DENVER--(BUSINESS WIRE)--April 20, 2005--
First Quarter GAAP Earnings of $0.09 per Diluted Share or $0.11
Adjusted EPS
Net Flows of Janus-Managed Products Highest Since June 2003
More than Three-Fourths of Janus-Managed JIF Equity Funds in
Top Two Lipper Quartiles on a One- and Three-Year Basis
Significantly Increased Pace of Share Repurchases to $100 Million
in Quarter
Janus Capital Group (NYSE:JNS) today reported first quarter GAAP net income of $19.6 million, or $0.09 per diluted share, versus a net loss of $22.1 million, or $0.10 per diluted share, in the first quarter of 2004. To provide a more comparable basis for evaluating Janus' operating results and financial performance over time, Janus management analyzes historical results after adjusting for certain items that are neither ongoing nor operational in nature. (Please refer to the reconciliation of GAAP to adjusted financials on pages 12-13 of this release.) Excluding these items, first quarter 2005 adjusted net income stood at $24.1 million, or $0.11 per diluted share, compared with $41.5 million, or $0.18 per diluted share, in the first quarter of 2004. Investment Management margins on a GAAP and adjusted basis for the first quarter of 2005 were 20.6% and 21.6%, respectively, compared with 1.6% and 33.9%, respectively, in the first quarter of 2004.
Financial Highlights for the Quarter ended March 31, 2005
Average AUM ($Bns) $133.8
Ending AUM ($Bns) $132.2
Long-term net outflows ($Bns) $1.9
Long-term net outflows ex-INTECH ($Bns) $3.9
GAAP Investment Management operating margin 20.6%
Adjusted Investment Management operating margin 21.6%
GAAP Diluted earnings per share ($) $0.09
Adjusted Diluted earnings per share $0.11
$ (millions) Amount of shares repurchased $100.0
Common shares repurchased (mms) 7.0
In reviewing the company's performance, Chairman and CEO Steve Scheid commented: "During a challenging market environment, we're encouraged by the progress we've made stabilizing flows and increasing gross sales. We're investing prudently in our business, particularly in our investment and distribution initiatives, while carefully managing our expenses. We still have work to do, but we're confident in our approach and long-term strategy, which is why we've increased the pace of our stock repurchases."
Flows and Assets Under Management (AUM)
Average assets under management in the first quarter were $133.8 billion versus $134.9 billion in the fourth quarter of 2004 and $148.4 billion in the first quarter 2004. At March 31, 2005, assets under management (AUM) were $132.2 billion compared with $139.0 billion at December 31, 2004, and $145.0 billion at March 31, 2004. The decline in assets between December 2004 and March 2005 reflects long-term net outflows of $1.9 billion, market depreciation of $2.6 billion, and money market net outflows of $2.3 billion during the quarter.
Long-term net outflows of $1.9 billion represented an improvement compared with $2.6 billion of net outflows in the fourth quarter of 2004 and $7.7 billion in the first quarter of 2004. (The fourth quarter 2004 net outflow figure included a previously disclosed $1.8 billion redemption by ING). Long-term net outflows of Janus-branded product (excluding INTECH and the fourth quarter 2004 ING withdrawal) were $3.9 billion for the current quarter compared with $4.7 billion for the prior quarter and $8.2 billion for the comparable quarter a year ago. Approximately 30% of Janus Investment Fund (JIF) equity products generated positive net flows in the first quarter versus 15% posting positive flows in the previous quarter. The main catalyst for improvement in net flows was Janus' growth and blend equity products, which generated $2.2 billion in gross sales during the first quarter, up from $1.5 billion in the fourth quarter.
Results for the first quarter do not reflect the second portion of a previously disclosed redemption by ING that had been expected to occur in March. This redemption will now occur in April and is expected to total approximately $2.2 billion. (A breakdown of flows by discipline can be found on page 15. A history of flows by category is available on www.ir.janus.com.)
Business Unit Review
Investment Management
Investment management performance was strong in the first quarter. As of March 31, 2005, approximately 68% of the funds in the company's primary retail fund family, JIF, were in the top half of their Lipper categories on a three-year total return basis. More than 65% of the JIF funds were in the top half of their Lipper categories on a one-year total return basis. Detailed Lipper rankings and performance data for all JIF funds can be found beginning on page 16 of this release.
Key highlights of investment performance as of quarter-end included:
-- 81% and 75% of Janus-managed JIF equity products were in the
top half of their respective Lipper categories on a one- and
three-year total return basis, respectively.
-- Over the past 10 years, 83% of the Janus-managed JIF retail
funds and 89% of the Janus-managed JIF equity products were in
the top half of their respective Lipper categories.
"The excellent performance of Janus' equity funds for the one- and three-year periods has positioned us well for a return of growth-style investing," said Janus President and Chief Investment Officer Gary Black. "We're also encouraged by the improved investment performance of our flagship product, Janus Fund, which has produced first and second quartile performance on a one- and three-year Lipper total return basis as of March 31, 2005."
Retail Channel and Marketing
Net outflows of assets in the quarter were $1.2 billion compared with $1.5 billion in the fourth quarter 2004 and $2.0 billion in the first quarter 2004. Assets under management in the Retail Channel were $44.6 billion at March 31, 2005.
In the first quarter of 2005, Janus launched its new TV advertising campaign, highlighting the firm's research-based approach to investing. The company spent a total of $7.6 million on advertising during the first quarter and expects to spend approximately $23 million overall on advertising in 2005.
Key retail channel highlights for the quarter included:
-- Strong investment performance and lead generation initiatives
in the first quarter 2005 generated a 19% increase in gross
sales from the previous quarter.
-- Janus launched two new funds -- Janus Research Fund and Janus
Triton Fund -- in February.
Global Advisors Channel
Net outflows of assets in the quarter were $2.6 billion compared with net outflows of $2.8 billion in the fourth quarter (excluding ING) and net outflows of $5.5 billion in the first quarter 2004. Assets under management within the Global Advisors channel were $52.6 billion at March 31, 2005. Flows continue to be challenged by slower momentum in the insurance segment of the business, which represents approximately half of the Global Advisors channel assets.
Key Global Advisors channel highlights for the quarter included:
-- After four reinstatements in the first quarter, Janus products
are now available on 23 of the 25 largest retirement
record-keeping platforms.
