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Cohen & Steers Reports Third Quarter 2007 ResultsAssets Under Management Total $34.7 Billion
NEW YORK, Oct. 24 /PRNewswire-FirstCall/ -- Cohen & Steers, Inc. (NYSE: CNS) reported net income of $15.9 million, or $0.37 per diluted share and $0.38 per basic share, for the quarter ended September 30, 2007, compared with net income of $15.7 million, or $0.39 per share (diluted and basic), for the quarter ended September 30, 2006. Total revenue for the third quarter of 2007 was $69.5 million, an increase of 28.7% from $54.0 million for the third quarter of 2006. The third quarter 2007 results include an after-tax expense of approximately $0.09 per share associated with the payment of an additional compensation agreement entered into in connection with the offering of Cohen & Steers Global Income Builder, Inc., a closed-end mutual fund. After adjusting for this expense, earnings per diluted share would have been $0.46. For the nine months ended September 30, 2007, the company recorded net income of $56.8 million, or $1.33 per diluted share and $1.36 per basic share, compared with a net loss of $13.4 million, or $0.34 per share (diluted and basic), for the 2006 period. After adjusting for the above-mentioned third quarter 2007 item, earnings per diluted share would have been $1.42 for the nine months ended September 2007. The 2006 results included the previously disclosed $1.25 per share after-tax expense associated with the termination of certain fund compensation agreements and a $0.02 per share after-tax gain from the sale of property and equipment. After adjusting for these items, earnings per diluted share would have been $0.89 for the nine months ended September 30, 2006. Total revenue was $215.5 million for the nine months ended September 30, 2007, an increase of 60.9% from $133.9 million for the 2006 period. Assets Under Management Assets under management reached $34.7 billion as of September 30, 2007, an increase of 0.5% from $34.6 billion at June 30, 2007 and an increase of 36.3% from $25.5 billion at September 30, 2006. The increase from June 30, 2007 was due to net inflows of $129 million, primarily from the launch of Cohen & Steers Global Income Builder, Inc., and market appreciation of $34 million. "Our assets remained steady through the quarter despite challenging market conditions," said Martin Cohen, co-chairman and co-chief executive officer of Cohen & Steers. "This demonstrates the diversity of our portfolios and the strength of our distribution channels." The company continues to broaden both its assets under management and client base. As of September 30, 2007, U.S. REIT common stocks comprised 46% of total assets, compared with 65% the prior year, and non-U.S. investors now account for approximately 19% of the assets managed by the company, compared with 7% the prior year. Recent Developments Further diversifying the company's offerings for high-income portfolios, it has introduced two new funds: -- Cohen & Steers Global Income Builder, Inc., a closed-end mutual fund
that capitalizes on all five of the company's dividend-oriented
strategies and employs a covered-call option overlay. This fund raised
$445 million, including the exercise of the underwriter's
overallotment, during the quarter ended September 30, 2007.
Including leverage, the fund will have raised approximately $534
million.
-- Cohen & Steers SICAV Asia Pacific Real Estate Securities Fund, an open-
end mutual fund for non-U.S. investors on October 1, 2007. The fund
seeks income and long-term capital appreciation, investing in shares of
publicly traded Asia Pacific real estate companies.
