NATIONAL HOLDINGS CORP - FORM 8-K - EX-99 - EXHIBIT 99.1

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8-K - FORM 8-K - NATIONAL HOLDINGS CORP	nhld20130516_8k.htm

Exhibit 99.1

FOR IMMEDIATE RELEASE

NATIONAL HOLDINGS CORPORATION REPORTS FISCAL SECOND QUARTER 2013 FINANCIAL RESULTS

NEW YORK, May 13, 2013 – National Holdings Corporation (OTC BB: NHLD) (”National Holdings” or the “Company”), a leading hybrid broker dealer, today announced financial results for the Company’s fiscal second quarter and six months ended March 31, 2013.

Fiscal Second Quarter and Year-to-Date Highlights

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Generated fiscal second quarter 2013 net income of $0.5 million, or $0.01 per basic and diluted share, compared with a loss of $1.8 million, or $0.07 per basic and diluted share in the year-ago period

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Reported Adjusted EBITDA, a non-GAAP measure, of $1.2 million and $1.6 million for the fiscal second quarter and six months ended March 31, 2013, compared with $0.1 million and a loss of $0.2 million, respectively

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Strengthened capital structure with $8.8 million private offering and converted all preferred share classes into common shares

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Satisfied all remaining $2.8 million of outstanding debt

Mark D. Klein, National Holdings’ Chief Executive Officer and Co-Executive Chairman, commented, “Over the past nine months, we have implemented a series of initiatives designed to focus our revenue mix on higher margin offerings, reduce costs, return to profitability and strengthen our capital and reporting structures. We are now seeing significant improvements in all of these key areas, with additional benefits to be realized in the coming quarters. Our improving results are a testament to the Company’s success managing costs and streamlining operations. We expect to actively evaluate opportunities to expand into new products, broaden our business platform and increase our established brokerage force.”

Fiscal Second Quarter 2013 Financial Review

National Holdings reported fiscal second quarter 2013 total revenue of $32.9 million, a decrease of 1% from revenue of $33.2 million reported in the fiscal second quarter of 2012.

Operating expenses were $32.2 million in the second fiscal quarter of 2013. The $32.2 million represents a $1.7 million, or 5% decrease in expenses, compared with $33.9 million in the fiscal second quarter of 2012. The decrease in expenses was due primarily to improvements in reduced occupancy costs and overall lower payroll. These expense reductions enabled the Company to return to profitability.

The Company uses Earnings before interest, taxes, depreciation and amortization (EBITDA) and adjusted EBITDA to provide greater clarity regarding the cash earnings of the business by removing income taxes, non-cash reorganization-related share-based compensation charges and non-cash interest expenses, as defined in the Non-GAAP Financial Measures section below. On this basis, National Holdings reported fiscal second quarter 2013 Adjusted EBITDA of $1.2 million, compared with $0.1 million in the fiscal second quarter of 2012.

On a GAAP basis, net income for the fiscal second quarter was $0.5 million, or $0.01 per basic and diluted share, compared with a net loss of $1.8 million, or $0.07 per basic and diluted share, in the fiscal second quarter of 2012.

Six Months Ended March 31, 2013 Financial Review

National Holdings reported 2013 year-to-date revenue of $59.4 million, an increase of 1% over year-to-date revenue of $58.6 million reported in 2012.

Operating expenses were $58.7 million for the six months ended March 31, 2013. The $58.7 million represents a 3% decrease from $60.3 million in the prior year period of 2012. The decrease was primarily a result of the Company’s focus on managing expenses and increasing efficiencies within its brokerage operations, as well as other cost reduction efforts as described in the fiscal second quarter review.

Adjusted EBITDA increased to $1.6 million in the six months ended March 31, 2013, compared with a loss of $0.2 million in the six months ended March 31, 2012.

On a GAAP basis, net income for the six months ended March 31, 2013 was $0.5 million, or $0.01 per basic and diluted share, compared with a net loss of $2.8 million, or $0.12 per basic and diluted share in 2012.

Balance Sheet

As of March 31, 2013, National Holdings had $13.5 million in cash and cash equivalents. On January 25, 2013, the Company completed an offering of 29.45 million shares of its common stock that raised gross proceeds of $8.8 million. The proceeds were used to repay $2.8 million in debt. Proceeds will also be utilized for general working capital purposes, as well as investments in organic and M&A opportunities to expand, strengthen and diversify National Holdings’ business units. As part of this transaction, the Company converted its outstanding preferred Series C, D and E into common stock. No preferred shares of National Holdings remain outstanding as of March 31, 2013.

