Exhibit 99.1
GLEACHER & COMPANY REPORTS THIRD QUARTER
2012 FINANCIAL RESULTS
Company pursuing sale of ClearPoint
NEW YORK, N.Y., November 8, 2012 — Gleacher & Company, Inc. (Nasdaq: GLCH) today reported net revenues of $43.3 million, net loss from continuing operations of ($2.8) million, and diluted loss per share of ($0.02).
Highlights
· Hired industry veteran Randy Barker as Head of Investment Banking, and continue to make progress recruiting MDs to industry verticals
· Recruited 27 professionals to MBS & Rates Business, including the RangeMark mortgage analytics team; unit is now repositioned and substantially rebuilt
· Recruited 5 professionals throughout High Grade and High Yield Businesses; results continued to improve vs. previous quarters
· Reduced market exposure in MBS & Rates by winding down repo book; balance sheet usage now 70% lower than reported high at Q1 end
· ClearPoint results were in line with expectations; pursuing sale of business
Thomas Hughes, Chief Executive Officer, said, “We have now assembled a deeply experienced leadership team, as well as producers throughout our organization who are expert content providers, who are trusted advisors to their clients, and who can drive the operating margin and ROE goals we have established. We have adjusted certain of our business strategies and compensation methodologies, and I am delighted with the progress we have made managing those changes. Additionally, we have strengthened our balance sheet by winding down our repo book, and our capital position remains strong.”
Mr. Hughes continued, “As we stated previously, we embarked upon a process exploring our strategic options, and we continue to evaluate identified opportunities. The process may end in merger with a strategic counterparty, a strategic acquisition, divestiture of business units, investment in our company by a third party, or a stay the course outcome. Market dynamics continue to develop in our favor, and we are stronger and better positioned today than we were a year ago.
We faced some challenges with our ClearPoint subsidiary earlier this year. While we have addressed the principal operational issues at ClearPoint, the commercial prospects for this activity on our platform have changed dramatically during this time period. In light of these developments, we have decided to pursue a sale of our ClearPoint business.”
Mr. Hughes also said, “Our Company is comprised of very talented professionals, experts in their craft, who are dedicated to servicing their clients. Their efforts this year have been extraordinary, and I am very proud to be a member of our team.”
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| | Three Months Ended | | Nine Months Ended | |
(In thousands, except for per share amounts) | | September
2012 | | June
2012 | | September
2011 | | September
2012 | | September
2011 | |
| | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | |
Net revenues | | $ | 43,330 | | $ | 44,647 | | $ | 54,164 | | $ | 152,718 | | $ | 199,932 | |
Pre-tax loss from continuing operations | | (5,024) | | (31,751 | ) | (78,785 | ) | (42,057 | ) | (61,640 | ) |
Net loss from continuing operations | | (2,801) | | (60,809 | ) | (75,700 | ) | (68,326 | ) | (65,848 | ) |
Discontinued operations, net of taxes | | 33 | | (23 | ) | (5,357 | ) | 41 | | (18,425 | ) |
| | | | | | | | | | | |
Non-GAAP pre-tax (loss)/income from continuing operations* | | (5,059) | | (9,655 | ) | 4,003 | | (18,346 | ) | 20,504 | |
Non-GAAP net (loss)/income from continuing operations* | | (2,821) | | (7,077 | ) | 2,177 | | (13,681 | ) | 10,368 | |
| | | | | | | | | | | |
Earnings per share: | | | | | | | | | | | |
Diluted – continuing operations | | $ | (0.02) | | $ | (0.51 | ) | $ | (0.61 | ) | $ | (0.57 | ) | $ | (0.53 | ) |
Diluted – continuing operations (Non-GAAP)* | | (0.02) | | (0.06 | ) | 0.02 | | (0.11 | ) | 0.08 | |
* Designates non-GAAP financial results. A reconciliation of the Company’s GAAP results to non-GAAP financial results is set forth below under the caption “Non-GAAP Financial Results.”
The Company has included in this press release “non-GAAP financial results.” A non-GAAP financial result is a numerical measure of financial position or results of operations that includes amounts that are excluded, or excludes amounts that are included, in the most directly comparable result calculated and presented in accordance with generally accepted accounting principles (“GAAP”).
In the financial data included in this press release, the items for which the Company adjusted its GAAP results consist of the following:
· the reversal of certain severance expense in the third quarter of 2012, previously accrued during the first quarter,
· legal, consulting and advisory costs incurred in connection with our strategic alternatives process during the second quarter and third quarter of 2012,
· impairment of goodwill and intangibles recorded during the second quarter of 2012 and the third quarter of 2011, as well as other non-compensation expenses incurred in connection with the Investment Banking realignment,
· valuation allowance on deferred tax assets recorded during the second quarter of 2012,
· severance expense recorded during the first quarter of 2012 and third quarter of 2011,
· compensation expense related to the resignation of the former interim CEO in the second quarter of 2011, and
· the bargain purchase gain related to the ClearPoint acquisition in the first quarter of 2011.
For detailed information on the adjustments made, and a reconciliation of the non-GAAP financial results included in this press release to the most directly comparable GAAP financial metrics, refer to “Non-GAAP Financial Results” below. While the Company believes that the non-GAAP financial results included herein are instructive, they should only be considered together with their corresponding GAAP financial metrics.
2
Business Segment Results (including Non-GAAP results)
| | Three Months Ended | | Nine Months Ended | |
(In thousands of dollars) | | September
2012 | | June
2012 | | September
2011 | | September
2012 | | September
2011 | |
| | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | |
| | | | | | | | | | | |
Net revenues: | | | | | | | | | | | |
Investment Banking | | $ | 1,499 | | $ | 8,730 | | $ | 7,075 | | $ | 14,762 | | $ | 23,674 | |
MBS & Rates | | 8,943 | | 5,282 | | 13,714 | | 34,556 | | 89,189 | |
Credit Products | | 18,804 | | 17,872 | | 15,722 | | 58,393 | | 51,038 | |
ClearPoint | | 12,899 | | 11,316 | | 12,742 | | 39,760 | | 26,109 | |
Net revenues – operating segments | | 42,145 | | 43,200 | | 49,253 | | 147,471 | | 190,010 | |
Other | | 1,185 | | 1,447 | | 4,911 | | 5,247 | | 7,592 | * |
Total | | $ | 43,330 | | $ | 44,647 | | $ | 54,164 | | $ | 152,718 | | $ | 197,602 | * |
| | | | | | | | | | | |
Pre-tax (loss)/income from continuing operations: | | | | | | | | | | | |
Investment Banking | | $ | (257 | ) | $ | 2,195 | | $ | 842 | * | $ | 2,517 | | $ | 5,833 | * |
MBS & Rates | | 1,814 | | (1,746 | ) | 4,247 | | 5,556 | | 29,655 | |
Credit Products | | 2,619 | * | 1,285 | | 3,495 | | 4,866 | * | 6,338 | |
ClearPoint | | (524 | ) | (2,512 | ) | (335 | ) | (5,878 | ) | (2,907 | ) |
Pre-tax income/(loss) – operating segments | | 3,652 | | (778 | ) | 8,249 | | 7,061 | | 38,919 | |
Other | | (8,711 | )* | (8,877 | )* | (4,246 | )* | (25,407 | )* | (18,415 | )* |
Total | | $ | (5,059 | ) | $ | (9,655 | )* | $ | 4,003 | * | $ | (18,346 | )* | $ | 20,504 | * |
* Designates non-GAAP financial results. A reconciliation of the Company’s GAAP results to its non-GAAP financial results is set forth below under the caption “Non-GAAP Financial Results.”
