en & pany (US:COHN)2020-05-08 17:33Financial Performance - Total revenues increased by $6,630, or 60%, to $17,770 for the three months ended March 31, 2020, compared to $11,140 for the same period in 2019[420]. - Net trading revenue rose by $9,837, or 113%, to $18,561 for the three months ended March 31, 2020, from $8,724 for the same period in 2019[421]. - Asset management fees decreased by $387, or 19%, to $1,615 for the three months ended March 31, 2020, from $2,002 for the same period in 2019[432]. - Principal transactions and other income decreased by $2,820, resulting in a loss of $2,406 for the three months ended March 31, 2020[420]. - Operating income/loss was $(9,445) for the three months ended March 31, 2020, compared to $(68) for the same period in 2019, reflecting a significant decline[420]. - Net income/loss attributable to Cohen & Company Inc. was $(3,102) for the three months ended March 31, 2020, compared to $(1,202) for the same period in 2019, a decrease of $1,900 or 158%[420]. - As of March 31, 2020, assets under management (AUM) totaled $2,651,173, a decrease from $2,775,309 as of March 31, 2019[429]. - Operating expenses increased by $16,007, or 143%, to $27,215 from $11,208 year-over-year[448]. - Compensation and benefits rose by $7,770, or 122%, to $14,134, compared to $6,364 in the previous year[450]. - The net cash flow for the three months ended March 31, 2020 was $77,150 million, compared to $(4,823) million for the same period in 2019[482]. Asset Management and Capital - As of March 31, 2020, the company had approximately $2.65 billion in assets under management (AUM), with 79.1% in CDOs[390]. - The company has not completed a new securitization since 2008, leading to a decline in asset management revenue from historical highs[390]. - The company's mortgage group's revenue is highly dependent on U.S. mortgage origination volumes, which are sensitive to interest rates and economic conditions[402]. - The company expects challenges in raising capital for new funds and a potential reduction in AUM due to lower returns and increased investor liquidity needs[405]. - Asset management revenue from company-sponsored CDOs increased by $19 to $969, compared to $950 for the same period in 2019, reflecting a 2% growth[435]. - Other asset management revenue decreased by $406 to $646, down from $1,052 in the prior year, representing a 39% decline[439]. Impairment and Goodwill - The company recorded an impairment loss of $7,883,000 for goodwill related to JVB due to the impact of COVID-19[403]. - The company reported an impairment of goodwill amounting to $7,883 for the three months ended March 31, 2020[420]. - Impairment of goodwill recorded was $7,883 due to financial market volatility from COVID-19[455]. Debt and Financing - The company raised $4,500 million from the issuance of 2020 Senior Notes during the three months ended March 31, 2020[477]. - The company repaid $4,386 million of the 2019 Senior Notes and $4,277 million of the LegacyTexas Credit Facility during the three months ended March 31, 2020[477]. - The company drew $17,500 million on the 2019 FT Revolver during the three months ended March 31, 2020[477]. - As of March 31, 2020, total non-convertible debt amounted to $61,864 million, an increase from $48,861 million as of December 31, 2019[509]. - The company has $15,000 million in 8.00% convertible senior notes maturing in March 2022[509]. - The total par amount owed to junior subordinated notes is $49,614 million, with a yield to maturity of 15.04%[510]. - Redeemable financial instruments totaled $16,907 million as of March 31, 2020, slightly down from $16,983 million at the end of 2019[515]. - The company has significant contractual obligations totaling $149,372 million, with $27,788 million due within one year[520]. - Interest on the 2020 Senior Notes is projected at $993 million, with $540 million due in the first year[520]. - The company expects to meet its contractual obligations through existing cash resources and other credit sources[521]. Cash Flow and Liquidity - The cash flow from operating activities for the three months ended March 31, 2020 was $64,470 million, a substantial increase compared to $(9,270) million for the same period in 2019[482][485]. - As of March 31, 2020, cash and cash equivalents were $85,454 million, reflecting an increase of $77,150 million from December 31, 2019[485]. - Cash provided by operating activities was $64,470, consisting of net cash inflows of $100,315 from working capital fluctuations and net cash outflows of $34,964 from trading activities[487]. - Cash provided by investing activities was $30, primarily from $2,309 received from sales and returns of principal from other investments, offset by $119 used for purchasing other investments[488]. - Cash provided by financing activities totaled $12,721, including $17,500 from the 2019 FT Revolver and $4,500 from the issuance of 2020 Senior Notes, partially offset by $9,163 in debt repayment[488]. Risk Management - The company monitors its investments and trading securities on a daily basis and conducts in-depth monthly analyses to manage market risk[542]. - The company requires counterparties to post cash or other liquid collateral to manage counterparty risk effectively[543]. - The fair value of fixed rate securities is sensitive to interest rate changes, with low credit rated securities being less sensitive[533]. - The company maintains a haircut on collateralized securities financing transactions to mitigate risks associated with declining security values[544]. - In matched book repo business, the company seeks to earn net interest income while managing interest rate and funding risks[548]. - The weighted average maturity of reverse repurchase agreements is monitored daily to limit differences compared to matched repurchase agreements[549]. Regulatory and Compliance - The company is subject to significant limitations on capital distributions from JVB due to regulatory requirements and internal counterparty credit requirements[496]. - Total equity on a consolidated basis was $36,913, while JVB's total equity was $93,271, indicating an equity deficit of $56,358 for other subsidiaries[496]. - The company has established disclosure controls and procedures to ensure timely reporting of material information as of March 31, 2020[551]. - Disclosure controls and procedures were evaluated as effective as of March 31, 2020, by the CEO and CFO[552]. - The company has no changes in internal control over financial reporting that materially affected its operations during the quarter ended March 31, 2020[553].