Teton Advisors, Inc. (“Teton” or the “Company”) (OTCQX: TETAA) announced its fourth quarter and full year 2022 results including cash and marketable securities. The Company’s Q4-2022 and year end highlights are as follows:

• Full year fully diluted GAAP EPS of $1.18 compared to $1.85 a year ago. Fourth quarter fully diluted GAAP EPS of $0.27 compared to $0.43 a year ago.
• Full year fully diluted Cash EPS¹ of $1.62 compared to $2.10 a year ago. Fourth quarter fully diluted Cash EPS¹ of $0.49 compared to $0.50 a year ago.
• Full year Revenues of $13.8 million, down 16% year-over-year. Fourth quarter Revenues of $3.2 million, down 22% quarter-over-quarter.
• Full year Average AUM of $1.7 billion, down 15% year-over-year.
• Cash, cash equivalents and marketable securities totaling $21.6 million as of December 31, 2022, an increase of 60% compared to $13.5 million at the prior year.
• Successfully completed executive transition with longtime partner, Stephen Bondi appointed as CEO.

“Teton continues to be a strong foundation for growth centered on its strengths in smaller company, active investing. Also, as part of a planned CEO transition commenced 18 months ago, I welcome Steve Bondi in joining as the Company’s CEO. I am delighted we can extend our long relationship with Steve to the executive office,” said Marc Gabelli, interim Chief Executive Officer and Chairman of the Board.

Fourth quarter net income and fully diluted earnings per share were $0.4 million and $0.27, respectively, compared to a net income $0.6 million and $0.43 for the same period a year ago. Excluding certain non-cash items, Cash Earnings¹ and Cash Earnings per fully diluted share were $0.8 million and $0.49, respectively, for the current quarter as compared to $0.6 million and $0.50 for the comparative quarter in 2021.

Revenues were $3.2 million for the quarter versus $4.1 million for the comparative quarter in 2021. Average AUM for the quarter was $1.5 billion versus $2.0 billion for the fourth quarter in 2021.

“I am pleased with the year’s overall results. Our portfolio management remains competitive, with key strengths in smaller company value investing. The Company held its margins well against otherwise broader market declines. Additionally, the Teton platform has further room for efficiencies. The year ahead will bring continued focus on operations,” added Marc Gabelli.

¹Cash earnings and cash earnings per fully diluted share are non-GAAP performance measures and are explained and reconciled in the Supplemental Financial Information section starting on page 6 of this press release. The quarterly and full year results include the non-cash amortization expense of our intangible assets. In addition, the Company recognized a non-cash impairment charge of $400,000 related to its intangible assets for the fourth quarter of 2022. There were no impairment charges in 2021.

Notice of Teton’s Annual General Meeting

The Company cordially invites you to participate in its 2023 Annual Meeting of Shareholders (the “Annual Meeting”) to be held on Wednesday, May 24, 2023 at 8:30 A.M., Eastern Time as announced. Immediately following the Annual Meeting, a company review for shareholders will commence to discuss operations.

For access to the webcast of each meeting, you must register at https://www.tetonadv.com/register. After registering, you will receive a confirmation email containing information about joining the meeting from a computer or telephone. Any questions can be directed to our Secretary at info@tetonadv.com or (914) 457-1077.

Appointment of Chief Executive Officer

Teton welcomes Stephen G. Bondi as Chief Executive Officer of Teton Advisors, Inc. effective April 24, 2023. Mr. Bondi has been a member of our Board of Directors since 2017 and has over 40 years of experience in the asset management industry. He previously served as Chief Compliance Officer & Chief Financial Officer for Mittleman Investment Management, LLC, a subsidiary of Aimia Inc., and a provider of value-oriented investment advisory services to institutional investors and high-net-worth individuals.

“I am proud to be able to utilize my extensive experience in the asset management business, including with traditional and alternative investment products, to lead the well-experienced and strong-performing teams at Teton. My six years as a Teton Board member and nearly eighteen years of experience at the Gabelli affiliates of Teton, will provide me with the familiarity necessary to excel in my new role,” said Stephen Bondi.

