Conference Call Rescheduled for Tuesday, April 3, 2007 at 4:15 PM ET
PORTLAND, OR -- 04/02/2007 -- Paulson Capital Corp. (NASDAQ: PLCC), parent company to Paulson Investment Company, Inc.(PICI), today announced its results for the fiscal year ended December 31, 2006.
Key Comparative Financial Data for 2006 and 2005:
- -- Sales commissions decreased 4.8% to $15.7 million, down from $16.5 million. - -- Corporate finance revenues rose 54.6% to $5.0 million from $3.3 million. - -- Investment loss from the Company's proprietary investment accounts totaled $6.3 million, down from investment income of $15.8 million. - -- Trading loss was $1.3 million, a decrease from trading income of $2.9 million. - -- Total revenues decreased to $13.5 million from $39.7 million. - -- Expenses declined 21.2% to $20.8 million from $26.4 million. - -- Net loss equaled $4.9 million, or $0.79 diluted loss per share, down from net income of $8.5 million, or $1.35 diluted earnings per share.As of December 31, 2006, the Company had $9.92 million in cash and receivables and $34.78 million in total shareholders' equity. Net cash provided by the Company's operating activities in 2006 totaled $1.29 million. At year-end, the value of the Company's trading securities, investment securities and underwriter warrants was $27.56 million. During 2006, the Company repurchased a total of 37,437 shares of its common stock under the stock repurchase program approved by the Board in September 2001.
Key Operational Highlights in 2006:
- -- PICI led Initial Public Offerings for Ascent Solar Technologies and American Mold Guard, Inc., collectively raising $36 million in gross proceeds for the companies. - -- In addition to several small private transactions, PICI also led a secondary public offering for ICOP Digital, Inc., raising gross proceeds of nearly $7 million.According to Chester L.F. Paulson, founder and Chairman of Paulson, "2006 was a difficult year, in general, for small and micro-cap stocks, with many of those held in our investment accounts delivering relatively flat to down market performance. However, overall that does not concern us. In the past 30 years, we've learned quite a bit about the volatile market fluctuation inherent in emerging growth companies, so it rarely alarms us when relatively new publicly traded small cap companies suffer pullbacks. Rather, we view these pullbacks when they occur as buying opportunities. Historically, many of our big market wins have occurred following a period of market declination and price volatility, including Pre-Paid Legal, Taser International, ICOP Digital, Ascent Solar, Lumera and DayStar Technologies, among others. Consequently, we expect that opportunities seized in 2006 will ultimately reward us in the years ahead as our investment banking clients/portfolio companies persist in successfully executing their business plans."
The teleconference originally scheduled for this afternoon has been rescheduled and will take place tomorrow, Tuesday, April 3, 2007, beginning at 4:15 PM ET. All interested parties are invited to join management in a discussion regarding the Company's financials, corporate progression and other meaningful developments. The conference call can be accessed by dialing toll-free 1-800-257-7063. For those unable to participate at that time, a replay of the teleconference can be accessed domestically by dialing 1-800-405-2236 and enter the passcode 11086330#. The replay will be available for 30 days.
About Paulson Capital Corporation
Paulson Capital Corporation is the parent company to Paulson Investment Company, Inc. Located in Portland, Oregon, Paulson Investment Company is the Northwest's largest independent brokerage firm and a national leader in public offerings of small and emerging growth companies with capital needs of $5 million to $45 million. Founded by Chet Paulson in 1970, it has managed or underwritten more than 150 public offerings and has generated more than $1 billion for client companies.
