ART Artio Global Investors Inc. Artio Global Investors Inc.

Artio Global Investors Inc. (NYSE: ART) (“Artio Global Investors”, together with its subsidiaries, “Artio Global” or the “Company”) today reported its results for the quarter ended March 31, 2013.

Financial Update

• Adjusted1 net loss attributable to Artio Global Investors of $5.2 million, or $0.09 per diluted share, for the first quarter of 2013 (GAAP net loss attributable to Artio Global Investors of $10.7 million, or $0.18 per diluted share)
• Assets under management of $11.5 billion as of March 31, 2013
• Investment management fees of $15.3 million for the first quarter of 2013
• Effective fee rate2 of 48.0 basis points for the first quarter of 2013

First quarter 2013 adjusted results are presented to provide a more meaningful comparison between periods and exclude the after-tax impact of certain items, including, but not limited to, certain general and administrative costs associated with the pending acquisition by Aberdeen Asset Management PLC (the “acquisition”).

For the first quarter of 2013, adjusted net loss attributable to Artio Global Investors was $5.2 million, or $0.09 per diluted share, a decrease from adjusted net income attributable to Artio Global Investors of $1.5 million, or $0.02 per diluted share, for the fourth quarter of 2012, and a decrease from adjusted net income attributable to Artio Global Investors of $6.5 million, or $0.11 per diluted share, for the first quarter of 2012.

On a GAAP basis, net loss attributable to Artio Global Investors for the first quarter of 2013 was $10.7 million, or $0.18 per diluted share, as compared to a net loss attributable to Artio Global Investors of $1.5 million, or $0.03 per diluted share, for the fourth quarter of 2012, and a decrease from net income attributable to Artio Global Investors of $4.6 million, or $0.08 per diluted share, for the first quarter of 2012.

The following tables compare the Company’s GAAP results and adjusted results. See Exhibits 3 – 4 of this news release for a reconciliation of the Company’s GAAP results to adjusted results.

         

 

     

Three Months Ended

(unaudited, in millions, except per share amounts)

Mar. 31,

2013

 

Mar. 31,

2012

 

%

Change

 

Dec. 31,

2012

 

%

Change

Revenue3, GAAP

$15 .6 $43 .9 (64 %) $20 .8 (25 %) Operating income (loss), GAAP ($11 .6) $8 .2 NM ($4 .1) 182 % Operating income (loss), adjusted ($8 .2) $10 .8 (176 %) $0 .7 NM Net income (loss) attributable to Artio Global Investors, GAAP

($10

.7)

$4

.6

NM

($1

.5)

NM

Net income (loss) attributable to Artio Global Investors, adjusted

($5

.2)

$6

.5

(180

%)

$1

.5

NM

Diluted EPS, GAAP ($0 .18) $0 .08 NM ($0 .03) NM Diluted EPS, adjusted ($0 .09) $0 .11 (182 %) $0 .02 NM NM – Not Meaningful                          

First Quarter of 2013 Comparison with First Quarter of 2012

Assets Under Management and Net Client Cash Flows

Assets under management were $11.5 billion as of March 31, 2013, down $15.1 billion, or 57%, from $26.6 billion as of March 31, 2012, due primarily to net client cash outflows.

Net client cash outflows for the first quarter of 2013 were $3.1 billion, driven by net client cash outflows in our International Equity I and II strategies.4

Revenues and Other Operating Income

Revenues and other operating income for the first quarter of 2013 totaled $15.6 million, down 64% from $43.9 million for the first quarter of 2012. The decrease was driven primarily by lower investment management fees of $15.3 million for the first quarter of 2013, down 64% from $42.8 million for the first quarter of 2012, due primarily to lower average assets under management and a decrease in the effective fee rate.

Expenses

Employee Compensation and Benefits

For the first quarter of 2013, adjusted employee compensation and benefits expenses were $14.6 million, down 27% from $19.9 million for the first quarter of 2012. The decrease was due primarily to a reduction in incentive compensation accruals and a decrease in costs associated with lower headcount.

GAAP employee compensation and benefits expenses for the first quarter of 2013 were $14.6 million, a decrease of 35% from $22.3 million for the first quarter of 2012, due primarily to the reasons noted above and the elimination of the amortization expense related to RSUs awarded at the time of the Company’s Initial Public Offering.

Shareholder Servicing and Marketing Expenses

Shareholder servicing and marketing expenses for the first quarter of 2013 were $1.9 million, down 46% from $3.6 million for the first quarter of 2012, driven primarily by lower platform costs, reflecting a decrease in average assets under management in proprietary funds and a decline in marketing costs.

General and Administrative Expenses

Adjusted general and administrative expenses for the first quarter of 2013 were $7.3 million, a decrease of 24% from $9.6 million for the first quarter of 2012, due primarily to a decrease in expenses associated with lower headcount, and other cost saving initiatives.

GAAP general and administrative expenses for the first quarter of 2013 were $10.7 million, an increase of 10% from $9.7 million for the first quarter of 2012, due primarily to legal fees related to the acquisition, partly offset by the reasons noted above.

