Press Release Source: Calamos Asset Management, Inc.
Calamos Asset Management, Inc. Reports Strong Results for Fourth Quarter and Full Year 2005, Ending Year with $43.8 Billion in Assets Under Management
Monday January 30, 4:00 pm ET
-- Fourth quarter 2005 diluted earnings per share were 35 cents, up 40 percent from pro forma diluted earnings per share of 25 cents for the fourth quarter 2004
-- Diluted earnings per share were $1.26 for 2005, an increase of 59 percent from 2004 pro forma diluted earnings per share of 79 cents
-- Net income was $8.2 million for the fourth quarter of 2005 and $29.2 million for the full year 2005
-- The board declared a regular quarterly dividend of 9 cents per share, a 29 percent increase over the prior quarter
NAPERVILLE, Ill., Jan. 30 /PRNewswire-FirstCall/ -- Calamos Asset Management, Inc. (Nasdaq: CLMS - News) reported strong results for the fourth quarter and full year 2005, reflecting asset growth due to $3.6 billion in net purchases and $2.2 billion in net market appreciation.
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Assets under management were $43.8 billion at Dec. 31, 2005, up 15 percent from $38.0 billion at year-end 2004. Revenues increased 24 percent to $113.5 million for the fourth quarter of 2005 from $91.4 million for the final three months of 2004. Operating income rose 35 percent to $55.0 million from $40.6 million a year ago. Operating margin was 48.5 percent for the fourth quarter of 2005, versus 44.4 percent for the same period a year ago.
The company reported net income of $8.2 million for the fourth quarter of 2005, a 44 percent increase from pro forma net income of $5.7 million for the last three months of 2004. Diluted earnings per share increased 40 percent to 35 cents per share for the fourth quarter of 2005, versus pro forma diluted earnings per share of 25 cents for same period a year ago. Management believes that pro forma results provide a more meaningful basis for period-to-period comparisons of the company's results. These pro forma results give effect to the company's 2004 reorganization, including its initial public offering (IPO), as if it had occurred at the beginning of 2004.(5, 6, 9)
Also announced today, the board of directors approved a regular quarterly dividend of 9 cents per share, payable on Feb. 22, 2006 to shareholders of record on Feb. 7, 2006. This represents a 29 percent increase from the previous rate of 7 cents per share.
"Our organic growth in assets and revenues benefited from continued diversification of our investment strategies and client base, such as the addition of two international portfolios and a co-branding and investment management agreement in Europe," said John P. Calamos, Sr., chairman and chief executive officer. "We plan continued growth through diversification in 2006. For example, we are working on wider distribution to institutional investors, as demonstrated by our 25 percent net increase in institutional assets under management in 2005."
For the full year 2005, Calamos Asset Management reported revenues of $417.6 million, up 34 percent from pro forma revenues of $312.0 million for 2004. Operating income climbed 55 percent to $206.1 million for 2005, versus pro forma operating income of $133.3 million for 2004. Operating margin was 49.4 percent for 2005, compared with pro forma operating margin of 42.7 percent for 2004. Net income was $29.2 million for 2005, a 61 percent increase from pro forma net income of $18.1 million for 2004. Diluted earnings per share rose 59 percent to $1.26 per share for 2005, compared with pro forma diluted earnings per share of 79 cents for 2004.
At Dec. 31, 2005, the company had $31.9 billion in mutual funds and $11.9 billion in separate accounts, for a total of $43.8 billion in assets under management. Net assets rose 4 percent during the fourth quarter of 2005, due to $673 million in net purchases and $963 million in net market appreciation. Average assets under management were $42.6 billion for the fourth quarter of 2005, an increase of 20 percent from $35.4 billion for the same period of 2004.
Highlights of 2005 included:
-- Calamos Asset Management launched the open-end Calamos International
Growth Fund, which invests a significant portion of its assets in
foreign securities and totaled nearly $160 million in assets at year-
end 2005.
-- The firm introduced the Calamos Global Total Return Fund (NYSE: CGO - News),
a closed-end fund that invests at least 30 percent of its managed
assets in the securities of foreign issuers, seeking total return
through a combination of capital appreciation and current income. The
fund totaled $119 million at Dec. 31, 2005 and with a preferred stock
offering in early January 2006, now totals approximately $180 million
in assets.
-- The firm re-opened its open-end Market Neutral Fund to new
investments, broadened its mandate to include a covered call strategy
and renamed it the Calamos Market Neutral Income Fund.
