This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Gleacher & Company Reports Second Quarter 2012 Financial Results

Stocks in this article: GLCH

- impairment of goodwill recorded during the second quarter of 2012,

- valuation allowance on deferred tax assets recorded during the second quarter of 2012,

- severance expense recorded during the first quarter of 2012,

- compensation expense related to the resignation of the former interim CEO in the second quarter of 2011, and

- the bargain purchase gain related to the ClearPoint acquisition in the first quarter of 2011.

Impairment of Goodwill

During the second quarter of 2012, the Company recorded a $21.1 million impairment of goodwill relating to both the MBS & Rates (previously captioned MBS/ABS & Rates) and Investment Banking reporting units. The evaluation was performed and the impairment was recognized as a result of the Company’s market capitalization remaining significantly below its book value for an extended period of time.

Deferred Tax Asset – Valuation Allowance

During the second quarter of 2012, the Company provided for a valuation allowance of $32.1 million on its net deferred tax assets, as the Company entered into a cumulative loss in the most recent three-year period, inclusive of the current quarter operating results. Such an assessment generally weighs the Company’s recent financial reporting losses to a greater extent than its projections of future taxable income.

The impairment of goodwill and the valuation allowance on the Company’s deferred tax assets are non-cash charges and had no impact to the Company’s liquidity or the net capital of the Company’s broker-dealer subsidiary.

For detailed information on the adjustments made, and a reconciliation of the non-GAAP financial results included in this press release to the most directly comparable GAAP financial metrics, refer to “Non-GAAP Financial Results” below. While the Company believes that the non-GAAP financial results included herein are instructive, they should only be considered together with their corresponding GAAP financial metrics.

 
Business Segment Results (including Non-GAAP results)
             

Three Months Ended

Six Months Ended

June March June June June
(In thousands of dollars) 2012 2012 2011 2012 2011
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
 
Net revenues:
Investment Banking $ 8,730 $ 4,533 $ 8,956 $ 13,263 $ 16,600

MBS & Rates 1

5,282 20,331 23,770 25,613 75,476

Credit Products 2

17,872 21,717 14,851 39,589 35,316
ClearPoint   11,316     15,545     7,008     26,861     13,366  
Net revenues - operating segments 43,200 62,126 54,585 105,326 140,758
Other   1,447     2,617     1,794     4,064    

2,680

*

Total $ 44,647   $ 64,743   $ 56,379   $ 109,390   $

143,438

*

 
Pre-tax (loss)/income from continuing operations:
Investment Banking $ 2,195 $ 579 $ 3,728 $ 2,774 $ 4,991
MBS & Rates (1,746 ) 5,487 6,542 3,741 25,407
Credit Products 1,285

962

*

631

2,247

*

2,843
ClearPoint   (2,512 )  

(2,853

)   (1,451 )   (5,365 )   (2,571 )
Pre-tax (loss)/income - operating segments (778 )

4,175

*

9,450 3,397 30,670
Other  

(9,877

)*

  (7,807 )  

(5,349

)*

 

(17,684

)*

 

(14,171

)*

Total $

(10,655

)*

$

(3,632

)*

$

4,101

*

$

(14,287

)*

$

16,499

*

 
*Designates non-GAAP financial results. A reconciliation of the Company’s GAAP results to its non-GAAP financial results is set forth below under the caption “Non-GAAP Financial Results.”
 

________________________________

3 of 17

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs