AC - Associated Capital Group Inc. Reports Third Quarter Results | Benzinga
– Book Value per share ended the quarter at $41.43 per share vs $39.96 at September 30, 2022
– AUM: $1.59 billion at September 30, 2023 compared to $1.75 billion at September 30, 2022
– Approved $4.3 million shareholder designated charitable contribution for registered shareholders, bringing total to $38 million since our spin-off in 2015
GREENWICH, Conn., Nov. 08, 2023 (GLOBE NEWSWIRE) -- Associated Capital Group, Inc. ("AC" or the "Company"), a diversified financial services company, today reported its financial results for the third quarter ended September 30, 2023.
Financial Highlights - GAAP Basis
($ in 000's except AUM and per share data)
| (Unaudited) |
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| AUM - end of period (in millions) |
| $ |
| 1,588 |
| $ |
| 1,752 |
| $ |
| 1,588 |
| $ |
| 1,752 |
| AUM - average (in millions) |
| 1,580 |
| 1,807 |
| 1,686 |
| 1,820 |
| Revenues |
| 2,200 |
| 2,562 |
| 7,047 |
| 7,690 |
| Operating loss before management fee (Non-GAAP) |
| (3,533 |
| ) |
| (3,129 |
| ) |
| (9,050 |
| ) |
| (8,646 |
| ) |
| Investment and other non-operating income/(loss), net |
| 3,794 |
| (17,789 |
| ) |
| 37,140 |
| (68,753 |
| ) |
| Income/(loss) before income taxes |
| 273 |
| (20,918 |
| ) |
| 25,015 |
| (77,399 |
| ) |
| Net income/(loss) |
| (16 |
| ) |
| (16,498 |
| ) |
| 21,109 |
| (62,571 |
| ) |
| Net income/(loss) per share-diluted |
| 0.00 |
| (0.75 |
| ) |
| 0.97 |
| (2.84 |
| ) |
| Class A shares outstanding (000's) |
| 2,672 |
| 3,041 |
| 2,672 |
| 3,041 |
| Class B " " |
| 18,951 |
| 18,963 |
| 18,951 |
| 18,963 |
| Total " " |
| 21,623 |
| 22,004 |
| 21,623 |
| 22,004 |
| Book Value per share |
| $ |
| 41.43 |
| $ |
| 39.96 |
| $ |
| 41.43 |
| $ |
| 39.96 |
Giving Back to Society – (Y)our "S" in ESG
AC seeks to be a good corporate citizen by supporting our community through sponsoring local organizations. On August 9, 2023, the Board of Directors approved a $0.20 per share shareholder designated charitable contribution ("SDCC") for registered shareholders as of October 16, 2023. Based on the program created by Warren Buffett at Berkshire Hathaway, our corporate charitable giving is unique in that the recipients of AC's charitable contributions are chosen directly by our shareholders, rather than by our corporate officers. Since our spin off as a public company, the shareholders of AC have donated approximately $38 million, including the most recent SDCC, to over 190 501(c)(3) organizations that address a broad range of local, national and international concerns.
Third Quarter Financial Data
– Assets under management ended the quarter at $1.59 billion versus $1.75 billion at September 30, 2022.
– Book value was $41.43 per share compared to $39.96 per share at September 30, 2022.
– For the first nine months, Investment and other non-operating income was $37.1 million versus a loss of $68.8 million in the year-ago period. The $105.9 million year to date positive change reflects market appreciation in the current period versus a decline in the first nine months of 2022.
Third Quarter Results
Third quarter revenues were $2.2 million compared to $2.6 million in the third quarter of 2022. Total operating expenses, excluding management fee, were $5.7 million in the third quarter 2023 and $5.7 million in the third quarter 2022.
Net investment and other non-operating income was $3.8 million for the third quarter, a $21.6 million change from the $17.8 million loss in the third quarter of 2022. The primary drivers of this quarter's results included gains from our GAMCO holdings and merger arbitrage partnerships. Interest income reflected higher interest rates in the 2023 quarter as compared to 2022.
There was no management fee in the third quarter of 2023 or 2022. Year to date management fee was $3.1 million versus none in the prior year.
Our income tax expense of $0.2 million for the quarter compares to a benefit of $4.9 million in the year ago quarter. The income tax expense in the 2023 quarter is primarily driven by a deferred tax expense from a foreign investment.
Assets Under Management (AUM)
Assets under management at September 30, 2023 were $1.59 billion, $254 million lower than year-end 2022 reflecting net outflows of $259 million, the impact of currency fluctuations in non-US dollar denominated classes of investment funds ($11 million), offset partially by market appreciation of $16 million.
| September 30, |
| December 31, |
| September 30, |
| 2023 |
| 2022 |
| 2022 |
| ($ in millions) |
| Merger Arbitrage(a) |
| $ |
| 1,322 |
| $ |
| 1,588 |
| $ |
| 1,518 |
| Long/Short Value(b) |
| 233 |
| 222 |
| 203 |
| Other |
| 33 |
| 32 |
| 31 |
| Total AUM |
| $ |
| 1,588 |
| $ |
| 1,842 |
| $ |
| 1,752 |
(a) Includes $613, $856, and $775 of sub-advisory AUM related to GAMCO International SICAV - GAMCO Merger Arbitrage, and $148, $206 and $74 of 100% U.S. Treasury Fund managed by GAMCO at September 30, 2023, December 31, 2022 and September 30, 2022, respectively.
(b) AUM represents the assets invested in this strategy that are attributable to Associated Capital Group, Inc.
Alternative Investment Management
The alternative investment strategy offerings center around our merger arbitrage strategy which has an absolute return focus of generating returns independent of the broad equity and fixed income markets. We also offer strategies utilizing fundamental, active, event-driven and special situations investments.
Merger Arbitrage
For the third quarter 2023, the longest continuously offered fund in the merger arbitrage strategy generated gross returns of 2.88% (2.33% net of fees). A summary of the performance is as follows:
| Full Year |
| Performance%(a) |
| 3Q '23 |
| 3Q '22 |
| YTD '23 |
| YTD '22 |