Post by icemandios on Mar 16, 2018 13:56:57 GMT
Ladenburg Reports Fourth Quarter and Full Year 2017 Financial Results
MIAMI
Fiscal 2017 Highlights:
Revenues increased by 14.6% to record $1.27 billion
Net income of $7.7 million
EBITDA, as adjusted, increased 56.6%, to $56.0 million
Record client assets of $164.7 billion at December 31, 2017, including advisory assets under management of $72.6 billion and cash balances of $4.5 billion
Recurring revenue of 79.6% in independent advisory and brokerage services segment
Shareholders’ equity of $370.4 million at December 31, 2017
Initiated dividend on common stock
Ladenburg Thalmann Financial Services Inc. (NYSE American: LTS, LTS PrA) today announced financial results for the fourth quarter and full year ended December 31, 2017.
Dr. Phillip Frost, Chairman of Ladenburg, said, “During 2017, we saw continued strength across all of Ladenburg’s businesses, with record revenues of $1.27 billion, a 14.6% increase from the prior year. Adjusted EBITDA grew during the year by 56.6% to $56.0 million. We remain encouraged by the impact strong market conditions and higher interest rates are having on both our independent advisory and brokerage and capital markets businesses. We believe that these factors, coupled with successful recruiting efforts, position us well for success in 2018 and beyond. Ladenburg remains committed to investing in our core business to drive sustainable growth and generate strong returns.”
Richard Lampen, President and Chief Executive Officer of Ladenburg, said, “Ladenburg continues to strengthen its position as a leader in the fast growing independent advisory and brokerage business. We provide our financial advisors with the “Ladenburg Advantage” - a differentiated set of resources and services available through our affiliated companies. Through high levels of recruiting over the past two years, we have grown our nationwide network of independent financial advisors to over 4,300. The demand for the high quality independent advice, trustworthy financial planning and investment solutions our advisors provide to the mass affluent segment, together with improved market conditions, was reflected in the 19.9% growth in total client assets to a record $164.7 billion at year end 2017. The higher asset levels and strong market conditions contributed to a 20.9% increase in advisory fee revenue to $560.9 million in 2017, as advisory assets under management grew 25.6% to $72.6 billion. Our management team is focused on improving margins through increased shared services and recurring revenues, and managing all of our operating segments efficiently. We are very pleased to have initiated during 2017 a quarterly cash dividend on our common stock, reflecting our long-term commitment to delivering value for our fellow shareholders.”
For the Fourth Quarter and Full Year Ended December 31, 2017
Fourth quarter 2017 revenues were $344.0 million, a 15.8% increase from revenues of $297.1 million in the fourth quarter of 2016. Advisory fee revenue for the three months ended December 31, 2017 increased by 25.0% to $152.6 million from $122.1 million for the comparable period in 2016 due to improved market conditions and higher average advisory assets. Commissions revenue for the fourth quarter of 2017 increased by 9.3% to $141.5 million from $129.5 million for the comparable period in 2016 primarily due to increased sales of mutual fund and variable annuity products. Also, investment banking revenue for the fourth quarter of 2017 increased by 23.2% to $12.3 million from $10.0 million for the comparable period in 2016 due to improved market conditions.
Net income attributable to the Company for the fourth quarter of 2017 was $6.6 million, as compared to net income attributable to the Company of $0.6 million in the fourth quarter of 2016. Net loss available to common shareholders, after payment of preferred dividends, was $1.8 million or ($0.01) per basic and diluted common share for the fourth quarter of 2017, as compared to net loss available to common shareholders of $7.3 million or ($0.04) per basic and diluted common share in the comparable 2016 period. The fourth quarter 2017 results included $6.8 million of income tax benefit, $8.4 million of non-cash charges for depreciation, amortization and compensation, $2.3 million of amortization of retention and forgivable loans and $1.1 million of interest expense. The fourth quarter 2016 results included $2.0 million of income tax expense, $8.5 million of non-cash charges for depreciation, amortization and compensation, $1.1 million of amortization of retention and forgivable loans and $0.8 million of interest expense.
Full year 2017 revenues were $1.27 billion, a 14.6% increase from revenues of $1.11 billion for the comparable 2016 period. Net income attributable to the Company for fiscal 2017 was $7.7 million, as compared to net loss attributable to the Company of $22.3 million in the comparable 2016 period. Net loss available to common shareholders, after payment of preferred dividends, was $24.8 million or $(0.13) per basic and diluted common share in 2017, as compared to net loss available to common shareholders, after payment of preferred dividends, of $52.7 million or $(0.29) in the comparable 2016 period. The 2017 results included approximately $6.5 million of income tax benefit, $34.4 million of non-cash charges for depreciation, amortization and compensation, $7.4 million of amortization of retention and forgivable loans and $2.7 million of interest expense. The comparable 2016 results included approximately $10.0 million of income tax expense, $33.6 million of non-cash charges for depreciation, amortization and compensation, $5.5 million of amortization of retention and forgivable loans and $4.3 million of interest expense.
