ac20250331_10q.htm

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly period ended March 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission file number 001-37387

ASSOCIATED CAPITAL GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware		47-3965991
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

191 Mason Street, Greenwich, CT		06830
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (203) 629-9595

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Class A Common Stock, par value $0.001 per share		AC		New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer ☐	Accelerated filer ☐
	Non-accelerated filer ☒	Smaller reporting company ☒
		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2) Yes ☐ No ☒.

Indicate the number of shares outstanding of each of the Registrant’s classes of Common Stock, as of the latest practical date.

Class		Outstanding at May 1, 2025
Class A Common Stock, .001 par value		2,187,106
Class B Common Stock, .001 par value		18,950,571

As of May 1, 2025, 2,187,106 shares of class A common stock and 18,950,571 shares of class B common stock were outstanding. GGCP, Inc., a private company controlled by the Company’s Executive Chairman, held 77,165 shares of class A common stock and indirectly held 18,423,741 shares of class B common stock. Other executive officers and directors of GGCP, Inc. held 29,866 and 176,758 shares of class A and class B common stock, respectively. In addition, there are 296,095 Phantom Restricted Stock Awards outstanding as of March 31, 2025.

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ASSOCIATED CAPITAL GROUP, INC. AND SUBSIDIARIES

INDEX

		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Unaudited Condensed Consolidated Financial Statements:
	Condensed Consolidated Statements of Financial Condition (Unaudited)	3
	Condensed Consolidated Statements of Income (Unaudited)	4
	Condensed Consolidated Statements of Equity and Redeemable Noncontrolling Interests (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows (Unaudited)	6
	Notes to the Condensed Consolidated Financial Statements (Unaudited):
	1. Organization	8
	2. Revenue	9
	3. Investments in Securities	9
	4. Investment Partnerships and Other Entities	9
	5. Fair Value	12
	6. Income Taxes	14
	7. Earnings per Share	14
	8. Equity	14
	9. Segment Information	14
	10. Goodwill	16
	11. Guarantees, Contingencies and Commitments	16
	12. Subsequent Events	16

Item 2.	Management’s Discussion and Analysis ("MD&A") of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17

Item 4.	Controls and Procedures	22

PART II.	OTHER INFORMATION *

Item 1.	Legal Proceedings	22

Item 1A.	Risk Factors	24

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23

Item 3.	Defaults Upon Senior Securities	23

Item 4.	Mine Safety Dislosures	23

Item 5.	Other Information	23

Item 6.	Exhibits	24

	Signature	25

* Items other than those listed above have been omitted because they are not applicable.

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ASSOCIATED CAPITAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

UNAUDITED

(Dollars in thousands)

	*March 31,*			*December 31,*
	*2025*			*2024*
ASSETS
Cash and cash equivalents (includes U.S. Treasury Bills with maturities of 3 months or less)	$	293,857		$	299,551
Investments in U.S. Treasury Bills with maturities greater than 3 months		63,956			68,299
Investments in equity securities (includes GAMCO stock with a fair value of $15,599 and $16,920, respectively)		210,868			199,040
Investments in affiliated registered investment companies		169,336			165,515
Investments in partnerships		141,551			139,988
Receivable from brokers		25,458			27,634
Investment advisory fees receivable		1,076			4,142
Receivable from affiliates		676			636
Income taxes receivable, including deferred tax assets, net		3,310			6,021
Goodwill		3,519			3,519
Other assets		19,650			20,944
Total assets	$	933,257		$	935,289

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

Payable to brokers	$	5,258		$	5,491
Compensation payable		12,456			17,747
Securities sold, not yet purchased		8,754			8,436
Accrued expenses and other liabilities		2,149			5,317
Total liabilities		28,617			36,991

Redeemable noncontrolling interests		5,682			5,592

Commitments and contingencies (Note 11)

Equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized; none issued and outstanding		-			-
Class A Common Stock, $0.001 par value; 100,000,000 shares authorized; 6,641,601 shares issued; 2,194,902 and 2,233,920 shares outstanding, respectively		6			6
Class B Common Stock, $0.001 par value; 100,000,000 shares authorized; 19,196,792 shares issued; 18,950,571 outstanding, respectively		19			19
Additional paid-in capital		999,047			999,047
Retained earnings		53,478			45,809
Treasury stock, at cost (4,446,699 and 4,407,681 shares, respectively)		(153,592	)		(152,175	)
Total equity		898,958			892,706
Total liabilities, redeemable noncontrolling interests and equity	$	933,257		$	935,289

As of March 31, 2025 and December 31, 2024, certain balances include amounts related to a consolidated variable interest entity (“VIE”) and voting interest entity (“VOE”). See Note 4.

