FBR Announces First Quarter 2011 Financial Results
26 Abril 2011 - 3:54PM
FBR Capital Markets Corporation (Nasdaq:FBCM) ("FBR" or the
"Company"), a leading investment bank serving the middle market,
today reported a net after-tax loss of $1.9 million, or $0.03 per
share, for the quarter ended March 31, 2011. These results compare
to a net after-tax loss of $8.3 million, or $0.13 per share, in the
first quarter 2010 and a net after-tax profit of $3.1 million, or
$0.05 per share in the fourth quarter 2010.
The Company's pretax loss for the first quarter 2011 was $2.0
million compared to a pretax loss of $24.5 million in the first
quarter 2010 and pretax earnings of $2.6 million in the fourth
quarter 2010.
First quarter 2011 net revenues were $50.1 million compared to
$44.2 million for the first quarter 2010 and $75.3 million in the
fourth quarter 2010. Revenues for the first quarter by business
area were as follows:
- $16.6 million in investment banking generated from 15
transactions across 5 industry segments. This compares to $11.1
million in the first quarter 2010 and $36.9 million in the prior
quarter.
- $23.1 million in institutional brokerage, down from $27.5
million and $24.8 million in the first and fourth quarters 2010,
respectively.
- $4.0 million in asset management, representing 20% revenue
growth over the first quarter 2010; and a 13% increase in assets
under management over the same time period.
- $5.7 million of investment returns, including net investment
income and dividends, on our portfolio investments compared with
$1.8 million and $9.2 million of investment returns in the first
quarter 2010 and fourth quarter 2010, respectively.
First quarter 2011 total non-interest expenses were $52.1
million compared to $68.8 million in the first quarter 2010 and
$72.6 million in the fourth quarter 2010. This improvement
reflected:
- A reduction of non-compensation fixed expenses from $19.0
million in first quarter 2010 and $19.1 million in the fourth
quarter 2010 down to $15.2 million in the first quarter 2011. The
majority of this year-over-year improvement was the result of
meaningful reductions in occupancy, technology related expenses,
and professional fees.
- Fixed compensation and benefit expenses were down over 25% in
the first quarter 2011 from the first quarter 2010.
- Compensation and benefit expenses as a percentage of net
revenues were 58% for the first quarter 2011 compared with 97% for
the first quarter 2010 and 62% for the prior quarter.
- Headcount at the end of the first quarter 2011 was 465, down
from 598 at the same quarter's end in 2010.
As of March 31, 2011, shareholders' equity totaled $285.9
million and the Company's book value per share was $4.54. During
the quarter the Company repurchased approximately 676,000 shares at
an average cost per share of $3.72. While the Company continues to
maintain a liquid balance sheet, it has begun to deploy additional
capital into its trading businesses and anticipates opportunities
within its merchant banking business throughout the remainder of
the year.
"Investment banking in the first quarter was clearly below trend
and well below our expected run rate for the full year. Despite the
light revenue quarter, the company was able to significantly reduce
its operating loss from a similarly weak first quarter of 2010 as a
result of the meaningful cost reductions accomplished over the last
year," said Richard J. Hendrix, President and Chief Executive
Officer of FBR. "The second quarter is off to a much stronger start
and we anticipate 2011 to be a profitable year for the
Company."
Investors who wish to listen to the earnings call at 9:00 A.M.
U.S. EDT, Wednesday, April 27, 2011, may do so via the Web or
conference call at:
Conference call dial-in number (toll-free):
877.303.6433
Conference call dial-in number (local):
224.357.2198
Conference call code: 59689449
Webcast link:
http://investor.shareholder.com/media/eventdetail.cfm?eventid=95582&CompanyID=FBCM&e=1&mediaKey=A638ADF35B185A230531194DBE6AEB85
Replays of the earnings call will be available via webcast
following the call.
FBR Capital Markets Corporation (Nasdaq:FBCM) provides
investment banking, merger and acquisition advisory, institutional
brokerage, and research services through its subsidiary FBR Capital
Markets & Co. FBR focuses capital and financial expertise
on the following industry sectors: consumer; diversified
industrials; energy & natural resources; financial
institutions; insurance; real estate; and technology, media &
telecom. FBR Fund Advisers, Inc., a subsidiary of FBR Capital
Markets Corporation, provides clients with a range of investment
choices through The FBR Funds, a family of mutual funds. FBR is
headquartered in the Washington, D.C. metropolitan area with
offices throughout the United States and in London. For more
information, please visit www.fbr.com.