Conference Call

National Holdings will host a conference call to discuss its fiscal second quarter 2013 earnings results on Monday, May 13, 2013, at 5:00 p.m. ET. To access the teleconference, please dial (706) 902-2067 (domestic and international) approximately ten minutes before the teleconference’s scheduled start time and reference ID # 64698546. A live webcast will also be available on the investor relations portion of National Holdings’ website at http://www.nhldcorp.com/investors.aspx.

If you are unable to access the live teleconference, a replay will be available beginning approximately two hours after the call’s completion and available through May 20, 2013. The teleconference replay can be accessed by dialing (404) 537-3406 (domestic and international) and entering the ID# 64698546. A webcast replay will also be available on the investor relations portion of National Holding’s website at http://www.nhldcorp.com/investors.aspx.

About National Holdings Corporation

National Holdings Corporation is a full-service investment banking and asset management firm that provides a range of services, including independent retail brokerage and advisory services, investment banking, institutional sales and trading and equity research, to corporations, institutional investors and high-net-worth clients. With over 1,000 Independent advisors, brokers, traders and sales associates, the Company is a leading Independent Advisor and Broker services company. National Holdings operates through four subsidiaries: National Securities Corporation, vFinance Investments, Inc., National Insurance Corporation and National Asset Management, Inc. The Company was founded in 1947 and is headquartered in New York and Florida. For more information, visit www.nhldcorp.com.

Safe Harbor Statements

This release contains forward-looking statements within the meaning of the federal securities laws. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Information on significant potential risks and uncertainties that may also cause differences includes, but is not limited to, those mentioned by National Holdings from time to time in their filings with the SEC. The words “may,” “will,” “believe,” “estimate,” “expect,” “plan,” “intend,” “project,” “anticipate,” “could,” “would,” “should,” “seek,” “continue,” “pursue” and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. National Holdings undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may be disclosed from time to time in our SEC filings or otherwise, including the factors discussed in Item 1A, Risk Factors, of our Annual Report on Form 10-K and in or periodic reports on Form 10-Q, and, therefore, readers should not place undue reliance on these forward-looking statements.

Contacts:

National Holdings Corporation

Mark Klein, 212-417-8210

Chief Executive Officer and Co-Chairman

Robert Fagenson, 212-847-3200

Executive Co-Chairman

Source National Holdings Corporation

(Financial Tables Follow)

NATIONAL HOLDINGS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

ASSETS

	March 31,			September 30,
	2013			2012
Current Assets	(Unaudited)			(Audited)
Cash and cash equivalents	$	13,496,000		$	7,934,000
Deposit with clearing organizations		1,107,000			1,107,000
Receivables from broker-dealers and clearing organizations		3,572,000			3,650,000
Other receivables, net of allowance for uncollectible accounts		747,000			147,000
Advances to registered representatives - Current portion		215,000			249,000
Securities owned: marketable – at market value		2,072,000			696,000
Securities owned: non-marketable – at fair value		423,000			56,000
Other assets		907,000			520,000
Total Current Assets		22,539,000			14,359,000

Advances to registered representatives - Long term portion		531,000			641,000
Fixed assets, net		474,000			662,000
Intangible assets, net		155,000			466,000
Other assets		155,000			461,000
Total Assets	$	23,854,000		$	16,589,000

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable, accrued expenses and other liabilities	$	12,421,000		$	11,297,000
Payable to broker-dealers and clearing organizations		13,000			119,000
Securities sold, but not yet purchased, at market		213,000			1,000
Convertible notes payable		-			6,800,000
Subordinated borrowings - Related party		-			1,000,000
Total Current Liabilities		12,647,000			19,217,000

Accrued expenses and other liabilities - Long term portion		236,000			263,000

Total Liabilities		12,883,000			19,480,000

National Holdings Corporation Stockholders' Equity (Deficit)
Series C and D, convertible preferred stock, $0.01 par value, 10,000,000 shares
authorized, 0 issued and outstanding at March 31, 2013 and 94,169 at September 30, 2012		-			6,156,000
Common stock, $.02 par value, 150,000,000 shares authorized;
89,016,988 and 26,567,193 shares issued and outstanding at March 31, 2013 and
September 30, 2012		1,780,000			531,000
Additional paid-in capital		64,496,000			46,184,000
Accumulated deficit		(55,326,000	)		(55,780,000	)
Total National Holdings Corporation Stockholders' Equity (Deficit)		10,950,000			(2,909,000	)

Non Controlling Interest		21,000			18,000

Total Stockholders' Equity (Deficit)		10,971,000			(2,891,000	)

Total Liabilities and Stockholders' Equity (Deficit)	$	23,854,000		$	16,589,000

The accompanying notes are an integral part of these unaudited consolidated financial statements.

