NAPERVILLE, Ill., Jan. 27 /PRNewswire-FirstCall/ -- Calamos Asset Management, Inc. (Nasdaq: CLMS) today reported results for the fourth quarter and full year 2008. Below, the financial results are first presented in accordance with GAAP, immediately followed by a discussion of these results on an as-adjusted basis, which excludes the impact of certain one-time expenses on year-to-date results. Management excluded certain one-time items to provide a more relevant comparison to prior periods.





    GAAP Accounting Results

    (in thousands, except    Three Months Ended     Twelve Months Ended
     per share data)            December 31,             December 31,
                             2008         2007        2008         2007

    Revenues               $66,851     $124,526     $391,589     $473,477
    Operating expenses     $45,405      $71,959     $232,492     $300,384
    Operating income       $21,446      $52,567     $159,097     $173,093
    Operating income per
     diluted share, net of
     income taxes            $0.14        $0.32        $1.02        $1.04
    Operating margin          32.1%        42.2%        40.6%        36.6%

    Non-operating income
     (loss)              $(216,442)     $17,604    $(291,899)     $29,901
    Net income (loss)     $(26,067)      $9,279     $(24,521)     $27,745
    Diluted earnings
     (loss) per share       $(1.24)       $0.42       $(1.19)       $1.22

The company today declared a regular quarterly dividend of 5.5 cents per share payable on February 25, 2009 to shareholders of record on February 10, 2009.

Financial Overview

When evaluating the company's operations, management adjusts results to exclude the effect of one-time items, as presented and discussed in Table A. As these items are not expected to recur, management believes that excluding them better enables it to evaluate the company's performance relative to prior periods. For a more comprehensive discussion of these items, please refer to our filings with the U.S. Securities and Exchange Commission on Form 10-Q and Form 10-K. The year-to-date comparisons below are presented on an as-adjusted basis, where appropriate.

Fourth quarter revenues decreased to $66.9 million from $124.5 million in the prior year while operating income decreased to $21.4 million from $52.6 million. Operating income per diluted share, net of income taxes was $0.14 and $0.32 in the fourth quarter of 2008 and 2007, respectively. Non-operating losses during the quarter were $216.4 million compared to non-operating income of $17.6 million in the prior-year quarter. Net loss in the fourth quarter was $26.1 million compared to net income of $9.3 million in the prior year period, resulting in diluted losses per share of $1.24 in the current quarter compared to diluted earnings per share of $0.42 for the same period a year ago.

Full year revenues decreased to $391.6 million from $473.5 million in the prior year while operating income, as adjusted decreased to $159.1 million from $199.5 million. Operating income per diluted share, net of income taxes was $1.02 for 2008 compared to $1.19 per share, as adjusted in the same period a year ago. Full year non-operating losses were $291.9 million compared to non-operating income of $29.9 million in the prior year. Net loss, as adjusted, was $17.8 million for 2008 compared to net income of $31.3 million in the prior year, resulting in diluted losses per share, as adjusted, of $0.85 for 2008 compared to diluted earnings per share, as adjusted of $1.37 for 2007.

Management Commentary

"Following an extremely difficult third quarter, major market indexes declined even more precipitously, causing one of the worst fourth quarters in history. Overall, we have experienced the worst stock market collapse in 75 years. As we close out the year, the largest impact to our business in terms of asset values, fees and market prices occurred during the fourth quarter. During such time, as throughout 2008, we announced several actions to protect our investors and our capital structure, while remaining well positioned for the future," said John P. Calamos, Sr., Chairman, Chief Executive Officer and Co-Chief Investment Officer.

"We decided to be aggressive in further solidifying our capital structure and reduced our indebtedness by $400 million using our investment portfolio as the primary source of funding. This alleviates potential concerns about debt covenants and provides more financial flexibility to navigate the turbulent market conditions. The amount of debt paid down exceeded any covenant concerns and was done because we believe de-levering is advantageous in this environment. However, we remain well capitalized to continue executing our investment strategies and fund growth initiatives that make strategic sense," Calamos continued. "In addition, we announced multiple employee reductions to bring our operating costs in line with our asset base, revenues, and capital structure while maintaining competitive margins. We have worked hard to control expenses beyond compensation costs, including a scaled down IT operation and firm-wide efforts to prioritize projects and reduce discretionary expenses."

