National Investment Managers Inc. First Quarter EBITDA up 100.5% Year over Year
First Quarter Revenue Increases 41.4% to $12.6 Million, Also a Record
May 15, 2009 12:44:00 PM
Copyright Business Wire 2009
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View Additional ProfilesDUBLIN, Ohio--(BUSINESS WIRE)-- National Investment Managers Inc. (OTC BB: NIVM), a nationally-based and regionally-operated retirement plan design, consulting and administration company, announced its financial results for the quarter ended March 31, 2009.
Financial highlights for first quarter of 2009 include:
-- Revenues of $12.6 million compared with revenues of $8.9 million in
2008, an increase of $3.7 million, or 41.4%;
-- EBITDA SBC of $2.0 million in 2009 compared with EBITDA SBC of $1.0
million in the same period in 2008, an increase of approximately $1.0
million, or 100.5%;
-- Positive cash flow from operations in the first quarter of $1.8 million.
Revenues for the three months ended March 31, 2009, increased to a first-quarter record $12,643,246 compared to $8,940,459 for the same period in 2008, an increase of $3,702,787, or 41.4%. The Company's earnings before interest, taxes, depreciation, amortization, changes in derivative financial instruments and stock-based compensation (EBITDA SBC) was $2,011,364 for the first quarter 2009, up from an EBITDA SBC of $1,003,203 in the same period 2008, an improvement of $1,008,161, or 100.5%.
Net loss for the quarter ended March 31, 2009 improved to approximately $268 thousand with preferred dividends of approximately $495 thousand, resulting in a net loss available to common shareholders of approximately $763 thousand or $0.02 per fully diluted share. For the same period in 2008, the net loss stood at approximately $1.2 million with approximately $497 thousand in preferred dividends, resulting in a net loss available to common shareholders of approximately $1.7 million, or $0.05 per fully diluted share. The weighted average number of common shares outstanding stood at roughly 39.6 million at the end of first quarter 2009 and 36.3 million at the end of first quarter 2008.
Steven Ross, CEO of National Investment Managers said, "In the midst of a difficult economy, our record revenues and significant year-over-year improvement in operating performance are clear indicators of the strength and stability in our business model. The dramatic improvement in first quarter financial results underlines the value of the national retirement services business that we have built around acquiring the best-in-class Third Party Administrators ("TPAs"). The exceptional expertise and high quality retirement services delivered by these operations produce long-term customer relationships and extremely low turnover, resulting in high recurring revenue streams, strong cash flow and solid organic growth. Gains from existing operations, augmented by the results of our on-going operating and technology initiatives, and contributions from TPA businesses added in 2008, generated strong first quarter results that were in line with our expectations for solid growth throughout 2009."
He continued, "We believe the significant growth in first quarter 2009 EBITDA SBC is the best measure of our progress. Focusing on earnings before interest, taxes, dividends, depreciation, amortization, change in derivative financial instruments and stock-based compensation (i.e., EBITDA SBC) is important because purchase accounting rules have required us to book a significant portion of acquisition costs to amortizing Balance Sheet accounts. Our non-cash expenses actually increased as we added profitable and cash flow positive field operations through acquisitions in 2008. The resulting impact on net income, along with market-based derivative calculations, produces non-cash losses that are not indicative of operating performance."
John Davis, President and Chief Operating Officer said, "Our revenue and profitability gains this quarter came from our core retirement plan design, consulting and administration services. The strong earnings growth in this area, despite the overall market conditions, is a credit to the hard work and perseverance of everyone in our field operations. Although our investment advisory business continued to be negatively impacted by the equity markets, performance in our existing operations combined with the contributions from our acquisitions completed in the second half of 2008 more than offset any market weakness".
Davis continued, "This strong performance reinforces our focus on technology and operational initiatives to drive uniformity and consistency of best practices across our operations. We are already seeing benefits from the rollout of our national technology strategy, and as we continue to move through our phased implementation during 2009 we expect to see additional benefits. As a result of these initiatives, we believe that National Investment Managers will be able to deliver the same high quality services to our clients as in the past, more effectively and efficiently than any retirement plan administrator in the industry. Our national technology platform allows each of our field operations to access the extraordinary expertise we have assembled around the country, and to leverage those skills to design and service the optimal retirement plan for each local client. Especially in these uncertain economic conditions, our ability to deliver time tested industry-leading retirement plan design, consulting and administrative services is a significant contributing factor in our revenue growth rate as well as our low attrition rate across 11,000 retirement plan clients."
Mr. Ross concluded, "During 2009 we will continue to focus on growing our existing businesses, managing operating expenses and driving operational efficiency and effectiveness. Although we have a pipeline of potential acquisitions, we do not anticipate an active acquisition program until credit market conditions improve. As we have demonstrated with our first quarter performance though, even without significant acquisitions, we expect growth rates similar to or greater than those experienced in 2008."
About National Investment Managers Inc.
National Investment Managers Inc. is a holding company and a consolidator of pension plan administration, investment management and insurance businesses. Its strategy includes a custom-tailored acquisition formula for each acquired business, which allows local and regional entities to retain their autonomy while benefiting from the reach that a national presence offers. In addition, the Company's approach offers entrepreneurs in these businesses an exit strategy suited to their specific needs. National Investment Managers targets businesses with stable cash flows and high operating margins to ensure successful integration of operations once a sale is concluded. Acquired companies continue to operate under their own brands, usually with minimal staff turnover to ensure that relationships of many years' standing are not disrupted. At the same time, these formerly small businesses can cross-sell related financial services under the National Investment Managers umbrella and enjoy administrative and other support from around the country.
