SAN FRANCISCO, CA (TSX: TWP) today released results for the
quarter ended June 30, 2008, reporting a net loss of $10.1 million,
or $0.31 per share, on net revenues of $60.0 million. For the first
half of 2008 the firm reported a net loss of $27.9 million, or
$0.85 per share, on net revenues of $108.9 million.
Adjusting for certain one-time events related to its initial
public offering and the amortization of intangible assets acquired
in the purchase of Westwind Partners, the firm reported a non-GAAP
net loss of $6.6 million, or $0.20 per share, for the quarter ended
June 30, 2008 and a non-GAAP net loss of $21.4 million, or $0.65
per share, for the first half of 2008. A reconciliation between
GAAP results and these non-GAAP measures is discussed below under
"Non-GAAP Financial Measures."
"The difficult economic environment continued to challenge our
performance and we don't anticipate significant improvement in
market conditions in the near future. That said, we did see some
progress in our business with revenue growth in banking up 100% in
the second quarter from the first quarter, with the resource
franchise acquired through Westwind contributing 32% to total
banking revenues, and brokerage showing pro forma growth of 14% in
the first half of the year over the comparable year-ago period,"
said Thomas Weisel, Chairman and CEO.
"We also continued to concentrate on positioning the firm to
capitalize on opportunities when a recovery in the markets occurs.
We've been acutely focused on the strength and liquidity of our
balance sheet, with available cash and cash equivalents at $127
million as of June 30, 2008 versus $111 million in the first
quarter. Our cash loss in the second quarter was $5 million after
adjusting for non-cash items included in our pre-tax loss. Given
our liquidity position and the relatively low level of cash used in
the second quarter, we are comfortable with our ability to continue
to manage through this difficult environment. In addition, we
remain focused on reducing non-compensation expenses and pursuing a
series of growth initiatives. These initiatives include making
strategic hires, and building out the middle markets business, our
European sales operation and the asset management platform," stated
Mr. Weisel.
Second quarter and first half of 2008 consolidated results
include Westwind Partners and are compared with historical pro
forma combined results for Thomas Weisel Partners and Westwind
Partners. These historical pro forma amounts are further described
under "Historical Pro Forma Combined Results" below.
Business Highlights
-- Investment Banking Revenues. Investment banking revenues decreased to
$22.9 million in the second quarter of 2008 compared to $46.7 million in
the historical pro forma combined second quarter of 2007 and increased from
$11.5 million in the first quarter of this year. Total transactions for
the second quarter were 32 compared to a historical pro forma combined
total of 55 in the year-ago quarter. Investment banking revenues decreased
to $34.4 million in the first half of 2008 compared to $98.5 million in the
historical pro forma combined first half of 2007. Total transactions for
the first half of 2008 were 55 compared to a historical pro forma combined
total of 104 in the same period of 2007.
"We continued to experience a challenging environment in the
second quarter of 2008, particularly in the public capital markets,
but were able to execute a number of transactions. This quarter, we
led public financings for Nuance Communications, Inc. and Constant
Contact, Inc., two of only seven U.S. public equity offerings in
the technology sector. With the challenging public equity markets
we continue to focus on our private equity and debt capital raising
capabilities and have completed several offerings including
Xunlight in the alternative energy space and Medical Depot in
healthcare. In addition, we've led several PIPEs and private
placements in Canada in the natural resource space, notably for
Whitemud Resources Inc., Nevoro Inc. and Paxton Energy," said Brad
Raymond, Co-Head of Investment Banking. "We've also continued to
pursue strategic advisory business, as evidenced by advising Nuance
Communications, Inc. in its purchase of eScription, Inc. for
approximately $400 million, Iomega Corporation's sale to EMC
Corporation for approximately $215 million and Frontier Pacific
Mining Corporation's sale to Eldorado Gold Corporation for
approximately C$179 million," continued Mr. Raymond.
"We remain cautious about the outlook for the third quarter. Our
total backlog of filed, announced and engaged transactions was down
compared to the beginning of the second quarter. We have limited
visibility, particularly in our public capital markets businesses,
and at this point in the third quarter, we have not experienced
material improvements," said Bill McLeod, Co-Head of Investment
Banking.
