Thomas Weisel Partners Group, Inc. (NASDAQ: TWPG) today released
results for the three months ended December 31, 2008, reporting a
net loss of $21.5 million, or $0.67 per share, on net revenues of
$31.5 million. For the year ended December 31, 2008 the firm
reported a net loss of $158.6 million, or $4.90 per share, on net
revenues of $189.5 million. The full year results include a
non-cash goodwill charge-off of $92.6 million or $2.86 per share.
As of December 31, 2008, the firm's cash and cash equivalents were
$116.6 million.
Adjusting for certain non-cash events related to its initial
public offering and the amortization of intangible assets acquired
in the purchase of Westwind Partners, as well as the one-time
charge-off of goodwill acquired as a result of the acquisition of
Westwind Partners in the third quarter of 2008, the firm reported a
non-GAAP net loss of $18.7 million, or $0.59 per share, for the
three months ended December 31, 2008 and a non-GAAP net loss of
$53.5 million, or $1.65 per share, for the year ended December 31,
2008. A reconciliation between GAAP results and these non-GAAP
measures is discussed below under "Non-GAAP Financial
Measures."
The fourth quarter revenue run rate was $48.0 million, which
excludes non-recurring and non-cash items totaling $16.4 million.
The non-recurring item in the fourth quarter was $5.7 million in
convertible trading losses. The non-cash items in the fourth
quarter include, among other items, $0.9 million in warrant
write-downs and $9.3 million in mark-to-market private equity
investment write-downs. The firm has significantly reduced its
exposure to convertible securities and warrants to the point that
any future losses would be minimal. Further, the firm has completed
another 10% reduction in headcount. Reductions to both compensation
and non-compensation expenses enable the firm to operate at cash
break-even based on a quarterly revenue run rate of approximately
$50 million. A reconciliation between GAAP results and these
non-GAAP measures is discussed below under "Non-GAAP Financial
Measures."
"Our performance was impacted by a dramatic slowdown in capital
markets activity and our results also reflect a number of charges
that we don't expect to recur in 2009. We continue to take
significant steps to reduce operating expenses in-line with
revenues, and we implemented additional measures to increase the
variability of our compensation model to manage compensation
expenses through a prolonged downturn if the low level of activity
in the capital markets continues. These steps position the firm to
operate at cash break-even on the fourth quarter revenue run rate,"
said Thomas W. Weisel, Chairman and CEO of Thomas Weisel Partners.
"Our larger, more diversified industry focus should allow us to
capture revenue as various industry segments start to recover from
the broad capital markets freeze in the fourth quarter. With a
significantly reduced cost structure, the integration of Westwind
Partners completed and continued high caliber personnel additions
to the platform, we believe we are well positioned to be a market
leader as the capital markets recover."
Consolidated results for the three months and year ended
December 31, 2008 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
77% to $11.3 million in the fourth quarter of 2008 compared to $48.7
million in the historical pro forma combined fourth quarter of 2007. Total
transactions for the fourth quarter of 2008 were 14 compared to a
historical pro forma combined total of 48 in the year-ago quarter.
Investment banking revenues decreased 66% to $63.3 million for the full
year of 2008 compared to $185.6 million in the historical pro forma
combined full year of 2007. Total transactions for the full year of
2008 were 82 compared to a historical pro forma combined total of 185
in 2007. Lower revenues were due to a decline in the number of
transactions in equity issuances and M&A, as well as lower revenues per
transaction than in the comparable periods.
-- Brokerage Revenues. Brokerage revenues decreased to $27.3 million in
the fourth quarter of 2008 compared to $40.3 million in the historical pro
forma combined fourth quarter of 2007, a decrease of 32%. Excluding the
$5.7 million in convertible trading losses, brokerage revenues would have
been $33.0 million in the fourth quarter of 2008.
Brokerage revenues decreased to $131.9 million for the full year of
2008 compared to $135.7 million in the historical pro forma combined
full year of 2007, a decrease of 3%. The decrease was mainly
attributable to convertible trading losses associated with reducing the
firm's positions in its convertible trading operations.
-- Asset Management Revenues. Asset management revenues decreased 163%
to a loss of $7.0 million in the fourth quarter of 2008 compared to income
of $11.2 million in the historical pro forma combined fourth quarter of
2007. Management fees were $3.8 million in the fourth quarter of 2008,
which were offset by private equity and other securities net losses of
$10.8 million.
