Virtus Investment Partners, Inc. · NYSE:VRTS
Virtus Investment Partners — Q4 2014 Earnings Presentation
29 slides from Virtus Investment Partners's earnings presentation, Jan 29, 2015
Slide 1: Fourth Quarter and Full Year 2014 Earnings Presentation
Fourth Quarter and Full Year 2014 Earnings Presentation January 29, 2015 George R. Aylward President and Chief Executive Officer Michael A. Angerthal Executive Vice President and Chief Financial Officer
Slide 2: Important Disclosures
Important Disclosures This presentation contains statements that are, or may be considered to be, forward-looking statements. All statements that are not historical facts, including statements about our beliefs or expectations, are “forward-looking statements” within the meaning of The Private Secur
Slide 3: Agenda
Agenda Overview of Fourth Quarter and Full Year Fourth Quarter Results Closing Remarks Q & A Session Page 3
Slide 4: Overview of Fourth Quarter and Full Year
Overview of Fourth Quarter and Full Year Page 4
Slide 5: Overview of Fourth Quarter and Full Year
Overview of Fourth Quarter and Full Year Assets and Flows Assets under management 1 of $56.7 billion, increased 1% over prior year Fourth quarter total sales and fund sales of $3.4 billion and $2.8 billion, compared with third quarter of $3.5 billion and $3.0 billion, respectively Fourth quart
Slide 6: Overview of Fourth Quarter and Full Year
Overview of Fourth Quarter and Full Year Capital Activities Repurchased $14.0 million of shares in the quarter; highest quarterly level Returned $61.7 million to shareholders in 2014 through share buybacks and a quarterly cash dividend, an increase of 127% over prior year Cash and investments
Slide 7: Fourth Quarter Results
Fourth Quarter Results Page 7
Slide 8: Assets Under Management
Assets Under Management Quarterly Trends Commentary Long-Term Cash Management $61.4 $58.0 $60.9 Trend reflects impact of net flows and $57.7 $56.7 $59.9 $59.5 market performance $56.2 $56.5 Assets1 increased $0.5 billion or 1% from prior year − Reflects market appreciation offset by net outflows,
Slide 9: Asset Flows
Asset Flows Inflows/(Outflows) Commentary $21.3 Flows reflective of market trends, product $15.2 breadth and investment performance $4.6 $4.2 $4.0 $3.5 $3.4 Total sales of $3.4 billion, compared with $3.5 billion in prior quarter Mutual fund flows by asset class: Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 TY
Slide 10: Operating Income, as Adjusted
Operating Income, as Adjusted Quarterly Results Total Year Commentary $162.8 Profitability driven by net flows, market performance and leveragability of the $131.0 business $44.8 $42.7 $38.8 Increase of $4.4 million or 11% from $38.3 $36.6 prior year reflects revenue growth and margin expansion
Slide 11: Investment Management Fees
Investment Management Fees Quarterly Results Total Year Commentary $300.7 Investment management fees reflect $260.6 changes in average assets and net fee rate $79.0 Fees increased $4.2 million, or 6% over $74.5 $75.4 $71.2 $71.8 prior year due higher open and closed end fund average assets Seque
Slide 12: Employment Expenses
Employment Expenses Quarterly Results Total Year Commentary Trend reflects growth of business and $139.8 variable incentive plans $131.8 $129.6 $138.4 Decrease of $1.1 million sequentially primarily attributable to lower variable $35.0 $35.5 $35.2 $34.1 incentive compensation $33.5 $34.5 $34.6 $33
Slide 13: Other Operating Expenses
Other Operating Expenses Quarterly Results Total Year Commentary Results reflect timing of product, $46.5 distribution, and operational initiatives $38.3 $44.4 Increase of $1.1 million or 10% over $13.1 $37.8 prior year reflects portfolio management $11.3 $11.6 $10.5 $10.5 and sales activities and
Slide 14: Capital Position
Capital Position Select Balance Sheet Items Commentary 12/31/13 3/31/14 6/30/14 9/30/14 12/31/14 Cash and cash equivalents $271 $235 $170 $173 $203 Strong capital position reflects cash generated from the business and capital Seed capital investments 1 $124 $124 $224 $239 $238 2 $4 $29 $29 $29 $29 a
Slide 15: Appendix
“INVESTMENT PARTNERS <I Appendix Page 15
Slide 16: GAAP Income Statement
GAAP Income Statement Quarterly Trend and Year-to-Date Q4:13 Q1:14 Q2:14 Q3:14 Q4:14 TY:13 TY:14 Revenues Investment management fees $71,186 $71,792 $74,537 $78,960 $75,374 $260,557 $300,663 Distribution and service fees 21,958 22,438 23,940 23,671 21,901 78,965 91,950 Administration and transfer ag
