Florida
|
65-0701248
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification Number)
|
Title of each class
|
Name of each exchange on which registered
|
Common Stock, par value $.0001 per share
|
NYSE MKT
|
8.00% Series A Cumulative Redeemable Preferred Stock, Liquidation Preference $25.00 per share
|
NYSE MKT
|
|
|
|
|
|
Page
|
PART 1
|
|
|
PART II
|
|
|
PART III
|
|
|
PART IV
|
|
|
|
•
|
Provide our advisors with a differentiated independent platform.
We believe we have built a meaningfully differentiated platform by offering our independent financial advisors the unique and valued benefits of access to Ladenburg’s wealth management division, capital markets products, investment banking services, proprietary investment research and fixed income trading desk, Highland's insurance solutions and Premier Trust's trust services and planning capabilities.
|
•
|
Provide technological solutions to independent financial advisors and home-office employees.
We believe that it is imperative that our independent broker-dealers possess state-of-the-art technology so their employees and independent financial advisors can effectively transact, facilitate, measure and record business activity in a timely, accurate and efficient manner. By continuing our commitment to provide a highly capable technology platform to process business, we believe our independent broker-dealers can achieve economies of scale and potentially reduce the need to hire additional back-office personnel.
|
•
|
Assist financial advisors to expand their business.
Our independent broker-dealers are aligned with their financial advisors in seeking to increase their revenues and improve efficiency. Each of our broker-dealers undertakes initiatives to assist their financial advisors with client recruitment, education, compliance and product support. Our practice management programs accelerate our advisors' efforts to grow their businesses by providing customized coaching and consulting services, study groups and conferences, educational workshops, publications and web resources and other productivity tools. Our independent broker-dealers also focus on improving back-office support to allow financial advisors more time to focus on serving their clients, rather than attending to administrative matters.
|
•
|
Build recurring revenue.
We have recognized the trend toward increased investment advisory business and are focused on providing fee-based investment advisory services, which may better suit certain clients. While these fee-based accounts generate substantially lower first year revenue than accounts invested in most commission-based products, the recurring nature of these fees provides a platform that generates recurring revenue.
|
•
|
Expand our financial advisor base through recruiting and acquisitions.
Each of our independent broker-dealers actively recruits experienced financial professionals. These efforts are supported by advertising, targeted direct mail and outbound telemarketing. Our independent broker-dealers’ recruitment efforts are enhanced by their ability to serve a variety of independent advisor models, including independent financial advisors, registered investment advisors and independent registered investment advisors. Securities America has developed strong expertise in transitioning large groups of financial advisors as part of transactions whereby the firm acquires certain assets of small broker-dealer firms. Securities America has completed ten such deals since 2008, including two in 2016, and has developed detailed processes, led by a cross-departmental team of more than 25 people, to transition such groups effectively. We anticipate there will continue to be opportunities to acquire groups of financial advisors through transactions of this type, or otherwise, as increasing compliance costs disproportionately impact smaller broker-dealers and the level of services and resources they can provide to their advisors.
|
•
|
Acquire independent brokerage firms and complementary businesses.
We also may pursue the acquisition of other independent brokerage firms and other complementary businesses. Our ability to realize growth through acquisitions depends, among other things, on the availability of suitable candidates and our ability to successfully negotiate favorable terms. There can be no assurance that we will be able to consummate any such acquisitions. Further, the costs associated with the integration of new businesses and personnel may be greater than anticipated.
|
•
|
reviews and analyzes general market conditions and industry groups;
|
•
|
issues written reports on companies;
|
•
|
furnishes information to retail and institutional customers; and
|
•
|
responds to inquiries from customers and account executives.
|
•
|
sales methods and supervision;
|
•
|
trading practices among broker-dealers;
|
•
|
use and safekeeping of customers’ funds and securities;
|
•
|
capital structure of securities firms;
|
•
|
record keeping;
|
•
|
conduct of directors, officers and employees; and
|
•
|
advertising, including regulations related to telephone solicitation.
|
•
|
limitations on the ability of investment advisors to charge clients performance-based or non-refundable fees;
|
•
|
record-keeping and reporting requirements;
|
•
|
disclosure requirements;
|
•
|
limitations on principal transactions between an advisor or its affiliates and advisory clients; and
|
•
|
general anti-fraud prohibitions.
|
•
|
a market downturn could lead to a decline in the volume of transactions executed for customers and, therefore, to a decline in the revenues we receive from commissions and spreads;
|
•
|
low interest rates adversely impact interest sharing revenues received from our clearing firms and other cash sweep programs;
|
•
|
adverse changes in the market could lead to a reduction in revenues from asset management fees. Even in the absence of a market downturn, below-market investment performance by portfolio managers could reduce asset management revenues and assets under management and result in reputational damage that might make it more difficult to attract new investors;
|
•
|
unfavorable financial or economic conditions could reduce the number and size of transactions in which we provide underwriting, financial advisory and other services. Our investment banking revenues, in the form of financial advisory and underwriting or placement fees, are directly related to the number and size of the transactions in which we participate and therefore could be adversely affected by unfavorable financial or economic conditions;
|
•
|
increases in credit spreads, as well as limitations on the availability of credit, can affect our ability to borrow on a secured or unsecured basis, which may adversely affect our liquidity and results of operations;
|
•
|
adverse changes in the market could lead to losses from principal transactions. To the extent that we own assets, i.e., have long positions, a downturn in the market could result in losses from a decline in the value of those long positions. Conversely, to the extent that we have sold assets that we do not own, i.e., have short positions, an upturn in the market could expose us to potentially unlimited losses as we attempt to cover our short positions by acquiring assets in a rising market; and
|
•
|
new or increased taxes on compensation payments such as bonuses or securities transactions may adversely affect our financial results.
|
•
|
requires us to dedicate a substantial portion of cash flows from operations to the payment of debt service and dividends, resulting in less cash available for operations and other purposes; and
|
•
|
limits our ability to obtain additional financing for working capital, regulatory capital requirements, acquisitions or general corporate purposes.
|
•
|
recommending transactions that are not suitable for the client or in the client’s best interests;
|
•
|
engaging in fraudulent or otherwise improper activity;
|
•
|
binding us to transactions that exceed authorized limits;
|
•
|
hiding unauthorized or unsuccessful activities, resulting in unknown and unmanaged risks or losses;
|
•
|
improperly using or disclosing confidential information;
|
•
|
engaging in unauthorized or excessive trading to the detriment of customers;
|
•
|
failure, whether negligent or intentional, to effect securities transactions on behalf of clients;
|
•
|
failure to perform reasonable diligence on a security, product or strategy;
|
•
|
failure to supervise a financial advisor;
|
•
|
failure to provide insurance carriers with complete and accurate information;
|
•
|
engaging in unauthorized or excessive trading to the detriment of clients;
|
•
|
engaging in improper transactions with clients; or
|
•
|
otherwise not complying with laws or our control procedures.
|
•
|
trading counterparties;
|
•
|
customers;
|
•
|
clearing agents;
|
•
|
other broker-dealers;
|
•
|
exchanges;
|
•
|
clearing houses; and
|
•
|
other financial intermediaries as well as issuers whose securities we hold.
|
•
|
holding securities of third parties;
|
•
|
executing securities trades that fail to settle at the required time due to non-delivery by the counterparty or systems failure by clearing agents, exchanges, clearing houses or other financial intermediaries; and
|
•
|
extending credit to clients through bridge or margin loans or other arrangements.
|
•
|
the volatility of domestic and international financial, bond and stock markets;
|
•
|
extensive governmental regulation;
|
•
|
litigation;
|
•
|
intense competition;
|
•
|
poor performance of investment products our advisors recommend or sell;
|
•
|
substantial fluctuations in the volume and price level of securities; and
|
•
|
dependence on the solvency of various third parties.
|
•
|
sales methods and supervision;
|
•
|
trading practices among broker-dealers;
|
•
|
use and safekeeping of customers’ funds and securities;
|
•
|
capital structure of securities firms;
|
•
|
record keeping;
|
•
|
conduct of directors, officers and employees; and
|
•
|
advertising, including regulations related to telephone solicitation.
|
•
|
censure;
|
•
|
fine;
|
•
|
civil penalties, including treble damages in the case of insider trading violations;
|
•
|
the issuance of cease-and-desist orders;
|
•
|
the termination or suspension of our broker-dealer activities;
|
•
|
the suspension or disqualification of our officers, employees or financial advisors; or
|
•
|
other adverse consequences.
|
•
|
variations in quarterly operating results;
|
•
|
general economic and business conditions, including conditions in the securities brokerage and investment banking markets;
|
•
|
prevailing interest rates, increases in which may have an adverse effect on the market price of the Series A Preferred Stock;
|
•
|
trading prices of similar securities;
|
•
|
the annual yield from dividends on the Series A Preferred Stock as compared to yields on other financial instruments;
|
•
|
our announcements of significant contracts, milestones or acquisitions;
|
•
|
our relationships with other companies;
|
•
|
our ability to obtain needed capital;
|
•
|
additions or departures of key personnel;
|
•
|
the initiation or outcome of litigation or arbitration proceedings;
|
•
|
sales of common stock, conversion of securities convertible into common stock, exercise of options and warrants to purchase common stock or termination of stock transfer restrictions;
|
•
|
legislation or regulatory policies, practices or actions;
|
•
|
changes in financial estimates by securities analysts; and
|
•
|
fluctuations in stock market prices and volume.
|
Subsidiary
|
|
Location
|
|
Approximate Square Footage
|
|
Lease Expiration Date
|
Securities America
|
|
La Vista, NE
|
|
81,424
|
|
January 2030
|
Triad
|
|
Norcross, GA
|
|
21,835
|
|
February 2025
|
SSN
|
|
Knoxville, TN
|
|
15,000
|
|
March 2020
(1)
|
Investacorp
|
|
Miami, FL
|
|
11,475
|
|
September 2020
(2)
|
KMS
|
|
Seattle, WA
|
|
8,575
|
|
September 2024
|
Premier Trust
|
|
Las Vegas, NV
|
|
14,455
|
|
September 2019
|
(1)
|
The lessor is Cogdill Capital LLC, an entity of which SSN's CFO and CEO are members.
|
(2)
|
The lessor is Frost Real Estate Holdings, LLC, an entity affiliated with Dr. Phillip Frost, our Chairman of the Board and principal shareholder.
