Piper Jaffray Companies Announces First Quarter Results
Piper Jaffray Companies Announces First Quarter Results Wednesday April 16, 8:00 am ET
MINNEAPOLIS--(BUSINESS WIRE)--Piper Jaffray Companies (NYSE: PJC - News) today announced a net loss from continuing operations of $3.4 million, or a loss of $0.22 per share, for the quarter ended March 31, 2008. In the year-ago period net income from continuing operations was $14.7 million, or $0.82 per diluted share, and $15.1 million, or $0.91 per diluted share, in the fourth quarter of 2007.
For the first quarter of 2008, continuing operations generated net revenues of $95.7 million, down 30 percent from $137.0 million for the first quarter of 2007 and down 35 percent from the fourth quarter of 2007.
“We are disappointed to report a loss for the first quarter. This performance was driven by the lowest equity underwriting activity in the industry in the past five years, and a net loss in high yield and structured products sales and trading. In addition, our first quarter results included a severance charge related to reducing headcount in certain areas of the firm,” said Chairman and Chief Executive Officer Andrew S. Duff. “We believe the weakness in the equity environment will carry through the second quarter of 2008. That said, we remain focused on our long-term strategy and growth objectives. We also intend to seize opportunities presented by the market downturn—including selectively hiring talent to enhance our franchise—that can place us in an even stronger competitive position when conditions turn more favorable. We remain confident about the strength of our franchise and market position in the industry.”
The company also announced today that its board of directors has authorized the repurchase of up to $100 million of the company’s outstanding common stock. The principal purpose of the share repurchase program is to manage the company’s equity capital relative to the growth of its business and to offset the dilutive effect of employee equity-based compensation. The authorization expires June 30, 2010. As of March 10, 2008, Piper Jaffray Companies had 18.8 million common shares outstanding.
Results of Continuing Operations
For the first quarter of 2008, total investment banking revenues were $61.2 million, down 29 percent and down 37 percent, compared to robust activity in the first and fourth quarters of 2007, respectively.
Equity financing revenues were $16.5 million, down 59 percent and 62 percent compared to the year-ago period and the fourth quarter of 2007, respectively. The reduced performance was driven by significantly lower financing activity. Industry-wide, the number of completed transactions was down nearly 50 percent versus the comparative periods. (Source: Dealogic) Advisory services revenues were $25.3 million, essentially the same as the year-ago period, and down 31 percent compared to a robust fourth quarter of 2007. Debt financing revenues were $19.4 million, down 3 percent compared to the first quarter of 2007, and up 16 percent compared to the fourth quarter of 2007. While taxable financing revenues declined year-over-year, public finance-related revenues rose compared to the year-ago period and the sequential quarter. Higher revenues related to short-term municipal products and higher interest rate product revenues associated with public finance underwritings led to the increase. The following is a recap of completed deal information for the first quarter of 2008:
15 equity financings raising capital of $2.3 billion,