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Revenues up 25% in First Nine Months of 2009 Due to Acquisition
MIAMI--(Business Wire)--
Ladenburg Thalmann Financial Services Inc. (AMEX: LTS) today announced financial
results for the three and nine months ended September 30, 2009.
Third quarter 2009 revenues were $39.25 million, a 26% increase from revenues of
$31.27 million in the third quarter of 2008. The Company had a net loss of $3.73
million, or $(0.02) per diluted share, in the third quarter of 2009, compared to
a net loss of $5.69 million, or $(0.03) per diluted share, in the comparable
2008 period. Third quarter 2009 results include an increase in Triad Advisors
revenues of $10.90 million from the inclusion of Triad Advisors (acquired August
2008) for the full period. The 2009 third quarter results included $1.03 million
in professional fee expense and $2.63 million of non-cash charges for
depreciation, amortization and compensation expense, while the third quarter
2008 results included $1.56 million in professional fee expense and $2.44
million of non-cash charges for depreciation, amortization and compensation
expense.
For the nine months ended September 30, 2009, the Company had revenues of
$106.86 million, a 25% increase over revenues of $85.30 million for the
comparable 2008 period. The Company had a net loss of $15.13 million, or $(0.09)
per diluted share, compared to a net loss of $11.96 million, or $(0.07) per
diluted share, in the comparable 2008 period. The 2009 nine month results
included an increase in Triad Advisors revenues of $37.52 million from the
inclusion for the full period of Triad Advisors. The results for the nine months
ended September 30, 2009 included $4.37 million in professional fee expense and
$8.08 million of non-cash charges for depreciation, amortization and
compensation expense, while the comparable 2008 results included $4.07 million
in professional fee expense and $6.85 million of non-cash charges for
depreciation, amortization and compensation expense.
Third quarter 2009 EBITDA, as adjusted, was a loss of $191,000, compared to a
loss of $1.80 million for the 2008 period. EBITDA, as adjusted, for the nine
months ended September 30, 2009 was a loss of $3.46 million, compared to a loss
of $1.38 million for the 2008 period. EBITDA, as adjusted, for both periods
excludes non-cash compensation expense and other items.
The following table presents a reconciliation of EBITDA, as adjusted, to net
loss as reported.
Three months ended September 30, Nine months ended September 30,
(in thousands) 2009 2008 2009 2008
Total revenues $ 39,246 $ 31,272 $ 106,861 $ 85,296
Total expenses 43,066 36,273 121,521 96,501
Pre-tax loss (3,820 ) (5,001 ) (14,660 ) (11,205 )
Net loss (3,728 ) (5,691 ) (15,127 ) (11,957 )
Reconciliation of EBITDA, as adjusted, to
net loss:
EBITDA, as adjusted (191 ) (1,802 ) (3,456 ) (1,384 )
Add:
Interest income 11 45 65 189
Income tax benefit 92 - - -
Sale of exchange memberships - 310 - 310
Less:
Interest expense (1,014 ) (1,118 ) (3,186 ) (3,474 )
Income tax expense - (690 ) (467 ) (752 )
Depreciation and amortization expense (940 ) (898 ) (2,810 ) (2,241 )
Non-cash compensation expense (1,686 ) (1,538 ) (5,273 ) (4,605 )
Net loss $ (3,728 ) $ (5,691 ) $ (15,127 ) $ (11,957 )
Earnings before interest, taxes, depreciation and amortization, or EBITDA,
adjusted for gains or losses on sales of assets and non-cash compensation
expense is a key metric the Company uses in evaluating its business. EBITDA is
considered a non-GAAP financial measure as defined by Regulation G promulgated
by the SEC under the Securities Act of 1933, as amended. The Company considers
EBITDA, as adjusted, important in evaluating its business on a consistent basis
across various periods. Due to the significance of non-recurring items, EBITDA,
as adjusted, enables the Company`s Board of Directors and management to monitor
and evaluate the business on a consistent basis. The Company uses EBITDA, as
adjusted, as a primary measure, among others, to analyze and evaluate financial
and strategic planning decisions regarding future operating investments and
potential acquisitions. The Company believes that EBITDA, as adjusted,
eliminates items that are not part of its core operations, such as interest
expense, or do not involve a cash outlay, such as stock-related compensation.
EBITDA should be considered in addition to, rather than as a substitute for,
pre-tax income, net income and cash flows from operating activities.
At September 30, 2009, shareholders` equity was $39.06 million.
Dr. Phillip Frost, Chairman of Ladenburg, said, "Ladenburg`s business continued
to gain momentum and we are pleased with our significant quarter-over-quarter
improvement in both our capital markets and independent advisor businesses,
resulting in nearly break-even EBITDA results for the third quarter. We remain
excited about Ladenburg`s prospects as markets continue to normalize and our
ability to capitalize on growth opportunities in both sides of our business."
Richard Lampen, President and Chief Executive Officer of Ladenburg, said,
"During the quarter, we saw a substantial increase in capital markets activity,
placing eight registered direct and PIPE offerings which raised approximately
$80 million for clients in healthcare, biotechnology and other industries. We
also grew our independent advisory business to approximately 1,000 advisors, and
now have approximately $19 billion of client assets firm-wide. As Ladenburg
becomes a more diversified financial services company, we continue to
selectively add intellectual capital and expand our offerings to better serve
our clients."