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
|
|
|
2016
|
|
2015
|
||||||||||||
Period
|
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
First Quarter
|
|
$
|
2.72
|
|
|
$
|
1.86
|
|
|
$
|
4.08
|
|
|
$
|
3.80
|
|
Second Quarter
|
|
2.80
|
|
|
2.25
|
|
|
3.97
|
|
|
3.23
|
|
||||
Third Quarter
|
|
2.56
|
|
|
2.07
|
|
|
3.50
|
|
|
1.80
|
|
||||
Fourth Quarter
|
|
2.87
|
|
|
1.63
|
|
|
3.28
|
|
|
2.07
|
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(1)
|
|||||
October 1 to October 31, 2016
|
|
499,297
|
|
|
$
|
2.24
|
|
|
499,297
|
|
|
38,099
|
|
November 1 to November 30, 2016
|
|
38,099
|
|
|
2.04
|
|
|
38,099
|
|
|
10,000,000
|
|
|
December 1 to December 31, 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,000,000
|
|
|
Total
|
|
537,396
|
|
|
$
|
2.22
|
|
|
537,396
|
|
|
|
|
(1)
|
On March 19, 2007, we announced that our board of directors authorized the repurchase of up to 2,500,000 shares of our common stock from time to time on the open market or in privately negotiated transactions depending on market conditions. In October 2011, our board amended this repurchase program to permit the purchase of up to an additional 5,000,000 shares. In November 2014, our board amended this repurchase program to permit the purchase of up to an additional 10,000,000 shares. In November 2016, an amendment to the stock repurchase program was approved to permit the purchase of up to an additional 10,000,000 shares. As of December 31, 2016, 17,500,000 shares had been repurchased for $44,690 under the program and 10,000,000 shares remain available for purchase under the program. Beginning in the fourth quarter of 2015, we adopted a Rule 10b5-1 trading plan to permit the repurchase of common stock pursuant to the existing stock repurchase program during certain restricted trading periods. We intend to execute similar Rule 10b5-1 plans periodically in the future.
|
|
|
Year Ended December 31,
|
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
||||||||||
|
|
(In thousands, except share and per share amounts)
|
|
||||||||||||||||||
Operating Results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total revenues
|
|
$
|
1,106,953
|
|
|
$
|
1,152,118
|
|
|
$
|
921,253
|
|
(1)
|
$
|
793,116
|
|
|
$
|
650,111
|
|
|
Total expenses
|
|
1,119,023
|
|
|
1,163,868
|
|
|
911,259
|
|
|
790,591
|
|
|
672,114
|
|
|
|||||
(Loss) income before item shown below
|
|
(12,070
|
)
|
|
(11,750
|
)
|
|
9,994
|
|
|
2,525
|
|
|
(22,003
|
)
|
|
|||||
Change in fair value of contingent consideration
|
|
(216
|
)
|
|
55
|
|
|
12
|
|
|
(121
|
)
|
|
7,111
|
|
|
|||||
(Loss) income before income taxes
|
|
(12,286
|
)
|
|
(11,695
|
)
|
|
10,006
|
|
|
2,404
|
|
|
(14,892
|
)
|
|
|||||
Net (loss) income
|
|
(22,311
|
)
|
|
(11,213
|
)
|
|
33,352
|
|
|
(522
|
)
|
|
(16,354
|
)
|
|
|||||
Per common and equivalent share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
(Loss) income per common share - basic
|
|
$
|
(0.29
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
0.09
|
|
|
$
|
(0.04
|
)
|
|
$
|
(0.09
|
)
|
|
(Loss) income per common share - diluted
|
|
$
|
(0.29
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.04
|
)
|
|
$
|
(0.09
|
)
|
|
Basic weighted average common shares
|
|
182,987,850
|
|
|
183,660,993
|
|
|
182,768,494
|
|
|
182,295,476
|
|
|
183,572,582
|
|
|
|||||
Diluted weighted average common shares
|
|
182,987,850
|
|
|
183,660,993
|
|
|
206,512,437
|
|
|
182,295,476
|
|
|
183,572,582
|
|
|
|||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total assets
|
|
$
|
546,003
|
|
|
$
|
574,105
|
|
|
$
|
510,758
|
|
|
$
|
360,820
|
|
|
$
|
338,129
|
|
|
Total liabilities
|
|
183,502
|
|
|
198,074
|
|
|
174,287
|
|
|
167,407
|
|
|
286,908
|
|
|
|||||
Shareholders’ equity
|
|
362,474
|
|
|
376,002
|
|
|
336,460
|
|
|
193,361
|
|
|
51,221
|
|
|
|||||
Other Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Book value per common share
|
|
$
|
1.87
|
|
|
$
|
2.06
|
|
|
$
|
1.82
|
|
|
$
|
1.06
|
|
|
$
|
0.28
|
|
|
(1)
|
Includes $26,164 of revenue from Highland (acquired July 31, 2014) and $19,840 of revenue from KMS (acquired October 15, 2014). See Note 3, "Acquisitions," to the consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
|
|
Year Ended December 31,
|
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
||||||
Total revenues
|
|
$
|
1,106,953
|
|
|
$
|
1,152,118
|
|
|
$
|
921,253
|
|
|
Total expenses
|
|
1,119,023
|
|
|
1,163,868
|
|
|
911,259
|
|
|
|||
(Loss) income before income taxes
|
|
(12,286
|
)
|
|
(11,695
|
)
|
|
10,006
|
|
|
|||
Net (loss) income attributable to the Company
|
|
(22,269
|
)
|
|
(11,151
|
)
|
|
33,433
|
|
|
|||
Reconciliation of net income (loss) attributable to the Company to EBITDA:
|
|
|
|
|
|
|
|
||||||
Net (loss) income attributable to the Company
|
|
(22,269
|
)
|
|
(11,151
|
)
|
|
33,433
|
|
|
|||
Less:
|
|
|
|
|
|
|
|
|
|||||
Interest income
|
|
(672
|
)
|
|
(254
|
)
|
|
(245
|
)
|
|
|||
Change in fair value of contingent consideration
|
|
216
|
|
|
(55
|
)
|
|
(12
|
)
|
|
|||
Add:
|
|
|
|
|
|
|
|
|
|||||
Loss on extinguishment of debt
|
|
—
|
|
|
252
|
|
|
548
|
|
|
|||
Interest expense
|
|
4,262
|
|
|
5,169
|
|
|
6,990
|
|
|
|||
Income tax expense (benefit)
|
|
10,025
|
|
|
(482
|
)
|
|
(23,346
|
)
|
|
|||
Depreciation and amortization
|
|
28,334
|
|
|
27,077
|
|
|
18,397
|
|
|
|||
Non-cash compensation expense
|
|
5,311
|
|
|
8,759
|
|
|
10,541
|
|
|
|||
Amortization of retention and forgivable loans
|
|
5,472
|
|
|
9,238
|
|
|
11,041
|
|
|
|||
Financial advisor recruiting expense
|
|
1,882
|
|
|
2,387
|
|
|
1,489
|
|
|
|||
Acquisition-related expense
|
|
1,357
|
|
|
940
|
|
(3)
|
2,342
|
|
|
|||
Other
|
|
1,853
|
|
(1)
|
2,165
|
|
(2)
|
—
|
|
|
|||
EBITDA, as adjusted
|
|
$
|
35,771
|
|
|
$
|
44,045
|
|
|
$
|
61,178
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Independent Brokerage and Advisory Services
(1)
|
$
|
1,003,282
|
|
|
$
|
1,035,365
|
|
|
$
|
816,581
|
|
Ladenburg
|
49,425
|
|
|
61,841
|
|
|
73,298
|
|
|||
Insurance Brokerage
(4)
|
50,483
|
|
|
49,573
|
|
|
26,164
|
|
|||
Corporate
|
3,763
|
|
|
5,339
|
|
|
5,210
|
|
|||
Total revenues
|
$
|
1,106,953
|
|
|
$
|
1,152,118
|
|
|
$
|
921,253
|
|
|
|
|
|
|
|
||||||
Income (loss) before income taxes:
|
|
|
|
|
|
||||||
Independent Brokerage and Advisory Services
(1)
|
15,071
|
|
|
7,735
|
|
|
10,520
|
|
|||
Ladenburg
|
(3,674
|
)
|
|
3,095
|
|
|
14,846
|
|
|||
Insurance Brokerage
(4)
|
(6,074
|
)
|
|
(6,701
|
)
|
|
(841
|
)
|
|||
Corporate
(2)
|
(17,609
|
)
|
|
(15,824
|
)
|
|
(14,519
|
)
|
|||
Total loss before income taxes
|
$
|
(12,286
|
)
|
|
$
|
(11,695
|
)
|
|
$
|
10,006
|
|
|
|
|
|
|
|
||||||
EBITDA, as adjusted
(3)
|
|
|
|
|
|
||||||
Independent Brokerage and Advisory Services
(1)
|
47,977
|
|
|
46,462
|
|
|
50,596
|
|
|||
Ladenburg
|
(1,676
|
)
|
|
6,052
|
|
|
16,174
|
|
|||
Insurance Brokerage
(4)
|
2,255
|
|
|
1,170
|
|
|
2,315
|
|
|||
Corporate
|
(12,785
|
)
|
|
(9,639
|
)
|
|
(7,907
|
)
|
|||
Total EBITDA, as adjusted
|
$
|
35,771
|
|
|
$
|
44,045
|
|
|
$
|
61,178
|
|
(1)
|
Includes KMS from October 15, 2014 and SSN from January 2, 2015.
|
(2)
|
Includes interest expense, compensation, professional fees and other general administrative expenses.
|
(3)
|
See Note 19, "Segment Information," to the consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K for a reconciliation of (loss) income before income taxes to EBITDA, as adjusted.
|
(4)
|
Includes Highland from July 31, 2014.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
||||||
Operating activities
|
|
$
|
14,246
|
|
|
$
|
19,319
|
|
|
$
|
26,855
|
|
Investing activities
|
|
(11,229
|
)
|
|
(28,211
|
)
|
|
(16,613
|
)
|
|||
Financing activities
|
|
(22,764
|
)
|
|
24,482
|
|
|
42,516
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
|
$
|
(19,747
|
)
|
|
$
|
15,590
|
|
|
$
|
52,758
|
|
Cash and cash equivalents, beginning of period
|
|
118,677
|
|
|
103,087
|
|
|
50,329
|
|
|||
Cash and cash equivalents, end of period
|
|
$
|
98,930
|
|
|
$
|
118,677
|
|
|
$
|
103,087
|
|
|
|
Payments Due By Period
|
||||||||||||||||||
|
|
Total
|
|
Less than
1 year
|
|
1 – 3 years
|
|
4 – 5 years
|
|
After 5 years
|
||||||||||
Revolving credit agreement with affiliate of our principal shareholder
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Notes payable to clearing firm under forgivable loans
(2)
|
|
4,675
|
|
|
263
|
|
|
4,412
|
|
|
—
|
|
|
—
|
|
|||||
Operating leases
(3)
|
|
52,536
|
|
|
7,688
|
|
|
13,482
|
|
|
9,673
|
|
|
21,693
|
|
|||||
Deferred compensation plan
(4)
|
|
19,234
|
|
|
800
|
|
|
5,103
|
|
|
4,432
|
|
|
8,899
|
|
|||||
Note payable to bank - Securities America
(5)
|
|
810
|
|
|
583
|
|
|
213
|
|
|
14
|
|
|
—
|
|
|||||
Notes payable to Highland's former shareholders
(6)
|
|
8,362
|
|
|
676
|
|
|
7,686
|
|
|
—
|
|
|
—
|
|
|||||
Notes payable to KMS' former shareholders
(7)
|
|
4,156
|
|
|
2,079
|
|
|
2,077
|
|
|
—
|
|
|
—
|
|
|||||
Notes payable to SSN's former shareholders
(8)
|
|
11,665
|
|
|
5,187
|
|
|
6,478
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
101,438
|
|
|
$
|
17,276
|
|
|
$
|
39,451
|
|
|
$
|
14,119
|
|
|
$
|
30,592
|
|
(1)
|
The revolving credit agreement has an August 25, 2021 maturity date and bears interest at a rate of 11% per annum, payable quarterly. Assumes no payments of principal prior to maturity. See Note 12, "Notes Payable," to the consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K.
|
(2)
|
The 2011 NFS forgivable loan ($4,285 at December 31, 2016) bears interest at the federal funds rate plus 6% per annum and is payable in seven annual installments if not forgiven. See Note 12, "Notes Payable," to the consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K.
|
(3)
|
Excludes sublease revenues of $188. See Note 13, "Commitments and Contingencies," to the consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K.
|
(4)
|
See Note 10, "Deferred Compensation Plan," to the consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K.
|
(5)
|
Note bears interest at 5.5% per annum and is payable in 54 monthly installments. See Note 12, "Notes Payable," to the consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K.
|
(6)
|
Notes bear interest at 10% per annum and mature on February 26, 2019. See Note 12, "Notes Payable," to the consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K.
|
(7)
|
Notes bear interest at 1.84% per annum and are payable in 16 quarterly installments. See Note 12, "Notes Payable," to the consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K.
|
(8)
|
Notes bear interest at 1.74% per annum and are payable in 16 quarterly installments. See Note 12, "Notes Payable," to the consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K.
|
(i)
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
|
(ii)
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
(iii)
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
|
ITEM 11.
|
EXECUTIVE COMPENSATION.
