Quarterly report pursuant to sections 13 or 15(d)

Segment Information

v2.4.0.8
Segment Information
 3 Months Ended
Mar. 31, 2014
Segment Reporting [Abstract]  
Segment Information
Segment Information

The Company has two operating segments. The independent brokerage and advisory services segment includes the broker-dealer and investment advisory services provided by Securities America, Triad and Investacorp to their independent contractor financial advisors and wealth management services provided by Premier Trust. The Ladenburg segment includes the investment banking, sales and trading and asset management services and investment activities conducted by Ladenburg and LTAM.

Earnings before interest, taxes, depreciation and amortization, or EBITDA, adjusted for acquisition-related expense, amortization of retention loans and change in the fair value of contingent consideration related to acquisitions, loss on extinguishment of debt, interest income and non-cash compensation expense, is the primary profit measure the Company's management uses in evaluating financial performance for its reportable segments. EBITDA, as adjusted, is considered a non-GAAP financial measure as defined by Regulation G promulgated by the SEC under the Securities Act of 1933, as amended. The Company considers EBITDA, as adjusted, important in evaluating its financial performance on a consistent basis across various periods. Due to the significance of non-cash and non-recurring items, EBITDA, as adjusted, enables the Company's Board of Directors and management to monitor and evaluate the business on a consistent basis. The Company uses EBITDA, as adjusted, as a primary measure, among others, to analyze and evaluate financial and strategic planning decisions regarding future operating investments and potential acquisitions. The Company believes that EBITDA, as adjusted, eliminates items that are not indicative of its core operating performance, such as amortization of retention loans for the Securities America acquisition, or do not involve a cash outlay, such as stock-related compensation, which is expected to remain a key element in our long-term incentive compensation program. EBITDA, as adjusted, should be considered in addition to, rather than as a substitute for, pre-tax income, net income and cash flows from operating activities.

Segment information for the three months ended March 31, 2014 and 2013 was as follows:


 
Independent
Brokerage and
Advisory Services
 
Ladenburg
 
Corporate
 
Total
2014
 
 
 
 
 
 
 
Revenues
$
188,402

 
$
23,337

 
$
79

 
$
211,818

Pre-tax income (loss)
2,066

 
6,364

 
(3,573
)
(1) 
4,857

EBITDA, as adjusted(2)
10,461

 
6,655

 
(2,543
)
 
14,573

Identifiable assets
311,182

 
49,612

 
7,633

 
368,427

Depreciation and amortization
3,700

 
138

 
—

 
3,838

Interest
1,573

 
3

 
317

 
1,893

Capital expenditures
1,448

 
442

 
147

 
2,037

Non-cash compensation
1,079

 
153

 
695

 
1,927

 
 
 
 
 
 
 
 
2013

 
 
 
 
 

Revenues
$
169,836

 
$
17,400

 
$
69

 
$
187,305

Pre-tax income (loss)(2)
1,005

 
3,839

 
(4,198
)
(1) 
646

EBITDA, as adjusted(2)(3)
12,072

 
4,204

 
(2,315
)
 
13,961

Identifiable assets
313,635

 
23,855

 
2,556

 
340,046

Depreciation and amortization
3,684

 
206

 
17

 
3,907

Interest
4,956

 
3

 
1,277

 
6,236

Capital expenditures
830

 
82

 
—

 
912

Non-cash compensation
668

 
156

 
589

 
1,413

 
 
 
 
 
 
 
 

(1) 
Includes interest on revolving credit and forgivable loan notes, compensation, professional fees and other general and administrative expenses.

(2) 
Management fees paid by the Company's operating segments to the Company have been reclassified within segments to conform to the current period’s presentation.

(3) 
    The following table reconciles EBITDA, as adjusted, to pre-tax income for the three months ended March 31, 2014 and 2013:


 
Three months ended March 31.
EBITDA, as adjusted
2014
 
2013
Independent Brokerage and Advisory Services
$
10,461

 
$
12,072

Ladenburg
6,655

 
4,204

Corporate
(2,543
)
 
(2,315
)
Total Segments
14,573

 
13,961

 
 
 
 
Adjustments:
 
 
 
Interest Income
53

 
39

Change in fair value of contingent consideration
12

 
23

Loss on extinguishment of debt
(314
)
 
—

Interest expense
(1,893
)
 
(6,236
)
Depreciation and amortization
(3,838
)
 
(3,907
)
Non-cash compensation expense
(1,927
)
 
(1,413
)
Amortization of retention loans
(1,788
)
 
(1,808
)
Net loss attributable to noncontrolling interest
(21
)
 
(13
)
Pre-tax income
$
4,857

 
$
646