Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - FBR & Co. | f8k_020513.htm |
| EX-3.1 - EXHIBIT 3.1 - FBR & Co. | exh_31.htm |
| EX-99.2 - EXHIBIT 99.2 - FBR & Co. | exh_992.htm |
EXHIBIT 99.1
FBR Reports Fourth Quarter and Full Year 2012 Financial Results
ARLINGTON, Va., Feb. 5, 2013 (GLOBE NEWSWIRE) -- FBR & Co. (Nasdaq:FBRC) ("FBR" or the "Company"), a leading investment bank serving the middle market, today reported net after-tax earnings of $32.1 million, or $0.60 per diluted share, for the quarter ended December 31, 2012. These results compare to a net after-tax loss of $18.9 million, or $0.33 per diluted share, in the fourth quarter of 2011 and a net after-tax loss of $3.4 million, or $0.07 per diluted share, in the third quarter of 2012. Pretax income from continuing operations for the quarter ended December 31, 2012 was $9.2 million compared to a $19.8 million pretax loss in the fourth quarter of 2011.
For the year ended December 31, 2012, FBR reported net after-tax earnings of $29.7 million, or $0.54 per diluted share, compared to a net after-tax loss of $49.6 million, or $0.82 per diluted share in 2011. Pretax income from continuing operations for the year ended December 31, 2012 was $3.9 million on revenue of $151.5 million compared with a $51.3 million pre-tax loss on revenue of $132.2 million in 2011.
As previously announced, the Company completed the sale of the assets related to the FBR Funds business in October and as a result, FBR recognized income from discontinued operations, net of taxes, of $23.1 million in the fourth quarter.
Fourth quarter 2012 revenue was $58.9 million compared to $24.2 million for the fourth quarter of 2011 and $23.9 million for the third quarter of 2012. The year-over-year and quarter-over-quarter increases were the result of significantly higher investment banking revenues.
Fourth quarter 2012 total expenses were $49.7 million, compared to $44.0 million in the fourth quarter of 2011 and $29.5 million in the third quarter of 2012. The increase in total expense quarter over quarter was primarily due to higher compensation expense as a result of higher revenues. Excluding non-recurring real estate consolidation expenses, non-compensation fixed expenses from continuing operations in the fourth quarter of 2012 totaled $10.9 million, compared to $12.8 million in the fourth quarter of 2011 and $10.2 million in the third quarter of 2012.
2012 Overview
- Investment banking revenue was $90.7 million in 2012 compared to $58.1 million in 2011. These revenues result from the completion of 56 transactions representing a total of $8.7 billion in transaction volume.
- Institutional brokerage generated net revenue of $52.5 million for 2012 compared to $78.5 million in 2011 as industry-wide pressures continued throughout the year in this part of the Company's business.
- Non-compensation fixed expenses for 2012 were $45.1 million compared to $57.2 million in 2011, reflecting the Company's ongoing focus on reducing fixed costs.
- The Company ended 2012 with 256 employees in its continuing operations, down from 278 at the beginning of the year.
- As of December 31, 2012, shareholders' equity totaled $239.9 million, with $174.9 million held in cash, and the Company's tangible book value per share was $4.80, up from $3.95 from the end of 2011.
The Company periodically repurchased shares of its common stock throughout the year. For the year ended, December 31, 2012, the Company repurchased 7.5 million shares at an average price of $2.80 per share. Subsequent to year end 2012, the Company has repurchased an additional 1.9 million shares at an average price of $4.00 per share. Following these recent purchases, the Company continues to have Board authorization to purchase an additional 4.1 million shares.
Earlier today, the Company's Board of Directors approved a 1-for-4 reverse stock split effective February 28, 2013. Details surrounding this corporate action will be covered in a separate release.
"In 2012, we were able to clearly demonstrate the unique strengths and thought leadership of our franchise by completing a number of large, cutting edge transactions across several industry sectors," said Richard J. Hendrix, Chairman and Chief Executive Officer of FBR. "I want to thank everyone on our team for their commitment and hard work on behalf of our clients in 2012. Through these efforts we were able to return to full-year profitability and establish great momentum upon which to build in 2013."