-- As a result of the firm's first fund distribution arrangement outside
the United States, a Calamos co-branded fund grew to more than
$350 million in assets invested by European institutions and
individuals as of year-end 2005.
-- Several third parties recognized the firm's performance in 2005,
including Forbes (#1 fund in the 2005 Mutual Funds Survey/Honor Roll,
Sept. 19, 2005 issue) and Fortune (Investors' Guide 2006/Star Funds,
Dec. 12, 2005 issue).
-- In March 2005, the firm's operations department received
"ISO 9001:2000" certification from the International Organization of
Standardization (ISO). Management believes the firm is one of the
first investment advisors to implement this standard within an
investment operations group.
Management will hold an investor conference call at 5 p.m. Eastern time on Monday, Jan. 30, 2006. To access the live call and view management's presentation, click on the Investor Relations tab at calamos.com . Alternatively, participants may listen to the live call by dialing 800-374-2572 (706-679-3532 outside the U.S.). Management's presentation and a replay of the call will be available until the end of the day on Feb. 6, 2006 by clicking on the Investor Relations tab at calamos.com . Until the end of the day on Feb. 6, 2006, an audio replay will be available by dialing 800-642-1687 (706-645-9291 outside the U.S.) and entering conference ID number 4155929.
Calamos Asset Management, Inc. (Nasdaq: CLMS - News) is a diversified investment firm offering equity, high yield, convertible and alternative investment strategies through its subsidiaries. The firm serves institutions and individuals via separately managed accounts, open-end mutual funds and closed- end funds, offering a risk-managed approach to capital appreciation and income-producing strategies. For more information, visit calamos.com .
From time to time, information or statements provided by Calamos Asset Management, Inc., including those within this news release, may contain certain forward-looking statements relating to future events, future financial performance, strategies, expectations and 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. Such risks and uncertainties include, but are not limited to: loss of revenues due to contract terminations and redemptions, unavailability of third-party retail distribution channels, our ownership structure, fluctuations in the financial markets and the competitive conditions in the mutual fund, asset management and broader financial services sectors. For a discussion concerning these and other risks, uncertainties and other important factors that could affect future results, see "Forward-Looking Information" and, where applicable, "Business Risks" in the company's annual and quarterly reports filed with the U.S. Securities and Exchange Commission.
Investors should consider the investment objective and policies, risk considerations, charges and expenses of the Calamos Funds carefully before investing. The prospectus contains this and other information relevant to an investment in the Calamos Funds. For a prospectus, please contact your securities representative or Calamos Financial Services LLC, the Funds' distributor, 2020 Calamos Court, Naperville, Illinois 60563, (800) 582-6959. Please read the prospectus carefully before you invest or send money.
Calamos Asset Management, Inc.
Unaudited Consolidated Condensed Statements of Income
(in thousands, except per share data)
Combined
Three Months Three
Ended Oct. 1 to Nov. 2 to Months
Dec. 31, Nov. 1, 2004 Dec. 31, Ended
2005 (Predecessor) 2004 Dec. 31, 2004
Revenues:
Investment management
fees $78,012 $20,398 $41,787 $62,185
Distribution and
underwriting fees 34,526 9,007 19,350 28,357
Other 950 226 633 859
Total revenues 113,488 29,631 61,770 91,401
Expenses:
Employee compensation
and benefits 15,883 7,922 12,538 20,460
Distribution and
underwriting expense 22,440 4,847 11,040 15,887
Amortization of
deferred sales
commissions 7,633 2,638 5,109 7,747
Marketing and sales
promotion 3,970 964 2,228 3,192
General and
administrative 8,536 882 2,622 3,504
Total expenses 58,462 17,253 33,537 50,790
Operating income 55,026 12,378 28,233 40,611
Total other income
(expense), net 5,138(1) (450) 1,017 567
Income before minority
interest in Calamos
Holdings LLC and
income taxes 60,164 11,928 29,250 41,178
Minority interest 46,270 --- 22,609 22,609
Income before
income taxes 13,894 11,928 6,641 18,569
Income taxes 5,684 2 2,649 2,651
Net income $8,210 $11,926 $3,992 $15,918
Earnings per share,
basic $0.36 $0.12 $0.18
Weighted average
shares outstanding,
basic 23,000,100 96,800,000(2) 22,700,100
Calculation of
earnings per
share, diluted,
assuming exchange
of membership
units:
Income before
minority interest
in Calamos
Holdings LLC and
income taxes $60,164 $29,250
Impact of income
taxes (3) 24,613 11,668
Earnings available
to common
shareholders $35,551 $17,582
Earnings per share,
diluted $0.35 $0.12 $0.17
Weighted average
shares outstanding,
diluted (4) 100,699,343 96,800,000 100,491,409
Calamos Asset Management, Inc.