Non-operating Income

Adjusted non-operating income for the first quarter of 2013 was $1.1 million, a decrease of 42% from $1.9 million for the first quarter of 2012, primarily reflecting a decrease in gains from seed capital investments during the first quarter of 2013.

GAAP non-operating income for the first quarter of 2013 was $1.7 million, a decrease of 34% from $2.6 million for the first quarter of 2012, due primarily to the reason noted above.

Income Taxes

For the first quarter of 2013, adjusted income tax benefit was $1.9 million, as compared to adjusted income tax expense of $6.3 million in the first quarter of 2012, due primarily to a decrease in taxable income.

GAAP income tax expense was $0.3 million for the first quarter of 2013, compared to $5.3 million for the first quarter of 2012. The first quarter of 2013 included a valuation allowance taken on the Company’s deferred tax assets recorded in the first quarter of 2013, and the non-deductibility of project costs related to the acquisition.

First Quarter of 2013 Comparison with Fourth Quarter of 2012

Assets Under Management

Assets under management were $11.5 billion as of March 31, 2013, a decrease of $2.8 billion, or 20%, from $14.3 billion as of December 31, 2012, due to net client cash outflows, partly offset by market appreciation.

Revenues and Other Operating Income

Revenues and other operating income for the first quarter of 2013 totaled $15.6 million, down 25% from $20.8 million for the fourth quarter of 2012, driven primarily by lower investment management fees. Investment management fees were $15.3 million for the first quarter of 2013, down 25% from $20.5 million for the fourth quarter of 2012, due primarily to a decrease in average assets under management and a decline in the effective fee rate.

Expenses

Employee Compensation and Benefits

For the first quarter of 2013, adjusted employee compensation and benefits expenses were $14.6 million, an increase of 39% from $10.4 million for the fourth quarter of 2012, due primarily to an increase in accruals related to the Company’s long-term incentive plan.

GAAP employee compensation and benefits expenses for the first quarter of 2013 were $14.6 million, a decrease of 4% from $15.1 million for the fourth quarter of 2012, due primarily to the compensation charge associated with organizational changes in the fourth quarter of 2012, partly offset by the reason noted above.

Shareholder Servicing and Marketing Expenses

Shareholder servicing and marketing expenses for the first quarter of 2013 were $1.9 million, a decrease of 9% from $2.1 million for the fourth quarter of 2012, due primarily to lower platform costs, reflecting a decrease in average assets under management in proprietary funds.

General and Administrative Expenses

Adjusted general and administrative expenses were $7.3 million for the first quarter of 2013, a decrease of 3% from $7.6 million for the fourth quarter of 2012, due primarily to lower expenses across most categories.

GAAP general and administrative expenses were $10.7 million for the first quarter of 2013, an increase of 40% from $7.7 million for the fourth quarter of 2012, due primarily to legal fees related to the acquisition, partly offset by the reason noted above.

Non-operating Income

Adjusted non-operating income for the first quarter of 2013 was $1.1 million, a decrease of 33% from $1.7 million for the fourth quarter of 2012, primarily reflecting a decrease in gains from seed capital investments.

GAAP non-operating income for the first quarter of 2013 was $1.7 million, a decrease of 37% from $2.7 million for the fourth quarter of 2012, due primarily to the reason noted above.

Income Taxes

For the first quarter of 2013, adjusted income tax benefit was $1.9 million, compared to adjusted income tax expense of $0.8 million in the fourth quarter of 2012, due primarily to a decrease in taxable income.

GAAP income tax expense for the first quarter of 2013 was $0.3 million, compared to GAAP income tax benefit of $0.5 million for the fourth quarter of 2012. The change was due primarily to a valuation allowance taken on the Company’s deferred tax assets recorded in the first quarter of 2013, a write-off of deferred tax assets associated with the vesting of equity awards at a price below their grant date fair value in the first quarter of 2013 and the non-deductibility of project costs related to the acquisition, partly offset by the reason noted above.

Liquidity and Capital

As of March 31, 2013, the Company had cash (excluding amounts held in the Company’s Consolidated Investment Products) of $66.6 million, seed capital investments5 in our strategies of $45.8 million and investments held for deferred compensation of $10.2 million.

Total stockholders’ equity on the Statement of Financial Position was $133.4 million as of March 31, 2013, compared to $141.0 million as of December 31, 2012.

Share Repurchase

No shares were repurchased during the first quarter of 2013. As of March 31, 2013, the Company retained authorization from the Board of Directors to repurchase 2,226,061 shares of its Class A common stock through December 31, 2013. Pursuant to the terms of the merger agreement with Aberdeen Asset Management PLC (“Aberdeen”) , the Company may not repurchase shares of its Class A common stock without consent from Aberdeen, except in connection with the terms of share-based payments.

Shares

As of March 31, 2013, there were 60,548,105 total shares of Class A common stock outstanding.