Asset Management Segment Total revenue for the asset management segment was $64.6 million for the three months ended September 30, 2007, an increase of 46.6% from $44.1 million for the three months ended September 30, 2006. Pretax income was $23.7 million for the three months ended September 30, 2007, compared with $17.2 million for the third quarter of 2006. (The 2007 period includes the aforementioned distribution expense of approximately $6 million.) Assets under management reached $34.7 billion at September 30, 2007, an increase of 36.3% from $25.5 billion at September 30, 2006. The increase was a result of net inflows of $7.8 billion, market appreciation of $379 million and acquired assets of $1.0 billion from the fourth quarter 2006 acquisition of Cohen & Steers Europe S.A. (formerly Houlihan Rovers S.A.). During the quarter ended September 30, 2007, $445 million was raised as a result of the launch of Cohen & Steers Income Builder, Inc., a closed-end mutual fund. The company recorded net outflows of $468 million from open-end mutual funds during the quarter ended September 30, 2007. Inflows of $951 million were more than offset by $1.4 billion in outflows. This was the first quarter since the second quarter of 2005 that the company's open-end mutual funds experienced net outflows. Institutional separate accounts had net inflows of $152 million during the quarter ended September 30, 2007. Inflows of $626 million were partially offset by $474 million in outflows. Investment Banking Segment Total revenue for the investment banking segment was $4.8 million for the quarter ended September 30, 2007, compared with $10.4 million for the quarter ended September 30, 2006. Investment banking revenue was attributable to capital raising and merger advisory assignments. Pretax income was $1.9 million for the three months ended September 30, 2007, compared with $6.2 million for the third quarter of 2006. Through the nine months ended September 30, 2007, investment banking recorded revenue of $23.5 million, surpassing the previous record for full year results of $18.8 million in 2006. Revenue from investment banking activity is dependent on the completion of transactions, the timing of which cannot be predicted. Balance Sheet Information As of September 30, 2007, cash, cash equivalents and marketable securities available for sale were $206 million. As of September 30, 2007, stockholders' equity was $275 million and the company had no long-term or short-term debt. Conference Call Information Cohen & Steers will hold a conference call tomorrow, October 25, 2007 at 11:00 a.m. (ET) to discuss the company's third quarter results. Investors and analysts can access the live conference call by dialing (866) 672-2663 (domestic) or (973) 582-2772 (international); Passcode: 9357852. 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 2:00 p.m. (ET) on October 25, 2007 and can be accessed at (877) 519-4471 (domestic) or (973) 341-3080 (international); Passcode: 9357852. 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 high-income equity portfolios specializing in U.S. REITs, international real estate securities, preferred securities, utilities and large cap value stocks. Headquartered in New York City, with offices in Brussels, Hong Kong, London and Seattle, the company serves individual and institutional investors through a wide range of open-end mutual funds, closed-end mutual funds and institutional separate accounts. 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, 2006, which is accessible on the Securities and Exchange Commission's website at sec.gov and on the company's Web site at 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. Performance Notes Cohen & Steers Global Income Builder, Inc. As with any investment, the price of the fund's shares will fluctuate with market conditions and, at the time of sale, may be worth more or less than the original investment. Shares of closed-end funds often trade at a discount to their net asset value. Please consider the investment objectives, risks, charges and expenses of the fund carefully before investing. This and other information about the fund is included in the fund's prospectus. Call 1-800-330-7848 or visit cohenandsteers.com for a prospectus. Please read the prospectus carefully before investing. Cohen & Steers SICAV Asia Pacific Real Estate Securities Fund. The sale of shares of the fund may be restricted in certain jurisdictions. In particular, shares may not be offered or sold, directly or indirectly in the United States or to U.S. persons, as more fully described in the fund's prospectus.
