National Holdings, a full service investment banking company operating through its wholly-owned subsidiaries, reported financial results for its fiscal year ended September 30, 2012.
Total revenues for the year were $118,648,000, a decrease of $7,873,000, or 6%, compared to $126,521,000 over the same period in 2011. The primary factor responsible for the decrease in overall revenues was the less advantageous retail market conditions for corporate securities. These unfavorable conditions led to a lower volume of transactions made on behalf of clients. Fortunately, a significant portion of that revenue loss was offset by a 122% increase in investment banking revenue and an increase of 7% in investment advisory fees.
“We are very pleased that we generated a positive adjusted EBITDA of $1,529,000 (please refer to the reconciliation of net income to EBITDA, as adjusted, attached to this press release) for the fiscal year ended September 30, 2012, despite this very challenging environment. This represents an improvement of $1,410,000, despite nearly $7.9 million of lower revenues and the best adjusted EBITDA performance by the company in over four years,” stated Mark Goldwasser, Chief Executive Officer. “We remain committed to managing our overhead and streamlining our brokerage operations. We will continue to focus on corporate finance and the expansion of our independent network of brokers and advisors through organic growth and the addition of new branches and large OSJ’s.”
“We are making progress in moving our business mix and margins in the right direction,” stated Robert Fagenson, Executive Co-Chairman. “With market conditions and investor confidence still going through an extremely difficult period, our team has done an outstanding job in cost cutting and maintaining positive EBITDA. Our strong retail distribution network continues to expand and bolster the growth of our syndicate, market making, investment banking and investment advisory services.”
“As we look back on our accomplishments in fiscal 2012, we also focus on our goals for the year ahead,” continued Fagenson. “Expansion of our retail network through organic growth in our existing branches as well as targeted acquisitions; continued growth of the investment banking and syndicate side of the business as well as our various trading operations; accelerating the movement of our overall business mix towards higher margin revenue streams; establishing a stronger balance sheet and paying off our remaining short term debt, remain central to our strategy and are just some of the areas we will concentrate on in 2013.”
Despite a decrease in revenue for this fiscal year, 2012 was a year of significant progress. A net loss of $1,937,000 was reported by the company for the fiscal year ending on September 30, 2012, a drastic improvement over a net loss of $4,713,000 reported by the previous year. The net loss attributable to common stockholders for the fiscal year ended September 30, 2012, was $2,030,000, or a loss of $0.08 per common share, as compared to a net loss attributable to common stockholders for the fiscal year ended 2011 of $5,127,000 or $0.18 per common share.
The company took a non-cash charge of $1,051,000 due to a loss on the disposition of unconsolidated joint venture for the fiscal year ended September 30, 2012, for which there was no comparable charge for the same period in 2011. The company took a non-cash charge of $1,603,000 due to an increase in the fair value of a derivative liability for the fiscal year ended September 30, 2011, for which there was no comparable charge for same period in 2012. The net loss attributable to common stockholders for the fiscal year ended September 30, 2012, and September 30, 2011, reflects $93,000 and $414,000 of cumulative preferred stock dividends on the company’s Series A preferred stock, respectively.
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