Annual report pursuant to Section 13 and 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONSOLIDATED STATEMENTS OF CASH FLOWS
$ in Thousands
 12 Months Ended
Dec. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Dec. 31, 2016
USD ($)
Cash flows from operating activities:      
Net income (loss) $ 33,786 $ 7,682 $ (22,311)
Adjustments to reconcile net income (loss) to      
Change in fair value of contingent consideration 238 (19) 216
Adjustment to deferred rent 805 387 213
Amortization of intangible assets 15,578 21,327 20,703
Depreciation and other amortization 8,461 7,508 7,631
Amortization of debt discount 432 449 620
Amortization of debt issue cost 591 41 253
Amortization of retention and forgivable loans 417 7,396 5,472
Amortization of contract acquisition costs 9,671 0 0
Deferred income taxes 8,130 (7,662) 9,096
Benefit attributable to reduction of goodwill 541 0 0
Non-cash interest expense on forgivable loan 0 24 43
Gain on forgiveness of accrued interest under forgivable loans (79) (295) (408)
Gain on forgiveness of principal of note payable under forgivable loans (2,143) (2,143) (2,143)
Non-cash compensation expense 5,882 5,539 5,311
Loss on write-off of furniture, fixtures and leasehold improvements, net 26 21 1
(Increase) decrease in operating assets:      
Securities owned, at fair value (7,042) (338) 536
Receivables from clearing brokers 24,475 (7,051) 2,974
Receivables from other broker-dealers (4,256) (1,969) 1,297
Other receivables, net (13,886) (6,073) (6,070)
Contract acquisition costs, net (29,057) 0 0
Notes receivable from financial advisors, net 577 (21,563) (11,116)
Cash surrender value of life insurance 1,305 (2,501) (963)
Income taxes receivable (2,156) 0 0
Other assets (15,366) 219 1,191
Increase (decrease) in operating liabilities:      
Securities sold, but not yet purchased, at fair value 2,344 (151) 144
Accrued compensation 5,959 7,044 (2,816)
Accrued interest (30) 222 (177)
Commissions and fees payable 8,690 6,627 599
Deferred compensation liability 2,461 914 36
Accounts payable and accrued liabilities 7,018 580 3,914
Net cash provided by operating activities 63,372 16,215 14,246
Cash flows from investing activities:      
Other business acquisitions 0 (179) (4,097)
Purchases of fixed assets (14,502) (9,896) (7,132)
Purchase of intangible assets (6) 0 0
Net cash used in investing activities (17,808) (10,075) (11,229)
Cash flows from financing activities:      
Issuance of Series A preferred stock (273) 28,095 27,580
Issuance of common stock 4,266 9,066 3,061
Series A preferred stock dividends paid (34,031) (32,482) (30,438)
Common stock dividends paid (8,794) (3,880) 0
Repurchases and retirement of common stock (69,746) (5,293) (14,749)
Repurchase of stock option award for cash (3,000) (850) 0
Additional issuance costs related to SSN notes 0 (40) 0
Issuance of senior notes 104,375 73,197 0
Borrowings on term loan 0 8,000 0
Principal repayments on notes payable (15,253) (7,039) (7,516)
Principal repayments under a revolving credit facility, net 0 0 (114)
Bank loan and revolver repayments (6,690) (1,992) (628)
Third party investment in subsidiary 0 0 40
Net cash (used in) provided by financing activities (29,146) 66,782 (22,764)
Net increase (decrease) in cash and cash equivalents 16,418 72,922 (19,747)
Cash and cash equivalents including restricted cash, beginning of period 172,863 99,941 119,688
Cash and cash equivalents 182,693 172,103 98,930
Restricted cash 6,588 760 1,011
Cash and cash equivalents including restricted cash, end of period 189,281 172,863 99,941
Supplemental cash flow information:      
Interest paid 9,870 1,974 3,523
Taxes paid 6,956 1,487 1,036
Non-cash financing activities:      
Issuance of 7.25% notes for repurchase of common stock 76,350 0 0
Cancellation of promissory notes as consideration for exercise price of warrants 0 0 17,976
Kestler Financial Group, Inc      
Cash flows from investing activities:      
Net cash paid in acquisition (2,850) 0 0
Supplemental cash flow information:      
Net cash paid in acquisition 2,850 0 0
Four Seasons Financial Group      
Cash flows from investing activities:      
Net cash paid in acquisition (450) 0 0
Supplemental cash flow information:      
Assets acquired 2,345 0 0
Liabilities assumed (1,523) 0 0
Net assets acquired 822 0 0
Promissory note (372) 0 0
Net cash paid in acquisition 450 0 0
Acquisition of Wall Street Financial Group      
Cash flows from investing activities:      
Net cash paid in acquisition 0 0 (1,192)
Supplemental cash flow information:      
Assets acquired 0 0 3,468
Liabilities assumed 0 0 (2,276)
Net cash paid in acquisition 0 0 1,192
Acquisition of Foothill Securities Inc      
Cash flows from investing activities:      
Net cash paid in acquisition 0 179 (2,905)
Supplemental cash flow information:      
Assets acquired 0 0 5,571
Liabilities assumed 0 (179) (2,666)
Net cash paid in acquisition 0 (179) 2,905
Acquisition of Kestler Financial Group      
Cash flows from investing activities:      
Net cash paid in acquisition (2,850) 0 0
Supplemental cash flow information:      
Assets acquired 9,093 0 0
Liabilities assumed (793) 0 0
Net assets acquired 8,300 0 0
Promissory note (5,450) 0 0
Net cash paid in acquisition $ 2,850 $ 0 $ 0