COHEN & STEERS, INC. 
By NEW YORK, April 16, 2014 /PRNewswire/ -- Cohen & Steers, Inc. (NYSE: CNS) reported net income attributable to common stockholders of $19.4 million, or $0.43 per diluted share and $0.44 per basic share, for the quarter ended March 31, 2014, compared with $15.1 million, or $0.34 per share (diluted and basic), for the quarter ended March 31, 2013. Total revenue for the first quarter of 2014 was $72.8 million, an increase of 0.5% from $72.5 million for the first quarter of 2013.
The first quarter of 2013 results included after-tax expenses of approximately $0.10 per share associated primarily with the offering of Cohen & Steers MLP Income and Energy Opportunity Fund, Inc., a closed-end mutual fund. After adjusting for these items, earnings per share would have been $0.44.
Financial Highlights (Unaudited)
March 31, 2014 Compared with December 31, 2013
(in thousands, except per share data) Three Months Ended
------------------
March December 31, $ Change %
31, Change
2013
2014
----
Revenue $72,835 $73,432 $(597) (0.8%)
Expenses $45,239 $44,076 $1,163 2.6%
Operating income $27,596 $29,356 $(1,760) (6.0%)
Operating margin 37.9% 40.0% (209) bps
Total non-operating income $3,181 $1,971 $1,210 61.4%
Net income attributable to common stockholders $19,445 $19,413 $32 0.2%
Diluted earnings per share attributable to common stockholders $0.43 $0.43 $0.00 (0.2%)
Revenue
Total revenue for the first quarter of 2014 was $72.8 million, a decrease of $597,000 from $73.4 million for the fourth quarter of 2013. The decrease was primarily attributable to:
-- Lower portfolio consulting and other revenue which decreased $416,000,
primarily due to lower average assets under advisement from model-based
strategies; and
-- A decline in open-end mutual fund revenue of $201,000, as the increase
in average assets under management was more than offset by two fewer
days in the first quarter of 2014.
Expenses
Expenses for the first quarter of 2014 were $45.2 million, an increase of $1.2 million from $44.1 million for the fourth quarter of 2013. The increase was primarily due to the following:
-- An increase in employee compensation and benefits of $1.7 million,
primarily due to higher incentive compensation and higher amortization
of restricted stock units; and
-- Lower general and administrative expenses which decreased $325,000,
primarily due to lower marketing and IT related expenses.
Operating Margin
The company's operating margin decreased to 37.9% for the first quarter of 2014 compared with 40.0% for the three months ended December 31, 2013. The 209 bps decrease was primarily due to an increase in the compensation to revenue ratio, partially offset by a decrease in the G&A to revenue ratio.
Non-operating Income
Non-operating income, excluding net income attributable to redeemable noncontrolling interest, increased to $3.0 million for the three months ended March 31, 2014 compared with $2.0 million for the three months ended December 31, 2013, primarily due to higher earnings from the company's seed investments.
Assets Under Management Highlights (Unaudited)
March 31, 2014 Compared with December 31, 2013
(in millions) Assets Under
Management
As of
-----
By Investment Vehicle March December 31, $ Change %
31, Change
2014 2013
--- ---- ----
Institutional accounts $24,479 $22,926 $1,553 6.8%
Open-end mutual funds 15,148 14,016 1,132 8.1%
Closed-end mutual funds 9,404 8,965 439 4.9%
Total $49,031 $45,907 3,124 6.8%
======= =======
By Investment Strategy
----------------------
U.S. real estate $25,251 $23,116 $2,135 9.2%
Global/international real estate 9,721 9,498 223 2.3%
Preferred securities 5,126 4,722 404 8.6%
Global listed infrastructure 5,072 4,714 358 7.6%
Large cap value 2,857 2,907 (50) (1.7%)
Other 1,004 950 54 5.7%
Total $49,031 $45,907 3,124 6.8%
======= =======
Assets under management were $49.0 billion as of March 31, 2014, an increase of $3.1 billion from $45.9 billion at December 31, 2013. The increase from December 31, 2013 was due to market appreciation of $3.2 billion, partially offset by net outflows of $116 million.
