Paulson Capital Corp. Reports Second Quarter 2007 ResultsFor First Six Months of 2007, Company Achieves 188% Increase in Revenues and Posts $0.61 in Net Income per Share; Management to Host Teleconference Tomorrow Afternoon Beginning at 1:00 PM ET
PORTLAND, OR -- 08/14/2007 -- Paulson Capital Corp. (NASDAQ: PLCC), parent company to Paulson Investment Company, Inc., today announced its financial results for the three and six months ended June 30, 2007.
Financial Highlights for Three Months Ended June 30, 2007 Compared to Three Months Ended June 30, 2006:
- -- Total revenues increased 12.6% to $8.0 million from $7.1 million.
- -- Commissions earned from securities brokerage activities totaled $4.6
million, up from $4.1 million.
- -- Corporate finance revenues rose 8.5% to $3.5 million from $3.2
million.
- -- Investment losses were $629,000 compared to investment income of
$76,000.
- -- Trading income increased to $371,000 from trading losses of $255,000.
- -- Income before taxes grew 56.2% to $1.7 million from $1.1 million.
- -- Net income totaled $1.0 million, or $0.16 earnings per basic and
diluted share, compared to net income of $721,000, or $0.12 earnings per
basic and diluted share.
Financial Highlights for Six Months Ended June 30, 2007 Compared to Six Months Ended June 30, 2006:
- -- Total revenues increased 188% to $17.7 million from $6.1 million.
- -- Commissions earned from securities brokerage activities rose 6.6% to
$8.7 million from $8.2 million.
- -- Corporate finance revenues totaled $4.4 million, up 37.5% from $3.2
million.
- -- Investment income rose to $2.6 million from investment losses of $5.1
million.
- -- Trading income increased to $1.7 million from a trading loss of
$219,000.
- -- Income before taxes was $6.2 million compared to a loss before taxes
of $4.6 million.
- -- Net income totaled $3.8 million, or $0.61 earnings per basic and
diluted share, compared to a net loss of $2.8 million, or $0.45 loss per
basic and diluted share.
As of June 30, 2007, the Company had $16.1 million in cash and receivables and approximately $38 million in total shareholders' equity. The value of the Company's trading securities, investment securities and underwriter warrants was $34.2 million. During the first six months of 2007, the Company repurchased a total of 111,565 shares of its common stock under the stock repurchase program approved by the Board in September 2001.
Commenting on the results, Chester L.F. Paulson, founder and Chairman of Paulson, noted, "Improved stock prices in the first half of 2007 helped earnings in our four main areas: Trading, Retail, Investment Income account and Corporate Finance. Investment Banking activities for the first six months of 2007 included securing bridges for several companies and completing the initial public offering for Vaughan Foods. Currently, we have a number of projects in the pipeline, and, given a favorable market environment, are anticipating busy third and fourth quarters."
Paulson will host a teleconference tomorrow afternoon, August 15, 2007, beginning at 1:00 PM Eastern Time and invites all interested parties to join management in a discussion regarding the Company's financials, corporate progress and other developments. The conference call can be accessed by dialing toll-free 1-800-867-1054. 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 11094952#. The replay will be available for 30 days.
Paulson Capital Corp. and Subsidiary Consolidated Balance Sheets
June 30, December 31,
2007 2006
------------ ------------
(Unaudited)
Assets
Cash and cash equivalents $ 120,730 $ 219,341
Receivable from clearing organization 14,311,661 7,748,968
Notes and other receivables 1,622,367 1,651,002
Income taxes receivable - 304,695
Trading securities, at market value 8,769,088 2,363,824
Investment securities, at market or estimated
fair value 12,774,205 19,542,643
Underwriter warrants, at estimated fair value 12,645,000 5,650,000
Prepaid and deferred expenses 269,865 711,827
Furniture and equipment, at cost, net of
accumulated depreciation and amortization
of $804,086 and $747,759 248,813 271,766
------------ ------------
Total Assets $ 50,761,729 $ 38,464,066
============ ============
Liabilities and Shareholders' Equity
Accounts payable and accrued liabilities $ 653,105 $ 570,823
Payable to clearing organization 4,096,771 -
Compensation, employee benefits and payroll
taxes 1,173,064 954,981
Securities sold, not yet purchased, at market
value 2,686,879 17,244
Income taxes payable - current 279,298 -
Income taxes payable - long-term 190,000 -
Deferred revenue 425,000 475,000
Deferred income taxes 3,307,773 1,670,000
------------ ------------
Total Liabilities 12,811,890 3,688,048
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: 6,089,446 and 6,179,011 1,972,747 1,920,293
Retained earnings 35,977,092 32,855,725
------------ ------------
Total Shareholders' Equity 37,949,839 34,776,018
------------ ------------
Total Liabilities and Shareholders' Equity $ 50,761,729 $ 38,464,066
------------ ------------
Paulson Capital Corp. and Subsidiary
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
------------------------ ------------------------
2007 2006 2007 2006
----------- ----------- ----------- ------------
Revenues
Commissions $ 4,603,971 $ 4,076,360 $ 8,720,539 $ 8,179,394
Corporate finance 3,450,296 3,178,920 4,445,807 3,232,188
Investment income
(loss) (628,508) 75,735 2,555,836 (5,089,031)
Trading income
(loss) 370,687 (254,547) 1,710,763 (218,710)
Interest and
dividends 36,826 12,996 70,999 26,164
Other 146,700 440 172,075 1,614
----------- ----------- ----------- ------------
7,979,972 7,089,904 17,676,019 6,131,619
Expenses
Commissions and
salaries 4,818,382 4,727,534 8,783,091 8,444,543
Underwriting
expenses 149,509 132,446 309,464 167,446
Rent, telephone and
quotation services 303,945 289,758 617,180 586,266
Professional fees 141,228 226,090 345,173 450,377
Bad debt expense 107,160 101 154,849 1,618
Travel and
entertainment 41,804 211,307 77,184 253,339
Advertising and
promotion expense 36,720 49,669 84,726 85,703
Settlement expense 230,000 4,750 309,717 4,750
Depreciation and
amortization 27,363 22,604 56,327 44,477
Other 461,811 361,963 775,859 699,415
----------- ----------- ----------- ------------
6,317,922 6,026,222 11,513,570 10,737,934
----------- ----------- ----------- ------------
Income (loss) before
income taxes 1,662,050 1,063,682 6,162,449 (4,606,315)
Income tax expense
(benefit):
Current 259,647 14,749 746,602 2,114,639
Deferred 401,526 327,524 1,637,773 (3,915,625)
----------- ----------- ----------- ------------
661,173 342,273 2,384,375 (1,800,986)
----------- ----------- ----------- ------------
Net income (loss) $ 1,000,877 $ 721,409 $ 3,778,074 $ (2,805,329)
=========== =========== =========== ============
Basic net income
(loss) per share $ 0.16 $ 0.12 $ 0.61 $ (0.45)
=========== =========== =========== ============
Diluted net income
(loss) per share $ 0.16 $ 0.12 $ 0.61 $ (0.45)
=========== =========== =========== ============
Shares used in per
share calculations:
Basic 6,144,599 6,183,719 6,151,100 6,186,441
=========== =========== =========== ============
Diluted 6,154,496 6,231,599 6,161,051 6,186,441
----------- ----------- ----------- ------------
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.
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
or
Daniel Conway
Chief Strategist
Elite Financial Communications Group
407-585-1080
plcc@efcg.net