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News   Press Releases

GAMCO Investors, Inc. Reports Record Second Quarter Earnings

GAMI | August 7, 2018

GAMCO Investors, Inc. Reports Record Second Quarter Earnings

  • Average AUM for quarter was $40.6 billion vs. $41.8 billion in 2017 quarter
  • Second Quarter Net Income of $31.6 million +38.0% from Year Ago Quarter
  • 25.5% Effective Tax Rate in 2018 second quarter vs. 38.9% in comparable 2017 quarter
  • Fully Diluted EPS for quarter was $1.10 versus $0.76 a year ago

GAMCO Investors, Inc. (“GAMCO”) (NYSE: GBL) today reported second quarter 2018 revenues of $87.2 million, net income of $31.6 million, and earnings of $1.10 per diluted share. This compares to second quarter 2017 revenues of $87.6 million, net income of $22.9 million, and earnings of $0.76 per diluted share.

In July 2018, Standard and Poor’s reaffirmed their investment grade rating on our company which they initially provided in December 2017 with a stable outlook reflecting our financial condition.

Average AUM was $40.6 billion for the second quarter of 2018 versus $41.8 billion for the second quarter of 2017 and $42.5 billion for the first quarter of 2018.

Our second quarter 2018 ending AUM was $40.7 billion as compared to $41.7 billion at June 30, 2017 and $40.9 billion at March 31, 2018. Market appreciation was $0.9 billion, outflows were $0.9 billion and distributions, net of reinvestments, were $0.2 billion.

Revenues

  • Total revenues for the second quarter of 2018 were $87.2 million compared with $87.6 million in the prior year.
  • Investment advisory fees rose to $77.3 million in the second quarter of 2018 from $76.6 million in the second quarter of 2017. Revenues from our open-end and closed-end funds were flat at $49.1 million, compared to $49.2 million in the year-ago quarter. Institutional and Private Wealth Management generated $26.8 million of the revenues in 2018 compared to $26.4 million in 2017. SICAV revenues grew to $1.5 million in the second quarter of 2018 from $1.0 million in the prior period.
  • Distribution fees from our open-end equity funds and other income were $9.9 million for the second quarter of 2018 versus $11.0 million in the prior-year quarter.
Financial Highlights                
Second Quarter YTD
($'s in 000's except AUM and per share data) 2018 2017 2018 2017
 
AUM - average (in millions) $ 40,613 $ 41,822 41,496 41,377
AUM - end of period (in millions) 40,671 41,681 $ 40,671 $ 41,681
                                 
 
Revenues $ 87,193 $ 87,600 $ 174,690 $ 173,517
 
Operating income 41,373 39,660 82,629 82,103
 
Income before income taxes 42,386 37,448 77,587 77,568
Effective tax rate 25.5 % 38.9 % 24.2 % 38.5 %
 
Net income 31,582 22,894 58,843 47,714
 
Net income per fully diluted share   $ 1.10       $ 0.76       $ 2.04       $ 1.58    
 
Weighted average diluted shares outstanding 28,819 31,100 28,867 31,130
 
Shares outstanding at June 30, 28,986 29,301 28,986 29,301

Operating Income

Operating income was $41.4 million in the second quarter of 2018 versus $39.7 million in the prior-year period. Higher amortization of deferred compensation, a non-cash charge, impacted operating costs by an incremental $18.6 million. The previously announced waiver of CEO compensation beginning March 1, 2018 boosted second quarter operating income by $17.2 million. Additionally, during the second quarter of 2018, the CEO waived $6 million from one of the three deferred compensation agreements. Excluding GAAP treatment of the deferral, but reflecting the lower compensation expense due to the waivers, adjusted operating income was $52.6 million in the second quarter of 2018 versus $32.3 million in the year-ago quarter. See pages 10 and 11 for a reconciliation of GAAP operating income to this adjusted operating income.

Other income/(expense), net

Mark to market investment gains were $1.9 million in the second quarter of 2018 versus gains of $0.5 million in the prior year quarter. Year-over-year interest expense was lower by $1.8 million.

Income Taxes

The Company’s effective tax rate (“ETR”) for the quarter ended June 30, 2018 was 25.5% versus 38.9% for the quarter ended June 30, 2017. This was primarily attributable to the provisions of the Tax Cuts and Jobs Act.

