Business & Finance
Business and Finance
Business and Finance 
Tue, November 17, 2009
Mon, November 16, 2009
National Investment Managers Inc. Reports Third Quarter Earnings
DUBLIN, OH--(Marketwire - November 16, 2009) - National Investment Managers Inc. (
Financial highlights for the first nine months of 2009 include:
-- Revenues of $37.7 million compared with revenues of $31.9 million in 2008, an increase of 18.4%. -- EBITDA SBC was approximately $8.7 million, up from $7.7 million in the first nine months of 2008, an increase of 12.6%. -- Net Operating Income of $2.7 million compared with approximately $1.9 million for the same period in 2008, an increase of 39.3%. -- Continued positive cash flow from operations in the third quarter of approximately $1.1 million, bringing cash flow from operations year-to-date to approximately $4.5 million.
Revenues for the three months ended September 30, 2009, were $11.0 million compared to approximately $11.2 million for the same period in 2008. The Company's earnings before interest, taxes, depreciation, amortization, change in derivative financial instruments and stock-based compensation (EBITDA SBC) was $2.0 million for the third quarter 2009, compared with approximately $2.8 million from the same period in 2008.
Net loss for the quarter ended September 30, 2009, was approximately $1.1 million with preferred dividends of approximately $494,000, resulting in a net loss available to common shareholders of approximately $1.6 million, or $0.04 per fully diluted share. For the same period in 2008, net income was approximately $2.0 million, with approximately $494,000 in preferred dividends, resulting in net income available to common shareholders of approximately $1.5 million, or $0.03 per fully diluted share. The weighted average number of common shares outstanding stood at roughly 39.6 million basic and diluted at September 30, 2009 and 37.2 million basic and 73.6 million diluted at September 30, 2008.
Steven Ross, CEO of National Investment Managers, said, "Our performance in the third quarter continued our progress toward significant year over year improvements in revenue and earnings. Despite a difficult economic climate, with our third quarter performance we have already exceeded our 2008 results. Although our third quarter earnings were negatively impacted relative to the same period in 2008 by the timing effect of some plan administration revenue moving from the third to fourth quarter of 2009, we expect our fourth quarter 2009 results to be much stronger than fourth quarter 2008."
He continued, "Our net income in the third quarter was largely affected by a change in the fair value of derivative financial instruments, which accounted for a $2.0 million decrease in year over year third quarter results. The impact on earnings per share of non-cash and non-operating charges is why we believe that EBITDA SBC is the best measure of our overall progress. Focusing on earnings before interest, taxes, dividends, depreciation, amortization, change in derivative financial instruments and stock-based compensation (i.e., EBITDA SBC) is important because purchase accounting rules also require us to book a significant portion of acquisition costs to amortizing Balance Sheet accounts. Our associated non-cash expenses actually increased as we added profitable and cash flow positive field operations through acquisitions in 2008. The resulting impact on net income, along with market-based derivative calculations, produces non-cash losses such as those reported in the third quarter that are not indicative of operating performance."
John Davis, President and Chief Operating Officer, added, "I am encouraged by the progress we continue to see in our field operations. In this environment especially, clients value the unmatched experience and expertise resident in our businesses. Although taking the extra time to advise and assist our clients' retirement planning in this economy presented us with some revenue timing challenges in the third quarter, by doing so we reinforced our role as trusted advisors to our approximately 11,000 plan sponsors and their associates."
He concluded, "We continue to stay on track with our strategic and operational plans toward the development and implementation of our national technology platform and administrative business model across the country. We have significant momentum across the organization and I believe we are rapidly establishing NIVM as a premier retirement services company on a national level and I look forward to continued growth."
About National Investment Managers Inc.