Paulson Capital Corp. and Subsidiary CONSOLIDATED BALANCE SHEETS December 31, ------------------------------ 2006 2005 -------------- -------------- Assets Cash and cash equivalents $ 219,341 $ 129,549 Receivable from clearing organization 7,748,968 12,608,491 Notes and other receivables 1,651,002 1,081,528 Income taxes receivable 304,695 - Trading securities, at market value 2,363,824 1,558,564 Investment securities, at market or estimated fair value 19,542,643 32,401,808 Underwriter warrants, at estimated fair value 5,650,000 6,275,000 Prepaid and deferred expenses 711,827 674,328 Furniture and equipment, at cost, net of accumulated depreciation and amortization of $747,759 and $962,943 271,766 265,791 -------------- -------------- Total Assets $ 38,464,066 $ 54,995,059 ============== ============== Liabilities and Shareholders' Equity Accounts payable and accrued liabilities $ 570,823 $ 1,243,866 Payable to clearing organization - 3,182,347 Compensation, employee benefits and payroll taxes 954,981 2,105,259 Securities sold, not yet purchased, at market value 17,244 23,033 Dividends payable - 929,317 Income taxes payable - 2,338,218 Deferred revenue 475,000 - Deferred income taxes 1,670,000 5,408,000 -------------- -------------- Total Liabilities 3,688,048 15,230,040 Commitments and Contingencies - - Shareholders' Equity Preferred stock, no par value; 500,000 shares authorized; none issued - - Common stock, no par value; 20,000,000 shares authorized; shares issued and outstanding: 6,179,011 and 6,195,448 1,920,293 1,817,100 Retained earnings 32,855,725 37,947,919 -------------- -------------- Total Shareholders' Equity 34,776,018 39,765,019 -------------- -------------- Total Liabilities and Shareholders' Equity $ 38,464,066 $ 54,995,059 ============== ============== Paulson Capital Corp. and Subsidiary CONSOLIDATED STATEMENT OF OPERATIONS (Audited) For the Year Ended December 31, ---------------------------------------- 2006 2005 2004 ------------ ------------ ------------ Revenues Commissions $ 15,724,699 $ 16,517,709 $ 18,304,103 Corporate finance 5,035,929 3,259,092 11,213,195 Investment income (loss) (6,345,099) 15,839,768 2,017,840 Trading income (loss) (1,337,726) 2,926,440 1,350,816 Interest and dividends 77,845 51,062 27,686 Other 307,936 1,142,277 1,635 ------------ ------------ ------------ 13,463,584 39,736,348 32,915,275 Expenses Commissions and salaries 14,984,974 18,701,260 19,263,085 Underwriting expenses 457,974 227,412 876,981 Rent, telephone and quotation services 1,205,000 1,281,293 1,211,383 Professional fees 784,150 1,456,649 1,029,800 Bad debt expense 5,280 299,745 684,429 Travel and entertainment 284,661 229,055 368,044 Advertising and promotion expense 187,417 273,430 302,486 Settlement expense 396,282 870,535 1,274,540 Depreciation and amortization 103,129 90,814 96,914 Other 2,361,144 2,926,095 1,911,147 ------------ ------------ ------------ 20,770,011 26,356,288 27,018,809 ------------ ------------ ------------ Income (loss) before income taxes (7,306,427) 13,380,060 5,896,466 Income tax expense (benefit): Current 1,294,000 4,916,000 (115,734) Deferred (3,738,000) (28,000) 2,522,600 ------------ ------------ ------------ (2,444,000) 4,888,000 2,406,866 ------------ ------------ ------------ Net income (loss) $ (4,862,427) $ 8,492,060 $ 3,489,600 ============ ============ ============ Basic net income (loss) per share $ (0.79) $ 1.36 $ 0.55 ============ ============ ============ Diluted net income (loss) per share $ (0.79) $ 1.35 $ 0.55 ============ ============ ============ Shares used in per share calculations: Basic 6,179,858 6,262,886 6,366,388 ============ ============ ============ Diluted 6,179,858 6,295,264 6,373,778 ============ ============ ============This release may contain "forward-looking statements" based on current expectations but involving known and unknown risks and uncertainties. Actual results of achievements may be materially different from those expressed or implied. The Company's plan and objectives are based on judgments with respect to future conditions in the securities markets as well as general assumptions regarding the economy and competitive environment in the securities industry, which can be volatile and out of our control. In particular, we make assumptions about our ability to complete corporate finance transactions and increase the volume and size of our securities trading operations, which are difficult or impossible to predict accurately and often beyond the control of the Company. Therefore, there can be no assurance that any forward-looking statement will prove to be accurate.
FOR MORE INFORMATION, PLEASE CONTACT: Dodi Handy President and CEO Elite Financial Communications Group 407-585-1080 email at plcc@efcg.net