Ladenburg Thalmann Financial Services In (LTS, Financial) filed Quarterly Report for the period ended 2010-03-31.
Ladenburg Thalmann Financial Services In has a market cap of $250.22 million; its shares were traded at around $1.49 with and P/S ratio of 1.66.
Our total revenues for the three months ended March 31, 2010 increased $10,681 (32%) from the 2009 period, primarily as a result of increased commissions and fees revenue of $9,657, increased investment banking revenue of $573, increased principal transactions revenue of $587, increased other income of $618 and increased asset management revenue of $156, partially offset by decreased interest and dividends revenue of $910.
Our total expenses for the three months ended March 31, 2010 increased by $8,845 (23%) from the 2009 period, primarily as a result of an increase in commissions and fees expense of $8,495, an increase in compensation and benefits expense of $1,429 and an increase in other expense of $872, partially offset by a decrease in professional services of $947 and a decrease in rent and occupancy, net of sublease revenue of $515.
The $573 (14%) increase in investment banking revenue for the three months ended March 31, 2010 as compared to the 2009 period is primarily due to an increase in capital raising activities of $3,305 and an increase in advisory fees of $267, partially offset by a decrease in deferred fees from special purpose acquisition company (SPAC) transactions of $2,966. Our investment banking revenue is derived from Ladenburg s capital raising activities, including underwritten public offerings, PIPES (private investment in public equity) and registered direct offerings and strategic advisory services. Revenue from underwritten public offerings was $2,619 and $44 for the 2010 and 2009 periods, respectively. PIPES and registered direct offering revenue was $840, including $166 in warrants, for the first quarter of 2010, as compared to $110 for the 2009 period. For the three months ended March 31, 2010 and 2009, investment banking revenue included $59 and $3,025, respectively, of deferred fees from SPAC transactions. Typically, a significant portion of the underwriting fees for a SPAC transaction are deferred fees and are recognized only upon a SPAC's successful completion of a business combination transaction. As of the date of this quarterly report, Ladenburg did not have a material backlog of deferred SPAC transaction fees. We expect investment banking revenue during the first half of 2010 to exceed prior-year levels due to expected improved capital market activity.
Each of Ladenburg, Investacorp and Triad is subject to the SEC s net capital rules. Ladenburg was also subject to the net capital rules of the CFTC but, effective as of April 5, 2010, is no longer subject to the CFTC rules. Therefore, Ladenburg, Investacorp and Triad are subject to certain restrictions on their use of capital and their related liquidity. At March 31, 2010, Ladenburg s regulatory net capital of $3,268 exceeded minimum capital requirements of $1,000 by $2,268. At March 31, 2010, Investacorp s regulatory net capital of $558 exceeded minimum capital requirements of $289 by $269. At March 31, 2010, Triad s regulatory net capital of $1,859 exceeded minimum capital requirements of $278 by $1,581. Failure to maintain the required net capital may subject Ladenburg, Investacorp and Triad to suspension or expulsion by FINRA, the SEC and other regulatory bodies, and ultimately may require their liquidation. The net capital rule also prohibits the payment of dividends, redemption of stock and prepayment or payment of principal of subordinated indebtedness if net capital, after giving effect to the payment, redemption or prepayment, would be less than specified percentages of the minimum net capital requirement. Compliance with the net capital rule could limit the operations of Ladenburg, Investacorp and Triad that require the intensive use of capital, such as underwriting and trading activities, and also could restrict our ability to withdraw capital from our subsidiaries, which in turn, could limit our ability to pay dividends and repay and service our debt.
Our primary sources of liquidity include borrowings under our $30,000 revolving credit agreement with Frost Gamma. Borrowings under the $30,000 revolving credit agreement bear interest at a rate of 11% per annum, payable quarterly. At March 31, 2010, $21,450 was outstanding under the revolving credit agreement. During the first half of 2010, we re-borrowed a net amount of $3,000 under the $30,000 credit agreement. We may repay amounts outstanding or re-borrow amounts under our revolving credit facility at any time prior to its amended maturity date of August 25, 2016, without penalty. We believe our existing assets and borrowings available under our $30,000 revolving credit facility provide adequate funds for continuing operations at current activity levels. We are currently in compliance with all debt covenants in our debt agreements.
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Ladenburg Thalmann Financial Services In has a market cap of $250.22 million; its shares were traded at around $1.49 with and P/S ratio of 1.66.
