Teton Advisors, Inc. Reports Fourth Quarter and Full Year Results

  • Fourth quarter AUM of $3.4 billion, up 146% year-over-year
  • Fourth quarter revenues of $8.1 million, up 137% year-over-year
  • Fourth quarter fully diluted EPS of $0.83 compared with $0.53 a year ago
  • Full year fully diluted EPS of $3.76 compared with $2.39 a year ago

RYE, N.Y.--()--Teton Advisors, Inc. (OTC PINK: TETAA) announced fourth quarter 2017 earnings which included the accretive impact of the February 28, 2017 acquisition of the assets of Keeley Asset Management Corp. (“KAMCO”).

Revenues for the quarter ended December 31, 2017 were $8.1 million compared with $3.4 million in the quarter ended December 31, 2016. Current quarter net income and fully diluted earnings per share were $1.1 million and $0.83, respectively, compared to $0.6 million and $0.53 for the same period a year ago. The quarterly results include recurring non-cash charges related to intangible asset and debt discount amortization. In addition, the company recognized two non-recurring, non-cash charges totaling $267,000. The first such expense of $65,000 was attributable to the passage of the Tax Cuts and Jobs Act (the “Tax Act”) in December 2017. The second expense was a $202,000 impairment charge related to an annual assessment of the value of the company’s intangible assets. Excluding these non-cash items, cash earnings per share were $1.36. On October 17, 2017, Teton redeemed 15,000 shares ($1.5 million) of Series A Preferred stock which was issued in connection with the financing of the KAMCO acquisition.

The December 31, 2017 assets under management of $3.4 billion represented an increase of $2.0 billion, or 146% from December 31, 2016. Average AUM was $3.4 billion for the fourth quarter of 2017 versus $3.5 billion for the third quarter 2017 and $1.4 billion for the fourth quarter of 2016.

Full-year revenues were $30.0 million versus $13.4 million for the 12-month period ended December 31, 2016. Full-year net income and fully diluted earnings per share were $4.9 million and $3.76, respectively, compared to $2.6 million and $2.39 for the 12-month period ended December 31, 2016. Excluding the impact of the items described above, cash earnings per share were $5.01. These full-year results represent ten months of contribution from the KAMCO operations. The Company’s 2017 effective tax rate was 40.5%. As a result of the Tax Act, we anticipate our effective tax rate to be substantially lower going forward.

Further information regarding the KAMCO acquisition can be located on our website at www.tetonadv.com.

On February 23, 2018 Teton’s Board of Directors declared a regular quarterly dividend of $0.05 per share on its common stock payable on March 27, 2018 to Class A and Class B shareholders of record on March 13, 2018. Teton Advisors also declared a quarterly dividend of $0.75 per share on its Series A Preferred Stock payable on March 27, 2018 to its Series A Preferred shareholders of record on February 23, 2018.

 
Table I
TETON ADVISORS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
         
For the Three Months Ended December 31,
2017     2016
Revenues
Investment advisory fees - mutual funds $ 6,917,188 $ 3,101,015
Investment advisory fees - separate accounts 1,130,631 287,936
Distribution fees and other income   76,923   48,303
Total revenues 8,124,742 3,437,254
Expenses
Compensation 2,133,236 1,138,349
Marketing and administrative fees 516,344 443,217
Distribution costs and expense reimbursements 1,008,160 332,776
Advanced commissions 53,086 38,658
Sub-advisory fees 1,189,497 75,155
Other operating expenses   509,061   499,905
Total operating expenses 5,409,384 2,528,060
       
Income before interest, taxes, depreciation & amortization   2,715,358   909,194
 
Interest expense 272,700 -
Depreciation & amortization   413,601   1,746
Income before income taxes 2,029,057 907,448
Income taxes   926,965   327,081
Net income $ 1,102,092 $ 580,367
 
Net income per share:
Basic $ 0.90 $ 0.53
Fully diluted $ 0.83 $ 0.53
 
Weighted average shares outstanding:
Basic   1,165,501   1,096,151
Fully diluted   1,268,190   1,100,850
 