Unaudited Consolidated Condensed Statements of Income
(in thousands, except per share data)
Three Months Combined
Ended Three Months
Dec. 31, Ended Pro Forma 2004 as
2005 Dec. 31, 2004 Adjustments Adjusted
Revenues:
Investment management
fees $78,012 $62,185 $--- $62,185
Distribution and
underwriting fees 34,526 28,357 --- 28,357
Other 950 859 --- 859
Total revenues 113,488 91,401 --- 91,401
Expenses:
Employee compensation
and benefits 15,883 20,460 --- 20,460
Distribution and
underwriting expense 22,440 15,887 --- 15,887
Amortization of
deferred sales
commissions 7,633 7,747 --- 7,747
Marketing and sales
promotion 3,970 3,192 --- 3,192
General and
administrative 8,536 3,504 3,504
Total expenses 58,462 50,790 --- 50,790
Operating income 55,026 40,611 --- 40,611
Total other
income (expense),
net 5,138(1) 567 --- 567
Income before minority
interest in Calamos
Holdings LLC and
income taxes 60,164 41,178 --- 41,178
Minority interest 46,270 22,609 9,098(5) 31,707
Income before
income taxes 13,894 18,569 (9,098) 9,471
Income taxes 5,684 2,651 1,126(6) 3,777
Net income $8,210 $15,918 $(10,224) $5,694
Earnings per share,
basic $0.36 $0.25
Weighted average
shares outstanding,
basic 23,000,100 23,000,100(7)
Calculation of
earnings per
share, diluted,
assuming exchange
of membership
units:
Income before
minority
interest in
Calamos
Holdings LLC
and income
taxes $60,164 $41,178
Impact of income
taxes (3) 24,613 16,426
Earnings
available to
common
shareholders $35,551 $24,752
Earnings per share,
diluted $0.35 $0.25
Weighted average
shares outstanding,
diluted (4) 100,699,343 100,320,519
Calamos Asset Management, Inc.
Unaudited Consolidated Condensed Statements of Income
(in thousands, except per share data)
Year Ended Jan. 1 to Nov. 2 to Combined
Dec. 31, Nov. 1, 2004 Dec. 31, Year Ended
2005 (Predecessor) 2004 Dec. 31, 2004
Revenues:
Investment management
fees $284,951 $168,938 $41,787 $210,725
Distribution and
underwriting fees 129,250 79,578 19,350 98,928
Other 3,366 1,861 633 2,494
Total revenues 417,567 250,377 61,770 312,147
Expenses:
Employee compensation
and benefits 61,029 53,170 12,538 65,708
Distribution and
underwriting expense 79,446 39,517 11,040 50,557
Amortization of
deferred sales
commissions 31,431 24,315 5,109 29,424
Marketing and sales
promotion 14,266 16,693 2,228 18,921
General and
administrative 25,301 11,445 2,622 14,067
Total expenses 211,473 145,140 33,537 178,677
Operating income 206,094 105,237 28,233 133,470
Total other
income (expense),
net 5,761(8) (1,487) 1,017 (470)
Income before minority
interest in Calamos
Holdings LLC and
income taxes 211,855 103,750 29,250 133,000
Minority interest 163,009 --- 22,609 22,609
Income before
income taxes 48,846 103,750 6,641 110,391
Income taxes 19,624 1,567 2,649 4,216
Net income $29,222 $102,183 $3,992 $106,175
Earnings per share,
basic $1.27 $1.06 $0.18
Weighted average
shares outstanding,
basic 23,000,100 96,800,000(2) 22,700,100
Calculation of
earnings per
share, diluted,
assuming exchange
of membership
units:
Income before
minority
interest in
Calamos
Holdings LLC
and income
taxes $211,855 $29,250
Impact of
income taxes (3) 85,102 11,668
Earnings
available to
common
shareholders $126,753 $17,582
Earnings per share,
diluted $1.26 $1.06 $0.17
Weighted average
shares outstanding,
diluted (4) 100,625,824 96,800,000 100,491,409
Calamos Asset Management, Inc.
