☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
ASSOCIATED CAPITAL GROUP, INC. |
(Exact name of Registrant as specified in its charter) |
Delaware
|
47-3965991
|
|
(State of other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
191 Mason Street, Greenwich, CT
|
06830
|
|
(Address of principle executive offices)
|
(Zip Code)
|
(203) 629-9595
|
(Registrant’s telephone number, including area code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Class A Common Stock, par value $0.001 per share
|
AC
|
New York Stock Exchange
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
|
Non-accelerated filer ☒
|
Smaller reporting company ☒
|
Emerging growth company ☒
|
Class
|
Outstanding at April 30, 2020
|
|
Class A Common Stock, .001 par value
|
3,404,541
|
|
Class B Common Stock, .001 par value
|
18,982,918
|
PART I.
|
FINANCIAL INFORMATION
|
Page
|
Item 1.
|
1
|
|
Item 2.
|
22
|
|
Item 3.
|
28 | |
Item 4.
|
28 | |
PART II.
|
OTHER INFORMATION *
|
|
Item 1.
|
30 | |
Item 2.
|
30 | |
Item 6.
|
31 | |
31 |
March 31,
2020
|
December 31,
2019
|
|||||||
ASSETS
|
||||||||
Cash and cash equivalents (a)
|
$
|
358,594
|
$
|
348,588
|
||||
Investments in securities (Including GBL stock with a value of $32.3 million and $57.2 million, respectively) (a)
|
222,807
|
300,357
|
||||||
Investments in affiliated registered investment companies
|
121,734
|
159,311
|
||||||
Investments in partnerships (a)
|
136,937
|
145,372
|
||||||
Receivable from brokers (a)
|
17,403
|
24,150
|
||||||
Investment advisory fees receivable
|
1,311
|
9,582
|
||||||
Receivable from affiliates
|
627
|
4,369
|
||||||
Deferred tax assets (including taxes receivable of $1,297 in 2020)
|
22,128
|
2,004
|
||||||
Goodwill
|
3,519
|
3,519
|
||||||
Other assets (a)
|
19,030
|
13,654
|
||||||
Total assets
|
$
|
904,090
|
$
|
1,010,906
|
||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
|
||||||||
Payable to brokers
|
$
|
8,819
|
$
|
14,889
|
||||
Income taxes payable
|
-
|
3,676
|
||||||
Compensation payable
|
5,665
|
20,246
|
||||||
Securities sold, not yet purchased (a)
|
17,422
|
16,419
|
||||||
Payable to affiliates
|
637
|
483
|
||||||
Accrued expenses and other liabilities (a)
|
4,835
|
7,373
|
||||||
Total liabilities
|
37,378
|
63,086
|
||||||
Redeemable noncontrolling interests (a)
|
45,909
|
50,385
|
||||||
Equity:
|
||||||||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; none issued and outstanding
|
-
|
-
|
||||||
Class A Common Stock, $0.001 par value; 100,000,000 shares authorized; 6,589,254 and 6,569,254 shares issued, respectively; 3,390,590 and 3,452,381 shares outstanding,
respectively
|
6
|
6
|
||||||
Class B Common Stock, $0.001 par value; 100,000,000 shares authorized; 19,196,792 shares issued;
|
-
|
|||||||
19,002,918 and 19,022,918 shares outstanding, respectively
|
19
|
19
|
||||||
Additional paid-in capital
|
1,003,450
|
1,003,450
|
||||||
Retained earnings/(Accumulated deficit)
|
(74,056
|
)
|
(701
|
)
|
||||
Treasury stock, at cost (3,198,664 and 3,116,873 shares outstanding, respectively)
|
(109,567
|
)
|
(106,342
|
)
|
||||
Total Associated Capital Group, Inc. equity
|
819,852
|
896,432
|
||||||
Noncontrolling interests
|
951
|
1,003
|
||||||
Total equity
|
820,803
|
897,435
|
||||||
Total liabilities and equity
|
$
|
904,090
|
$
|
1,010,906
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Revenues
|
||||||||
Investment advisory and incentive fees
|
$
|
2,700
|
$
|
2,733
|
||||
Institutional research services
|
1,374
|
1,913
|
||||||
Other
|
295
|
6
|
||||||
Total revenues
|
4,369
|
4,652
|
||||||
Expenses
|
||||||||
Compensation
|
3,375
|
6,311
|
||||||
Management fee
|
-
|
3,260
|
||||||
Other operating expenses
|
2,089
|
2,957
|
||||||
Total expenses
|
5,464
|
12,528
|
||||||
Operating loss
|
(1,095
|
)
|
(7,876
|
)
|
||||
Other income (expense)
|
||||||||
Net gain/(loss) from investments
|
(102,090
|
)
|
34,979
|
|||||
Interest and dividend income
|
2,310
|
3,786
|
||||||
Interest expense
|
(49
|
)
|
(44
|
)
|
||||
Shareholder-designated contribution
|
(227 | ) |
- | |||||
Total other income (expense), net
|
(100,056
|
)
|
38,721
|
|||||
Income/(loss) before income taxes
|
(101,151
|
)
|
30,845
|
|||||
Income tax expense/(benefit)