* * * *

About Us

Artio Global Investors Inc. is the indirect holding company of Artio Global Management LLC (“Artio Global”), a registered investment adviser that actively invests in global fixed income and equity markets, primarily for institutional and intermediary clients.

Headquartered in New York City, Artio Global offers a select group of investment strategies, including High Grade Fixed Income, High Yield, International Equity and Global Equity. Access to these strategies is offered through a variety of investment vehicles, including separate accounts, commingled funds and mutual funds.

For more information, please visit www.artioglobal.com.

* * * *

Cautionary Note Regarding Forward-Looking Statements

In addition to historical information, this news release may contain forward‐looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the intrinsic value of our common stock, investor behavior, net client cash flows, our compensation costs and adjusted compensation ratio, use of our free cash flow and declaration of dividends. These forward‐looking statements are based on the Company’s current assumptions, expectations and projections about future events. Words like “believe”, “anticipate”, “intend”, “estimate”, “expect”, “project”, and similar expressions are used to identify forward‐looking statements, although not all forward-looking statements contain these words. These forward‐looking statements discuss matters that necessarily involve a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward‐looking statements.

Among the factors that could cause actual results to differ from those expressed or implied by a forward‐looking statement are those described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s report on Form 10‐K (File No. 001‐34457) filed with the Securities and Exchange Commission on March 4, 2013. Other unknown or unpredictable factors also could have material adverse effects on the Company’s future results, performance, or achievements.

Any forward‐looking statements in this news release speak only as of the date of this news release. The Company is not under any obligation and does not intend to make publicly available any update or other revisions to any forward‐looking statements to reflect circumstances existing after the date of this news release or to reflect the occurrence of future events even if experience or future events make it clear that any expected results expressed or implied by those forward‐looking statements will not be realized.

* * * *

This news release is not sales material, nor is it an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which any such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

1 See Exhibits 3 - 4 of this news release for a reconciliation of the Company’s U.S. GAAP results to its non-GAAP adjusted results (“adjusted”).

2 Effective fee rate is defined as annualized investment management fees (based on the number of days in the period) divided by the average assets under management for the period.

3 Represents total revenues and other operating income.

4 See Exhibit 8 for more information on “Assets under Management by Investment Strategy”.

5 See Exhibit 6 for more information.

  ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES Exhibit - 1 Consolidated Statements of Operations (unaudited, in thousands, except share and per share amounts or as noted)               Three Months Ended % Change From Mar. 31, 2013 Mar. 31, 2012 Dec. 31, 2012 Mar. 31, 2012   Dec. 31, 2012 Revenues and other operating income: Investment management fees $ 15,336 $ 42,771 $ 20,484 (64 %) (25 %) Net gains (losses) on funds held for deferred compensation 299 1,160 315 (74 %) (5 %) Foreign currency losses   (39 )   (1 )   (10 ) NM NM Total revenues and other operating income   15,596     43,930     20,789   (64 %) (25 %)   Expenses: Employee compensation and benefits 14,551 22,334 15,094 (35 %) (4 %) Shareholder servicing and marketing 1,941 3,624 2,135 (46 %) (9 %) General and administrative   10,718     9,738     7,673   10 % 40 % Total expenses   27,210     35,696     24,902   (24 %) 9 %   Operating income (loss) before income tax expense (11,614 ) 8,234 (4,113 ) NM 182 %   Non-operating income   1,681     2,556     2,670   (34 %) (37 %) Income (loss) before income tax expense (9,933 ) 10,790 (1,443 ) (192 %) NM   Income taxes   270     5,322     (522 ) (95 %) 152 % Net income (loss) (10,203 ) 5,468 (921 ) NM NM   Net income attributable to non-controlling interests in AGH (1) - 190 - (100 %) NM Net income attributable to non-controlling interests in CIP (2)   539     678     617   (21 %) (13 %) Net income (loss) attributable to Artio Global Investors $ (10,742 ) $ 4,600   $ (1,538 ) NM NM   Net income (loss) per share attributable to Artio Global Investors: Basic $ (0.18 ) $ 0.08 $ (0.03 ) NM NM Diluted $ (0.18 ) $ 0.08 $ (0.03 ) NM NM   Weighted average shares used in net income (loss) per share attributable to Artio Global Investors: Basic 60,349,980 58,192,573 59,994,425 4 % 1 % Diluted (3) 60,349,980 58,474,697 59,994,425 3 % 1 %   NM - Not Meaningful                               Assets under management ($ in millions) $ 11,513 $ 26,645 $ 14,332 (57 %) (20 %)   Average assets under management ($ in millions) (4) $ 12,968 $ 28,551 $ 15,932 (55 %) (19 %)   Effective fee rate (basis points) (5) 48.0 60.3 51.1   Effective tax rate -2.7 % 49.3 % 36.2 %   Employee compensation and benefits as a percentage of total revenues and other operating income (6) 93.3 % 50.8 % 72.6 %   Operating margin (7) (74.5 %) 18.7 % (19.8 %)                            

1.