-- Brokerage Revenues. Brokerage revenues increased to $34.9 million in
the second quarter of 2008 compared to $30.7 million in the historical pro
forma combined second quarter of 2007 and decreased from $36.1 million in
the first quarter of this year. Brokerage revenues increased to $71.0
million in the first half of 2008 compared to $62.5 million in the
historical pro forma combined first half of 2007, an increase of
approximately 14%.
"We recognized improved cross border flows from the U.S. into
Canada, higher revenues in Europe, growth on our Electronic Trading
platform and results from the special situations block trading team
in the second quarter compared to the year-ago quarter. We also
experienced broader penetration in the U.S. with our Middle Markets
effort. Offsetting these gains were slightly higher loss ratios
associated with market conditions and continued weakness in the
convertible bond segment, which contributed to a sequential
quarterly decline in net brokerage revenues of 4%," commented Tony
Stais, Head of Trading.
-- Asset Management Revenues. Asset management revenues decreased to
$1.9 million in the second quarter of 2008 compared to $18.0 million in the
historical pro forma combined second quarter of 2007 and increased from
$0.3 million in the first quarter of this year. Asset management revenues
decreased to $2.2 million in the first half of 2008 compared to $24.7
million in the historical pro forma combined first half of 2007.
-- Compensation and Benefits Expense Ratio. Compensation and benefits
expense decreased to $41.8 million in the second quarter of 2008 compared
to $52.8 million in the historical pro forma combined second quarter of
2007. The non-GAAP compensation ratio increased to 67% compared to the
historical pro forma combined non-GAAP ratio of 58% in the year-ago period
and decreased from 76% in the first quarter of 2008.
Compensation and benefits expense decreased to $82.2 million in
the first half of 2008 compared to $109.1 million in the historical
pro forma combined first half of 2007. The non-GAAP compensation
ratio increased to 71% compared to the historical pro forma
combined non-GAAP ratio of 59% in the year-ago period.
The increase in the non-GAAP compensation ratio in the second
quarter of 2008 compared to the year-ago period is the result of
lower revenues combined with severance amounts totaling $1.2
million and fixed elements of compensation, such as salaries,
guarantees, taxes, benefits and equity award expense related to
grants made in prior years.
-- Strategic New Hires. The firm is committed to increasing the value of
its franchise by focusing on building its revenue generating capability
through opportunistically hiring senior talent. The firm has been building
its healthcare investment banking team with the addition of two senior
professionals, Ralph Sutton and Jason Moran. With the addition of Robert
Nabholz, the firm expanded its telecommunications investment banking
services. On the Canadian trading desk, covering the energy sector, the
firm added Jon Fredericks and in New York, Chris Richards will focus on
trading U.S. financial and industrial stocks. Raj Denhoy joined the firm's
research platform covering the medical devices sector and, as recently
announced, Fitzhugh Taylor will join the consumer group covering the
restaurant industry.
"We are committed to providing a world-class offering of
services to our growth oriented clients," said Lionel F. Conacher,
President and Chief Operating Officer. "These strategic new hires
are steps towards this end, taken at a time when talented
individuals are more inclined to consider change, the direct result
of this challenging environment."
-- Strong Balance Sheet Position. At the end of the second quarter of
2008, shareholders' equity and book value per share were $350 million and
$11.19, respectively, and tangible shareholders' equity and tangible book
value per share were $217 million and $6.93, respectively.
"The firm finished the second quarter with a strong balance
sheet with substantial liquidity and limited exposure to the debt
markets. At quarter end we had approximately $100 million
capitalizing our broker-dealer entities, which exceeded the
required amount of regulatory capital by $68 million, and we remain
comfortable with our ability to manage through this tough
environment while positioning for growth when the market returns,"
said Shaugn Stanley, Chief Financial Officer.
