GAMCO Investors, Inc. Reports Results for the Third Quarter 2020

-	Third quarter net income was $16.4 million vs. $13.6 million a year ago

-	Fully diluted third quarter earnings were $0.62 per share versus $0.50 per share a year ago

-	September 30, 2020 AUM was $29.7 billion versus June 30, 2020 AUM of $29.4 billion

Greenwich, Connecticut, November 6, 2020 – GAMCO Investors, Inc. (“GAMCO”) (NYSE: GBL) today reported its operating results for the quarter ended September 30, 2020.

Since March, our business contingency plans have functioned well, allowing teammates to stay close to the companies we invest in and, at the same time, to focus on our clients. In July, we welcomed our team to return to the offices on a voluntary basis. In September, we asked teammates to return to the office on a full time basis with alternating schedules to keep within government mandates and to maintain social distancing and team safety.  Our investment in technology has enabled the majority of our teammates to work-from-home to ensure their safety and health while allowing us to meet our clients’ needs.

Giving Back to Society

The Board of Directors of GAMCO announced in August that it approved a $0.25 per share shareholder designated charitable contribution (“SDCC”), a 25% increase from last year’s $0.20 per share contribution under the program.

This program underscores our commitment to managing socially responsible portfolios since 1987, which has evolved to include integrating ESG (environmental, social, and governance) factors into the analysis of companies and the structuring of portfolios.

Since the inception of GAMCO’s SDCC program in 2013, and counting the recently announced estimated $5.4 million contribution, shareholders will have designated contributions of close to $37 million to more than 280 charitable institutions. When combined with our other charitable contributions, this boosts our total contributions to approximately $62 million since our initial public offering in February 1999.

Revenues

-	Total revenues for the third quarter of 2020 were $61.3 million compared with $75.3 million in the third quarter of 2019.

-	Investment advisory fees were $54.9 million in the third quarter of 2020 versus $67.0 million in the third quarter of 2019:

-	Gabelli Funds’ revenues were $38.9 million compared to $43.8 million in the third quarter of 2019.

-	Institutional and Private Wealth Management revenues, which are generally billed on portfolio values at the beginning of the quarter, were $14.8 million compared to $21.5 million in the year ago quarter.

-	SICAV revenues were $1.2 million versus $1.7 million in last year’s third quarter.

-	Distribution fees from our equity mutual funds and other income were $6.4 million for the quarter versus $8.3 million in 2019.

Operating Income

For the quarter, operating income was $31.8 million versus $29.6 million in the year ago quarter. Waivers of CEO compensation bolstered operating income in the third quarter of 2020 by $10.0 million and by $4.3 million in the third quarter of 2019. Amortization of deferred compensation, which includes the change in GBL share price, a non-cash charge, increased operating costs by $3.6 million in the third quarter of 2019.

Return to Shareholders

GAMCO paid $0.5 million in dividends during the third quarter of 2020 and purchased 133,383 shares at an average price of $12.26 per share, or $1.6 million in total.

On November 6, 2020, GAMCO’s board of directors declared a regular quarterly dividend of $0.02 per share, which is payable on December 29, 2020 to class A and class B shareholders of record on December 15, 2020.

About GAMCO Investors, Inc.

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Table I: Assets Under Management and Fund Flows - 3rd Quarter 2020 (in millions)
														Fund
						Market								distributions,
		June 30,				appreciation/				Net cash				net of				September 30,
		2020				(depreciation)				flows				reinvestments				2020
Equities:
Mutual Funds		$	8,651			$	527			$	(313	)		$	(10	)		$	8,855
Closed-end Funds			6,859				423				(142	)			(123	)			7,017
Institutional & PWM (a)			10,455				632				(548	)			-				10,539
SICAV			451				27				(41	)			-				437
Total Equities			26,416				1,609				(1,044	)			(133	)			26,848
100% U.S. Treasury Fund			2,921				-				(99	)			-				2,822
Institutional & PWM Fixed Income			19				-				3				-				22
Total Treasuries & Fixed Income			2,940				-				(96	)			-				2,844
Total Assets Under Management		$	29,356			$	1,609			$	(1,140	)		$	(133	)		$	29,692
(a) Includes $252 and $196 of 100% U.S. Treasury Fund AUM at June 30, 2020 and September 30, 2020, respectively.

