Cohen & Company Inc. (NYSE American: COHN), a financial
services firm specializing in fixed income markets and, more
recently, in SPAC markets, today reported financial results for its
fourth quarter and full year ended December 31, 2021.
Summary Operating Results
|
Three Months Ended |
|
Twelve Months Ended |
($ in thousands) |
12/31/21 |
|
9/30/21 |
|
12/31/20 |
|
12/31/21 |
|
12/31/20 |
|
|
|
|
|
|
|
|
|
|
Net trading |
$ |
15,204 |
|
|
$ |
16,599 |
|
|
$ |
18,087 |
|
|
$ |
69,385 |
|
|
$ |
73,611 |
|
Asset management |
|
5,136 |
|
|
|
1,856 |
|
|
|
3,821 |
|
|
|
10,923 |
|
|
|
8,759 |
|
New issue and advisory |
|
17,209 |
|
|
|
8,838 |
|
|
|
1,734 |
|
|
|
28,736 |
|
|
|
2,234 |
|
Principal transactions and
other revenue |
|
(10,507 |
) |
|
|
(20,709 |
) |
|
|
42,723 |
|
|
|
37,324 |
|
|
|
45,506 |
|
Total revenues |
|
27,042 |
|
|
|
6,584 |
|
|
|
66,365 |
|
|
|
146,368 |
|
|
|
130,110 |
|
Compensation and benefits |
|
23,634 |
|
|
|
20,577 |
|
|
|
23,479 |
|
|
|
85,048 |
|
|
|
59,902 |
|
Non-compensation operating
expenses |
|
6,069 |
|
|
|
5,125 |
|
|
|
5,111 |
|
|
|
21,727 |
|
|
|
19,997 |
|
Goodwill impairment |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
7,883 |
|
Operating income |
|
(2,661 |
) |
|
|
(19,118 |
) |
|
|
37,775 |
|
|
|
39,593 |
|
|
|
42,328 |
|
Interest expense, net |
|
(1,706 |
) |
|
|
(1,731 |
) |
|
|
(1,951 |
) |
|
|
(7,233 |
) |
|
|
(9,589 |
) |
Other non-operating
income |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,127 |
|
|
|
- |
|
Income (loss) from equity
method affiliates |
|
28,498 |
|
|
|
2,857 |
|
|
|
(244 |
) |
|
|
36,010 |
|
|
|
(2,955 |
) |
Income (loss) before income tax expense (benefit) |
|
24,131 |
|
|
|
(17,992 |
) |
|
|
35,580 |
|
|
|
70,497 |
|
|
|
29,784 |
|
Income tax expense
(benefit) |
|
(2,191 |
) |
|
|
(248 |
) |
|
|
(8,046 |
) |
|
|
(1,614 |
) |
|
|
(8,669 |
) |
Net income (loss) |
|
26,322 |
|
|
|
(17,744 |
) |
|
|
43,626 |
|
|
|
72,111 |
|
|
|
38,453 |
|
Less: Net income (loss) attributable to the convertible
non-controlling interest |
|
4,954 |
|
|
|
(11,221 |
) |
|
|
17,074 |
|
|
|
25,255 |
|
|
|
14,200 |
|
Less: Net income (loss) attributable to the non-convertible
non-controlling interest |
|
17,737 |
|
|
|
(3,094 |
) |
|
|
11,801 |
|
|
|
35,574 |
|
|
|
10,048 |
|
Net income (loss) attributable to Cohen & Company Inc. |
$ |
3,631 |
|
|
$ |
(3,429 |
) |
|
$ |
14,751 |
|
|
$ |
11,282 |
|
|
$ |
14,205 |
|
Fully diluted net income (loss) per share |
$ |
2.13 |
|
|
$ |
(3.46 |
) |
|
$ |
7.64 |
|
|
$ |
7.48 |
|
|
$ |
7.66 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax income
(loss) |
$ |
6,394 |
|
|
$ |
(14,898 |
) |
|
$ |
23,779 |
|
|
$ |
32,796 |
|
|
$ |
27,619 |
|
Fully diluted adjusted pre-tax
income (loss) per share |
$ |
1.23 |
|
|
$ |
(3.57 |
) |
|
$ |
4.64 |
|
|
$ |
6.50 |
|
|
$ |
5.72 |
|
Lester Brafman, Chief Executive Officer of Cohen
& Company, said, “2021 was a year of progress for Cohen &
Company, both in terms of our financial results and in
transitioning our business model away from a predominantly fixed
income trading firm to one with diverse, high value-added revenue
streams including investment banking, commercial real estate
origination, and asset management. We are encouraged by this
progress and excited for the year ahead as we continue to execute
on our strategic goals. In light of our strong 2021 operating
results, we are pleased to announce a special one-time dividend of
$0.75 per share, in addition to our regular quarterly dividend of
$0.25 per share, underscoring our ongoing confidence in our
business and focus on enhancing shareholder value.”
