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IFMI Reports First Quarter 2011 Financial Results

Stock quotes in this article: IFMI

Institutional Financial Markets, Inc. (NYSE AMEX: IFMI), a leading investment firm specializing in credit-related fixed income investments, today reported financial results for the quarter ended March 31, 2011.

  • Net trading revenue increased 20% to $27.3 million for the three months ended March 31, 2011, as compared to $22.8 million for the three months ended March 31, 2010. This increase was primarily the result of the Company’s growth in equity derivatives trading as well as the JVB acquisition.
  • Revenue for the first quarter 2011 was $32.3 million, as compared to $41.7 million for the three months ended March 31, 2010. The decrease in revenue was primarily the result of a $12.6 million reduction in principal transactions and other income, which more than offset the increase in net trading revenue. The reduction in principal transactions and other income was in large part due to net unrealized losses on the Company’s investment in Star Asia Finance of $2.0 million during the first quarter of 2011, which compares unfavorably to gains on the Company’s investments in Star Asia Finance and the first Strategos Deep Value Fund of $9.3 million and $1.3 million, respectively, during the first quarter of 2010. The change in fair value of the Company’s investment in Star Asia was primarily the result of the reduction in value of certain of Star Asia’s investments that were impacted by the natural disaster in Japan. The first Strategos Deep Value Fund was substantially liquidated during 2010.
  • Adjusted operating income was $4.2 million, or $0.26 per diluted share, for the three months ended March 31, 2011, as compared to $7.7 million, or $0.49 per diluted share, for the three months ended March 31, 2010. This reduction in adjusted operating income was a result of the decrease in revenue, and was partially mitigated by lower compensation and benefits expense in the quarter. Adjusted operating income is not a measure recognized under generally accepted accounting principles. Please see discussion of non-GAAP measures below.
  • Net income attributable to IFMI was $0.4 million, or $0.03 per diluted share, for the three months ended March 31, 2011, as compared to $2.9 million, or $0.28 per diluted share, for the three months ended March 31, 2010.

Daniel G. Cohen, Chairman and Chief Executive Officer of the Company, said, “We are pleased to report positive adjusted operating income and growth in net trading revenue during the quarter, and remain focused on growing our business. In addition, our solid capital position has enabled us to once again return value to our stockholders through a dividend. We look forward to continuing to enhance stockholder value and view the recent agreement with PrinceRidge as a transformative transaction for our platform.”

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