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GAMCO Investors, Inc. Reports Third Quarter 2017 Results

  • AUM grew 8.2% to $43.1 billion year to year
  • Revenues were $88.3 million versus $87.7 million in the 2016 third quarter
  • Third quarter diluted earnings per share was $0.55 compared to $1.03 a year ago
  • Adjusted earnings per share was $0.70 compared to $0.69 a year ago

RYE, N.Y.--(BUSINESS WIRE)-- GAMCO Investors, Inc. (“GAMCO”) (NYSE: GBL) today reported third quarter 2017 revenues of $88.3 million, net income of $16.6 million and earnings of $0.55 per diluted share compared to third quarter 2016 revenues of $87.7 million, net income of $30.9 million and earnings of $1.03 per diluted share. On an adjusted basis, 2017 third quarter net income was $21.2 million and earnings were $0.70 per diluted share versus 2016 third quarter net income of $20.4 million and earnings of $0.69 per diluted share. Adjusted net income and adjusted earnings per share are non-GAAP performance measures and are explained and reconciled with the most comparable GAAP numbers starting on page 10.

Our third quarter 2017 AUM was up 8.2% from the prior year and 3.4% from $41.7 billion at June 30, 2017. Market appreciation of $1.8 billion was partially offset by net outflows of $213 million and distributions of $140 million.

Average AUM was $42.3 billion for the third quarter of 2017 versus $41.5 billion for the second quarter of 2017 and $39.9 billion for the third quarter of 2016.

As previously disclosed, the Company deferred the compensation of the Chief Executive Officer for all of 2016 and the first half of 2017. This provided the Company with enhanced flexibility to pay down debt related to the spin-off of Associated Capital in November 2015. Deferred compensation expense is recognized ratably over the vesting period, which resulted in a $23.1 million increase in compensation expense and management fee year over year. In addition, the Company incurred additional expenses of $2.9 million due to the accelerated vesting of RSAs and the launching of our 16th closed-end fund.

As a result, operating income was $23.4 million in the third quarter of 2017 compared to $48.1 million in the year ago quarter.

Financial Highlights
Third Quarter YTD
($'s in 000's except AUM and per share data) 2017 2016 2017 2016
AUM - end of period (in millions) $ 43,089 $ 39,806 $ 43,089 $ 39,806
AUM - average (in millions) 42,323 39,883 41,696 38,727
GAAP
Revenues $ 88,341 $ 87,721 $ 261,858 $ 253,050
Operating income 23,393 48,076 105,496 139,765
Income before income taxes 20,434 45,347 98,002 131,658
Effective tax rate 18.8% 31.9% 34.4% 35.9%
Net income 16,600 30,861 64,314 84,429
Net income per fully diluted share $ 0.55 $ 1.03 $ 2.14 $ 2.85
Non-GAAP
Operating income $ 35,672 $ 35,365 $ 105,575 $ 101,397
Adjusted income before income taxes 33,749 32,636 99,117 93,290
Adjusted effective tax rate 37.1% 37.6% 37.8% 37.8%
Adjusted net income 21,214 20,376 61,664 58,023
Adjusted net income per fully diluted share $ 0.70 $ 0.69 $ 2.05 $ 1.97
Weighted average diluted shares outstanding 28,926 29,185 28,930 29,222
Shares outstanding at September 30 29,168 29,548 29,168 29,548
See the reconciliation to the comparable U.S. GAAP measures starting on page 10.

Revenues

  • Total revenues for the third quarter of 2017 grew to $88.3 million from $87.7 million in the prior year.
  • Investment advisory fees advanced to $77.3 million in the third quarter of 2017 from $76.0 million in the third quarter of 2016. Third quarter revenues from our open-end and closed-end funds were $50.0 million, an increase from $48.9 million in the year ago quarter. Institutional and Private Wealth Management accounted for $26.0 million of the revenues in 2017 versus $26.2 million in 2016. SICAV revenues surged to $1.3 million in 2017 from $0.8 million in 2016.
  • Distribution fees from our open-end equity funds and other income were $11.0 million for the third quarter 2017, versus the $11.8 million in the prior year quarter.