THOMAS WEISEL PARTNERS GROUP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2008
AND PRELIMINARY PRO FORMA SELECTED FINANCIAL DATA FOR THE
THREE AND SIX MONTHS ENDED JUNE 30, 2007
(Dollar amounts in thousands, except book value per share)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
Pro Forma Pro Forma
2008 2007***** 2008 2007*****
--------- --------- --------- ---------
Revenue Detail:
Investment banking
Capital raising $ 13,854 $ 42,817 $ 21,242 $ 67,319
Strategic advisory 9,085 3,841 13,193 31,192
--------- --------- --------- ---------
Total investment banking 22,939 46,658 34,435 98,511
Brokerage 34,860 30,660 70,994 62,510
Asset management
Management fees 3,469 4,182 7,129 8,061
Private equity realized and
unrealized gains and
(losses) - net 331 9,875 (1,758) 11,258
Other securities realized
and unrealized gains and
(losses) - net (1,935) 3,984 (3,157) 5,428
--------- --------- --------- ---------
Total asset management 1,865 18,041 2,214 24,747
Interest income 1,848 4,837 4,873 8,995
Other revenue - - - 920
--------- --------- --------- ---------
Total revenues 61,512 100,196 112,516 195,683
Interest expense (1,498) (2,942) (3,578) (5,412)
--------- --------- --------- ---------
Net revenues $ 60,014 $ 97,254 $ 108,938 $ 190,271
========= ========= ========= =========
Investment Banking
Transactions:
Capital raising 26 53 45 90
Strategic advisory 6 2 10 14
--------- --------- --------- ---------
Total transactions 32 55 55 104
--------- --------- --------- ---------
Revenue per transaction* $ 717 $ 848 $ 626 $ 947
Other Metrics:
Non-GAAP compensation ratio** 67.2% 58.3% 71.1% 58.9%
Non-compensation ratio*** 58.5% 32.0% 64.3% 32.1%
IPO equity award expense $ 1,670 $ 1,862 $ 3,477 $ 3,723
Shareholders' equity 350,183 n/a 350,183 n/a
Less: Goodwill and other
intangible assets (133,225) n/a (133,225) n/a
--------- ---------
Tangible shareholders' equity 216,958 n/a 216,958 n/a
========= =========
Common shares outstanding**** 31,288 n/a 31,288 n/a
Book value per share $ 11.19 n/a $ 11.19 n/a
Tangible book value per share $ 6.93 n/a $ 6.93 n/a
* Generally, average revenue per investment banking transaction
is lower in Canada than in the U.S.
** The firm's Non-GAAP compensation ratio is the ratio of the
firm's compensation and benefits expense (excluding expenses
relating to IPO equity awards) to net revenues (excluding
investment gains and losses attributable to investments in
partnerships and other securities). Without excluding these
amounts, the firm's ratio of compensation and benefits expense to
net revenues is 69.6% and 54.3% for the three months ended June 30,
2008 and 2007, respectively. Without excluding these amounts, the
firm's ratio of compensation and benefits expense to net revenues
is 75.4% and 57.3% for the six months ended June 30, 2008 and 2007,
respectively.
*** The firm's non-compensation ratio is the ratio of all
expense (other than compensation and benefits expense and interest
expense) to net revenues.
**** Includes 6,639,478 exchangeable shares issued by TWP
Acquisition Company (Canada), Inc., the firm's wholly-owned
subsidiary. Each exchangeable share is exchangeable at any time
into a share of common stock of the firm, entitles the holder to
dividend and other rights substantially economically equivalent to
those of a share of common stock, and through a voting trust,
entitles the holder to a vote along with shares of common stock on
matters presented to shareholders.
***** The preliminary pro forma amounts depict results we
estimate we would have had during the three and six months ended
June 30, 2007 if the acquisition of Westwind Partners that we
consummated in January 2008 had been consummated as of January 1,
2007. Further information regarding these preliminary pro forma
amounts is set forth below under "Historical Pro Forma Combined
Results."
Historical Pro Forma Combined Results
The firm has reported in this press release a preliminary
unaudited pro forma consolidated statement of operations for the
three and six months ended June 30, 2007 (and information derived
therefrom), which gives effect to the firm's acquisition of
Westwind Partners as if the acquisition had occurred on January 1,
2007. This preliminary unaudited pro forma consolidated statement
of operations is based on historical financial statements of Thomas
Weisel Partners and Westwind Partners, giving effect to the
acquisition and applying the assumptions and adjustments discussed
in the notes accompanying the pro forma consolidated statement of
operations attached hereto. The preliminary unaudited pro forma
consolidated financial statements should be read in conjunction
with the firm's Quarterly Report on Form 10-Q for the three months
ended June 30, 2007 and its Annual Report on Form 10-K for the year
ended December 31, 2007, as well as the historical financial
statements of Westwind Partners that are an annex to the proxy
statement the firm filed with the SEC on November 7, 2007.
