Broadpoint Announces Second Quarter 2008 Results Net Revenues Increase 97% from the Prior Quarter.Pre-Tax Loss Narrows to $253,000; Records Operating Profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of $616,000 before Restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). Costs NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Broadpoint Securities Group, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : BPSG BPSG Boron-Doped Phosphosilicate Glass ) reported today financial results for the second quarter and for the six months ended June 30, 2008 and will hold a conference call today at 10 A.M. (EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ) (see Conference Call Information below) to discuss these results. Highlights for the second quarter ended June 30, 2008 include: (In thousands of dollars) [TABLE OMITTED] Note: See the paragraph captioned "Non-GAAP Financial Measures" for additional information. * 97% increase in net revenues compared to the first quarter of 2008 and a 222% increase in net revenues compared to the fourth quarter of 2007. * Revenue growth was driven by the Broadpoint Debt Capital Markets Group and Investment Banking. * Broadpoint closed its previously announced placement of $25 million in Series B Mandatory Redeemable Redeemable Eligible for redemption under the terms of an indenture. Preferred Stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. and a warrant to a fund managed by MAST Capital Management, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control . * Broadpoint continued to expand its Debt and Equity Capital Markets platforms by hiring eleven senior professionals in high yield and investment grade sales and a new head of its equities division. * Broadpoint Descap, Broadpoint's Mortgage and Asset Backed division, recently hired four senior professionals, further strengthening its abilities in MBS See Mb/sec. MBS - mobile broadband services , ABS (Automatic Backup System) See backup program. , CMBS CMBS See: Commercial Mortgage Backed Securities and cash and synthetic structured credit products. * With the hiring of two senior investment bankers Investment Banker A person representing a financial institution that is in the business of raising capital for corporations and municipalities. Notes: An investment banker may not accept deposits or make commercial loans. , Broadpoint expanded its investment banking recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. and restructuring advisory capabilities. * Broadpoint continued to implement its restructuring plan to properly size its infrastructure. In the second quarter, the Company incurred $869,000 of restructuring costs. For the period beginning in the fourth quarter of 2007 through the end of the second quarter of 2008, a total of $4.8 million in restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. have been taken, and are expected to yield $6.1 million in annual savings. "The second quarter was an important milestone for Broadpoint," said Lee Fensterstock, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Broadpoint's financial results continue to dramatically improve with revenues more than quadrupling quad·ru·ple adj. 1. Consisting of four parts or members. 2. Four times as much in size, strength, number, or amount. 3. Music Having four beats to the measure. n. from the third quarter of 2007, the quarter prior to the close of the MatlinPatterson investment, validating val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. our multi-product business model. Our focus in the near term will be to complete our restructuring and demonstrate appropriate profit margins, while we look to further expand our business via acquisition utilizing the $25 million of liquidity from the Mandatory Redeemable Preferred Stock issuance." "The continuing disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. in the markets has allowed us to strengthen our presence in Debt Capital Markets, Mortgage and Asset Backed Sales and Trading, Equities and Investment Banking in the second quarter," said Peter McNierney, President and COO (Cell Of Origin) See mobile positioning. . "Our recent staff additions will further enhance our ability to effectively serve our corporate clients and to build a strong and sustainable investment bank." [TABLE OMITTED] Discussion of results for the Second Quarter of 2008 compared to the First Quarter of 2008 Net revenues for the second quarter of 2008 were $34.1 million, an increase of $16.7 million or 97% from $17.3 million reported in the first quarter of 2008. The company reported a net loss of $1.1 million or $0.02 per common share for the second quarter of 2008 compared to a net loss of $9.2 million or $0.15 per common share for the first quarter of 2008. Pre-tax loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the in the second quarter was $0.3 million compared to $8.5 million in the prior quarter. Excluding the impact of restructuring costs, the Company generated a pre-tax gain from continuing operations of $0.6 million in the second quarter compared to a loss of $7.3 million in the first quarter of 2008. The company's new Debt Capital Markets group, which commenced operations in March 2008, generated $11.7 million in net revenues from sales and trading activities in the second quarter compared to $3.7 million in net revenues in sales and trading activities in the first quarter, reflecting their first full quarter