January 29, 2014 | ||||
Date of report (Date of earliest event reported) |
PIPER JAFFRAY COMPANIES | ||||
(Exact Name of Registrant as Specified in its Charter) |
Delaware | 1-31720 | 30-0168701 | ||||||
(State of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
800 Nicollet Mall, Suite 1000 | ||||||||
Minneapolis, Minnesota | 55402 | |||||||
(Address of Principal Executive Offices) | (Zip Code) | |||||||
(612) 303-6000 | ||||||||
(Registrant’s Telephone Number, Including Area Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
(d) | Exhibit |
PIPER JAFFRAY COMPANIES | ||||
Date: | January 29, 2014 | By | /s/ Debbra L. Schoneman | |
Debbra L. Schoneman | ||||
Chief Financial Officer |
No. | Description | Manner of Filing | ||
99 | Press Release dated January 29, 2014 | Filed Electronically |
• | Adjusted net income from continuing operations(1) was $30.5 million, or $1.91 per diluted common share(1), in the fourth quarter of 2013, compared to $16.8 million, or $0.95 per diluted common share, in the fourth quarter of 2012, and $11.6 million, or $0.72 per diluted common share, in the third quarter of 2013. |
• | Record adjusted net revenues from continuing operations(1) of $182.6 million in the fourth quarter of 2013. Adjusted net revenues were $140.6 million and $125.0 million in the fourth quarter of 2012 and the third quarter of 2013, respectively. |
• | Adjusted pre-tax operating margin(1) was 23.1% in the fourth quarter of 2013, compared to 17.8% and 13.9% in the fourth quarter of 2012 and the third quarter of 2013, respectively. |
• | Assets under management were $11.2 billion at December 31, 2013, compared to $9.1 billion in the year-ago period and $10.6 billion at the end of the third quarter of 2013. |
• | We returned $55.9 million of capital to shareholders during 2013 by repurchasing 1,720,000 shares, representing 11% of our outstanding common stock at an average price of $32.52 per share. |
• | Book value per share increased 6.0% from December 31, 2012 to $51.08 a share at December 31, 2013. |
Three Months Ended | Percent Inc/(Dec) | Twelve Months Ended | ||||||||||||||||||||||||||
(Amounts in thousands, | Dec. 31, | Sept. 30, | Dec. 31, | 4Q '13 | 4Q '13 | Dec. 31, | Dec. 31, | Percent | ||||||||||||||||||||
except per share data) | 2013 | 2013 | 2012 | vs. 3Q '13 | vs. 4Q '12 | 2013 | 2012 | Inc/(Dec) | ||||||||||||||||||||
As Adjusted(1) | ||||||||||||||||||||||||||||
Net revenues | $ | 182,643 | $ | 125,023 | $ | 140,605 | 46.1 | % | 29.9 | % | $ | 516,401 | $ | 484,778 | 6.5 | % | ||||||||||||
Net income from continuing operations | $ | 30,453 | $ | 11,646 | $ | 16,822 | 161.5 | % | 81.0 | % | $ | 59,547 | $ | 54,328 | 9.6 | % | ||||||||||||
Earnings per diluted common share from continuing operations | $ | 1.91 | $ | 0.72 | $ | 0.95 | 163.9 | % | 100.4 | % | $ | 3.56 | $ | 2.98 | 19.5 | % | ||||||||||||
U.S. GAAP | ||||||||||||||||||||||||||||
Net revenues | $ | 187,576 | $ | 128,314 | $ | 140,911 | 46.2 | % | 33.1 | % | $ | 525,195 | $ | 488,952 | 7.4 | % | ||||||||||||
Net income from continuing operations | $ | 27,952 | $ | 6,851 | $ | 15,565 | 308.0 | % | 79.6 | % | $ | 49,829 | $ | 47,075 | 5.9 | % | ||||||||||||
Earnings per diluted common share from continuing operations | $ | 1.75 | $ | 0.42 | $ | 0.88 | 316.7 | % | 98.9 | % | $ | 2.98 | $ | 2.58 | 15.5 | % | ||||||||||||
Earnings per diluted common share | $ | 1.70 | $ | 0.33 | $ | 0.67 | 415.2 | % | 153.7 | % | $ | 2.70 | $ | 2.26 | 19.5 | % | ||||||||||||
Pre-tax operating margin from continuing operations | 22.4 | % | 9.4 | % | 16.2 | % | 14.4 | % | 14.1 | % |
(1) | A non-U.S. GAAP ("non-GAAP") measure. For a detailed explanation of the adjustments made to the corresponding U.S. GAAP measures, see "Reconciliation of U.S. GAAP to Selected Summary Financial Information." We believe that presenting our results and measures on an adjusted basis in conjunction with U.S. GAAP measures provides the most meaningful basis for comparison of our operating results across periods. |
• | Equity financing revenues of $34.1 million increased 89% compared to the fourth quarter of 2012 due to more completed transactions and higher revenue per transaction. Revenues increased 14% compared to the sequential quarter due to higher revenue per transaction. |
• | Fixed income financing revenues were $22.3 million, up 9% compared to the year-ago period due to higher revenue per transaction. Revenues increased 74% compared to the third quarter of 2013 due to more completed transactions and higher revenue per transaction. |
• | Advisory services revenues were $35.3 million, down 21% compared to the fourth quarter of 2012 and up 74% compared to the third quarter of 2013. Revenues were unfavorable compared to the year-ago period due to fewer completed transactions as sellers were motivated to complete transactions during 2012 due to pending tax increases. Revenues increased compared to the third quarter of 2013 due to higher revenue per transaction. |
