Complete Press Release as PDF
Reports require Adobe Acrobat Reader. If you do not have it, get it now.

Fourth Quarter and Full Year

Net income was $15.4 million, or $0.51 per diluted share for the fourth quarter ended December 31, 2001, matching last year's record fourth quarter earnings per share and exceeding the prior period net income of $15.3 million. Operating income in the period increased by 9% to $27.7 million versus $25.4 million last year. Total revenues in the quarter were $52.9 million versus $59.9 million in 2000. Income from investments during the quarter was approximately $0.6 million compared to $3.8 million in last year's fourth quarter. There were 32.2 million shares outstanding on December 31, 2001 compared to 30.0 million at the prior year end.

For the full year, Gabelli Asset Management reported record earnings of $61.1 million, or $2.03 per diluted share, an increase of 5% over last year's earnings per share of $1.94 on net income of $58.0 million. Operating income in the year increased by 4.6% to $104.8 million versus $100.2 million last year. Total revenues in 2001 were $224.4 million versus $233.9 million in 2000. Income from investments during the year was $8.5 million, compared to $12.7 million last year. Average shares outstanding for the full year ended December 31, 2001 were 30.8 million versus 29.9 million for the year 2000.

Financial Highlights

A key aspect to the Company's performance during the fourth quarter 2001 was our ability to recover from the decline in assets which occurred after September 11. Assets under management rose 11% to $24.8 billion at December 31, 2001 from the September 30 level of $22.3 billion and were 5% higher than the $23.5 billion under management at December 31, 2000. The fourth quarter recovery was driven by the performance of our equity products, which attracted $284 million of net cash inflows and increased more than $2.2 billion from market appreciation.

Average total assets under management were $23.8 billion during the fourth quarter of 2001 versus $23.5 billion during the fourth quarter of 2000. For the full year 2001, average total assets under management were $24.2 billion, 4.8% higher than average total assets of $23.1 billion in 2000.

Despite a hostile equity market environment marked by high volatility following the tragic events of September 11, net cash flows into our equity products totaled a record $2.6 billion for 2001. Total net cash inflows including fixed income products were $2.7 billion for the year.

The increase in average total assets under management during the fourth quarter of 2001 versus the prior year's quarter did not translate into higher comparable revenues since the increase in average assets in our institutional and high net worth Separate Accounts and Alternative Investment products were offset by a 13.6% decline in our open-end equity mutual fund accounts and lower performance fees from our hedge fund products. Since revenues from our Separate Accounts business are billed on assets at the beginning of the quarter, fourth quarter billings reflect the lower levels of assets under management at September 30, 2001, even though assets increased more than 13% during the quarter.

Operating income in the fourth quarter of 2001 was $27.7 million, 9% higher than the 2000 quarter as operating expenses declined 26.8% in the 2001 quarter versus the year earlier period. Included in the fourth quarter was a decrease of $2.9 million in incentive compensation. These costs, which were estimated and accrued during the year, were lowered in the fourth quarter to actual amounts awarded for the year, resulting in a $0.05 addition to fourth quarter diluted earnings per share. For the full year, operating margins were 46.7% versus 42.8% in 2000. The improvement in operating margins reflects the Company's ongoing efforts to maximize efficiencies in its cost structure and improve productivity.

We continue to build a strong and liquid balance sheet. Cash and Investments were approximately $427 million at December 31, 2001 versus $260 million at December 31, 2000. Stockholders' equity was $272 million at December 31, 2001 versus $202 million at the prior year-end.

During the quarter the Company repurchased 50,000 shares of its common stock, at a discount from market price, from Gabelli Group Capital Partners, Inc. at an average cost of $35.20 per share.

FORWARD LOOKING INFORMATION

This release may contain forward-looking statements about future operations, results and performance, which involve risks and uncertainties that may cause the actual operations, results or performance to differ materially from those expressed in or implied by the forward-looking statements. These risks and uncertainties include the performance of the securities markets and the Company's investment products, future economic conditions, changes in business strategy and other factors. Consequently, no assurance can be given as to future operations, results or performance, and neither the Company nor any other person assumes liability for the accuracy and completeness of the forward-looking statements in this press release.