Annual report pursuant to Section 13 and 15(d)

Revenue from Contracts with Customers (Tables)

v3.19.1
Revenue from Contracts with Customers (Tables)
12 Months Ended
Dec. 31, 2018
Revenue from Contract with Customer [Abstract]  
Disaggregation of Revenue
In the following table, revenue is disaggregated by service line and segment:

For the Twelve Months Ended December 31, 2018
 
Independent Advisory and Brokerage Services
 
Ladenburg
 
Insurance Brokerage
 
Corporate
 
Total
Commissions
 
$
540,523

 
$
11,468

 
$
144,340

 
$

 
$
696,331

Advisory fees
 
467,044

 
7,170

 

 
209

 
474,423

Investment banking
 
947

 
56,163

 

 
(854
)
 
56,256

Principal transactions
 
22

 
(524
)
 

 
174

 
(328
)
Interest and dividends
 
2,566

 
839

 

 
1,566

 
4,971

Service fees
 
116,047

 
2,495

 

 
888

 
119,430

Other income
 
33,894

 
483

 
2,787

 
2,889

 
40,053

Total revenues
 
$
1,161,043

 
$
78,094

 
$
147,127

 
$
4,872

 
$
1,391,136

Contract Balances

The following table provides information about contract assets and contract liabilities from contracts with customers. Estimated trailing commissions are included in other receivables, net while estimated expenses on trailing commissions are included in commissions and fees payable on the consolidated statements of financial condition:

 
 
As of December 31, 2018
 
As of January 1, 2018 ( Adoption Date)
Contract assets - Insurance trailing commissions
 
$
64,300

 
$
58,786

Contract liabilities - Insurance trailing commissions
 
31,854

 
29,395


Impact on Financial Statements
Consolidated Statement of Financial Condition
 
 
 
 
 
 
 
 
 
As Reported
 
Adjustments
 
Adjusted
 
 
December 31, 2017
 
Investment Banking
Insurance Renewals
Costs to obtain or fulfill a contract
 
January 1, 2018
ASSETS
 
(Audited)
 
 
 
 
 
 
Cash and cash equivalents
 
$
172,103

 
$

$

$

 
$
172,103

Securities owned, at fair value
 
3,881

 



 
3,881

Receivables from clearing brokers
 
48,543

 



 
48,543

Receivables from other broker-dealers
 
2,822

 



 
2,822

Notes receivable from financial advisors, net
 
47,369

 


(40,566
)
 
6,803

Other receivables, net
 
60,707

 
(137
)
58,786


 
119,356

Fixed assets, net
 
23,621

 



 
23,621

Restricted assets
 
760

 



 
760

Intangible assets, net
 
103,611

 

(23,645
)

 
79,966

Goodwill
 
124,210

 



 
124,210

Contract acquisition costs, net
 

 


61,340

 
61,340

Cash surrender value of life insurance
 
12,711

 



 
12,711

Other assets
 
31,687

 
25



 
31,712

Total assets
 
$
632,025

 
$
(112
)
$
35,141

$
20,774

 
$
687,828

LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
Securities sold, but not yet purchased, at fair value
 
$
231

 
$

$

$

 
$
231

Accrued compensation
 
33,343

 
(110
)


 
33,233

Commissions and fees payable
 
67,221

 

29,395


 
96,616

Accounts payable and accrued liabilities
 
40,478

 
(104
)

(1,133
)
 
39,241

Deferred rent
 
2,151

 



 
2,151

Deferred income taxes
 
2,968

 
28

1,462

1,480

 
5,938

Deferred compensation liability
 
18,161

 



 
18,161

Accrued interest
 
232

 



 
232

Notes payable
 
96,849

 



 
96,849

Total liabilities
 
$
261,634

 
$
(186
)
$
30,857

$
347

 
$
292,652

Commitments and contingencies
 
 
 
 
 
 
 
 
Shareholders' equity:
 
 
 
 
 
 
 
 
Preferred stock
 
2

 



 
2

Common stock
 
20

 



 
20

Additional paid-in capital
 
520,135

 



 
520,135

Accumulated deficit
 
(149,778
)
 
74

4,284

20,416

 
(125,004
)
Total shareholders' equity of the Company
 
370,379

 
74

4,284

20,416

 
395,153

Noncontrolling interest
 
12

 


11

 
23

Total shareholders' equity
 
370,391

 
74

4,284

20,427

 
395,176

Total liabilities and shareholders' equity
 
$
632,025

 
$
(112
)
$
35,141

$
20,774

 
$
687,828

Consolidated Statement of Financial Condition
 
 
As of December 31, 2018
 
 
 
 
As Reported
 
Balances without the adoption of ASC 606
 
Effects of Change Higher/(Lower)
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
182,693

 
$
182,693

 
$

Securities owned, at fair value
 
10,923

 
10,923

 

Receivables from clearing brokers
 
24,068

 
24,068

 

Receivables from other broker-dealers
 
7,078

 
7,078

 

