Quarterly report pursuant to sections 13 or 15(d)

Segment Information

v2.4.0.6
Segment Information
 3 Months Ended
Mar. 31, 2013
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 fair value of contingent consideration related to acquisitions, gains or losses on sales of assets 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. 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, 2013 and 2012 was as follows:


 
Independent Brokerage and Advisory Services
 
Ladenburg
 
Corporate
 
Total
2013
 
 
 
 
 
 
 
Revenues
$
169,836

 
$
17,400

 
$
69

 
$
187,305

Pre-tax income (loss)
1,229

 
3,881

 
(4,464
)
(1) 
646

EBITDA, as adjusted(2)
12,296

 
4,246

 
(2,581
)
 
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

 
 
 
 
 
 
 
 
2012

 
 
 
 
 

Revenues
$
143,804

 
$
10,876

 
$
35

 
$
154,715

Pre-tax income (loss)
953

 
(208
)
 
(3,116
)
(1) 
(2,371
)
EBITDA, as adjusted(2)
6,464

 
288

 
(1,444
)
 
5,308

Identifiable assets
316,887

 
18,762

 
3,696

 
339,345

Depreciation and amortization
3,823

 
223

 
17

 
4,063

Interest
4,966

 
3

 
1,091

 
6,060

Capital expenditures
690

 
11

 
—

 
701

Non-cash compensation
528

 
272

 
564

 
1,364

 
 
 
 
 
 
 
 

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

(2) The following table reconciles EBITDA, as adjusted, to pre-tax income (loss) for the three months ended
March 31, 2013 and 2012:

 
Three months ended March 31,
 EBITDA, as adjusted
2013
 
2012
Independent Brokerage and Advisory Services
$
12,296

 
$
6,464

Ladenburg
4,246

 
288

Corporate
(2,581
)
 
(1,444
)
Total segments
13,961

 
5,308

 
 
 
 
Adjustments:
 
 
 
Interest income
39

 
45

Change in fair value of contingent consideration
23

 
5,555

Interest expense
(6,236
)
 
(6,060
)
Depreciation and amortization
(3,907
)
 
(4,063
)
Non-cash compensation expense
(1,413
)
 
(1,364
)
Amortization of retention loans
(1,808
)
 
(1,792
)
Loss attributable to noncontrolling interest
(13
)
 
—

Pre-tax income (loss)
$
646

 
$
(2,371
)