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FBR Reports First Quarter Financial Results

ARLINGTON, Va., Apr 24, 2012 (GlobeNewswire via COMTEX) --FBR & Co. (Nasdaq:FBRC) ("FBR" or the "Company"), a leading investment bank serving the middle market, today reported net after-tax earnings of $0.4 million, or $0.01 per share, for the first quarter 2012 compared to a net after-tax loss of $1.9 million, or $0.03 per share, in the first quarter 2011. These results compare to a net after-tax loss of $18.9 million, or $0.33 per share, for the quarter ended December 31, 2011.

First quarter 2012 revenue was $39.1 million compared to $50.1 million in the first quarter 2011 and $27.7 million for the fourth quarter 2011.

First quarter 2012 total expenses were $38.6 million, compared to $52.1 million in the first quarter 2011 and $46.9 million in the fourth quarter 2011. Non-compensation fixed expenses in the first quarter 2012 totaled $12.4 million, compared to $15.2 million in the first quarter 2011 and $14.3 million in the fourth quarter 2011.

First Quarter Overview

  --  Investment banking revenue was $16.2 million compared to $16.6 million
      in the first quarter 2011 and $6.5 million in the fourth quarter 2011.
      The Company was bookrunner on two IPOs and one private placement during
      the quarter.
  --  Institutional brokerage generated net revenue of $16.1 million compared
      to $23.1 million in the first quarter 2011 and $14.9 million in the
      fourth quarter 2011. Results in brokerage were impacted by continued
      industry-wide pressure on equity commissions.
  --  Mutual fund assets under management as of March 31, 2012 rose to $1.9
      billion compared to $1.7 billion as of March 31, 2011 and $1.7 billion
      at the end of 2011. Asset management revenue was $4.0 million in the
      first quarter 2012, compared to $4.0 million in the first quarter 2011
      and $3.5 million in the fourth quarter 2011.
  --  The Company ended the first quarter with 281 employees, down from 465 at
      the end of the first quarter 2011 and 295 at the beginning of 2012.


The Company periodically repurchased shares of its common stock during the quarter. For the quarter ended March 31, 2012, the Company repurchased 500,000 shares at an average price of $2.55 per share. The Company continues to have authority to repurchase 2.6 million shares.

During the first quarter, shareholders' equity was relatively unchanged since year end 2011 and as of March 31, 2012, it totaled $225.3 million. As of March 31, 2012, the Company held $168.5 million in cash and its book value per share was $4.01.

"An improved capital markets environment in the first quarter allowed us to complete several important transactions from our backlog," said Richard J. Hendrix, President and Chief Executive Officer of FBR. "This activity, combined with significantly lower expenses as a result of our recent restructuring, enabled us to deliver meaningfully improved results relative to a very difficult second half of 2011."

Investors wishing to listen to the earnings call at 9:00 A.M. U.S. EDT, Wednesday, April 25, 2012, may do so via the Web or conference call at:

Webcast link:

http://investor.shareholder.com/media/eventdetail.cfm?eventid=106511&CompanyID=FBCM&e=1&mediaKey=A638ADF35B185A230531194DBE6AEB85

Conference call dial-in number (domestic, toll-free): 877.303.6433

Conference call dial-in number (international): 224.357.2198

Conference call code: 33390461

Replays of the earnings call will be available via webcast following the call.

FBR & Co. (Nasdaq:FBRC) provides investment banking, merger and acquisition advisory, institutional brokerage, and research services through its subsidiary FBR Capital Markets & Co. FBR focuses capital and financial expertise on the following industry sectors: consumer; diversified industrials; energy & natural resources; financial institutions; insurance; real estate; and technology, media & telecom. FBR Fund Advisers, Inc., a subsidiary of FBR & Co., provides clients with a range of investment choices through The FBR Funds, a family of mutual funds. FBR is headquartered in the Washington, D.C. metropolitan area with offices throughout the United States. For more information, please visit www.fbr.com.

The FBR & Co. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6405

Statements in this release concerning future performance, developments, events, market forecasts, revenues, expenses, earnings, run rates and any other guidance on present or future periods constitute forward-looking statements. These forward-looking statements are subject to a number of factors, risks and uncertainties that might cause actual results to differ materially from stated expectations or current circumstances. These factors include, but are not limited to, the effect of demand for public and private securities offerings, activity in the secondary securities markets, interest rates, the realization of gains and losses on principal investments, available technologies, competition for business and personnel, and general economic, political and market conditions. For a discussion of these and other risks and important factors that could affect FBR's future results and financial condition, see "Risk Factors" in Part I, Item 1A and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011; and other items throughout the Company's Form 10-K, and Current Reports on Form 8-K.

Financial data follow.


  FBR & CO.
  CONSOLIDATED STATEMENTS OF
   OPERATIONS
  (Dollars in thousands,
   except per share amounts)
  (Unaudited)

                                        Quarter ended

                                          March 31,
                                   ------------------------


                                      2012          2011
                                   ---------     ----------
  REVENUES:
  Investment banking:
    Capital raising                 $ 14,174       $ 15,110
    Advisory                           2,006          1,460
  Institutional brokerage:
    Principal transactions             6,502          5,836
    Agency commissions                 9,550         17,255
  Asset management fees                4,023          3,981
  Net investment income                2,009          5,599

  Interest, dividends & other            814            857
                                   ---------     ----------
    Total revenues                    39,078         50,098

  EXPENSES:
  Compensation and benefits           19,529         29,001
  Professional services                2,983          3,955
  Business development                 2,877          3,646
  Clearing and brokerage fees          2,384          2,674
  Occupancy and equipment              4,310          5,105
  Communications                       3,668          4,351

  Other operating expenses             2,866          3,336
                                   ---------     ----------

