Cohen & Company Inc. (NYSE American: COHN), a financial
services firm specializing in an expanding range of capital markets
and asset management services, today reported financial results for
its fourth quarter and full year ended December 31, 2022.
Summary Operating Results
| |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
($ in thousands) |
12/31/22 |
|
9/30/22 |
|
12/31/21 |
|
12/31/22 |
|
12/31/21 |
|
|
|
|
|
|
|
|
|
|
|
|
Net trading |
$ |
9,644 |
|
|
$ |
7,966 |
|
|
$ |
15,204 |
|
|
$ |
40,009 |
|
|
$ |
69,385 |
|
|
Asset management |
|
1,761 |
|
|
|
3,456 |
|
|
|
5,136 |
|
|
|
9,004 |
|
|
|
10,923 |
|
|
New issue and advisory |
|
4,235 |
|
|
|
13,235 |
|
|
|
17,209 |
|
|
|
24,721 |
|
|
|
28,736 |
|
|
Principal transactions and other revenue |
|
(3,190 |
) |
|
|
(1,192 |
) |
|
|
(10,507 |
) |
|
|
(29,347 |
) |
|
|
37,324 |
|
|
Total revenues |
|
12,450 |
|
|
|
23,465 |
|
|
|
27,042 |
|
|
|
44,387 |
|
|
|
146,368 |
|
|
Compensation and benefits |
|
8,970 |
|
|
|
15,227 |
|
|
|
23,634 |
|
|
|
50,290 |
|
|
|
85,048 |
|
|
Non-compensation operating expenses |
|
6,251 |
|
|
|
5,390 |
|
|
|
6,069 |
|
|
|
22,060 |
|
|
|
21,727 |
|
|
Operating income |
|
(2,771 |
) |
|
|
2,848 |
|
|
|
(2,661 |
) |
|
|
(27,963 |
) |
|
|
39,593 |
|
|
Interest expense, net |
|
(1,179 |
) |
|
|
(1,346 |
) |
|
|
(1,706 |
) |
|
|
(4,982 |
) |
|
|
(7,233 |
) |
|
Other non-operating income |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,127 |
|
|
Income (loss) from equity method affiliates |
|
(6,401 |
) |
|
|
618 |
|
|
|
28,498 |
|
|
|
(20,931 |
) |
|
|
36,010 |
|
|
Income (loss) before income tax expense (benefit) |
|
(10,351 |
) |
|
|
2,120 |
|
|
|
24,131 |
|
|
|
(53,876 |
) |
|
|
70,497 |
|
|
Income tax expense (benefit) |
|
1,260 |
|
|
|
1,761 |
|
|
|
(4,117 |
) |
|
|
4,794 |
|
|
|
(3,541 |
) |
|
Net income (loss) |
|
(11,611 |
) |
|
|
359 |
|
|
|
28,248 |
|
|
|
(58,670 |
) |
|
|
74,038 |
|
|
Less: Net income (loss) attributable to the non-convertible
non-controlling interest |
|
(4,223 |
) |
|
|
(109 |
) |
|
|
17,738 |
|
|
|
(23,203 |
) |
|
|
35,574 |
|
|
Enterprise net income (loss) |
|
(7,388 |
) |
|
|
468 |
|
|
|
10,510 |
|
|
|
(35,467 |
) |
|
|
38,464 |
|
|
Less: Net income (loss) attributable to the convertible
non-controlling interest |
|
(4,387 |
) |
|
|
1,387 |
|
|
|
6,354 |
|
|
|
(22,078 |
) |
|
|
26,656 |
|
|
Net income (loss) attributable to Cohen & Company Inc. |
$ |
(3,001 |
) |
|
$ |
(919 |
) |
|
$ |
4,156 |
|
|
$ |
(13,389 |
) |
|
$ |
11,808 |
|
|
Fully diluted net income (loss) per share |
$ |
(2.10 |
) |
|
$ |
(0.64 |
) |
|
$ |
2.43 |
|
|
$ |
(9.43 |
) |
|
$ |
7.83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax income (loss) |
$ |
(6,128 |
) |
|
$ |
2,229 |
|
|
$ |
6,393 |
|
|
$ |
(30,673 |
) |
|
$ |
32,796 |
|
|
Fully diluted adjusted pre-tax income (loss) per share |
$ |
(1.13 |
) |
|
$ |
0.41 |
|
|
$ |
1.23 |
|
|
$ |
(5.62 |
) |
|
$ |
6.50 |
|
| |
|
|
|
|
|
|
|
|
|
Adjusted pre-tax income (loss) is not a measure
recognized under U.S. generally accepted accounting principles
(“GAAP”). See Note 1 below.