• | Equity institutional brokerage revenues of $26.1 million increased 30% and 14% compared to the fourth quarter of 2012 and the third quarter of 2013, respectively, due to improved trading performance. Also, revenues improved compared to both periods due to higher gains from our equity strategic trading activities, which we began in the second half of 2013 to leverage the firm's intellectual capital and diversify our strategic trading efforts. |
• | Fixed income institutional brokerage revenues were $26.5 million, up 18% and 55% compared to the fourth quarter of 2012 and the third quarter of 2013, respectively, due to an improved secondary fixed income trading environment. Revenues also increased compared to the third quarter of 2013 as results from the firm's fixed income strategic trading businesses improved compared to the sequential quarter. |
• | Management and performance fees earned from managing our alternative asset management funds were $1.2 million, up 113% and 11% compared to the year-ago period and the sequential quarter, respectively. The increase compared to the fourth quarter of 2012 was primarily driven by higher assets under management (AUM) from net client inflows. |
• | Adjusted investment income, which includes gains and losses on our merchant banking and firm investments, was $11.3 million compared to $0.9 million in the year-ago period and $4.6 million in the sequential quarter. Adjusted revenues increased compared to both periods due primarily to higher gains on our merchant banking investments. |
• | Long-term financing expenses, which represent interest paid on the firm's variable rate senior notes and syndicated bank facility, were $1.8 million, down 37% compared to the fourth quarter of 2012. The decrease was due to additional costs recognized in the fourth quarter of 2012 upon prepayment of the syndicated bank facility. Long-term financing expenses were flat compared to the third quarter of 2013. |
• | Adjusted operating expenses for the fourth quarter were $123.9 million, up 18% and 27% compared to the prior year quarter and the third quarter of 2013, resulting from higher compensation expenses due to improved operating results and business expansion. |
• | Adjusted segment pre-tax operating margin was 20.1% compared to 15.8% in the year-ago period and 9.1% in the third quarter of 2013. Adjusted pre-tax operating margin improved compared to both periods due to leverage on our non-compensation expenses from higher adjusted net revenues. |
• | Adjusted operating expenses for the current quarter were $16.6 million, up 52% and 60% compared to the year-ago period and the third quarter of 2013, respectively, due to higher compensation expenses. |
• | Adjusted segment pre-tax operating margin was 39.8%, compared to 33.0% in the year-ago period and 42.6% in the third quarter of 2013. Adjusted segment pre-tax margin improved relative to the prior year quarter due to higher adjusted net revenues, and decreased relative to the sequential quarter due to higher compensation expenses. |
• | Assets under management were $11.2 billion at the end of the fourth quarter of 2013, compared to $9.1 billion in the year-ago period and $10.6 billion at the end of the third quarter of 2013. Increases in AUM have been driven by market appreciation. |
For the Quarter Ended | |||||
Dec. 31, 2013 | Sept. 30, 2013 | Dec. 31, 2012 | |||
Full time employees | 1,026 | 1,002 | 907 | ||
Equity financings | |||||
# of transactions | 26 | 27 | 16 | ||
Capital raised | $3.8 billion | $4.8 billion | $1.5 billion | ||
Negotiated tax-exempt issuances | |||||
# of transactions | 97 | 61 | 121 | ||
Par value | $1.8 billion | $1.3 billion | $1.6 billion | ||
Mergers & acquisitions | |||||
# of transactions | 13 | 11 | 22 | ||
Aggregate deal value | $1.3 billion | $1.0 billion | $6.8 billion | ||
Asset Management | |||||
AUM | $11.2 billion | $10.6 billion | $9.1 billion | ||
Common shareholders’ equity | $734.7 million | $707.4 million | $733.3 million | ||
Rolling 12 month return on average common shareholders’ equity ** | 6.2% | 4.1% | 5.7% | ||
Rolling 12 month return on average tangible common shareholders’ equity † | 9.3% | 6.1% | 8.7% | ||
Book value per share | $51.08 | $49.11 | $48.20 | ||
Tangible book value per share ‡ | $33.66 | $31.56 | $32.39 |
* | Number of employees, transaction data, and AUM reflect continuing operations; other numbers reflect continuing and discontinued results. |