of operations. Investment banking revenues were $9.3 million in the second quarter compared to $0.7 million in the first quarter. Mortgage and asset backed trading net revenues in the second quarter were $10.6 million compared to $10.8 million in the first quarter. Equities sales and trading activities generated net revenues of $1.7 million in the second quarter compared to $1.8 million in the first quarter. Non-interest expenses for the second quarter of 2008 were $34.3 million, compared to $25.8 million in the first quarter. In the second quarter of 2008 compared to the first quarter of 2008, Compensation and benefits expense of $26.1 million increased by $9.0 million, or 52% due to an increase in net revenues of 97% primarily in Debt Capital Markets and Investment Banking. Clearing, settlement and brokerage expenses of $0.7 million increased by $0.3 million and Communications and data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a expenses of $2.2 million increased $0.6 million, primarily due to Debt Capital Markets activities. Occupancy and depreciation expense of $1.5 million, and Selling expense of $1.0 million were slightly lower than in the prior quarter. Restructuring expenses in the second quarter were $0.9 million, consisting of $0.4 million in severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and $0.5 million in costs associated with exiting excess real estate, compared to $1.2 million in the prior quarter, which consisted of $0.8 million in severance and $0.4 million in costs associated with exiting excess real estate. Other expenses of $1.9 million decreased $0.9 million primarily as a result of legal expenses associated with the hiring of personnel in the new Recapitalization and Restructuring Group incurred in the first quarter. Discussion of results for the Second Quarter of 2008 compared to the Second Quarter of 2007 Net revenues for the second quarter of 2008 were $34.1 million, an increase of $24.3 million, or 248%, from $9.8 million in the second quarter of 2007. The Company reported a net loss of $1.1 million or $0.02 per common share for the second quarter of 2008 compared to a net loss of $5.0 million or $0.32 per common share for the second quarter of 2007. Pre-tax loss from continuing operations in the second quarter was $0.3 million compared to a loss of $5.8 million in the prior year quarter. Excluding the impact of restructuring costs, the Company generated a pre-tax gain from continuing operations of $0.6 million in the second quarter of 2008. The Debt Capital Markets group, which commenced operations in March 2008, generated $11.7 million in net revenues from sales and trading activities in the second quarter. Investment Banking revenues were $9.3 million in the second quarter of 2008 compared to $2.3 million in the prior year quarter. Mortgage and asset backed net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight and trading revenues were $10.6 million in the second quarter compared to $3.3 million net sales and trading revenues in the second quarter of 2007. Equities sales and trading generated net revenues of $1.7 million compared to $3.0 million in the prior year quarter. Non-interest expenses for the second quarter of 2008 were $34.3 million, compared to $15.6 million in the second quarter of 2007. Compensation and benefits expense of $26.1 million in the second quarter of 2008 increased by $17.1 million, or 189%, due to an increase in net revenues of 248%. Clearing, settlement and brokerage expense of $0.7 million in the second quarter was lower by $0.2 million, primarily due to a decrease in equity trading In finance, equity trading is the buying and selling of company stock shares. Shares in large publicly-traded companies are bought and sold through one of the major stock exchanges, such as the New York Stock Exchange, London Stock Exchange or Tokyo Stock Exchange, which serve as volumes offset by increases in activity of the Debt Capital Markets group. Communications and data processing expense of $2.2 million increased by $0.2 million due primarily to the Debt Capital Markets group. Other expenses of $1.9 million in the second quarter of 2008 were $0.8 million higher than the prior year quarter primarily due to legal and employment fees. [TABLE OMITTED] Discussion of results for the First Six Months of 2008 compared to the First Six Months of 2007 Net revenues for the first half of 2008 were $51.4 million, an increase of $30.6 million, or 147% from $20.8 million reported in the first half of 2007. The Company reported a net loss of $10.3 million or $0.16 per common share for the first half of 2008 compared to a net loss of $9.4 million or $0.60 per common share for the first half of 2007. Pre-tax loss from continuing operations in the first six months of 2008 was $8.7 million compared to a loss of $12.2 million in the prior year period. Excluding the impact of restructuring costs, the company generated a pre-tax loss from continuing operations of $6.7 million in the first half of 2008. The Debt Capital Markets group, which commenced operations in March 2008, generated $15.4 million in net revenues from sales and trading activities in the first half of 2008. Investment Banking revenues were $10.0 million in the first six months of 2008 compared to $4.9 million in the prior year period. Mortgage and asset backed trading net revenues were $21.3 million compared to $5.7 million in the first six months