RYE, N.Y.--(BUSINESS WIRE)--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; |
974 | 974 | |||||||||
Class B Common Stock, $0.001 par value; 800,000 shares authorized; |
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.