Cohen & Company Inc. (NYSE American: COHN), a financial
services firm specializing in fixed income and SPAC markets, today
reported financial results for its third quarter ended September
30, 2022.
Summary Operating Results
|
Three Months Ended |
|
Nine Months Ended |
($ in thousands) |
9/30/22 |
|
6/30/22 |
|
9/30/21 |
|
9/30/22 |
|
9/30/21 |
|
|
|
|
|
|
|
|
|
|
Net trading |
$ |
7,966 |
|
|
$ |
10,377 |
|
|
$ |
16,599 |
|
|
$ |
30,365 |
|
|
$ |
54,181 |
|
Asset management |
|
3,456 |
|
|
|
1,898 |
|
|
|
1,856 |
|
|
|
7,243 |
|
|
|
5,787 |
|
New issue and advisory |
|
13,235 |
|
|
|
3,481 |
|
|
|
8,838 |
|
|
|
20,486 |
|
|
|
11,527 |
|
Principal transactions and other revenue |
|
(1,192 |
) |
|
|
(6,602 |
) |
|
|
(20,709 |
) |
|
|
(26,157 |
) |
|
|
47,831 |
|
Total revenues |
|
23,465 |
|
|
|
9,154 |
|
|
|
6,584 |
|
|
|
31,937 |
|
|
|
119,326 |
|
Compensation and benefits |
|
15,227 |
|
|
|
12,214 |
|
|
|
20,577 |
|
|
|
41,320 |
|
|
|
61,414 |
|
Non-compensation operating expenses |
|
5,390 |
|
|
|
5,102 |
|
|
|
5,125 |
|
|
|
15,809 |
|
|
|
15,658 |
|
Operating income |
|
2,848 |
|
|
|
(8,162 |
) |
|
|
(19,118 |
) |
|
|
(25,192 |
) |
|
|
42,254 |
|
Interest expense, net |
|
(1,346 |
) |
|
|
(1,106 |
) |
|
|
(1,731 |
) |
|
|
(3,803 |
) |
|
|
(5,527 |
) |
Other non-operating income |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,127 |
|
Income (loss) from equity method affiliates |
|
618 |
|
|
|
(3,044 |
) |
|
|
2,857 |
|
|
|
(14,530 |
) |
|
|
7,512 |
|
Income (loss) before income tax expense (benefit) |
|
2,120 |
|
|
|
(12,312 |
) |
|
|
(17,992 |
) |
|
|
(43,525 |
) |
|
|
46,366 |
|
Income tax expense (benefit) |
|
1,761 |
|
|
|
(60 |
) |
|
|
(248 |
) |
|
|
3,534 |
|
|
|
577 |
|
Net income (loss) |
|
359 |
|
|
|
(12,252 |
) |
|
|
(17,744 |
) |
|
|
(47,059 |
) |
|
|
45,789 |
|
Less: Net income (loss) attributable to the non-convertible
non-controlling interest |
|
(109 |
) |
|
|
(4,167 |
) |
|
|
(3,094 |
) |
|
|
(18,980 |
) |
|
|
17,837 |
|
Enterprise net income (loss) |
|
468 |
|
|
|
(8,085 |
) |
|
|
(14,650 |
) |
|
|
(28,079 |
) |
|
|
27,952 |
|
Less: Net income (loss) attributable to the convertible
non-controlling interest |
|
1,387 |
|
|
|
(6,228 |
) |
|
|
(11,221 |
) |
|
|
(17,691 |
) |
|
|
20,301 |
|
Net income (loss) attributable to Cohen & Company Inc. |
$ |
(919 |
) |
|
$ |
(1,857 |
) |
|
$ |
(3,429 |
) |
|
$ |
(10,388 |
) |
|
$ |
7,651 |
|
Fully diluted net income (loss) per share |
$ |
(0.64 |
) |
|
$ |
(1.53 |
) |
|
$ |
(3.46 |
) |
|
$ |
(7.33 |
) |
|
$ |
5.31 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax income (loss) |
$ |
2,229 |
|
|
$ |
(8,145 |
) |
|
$ |
(14,898 |
) |
|
$ |
(24,545 |
) |
|
$ |
26,402 |
|
Fully diluted adjusted pre-tax income (loss) per share |
$ |
0.41 |
|
|
$ |
(1.51 |
) |
|
$ |
(3.57 |
) |
|
$ |
(4.47 |
) |
|
$ |
5.23 |
|
|
|
|
|
|
|
|
|
|
|
Lester Brafman, Chief Executive Officer of Cohen
& Company, said, “Our Company navigated difficult market
conditions and continued to successfully execute our strategy,
generating $2.2 million of adjusted pre-tax income in the third
quarter. We were pleased that both our investment banking and U.S.
