HOUSTON, March 15, 2011 /PRNewswire/ -- Sanders Morris
Harris Group Inc. (Nasdaq: SMHG) today reported fourth quarter
earnings from continuing operations of $4.2
million, or $0.15 per share.
Earnings per share were $0.18, aided
by higher values of its partnerships and other assets. Total client
assets rose to $17.1 billion, up 52%
from the end of 2009, bolstered by the acquisition of a 50.1%
interest in Global Financial Services.
The Company announced that Ric
Edelman, President, would become Co-Chief Executive Officer
at the annual meeting in May. George L.
Ball, Chairman and current Chief Executive Officer, will
share that position with Mr. Edelman. Sanders Morris Harris Group
will be renamed The Edelman Financial Group at that time, subject
to shareholder approval.
Mr. Ball said, "Ric is a skilled manager, communicator and man
of integrity. He will provide leadership to the Company that will
create superior shareholder value as well as superior opportunities
for the other stakeholders. We plan for Ric to become the sole
Chief Executive Officer after a year and are renaming the Company
to reflect the nationwide awareness of the Edelman brand. We have
committed millions of dollars to enhance that brand awareness and
should benefit further from it."
Mr. Edelman commented, "I'm honored by the expanded role. I've
worked with the entire company for several years now, and we are
succeeding in our efforts to integrate its various entities. George
will continue to function in the same way as before, and his energy
and mine will be focused together as they have been, and hopefully
will continue to be for a long time."
Added Don A. Sanders, Vice
Chairman and a founder of Sanders Morris Harris, "Sanders Morris
Harris has a proud history dating back nearly 25 years. However, it
makes sense to adopt the nationally recognized Edelman name for the
parent company. It will make our growth swifter and will capitalize
on the radio and television presence that Ric has established."
The expansion of the Edelman offices continued on pace. The
client assets in the six New York
area offices established in late 2009 rose to $297 million at year end versus the $255 million projected in mid-2010. There are now
20 Edelman offices beyond the flagship Fairfax headquarters.
Six to eight more are expected to be opened by the end of the
quarter. Overall, Edelman Financial added $197 million of net new client assets in the
quarter beyond gains from portfolio performance. Mr. Ball
commented, "The entire Company had strong marketing results in 2010
and has a program designed to augment that effort this year."
In the fourth quarter of 2010, the Company had revenue of
$46.4 million. Excluding Concept
Capital, which was substantially disposed of during the quarter,
revenue grew 10% from the prior year level. Adjusted for
non-recurring securities gains, operating, and other losses
associated with the disposal of Concept Capital, and expenses of
the Edelman Financial expansion offices, income from continuing
operations during the 2011 fourth quarter would have been
$2.2 million, or $0.08 per share. Income from discontinued
operations net of tax amounted to $962,000, or $0.03
per share.
The Company earned $10.4 million,
or $0.35 per share, from continuing
operations during the year ended December
31, 2010, compared to a loss of $4.0
million, or $(0.14) per share,
during the year ended December 31,
2009. Revenue was $168.8
million during 2010, compared to $164.2 million during the prior year.
Conference Call
The Company will host a conference call on Tuesday, March 15, 2011 to discuss fourth quarter
2010 financial and operational results. The call will begin at
9:00 a.m. Central Time, and is open
to the public. To listen to the conference call, use U.S. dial-in
number (800) 447-0521 or International dial-in number (847)
413-3238 and enter pass code 28929528. It is recommended that
listeners phone in at least 10 minutes before the call is scheduled
to begin to avoid delay. For those unable to listen to the live
call, a replay of the conference call in its entirety will be
available approximately two hours after its completion for 10 days
by dialing (888) 843-8996 (U.S.), (630) 652-3044 (International)
and entering the pass code 28929528.
About Sanders Morris Harris Group
Sanders Morris Harris Group is a wealth management company that
manages approximately $17.1 billion
in client assets. Client assets include the gross value of assets
under management directly or via outside managers and assets held
in brokerage accounts for clients by outside clearing firms. Its
corporate philosophy of investment in common aligns its interests
with those of its clients. Sanders Morris
Harris has approximately 530 employees in 25 states.
Additional information is available at www.smhgroup.com.
In addition to the historical information, this press release
contains certain forward-looking and non-GAAP statements under
federal securities laws. These statements concern Sanders Morris
Harris Group's expected future business prospects, revenue and
income. These forward-looking statements are based upon current
expectations and involve certain risks and uncertainties that could
cause actual results to differ materially from any such statement.
