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, 2020 and 2019 (in
thousands, except per-share amounts):
|
GAAP Basis |
|
For the Three Months Ended |
|
September 30, |
|
2020 |
|
2019 |
|
|
|
|
|
(unaudited) |
Basic Net Income |
$ |
2,664 |
|
|
$ |
3,478 |
|
Basic Earnings per Share |
$ |
0.16 |
|
|
$ |
0.19 |
|
|
|
|
|
|
|
|
|
Diluted Net Income |
$ |
12,374 |
|
|
$ |
13,768 |
|
Diluted Earnings per
Share |
$ |
0.16 |
|
|
$ |
0.19 |
|
|
|
|
|
|
|
|
|
|
GAAP Basis |
|
For the Nine Months Ended |
|
September 30, |
|
2020 |
|
2019 |
|
|
|
|
|
(unaudited) |
Basic Net Income |
$ |
4,862 |
|
|
$ |
9,944 |
|
Basic Earnings per Share |
$ |
0.28 |
|
|
$ |
0.55 |
|
|
|
|
|
|
|
|
|
Diluted Net Income1 |
$ |
4,862 |
|
|
$ |
39,793 |
|
Diluted Earnings per
Share1 |
$ |
0.28 |
|
|
$ |
0.54 |
|
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 $12.4 million and $0.16, respectively, for
the three months ended September 30, 2020, and $13.8 million
and $0.19, respectively, for the three months ended
September 30, 2019. GAAP diluted net income and GAAP diluted
earnings per share were $4.9 million and $0.28, respectively, for
the nine months ended September 30, 2020, and $39.8 million
and $0.54, respectively, for the nine months ended
September 30, 2019.
In evaluating the results of operations,
management also reviews adjusted measures of earnings, which are
adjusted to exclude accounting items that add a measure of
non-operational complexity which obscures the underlying
performance of the business. For the three and nine months ended
September 30, 2020 and 2019, no adjustments were made to GAAP
earnings.
Net income for diluted earnings per share
generally assumes all operating company membership units are
converted into Company stock at the beginning of the reporting
period, and the resulting change to Company net income associated
with its increased interest in the operating company is taxed at
the Company's effective tax rate, exclusive of the adjustments
noted above and other adjustments. When this conversion results in
an increase in earnings per share or a decrease in loss per share,
diluted net income and diluted earnings per share are assumed to be
equal to basic net income and basic earnings per share for the
reporting period.
Assets Under Management (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ billions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
For the Twelve Months Ended |
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Separately Managed
Accounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of Period |
$ |
13.0 |
|
|
$ |
10.8 |
|
|
$ |
13.9 |
|
|
$ |
13.7 |
|
|
$ |
14.6 |
|
Inflows |
|
0.2 |
|
|
|
0.7 |
|
|
|
0.4 |
|
|
|
2.6 |
|
|
|
2.0 |
|
Outflows |
|
(0.3 |
) |
|
|
(0.5 |
) |
|
|
(0.3 |
) |
|
|
(1.4 |
) |
|
|
(1.9 |
) |
Net Flows |
|
(0.1 |
) |
|
|
0.2 |
|
|
|
0.1 |
|
|
|
1.2 |
|
|
|
0.1 |
|
Market Appreciation/(Depreciation) |
|
0.1 |
|
|
|
1.9 |
|
|
|
(0.2 |
) |
|
|
(2.0 |
) |
|
|
(0.8 |
) |
Foreign Exchange1 |
|
0.3 |
|
|
|
0.1 |
|
|
|
(0.1 |
) |
|
|
0.4 |
|
|
|
(0.2 |
) |
End of Period |
$ |
13.3 |
|
|
$ |
13.0 |
|
|
$ |
13.7 |
|
|
$ |
13.3 |
|
|
$ |
13.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sub-Advised Accounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of Period Assets |
$ |
16.4 |
|
|
$ |
14.3 |
|
|
$ |
21.1 |
|
|
$ |
19.8 |
|
|
$ |
22.2 |
|
Inflows |
|
2.5 |
|
|
|
0.7 |
|
|
|
0.4 |
|
|
|
5.2 |
|
|
|
2.4 |
|
Outflows |
|
(1.2 |
) |
|
|
(1.4 |
) |
|
|
(1.4 |
) |
|
|
(4.2 |
) |
|
|
(3.3 |
) |
Net Flows |
|
1.3 |
|
|
|
(0.7 |
) |
|
|
(1.0 |
) |
|
|
1.0 |
|
|
|
(0.9 |
) |
Market Appreciation/(Depreciation) |
|
0.2 |
|
|
|
2.7 |
|
|
|
(0.2 |
) |
|
|
(3.0 |
) |
|
|
(1.3 |
) |
Foreign Exchange1 |
|
0.1 |
|
|
|
0.1 |
|
|
|
(0.1 |
) |
|
|
0.2 |
|
|
|
(0.2 |
) |
End of Period |
$ |
18.0 |
|
|
$ |
16.4 |
|
|
$ |
19.8 |
|
|
$ |
18.0 |
|
|
$ |
19.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pzena Funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of Period Assets |
$ |
2.1 |
|
|
$ |
1.7 |
|
|
$ |
2.3 |
|
|
$ |
2.3 |
|
|
$ |
2.1 |
|
Inflows |
|
0.1 |
|
|
|
0.1 |
|
|
|
0.1 |
|
|
|
0.4 |
|
|
|
0.6 |
|
Outflows |
|
(0.2 |
) |
|
|
— |
|
|
|
— |
|
|
|
(0.5 |
) |
|
|
(0.3 |
) |
Net Flows |
|
(0.1 |
) |
|
|
0.1 |
|
|
|
0.1 |
|
|
|
(0.1 |
) |
|
|
0.3 |
|
Market Appreciation/(Depreciation) |
|
— |
|
|
|
0.3 |
|
|
|
(0.1 |
) |
|
|
(0.2 |
) |
|
|
(0.1 |
) |
Foreign Exchange1 |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
End of Period |
$ |
2.0 |
|
|
$ |
2.1 |
|
|
$ |
2.3 |
|
|
$ |
2.0 |
|
|
$ |
2.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of Period |
$ |
31.5 |
|
|
$ |
26.8 |
|
|
$ |
37.3 |
|
|
$ |
35.8 |
|
|
$ |
38.9 |
|
Inflows |
|
2.8 |
|
|
|
1.5 |
|
|
|
0.9 |
|
|
|
8.2 |
|
|
|
5.0 |
|
Outflows |
|
(1.7 |
) |
|
|
(1.9 |
) |
|
|
(1.7 |
) |
|
|
(6.1 |
) |
|
|
(5.5 |
) |
Net Flows |
|
1.1 |
|
|
|
(0.4 |
) |
|
|
(0.8 |
) |
|
|
2.1 |
|
|
|
(0.5 |
) |
Market Appreciation/(Depreciation) |
|
0.3 |
|
|
|
4.9 |
|
|
|
(0.5 |
) |
|
|
(5.2 |
) |
|
|
(2.2 |
) |
Foreign Exchange1 |
|
0.4 |
|
|
|
0.2 |
|
|
|
(0.2 |
) |
|
|
0.6 |
|
|
|
(0.4 |
) |
End of Period |
$ |
33.3 |
|
|
$ |
31.5 |
|
|
$ |
35.8 |
|
|
$ |
33.3 |
|
|
$ |
35.8 |
|
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, |
|
2020 |
|
2020 |
|
2019 |
Separately Managed
Accounts |
$ |
18,457 |
|
|
$ |
16,738 |
|
|
$ |
18,548 |
|
Sub-Advised Accounts |
|
11,880 |
|
|
|
10,262 |
|
|
|
14,651 |
|
Pzena Funds |
|
3,611 |
|
|
|
3,131 |
|
|
|
3,866 |
|
Total |
$ |
33,948 |
|
|
$ |
30,131 |
|
|
$ |
37,065 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended |
|
|
|
|
|
September 30, |
|
September 30, |
|
|
|
|
|
2020 |
|
2019 |
Separately Managed
Accounts |
|
|
|
|
$ |
53,891 |
|
|
$ |
55,959 |
|
Sub-Advised Accounts |
|
|
|
|
|
34,851 |
|
|
|
44,715 |
|
Pzena Funds |
|
|
|
|
|
10,016 |
|
|
|
11,644 |
|
Total |
|
|
|
|
$ |
98,758 |
|
|
$ |
112,318 |
|
Revenue was $33.9 million for the third quarter
of 2020, an increase of 12.7% from $30.1 million for the second
quarter of 2020, and a decrease of 8.4% from $37.1 million for the
third quarter of 2019.
There were no performance fees recognized in the
third or second quarters of 2020, compared to $0.3 million for the
third quarter of 2019.
Average assets under management for the third
quarter of 2020 were $33.1 billion, increasing 11.1% from $29.8
billion for the second quarter of 2020, and decreasing 8.1% from
$36.0 billion for the third quarter of 2019. The increase from the
second quarter of 2020, reflects net inflows and market
appreciation. The decrease from third quarter of 2019 primarily
reflects market depreciation during the first quarter of 2020,
partially offset by net inflows.
