Financial Performance - Net income attributable to Associated Capital Group, Inc.'s shareholders for Q3 2024 was $23.2 million, compared to a net loss of $16,000 in Q3 2023, indicating a significant turnaround [98]. - Total revenues for Q3 2024 were $2.4 million, an increase of 9.1% from $2.2 million in Q3 2023, driven by higher investment advisory and incentive fees [99]. - Investment advisory and incentive fees for Q3 2024 were $2.31 million, up from $2.10 million in Q3 2023, reflecting a growth of approximately 10.1% [98]. - The company reported a net gain from investments of $26.2 million in Q3 2024, compared to a loss of $2.2 million in Q3 2023, highlighting strong performance in its securities portfolio [102]. - Total revenues for the nine months ended September 30, 2024, were $8.0 million, up from $7.0 million in the same period in 2023, with GAMCO International SICAV revenues increasing to $4.0 million from $2.9 million [106]. - Investment gains increased to $42.8 million in Q3 2024 from $21.6 million in Q3 2023, indicating improved performance of the securities portfolio [112]. Assets Under Management (AUM) - Total assets under management (AUM) at the end of Q3 2024 was $1,340 million, down from $1,588 million in Q3 2023, representing a decrease of approximately 15.6% [89]. - Average AUM for Q3 2024 was $1,349 million, down from $1,580 million in Q3 2023, a decline of about 14.6% [89]. - Assets under management (AUM) decreased to $1.3 billion as of September 30, 2024, from $1.6 billion at December 31, 2023, primarily due to investor outflows [116]. - Net investor outflows for the quarter ended September 30, 2024, amounted to $93 million, offset by market appreciation of $60 million [119]. Expenses - Compensation expenses increased to $4.2 million in Q3 2024 from $4.1 million in Q3 2023, primarily due to higher performance-based compensation accruals [102]. - Management fee expense for Q3 2024 was $3.3 million, with no management fee expense recorded in Q3 2023, indicating a shift in compensation structure [103]. - Management fee expense rose to $5.7 million for the nine months ended September 30, 2024, compared to $3.1 million in the prior year, reflecting a higher incentive-based compensation [109]. Cash and Cash Equivalents - Cash and cash equivalents at the end of the period were $286.2 million, down from $399.5 million at the end of September 2023 [127]. - Net cash used in operating activities was $45.8 million for the nine months ended September 30, 2024, driven by an increase in trading securities [123]. Shareholder Equity - Total shareholders' equity as of September 30, 2024, was $892.8 million, down from $907.0 million at the end of 2023, largely due to a special dividend of $2 per share declared in September 2024 [96]. - Unrecognized incentive fees as of September 30, 2024, approximated $2.9 million, with no material unrecognized incentive fees reported in the prior year [101]. - Shareholder-designated contributions decreased to $0.4 million for the nine months ended September 30, 2024, compared to $1.6 million in the prior year [114]. Taxation - The effective tax rate for the nine months ended September 30, 2024, was 22.1%, up from 14.3% in the prior year, primarily due to deferred tax benefits from a foreign investment [115]. Legal Matters - The company is not currently subject to any legal proceedings involving claims for damages exceeding 10% of its consolidated assets [132]. - Management believes that potential legal matters are not material to the company's financial condition, operations, or cash flows as of September 30, 2024 [132]. - The condensed consolidated financial statements include necessary provisions for probable and estimable losses related to legal actions [132]. - The company evaluates reasonably possible losses and makes necessary disclosures if material [132].

Financial Results Announcement - Associated Capital Group announced a preliminary range for its book value per share for the quarter ended September 30, 2024[5]. - The press release related to the financial results was filed as Exhibit 99.1 on October 7, 2024[4]. - The report is not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934[5]. - The Chief Financial Officer, Ian J. McAdams, signed the report on October 7, 2024[8].