The member firms of National Investment Managers provide pension administration services, retirement planning, defined benefit services, asset preservation, general insurance and asset management services. Wholly-owned subsidiaries of National Investment Managers are based in Anchorage, AK; Laguna Hills, CA; Marina Del Rey, CA; Greenwood Village, CO; Southington, CT; Lake Mary, FL; Pikesville, MD; North Attleboro, MA; Haddonfield, NJ; New York City, NY; Yorktown Heights, NY; Beaverton, OR; Harrisburg, PA; Horsham, PA; Wayne, PA; Warwick, RI; Houston, TX; and Seattle, WA. NIVM's corporate headquarters are located in Dublin, OH.
Note: This press release contains statements that are considered forward-looking under the Private Securities Litigation Reform Act of 1995, including statements about the Company's future prospects. They are based on the Company's current expectations and are subject to a number of uncertainties and risks, and actual results may differ materially. The uncertainties and risks include whether the Company is able to raise capital, identify and complete acquisitions, integrate the acquired businesses, improve upon the operations of the acquired business units and generate cash and profits. Further information about these and other relevant risks and uncertainties may be found in the Company's filings with the Securities and Exchange Commission.
NATIONAL INVESTMENT MANAGERS INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Three Months Ended
March 31, 2009 March 31, 2008
Revenues: $ 12,643,246 $ 8,940,459
Operating expenses
Selling, general and administrative 10,651,384 7,957,291
expenses
Depreciation and amortization 1,926,048 1,463,080
Stock-based compensation 87,528 511,023
Total operating expenses 12,664,960 9,931,394
Net operating income (loss) (21,714 ) (990,935 )
Other income (expenses):
Change in fair value of derivative 194,471 376,157
financial instruments
Interest expense (1,039,444 ) (940,010 )
Interest, dividend and rental income 8,807 13,346
Total other expense, net (836,166 ) (550,507 )
Net income (loss) before income tax (857,880 ) (1,541,442 )
benefit (expense)
Income tax benefit (expense) 589,426 371,397
Net income (loss) before preferred stock (268,454 ) (1,170,045 )
dividends
Less: preferred stock dividends (494,400 ) (497,400 )
Net income (loss) available to common $ (762,854 ) $ (1,667,445 )
stockholders
Net income (loss) per common share - $ (0.02 ) $ (0.05 )
basic and diluted
Weighted average common shares 39,557,000 36,280,000
outstanding - basic and diluted
NATIONAL INVESTMENT MANAGERS INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited) (Audited)
March 31, 2009 December 31, 2008
ASSETS
Current assets:
Cash (includes restricted cash of $341,569 $ 683,920 $ 531,446
and $411,299)
Accounts receivable, net 5,759,611 4,886,329
Prepaid expenses and other current assets 1,230,829 1,262,981
Total current assets 7,674,360 6,680,756
Property and equipment, net 1,034,057 1,036,497
Other assets:
Goodwill 28,599,358 28,474,114
Customer lists/relationships, net 26,351,203 27,118,405
Other intangibles, net 6,718,487 7,732,504
Deferred financing costs 950,564 979,455
Total other assets 62,619,612 64,304,478
Total assets $ 71,328,029 $ 72,021,731
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Revolving line of credit $ 1,600,000 $ 327,992
Long-term debt, current portion 5,984,746 5,560,800
Accounts payable 1,696,548 918,748
Unearned revenue 5,485,329 5,464,992
Accrued expenses and other current 4,497,832 5,603,997
liabilities
Total current liabilities 19,264,455 17,876,529
Long-term liabilities:
Long-term debt, less current portion 22,594,025 23,710,830
Preferred dividends payable 6,366,720 5,872,320
Derivative financial instruments 2,316,393 2,510,864
Deferred tax liability 7,119,488 7,708,914
Total long-term liabilities 38,396,626 39,802,928
Total liabilities 57,661,081 57,679,457
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value, 10,000,000
shares authorized; 4,000,000 designated as
Series A shares - 2,420,000 shares issued
and outstanding as of March 31, 2009 and
December 31, 2008 (liquidation preference
$2,420,000 as of March 31, 2009 and December
31, 2008); 4,000,000 designated as Series B
shares - 3,615,000 shares issued and
outstanding as of March 31, 2009 and
December 31, 2008 (liquidation preference
$7,230,000 as of March 31, 2009 and December
31, 2008); 1,000,000 designated as Series C
shares - 770,834 shares issued and
outstanding as of March 31, 2009 and 7,245 7,245
December 31, 2008 (liquidation preference
$9,250,008 as of March 31, 2009 and December
31, 2008); 500,000 designated as Series D
shares - 409,500 shares issued and
outstanding as of March 31, 2009 and
December 31, 2008 (liquidation preference
$8,190,000 as of March 31, 2009 and December
31, 2008); and 60,000 designated as Series E
shares - 29,350 shares issued and
outstanding as of March 31, 2009 and
December 31, 2008 (liquidation preference
$5,870,000 as of March 31, 2009 and December
31, 2008)
Common stock, $.001 par value, 100,000,000
shares authorized, 39,556,669 shares issued 39,557 39,557
and outstanding as of March 31, 2009 and
December 31, 2008.
Additional paid-in capital 35,493,555 35,406,027
Accumulated deficit (21,873,409 ) (21,110,555 )
Total stockholders' equity 13,666,948 14,342,274
Total liabilities and stockholders' equity $ 71,328,029 $ 72,021,731
Source: National Investment Managers Inc.
----------------------------------------------
National Investment Managers Incorporated
Steven J. Ross
CEO
614-923-8822
or
Porter LeVay & Rose
Inc.
Marlon Nurse
VP - Investor Relations
Cheryl Schneider
SVP - Editorial
212-564-4700
Fax: 212-244-3075
plrmail@plrinvest.com
www.plrinvest.com
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