** | Rolling 12 month return on average common shareholders' equity is computed by dividing net income applicable to Piper Jaffray Companies' for the last 12 months by average monthly common shareholders' equity. |
As of | As of | As of | |||||||||
(Amounts in thousands) | Dec. 31, 2013 | Sept. 30, 2013 | Dec. 31, 2012 | ||||||||
Average common shareholders’ equity | $ | 728,187 | $ | 730,348 | $ | 721,131 | |||||
Deduct: average goodwill and identifiable intangible assets | 244,770 | 243,883 | 249,398 | ||||||||
Average tangible common shareholders’ equity | $ | 483,417 | $ | 486,465 | $ | 471,733 |
As of | As of | As of | |||||||||
(Amounts in thousands) | Dec. 31, 2013 | Sept. 30, 2013 | Dec. 31, 2012 | ||||||||
Common shareholders’ equity | $ | 734,676 | $ | 707,365 | $ | 733,292 | |||||
Deduct: goodwill and identifiable intangible assets | 250,564 | 252,761 | 240,480 | ||||||||
Tangible common shareholders’ equity | $ | 484,112 | $ | 454,604 | $ | 492,812 |
For the Year Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | ||
Equity financings | |||
# of transactions | 92 | 67 | |
Capital raised | $19.9 billion | $9.1 billion ^ | |
Negotiated tax-exempt issuances | |||
# of transactions | 413 | 444 | |
Par value | $7.9 billion | $7.3 billion | |
Mergers & acquisitions | |||
# of transactions | 31 | 40 | |
Aggregate deal value | $2.9 billion | $10.2 billion |
* | Number of employees, transaction data, and AUM reflect continuing operations; other numbers reflect continuing and discontinued results. |
^ | Due to size, Facebook IPO capital raised has been excluded. |
• | market and economic conditions or developments may be unfavorable, including in specific sectors in which we operate, and these conditions or developments, such as market fluctuations or volatility, may adversely affect our business, revenue levels and profitability; |
• | further interest rate volatility, especially if the changes are rapid or severe, could continue to negatively impact our fixed income institutional business; |
• | strategic trading activities comprise a meaningful portion of our fixed income institutional brokerage revenue, and results from these activities may be volatile and vary significantly, including the possibility of incurring losses, on a quarterly and annual basis; |
• | the volume of anticipated investment banking transactions as reflected in our deal pipelines (and the net revenues we earn from such transactions) may differ from expected results if there is a decline in macroeconomic conditions or the financial markets, or if the terms of any transactions are modified; |
• | the expected benefits of the Seattle-Northwest and Edgeview acquisitions and any hires that we make, including the hiring of a team as was done in the case of Partnership Capital Growth, may take longer than anticipated to achieve and may not be achieved in their entirety or at all, and will depend upon our integration of the companies and performance of new hires proving successful; and |
• | our stock price may fluctuate as a result of several factors, including but not limited to, changes in our revenues and operating results. |
Three Months Ended | Percent Inc/(Dec) | Twelve Months Ended | ||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | Dec. 31, | 4Q '13 | 4Q '13 | Dec. 31, | Dec. 31, | Percent | |||||||||||||||||||||
(Amounts in thousands, except per share data) | 2013 | 2013 | 2012 | vs. 3Q '13 | vs. 4Q '12 | 2013 | 2012 | Inc/(Dec) | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
Investment banking | $ | 91,639 | $ | 62,848 | $ | 82,887 | 45.8 | % | 10.6 | % | $ | 248,563 | $ | 232,958 | 6.7 | % | ||||||||||||
Institutional brokerage | 46,572 | 35,318 | 37,369 | 31.9 | 24.6 | 146,648 | 166,642 | (12.0 | ) | |||||||||||||||||||
Asset management | 27,461 | 18,701 | 16,761 | 46.8 | 63.8 | 83,045 | 65,699 | 26.4 | ||||||||||||||||||||
Interest | 14,940 | 12,360 | 10,395 | 20.9 | 43.7 | 50,409 | 37,845 | 33.2 | ||||||||||||||||||||
Investment income/(loss) | 13,281 | 5,279 | (248 | ) | 151.6 | N/M | 21,566 | 4,903 | 339.9 | |||||||||||||||||||
Total revenues | 193,893 | 134,506 | 147,164 | 44.2 | 31.8 | 550,231 | 508,047 | 8.3 | ||||||||||||||||||||
Interest expense | 6,317 | 6,192 | 6,253 | 2.0 | 1.0 | 25,036 | 19,095 | 31.1 | ||||||||||||||||||||
Net revenues | 187,576 | 128,314 | 140,911 | 46.2 | 33.1 | 525,195 | 488,952 | 7.4 | ||||||||||||||||||||
Non-interest expenses: | ||||||||||||||||||||||||||||
Compensation and benefits | 111,933 | 79,426 | 87,415 | 40.9 | 28.0 | 322,464 | 296,882 | 8.6 | ||||||||||||||||||||
Occupancy and equipment | 6,624 | 6,509 | 6,783 | 1.8 | (2.3 | ) | 25,493 | 26,454 | (3.6 | ) | ||||||||||||||||||
Communications | 5,391 | 5,778 | 4,431 | (6.7 | ) | 21.7 | 21,431 | 20,543 | 4.3 | |||||||||||||||||||
Floor brokerage and clearance | 1,764 | 2,109 | 2,120 | (16.4 | ) | (16.8 | ) | 8,270 | 8,054 | 2.7 | ||||||||||||||||||