Core Insights - Associated Capital Group, Inc. reported financial results for the third quarter of 2024, highlighting a decrease in assets under management (AUM) and an increase in net income compared to the previous year [1][4][5]. Financial Performance - AUM at the end of the quarter was $1.34 billion, down from $1.59 billion a year earlier, reflecting a net outflow of $288 million and currency fluctuations [10][4]. - Total revenues for the third quarter were $2.415 million, an increase from $2.200 million in the same quarter of 2023 [2][5]. - Net income for the quarter was $23.242 million, compared to a loss of $16,000 in the prior year [2][26]. - Net income per share was $1.09, up from $0.00 in the same quarter of 2023 [2][26]. Shareholder Returns - The company returned $45.9 million to shareholders through dividends and share repurchases in the third quarter [1]. - A special cash dividend of $2.00 per share was declared, alongside a semi-annual dividend of $0.10 per share [16][17]. - Since its spin-off in 2015, the company has returned approximately $181.9 million to shareholders through share repurchases and $81.1 million in dividends [18]. Investment Strategy - The company focuses on alternative investment strategies, particularly in merger arbitrage, which generated gross returns of 4.88% for the third quarter [12][13]. - Global M&A activity reached $2.3 trillion in the first nine months of 2024, a 16% increase from the previous year, with the U.S. leading in dealmaking [13]. Operating Expenses - Total operating expenses, excluding management fees, were $6.0 million in the third quarter, up from $5.7 million in the same quarter of 2023 [7][2]. - The management fee for the quarter was $3.3 million, compared to none in the previous year [8][21]. Taxation - The effective tax rate for the quarter was 22.9%, significantly lower than the 60.8% rate in the same quarter of the previous year, which was affected by deferred tax expenses [9][2].

Group 1 - Associated Capital Group, Inc. announced a preliminary range for its third quarter book value of $41.85 to $42.05 per share, excluding a $2 per share special dividend declared in September 2024 [1] - The estimated book values show a decrease from $42.87 at June 30, 2024, and $42.11 at December 31, 2023, but an increase from $41.43 at September 30, 2023 [1] - The company will provide further details on its financial results in November [1] Group 2 - Associated Capital Group, Inc. is a diversified global financial services company based in Greenwich, Connecticut, providing alternative investment management through Gabelli & Company Investment Advisers, Inc. [2] - The company has earmarked proprietary capital for its direct investment business, which includes Gabelli Private Equity Partners, LLC, formed in August 2017 with $150 million of authorized capital [2] - Gabelli Principal Strategies Group, LLC was created in December 2015 to pursue strategic operating initiatives [2]

Group 1 - Associated Capital Group, Inc. declared a special cash dividend of $2.00 per share, totaling approximately $42.4 million, payable on November 4, 2024, to shareholders of record as of October 21, 2024 [1] - Since becoming a public company in 2015, Associated Capital has returned approximately $81.1 million to shareholders through dividends [1] Group 2 - Associated Capital Group, Inc. is a diversified global financial services company based in Greenwich, Connecticut, providing alternative investment management through Gabelli & Company Investment Advisers, Inc. [2] - The company has earmarked proprietary capital for its direct investment business, which includes Gabelli Private Equity Partners, LLC, formed in August 2017 with $150 million of authorized capital [2] - Gabelli Principal Strategies Group, LLC was created in December 2015 to pursue strategic operating initiatives [2]

Group 1 - Air Canada reached a tentative four-year deal with the Air Line Pilots Association (ALPA), representing over 5,200 pilots, avoiding a potential strike that could have disrupted operations [1][2] - The terms of the deal will remain confidential until a ratification vote by union members and approval by Air Canada's Board of Directors, expected to occur within the next month [1][2] - The new deal acknowledges the contributions and professionalism of pilots and aims to provide a framework for the carrier's growth [2] Group 2 - Without a deal, either side could have issued a 72-hour strike or lockout notice, which could have started as early as last Sunday [2] - Air Canada shares on the Toronto Stock Exchange (TSX) have declined by 15% this year [2]

Group 1 - Air Canada is preparing to shut down most of its operations due to a potential strike or lockout resulting from a labor dispute with its pilots [1] - The airline has warned that if no agreement is reached with the Air Line Pilots Association (ALPA) by Sunday, either side can issue a 72-hour strike or lockout notice, leading to a wind-down plan that would suspend all flights by September 18 [1] - The union represents over 5,200 pilots for both Air Canada and Air Canada Rouge [2] Group 2 - Air Canada CEO Michael Rousseau stated that the ALPA's salary demands exceed average Canadian wage increases, and a shutdown is likely unless the union moderates its demands [3] - The ALPA chair accused Air Canada of not addressing key issues such as fair compensation and quality-of-life improvements during negotiations [3] - Air Canada is negotiating with other carriers to provide seats for customers if a strike occurs, and passengers with canceled flights will receive full refunds and can reschedule trips without charge [3] Group 3 - Air Canada shares fell nearly 2% on the Toronto Stock Exchange (TSX) [4]

