NYSE - OPY NEW YORK, Jan. 29 /PRNewswire-FirstCall/ -- Expressed in
thousands of dollars, except share and per share amounts Three
Months ended Year ended December 31, December 31,
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(unaudited) 2009 2008 2009 2008 Revenue $273,377 $209,767 $991,433
$920,070 Expenses $262,768 $217,496 $956,620 $956,113 Profit (loss)
before taxes $10,609 $(7,729) $34,813 $(36,043) Net profit (loss)
$6,463 $(3,824) $19,487 $(20,770) Basic earnings (loss) per share
$0.49 $(0.29) $1.49 $(1.57) Diluted earnings (loss) per share $0.48
$(0.29) $1.45 $(1.57) Book value per share $34.15 $32.75 Business
Review Oppenheimer Holdings Inc. reported a net profit of $6.5
million or $0.49 per share for the fourth quarter of 2009, compared
to a net loss of $3.8 million or $0.29 per share in the fourth
quarter of 2008. Revenue for the fourth quarter of 2009 was $273.4
million, compared to revenue of $209.8 million in the fourth
quarter of 2008, an increase of 30%. The net profit for the year
ended December 31, 2009 was $19.5 million or $1.49 per share
compared to a net loss of $20.8 million or $1.57 per share for the
year ended December 31, 2008. Revenue for the year ended December
31, 2009 was $991.4 million, compared to revenue of $920.1 million
for the same period in 2008, an increase of 8%. At year-end, the
U.S. economy has emerged from the longest contraction since the
Great Depression. Unemployment continues at very high levels and
uncertainty continues to plague the economy as we await the
reversal of stimulative policies from the Federal Reserve and a
determination of national policies for major segments of the
economy including healthcare and the financial system. Other
economic indicators are showing improvement including: increased
manufacturing activity, higher commodity prices and higher end
sales to consumers and businesses. The real estate markets are
sending mixed signals with significant deterioration in commercial
real estate prices but improvements in the housing market across
most of the country. Improving market conditions since March 2009,
buoyed by low interest rates and discretionary funds for
investment, have led to overall revenue improvements for the
Company in each successive quarter of 2009. Revenue from
commissions and principal transactions in the three and twelve
months ended December 31, 2009 surpassed levels achieved in
comparable periods in 2008 as a result of the effects of rising
equity prices and the credit markets recovery from distressed
levels. The strength in revenue from principal transactions was
largely due to the Company's significant progress in building its
fixed income division as well as strong debt markets throughout the
year. Revenue for the Company from investment banking activities
remains disappointing as many mid-sized and smaller companies
continue to face restricted access to the capital markets, although
there were significant signs of improvement in that sector in the
fourth quarter of 2009. Net interest revenue for the Company, as
well as fees derived from money market funds and FDIC insured
deposits of clients, continue to be significantly and adversely
affected by the low interest rate policies that have been designed
to stimulate the economy. Asset management advisory fees increased
in the fourth quarter of 2009 due to incentive fees earned on
certain managed funds compared to the prior year. While most
expense categories showed significant decreases compared to the
prior year, the Company's compensation levels as a percentage of
revenue remained at high levels as a result of: 1) increased
stock-based and deferred compensation which reflected the
significant improvement in the Company's stock price as well as
increases in the value of assets directly tied to deferred
compensation plans (totaling $33.7 million), 2) the remaining costs
of compensation associated with the CIBC Capital Markets
acquisition ($25.7 million), and 3) short term guaranteed
compensation to new employees (while down substantially from the
prior year) as the Company significantly expanded its professional
work force across all areas of its business during 2009. In
commenting on the Company's results, Albert Lowenthal, Chairman
remarked," Oppenheimer made considerable progress in 2009. We were
able to bring costs, excluding compensation, to normalized levels.
We are pleased with our ability to expand our business
opportunities including the addition of branch offices in the U.S.,
significant increases to our professional workforces
internationally and increased Capital Markets capabilities in fixed
income as a result of dislocations in this business. We look
forward to reaping the benefits of these strategic initiatives."
Highlights of the Company's results for the three and twelve months
ended December 31, 2009 follow: Revenue and Expenses Revenue
-Fourth Quarter 2009 ---------------------------- - Commission
revenue was $142.7 million in the fourth quarter of 2009 which was
flat compared to $141.3 million in the fourth quarter of 2008. -
Principal transactions revenue was significantly higher in the
fourth quarter of 2009 at $22.4 million compared to a loss of $7.6
million in the fourth quarter of 2008 due to profits in fixed
income trading of $20.7 million in the fourth quarter 2009 (versus
$3.7 million in the fourth quarter of 2008) and gains of $1.5
million in the value of firm investments in the fourth quarter of
2009 (versus a loss of $9.1 million in the fourth quarter of 2008).
