Original GBL Prospectus - Gabelli

More documents

Recommendations

Info

GABELLI FUNDS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS September 30, 1998 A. Reorganization and Initial Public OÅering Reorganization and Initial Public OÅering Prior to the initial public oÅering (the ""OÅering''), the Company will transfer substantially all of the operating assets and liabilities relating to its institutional and retail asset management, mutual fund advisory and brokerage business to <strong>Gabelli</strong> Asset Management Inc. (""GAMI''), in exchange for 24 million shares of GAMI's Class B Common Stock, representing all of its issued and outstanding shares of Common Stock (the ""Reorganization''). GAMI is a newly formed company, incorporated in April 1998 in the state of New York, with no signiÑcant assets or liabilities and which has not engaged in any substantial business activities prior to the OÅering. GAMI intends to sell 6 million shares of Class A Common Stock as part of the OÅering, resulting in 30 million shares expected to be outstanding immediately after the OÅering. Upon completion of the OÅering, the Company will no longer be treated as an ""S'' corporation and will be subject to corporate income taxes. Accordingly, the consolidated statements of income include a pro forma adjustment for additional income taxes which would have been recorded if the Company had been a ""C'' corporation for 1997 based on tax laws then in eÅect. For pro forma purposes the Ñnancial statements have been prepared as if the shareholders of GFI formed a newly created parent company (NewCo) and transferred their ownership interest in GFI to NewCo as of the beginning of the Ñscal period. Concurrent therewith, GFI is assumed to have changed its name to <strong>Gabelli</strong> Asset Management Inc. and to have made a dividend to NewCo equal to its net equity, with the exception of $45 million in net assets retained by GAMI. The unaudited pro forma data gives eÅect to the lower management fee and increase in interest expense as if a new employment agreement with the Company's Chairman of the Board and Chief Executive OÇcer, eÅective immediately preceding the OÅering, had been in eÅect at the beginning of each period, and the eÅects of these adjustments on income tax expense and minority interest. Under the terms of this agreement, the Company will issue a $50 million note payable to the Chairman, payable in 2002, and the Chairman will receive 10% of pre-tax proÑts. Previously the Chairman received 20% of the Company's pre-tax proÑts. 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. The pro forma adjustments also reÖect the income and expenses incurred on the net equity assumed to have been distributed in connection with the Formation Transactions. Additionally, for purposes of the pro forma basic earnings per share calculation for each period, the denominator represents the 30 million shares expected to be outstanding immediately after the OÅering. For purposes of the pro forma diluted earnings per share calculation, the denominator has been calculated using the Treasury Stock method to account for options granted under the Plan. B. Stock Award and Incentive Plan The disclosure requirements of Statements of Financial Accounting Standards No. 123 require the use of an option valuation model to compute a fair value of employee stock options. The valuation model used by the Company was not developed for use in valuing employee stock options and the Company's employee stock option characteristics vary signiÑcantly from those of traded options. As a result, changes in the subjective input assumptions can materially aÅect the fair value estimate. F-25
GABELLI FUNDS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS Ì (Concluded) September 30, 1998 The fair value of each option grant is estimated on the assumed date of grant using the following assumptions: Risk-free interest rate ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5% Dividend yield ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0% Volatility ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 30% Weighted average expected life ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 8 years A pro forma summary of the status of the Plan as of the OÅering is as follows: Nine Months Year Ended Ended December 31, 1997 September 30, 1998 Options outstanding at OÅering date ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,200,000 1,200,000 Weighted average fair value of options granted on OÅering date ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $8.49 per share $8.49 per share Pro forma net income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $20,798,000 $20,465,000 Pro forma earnings per share ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $0.69 $0.68 C. Earnings Per Share For purposes of the pro forma basic and diluted earnings per share calculation, the denominator represents the shares expected to be outstanding immediately after the OÅering, including the sale of 6 million shares of Class A Common Stock. F-26
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 and 8:
‚ Increasing Marketing for Instit
Page 9 and 10:
Summary Historical and Pro Forma Fi
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 93 and 94: GABELLI FUNDS, INC. UNAUDITED PRO F
Page 95: GABELLI FUNDS, INC. AND SUBSIDIARIE
show all

Original GBL Prospectus - Gabelli

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?