For 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