Virtus Investment Partners(US:VRTS)2023-05-09 12:33Financial Performance - Net income per diluted share for Q1 2023 was $5.21, an increase of $0.99, or 23.5%, compared to $4.22 in Q1 2022[96] - Net income attributable to Virtus Investment Partners, Inc. increased by 16.8% to $38.6 million in Q1 2023, up from $33.1 million in Q1 2022[106] - Earnings per share (diluted) rose by 23.5% to $5.21 in Q1 2023, compared to $4.22 in Q1 2022[106] - Total revenues decreased by 21.6% to $197.9 million in Q1 2023 from $252.4 million in Q1 2022, primarily due to lower average assets under management[106] Assets Under Management - Total assets under management as of March 31, 2023, were $154.8 billion, a decrease of $28.5 billion, or 15.5%, from March 31, 2022, but an increase of $5.5 billion, or 3.7%, from December 31, 2022[96] - Open-End Funds saw a decrease in assets under management from $73.1 billion in 2022 to $53.9 billion in 2023, a decline of $19.3 billion, or 26.4%[97] - Institutional Accounts experienced a decrease in assets under management from $57.3 billion in 2022 to $53.2 billion in 2023, a decline of $4.1 billion, or 7.1%[97] - Average assets under management decreased by $37.7 billion, or 19.9%, from $190.1 billion in 2022 to $152.4 billion in 2023[97] - Average assets under management for open-end funds decreased from $75.5 billion in 2022 to $54.1 billion in 2023, a decline of 28.4%[103] Sales and Outflows - Total sales in Q1 2023 were $6.2 billion, a decrease of $3.2 billion, or 33.9%, from $9.4 billion in Q1 2022[96] - Net outflows in Q1 2023 were $1.9 billion, compared to $2.0 billion in Q1 2022[96] Expenses - Total operating expenses decreased by 9.4% to $169.3 million in Q1 2023 from $186.9 million in Q1 2022[113] - Employment expenses decreased by $7.4 million, or 7.0%, to $98.6 million in Q1 2023, primarily due to lower incentive compensation[114] - Distribution and service fees decreased by $5.9 million, or 29.3%, to $14.2 million in Q1 2023, reflecting lower sales and assets for open-end funds[109] Market Performance - The company reported $7.8 billion in positive market performance in Q1 2023, partially offsetting net outflows[99] - Realized and unrealized gains on investments improved by $5.7 million in Q1 2023 compared to the same period in the prior year[121] Cash Flow - Net cash used in operating activities improved by $38.8 million, or 47.5%, to $(43.0) million for the three months ended March 31, 2023, compared to $(81.8) million in the prior year[138] - Net cash used in investing activities decreased by $9.4 million, or 41.8%, to $(13.1) million for the three months ended March 31, 2023, compared to $(22.6) million in the same period last year[139] - Net cash used in financing activities decreased by $30.7 million to $(115.1) million for the three months ended March 31, 2023, from $(145.8) million in the prior year[140] Interest and Tax - Interest expense increased by $2.7 million, or 119.6%, to $(5.0) million for the three months ended March 31, 2023, compared to the same period in the prior year[125] - Interest and dividend income surged by $2.9 million, or 887.2%, reaching $3.2 million for the three months ended March 31, 2023, primarily due to higher interest earned on cash balances[126] - Interest and dividend income from investments of CIP rose by $26.4 million, or 129.7%, totaling $46.8 million for the three months ended March 31, 2023, driven by higher average interest rates and a new CLO added in Q4 2022[127][128] - Interest expense of CIP increased by $23.1 million, or 191.2%, to $(35.2) million for the three months ended March 31, 2023, primarily due to higher average interest rates[129] - The estimated effective tax rate decreased to 20.1% for the three months ended March 31, 2023, from 30.0% in the prior year, primarily due to excess tax benefits associated with stock-based compensation[130] Acquisition - The company completed the acquisition of AlphaSimplex Group, LLC for $130.0 million, financed with existing resources and $50.0 million drawn from a revolving credit facility[95] Cash and Equivalents - Cash and cash equivalents decreased by $124.8 million, or 36.9%, to $213.4 million as of March 31, 2023, compared to $338.2 million at December 31, 2022[131] Debt - The Company had $260.9 million outstanding under its Term Loan as of March 31, 2023, with no outstanding borrowings under the revolving credit facility[141]