Unaudited Consolidated Condensed Statements of Income
(in thousands, except per share data)
Combined Year Ended Dec. 31,
Year Ended Pro Forma 2004 as
Dec. 31, 2005 2004 Adjustments Adjusted
Revenues:
Investment management
fees $284,951 $210,725 $--- $210,725
Distribution and
underwriting fees 129,250 98,928 --- 98,928
Other 3,366 2,494 (157)(9) 2,337
Total revenues 417,567 312,147 (157) 311,990
Expenses:
Employee compensation
and benefits 61,029 65,708 (123)(9) 65,585
Distribution and
underwriting expense 79,446 50,557 --- 50,557
Amortization of
deferred sales
commissions 31,431 29,424 --- 29,424
Marketing and sales
promotion 14,266 18,921 --- 18,921
General and
administrative 25,301 14,067 115(9) 14,182
Total expenses 211,473 178,677 (8) 178,669
Operating income 206,094 133,470 (149) 133,321
Total other
income (expense),
net 5,761(8) (470) (1,808)(9) (2,278)
Income before minority
interest in Calamos
Holdings LLC and
income taxes 211,855 133,000 (1,957) 131,043
Minority interest 163,009 22,609 78,293(5) 100,902
Income before
income taxes 48,846 110,391 (80,250) 30,141
Income taxes 19,624 4,216 7,805(6) 12,021
Net income $29,222 $106,175 $(88,055) $18,120
Earnings per share,
basic $1.27 $0.79
Weighted average
shares outstanding,
basic 23,000,100 23,000,100(7)
Calculation of
earnings per
share, diluted,
assuming exchange
of membership
units:
Income before
minority
interest in
Calamos
Holdings LLC
and income
taxes $211,855 $131,043
Impact of income
taxes (3) 85,102 52,273
Earnings
available to
common
shareholders $126,753 $78,770
Earnings per share,
diluted $1.26 $0.79
Weighted average
shares outstanding,
diluted (4) 100,625,824 100,080,642
Calamos Asset Management, Inc.
Assets Under Management
(in millions)
Quarter Ended Dec. 31, Change
2005 2004 Amount Percent
Mutual Funds
Beginning assets
under management $30,476 $23,105 $7,371 32%
Net purchases 799 1,706 (907) 53
Market appreciation 623 2,140 (1,517) 71
Ending assets
under management 31,898 26,951 4,947 18
Average assets
under management 30,904 24,890 6,014 24
Separate Accounts
Beginning assets
under management 11,693 10,144 1,549 15
Net purchases (126) 177 (304) 172
Market appreciation 340 703 (362) 51
Ending assets
under management 11,907 11,024 883 8
Average assets
under management 11,675 10,502 1,173 11
Total Assets Under
Management
Beginning assets
under management 42,169 33,249 8,920 27
Net purchases 673 1,883 (1,211) 64
Market appreciation 963 2,843 (1,879) 66
Ending assets
under management 43,805 37,975 5,830 15
Average assets
under management $42,579 $35,392 $7,187 20%
At Dec. 31, Change
2005 2004 Amount Percent
Mutual Funds
Open-end funds $25,957 $20,921 $5,036 24%
Closed-end funds 5,941 6,030 (89) 1
Total mutual funds 31,898 26,951 4,947 18
Separate Accounts
Institutional
accounts 4,169 3,332 837 25
Managed accounts 6,899 7,091 (192) 3
Private client
accounts 748 527 221 42
Alternative investments 91 74 17 23
Total separate
accounts 11,907 11,024 883 8
Ending assets
under management $43,805 $37,975 $5,830 15%
At Dec. 31, Change
Assets by Strategy 2005 2004 Amount Percent
Equity $23,747 $17,072 $6,675 39%
Balanced 11,260 10,352 908 9
Convertible 5,662 7,035 (1,373) 20
High Yield 2,783 2,837 (54) 2
Alternative 353 679 (326) 48
Ending assets
under management $43,805 $37,975 $5,830 15%
Calamos Asset Management, Inc.
Notes to Unaudited Consolidated Condensed Statements of Income
The unaudited consolidated condensed pro forma statements of income for
Calamos Asset Management, Inc. for the three months and year ended Dec.