The preliminary unaudited pro forma consolidated statement of
operations for the three and six months ended June 30, 2007 was
prepared using the purchase method of accounting with Thomas Weisel
Partners treated as the accounting acquiror. The preliminary
unaudited pro forma consolidated statement of operations does not
purport to be indicative of the results of operations that would
have actually been obtained had such transactions been completed as
of the assumed date and for the period presented, or which may be
obtained in the future. The preliminary pro forma adjustments are
described in the notes accompanying the preliminary unaudited pro
forma consolidated statement of operations attached hereto and are
based upon available information and certain assumptions that
management of Thomas Weisel Partners believes are reasonable.
All amounts presented in the preliminary unaudited pro forma
consolidated statement of operations are in U.S. dollars based on
the exchange rate described in the notes accompanying the pro forma
consolidated statement of operations attached hereto.
Non-GAAP Financial Measures
The firm has reported in this press release its net loss for the
second quarter of 2008 on a non-GAAP basis by:
-- excluding $1.0 million of after-tax non-cash expense associated with
its initial grant of restricted stock units made in connection with its
initial public offering; and
-- excluding $2.5 million of after-tax non-cash expense associated with
the amortization of intangible assets acquired as a result of its
acquisition of Westwind Partners on January 2, 2008 (with such amortization
being based on a preliminary allocation of the purchase price).
The firm has also reported in this press release its basic and
diluted loss per share for the second quarter of 2008 on a non-GAAP
basis by:
-- using a net loss of $6.6 million as the numerator of its non-GAAP
basic and diluted loss per share calculations, which amount is derived by
beginning with its GAAP net loss of $10.1 million and adjusting to exclude
(i) the after-tax non-cash expense associated with its initial grant of
restricted stock units of $1.0 million and (ii) the estimated after-tax non-
cash expense associated with the amortization of intangible assets acquired
as a result of its acquisition of Westwind Partners of $2.5 million; and
-- using as the denominator of its non-GAAP basic and diluted loss per
share calculations the basic and diluted weighted average shares used,
respectively, as the denominator of its GAAP basic and diluted loss per
share calculations.
The firm has reported in this press release its net loss for the
first half of 2008 on a non-GAAP basis by:
-- excluding $2.0 million of after-tax non-cash expense associated with
its initial grant of restricted stock units made in connection with its
initial public offering; and
-- excluding $4.5 million of after-tax non-cash expense associated with
the amortization of intangible assets acquired as a result of its
acquisition of Westwind Partners on January 2, 2008 (with such amortization
being based on a preliminary allocation of the purchase price).
The firm has also reported in this press release its basic and
diluted loss per share for the first half of 2008 on a non-GAAP
basis by:
-- using a net loss of $21.4 million as the numerator of its non-GAAP
basic and diluted loss per share calculations, which amount is derived by
beginning with its GAAP net loss of $27.9 million and adjusting to exclude
(i) the after-tax non-cash expense associated with its initial grant of
restricted stock units of $2.0 million and (ii) the estimated after-tax non-
cash expense associated with the amortization of intangible assets acquired
as a result of its acquisition of Westwind Partners of $4.5 million; and
-- using as the denominator of its non-GAAP basic and diluted loss per
share calculations the basic and diluted weighted average shares used,
respectively, as the denominator of its GAAP basic and diluted loss per
share calculations.
The firm views its grant of restricted stock units in connection
with its initial public offering and its acquisition of Westwind
Partners as one-time strategic events and the firm's management has
utilized a non-GAAP calculation of net loss and non-GAAP
calculations of basic and diluted loss per share that are adjusted
in the manner described above as an additional device to aid in
understanding and analyzing the firm's financial results in the
second quarter and first half of 2008. The firm's management
believes that these non-GAAP measures will allow for a better
evaluation of the operating performance of its business and
facilitate meaningful comparison of its results in the current
period to those in prior periods and future periods. The firm's
reference to these measures should not, however, be considered as a
substitute for results that are presented in a manner consistent
with GAAP. These non-GAAP measures are provided to enhance
investors' overall understanding of the firm's current financial
performance and its prospects for the future. Specifically, the
firm's management believes that the non-GAAP measures provide
useful information to both management and investors by excluding
certain items that may not be indicative of the firm's core
operating results and business outlook.
