Manning & Napier, Inc. Reports Second Quarter 2022 Earnings Results
"Broad and significant declines across capital markets globally continued in the second quarter, pressuring revenues and causing mark-to-market declines in securities held on the balance sheet," commented
Second Quarter 2022 Financial Review
Manning & Napier reported second quarter 2022 revenue of
Total operating expenses for the second quarter of 2022 were
Compensation and related costs were
Distribution, servicing and custody expenses for the second quarter of 2022 decreased by
Other operating costs for the second quarter of 2022 were
Operating income was
Non-operating loss, which for each period is comprised primarily of net gains or losses on investments, was
Income before provision for (benefit from) income taxes was
Net income attributable to the controlling and the non-controlling interests for the second quarter of 2022 was
On a Non-GAAP basis, as defined in the Non-GAAP Financial Measures section of this release, Manning & Napier reported second quarter 2022 Adjusted EBITDA of
Six months ended
Manning & Napier reported 2022 year-to-date revenue of
Total operating expenses for 2022 year-to-date were
Compensation and related costs for the six months ended
Distribution, servicing and custody expenses for 2022 year-to-date decreased by
Other operating costs for 2022 year-to-date increased by
Operating income was
Non-operating loss, which for each period is comprised primarily of net gains or losses on investments, 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 Adjusted EBITDA of
Assets Under Management
As of
Since
When compared to
Balance Sheet
Cash and cash equivalents and investments totaled
Recent Developments
On
Stockholders approved the Callodine transaction on
We believe this proposed transaction creates value for our stockholders while providing significant benefits to all stakeholders. In light of the previously announced definitive agreement to be acquired by
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
Beginning with the release of our operating results for the first quarter of 2022, we have moved away from presenting economic income, economic net income and economic net income per adjusted share as supplemental non-GAAP measures. Given our current organizational structure and that the strategic restructuring efforts initiated in 2019 are substantially complete, we believe that the non-GAAP measure of Adjusted EBITDA is a more representative supplemental measure of our results. Management uses Adjusted EBITDA as a financial measure to evaluate the profitability and efficiency of the Company's business in the ordinary, ongoing and customary course of its operations. Adjusted EBITDA is not presented in accordance with GAAP, and removes the impact of interest, taxes, depreciation, amortization, and, if any, the net gain (loss) on the tax receivable agreement ("TRA"). Adjusted EBITDA also adds back net income (loss) attributable to the noncontrolling interests and assumes all income of
Investors should consider this non-GAAP financial measure 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," or "should," 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: the delay in or failure to consummate the proposed transaction with
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 |
||||||||||
(in thousands, except share data) |
||||||||||
(unaudited) |
||||||||||
Three Months Ended |
