##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED: March 31, 2007
 - OR -
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
 Commission File Number: 000-51003
 
 CALAMOS ASSET MANAGEMENT, INC.
 (Exact Name of Registrant as Specified in its Charter)
 
 Delaware
    
    32-0122554(State or Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification No.)2020 Calamos Court, Naperville, Illinois
    
    60563(Address of Principal Executive Offices)
    
    (Zip Code)
 (630) 245-7200
 
 þ o
  o þ o
 o þ




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TABLE OF CONTENTS  PART I  FINANCIAL INFORMATIONItem 1. Financial StatementsItem 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3. Quantitative and Qualitative Disclosures About Market RiskItem 4. Controls and ProceduresPART II  OTHER INFORMATIONItem 1. Legal ProceedingsItem 2. Unregistered Sales of Equity Securities and Use of ProceedsItem 6. ExhibitsSIGNATURESEmployment Agreement with Philip E. Moriarty, IICertificationCertificationSection 906 CertificationSection 906 Certification    Table of Contents  
 PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 CALAMOS ASSET MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except share data)
 March 31,
    
    
    December 31,2007
    
    
    2006(unaudited)ASSETS:Current assetsCash and cash equivalents
    
    $
    263,833
    
    
    $
    328,841Receivables:Affiliates and affiliated funds
    
    
    25,461
    
    
    
    26,431Customers
    
    
    9,115
    
    
    
    10,218Investment securities
    
    
    193,050
    
    
    
    143,112Partnership
securities
    
    
    120,184
    
    
    
    90,528Prepaid expenses
    
    
    3,299
    
    
    
    2,383Deferred tax assets, net
    
    
    6,602
    
    
    
    7,375Other assets
    
    
    8,128
    
    
    
    138Total current assets
    
    
    629,672
    
    
    
    609,026Non-current assetsDeferred tax assets, net
    
    
    91,018
    
    
    
    91,865Deferred sales commissions
    
    
    45,037
    
    
    
    49,891Property and equipment, net of accumulated depreciation ($15,147
at 3/31/07 and $13,233 at 12/31/06)
    
    
    43,352
    
    
    
    43,615Other non-current assets
    
    
    1,352
    
    
    
    1,443Total non-current assets
    
    
    180,759
    
    
    
    186,814Total assets
    
    
    810,431
    
    
    
    795,840LIABILITIES AND STOCKHOLDERS EQUITY:Current liabilitiesAccounts payable:Brokers
    
    
    20,369
    
    
    
    20,969Affiliates and affiliated funds
    
    
    224
    
    
    
    264Accrued compensation and benefits
    
    
    6,705
    
    
    
    22,722Accrued expenses and other current liabilities
    
    
    24,333
    
    
    
    10,942Total current liabilities
    
    
    51,631
    
    
    
    54,897Long-term liabilitiesLong-term debt
    
    
    150,000
    
    
    
    150,000Other long-term liabilities
    
    
    8,014
    
    
    
    8,003Total long-term liabilities
    
    
    158,014
    
    
    
    158,003Total liabilities
    
    
    209,645
    
    
    
    212,900Minority interest in partnership investments
    
    
    47,472
    
    
    
    48,850Minority interest in Calamos Holdings LLC
    
    
    332,657
    
    
    
    319,513Stockholders equity:Class A Common Stock, $0.01 par value. Authorized 600,000,000 shares;
issued and outstanding 23,324,082 shares at 3/31/07 and 23,161,898
shares at 12/31/06
    
    
    233
    
    
    
    232Class B Common Stock, $0.01 par value. Authorized 1,000 shares; issued
and outstanding 100 shares
    
    
    0
    
    
    
    0Additional paid-in capital
    
    
    158,362
    
    
    
    157,724Retained earnings
    
    
    57,196
    
    
    
    52,261Accumulated other comprehensive income
    
    
    4,866
    
    
    
    4,360Total stockholders equity
    
    
    220,657
    
    
    
    214,577Total liabilities, minority interest and stockholders equity
    
    $
    810,431
    
    
    $
    795,840
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CALAMOS ASSET MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31, 2007 and 2006
(in thousands, except share data)
(unaudited)
 2007
    
    
    2006Revenues:Investment management fees
    
    $
    78,475
    
    
    $
    81,479Distribution and underwriting fees
    
    
    36,181
    
    
    
