Lynnfield, Mass. (February 15, 2011) — Investors Capital
Holdings, Ltd. (NYSE Amex: ICH, “the Company”), a financial services holding company,
posted third quarter net income of $0.35 million on total revenue of $21.43 million
for the period ended December 31, 2010 (“the quarter”) compared to net income of
$0.43 million on total revenue of $21.05 million for the quarter ended December
31, 2009 (“prior period”). The Company operates primarily through its wholly-owned
subsidiary, Investors Capital Corporation (“ICC”), a dually registered broker-dealer
and investment advisory firm.
Total revenue for the quarter grew by $0.38 million, or 1.8%, compared to the prior
period. The increase is due primarily to a rise in commissionable revenues as markets
continue to rebound from the recent recession. Commission revenue, which accounts
for 81.5% of total revenue, increased 1.7% to $17.47 million. Advisory fees, which
account for 15.2% of total revenue, grew 3.4% to $3.27 million. The rise in advisory
revenue reflects growth in market asset values, as well as new investment contributions.
"Our focus continues to be on quality advisors, assets, and profits,” said Timothy
B. Murphy, the Company’s President and CEO. “Our net capital position remains strong;
the markets and economy are improving; trading volume is increasing. We know where
we want to go and how we want to get there. All we have to do is execute."
At quarter end, the firm’s net capital position strengthened to $2.99 million (an
excess of $2.51 million) with a net capital ratio of 2.38:1. The SEC Uniform Net
Capital Rule (Rule 15c3-1) requires that Investors Capital maintain net capital
of $100,000 and a ratio of specified aggregate indebtedness to net capital (a “net
capital ratio”) not to exceed 15 to 1.
Investors Capital continues to benefit from improving the overall quality of its
representatives, a key component of the Company’s strategy for achieving growth
in revenues and net income. The firm seeks to continually improve the quality of
its representatives by helping them expand their skills and practices, recruiting
established, high-quality representatives, and terminating low-quality advisors.
The firm’s average revenue per representative, based on a rolling 12-month period,
rose again in the third quarter to $145,153, an increase of 12.5% over $129,006
for the prior rolling 12-month period.
To use a baseball analogy, we’re not trying to swing for the fences,” said Murphy.
“Single, single, double is how smart teams produce runs in baseball and profits
in business. We are focusing on organic growth, retention, and recruitment of quality
advisors to achieve our growth targets for revenues, assets, and profits.
Adjusted EBITDA was $0.47 million for the quarter compared to $0.86 million for
the prior period. Adjusted EBITDA, a non-GAAP financial measure described below,
is a key metric utilized by the firm in evaluating its financial performance.
Continue reading (ICH Balance Sheets, Adjusted EBITDA)
Certain statements contained in this press release that are not historical fact may
be deemed to be forward-looking statements under federal securities laws. There
are many factors that could cause our future actual results to differ materially
from those suggested by or forecast in the forward-looking statements. Such factors
include, but are not limited to, general economic conditions, interest rate fluctuations,
regulatory changes affecting the financial services industry, competitive factors
effecting demand for our services, availability of funding, and other risks including
those identified in the Company’s Securities and Exchange Commission filings.
Back to top