Virtus Investment Partners(US:VRTS)2024-08-08 20:50Financial Performance - Net income per diluted share was $2.43 in Q2 2024, a decrease of $1.67, or 40.7%, compared to $4.10 in Q2 2023[85] - Total sales were $6.1 billion in Q2 2024, a decrease of $1.4 billion, or 19.0%, from $7.6 billion in Q2 2023[85] - Net income attributable to Virtus Investment Partners, Inc. decreased by 41.8% to $17.6 million for the three months ended June 30, 2024, compared to $30.3 million in the same period of 2023[97] - The company reported a net loss of $4.2 million for the three months ended June 30, 2024, compared to a net income of $30.2 million in the same period of 2023[97] - Operating income increased by 13.2% to $44.2 million for Q2 2024, up from $39.0 million in Q2 2023, driven by higher revenues[97] Revenue and Fees - Total revenues increased by 5.1% to $224.4 million for the three months ended June 30, 2024, compared to $213.5 million in the same period of 2023[97] - Investment management fees rose by 6.5% to $191.7 million for the second quarter of 2024, up from $180.0 million in the second quarter of 2023[97] - Retail separate accounts saw a significant increase in fees, rising by $9.4 million, or 22.0%, for the three months ended June 30, 2024, compared to the same period last year[98] - Investment management fees increased by $11.7 million, or 6.5%, for the three months ended June 30, 2024, primarily due to an increase in average assets under management[99] Assets Under Management - Assets under management were $173.6 billion at June 30, 2024, an increase of $5.3 billion, or 3.1%, from June 30, 2023[86] - Average assets under management increased by $16.59 billion, or 10.5%, compared to the previous year[88] - Average assets under management increased to $175.2 million in Q2 2024, compared to $163.0 million in Q2 2023, reflecting a growth of 7.4%[94] - The ending balance of total assets under management as of June 30, 2024, was $173.6 million, a 3.1% increase from $168.3 million in 2023[92] Cash Flow and Equity - Cash and cash equivalents decreased to $183.0 million as of June 30, 2024, down from $239.6 million at December 31, 2023, a decline of 23.6%[126] - Net cash provided by operating activities was $35.4 million for the six months ended June 30, 2024, a decrease of 65.3% from $102.1 million in the prior year[130] - Net cash used in investing activities was $3.8 million for the six months ended June 30, 2024, a significant decrease of 96.9% from $123.2 million in the prior year[131] - Net cash used in financing activities was $21.8 million for the six months ended June 30, 2024, down 89.6% from $210.7 million in the prior year[132] - Total equity increased slightly to $872.1 million as of June 30, 2024, compared to $868.3 million at December 31, 2023, a change of 0.4%[126] Expenses - Total operating expenses increased by 3.3% to $180.2 million for the second quarter of 2024, compared to $174.5 million in the same period of 2023[97] - Total operating expenses for the three months ended June 30, 2024, were $180.2 million, an increase of $5.7 million or 3.3% compared to $174.5 million in the same period last year[103] - Employment expenses increased by $1.0 million, or 0.9%, for the three months ended June 30, 2024, primarily due to an increase in profit- and sales-based compensation[104] - Distribution and service fees decreased by $0.7 million, or 5.1%, for the three months ended June 30, 2024, primarily due to lower sales and average assets under management for open-end funds[100] - Other income and fees decreased by $0.2 million, or 14.4%, for the three months ended June 30, 2024, primarily due to lower fees earned on other fee-earning assets[102] Market Performance - Net flows were $(2.6) billion in Q2 2024 compared to neutral net flows in Q2 2023[85] - The company reported net outflows of $9.2 billion offset by $16.9 billion from positive market performance from June 30, 2023[86] - Market performance for institutional accounts showed a net outflow of $1.7 million in Q2 2024, compared to a net inflow of $2.2 million in Q2 2023[91] Other Financial Metrics - The average fee earned across all products remained flat at 42.2 basis points for both the three and six months ended June 30, 2024, compared to the same periods in the prior year[95] - The provision for income taxes reflected an estimated effective tax rate of 24.4% for the six months ended June 30, 2024, an increase from 23.2% in the prior year[121] - Interest expense decreased by $0.6 million, or 9.7%, for the three months ended June 30, 2024, primarily due to lower average debt outstanding[117] - Interest and dividend income of investments of CIP increased by $4.5 million, or 9.4%, for the three months ended June 30, 2024, attributed to the addition of a CLO and higher average interest rates[119] - Interest expense of CIP increased by $3.2 million, or 8.3%, for the three months ended June 30, 2024, primarily due to higher average interest rates[120] - The change in fair value of contingent consideration improved by $3.5 million, or 51.5%, for the three months ended June 30, 2024, compared to the same period last year[109] - Realized and unrealized losses on investments, net, were $(1.6) million for the three months ended June 30, 2024, reflecting a decrease of $3.3 million compared to the same period last year[113] - Total other income (expense), net, was $(13.9) million for the three months ended June 30, 2024, an increase in loss of $10.3 million compared to $(3.6) million in the same period last year[112]