Pzena Investment Management, Inc. (NYSE: PZN) reported the
following U.S. Generally Accepted Accounting Principles (GAAP)
basic and diluted net income and earnings per share for the three
and nine months ended September 30, 2021 and 2020 (in
thousands, except per-share amounts):
|
|
GAAP Basis |
|
|
|
For the Three Months Ended September 30, |
|
|
|
2021 |
|
2020 |
|
|
|
(unaudited) |
|
Basic Net Income |
|
$ |
5,068 |
|
$ |
2,664 |
|
Basic
Earnings per Share |
|
$ |
0.29 |
|
$ |
0.16 |
|
|
|
|
|
|
|
Diluted Net
Income |
|
$ |
22,663 |
|
$ |
12,374 |
|
Diluted
Earnings per Share |
|
$ |
0.27 |
|
$ |
0.16 |
|
|
|
|
|
|
|
|
|
GAAP Basis |
|
|
|
For the Nine Months Ended September 30, |
|
|
|
2021 |
|
2020 |
|
|
|
(unaudited) |
|
Basic Net
Income |
|
$ |
13,858 |
|
$ |
4,862 |
|
Basic
Earnings per Share |
|
$ |
0.80 |
|
$ |
0.28 |
|
|
|
|
|
|
|
Diluted Net
Income1 |
|
$ |
63,571 |
|
$ |
4,862 |
|
Diluted
Earnings per Share1 |
|
$ |
0.76 |
|
$ |
0.28 |
|
1 During the nine months ended September 30,
2020, the calculation of GAAP diluted earnings per share resulted
in an increase in earnings per share. Therefore, diluted net income
and diluted earnings per share are assumed to be equal to basic net
income and basic earnings per share.
GAAP diluted net income and GAAP diluted
earnings per share were $22.7 million and $0.27, respectively, for
the three months ended September 30, 2021, and $12.4 million
and $0.16, respectively, for the three months ended
September 30, 2020. GAAP diluted net income and GAAP diluted
earnings per share were $63.6 million and $0.76, respectively, for
the nine months ended September 30, 2021, and $4.9 million and
$0.28, respectively, for the nine months ended September 30,
2020.
In evaluating the results of operations,
management also reviews adjusted measures of earnings, which are
adjusted to exclude accounting items that add a measure of
non-operational complexity which obscures the underlying
performance of the business. For the three and nine months ended
September 30, 2021 and 2020, no adjustments were made to GAAP
earnings. Management uses the as adjusted measures to assess the
strength of the underlying operations of the business. It believes
the as adjusted measures provide information to further analyze the
Company's operations between periods and over time. Furthermore,
management targets a cash dividend payout ratio at approximately
60% to 70% of our as adjusted diluted net income, subject to growth
initiatives and other funding needs. Investors should consider the
as adjusted measures in addition to, and not as a substitute for,
financial measures prepared in accordance with GAAP.
Net income for diluted earnings per share
generally assumes all operating company membership units are
converted into Company stock at the beginning of the reporting
period, and the resulting change to Company net income associated
with its increased interest in the operating company, is taxed at
the Company's effective tax rate, exclusive of the adjustments
noted above and other adjustments. When this conversion results in
an increase in earnings per share or a decrease in loss per share,
diluted net income and diluted earnings per share are assumed to be
equal to basic net income and basic earnings per share for the
reporting period.
