Annual report pursuant to Section 13 and 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Cash flows from operating activities:      
Net income (loss) $ 7,682 $ (22,311) $ (11,213)
Adjustments to reconcile net income (loss) to      
Change in fair value of contingent consideration (19) 216 (55)
Adjustment to deferred rent 387 213 37
Amortization of intangible assets 21,327 20,703 20,650
Depreciation and other amortization 7,508 7,631 6,427
Loss on extinguishment of debt 0 0 252
Amortization of debt discount 449 620 666
Amortization of debt issue cost 41 253 376
Amortization of retention and forgivable loans 7,396 5,472 9,238
Deferred income taxes (7,662) 9,096 (400)
Benefit attributable to reduction of goodwill 0 0 78
Non-cash interest expense on forgivable loan 24 43 21
Gain on forgiveness of accrued interest under forgivable loans (295) (408) (619)
Gain on forgiveness of principal of note payable under forgivable loans (2,143) (2,143) (3,928)
Non-cash compensation expense 5,539 5,311 8,759
Loss on write-off of receivable from subtenant 0 0 855
Loss on write-off of furniture, fixtures and leasehold improvements, net 21 1 9
(Increase) decrease in operating assets, net of effects of acquisitions:      
Securities owned, at fair value (338) 536 1,989
Receivables from clearing brokers (7,051) 2,974 (5,076)
Receivables from other broker-dealers (1,969) 1,297 (362)
Other receivables, net (6,073) (6,070) 19
Notes receivable from financial advisors, net (21,563) (11,116) (9,828)
Cash surrender value of life insurance (2,501) (963) 1,172
Other assets 219 1,191 (5,381)
Increase (decrease) in operating liabilities, net of effects of acquisitions:      
Securities sold, but not yet purchased, at fair value (151) 144 8
Accrued compensation 7,044 (2,816) 5,632
Accrued interest 222 (177) 292
Commissions and fees payable 6,627 599 2,139
Deferred compensation liability 914 36 (429)
Accounts payable and accrued liabilities 580 3,914 (2,009)
Net cash provided by operating activities 16,215 14,246 19,319
Cash flows from investing activities:      
Net cash paid in acquisition 0 0 (16,919)
Other business acquisitions (179) (4,097) (2,603)
Purchases of fixed assets (9,896) (7,132) (8,298)
Decrease (increase) in restricted assets 251 0 (391)
Net cash used in investing activities (9,824) (11,229) (28,211)
Cash flows from financing activities:      
Issuance of Series A preferred stock 28,095 27,580 84,380
Issuance of common stock 9,066 3,061 2,016
Series A preferred stock dividends paid (32,482) (30,438) (28,108)
Common stock dividends paid (3,880) 0 0
Repurchases and retirement of common stock (5,293) (14,749) (16,355)
Repurchase of stock option award for cash (850) 0 0
Additional issuance costs related to SSN notes (40) 0 0
Issuance of senior notes 73,197 0 0
Borrowings on term loan 8,000 0 0
Principal repayments on notes payable (7,039) (7,516) (17,639)
Principal (repayments) borrowings under a revolving credit facility, net 0 (114) 495
Bank loan and revolver repayments (1,992) (628) (387)
Third party investment in subsidiary 0 40 80
Net cash provided (used in) by financing activities 66,782 (22,764) 24,482
Net increase (decrease) in cash and cash equivalents 73,173 (19,747) 15,590
Cash and cash equivalents, beginning of period 98,930 118,677 103,087
Cash and cash equivalents, end of period 172,103 98,930 118,677
Supplemental cash flow information:      
Interest paid 1,974 3,523 3,807
Taxes paid 1,487 1,036 2,313
Net cash paid in acquisition 0 0 (16,919)
Non-cash financing activities:      
Cancellation of promissory notes as consideration for exercise price of warrants 0 17,976 0
Acquisition of SSN:      
Cash flows from investing activities:      
Net cash paid in acquisition 0 0 (16,919)
Assets acquired 0 0 61,759
Liabilities assumed 0 0 (14,472)
Net assets acquired 0 0 47,287
Payable to seller 0 0 (3,590)
Promissory note 0 0 (18,697)
Cash paid in acquisition 0 0 25,000
Cash acquired in acquisition 0 0 (8,081)
Net cash paid in acquisition 0 0 (16,919)
Acquisition of Dalton:      
Cash flows from investing activities:      
Net cash paid in acquisition 0 0 (2,100)
Assets acquired 0 0 2,689
Payable to seller 0 0 (589)
Net cash paid in acquisition 0 0 (2,100)
Acquisition of Select:      
Cash flows from investing activities:      
Net cash paid in acquisition 0 0 (503)
Assets acquired 0 0 2,019
Payable to seller 0 0 (1,516)
Net cash paid in acquisition 0 0 (503)
Acquisition of Wall Street Financial Group:      
Cash flows from investing activities:      
Net cash paid in acquisition 0 (1,192) 0
Assets acquired 0 3,468 0
Liabilities assumed 0 (2,276) 0
Net cash paid in acquisition 0 (1,192) 0
Acquisition of Foothill Securities Inc:      
Cash flows from investing activities:      
Net cash paid in acquisition 179 (2,905) 0
Assets acquired 0 5,571 0
Liabilities assumed (179) (2,666) 0
Net cash paid in acquisition $ 179 $ (2,905) $ 0