Asset management revenues decreased 116% to a loss of $7.1 million for
the full year of 2008 compared to income of $44.6 million in the
historical pro forma combined full year of 2007. For the full year of
2008, management fees were $14.7 million, which were offset by private
equity and other securities net losses of $21.8 million. The decline
was due to mark-to-market write-downs in the firm's private equity
funds and in its warrant portfolio.
-- Compensation and Benefits Expenses. Compensation and benefits
expenses decreased 67% to $28.1 million in the fourth quarter of 2008
compared to $84.9 million in the historical pro forma combined fourth
quarter of 2007. The non-GAAP compensation ratio, which is defined below
in note (2), increased to 66% compared to the historical pro forma combined
non-GAAP ratio of 60% in the year-ago period.
Compensation and benefits expenses decreased 40% to $147.2 million in
the full year of 2008 compared to $244.4 million in the historical pro
forma combined full year of 2007. The non-GAAP compensation ratio
increased to 69% compared to the historical pro forma combined non-GAAP
ratio of 60% in the year-ago period.
-- Non-compensation Expenses. Non-compensation expenses decreased 1% to
$36.1 million in the fourth quarter of 2008 compared to $36.5 million in
the historical pro forma combined fourth quarter of 2007.
Non-compensation expenses increased 10% to $145.3 million for the full
year of 2008, excluding the one-time, non-cash goodwill charge-off of
$92.6 million, compared to $132.3 million in the historical pro forma
combined full year of 2007.
-- Shareholders' Equity Position. At the end of 2008, shareholders'
equity and book value per share were $215 million and $6.99, respectively,
and tangible shareholders' equity and tangible book value per share were
$192 million and $6.24, respectively.
THOMAS WEISEL PARTNERS GROUP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31,
2008
AND PRO FORMA SELECTED FINANCIAL DATA FOR THE THREE MONTHS AND
YEAR ENDED DECEMBER 31, 2007
(Dollar amounts in thousands, except book value per share)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
-------------------- --------------------
Pro Forma Pro Forma
2008 2007(5) 2008 2007(5)
--------- --------- --------- ---------
Revenue Detail:
Investment banking
Capital raising $ 2,979 $ 41,765 $ 28,183 $ 128,749
Strategic advisory 8,360 6,945 35,122 56,861
--------- --------- --------- ---------
Total investment banking 11,339 48,710 63,305 185,610
Brokerage 27,293 40,333 131,939 135,747
Asset management
Management fees 3,807 3,956 14,691 15,946
Private equity realized
and unrealized gains and
(losses) - net (9,280) 3,428 (13,414) 17,662
Other securities realized
and unrealized gains and
(losses) - net (1,532) 3,808 (8,397) 11,037
--------- --------- --------- ---------
Total asset management (7,005) 11,192 (7,120) 44,645
Interest income 640 4,819 7,341 17,579
Other revenue - - - 920
--------- --------- --------- ---------
Total revenues 32,267 105,054 195,465 384,501
Interest expense (724) (2,430) (5,938) (10,653)
--------- --------- --------- ---------
Net revenues $ 31,543 $ 102,624 $ 189,527 $ 373,848
========= ========= ========= =========
Investment Banking Transactions:
Capital raising 6 43 59 158
Strategic advisory 8 5 23 27
--------- --------- --------- ---------
Total transactions 14 48 82 185
--------- --------- --------- ---------
Revenue per transaction(1) $ 810 $ 1,015 $ 772 $ 1,003
Other Metrics:
Non-GAAP compensation ratio(2) 66.1% 60.0% 69.4% 59.9%
Non-compensation ratio(3) 114.6% 35.5% 125.5% 35.4%
IPO equity award expense $ 1,144 $ 532 $ 6,291 $ 6,117
Shareholders' equity 215,350 n/a 215,350 n/a
Less: Other intangible assets (23,229) n/a (23,229) n/a
--------- ---------
Tangible shareholders' equity 192,121 n/a 192,121 n/a
========= =========
Common shares outstanding(4) 30,789 n/a 30,789 n/a
Book value per share $ 6.99 n/a $ 6.99 n/a
Tangible book value per
Share $ 6.24 n/a $ 6.24 n/a
(1) Generally, average revenue per investment banking transaction is higher
in the U.S. than in Canada.