National Investment Managers Inc. is a holding company and a consolidator of pension plan administration, investment management and insurance businesses. Its strategy includes a custom-tailored acquisition formula for each acquired business, which allows local and regional entities to retain their autonomy while benefiting from the reach that a national presence offers. In addition, the Company's approach offers entrepreneurs in these businesses an exit strategy suited to their specific needs. National Investment Managers targets businesses with stable cash flows and high operating margins to ensure successful integration of operations once a sale is concluded. Acquired companies continue to operate under their own brands, usually with minimal staff turnover to ensure that relationships of many years' standing are not disrupted. At the same time, these formerly small businesses can cross-sell related financial services under the National Investment Managers umbrella and enjoy administrative and other support from around the country.
The member firms of National Investment Managers provide pension administration services, retirement planning, defined benefit services, asset preservation, general insurance and asset management services. Wholly-owned subsidiaries of National Investment Managers are based in Anchorage, AK; Laguna Hills, CA; Marina Del Rey, CA; Denver, CO; Southington, CT; Lake Mary, FL; Pikesville, MD; North Attleboro, MA; Haddonfield, NJ; New York City, NY; Yorktown Heights, NY; Beaverton, OR; Harrisburg, PA; Horsham, PA; Wayne, PA; Warwick, RI; Houston, TX; and Seattle, WA. NIVM's corporate headquarters are located in Dublin, OH.
Note: This press release contains statements that are considered forward-looking under the Private Securities Litigation Reform Act of 1995, including statements about the Company's future prospects. They are based on the Company's current expectations and are subject to a number of uncertainties and risks, and actual results may differ materially. The uncertainties and risks include whether the Company is able to raise capital, identify and complete acquisitions, integrate the acquired businesses, improve upon the operations of the acquired business units and generate cash and profits. Further information about these and other relevant risks and uncertainties may be found in the Company's filings with the Securities and Exchange Commission.
National Investment Managers Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) (Audited) September 30, December 31, 2009 2008 ------------ ------------ ASSETS Current assets: Cash (includes restricted cash of $189,396 and $411,299) $ 393,860 $ 531,446 Accounts receivable, net 5,897,100 4,886,329 Prepaid expenses and other current assets 912,487 1,262,981 ------------ ------------ Total current assets 7,203,447 6,680,756 ------------ ------------ Property and equipment, net 1,480,335 1,036,497 ------------ ------------ Other assets: Goodwill 28,735,819 28,474,114 Customer lists/relationships, net 24,816,799 27,118,405 Other intangibles, net 4,934,174 7,732,504 Deferred financing costs 777,678 979,455 ------------ ------------ Total other assets 59,264,470 64,304,478 ------------ ------------ Total assets $ 67,948,252 $ 72,021,731 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Revolving line of credit $ 2,296,000 $ 327,992 Long-term debt, current portion 25,433,066 5,560,800 Accounts payable 1,931,544 918,748 Unearned revenue 3,687,548 5,464,992 Accrued expenses and other current liabilities 3,268,482 5,603,997 ------------ ------------ Total current liabilities 36,616,640 17,876,529 ------------ ------------ Long-term liabilities: Long-term debt, less current portion 1,321,091 23,710,830 Preferred dividends payable 7,355,520 5,872,320 Derivative financial instruments 2,303,277 2,510,864 Deferred tax liability 6,038,122 7,708,914 ------------ ------------ Total long-term liabilities 17,018,010 39,802,928 ------------ ------------ Total liabilities 53,634,650 57,679,457 ------------ ------------ Commitments and contingencies Stockholders' equity: Preferred stock, $.001 par value, 10,000,000 shares authorized; 4,000,000 designated as Series A shares - 2,420,000 shares issued and outstanding as of September 30, 2009 and December 31, 2008 (liquidation preference $2,420,000 as of September 30, 2009 and December 31, 2008); 4,000,000 designated as Series B shares - 3,615,000 shares issued and outstanding as of September 30, 2009 and December 31, 2008 (liquidation preference $7,230,000 as of September 30, 2009 and December 31, 2008); 1,000,000 designated as