"Despite having to make extremely difficult choices that have reduced our staff, our core investment team is intact and focused on the long term buying opportunity we see in growth stocks, convertibles and corporate bonds. At today's prices, we believe that stock and bond market prices offer attractively valued opportunities to earn above-average returns in the next decade. We've seen positive inflows to our recently re-opened Convertible Fund, significant interest in our convertible and convertible blended strategies through our institutional business, and we are pleased with the performance of several of our strategies, notably our Convertible, Market Neutral, and our Growth and Income Strategies, as well as strong absolute and relative performance of our fixed income strategies during 2008," Calamos concluded.

Assets Under Management

Assets under management as of December 31, 2008 were $24.0 billion, representing a decrease of 28 percent from the previous quarter's end. This decrease of $9.3 billion was comprised of $6.7 billion in market depreciation and net redemptions of $2.6 billion. Net redemptions during the quarter included $782 million related to the reduction of leverage by our closed-end funds and $287 million of redemptions by the Company from investment products that it manages used to pre-pay a portion of its long-term debt as described in Non-Operating Results below. Average assets under management were $25.3 billion during the fourth quarter of 2008, compared to $46.9 billion for the same period one year ago.

Assets under management as of December 31, 2008 fell 48 percent from $46.2 billion at December 31, 2007. The decrease in assets under management of $22.2 billion during the year was comprised of $17.6 billion in market depreciation and net redemptions of $4.5 billion. Average assets under management were $37.1 billion during 2008, compared to $44.8 billion in 2007.

Operating Results

Fourth quarter revenues were $66.9 million, a 46 percent decrease from $124.5 million in the fourth quarter of 2007, resulting from a 46 percent decrease in average assets under management. For the three months ended December 31, 2008, operating expenses were $45.4 million, a decrease of $26.6 million, or 37 percent, from $72.0 million in the same period in 2007.

Operating expenses declined during the quarter reflecting the impact of a series of cost containment measures that were initiated as well as lower assets under management. Compensation expense declined by $10.4 million from the same quarter a year ago. The decrease in compensation expense was mostly attributable to decreases in staffing levels as we seek to right-size our business to support current asset levels and to reductions in incentive compensation expenses reflecting the impact that the declining market conditions have had on our business. Separately, during the fourth quarter of 2008, the company incurred $2.0 million in severance-related costs mostly due to IT reorganizational efforts. Distribution expenses decreased by $13.8 million from the prior year's quarter with a decrease in mutual fund assets under management.

Operating income was $21.4 million for the fourth quarter of 2008 versus $52.6 million for 2007. Operating margin was 32.1 percent and 42.2 percent for the current and year-earlier period, respectively. Operating income per diluted share, net of income taxes was $0.14 in the fourth quarter of 2008 and $0.32 in the fourth quarter of 2007.

Revenues for 2008 were $391.6 million, a 17 percent decrease from $473.5 million in 2007, resulting from a 17 percent decrease in average assets under management. For the year ended December 31, 2008, operating expenses, as adjusted were $232.5 million, a 15 percent decrease from $274.0 million in 2007 largely driven by decreases in distribution and underwriting expenses and compensation expenses as previously discussed. Operating income, as adjusted was $159.1 million versus $199.5 million for 2007. Operating margin, as adjusted was 40.6 percent compared with 42.1 percent for the year-earlier period. Operating income per diluted share, net of income taxes, as adjusted was $1.02 per diluted share for 2008 compared to $1.19 for 2007.

