GREENWICH, Conn.--(BUSINESS WIRE)--Teton Advisors, Inc. ("Teton" or the "Company") (OTCQX: TETAA) announced its fourth quarter and full year 2023 results including cash and marketable securities. The Company's Q4-2023 and full year highlights are as follows:
- Full year fully diluted GAAP EPS of $0.75 compared to $1.18 a year ago. Fourth quarter fully diluted GAAP EPS of $0.19 compared to $0.27 a year ago.
- Full year fully diluted Cash EPS1 of $0.98 compared to $1.62 a year ago. Fourth quarter fully diluted Cash EPS1 of $0.26 compared to $0.49 a year ago.
- Full year Revenues of $12.0 million, down 13% year-over-year. Fourth quarter Revenues of $2.9 million, down 11% quarter-over-quarter.
- Full year Average AUM of $1.4 billion, down 17% year-over-year.
- Net cash, cash equivalents and marketable securities totaled $23.5 million or $14.30 per share as of December 31, 2023, an increase of 8.7% compared to a net of $21.6 million or $13.16 per share at the prior year end.
"Our bottom-up, fundamental, research driven, active management investment strategies, with a focus on small and mid-cap companies, stand to benefit from the rotation by investors back to value and inefficiently priced equities," said Nicholas Galluccio, Chairman of Teton Advisors, LLC, and portfolio manager of the four-star Morningstar rated Teton Westwood SmallCap Equity Fund.
"Teton's very capable platform, with an extensive amount of distribution agreements in place, serving retail, institutional, and high net worth clients, positions us well to attract new investment teams and client accounts and to grow both organically and through acquisitions," said Stephen Bondi, Chief Executive Officer. He further stated, "Our multiple investment teams and product diversification provides a strong foundation for future growth."
Fourth quarter net income and fully diluted earnings per share were $0.3 million and $0.19, respectively, compared to net income of $0.4 million and $0.27, respectively, for the same period a year ago. Excluding certain non-cash items, Cash Earnings1 and Cash Earnings per fully diluted share were $0.4 million and $0.26, respectively, for the current quarter as compared to $0.8 million and $0.49, respectively, for the comparative quarter in 2022.
Fourth quarter Revenues were $2.9 million for the quarter versus $3.2 million for the comparative quarter in 2022. Average AUM for the quarter was $1.3 billion versus $1.5 billion for the fourth quarter in 2022.
| Financial Highlights | |||||||||||
| ($'s in 000's except AUM and per share data) | |||||||||||
Fourth Quarter | Full Year | ||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||
| AUM - average (in millions) | $ | 1,277 | $ | 1,541 | $ | 1,408 | $ | 1,691 | |||
| AUM - end of period (in millions) | $ | 1,346 | $ | 1,498 | $ | 1,346 | $ | 1,498 | |||
| Revenues | $ | 2,850 | $ | 3,190 | $ | 12,043 | $ | 13,778 | |||
| Income before interest, taxes, depreciation & | |||||||||||
| amortization, and impairment | 631 | 1,191 | 1,850 | 2,901 | |||||||
| Impairment of intangible asset | 59 | 400 | 59 | 400 | |||||||
| Net income | 300 | 426 | 1,205 | 1,601 | |||||||
| Net income per fully diluted share | $ | 0.19 | $ | 0.27 | $ | 0.75 | $ | 1.18 | |||
1Cash earnings and cash earnings per fully diluted share are non-GAAP performance measures and are explained and reconciled in the Supplemental Financial Information section starting on page 6 of this press release. The quarterly and full year results include the non-cash amortization expense of our intangible assets. In addition, the Company recognized a non-cash impairment charge of $59,000 and $400,000 related to its intangible assets for the fourth quarter of 2023 and 2022, respectively.
Notice of Teton's Annual General Meeting
The Company cordially invites you to participate in its 2024 Annual Meeting of Shareholders (the "Annual Meeting") to be held on Wednesday, May 22, 2024 at 9:00 A.M., Eastern Time as announced. Immediately following the Annual Meeting, a company review for shareholders will commence to discuss operations.
For access to the webcast of each meeting, you must register at https://www.tetonadv.com/register. After registering, you will receive a confirmation email containing information about joining the meeting from a computer or telephone. Any questions can be directed to our Secretary at info@tetonadv.com or (914) 457-1077.
