National Holding Corporation Announces Fiscal Third Quarter 2016 Financial Results
Management to Host Conference Call on
Subsidiary of Fortress Biotech Commences
Third Quarter Fiscal 2016 Financial Highlights
- Revenue of
$46.3 million , versus$42.3 million for the third quarter of fiscal 2015 and$42.0 million for the second quarter of fiscal 2016 - Commissions revenue increased 3% year-over-year to
$25.1 million - Investment banking revenue increased 69% year-over-year to
$10.7 million - Operating expenses included
$2.0 million of non-recurring items, primarily professional fees related to the merger agreement with Fortress Biotech, Inc. andFBIO Acquisition, Inc. - Pre-tax loss of
$0.3 million - Cash, receivables from clearing organizations and securities of
$27.3 million and no debt atJune 30, 2016 - Equity of
$45.1 million atJune 30, 2016
Management Commentary
“We achieved strong top-line growth this quarter as our commissions revenue saw its first year-over-year gain since 2014 and our Investment Banking revenue soared to a record level,” said
“Our Investment Banking business had exceptionally good growth in the third quarter, with revenue increasing 69% to a record
Added
Fiscal Third Quarter 2016 Financial Results
Total expenses increased 11% to
The loss from operations for the three months ended
Balance Sheet
As of
Tender Offer
On
Fiscal Third Quarter 2016 Financial Results Conference Call
Management will host a conference call to discuss the operating and financial results at
A live webcast of the conference call will be available at https://www.webcaster4.com/Webcast/Page/1363/16726 Please access the website 15 minutes prior to the start of the call to download and install any necessary audio software.
A telephonic replay of the conference call will be available through
About
FORWARD-LOOKING STATEMENTS
This communication contains forward-looking statements within the meaning of the safe harbor provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995 and are based on current expectations that involve a number of risks and uncertainties. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including statements about the planned completion of the offer and the merger. Where, in any forward-looking statement, an expectation or belief as to future results or events is expressed, such expectation or belief is based on the current plans and expectations of management and expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will be achieved or accomplished. Numerous risks, uncertainties and other factors may cause actual results to differ materially from those expressed in any forward-looking statement, many of which are outside of the control of management. These factors include, but are not limited to: (i) the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement; (ii) successful completion of the proposed transaction on a timely basis; (iii) uncertainties as to how many of the Company’s shareholders will tender their shares into the tender offer; (iv) the impact of regulatory reviews on the proposed transaction; (v) the outcome of any legal proceedings that may be instituted against one or both of the Company and Fortress Biotech and others following the announcement of the merger agreement; (vi) risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the transaction; and (vii) other factors described in the Company’s and Fortress’ filings with the Commission, including the reports on Forms 10-K, 10-Q and 8-K filed by each such entity, as well as in the tender offer statement on Schedule TO filed with the Commission by Fortress and Acquisition Sub on
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NATIONAL HOLDINGS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION |
||||||
| |
|
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| 2016 | 2015 | |||||
| (Unaudited) | ||||||
| ASSETS | ||||||
| Cash | |
|
||||
| Restricted cash | 353,000 | 218,000 | ||||
| Cash deposits with clearing organizations | 1,030,000 | 1,005,000 | ||||
| Securities owned, at fair value | 1,522,000 | 887,000 | ||||
| Receivables from broker-dealers and clearing organizations | 3,610,000 | 3,078,000 | ||||
| Forgivable loans receivable | 1,808,000 | 1,368,000 | ||||
| Other receivables, net | 3,852,000 | 3,709,000 | ||||
| Prepaid expenses | 1,638,000 | 1,727,000 | ||||
| Fixed assets, net | 837,000 | 712,000 | ||||
| Intangible assets, net | 6,778,000 | 7,331,000 | ||||
| |
6,531,000 | 6,531,000 | ||||
| Deferred tax asset, net | 11,801,000 | 11,662,000 | ||||
| Other assets, principally refundable deposits | 306,000 | 512,000 | ||||
| Total Assets | |
|
||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| Liabilities | ||||||
| Securities sold, not yet purchased, at fair value | $ | - | $ | 32,000 | ||
| Accrued commissions and payroll payable | 10,026,000 | 10,244,000 | ||||
| Accounts payable and accrued expense | 5,937,000 | 6,602,000 | ||||
| Deferred clearing and marketing credits | 1,048,000 | 1,205,000 | ||||
| Other | 205,000 | 37,000 | ||||
| Total Liabilities | 17,216,000 | 18,120,000 | ||||
| Stockholders’ Equity | ||||||
| Preferred stock, |
- | - | ||||
| Common stock |
