National Financial Partners Announces Preliminary Financial Results for the Third Quarter of 2007
November 01 2007 - 4:08PM
PR Newswire (US)
NEW YORK, Nov. 1 /PRNewswire-FirstCall/ -- National Financial
Partners Corp. (NYSE:NFP), a national network of independent
financial advisors specializing in life insurance and wealth
transfer, corporate and executive benefits, and financial planning
and investment advisory services, today announced preliminary
financial results for the third quarter of 2007. Net income per
diluted share for the third quarter of 2007 is estimated to be
$0.39 to $0.40, compared to $0.41 per diluted share for the third
quarter of 2006. Cash earnings per diluted share for the third
quarter of 2007 is estimated to be $0.74 to $0.75, compared to
$0.66 per diluted share for the third quarter of 2006. (Cash
earnings is a non-GAAP number, which the Company defines as net
income excluding amortization of intangibles, depreciation and
impairment of goodwill and intangible assets.) In the third quarter
of 2007, total revenue is expected to increase approximately 16.5%.
Revenue growth during the quarter is expected to be impacted by
"same store" revenue growth of 6.8% and a strong contribution by
new firms. Net "same store" revenue growth is expected to be 10.8%
in the third quarter. Jessica Bibliowicz, Chairman and Chief
Executive Officer, said, "Strong revenue growth during the quarter
reflects improving market conditions, particularly in life
insurance. We expect continued sequential improvement in 'same
store' and total revenue growth in the fourth quarter of the year."
For the third quarter of 2007, gross margin percentage is expected
to decline between 1.0 and 1.2 percentage points compared to the
prior year period due primarily to increased operating expenses as
a percentage of revenue as a result of two isolated initiatives
that are substantially complete: -- Hiring at NFP Insurance
Services, Inc., NFP's Austin, Texas-based insurance distribution
utility, primarily related to key leadership, sales, marketing and
support positions to further improve the resources available to
NFP's owned and member firms. -- Strategic steps taken at a firm
recently acquired from a larger institution to position it for
future profitability and growth. As expected, subsequent to the
acquisition, a new management team was put in place and the entity
required certain modifications to its organizational structure to
ensure its long-term success as a stand alone administrative
platform within NFP. The increase in operating expense percentage
was largely the result of entities not part of the "same store"
revenue growth calculation. Management fee percentage is expected
to increase 0.1 to 0.3 percentage points compared to the prior year
period as a result of higher incentive accruals related to the
strong performance of firms at the end of an incentive cycle.
Incentive accruals can vary from period to period based on the mix
of firms participating in the incentive program and the level of
their earnings. Acquisition activity remained strong, and
subsequent to the third quarter, NFP completed the previously
announced acquisition of Pro Financial Services, Inc., the
Company's largest acquisition to date. Including the two firms
acquired in December 2006, which management considers part of the
2007 acquired base earnings objective, the Company has completed 25
transactions representing $36.2 million in base earnings, exceeding
NFP's 2007 acquisition budget of $20 million. Ms. Bibliowicz said,
"We are pleased with our return to positive 'same store' revenue
growth and the acquisition pipeline remains healthy. Given the
third quarter results, our 2007 cash EPS growth is likely to be in
the 15% to 20% range, consistent with our longer term growth
objective." The preliminary results for the third quarter of 2007
are based on management's initial estimates of operating results
and there can be no assurance that amounts may not change. NFP will
announce its final third quarter financial results on November 7,
2007 following the close of the market. Earnings Conference Call
The Company will conduct its third quarter 2007 earnings conference
call and audio webcast on November 8, 2007, at 8:00 a.m. (ET). The
conference call will be available live via telephone and the
Internet. To access the call, dial (617) 614-2710 (when prompted,
callers should provide the access code NFP). To listen to the
conference call over the Internet, visit http://www.nfp.com/
(through a link on the Investor Relations page). The conference
call will be available for replay via telephone and Internet for a
period of approximately 90 days. To listen to a replay of the
conference call via telephone, dial (888) 286-8010. The access code
for the replay is 96533227. To access the replay of the conference
call over the Internet, visit the above-mentioned Web site. Defined
Terms Firms included in the "same store" revenue growth calculation
encompass firms that were owned by NFP for at least four full
quarters at the beginning of the third quarter of 2007. Net "same
store" revenue growth is the growth of revenue less commissions and
fees of firms included in the "same store" revenue growth
calculation. The term base earnings represents the cumulative
preferred portion of the pre-tax earnings before owners'
compensation of acquired firms that the Company capitalizes at the
time of acquisition. More detailed definitions of "same store"
revenue growth, net "same store" revenue growth and base earnings
can be found in the Company's Quarterly Financial Supplement for
the period ended June 30, 2007, which is available on the Company's
Web site at http://www.nfp.com/. Reconciliation of Non-GAAP
Measures The Company analyzes its performance using non-GAAP
measures called cash earnings and cash earnings per diluted share.
