Investors Capital Holdings` Annual Revenues Decline Due to Markets and Economy

Average annual production of new advisors nears $250K
LYNNFIELD, Mass.--(Business Wire)--
Investors Capital Holdings, Ltd. (NYSE AMEX: ICH), a financial services holding
company, posted total revenues of $81.61 million for the fiscal year (FY) ended
March 31, 2009, a decrease of 10.3% over revenues of $90.99 million for the FY
2008.

Revenues remained steady throughout the first six months of the fiscal year
before declining in the third and fourth quarters due to a deepening economic
downturn and weakened financial market conditions that caused a decline in
financial asset values, a shift in investor assets toward less volatile
investments, and a reduction in the firm`s commissionable trading activity and
advisory assets under management.

Commission revenues decreased 12.0% to $68.22 million in FY 2009 from $77.55
million in FY 2008. Advisory revenues rose 5.6% in fiscal year 2009 to $11.09
million from $10.50 million for the prior period. This is largely due to the
repeal of the "Merrill Lynch" rule, requiring all brokerage advisory accounts to
be reclassified as investment advisory accounts. Otherwise, advisory revenues
remained relatively stable.

"Despite the decline in revenue, which was primarily brought on by economic
factors affecting the entire financial services industry and, therefore, beyond
the firm`s control, I believe Investors Capital remains extremely well
positioned for robust growth in the future," said Timothy B. Murphy, President
and CEO of Investors Capital Holdings, Ltd.

F-MAP, the in-house Fund Managed Advisory Program of Investors Capital Advisory
Services (ICA), increased revenues $0.25 million due to new investment, a
testament to the strength of the management of the program by the ICA team.
F-MAP gross margins increased 23.2% over the previous fiscal year. ICA is the
registered investment advisor of Investors Capital Corporation (ICC), the firm`s
independent broker/dealer subsidiary.

Branding and recruiting are both components of the firm`s corporate growth
strategy. Advisors that joined ICC in the FY 2009 had an average trailing
12-month gross production of $247,742 compared to $217,717 for the prior fiscal
year. Branding metrics are at an all-time high as well. Industry wide brand
recall, brand recognition, brand attribute recall, and brand
preference/consideration measures are at their highest levels since the firm`s
inception.

ICC`s Net Promoter Score (NPS), a key measure of advisor satisfaction that
measures the percentage of customer promoters over detractors, was 66% in Q4
fiscal year 2009 compared to 49% for the fourth quarter of the prior year. The
NPS for a typical company lies between 5% and 10%. The score is measured via an
online survey administered to advisors at the end each quarter.

"When you consider that the average NPS for an American company is only 11
percent, a score of 66 is outstanding," said Robert Foney, Chief Marketing
Officer for Investors Capital Corporation. "The fact that we improved upon an
already good score of 49 shows that Investors Capital is determined to fulfill
its mission of providing its advisors with 5-star service and support regardless
of the market conditions."

Investors Capital Corporation`s net capital position was $1.94 million this
fiscal year (an excess of $1.41 million) versus $1.28 million (an excess of
$0.80 million) for the prior year. Net capital ratio, accordingly, was 4.10 to 1
this fiscal year compared to 5.70 to 1 for the prior year.

The firm decreased total operating expenses 0.3% for the fiscal year, led by a
16.8% decrease in advertising and marketing expenses, a 14.0% decrease in
compensation and benefits expenses, and an 11.2% decrease in occupancy expenses.
Reductions in advertising, staff, and benefits, as well as consolidating from
two home office locations to one achieved the goal of preserving operating cash
flow.

Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and
Amortization) is a key metric utilized by the firm in evaluating its financial
performance as it eliminates non-recurring items believed not to be part of our
core operations. For FY 2009, adjusted EBITDA was net loss of $0.26 million
compared to net income of $0.86 million in FY 2008.

Although the firm posted a net loss of $1.83 million for the fiscal year 2009
versus a net loss of $0.66 million in FY 2008, the company remains focused on
achieving its overarching goals of operational excellence and profitability.
Executive leadership along with the company`s management team implemented
cost-cutting initiatives in addition to automation strategies during the current
fiscal period and will continue to follow that path.