Lester Brafman, Chief Executive Officer of Cohen
& Company, said, “Continued turbulent market conditions
impacted our reported financial results in the quarter,
particularly from negative mark-to-market adjustments on our
principal investing portfolio. Our principal investing segment
accounted for substantially all of our consolidated adjusted
pre-tax loss for the quarter and for the full year. Despite this
challenging market backdrop, our Cohen & Company Capital
Markets investment banking team continues to grow market share as
an advisor and agent, with multiple recently announced leadership
engagements. We remain focused on our strategic objectives, and we
are confident that past investments will translate into higher
revenues in the future, especially from the Cohen & Company
Capital Markets team. As we move forward, we are committed to
enhancing stockholder value, and in the fourth quarter we continued
to pay our quarterly dividend.”
Financial Highlights
- Net loss attributable to Cohen
& Company Inc. was $3.0 million, or $2.10 per diluted share,
for the three months ended December 31, 2022, compared to net loss
of $0.9 million, or $0.64 per diluted share, for the three months
ended September 30, 2022, and net income of $4.2 million, or $2.43
per diluted share, for the three months ended December 31, 2021.
Adjusted pre-tax loss was $6.1 million, or $1.13 per diluted share,
for the three months ended December 31, 2022, compared to adjusted
pre-tax income of $2.2 million, or $0.41 per diluted share, for the
three months ended September 30, 2022, and adjusted pre-tax income
of $6.4 million, or $1.23 per diluted share, for the three months
ended December 31, 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 $12.5 million for the
three months ended December 31, 2022, compared to $23.5 million for
the prior quarter and $27.0 million for the prior year quarter.
- Net trading revenue was $9.6
million for the three months ended December 31, 2022, up $1.7
million from the prior quarter and down $5.6 million from the prior
year quarter. The increase from the prior quarter was due primarily
to higher trading revenue from our mortgage and municipal groups,
while the decrease from the prior year quarter was due primarily to
lower trading revenue from our mortgage and corporate groups.
- Asset management revenue was $1.8
million for the three months ended December 31, 2022, down $1.7
million from the prior quarter and down $3.4 million from the prior
year quarter. The decrease from the prior quarter was due primarily
to the successful auction of an Alesco collateralized debt
obligation (“CDO”) in September 2022, and the accompanying $1.6
million of subordinated management fees in arrears that were
recorded in the prior quarter. The decrease from the prior year
quarter was due primarily to an incentive allocation earned by the
manager of the Company’s SPAC funds in the prior year quarter.
- New issue and advisory revenue was
$4.2 million for the three months ended December 31, 2022, down
$9.0 million from the prior quarter and $13.0 million from the
prior year quarter. In the current quarter, the Cohen & Company
Capital Markets investment banking team generated $2.9 million, the
European insurance origination team generated $1.2 million, and the
commercial real estate origination team generated $0.1 million of
the new issue and advisory revenue.
- Principal transactions and other
revenue was negative $3.2 million for the three months ended
December 31, 2022, compared to negative $1.2 million in the prior
quarter and negative $10.5 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 December 31, 2022 decreased $6.3
million from the prior quarter and $14.7 million from the prior
year quarter. The number of Company employees was 121 as of
December 31, 2022, compared to 122 as of September 30, 2022, and
118 as of December 31, 2021.
- Interest expense during the three
months ended December 31, 2022 decreased $0.2 million from the
prior quarter and $0.5 million from the prior year quarter.
- Loss from equity method affiliates
for the three months ended December 31, 2022 was $6.4 million,
compared to income from equity method affiliates of $0.6 million
for the prior quarter and income from equity method affiliates of
$28.5 million for the prior year quarter. The liquidation of the
Company’s sponsored SPAC, INSU Acquisition Corp. III, accounted for
$4.8 million of the loss from equity method affiliates during the
three months ended December 31, 2022, which is offset by a $4.2
million credit recorded in the net income (loss) attributable to
the non-convertible non-controlling interest line item. Income
(loss) from equity method affiliates also fluctuates depending on
the timing of the closing of any 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 December 31, 2022 was $1.3 million, compared to $1.8
million in the prior quarter, and income tax benefit of $4.1
million in the prior year quarter. The Company will continue to
evaluate its operations on a quarterly basis and may adjust 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, 2022, total
equity was $94.0 million, compared to $151.4 million as of December
31, 2021; the non-convertible non-controlling interest component of
total equity was $17 thousand as of December 31, 2022 and $31.9
million as of December 31, 2021. Thus, the total equity excluding
the non-convertible non-controlling interest component was $94.0
million as of December 31, 2022, a $25.6 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
April 5, 2023, to stockholders of record as of March 22, 2023. 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 7, 2023, 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, with participant passcode 13736638.