3
Investment Banking
Net revenues were $1.5 million for the quarter ended September 30, 2012, a decline of $7.2 million compared to the second quarter of 2012 and $5.6 million compared to the third quarter of 2011. Net revenues were $14.8 million for the nine months ended September 30, 2012, a decline of $8.9 million compared to the prior-year period. Investment banking revenues for the three months ended June 30, 2012 and nine months ended September 30, 2012 benefitted from advisory fees of $7.5 million relating to an engagement on a transaction that closed during the second quarter.
The composition of the division’s investment banking revenues was as follows:
| | Three Months Ended | | Nine Months Ended | |
(In thousands) | | September
2012 | | June
2012 | | September
2011 | | September
2012 | | September
2011 | |
| | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | |
| | | | | | | | | | | |
Advisory | | $ | 915 | | $ | 8,251 | | $ | 6,165 | | $ | 11,696 | | $ | 17,999 | |
Capital Markets | | 585 | | 479 | | 910 | | 3,066 | | 5,675 | |
Total: | | $ | 1,499 | | $ | 8,730 | | $ | 7,075 | | $ | 14,762 | | $ | 23,674 | |
MBS & Rates
Net revenues were $8.9 million for the quarter ended September 30, 2012, an improvement of $3.7 million compared to the second quarter of 2012 and a decline of $4.8 million compared to the third quarter of 2011. The quarter-over-quarter improvement in net revenue was primarily attributable to the continued stabilization of the division post the significant turnover experienced in the second quarter of 2012. The division experienced approximately 60 personnel departures since April 2012 (including 25 in the current quarter), which were replaced by the hiring of approximately 40 professionals during this timeframe. Headcount stood at approximately 60 professionals at September 30, 2012, and the division is now substantially rebuilt. Revenues for the current quarter (and to a greater extent, the second quarter of 2012) were adversely affected as a result of the turnover as it generally takes time for new hires to ramp up to full productivity. The revenue improvement compared to the second quarter of 2012 is a reflection of this trend. Net interest income declined approximately $2.5 million compared to the second quarter of 2012 and $7.6 million compared to the third quarter of 2011, due primarily to lower average inventory levels. Revenues for the quarter ended September 30, 2012 and the second quarter of 2012 included approximately $0.7 million and $1.5 million of other revenue, related to the clawback of certain stock-based compensation grants of former employees which were subject to non-competition and/or other forfeiture provisions.
Net revenues of $34.6 million for the nine months ended September 30, 2012, declined by $54.6 million compared to the prior-year period. This was largely attributable to non-agency asset-backed securities gains of approximately $34.8 million in the prior-year period, coupled with the significant turnover in 2012 described above, as well as lower net interest income.
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Credit Products
Net revenues were $18.8 million for the quarter ended September 30, 2012, an improvement of $0.9 million compared to the second quarter of 2012 and $3.1 million compared to the third quarter of 2011. This improvement was primarily due to higher commissions and principal transaction revenues due to higher volumes, including an expanded product profile when compared to the third quarter of 2011. The increase in volumes over the third quarter of 2011 was partially offset by lower spreads.
Net revenues of $58.4 million for the nine months ended September 30, 2012 improved by $7.4 million compared to the prior-year period, consistent with the results experienced during the current and prior-year quarters.
ClearPoint
Net revenues were $12.9 million for the quarter ended September 30, 2012, an improvement of $1.6 million compared to the second quarter of 2012 on marginally higher volumes, and relatively flat compared to the third quarter of 2011. Net revenues reflect limits placed on ClearPoint’s daily average loan commitments to a level aligned with its distribution capabilities.
Net revenues for the nine months ended September 30, 2012 were $39.8 million, an improvement of $13.7 million compared to the prior-year period. This increase was due to higher daily loan commitments primarily arising in the first quarter of 2012, prior to the implementation of the previously mentioned limits, coupled with lower daily average loan commitments in the prior-year period, as the division’s operations had commenced on January 3, 2011.
The division reported a pre-tax loss of $0.5 million for the quarter ended September 30, 2012. The pre-tax loss represented a $2.0 million improvement over the second quarter of 2012, primarily due to the higher revenues, coupled with a rightsizing plan implemented in the second quarter to better align origination with distribution capabilities.
The Company has announced that it is pursuing a sale of this business. See “ClearPoint Recent Developments” below for additional information.
Other
Net revenues were $1.2 million for the quarter ended September 30, 2012, relatively flat compared to the second quarter of 2012 and a decline of $3.7 million compared to the third quarter of 2011. The reduction in net revenues when compared to the third quarter of 2011 was primarily due to the changes in value of the Company’s FATV investment.
5
Consolidated Compensation and Benefits Expenses (including Non-GAAP results)
Compensation and benefits expense was $25.5 million ($26.9 million on a non-GAAP basis) for the third quarter of 2012, a decline of $7.1 million ($5.8 million on a non-GAAP basis) compared to compensation and benefits expense in the second quarter of 2012, and a decline of $7.2 million ($3.9 million on a non-GAAP basis) compared to compensation and benefits expense in the third quarter of 2011.
