CALAMOS ASSET MANAGEMENT, INC 
By NAPERVILLE, Ill., April 24, 2014 /PRNewswire/ -- Calamos Asset Management, Inc. (NASDAQ: CLMS), a diversified global investment firm offering equity, lower-volatility equity(1), fixed income, convertible and alternative strategies, today reported first quarter 2014 results.
Highlights
Non-GAAP diluted earnings per share was $0.20 for the first quarter compared with $0.25 in the previous quarter and $0.24 in the first quarter of 2013.(2 )Non-GAAP net income attributable to Calamos Asset Management, Inc. (CAM) was $3.9 million for the quarter compared with $5.0 million last quarter and $5.1 million in the first quarter of 2013.
GAAP diluted earnings per share was $0.11 for the first quarter of 2014 compared with $0.54 in the previous quarter(3 )and $0.16 in the first quarter of 2013. Net income attributable to CAM was $2.1 million for the quarter compared with $10.9 million last quarter and $3.2 million in the first quarter of 2013.
Our total revenues for the current quarter were $63.9 million compared with $66.5 million in the previous quarter and $71.0 million in the first quarter a year ago. Operating margin was 22.0% for the first quarter, 33.0% in the previous quarter, and 31.2% in the first quarter of 2013.
Assets Under Management(4 )were $26.1 billion at March 31, 2014 compared with $26.5 billion at the end of last quarter and $28.3 billion at March 31, 2013. Net outflows were $574 million for the quarter compared with net outflows of $1.4 billion in the previous quarter and net outflows of $2.5 billion in the first quarter of 2013.
The Board of Directors of CAM declared a regular quarterly dividend of 12.5 cents per share payable on May 19, 2014 to shareholders of record on May 5, 2014.
Calamos Investments LLC (Calamos Investments) repurchased 2.3 million shares of CAM's common stock since the share repurchase program was announced in the first quarter of 2013, for a total cost of $25.4 million.
The table below highlights certain GAAP and non-GAAP financial measures:
Three Months Ended
------------------
March 31, December 31, March 31,
2014 2013 2013
---- ---- ----
(in millions)
Ending Assets
Under
Management $26,147 $26,543 $28,325
Average
Assets Under
Management $26,242 $26,712 $29,224
Net outflows $(574) $(1,421) $(2,467)
(in thousands,
except
earnings per
share)
Total
revenues $63,930 $66,522 $70,953
Total
operating
expenses $49,854 $44,579 $48,838
Operating
income $14,076 $21,943 $22,115
Operating
margin 22.0% 33.0% 31.2%
Net income
attributable
to CAM $2,139 $10,856 $3,234
Non-GAAP net
income
attributable
to CAM $3,913 $5,015 $5,061
Diluted
earnings per
share $0.11 $0.54 $0.16
Non-GAAP
diluted
earnings per
share $0.20 $0.25 $0.24
Business Commentary
-- We continue to be encouraged by our short-term performance as we have
seen improvement in our one-year results compared with a year ago, even
though our one-year performance was adversely impacted as investors
shifted from secular growth sectors to defensive sectors near the end of
the quarter.(5 )
1 Year 3 Years 5 Years 10 Years Since
Inception
2014 2013 2014 2013 2014 2013 2014 2013 2014 2013
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Percentage
of Morningstar
Calamos category
Funds as
beating of
the March
performance 31
average
for
their
respective 54% 8% 15% 33% 33% 45% 38% 43% 71% 69%
----------- --- --- --- --- --- --- --- --- --- ---
-- We experienced slowing of outflows during the quarter with respect to
prior periods. Outflows totaled $574 million in the first quarter of
2014 compared with $2.5 billion in the first quarter of 2013. We saw
continued outflows in our equity and lower-volatility equity strategies,
partially offset by inflows to convertible and market neutral income
strategies.
-- We remain committed to strategically expanding our product breadth to
meet the evolving investment needs of our clients. To this end, during
the quarter we filed with the U.S. Securities and Exchange Commission
(SEC) for a new closed-end fund. Furthermore, during the period we
experienced sustained investor interest in our alternative, convertible
and emerging markets strategies.
Assets Under Management and Flows
Assets Under Management as of March 31, 2014 were $26.1 billion, a decrease of $396 million from the end of the fourth quarter.
-- Net outflows were $574 million for the quarter, resulting primarily from
outflows from our equity and lower-volatility equity strategies.
-- The company's funds experienced net outflows of $195 million for the
quarter. Separate accounts had $379 million of net outflows for the
quarter.
