Cohen & Company Inc. (NYSE American: COHN), a financial
services firm specializing in fixed income markets and, more
recently, in SPAC markets, today reported financial results for its
first quarter ended March 31, 2021.
Summary Operating Results
|
Three Months Ended |
|
($ in
thousands) |
3/31/21 |
|
12/31/20 |
|
3/31/20 |
|
|
|
|
|
|
|
|
Total revenues |
$ |
102,676 |
|
|
$ |
66,365 |
|
|
$ |
17,770 |
|
|
Compensation
and benefits |
|
26,647 |
|
|
|
23,479 |
|
|
|
14,134 |
|
|
Non-compensation operating expenses |
|
5,584 |
|
|
|
5,111 |
|
|
|
5,198 |
|
|
Goodwill
impairment |
|
- |
|
|
|
- |
|
|
|
7,883 |
|
|
Operating
income |
|
70,445 |
|
|
|
37,775 |
|
|
|
(9,445 |
) |
|
Interest
expense, net |
|
(2,014 |
) |
|
|
(1,951 |
) |
|
|
(2,605 |
) |
|
Income
(loss) from equity method affiliates |
|
(835 |
) |
|
|
(244 |
) |
|
|
(107 |
) |
|
Income
(loss) before income tax expense (benefit) |
|
67,596 |
|
|
|
35,580 |
|
|
|
(12,157 |
) |
|
Income tax
expense (benefit) |
|
868 |
|
|
|
(8,046 |
) |
|
|
(372 |
) |
|
Net income
(loss) |
|
66,728 |
|
|
|
43,626 |
|
|
|
(11,785 |
) |
|
Less: Net
income (loss) attributable to the noncontrolling interest |
|
57,373 |
|
|
|
28,875 |
|
|
|
(8,683 |
) |
|
Net income
(loss) attributable to Cohen & Company Inc. |
$ |
9,355 |
|
|
$ |
14,751 |
|
|
$ |
(3,102 |
) |
|
Fully
diluted net income (loss) per share |
$ |
6.98 |
|
|
$ |
7.64 |
|
|
$ |
(2.70 |
) |
|
|
|
|
|
|
|
|
Adjusted
pre-tax income (loss) |
$ |
37,626 |
|
|
$ |
23,779 |
|
|
$ |
(4,114 |
) |
|
Fully
diluted adjusted pre-tax income (loss) per share |
$ |
7.52 |
|
|
$ |
4.64 |
|
|
$ |
(1.04 |
) |
|
|
|
|
|
|
|
|
- Net income attributable to Cohen
& Company Inc. was $9.4 million, or $6.98 per diluted share,
for the three months ended March 31, 2021, compared to $14.8
million, or $7.64 per diluted share, for the three months ended
December 31, 2020, and net loss of ($3.1) million, or ($2.70) per
diluted share, for the three months ended March 31, 2020. Adjusted
pre-tax income was $37.6 million, or $7.52 per diluted share, for
the three months ended March 31, 2021, compared to $23.8 million,
or $4.64 per diluted share, for the three months ended December 31,
2020, and adjusted pre-tax loss of ($4.1) million, or ($1.04) per
diluted share, for the three months ended March 31, 2020. Adjusted
pre-tax income (loss) is not a measure recognized under U.S.
generally accepted accounting principles (“GAAP”). See Note 1
below.
- Revenues during the three months
ended March 31, 2021 increased $36.3 million from the prior quarter
and $84.9 million from the prior year quarter.
- The increase from the prior quarter
was comprised primarily of (i) an increase of $1.1 million in net
trading revenue primarily from increased revenue in the Company’s
Gestation repo and Corporate trading groups, (ii) a decrease of
$1.7 million in asset management revenue primarily related to an
incentive allocation earned by the manager of the Company’s SPAC
funds in the prior quarter, (iii) an increase of $0.1 million in
new issue and advisory revenue related to European and U.S.
insurance asset origination, and (iv) an increase of $36.8 million
in principal transactions and other revenue primarily related to
the closing of the Company’s second sponsored insurance SPAC, INSU
Acquisition Corp. II, in February 2021, which generated $73.2
million of principal transactions revenue in the first quarter of
2021, partially offset by a reduction of $37.8 million in principal
transactions revenue generated by the closing of the Company’s
first sponsored insurance SPAC in the prior quarter. On February 9,
2021, INSU Acquisition Corp. II completed its merger with
Metromile, Inc. (NASDAQ: MILE).
