Manning & Napier, Inc. Reports Second Quarter 2021 Earnings Results
Summary Highlights
- Assets under management ("AUM") at
June 30, 2021 were$22.3 billion , compared to$21.1 billion atMarch 31, 2021 - Revenue for the second quarter was
$36.1 million , an increase of 19% from the second quarter of 2020 and an increase of 6% from the first quarter of 2021 - Second quarter income before taxes was
$8.0 million ; the net income attributable toManning & Napier, Inc. for the second quarter was$5.9 million , or$0.29 per diluted share - On a non-GAAP basis, as defined in the Non-GAAP Financial Measures section below, economic net income for the second quarter was
$7.4 million , or$0.31 per adjusted share - Ownership in
Manning & Napier Group increased to 97.7% during the second quarter as a result of the annual exchange process between the Company and the holders of its non-controlling interests
"We continued to generate excellent performance and strong absolute returns in the second quarter of 2021," commented
Second Quarter 2021 Financial Review
Manning & Napier reported second quarter 2021 revenue of
Total operating expenses for the second quarter of 2021 were
Compensation and related costs were
Distribution, servicing and custody expenses for the second quarter of 2021 increased by less than
Other operating costs for the second quarter of 2021 were flat when compared with the second quarter of 2020, and increased by
Operating income was
Non-operating income was
Income before provision for income taxes was
Net income attributable to the controlling and the non-controlling interests for the second quarter of 2021 was
On a Non-GAAP basis, as defined in the Non-GAAP Financial Measures section of this release, Manning & Napier reported second quarter 2021 economic income of
Six months ended
Manning & Napier reported 2021 year-to-date revenue of
Total operating expenses for 2021 year-to-date were
Compensation and related costs for the six months ended
Distribution, servicing and custody expenses for 2021 decreased by
Other operating costs for 2021 year-to-date decreased by
Operating income was
Non-operating income for 2021 year-to-date was
Income before provision for income taxes was
Net income attributable to the controlling and the non-controlling interests was
On a Non-GAAP basis, as defined in the Non-GAAP Financial Measures section of this release, Manning & Napier reported economic income of
Assets Under Management
As of
Since
When compared to
Balance Sheet
Cash and cash equivalents, and investments totaled
Business Updates
On
On
Subsequent to quarter end, on
Conference Call
Manning & Napier will host a conference call to discuss its 2021 second quarter financial results on
If you are unable to access the live teleconference, a replay will be available beginning approximately two hours after the call's completion and available through
Non-GAAP Financial Measures
To provide investors with greater insight into operating results, promote transparency, facilitate comparison of period-to-period results, and to allow a more comprehensive understanding of information used by management in its financial and operational decision-making, the Company supplements its consolidated statements of operations presented in accordance with accounting principles generally accepted in
Management uses economic income, economic net income and economic net income per adjusted share as financial measures to evaluate the profitability and efficiency of the Company's business as a whole in the ordinary, ongoing and customary course of its operations. Economic income, economic net income and economic net income per adjusted share are not presented in accordance with GAAP.
Economic income presents a financial measure of the controlling and non-controlling interests of
Economic net income is a non-GAAP measure of after-tax operating performance for the controlling and non-controlling interests of
Economic net income per adjusted share is equal to economic net income divided by the weighted average number of adjusted Class A common shares outstanding. The number of weighted average adjusted Class A common shares outstanding for all periods presented is determined by assuming the weighted average exchangeable units of Manning &
Investors should consider the non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP. Additionally, the Company's non-GAAP financial measures may differ from similar measures used by other companies, even if similar terms are used to identify such measures.
