Gleacher & Company Reports Fourth Quarter And Year End 2011 Financial Results

Pre-tax loss from continuing operations of $61.3 million for the year ended December 31, 2011 increased by $35.5 million compared to pre-tax loss from continuing operations of $25.8 million for the year ended December 31, 2010. Non-GAAP pre-tax income from continuing operations increased by $17.4 million to $20.9 million for the year ended December 31, 2011, compared to the comparable non-GAAP pre-tax income from continuing operations of $3.5 million for the year ended December 31, 2010.

Business Segment Results (including Non-GAAP results)
		Three Months Ended December 31,							Years Ended December 31,
(In thousands)		2011				2010			2011				2010
		(unaudited)							(unaudited)
Net revenues:
MBS/ABS & Rates		$	14,301			$	32,147		$	99,933			$	117,144
Corporate Credit			19,975				18,592			68,521				80,676
Investment Banking			3,346				11,658			33,070				45,441
ClearPoint			20,815				-			46,924				-
Net revenues - operating segments			58,437				62,397			248,448				243,261
Other			3,403				2,988		10,994 *					5,321
Total		$	61,840			$	65,385		$259,442 *				$	248,582
Pre-tax income/(loss) from continuing operations:
MBS/ABS & Rates		$	3,309			$6,120 *			$	31,452			$34,942 *
Corporate Credit			3,393			88 *				8,532			4,477 *
Investment Banking			(1,086	)		(4,801) *			7,458 *				4,640 *
ClearPoint			(779	)			-			(3,686	)			-
Pre-tax income - operating segments			4,837			1,407 *			43,756 *				44,059 *
Other			(4,473	)		(10,032) *			(22,889) *				(40,528) *
Total		$	364			$(8,625) *			$20,867 *				$3,531 *
*Designates non-GAAP financial results. A reconciliation of the Company’s GAAP results to non-GAAP financial results is set forth below under the caption “Non-GAAP Financial Results.”

MBS/ABS & Rates

Fourth Quarter 2011 vs. 2010

Net revenues declined by $17.8 million to $14.3 million for the quarter ended December 31, 2011, compared to $32.1 million in the fourth quarter of 2010. The decrease in net revenues was attributable to lower commissions and principal transactions revenues of $20.9 million due to losses of $2.5 million on asset-backed securities, compared to gains of $11.9 million in the prior year period, as well as lower trading volumes in the current period. Partially offsetting this decline was an increase in net interest income of $3.2 million due to higher inventory levels. Pre-tax income of $3.3 million for the quarter ended December 31, 2011 declined by $2.8 million, compared to non-GAAP pre-tax income of $6.1 million for the fourth quarter of 2010. This reduction is a direct result of the lower revenues, partially offset by lower variable compensation expense (as a result of the lower revenues). Non-GAAP pre-tax income of $6.1 million for the fourth quarter of 2010 was also impacted by higher compensation expense resulting from a change in vesting provisions to equity compensation awards expected to be granted as part of year-end compensation for services in 2010, which is further described below as part of the “Consolidated Compensation and Benefits Expenses” discussion.

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