EXHIBIT 2.02 FOR IMMEDIATE RELEASE |
Investors Capital Holdings Posts Record First Quarter Revenues and Net Income
Lynnfield, Mass. (August 22, 2007)– Investors Capital Holdings, Ltd. (AMEX: ICH), a financial services holding company, posted record revenues of $22.7 million for the first fiscal quarter ended June 30, 2007 (“the quarter”). This represents an increase of $3.1 million, or 16% percent, over revenues of $19.6 million for the comparative quarter ended June 30, 2006 (“prior period”). Investors Capital Holdings has increased its annual revenues each year since its incorporation in 1995.
The Company also posted record net income for the quarter of $466,566 or $0.08 per share, an increase of 178.1%, versus a net loss of $597,622 or $0.10 per share from the comparative quarter ended June 30, 2006.
“We’re very pleased with our results this quarter,” said Theodore E. Charles, Chairman of the Board, Chief Executive Officer, and President of Investors Capital Holdings. “Making the right investments in our home office staff, technology, and practice management initiatives, while prudently managing our costs, has resulted in a very strong recruiting pipeline as well as very strong performance numbers.”
Advisory fees led the record revenue surge, increasing 39.5% over the prior period to $2.1 million. Commissions, which represent the bulk of company revenues, rose 12.9%to $19.7 million. Gross profit for the quarter rose to $4.4 million, a 16.8% increase over the prior period.
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Contributing to these results was a 9.5% increase in average revenue per representative over the prior period, reflecting the company’s continued success in recruiting and supporting successful, top-producing independent registered representatives.
Total operating expenses decreased 25.1% to $3.6 million, led by a 50% decrease in regulatory, legal, and professional expenses over the prior period. As a result, operating income for the quarter increased 177.5% to $807,623, compared to an operating loss of $1.04 million from the prior period.
About Investors Capital Holdings:
Investors Capital Holdings, Ltd. (AMEX: ICH) is a diversified financial services holding company that operates primarily through its independent broker/dealer and investment adviser subsidiary, Investors Capital Corporation (ICC). ICC strives to provide premier service, technical, and administrative support, fee-based asset management programs, and practice management services to its independent registered representatives to help them exceed their clients’ expectations. The Company’s business units include Investors Capital Corporation, Investors Capital Advisory, ICC Insurance Agency, Inc., Eastern Point Advisors, Inc., and Investors Capital Holdings Securities Corporation. For more information, please call (800) 949-1422, ext. 4814 or visit www.investorscapital.com.
Certain statements contained in this press release that are not historical fact may be deemed to be forward-looking statements under federal securities laws. There are many factors that could cause our future actual results to differ materially from those suggested by or forecast in the forward-looking statements. Such factors include, but are not limited to, general economic conditions, interest rate fluctuations, regulatory changes affecting the financial services industry, competitive factors effecting demand for our services, availability of funding, and other risks identified in the Company’s Securities and Exchange Commission filings.
Investors Capital Holdings, Ltd., 230 Broadway, Lynnfield, Massachusetts, Distributor.