About Manning &
Safe Harbor Statement
This press release and other statements that the Company may make may contain forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which reflect the Company's current views with respect to, among other things, its operations and financial performance. Words like "believes," "expects," "may," "estimates," "will," "should," "intends," "plans," or "anticipates" or the negative thereof or other variations thereon or comparable terminology, are used to identify forward-looking statements, although not all forward-looking statements contain these words. Although the Company believes that it is basing its expectations and beliefs on reasonable assumptions within the bounds of what it currently knows about its business and operations, there can be no assurance that its actual results will not differ materially from what the Company expects or believes. Some of the factors that could cause the Company's actual results to differ from its expectations or beliefs include, without limitation: changes in securities or financial markets or general economic conditions; the impact of COVID-19 on the
Contacts
Investor Relations:
973-464-5240
eblum@prosek.com
Public Relations:
Manning &
585-325-6880
nbrunner@manning-napier.com
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Consolidated Statements of Operations |
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(in thousands, except share data) |
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(unaudited) |
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Three Months Ended |
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Six Months Ended |
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Revenues |
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Management Fees |
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Wealth Management |
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$ 16,111 |
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$ 15,348 |
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$ 13,571 |
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$ 31,459 |
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$ 27,591 |
Institutional and Intermediary |
|
15,141 |
|
14,328 |
|
12,311 |
|
29,469 |
|
24,722 |
Distribution and shareholder servicing |
|
2,236 |
|
2,153 |
|
2,303 |
|
4,389 |
|
4,693 |
Custodial services |
|
1,721 |
|
1,645 |
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1,463 |
|
3,366 |
|
3,062 |
Other revenue |
|
868 |
|
677 |
|
698 |
|
1,545 |
|
1,387 |
Total revenue |
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36,077 |
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34,151 |
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30,346 |
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70,228 |
|
61,455 |
Expenses |
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Compensation and related costs |
|
18,347 |
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18,874 |
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17,379 |
|
37,221 |
|
36,642 |
Distribution, servicing and custody expenses |
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2,497 |
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2,358 |
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2,425 |
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4,855 |
|
5,238 |
Other operating costs |
|
7,463 |
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6,710 |
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7,489 |
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14,173 |
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14,586 |
Total operating expenses |
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28,307 |
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27,942 |
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27,293 |
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56,249 |
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56,466 |
Operating income |
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7,770 |
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6,209 |
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3,053 |
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13,979 |
|
4,989 |
Non-operating income (loss) |
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Non-operating income (loss), net |
|
256 |
|
458 |
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2,690 |
|
714 |
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(1,637) |
Income before provision for income taxes |
|
8,026 |
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6,667 |
|
5,743 |
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14,693 |
|
3,352 |
Provision for (benefit from) income taxes |
|
1,285 |
|
703 |
|
1,460 |
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1,988 |
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(1,766) |
Net income attributable to the controlling and the noncontrolling interests |
|
6,741 |
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5,964 |
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4,283 |
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12,705 |
|
5,118 |
Less: net income attributable to the noncontrolling |
|
816 |
|
724 |
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2,737 |
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1,540 |
|
2,714 |
Net income attributable to Manning & |
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$ 5,925 |
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5,240 |
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$ 1,546 |
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$ 11,165 |
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$ 2,404 |
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Net income per share available to Class A common stock |
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Basic |
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$ 0.35 |
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$ 0.31 |
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$ 0.09 |
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$ 0.65 |
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$ 0.15 |
Diluted |
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$ 0.29 |
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$ 0.26 |
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$ 0.06 |
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$ 0.55 |
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$ 0.06 |
Weighted average shares of Class A common stock |
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Basic |
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16,956,265 |
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17,026,500 |
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16,132,667 |
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16,991,188 |
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15,972,809 |
Diluted |
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20,314,285 |
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20,273,343 |