Institutional Accounts
Assets under management for institutional accounts were $24.5 billion as of March 31, 2014, an increase of 6.8% from $22.9 billion at December 31, 2013. The increase from December 31, 2013 was due to the following:
-- Market appreciation of $1.8 billion, including $1.2 billion from U.S.
real estate, $350 million from global/international real estate and $100
million from global listed infrastructure;
-- Net outflows of $176 million from subadvisory relationships, including
$164 million from global/international real estate and $23 million from
large cap value, partially offset by net inflows of $21 million into
commodities (which is included in "Other" above); and
-- Net outflows of $44 million from advisory relationships, including net
outflows of $117 million from large cap value, partially offset by net
inflows of $84 million into global listed infrastructure.
Open-End Mutual Funds
Assets under management for open-end mutual funds were a record $15.1 billion as of March 31, 2014, an increase of $1.1 billion from $14.0 billion at December 31, 2013. The increase from December 31, 2013 was due to the following:
-- Market appreciation of $1.0 billion, including $847 million from U.S.
real estate, $101 million from preferred securities and $56 million from
global/international real estate; and
-- Net inflows of $104 million, including net inflows of $179 million into
preferred securities, partially offset by net outflows of $76 million
from U.S. real estate.
Closed-End Mutual Funds
Assets under management for closed-end mutual funds were $9.4 billion as of March 31, 2014, an increase of 4.9% from $9.0 billion at December 31, 2013. The increase from December 31, 2013 was due to market appreciation of $439 million.
Balance Sheet Information
As of March 31, 2014, cash, cash equivalents and investments were $177 million. As of March 31, 2014, stockholders' equity was $231 million and the company had no debt.
Conference Call Information
Cohen & Steers will host a conference call tomorrow, April 17, 2014 at 11:00 a.m. (ET) to discuss the company's first quarter results. Investors and analysts can access the live conference call by dialing (800) 741-3792 (U.S.) or (212) 231-2903 (international); passcode: 21713820. Participants should plan to register at least 10 minutes before the conference call begins.
A replay of the call will be available for two weeks starting at approximately 1:00 p.m. (ET) on April 17, 2014 and can be accessed at (800) 633-8284 (U.S.) or (402) 977-9140 (international); passcode: 21713820. Internet access to the webcast, which includes audio (listen-only), will be available on the company's website at www.cohenandsteers.com under "Company - Investor Relations." The webcast will be archived on the website for one month.
About Cohen & Steers
Founded in 1986, Cohen & Steers is a leading global investment manager with a long history of innovation and a focus on real assets, including real estate, infrastructure and commodities. Headquartered in New York City, with offices in London, Hong Kong, Tokyo and Seattle, Cohen & Steers serves institutional and individual investors around the world.