- The increase from the prior year
quarter was comprised primarily of (i) an increase of $0.6 million
in net trading revenue primarily from increased revenue in the
Company’s Gestation repo group, (ii) an increase of $0.5 million in
asset management revenue primarily related to an incentive
allocation earned by the manager of the Company’s SPAC funds in the
current quarter, (iii) an increase of $1.8 million in new issue and
advisory revenue related to European and U.S. insurance asset
origination, and (iv) an increase of $82.0 million in principal
transactions and other revenue primarily related to the closing of
the Company’s second sponsored insurance SPAC in February 2021,
which generated $73.2 million of principal transactions revenue in
the first quarter of 2021, as well as positive mark-to-market
adjustments on some of the Company’s other principal
investments.
- Compensation and benefits expense
as a percentage of revenue was 26% for the three months ended March
31, 2021, compared to 35% for the three months ended December 31,
2020 and 80% for the three months ended March 31, 2020. The number
of Company employees was 98 as of March 31, 2021, compared to 87 as
of December 31, 2020, and 95 as of March 31, 2020.
- Non-compensation operating expenses
during the three months ended March 31, 2021 increased $0.5 million
from the prior quarter and $0.4 million from the prior year
quarter. The increases from both the prior quarter and prior year
quarter were due primarily to revenue-driven third-party marketing
costs related to European origination revenue, as well as higher
recruiting costs during the three months ended March 31, 2021.
- Interest expense during the three
months ended March 31, 2021 was comparable to the prior quarter and
decreased $0.6 million from the prior year quarter. The changes in
quarterly interest expense are primarily driven by fluctuations in
interest on redeemable financial instruments, which are driven by
certain Company groups’ revenues and profits.
- Loss from equity method affiliates
during the three months ended March 31, 2021 increased $0.6 million
from the prior quarter and $0.7 million from the prior year
quarter. The loss from equity method affiliates is primarily driven
by pre-business combination expenses incurred by the sponsored
insurance SPACs that the Company has invested in.
- Income tax expense during the three
months ended March 31, 2021 was $0.9 million, compared to an income
tax benefit of $8.0 million in the prior quarter, and an income tax
benefit of $0.4 million in the prior year quarter. The prior
quarter’s income tax benefit was primarily the result of the
reduction in the valuation allowance applied against the Company's
net operating loss and net capital loss tax assets. The Company
will continue to evaluate its operations on a quarterly basis and
may make further adjustments to its valuation allowances going
forward. Future adjustments could be material and could result in
additional tax benefit or tax expense.
- As of March 31, 2021, total equity
was $154.7 million, compared to $101.4 million as of December 31,
2020; the non-convertible non-controlling interest component of
total equity was $45.0 million as of March 31, 2021 and $27.8
million as of December 31, 2020. Thus, the total equity excluding
the non-convertible non-controlling interest component was $109.7
million as of March 31, 2021, a $36.1 million increase from $73.6
million at December 31, 2020.
Lester Brafman, Chief Executive Officer of Cohen
& Company, said, “We are pleased with our first quarter results
as our strategic initiatives continue to generate strong returns.
In the first quarter, our net trading revenue was $19.2 million
thanks to strong performance from our Mortgage, Repo, and Corporate
trading groups, and our Gestation Repo book grew to $4.1 billion,
up from $3.3 billion at the end of 2020. Also in the quarter, our
second company-sponsored SPAC, INSU Acquisition Corp. II, completed
its merger with Metromile, a digital insurance platform and
pay-by-mile auto insurer, contributing $33.4 million to our
adjusted pre-tax income.”
Brafman continued, “We were excited to announce
the hiring of several top investment bankers with broad experience
in M&A advisory, private capital markets, equity capital
markets and PIPE transactions. We expect that this added expertise
will create another source of revenue, complement the continued
growth of our SPAC franchise, and contribute to our overall
operating leverage. Looking ahead, we are excited to build on our
momentum as we grow our business while remaining committed to
executing on our strategic priorities, with a continued focus on
proactively managing our risk and capital structure, and on
enhancing stockholder value.”
Conference Call
The Company will host a conference call at 11:00
a.m. Eastern Time (ET), today, May 6, 2021, to discuss these
results. The conference call will be available via webcast.
Interested parties can access the webcast by clicking the webcast
link on the Company’s homepage at www.cohenandcompany.com. Those
wishing to listen to the conference call with operator assistance
can dial (877) 686-9573 (domestic) or (706) 643-6983
(international), with participant pass code 3559203, or request the
Cohen & Company earnings call. A replay of the call will be
available for one week following the call by dialing (800) 585-8367
or (404) 537-3406, participant pass code 3559203.