|
(23,799
|
)
|
6,191
|
|||||
Net income/(loss)
|
(77,352
|
)
|
24,654
|
|||||
Net income/(loss) attributable to noncontrolling interests
|
(3,997
|
)
|
1,507
|
|||||
Net income/(loss) attributable to Associated Capital Group, Inc.’s shareholders
|
$
|
(73,355
|
)
|
$
|
23,147
|
|||
Net income/(loss) attributable to Associated Capital Group, Inc.’s shareholders per share:
|
||||||||
Basic
|
$
|
(3.27
|
)
|
$
|
1.02
|
|||
Diluted
|
$
|
(3.27
|
)
|
$
|
1.02
|
|||
Weighted average shares outstanding:
|
||||||||
Basic
|
22,441
|
22,584
|
||||||
Diluted
|
22,441
|
22,584
|
|
Three Months Ended
March 31,
|
|||||||
|
2020
|
2019
|
||||||
|
||||||||
Net income/(loss)
|
$
|
(77,352
|
)
|
$
|
24,654
|
|||
Less: Comprehensive income/(loss) attributable to noncontrolling interests
|
(3,997
|
)
|
1,507
|
|||||
|
||||||||
Comprehensive income/(loss) attributable to Associated Capital Group, Inc.
|
$
|
(73,355
|
)
|
$
|
23,147
|
Associated Capital Group, Inc. shareholders |
||||||||||||||||||||||||||||
Common
Stock
|
Retained
Earnings/
(Accumulated
Deficit)
|
Additional
Paid-in
Capital
|
Treasury
Stock
|
Noncontrolling
Interest
|
Total
|
Redeemable
Noncontrolling
Interests
|
||||||||||||||||||||||
Balance at December 31, 2019
|
$
|
25
|
$
|
(701
|
)
|
$
|
1,003,450
|
$
|
(106,342
|
)
|
$
|
1,003
|
$
|
897,435
|
$
|
50,385
|
||||||||||||
Redemptions of noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
(531
|
)
|
||||||||||||||||||||
Net loss
|
-
|
(73,355
|
)
|
-
|
-
|
(52
|
)
|
(73,407
|
)
|
(3,945
|
)
|
|||||||||||||||||
Purchase of treasury stock
|
-
|
-
|
-
|
(3,225
|
)
|
-
|
(3,225
|
)
|
-
|
|||||||||||||||||||
Balance at March 31, 2020
|
$
|
25
|
$
|
(74,056
|
)
|
$
|
1,003,450
|
$
|
(109,567
|
)
|
$
|
951
|
$
|
820,803
|
$
|
45,909
|
Associated Capital Group, Inc. shareholders
|
||||||||||||||||||||||||
Common
Stock
|
Accumulated
Deficit
|
Additional
Paid-in
Capital
|
Treasury
Stock
|
Total
|
Redeemable
Noncontrolling
Interests
|
|||||||||||||||||||
Balance at December 31, 2018
|
$
|
25
|
$
|
(39,889
|
)
|
$
|
1,008,319
|
$
|
(102,207
|
)
|
$
|
866,248
|
$
|
49,800
|
||||||||||
Redemptions of noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
(526
|
)
|
|||||||||||||||||
Net income
|
-
|
23,147
|
-
|
-
|
23,147
|
1,507
|
||||||||||||||||||
Purchase of treasury stock
|
-
|
-
|
-
|
(391
|
)
|
(391
|
)
|
-
|
||||||||||||||||
Balance at March 31, 2019
|
$
|
25
|
$
|
(16,742
|
)
|
$
|
1,008,319
|
$
|
(102,598
|
)
|
$
|
889,004
|
$
|
50,781
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Operating activities
|
||||||||
Net income (loss)
|
$
|
(77,352
|
)
|
$
|
24,654
|
|||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||
Equity in net (gains) losses from partnerships
|
10,676
|
(3,838
|
)
|
|||||
Depreciation and amortization
|
802
|
6
|
||||||
Deferred income taxes
|
(21,186
|
)
|
-
|
|||||
Donated securities
|
281
|
944
|
||||||
Unrealized (gains) losses on securities
|
64,337
|
(20,047
|
)
|
|||||
(Increase) decrease in assets:
|
||||||||
Investments in securities
|
50,246
|
(35,098
|
)
|
|||||
Investments in partnerships:
|
||||||||
Contributions to partnerships
|
(3,429
|
)
|
(4,071
|
)
|
||||
Distributions from partnerships
|
1,266
|
500
|
||||||
Receivable from affiliates
|
3,743
|
578
|
||||||
Receivable from brokers
|
6,748
|
(2,351
|
)
|
|||||
Investment advisory fees receivable
|
8,271
|
3,206
|
||||||
Income taxes receivable
|
1,062
|
|
2,551
|
|||||
Other assets
|
5,693
|
9,021
|
||||||
Increase (decrease) in liabilities:
|
||||||||
Payable to brokers
|
(6,070
|
)
|
11,912
|
|||||
Income taxes payable and deferred tax liabilities, net
|
(3,676
|
)
|
3,645
|
|||||
Payable to affiliates
|
154
|
620
|
||||||
Compensation payable
|
(14,582
|
)
|
(3,877
|
)
|
||||
Accrued expenses and other liabilities
|
(367
|
)
|
(1,060
|
)
|
||||
Total adjustments
|
103,969
|
(37,359
|
)
|
|||||
Net cash provided by (used in) operating activities
|
$
|
26,617
|
$
|
(12,705
|
)
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Investing activities
|
||||||||
Purchases of securities
|
$
|
(193
|
)
|
$
|
(342
|
)
|
||
Proceeds from sales of securities
|
321
|
2,108
|
||||||
Return of capital on securities
|
349
|
571
|
||||||