Brafman continued, “It is important to reiterate
that our involvement in the SPAC market as a sponsor, asset
manager, and investor will result in increased holdings of public
equity positions in post-business combination companies as part of
our principal investing portfolio. The value of these increased
holdings will be subject to market conditions, especially given the
current economic uncertainty and capital markets disruption caused
by recent geopolitical instability. While there may be some
increased volatility in the SPAC market that may impact our
reported results, we continue to execute well against our strategic
objectives and believe that the initiatives underway in investment
banking, CRE loan origination, asset management, gestation repo,
and in our SPAC franchise will generate long-term value for our
shareholders.”
Financial Highlights
- Net income attributable to Cohen
& Company Inc. was $3.6 million, or $2.13 per diluted share,
for the three months ended December 31, 2021, compared to net loss
of $3.4 million, or $3.46 per diluted share, for the three months
ended September 30, 2021, and net income of $14.8 million, or $7.64
per diluted share, for the three months ended December 31, 2020.
Adjusted pre-tax income was $6.4 million, or $1.23 per diluted
share, for the three months ended December 30, 2021, compared to
adjusted pre-tax loss of $14.9 million, or $3.57 per diluted share,
for the three months ended September 30, 2021, and adjusted pre-tax
income of $23.8 million, or $4.64 per diluted share, for the three
months ended December 31, 2020. Adjusted pre-tax income (loss) and
adjusted pre-tax income (loss) per diluted share are not measures
recognized under U.S. generally accepted accounting principles
(“GAAP”). See Note 1 below.
- Revenues during the three months
ended December 31, 2021 increased $20.5 million from the prior
quarter and decreased $39.3 million from the prior year quarter.
- Net trading revenue was $15.2
million for the three months ended December 31, 2021, down $1.4
million from the prior quarter and $2.9 million from the year-ago
quarter. The decrease from the prior quarter was primarily due to
lower trading revenue from the Company’s mortgage and corporate
groups. The decrease from the year-ago quarter was primarily due to
lower trading revenue from the Company’s corporate, agencies, SBA,
and credit groups, which was partially offset by higher gestation
repo trading revenue.
- Asset management revenue was $5.1
million for the three months ended December 31, 2021, up $3.3
million from prior quarter and up $1.3 million from the year-ago
quarter. The increase from the prior quarter was primarily related
to an incentive allocation earned by the manager of the Company’s
SPAC funds. The increase from the year-ago quarter was due to
higher revenue from the Company’s investment funds, including an
increase in the incentive allocation earned by the manager of the
Company’s SPAC funds, which was partially offset by lower revenue
from the Company’s managed CDOs. This reflects the changing mix of
the Company’s assets under management, with the Company’s SPAC
funds, US insurance funds, and European insurance funds growing as
the Company’s managed CDO portfolio shrinks.
- New issue and advisory revenue was
$17.2 million for the three months ended December 31, 2021, up $8.4
million from the prior quarter and $15.5 million from the year-ago
quarter. In the current quarter, the Cohen & Company Capital
Markets investment banking team generated $15.1 million, the CRE
origination team generated $1.4 million, and the European insurance
origination team generated $0.7 million of the new issue and
advisory revenue.
- Principal transactions and other
revenue was negative $10.5 million for the three months ended
December 31, 2021, compared to negative $20.7 million in the prior
quarter and positive $42.7 million in the year-ago quarter. The
changes were primarily related to mark-to-market adjustments on the
Company’s principal investments in Metromile Inc., Shift
Technologies, Inc., and various PIPE investments in SPAC business
combinations. Note that the $10.5 million of negative principal
transactions revenue in the current quarter is offset by a $2.8
million credit recorded in the net income (loss) attributable to
the non-convertible non-controlling interest line item. The
Company’s involvement in the SPAC market as a sponsor, asset
manager, and investor, has resulted in increased holdings of public
equity positions in post-business combination companies, often
restricted, which are subject to market adjustments, both up and
down. See the chart below for detail of principal transactions and
other revenue, and the impact of Insurance SPAC/Shift Technologies,
Inc. and Insurance SPAC II/Metromile Inc. on adjusted pre-tax
income (loss).
