FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): October 24, 2001
AFFILIATED MANAGERS GROUP, INC.
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(Exact name of Registrant as specified in charter)
Delaware 0001-13459 043218510
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(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification no.)
Two International Place, 23rd Floor, Boston, MA 02110
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(Address of principal executive offices) (Zip code)
(617) 747-3300
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(Registrant's telephone number, including area code)
Item 5. Other Events
Registrant is filing this Form 8-K in order to file a current earnings press
release. By this filing, Registrant is not establishing the practice of filing
all earnings press releases in the future and may discontinue such filings at
any time.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 99.1 -- Press Release, dated October 24, 2001 (filed for informational
purposes).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AFFILIATED MANAGERS GROUP, INC.
Date: November 14, 2001 /s/ Darrell W. Crate
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DARRELL W. CRATE
Executive Vice President,
Chief Financial Officer and Treasurer
(and also as Principal Financial and
Accounting Officer)
Exhibits
Exhibit 99.1 -- Press Release, dated October 24, 2001 (filed for informational
purposes).
Exhibit 99.1
[AMG LETTERHEAD]
Contact: Darrell W. Crate
Affiliated Managers Group, Inc.
(617) 747-3300
AMG REPORTS FINANCIAL AND OPERATING RESULTS
FOR THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2001
COMPANY REPORTS CASH EPS OF $0.91
NET CLIENT CASH FLOWS FROM DIRECTLY MANAGED ASSETS WERE $703 MILLION
BOSTON, MA, OCTOBER 24, 2001 - Affiliated Managers Group, Inc. (NYSE: AMG) today
reported its financial and operating results for the quarter and nine months
ended September 30, 2001.
Cash earnings per share ("Cash EPS") for the third quarter of 2001 were $0.91
compared to Cash EPS of $0.99 for the third quarter of 2000. (Cash EPS is the
Company's reported EPS figure plus the non-cash charges on a per share basis for
depreciation and amortization of intangible assets which arise from the use of
the purchase method of accounting. The Company considers Cash EPS to be the most
meaningful measure of its financial performance.) Diluted earnings per share for
the third quarter of 2001 were $0.54, compared to $0.64 for the third quarter of
2000. Cash Net Income (net income plus the non-cash charges for depreciation and
amortization of intangible assets) was $20.7 million, compared to $22.4 million
for the third quarter of 2000, while EBITDA was $31.9 million, compared to $36.4
million for the same period of 2000. Revenues for the third quarter of 2001 were
$96.6 million, compared to $118.2 million for the third quarter of 2000. Net
income for the third quarter of 2001 was $12.4 million, compared to $14.4
million for the same period of 2000.
For the nine months ended September 30, 2001, Cash Net Income was $62.4 million,
or $2.75 on a per share basis, while EBITDA was $96.8 million. For the same
period, net income was $37.4 million, or $1.65 on a per share basis, on revenues
of $297.7 million. For the nine months ended September 30, 2000, Cash Net Income
was $64.9 million, or $2.85 on a per share basis, while EBITDA was $106.0
million. For the same period, net income was $41.9 million, or $1.84 on a per
share basis, on revenues of $343.9 million.
The aggregate assets under management of AMG's affiliated investment management
firms at September 30, 2001 were $65.2 billion. Aggregate net client cash flows
were $731 million, including $703 million in directly managed assets. These
aggregate net client cash flows for the quarter resulted in a net increase of
approximately $2.5 million to AMG's annualized EBITDA.
"Notwithstanding the challenges of a volatile equity market environment, our
Affiliates posted solid financial results, driven by continued growth in net
client cash flows and strong relative investment performance," said William J.
Nutt, Chairman and Chief Executive Officer. "With over $700 million in net flows
for the quarter, our net client cash flows from directly managed assets
(MORE)
year-to-date total $2.7 billion, which has resulted in an aggregate $9.1 million
increase in our annualized EBITDA. In addition, our Affiliates generally
produced solid investment performance relative to their competitors and
benchmarks. In particular, value managers such as Tweedy, Browne, Rorer and
Systematic had continued growth in net flows and strong relative performance
both for the quarter and the year-to-date."
Sean M. Healey, President and Chief Operating Officer, stated, "The quarter was
highlighted by continued success in our new investment program, with the
announcements of our agreements to invest in two new Affiliates, Welch & Forbes
and Friess Associates. Welch & Forbes is a leading Boston-based manager for high
net worth individuals and families, and Friess Associates is a highly regarded
growth equity manager best known as the advisor to the Brandywine family of
funds. Each firm is an excellent addition to the AMG group of Affiliates, and
together, they add to the diversity of our sources of EBITDA by strengthening
our presence in the mutual fund and high net worth channels." Mr. Healey added,
"Finally, we are continuing to pursue additional investments in new Affiliates,
and we are pleased with our progress in building relationships with many of the
highest quality mid-sized investment management firms."