A limitation of utilizing these non-GAAP measures of net loss
and basic and diluted loss per share is that the GAAP accounting
effects of these events do in fact reflect the underlying financial
results of the firm's business and these effects should not be
ignored in evaluating and analyzing the firm's financial results.
Therefore, management believes that both the firm's GAAP measures
of net loss and basic and diluted loss per share and these non-GAAP
measures of the firm's financial performance should be considered
together.
A reconciliation of the firm's second quarter of 2008 GAAP net
loss to its second quarter of 2008 non-GAAP net loss is set forth
below (in millions):
Net loss $ (10.1)
Exclusion of the after-tax non-cash expense associated with
initial grant of restricted stock units 1.0
Exclusion of the estimated after-tax non-cash expense
associated with the amortization of intangible assets
acquired as a result of the firm's acquisition of Westwind
Partners 2.5
-----------
Non-GAAP net loss $ (6.6)
===========
A reconciliation of the firm's first half of 2008 GAAP net loss
to its first half of 2008 non-GAAP net loss is set forth below (in
millions):
Net loss $ (27.9)
Exclusion of the after-tax non-cash expense associated with
initial grant of restricted stock units 2.0
Exclusion of the estimated after-tax non-cash expense
associated with the amortization of intangible assets
acquired as a result of the firm's acquisition of Westwind
Partners 4.5
-----------
Non-GAAP net loss $ (21.4)
===========
The firm calculates loss per share in accordance with FASB
Statement No. 128, Earnings per Share. Basic loss and diluted loss
per share is calculated by dividing net loss by the weighted
average number of common shares outstanding for the period.
The following table sets forth the firm's GAAP basic and diluted
weighted average shares outstanding and its GAAP basic and diluted
loss per share for the second quarter and first half of 2008, as
well as non-GAAP loss per share for the second quarter first half
of 2008 after applying the adjustments described above:
For Three For Six
Months Months
Ended Ended
June 30, June 30,
2008 2008
----------- -----------
Weighted average shares used in computation of
loss per share:
Basic (in thousands) 32,519 32,754
Diluted (in thousands) 32,519 32,754
Loss per share:
Basic $ (0.31) $ (0.85)
Diluted $ (0.31) $ (0.85)
Non-GAAP loss per share:
Basic $ (0.20) $ (0.65)
Diluted $ (0.20) $ (0.65)
Quarterly Earnings Conference Call
Thomas Weisel Partners Group, Inc. will host its second quarter
conference call on Wednesday, July 30, 2008 at 5:00 p.m. Eastern
time (2:00 p.m. Pacific time). The conference call may include
forward-looking statements, including guidance as to future
results.
All interested parties are invited to listen to Thomas Weisel
Partners' Chairman and Chief Executive Officer, Thomas W. Weisel,
President and Chief Operating Officer, Lionel F. Conacher, and
Chief Financial Officer, Shaugn S. Stanley, by dialing 888/221-3915
(domestic) or 913/312-6670 (international). The confirmation code
for both the domestic and international lines is: 1408823.
A live web cast of the call, as well as the firm's results, will
be available through the investor relations/webcasts section of its
website, www.tweisel.com. To listen to the live call, please go to
the website at least 15 minutes early to register, download, and
install any necessary audio software.
For those who cannot listen to the live broadcast, a replay will
be available on this site one hour after the call through August
15, 2008.
About Thomas Weisel Partners Group, Inc.
Thomas Weisel Partners Group, Inc. is an investment bank,
founded in 1998, focused principally on the growth sectors of the
economy. Thomas Weisel Partners Group, Inc. generates revenues from
three principal sources: investment banking, brokerage and asset
management. The investment banking group is comprised of two
disciplines: corporate finance and strategic advisory. The
brokerage group provides equity and convertible debt securities
sales and trading services to institutional investors, and offers
brokerage, advisory and cash management services to high-net-worth
individuals and corporate clients. The asset management group
consists of: private equity, public equity and distribution
management. Thomas Weisel Partners is headquartered in San
Francisco with additional offices in Baltimore, Boston, Calgary,
Chicago, Cleveland, Denver, New York, Portland, Silicon Valley,
Toronto, London, Mumbai and Zurich. For more information, please
visit www.tweisel.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements, which
are subject to risks, uncertainties and assumptions about us. In
some cases, you can identify these statements by forward-looking
words such as "may," "might," "will," "should," "expect," "plan,"
"anticipate," "believe," "estimate," "predict," "optimistic,"
"potential," "future" or "continue," the negative of these terms
and other comparable terminology. These statements are only
predictions based on our current expectations about future events.