Non-Operating Results

In order to right size its balance sheet to match the current business environment while maintaining sufficient capital and liquidity to support its future growth initiatives, including seed capital, and to alleviate potential debt covenant concerns, the Company prepaid $400 million of its outstanding long-term debt and renegotiated its debt covenants. The Company prepaid on a pro rata basis $150 million together with accrued interest and a contractual make-whole amount of $34.9 million. Additionally, the Company was able to negotiate the prepayment of an additional $250 million together with accrued interest but without the contractual make-whole amount. To fund the prepayment, the Company liquidated $378.9 million of investments from its investment portfolio.

Non-operating income (loss) reduced income by $216.4 million during the fourth quarter of 2008 and added $17.6 million to income in the fourth quarter of 2007. For the year ended December 31, 2008, non-operating income (loss) reduced income by $291.9 million and added $29.9 million to income for the prior-year period.

During the fourth quarter of 2008, the Company recorded $189.2 million of net capital losses and dividend income, which was comprised of $193.1 million in realized losses primarily from the sale of certain investments from its investment portfolio and $3.9 million in dividend income.

Management will hold an investor conference call at 5 p.m. Eastern time on Tuesday, January 27. To access the live call and view management's presentation, click on the Investor Relations tab at http://www.calamos.com. Alternatively, participants may listen to the live call by dialing 800-379-3942 (706-679-7206 outside the U.S.), then entering conference ID number 81357313. A replay of the call will be available until the end of the day on February 7th by dialing 800-642-1687 (706-645-9291 outside the U.S.), then entering conference ID number 81357313. A webcast also will be available on the Investor Relations section of http://www.calamos.com for 90 days.

Calamos Asset Management, Inc. (NASDAQ: CLMS) is a diversified investment firm offering equity, fixed income, convertible and alternative investment strategies, among others. The firm serves institutions and individuals via separately managed accounts and a family of open-end and closed-end funds, offering a risk-managed approach to capital appreciation and income-producing strategies. For more information, visit http://www.calamos.com.

From time to time, information or statements provided by us, including those within this news release, may contain certain forward-looking statements relating to future events, future financial performance, strategies, expectations, the competitive environment and regulations. Forward-looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. For a discussion concerning some of these and other risks, uncertainties and other important factors that could affect future results, see "Forward-Looking Information" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, where applicable, "Risk Factors" in the company's annual and quarterly reports filed with the U.S. Securities and Exchange Commission.





                        Calamos Asset Management, Inc.
          Unaudited Consolidated Condensed Statements of Operations
                      (in thousands, except share data)

                            Three Months Ended          Twelve Months Ended
                                December 31,                December 31,
                             2008         2007          2008         2007
    Revenues:
      Investment management
       fees                $46,972      $86,398       $274,174     $325,395
      Distribution and
       underwriting fees    19,289       37,001        114,023      143,994
      Other                    590        1,127          3,392        4,088
        Total revenues      66,851      124,526        391,589      473,477
    Expenses:
      Employee compensation
       and benefits         14,482       24,849         74,483       91,039
      Distribution and
       underwriting expense 13,929       27,758         84,884      104,227
      Amortization of
       deferred sales
       commissions           5,329        6,029         23,417       27,249
      Marketing and sales
       promotion             2,310        3,759         11,908       40,833
      General and
       administrative        9,355        9,564         37,800       37,036
        Total operating
         expenses           45,405       71,959        232,492      300,384
        Operating income    21,446       52,567        159,097      173,093
        Non-operating
         income (loss)    (216,442)      17,604       (291,899)      29,901
    Income (loss) before
     minority interest in
     Calamos Holdings LLC
     and income taxes     (194,996)      70,171       (132,802)     202,994
    Minority interest in
     Calamos Holdings
     LLC                  (153,398)      54,645       (104,494)     156,583
        Income (loss) before
         income taxes      (41,598)      15,526        (28,308)      46,411
    Income taxes           (15,531)       6,247         (3,787)      18,666
        Net income (loss) $(26,067)      $9,279       $(24,521)     $27,745