 

Represents non-controlling interests in Artio Global Holdings LLC.

2.

Represents non-controlling interests in the Consolidated Investment Products.

3.

The effect of the assumed conversion of the Principals' New Class A Units was antidilutive for the three months ended Mar. 31, 2012.

4.

Average assets under management for a period is computed on the beginning-of-first-month balance and all end-of-month balances in the period.

5.

Effective fee rate is defined as annualized investment management fees (based on the number of days in the period) divided by the average assets under management for the period.

6.

Calculated as employee compensation and benefits expense divided by total revenues and other operating income.

7.

Calculated as operating income before income tax expense divided by total revenues and other operating income.

                  ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES Exhibit - 2 Non-GAAP Adjusted Consolidated Statements of Operations (unaudited, in thousands, except share and per share amounts or as noted)   Three Months Ended % Change From

 

Mar. 31, 2013

Mar. 31, 2012

Dec. 31, 2012

Mar. 31, 2012

Dec. 31, 2012

Revenues and other operating income: Investment management fees $ 15,336 $ 42,771 $ 20,484 (64 %) (25 %) Net gains (losses) on funds held for deferred compensation 299 1,160 315 (74 %) (5 %) Foreign currency losses   (39 )   (1 )   (10 ) NM NM Total revenues and other operating income   15,596     43,930     20,789   (64 %) (25 %)   Expenses: Employee compensation and benefits 14,551 19,912 10,438 (27 %) 39 % Shareholder servicing and marketing 1,941 3,624 2,135 (46 %) (9 %) General and administrative   7,322     9,616     7,551   (24 %) (3 %) Total expenses   23,814     33,152     20,124   (28 %) 18 %   Operating income (loss) before income tax expense (8,218 ) 10,778 665 (176 %) NM   Non-operating income   1,137     1,949     1,693   (42 %) (33 %) Income (loss) before income tax expense (7,081 ) 12,727 2,358 (156 %) NM   Income taxes   (1,915 )   6,266     830   (131 %) NM Net income (loss) (5,166 ) 6,461 1,528 (180 %) NM   Net income attributable to non-controlling interests in AGH (1) - - - NM NM Net income attributable to non-controlling interests in CIP (2)   -     -     -   NM NM Net income (loss) attributable to Artio Global Investors $ (5,166 ) $ 6,461   $ 1,528   (180 %) NM  

Net income (loss) per diluted share attributable to Artio Global Investors

$ (0.09 ) $ 0.11 $ 0.02 (182 %) NM   Weighted average diluted shares used in net income (loss) per share attributable to Artio Global Investors 60,349,980 59,674,697 61,151,288 1 % (1 %)   NM - Not Meaningful                                 Assets under management ($ in millions) $ 11,513 $ 26,645 $ 14,332 (57 %) (20 %)   Average assets under management ($ in millions) (3) $ 12,968 $ 28,551 $ 15,932 (55 %) (19 %)   Effective fee rate (basis points) (4) 48.0 60.3 51.1   Effective tax rate 27.0 % 49.2 % 35.2 %   Employee compensation and benefits as a percentage of total revenues and other operating income (5) 93.3 % 45.3 % 50.2 %  

Operating margin (6)

-52.7 % 24.5 % 3.2 %                              

1.

 

Represents non-controlling interests in Artio Global Holdings LLC.

2.

Represents non-controlling interests in Consolidated Investment Products.

3.

Average assets under management for a period is computed on the beginning-of-first-month balance and all end-of-month balances in the period.

4.

Effective fee rate is defined as annualized investment management fees (based on the number of days in the period) divided by the average assets under management for the period.

5.

Calculated as employee compensation and benefits expense divided by total revenues and other operating income.

6.

Calculated as operating income before income tax expense divided by total revenues and other operating income.

   

ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES

Exhibit - 3

Reconciliation of GAAP to Non-GAAP Adjusted Consolidated Statements of Operations (unaudited, in thousands, except share and per share amounts)                    

See Exhibit 4 for notes describing adjustments set forth below.

    Three Months Ended Mar. 31, 2013 Three Months Ended Mar. 31, 2012 Three Months Ended Dec. 31, 2012 GAAP Adjustments Adjusted GAAP Adjustments Adjusted GAAP Adjustments Adjusted Revenues and other operating income: Investment management fees $ 15,336 $ - $ 15,336 $ 42,771 $ - $ 42,771 $ 20,484 $ - $ 20,484 Net gains (losses) on funds held for deferred compensation 299 - 299 1,160 - 1,160 315 - 315 Foreign currency losses   (39 )   -     (39 )   (1 )   -     (1 )   (10 )   -     (10 ) Total revenues and other operating income   15,596     -     15,596     43,930     -     43,930     20,789     -     20,789     Expenses: Employee compensation and benefits 14,551 - 14,551 22,334 (2,422 )

(a,b)

19,912 15,094 (4,656 ) (b) 10,438 Shareholder servicing and marketing 1,941 - 1,941 3,624 - 3,624 2,135 - 2,135 General and administrative   10,718     (3,396 ) (k)   7,322     9,738    