Compensation and benefits expense as a percentage of net revenues was 58.9% (62.0% on a non-GAAP basis) for the third quarter of 2012, compared to 73.0% for the second quarter of 2012 and 60.3% (56.8% on a non-GAAP basis) for the third quarter of 2011. The improvement in the Company’s non-GAAP compensation as a percentage of net revenue when compared to the second quarter of 2012 was primarily a result of the improved performance of the MBS & Rates division and reduced compensation expense in ClearPoint resulting from the rightsizing plan implemented in the second quarter. The non-GAAP compensation to revenue ratio for the prior-year quarter included approximately $5.6 million of compensation reductions. These reductions, which were previously disclosed, included $3.8 million of reduced cash compensation accruals under the expectation that annual compensation for leaders of the Company’s business segments and members of senior management would be more heavily weighted toward stock-based compensation. In addition, compensation expense in the prior-year quarter decreased by approximately $1.8 million due to changes in the vesting and forfeiture provisions of stock-based compensation to be granted in connection with annual bonus compensation of the prior year. The changes resulted in compensation expense being recognized over a future vesting period, which was initially being fully recognized in that current year.
The Company’s compensation and benefits as a percentage of net revenues was 66.7% (66.5% on a non-GAAP basis) for the nine months ended September 30, 2012, compared to 64.6% (63.5% on a non-GAAP basis) for the prior-year period.
Consolidated Non-Compensation Expenses (including Non-GAAP results)
Non-compensation expenses were $22.8 million for the third quarter of 2012 ($21.5 million on a non-GAAP basis), compared to $43.8 million for the second quarter of 2012 ($21.7 million on a non-GAAP basis) and $100.3 million for the third quarter of 2011 ($19.4 million on a non-GAAP basis). Included within non-compensation expenses are ClearPoint broker fees and loan processing fees of $9.4 million, $8.1 million and $8.2 million for the third quarter of 2012, second quarter of 2012 and third quarter of 2011, respectively, driven by the level of ClearPoint loan commitment volumes in each respective period.
Excluded from non-GAAP non-compensation expenses are legal, consulting and advisory fees incurred in connection with our strategic alternatives process of $1.3 million and $1.0 million for the third quarter and second quarter of 2012, respectively. In addition, goodwill and intangible asset impairment charges of $21.1 million for the second quarter of 2012 and $80.2 million for the third quarter of 2011 (and certain other costs of $0.6 million in connection with the Investment Banking realignment in the prior-year quarter) are also excluded.
6
Provision for Income Taxes
Third Quarter 2012
The Company’s effective income tax rate from continuing operations for the three months ended September 30, 2012 was 44.2%, resulting in an income tax benefit of approximately $2.2 million. The income tax benefit is primarily attributable to a $2.2 million increase in the net value of the deferred tax asset. Such increase is due to the Company’s ability to carry-back realizable net operating losses to prior years.
Nine Months Ended 2012
The Company’s effective income tax rate from continuing operations for the nine months ended September 30, 2012 was negative 62.5%, resulting in income tax expense of approximately $26.3 million. The abnormal tax rate differs from the federal statutory tax rate of 35% primarily due to the establishment of a valuation allowance against substantially all of the Company’s deferred tax assets (negative 75%) in the second quarter of 2012, as well as the non-deductible discrete item attributable to the write-off of goodwill (negative 20%) and tax expense associated with stock-based compensation shortfalls (negative 8%).
Discontinued Operations
The Company has classified the results of its Equities segment as discontinued operations due to the Company’s decision to exit this business on August 22, 2011. Results of these discontinued operations are presented in the following table:
| | Three Months Ended | | Nine Months Ended | |
(In thousands) | | September
2012 | | June
2012 | | September
2011* | | September
2012 | | September
2011* | |
| | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | |
| | | | | | | | | | | |
Net revenues | | $ | 11 | | $ | 6 | | $ | 2,595 | | $ | 54 | | $ | 12,794 | |
Total expenses (excluding interest) | | (22 | ) | (31 | ) | 11,395 | | (125 | ) | 38,802 | |
Income/(loss) from discontinued operations before income taxes | | 33 | | 37 | | (8,800 | ) | 179 | | (26,008 | ) |
Provisions for income taxes | | — | | 60 | | (3,443 | ) | 138 | | (7,583 | ) |
Income/(loss) from discontinued operations, net of taxes | | $ | 33 | | $ | (23 | ) | $ | (5,357 | ) | $ | 41 | | $ | (18,425 | ) |
* Included within the table above for the three and nine months ended June 30, 2011 is a goodwill and intangible impairment charge of approximately $14.3 million.
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ClearPoint Recent Developments
The Company acquired ClearPoint on January 3, 2011 with the intent to add an element of competitive differentiation for the Company’s MBS Business. That differentiation was to have been achieved by offering customers of the Company’s MBS Business, institutional investors, the ability to purchase mortgage backed securities backed by loans that conformed to customized specified pool characteristics. ClearPoint intended to originate loans according to customers’ desired specifications, deliver those loans to a Government Sponsored Enterprise (GSE, or FNMA, FHLMC, or GNMA) in exchange for a security backed by those loans, and sell that security to the Company’s MBS unit — for onward sale to the MBS unit’s customers. The strategy required ClearPoint to have GSE seller servicer approvals, the application for which required the development of adequate infrastructure, and sustained profitability in the ClearPoint subsidiary as a standalone business unit.
ClearPoint is a “wholesale third party originator” of conforming residential loans. The original business strategy included three options for the sale of loans that ClearPoint originates, namely: 1. sell to “aggregators” (who may retain the loans for their balance sheets, or deliver them to a “GSE window”); 2. sell to a GSE “window” for cash; 3. sell to a GSE window and receive a GSE security in return — for onward sale, as described above, through the Company or other broker dealers, to MBS buyers. Since inception, without GSE approvals, ClearPoint has been forced to sell all the loans it originates to aggregators.
Since implementing our mortgage origination strategy, beginning with the acquisition of ClearPoint, market dynamics have changed dramatically. As the effects of the mortgage crisis have rippled through the market, representation and warranty risk remains an intense focus. Moreover, as mentioned above, without GSE approvals, ClearPoint is confined to selling loans to a limited universe of aggregators, thus providing no benefit to the Company’s MBS customers. These factors have led the Company to conclude that the commercial prospects for its mortgage origination activity have greatly diminished. The Company has decided it will therefore pursue a sale of the ClearPoint business.
The Company currently estimates incurring a range of loss of between approximately $1.5 million to $6.0 million in connection with any disposition of this business. Amounts reflected within this estimate include the Company’s remaining payment obligations to the former stockholder of ClearPoint associated with the ClearPoint acquisition on January 3, 2011, the write-off of certain assets, including intangible assets, and the termination of certain other contractual obligations. This currently estimated range of loss assumes that ClearPoint’s funded and locked loans are ultimately sold at par. The Company ultimately would expect to recapture a substantial portion of the approximately $30 million of cash currently held in the ClearPoint business.
