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MINNEAPOLIS, Jan. 23 /PRNewswire-FirstCall/ -- Piper Jaffray Companies (NYSE: PJC) today announced net income from continuing operations of $15.1 million, or $0.91 per diluted share, for the quarter ended December 31, 2007. These results compare to $26.7 million, or $1.49 per diluted share, in the year-ago period, which included a benefit of $0.73 per diluted share due to a reduction of a reserve related to a particular industry-wide litigation matter. Excluding that benefit, net income from continuing operations was $0.76 per diluted share in the fourth quarter of 2006. Net income from continuing operations in the third quarter of 2007 was $4.8 million, or $0.28 per diluted share.

For the fourth quarter of 2007, continuing operations generated net revenues of $146.5 million and were essentially the same as the fourth quarter of 2006, which was a record for the firm since becoming a public company. Net revenues rose 58 percent compared to the third quarter of 2007.

"We are pleased to report solid quarterly financial results for our firm. Our equity financing, equity sales and trading, and advisory services reported very strong results," said Chairman and Chief Executive Officer Andrew S. Duff. "Although challenging capital markets conditions drove weaker results in high yield and structured products, our other businesses more than offset these lower revenues."

Mr. Duff said, "In 2007, we demonstrated meaningful progress against our growth initiatives, including the acquisitions of FAMCO and Goldbond and enhancing our capabilities in principal activities. Building on these initiatives is key to expanding and diversifying our business."

    Results of Continuing Operations

    Fourth Quarter
    Net Revenues

    Investment Banking

For the fourth quarter of 2007, total investment banking revenues were $96.5 million, up 2 percent compared to the fourth quarter of 2006, and up 84 percent compared to the third quarter of 2007. The improved revenues were driven by robust equity financings and M&A activity.

    -- Equity financing revenues were $43.0 million, up 30 percent compared to
       the fourth quarter of 2006, and up 136 percent compared to the third
       quarter of 2007.  This strong performance was driven by a higher number
       of completed transactions.
    -- Advisory services revenues were $36.7 million, up 6 percent compared to
       the year-ago period, and up 128 percent compared to the third quarter
       of 2007. The stronger performance was driven by improved results from
       U.S. M&A activity.   Europe and Asia advisory services also contributed
       to the strong results.
    -- Fixed income financing revenues were $16.8 million, down 37 percent
       compared to the same period last year, during which public finance
       generated near record underwriting revenues. Fixed income financing
       revenues decreased 8 percent compared to the third quarter of 2007,
       although Public finance underwriting revenues remained consistent.

The following is a recap of completed deal information for the fourth quarter of 2007:

    -- 40 equity financings raising a total of $7.0 billion in capital, and
       the company was bookrunner on 9 of the equity financings.  Of the
       completed transactions, 26 were U.S. public offerings, placing the
       company 13th nationally, based on the number of completed transactions.
       (Source:  Dealogic)
    -- 19 merger and acquisition transactions with an aggregate enterprise
       value of $6.3 billion.  The number of deals and the enterprise value
       include disclosed and undisclosed transactions.
       (Source:  Piper Jaffray)
    -- 97 tax-exempt issues with a total par value of $1.8 billion, ranking
       the company seventh nationally, based on the number of completed
       transactions. (Source:  Thomson Financial)


    Institutional Sales and Trading

For the quarter ended December 31, 2007, institutional sales and trading generated net revenues of $46.0 million, down 5 percent from the same quarter last year and up 19 percent compared to the third quarter of 2007.

    -- Equities sales and trading revenues were $34.9 million, up 19 percent
       from the year-ago period and up 39 percent compared to the third
       quarter of 2007. The increases resulted from stronger revenues from
       U.S. equities and the addition of Hong Kong equities revenues from
       Piper Jaffray Asia.
    -- Fixed income sales and trading revenues were $11.1 million, a decrease
       of 42 percent compared to the same period last year, and a decrease of
       19 percent compared to the third quarter of 2007.  The declines were
       primarily driven by lower revenues from high-yield and structured
       products, which continued to be negatively impacted by the challenging
       market conditions.


    Fourth Quarter
    Non-Interest Expenses

For the fourth quarter of 2007, compensation and benefits expenses were $85.7 million, down 3 percent compared to the fourth quarter of 2006 and up 58 percent compared to the third quarter of 2007. The increase compared to the sequential third quarter was due to higher revenues.