Shareholder Designated Charitable Contribution Program

Our firm has long held the belief that generating returns for our stakeholders, while important, is not the only factor in measuring our corporate success. The importance of the way we and others conduct business is a key facet to our principles. As evidence of this, we have been involved in the field of responsible investing since 1987. Along these lines, and consistent with the firm’s commitment to Environmental, Social & Governance (ESG) principles, we have always focused on corporate governance, transparency and evaluated corporate responsibility of corporate managements. In our program of corporate giving, our shareholder designated charitable contributions program, GAMCO shareholders select which organizations will be recipients of charitable grants from the firm. This year, the majority of our shareholders registered their shares and are eligible to select a charity to receive a $0.20 per share contribution approved by your Board. With this year’s distribution, we will have donated more than $22 million to over 150 charities across the United States since the inception of our program in 2013.

Business Highlights

  • In May, the Gabelli Utility Trust completed a significantly over-subscribed rights offering raising $48.5 million.

Balance Sheet

We ended the quarter with cash and investments of $75.5 million and gross debt of $122.2 million. Gross debt includes the deferred compensation payable of $78.0 million, net of tax benefit.

The balance sheet only includes the $73.7 million of deferred compensation expensed to date. The remaining $30.3 million from two of the deferral agreements will be recorded in the second half of 2018 and in 2019, ratably over the vesting periods, in accordance with GAAP.

On July 2, 2018, $28.3 million of the deferred compensation vested and was paid in cash. We will recognize an income tax benefit of $7.1 million in 2018.

Returns to Shareholder

During the quarter ended June 30, 2018, we purchased 137,189 shares at an average price of $25.81 per share for a total investment of $3.5 million. We also distributed $0.6 million in dividends. Since our IPO in February 1999, we have returned $2.0 billion to shareholders consisting of $1.0 billion of spin-offs, $492.2 million in the form of dividends, and $460.0 million through stock buybacks of approximately 10.6 million shares.

On August 7, 2018, GAMCO’s Board of Directors declared a regular quarterly dividend of $0.02 per share payable on September 25, 2018 to its Class A and Class B shareholders of record on September 10, 2018. The Board is evaluating the amount of future dividends.

About GAMCO Investors, Inc.

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

The Company reported Assets Under Management as follows (in millions):
   
June 30, June 30,
2018 2017
Equities:
Open-end Funds $ 12,906 $ 13,574
Closed-end Funds 7,778 7,359
Institutional & PWM - direct (a) 11,982 13,437
Institutional & PWM - sub-advisory 5,459 5,048
SICAV (b)   559   421
Total Equities   38,684   39,839
Fixed Income:
100% U.S. Treasury Fund 1,961 1,813
Institutional & PWM   26   29
Total Fixed Income   1,987   1,842
Total Assets Under Management $ 40,671 $ 41,681

(a)

  

Includes $311 million and $300 million of 100% U.S. Treasury Fund AUM at June 30, 2018 and June 30, 2017, respectively.

(b)

Adjusted to include Merger Arbitrage assets of $371 million at June 30, 2017.
 
Table I: Fund Flows - 2nd Quarter 2018
        Fund  
Market distributions,
March 31, appreciation/ Net cash net of June 30,
2018 (depreciation)   flows reinvestments 2018
Equities:
Open-end Funds $ 12,964 $ 331 $ (381 ) $ (8 ) $ 12,906
Closed-end Funds 7,768 201 (49 ) (142 ) 7,778
Institutional & PWM - direct 12,392 113 (523 ) - 11,982
Institutional & PWM - sub-advisory 5,251 226 (18 ) - 5,459
SICAV   527   (11 )   43     -     559
Total Equities   38,902   860     (928 )   (150 )   38,684
Fixed Income:
100% U.S. Treasury Fund 1,922 8 31 - 1,961
Institutional & PWM   30   -     (4 )   -     26
Total Fixed Income   1,952   8     27     -     1,987
Total Assets Under Management $ 40,854 $ 868   $ (901 ) $ (150 ) $ 40,671
 
Table II: Fund Flows - Year to date June 30, 2018
        Fund  
Market distributions,
December 31, appreciation/ Net cash net of June 30,
2017 (depreciation) flows reinvestments 2018
Equities:
Open-end Funds $ 13,747 $ 23 $ (847 ) $ (17 ) $ 12,906
Closed-end Funds 8,053 17 (38 ) (254 ) 7,778
Institutional & PWM - direct 13,420 (191 ) (1,247 ) - 11,982
Institutional & PWM - sub-advisory 5,432 68 (41 ) - 5,459
SICAV   510   (15 )   64     -     559
Total Equities   41,162   (98 )   (2,109 )   (271 )   38,684
Fixed Income:
100% U.S. Treasury Fund 1,870 15 76 - 1,961
Institutional & PWM   31   -     (5 )   -     26
Total Fixed Income   1,901   15     71     -     1,987
Total Assets Under Management $ 43,063 $ (83 ) $ (2,038 ) $ (271 ) $ 40,671
 
