SOURCE: vFinance, Inc.
April 03, 2007 09:03 ET
vFinance, Inc. Reports Record Revenues for FY2006
Company Has Improved Liquidity and Cash Flow, Strong Balance Sheet, no Debt and Strong Diversified Income Stream
BOCA RATON, FL -- (MARKET WIRE) -- April 3, 2007 -- vFinance, Inc. (OTCBB: VFIN) ("VFIN"), a
global financial services company specializing in growth opportunities,
today reported record revenues for the fiscal year ended December 31, 2006.
Revenues for the year 2006 were $38,594,900, compared to $26,070,700 in
2005, an increase of $12,524,200, or 48%. The increase was driven by
significantly higher revenue generated by increased trading profits and
agency commissions derived as a result of the customer relationships
acquired from the Sterling Financial Group of Companies, increased retail
brokerage income due to recruitment of new brokers, more favorable trading
conditions in our market making activities, and higher revenues from
success fees from investment banking.
Our liquid assets of $5,600,000 as of December 31, 2006, comprised of cash
and cash equivalents of $4,200,000 and marketable securities of $1,400,000,
is approximately $300,000 higher than our liquid assets as of December 31,
2005. In addition, the Company's cash flow from operating activities plus
proceeds from sales of investments in securities held for sale totaled
$370,900, representing an improvement of $1,044,200 compared to fiscal year
2005. This improvement in 2006 resulted from $55,600 in net cash used from
operating activities for the year plus $426,500 in proceeds from sales of
investments in securities held for sale, compared to net cash of $708,500
used in operating activities plus $35,200 in proceeds from sales of
investments in securities held for sale in FY2005. Continuing to build out
our infrastructure for further growth and invest in long term
opportunities, in 2006 the Company purchased $222,700 in property and
equipment and acquired for $161,900 a minority interest in a non-affiliated
global consulting firm headquartered in Barcelona, Spain. vFinance has no
long term debt.
The Company reported a net loss of $2,100,000 for FY2006 or ($0.04) per
fully diluted share, compared to a loss of $1,000,000 or ($0.02) per fully
diluted share in FY2005. The loss was due in part to non-cash expenses
totaling $3,068,200 comprised of depreciation and amortization of $958,700,
non-cash compensation of $448,200 from expensing stock options under SFAS
No. 123R, other non-cash compensation paid in the amount of $1,400,000, and
a non-cash litigation settlement expense of $261,300. In addition, the
Company incurred increased compensation expenses, commission and benefit
expenses, clearing and transaction costs, and occupancy and equipment costs
related to increased revenues and the Sterling Financial Group acquisition.
"This has been a year of significant growth for the Company," declared
Leonard Sokolow, Chairman and CEO, vFinance, Inc. "We have steadily
increased our top line by investing in infrastructure, acquisitions and our
investment banking, retail and trading businesses. The acquisition of the
Institutional Fixed Income and Latin American businesses of Sterling
Financial Group greatly expanded our presence in both of these important
markets. We now have 40 offices in the US and other parts of the world,
more than 12,000 corporate, institutional and high net worth clients, and
we're a market maker in more than 3,000 stocks. In addition, our website
attracts more than half a million unique visitors annually. It is a major
destination for venture capitalists and private and institutional investors
seeking information about high growth companies."
Alan Levin, CFO, vFinance, Inc. stated, "In the past year, vFinance has
built a well diversified income stream and a strong balance sheet that
should give the Company the flexibility to grow steadily in 2007. With this
foundation, we expect to improve our cash generation and overall
profitability through expense reduction and increases in productivity while
continuing to execute our growth strategy."