Non-GAAP information includes operating earnings, defined as
earnings from continuing operations, adjusted for investment
portfolio gains and losses. These risks and uncertainties, many of
which are beyond the Company's control, include but are not limited
to (1) trading volume in the securities markets; (2) volatility of
the securities markets and interest rates; (3) changes in
regulatory requirements that could affect the demand for the
Company's services or the cost of doing business; (4) general
economic conditions, both domestic and foreign, especially in the
regions where the Company does business; (5) changes in the rate of
inflation and related impact on securities markets; (6) competition
from existing financial institutions and other new participants in
the securities markets; (7) legal developments affecting the
litigation experience of the securities industry; (8) successful
implementation of technology solutions; (9) changes in valuations
of the Company's trading and warrant portfolios resulting from
mark-to-market adjustments; (10) dependence on key personnel; (11)
demand for the Company's services; and (12) litigation and
securities law liabilities. The Company does not undertake any
obligation to publicly update or revise any forward-looking
statements.
|
|
|
|
Sanders
Morris Harris
Selected Condensed
Operating Information
(in thousands, except per
share amounts)
(unaudited)
|
|
|
Three Months
Ended
|
|
Twelve
Months Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2010
|
2009
|
|
2010
|
2009
|
|
Revenue
|
$
|
46,372
|
|
$
|
45,974
|
|
|
$
|
168,843
|
|
$
|
164,240
|
|
|
Expenses
|
|
44,285
|
|
|
40,470
|
|
|
|
158,332
|
|
|
166,322
|
|
|
Net
|
|
2,087
|
|
|
5,504
|
|
|
|
10,511
|
|
|
(2,082)
|
|
|
Equity in income (loss) of
limited partnerships
|
|
7,563
|
|
|
(4,108)
|
|
|
|
12,894
|
|
|
(1,348)
|
|
|
Gain on step
acquisition
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
3,000
|
|
|
Income (loss) from
continuing operations before income taxes
|
|
9,650
|
|
|
1,396
|
|
|
|
23,405
|
|
|
(430)
|
|
|
(Provision) benefit for income
taxes
|
|
(3,237)
|
|
|
47
|
|
|
|
(7,173)
|
|
|
1,578
|
|
|
Income from continuing
operations, net of income taxes
|
|
6,413
|
|
|
1,443
|
|
|
|
16,232
|
|
|
1,148
|
|
|
Income (loss) from discontinued
operations, net of tax of $614, $3,084, $446 and $1,082,
respectively
|
|
962
|
|
|
3,129
|
|
|
|
(697)
|
|
|
(1,518)
|
|
|
Net income (loss)
|
|
7,375
|
|
|
4,572
|
|
|
|
15,535
|
|
|
(370)
|
|
|
Less: Net income
attributable to the noncontrolling interest
|
|
(2,208)
|
|
|
(1,447)
|
|
|
|
(5,839)
|
|
|
(5,112)
|
|
|
Net income (loss) attributable
to Sanders Morris Harris Group Inc.
|
$
|
5,167
|
|
$
|
3,125
|
|
|
$
|
9,696
|
|
$
|
(5,482)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per common
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.15
|
|
$
|
-
|
|
|
$
|
0.35
|
|
$
|
(0.14)
|
|
|
Discontinued
operations
|
|
0.03
|
|
|
0.11
|
|
|
|
(0.02)
|
|
|
(0.05)
|
|
|
Net earnings
(loss)
|
$
|
0.18
|
|
$
|
0.11
|
|
|
$
|
0.33
|
|
$
|
(0.19)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.15
|
|
$
|
-
|
|
|
$
|
0.35
|
|
$
|
(0.14)
|
|
|
Discontinued
operations
|
|
0.03
|
|
|
0.11
|
|
|
|
(0.02)
|
|
|
(0.05)
|
|
|
Net earnings
(loss)
|
$
|
0.18
|
|
$
|
0.11
|
|
|
$
|
0.33
|
|
$
|
(0.19)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
28,419
|
|
|
28,676
|
|
|
|
29,203
|
|
|
28,402
|
|
|
Diluted
|
|
28,739
|
|
|
28,676
|
|
|
|
29,370
|
|
|
28,402
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to Sanders
Morris Harris Group Inc.
common
shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations, net of tax,
attributable to Sanders Morris Harris Group Inc.
|
$
|
4,205
|
|
$
|
(4)
|
|
|
$
|
10,393
|
|
$
|
(3,964)
|
|
|
Discontinued
operations, net of tax
|
|
962
|
|
|
3,129
|
|
|
|
(697)
|
|
|
(1,518)
|
|
|
Net income
(loss)
|
$
|
5,167
|
|
$
|
3,125
|
|
|
$
|
9,696
|
|
$
|
(5,482)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP to non-GAAP
Reconciliation
|
Three Months
Ended
|
|
|
|
|
December 31,
2010
|
|
|
|
|
Amount
|
Diluted
EPS
|
|
|
|
|
Income from continuing
operations, attributable to
Sanders Morris
Harris Group Inc.
