Cohen & Steers Reports Fourth Quarter and Full Year 2009 Results

Jan 26, 2010, 16:30 ET from Cohen & Steers, Inc.

NEW YORK, Jan. 26 /PRNewswire-FirstCall/ -- Cohen & Steers, Inc. (NYSE: CNS) reported income from continuing operations attributable to common shareholders of $11.6 million, or $0.27 per share (diluted and basic), for the quarter ended December 31, 2009, compared with a loss from continuing operations attributable to common shareholders of $2.1 million, or $0.05 per share (diluted and basic) for the quarter ended December 31, 2008. Excluding the previously disclosed charges of $0.09 per share resulting primarily from the impairment of intangible assets and restructuring costs, earnings per share for the quarter ended December 31, 2008 would have been $0.04 per share. Total revenue for the fourth quarter of 2009 was $39.9 million, an increase of 38.0% from $28.9 million for the fourth quarter of 2008.

For the year ended December 31, 2009, the company recorded a loss from continuing operations attributable to common shareholders of $1.7 million, or $0.04 per share (diluted and basic), compared with income from continuing operations attributable to common shareholders of $25.1 million, or $0.60 per share (diluted and basic) for 2008. Excluding the previously disclosed charges of $0.69 per share resulting from the impairment of available-for-sale securities, earnings per share for the year ended December 31, 2009 would have been $0.65. Excluding the previously disclosed charges of approximately $0.32 per share due primarily to the impairments of intangible assets and available-for-sale securities, earnings per share for the year ended December 31, 2008 would have been $0.92. Total revenue was $123.6 million for the year ended December 31, 2009, a decrease of 33.5% from $185.8 million for 2008.

Assets Under Management

Assets under management were $24.8 billion as of December 31, 2009, an increase of 10.2% from $22.5 billion at September 30, 2009 and an increase of 64.1% from $15.1 billion at December 31, 2008. The increase from September 30, 2009 was due to market appreciation of $1.4 billion and net inflows of $894 million. The increase from December 31, 2008 was due to market appreciation of $5.7 billion and net inflows of $4.0 billion. Average assets under management were $23.0 billion for the quarter ended December 31, 2009, an increase of 18.1% from $19.5 billion for the quarter ended September 30, 2009 and an increase of 46.1% from $15.7 billion for the quarter ended December 31, 2008.

Open-end mutual funds had net inflows of $46 million during the quarter ended December 31, 2009, compared with net inflows of $386 million during the quarter ended September 30, 2009 and net outflows of $473 million during the quarter ended December 31, 2008. Average assets under management were $5.8 billion for the quarter ended December 31, 2009, an increase of 13.8% from $5.1 billion for the quarter ended September 30, 2009 and an increase of 30.8% from $4.5 billion for the quarter ended December 31, 2008. Open-end mutual funds had net inflows of $517 million during the year ended December 31, 2009, compared with net outflows of $1.2 billion during the year ended December 31, 2008. Average assets under management were $4.5 billion for the year ended December 31, 2009, a decrease of 36.1% from $7.1 billion for the year ended December 31, 2008.

Closed-end mutual funds had net inflows of $233 million during the year ended December 31, 2009, compared with net outflows of $2.1 billion attributable to the redemption of auction market preferred securities during the year ended December 31, 2008. Average assets under management were $4.4 billion for the year ended December 31, 2009, a decrease of 48.1% from $8.5 billion for the year ended December 31, 2008. On December 18, 2009, Cohen & Steers Advantage Income Realty Fund, Inc. and Cohen & Steers Premium Income Realty Fund, Inc. were merged into Cohen & Steers Quality Income Realty Fund, Inc.

Institutional separate accounts had net inflows of $848 million during the quarter ended December 31, 2009, compared with net inflows of $1.2 billion during the quarter ended September 30, 2009 and $210 million during the quarter ended December 31, 2008. Average assets under management for institutional separate accounts were $11.8 billion for the quarter ended December 31, 2009, an increase of 23.2% from $9.6 billion for the quarter ended September 30, 2009 and an increase of 88.0% from $6.3 billion for the quarter ended December 31, 2008. Institutional separate accounts had net inflows of $3.2 billion during the year ended December 31, 2009, compared with net outflows of $59 million during the year ended December 31, 2008. Average assets under management were $8.5 billion for the year ended December 31, 2009, a decrease of 8.6% from $9.3 billion for the year ended December 31, 2008.