(122

)

(l)

  9,616     7,673     (122 )

(h , i)

  7,551   Total expenses   27,210     (3,396 )   23,814     35,696     (2,544 )   33,152     24,902     (4,778 )   20,124     Operating income (loss) before income tax expense (11,614 ) 3,396 (8,218 ) 8,234 2,544 10,778 (4,113 ) 4,778 665   Non-operating income   1,681     (544 ) (g , j)   1,137     2,556     (607 )

(g,l)

  1,949     2,670     (977 ) (g , j)   1,693   Income (loss) before income tax expense (9,933 ) 2,852 (7,081 ) 10,790 1,937 12,727 (1,443 ) 3,801 2,358   Income taxes   270     (2,185 ) (c)   (1,915 )   5,322     944   (c)   6,266     (522 )   1,352   (c)   830   Net income (loss) (10,203 ) 5,037 (5,166 ) 5,468 993 6,461 (921 ) 2,449 1,528   Net income attributable to non-controlling interests in AGH - - - 190 (190 ) (d) - - - - Net income attributable to non-controlling interests in CIP   539     (539 ) (g)   -     678     (678 ) (g)   -     617     (617 ) (g)   -   Net income (loss) attributable to Artio Global Investors $ (10,742 ) $ 5,576   $ (5,166 ) $ 4,600   $ 1,861   $ 6,461   $ (1,538 ) $ 3,066   $ 1,528       Net income (loss) per diluted share attributable to Artio Global Investors $ (0.18 ) $ (0.09 ) $ 0.08 $ 0.11 $ (0.03 ) $ 0.02   Weighted average diluted shares used in net income (loss) per share attributable to Artio Global Investors 60,349,980 — 60,349,980 58,474,697 1,200,000 (e) 59,674,697 59,994,425

1,156,863

 

(f) 61,151,288     ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES

Exhibit - 4

Notes to Reconciliation of GAAP to Non-GAAP Adjusted Consolidated Statements of Operations    

Management believes the Non-GAAP adjustments set forth below provide more meaningful comparisons between periods. Additional information on the reorganization of the Company's ownership structure and the related non-recurring items are discussed in the Company's prospectus dated September 23, 2009.

   

(a)

Adjustments to exclude the amortization expense associated with the RSUs awarded at the time of the IPO, as the granting of the awards was one-time in nature.

 

  (b) Adjustments to exclude certain compensation costs associated with organizational changes.     (c)

The adjustment to income taxes for the three months ended Mar 31, 2012 reflect the tax effect of the assumed full exchange of the Principals' non-controlling interests for Class A common stock on the first day of the respective period, since prior to such exchange, income tax expense excludes the U.S. federal and state taxes for the income attributable to the Principals.

 

 

Adjustments to reflect the tax effects of excluding the amortization expense associated with the RSUs awarded at the time of the IPO and the tax effects of excluding costs associated with organizational changes.

 

 

Adjustments also exclude a valuation allowance on the Company's deferred tax assets, the tax effect of excluding the offshore fund expense and costs associated with the wind-down of the Company's US Equity strategies and reductions in infrastructure requirements.

 

  (d) Adjustment to eliminate the Principals' non-controlling interests which are assumed to be exchanged for Class A common stock on the first day of the respective period.    

(e)

Adjusted diluted shares outstanding, for the three months ended Mar. 31, 2012, assumes the Principals have fully exchanged their New Class A Units in Artio Global Holdings LLC for an equivalent amount of shares of the Company's Class A common stock.

 

 

(f)

Adjusted diluted shares outstanding for the three months ended Dec. 31, 2012, include the dilutive impact of the unvested RSUs which are anti-dilutive under GAAP.

 

 

(g)

Adjustments to eliminate third-party investors' economic interests in the Consolidated Investment Products from both Net income (loss) attributable to non-controlling interests in the Consolidated Investment Products and Non-operating income (loss). Management believes these adjustments provide a more useful measure for comparing Non-operating income between periods.

 

 

(h)

Adjustment to eliminate the offshore fund expense.    

(i)

Adjustment to eliminate costs associated with the wind-down of the Company's US Equity strategies and reductions in infrastructure requirements.    

(j)

Adjustment to eliminate non-operating income related to a reduction in amounts payable under the tax receivable agreement.    

(k)

Adjustment to exclude costs related to the acquisition by Aberdeen Asset Management PLC.

 

(l)

Adjustments to eliminate the one-time write-off of unamortized debt issuance costs in connection with the early repayment of the Company's term debt.

ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES Exhibit - 5 Reconciliation of Net Income (loss) to Adjusted EBITDA (unaudited, in thousands)             Three Months Ended % Change From Mar. 31, 2013 Mar. 31, 2012 Dec. 31, 2012 Mar. 31, 2012 Dec. 31, 2012   Net Income (loss) $ (10,203 ) $ 5,468 $ (921 ) Add: Interest, taxes, depreciation and amortization   3,301     9,889     582   EBITDA $ (6,902 ) $ 15,357 $ (339 ) (145 %) NM   Add: Other non-operating (income) loss (1,000 ) (2,057 ) (2,778 ) Add: Compensation adjustments associated with organizational changes - 213 3,926 Add: Acquisition related costs 3,396 - - Add: General & Administrative adjustments   -     122     122   Adjusted EBITDA $ (4,506 ) $ 13,635 $ 931 (133 %) NM   Adjusted EBITDA margin 1 (28.9 %) 31.0 % 4.5 %                             1. Calculated as Adjusted EBITDA divided by total revenues and other operating income.     ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES Exhibit - 6 Condensed Consolidating Statement of Financial Position as of March 31, 2013 (unaudited, in thousands)             Artio Global Consolidated Investors Inc. Before Investment and Subsidiaries Consolidation (1) Products Eliminations Consolidated   Assets: Cash $ 66,641 $ 1,933 $ - $ 68,574 Investments, at fair value: Artio Global funds held for deferred compensation 10,186 - - 10,186 Seed money investments -

49,810

-

49,810

Investments in the Consolidated Investment Products 45,765 - (45,765 ) - Fees receivable and accrued fees, net of allowance for doubtful accounts 9,322 - - 9,322 Deferred taxes, net of valuation allowance of $180,486 9,798 - - 9,798 Income taxes receivable 15,268 - - 15,268 Other Assets   6,894    

16,783

  -    

23,677

  Total Assets $ 163,874   $

68,526

$ (45,765 ) $

186,635

    Liabilities and Equity: Liability under total return swap $ - $ 2,921 $ - $ 2,921 Investments sold, not yet purchased by the Consolidated Investment Products, at fair value - 2,062 - 2,062 Accrued compensation and benefits 11,123 - - 11,123 Accounts payable and accrued expenses 7,066 - - 7,066 Accrued income taxes payable 1,443 - - 1,443 Due under tax receivable agreement 9,985 - - 9,985 Other Liabilities   857    

5,434

  -    

6,291

  Total liabilities   30,474    

10,417

  -    

40,891

    Members' equity - 33,652 (33,652 ) - Net asset value - 24,457 (24,457 ) - Common stock 60 - - 60 Additional paid-in capital 665,633 - - 665,633 Accumulated deficit   (532,293 )   -   -     (532,293 ) Total stockholders' equity 133,400 58,109 (58,109 ) 133,400 Non-controlling interests   -     -   12,344     12,344   Total equity   133,400     58,109   (45,765 )   145,744   Total liabilities and equity $ 163,874   $

68,526

$ (45,765 ) $

186,635

        Total Cash, Investments owned by the Consolidated Investment Products,

and seed money investments

$ 112,406      

1.

 

Represents Artio Global Investors Inc. and subsidiaries with the investment in the Consolidated Investment Products accounted for under the equity method.

                ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES Exhibit - 7 Assets under Management by Investment Vehicle (unaudited, in millions)   Three Months Ended % Change From Mar. 31, 2013 Mar. 31, 2012 Dec. 31, 2012 Mar. 31, 2012 Dec. 31, 2012   Proprietary Funds Beginning assets under management $ 7,202 $ 13,366 $ 8,920 (46 %) (19 %) Gross client cash inflows 533 1,235 472 (57 %) 13 % Gross client cash outflows   (1,666 )   (2,712 )   (2,458 ) 39 % 32 % Net client cash flows (1,133 ) (1,477 ) (1,986 ) 23 % 43 % Transfers between investment vehicles   -     52     -   (100 %) NM Total client cash flows (1,133 ) (1,425 ) (1,986 ) 20 % 43 % Market appreciation (depreciation)   171     921     268   (81 %) (36 %) Ending assets under management   6,240     12,862     7,202   (51 %) (13 %)     Institutional Commingled Funds Beginning assets under management $ 1,793 4,912 2,598 (63 %) (31 %) Gross client cash inflows 1 32 10 (97 %) (90 %) Gross client cash outflows   (796 )   (1,107 )   (896 ) 28 % 11 % Net client cash flows (795 ) (1,075 ) (886 ) 26 % 10 % Transfers between investment vehicles   (4 )   13     (8 ) (131 %) 50 % Total client cash flows (799 ) (1,062 ) (894 ) 25 % 11 % Market appreciation (depreciation)   66     496     89   (87 %) (26 %) Ending assets under management   1,060     4,346     1,793   (76 %) (41 %)     Separate Accounts Beginning assets under management $ 4,496 9,799 5,194 (54 %) (13 %) Gross client cash inflows 78 101 48 (23 %) 63 % Gross client cash outflows   (1,184 )   (2,694 )   (854 ) 56 % (39 %) Net client cash flows (1,106 ) (2,593 ) (806 ) 57 % (37 %) Transfers between investment vehicles   4     (65 )   8   106 % (50 %) Total client cash flows (1,102 ) (2,658 ) (798 ) 59 % (38 %) Market appreciation (depreciation)   84     717     100   (88 %) (16 %) Ending assets under management   3,478     7,858     4,496   (56 %) (23 %)     Sub-advisory Accounts Beginning assets under management $ 841 2,282 955 (63 %) (12 %) Gross client cash inflows 80 39 3 105 % NM Gross client cash outflows   (192 )   (889 )   (152 ) 78 % (26 %) Net client cash flows (112 ) (850 ) (149 ) 87 % 25 % Transfers between investment vehicles   -     -     -   NM NM Total client cash flows (112 ) (850 ) (149 ) 87 % 25 % Market appreciation (depreciation)   6     147     35   (96 %) (83 %)