-- Market appreciation was $178 million for the quarter, driven primarily
by equity and lower-volatility equity strategies.
-- The company's alternative strategies had net inflows of $334 million for
the quarter and convertible strategies had net inflows of $134 million.
Financial Discussion
Operating Income
First quarter 2014 revenues of $63.9 million decreased 10% from first quarter 2013 primarily due to a decrease in Average Assets Under Management. Total operating expenses for the first quarter were $49.9 million, an increase of 2% from $48.8 million in the first quarter of 2013 as a result of increases across all expense categories, except for distribution expenses. Operating income was $14.1 million for the first quarter versus $22.1 million in the first quarter of last year. Operating margin was 22.0% for the first quarter, down from 31.2% in the first quarter of 2013.
Non-Operating Income
Non-operating income (GAAP) was $118,000 for the first quarter of 2014, as presented in Table B. Non-GAAP non-operating income, net of redeemable non-controlling interest in partnerships,(6 )was $55,000 during the first quarter of 2014, as presented in Table B.
Financial Position
As of March 31, 2014, the corporate investment portfolio was $473.3 million, which included cash, cash equivalents, and investments that were principally comprised of investments in products that the company manages. The corporate investment portfolio is used to provide seed capital for new products, to maintain conservative levels of capital for the company's regulated subsidiaries, to fund the company's share repurchase program and to invest in other corporate strategic initiatives. The company's financial strength is also instrumental in maintaining the firm's investment-grade credit rating.
As of March 31, 2014, total debt was $92.1 million, of which $46.2 million is due on July 15, 2014. Total equity was $440.9 million.
As part of the share repurchase program to acquire up to 3 million shares of the company's common stock, as announced in the first quarter of 2013, Calamos Investments(7 )repurchased 1.0 million shares of CAM's common stock at an average price of $11.77 per share and a total cost of $12.2 million during the first quarter of 2014.
Market Capitalization
As of March 31, 2014, CAM, representing the public shares outstanding, owns 22.2% of the operating company, Calamos Investments, and the remaining 77.8% is privately owned by Calamos Family Partners, Inc. Because of this complex ownership structure, reported market capitalization does not reflect the entire value of the company, but rather only the market capitalization pertaining to CAM's 22.2% interest, which is publicly traded.
Investor Conference Call
Management will hold an investor conference call at 4 p.m. Central Time on Thursday, April 24, 2014. To access the live call and view management's presentation, visit the Investor Relations section of the company's website at www.calamos.com/investors. Alternatively, participants may listen to the live call by dialing 800.946.0786 in the U.S. or Canada (719.325.2325 internationally), then entering conference ID #5975560. A replay of the call will be available for one week following the date of the call by dialing 888.203.1112 in the U.S. or Canada (719.457.0820 internationally), then entering conference ID #5975560. The webcast also will be available on the Investor Relations section of the company's website at www.calamos.com/investors for at least 90 days following the date of the call.
Calamos Asset Management, Inc. (NASDAQ: CLMS) is a diversified global investment firm offering innovative investment strategies including equity, lower-volatility equity, fixed income, convertible and alternative investments. The firm offers strategies through separately managed portfolios, mutual funds, closed-end funds, private funds and UCITS funds. Clients include major corporations, pension funds, endowments, foundations and individuals, as well as the financial advisors and consultants who serve them. Headquartered in the Chicago metropolitan area, the firm also has offices in London and New York. For more information visit www.calamos.com.
Forward-Looking Statements & Important Risk Disclosures
From time to time, information or statements provided by us, including those within this news release, may contain certain forward-looking statements relating to future events, future financial performance, strategies, expectations, the competitive environment and regulations. Forward-looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. For a discussion concerning some of these and other risks, uncertainties and other important factors that could affect future results, see "Forward-Looking Information" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, where applicable, "Risk Factors" in our annual and quarterly reports filed with the U.S. Securities and Exchange Commission.
Past Performance is not a guarantee of future results. While the investment objective stated in a fund's prospectus may or may not reflect how the fund actually invests, the Morningstar category is assigned based on the underlying securities in each portfolio. Morningstar categories help investors and investment professionals make meaningful comparisons between funds. Morningstar data: © 2014 Morningstar, Inc. All rights reserved. The information contained herein is proprietary to Morningstar and/or its content providers; may not be copied or distributed; and is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
Investments in mutual funds are subject to risks, and you could lose money on your investment in the fund. There can be no assurance that the fund will achieve its investment objective. Your investment in the fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. The risks associated with an investment in the fund can increase during times of significant market volatility. The fund-specific principal risks are described below. More detailed information can be found in the fund's prospectus.