($ in thousands) |
For the Three Months Ended |
|
Twelve Months Ended |
|
12/31/21 |
9/30/21 |
12/31/20 |
|
12/31/21 |
12/31/20 |
Principal transactions
and other revenue: |
|
|
|
|
|
|
Metromile Inc. (MILE) |
$ |
(2,377 |
) |
$ |
(14,349 |
) |
$ |
- |
|
|
$ |
43,655 |
|
$ |
- |
|
Shift Technologies, Inc. (SFT) |
|
(6,259 |
) |
|
(3,121 |
) |
|
40,619 |
|
|
|
(5,258 |
) |
|
40,619 |
|
Subtotal MILE and SFT |
|
(8,636 |
) |
|
(17,470 |
) |
|
40,619 |
|
|
|
38,397 |
|
|
40,619 |
|
PIPE investments in SPAC business combinations |
|
(4,082 |
) |
|
(5,568 |
) |
|
- |
|
|
|
(8,962 |
) |
|
- |
|
Other |
|
2,211 |
|
|
2,329 |
|
|
2,104 |
|
|
|
7,889 |
|
|
4,887 |
|
Total principal transactions and other revenue |
$ |
(10,507 |
) |
$ |
(20,709 |
) |
$ |
42,723 |
|
|
$ |
37,324 |
|
$ |
45,506 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in thousands) |
For the Three Months Ended |
|
Twelve Months Ended |
|
12/31/21 |
9/30/21 |
12/31/20 |
|
12/31/21 |
12/31/20 |
Impact of Insurance
SPAC/Shift Technologies, Inc. and Insurance SPAC II/Metromile Inc.
on Adjusted Pre-Tax Income (Loss): |
|
|
|
|
|
|
Principal transactions and other revenue |
$ |
(8,636 |
) |
$ |
(17,470 |
) |
$ |
40,619 |
|
|
$ |
38,397 |
|
$ |
40,619 |
|
Equity-based compensation expense |
|
- |
|
|
- |
|
|
(11,700 |
) |
|
|
(13,068 |
) |
|
(11,700 |
) |
Other operating expense |
|
- |
|
|
(6 |
) |
|
- |
|
|
|
(13 |
) |
|
- |
|
Income (loss) from equity method affiliates |
|
- |
|
|
- |
|
|
(84 |
) |
|
|
(106 |
) |
|
(3,138 |
) |
Less: Net income (loss) attributable to the non-convertible
non-controlling interest |
|
- |
|
|
- |
|
|
10,640 |
|
|
|
21,204 |
|
|
8,919 |
|
Net impact to adjusted pre-tax income (loss) |
$ |
(8,636 |
) |
$ |
(17,476 |
) |
$ |
18,195 |
|
|
$ |
4,006 |
|
$ |
16,862 |
|
- Compensation and benefits expense
during the three months ended December 31, 2021 increased $3.1
million from the prior quarter and $0.2 million from the prior year
quarter. The increase from the prior quarter was primarily related
to accrued compensation related to the new issue and advisory
revenue in the current quarter. The number of Company employees was
118 as of December 31, 2021, compared to 115 as of September 30,
2021, and 87 as of December 31, 2020.
- Interest expense during the three
months ended December 31, 2021 was comparable to the prior quarter
and decreased $0.2 million from the prior year quarter.
- Income (loss) from equity method
affiliates during the three months ended December 31, 2021 was
$28.5 million, which was primarily due to one of the Company’s
equity method investees, the sponsor of Athena Technology
Acquisition Corp., closing its SPAC business combination with
Heliogen, Inc., generating income from equity method affiliates of
$28.4 million and related net income attributable to the
non-convertible non-controlling interest of $18.6 million. 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 benefit during the three
months ended December 31, 2021 was $2.2 million, compared to $0.2
million in the prior quarter, and $8.0 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 December 31, 2021, total
equity was $149.5 million, compared to $101.4 million as of
December 31, 2020; the non-convertible non-controlling interest
component of total equity was $31.9 million as of December 31, 2021
and $27.8 million as of December 31, 2020. Thus, the total equity
excluding the non-convertible non-controlling interest component
was $117.6 million as of December 31, 2021, a $44.0 million
increase from $73.6 million as of December 31, 2020.
