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| 8-K - FORM 8-K FILING DOCUMENT - FBR & Co. | document.htm |
EXHIBIT 99.1
FBR Reports Fourth Quarter and Full Year 2011 Financial Results
ARLINGTON, Va., Feb. 7, 2012 (GLOBE NEWSWIRE) -- FBR & Co. (Nasdaq:FBRC) ("FBR" or the "Company"), a leading investment bank serving the middle market, today reported a net after-tax loss of $18.9 million, or $0.33 per share, for the quarter ended December 31, 2011. Fourth quarter 2011 results include $10.0 million in non-recurring expenses comprised of a $5.9 million impairment of goodwill and $4.1 million of severance and restructuring-related costs. These results compare to net after-tax earnings of $3.1 million, or $0.05 per share, in the fourth quarter 2010 and a net after-tax loss of $26.1 million, or $0.43 per share in the third quarter 2011.
For the year ended December 31, 2011, FBR reported a net after-tax loss of $49.6 million, or $0.82 per share, on revenue of $147.2 million compared to a net after-tax loss of $37.6 million, or $0.59 per share, on revenue of $246.6 million in 2010.
Fourth quarter 2011 revenue was $27.7 million compared to $75.3 million for the fourth quarter 2010 and $20.1 million in the third quarter 2011.
Fourth quarter 2011 total expenses were $46.9 million, compared to $72.6 million in the fourth quarter 2010 and $45.9 million in the third quarter 2011. Non-compensation fixed expenses in the fourth quarter 2011 totaled $14.3 million, compared to $19.1 million in the fourth quarter 2010 and $14.8 million in the third quarter 2011.
2011 Overview
- Investment banking revenue was $58.1 million in 2011 compared to $118.3 million in 2010.
- Institutional brokerage generated net revenue of $78.5 million for 2011 compared to $100.1 million in 2010.
- Mutual fund assets under management as of December 31, 2011 were $1.7 billion compared to $1.6 billion at the end of 2010 and revenue increased from $14.1 million to $14.9 million over the same period.
- Non-compensation fixed expenses for 2011 were $60.7 million compared to $75.0 million in 2010.
- In the fourth quarter, the Company recognized a goodwill impairment charge of $5.9 million related to its capital markets segment. The impairment was recorded due to the extended period of time that the Company's common stock has traded at a discount to its book value as well as the restructuring undertaken in the fourth quarter. Subsequent to this impairment charge, the Company no longer maintains a goodwill balance on its balance sheet.
- The Company ended 2011 with 295 employees, down from 501 at the beginning of the year.
The Company periodically repurchased shares of its common stock throughout the year. For the year ended, December 31, 2011, the Company repurchased 8.2 million shares at an average price of $2.82 per share. The Company continues to have authority to repurchase 3.1 million shares.
As of December 31, 2011, shareholders' equity totaled $225.3 million, with $135.8 million held in cash, and the Company's book value per share was $3.99.
"The fourth quarter of 2011 continued to present an intensely challenging equity capital markets environment," said Richard J. Hendrix, President and Chief Executive Officer of FBR. "The restructuring we undertook in November, in response to this environment, is substantially complete and has reduced our fixed expenses by over 35%, materially lowering the revenue required for our firm to be profitable."
Investors wishing to listen to the earnings call at 9:00 A.M. U.S. EST, Wednesday, February 8, 2012, may do so via the Web or conference call at:
Webcast link:
http://investor.shareholder.com/media/eventdetail.cfm?eventid=106511&CompanyID=FBCM&e=1&mediaKey=A638ADF35B185A230531194DBE6AEB85
| Conference call dial-in number (domestic, toll-free): | 877.303.6433 |
| Conference call dial-in number (international): | 224.357.2198 |
| Conference call code: | 33390461 |
Replays of the earnings call will be available via webcast following the call.
FBR & Co. (Nasdaq:FBRC) 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 & Co., 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. For more information, please visit www.fbr.com.