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
Sept. 30, June 30, Sept. 30, June 30, Sept. 30,
2007 2007 2006 2007 2006
Revenue
Investment advisory
and administration
fees $54,913 $56,186 $38,480
Distribution and
service fees 7,335 7,746 4,015
Portfolio consulting
and other 2,383 2,425 1,080
Investment banking
fees 4,820 2,930 10,375
Total revenue 69,451 69,287 53,950 0.2% 28.7%
Expenses
Employee
compensation and
benefits 20,140 20,094 16,066
Distribution and
service fees 14,330 9,297 5,642
General and
administrative 8,590 8,146 8,159
Depreciation and
amortization 1,767 1,731 1,597
Amortization,
deferred
commissions 3,123 2,755 1,139
Total expenses 47,950 42,023 32,603 14.1% 47.1%
Operating income 21,501 27,264 21,347 (21.1%) 0.7%
Non-operating income
(expense)
Interest and
dividend income 2,882 2,043 686
Gain from sale of
marketable
securities 773 716 834
Loss from sale of
property and
equipment - (2) -
Foreign currency
transaction gain
(loss) 432 1 (8)
Total non-operating
income 4,087 2,758 1,512 48.2% 170.3%
Income before
provision for
income taxes and
equity in earnings
of affiliate 25,588 30,022 22,859 (14.8%) 11.9%
Provision for income
taxes 9,727 11,400 7,648
Equity in earnings
of affiliate - - 513
Net income $15,861 $18,622 $15,724 (14.8%) 0.9%
Earnings per share
Basic $0.38 $0.45 $0.39 (14.9%) (3.7%)
Diluted $0.37 $0.44 $0.39 (14.6%) (3.7%)
Weighted average
shares outstanding
Basic 41,823 41,809 39,927
Diluted 42,564 42,666 40,647
Cohen & Steers, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
For the Periods Ended
(in thousands, except per share data)
Nine Months Ended % Change From
Sept. 30, Sept. 30, Sept. 30,
2007 2006 2006
Revenue
Investment advisory and
administration fees $163,255 $106,784
Distribution and service fees 21,461 10,746
Portfolio consulting and other 7,293 3,179
Investment banking fees 23,496 13,208
Total revenue 215,505 133,917 60.9%
Expenses
Employee compensation and benefits 62,496 38,655
Distribution and service fees 32,894 94,436
General and administrative 24,007 20,557
Depreciation and amortization 5,169 4,771
Amortization, deferred commissions 7,948 2,879
Total expenses 132,514 161,298 (17.8%)
Operating income (loss) 82,991 (27,381) *
Non-operating income (expense)
Interest and dividend income 6,582 2,388
Gain from sale of marketable
securities 1,684 2,023
Gain (loss) from sale of property
and equipment (2) 1,056
Foreign currency transaction gain
(loss) 357 (53)
Total non-operating income 8,621 5,414 59.2%
Income (loss) before provision for
income taxes and equity in earnings
of affiliate 91,612 (21,967) *
Provision for income taxes 34,813 (7,368)
Equity in earnings of affiliate - 1,221
Net income (loss) $56,799 $(13,378) *
Earnings (loss) per share
Basic $1.36 $(0.34) *
Diluted $1.33 $(0.34) *
Weighted average shares outstanding
Basic 41,871 39,865
Diluted 42,685 39,865
* Not meaningful
Cohen & Steers, Inc. and Subsidiaries
Selected Segment Financial Data (Unaudited)
For the Periods Ended
(in thousands)
Three Months Ended % Change From
Sept. 30, June 30, Sept. 30, June 30, Sept. 30,
2007 2007 2006 2007 2006
Asset Management
Total revenue,
including equity in
earnings of affiliate $ 64,631 $66,357 $ 44,088 (2.6%) 46.6%
Total expenses (44,600) (39,135) (28,241) 14.0% 57.9%
Net non-operating
income 3,694 2,388 1,308 54.7% 182.4%
Income before provision
for income taxes $ 23,725 $29,610 $ 17,155 (19.9%) 38.3%
Investment Banking
Total revenue $4,820 $2,930 $ 10,375 64.5% (53.5%)
Total expenses (3,350) (2,888) (4,362) 16.0% (23.2%)
Net non-operating income 393 370 204 6.2% 92.6%
Income before provision
for income taxes $1,863 $412 $6,217 352.2% (70.0%)
Total
Total revenue,
including equity in
earnings of affiliate $ 69,451 $69,287 $ 54,463 0.2% 27.5%