insurance origination teams closed key transactions and generated
new issue and advisory revenue. Although our reported financial
results continued to be impacted by unrealized negative
mark-to-market adjustments on our principal investing portfolio, we
remain focused on our strategic objectives and we are confident
that the expansion of our investment banking and commercial real
estate teams will continue to translate into higher revenues in the
future. As we move forward, we are committed to enhancing
stockholder value, and in the third quarter we continued to pay our
quarterly dividend.”
Adjusted pre-tax income (loss) is not a measure
recognized under U.S. generally accepted accounting principles
(“GAAP”). See Note 1 below.
Financial Highlights
- Net loss attributable to Cohen
& Company Inc. was $0.9 million, or $0.64 per diluted share,
for the three months ended September 30, 2022, compared to net loss
of $1.9 million, or $1.53 per diluted share, for the three months
ended June 30, 2022, and net loss of $3.4 million, or $3.46 per
diluted share, for the three months ended September 30, 2021.
Adjusted pre-tax income was $2.2 million, or $0.41 per diluted
share, for the three months ended September 30, 2022, compared to
adjusted pre-tax loss of $8.1 million, or $1.51 per diluted share,
for the three months ended June 30, 2022, and adjusted pre-tax loss
of $14.9 million, or $3.57 per diluted share, for the three months
ended September 30, 2021. Adjusted pre-tax income (loss) and
adjusted pre-tax income (loss) per diluted share are not measures
recognized under GAAP. See Note 1 below.
- Revenues were $23.5 million for the
three months ended September 30, 2022, compared to $9.2 million for
the prior quarter and $6.6 million for the prior year quarter.
- Net trading revenue was $8.0
million for the three months ended September 30, 2022, down $2.4
million from the prior quarter and $8.6 million from the prior year
quarter. The decrease from the prior quarters was due primarily to
lower trading revenue from the mortgage group’s gestation repo
business, including a $4.6 million loss in the current quarter
related to the liquidation of collateral from a bankrupt gestation
repo counterparty.
- Asset management revenue was $3.5
million for the three months ended September 30, 2022, up $1.6
million from the prior quarter and the prior year quarter. The
increase was due primarily to the successful auction of an Alesco
CDO in September 2022, and the accompanying $1.6 million of
subordinated management fees in arrears that were recorded.
- New issue and advisory revenue was
$13.2 million for the three months ended September 30, 2022, up
$9.8 million from the prior quarter and $4.4 million from the prior
year quarter. In the current quarter, the Cohen & Company
Capital Markets investment banking team generated $10.5 million and
the US insurance origination team generated $2.7 million of the new
issue and advisory revenue.
- Principal transactions and other
revenue was negative $1.2 million for the three months ended
September 30, 2022, compared to negative $6.6 million in the prior
quarter and negative $20.7 million in the prior year quarter. In
all quarters presented, the negative principal transactions and
other revenue was primarily due to mark-to-market adjustments on
the Company’s principal investments related to the Company’s
involvement in the SPAC market as a sponsor, asset manager, and
investor, which has resulted in increased holdings of public equity
positions in post-business combination companies, often restricted,
which are subject to market adjustments, both up and down.