About Investors Capital Holdings, Ltd.:

Investors Capital Holdings, Ltd. (NYSE AMEX: ICH) of Lynnfield, Massachusetts is
a diversified financial services holding company that operates primarily through
its independent broker/dealer and investment advisor subsidiary, Investors
Capital Corporation. Our mission is to provide premier, concierge-level service
and support to our valued registered representatives, including advisory
programs, strategic practice management and marketing services, and technology,
to help them grow their businesses and exceed their clients` expectations.
Business units include Investors Capital Corporation, ICC Insurance Agency,
Inc., and Investors Capital Holdings Securities Corporation. For more
information, please call (800) 949-1422 x4814 or visit
www.investorscapital.com.

INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED
March 31,
2009 2008
Revenues:
Commission $ 68,219,314 $ 77,545,491
Advisory fees 11,090,508 10,504,031
Other fee income 804,877 1,060,505
Marketing revenue 981,100 1,143,113
Other income 511,589 732,010
Total revenue 81,607,388 90,985,150

Commission and advisory fees 65,609,588 73,388,303

Gross profit 15,997,800 17,596,847

Operating expenses:

Advertisement and marketing 1,279,756 1,538,071
Communications 1,060,641 1,039,911
Selling expenses 2,340,397 2,577,982

Compensation and benefits 9,135,686 10,626,790
Regulatory, legal and professional 3,805,231 2,516,623
Occupancy 1,032,914 1,162,672
Other administrative expenses 1,815,393 1,286,605
Interest expense 36,845 58,529
Administrative expenses 15,826,069 15,651,219

Total operating expenses 18,166,466 18,229,201

Operating loss before income taxes (2,168,666) (632,354)

Provision (benefit) for income taxes (338,667) 29,104

Net loss $ (1,829,999) $ (661,458)

Earnings per common share
Basic earnings per common share: $ (0.29) $ (0.11)
Diluted earnings per common share: N/A N/A

Share data
Weighted average shares used in basic earnings per 6,415, 385 6,082,546
common share calculations
Plus: Incremental shares from assumed exercise of 389,604 575,245
stock options
Weighted average shares used in diluted earnings per 6,804 , 989 6,657,791
common share calculations

INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, March 31,
2009 2008
Assets
Current Assets
Cash and cash equivalents $ 6,151,613 $ 4,340,082
Deposit with clearing organization, restricted 175,000 175,000
Accounts receivable 6,154,798 4,662,146
Note receivable-sale of asset (current) 8,674 8,674
Loans receivable from registered representatives (current), net of allowance 737,571 563,575
Prepaid income taxes 295,608 1,294,876
Marketable securities, at market value 85,436 181,335
Investments (short term) - 1,247,861
Prepaid expenses 858,679 651,948
14,467,379 13,125,497

Property and equipment, net 950,620 1,277,636

Long Term Investments
Loans receivable from registered representatives 129,358 251,460
Note receivable-sale of asset 747,617 747,617
Equity investments, at cost - 40,000
Investments 127,143 175,824
Non-qualified deferred compensation investment 533,665 333,880
Cash surrender value life insurance policies 406,089 359,469
1,943,872 1,908,250
Other Assets
Other assets 44,511 58,430
Deferred tax asset, net 1,097,952 696,760
1,142,463 755,190

TOTAL ASSETS $ 18,504,334 $ 17,066,573

Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $ 2,029,286 $ 833,697
Accrued expenses 2,347,761 1,312,186
Notes payable 1,044,805 853,412
Unearned revenues 94,259 102,562
Commissions payable 2,860,093 2,997,499
Securities sold, not yet purchased, at market value 7,056 141,359
8,383,260 6,240,715
Long-Term Liabilities
Non-qualified deferred compensation plan 541,993 331,202
541,993 331,202

Total liabilities $ 8,925,253 $ 6,571,917

Commitments and contingencies (Note 15)
Stockholders' Equity:
Common stock, $.01 par value, 10,000,000 shares authorized; 65,702 65,359
6,570,177 issued and 6,566,292 outstanding at March 31, 2009
6,535,871 issued and 6,531,986 outstanding at March 31, 2008
Additional paid-in capital 11,852,467 10,886,381
Retained earnings (2,285,622) (455,623)
Less: Treasury stock, 3,885 shares at cost (30,135) (30,135)
Accumulated other comprehensive income (23,331) 28,674
Total stockholders' equity 9,579,081 10,494,656

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 18,504,334 $ 17,066,573

Investors Capital Holdings, Ltd.
Robert Foney, 781-477-4814
Chief Marketing Officer
rfoney@investorscapital.com
www.investorscapital.com

Copyright Business Wire 2009