Purchase of building
|
(11,084
|
)
|
-
|
|||||
Net cash (used in) provided by investing activities
|
(10,607
|
)
|
2,337
|
|||||
Financing activities
|
||||||||
Redemptions of redeemable noncontrolling interests
|
(531
|
)
|
(526
|
)
|
||||
Dividends paid
|
(2,248
|
)
|
(2,259
|
)
|
||||
Purchase of treasury stock
|
(3,225
|
)
|
(391
|
)
|
||||
Net cash used in financing activities
|
(6,004
|
)
|
(3,176
|
)
|
||||
Net increase (decrease) in cash and cash equivalents
|
10,006
|
(13,544
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
348,588
|
409,764
|
||||||
Cash and cash equivalents at end of period
|
$
|
358,594
|
$
|
396,220
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid for interest
|
$
|
49
|
$
|
44
|
||||
Cash paid for taxes
|
$
|
-
|
$
|
-
|
||||
Reconciliation to cash, cash equivalents and restricted cash
|
||||||||
Cash and cash equivalents
|
$
|
358,594
|
$
|
396,020
|
||||
Restricted cash included in receivable from brokers
|
200
|
200
|
||||||
Cash, cash equivalents and restricted cash
|
$
|
358,794
|
$
|
396,220
|
a. |
Asset-based advisory fees – The Company receives a management fee, payable monthly in advance based on value of the net assets of the client. It is generally set at a rate of 1%-1.5% per annum. Asset-based management fee revenue is
recognized only as the services are performed over the period.
|
b. |
Performance-based advisory fees – Certain client contracts call for additional fees and or allocations of income tied to a certain percentage, generally 20%, of the investment performance of the account over a measurement period,
typically the calendar year. In addition, the contracts provide that performance-based fees or allocations become fixed in the event of an investor redemption prior to the end of the measurement period. In the event that an account
suffers a loss in one period, it must be recovered before incentive fees are earned by the Company; this is commonly referred to as a “high water mark” provision. While the Company’s performance obligation is satisfied over time, the
Company does not recognize performance-based fees until the end of the measurement period or the time of the investor redemption when the uncertainty surrounding the amount of the variable consideration is resolved.
|
c. |
Sub-advisory fees – Pursuant to agreements with other investment advisors, the Company receives a percentage of advisory fees received by such advisors from certain of their investment fund clients. These fees may be either asset- or
performance-based. In addition, they may be subject to reduction by certain expenses as set forth in the respective agreements. Sub-advisory fee revenue which is asset-based is recognized ratably as the services are performed over the
relevant contractual performance period. Sub-advisory fee revenue which is performance-based is recognized only when it becomes fixed and not subject to adjustment.
|
a. |
Brokerage Commissions – Acting as agent, G.research buys and sells securities on behalf of its customers. Commissions are charged on the execution of securities transactions made on behalf of client accounts on an agency basis and are
based on a rate schedule. G.research recognizes commission revenue when the related securities transactions are executed on trade date. G.research believes that the performance obligation is satisfied on trade date because that is when
the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to or from the customer. Commissions earned are typically collected from the clearing
brokers utilized by G.research on a daily or weekly basis.
|
b. |
Hard dollar payments – G.research provides research services to unrelated parties, for which direct payment is received. G.research may, or may not have contracts for such services. Where a contract for such services is in place, the
contractual fee for the period is recognized ratably over the contract period, which is considered the period over which G.research satisfies its performance obligation. For payments where no research contract exists, revenue is not
recognized until agreement is reached with the client at which time the performance obligation is considered to have been met and revenue is recognized.
