Janus Announces First Quarter 2007 Results

Janus Capital Group Inc. (NYSE: JNS) today reported first quarter net income of $35.6 million, or $0.19 per diluted share, compared with net income of $37.7 million, or $0.19 per diluted share, in the fourth quarter 2006. The company’s investment management operating margin for the first quarter 2007 was 27.8% compared with 25.6% for the fourth quarter 2006. Flows and Assets Under Management Average assets under management during the first quarter increased 4.2% to $172.1 billion compared with $165.1 billion during the fourth quarter 2006. At March 31, 2007, the company’s total assets under management were $176.2 billion, an increase of 5.1%, compared with $167.7 billion at December 31, 2006. The increase in assets during the first quarter reflects $3.9 billion in market appreciation and fund performance, long-term net inflows of $3.1 billion and money market net inflows of $1.5 billion. Janus’ INTECH subsidiary had long-term net inflows of $3.1 billion during the first quarter 2007 compared with long-term net inflows of $3.6 billion in the fourth quarter last year. Excluding INTECH, Janus’ long-term net flows were breakeven in the first quarter 2007 versus long-term net outflows of $4.3 billion in the previous quarter. First quarter included a previously announced $0.9 billion subadvised mandate redemption, while the fourth quarter reflected $3.2 billion of subadvised mandate redemptions. Investment Management Janus’ relative investment management performance remained strong during the first quarter. Approximately 74%, 73% and 76% of the funds in the company’s primary retail fund family, Janus Investment Fund (JIF), ranked in the top half of their Lipper categories on a one-, three- and five-year total-return basis, respectively, as of March 31, 2007. Six of those funds ranked in the top 10% of their Lipper peers during the same one-, three- and five-year periods. In addition, approximately 59% of JIF funds earned a four- or five-star overall Morningstar risk-adjusted rating as of March 31, 2007.1 "We’re encouraged that the marketplace seems to be responding to our continued strong investment performance,” said Janus CEO Gary Black. "It’s especially gratifying to see break-even flows from our Janus-managed products.” Financial Discussion Financial Highlights (dollars in millions, except per share data or as noted)     Three Months Ended March 31, December 31, March 31, 2007  2006  2006    Investment Management Segment Average Assets (in billions) $ 172.1  $ 165.1  $ 154.4  Ending AUM (in billions) $ 176.2  $ 167.7  $ 158.1  Revenues $ 247.9  $ 241.2  $ 232.5  Operating Expenses $ 179.0  $ 179.5  $ 169.6  Operating Income $ 68.9  $ 61.7  $ 62.9  Operating Margin 27.8% 25.6% 27.1%   Printing and Fulfillment Operating Loss $ (4.7) $ (2.4) $ (3.7)   Consolidated Net Income $ 35.6  $ 37.7  $ 35.3  Diluted Earnings per Share $ 0.19  $ 0.19  $ 0.17  Shares Repurchased (in millions) 9.4  6.1  5.7  Cost of Shares Repurchased   $ 200.2    $ 124.9    $ 125.0    1 Detailed Lipper total return and Morningstar risk-adjusted rankings for all JIF funds are on pages 9-10. Investment Management Segment First quarter revenues of $247.9 million increased $6.7 million from the previous quarter primarily due to higher average assets under management. Total operating expenses were flat quarter to quarter. An increase in employee compensation, primarily caused by severance charges of $3.4 million, was offset by lower long-term incentive compensation from the