About Cohen & Company
Cohen & Company is a financial services
company specializing in 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 gestation 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 S.A. in Europe. A division of JVB, Cohen
& Company Capital Markets is the Company’s full-service
boutique investment bank with a focus on mergers and acquisitions,
capital markets, and SPAC advisory. The Asset Management segment
manages assets through collateralized debt obligations, managed
accounts, and investment funds. As of December 31, 2022, the
Company managed approximately $2.1 billion in primarily fixed
income assets in a variety of asset classes including US and
European trust preferred securities, subordinated debt, and
corporate loans. 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 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 inflation, raising interest rates, and the Russian /Ukrainian
war, (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) a reduction in the volume of
investments into SPACs, (n) the difficulty in identifying potential
business combinations as a result of increased competition in the
SPAC market, (o) 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, (p) the possibility
that the Company will stop paying quarterly dividends to its
stockholders, (q) the possibility that the Company will incur
additional losses liquidating collateral related to a reverse repo
with now bankrupt First Guaranty Mortgage Corporation, (r) the
impacts of rising interest rates and inflation, and (s) 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 |
|
|
|
|
12/31/22 |
|
9/30/22 |
|
12/31/21 |
|
12/31/22 |
|
12/31/21 |
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Net trading |
$ |
9,644 |
|
|
$ |
7,966 |
|
|
$ |
15,204 |
|
|
$ |
40,009 |
|
|
$ |
69,385 |
|
|
|
|
Asset management |
|
1,761 |
|
|
|
3,456 |
|
|
|
5,136 |
|
|
|
9,004 |
|
|
|
10,923 |
|
|
|
|
New issue and advisory |
|
4,235 |
|
|
|
13,235 |
|
|
|
17,209 |
|
|
|
24,721 |
|
|
|
28,736 |
|
|
|
|
Principal transactions and other revenue |
|
(3,190 |
) |
|
|
(1,192 |
) |
|
|
(10,507 |
) |
|
|
(29,347 |
) |
|
|
37,324 |
|
|
|
|
Total revenues |
|
12,450 |
|
|
|
23,465 |
|
|
|
27,042 |
|
|
|
44,387 |
|
|
|
146,368 |
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits |
|
8,970 |
|
|
|
15,227 |
|
|
|
23,634 |
|
|
|
50,290 |
|
|
|
85,048 |
|
|
|
|
Business development, occupancy, equipment |
|
1,299 |
|
|
|
1,234 |
|
|
|
990 |
|
|
|
5,076 |
|
|
|
3,365 |
|
|
|
|
Subscriptions, clearing, and execution |
|
2,249 |
|
|
|
2,112 |
|
|
|
2,562 |
|
|
|
8,274 |
|
|
|
10,307 |
|
|
|
|
Professional services and other operating |
|
2,560 |
|
|
|
1,905 |
|
|
|
2,404 |
|
|
|
8,153 |
|
|
|
7,684 |
|
|
|
|
Depreciation and amortization |
|
143 |
|
|
|
139 |
|
|
|
113 |
|
|
|
557 |
|
|
|
371 |
|
|
|
|
Total operating expenses |
|
15,221 |
|
|
|
20,617 |
|
|
|
29,703 |
|
|
|
72,350 |
|
|
|
106,775 |
|
|
|
|
Operating income (loss) |
|
(2,771 |
) |
|
|
2,848 |
|
|
|
(2,661 |
) |
|
|
(27,963 |
) |
|
|
39,593 |
|
|
|
|
Non-operating income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(1,179 |
) |
|
|
(1,346 |
) |
|
|
(1,706 |
) |
|
|
(4,982 |
) |
|
|
(7,233 |
) |
|
|
|
Other non-operating income (expense) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,127 |
|
|
|
|
Income (loss) from equity method affiliates |
|
(6,401 |
) |
|
|
618 |
|
|
|
28,498 |
