Janus Capital Group Inc. Announces Fourth Quarter 2012 Results
Janus Capital Group Inc. Announces Fourth Quarter 2012 Results
DENVER--(BUSINESS WIRE)-- Janus Capital Group Inc. ("JCG") (NYS: JNS) today reported fourth quarter net income of $31.2 million, or $0.17 per diluted share, compared with third quarter 2012 net income of $25.1 million, or $0.14 per diluted share, and net income of $35.7 million, or $0.19 per diluted share, in the fourth quarter 2011.
Fourth quarter 2012 net income included an intangible asset impairment charge of $0.02 per share related to the redemption of a sub-advised account. Third quarter 2012 net income included an intangible asset impairment charge of $0.01 per share also related to the redemption of a sub-advised account.
For the full-year 2012, net income totaled $102.3 million, or $0.55 per diluted share, compared with net income of $142.9 million, or $0.78 per diluted share, for 2011.
Flows and Assets Under Management
Average assets under management during the fourth quarter 2012 were $155.6 billion compared with $155.5 billion during the third quarter 2012 and $149.2 billion during the fourth quarter 2011.
At December 31, 2012, JCG's total assets under management were $156.8 billion compared with $158.2 billion at September 30, 2012 and $148.2 billion at December 31, 2011.
The decrease in complex-wide assets during the fourth quarter 2012 primarily reflects long-term net outflows of $3.6 billion offset by net market appreciation of $2.1 billion. Fundamental equity and mathematical equity long-term net outflows totaled $2.7 billion and $1.6 billion, respectively, while fixed income long-term net inflows totaled $0.7 billion. The increase in year-over-year assets under management was the result of $20.6 billion of net market appreciation offset by $12.0 billion of long-term net outflows.
Investment Performance
As of December 31, 2012, 50% of complex-wide mutual funds had a 4- or 5-star Overall Morningstar RatingTM.1
As of December 31, 2012, 68%, 20% and 48% of fundamental equity mutual fund assets ranked in the top half of their Morningstar categories on a one-, three- and five-year total return basis, respectively.2
Fixed income mutual funds continue to generate strong long-term relative investment performance with 54%, 75% and 100% of mutual fund assets ranked in the top half of their Morningstar categories on a one-, three- and five-year total return basis as of December 31, 2012.3
Mathematical equity relative investment performance has continued to be strong, with 63%, 87% and 67% of strategies surpassing their respective benchmarks, net of fees, over the one-, three- and five-year periods, respectively, as of December 31, 2012.4
Financial Discussion
Financial Highlights | ||||||||||||||||
(dollars in millions, except per share data or as noted) | ||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
December 31, | September 30, | December 31, | December 31, | |||||||||||||
2012 | 2012 | 2012 | 2011 | |||||||||||||
Average Assets (in billions) | $ | 155.6 | $ | 155.5 | $ | 156.3 | $ | 162.3 | ||||||||
Ending AUM (in billions) | $ | 156.8 | $ | 158.2 | $ | 156.8 | $ | 148.2 | ||||||||
Revenues | $ | 216.6 | $ | 209.0 | $ | 850.0 | $ | 981.9 | ||||||||
Operating Expenses | $ | 158.6 | $ | 161.1 | $ | 635.5 | $ | 670.1 | ||||||||
Operating Income | $ | 58.0 | $ | 47.9 | $ | 214.5 | $ | 311.8 | ||||||||
Operating Margin | 26.8 | % | 22.9 | % | 25.2 | % | 31.8 | % | ||||||||
Net Income Attributable to JCG | $ | 31.2 | $ | 25.1 | $ | 102.3 | $ | 142.9 | ||||||||
Diluted Earnings per Share | $ | 0.17 | $ | 0.14 | $ | 0.55 | $ | 0.78 | ||||||||
Fourth quarter 2012 revenues of $216.6 million increased from third quarter 2012, primarily due to higher private account performance fees. Fourth quarter 2012 operating expenses of $158.6 million decreased $2.5 million, or 1.6%, from third quarter 2012, primarily due to lower compensation expenses partially offset by an intangible asset impairment of $5.0 million and an increase in discretionary expenses.
Capital and Liquidity
At December 31, 2012, JCG had stockholders' equity of $1.4 billion, cash and investments of $725.6 million and outstanding debt of $545.1 million.