AMG is an asset management company that addresses the succession and transition
issues facing the principals of growing mid-sized investment management firms.
AMG's strategy is to generate growth through the internal growth of its existing
Affiliates, as well as through investments in new Affiliates. AMG's innovative
transaction structure allows individual members of each Affiliate's management
team to retain or receive significant direct ownership in their firm while
maintaining operating autonomy. In addition, AMG provides centralized assistance
to its Affiliates in strategic matters, marketing, distribution, product
development and operations.
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CERTAIN MATTERS DISCUSSED IN THIS PRESS RELEASE MAY CONSTITUTE FORWARD-LOOKING
STATEMENTS WITHIN THE MEANING OF THE FEDERAL SECURITIES LAWS. ACTUAL RESULTS AND
THE TIMING OF CERTAIN EVENTS COULD DIFFER MATERIALLY FROM THOSE PROJECTED IN OR
CONTEMPLATED BY THE FORWARD-LOOKING STATEMENTS DUE TO A NUMBER OF FACTORS,
INCLUDING CHANGES IN THE SECURITIES OR FINANCIAL MARKETS OR IN GENERAL ECONOMIC
CONDITIONS, THE AVAILABILITY OF EQUITY AND DEBT FINANCING, COMPETITION FOR
ACQUISITIONS OF INTERESTS IN INVESTMENT MANAGEMENT FIRMS, THE ABILITY TO
COMPLETE PENDING ACQUISITIONS, THE INVESTMENT PERFORMANCE OF OUR AFFILIATES AND
THEIR ABILITY TO EFFECTIVELY MARKET THEIR INVESTMENT STRATEGIES, AND OTHER RISKS
DETAILED FROM TIME TO TIME IN AMG'S FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION. REFERENCE IS HEREBY MADE TO THE "CAUTIONARY STATEMENTS" SET FORTH IN
THE COMPANY'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2000.
FINANCIAL TABLES FOLLOW
A TELECONFERENCE WILL BE HELD WITH AMG'S MANAGEMENT AT 11:00 A.M. EASTERN TIME
TODAY. PARTIES INTERESTED IN LISTENING TO THE TELECONFERENCE SHOULD DIAL
1-888-792-1093 (DOMESTIC CALLS) OR 1-703-871-3597 (INTERNATIONAL CALLS) STARTING
AT 10:45 A.M. EASTERN TIME. THOSE WISHING TO LISTEN TO THE TELECONFERENCE SHOULD
DIAL THE APPROPRIATE NUMBER AT LEAST TEN MINUTES BEFORE THE CALL BEGINS. THE
TELECONFERENCE WILL BE AVAILABLE FOR REPLAY FROM APPROXIMATELY ONE HOUR AFTER
THE CONCLUSION OF THE CALL UNTIL 5:00 P.M. EASTERN TIME ON WEDNESDAY, OCTOBER
31, 2001. TO ACCESS THE REPLAY, PLEASE DIAL 1-888-266-2086 (DOMESTIC CALLS) OR
1-703-925-2435 (INTERNATIONAL CALLS), PASS CODE 5551605. THE LIVE CALL AND THE
REPLAY (THROUGH OCTOBER 31, 2001) CAN ALSO BE ACCESSED VIA THE WEB AT
WWW.AMG.COM.
# # #
For more information on Affiliated Managers Group, Inc.,
please visit AMG's Web site at www.amg.com.
AFFILIATED MANAGERS GROUP, INC.
FINANCIAL HIGHLIGHTS
(dollars in thousands, except per share data)
Three Months Three Months
Ended Ended
9/30/00 9/30/01
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Revenues $ 118,205 $ 96,584
EBITDA (A) $ 36,449 $ 31,937
Net Income $ 14,378 $ 12,352
Cash Net Income (B) $ 22,376 $ 20,734
Average shares outstanding - diluted 22,642,345 22,841,832
Earnings per share - diluted $ 0.64 $ 0.54
Cash earnings per share - diluted (C) $ 0.99 $ 0.91
December 31, September 30,
2000 2001
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Cash and cash equivalents $ 31,612 $ 205,064
Total debt $ 151,800 $ 278,403
Stockholders' equity $ 493,910 $ 534,343
AFFILIATED MANAGERS GROUP, INC.