There are important factors that could cause actual results, level
of activity, performance or achievements or other events or
circumstances to differ materially from the results, level of
activity, performance or achievements expressed or implied by these
forward-looking statements. These factors include, but are not
limited to, Thomas Weisel Partners' ability to implement its
strategic initiatives and achieve the expected benefits of the
acquisition of Westwind Partners, integrate Westwind Partners'
operations and retain its professionals, as well as competitive,
economic, political, and market conditions and fluctuations,
government and industry regulation, other risks relating to the
acquisition, including the effect of the completion of the
transaction on the companies' business relationships, operating
results and business generally and other factors. Some of the other
factors are those that are discussed in Item 1A - "Risk Factors" in
our Annual Report on Form 10-K for the year ended December 31, 2007
and in our Quarterly Reports on Form 10-Q filed with the SEC
thereafter. We do not assume responsibility for the accuracy or
completeness of any forward-looking statement and you should not
rely on forward-looking statements as predictions of future events.
We are under no duty to update any of these forward-looking
statements to conform them to actual results or revised
expectations.
THOMAS WEISEL PARTNERS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS
ENDED JUNE 30, 2008
AND PRELIMINARY PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2007
(In thousands, except per share data)
(Unaudited)
Three Months Ended June 30, 2007
-----------------------------------------
Three
Months
Ended Thomas Pro Pro
June 30, Weisel Westwind Forma Forma
2008 Partners (a) Adjustments Combined
--------- -------- -------- -------- --------
Revenues:
Investment banking $ 22,939 $ 29,605 $ 17,053 $ -- $ 46,658
Brokerage 34,860 26,226 4,434 -- 30,660
Asset management 1,865 14,282 3,759 -- 18,041
Interest income 1,848 4,539 727 (429)(b) 4,837
Other revenue -- -- -- -- 0
--------- -------- -------- -------- --------
Total revenues 61,512 74,652 25,973 (429) 100,196
Interest expense (1,498) (2,913) (29) -- (2,942)
--------- -------- -------- -------- --------
Net revenues 60,014 71,739 25,944 (429) 97,254
--------- -------- -------- -------- --------
Expenses excluding
interest:
Compensation and
benefits 41,788 37,395 15,391 -- 52,786
Brokerage
execution,
clearance and
account
administration 6,394 4,970 237 -- 5,207
Communications and
data processing 5,735 4,441 628 -- 5,069
Depreciation and
amortization of
property and
equipment 1,933 1,521 112 (41)(c) 1,592
Amortization of
other intangible
assets 4,371 -- -- 4,371 (d) 4,371
Marketing and
promotion 3,775 3,042 810 -- 3,852
Occupancy and
equipment 5,274 4,650 345 -- 4,995
Other expense 7,630 5,291 731 -- 6,022
--------- -------- -------- -------- --------
Total expenses
excluding
interest 76,900 61,310 18,254 4,330 83,894
--------- -------- -------- -------- --------
Income (loss) before
taxes (16,886) 10,429 7,690 (4,759) 13,360
Provision for taxes
(tax benefit) (6,759) 3,827 2,804 (1,590)(e) 5,041
--------- -------- -------- -------- --------
Net income (loss) $ (10,127) $ 6,602 $ 4,886 $ (3,169) $ 8,319
========= ======== ======== ======== ========
Earnings (loss) per
share:
Basic earnings
(loss) per share $ (0.31) $ 0.25 $ 0.25
Diluted earnings
(loss) per share $ (0.31) $ 0.25 $ 0.25
Weighted average
shares used in
computation of per
share data:
Basic weighted
average shares
outstanding 32,519 26,286 7,009 (f) 33,295
Diluted weighted
average shares
outstanding 32,519 26,697 7,009 (f) 33,706
Notes to the Preliminary Pro Forma Consolidated Statements of Operations
for the three months ended June 30, 2007 are set forth on the final page.