Cash earnings are defined as net income, excluding amortization of
intangibles, depreciation and impairment of goodwill and intangible
assets. Cash earnings per diluted share are calculated by dividing
cash earnings as defined above by the number of weighted average
diluted shares outstanding for the period indicated. The Company
believes these non-GAAP measures provide additional meaningful
methods of evaluating certain aspects of the Company's operating
performance from period to period on a basis that may not be
otherwise apparent under GAAP. Cash earnings and cash earnings per
diluted share should not be viewed as substitutes for GAAP net
income and GAAP net income per diluted share, respectively. About
National Financial Partners Corp. Founded in 1998, National
Financial Partners Corp. ("NFP") is a leading independent
distributor of financial services products to high net worth
individuals and entrepreneurial companies. NFP is headquartered in
New York and operates a distribution network of over 180 firms.
Forward-Looking Statements This release contains certain statements
relating to future results, which are forward-looking statements as
that term is defined in the Private Securities Litigation Reform
Act of 1995. Forward-looking statements include, without
limitation, any statement that may project, indicate or imply
future results, events, performance or achievements, and may
contain the words "anticipate," "expect," "intend," "plan,"
"believe," "estimate," "may," "will" and "continue" and similar
expressions of a future or forward-looking nature. Forward-looking
statements may include discussions concerning revenue, expenses,
earnings, cash flow, dividends, capital structure, credit
facilities, market and industry conditions, premium and commission
rates, interest rates, contingencies, the direction or outcome of
regulatory investigations and litigation, income taxes and NFP's
operations. These forward-looking statements are based on
management's current views with respect to future results, and are
subject to risks and uncertainties. Factors that could cause actual
results to differ materially from those contemplated by a
forward-looking statement include: (1) NFP's success in acquiring
high quality independent financial services distribution firms, (2)
the performance of NFP's firms following acquisition, (3)
competition in the business of providing financial services to the
high net worth and entrepreneurial corporate markets, (4) NFP's
ability, through its operating structure, to respond quickly to
operational or financial situations and to grow its business, (5)
NFP's ability to effectively manage its business through the
principals of its firms, (6) changes in tax laws, including the
elimination or modification of the federal estate tax and any
change in the tax treatment of life insurance products, (7) changes
in the pricing, design or underwriting of insurance products, (8)
changes in premiums and commission rates, (9) adverse developments
in the insurance markets in which NFP operates, resulting in fewer
sales of insurance-related products, (10) adverse results or other
consequences from litigation, arbitration or regulatory
investigations, including those related to compensation agreements
with insurance companies and activities within the life settlements
industry, (11) uncertainty in the insurance and life settlements
industries arising from investigations into certain business
practices by various governmental authorities and related
litigation, (12) the reduction of NFP's revenue and earnings due to
the elimination or modification of compensation arrangements,
including contingent compensation arrangements, (13) changes in
interest rates or general economic conditions, (14) the impact of
legislation or regulations in jurisdictions in which NFP's
subsidiaries operate, including the possible adoption of
comprehensive and exclusive federal regulation over all interstate
insurers, (15) adverse results or other consequences from higher
than anticipated compliance costs, including those related to
expenses arising from internal reviews of business practices and
regulatory investigations, and (16) other factors described in
NFP's filings with the Securities and Exchange Commission.
Forward-looking statements speak only as of the date on which they
are made. NFP expressly disclaims any obligation to update or
revise any forward-looking statement, whether as a result of new
information, future events or otherwise. DATASOURCE: National
Financial Partners Corp. CONTACT: Marc Gordon, Investor Relations,
+1-212-301-4033, , or Elliot Holtz, Media Relations,
+1-212-301-4060, , both of National Financial Partners Web site:
http://www.nfp.com/
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