    Total expenses                    38,617         52,068
                                   ---------     ----------

  Income (loss) before income
   taxes                                 461        (1,970)

  Income tax provision
   (benefit)                              23           (65)
                                   ---------     ----------


    Net income (loss)                  $ 438      $ (1,905)
                                   =========     ==========

  Basic earnings (loss) per
   share                              $ 0.01       $ (0.03)
                                   =========     ==========
  Diluted earnings (loss) per
   share                              $ 0.01       $ (0.03)
                                   =========     ==========

  Weighted average shares -
   basic                              56,380         63,510
                                   =========     ==========
  Weighted average shares -
   diluted                            57,479         63,510
                                   =========     ==========




  FBR & CO.
  CONSOLIDATED BALANCE SHEETS
  (Dollars in thousands, except per share amounts)
  (Unaudited)

                                                    December
                                    March 31,          31,

  ASSETS                              2012            2011
                                   -----------     -----------

  Cash and cash equivalents          $ 168,511       $ 135,792
  Receivables:
    Due from brokers, dealers and
     clearing organizations              9,481           6,048
    Customers                            5,631           3,937
    Other                                3,200           6,854
  Financial instruments owned, at
   fair value                           90,417         100,634
  Other investments, at cost            25,621          25,744
  Intangible assets, net                 2,005           2,121
  Furniture, equipment and
   leasehold improvements, net           5,583           6,162
  Prepaid expenses and other
   assets                                7,439          10,791
                                   -----------     -----------

       Total assets                  $ 317,888       $ 298,083
                                   ===========     ===========


  LIABILITIES AND SHAREHOLDERS' EQUITY

  Liabilities:
  Securities sold but not yet
   purchased, at fair value           $ 43,371        $ 35,496
  Accrued compensation and
   benefits                             10,054          15,760
  Accounts payable, accrued
   expenses and other liabilities       16,908          15,280
  Due to brokers, dealers and
   clearing organizations               22,282           6,250
                                   -----------     -----------

       Total liabilities                92,615          72,786
                                   -----------     -----------



  Shareholders' equity:
  Common stock                              55              55
  Additional paid-in capital           417,442         412,551
  Restricted stock units                23,661          29,013
  Accumulated other comprehensive
   income                                   18              19

  Accumulated deficit                (215,903)       (216,341)
                                   -----------     -----------

       Total shareholders' equity      225,273         225,297
                                   -----------     -----------

       Total liabilities and
        shareholders' equity         $ 317,888       $ 298,083
                                   ===========     ===========


  Book Value per Share                   $4.01           $3.99

  Shares Outstanding (in
   thousands)                           56,167          56,490





  FBR & CO.
  Financial & Statistical Supplement - Operating Results
  (Dollars in thousands)
  (Unaudited)



                                 Q-1 12          Q-4 11          Q-3 11         Q-2 11         Q-1 11
                               ----------     -----------     -----------     ----------     ----------
  Revenues                       $ 39,078        $ 27,737        $ 20,134       $ 49,182       $ 50,098

  Expenses:
    Variable                        9,946           6,262          10,272         14,974         15,860
    Fixed                          28,671          34,801          35,625         37,146         36,208

    Impairment of goodwill             --           5,882              --             --             --
                               ----------     -----------     -----------     ----------     ----------

  Income (loss) before income
   taxes                              461        (19,208)        (25,763)        (2,938)        (1,970)

  Income tax provision
   (benefit)                           23           (327)             373          (211)           (65)
                               ----------     -----------     -----------     ----------     ----------


  Net income (loss)                 $ 438      $ (18,881)      $ (26,136)      $ (2,727)      $ (1,905)
                               ==========     ===========     ===========     ==========     ==========


  Fixed expenses                 $ 28,671        $ 34,801        $ 35,625       $ 37,146       $ 36,208
  Less: Non-cash expenses1          1,980           1,523           1,927          2,459          2,352
       Corporate transaction
        costs2                        429             567              --            986             --

       Severance                       38           3,496             442             --            806
                               ----------     -----------     -----------     ----------     ----------


  Core fixed costs3              $ 26,224        $ 29,215        $ 33,256       $ 33,701       $ 33,050
                               ==========     ===========     ===========     ==========     ==========



  Statistical Data
  Revenues per employee
   (annualized)                     $ 556           $ 376           $ 189          $ 444          $ 431
                               ==========     ===========     ===========     ==========     ==========


  Employee count                      281             295             426            443            465
                               ==========     ===========     ===========     ==========     ==========

  Net assets under management
   (in millions)
  Mutual funds                  $ 1,937.3       $ 1,684.8       $ 1,358.9      $ 1,635.3      $ 1,689.4


  1 Non-cash expenses include compensation costs associated with stock-based awards and
   amortization of intangible assets.

  2 Corporate transaction costs include costs related to reductions in
   physical space and restructuring costs.

  3 Core fixed costs is a non-GAAP measurement used by management to analyze and assess
   the Company's fixed operating costs. Management believes that this non-GAAP
   measurement assists investors in understanding the impact of the items noted in
   footnotes 1 and 2 and severance costs on the performance of the Company.

  A limitation of utilizing this non-GAAP measure is that the GAAP accounting effects of
   these items do in fact reflect the underlying financial results of the Company and
   these effects should not be ignored in evaluating and analyzing the Company's
   financial results. Therefore, management believes fixed expenses on a GAAP basis and
   core fixed costs on a non-GAAP basis should be considered together.


This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: FBR & Co.

(Logo: http://media.primezone.com/cache/8973/int/7132.jpg)

CONTACT: Media: Shannon Small at 703.469.1190
or ssmall@fbr.com
Investors:  Bradley J. Wright at 703.469.1080
or fbrcir@fbr.com
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