Cohen & Company Inc. Q1 2023 Earnings Call

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Okay.

Before we.

Good morning, ladies and gentlemen, welcome to the Cowen and company's first quarter 2023 earnings call. My name is Alicia and I'll be your operator for today before we begin Cohen and company, we'd like to remind everyone that some of the statements. The company makes during this call may contain forward looking statements under.

Let's see.

Security laws. These statements may involve risks and uncertainties that could cause the company's actual results to differ materially from the results discussed in such forward looking statements. The forward looking statements made during this call are made only as of the date this call and the company undertakes.

No obligation to update such statements to reflect subsequent events or circumstances.

The company advises you to read the cautionary note regarding forward looking statements in its earnings release and its most recent annual report on Form 10-K filed with the SEC I would like to now turn the call over to Mr. Lester Brafman, Chief Executive Officer of <unk>.

And income company.

Thank you Alicia and thank you everyone for joining us for our first quarter 2023 earnings call with me on the call is Joe Pooler, our CFO .

Our investment portfolio continues to impact our results as our combined negative principal transactions revenue and loss from equity method affiliates amounted to $3 million for the quarter.

It's a prolonged slump in investment banking and origination resulted in less than expected new issue and advisory revenues during the quarter we saw.

Strong I believe in our team of bankers and originators as we continued to build our pipeline and look forward to more favorable capital markets.

We move forward, we remain focused on enhancing stockholder value in the first quarter, we continued to pay our quarterly dividend now.

Now I will turn the call over to Joe to walk through the quarter's financial highlights in more detail.

Yes.

Thank you Lester will start with our statement of operations, our net loss attributable to Cohen <unk> Company, Inc. Was $2 6 million for the quarter were $1.77 per fully diluted share compared to net loss of $3 million for the prior quarter were $2.10 per foot.

Fully diluted share and net loss of $7 6 million for the prior year quarter were $5.46 per fully diluted share. Our adjusted pre tax loss was $9 6 million for the quarter compared to adjusted pre tax loss of $6 1 million for the prior.

Third quarter, and adjusted pre tax loss of $18 6 million for the prior year quarter.

Note that adjusted pre tax loss is not a measure recognized under U S. GAAP see our disclosures calculations and reconciliations surrounding adjusted pre tax loss in our earnings release.

First quarter 'twenty, three principal transactions and other revenue was negative $2 3 million the negative principal transactions and other revenue was primarily due to mark to market adjustments on our principal investments related to our involvement in the spec market as a sponsor asset manager or an investor which is <unk>.

Resulted in increased holdings of public equity positions and post business combination companies.

Principal transactions revenue includes all gains and losses and income earned on our $22 4 million dollar investment portfolio classified as other investments at fair value on our balance sheet.

Net trading revenue came in at $8 2 million in the first quarter down $1 4 million from the fourth quarter and $3 8 million from the first quarter of 'twenty two.

Decrease from both of the prior quarters was due primarily to lower trading revenue from our mortgage group.

New issue and advisory revenue was <unk> 9 million in the first quarter, a decrease of $3 3 million from the fourth quarter and $2 9 million from the year ago quarter.

Our asset management revenue totaled $2 million in the quarter, which was up.

$3 million from the prior quarter, and <unk> 1 million from the prior year quarter.

Compensation and benefits expense for the quarter was $10 5 million, which was up from the prior quarter and down from the prior year quarter, primarily due to fluctuations in revenue and variable incentive compensation. The number of company employees was 121 at the end of March.

23, compared to 121 as of December of 'twenty, two and 115 as of the year ago March.

Net interest expense for the first quarter of 'twenty, three was $1 6 million, including $1 2 million on our two trust preferred debt instruments of 111000 on our senior notes 65000 on our credit line and 207000 on our redeemable financial instruments.

Loss from equity method affiliates during the quarter totaled 400000.

During the first quarter income tax expense was 600000 compared to $1 3 million in the prior quarter and $1 8 million in the prior year quarter. We will continue to evaluate our operations on a quarterly basis and may make adjustments to our valuation allowances applied against our net operating loss and net.

Capital loss tax assets going forward.

In terms of our balance sheet at the end of the quarter total equity was $82 4 million compared to $94 million as at the end of 2022, the nonconvertible non controlling interest component of total equity was 153000 at the end of the quarter and 17th.

And at the end of December of 'twenty two.

The total equity excluding the nonconvertible non controlling interest component was $82 2 million at the end of the quarter and $11.8 million decrease from $94 million at the end of 2022.

At quarter end consolidated corporate indebtedness was carried at $29 2 million and our redeemable financial instruments were carried at $7 9 million as.

As Lester mentioned, we've declared a quarterly dividend of 25 cents per share payable on June 2nd of 23 to stockholders of record as of May 18 of 23.

The board of directors will continue to evaluate the dividend policy each quarter.

And future decisions regarding dividends may be impacted by quarterly operating results and the Companys capital needs.

I'll turn it back over to Lester.

Yeah.

Or to Alicia to open up the call lines for questions.

Thanks, Joe.

Please correct any offline investor questions to Joe Pooler at 215, 701, 895, two or via E Mail to Investor Relations at current company Dot com the.

The contact information can also be found at the bottom of our earnings release, Operator, you May now open the call line for questions and thank you all for joining us today.

Thank you we will now be discussed.

A question and answer session.

I'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue.

Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

One moment, please while we poll for questions.

There are no further questions at this time I would like to turn the floor back over to Mr. Lester Redfin for closing comments.

Thank you all thank you all for joining us and we look forward to speaking to you for next quarter.

Operator, you can now close the line.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Okay.

Okay.

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