The compensation ratio for the fourth quarter of 2007 was 58.5 percent, compared to 60.4 percent in the fourth quarter of 2006, and 58.5 percent in the third quarter of 2007.

For the fourth quarter of 2007, non-compensation expenses were $41.7 million, of which $2.5 million were attributable to FAMCO and Goldbond. The prior-year non-compensation expenses were $16.0 million, which included a $21.3 million benefit due to the reduction of a litigation reserve. Excluding that benefit, non-compensation expenses were $37.3 million. Compared to the third quarter of 2007, non-compensation expenses increased 28 percent, which was mainly driven by business expansion, including the addition of FAMCO and Goldbond, increased business activity resulting in higher marketing and travel expenses, and higher legal fees.

For the fourth quarter of 2007, pre-tax operating margin was 13.1 percent, compared to 28.6 percent for the fourth quarter of 2006, which included a 14.5 percentage-point benefit due to the litigation reserve reduction. Excluding that benefit, pre-tax operating margin was 14.1 percent. For the third quarter of 2007, pre-tax operating margin was 6.5 percent.

Full Year 2007

For the full year of 2007, net income from continuing operations was $45.0 million, or $2.59 per diluted share. For the full year of 2006, net income from continuing operations was $62.9 million, or $3.32 per diluted share, which included a $0.69 per diluted share benefit from the reduction of a litigation reserve. Excluding that benefit, net income from continuing operations was $2.63 per diluted share for 2006.

For 2007, net revenues from continuing operations were $498.9 million, slightly less than $502.9 million in revenues reported in 2006. Despite challenging market conditions in the last half of 2007, investment banking revenues rose 2 percent compared to 2006. Equity financing revenues topped 2006 by 14 percent and more than offset lower advisory services revenues and slightly lower debt financing revenues. Equity sales and trading revenues were essentially flat compared to 2006, while fixed income sales and trading revenues, which were impacted by the turmoil in the financial markets during the last half of the year, declined compared to 2006.

The following is a recap of completed deal information for the full year of 2007:

    -- 117 equity financings raising a total of $17.5 billion in capital, and
       the company was bookrunner on 28 of the equity financings.  Of the
       completed transactions, 82 were U.S. public offerings, placing the
       company 15th nationally, based on the number of completed transactions.
       (Source:  Dealogic)
    -- 53 merger and acquisition transactions with an aggregate enterprise
       value of $15.7 billion.  The number of deals and the enterprise value
       include disclosed and undisclosed transactions. (Source:  Piper
       Jaffray)
    -- 420 tax-exempt issues with a total par value of $6.8 billion, ranking
       the company seventh nationally, based on the number of completed
       transactions. (Source:  Thomson Financial)


    Full Year 2007
    Non-Interest Expenses

For the full year of 2007, compensation and benefits expenses were $291.9 million, essentially unchanged compared to 2006. The compensation ratio for 2007 was 58.5 percent compared to 57.9 percent for 2006.

Non-compensation expenses for the full year were $144.1 million, compared to $113.8 million in 2006, which included a $21.3 million benefit due to the reduction of a litigation reserve. Excluding that benefit, non-compensation expenses were $135.0 million. Increased non-compensation expenses in 2007 were driven by expansion of the business, including the acquisitions of FAMCO and Goldbond, and implementation costs related to a new back office system.

For the full year of 2007, pre-tax operating margin from continuing operations was 12.6 percent compared to 19.5 percent in 2006, which included a 4.3 percentage-point benefit due to the litigation reserve reduction. Excluding that benefit, pre-tax operating margin was 15.2 percent.



    Additional Shareholder Information

                                 As of           As of            As of
                             Dec. 31, 2007   Sept. 30, 2007    Dec. 31, 2006

    Full time employees:      1,238*           1,131           1,108
    FAMCO AUM                  $9.0 billion     $8.3 billion    $8.8 billion
    Shareholders' equity:      $913 million     $889 million    $924 million
    Annualized Return on
     Average Tangible
     Shareholders' Equity(1)   10.2%             2.6%           12.3%
    Book value per share:    $58.26           $56.80          $54.43
    Tangible book value
     per share:              $38.99           $38.73          $40.71

    *    Increase primarily due to Goldbond acquisition.

