NYSE - OPY NEW YORK, July 30 /PRNewswire-FirstCall/ -- Expressed in
thousands of dollars, except share and Three Months ended Six
Months ended per share amounts June 30, June 30,
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(unaudited) 2009 2008 2009 2008 Revenue $250,724 $256,241 $455,989
$488,116 Expenses $237,748 $254,056 $445,835 $512,719 Profit (loss)
before taxes $12,976 $2,185 $10,154 $(24,603) Net profit (loss)
$7,130 $1,646 $5,116 $(14,468) Basic earnings (loss) per share
$0.55 $0.12 $0.39 $(1.07) Diluted earnings (loss) per share $0.54
$0.12 $0.38 $(1.07) Weighted average number of shares outstanding
13,069,014 13,508,262 13,070,547 13,567,150 Book value per share
$33.12 $32.94 Actual number of Class A non-voting and Class B
voting common shares outstanding 13,070,747 13,340,094 Results
Oppenheimer Holdings Inc. reported net profit of $7.1 million or
$0.55 per share for the second quarter of 2009, compared to $1.6
million or $0.12 per share in the second quarter of 2008. Revenue
for the second quarter of 2009 was $250.7 million, compared to
revenue of $256.2 million in the second quarter of 2008, a decline
of 2%. The net profit for the six months ended June 30, 2009 was
$5.1 million or $0.39 per share compared to a net loss of $14.5
million or $1.07 per share in the first half of 2008. Revenue for
the six months ended June 30, 2009 was $456.0 million compared to
$488.1 million for the same period in 2008, a decline of about 7%.
Lower revenue reflected lower income from investment banking fees
as mid-sized companies continued to be restricted from access to
the capital markets, lower fee based revenue from investment
advisory services due to declines in the value of assets under
management in line with market declines and lower interest revenue
partially offset by an increase in commissions and principal
trading revenue. However, the Company's pre-tax results were
positively impacted by the reduction in, or elimination of, many
costs associated with its January 2008 acquisition of a major part
of CIBC World Markets' U.S. Capital Markets Businesses. The
Company's expenses for the three and six months ended June 30, 2009
decreased by approximately $16 million (6%) and $67 million (13%),
respectively, compared to the same periods in 2008. Cost savings
achieved during the three and six months ended June 30, 2009 were
largely driven by a reduction in expenses related to deferred
compensation obligations to acquired employees which decreased by
$11.5 million and $23.2 million, respectively, compared to the same
periods in 2008. The decrease in deferred compensation obligations
for the three month period ended June 30, 2009 included a reduction
of compensation expenses of $2.6 million related to changes in the
assumptions used to determine the Company's ultimate obligation
under these arrangements. The deferred compensation-related cost
savings were offset by increases in variable compensation related
to increased revenue produced in the second quarter of 2009.
Overall compensation and related expenses were flat for the three
months ended June 30, 2009 and decreased by 9% in the six months
ended June 30, 2009 compared to the same periods in 2008. Expenses
were also reduced for the three and six months ended June 30, 2009
as a result of the migration of the acquired business to the
Company's internal systems in the second half of 2008. The cost of
transitional support charges for the three and six months ended
June 30, 2008 was $9.8 million and $20.6 million, respectively.
This migration resulted in related increases in communication and
technology costs of $4.0 million and $1.2 million, respectively, in
the three and six months ended June 30, 2009 compared to the same
periods in 2008. Interest expense decreased by 56% and 55%,
respectively, in the three and six months ended June 30, 2009 as a
result of: 1) lower interest rates in 2009, 2) decreased securities
lending activity, and 3) a lower outstanding balance on the
Company's Senior Secured Credit Note compared to the same periods
in 2008. During the second quarter of 2009, the Company sustained a
one-time charge of approximately $2.0 million in the form of a
departure tax payable to the government of Canada in connection
with the move of the domicile of the corporation from Canada to the
U.S. as well as approximately $1.3 million in professional fees
related to this matter totaling $3.3 million on a pre-tax basis
($0.21 per share on an after tax basis). This Canadian departure
tax is not deductible for tax purposes which, as a result,
negatively impacted the effective tax rate for the three and six
month periods ended June 30, 2009. Albert Lowenthal, Chairman and
CEO, commented on the results for the quarter: "While market
conditions remain challenging, we are gratified at our return to
profitability and by the contribution by our many new employees.
During the first six months Oppenheimer had the greatest period of
internal growth in its sales force in its history with the addition
of over 200 financial advisors. We believe that these individuals
along with the growth in our capabilities in fixed income capital
markets and other areas will support significant growth in revenue
as market conditions continue to improve." The U.S economy may be
starting to emerge from the most severe recession in the last 50
years, although unemployment numbers continue to grow. Historic
levels of government spending and actions taken to stabilize the
financial sector appear likely to result in increased economic
activity over the next several quarters and also to begin to limit
further erosion in the valuation of housing and other real estate.