    38,140Other
    
    
    1,044
    
    
    
    999Total revenues
    
    
    115,700
    
    
    
    120,618Expenses:Employee compensation and benefits
    
    
    20,766
    
    
    
    19,006Distribution and underwriting expense
    
    
    25,027
    
    
    
    24,965Amortization of deferred sales commissions
    
    
    7,878
    
    
    
    7,740Marketing and sales promotion
    
    
    3,482
    
    
    
    3,223General and administrative
    
    
    8,392
    
    
    
    7,059Total operating expenses
    
    
    65,545
    
    
    
    61,993Operating income
    
    
    50,155
    
    
    
    58,625Other income (expense):Net interest income (expense)
    
    
    1,994
    
    
    
    362Investment and other income
    
    
    392
    
    
    
    11,931Minority interest in partnership investments
    
    
    751
    
    
    
    (6,262
    )Total other income (expense), net
    
    
    3,137
    
    
    
    6,031Income before minority interest in Calamos Holdings LLC
and income taxes
    
    
    53,292
    
    
    
    64,656Minority interest in Calamos Holdings LLC
    
    
    40,708
    
    
    
    49,623Income before income taxes
    
    
    12,584
    
    
    
    15,033Income taxes
    
    
    5,050
    
    
    
    6,028Net income
    
    $
    7,534
    
    
    $
    9,005Earnings per shareBasic
    
    $
    0.32
    
    
    $
    0.39Diluted
    
    $
    0.32
    
    
    $
    0.38Weighted average shares outstandingBasic
    
    
    23,324,182
    
    
    
    23,161,998Diluted
    
    
    100,764,966
    
    
    
    100,973,155Cash dividends per share
    
    $
    0.11
    
    
    $
    0.09
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CALAMOS ASSET MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
Three Months Ended March 31, 2007
(in thousands)
(unaudited)
 AccumulatedAdditional
    
    
    
    
    
    
    OtherCommon
    
    
    Paid-in
    
    
    Retained
    
    
    ComprehensiveStock
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    TotalBalance at December 31, 2006
    
    $
    232
    
    
    $
    157,724
    
    
    $
    52,261
    
    
    $
    4,360
    
    
    $
    214,577Net income
    
    
    
    
    
    
    
    
    
    
    7,534
    
    
    
    
    
    
    
    7,534Changes in unrealized gains on available-for-sale securities, net of minority interest and
income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    470
    
    
    
    470Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,004Issuance of common stock under stock
incentive plans (162,184 Class A
common shares)
    
    
    1
    
    
    
    261
    
    
    
    
    
    
    
    36
    
    
    
    298Compensation expense recognized under
stock incentive plans, net of minority
interest
    
    
    
    
    
    
    377
    
    
    
    
    
    
    
    
    
    
    
    377Dividend equivalent accrued under stock
incentive plans, net of minority interest
    
    
    
    
    
    
    
    
    
    
    (33
    )
    
    
    
    
    
    
    (33
    )Dividends declared
    
    
    
    
    
    
    
    
    
    
    (2,566
    )
    
    
    
    
    
    
    (2,566
    )Balance at March 31, 2007
    
    $
    233
    
    
    $
    158,362
    
    
    $
    57,196
    
    
    $
    4,866
    
    
    $
    220,657
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CALAMOS ASSET MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 2007 and 2006
(in thousands)
(unaudited)
 2007
    
    
    2006Cash and cash equivalents at beginning of year
    
    $
    328,841
    
    
    $
    210,469Cash flows from operating activities:Net income
    
    
    7,534
    
    
    
    9,005Adjustments to reconcile net income to net cash provided by
operating activities:Minority interest in partnership investments
    
    
    (751
    )
    
    
    6,262Minority interest in Calamos Holdings LLC
    
    
    40,708
    
    
    
    49,623Amortization of deferred sales commissions
    
    
    7,878
    
    
    
    7,740Other depreciation and amortization
    
    
    1,985
    
    
    
    1,653Unrealized depreciation (appreciation) on CFS securities
and partnership securities
    
    
    950
    
    
    
    (11,132
    )Deferred taxes
    
    
    1,516
    
    
    
    2,672Stock-based compensation
    
    
    1,622
    
    
    