final vesting of previous awards and a decline in legal and technology-related spending. Printing and Fulfillment Segment Janus’ printing business, Rapid Solutions Group (RSG), reported an operating loss of $4.7 million in the first quarter of 2007 primarily because of a decline in production volume compared with the previous quarter. Capital and Liquidity At March 31, 2007, Janus had stockholders’ equity of $2.2 billion, cash and investments of $412.1 million and $537.2 million of outstanding debt. On March 30, 2007, Janus increased its ownership of INTECH to approximately 86.5% by purchasing an additional 4% interest in INTECH for $81.0 million. As part of its capital and liquidity management, Janus reduced its outstanding shares by 4.2% during the first quarter by repurchasing 9.4 million shares of its common stock at an average price of $21.22 per share and a total cost of $200.2 million. During the first quarter, Janus completed its second $500 million repurchase program and started a third $500 million program, which the Board of Directors approved January 23, 2007. At March 31, 2007, $430.7 million was available for repurchase under the currently authorized program. First Quarter 2007 Earnings Call Information Janus Capital Group will discuss its results during a conference call on Thursday, April 26 at 10 a.m. Eastern Daylight Time. The call-in number will be 877-301-7574. Anyone outside the U.S. or Canada should call 706-643-3623. The slides used during the presentation will be available in the investor relations section of the Janus Capital Group Web site (www.janus.com/ir) approximately one hour prior to the call. For those unable to join the conference call at the scheduled time, an audio replay will be available on www.janus.com/ir. About Janus Capital Group Inc. Founded in 1969, Denver-based Janus Capital Group Inc. (Janus) is a recognized leader of growth and risk-managed investment strategies. Our commitment to deliver for investors is rooted in our research-intensive approach and relentless passion to gain a competitive edge. At the end of March 2007, Janus managed $176.2 billion in assets for more than four million shareholders, clients and institutions around the globe. Outside the U.S., Janus has offices in London, Tokyo, and Hong Kong. Janus Capital Group consists of Janus Capital Management LLC, Enhanced Investment Technologies, LLC (INTECH) and Capital Group Partners, Inc. (doing business as Rapid Solutions Group). In addition, Janus Capital Group owns 30% of Perkins, Wolf, McDonnell and Company, LLC. Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-3713 or download the file from www.janus.com. Read it carefully before you invest or send money. Data presented reflects past performance, which is no guarantee of future results. Rankings referenced exclude money markets. Funds distributed by Janus Distributors LLC (4/07). This press release includes statements concerning potential future events involving Janus Capital Group Inc. that could differ materially from the events that actually occur. The differences could be caused by a number of factors including those factors identified in Janus’ Annual Report on Form 10-K for the year ended December 31, 2006, on file with the Securities and Exchange Commission (Commission file no. 001-15253), including those that appear under headings such as "Risk Factors” and "Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Many of these factors are beyond the control of the Company and its management. Any forward-looking statements contained in this release are as of the date on which such statements were made. The Company assumes no duty to update them, even if experience, unexpected events, or future changes make it clear that any projected results expressed or implied therein will not be realized. 