Group 1 - Associated Capital Group, Inc. has set October 18, 2024, as the registration date for its 2024 Shareholder Designated Charitable Contribution (SDCC) of $0.20 per share for all registered Class A and Class B shareholders [1][2] - The total estimated contribution based on 21.4 million outstanding shares will be approximately $4.3 million, with forms provided to registered holders to designate recognized 501(c)(3) charitable organizations by December 6, 2024 [2] - Since becoming a public company, shareholders of Associated Capital have donated approximately $42 million to over 190 different charities addressing various local, national, and international concerns [2] Group 2 - Associated Capital is a diversified global financial services company based in Greenwich, Connecticut, providing alternative investment management through Gabelli & Company Investment Advisers, Inc. [3] - The company has earmarked proprietary capital for its direct investment business, which includes Gabelli Private Equity Partners, LLC, formed in August 2017 with $150 million of authorized capital, and Gabelli Principal Strategies Group, LLC, created in December 2015 [3]

Financial Performance - Total revenues for Q2 2024 were $2.6 million, an increase from $2.4 million in Q2 2023, with GAMCO International SICAV revenues rising to $1.3 million from $1.0 million[103]. - Net income attributable to shareholders for Q2 2024 was $2.985 million, down from $3.371 million in Q2 2023, representing a decrease of about 11.4%[102]. - Total revenues for the six months ended June 30, 2024, were $5.6 million, an increase of 16.7% compared to $4.8 million in the same period of 2023[107]. - Interest and dividend income increased to $7.9 million in the 2024 quarter from $6.0 million in the 2023 quarter, driven by higher sustained interest rates[106]. - Net cash provided by operating activities was $28.6 million for the six months ended June 30, 2024, compared to $179.4 million in the same period of 2023[119][120]. Expenses - Total expenses increased to $6.269 million in Q2 2024 from $5.853 million in Q2 2023, marking an increase of approximately 7.1%[102]. - Compensation expenses rose to $3.942 million in Q2 2024 from $3.789 million in Q2 2023, primarily due to higher stock-based compensation[105]. - Management fee expense for Q2 2024 was $0.442 million, down from $0.544 million in Q2 2023, indicating a decrease of about 18.7%[102]. - Other operating expenses increased to $4.1 million during the six months ended June 30, 2024, compared to $3.0 million in the prior year, driven by marketing expenses on the newly realigned SICAV[109]. - Compensation expenses rose to $7.8 million for the six months ended June 30, 2024, compared to $7.4 million in the prior year, primarily due to higher stock-based compensation[109]. Assets and Equity - Average assets under management (AUM) decreased to $1,446 million in Q2 2024 from $1,640 million in Q2 2023, reflecting a decline of approximately 11.8%[95]. - The company ended Q2 2024 with approximately $880.6 million in cash and investments, providing flexibility for strategic objectives[99]. - Total shareholders' equity increased to $915.5 million as of June 30, 2024, up from $907.0 million at the end of 2023, reflecting a growth of approximately 0.6%[100]. - Assets under management decreased to $1.4 billion as of June 30, 2024, down from $1.6 billion at December 31, 2023, primarily due to investor outflows[112]. - Total AUM for Merger Arbitrage decreased by 14.1% from $1.312 billion at December 31, 2023, to $1.127 billion at June 30, 2024[113]. Legal Matters - The company is not currently subject to any legal proceedings that involve claims exceeding 10% of its consolidated assets[127]. - Management believes that potential legal matters are not material to the company's financial condition, operations, or cash flows as of June 30, 2024[127]. - The condensed consolidated financial statements include necessary provisions for probable and estimable losses related to legal actions[127]. - The company evaluates reasonably possible losses and makes necessary disclosures if material[127]. - The company may be named in legal actions seeking substantial or indeterminate compensatory damages[127]. - The company is subject to governmental or regulatory examinations that could result in adverse judgments or settlements[127]. - Legal actions may seek punitive damages or injunctive relief[127]. - The company has provisions for losses that it believes are probable[127]. - Management assesses the materiality of potential losses from legal proceedings[127]. - The company is not currently facing any material legal challenges that could impact its financial performance[127]. Operating Loss - The company reported an operating loss of $3.674 million for Q2 2024, compared to an operating loss of $3.471 million in Q2 2023[102]. Tax Rate - The effective tax rate for the three months ended June 30, 2024, was 19.1%, significantly lower than 35.8% in the same period of 2023, due to deferred tax benefits from a foreign investment[107]. Investment Performance - Investment losses were $0.2 million in the 2024 quarter, a decline from gains of $3.3 million in the comparable 2023 quarter[106]. Book Value - Book value per share increased to $42.87 as of June 30, 2024, compared to $41.41 as of June 30, 2023, reflecting a growth of approximately 3.5%[95].