8
Non-GAAP Financial Results
The Company has included in this press release certain financial metrics that were not prepared in accordance with accounting principles generally accepted in the United States. These non-GAAP financial results, which include presentations of net revenues, compensation and benefits, non-compensation expenses, income before income taxes from continuing operations, provision for income taxes, net income from continuing operations, compensation expense ratios, pre-tax margin, return on average tangible equity and diluted earnings per share, are presented as an additional aid in understanding and analyzing the Company’s financial results for the quarters ended September 30, 2012, June 30, 2012, and September 30, 2011 and the nine months ended September 30, 2012 and 2011. Specifically, the Company believes that the non-GAAP results provide useful information by excluding certain items that may not be indicative of the Company’s core operating results or business outlook and also to emphasize information that is critical to understanding the Company’s performance. These non-GAAP amounts exclude items reflected as adjustments within the “Reconciliation of GAAP to Non-GAAP (Loss)/Income from Continuing Operations” table below. The Company believes these non-GAAP results will allow for a better evaluation of the operating performance of the Company’s business and facilitate a meaningful comparison of the Company’s results in the current period to those in prior periods and future periods. References to these non-GAAP results should not be considered a substitute for results that are presented in a manner consistent with GAAP.
A limitation of utilizing these non-GAAP financial results is that the GAAP accounting effects of these excluded items do in fact reflect the underlying financial results of the Company’s business, and these effects should not be ignored in evaluating and analyzing its financial results. Therefore, the Company believes that non-GAAP results should always be considered together with their corresponding GAAP results.
9
Reconciliation of GAAP to Non-GAAP (Loss)/Income from Continuing Operations
| | Three Months Ended September 30, 2012 | | Three Months Ended September 30, 2011 | |
| | | | (Unaudited) | | | | | | (Unaudited) | | | |
| | | | | | | | | | | | | |
(Dollars in thousands, except per share amounts) | | GAAP | | Adjustments | | Non-GAAP | | GAAP | | Adjustments | | Non-GAAP | |
| | | | | | | | | | | | | |
Net revenues: | | $ | 43,330 | | $ | — | | $ | 43,330 | | $ | 54,164 | | $ | — | | $ | 54,164 | |
| | | | | | | | | | | | | |
Expenses (excluding interest): | | | | | | | | | | | | | |
Compensation and benefits | | 25,534 | | 1,320 | (1) | 26,854 | | 32,684 | | (1,946 | )(2) | 30,738 | |
Non-compensation expenses | | 22,820 | | (1,285 | )(3) | 21,535 | | 100,265 | | (80,842 | )(4) | 19,423 | |
Total expenses (excluding interest) | | 48,354 | | 35 | | 48,389 | | 132,949 | | (82,788 | ) | 50,161 | |
| | | | | | | | | | | | | |
(Loss)/income from continuing operations before income taxes | | (5,024 | ) | (35 | ) | (5,059 | ) | (78,785 | ) | 82,788 | | 4,003 | |
Provision for income taxes | | (2,223 | ) | (15 | )(5) | (2,238 | ) | (3,085 | ) | 4,911 | (6) | 1,826 | |
Net (loss)/income from continuing operations | | $ | (2,801 | ) | $ | (20 | ) | $ | (2,821 | ) | $ | (75,700 | ) | $ | 77,877 | | $ | 2,177 | |
| | | | | | | | | | | | | |
Earnings per share: | | | | | | | | | | | | | |
Diluted - continuing operations | | $ | (0.02 | ) | | | $ | (0.02 | )(7) | $ | (0.61 | ) | | | $ | 0.02 | (7) |
As a percentage of net revenues: | | | | | | | | | | | | | |
Compensation and benefits | | 58.9 | % | | | 62.0 | % | 60.3 | % | | | 56.8 | % |
(Loss)/income from continuing operations before income taxes | | (11.6 | )% | | | (11.7 | )% | (145.5 | )% | | | 7.4 | % |
(1) Represents the reversal of previously accrued severance expense (of which $1.0 million is non-cash stock-based compensation).
(2) Represents severance and stock-based compensation expense related to the investment banking realignment which resulted in the termination of 32 investment banking employees and certain administrative positions.
(3) Represents legal, consulting and advisory fees incurred in connection with our strategic alternatives process.
(4) Includes goodwill and intangible impairment charges of $80.2 million and other non-compensation expenses of $0.6 million as a result of the Investment Banking realignment.
(5) The statutory income tax rate of 43.6% differs from the federal statutory rate of 35% due to state and local taxes.
(6) The effective income tax rate of 5.9% differs from the federal statutory rate of 35% primarily due to non-tax deductible goodwill and state and local taxes.
(7) Non-GAAP net (loss)/income divided by 118.7 million and 129.6 million dilutive shares as of September 30, 2012 and 2011, respectively.
10
Reconciliation of GAAP to Non-GAAP (Loss)/Income from Continuing Operations (Continued)
| | Three Months Ended September 30, 2012 | | Three Months Ended June 30, 2012 | |
| | (Unaudited) | | (Unaudited) | |
| | | | | | | | | | | | | |
(Dollars in thousands, except per share amounts) | | GAAP | | Adjustments | | Non-GAAP | | GAAP | | Adjustments | | Non-GAAP | |
| | | | | | | | | | | | | |
Net revenues: | | $ | 43,330 | | $ | — | | $ | 43,330 | | $ | 44,647 | | $ | — | | $ | 44,647 | |
| | | | | | | | | | | | | |
Expenses (excluding interest): | | | | | | | | | | | | | |
Compensation and benefits | | 25,534 | | 1,320 | (1) | 26,854 | | 32,606 | | — | | 32,606 | |
Non-compensation expenses | | 22,820 | | (1,285 | )(2) | 21,535 | | 43,792 | | (22,096 | )(3) | 21,696 | |
Total expenses (excluding interest) | | 48,354 | | 35 | | 48,389 | | 76,398 | | (22,096 | ) | 54,302 | |
| | | | | | | | | | | | | |
Loss from continuing operations before income taxes | | (5,024 | ) | (35 | ) | (5,059 | ) | (31,751 | ) | 22,096 | | (9,655 | ) |
Provision for income taxes | | (2,223 | ) | (15 | )(4) | (2,238 | ) | 29,058 | | (31,636 | )(5) | (2,578 | ) |
Net loss from continuing operations | | $ | (2,801 | ) | $ | (20 | ) | $ | (2,821 | ) | $ | (60,809 | ) | $ | 53,732 | | $ | (7,077 | ) |
| | | | | | | | | | | | | |
Earnings per share: | | | | | | | | | | | | | |
Diluted - continuing operations | | $(0.02 | ) | | | $(0.02 | )(6) | $(0.51 | ) | | | $(0.06 | )(6) |
As a percentage of net revenues: | | | | | | | | | | | | | |
Compensation and benefits | | 58.9 | % | | | 62.0 | % | 73.0 | % | | | 73.0 | % |
Loss from continuing operations before income taxes | | (11.6 | )% | | | (11.7 | )% | (71.1 | )% | | | (21.6 | )% |
(1) Represents the reversal of previously accrued severance expense (of which $1.0 million is non-cash stock-based compensation).