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit No.
|
|
Description
|
|
Incorporated By Reference from Document
|
|
No. in Document
|
2.1
|
|
|
X
|
|
2.2
|
|
2.2
|
|
|
Y
|
|
2.1
|
|
2.3
|
|
|
W
|
|
2.1
|
|
3.1
|
|
|
A
|
|
3.1
|
|
3.2
|
|
|
B
|
|
3.2
|
|
3.3
|
|
|
C
|
|
3.1
|
|
3.4
|
|
|
Q
|
|
3.1
|
|
3.5
|
|
|
R
|
|
3.6
|
|
3.6
|
|
|
S
|
|
3.1
|
|
3.7
|
|
|
T
|
|
3.1
|
|
3.8
|
|
|
V
|
|
3.1
|
|
3.9
|
|
|
Z
|
|
3.1
|
|
3.10
|
|
|
DD
|
|
3.1
|
|
3.11
|
|
|
GG
|
|
3.1
|
|
3.12
|
|
|
D
|
|
3.2
|
4.1
|
|
|
A
|
|
4.1
|
|
4.2
|
|
|
R
|
|
4.1
|
|
4.3
|
|
|
W
|
|
4.1
|
|
4.4
|
|
|
AA
|
|
4.2
|
|
10.1
|
|
|
F
|
|
4.1
|
|
10.2
|
|
|
U
|
|
Exhibit A
|
|
10.3
|
|
|
G
|
|
Appendix A
|
|
10.4
|
|
|
H
|
|
10.1
|
|
10.5
|
|
|
P
|
|
10.1
|
|
10.6
|
|
2nd Amendment to Lease Agreement, dated as of November 15, 2016, between Ladenburg Thalmann & Co. Inc. and Frost Real Estate Holdings, LLC.
|
|
**
|
|
—
|
10.7
|
|
|
I
|
|
10.1
|
|
10.8
|
|
|
BB
|
|
10.2
|
|
10.9
|
|
|
BB
|
|
10.1
|
|
10.10
|
|
|
E
|
|
10.2
|
|
10.11
|
|
|
E
|
|
10.3
|
|
10.12
|
|
|
O
|
|
10.1
|
|
10.13
|
|
|
J
|
|
10.1
|
|
10.14
|
|
|
M
|
|
2.1
|
|
10.15
|
|
|
L
|
|
10.1
|
|
10.16
|
|
|
N
|
|
10.27
|
|
10.17
|
|
|
E
|
|
4.1
|
|
10.18
|
|
|
K
|
|
4.2
|
|
10.19
|
|
|
M
|
|
10.1
|
|
10.20
|
|
|
FF
|
|
10.22
|
|
10.21
|
|
|
K
|
|
4.1
|
10.22
|
|
|
N
|
|
10.32
|
|
10.23
|
|
|
N
|
|
10.33
|
|
10.24
|
|
|
DD
|
|
1.1
|
|
10.25
|
|
|
AA
|
|
10.1
|
|
10.26
|
|
|
CC
|
|
10.4
|
|
10.27
|
|
|
EE
|
|
10.1
|
|
12.1
|
|
Statement re: Computation of Ratios of Earnings to Fixed Charge, and Ratios of Earnings to Combined Fixed Charge and Preferred Stock Dividends*
|
|
**
|
|
|
21
|
|
List of Subsidiaries
|
|
**
|
|
—
|
23.1
|
|
Consent of EisnerAmper LLP
|
|
**
|
|
—
|
24
|
|
Power of Attorney
|
|
***
|
|
—
|
31.1
|
|
Certification of Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
**
|
|
—
|
31.2
|
|
Certification of Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
**
|
|
—
|
32.1
|
|
Certification of Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
****
|
|
—
|
32.2
|
|
Certification of Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
****
|
|
—
|
101.INS
|
|
XBRL Instance Document
|
|
|
**
|
|
—
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
**
|
|
—
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
**
|
|
—
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
**
|
|
—
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
**
|
|
—
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
**
|
|
—
|
|
*
|
Management Compensation Contract
|
|
**
|
Filed herewith
|
|
***
|
Contained on the signature page hereto
|
|
****
|
Furnished herewith
|
|
A.
|
Registration statement on Form SB-2 (File No. 333-31001).
|
|
B.
|
Annual report on Form 10-K for the year ended August 24, 1999.
|
|
C.
|
Quarterly report on Form 10-Q for the quarter ended June 30, 2006.
|
|
D.
|
Current report on Form 8-K, dated September 20, 2007 and filed with the SEC on September 21, 2007.
|
|
E.
|
Current report on Form 8-K, dated October 19, 2007 and filed with the SEC on October 22, 2007.
|
|
F.
|
Registration statement on Form S-8 (File No. 333-139254).
|
|
G.
|
Definitive proxy statement filed with the SEC on August 27, 2012 relating to the annual meeting of shareholders held on September 28, 2012.
|
|
H.
|
Current report on Form 8-K, dated March 30, 2007 and filed with the SEC on April 2, 2007.
|
|
I.
|
Current report on Form 8-K, dated February 26, 2014 and filed with the SEC on February 28, 2014.
|
|
J.
|
Current report on Form 8-K, dated March 27, 2008 and filed with the SEC on March 28, 2008.
|
|
K.
|
Quarterly report on Form 10-Q for the quarter ended September 30, 2009.
|
|
L.
|
Current report on Form 8-K, dated August 10, 2010 and filed with the SEC on August 13, 2010.
|
|
M.
|
Current report on Form 8-K, dated August 16, 2011 and filed with the SEC on August 18, 2011.
|
|
N.
|
Annual report on Form 10-K, for the year ended December 31, 2011.
|
|
|
|
|
O.
|
Current Report on Form 8-K, dated January 30, 2013 and filed with the SEC on February 4, 2013.
|
|
|
|
|
P.
|
Current Report on Form 8-K, dated March 8, 2013 and filed with the SEC on March 8, 2013.
|
|
|
|
|
Q.
|
Current Report on Form 8-K, dated May 9, 2013 and filed with the SEC on May 15, 2013.
|
|
|
|
|
R.
|
Registration Statement on Form 8-A, filed with the SEC on May 24, 2013.
|
|
|
|
|
S.
|
Current Report on Form 8-K, dated June 24, 2013 and filed with the SEC on June 25, 2013.
|
|
T.
|
Current Report on Form 8-K, dated June 12, 2014 and filed with the SEC on June 13, 2014.
|
|
U.
|
Definitive proxy statement filed with the SEC on May 19, 2014 relating to the annual meeting of shareholders held on June 25, 2014.
|
|
V.
|
Current report on Form 8-K, dated June 25, 2014 and filed with the SEC on June 27, 2014.
|
|
W.
|
Current Report on Form 8-K, dated October 15, 2014 and filed with the SEC on October 16, 2014.
|
|
X.
|
Quarterly Report on Form 10-Q for the quarter ended September 30, 2014.
|
|
Y.
|
Current Report on Form 8-K, dated November 14, 2014 and filed with the SEC on November 20, 2014.
|
|
Z.
|
Current Report on Form 8-K, dated November 21, 2014 and filed with the SEC on November 21, 2014.
|
|
AA.
|
Current Report on Form 8-K, dated January 2, 2015 and filed with the SEC on January 6, 2015.
|
|
BB.
|
Current Report on Form 8-K, dated January 20, 2015 and filed with the SEC on January 23, 2015.
|
|
CC.
|
Quarterly Report on Form 10-Q for the quarter ended March 31, 2015.
|
|
DD.
|
Current Report on Form 8-K, dated May 22, 2015 and filed with the SEC on May 22, 2015.
|
|
EE.
|
Current Report on Form 8-K, dated February 22, 2016 and filed with the SEC on February 26, 2016.
|
|
FF.
|
Annual report on Form 10-K, for the year ended December 31, 2015.
|
|
GG.
|
Current Report on Form 8-K, dated May 18, 2016 and filed with the SEC on May 20, 2016.
|
|
|
|
|
LADENBURG THALMANN FINANCIAL SERVICES INC.
|
|
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
Dated: March 15, 2017
|
|
|
|
|
|
|
By:
|
/s/ Brett H. Kaufman
|
|
|
|
|
|
|
Name: Brett H. Kaufman
|
|
|
|
|
|
|
Title: Senior Vice President and Chief Financial Officer
|
|
|
|
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
Signatures
|
|
Title
|
/s/ Richard J. Lampen
Richard J. Lampen
|
|
President, Chief Executive Officer and Director
(Principal Executive Officer)
|
/s/ Brett H. Kaufman
Brett H. Kaufman
|
|
Senior Vice President and Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
|
/s/ Henry C. Beinstein
Henry C. Beinstein
|
|
Director
|
/s/ Phillip Frost, M.D.
Phillip Frost, M.D.
|
|
Director
|
/s/ Brian S. Genson
Brian S. Genson
|
|
Director
|
/s/ Saul Gilinski
Saul Gilinski
|
|
Director
|
/s/ Dr. Richard M. Krasno
Dr. Richard M. Krasno
|
|
Director
|
/s/ Howard M. Lorber
Howard M. Lorber
|
|
Director
|
/s/ Jeffrey S. Podell
Jeffrey S. Podell
|
|
Director
|
/s/ Jacqueline M. Simkin
Jacqueline M. Simkin
|
|
Director
|
/s/ Mark Zeitchick
Mark Zeitchick
|
|
Director
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
ASSETS
|
|
|
|
||||
|
|
|
|
||||
Cash and cash equivalents
|
$
|
98,930
|
|
|
$
|
118,677
|
|
Securities owned, at fair value
|
3,543
|
|
|
4,079
|
|
||
Receivables from clearing brokers
|
41,492
|
|
|
44,466
|
|
||
Receivables from other broker-dealers
|
853
|
|
|
2,150
|
|
||
Notes receivable from financial advisors, net
|
32,611
|
|
|
26,967
|
|
||
Other receivables, net
|
54,634
|
|
|
48,564
|
|
||
Fixed assets, net
|
21,253
|
|
|
21,753
|
|
||
Restricted assets
|
1,011
|
|
|
1,011
|
|
||
Intangible assets, net
|
124,938
|
|
|
137,931
|
|
||
Goodwill
|
124,031
|
|
|
125,572
|
|
||
Cash surrender value of life insurance
|
10,210
|
|
|
9,247
|
|
||
Other assets
|
32,497
|
|
|
33,688
|
|
||
|
|
|
|
||||
Total assets
|
$
|
546,003
|
|
|
$
|
574,105
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
|
|
|
|
||||
Securities sold, but not yet purchased, at fair value
|
$
|
382
|
|
|
$
|
238
|
|
Accrued compensation
|
26,299
|
|
|
29,115
|
|
||
Commissions and fees payable
|
60,594
|
|
|
59,995
|
|
||
Accounts payable and accrued liabilities
|
39,876
|
|
|
30,804
|
|
||
Deferred rent
|
1,764
|
|
|
1,551
|
|
||
Deferred income taxes
|
10,642
|
|
|
4,416
|
|
||
Deferred compensation liability
|
17,247
|
|
|
17,211
|
|
||
Accrued interest
|
281
|
|
|
823
|
|
||
Notes payable, net of $872 and $1,492 unamortized discount in 2016 and 2015, respectively and net of debt issuance costs of $0 and $253 in 2016 and 2015, respectively.