(2) The firm's non-GAAP compensation ratio is the ratio of the firm's
compensation and benefits expenses (excluding expenses relating to IPO
equity awards) to net revenues (excluding investment gains and losses
attributable to investments in partnerships and other securities). The
firm's non-GAAP compensation ratio for the three months and year ended
December 31, 2007 also excludes the one-time compensation expense
attributable to the acceleration of the payment of 2008 mid-year retention
bonuses related to the integration of Westwind Partners. Without excluding
these amounts, the firm's ratio of compensation and benefits expenses to
net revenues is 89.2% and 82.7% for the three months ended December 31,
2008 and 2007, respectively. Without excluding these amounts, the firm's
ratio of compensation and benefits expenses to net revenues is 77.7% and
65.4% for the year ended December 31, 2008 and 2007, respectively.
(3) The firm's non-compensation ratio is the ratio of all expenses (other
than compensation and benefits expenses and interest expenses) to net
revenues.
(4) 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 of the firm.
(5) The pro forma amounts depict results the firm estimates it would have
had during the three months and year ended December 31, 2007 if the
acquisition of Westwind Partners that it consummated in January 2008 had
been consummated as of January 1, 2007. Further information regarding
these 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 an unaudited pro
forma consolidated statement of operations for the three months and
year ended December 31, 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
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 unaudited pro forma consolidated financial statements should be
read in conjunction with the firm's Annual Report on Form 10-K for
the period 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 unaudited pro forma consolidated statement of operations for
the three months and year ended December 31, 2007 was prepared
using the purchase method of accounting with Thomas Weisel Partners
treated as the accounting acquiror. The 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 periods presented, or which may be
obtained in the future. The pro forma adjustments are described in
the notes accompanying the 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 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
three months ended December 31, 2008 on a non-GAAP basis by:
-- excluding $0.7 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 $2.1 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.
The firm has also reported in this press release its basic and
diluted loss per share for the three months ended December 31, 2008
on a non-GAAP basis by:
-- using a net loss of $18.7 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 $21.5 million and adjusting to exclude
(i) the after-tax non-cash expense associated with its initial grant of
restricted stock units of $0.7 million and (ii) the after-tax non-cash
expense associated with the amortization of intangible assets acquired as a
result of its acquisition of Westwind Partners of $2.1 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
year ended December 31, 2008 on a non-GAAP basis by:
-- excluding $3.7 million of after-tax non-cash expense associated with
its initial grant of restricted stock units made in connection with its
initial public offering;
-- excluding $8.8 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; and
-- excluding $92.6 million of non-cash expense associated with the charge-
off of goodwill acquired as a result of its acquisition of Westwind
Partners.
The firm has also reported in this press release its basic and
diluted loss per share for the year ended December 31, 2008 on a
non-GAAP basis by:
-- using a net loss of $53.5 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 $158.6 million and adjusting to exclude
(i) the after-tax non-cash expense associated with its initial grant of
restricted stock units of $3.7 million (ii) the after-tax non-cash expense
associated with the amortization of intangible assets acquired as a result
of its acquisition of Westwind Partners of $8.8 million and (iii) the non-
cash expense associated with the charge-off of goodwill acquired as a
result of its acquisition of Westwind Partners of $92.6 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 fourth quarter
revenue run rate for the three months ended December 31, 2008 on a
non-GAAP basis by:
-- excluding $5.7 million in convertible trading losses;
-- excluding $9.3 million in non-cash mark-to-market private equity
investment write-downs;
-- excluding $0.9 million in non-cash net warrant write-downs; and
-- excluding $0.5 million in non-cash auction rate securities write-
downs.
