NAPERVILLE, Ill., April 22 /PRNewswire-FirstCall/ -- Calamos Asset
Management, Inc. (Nasdaq: CLMS) today reported results for the first quarter
of 2008. First quarter revenues decreased to $110.7 million from $115.7 in the
prior year while operating income decreased to $44.4 million from $50.2
million. Net income in the first quarter was $449,000 compared to $7.5 million
in the prior year. Current quarter operating income, after giving effect to
income taxes, contributed $0.27 per diluted share to the company's results
compared to $0.30 per share in the same period a year ago. Overall diluted
earnings per share were $0.02 in the current quarter and were negatively
impacted by non-operating losses of $0.25 per share, after income taxes,
mainly attributable to unrealized market depreciation on the company's
consolidated partnerships and offshore funds. Diluted earnings per share were
$0.32 for the same period a year ago. Additionally today, the company declared
a regular quarterly dividend of 11 cents per share, payable on May 28, 2008 to
shareholders of record on May 13, 2008.
"We have taken steps to control expenses in this difficult period and are
satisfied with the cost containment efforts that we have completed," said John
P. Calamos, Sr., Chairman and Chief Executive Officer. "While the changes in
our run rate were modest in the first quarter, we expect these steps to gain
greater traction in the form of decreased operating expenses during the rest
of the year. In the meantime, we have undertaken a number of strategies that
will help us grow our business including the launch of two exciting new
products, an emerging markets fund, which gives investors access to
investments in developing countries, and our 130/30 long-short mutual fund
strategy."
During the first quarter the company purchased 888,700 shares at an
aggregated cost of $21.9 million under its existing buyback program,
representing 4.3% of its outstanding Class A common stock as of December 31,
2007.
Assets Under Management
Assets under management as of March 31, 2008 fell 11% to $40.9 billion
from $46.2 billion at the previous quarter's end. The decrease in assets under
management of $5.3 billion during the quarter was comprised of $5.0 billion in
market depreciation and net redemptions of $343 million. Average assets under
management were $41.9 billion during the first quarter of 2008, compared to
$43.8 billion for the same period one year ago.
Operating Results
First quarter 2008 revenues were $110.7 million, a 4% decrease from $115.7
million in the first quarter of 2007, resulting mostly from a 4% decrease in
average assets under management. Operating expenses were $66.3 million, a 1%
increase from $65.5 million in the prior-year quarter. The increase in
operating expenses was mainly due to increases in employee compensation and
benefits expenses, and higher general and administrative expenses resulting
from higher headcount.
Our focus is to better align our expense structure with our decreasing
revenues, which we believe are driven by prevailing market volatility. To do
so, we completed a staff reduction of 28 associates, or 7%, in February 2008.
However, we continue to redeploy resources to areas that we view as key growth
opportunities, specifically, institutional, wealth management, global
expansion and retirement plan distribution. In addition, our Chief Executive
Officer and our Co-Chief Investment Officer have temporarily reduced their
base salaries by nearly one million dollars in aggregate for 2008 as part of
these efforts. We expect the full impact of these efforts to be reflected as
reductions in compensation and benefits expenses in the second quarter of
2008.
Operating income was $44.4 million for the first quarter of 2008, compared
with $50.2 million for the same period a year ago. Operating margin was 40.1%
for the first quarter of 2008 and 43.3% for the year-earlier period. Operating
income, after giving effect to income taxes, contributed $0.27 per diluted
share in the first quarter of 2008 versus $0.30 in the prior-year period.
Non-Operating Results
Total other income (expense), net was a net expense of $41.6 million for
the first quarter of 2008, compared to a net income of $3.1 million for the
first quarter of 2007. The decrease in total other income (expense), net for
the three months ended March 31, 2008, compared to the prior-year quarter, was
mostly due to unrealized market depreciation of $36.6 million in the current
quarter, primarily on our investments in consolidated partnerships and
offshore funds, after giving effect to minority interests' investment in those
products.
As a point of reference, in the fourth quarter of 2007 we launched four
offshore funds and seeded these funds with $200 million, consistent with our
practice of investing alongside our clients. We view this investment as a
component of our $834 million corporate investment portfolio at March 31,
2008, which is primarily comprised of products managed by us. Because our
ownership in these funds represents more than 50% of the funds' assets, we are
required to consolidate these portfolios with our financial results. As such,
market appreciation and depreciation of our investment in these funds is
included in non-operating income (expense), net in our consolidated statement
of operations. This accounting treatment of the market depreciation in the
first quarter was the primary driver of the decrease in earnings. This
consolidation may no longer be required once our investment represents less
than 50% of the relevant funds' total assets and at that point future market
appreciation and depreciation would be included as a component of
stockholders' equity.
Further, net interest expense was $7.3 million in the first quarter of
2008 and reflects an increase in interest expense of $6.1 million related to
the private debt offering that closed during the third quarter of 2007.
Net income for the first quarter of 2008 was $449,000, compared to $7.5
million reported for the first quarter 2007. Diluted earnings per share were
$0.02 in the current quarter and were negatively impacted by non-operating
losses of $0.25 per share, after income taxes. This negative impact was mainly
attributable to unrealized market depreciation on the company's consolidated
partnerships and offshore funds. Diluted earnings per share were $0.32 in the
prior-year period.