|
c. |
Selling concessions –G.research participates as a member of the selling group of underwritten equity offerings and receives compensation based on the difference between what its clients pay for the securities sold to its institutional
clients and what the issuer receives. The terms of the selling concessions are set forth in contracts between G.research and the underwriter. Revenue is recognized on the trade date (the date on which the G.research purchases the
securities from the issuer) for the portion G.research is contracted to buy. G.research believes that the trade date is the appropriate point in time to recognize revenue for securities underwriting transactions as there are no
significant actions G.research needs to take subsequent to this date, and the issuer obtains the control and benefit of the capital markets offering at this point. Selling concessions earned are typically collected from the clearing
brokers utilized by G.research on a daily or weekly basis.
|
d. |
Sales manager fees – G.research participates as sales manager of at-the-market offerings of certain affiliated closed-end funds and receives a tiered percentage of proceeds as stipulated in agreements between G.research, the funds and
the funds’ investment adviser. G.research recognizes sales manager fees upon sale of the related closed-end funds. Sales manager fees earned are fixed and typically collected from the clearing brokers utilized by G.research on a daily or
weekly basis.
|
Three months ended March 31,
|
||||||||
2020
|
2019
|
|||||||
Investment advisory and incentive fees
|
||||||||
Asset-based advisory fees
|
$
|
1,820
|
$
|
1,724
|
||||
Performance-based advisory fees
|
-
|
|
13
|
|||||
Sub-advisory fees
|
880
|
996
|
||||||
2,700
|
2,733
|
|||||||
Institutional research services
|
||||||||
Hard dollar payments
|
102
|
487
|
||||||
Commissions
|
937
|
1,426
|
||||||
Sales manager fees
|
335
|
-
|
||||||
1,374
|
1,913
|
|||||||
Other
|
||||||||
Underwriting fees
|
30
|
-
|
||||||
Miscellaneous
|
265
|
6
|
||||||
295
|
6
|
|||||||
Total
|
$
|
4,369
|
$
|
4,652
|
March 31, 2020
|
December 31, 2019
|
|||||||||||||||
Cost
|
Fair Value
|
Cost
|
Fair Value
|
|||||||||||||
Debt - Trading Securities
|
||||||||||||||||
Government obligations
|
$
|
-
|
$
|
-
|
$
|
28,428
|
$
|
29,037
|
||||||||
Equity Securities
|
||||||||||||||||
Common stocks
|
284,446
|
213,374
|
271,627
|
262,562
|
||||||||||||
Mutual funds
|
597
|
768
|
1,207
|
2,196
|
||||||||||||
Other investments
|
11,796
|
8,665
|
7,847
|
6,562
|
||||||||||||
Total investments in securities
|
$
|
296,839
|
$
|
222,807
|
$
|
309,109
|
$
|
300,357
|
March 31, 2020
|
December 31, 2019
|
|||||||||||||||
Proceeds
|
Fair Value
|
Proceeds
|
Fair Value
|
|||||||||||||
Equity securities
|
||||||||||||||||
Common stocks
|
$
|
20,314
|
$
|
16,656
|
$
|
13,863
|
$
|
16,300
|
||||||||
Other investments
|
53
|
766
|
13
|
119
|
||||||||||||
Total securities sold, not yet purchased
|
$
|
20,367
|
$
|
17,422
|
$
|
13,876
|
$
|
16,419
|
March 31, 2020
|
December 31, 2019
|
|||||||||||||||
Cost
|
Fair Value
|
Cost
|
Fair Value
|
|||||||||||||
Equity securities
|
||||||||||||||||
Closed-end funds
|
$
|
75,619
|
$
|
68,696
|
$
|
75,646
|
$
|
99,834
|
||||||||
Mutual funds
|
48,708
|
53,038
|
48,348
|
59,477
|
||||||||||||
Total investments in affiliated registered investment companies
|
$
|
124,327
|
$
|
121,734
|
$
|
123,994
|
$
|
159,311
|
Asset Derivatives
|
Liability Derivatives
|
|||||||||||||||||||
|
Statement of |
Fair Value
|
Statement of
|
Fair Value
|
||||||||||||||||
Financial Condition
Location
|
March 31,
2020
|
December 31,
2019
|
Financial Condition
Location
|
March 31,
2020
|
December 31,
2019
|
|||||||||||||||