- Compensation and benefits expense
during the three months ended September 30, 2022 increased $3.0
million from the prior quarter and decreased $5.4 million from the
prior year quarter. The number of Company employees was 122 as of
September 30, 2022, compared to 121 as of June 30, 2022, and 115 as
of September 30, 2021.
- Interest expense during the three
months ended September 30, 2022 increased $0.2 million from the
prior quarter and decreased $0.4 million from the prior year
quarter.
- Income from equity method
affiliates for the three months ended September 30, 2022 was $0.6
million, compared to loss from equity method affiliates of $3.0
million for the prior quarter and income from equity method
affiliates of $2.9 million for the prior year quarter. Income
(loss) from equity method affiliates fluctuates primarily depending
on the timing of the closing of the business combinations by the
Company’s equity method investees that are sponsors of SPACs, which
typically result in increased value of founder shares allocable to
the Company by the sponsors.
- Income tax expense for the three
months ended September 30, 2022 was $1.8 million, compared to
income tax benefit of $60 thousand in the prior quarter, and income
tax benefit of $0.2 million in the prior year quarter. The Company
will continue to evaluate its operations on a quarterly basis and
may make adjustments to the valuation allowance applied against the
Company's net operating loss and net capital loss tax assets.
Future adjustments could be material and may result in additional
tax benefit or tax expense.
Total Equity and Dividend Declaration
- As of September 30, 2022, total
equity was $105.6 million, compared to $151.4 million as of
December 31, 2021; the non-convertible non-controlling interest
component of total equity was $4.2 million as of September 30, 2022
and $31.8 million as of December 31, 2021. Thus, the total equity
excluding the non-convertible non-controlling interest component
was $101.4 million as of September 30, 2022, an $18.2 million
decrease from $119.6 million as of December 31, 2021.
- The Company’s Board of Directors
has declared a quarterly dividend of $0.25 per share, payable on
December 2, 2022, to stockholders of record as of November 18,
2022. The Board of Directors will continue to evaluate the dividend
policy each quarter, and future decisions regarding dividends may
be impacted by quarterly operating results and the Company’s
capital needs.
Conference Call
The Company will host a conference call at 10:00
a.m. Eastern Time (ET), today, November 2, 2022, to discuss these
results. The conference call will be available via webcast.
Interested parties can access the webcast by clicking the webcast
link on the Company’s homepage at www.cohenandcompany.com. Those
wishing to listen to the conference call with operator assistance
can dial (877) 524-8416 (domestic) or +1 (412) 902-1028
(international). A replay of the call will be available for three
days following the call by dialing (877) 660-6853 or (201)
612-7415.
About Cohen & Company
Cohen & Company is a financial services
company specializing in fixed income markets and SPAC markets. It
was founded in 1999 as an investment firm focused on small-cap
banking institutions but has grown to provide an expanding range of
capital markets and asset management services. Cohen &
Company’s operating segments are Capital Markets, Asset Management,
and Principal Investing. The Capital Markets segment consists of
fixed income sales, trading, and matched book repo financing as
well as new issue placements in corporate and securitized products,
and advisory services, operating primarily through Cohen &
Company’s subsidiaries, J.V.B. Financial Group, LLC in the United
States and Cohen & Company Financial Europe Limited S.A. in
Europe. A division of JVB, Cohen & Company Capital Markets is
the Company’s full-service boutique investment banking platform
focusing on SPAC advisory, capital markets advisory, and M&A
advisory, with clients primarily in the financial technology
(commonly referred to as "fintech") and SPAC spaces. The Asset
Management segment manages assets through collateralized debt
obligations, managed accounts, and investment funds. As of
September 30, 2022, the Company managed approximately $2.2 billion
in primarily fixed income assets in a variety of asset classes
including US and European trust preferred securities, subordinated
debt, and corporate loans. As of September 30, 2022, 53.8% of the
Company’s assets under management were in collateralized debt
obligations that Cohen & Company manages, which were all
securitized prior to 2008. The Principal Investing segment is
comprised primarily of investments the Company holds related to its
SPAC franchise and other investments the Company has made for the
purpose of earning an investment return rather than investments
made to support its trading, matched book repo, or other capital
markets business activity. For more information, please visit
www.cohenandcompany.com.
