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MCF Corporation Announces Financial Results for the First Quarter Ended March 31, 2008
SAN FRANCISCO-(Business Wire)-May 6, 2008 - MCF Corporation (NASDAQ:MERR) today released earnings for the first quarter 2008.
First Quarter Financial Highlights -0- *T — Total revenue was $11.8 million, an 18 % decrease from the first quarter 2007 - Commissions revenue was $8.5 million, an 18% increase over first quarter 2007 - Investment banking revenue was $3.4 million, a 19% decrease over first quarter 2007 - Combined recurring revenue from Institutional Cash Distributors (ICD) and Panel Intelligence, LLC was $3.9 million, a 7% sequential increase over fourth quarter 2007 - Principal transactions were down $1.3 million, compared with first quarter 2007 revenue of $2.6 million. Proprietary trading losses were partially offset by gains in the firm's warrant and restricted stock portfolio — Total recurring revenue(1) was 30% of total revenue, compared to 10% in the first quarter 2007 — Net loss for the quarter was $7.0 million, or $0.57 per share, compared with a net income of $69,000 for the first quarter 2007, or $0.01 per share — Financial condition: - The remaining long-term debt was converted to common stock in April 2008 - Total assets were $42.5 million, compared with $27.8 million as of first quarter 2007 - Stockholders' equity was $29 million, compared with $17.1 million as of first quarter 2007 *T
(1) Total recurring revenue includes revenues from Panel Intelligence, LLC; MCF Asset Management, LLC; Institutional Cash Distributors (ICD); OTCQX Advisory Group; and Capital Access Group.
"The first quarter of 2008 was one of the toughest periods I've seen," said Jon Merriman, chief executive officer of MCF Corporation. "While we posted a loss this quarter, our balance sheet remains strong and has grown substantially over the past 12 months. I am pleased that Panel Intelligence is hitting its stride and ICD was very strong - both added significantly to our quarterly revenue for the first time. We lost money in principal transactions primarily due to unrealized losses in proprietary trading positions, even though we took significant chips off the table last year. An important bright spot for us was our growth in recurring revenues, which continue to be a crucial focus for us. As difficult as last quarter was, we remain well positioned to be opportunistic in this environment and make our platform more consistently profitable."
Conference Call for the First Quarter 2008 Results
In conjunction with this announcement, MCF Corporation will host a discussion of the Company's first quarter 2008 results with investors and financial analysts on Wednesday, May 7, 2008 at 8 AM (PT) / 11 AM (ET). Interested listeners and participants may access the live conference call by dialing (800) 218-0713 or may access the live Web broadcast at the Company's Web site, www.mcfco.com. An archived version of the discussion will be available on the Company's Web site following the conclusion of the live conference call.
About MCF Corporation
MCF Corporation (NASDAQ:MERR) is a financial services holding company that provides investment research, capital markets services, corporate and venture services, investment banking, asset management and primary research through its operating subsidiaries, Merriman Curhan Ford & Co., MCF Asset Management, LLC and Panel Intelligence, LLC. MCF is focused on providing a full range of specialized and integrated services to institutional investors and corporate clients.
Note to Investors
This press release contains certain forward-looking statements based on our current expectations, forecasts and assumptions that involve risks and uncertainties. Forward-looking statements in this release are based on information available to us as of the date hereof. Our actual results may differ materially from those stated or implied in such forward-looking statements, due to risks and uncertainties associated with our business, which include the risk factors disclosed in our Form 10-Q filed on May 6, 2008. Forward-looking statements include statements regarding our expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. We assume no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise. The Form 10-Q filed on May 6, 2008, together with this press release and the financial information contained herein, is available on our website by going to www.mcfco.com and clicking on "Investor Relations."