Assets Under Management(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($
billions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
For the Twelve Months Ended |
|
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
|
2021 |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Separately Managed Accounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of Period |
|
$ |
20.0 |
|
|
$ |
19.4 |
|
|
$ |
13.0 |
|
|
$ |
13.3 |
|
|
$ |
13.7 |
|
Inflows |
|
|
0.2 |
|
|
|
0.7 |
|
|
|
0.2 |
|
|
|
2.1 |
|
|
|
2.6 |
|
Outflows |
|
|
(1.1 |
) |
|
|
(0.7 |
) |
|
|
(0.3 |
) |
|
|
(3.4 |
) |
|
|
(1.4 |
) |
Net Flows |
|
|
(0.9 |
) |
|
|
— |
|
|
|
(0.1 |
) |
|
|
(1.3 |
) |
|
|
1.2 |
|
Market Appreciation/(Depreciation) |
|
|
(0.1 |
) |
|
|
0.5 |
|
|
|
0.1 |
|
|
|
6.9 |
|
|
|
(2.0 |
) |
Foreign Exchange1 |
|
|
(0.2 |
) |
|
|
0.1 |
|
|
|
0.3 |
|
|
|
(0.1 |
) |
|
|
0.4 |
|
End of Period |
|
$ |
18.8 |
|
|
$ |
20.0 |
|
|
$ |
13.3 |
|
|
$ |
18.8 |
|
|
$ |
13.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sub-Advised Accounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of Period Assets |
|
$ |
30.2 |
|
|
$ |
26.9 |
|
|
$ |
16.4 |
|
|
$ |
18.0 |
|
|
$ |
19.8 |
|
Inflows |
|
|
1.3 |
|
|
|
3.1 |
|
|
|
2.5 |
|
|
|
6.9 |
|
|
|
5.2 |
|
Outflows |
|
|
(1.7 |
) |
|
|
(0.9 |
) |
|
|
(1.2 |
) |
|
|
(5.1 |
) |
|
|
(4.2 |
) |
Net Flows |
|
|
(0.4 |
) |
|
|
2.2 |
|
|
|
1.3 |
|
|
|
1.8 |
|
|
|
1.0 |
|
Market Appreciation/(Depreciation) |
|
|
(0.3 |
) |
|
|
1.0 |
|
|
|
0.2 |
|
|
|
9.6 |
|
|
|
(3.0 |
) |
Foreign Exchange1 |
|
|
(0.2 |
) |
|
|
0.1 |
|
|
|
0.1 |
|
|
|
(0.1 |
) |
|
|
0.2 |
|
End of Period |
|
$ |
29.3 |
|
|
$ |
30.2 |
|
|
$ |
18.0 |
|
|
$ |
29.3 |
|
|
$ |
18.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pzena Funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of Period Assets |
|
$ |
2.9 |
|
|
$ |
2.9 |
|
|
$ |
2.1 |
|
|
$ |
2.0 |
|
|
$ |
2.3 |
|
Inflows |
|
|
0.1 |
|
|
|
0.2 |
|
|
|
0.1 |
|
|
|
0.7 |
|
|
|
0.4 |
|
Outflows |
|
|
(0.2 |
) |
|
|
(0.2 |
) |
|
|
(0.2 |
) |
|
|
(1.0 |
) |
|
|
(0.5 |
) |
Net Flows |
|
|
(0.1 |
) |
|
|
— |
|
|
|
(0.1 |
) |
|
|
(0.3 |
) |
|
|
(0.1 |
) |
Market Appreciation/(Depreciation) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1.0 |
|
|
|
(0.2 |
) |
Foreign Exchange1 |
|
|
(0.1 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
End of Period |
|
$ |
2.7 |
|
|
$ |
2.9 |
|
|
$ |
2.0 |
|
|
$ |
2.7 |
|
|
$ |
2.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of Period |
|
$ |
53.1 |
|
|
$ |
49.2 |
|
|
$ |
31.5 |
|
|
$ |
33.3 |
|
|
$ |
35.8 |
|
Inflows |
|
|
1.6 |
|
|
|
4.0 |
|
|
|
2.8 |
|
|
|
9.7 |
|
|
|
8.2 |
|
Outflows |
|
|
(3.0 |
) |
|
|
(1.8 |
) |
|
|
(1.7 |
) |
|
|
(9.5 |
) |
|
|
(6.1 |
) |
Net Flows |
|
|
(1.4 |
) |
|
|
2.2 |
|
|
|
1.1 |
|
|
|
0.2 |
|
|
|
2.1 |
|
Market Appreciation/(Depreciation) |
|
|
(0.4 |
) |
|
|
1.5 |
|
|
|
0.3 |
|
|
|
17.5 |
|
|
|
(5.2 |
) |
Foreign Exchange1 |
|
|
(0.5 |
) |
|
|
0.2 |
|
|
|
0.4 |
|
|
|
(0.2 |
) |
|
|
0.6 |
|
End of Period |
|
$ |
50.8 |
|
|
$ |
53.1 |
|
|
$ |
33.3 |
|
|
$ |
50.8 |
|
|
$ |
33.3 |
|
1 Foreign exchange reflects
the impact of translating non-U.S. dollar denominated AUM into U.S.
dollars for reporting purposes.