Note 1: Adjusted pre-tax income
(loss) and adjusted pre-tax income (loss) per share are non-GAAP
measures of performance. Please see the discussion under “Non-GAAP
Measures” below. Also see the tables below for the reconciliations
of non-GAAP measures of performance to their corresponding GAAP
measures of performance.
Forward-looking Statements
This communication contains certain statements,
estimates, and forecasts with respect to future performance and
events. These statements, estimates, and forecasts are
“forward-looking statements.” In some cases, forward-looking
statements can be identified by the use of forward-looking
terminology such as “may,” “might,” “will,” “should,” “expect,”
“plan,” “anticipate,” “believe,” “estimate,” “predict,”
“potential,” “seek,” or “continue” or the negatives thereof or
variations thereon or similar terminology. All statements other
than statements of historical fact included in this communication
are forward-looking statements and are based on various underlying
assumptions and expectations and are subject to known and unknown
risks, uncertainties, and assumptions, and may include projections
of our future financial performance based on our growth strategies
and anticipated trends in our business. These statements are based
on our current expectations and projections about future events.
There are important factors that could cause our actual results,
level of activity, performance, or achievements to differ
materially from the results, level of activity, performance, or
achievements expressed or implied in the forward-looking statements
including, but not limited to, those discussed under the heading
“Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition” in our filings with the Securities and
Exchange Commission (“SEC”), which are available at the SEC’s
website at www.sec.gov and our website at
www.cohenandcompany.com/investor-relations/sec-filings. Such risk
factors include the following: (a) a decline in general economic
conditions or the global financial markets, including those caused
by the Russian invasion of Ukraine, (b) losses caused by financial
or other problems experienced by third parties, (c) losses due to
unidentified or unanticipated risks, (d) a lack of liquidity, i.e.,
ready access to funds for use in our businesses, (e) the ability to
attract and retain personnel, (f) litigation and regulatory issues,
(g) competitive pressure, (h) an inability to generate incremental
income from new or expanded businesses, (i) unanticipated market
closures or effects due to inclement weather or other disasters,
(j) losses (whether realized or unrealized) on our principal
investments, (k) the possibility that payments to the Company of
subordinated management fees from its CDOs will continue to be
deferred or will be discontinued, (l) the possibility that the
stockholder rights plan may fail to preserve the value of the
Company’s deferred tax assets, whether as a result of the
acquisition by a person of 5% of the Company’s common stock or
otherwise, (m) the possibility that the Company’s third sponsored
insurance SPAC, INSU Acquisition Corp. III, does not successfully
consummate a business combination, (n) a reduction in the volume of
investments into SPACs, (o) the difficulty in identifying potential
business combinations as a result of increased competition in the
SPAC market, (p) the value of our holdings of founders shares in
post-business combination companies is volatile and may decline and
the possibility that significant portions of the founder shares may
remain restricted for a long period of time, (q) the possibility
that the Company will stop paying quarterly dividends to its
stockholders, (r) the possibility that the Company will incur
additional losses liquidating collateral related to a reverse repo
with now bankrupt First Guaranty Mortgage Corporation, (s) the
impacts of rising interest rates and inflation, and (t) the impacts
of the COVID-19 pandemic. As a result, there can be no assurance
that the forward-looking statements included in this communication
will prove to be accurate or correct. In light of these risks,
uncertainties, and assumptions, the future performance or events
described in the forward-looking statements in this communication
might not occur. Accordingly, you should not rely upon
forward-looking statements as a prediction of actual results and we
do not undertake any obligation to update any forward-looking
statements, whether as a result of new information, future events,
or otherwise.