Marketing and business development | 5,219 | 5,447 | 4,926 | (4.2 | ) | 5.9 | 21,603 | 19,908 | 8.5 | |||||||||||||||||||
Outside services | 9,237 | 8,082 | 8,188 | 14.3 | 12.8 | 32,982 | 27,998 | 17.8 | ||||||||||||||||||||
Restructuring and integration costs | 866 | 3,823 | — | (77.3 | ) | N/M | 4,689 | 3,642 | 28.7 | |||||||||||||||||||
Intangible asset amortization expense | 1,772 | 2,899 | 1,736 | (38.9 | ) | 2.1 | 7,993 | 6,944 | 15.1 | |||||||||||||||||||
Other operating expenses | 2,718 | 2,181 | 2,530 | 24.6 | 7.4 | 4,657 | 9,516 | (51.1 | ) | |||||||||||||||||||
Total non-interest expenses | 145,524 | 116,254 | 118,129 | 25.2 | 23.2 | 449,582 | 419,941 | 7.1 | ||||||||||||||||||||
Income from continuing operations before income tax expense | 42,052 | 12,060 | 22,782 | 248.7 | 84.6 | 75,613 | 69,011 | 9.6 | ||||||||||||||||||||
Income tax expense | 10,260 | 2,886 | 7,422 | 255.5 | 38.2 | 20,390 | 19,470 | 4.7 | ||||||||||||||||||||
Income from continuing operations | 31,792 | 9,174 | 15,360 | 246.5 | 107.0 | 55,223 | 49,541 | 11.5 | ||||||||||||||||||||
Discontinued operations: | ||||||||||||||||||||||||||||
Loss from discontinued operations, net of tax | (818 | ) | (1,529 | ) | (3,741 | ) | (46.5 | ) | (78.1 | ) | (4,739 | ) | (5,807 | ) | (18.4 | ) | ||||||||||||
Net income | 30,974 | 7,645 | 11,619 | 305.2 | 166.6 | 50,484 | 43,734 | 15.4 | ||||||||||||||||||||
Net income/(loss) applicable to noncontrolling interests | 3,840 | 2,323 | (205 | ) | 65.3 | N/M | 5,394 | 2,466 | 118.7 | |||||||||||||||||||
Net income applicable to Piper Jaffray Companies (a) | $ | 27,134 | $ | 5,322 | $ | 11,824 | 409.8 | % | 129.5 | % | $ | 45,090 | $ | 41,268 | 9.3 | % | ||||||||||||
Net income applicable to Piper Jaffray Companies’ common shareholders (a) | $ | 24,445 | $ | 4,826 | $ | 10,198 | 406.5 | % | 139.7 | % | $ | 40,596 | $ | 35,335 | 14.9 | % | ||||||||||||
Three Months Ended | Percent Inc/(Dec) | Twelve Months Ended | ||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | Dec. 31, | 4Q '13 | 4Q '13 | Dec. 31, | Dec. 31, | Percent | |||||||||||||||||||||
(Amounts in thousands, except per share data) | 2013 | 2013 | 2012 | vs. 3Q '13 | vs. 4Q '12 | 2013 | 2012 | Inc/(Dec) | ||||||||||||||||||||
Amounts applicable to Piper Jaffray Companies | ||||||||||||||||||||||||||||
Net income from continuing operations | $ | 27,952 | $ | 6,851 | $ | 15,565 | 308.0 | % | 79.6 | % | $ | 49,829 | $ | 47,075 | 5.9 | % | ||||||||||||
Net loss from discontinued operations | (818 | ) | (1,529 | ) | (3,741 | ) | (46.5 | ) | (78.1 | ) | (4,739 | ) | (5,807 | ) | (18.4 | ) | ||||||||||||
Net income applicable to Piper Jaffray Companies | $ | 27,134 | $ | 5,322 | $ | 11,824 | 409.8 | % | 129.5 | % | $ | 45,090 | $ | 41,268 | 9.3 | % | ||||||||||||
Earnings/(loss) per basic common share | ||||||||||||||||||||||||||||
Income from continuing operations | $ | 1.75 | $ | 0.42 | $ | 0.88 | 316.7 | % | 98.9 | % | $ | 2.98 | $ | 2.58 | 15.5 | % | ||||||||||||
Loss from discontinued operations | (0.05 | ) | (0.09 | ) | (0.21 | ) | (44.4 | ) | (76.2 | ) | (0.28 | ) | (0.32 | ) | (12.5 | ) | ||||||||||||
Earnings per basic common share | $ | 1.70 | $ | 0.33 | $ | 0.67 | 415.2 | % | 153.7 | % | $ | 2.70 | $ | 2.26 | 19.5 | % | ||||||||||||
Earnings/(loss) per diluted common share | ||||||||||||||||||||||||||||
Income from continuing operations | $ | 1.75 | $ | 0.42 | $ | 0.88 | 316.7 | % | 98.9 | % | $ | 2.98 | $ | 2.58 | 15.5 | % | ||||||||||||
Loss from discontinued operations | (0.05 | ) | (0.09 | ) | (0.21 | ) | (44.4 | ) | (76.2 | ) | (0.28 | ) | (0.32 | ) | (12.5 | ) | ||||||||||||
Earnings per diluted common share | $ | 1.70 | $ | 0.33 | $ | 0.67 | 415.2 | % | 153.7 | % | $ | 2.70 | $ | 2.26 | 19.5 | % | ||||||||||||
Weighted average number of common shares outstanding | ||||||||||||||||||||||||||||
Basic | 14,378 | 14,621 | 15,253 | (1.7 | )% | (5.7 | )% | 15,046 | 15,615 | (3.6 | )% | |||||||||||||||||
Diluted | 14,397 | 14,626 | 15,256 | (1.6 | )% | (5.6 | )% | 15,061 | 15,616 | (3.6 | )% |
(a) | Net income applicable to Piper Jaffray Companies is the total net income earned by the Company. Piper Jaffray Companies calculates earnings per common share using the two-class method, which requires the allocation of consolidated net income between common shareholders and participating security holders, which in the case of Piper Jaffray Companies, represents unvested restricted stock with dividend rights. |
Three Months Ended | Percent Inc/(Dec) | Twelve Months Ended | ||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | Dec. 31, | 4Q '13 | 4Q '13 | Dec. 31, | Dec. 31, | Percent | |||||||||||||||||||||
(Dollars in thousands) | 2013 | 2013 | 2012 | vs. 3Q '13 | vs. 4Q '12 | 2013 | 2012 | Inc/(Dec) | ||||||||||||||||||||