Actual shares outstanding   1,165,383   1,098,267
 
         
Table II
TETON ADVISORS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 
For the Years Ended December 31,
2017     2016
Revenues
Investment advisory fees - mutual funds $ 24,684,740 $ 11,744,005
Investment advisory fees - separate accounts 4,988,268 1,464,224
Distribution fees and other income   290,266   224,338
Total revenues 29,963,274 13,432,567
Expenses
Compensation 8,631,329 4,796,860
Marketing and administrative fees 1,936,662 1,701,098
Distribution costs and expense reimbursements 3,370,135 1,066,585
Advanced commissions 197,419 146,566
Sub-advisory fees 3,734,301 303,013
Other operating expenses   2,147,293   1,259,745
Total operating expenses 20,017,139 9,273,867
       
Income before interest, taxes, depreciation & amortization   9,946,135   4,158,700
 
Interest expense 854,817 -
Depreciation & amortization   908,036   7,506
Income before income taxes 8,183,282 4,158,700
Income taxes   3,314,453   1,527,267
Net income $ 4,868,829 $ 2,623,927
 
Net income per share:
Basic $ 4.04 $ 2.39
Fully diluted $ 3.76 $ 2.39
 
Weighted average shares outstanding:
Basic   1,157,272   1,095,994
Fully diluted   1,244,306   1,099,264
 
Actual shares outstanding   1,165,383   1,098,267
 
         
Table III
TETON ADVISORS, INC.
UNAUDITED CONDENSED STATEMENTS OF FINANCIAL CONDITION
 
December 31, December 31,
2017     2016
ASSETS
 
Cash and cash equivalents $ 6,579,337 $ 13,270,301
Investment advisory fees receivable 2,620,591 1,313,412
Deferred tax asset 79,271 97,091
Goodwill and other identifiable intangible assets 21,961,358 -
Other assets   769,099     392,788  
Total assets $ 32,009,656   $ 15,073,592  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Payable to affiliates $ 758,692 $ 502,239
Compensation payable 69,000 306,801
Deferred tax liability 114,839 -
Distribution costs payable 456,863 159,186
Accrued expenses and other liabilities   1,345,824     1,084,521  
Subtotal liabilites 2,745,218 2,052,747
 
Long-term debt   3,183,733     -  
Total liabilites 5,928,951 2,052,747
 
Commitments and contingencies
Series A redeemable preferred stock, $0.001 par value
75,000 and zero shares authorized; 75,000 shares issued.
60,000 and zero shares oustanding (Liquidition preference of $6,360,000) 5,155,088 -
 
Stockholders' equity

Class A Common Stock, $0.001 par value; 1,700,000 shares authorized;
985,825 and 975,403 shares issued, respectively; 834,466 and 766,928
shares outstanding, respectively

974 974

Class B Common Stock, $0.001 par value; 800,000 shares authorized;
792,000 shares issued; 330,917 and 331,339 shares outstanding, respectively

339 339
Additional paid-in capital 5,005,224 644,628
Treasury stock, at cost (1,829,542 ) (2,308,830 )
Retained earnings   17,748,621     14,683,734  
Total stockholders' equity   20,925,616     13,020,845  
Total liabilities and stockholders' equity $ 32,009,655   $ 15,073,592  
 

SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

Our disclosure and analysis in this press release contain some forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. Such statements are subject to contingencies and uncertainties, some or all of which may be material. We direct your attention to the cautionary statements regarding forward-looking information set forth in documents on Teton’s website. We do not undertake to update publicly any forward-looking statements if we subsequently learn that we are unlikely to achieve our expectations or if we receive any additional information relating to the subject matters of our forward-looking statements.

Contacts

Teton Advisors, Inc.
Michael Mancuso, 914-457-1075
Chief Financial Officer
For further information, please visit: www.tetonadv.com

Contacts

Teton Advisors, Inc.
Michael Mancuso, 914-457-1075
Chief Financial Officer
For further information, please visit: www.tetonadv.com