This release is for information purposes only and should not be regarded as an offer to sell or solicitation to buy the securities or other instruments of the companies mentioned. -0- *T MCF CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three Months Ended March 31, ———————————— 2008 2007 —————— —————- Revenue: Commissions $ 8,468,710 $ 7,165,707 Principal transactions (1,315,076) 2,613,124 Investment banking 3,376,411 4,232,471 Primary research 1,541,794 — Advisory and other (303,534) 311,842 ————— ————— Total revenue 11,768,305 14,323,144 Operating expenses: Compensation and benefits 13,170,642 10,810,287 Brokerage and clearing fees 775,301 632,641 Cost of primary research 585,164 — Professional services 827,485 381,478 Occupancy and equipment 537,182 442,528 Communications and technology 939,978 812,936 Depreciation and amortization 143,224 181,021 Amortization of intangible assets 116,535 — Travel and business development 959,594 469,202 Other 838,870 591,944 ————— ————— Total operating expenses 18,893,975 14,322,037 —————- ————— Operating income (loss) (7,125,670) 1,107 Interest income 96,404 122,493 Interest expense (20,707) (54,344) —————- ————— Net income (loss) $(7,049,973) $ 69,256 ==========- ========== Basic net income (loss) per share $ (0.57) $ 0.01 ========== ========== Diluted net income (loss) per share $ (0.57) $ 0.01 ========== ========== Weighted average common shares outstanding: Basic 12,289,582 10,336,328 Diluted 12,289,582 11,459,376 *T -0- *T MCF CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited) March 31, December 31, 2008 2007 —————— —————— ASSETS Cash and cash equivalents $ 10,365,973 $ 31,962,201 Securities owned: Marketable, at fair value 13,836,055 14,115,022 Not readily marketable, at estimated fair value 3,528,433 2,250,668 Other 1,711,014 2,254,120 Restricted cash 1,130,071 689,157 Due from clearing broker 1,113,234 1,251,446 Accounts receivable, net 1,931,673 4,008,729 Prepaid expenses and other assets 2,575,472 1,716,814 Equipment and fixtures, net 1,174,807 1,245,692 Intangible assets 1,833,280 1,949,815 Goodwill 3,338,016 3,129,667 —————- —————- Total assets $ 42,538,028 $ 64,573,331 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 1,557,812 $ 957,969 Commissions and bonus payable 4,442,029 17,517,032 Accrued expenses 4,948,246 6,351,598 Due to clearing and other brokers 18,345 6,865 Securities sold, not yet purchased 1,548,826 3,804,558 Capital lease obligation 756,044 890,272 Convertible notes payable, net 200,000 197,416 Notes payable 16,712 41,573 —————— —————— Total liabilities 13,488,014 29,767,283 —————— —————— Commitments and contingencies Stockholders' equity: Preferred stock, Series A—$0.0001 par value; 2,000,000 shares authorized; 0 shares issued and outstanding as of March 31, 2008 and December 31, 2007, respectively; aggregate liquidation preference of $0 — — Preferred stock, Series B—$0.0001 par value; 12,500,000 shares authorized; 1,250,000 shares issued and 0 shares outstanding as of March 31, 2008 and December 31, 2007; aggregate liquidation preference of $0 — — Preferred stock, Series C—$0.0001 par value; 14,200,000 shares authorized; 1,685,714 shares issued and 0 shares outstanding as of March 31, 2008 and December 31, 2007; aggregate liquidation preference of $0 — — Common stock—$0.0001 par value; 300,000,000 shares authorized; 12,597,334 and 12,310,886 shares issued and 12,570,906 and 12,284,448 shares outstanding as of March 31, 2008 and December 31, 2007, respectively 1,261 1,232 Additional paid-in capital 125,304,193 124,010,283 Treasury stock (125,613) (125,613) Accumulated deficit (96,129,827) (89,079,854) —————— —————— Total stockholders' equity 29,050,014 34,806,048 —————— —————— Total liabilities and stockholders' equity $ 42,538,028 $ 64,573,331 ===========- ============ *T
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