from Horizon Kinetics Holding Corporation (NASDAQ:SLGD)
Horizon Kinetics Holding Corporation Reports Third Quarter 2024 Results
Third Quarter 2024 Highlights:
Completes reverse acquisition merger transaction with Scott's Liquid Gold-Inc.
Revenues of $15.4 million for the third quarter of 2024, an increase of 20.6%
Revenues of $42.4 million for the nine months ended September 30, 2024, an increase of 7.6%
Unearned performance revenue of $23.3 million as of September 30, 2024
Assets under management (AUM) grew to $8.3 billion as of September 30, 2024
Board of Directors declares a $0.053 per share dividend
NEW YORK, NY / ACCESSWIRE / November 12, 2024 / Horizon Kinetics Holding Corporation (the "Company" or "HKHC") (OTCM PINK:HKHC) reported financial results for its third quarter ended September 30, 2024. The Company also announced a quarterly dividend of $0.053 per share to be paid on December 16, 2024, to shareholders of record as of November 25, 2024.
The Company continued to grow revenues during the third quarter resulting from continued increases in AUM in its proprietary funds, separately managed accounts, and mutual funds. The increases in AUM across many of these platforms were largely driven by the increases in the market value of Texas Pacific Land Corporation ("TPL"), which increased 21% during the quarter and 69% during the year-to-date period. The Company's revenue increases were partially offset by a variety of higher operating expenses, including higher general and administrative costs relate to acquisition costs, various professional and legal fees, as well as the addition of Scott's Liquid Gold.
The Company also benefited during the third quarter from unrealized gains of $20.3 million from its holdings of proprietary funds, net and from unrealized gains on its investment securities of $11.3 million.
In contemplation of the merger transaction, the Company converted from an LLC to a C-Corp for federal and state income tax purposes. As a result, the Company recognized a non-cash deferred income tax expense of $59.7 million related to the tax basis differences for certain assets, principally unrealized gains in various investments, digital assets and indefinite lived intangible assets.
The Company's Board of Director's determined an expected quarterly dividend policy that is based on the Company's quarterly performance. While the Board will also consider other relevant factors that are relevant to any future quarter's final determination of a dividend, if any, the dividend is expected to be a portion of quarterly operating income after considering applicable income taxes.
Conference Call
Murray Stahl, Chairman and Chief Executive Officer, and Mark Herndon, Chief Financial Officer, will host a conference call on Thursday, November 14, 2024, at 4:15 p.m. Eastern Time. You may register for the conference call by clicking on the following link: https://attendee.gotowebinar.com/register/6526056052289145946
HORIZON KINETICS HOLDING CORPORATION
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands)
Three Months Ended | Nine Months Ended | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Revenue: | ||||||||||||||||
Management and advisory fees | $ | 14,933 | $ | 12,709 | $ | 41,735 | $ | 39,037 | ||||||||
Other income and fees | 435 | 37 | 700 | 385 | ||||||||||||
Total revenue | 15,368 | 12,746 | 42,435 | 39,422 | ||||||||||||
Operating expenses: | ||||||||||||||||
Compensation, related employee benefits, and cost of goods sold | 7,616 | 6,555 | 20,299 | 20,823 | ||||||||||||
Sales, distribution and marketing | 3,097 | 2,479 | 8,006 | 7,822 | ||||||||||||
Depreciation and amortization | 496 | 453 | 1,415 | 1,368 | ||||||||||||
General and administrative expenses | 2,809 | 1,618 | 7,500 | 5,730 | ||||||||||||
Total operating expenses | 14,018 | 11,105 | 37,220 | 35,743 | ||||||||||||
Operating income | 1,350 | 1,641 | 5,215 | 3,679 | ||||||||||||
Other income (expense): | ||||||||||||||||
Equity in earnings of proprietary funds, net | 20,276 | 13,780 | 55,752 | (2,473 | ) | |||||||||||
Interest and dividends | 891 | 181 | 1,261 | 468 | ||||||||||||
Other income (expense) | (2,676 | ) | 2 | (2,857 | ) | 27 | ||||||||||
Unrealized (loss) gain on digital assets, net | (95 | ) | - | 2,792 | - | |||||||||||
Realized gain on investments, net | 23 | 1,340 | 342 | 1,409 | ||||||||||||
Unrealized gain (loss) on investments net | 11,321 | 8,660 | 24,942 | (10,738 | ) | |||||||||||
Total other income (expense), net | 29,740 | 23,963 | 82,232 | (11,307 | ) | |||||||||||
Income (loss) before provision for income taxes | 31,090 | 25,604 | 87,447 | (7,628 | ) | |||||||||||
Income tax (expense) benefit | (69,257 | ) | (133 | ) | (70,735 | ) | 707 | |||||||||
Net income (loss) | $ | (38,167 | ) | $ | 25,471 | $ | 16,712 | $ | (6,921 | ) | ||||||
Basic and diluted net income (loss) per common shares: | ||||||||||||||||
Net income (loss) | $ | (2.07 | ) | $ | 1.42 | $ | 0.92 | $ | (0.38 | ) | ||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic and diluted | 18,415 | 17,984 | 18,129 | 17,984 | ||||||||||||
HORIZON KINETICS HOLDING CORPORATION
Condensed Consolidated Statements of Financial Condition
(in thousands)
September 30, | December 31, | |||||||
2024 | 2023 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Cash and cash equivalents | $ | 18,071 | $ | 10,477 | ||||
Fees receivable | 6,948 | 4,453 | ||||||
Investments, at fair value | 74,852 | 37,620 | ||||||
Investments in proprietary funds | 177,912 | 103,962 | ||||||
Operating lease right-of-use assets | 5,593 | 5,651 | ||||||
Property and equipment, net | 114 | 200 | ||||||
Prepaid expenses and other assets | 3,037 | 1,882 | ||||||
Due from affiliates | 116 | 2,660 | ||||||
Digital assets | 9,029 | 1,829 | ||||||
Intangible assets, net | 45,019 | 43,876 | ||||||
Goodwill | 24,425 | 19,273 | ||||||
Total Assets | $ | 365,116 | $ | 231,883 | ||||