Operating Income

As noted, there were several distinct items in both quarters that impacted our results. Operating income before these adjustments was $35.7 million in the third quarter of 2017 versus $35.4 million in the prior year period. The cash compensation deferrals impacted operating costs by a negative swing of $23.1 million, composed of a $9.8 million expense increase in the third quarter of 2017 versus a $13.3 million expense reduction in the third quarter of 2016. Further, in the 2017 third quarter, the Company recorded an additional $1.8 million of compensation expense due to the accelerated vesting of the majority of the GAMCO RSAs. GAMCO also incurred $1.1 million in costs related to launching our 16th closed-end fund, the Gabelli Merger Plus+ Trust plc. The net result of these items reduced reported operating income to $23.4 million in the third quarter of 2017 from $48.1 million in the year ago quarter.

Other expense

We recognized $3.0 million in net other expenses in the third quarter versus net other expenses of $2.7 million in the third quarter of 2016. In the third quarter of 2017, we recorded $3.9 million of charitable contribution expense. Interest expense decreased by $0.5 million year over year, reflecting a decline in outstanding debt to $204.0 million at September 30, 2017 from $233.9 million at September 30, 2016. Investment income for 2017 was $3.6 million vs. $0.4 million in 2016.

Income Taxes

The Company’s effective tax rate (“ETR”) for the quarter ended September 30, 2017 was 18.8% versus 31.9% for the quarter ended September 30, 2016. The current year quarter’s ETR benefited from the reversal of certain tax accruals totaling $3.4 million as well as a $1.0 million tax benefit related to the charitable contribution.

Balance Sheet

As anticipated, GAMCO has made substantial progress in reducing its debt since the November 2015 spin-off of Associated Capital Group, Inc. As a result, Standard & Poor’s recently revised its outlook to stable from negative and reaffirmed our debt rating at BBB-.

We ended the quarter with cash of $61.1 million, investments of $101.4 million, and gross debt of $204.0 million. In this regard, we note that $60.0 million of our cash and investments are held in escrow for benefit of the Convertible note holder. We have $500 million available on our universal shelf registration. Together with earnings from operations, the shelf provides us with flexibility to pay down debt, do acquisitions, lift-outs, seed new investment strategies, and co-invest, as well as to fund shareholder compensation, including share repurchases and dividends.

In total, there is $57.2 million of deferred cash compensation that has yet to be recorded and will be during the remainder of 2017, 2018 and 2019, in accordance with GAAP.

Subsequent to quarter end, we reduced the 4% PIK note due November 30, 2020 to $50 million as we redeemed an additional $20 million.

Deferred Compensation

GAMCO entered into a third agreement with its Chief Executive Officer on September 30, 2017 which will defer his cash compensation for the fourth quarter of 2017 until April 2019 under terms that are similar to the prior two deferrals.

Returns to Shareholder

During the quarter ended September 30, 2017, we repurchased 131,480 shares at an average price of $29.42 per share for a total investment of $3.9 million. We also distributed $0.6 million in dividends. Since our IPO in February 1999, we have returned $1.9 billion in total to shareholders comprised of $1.0 billion of spin-offs, $490.4 million in the form of dividends and $447.4 million through stock buybacks of approximately 10.2 million shares.

On November 7, 2017, GAMCO’s Board of Directors declared a regular quarterly dividend of $0.02 per share payable on January 10, 2018 to its Class A and Class B shareholders of record on December 27, 2017.

Business and Investment Highlights

  • On July 19, 2017, we launched our 16th closed-end fund and second on the London Stock Exchange, the Gabelli Merger Plus+ Trust plc. The fund, which trades under the symbol GMP, raised $100 million.
  • On September 18, 2017, the Ellsworth Growth and Income Fund Ltd. completed its initial preferred offering. The Fund issued $30 million of 5.25% Series A Cumulative Preferred Shares which are perpetual, non-callable for five years.
  • On September 26, 2017, the Gabelli Multimedia Trust completed its offering of $50 million of 5.125% Series E Cumulative Preferred Stock. The preferred stock is perpetual, non-callable for five years, and was issued at $25 per share.

About GAMCO Investors, Inc.

GAMCO Investors, Inc., through its subsidiaries, manages private advisory accounts (GAMCO Asset Management Inc.) and open-end funds and closed-end funds (Gabelli Funds, LLC).