As a result of political or economic instability in foreign countries, there can be special risks associated with investing in foreign securities, including fluctuations in currency exchange rates, increased price volatility and difficulty obtaining information. In addition, emerging markets may present additional risk due to potential for greater economic and political instability in less developed countries.
Before investing carefully consider the fund's investment objectives, risks, charges and expenses. Please see the prospectus and summary prospectus containing this and other information at www.calamos.com or call 1-800-582-6959. Read it carefully.
Calamos Asset Management, Inc.
Consolidated Condensed Statements of Operations
(in thousands, except share data)
(Unaudited)
Three Months Ended
------------------
March 31, December 31, March 31,
2014 2013 2013
---- ---- ----
Revenues
Investment
management
fees $50,278 $52,512 $55,942
Distribution
and
underwriting
fees 12,989 13,338 14,328
Other 663 672 683
--- --- ---
Total
revenues 63,930 66,522 70,953
Expenses
Employee
compensation
and
benefits 23,996 18,098 22,565
Distribution
expenses 12,651 12,997 13,931
Marketing
and sales
promotion 3,705 4,192 3,389
General and
administrative 9,502 9,292 8,953
----- ----- -----
Total
operating
expenses 49,854 44,579 48,838
------ ------ ------
Operating
income 14,076 21,943 22,115
Non-
operating
income 118 21,854 1,800
--- ------ -----
Income
before
income tax
provision 14,194 43,797 23,915
Income tax
provision 1,362 108 1,976
----- --- -----
Net income 12,832 43,689 21,939
Net income
attributable
to non-
controlling
interest in
Calamos
Investments
LLC (10,630) (31,910) (17,997)
Net income
attributable
to
redeemable
non-
controlling
interest in
partnership
investments (63) (923) (708)
--- ---- ----
Net income
attributable
to CAM $2,139 $10,856 $3,234
====== ======= ======
Earnings per share:
Basic $0.11 $0.55 $0.16
===== ===== =====
Diluted $0.11 $0.54 $0.16
===== ===== =====
Weighted average shares outstanding:
Basic 19,079,163 19,620,371 20,301,373
========== ========== ==========
Diluted 19,805,828 20,214,360 20,836,996
========== ========== ==========
Supplemental Information:
Non-GAAP
net income
attributable
to CAM $3,913 $5,015 $5,061
====== ====== ======
Non-GAAP
diluted
earnings
per share $0.20 $0.25 $0.24
===== ===== =====
Calamos Asset Management, Inc.
Assets Under Management
(in millions)
(Unaudited)
Three Months Ended
March 31, December 31, March 31,
2014 2013 2013
---- ---- ----
Open-end Funds
Beginning
Assets
Under
Management $16,128 $15,679 $17,829
Sales 1,213 1,485 1,131
Redemptions (1,416) (1,818) (2,861)
Market
appreciation 84 782 726
--- --- ---
Ending
Assets
Under
Management 16,009 16,128 16,825
====== ====== ======
Average
Assets
Under
Management 16,017 15,940 17,485
====== ====== ======
Closed-end Funds
Beginning
Assets
Under
Management 6,266 6,019 5,500
Sales 8 - 86
Market
appreciation 63 247 148
--- --- ---
Ending
Assets
Under
Management 6,337 6,266 5,734
===== ===== =====
Average
Assets
Under
Management 6,290 6,157 5,678
===== ===== =====
Institutional Accounts
Beginning
Assets
Under
Management 3,081 3,900 5,191
Sales 93 23 103
Redemptions (452) (1,082) (863)
Market
appreciation 35 240 215
--- --- ---
Ending
Assets
Under
Management 2,757 3,081 4,646
===== ===== =====
Average
Assets
Under
Management 2,883 3,569 4,921
===== ===== =====
Managed Accounts
Beginning
Assets
Under
Management 1,068 1,020 1,135
Sales 19 29 49
Redemptions (39) (58) (112)
Market
appreciation
(depreciation) (4) 77 48
--- --- ---
Ending
Assets
Under
Management 1,044 1,068 1,120
===== ===== =====
Average
Assets
Under
Management 1,052 1,046 1,140
===== ===== =====
Total Assets Under
Management
Beginning
Assets
Under
Management 26,543 26,618 29,655
Sales 1,333 1,537 1,369
Redemptions (1,907) (2,958) (3,836)
Market
appreciation 178 1,346 1,137
--- ----- -----
Ending
Assets
Under
Management $26,147 $26,543 $28,325
======= ======= =======
Average
Assets
Under
Management $26,242 $26,712 $29,224
======= ======= =======
Ending Assets Under
Management
by Strategy
Equity $8,238 $8,609 $10,104
Lower-
volatility
Equity 4,841 5,423 6,929
Convertible 2,332 2,173 2,249
Enhanced
Fixed
Income 3,549 3,494 3,259
Alternative 3,921 3,563 2,696
Total
Return 2,788 2,772 2,475
High
Yield 358 361 399
Fixed
Income 120 148 214
--- --- ---
Ending
Assets
Under
Management $26,147 $26,543 $28,325
======= ======= =======
Table A
Calamos Asset Management, Inc.
