GAMCO Investors, Inc. Reports Results for the 2nd Quarter 2024

• Quarter End AUM of $30.7 billion; Average AUM of $31.1 billion for the Second Quarter
• Operating Margin of 27.1% for the Second Quarter
• Second Quarter Fully Diluted EPS of $0.61 versus $0.58 in the Second Quarter of 2023
• $232.3 million in Cash, Cash Equivalents, Investments and no Debt

GREENWICH, Conn., Aug. 06, 2024 (GLOBE NEWSWIRE) — GAMCO Investors, Inc. (“GAMI”) (OTCQX: GAMI) today reported its operating results for the quarter ended June 30, 2024.

Financial Highlights

Giving Back to Society – $75 million since IPO

Since our initial public offering in February 1999, our firm’s combined charitable donations total approximately $75 million, including $48 million through the shareholder designated charitable contribution program. Based on the program created by Warren Buffett at Berkshire Hathaway, our corporate charitable giving is unique in that the recipients of GAMI’s charitable contributions are chosen directly by our shareholders, rather than by our corporate officers. Since its inception in 2013, GAMI shareholders have designated charitable gifts to approximately 350 charitable organizations.

On August 6, 2024, the board of directors authorized the creation of a private foundation to continue our charitable giving program. The foundation will be funded with a $5.0 million contribution.

Revenue

The quarter over quarter increase in Funds and Institutional and Private Wealth Management revenues was primarily the result of higher average equity assets under management. The drop in SICAV revenues reflects a change in the revenue share for the merger arbitrage SICAV (an open-end fund available to non-U.S. shareholders). The change better aligns the economics with the responsibilities of managing the fund.Â

Expenses

• The higher compensation expense in the second quarter of 2024 reflected $1.5 million higher stock-based compensation, partially offset by $0.4 million lower variable compensation.
• The $0.2 million decrease in management fee is attributable to the lower pre-management fee income of $1.8 million; and,
• Other operating expenses this quarter were lower versus the second quarter of 2023 reflecting the change in the agreement for merger arbitrage SICAV.

Operating Margin

The operating margin, which represents the ratio of operating income to revenue, was 27.1% for the second quarter of 2024 compared with 27.9% for the second quarter of 2023.

Non-Operating Income

Non-operating income decreased $0.7 million for the quarter, reflecting the lower mark-to-market values on our investment portfolio for the quarter offset by increased interest and dividend income due to higher interest rates.

Other Financial Highlights

The effective income tax rate for the second quarter of 2024 was 17.4% versus 26.1% for the second quarter of 2023. The lower effective income tax rate for the 2024 second quarter reflects reversals of uncertain tax accruals from prior periods.

Cash, cash equivalents, and investments were $232.3 million with no debt at June 30, 2024.

Assets Under Management

Assets under management on June 30, 2024 were $30.7 billion, a decrease of 3.1% from the $31.7 billion on March 31, 2024. The quarter’s decrease consisted of net market depreciation of $391 million, net outflows of $455 million, and distributions, net of reinvestments, of $131 million.

100% U.S. Treasury Money Market Fund

Assets under management in our 100% U.S. Treasury Money Market Fund (GABXX) on June 30, 2024 were $5.2 billion, up from $5.0 billion at March 31, 2024.

Assets Under Administration

AUA on June 30, 2024 were $1.3 billion, as compared to $1.5 billion at March 31, 2024.

Mutual Funds

Assets under management in Mutual Funds on June 30, 2024 were $8.0 billion, a decrease of 2.4% from the $8.2 billion at March 31, 2024. The quarterly change was attributed to:

• Distributions, net of reinvestment, of $5 million;
• Net outflows of $169 million; and
• Net market depreciation of $26 million.

Closed-end Funds

Assets under management in Closed-end Funds on June 30, 2024 were $7.1 billion, a decrease of 3.6% from the $7.3 billion on March 31, 2024. The quarterly change was comprised of:

• Distributions, net of reinvestment, of $126 million;
• Net outflows of $46 million, including the redemption of $37 million of preferred shares, the repurchase of $12 million of common stock less the issuance of $3 million preferred shares; and
• Net market depreciation of $89 million.

Institutional & PWM

Assets under management in Institutional & PWM on June 30, 2024 were $10.4 billion, a decrease of 6.4% from the $11.1 billion on March 31, 2024. The quarterly change was due to:

• Net market depreciation of $342 million; and
• Net outflows of $368 million.