1 Detailed Lipper total return and Morningstar risk-adjusted rankings for all JIF funds are on pages 9-10. JANUS CAPITAL GROUP INC. UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (dollars in millions, except per share data)     Three Months Ended March 31, December 31, March 31, 2007  2006  2006  Investment Management Revenues: Investment management fees $ 200.9  $ 194.1  $ 185.6  Performance fees 2.5  2.4  4.2  Shareowner servicing fees and other 44.5  44.7  42.7  Total 247.9  241.2  232.5    Investment Management Operating Expenses: Employee compensation and benefits 87.4  82.9  83.4  Long-term incentive compensation 18.7  20.7  22.0  Marketing and advertising 5.1  8.6  5.4  Distribution 30.6  30.1  26.8  Depreciation and amortization 7.1  7.8  8.3  General, administrative and occupancy 30.2  33.0  33.7  Restructuring and impairments 0.4  0.5  -  Mutual fund investigation recoveries (0.5) (4.1) (10.0) Total 179.0  179.5  169.6    Investment Management Operating Income 68.9  61.7  62.9    Printing and Fulfillment Segment: Revenue 23.5  24.7  23.6  Operating expenses 26.1  25.1  25.3  Depreciation and amortization 2.1  2.0  2.0  Printing and Fulfillment Operating Loss (4.7) (2.4) (3.7)   Interest expense (9.5) (10.0) (7.0) Other income, net 7.1  14.0  9.0  Income tax provision (21.8) (21.8) (22.2) Equity in earnings of unconsolidated affiliate 1.7  1.7  1.7  Minority interest in consolidated earnings (6.1) (5.5) (5.4)   Net Income $ 35.6  $ 37.7  $ 35.3    Basic Earnings per Share Weighted average shares outstanding (in millions) 187.3  193.6  210.1  Basic earnings per share $ 0.19  $ 0.19  $ 0.17    Diluted Earnings per Share Weighted average shares outstanding (in millions) 188.6  196.0  211.7  Diluted earnings per share $ 0.19  $ 0.19  $ 0.17    Average Assets Under Management (in billions) $ 172.1  $ 165.1  $ 154.4  JANUS CAPITAL GROUP INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in millions)   March 31, December 31, 2007  2006  Assets Cash and cash equivalents $ 311.3  $ 559.7  Marketable securities 100.8  173.1  Other assets 327.1  291.7  Property and equipment, net 58.2  60.3  Intangibles and goodwill, net 2,529.9  2,453.1  Total Assets $ 3,327.3  $ 3,537.9    Liabilities and Stockholders' Equity Debt $ 537.2  $ 537.2  Other liabilities 196.9  295.0  Deferred income taxes 403.2  399.3  Stockholders' equity 2,190.0  2,306.4  Total Liabilities and Stockholders' Equity $ 3,327.3  $ 3,537.9    UNAUDITED CONDENSED CONSOLIDATED CASH FLOW INFORMATION (dollars in millions)   Three Months Ended March 31, December 31, March 31, Cash provided by (used in): 2007  2006  2006  Operating activities $ (18.0) $ 104.3  $ 32.2  Investing activities (21.5) 229.5  (128.2) Financing activities (208.9) (234.0) (129.4) Net change during period $ (248.4) $ 99.8  $ (225.4)   Free Cash Flow (1) Cash (used in) provided by operating activities $ (18.0) $ 104.3  $ 32.2  Less: capital expenditures (6.6) (6.3) (5.5) $ (24.6) $ 98.0  $ 26.7    Note: (1) Free cash flow is defined as cash flow from operations less capital expenditures. The comparable GAAP measure is cash flow from operations. JANUS CAPITAL GROUP INC. ASSETS & FLOWS BY INVESTMENT DISCIPLINE (dollars in billions)   Three Months Ended March 31, 