About vFinance, Inc.
vFinance, Inc. is a global financial services company which specializes in
high growth opportunities. The Company's insight into this marketplace
flows from three key activities: providing investment banking and advisory
services to micro, small and mid-cap high growth companies; making markets
in over 3,000 micro and small cap stocks; and offering information services
on its website, a leading destination for emerging companies seeking
capital and investors seeking opportunities. Due to its focus, the Company
is uniquely positioned to offer alternative investments to institutional
and high net worth investors seeking to outperform market indices. All
investors are also offered a full range of investment options. With over 40
offices in the U.S. and other parts of the world, the Company serves more
than 12,000 corporate, institutional and high-net worth clients. vFinance
Investments, Inc. and EquityStation, Inc., both subsidiaries of vFinance,
Inc., are broker-dealers registered with the SEC, and members of NASD and
SIPC. For more information about vFinance, Inc., please visit its website
at www.vfinance.com.
This release contains forward-looking statements which are made pursuant to
the safe harbor provisions of Section 21E of the Securities Exchange Act of
1934. The forward-looking statements in this release do not constitute
guarantees of future performance. Investors are cautioned that statements
in this press release, which are not strictly historical statements,
including, without limitation, statements by management, statements
concerning internal operations, marketing, management's plans, objectives
and strategies, and management's assessment of market factors and
conditions, constitute forward-looking statements. Such forward-looking
statements are subject to a number of risks and uncertainties that could
cause actual results to differ materially from those anticipated by the
forward-looking statements, including, without limitations, the volatility
of domestic and international financial, bond and stock markets, intense
competition, extensive governmental regulation, litigation, substantial
fluctuations in the volume and price level of securities and other risks as
detailed in the Company's filings with the Securities and Exchange
Commission. vFinance, Inc. assumes no obligation to update any
forward-looking information in this press release.
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31,
2006, 2005 AND 2004 FOLLOW
vFINANCE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(In thousands, except per share data)
2005 2004
(Restated (Restated
and and
2006 Revised) Revised)
---------- ---------- ----------
Revenues:
Commissions - agency $ 20,323.7 $ 15,941.2 $ 14,571.9
Trading profits 9,606.0 4,177.4 5,156.8
Success fees 4,523.5 2,250.5 3,395.6
Other brokerage related income 3,546.0 2,837.6 2,567.5
Consulting fees 375.4 523.6 370.8
Other 220.3 340.4 437.4
---------- ---------- ----------
Total revenues 38,594.9 26,070.7 26,500.0
---------- ---------- ----------
Compensation, commissions and
benefits 31,232.0 20,313.3 19,791.0
Clearing and transaction costs 4,337.2 2,977.2 2,239.3
General and administrative costs 3,158.8 2,332.8 2,310.2
Occupancy and equipment costs 1,166.6 743.3 475.6
Depreciation and amortization 958.7 446.3 166.1
Goodwill impairment -- 420.0 --
---------- ---------- ----------
Total operating costs 40,853.3 27,232.9 24,982.2
---------- ---------- ----------
Income (loss) from operations (2,258.4) (1,162.2) 1,517.8
---------- ---------- ----------
Other income (expenses):
Gain on forgiveness of debt -- -- 1,500.0
Interest income 85.3 82.6 35.1
Interest expense (59.7) (30.7) (394.4)
Dividend income 22.5 5.9 27.3
Other income (expense), net 76.8 104.8 (231.0)
---------- ---------- ----------
Total other income (expense) 124.9 162.6 937.0
---------- ---------- ----------
Income (loss) before income taxes (2,133.5) (999.6) 2,454.8
Income tax benefit (provision) -- -- (40.0)
---------- ---------- ----------
Net income (loss) $ (2,133.5) $ (999.6) $ 2,414.8
========== ========== ==========
Net income (loss) per share: basic $ (0.04) $ (0.02) $ 0.07
========== ========== ==========
Weighted average number of shares
outstanding: basic 48,714.8 40,049.7 33,773.3
========== ========== ==========
Net income (loss) per share: diluted $ (0.04) $ (0.02) $ 0.07
========== ========== ==========
Weighted average number of shares
outstanding: diluted 48,714.8 40,049.7 35,840.2
========== ========== ==========