- Interest revenue was $10.6 million in the fourth quarter of 2009
which was flat compared to $10.6 million in the fourth quarter of
2008. - Investment banking revenue increased 139% to $35.4 million
in the fourth quarter of 2009, compared to $14.8 million in the
fourth quarter of 2008 with equity issuances accounting for $17.8
million of the variance. - Advisory fees were $50.8 million in the
fourth quarter of 2009 compared to $41.3 million in the fourth
quarter of 2008, an increase of 23% as a result of an increase in
assets under management of 4.2% during the period and incentive
fees earned from general partnership interests in alternative
investments of $10.7 million ($nil in fourth quarter of 2008), net
of a decrease of $6.3 million in fees derived from money market
funds. - Other revenue increased 24% to $11.6 million in the fourth
quarter of 2009 compared to the fourth quarter of 2008 as a result
of a legal settlement award of $2 million. Revenue - Year-to-Date
2009 --------------------------- - Commission revenue was $555.6
million in the year ended December 31, 2009 compared to $532.7
million in the same period in 2008, representing an increase of 4%,
reflecting improved market conditions in 2009 compared to 2008. -
Principal transactions revenue was significantly higher in the year
ended December 31, 2009 at $107.1 million compared to $20.7 million
in the same period in 2008 due to significant improvement in fixed
income trading in 2009 representing a $61.8 million increase when
compared to 2008 as well as gains of $9.8 million in the value of
firm investments in 2009 (versus a loss of $17.8 million in 2008).
- Interest revenue declined 42% to $36.0 million in the year ended
December 31, 2009 from $61.8 million in the same period in 2008 due
to decreases in interest earned on customer margin debits of $19.1
million and on securities borrowed positions of $6.2 million. -
Investment banking revenue increased 9% to $91.0 million in the
year ended December 31, 2009 compared to $83.5 million in the same
period in 2008 as fees earned on equity underwriting participations
increased $23.0 million offset by a decrease of $11.4 million in
corporate finance advisory fees. - Advisory fees were $160.7
million in the in the year ended December 31, 2009, a decrease of
19% compared to $199.0 million in the same period in 2008 as a
result of a decrease in average assets under management during the
period of 10.7%. It also includes a decrease of $21.1 million in
fees derived from money market funds. The Company earned incentive
fees from general partnership interests in alternative investments
of $10.7 million in 2009 ($nil in 2008). - Other revenue increased
83% to $41.1 million for the year ended December 31, 2009 from
$22.4 million in the same period in 2008 primarily as a result of
increases to the value of Company owned life insurance of $14.3
million, increased fees of $5.0 million related to the Company's
mortgage brokerage business, and a legal settlement award of $2
million, partially offset by a decrease of $3.9 million in fees
derived from FDIC insured client deposits. Expenses - Fourth
Quarter 2009 ------------------------------ - Compensation and
related expenses increased 31% in the fourth quarter of 2009 to
$188.3 million from $144.0 million during the fourth quarter 2008
as production and incentive-related compensation increased $27.2
million, deferred compensation costs increased $6.0 million, and
share-based compensation, directly related to an increased share
price during the quarter, increased $6.6 million. - Clearing and
exchange fees decreased 6% to $7.2 million in the fourth quarter of
2009 compared to $7.7 million in the same period of 2008. -
Communications and technology expenses decreased 26% to $14.4
million in the fourth quarter of 2009 from $19.4 million in the
same period of 2008 as a result of a reduction, or elimination, of
many costs associated with the January 2008 acquisition of a major
part of CIBC World Markets' U.S. Capital Markets Business. -
Occupancy and equipment costs increased 7% to $18.9 million in the
fourth quarter of 2009 from $17.7 million in the fourth quarter of
2008 due to escalation provisions increasing rental costs, as well
as the opening of new branch offices around the country. - Interest
expenses increased 14% to $5.6 million in the fourth quarter of
2009 from $4.9 million in the same period in 2008 due to interest
expense incurred on positions and repurchase agreements held by the
new government trading desk. - Other expenses increased 19% to
$28.3 million in the fourth quarter of 2009 from $23.7 million in
the same period in 2008 due to increased legal costs of
approximately $4.8 million, offset by the elimination of $1.2
million in non-recurring transitional support costs related to the
CIBC capital markets business acquired in January 2008 Expenses -
Year-to-Date 2009 ---------------------------- - Compensation and
related expenses were $672.3 million for the year ended December
31, 2009 compared with $626 million for the same period in 2008, an
increase of 7%. Production and incentive-related compensation
increased $35.1 million, deferred compensation costs increased
$16.3 million, and share-based compensation, directly related to an
increased share price during the period, increased $17.4 million.