About Cohen & Company
Cohen & Company is a financial services
company specializing in fixed income markets and, more recently, in
SPAC markets. It was founded in 1999 as an investment firm focused
on small-cap banking institutions but has grown to provide an
expanding range of capital markets and asset management services.
Cohen & Company’s operating segments are Capital Markets, Asset
Management, and Principal Investing. The Capital Markets segment
consists of fixed income sales, trading, and matched book repo
financing as well as new issue placements in corporate and
securitized products, and advisory services, operating primarily
through Cohen & Company’s subsidiaries, J.V.B. Financial Group,
LLC in the United States and Cohen & Company Financial (Europe)
Limited in Europe. The Asset Management segment manages assets
through collateralized debt obligations, managed accounts, and
investment funds. As of March 31, 2021, the Company managed
approximately $2.4 billion in primarily fixed income assets in a
variety of asset classes including US and European trust preferred
securities, subordinated debt, and corporate loans. As of March 31,
2021, 67.7% of the Company’s assets under management were in
collateralized debt obligations that Cohen & Company manages,
which were all securitized prior to 2008. The Principal Investing
segment is comprised primarily of investments the Company holds
related to its SPAC franchise and other investments the Company has
made for the purpose of earning an investment return rather than
investments made to support its trading, matched book repo, or
other capital markets business activity. For more information,
please visit www.cohenandcompany.com.
Note 1: Adjusted pre-tax income
(loss) and adjusted pre-tax income (loss) per share are non-GAAP
measures of performance. Please see the discussion under “Non-GAAP
Measures” below. Also see the tables below for the reconciliations
of non-GAAP measures of performance to their corresponding GAAP
measures of performance.
Forward-looking Statements
This communication contains certain statements,
estimates, and forecasts with respect to future performance and
events. These statements, estimates, and forecasts are
“forward-looking statements.” In some cases, forward-looking
statements can be identified by the use of forward-looking
terminology such as “may,” “might,” “will,” “should,” “expect,”
“plan,” “anticipate,” “believe,” “estimate,” “predict,”
“potential,” “seek,” or “continue” or the negatives thereof or
variations thereon or similar terminology. All statements other
than statements of historical fact included in this communication
are forward-looking statements and are based on various underlying
assumptions and expectations and are subject to known and unknown
risks, uncertainties, and assumptions, and may include projections
of our future financial performance based on our growth strategies
and anticipated trends in our business. These statements are based
on our current expectations and projections about future events.
There are important factors that could cause our actual results,
level of activity, performance, or achievements to differ
materially from the results, level of activity, performance, or
achievements expressed or implied in the forward-looking statements
including, but not limited to, those discussed under the heading
“Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition” in our filings with the Securities and
Exchange Commission (“SEC”), which are available at the SEC’s
website at www.sec.gov and our website at
www.cohenandcompany.com/investor-relations/sec-filings. Such risk
factors include the following: (a) a decline in general economic
conditions or the global financial markets, (b) losses caused by
financial or other problems experienced by third parties, (c)
losses due to unidentified or unanticipated risks, (d) a lack of
liquidity, i.e., ready access to funds for use in our businesses,
(e) the ability to attract and retain personnel, (f) litigation and
regulatory issues, (g) competitive pressure, (h) an inability to
generate incremental income from new or expanded businesses, (i)
unanticipated market closures or effects due to inclement weather
or other disasters, (j) losses (whether realized or unrealized) on
our principal investments, including on our CLO investments, (k)
the possibility that payments to the Company of subordinated
management fees from its CDOs will continue to be deferred or will
be discontinued, (l) the possibility that the stockholder rights
plan may fail to preserve the value of the Company’s deferred tax
assets, whether as a result of the acquisition by a person of 5% of
the Company’s common stock or otherwise, (m) the possibility that
Insurance SPAC III does not successfully consummate an Insurance
SPAC III Business Combination, (n) a reduction in the volume of
investments into SPACs; (o) the value of our holdings of founders
shares in Shift and Metromile may decline and the possibility that
significant portions of the founder shares may remain restricted
for a long period of time; and (p) the impacts of the COVID-19
pandemic. As a result, there can be no assurance that the
forward-looking statements included in this communication will
prove to be accurate or correct. In light of these risks,
uncertainties, and assumptions, the future performance or events
described in the forward-looking statements in this communication
might not occur. Accordingly, you should not rely upon
forward-looking statements as a prediction of actual results and we
do not undertake any obligation to update any forward-looking
statements, whether as a result of new information, future events,
or otherwise.
