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 September 30,
Nine Months Ended September 30,
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
Liabilities and Shareholders' Equity
Liabilities:
Accounts payable, accrued expenses and other
$
8,056
$
3,839
Accrued third party distribution expenses
427
1,022
Deferred revenue
191
70
Deferred tax liability, net
73,640
617
Due to affiliates
9,429
9,966
Operating lease liability
8,001
7,281
Total Liabilities
99,744
22,795
Commitments and contingencies (Note 12)
Shareholders' Equity
Preferred stock, no par value, authorized 20,000 shares; no shares issued and outstanding
-
-
Common stock; $0.10 par value, authorized 50,000 shares; issued and outstanding 18,635 shares (2024) and 17,984 shares (2023), net of treasury stock; 1 and 0 shares at September 30, 2024 and December 31, 2023, respectively
1,863
1,798
Additional paid-in capital
39,217
-
Retained earnings
224,292
207,290
Total Shareholders' Equity
265,372
209,088
Total Liabilities and Shareholders' Equity
$
365,116
$
231,883
Note Regarding Forward-Looking Statements
This news release may contain "forward-looking statements" within the meaning of the federal securities laws that are intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" generally can be identified by the use of forward-looking terminology such as "assumptions," "target," "guidance," "strategy," "outlook," "plans," "projection," "may," "will," "would," "expect," "intend," "estimate," "anticipate," "believe", "potential," or "continue" (or the negative or other derivatives of each of these terms) or similar terminology.
Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, or results. All forward-looking statements, by their nature, are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Actual future objectives, strategies, plans, prospects, performance, conditions, or results may differ materially from those set forth in any forward-looking statement. Some of the factors that may cause actual results or other future events or circumstances to differ from those in forward-looking statements are described in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 and the Company's subsequent Quarterly Reports on Form 10-Q and other periodic reports filed with the Securities and Exchange Commission. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except as required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent filings with the Securities and Exchange Commission.
About Horizon Kinetics Holding Corporation
Horizon Kinetics Holding Corporation (OTCM PINK:HKHC) primarily offers investment advisory services through its subsidiary Horizon Kinetics Asset Management LLC ("HKAM"), a registered investment adviser. HKAM provides independent proprietary research and investment advisory services for mainly long-only and alternative value-based investing strategies. The firm also obtained a portfolio of consumer products, which are marketed and distributed in the retail marketplace, as a result of its August 2024 merger with Scott's Liquid Gold-Inc. The firm's offices are located in New York City, White Plains, New York, and Summit, New Jersey. For more information, please visit http://www.hkholdingco.com.