31, 2004 give effect to the reorganization described in the company's
Registration Statement on Form S-1 (File No. 333-117847) filed with the
U.S. Securities and Exchange Commission (SEC). The reorganization
includes (1) the Real Estate Distribution, whereby Calamos Family
Partners, Inc. (formerly known as Calamos Holdings Inc.), distributed its
interest in all of its owned real estate assets to its stockholders, who
contributed those assets to a new limited liability company; (2) the
Formation Transaction, whereby on Oct. 15, 2004, Calamos Family Partners,
Inc. contributed all of its assets and liabilities, including, among other
things, all equity interests in its wholly owned subsidiaries, to Calamos
Holdings LLC in exchange for 96,800,000 of the membership units of Calamos
Holdings LLC; and (3) the consummation of the company's IPO and use of the
net proceeds to acquire membership units in Calamos Holdings LLC. The pro
forma statements give effect to the reorganization as if it had occurred
at the beginning of 2004. The most significant pro forma adjustments
relate to the minority interest of Calamos Family Partners, Inc. and to
income taxes, as Calamos Family Partners, Inc. historically operated as an
S corporation. Management believes that pro forma results provide a more
meaningful basis for period-to-period comparisons of the company's
results. For more information, see the company's Registration Statement
on Form S-1 and its Annual Report on Form 10-K filed with the SEC.
On Nov. 2, 2004, the company became the sole manager of Calamos Holdings
LLC and is now conducting the business previously conducted by Calamos
Family Partners, Inc. Accordingly, the results for the three months and
year ended Dec. 31, 2004 reflect the operations for Calamos Family
Partners, Inc. and its subsidiaries, while the results for the three
months and year ended Dec. 31, 2005 reflect the operations for Calamos
Asset Management, Inc.
(1) Includes $8.8 million of investment gains, partially offset by
$1.7 million of minority interest related to the consolidation of the
Calamos Equity Opportunities Fund LP and $2.0 million of interest
expense for the three months ended Dec. 31, 2005.
(2) Represents the contribution by Calamos Family Partners of all its
assets and liabilities in exchange for 96.8 million membership units
of Calamos Holdings LLC.
(3) In calculating diluted earnings per share, the 2005 effective tax
rates for the three months and year ended Dec. 31, 2005 of
40.9 percent and 40.2 percent, respectively, and the 2004 effective
tax rate of 39.9 percent were applied to income before minority
interest and income taxes.
(4) Diluted shares outstanding for each period presented represent the
weighted average Class A common stock after giving effect to the
offering as of the beginning of 2004. The diluted shares outstanding
are calculated: (a) including the effect of outstanding restricted
stock unit and option awards and (b) assuming Calamos Family Partners,
Inc. and John P. Calamos, Sr. exchanged all of their membership units
in Calamos Holdings LLC for, and converted all outstanding shares of
our Class B common stock into, shares of our Class A common stock, in
each case on a one-for-one basis.
(5) Represents an adjustment to increase Calamos Asset Management, Inc.'s
minority interest allocation in Calamos Holdings LLC to 77.0 percent.
Minority interest was determined by multiplying the income before
minority interest in Calamos Holdings LLC and income taxes by Calamos
Family Partners, Inc.'s and John P. Calamos, Sr.'s 77.0 percent
aggregate ownership. The minority interest adjustment is presented
based on the income for the periods presented.
(6) Reflects the impact of federal and state income taxes on the income
allocated from Calamos Holdings LLC to Calamos Asset Management, Inc.
Historically, Calamos Family Partners, Inc. operated as an S
corporation and was not subject to U.S. federal and certain state
income taxes, but was subject to Illinois replacement taxes. The
amount of pro forma adjustment was determined by eliminating the
Illinois replacement tax and applying the combined projected federal
corporate income tax rate and applicable state tax rates to income
before income taxes.
(7) Reflects 23.0 million shares of Class A common stock, which represents
23.0 percent of the outstanding shares after the offering. In
addition to shares of Class A common stock, there are 100 shares of
Class B common stock outstanding.
(8) Includes $19.1 million of investment gains, partially offset by
$8.1 million of interest expense and $5.2 million of minority interest
related to the consolidation of the Calamos Equity Opportunities Fund
LP for the year ended Dec. 31, 2005.
(9) Represents the adjustment related to the Real Estate Distribution
based on actual amounts recorded during the periods presented.
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Source: Calamos Asset Management, Inc |