    1,788Employee taxes paid on vesting under stock incentive plans
    
    
    (1,853
    )
    
    
    (2,255
    )(Increase) decrease in assets:Accounts receivable:Affiliates and affiliated mutual funds
    
    
    913
    
    
    
    (2,353
    )Customers
    
    
    1,103
    
    
    
    (1,941
    )Deferred sales commissions
    
    
    (3,024
    )
    
    
    (9,447
    )Other assets
    
    
    (9,271
    )
    
    
    (959
    )Increase (decrease) in liabilities:Accounts payable
    
    
    (640
    )
    
    
    1,802Accrued compensation and benefits and deferred compensation
    
    
    (16,017
    )
    
    
    (11,991
    )Other liabilities and accrued expenses
    
    
    13,853
    
    
    
    1,521Net cash provided by operating activities
    
    
    46,506
    
    
    
    41,988Cash flows used in investing activities:Net additions to property and equipment
    
    
    (1,651
    )
    
    
    (3,615
    )Net
purchases of securities and partnership securities
    
    
    (77,743
    )
    
    
    (1,763
    )Net cash used in investing activities
    
    
    (79,394
    )
    
    
    (5,378
    )Cash flows used in financing activities:Deferred tax benefit on vesting under stock incentive plans
    
    
    (209
    )
    
    
    (289
    )Cash distributions paid to minority shareholders
    
    
    (29,345
    )
    
    
    (31,185
    )Cash dividends paid to common shareholders
    
    
    (2,566
    )
    
    
    (2,085
    )Net cash used in financing activities
    
    
    (32,120
    )
    
    
    (33,559
    )Net increase (decrease) in cash
    
    
    (65,008
    )
    
    
    3,051Cash and cash equivalents at end of period
    
    $
    263,833
    
    
    $
    213,520
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CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 (1) Organization and Description of Business
  (2) Basis of Presentation
      (3) Partnership Securities
  March 31,
    
    
    December 31,(in thousands)
    
    2007
    
    
    2006Calamos Equity Opportunities Fund LP:Securities owned
    
    $
    102,015
    
    
    $
    110,956Securities sold but not yet purchased
    
    
    (14,139
    )
    
    
    (24,104
    )Calamos Equity Opportunities Fund LP securities, net
    
    
    87,876
    
    
    
    86,852Calamos Market Neutral Opportunities Fund LP:Securities owned
    
    
    47,365
    
    
    
    Securities sold but not yet purchased
    
    
    (15,057
    )
    
    
    Calamos Market Neutral Opportunities Fund LP securities, net
    
    
    32,308
    
    
    
    Investment in Calamos Multi-Strategy, L.P.
    
    
    
    
    
    
    3,676Partnership securities
    
    $
    120,184
    
    
    $
    90,528
  -6-




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CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (4) Earnings Per Share
  Three Months EndedMarch 31,(in thousands, except per share data)
    
    2007
    
    
    2006Earnings per share  basicEarnings available to common shareholders
    
    $
    7,534
    
    
    $
    9,005Weighted average shares outstanding
    
    
    23,324
    
    
    
    23,162Earnings per share  basic
    
    $
    0.32
    
    
    $
    0.39Earnings per share  dilutedIncome before minority interest in Calamos
Holdings LLC and income taxes
    
    $
    53,292
    
    
    $
    64,656Less: Impact of income taxes
    
    
    21,386
    
    
    
    25,927Earnings available to common shareholders
    
    $
    31,906
    
    
    $
    38,729Weighted average shares outstanding
    
    
    23,324
    
    
    
    23,162Conversion of membership units for common stock
    
    
    77,000
    
    
    
    77,000Dilutive impact of restricted stock units
    
    
    368
    
    
    
    660Dilutive impact of stock options
    
    
    73
    
    
    
    151Weighted average shares and potential dilutive
shares outstanding
    
    
    100,765
    
    
    
    100,973Earnings per share  diluted
    
    $
    0.32
    
    
    $
    0.38
  Share-Based Payment
 -7-




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CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  (5) Incentive Compensation Plan
     (6) Accounting for Uncertainty in Income Taxes
 Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109.
   -8-




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CALAMOS ASSET MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 (7) Recently Issued Accounting Pronouncements
 Fair Value Measurements
 The Fair Value Option for Financial Assets and
Financial Liabilities  Including an amendment of FASB Statement No. 115
 -9-