Financial Discussion
Revenue (unaudited) |
|
|
|
|
|
|
($
thousands) |
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2021 |
|
2021 |
|
2020 |
Separately Managed Accounts |
|
$ |
26,016 |
|
$ |
26,525 |
|
$ |
18,457 |
Sub-Advised
Accounts |
|
|
20,786 |
|
|
19,400 |
|
|
11,880 |
Pzena
Funds |
|
|
4,820 |
|
|
4,952 |
|
|
3,611 |
Total |
|
$ |
51,622 |
|
$ |
50,877 |
|
$ |
33,948 |
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended |
|
|
|
|
September 30, |
|
September 30, |
|
|
|
|
2021 |
|
2020 |
Separately
Managed Accounts |
|
|
|
$ |
77,088 |
|
$ |
53,891 |
Sub-Advised
Accounts |
|
|
|
|
56,814 |
|
|
34,851 |
Pzena
Funds |
|
|
|
|
14,468 |
|
|
10,016 |
Total |
|
|
|
$ |
148,370 |
|
$ |
98,758 |
|
|
|
|
|
|
|
Revenue was approximately $51.6 million for the
third quarter of 2021, an increase of 1.5% from $50.9 million for
the second quarter of 2021, and an increase of 52.1% from $33.9
million for the third quarter of 2020.
There were less than $0.1 million of performance
fees recognized during both the third quarter of 2021 and the
second quarter of 2021, and no performance fees recognized during
the third quarter of 2020.
Average assets under management for the third
quarter of 2021 were $52.4 billion, increasing 1.7% from $51.5
billion for the second quarter of 2021, and increasing 58.3% from
$33.1 billion for the third quarter of 2020. The increase from the
third quarter of 2020 primarily reflects market appreciation.
The weighted average fee rate was 0.394% for the
third quarter of 2021, remaining relatively flat from 0.395% for
the second quarter of 2021, and decreasing from 0.410% for the
third quarter of 2020.
The weighted average fee rate for separately
managed accounts was 0.534% for the third quarter of 2021,
remaining relatively flat from 0.533% for the second quarter of
2021 and decreasing from 0.549% for the third quarter of 2020. The
decrease from the third quarter of 2020 primarily reflects an
increase in assets due to market appreciation as the rates we earn
in the majority of our fee schedules decline as the assets
increase.
The weighted average fee rate for sub-advised
accounts was 0.276% for the third quarter of 2021, 0.270% for the
second quarter of 2021, and 0.270% for the third quarter of 2020.
The increase from the second quarter of 2021 and the third quarter
of 2020 reflects a shift in assets to strategies that typically
carry higher fee rates. Certain accounts related to one retail
client relationship have fulcrum fee arrangements. These fee
arrangements require a reduction in the base fee or allow for a
performance fee if the relevant investment strategy underperforms
or outperforms, respectively, the agreed-upon benchmark over the
contract's measurement period, which extends to three years. During
each of the third quarter of 2021, second quarter of 2021, and
third quarter of 2020, the Company recognized a $1.0 million
reduction in base fees related to this client relationship. To the
extent the three-year performance record of this account fluctuates
relative to its relevant benchmark, the amount of base fees
recognized may vary.
The weighted average fee rate for Pzena funds
was 0.690% for the third quarter of 2021, increasing from 0.681%
for the second quarter of 2021, and from 0.687% for the third
quarter of 2020. The increase from the second quarter of 2021
reflects a shift in asset mix toward products in strategies that
typically carry higher fee rates. The increase from the third
quarter of 2020 primarily reflects a reduction in expense
reimbursements.