2007 December 31, 2006 March 31, 2006 Growth/Blend Beginning of period assets $ 66.8  $ 67.0  $ 68.5  Sales 3.9  2.3  3.5  Redemptions 4.7  7.0  3.6  Net sales (redemptions) (0.8) (4.7) (0.1) Market appreciation 2.2  4.5  3.1  End of period assets $ 68.2  $ 66.8  $ 71.5    Global/International Beginning of period assets $ 16.0  $ 13.3  $ 12.2  Sales 1.7  1.4  0.9  Redemptions 1.1  0.7  1.1  Net sales (redemptions) 0.6  0.7  (0.2) Market appreciation 0.5  2.0  1.3  End of period assets $ 17.1  $ 16.0  $ 13.3    Mathematical/Quantitative Beginning of period assets $ 62.3  $ 55.6  $ 44.7  Sales 5.0  5.9  5.7  Redemptions 1.9  2.3  1.7  Net sales (redemptions) 3.1  3.6  4.0  Market appreciation 0.8  3.1  1.8  End of period assets $ 66.3  $ 62.3  $ 50.6    Fixed Income Beginning of period assets $ 4.6  $ 4.7  $ 5.2  Sales 0.6  0.2  0.2  Redemptions 0.5  0.4  0.4  Net sales (redemptions) 0.1  (0.2) (0.3) Market appreciation 0.1  0.1  -  End of period assets $ 4.8  $ 4.6  $ 4.9    Value Beginning of period assets $ 10.5  $ 9.7  $ 10.4  Sales 0.8  0.6  1.0  Redemptions 0.8  0.7  1.0  Net sales (redemptions) -  (0.1) 0.1  Market appreciation 0.3  0.8  0.6  End of period assets $ 10.8  $ 10.5  $ 11.1    Money Market Beginning of period assets $ 7.5  $ 8.0  $ 7.5  Sales 19.1  14.6  9.5  Redemptions 17.6  15.0  10.4  Net sales (redemptions) 1.5  (0.5) (0.8) Market appreciation -  -  -  End of period assets $ 9.0  $ 7.5  $ 6.7    Total Beginning of period assets $ 167.7  $ 158.3  $ 148.5  Sales 31.2  25.0  20.8  Redemptions 26.6  26.2  18.2  Net sales (redemptions) 4.6  (1.2) 2.6  Market appreciation 3.9  10.6  6.9  End of period assets $ 176.2  $ 167.7  $ 158.1    Total Excluding Money Markets Beginning of period assets $ 160.2  $ 150.3  $ 141.0  Sales 12.1  10.5  11.3  Redemptions 9.0  11.2  7.8  Net sales (redemptions) 3.1  (0.7) 3.5  Market appreciation 3.9  10.6  6.9  End of period assets $ 167.2  $ 160.2  $ 151.4    Total Excluding Mathematical/Quantitative & Money Markets Beginning of period assets $ 97.9  $ 94.7  $ 96.2  Sales 7.1  4.6  5.6  Redemptions 7.1  8.9  6.2  Net sales (redemptions) -  (4.3) (0.5) Market appreciation 3.1  7.5  5.1  End of period assets $ 100.9  $ 97.9  $ 100.8    Each line has been rounded on the schedule individually to increase the accuracy of the amounts presented. Therefore totals and subtotals may not foot.   Janus Investment Fund ("JIF") Lipper Rankings Based Lipper Rankings Based Lipper Rankings Based   on Total Returns as of 3/31/07   on Total Returns as of 3/31/07   on Total Returns as of 3/31/07 1-Year 3-Year 5-Year 10-Year Since PM Inception Percen-tile Rank (%) Rank / Total Funds Percen-tile Rank (%) Rank / Total Funds Percen-tile Rank (%) Rank / Total Funds Percen-tile Rank (%) Rank / Total Funds Percentile Rank (%) Rank / Total Funds PM Inception Lipper Category                   Growth Funds                                                 Janus Fund Jan-06 Large-Cap Growth Funds 7  47/722  16  97/613  33  163/503  40  76/190  6  42/711  Janus Twenty Fund(1) Aug-97 Large-Cap Growth Funds 3  15/722  1  1/613  1  3/503  2  2/190  2  4/225  Janus Research Fund Jan-06 Large-Cap Growth Funds 2  14/722  3  13/613  7  32/503  2  3/190  3  17/711  Janus Orion Fund Jun-00 Multi-Cap Growth Funds 12  55/493  2  6/396  5  15/319  -  -  31  68/225  Janus Enterprise Fund Jan-02 Mid-Cap Growth Funds 9  53/622  9  42/497  8  29/394  48  77/161  12  45/386  Janus Venture Fund(1) Jan-01 Small-Cap Growth Funds 2  6/534  5  18/438  7  23/368  27  39/146  17  53/319  