-- Janus separate account products are represented on two of the
leading separately managed account (SMA) platforms, which
represent approximately 60% of the SMA market.
-- Global Advisors won $215 million in international separate
account mandates, predominantly in Germany and Japan.
-- Selling agreements are in place with 14 of the 25 largest
broker dealer networks.
-- Janus now has 25 domestic wholesalers in the field, up from 16
wholesalers in the first quarter of 2004.
Institutional Channel
Net inflows of long-term assets in the quarter were $1.9 billion compared with $3.4 billion in the fourth quarter and long-term net outflows of $0.5 billion in the first quarter 2004. Assets under management in the Institutional Channel were $35.0 billion at March 31, 2005, with $28.4 billion in Separate Account assets and $6.6 billion in Institutional Money Market assets.
Key highlights for the quarter included:
-- INTECH growth of $2.2 billion to $28 billion in assets.
-- Hired a director of consultant relations and expanded Janus'
institutional sales force.
Financial Discussion - First Quarter 2005 vs. First Quarter 2004
Financial Highlights
(dollars in millions, except per share data)
GAAP Results Adjusted Results
Three Months Ended Three Months Ended
------------------- -------------------
March 31, March 31, March 31, March 31,
2005 2004 2005 2004
--------- --------- --------- ---------
Investment Management
Segment
Average Assets $133.8 $148.4 $133.8 $148.4
Revenues $216.0 $249.9 $216.0 $249.9
Operating Expenses 171.6 245.9 169.4 165.1
Operating Income 44.4 4.0 46.6 84.8
Operating Margin 20.6% 1.6% 21.6% 33.9%
Consolidated Net income
(loss) 19.6 (22.1) 24.1 41.5
Diluted earnings (loss) per
share $0.09 $(0.10) $0.11 $0.18
Consolidated operating
margin 17.3% 0.5% 18.2% 30.0%
Adjusted Investment Management Segment
Revenue declined $33.9 million from $249.9 million in the first quarter of 2004 to $216.0 million in the first quarter of 2005. The 13.6% revenue decrease is consistent with the 9.8% decrease in average assets under management combined with approximately $5 million of management fee reductions that occurred as part of Janus' settlement with regulators, effective July 1, 2004. The decline in management fee revenue was partially offset by a $6.4 million increase in INTECH performance fees to $7.2 million.
Adjusted operating expenses increased $4.3 million, principally due to increases in employee compensation and marketing offset by decreases in distribution and depreciation expenses. The increase in employee compensation was due in part to incentive compensation directly linked to improved relative investment performance. The $5.6 million increase in total marketing expenditures was due to the TV and print advertising campaigns that occurred in the first quarter of 2005, as well as the launch of two new retail funds. In the first quarter of 2004 there was no advertising spending. Distribution expense declined due to a decrease in assets on which distribution fees are paid. Depreciation and Amortization declined 27.1% from $14.0 million in the first quarter of 2004 to $10.2 million in the current quarter due to lower levels of capital investment in recent years. General and Administrative expenses were generally flat year over year.
Interest expense declined over the same quarter one year ago due to lower interest payments as a result of approximately $474 million of debt retirement during the second quarter 2004. Other income increased from the beneficial impact of rising interest rates on Janus' cash balances and investments.
Printing and Fulfillment Segment
Results in the company's Printing and Fulfillment business, Rapid Solutions Group, were comparable to the same quarter one year ago, reflecting the first quarter seasonal increases from the printing of year-end statements for financial services firms. From the fourth quarter of 2004 to the first quarter of 2005, the adjusted operating loss improved from $6.1 million to $3.1 million, primarily as a result of significant reductions in operating expenses.
Capital and Liquidity
At March 31, 2005, the company had stockholders' equity of $2.7 billion, cash and investments of $876 million and $377 million of debt outstanding. As part of the company's active management of its capital and liquidity position, Janus repurchased $100 million of its common shares in the first quarter (7.0 million shares) at an average price of $14.25 per share. Since July 2004, when the current $500 million share repurchase plan was authorized by the Board of Directors, Janus has repurchased $184 million (or 12.6 million shares) in the public markets at an average price of $14.55.
2005 Earnings Update
In its year-end earnings presentation on January 26, 2005, (available on www.janus.com in the investor relations tab), the company provided earnings guidance for full year 2005 of $0.55-$0.60 of Adjusted EPS. This guidance assumed 6% equity market appreciation in 2005 based on ending 2004 AUM of $139 billion, and company long-term net flows of $0-$5 billion. If current market conditions continue, the guidance range previously provided will not be achieved.
First Quarter 2005 Earnings Call Information
Janus Capital Group will discuss its results during a conference call Wednesday, April 20, at 10:00 a.m. Eastern Daylight Time. The call-in number will be 877-301-7574 (anyone outside the U.S. or Canada should call 706-643-3623). The slides used during the presentation will be available in the investor relations section of the Janus Capital Group Web site (www.janus.com) approximately one hour prior to the call. For those unable to join the conference call at the scheduled time, an audio replay will be available on www.janus.com.
About Janus Capital Group Inc.
Based in Denver, Colorado, Janus Capital Group Inc. is a leading asset manager offering individual investors and institutional clients complementary asset management disciplines through the firm's global distribution network. Janus Capital Group consists of Janus Capital Management LLC, Enhanced Investment Technologies, LLC (INTECH), and Capital Group Partners, Inc. In addition, Janus Capital Group owns 30% of Perkins, Wolf, McDonnell and Company, LLC.
Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 800-525-3713 or download the file from www.janus.com. Read it carefully before you invest or send money.
Data presented reflects past performance, which is no guarantee of future results.
Funds distributed by Janus Distributors LLC (4/05).
This press release includes statements concerning potential future events involving Janus Capital Group Inc. that could differ materially from the events that actually occur. The differences could be caused by a number of factors including those factors identified in Janus' Annual Report on Form 10-K for the year ended December 31, 2004, on file with the Securities and Exchange Commission (Commission file no. 001-15253). Many of these factors are beyond the control of the Company and its management. Any forward-looking statements contained in this release are as of the date on which such statements were made. The Company assumes no duty to update them, even if experience, unexpected events, or future changes make it clear that any projected results expressed or implied therein will not be realized.