Management will hold an investor conference call at 5 p.m. Eastern time on
Tuesday, April 22nd. To access the live call and view management's
presentation, click on the Investor Relations tab at http://www.calamos.com.
Alternatively, participants may listen to the live call by dialing
800-379-3942 (706-679-7206 outside the U.S.), then entering conference ID
number 42989836. A replay of the call will be available until the end of the
day on May 6th by dialing 800-642-1687 (706-645-9291 outside the U.S.), then
entering conference ID number 42989836. A webcast also will be available on
the Investor Relations section of http://www.calamos.com for 90 days.
Calamos Asset Management, Inc. (NASDAQ: CLMS) is a diversified investment
firm offering equity, fixed income, convertible and alternative investment
strategies, among others. The firm serves institutions and individuals via
separately managed accounts and a family of open-end and closed-end funds,
offering a risk-managed approach to capital appreciation and income-producing
strategies. For more information, visit http://www.calamos.com.
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 the company's annual and quarterly reports
filed with the U.S. Securities and Exchange Commission.
Calamos Asset Management, Inc.
Unaudited Consolidated Condensed Statements of Operations
(in thousands, except share data)
Three Months Ended March 31,
2008 2007
Revenues:
Investment management fees $77,274 $78,475
Distribution and underwriting fees 32,470 36,181
Other 949 1,044
Total revenues 110,693 115,700
Expenses:
Employee compensation and benefits 23,460 20,766
Distribution and underwriting expense 24,158 25,027
Amortization of deferred sales commissions 6,120 7,878
Marketing and sales promotion 3,036 3,482
General and administrative 9,490 8,392
Total operating expenses 66,264 65,545
Operating income 44,429 50,155
Total other income (expense), net (41,569) 3,137
Income before minority interest in Calamos
Holdings LLC and income taxes 2,860 53,292
Minority interest in Calamos Holdings LLC 2,108 40,708
Income before income taxes 752 12,584
Income taxes expense 303 5,050
Net income $449 $7,534
Earnings per share, basic $0.02 $0.32
Weighted average shares outstanding, basic 20,337,038 23,324,182
Calculation of earnings per share, diluted,
assuming exchange of membership units:
Income before minority interest in Calamos
Holdings LLC and income taxes $2,860 $53,292
Impact of income taxes 1,153 21,386
Earnings available to common shareholders $1,707 $31,906
Earnings per share, diluted $0.02 $0.32
Weighted average shares outstanding, diluted 97,621,495 100,764,966
Calamos Asset Management, Inc.
Assets Under Management
(in millions)
Quarter Ended March 31, Change
2008 2007 Amount Percent
Mutual Funds
Beginning assets under
management $34,835 $33,704 $1,131 3 %
Net redemptions (449) (1,952) 1,503 77
Market appreciation
(depreciation) (3,728) 334 (4,062) NM
Ending assets under
management 30,658 32,086 (1,428) 4
Average assets under
management 31,403 33,011 (1,608) 5
Separate Accounts
Beginning assets under
management 11,373 11,021 352 3
Net purchases
(redemptions) 106 (679) 785 NM
Market appreciation
(depreciation) (1,231) 122 (1,353) NM
Ending assets under
management 10,248 10,464 (216) 2
Average assets under
management 10,501 10,770 (269) 2
Total Assets Under
Management
Beginning assets under
management 46,208 44,725 1,483 3
Net redemptions (343) (2,631) 2,288 87
Market appreciation
(depreciation) (4,959) 456 (5,415) NM
Ending assets under
management 40,906 42,550 (1,644) 4
Average assets under
management $41,904 $43,781 $(1,877) 4 %
At March 31, Change
2008 2007 Amount Percent
Mutual Funds
Open-end funds $23,784 $25,706 $(1,922) 7 %
Closed-end funds 6,874 6,380 494 8
Total mutual funds 30,658 32,086 (1,428) 4
Separate Accounts
Institutional accounts 4,875 4,849 26 1
Managed accounts 5,256 5,482 (226) 4
Alternative investments 117 133 (16) 12
Total separate accounts 10,248 10,464 (216) 2
Ending assets under
management $40,906 $42,550 $(1,644) 4 %
At March 31, Change
2008 2007 Amount Percent
Assets by Strategy
Equity $19,103 $21,050 $(1,947) 9 %
Balanced 12,636 12,716 (80) 1
Convertible 4,626 4,528 98 2
High Yield 2,640 2,977 (337) 11
Alternative 1,736 1,279 457 36
Fixed Income 102 - 102 NM
Money Market 63 - 63 NM
Ending assets under
management $40,906 $42,550 $(1,644) 4 %
SOURCE: Calamos Asset Management, Inc.
CONTACT: Philip Kranz, +1-312-780-7240, or Kristine Walczak,
+1-312-780-7205, both of Dresner Corporate Services for Calamos Asset
Management, Inc.
Web site: http://www.calamos.com |
