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Gleacher & Company Reports First Quarter 2012 Financial Results

Gleacher & Company, Inc. (Nasdaq: GLCH) today reported net revenues of $64.7 million for the quarter ended March 31, 2012. On a GAAP basis, the Company reported net loss from continuing operations of ($4.7) million, or ($0.04) per diluted share, for the quarter ended March 31, 2012, compared to net income from continuing operations of $8.6 million, or $0.07 per diluted share, for the first quarter of 2011. The Company reported non-GAAP net loss from continuing operations of ($3.8) million, or ($0.03) per diluted share, for the quarter ended March 31, 2012, compared to non-GAAP net income from continuing operations of $6.3 million, or $0.05 per diluted share, for the first quarter of 2011. A reconciliation of the Company’s GAAP results to these non-GAAP results is discussed below under “Non-GAAP Financial Results.”

Highlights

   

 

Revenues improved as compared to the fourth quarter of 2011. Core business unit results were weaker year-over-year, largely in MBS/ABS & Rates, particularly in asset-backed securities trading.

 

New leadership appointments in the Corporate Credit business and the MBS/ABS & Rates business.

 

Continued planned compensation adjustments, particularly for senior management, to better align employee and stockholder returns, and drive targeted compensation/revenue ratio.

 

The Company’s ClearPoint subsidiary experienced a number of issues, including covenant pressure and outright breaches, mismatch in loan originations and sales, and curtailment events that required the Company to provide payment guarantees. In response to these issues, the following adjustments were made to ClearPoint’s business:

 

-- Restructured senior management

-- Implemented limit methodologies to manage the originations/sales imbalance
-- Adjusted operational procedures to improve the pace at which loans are sold
 
These actions have stabilized ClearPoint’s business operations, and have substantially diminished the Company’s exposures under the payment guarantees.
 

Thomas Hughes, Chief Executive Officer, said, “The first quarter market environment was challenging. That said, while we are disappointed with our overall results, our performance excluding ClearPoint was solid given market factors, and we are very excited about the leadership appointments we have made. I believe each of our businesses is well positioned for the revenue potential going forward.”

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