"Our commitment to staying the course and preserving our infrastructure, our global investment teams and our marketing and client service groups, has allowed us to fully benefit from the improved market conditions," said Robert Steers, co-chairman and co-chief executive officer of Cohen & Steers. "Virtually all of our strategies have outperformed their benchmarks for the year and our institutional business continues to attract substantial relationships."

Results From Continuing Operations

Total revenue was $39.9 million for the three months ended December 31, 2009, an increase of 38.0% from $28.9 million for the three months ended December 31, 2008. Operating expenses were $28.7 million for the three months ended December 31, 2009, a decrease of 7.6% from $31.0 million for the three months ended December 31, 2008. Operating income was $11.2 million for the three months ended December 31, 2009, compared with an operating loss of $2.1 million for the three months ended December 31, 2008. Excluding impairment and restructuring costs of $5.6 million, operating income would have been $3.4 million for the three months ended December 31, 2008. Non-operating income was $4.1 million for the three months ended December 31, 2009, compared with a non-operating loss of $783,000 for the three months ended December 31, 2008. Excluding impairment charges on available-for-sale securities of $270,000, the non-operating loss would have been $513,000 for the three months ended December 31, 2008. Pretax income was $15.3 million for the three months ended December 31, 2009, compared with pretax loss of $2.9 million for the fourth quarter of 2008. Excluding the aforementioned charges of approximately $5.9 million, pretax income would have been $2.9 million for the three months ended December 31, 2008.

Total revenue was $123.6 million for the year ended December 31, 2009, a decrease of 33.5% from $185.8 million for the year ended December 31, 2008. Operating expenses were $106.0 million for the year ended December 31, 2009, a decrease of 20.0% from $132.5 million for the year ended December 31, 2008. Operating income was $17.6 million for the year ended December 31, 2009, a decrease of 67.0% from $53.3 million for the year ended December 31, 2008. Excluding impairment and restructuring costs of $5.6 million, operating income would have been $58.9 million for the year ended December 31, 2008. Non-operating loss was $13.4 million for the year ended December 31, 2009, an increase of 80.8% from $7.4 million non-operating loss for the year ended December 31, 2008. The 2009 and 2008 results included the aforementioned impairment charges of $32.2 million and $10.8 million, respectively. Excluding these items, non-operating income would have been $18.8 million and $3.3 million for the years ended December 31, 2009 and 2008, respectively. Pretax income was $4.2 million for the year ended December 31, 2009, a decrease of 90.9% from $45.9 million for the year ended December 31, 2008. Excluding the aforementioned items, pretax income would have been $36.4 million and $62.2 million for the years ended December 31, 2009 and 2008, respectively.

"This past quarter's results demonstrate the leveragability of our business," said Martin Cohen, co-chairman and co-chief executive officer of Cohen & Steers. "While our assets under management and operating margins are not back to pre-financial crisis levels, we are seeing measured improvement."

Balance Sheet Information

As of December 31, 2009, cash, cash equivalents, marketable securities available-for-sale and seed capital investments (excluding cash and marketable securities attributable to the consolidation of the company's investment in its long-short global real estate fund) were $210 million. As of December 31, 2009, stockholders' equity was $285 million and the company had no long-term or short-term debt.

Conference Call Information

Cohen & Steers will hold a conference call tomorrow, January 27, 2010 at 11:00 a.m. (ET) to discuss the company's fourth quarter and full year results. Investors and analysts can access the live conference call by dialing (800) 769-9015 (domestic) or (212) 231-2900/2905 (international); passcode: 21455819. 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 January 27, 2010 and can be accessed at (800) 633-8284 (domestic) or (402) 977-9140 (international); passcode: 21455819. Internet access to the Web cast, which includes audio (listen-only), will be available on the company's Web site at cohenandsteers.com under "Corporate Info."  The Web cast will be archived on the Web site for two weeks.

About Cohen & Steers, Inc.

Cohen & Steers is a manager of income-oriented equity portfolios specializing in U.S. and international real estate securities, large cap value stocks, listed infrastructure and utilities, and preferred securities. The company also manages alternative investment strategies such as hedged real estate securities portfolios and private real estate multimanager strategies for qualified investors. Headquartered in New York City, with offices in London, Brussels, Hong Kong and Seattle, Cohen & Steers serves individual and institutional investors through a broad range of investment vehicles.