Ending assets under management

  735     1,579     841   (53 %) (13 %)     Total Assets under Management Beginning assets under management 14,332 30,359 17,667 (53 %) (19 %) Gross client cash inflows 692 1,407 533 (51 %) 30 % Gross client cash outflows   (3,838 )   (7,402 )   (4,360 ) 48 % 12 % Net client cash flows (3,146 ) (5,995 ) (3,827 ) 48 % 18 % Transfers between investment vehicles   -     -     -   NM NM Total client cash flows (3,146 ) (5,995 ) (3,827 ) 48 % 18 % Market appreciation (depreciation)   327     2,281     492   (86 %) (34 %) Ending assets under management $ 11,513   $ 26,645   $ 14,332   (57 %) (20 %)     ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES Exhibit - 8 Assets under Management by Investment Strategy (unaudited, in millions)                 Three Months Ended % Change From Mar. 31, 2013 Mar. 31, 2012 Dec. 31, 2012 Mar. 31, 2012 Dec. 31, 2012   International Equity I Beginning assets under management $ 2,236 $ 8,680 $ 3,746 (74 %) (40 %) Gross client cash inflows 26 131 22 (80 %) 18 % Gross client cash outflows   (1,089 )   (3,108 )   (1,702 ) 65 % 36 % Net client cash flows (1,063 ) (2,977 ) (1,680 ) 64 % 37 % Transfers between investment strategies   -     -     -   NM NM Total client cash flows (1,063 ) (2,977 ) (1,680 ) 64 % 37 % Market appreciation (depreciation)   99     767     170   (87 %) (42 %) Ending assets under management   1,272     6,470     2,236   (80 %) (43 %)   International Equity II Beginning assets under management $ 2,158 10,897 3,090 (80 %) (30 %) Gross client cash inflows 60 191 40 (69 %) 50 % Gross client cash outflows   (1,348 )   (3,621 )   (1,124 ) 63 % (20 %) Net client cash flows (1,288 ) (3,430 ) (1,084 ) 62 % (19 %) Transfers between investment strategies   -     -     -   NM NM Total client cash flows (1,288 ) (3,430 ) (1,084 ) 62 % (19 %) Market appreciation (depreciation)   91     1,038     152   (91 %) (40 %) Ending assets under management   961     8,505     2,158   (89 %) (55 %)   High Grade Fixed Income Beginning assets under management $ 5,618 5,503 5,676 2 % (1 %) Gross client cash inflows 284 332 240 (14 %) 18 % Gross client cash outflows   (544 )   (204 )   (335 ) (167 %) (62 %) Net client cash flows (260 ) 128 (95 ) NM (174 %) Transfers between investment strategies   7     -     12   NM (42 %) Total client cash flows (253 ) 128 (83 ) NM NM Market appreciation (depreciation)   19     83     25   (77 %) (24 %) Ending assets under management   5,384     5,714     5,618   (6 %) (4 %)   High Yield Beginning assets under management $ 4,193 4,295 4,604 (2 %) (9 %) Gross client cash inflows 321 730 218 (56 %) 47 % Gross client cash outflows   (790 )   (317 )   (762 ) (149 %) (4 %) Net client cash flows (469 ) 413 (544 ) NM 14 % Transfers between investment strategies   (7 )   -     (12 ) NM 42 % Total client cash flows (476 ) 413 (556 ) NM 14 % Market appreciation (depreciation)   111     259     145   (57 %) (23 %) Ending assets under management   3,828     4,967     4,193   (23 %) (9 %)   Global Equity Beginning assets under management $ 110 721 467 (85 %) (76 %) Gross client cash inflows 1 1 2 0 % (50 %) Gross client cash outflows   (66 )   (137 )   (359 ) 52 % 82 % Net client cash flows (65 ) (136 ) (357 ) 52 % 82 % Transfers between investment strategies   -     -     -   NM NM Total client cash flows (65 ) (136 ) (357 ) 52 % 82 % Market appreciation (depreciation)   7     93     -   (92 %) NM Ending assets under management   52     678     110   (92 %) (53 %)     ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES Exhibit - 8 Assets under Management by Investment Strategy (unaudited, in millions)                   Three Months Ended % Change From Mar. 31, 2013 Mar. 31, 2012 Dec. 31, 2012 Mar. 31, 2012 Dec. 31, 2012   US Equity Beginning assets under management $ - 178 29 (100 %) (100 %) Gross client cash inflows - 21 10 (100 %) (100 %) Gross client cash outflows   -   (11 ) (38 ) 100 % 100 % Net client cash flows - 10 (28 ) (100 %) 100 % Transfers between investment strategies   -   -   -   NM NM Total client cash flows - 10 (28 ) (100 %) 100 % Market appreciation (depreciation)   -   32   (1 ) (100 %) 100 % Ending assets under management   -   220   -   (100 %) NM   Other (1) Beginning assets under management $ 17 85 55 (80 %) (69 %) Gross client cash inflows - 1 1 (100 %) (100 %) Gross client cash outflows   (1 ) (4 ) (40 ) 75 % 98 % Net client cash flows (1 ) (3 ) (39 ) 67 % 97 % Transfers between investment strategies   -   -   -   NM NM Total client cash flows (1 ) (3 ) (39 ) 67 % 97 % Market appreciation (depreciation)   -   9   1   (100 %) (100 %) Ending assets under management   16   91   17   (82 %) (6 %)   Total Assets under Management Beginning assets under management 14,332 30,359 17,667 (53 %) (19 %) Gross client cash inflows 692 1,407 533 (51 %) 30 % Gross client cash outflows   (3,838 ) (7,402 ) (4,360 ) 48 % 12 % Net client cash flows (3,146 ) (5,995 ) (3,827 ) 48 % 18 % Transfers between investment strategies   -   -   -   NM NM Total client cash flows (3,146 ) (5,995 ) (3,827 ) 48 % 18 % Market appreciation (depreciation)   327   2,281   492   (86 %) (34 %) Ending assets under management   11,513   26,645   14,332   (57 %) (20 %)  