- The Company’s Board of Directors
has declared a quarterly dividend of $0.25 per share and a special
dividend of $0.75 per share, both payable on April 5, 2022, to
stockholders of record as of March 22, 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, March 8, 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 (800) 459-5346 (domestic) or (203) 518-9544
(international), with participant passcode COHQ421, or request the
Cohen & Company earnings call. A replay of the call will be
available for three days following the call by dialing (800)
925-9539 or (402) 220-5389.
About Cohen & Company
Cohen & Company is a financial services
company specializing in fixed income markets and, more recently, in
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 December 31, 2021, the Company managed approximately
$2.4 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 December 31, 2021,
52.6% 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
Shift Technologies, Inc. and Metromile Inc. 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, and (r) 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 |
|
Twelve Months Ended |
|
|
|
12/31/21 |
|
9/30/21 |
|
12/31/20 |
|
12/31/21 |
|
12/31/20 |
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Net trading |
$ |
15,204 |
|
|
$ |
16,599 |
|
|
$ |
18,087 |
|
|
$ |
69,385 |
|
|
$ |
73,611 |
|
|
|
Asset management |
|
5,136 |
|
|
|
1,856 |
|
|
|
3,821 |
|
|
|
10,923 |
|
|
|
8,759 |
|
|
|
New issue and advisory |
|
17,209 |
|
|
|
8,838 |
|
|
|
1,734 |
|
|
|
28,736 |
|
|
|
2,234 |
|
|
|
Principal transactions and other revenue |
|
(10,507 |
) |
|
|
(20,709 |
) |
|
|
42,723 |
|
|
|
37,324 |
|
|
|
45,506 |
|
|
|
Total revenues |
|
27,042 |
|
|
|
6,584 |
|
|
|
66,365 |
|
|
|
146,368 |
|
|
|
130,110 |
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits |
|
23,634 |
|
|
|
20,577 |
|
|
|
23,479 |
|
|
|
85,048 |
|
|
|
59,902 |
|
|
|
Business development, occupancy, equipment |
|
990 |
|
|
|
869 |
|
|
|
671 |
|
|
|
3,365 |
|
|
|
2,708 |
|
|
|
Subscriptions, clearing, and execution |
|
2,562 |
|
|
|
2,581 |
|
|
|
2,517 |
|
|
|
10,307 |
|
|
|
9,887 |
|
|
|
Professional services and other operating |
|
2,404 |
|
|
|
1,585 |
|
|
|
1,838 |
|
|
|
7,684 |
|
|
|
7,068 |
|
|
|
Depreciation and amortization |
|
113 |
|
|
|
90 |
|
|
|
85 |
|
|
|
371 |
|
|
|
334 |
|
|
|
Impairment of goodwill |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
7,883 |
|
|
|
Total operating expenses |
|
29,703 |
|
|
|
25,702 |
|
|
|
28,590 |
|
|
|
106,775 |
|
|
|
87,782 |
|
|
|
Operating income (loss) |
|
(2,661 |
) |
|
|
(19,118 |
) |
|
|
37,775 |
|
|
|
39,593 |
|
|
|
42,328 |
|
|
|
Non-operating income
(expense) |
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(1,706 |
) |
|
|
(1,731 |
) |
|
|
(1,951 |
) |
|
|
(7,233 |
) |
|
|
(9,589 |
) |
|
|
Other non-operating income (expense) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,127 |
|
|
|
- |
|
|
|
Income (loss) from equity method affiliates |
|
28,498 |
|
|
|
2,857 |
|
|
|
(244 |
) |
|
|
36,010 |
|
|
|
(2,955 |
) |
|
|
Income (loss) before income tax expense (benefit) |
|
24,131 |
|
|
|
(17,992 |
) |
|
|
35,580 |
|
|
|
70,497 |
|
|
|
29,784 |
|
|
|
Income tax expense (benefit) |
|
(2,191 |
) |
|
|
(248 |
) |
|
|
(8,046 |
) |
|
|
(1,614 |
) |
|
|
