Cohen & Steers Reports First Quarter 2015 Results

Record Quarterly Revenue of $83.8 million

News provided by

Cohen & Steers, Inc.

Apr 15, 2015, 04:30 ET

NEW YORK, April 15, 2015 /PRNewswire/ -- Cohen & Steers, Inc. (NYSE: CNS) reported net income attributable to common stockholders of $20.8 million, or $0.45 per diluted share and $0.46 per basic share, for the quarter ended March 31, 2015, compared with $19.4 million, or $0.43 per diluted share and $0.44 per basic share, for the quarter ended March 31, 2014. Total revenue for the first quarter of 2015 was $83.8 million, an increase of 15.1% from $72.8 million for the first quarter of 2014.

Financial Highlights (Unaudited)

For the Periods

(in thousands, except per share data)

Three Months Ended

% Change From

March 31, 2015

December 31, 2014

March 31, 2014

December 31,

2014

March 31,
2014

Revenue

$

83,815

$

81,842

$

72,835

2.4%

15.1%

Expenses

$

49,266

$

49,492

$

45,239

(0.5%)

8.9%

Operating income

$

34,549

$

32,350

$

27,596

6.8%

25.2%

Operating margin

41.2%


39.5%


37.9%

169 bps

333 bps

Total non-operating (loss) income

$

(1,552)

$

(4,541)

$

3,181

*

*

Net income attributable to common stockholders

$

20,816

$

15,698

$

19,445

32.6%

7.1%

Diluted earnings per share attributable to common stockholders

$

0.45

$

0.34

$

0.43

32.3%

5.9%




































* Not meaningful





Revenue

Revenue for the first quarter of 2015 was $83.8 million, an increase of $2.0 million from $81.8 million for the fourth quarter of 2014. Higher average assets under management in institutional accounts and open-end mutual funds, partially offset by two fewer days in the quarter, resulted in the following revenue increases:

  • $1.2 million from open-end mutual funds; and
  • $636,000 from institutional accounts.

Expenses

Expenses for the first quarter of 2015 were $49.3 million, a decrease of $226,000 from $49.5 million for the fourth quarter of 2014. The change was primarily due to:

  • Lower general and administrative expenses of $403,000, primarily due to lower sponsored conference expenses; and
  • Higher distribution and service fees of $389,000, primarily due to higher average assets under management in open-end mutual funds, partially offset by two fewer days in the quarter.

Operating Margin

The company's operating margin increased to 41.2% for the first quarter of 2015 compared with 39.5% for the three months ended December 31, 2014.

Non-operating Income

Non-operating loss for the first quarter of 2015 decreased $3.0 million to $1.6 million from a loss of $4.5 million for the fourth quarter of 2014, primarily due to lower realized and unrealized losses on the company's seed investments. The non-operating loss included net losses attributable to redeemable noncontrolling interest of $45,000 and $525,000 for the quarters ended March 31, 2015 and December 31, 2014, respectively.

Assets Under Management Highlights (Unaudited)

March 31, 2015 Compared with December 31, 2014

(in millions)

Assets Under Management




As of



By Investment Vehicle

March 31,

2015

December 31,

2014

% Change

    Institutional accounts

$

26,704

$

26,201

1.9%

    Open-end mutual funds

18,062


17,131

5.4%

    Closed-end funds

9,900


9,805

1.0%

Total

$

54,666

$

53,137

2.9%











By Investment Strategy









    U.S. real estate

$

29,289

$

28,357

3.3%

    Global/international real estate

10,189


10,184

0.0%

    Preferred securities

6,732


6,342

6.1%

    Global listed infrastructure

5,701


5,697

0.1%

    Large cap value

1,374


1,288

6.7%

    Other

1,381


1,269

8.8%

Total

$

54,666

$

53,137

2.9%

Assets under management were $54.7 billion at March 31, 2015, an increase of $1.5 billion from $53.1 billion at December 31, 2014. The increase from December 31, 2014 was attributable to market appreciation of $2.0 billion, partially offset by net outflows of $451 million.

Institutional Accounts

Assets under management in institutional accounts were $26.7 billion as of March 31, 2015, an increase of 1.9% from $26.2 billion at December 31, 2014. The change from December 31, 2014 was due to the following:

  • Market appreciation of $1.1 billion, including $745 million from U.S. real estate and $365 million from global/international real estate;
  • Net outflows of $429 million from subadvisory relationships, including $241 million from U.S. real estate, $135 million from global/international real estate, $110 million from preferred securities and $94 million from global listed infrastructure, partially offset by net inflows of $83 million into large cap value and $68 million into commodities (included in "Other" in the above table); and
  • Net outflows of $189 million from advisory relationships, including $152 million from U.S. real estate and $134 million from preferred securities, partially offset by net inflows of $115 million into global listed infrastructure.

Open-end Mutual Funds

Assets under management for open-end mutual funds were $18.1 billion as of March 31, 2015, an increase of 5.4% from $17.1 billion at December 31, 2014. The change from December 31, 2014 was due to the following:

  • Market appreciation of $764 million, including $546 million from U.S. real estate, $120 million from global/international real estate and $96 million from preferred securities; and
  • Net inflows of $167 million, including net inflows of $459 million into preferred securities, partially offset by net outflows of $257 million from global/international real estate and $59 million from U.S. real estate.

Closed-end Funds

Assets under management for closed-end funds were $9.9 billion as of March 31, 2015, an increase of 1.0% from $9.8 billion at December 31, 2014. The increase from December 31, 2014 was due to market appreciation of $95 million.

Balance Sheet Information

As of March 31, 2015, cash, cash equivalents and investments were $158 million. As of March 31, 2015, stockholders' equity was $228 million and the company had no debt.

Conference Call Information

Cohen & Steers will host a conference call tomorrow, April 16, 2015 at 11:00 a.m. (ET) to discuss the company's first quarter results. Investors and analysts can access the live conference call by dialing 800-272-5460 (U.S.) or +1-303-223-2683 (international); passcode: 21766723. Participants should plan to register at least 10 minutes before the conference call begins.

A replay of the call will be available for two weeks starting at approximately 1:00 p.m. (ET) on April 16, 2015 and can be accessed at 800-633-8284 (U.S.) or +1-402-977-9140 (international); passcode: 21766723. Internet access to the webcast, which includes audio (listen-only), will be available on the company's website at www.cohenandsteers.com under "Company - Investor Relations." The webcast will be archived on the website for one month.

About Cohen & Steers

Founded in 1986, Cohen & Steers is a leading global investment manager with a long history of innovation and a focus on real assets, including real estate, infrastructure and commodities, along with preferred securities and other income solutions. Headquartered in New York City, with offices in London, Hong Kong, Tokyo and Seattle, Cohen & Steers serves institutional and individual investors around the world.

Forward-Looking Statements

This press release and other statements that Cohen & Steers may make may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect the company's current views with respect to, among other things, the company's operations and financial performance. You can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates" or the negative versions of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these forward-looking statements. The company believes that these factors include, but are not limited to, the risks described in the "Risk Factors" section of the company's Annual Report on Form 10-K for the year ended December 31, 2014 ("Form 10-K"), which is accessible on the Securities and Exchange Commission's website at www.sec.gov and on the company's website at www.cohenandsteers.com. These factors are not exhaustive and should be read in conjunction with the other cautionary statements that are included in the company's Form 10-K and other filings with the Securities and Exchange Commission. The company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

Cohen & Steers, Inc. and Subsidiaries


Condensed Consolidated Statements of Operations (Unaudited)


For the Periods


(in thousands, except per share data)










Three Months Ended

% Change From

March 31,

2015

December 31,

2014

March 31,

2014

December 31,

2014

March 31,

2014

Revenue











  Investment advisory and administration fees

$

77,752

$

76,063

$

67,564



  Distribution and service fees

3,906

3,715

3,470



  Portfolio consulting and other

2,157

2,064

1,801



     Total revenue

83,815

81,842

72,835

2.4%

15.1%

Expenses








  Employee compensation and benefits

25,983

26,142

24,035



  Distribution and service fees

9,251

8,862

8,304



  General and administrative

12,463

12,866

11,093



  Depreciation and amortization

1,052

1,169

1,262



  Amortization of deferred commissions

517

453

545



     Total expenses

49,266

49,492

45,239

(0.5%)

8.9%

 Operating income

34,549

32,350

27,596

6.8 %

25.2%

Non-operating income








  Interest and dividend income—net

299

617

239



  (Loss) gain from trading investments—net

(451)

(2,622)

983



  Gain from available-for-sale investments—net

100

153

1,076



  Equity in (losses) earnings of affiliates

(1,081)

(2,748)

935



  Other (losses) income

(419)

59

(52)



    Total non-operating (loss) income

(1,552)

(4,541)

3,181

*

*

Income before provision for income taxes

32,997

27,809

30,777

18.7%

7.2%

Provision for income taxes

12,226

12,636

11,177



Net income

20,771

15,173

19,600

36.9%

6.0%

      Less: Net loss (income) attributable to

      redeemable noncontrolling interest

45

525

(155)



