NYSE - OPY NEW YORK, Oct. 30 /PRNewswire-FirstCall/ -- Expressed in
thousands of dollars, except share and Three Months ended Nine
Months ended per share amounts September 30, September 30,
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(unaudited) 2009 2008 2009 2008 Revenue $262,067 $222,187 $718,056
$710,303 Expenses $248,017 $225,898 $693,852 $738,617 Profit (loss)
before taxes $14,050 $(3,711) $24,204 $(28,314) Net profit (loss)
$7,908 $(2,477) $13,024 $(16,945) Basic earnings (loss) per share
$0.60 $(0.18) $1.00 $(1.26) Diluted earnings (loss) per share $0.59
$(0.18) $0.97 $(1.26) Book value per share $33.68 $32.87 Business
Review Oppenheimer Holdings Inc. reported a net profit of $7.9
million or $0.60 per share for the third quarter of 2009, compared
to a net loss of $2.5 million or $0.18 per share in the third
quarter of 2008. Revenue for the third quarter of 2009 was $262.1
million, compared to revenue of $222.2 million in the third quarter
of 2008, an increase of 18%. The net profit for the nine months
ended September 30, 2009 was $13.0 million or $1.00 per share
compared to a net loss of $16.9 million or $1.26 per share for the
nine months ended September 30, 2008. Revenue for the nine months
ended September 30, 2009 was $718.1 million, compared to revenue of
$710.3 million for the same period in 2008. The U.S economy began
to emerge from recession during the third quarter of 2009. While
employment continued to deteriorate (albeit at lower rates of
decline) other indicators showed improvement including: increased
manufacturing activity, higher commodity prices and higher end
sales to consumers and businesses and the fact that housing prices
appear to be stabilizing. These factors are likely to lead to a
sustainable recovery. The markets continued to respond to these
improved conditions with equities showing gains of over 50% since
the March 2009 lows. These improving market conditions as well as
greater investor confidence have led to overall revenue
improvements for the company in each successive quarter of 2009.
Revenue from commissions and principal transactions in the three
and nine months ended September 30, 2009 surpassed levels achieved
in comparable periods in 2008 as a result of the effects of rising
equity prices and the credit markets recovery from the distressed
levels of 2008 and the early months of 2009. Revenue from
investment banking activities continues at a slow pace as many
mid-sized companies continue to face restricted access to the
capital markets. Net interest revenue for the Company, as well as
fees derived from money market funds and FDIC insured deposits of
clients, have been adversely affected by the low interest rate
policies that have been designed to stimulate the economy. Asset
management advisory fees declined in the third quarter when
compared to the prior year based on the lower value of underlying
assets at the commencement of the period. Highlights of the
company's results for the three and nine months ended September 30,
2009 follow: Revenue and Expense Revenue - Third Quarter 2009
---------------------------- - Commission revenue was $146.4
million in the third quarter of 2009 compared to $133.5 million in
the third quarter of 2008, representing an increase of 10%. -
Principal transaction revenue was significantly higher in the third
quarter of 2009 at $29.8 million compared to a loss of $862
thousand in the third quarter of 2008 due to strength in fixed
income trading of $26.2 million in the third quarter 2009 (versus
$4.4 million in the third quarter of 2008) as well as losses
sustained in the convertible bond arbitrage business in the third
quarter of 2008. - Interest revenue of $9.1 million in the third
quarter of 2009 represented a decline of 43% from $16.1 million in
the third quarter of 2008 due to declining interest rates as well
as a decrease in average margin debit balances of 28% and average
stock borrow balances of 33% over the same periods. - Investment
banking revenue increased 55% to $25.1 million in the third quarter
of 2009 versus $16.2 million in the third quarter of 2008 due to
the market's renewed appetite for equity issuances. - Advisory fees
were $38.7 million in the third quarter 2009 compared to $51.1
million in the third quarter 2008 as a result of a decrease in
assets under management of 17% during the period as well as a
decrease of $6.2 million in fees derived from money market funds. -
Other revenue increased 109% to $13.0 million from the third
quarter 2008 as a result of increases to the value of company owned
life insurance of $5.1 million and increased fees of $3.6 million
related to the Company's mortgage brokerage business, partially
offset by a decrease of $2.5 million in fees derived from FDIC
insured bank deposits. Revenue - Year-to-Date 2009
--------------------------- - Commission revenue was $412.9 million
in the nine months ended September 30, 2009 compared to $391.3
million in the same period in 2008, representing an increase of 6%.