Recurring Revenues
For the full year ended December 31, 2017, recurring revenues, which consist of advisory fees, trailing commissions, cash sweep revenues and certain other fees, represented approximately 79.6% of revenues from the Company’s independent advisory and brokerage services segment. Recurring revenues for this business were approximately 76.7% for the full year 2016.
EBITDA, as adjusted
EBITDA, as adjusted, for the fourth quarter of 2017 was $18.7 million, an increase of 27.8% from $14.6 million in the comparable 2016 period. EBITDA, as adjusted, for the full year 2017 was $56.0 million, an increase of 56.6% from $35.8 million for the prior-year period. Attached hereto as Table 2 is a reconciliation of net income (loss) attributable to the Company as reported (see “Non-GAAP Financial Measures” below) to EBITDA, as adjusted. The increase in EBITDA, as adjusted, for the full year 2017 was primarily attributable to increases in our Ladenburg segment as a result of higher investment banking revenues, increased revenue from our cash sweep programs and higher advisory revenues in our independent advisory and brokerage services segment.
Client Assets
At December 31, 2017, total client assets under administration were $164.7 billion, a 19.9% increase from $137.4 billion at December 31, 2016. At December 31, 2017, client assets included cash balances of approximately $4.5 billion, including approximately $4.1 billion participating in our cash sweep programs.
Stock Repurchases
During the quarter ended December 31, 2017, Ladenburg repurchased 271,540 shares of its common stock at a cost of approximately $0.8 million, representing an average price per share of $3.10. During the period from January 1, 2017 through December 31, 2017, Ladenburg repurchased 2,088,460 shares of its common stock at a cost of approximately $5.3 million, including 1,850,215 shares repurchased under its stock repurchase program, representing an average price per share of $2.53. Since the inception of its stock repurchase program in March 2007, Ladenburg has repurchased over 26.9 million shares of its common stock at a total cost of approximately $57.1 million, including purchases outside its stock repurchase program, representing an average price per share of $2.13. As of December 31, 2017, Ladenburg has the authority to repurchase an additional 8,149,785 shares under its current repurchase plan.
Non-GAAP Financial Measures
Earnings before interest, taxes, depreciation and amortization, or EBITDA, as adjusted for acquisition-related expense, amortization of retention and forgivable loans, change in fair value of contingent consideration related to acquisitions, non-cash compensation expense, financial advisor recruiting expense and other expense, which includes loss on write-off of receivable from subtenant, excise and franchise tax expense, severance costs and compensation expense that may be paid in stock, is a key metric the Company uses in evaluating its financial performance. EBITDA, as adjusted, is considered a non-GAAP financial measure as defined by Regulation G promulgated by the SEC under the Securities Act of 1933, as amended. The Company considers EBITDA, as adjusted, important in evaluating its financial performance on a consistent basis across various periods. Due to the significance of non-cash and non-recurring items, EBITDA, as adjusted, enables the Company’s Board of Directors and management to monitor and evaluate the business on a consistent basis. The Company uses EBITDA, as adjusted, as a primary measure, among others, to analyze and evaluate financial and strategic planning decisions regarding future operating investments and potential acquisitions. The Company believes that EBITDA, as adjusted, eliminates items that are not indicative of its core operating performance, such as acquisition-related expense, amortization of retention and forgivable loans and financial advisor recruiting expenses, or do not involve a cash outlay, such as stock-related compensation, which is expected to remain a key element in our long-term incentive compensation program. EBITDA, as adjusted, should be considered in addition to, rather than as a substitute for, income (loss) before income taxes, net income (loss) and cash flows provided by (used in) operating activities.
About Ladenburg
Ladenburg Thalmann Financial Services Inc. (NYSE American: LTS, LTS PrA) is a publicly-traded diversified financial services company based in Miami, Florida. Ladenburg’s subsidiaries include industry-leading independent advisory and broker-dealer firms Securities America, Triad Advisors, Securities Service Network, Investacorp, and KMS Financial Services, as well as Premier Trust, Ladenburg Thalmann Asset Management, Highland Capital Brokerage, a leading independent life insurance brokerage company, Ladenburg Thalmann Annuity Insurance Services, a full-service annuity processing and marketing company, and Ladenburg Thalmann & Co. Inc., an investment bank which has been a member of the New York Stock Exchange for over 135 years. The company is committed to investing in the growth of its subsidiaries while respecting and maintaining their individual business identities, cultures, and leadership. For more information, please visit www.ladenburg.com.