Cash flows from operations during the fourth quarter 2012 were $67.4 million compared with $75.3 million during the third quarter 2012 and $74.3 million during the fourth quarter 2011.
As part of its capital and liquidity management, JCG repurchased 293,100 shares of its common stock at an average price of $8.84 per share and a total cost of $2.6 million during the fourth quarter 2012.
On December 10, 2012, JCG's Board of Directors declared a regular quarterly cash dividend of $0.06 per share. The quarterly dividend was paid on December 31, 2012, to stockholders of record at the close of business on December 21, 2012. This accelerated quarterly cash dividend was intended to replace the quarterly cash dividend which would have been declared in January 2013.
Fourth Quarter 2012 Earnings Call Information
JCG will discuss its results during a conference call on Thursday, January 24, 2013, at 10 a.m. Eastern Standard Time. The call-in number will be (888) 397-5338. Anyone outside the U.S. or Canada should call (719) 325-2145. The slides used during the presentation will be available in the investor relations section of the Janus Capital Group website (http://ir.janus.com) approximately one hour prior to the call. For those unable to join the conference call at the scheduled time, an audio replay will be available on www.janus.com/ir.
About Janus Capital Group Inc.
Janus Capital Group Inc. ("JCG") is a global investment firm offering strategies from three individual investment boutiques: Janus Capital Management LLC ("Janus"), INTECH Investment Management LLC ("INTECH") and Perkins Investment Management LLC ("Perkins"). Each manager employs a research-intensive approach that is distinct within its respective asset class. This multi-boutique approach enables the firm to provide style-specific expertise across an array of strategies, including growth, value and mathematical equities, fixed income and alternatives through one common distribution platform.
At the end of December 2012, JCG managed $156.8 billion in assets for shareholders, clients and institutions around the globe. Based in Denver, JCG also has offices in Frankfurt, Amsterdam, Paris, London, Milan, Munich, Zurich, Singapore, Hong Kong, Tokyo, Melbourne, Dubai and Taipei.
1 For the period ending December 31, 2012, 40%, 43% and 55% of complex-wide mutual funds had a 4- or 5-star Morningstar rating for the 3-, 5- and 10-year periods based on risk-adjusted returns for 42, 40 and 29 funds, respectively. 42 funds were included in the analysis for the Overall period. |
2 References Morningstar relative performance on an asset-weighted basis. For the 10-year period ending December 31, 2012, 80% of the fundamental equity mutual fund assets outperformed the majority of their Morningstar peers based on total returns. For the 1-, 3-, 5- and 10-year periods ending December 31, 2012, 66%, 38%, 59% and 76% of the 41, 34, 32 and 25 fundamental equity mutual funds outperformed the majority of their Morningstar peers based on total returns. |
3 References Morningstar relative performance on an asset-weighted basis. For the 10-year period ending December 31, 2012, 80% of the fixed income mutual fund assets outperformed the majority of their Morningstar peers based on total returns. For the 1-, 3-, 5- and 10-year periods ending December 31, 2012, 50%, 75%, 100% and 75% of the 6, 4, 4 and 4 fixed income mutual funds outperformed the majority of their Morningstar peers based on total returns. |
4 For the period ending December 31, 2012, 0%, 75%, 50% and 33% of the mathematical equity mutual funds were beating their benchmarks on a 1-, 3-, 5-year and since-fund inception basis. Funds included in the analysis and their inception dates are: INTECH U.S. Growth Fund - Class S (1/03); INTECH U.S. Core Fund - Class T (2/03); INTECH U.S. Value Fund - Class I (12/05); INTECH International Fund - Class I (5/07); INTECH Global Dividend Fund - Class I (12/11) and Janus INTECH U.S. Low Volatility Portfolio - Service Shares (9/12). |