Derivatives designated as hedging instruments under FASB ASC 815-20
|
|
|||||||||||||||||||
Foreign exchange contracts
|
Receivable from brokers
|
$
|
58
|
$
|
23
|
Payable to brokers
|
$
|
-
|
$
|
-
|
||||||||||
|
|
|||||||||||||||||||
Derivatives not designated as hedging instruments under FASB ASC 815-20
|
|
|||||||||||||||||||
Equity contracts |
Investments in securities
|
$
|
76
|
$
|
291
|
Securities sold, not yet purchased
|
$
|
766
|
$
|
119
|
||||||||||
|
|
|||||||||||||||||||
Total derivatives
|
|
$
|
134
|
$
|
314
|
|
$
|
766
|
$
|
119
|
Type of Derivative
|
Income Statement Location
|
Three Months ended March 31,
|
||||||||
|
|
2020
|
2019
|
|||||||
|
|
|||||||||
Foreign exchange contracts
|
Net gain/(loss) from investments
|
$
|
51
|
$
|
81
|
|||||
Equity contracts
|
Net gain/(loss) from investments
|
(86
|
)
|
(2,022
|
)
|
|||||
Total
|
$
|
(35
|
)
|
$
|
(1,941
|
)
|
|
Gross
Amounts of
|
Gross Amounts
Offset in the
|
Net Amounts of
Assets Presented
|
Gross Amounts Not Offset in the
Statements of Financial Condition
|
||||||||||||||||||||
|
Recognized
Assets
|
Statements of
Financial Condition
|
in the Statements
of Financial Condition
|
Financial
Instruments
|
Cash Collateral
Received
|
Net Amount
|
||||||||||||||||||
Swaps:
|
(In thousands)
|
|||||||||||||||||||||||
March 31, 2020
|
$
|
76
|
$
|
-
|
$
|
76
|
$
|
(76
|
)
|
$
|
-
|
$
|
-
|
|||||||||||
December 31, 2019
|
291
|
-
|
291
|
(119
|
)
|
-
|
172
|
|
Gross
Amounts of
|
Gross Amounts
Offset in the
|
Net Amounts of
Liabilities Presented
|
Gross Amounts Not Offset in the
Statements of Financial Condition
|
||||||||||||||||||||
|
Recognized
Liabilities
|
Statements of
Financial Condition
|
in the Statements
of Financial Condition
|
Financial
Instruments
|
Cash Collateral
Pledged
|
Net Amount
|
||||||||||||||||||
Swaps:
|
(In thousands)
|
|||||||||||||||||||||||
March 31, 2020
|
$
|
766
|
$
|
-
|
$
|
766
|
$
|
(76
|
)
|
$
|
-
|
$
|
690
|
|||||||||||
December 31, 2019
|
119
|
-
|
119
|
(119
|
)
|
-
|
-
|
March 31, 2020
|
||||||||||||
Prior to
Consolidation
|
Consolidated
Entities
|
As Reported
|
||||||||||
Assets
|
||||||||||||
Cash and cash equivalents
|
$
|
342,127
|
$
|
16,467
|
$
|
358,594
|
||||||
Investments in securities (including GBL stock)
|
127,360
|
95,447
|
222,807
|
|||||||||
Investments in affiliated investment companies
|
169,133
|
(47,399
|
)
|
121,734
|
||||||||
Investments in partnerships
|
154,669
|
(17,732
|
)
|
136,937
|
||||||||
Receivable from brokers
|
4,788
|
12,615
|
17,403
|
|||||||||
Investment advisory fees receivable
|
1,334
|
(23
|
)
|
1,311
|
||||||||
Other assets
|
45,172
|
132
|
45,304
|
|||||||||
Total assets
|
$
|
844,583
|
$
|
59,507
|
$
|
904,090
|
||||||
Liabilities and equity
|
||||||||||||
Securities sold, not yet purchased
|
$
|
6,964
|
$
|
10,458
|
$
|
17,422
|
||||||
Accrued expenses and other liabilities
|
16,816
|
3,140
|
19,956
|
|||||||||
Redeemable noncontrolling interests
|
-
|
45,909
|
45,909
|
|||||||||
Total equity
|
820,803
|
-
|
820,803
|
|||||||||
Total liabilities and equity
|
$
|
844,583
|
$
|
59,507
|
$
|
904,090
|
||||||
December 31, 2019
|
||||||||||||
Prior to
Consolidation
|
Consolidated
Entities
|
As Reported
|
||||||||||
Assets
|
||||||||||||
Cash and cash equivalents
|
$
|
335,421
|
$
|
13,167
|
$
|
348,588
|
||||||
Investments in securities (including GBL stock)
|
182,673
|
117,684
|
300,357
|
|||||||||
Investments in affiliated investment companies
|
211,024
|
(51,713
|
)
|
159,311
|
||||||||
Investments in partnerships
|
167,781
|
(22,409
|
)
|
145,372
|
||||||||
Receivable from brokers
|
7,759
|
16,391
|
24,150
|
|||||||||
Investment advisory fees receivable
|
9,604
|
(22
|
)
|
9,582
|
||||||||
Other assets
|
23,517
|
29
|
23,546
|
|||||||||
