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Teton Advisors, Inc. Reports Full Year and Fourth Quarter Results
[April 02, 2024]

Teton Advisors, Inc. Reports Full Year and Fourth Quarter Results


Teton Advisors, Inc. ("Teton" or the "Company") (OTCQX: TETAA) announced its fourth quarter and full year 2023 results including cash and marketable securities. The Company's Q4-2023 and full year highlights are as follows:

  • Full year fully diluted GAAP EPS of $0.75 compared to $1.18 a year ago. Fourth quarter fully diluted GAAP EPS of $0.19 compared to $0.27 a year ago.
  • Full year fully diluted Cash EPS1 of $0.98 compared to $1.62 a year ago. Fourth quarter fully diluted Cash EPS1 of $0.26 compared to $0.49 a year ago.
  • Full year Revenues of $12.0 million, down 13% year-over-year. Fourth quarter Revenues of $2.9 million, down 11% quarter-over-quarter.
  • Full year Average AUM of $1.4 billion, down 17% year-over-year.
  • Net cash, cash equivalents and marketable securities totaled $23.5 million or $14.30 per share as of December 31, 2023, an increase of 8.7% compared to a net of $21.6 million or $13.16 per share at the prior year end.

"Our bottom-up, fundamental, research driven, active management investment strategies, with a focus on small and mid-cap companies, stand to benefit from the rotation by investors back to value and inefficiently priced equities," said Nicholas Galluccio, Chairman of Teton Advisors, LLC, and portfolio manager of the four-star Morningstar rated Teton Westwood SmallCap Equity Fund.

"Teton's very capable platform, with an extensive amount of distribution agreements in place, serving retail, institutional, and high net worth clients, positions us well to attract new investment teams and client accounts and to grow both organically and through acquisitions," said Stephen Bondi, Chief Executive Officer. He further stated, "Our multiple investment teams and product diversification provides a strong foundation for future growth."

Fourth quarter net income and fully diluted earnings per share were $0.3 million and $0.19, respectively, compared to net income of $0.4 million and $0.27, respectively, for the same period a year ago. Excluding certain non-cash items, Cash Earnings1 and Cash Earnings per fully diluted share were $0.4 million and $0.26, respectively, for the current quarter as compared to $0.8 million and $0.49, respectively, for the comparative quarter in 2022.

Fourth quarter Revenues were $2.9 million for the quarter versus $3.2 million for the comparative quarter in 2022. Average AUM for the quarter was $1.3 billion versus $1.5 billion for the fourth quarter in 2022.





Financial Highlights
($'s in 000's except AUM and per share data)

Fourth Quarter

 

Full Year

2023

 

2022

 

2023

 

2022

AUM - average (in millions)

$

1,277

$

1,541

$

1,408

$

1,691

AUM - end of period (in millions)

$

1,346

$

1,498

$

1,346

$

1,498

 
Revenues

$

2,850

$

3,190

$

12,043

$

13,778

 
Income before interest, taxes, depreciation &
amortization, and impairment

 

631

 

1,191

 

1,850

 

2,901

 
Impairment of intangible asset

 

59

 

400

 

59

 

400

 
Net income

 

300

 

426

 

1,205

 

1,601

 
Net income per fully diluted share

$

0.19

$

0.27

$

0.75

$

1.18


1Cash earnings and cash earnings per fully diluted share are non-GAAP performance measures and are explained and reconciled in the Supplemental Financial Information section starting on page 6 of this press release. The quarterly and full year results include the non-cash amortization expense of our intangible assets. In addition, the Company recognized a non-cash impairment charge of $59,000 and $400,000 related to its intangible assets for the fourth quarter of 2023 and 2022, respectively.

Notice of Teton's Annual General Meeting

The Company cordially invites you to participate in its 2024 Annual Meeting of Shareholders (the "Annual Meeting") to be held on Wednesday, May 22, 2024 at 9:00 A.M., Eastern Time as announced. Immediately following the Annual Meeting, a company review for shareholders will commence to discuss operations.

For access to the webcast of each meeting, you must register at https://www.tetonadv.com/register. After registering, you will receive a confirmation email containing information about joining the meeting from a computer or telephone. Any questions can be directed to our Secretary at [email protected] or (914) 457-1077.