Total operating expenses were $23.2 million for
the third quarter of 2021, increasing from $23.0 million for the
second quarter of 2021 and from $19.0 million for the third quarter
of 2020. The increase in general and administrative expenses from
the second quarter of 2021 primarily reflects an increase in
professional fees and data and systems expense. The increase in
compensation and benefits expense from the third quarter of 2020 is
driven by an increase in compensation and in the market performance
of strategies tied to the Company’s deferred compensation
obligation. The increase in general and administrative expenses
from the third quarter of 2020 primarily reflects an increase in
professional fees and data and systems expense.
Operating Expenses (unaudited) |
|
|
|
|
|
|
($
thousands) |
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2021 |
|
2021 |
|
2020 |
Compensation and Benefits Expense |
|
$ |
18,921 |
|
$ |
19,035 |
|
$ |
15,808 |
General and
Administrative Expense |
|
|
4,304 |
|
|
3,920 |
|
|
3,183 |
Operating Expenses |
|
$ |
23,225 |
|
$ |
22,955 |
|
$ |
18,991 |
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended |
|
|
|
|
September 30, |
|
September 30, |
|
|
|
|
2021 |
|
2020 |
Compensation
and Benefits Expense |
|
|
|
$ |
57,091 |
|
$ |
50,526 |
General and
Administrative Expense |
|
|
|
|
11,920 |
|
|
11,180 |
Operating Expenses |
|
|
|
$ |
69,011 |
|
$ |
61,706 |
As of September 30, 2021, employee
headcount was 133, increasing from 125 at June 30, 2021, and from
121 at September 30, 2020.
The operating margin was 55.0% for the third
quarter of 2021, compared to 54.9% for the second quarter of 2021,
and 44.1% for the third quarter of 2020. The increase in operating
margin from the third quarter of 2020 is primarily driven by the
increase in revenue.
Other income/ (expense) was income of
approximately $0.4 million for the third quarter of 2021, $1.7
million for the second quarter of 2021, and $0.5 million for the
third quarter of 2020.
Other income/ (expense) primarily reflects the
fluctuations in the gains/ (losses) and other investment income
recognized by the Company on its direct equity investments, the
majority of which are held to satisfy obligations under its
deferred compensation plan. Other income/ (expense) also includes a
portion of gains/ (losses) and other investment income recognized
by external investors on their investments in investment
partnerships that the Company consolidates, which are offset in net
income attributable to non-controlling interests.
Other Income/ (Expense) (unaudited) |
|
|
|
|
|
|
|
|
|
($
thousands) |
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|
|
2021 |
|
|
2021 |
|
|
2020 |
|
Net Interest and Dividend Income |
|
$ |
386 |
|
|
$ |
261 |
|
|
$ |
187 |
|
Gains/
(Losses) and Other Investment Income |
|
|
70 |
|
|
|
1,369 |
|
|
|
295 |
|
Other
Income/ (Expense) |
|
|
(82 |
) |
|
|
100 |
|
|
|
52 |
|
GAAP Other Income/ (Expense) |
|
|
374 |
|
|
|
1,730 |
|
|
|
534 |
|
Outside
Interests of Investment Partnerships1 |
|
|
(250 |
) |
|
|
(249 |
) |
|
|
(83 |
) |
As Adjusted Other Income/ (Expense), Net of Outside Interests |
|
$ |
124 |
|
|
$ |
1,481 |
|
|
$ |
451 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended |
|
|
|
|
|
|
September 30, |
|
|
September 30, |
|
|
|
|
|
|
2021 |
|
|
2020 |
|
Net Interest
and Dividend Income |
|
|
|
|
$ |
844 |
|
|
$ |
572 |
|
Gains/
(Losses) and Other Investment Income |
|
|
|
|
|
5,539 |
|
|
|
(6,165 |
) |
Other
Income/ (Expense) |
|
|
|
|
|
76 |
|
|
|
13 |
|
GAAP Other Income/ (Expense) |
|
|
|
|
|
6,459 |
|
|
|
(5,580 |
) |
Outside
Interests of Investment Partnerships1 |
|
|
|
|
|
(693 |
) |
|
|
(3 |
) |
As Adjusted Other Income/ (Expense), Net of Outside Interests |
|
|
|
|
$ |
5,766 |
|
|
$ |
(5,583 |
) |
1 Represents the
non-controlling interest allocation of the (income)/ loss of the
Company's consolidated investment partnerships to its external
investors.