(2) Represents legal, consulting and advisory fees incurred in connection with our strategic alternatives process.
(3) Represents the goodwill impairment charge recognized during the three months ended June 30, 2012 of $21.1 million and legal, consulting and advisory fees incurred in connection with our strategic alternatives process of $1.0 million.
(4) The statutory income tax rate of 43.6% differs from the federal statutory rate of 35% due to state and local taxes
(5) Adjustment to remove the effects of the valuation of the Company’s deferred tax assets (note: the goodwill impairment charge is non-deductible for tax purposes).
(6) Non-GAAP net loss from continuing operations divided by 118.7 million and 119.6 million dilutive shares for the three months ended September 30, 2012 and June 30, 2012, respectively.
11
Reconciliation of GAAP to Non-GAAP (Loss)/Income from Continuing Operations (Continued)
| | Nine Months Ended September 30, 2012 | | Nine Months Ended September 30, 2011 | |
| | (Unaudited) | | (Unaudited) | |
(Dollars in thousands, except per share amounts) | | GAAP | | Adjustments | | Non-GAAP | | GAAP | | Adjustments | | Non-GAAP | |
| | | | | | | | | | | | | |
Net revenues: | | $ | 152,718 | | $ | — | | $ | 152,718 | | $ | 199,932 | | $ | (2,330 | )(1) | $ | 197,602 | |
| | | | | | | | | | | | | |
Expenses (excluding interest): | | | | | | | | | | | | | |
Compensation and benefits | | 101,859 | | (330 | )(2) | 101,529 | | 129,058 | | (3,632 | )(3) | 125,426 | |
Non-compensation expenses | | 92,916 | | (23,381 | )(4) | 69,535 | | 132,514 | | (80,842 | )(5) | 51,672 | |
Total expenses (excluding interest) | | 194,775 | | (23,711 | ) | 171,064 | | 261,572 | | (84,474 | ) | 177,098 | |
| | | | | | | | | | | | | |
(Loss)/income from continuing operations before income taxes | | (42,057 | ) | 23,711 | | (18,346 | ) | (61,640 | ) | 82,144 | | 20,504 | |
Provision for income taxes | | 26,269 | | (30,934 | )(6) | (4,665 | ) | 4,208 | | 5,928 | (7) | 10,136 | |
Net (loss)/income from continuing operations | | $ | (68,326 | ) | $ | 54,645 | | $ | (13,681 | ) | $ | (65,848 | ) | $ | 76,216 | | $ | 10,368 | |
| | | | | | | | | | | | | |
Earnings per share: | | | | | | | | | | | | | |
Diluted - continuing operations | | $ | (0.57 | ) | | | $ | (0.11 | )(8) | $ | (0.53 | ) | | | $ | 0.08 | (8) |
As a percentage of net revenues: | | | | | | | | | | | | | |
Compensation and benefits | | 66.7 | % | | | 66.5 | % | 64.6 | % | | | 63.5 | % |
(Loss)/income from continuing operations before income taxes | | (27.5 | )% | | | (12.0 | )% | (30.8 | )% | | | 10.4 | % |
(1) Represents the bargain purchase gain related to the ClearPoint acquisition on January 3, 2011.
(2) Represents severance expense recognized during the first quarter of 2012.
(3) Includes (i) severance and stock-based compensation expense of $1.9 million, related to the investment banking realignment which resulted in the termination of 32 investment banking employees and certain administrative positions and (ii) $1.7 million due to the resignation of the former interim CEO in the second quarter of 2011.
(4) Represents the goodwill impairment charge recognized during the second quarter of 2012 of $21.1 million, as well as $2.3 million of legal, consulting and advisory fees incurred in connection with our strategic alternatives process.
(5) Includes goodwill and intangible impairment charges of $80.2 million and other non-compensation expenses of $0.6 million as a result of the investment banking realignment.
(6) Represents legal, consulting and advisory expenses incurred in connection with our strategic alternatives process of $2.3 million, plus the compensation and benefits adjustment of $0.3 million multiplied by the Company’s statutory tax rate of 43.6%, plus the removal of the effects of the valuation allowance on the Company’s deferred tax assets recorded during the second quarter of 2012 (note: the goodwill impairment charge is non-deductible for tax).
(7) The effective income tax rate of 7.2% differs from the federal statutory rate of 35% primarily due to non-tax deductible goodwill, the non-taxable bargain purchase gain and state and local taxes.
(8) Non-GAAP net (loss)/income from continuing operations divided by 119.0 million and 130.0 million dilutive shares for the nine months ended September 30, 2012 and 2011, respectively.
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Reconciliation of GAAP to Non-GAAP Pre-Tax (Loss)/Income from Continuing Operations – by Segment
Three Months Ended September 30, 2012 |
Credit Products | | Other |
(In thousands) | | | | (in thousands) | | | |
| | | | | | | |
Revenues – GAAP | | $ | 18,804 | | Revenues – GAAP | | $ | 1,185 | |
| | | | | | | |
Expenses – GAAP | | 14,865 | | Expenses – GAAP | | 11,181 | |
| | | | | | | |
Adjustments | | 1,320 | (1) | Adjustments | | (1,285 | )(2) |
| | | | | | | |
Expenses – non GAAP | | 16,185 | | Expenses – non GAAP | | 9,896 | |
| | | | | | | |
Pre-tax income from continuing operations – non GAAP | | $ | 2,619 | | Pre-tax loss from continuing operations – non GAAP | | $ | (8,711 | ) |
Three Months Ended June 30, 2012 | | | |
Other | | | |
(In thousands) | | | | | | | | |
| | | | | | | | |
Revenues – GAAP | | $ | 1,447 | | | | | | | |
| | | | | | | | |
Expenses – GAAP | | 32,420 | | | | | | |
| | | | | | | | |
Adjustments | | (22,096 | )(3) | | | | | |
| | | | | | | | |
Expenses – non GAAP | | 10,324 | | | | | | |
| | | | | | | | |
Pre-tax loss from continuing operations – non GAAP | | $ | (8,877 | ) | | | | | | |
(1) Represents the reversal of previously accrued severance expense (of which $1.0 million is non-cash stock-based compensation).