Reconciliation of GAAP to Non-GAAP Diluted Earnings Per Share
(in thousands, except share data)
(Unaudited)
Three Months Ended
------------------
March 31, December 31, March 31,
2014 2013 2013
---- ---- ----
GAAP net income attributable to CAM $2,139 $10,856 $3,234
Adjustments:
Deferred tax amortization on intangible assets 1,979 1,979 1,979
Decrease in deferred tax valuation allowance - (3,926) -
Non-operating income, net of taxes (205) (3,894) (152)
Non-GAAP net income attributable to CAM $3,913 $5,015 $5,061
====== ====== ======
Diluted - Weighted average shares outstanding 19,805,828 20,214,360 20,836,996
========== ========== ==========
GAAP diluted earnings per share $0.11 $0.54 $0.16
Non-GAAP diluted earnings per share $0.20 $0.25 $0.24
Table A - Notes
Calamos Asset Management, Inc.
Notes to Reconciliation of GAAP to
Non-GAAP
The company provides investors
with certain adjusted, non-GAAP
financial measures including non-
GAAP net income attributable to
CAM and non-GAAP diluted
earnings per share. These non-
GAAP financial measures are
provided to supplement the
consolidated financial statements
presented on a GAAP basis. These
non-GAAP financial measures
adjust GAAP financial measures to
include the tax benefit from the
amortization of deferred taxes on
intangible assets and to exclude
the change in deferred tax
valuation allowance and CAM's
non-operating income, net of
taxes. The company believes these
adjustments are appropriate to
enhance an overall understanding
of operating financial
performance, as well as to
facilitate comparisons with
historical earnings results.
These adjustments to the
company's GAAP results are made
with the intent of providing
investors a more complete
understanding of the company's
underlying earnings results and
trends and marketplace
performance. In addition, these
non-GAAP financial measures are
among the primary indicators
management uses as a basis of
managing the company.
The presentation of this
additional information is not
meant to be considered in
isolation or as a substitute for
the directly comparable financial
measures prepared in accordance
with GAAP. Investors should
review the reconciliations of the
non-GAAP financial measures to
their most directly comparable
GAAP financial measures as
provided in Table A.
Non-GAAP net income attributable
to CAM is calculated by adjusting
the following items from GAAP net
income attributable to CAM:
(i) amortization of deferred taxes
on intangible assets associated
with the election under section
754 of the Internal Revenue Code
of 1986, as amended (Section 754
election);
(ii) change in deferred tax
valuation allowance; and
(iii) Non-operating income, net
of taxes.
Non-GAAP diluted earnings per
share is calculated by dividing
non-GAAP net income attributable
to CAM by diluted weighted
average shares outstanding.
The deferred tax assets from the
Section 754 election allows for a
quarterly reduction of
approximately $2.0 million in
future income taxes owed by the
company through 2019, to the
extent that a tax payable exists
during the quarter. As a result,
this cash savings will accrue
solely for the benefit of the
shareholders of the company's
common stock. The company
believes that adjusting this item
from the calculation of the above
non-GAAP items can be a useful
measure in allowing investors to
see the company's performance.
The change in the allowance on
the deferred tax asset is
excluded from the above non-GAAP
items as it may fluctuate in
future periods affecting prior
period comparisons. Non-
operating income is excluded from
the above non-GAAP items as it
can distort comparisons between
periods. As noted above, the
company believes that measures
excluding these items are useful
in analyzing operating trends and
allowing for more comparability
between periods, which may be
useful to investors.
The company believes that non-
GAAP net income attributable to
CAM and non-GAAP diluted
earnings per share are useful
measures of performance and may
be useful to investors, because
they provide measures of the
company's core business
activities adjusting for items
that are non-cash and costs that
may distort comparisons between
periods. These measures are
provided in addition to the
company's net income attributable
to CAM and diluted earnings per
share calculated under GAAP, but
are not substitutes for those
calculations.
Table B
Calamos Asset Management, Inc.