Investors wishing to listen to the earnings call at 9:00 A.M. U.S. EST, Wednesday, February 6, 2013, may do so via the Web or conference call at:
Webcast link: http://investor.shareholder.com/media/eventdetail.cfm?eventid=124101&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 |
| Access code: 88745006 |
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 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, 2011; 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, |
|||
| 2012 | 2011 | 2012 | 2011 | |
| REVENUES: | ||||
| Investment banking: | ||||
| Capital raising | $ 44,577 | $ 4,229 | $ 84,144 | $ 42,862 |
| Advisory | 210 | 2,316 | 6,525 | 15,284 |
| Institutional brokerage: | ||||
| Principal transactions | 5,002 | 3,542 | 19,353 | 18,081 |
| Agency commissions | 7,833 | 11,352 | 33,119 | 60,376 |
| Net investment income (loss) | 684 | 1,215 | 4,906 | (9,664) |
| Interest, dividends & other | 620 | 1,545 | 3,445 | 5,288 |
| Total revenues | 58,926 | 24,199 | 151,492 | 132,227 |
| EXPENSES: | ||||
| Compensation and benefits | 33,118 | 20,768 | 82,672 | 99,808 |
| Professional services | 3,545 | 2,391 | 12,839 | 11,629 |
| Business development | 2,746 | 2,229 | 9,394 | 10,753 |
| Clearing and brokerage fees | 1,460 | 2,385 | 7,490 | 11,928 |
| Occupancy and equipment | 4,072 | 4,275 | 15,755 | 19,034 |
| Communications | 2,989 | 4,134 | 12,553 | 16,402 |
| Impairment of goodwill | -- | 5,882 | -- | 5,882 |
| Other operating expenses | 1,785 | 1,897 | 6,861 | 8,119 |
| Total expenses | 49,715 | 43,961 | 147,564 | 183,555 |
| Income (loss) from continuing operations before income taxes | 9,211 | (19,762) | 3,928 | (51,328) |
| Income tax provision (benefit) | 162 | (340) | (1,078) | (243) |
| Income (loss) from continuing operations, net of taxes | 9,049 | (19,422) | 5,006 | (51,085) |
| Income from discontinued operations, net of taxes | 23,070 | 541 | 24,685 | 1,436 |
| Net income (loss) | $ 32,119 | $ (18,881) | $ 29,691 | $ (49,649) |
| Basic earnings per share: | ||||
| Income (loss) from continuing operations, net of taxes | $ 0.18 | $ (0.34) | $ 0.09 | $ (0.84) |
| Income from discontinued operations, net of taxes | 0.46 | 0.01 | 0.47 | 0.02 |
| Net income (loss) | $ 0.64 | $ (0.33) | $ 0.56 | $ (0.82) |
| Diluted earnings per share: | ||||
| Income (loss) from continuing operations, net of taxes | $ 0.17 | $ (0.34) | $ 0.09 | $ (0.84) |
| Income from discontinued operations, net of taxes | 0.43 | 0.01 | 0.45 | 0.02 |
| Net income (loss) | $ 0.60 | $ (0.33) | $ 0.54 | $ (0.82) |
| Weighted average shares - basic | 50,181 | 56,446 | 53,096 | 60,841 |
| Weighted average shares - diluted | 53,604 | 56,446 | 55,193 | 60,841 |
| FBR & CO. | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (Dollars in thousands, except per share amounts) | ||
| (Unaudited) | ||
| ASSETS |
December 31, 2012 |
December 31, 2011 |
| Cash and cash equivalents | $ 174,925 | $ 135,792 |
| Receivables: | ||
| Due from brokers, dealers and clearing organizations | 4,670 | 6,048 |
| Customers | 2,579 | 3,937 |
| Other | 10,902 | 6,854 |
| Financial instruments owned, at fair value | 121,404 | 100,634 |
| Other investments, at cost | 8,388 | 25,744 |
| Intangible assets, net | -- | 2,121 |
| Furniture, equipment and leasehold improvements, net | 3,693 | 6,162 |
| Prepaid expenses and other assets | 6,883 | 10,791 |
| Total assets | $ 333,444 | $ 298,083 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Liabilities: | ||
| Securities sold but not yet purchased, at fair value | $ 56,929 | $ 35,496 |
| Accrued compensation and benefits | 19,075 | 15,760 |
| Accounts payable, accrued expenses and other liabilities | 13,878 | 15,280 |
| Due to brokers, dealers and clearing organizations | 3,698 | 6,250 |
| Total liabilities | 93,580 | 72,786 |
| Shareholders' equity: | ||
| Common stock | 49 | 55 |
| Additional paid-in capital | 402,631 | 413,224 |
| Employee stock loan receivable, including accrued interest | (307) | (673) |
| Restricted stock units | 25,235 | 29,013 |
| Accumulated other comprehensive (loss) income | (1,094) | 19 |
| Accumulated deficit | (186,650) | (216,341) |
| Total shareholders' equity | 239,864 | 225,297 |
| Total liabilities and shareholders' equity | $ 333,444 | $ 298,083 |
| Book Value per Share | $4.80 | $3.99 |
| Shares Outstanding (in thousands) | 50,022 | 56,490 |
| FBR & CO. | |||||
| Financial & Statistical Supplement - Operating Results | |||||
| (Dollars in thousands) | |||||
| (Unaudited) | |||||
| Q-4 12 | Q-3 12 | Q-2 12 | Q-1 12 | Q-4 11 | |
| Revenues | $ 58,926 | $ 23,889 | $ 33,732 | $ 34,945 | $ 24,199 |
| Expenses: | |||||
| Variable | 24,693 | 5,263 | 8,791 | 8,018 | 5,078 |
| Fixed | 25,022 | 24,204 | 24,619 | 26,954 | 33,001 |
| Impairment of goodwill | -- | -- | -- | -- | 5,882 |
| Income (loss) from continuing operations before income taxes | 9,211 | (5,578) | 322 | (27) | (19,762) |
| Income tax provision (benefit) | 162 | (1,262) | 15 | 7 | (327) |
| Income (loss) from continuing operations, net of taxes | 9,049 | (4,316) | 307 | (34) | (19,435) |
| Income from discontinued operations, net of taxes | 23,070 | 959 | 184 | 472 | 554 |
| Net income (loss) | $ 32,119 | $ (3,357) | $ 491 | $ 438 | $ (18,881) |
| Fixed expenses from continuing operations | $ 25,022 | $ 24,204 | $ 24,619 | $ 26,954 | $ 33,001 |
| Less: Non-cash expenses1 | 2,000 | 1,948 | 1,804 | 1,822 | 1,195 |
| Corporate transaction costs2 | 867 | 646 | -- | 429 | 567 |
| Severance | -- | 61 | -- | 38 | 3,487 |
| Core fixed costs from continuing operations3 | $ 22,155 | $ 21,549 | $ 22,815 | $ 24,665 | $ 27,752 |
| Statistical Data (Continuing Operations) | |||||
| Revenues per employee (annualized) | $ 921 | $ 387 | $ 521 | $ 529 | $ 348 |
| Employee count | 256 | 247 | 259 | 264 | 278 |
| 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 and severance costs 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
703.312.9678
bwright@fbr.com