1.

 

Other includes the Local Emerging Markets Debt Fund, Global Credit Opportunities Fund, Other International Equity and Other strategies.

    ARTIO GLOBAL INVESTORS INC. AND SUBSIDIARIES Exhibit - 9 Mutual Fund Performance Data (1)                                 Morningstar Ratings /

Funds in Total Universe (# of Funds)

Lipper Percentile Rankings (PR) / Funds in Total Universe (# of Funds) YTD 1-Year 3-Year 5-Year 10-Year # of # of # of # of # of # of Fund Rating Funds Category PR Funds PR Funds PR Funds PR Funds PR Funds Classification   Artio International Equity Fund, Class A 2 835 Foreign Large Blend 49 315 79 303 98 270 100 212 81 98 International Multi-Cap Growth Artio International Equity Fund, Class I 2 835 Foreign Large Blend 47 315 75 303 97 270 99 212 75 98 International Multi-Cap Growth   Artio International Equity II Fund, Class A 2 835 Foreign Large Blend 51 315 57 303 95 270 94 212 N/A N/A International Multi-Cap Growth Artio International Equity II Fund, Class I 2 835 Foreign Large Blend 50 315 54 303 93 270 92 212 N/A N/A International Multi-Cap Growth   Artio Select Opportunities Fund, Class A 2 1,075 World Stock 78 219 83 209 90 143 79 83 N/A N/A Global Multi-Cap Growth Artio Select Opportunities Fund, Class I 2 1,075 World Stock 76 219 83 209 89 143 75 83 N/A N/A Global Multi-Cap Growth   Artio Global High Income Fund, Class A 3 682 High Yield Bond 21 582 35 523 92 436 39 384 12 264 High Yield Artio Global High Income Fund, Class I 4 682 High Yield Bond 18 582 31 523 88 436 30 384 7 264 High Yield   Artio Total Return Bond Fund, Class A 4 1,265 Intermediate-Term Bond 60 626 67 594 36 536 47 457 16 312 Intermediate Investment Grade Debt Artio Total Return Bond Fund, Class I 4 1,265 Intermediate-Term Bond 58 626 59 594 28 536 37 457 11 312 Intermediate Investment Grade Debt   Artio Emerging Markets Local Debt Fund, Class A N/A N/A Emerging Markets Bond 16 90 87 74 N/A N/A N/A N/A N/A N/A Emerging Markets Local Currency Debt Artio Emerging Markets Local Debt Fund, Class I N/A N/A Emerging Markets Bond 14 90 86 74 N/A N/A N/A N/A N/A N/A Emerging Markets Local Currency Debt     Note: Data as of March 31, 2013   NA: Not applicable   1.  

Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds and fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested and do not include the effect of loads. If an expense waiver was in effect, it may have had a material effect on the total return or yield for the period.

  For each mutual fund with at least a three-year history, Morningstar calculates a Morningstar Rating™ based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) The Overall Morningstar Rating for a mutual fund is derived from a weighted average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics. A fund's independent Morningstar Rating metric is then compared against the mutual fund universe breakpoints to determine its hypothetical rating. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Data presented reflect past performance, which is no guarantee of future results. © 2013 Morningstar, Inc. All Rights Reserved. This news release is not sales material, nor is it an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which any such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.