BrightSphere Investment (US:BSIG)2024-08-08 12:05PART I — FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis Item 1. Financial Statements This section presents BrightSphere's unaudited condensed consolidated financial statements and notes for Q2 2024 and FY2023 Condensed Consolidated Balance Sheets The balance sheets show a decrease in total assets and a shift to an equity deficit as of June 30, 2024 Condensed Consolidated Balance Sheet Summary (in millions) | Metric | June 30, 2024 | December 31, 2023 | |:---|:---|:---| | Total assets | $533.1 | $611.4 | | Total liabilities | $551.9 | $561.9 | | Total equity (deficit) and redeemable non-controlling interests in consolidated Funds | $(18.8) | $49.5 | Condensed Consolidated Statements of Operations Total revenue increased for both periods; net income attributable to controlling interests rose for six months Condensed Consolidated Statements of Operations Summary (in millions, except per share data) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | |:---|:---|:---|:---|:---| | Total revenue | $109.0 | $96.3 | $214.7 | $188.1 | | Operating income | $20.6 | $20.4 | $43.5 | $40.2 | | Net income attributable to controlling interests | $11.0 | $11.4 | $25.6 | $23.4 | | Earnings per share (basic) | $0.29 | $0.27 | $0.67 | $0.56 | | Earnings per share (diluted) | $0.29 | $0.27 | $0.66 | $0.55 | Condensed Consolidated Statements of Comprehensive Income Total comprehensive income attributable to controlling interests decreased for the quarter, increased for six months Condensed Consolidated Statements of Comprehensive Income Summary (in millions) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | |:---|:---|:---|:---|:---| | Net income | $11.5 | $11.5 | $27.2 | $23.5 | | Total other comprehensive income | $0.8 | $1.4 | $1.3 | $2.7 | | Total comprehensive income attributable to controlling interests | $11.8 | $12.8 | $26.9 | $26.1 | Condensed Consolidated Statements of Changes in Stockholders' Equity (Three Months) Stockholders' equity for Q2 2024 was significantly impacted by common stock repurchases and a net deficit Changes in Stockholders' Equity (Three Months Ended June 30, 2024) (in millions) | Metric | Amount | |:---|:---| | Repurchases of common stock including excise taxes | $(20.7) | | Net income | $11.0 | | Dividends ($0.01 per share) | $(0.4) | | Total stockholders' equity (deficit) at June 30, 2024 | $(30.8) | Condensed Consolidated Statements of Changes in Stockholders' Equity (Six Months) Stockholders' equity for H1 2024 was primarily affected by substantial common stock repurchases Changes in Stockholders' Equity (Six Months Ended June 30, 2024) (in millions) | Metric | Amount | |:---|:---| | Repurchases of common stock including excise taxes | $(95.7) | | Net income | $25.6 | | Dividends ($0.02 per share) | $(0.8) | | Total stockholders' equity (deficit) at June 30, 2024 | $(30.8) | Condensed Consolidated Statements of Cash Flows Operating cash decreased; financing activities shifted to net outflow from share repurchases Net Cash Flows (Six Months Ended June 30, in millions) | Activity | 2024 | 2023 | |:---|:---|:---| | Operating activities | $5.4 | $7.3 | | Investing activities | $(18.8) | $(10.7) | | Financing activities | $(61.7) | $35.7 | | Net increase (decrease) in cash and cash equivalents | $(74.2) | $31.7 | Notes to Condensed Consolidated Financial Statements These notes provide essential details and explanations supporting the condensed consolidated financial statements 1) Organization and Description of the Business BrightSphere operates as a global asset manager through its Quant & Solutions segment, with a profit-sharing model - BrightSphere Investment Group Inc. (BSIG) is a global, diversified asset management company, providing investment management services primarily to institutional investors through its majority-owned subsidiary, Acadian Asset Management LLC (Acadian)18 - The company utilizes a profit-sharing model with Acadian, aligning economic interests between BSIG and Acadian key employees, which is crucial for talent management and long-term growth19 Common Stock Repurchases (Six Months Ended June 30, 2024) | Metric | Value | |:---|:---| | Shares repurchased | 4,445,534 | | Average price per share | $21.32 | | Total cost (including commissions) | $94.9 million | 2) Basis of Presentation and Significant Accounting Policies Financial statements are unaudited, prepared under U.S. GAAP, and the company is evaluating new FASB ASUs - The Condensed Consolidated Financial Statements are prepared in accordance with U.S. GAAP and are unaudited, reflecting management's necessary estimates and assumptions2224 - The company is evaluating new FASB ASUs: 2023-07 (Segment Reporting) and 2023-09 (Income Tax Disclosures), which are expected to result in additional disclosures2526 - ASU 2024-01 (Stock Compensation) is not anticipated to have a material impact27 3) Investments Total investments increased to $121.1 million as of June 30, 2024, driven by consolidated Funds Total Investments (in millions) | Category | June 30, 2024 | December 31, 2023 | |:---|:---|:---| | Investments of consolidated Funds | $53.2 | $33.9 | | Other investments | $20.8 | $20.0 | | Investments related to long-term incentive compensation plans | $47.1 | $44.7 | | Total investments | $121.1 | $98.6 | 4) Fair Value Measurements Fair value assets increased to $121.1 million, mostly Level I or II; unconsolidated Funds valued by NAV Total Fair Value Assets and Liabilities (in millions) | Category | June 30, 2024 | December 31, 2023 | |:---|:---|:---| | Total fair value assets | $121