[Second Quarter 2024 Financial Overview](index=1&type=section&id=Second%20Quarter%202024%20Financial%20Overview) [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) Associated Capital Group reported second-quarter 2024 results with Assets Under Management (AUM) at $1.36 billion, down from $1.55 billion at the end of Q1 2024 | Metric | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | AUM (end of period) | $1.36 billion | $1.55 billion | $1.55 billion | | Book Value per share | $42.87 | $42.80 | $41.41 | | Net Income | $3.0 million | - | $3.4 million | | Diluted EPS | $0.14 | - | $0.15 | - The company returned a total of **$4.4 million** to shareholders during the second quarter through a combination of dividends and share repurchases[2](index=2&type=chunk) - The Board of Directors approved a Shareholder Designated Charitable Contribution (SDCC) of **$0.20 per share**[2](index=2&type=chunk) [Detailed Financial Performance](index=2&type=section&id=Detailed%20Financial%20Performance) [Second Quarter Results Analysis](index=2&type=section&id=Second%20Quarter%20Results%20Analysis) Total revenues for Q2 2024 increased to $2.6 million from $2.4 million year-over-year, primarily due to a change in revenue recognition for the GAMCO International SICAV - A change in the financial arrangement for the GAMCO International SICAV, effective December 2023, led to the company recognizing 100% of its revenues and paying its marketing expenses, with no material impact on operating results[5](index=5&type=chunk) | Financial Item | Q2 2024 | Q2 2023 | Change Driver | | :--- | :--- | :--- | :--- | | Total Revenues | $2.6M | $2.4M | Increased SICAV revenue | | Operating Expenses (ex-mgmt fee) | $5.8M | $5.3M | Higher marketing & stock comp | | Net Investment & Other Income | $7.3M | $8.6M | Lower mark-to-market gains | | Effective Tax Rate | 19.1% | 35.8% | Prior year had deferred tax expense | [Assets Under Management (AUM)](index=2&type=section&id=Assets%20Under%20Management%20(AUM)) Assets Under Management (AUM) stood at $1.36 billion as of June 30, 2024, a decrease of $229 million from year-end 2023 - The **$229 million decrease in AUM** since year-end 2023 was driven by three main factors: net outflows (**$195 million**), market depreciation (**$19 million**), and currency fluctuations (**$15 million**)[8](index=8&type=chunk) | AUM by Strategy ($ in millions) | June 30, 2024 | Dec 31, 2023 | June 30, 2023 | | :--- | :--- | :--- | :--- | | Merger Arbitrage | $1,127 | $1,312 | $1,286 | | Long/Short Value | $199 | $244 | $230 | | Other | $36 | $35 | $33 | | **Total AUM** | **$1,362** | **$1,591** | **$1,549** | [Business Operations and Strategy](index=3&type=section&id=Business%20Operations%20and%20Strategy) [Alternative Investment Management](index=3&type=section&id=Alternative%20Investment%20Management) The company's alternative investment strategies are centered on its merger arbitrage approach, which seeks to generate absolute returns that are independent of the broader equity and fixed income markets - The core of the alternative investment strategy is merger arbitrage, which has an absolute return focus aimed at generating returns independent of broad market movements[11](index=11&type=chunk) [Merger Arbitrage Strategy & Performance](index=3&type=section&id=Merger%20Arbitrage%20Strategy%20%26%20Performance) In Q2 2024, the longest continuously offered fund in the merger arbitrage strategy delivered a gross return of -1.37% (-1.40% net) | Performance % (Gross) | 2Q '24 | YTD '24 (July) | Full Year 2023 | | :--- | :--- | :--- | :--- | | Merger Arbitrage | -1.37% | 3.48% | 5.49% | - Global M&A activity totaled **$1.5 trillion** in the first half of 2024, an **18% increase** compared to the same period in 2023[12](index=12&type=chunk) [Acquisition Strategy](index=4&type=section&id=Acquisition%20Strategy) Associated Capital Group intends to accelerate the use of its capital by pursuing acquisitions and alliances to expand its product offerings and distribution channels - The company plans to leverage its research and investment capabilities to pursue acquisitions and alliances, broadening its product offerings and distribution[15](index=15&type=chunk) - Through Gabelli Private Equity Partners, the company is actively seeking to acquire privately