Non-Operating Income, Net of Redeemable Non-Controlling Interest in Partnership
Investments
(in thousands)
(Unaudited)
Three Months Ended
------------------
March 31, December 31, March 31,
2014 2013 2013
---- ---- ----
Interest
income $39 $48 $87
Interest
expense (1,504) (1,505) (1,506)
------ ------ ------
Net interest
expense (1,465) (1,457) (1,419)
Investment
income 1,520 23,405 3,176
Miscellaneous
other
income
(loss) 63 (94) 43
--- --- ---
Investment
and other
income 1,583 23,311 3,219
----- ------ -----
Non-
operating
income
(GAAP) 118 21,854 1,800
Net income
attributable
to
redeemable
non-
controlling
interest in
partnership
investments (63) (923) (708)
--- ---- ----
Non-GAAP
non-
operating
income, net
of
redeemable
non-
controlling
interest in
partnership
investments $55 $20,931 $1,092
=== ======= ======
Table C
Calamos Asset Management, Inc.
Summary of Corporate Investment Portfolio Returns
(in thousands)
(Unaudited)
Three Months Ended
------------------
March 31, December 31, March 31,
2014 2013 2013
---- ---- ----
Returns
reflected in
earnings
Investment
income $1,520 $23,405 $3,176
Net
income
attributable
to
redeemable
non-
controlling
interest
in
partnership
investments (63) (923) (708)
Returns
reflected in
equity
Net
unrealized
gain
reported
in
equity,
inclusive
of
non-
controlling
interest 1,702 4,386 6,327
Total
corporate
investment
portfolio
returns $3,159 $26,868 $8,795
====== ======= ======
Average
corporate
portfolio $417,172 $445,469 $383,064
Total
corporate
investment
portfolio
returns 0.8% 6.0% 2.3%
Table D
Calamos Asset Management, Inc.
Effective Income Tax Rate
(in thousands)
(Unaudited)
Three Months Ended
------------------
March 31, December 31, March 31,
2014 2013 2013
---- ---- ----
Income
tax
provision $1,362 $108 $1,976
Income
tax LLC
provision
attributable
to
non-
controlling
interest
in
Calamos
Investments (45) (19) (31)
--- --- ---
Income
tax
provision
attributable
to
CAM 1,317 89 1,945
Net
income
attributable
to
CAM 2,139 10,856 3,234
Income
before
taxes
attributable
to
CAM $3,456 $10,945 $5,179
====== ======= ======
CAM's
effective
income
tax
rate8 38.1% 0.8% 37.6%
(1) These
strategies
attempt
to
achieve
equity-
like
returns
with
lower
than
equity
market
risk by
managing
a
portfolio
that it
believes
will
exhibit
less
volatility
over full
market
cycles.
(2) See Table
A for a
more
detailed
description
of non-
GAAP
financial
measures,
how they
may be
useful to
management
and
investors
in
evaluating
the
company,
how they
may
differ
from non-
GAAP
financial
measures
disclosed
by other
companies,
and a
reconciliation
of such
adjusted
measures
to the
most
related
GAAP
financial
measures.
(3) A non-
operating
gain of
$3.9
million,
or $0.19
per
share,
related
to a
decrease
in the
company's
deferred
tax
valuation
allowance
and
investment
income,
net of
redeemable
non-
controlling
interest
in
partnership
investments
of $22.5
million,
or $0.20
per
share,
increased
GAAP
earnings
for the
fourth
quarter
of 2013.
4 Assets
Under
Management
do not
include
$791
million,
$834
million,
and $939
million
as of
March 31,
2014,
December
31, 2013,
and March
31, 2013,
respectively,
of assets
under
advisement
for which
the
company
provides
model
portfolio
design
and
oversight.
5 Past
performance
is not a
guarantee
of future
results.
See
Forward-
Looking
Statements
&
Important
Risk
Disclosures.
6 Management
believes
non-
operating
income,
net of
redeemable
non-
controlling
interest
in
partnership
investments
provides
comparability
of this
information
among
reporting
periods
and is an
effective
measure
for
reviewing
the
company's
non-
operating
contribution
to its
results.
7 Common
stock
purchased
under our
share
repurchase
program
is by
Calamos
Investments
LLC and
not
directly
for the
individual,
personal
accounts
of John
P.
Calamos,
Sr.
8 The income
tax
provision
for the
three
months
ended
December
31, 2013
includes
a
decrease
in the
valuation
allowance
of $3.9
million.
Excluding
this
allowance,
CAM's
effective
income
tax rate
would be
36.7%.
SOURCE Calamos Asset Management, Inc.