Cautionary Note Regarding Quarterly Financial
Results
Due to the nature of our business, our revenue
and operating results may fluctuate materially from quarter to
quarter. Accordingly, revenue and net income in any particular
quarter may not be indicative of future results. Further, our
employee compensation arrangements are in large part
incentive-based and, therefore, will fluctuate with revenue. The
amount of compensation expense recognized in any one quarter may
not be indicative of such expense in future periods. As a result,
we suggest that annual results may be the most meaningful gauge for
investors in evaluating our business performance.
COHEN & COMPANY INC. |
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) |
(in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
9/30/22 |
|
6/30/22 |
|
9/30/21 |
|
9/30/22 |
|
9/30/21 |
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Net trading |
$ |
7,966 |
|
|
$ |
10,377 |
|
|
$ |
16,599 |
|
|
$ |
30,365 |
|
|
$ |
54,181 |
|
|
|
Asset management |
|
3,456 |
|
|
|
1,898 |
|
|
|
1,856 |
|
|
|
7,243 |
|
|
|
5,787 |
|
|
|
New issue and advisory |
|
13,235 |
|
|
|
3,481 |
|
|
|
8,838 |
|
|
|
20,486 |
|
|
|
11,527 |
|
|
|
Principal transactions and other revenue |
|
(1,192 |
) |
|
|
(6,602 |
) |
|
|
(20,709 |
) |
|
|
(26,157 |
) |
|
|
47,831 |
|
|
|
Total revenues |
|
23,465 |
|
|
|
9,154 |
|
|
|
6,584 |
|
|
|
31,937 |
|
|
|
119,326 |
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits |
|
15,227 |
|
|
|
12,214 |
|
|
|
20,577 |
|
|
|
41,320 |
|
|
|
61,414 |
|
|
|
Business development, occupancy, equipment |
|
1,234 |
|
|
|
1,295 |
|
|
|
869 |
|
|
|
3,777 |
|
|
|
2,375 |
|
|
|
Subscriptions, clearing, and execution |
|
2,112 |
|
|
|
1,972 |
|
|
|
2,581 |
|
|
|
6,025 |
|
|
|
7,745 |
|
|
|
Professional services and other operating |
|
1,905 |
|
|
|
1,692 |
|
|
|
1,585 |
|
|
|
5,593 |
|
|
|
5,280 |
|
|
|
Depreciation and amortization |
|
139 |
|
|
|
143 |
|
|
|
90 |
|
|
|
414 |
|
|
|
258 |
|
|
|
Total operating expenses |
|
20,617 |
|
|
|
17,316 |
|
|
|
25,702 |
|
|
|
57,129 |
|
|
|
77,072 |
|
|
|
Operating income (loss) |
|
2,848 |
|
|
|
(8,162 |
) |
|
|
(19,118 |
) |
|
|
(25,192 |
) |
|
|
42,254 |
|
|
|
Non-operating income (expense) |
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(1,346 |
) |
|
|
(1,106 |
) |
|
|
(1,731 |
) |
|
|
(3,803 |
) |
|
|
(5,527 |
) |
|
|
Other non-operating income (expense) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,127 |
|
|
|
Income (loss) from equity method affiliates |
|
618 |
|
|
|
(3,044 |
) |
|
|
2,857 |
|
|
|
(14,530 |
) |
|
|
7,512 |
|
|
|
Income (loss) before income tax expense (benefit) |
|
2,120 |
|
|
|
(12,312 |
) |
|
|
(17,992 |
) |
|
|
(43,525 |
) |
|
|
46,366 |
|
|
|
Income tax expense (benefit) |
|
1,761 |
|
|
|
(60 |
) |
|
|
(248 |
) |
|
|
3,534 |
|
|
|
577 |
|
|
|
Net income (loss) |
|
359 |
|
|
|
(12,252 |
) |
|
|
(17,744 |
) |
|
|
(47,059 |
) |
|
|
45,789 |
|
|
|
Less: Net income (loss) attributable to the non-convertible
non-controlling interest |
|
(109 |
) |
|
|
(4,167 |
) |
|
|
(3,094 |
) |
|
|
(18,980 |
) |
|
|
17,837 |
|
|
|
Enterprise net income (loss) |
|
468 |
|
|
|
(8,085 |
) |
|
|
(14,650 |
) |
|
|
(28,079 |
) |
|
|
27,952 |
|
|
|
Less: Net income (loss) attributable to the convertible
