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KBW, Inc. Announces 2012 Third Quarter Results And Declares Quarterly Cash Dividend

Our management utilized non-GAAP calculations in understanding and analyzing our financial results. Specifically, our management believes that these Non-GAAP Financial Measures provided useful information by excluding the restructuring charges related to workforce reductions, which may not be indicative of our core operating results and business outlook. Our management believes that these Non-GAAP Financial Measures will allow for a better evaluation of the operating performance of our business and facilitate meaningful comparison of our results in the current period to those in prior periods and future periods. Such periods did not and likely will not include the impact of significant restructuring charges. Our reference to these Non-GAAP Financial Measures should not be considered as a substitute for results that are presented in a manner consistent with GAAP. These Non-GAAP Financial Measures are provided to enhance investors’ overall understanding of our current financial performance.

A limitation of utilizing these Non-GAAP Financial Measures is that the GAAP accounting effects of these events do in fact reflect the underlying financial results of our business and these effects should not be ignored in evaluating and analyzing our financial results. Therefore, management believes that our GAAP measures of total expenses, net loss and diluted earnings per share and the same respective Non-GAAP Financial Measures of our financial performance should be considered together.

The following provides details with respect to reconciling total expenses, net loss and diluted earnings per share on a GAAP basis for the three and nine months ended September 30, 2012 and 2011 and three months ended June 30, 2012 to the aforementioned captions on a non-GAAP basis.

  Three Months Ended September 30, 2012   Three Months Ended June 30, 2012   Three Months Ended September 30, 2011
(dollars in thousands, except per share information)(unaudited)
Total expenses:
Total expenses - GAAP basis $ 57,780 $ 64,145 $ 75,594
Adjustment to exclude restructuring charges (a)   (2,841 )   (1,200 )   (1,783 )
Non-GAAP operating total expenses (b) $ 54,939   $ 62,945   $ 73,811  
 
Net loss:
Net loss - GAAP basis $ (5,185 ) $ (5,423 ) $ (15,729 )

Adjustment to exclude restructuring charges, net of tax benefit (a)

  2,040     748     1,113  
Non-GAAP operating net loss $ (3,145 ) $ (4,675 ) $ (14,616 )
 
Diluted earnings per share:
Diluted earnings per share - GAAP basis $ (0.18 ) $ (0.19 ) $ (0.51 )

Adjustment to exclude restructuring charges, net of tax benefit

  0.07     0.03     0.04  
Non-GAAP operating diluted earnings per share (b) $ (0.11 ) $ (0.16 ) $ (0.47 )
 
 
Nine Months Ended September 30, 2012 Nine Months Ended September 30, 2011
(dollars in thousands, except per share information(unaudited)
Total expenses:
Total expenses - GAAP basis $ 190,464 $ 233,899
Adjustment to exclude restructuring charges (a)   (6,285 )   (1,783 )
Non-GAAP operating total expenses (b) $ 184,179   $ 232,116  
 
Net loss:
Net loss - GAAP basis $ (10,142 ) $ (15,336 )

Adjustment to exclude restructuring charges, net of tax benefit (a)

  4,184     1,126  
Non-GAAP operating net loss (b) $ (5,958 ) $ (14,210 )
 
Diluted earnings per share:
Diluted earnings per share - GAAP basis $ (0.36 ) $ (0.49 )

Adjustment to exclude restructuring charges, net of tax benefit (a)

  0.14     0.03  
Non-GAAP operating diluted earnings per share (b) $ (0.22 ) $ (0.46 )
    (a) The adjustment represents the exclusion of restructuring charges, which includes compensation expense related to the workforce reduction program for all periods presented and an additional lease obligation accrual for the three and nine months ended September 30, 2012.
(b) A non-GAAP financial measure that management believes provides the most meaningful comparison between historical, present and future periods.
 
 

Further information regarding these Non-GAAP Financial Measures is included in our annual report on Form 10-K, which, upon filing, is available to the public at the Securities and Exchange Commission’s (SEC) website at http://www.sec.gov and at our website at http://www.kbw.com. You may also read and copy this report at the SEC’s public reference room located at 100 F Street, N.E., Washington, D.C. 20549, U.S.A. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room.

Copyright Business Wire 2010
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