Table I

Teton Advisors, Inc.

Unaudited Condensed Consolidated Statements of Income

 

For the Three Months Ended December 31,

2023

 

2022

Revenues
Investment advisory fees - mutual funds, net

$

1,906,268

$

2,353,846

Investment advisory fees - separate accounts

 

587,911

 

650,154

Distribution fees and other income, net

 

356,031

 

186,334

Total revenues

 

2,850,210

 

3,190,334

Operating expenses
Compensation

 

1,075,301

 

558,462

Sub-advisory fees

 

323,745

 

460,791

Distribution costs

 

319,784

 

392,071

Marketing and administrative fees

 

40,913

 

50,140

Advanced commissions

 

3,305

 

2,925

Other operating expenses

 

456,189

 

535,404

Total operating expenses

 

2,219,237

 

1,999,793

 
Income before interest, taxes, depreciation, amortization and impairment

 

630,973

 

1,190,541

 
Depreciation and amortization

 

84,182

 

84,160

Impairment of intangible asset

 

59,000

 

400,000

Income before income taxes

 

487,791

 

706,381

 
Income tax provision

 

187,896

 

280,819

Net income

$

299,895

$

425,562

 
Net income per share:
Basic

$

0.19

$

0.27

Fully diluted

$

0.19

$

0.27

 
Weighted average shares outstanding:
Basic

 

1,599,440

 

1,600,899

Fully diluted

 

1,616,609

 

1,603,082

Table II

Teton Advisors, Inc.

Condensed Consolidated Statements of Income

 

For the Years Ended December 31,

2023

 

2022

Revenues
Investment advisory fees - mutual funds, net

$

10,923,634

$

10,596,589

Investment advisory fees - separate accounts

 

18,598

 

2,912,715

Distribution fees and other income, net

 

1,102,504

 

268,329

Total revenues

 

12,044,736

 

13,777,633

Operating expenses
Compensation

 

5,102,161

 

5,030,627

Sub-advisory fees

 

179,543

 

2,131,362

Distribution costs

 

1,369,024

 

1,629,606

Marketing and administrative fees

 

18,379

 

169,288

Advanced commissions

 

1,505,402

 

20,884

Other operating expenses

 

2,020,302

 

1,894,477

Total operating expenses

 

10,194,811

 

10,876,244

 
Income before interest, taxes, depreciation, amortization and impairment

 

1,849,925

 

2,901,389

 
Depreciation and amortization

 

336,727

 

336,957

Impairment of intangible asset

 

59,000

 

400,000

Income before income taxes

 

1,454,198

 

2,164,432

 
Income tax provision

 

249,080

 

563,493

Net income

$

1,205,118

$

1,600,939

 
Net income per share:
Basic

$

0.75

$

1.18

Fully diluted

$

0.75

$

1.18

 
Weighted average shares outstanding:
Basic

 

1,599,440

 

1,357,915

Fully diluted

 

1,612,300

 

1,360,949

 

Table III

Teton Advisors, Inc.

Condensed Consolidated Statements of Financial Condition

 

As of December 31,

2023

 

2022

ASSETS
 
Cash and cash equivalents

$

20,781,885

$

26,995,341

Investment advisory fees receivable

 

846,781

 

999,299

Intangible assets, net

 

2,589,113

 

2,974,011

Investments in securities

 

2,706,683

 

2,559,401

Deferred tax asset

 

3,002,595

 

3,183,152

Other assets

 

541,782

 

549,952

Total assets

$

30,468,839

$

37,261,156

 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Due to broker

$

-

$

7,947,111

Compensation payable

 

746,277

 

255,038

Payable to affiliates

 

216,340

 

436,943

Distribution costs payable

 

191,801

 

359,315

Income tax payable

 

81,040

 

67,197

Accrued expenses and other liabilities

 

1,153,112

 

1,632,569

Total liabilities

 

2,388,570

 

10,698,173

 
Total stockholders' equity

 

28,080,269

 

26,562,983

Total liabilities and stockholders' equity

$

30,468,839

$

37,261,156

 