|
26,417
|
|
|
53,921
|
|
||
Total liabilities
|
183,502
|
|
|
198,074
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 13)
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, $.0001 par value; authorized 50,000,000 shares in 2016 and 25,000,000 shares in 2015: 8% Series A cumulative redeemable preferred stock; authorized 17,290,000 shares in 2016 and 2015; shares issued and outstanding 15,844,916 in 2016 and 14,683,021 in 2015 (liquidation preference $396,123 in 2016 and $367,076 in 2015)
|
1
|
|
|
1
|
|
||
Common stock, $.0001 par value; authorized 1,000,000,000 shares in 2016 and 800,000,000 shares in 2015; shares issued and outstanding, 194,057,738 in 2016 and 182,338,038 in 2015
|
19
|
|
|
19
|
|
||
Additional paid-in capital
|
519,879
|
|
|
511,138
|
|
||
Accumulated deficit
|
(157,425
|
)
|
|
(135,156
|
)
|
||
|
|
|
|
||||
Total shareholders’ equity of the Company
|
362,474
|
|
|
376,002
|
|
||
|
|
|
|
||||
Noncontrolling interest
|
27
|
|
|
29
|
|
||
|
|
|
|
||||
Total shareholders' equity
|
362,501
|
|
|
376,031
|
|
||
|
|
|
|
||||
Total liabilities and shareholders' equity
|
$
|
546,003
|
|
|
$
|
574,105
|
|
|
|
Year Ended December 31,
|
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
||||||
Revenues:
|
|
|
|
|
|
|
|
||||||
Commissions
|
|
$
|
512,001
|
|
|
$
|
558,683
|
|
|
$
|
445,734
|
|
|
Advisory fees
|
|
463,602
|
|
|
462,087
|
|
|
343,212
|
|
|
|||
Investment banking
|
|
25,453
|
|
|
35,145
|
|
|
46,998
|
|
|
|||
Principal transactions
|
|
747
|
|
|
602
|
|
|
1,938
|
|
|
|||
Interest and dividends
|
|
10,256
|
|
|
3,842
|
|
|
6,209
|
|
|
|||
Service fees and other income
|
|
94,894
|
|
|
91,759
|
|
|
77,162
|
|
|
|||
Total revenues
|
|
1,106,953
|
|
|
1,152,118
|
|
|
921,253
|
|
|
|||
Expenses:
|
|
|
|
|
|
|
|
||||||
Commissions and fees
|
|
818,000
|
|
|
857,842
|
|
|
662,178
|
|
|
|||
Compensation and benefits
|
|
152,592
|
|
|
149,786
|
|
|
120,231
|
|
|
|||
Non-cash compensation
|
|
5,311
|
|
|
8,759
|
|
|
10,541
|
|
|
|||
Brokerage, communication and clearance fees
|
|
15,719
|
|
|
20,727
|
|
|
17,900
|
|
|
|||
Rent and occupancy, net of sublease revenue
|
|
9,673
|
|
|
9,797
|
|
|
7,040
|
|
|
|||
Professional services
|
|
14,940
|
|
|
14,156
|
|
|
11,040
|
|
|
|||
Interest
|
|
4,262
|
|
|
5,169
|
|
|
6,990
|
|
|
|||
Depreciation and amortization
|
|
28,334
|
|
|
27,077
|
|
|
18,397
|
|
|
|||
Acquisition-related expenses
|
|
1,357
|
|
|
940
|
|
|
2,342
|
|
|
|||
Loss on extinguishment of debt
|
|
—
|
|
|
252
|
|
|
548
|
|
|
|||
Amortization of retention and forgivable loans
|
|
5,472
|
|
|
9,238
|
|
|
11,041
|
|
|
|||
Other
|
|
63,363
|
|
|
60,125
|
|
|
43,011
|
|
|
|||
Total expenses
|
|
1,119,023
|
|
|
1,163,868
|
|
|
911,259
|
|
|
|||
(Loss) income before item shown below
|
|
(12,070
|
)
|
|
(11,750
|
)
|
|
9,994
|
|
|
|||
Change in fair value of contingent consideration
|
|
(216
|
)
|
|
55
|
|
|
12
|
|
|
|||
(Loss) income before income taxes
|
|
(12,286
|
)
|
|
(11,695
|
)
|
|
10,006
|
|
|
|||
Income tax expense (benefit)
|
|
10,025
|
|
|
(482
|
)
|
|
(23,346
|
)
|
|
|||
Net (loss) income
|
|
(22,311
|
)
|
|
(11,213
|
)
|
|
33,352
|
|
|
|||
Net loss attributable to noncontrolling interest
|
|
(42
|
)
|
|
(62
|
)
|
|
(81
|
)
|
|
|||
Net (loss) income attributable to the Company
|
|
$
|
(22,269
|
)
|
|
$
|
(11,151
|
)
|
|
$
|
33,433
|
|
|
Dividends declared on preferred stock
|
|
(30,438
|
)
|
|
(28,108
|
)
|
|
(17,244
|
)
|
|
|||
Net (loss) income available to common shareholders
|
|
$
|
(52,707
|
)
|
|
$
|
(39,259
|
)
|
|
$
|
16,189
|
|
|
Net (loss) income per share available to common shareholders (basic)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
0.09
|
|
|
Net (loss) income per share available to common shareholders (diluted)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
||||||
Weighted average common shares used in computation of per share data:
|
|
|
|
|
|
|
|
||||||
Basic
|
|
182,987,850
|
|
|
183,660,993
|
|
|
182,768,494
|
|
|
|||
Diluted
|
|
182,987,850
|
|
|
183,660,993
|
|
|
206,512,437
|
|
|
|
Preferred Stock
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Noncontrolling Interest
|
|
Total
|
|||||||||||||||
Balance - December 31, 2013
|
6,189,497
|
|
|
$
|
1
|
|
|
181,433,815
|
|
|
$
|
18
|
|
|
$
|
350,780
|
|
|
$
|
(157,438
|
)
|
|
$
|
52
|
|
|
$
|
193,413
|
|
|
Issuance of common stock under employee stock purchase plan
|
—
|
|
|
—
|
|
|
89,581
|
|
|
—
|
|
|
291
|
|
|
—
|
|
|
—
|
|
|
291
|
|
|||||||
Exercise of stock options (net of 43,535 shares tendered in payment of exercise price)
|
—
|
|
|
—
|
|
|
2,282,060
|
|
|
—
|
|
|
2,969
|
|
|
—
|
|
|
—
|
|
|
2,969
|
|
|||||||
Exercise of warrants
|
—
|
|
|
—
|
|
|
13,333
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
|
|
|
22
|
|
|||||||
Stock-based compensation to consultants and independent financial advisors
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,440
|
|
|
—
|
|
|
—
|
|
|
6,440
|
|
|||||||
Stock-based compensation to employees
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,099
|
|
|
—
|
|
|
—
|
|
|
4,099
|
|
|||||||
Issuance of restricted stock
|
—
|
|
|
—
|
|
|
14,409
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||||
Repurchase and retirement of common stock
|
—
|
|
|
—
|
|
|
(2,846,395
|
)
|
|
—
|
|
|
(9,535
|
)
|
|
—
|
|
|
—
|
|
|
(9,535
|
)
|
|||||||
Third party investment in noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
40
|
|
|||||||
Common stock issued in Highland acquisition
|
—
|
|
|
—
|
|
|
2,540,762
|
|
|
—
|
|
|
7,953
|
|
|
—
|
|
|
—
|
|
|
7,953
|
|
|||||||
Common stock issued in KMS acquisition
|
—
|
|
—
|
|
—
|
|
|
1,440,922
|
|
|
—
|
|
|
6,052
|
|
|
—
|
|
|
—
|
|
|
6,052
|
|
||||||
Preferred stock issued, net of underwriting discount and expenses of $2,531
|
4,906,734
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
108,617
|
|
|
—
|
|
|
—
|
|
|
108,617
|
|
|||||||
Preferred stock dividends declared and paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,244
|
)
|
|
—
|
|
|
—
|
|
|
(17,244
|
)
|
|||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33,433
|
|
|
(81
|
)
|
|
33,352
|
|
|||||||
Balance - December 31, 2014
|
11,096,231
|
|
|
$
|
1
|
|
|
184,968,487
|
|
|
$
|
18
|
|
|
$
|
460,446
|
|
|
$
|
(124,005
|
)
|
|
$
|
11
|
|
|
$
|
336,471
|
|
|
Issuance of common stock under employee stock purchase plan
|
—
|
|
|
—
|
|
|
192,978
|
|
|
—
|
|
|
545
|
|
|
—
|
|
|
|
|
545
|
|
||||||||
Exercise of stock options
|
—
|
|
|
—
|
|
|
1,194,425
|
|
|
—
|
|
|
1,471
|
|
|
—
|
|
|
—
|
|
|
1,471
|
|
|||||||
Exercise of warrants, net of 196,518 shares tendered in payment of exercise price
|
—
|
|
|
—
|
|
|
449,482
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Preferred Stock
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Noncontrolling Interest
|
|
Total
|
|||||||||||||||
Stock-based compensation to consultants and independent financial advisors
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,183
|
|
|
—
|
|
|
—
|
|
|
3,183
|
|
|||||||
Stock-based compensation to employees
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,576
|
|
|
—
|
|
|
—
|
|
|
5,576
|
|
|||||||
Issuance of restricted stock
|
—
|
|
|
—
|
|
|
1,206,081
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Repurchase and retirement of common stock
|
—
|
|
|
—
|
|
|
(5,673,415
|
)
|
|
—
|
|
|
(16,355
|
)
|
|
—
|
|
|
—
|
|
|
(16,355
|
)
|
|||||||
Third party investment in noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80
|
|
|
80
|
|
|||||||
Preferred stock issued, net of underwriting discount and expense of $1,972
|
3,586,790
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
84,380
|
|
|
—
|
|
|
—
|
|
|
84,380
|
|
|||||||
Preferred stock dividends declared and paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28,108
|
)
|
|
—
|
|
|
—
|
|
|
(28,108
|
)
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,151
|
)
|
|
(62
|
)
|
|
(11,213
|
)
|
|||||||
Balance - December 31, 2015
|
14,683,021
|
|
|
$
|
1
|
|
|
182,338,038
|
|
|
$
|
19
|
|
|
$
|
511,138
|
|
|
$
|
(135,156
|
)
|
|
$
|
29
|
|
|
$
|
376,031
|
|
|
Issuance of common stock under employee stock purchase plan
|
—
|
|
|
—
|
|
|
210,330
|
|
|
—
|
|
|
481
|
|
|
—
|
|
|
—
|
|
|
481
|
|
|||||||
Exercise of stock options (net of 1,129,195 shares tendered in payment of exercise price)
|
—
|
|
|
—
|
|
|
3,920,950
|
|
|
—
|
|
|
2,580
|
|
|
—
|
|
|
—
|
|
|
2,580
|
|
|||||||
Exercise of warrants, net of 846,789 shares tendered in payment of exercise price
|
—
|
|
|
—
|
|
|
12,389,544
|
|
|
—
|
|
|
17,976
|
|
|
—
|
|
|
—
|
|
|
17,976
|
|
|||||||
Stock-based compensation to consultants and independent financial advisors
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
50
|
|
|||||||
Stock-based compensation to employees
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,261
|
|
|
—
|
|
|
—
|
|
|
5,261
|
|
|||||||
Issuance of restricted stock
|
—
|
|
|
—
|
|
|
1,331,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Repurchase and retirement of common stock, including 901,691 shares surrendered for tax withholding of $2,038
|
—
|
|
|
—
|
|
|
(6,132,124
|
)
|
|
—
|
|
|
(14,749
|
)
|
|
—
|
|
|
—
|
|
|
(14,749
|
)
|
|
Preferred Stock
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Noncontrolling Interest
|
|
Total
|
|||||||||||||||
Third party investment in noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
40
|
|
|||||||
Preferred stock issued, net of underwriting discount and expense of $723
|
1,161,895
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,580
