Summit Financial Services Group Announces Results for the Quarter Ended March 31, 2014 - Northern Michigan's News Leader

Summit Financial Services Group Announces Results for the Quarter Ended March 31, 2014

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SOURCE Summit Financial Services Group, Inc.

BOCA RATON, Fla., May 15, 2014 /PRNewswire/ -- Summit Financial Services Group, Inc. (OTC: SFNS) announced financial results for the three-month period ended March 31, 2014 (the "2014 Quarter"). For the 2014 Quarter, the Company reported revenues of $26.2 million, which represented an increase of $4.5 million, or 21%, from the $21.7 million in revenues reported for the same period of the prior year (the "2013 Quarter"). For the 2014 Quarter, the Company reported pre-tax income of $814,000 versus pre-tax income of $1,325,000 for the 2013 Quarter.  For the 2014 Quarter, the Company reported net income of $414,000 versus net income of $674,000 for the 2013 Quarter.

Marshall Leeds, the Company's Chairman, Chief Executive Officer and President, commented: "We believe that the increase in revenue of 21% during the 2014 Quarter continues to validate our overall growth strategy.  Our earnings, however, were impacted by, among other things, approximately $433,000 in costs related to our pending merger with RCS Capital, as well as the incurrence of additional infrastructure costs to support our current and future growth. As a result," Mr. Leeds continued, "the Company generated EBITDA, as adjusted (which we consider to be a principal metric of our success) of $1.10 million for the 2014 Quarter, compared with $1.64 million for the 2013 Quarter." Mr. Leeds further stated that: "As always, I want to recognize and thank our hard-working and dedicated Summit financial advisors and our associates for their hard work and dedication."

The Company is a Florida-based financial services holding company that provides, through its operating subsidiary, Summit Brokerage Services, Inc. ("Summit Brokerage"), a broad range of securities brokerage and investment services to primarily individual investors. Summit Brokerage also sells insurance products, predominantly fixed and variable annuities and life insurance through its subsidiary, SBS Insurance Agency of Florida. Summit Brokerage also provides asset management services through its investment adviser, Summit Financial Group, Inc.

Summit Brokerage is registered with the Securities and Exchange Commission (SEC), and is a member of FINRA (f/k/a NASD), the Municipal Securities Rule Making Board, and the National Futures Association. The Company currently offers its services through a network of approximately 321 registered representatives, and its business plan is focused primarily on increasing its network of affiliated registered representatives through recruitment.

All of the above numbers have been rounded for ease of presentation.

The following table presents a reconciliation of EBITDA, as adjusted, to net income as reported:

 








March 31,


2014


2013

Net income as reported

$

413,850


$

674,180

Add: Depreciation


74,658



43,543

Amortization – notes receivable


83,587



49,535

Stock-based compensation


125,714



218,547

Income tax expense


400,000



651,270







EBITDA, as adjusted

$

1,097,809


$

1,637,075







 

Earnings before interest, taxes, depreciation and amortization, or EBITDA, adjusted for stock-based compensation expense is a key metric the Company uses in evaluating its financial performance. EBITDA is considered a non-GAAP financial measure as defined by Regulation G, promulgated by the SEC under the Securities Act of 1933, as amended. The Company considers EBITDA, as adjusted, important in monitoring and evaluating its financial performance on a consistent basis across various periods, as well as for purposes of, analyzing and evaluating financial and strategic planning decisions regarding future operating investments and potential acquisitions. The Company believes that EBITDA, as adjusted, eliminates items that are not part of its core operations, or do not involve a cash outlay, such as stock-based compensation. EBITDA, as adjusted, should be considered in addition to, rather than as a substitute for, pre-tax income, net income and cash flows from operating activities.

 

Summit Financial Services Group, Inc.

Condensed Consolidated Statements of Income

Quarter Ended March 31, 2014









For The Three Months
Ended March 31,


2014


2013


(Unaudited)


(Unaudited)

Revenues






Commissions

$

24,548,784


$

20,385,988

Interest and dividends


224,490



206,236

Other revenue


1,388,074



1,087,166









26,161,348



21,679,390










Expenses






Commissions and related costs


20,921,507



17,148,648

Employee compensation and benefits


2,106,911



1,918,789

Occupancy and equipment


205,642



194,848

Communications


162,556



111,306

Depreciation and amortization


74,658



43,543

Other operating expenses


1,876,224



936,806









25,347,498



20,353,940







Income before provision for income taxes


813,850



1,325,450







Provision for income taxes


400,000



651,270







Net income

$

413,850


$

674,180







Basic income per common share

$

0.02


$

0.03







Diluted income per common share

$

0.01


$

0.03







Weighted average common shares outstanding:






Basic


22,005,032



20,296,337







Diluted


30,275,563



25,517,234

 

"Forward-looking" Statements

This press release may contain "forward-looking" statements, as defined in the Private Securities Litigation Reform Act of 1995, as amended. Any such statements are made pursuant to the safe-harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, and they involve a number of risks and uncertainties that could cause actual results to differ materially from those that may be anticipated by or from the forward-looking statements. Important factors that could cause such a difference are set forth in the Company's filings with the Securities and Exchange Commission and include, but are not limited to, the consummation of the Company's previously announced merger with a wholly owned subsidiary of RCS Capital Corporation, investor confidence and the performance of the securities markets, and the availability of suitable financial advisor candidates for the Company's recruitment.

©2012 PR Newswire. All Rights Reserved.

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