Supplemental Financial Information

As supplemental information, we provide a non-U.S. generally accepted accounting principles ("non-GAAP") performance measure that we refer to as Cash Earnings. We provide this measure in addition to, but not as a substitute for, net income reported on a U.S. generally accepted accounting principles ("GAAP") basis. Our management and the Board of Directors review Cash Earnings to evaluate our ongoing performance, allocate resources and review our dividend policy. We believe that this non-GAAP performance measure, while not a substitute for GAAP net income, is useful for management and investors when evaluating our underlying operating and financial performance and our available resources. We do not advocate that investors consider this non-GAAP measure without considering financial information prepared in accordance with GAAP.

In calculating quarterly and full year Cash Earnings, we add back to net income, the non-cash amortization expense associated with our intangible assets. In addition, as a result of an assessment of the carrying value of the intangible assets, the Company recognized a non-cash impairment charge of $59,000 and $400,000 in the fourth quarters and full years ended December 31, 2023 and 2022, respectively. For purposes of calculating Cash Earnings, the Company added back the after-tax amounts associated with this impairment charge of $41,330 and $280,200 for the fourth quarters and full years ended December 31, 2023 and 2022, respectively. Although depreciation on property & equipment and amortization of leaseholds are also non-cash expenses, we do not add it back when calculating Cash Earnings because those charges represent a decline in the value of the related assets that will ultimately require replacement.

The following table provides a reconciliation of net income to Cash Earnings and Cash Earnings Per Share for the quarterly periods presented:

For the Quarter Ended December 31,

(unaudited)

2023

 

2022

Net income

$

299,895

$

425,562

Add: Intangible amortization - customer relationships

 

81,475

 

81,475

Add: Impairment of intangible assets (net of tax impact)

 

41,330

 

280,200

Cash Earnings

$

422,700

$

787,237

Cash Earnings Per Fully Diluted Share

$

0.26

$

0.49

The following table provides a reconciliation of net income to Cash Earnings and Cash Earnings Per Share for the full year periods presented:

For the Years Ended December 31,

2023

 

2022

Net income

$

1,205,118

$

1,600,939

Add: Intangible amortization - customer relationships

 

325,898

 

325,898

Add: Impairment of intangible assets (net of tax impact)

 

41,330

 

280,200

Cash Earnings

$

1,572,346

$

2,207,037

Cash Earnings Per Fully Diluted Share

$

0.98

$

1.62

ABOUT TETON

Teton Advisors, Inc. (OTCQX: TETAA) is a specialist in smaller company investing, serving a diverse client base of institutional, high net worth and mutual fund investors under brands including Teton Westwood, Gabelli and Keeley. The Company was founded on a commitment to uncover value by focusing on companies that are misunderstood or ignored by the market utilizing methodologies developed by investment pioneers Mario Gabelli and John L. Keeley, Jr. As active, fundamental investors, the Teton portfolio teams think independently and focus on identifying short-term market inefficiencies to generate long-term alpha. Teton's investment professionals share in the belief that being different is the cornerstone to discovering hidden value in equities. The Teton time-tested investment approaches can help set apart your client portfolios, delivering differentiated attributes to round out a broader portfolio. From modest beginnings over 40 years ago, to today, The Disciplined Discovery of Value™ shapes the cornerstone for our clients' long-term success.

Notification to all Teton Advisors, Inc. Class B Shareholders

Class B shares are convertible on a one-for-one basis into Class A shares that trade through multiple market makers on OTCQX: TETAA. Teton shareholders may convert their Class B Shares into Class A Shares, which most recently traded at $15.00 per share. For those Class B shareholders interested in conversion, please see the Investor Relations page on Teton's website to complete a Conversion Notice Request Form - (http://tetonadv.com/documents/ConversionNotice.pdf).

SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

Our disclosure and analysis in this press release contain some forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. Such statements are subject to contingencies and uncertainties, some or all of which may be material. We direct your attention to the cautionary statements regarding forward-looking information set forth in documents on Teton's website. We do not undertake to update publicly any forward-looking statements if we subsequently learn that we are unlikely to achieve our expectations or if we receive any additional information relating to the subject matter of our forward-looking statements.


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