Pzena Investment Management, Inc.

CIK:0001399249|SEC Filings

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2022

Sep. 30, 2021

Sep. 30, 2022

Sep. 30, 2021

Income Statement [Abstract]

REVENUE

$ 45,244

$ 51,622

$ 146,701

$ 148,370

EXPENSES

Compensation and Benefits Expense

18,630

18,921

58,242

57,091

General and Administrative Expense

8,962

4,304

19,625

11,920

Total Operating Expenses

27,592

23,225

77,867

69,011

Operating Income

17,652

28,397

68,834

79,359

OTHER INCOME/ (EXPENSE)

Interest Income

680

787

153

Dividend Income

310

333

1,421

691

Net Realized and Unrealized (Losses)/ Gains from Investments

(3,288)

(10,017)

3,548

Equity in (Losses)/ Earnings of Affiliates

(2,153)

(16)

(3,865)

1,991

Other (Expense)/ Income

(63)

(82)

(386)

Total Other (Expense)/ Income

(4,514)

374

(12,060)

6,459

Income Before Income Taxes

13,138

28,771

56,774

85,818

Income Tax (Benefit)/ Expense

(2,650)

8,065

5,009

Net Income

15,788

28,703

48,709

80,809

Less: Net Income Attributable to Non-Controlling Interests

13,091

23,635

40,674

66,951

Net Income Attributable to Pzena Investment Management, Inc.

2,697

5,068

8,035

13,858

Supplemental Income Statement Elements [Abstract]

Net Income for Basic Earnings per Share

$ 2,697

$ 5,068

$ 8,035

$ 13,858

Basic Earnings per Share

$ 0.16

$ 0.29

$ 0.47

$ 0.80

Basic Weighted Average Shares Outstanding

^[1]

16,744,993

17,694,559

17,019,499

17,398,518

Net Income for Diluted Earnings per Share

$ 12,782

$ 22,663

$ 39,026

$ 63,571

Diluted Earnings per Share

$ 0.15

$ 0.27

$ 0.45

$ 0.76

Diluted Weighted Average Shares Outstanding

^[1]

86,544,580

84,197,618

86,189,118

84,020,711

Cash Dividends per Share of Class A Common Stock

$ 0.03

$ 0.59

$ 0.31

[1]

The Company issues restricted shares of Class A common stock and restricted Class B units that have non-forfeitable dividend rights. Under the "two-class method," these shares and units are considered participating securities and are required to be included in the computation of basic and diluted earnings per share.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
OPERATING ACTIVITIES
Net Income	$ 15,788	$ 28,703	$ 48,709	$ 80,809
Adjustments to Reconcile Net Income to Cash Provided by Operating Activities:
Depreciation	256	295	832	886
Non-Cash Compensation	3,370	3,975	11,133	11,726
Directors' Share Grants	131	130	699	516
Net Realized and Unrealized (Gains)/ Losses from Investments	3,288	(86)	10,017	(3,548)
Equity in (Earnings)/ Losses of Affiliates	2,153	16	3,865	(1,991)
Non-Cash Performance Fees			(8)
Non-Cash Lease Expense	972	605	2,559	1,792
Foreign Currency Translation Adjustments	(394)	(659)	(1,403)	(788)
Deferred Income Taxes	476	1,313	2,478	4,315
Changes in Operating Assets and Liabilities:
Advisory Fees Receivable	2,405	(85)	6,677	(6,522)
Due from Broker	154	35	49	(450)
Prepaid Expenses and Other Assets	3,520	(69)	4,060	617
Due to Broker	7,538	191	7,620	946
Accounts Payable, Accrued Expenses, and Other Liabilities	6,720	6,386	(1,982)	(3,246)
Lease Liabilities	(172)	(617)	(988)	(1,828)
Purchases of Equity Securities	(4,584)	(12,191)	(43,439)	(44,851)
Proceeds from Equity Securities	1,035	1,147	8,905	16,265
Net Cash Provided by Operating Activities	42,656	29,089	59,783	54,648
INVESTING ACTIVITIES
Purchases of Investments	(891)	(1,817)	(5,134)	(9,427)
Proceeds from Sale of Investments	686	1,765	10,930	10,199
Deconsolidations of sponsored investment funds	(3,541)	(14)	(6,348)	(14)
Payments from/ (to) Related Parties	170	(1)	(1,162)	(769)
Purchases of Property and Equipment	(3,137)	(45)	(5,016)	(57)
Net Cash (Used in)/ Provided by Investing Activities	(6,713)	(112)	(6,730)	(68)
FINANCING ACTIVITIES
Repurchase and Retirement of Class A Common Stock	(189)	(2,527)	(5,315)	(5,964)
Repurchase and Retirement of Class B Units			(64)	(122)
Sale of Shares under Equity Incentive Plan		33	1,772	255
Distributions to Non-Controlling Interests	(12,974)	(19,052)	(71,940)	(62,708)
Contributions from Non-Controlling Interests	3,261	9,589	27,691	23,727
Dividends Paid	(502)	(531)	(10,220)	(5,346)
Net Cash Used In Financing Activities	(10,404)	(12,488)	(58,076)	(50,158)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	25,539	16,489	(5,023)	4,422
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - Beginning of Period	51,627	54,517	82,189	66,584
Net Change in Cash, Cash Equivalents and Restricted Cash	25,539	16,489	(5,023)	4,422
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - End of Period	77,166	71,006	77,166	71,006
Supplementary Cash Flow Information:
Unit Conversion				265
Issuances of Shares under Equity Incentive Plan			6,787	3,822
Income Taxes Paid	140	$ 311	1,742	$ 632
Supplementary Schedule of Non-Cash Investing Transaction Abstract
Decrease in Noncontrolling Interests Due to Deconsolidations of Sponsored Investment Vehicles	$ (11,659)		$ (45,596)