|
|
|
(20,931 |
) |
|
|
36,010 |
|
|
|
|
Income (loss) before income tax expense (benefit) |
|
(10,351 |
) |
|
|
2,120 |
|
|
|
24,131 |
|
|
|
(53,876 |
) |
|
|
70,497 |
|
|
|
|
Income tax expense (benefit) |
|
1,260 |
|
|
|
1,761 |
|
|
|
(4,117 |
) |
|
|
4,794 |
|
|
|
(3,541 |
) |
|
|
|
Net income (loss) |
|
(11,611 |
) |
|
|
359 |
|
|
|
28,248 |
|
|
|
(58,670 |
) |
|
|
74,038 |
|
|
|
|
Less: Net income (loss) attributable to the non-convertible
non-controlling interest |
|
(4,223 |
) |
|
|
(109 |
) |
|
|
17,738 |
|
|
|
(23,203 |
) |
|
|
35,574 |
|
|
|
|
Enterprise net income (loss) |
|
(7,388 |
) |
|
|
468 |
|
|
|
10,510 |
|
|
|
(35,467 |
) |
|
|
38,464 |
|
|
|
|
Less: Net income (loss) attributable to the convertible
non-controlling interest |
|
(4,387 |
) |
|
|
1,387 |
|
|
|
6,354 |
|
|
|
(22,078 |
) |
|
|
26,656 |
|
|
|
|
Net income (loss) attributable to Cohen & Company Inc. |
$ |
(3,001 |
) |
|
$ |
(919 |
) |
|
$ |
4,156 |
|
|
$ |
(13,389 |
) |
|
$ |
11,808 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Cohen & Company Inc. |
$ |
(3,001 |
) |
|
$ |
(919 |
) |
|
$ |
4,156 |
|
|
$ |
(13,389 |
) |
|
$ |
11,808 |
|
|
|
|
Basic shares outstanding |
|
1,429 |
|
|
|
1,429 |
|
|
|
1,328 |
|
|
|
1,420 |
|
|
|
1,187 |
|
|
|
|
Net income (loss) attributable to Cohen & Company Inc. per
share |
$ |
(2.10 |
) |
|
$ |
(0.64 |
) |
|
$ |
3.13 |
|
|
$ |
(9.43 |
) |
|
$ |
9.95 |
|
|
|
|
Fully Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Cohen & Company Inc. |
$ |
(3,001 |
) |
|
$ |
(919 |
) |
|
$ |
4,156 |
|
|
$ |
(13,389 |
) |
|
$ |
11,808 |
|
|
|
|
Net income (loss) attributable to the convertible non-controlling
interest |
|
- |
|
|
|
- |
|
|
|
6,354 |
|
|
|
- |
|
|
|
26,656 |
|
|
|
|
Net interest attributable to convertible debt, net of taxes |
|
- |
|
|
|
- |
|
|
|
301 |
|
|
|
- |
|
|
|
1,183 |
|
|
|
|
Income tax and conversion adjustment |
|
- |
|
|
|
- |
|
|
|
2,583 |
|
|
|
- |
|
|
|
1,719 |
|
|
|
|
Net income (loss) attributable to Cohen & Company Inc. for
fully diluted net income (loss) per share calculation |
$ |
(3,001 |
) |
|
$ |
(919 |
) |
|
$ |
13,394 |
|
|
$ |
(13,389 |
) |
|
$ |
41,366 |
|
|
|
|
Basic shares outstanding |
|
1,429 |
|
|
|
1,429 |
|
|
|
1,328 |
|
|
|
1,420 |
|
|
|
1,187 |
|
|
|
|
Unrestricted Operating LLC membership units exchangeable into COHN
shares |
|
- |
|
|
|
- |
|
|
|
2,856 |
|
|
|
- |
|
|
|
2,851 |
|
|
|
|
Additional dilutive shares |
|
- |
|
|
|
- |
|
|
|
1,320 |
|
|
|
- |
|
|
|
1,247 |
|
|
|
|
Fully diluted shares outstanding (1) |
|
1,429 |
|
|
|
1,429 |
|
|
|
5,504 |
|
|
|
1,420 |
|
|
|
5,285 |
|
|
|
|
Fully diluted net income (loss) per share |
$ |
(2.10 |
) |
|
$ |
(0.64 |
) |
|
$ |
2.43 |
|
|
$ |
(9.43 |
) |
|
$ |
7.83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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. |
$ |
(3,001 |
) |
|
$ |
(919 |
) |
|
$ |
4,156 |
|
|
$ |
(13,389 |
) |
|
$ |
11,808 |
|
|
|
|
Addback (deduct): Other non-operating income |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(2,127 |
) |
|
|
|
Addback (deduct): Income tax expense (benefit) |
|
1,260 |
|
|
|
1,761 |
|
|
|
(4,117 |
) |
|
|
4,794 |
|
|
|
(3,541 |
) |
|
|
|
Addback (deduct): Net income (loss) attributable to the convertible
non-controlling interest |
|
(4,387 |
) |
|
|
1,387 |
|
|
|
6,354 |
|
|
|
(22,078 |
) |
|
|
26,656 |
|
|
|
|
Adjusted pre-tax income (loss) |
|
(6,128 |
) |
|
|
2,229 |
|
|