(2) Represents legal, consulting and advisory fees incurred in connection with our strategic alternatives process.
(3) Represents the goodwill impairment charge recognized during the three months ended June 30, 2012.
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Reconciliation of GAAP to Non-GAAP Pre-Tax (Loss)/Income from Continuing Operations – by Segment (Continued)
Three Months Ended September 30, 2011 |
Investment Banking | | | Other |
(In thousands) | | | | | (in thousands) | | | |
| | | | | | | | |
Revenues – GAAP | | $ | 7,075 | | | Revenues – GAAP | | $ | 4,911 | |
| | | | | | | | |
Expenses – GAAP | | 8,527 | | | Expenses – GAAP | | 89,651 | |
| | | | | | | | |
Adjustments | | (2,294 | )(1) | | Adjustments | | (80,494 | )(2) |
| | | | | | | | |
Expenses – non GAAP | | 6,233 | | | Expenses – non GAAP | | (9,157 | ) |
| | | | | | | | |
Pre-tax income from continuing operations – non GAAP | | $ | 842 | | | Pre-tax loss from continuing operations – non GAAP | | $ | (4,246 | ) |
(1) Represents (i) severance and stock-based compensation expense of $1.9 million related to the investment banking realignment which resulted in the termination of 32 investment banking employees and certain administrative positions and also includes (ii) other non-compensation expenses of $0.4 million as a result of the investment banking realignment.
(2) Includes (i) goodwill and intangible impairment charges of $80.2 million related to the investment banking realignment and (iii) other non-compensation expenses of $0.2 million in connection with the company-wide strategic review conducted in the third quarter of 2011.
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Reconciliation of GAAP to Non-GAAP Pre-Tax (Loss)/Income from Continuing Operations — by Segment (Continued)
Nine Months Ended September 30, 2012 |
Credit Products | | | Other |
(In thousands) | | | | | (In thousands) | | | |
| | | | | | | | |
Revenues – GAAP | | $ | 58,393 | | | Revenues – GAAP | | $ | 5,247 | |
| | | | | | | | |
Expenses – GAAP | | 53,857 | | | Expenses – GAAP | | 54,035 | |
| | | | | | | | |
Adjustments | | (330 | )(1) | | Adjustments | | (23,381 | )(2) |
| | | | | | | | |
Expenses – non GAAP | | 53,527 | | | Expenses – non GAAP | | 30,654 | |
| | | | | | | | |
Pre-tax income from continuing operations – non GAAP | | $ | 4,866 | | | Pre-tax loss from continuing operations – non GAAP | | $ | (25,407 | ) |
Nine Months Ended September 30, 2011 |
Investment Banking | | | Other |
(In thousands) | | | | | (In thousands) | | | |
| | | | | | | | |
Revenues – GAAP | | $ | 23,674 | | | Revenues – GAAP | | $ | 9,922 | |
| | | | | | | | |
Adjustments | | — | | | Adjustments | | (2,330 | )(3) |
| | | | | | | | |
Revenues – non GAAP | | 23,674 | | | Revenues – non GAAP | | 7,592 | |
| | | | | | | | |
Expenses – GAAP | | 20,135 | | | Expenses – GAAP | | 108,187 | |
| | | | | | | | |
Adjustments | | (2,294 | )(4) | | Adjustments | | (82,180 | )(5) |
| | | | | | | | |
Expenses – non GAAP | | 17,841 | | | Expenses – non GAAP | | (26,007) | |
| | | | | | | | |
Pre-tax loss from continuing operations – non GAAP | | $ | 5,833 | | | Pre-tax loss from continuing operations – non GAAP | | $ | (18,415) | |
(1) Represents severance expense recognized during the first quarter of 2012.
(2) Represents the goodwill impairment charge recognized during the three months ended June 30, 2012 of $21.1 million, as well as $2.3 million of legal, consulting and advisory fees incurred in connection with our strategic alternatives process.
(3) Represents the bargain purchase gain related to the ClearPoint acquisition on January 3, 2011.
(4) Represents (i) severance and stock-based compensation expense of $1.9 million related to the investment banking realignment which resulted in the termination of 32 investment banking employees and certain administrative positions and also includes (ii) other non-compensation expenses of $0.4 million as a result of the investment banking realignment.
(5) Includes (i) goodwill and intangible impairment charges of $80.2 million related to the investment banking realignment (ii) $1.7 million due to the resignation of the former interim CEO in the second quarter of 2011 and (iii) other non-compensation expenses of $0.2 million in connection with the company-wide strategic review conducted in the third quarter of 2011.
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Return on Tangible Equity — Annualized (Non-GAAP)
Presented below is information on the Company’s annualized return on average tangible stockholders’ equity (Non-GAAP):
| | Three Months Ended | | Nine Months Ended | |
(Dollars in thousands) | | September
2012 | | June
2012 | | September
2011 | | September
2012 | | September
2011 | |
| | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | |
| | | | | | | | | | | |
Net (loss)/income from continuing operations (non-GAAP) | | $ | (2,821 | )(1) | $ | (7,077 | )(1) | $ | 2,177 | (1) | $ | (13,681 | )(1) | $ | 10,368 | (1) |
Plus: Amortization of intangibles, net of tax | | 71 | | 70 | | 255 | | 211 | | 1,126 | |
Net (loss)/income from continuing operations, adjusted (non-GAAP) | | (2,750 | ) | (7,007 | ) | 2,432 | | (13,470 | ) | 11,494 | |
Net (loss)/income from continuing operations, adjusted (non-GAAP) – annualized | | $ | (11,000 | ) | $ | (28,028 | ) | $ | 9,728 | | $ | (17,960 | ) | $ | 15,325 | |
| | | | | | | | | | | |
Average total stockholders’ equity (GAAP) | | $ | 190,333 | | $ | 224,150 | | $ | 304,642 | | $ | 223,947 | | $ | 328,110 | |
Less: Average intangible assets | | (4,002 | ) | (14,674 | ) | (63,660 | ) | (14,674 | ) | (92,462 | ) |
Average tangible stockholders’ equity (non-GAAP) | | $ | 186,331 | | $ | 209,476 | | $ | 240,982 | | $ | 209,273 | | $ | 235,648 | |
Annualized return on tangible equity (non-GAAP) | | (5.9 | )% | (13.4 | )% | 4.0 | % | (8.6 | )% | 6.5 | % |
Return on Average Stockholders’ Equity - Annualized (GAAP)
Presented below is information on the Company’s annualized return on average stockholders’ equity, which is the most directly comparable GAAP metric to the Non-GAAP metric above:
| | Three Months Ended | | Nine Months Ended | |
| | September | | June | | September | | September | | September | |
(Dollars in thousands) | | 2012 | | 2012 | | 2011 | | 2012 | | 2011 | |
| | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | |
| | | | | | | | | | | |
Net loss from continuing operations | | $ | (2,801 | ) | $ | (60,809 | ) | $ | (75,700 | ) | $ | (68,326 | ) | $ | (65,848 | ) |
Net loss from continuing operations – annualized | | $ | (11,204 | ) | $ | NM | (2) | $ | NM | (2) | $ | NM | (2) | $ | NM) | (2) |
| | | | | | | | | | | |
Average total stockholders’ equity | | $ | 190,333 | | $ | 224,150 | | $ | 304,642 | | $ | 223,947 | | $ | 328,110 | |
Annualized return on stockholders’ equity | | (5.9 | )% | NM | (2) | NM | (2) | NM | (2) | NM | (2) |
(1) Designates non-GAAP financial results. A reconciliation of the Company’s GAAP results to non-GAAP financial results is set forth above under the caption “Reconciliation of GAAP to Non-GAAP Income from Continuing Operations.”