|
|
|
—
|
|
|
—
|
|
|
27,580
|
|
|||||||
Preferred stock dividends declared and paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30,438
|
)
|
|
—
|
|
|
—
|
|
|
(30,438
|
)
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,269
|
)
|
|
(42
|
)
|
|
(22,311
|
)
|
|||||||
Balance - December 31, 2016
|
15,844,916
|
|
|
$
|
1
|
|
|
194,057,738
|
|
|
$
|
19
|
|
|
$
|
519,879
|
|
|
$
|
(157,425
|
)
|
|
$
|
27
|
|
|
$
|
362,501
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net (loss) income
|
$
|
(22,311
|
)
|
|
$
|
(11,213
|
)
|
|
$
|
33,352
|
|
Adjustments to reconcile net (loss) income to
|
|
|
|
|
|
||||||
net cash provided by operating activities:
|
|
|
|
|
|
||||||
Change in fair value of contingent consideration
|
216
|
|
|
(55
|
)
|
|
(12
|
)
|
|||
Adjustment to deferred rent
|
213
|
|
|
37
|
|
|
(357
|
)
|
|||
Amortization of intangible assets
|
20,703
|
|
|
20,650
|
|
|
14,056
|
|
|||
Depreciation and other amortization
|
7,631
|
|
|
6,427
|
|
|
4,341
|
|
|||
Loss on extinguishment of debt
|
—
|
|
|
252
|
|
|
548
|
|
|||
Amortization of debt discount
|
620
|
|
|
666
|
|
|
501
|
|
|||
Amortization of debt issue cost
|
253
|
|
|
376
|
|
|
393
|
|
|||
Amortization of retention and forgivable loans
|
5,472
|
|
|
9,238
|
|
|
11,041
|
|
|||
Deferred income taxes
|
9,096
|
|
|
(400
|
)
|
|
(25,521
|
)
|
|||
Benefit attributable to reduction of goodwill
|
—
|
|
|
78
|
|
|
68
|
|
|||
Non-cash interest expense on forgivable loan
|
43
|
|
|
21
|
|
|
98
|
|
|||
Gain on forgiveness of accrued interest under forgivable loans
|
(408
|
)
|
|
(619
|
)
|
|
(839
|
)
|
|||
Gain on forgiveness of principal of note payable under forgivable loans
|
(2,143
|
)
|
|
(3,928
|
)
|
|
(3,929
|
)
|
|||
Non-cash compensation expense
|
5,311
|
|
|
8,759
|
|
|
10,541
|
|
|||
Loss on write-off of receivable from subtenant
|
—
|
|
|
855
|
|
|
—
|
|
|||
Loss on write-off of furniture, fixtures and leasehold improvements, net
|
1
|
|
|
9
|
|
|
9
|
|
|||
|
|
|
|
|
|
||||||
(Increase) decrease in operating assets, net of effects of acquisitions:
|
|
|
|
|
|
||||||
Securities owned, at fair value
|
536
|
|
|
1,989
|
|
|
(522
|
)
|
|||
Receivables from clearing brokers
|
2,974
|
|
|
(5,076
|
)
|
|
(5,907
|
)
|
|||
Receivables from other broker-dealers
|
1,297
|
|
|
(362
|
)
|
|
338
|
|
|||
Other receivables, net
|
(6,070
|
)
|
|
19
|
|
|
(7,014
|
)
|
|||
Notes receivable from financial advisors, net
|
(11,116
|
)
|
|
(9,828
|
)
|
|
(5,442
|
)
|
|||
Cash surrender value of life insurance
|
(963
|
)
|
|
1,172
|
|
|
1,951
|
|
|||
Other assets
|
1,191
|
|
|
(5,381
|
)
|
|
(39
|
)
|
|||
|
|
|
|
|
|
||||||
Increase (decrease) in operating liabilities, net of effects of acquisitions:
|
|
|
|
|
|
||||||
Securities sold, but not yet purchased, at fair value
|
144
|
|
|
8
|
|
|
147
|
|
|||
Accrued compensation
|
(2,816
|
)
|
|
5,632
|
|
|
(803
|
)
|
|||
Accrued interest
|
(177
|
)
|
|
292
|
|
|
102
|
|
|||
Commissions and fees payable
|
599
|
|
|
2,139
|
|
|
8,272
|
|
|||
Deferred compensation liability
|
36
|
|
|
(429
|
)
|
|
(2,003
|
)
|
|||
Accounts payable and accrued liabilities
|
3,914
|
|
|
(2,009
|
)
|
|
(6,515
|
)
|
|||
Net cash provided by operating activities
|
14,246
|
|
|
19,319
|
|
|
26,855
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Acquisition of SSN, net of cash received
|
—
|
|
|
(16,919
|
)
|
|
—
|
|
|||
Acquisition of Highland, net of cash received
|
—
|
|
|
—
|
|
|
(3,353
|
)
|
|||
Acquisition of KMS, net of cash received
|
—
|
|
|
—
|
|
|
(4,292
|
)
|
|||
Other business acquisitions
|
(4,097
|
)
|
|
(2,603
|
)
|
|
(1,621
|
)
|
|||
Purchases of fixed assets
|
(7,132
|
)
|
|
(8,298
|
)
|
|
(7,447
|
)
|
|||
(Increase) decrease in restricted assets
|
—
|
|
|
(391
|
)
|
|
100
|
|
|||
Net cash used in investing activities
|
(11,229
|
)
|
|
(28,211
|
)
|
|
(16,613
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Issuance of Series A preferred stock
|
27,580
|
|
|
84,380
|
|
|
108,617
|
|
|||
Issuance of common stock
|
3,061
|
|
|
2,016
|
|
|
3,282
|
|
|||
Series A preferred stock dividends paid
|
(30,438
|
)
|
|
(28,108
|
)
|
|
(17,244
|
)
|
|||
Repurchases of common stock
|
(14,749
|
)
|
|
(16,355
|
)
|
|
(9,535
|
)
|
|||
Principal repayments on notes payable including, in 2014, repayment of $21,834 of Highland's assumed debt
|
(7,516
|
)
|
|
(17,639
|
)
|
|
(42,369
|
)
|
|||
Principal borrowings (repayments) under a revolving credit facility, net
|
(114
|
)
|
|
495
|
|
|
(275
|
)
|
|||
Term loan repayments
|
(628
|
)
|
|
(387
|
)
|
|
—
|
|
|||
Third party investment in subsidiary
|
40
|
|
|
80
|
|
|
40
|
|
|||
Net cash (used in) provided by financing activities
|
(22,764
|
)
|
|
24,482
|
|
|
42,516
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
(19,747
|
)
|
|
15,590
|
|
|
52,758
|
|
|||
Cash and cash equivalents, beginning of period
|
118,677
|
|
|
103,087
|
|
|
50,329
|
|
|||
Cash and cash equivalents, end of period
|
$
|
98,930
|
|
|
$
|
118,677
|
|
|
$
|
103,087
|
|
|
|
|
|
|
|
||||||
Supplemental cash flow information:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
3,523
|
|
|
$
|
3,807
|
|
|
$
|
5,920
|
|
Taxes paid
|
1,036
|
|
|
2,313
|
|
|
2,554
|
|
|||
|
|
|
|
|
|
||||||
Acquisition of Sunset:
|
|
|
|
|
|
||||||
Assets acquired
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,380
|
|
Liabilities assumed
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net assets acquired
|
—
|
|
|
—
|
|
|
4,380
|
|
|||
Payable to seller
|
—
|
|
|
—
|
|
|
(2,759
|
)
|
|||
Net cash paid in acquisition
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,621
|
|
Acquisition of Highland:
|
|
|
|
|
|
||||||
Assets acquired
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
65,882
|
|
Liabilities assumed
|
—
|
|
|
—
|
|
|
(54,316
|
)
|
|||
Net assets acquired
|
—
|
|
|
—
|
|
|
11,566
|
|
|||
Stock issued in acquisition
|
—
|
|
|
—
|
|
|
(7,953
|
)
|
|||
Cash paid in acquisition
|
—
|
|
|
—
|
|
|
3,613
|
|
|||
Cash acquired in acquisition
|
—
|
|
|
—
|
|
|
(260
|
)
|
|||
Net cash paid in acquisition
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,353
|
|
Acquisition of KMS:
|
|
|
|
|
|
||||||
Assets acquired
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
39,844
|
|
Liabilities assumed
|
—
|
|
|
—
|
|
|
(15,284
|
)
|
|||
Net assets acquired
|
—
|
|
|
—
|
|
|
24,560
|
|
|||
Stock issued in acquisition
|
—
|
|
|
—
|
|
|
(6,052
|
)
|
|||
Promissory note
|
—
|
|
|
—
|
|
|
(7,508
|
)
|
|||
Cash paid in acquisition
|
—
|
|
|
—
|
|
|
11,000
|
|
|||
Cash acquired in acquisition
|
—
|
|
|
—
|
|
|
(6,708
|
)
|
|||
Net cash paid in acquisition
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,292
|
|
Acquisition of SSN:
|
|
|
|
|
|
||||||
Assets acquired
|
$
|
—
|
|
|
$
|
61,759
|
|
|
$
|
—
|
|
Liabilities assumed
|
—
|
|
|
(14,472
|
)
|
|
—
|
|
|||
Net assets acquired
|
—
|
|
|
47,287
|
|
|
—
|
|
|||
Due to selling shareholders
|
—
|
|
|
(3,590
|
)
|
|
—
|
|
|||
Promissory note
|
—
|
|
|
(18,697
|
)
|
|
—
|
|
|||
Cash paid in acquisition
|
—
|
|
|
25,000
|
|
|
—
|
|
|||
Cash acquired in acquisition
|
—
|
|
|
(8,081
|
)
|
|
—
|
|
|||
Net cash paid in acquisition
|
$
|
—
|
|
|
$
|
16,919
|
|
|
$
|
—
|
|
Acquisition of Dalton:
|
|
|
|
|
|
||||||
Assets acquired
|
$
|
—
|
|
|
$
|
2,689
|
|
|
$
|
—
|
|
Payable to seller
|
—
|
|
|
(589
|
)
|
|
—
|
|
|||
Net cash paid in acquisition
|
$
|
—
|
|
|
$
|
2,100
|
|
|
$
|
—
|
|
Acquisition of Select:
|
|
|
|
|
|
||||||
Assets acquired
|
$
|
—
|
|
|
$
|
2,019
|
|
|
$
|
—
|
|
Payable to seller
|
—
|
|
|
(1,516
|
)
|
|
—
|
|
|||
Net cash paid in acquisition
|
$
|
—
|
|
|
$
|
503
|
|
|
$
|
—
|
|
Acquisition of Wall Street Financial Group:
|
|
|
|
|
|
||||||
Assets acquired
|
$
|
3,468
|
|
|
—
|
|
|
—
|
|
||
Payable to seller
|
(2,276
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash paid in acquisition
|
$
|
1,192
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Acquisition of Foothill Securities Inc:
|
|
|
|
|
|
||||||
Assets acquired
|
$
|
5,571
|
|
|
—
|
|
|
—
|
|
||
Payable to seller
|
(2,666
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash paid in acquisition
|
$
|
2,905
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Non-cash financing activities:
|
|
|
|
|
|
||||||
Cancellation of promissory notes as consideration for exercise price of warrants
|
$
|
17,976
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash
|
$
|
8,081
|
|
|
Securities owned, at fair value
|
158
|
|
|
|
Receivables from clearing broker
|
630
|
|
|
|
Other receivables, net
|
11,711
|
|
(2)
|
|
Fixed assets, net
|
57
|
|
|
|
Notes receivable
|
225
|
|
|
|
Identifiable intangible assets
|
30,901
|
|
|
|
Goodwill
|
9,282
|
|
(1)
|
|
Other assets
|
714
|
|
|
|
Total assets acquired
|
61,759
|
|
|
|
Commissions and fees payable
|
(12,562
|
)
|
(2)
|
|
Deferred income
|
(44
|
)
|
|
|
Accounts payable and accrued liabilities
|
(1,866
|
)
|
(1)
|
|
Total liabilities assumed
|
(14,472
|
)
|
|
|
Total purchase price
|
$
|
47,287
|
|
|
|
|
|
Estimated Useful Life
|
|||
(years)
|
||||||
Relationships with financial advisors
|
$
|
26,654
|
|
|
|
20
|
Technology
|
2,080
|
|
|
|
12.5
|
|
Trade name
|
1,756
|
|
|
|
9
|
|
Non-compete agreements
|
411
|
|
|
|
3
|
|
Total identifiable intangible assets
|
$
|
30,901
|
|
|
|
|
Cash
|
$
|
6,708
|
|
Securities owned, at fair value
|
599
|
|
|
Receivables from clearing broker
|
1,462
|
|
|
Other receivables, net
|
2,101
|
|
|
Fixed assets, net
|
192
|
|
|
Restricted assets
|
150
|
|