See accompanying notes.

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ASSOCIATED CAPITAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

UNAUDITED

(In thousands, except per share data)

	*Three Months Ended*
	*March 31,*
	*2025*			*2024*
Revenues
Investment advisory and incentive fees	$	2,004		$	2,907
Other revenues		125			104
Total revenues		2,129			3,011
Expenses
Compensation		4,448			3,820
Management fee		1,103			1,982
Other operating expenses		1,866			2,179
Total expenses		7,417			7,981
Operating loss		(5,288	)		(4,970	)
Other income/(expense)
Net gain from investments		10,892			16,794
Interest and dividend income		5,018			5,983
Interest expense		(45	)		(83	)
Shareholder-designated contribution		(31	)		(69	)
Total other income, net		15,834			22,625
Income before income taxes		10,546			17,655
Income tax expense		2,777			3,798
Income before noncontrolling interests		7,769			13,857
Income attributable to noncontrolling interests		100			36
Net income attributable to Associated Capital Group, Inc.'s shareholders	$	7,669		$	13,821

Net income per share attributable to Associated Capital Group, Inc.'s shareholders:
Basic and diluted	$	0.36		$	0.64

Weighted average shares outstanding:
Basic and diluted		21,166			21,500

Total shares outstanding		21,145			21,420

See accompanying notes.

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ASSOCIATED CAPITAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS

UNAUDITED

(Dollars in thousands)

For the three months ended March 31, 2025

					Additional								Redeemable
	Common		Retained		Paid-in		Treasury			Total			Noncontrolling
	Stock		Earnings		Capital		Stock			Equity			Interests
Balance at December 31, 2024	$	25	$	45,809	$	999,047	$	(152,175	)	$	892,706		$	5,592
Redemptions of noncontrolling interests		-		-		-		-			-			(10	)
Net income		-		7,669		-		-			7,669			100
Purchases of treasury stock		-		-		-		(1,417	)		(1,417	)		-
Balance at March 31, 2025	$	25	$	53,478	$	999,047	$	(153,592	)	$	898,958		$	5,682

For the three months ended March 31, 2024

					Additional								Redeemable
	Common		Retained		Paid-in		Treasury			Total			Noncontrolling
	Stock		Earnings		Capital		Stock			Equity			Interests
Balance at December 31, 2023	$	25	$	48,231	$	999,047	$	(140,328	)	$	906,975		$	6,103
Redemptions of noncontrolling interests		-		-		-		-			-			(360	)
Net income		-		13,821		-		-			13,821			36
Purchases of treasury stock		-		-		-		(3,946	)		(3,946	)		-
Balance at March 31, 2024	$	25	$	62,052	$	999,047	$	(144,274	)	$	916,850		$	5,779

See accompanying notes.

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ASSOCIATED CAPITAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED

(Dollars in thousands)

	*Three Months Ended*
	*March 31,*
	*2025*			*2024*
Operating activities
Net income	$	7,769		$	13,857
Adjustments to reconcile net income to net cash used in operating activities:
Equity in net gains from partnerships		(3,850	)		(2,699	)
Depreciation and amortization		89			90
Deferred income taxes		1,617			2,124
Donated securities		284			1,279
Unrealized gains on securities		(2,462	)		(12,626	)
Realized gains on sales of securities		(2,343	)		(2,147	)
(Increase)/decrease in assets:
Investments in trading securities		(7,687	)		(3,762	)
Investments in partnerships:
Contributions to partnerships		(1,663	)		(4,839	)
Distributions from partnerships		3,950			4,300
Receivable from affiliates		(40	)		(9	)
Receivable from brokers		(478	)		(14	)
Investment advisory fees receivable		3,066			3,470
Income taxes receivable		1,094			(94	)
Other assets		1,205			2,652
Increase/(decrease) in liabilities:
Payable to brokers		(233	)		1,873
Income taxes payable		-			1,723
Compensation payable		(5,291	)		(3,624	)
Accrued expenses and other liabilities		(3,168	)		(2,659	)
Total adjustments		(15,910	)		(14,962	)
Net cash used in operating activities		(8,141	)		(1,105	)

Investing activities
Purchases of securities		(3	)		(3,953	)
Proceeds from sales of securities		613			2,711
Return of capital on securities		610			579
Net provided by/(used in) investing activities	$	1,220		$	(663	)

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ASSOCIATED CAPITAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED (continued)

(Dollars in thousands)