JANUS CAPITAL GROUP INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
GAAP BASIS
(dollars in millions, except per share data)
Three Months Ended
------------------------------------------
March December September JuneMarch
31, 31, 30, 30, 31,
2005 2004 2004 2004 2004
------- -------- --------- ------- -------
Investment Management
Revenues:
Investment management fees $173.1 $176.5 $170.2 $187.9 $199.2
Shareowner servicing fees
and other 42.9 45.0 45.0 47.3 50.7
------- -------- --------- ------- -------
Total 216.0 221.5 215.2 235.2 249.9
------- -------- --------- ------- -------
Investment Management
Operating Expenses:
Employee compensation and
benefits 71.3 61.4 56.7 70.7 60.5
Long-term incentive
compensation 19.0 37.1 22.0 25.4 26.0
Marketing and fulfillment 9.7 9.2 6.5 8.8 4.1
Distribution 27.1 29.5 29.2 31.6 34.8
Depreciation and
amortization 10.2 11.1 11.5 12.3 14.0
General, administrative and
occupancy 32.1 39.1 31.8 35.2 33.3
Restructuring and
impairments 5.5 - 10.2 - 14.2
Provision for mutual fund
investigation (3.3) - - 6.0 59.0
------- -------- --------- ------- -------
Total 171.6 187.4 167.9 190.0 245.9
------- -------- --------- ------- -------
Investment Management
Operating Income 44.4 34.1 47.3 45.2 4.0
Printing and Fulfillment
Revenue 23.0 18.3 22.6 23.6 24.5
Printing and Fulfillment
Operating Expenses 24.2 24.7 25.0 25.3 25.1
Printing and Fulfillment
Intangibles Amortization 1.9 1.9 1.9 1.9 1.9
------- -------- --------- ------- -------
Printing and Fulfillment
Operating Loss (3.1) (8.3) (4.3) (3.6) (2.5)
Interest expense (7.2) (7.2) (4.8) (11.6) (14.8)
Gain on disposition of DST
common shares - - - 228.0 -
Loss on early
extinguishment of debt - - - (55.5) -
Other, net 9.3 8.6 4.9 2.9 3.2
Income tax provision
benefit (provision) (21.4) (7.7) 5.5 (78.7) (11.3)
Equity in earnings of
unconsolidated affiliates 1.7 1.8 1.6 1.6 1.1
Minority interest in
consolidated earnings (4.1) (3.1) (2.9) (2.2) (1.8)
------- -------- --------- ------- -------
Net Income (Loss) $19.6 $18.2 $47.3 $126.1 $(22.1)
======= ======== ========= ======= =======
----------------------------------------------------------------------
Basic earnings per share
Weighted average common
shares outstanding (in
millions) 226.0 228.7 231.8 232.2 230.4
Basic earnings (loss) per
share $0.09 $0.08 $0.20 $0.54 $(0.10)
Diluted earnings per share
Weighted average diluted
common shares outstanding
(in millions) 227.1 229.9 233.0 234.0 230.4
Diluted earnings (loss) per
share $0.09 $0.08 $0.20 $0.54 $(0.10)
----------------------------------------------------------------------
JANUS CAPITAL GROUP INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
ADJUSTED BASIS
(dollars in millions, except per share data)
Three Months Ended
------------------------------------------
March December September JuneMarch
31, 31, 30, 30, 31,
2005 2004 2004 2004 2004
------- -------- --------- ------- -------
Investment Management
Revenues:
Investment management fees $173.1 $176.5 $170.2 $187.9 $199.2
Shareowner servicing fees
and other 42.9 45.0 45.0 47.3 50.7
------- -------- --------- ------- -------
Total 216.0 221.5 215.2 235.2 249.9
------- -------- --------- ------- -------
Investment Management
Operating Expenses:
Employee compensation and
benefits 71.3 61.4 54.1 52.5 56.5
Long-term incentive
compensation 19.0 22.1 22.0 22.0 22.4
Marketing and fulfillment 9.7 9.2 6.5 8.8 4.1
Distribution 27.1 29.5 29.2 31.6 34.8
Depreciation and
amortization 10.2 11.1 11.5 12.3 14.0
General, administrative and
occupancy 32.1 39.1 31.8 35.2 33.3
------- -------- --------- ------- -------
Total 169.4 172.4 155.1 162.4 165.1
------- -------- --------- ------- -------
Investment Management
Operating Income 46.6 49.1 60.1 72.8 84.8
Printing and Fulfillment
Revenue 23.0 18.3 22.6 23.6 24.5
Printing and Fulfillment
Operating Expenses 24.2 22.5 25.0 25.3 25.1
Printing and Fulfillment
Intangibles Amortization 1.9 1.9 1.9 1.9 1.9
------- -------- --------- ------- -------
Printing and Fulfillment
Operating Loss (3.1) (6.1) (4.3) (3.6) (2.5)
Interest expense (7.2) (7.2) (7.3) (11.6) (14.8)
Other, net 5.2 8.6 4.9 2.9 3.2
Income tax provision (15.0) (14.3) (21.8) (23.5) (28.5)
Equity in earnings of
unconsolidated affiliates 1.7 1.8 1.6 1.6 1.1
Minority interest in
consolidated earnings (4.1) (3.1) (2.9) (2.2) (1.8)
------- -------- --------- ------- -------
Net Income $24.1 $28.8 $30.3 $36.4 $41.5
======= ======== ========= ======= =======
----------------------------------------------------------------------
Basic earnings per share
Weighted average common
shares outstanding (in
millions) 226.0 228.7 231.8 232.2 230.4
Basic earnings per share $0.11 $0.13 $0.13 $0.16 $0.18
Diluted earnings per share
Weighted average diluted
common shares outstanding
(in millions) 227.1 229.9 233.0 234.0 232.4
Diluted earnings per share $0.11 $0.13 $0.13 $0.16 $0.18
----------------------------------------------------------------------
JANUS CAPITAL GROUP INC.
Non-GAAP Reconciliations
(dollars in millions, except per share data)
Janus management analyzes historical results after adjusting for
certain items that are not ongoing or are non-operational in nature.