FINANCIAL HIGHLIGHTS
(dollars in thousands, except per share data)
Nine Months Nine Months
Ended Ended
9/30/00 9/30/01
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Revenues $ 343,898 $ 297,722
EBITDA (A) $ 106,023 $ 96,805
Net Income $ 41,870 $ 37,389
Cash Net Income (B) $ 64,858 $ 62,399
Average shares outstanding - diluted 22,763,049 22,683,862
Earnings per share - diluted $ 1.84 $ 1.65
Cash earnings per share - diluted (C) $ 2.85 $ 2.75
AFFILIATED MANAGERS GROUP, INC.
FINANCIAL HIGHLIGHTS
(dollars in thousands, except per share data)
Three Months Nine Months
Ended Ended
9/30/01 9/30/01
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Assets under management (at period end, in millions): $ 65,244 $ 65,244
Revenues: $ 96,584 $ 297,722
Owners' Allocation (D): $ 48,593 $ 149,217
EBITDA Contribution (E): $ 36,437 $ 110,308
RECONCILIATION OF EBITDA CONTRIBUTION TO EBITDA:
Total EBITDA Contribution (as above) $ 36,437 $ 110,308
Less, holding company expenses (4,500) (13,503)
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EBITDA $ 31,937 $ 96,805
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Notes:
(A) EBITDA represents earnings before interest expense, income taxes,
depreciation and amortization.
(B) Cash Net Income represents net income plus depreciation and amortization.
(C) Cash earnings per share represents Cash Net Income divided by average
shares outstanding.
(D) Owners' Allocation represents the portion of an Affiliate's revenues
which is allocated to the owners of that Affiliate, including AMG,
generally in proportion to their ownership interest, pursuant to the
revenue sharing agreement with such Affiliate.
(E) EBITDA Contribution represents the portion of an Affiliate's revenues
that is allocated to AMG after amounts retained by the Affiliate for
compensation and day-to-day operating and overhead expenses, but before
the interest, income taxes, depreciation and amortization expenses of
the Affiliate.
AFFILIATED MANAGERS GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
Quarter Ended September 30, Year to Date September 30,
2000 2001 2000 2001
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Revenues $ 118,205 $ 96,584 $ 343,898 $ 297,722
Operating expenses:
Compensation and related expenses 48,485 31,463 133,054 98,369
Amortization of intangible assets 6,828 7,006 19,881 20,848
Depreciation and other amortization 1,170 1,376 3,107 4,162
Selling, general and administrative 15,002 18,487 50,389 55,601
Other operating expenses 2,879 2,578 7,711 7,866
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74,364 60,910 214,142 186,846
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Operating income 43,841 35,674 129,756 110,876
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Non-operating (income) and expenses:
Investment and other income (1,174) (1,952) (3,394) (3,946)
Interest expense 4,082 2,970 12,071 9,482
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2,908 1,018 8,677 5,536
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Income before minority interest and taxes 40,933 34,656 121,079 105,340
Minority interest (16,564) (14,071) (50,115) (43,027)
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Income before income taxes 24,369 20,585 70,964 62,313
Income taxes 9,991 8,233 29,094 24,924
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Net income $ 14,378 $ 12,352 $ 41,870 $ 37,389
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Average shares outstanding - basic 22,142,194 22,180,058 22,349,998 22,117,858
Average shares outstanding - diluted 22,642,345 22,841,832 22,763,049 22,683,862
Earnings per share - basic $ 0.65 $ 0.56 $ 1.87 $ 1.69
Earnings per share - diluted $ 0.64 $ 0.54 $ 1.84 $ 1.65
AFFILIATED MANAGERS GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, September 30,
2000 2001
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ASSETS
Current assets:
Cash and cash equivalents $ 31,612 $ 205,064
Investment advisory fees receivable 66,126 44,043
Other current assets 15,448 10,081
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Total current assets 113,186 259,188
Fixed assets, net 15,346 14,357
Equity investment in Affiliate 1,816 1,616
Acquired client relationships, net 199,354 194,996
Goodwill, net 444,116 453,759
Other assets 19,912 24,649
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Total assets $ 793,730 $ 948,565
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 86,800 $ 67,196
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Total current liabilities 86,800 67,196
Long-term debt 151,000 277,603
Deferred taxes 31,907 35,551
Other long-term liabilities 2,636 12,332
Subordinated debt 800 800
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Total liabilities 273,143 393,482
Minority interest 26,677 20,740
Stockholders' equity:
Common stock 235 235
Additional paid-in capital 407,057 409,588
Accumulated other comprehensive income (342) (1,485)
Retained earnings 140,513 177,902
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547,463 586,240
Less treasury shares (53,553) (51,897)
Total stockholders' equity 493,910 534,343
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Total liabilities and stockholders' equity $ 793,730 $ 948,565
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