Table II
GAMCO INVESTORS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
		Three Months Ended								Nine Months Ended
		September 30								September 30
		2020				2019				2020				2019
Investment advisory and incentive fees		$	54,894			$	67,015			$	168,637			$	200,893
Distribution fees and other income			6,358				8,330				19,741				25,195
Total revenues			61,252				75,345				188,378				226,088
Compensation costs (a)			17,722				29,800				72,488				90,363
Management fee expense (a)			-				2,144				3,725				8,302
Distribution costs			6,994				8,271				21,258				25,546
Other operating expenses			4,694				5,562				14,982				16,936
Total expenses			29,410				45,777				112,453				141,147
Operating income			31,842				29,568				75,925				84,941
Investment income / (loss)			(3,092	)			(5,718	)			(12,361	)			(910	)
Interest expense			(691	)			(652	)			(1,985	)			(1,962	)
Shareholder-designated contribution			(5,436	)			(4,500	)			(5,436	)			(4,500	)
Non-operating income / (loss)			(9,219	)			(10,870	)			(19,782	)			(7,372	)
Income before income taxes			22,623				18,698				56,143				77,569
Provision for income taxes			6,188				5,072				17,173				20,034
Net income		$	16,435			$	13,626			$	38,970			$	57,535
Net income:
Basic		$	0.62			$	0.50			$	1.46			$	2.08
Diluted		$	0.62			$	0.50			$	1.46			$	2.08
Weighted average shares outstanding:
Basic			26,531				26,987				26,615				27,612
Diluted			26,613				27,093				26,679				27,676
Actual shares outstanding (b)			27,485				27,548				27,485				27,548
(a) The CEO waiver reduced compensation costs by $8,546, $3,678, $8,546, and $15,856, respectively
and management fee expense by $1,408, $602, $1,408, and $2,291, respectively.
(b) Includes 1,020 RSA shares at September 30, 2020 and 674 RSA shares at September 30, 2019.

Table III
GAMCO INVESTORS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except per share data)
		September 30,				December 31,				September 30,
		2020				2019				2019
ASSETS
Cash, cash equivalents, and U.S. Treasury Bills		$	125,242			$	86,136			$	86,179
Investments in securities			15,071				34,273				32,322
Receivable from brokers			5,688				989				4,574
Other receivables			23,232				41,557				28,896
Deferred tax asset and income tax receivable			10,608				16,389				17,305
Other assets			11,318				10,542				10,219
Total assets		$	191,159			$	189,886			$	179,495
LIABILITIES AND STOCKHOLDERS' EQUITY
Payable to brokers		$	-			$	-			$	3
Income taxes payable and deferred tax liabilities			360				757				2,314
Compensation payable			32,094				64,279				79,841
Accrued expenses and other liabilities			42,766				45,942				40,433
Sub-total			75,220				110,978				122,591
5.875% Senior Notes (due June 1, 2021)			24,209				24,191				24,186
Total liabilities			99,429				135,169				146,777
Stockholders' equity (a)			91,730				54,717				32,718
Total liabilities and stockholders' equity		$	191,159			$	189,886			$	179,495
(a) Shares outstanding of 27,485, 27,380, and 27,548, respectively.

Non-GAAP information and reconciliation:

The following table reconciles the U.S. GAAP basis amounts, as reported, to the non-GAAP measures:

		Three Months Ended
(Unaudited) (In thousands, except per share data)		September 30, 2019
Net income, U.S. GAAP basis		$	13,626
Impact of DCCAs on expenses and taxes (a):
Compensation costs			2,568
Management fee expense			1,030
Provision for income taxes			(864	)
Total impact of DCCAs on expenses and taxes			2,734
Net income, as adjusted		$	16,360
Per fully diluted share:
Net income, U.S. GAAP basis		$	0.50
Impact of DCCAs		$	0.10
Net income, as adjusted		$	0.60
(a) The non-GAAP adjustments relate to multiple DCCAs.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Our disclosure and analysis in this press release, which do not present historical information, contain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements convey our current expectations or forecasts of future events. You can identify these statements because they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning. They also appear in any discussion of future operating or financial performance. In particular, these include statements relating to future actions, future performance of our products, expenses, the outcome of any legal proceedings, and financial results. Although we believe that we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know about our business and operations, the economy, the effects of the Tax Cuts and Jobs Act, and other conditions, there can be no assurance that our actual results will not differ materially from what we expect or believe. Therefore, you should proceed with caution in relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance.

Forward-looking statements involve a number of known and unknown risks, uncertainties and other important factors, some of which are listed below, that are difficult to predict and could cause actual results and outcomes to differ materially from any future results or outcomes expressed or implied by such forward-looking statements. Some of the factors that may cause our actual results to differ from our expectations include risks associated with the duration and scope of the ongoing coronavirus pandemic resulting in volatile market conditions, a decline in the securities markets that adversely affect our assets under management, negative performance of our products, the failure to perform as required under our investment management agreements, a general downturn in the economy that negatively impacts our operations, and the ongoing impacts of the Tax Cuts and Jobs Act with respect to tax rates and the non-deductibility of certain portions of named executive officer compensation. We also direct your attention to the more specific discussions of these and other risks, uncertainties and other important factors contained in our Annual Report on Form 10-K and other public filings. Other factors that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We do not undertake to update publicly any forward-looking statements if we subsequently learn that we are unlikely to achieve our expectations whether as a result of new information, future developments or otherwise, except as may be required by law.