The FBR Capital Markets Corporation logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=6405 Statements in
this release concerning future performance, developments, events,
market forecasts, revenues, expenses, earnings, run rates and any
other guidance on present or future periods constitute
forward-looking statements. These forward-looking statements
are subject to a number of factors, risks and uncertainties that
might cause actual results to differ materially from stated
expectations or current circumstances. These factors include, but
are not limited to, the effect of demand for public and private
securities offerings, activity in the secondary securities markets,
interest rates, the risks associated with merchant banking
investments, the realization of gains and losses on principal
investments, available technologies, competition for business and
personnel, and general economic, political and market conditions.
For a discussion of these and other risks and important factors
that could affect FBR Capital Markets' future results and financial
condition, see "Risk Factors" in Part I, Item 1A and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" in Part II, Item 7 of the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2010; and other
items throughout the Company's Form 10-K, Quarterly Reports
on Form 10-Q and Current Reports on Form 8-K.
Financial data follow.
FBR CAPITAL MARKETS
CORPORATION |
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|
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CONSOLIDATED STATEMENTS
OF OPERATIONS |
|
|
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|
(Dollars in thousands, except per
share amounts) |
|
|
|
|
(Unaudited) |
|
|
|
|
|
Quarter ended
March 31, |
|
|
|
2011 |
|
|
2010 |
REVENUES: |
|
|
|
|
Investment banking: |
|
|
|
|
Capital raising |
$ 15,110 |
|
|
$ 7,711 |
Advisory |
1,460 |
|
|
3,434 |
Institutional brokerage: |
|
|
|
|
Principal transactions |
5,836 |
|
|
7,870 |
Agency commissions |
17,255 |
|
|
19,660 |
Asset management fees |
3,981 |
|
|
3,328 |
Net investment income |
5,599 |
|
|
2 |
Interest, dividends & other |
857 |
|
|
2,212 |
Total revenues |
50,098 |
|
|
44,217 |
Interest expense |
-- |
|
|
-- |
Revenues, net of interest
expense |
50,098 |
|
|
44,217 |
|
|
|
|
|
NON-INTEREST EXPENSES: |
|
|
|
|
Compensation and benefits |
29,001 |
|
|
42,744 |
Professional services |
3,955 |
|
|
4,103 |
Business development |
3,646 |
|
|
3,851 |
Clearing and brokerage fees |
2,674 |
|
|
3,382 |
Occupancy and equipment |
5,105 |
|
|
6,492 |
Communications |
4,351 |
|
|
4,767 |
Other operating expenses |
3,336 |
|
|
3,419 |
Total non-interest expenses |
52,068 |
|
|
68,758 |
|
|
|
|
|
Loss before income taxes |
(1,970) |
|
|
(24,541) |
|
|
|
|
|
Income tax benefit |
(65) |
|
|
(16,279) |
|
|
|
|
|
Net loss |
$ (1,905) |
|
|
$ (8,262) |
|
|
|
|
|
Basic loss per share |
$ (0.03) |
|
|
$ (0.13) |
Diluted loss per share |
$ (0.03) |
|
|
$ (0.13) |
|
|
|
|
|
Weighted average shares - basic (in
thousands) |
63,510 |
|
|
64,024 |
Weighted average shares - diluted (in
thousands) |
63,510 |
|
|
64,024 |
|
|
|
|
|
FBR CAPITAL MARKETS
CORPORATION |
|
|
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CONSOLIDATED BALANCE
SHEETS |
|
|
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(Dollars in thousands, except per
share amounts) |
|
|
|
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(Unaudited) |
|
|
|
|
|
|
|
|
|
ASSETS |
31-Mar-11 |
|
|
31-Dec-10 |
|
|
|
|
|
Cash and cash equivalents |
$ 149,475 |
|
|
$ 236,077 |
Receivables: |
|
|
|
|
Due from brokers, dealers and clearing
organizations |
14,097 |
|
|
15,463 |
Customers |
7,112 |
|
|
10,280 |
Other |
9,641 |
|
|
11,635 |
Financial instruments owned, at fair
value |
174,504 |
|
|
86,400 |
Other investments, at cost |
30,308 |
|
|
45,224 |
Goodwill and intangible assets, net |
8,350 |
|
|
8,465 |
