Merriman Holdings, Inc. Returns to Profitability in Q-1 2014
(Thomson Reuters ONE via COMTEX) -- SAN FRANCISCO - April 30, 2014 - Merriman Holdings, Inc. (otcqx:MERR), the parent company of Merriman Capital, Inc., today released earnings for the first quarter ended March 31, 2014.
First Quarter 2014 Financial Highlights:
- First quarter revenue was $4.6 million, up 28% from $3.6 million in Q-4 2013 and 114% from $2.1 million in Q-1 2013:
- Investment banking revenue was $2.4 million, a 3 % increase from $2.3 million in Q-4 2013 and a 887% increase from $0.2 million in Q-1 2013;
- Commissions revenue was $1,382,000, a 49% increase from $926,000 in Q-4 2013 and a 36% increase from $1,018,000 in Q-1 2013;
- Other revenue was $515,000, primarily derived from the Capital Advisory Market Group's fee services.
- GAAP net income attributable to common shareholders was $653,000 in Q-1 2014 as compared to net loss of $515,000 and $953,000 in Q-4 2013 and Q-1 2013, respectively.
- Adjusted EBITDA was $1,155,000 in Q-1 2014 and ($267,000) in Q-1 2013, respectively.
"After a near breakeven Q-4 2013, our team executed well in Q-1 2014 across all business lines," said Will Febbo, Chief Operating Officer and Director of Merriman Holdings, Inc. "We continue to sharpen our focus on recurring revenue supported by our scalable technology and work toward building value for our clients, shareholders and team."
"We had a solid start to 2014 as numerous new opportunities developed in both our base business and the Digital Capital Network ("DCN")," continued Jon Merriman, Chief Executive Officer. "We look forward to expanding on these opportunities in the near term. With a very large addressable market of small public and private companies that need corporate service help, we also added over 60 new accounts in the quarter vs. less than 10 last year."
Use of Non-GAAP Measures
Merriman Holdings, Inc. (the "Company") prepares its consolidated financial statements in accordance with the United States generally accepted accounting principles ("GAAP"). In addition to disclosing financial results prepared in accordance with GAAP, the Company discloses information regarding adjusted EBITDA, which differs from the term EBITDA as it is commonly used. In addition to adjusting net income/(loss) to exclude interest, depreciation and amortization, adjusted EBITDA also excludes stock-based compensation, bad debt, loss on restructuring and early extinguishment of debt. Adjusted EBITDA is not a measure of performance defined in accordance with GAAP. However, adjusted EBITDA is used internally in planning and evaluating the Company's operating performance. Accordingly, management believes that disclosure of this metric offers investors, bankers and other shareholders an additional view of the Company's operations that, when coupled with the GAAP results, provides a more complete understanding of the Company's financial results.
Adjusted EBITDA should not be considered as an alternative to net income/(loss) or to net cash used in operating activities as a measure of operating results or of liquidity. It may not be comparable to similarly titled measures used by other companies, and it excludes financial information that some may consider important in evaluating the Company's performance. A reconciliation of GAAP net income/(loss) to adjusted EBITDA is included in the accompanying financial schedules.
About Merriman Capital, Inc.
Merriman Capital, Inc. is a full service investment bank and Broker-Dealer that facilitates efficient capital formation through a proprietary digital network, and offers Capital Markets Advisory and comprehensive Corporate Brokerage services for public and private companies. The firm also provides equity and options execution services for sophisticated investors and differentiated research for high growth companies. Merriman Capital, Inc. is a wholly owned brokerage subsidiary of Merriman Holdings, Inc. (otcqx:MERR) and is a leading advisory firm for publicly traded, high-growth companies.
Digital Capital Network, powered by Merriman Capital, is a capital marketplace that enables highly targeted and more efficient execution of transactions. Please visit our website for more information on how you can be a part of our Digital Capital Network: http://www.digitalcapitalnetwork.com .
Merriman Capital, Inc. is a registered broker-dealer and member of The Financial Industry Regulatory Authority (FINRA) http://www.finra.org/ and the Securities Investor Protection Corporation (SIPC) http://www.sipc.org/ .
Note to Investors
This press release contains certain forward-looking statements based on our current expectations, forecasts and assumptions that involve risks and uncertainties. This release does not constitute an offer to sell or a solicitation of offers to buy any securities of any entity. Forward-looking statements in this release are based on information available to us as of the date hereof. Our actual results may differ materially from those stated or implied in such forward-looking statements, due to risks and uncertainties associated with our business, which include the risk factors disclosed in our Form 10-K filed on March 31, 2014. Forward-looking statements include statements regarding our expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," and "would" or similar words. We assume no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise. The Form 10-K filed on March 31, 2014, together with this press release and the financial information contained herein, are available on our website, www.merrimanco.com . Please click on "Investor Relations."
