Exhibit 2.02
Investors Capital Holdings Reports Continued Strong Revenue Growth
LYNNFIELD, Mass.--(BUSINESS WIRE)--Feb. 22, 2007--Investors Capital
Holdings, Ltd. (AMEX: ICH) today reported revenue of $20.9 million for the
fiscal quarter ended December 31, 2006, representing a 23% increase over the
comparable year ago period. For the nine month period ended December 31, 2006
compared to the year ago period, representative-generated revenues increased by
19.6%, resulting in a 23.5% increase in average revenue per representative.
Central to this year-to-date comparative increase in
representative-generated revenue was a 30.0% increase in advisory services
revenue (which increased at an even higher 43.8% rate during the latest
quarter), particularly in the firm's A-MAP rep-directed program. Despite
competitively-inspired reductions in client fee rates, this program registered
an impressive 38.8% increase in contribution to profit margin for the current
nine month period compared to the year ago period.
"We're very pleased with the substantial increases in both our average
revenue per representative and our fee-based advisory services revenue, said
Investors Capital Holdings President, Chairman, and CEO Theodore E. Charles.
"That tells me our strategy of bringing on and catering to higher producing
representatives is working."
The Company posted a net loss of $0.32 million, or $.05 per share, for the
quarter ended December 31, 2006, compared to net income of $0.20 million, or
$.03 per share, for the comparable year ago period. The Company's operations
during the three- and nine-month periods ended December 31, 2006 would have been
profitable but for the costs related to the administrative proceedings settled
in December 2006.
Investors Capital Holdings continues to pursue its core business strategy
of driving revenue growth in high margin segments, such as investment advisory
services and trading, by recruiting and providing superior support services to
quality representatives who possess the drive and expertise to aggressively grow
their respective independent businesses.
"We look forward to continually enhancing our service offerings and
providing our reps with the type of support and technology that makes Investors
Capital a premier destination for top-producing representatives nationwide," Mr.
Charles added.
About Investors Capital Holdings:
Investors Capital Holdings (AMEX:ICH) of Lynnfield, MA is a diversified
financial services company dedicated to meeting consumer needs and exceeding
consumer expectations for superior service in today's financial markets. The
Company's business units include Investors Capital Corporation, Investors
Capital Advisory Services, Eastern Point Advisors, ICC Insurance Agency, Inc.
and Investors Capital Holdings Securities Corporation. For more information,
please call (800) 949-1422 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. AND SUBSIDIARIES
======================================================================
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2006 2005
------------ ------------
Cash and Cash Equivalents $5,613,958 $8,953,767
Current and Other Assets 9,733,436 6,361,311
Property and Equipment, net 1,276,183 716,433
------------ ------------
Total Assets $16,623,577 $16,031,511
============ ============
Current Liabilities 6,488,422 5,653,813
Total Liabilities 6,488,422 5,653,813
Total Stockholders' Equity 10,135,155 10,377,698
------------ ------------
Total Liabilities and Stockholders' Equity $16,623,577 $16,031,511
============ ============
INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
======================================================================
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Quarters Ended December
31,
2006 2005
------------ ------------
Revenue:
Commissions $17,982,588 $14,944,156
Advisory Fees 1,888,576 1,313,676
Other Fee Income 402,410 384,766
Marketing revenue 427,425 202,639
Interest, dividend and investment 212,627 159,179
------------ ------------
Total Revenue 20,913,626 17,004,416
Commission and Advisory Fee Expenses 16,498,437 13,204,912
------------ ------------
Gross Profit 4,415,189 3,799,504
Operating Expenses:
Advertising 138,302 201,912
Communications 123,922 159,127
------------ ------------
Total Selling Expenses 262,224 361,039
Compensation and benefits 2,203,390 1,537,058
Regulatory, legal and professional 1,830,647 1,137,663
Occupancy 255,928 168,328
Other administrative 286,064 270,890
------------ ------------
Total Administrative Expenses 4,576,029 3,113,939
Total Operating Expenses 4,838,253 3,474,978
Operating (Loss) income (423,064) 324,526
Total Other (Expense) Other Income (4,621) 82,321
Net (Loss) Income Before Taxes (427,685) 406,847
Net(Loss) Income $(320,929) $201,484
Basic earnings per common share $(0.05) $0.03
Diluted earnings per common share $(0.05) $0.03
Nine Months Ended
December 31,
2006 2005
------------ ------------
Revenue:
Commissions $50,730,928 $42,671,689
Advisory Fees 4,901,072 3,769,457
Other Fee Income 598,443 586,644
Marketing revenue 956,371 872,173
Interest, dividend and investment 584,902 467,934
------------ ------------
Total Revenue 57,771,716 48,367,897
Commission and Advisory Fee Expenses 46,453,981 38,495,624
------------ ------------
Gross Profit 11,317,735 9,872,273
Operating Expenses:
Advertising 639,727 626,575
Communications 324,323 460,561
------------ ------------
Total Selling Expenses 964,050 1,087,136
Compensation and benefits 6,629,987 4,656,097
Regulatory, legal and professional 3,763,689 2,486,521
Occupancy 721,436 492,310
Other administrative 774,963 699,730
------------ ------------
Total Administrative Expenses 11,890,075 8,334,658
Total Operating Expenses 12,854,125 9,421,794
Operating (Loss)Income (1,536,390) 450,479
Total Other (Expense) and Other Income (20,223) 63,470
Net (Loss) Income Before Taxes (1,556,613) 513,949
Net(Loss) income $(1,088,386) $265,873
Basic Earnings per common share $(0.18) $0.05
Diluted Earnings per common share $(0.18) $0.04
CONTACT: Investors Capital Holdings, Ltd.
Timothy B. Murphy, 781-593-8565 ext. 4726
Chief Financial Officer
tmurphy@investorscapital.com