Total assets
|
$
|
937,779
|
$
|
73,127
|
$
|
1,010,906
|
||||||
Liabilities and equity
|
||||||||||||
Securities sold, not yet purchased
|
$
|
4,625
|
$
|
11,794
|
$
|
16,419
|
||||||
Accrued expenses and other liabilities
|
35,718
|
10,949
|
46,667
|
|||||||||
Redeemable noncontrolling interests
|
1
|
50,384
|
50,385
|
|||||||||
Total equity
|
897,435
|
-
|
897,435
|
|||||||||
Total liabilities and equity
|
$
|
937,779
|
$
|
73,127
|
$
|
1,010,906
|
Three Months Ended March 31, 2020
|
||||||||||||
Prior to
Consolidation
|
Consolidated
Entities
|
As Reported
|
||||||||||
Total revenues
|
$
|
3,725
|
$
|
644
|
$
|
4,369
|
||||||
Total expenses
|
5,493
|
198
|
5,464
|
|||||||||
Operating loss
|
(1,768
|
)
|
446
|
(1,095
|
)
|
|||||||
Total other income, net
|
(95,438
|
)
|
(4,391
|
)
|
(100,056
|
)
|
||||||
Income before income taxes
|
(97,206
|
)
|
(3,945
|
)
|
(101,151
|
)
|
||||||
Income tax expense
|
(23,799
|
)
|
-
|
(23,799
|
)
|
|||||||
Net income before NCI
|
(73,407
|
)
|
(3,945
|
)
|
(77,352
|
)
|
||||||
Net income attributable to noncontrolling interests
|
(52
|
)
|
(3,945
|
)
|
(3,997
|
)
|
||||||
Net income
|
$
|
(73,355
|
)
|
$
|
-
|
$
|
(73,355
|
)
|
||||
Three Months Ended March 31, 2019
|
||||||||||||
Prior to
Consolidation
|
Consolidated
Entities
|
As Reported
|
||||||||||
Total revenues
|
$
|
4,817
|
$
|
(165
|
)
|
$
|
4,652
|
|||||
Total expenses
|
11,462
|
1,066
|
12,528
|
|||||||||
Operating loss
|
(6,645
|
)
|
(1,231
|
)
|
(7,876
|
)
|
||||||
Total other income/(expense), net
|
35,983
|
2,738
|
38,721
|
|||||||||
Loss before income taxes
|
29,338
|
1,507
|
30,845
|
|||||||||
Income tax benefit
|
6,191
|
-
|
6,191
|
|||||||||
Net loss before NCI
|
23,147
|
1,507
|
24,654
|
|||||||||
Net loss attributable to noncontrolling interests
|
-
|
1,507
|
1,507
|
|||||||||
Net loss
|
$
|
23,147
|
$
|
-
|
$
|
23,147
|
March 31,
2020
|
December 31,
2019
|
|||||||
Cash and cash equivalents
|
$
|
2,384
|
$
|
2,224
|
||||
Investments in securities
|
13,570
|
18,454
|
||||||
Receivable from brokers
|
2,097
|
2,601
|
||||||
Investments in partnerships and affiliates
|
8,120
|
8,363
|
||||||
Accrued expenses and other liabilities
|
(198
|
)
|
(329
|
)
|
||||
Redeemable noncontrolling interests
|
(8,419
|
)
|
(9,592
|
)
|
||||
AC Group’s net interests in consolidated VIEs
|
$
|
17,554
|
$
|
21,721
|
March 31, 2020
|
||||||||||||||||
Assets
|
Quoted Prices in Active
Markets for Identical
Assets (Level 1)
|
Significant Other
Observable
Inputs (Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
Total
|
||||||||||||
Cash equivalents
|
$
|
354,434
|
$
|
-
|
$
|
-
|
$
|
354,434
|
||||||||
Investments in securities (including GBL stock):
|
||||||||||||||||
Trading - Gov’t obligations
|
-
|
-
|
-
|
-
|
||||||||||||
Common stocks
|
206,694
|
6,644
|
36
|
213,374
|
||||||||||||
Mutual funds
|
768
|
-
|
-
|
768
|
||||||||||||
Other
|
3,460
|
1,310
|
3,895
|
8,665
|
||||||||||||
Total investments in securities
|
210,922
|
7,954
|
3,931
|
222,807
|
||||||||||||
Investments in affiliated registered investment companies:
|
||||||||||||||||
Closed-end funds
|
68,696
|
-
|
-
|
68,696
|
||||||||||||
Mutual funds
|
53,038
|
-
|
-
|
53,038
|
||||||||||||
Total investments in affiliated registered investment companies
|
121,734
|
-
|
-
|
121,734
|
||||||||||||
Total investments held at fair value
|
332,656
|
7,954
|
3,931
|
344,541
|
||||||||||||
Total assets at fair value
|
$
|
687,090
|
$
|
7,954
|
$
|
3,931
|
$
|
698,975
|
||||||||
Liabilities
|
||||||||||||||||
Common stocks
|
$
|
16,656
|
$
|
-
|
$
|
-
|
$
|
16,656
|
||||||||
Other
|
-
|
766
|
-
|
766
|
||||||||||||
Securities sold, not yet purchased
|
$
|
16,656
|
$
|
766
|
$
|
-
|
$
|
17,422
|
December 31, 2019
|
||||||||||||||||
