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Gleacher & Company Reports First Quarter 2012 Financial Results

First Quarter 2012 vs. 2011

Net revenues declined by $24.7 million to $64.7 million for the quarter ended March 31, 2012, compared to $89.4 million ($87.1 million on a non-GAAP basis) in the first quarter of 2011. This decline was primarily attributable to decreases of $31.4 million in the MBS/ABS & Rates segment and $3.1 million in the Investment Banking segment, partially offset by increases of $9.1 million in ClearPoint and $1.2 million in the Corporate Credit segment and higher investment gains of $0.8 million resulting from the change in value of the Company’s FATV investment.

Pre-tax (loss)/income from continuing operations of ($5.3) million for the quarter ended March 31, 2012 declined by $20.0 million compared to pre-tax (loss)/income from continuing operations of $14.7 million for the quarter ended March 31, 2011. Non-GAAP pre-tax (loss)/income from continuing operations of ($3.6) million declined by $16.0 million compared to non-GAAP pre-tax (loss)/income from continuing operations of $12.4 million in the first quarter of 2011.

   

Business Segment Results (including Non-GAAP results)

 
Three Months Ended

March 31,

(In thousands) 2012     2011
(unaudited)
Net revenues:    
MBS/ABS & Rates $ 20,331 $ 51,706
Corporate Credit 21,717 20,464
Investment Banking 4,533 7,644
ClearPoint   15,545         6,358
Net revenues - operating segments 62,126 86,172
Other   2,617        

887

*

Total $ 64,743       $

87,059

*

 
 
Pre-tax (loss)/income from continuing operations:
MBS/ABS & Rates $ 5,487 $ 18,865
Corporate Credit

962

*

2,212
Investment Banking 579 1,263
ClearPoint  

(2,853

)

     

(1,120

)

Pre-tax income - operating segments

4,175

*

21,220
Other  

(7,807

)

     

(8,822)

*

Total $

(3,632

)*

    $

12,398

*

 

*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

First Quarter 2012 vs. 2011

Net revenues declined by $31.4 million to $20.3 million for the quarter ended March 31, 2012, compared to $51.7 million in the first quarter of 2011. The decrease in net revenues was attributable to lower commissions and principal transactions revenues of $32.7 million, primarily resulting from gains on asset-backed securities of $36.2 million recognized in the first quarter of 2011. Partially offsetting this decline was an increase in net interest income of $1.3 million due to higher inventory levels and coupon interest. Pre-tax income of $5.5 million for the quarter ended March 31, 2012 declined by $13.4 million, compared to pre-tax income of $18.9 million for the first quarter of 2011. This reduction is a direct result of the lower revenues, partially offset by lower variable compensation expense (as a result of the lower revenues).

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