The weighted average fee rate was 0.410% for the
third quarter of 2020, increasing from 0.404% for the second
quarter of 2020, and decreasing from 0.412% for the third quarter
of 2019.
The weighted average fee rate for separately
managed accounts was 0.549% for the third quarter of 2020,
decreasing slightly from 0.552% for the second quarter of 2020 and
increasing from 0.543% for the third quarter of 2019. The increase
from the third quarter of 2019 primarily reflects the addition of
assets to certain strategies that typically carry higher fee
rates.
The weighted average fee rate for sub-advised
accounts was 0.270% for the third quarter of 2020, increasing from
0.260% for the second quarter of 2020 and decreasing from 0.292%
for the third quarter of 2019. The increase from the second 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
the third quarter of 2020, second quarter of 2020, and third
quarter of 2019 we recognized a $1.0 million, $1.0 million, and
$0.5 million reduction in base fees, respectively, 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 impact
of these fulcrum fee arrangements as well as the decrease in
performance fees recognized is reflected in the decrease of the
weighted average fee rate from the third quarter of 2019.
The weighted average fee rate for Pzena funds
was 0.687% for the third quarter of 2020, increasing from 0.659%
for the second quarter of 2020, and from 0.680% for the third
quarter of 2019. The increase from the second quarter of 2020
reflects a decrease in fund expense cap reimbursements associated
with the closure of one Pzena mutual fund during the third quarter.
The increase from the third quarter of 2019 reflects a shift in
asset mix toward products in strategies that typically carry higher
fee rates.
Total operating expenses were $19.0 million for
the third quarter of 2020, decreasing from $19.2 million for the
second quarter of 2020 and from $19.9 million for the third quarter
of 2019. The decrease from the second quarter of 2020 and third
quarter of 2019 reflects a decrease in general and administrative
expenses, primarily driven by a decrease in travel and
entertainment expense and professional fees.
Operating Expenses (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
($ thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
September 30, |
|
June 30, |
|
September 30, |
|
2020 |
|
2020 |
|
2019 |
Compensation and Benefits
Expense |
$ |
15,808 |
|
|
$ |
15,578 |
|
|
$ |
16,012 |
|
General and Administrative
Expense |
|
3,183 |
|
|
|
3,575 |
|
|
|
3,905 |
|
Operating Expenses |
$ |
18,991 |
|
|
$ |
19,153 |
|
|
$ |
19,917 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended |
|
|
|
|
|
September 30, |
|
September 30, |
|
|
|
|
|
2020 |
|
2019 |
Compensation and Benefits
Expense |
|
|
|
|
$ |
50,526 |
|
|
$ |
49,220 |
|
General and Administrative
Expense |
|
|
|
|
|
11,180 |
|
|
|
12,186 |
|
Operating Expenses |
|
|
|
|
$ |
61,706 |
|
|
$ |
61,406 |
|
As of September 30, 2020, employee
headcount was 121, up from 120 at June 30, 2020, and from 119 at
September 30, 2019.
The operating margin was 44.1% for the third
quarter of 2020, compared to 36.4% for the second quarter of 2020,
and 46.3% for the third quarter of 2019. The increase in operating
margin from the second quarter of 2020 is primarily driven by the
increase in revenue.
Other income/ (expense) was income of
approximately $0.5 million for the third quarter of 2020, income of
$3.2 million for the second quarter of 2020, and income of less
than $0.1 million for the third quarter of 2019.
Other income/ (expense) primarily reflects the
fluctuations in the gains/ losses and other investment income
recognized by the Company on its direct equity investments, the
majority of which are held to satisfy obligations under its
deferred compensation plan. Other income/ (expense) also includes a
portion of gains/ (losses) and other investment income recognized
by external investors on their investments in investment
partnerships that the Company consolidates, which are offset in net
income attributable to non-controlling interests.