At the Company:
Michael Doran
General Counsel
(415) 568-3905
William Febbo
Chief Operating Officer
(415) 248-5603
MERRIMAN HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March 31 2014 2013
Revenues Commissions $ 1,381,817 $ 1,018,181 Principal transactions 248,612 267,762 Investment banking 2,419,233 245,035 Advisory and other 514,818 605,239
Total revenues $ 4,564,480 $ 2,136,217
Operating expenses Compensation and benefits $ 2,508,751 $ 1,596,663 Brokerage and clearing fees 124,709 86,348 Professional services 113,106 73,029 Occupancy and equipment 301,259 337,032 Communications and technology 186,838 119,222 Depreciation and amortization 39,412 4,257 Travel and entertainment 42,451 60,176 Legal services 40,191 16,769 Cost of underwriting capital - 46,400 Other 180,502 324,942
Total operating expenses 3,537,219 2,664,838
Operating income/(loss) 1,027,261 (528,621)
Interest expense (93,748) (91,282) Amortization of debt discount (18,676) (39,674) Loss on restructuring of debt (262,299) - Loss on early extinguishment of debt - (293,347)
Net income/(loss) attributable to common shareholders $ 652,538 $ (952,924)
Basic net income/(loss) per share $ 0.0052 $ (0.10)
Diluted net income/(loss) per share $ 0.0044 $ (0.10)
Weighted average common shares outstanding: Basic 124,409,025 9,400,500 Diluted 146,911,877 9,400,500
MERRIMAN HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
31-Mar-14 31-Dec-13 ASSETS
Cash and cash equivalents $ 1,186,776 $ 1,044,110 Securities owned Marketable, at fair value 870,023 1,176,347 Not readily marketable, at estimated fair value 1,817,284 671,801 Restricted cash 725,799 891,828 Due from clearing broker 91,811 97,811 Accounts receivable, net 621,458 532,431 Prepaid expenses and other assets 808,338 674,915 Equipment and fixtures, net 370,737 341,258
Total assets $ 6,492,226 $ 5,430,501
LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT) Liabilities Accounts payable $ 213,582 $ 317,272 Commissions payable 425,399 418,075 Accrued expenses and other 941,392 814,946 Deferred rent 515,963 428,540 Deferred revenue 99,406 70,378 Capital lease obligations 336,969 360,795 Notes payable, net of debt discount 1,468,903 1,226,521 Notes payable to related parties, net of debt discount 1,585,867 1,940,601
Total liabilities 5,587,481 5,577,128
Shareholders' equity/(deficit) Convertible preferred stock, Series A-$0.0001 par value; 2,000,000 shares authorized; 2,000,000 shares issued and 0 shares outstanding as of March 31, 2014 and December 31, 2013; aggregate liquidation preference of $0 - - Convertible preferred stock, Series B-$0.0001 par value; 12,500,000 shares authorized; 8,750,000 shares issued and 0 shares outstanding as of March 31, 2014 and December 31, 2013; aggregate liquidation preference of $0 - - Convertible preferred stock, Series C-$0.0001 par value; 14,200,000 shares authorized; 11,800,000 shares issued and 0 shares outstanding as of March 31, 2014 and December 31, 2013; aggregate liquidation preference of $0 - - Convertible preferred stock, Series D-$0.0001 par value; 24,000,000 shares authorized, 23,720,916 shares issued and 0 shares outstanding as of March 31, 2014 and December 31, 2013; aggregate liquidation preference of $0 prior to conversion, and pari passu with common stock on conversion - - Convertible Preferred stock, Series E-$0.0001 par value; 7,300,000 shares authorized, 6,825,433 shares issued and 0 shares outstanding as of March 31, 2014 and December 31, 2013; aggregate liquidation preference of $0 prior to conversion, and pari passu with common stock on conversion Common stock, $0.0001 par value; 300,000,000 shares authorized; 125,088,489 and 124,255,156 shares issued and 125,059,053 and 124,225,720 shares outstanding as of March 31, 2014 and December 31, 2013, respectively 12,509 12,426 Additional paid-in capital 149,374,163 148,975,412 Treasury stock (225,613) (225,613) Accumulated deficit (148,256,314) (148,908,852)
Total shareholders' equity/(deficit) 904,745 (146,627)
Total liabilities and shareholders' equity/(deficit) $ 6,492,226 $ 5,430,501
RECONCILIATION OF ADJUSTED EBITDA TO GAAP MEASURES
(Unaudited) Three Months Ended March 31 2014 2013
Adjusted EBITDA $ 1,155,215 $ (266,914)
Interest and non-cash items: Interest expense, net (93,748) (91,282) Bad debt expense - (122,033) Loss on restructuring of debt (262,299) - Loss on early extinguishment of debt - (293,347) Amortization of debt discount (18,676) (39,674) Depreciation and amortization (39,412) (4,257) Non-cash stock-based compensation (88,542) (135,416)
GAAP net income/(loss) $ 652,538 $ (952,924)
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Source: Merriman Holdings Inc. via Globenewswire
HUG#1781910
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