Janus Global Research Fund Feb-05 Multi-Cap Growth Funds 4  18/493  -  -  -  -  -  -  2  6/418  Janus Triton Fund   Jun-06   Small-Cap Growth Funds   21    108/534    -    -    -    -    -    -    ‡     Core Funds                                             Janus Growth and Income Fund Dec-03 Large-Cap Core Funds 98  779/800  19  125/669  29  163/567  3  7/253  20  127/656  Janus Contrarian Fund Feb-00 Multi-Cap Core Funds 1  5/893  1  1/656  1  2/476  -  -  11  36/331  Janus Balanced Fund Apr-05 Mixed-Asset Target Alloc. Mod. Funds 69  291/423  21  63/312  40  84/212  6  6/112  16  60/383  Janus Funda-mental Equity Fund Apr-05 Large-Cap Core Funds 94  751/800  2  10/669  7  35/567  1  2/253  4  23/739  INTECH Risk-Managed Stock Fund   Feb-03   Multi-Cap Core Funds   57    503/893    15    98/656    -    -    -    -    29    158/559  International/ Global Funds                                             Janus Overseas Fund Jun-03 Inter-national Funds 1  3/986  1  1/807  7  41/668  4  11/278  1  1/749  Janus Worldwide Fund Jun-04 Global Funds 32  128/402  94  284/302  97  231/238  74  74/100  79  242/306  Janus Global Technology Fund Jan-06 Science & Tech-nology Funds 24  69/288  30  77/262  49  119/242  -  -  31  88/288  Janus Global Life Sciences Fund Dec-98 Health/ Biotech-nology Funds 84  148/177  43  67/158  50  70/139  -  -  37  18/48  Janus Global Oppor-tunities Fund   Jun-01   Global Funds   63    251/402    92    276/302    75    179/238    -    -    23    49/213  Value Funds                                             Janus Mid Cap Value Fund - Inv(2) Aug-98 Mid-Cap Value Funds 48  143/299  59  136/230  43  75/176  -  -  6  4/68  Janus Small Cap Value Fund - Inv.(1,2)   Feb-97   Small-Cap Core Funds   22    154/711    70    378/546    79    342/435    15    20/136    14    18/132  Income Funds                                             Janus Flexible Bond Fund Dec-91 Inter-mediate Inv Grade Debt Funds 35  181/517  55  241/438  16  60/379  33  57/172  4  2/54  Janus High-Yield Fund Dec-03 High Current Yield Funds 31  135/445  41  155/382  67  210/315  16  20/126  43  160/376  Janus Short-Term Bond Fund Jun-03 Short Invest-ment Grade Debt Funds 55  131/241  41  81/200  43  62/146  39  31/80  25  45/181  Janus Federal Tax-Exempt Fund   Feb-05   General Muni Debt Funds   48    116/241    72    167/233    67    145/217    83    114/137    50    116/234  Asset Allocation Funds                                             Janus Smart Portfolio-Growth Dec-05 Mixed-Asset Target Alloc. Growth Funds 11  66/611  -  -  -  -  -  -  8  47/601  Janus Smart Portfolio-Moderate Dec-05 Mixed-Asset Target Alloc. Mod. Funds 18  75/423  -  -  -  -  -  -  10  39/417  Janus Smart Portfolio-Conser-vative   Dec-05   Mixed-Asset Target Alloc. Cons. Funds   11    38/364    -    -    -    -    -    -    4    12/343  Percent of JIF Funds per Lipper Quartile based on Total Returns     1-Year   3-Year   5-Year   10-Year   Since PM Inception 1st Quartile 55.6% 54.5% 42.9% 53.3% 73.1% 2nd Quartile 18.5% 18.2% 33.3% 33.3% 23.1% 3rd Quartile 14.8% 18.2% 14.3% 6.7% 0.0% 4th Quartile   11.1%   9.1%   9.5%   6.7%   3.8% Lipper Inc. – A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested. If an expense waiver was in effect, it may have had a material effect on the total return or yield for the period. Data presented reflects past performance, which is no guarantee of future results. Notes: (1) Closed to new investors (2) Ranking is for the investor share class only; other classes may have different