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 and Section 21E of the Securities Exchange Act of 1934, which reflect the company's current views with respect to, among other things, its 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 statements. The company believes that these factors include, but are not limited to, those described in the "Risk Factors" section of the company's Annual Report on Form 10-K for the year ended December 31, 2008, which is accessible on the Securities and Exchange Commission's Web site at sec.gov and on the company's Web site at www.cohenandsteers.com. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release. 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 Income (Unaudited)

For the Periods Ended

(in thousands, except per share data)

Three Months Ended

% Change From

December 31,

2009

September 30,

2009

December 31,

2008

September 30, 2009

December 31, 2008

Revenue

Investment advisory and administration fees

$           36,567 

$             30,929 

$           25,768 

Distribution and service fees

2,224 

2,019 

2,278 

Portfolio consulting and other

1,080 

879 

850 

Total revenue

39,871 

33,827 

28,896 

17.9%

38.0%

Expenses

Employee compensation and benefits

14,915 

15,956 

12,150 

Restructuring and impairment

5,586 

Distribution and service fees

4,629 

3,837 

3,736 

General and administrative

7,860 

6,990 

7,971 

Depreciation and amortization

1,101 

1,072 

1,074 

Amortization, deferred commissions

178 

157 

519 

Total expenses

28,683 

28,012 

31,036 

2.4%

(7.6%)

Operating income (loss)

11,188 

5,815 

(2,140)

92.4%

*

Non-operating income  

Interest and dividend income - net

444 

100 

1,094 

Gain (loss) from trading securities - net

2,413 

3,071 

(221)

Gain (loss) from available-for-sale securities - net

996 

455 

(1,891)

Other

227 

586 

235 

        Total non-operating income (loss)

4,080 

4,212 

(783)

(3.1%)

*

Income (loss) from continuing operations before  

   provision for income taxes

15,268 

10,027 

(2,923)

52.3%

*

Provision (benefit) for income taxes

3,256 

2,065 

(844)

Income (loss) from continuing operations

12,012 

7,962 

(2,079)

50.9%

*

Loss from discontinued operations, net of tax

(4,880)

-   

*

Net income (loss)

12,012 

7,962 

(6,959)

50.9%

*

   Less: Net income attributable to redeemable noncontrolling interest

(367)

(417)

Net income (loss) attributable to common shareholders

$           11,645 

$               7,545 

$            (6,959)

54.3%

*

Earnings per share - Basic:

Income (loss) from continuing operations attributable to

     common shareholders

$               0.27 

$                 0.18 

$              (0.05)

54.3%

*

Loss from discontinued operations, net of tax,

      attributable to common shareholders

$                   - 

$                     - 

$              (0.12)

-   

*

 Net income (loss) attributable to common shareholders

$               0.27 

$                 0.18 

$              (0.17)

54.3%

*

Earnings per share - Diluted:

Income (loss) from continuing operations attributable to

     common shareholders

$               0.27 

$                 0.18 

$              (0.05)

54.0%

*

Loss from discontinued operations, net of tax,

      attributable to common shareholders

$                   - 

$                     - 

$              (0.12)

-   

*

 Net income (loss) attributable to common shareholders

$               0.27 

$                 0.18 

$              (0.17)

54.0%

*

Weighted average shares outstanding

     Basic

42,400 

42,396 

41,813 

     Diluted

42,737 

42,633 

41,813 

* Not meaningful

Cohen & Steers, Inc. and Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)

For the Periods Ended

(in thousands, except per share data)

Year Ended

December 31,

2009

December 31,

2008

% Change

Revenue

Investment advisory and administration fees

$         112,566 

$         163,870 

Distribution and service fees

7,545 

17,055 

Portfolio consulting and other

3,442 

4,905 

Total revenue

123,553 

185,830 

(33.5%)

Expenses

Employee compensation and benefits

57,962 

62,549 

Restructuring and impairment

5,586 

Distribution and service fees

14,668 

24,119 

General and administrative

28,350 

32,242 

Depreciation and amortization

4,221 

3,885 

Amortization, deferred commissions

789 

4,156 

Total expenses

105,990 

132,537 

(20.0%)

Operating income

17,563 

53,293 

(67.0%)

Non-operating income  

Interest and dividend income - net

1,870 

5,910 

Gain (loss) from trading securities - net

14,055 

(492)

Loss from available-for-sale securities - net

(30,245)

(13,476)

Other

921 

645 

        Total non-operating loss

(13,399)

(7,413)