|
6,393 |
|
|
|
(30,673 |
) |
|
|
32,796 |
|
|
|
|
Net interest attributable to convertible debt |
|
- |
|
|
|
- |
|
|
|
390 |
|
|
|
327 |
|
|
|
1,534 |
|
|
|
|
Enterprise pre-tax income (loss) for fully diluted adjusted pre-tax
income (loss) per share calculation |
$ |
(6,128 |
) |
|
$ |
2,229 |
|
|
$ |
6,783 |
|
|
$ |
(30,346 |
) |
|
$ |
34,330 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted fully diluted shares outstanding (2) |
|
5,424 |
|
|
|
5,402 |
|
|
|
5,504 |
|
|
|
5,398 |
|
|
|
5,285 |
|
|
|
|
Fully diluted adjusted pre-tax income (loss) per share |
$ |
(1.13 |
) |
|
$ |
0.41 |
|
|
$ |
1.23 |
|
|
$ |
(5.62 |
) |
|
$ |
6.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 (a)
unrestricted Operating LLC units exchangeable into COHN shares at
all times, including weighted restricted units, and (b) weighted
restricted shares, 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 interest. |
|
|
COHEN & COMPANY INC. |
|
CONSOLIDATED BALANCE SHEETS |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
December 31, 2022 |
|
|
|
|
|
|
(unaudited) |
|
December 31, 2021 |
|
|
|
Assets |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
29,101 |
|
|
$ |
50,567 |
|
|
|
|
Receivables from brokers, dealers, and clearing agencies |
|
140,933 |
|
|
|
68,392 |
|
|
|
|
Due from related parties |
|
787 |
|
|
|
4,581 |
|
|
|
|
Other receivables |
|
9,527 |
|
|
|
3,203 |
|
|
|
|
Investments - trading |
|
211,828 |
|
|
|
223,865 |
|
|
|
|
Other investments, at fair value |
|
28,022 |
|
|
|
56,033 |
|
|
|
|
Receivables under resale agreements |
|
437,692 |
|
|
|
3,175,645 |
|
|
|
|
Investment in equity method affiliates |
|
8,929 |
|
|
|
48,238 |
|
|
|
|
Deferred income taxes |
|
6,934 |
|
|
|
11,513 |
|
|
|
|
Goodwill |
|
109 |
|
|
|
109 |
|
|
|
|
Right-of-use asset - operating leases |
|
9,647 |
|
|
|
10,273 |
|
|
|
|
Other assets |
|
3,546 |
|
|
|
3,885 |
|
|
|
|
Total assets |
$ |
887,055 |
|
|
$ |
3,656,304 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Payables to brokers, dealers, and clearing agencies |
$ |
134,985 |
|
|
$ |
160,896 |
|
|
|
|
Accounts payable and other liabilities |
|
11,439 |
|
|
|
22,819 |
|
|
|
|
Accrued compensation |
|
12,434 |
|
|
|
22,577 |
|
|
|
|
Trading securities sold, not yet purchased |
|
133,957 |
|
|
|
62,512 |
|
|
|
|
Other investments sold, not yet purchased |
|
78 |
|
|
|
2,488 |
|
|
|
|
Securities sold under agreements to repurchase |
|
452,797 |
|
|
|
3,171,415 |
|
|
|
|
Operating lease liability |
|
10,447 |
|
|
|
10,813 |
|
|
|
|
Redeemable financial instruments |
|
7,868 |
|
|
|
7,957 |
|
|
|
|
Debt |
|
29,024 |
|
|
|
43,394 |
|
|
|
|
Total liabilities |
|
793,029 |
|
|
|
3,504,871 |
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Voting non-convertible preferred stock |
|
27 |
|
|
|
27 |
|
|
|
|
Common stock |
|
17 |
|
|
|
17 |
|
|
|
|
Additional paid-in capital |
|
72,801 |
|
|
|
72,006 |
|
|
|
|
Accumulated other comprehensive loss |
|
(955 |
) |
|
|
(905 |
) |
|
|
|
Accumulated deficit |
|
(25,151 |
) |
|
|
(9,204 |
) |
|
|
|
Total stockholders' equity |
|
46,739 |
|
|
|
61,941 |
|
|
|
|
Non-controlling interest |
|
47,287 |
|
|
|
89,492 |
|
|
|
|
Total equity |
|
94,026 |
|
|
|
151,433 |
|
|
|
|
Total liabilities and equity |
$ |
887,055 |
|
|
$ |
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 |
|
Cohen & (AMEX:COHN)
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