Capital Markets | ||||||||||||||||||||||||||||
Investment banking | ||||||||||||||||||||||||||||
Financing | ||||||||||||||||||||||||||||
Equities | $ | 34,139 | $ | 30,010 | $ | 18,039 | 13.8 | % | 89.3 | % | $ | 100,224 | $ | 73,180 | 37.0 | % | ||||||||||||
Debt | 22,313 | 12,808 | 20,504 | 74.2 | 8.8 | 74,284 | 74,102 | 0.2 | ||||||||||||||||||||
Advisory services | 35,255 | 20,215 | 44,495 | 74.4 | (20.8 | ) | 74,420 | 86,165 | (13.6 | ) | ||||||||||||||||||
Total investment banking | 91,707 | 63,033 | 83,038 | 45.5 | 10.4 | 248,928 | 233,447 | 6.6 | ||||||||||||||||||||
Institutional sales and trading | ||||||||||||||||||||||||||||
Equities | 26,092 | 22,958 | 20,134 | 13.7 | 29.6 | 91,169 | 75,723 | 20.4 | ||||||||||||||||||||
Fixed income | 26,543 | 17,083 | 22,413 | 55.4 | 18.4 | 76,275 | 111,492 | (31.6 | ) | |||||||||||||||||||
Total institutional sales and trading | 52,635 | 40,041 | 42,547 | 31.5 | 23.7 | 167,444 | 187,215 | (10.6 | ) | |||||||||||||||||||
Management and performance fees | 1,214 | 1,094 | 571 | 11.0 | 112.6 | 3,891 | 1,678 | 131.9 | ||||||||||||||||||||
Investment income | 16,191 | 7,892 | 1,237 | 105.2 | N/M | 30,404 | 9,840 | 209.0 | ||||||||||||||||||||
Long-term financing expenses | (1,802 | ) | (1,797 | ) | (2,871 | ) | 0.3 | (37.2 | ) | (7,420 | ) | (7,982 | ) | (7.0 | ) | |||||||||||||
Net revenues | 159,945 | 110,263 | 124,522 | 45.1 | 28.4 | 443,247 | 424,198 | 4.5 | ||||||||||||||||||||
Operating expenses | 126,930 | 103,906 | 105,099 | 22.2 | 20.8 | 393,231 | 371,628 | 5.8 | ||||||||||||||||||||
Segment pre-tax operating income | $ | 33,015 | $ | 6,357 | $ | 19,423 | 419.3 | % | 70.0 | % | $ | 50,016 | $ | 52,570 | (4.9 | )% | ||||||||||||
Segment pre-tax operating margin | 20.6 | % | 5.8 | % | 15.6 | % | 11.3 | % | 12.4 | % | ||||||||||||||||||
Asset Management | ||||||||||||||||||||||||||||
Management and performance fees | ||||||||||||||||||||||||||||
Management fees | $ | 19,123 | $ | 17,547 | $ | 16,069 | 9.0 | % | 19.0 | % | $ | 71,314 | $ | 63,236 | 12.8 | % | ||||||||||||
Performance fees | 7,124 | 60 | 121 | N/M | N/M | 7,840 | 785 | 898.7 | ||||||||||||||||||||
Total management and performance fees | 26,247 | 17,607 | 16,190 | 49.1 | 62.1 | 79,154 | 64,021 | 23.6 | ||||||||||||||||||||
Investment income | 1,384 | 444 | 199 | 211.7 | 595.5 | 2,794 | 733 | 281.2 | ||||||||||||||||||||
Net revenues | 27,631 | 18,051 | 16,389 | 53.1 | 68.6 | 81,948 | 64,754 | 26.6 | ||||||||||||||||||||
Operating expenses | 18,594 | 12,348 | 13,030 | 50.6 | 42.7 | 56,351 | 48,313 | 16.6 | ||||||||||||||||||||
Segment pre-tax operating income | $ | 9,037 | $ | 5,703 | $ | 3,359 | 58.5 | % | 169.0 | % | $ | 25,597 | $ | 16,441 | 55.7 | % | ||||||||||||
Segment pre-tax operating margin | 32.7 | % | 31.6 | % | 20.5 | % | 31.2 | % | 25.4 | % | ||||||||||||||||||
Total | ||||||||||||||||||||||||||||
Net revenues | $ | 187,576 | $ | 128,314 | $ | 140,911 | 46.2 | % | 33.1 | % | $ | 525,195 | $ | 488,952 | 7.4 | % | ||||||||||||
Operating expenses | 145,524 | 116,254 | 118,129 | 25.2 | 23.2 | 449,582 | 419,941 | 7.1 | ||||||||||||||||||||
Pre-tax operating income | $ | 42,052 | $ | 12,060 | $ | 22,782 | 248.7 | % | 84.6 | % | $ | 75,613 | $ | 69,011 | 9.6 | % | ||||||||||||
Pre-tax operating margin | 22.4 | % | 9.4 | % | 16.2 | % | 14.4 | % | 14.1 | % |
Three Months Ended | Percent Inc/(Dec) | Twelve Months Ended | ||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | Dec. 31, | 4Q '13 | 4Q '13 | Dec. 31, | Dec. 31, | Percent | |||||||||||||||||||||
(Amounts in thousands, except per share data) | 2013 | 2013 | 2012 | vs. 3Q '13 | vs. 4Q '12 | 2013 | 2012 | Inc/(Dec) | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
Investment banking | $ | 91,639 | $ | 62,848 | $ | 82,887 | 45.8 | % | 10.6 | % | $ | 248,563 | $ | 232,958 | 6.7 | % | ||||||||||||
Institutional brokerage | 46,572 | 35,318 | 37,369 | 31.9 | 24.6 | 146,648 | 166,642 | (12.0 | ) | |||||||||||||||||||
Asset management | 27,461 | 18,701 | 16,761 | 46.8 | 63.8 | 83,045 | 65,699 | 26.4 | ||||||||||||||||||||
Interest | 11,400 | 9,605 | 9,497 | 18.7 | 20.0 | 40,292 | 35,097 | 14.8 | ||||||||||||||||||||
Investment income | 10,956 | 3,872 | 63 | 183.0 | N/M | 19,540 | 2,697 | 624.5 | ||||||||||||||||||||
Total revenues | 188,028 | 130,344 | 146,577 | 44.3 | 28.3 | 538,088 | 503,093 | 7.0 | ||||||||||||||||||||
Interest expense | 5,385 | 5,321 | 5,972 | 1.2 | (9.8 | ) | 21,687 | 18,315 | 18.4 | |||||||||||||||||||
Adjusted net revenues (2) | $ | 182,643 | $ | 125,023 | $ | 140,605 | 46.1 | % | 29.9 | % | $ | 516,401 | $ | 484,778 | 6.5 | % | ||||||||||||
Non-interest expenses: | ||||||||||||||||||||||||||||
Adjusted compensation and benefits (3) | $ | 110,652 | $ | 78,445 | $ | 87,094 | 41.1 | % | 27.0 | % | $ | 319,560 | $ | 295,598 | 8.1 | % | ||||||||||||