The Company recognized income tax expense of
$0.1 million for the third quarter of 2021, $2.6 million for the
second quarter of 2021 and income tax benefit of $0.1 million for
the third quarter of 2020. The third quarter of 2021 income tax
expense reflects a $2.5 million benefit associated with the
reversal of uncertain tax position liabilities and interest related
to unincorporated and other business tax expenses due to the
expiration of the statute of limitations. The third quarter of 2020
income tax benefit reflects $1.6 million of such benefit.
Details of the income tax expense are shown
below:
Income Tax Expense (unaudited) |
|
|
|
|
|
|
|
|
|
($
thousands) |
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|
|
2021 |
|
|
2021 |
|
|
2020 |
|
Corporate
Income Tax Expense |
|
$ |
1,618 |
|
|
$ |
1,520 |
|
|
$ |
961 |
|
Unincorporated and Other Business Tax Expense |
|
|
(1,550 |
) |
|
|
1,055 |
|
|
|
(1,044 |
) |
Income Tax Expense |
|
$ |
68 |
|
|
$ |
2,575 |
|
|
$ |
(83 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended |
|
|
|
|
|
|
September 30, |
|
|
September 30, |
|
|
|
|
|
|
2021 |
|
|
2020 |
|
Corporate
Income Tax Expense |
|
|
|
|
$ |
4,638 |
|
|
$ |
2,129 |
|
Unincorporated and Other Business Tax Expense |
|
|
|
|
|
371 |
|
|
|
151 |
|
Income Tax Expense |
|
|
|
|
$ |
5,009 |
|
|
$ |
2,280 |
|
Details of the net income attributable to
non-controlling interests of the Company's operating company and
consolidated subsidiaries are shown below:
GAAP
Non-Controlling Interests (unaudited) |
|
|
|
|
|
|
($
thousands) |
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2021 |
|
2021 |
|
2020 |
Operating Company Allocation |
|
$ |
23,385 |
|
$ |
22,225 |
|
$ |
12,827 |
Outside
Interests of Investment Partnerships1 |
|
|
250 |
|
|
249 |
|
|
83 |
GAAP Net
Income Attributable to Non-Controlling Interests |
|
$ |
23,635 |
|
$ |
22,474 |
|
$ |
12,910 |
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended |
|
|
|
|
September 30, |
|
September 30, |
|
|
|
|
2021 |
|
2020 |
Operating
Company Allocation |
|
|
|
$ |
66,258 |
|
$ |
24,327 |
Outside
Interests of Investment Partnerships1 |
|
|
|
|
693 |
|
|
3 |
GAAP Net
Income Attributable to Non-Controlling Interests |
|
|
|
$ |
66,951 |
|
$ |
24,330 |
1 Represents the
non-controlling interest allocation of the income/ (loss) of the
Company's consolidated investment partnerships to its external
investors.
On October 19, 2021, the Company announced that
the Board of Directors has approved a quarterly dividend of $0.03
per share of its Class A common stock. The following dates apply to
the dividend:
Record Date:
October 29, 2021
Payment Date:
November 19, 2021
During the last twelve months, inclusive of the
dividend noted above, the Company declared total dividends of $0.34
per share of its Class A common stock.
Third Quarter 2021 Earnings Call
Information
Pzena Investment Management, Inc. (NYSE: PZN)
will hold a conference call to discuss the Company's financial
results and outlook at 10:00 a.m. ET, Wednesday, October 20, 2021.
The call will be open to the public.
Webcast Instructions: To gain access to the
webcast, which will be "listen-only," go to the Events page in the
Investor Relations area of the Company's website,
www.pzena.com.