The firm views its grant of restricted stock units in connection
with its initial public offering, its acquisition of Westwind
Partners, the related intangible amortization and goodwill
charge-off, the convertible trading losses, the non-cash net
warrant, mark-to-market private equity investment and auction rate
securities write-downs and the gains and losses associated with
certain asset management products as non-recurring or non-cash
events and the firm's management has utilized non-GAAP calculations
of net revenue and 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 three months and year ended
December 31, 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 revenue
and 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 revenue, 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 GAAP net loss to its non-GAAP net
loss for the three months ended December 31, 2008 is set forth
below (in millions):
Net loss $ (21.5)
Exclusion of the after-tax non-cash expense associated with
initial grant of restricted stock units 0.7
Exclusion of the after-tax non-cash expense associated with the
amortization of intangible assets acquired as a result of the
firm's acquisition of Westwind Partners 2.1
-------
Non-GAAP net loss $ (18.7)
=======
A reconciliation of the firm's GAAP net loss to its non-GAAP net
loss for the year ended December 31, 2008 is set forth below (in
millions):
Net loss $ (158.6)
Exclusion of the after-tax non-cash expense associated with
initial grant of restricted stock units 3.7
Exclusion of the after-tax non-cash expense associated with the
amortization of intangible assets acquired as a result of the
firm's acquisition of Westwind Partners 8.8
Exclusion of the non-cash expense associated with the charge-off
of goodwill acquired as a result of the firm?s acquisition of
Westwind Partners 92.6
--------
Non-GAAP net loss $ (53.5)
========
The firm calculates loss per share in accordance with FASB
Statement No. 128, Earnings per Share. Basic net loss and diluted
net 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
net loss per share for the three months and year ended December 31,
2008, as well as non-GAAP net loss per share for the three months
and year ended December 31, 2008 after applying the adjustments
described above:
Three
Months Ended Year Ended
December December
31, 2008 31, 2008
----------- -----------
Weighted average shares used in computation of
net loss per share:
Basic (in thousands) 31,825 32,329
Diluted (in thousands) 31,825 32,329
Net loss per share:
Basic $ (0.67) $ (4.90)
Diluted $ (0.67) $ (4.90)
Non-GAAP net loss per share:
Basic $ (0.59) $ (1.65)
Diluted $ (0.59) $ (1.65)
A reconciliation of the firm's GAAP net revenue to its fourth
quarter revenue run rate for the three months ended December 31,
2008 is set forth below (in millions):
Net revenues $ 31.5
Exclusion of convertible trading losses 5.7
Exclusion of non-cash mark-to-market private equity investment
write-downs 9.3
Exclusion of non-cash net warrant write-downs 0.9
Exclusion of non-cash auction rate securities write-downs 0.5
------
Non-GAAP net revenues $ 48.0
======
Quarterly Earnings Conference Call
Thomas Weisel Partners Group, Inc. will host its fourth quarter
conference call on Wednesday, February 11, 2009 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 (866)
746-9599 (domestic) or (702) 696-4728 (international). The
confirmation code for both the domestic and international lines is:
81645739.
A live web cast of the call, as well as the firm's results, will
be available through the Investor Relations/Webcasts section of
www.tweisel.com, which can also be accessed directly at:
http://www.tweisel.com/AboutUs/InvestorRelations/Webcasts. 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 through the above-referenced web-site one hour
following the call through February 27, 2009.
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 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, the state of the financial markets and the economy,
particularly as they relate to the growth sectors that the firm is
focused on, Thomas Weisel Partners' ability to implement its
strategic initiatives and achieve the expected benefits of the
acquisition of Westwind Partners, retain its professionals, as well
as other competitive, economic, political, and market conditions
and fluctuations, government and industry regulation, risks
relating to the acquisition of Westwind Partners, 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 DECEMBER
31, 2008
AND PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2007
(In thousands, except per share data)
(Unaudited)
Three Three Months Ended December 31, 2007
Months ---------------------------------------
Ended Thomas Pro Pro
December Weisel Westwind Forma Forma
31, 2008 Partners (a) Adjustments Combined
-------- -------- ------- ------- --------
Revenues:
Investment banking $ 11,339 $ 32,789 $15,921 $ -- $ 48,710
Brokerage 27,293 34,761 5,572 -- 40,333
Asset management (7,005) 6,703 4,489 -- 11,192
Interest income 640 5,032 344 (557)(b) 4,819
-------- -------- ------- ------- --------
Total revenues 32,267 79,285 26,326 (557) 105,054
Interest expense (724) (2,376) (54) -- (2,430)
-------- -------- ------- ------- --------
Net revenues 31,543 76,909 26,272 (557) 102,624
-------- -------- ------- ------- --------
Expenses excluding
interest:
Compensation and
benefits 28,140 68,213 16,656 -- 84,869
Brokerage execution,
clearance and account
administration 6,769 5,393 452 -- 5,845
Communications and
data processing 5,094 5,199 546 -- 5,745
Depreciation and
amortization of
property and
equipment 2,063 1,669 205 (41)(c) 1,833
Amortization of other
intangible assets 3,690 -- -- 3,833 (d) 3,833
Marketing and
promotion 2,764 4,624 1,103 -- 5,727
Occupancy and
equipment 8,260 5,153 387 -- 5,540
Other expense 7,498 6,628 1,308 -- 7,936
-------- -------- ------- ------- --------
Total expenses
excluding interest 64,278 96,879 20,657 3,792 121,328
-------- -------- ------- ------- --------
Income (loss) before
taxes (32,735) (19,970) 5,615 (4,349) (18,704)
Provision for taxes (tax
benefit) (11,277) (8,787) 2,047 (1,218)(e) (7,958)
-------- -------- ------- ------- --------
Net income (loss) $(21,458) $(11,183) $ 3,568 $(3,131) $(10,746)
======== ======== ======= ======= ========
Net loss per share:
Basic net loss per
share $ (0.67) $ (0.43) $ (0.33)
Diluted net loss per
share $ (0.67) $ (0.43) $ (0.33)
Weighted average shares
used in computation of
per share data:
Basic weighted
average shares
outstanding 31,825 26,003 7,009(f) 33,012
Diluted weighted
average shares
outstanding 31,825 26,003 7,009(f) 33,012
Notes to the Pro Forma Consolidated Statements of Operations for the
three months ended December 31, 2007 are set forth on the final page.