The FBR & Co. 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's 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 & CO. | ||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (Dollars and shares in thousands, except per share amounts) | ||||||||
| (Unaudited) | ||||||||
|
Quarter ended December 31, |
Year ended December 31, |
|||||||
| 2011 | 2010 | 2011 | 2010 | |||||
| REVENUES: | ||||||||
| Investment banking: | ||||||||
| Capital raising | $ 4,229 | $ 30,518 | $ 42,862 | $ 98,768 | ||||
| Advisory | 2,316 | 6,378 | 15,284 | 19,505 | ||||
| Institutional brokerage: | ||||||||
| Principal transactions | 3,542 | 6,084 | 18,081 | 22,227 | ||||
| Agency commissions | 11,352 | 18,748 | 60,376 | 77,864 | ||||
| Asset management fees | 3,494 | 3,608 | 14,941 | 14,097 | ||||
| Net investment income (loss) | 1,256 | 9,123 | (9,696) | 9,218 | ||||
| Interest, dividends & other | 1,548 | 811 | 5,303 | 4,908 | ||||
| Total revenues | 27,737 | 75,270 | 147,151 | 246,587 | ||||
| NON-INTEREST EXPENSES: | ||||||||
| Compensation and benefits | 21,940 | 46,962 | 106,014 | 182,430 | ||||
| Professional services | 2,585 | 3,007 | 12,202 | 18,529 | ||||
| Business development | 2,519 | 4,355 | 12,066 | 14,936 | ||||
| Clearing and brokerage fees | 2,385 | 3,238 | 11,928 | 13,129 | ||||
| Occupancy and equipment | 4,509 | 7,069 | 19,936 | 25,595 | ||||
| Communications | 4,299 | 4,847 | 16,999 | 20,067 | ||||
| Impairment of goodwill | 5,882 | -- | 5,882 | -- | ||||
| Other operating expenses | 2,826 | 3,165 | 12,003 | 13,563 | ||||
| Total non-interest expenses | 46,945 | 72,643 | 197,030 | 288,249 | ||||
| (Loss) income before income taxes | (19,208) | 2,627 | (49,879) | (41,662) | ||||
| Income tax benefit | (327) | (455) | (230) | (4,104) | ||||
| Net (loss) income | $ (18,881) | $ 3,082 | $ (49,649) | $ (37,558) | ||||
| Basic (loss) earnings per share | $ (0.33) | $ 0.05 | $ (0.82) | $ (0.59) | ||||
| Diluted (loss) earnings per share | $ (0.33) | $ 0.05 | $ (0.82) | $ (0.59) | ||||
| Weighted average shares - basic | 56,446 | 63,642 | 60,841 | 63,546 | ||||
| Weighted average shares - diluted | 56,446 | 65,672 | 60,841 | 63,546 | ||||
| FBR & CO. | |||||
| CONSOLIDATED BALANCE SHEETS | |||||
| (Dollars in thousands, except per share amounts) | |||||
| (Unaudited) | |||||
| ASSETS |
December 31, 2011 |
December 31, 2010 |
|||
| Cash and cash equivalents | $ 135,792 | $ 236,077 | |||
| Receivables: | |||||
| Due from brokers, dealers and clearing organizations | 6,048 | 15,463 | |||
| Customers | 3,937 | 10,280 | |||
| Other | 6,854 | 11,635 | |||
| Financial instruments owned, at fair value | 100,634 | 86,400 | |||
| Other investments, at cost | 25,744 | 45,224 | |||
| Goodwill | -- | 5,882 | |||
| Intangible assets, net | 2,121 | 2,583 | |||
| Furniture, equipment and leasehold improvements, net | 6,162 | 9,741 | |||
| Prepaid expenses and other assets | 10,791 | 8,182 | |||
| Total assets | $ 298,083 | $ 431,467 | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||
| Liabilities: | |||||
| Securities sold but not yet purchased, at fair value | $ 35,496 | $ 55,444 | |||
| Accrued compensation and benefits | 15,760 | 53,305 | |||