Ratio of adjusted compensation and benefits to adjusted net revenues | 60.6 | % | 62.7 | % | 61.9 | % | 61.9 | % | 61.0 | % | ||||||||||||||||||
Adjusted non-compensation expenses (4) | $ | 29,860 | $ | 29,138 | $ | 28,467 | 2.5 | % | 4.9 | % | $ | 111,036 | $ | 110,765 | 0.2 | % | ||||||||||||
Ratio of adjusted non-compensation expenses to adjusted net revenues | 16.3 | % | 23.3 | % | 20.2 | % | 21.5 | % | 22.8 | % | ||||||||||||||||||
Adjusted income: | ||||||||||||||||||||||||||||
Adjusted income from continuing operations before adjusted income tax expense (5) | $ | 42,131 | $ | 17,440 | $ | 25,044 | 141.6 | % | 68.2 | % | $ | 85,805 | $ | 78,415 | 9.4 | % | ||||||||||||
Adjusted operating margin (6) | 23.1 | % | 13.9 | % | 17.8 | % | 16.6 | % | 16.2 | % | ||||||||||||||||||
Adjusted income tax expense (7) | 11,678 | 5,794 | 8,222 | 101.6 | 42.0 | 26,258 | 24,087 | 9.0 | ||||||||||||||||||||
Adjusted net income from continuing operations (8) | $ | 30,453 | $ | 11,646 | $ | 16,822 | 161.5 | % | 81.0 | % | $ | 59,547 | $ | 54,328 | 9.6 | % | ||||||||||||
Effective tax rate (9) | 27.7 | % | 33.2 | % | 32.8 | % | 30.6 | % | 30.7 | % | ||||||||||||||||||
Adjusted net income from continuing operations applicable to Piper Jaffray Companies’ common shareholders (10) | $ | 27,435 | $ | 10,561 | $ | 14,509 | 159.8 | % | 89.1 | % | $ | 53,612 | $ | 46,517 | 15.3 | % | ||||||||||||
Adjusted earnings per diluted common share from continuing operations | $ | 1.91 | $ | 0.72 | $ | 0.95 | 163.9 | % | 100.4 | % | $ | 3.56 | $ | 2.98 | 19.5 | % | ||||||||||||
Weighted average number of common shares outstanding | ||||||||||||||||||||||||||||
Diluted | 14,397 | 14,626 | 15,256 | (1.6 | )% | (5.6 | )% | 15,061 | 15,616 | (3.6 | )% |
Three Months Ended | Percent Inc/(Dec) | Twelve Months Ended | ||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | Dec. 31, | 4Q '13 | 4Q '13 | Dec. 31, | Dec. 31, | Percent | |||||||||||||||||||||
(Dollars in thousands) | 2013 | 2013 | 2012 | vs. 3Q '13 | vs. 4Q '12 | 2013 | 2012 | Inc/(Dec) | ||||||||||||||||||||
Capital Markets | ||||||||||||||||||||||||||||
Investment banking | ||||||||||||||||||||||||||||
Financing | ||||||||||||||||||||||||||||
Equities | $ | 34,139 | $ | 30,010 | $ | 18,039 | 13.8 | % | 89.3 | % | $ | 100,224 | $ | 73,180 | 37.0 | % | ||||||||||||
Debt | 22,313 | 12,808 | 20,504 | 74.2 | 8.8 | 74,284 | 74,102 | 0.2 | ||||||||||||||||||||
Advisory services | 35,255 | 20,215 | 44,495 | 74.4 | (20.8 | ) | 74,420 | 86,165 | (13.6 | ) | ||||||||||||||||||
Total investment banking | 91,707 | 63,033 | 83,038 | 45.5 | 10.4 | 248,928 | 233,447 | 6.6 | ||||||||||||||||||||
Institutional sales and trading | ||||||||||||||||||||||||||||
Equities | 26,092 | 22,958 | 20,134 | 13.7 | 29.6 | 91,169 | 75,723 | 20.4 | ||||||||||||||||||||
Fixed income | 26,543 | 17,083 | 22,413 | 55.4 | 18.4 | 76,275 | 111,492 | (31.6 | ) | |||||||||||||||||||
Total institutional sales and trading | 52,635 | 40,041 | 42,547 | 31.5 | 23.7 | 167,444 | 187,215 | (10.6 | ) | |||||||||||||||||||
Management and performance fees | 1,214 | 1,094 | 571 | 11.0 | 112.6 | 3,891 | 1,678 | 131.9 | ||||||||||||||||||||
Investment income | 11,258 | 4,601 | 931 | 144.7 | N/M | 21,610 | 5,666 | 281.4 | ||||||||||||||||||||
Long-term financing expenses | (1,802 | ) | (1,797 | ) | (2,871 | ) | 0.3 | (37.2 | ) | (7,420 | ) | (7,982 | ) | (7.0 | ) | |||||||||||||
Adjusted net revenues (2) | 155,012 | 106,972 | 124,216 | 44.9 | 24.8 | 434,453 | 420,024 | 3.4 | ||||||||||||||||||||
Adjusted operating expenses (12) | 123,884 | 97,217 | 104,588 | 27.4 | 18.4 | 382,157 | 366,408 | 4.3 | ||||||||||||||||||||
Adjusted segment pre-tax operating income (5) | $ | 31,128 | $ | 9,755 | $ | 19,628 | 219.1 | % | 58.6 | % | $ | 52,296 | $ | 53,616 | (2.5 | )% | ||||||||||||
Adjusted segment pre-tax operating margin (6) | 20.1 | % | 9.1 | % | 15.8 | % | 12.0 | % | 12.8 | % | ||||||||||||||||||
Asset Management | ||||||||||||||||||||||||||||
Management and performance fees | ||||||||||||||||||||||||||||
Management fees | $ | 19,123 | $ | 17,547 | $ | 16,069 | 9.0 | % | 19.0 | % | $ | 71,314 | $ | 63,236 | 12.8 | % | ||||||||||||
Performance fees | 7,124 | 60 | 121 | N/M | N/M | 7,840 | 785 | 898.7 | ||||||||||||||||||||
Total management and performance fees | 26,247 | 17,607 | 16,190 | 49.1 | 62.1 | 79,154 | 64,021 | 23.6 | ||||||||||||||||||||
Investment income | 1,384 | 444 | 199 | 211.7 | 595.5 | 2,794 | 733 | 281.2 | ||||||||||||||||||||
Net revenues | 27,631 | 18,051 | 16,389 | 53.1 | 68.6 | 81,948 | 64,754 | 26.6 | ||||||||||||||||||||
Adjusted operating expenses (13) | 16,628 | 10,366 | 10,973 | 60.4 | 51.5 | 48,439 | 39,955 | 21.2 | ||||||||||||||||||||
