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MANNING & NAPIER . Manning & Napier , Inc. Reports Third Quarter 2021 Earnings Results October 27 , 2021 FAIRPORT , N.Y. , Oct. 27 , 2021 / PRNewswire / -- Manning & Napier , Inc. ( NYSE : MN ) , ( " Manning & Napier " or the " Company " ) today reported 2021 third quarter results for the period ended September 30 , 2021 . Summary Highlights • Assets under management ( " AUM " ) at September 30 , 2021 were $ 22.0 billion , compared to $ 22.3 billion at June 30 , 2021 • Revenue for the third quarter was $ 37.5 million , an increase of 17 % from the third quarter of 2020 and an increase of 4 % from the second quarter of 2021 • Third quarter income before taxes was $ 9.2 million ; the net income attributable to Manning & Napier , Inc. for the third quarter was $ 6.5 million , or $ 0.29 per diluted share • On a non - GAAP basis , as defined in the Non - GAAP Financial Measures section below , economic net income for the third quarter was $ 6.9 million , or $ 0.30 per adjusted share • The Company's Board of Directors declared a quarterly dividend of $ 0.05 per share of Class A common stock at its July 2021 board meeting " Results for clients were muted in the third quarter with returns generally in - line with benchmarks , which were broadly soft . Our intermediate- to long - term results remain excellent across the vast majority of our investment suite , " commented Marc Mayer , Chairman of the Board and Chief Executive Officer of Manning & Napier . Marc added , " We are making solid progress on our strategic initiatives , strengthening our wealth and asset management businesses , driving forward our comprehensive digital transformation , and targeting positive net flows in 2022. We are building for long term success while simultaneously returning excess capital to shareholders . " Third Quarter 2021 Financial Review Manning & Napier reported third quarter 2021 revenue of $ 37.5 million , an increase of 17 % from revenue of $ 32.1 million reported in the third quarter of 2020 , and an increase of approximately $ 1.5 million , or 4 % , from revenue of $ 36.1 million reported in the second quarter of 2021. These changes in revenue resulted primarily from changes in average AUM over the same periods . Average AUM for the quarter was $ 22.4 billion , a 16 % increase from the third quarter of 2020 and a 2 % increase from the second quarter of 2021 , when average AUM was $ 19.2 billion and $ 21.8 billion , respectively . Revenue as a percentage of average AUM was 0.67 % for the third quarter of 2021 , compared to 0.66 % for both the third quarter of 2020 and the second quarter of 2021 . Total operating expenses for the third quarter of 2021 were $ 28.2 million , an increase of $ 0.4 million , or 2 % , compared with the third quarter of 2020 , and a decrease of less than $ 0.1 million compared with the second quarter of 2021 due to the factors described below . Compensation and related costs were $ 18.7 million for the third quarter of 2021 , an increase of $ 0.1 million , or 1 % , compared with the third quarter of 2020 and an increase of $ 0.4 million , or 2 % , compared with the second quarter of 2021. The change in the current quarter compared to the third quarter of 2020 was driven by increases in our sales incentive accruals as well as one time severance costs , partially offset by the impacts of the implementation of a deferred compensation plan during the first quarter of 2021 , whereby a fraction of incentive compensation for our most highly compensated employees will be invested in our investment products and vested over a multi - year period . The change in the current quarter compared to the second quarter of 2021 is attributed to an increase in our sales incentives accrual , an increase in one - time severance costs , and an increase in payroll expense which is in line with increased headcount . Compensation and related costs as a percentage of revenue were 50 % for the third quarter of 2021 , compared with 58 % in the third quarter of 2020 and 51 % for the second quarter of 2021 . Distribution , servicing and custody expenses for the third quarter of 2021 decreased by less than $ 0.1 million , or 3 % compared with the third quarter of 2020 , and increased by less than $ 0.1 million , or 1 % , compared with the second quarter of 2021. The increase from the second quarter of 2021 is generally in line with increases in average AUM , however the decrease from the third quarter of 2020 stems from business mix generally trending towards asset classes that do not have a distribution fee attached . Other operating costs for the third quarter of 2021 were $ 7.0 million , an increase of approximately $ 0.4 million , or 5 % compared with the third quarter of 2020 , and a decrease of $ 0.5 million , or 7 % , when compared with the second quarter of 2021. The increase during the current quarter as compared to the third quarter of 2020 was driven by a gain recognized in the 2020 period related to a reimbursement of expenses paid previously on behalf of the Company's affiliated mutual funds and collective investment trusts . The decrease compared