Furniture, equipment and leasehold
improvements, net |
9,258 |
|
|
9,741 |
Prepaid expenses and other assets |
6,276 |
|
|
8,182 |
Total assets |
$ 409,021 |
|
|
$ 431,467 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
|
|
|
|
|
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|
Liabilities: |
|
|
|
|
Securities sold but not yet purchased, at
fair value |
$ 80,044 |
|
|
$ 55,444 |
Accrued compensation and benefits |
11,213 |
|
|
53,305 |
Accounts payable, accrued expenses and other
liabilities |
20,193 |
|
|
23,904 |
Due to brokers, dealers and clearing
organizations |
11,682 |
|
|
7,323 |
Total liabilities |
123,132 |
|
|
139,976 |
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
Common stock |
62 |
|
|
62 |
Additional paid-in capital |
426,809 |
|
|
423,935 |
Restricted stock units |
30,103 |
|
|
34,239 |
Accumulated other comprehensive loss |
(2,488) |
|
|
(53) |
Accumulated deficit |
(168,597) |
|
|
(166,692) |
Total shareholders'
equity |
285,889 |
|
|
291,491 |
|
|
|
|
|
Total liabilities and
shareholders' equity |
$ 409,021 |
|
|
$ 431,467 |
|
|
|
|
|
Book Value per Share |
$4.54 |
|
|
$4.60 |
|
|
|
|
|
Shares Outstanding (in
thousands) |
63,005 |
|
|
63,354 |
|
|
|
|
|
|
|
|
|
|
FBR CAPITAL MARKETS
CORPORATION |
|
|
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|
|
|
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|
Financial & Statistical
Supplement - Operating Results |
|
|
|
|
|
|
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|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q-1 11 |
|
Q-4 10 |
|
Q-3 10 |
|
Q-2 10 |
|
Q-1 10 |
Revenues, net of interest expense |
$ 50,098 |
|
$ 75,270 |
|
$ 57,394 |
|
$ 69,706 |
|
$ 44,217 |
|
|
|
|
|
|
|
|
|
|
Non-interest expenses: |
|
|
|
|
|
|
|
|
|
Variable |
15,860 |
|
29,683 |
|
21,329 |
|
30,169 |
|
21,642 |
Fixed |
36,208 |
|
42,960 |
|
43,658 |
|
51,692 |
|
47,116 |
|
|
|
|
|
|
|
|
|
|
(Loss) income before income taxes |
(1,970) |
|
2,627 |
|
(7,593) |
|
(12,155) |
|
(24,541) |
|
|
|
|
|
|
|
|
|
|
Income tax (benefit) provision |
(65) |
|
(455) |
|
(982) |
|
13,612 |
|
(16,279) |
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
$ (1,905) |
|
$ 3,082 |
|
$ (6,611) |
|
$ (25,767) |
|
$ (8,262) |
|
|
|
|
|
|
|
|
|
|
Fixed expenses |
$ 36,208 |
|
$ 42,960 |
|
$ 43,658 |
|
$ 51,692 |
|
$ 47,116 |
Less: Non-cash expenses 1 |
2,352 |
|
4,255 |
|
4,766 |
|
5,134 |
|
5,296 |
Corporate transaction
costs 2 |
-- |
|
1,302 |
|
-- |
|
-- |
|
186 |
Severance |
806 |
|
549 |
|
646 |
|
4,296 |
|
970 |
|
|
|
|
|
|
|
|
|
|
Core fixed costs |
$ 33,050 |
|
$ 36,854 |
|
$ 38,246 |
|
$ 42,262 |
|
$ 40,664 |
|
|
|
|
|
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Statistical Data |
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Net revenues per employee (annualized) |
$ 431 |
|
$ 601 |
|
$ 459 |
|
$ 479 |
|
$ 296 |
|
|
|
|
|
|
|
|
|
|
Employee count |
465 |
|
501 |
|
500 |
|
582 |
|
598 |
|
|
|
|
|
|
|
|
|
|
Net assets under management (in
millions) |
|
|
|
|
|
|
|
|
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Mutual funds |
$ 1,689.4 |
|
$ 1,582.7 |
|
$ 1,445.4 |
|
$ 1,373.5 |
|
$ 1,497.3 |
Hedge and private equity funds |
4.2 |
|
4.3 |
|
6.0 |
|
6.4 |
|
6.7 |
Total |
$ 1,693.6 |
|
$ 1,587.0 |
|
$ 1,451.4 |
|
$ 1,379.9 |
|
$ 1,504.0 |
|
|
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1 Non-cash expenses include
compensation costs associated with stock-based awards and
amortization of intangible assets. |
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2 Corporate transaction costs
include costs related to reductions in physical space and costs
associated with business combinations and acquisitions. |
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CONTACT: Media:
Shannon Small
703.469.1190
ssmall@fbr.com
Investors:
Bradley J. Wright
703.312.9678
fbcmir@fbr.com
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