non-controlling interest |
|
1,387 |
|
|
|
(6,228 |
) |
|
|
(11,221 |
) |
|
|
(17,691 |
) |
|
|
20,301 |
|
|
|
Net income (loss) attributable to Cohen & Company Inc. |
$ |
(919 |
) |
|
$ |
(1,857 |
) |
|
$ |
(3,429 |
) |
|
$ |
(10,388 |
) |
|
$ |
7,651 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
Basic |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Cohen & Company Inc. |
$ |
(919 |
) |
|
$ |
(1,857 |
) |
|
$ |
(3,429 |
) |
|
$ |
(10,388 |
) |
|
$ |
7,651 |
|
|
|
Basic shares outstanding |
|
1,429 |
|
|
|
1,428 |
|
|
|
1,314 |
|
|
|
1,417 |
|
|
|
1,140 |
|
|
|
Net income (loss) attributable to Cohen & Company Inc. per
share |
$ |
(0.64 |
) |
|
$ |
(1.30 |
) |
|
$ |
(2.61 |
) |
|
$ |
(7.33 |
) |
|
$ |
6.71 |
|
|
|
Fully Diluted |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Cohen & Company Inc. |
$ |
(919 |
) |
|
$ |
(1,857 |
) |
|
$ |
(3,429 |
) |
|
$ |
(10,388 |
) |
|
$ |
7,651 |
|
|
|
Net income (loss) attributable to the convertible non-controlling
interest |
|
- |
|
|
|
(6,228 |
) |
|
|
(11,221 |
) |
|
|
- |
|
|
|
20,301 |
|
|
|
Net interest attributable to convertible debt, net of taxes |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
882 |
|
|
|
Income tax and conversion adjustment |
|
- |
|
|
|
(172 |
) |
|
|
237 |
|
|
|
- |
|
|
|
(1,179 |
) |
|
|
Net income (loss) attributable to Cohen & Company Inc. for
fully diluted net income (loss) per share calculation |
$ |
(919 |
) |
|
$ |
(8,257 |
) |
|
$ |
(14,413 |
) |
|
$ |
(10,388 |
) |
|
$ |
27,655 |
|
|
|
Basic shares outstanding |
|
1,429 |
|
|
|
1,428 |
|
|
|
1,314 |
|
|
|
1,417 |
|
|
|
1,140 |
|
|
|
Unrestricted Operating LLC membership units exchangeable into COHN
shares |
|
- |
|
|
|
3,966 |
|
|
|
2,856 |
|
|
|
- |
|
|
|
2,850 |
|
|
|
Additional dilutive shares |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,222 |
|
|
|
Fully diluted shares outstanding (1) |
|
1,429 |
|
|
|
5,394 |
|
|
|
4,170 |
|
|
|
1,417 |
|
|
|
5,212 |
|
|
|
Fully diluted net income (loss) per share |
$ |
(0.64 |
) |
|
$ |
(1.53 |
) |
|
$ |
(3.46 |
) |
|
$ |
(7.33 |
) |
|
$ |
5.31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of adjusted pre-tax income (loss) to net income
(loss) attributable to Cohen & Company Inc. and calculations of
per share amounts |
|
Net income (loss) attributable to Cohen & Company Inc. |
$ |
(919 |
) |
|
$ |
(1,857 |
) |
|
$ |
(3,429 |
) |
|
$ |
(10,388 |
) |
|
$ |
7,651 |
|
|
|
Addback (deduct): Other non-operating income |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(2,127 |
) |
|
|
Addback (deduct): Income tax expense (benefit) |
|
1,761 |
|
|
|
(60 |
) |
|
|
(248 |
) |
|
|
3,534 |
|
|
|
577 |
|
|
|
Addback (deduct): Net income (loss) attributable to the convertible
non-controlling interest |
|
1,387 |
|
|
|
(6,228 |
) |
|
|
(11,221 |
) |
|
|
(17,691 |
) |
|
|
20,301 |
|
|
|
Adjusted pre-tax income (loss) |
|
2,229 |
|
|
|
(8,145 |
) |
|
|
(14,898 |
) |
|
|
(24,545 |
) |
|
|
26,402 |
|
|
|
Net interest attributable to convertible debt |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
327 |
|
|
|
882 |
|
|
|
Enterprise pre-tax income (loss) for fully diluted adjusted pre-tax
income (loss) per share calculation |
$ |
2,229 |
|
|
$ |
(8,145 |
) |
|
$ |
(14,898 |