Six Months Ended |
|||||||||
|
|
|
|
|
||||||
Revenues |
||||||||||
Investment management fees |
$ 29,292 |
$ 30,827 |
$ 31,252 |
$ 60,119 |
$ 60,928 |
|||||
Distribution and shareholder servicing |
1,945 |
2,082 |
2,236 |
4,027 |
4,389 |
|||||
Custodial services |
1,588 |
1,677 |
1,721 |
3,265 |
3,366 |
|||||
Other revenue |
972 |
963 |
868 |
1,935 |
1,545 |
|||||
Total revenue |
33,797 |
35,549 |
36,077 |
69,346 |
70,228 |
|||||
Expenses |
||||||||||
Compensation and related costs |
14,542 |
20,707 |
18,347 |
35,249 |
37,221 |
|||||
Distribution, servicing and custody expenses |
2,177 |
2,280 |
2,497 |
4,457 |
4,855 |
|||||
Other operating costs |
9,973 |
11,477 |
7,463 |
21,450 |
14,173 |
|||||
Total operating expenses |
26,692 |
34,464 |
28,307 |
61,156 |
56,249 |
|||||
Operating income |
7,105 |
1,085 |
7,770 |
8,190 |
13,979 |
|||||
Non-operating income (loss) |
||||||||||
Non-operating income (loss), net |
(2,601) |
(607) |
256 |
(3,208) |
714 |
|||||
Income before provision for (benefit from) income taxes |
4,504 |
478 |
8,026 |
4,982 |
14,693 |
|||||
Provision for (benefit from) income taxes |
2,064 |
(746) |
1,285 |
1,318 |
1,988 |
|||||
Net income attributable to the controlling and the noncontrolling interests |
2,440 |
1,224 |
6,741 |
3,664 |
12,705 |
|||||
Less: net income attributable to the noncontrolling interests |
96 |
38 |
816 |
134 |
1,540 |
|||||
Net income attributable to Manning & |
$ 2,344 |
$ 1,186 |
$ 5,925 |
$ 3,530 |
$ 11,165 |
|||||
Net income per share available to Class A common stock |
||||||||||
Basic |
$ 0.12 |
$ 0.06 |
$ 0.35 |
$ 0.19 |
$ 0.65 |
|||||
Diluted |
$ 0.11 |
$ 0.06 |
$ 0.29 |
$ 0.16 |
$ 0.55 |
|||||
Weighted average shares of Class A common stock outstanding |
||||||||||
Basic |
19,124,332 |
18,988,573 |
16,956,265 |
19,056,827 |
16,991,188 |
|||||
Diluted |
21,833,563 |
21,551,937 |
20,314,285 |
21,730,594 |
20,290,914 |
|
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Reconciliation of Non-GAAP Financial Measures to GAAP Measures |
||||||||||
(in thousands, except share data) |
||||||||||
(unaudited) |
||||||||||
Three Months Ended |
Six Months Ended |
|||||||||
|
|
|
|
|
||||||
Net income attributable to Manning & |
$ 2,344 |
$ 1,186 |
$ 5,925 |
$ 3,530 |
$ 11,165 |
|||||
Add back: Net income attributable to the noncontrolling interests |
96 |
38 |
816 |
134 |
1,540 |
|||||
Add back: Provision for (benefit from) income taxes |
2,064 |
(746) |
1,285 |
1,318 |
1,988 |
|||||
Income before provision for (benefit from) income taxes |
4,504 |
478 |
8,026 |
4,982 |
14,693 |
|||||
Add back: Interest income and expense, net |
84 |
(19) |
(74) |
65 |
(183) |
|||||
Add back: Depreciation |
185 |
247 |
246 |
432 |
517 |
|||||
Add back: Amortization (1) |
446 |
2,374 |
248 |
2,820 |
352 |
|||||
EBITDA |
5,219 |
3,080 |
8,446 |
8,299 |
15,379 |
|||||
Add back: Change in liability under tax receivable agreement |
(11) |
— |
228 |
(11) |
228 |
|||||
Adjusted EBITDA |
$ 5,208 |
$ 3,080 |
$ 8,674 |
$ 8,288 |
$ 15,607 |
1. |
Amortization for the three months ended |
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Assets Under Management ("AUM") |
|||||||||||||||
(in millions) |
|||||||||||||||
(unaudited) |
|||||||||||||||
For the three months ended: |
Sales Channel (4) |
Portfolio |
|||||||||||||
Wealth |
Institutional |
Total |
Blended |
Equity |
Fixed Income |
Total |
|||||||||
As of |
$ 9,174.8 |
$ 11,474.4 |
$ 20,649.2 |
