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Investors Capital Holdings, Ltd. (NYSE MKT: ICH, the “Company”), a financial services holding Company, today announced financial results for its third quarter ended December 31, 2012. Continued expense reductions coupled with revenue growth translated into successive operating and net income for the first three quarters of the fiscal year ending March 31, 2013.
Third Quarter Highlights:
Revenue for the third quarter of fiscal year ending March 31, 2013 increased 9.10% to $20.77 million, as compared to $19.0 million in the third quarter of the prior period.
Commissions revenue rose 7.7% to %15.5 million, compared to $14.40 million in the prior period.
Advisory fees increased by 9.6% to $4.2 million, compared to $3.8 million in the prior period, as asset values grew.
Operating income was $0.28 million compared to an operating loss of $0.01 million for the prior period. Specifically, total compensation and benefit expenses decreased by $0.55 million or 26.9% as the Company realigned expenses with top-line revenues and profit margins.
Adjusted EBITDA (Earnings before interest, taxes, depreciation and amortization and stock-based compensation) increased 67% to $0.40 million compared to $0.24 million the third quarter of the prior period. Adjusted EBITDA, a non-GAAP financial measure described below, is a key metric utilized by the Company in evaluating its financial performance.
Net income was $0.13 million for the quarter compared to a net income of $0.43 million for the prior period attributed to an income tax benefit of $0.44 million.
The Company’s average revenue per representative, based on a rolling 12-month period, rose at the end of the third quarter to approximately $180,000, an increase of 5.1% compared to approximately $170,000 for the prior rolling 12-month period.
2012 Business Highlights:
In March 2012, ICC launched its proprietary technology platform, CapitalCONNECT. Since then, we see a greater adoption rate for new offerings as our advisors are more efficiently leveraging technology to increase productivity. The Company followed that launch with an internal campaign providing customized advisor trainings on how to utilize the ever-expanding suite of technological tools available on CapitalCONNECT.
Investors Capital practice management solutions expanded, and now includes Cannon Financial Institute’s Certified Wealth Strategist® (CWS) designation, one of the fastest growing certifications in our industry. Topics covered include effective wealth advising and retaining and expanding client relationships. This and other marketing services are designed to increase advisor productivity.
ICC welcomed new advisors in many locations, including New England, Nevada and Texas, further strengthening and expanding our geographic footprint of advisors across the country.
ICC’s Insurance Agency continues to expand its insurance contracting resources for Fixed and Indexed Annuity Sales, welcoming new IMO partners: Creative Marketing, DMI Marketing and Saybrus Partners.
In December 2012, the Company relocated its Home Office, to new office space, continuing to reside in the town of Lynnfield, Massachusetts. This new office space will further enhance the Company’s business relationships and employee engagement.
“We continue to invest in the revenue-generating areas of our business, supplementing the success of our recruiting efforts with organic growth initiatives such as practice management, leveraging technology and value-added events and services,” said Tim Murphy, President and CEO of Investors Capital Holdings, Ltd. “I believe that the strategic steps that we have taken thus far, along with our plans for the remainder of this fiscal year, make Investors Capital well-appointed to support productive growth from our current and new advisors.” He added, “By continually focusing on the basics of our business and providing 5-Star Service to our advisors each day, I believe that we have paved the way for continued growth.”