The company believes that excluding these items is useful to
management and investors because it provides a more comparable basis
for evaluating Janus' operating results and financial performance over
time. Internally, these adjusted results are used to evaluate the
performance of the company.
Three Months Ended March 31, 2005
-----------------------------------------------------
Non-
GAAP Investment Printing
Investment Adjust- Management and Adjusted
Management ments Adjusted Fulfillment Total
---------- ------- ---------- ----------- --------
Revenues $216.0 $- $216.0 $23.0 $239.0
Operating
expenses 169.4 - 169.4 26.1 195.5
Restructuring
and impairments 5.5 (5.5)(1) - - -
Provision for
mutual fund
investigation (3.3) 3.3 (2) - - -
---------- ------- ---------- ----------- --------
Total 171.6 (2.2) 169.4 26.1 195.5
---------- ------- ---------- ----------- --------
Operating Income
(Loss) 44.4 2.2 46.6 (3.1) 43.5
Operating Margin 20.6% 21.6% -13.5% 18.2%
Interest expense (7.2) - (7.2) - (7.2)
Other income
(expense) 9.0 (4.1)(3) 4.9 0.3 5.2
Income tax
benefit
(provision) (22.4) 6.4 (4) (16.0) 1.0 (15.0)
Equity earnings
in
unconsolidated
affiliates 1.7 - 1.7 - 1.7
Minority
interest in
consolidated
earnings (4.1) - (4.1) - (4.1)
---------- ------- ---------- ----------- --------
Net Income
(Loss) $21.4 $4.5 $25.9 $(1.8) $24.1
========== ======= ========== =========== ========
Diluted Earnings
(Loss) per
Share $0.09 $0.02 $0.11 $(0.01) $0.11
Average Assets
Under
Management
(Billions) $133.8
Three Months Ended December 31, 2004
---------------------------------------------
Investment Printing
Investment Non-GAAP Management and
Management Adjustments Adjusted Fulfillment
---------- ----------- ---------- -----------
Revenues $221.5 $- $221.5 $18.3
Operating expenses 150.3 - 150.3 24.4
Long-term incentive
compensation 37.1 (15.0)(5) 22.1 -
Restructuring and
impairments - - - 2.2
---------- -------- ---------- -----------
Total 187.4 (15.0) 172.4 26.6
---------- -------- ---------- -----------
Operating Income (Loss) 34.1 15.0 49.1 (8.3)
Operating Margin 15.4% 22.2% -45.4%
Other income (expense) - - - 0.1
Income tax benefit
(provision) (11.1) (5.7)(4) (16.8) 3.4
---------- -------- ---------- -----------
Net Income (Loss) $23.0 $9.3 $32.3 $(4.8)
========== ======== ========== ===========
Diluted Earnings (Loss)
per Share $0.10 $0.04 $0.14 $(0.02)
Average Assets Under
Management (Billions) $134.9
Three Months Ended December 31, 2004
------------------------------------
Printing and
Non-GAAP Fulfillment Adjusted
Adjustments Adjusted Total
-------------- ------------ --------
Revenues $- $18.3 $239.8
Operating expenses - 24.4 174.7
Long-term incentive compensation - - 22.1
Restructuring and impairments (2.2)(12) - -
---------- ------------ --------
Total (2.2) 24.4 196.8
---------- ------------ --------
Operating Income (Loss) 2.2 (6.1) 43.0
Operating Margin -33.3% 17.9%
Other income (expense) - 0.1 0.1
Income tax benefit (provision) (0.9) 2.5 (14.3)
---------- ------------ --------
Net Income (Loss) $1.3 $(3.5) $28.8
========== ============ ========
Diluted Earnings (Loss) per Share $0.01 $(0.01) $0.13
Average Assets Under Management
(Billions)
Three Months Ended September 30, 2004
-----------------------------------------------------
Non-
GAAP Investment Printing
Investment Adjust- Management and Adjusted
Management ments Adjusted Fulfillment Total
---------- ------- ---------- ----------- --------
Revenues $215.2 $- $215.2 $22.6 $237.8
Operating
expenses 101.0 - 101.0 26.9 127.9
Employee
compensation and
benefits 56.7 (2.6)(6) 54.1 - 54.1
Restructuring and
impairments 10.2 (10.2)(7) - - -
---------- ------- ---------- ----------- --------
Total 167.9 (12.8) 155.1 26.9 182.0
---------- ------- ---------- ----------- --------
Operating Income
(Loss) 47.3 12.8 60.1 (4.3) 55.8
Operating Margin 22.0% 27.9% -19.0% 23.5%
Interest expense (4.8) (2.5)(4) (7.3) - (7.3)
Other income
(expense) 4.7 - 4.7 0.2 4.9
Income tax
benefit
(provision) 3.8 (27.3)(4) (23.5) 1.7 (21.8)
Equity earnings
in
unconsolidated
affiliates 1.6 - 1.6 - 1.6
Minority interest
in consolidated
earnings (2.9) - (2.9) - (2.9)
---------- ------- ---------- ----------- --------
Net Income (Loss) $49.7 $(17.0) $32.7 $(2.4) $30.3
========== ======= ========== =========== ========
Diluted Earnings
(Loss) per Share $0.21 $(0.07) $0.14 $(0.01) $0.13
Average Assets
Under Management
(Billions) $129.2
JANUS CAPITAL GROUP INC.