Net income attributable to common stockholders

$

20,816

$

15,698

$

19,445

32.6%

7.1%










Earnings per share attributable to common

 stockholders








  Basic

$

0.46

$

0.35

$

0.44

31.5%

5.6%

  Diluted

$

0.45

$

0.34

$

0.43

32.3%

5.9%










Dividends declared per share








  Quarterly

$

0.25

$

0.22

$

0.22

13.6%

13.6%

  Special

$

—

$

1.00

$

—

*

*










Weighted average shares outstanding








  Basic

45,241

44,852

44,633



  Diluted

45,980

45,866

45,483













* Not meaningful








Cohen & Steers, Inc. and Subsidiaries

Assets Under Management (Unaudited)

By Investment Vehicle

For the Periods

(in millions)

Three Months Ended

% Change From

March 31,

2015

December 31,

2014

March 31,

2014

December 31,

2014

March 31,

2014

Institutional Accounts








Assets under management, beginning of period

$

26,201

$

23,941

$

22,926



    Inflows

617

1,077

432



    Outflows

(1,235)

(1,345)

(652)



    Net outflows

(618)

(268)

(220)



    Market appreciation

1,121

2,528

1,773



    Total increase

503

2,260

1,553



Assets under management, end of period

$

26,704

$

26,201

$

24,479

1.9%

9.1%

Percentage of total assets under management

48.8%

49.3%

49.9%



Average assets under management for period

$

27,080

$

25,589

$

23,858

5.8%

13.5%










Open-end Mutual Funds








Assets under management, beginning of period

$

17,131

$

16,116

$

14,016



    Inflows

1,642

1,368

1,523



    Outflows

(1,475)

(1,894)

(1,419)



    Net inflows (outflows)

167

(526)

104



    Market appreciation

764

1,541

1,028



    Total increase

931

1,015

1,132



Assets under management, end of period

$

18,062

$

17,131

$

15,148

5.4%

19.2%

Percentage of total assets under management

33.0%

32.2%

30.9%



Average assets under management for period

$

17,963

$

16,986

$

14,607

5.8%

23.0%










Closed-end Funds








Assets under management, beginning of period

$

9,805

$

9,638

$

8,965



    Inflows

—

—

—



    Outflows

—

—

—



    Net inflows

—

—

—



    Market appreciation

95

167

439



    Total increase

95

167

439



Assets under management, end of period

$

9,900

$

9,805

$

9,404

1.0%

5.3%

Percentage of total assets under management

18.1%

18.5%

19.2%



Average assets under management for period

$

9,978

$

9,830

$

9,241

1.5%

8.0%










Total








Assets under management, beginning of period

$

53,137

$

49,695

$

45,907



    Inflows

2,259

2,445

1,955



    Outflows

(2,710)

(3,239)

(2,071)



    Net outflows

(451)

(794)

(116)



    Market appreciation

1,980

4,236

3,240



    Total increase

1,529

3,442

3,124



Assets under management, end of period

$

54,666

$

53,137

$

49,031

2.9%

11.5%

Average assets under management for period

$

55,021

$

52,405

$

47,706

5.0%

15.3%

Cohen & Steers, Inc. and Subsidiaries








Assets Under Management - Institutional Accounts (Unaudited)








By Account Type








For the Periods








(in millions)









Three Months Ended

% Change From

March 31,

2015

December 31,

2014

March 31,

2014

December 31,

2014

March 31,

2014










Subadvisory








Assets under management, beginning of period

$

18,857

$

17,092

$

16,693



    Inflows

419

969

311



    Outflows

(848)

(1,138)

(487)



    Net outflows

(429)

(169)

(176)



    Market appreciation

814

1,934

1,407



    Total increase

385

1,765

1,231



Assets under management, end of period

$

19,242

$

18,857

$

17,924

2.0%

7.4%

Percentage of institutional assets under management

72.1%

72.0%

73.2%



Average assets under management for period

$

19,526

$

18,371

$

17,480

6.3%

11.7%










Advisory








Assets under management, beginning of period

$

7,344

$

6,849

$

6,233



    Inflows

198

108

121



    Outflows

(387)

(207)

(165)



    Net outflows

(189)

(99)

(44)



    Market appreciation

307

594

366



    Total increase

118

495

322



Assets under management, end of period

$

7,462

$

7,344

$

6,555

1.6%

13.8%

Percentage of institutional assets under management

27.9%

28.0%

26.8%



Average assets under management for period

$

7,554

$

7,218

$

6,378

4.7%

18.4%










Total Institutional Accounts








Assets under management, beginning of period

$

26,201

$

23,941

$

22,926



    Inflows

617

1,077

432



    Outflows

(1,235)

