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MINNEAPOLIS--(BUSINESS WIRE)--July 16, 2008--Piper Jaffray Companies (NYSE: PJC) today announced a net loss from continuing operations of $5.1 million, or $0.32 per share, for the quarter ended June 30, 2008. Results from continuing operations in the year-ago period were net income of $10.4 million, or $0.58 per diluted share, and in the first quarter of 2008, a net loss of $3.4 million, or $0.22 per share.

For the second quarter of 2008, continuing operations generated net revenues of $94.9 million, down 23 percent from $122.6 million for the second quarter of 2007 and down 1 percent from the first quarter of 2008.

For the first six months of 2008, the company recorded a net loss from continuing operations of $8.5 million, or $0.53 per share, compared to net income from continuing operations of $25.1 million, or $1.40 per diluted share, for the year-ago period. Net revenues of $190.6 million year-to-date represent a 27 percent decrease over the same period last year mainly driven by lower investment banking revenues.

"We are disappointed to report a loss in the second quarter, which was primarily driven by very challenging market conditions for IPOs and M&A transactions. Partially mitigating the weakness in investment banking, was strong performance in institutional brokerage, particularly fixed income," said Chairman and Chief Executive Officer Andrew S. Duff. "We now believe that the current capital markets downturn will continue through the rest of 2008 and could extend into 2009. We are carefully managing our business with the goal of establishing a stronger market position once the market cycle corrects. At the same time, we are evaluating the appropriate actions to position our firm for a more prolonged market downturn."

    Results of Continuing Operations

    Second Quarter

    Net Revenues

    Investment Banking

For the second quarter of 2008, total investment banking revenues were $35.3 million, down 54 percent and 42 percent, compared to the second quarter of 2007 and the first quarter of 2008, respectively.

    --  Equity financing revenues were $8.7 million, down 78 percent
        compared to the year-ago period and down 47 percent compared
        to the first quarter of 2008. The weak performance was driven
        by significantly lower activity within the sectors that the
        company participates.

    --  Advisory services revenues were $11.3 million, down 4 percent
        compared to the year-ago period. Revenues decreased 56 percent
        compared to the first quarter of 2008, mainly resulting from
        fewer completed U.S. transactions.

    --  Debt financing revenues were $15.3 million, down 39 percent
        compared to the second quarter of 2007, primarily due to a
        lower average spread on completed public finance transactions.
        Debt financing revenues declined 21 percent compared to the
        first quarter of 2008, mainly due to lower interest rate
        product revenues and lower taxable debt revenues.

The following is a recap of the company's completed deal information for the second quarter of 2008:

    --  9 equity financings raising capital of $1.5 billion. Of the
        completed transactions, 3 were U.S. public offerings.

    --  9 merger and acquisition transactions with an aggregate
        enterprise value of $600 million. The number of deals and the
        enterprise value include disclosed and undisclosed
        transactions.

    --  97 tax-exempt issues with a total par value of $2.5 billion.

    Institutional Sales and Trading

For the quarter ended June 30, 2008, institutional sales and trading generated revenues of $56.1 million, up 23 percent and 68 percent compared to the same quarter last year and the first quarter of 2008, respectively.

    --  Equities sales and trading revenues were $35.3 million, up 23
        percent and 13 percent from the year-ago period and the first
        quarter of 2008, respectively. The stronger results were
        mainly driven by solid performance in U.S. equities and
        improved results from proprietary trading strategies.

    --  Fixed income sales and trading revenues were $20.8 million, up
        22 percent compared to the year-ago period and a strong
        rebound from the weak performance in the first quarter of
        2008. Compared to the year-ago period, the increased revenues
        were driven by higher municipal revenues, offset in part by
        lower high yield and structured products results. Compared to
        the sequential first quarter, the increased revenues were
        primarily driven by significantly improved performance in the
        municipal business and high yield and structured products.

    Asset Management

For the quarter ended June 30, 2008, asset management revenues were $4.7 million. In the prior-year period, the company had nominal asset management revenues. Revenues rose 18 percent compared to the sequential first quarter, mainly due to a loss recorded in that period related to the Goldbond asset management business, which the company has now exited.