Forward-Looking Statements
This press release and other statements that Cohen & Steers may make may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect management's current views with respect to, among other things, the company's operations and financial performance. You can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates" or the negative versions of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these forward-looking statements. The company believes that these factors include, but are not limited to, the risks described in the "Risk Factors" section of the company's Annual Report on Form 10-K for the year ended December 31, 2013 ("Form 10-K"), which is accessible on the Securities and Exchange Commission's website at www.sec.gov and on the company's website at www.cohenandsteers.com. These factors are not exhaustive and should be read in conjunction with the other cautionary statements that are included in the company's Form 10-K and other filings with the Securities and Exchange Commission. The company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
Cohen & Steers, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
For the Periods Ended
(in thousands, except per share data)
Three Months Ended % Change From
------------------ -------------
March December 31, March December 31, March
31, 31, 31,
2013
2013 2013
2014 2013
---- ----
Revenue
Investment advisory and administration fees $67,564 $67,658 $65,394
Distribution and service fees 3,470 3,557 3,434
Portfolio consulting and other 1,801 2,217 3,631
----- -----
Total revenue 72,835 73,432 72,459 (0.8%) 0.5%
------ ------ ------
Expenses
Employee compensation and benefits 24,035 22,377 23,377
Distribution and service fees 8,304 8,127 15,081
General and administrative 11,093 11,418 11,179
Depreciation and amortization 1,262 1,496 1,347
Amortization, deferred commissions 545 658 765
--- --- ---
Total expenses 45,239 44,076 51,749 2.6% (12.6%)
------ ------ ------
Operating income 27,596 29,356 20,710 (6.0%) 33.2%
------ ------ ------
Non-operating income
Interest and dividend income-net 239 773 546
Gain from trading securities-net 983 344 1,624
Gain from available-for-sale securities-net 1,076 751 491
Equity in earnings of affiliates 935 418 536
Other losses (52) (315) (271)
--- ---- ----
Total non-operating income 3,181 1,971 2,926 61.4% 8.7%
----- ----- -----
Income before provision for income taxes 30,777 31,327 23,636 (1.8%) 30.2%
Provision for income taxes 11,177 11,899 8,135
------ ------ -----
Net income 19,600 19,428 15,501 0.9% 26.4%
Less: Net income attributable to redeemable (155) (15) (360)
noncontrolling interest
Net income attributable to common stockholders $19,445 $19,413 $15,141 0.2% 28.4%
======= ======= =======
Earnings per share attributable to common stockholders
Basic $0.44 $0.44 $0.34 (0.5%) 27.0%
===== ===== =====
Diluted $0.43 $0.43 $0.34 (0.2%) 26.7%
===== ===== =====
Dividends declared per share
Quarterly $0.22 $0.20 $0.20 10.0% 10.0%
===== ===== =====
Special $ - $1.00 $ - * *
=== === ===== == ===
Weighted average shares outstanding
Basic 44,633 44,325 44,137
====== ====== ======
Diluted 45,483 45,338 44,882
====== ====== ======
* Not meaningful
Cohen & Steers, Inc. and Subsidiaries
Assets Under Management (Unaudited)
By Investment Vehicle
For the Periods Ended
(in millions)
Three Months Ended % Change From
------------------ -------------
March December 31, March December 31, March
31, 31, 31,
2013 2013 2013
2014 2013
---- ----
Institutional Accounts
----------------------
Assets under management, beginning of period $22,926 $23,291 $24,850
------- ------- -------
Inflows 432 549 246
Outflows (652) (1,232) (590)
---- ------ ----
Net outflows (220) (683) (344)
Market appreciation 1,773 318 1,575
----- --- -----
Total increase (decrease) 1,553 (365) 1,231
Assets under management, end of period $24,479 $22,926 $26,081 6.8% (6.1%)
======= ======= =======
Percentage of total assets under management 49.9% 49.9% 52.9%
==== ==== ====