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46,296,214 |
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20,290,914 |
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61,851,067 |
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Reconciliation of Non-GAAP Financial Measures to GAAP Measures |
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(in thousands, except share data) |
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(unaudited) |
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Three Months Ended |
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Six Months Ended |
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Net income attributable to Manning & Napier, |
$ 5,925 |
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$ 5,240 |
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$ 1,546 |
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$ 11,165 |
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$ 2,404 |
Add back: Net income attributable to the |
816 |
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724 |
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2,737 |
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1,540 |
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2,714 |
Add back: Provision for (benefit from) income |
1,285 |
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703 |
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1,460 |
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1,988 |
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(1,766) |
Income before provision for income taxes |
8,026 |
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6,667 |
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5,743 |
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14,693 |
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3,352 |
Add back: Strategic restructuring and |
814 |
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902 |
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958 |
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1,716 |
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1,677 |
Economic income (Non-GAAP) |
8,840 |
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7,569 |
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6,701 |
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16,409 |
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5,029 |
Adjusted income taxes (Non-GAAP) |
1,453 |
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869 |
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2,730 |
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2,322 |
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(508) |
Economic net income (Non-GAAP) |
$ 7,387 |
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$ 6,700 |
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$ 3,971 |
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$ 14,087 |
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$ 5,537 |
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Weighted average shares of Class A common |
16,956,265 |
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17,026,500 |
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16,132,667 |
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16,991,188 |
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15,972,809 |
Assumed vesting, conversion or exchange of: |
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Weighted average |
2,004,276 |
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2,021,781 |
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28,400,866 |
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2,012,980 |
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45,217,533 |
Weighted average unvested restricted stock units |
4,001,287 |
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3,764,744 |
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3,609,201 |
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3,883,669 |
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3,177,514 |
Weighted average vested stock options |
509,772 |
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586,366 |
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166,666 |
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547,856 |
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166,666 |
Weighted average adjusted shares (Non- |
23,471,600 |
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23,399,391 |
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48,309,400 |
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23,435,693 |
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64,534,522 |
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Economic net income per adjusted share |
$ 0.31 |
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$ 0.29 |
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$ 0.08 |
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$ 0.60 |
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$ 0.09 |
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(1)Strategic restructuring and transaction costs, net, are included in the following financial statement line items of our Consolidated Statements of Operations: |
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Compensation and benefits |
$ 156 |
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$ 484 |
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$ 154 |
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$ 640 |
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$ 840 |
Other operating costs |
658 |
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418 |
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804 |
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1,076 |
|
837 |
Total strategic restructuring and transaction costs, |
$ 814 |
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$ 902 |
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$ 958 |
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$ 1,716 |
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$ 1,677 |
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Assets Under Management ("AUM") |
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(in millions) |
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(unaudited) |
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For the three months ended: |
Sales Channel (4) |
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Portfolio |
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Wealth Management |
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Institutional and Intermediary |
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Total |
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Blended Asset |
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Equity |
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Fixed Income |
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Total |
As of |
$ 9,217.5 |
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$ 11,922.3 |