to the second quarter of 2021 is driven by reduction in professional fees needed to support the digital transformation and the annual exchange process during the second quarter of 2021. Other operating costs as a percentage of revenue for the third quarter of 2021 were 19 % , compared to 21 % for both the third quarter of 2020 and second quarter of 2021 . Operating income was $ 9.3 million for the third quarter of 2021 , an increase of approximately $ 5.1 million from operating income of $ 4.3 million for the third quarter of 2020 , and an increase of $ 1.5 million from operating income of $ 7.8 million for the second quarter of 2021. Operating margin for the third quarter of 2021 increased to 25 % , compared to 13 % for the third quarter of 2020 and 22 % for the second quarter of 2021 . Non - operating loss was less than $ 0.1 million for the quarter , compared to income of $ 0.6 million and $ 0.3 million in the third quarter of 2020 and second quarter of 2021 , respectively . The third quarter of 2021 includes approximately $ 0.1 million of net losses on investments held by the Company , compared to net gains of $ 0.4 million in both the third quarter of 2020 and the second quarter of 2021. Interest and dividend income for the third quarter of 2021 was less than $ 0.1 million , compared to $ 0.1 million in both the third quarter of 2020 and the second quarter of 2021 . The Company recognized no change during the third quarter of 2021 , compared to an expense of $ 0.2 million in the second quarter of 2021 , related to changes in the Company's expected tax benefits and the corresponding changes in the payment of such benefits under the tax receivable agreement with the other holders of units of Manning & Napier Group , LLC ( " Manning & Napier Group " ) . Income before provision for income taxes was $ 9.2 million for the quarter , compared to $ 4.8 million in the third quarter of 2020 and $ 8.0 million in the second quarter of 2021. The Company recognized a provision for income taxes of $ 2.5 million in the third quarter of 2021 , compared to $ 1.7 million and $ 1.3 million in the third quarter of 2020 and second quarter of 2021 , respectively . The increase in the Company's effective tax rate during the current quarter compared to the second quarter of 2021 is attributed to the discrete benefits received from the exercise of stock options during the second quarter of 2021 that did not occur in the third quarter of 2021 . Net income attributable to the controlling and the non - controlling interests for the third quarter of 2021 was $ 6.7 million , compared to $ 3.1 million in the third quarter of 2020 and $ 6.7 million in the second quarter of 2021. Net income attributable to Manning & Napier , Inc. for the third quarter of 2021 was $ 6.5 million , or $ 0.35 per basic and $ 0.29 per diluted share , compared to $ 2.5 million , or $ 0.15 per basic and $ 0.13 per diluted share , in the third quarter of 2020 and $ 5.9 million , or $ 0.35 per basic and $ 0.29 per diluted share , in the second quarter of 2021 and reflects the public ownership of the Company's subsidiary , Manning & Napier Group . The remaining ownership interest is attributable to the other members of Manning & Napier Group . On a Non - GAAP basis , as defined in the Non - GAAP Financial Measures section of this release , Manning & Napier reported third quarter 2021 economic income of $ 9.8 million , compared to $ 5.2 million in the third quarter of 2020 and $ 8.8 million in the second quarter of 2021. The Company reported economic net income of $ 6.9 million , or $ 0.30 per adjusted share , in the third quarter of 2021 compared to $ 3.2 million , or $ 0.14 per adjusted share , in the third quarter of 2020 and $ 7.4 million , or $ 0.31 per adjusted share , in the second quarter of 2021. The Company's adjusted income taxes during the third quarter of 2021 were $ 2.9 million , compared to $ 2.0 million for the third quarter of 2020 and $ 1.5 million for the second quarter of 2021 . Nine months ended September 30 , 2021 Financial Review Manning & Napier reported 2021 year - to - date revenue of $ 107.8 million , an increase of 15 % from revenue of $ 93.5 million reported in the same period in 2020. This increase was driven by changes in average AUM , which increased by 15 % from the prior year to $ 21.5 billion in 2021. Revenue as a percentage of average AUM was 0.67 % and 0.66 % for the nine months ended September 30 , 2021 and 2020 , respectively . Total operating expenses for 2021 year - to - date were $ 84.5 million , relatively flat when compared to the same period in 2020 . Compensation and related costs for the nine months ended September 30 , 2021 increased by $ 0.7 million , or 1 % , when compared to the same period in 2020. This change was driven by increased incentive compensation accruals based on increases in both sales and year to date performance in 2021 , partially offset by the impacts of the implementation of a deferred compensation plan during the first quarter of 2021. Compensation and related costs as a percentage of revenue were 52 % for 2021 year - to - date compared to 59 % for the same period in 2020 .