Cautionary Note Regarding Quarterly Financial
Results
Due to the nature of our business, our revenue
and operating results may fluctuate materially from quarter to
quarter. Accordingly, revenue and net income in any particular
quarter may not be indicative of future results. Further, our
employee compensation arrangements are in large part
incentive-based and, therefore, will fluctuate with revenue. The
amount of compensation expense recognized in any one quarter may
not be indicative of such expense in future periods. As a result,
we suggest that annual results may be the most meaningful gauge for
investors in evaluating our business performance.
COHEN & COMPANY INC. |
|
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) |
|
(in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
3/31/21 |
|
12/31/20 |
|
3/31/20 |
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Net trading |
$ |
19,183 |
|
|
$ |
18,087 |
|
|
$ |
18,561 |
|
|
|
|
Asset management |
|
2,093 |
|
|
|
3,821 |
|
|
|
1,615 |
|
|
|
|
New issue and advisory |
|
1,839 |
|
|
|
1,734 |
|
|
|
- |
|
|
|
|
Principal transactions and other revenue |
|
79,561 |
|
|
|
42,723 |
|
|
|
(2,406 |
) |
|
|
|
Total revenues |
|
102,676 |
|
|
|
66,365 |
|
|
|
17,770 |
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
|
Compensation and benefits |
|
26,647 |
|
|
|
23,479 |
|
|
|
14,134 |
|
|
|
|
Business development, occupancy, equipment |
|
719 |
|
|
|
671 |
|
|
|
756 |
|
|
|
|
Subscriptions, clearing, and execution |
|
2,790 |
|
|
|
2,517 |
|
|
|
2,580 |
|
|
|
|
Professional services and other operating |
|
1,994 |
|
|
|
1,838 |
|
|
|
1,782 |
|
|
|
|
Depreciation and amortization |
|
81 |
|
|
|
85 |
|
|
|
80 |
|
|
|
|
Impairment of goodwill |
|
- |
|
|
|
- |
|
|
|
7,883 |
|
|
|
|
Total operating expenses |
|
32,231 |
|
|
|
28,590 |
|
|
|
27,215 |
|
|
|
|
Operating income (loss) |
|
70,445 |
|
|
|
37,775 |
|
|
|
(9,445 |
) |
|
|
|
Non-operating income (expense) |
|
|
|
|
|
|
|
|
Interest expense, net |
|
(2,014 |
) |
|
|
(1,951 |
) |
|
|
(2,605 |
) |
|
|
|
Income (loss) from equity method affiliates |
|
(835 |
) |
|
|
(244 |
) |
|
|
(107 |
) |
|
|
|
Income (loss) before income tax expense (benefit) |
|
67,596 |
|
|
|
35,580 |
|
|
|
(12,157 |
) |
|
|
|
Income tax expense (benefit) |
|
868 |
|
|
|
(8,046 |
) |
|
|
(372 |
) |
|
|
|
Net income (loss) |
|
66,728 |
|
|
|
43,626 |
|
|
|
(11,785 |
) |
|
|
|
Less: Net income (loss) attributable to the noncontrolling
interest |
|
57,373 |
|
|
|
28,875 |
|
|
|
(8,683 |
) |
|
|
|
Net income (loss) attributable to Cohen & Company Inc. |
$ |
9,355 |
|
|
$ |
14,751 |
|
|
$ |
(3,102 |
) |
|
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
Basic |
|
|
|
|
|
|
|
|
Net income
(loss) attributable to Cohen & Company Inc. |
$ |
9,355 |
|
|
$ |
14,751 |
|
|
$ |
(3,102 |
) |
|
|
|
Basic shares
outstanding |
|
1,034 |
|
|
|
1,070 |
|
|
|
1,147 |
|
|
|
|
Net income
(loss) attributable to Cohen & Company Inc. per share |
$ |
9.04 |
|
|
$ |
13.79 |
|
|
$ |
(2.70 |
) |
|
|
|
Fully
Diluted |
|
|
|
|
|
|
|
|
Net income
(loss) attributable to Cohen & Company Inc. |
$ |
9,355 |
|
|
$ |
14,751 |
|
|
$ |
(3,102 |
) |
|
|
|
Net income
(loss) attributable to the convertible non-controlling
interest |
|
27,403 |
|
|
|
17,074 |
|
|
|
(8,523 |
) |
|
|
|
Net interest
attributable to convertible debt, net of taxes |
|
289 |
|
|
|
39 |
|
|
|
- |
|
|
|
|
Income tax
and conversion adjustment |
|
(1,751 |
) |
|
|
7,924 |
|
|
|
966 |
|
|
|
|
Enterprise
net income (loss) |
$ |
35,296 |
|
|
$ |
39,788 |
|
|
$ |
(10,659 |
) |
|
|
|
Basic shares
outstanding |
|