10-K
MIAMI
Fiscal 2017 Highlights:
Revenues increased by 14.6% to record $1.27 billion
Net income of $7.7 million
EBITDA, as adjusted, increased 56.6%, to $56.0 million
Record client assets of $164.7 billion at December 31, 2017, including advisory assets under management of $72.6 billion and cash balances of $4.5 billion
Recurring revenue of 79.6% in independent advisory and brokerage services segment
Shareholders’ equity of $370.4 million at December 31, 2017
Initiated dividend on common stock
Ladenburg Thalmann Financial Services Inc. (NYSE American: LTS, LTS PrA) today announced financial results for the fourth quarter and full year ended December 31, 2017.
Dr. Phillip Frost, Chairman of Ladenburg, said, “During 2017, we saw continued strength across all of Ladenburg’s businesses, with record revenues of $1.27 billion, a 14.6% increase from the prior year. Adjusted EBITDA grew during the year by 56.6% to $56.0 million. We remain encouraged by the impact strong market conditions and higher interest rates are having on both our independent advisory and brokerage and capital markets businesses. We believe that these factors, coupled with successful recruiting efforts, position us well for success in 2018 and beyond. Ladenburg remains committed to investing in our core business to drive sustainable growth and generate strong returns.”
Richard Lampen, President and Chief Executive Officer of Ladenburg, said, “Ladenburg continues to strengthen its position as a leader in the fast growing independent advisory and brokerage business. We provide our financial advisors with the “Ladenburg Advantage” - a differentiated set of resources and services available through our affiliated companies. Through high levels of recruiting over the past two years, we have grown our nationwide network of independent financial advisors to over 4,300. The demand for the high quality independent advice, trustworthy financial planning and investment solutions our advisors provide to the mass affluent segment, together with improved market conditions, was reflected in the 19.9% growth in total client assets to a record $164.7 billion at year end 2017. The higher asset levels and strong market conditions contributed to a 20.9% increase in advisory fee revenue to $560.9 million in 2017, as advisory assets under management grew 25.6% to $72.6 billion. Our management team is focused on improving margins through increased shared services and recurring revenues, and managing all of our operating segments efficiently. We are very pleased to have initiated during 2017 a quarterly cash dividend on our common stock, reflecting our long-term commitment to delivering value for our fellow shareholders.”
For the Fourth Quarter and Full Year Ended December 31, 2017
Fourth quarter 2017 revenues were $344.0 million, a 15.8% increase from revenues of $297.1 million in the fourth quarter of 2016. Advisory fee revenue for the three months ended December 31, 2017 increased by 25.0% to $152.6 million from $122.1 million for the comparable period in 2016 due to improved market conditions and higher average advisory assets. Commissions revenue for the fourth quarter of 2017 increased by 9.3% to $141.5 million from $129.5 million for the comparable period in 2016 primarily due to increased sales of mutual fund and variable annuity products. Also, investment banking revenue for the fourth quarter of 2017 increased by 23.2% to $12.3 million from $10.0 million for the comparable period in 2016 due to improved market conditions.
Net income attributable to the Company for the fourth quarter of 2017 was $6.6 million, as compared to net income attributable to the Company of $0.6 million in the fourth quarter of 2016. Net loss available to common shareholders, after payment of preferred dividends, was $1.8 million or ($0.01) per basic and diluted common share for the fourth quarter of 2017, as compared to net loss available to common shareholders of $7.3 million or ($0.04) per basic and diluted common share in the comparable 2016 period. The fourth quarter 2017 results included $6.8 million of income tax benefit, $8.4 million of non-cash charges for depreciation, amortization and compensation, $2.3 million of amortization of retention and forgivable loans and $1.1 million of interest expense. The fourth quarter 2016 results included $2.0 million of income tax expense, $8.5 million of non-cash charges for depreciation, amortization and compensation, $1.1 million of amortization of retention and forgivable loans and $0.8 million of interest expense.
Full year 2017 revenues were $1.27 billion, a 14.6% increase from revenues of $1.11 billion for the comparable 2016 period. Net income attributable to the Company for fiscal 2017 was $7.7 million, as compared to net loss attributable to the Company of $22.3 million in the comparable 2016 period. Net loss available to common shareholders, after payment of preferred dividends, was $24.8 million or $(0.13) per basic and diluted common share in 2017, as compared to net loss available to common shareholders, after payment of preferred dividends, of $52.7 million or $(0.29) in the comparable 2016 period. The 2017 results included approximately $6.5 million of income tax benefit, $34.4 million of non-cash charges for depreciation, amortization and compensation, $7.4 million of amortization of retention and forgivable loans and $2.7 million of interest expense. The comparable 2016 results included approximately $10.0 million of income tax expense, $33.6 million of non-cash charges for depreciation, amortization and compensation, $5.5 million of amortization of retention and forgivable loans and $4.3 million of interest expense.