Non-GAAP Reconciliations (continued)
(dollars in millions, except per share data)
Three Months Ended June 30, 2004
------------------------------------------------------
Non-
GAAP Investment Printing
Investment Adjust- Management and Adjusted
Management ments Adjusted Fulfillment Total
---------- ------- ---------- ----------- --------
Revenues $235.2 $- $235.2 $23.6 $258.8
Operating
expenses 94.5 - 94.5 25.4 119.9
Employee
compensation
and benefits 70.7 (18.2)(6) 52.5 1.8 54.3
Long-term
incentive
compensation 18.8 (3.4)(6) 15.4 - 15.4
Provision for
mutual fund
investigation 6.0 (6.0)(8) - - -
---------- ------- ---------- ----------- --------
Total 190.0 (27.6) 162.4 27.2 189.6
---------- ------- ---------- ----------- --------
Operating
Income (Loss) 45.2 27.6 72.8 (3.6) 69.2
Operating
Margin 19.2% 31.0% -15.3% 26.7%
Interest
expense (11.6) - (11.6) - (11.6)
Gain on the
disposal of
DST common
shares 228.0 (228.0) (9) - - -
Loss on early
extinguish-
ment of debt (55.5) 55.5 (10) - - -
Other income
(expense) 2.5 - 2.5 0.4 2.9
Income tax
benefit
(provision) (79.7) 55.2 (4) (24.5) 1.0 (23.5)
Equity earnings
in
unconsolidated
affiliates 1.6 - 1.6 - 1.6
Minority
interest in
consolidated
earnings (2.2) - (2.2) - (2.2)
---------- ------- ---------- ----------- --------
Net Income
(Loss) $128.3 $(89.7) $38.6 $(2.2) $36.4
========== ======= ========== =========== ========
Diluted
Earnings
(Loss) per
Share $0.55 $(0.38) $0.16 $(0.01) $0.16
Average Assets
Under
Management
(Billions) $138.6
Three Months Ended March 31, 2004
------------------------------------------------------
Non-
GAAP Investment Printing
Investment Adjust- Management and Adjusted
Management ments Adjusted Fulfillment Total
---------- ------- ---------- ----------- --------
Revenues $249.9 $- $249.9 $24.5 $274.4
Operating
expenses 86.2 - 86.2 25.4 111.6
Employee
compensation
and benefits 60.5 (4.0) (6) 56.5 1.6 58.1
Long-term
incentive
compensation 26.0 (3.6) (6) 22.4 - 22.4
Restructuring
and
impairments 14.2 (14.2)(11) - - -
Provision for
mutual fund
investigation 59.0 (59.0) (8) - - -
---------- ------- ---------- ----------- --------
Total 245.9 (80.8) 165.1 27.0 192.1
---------- ------- ---------- ----------- --------
Operating
Income (Loss) 4.0 80.8 84.8 (2.5) 82.3
Operating
Margin 1.6% 33.9% -10.2% 30.0%
Other income
(expense) (12.3) - (12.3) - (12.3)
Income tax
provision
(expense) (12.4) (17.2) (4) (29.6) 1.1 (28.5)
---------- ------- ---------- ----------- --------
Net Income
(Loss) $(20.7) $63.6 $42.9 $(1.4) $41.5
========== ======= ========== =========== ========
Diluted
Earnings
(Loss) per
Share $(0.09) $0.27 $0.18 $(0.01) $0.18
Average Assets
Under
Management
(Billions) $148.4
(1) Charges related to the closure of the Bay Isle Financial LLC
facility in Oakland, California, severance of a Bay Isle portfolio
manager and impairment of intangibles associated with the loss of
institutional accounts.
(2) Insurance recovery of $6.0 million for legal expenses incurred
related to the mutual fund investigation, net of first quarter
2005 legal fees and other expenses.
(3) Realized gain on the sale of investments. In the first quarter of
2005, the Company reduced its seed capital investments in advised
funds by $22.8 million. This reduction in seed capital produced
gains of $2.5 million on an after-tax basis.
(4) Includes tax effect of adjustments. Also, on March 31, 2005, 1.3
million shares of Janus common stock granted in 2002 vested at a
price significantly below the grant price of approximately $26 per
share. This vesting resulted in a permanent book-tax difference,
which directly increased income tax expense. 3Q04 includes the
reversal of a $22.5 million tax contingency and related accrued
interest of $2.5 million.
(5) Equity awards granted on a vested basis in 2004.
(6) Charges related to severance payments and the accelerated vesting
of restricted stock as a result of executive level departures
including Janus' former CEO during 2Q04.
(7) Charge of $8.2 million related to the closure of Janus' Austin,
Texas, facility in 2001 and the pretax loss of $2.0 million from
the sale of Bay Isle Financial LLC's Private Client Asset
Management Division.
(8) Charges related to the mutual fund investigation, including civil
penalties, restoration, legal and other administrative costs.
(9) Pretax gain of $228.0 million from the sale of 7.4 million shares
of DST to an unrelated third party.
(10) Loss of $55.5 million primarily related to the premium paid to
exchange old for new notes with lower interest rates.
(11) An impairment charge of $14.2 million was recorded associated
with the termination notices received in the first quarter of 2004
from certain subadvised accounts.
(12) Charges related to the closure of a non-strategic facility.
JANUS CAPITAL GROUP INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions)
March 31, December 31,
2005 2004
------------ ------------
Assets
Cash and cash equivalents $454.8 $527.1
Other current assets 405.3 538.2
Investments and other assets 324.0 240.9
Property and equipment, net 58.8 62.0
Intangibles and goodwill, net 2,392.0 2,399.4
------------ ------------
Total Assets $3,634.9 $3,767.6
============ ============
Liabilities and Stockholders' Equity
Debt $377.2 $377.5
Other liabilities 198.7 219.8
Deferred income taxes 405.0 435.8
Stockholders' equity 2,654.0 2,734.5
------------ ------------
Total Liabilities and Stockholders' Equity $3,634.9 $3,767.6
============ ============
UNAUDITED CONDENSED CONSOLIDATED
CASH FLOW INFORMATION
(dollars in millions)
Three Months Ended
---------------------------------------
March 31, December 31, March 31,
Cash provided by (used in) 2005 2004 2004
------------- ------------ ------------
Operating activities $43.8 $44.3 $78.3
Investing activities (5.8) (327.9) (20.7)
Financing activities (110.3) (45.4) (1.9)
------------- ------------ ------------
Net change during period $(72.3) $(329.0) $55.7
============= ============ ============
ASSETS UNDER MANAGEMENT BY MANAGER
(dollars in billions)
Three Months Ended
--------------------------------
March 31, December 31, March 31,
2005 2004 2004
--------- ------------ ---------
Janus Capital Management LLC $94.6 $103.2 $120.4
Bay Isle Financial LLC - 0.5 1.2
Enhanced Investment Technologies,
LLC 28.0 25.8 15.5
Perkins, Wolf, McDonnell and Company 9.6 9.5 7.9
--------- ------------ ---------
Total assets $132.2 $139.0 $145.0
========= ============ =========
JANUS CAPITAL GROUP INC.