of 2007. Equities sales and trading generated net revenues of $3.5 million in the first half of 2008 compared to $8.0 million in the prior year period. Non-interest expenses for the first half of 2008 were $60.2 million, compared to $33.0 million in the first six months of 2007. Compensation and benefits expense was $43.3 million in the first half of 2008, increased by $24.4 million, or 129%, due to an increase in net revenues of 147%. Clearing, settlement and brokerage expense was $1.1 million in the first half of 2008 compared to $2.1 million in the prior year period due to a decrease in equity trading volume partially offset by the Debt Capital Markets group. Communications and data processing expense of $3.9 million for the first half of 2008 decreased $0.3 million due to reductions in equity trading volumes offset by Debt Capital Markets. Restructuring costs were $2.1 million in the first half of 2008, consisting of $1.1 million in severance costs and $1.0 million in costs related to excess real estate. Other expense of $4.7 million in the first half of 2008 was higher by $2.0 million than the prior year period primarily due to legal and employment fees. Non-GAAP Financial Measures This press release includes non-GAAP financial measures. In the Highlights table presenting summary financial information, the Company has utilized a non-GAAP calculation of loss from continuing operations that has been adjusted to aid in the understanding and analyzing of our financial results for the period ended June 30, 2008. The Company believes that these non-GAAP measures will allow for a better evaluation of the operating performance of our business as it excludes, and will exclude, restructuring charges and legal expenses associated with our new recapitalization and restructuring business that are not indicative of the overall cost to run the existing business on a going forward basis. Our reference to these measures should not, however, be considered a substitute for results that are presented in a manner consistent with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . [TABLE OMITTED] Stockholders' Equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. Stockholders' Equity as of June 30, 2008 was $95.6 million compared to $82.3 million at December 31, 2007. Book value per share as of June 30, 2008 was $1.26, as compared to $1.42 at December 31, 2007. Conference Call Information The Company will hold a conference call today, August 7, 2008 at 10:00 A.M. (EDT). This call will be webcast and can be accessed on the Investor Relations Investor relations The process by which the corporation communicates with its investors. portion of the Company's website at www.broadpointsecurities.com, as well as being distributed through Thomson StreetEvents Network. Individual Investors can listen to the call at www.earnings.com, Thomson's individual portal, powered by StreetEvents. Institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. can access the call via Thomson StreetEvents (www.streetevents.com), a password protected event management site. To participate on the call, please dial 877.391.6850 for domestic calls and 617.597.9299 for international calls, participant passcode 48160224 or request the Broadpoint earnings call. For those who cannot listen to the live broadcast, a recording of the call will be available for seven days by dialing 888.286.8010 for domestic calls and 617.801.6888 for international calls, participant passcode 46522688. About Broadpoint Broadpoint Securities Group, Inc. (NASDAQ: BPSG) is an independent investment bank that serves the institutional investor and corporate middle market by providing clients with strategic, research-based investment opportunities, and financial advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal , including merger and acquisition, restructuring, recapitalization and strategic alternative analysis services. The Company offers a diverse range of products through Broadpoint Capital, Inc.'s Equity and Debt Capital Markets divisions, as well as Broadpoint Securities, Inc., its mortgage-backed securities/asset-backed securities trading securities trading, financial activity involving transactions of property such as stocks, bonds, commodities, and currency (see securities). Although the trading of stocks and bonds dates back several centuries in many Western nations, the development of the subsidiary, and FA Technology Ventures Inc., its venture capital subsidiary. For more information, please visit www.broadpointsecurities.com. Forward Looking Statements This press release contains "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. ." These statements are not historical facts but instead represent the Company's belief regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company's control. The Company's forward-looking statements are subject to various risks and uncertainties, including the conditions of the securities markets, generally, and acceptance of the Company's services within those markets and other risks and factors identified from time to time in the Company's filings with the Securities and Exchange Commission. It is possible that the Company's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in its forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements. The Company does not undertake to update any of its forward-looking statements. |
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