Assets
|
Quoted Prices in Active
Markets for Identical
Assets (Level 1)
|
Significant Other
Observable
Inputs (Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
Total
|
||||||||||||
Cash equivalents
|
$
|
343,428
|
$
|
-
|
$
|
-
|
$
|
343,428
|
||||||||
Investments in securities (including GBL stock):
|
||||||||||||||||
Trading - Gov’t obligations
|
29,037
|
-
|
-
|
29,037
|
||||||||||||
Common stocks
|
257,520
|
4,444
|
89
|
262,562
|
||||||||||||
Mutual funds
|
2,196
|
-
|
-
|
2,196
|
||||||||||||
Other
|
2,428
|
509
|
4,134
|
6,562
|
||||||||||||
Total investments in securities
|
291,181
|
4,953
|
4,223
|
300,357
|
||||||||||||
Investments in affiliated registered investment companies:
|
||||||||||||||||
Closed-end funds
|
99,834
|
-
|
-
|
99,834
|
||||||||||||
Mutual funds
|
59,477
|
-
|
-
|
59,477
|
||||||||||||
Total investments in affiliated registered investment companies
|
159,311
|
-
|
-
|
159,311
|
||||||||||||
Total investments held at fair value
|
450,492
|
4,953
|
4,223
|
459,668
|
||||||||||||
Total assets at fair value
|
$
|
793,920
|
$
|
4,953
|
$
|
4,223
|
$
|
803,096
|
||||||||
Liabilities
|
||||||||||||||||
Common stocks
|
$
|
16,300
|
$
|
-
|
$
|
-
|
$
|
16,300
|
||||||||
Other
|
-
|
119
|
-
|
119
|
||||||||||||
Securities sold, not yet purchased
|
$
|
16,300
|
$
|
119
|
$
|
-
|
$
|
16,419
|
Three months ended March 31, 2020
|
Three months ended March 31, 2019
|
|||||||||||||||||||||||
Common
Stocks
|
Other
|
Total
|
Common
Stocks
|
Other
|
Total
|
|||||||||||||||||||
Beginning balance
|
$
|
89
|
$
|
4,134
|
$
|
4,223
|
$
|
12
|
$
|
3,458
|
$
|
3,470
|
||||||||||||
Consolidated fund
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Total gains/(losses)
|
(53
|
)
|
(130
|
)
|
(183
|
)
|
(42
|
)
|
(147
|
)
|
(189
|
)
|
||||||||||||
Purchases
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Sales
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Transfers
|
-
|
(109
|
)
|
(109
|
)
|
63
|
-
|
63
|
||||||||||||||||
Ending balance
|
$
|
36
|
$
|
3,895
|
$
|
3,931
|
$
|
33
|
$
|
3,311
|
$
|
3,344
|
||||||||||||
Changes in net unrealized gain/(loss) included in Net gain/(loss) from investments related to level 3 assets still held as of the reporting date
|
$
|
(53
|
)
|
$
|
(130
|
)
|
$
|
(183
|
)
|
$
|
(42
|
)
|
$
|
(147
|
)
|
$
|
(189
|
)
|
Three Months Ended March 31,
|
||||||||
(amounts in thousands, except per share amounts)
|
2020
|
2019
|
||||||
Basic:
|
||||||||
Net income/(loss) attributable to Associated Capital Group, Inc.’s shareholders
|
$
|
(73,355
|
)
|
$
|
23,147
|
|||
Weighted average shares outstanding
|
22,441
|
22,584
|
||||||
Basic net income/(loss) attributable to Associated Capital Group, Inc.’s shareholders per share
|
$
|
(3.27
|
)
|
$
|
1.02
|
|||
Diluted:
|
||||||||
Net income/(loss) attributable to Associated Capital Group, Inc.’s shareholders
|
$
|
(73,355
|
)
|
$
|
23,147
|
|||
Weighted average share outstanding
|
22,441
|
22,584
|
||||||
Diluted net income/(loss) attributable to Associated Capital Group, Inc.’s shareholders per share
|
$
|
(3.27
|
)
|
$
|
1.02
|
ITEM 2: |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (INCLUDING QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK) (“MD&A”)
|
(in thousands, except per share data)
|
Three months ended March 31,
|
|||||||
2020
|
2019
|
|||||||
Revenues
|
||||||||
Investment advisory and incentive fees
|
$
|
2,700
|
$
|
2,733
|
||||
Institutional research services
|
1,374
|
1,913
|
||||||
Other
|
295
|
6
|
||||||
Total revenues
|
4,369
|
4,652
|
||||||
Expenses
|
||||||||
Compensation
|
4,193
|
5,896
|
||||||
Stock-based compensation
|
(818
|
)
|
415
|
|||||
Management fee
|
-
|
3,260
|
||||||
Other operating expenses
|
2,089
|
2,957
|
||||||
Total expenses