Average assets under management for period $23,858 $23,643 $25,372 0.9% (6.0%)
======= ======= =======
Open-End Mutual Funds
---------------------
Assets under management, beginning of period $14,016 $14,262 $12,962
------- ------- -------
Inflows 1,523 1,103 1,508
Outflows (1,419) (1,373) (849)
------ ------ ----
Net inflows (outflows) 104 (270) 659
Market appreciation 1,028 24 826
----- --- ---
Total increase (decrease) 1,132 (246) 1,485
Assets under management, end of period $15,148 $14,016 $14,447 8.1% 4.9%
======= ======= =======
Percentage of total assets under management 30.9% 30.5% 29.3%
==== ==== ====
Average assets under management for period $14,607 $14,336 $13,788 1.9% 5.9%
======= ======= =======
Closed-End Mutual Funds
-----------------------
Assets under management, beginning of period $8,965 $8,783 $7,985
------ ------ ------
Inflows - 50 458
Outflows - (24) -
--- --- ---
Net inflows - 26 458
Market appreciation 439 156 350
--- --- ---
Total increase 439 182 808
--- --- ---
Assets under management, end of period $9,404 $8,965 $8,793 4.9% 6.9%
====== ====== ======
Percentage of total assets under management 19.2% 19.5% 17.8%
==== ==== ====
Average assets under management for period $9,241 $8,991 $8,251 2.8% 12.0%
====== ====== ======
Total
-----
Assets under management, beginning of period $45,907 $46,336 $45,797
------- ------- -------
Inflows 1,955 1,702 2,212
Outflows (2,071) (2,629) (1,439)
------ ------ ------
Net (outflows) inflows (116) (927) 773
Market appreciation 3,240 498 2,751
----- --- -----
Total increase (decrease) 3,124 (429) 3,524
----- ---- -----
Assets under management, end of period $49,031 $45,907 $49,321 6.8% (0.6%)
======= ======= =======
Average assets under management for period $47,706 $46,970 $47,411 1.6% 0.6%
======= ======= =======
Cohen & Steers, Inc. and Subsidiaries
Assets Under Management - Institutional Accounts (Unaudited)
By Investment Relationship
For the Periods Ended
(in millions)
Three Months Ended % Change From
------------------ -------------
March December 31, March December 31, March
31, 31, 31,
2013 2013 2013
2014 2013
---- ----
Subadvisory
-----------
Assets under management, beginning of period $16,693 $16,833 $17,582
------- ------- -------
Inflows 311 385 147
Outflows (487) (745) (504)
---- ---- ----
Net outflows (176) (360) (357)
Market appreciation 1,407 220 1,096
----- --- -----
Total increase (decrease) 1,231 (140) 739
Assets under management, end of period $17,924 $16,693 $18,321 7.4% (2.2%)
======= ======= =======
Percentage of total assets under management 73.2% 72.8% 70.2%
==== ==== ====
Average assets under management for period $17,480 $17,077 $17,910 2.4% (2.4%)
======= ======= =======
Advisory
--------
Assets under management, beginning of period $6,233 $6,458 $7,268
------ ------ ------
Inflows 121 164 99
Outflows (165) (487) (86)
---- ---- ---
Net (outflows) inflows (44) (323) 13
Market appreciation 366 98 479
--- --- ---
Total increase (decrease) 322 (225) 492
Assets under management, end of period $6,555 $6,233 $7,760 5.2% (15.5%)
====== ====== ======
Percentage of total assets under management 26.8% 27.2% 29.8%
==== ==== ====
Average assets under management for period $6,378 $6,566 $7,462 (2.9%) (14.5%)
====== ====== ======
Total Institutional Accounts
----------------------------
Assets under management, beginning of period $22,926 $23,291 $24,850
------- ------- -------
Inflows 432 549 246
Outflows (652) (1,232) (590)
---- ------ ----
Net outflows (220) (683) (344)
Market appreciation 1,773 318 1,575
----- --- -----
Total increase (decrease) 1,553 (365) 1,231
----- ---- -----
Assets under management, end of period $24,479 $22,926 $26,081 6.8% (6.1%)
======= ======= =======
Average assets under management for period $23,858 $23,643 $25,372 0.9% (6.0%)
======= ======= =======
Cohen & Steers, Inc. and Subsidiaries
Assets Under Management (Unaudited)
By Investment Strategy
For the Periods Ended
(in millions)
Three Months Ended % Change From
------------------ -------------
