LaBranche & Co Inc. (NYSE:LAB) (the “Company”) today reported financial
results for the quarter ended March 31, 2009. The Company reported an
after-tax net loss of $29.7 million, or $0.51 per share, for the 2009
first quarter, which includes a pre-tax unrealized loss on the Company's
shares of NYSE Euronext, Inc. common stock (the "NYX shares") of $29.7
million. This compares to a net loss of $40.2 million, or $0.65 per
share, for the 2008 first quarter, which also includes a $79.2 million
pre-tax unrealized loss on the Company's NYX shares.
On a pro-forma basis, the Company reported a net loss for the first
quarter of 2009 of $11.9 million, or $0.20 per share, compared to
pro-forma net income of $7.8 million, or $0.13 per share, for the first
quarter of 2008. These pro-forma results exclude the unrealized loss on
the NYX shares in each period and an expense on early extinguishment of
debt in the first quarter of 2008.
The Company is the parent of LaBranche & Co. LLC, one of the largest
market-makers in exchange-listed securities. The Company is also the
parent of LaBranche Structured Holdings, Inc., whose subsidiaries are
market-makers in options, exchange-traded funds and futures on various
exchanges domestically and internationally. Another subsidiary of the
Company, LaBranche Financial Services, LLC, provides mainly securities
execution and brokerage services to institutional investors.
Certain statements contained in this release, including without
limitation, statements containing the words "believes", "intends",
"expects", "anticipates", and words of similar import, constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Readers are cautioned that any
such forward-looking statements are not guarantees of future
performance, and since such statements involve risks and uncertainties,
the actual results and performance of the Company and the industry may
turn out to be materially different from the results expressed or
implied by such forward-looking statements. Given these uncertainties,
readers are cautioned not to place undue reliance on such
forward-looking statements. The Company also disclaims any obligation to
update its view of any such risks or uncertainties or to publicly
announce the result of any revisions to the forward-looking statements
made in this release.
TABLES TO FOLLOW
|
|
|
|
|
|
LaBranche & Co Inc.
|
|
Condensed Consolidated Statements of Operations
|
|
(all data in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
|
2009
|
|
|
|
|
2008
|
|
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
REVENUES:
|
|
|
|
|
|
|
|
Net (loss) gain on principal transactions
|
|
|
$
|
(2,052
|
)
|
|
|
$
|
60,044
|
|
|
Commissions and other fees
|
|
|
|
16,187
|
|
|
|
|
10,010
|
|
|
Net loss on investments
|
|
|
|
(31,766
|
)
|
|
|
|
(81,290
|
)
|
|
Interest income
|
|
|
|
863
|
|
|
|
|
29,925
|
|
|
Other
|
|
|
|
1,116
|
|
|
|
|
293
|
|
|
Total revenues
|
|
|
|
(15,652
|
)
|
|
|
|
18,982
|
|
|
|
|
|
|
|
|
|
|
Interest Expense:
|
|
|
|
|
|
|
|
Debt
|
|
|
|
5,663
|
|
|
|
|
10,863
|
|
|
Inventory financing
|
|
|
|
5,636
|
|
|
|
|
30,812
|
|
|
Total interest expense
|
|
|
|
11,299
|
|
|
|
|
41,675
|
|
|
Revenues, net of interest expense
|
|
|
|
(26,951
|
)
|
|
|
|
(22,693
|
)
|
|
|
|
|
|
|
|
|
|
EXPENSES:
|
|
|
|
|
|
|
|
Employee compensation and related benefits
|
|
|
|
8,068
|
|
|
|
|
28,530
|
|
|
Exchange, clearing and brokerage fees
|
|
|
|
5,487
|
|
|
|
|
10,658
|
|
|
Lease of exchange memberships and trading license fees
|
|
|
|
404
|
|
|
|
|
427
|
|
|
Depreciation and amortization of intangibles
|
|
|
|
955
|
|
|
|
|
890
|
|
|
Early extinguishment of debt
|
|
|
|
--
|
|
|
|
|
886
|
|
|
Other
|
|
|
|
7,748
|
|
|
|
|
7,348
|
|
|
Total expenses
|
|
|
|
22,662
|
|
|
|
|
48,739
|
|
|
|
|
|
|
|
|
|
|
Loss before benefit for income taxes
|
|
|
|
(49,613
|
)
|
|
|
|
(71,432
|
)
|
|
|
|
|
|
|
|
|
|
BENEFIT FOR INCOME TAXES
|
|
|
|
(19,866
|
)
|
|
|
|
(31,195
|
)
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(29,747
|
)
|
|
|
$
|
(40,237
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
|
|
|
58,390
|
|
|
|
|
61,854
|
|
|
Diluted
|
|
|
|
58,390
|
|
|
|
|
61,854
|
|
|
|
|
|
|
|
|
|
|
Loss per share:
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
(0.51
|
)
|
|
|
$
|
(0.65
|
)
|
|
Diluted
|
|
|
$
|
(0.51
|
)
|
|
|
$
|
(0.65
|
)
|
|
|
|
|
|
|
|
|
|
LaBranche & Co Inc.