Adjusted segment pre-tax operating income (13) | $ | 11,003 | $ | 7,685 | $ | 5,416 | 43.2 | % | 103.2 | % | $ | 33,509 | $ | 24,799 | 35.1 | % | ||||||||||||
Adjusted segment pre-tax operating margin (6) | 39.8 | % | 42.6 | % | 33.0 | % | 40.9 | % | 38.3 | % | ||||||||||||||||||
Total | ||||||||||||||||||||||||||||
Adjusted net revenues (2) | $ | 182,643 | $ | 125,023 | $ | 140,605 | 46.1 | % | 29.9 | % | $ | 516,401 | $ | 484,778 | 6.5 | % | ||||||||||||
Adjusted operating expenses (12) | 140,512 | 107,583 | 115,561 | 30.6 | 21.6 | 430,596 | 406,363 | 6.0 | ||||||||||||||||||||
Adjusted pre-tax operating income (5) | $ | 42,131 | $ | 17,440 | $ | 25,044 | 141.6 | % | 68.2 | % | $ | 85,805 | $ | 78,415 | 9.4 | % | ||||||||||||
Adjusted pre-tax operating margin (6) | 23.1 | % | 13.9 | % | 17.8 | % | 16.6 | % | 16.2 | % |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
Dec. 31, | Sept. 30, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||
(Amounts in thousands, except per share data) | 2013 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||
Net revenues: | |||||||||||||||||||
Net revenues – U.S. GAAP basis | $ | 187,576 | $ | 128,314 | $ | 140,911 | $ | 525,195 | $ | 488,952 | |||||||||
Adjustments: | |||||||||||||||||||
Revenue related to noncontrolling interests (11) | (4,933 | ) | (3,291 | ) | (306 | ) | (8,794 | ) | (4,174 | ) | |||||||||
Adjusted net revenues | $ | 182,643 | $ | 125,023 | $ | 140,605 | $ | 516,401 | $ | 484,778 | |||||||||
Compensation and benefits: | |||||||||||||||||||
Compensation and benefits – U.S. GAAP basis | $ | 111,933 | $ | 79,426 | $ | 87,415 | $ | 322,464 | $ | 296,882 | |||||||||
Adjustments: | |||||||||||||||||||
Compensation from acquisition-related agreements | (1,281 | ) | (981 | ) | (321 | ) | (2,904 | ) | (1,284 | ) | |||||||||
Adjusted compensation and benefits | $ | 110,652 | $ | 78,445 | $ | 87,094 | $ | 319,560 | $ | 295,598 | |||||||||
Non-compensation expenses: | |||||||||||||||||||
Non-compensation expenses – U.S. GAAP basis | $ | 33,591 | $ | 36,828 | $ | 30,714 | $ | 127,118 | $ | 123,059 | |||||||||
Adjustments: | |||||||||||||||||||
Non-compensation expenses related to noncontrolling interests (11) | (1,093 | ) | (968 | ) | (511 | ) | (3,400 | ) | (1,708 | ) | |||||||||
Restructuring and integration costs | (866 | ) | (3,823 | ) | — | (4,689 | ) | (3,642 | ) | ||||||||||
Amortization of intangible assets related to acquisitions | (1,772 | ) | (2,899 | ) | (1,736 | ) | (7,993 | ) | (6,944 | ) | |||||||||
Adjusted non-compensation expenses | $ | 29,860 | $ | 29,138 | $ | 28,467 | $ | 111,036 | $ | 110,765 | |||||||||
Income from continuing operations before income tax expense: | |||||||||||||||||||
Income from continuing operations before income tax expense – U.S. GAAP basis | $ | 42,052 | $ | 12,060 | $ | 22,782 | $ | 75,613 | $ | 69,011 | |||||||||
Adjustments: | |||||||||||||||||||
Revenue related to noncontrolling interests (11) | (4,933 | ) | (3,291 | ) | (306 | ) | (8,794 | ) | (4,174 | ) | |||||||||
Expenses related to noncontrolling interests (11) | 1,093 | 968 | 511 | 3,400 | 1,708 | ||||||||||||||
Compensation from acquisition-related agreements | 1,281 | 981 | 321 | 2,904 | 1,284 | ||||||||||||||
Restructuring and integration costs | 866 | 3,823 | — | 4,689 | 3,642 | ||||||||||||||
Amortization of intangible assets related to acquisitions | 1,772 | 2,899 | 1,736 | 7,993 | 6,944 | ||||||||||||||
Adjusted income from continuing operations before adjusted income tax expense | $ | 42,131 | $ | 17,440 | $ | 25,044 | $ | 85,805 | $ | 78,415 | |||||||||
Income tax expense: | |||||||||||||||||||
Income tax expense – U.S. GAAP basis | $ | 10,260 | $ | 2,886 | $ | 7,422 | $ | 20,390 | $ | 19,470 | |||||||||
Tax effect of adjustments: | |||||||||||||||||||
Compensation from acquisition-related agreements | 498 | 382 | 125 | 1,130 | 499 | ||||||||||||||
Restructuring and integration costs | 337 | 1,487 | — | 1,824 | 1,417 | ||||||||||||||
Amortization of intangible assets related to acquisitions | 583 | 1,039 | 675 | 2,914 | 2,701 | ||||||||||||||
Adjusted income tax expense | $ | 11,678 | $ | 5,794 | $ | 8,222 | $ | 26,258 | $ | 24,087 | |||||||||
Net income from continuing operations applicable to Piper Jaffray Companies: | |||||||||||||||||||
Net income from continuing operations applicable to Piper Jaffray Companies – U.S. GAAP basis | $ | 27,952 | $ | 6,851 | $ | 15,565 | $ | 49,829 | $ | 47,075 | |||||||||
Adjustments: | |||||||||||||||||||
Compensation from acquisition-related agreements | 783 | 599 | 196 | 1,774 | 785 | ||||||||||||||
Restructuring and integration costs | 529 | 2,336 | — | 2,865 | 2,225 | ||||||||||||||
Amortization of intangible assets related to acquisitions | 1,189 | 1,860 | 1,061 | 5,079 | 4,243 | ||||||||||||||