|
$
|
4,205
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-recurring
investment portfolio gains, operating, and other Concept Capital
losses
|
|
(3,480)
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: tax at 43.5%
|
|
1,514
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating earnings
|
$
|
2,239
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
28,739
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet
data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
44,521
|
|
|
|
|
|
|
|
|
|
|
|
|
Other tangible net
assets
|
|
71,420
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible net
assets
|
|
115,941
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
$
|
264,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sanders
Morris Harris
Selected Condensed
Operating Information
(in thousands)
(unaudited)
|
|
|
Three Months
Ended
|
|
Twelve
Months Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2010
|
2009
|
|
2010
|
2009
|
|
Revenue:
|
|
|
|
|
|
|
Wealth Management
|
$ 33,805
|
$ 28,853
|
|
$ 125,299
|
$ 100,943
|
|
Institutional
Services
|
|
|
|
|
|
|
Institutional
brokerage
|
1,270
|
986
|
|
4,523
|
4,814
|
|
Prime brokerage
services
|
6,795
|
9,983
|
|
30,390
|
49,837
|
|
Institutional Services Total
|
8,065
|
10,969
|
|
34,913
|
54,651
|
|
Corporate Support
|
4,502
|
6,152
|
|
8,631
|
8,646
|
|
Total
|
$ 46,372
|
$ 45,974
|
|
$ 168,843
|
$ 164,240
|
|
|
|
|
|
|
|
|
Income (loss) from continuing
operations before equity in
income (loss) of limited
partnerships and income taxes:
|
|
|
|
|
|
|
Wealth Management
|
$
8,532
|
$ 7,633
|
|
$ 32,804
|
$ 26,685
|
|
Institutional
Services
|
|
|
|
|
|
|
Institutional
brokerage
|
11
|
(1,283)
|
|
(454)
|
(638)
|
|
Prime brokerage
services
|
(2,476)
|
1,950
|
|
(1,950)
|
2,311
|
|
Institutional Services Total
|
(2,465)
|
667
|
|
(2,404)
|
1,673
|
|
Corporate Support
|
(3,980)
|
(2,796)
|
|
(19,889)
|
(30,440)
|
|
Total
|
$
2,087
|
$
5,504
|
|
$ 10,511
|
$
(2,082)
|
|
|
|
|
|
|
|
|
Equity in income (loss) of
limited partnerships:
|
|
|
|
|
|
|
Wealth Management
|
$
1,184
|
$
(99)
|
|
$
2,396
|
$
(898)
|
|
Institutional
Services
|
|
|
|
|
|
|
Institutional
brokerage
|
-
|
-
|
|
-
|
-
|
|
Prime brokerage
services
|
-
|
-
|
|
-
|
-
|
|
Institutional Services Total
|
-
|
-
|
|
-
|
-
|
|
Corporate Support
|
6,379
|
(4,009)
|
|
10,498
|
(450)
|
|
Total
|
$
7,563
|
$
(4,108)
|
|
$ 12,894
|
$
(1,348)
|
|
|
|
|
|
|
|
|
Gain on step
acquisition:
|
|
|
|
|
|
|
Wealth Management
|
$
-
|
$
-
|
|
$
-
|
$
-
|
|
Institutional
Services
|
|
|
|
|
|
|
Institutional
brokerage
|
-
|
-
|
|
-
|
-
|
|
Prime brokerage
services
|
-
|
-
|
|
-
|
-
|
|
Institutional Services Total
|
-
|
-
|
|
-
|
-
|
|
Corporate Support
|
-
|
-
|
|
-
|
3,000
|
|
Total
|
$
-
|
$
-
|
|
$
-
|
$
3,000
|
|
|
|
|
|
|
|
|
Income (loss) from continuing
operations before income taxes:
|
|
|
|
|
|
|
Wealth Management
|
$
9,716
|
$
7,534
|
|
$ 35,200
|
$ 25,787
|
|
Institutional
Services
|
|
|
|
|
|
|
Institutional
brokerage
|
11
|
(1,283)
|
|
(454)
|
(638)
|
|
Prime brokerage
services
|
(2,476)
|
1,950
|
|
(1,950)
|
2,311
|
|
Institutional Services Total
|
(2,465)
|
667
|
|
(2,404)
|
1,673
|
|
Corporate Support
|
2,399
|
(6,805)
|
|
(9,391)
|
(27,890)
|
|
Total
|
$
9,650
|
$
1,396
|
|
$ 23,405
|
$
(430)
|
|
|
|
|
|
|
|
|
Net income attributable to the
noncontrolling interest in consolidated companies:
|
|
|
|
|
|
|
Wealth Management
|
$
(2,208)
|
$
(1,447)
|
|
$
(5,839)
|
$
(5,112)
|
|
Institutional
Services
|
|
|
|
|
|
|
Institutional
brokerage
|
-
|
-
|
|
-
|
-
|
|
Prime brokerage
services
|
-
|
-
|
|
-
|
-
|
|
Institutional Services Total
|
-
|
-
|
|
-
|
-
|
|
Corporate Support
|
-
|
-
|
|
-
|
-
|
|
Total
|
$
(2,208)
|
$
(1,447)
|
|
$
(5,839)
|
$
(5,112)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Sanders Morris Harris Group Inc.