) |
|
$ |
(24,218 |
) |
|
$ |
27,284 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted fully diluted shares outstanding (2) |
|
5,394 |
|
|
|
5,394 |
|
|
|
4,170 |
|
|
|
5,416 |
|
|
|
5,212 |
|
|
|
Fully diluted adjusted pre-tax income (loss) per share |
$ |
0.41 |
|
|
$ |
(1.51 |
) |
|
$ |
(3.57 |
) |
|
$ |
(4.47 |
) |
|
$ |
5.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) When the fully diluted net income (loss) per share is
anti-dilutive, the basic shares outstanding are presented on this
line item. |
|
|
(2) Adjusted fully diluted shares outstanding includes unrestricted
Operating LLC units exchangeable into COHN shares at all times;
even during periods when the corresponding GAAP calculation of
fully diluted shares outstanding above does not include them. The
Operating LLC units are always included because the non-GAAP
measure of performance, adjusted pre-tax income (loss), always
includes net income (loss) attributable to the corresponding
convertible non-controlling interest. |
|
COHEN & COMPANY INC. |
CONSOLIDATED BALANCE SHEETS |
(in thousands) |
|
|
|
|
|
|
|
|
September 30, 2022 |
|
|
|
|
|
(unaudited) |
|
December 31, 2021 |
|
|
Assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
47,287 |
|
|
$ |
50,567 |
|
|
|
Receivables from brokers, dealers, and clearing agencies |
|
121,922 |
|
|
|
68,392 |
|
|
|
Due from related parties |
|
1,764 |
|
|
|
4,581 |
|
|
|
Other receivables |
|
20,739 |
|
|
|
3,203 |
|
|
|
Investments - trading |
|
271,823 |
|
|
|
223,865 |
|
|
|
Other investments, at fair value |
|
37,726 |
|
|
|
56,033 |
|
|
|
Receivables under resale agreements |
|
699,658 |
|
|
|
3,175,645 |
|
|
|
Investment in equity method affiliates |
|
13,466 |
|
|
|
48,238 |
|
|
|
Deferred income taxes |
|
8,173 |
|
|
|
11,513 |
|
|
|
Goodwill |
|
109 |
|
|
|
109 |
|
|
|
Right-of-use asset - operating leases |
|
9,980 |
|
|
|
10,273 |
|
|
|
Other assets |
|
3,466 |
|
|
|
3,885 |
|
|
|
Total assets |
$ |
1,236,113 |
|
|
$ |
3,656,304 |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Payables to brokers, dealers, and clearing agencies |
$ |
132,412 |
|
|
$ |
160,896 |
|
|
|
Accounts payable and other liabilities |
|
28,506 |
|
|
|
22,819 |
|
|
|
Accrued compensation |
|
19,325 |
|
|
|
22,577 |
|
|
|
Trading securities sold, not yet purchased |
|
152,079 |
|
|
|
62,512 |
|
|
|
Other investments sold, not yet purchased |
|
910 |
|
|
|
2,488 |
|
|
|
Securities sold under agreements to repurchase |
|
749,673 |
|
|
|
3,171,415 |
|
|
|
Operating lease liability |
|
10,739 |
|
|
|
10,813 |
|
|
|
Redeemable Financial Instruments |
|
7,957 |
|
|
|
7,957 |
|
|
|
Debt |
|
28,879 |
|
|
|
43,394 |
|
|
|
Total liabilities |
|
1,130,480 |
|
|
|
3,504,871 |
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Voting nonconvertible preferred stock |
|
27 |
|
|
|
27 |
|
|
|
Common stock |
|
17 |
|
|
|
17 |
|
|
|
Additional paid-in capital |
|
72,460 |
|
|
|
72,006 |
|
|
|
Accumulated other comprehensive loss |
|
(1,005 |
) |
|
|
(905 |
) |
|
|
Accumulated deficit |
|
(21,793 |
) |
|
|
(9,204 |
) |
|
|
Total stockholders' equity |
|
49,706 |
|
|
|
61,941 |
|
|
|
Noncontrolling interest |
|
55,927 |
|
|
|
89,492 |
|
|
|
Total equity |
|
105,633 |
|
|
|
151,433 |
|
|
|
Total liabilities and equity |