|
5,464
|
12,528
|
||||||
Operating loss
|
(1,095
|
)
|
(7,876
|
)
|
||||
Other income/(expense)
|
||||||||
Net gain/(loss) from investments
|
(102,090
|
)
|
34,979
|
|||||
Interest and dividend income
|
2,310
|
3,786
|
||||||
Interest expense
|
(49
|
)
|
(44
|
)
|
||||
Shareholder-designated contribution
|
(227 | ) |
- | |||||
Total other income/(expense), net
|
(100,056
|
)
|
38,721
|
|||||
Income/(loss) before income taxes
|
(101,151
|
)
|
30,845
|
|||||
Income tax expense/(benefit)
|
(23,799
|
)
|
6,191
|
|||||
Net income/(loss)
|
(77,352
|
)
|
24,654
|
|||||
Net income/(loss) attributable to noncontrolling interests
|
(3,997
|
)
|
1,507
|
|||||
Net income/(loss) attributable to Associated Capital Group, Inc.’s shareholders
|
$
|
(73,355
|
)
|
$
|
23,147
|
|||
Net income/(loss) attributable to Associated Capital Group, Inc.’s shareholders per share:
|
||||||||
Basic
|
$
|
(3.27
|
)
|
$
|
1.02
|
|||
Diluted
|
$
|
(3.27
|
)
|
$
|
1.02
|
% Change From
|
||||||||||||||||||||
March 31,
2020
|
December 31,
2019
|
March 31,
2019
|
December 31,
2019
|
March 31,
2019
|
||||||||||||||||
Event Merger Arbitrage
|
$
|
1,312
|
$
|
1,525
|
$
|
1,401
|
(14.0
|
)
|
(6.4
|
)
|
||||||||||
Event-Driven Value
|
112
|
132
|
127
|
(15.2
|
)
|
(11.8
|
)
|
|||||||||||||
Other
|
49
|
59
|
63
|
(16.9
|
)
|
(22.2
|
)
|
|||||||||||||
Total AUM
|
$
|
1,473
|
$
|
1,716
|
$
|
1,591
|
(14.2
|
)
|
(7.4
|
)
|
December 31,
2019
|
Market
appreciation/
(depreciation)
|
Net cash
flows
|
March 31,
2020
|
|||||||||||||
Event Merger Arbitrage
|
$
|
1,525
|
$
|
(122
|
)
|
$
|
(91
|
)
|
$
|
1,312
|
||||||
Event-Driven Value
|
132
|
(23
|
)
|
3
|
112
|
|||||||||||
Other
|
59
|
(9
|
)
|
(1
|
)
|
49
|
||||||||||
Total AUM
|
$
|
1,716
|
$
|
(154
|
)
|
$
|
(89
|
)
|
$
|
1,473
|
Three months ended March 31,
|
||||||||
2020
|
2019
|
|||||||
Cash flows provided by (used in):
|
||||||||
Operating activities
|
$
|
26,617
|
$
|
(12,705
|
)
|
|||
Investing activities
|
(10,607
|
)
|
2,337
|
|||||
Financing activities
|
(6,004
|
)
|
(3,176
|
)
|
||||
Net increase (decrease)
|
10,006
|
(13,544
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
348,588
|
409,564
|
||||||
Cash and cash equivalents at end of period
|
$
|
358,594
|
$
|
396,020
|
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4. |
Controls and Procedures
|
• |
the adverse effect from a decline in the securities markets
|
• |
a decline in the performance of our products
|
• |
a general downturn in the economy
|
• |
changes in government policy or regulation
|
• |
changes in our ability to attract or retain key employees
|
• |
unforeseen costs and other effects related to legal proceedings or investigations of governmental and self-regulatory organizations
|
Period
|
Total
Number of
Shares
Repurchased
|
Average
Price Paid Per
Share, net of
Commissions
|
Total Number of
Shares Repurchased as
Part of Publicly
Announced Plans
or Programs
|
Maximum
Number of Shares
That May Yet Be
Purchased Under
the Plans or Programs
|
||||||||||||
01/01/20 - 01/31/20
|
17,929
|
$
|
46.46
|
17,929
|
1,076,427
|
|||||||||||
02/01/20 - 02/29/20
|
33,452
|
41.51
|
33,452
|
1,042,975
|
||||||||||||
03/01/20 - 03/31/20
|
30,410
|
33.01
|
30,410
|
1,012,565
|
||||||||||||
Totals
|
81,791
|
$
|
39.43
|
81,791
|
Item 6. |
Certification of CEO pursuant to Rule 13a-14(a).
|
|
Certification of CAO pursuant to Rule 13a-14(a).
|
|
Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Certification of CAO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
|
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
ASSOCIATED CAPITAL GROUP, INC.
|
|
(Registrant)
|
|
By: /s/ Kenneth D. Masiello
|
|
Name: Kenneth D. Masiello
|
|
Title: Chief Accounting Officer
|
|
Date: May 11, 2020
|