September 30, September 30,
2017 2016
Equities:
Open-end Funds $ 13,762 $ 13,799
Closed-end Funds 7,668 7,178
Institutional & PWM - direct (a) 13,893 13,245
Institutional & PWM - sub-advisory 5,346 3,542
SICAV 504 267 (b)
Total Equities 41,173 38,031
Fixed Income:
Money-Market Fund 1,890 1,738
Institutional & PWM 26 37
Total Fixed Income 1,916 1,775
Total Assets Under Management $ 43,089 $ 39,806
(a) Includes $280 million and $286 million of Money Market Fund AUM at September 30, 2017 and September 30, 2016, respectively.
(b) Adjusted to include $225 million of Merger Arbitrage assets.

The Company reported Assets Under Management as follows (in millions):
Table I: Fund Flows - 3rd Quarter 2017
Fund
Market distributions,
June 30, appreciation/ Net cash net of September 30,
2017 (depreciation) flows reinvestments 2017
Equities:
Open-end Funds $ 13,574 $ 517 $ (305 ) $ (24 ) $ 13,762
Closed-end Funds 7,359 249 176 (116 ) 7,668
Institutional & PWM - direct 13,437 613 (157 ) - 13,893
Institutional & PWM - sub-advisory 5,048 368 (70 ) - 5,346
SICAV (a) 421 10 73 - 504
Total Equities 39,839 1,757 (283 ) (140 ) 41,173
Fixed Income:
Money-Market Fund 1,813 4 73 - 1,890
Institutional & PWM 29 - (3 ) - 26
Total Fixed Income 1,842 4 70 - 1,916
Total Assets Under Management $ 41,681 $ 1,761 $ (213 ) $ (140 ) $ 43,089
(a) Adjusted to include $371 million of Merger Arbitrage assets at June 30, 2017.
Table II: Fund Flows - Year to date September 2017
Fund
Market distributions,
December 31, appreciation/ Net cash net of September 30,
2016 (depreciation) flows reinvestments 2017
Equities:
Open-end Funds $ 13,462 $ 1,354 $ (1,009 ) $ (45 ) $ 13,762
Closed-end Funds 7,150 712 162 (356 ) 7,668
Institutional & PWM - direct 13,441 1,523 (1,071 ) - 13,893
Institutional & PWM - sub-advisory 3,783 522 1,041 (b) - 5,346
SICAV (a) 320 29 155 - 504
Total Equities 38,156 4,140 (722 ) (401 ) 41,173
Fixed Income:
Money-Market Fund 1,767 9 114 - 1,890
Institutional & PWM 31 - (5 ) - 26
Total Fixed Income 1,798 9 109 - 1,916
Total Assets Under Management $ 39,954 $ 4,149 $ (613 ) $ (401 ) $ 43,089
(a) Adjusted to include $270 million of Merger Arbitrage assets at December 31, 2016.
(b) Includes $1.2 billion from being approved as the sub-advisor on two sub-advisory entities as of February 27, 2017.
Table III
GAMCO INVESTORS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
For the Quarter Ended
September 30,
2017 2016
Investment advisory and incentive fees $ 77,328 $ 75,952
Distribution fees and other income 11,013 11,769
Total revenues 88,341 87,721
Compensation costs 42,919 21,233
Distribution costs 11,665 11,568
Other operating expenses 5,429 5,681
Total expenses 60,013 38,482
Operating income before management fee 28,328 49,239
Investment income 3,586 426
Interest expense (2,688 ) (3,155 )
Shareholder-designated contribution (3,857 ) -
Other expense, net (2,959 ) (2,729 )
Income before management fee and income taxes 25,369 46,510
Management fee expense 4,935 1,163
Income before income taxes 20,434 45,347
Income tax expense 3,834 14,486
Net income attributable to GAMCO Investors, Inc. $ 16,600 $ 30,861
Net income per share attributable to GAMCO Investors, Inc.:
Basic $ 0.57 $ 1.06
Diluted $ 0.55 $ 1.03
Weighted average shares outstanding:
Basic 28,926 29,185
Diluted 31,173 30,406
Actual shares outstanding (a) 29,168 29,548
Notes:
(a) Includes 164,050 and 427,290 of RSAs, respectively.
See GAAP to non-GAAP reconciliation on page 8.
Table IV
GAMCO INVESTORS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
For the Nine Months Ended
September 30,
2017 2016
Investment advisory and incentive fees $ 228,942 $ 219,594
Distribution fees and other income 32,916 33,456
Total revenues 261,858 253,050
Compensation costs 97,634 62,130
Distribution costs 33,373 32,786
Other operating expenses 15,900 14,993
Total expenses 146,907 109,909
Operating income before management fee 114,951 143,141
Investment income 4,632 1,622
Interest expense (8,269 ) (9,729 )
Shareholder-designated contribution (3,857 ) -
Other expense, net (7,494 ) (8,107 )
Income before management fee and income taxes 107,457 135,034
Management fee expense 9,455 3,376
Income before income taxes 98,002 131,658
Income tax expense 33,688 47,229
Net income attributable to GAMCO Investors, Inc. $ 64,314 $ 84,429
Net income per share attributable to GAMCO Investors, Inc.:
Basic $ 2.22 $ 2.89
Diluted $ 2.14 $ 2.85
Weighted average shares outstanding:
Basic 28,930 29,222
Diluted 31,144 29,811
Actual shares outstanding (a) 29,168 29,548
Notes:
(a) Includes 164,050 and 427,290 of RSAs, respectively.
See GAAP to non-GAAP reconciliation on page 8.
Table V
GAMCO INVESTORS, INC.
UNAUDITED QUARTERLY CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
2017 2016
1st 2nd 3rd 1st 2nd 3rd 4th
Quarter Quarter Quarter Full Year Quarter Quarter Quarter Quarter Full Year
Income Statement Data:
Revenues $ 85,917 $ 87,600 $ 88,341 $ 261,858 $ 81,385 $ 83,944 $ 87,721 $ 99,950 $ 353,000
Expenses 41,310 45,584 60,013 146,907 35,363 36,064 38,482 44,777 154,686