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
    March 31,(in millions)
    
    2007
    
    
    2006Mutual FundsOpen-end funds
    
    $
    25,706
    
    
    $
    29,216Closed-end funds
    
    
    6,380
    
    
    
    6,176Total mutual funds
    
    
    32,086
    
    
    
    35,392Separate AccountsInstitutional accounts
    
    
    4,849
    
    
    
    5,716Managed accounts
    
    
    5,482
    
    
    
    6,393Alternative investments
    
    
    133
    
    
    
    100Total separate accounts
    
    
    10,464
    
    
    
    12,209Total assets under management
    
    $
    42,550
    
    
    $
    47,601
   -10-




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Operating Results
 Three Months Ended March 31, 2007 Compared to Three Months Ended March 31, 2006
 Assets Under Management
  Three Months EndedMarch 31,
    
    
    Change(in millions)
    
    2007
    
    
    2006
    
    
    Amount
    
    
    PercentMutual FundsBeginning assets under management
    
    $
    33,704
    
    
    $
    32,244
    
    
    $
    1,460
    
    
    
    5
    %Net purchases (redemptions)
    
    
    (1,952
    )
    
    
    1,388
    
    
    
    (3,340
    )
    
    
    *Market appreciation
    
    
    334
    
    
    
    1,760
    
    
    
    (1,426
    )
    
    
    81Ending assets under management
    
    
    32,086
    
    
    
    35,392
    
    
    
    (3,306
    )
    
    
    9Average assets under management
    
    
    33,011
    
    
    
    34,254
    
    
    
    (1,243
    )
    
    
    4Separate AccountsBeginning assets under management
    
    
    11,021
    
    
    
    11,561
    
    
    
    (540
    )
    
    
    5Net purchases (redemptions)
    
    
    (679
    )
    
    
    52
    
    
    
    (731
    )
    
    
    *Market appreciation
    
    
    122
    
    
    
    596
    
    
    
    (474
    )
    
    
    80Ending assets under management
    
    
    10,464
    
    
    
    12,209
    
    
    
    (1,745
    )
    
    
    14Average assets under management
    
    
    10,770
    
    
    
    12,012
    
    
    
    (1,242
    )
    
    
    10Total Assets Under ManagementBeginning assets under management
    
    
    44,725
    
    
    
    43,805
    
    
    
    920
    
    
    
    2Net purchases (redemptions)
    
    
    (2,631
    )
    
    
    1,440
    
    
    
    (4,071
    )
    
    
    *Market appreciation
    
    
    456
    
    
    
    2,356
    
    
    
    (1,900
    )
    
    
    81Ending assets under management
    
    
    42,550
    
    
    
    47,601
    
    
    
    (5,051
    )
    
    
    11Average assets under management
    
    $
    43,781
    
    
    $
    46,266
    
    
    $
    (2,485
    )
    
    
    5
    %
 
 *
    
    Not meaningful.   -11-




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Revenues
  Three Months Ended March 31,
    
    
    Change(in thousands)
    
    2007
    
    
    2006
    
    
    Amount
    
    
    PercentInvestment management fees
    
    $
    78,475
    
    
    $
    81,479
    
    
    $
    (3,004
    )
    
    
    4
    %Distribution and underwriting fees
    
    
    36,181
    
    
    
    38,140
    
    
    
    (1,959
    )
    
    
    5Other
    
    
    1,044
    
    
    
    999
    
    
    
    45
    
    
    
    5Total revenues
    
    $
    115,700
    
    
    $
    120,618
    
    
    $
    (4,918
    )
    
    
    4
    %
   Operating Expenses
  Three Months Ended March 31,
    
    
    Change(in thousands)
    
    2007
    
    
    2006
    
    
    Amount
    
    
    PercentEmployee compensation and benefits
    
    $
    20,766
    
    
    $
    19,006
    
    
    $
    1,760
    
    
    
    9
    %Distribution and underwriting expense
    
    
    25,027
    
    
    
    24,965
    
    
    
    62
    
    
    
    0Amortization of deferred sales
commissions
    
    
    7,878
    
    
    
    7,740
    
    
    
    138
    
    
    
    2Marketing and sales promotion
    
    
    3,482
    
    
    
