402	$	174,312
(a) Shares outstanding of 27,204, 27,503, and 27,630, respectively.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

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

Forward-looking statements involve a number of known and unknown risks, uncertainties and other important factors, some of which are listed below, that are difficult to predict and could cause actual results and outcomes to differ materially from any future results or outcomes expressed or implied by such forward-looking statements. Some of the factors that may cause our actual results to differ from our expectations include risks associated with the duration and scope of the ongoing coronavirus pandemic resulting in volatile market conditions, a decline in the securities markets that adversely affect our assets under management, negative performance of our products, the failure to perform as required under our investment management agreements, a general downturn in the economy that negatively impacts our operations, and the ongoing impacts of the Tax Cuts and Jobs Act with respect to tax rates and the non-deductibility of certain portions of named executive officer compensation. We also direct your attention to the more specific discussions of these and other risks, uncertainties and other important factors contained in our Annual Report on Form 10-K and other public filings. Other factors that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We do not undertake to update publicly any forward-looking statements if we subsequently learn that we are unlikely to achieve our expectations whether as a result of new information, future developments or otherwise, except as may be required by law.

Gabelli Funds, LLC is a registered investment adviser with the Securities and Exchange Commission and is a wholly owned subsidiary of GAMCO Investors, Inc. (NYSE: GBL).

Investors should carefully consider the investment objectives, risks, charges and expenses of the Fund before investing. The prospectus, which contains more complete information about this and other matters, should be read carefully before investing. To obtain a prospectus, please call 800 GABELLI or visit www.gabelli.com.