March December 31, March December 31, March
31, 31, 31,
2013 2013 2013
2014 2013
---- ----
U.S. Real Estate
----------------
Assets under management, beginning of period $23,116 $23,237 $22,613
------- ------- -------
Inflows 756 766 753
Outflows (829) (813) (450)
---- ---- ----
Net (outflows) inflows (73) (47) 303
Market appreciation (depreciation) 2,208 (74) 1,539
----- --- -----
Total increase (decrease) 2,135 (121) 1,842
----- ---- -----
Assets under management, end of period $25,251 $23,116 $24,455 9.2% 3.3%
======= ======= =======
Percentage of total assets under management 51.5% 50.4% 49.6%
==== ==== ====
Average assets under management for period $24,362 $23,614 $23,541 3.2% 3.5%
======= ======= =======
Global/International Real Estate
--------------------------------
Assets under management, beginning of period $9,498 $9,630 $11,155
------ ------ -------
Inflows 485 345 317
Outflows (664) (510) (748)
---- ---- ----
Net outflows (179) (165) (431)
Market appreciation 402 33 553
--- --- ---
Total increase (decrease) 223 (132) 122
Assets under management, end of period $9,721 $9,498 $11,277 2.3% (13.8%)
====== ====== =======
Percentage of total assets under management 19.8% 20.7% 22.9%
==== ==== ====
Average assets under management for period $9,595 $9,694 $11,239 (1.0%) (14.6%)
====== ====== =======
Preferred Securities
--------------------
Assets under management, beginning of period $4,722 $4,820 $4,364
------ ------ ------
Inflows 358 194 594
Outflows (180) (340) (147)
---- ---- ----
Net inflows (outflows) 178 (146) 447
Market appreciation 226 48 118
--- --- ---
Total increase (decrease) 404 (98) 565
Assets under management, end of period $5,126 $4,722 $4,929 8.6% 4.0%
====== ====== ======
Percentage of total assets under management 10.5% 10.3% 10.0%
==== ==== ====
Average assets under management for period $4,946 $4,820 $4,626 2.6% 6.9%
====== ====== ======
Global Listed Infrastructure
----------------------------
Assets under management, beginning of period $4,714 $4,469 $3,509
------ ------ ------
Inflows 302 134 488
Outflows (224) (57) (18)
---- --- ---
Net inflows 78 77 470
Market appreciation 280 168 197
--- --- ---
Total increase 358 245 667
Assets under management, end of period $5,072 $4,714 $4,176 7.6% 21.5%
====== ====== ======
Percentage of total assets under management 10.3% 10.3% 8.5%
==== ==== ===
Average assets under management for period $5,011 $4,661 $3,630 7.5% 38.0%
====== ====== ======
Large Cap Value
---------------
Assets under management, beginning of period $2,907 $3,492 $3,465
------ ------ ------
Inflows 9 8 30
Outflows (155) (902) (64)
---- ---- ---
Net outflows (146) (894) (34)
Market appreciation 96 309 315
--- --- ---
Total (decrease) increase (50) (585) 281
Assets under management, end of period $2,857 $2,907 $3,746 (1.7%) (23.7%)
====== ====== ======
Percentage of total assets under management 5.8% 6.3% 7.6%
=== === ===
Average assets under management for period $2,822 $3,279 $3,654 (13.9%) (22.8%)
====== ====== ======
Other
-----
Assets under management, beginning of period $950 $688 $691
---- ---- ----
Inflows 45 255 30
Outflows (19) (7) (12)
--- --- ---
Net inflows 26 248 18
Market appreciation 28 14 29
--- --- ---
Total increase 54 262 47
Assets under management, end of period $1,004 $950 $738 5.7% 36.0%
====== ==== ====
Percentage of total assets under management 2.0% 2.1% 1.5%
=== === ===
Average assets under management for period $970 $902 $721 7.5% 34.5%
==== ==== ====
Total
-----
Assets under management, beginning of period $45,907 $46,336 $45,797
----- ----- -----
Inflows 1,955 1,702 2,212
Outflows (2,071) (2,629) (1,439)
------ ------ ------
Net (outflows) inflows (116) (927) 773
Market appreciation 3,240 498 2,751
----- --- -----
Total increase (decrease) 3,124 (429) 3,524
---- -----
Assets under management, end of period $49,031 $45,907 $49,321 6.8% (0.6%)
===== ===== =====
Average assets under management for period $47,706 $46,970 $47,411 1.6% 0.6%
===== ===== =====
SOURCE Cohen & Steers, Inc.