	*Three Months Ended*
	*March 31,*
	*2025*			*2024*
Financing activities
Purchases of treasury stock	$	(1,417	)	$	(3,946	)
Redemptions of redeemable noncontrolling interests		(10	)		(360	)
Net cash used in financing activities		(1,427	)		(4,306	)
Net decrease in cash, cash equivalents and restricted cash		(8,348	)		(6,074	)
Cash, cash equivalents and restricted cash at beginning of period		325,703			347,057
Cash, cash equivalents and restricted cash at end of period	$	317,355		$	340,983

Supplemental disclosures of cash flow information:
Cash paid for interest	$	45		$	83
Cash paid for taxes	$	66		$	30

Reconciliation of Cash, cash equivalents and restricted cash at end of period:
Cash and cash equivalents	$	293,857		$	308,729
Cash held for real estate purchase included in receivable from brokers		-			13,334
Cash included in receivable from brokers		12,881			7,663
Restricted cash included in receivable from brokers		10,617			11,257
Cash, cash equivalents and restricted cash	$	317,355		$	340,983

See accompanying notes.

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ASSOCIATED CAPITAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(UNAUDITED)

1. Organization

Unless we have indicated otherwise, or the context otherwise requires, references in this report to “Associated Capital Group, Inc.”, "Associated Capital", “AC Group”, “the Company”, “AC”, “we”, “us” and “our” or similar terms are to Associated Capital Group, Inc., its predecessors and its subsidiaries.

We are a Delaware corporation that provides alternative investment management, and we derive investment income from proprietary investments of cash and other assets in our operating business.

Gabelli & Company Investment Advisors, Inc. (“GCIA”), a wholly-owned subsidiary of AC, and its wholly-owned subsidiary, Gabelli & Partners, LLC (“Gabelli & Partners”), collectively serve as general partners or investment managers to investment funds, including limited partnerships and offshore companies (collectively, “Investment Partnerships”) and separate accounts. We primarily manage assets across a range of risk and event arbitrage portfolios and in equity event-driven value strategies. The businesses earn management and incentive fees from their advisory activities. Management fees are largely based on a percentage of assets under management. Incentive fees are based on the percentage of the investment returns of certain clients’ portfolios. GCIA is an investment adviser registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940, as amended.

Basis of Presentation

The unaudited interim condensed consolidated financial statements of AC Group included herein have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP in the United States for complete financial statements. The unaudited interim condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of financial position, results of operations and cash flows of the Company for the interim periods presented and are not necessarily indicative of a full year’s results. These interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

The interim condensed consolidated financial statements include the accounts of AC Group and its subsidiaries. All intercompany transactions and balances have been eliminated. The details on the impact of consolidating certain partnership entities on the condensed consolidated financial statements can be seen in Note 4. Investment Partnerships and Other Entities.

For the three months ended March 31, 2025 and 2024, there were no items related to other comprehensive income.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported on the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Recent Accounting Developments

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments require disclosure of specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold and further disaggregation of income taxes paid for individually significant jurisdictions. The ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact that the adoption of this new standard will have on our consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The standard requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. This new guidance will be effective on January 1, 2027 for annual reporting and January 1, 2028 for interim reporting. We are currently evaluating the impact that the adoption of this new standard will have on our consolidated financial statements and related disclosures.

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2. Revenue

The Company’s major revenue sources are as follows for the three months ended March 31, 2025 and 2024 (in thousands):

	*Three Months Ended March 31,*
	*2025*		*2024*
Investment advisory and incentive fees
Asset-based advisory fees	$	1,057	$	1,227
Performance-based advisory fees		10		-
Sub-advisory fees		937		1,680
Sub-total		2,004		2,907

Other		125		104

Total	$	2,129	$	3,011

3. Investments in Securities

Investments in securities at March 31, 2025 and December 31, 2024, consisted of the following (in thousands):

	*March 31, 2025*				*December 31, 2024*
	*Cost*		*Fair Value*		*Cost*		*Fair Value*
Debt - Trading Securities:
U.S. Treasury Bills	$	62,957	$	63,956	$	66,721	$	68,299
Equity Securities:
Common stocks		186,375		209,011		173,436		196,557
Mutual funds		701		1,227		686		1,315
Other investments		1,061		630		1,483		1,168
Total investments in equity securities		188,137		210,868		175,605		199,040
Total investments in securities	$	251,094	$	274,824	$	242,326	$	267,339

Securities sold, not yet purchased at March 31, 2025 and December 31, 2024, consisted of the following (in thousands):

	*March 31, 2025*				*December 31, 2024*
	*Cost*		*Fair Value*		*Cost*	*Fair Value*

Common stocks	$	7,766	$	8,028	$

SEC Form 10-Q filed by Associated Capital Group Inc.