Investors
Cash Flow
LADENBURG THALMANN FINANCIAL SERVICES INC. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
| Nine months ended September 30, | ||||||||
| 2009 | 2008 | |||||||
|
Cash flows from operating activities:
|
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|
Net loss
|
$ | (15,127 | ) | $ | (11,957 | ) | ||
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
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|
Depreciation and amortization
|
400 | 357 | ||||||
|
Adjustment to deferred rent
|
(27 | ) | (69 | ) | ||||
|
Amortization of debt discount
|
578 | 603 | ||||||
|
Amortization of intangible assets
|
2,359 | 1,833 | ||||||
|
Amortization of debt issue cost
|
450 | 509 | ||||||
|
Amortization of investment in fund manager
|
51 | 51 | ||||||
|
Deferred income taxes
|
546 | 633 | ||||||
|
Accrued interest
|
14 | 219 | ||||||
|
Non-cash compensation expense
|
5,273 | 4,605 | ||||||
|
|
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|
(Increase) decrease in operating assets:
|
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|
Securities owned
|
2,547 | (2,033 | ) | |||||
|
Receivables from clearing brokers
|
1,949 | 18,698 | ||||||
|
Receivables from other broker-dealers
|
(151 | ) | 12,444 | |||||
|
Other receivables, net
|
(1,458 | ) | 1,757 | |||||
|
Other assets
|
(1,137 | ) | 1,367 | |||||
|
|
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|
Increase (decrease) in operating liabilities:
|
||||||||
|
Securities sold, but not yet purchased
|
(53 | ) | (577 | ) | ||||
|
Accrued compensation
|
2,035 | (1,487 | ) | |||||
|
Commissions and fees payable
|
764 | (931 | ) | |||||
|
Accounts payable and accrued liabilities
|
(110 | ) | (1,283 | ) | ||||
|
|
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|
Net cash (used in) provided by operating activities
|
(1,097 | ) | 24,739 | |||||
|
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Cash flows from investing activities:
|
||||||||
|
Punk Ziegel acquisition, net of cash received
|
— | (2,433 | ) | |||||
|
Triad Advisors acquisition, net of cash received
|
— | (6,478 | ) | |||||
|
Adjustment to cash paid for Investacorp acquisition
|
— | (148 | ) | |||||
|
Purchases of furniture, equipment and leasehold improvements
|
(368 | ) | (385 | ) | ||||
|
Decrease in restricted assets
|
326 | 323 | ||||||
|
|
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|
Net cash used in investing activities
|
(42 | ) | (9,121 | ) | ||||
|
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Cash flows from financing activities:
|
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|
Issuance of common stock under stock plans
|
336 | 736 | ||||||
|
Repurchases of common stock
|
(2,717 | ) | (1,012 | ) | ||||
|
Issuance of notes payable
|
10,000 | — | ||||||
|
Principal payments under revolving credit facility, net of borrowings
|
(2,500 | ) | (12,000 | ) | ||||
|
Principal payments on other notes payable
|
(4,977 | ) | (3,603 | ) | ||||
|
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|
Net cash provided by (used in) financing activities
|
142 | (15,879 | ) | |||||
|
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Net decrease in cash and cash equivalents
|
(997 | ) | (261 | ) | ||||
|
Cash and cash equivalents, beginning of period
|
6,621 | 8,595 | ||||||
|
|
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Cash and cash equivalents, end of period
|
$ | 5,624 | $ | 8,334 | ||||
|
|
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|
Supplemental cash flow information:
|
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|
Interest paid
|
$ | 2,109 | $ | 2,786 | ||||
|
Taxes paid
|
35 | 57 | ||||||
|
|
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|