SICAV

Assets under management in the SICAV on June 30, 2024 of $9 million, were the same as March 31, 2024.

Balance Sheet Information       Â

As of June 30, 2024, cash and cash equivalents were $181.9 million plus investments of $50.4 million, compared with cash and cash equivalents of $166.0 million and investments of $38.9 million as of December 31, 2023. As of June 30, 2024, stockholders’ equity was $192.4 million compared to $181.0 million as of December 31, 2023.

Return to Shareholders

During the second quarter of 2024, GAMI paid a dividend of $0.04 per share for a total of $1.0 million, a special dividend of $0.20 per share for a total of $5.0 million, and purchased 249,991 shares for $5.8 million at an average investment of $23.15 per share. From July 1, 2024 to August 6, 2024, the Company has purchased 76,996 shares at an average investment of $25.54 per share. On August 6, 2024, the board of directors increased the buyback authorization by 500,000 shares to 1,212,932 shares.

On August 6, 2024, GAMI’s board of directors declared a regular quarterly dividend of $0.04 per share, which is payable on September 24, 2024, to class A and class B shareholders of record on September 10, 2024.

Symposiums/Conferences

• On April 4^th, we hosted the 10^th Annual Waste & Environmental Services Symposium. The conference featured presentations by senior management of several leading companies, with a focus on the themes of waste, water treatment, and the environment.
• On May 3^rd, GAMCO hosted its 18^th annual Omaha Research Trip in conjunction with the Berkshire Hathaway Annual Meeting. This Value Investor Conference attracted a record number of participants with Gabelli portfolio managers anchoring panels with noted Berkshire experts and regional CEOs.
• On May 9^th and 10^th, we hosted our 39^th GAMCO client meeting in New York City. We presented our annual Gabelli Prize in honor of Graham & Dodd, Murray, and Greenwald for Value Investing to Fidelity Management & Research Company’s Vice Chairman, Peter S. Lynch.
• On June 6^th, we hosted the 16^th Annual Media & Entertainment Symposium highlighted by a sports investing panel.
• At the June 26^th and 27^th Morningstar Conference, Gabelli Funds was a Principal Sponsor at Navy Pier in Chicago featuring keynote presentations by portfolio managers Tony Bancroft (Gabelli Commercial Aerospace & Defense ETF NYSE:GCAD) and John Belton (Gabelli Growth Innovators ETF NYSE: GGRW).
• We are hosting the following in the third quarter 2024:
  • 30^th Aerospace & Defense Symposium (September 5^th)
  • 2^nd PFAS Symposium (September 26^th)

• We are hosting the following in the fourth quarter of 2024:
  • Rule 852(b)(6) Conference (October 25^th)
  • 48^th Automotive Aftermarket Symposium (November 4^th and 5^th)
  • 6^th Healthcare Symposiums (November 15^th)

About GAMCO Investors, Inc.

GAMI is best known for its research-driven value approach to equity investing (known as PMV with a Catalyst^TM). GAMI conducts its investment advisory business principally through two subsidiaries: Gabelli Funds, LLC (24 open-end funds, 14 closed-end funds, 5 actively managed semi-transparent ETFs, and a SICAV) and GAMCO Asset Management Inc. (approximately 1,400 institutional and private wealth separate accounts). GAMI serves a broad client base including institutions, intermediaries, offshore investors, private wealth, and direct retail investors. In recent years, GAMI has successfully integrated new teams of RIAs by providing attractive compensation arrangements and extensive research capabilities.
GAMI offers a wide range of solutions for clients across Value and Growth Equity, Convertibles, actively managed semi-transparent ETFs, sector-focused strategies including Gold and Utilities, Merger Arbitrage, Fixed Income, and 100% U.S. Treasury Money Market.

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, 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, and a general downturn in the economy that negatively impacts our operations. We also direct your attention to the more specific discussions of these and other risks, uncertainties and other important factors contained in our Annual Report 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. (OTCQX: GAMI).

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

Money Market Fund

Investment in the fund is neither guaranteed nor insured by the Federal Deposit Insurance Corporation or any government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time. You could lose money by investing in the fund.

191 Mason Street
Greenwich, CT 06830
GABELLI.COM

Contact:
Kieran Caterina
Chief Accounting Officer
(914) 921-5149

For further information please visit:
www.gabelli.comÂ