$ 14,112.3 |
$ 5,452.0 |
$ 1,084.9 |
|
||||||||
Gross client inflows (1) |
173.7 |
572.3 |
746.0 |
286.4 |
248.2 |
211.4 |
746.0 |
||||||||
Gross client outflows (1) |
(389.5) |
(489.4) |
(878.9) |
(504.5) |
(266.8) |
(107.6) |
(878.9) |
||||||||
Market appreciation/(depreciation) & other (2) |
(828.1) |
(1,233.3) |
(2,061.4) |
(1,269.4) |
(764.6) |
(27.4) |
(2,061.4) |
||||||||
As of |
$ 8,130.9 |
$ 10,324.0 |
$ 18,454.9 |
$ 12,624.8 |
$ 4,668.8 |
$ 1,161.3 |
|
||||||||
Average AUM for period |
$ 8,617.5 |
$ 10,904.4 |
$ 19,521.9 |
$ 13,331.2 |
$ 5,058.1 |
$ 1,132.6 |
|
||||||||
As of |
$ 9,776.9 |
$ 12,765.7 |
$ 22,542.6 |
$ 15,074.1 |
$ 6,374.4 |
$ 1,094.1 |
|
||||||||
Gross client inflows (1) |
242.0 |
486.4 |
728.4 |
426.0 |
176.4 |
126.0 |
728.4 |
||||||||
Gross client outflows (1) |
(330.0) |
(1,007.8) |
(1,337.8) |
(564.4) |
(680.6) |
(92.8) |
(1,337.8) |
||||||||
Market appreciation/(depreciation) & other (2) |
(514.1) |
(769.9) |
(1,284.0) |
(823.4) |
(418.2) |
(42.4) |
(1,284.0) |
||||||||
As of |
$ 9,174.8 |
$ 11,474.4 |
$ 20,649.2 |
$ 14,112.3 |
$ 5,452.0 |
$ 1,084.9 |
|
||||||||
Average AUM for period |
$ 9,381.6 |
$ 11,949.3 |
$ 21,330.9 |
$ 14,457.0 |
$ 5,788.2 |
$ 1,085.7 |
|
||||||||
As of |
$ 9,217.5 |
$ 11,922.3 |
$ 21,139.8 |
$ 14,138.5 |
$ 5,982.6 |
$ 1,018.7 |
|
||||||||
Gross client inflows (1) |
216.6 |
570.7 |
787.3 |
543.7 |
183.2 |
60.4 |
787.3 |
||||||||
Gross client outflows (1) |
(295.2) |
(553.8) |
(849.0) |
(572.5) |
(242.7) |
(33.8) |
(849.0) |
||||||||
Market appreciation/(depreciation) & other (2) |
474.6 |
708.8 |
1,183.4 |
758.9 |
410.8 |
13.7 |
1,183.4 |
||||||||
As of |
$ 9,613.5 |
$ 12,648.0 |
$ 22,261.5 |
$ 14,868.6 |
$ 6,333.9 |
$ 1,059.0 |
|
||||||||
Average AUM for period |
$ 9,467.4 |
$ 12,373.0 |
$ 21,840.4 |
$ 14,562.2 |
$ 6,240.3 |
$ 1,037.9 |
|
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For the six months ended: |
Sales Channel (4) |
Portfolio |
|||||||||||||
Wealth |
Institutional |
Total |
Blended |
Equity |
Fixed Income |
Total |
|||||||||
As of |
$ 9,776.9 |
$ 12,765.7 |
$ 22,542.6 |
$ 15,074.1 |
$ 6,374.4 |
$ 1,094.1 |
|
||||||||
Gross client inflows (1) |
415.7 |
1,058.7 |
1,474.4 |
712.4 |
424.6 |
337.4 |
1,474.4 |
||||||||
Gross client outflows (1) |
(719.5) |
(1,497.2) |
(2,216.7) |
(1,068.9) |
(947.4) |
(200.4) |
(2,216.7) |
||||||||
Market appreciation/(depreciation) & other (2) |
(1,342.2) |
(2,003.2) |
(3,345.4) |
(2,092.8) |
(1,182.8) |
(69.8) |
(3,345.4) |
||||||||
As of |
$ 8,130.9 |
$ 10,324.0 |
$ 18,454.9 |
$ 12,624.8 |
$ 4,668.8 |
$ 1,161.3 |
|
||||||||
Average AUM for period |
$ 8,974.6 |
$ 11,420.0 |
$ 20,394.6 |
$ 13,863.0 |
$ 5,419.0 |
$ 1,112.6 |
|
||||||||
As of |
$ 8,906.4 |
$ 11,213.0 |
$ 20,119.4 |
$ 13,558.8 |
$ 5,545.3 |
$ 1,015.3 |
|
||||||||
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 |
$ 14,868.6 |
$ 6,333.9 |
$ 1,059.0 |
|
||||||||
Average AUM for period |
$ 9,232.0 |
$ 11,929.7 |
$ 21,161.7 |
$ 14,159.4 |
$ 5,967.4 |
$ 1,034.9 |
|
1. |
Transfers of client assets between portfolios are included in gross client inflows and gross client outflows. |
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. |
3. |
Beginning in 2021, AUM includes assets associated with our model-delivery business, previously classified as assets under advisement. These assets totaled |
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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