|
|
Condensed Consolidated Statements of Financial Condition
|
|
(all data in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2009
|
|
|
December 31, 2008
|
|
ASSETS
|
|
|
(unaudited)
|
|
|
(audited)
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
266,904
|
|
|
$
|
304,179
|
|
Cash and securities segregated under federal regulations
|
|
|
|
1,826
|
|
|
|
1,876
|
|
Receivable from brokers, dealers and clearing organizations
|
|
|
|
76,707
|
|
|
|
91,354
|
|
Financial instruments owned, at fair value
|
|
|
|
1,605,540
|
|
|
|
3,175,968
|
|
Exchange memberships owned, at adjusted cost
|
|
|
|
|
|
|
|
(market value of $2,877 and $3,910, respectively)
|
|
|
|
1,202
|
|
|
|
1,202
|
|
Office equipment and leasehold improvements, at cost, less
accumulated
depreciation and amortization of $12,153 and
$14,362, respectively
|
|
|
|
16,054
|
|
|
|
16,522
|
|
Goodwill and other intangible assets, net
|
|
|
|
109,229
|
|
|
|
109,229
|
|
Deferred tax assets
|
|
|
|
5,484
|
|
|
|
--
|
|
Income tax receivable
|
|
|
|
8,298
|
|
|
|
--
|
|
Other assets
|
|
|
|
19,276
|
|
|
|
31,285
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
$
|
2,110,520
|
|
|
$
|
3,731,615
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES:
|
|
|
|
|
|
|
|
Payable to brokers, dealers and clearing organizations
|
|
|
$
|
383,150
|
|
|
$
|
105,037
|
|
Payable to customers
|
|
|
|
36
|
|
|
|
36
|
|
Financial instruments sold, but not yet purchased, at fair value
|
|
|
|
1,086,730
|
|
|
|
2,855,420
|
|
Accrued compensation
|
|
|
|
3,335
|
|
|
|
75,747
|
|
Accounts payable and other accrued expenses
|
|
|
|
18,833
|
|
|
|
29,179
|
|
Other liabilities
|
|
|
|
13,528
|
|
|
|
12,840
|
|
Income tax payable
|
|
|
|
--
|
|
|
|
5,834
|
|
Deferred tax liabilities
|
|
|
|
--
|
|
|
|
5,349
|
|
Long term debt
|
|
|
|
199,323
|
|
|
|
199,323
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
|
1,704,935
|
|
|
|
3,288,765
|
|
|
|
|
|
|
|
|
|
Total stockholders’ equity
|
|
|
|
405,585
|
|
|
|
442,850
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
|
$
|
2,110,520
|
|
|
$
|
3,731,615
|
|
|
|
|
|
|
|
|
|
|
LaBranche & Co Inc.
Regulation G Requirement:
Reconciliation of Non-GAAP Financial Measures
(all data in
thousands, except per share data)
(unaudited)
In evaluating the Company’s financial performance, management reviews
results from operations, which excludes non-operating charges. Pro-forma
earnings per share is a non-GAAP (generally accepted accounting
principles) performance measure, but the Company believes that it is
useful to assist investors in gaining an understanding of the trends and
operating results for the Company’s core business. Pro-forma earnings
per share should be viewed in addition to, and not in lieu of, the
Company’s reported results under U.S. GAAP.
The following is a reconciliation of U.S. GAAP results to pro-forma
results for the periods presented:
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2009
|
|
|
|
2008
|
|
|
|
|
Amounts as reported
|
|
|
(1) (2)
Adjustments
|
|
|
Pro forma amounts
|
|
|
Amounts as reported
|
|
|
(1) (2)
Adjustments
|
|
|
Pro forma amounts
|
|
Revenues, net of interest expense
|
|
|
$
|
(26,951
|
)
|
|
|
$
|
29,720
|
|
|
$
|
2,769
|
|
|
|
$
|
(22,693
|
)
|
|
|
$
|
79,246
|
|
|
|
$
|
56,553
|
|
Total expenses
|
|
|
|
22,662
|
|
|
|
|
--
|
|
|
|
22,662
|
|
|
|
|
48,739
|
|
|
|
|
(886
|
)
|
|
|
|
47,853
|
|
(Loss) income before (benefit) provision for income taxes
|
|
|
|
(49,613
|
)
|
|
|
|
29,720
|
|
|
|
(19,893
|
)
|
|
|
|
(71,432
|
)
|
|
|
|
80,132
|
|
|
|
|
8,700
|
|
(Benefit) provision for income taxes (3)
|
|
|
|
(19,866
|
)
|
|
|
|
11,888
|
|
|
|
(7,978
|
)
|
|
|
|
(31,195
|
)
|
|
|
|
32,053
|
|
|
|
|
858
|
|
Net (loss) income applicable to common stockholders
|
|
|
$
|
(29,747
|
)
|
|
|
$
|
17,832
|
|
|
$
|
(11,915
|
)
|
|
|
$
|
(40,237
|
)
|
|
|
$
|
48,079
|
|
|
|
$
|
7,842
|
|
Basic per share
|
|
|
$
|
(0.51
|
)
|
|
|
$
|
0.31
|
|
|
$
|
(0.20
|
)
|
|
|
$
|
(0.65
|
)
|
|
|
$
|
0.78
|
|
|
|
$
|
0.13
|
|
Diluted per share
|
|
|
$
|
(0.51
|
)
|
|
|
$
|
0.31
|
|
|
$
|
(0.20
|
)
|
|
|
$
|
(0.65
|
)
|
|
|
$
|
0.78
|
|
|
|
$
|
0.13
|
|
(1)
|
|
Revenue adjustment reflects loss in each accounting period, based on
the change in fair market value of the Company’s restricted and
unrestricted NYX shares at the end of each such period versus the
beginning of such period.
|
|
(2)
|
|
Expense adjustment reflects the expense associated with early
extinguishment of the Company’s debt in accounting period.
|
|
(3)
|
|
In the first quarter of 2008, the Company recognized a tax benefit
due to the release of a tax reserve for an expired tax year, which
resulted in a reduced provision for income taxes.
|
LaBranche & Co Inc.
Jeffrey A. McCutcheon, 212-820-6220
Senior
Vice President & Chief Financial Officer