- Principal transaction revenue was significantly higher in the
nine months ended September 30, 2009 at $84.7 million compared to
$28.2 in the same period in 2008. - Interest revenue declined 51%
from $51.2 million in the nine months ended September 30, 2008 to
$25.3 million in the nine months ended September 30, 2009 due to
declining interest rates as well as decreases in average margin
debit balances of 36% and average stock borrow balances of 46% over
the same periods. - Investment banking revenue decreased 19% to
$55.6 million in the nine months ended September 30, 2009 versus
$68.7 million in the same period in 2008 due to lower M&A and
equity capital markets activity. - Advisory fees were $109.9
million in the in the nine months ended September 30, 2009 compared
to $157.6 million in the same period in 2008 as a result of a
decrease in assets under management during the period of 26% as
well as a decrease of $14.8 million in fees derived from money
market funds. - Other revenue increased 125% to $29.5 million for
the nine months ended September 30, 2009 from the same period in
2008 as a result of increases to the value of company owned life
insurance of $9.1 million and increased fees of $5.0 million
related to the Company's mortgage brokerage business, partially
offset by a decrease of $1.2 million in fees derived from FDIC
insured client deposits. Expenses - Third Quarter 2009
----------------------------- - Compensation and related expenses
increased 24% in the third quarter of 2009 to $175.5 million from
$141.3 million during the third quarter 2008 as production and
incentive-related compensation increased $29.9 million, deferred
compensation costs increased $6.6 million, and share-based
compensation, directly related to an increased share price during
the quarter, increased $1.9 million. These increases were partially
offset by a decrease of $8.6 million for expenses related to
deferred compensation obligations to former CIBC employees. -
Communications and technology expenses decreased 32% to $14.0
million in the third quarter as a result of a reduction, or
elimination, of many costs associated with the January 2008
acquisition of a major part of CIBC World Markets' U.S. Capital
Markets Businesses. - Occupancy and equipment costs increased 7% to
$19.0 million in the third quarter 2009 from $17.7 million in the
third quarter 2008 due to escalation provisions increasing rental
costs in New York, as well as the opening of new branch offices
around the country. - Interest expenses declined 53% from $10.4
million in the third quarter 2008 to $4.8 million in the third
quarter 2009 due to declining interest rates as well as a decrease
in average stock loan balances of 32% and average bank loan
balances of 59% over the same periods. Expenses - Year-to-Date 2009
---------------------------- - Compensation and related expenses
were flat for the nine months ended September 30, 2009 compared
with the same period in 2008. Although the aggregate amounts were
unchanged year over year, production and incentive-related
compensation increased $7.9 million, deferred compensation costs
increased $10.4 million, and share-based compensation, directly
related to an increased share price during the period, increased
$10.5 million. These increases were offset by a decrease of $31.7
million for expenses related to deferred compensation obligations
to former CIBC employees. - Clearing and exchange fees decreased
16% for the nine months ended September 30, 2009 compared to the
same period in 2008 primarily reflecting the economies of
transitioning the acquired businesses to the Company's platform. -
Communications and technology expenses decreased 14% to $48.3
million for the nine months ended September 30, 2009 as a result of
a reduction, or elimination, of many costs associated with our
January 2008 acquisition. - Occupancy and equipment costs increased
6% to $55.5 million for the nine months ended September 30, 2009
from $52.3 million in the same period in 2008 due to escalation
provisions increasing rental costs in New York, as well as the
opening of new branch offices around the country. - Interest
expenses declined 55% from $34.1 million for the nine months ended
September 30, 2008 to $15.4 million in the nine months ended
September 30, 2009 due to declining interest rates as well as a
decrease of 55% both in average stock loan balances and in average
bank loan balances over the same periods. - Other expenses
decreased 22% from $91.1 million for the nine months ended
September 30, 2008 to $71.1 million in the nine months ended
September 30, 2009 largely as a result of the elimination of $32.3
million in non-recurring transitional support costs related to the
CIBC capital markets business acquired in January 2008 offset by an
increase in legal costs of approximately $9.9 million.