    Earnings (loss) per
     share, basic           $(1.34)       $0.44         $(1.24)       $1.24
    Weighted average
     shares outstanding,
     basic              19,485,179   21,194,785     19,752,972   22,297,170

    Calculation of
     earnings per share,
     diluted, assuming
     exchange of
     membership units:
      Income (loss) before
       minority interest in
       Calamos Holdings LLC
       and income taxes  $(194,996)     $70,171      $(132,802)    $202,994
      Impact of income
       taxes               (72,792)      28,237        (16,647)      81,644
        Earnings (loss)
         available to
         common
         shareholders     (122,204)      41,934       (116,155)     121,350
    Earnings (loss) per
     share, diluted         $(1.24)       $0.42         $(1.19)       $1.22
    Weighted average
     shares outstanding,
     diluted            98,551,808   98,786,281     97,449,228   99,760,872



                        Calamos Asset Management, Inc.
                         Non-Operating Income (Loss)
                                (in thousands)

                             Three Months Ended         Twelve Months Ended
                                 December 31,               December 31,
    (in thousands)           2008         2007           2008         2007

    Interest income           $475       $3,168         $2,334      $16,706
    Interest expense        (7,595)      (8,150)       (32,010)     (19,555)
      Net interest income
       (expense)            (7,120)      (4,982)       (29,676)      (2,849)

    Capital gains (losses)
     and dividend income  (189,218)      19,884       (162,977)      21,314
    Unrealized appreciation
     (depreciation)        (12,042)        (276)      (132,834)      11,953
    Miscellaneous other
     income                 (1,792)         240         (1,070)       1,080
      Investment and other
       income (loss)      (203,052)      19,848       (296,881)      34,347

    Debt extinguishment
     cost                  (37,498)           -        (37,498)           -

    Minority interest in
     partnership
     investments            31,228        2,737         72,156       (1,597)
      Non-operating
       income (loss)     $(216,442)     $17,603      $(291,899)     $29,901



                        Calamos Asset Management, Inc.
                           Assets Under Management
                                (in millions)

                             Three Months Ended        Twelve Months Ended
                                 December 31,              December 31,
                              2008        2007           2008         2007
    Mutual Funds
    Beginning assets under
     management            $24,848      $35,677        $34,835      $33,704
    Net purchases
     (redemptions)          (2,116)        (263)        (3,859)      (2,469)
    Market appreciation
     (depreciation)         (5,234)        (579)       (13,478)       3,600
      Ending assets under
       management           17,498       34,835         17,498       34,835
      Average assets under
       management           18,203       35,479         27,569       33,892
    Separate Accounts
    Beginning assets under
     management              8,481       11,069         11,373       11,021
    Net purchases
     (redemptions)            (490)         204           (661)      (1,152)
    Market appreciation
     (depreciation)         (1,449)         100         (4,170)       1,504
      Ending assets under
       management            6,542       11,373          6,542       11,373
      Average assets under
       management            7,073       11,392          9,497       10,877
    Total Assets Under
     Management
    Beginning assets under
     management             33,329       46,746         46,208       44,725
    Net purchases
     (redemptions)          (2,606)         (59)        (4,520)      (3,621)
    Market appreciation
     (depreciation)         (6,683)        (479)       (17,648)       5,104
      Ending assets under
       management           24,040       46,208         24,040       46,208
      Average assets under
       management          $25,276      $46,871        $37,066      $44,769



                               At December 31,                Change
                              2008         2007        Amount         Percent
    Mutual Funds
    Open-end funds         $13,594      $27,434       $(13,840)         (50)%
    Closed-end funds         3,904        7,401         (3,497)         (47)
      Total mutual funds    17,498       34,835        (17,337)         (50)
    Separate Accounts
    Institutional accounts   3,483        5,193         (1,710)         (33)
    Managed accounts         3,044        6,040         (2,996)         (50)
    Alternative investments     15          140           (125)         (89)
      Total separate
       accounts              6,542       11,373         (4,831)         (42)
      Ending assets under
       management          $24,040      $46,208       $(22,168)         (48)%



