Investors
Cash Flow
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in
thousands)
(Unaudited)
|
Six months ended June 30,
|
||||||||
|
2010
|
2009
|
|||||||
|
Cash
flows from operating activities:
|
||||||||
|
Net
loss
|
$ | (6,632 | ) | $ | (11,399 | ) | ||
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||
|
Depreciation
and amortization
|
315 | 286 | ||||||
|
Adjustment
to deferred rent
|
(4 | ) | — | |||||
|
Amortization
of debt discount
|
200 | 409 | ||||||
|
Amortization
of intangible assets
|
1,514 | 1,584 | ||||||
|
Amortization
of debt issue cost
|
141 | 320 | ||||||
|
Deferred
income taxes
|
366 | 361 | ||||||
|
Accrued
interest
|
269 | 39 | ||||||
|
Non-cash
compensation expense
|
3,365 | 3,585 | ||||||
|
Disposal
of furniture, equipment and leasehold improvements
|
4 | — | ||||||
|
(Increase)
decrease in operating assets:
|
||||||||
|
Securities
owned
|
(1,088 | ) | 1,209 | |||||
|
Receivables
from clearing brokers
|
77 | 1,569 | ||||||
|
Receivables
from other broker-dealers
|
(773 | ) | (116 | ) | ||||
|
Other
receivables, net
|
760 | (1,468 | ) | |||||
|
Other
assets
|
391 | 596 | ||||||
|
Increase
(decrease) in operating liabilities:
|
||||||||
|
Securities
sold, but not yet purchased
|
— | (39 | ) | |||||
|
Accrued
compensation
|
(83 | ) | (329 | ) | ||||
|
Commissions
and fees payable
|
(368 | ) | (474 | ) | ||||
|
Accounts
payable and accrued liabilities
|
(1,332 | ) | 409 | |||||
|
Net
cash used in operating activities
|
(2,878 | ) | (3,458 | ) | ||||
|
Cash
flows from investing activities:
|
||||||||
|
Purchases
of furniture, equipment and leasehold improvements
|
(123 | ) | (58 | ) | ||||
|
Decrease
in restricted assets
|
150 | 301 | ||||||
|
Net
cash provided by investing activities
|
27 | 243 | ||||||
|
Cash
flows from financing activities:
|
||||||||
|
Issuance
of common stock in private equity offering
|
13,209 | — | ||||||
|
Issuance
of common stock under stock plans
|
104 | 186 | ||||||
|
Repurchases
of common stock
|
(64 | ) | (2,717 | ) | ||||
|
Principal
(payments) borrowings under revolving credit facility, net
|
(6,700 | ) | 6,350 | |||||
|
Principal
payments on other notes payable
|
(3,427 | ) | (3,302 | ) | ||||
|
Net
cash provided by financing activities
|
3,122 | 517 | ||||||
|
Net
increase (decrease) in cash and cash equivalents
|
271 | (2,698 | ) | |||||
|
Cash
and cash equivalents, beginning of period
|
5,702 | 6,621 | ||||||
|
Cash
and cash equivalents, end of period
|
$ | 5,973 | $ | 3,923 | ||||
|
Supplemental
cash flow information
|
||||||||
|
Interest
paid
|
$ | 1,269 | $ | 1,381 | ||||
|
Taxes
paid
|
16 | 34 | ||||||
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 | — | ||||||||
