en & pany (COHN) - 2024 Q4 - Annual Report

Asset Management and Revenue - As of December 31, 2024, the company had approximately $2,325,000 in assets under management (AUM), with 42% in CDOs[320]. - The company has not completed a new securitization since 2008, leading to a decline in asset management revenue from historical highs due to CDO asset declines[331]. - A significant portion of the company's asset management revenue is derived from CDO management, which has been negatively impacted by maturities, repayments, and defaults[331]. - Asset management fees increased by$ 1,672, or 23%, to $9,009 for the year ended December 31, 2024, compared to$ 7,337 for 2023[362]. - New issue and advisory revenue increased by $35,158, or 124%, to$ 63,422 for the year ended December 31, 2024, compared to $28,264 for 2023[366]. - Total revenues increased by$ 38,594, or 87%, to $82,981 for the year ended December 31, 2023, compared to$ 44,387 for 2022[414]. Financial Performance - Revenues decreased by $3,383, or 4%, to$ 79,598 for the year ended December 31, 2024, compared to $82,981 for 2023[354]. - Net income decreased by$ 2,210, or 21%, to $8,189 for the year ended December 31, 2024, compared to$ 10,399 for 2023[353]. - Principal transactions and other income decreased by $45,696, or 278%, resulting in a total of$ (29,242) for the year ended December 31, 2024[353]. - The net income attributable to the non-controlling interest decreased from $19,590 in 2023 to$ 8,675 in 2024, a decline of approximately 56%[407]. - The company reported a tax benefit of ( $329) for the year ended December 31, 2024, compared to an expense of$ 5,545 in 2023, indicating a significant turnaround[401]. - The total net income attributable to the Operating LLC was $(25,063) thousand for 2023, with a significant loss attributed to wholly owned subsidiaries[467]. Expenses and Cost Management - Operating expenses increased by$ 11,501, or 15%, to $87,621 for the year ended December 31, 2024, compared to$ 76,120 for 2023[353]. - Compensation and benefits increased by $4,296, or 8%, to$ 56,388 for the year ended December 31, 2024, compared to $52,092 for the year ended December 31, 2023[384]. - Professional fee and other operating expenses increased by$ 5,125, or 55%, to $14,421 for the year ended December 31, 2024, compared to$ 9,296 for the year ended December 31, 2023[391]. - Business development, occupancy, and equipment expenses increased by $1,413, or 27%, to$ 6,617 for the year ended December 31, 2024, compared to $5,204 for the year ended December 31, 2023[388]. - Operating expenses increased by$ 3,770, or 5%, to $76,120 for the year ended December 31, 2023, compared to$ 72,350 for 2022[440]. Market Conditions and Economic Impact - The overall business environment remains unpredictable, influenced by economic conditions, market volatility, and competition[325]. - Rising interest rates have negatively impacted mortgage activity and overall transaction volumes in financial markets, potentially pushing the U.S. into recession[1]. - The U.S. Federal Reserve's actions to raise interest rates have negatively impacted the company's business, particularly during periods of elevated rates[342]. - The mortgage group's revenue is highly dependent on U.S. mortgage origination volumes, which are sensitive to interest rates and economic conditions[341]. Investments and Financial Instruments - The company’s redeemable financial instruments decreased from $6,526 in 2023 to$ 5,821 in 2024, a reduction of approximately 11%[395]. - The company had no redeemable financial instruments as of December 31, 2024, down from $7,868 in 2023[512]. - The CREO JV invests primarily in multi-family commercial real estate mortgage-backed loans, carrying the investment at its reported NAV[377]. - The U.S. Insurance JV invests in insurance company debt, also carried at its reported NAV[378]. - The total par amount owed by the company to the trusts is$ 49,614,000, while the common stock held by the company in the trusts is valued at $1,489,000[514]. Cash Flow and Liquidity - Cash flow from operating activities for 2024 was$ 9,475 thousand, a recovery from $(39,660) thousand in 2023[480]. - Cash and cash equivalents increased to$ 19,590 thousand as of December 31, 2024, up from $10,650 thousand at the end of 2023, indicating improved liquidity[481]. - The company generated cash from investing activities amounting to$ 16,506 thousand in 2024, compared to $38,123 thousand in 2023[480]. - The cash flow from financing activities was$ (16,717) thousand in 2024, reflecting ongoing capital management efforts[480]. - The cash used in operating activities included a net cash outflow of $77,599 related to working capital fluctuations and a net cash inflow of$ 65,282 from trading activities[487]. Debt and Obligations - Long-term indebtedness increased to $34,904 as of December 31, 2024, compared to$ 29,716 in 2023[508]. - Total contractual obligations as of December 31, 2024, amount to $133,089,000[517]. - Operating lease arrangements total$ 22,054,000, with $2,022,000 due in less than one year[517]. - Maturity of 2024 Notes is$ 5,146,000, with $2,573,000 due in less than one year[517]. - Interest on junior subordinated notes totals$ 50,220,000, with $4,292,000 due in less than one year[517]. Future Outlook and Strategic Initiatives - The company aims to address margin compression by diversifying its fixed income trading platform and expanding product lines[340]. - The company believes it can fund current operations and meet contractual obligations through existing cash resources and credit sources[517]. - There are uncertainties in the economy that may affect the company's ability to replace existing financing or find additional financing in the future[517].