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JMP Group Reports First Quarter 2018 Financial Results
SAN FRANCISCO--(BUSINESS WIRE)--May 2, 2018--JMP Group LLC (NYSE: JMP), an investment banking and alternative asset management firm, reported financial results today for the quarter ended March 31, 2018.
- The net loss attributable to JMP Group under generally accepted accounting principles, or GAAP, was $0.3 million, or $0.01 per diluted share, compared to a net loss of $4.7 million, or $0.22 per share, for the quarter ended March 31, 2017.
- Total net revenues on a GAAP basis were $27.2 million, compared to $24.4 million for the quarter ended March 31, 2017.
- The operating net loss was $1.6 million, or $0.07 per diluted share, compared to an operating net loss of $2.1 million, or $0.09 per share, for the quarter ended March 31, 2017. For more information about operating net income, including a reconciliation to net income attributable to JMP Group, see the section below titled “Non-GAAP Financial Measures.”
- Adjusted net revenues, which exclude certain non-cash items and non-controlling interests, were $31.7 million, compared to $25.3 million for the quarter ended March 31, 2017. For more information about adjusted net revenues, including a reconciliation to net revenues, see the section below titled “Non-GAAP Financial Measures.”
“We had a disappointing first quarter as a result of some unusual expenses and a net loss on our invested capital,” said Chairman and Chief Executive Officer Joe Jolson. “Nonetheless, JMP Securities continued its strong performance, contributing $0.08 per share—and $0.38 per share on a trailing-four-quarters basis—as equity capital markets fees were stable and strategic advisory revenues rebounded strongly from year-ago levels. We are optimistic about the remainder of the year, despite increased volatility and the recent sell-off in the stock market. Although higher short-term interest rates could hurt more cyclical sectors of the U.S. economy, putting downward pressure on P/E multiples, we anticipate that there will continue to be windows of opportunity for growth companies to raise equity capital as 2018 progresses. During the second quarter, we expect to fully redeploy the excess cash that caused a severe drag on our operating earnings last year, adding to our warehouse credit facility and positioning us to execute on our fifth CLO in the next three to six months.
Segment Results of Operations
At JMP Securities, the broker-dealer segment, adjusted net revenues were $25.3 million, an increase of 34.1% from $18.9 million for the first quarter of 2017. JMP Securities’ operating margin on adjusted net revenues was 9.5%, compared to 1.7% for the first quarter of 2017. The asset management segment reported adjusted net revenues of $4.0 million, a decrease of 24.9% from $5.3 million for the first quarter of 2017. Together, these two segments represent JMP Group’s operating platforms.
JMP Group’s principal investment activities generate net investment income, which has historically more than covered corporate expenses and has contributed to operating earnings through net corporate income. However, in the first quarter of 2018, the company incurred transaction costs of $0.8 million related to the planned initial public offering of Workspace Property Trust, which was withdrawn in February. Additionally, the company recognized a net loss of $0.7 million on an investment in a hedge fund managed by Harvest Capital Strategies and recorded a loan loss provision of $0.9 million in connection with a specific credit underlying certain collateralized loan obligations. Consequently, JMP Group recorded net corporate expense of $2.7 million for the quarter.
A summary of JMP Group’s operating net income per share by segment for the quarter ended March 31, 2018, and for comparable prior periods, is set forth below.
|($ as shown)||Mar. 31, 2018||Dec. 31, 2017||Mar. 31, 2017|
|Operating platform EPS||0.05||0.13||0.02|
|Net corporate income||(0.12)||0.03||(0.11)|
|Operating EPS (diluted)||($0.07)||$0.16||($0.09)|
Note: Due to rounding, numbers in columns above may not sum to totals presented.
For more information about segment reporting, adjusted net revenues, including a reconciliation to net revenues, and operating net income, including a reconciliation to net income, see the section below titled “Non-GAAP Financial Measures.”
The following information was filed by Jmp Group Llc (JMP) on Wednesday, May 2, 2018 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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