ASSETS & FLOWS BY INVESTMENT DISCIPLINE
(dollars in billions)
Three Months Ended
------------------------------------------
March June September DecemberMarch
31, 30, 30, 31, 31,
2004 2004 2004 2004 2005
------- ------- --------- -------- -------
Growth / Blend
Beginning of period
assets $83.1 $78.9 $74.3 $68.2 $71.4
Sales 2.4 1.8 1.1 1.5 2.2
Redemptions (8.1) (8.1) (4.4) (6.1) (4.8)
------- ------- --------- -------- -------
Net Sales (redemptions) (5.7) (6.3) (3.3) (4.6) (2.6)
Market appreciation 1.6 1.6 (2.8) 7.8 (2.5)
------- ------- --------- -------- -------
End of period assets $78.9 $74.3 $68.2 $71.4 $66.3
======= ======= ========= ======== =======
Global / International
Beginning of period
assets $22.6 $21.7 $16.9 $15.1 $14.6
Sales 0.8 0.5 0.3 0.3 0.4
Redemptions (2.9) (3.4) (1.9) (2.5) (1.5)
------- ------- --------- -------- -------
Net Sales (redemptions) (2.1) (2.9) (1.6) (2.2) (1.2)
Market appreciation 1.2 (1.8) (0.2) 1.8 (0.1)
------- ------- --------- -------- -------
End of period assets $21.7 $16.9 $15.1 $14.6 $13.4
======= ======= ========= ======== =======
Mathematical/Quantitative
Beginning of period
assets $14.3 $15.5 $17.5 $20.1 $25.8
Sales 1.3 2.0 3.0 4.1 2.4
Redemptions (0.8) (0.6) (0.2) (0.2) (0.4)
------- ------- --------- -------- -------
Net Sales (redemptions) 0.5 1.4 2.8 3.9 2.0
Market appreciation 0.7 0.6 (0.1) 1.8 0.2
------- ------- --------- -------- -------
End of period assets $15.5 $17.5 $20.1 $25.8 $28.0
======= ======= ========= ======== =======
Value
Beginning of period
assets $8.5 $9.2 $9.6 $9.1 $10.2
Acquisitions
(dispositions) - - (0.6) - -
Sales 1.1 0.9 0.8 1.0 1.0
Redemptions (0.9) (0.6) (0.6) (0.8) (1.0)
------- ------- --------- -------- -------
Net Sales (redemptions) 0.2 0.3 0.2 0.2 -
Market appreciation 0.4 0.1 - 0.8 (0.1)
------- ------- --------- -------- -------
End of period assets $9.2 $9.6 $9.1 $10.2 $10.2
======= ======= ========= ======== =======
Fixed Income
Beginning of period
assets $7.3 $6.7 $6.0 $5.8 $6.2
Sales 0.6 0.3 0.3 0.6 0.4
Redemptions (1.0) (0.8) (0.6) (0.5) (0.5)
------- ------- --------- -------- -------
Net Sales (redemptions) (0.4) (0.5) (0.3) 0.1 (0.2)
Market appreciation (0.2) (0.2) 0.2 0.2 (0.1)
------- ------- --------- -------- -------
End of period assets $6.7 $6.0 $5.8 $6.2 $5.9
======= ======= ========= ======== =======
Money Market
Beginning of period
assets $15.8 $13.0 $11.1 $11.8 $10.8
Sales 26.2 21.5 20.0 19.5 12.3
Redemptions (29.0) (23.4) (19.4) (20.5) (14.6)
------- ------- --------- -------- -------
Net Sales (redemptions) (2.8) (1.9) 0.6 (1.0) (2.3)
Market appreciation - - - - -
------- ------- --------- -------- -------
End of period assets $13.0 $11.1 $11.8 $10.8 $8.5
======= ======= ========= ======== =======
Total
Beginning of period
assets $151.5 $145.0 $135.4 $130.2 $139.0
Acquisitions
(dispositions) - - (0.6) - -
Sales 32.4 27.1 25.5 27.1 18.6
Redemptions (42.9) (37.0) (27.1) (30.6) (22.8)
------- ------- --------- -------- -------
Net Sales (redemptions) (10.5) (9.9) (1.6) (3.5) (4.2)
Market appreciation 4.0 0.3 (3.0) 12.3 (2.6)
------- ------- --------- -------- -------
End of period assets $145.0 $135.4 $130.2 $139.0 $132.2
======= ======= ========= ======== =======
Total Excluding Money
Markets
Beginning of period
assets $135.7 $132.0 $124.3 $118.4 $128.2
Acquisitions
(dispositions) - - (0.6) - -
Sales 6.2 5.6 5.5 7.5 6.3
Redemptions (13.9) (13.6) (7.7) (10.1) (8.2)
------- ------- --------- -------- -------
Net Sales (redemptions) (7.7) (8.0) (2.2) (2.6) (1.9)
Market appreciation 4.0 0.3 (3.0) 12.4 (2.6)
------- ------- --------- -------- -------
End of period assets $132.0 $124.3 $118.4 $128.2 $123.7
======= ======= ========= ======== =======
Total Excluding Mathematical/Quantitative & Money Markets
Beginning of period
assets $121.4 $116.5 $106.8 $98.3 $102.4
Acquisitions
(dispositions) - - (0.6) - -
Sales 4.9 3.6 2.5 3.4 3.9
Redemptions (13.1) (13.0) (7.5) (9.9) (7.8)
------- ------- --------- -------- -------
Net Sales (redemptions) (8.2) (9.4) (5.0) (6.5) (3.9)
Market appreciation 3.3 (0.3) (2.9) 10.6 (2.7)
------- ------- --------- -------- -------
End of period assets $116.5 $106.8 $98.3 $102.4 $95.7
======= ======= ========= ======== =======
Each line has been rounded on the schedule individually to increase
the accuracy of the amounts presented. Therefore totals and subtotals
may not foot.