Other Income/ (Expense) (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
($ thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
September 30, |
|
June 30, |
|
September 30, |
|
2020 |
|
2020 |
|
2019 |
Net Interest and Dividend
Income |
$ |
187 |
|
|
$ |
145 |
|
|
$ |
431 |
|
Gains/ (Losses) and Other
Investment Income |
|
295 |
|
|
|
3,050 |
|
|
|
(342 |
) |
Other Income/ (Expense) |
|
52 |
|
|
|
47 |
|
|
|
(75 |
) |
GAAP Other Income/ (Expense) |
|
534 |
|
|
|
3,242 |
|
|
|
14 |
|
Outside Interests of
Investment Partnerships1 |
|
(83 |
) |
|
|
(234 |
) |
|
|
(4 |
) |
As Adjusted Other Income/ (Expense), Net of Outside Interests |
$ |
451 |
|
|
$ |
3,008 |
|
|
$ |
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended |
|
|
|
|
|
September 30, |
|
September 30, |
|
|
|
|
|
2020 |
|
2019 |
Net Interest and Dividend
Income |
|
|
|
|
$ |
572 |
|
|
$ |
1,070 |
|
Gains/ (Losses) and Other
Investment Income |
|
|
|
|
|
(6,165 |
) |
|
|
1,498 |
|
Other Income |
|
|
|
|
|
13 |
|
|
|
(174 |
) |
GAAP Other Income/ (Expense) |
|
|
|
|
|
(5,580 |
) |
|
|
2,394 |
|
Outside Interests of
Investment Partnerships1 |
|
|
|
|
|
(3 |
) |
|
|
(170 |
) |
As Adjusted Other Income/ (Expense), Net of Outside Interests |
|
|
|
|
$ |
(5,583 |
) |
|
$ |
2,224 |
|
1 Represents the non-controlling interest allocation of the
income of the Company's consolidated investment partnerships
to its external investors.
The Company recognized an income tax benefit of
$0.1 million for the third quarter of 2020, and income tax expenses
of $1.4 million for the second quarter of 2020 and $0.2 million for
the third quarter of 2019. The third quarter of 2020 income tax
benefit reflects a $1.6 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 2019
income tax expense 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, |
|
2020 |
|
2020 |
|
2019 |
Corporate Income Tax
Expense |
$ |
961 |
|
|
$ |
797 |
|
|
$ |
1,124 |
|
Unincorporated and Other
Business Tax Expense |
|
(1,044 |
) |
|
|
574 |
|
|
|
(878 |
) |
Income Tax Expense |
$ |
(83 |
) |
|
$ |
1,371 |
|
|
$ |
246 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended |
|
|
|
|
|
September 30, |
|
September 30, |
|
|
|
|
|
2020 |
|
2019 |
Corporate Income Tax
Expense |
|
|
|
|
$ |
2,129 |
|
|
$ |
3,540 |
|
Unincorporated and Other
Business Tax Expense |
|
|
|
|
|
151 |
|
|
|
613 |
|
Income Tax Expense |
|
|
|
|
$ |
2,280 |
|
|
$ |
4,153 |
|
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, |
|
2020 |
|
2020 |
|
2019 |
Operating Company
Allocation |
$ |
12,827 |
|
|
$ |
10,417 |
|
|
$ |
13,434 |
|
Outside Interests of
Investment Partnerships1 |
|
83 |
|
|
|
234 |
|
|
|
4 |
|
GAAP Net Income Attributable
to Non-Controlling Interests |
$ |
12,910 |
|
|
$ |
10,651 |
|
|
$ |
13,438 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended |
|
|
|
|
|
September 30, |
|
September 30, |
|
|
|
|
|
2020 |
|
2019 |
Operating Company
Allocation |
|
|
|
|
$ |
24,327 |
|
|
$ |
39,039 |
|
Outside Interests of
Investment Partnerships1 |
|
|
|
|
|
3 |
|
|
|
170 |
|
GAAP Net Income Attributable
to Non-Controlling Interests |
|
|
|
|
$ |
24,330 |
|
|
$ |
39,209 |
|
1 Represents the non-controlling interest allocation of the
income of the Company's consolidated investment partnerships to its
external investors.
On October 20, 2020, the Company's Board of
Directors 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 30, 2020 |
|
|
|
|
Payment
Date: |
November
20, 2020 |
|
|
|
|
During the last
twelve months, inclusive of the dividend noted above, the Company
declared total dividends of $0.55 per share of its Class A common
stock. |
Third Quarter
2020 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 21, 2020.
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
844-378-6482; Canada callers should dial 855-669-9657;
international callers should dial 412-317-5106. Please reference
the Pzena Investment Management call.