Supplemental Financial Information

As supplemental information, we provide a non-U.S. generally accepted accounting principles (“non-GAAP”) performance measure that we refer to as Cash Earnings. We provide this measure in addition to, but not as a substitute for, net income reported on a U.S. generally accepted accounting principles (“GAAP”) basis. Our management and the Board of Directors review Cash Earnings to evaluate our ongoing performance, allocate resources and review our dividend policy. We believe that this non-GAAP performance measure, while not a substitute for GAAP net income, is useful for management and investors when evaluating our underlying operating and financial performance and our available resources. We do not advocate that investors consider this non-GAAP measure without considering financial information prepared in accordance with GAAP.

In calculating quarterly Cash Earnings, we add back to net income, the non-cash amortization expense associated with our intangible assets that were acquired in the Keeley acquisition. In addition, as a result of an assessment of the carrying value of the intangible assets, the Company recognized a non-cash impairment charge of $400,000 in the fourth quarter of 2022. For purposes of calculating Cash Earnings, the Company added back the after-tax amounts associated with this impairment charge of $280,200. There was no non-cash impairment charge in fourth quarter of 2021. Although depreciation on property & equipment and amortization of leaseholds are also non-cash expenses, we do not add it back when calculating Cash Earnings because those charges represent a decline in the value of the related assets that will ultimately require replacement.

The following table provides a reconciliation of net income to Cash Earnings and Cash Earnings Per Share for the quarterly periods presented:

In calculating full year Cash Earnings, we add back to net income the non-cash amortization expense associated with our intangible assets that were acquired in the Keeley acquisition. In addition, as a result of an assessment of the carrying value of the intangible assets, the Company recognized a non-cash impairment charge of $400,000 for 2022. For purposes of calculating Cash Earnings, the Company added back the after-tax amounts associated with this impairment charge of $280,200. There was no non-cash impairment charge in 2021. Although depreciation on property & equipment and amortization of leaseholds are also non-cash expenses, we do not add it back when calculating Cash Earnings because those charges represent a decline in the value of the related assets that will ultimately require replacement.

The following table provides a reconciliation of net income to Cash Earnings and Cash Earnings Per Share for the full year periods presented:

ABOUT TETON

Teton Advisors, Inc. (OTCQX: TETAA) is a specialist in smaller company investing, serving a diverse client base of institutional, high net worth and mutual fund investors under brands including Teton Westwood, Gabelli and Keeley. The company was founded on a commitment to uncover value by focusing on companies that are misunderstood or ignored by the market utilizing methodologies developed by investment pioneers Mario Gabelli and John L. Keeley, Jr. As active, fundamental investors, the Teton portfolio teams think independently and focus on identifying short-term market inefficiencies to generate long-term alpha. Teton’s investment professionals share in the belief that being different is the cornerstone to discovering hidden value in equities. The Teton time tested investment approaches can help set apart your client portfolios, delivering differentiated attributes to round out a broader portfolio. From modest beginnings over 40 years ago, to today, The Disciplined Discovery of Value™ shapes the cornerstone for our clients' long-term success.

Notification to all Teton Advisors, Inc. Class B Shareholders

Class B shares are convertible on a one-for-one basis into Class A shares that trade through multiple market makers on OTCQX: TETAA. Teton shareholders may convert their Class B Shares into Class A Shares, which traded recently at $16.50 per share on April 5, 2023. For those Class B shareholders interested in conversion, please see the Investor Relations page on Teton’s website to complete a Conversion Notice Request Form - (http://tetonadv.com/documents/ConversionNotice.pdf).

SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

Our disclosure and analysis in this press release contain some forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. Such statements are subject to contingencies and uncertainties, some or all of which may be material. We direct your attention to the cautionary statements regarding forward-looking information set forth in documents on Teton’s website. We do not undertake to update publicly any forward-looking statements if we subsequently learn that we are unlikely to achieve our expectations or if we receive any additional information relating to the subject matter of our forward-looking statements.

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