|
Identifiable intangible assets
|
10,859
|
|
|
Goodwill
|
13,269
|
|
|
Other assets
|
4,504
|
|
|
Total assets acquired
|
39,844
|
|
|
Accrued compensation
|
(826
|
)
|
|
Commissions and fees payable
|
(2,772
|
)
|
|
Deferred compensation liability
|
(587
|
)
|
|
Notes payable
|
(600
|
)
|
|
Accounts payable and accrued liabilities
|
(6,516
|
)
|
|
Deferred taxes payable
|
(3,983
|
)
|
|
Total liabilities assumed
|
(15,284
|
)
|
|
Total purchase price
|
$
|
24,560
|
|
|
|
|
Estimated Useful Life
|
|||
(years)
|
||||||
Relationships with financial advisors
|
$
|
9,192
|
|
|
|
20
|
Trade names
|
1,112
|
|
|
|
9
|
|
Non-compete agreements
|
555
|
|
|
|
5
|
|
Total identifiable intangible assets
|
$
|
10,859
|
|
|
|
|
Cash
|
$
|
260
|
|
Receivables
|
6,070
|
|
|
Identifiable intangible assets
|
45,587
|
|
|
Goodwill
|
11,515
|
|
|
Other assets
|
2,450
|
|
|
Total assets acquired
|
65,882
|
|
|
Commissions and fees payable
|
(1,450
|
)
|
|
Notes payable-current
|
(21,834
|
)
|
|
Notes payable-long term
|
(7,000
|
)
|
|
Accounts payable and accrued liabilities
|
(6,777
|
)
|
|
Deferred taxes payable, net
|
(17,255
|
)
|
|
Total liabilities assumed
|
(54,316
|
)
|
|
Total purchase price
|
$
|
11,566
|
|
|
|
|
Estimated Useful Life
|
|||
(years)
|
||||||
Technology
|
$
|
949
|
|
|
|
4
|
Renewals revenue
|
39,503
|
|
|
|
8
|
|
Trade names
|
2,864
|
|
|
|
9
|
|
Non-solicitation agreement
|
2,271
|
|
|
|
3
|
|
Total identifiable intangible assets
|
$
|
45,587
|
|
|
|
|
|
|
Year Ended December 31,
|
|||
|
|
2014
|
|
||
Revenue
|
|
$
|
1,130,420
|
|
|
Net income
|
|
12,754
|
|
|
|
Net loss available to common shareholders
|
|
(4,409
|
)
|
|
|
Basic and diluted net loss per share available to common shareholders
|
|
(0.02
|
)
|
|
|
Weighted average common shares outstanding:
|
|
|
|
||
Basic and diluted
(1)
|
|
185,370,262
|
|
|
|
|
December 31, 2016
|
||||||||||||||
Assets
|
|
Carrying Value
|
|
Level 1
|
|
Level 2
|
|
Total Estimated Fair Value
|
||||||||
Cash and cash equivalents
|
|
$
|
98,930
|
|
|
$
|
98,930
|
|
|
$
|
—
|
|
|
$
|
98,930
|
|
Receivables from clearing brokers
|
|
41,492
|
|
|
—
|
|
|
41,492
|
|
|
41,492
|
|
||||
Receivables from other broker-dealers
|
|
853
|
|
|
—
|
|
|
853
|
|
|
853
|
|
||||
Notes receivables, net
(1)
|
|
32,611
|
|
|
—
|
|
|
32,611
|
|
|
32,611
|
|
||||
Other receivables, net
|
|
54,634
|
|
|
—
|
|
|
54,634
|
|
|
54,634
|
|
||||
|
|
$
|
228,520
|
|
|
$
|
98,930
|
|
|
$
|
129,590
|
|
|
$
|
228,520
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Accrued compensation
|
|
$
|
26,299
|
|
|
$
|
—
|
|
|
$
|
26,299
|
|
|
$
|
26,299
|
|
Commissions and fees payable
|
|
60,594
|
|
|
—
|
|
|
60,594
|
|
|
60,594
|
|
||||
Accounts payable and accrued liabilities
(2)
|
|
32,732
|
|
|
—
|
|
|
32,732
|
|
|
32,732
|
|
||||
Accrued interest
|
|
281
|
|
|
—
|
|
|
281
|
|
|
281
|
|
||||
Notes payable, net
(3)
|
|
26,417
|
|
|
—
|
|
|
24,494
|
|
|
24,494
|
|
||||
|
|
$
|
146,323
|
|
|
$
|
—
|
|
|
$
|
144,400
|
|
|
$
|
144,400
|
|
|
|
December 31, 2015
|
||||||||||||||
Assets
|
|
Carrying Value
|
|
Level 1
|
|
Level 2
|
|
Total Estimated Fair Value
|
||||||||
Cash and cash equivalents
|
|
$
|
118,677
|
|
|
$
|
118,677
|
|
|
$
|
—
|
|
|
$
|
118,677
|
|
Receivables from clearing brokers
|
|
44,466
|
|
|
—
|
|
|
44,466
|
|
|
44,466
|
|
||||
Receivables from other broker-dealers
|
|
2,150
|
|
|
—
|
|
|
2,150
|
|
|
2,150
|
|
||||
Notes receivables, net
(1)
|
|
26,967
|
|
|
—
|
|
|
26,967
|
|
|
26,967
|
|
||||
Other receivables, net
|
|
48,564
|
|
|
—
|
|
|
48,564
|
|
|
48,564
|
|
||||
|
|
$
|
240,824
|
|
|
$
|
118,677
|
|
|
$
|
122,147
|
|
|
$
|
240,824
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Accrued compensation
|
|
$
|
29,115
|
|
|
$
|
—
|
|
|
$
|
29,115
|
|
|
$
|
29,115
|
|
Commissions and fees payable
|
|
59,995
|
|
|
—
|
|
|
59,995
|
|
|
59,995
|
|
||||
Accounts payable and accrued liabilities
(2)
|
|
27,991
|
|
|
—
|
|
|
27,991
|
|
|
27,991
|
|
||||
Accrued interest
|
|
823
|
|
|
—
|
|
|
823
|
|
|
823
|
|
||||
Notes payable, net
(3)
|
|
53,921
|
|
|
—
|
|
|
50,416
|
|
|
50,416
|
|
||||
|
|
$
|
171,845
|
|
|
$
|
—
|
|
|
$
|
168,340
|
|
|
$
|
168,340
|
|
|
|
December 31, 2016
|
||||||||||||||||||
Assets
|
|
Carrying Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Estimated Fair Value
|
||||||||||
Certificates of deposit
|
|
$
|
443
|
|
|
$
|
443
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
443
|
|
Debt securities
|
|
1,850
|
|
|
—
|
|
|
1,850
|
|
|
—
|
|
|
1,850
|
|
|||||
U.S. Treasury notes
|
|
101
|
|
|
—
|
|
|
101
|
|
|
—
|
|
|
101
|
|
|||||
Common stock and warrants
|
|
1,149
|
|
|
494
|
|
|
655
|
|
|
—
|
|
|
1,149
|
|
|||||
Total
|
|
$
|
3,543
|
|
|
$
|
937
|
|
|
$
|
2,606
|
|
|
$
|
—
|
|
|
$
|
3,543
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilites
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Contingent consideration payable
|
|
$
|
7,144
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,144
|
|
|
$
|
7,144
|
|
Debt securities
|
|
25
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
|||||
U.S. Treasury notes
|
|
96
|
|
|
—
|
|
|
96
|
|
|
—
|
|
|
96
|
|
|||||
Common stock and warrants
|
|
261
|
|
|
261
|
|
|
—
|
|
|
—
|
|
|
261
|
|
|||||
Total
|
|
$
|
7,526
|
|
|
$
|
261
|
|
|
$
|
121
|
|
|
$
|
7,144
|
|
|
$
|
7,526
|
|
|
|
December 31, 2015
|
||||||||||||||||||
Assets
|
|
Carrying Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Estimated Fair Value
|
||||||||||
Certificates of deposit
|
|
$
|
359
|
|
|
$
|
359
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
359
|
|
Debt securities
|
|
1,125
|
|
|
—
|
|
|
1,125
|
|
|
—
|
|
|
1,125
|
|
|||||
U.S. Treasury notes
|
|
101
|
|
|
—
|
|
|
101
|
|
|
—
|
|
|
101
|
|
|||||
Common stock and warrants
|
|
1,885
|
|
|
927
|
|
|
958
|
|
|
—
|
|
|
1,885
|
|
|||||
Other investments
|
|
609
|
|
|
—
|
|
|
609
|
|
|
—
|
|
|
609
|
|
|||||
Total
|
|
$
|
4,079
|
|
|
$
|
1,286
|
|
|
$
|
2,793
|
|
|
$
|
—
|
|
|
$
|
4,079
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilites
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Contingent consideration payable
|
|
$
|
2,813
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,813
|
|
|
$
|
2,813
|
|
Debt securities
|
|
30
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
30
|
|
|||||
U.S. Treasury notes
|
|
200
|
|
|
—
|
|
|
200
|
|
|
—
|
|
|
200
|
|
|||||
Common stock
|
|
8
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|||||
Total
|
|
$
|
3,051
|
|
|
$
|
8
|
|
|
$
|
230
|
|
|
$
|
2,813
|
|
|
$
|
3,051
|
|
Fair value of contingent consideration as of December 31, 2013
|
|
$
|
589
|
|
Payments
|
|
(124
|
)
|
|
Change in fair value of contingent consideration
|
|
(12
|
)
|
|
Fair value of contingent consideration in connection with 2014 acquisition
|
|
2,759
|
|
|
Fair value of contingent consideration as of December 31, 2014
|
|
3,212
|
|
|
Payments
|
|
(1,945
|
)
|
|
Change in fair value of contingent consideration
|
|
(55
|
)
|
|
Fair value of contingent consideration in connection with 2015 acquisitions
|
|
1,601
|
|
|
Fair value of contingent consideration as of December 31, 2015
|
|
2,813
|
|
|
Payments
|
|
(827
|
)
|
|
Change in fair value of contingent consideration
|
|
216
|
|
|
Fair value of contingent consideration in connection with 2016 acquisitions
|
|
4,942
|
|
|
Fair value of contingent consideration as of December 31, 2016
|
|
$
|
7,144
|
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Cost:
|
|
|
|
|
|
|
||
Leasehold improvements
|
|
$
|
4,829
|
|
|
$
|
4,656
|
|
Computer equipment
|
|
16,782
|
|
|
14,260
|
|
||
Furniture and fixtures
|
|
3,418
|
|
|
3,251
|
|
||
Software
|
|
19,161
|
|
|
14,089
|
|
||
Other
|
|
4,063
|
|
|
5,043
|
|
||
|
|
48,253
|
|
|
41,299
|
|
||
Less: accumulated depreciation and amortization
|
|
(27,000
|
)
|
|
(19,546
|
)
|
||
Total
|
|
$
|
21,253
|
|
|
$
|
21,753
|
|
|
|
Weighted-Average
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
Estimated Useful Life (years)
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
||||||||
Technology
|
|
7.9
|
|
$
|
25,563
|
|
|
$
|
15,754
|
|
|
$
|
25,563
|
|
|
$
|
12,488
|
|
Relationships with financial advisors
|
|
15.5
|
|
117,995
|
|
|
40,505
|
|
|
110,671
|
|
|
32,028
|
|
||||
Vendor relationships
|
|
7
|
|
3,613
|
|
|
3,613
|
|
|
3,613
|
|
|
3,613
|
|
||||
Covenants not-to-compete
|
|
3.9
|
|
6,421
|
|
|
4,638
|
|
|
6,035
|
|
|
3,347
|
|
||||
Customer accounts
|
|
8.3
|
|
2,029
|
|
|
1,971
|
|
|
2,029
|
|
|
1,765
|
|
||||
Trade names
|
|
7.7
|
|
16,910
|
|
|
10,017
|
|
|
16,910
|
|
|
7,790
|
|
||||
Renewal revenue
|
|
7.9
|
|
41,381
|
|
|
12,481
|
|
|
41,381
|
|
|
7,263
|
|
||||
Relationships with investment banking clients
|
|
4
|
|
2,586
|
|
|
2,586
|
|
|
2,586
|
|
|
2,586
|
|
||||
Leases
|
|
6
|
|
861
|
|
|
861
|
|
|
861
|
|
|
861
|
|
||||
Referral agreement
|
|
6.6
|
|
124
|
|
|
119
|
|
|
124
|
|
|
101
|
|
||||
Other
|
|
6
|
|
67
|
|
|
67
|
|
|
67
|
|
|
67
|
|
||||
Total
|
|
|
|
$
|
217,550
|
|
|
$
|
92,612
|
|
|
$
|
209,840
|
|
|
$
|
71,909
|
|
|
|
||
2017
|
$
|
20,703
|
|
2018
|
19,918
|
|
|
2019
|
16,444
|
|
|
2020
|
14,857
|
|
|
2021
|
10,144
|
|
|
Thereafter
|
42,872
|
|
|
|
$
|
124,938
|
|
|
|
Ladenburg
|
|
Independent Brokerage and Advisory Services
|
|
Insurance Brokerage
|
|
Total
|
||||||||
Balance as of January 1, 2015
|
|
$
|
301
|
|
|
$
|
103,422
|
|
|
$
|
11,515
|
|
|
$
|
115,238
|
|
Benefit applied to reduce goodwill
|
|
—
|
|
|
(78
|
)
|
|
—
|
|
|
(78
|
)
|
||||
Adjustments related to allocation of KMS and Highland purchase price