(8,669 |
) |
|
|
Net income (loss) |
|
26,322 |
|
|
|
(17,744 |
) |
|
|
43,626 |
|
|
|
72,111 |
|
|
|
38,453 |
|
|
|
Less: Net income (loss) attributable to the convertible
non-controlling interest |
|
4,954 |
|
|
|
(11,221 |
) |
|
|
17,074 |
|
|
|
25,255 |
|
|
|
14,200 |
|
|
|
Less: Net income (loss) attributable to the non-convertible
non-controlling interest |
|
17,737 |
|
|
|
(3,094 |
) |
|
|
11,801 |
|
|
|
35,574 |
|
|
|
10,048 |
|
|
|
Net income (loss) attributable to Cohen & Company Inc. |
$ |
3,631 |
|
|
$ |
(3,429 |
) |
|
$ |
14,751 |
|
|
$ |
11,282 |
|
|
$ |
14,205 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
Basic |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable
to Cohen & Company Inc. |
$ |
3,631 |
|
|
$ |
(3,429 |
) |
|
$ |
14,751 |
|
|
$ |
11,282 |
|
|
$ |
14,205 |
|
|
|
Basic shares outstanding |
|
1,328 |
|
|
|
1,314 |
|
|
|
1,070 |
|
|
|
1,187 |
|
|
|
1,131 |
|
|
|
Net income (loss) attributable
to Cohen & Company Inc. per share |
$ |
2.73 |
|
|
$ |
(2.61 |
) |
|
$ |
13.79 |
|
|
$ |
9.50 |
|
|
$ |
12.56 |
|
|
|
Fully Diluted |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable
to Cohen & Company Inc. |
$ |
3,631 |
|
|
$ |
(3,429 |
) |
|
$ |
14,751 |
|
|
$ |
11,282 |
|
|
$ |
14,205 |
|
|
|
Net income (loss) attributable
to the convertible non-controlling interest |
|
4,954 |
|
|
|
(11,221 |
) |
|
|
17,074 |
|
|
|
25,255 |
|
|
|
14,200 |
|
|
|
Net interest attributable to
convertible debt, net of taxes |
|
301 |
|
|
|
- |
|
|
|
39 |
|
|
|
1,183 |
|
|
|
1,162 |
|
|
|
Income tax and conversion
adjustment |
|
2,836 |
|
|
|
237 |
|
|
|
7,924 |
|
|
|
1,828 |
|
|
|
9,452 |
|
|
|
Enterprise net income
(loss) |
$ |
11,722 |
|
|
$ |
(14,413 |
) |
|
$ |
39,788 |
|
|
$ |
39,548 |
|
|
$ |
39,019 |
|
|
|
Basic shares outstanding |
|
1,328 |
|
|
|
1,314 |
|
|
|
1,070 |
|
|
|
1,187 |
|
|
|
1,131 |
|
|
|
Unrestricted Operating LLC
membership units exchangeable into COHN shares |
|
2,856 |
|
|
|
2,856 |
|
|
|
2,803 |
|
|
|
2,851 |
|
|
|
2,801 |
|
|
|
Additional dilutive
shares |
|
1,320 |
|
|
|
- |
|
|
|
1,334 |
|
|
|
1,247 |
|
|
|
1,159 |
|
|
|
Fully diluted shares
outstanding |
|
5,504 |
|
|
|
4,170 |
|
|
|
5,207 |
|
|
|
5,285 |
|
|
|
5,091 |
|
|
|
Fully diluted net income
(loss) per share |
$ |
2.13 |
|
|
$ |
(3.46 |
) |
|
$ |
7.64 |
|
|
$ |
7.48 |
|
|
$ |
7.66 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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. |
$ |
3,631 |
|
|
$ |
(3,429 |
) |
|
$ |
14,751 |
|
|
$ |
11,282 |
|
|
$ |
14,205 |
|
|
|
Addback: Impairment of
goodwill |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
7,883 |
|
|
|
Addback (deduct): Other
non-operating income |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(2,127 |
) |
|
|
- |
|
|
|
Addback (deduct): Income tax
expense (benefit) |
|
(2,191 |
) |
|
|
(248 |
) |
|
|
(8,046 |
) |
|
|
(1,614 |
) |
|
|
(8,669 |
) |
|
|
Addback (deduct): Net income
(loss) attributable to the convertible non-controlling
interest |
|
4,954 |
|
|
|
(11,221 |
) |
|
|
17,074 |
|
|
|
25,255 |
|
|
|
14,200 |
|
|
|
Adjusted pre-tax income
(loss) |
|
6,394 |
|
|
|
(14,898 |
) |
|
|
23,779 |
|
|
|
32,796 |
|
|
|
27,619 |
|
|
|
Net interest attributable to
convertible debt |
|
390 |
|
|
|
- |
|
|
|
381 |
|
|
|
1,534 |
|
|
|
1,504 |
|
|