Replay: The conference call will be available
for replay through November 4, 2020, 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, 2020
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, |
|
2020 |
|
2019 |
|
(unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
Cash and Cash Equivalents |
$ |
49,235 |
|
|
$ |
52,480 |
|
Restricted Cash |
|
1,047 |
|
|
|
1,036 |
|
Due from Broker |
|
120 |
|
|
|
149 |
|
Advisory Fees Receivable |
|
29,507 |
|
|
|
32,887 |
|
Investments |
|
26,701 |
|
|
|
55,934 |
|
Prepaid Expenses and Other Assets |
|
5,267 |
|
|
|
4,876 |
|
Right-of-use Assets |
|
12,143 |
|
|
|
13,860 |
|
Deferred Tax Asset |
|
29,669 |
|
|
|
32,683 |
|
Property and Equipment, Net of Accumulated |
|
|
|
|
|
|
|
Depreciation of $5,679 and $4,765, respectively |
|
4,667 |
|
|
|
5,547 |
|
TOTAL ASSETS |
$ |
158,356 |
|
|
$ |
199,452 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
Accounts Payable and Accrued Expenses |
$ |
28,470 |
|
|
$ |
44,715 |
|
Due to Broker |
|
163 |
|
|
|
40 |
|
Securities Sold Short |
|
690 |
|
|
|
— |
|
Liability to Selling and Converting Shareholders |
|
28,652 |
|
|
|
28,652 |
|
Lease Liabilities |
|
12,482 |
|
|
|
14,235 |
|
Deferred Compensation Liability |
|
2,940 |
|
|
|
3,600 |
|
TOTAL LIABILITIES |
|
73,397 |
|
|
|
91,242 |
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
Total Pzena Investment Management, Inc.'s Equity |
|
25,695 |
|
|
|
31,444 |
|
Non-Controlling Interests |
|
59,264 |
|
|
|
76,766 |
|
TOTAL EQUITY |
|
84,959 |
|
|
|
108,210 |
|
TOTAL LIABILITIES AND EQUITY |
$ |
158,356 |
|
|
$ |
199,452 |
|
|
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, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
REVENUE |
$ |
33,948 |
|
|
$ |
37,065 |
|
|
$ |
98,758 |
|
|
$ |
112,318 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and Benefits
Expense |
|
15,808 |
|
|
|
16,012 |
|
|
|
50,526 |
|
|
|
49,220 |
|
General and Administrative
Expense |
|
3,183 |
|
|
|
3,905 |
|
|
|
11,180 |
|
|
|
12,186 |
|
TOTAL OPERATING EXPENSES |
|
18,991 |
|
|
|
19,917 |
|
|
|
61,706 |
|
|
|
61,406 |
|
Operating Income |
|
14,957 |
|
|
|
17,148 |
|
|
|
37,052 |
|
|
|
50,912 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income |
|
534 |
|
|
|
14 |
|
|
|
(5,580 |
) |
|
|
2,394 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Taxes |
|
15,491 |
|
|
|
17,162 |
|
|
|
31,472 |
|
|
|
53,306 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense |
|
(83 |
) |
|
|
246 |
|
|
|
2,280 |
|
|
|
4,153 |
|
Consolidated Net Income |
|
15,574 |
|
|
|
16,916 |
|
|
|
29,192 |
|
|
|
49,153 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net Income Attributable
to Non-Controlling Interests |
|
12,910 |
|
|
|
13,438 |
|
|
|
24,330 |
|
|
|
39,209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to
Pzena Investment Management, Inc. |
$ |
2,664 |
|
|
$ |
3,478 |
|
|
$ |
4,862 |
|
|
$ |
9,944 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per Share - Basic and
Diluted Attributable to Pzena Investment Management, Inc. Common
Stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income for Basic Earnings
per Share |
$ |
2,664 |
|
|
$ |
3,478 |
|
|
$ |
4,862 |
|
|
$ |
9,944 |
|
Basic Earnings per Share |
$ |
0.16 |
|
|
$ |
0.19 |
|
|
$ |
0.28 |
|
|
$ |
0.55 |
|
Basic Weighted Average Shares
Outstanding |
|
16,931,447 |
|
|
|
17,851,780 |
|
|
|
17,310,875 |
|
|
|
18,000,234 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income for Diluted
Earnings per Share1 |
$ |
12,374 |
|
|
$ |
13,768 |
|
|
$ |
4,862 |
|
|
$ |
39,793 |
|
Diluted Earnings per
Share1 |
$ |
0.16 |
|
|
$ |
0.19 |
|
|
$ |
0.28 |
|
|
$ |
0.54 |
|
Diluted Weighted Average
Shares Outstanding |
|
78,783,209 |
|
|
|
73,649,468 |
|
|
|
79,084,609 |
|
|
|
74,022,533 |
|
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.
A PDF is available
at: http://ml.globenewswire.com/Resource/Download/9689f827-9821-4ef8-af54-8f68c2bdd5b7
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