80.8%

Income from continuing operations before  

   provision for income taxes

4,164 

45,880 

(90.9%)

Provision for income taxes

4,490 

20,822 

(Loss) income from continuing operations

(326)

25,058 

*

Loss from discontinued operations, net of tax

(10)

(6,997)

(99.9%)

Net (loss) income  

(336)

18,061 

*

   Less: Net income attributable to redeemable noncontrolling interest

(1,374)

Net (loss) income attributable to common shareholders

$            (1,710)

$           18,061 

*

Earnings per share - Basic:

(Loss) income from continuing operations attributable to

     common shareholders

$              (0.04)

$               0.60 

*

Loss from discontinued operations, net of tax,

      attributable to common shareholders

$              (0.00)

$              (0.17)

(99.9%)

 Net (loss) income attributable to common shareholders

$              (0.04)

$               0.43 

*

Earnings per share - Diluted:

(Loss) income from continuing operations attributable to

     common shareholders

$              (0.04)

$               0.60 

*

Loss from discontinued operations, net of tax,

      attributable to common shareholders

$              (0.00)

$              (0.17)

(99.9%)

Net (loss) income attributable to common shareholders

$              (0.04)

$               0.43 

*

Weighted average shares outstanding

     Basic

42,339 

41,864 

     Diluted

42,339 

42,094 

* Not meaningful

Cohen & Steers, Inc. and Subsidiaries

Assets Under Management (Unaudited)

For the Periods Ended

(in millions)

Three Months Ended

% Change From

December 31,

2009

September 30,

2009

December 31,

2008

September 30, 2009

December 31, 2008

Open-End Mutual Funds

Assets under management, beginning of period

$             5,903   

$               4,238   

$             6,949   

   Inflows

610   

747   

495   

   Outflows  

(564)  

(361)  

(968)  

   Net inflows (outflows)

46   

386   

(473)  

   Market appreciation (depreciation)

336   

1,279   

(2,196)  

   Total increase (decrease)

382   

1,665   

(2,669)  

Assets under management, end of period

$             6,285   

$               5,903   

$             4,280   

6.5%

46.8%

Average assets under management for period

$             5,827   

$               5,122   

$             4,455   

13.8%

30.8%

Closed-End Mutual Funds

Assets under management, beginning of period

$             5,192   

$               4,213   

$             8,570   

   Inflows

-   

180   

-   

   Outflows  

-   

-   

(2,098)  

   Net inflows (outflows)

-   

180   

(2,098)  

   Market appreciation (depreciation)

354   

799   

(2,194)  

   Total increase (decrease)

354   

979   

(4,292)  

Assets under management, end of period

$             5,546   

$               5,192   

$             4,278   

6.8%

29.6%

Average assets under management for period

$             5,364   

$               4,759   

$             5,006   

12.7%

7.2%

Institutional Separate Accounts

Assets under management, beginning of period

$           11,398   

$               7,869   

$             9,105   

   Inflows

1,406   

1,634   

609   

   Outflows  

(558)  

(449)  

(399)  

   Net inflows

848   

1,185   

210   

   Market appreciation (depreciation)

708   

2,344   

(2,771)  

   Total increase (decrease)

1,556   

3,529   

(2,561)  

Assets under management, end of period

$           12,954   

$             11,398   

$             6,544   

13.7%

98.0%

Average assets under management for period

$           11,805   

$               9,583   

$             6,280   

23.2%

88.0%

Total

Assets under management, beginning of period

$           22,493   

$             16,320   

$           24,624   

   Inflows

2,016   

2,561   

1,104   

   Outflows  

(1,122)  

(810)  

(3,465)  

   Net inflows (outflows)

894   

1,751   

(2,361)  

   Market appreciation (depreciation)

1,398   

4,422   

(7,161)  

   Total increase (decrease)

2,292   

6,173   

(9,522)  

Assets under management, end of period

$           24,785   

$             22,493   

$           15,102   

10.2%

64.1%

Average assets under management for period

$           22,996   

$             19,464   

$           15,741   

18.1%

46.1%

Cohen & Steers, Inc. and Subsidiaries

Assets Under Management (Unaudited)

For the Periods Ended

(in millions)

Year Ended

December 31,

2009

December 31,

2008

% Change

Open-End Mutual Funds

Assets under management, beginning of period

$             4,280 

$             8,900 

   Inflows

2,112 

2,665 

   Outflows  

(1,595)

(3,860)

   Net inflows (outflows)

517 

(1,195)