Operating income before management fee

44,607 42,016 28,328 114,951 46,022 47,880 49,239 55,173 198,314
Investment income 509 537 (271 ) 775 591 605 426 1,483 3,105
Interest expense (2,832 ) (2,749 ) (2,688 ) (8,269 ) (3,406 ) (3,168 ) (3,155 ) (2,945 ) (12,674 )
Other expense, net (2,323 ) (2,212 ) (2,959 ) (7,494 ) (2,815 ) (2,563 ) (2,729 ) (1,462 ) (9,569 )

Income before management fee and income taxes

42,284 39,804 25,369 107,457 43,207 45,317 46,510 53,711 188,745
Management fee expense 2,164 2,356 4,935 9,455 1,080 1,133 1,163 3,142 6,518
Income before income taxes 40,120 37,448 20,434 98,002 42,127 44,184 45,347 50,569 182,227
Income tax expense 15,300 14,554 3,834 33,688 16,102 16,641 14,486 17,877 65,106

Net income attributable to GAMCO Investors, Inc.

$ 24,820 $ 22,894 $ 16,600 $ 64,314 $ 26,025 $ 27,543 $ 30,861 $ 32,692 $ 117,121

Net income per share attributable to GAMCO Investors, Inc.:

Basic $ 0.86 $ 0.79 $ 0.57 $ 2.22 $ 0.89 $ 0.94 $ 1.06 $ 1.12 $ 4.01
Diluted $ 0.82 $ 0.76 $ 0.55 $ 2.14 $ 0.88 $ 0.93 $ 1.03 $ 1.07 $ 3.92
Weighted average shares outstanding:
Basic 28,970 28,896 28,926 28,930 29,247 29,234 29,185 29,062 29,182
Diluted 31,160 31,100 31,173 31,144 29,684 29,522 30,406 31,241 30,170

Reconciliation of non-GAAP financial measures to GAAP:

Operating income before management fee

44,607 42,016 28,328 114,951 46,022 47,880 49,239 55,173 198,314
Deduct: management fee expense 2,164 2,356 4,935 9,455 1,080 1,133 1,163 3,142 6,518
Operating income $ 42,443 $ 39,660 $ 23,393 $ 105,496 $ 44,942 $ 46,747 $ 48,076 $ 52,031 $ 191,796

Operating margin before management fee

51.9 % 48.0 % 32.1 % 43.9 % 56.5 % 57.0 % 56.1 % 55.2 % 56.2 %

Operating margin after management fee

49.4 % 45.3 % 26.5 % 40.3 % 55.2 % 55.7 % 54.8 % 52.1 % 54.3 %
Notes on Non-GAAP Financial Measures:

Operating income before management fee is used by management to evaluate its business operations. We believe this measure is useful in illustrating the operating results of GAMCO Investors, Inc. (the "Company") as management fee expense is based on pre-tax income before management fee expense, which includes non-operating items including investment gains and losses from the Company's proprietary investment portfolio and interest expense.