owned, family-started businesses controlled by their founding families[15](index=15&type=chunk) [Capital Allocation and Shareholder Returns](index=4&type=section&id=Capital%20Allocation%20and%20Shareholder%20Returns) [Shareholder Compensation](index=4&type=section&id=Shareholder%20Compensation) In Q2 2024, the company paid a semi-annual dividend of $0.10 per share and repurchased 65,469 Class A shares for $2.2 million | Action | Details | | :--- | :--- | | Dividend | $0.10 per share semi-annual dividend paid on June 27, 2024 | | Share Repurchases | 65,469 Class A shares for $2.2 million at an average price of $33.88/share | | Buyback Authorization | Increased by 200,000 shares to a total of 439,487 shares | - Since its inception in 2015, the company has returned a total of **$178.5 million** to shareholders through share repurchases, exchange offers, and dividends[17](index=17&type=chunk) [Charitable Contributions](index=4&type=section&id=Charitable%20Contributions) The Board of Directors approved a $4.3 million, or $0.20 per share, shareholder designated charitable contribution (SDCC) - A new shareholder designated charitable contribution (SDCC) of **$4.3 million** (**$0.20 per share**) was approved on August 7, 2024[16](index=16&type=chunk) - Including the current contribution, the SDCC program has donated a cumulative total of approximately **$42 million** on behalf of shareholders[16](index=16&type=chunk) [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) [Reconciliation of Operating Loss Before Management Fee](index=5&type=section&id=Reconciliation%20of%20Operating%20Loss%20Before%20Management%20Fee) The company presents Operating Loss Before Management Fee, a non-GAAP measure, to better illustrate its core operating results by excluding the incentive-based management fee - Management uses the non-GAAP measure "Operating loss before management fee expense" to evaluate business operations, as the management fee is based on pre-tax income which includes non-operating items like investment gains/losses[21](index=21&type=chunk) | Reconciliation ($ in 000's) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Operating loss - GAAP | $(8,644) | $(8,604) | | Add: management fee expense | $2,424 | $3,087 | | **Operating loss before management fee - Non-GAAP** | **$(6,220)** | **$(5,517)** | [Unaudited Condensed Consolidated Financial Statements](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [Statements of Financial Condition (Balance Sheet)](index=6&type=section&id=Statements%20of%20Financial%20Condition%20(Balance%20Sheet)) As of June 30, 2024, the company's total assets were $949.0 million, with total liabilities of $27.8 million and total equity of $915.5 million | Key Balance Sheet Items ($ in thousands) | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and US Treasury Bills | $387,377 | $406,642 | | Investments in securities and partnerships | $442,294 | $420,706 | | **Total Assets** | **$949,016** | **$943,797** | | Total Liabilities | $27,848 | $30,719 | | **Total Equity** | **$915,479** | **$906,975** | [Statements of Income](index=7&type=section&id=Statements%20of%20Income) For the second quarter of 2024, Associated Capital Group reported total revenues of $2.6 million and a net income of $3.0 million, resulting in a diluted EPS of $0.14 | Key Income Statement Items ($ in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :--- | :--- | :--- | | Total revenues | $2,595 | $2,382 | | Operating loss before management fee | $(3,232) | $(2,927) | | Income before income taxes | $3,578 | $5,140 | | **Net income attributable to AC** | **$2,985** | **$3,371** | | **Diluted Net income per share** | **$0.14** | **$0.15** | [Forward-Looking Statements](index=8&type=section&id=Forward-Looking%20Statements) This section provides a standard safe harbor statement, cautioning that the press release contains forward-looking statements based on current expectations - The report contains forward-looking statements regarding future events and financial performance, which are not guarantees of future results and are based on current expectations[29](index=29&type=chunk) - Key risks that could cause actual results to differ include securities market declines affecting AUM, negative product performance, and general economic downturns[30](index=30&type=chunk)