249,000 | 249,000 | ||||
| Additional paid-in-capital | 80,321,000 | 80,282,000 | ||||
| Accumulated deficit | (35,528,000 | ) | (35,284,000 | ) | ||
| Total National Holdings Corporation Stockholders’ Equity | 45,042,000 | 45,247,000 | ||||
| Non-Controlling interest | 15,000 | 15,000 | ||||
| Total Stockholders’ Equity | 45,057,000 | 45,262,000 | ||||
| Total Liabilities and Stockholders’ Equity | |
|
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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NATIONAL HOLDINGS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
||||||||||||||
| Three Month Period Ended |
Nine Month Period Ended |
|||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||
| Revenues | ||||||||||||||
| Commissions | $ | 25,051,000 | $ | 24,272,000 | $ | 71,722,000 | $ | 74,434,000 | ||||||
| Net dealer inventory gains | 2,340,000 | 2,418,000 | 7,483,000 | 8,562,000 | ||||||||||
| Investment banking | 10,735,000 | 6,356,000 | 22,921,000 | 15,869,000 | ||||||||||
| Investment advisory | 3,361,000 | 3,797,000 | 10,337,000 | 11,149,000 | ||||||||||
| Interest and dividends | 702,000 | 946,000 | 2,415,000 | 2,624,000 | ||||||||||
| Transaction fees and clearing services | 1,591,000 | 1,735,000 | 5,512,000 | 6,302,000 | ||||||||||
| Tax preparation and accounting | 2,386,000 | 2,724,000 | 7,222,000 | 7,231,000 | ||||||||||
| Other | 176,000 | 87,000 | 385,000 | 280,000 | ||||||||||
| Total Revenues | 46,342,000 | 42,335,000 | 127,997,000 | 126,451,000 | ||||||||||
| Operating Expenses | ||||||||||||||
| Commissions, compensation and fees | 39,667,000 | 35,831,000 | 110,260,000 | 107,228,000 | ||||||||||
| Clearing fees | 509,000 | 681,000 | 1,798,000 | 2,209,000 | ||||||||||
| Communications | 786,000 | 927,000 | 2,427,000 | 2,891,000 | ||||||||||
| Occupancy | 982,000 | 999,000 | 2,886,000 | 2,977,000 | ||||||||||
| License and registration | 417,000 | 335,000 | 1,155,000 | 1,025,000 | ||||||||||
| Professional fees | 2,327,000 | 1,720,000 | 4,897,000 | 3,727,000 | ||||||||||
| Interest | 13,000 | 6,000 | 16,000 | 12,000 | ||||||||||
| Depreciation and amortization | 302,000 | 294,000 | 898,000 | 862,000 | ||||||||||
| Other administrative expenses | 1,624,000 | 1,185,000 | 3,973,000 | 4,111,000 | ||||||||||
| Total Operating Expenses | 46,627,000 | 41,978,000 | 128,310,000 | 125,042,000 | ||||||||||
| Income (loss) before Income Tax Expense | (285,000 | ) | 357,000 | (313,000 | ) | 1,409,000 | ||||||||
| Income tax expense | (124,000 | ) | 208,000 | (69,000 | ) | 626,000 | ||||||||
| Net Income (loss) | $ | (161,000 | ) | $ | 149,000 | $ | (244,000 | ) | $ | 783,000 | ||||
| Net income (loss) per share - Basic | $ | (0.01 | ) | $ | 0.01 | $ | (0.02 | ) | $ | 0.06 | ||||
| Net income (loss) per share - Diluted | $ | (0.01 | ) | $ | 0.01 | $ | (0.02 | ) | $ | 0.06 | ||||
| Weighted number of shares outstanding - Basic | 12,440,035 | 12,446,365 | 12,442,059 | 12,446,365 | ||||||||||
| Weighted number of shares outstanding - Diluted | 12,440,035 | 12,491,170 | 12,442,059 | 12,495,475 | ||||||||||
Non-GAAP Financial Measures
To provide investors with greater insight, promote transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making, the Company supplements its consolidated statements of income presented on a GAAP basis with non-GAAP financial measures of earnings. Please refer to the schedule in this release for a reconciliation of non-GAAP financial measures to GAAP measures.
Management uses Earnings before Interest, Income Taxes, Depreciation and Amortization (“EBITDA”) and adjusted EBITDA as financial measures to evaluate the profitability and efficiency of the Company’s business model. EBITDA and adjusted EBITDA are not presented in accordance with GAAP.
Investors should consider the non-GAAP measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP. Additionally, the Company’s non-GAAP measures may differ from similar measures used by other companies, even if similar terms are used to identify such measures.
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Reconciliation of Non-GAAP Financial Measures to GAAP Measures |
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| Three Months Ended |
Nine Months Ended |
|||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||
| Net income (loss), as reported | $ | (161,000 | ) | $ | 149,000 | $ | (244,000 | ) | $ | 783,000 | ||||
| Interest expense | 13,000 | 6,000 | 16,000 | 12,000 | ||||||||||
| Income taxes | (124,000 | ) | 208,000 | (69,000 | ) | 626,000 | ||||||||
| Depreciation | 122,000 | 79,000 | 345,000 | 238,000 | ||||||||||
| Amortization | 180,000 | 215,000 | 553,000 | 624,000 | ||||||||||
| EBITDA | 30,000 | 657,000 | 601,000 | 2,283,000 | ||||||||||
| Non-cash compensation expense | 26,000 | 218,000 | 125,000 | 470,000 | ||||||||||
| Forgivable loan amortization | 169,000 | 113,000 | 493,000 | 262,000 | ||||||||||
| EBITDA, as adjusted | $ | 225,000 | $ | 988,000 | $ | 1,219,000 | $ | 3,015,000 | ||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20160815006120/en/
Executive Chairman & Chief Executive Officer
or
LHA
[email protected]
Source:
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