Non-cash financing transactions:
|
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|
Leasehold improvements financed by landlord in connection with relocation of premises and included in deferred rent
|
2,016 | |||||||
|
Warrants issued for acquisition of customer accounts
|
571 | |||||||
|
|
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|
Acquisition of Punk, Ziegel & Company, L.P.:
|
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|
Assets acquired
|
$ | 4,433 | ||||||
|
Liabilities assumed
|
(1,326 | ) | ||||||
|
|
||||||||
|
Net assets acquired
|
3,107 | |||||||
|
Stock issued in acquisition
|
(435 | ) | ||||||
|
Cash acquired in acquisition
|
(239 | ) | ||||||
|
|
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|
Net cash paid in acquisition
|
$ | 2,433 | ||||||
|
|
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|
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Acquisition of Triad:
|
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|
Assets acquired
|
$ | 24,574 | ||||||
|
Liabilities assumed
|
(2,172 | ) | ||||||
|
|
||||||||
|
Net assets acquired
|
22,402 | |||||||
|
Note issued in acquisition
|
(4,384 | ) | ||||||
|
Stock issued in acquisition
|
(10,427 | ) | ||||||
|
|
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|
Cash paid in acquisition
|
7,591 | |||||||
|
|
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|
Cash acquired in acquisition
|
(1,113 | ) | ||||||
|
|
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|
Net cash paid in acquisition
|
$ | 6,478 | ||||||
|
|
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LADENBURG THALMANN FINANCIAL SERVICES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
| Year Ended December 31, | ||||||||||||
| 2009 | 2008 | 2007 | ||||||||||
Cash flows from operating activities: |
||||||||||||
Net (loss) income |
$ | (18,673 | ) | $ | (20,263 | ) | $ | 9,391 | ||||
Adjustments to reconcile net (loss) income to net cash (used in)
provided by operating activities: |
||||||||||||
Depreciation and amortization |
618 | 538 | 387 | |||||||||
Write-off of furniture, fixtures and leasehold improvements, net |
— | — | 115 | |||||||||
Adjustment to deferred rent |
(76 | ) | (98 | ) | 14 | |||||||
Amortization of debt discount |
721 | 845 | 304 | |||||||||
Amortization of debt issue cost |
521 | 668 | — | |||||||||
Amortization of intangible assets |
3,116 | 2,754 | 1,104 | |||||||||
Deferred income taxes |
946 | 780 | — | |||||||||
Accrued interest |
172 | 192 | 671 | |||||||||
Non-cash compensation expense |
7,534 | 6,265 | 6,694 | |||||||||
Loss on extinguishment of debt |
— | — | 1,833 | |||||||||
(Increase) decrease in operating assets, net of effects of
acquisitions: |
||||||||||||
Securities owned |
2,619 | (31 | ) | (2,386 | ) | |||||||
Receivables from clearing brokers |
1,152 | 24,562 | (9,749 | ) | ||||||||
Receivables from other broker-dealers |
(329 | ) | 15,511 | (9,559 | ) | |||||||
Other receivables, net |
(1,780 | ) | (2,116 | ) | (1,569 | ) | ||||||
Other assets |
(166 | ) | 1,311 | 1,563 | ||||||||
Increase (decrease) in operating liabilities, net of effects of
acquisitions: |
||||||||||||
Securities sold, but not yet purchased |
(82 | ) | (865 | ) | (1,096 | ) | ||||||
Accrued compensation |
638 | (3,876 | ) | 2,929 | ||||||||
Commissions and fees payable |
754 | (645 | ) | 646 | ||||||||
Accounts payable and accrued liabilities |
18 | (1,767 | ) | (4,152 | ) | |||||||
Net cash (used in) provided by operating activities |
(2,297 | ) | 23,765 | (2,860 | ) | |||||||
Cash flows from investing activities: |
||||||||||||
Acquisition of relationships and customer accounts |
— | — | (92 | ) | ||||||||
Adjustment to intangible assets |
— | 212 | — | |||||||||
