Investors Capital Holdings Ltd has a market cap of $26.4 million; its shares were traded at around $4.0001 with a P/E ratio of 100 and P/S ratio of 0.3.
Highlight of Business Operations:Revenues increased by $3.8 million, or 10.2%, led by a $2.64 million, or 8.5%, increase in commissionable revenues reflecting circumstances set forth in the quarterly analysis. Brokerage and mutual fund sales also rose.
As of September 30, 2010, cash and cash equivalents totaled $6.24 million as compared to $5.81 million as of March 31, 2010. Working capital as of September 30, 2010 was $5.59 million as compared to $6.66 million as of March 31, 2010. The ratio of current assets to current liabilities was 1.75 to 1 as of September 30, 2010 as compared to 1.84 to 1 as of March 31, 2010.
Operations provided $1.30 million in cash for the quarter ended September 30, 2010, as compared to $0.38 million of operating cash used in the prior period, principally due to a change in our accounts receivable, firm accounts, held at our clearing firm.
Cash flows for financing activities in the current period were similar to the prior period as we paid $0.79 million and$0.84 million in loan payments to finance E&O insurance premiums, respectively, for the periods ended September 30, 2010 and 2009.
As of September 30, 2010, ICC had net capital of $2.72 million (i.e., an excess of $2.22 million) and a 2.78 to 1 net capital ratio as compared to net capital of approximately $3.39 million (i.e., an excess of $2.91 million) and a 2.13 to 1 net capital ratio as of March 31, 2010.
The Company operates in a highly litigious and regulated business, and the Company often is made a defendant in arbitrations and other legal proceedings that are incidental to our securities business. The Company typically vigorously contests the allegations of the complaints and believes that there are meritorious defenses in these matters. From time to time the Company also is the subject of regulatory investigations and proceedings. Counsel often is unable to confidently predict the likelihood of an outcome, whether favorable or unfavorable, in such matters because of routine and inherent uncertainties. For the majority of pending claims, the Company's current errors and omissions (E&O) policy limits the Companys maximum exposure in any one case to $100,000. The Company also maintains a fidelity bond to protect itself from potential damages and/or legal costs related to fraudulent activities pursuant to which the Companys exposure is usually limited to $350,000, subject to policy limitations and exclusions.
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