|
Enterprise pre-tax income
(loss) for fully diluted adjusted pre-tax income (loss) per share
calculation |
$ |
6,784 |
|
|
$ |
(14,898 |
) |
|
$ |
24,160 |
|
|
$ |
34,330 |
|
|
$ |
29,123 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fully diluted shares
outstanding |
|
5,504 |
|
|
|
4,170 |
|
|
|
5,207 |
|
|
|
5,285 |
|
|
|
5,091 |
|
|
|
Fully diluted adjusted pre-tax
income (loss) per share |
$ |
1.23 |
|
|
$ |
(3.57 |
) |
|
$ |
4.64 |
|
|
$ |
6.50 |
|
|
$ |
5.72 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COHEN & COMPANY INC. |
CONSOLIDATED BALANCE SHEETS |
(in thousands) |
|
|
|
|
|
|
|
|
December 31, 2021 |
|
|
|
|
|
(unaudited) |
|
December 31, 2020 |
|
|
Assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
50,567 |
|
|
$ |
41,996 |
|
|
|
Receivables from brokers, dealers, and clearing agencies |
|
68,392 |
|
|
|
52,917 |
|
|
|
Due from related parties |
|
4,581 |
|
|
|
2,812 |
|
|
|
Other receivables |
|
3,203 |
|
|
|
3,929 |
|
|
|
Investments - trading |
|
223,865 |
|
|
|
242,961 |
|
|
|
Other investments, at fair value |
|
56,033 |
|
|
|
58,540 |
|
|
|
Receivables under resale agreements |
|
3,175,645 |
|
|
|
5,716,343 |
|
|
|
Investment in equity method affiliates |
|
48,238 |
|
|
|
13,482 |
|
|
|
Deferred income taxes |
|
9,468 |
|
|
|
7,397 |
|
|
|
Goodwill |
|
109 |
|
|
|
109 |
|
|
|
Right-of-use asset - operating leases |
|
10,273 |
|
|
|
6,063 |
|
|
|
Other assets |
|
3,885 |
|
|
|
2,830 |
|
|
|
Total assets |
$ |
3,654,259 |
|
|
$ |
6,149,379 |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Payables to brokers, dealers, and clearing agencies |
$ |
160,896 |
|
|
$ |
156,678 |
|
|
|
Accounts payable and other liabilities |
|
22,701 |
|
|
|
46,251 |
|
|
|
Accrued compensation |
|
22,577 |
|
|
|
14,359 |
|
|
|
Trading securities sold, not yet purchased |
|
62,512 |
|
|
|
44,439 |
|
|
|
Other investments sold, not yet purchased |
|
2,488 |
|
|
|
7,415 |
|
|
|
Securities sold under agreements to repurchase |
|
3,171,415 |
|
|
|
5,713,212 |
|
|
|
Operating lease liability |
|
10,813 |
|
|
|
6,531 |
|
|
|
Redeemable Financial Instruments |
|
7,957 |
|
|
|
11,957 |
|
|
|
Debt |
|
43,394 |
|
|
|
47,100 |
|
|
|
Total liabilities |
|
3,504,753 |
|
|
|
6,047,942 |
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Voting nonconvertible preferred stock |
|
27 |
|
|
|
27 |
|
|
|
Common stock |
|
17 |
|
|
|
13 |
|
|
|
Additional paid-in capital |
|
72,006 |
|
|
|
65,031 |
|
|
|
Accumulated other comprehensive loss |
|
(905 |
) |
|
|
(821 |
) |
|
|
Accumulated deficit |
|
(9,730 |
) |
|
|
(20,341 |
) |
|
|
Total stockholders' equity |
|
61,415 |
|
|
|
43,909 |
|
|
|
Noncontrolling interest |
|
88,091 |
|
|
|
57,528 |
|
|
|
Total equity |
|
149,506 |
|
|
|
101,437 |
|
|
|
Total liabilities and equity |
$ |
3,654,259 |
|
|
$ |
6,149,379 |
|
|
|
|
|
|
|
|
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
impairment of goodwill, other non-operating income and income tax
expense (benefit), plus the net income (loss) attributable to the
convertible non-controlling interest. Impairment of goodwill has
been excluded from adjusted pre-tax income (loss) because it is a
non-recurring, non-cash item. 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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