Table I | ||||||
Teton Advisors, Inc. | ||||||
Unaudited Condensed Consolidated Statements of Income | ||||||
For the Three Months Ended December 31, | ||||||
2023 | 2022 | |||||
| Revenues | ||||||
| Investment advisory fees - mutual funds, net | $ | 1,906,268 | $ | 2,353,846 | ||
| Investment advisory fees - separate accounts | 587,911 | 650,154 | ||||
| Distribution fees and other income, net | 356,031 | 186,334 | ||||
| Total revenues | 2,850,210 | 3,190,334 | ||||
| Operating expenses | ||||||
| Compensation | 1,075,301 | 558,462 | ||||
| Sub-advisory fees | 323,745 | 460,791 | ||||
| Distribution costs | 319,784 | 392,071 | ||||
| Marketing and administrative fees | 40,913 | 50,140 | ||||
| Advanced commissions | 3,305 | 2,925 | ||||
| Other operating expenses | 456,189 | 535,404 | ||||
| Total operating expenses | 2,219,237 | 1,999,793 | ||||
| Income before interest, taxes, depreciation, amortization and impairment | 630,973 | 1,190,541 | ||||
| Depreciation and amortization | 84,182 | 84,160 | ||||
| Impairment of intangible asset | 59,000 | 400,000 | ||||
| Income before income taxes | 487,791 | 706,381 | ||||
| Income tax provision | 187,896 | 280,819 | ||||
| Net income | $ | 299,895 | $ | 425,562 | ||
| Net income per share: | ||||||
| Basic | $ | 0.19 | $ | 0.27 | ||
| Fully diluted | $ | 0.19 | $ | 0.27 | ||
| Weighted average shares outstanding: | ||||||
| Basic | 1,599,440 | 1,600,899 | ||||
| Fully diluted | 1,616,609 | 1,603,082 | ||||
Table II | ||||||
Teton Advisors, Inc. | ||||||
Condensed Consolidated Statements of Income | ||||||
For the Years Ended December 31, | ||||||
2023 | 2022 | |||||
| Revenues | ||||||
| Investment advisory fees - mutual funds, net | $ | 10,923,634 | $ | 10,596,589 | ||
| Investment advisory fees - separate accounts | 18,598 | 2,912,715 | ||||
| Distribution fees and other income, net | 1,102,504 | 268,329 | ||||
| Total revenues | 12,044,736 | 13,777,633 | ||||
| Operating expenses | ||||||
| Compensation | 5,102,161 | 5,030,627 | ||||
| Sub-advisory fees | 179,543 | 2,131,362 | ||||
| Distribution costs | 1,369,024 | 1,629,606 | ||||
| Marketing and administrative fees | 18,379 | 169,288 | ||||
| Advanced commissions | 1,505,402 | 20,884 | ||||
| Other operating expenses | 2,020,302 | 1,894,477 | ||||
| Total operating expenses | 10,194,811 | 10,876,244 | ||||
| Income before interest, taxes, depreciation, amortization and impairment | 1,849,925 | 2,901,389 | ||||
| Depreciation and amortization | 336,727 | 336,957 | ||||
| Impairment of intangible asset | 59,000 | 400,000 | ||||
| Income before income taxes | 1,454,198 | 2,164,432 | ||||
| Income tax provision | 249,080 | 563,493 | ||||
| Net income | $ | 1,205,118 | $ | 1,600,939 | ||
| Net income per share: | ||||||
| Basic | $ | 0.75 | $ | 1.18 | ||
| Fully diluted | $ | 0.75 | $ | 1.18 | ||
| Weighted average shares outstanding: | ||||||
| Basic | 1,599,440 | 1,357,915 | ||||
| Fully diluted | 1,612,300 | 1,360,949 | ||||
Table III | |||||
Teton Advisors, Inc. | |||||
Condensed Consolidated Statements of Financial Condition | |||||
As of December 31, | |||||
2023 | 2022 | ||||
| ASSETS | |||||
| Cash and cash equivalents | $ | 20,781,885 | $ | 26,995,341 | |
| Investment advisory fees receivable | 846,781 | 999,299 | |||
| Intangible assets, net | 2,589,113 | 2,974,011 | |||
| Investments in securities | 2,706,683 | 2,559,401 | |||
| Deferred tax asset | 3,002,595 | 3,183,152 | |||
| Other assets | 541,782 | 549,952 | |||
| Total assets | $ | 30,468,839 | $ | 37,261,156 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
| Due to broker | $ | - | $ | 7,947,111 | |
| Compensation payable | 746,277 | 255,038 | |||
| Payable to affiliates | 216,340 | 436,943 | |||
| Distribution costs payable | 191,801 | 359,315 | |||
| Income tax payable | 81,040 | 67,197 | |||
| Accrued expenses and other liabilities | 1,153,112 | 1,632,569 | |||
| Total liabilities | 2,388,570 | 10,698,173 | |||
| Total stockholders' equity | 28,080,269 | 26,562,983 | |||
| Total liabilities and stockholders' equity | $ | 30,468,839 | $ | 37,261,156 | |
Supplemental Financial Information
As supplemental information, we provide a non-U.S. generally accepted accounting principles ("non-GAAP") performance measure that we refer to as Cash Earnings. We provide this measure in addition to, but not as a substitute for, net income reported on a U.S. generally accepted accounting principles ("GAAP") basis. Our management and the Board of Directors review Cash Earnings to evaluate our ongoing performance, allocate resources and review our dividend policy. We believe that this non-GAAP performance measure, while not a substitute for GAAP net income, is useful for management and investors when evaluating our underlying operating and financial performance and our available resources. We do not advocate that investors consider this non-GAAP measure without considering financial information prepared in accordance with GAAP.