| Accounts payable, accrued expenses and other liabilities | 15,280 | 23,904 | |||
| Due to brokers, dealers and clearing organizations | 6,250 | 7,323 | |||
| Total liabilities | 72,786 | 139,976 | |||
| Shareholders' equity: | |||||
| Common stock | 55 | 62 | |||
| Additional paid-in capital | 412,551 | 423,935 | |||
| Restricted stock units | 29,013 | 34,239 | |||
| Accumulated other comprehensive loss | 19 | (53) | |||
| Accumulated deficit | (216,341) | (166,692) | |||
| Total shareholders' equity | 225,297 | 291,491 | |||
| Total liabilities and shareholders' equity | $ 298,083 | $ 431,467 | |||
| Book Value per Share | $3.99 | $4.60 | |||
| Shares Outstanding (in thousands) | 56,490 | 63,354 | |||
| FBR & CO. | |||||
| Financial & Statistical Supplement - Operating Results | |||||
| (Dollars in thousands) | |||||
| (Unaudited) | |||||
| Q-4 11 | Q-3 11 | Q-2 11 | Q-1 11 | Q-4 10 | |
| Revenues, net of interest expense | $ 27,737 | $ 20,134 | $ 49,182 | $ 50,098 | $ 75,270 |
| Non-interest expenses: | |||||
| Variable | 6,262 | 10,272 | 14,974 | 15,860 | 29,683 |
| Fixed | 34,801 | 35,625 | 37,146 | 36,208 | 42,960 |
| Impairment of goodwill | 5,882 | -- | -- | -- | -- |
| (Loss) income before income taxes | (19,208) | (25,763) | (2,938) | (1,970) | 2,627 |
| Income tax (benefit) provision | (327) | 373 | (211) | (65) | (455) |
| Net (loss) income | $ (18,881) | $ (26,136) | $ (2,727) | $ (1,905) | $ 3,082 |
| Fixed expenses | $ 34,801 | $ 35,625 | $ 37,146 | $ 36,208 | $ 42,960 |
| Less: Non-cash expenses1 | 1,523 | 1,927 | 2,459 | 2,352 | 4,255 |
| Corporate transaction costs2 | 567 | -- | 986 | -- | 1,302 |
| Severance | 3,496 | 442 | -- | 806 | 549 |
| Core fixed costs3 | $ 29,215 | $ 33,256 | $ 33,701 | $ 33,050 | $ 36,854 |
| Statistical Data | |||||
| Net revenues per employee (annualized) | $ 376 | $ 189 | $ 444 | $ 431 | $ 601 |
| Employee count | 295 | 426 | 443 | 465 | 501 |
| Net assets under management (in millions) | |||||
| Mutual funds | $ 1,684.8 | $ 1,358.9 | $ 1,635.3 | $ 1,689.4 | $ 1,582.7 |
| 1 Non-cash expenses include compensation costs associated with stock-based awards and amortization of intangible assets. | |||||
| 2 Corporate transaction costs include costs related to reductions in physical space and restructuring costs. | |||||
| 3 Core fixed costs is a non-GAAP measurement used by management to analyze and assess the Company's fixed operating costs. Management believes that this non-GAAP measurement assists investors in understanding the impact of the items noted in footnotes 1 and 2 on the performance of the Company. | |||||
| A limitation of utilizing this non-GAAP measure is that the GAAP accounting effects of these items do in fact reflect the underlying financial results of the Company and these effects should not be ignored in evaluating and analyzing the Company's financial results. Therefore, management believes fixed expenses on a GAAP basis and core fixed costs on a non-GAAP basis should be considered together. | |||||
CONTACT: Media:
Shannon Small
703.469.1190
ssmall@fbr.com
Investors:
Bradley J. Wright
703.469.1080
fbrcir@fbr.com