   Market appreciation (depreciation)

1,488 

(3,425)

   Total increase (decrease)

2,005 

(4,620)

Assets under management, end of period

$             6,285 

$             4,280 

46.8%

Average assets under management for period

$             4,527 

$             7,089 

(36.1%)

Closed-End Mutual Funds

Assets under management, beginning of period

$             4,278 

$           10,274 

   Inflows

628 

   Outflows  

(395)

(2,098)

   Net inflows (outflows)

233 

(2,098)

   Market appreciation (depreciation)

1,035 

(3,898)

   Total increase (decrease)

1,268 

(5,996)

Assets under management, end of period

$             5,546 

$             4,278 

29.6%

Average assets under management for period

$             4,425 

$             8,534 

(48.1%)

Institutional Separate Accounts

Assets under management, beginning of period

$             6,544 

$           10,612 

   Inflows

4,516 

2,016 

   Outflows  

(1,306)

(2,075)

   Net inflows (outflows)

3,210 

(59)

   Market appreciation (depreciation)

3,200 

(4,009)

   Total increase (decrease)

6,410 

(4,068)

Assets under management, end of period

$           12,954 

$             6,544 

98.0%

Average assets under management for period

$             8,491 

$             9,290 

(8.6%)

Total

Assets under management, beginning of period

$           15,102 

$           29,786 

   Inflows

7,256 

4,681 

   Outflows  

(3,296)

(8,033)

   Net inflows (outflows)

3,960 

(3,352)

   Market appreciation (depreciation)

5,723 

(11,332)

   Total increase (decrease)

9,683 

(14,684)

Assets under management, end of period

$           24,785 

$           15,102 

64.1%

Average assets under management for period

$           17,443 

$           24,913 

(30.0%)

Cohen & Steers, Inc. and Subsidiaries

Assets Under Management (Unaudited)

By Investment Category

(in millions)

As of December 31, 2009

As of September 30, 2009

As of December 31, 2008

Open-End Mutual Funds

  U.S. Real Estate

$                        3,750

$                          3,512

$                        2,415

  International Real Estate

2,046

1,960

1,487

  Large Cap Value

197

163

146

  Preferreds

13

15

11

  Listed Infrastructure and Utilities

100

86

68

  Other

179

167

153

Assets under management, end of period

$                        6,285

$                          5,903

$                        4,280

Closed-End Mutual Funds

  U.S. Real Estate

$                        1,818

$                          1,730

$                        1,377

  International Real Estate

175

134

72

  Large Cap Value

264

241

190

  Preferreds

1,186

1,253

1,056

  Listed Infrastructure and Utilities

1,396

1,275

999

  Other

707

559

584

Assets under management, end of period

$                        5,546

$                          5,192

$                        4,278

Institutional Separate Accounts

  U.S. Real Estate

$                        5,016

$                          4,571

$                        3,046

  International Real Estate

4,822

4,143

2,160

  Large Cap Value

1,929

1,831

595

  Preferreds

846

724

508

  Listed Infrastructure and Utilities

119

38

11

  Other

222

91

224

Assets under management, end of period

$                      12,954

$                        11,398

$                        6,544

Total

  U.S. Real Estate

$                      10,584

$                          9,813

$                        6,838

  International Real Estate

7,043

6,237

3,719

  Large Cap Value

2,390

2,235

931

  Preferreds

2,045

1,992

1,575

  Listed Infrastructure and Utilities

1,615

1,399

1,078

  Other

1,108

817

961

Assets under management, end of period

$                      24,785

$                        22,493

$                      15,102

Cohen & Steers, Inc. and Subsidiaries

Other Fee Earning Assets (Unaudited)

(in millions)

As of December 31, 2009

As of September 30, 2009

As of December 31, 2008

Unified Managed Accounts

Other fee earning assets, end of period

$                           447

$                             414

$                           179

Exchange Traded Funds

Other fee earning assets, end of period

$                        1,886

$                          1,676

$                        1,511

Unit Investment Trusts

Other fee earning assets, end of period

$                        1,309

$                          1,298

$                        1,005

Total

Other fee earning assets, end of period

$                        3,642

$                          3,388

$                        2,695

Note: Other fee earning assets are defined as assets for which the company provides investment advice but for which the

company has no discretion to execute trades, and therefore are not included in the company's reported assets under management.

SOURCE Cohen & Steers, Inc.



RELATED LINKS

http://www.cohenandsteers.com