Table VI
GAMCO INVESTORS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except per share data)
September 30, December 31, September 30,
2017 2016 2016
ASSETS

Cash and cash equivalents (includes restricted cash of $95 and $0, respectively)

$ 61,097 $ 39,812 $ 33,852

Investments (includes restricted investments in securities of $59,954 and $0, respectively)

101,425 37,285 32,889
Receivable from brokers 1,342 453 344
Other receivables 31,641 50,756 32,429
Income tax receivable and deferred tax asset 24,941 9,349 10,634
Other assets 10,580 11,574 11,120
Total assets $ 231,026 $ 149,229 $ 121,268
LIABILITIES AND EQUITY
Payable to brokers $ 13,311 $ 66 $ 10,203
Income taxes payable and deferred tax liabilities 3,215 3,815 164
Compensation payable (a) 82,896 42,384 31,469
Accrued expenses and other liabilities 32,091 35,656 44,574
Sub-total 131,513 81,921 86,410
5.875% Senior notes (due June 1, 2021) 24,138 24,120 24,115
4.5% Convertible note (due August 15, 2021) 109,862 109,835 109,826
4% PIK note (due November 30, 2020) 70,000 100,000 100,000
Total debt 204,000 233,955 233,941
Total liabilities 335,513 315,876 320,351
GAMCO Investors, Inc.'s stockholders' deficit (104,487 ) (166,647 ) (199,083 )
Total liabilities and equity $ 231,026 $ 149,229 $ 121,268
(a) Excludes $57.2 million of DCCA expense that is not yet recorded under GAAP.

Non-GAAP information and reconciliation:

GAMCO’s non-GAAP measures include adjusted income before taxes, adjusted effective tax rate, adjusted net income and adjusted net income per fully diluted share. GAMCO’s calculation of these non-GAAP measures may not be comparable to similarly titled measures of other companies due to potential differences between companies in the method of calculation. As a result, the use of these non-GAAP measures has limitations and should not be considered superior to, in isolation from, or a substitute for, related U.S. GAAP measures.

These non-GAAP measures allow management and investors to view operating trends, perform analytical comparisons and benchmark performance between periods to understand operating performance without regard to items that we do not consider to be a component of our core operating performance. Management uses these measures in its financial, investment and operational decision-making processes, for internal reporting and as part of its forecasting and budgeting processes. For these reasons we believe these non-GAAP measures are useful for our investors.

Adjusted income before taxes, adjusted effective tax rate, adjusted net income and adjusted net income per fully diluted share can be used by investors to review our results on a consistent basis. Examples of adjustments to these measures include the GAAP impact of the 2016 DCCA and First Half 2017 DCCA that were put in place to enable the Company to more quickly pay down its debt, the acceleration of outstanding RSAs, charitable contributions and closed-end fund launch expenses.

The following tables reconcile adjusted income before taxes, adjusted effective tax rate, adjusted net income and adjusted net income per share to their closest GAAP equivalent:

