Summit Financial Services Group Announces Results for the Three- and Nine-Months Ended September 30, 2011

Nov 14, 2011, 16:00 ET from Summit Brokerage Services, Inc.

BOCA RATON, Fla., Nov. 14, 2011 /PRNewswire/ -- Summit Financial Services Group, Inc. (OTC Bulletin Board: SFNS) announced financial results for the three- and nine-month periods ended September 30, 2011. For the three-month period ended September 30, 2011 (the "2011 Quarter"), the Company reported revenues of approximately $16.8 million, which represented an increase of approximately $0.9 million, or approximately 6%, from the approximately $15.9 million in revenues reported for the three-month period ended September 30, 2010 (the "2010 Quarter"). For the 2011 Quarter, the Company reported net income of approximately $300,000, or a decrease of approximately 39% from net income of approximately $490,000 reported for the 2010 Quarter.

For the nine-month period ended September 30, 2011 (the "2011 Period"), the Company reported revenues of approximately $50.4 million, which represented an increase of approximately $4.2 million, or approximately 9%, from the approximately $46.2 million in revenues reported for the nine-months ended September 30, 2010 (the "2010 Period"). For the 2011 Period, the Company reported net income of approximately $1,253,000, or an increase of approximately 93% from net income of approximately $649,000 reported for the 2010 Period.

Marshall Leeds, the Company's Chairman, Chief Executive Officer and President, stated: "We take great pleasure that throughout the course of a tumultuous year for the markets, our business model and recruiting strategy have nonetheless resulted in an increase in EBITDA for both the three- and nine-month periods. EBITDA, as adjusted, increased during the 2011 Quarter to approximately $993,000 compared with approximately $958,000 for the 2010 Quarter. EBITDA, as adjusted, increased during the 2011 Period to approximately $3,141,000 from approximately $2,352,000 reported for the 2010 Period." Mr. Leeds continued: "Although our net income for the 2011 Quarter declined when compared with the net income from the prior year as a result of an increase in the Company's tax provision, we have still been able to achieve positive net income growth for the 2011 Period." Mr. Leeds concluded: "I am very grateful for the hard work and dedication put in by our financial advisors, their staffs and our home office associates that made it possible for the Company to achieve these results."

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 advisor, 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 300 registered representatives, and its business plan is focused primarily on increasing its network of affiliated registered representatives through recruitment as well as by acquisitions.

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

Three Months Ended

September 30

Nine Months Ended

September 30,

2011

2010

2011

2010

Net Income as reported

$     299,752

$     490,409

$   1,253,389

$     649,478

Add:   Depreciation

47,701

43,669

133,380

136,097

Amortization - notes

57,182

93,537

194,324

313,930

Non-cash compensation

139,403

127,981

540,937

713,816

Income tax expense

449,042

202,858

1,019,422

538,377

EBITDA, as adjusted

$     993,080

$     958,454

$   3,141,452

$  2,351,698

Earnings before interest, taxes, depreciation and amortization, or EBITDA, adjusted for non-cash 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-related 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 September 30, 2011

For the Three Months Ended

September 30,

2011

(Unaudited)

2010

(Unaudited)

Revenues

Commissions

$   16,183,325

$  15,229,385

Interest and dividends

275,940

380,146

Other

291,970

314,817

$  16,751,235

$  15,924,348

Expenses

Commissions and clearing costs

13,670,219

13,065,341

Employee compensation and benefits

1,491,567

1,449,692

Occupancy and equipment

188,541

191,602

Communications

75,102

58,322

Depreciation and amortization

47,701

43,669

Other operating expenses

529,311

422,455

$ 16,002,441

$ 15,231,081

Income before income taxes

748,794

693,267

Provision for income taxes

449,042

202,858

Net income

$      299,752

$     490,409

Basic income per common share

$            0.01

$           0.02

Diluted income per common share

$            0.01

$           0.02

Weighted average common shares outstanding:

Basic

26,091,666

25,956,357

Diluted

29,947,328

31,765,517

Summit Financial Services Group, Inc.

Condensed Consolidated Statements of Income

Nine Months Ended September 30, 2011

For the Nine Months

Ended September 30,

2011

(Unaudited)

2010

(Unaudited)

Revenues

Commissions

$  48,490,939

$  44,380,927

Interest and dividends

840,388

1,075,128

Other

1,019,156

748,652

$  50,350,483

$  46,204,707

Expenses

Commissions and clearing costs

40,844,126

38,060,443

Employee compensation and benefits

4,794,295

4,607,484

Occupancy and equipment

540,239

602,287

Communications

270,865

230,015

Depreciation and amortization

133,380

136,097

Other operating expenses

1,494,767

1,380,526

$ 48,077,672

$  45,016,852

Income before income taxes

2,272,811

1,187,855

Provision for income taxes

1,019,422

538,377

Net income

$  1,253,389

$      649,478

Basic income per common share

$           0.05

$            0.02

Diluted income per common share

$           0.04

$            0.02

Weighted average common shares outstanding:

Basic

26,650,858

25,857,300

Diluted

31,157,408

29,297,924

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, investor confidence and the performance of the securities markets, and the availability of suitable candidates for the Company's acquisition or recruitment.

SOURCE Summit Brokerage Services, Inc.



RELATED LINKS

http://www.summitbrokerage.com