1,034 |
|
|
|
1,070 |
|
|
|
1,147 |
|
|
|
|
Unrestricted
Operating LLC membership units exchangeable into COHN shares |
|
2,838 |
|
|
|
2,803 |
|
|
|
2,794 |
|
|
|
|
Additional
dilutive shares |
|
1,181 |
|
|
|
1,334 |
|
|
|
- |
|
|
|
|
Fully
diluted shares outstanding |
|
5,053 |
|
|
|
5,207 |
|
|
|
3,941 |
|
|
|
|
Fully
diluted net income (loss) per share |
$ |
6.98 |
|
|
$ |
7.64 |
|
|
$ |
(2.70 |
) |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of adjusted pre-tax income (loss) to net income
(loss) attributable to Cohen & Company Inc. and calculations of
per share amounts |
|
|
Net income
(loss) attributable to Cohen & Company Inc. |
$ |
9,355 |
|
|
$ |
14,751 |
|
|
$ |
(3,102 |
) |
|
|
|
Addback:
Impairment of goodwill |
|
- |
|
|
|
- |
|
|
|
7,883 |
|
|
|
|
Addback
(deduct): Income tax expense (benefit) |
|
868 |
|
|
|
(8,046 |
) |
|
|
(372 |
) |
|
|
|
Addback
(deduct): Net income (loss) attributable to the convertible
non-controlling interest |
|
27,403 |
|
|
|
17,074 |
|
|
|
(8,523 |
) |
|
|
|
Adjusted
pre-tax income (loss) |
|
37,626 |
|
|
|
23,779 |
|
|
|
(4,114 |
) |
|
|
|
Net interest
attributable to convertible debt |
|
375 |
|
|
|
381 |
|
|
|
- |
|
|
|
|
Enterprise
pre-tax income (loss) for fully diluted adjusted pre-tax income
(loss) per share calculation |
$ |
38,001 |
|
|
$ |
24,160 |
|
|
$ |
(4,114 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Fully
diluted shares outstanding |
|
5,053 |
|
|
|
5,207 |
|
|
|
3,941 |
|
|
|
|
Fully
diluted adjusted pre-tax income (loss) per share |
$ |
7.52 |
|
|
$ |
4.64 |
|
|
$ |
(1.04 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COHEN & COMPANY INC. |
|
CONSOLIDATED BALANCE SHEETS |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
March 31, 2021 |
|
|
|
|
|
|
(unaudited) |
|
December 31, 2020 |
|
|
Assets |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
19,471 |
|
|
$ |
41,996 |
|
|
|
|
Receivables from brokers, dealers, and clearing agencies |
|
92,688 |
|
|
|
52,917 |
|
|
|
|
Due from related parties |
|
603 |
|
|
|
2,812 |
|
|
|
|
Other receivables |
|
5,736 |
|
|
|
3,929 |
|
|
|
|
Investments - trading |
|
284,314 |
|
|
|
242,961 |
|
|
|
|
Other investments, at fair value |
|
107,573 |
|
|
|
58,540 |
|
|
|
|
Receivables under resale agreements |
|
7,299,538 |
|
|
|
5,716,343 |
|
|
|
|
Investment in equity method affiliates |
|
9,136 |
|
|
|
13,482 |
|
|
|
|
Deferred income taxes |
|
6,778 |
|
|
|
7,397 |
|
|
|
|
Goodwill |
|
109 |
|
|
|
109 |
|
|
|
|
Right-of-use asset - operating leases |
|
5,807 |
|
|
|
6,063 |
|
|
|
|
Other assets |
|
3,242 |
|
|
|
2,830 |
|
|
|
|
Total assets |
$ |
7,834,995 |
|
|
$ |
6,149,379 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Payables to brokers, dealers, and clearing agencies |
$ |
219,946 |
|
|
$ |
156,678 |
|
|
|
|
Accounts payable and other liabilities |
|
34,167 |
|
|
|
46,251 |
|
|
|
|
Accrued compensation |
|
11,179 |
|
|
|
14,359 |
|
|
|
|
Trading securities sold, not yet purchased |
|
58,727 |
|
|
|
44,439 |
|
|
|
|
Other investments sold, not yet purchased |
|
5,490 |
|
|
|
7,415 |
|
|
|
|
Securities sold under agreements to repurchase |
|
7,289,275 |
|
|
|
5,713,212 |
|
|
|
|
Operating lease liability |
|
6,276 |
|
|
|
6,531 |
|
|
|
|
Redeemable Financial Instruments |
|
7,957 |
|
|
|
11,957 |
|
|
|
|
Debt |
|
47,306 |
|
|
|
47,100 |
|
|
|
|
Total liabilities |
|
7,680,323 |
|
|
|
6,047,942 |
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Voting nonconvertible preferred stock |
|
27 |
|
|
|
27 |
|
|
|
|
Common stock |
|
13 |
|
|
|
13 |
|
|
|
|
Additional paid-in capital |
|
65,351 |