Non-Interest Expenses

For the second quarter of 2008, compensation and benefits expense was $65.9 million, down 8 percent compared to the prior-year period and up 1 percent compared to the first quarter of 2008. Compensation expense included a $2.8 million charge related to additional severance actions taken in the second quarter. The compensation ratio for the second quarter was 69.4 percent, up from 58.5 percent in the year-ago period, mainly due to the severance charge and fixed compensation costs, over a lower revenue base. The compensation ratio increased from 68.2 percent in the first quarter of 2008.

Non-compensation expenses were $43.3 million for the current quarter, up 21 percent and 24 percent, compared to the year-ago period and the sequential first quarter, respectively. The increases were due in large part to litigation-related expenses. In addition, the firm experienced a higher number of deals that were not completed, causing it to write off certain travel expenses and legal fees associated with those deals.

For the second quarter of 2008, pre-tax operating margin from continuing operations was negative 15.1 percent, compared to positive 12.4 percent in the year-ago period. The decline was driven by lower revenues due to weaker capital markets and higher non-compensation expenses. Pre-tax operating margin was negative 4.6 percent in the first quarter of 2008.

Additional Shareholder Information


----------------------------------------------------------------------
                                As of June   As of Mar.   As of June
                                 30, 2008     31, 2008     30, 2007
----------------------------------------------------------------------
Full time employees:            1,246        1,224        1,095
----------------------------------------------------------------------
FAMCO AUM                       $8.1 billion $8.3 billion $9.1 billion
----------------------------------------------------------------------
Shareholders' equity:           $924 million $916 million $947 million
----------------------------------------------------------------------
Annualized Return on Average
 Tangible Shareholders'
 Equity(1)                      (2.4)%       (2.3)%       5.3%
----------------------------------------------------------------------
Book value per share:           $57.41       $57.11       $55.46
----------------------------------------------------------------------
Tangible book value per share:  $38.73       $38.33       $41.86
----------------------------------------------------------------------

(1)Tangible shareholders' equity equals total shareholders' equity less goodwill and identifiable intangible assets. Annualized return on average tangible shareholders' equity is computed by dividing annualized net earnings by average monthly tangible shareholders' equity. Management believes that annualized return on tangible shareholders' equity is a meaningful measure of performance because it reflects the tangible equity deployed in our businesses. This measure excludes the portion of our shareholders' equity attributable to goodwill and identifiable intangible assets. The majority of our goodwill is a result of the 1998 acquisition of our predecessor company, Piper Jaffray Companies Inc., and its subsidiaries by U.S. Bancorp. The following table sets forth a reconciliation of shareholders' equity to tangible shareholders' equity. Shareholders' equity is the most directly comparable GAAP financial measure to tangible shareholders' equity.

                                  Average for the
                       -------------------------------------
Dollars in thousands)  Three Months Ended Three Months Ended   As of
                           30-Jun-08          30-Jun-07      30-Jun-08
                       ------------------ ------------------ ---------
Shareholders' equity             $918,944           $938,091  $923,886
Deduct: Goodwill and
 identifiable
 intangible assets                300,965            232,434   300,638
                       ------------------ ------------------ ---------
Tangible shareholders'
 equity                          $617,979           $705,657  $623,248
                       ------------------ ------------------ ---------

Conference Call

Andrew S. Duff, chairman and chief executive officer, and Debbra L. Schoneman, chief financial officer, will host a conference call to discuss first quarter results on Wednesday, July 16 at 9 a.m. ET (8 a.m. CT). The call can be accessed via live audio webcast available through the company's web site at www.piperjaffray.com or by dialing (866) 244-9933, or (706) 758-0864 internationally, and referring to conference ID 54396231 and the leader's name, Andrew Duff. Callers should dial in at least 15 minutes early to receive instructions. A replay of the conference call will be available beginning at approximately 11 a.m. ET on July 16, 2008 at the same web address or by calling (800) 642-1687, or (706) 645-9291 internationally.