THOMAS WEISEL PARTNERS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS
ENDED JUNE 30, 2008
AND PRELIMINARY PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007
(In thousands, except per share data)
(Unaudited)
Six Months Ended June 30, 2007
-----------------------------------------
Six
Months
Ended Thomas Pro Pro
June 30, Weisel Westwind Forma Forma
2008 Partners (a) Adjustments Combined
--------- -------- -------- -------- --------
Revenues:
Investment banking $ 34,435 $ 68,897 $ 29,614 $ -- $ 98,511
Brokerage 70,994 55,082 7,428 -- 62,510
Asset management 2,214 19,997 4,750 -- 24,747
Interest income 4,873 8,887 958 (850)(b) 8,995
Other revenue -- 920 -- -- 920
--------- -------- -------- -------- --------
Total revenues 112,516 153,783 42,750 (850) 195,683
Interest expense (3,578) (5,355) (57) -- (5,412)
--------- -------- -------- -------- --------
Net revenues 108,938 148,428 42,693 (850) 190,271
--------- -------- -------- -------- --------
Expenses excluding
interest:
Compensation and
benefits 82,177 81,385 27,728 -- 109,113
Brokerage
execution,
clearance and
account
administration 12,872 9,683 497 -- 10,180
Communications and
data processing 11,599 9,152 1,172 -- 10,324
Depreciation and
amortization of
property and
equipment 3,820 3,245 217 (82)(c) 3,380
Amortization of
other intangible
assets 7,731 -- -- 7,731 (d) 7,731
Marketing and
promotion 7,822 6,655 1,390 -- 8,045
Occupancy and
equipment 10,661 8,701 635 -- 9,336
Other expense 15,594 10,296 1,787 -- 12,083
--------- -------- -------- -------- --------
Total expenses
excluding
interest 152,276 129,117 33,426 7,649 170,192
--------- -------- -------- -------- --------
Income (loss) before
taxes (43,338) 19,311 9,267 (8,499) 20,079
Provision for taxes
(tax benefit) (15,406) 7,308 3,379 (2,814)(e) 7,873
--------- -------- -------- -------- --------
Net income (loss) $ (27,932) $ 12,003 $ 5,888 $ (5,685) $ 12,206
========= ======== ======== ======== ========
Earnings (loss) per
share:
Basic earnings
(loss) per share $ (0.85) $ 0.46 $ 0.37
Diluted earnings
(loss) per share $ (0.85) $ 0.45 $ 0.36
Weighted average
shares used in
computation of per
share data:
Basic weighted
average shares
outstanding 32,754 26,184 7,009 (f) 33,193
Diluted weighted
average shares
outstanding 32,754 26,624 7,009 (f) 33,633
Notes to the Preliminary Pro Forma Consolidated Statements of Operations
for the six months ended June 30, 2007 are set forth on the final page.
Notes to the Unaudited Pro Forma Consolidated Statement of
Operations
(a) Westwind statement of operations has been converted from
Canadian dollars to U.S. dollars for the pro forma presentation.
Amounts were converted based on the average monthly exchange rates
from January 1, 2007 to June 30, 2007.
(b) An adjustment to interest income for the estimated interest
amount that would not have been recognized by the firm during the
three and six months ended June 30, 2007 on the $45 million cash
portion of the transaction consideration. The weighted average
interest rate for the three and six months ended June 30, 2007 is
estimated to be 3.81% and 3.80%, respectively.
(c) Adjustment to depreciation and amortization to reflect fair
value on the date of acquisition.
(d) Reflects the amortization of other intangible assets that
were recorded as a result of the acquisition.
(e) To record an income tax impact on the pre-tax pro forma
adjustments. The firm's combined effective tax rate subsequent to
the pro forma tax adjustment is equal to 38% and 39% for the three
and six months ended June 30, 2007, respectively.
(f) The issuance of 7,009,112 shares of Thomas Weisel Partners
common stock or exchangeable shares. The fair value of the Thomas
Weisel Partners common stock to be issued was based upon the
average of the closing prices of one share of common stock during
the five trading day period beginning two trading days prior to the
date the transaction was announced.
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