|
|
|
65,031 |
|
|
|
|
Accumulated other comprehensive loss |
|
(887 |
) |
|
|
(821 |
) |
|
|
|
Accumulated deficit |
|
(10,993 |
) |
|
|
(20,341 |
) |
|
|
|
Total stockholders' equity |
|
53,511 |
|
|
|
43,909 |
|
|
|
|
Noncontrolling interest |
|
101,161 |
|
|
|
57,528 |
|
|
|
|
Total equity |
|
154,672 |
|
|
|
101,437 |
|
|
|
|
Total liabilities and equity |
$ |
7,834,995 |
|
|
$ |
6,149,379 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Measures
Adjusted pre-tax income (loss) and adjusted
pre-tax income (loss) per diluted share
Adjusted pre-tax income (loss) is not a
financial measure recognized by GAAP. Adjusted pre-tax income
(loss) represents net income (loss) attributable to Cohen &
Company Inc., computed in accordance with GAAP, excluding
impairment of goodwill and income tax expense (benefit), plus the
net income (loss) attributable to the convertible non-controlling
interest. Impairment of goodwill has been excluded from adjusted
pre-tax income (loss) because it is a non-recurring, non-cash item.
Income tax expense (benefit) has been excluded because a pre-tax
measurement of enterprise earnings that includes net income (loss)
attributable to the convertible non-controlling interest is a
useful and appropriate measure of performance. Furthermore, our
income tax expense (benefit) has been, and we expect it will
continue to be, a substantially non-cash item for the foreseeable
future, generated from adjustments in our valuation allowance
applied to the Company’s gross deferred tax assets. Convertible
non-controlling interest is added back to adjusted pre-tax income
because the underlying Cohen & Company, LLC equity units are
convertible into Cohen & Company Inc. shares. Adjusted pre-tax
income (loss) per diluted share is calculated, by dividing adjusted
pre-tax income (loss) by diluted shares outstanding, both of which
include adjustments used in the corresponding calculation in
accordance with GAAP.
We present adjusted pre-tax income (loss) and
related per diluted share amounts in this release because we
consider them to be useful and appropriate supplemental measures of
our performance. Adjusted pre-tax income (loss) and related per
diluted share amounts help us to evaluate our performance without
the effects of certain GAAP calculations that may not have a direct
cash or recurring impact on our current operating performance. In
addition, our management uses adjusted pre-tax income (loss) and
related per diluted share amounts to evaluate the performance of
our enterprise operations. Adjusted pre-tax income (loss) and
related per diluted share amounts, as we define them, are not
necessarily comparable to similarly named measures of other
companies and may not be appropriate measures for performance
relative to other companies. Adjusted pre-tax income (loss) should
not be assessed in isolation from or construed as a substitute for
net income (loss) prepared in accordance with GAAP. Adjusted
pre-tax income (loss) is not intended to represent and should not
be considered to be a more meaningful measure than, or an
alternative to, measures of operating performance as determined in
accordance with GAAP.
Contact: |
|
|
|
|
|
Investors - |
|
Media - |
Cohen & Company Inc. |
|
Joele Frank, Wilkinson Brimmer Katcher |
Joseph W. Pooler, Jr. |
|
James Golden or Andrew Squire |
Executive Vice President and |
|
212-355-4449 |
Chief Financial Officer |
|
jgolden@joelefrank.com or
asquire@joelefrank.com |
215-701-8952 |
|
|
investorrelations@cohenandcompany.com |
|
|
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