On August 7, 2024, Associated Capital Group Inc (AC, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. Associated Capital Group Inc is a diversified global financial services company that operates in alternative investment management, institutional research services, and cash and other assets through its subsidiaries.
Performance Overview
For the second quarter of 2024, Associated Capital Group Inc reported total revenues of $2.6 million, a slight increase from $2.4 million in the same period of 2023. The revenue growth was primarily driven by the GAMCO International SICAV – GAMCO Merger Arbitrage, which generated $1.3 million compared to $1.0 million in the prior year period. However, the company faced an operating loss before management fee of $3.2 million, compared to a loss of $2.9 million in the second quarter of 2023.
Financial Achievements
Despite the operating loss, Associated Capital Group Inc achieved a net investment and other non-operating income of $7.3 million, down from $8.6 million in the same quarter last year. This income was bolstered by mark-to-market increases from GAMCO holdings and higher interest income due to increased interest rates in 2024.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Revenues | $2.6 million | $2.4 million |
| Operating Loss Before Management Fee | ($3.2 million) | ($2.9 million) |
| Net Investment and Other Non-Operating Income | $7.3 million | $8.6 million |
| Net Income | $3.0 million | $3.4 million |
| Net Income Per Share - Diluted | $0.14 | $0.15 |
| Book Value Per Share | $42.87 | $41.41 |
Assets Under Management (AUM)
As of June 30, 2024, Associated Capital Group Inc reported assets under management (AUM) of $1.36 billion, a decrease from $1.59 billion at the end of 2023. This decline was primarily due to net outflows of $195 million, market depreciation of $19 million, and currency fluctuations impacting non-US dollar denominated classes of investment funds by $15 million.
Income Statement Highlights
For the second quarter of 2024, the company reported:
- Total revenues of $2.6 million
- Operating expenses, excluding management fee, of $5.8 million
- Net income of $3.0 million
- Net income per share of $0.14
Balance Sheet Highlights
As of June 30, 2024, the company reported:
- Total assets of $949.0 million
- Total liabilities of $27.8 million
- Total equity of $915.5 million
Cash Flow Statement Highlights
For the six months ended June 30, 2024, the company reported:
- Operating loss before management fee of $6.2 million
- Net investment and other non-operating income of $29.9 million
- Net income of $16.8 million
Commentary
The effective tax rate applied to our pre-tax income for the quarter ended June 30, 2024 was 19.1%. In the year ago quarter, the effective tax rate was 35.8%, reflecting a deferred tax expense from a foreign investment."
Analysis
Associated Capital Group Inc's performance in the second quarter of 2024 reflects a mixed bag of achievements and challenges. While the company managed to increase its revenues slightly and maintain a strong net investment income, the operating losses and decline in AUM pose significant challenges. The decrease in AUM, driven by net outflows and market depreciation, could impact future revenue generation and profitability. However, the company's strong balance sheet and continued investment income provide a cushion against these challenges.
For more detailed insights and analysis, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from Associated Capital Group Inc for further details.