Teleconference Instructions: To gain access to
the conference call via telephone, U.S. callers should dial
844-200-6205; Canada and other international callers should dial
929-526-1599. All callers will need to use access code 231025 to
join the call.
Replay: The conference call will be available
for replay through November 3, 2021, on the web using the
information given above.
About Pzena Investment
Management
Pzena Investment Management, LLC, the firm's
operating company, is a value-oriented investment management firm.
Founded in 1995, Pzena Investment Management has built a diverse,
global client base. More firm and stock information is posted at
www.pzena.com.
Forward-Looking Statements
This press release may contain, in addition to
historical information, forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities and Exchange Act of 1934, as
amended. Forward-looking statements provide the Company’s current
views, expectations, or forecasts of future events and performance,
and include statements about our expectations, beliefs, plans,
objectives, intentions, assumptions and other statements that are
not historical facts. Words or phrases such as “anticipate,”
“believe,” “continue,” “ongoing,” “estimate,” “expect,” “intend,”
“may,” “plan,” “potential,” “predict,” “project” or similar words
or phrases, or the negatives of those words or phrases, may
identify forward-looking statements, but the absence of these words
does not necessarily mean that a statement is not
forward-looking.
Among the factors that could cause actual
results to differ from those expressed or implied by a
forward-looking statement are those described in the sections
entitled “Risk Factors” and “Management's Discussion and Analysis
of Financial Condition and Results of Operations” in the Company's
Annual Report on Form 10-K, as filed with the SEC on March 10, 2021
and in the Company's Quarterly Reports on Form 10-Q as filed with
the SEC. These risk factors include a pandemic or health crisis,
including the COVID-19 pandemic, and its impact on financial
institutions, the global economic or capital markets as well as
Pzena’s products, clients, vendors and employees, and Pzena’s
results of operations, the full extent of which may be unknown. In
light of these risks, uncertainties, assumptions, and factors,
actual results could differ materially from those expressed or
implied in the forward-looking statements. You are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date stated, or if no date is stated, as of
the date of this release.
The Company is not under any obligation and does
not intend to make publicly available any update or other revisions
to any forward-looking statements to reflect circumstances existing
after the date of this release or to reflect the occurrence of
future events even if experience or future events make it clear
that any expected results expressed or implied by those
forward-looking statements will not be realized.
Contact: Jessica Doran, 212-355-1600 or
doran@pzena.com.
|
PZENA INVESTMENT MANAGEMENT,
INC.CONSOLIDATED STATEMENTS OF FINANCIAL
CONDITION (in thousands) |
|
|
|
As of |
|
|
September 30, |
|
December 31, |
|
|
2021 |
|
2020 |
|
|
(unaudited) |
|
|
ASSETS |
|
|
|
|
Cash and Cash Equivalents |
|
$ |
69,951 |
|
$ |
65,534 |
Restricted Cash |
|
|
1,055 |
|
|
1,050 |
Due from Broker |
|
|
537 |
|
|
87 |
Advisory Fees Receivable |
|
|
43,046 |
|
|
36,524 |
Investments |
|
|
67,599 |
|
|
34,104 |
Prepaid Expenses and Other Assets |
|
|
5,753 |
|
|
5,603 |
Right-of-use Assets |
|
|
9,786 |
|
|
11,578 |
Deferred Tax Asset |
|
|
26,881 |
|
|
29,831 |
Property and Equipment, Net of Accumulated |