|
|
—
|
|
|
(68
|
)
|
|
1,184
|
|
|
1,116
|
|
||||
Business acquisitions
|
|
—
|
|
|
9,296
|
|
|
—
|
|
|
9,296
|
|
||||
Balance as of December 31, 2015
|
|
$
|
301
|
|
|
$
|
112,572
|
|
|
$
|
12,699
|
|
|
$
|
125,572
|
|
Correction related to Securities America acquisition purchase price allocation
(1)
|
|
—
|
|
|
(2,870
|
)
|
|
—
|
|
|
(2,870
|
)
|
||||
Business acquisitions
|
|
—
|
|
|
1,329
|
|
|
—
|
|
|
1,329
|
|
||||
Balance as of December 31, 2016
|
|
$
|
301
|
|
|
$
|
111,031
|
|
|
$
|
12,699
|
|
|
$
|
124,031
|
|
|
Federal
|
|
State and Local
|
|
Total
|
|
||||||
2016:
|
|
|
|
|
|
|
||||||
Current
|
$
|
—
|
|
|
$
|
929
|
|
|
$
|
929
|
|
|
Deferred
|
8,992
|
|
|
104
|
|
|
9,096
|
|
|
|||
|
$
|
8,992
|
|
|
$
|
1,033
|
|
|
$
|
10,025
|
|
|
2015:
|
|
|
|
|
|
|
||||||
Current
|
$
|
(1,491
|
)
|
|
$
|
1,331
|
|
|
$
|
(160
|
)
|
|
Deferred
|
(1,623
|
)
|
|
1,223
|
|
|
(400
|
)
|
|
|||
Benefit applied to reduce goodwill
|
—
|
|
|
78
|
|
|
78
|
|
|
|||
|
$
|
(3,114
|
)
|
|
$
|
2,632
|
|
|
$
|
(482
|
)
|
|
2014:
|
|
|
|
|
|
|
||||||
Current
|
$
|
947
|
|
|
$
|
1,160
|
|
|
$
|
2,107
|
|
|
Deferred
|
(21,012
|
)
|
|
(4,509
|
)
|
|
(25,521
|
)
|
|
|||
Benefit applied to reduce goodwill
|
—
|
|
|
68
|
|
|
68
|
|
|
|||
|
$
|
(20,065
|
)
|
|
$
|
(3,281
|
)
|
|
$
|
(23,346
|
)
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
(Loss) income before income taxes
|
$
|
(12,286
|
)
|
|
$
|
(11,695
|
)
|
|
$
|
10,006
|
|
(Benefit) expense under statutory U.S. tax rates
|
(4,300
|
)
|
|
(4,093
|
)
|
|
3,502
|
|
|||
Increase (decrease) in taxes resulting from:
|
|
|
|
|
|
||||||
Increase (decrease) in valuation allowance
|
12,540
|
|
|
79
|
|
|
(28,590
|
)
|
|||
Nondeductible items
|
1,323
|
|
|
1,701
|
|
|
818
|
|
|||
State taxes, net of federal benefit
|
671
|
|
|
1,600
|
|
|
689
|
|
|||
Other, net
|
(209
|
)
|
|
231
|
|
|
235
|
|
|||
Income tax expense (benefit)
|
$
|
10,025
|
|
|
$
|
(482
|
)
|
|
$
|
(23,346
|
)
|
|
2016
|
|
2015
|
|
||||
Deferred tax assets (liabilities):
|
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
14,132
|
|
|
$
|
13,197
|
|
*
|
AMT credit carryforward
|
76
|
|
|
76
|
|
|
||
Accrued expenses
|
5,084
|
|
|
4,501
|
|
|
||
Compensation and benefits
|
18,333
|
|
|
19,674
|
|
|
||
Deferred compensation liability
|
6,496
|
|
|
6,494
|
|
|
||
Securities owned
|
900
|
|
|
770
|
|
|
||
Total deferred tax assets
|
45,021
|
|
|
44,712
|
|
|
||
Valuation allowance
|
(13,766
|
)
|
|
(1,226
|
)
|
*
|
||
Net deferred tax assets
|
31,255
|
|
|
43,486
|
|
|
||
Fixed assets
|
(6,025
|
)
|
|
(4,699
|
)
|
|
||
Intangibles
|
(25,097
|
)
|
|
(34,100
|
)
|
|
||
Goodwill
|
(10,775
|
)
|
|
(9,103
|
)
|
|
||
Total deferred liabilities
|
(41,897
|
)
|
|
(47,902
|
)
|
|
||
Net deferred tax liability
|
$
|
(10,642
|
)
|
|
$
|
(4,416
|
)
|
|
|
2016
|
2015
|
||||
Balance at January 1,
|
$
|
423
|
|
$
|
—
|
|
Increases in tax positions for prior years
|
9
|
|
268
|
|
||
Increases in tax positions for current years
|
71
|
|
155
|
|
||
Balance at December 31,
|
$
|
503
|
|
$
|
423
|
|
12.
|
Notes Payable
|
Year Ending December 31,
|
|
Lease Commitments
|
|
Sublease Rentals
|
|
Net
|
||||||
2017
|
|
$
|
7,688
|
|
|
$
|
54
|
|
|
$
|
7,634
|
|
2018
|
|
6,850
|
|
|
54
|
|
|
6,796
|
|
|||
2019
|
|
6,632
|
|
|
52
|
|
|
6,580
|
|
|||
2020
|
|
5,725
|
|
|
28
|
|
|
5,697
|
|
|||
2021
|
|
3,950
|
|
|
—
|
|
|
3,950
|
|
|||
Thereafter
|
|
21,691
|
|
|
—
|
|
|
21,691
|
|
|||
Total
|
|
$
|
52,536
|
|
|
$
|
188
|
|
|
$
|
52,348
|
|
Expiration Date
|
|
Exercise Price
|
Number of Shares
|
||
2017
|
|
$
|
1.91
|
|
2,000,000
|
|
|
|
2,000,000
|
|
|
Year Ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Basic weighted-average common shares outstanding - basic
|
|
182,987,850
|
|
|
183,660,993
|
|
|
182,768,494
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|||
Options to purchase common stock
|
|
—
|
|
|
—
|
|
|
15,411,800
|
|
Warrants to purchase common stock
|
|
—
|
|
|
—
|
|
|
8,331,539
|
|
Restricted shares
|
|
—
|
|
|
—
|
|
|
604
|
|
Dilutive potential common shares
|
|
—
|
|
|
—
|
|
|
23,743,943
|
|
|
|
|
|
|
|
|
|||
Weighted average common shares outstanding and dilutive potential common shares
|
|
182,987,850
|
|
|
183,660,993
|
|
|
206,512,437
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
Weighted- Average Exercise Price
|
|
Weighted- Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value
|
|||||
Options outstanding, December 31, 2015
|
|
15,254,501
|
|
|
$
|
1.48
|
|
|
|
|
|
||
Exercised
|
|
(3,077,000
|
)
|
|
0.94
|
|
|
|
|
|
|||
Forfeited
|
|
(10,000
|
)
|
|
2.80
|
|
|
|
|
|
|||
Expired
|
|
(45,000
|
)
|
|
1.45
|
|
|
|
|
|
|||
Options outstanding, December 31, 2016
|
|
12,122,501
|
|
|
$
|
1.62
|
|
|
2.22
|
|
$
|
10,181
|
|
Vested or expected to vest, December 31, 2016
|
|
12,122,501
|
|
|
$
|
1.62
|
|
|
2.22
|
|
$
|
10,181
|
|
Options exercisable, December 31, 2016
|
|
12,122,501
|
|
|
$
|
1.62
|
|
|
2.22
|
|
$
|
10,181
|
|
|
|
Shares
|
|
Weighted- Average Exercise Price
|
|
Weighted- Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value
|
|||||
Options outstanding, December 31, 2015
|
|
21,380,009
|
|
|
$
|
2.20
|
|
|
|
|
|
||
Granted
|
|
1,330,000
|
|
|
2.57
|
|
|
|
|
|
|||
Exercised
|
|
(558,145
|
)
|
|
1.52
|
|
|
|
|
|
|||
Forfeited
|
|
(315,811
|
)
|
|
1.89
|
|
|
|
|
|
|
||
Options outstanding, December 31, 2016
|
|
21,836,053
|
|
|
$
|
2.24
|
|
|
5.88
|
|
$
|
11,306
|
|
Vested or expected to vest, December 31, 2016
|
|
21,818,147
|
|
|
$
|
2.24
|
|
|
5.87
|
|
$
|
11,306
|
|
Options exercisable, December 31, 2016
|
|
17,328,303
|
|
|
$
|
2.04
|
|
|
5.37
|
|
$
|
10,707
|
|
|
|
Shares
|
|
Weighted- Average Exercise Price
|
|
Weighted- Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value
|
|||||
Options outstanding, December 31, 2015
|
|
4,415,000
|
|
|
$
|
1.63
|
|
|
|
|
|
||
Exercised
|
|
(1,415,000
|
)
|
|
1.05
|
|
|
|
|
|
|
||
Options outstanding, December 31, 2016
|
|
3,000,000
|
|
|
$
|
1.91
|
|
|
0.80
|
|
$
|
1,590
|
|
Vested or expected to vest, December 31, 2016
|
|
3,000,000
|
|
|
$
|
1.91
|
|
|
0.80
|
|
$
|
1,590
|
|
Options exercisable, December 31, 2016
|
|
3,000,000
|
|
|
$
|
1.91
|
|
|
0.80
|
|
$
|
1,590
|
|
|
|
Year Ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Dividend yield
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Expected volatility
|
|
50.38
|
%
|
|
61.10
|
%
|
|
64.94
|
%
|
Risk-free interest rate
|
|
1.67
|
%
|
|
1.63
|
%
|
|
2.02
|
%
|
Expected life (in years)
|
|
6.11
|
|
|
6.15
|
|
|
6.40
|
|
|
|
Restricted Stock
|
|
Weighted-Average Grant Date Fair Value Per Share
|
|||
Nonvested at December 31, 2015
|
|
1,208,542
|
|
|
$
|
3.91
|
|
Issued during 2016
|
|
1,341,000
|
|
|
2.23
|
|
|
Vested during 2016
|
|
(306,323
|
)
|
|
3.91
|
|
|
Forfeited during 2016
|
|
(10,000
|
)
|
|
2.64
|
|
|
Nonvested at December 31, 2016
|
|
2,233,219
|
|
|
2.92
|
|
|
|
Independent Brokerage and Advisory Services
|
|
Ladenburg
|
|
Insurance Brokerage
|
|
Corporate
|
|
Total
|
||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
1,003,282
|
|
|
$
|
49,425
|
|
|
$
|
50,483
|
|
|
$
|
3,763
|
|
|
$
|
1,106,953
|
|
Income (loss) before income taxes
|
|
15,071
|
|
|
(3,674
|
)
|
|
(6,074
|
)
|
|
(17,609
|
)
|
(1)
|
(12,286
|
)
|
|||||
EBITDA, as adjusted
(2)
|
|
47,977
|
|
|
(1,676
|
)
|
|
2,255
|
|
|
(12,785
|
)
|
|
35,771
|
|
|||||
Identifiable assets
|
|
423,288
|
|
|
38,665
|
|
|
54,166
|
|
|
29,884
|
|
|
546,003
|
|
|||||
Depreciation and amortization
|
|
20,406
|
|
|
703
|
|
|
7,161
|
|
|
64
|
|
|
28,334
|
|
|||||
Interest
|
|
2,828
|
|
|
4
|
|
|
682
|
|
|
748
|
|
|
4,262
|
|
|||||
Capital expenditures
|
|
6,784
|
|
|
139
|
|
|
209
|
|
|
—
|
|
|
7,132
|
|
|||||
Non-cash compensation
|
|
1,010
|
|
|
537
|
|
|
245
|
|
|
3,519
|
|
|
5,311
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenues
|
|
$
|
1,035,365
|
|
|
$
|
61,841
|
|
|
$
|
49,573
|
|
|
$
|
5,339
|
|
|
$
|
1,152,118
|
|
Income (loss) before income taxes
|
|
7,735
|
|
|
3,095
|
|
|
(6,701
|
)
|
|
(15,824
|
)
|
(1)
|
(11,695
|
)
|
|||||
EBITDA, as adjusted
(2)
|
|
46,462
|
|
|
6,052
|
|
|
1,170
|
|
|
(9,639
|
)
|
|
44,045
|
|
|||||
Identifiable assets
|
|
417,367
|
|
|
44,050
|
|
|
61,689
|
|
|
50,999
|
|
|
574,105
|
|
|||||
Depreciation and amortization
|
|
19,373
|
|
|
703
|
|
|
6,949
|
|
|
52
|
|
|
27,077
|
|
|||||
Interest
|
|
3,532
|
|
|
7
|
|
|
683
|
|
|
947
|
|
|
5,169
|
|
|||||
Capital expenditures
|
|
7,341
|
|
|
87
|
|
|
783
|
|
|
87
|
|
|
8,298
|
|
|||||
Non-cash compensation
|
|
3,836
|
|
|
638
|
|
|
239
|
|
|
4,046
|
|
|
8,759
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenues
|
|
$
|
816,581
|
|
|
$
|
73,298
|
|
|
$
|
26,164
|
|
|
$
|
5,210
|
|
|
$
|
921,253
|
|
Income (loss) before income taxes
|
|
10,520
|
|
|
14,846
|
|
|
(841
|
)
|
|
(14,519
|
)
|
(1)
|
10,006
|
|
|||||
EBITDA, as adjusted
(2)
|
|
50,596
|
|
|
16,174
|
|
|
2,315
|
|
|
(7,907
|
)
|
|
61,178
|
|
|||||
Identifiable assets
|
|
350,187
|
|
|
39,845
|
|
|
67,941
|
|
|
52,141
|
|
|
510,114
|
|
|||||
Depreciation and amortization
|
|
14,978
|
|
|
665
|
|
|
2,743
|
|
|
11
|
|
|
18,397
|
|
|||||
Interest
|
|
5,460
|
|
|
67
|
|
|
297
|
|
|
1,166
|
|
|
6,990
|
|
|||||
Capital expenditures
|
|
6,058
|
|
|
1,002
|
|
|
253
|
|
|
134
|
|
|
7,447
|
|
|||||
Non-cash compensation
|
|
6,751
|
|
|
612
|
|
|
116
|
|
|
3,062
|
|
|
10,541
|
|
(1)
|
Includes interest on revolving credit and forgivable loan notes, compensation, professional fees and other general and administrative expenses.