Improvements in consumer confidence should continue over the
balance of the year and that should begin to moderate market
volatility and lead to further improvement in market conditions.
Revenue from commissions and principal trading increased in the
three and six months ended June 30, 2009 compared to the same
periods in 2008 as a result of the addition of experienced
financial advisors and traders as well as improved investor
confidence during the second quarter of 2009. Commissions increased
13% and 3%, respectively, in the three and six months ended June
30, 2009 compared to the same periods in 2008. Principal
transactions increased 57% and 89%, respectively, in the three and
six months ended June 30, 2009 compared to the same periods in
2008. These gains resulted from the contribution of new and
existing institutional fixed income sales and trading professionals
amid higher activity levels from institutional investors as credit
conditions continued to improve. Advisory fees declined 31% and
33%, respectively, and interest income declined 49% and 54%,
respectively, in the three and six months ended June 30, 2009
compared to the same periods in 2008. The decline in advisory fee
revenues resulted from the reduced level of assets under management
at the beginning of the second quarter ($11.5 billion at March 31,
2009) which reflects overall market declines since the second half
of 2008. Assets under fee based programs increased during the three
months ended June 30, 2009 to $13.6 billion, an increase of 17%
($16.4 billion at June 30, 2008). Clients continued to pay down
debt resulting in lower average customer debit balances which were
down by 41% and 40%, respectively, in the three and six months
ended June 30, 2009 compared to the same periods in 2008. Lower
interest bearing balances coupled with a decline in interest rates
resulted in lower margin interest revenues of $6.0 million and
$13.6 million, respectively, in the three and six months ended June
30, 2009 over last year's comparable periods. Lower interest rates
also resulted in lower fees from money market funds and FDIC
insured deposits which were down $4.2 million (a decline of 37%)
and $7.3 million (a decline of 32%), respectively, during the three
and six months ended June 30, 2009 compared to the same periods in
2008. Investment banking activities remained disappointing as a
result of limited availability of credit to mid-sized companies and
the lack of equity issuances by similar companies throughout the
period. Merger and acquisition activity also remained at low levels
due to the inability of buyers to issue acquisition related debt
and concerns over the health of the economy and corporate balance
sheets. Municipal public finance activity also was significantly
affected by credit and budgetary concerns for municipalities
resulting in lower activity in this sector. Overall revenues from
investment banking declined by 40% and 42%, respectively, for the
three and six months ended June 30, 2009 compared to the same
periods in 2008. At June 30, 2009, shareholders' equity was
approximately $432.9 million and book value per share was $33.12
compared to shareholders' equity of approximately $439.4 million
and book value per share of $32.94 at June 30, 2008. The basic
weighted average number of Class A and Class B Common Shares
outstanding for the three months ended June 30, 2009 was 13,069,014
compared to 13,508,262 outstanding for the three months ended June
30, 2008, a decrease of 3% primarily due to the cancellation of
Class A Shares purchased pursuant to the Issuer Bid in the second
half of 2008. The diluted weighted average number of Class A and
Class B Common Shares outstanding for the three months ended June
30, 2009 was 13,283,500 compared to 13,649,203 outstanding for the
three months ended June 30, 2008, a net decrease of 3%. The actual
number of Class A and Class B Common Shares outstanding at June 30,
2009 was 13,070,747 shares. Issuer Bid During the second quarter of
2009, the Company did not make any purchases pursuant to its Normal
Course Issuer Bid. On May 27, 2009, the Company announced its
intention to purchase up to 600,000 of its Class A non-voting
common shares commencing June 2, 2009 and ending December 31, 2009.
The Company will undertake repurchases only if market conditions
warrant such repurchases. Domestication On May 8, 2009, the
Company's shareholders approved changing the jurisdiction of
incorporation of the Company from Canada to the State of Delaware.
As a result of its move to the United States, the Company has
engaged Mellon Investor Services LLC to act as its transfer agent
and registrar. The Company also announced that it is not necessary
for shareholders holding paper share certificates to obtain new
share certificates. Non-U.S. resident shareholders are advised to
promptly respond to Mellon Investor Services LLC's solicitation for
the completion of U.S. Form W-8 BEN, which is required of non-U.S.
resident shareholders to prevent the imposition of U.S. withholding
tax on dividends. Dividend The Company announced today a quarterly
dividend in the amount of U.S. $0.11 per share, payable on August
28, 2009 to holders of Class A non-voting and Class B voting common
shares of record on August 14, 2009. 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. 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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