|
|
|
|
Depreciation of $6,793 and $5,980, respectively |
|
|
3,547 |
|
|
4,376 |
TOTAL ASSETS |
|
$ |
228,155 |
|
$ |
188,687 |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
Liabilities: |
|
|
|
|
Accounts Payable and Accrued Expenses |
|
$ |
34,223 |
|
$ |
36,317 |
Due to Broker |
|
|
1,002 |
|
|
56 |
Securities Sold Short |
|
|
906 |
|
|
714 |
Liability to Selling and Converting Shareholders |
|
|
27,820 |
|
|
25,701 |
Lease Liabilities |
|
|
10,077 |
|
|
11,905 |
Deferred Compensation Liability |
|
|
5,037 |
|
|
5,039 |
TOTAL LIABILITIES |
|
|
79,065 |
|
|
79,732 |
|
|
|
|
|
Equity: |
|
|
|
|
Total Pzena Investment Management, Inc.'s Equity |
|
|
39,096 |
|
|
31,106 |
Non-Controlling Interests |
|
|
109,994 |
|
|
77,849 |
TOTAL EQUITY |
|
|
149,090 |
|
|
108,955 |
TOTAL LIABILITIES AND EQUITY |
|
$ |
228,155 |
|
$ |
188,687 |
|
|
PZENA INVESTMENT MANAGEMENT, INC.UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS (in
thousands, except share and per-share amounts) |
|
|
|
|
|
For the
Three Months Ended |
|
|
For the Nine
Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
REVENUE |
|
$ |
51,622 |
|
|
$ |
33,948 |
|
|
$ |
148,370 |
|
|
$ |
98,758 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
and Benefits Expense |
|
|
18,921 |
|
|
|
15,808 |
|
|
|
57,091 |
|
|
|
50,526 |
|
General and
Administrative Expense |
|
|
4,304 |
|
|
|
3,183 |
|
|
|
11,920 |
|
|
|
11,180 |
|
TOTAL OPERATING EXPENSES |
|
|
23,225 |
|
|
|
18,991 |
|
|
|
69,011 |
|
|
|
61,706 |
|
Operating
Income |
|
|
28,397 |
|
|
|
14,957 |
|
|
|
79,359 |
|
|
|
37,052 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Income/ (Loss) |
|
|
374 |
|
|
|
534 |
|
|
|
6,459 |
|
|
|
(5,580 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Before Taxes |
|
|
28,771 |
|
|
|
15,491 |
|
|
|
85,818 |
|
|
|
31,472 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax
Expense |
|
|
68 |
|
|
|
(83 |
) |
|
|
5,009 |
|
|
|
2,280 |
|
Consolidated
Net Income |
|
|
28,703 |
|
|
|
15,574 |
|
|
|
80,809 |
|
|
|
29,192 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net
Income Attributable to Non-Controlling Interests |
|
|
23,635 |
|
|
|
12,910 |
|
|
|
66,951 |
|
|
|
24,330 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
Attributable to Pzena Investment Management, Inc. |
|
$ |
5,068 |
|
|
$ |
2,664 |
|
|
$ |
13,858 |
|
|
$ |
4,862 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
Share - Basic and Diluted Attributable to Pzena Investment
Management, Inc. Common Stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
for Basic Earnings per Share |
|
$ |
5,068 |
|
|
$ |
2,664 |
|
|
$ |
13,858 |
|
|
$ |
4,862 |
|
Basic
Earnings per Share |
|
$ |
0.29 |
|
|
$ |
0.16 |
|
|
$ |
0.80 |
|
|
$ |
0.28 |
|
Basic
Weighted Average Shares Outstanding |
|
|
17,694,559 |
|
|
|
16,931,447 |
|
|
|
17,398,518 |
|
|
|
17,310,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
for Diluted Earnings per Share1 |
|
$ |
22,663 |
|
|
$ |
12,374 |
|
|
$ |
63,571 |
|
|
$ |
4,862 |
|
Diluted
Earnings per Share1 |
|
$ |
0.27 |
|
|
$ |
0.16 |
|
|
$ |
0.76 |
|
|
$ |
0.28 |
|
Diluted
Weighted Average Shares Outstanding |
|
|
84,197,618 |
|
|
|
78,783,209 |
|
|
|
84,020,711 |
|
|
|
79,084,609 |
|
1 During the nine months ended September 30,
2020, the calculation of GAAP diluted earnings per share resulted
in an increase in earnings per share. Therefore, diluted net income
and diluted earnings per share are assumed to be equal to basic net
income and basic earnings per share.
PDF
available: http://ml.globenewswire.com/Resource/Download/ffb10219-c00f-42e2-a0ed-fa3c3e246caa
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