Siebert(SIEB) - 2024 Q2 - Quarterly Report

Financial Performance - Total revenue for the three months ended June 30, 2024, was $20,863,000, an increase of 18.9% compared to $17,592,000 for the same period in 2023[12] - Net income for the three months ended June 30, 2024, was $4,047,000, representing a 48.4% increase from $2,728,000 in the same period last year[12] - Operating income for the six months ended June 30, 2024, was $10,681,000, up 19.0% from $8,972,000 for the same period in 2023[12] - Net income for the second quarter of 2024 was $7,734,000, an increase from $5,943,000 in the same period of 2023, representing a growth of approximately 30%[17] - Basic and diluted net income available to common stockholders per share was $0.10 for the three months ended June 30, 2024, compared to $0.07 for the same period in 2023[12] Expenses and Liabilities - The company reported total expenses of $15,284,000 for the three months ended June 30, 2024, compared to $12,933,000 for the same period in 2023, reflecting a 17.9% increase[12] - Employee compensation and benefits for the three months ended June 30, 2024, were $10,307,000, a 27.6% increase from $8,080,000 in the same period last year[12] - Total liabilities and equity amounted to $609,110,000 as of June 30, 2024, down from $801,800,000 in the previous year[11] Equity and Retained Earnings - Total stockholders' equity increased to $70,303,000 as of June 30, 2023, compared to $52,145,000 at the end of March 31, 2023[14] - The company’s retained earnings increased to $24,881,000 as of June 30, 2023, from $22,178,000 at the end of March 31, 2023[14] - The balance of equity increased to $79,178,000 as of June 30, 2024, up from $74,831,000 at the end of March 2024, showing an increase of approximately 6%[15] Cash Flow and Investments - Total cash and cash equivalents at the end of the period were $219,835,000, down from $262,203,000 at the end of June 2023, indicating a decrease of about 16%[17] - Operating activities resulted in a net cash used of $57,322,000 for the second quarter of 2024, compared to $49,561,000 in the same quarter of 2023, reflecting an increase in cash outflow of approximately 15%[17] - The company incurred a net cash used in investing activities of $35,000 for the second quarter of 2024, compared to $1,154,000 in the same period of 2023[17] Tax and Regulatory Matters - The effective tax rate for the three months ended June 30, 2024 was 27.5%, compared to 26.2% for the same period in 2023[73] - The company recorded an income tax provision of $1,532,000 on pre-tax book income of $5,579,000 for the three months ended June 30, 2024[73] - The Company is evaluating the impact of ASU 2023-09, which is expected to bring considerable changes to its income tax footnote, effective for annual periods beginning after December 15, 2024[32] Operational Developments - The company has a single operating segment focused on securities brokerage and asset management, with all revenues derived from U.S. operations[23] - The Company entered into a Stock Purchase Agreement with Kakaopay, issuing 8,075,607 shares at a price of $2.15 per share, representing 19.9% of the outstanding equity securities on a fully diluted basis[36] - The Company incurred costs of approximately $1.8 million for technology vendors related to its Retail Platform development projects as of June 30, 2024[85] Future Outlook - The company anticipates continued growth in revenue and net income, driven by strategic initiatives and market expansion efforts[8] - Future annual minimum payments for operating leases total $2,545,000 as of June 30, 2024[59] - The Company expects considerable changes to its income tax footnote due to ASU 2023-09, effective for annual periods beginning after December 15, 2024[155] Internal Controls and Compliance - Management is implementing measures to remediate previously identified material weaknesses in internal control over financial reporting, expected to be completed prior to the end of 2024[159] - Disclosure controls and procedures were deemed ineffective due to material weaknesses in internal control over financial reporting[158] - The Company has evaluated subsequent events and found no material events requiring disclosure after June 30, 2024[103]