|
(2)
|
The following table reconciles income (loss) before income taxes to EBITDA, as adjusted, for the years ended December 31, 2016, 2015 and 2014:
|
|
|
Year Ended December 31,
|
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
||||||
(Loss) income before income taxes
|
|
(12,286
|
)
|
|
(11,695
|
)
|
|
10,006
|
|
|
|||
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|||
Interest income
|
|
(672
|
)
|
|
(254
|
)
|
|
(245
|
)
|
|
|||
Change in fair value of contingent consideration
|
|
216
|
|
|
(55
|
)
|
|
(12
|
)
|
|
|||
Loss on extinguishment of debt
|
|
—
|
|
|
252
|
|
|
548
|
|
|
|||
Interest expense
|
|
4,262
|
|
|
5,169
|
|
|
6,990
|
|
|
|||
Depreciation and amortization
|
|
28,334
|
|
|
27,077
|
|
|
18,397
|
|
|
|||
Non-cash compensation expense
|
|
5,311
|
|
|
8,759
|
|
|
10,541
|
|
|
|||
Amortization of retention and forgivable loans
|
|
5,472
|
|
|
9,238
|
|
|
11,041
|
|
|
|||
Financial advisor recruiting expense
|
|
1,882
|
|
|
2,387
|
|
|
1,489
|
|
|
|||
Acquisition-related expense
|
|
1,357
|
|
|
940
|
|
(5)
|
2,342
|
|
|
|||
Loss attributable to noncontrolling interest
|
|
42
|
|
|
62
|
|
|
81
|
|
|
|||
Other
|
|
1,853
|
|
(3)
|
2,165
|
|
(4)
|
—
|
|
|
|||
EBITDA, as adjusted
|
|
$
|
35,771
|
|
|
$
|
44,045
|
|
|
$
|
61,178
|
|
|
|
|
|
|
|
|
|
|
||||||
EBITDA, as adjusted
|
|
|
|
|
|
|
|
||||||
Independent Brokerage and Advisory Services
|
|
$
|
47,977
|
|
|
$
|
46,462
|
|
|
$
|
50,596
|
|
|
Ladenburg
|
|
(1,676
|
)
|
|
6,052
|
|
|
16,174
|
|
|
|||
Insurance Brokerage
|
|
2,255
|
|
|
1,170
|
|
|
2,315
|
|
|
|||
Corporate
|
|
(12,785
|
)
|
|
(9,639
|
)
|
|
(7,907
|
)
|
|
|||
Total segments
|
|
$
|
35,771
|
|
|
$
|
44,045
|
|
|
$
|
61,178
|
|
|
(5)
|
Includes
$409
for acquisition-related expense that was previously included in professional services expense and other expense.
|
|
|
Quarters
|
|||||||||||||||
|
|
1st
|
|
2nd
|
|
3rd
|
|
4th
|
|
||||||||
2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues
|
|
$
|
265,796
|
|
|
$
|
269,775
|
|
|
$
|
274,323
|
|
|
$
|
297,059
|
|
|
Expenses
(1)
|
|
272,124
|
|
|
271,302
|
|
|
281,162
|
|
|
294,435
|
|
|
||||
(Loss) income before item shown below
|
|
(6,328
|
)
|
|
(1,527
|
)
|
|
(6,839
|
)
|
|
2,624
|
|
|
||||
Change in fair value of contingent consideration
|
|
(57
|
)
|
|
(49
|
)
|
|
(72
|
)
|
|
(38
|
)
|
|
||||
(Loss) income before income taxes
|
|
$
|
(6,385
|
)
|
|
$
|
(1,576
|
)
|
|
$
|
(6,911
|
)
|
|
$
|
2,586
|
|
|
Net income (loss)
|
|
$
|
2,384
|
|
|
$
|
(17,801
|
)
|
|
$
|
(7,515
|
)
|
|
$
|
621
|
|
|
Loss attributable to noncontrolling interest
|
|
18
|
|
|
14
|
|
|
1
|
|
|
9
|
|
|
||||
Net income (loss) attributable to the Company
|
|
$
|
2,402
|
|
|
$
|
(17,787
|
)
|
|
$
|
(7,514
|
)
|
|
$
|
630
|
|
|
Dividends declared on preferred stock
|
|
(7,345
|
)
|
|
(7,389
|
)
|
|
(7,780
|
)
|
|
(7,924
|
)
|
|
||||
Net loss available to common shareholders
|
|
$
|
(4,943
|
)
|
|
$
|
(25,176
|
)
|
|
$
|
(15,294
|
)
|
|
$
|
(7,294
|
)
|
|
Basic loss per common share
|
|
$
|
(0.03
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.04
|
)
|
|
Diluted loss per common share
|
|
$
|
(0.03
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.04
|
)
|
|
Basic weighted average common shares
|
|
181,363,446
|
|
|
180,674,937
|
|
|
181,032,730
|
|
|
188,837,490
|
|
|
||||
Diluted weighted average common shares
|
|
181,363,446
|
|
|
180,674,937
|
|
|
181,032,730
|
|
|
188,837,490
|
|
|
(1)
|
Includes a
$1,355
,
$1,341
,
$1,300
and
$1,315
charge for non-cash compensation in the first, second, third and fourth quarters of 2016 respectively.
|
|
|
Quarters
|
|||||||||||||||
|
|
1
st
|
|
2
nd
|
|
3
rd
|
|
4th
|
|
||||||||
2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues
|
|
$
|
278,823
|
|
|
$
|
296,748
|
|
|
$
|
282,214
|
|
|
$
|
294,333
|
|
|
Expenses
(1)
|
|
284,146
|
|
|
299,581
|
|
|
285,363
|
|
|
294,778
|
|
|
||||
Loss before item shown below
|
|
(5,323
|
)
|
|
(2,833
|
)
|
|
(3,149
|
)
|
|
(445
|
)
|
|
||||
Change in fair value of contingent consideration
|
|
31
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
||||
Loss before income taxes
|
|
$
|
(5,292
|
)
|
|
$
|
(2,833
|
)
|
|
$
|
(3,149
|
)
|
|
$
|
(421
|
)
|
|
Net loss
|
|
$
|
(3,572
|
)
|
|
$
|
(2,477
|
)
|
|
$
|
(2,937
|
)
|
|
$
|
(2,227
|
)
|
|
Loss attributable to noncontrolling interest
|
|
20
|
|
|
8
|
|
|
11
|
|
|
23
|
|
|
||||
Net loss attributable to the Company
|
|
$
|
(3,552
|
)
|
|
$
|
(2,469
|
)
|
|
$
|
(2,926
|
)
|
|
$
|
(2,204
|
)
|
|
Dividends declared on preferred stock
|
|
(6,332
|
)
|
|
(7,152
|
)
|
|
(7,289
|
)
|
|
(7,335
|
)
|
|
||||
Net loss available to common shareholders
|
|
$
|
(9,884
|
)
|
|
$
|
(9,621
|
)
|
|
$
|
(10,215
|
)
|
|
$
|
(9,539
|
)
|
|
Basic loss per common share
|
|
$
|
(0.05
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.05
|
)
|
|
Diluted loss per common share
|
|
$
|
(0.05
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.05
|
)
|
|
Basic weighted average common shares
|
|
184,998,551
|
|
|
184,743,052
|
|
|
183,519,768
|
|
|
181,423,440
|
|
|
||||
Diluted weighted average common shares
|
|
184,998,551
|
|
|
184,743,052
|
|
|
183,519,768
|
|
|
181,423,440
|
|
|
(1)
|
Includes a
$3,260
,
$2,424
,
$242
and
$2,833
charge for non-cash compensation in the first, second, third and fourth quarters of 2015, respectively.
|
NAME
|
STATE OF ORGANIZATION
|
HCHC Acquisition Inc.
|
Delaware
|
Highland Capital Brokerage, Inc.
|
Delaware
|
Highland Capital Holding Corporation
|
Delaware
|
KMS Financial Services, Inc.
|
Washington
|
Securities America Financial Corporation
|
Nebraska
|
Securities America, Inc.
|
Delaware
|
Securities America Advisors, Inc.
|
Nebraska
|
Securities Service Network, Inc.
|
Tennessee
|
Ladenburg Thalmann Advisor Network LLC
|
Florida
|
Ladenburg Thalmann & Co. Inc.
|
Delaware
|
Ladenburg Thalmann Asset Management Inc.
|
New York
|
Investacorp, Inc.
|
Florida
|
Investacorp Advisory Services Inc.
|
Florida
|
Triad Advisors, Inc.
|
Florida
|
Triad Hybrid Solutions, LLC
|
Florida
|
Premier Trust, Inc.
|
Nevada
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|