performance characteristics. ‡ The Fund’s since PM-Inception ranking is not available. Janus Investment Fund ("JIF") The Overall Morningstar RatingTM is derived from a weighted average of the performance figures associated with its three-, five-, and ten-year (if applicable) Morningstar Rating(TM) metrics. Based on risk-adjusted returns as of 3/31/2007   Overall Rating Three-Year Rating Five-Year Rating Ten-Year Rating Fund Category Stars # of Funds Stars # of Funds Stars # of Funds Stars # of Funds                                       Janus Fund Large Growth Funds 3 Stars 1390  4 Stars 1390  3 Stars 1118  3 Stars 454  Janus Enterprise Fund Mid-Cap Growth Funds 4 Stars 829  5 Stars 829  5 Stars 679  2 Stars 274  Janus Growth and Income Fund Large Growth Funds 5 Stars 1390  4 Stars 1390  4 Stars 1118  5 Stars 454  Janus Research Fund Large Growth Funds 4 Stars 1390  4 Stars 1390  4 Stars 1118  4 Stars 454  Janus Orion Fund Mid-Cap Growth Funds 5 Stars 829  5 Stars 829  5 Stars 679  N/A  Janus Twenty Fund (1) Large Growth Funds 5 Stars 1390  5 Stars 1390  5 Stars 1118  4 Stars 454  Janus Venture Fund (1) Small Growth Funds 4 Stars 621  4 Stars 621  4 Stars 513  3 Stars 220  Janus Triton Fund Small Growth Funds N/A  N/A  N/A  N/A  Janus Global Research Fund Large Growth Funds N/A  N/A  N/A  N/A  Janus Global Life Sciences Fund Specialty-Health Funds 3 Stars 186  3 Stars 186  3 Stars 166  N/A  Janus Global Technology Fund Specialty-Technology Funds 3 Stars 288  4 Stars 288  3 Stars 265  N/A  Janus Overseas Fund Foreign Large Growth Funds 5 Stars 201  5 Stars 201  5 Stars 176  4 Stars 74  Janus Worldwide Fund World Stock Funds 2 Stars 412  1 Star 412  1 Star 344  2 Stars 158  Janus Global Opportunities Fund World Stock Funds 2 Stars 412  1 Star 412  2 Stars 344  N/A  Janus Balanced Fund Moderate Allocation Funds 4 Stars 871  4 Stars 871  3 Stars 650  4 Stars 358  INTECH Risk-Managed Stock Fund Large Blend Funds 5 Stars 1589  5 Stars 1589  N/A  N/A  Janus Fundamental Equity Fund Large Blend Funds 5 Stars 1589  5 Stars 1589  4 Stars 1249  5 Stars 530  Janus Contrarian Fund Large Blend Funds 5 Stars 1589  5 Stars 1589  5 Stars 1249  N/A  Janus Mid Cap Value Fund - Investor Shares (2) Mid-Cap Value Funds 4 Stars 276  3 Stars 276  4 Stars 204  N/A  Janus Small Cap Value Fund - Investor Shares (1,2) Small Value Funds 3 Stars 310  3 Stars 310  2 Stars 238  4 Stars 79  Janus Federal Tax-Exempt Fund Muni National Long Funds 2 Stars 271  3 Stars 271  2 Stars 260  2 Stars 191  Janus Flexible Bond Fund Intermediate-Term Bond Funds 3 Stars 947  3 Stars 947  4 Stars 779  3 Stars 390  Janus High-Yield Fund High Yield Bond Funds 4 Stars 463  3 Stars 463  3 Stars 385  4 Stars 162  Janus Short-Term Bond Fund Short-Term Bond Funds 3 Stars 377  3 Stars 377  3 Stars 261  3 Stars 159  Janus Smart Portfolio-Growth Moderate Allocation Funds N/A  N/A  N/A  N/A  Janus Smart Portfolio-Moderate Moderate Allocation Funds N/A  N/A  N/A  N/A  Janus Smart Portfolio-Conservative   Conservative Allocation Funds       N/A        N/A        N/A        N/A    Percent of funds rated 4 / 5 Stars 59.1% 59.1% 52.4% 53.3% For each fund with at least a three-year history, Morningstar calculates a Morningstar RatingTM based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a funds 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 the 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. Past performance is no guarantee of future results. Call 1-800-525-3713 or visit janus.com for current month end performance. C-0407-277