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$ 21,139.8 |
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$ 5,982.6 |
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Gross client inflows(1) |
216.6 |
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570.7 |
|
787.3 |
|
543.7 |
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183.2 |
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60.4 |
|
787.3 |
Gross client outflows(1) |
(295.2) |
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(553.8) |
|
(849.0) |
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(572.5) |
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(242.7) |
|
(33.8) |
|
(849.0) |
Market appreciation/(depreciation) & other (2) |
474.6 |
|
708.8 |
|
1,183.4 |
|
758.9 |
|
410.8 |
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13.7 |
|
1,183.4 |
As of |
$ 9,613.5 |
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$ 12,648.0 |
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$ 22,261.5 |
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$ 6,333.9 |
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Average AUM for period |
$ 9,467.4 |
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$ 12,373.0 |
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$ 21,840.4 |
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$ 6,240.3 |
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As of |
$ 8,906.4 |
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$ 11,213.0 |
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$ 20,119.4 |
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$ 5,545.3 |
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Gross client inflows(1) |
224.8 |
|
401.6 |
|
626.4 |
|
379.8 |
|
187.6 |
|
59.0 |
|
626.4 |
Gross client outflows(1) |
(305.3) |
|
(453.5) |
|
(758.8) |
|
(501.2) |
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(200.1) |
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(57.5) |
|
(758.8) |
Market appreciation/(depreciation) & other (2) (3) |
391.6 |
|
761.2 |
|
1,152.8 |
|
701.1 |
|
449.8 |
|
1.9 |
|
1,152.8 |
As of |
$ 9,217.5 |
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$ 11,922.3 |
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$ 21,139.8 |
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$ 5,982.6 |
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Average AUM for period |
$ 8,993.0 |
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$ 11,454.3 |
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$ 20,447.3 |
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|
|
$ 5,719.2 |
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As of |
$ 7,732.9 |
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$ 9,327.6 |
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$ 17,060.5 |
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$ 3,944.7 |
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Gross client inflows(1) |
193.3 |
|
359.5 |
|
552.8 |
|
426.5 |
|
99.4 |
|
26.9 |
|
552.8 |
Gross client outflows(1) |
(360.7) |
|
(850.9) |
|
(1,211.6) |
|
(851.8) |
|
(292.5) |
|
(67.3) |
|
(1,211.6) |
Market appreciation/(depreciation) & other (2) |
768.9 |
|
1,469.7 |
|
2,238.6 |
|
1,403.8 |
|
810.1 |
|
24.7 |
|
2,238.6 |
As of |
$ 8,334.4 |
|
$ 10,305.9 |
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$ 18,640.3 |
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|
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$ 4,561.7 |
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Average AUM for period |
$ 8,164.0 |
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$ 9,930.2 |
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$ 18,094.2 |
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$ 4,353.7 |
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For the six months ended: |
Sales Channel (4) |
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Portfolio |
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Wealth Management |
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Institutional and Intermediary |
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Total |
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Blended Asset |
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Equity |
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Fixed Income |
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Total |
As of |
$ 8,906.4 |
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$ 11,213.0 |
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$ 20,119.4 |
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|
|
$ 5,545.3 |
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|
|
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Gross client inflows(1) |
441.4 |
|
972.3 |
|
1,413.7 |
|
923.5 |
|
370.8 |
|
119.4 |
|
1,413.7 |
Gross client outflows(1) |
(600.5) |
|
(1,007.3) |
|
(1,607.8) |
|
(1,073.7) |
|
(442.8) |
|
(91.3) |
|
(1,607.8) |
Market appreciation/(depreciation) & other (2) (3) |
866.2 |
|
1,470.0 |
|
2,336.2 |
|
1,460.0 |
|
860.6 |
|
15.6 |
|
2,336.2 |
As of |
$ 9,613.5 |
|
$ 12,648.0 |
|
$ 22,261.5 |
|
|
|
$ 6,333.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Average AUM for period |
$ 9,232.0 |
|
$ 11,929.7 |
|
$ 21,161.7 |
|
|
|
$ 5,967.4 |
|
|
|
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As of |
$ 8,716.4 |
|
$ 10,763.7 |
|
$ 19,480.1 |
|
|
|
$ 4,988.8 |
|
|
|
|
Gross client inflows(1) |
395.4 |
|
826.2 |
|
1,221.6 |
|
794.7 |
|
336.6 |
|
90.3 |
|
1,221.6 |
Gross client outflows(1) |
(736.0) |
|
(1,604.8) |
|
(2,340.8) |
|
(1,668.2) |
|
(524.2) |
|
(148.4) |
|
(2,340.8) |
Market appreciation/(depreciation) & other (2) |
(41.4) |
|
320.8 |
|
279.4 |
|
475.5 |
|
(239.5) |
|
43.4 |
|
279.4 |
As of |
$ 8,334.4 |
|
$ 10,305.9 |
|
$ 18,640.3 |
|
|
|
$ 4,561.7 |
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|
|
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|
|
|
|
|
|
|
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Average AUM for period |
$ 8,486.1 |
|
$ 10,130.7 |
|
$ 18,616.8 |
|
|
|
$ 4,619.6 |
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(1) Transfers of client assets between portfolios are included in gross client inflows and gross client outflows. |
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(2) Market appreciation/(depreciation) and other includes investment gains/(losses) on assets under management, the impact of changes in foreign exchange rates and net flows from non-sales related activities including net reinvested dividends. |
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(3) Beginning in |
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(4) Assets under management and gross client flows between sales channels have been estimated based upon preliminary data. For a limited portion of our mutual fund assets under management, reporting by sales channel is not available at the time of this release. Such estimates have no impact on total AUM, total cash flows, or AUM by investment portfolio reported in the table above. |
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