    (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
                               Three Months   Three Months
                                  Ended          Ended          As of
    (Dollars in thousands)    Dec. 31, 2007  Dec. 31, 2006  Dec. 31, 2007

    Shareholders' equity        $ 900,953      $ 904,403      $ 912,589
    Deduct: Goodwill and
             identifiable
             intangible assets    310,876        233,234        301,948
    Tangible shareholders'
     equity                     $ 590,077      $ 671,169      $ 610,641


    Conference Call

Andrew S. Duff, chairman and chief executive officer, and Thomas P. Schnettler, vice chairman and chief financial officer, will host a conference call to discuss third quarter results on Wednesday, January 23 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 http://www.piperjaffray.com or by dialing (866) 244-9933, or (706) 758-0864 internationally, and referring to conference ID 30362326 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 January 23, 2008 at the same web address or by calling (800) 642-1687, or (706) 645-9291 internationally.

About Piper Jaffray

Piper Jaffray Companies (NYSE: PJC) 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. (http://www.piperjaffray.com)

Cautionary Note Regarding Forward-Looking Statements

This press release contains 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, the amount and timing of restructuring expenses associated with transaction activity, 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) restructuring costs associated with transaction activity are difficult to predict accurately and may be higher than we anticipate due to unforeseen expenses or other difficulties, 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, 2006 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, 2006, and updated in our subsequent reports filed with the SEC (available at our Web site at http://www.piperjaffray.com and at the SEC Web site at http://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.



     Piper Jaffray Companies
     Preliminary Unaudited Results of Operations

                                   Three Months Ended        Percent Inc/(Dec)
                                                              4Q '07   4Q '07
     (Amounts in thousands,     Dec. 31, Sept. 30, Dec. 31,   vs. 3Q   vs. 4Q
     except per share data)      2007     2007      2006        '07      '06

     Revenues:
       Investment banking      $93,480   $50,276   $92,963      85.9%    0.6%
       Institutional brokerage  39,881    31,419    39,421      26.9     1.2
       Interest                 14,644    15,003    19,241      (2.4)  (23.9)
       Asset management          5,071       903       205       N/M     N/M
       Other income                349       940     1,305       N/M     N/M
         Total revenues        153,425    98,541   153,135      55.7     0.2

       Interest expense          6,923     5,647     6,517      22.6     6.2

         Net revenues          146,502    92,894   146,618      57.7    (0.1)

     Non-interest expenses:
       Compensation and
        benefits                85,704    54,343    88,609      57.7    (3.3)
       Occupancy and
        equipment                8,710     7,201     8,955      21.0    (2.7)
       Communications            6,476     6,040     6,452       7.2     0.4
       Floor brokerage and
        clearance                3,446     3,564     3,485      (3.3)   (1.1)
       Marketing and
        business development     8,494     6,064     7,543      40.1    12.6
       Outside services         10,021     8,134     8,581      23.2    16.8
       Cash award program          481       450       307       6.9    56.7
       Other operating expenses  4,025     1,064   (19,294)    278.3     N/M
         Total non-interest
          expenses             127,357    86,860   104,638      46.6    21.7

     Income from continuing
      operations before
      income tax expense        19,145     6,034    41,980     217.3   (54.4)

     Income tax expense          4,029     1,222    15,244     229.7   (73.6)

     Net income from
      continuing operations     15,116     4,812    26,736     214.1   (43.5)

     Income/(loss) from
      discontinued operations,
      net of tax                     -      (456)   (6,090)      N/M     N/M

     Net income                $15,116    $4,356   $20,646     247.0%  (26.8)%

     Earnings per basic
      common share
       Income from continuing
         operations              $0.97     $0.30     $1.58     223.3%  (38.6)%
       Income/(loss) from
        discontinued
        operations                   -     (0.03)    (0.36)      N/M     N/M
         Earnings per basic
          common share           $0.97     $0.27     $1.22     259.3%  (20.5)%

     Earnings per
      diluted common share
       Income from
        continuing
        operations               $0.91     $0.28     $1.49     225.0%  (38.9)%
       Income/(loss)from
        discontinued
        operations                   -     (0.03)    (0.34)      N/M     N/M
         Earnings per diluted
          common share           $0.91     $0.26     $1.15     250.0%  (20.9)%

     Weighted average number
      of common shares
      outstanding
       Basic                    15,663    16,096    16,973      (2.7)%  (7.7)%
       Diluted                  16,587    16,904    18,004      (1.9)%  (7.9)%