Highlight of Business Operations:
For the quarter ended March 31, 2010, we had a net loss of $4,403 compared to a net loss of $6,241 for the quarter ended March 31, 2009. Net loss for the 2010 period included $1,760 of non-cash compensation expense. Net loss for the 2009 period included $1,920 of non-cash compensation expense and was impacted negatively by a one-time $562 increase in rent and occupancy expense, net of sublease revenue and an $820 increase in professional services expense related to one matter.Our total revenues for the three months ended March 31, 2010 increased $10,681 (32%) from the 2009 period, primarily as a result of increased commissions and fees revenue of $9,657, increased investment banking revenue of $573, increased principal transactions revenue of $587, increased other income of $618 and increased asset management revenue of $156, partially offset by decreased interest and dividends revenue of $910.
Our total expenses for the three months ended March 31, 2010 increased by $8,845 (23%) from the 2009 period, primarily as a result of an increase in commissions and fees expense of $8,495, an increase in compensation and benefits expense of $1,429 and an increase in other expense of $872, partially offset by a decrease in professional services of $947 and a decrease in rent and occupancy, net of sublease revenue of $515.
The $573 (14%) increase in investment banking revenue for the three months ended March 31, 2010 as compared to the 2009 period is primarily due to an increase in capital raising activities of $3,305 and an increase in advisory fees of $267, partially offset by a decrease in deferred fees from special purpose acquisition company (SPAC) transactions of $2,966. Our investment banking revenue is derived from Ladenburg s capital raising activities, including underwritten public offerings, PIPES (private investment in public equity) and registered direct offerings and strategic advisory services. Revenue from underwritten public offerings was $2,619 and $44 for the 2010 and 2009 periods, respectively. PIPES and registered direct offering revenue was $840, including $166 in warrants, for the first quarter of 2010, as compared to $110 for the 2009 period. For the three months ended March 31, 2010 and 2009, investment banking revenue included $59 and $3,025, respectively, of deferred fees from SPAC transactions. Typically, a significant portion of the underwriting fees for a SPAC transaction are deferred fees and are recognized only upon a SPAC's successful completion of a business combination transaction. As of the date of this quarterly report, Ladenburg did not have a material backlog of deferred SPAC transaction fees. We expect investment banking revenue during the first half of 2010 to exceed prior-year levels due to expected improved capital market activity.
Each of Ladenburg, Investacorp and Triad is subject to the SEC s net capital rules. Ladenburg was also subject to the net capital rules of the CFTC but, effective as of April 5, 2010, is no longer subject to the CFTC rules. Therefore, Ladenburg, Investacorp and Triad are subject to certain restrictions on their use of capital and their related liquidity. At March 31, 2010, Ladenburg s regulatory net capital of $3,268 exceeded minimum capital requirements of $1,000 by $2,268. At March 31, 2010, Investacorp s regulatory net capital of $558 exceeded minimum capital requirements of $289 by $269. At March 31, 2010, Triad s regulatory net capital of $1,859 exceeded minimum capital requirements of $278 by $1,581. Failure to maintain the required net capital may subject Ladenburg, Investacorp and Triad to suspension or expulsion by FINRA, the SEC and other regulatory bodies, and ultimately may require their liquidation. The net capital rule also prohibits the payment of dividends, redemption of stock and prepayment or payment of principal of subordinated indebtedness if net capital, after giving effect to the payment, redemption or prepayment, would be less than specified percentages of the minimum net capital requirement. Compliance with the net capital rule could limit the operations of Ladenburg, Investacorp and Triad that require the intensive use of capital, such as underwriting and trading activities, and also could restrict our ability to withdraw capital from our subsidiaries, which in turn, could limit our ability to pay dividends and repay and service our debt.
Our primary sources of liquidity include borrowings under our $30,000 revolving credit agreement with Frost Gamma. Borrowings under the $30,000 revolving credit agreement bear interest at a rate of 11% per annum, payable quarterly. At March 31, 2010, $21,450 was outstanding under the revolving credit agreement. During the first half of 2010, we re-borrowed a net amount of $3,000 under the $30,000 credit agreement. We may repay amounts outstanding or re-borrow amounts under our revolving credit facility at any time prior to its amended maturity date of August 25, 2016, without penalty. We believe our existing assets and borrowings available under our $30,000 revolving credit facility provide adequate funds for continuing operations at current activity levels. We are currently in compliance with all debt covenants in our debt agreements.
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