These increases were offset by a decrease of $25.7 million for
expenses related to deferred compensation obligations to former
CIBC employees. - Clearing and exchange fees decreased 14% to $26.7
million for the year ended December 31, 2009 compared to $31.0
million in the same period in 2008 primarily reflecting the
economies of transitioning the acquired businesses to the Company's
platform. - Communications and technology expenses decreased 17% to
$62.7 million for the year ended December 31, 2009 from $75.4
million for the same period of 2008 as a result of a reduction, or
elimination, of many costs associated with our January 2008
acquisition. - Occupancy and equipment costs increased 6% to $74.4
million for the year ended December 31, 2009 from $69.9 million in
the same period in 2008 due to escalation provisions increasing
rental costs, as well as the opening of new branch offices around
the country. - Interest expenses declined 46% to $21.1 million in
the year ended December 31, 2009 from $39.0 million for the same
period in 2008 due to declining interest rates resulting in lower
interest incurred on securities loaned and bank loans totaling
$13.5 million. - Other expenses decreased 13% to $99.4 million in
the year ended December 31, 2009 from $114.8 million for the same
period in 2008 largely as a result of the elimination of $33.5
million in non- recurring transitional support costs related to the
CIBC capital markets business acquired in January 2008 offset by an
increase in legal costs of approximately $14.7 million and a
departure tax of approximately $2.0 million which was paid to the
government of Canada in connection with the move of the Company's
domicile to the United States. Shareholders' Equity and Dividend
Declaration - At December 31, 2009, shareholders' equity was $451.4
million compared to $425.7 million at December 31, 2008. - At
December 31, 2009, book value per share was $34.15 compared to
$32.75 at December 31, 2008. - During the fourth quarter of 2009,
the Company did not make any purchases pursuant to its stock
buy-back program. - The Company announced today a quarterly
dividend in the amount of U.S. $0.11 per share, payable on February
26, 2010 to holders of Class A non-voting and Class B voting common
stock of record on February 12, 2010.
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OPPENHEIMER HOLDINGS INC. SUMMARY STATEMENT OF OPERATIONS
(UNAUDITED) $ in thousands, except share and per share amounts
----------------------------------------------------------- Three
Months Ended Year Ended % % 12/31/09 12/31/08 delta 12/31/09
12/31/08 delta
----------------------------------------------------------- REVENUE
Commissions $142,661 $141,338 1% $555,574 $532,682 4% Principal
transactions, net 22,374 (7,594) n/a 107,094 20,651 419% Interest
10,625 10,560 1% 35,960 61,793 -42% Investment banking 35,363
14,805 139% 90,960 83,541 9% Advisory fees 50,762 41,319 23%
160,705 198,960 -19% Other 11,592 9,339 24% 41,140 22,443 83%
----------------------------- --------------------------- 273,377
209,767 30% 991,433 920,070 8% -----------------------------
--------------------------- EXPENSES Compensation & related
expenses 188,257 143,978 31% 672,325 626,030 7% Clearing &
exchange fees 7,244 7,733 -6% 26,748 31,007 -14% Communications
& technology 14,435 19,448 -26% 62,724 75,359 -17% Occupancy
& equipment costs 18,869 17,678 7% 74,372 69,945 6% Interest
5,618 4,936 14% 21,050 38,998 -46% Other 28,345 23,723 19% 99,401
114,774 -13% -----------------------------
--------------------------- 262,768 217,496 21% 956,620 956,113 0%
----------------------------- --------------------------- Profit
(loss) before taxes 10,609 (7,729) n/a 34,813 (36,043) n/a Income
tax provision (benefit) 4,146 (3,905) n/a 15,326 (15,273) n/a
----------------------------- ---------------------------
----------------------------- --------------------------- Net
profit (loss) for the period $6,463 ($3,824) n/a $19,487 ($20,770)
n/a ----------------------------- ---------------------------
----------------------------- --------------------------- Profit
(loss) per share Basic $0.49 ($0.29) $1.49 ($1.57) Diluted $0.48
($0.29) $1.45 ($1.57) Basic weighted average shares outstanding
13,116,107 13,022,155 13,110,647 13,199,580 Actual shares
outstanding 13,217,681 12,999,145 13,217,681 12,999,145
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Company Information 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. Forward-Looking
Statements 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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