                                            For the Year Ended
     (Amounts in thousands,                 Dec. 31,    Dec. 31,    Percent
      except per share data)                  2007        2006     Inc/(Dec)

     Revenues:
       Investment banking                   $302,361    $298,309      1.4%
       Institutional brokerage               151,591     160,502     (5.6)
       Interest                               60,873      64,110     (5.0)
       Asset management                        6,173         222      N/M
       Other income                            1,613      12,094    (86.7)
         Total revenues                      522,611     535,237     (2.4)

       Interest expense                       23,689      32,303    (26.7)

         Net revenues                        498,922     502,934     (0.8)

     Non-interest expenses:
       Compensation and benefits             291,870     291,265      0.2
       Occupancy and equipment                32,482      30,660      5.9
       Communications                         24,772      23,189      6.8
       Floor brokerage and clearance          14,701      13,292     10.6
       Marketing and business development     26,619      24,664      7.9
       Outside services                       34,594      28,053     23.3
       Cash award program                      1,677       2,980    (43.7)
       Other operating expenses                9,293      (9,042)     N/M
         Total non-interest expenses         436,008     405,061      7.6

     Income from continuing operations
      before income tax expense               62,914      97,873    (35.7)

     Income tax expense                       17,887      34,974    (48.9)

     Net income from continuing
      operations                              45,027      62,899    (28.4)

     Income/(loss) from discontinued
      operations, net of tax                  (2,811)    172,354      N/M

     Net income                              $42,216    $235,253    (82.1)%

     Earnings per basic common share
       Income from continuing operations       $2.73       $3.49    (21.8)%
       Income/(loss) from discontinued
        operations                             (0.17)       9.57      N/M
         Earnings per basic common share       $2.56      $13.07    (80.4)%

     Earnings per diluted common share
       Income from continuing operations       $2.59       $3.32    (22.0)%
       Income/(loss) from discontinued
        operations                             (0.16)       9.09      N/M
         Earnings per diluted common share     $2.43      $12.40    (80.4)%

     Weighted average number of common
      shares outstanding
       Basic                                  16,474      18,002     (8.5)%
       Diluted                                17,355      18,968     (8.5)%

     N/M - Not meaningful



     Piper Jaffray Companies
     Preliminary Unaudited Revenues From Continuing Operations (Detail)

                                     Three Months Ended      Percent Inc/(Dec)
                                                              4Q '07   4Q '07
                                Dec. 31, Sept. 30, Dec. 31,   vs. 3Q   vs. 4Q
     (Dollars in thousands)       2007     2007      2006       '07      '06

     Investment banking
       Financing
         Equities               $42,985   $18,211   $33,133    136.0%   29.7%
         Debt                    16,810    18,211    26,741     (7.7)  (37.1)
       Advisory services         36,747    16,120    34,752    128.0     5.7
     Total investment banking    96,542    52,542    94,626     83.7     2.0

     Institutional sales
      and trading
       Equities                  34,912    25,192    29,434     38.6    18.6
       Fixed income              11,079    13,612    19,033    (18.6)  (41.8)
     Total institutional
      sales and trading          45,991    38,804    48,467     18.5    (5.1)

     Asset management             5,071       903       205      N/M     N/M

     Other income/(loss)         (1,102)      645     3,320      N/M     N/M

     Net revenues              $146,502   $92,894  $146,618     57.7%   (0.1)%


                                            For the Year Ended
                                            Dec. 31,    Dec. 31,   Percent
     (Dollars in thousands)                   2007        2006     Inc/(Dec)

     Investment banking
       Financing
         Equities                           $141,981    $124,304     14.2%
         Debt                                 80,323      82,861     (3.1)
       Advisory services                      89,449      97,225     (8.0)
     Total investment banking                311,753     304,390      2.4

     Institutional sales and trading
       Equities                              119,961     120,341     (0.3)
       Fixed income                           60,834      70,134    (13.3)
     Total institutional
      sales and trading                      180,795     190,475     (5.1)

     Asset management                          6,173         222      N/M

     Other income/(loss)                         201       7,847    (97.4)

     Net revenues                           $498,922    $502,934     (0.8)%

     N/M - Not meaningful

SOURCE Piper Jaffray Companies

CONTACT:
Jennifer A. Olson-Goude, Investor Relations, +1-612-303-6277
or
Rob Litt, Media Relations, +1-612-303-8266
both of Piper Jaffray Companies

/Web site: http://www.piperjaffray.com