About Piper Jaffray

Piper Jaffray Companies is a leading, international middle-market investment bank and institutional securities firm, serving the needs of middle market corporations, private equity groups, public entities, nonprofit clients and institutional investors. Founded in 1895, Piper Jaffray provides a comprehensive set of products and services, including equity and debt capital markets products; public finance services; mergers and acquisitions advisory services; high-yield and structured products; institutional equity and fixed-income sales and trading; and equity and high-yield research. With headquarters in Minneapolis, Piper Jaffray has 25 offices across the United States and international locations in London, Shanghai and Hong Kong. Piper Jaffray & Co. is the firm's principal operating subsidiary. (NYSE: PJC) (http://www.piperjaffray.com)

Cautionary Note Regarding Forward-Looking Statements

This press release and the conference call to discuss the contents of this press release contain forward-looking statements. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements and are subject to significant risks and uncertainties that are difficult to predict. These forward-looking statements cover, among other things, statements made about general economic and market conditions, our current deal pipelines, the environment and prospects for capital markets transactions and activity, management expectations, anticipated financial results, the expected benefits of acquisitions, expectations regarding the size of inventory positions for certain municipal products, or other similar matters. These statements involve inherent risks and uncertainties, both known and unknown, and important factors could cause actual results to differ materially from those anticipated or discussed in the forward-looking statements including (1) market and economic conditions or developments may be unfavorable, including in specific sectors in which we operate, and these conditions or developments (including market fluctuations or volatility) may adversely affect the environment for capital markets transactions and activity and our business and profitability, (2) the volume of anticipated investment banking transactions as reflected in our deal pipelines (and the net revenues we earn from such transactions) may differ from expected results if any transactions are delayed or not completed at all or if the terms of any transactions are modified, (3) acquisitions may not yield the benefits we anticipate or yield them within expected timeframes, (4) we may not be able to compete successfully with other companies in the financial services industry, (5) an inability to readily divest or transfer inventory positions of certain municipal products may result in future inventory levels that differ from management's expectations and potential financial losses from a decline in value of illiquid positions, and (6) the other factors described under "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2007 and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2007, and updated in our subsequent reports filed with the SEC (available at our Web site at www.piperjaffray.com and at the SEC Web site at www.sec.gov). Forward-looking statements speak only as of the date they are made, and readers are cautioned not to place undue reliance on them. We undertake no obligation to update them in light of new information or future events.

(C) 2008 Piper Jaffray & Co., 800 Nicollet Mall, Suite 800, Minneapolis, Minnesota 55402-7020

Piper Jaffray Companies
Preliminary Unaudited Results of Operations


                                                          Percent
                           Three Months Ended             Inc/(Dec)
                   ----------------------------------- --------------
                   Jun. 30,     Mar. 31,     Jun. 30,  2Q '08  2Q '08
(Amounts in                                             vs.     vs.
 thousands, except   2008         2008         2007    1Q '08  2Q '07
 per share data)
                   ---------    ---------    --------- ------  ------
Revenues:
  Investment
   banking         $ 32,184     $ 55,265     $ 74,872  (41.8)% (57.0)%
  Institutional
   brokerage         51,196       29,812       38,597   71.7    32.6
  Interest           13,114       15,159       13,816  (13.5)   (5.1)
  Asset management    4,697        3,973           72   18.2     N/M
  Other
   income/(loss)       (460)      (1,600)        (364) (71.3)   26.4
                   ---------    ---------    --------- ------  ------
    Total revenues  100,731      102,609      126,993   (1.8)  (20.7)

  Interest expense    5,826        6,878        4,417  (15.3)   31.9
                   ---------    ---------    --------- ------  ------

    Net revenues     94,905       95,731      122,576   (0.9)  (22.6)
                   ---------    ---------    --------- ------  ------