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| INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES | ||||
| CONSOLIDADTED BALANCE SHEETS | ||||
| June 30, | March 31, | |||
| 2007 | 2007 | |||
| Assets | ||||
| Current Assets | ||||
| Cash and cash equivalents | $ 4,882,932 | $ 5,498,259 | ||
| Deposit with clearing organization, restricted | 175,000 | 175,000 | ||
| Accounts receivable | 4,174,405 | 4,336,234 | ||
| Note receivable (current) | 8,533 | 8,561 | ||
| Loans receivable from registered representatives (current) | 541,167 | 470,492 | ||
| Prepaid income taxes | - | 35,078 | ||
| Marketable securities, at market value | 144,256 | 206,530 | ||
| Investment (short term) | 1,432,048 | 745,315 | ||
| Prepaid expenses | 333,868 | 482,882 | ||
| 11,692,209 | 11,958,351 | |||
| Property and equipment, net | 1,359,064 | 1,396,793 | ||
| Long Term Investments | ||||
| Loans receivable from registered representatives | 156,724 | 191,305 | ||
| Note receivable | 747,617 | 747,617 | ||
| Equity investments, at cost | 190,000 | 190,000 | ||
| Investments | 495,423 | 1,169,606 | ||
| Cash surrender value life insurance policies | 296,928 | 275,201 | ||
| 1,886,692 | 2,573,729 | |||
| Other Assets | ||||
| Other assets | 70,127 | 72,199 | ||
| Deferred tax asset, net | 866,352 | 889,128 | ||
| 936,479 | 961,327 | |||
| TOTAL ASSETS | $ 15,874,444 | $ 16,890,200 | ||
| Liabilities and Stockholders' Equity | ||||
| Current Liabilities | ||||
| Accounts payable | $ 759,771 | $ 773,636 | ||
| Accrued expenses | 747,820 | 1,871,694 | ||
| Notes payable | 353,637 | 838,358 | ||
| Unearned revenues | 87,546 | 100,363 | ||
| Commissions payable | 3,053,684 | 3,049,900 | ||
| Income taxes payable | 42,406 | - | ||
| Securities sold, not yet purchased, at market value | 65 | 711 | ||
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| 5,044,929 | 6,634,662 | |||
| Long-Term Liabilities | ||||
| Total liabilities | $ 5,044,929 | $ 6,634,662 | ||
| Stockholders' Equity: | ||||
| Common stock, $.01 par value, 10,000,000 | ||||
| shares authorized; 6,257,434 issued and 6,253,549 outstanding at June | ||||
| 30,2007; | ||||
| 6,209,421 issued and 6,205,536 outstanding at March 31 2007 . | 62,574 | 62,094 | ||
| Additional paid-in capital | 9,820,034 | 9,721,749 | ||
| Retained earnings | 935,072 | 468,506 | ||
| less: Treasury stock, 3,885 shares at cost | (30,135) | (30,135) | ||
| Accumulated other comprehensive income | 41,970 | 33,324 | ||
| Total stockholders' equity | 10,829,515 | 10,255,538 | ||
| TOTAL LIABILITIES AND STOCKHOLDERS' | ||||
| EQUITY | $ 15,874,444 | $ 16,890,200 | ||
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| INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| THREE MONTHS ENDED JUNE 30, 2007 AND 2006 | ||||
| (UNAUDITED) | ||||
| | | |
Three Months Ended | |
| June 30, | ||||
| 2007 | 2006 | |||
| Revenues | ||||
| Commission | $ 19,708,113 | $ 17,458,902 | ||
| Advisory fees | 2,188,284 | 1,568,429 | ||
| Other fee income | 129,819 | 66,397 | ||
| Marketing revenue | 494,558 | 324,414 | ||
| Other income | 228,021 | 184,030 | ||
| Total Revenue | 22,748,795 | 19,602,172 | ||
| Commission and advisory fees expenses | 18,325,414 | 15,815,220 | ||
| Gross profit | 4,423,381 | 3,786,952 | ||
| Operating expenses: | ||||
| Advertising | 267,494 | 269,627 | ||
| Communications | 179,003 | 65,767 | ||
| Total Selling Expenses | 446,497 | 335,394 | ||
| Compensation and benefits | 1,980,591 | 2,716,025 | ||
| Regulatory, legal and professional | 606,304 | 1,202,340 | ||
| Occupancy | 305,111 | 234,006 | ||
| Other administrative expenses | 251,611 | 332,604 | ||
| Interest expense | 25,644 | 8,032 | ||
| Total Administrative Expenses | 3,169,261 | 4,493,007 | ||
| Total Operating Expenses | 3,615,758 | 4,828,401 | ||
| Operating Income (Loss) | 807,623 | (1,041,449) | ||
| Income (loss) before taxes | 807,623 | (1,041,449) | ||
| (Provision) benefit for income taxes | (341,057) | 443,827 | ||
| Net Income (Loss) | $ 466,566 | $ (597,622) | ||
| Earnings per common share: | ||||
| Basic earnings per common share | $0.08 | ($0.10) | ||
| Diluted earnings per common share | $0.08 | ($0.10) | ||
| Share data: | ||||
| Weighted average shares used in basic earnings per | ||||
| common share calculations | 6,011,332 | 5,799,998 | ||
| Incremental shares from assumed exercise of stock options | 156,504 | 141,243 | ||
| Weighted average shares used in diluted earnings per | ||||
| common share calculations | 6,167,836 | 5,941,241 | ||
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