Slide 17: GAAP Income Statement
GAAP Income Statement Quarterly Trend and Year-to-Date Q4:13 Q1:14 Q2:14 Q3:14 Q4:14 TY:13 TY:14 Other Income (Expense) Realized and unrealized gain (loss) on investments, net 463 1,846 905 (1,039) (798) 2,350 914 Realized and unrealized gain (loss) on investments of 5,975 36 6,444 (5,330) (5,798) 3
Slide 18: Schedule of Non-GAAP Information
Schedule of Non-GAAP Information Quarterly Trend and Year-to-Date Q4:13 Q1:14 Q2:14 Q3:14 Q4:14 TY:13 TY:14 Revenues, GAAP basis $106,498 $107,871 $112,749 $117,841 $112,137 $389,215 $450,598 Less: Distribution and administration expenses 26,653 27,737 29,646 29,180 27,526 97,786 114,089 Consolidate
Slide 19: Condensed Balance Sheet
Condensed Balance Sheet Quarter-end Trend 12/31/13 3/31/14 6/30/14 9/30/14 12/31/14 Assets Cash and cash equivalents $271,014 $234,795 $170,367 $172,709 $202,847 Cash of consolidated sponsored investment products 531 2,543 361 1,055 457 Cash pledged or on deposit of consolidated sponsored - - 11,958
Slide 20: Condensed Balance Sheet
Condensed Balance Sheet Quarter-end Trend 12/31/13 3/31/14 6/30/14 9/30/14 12/31/14 Liabilities and Equity Accrued compensation and benefits $53,140 $18,349 $29,784 $42,924 $54,815 Accounts payable and accrued liabilities 29,912 29,169 33,131 33,389 31,627 Dividends payable - - 4,179 4,229 4,270 Oth
Slide 21: Schedule of Marketable Securities
Schedule of Marketable Securities Market Q4:14 Value at Mark-to- Investment Benchmark Index 12/31/2014 Market Investments - Seed Capital: Emerging Markets Equity Income MSCI Emerging Markets Index $5.3 ($0.3) International Small Cap SMA MSCI AC World Ex U.S. Small Cap Index 4.7 (0.5) Portable Yield
Slide 22: AUM and Average Net Management Fees Earned
AUM and Average Net Management Fees Earned Quarterly Trend and Year-to-Date: By Product Q4:13 Q1:14 Q2:14 Q3:14 Q4:14 TY:13 TY:14 By Product (period end) Mutual Funds – Long-Term Open-End $36,367.7 $37,347.0 $39,819.1 $39,838.8 $36,292.3 $36,367.7 $36,292.3 Mutual Funds – Closed-End 6,499.6 6,690.7
Slide 23: Assets Under Management
Assets Under Management Quarterly Trend and Year-to-Date: All Product Flows and AUM By Asset Class Q4:13 Q1:14 Q2:14 Q3:14 Q4:14 TY:13 TY:14 All Product Flows Beginning balance $55,007.0 $57,739.6 $58,011.2 $61,394.3 $60,877.6 $45,537.0 $57,739.6 Inflows 4,619.7 4,249.2 4,018.3 3,514.3 3,429.8 21,32
Slide 24: Assets Under Management
Assets Under Management Asset Flows – By Product Q4:13 Q1:14 Q2:14 Q3:14 Q4:14 TY:13 TY:14 Mutual Funds – Long-Term Open-End Beginning balance $34,173.0 $36,367.7 $37,347.0 $39,819.1 $39,838.8 $25,827.1 $36,367.7 Inflows 4,061.1 3,641.3 3,148.5 3,034.5 2,841.3 19,097.6 12,665.6 Outflows (3,249.4) (3
Slide 25: Assets Under Management
Assets Under Management Asset Flows – By Product (Continued) Q4:13 Q1:14 Q2:14 Q3:14 Q4:14 TY:13 TY:14 Variable Insurance Funds Beginning balance $ 1,286.8 $ 1,311.8 $1,286.6 $1,305.5 $1,237.5 $ 1,295.7 $1,311.8 Inflows 13.5 11.6 20.9 20.7 14.9 48.7 68.1 Outflows (59.3) (55.5) (53.3) (59.3) (61.7) (
Slide 26: Assets Under Management
Assets Under Management Long-Term Open-End Asset Flows – By Asset Class Q4:13 Q1:14 Q2:14 Q3:14 Q4:14 TY:13 TY:14 Mutual Funds – Domestic Equity Beginning balance $9,446.0 $11,092.1 $11,575.7 $12,189.5 $12,080.5 $6,459.2 $11,092.1 Inflows 1,288.7 1,160.9 907.7 813.8 754.0 4,494.1 3,636.4 Outflows (5
Slide 27: Assets Under Management
Assets Under Management Long-Term Open-End Asset Flows – By Asset Class (Continued) Q4:13 Q1:14 Q2:14 Q3:14 Q4:14 TY:13 TY:14 Mutual Funds – Taxable Bond Beginning balance $10,297.2 $10,425.1 $10,646.1 $11,003.2 $11,039.3 $8,686.3 $10,425.1 Inflows 990.4 991.2 1,013.2 905.3 814.8 5,309.2 3,724.5 Out
Slide 28: Footnotes to Schedule of Non-GAAP Information
Footnotes to Schedule of Non-GAAP Information The company reports its financial results on a Generally Accepted Accounting Principles (GAAP) basis; however management believes that evaluating the company's ongoing operating results may be enhanced if investors have additional non-GAAP financial meas
Slide 29: Virtus Investment Partners
_VIRTUS | INVESTMENT PARTNERS
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