Non-interest
 expenses:
  Compensation and
   benefits          65,885       65,251       71,707    1.0    (8.1)
  Occupancy and
   equipment          8,133        8,110        8,849    0.3    (8.1)
  Communications      5,869        6,739        5,997  (12.9)   (2.1)
  Floor brokerage
   and clearance      3,899        2,654        4,176   46.9    (6.6)
  Marketing and
   business
   development        7,381        6,096        6,380   21.1    15.7
  Outside services   11,431        8,817        9,122   29.6    25.3
  Other operating
   expenses           6,603        2,474        1,194  166.9     N/M
                   ---------    ---------    --------- ------  ------
    Total non-
     interest
     expenses       109,201      100,141      107,425    9.0     1.7 %
                   ---------    ---------    --------- ------  ------

Income/(loss) from
 continuing
 operations before
 income tax
 expense/(benefit)  (14,296)      (4,410)      15,151  224.2     N/M

Income tax
 expense/(benefit)   (9,223)        (973)       4,774    N/M     N/M
                   ---------    ---------    --------- ------  ------

Net income/(loss)
 from continuing
 operations          (5,073)      (3,437)      10,377   47.6     N/M
                   ---------    ---------    --------- ------  ------

Income/(loss) from
 discontinued
 operations, net
 of tax               1,439            -       (1,051)   N/M     N/M
                   ---------    ---------    --------- ------  ------

Net income/(loss)  $ (3,634)    $ (3,437)    $  9,326    5.7 %   N/M
                   =========    =========    ========= ======  ======

Earnings per basic
 common share
  Income/(loss)
   from continuing
   operations      $  (0.32)    $  (0.22)    $   0.61   45.5 %   N/M
  Income/(loss)
   from
   discontinued
   operations          0.09            -        (0.06)   N/M     N/M
                   ---------    ---------    --------- ------  ------
    Earnings per
     basic common
     share         $  (0.23)    $  (0.22)    $   0.55    4.5 %   N/M

Earnings per
 diluted common
 share
  Income from
   continuing
   operations           N/A          N/A     $   0.58    N/M     N/M
  Loss from
   discontinued
   operations           N/A            -        (0.06)   N/M     N/M
                   ---------    ---------    --------- ------  ------
     Earnings per
      diluted
      common share      N/A (1)      N/A (1) $   0.52    N/M     N/M

Weighted average
 number of common
 shares
 outstanding
   Basic             16,072       15,829       17,073    1.5 %  (5.9)%
   Diluted           16,709       16,634       17,919    0.5 %  (6.8)%



                                        Six Months Ended
                                     ----------------------
                                     Jun. 30,     Jun. 30,   Percent
(Amounts in thousands, except per      2008         2007    Inc/(Dec)
 share data)
                                     ---------    --------- ----------
Revenues:
  Investment banking                 $ 87,449     $158,605     (44.9)%
  Institutional brokerage              81,008       80,291       0.9
  Interest                             28,273       31,226      (9.5)
  Asset management                      8,670          199       N/M
  Other income/(loss)                  (2,060)         324       N/M
                                     ---------    --------- ---------
    Total revenues                    203,340      270,645     (24.9)

  Interest expense                     12,704       11,119      14.3
                                     ---------    --------- ---------

    Net revenues                      190,636      259,526     (26.5)
                                     ---------    --------- ---------

Non-interest expenses:
  Compensation and benefits           131,136      151,823     (13.6)
  Occupancy and equipment              16,243       16,571      (2.0)
  Communications                       12,608       12,256       2.9
  Floor brokerage and clearance         6,553        7,691     (14.8)
  Marketing and business development   13,477       12,061      11.7
  Outside services                     20,248       16,439      23.2
  Other operating expenses              9,077        4,950      83.4
                                     ---------    --------- ---------
    Total non-interest expenses       209,342      221,791      (5.6)%
                                     ---------    --------- ---------

Income/(loss) from continuing
 operations before income tax
 expense/(benefit)                    (18,706)      37,735       N/M

Income tax expense/(benefit)          (10,196)      12,636       N/M
                                     ---------    --------- ---------

Net income/(loss) from continuing
 operations                            (8,510)      25,099       N/M
                                     ---------    --------- ---------

Income/(loss) from discontinued
 operations, net of tax                 1,439       (2,355)      N/M
                                     ---------    --------- ---------