Janus Investment Fund Lipper Rankings Based
on Total Returns as of 3/31/05
-------------------------------------------
1-Year 3-Year
--------------------- ---------------------
Rank / Rank /
Lipper Percentile Total Percentile Total
Category Rank (%) Funds Rank (%) Funds
--------------------------------------------------------
Growth Funds
----------------------------------------------------------------------
Janus Mid-Cap
Enterprise Growth
Fund Funds 12 59 / 530 8 33 / 426
Janus Fund Large-Cap
Growth
Funds 14 86 / 652 42 226 / 547
Janus Large-Cap
Mercury Growth
Fund Funds 18 114 / 652 13 66 / 547
Janus Multi-Cap
Olympus Growth
Fund Funds 41 177 / 432 74 271 / 368
Janus Multi-Cap
Orion Growth
Fund Funds 9 36 / 432 13 47 / 368
Janus Large-Cap
Twenty Growth
Fund(1) Funds 2 10 / 652 3 11 / 547
Janus Venture Small-Cap
Fund(1) Growth
Funds 16 77 / 512 13 54 / 427
----------------------------------------------------------------------
Core Funds
----------------------------------------------------------------------
Janus Balanced
Balanced Funds
Fund 40 235 / 594 49 216 / 446
Janus Large-Cap
Core Core Funds
Equity
Fund 4 35 / 908 15 109 / 774
Janus Large-Cap
Growth and Core Funds
Income Fund 8 71 / 908 21 156 / 774
Janus Multi-Cap
Risk-Managed Core Funds
Stock Fund 4 24 / 728 - -
Janus Multi-Cap
Contrarian Core Funds
Fund 3 15 / 728 4 20 / 523
----------------------------------------------------------------------
Income Funds
----------------------------------------------------------------------
Janus General
Federal Muni Debt
Tax-Exempt Funds
Fund 92 261 / 284 75 194 / 261
Janus Intermediate
Flexible Inv Grade
Bond Fund(2) Debt Funds 74 340 / 459 14 51 / 389
Janus High Current
High-Yield Yield Funds
Fund 56 230 / 415 82 287 / 350
Janus Short
Short-Term Investment
Bond Fund Grade Debt
Funds 42 85 / 206 45 62 / 139
----------------------------------------------------------------------
International/
Global Funds
----------------------------------------------------------------------
Janus Global Health/
Life Sciences Biotechnology
Fund Funds 24 43 / 179 41 63 / 155
Janus Global
Global Funds
Opportunities
Fund 48 149 / 315 32 82 / 259
Janus Science &
Global Technology
Technology Funds
Fund 53 156 / 294 59 162 / 276
Janus International
Overseas Funds
Fund 91 765 / 845 67 472 / 708
Janus Global
Worldwide Funds
Fund 95 298 / 315 99 255 / 259
----------------------------------------------------------------------
Value Funds
----------------------------------------------------------------------
Janus Mid-Cap
Mid Cap Value
Value Fund - Funds
Inv(3) 56 126 / 228 42 73 / 177
Janus Small-Cap
Small Cap Core
Value Fund - Funds
Inv.(1,3) 52 293 / 572 72 337 / 472
----------------------------------------------------------------------
Janus Investment Fund Lipper Rankings Based
on Total Returns as of 3/31/05
--------------------------------------------
5-Year 10-Year
--------------------- ---------------------
Rank / Rank /
Lipper Percentile Total Percentile Total
Category Rank (%) Funds Rank (%) Funds
--------------------------------------------------------
Growth Funds
----------------------------------------------------------------------
Janus Mid-Cap
Enterprise Growth
Fund Funds 92 264 / 288 59 65 / 110
Janus Large-Cap
Fund Growth
Funds 64 270 / 426 38 52 / 138
Janus Large-Cap
Mercury Growth
Fund Funds 82 347 / 426 3 4 / 138
Janus Multi-Cap
Olympus Growth
Fund Funds 73 179 / 245 - -
Janus Multi-Cap
Orion Growth
Fund Funds - - - -
Janus Large-Cap
Twenty Growth
Fund(1) Funds 79 334 / 426 1 1 / 138
Janus Small-Cap
Venture Growth
Fund(1) Funds 71 224 / 316 37 31 / 83
----------------------------------------------------------------------
Core Funds
----------------------------------------------------------------------
Janus Balanced
Balanced Funds
Fund 63 229 / 364 8 12 / 166
Janus Large-Cap
Core Core Funds
Equity
Fund 30 176 / 596 - -
Janus Large-Cap
Growth and Core Funds
Income
Fund 65 386 / 596 3 5 / 229
Janus Multi-Cap
Risk- Core Funds
Managed
Stock Fund - - - -
Janus Multi-Cap
Contrarian Core Funds
Fund 20 70 / 360 - -
----------------------------------------------------------------------
Income Funds
----------------------------------------------------------------------
Janus General
Federal Muni Debt
Tax-Exempt Funds
Fund 89 203 / 228 76 109 / 144
Janus Intermediate
Flexible Inv Grade
Bond Debt Funds
Fund(2) 63 168 / 267 8 10 / 136
Janus High
High-Yield Current
Fund Yield
Funds 38 108 / 284 - -
Janus Short
Short-Term Investment
Bond Fund Grade Debt
Funds 57 60 / 105 32 18 / 56
----------------------------------------------------------------------
International/
Global Funds
----------------------------------------------------------------------
Janus Health/
Global Life Bio-
Sciences technology
Fund Funds 88 67 / 76 - -
Janus Global Funds
Global
Opportunities
Fund - - - -
Janus Science &
Global Technology
Technology Funds
Fund 58 82 / 141 - -
Janus Inter-
Overseas national
Fund Funds 83 425 / 512 5 8 / 171
Janus Global Funds
Worldwide
Fund 92 176 / 192 33 20 / 61
----------------------------------------------------------------------
Value
Funds
----------------------------------------------------------------------
Janus Mid-Cap
Mid Cap Value Funds
Value Fund -
Inv(3) 26 26 / 100 - -
Janus Small-Cap
Small Cap Core Funds
Value Fund -
Inv.(1,3) 18 57 / 323 - -
----------------------------------------------------------------------
Percent of JIF Funds per Lipper Quartile based on Total
Returns
-------------------------------------------------------
1-Year 3-Year 5-Year 10-Year
-------------- -------------- ------------- ------------- ------------
1st Quartile 47.9% 40.9% 10.0% 50.0%
2nd Quartile 17.4 27.3 15.0 33.4
3rd Quartile 21.7 22.7 40.0 8.3
4th Quartile 13.0 9.1 35.0 8.3
-------------- -------------- ------------- ------------- ------------
Lipper Inc. -- A Reuters Company, is a nationally recognized
organization that ranks the performance of mutual funds within a
universe of funds that have similar investment objectives. Rankings
are historical with capital gains and dividends reinvested.