THOMAS WEISEL PARTNERS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2008
AND PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2007
(In thousands, except per share data)
(Unaudited)
Year Ended December 31, 2007
Year ----------------------------------------
Ended Thomas Pro Pro
December Weisel Westwind Forma Forma
31, 2008 Partners (a) Adjustments Combined
--------- -------- ------- -------- --------
Revenues:
Investment banking $ 63,305 $127,228 $58,382 $ -- $185,610
Brokerage 131,939 120,187 15,560 -- 135,747
Asset management (7,120) 33,414 11,231 -- 44,645
Interest income 7,341 17,718 1,740 (1,879)(b) 17,579
Other revenue -- 920 -- -- 920
--------- -------- ------- -------- --------
Total revenues 195,465 299,467 86,913 (1,879) 384,501
Interest expense (5,938) (10,418) (235) -- (10,653)
--------- -------- ------- -------- --------
Net revenues 189,527 289,049 86,678 (1,879) 373,848
--------- -------- ------- -------- --------
Expenses excluding
interest:
Compensation and
benefits 147,186 187,902 56,529 -- 244,431
Brokerage execution,
clearance and
account
administration 27,102 20,363 1,625 -- 21,988
Communications and
data processing 22,195 18,993 1,954 -- 20,947
Depreciation and
amortization of
property and
equipment 7,784 6,450 569 (164)(c) 6,855
Amortization of
other intangible
assets 15,254 -- -- 15,397 (d) 15,397
Goodwill impairment 92,597 -- -- -- --
Marketing and
promotion 13,915 15,147 3,183 -- 18,330
Occupancy and
equipment 26,509 18,988 1,400 -- 20,388
Other expense 32,537 23,979 4,392 -- 28,371
--------- -------- ------- -------- --------
Total expenses
excluding
interest 385,079 291,822 69,652 15,233 376,707
--------- -------- ------- -------- --------
Income (loss) before
taxes (195,552) (2,773) 17,026 (17,112) (2,859)
Provision for taxes
(tax benefit) (36,983) (2,793) 6,208 (5,798)(e) (2,383)
--------- -------- ------- -------- --------
Net income (loss) $(158,569) $ 20 $10,818 $(11,314) $ (476)
========= ======== ======= ======== ========
Net income (loss) per
share:
Basic net income
(loss) per share $ (4.90) $ -- $ (0.01)
Diluted net income
(loss) per share $ (4.90) $ -- $ (0.01)
Weighted average
shares used in
computation of per
share data:
Basic weighted
average shares
outstanding 32,329 26,141 7,009(f) 33,150
Diluted weighted
average shares
outstanding 32,329 26,446 7,009(f) 33,150
Notes to the Pro Forma Consolidated Statements of Operations for the
year ended December 31, 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 December 31, 2007.
(b) An adjustment to interest income for the estimated interest amount
that would not have been recognized by the firm during the three months and
year ended December 31, 2007 on the $45 million cash portion of the
transaction consideration. The weighted average interest rate for the three
months and year ended December 31, 2007 is estimated to be 4.96% and 4.26%,
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 43% and 83% for the three months and year ended
December 31, 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 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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