Recurring Revenues
For the full year ended December 31, 2017, recurring revenues, which consist of advisory fees, trailing commissions, cash sweep revenues and certain other fees, represented approximately 79.6% of revenues from the Company’s independent advisory and brokerage services segment. Recurring revenues for this business were approximately 76.7% for the full year 2016.
EBITDA, as adjusted
EBITDA, as adjusted, for the fourth quarter of 2017 was $18.7 million, an increase of 27.8% from $14.6 million in the comparable 2016 period. EBITDA, as adjusted, for the full year 2017 was $56.0 million, an increase of 56.6% from $35.8 million for the prior-year period. Attached hereto as Table 2 is a reconciliation of net income (loss) attributable to the Company as reported (see “Non-GAAP Financial Measures” below) to EBITDA, as adjusted. The increase in EBITDA, as adjusted, for the full year 2017 was primarily attributable to increases in our Ladenburg segment as a result of higher investment banking revenues, increased revenue from our cash sweep programs and higher advisory revenues in our independent advisory and brokerage services segment.
Client Assets
At December 31, 2017, total client assets under administration were $164.7 billion, a 19.9% increase from $137.4 billion at December 31, 2016. At December 31, 2017, client assets included cash balances of approximately $4.5 billion, including approximately $4.1 billion participating in our cash sweep programs.
Stock Repurchases
During the quarter ended December 31, 2017, Ladenburg repurchased 271,540 shares of its common stock at a cost of approximately $0.8 million, representing an average price per share of $3.10. During the period from January 1, 2017 through December 31, 2017, Ladenburg repurchased 2,088,460 shares of its common stock at a cost of approximately $5.3 million, including 1,850,215 shares repurchased under its stock repurchase program, representing an average price per share of $2.53. Since the inception of its stock repurchase program in March 2007, Ladenburg has repurchased over 26.9 million shares of its common stock at a total cost of approximately $57.1 million, including purchases outside its stock repurchase program, representing an average price per share of $2.13. As of December 31, 2017, Ladenburg has the authority to repurchase an additional 8,149,785 shares under its current repurchase plan.
Non-GAAP Financial Measures
Earnings before interest, taxes, depreciation and amortization, or EBITDA, as adjusted for acquisition-related expense, amortization of retention and forgivable loans, change in fair value of contingent consideration related to acquisitions, non-cash compensation expense, financial advisor recruiting expense and other expense, which includes loss on write-off of receivable from subtenant, excise and franchise tax expense, severance costs and compensation expense that may be paid in stock, is a key metric the Company uses in evaluating its financial performance. EBITDA, as adjusted, is considered a non-GAAP financial measure as defined by Regulation G promulgated by the SEC under the Securities Act of 1933, as amended. The Company considers EBITDA, as adjusted, important in evaluating its financial performance on a consistent basis across various periods. Due to the significance of non-cash and non-recurring items, EBITDA, as adjusted, enables the Company’s Board of Directors and management to monitor and evaluate the business on a consistent basis. The Company uses EBITDA, as adjusted, as a primary measure, among others, to analyze and evaluate financial and strategic planning decisions regarding future operating investments and potential acquisitions. The Company believes that EBITDA, as adjusted, eliminates items that are not indicative of its core operating performance, such as acquisition-related expense, amortization of retention and forgivable loans and financial advisor recruiting expenses, or do not involve a cash outlay, such as stock-related compensation, which is expected to remain a key element in our long-term incentive compensation program. EBITDA, as adjusted, should be considered in addition to, rather than as a substitute for, income (loss) before income taxes, net income (loss) and cash flows provided by (used in) operating activities.
About Ladenburg
Ladenburg Thalmann Financial Services Inc. (NYSE American: LTS, LTS PrA) is a publicly-traded diversified financial services company based in Miami, Florida. Ladenburg’s subsidiaries include industry-leading independent advisory and broker-dealer firms Securities America, Triad Advisors, Securities Service Network, Investacorp, and KMS Financial Services, as well as Premier Trust, Ladenburg Thalmann Asset Management, Highland Capital Brokerage, a leading independent life insurance brokerage company, Ladenburg Thalmann Annuity Insurance Services, a full-service annuity processing and marketing company, and Ladenburg Thalmann & Co. Inc., an investment bank which has been a member of the New York Stock Exchange for over 135 years. The company is committed to investing in the growth of its subsidiaries while respecting and maintaining their individual business identities, cultures, and leadership. For more information, please visit www.ladenburg.com.
10-K