NATIONAL HOLDINGS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three-month Period Ended						Six-month Period Ended
	March 31,						March 31,
	2013			2012			2013			2012
Revenues
Commissions	$	20,769,000		$	20,484,000		$	36,809,000		$	33,687,000
Net dealer inventory gains		4,310,000			3,686,000			6,912,000			6,762,000
Investment banking		2,334,000			4,232,000			4,389,000			8,987,000
Interest and dividends		1,004,000			663,000			2,050,000			1,366,000
Transfer fees and clearing services		2,033,000			2,141,000			4,040,000			3,971,000
Investment advisory fees and other income		2,499,000			2,003,000			5,193,000			3,835,000
Total Revenues		32,949,000			33,209,000			59,393,000			58,608,000

Operating Expenses
Commissions, compensation and fees		28,329,000			29,682,000			51,164,000			52,412,000
Clearing fees		575,000			374,000			997,000			834,000
Communications		1,149,000			1,162,000			2,267,000			2,362,000
Occupancy, equipment and other administrative costs		981,000			1,345,000			1,754,000			2,206,000
Professional fees		764,000			643,000			1,535,000			1,174,000
Interest		66,000			276,000			230,000			552,000
Taxes, licenses, registration		369,000			440,000			777,000			803,000
Total Operating Expenses		32,233,000			33,922,000			58,724,000			60,343,000

Net Income (Loss) from Operations		716,000			(713,000	)		669,000			(1,735,000	)

Other Expenses
Loss on disposition of unconsolidated joint venture		-			(1,051,000	)		-			(1,051,000	)
Loss on investment in unaffiliated entity		(162,000	)		-			(162,000	)		-
Income tax expense - Current		(60,000	)		-			(60,000	)		-
Total Other Expenses		(222,000	)		(1,051,000	)		(222,000	)		(1,051,000	)

Net income (loss) before non-controlling interest		494,000			(1,764,000	)		447,000			(2,786,000	)
Non-controlling interest		-			4,000			7,000			17,000
Net income (loss)		494,000			(1,760,000	)		454,000			(2,769,000	)

Preferred stock dividends		-			-			-			(93,000	)

Net income (loss) attributable to common stockholders	$	494,000		$	(1,760,000	)	$	454,000		$	(2,862,000	)

Diluted:
Net income (loss) attributable to common stockholders	$	0.01		$	(0.07	)	$	0.01		$	(0.12	)
Net income (loss) attributable to common stockholders: Diluted	$	0.01		$	(0.07	)	$	0.01		$	(0.12	)

Weighted average number of shares outstanding: Basic		72,232,218			26,088,530			49,289,601			23,855,581
Weighted average number of shares outstanding: Diluted		74,743,336			26,088,530			55,324,608			23,855,581

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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 combined 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.

National Holdings Corporation

Reconciliation of Non-GAAP Financial Measures to GAAP Measures

(unaudited)

	Three Months Ended					Six Months Ended
	March 31,					March 31,
	2013		2012			2013		2012

Net income (loss), as reported	$	494,000	$	(1,760,000	)	$	454,000	$	(2,769,000	)
Interest expense		66,000		276,000			230,000		552,000
Taxes		88,000		43,000			108,000		83,000
Depreciation		110,000		140,000			227,000		288,000
Amortization		155,000		155,000			311,000		311,000
EBITDA		913,000		(1,146,000	)		1,330,000		(1,535,000	)
Non-cash compensation expense		-		4,000			-		10,000
Non-cash other administrative expense		-		140,000			-		140,000
Forgivable loan write down		75,000		60,000			135,000		143,000
Loss on disposition of joint venture		-		1,051,000			-		1,051,000
Loss on investment in unaffiliated entity		162,000		-			162,000		-
EBITDA, as adjusted	$	1,150,000	$	109,000		$	1,627,000	$	(191,000	)

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