Net income/(loss)                    $ (7,071)    $ 22,744       N/M
                                     =========    ========= =========

Earnings per basic common share
  Income/(loss) from continuing
   operations                        $  (0.53)    $   1.47       N/M
  Income/(loss) from discontinued
   operations                            0.09        (0.14)      N/M
                                     ---------    --------- ---------
    Earnings per basic common share  $  (0.44)    $   1.33       N/M

Earnings per diluted common share
  Income from continuing operations       N/A     $   1.40       N/M
  Loss from discontinued operations       N/A        (0.13)      N/M
                                     ---------    --------- ---------
     Earnings per diluted common
      share                               N/A (1) $   1.27       N/M

Weighted average number of common
 shares outstanding
   Basic                               15,951       17,072      (6.6)%
   Diluted                             16,671       17,969      (7.2)%


N/M - Not meaningful
N/A - Not applicable

(1) In accordance with SFAS 128, earnings per diluted common share is
 not calculated in periods a loss is incurred.
Piper Jaffray Companies
Preliminary Unaudited Revenues From Continuing Operations (Detail)


                       Three Months Ended        Percent Inc/(Dec)
                   --------------------------- ----------------------
                   Jun. 30, Mar. 31, Jun. 30,    2Q '08      2Q '08
(Dollars in          2008     2008     2007    vs. 1Q '08  vs. 2Q '07
 thousands)
                   -------- -------- --------- ----------  ----------
Investment banking
  Financing
     Equities      $ 8,705  $16,518  $ 40,075      (47.3)%     (78.3)%
     Debt           15,297   19,370    25,194      (21.0)      (39.3)
  Advisory
   services         11,256   25,325    11,706      (55.6)       (3.8)
                   -------- -------- --------- ----------  ----------
Total investment
 banking            35,258   61,213    76,975      (42.4)      (54.2)

Institutional
 sales and trading
  Equities          35,345   31,180    28,735       13.4        23.0
  Fixed income      20,804    2,339    17,116        N/M        21.5
                   -------- -------- --------- ----------  ----------
Total
 institutional
 sales and trading  56,149   33,519    45,851       67.5        22.5

Asset management     4,697    3,973        72       18.2         N/M

Other
 income/(loss)      (1,199)  (2,974)     (322)     (59.7)      272.4

                   -------- -------- --------- ----------  ----------
Net revenues       $94,905  $95,731  $122,576       (0.9)%     (22.6)%
                   ======== ======== ========= ==========  ==========


                                           Six Months Ended
                                          ------------------
                                          Jun. 30,  Jun. 30,  Percent
(Dollars in thousands)                      2008      2007   Inc/(Dec)
                                          --------- -------- ---------
Investment banking
  Financing
     Equities                             $ 25,223  $ 80,785   (68.8)%
     Debt                                   34,667    45,163   (23.2)
  Advisory services                         36,581    36,582       -
                                          --------- -------- --------
Total investment banking                    96,471   162,530   (40.6)

Institutional sales and trading
  Equities                                  66,525    59,857    11.1
  Fixed income                              23,143    36,285   (36.2)
                                          --------- -------- --------
Total institutional sales and trading       89,668    96,142    (6.7)

Asset management                             8,670       199     N/M

Other income/(loss)                         (4,173)      655     N/M

                                          --------- -------- --------
Net revenues                              $190,636  $259,526   (26.5)%
                                          ========= ======== ========


N/M - Not meaningful
Piper Jaffray Companies
Selected Municipal Securities Information
                                                   Market Value
                                            --------------------------
                                            Mar. 31, Jun. 30, Jul. 14,
                                              2008     2008     2008
                                            -------- -------- --------

Selected Trading Securities Information:
Variable Rate Demand Notes                    $135.5    $43.2    $62.9

Auction Rate Municipal Securities             $249.7    $85.0    $50.3

CONTACT: Piper Jaffray Companies
Investor Relations:
Jennifer A. Olson-Goude, 612-303-6277
or
Media Relations:
Rob Litt, 612-303-8266

SOURCE: Piper Jaffray Companies