Table III    
 
GAMCO INVESTORS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
 
For the Quarter Ended
June 30,
2018 2017
 
Investment advisory and incentive fees $ 77,334 $ 76,625
Distribution fees and other income   9,859     10,975  
Total revenues 87,193 87,600
 
Compensation costs 28,952 29,437
Distribution costs 9,852 10,795
Other operating expenses   5,534     5,352  
Total expenses 44,338 45,584
 
Operating income before management fee 42,855 42,016
 
Investment income 1,935 537
Interest expense   (922 )   (2,749 )
Other income/(expense), net   1,013     (2,212 )
 
Income before management fee and income taxes 43,868 39,804
Management fee expense   1,482     2,356  
Income before income taxes 42,386 37,448
Income tax expense   10,804     14,554  
Net income attributable to GAMCO Investors, Inc. $ 31,582   $ 22,894  
 
Net income per share attributable to GAMCO Investors, Inc.:
Basic $ 1.10   $ 0.79  
 
Diluted $ 1.10   $ 0.76  
 
Weighted average shares outstanding:
Basic   28,777     28,896  
 
Diluted   28,819     31,100  
 
Actual shares outstanding (a)   28,986     29,301  
 
Notes:
(a) Includes 268,500 and 420,240 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 Six Months Ended
June 30,
2018 2017
 
Investment advisory and incentive fees $ 154,682 $ 151,614
Distribution fees and other income   20,008     21,903  
Total revenues 174,690 173,517
 
Compensation costs 54,902 54,715
Distribution costs 20,056 21,708
Other operating expenses   10,987     10,471  
Total expenses 85,945 86,894
 
Operating income before management fee 88,745 86,623
 
Investment income (2,920 ) 1,046
Interest expense   (2,122 )   (5,581 )
Other expense, net   (5,042 )   (4,535 )
 
Income before management fee and income taxes 83,703 82,088
Management fee expense   6,116     4,520  
Income before income taxes 77,587 77,568
Income tax expense   18,744     29,854  
Net income attributable to GAMCO Investors, Inc. $ 58,843   $ 47,714  
 
Net income per share attributable to GAMCO Investors, Inc.:
Basic $ 2.04   $ 1.65  
 
Diluted $ 2.04   $ 1.58  
 
Weighted average shares outstanding:
Basic   28,846     28,933  
 
Diluted   28,867     31,130  
 
Actual shares outstanding (a)   28,986     29,301  
 
Notes:
(a) Includes 268,500 and 420,240 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)
 
2018 2017
1st 2nd 1st 2nd 3rd 4th
Quarter Quarter Full Year Quarter Quarter Quarter Quarter Full Year
Income Statement Data:
 
Revenues $ 87,497 $ 87,193 $ 174,690 $ 85,917 $ 87,600 $ 88,341 $ 98,666 $ 360,524
 
Expenses   41,607     44,338     85,945     41,310     45,584     60,013     54,931     201,838  
 
Operating income before
management fee 45,890 42,855 88,745 44,607 42,016 28,328 43,735 158,686
 
Investment income (4,855 ) 1,935 (2,920 ) 509 537 (271 ) (2,747 ) (1,972 )
Interest expense   (1,200 )   (922 )   (2,122 )   (2,832 )   (2,749 )   (2,688 )   (1,891 )   (10,160 )
Other income/(expense), net (6,055 ) 1,013 (5,042 ) (2,323 ) (2,212 ) (2,959 ) (4,638 ) (12,132 )
 
Income before management
fee and income taxes 39,835 43,868 83,703 42,284 39,804 25,369 39,097 146,554
Management fee expense   4,634     1,482     6,116     2,164     2,356     4,935     4,211     13,666  
Income before income taxes 35,201 42,386 77,587 40,120 37,448 20,434 34,886 132,888
Income tax expense   7,940     10,804     18,744     15,300     14,554     3,834     21,391     55,079  
Net income attributable to
GAMCO Investors, Inc. $ 27,261   $ 31,582   $ 58,843   $ 24,820   $ 22,894   $ 16,600   $ 13,495   $ 77,809  
 
Net income per share
attributable to GAMCO
Investors, Inc.:
Basic $ 0.94   $ 1.10   $ 2.04   $ 0.86   $ 0.79   $ 0.57   $ 0.46   $ 2.68  
 
