Original GBL Prospectus - Gabelli

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Class A Common Stock OÅered ÏÏÏÏÏÏÏÏ Common Stock to be Outstanding After the OÅering ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ The OÅering 6,000,000 shares 6,000,000 shares of Class A Common Stock(1) and 24,000,000 shares of Class B Common Stock(2) 30,000,000 shares(1) Use of Proceeds ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Voting RightsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ NYSE SymbolÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ The Company intends to use the net proceeds from the OÅering for general corporate purposes, including working capital and the expansion of its business through new investment product oÅerings, enhanced distribution and marketing of existing investment products, upgraded management information systems and strategic acquisitions as opportunities arise. The Company currently does not intend to use any of the net proceeds from the OÅering to pay debt service on the $50 million payable to Mr. Gabelli under the terms of his Employment Agreement. See ""Use of Proceeds.'' The rights of holders of shares of Common Stock are substantially identical, except that holders of Class B Common Stock will be entitled to ten votes per share, while holders of Class A Common Stock will be entitled to one vote per share. GBL (1) Excludes 1,500,000 shares of Class A Common Stock reserved for issuance under the 1999 Stock Award and Incentive Plan of the Company, including approximately 1,200,000 shares of Class A Common Stock subject to outstanding options that will be granted at an exercise price equal to the initial public oÅering price of the Class A Common Stock (net of the discount payable to the Underwriters). See ""Management Ì 1999 Stock Award and Incentive Plan.'' (2) All of the Class B Common Stock is owned by GFI, which is approximately two-thirds owned by Mr. Gabelli, with the balance owned by the Company's professional staÅ and other individuals. Risk Factors Purchasers of the Class A Common Stock in the OÅering should carefully consider the risk factors set forth under the caption ""Risk Factors'' and the other information included in this Prospectus prior to making an investment decision. See ""Risk Factors'' beginning on page 12. 8
Summary Historical and Pro Forma Financial Data General The following is a summary of certain consolidated Ñnancial information relating to the Company. The summary has been derived in part from, and should be read in conjunction with, the audited Consolidated Financial Statements of Gabelli Funds, Inc. and subsidiaries (""GFI'') and ""Management's Discussion and Analysis of Financial Condition and Results of Operations'' included elsewhere in this Prospectus. All Ñnancial information for the nine months ended September 30, 1997 and 1998, which has not been audited, has been derived from the unaudited Consolidated Financial Statements of GFI included elsewhere in this Prospectus, and, in the opinion of management, reÖects all adjustments, which are of a normal recurring nature, necessary to present fairly such information for the periods presented. Operating results for the nine months ended September 30, 1998 are not necessarily indicative of the results that may be expected for the year ended December 31, 1998. The unaudited pro forma income statement data gives eÅect to (i) the Formation Transactions, including the reduction in net gain from investments, the reduction in interest and dividend income, the lower management fee and the increase in interest expense as if the Employment Agreement (as deÑned herein) (see Note P to the Consolidated Financial Statements) had been in eÅect for the year ended December 31, 1997 and nine months ended September 30, 1998, and (ii) the additional income taxes which would have been recorded if GFI had been a ""C'' corporation instead of an ""S'' corporation based on tax laws in eÅect for the respective periods. The unaudited pro forma Ñnancial data does not purport to represent the results of operations or the Ñnancial position of the Company which actually would have occurred had the Formation Transactions been consummated on the aforesaid dates, or project the results of operations or the Ñnancial position of the Company for any future date or period. See ""Selected Historical and Pro Forma Financial Data'' and ""Certain Relationships and Related Transactions Ì The Formation Transactions'' and the Unaudited Pro Forma Consolidated Statements of Income and Financial Condition of the Company included elsewhere in this Prospectus. Impact of $50 Million Non-Recurring Charge ($1.10 per share) to be Recorded in First Quarter of 1999 Under the terms of the Employment Agreement, Mr. Gabelli, who indirectly beneÑcially owns shares of Common Stock having 97.6% of the combined voting power of the Company, will receive, in addition to his portfolio management compensation and account executive fees, an annual incentive-based management fee of 10% of the aggregate pre-tax proÑts of the Company (before consideration of the management fee or the $50 million deferred payment described below or any employment taxes thereon) and a deferred payment of $50 million on January 2, 2002, with interest payable quarterly on such deferred amount at an annual rate of 6%. The $50 million deferred payment will be charged to the Company's earnings upon the eÅective date of the Employment Agreement, which occurred in the Ñrst quarter of 1999. This payment, net of tax beneÑt, will reduce earnings by $1.10 per share (based on the expected weighted average number of shares outstanding in the Ñrst quarter of 1999 of 27.3 million). The $50 million payment is not reÖected in the pro forma income statement data because it is a one-time event directly related to the OÅering; however, it is reÖected, net of tax beneÑt, in pro forma stockholders' equity. 9
Page 1 and 2: PROSPECTUS 6,000,000 Shares Gabelli
Page 3 and 4: PROSPECTUS SUMMARY The following su
Page 5 and 6: The Company's subsidiary, Gabelli &
Page 7: ‚ Increasing Marketing for Instit
Page 11 and 12: Nine Months Year Ended Ended Decemb
Page 13 and 14: ecause the Company did not pursue t
Page 15 and 16: Competition and Competitors with Gr
Page 17 and 18: additional Class B Common Stock cou
Page 19 and 20: THE COMPANY The Company is a holdin
Page 21 and 22: USE OF PROCEEDS The net proceeds to
Page 23 and 24: CAPITALIZATION The following table
Page 25 and 26: Gabelli Funds, Inc. and Subsidiarie
Page 27 and 28: MANAGEMENT'S DISCUSSION AND ANALYSI
Page 29 and 30: Commission revenues for the nine mo
Page 31 and 32: As a result of increased agency tra
Page 33 and 34: functions, such as pricing its secu
Page 35 and 36: As of December 31, 1998, the Compan
Page 37 and 38: ‚ Widely Recognized ""Gabelli'' B
Page 39 and 40: The following table lists the Mutua
Page 41 and 42: Fund Net Assets as of (Morningstar
Page 43 and 44: Fund Net Assets as of (Morningstar
Page 45 and 46: assigned to a speciÑc client from
Page 47 and 48: StaÅ At December 31, 1998, the Com
Page 49 and 50: MANAGEMENT Directors and Executive
Page 51 and 52: (Insurance), the International Coun
Page 53 and 54: accepted accounting principles (bef
Page 55 and 56: Transferability Except as otherwise
Page 57 and 58: Prior to the OÅering, the Company
Page 59 and 60:
1997, which loan accrued interest a
Page 61 and 62:
Stock. No shares of Common Stock ar
Page 63 and 64:
Stock''), voting together as a sing
Page 65 and 66:
Under the CertiÑcate of Incorporat
Page 67 and 68:
SHARES ELIGIBLE FOR FUTURE SALE Imm
Page 69 and 70:
The Underwriters propose to oÅer t
Page 71 and 72:
LEGAL MATTERS Certain legal matters
Page 73 and 74:
REPORT OF INDEPENDENT AUDITORS The
Page 75 and 76:
GABELLI FUNDS, INC. AND SUBSIDIARIE
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
Page 83 and 84:
Page 85 and 86:
Page 87 and 88:
Page 89 and 90:
Page 91 and 92:
Page 93 and 94:
GABELLI FUNDS, INC. UNAUDITED PRO F
Page 95 and 96:
Page 97 and 98:
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Original GBL Prospectus - Gabelli

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