KBW, Inc. (NYSE: KBW), a full-service investment bank that specializes in the financial services sector, today announced revenues of $50.6 million and a non-GAAP operating net loss of $3.1 million, or $0.11 per diluted share, for the quarter ended September 30, 2012. This compares with total revenues of $50.4 million and a non-GAAP operating net loss of $14.6 million, or $0.47 per diluted share, for the quarter ended September 30, 2011 and total revenues of $55.4 million and a non-GAAP operating net loss of $4.7 million, or $0.16 per diluted share, for the second quarter of 2012. See “Non-GAAP Financial Measures” below for a reconciliation of our non-GAAP operating results to our GAAP results. The GAAP net loss for the third quarter of 2012 was $5.2 million, or $0.18 per diluted share. The GAAP net loss for the third quarter of 2011 was $15.7 million, or $0.51 per diluted share. The GAAP net loss for the second quarter of 2012 was $5.4 million, or $0.19 per diluted share.
Also announced today is the exit from operations in Asia by closing the Hong Kong and Tokyo offices by December 31, 2012. The net loss for the nine months ended September 30, 2012 for the Asia operations of the company was approximately $5 million. Estimated costs associated with exiting the business in Asia are approximately $4 million, primarily for employee severance, and are expected to be recognized in the fourth quarter. We will report the results of our Asia operations as a discontinued operation in the fourth quarter.
Tom Michaud, Chief Executive Officer and President said, “Industry factors continued to play a meaningful role in KBW’s financial results for the third quarter. The steep drop in equity market traded volumes and a continuation of a low level of bank industry capital markets’ activity had a strong impact on our quarter. We continue to see a building pipeline in our merger and acquisition business and signs of an improving calendar of capital raising.