Diluted $ 0.94   $ 1.10   $ 2.04   $ 0.82   $ 0.76   $ 0.55   $ 0.46   $ 2.60  
 
Weighted average shares outstanding:
Basic   28,916     28,777     28,846     28,970     28,896     28,926     29,103     28,980  
 
Diluted   28,916     28,819     28,867     31,160     31,100     31,173     30,336     30,947  
 
Reconciliation of non-GAAP
financial measures to GAAP:
Operating income before
management fee 45,890 42,855 88,745 44,607 42,016 28,328 43,735 158,686
Deduct: management fee expense   4,634     1,482     6,116     2,164     2,356     4,935     4,211     13,666  
Operating income $ 41,256   $ 41,373   $ 82,629   $ 42,443   $ 39,660   $ 23,393   $ 39,524   $ 145,020  
 
Operating margin before
management fee   52.4 %   49.1 %   50.8 %   51.9 %   48.0 %   32.1 %   44.3 %   44.0 %
Operating margin after
management fee   47.2 %   47.4 %   47.3 %   49.4 %   45.3 %   26.5 %   40.1 %   40.2 %
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)
 
June 30, December 31, June 30,
2018 2017 2017
 
ASSETS
 
Cash and cash equivalents $ 41,488 $ 17,821 $ 90,405
Investments 33,955 36,790 35,225
Receivable from brokers 2,993 1,578 843
Other receivables 34,273 45,621 33,707
Deferred tax asset and income tax receivable 17,177 15,615 19,361
Other assets   10,275     10,861     11,390  
 
Total assets $ 140,161   $ 128,286   $ 190,931  
 
LIABILITIES AND EQUITY
 
Payable to brokers $ 6,329 $ 14,926 $ 4,670
Income taxes payable and deferred tax liabilities 3,242 3,128 3,486
Compensation payable (a) 97,626 82,907 53,642
Accrued expenses and other liabilities   33,677     34,454     36,186  
Sub-total 140,874 135,415 97,984
 
5.875% Senior notes (due June 1, 2021) 24,156 24,144 24,132
4.5% Convertible note (due August 15, 2021) - - 109,853
4% PIK note (due November 30, 2020) 20,000 50,000 80,000
1.6% AC Note (due February 28, 2018)   -     15,000     -  
Total debt   44,156     89,144     213,985  
Total liabilities 185,030 224,559 311,969
 
GAMCO Investors, Inc.'s stockholders' deficit   (44,869 )   (96,273 )   (121,038 )
 
Total liabilities and equity $ 140,161   $ 128,286   $ 190,931  

(a) Excludes $30.3 million, $59.0 million and $67.5 million of DCCA expense that is not yet recorded under GAAP as of June 30, 2018, December 31, 2017 and June 30, 2017, respectively.

 

Non-GAAP information and reconciliation:

GAMCO’s non-GAAP measures include adjusted operating income, 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 operating income, 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 Deferred Cash Compensation Agreement (“DCCA”), First Half 2017 DCCA, and the Fourth Quarter 2017 DCCA that were put in place to enable the Company to more quickly pay down its debt.

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 June 30, 2018
  Impact of   Impact of    
Reported Fourth Quarter First Half Impact of
GAAP 2017 DCCA 2017 DCCA 2016 DCCA Adjusted
 
Total revenues $ 87,193 $ - $ - $ - $ 87,193
 
Compensation costs 28,952 (2,289 ) (2,107 ) (5,355 ) 19,201
Distribution costs 9,852 - - - 9,852
Other operating expenses   5,534     -     -     -     5,534
Total expenses 44,338 (2,289 ) (2,107 ) (5,355 ) 34,587
 
Operating income before management fee 42,855 2,289 2,107 5,355 52,606
 
Other income/(expense), net 1,013 - - - 1,013
 
Income before management fee and income taxes 43,868 2,289 2,107 5,355 53,619
Management fee expense   1,482     (419 )   (33 )   (1,030 )   -
Income before income taxes 42,386 2,708 2,140 6,385 53,619
Income tax expense   10,804     677     535     1,596     13,612
Net income attributable to GAMCO Investors, Inc. $ 31,582   $ 2,031   $ 1,605   $ 4,789   $ 40,007
 
Net income per share attributable to GAMCO Investors, Inc.:
Basic $ 1.10   $ 0.07   $ 0.06   $ 0.17   $ 1.39
Diluted $ 1.10   $ 0.07   $ 0.06   $ 0.17   $ 1.39
 
Reconciliation of non-GAAP financial measures to GAAP:
 
Operating income before management fee $ 42,855 $ 2,289 $ 2,107 $ 5,355 $ 52,606
Deduct: management fee expense   (1,482 )   419     33     1,030     -
Operating income $ 41,373   $ 2,708   $ 2,140   $ 6,385   $ 52,606
 
  For the three months ended June 30, 2017
     
Reported Impact of Impact of
GAAP 2017 DCCA 2016 DCCA Non-GAAP
 
Total revenues $ 87,600 $ - $ - $ 87,600
 
Compensation costs 29,437 9,666 (3,260 ) 35,843
Distribution costs 10,795 - - 10,795
Other operating expenses   5,352     -     -     5,352  
Total expenses 45,584 9,666 (3,260 ) 51,990
 
Operating income before management fee 42,016 (9,666 ) 3,260 35,610
 
Other expense, net (2,212 ) - - (2,212 )
 
Income before management fee and income taxes 39,804 (9,666 ) 3,260 33,398
Management fee expense   2,356     1,688     (704 )   3,340  
Income before income taxes 37,448 (11,354 ) 3,964 30,058
Income tax expense   14,554     (4,413 )   1,541     11,682  
Net income attributable to GAMCO Investors, Inc. $ 22,894   $ (6,941 ) $ 2,423   $ 18,376  
 
Net income per share attributable to GAMCO Investors, Inc.:
Basic $ 0.79   $ (0.24 ) $ 0.08   $ 0.64  
Diluted $ 0.76   $ (0.22 ) $ 0.08   $ 0.61  
 
Reconciliation of non-GAAP financial measures to GAAP:
 
Operating income before management fee $ 42,016 $ (9,666 ) $ 3,260 $ 35,610
Deduct: management fee expense   (2,356 )   (1,688 )   704     (3,340 )

Operating income

 $ 39,660   $ (11,354 ) $ 3,964   $ 32,270  
 
  For the six months ended June 30, 2018
  Impact of   Impact of    
Reported Fourth Quarter First Half Impact of
GAAP 2017 DCCA 2017 DCCA 2016 DCCA Non-GAAP
 
Total revenues $ 174,690 $ - $ - $ - $ 174,690
 
Compensation costs 54,902 (3,680 ) (1,894 ) (2,339 ) 46,989
Distribution costs 20,056 - - - 20,056
Other operating expenses   10,987     -     -     -     10,987  
Total expenses 85,945 (3,680 ) (1,894 ) (2,339 ) 78,032
 
Operating income before management fee 88,745 3,680 1,894 2,339 96,658
 
Other expense, net (5,042 ) - - - (5,042 )
 
Income before management fee and income taxes 83,703 3,680 1,894 2,339 91,616
Management fee expense   6,116     (838 )   (1,401 )   (2,060 )   1,817  
Income before income taxes 77,587 4,518 3,295 4,399 89,799
Income tax expense   18,744     1,130     824     1,099     21,797  
Net income attributable to GAMCO Investors, Inc. $ 58,843   $ 3,388   $ 2,471   $ 3,300   $ 68,002  
 
Net income per share attributable to GAMCO Investors, Inc.:
Basic $ 2.04   $ 0.12   $ 0.09   $ 0.11   $ 2.36  
Diluted $ 2.04   $ 0.12   $ 0.09   $ 0.11   $ 2.36  
 
  For the six months ended June 30, 2017
     
Reported Impact of Impact of
GAAP 2017 DCCA 2016 DCCA Non-GAAP
 
Total revenues $ 173,517 $ - $ - $ 173,517
 
Compensation costs 54,715 19,206 (5,759 ) 68,162
Distribution costs 21,708 - - 21,708
Other operating expenses   10,471     -     -     10,471  
Total expenses 86,894 19,206 (5,759 ) 100,341
 
Operating income before management fee 86,623 (19,206 ) 5,759 73,176
 
Other expense, net (4,535 ) - - (4,535 )
 
Income before management fee and income taxes 82,088 (19,206 ) 5,759 68,641
Management fee expense   4,520     3,552     (1,484 )   6,588  
Income before income taxes 77,568 (22,758 ) 7,243 62,053
Income tax expense   29,854     (8,761 )   2,791     23,884  
Net income attributable to GAMCO Investors, Inc. $ 47,714   $ (13,997 ) $ 4,452   $ 38,169  
 
Net income per share attributable to GAMCO Investors, Inc.:
Basic $ 1.65   $ (0.48 ) $ 0.15   $ 1.32  
Diluted $ 1.58   $ (0.45 ) $ 0.14   $ 1.27  
 

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, the effects of the Tax Cuts and Jobs Act, 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, and the ongoing impacts of the Tax Cuts and Jobs Act with respect to tax rates and the non-deductibility of certain portions of NEO compensation. 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.

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

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