Deferred Underwriting Compensation
In connection with Ladenburg`s underwriting of SPAC offerings, Ladenburg
receives compensation that includes normal discounts and commissions, as well as
deferred fees payable to Ladenburg upon a SPACs completion of a business
transaction. Such deferred fees and their related expenses are not reflected in
the Company`s results of operations until the underlying business combinations
have been completed and the fees have been irrevocably earned. Generally, these
fees may be received within 24 months from the respective date of the offering,
or not received at all if no business combination transactions are consummated
during such time period. SPACs are experiencing significant difficulty in recent
periods in obtaining shareholder approval of business combination transactions
because, among other factors, many of their shareholders hold common stock
trading at a discount to the cash amount per share held in trust. Also, there
have not been any new underwritings of SPAC initial public offerings since the
third quarter of 2008. During the three and nine months ended September 30,
2009, Ladenburg received deferred fees of $550,000 and $3.58 million,
respectively, and incurred commissions and related expenses of $216,000 and
$1.47 million, respectively. As of September 30, 2009, Ladenburg had unrecorded
potential deferred fees for SPAC transactions of approximately $10.14 million
which, net of expenses, amounted to approximately $6.01 million. If SPACs
continue to experience difficulty in completing business combination
transactions, Ladenburg may not be able to record these deferred fees and any
deferred fees received may be reduced in connection with the completion of such
transactions.
About Ladenburg
Ladenburg Thalmann Financial Services is engaged in investment banking, equity
research, institutional sales and trading, independent brokerage and advisory
services and asset management services through its principal subsidiaries,
Ladenburg Thalmann & Co. Inc., Investacorp, Inc. and Triad Advisors, Inc.
Founded in 1876 and a New York Stock Exchange member since 1879, Ladenburg
Thalmann & Co. is a full service investment banking and brokerage firm providing
services principally for middle market and emerging growth companies and high
net worth individuals. Investacorp, Inc., a leading independent broker-dealer
headquartered in Miami Lakes, Florida, has been serving the independent
registered representative community since 1978 and has approximately 500
independent financial advisors nationwide. Founded in 1998, Triad Advisors, Inc.
is a leading independent broker-dealer and registered investment advisor
headquartered in Norcross, Georgia that offers a broad menu of products,
services and total wealth management solutions to approximately 450 independent
financial advisors nationwide. Ladenburg Thalmann Financial Services is based in
Miami, Florida. Ladenburg Thalmann & Co. is based in New York City, with
regional offices in Miami and Boca Raton, Florida; Melville, New York;
Lincolnshire, Illinois; Los Angeles, California; and Princeton, New Jersey. For
more information, please visit www.ladenburg.com.
This press release includes certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, including
statements regarding future financial results, statements regarding future
growth, statements regarding growth of the independent brokerage area,
statements regarding potential acquisitions and recruiting, statements regarding
our market position and statements regarding our investment banking
business.These statements are based on management`s current expectations or
beliefs and are subject to uncertainty and changes in circumstances.Actual
results may vary materially from those expressed or implied by the statements
herein due to changes in economic, business, competitive and/or regulatory
factors, and other risks and uncertainties affecting the operation of the
Company`s business.These risks, uncertainties and contingencies include those
set forth in the Company`s annual report on Form 10-K for the fiscal year ended
December 31, 2008, as amended, and other factors detailed from time to time in
its other filings with the Securities and Exchange Commission.The information
set forth herein should be read in light of such risks.Further, investors should
keep in mind that the Company`s quarterly revenue and profits can fluctuate
materially depending on many factors, including the number, size and timing of
completed offerings and other transactions.Accordingly, the Company`s revenue
and profits in any particular quarter may not be indicative of future
results.The Company is under no obligation to, and expressly disclaims any
obligation to, update or alter its forward-looking statements, whether as a
result of new information, future events, changes in assumptions or otherwise.
[Financial Table Follows]
LADENBURG THALMANN FINANCIAL SERVICES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in thousands, except share and per share amounts)
Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
Revenues:
Commissions and fees $ 32,788 $ 25,130 $ 88,400 $ 64,617
Investment banking 3,077 4,178 8,750 13,385
Asset management 502 666 1,408 2,150
Principal transactions 709 (609 ) 882 (452 )
Interest and dividends 487 982 2,344 3,003
Unrealized loss on NYSE Euronext restricted - (111 ) - (111 )
common stock
Other income 1,683 1,036 5,077 2,704
Total revenues $ 39,246 $ 31,272 $ 106,861 $ 85,296
Expenses:
Commissions and fees $ 23,099 $ 15,126 $ 62,439 $ 39,237
Compensation and benefits 10,843 11,198 29,743 31,685
Non-cash compensation 1,686 1,538 5,273 4,605
Brokerage, communication and clearance fees 1,663 1,638 5,110 3,877
Rent and occupancy, net of sublease revenue 480 917 2,589 1,967
Professional services 1,033 1,563 4,370 4,071
Interest 1,014 1,118 3,186 3,474
Depreciation and amortization 940 898 2,810 2,241
Other 2,308 2,277 6,001 5,344
Total expenses $ 43,066 $ 36,273 $ 121,521 $ 96,501
Loss before income taxes (3,820 ) (5,001 ) (14,660 ) (11,205 )
Income tax (benefit) expense (92 ) 690 467 752
Net loss $ (3,728 ) $ (5,691 ) $ (15,127 ) $ (11,957 )
Net loss per common share (basic and diluted) $ (0.02 ) $ (0.03 ) $ (0.09 ) $ (0.07 )
Weighted average common shares used in computation
of per share data:
Basic 167,624,573 167,303,935 168,875,151 163,850,741
Diluted 167,624,573 167,303,935 168,875,151 163,850,741
Sard Verbinnen & Co
Paul Caminiti/Carrie Bloom/Jonathan Doorley, 212-687-8080
Copyright Business Wire 2009