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($)
$ in Thousands

Sep. 30, 2022

Dec. 31, 2021

ASSETS

Cash and Cash Equivalents ($8,043 and $1,030)

^[1]

$ 74,951

$ 81,133

Restricted Cash

2,215

1,056

Due from Broker

Advisory Fees Receivable

34,450

41,127

Investments ($25,268 and $27,483)

^[1]

70,991

95,506

Receivable from Related Parties

5,033

3,871

Other Receivables ($295 and $40)

^[1]

5,458

265

Prepaid Expenses and Other Assets

1,533

1,700

Right-of-use Assets

54,339

10,014

Deferred Tax Asset

22,190

25,886

Property and Equipment, Net of Accumulated Depreciation of $7,887 and $7,086, respectively

7,871

3,687

TOTAL ASSETS

279,034

264,300

Liabilities:

Accounts Payable and Accrued Expenses ($0and $62)

^[1]

42,209

44,167

Due to Broker ($7,675 and $0)

^[1]

7,601

Securities Sold Short, at Fair Value

231

237

Liability to Selling and Converting Shareholders

24,679

Lease Liabilities

65,224

10,323

Deferred Compensation Liability

4,894

6,840

TOTAL LIABILITIES

144,838

86,246

Commitments and Contingencies (see Note 12)

Equity:

Preferred Stock (Par Value $0.01; 200,000,000 Shares Authorized; None Outstanding)

Additional Paid-In Capital

3,914

3,989

Retained Earnings

36,235

38,420

Accumulated Other Comprehensive (Loss)/ Income

(271)

Total Pzena Investment Management, Inc.'s Equity

40,044

42,588

Non-Controlling Interests

94,152

135,466

TOTAL EQUITY

134,196

178,054

TOTAL LIABILITIES AND EQUITY

279,034

264,300

Common Class A

Equity:

Common Stock

$ 166

$ 172

[1]

Asset and liability amounts in parentheses represent the aggregated balances at September 30, 2022 and December 31, 2021 attributable to Pzena U.S. Best Ideas (GP), LLC and Pzena Global Best Ideas (GP), LLC, which were variable interest entities as of September 30, 2022 and December 31, 2021. Asset and liability amounts in parentheses at September 30, 2022 are also attributable to Pzena 320 Fund (GP), LLC and Pzena 320 Fund, LP. Asset and liability amounts in parentheses at December 31, 2021 are also attributable to Pzena Global Focus Value Fund.