Adjusted net income from continuing operations | $ | 30,453 | $ | 11,646 | $ | 16,822 | $ | 59,547 | $ | 54,328 | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
Dec. 31, | Sept. 30, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||
(Amounts in thousands, except per share data) | 2013 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||
Net income from continuing operations applicable to Piper Jaffray Companies' common shareholders: | |||||||||||||||||||
Net income from continuing operations applicable to Piper Jaffray Companies' common stockholders – U.S. GAAP basis | $ | 25,182 | $ | 6,213 | $ | 13,425 | $ | 44,863 | $ | 40,307 | |||||||||
Adjustments: | |||||||||||||||||||
Compensation from acquisition-related agreements | 705 | 543 | 169 | 1,597 | 672 | ||||||||||||||
Restructuring and integration costs | 477 | 2,118 | — | 2,579 | 1,905 | ||||||||||||||
Amortization of intangible assets related to acquisitions | 1,071 | 1,687 | 915 | 4,573 | 3,633 | ||||||||||||||
Adjusted net income from continuing operations applicable to Piper Jaffray Companies' common stockholders | $ | 27,435 | $ | 10,561 | $ | 14,509 | $ | 53,612 | $ | 46,517 | |||||||||
Earnings per diluted common share from continuing operations: | |||||||||||||||||||
U.S. GAAP basis | $ | 1.75 | $ | 0.42 | $ | 0.88 | $ | 2.98 | $ | 2.58 | |||||||||
Adjustments: | |||||||||||||||||||
Compensation from acquisition-related agreements | 0.05 | 0.04 | 0.01 | 0.11 | 0.04 | ||||||||||||||
Restructuring and integration costs | 0.03 | 0.14 | — | 0.17 | 0.12 | ||||||||||||||
Amortization of intangible assets related to acquisitions | 0.07 | 0.12 | 0.06 | 0.30 | 0.23 | ||||||||||||||
Non-U.S. GAAP basis, as adjusted | $ | 1.91 | $ | 0.72 | $ | 0.95 | $ | 3.56 | $ | 2.98 |
(1) | Selected Summary Financial Information are non-GAAP measures. Management believes that presenting results and measures on an adjusted basis in conjunction with U.S. GAAP measures provides the most meaningful basis for comparison of its operating results across periods. |
(2) | A non-GAAP measure which excludes revenues related to noncontrolling interests (see (11) below). |
(3) | A non-GAAP measure which excludes compensation expense from acquisition-related agreements. |
(4) | A non-GAAP measure which excludes (a) non-compensation expenses related to noncontrolling interests (see (11) below), (b) restructuring and integration costs and (c) amortization of intangible assets related to acquisitions. |
(5) | A non-GAAP measure which excludes (a) revenues and expenses related to noncontrolling interests (see (11) below), (b) compensation from acquisition-related agreements, (c) restructuring and integration costs and (d) amortization of intangible assets related to acquisitions. |
(6) | A non-GAAP measure which represents adjusted income from continuing operations before adjusted income tax expense as a percentage of adjusted net revenues. |
(7) | A non-GAAP measure which excludes the income tax benefit from (a) compensation from acquisition-related agreements, (b) restructuring and integration costs and (c) amortization of intangible assets related to acquisitions. |
(8) | A non-GAAP measure which represents net income from continuing operations earned by the Company excluding (a) compensation expense from acquisition-related agreements, (b) restructuring and integration costs, (c) amortization of intangible assets related to acquisitions and (d) the income tax expense/(benefit) allocated to the adjustments. |
(9) | Effective tax rate is a non-GAAP measure which is computed based on a quotient, the numerator of which is adjusted income tax expense and the denominator of which is adjusted income from continuing operations before adjusted income tax expense. |
(10) | Piper Jaffray Companies calculates earnings per common share using the two-class method, which requires the allocation of consolidated adjusted net income between common shareholders and participating security holders, which in the case of Piper Jaffray Companies, represents unvested stock with dividend rights. |
(11) | Noncontrolling interests include revenue and expenses from consolidated alternative asset management entities that are not attributable, either directly or indirectly, to Piper Jaffray Companies. |
(12) | A non-GAAP measure which excludes (a) expenses related to noncontrolling interests (see (11) above), (b) compensation from acquisition-related agreements, (c) restructuring and integration costs and (d) amortization of intangible assets related to acquisitions. |
(13) | A non-GAAP measure which excludes (a) compensation from acquisition-related agreements, (b) restructuring and integration costs and (c) amortization of intangible assets related to acquisitions. |
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