Total expenses (47,950) (42,023) (32,603) 14.1% 47.1%
Net non-operating income 4,087 2,758 1,512 48.2% 170.3%
Income before provision
for income taxes $ 25,588 $30,022 $ 23,372 (14.8%) 9.5%
% Change
Nine Months Ended From
Sept. 30, Sept. 30, Sept. 30,
2007 2006 2006
Asset Management
Total revenue, including equity in
earnings of affiliate $192,009 $121,930 57.5%
Total expenses (119,409) (153,229) (22.1%)
Net non-operating income 7,571 5,014 51.0%
Income (loss) before provision for
income taxes $80,171 $(26,285) *
Investment Banking
Total revenue $23,496 $13,208 77.9%
Total expenses (13,105) (8,069) 62.4%
Net non-operating income 1,050 400 162.5%
Income before provision for income
taxes $11,441 $5,539 106.6%
Total
Total revenue, including equity in
earnings of affiliate $215,505 $135,138 59.5%
Total expenses (132,514) (161,298) (17.8%)
Net non-operating income 8,621 5,414 59.2%
Income (loss) before provision for
income taxes $91,612 $(20,746) *
* Not meaningful
Cohen & Steers, Inc. and Subsidiaries
Assets Under Management (Unaudited)
For the Periods Ended
(in millions)
Three Months Ended % Change From
Sept. 30, June 30, Sept. 30, June 30, Sept. 30,
2007 2007 2006 2007 2006
Closed-End Mutual Funds
Assets under management,
beginning of period $ 11,191 $11,742 $10,098
Inflows 445 - -
Market appreciation
(depreciation) (265) (551) 588
Total increase (decrease) 180 (551) 588
Assets under management,
end of period $ 11,371 $11,191 $10,686 1.6% 6.4%
Open-End Mutual Funds
Assets under management,
beginning of period $ 11,119 $11,480 $ 6,740
Inflows 951 1,601 928
Outflows (1,419) (1,132) (482)
Net inflows (outflows) (468) 469 446
Market appreciation
(depreciation) 191 (830) 599
Total increase (decrease) (277) (361) 1,045
Assets under management,
end of period $ 10,842 $11,119 $ 7,785 (2.5%) 39.3%
Institutional Separate Accounts
Assets under management,
beginning of period $ 12,250 $10,330 $ 6,407
Inflows 626 3,030 254
Outflows (474) (389) (259)
Net inflows (outflows) 152 2,641 (5)
Market appreciation
(depreciation) 108 (721) 594
Total increase 260 1,920 589
Assets under management,
end of period $ 12,510 $12,250 $ 6,996 2.1% 78.8%
Total
Assets under management,
beginning of period $ 34,560 $33,552 $23,245
Inflows 2,022 4,631 1,182
Outflows (1,893) (1,521) (741)
Net inflows 129 3,110 441
Market appreciation
(depreciation) 34 (2,102) 1,781
Total increase 163 1,008 2,222
Assets under management,
end of period (1) $ 34,723 $34,560 $25,467 0.5% 36.3%
(1) As of September 30, 2006, assets under management included $2.6
billion of assets managed by Cohen & Steers Europe S.A. (formerly
Houlihan Rovers S.A.) through sub-advisory and similar arrangements.
Cohen & Steers, Inc. and Subsidiaries
Assets Under Management (Unaudited)
For the Periods Ended
(in millions)
Nine Months Ended % Change From
Sept. 30, Sept. 30, Sept. 30,
2007 2006 2006
Closed-End Mutual Funds
Assets under management,
beginning of period $11,391 $ 9,674
Inflows 647 54
Market appreciation
(depreciation) (667) 958
Total increase (decrease) (20) 1,012
Assets under management,
end of period $11,371 $10,686 6.4%
Open-End Mutual Funds
Assets under management,
beginning of period $9,575 $ 5,591
Inflows 4,918 2,349
Outflows (3,343) (1,463)
Net inflows 1,575 886
Market appreciation
(depreciation) (308) 1,308
Total increase 1,267 2,194
Assets under management,
end of period $10,842 $ 7,785 39.3%
Institutional Separate Accounts
Assets under management,
beginning of period $8,930 $ 5,226
Inflows 5,314 1,124
Outflows (1,422) (635)
Net inflows 3,892 489
Market appreciation
(depreciation) (312) 1,281
Total increase 3,580 1,770
Assets under management,
end of period $12,510 $ 6,996 78.8%
Total
Assets under management,
beginning of period $29,896 $20,491
Inflows 10,879 3,527
Outflows (4,765) (2,098)
Net inflows 6,114 1,429
Market appreciation
(depreciation) (1,287) 3,547
Total increase 4,827 4,976
Assets under management,
end of period (1) $34,723 $25,467 36.3%
(1) As of September 30, 2006, assets under management included $2.6
billion of assets managed by Cohen & Steers Europe S.A. (formerly
Houlihan Rovers S.A.) through sub-advisory and similar arrangements.
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