(2) Not meaningful
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Summary Results of Operations
| | Three Months Ended | | Nine Months Ended | |
| | September | | June | | September | | September | | September | |
(In thousands, except for per share amounts) | | 2012 | | 2012 | | 2011 | | 2012 | | 2011 | |
| | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | |
Revenues: | | | | | | | | | | | |
Principal transactions | | $ | 15,652 | | $ | 7,891 | | $ | 9,791 | (1) | $ | 44,863 | | $ | 71,593 | (1) |
Commissions | | 17,830 | | 16,197 | | 15,968 | (1) | 53,178 | | 50,766 | (1) |
Investment banking | | 1,996 | | 9,115 | | 9,359 | | 17,788 | | 29,723 | |
Investment gains/(losses), net | | 163 | | (139 | ) | 2,857 | | 156 | | 2,539 | |
Interest income | | 6,879 | | 11,558 | | 16,249 | | 37,632 | | 46,201 | |
Gain from bargain purchase - ClearPoint Funding, Inc. acquisition | | — | | — | | — | | — | | 2,330 | |
Fees and other | | 2,959 | | 3,527 | | 2,612 | | 9,362 | | 5,075 | |
Total revenues | | 45,479 | | 48,149 | | 56,836 | | 162,979 | | 208,227 | |
Interest expense | | 2,149 | | 3,502 | | 2,672 | | 10,261 | | 8,295 | |
Net revenues | | 43,330 | | 44,647 | | 54,164 | | 152,718 | | 199,932 | |
Non-interest expenses | | | | | | | | | | | |
Compensation and benefits | | 25,534 | | 32,606 | | 32,684 | | 101,859 | | 129,058 | |
Impairment of goodwill and intangible assets | | — | | 21,096 | | 80,244 | | 21,096 | | 80,244 | |
Clearing, settlement and brokerage | | 9,461 | | 8,695 | | 8,946 | | 31,152 | | 19,017 | |
Professional fees | | 4,282 | | 4,595 | | 1,944 | | 12,827 | | 6,229 | |
Communications and data processing | | 3,224 | | 3,160 | | 3,614 | | 9,699 | | 10,108 | |
Occupancy, depreciation and amortization | | 2,277 | | 2,236 | | 2,041 | | 6,647 | | 6,112 | |
Business development | | 823 | | 981 | | 1,139 | | 2,822 | | 3,483 | |
Other | | 2,753 | | 3,029 | | 2,337 | | 8,673 | | 7,321 | |
Total non-interest expenses | | 48,354 | | 76,398 | | 132,949 | | 194,775 | | 261,572 | |
Loss from continuing operations before income taxes and discontinued operations | | (5,024 | ) | (31,751 | ) | (78,785 | ) | (42,057 | ) | (61,640 | ) |
Income tax (benefit)/expense | | (2,223 | ) | 29,058 | | (3,085 | ) | 26,269 | | 4,208 | |
Loss from continuing operations | | (2,801 | ) | (60,809 | ) | (75,700 | ) | (68,326 | ) | (65,848 | ) |
Income/(loss) from discontinued operations, net of taxes | | 33 | | (23 | ) | (5,357 | ) | 41 | | (18,425 | ) |
Net loss | | $ | (2,768 | ) | $ | (60,832 | ) | $ | (81,057 | ) | $ | (68,285 | ) | $ | (84,273 | ) |
| | | | | | | | | | | |
Earnings per share: | | | | | | | | | | | |
Basic loss per share | | | | | | | | | | | |
Continuing operations | | $ | (0.02 | ) | $ | (0.51 | ) | $ | (0.61 | ) | $ | (0.57 | ) | $ | (0.53 | ) |
Discontinued operations | | — | | — | | (0.04 | ) | — | | (0.15 | ) |
Net loss per share | | $ | (0.02 | ) | $ | (0.51 | ) | $ | (0.65 | ) | $ | (0.57 | ) | $ | (0.68 | ) |
| | | | | | | | | | | |
Diluted loss per share | | | | | | | | | | | |
Continuing operations | | $ | (0.02 | ) | $ | (0.51 | ) | $ | (0.61 | ) | $ | (0.57 | ) | $ | (0.53 | ) |
Discontinued operations | | — | | — | | (0.04 | ) | — | | (0.15 | ) |
Net loss per share | | $ | (0.02 | ) | $ | (0.51 | ) | $ | (0.65 | ) | $ | (0.57 | ) | $ | (0.68 | ) |
| | | | | | | | | | | |
Weighted average number of shares of common stock: | | | | | | | | | | | |
Basic | | 118,699 | | 119,564 | | 123,993 | | 118,969 | | 123,598 | |
Diluted | | 118,699 | | 119,564 | | 123,993 | | 118,969 | | 123,598 | |
(1) Revenues earned on a riskless principal basis in the amount of $15.7 million and $49.9 million, respectively, for the three and nine months ended September 30, 2011 have been reclassified from principal transactions to commission income in order to distinguish such revenues (commission equivalents) from revenues earned on financial instruments held in inventory.