For the three months ended September 30, 2017
Reported First Half RSA
GAAP 2017 DCCA 2016 DCCA Acceleration Other Adjusted
Total revenues $ 88,341 $ - $ - $ - $ - $ 88,341
Compensation costs 42,919 (4,816 ) (3,415 ) (1,796 ) - 32,892
Distribution costs 11,665 - - - (1,068 ) 10,597
Other operating expenses 5,429 - - - - 5,429
Total expenses 60,013 (4,816 ) (3,415 ) (1,796 ) (1,068 ) 48,918
Operating income before management fee 28,328 4,816 3,415 1,796 1,068 39,423
Other expense, net (2,959 ) - - - 1,036 (1,923 )
Income before management fee and income taxes 25,369 4,816 3,415 1,796 2,104 37,500
Management fee expense 4,935 (886 ) (688 ) 180 210 3,751
Income before income taxes 20,434 5,702 4,103 1,616 1,894 33,749
Income tax expense 3,834 2,167 1,559 (113 ) 5,088 12,535
Net income attributable to GAMCO Investors, Inc. $ 16,600 $ 3,535 $ 2,544 $ 1,729 $ (3,194 ) $ 21,214
Net income per share attributable to GAMCO Investors, Inc.:
Basic $ 0.57 $ 0.12 $ 0.09 $ 0.06 $ (0.11 ) $ 0.73
Diluted $ 0.55 $ 0.11 $ 0.08 $ 0.06 $ (0.10 ) $ 0.70
For the three months ended September 30, 2016
Reported
GAAP 2016 DCCA Other Adjusted
Total revenues $ 87,721 $ - $ - $ 87,721
Compensation costs 21,233 10,885 - 32,118
Distribution costs 11,568 - (638 ) 10,930
Other operating expenses 5,681 - - 5,681
Total expenses 38,482 10,885 (638 ) 48,729
Operating income before management fee 49,239 (10,885 ) 638 38,992
Other expense, net (2,729 ) - - (2,729 )
Income before management fee and income taxes 46,510 (10,885 ) 638 36,263
Management fee expense 1,163 2,400 64 3,627
Income before income taxes 45,347 (13,285 ) 574 32,636
Income tax expense 14,486 (5,075 ) 2,849 12,260
Net income attributable to GAMCO Investors, Inc. $ 30,861 $ (8,210 ) $ (2,275 ) $ 20,376
Net income per share attributable to GAMCO Investors, Inc.:
Basic $ 1.06 $ (0.28 ) $ (0.08 ) $ 0.70
Diluted $ 1.03 $ (0.27 ) $ (0.07 ) $ 0.69
For the nine months ended September 30, 2017
Reported First Half RSA
GAAP 2017 DCCA 2016 DCCA Acceleration Other Adjusted
Total revenues $ 261,858 $ - $ - $ - $ - $ 261,858
Compensation costs 97,634 14,390 (9,174 ) (5,479 ) - 97,371
Distribution costs 33,373 - - - (1,068 ) 32,305
Other operating expenses 15,900 - - - - 15,900
Total expenses 146,907 14,390 (9,174 ) (5,479 ) (1,068 ) 145,576
Operating income before management fee 114,951 (14,390 ) 9,174 5,479 1,068 116,282
Other expense, net (7,494 ) - - - 1,036 (6,458 )
Income before management fee and income taxes 107,457 (14,390 ) 9,174 5,479 2,104 109,824
Management fee expense 9,455 2,666 (2,172 ) 548 210 10,707
Income before income taxes 98,002 (17,056 ) 11,346 4,931 1,894 99,117
Income tax expense 33,688 (6,594 ) 4,350 921 5,088 37,453
Net income attributable to GAMCO Investors, Inc. $ 64,314 $ (10,462 ) $ 6,996 $ 4,010 $ (3,194 ) $ 61,664
Net income per share attributable to GAMCO Investors, Inc.:
Basic $ 2.22 $ (0.36 ) $ 0.24 $ 0.14 $ (0.11 ) $ 2.13
Diluted $ 2.14 $ (0.34 ) $ 0.22 $ 0.13 $ (0.10 ) $ 2.05
For the nine months ended September 30, 2016
Reported
GAAP 2016 DCCA Other Adjusted
Total revenues $ 253,050 $ - $ - $ 253,050
Compensation costs 62,130 32,016 - 94,146
Distribution costs 32,786 - (638 ) 32,148
Other operating expenses 14,993 - - 14,993
Total expenses 109,909 32,016 (638 ) 141,287
Operating income before management fee 143,141 (32,016 ) 638 111,763
Other expense, net (8,107 ) - - (8,107 )
Income before management fee and income taxes 135,034 (32,016 ) 638 103,656
Management fee expense 3,376 6,926 64 10,366
Income before income taxes 131,658 (38,942 ) 574 93,290
Income tax expense 47,229 (14,811 ) 2,849 35,267
Net income attributable to GAMCO Investors, Inc. $ 84,429 $ (24,131 ) $ (2,275 ) $ 58,023
Net income per share attributable to GAMCO Investors, Inc.:
Basic $ 2.89 $ (0.83 ) $ (0.08 ) $ 1.99
Diluted $ 2.85 $ (0.81 ) $ (0.08 ) $ 1.97

SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

The financial results set forth in this press release are preliminary. 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 could cause our actual results to differ from our expectations or beliefs include 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, 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 Form 10-K 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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20171107006762/en/

GAMCO Investors, Inc.
Kieran Caterina or Diane M. LaPointe
SVPs and Co-Chief Accounting Officers
914-921-5149 or 7763
or
For further information please visit
www.gabelli.com

Source: GAMCO Investors, Inc.