JANUS CAPITAL GROUP INC. | ||||||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||
(dollars in millions, except per share data) | ||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
2012 | 2012 | 2011 | 2012 | 2011 | ||||||||||||||||
Revenues: | ||||||||||||||||||||
Investment management fees | $ | 193.8 | $ | 194.1 | $ | 190.9 | $ | 782.3 | $ | 844.3 | ||||||||||
Performance fees | (13.6 | ) | (20.9 | ) | (9.2 | ) | (75.4 | ) | (11.7 | ) | ||||||||||
Shareowner servicing fees and other | 36.4 | 35.8 | 33.9 | 143.1 | 149.3 | |||||||||||||||
Total | 216.6 | 209.0 | 215.6 | 850.0 | 981.9 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Employee compensation and benefits | 65.1 | 70.8 | 62.1 | 274.5 | 294.9 | |||||||||||||||
Long-term incentive compensation | 15.7 | 16.2 | 10.7 | 66.7 | 63.0 | |||||||||||||||
Marketing and advertising | 7.3 | 5.4 | 7.5 | 23.6 | 28.0 | |||||||||||||||
Distribution | 30.8 | 32.3 | 30.5 | 126.8 | 141.7 | |||||||||||||||
Depreciation and amortization | 12.5 | 9.9 | 7.8 | 38.5 | 33.3 | |||||||||||||||
General, administrative and occupancy | 27.2 | 26.5 | 26.4 | 105.4 | 109.2 | |||||||||||||||
Total | 158.6 | 161.1 | 145.0 | 635.5 | 670.1 | |||||||||||||||
Operating income | 58.0 | 47.9 | 70.6 | 214.5 | 311.8 | |||||||||||||||
Interest expense | (11.1 | ) | (11.1 | ) | (11.7 | ) | (45.0 | ) | (51.0 | ) | ||||||||||
Investment gains (losses), net | 4.2 | 7.6 | 1.2 | 11.1 | (21.9 | ) | ||||||||||||||
Other income, net | 1.0 | 0.3 | 2.0 | 3.2 | 3.8 | |||||||||||||||
Loss on early extinguishment of debt | - | - | - | (7.2 | ) | (9.9 | ) | |||||||||||||
Income tax provision | (19.3 | ) | (17.0 | ) | (22.4 | ) | (64.7 | ) | (79.4 | ) | ||||||||||
Net income | 32.8 | 27.7 | 39.7 | 111.9 | 153.4 | |||||||||||||||
Noncontrolling interests | (1.6 | ) | (2.6 | ) | (4.0 | ) | (9.6 | ) | (10.5 | ) | ||||||||||
Net income attributable to JCG | $ | 31.2 | $ | 25.1 | $ | 35.7 | $ | 102.3 | $ | 142.9 | ||||||||||
Diluted weighted-average shares outstanding (in millions) | 185.7 | 185.3 | 184.0 | 185.1 | 184.2 | |||||||||||||||
Diluted earnings per share attributable to JCG common shareholders | $ | 0.17 | $ | 0.14 | $ | 0.19 | $ | 0.55 | $ | 0.78 | ||||||||||
Average assets under management (in billions) | $ | 155.6 | $ | 155.5 | $ | 149.2 | $ | 156.3 | $ | 162.3 | ||||||||||
JANUS CAPITAL GROUP INC. | ||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(dollars in millions) | ||||||
December 31, | December 31, | |||||
2012 | 2011 | |||||
Assets | ||||||
Cash and cash equivalents | $ | 387.0 | $ | 360.0 | ||
Investment securities | 338.6 | 312.0 | ||||
Other assets | 171.0 | 185.1 | ||||
Property and equipment, net | 33.3 | 36.9 | ||||
Intangibles and goodwill, net | 1,730.5 | 1,750.0 | ||||
Total Assets | $ | 2,660.4 | $ | 2,644.0 | ||
Liabilities and Stockholders' Equity | ||||||
Debt | $ | 545.1 | $ | 595.2 | ||
Other liabilities | 244.2 | 278.0 | ||||
Deferred income taxes | 436.0 | 421.7 | ||||
Stockholders' equity | 1,435.1 | 1,349.1 | ||||
Total Liabilities and Stockholders' Equity | $ | 2,660.4 | $ | 2,644.0 | ||
UNAUDITED CONDENSED CONSOLIDATED | ||||||||||||||||||||
CASH FLOW INFORMATION | ||||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
2012 | 2012 | 2011 | 2012 | 2011 | ||||||||||||||||
Cash provided by (used in) | ||||||||||||||||||||
Operating activities | $ | 67.4 | $ | 75.3 | $ | 74.3 | $ | 208.9 | $ | 224.6 | ||||||||||
Investing activities | (6.9 | ) | (13.9 | ) | (33.1 | ) | (38.2 | ) | 21.7 | |||||||||||
Financing a | ||||||||||||||||||||
