Epoch Holding Corp. Reports Operating Results (10-Q)
Epoch Hldg Cp has a market cap of $357.4 million; its shares were traded at around $15.67 with a P/E ratio of 27.9 and P/S ratio of 6.6. The dividend yield of Epoch Hldg Cp stocks is 1.5%.Mutual Fund and Other Gurus that owns EPHC: John Keeley of Keeley Fund Management, Mario Gabelli of GAMCO Investors, Chuck Royce of Royce& Associates.
Highlight of Business Operations: Our AUM increased to $14.3 billion at December 31, 2010, an increase of 26% from $11.4 billion at December 31, 2009 and 12% from $12.8 billion at September 30, 2010. Net AUM inflows accounted for approximately $1.1 billion of the increase from the prior year. Nearly all of our investment strategies have outperformed their respective benchmarks for the past five years as well as since investment strategy inception. 19
Operating revenues increased 29%, or $3.7 million, from the same period a year ago. Operating revenues increased by approximately 13%, or $1.9 million, compared with the previous quarter. Operating expenses increased by 12%, or $1.0 million, from the same period a year ago. Increased employee compensation, in conjunction with increases to staff as well as an increase in accrued incentive compensation, was a primary reason for the increase. As a percentage of revenue, employee compensation continues to decline. Operating margin was approximately 42% for the three months ended December 31, 2010 compared with 33% for three months ended December 31, 2009. Our operating margin is consistent with leading asset management firms. Basic earnings per share, excluding the effect of a tax valuation allowance release (See Note 8 to the Financial Statements), increased to $0.18 for the three months ended December 31, 2010 compared to $0.12 for the same period a year ago. Our release of a tax valuation allowance contributed an additional non-recurring benefit of $0.22 per share during the quarter, resulting in a total basic earnings per share of $0.40 for the quarter. In November 2010, our Board declared a special cash dividend of $0.75 per share, or $17.1 million, as a result of our strong liquidity position and confidence in the business. This dividend was paid December 16, 2010. In January 2011, our Board approved an increase in the quarterly dividend rate from $0.05 to $0.06 per share. This next regularly scheduled dividend is payable on February 11, 2011. The table below presents key operating and financial indicators for the three and six months ended December 31, 2010 and 2009, respectively:
prior year periods presented. This release caused the following increases: an increase in net income by approximately $5.0 million and basic earnings per share by $0.22 and $0.21 in the three and six-month periods ending December 31, 2010, respectively. The effect on diluted earnings per share was an increase of $0.21 and $0.22 per share, in the three and six months ended December 31, 2010, respectively.
Small- and mid-cap shares outperformed large-caps during the quarter. As measured by various Russell indexes, growth stocks fared better than value across all market capitalizations, although all segments generated robust returns. Energy and materials stocks were also particularly strong, with gains around 20%, due in part to rising commodity prices; gold reached $1,400 per ounce, oil surpassed $90 per barrel, and gasoline averaged $3 per gallon nationwide. Stocks in the consumer discretionary, industrial, and financial sectors provided impressive returns as companies in these sectors are expected to benefit from a stronger economy.
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