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National Holdings Corporation Reports Significant Improvement In Year Over Year Positive Adjusted EBITDA

The Company reported a net loss of $1,937,000 for the fiscal year ended September 30, 2012 compared to a net loss of $4,713,000 for the fiscal year ended 2011. The net loss attributable to common stockholders for the fiscal year ended September 30, 2012 was $2,030,000, or a loss of $0.08 per common share, as compared to a net loss attributable to common stockholders for the fiscal year ended 2011 of $5,127,000 or $0.18 per common share. The Company took a non-cash charge of $1,051,000 due to a loss on the disposition of unconsolidated joint venture for the fiscal year ended September 30, 2012 for which there was no comparable charge for the same period in 2011. The Company took a non-cash charge of $1,603,000 due to an increase in the fair value of a derivative liability for the fiscal year ended September 30, 2011 for which there was no comparable charge for same period in 2012. The net loss attributable to common stockholders for the fiscal year ended September 30, 2012 and 2011 reflects $93,000 and $414,000 of cumulative preferred stock dividends on the Company’s Series A preferred stock, respectively.

About National Holdings Corporation

With anticipated annual revenues of approximately $128 million for the fiscal year 2013 and over 1,000 independent advisors, brokers, traders, sales associates and support personnel, the Company is a leading Independent Advisor and Broker services company. As the migration of financial advisors from traditional wire houses, such as Merrill Lynch and Morgan Stanley (NYSE:MS) to Independent Advisors and Brokers, such as the Company and LPL Financial (NASDAQ:LPLA) accelerates, the Company's open architecture, high pay-out percentage, top tier compliance, supervision and operations are attractive to those advisors and brokers who want their independence but also want the support and product offerings of a larger firm.

National Holdings Corporation is a holding company for National Securities Corporation, vFinance Investments, Inc., EquityStation, Inc., National Asset Management, Inc., and National Insurance Corporation. National Securities, vFinance and EquityStation are broker-dealers registered with the Securities and Exchange Commission (“SEC”), and members of FINRA and SIPC. National Securities and vFinance are also members of the NFA. National Asset Management is a federally-registered investment adviser. National Insurance provides a full array of fixed insurance products to its clients. For more information, please visit our website at www.nhldcorp.com.

Safe Harbor Statements

This release contains forward-looking statements within the meaning of the federal securities laws. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Information on significant potential risks and uncertainties that may also cause differences includes, but is not limited to, those mentioned by National Holdings from time to time in their filings with the SEC. The words “may,” “will,” “believe,” “estimate,” “expect,” “plan,” “intend,” “project,” “anticipate,” “could,” “would,” “should,” “seek,” “continue,” “pursue” and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. National Holdings undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may be disclosed from time to time in our SEC filings or otherwise, including the factors discussed in Item 1A, Risk Factors, of our Annual Report on Form 10-K and in or periodic reports on Form 10-Q, and, therefore, readers should not place undue reliance on these forward-looking statements.
 

NATIONAL HOLDINGS CORPORATION

(CONSOLIDATED)

FINANCIAL HIGHLIGHTS
 
   

Twelve Months Ended

Audited
 

September 30, 2012
   

September 30, 2011
 
Revenues $ 118,648,000   $ 126,521,000  
 
Net loss $ (1,937,000 ) $ (4,713,000 )
 
Preferred stock dividends   (93,000 )   (414,000 )
 
Net loss attributable to common stockholders $ (2,030,000 ) $ (5,127,000 )
 

Loss per share attributable to common stockholders - Basic
$ 0.08   $ (0.18 )
 

Loss per share attributable to common stockholders - Diluted
$ 0.08   $ (0.18 )
 
Weighted average number of shares outstanding - Basic   25,014,166     19,697,033  
 
Weighted average number of shares outstanding - Diluted   25,014,166     19,697,033  
 
 

NATIONAL HOLDINGS CORPORATION

(CONSOLIDATED)

EBITDA, as ADJUSTED
 

The following table presents a reconciliation of EBITDA, as adjusted, to net loss as reported.
 
 

Twelve Months Ended

Audited
 

September 30, 2012
 

September 30, 2011
 
Net loss, as reported $ (1,937,000 ) $ (4,713,000 )
 
Interest expense 916,000 1,147,000
 
Taxes 153,000 148,000
 
Depreciation 533,000 633,000
 
Amortization  

538,000
    644,000  
 
EBITDA 203,000 (2,141,000 )
 
Loss on Disposition of unconsolidated joint venture 1,051,000 -
 
Change in fair value of derivative liabilities -

 
1,603,000
 
Non-cash stock based compensation expense   10,000     265,000  
 
EBITDA, as adjusted 1,264,000 (273,000 )
 
Forgivable loan write down  

265,000
    392,000  
 
EBITDA, as adjusted with forgivable loan write down $ 1,529,000   $ 119,000  
 

Earnings before interest, taxes, depreciation and amortization, or EBITDA, adjusted for non-cash compensation expense, non-cash expenses related to offerings and amortization of forgivable loans, is a key metric the Company uses in evaluating its financial performance. EBITDA is considered a non-GAAP financial measure as defined by Regulation G promulgated by the SEC pursuant to the Securities Act of 1933, as amended. The Company considers EBITDA, as adjusted, an important measure of its ability to generate cash flows to service debt, fund capital expenditures and fund other corporate investing and financing activities. EBITDA, as adjusted, eliminates the non-cash effect of tangible asset depreciation, amortization of intangible assets and stock-based compensation. EBITDA should be considered in addition to, rather than as a substitute for, pre-tax income, net income and cash flows from operating activities.

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