17
Consolidated Statement of Financial Condition (Unaudited)
| | September 30, | | June 30, | | December 31, | |
(In thousands, except for share and per share amounts) | | 2012 | | 2012 | | 2011 | |
Assets: | | | | | | | |
Cash and cash equivalents | | $ | 28,482 | | $ | 52,733 | | $ | 36,672 | |
Cash and securities segregated for regulatory and other purposes | | 4,000 | | 1,150 | | 9,612 | |
Securities purchased under agreements to resell | | 132,608 | | 1,879,740 | | 1,523,227 | |
Receivables from | | | | | | | |
Brokers, dealers and clearing organizations | | 125,008 | | 31,582 | | 58,776 | |
Related parties | | 1,372 | | 1,362 | | 1,337 | |
Other | | 10,029 | | 16,218 | | 16,161 | |
Financial instruments owned, at fair value | | 1,100,731 | | 763,550 | | 1,554,660 | |
Investments | | 19,253 | | 19,090 | | 18,310 | |
Office equipment and leasehold improvements, net | | 5,726 | | 6,164 | | 6,735 | |
Goodwill | | — | | — | | 21,096 | |
Intangible assets | | 3,940 | | 4,064 | | 4,311 | |
Income taxes receivable | | 4,807 | | 4,623 | | 12,102 | |
Deferred tax assets, net | | 2,654 | | 581 | | 30,766 | |
Other assets | | 9,106 | | 9,896 | | 9,791 | |
Total Assets | | $ | 1,447,716 | | $ | 2,790,753 | | $ | 3,303,556 | |
Liabilities and Stockholders’ Equity | | | | | | | |
Liabilities | | | | | | | |
Payables to: | | | | | | | |
Brokers, dealers and clearing organizations | | $ | 791,172 | | $ | 500,882 | | $ | 1,108,664 | |
Related parties | | 594 | | 594 | | 4,939 | |
Other | | 2,804 | | 3,676 | | 3,243 | |
Securities sold under agreements to repurchase | | 103,562 | | 1,904,807 | | 1,478,081 | |
Securities sold, but not yet purchased, at fair value | | 262,274 | | 110,333 | | 184,996 | |
Secured borrowings | | 66,575 | | 46,718 | | 213,611 | |
Accrued compensation | | 17,203 | | 15,540 | | 26,274 | |
Accounts payable and accrued expenses | | 10,750 | | 11,536 | | 18,223 | |
Income taxes payable | | 3,804 | | 3,770 | | 3,979 | |
Deferred tax liabilities | | — | | — | | 1,622 | |
Subordinated debt | | 595 | | 595 | | 801 | |
Total Liabilities | | 1,259,333 | | 2,598,451 | | 3,044,433 | |
Stockholders’ Equity | | | | | | | |
Common stock ($.01 par value; authorized 200,000,000 shares) | | 1,337 | | 1,337 | | 1,337 | |
Additional paid-in capital | | 451,850 | | 452,299 | | 463,497 | |
Deferred compensation | | 124 | | 124 | | 161 | |
Accumulated deficit | | (254,172 | ) | (251,403 | ) | (185,887 | ) |
Treasury stock, at cost | | (10,756 | ) | (10,055 | ) | (19,985 | ) |
Total Stockholders’ Equity | | 188,383 | | 192,302 | | 259,123 | |
Total Liabilities and Stockholders’ Equity | | $ | 1,447,716 | | $ | 2,790,753 | | $ | 3,303,556 | |
| | | | | | | |
Common stock (in shares) | | | | | | | |
Shares issued: | | 133,769,219 | | 133,769,219 | | 133,714,786 | |
Shares outstanding: | | 124,570,033 | | 125,731,141 | | 120,883,601 | |
| | | | | | | |
Treasury stock (in shares): | | 9,199,186 | | 8,038,078 | | 12,831,185 | |
18
Conference Call Information
The Company will hold a conference call today, November 8, 2012, at 10:00 A.M. (EST). This event can be accessed on the Investor Relations portion of the Gleacher & Company website at www.gleacher.com, as well as through the Thomson StreetEvents Network. Individual investors can listen to the call at www.earnings.com, Thomson’s individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson StreetEvents (www.streetevents.com), a password protected event management site. To participate on the call, please dial 888.713.4218 (domestic) or 617.213.4870 (international), participant passcode 65297957, or request the Gleacher & Company earnings call.
Pre-registration is available at any time prior to and during the call, which provides immediate entry into the call. Pre-registration can be accessed at the following website:
www.theconferencingservice.com/prereg/key.process?key=PAJNNGB97
For those who cannot listen to the live broadcast, a recording of the call will be available for seven days following the call by dialing 888.286.8010 (domestic) or 617.801.6888 (international), participant passcode 50412602.
About Gleacher & Company
Gleacher & Company, Inc. (Nasdaq: GLCH) is an independent investment bank that provides corporate and institutional clients with strategic and financial advisory services, including merger and acquisition, restructuring, recapitalization, and strategic alternative analysis, as well as capital raising, research based investment analysis, and securities brokerage services, and, through a subsidiary, engages in residential mortgage lending. For more information, please visit www.gleacher.com.
Forward Looking Statements
This press release contains “forward-looking statements.” These statements are not historical facts but instead represent the Company’s belief or plans regarding future events, many of which are inherently uncertain and outside of the Company’s control. The Company often, but not always, identifies forward-looking statements by using words or phrases such as “anticipate,” “estimate,” “plan,” “project,” “target,” “expect,” “continuing,” “ongoing,” “believe” and “intend.” The Company’s forward-looking statements are based on facts as the Company understands them at the time the Company makes any such statement as well as estimates and judgments based on these facts. The Company’s forward-looking statements may turn out to be inaccurate for a variety of reasons, many of which are outside of its control. Factors that could render the Company’s forward-looking statements subsequently inaccurate include the conditions of the securities markets, generally, and demand for the Company’s services within those markets, the risk of further credit rating downgrades of the U.S. government by major credit rating agencies, the impact of international and domestic sovereign debt uncertainties, the possibilities of localized or global economic recession and other risks and factors identified from time to time in the Company’s filings with the Securities and Exchange Commission. Moreover, the Company’s previously announced review of strategic alternatives may not culminate in a transaction or change in its current operations, on the timelines anticipated or at all. The Company’s previously disclosed strategic plan is also being implemented, which is designed to improve its operating results, and this plan may not be successful. You are cautioned not to place undue reliance on these forward-looking statements. The Company does not undertake to update any of its forward-looking statements.
19
For Additional Information Please Contact:
Investor Contact | | Media Contact |
Gleacher & Company, Inc. | | Joele Frank, Wilkinson Brimmer Katcher |
Thomas J. Hughes | | Andrew Siegel / Nick Lamplough |
Chief Executive Officer | | 212.355.4449 |
212.273.7100 | | |
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