(1,345)

(652)



    Net outflows

(618)

(268)

(220)



    Market appreciation

1,121

2,528

1,773



    Total increase

503

2,260

1,553



Assets under management, end of period

$

26,704

$

26,201

$

24,479

1.9%

9.1%

Average assets under management for period

$

27,080

$

25,589

$

23,858

5.8%

13.5%

Cohen & Steers, Inc. and Subsidiaries








Assets Under Management (Unaudited)








By Investment Strategy








For the Periods








(in millions)









Three Months Ended

% Change From

March 31,

2015

December 31,

2014

March 31,

2014

December 31,

2014

March 31,

2014

U.S. Real Estate








Assets under management, beginning of period

$

28,357

$

26,226

$

23,116



    Inflows

813

695

756



    Outflows

(1,265)

(2,183)

(829)



    Net outflows

(452)

(1,488)

(73)



    Market appreciation

1,384

3,619

2,208



    Total increase

932

2,131

2,135



Assets under management, end of period

$

29,289

$

28,357

$

25,251

3.3%

16.0%

Percentage of total assets under management

53.6%

53.4%

51.5%



Average assets under management for period

$

29,627

$

27,998

$

24,362

5.8%

21.6%










Global/International Real Estate








Assets under management, beginning of period

$

10,184

$

9,677

$

9,498



    Inflows

264

408

485



    Outflows

(744)

(583)

(664)



    Net outflows

(480)

(175)

(179)



    Market appreciation

485

682

402



    Total increase

5

507

223



Assets under management, end of period

$

10,189

$

10,184

$

9,721

0.0%

4.8%

Percentage of total assets under management

18.6%

19.2%

19.8%



Average assets under management for period

$

10,429

$

10,021

$

9,595

4.1%

8.7%










Preferred Securities








Assets under management, beginning of period

$

6,342

$

5,766

$

4,722



    Inflows

684

783

358



    Outflows

(469)

(271)

(180)



    Net inflows

215

512

178



    Market appreciation

175

64

226



    Total increase

390

576

404



Assets under management, end of period

$

6,732

$

6,342

$

5,126

6.1%

31.3%

Percentage of total assets under management

12.3%

11.9%

10.5%



Average assets under management for period

$

6,597

$

6,150

$

4,946

7.3%

33.4%










Global Listed Infrastructure








Assets under management, beginning of period

$

5,697

$

5,611

$

4,714



    Inflows

208

251

302



    Outflows

(157)

(84)

(224)



    Net inflows

51

167

78



    Market (depreciation) appreciation

(47)

(81)

280



    Total increase

4

86

358



Assets under management, end of period

$

5,701

$

5,697

$

5,072

 

0.1%

12.4%

Percentage of total assets under management

10.4%

10.7%

10.3%



Average assets under management for period

$

5,685

$

5,701

$

5,011

(0.3%)

13.5%










Large Cap Value








Assets under management, beginning of period

$

1,288

$

1,260

$

2,907



    Inflows

99

45

9



    Outflows

(28)

(57)

(155)



    Net inflows (outflows)

71

(12)

(146)



    Market appreciation

15

40

96



    Total increase (decrease)

86

28

(50)



Assets under management, end of period

$

1,374

$

1,288

$

2,857

6.7%

(51.9%)

Percentage of total assets under management

2.5%

2.4%

5.8%



Average assets under management for period

$

1,358

$

1,251

$

2,822

8.6%

(51.9%)










Other








Assets under management, beginning of period

$

1,269

$

1,155

$

950



    Inflows

191

263

45



    Outflows

(47)

(61)

(19)



    Net inflows

144

202

26



    Market (depreciation) appreciation

(32)

(88)

28



    Total increase

112

114

54



Assets under management, end of period

$

1,381

$

1,269

$

1,004

8.8%

37.5%

Percentage of total assets under management

2.5%

2.4%

2.0%



Average assets under management for period

$

1,325

$

1,284

$

970

3.2%

36.6%










Total








Assets under management, beginning of period

$

53,137

$

49,695

$

45,907



    Inflows

2,259

2,445

1,955



    Outflows

(2,710)

(3,239)

(2,071)



    Net outflows

(451)

(794)

(116)



    Market appreciation

1,980

4,236

3,240



    Total increase

1,529

3,442

3,124



 

Assets under management, end of period

$

54,666

$

53,137

$

49,031

2.9%

11.5%

Average assets under management for period

$

55,021

$

52,405

$

47,706

5.0%

15.3%

SOURCE Cohen & Steers, Inc.

Related Links

http://www.cohenandsteers.com