1. Closed to new investors.
2. Effective 02/25/05, Sharon Pichler is no longer the portfolio
manager of Janus Federal Tax-Exempt Fund, and Doug Nelson is now
the Fund manager.
3. Effective February 28, 2005, Janus Flexible Income Fund changed its
name to Janus Flexible Bond Fund and added to its investment
policy to state that at least 80% of its net assets (plus
borrowings for investment purposes) will be invested in bonds.
4. Rating is for the investor share class only; other classes may have
different performance characteristics.
Janus Investment Fund ("JIF")
Average Annual Total Returns (%) for Periods Ended 3/31/05(1)
-------------------------------------------------------------
Inception
Date 1 Year 3 Year 5 Year 10 Year
--------- ------ ------ ------ -------
Growth Funds
----------------------------------------------------------------------
Janus Fund 2/70 4.41 (0.94) (11.18) 8.29
Janus Twenty Fund(2,7) 4/85 8.96 5.11 (13.07) 12.21
Janus Mercury Fund 5/93 3.84 1.81 (13.64) 10.90
Janus Olympus Fund 12/95 3.84 (0.47) (13.84) --
Janus Enterprise Fund 9/92 11.61 8.00 (15.60) 8.30
Janus Venture Fund(2,3) 4/85 7.39 8.52 (9.53) 10.22
Janus Orion Fund(4) 6/00 9.45 5.85 -- --
----------------------------------------------------------------------
Core Funds
----------------------------------------------------------------------
Janus Growth and Income
Fund 5/91 8.60 2.65 (5.57) 13.81
Janus Balanced Fund 9/92 4.87 4.05 0.29 11.13
Janus Contrarian Fund(4) 2/00 14.22 9.91 4.14 --
Janus Core Equity Fund 6/96 9.83 3.09 (2.73) --
Janus Risk-Managed Stock
Fund(5,6) 2/03 13.03 -- -- --
----------------------------------------------------------------------
International/Global Funds
----------------------------------------------------------------------
Janus Worldwide Fund(5) 5/91 (0.61) (0.92) (11.18) 9.15
Janus Overseas Fund(4,5) 5/94 7.04 7.56 (7.50) 12.20
Janus Global Life Sciences
Fund(5) 12/98 2.19 1.45 (1.84) --
Janus Global Technology
Fund(3,4,5) 12/98 (7.33) (4.17) (22.76) --
Janus Global Opportunities
Fund(5) 6/01 8.73 7.11 -- --
----------------------------------------------------------------------
Value Funds
----------------------------------------------------------------------
Janus Small Cap Value
Fund - Inv.(2,8) 10/87 8.27 6.92 13.94 16.35
Janus Mid Cap Value
Fund - Inv.(12) 8/98 12.66 10.82 15.07 --
----------------------------------------------------------------------
Income Funds
----------------------------------------------------------------------
Janus Flexible Income
Fund(9,10,11) 7/87 0.25 6.45 6.01 7.45
Janus High-Yield
Fund(5,9,10,11) 12/95 6.01 7.78 6.16 --
Janus Short-Term
Bond Fund(9,10,13) 9/92 0.21 2.93 4.32 5.23
----------------------------------------------------------------------
1) All figures unaudited.
2) Closed to new investors.
3) This Fund has been significantly impacted, either positively or
negatively, by investing in initial public offerings (IPOs).
4) This Fund may have significant exposure to emerging markets which
may lead to greater price volatility.
5) A 2% redemption fee may be imposed on shares held for 3 months or
less. Performance shown does not reflect this redemption fee and,
if reflected, performance would have been lower.
6) The voluntary waiver of the Fund's management fee terminated on
June 25, 2004. Without such waivers total returns from inception
to June 24, 2004 would have been lower.
7) Returns have sustained significant gains and losses due to market
volatility in the consumer discretionary sector.
8) Returns shown for Janus Small Cap Value Fund prior to April 21,
2003, are those of Berger Small Cap Value Fund.
9) Bond funds have the same interest rate, inflation, and credit
risks that are associated with the underlying bonds owned by the
Fund. Unlike owning individual bonds, there are ongoing fees and
expenses associated with owning shares of bonds funds. The return
of principal is not guaranteed due to net asset value fluctuation
that is caused by changes in the price of specific bonds held in
the Fund and selling of bonds within the fund by the Portfolio
Manager.
10) As of March 31, 2005, the 30-day SEC Yield was 3.17% on Janus
Federal Tax-Exempt Fund, 4.10% on Janus Flexible Income Fund,
5.71% on Janus High-Yield Fund and 3.08% on Janus Short-Term Bond
Fund.
11) Adviser has agreed to waive a portion of the Fund's expenses if
they exceed the designated cap. If during the periods shown, the
Fund's actual expenses exceeded the cap, its total return would
have been lower. There were no waivers in effect for the most
recent period presented.
12) Returns shown for Janus Mid Cap Value Fund prior to April 21,
2003, are those of Berger Mid Cap Value Fund.
13) Janus Capital has contractually agreed to waive Janus Short-Term
Bond Fund and Janus Federal Tax-Exempt Fund's total operating
expenses to the levels indicated in the prospectus until at least
March 1, 2006. Without such waivers, Janus Short-Term Bond Fund
and Janus Federal Tax-Exempt Fund's yield would have been 2.46%
and 2.40%, respectively and total returns would have been lower.
14) Income may be subject to state or local taxes and to a limited
extent certain federal tax. Capital gains are subject to federal,
state and local taxes.
A fund's performance may be affected by risks that include those
associated with non-diversification, investments in foreign
securities, non-investment grade debt securities, undervalued
companies or companies with a relatively small market capitalization.
Please see a Janus prospectus for more detailed information.
CONTACT: Janus Capital Group Inc.
Investor Relations Contacts:
Steve Belgrad, 303-394-7706
Tamar Gerber, 303-336-4092
or
Media Contacts:
Jane Ingalls, 303-394-7311
Shelley Peterson, 303-316-5625
SOURCE: Janus Capital Group Inc.