Fourth Quarter Net Income of $3.7 Million or $0.19 per Diluted Share
Fourth Quarter Adjusted Operating Income of $4.7 Million or $0.23 per Diluted Share
Full Year Adjusted Operating Income of $5.8 Million or $0.29 per Diluted Share
Full Year Total Operating Expenses Decreased $23.2 Million, or 29%, from 2013
Board Declares Dividend of $0.02 per Share
Sale of European Operations Expected to Close in First Half of 2015
PHILADELPHIA and NEW YORK, March 5, 2015 (GLOBE NEWSWIRE) -- Institutional Financial Markets, Inc. (IFMI), a financial services firm specializing in credit-related fixed income investments, today reported financial results for its fourth quarter and year ended December 31, 2014.
Net income was $3.7 million, or $0.19 per diluted share, for the three months ended December 31, 2014, compared to net loss of $1.7 million, or $0.08 per diluted share, for the three months ended September 30, 2014, and net loss of $6.1 million, or $0.28 per diluted share, for the three months ended December 31, 2013. Net loss was $3.7 million, or $0.17 per diluted share, for the year ended December 31, 2014, compared to net loss of $19.9 million, or $1.08 per diluted share, for the year ended December 31, 2013. Excluding impairment of goodwill, net loss would have been $0.6 million for the year ended December 31, 2014.
Adjusted operating income was $4.7 million, or $0.23 per diluted share, for the three months ended December 31, 2014, compared to adjusted operating loss of $0.1 million, or $0.01 per diluted share, for the three months ended September 30, 2014, and adjusted operating loss of $6.4 million, or $0.32 per diluted share, for the three months ended December 31, 2013. Adjusted operating income was $5.8 million, or $0.29 per diluted share, for the year ended December 31, 2014, compared to adjusted operating loss of $17.7 million, or $1.00 per diluted share, for the year ended December 31, 2013. Adjusted operating income is not a measure recognized under US generally accepted accounting principles ("GAAP"). See Note 1 on page 4.
Revenue was $17.8 million for the three months ended December 31, 2014, compared to revenue of $10.6 million for the three months ended September 30, 2014, and revenue of $11.7 million for the three months ended December 31, 2013. Revenue was $55.8 million for the year ended December 31, 2014, compared to revenue of $57.5 million for the year ended December 31, 2013.
Total operating expenses were $55.5 million for the year ended December 31, 2014, compared to $78.6 million for the year ended December 31, 2013, a reduction of $23.2 million or 29%. Excluding the impairment of goodwill charge in 2014, the annual total operating expenses would have improved $26.3 million, or 33%, from 2013.
Compensation as a percentage of revenue was 43% for the three months ended December 31, 2014, compared to 63% for the three months ended September 30, 2014, and 82% for the three months ended December 31, 2013. Compensation as a percentage of revenue was 53% for the year ended December 31, 2014, compared to 82% for the year ended December 31, 2013. The number of employees was 111 as of December 31, 2014, compared to 118 as of September 30, 2014, and 148 as of December 31, 2013.
Non-compensation operating costs, excluding depreciation and amortization and impairment of goodwill, were $5.7 million for the three months ended December 31, 2014, compared to $4.3 million for the three months ended September 30, 2014, and $8.6 million for the three months ended December 31, 2013. Non-compensation operating costs, excluding depreciation and amortization and impairment of goodwill, were $21.5 million for the year ended December 31, 2014, compared to $30.0 million for the year ended December 31, 2013, a year-over-year reduction of 29%.
Lester Brafman, Chief Executive Officer of IFMI, said, "We are pleased that the execution of our strategic initiatives is starting to positively impact our operating results as IFMI reported its best quarterly adjusted operating income in over four years. The pending sale of our European subsidiaries is on track to close in the first half of 2015. Today, IFMI is beginning to realize the benefits of our team's hard work, and we remain focused on positioning the Company for future success and value creation."
Capital Markets Revenue
Net trading revenue was $8.2 million for the three months ended December 31, 2014, compared to $6.3 million for the three months ended September 30, 2014, and $6.0 million for the three months ended December 31, 2013. Net trading revenue was $28.1 million for the year ended December 31, 2014, compared to $38.5 million for the year ended December 31, 2013. The increase from prior quarter was primarily due to more trading revenue from the Company's corporate groups, while the increase from prior year quarter was primarily due to more trading revenue from the corporate, SBA, and TBA groups. The decrease from prior year was primarily driven by the restructuring and consolidation of the Company's U.S. broker-dealer operations in the second half of 2013, particularly the elimination of certain business lines and a significant reduction in the number of revenue producers from the prior year period.
New issue and advisory revenue was $2.2 million for the three months ended December 31, 2014, compared to $0.3 million for the three months ended September 30, 2014, and $1.2 million for the three months ended December 31, 2013. New issue and advisory revenue was $5.2 million for the year ended December 31, 2014, compared to $6.4 million for the year ended December 31, 2013. The increase from both prior quarter and prior year quarter was primarily due to European advisory fees received in the fourth quarter of 2014. The decrease from prior year was primarily due to the termination of the Company's SPAC investment banking team in early 2014, partially offset by the European advisory fees received in the fourth quarter of 2014.