Series C shares - 770,834 shares issued and outstanding as of September 30, 2009 and December 31, 2008 (liquidation preference $9,250,008 as of September 30, 2009 and December 31, 2008); 500,000 designated as Series D shares - 409,500 shares issued and outstanding as of September 30, 2009 and December 31, 2008 (liquidation preference $8,190,000 as of September 30, 2009 and December 31, 2008); and 60,000 designated as Series E shares - 29,350 shares issued and outstanding as of September 30, 2009 and December 31, 2008 (liquidation preference $5,870,000 as of September 30, 2009 and December 31, 2008) 7,245 7,245 Common stock, $.001 par value, 100,000,000 shares authorized, 39,556,669 shares issued and outstanding as of September 30, 2009 and December 31, 2008. 39,557 39,557 Additional paid-in capital 35,743,057 35,406,027 Accumulated deficit (21,476,257) (21,110,555) ------------ ------------ Total stockholders' equity 14,313,602 14,342,274 ------------ ------------ Total liabilities and stockholders' equity $ 67,948,252 $ 72,021,731 ============ ============ See accompanying notes to condensed consolidated interim financial statements. National Investment Managers Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) Nine Months Nine Months Ended Ended September 30, September 30, 2009 2008 ------------ ------------ Revenues: $ 37,729,784 $ 31,853,174 ------------ ------------ Operating expenses Selling, general and administrative expenses 29,080,526 24,186,372 Depreciation and amortization 5,605,675 4,818,729 Stock-based compensation 337,030 904,538 ------------ ------------ Total operating expenses 35,023,231 29,909,639 ------------ ------------ Net operating income (loss) 2,706,553 1,943,535 ------------ ------------ Other income (expenses): Change in fair value of derivative financial instruments 207,587 1,211,291 Interest expense (3,345,630) (2,909,806) Interest, dividend and rental income 21,162 34,915 ------------ ------------ Total other expense, net (3,116,881) (1,663,600) ------------ ------------ Net income (loss) before income tax benefit (expense) (410,328) 279,935 Income tax benefit (expense) 1,527,826 1,359,833 ------------ ------------ Net income (loss) before preferred stock dividends 1,117,498 1,639,768 Less: preferred stock dividends (1,483,200) (1,485,500) ------------ ------------ Net income (loss) available to common stockholders $ (365,702) $ 154,268 ============ ============ Net income (loss) per common share - basic $ (0.01) $ 0.00 ============ ============ Net income (loss) per common share - diluted $ (0.01) $ 0.00 ============ ============ Weighted average common shares outstanding - basic 39,557,000 36,760,000 ============ ============ Weighted average common shares outstanding - diluted 39,557,000 41,311,000 ============ ============ See accompanying notes to condensed consolidated interim financial statements. National Investment Managers Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) Three Months Three Months Ended Ended September 30, September 30, 2009 2008 ------------ ------------ Revenues: $ 11,009,341 $ 11,151,645 ------------ ------------ Operating Expenses Selling, general and administrative expenses 9,010,806 8,306,617 Depreciation and amortization 1,847,722 1,757,151 Stock-based compensation 122,351 97,474 ------------ ------------ Total operating expenses 10,980,879 10,161,242 ------------ ------------ Net operating income (loss) 28,462 990,403 ------------ ------------ Other income (expenses): Change in fair value of derivative financial instruments (515,297) 1,469,952 Interest expense (1,163,785) (1,016,732) Interest, dividend and rental income 5,361 3,852 ------------ ------------ Total other expense, net (1,673,721) 457,072 ------------ ------------ Net income (loss) before income tax benefit (expense) (1,645,259) 1,447,475 Income tax benefit (expense) 553,863 528,956 ------------ ------------ Net income (loss) before preferred stock dividends (1,091,396) 1,976,431 Less: preferred stock dividends (494,400) (494,400) ------------ ------------ Net income (loss) available to common stockholders $ (1,585,796) $ 1,482,031 ============ ============ Net income (loss) per common share - basic $ (0.04) $ 0.04 ============ ============ Net income (loss) per common share - diluted $ (0.04) $ 0.03 ============ ============ Weighted average common shares outstanding - basic 39,557,000 37,201,000 ============ ============ Weighted average common shares outstanding - diluted 39,557,000 73,554,000 ============ ============ See accompanying notes to condensed consolidated interim financial statements.