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GLEACHER & COMPANY REPORTS FIRST QUARTER
2013 FINANCIAL RESULTS
NEW YORK, N.Y., May 9, 2013 Gleacher & Company, Inc. (Nasdaq: GLCH) today reported net revenues from continuing operations of $26.9 million, net loss from continuing operations of ($13.7) million, and diluted loss per share of ($0.15).
· Q1 results benefited by performance of Investment Banking
· Company has exited its Fixed Income business
· ClearPoint, now a discontinued operation, closed on sale of substantially all of its assets to Homeward Residential, Inc., a wholly owned subsidiary of Ocwen Financial Corporation
· Companys prospects uncertain
Recent Developments Exit of Fixed Income Businesses
The Company has disclosed, in previous filings, various uncertainties that have adversely impacted counterparty relationships, employee turnover, and operating results. These factors have impacted the overall stability of the Companys platform, and have caused a significant decline in revenue for the first quarter of 2013.
Given these adverse developments, on April 5, 2013 the Companys Board of Directors approved a plan to discontinue operations in its MBS & Rates and Credit Products Divisions. The plan is expected to be completed by the end of the second quarter 2013. Exiting these businesses, together with associated rightsizing of administrative and other support personnel, could impact up to approximately 160 employees. The plan did not include the Companys other business operations, principally Investment Banking.
The Company expects the total charge in connection with this plan will be between $15 million and $20 million. Of the total charge, the Company estimates that between $11 million and $16 million will result in future cash expenditures. The major costs associated with the plan, and an estimate of each, are as follows:
· between $11 million and $13 million related to severance and other compensation costs; and
· between $4 million and $7 million in costs associated with third-party vendor contracts and other costs (excluding lease commitments).
The Company is currently evaluating its alternatives with respect to its lease commitments, principally its headquarters in New York City, and is therefore unable to estimate a lease restructuring cost, if any, at this time. The lease on the Companys headquarters relates to 84,000 square feet of space with an average cost per square foot of $62 and expires April 30, 2025. The Companys plans with regards to this space are uncertain pending the change in the board of directors, which will result from the 2013 Annual Stockholders Meeting to be held May 23. If the Company determines to vacate some or all of this space, it could incur substantial lease restructuring expense, which it would seek to minimize through subleasing or other cost reduction measures.
The following information was filed by Gleacher Company, Inc. (GLCH) on Thursday, May 9, 2013 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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