Notes receivable from financial advisors, net
 
5,809

 
57,417

 
(51,608
)
Other receivables, net
 
133,242

 
69,209

 
64,033

Fixed assets, net
 
29,994

 
29,994

 

Restricted assets
 
6,588

 
6,588

 

Intangible assets, net
 
73,064

 
91,454

 
(18,390
)
Goodwill
 
126,079

 
126,079

 

Contract acquisition costs, net
 
80,726

 

 
80,726

Cash surrender value of life insurance
 
11,406

 
11,406

 

Income taxes receivable
 
2,156

 

 
2,156

Other assets
 
47,078

 
46,578

 
500

Total assets
 
$
740,904

 
$
663,487

 
$
77,417

 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
Securities sold, but not yet purchased, at market value
 
$
2,575

 
$
2,575

 
$

Accrued compensation
 
39,192

 
39,257

 
(65
)
Commissions and fees payable
 
105,306

 
73,452

 
31,854

Accounts payable and accrued liabilities
 
48,813

 
41,026

 
7,787

Deferred rent
 
2,956

 
2,956

 

Deferred income taxes
 
14,068

 
9,742

 
4,326

Deferred compensation liability
 
20,622

 
20,622

 

Accrued interest
 
123

 
123

 

Notes payable
 
254,072

 
254,072

 

Total liabilities
 
$
487,727

 
$
443,825

 
$
43,902

 
 
 
 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
Shareholders' equity:
 
 
 
 
 
 
Preferred stock
 
2

 
2

 

Common stock
 
14

 
14

 

Additional paid-in capital
 
344,356

 
344,356

 

Accumulated deficit
 
(91,246
)
 
(124,750
)
 
33,504

 
 
 
 
 
 
 
Total shareholders' equity of the Company
 
253,126

 
219,622

 
33,504

 
 
 
 
 
 
 
Noncontrolling interest
 
51

 
40

 
11

 
 
 
 
 
 
 
Total shareholders' equity
 
253,177

 
219,662

 
33,515

 
 
 
 
 
 
 
Total liabilities and shareholders' equity
 
$
740,904

 
$
663,487

 
$
77,417




Consolidated Statement of Operations
 
 
 
 
 
 
 
Twelve Months Ended December 31, 2018
 
 
 
 
As Reported
 
Amounts without the adoption of ASC 606
 
Effects of Change Higher/(Lower)
Revenues:
 
 
 
 
 
 
Commissions
 
$
696,331

 
$
609,400

 
$
86,931

Advisory fees
 
474,423

 
695,094

 
(220,671
)
Investment banking
 
56,256

 
51,335

 
4,921

Principal transactions
 
(328
)
 
(346
)
 
18

Interest and dividends
 
4,971

 
4,964

 
7

Service fees
 
119,430

 
119,430

 

Other income
 
40,053

 
40,147

 
(94
)
Total revenues
 
1,391,136

 
1,520,024

 
(128,888
)
Expenses:
 
 
 
 
 
 
Commissions and fees
 
976,596

 
1,113,389

 
(136,793
)
Compensation and benefits
 
194,045

 
195,433

 
(1,388
)
Non-cash compensation
 
5,882

 
5,882

 

Brokerage, communication and clearance fees
 
16,088

 
15,525

 
563

Rent and occupancy, net of sublease revenue
 
9,977

 
9,977

 

Professional services
 
21,927

 
20,022

 
1,905

Interest
 
10,796

 
10,756

 
40

Depreciation and amortization
 
24,039

 
29,294

 
(5,255
)
Acquisition-related expenses
 
1,010

 
1,010

 

Amortization of retention and forgivable loans
 
417

 
13,890

 
(13,473
)
Amortization of contract acquisition costs
 
9,671

 

 
9,671

Other
 
73,285

 
73,805

 
(520
)
Total expenses
 
1,343,733

 
1,488,983

 
(145,250
)
Income before item shown below
 
47,403

 
31,041

 
16,362

Change in fair value of contingent consideration
 
(238
)
 
(238
)
 

Income before income taxes
 
47,165

 
30,803

 
16,362

Income tax expense
 
13,379

 
5,745

 
7,634

Net income
 
33,786

 
25,058

 
8,728

Net income attributable to noncontrolling interest
 
28

 
28

 

Net income attributable to the Company
 
$
33,758

 
$
25,030

 
$
8,728

Dividends declared on preferred stock
 
(34,031
)
 
(34,031
)
 

Net loss available to common shareholders
 
$
(273
)
 
$
(9,001
)
 
$
8,728

Net loss per share available to common shareholders (basic)
 
$
(0.00
)
 
$
(0.05
)
 
$
0.05

Net loss per share available to common shareholders (diluted)
 
$
(0.00
)
 
$
(0.05
)
 
$
0.05

Weighted average common shares used in computation of per share data:
 
 
 
 
 
 
       Basic
 
194,562,916

 
194,562,916

 

       Diluted
 
194,562,916

 
194,562,916