Payment for Triad acquisition, net of cash received |
— | (5,843 | ) | — | ||||||||
Payment for Punk Ziegel acquisition, net of cash received |
— | (2,461 | ) | — | ||||||||
Payment for Investacorp acquisition, net of cash received |
— | (55 | ) | (25,044 | ) | |||||||
Purchases of furniture, equipment and leasehold improvements |
(399 | ) | (546 | ) | (395 | ) | ||||||
Proceeds from sales of exchange memberships |
— | 120 | — | |||||||||
Decrease in restricted assets |
351 | 318 | 1,135 | |||||||||
Other |
— | (4 | ) | 3 | ||||||||
Net cash used in investing activities |
(48 | ) | (8,259 | ) | (24,393 | ) | ||||||
Cash flows from financing activities: |
||||||||||||
Issuance of common stock other than private equity offerings |
360 | 812 | 1,385 | |||||||||
Shares tendered for withholding taxes on exercise of stock
options |
— | — | (1,122 | ) | ||||||||
Repurchases of common stock |
(2,717 | ) | (1,060 | ) | (612 | ) | ||||||
Issuance of subordinated notes payable |
— | — | 72,000 | |||||||||
Repayment of subordinated notes payable |
— | — | (72,000 | ) | ||||||||
Issuance of other notes payable |
10,000 | — | 30,000 | |||||||||
Principal borrowings (payments) under revolving credit facility,
net |
450 | (12,000 | ) | — | ||||||||
Principal payments on other notes payable |
(6,667 | ) | (5,232 | ) | (786 | ) | ||||||
Net cash provided by (used in) financing activities |
1,426 | (17,480 | ) | 28,865 | ||||||||
Net (decrease) increase in cash and cash equivalents |
(919 | ) | (1,974 | ) | 1,612 | |||||||
Cash and cash equivalents, beginning of period |
6,621 | 8,595 | 6,983 | |||||||||
Cash and cash equivalents, end of period |
$ | 5,702 | $ | 6,621 | $ | 8,595 | ||||||
Supplemental cash flow information: |
||||||||||||
Interest paid |
$ | 2,524 | $ | 3,440 | $ | 2,766 | ||||||
Taxes paid |
60 | 390 | 193 | |||||||||
Non-cash investing and financing transactions: |
||||||||||||
Warrants issued for acquisition of customer accounts |
— | $ | 571 | $ | — | |||||||
Lease commitment capitalized as part of Capitalink acquisition |
— | — | 463 | |||||||||
Issuance of shares of common stock in exchange for $5,000 of
promissory notes payable to former parent |
— | — | 6,833 | |||||||||
Warrant issued in connection with credit agreement |
— | — | 3,200 | |||||||||
Leasehold improvements financed by landlord in connection with
relocation of premises and included in deferred rent |
— | 2,500 | — | |||||||||
Acquisition of Investacorp and affiliates: |
||||||||||||
Assets acquired |
— | — | $ | 50,849 | ||||||||
Liabilities assumed ($6,676) and note payable issued to former
principal shareholder ($13,550) |
— | — | (20,226 | ) | ||||||||
Cash paid in acquisition |
— | — | 30,623 | |||||||||
Cash acquired in acquisition |
— | — | (5,579 | ) | ||||||||
Net cash paid in acquisition |
— | — | $ | 25,044 | ||||||||
Acquisition of Punk Ziegel: |
||||||||||||
Assets acquired |
— | $ | 4,174 | — | ||||||||
Liabilities assumed |
— | (1,039 | ) | — | ||||||||
Net assets acquired |
— | 3,135 | — | |||||||||
Stock issued in acquisition |
— | (435 | ) | — | ||||||||
Cash paid in acquisition |
— | 2,700 | ||||||||||
Cash acquired in acquisition |
— | (239 | ) | — | ||||||||
Net cash paid in acquisition |
— | $ | 2,461 | — | ||||||||
Acquisition of Triad Advisors: |
||||||||||||
Assets acquired |
— | $ | 23,939 | — | ||||||||
Liabilities assumed |
— | (2,172 | ) | — | ||||||||
Net assets acquired |
— | 21,767 | — | |||||||||
Note issued in acquisition |
— | (4,384 | ) | — | ||||||||
Stock issued in acquisition |
— | (10,427 | ) | — | ||||||||
Cash paid in acquisition |
— | 6,956 | — | |||||||||
Cash acquired in acquisition |
— | (1,113 | ) | — | ||||||||
Net cash paid in acquisition |
— | $ | 5,843 | — | ||||||||