Shareholders' Equity and Dividend Declaration - At September 30,
2009, shareholders' equity was $443.1 million compared to $425.7
million at December 31, 2008. - At September 30, 2009, book value
per share was $33.68 compared to $32.75 at December 31, 2008 and
$32.87 at September 30, 2008. - During the third quarter of 2009,
the Company did not make any purchases pursuant to its stock
buy-back program. - The Company announced today a quarterly
dividend in the amount of U.S. $0.11 per share, payable on November
27, 2009 to holders of Class A non-voting and Class B voting common
stock of record on November 13, 2009. Balance Sheet and Liquidity
Matters - On September 30, 2009, the Company paid down $4.4 million
of principal on its Senior Secured Credit Note reducing the
outstanding balance to $32.9 million. - The Company's level 3
assets were $20.9 million at September 30, 2009 compared to $21.2
million at June 30, 2009 and $19.8 million at December 31, 2008.
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OPPENHEIMER HOLDINGS INC. SUMMARY STATEMENT OF OPERATIONS
(UNAUDITED) $ in thousands, except share and per share amounts
---------------------------------------------------------- Three
Months Ended Nine Months Ended % % 09/30/09 09/30/08 Change
09/30/09 09/30/08 Change
---------------------------------------------------------- REVENUE
Commissions $146,404 $133,506 10% $412,913 $391,344 6% Principal
transactions, net 29,778 (862) n/a 84,720 28,245 200% Interest
9,145 16,087 -43% 25,335 51,233 -51% Investment banking 25,096
16,185 55% 55,597 68,736 -19% Advisory fees 38,668 51,057 -24%
109,943 157,641 -30% Other 12,976 6,214 109% 29,548 13,104 125%
----------------------------- --------------------------- 262,067
222,187 18% 718,056 710,303 1% -----------------------------
--------------------------- EXPENSES Compensation & related
expenses 175,504 141,343 24% 484,068 482,052 0% Clearing &
exchange fees 7,031 7,033 0% 19,504 23,275 -16% Communications
& technology 14,008 20,452 -32% 48,289 55,911 -14% Occupancy
& equipment costs 18,987 17,713 7% 55,503 52,267 6% Interest
4,846 10,392 -53% 15,432 34,062 -55% Other 27,641 28,965 -5% 71,056
91,051 -22% -----------------------------
--------------------------- 248,017 225,898 10% 693,852 738,618 -6%
----------------------------- --------------------------- Profit
(loss) before taxes 14,050 (3,711) n/a 24,204 (28,315) n/a Income
tax provision (benefit) 6,142 (1,234) n/a 11,180 (11,369) n/a
----------------------------- ---------------------------
----------------------------- --------------------------- Net
profit (loss) for the period $7,908 ($2,477) n/a $13,024 ($16,946)
n/a ----------------------------- ---------------------------
----------------------------- --------------------------- Profit
(loss) per share Basic $0.60 ($0.18) n/a $1.00 ($1.26) n/a Diluted
$0.59 ($0.18) n/a $0.97 ($1.26) n/a Weighted avg. shares
outstanding 13,110,471 13,476,365 Actual shares outstanding
13,155,983 13,172,669
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Company Information Oppenheimer, through its principal
subsidiaries, Oppenheimer & Co. Inc. (a U.S. broker-dealer) and
Oppenheimer Asset Management Inc., offers a wide range of
investment banking, securities, investment management and wealth
management services from over 94 offices in 26 states and through
local broker-dealers in 4 foreign jurisdictions. Oppenheimer
employs over 3,500 people. The Company offers trust and estate
services through Oppenheimer Trust Company. OPY Credit Corp. offers
syndication as well as trading of issued corporate loans. Evanston
Financial Corporation is engaged in mortgage brokerage and
servicing. In addition, through Freedom Investments, Inc. and the
BUYandHOLD division of Freedom, Oppenheimer offers online discount
brokerage and dollar-based investing services. Forward-Looking
Statements This press release includes certain "forward-looking
statements" relating to anticipated future performance. For a
discussion of the factors that could cause future performance to be
different than anticipated, reference is made to Oppenheimer's
Annual Report on Form 10-K for the year ended December 31, 2008.
DATASOURCE: Oppenheimer Holdings Inc. CONTACT: A.G. Lowenthal,
(212) 668-8000; or E.K. Roberts, (416) 322-1515
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