                               At December 31,                 Change
                             2008         2007          Amount        Percent
    Assets by Strategy
    Equity                  $9,486      $22,695       $(13,209)         (58)%
    Balanced                 7,376       14,145         (6,769)         (48)
    Convertible              4,048        4,675           (627)         (13)
    High Yield               1,616        2,801         (1,185)         (42)
    Alternative              1,240        1,740           (500)         (29)
    Fixed Income               130           82             48           59
    Money Market               144           70             74          106
      Ending assets under
       management          $24,040      $46,208       $(22,168)         (48)%



                                   Table A
                        Calamos Asset Management, Inc.
           Unaudited Reconciliation of Non-GAAP Financial Measures

This earnings release announcing results of operations for the three and twelve months ended December 31, 2008 includes references to the following "non-GAAP financial measures" as defined by Regulation G of the Securities and Exchange Commission:



    -- Operating expense, as adjusted
    -- Operating income, as adjusted
    -- Operating income per diluted share, net of income taxes, as adjusted
    -- Operating margin, as adjusted
    -- Net income (loss), as adjusted
    -- Diluted earnings (loss) per share, as adjusted

In evaluating operating performance, management considers operating expenses, operating income, operating income per diluted share, net of income taxes, operating margin, net income (loss) and diluted earnings (loss) per share, each calculated in accordance with GAAP, as well as each item on an as- adjusted basis, which constitutes non-GAAP financial measures. Items presented on an as-adjusted basis exclude the impact of terminating the two closed-end fund additional compensation agreements and the CHW closed-end fund structuring fees incurred in the second quarter of 2007 and the impact of the revaluation of the net deferred tax asset in the second quarter of 2008. As these items are not expected to recur, management believes that excluding these items better enables it to evaluate the company's performance relative to prior periods. Management considers these non-GAAP financial measures when evaluating the company's performance and believes the presentation of these amounts provides the reader with information necessary to analyze the company's results for the periods compared.

Reconciliations of these measurements from the most directly comparable GAAP financial measures for the twelve months ended December 31, 2008 and 2007 are provided in the table below and should be carefully evaluated by the reader (in thousands, except per share data):





                                                      Twelve Months Ended
                                                          December 31,
                                                       2008          2007

    Operating expenses                              $232,492       $300,384
    Termination of closed-end fund compensation
     agreements                                            -         19,500
    Closed-end fund structuring fees                       -          6,904
      Operating expenses, as adjusted               $232,492       $273,980

    Operating income                                $159,097       $173,093
    Termination of closed-end fund compensation
     agreements                                            -         19,500
    Closed-end fund structuring fees                       -          6,904
      Operating income, as adjusted                 $159,097       $199,497

    Operating income per diluted share, net of
     income taxes                                      $1.02          $1.04
    Termination of closed-end fund compensation
     agreements                                            -           0.11
    Closed-end fund structuring fees                       -           0.04
      Operating income per diluted share, net of
       income taxes, as adjusted                       $1.02          $1.19



                                                       Twelve Months Ended
                                                           December 31,
                                                        2008           2007

    Operating margin                                    40.6%          36.6%
    Termination of closed-end fund compensation
     agreements                                            -            4.1%
    Closed-end fund structuring fees                       -            1.4%
      Operating margin, as adjusted                     40.6%          42.1%

    Net income (loss)                               $(24,521)       $27,745
    Termination of closed-end fund compensation
     agreements                                            -          2,634
    Closed-end fund structuring fees                       -            933
    Net deferred tax assets revaluation                6,771              -
      Net income (loss), as adjusted                $(17,750)       $31,312

    Diluted earnings (loss) per share                 $(1.19)         $1.22
    Termination of closed-end fund compensation
     agreements                                            -           0.11
    Closed-end fund structuring fees                       -           0.04
    Net deferred tax assets revaluation                 0.34              -
      Diluted earnings (loss) per share, as
       adjusted                                       $(0.85)         $1.37

SOURCE Calamos Asset Management, Inc.