$ |
1,236,113 |
|
|
$ |
3,656,304 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Measures
Adjusted pre-tax income (loss) and adjusted
pre-tax income (loss) per diluted share
Adjusted pre-tax income (loss) is not a
financial measure recognized by GAAP. Adjusted pre-tax income
(loss) represents net income (loss) attributable to Cohen &
Company Inc., computed in accordance with GAAP, excluding other
non-operating income and income tax expense (benefit), plus the net
income (loss) attributable to the convertible non-controlling
interest. Other non-operating income, representing the forgiveness
of our PPP loan, has been excluded because it is a non-recurring
item. Income tax expense (benefit) has been excluded because a
pre-tax measurement of enterprise earnings that includes net income
(loss) attributable to the convertible non-controlling interest is
a useful and appropriate measure of performance. Furthermore, our
income tax expense (benefit) has been, and we expect it will
continue to be, a substantially non-cash item for the foreseeable
future, generated from adjustments in our valuation allowance
applied to the Company’s gross deferred tax assets. Convertible
non-controlling interest is added back to adjusted pre-tax income
because the underlying Cohen & Company, LLC equity units are
convertible into Cohen & Company Inc. shares. Adjusted pre-tax
income (loss) per diluted share is calculated, by dividing adjusted
pre-tax income (loss) by diluted shares outstanding, both of which
include adjustments used in the corresponding calculation in
accordance with GAAP.
We present adjusted pre-tax income (loss) and
related per diluted share amounts in this release because we
consider them to be useful and appropriate supplemental measures of
our performance. Adjusted pre-tax income (loss) and related per
diluted share amounts help us to evaluate our performance without
the effects of certain GAAP calculations that may not have a direct
cash or recurring impact on our current operating performance. In
addition, our management uses adjusted pre-tax income (loss) and
related per diluted share amounts to evaluate the performance of
our enterprise operations. Adjusted pre-tax income (loss) and
related per diluted share amounts, as we define them, are not
necessarily comparable to similarly named measures of other
companies and may not be appropriate measures for performance
relative to other companies. Adjusted pre-tax income (loss) should
not be assessed in isolation from or construed as a substitute for
net income (loss) attributable to Cohen & Company Inc. prepared
in accordance with GAAP. Adjusted pre-tax income (loss) is not
intended to represent and should not be considered to be a more
meaningful measure than, or an alternative to, measures of
operating performance as determined in accordance with GAAP.
Contact:
Investors - |
Media - |
Cohen & Company Inc. |
Joele Frank, Wilkinson Brimmer
Katcher |
Joseph W. Pooler, Jr. |
James Golden or Andrew
Squire |
Executive Vice President and |
212-355-4449 |
Chief Financial Officer |
jgolden@joelefrank.com or
asquire@joelefrank.com |
215-701-8952 |
|
investorrelations@cohenandcompany.com |
|
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