    3,223
    
    
    
    259
    
    
    
    8General and administrative
    
    
    8,392
    
    
    
    7,059
    
    
    
    1,333
    
    
    
    19Total operating expenses
    
    $
    65,545
    
    
    $
    61,993
    
    
    $
    3,552
    
    
    
    6
    %
   -12-




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Other Income (Expense), Net
  Three Months Ended March 31,(in thousands)
    
    2007
    
    
    2006
    
    
    ChangeNet interest income (expense)
    
    $
    1,994
    
    
    $
    362
    
    
    $
    1,632Investment and other income
    
    
    392
    
    
    
    11,931
    
    
    
    (11,539
    )Minority interest in partnership
investments
    
    
    751
    
    
    
    (6,262
    )
    
    
    7,013Total other income (expense), net
    
    $
    3,137
    
    
    $
    6,031
    
    
    $
    (2,894
    )
    Income Taxes
  Liquidity and Capital Resources
  -13-




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March 31,
    
    December 31,(in thousands)
    
    2007
    
    2006Statements of financial condition data:Cash and cash equivalents
    
    $
    263,833
    
    
    $
    328,841Receivables
    
    
    34,576
    
    
    
    36,649Investment securities
    
    
    193,050
    
    
    
    143,112Partnership
securities
    
    
    120,184
    
    
    
    90,528Deferred tax assets, net
    
    
    97,620
    
    
    
    99,240Deferred sales commissions
    
    
    45,037
    
    
    
    49,891Long-term debt
    
    
    150,000
    
    
    
    150,000
  March 31,(in thousands)
    
    2007
    
    2006Cash flow data:Net cash provided by operating activities
    
    $
    46,506
    
    
    $
    41,988Net cash used in investing activities
    
    
    (79,394
    )
    
    
    (5,378
    )Net cash used in financing activities
    
    
    (32,120
    )
    
    
    (33,559
    )
      Recently Issued Accounting Pronouncements
 Fair Value Measurements
 The Fair Value Option for Financial Assets and
Financial Liabilities  Including an amendment of FASB Statement No. 115
 -14-




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Critical Accounting Policies
  Forward-Looking Information
   Risk Factors
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  -15-




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Item 4. Controls and Procedures
   
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 6. Exhibits
 3(i)
    
    Amended and Restated Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.1 to the Registrants Current Report
on Form 8-K filed with the Securities and Exchange Commission on November 2,
2004).3(ii)
    
    Amended and Restated By-Laws of the Registrant (incorporated by reference to
Exhibit 3.2 to the Registrants Current Report on Form 8-K filed with the
Securities and Exchange Commission on April 26, 2005).3(iii)
    
    Amended and Restated By-Laws of the Registrant (incorporated by reference to
Exhibit 3.2 to the Registrants Current Report on Form 8-K filed with the
Securities and Exchange Commission on January 23, 2007).3(iv)
    
    Amended and Restated By-Laws of the Registrant (incorporated by reference to
Exhibit 3.2 to the Registrants Current Report on Form 8-K filed with the
Securities and Exchange Commission on March 8, 2007).4.1
    
    Stockholders Agreement among John P. Calamos, Sr., Nick P. Calamos and John
P. Calamos, Jr., certain trusts controlled by them, Calamos Family Partners,
Inc. and the Registrant (incorporated by reference to Exhibit 4.1 to the
Registrants Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission on December 3, 2004).4.2
    
    Registration Rights Agreement between Calamos Family Partners, Inc., John P.
Calamos, Sr. and the Registrant (incorporated by reference to Exhibit 4.2 to
the Registrants Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission on December 3, 2004).10.1
    
    Employment Agreement between the Registrant and Philip E. Moriarty, II.31.1
    
    Certification pursuant to Rules 13a-14(a) and 15d-14(a) of the Exchange Act.31.2
    
    Certification pursuant to Rules 13a-14(a) and 15d-14(a) of the Exchange Act.32.1
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
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##### Table of Contents



SIGNATURES
  CALAMOS ASSET MANAGEMENT, INC.(Registrant)Date:
May 10, 2007
    
    By:
    
    /s/ Patrick H. DudasikPatrick H. DudasikExecutive Vice President, Chief Operating Officer,Chief Financial Officer and Treasurer
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