In calculating quarterly and full year Cash Earnings, we add back to net income, the non-cash amortization expense associated with our intangible assets. In addition, as a result of an assessment of the carrying value of the intangible assets, the Company recognized a non-cash impairment charge of $59,000 and $400,000 in the fourth quarters and full years ended December 31, 2023 and 2022, respectively. For purposes of calculating Cash Earnings, the Company added back the after-tax amounts associated with this impairment charge of $41,330 and $280,200 for the fourth quarters and full years ended December 31, 2023 and 2022, respectively. Although depreciation on property & equipment and amortization of leaseholds are also non-cash expenses, we do not add it back when calculating Cash Earnings because those charges represent a decline in the value of the related assets that will ultimately require replacement.
The following table provides a reconciliation of net income to Cash Earnings and Cash Earnings Per Share for the quarterly periods presented:
For the Quarter Ended December 31, | |||||
| (unaudited) | 2023 | 2022 | |||
| Net income | $ | 299,895 | $ | 425,562 | |
| Add: Intangible amortization - customer relationships | 81,475 | 81,475 | |||
| Add: Impairment of intangible assets (net of tax impact) | 41,330 | 280,200 | |||
| Cash Earnings | $ | 422,700 | $ | 787,237 | |
| Cash Earnings Per Fully Diluted Share | $ | 0.26 | $ | 0.49 | |
The following table provides a reconciliation of net income to Cash Earnings and Cash Earnings Per Share for the full year periods presented:
For the Years Ended December 31, | |||||
2023 | 2022 | ||||
| Net income | $ | 1,205,118 | $ | 1,600,939 | |
| Add: Intangible amortization - customer relationships | 325,898 | 325,898 | |||
| Add: Impairment of intangible assets (net of tax impact) | 41,330 | 280,200 | |||
| Cash Earnings | $ | 1,572,346 | $ | 2,207,037 | |
| Cash Earnings Per Fully Diluted Share | $ | 0.98 | $ | 1.62 | |
ABOUT TETON
Teton Advisors, Inc. (OTCQX: TETAA) is a specialist in smaller company investing, serving a diverse client base of institutional, high net worth and mutual fund investors under brands including Teton Westwood, Gabelli and Keeley. The Company was founded on a commitment to uncover value by focusing on companies that are misunderstood or ignored by the market utilizing methodologies developed by investment pioneers Mario Gabelli and John L. Keeley, Jr. As active, fundamental investors, the Teton portfolio teams think independently and focus on identifying short-term market inefficiencies to generate long-term alpha. Teton's investment professionals share in the belief that being different is the cornerstone to discovering hidden value in equities. The Teton time-tested investment approaches can help set apart your client portfolios, delivering differentiated attributes to round out a broader portfolio. From modest beginnings over 40 years ago, to today, The Disciplined Discovery of Value shapes the cornerstone for our clients' long-term success.
Notification to all Teton Advisors, Inc. Class B Shareholders
Class B shares are convertible on a one-for-one basis into Class A shares that trade through multiple market makers on OTCQX: TETAA. Teton shareholders may convert their Class B Shares into Class A Shares, which most recently traded at $15.00 per share. For those Class B shareholders interested in conversion, please see the Investor Relations page on Teton's website to complete a Conversion Notice Request Form - (http://tetonadv.com/documents/ConversionNotice.pdf).
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
Our disclosure and analysis in this press release contain some forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. Such statements are subject to contingencies and uncertainties, some or all of which may be material. We direct your attention to the cautionary statements regarding forward-looking information set forth in documents on Teton's website. We do not undertake to update publicly any forward-looking statements if we subsequently learn that we are unlikely to achieve our expectations or if we receive any additional information relating to the subject matter of our forward-looking statements.
Contacts
Patrick Huvane, CPA, CFA
Chief Financial Officer
(914) 457-1074
For further information, please visit: www.tetonadv.com
