Siebert(US:SIEB)2024-05-22 16:30Financial Performance - Total revenue for Q1 2024 was $20,456,000, an increase of 26.5% compared to $16,170,000 in Q1 2023[19] - Net income available to common stockholders for Q1 2024 was $3,688,000, up from $3,196,000 in Q1 2023, representing a 15.4% increase[19] - Commissions and fees increased to $2,300,000 in Q1 2024, a rise of 24.5% from $1,847,000 in Q1 2023[19] - Interest, marketing, and distribution fees rose to $8,763,000, up 25.6% from $6,973,000 in the same period last year[19] - Net income for the three months ended March 31, 2024, was $3,687,000, an increase of 14.7% compared to $3,215,000 for the same period in 2023[22] - The company reported a basic and diluted net income per share of $0.09 for Q1 2024, compared to $0.10 in Q1 2023[19] - Retail customer net worth increased to $16.6 billion as of March 31, 2024, up from $15.9 billion at the end of 2023, representing a growth of approximately 4.4%[140] Assets and Liabilities - Total current assets decreased to $713,022,000 as of March 31, 2024, down from $773,850,000 at the end of 2023, a decline of 7.8%[18] - Total liabilities decreased to $667,472,000 as of March 31, 2024, compared to $731,091,000 at the end of 2023, a reduction of 8.7%[18] - Stockholders' equity increased to $73,843,000 as of March 31, 2024, up from $69,720,000 at the end of 2023, an increase of 5.1%[18] - Total assets as of March 31, 2024, were $742.303 million, a decrease of $59.497 million or 7.4% from December 31, 2023, primarily due to reduced cash and regulatory securities[159] - Liabilities decreased to $667.472 million as of March 31, 2024, down by $63.619 million or 8.7% from the end of 2023, mainly due to lower payables to customers[160] Cash Flow and Investments - Net cash used in operating activities was $62,041,000 for Q1 2024, compared to $39,014,000 in Q1 2023, indicating a significant increase in cash outflow[22] - Cash and cash equivalents at the end of the period were $2,856,000, down from $3,927,000 a year earlier, reflecting a decrease of 27.3%[22] - Total cash and cash equivalents, and cash and securities segregated for regulatory purposes decreased to $221,029,000 from $259,544,000, a decline of 14.8%[22] - The company reported a net cash used in investing activities of $1,761,000 for Q1 2024, compared to $1,017,000 in Q1 2023, showing an increase in investment expenditures[22] - Cash used in operating activities increased by $23.0 million for the three months ended March 31, 2024, primarily due to changes in receivables and securities transactions[174] - Cash used in investing activities rose by $0.7 million compared to the prior year, driven by the New York office build-out and Retail Platform development[175] Employee Compensation and Benefits - Employee compensation and benefits for Q1 2024 were $10,376,000, a significant increase of 48.5% compared to $6,967,000 in Q1 2023[19] - The Company recognized $394,000 in expenses for employee health claims for the three months ended March 31, 2024, compared to $180,000 for the same period in 2023[107] - The Company granted 50,000 restricted stock units at a price of $1.70, recognizing an equity stock compensation expense of $85,000 for the three months ended March 31, 2024[111] - The Company incurred $135,000 in expenses for 401(k) employee contribution matching for the three months ended March 31, 2024, compared to $0 for the same period in 2023[109] Regulatory and Compliance - The company expects considerable changes to its income tax footnote due to the new accounting standard ASU 2023-09, effective for annual periods beginning after December 15, 2024[42] - The company recorded an uncertain tax position of $1,405,000 related to various tax matters as of March 31, 2024[182] - The Company has suspended the use of its registration statement on Form S-3 due to late filing of its 2023 Form 10-K[126] - The Company is in the process of selecting a new independent registered public accounting firm following the resignation of Baker Tilly US, LLP[127] - Management is implementing measures to remediate material weaknesses in internal controls, expected to be completed by the end of 2024[191] Financing Activities - Draws on bank loans totaled $4,800,000 in Q1 2024, with repayments of long-term debt at $21,000, reflecting a net cash inflow from financing activities of $4,779,000[22] - The net capital infusion from Kakaopay was approximately $14.8 million after issuance costs, enhancing the company's regulatory capital[162] - The Company had an outstanding loan balance of $4.8 million as of March 31, 2024, under a line of credit with BMO Harris Bank[103] - Operating lease commitments total $3,187,000, with significant payments due in 2024 ($669,000) and 2025 ($861,000)[166] - Kakaopay fee obligations amount to $4,500,000, with a $5 million payment scheduled in ten quarterly installments starting March 29, 2024[166] Technology and Development - The Company incurred approximately $1.8 million out of a total budget of $3.3 million for technology vendor development projects related to its Retail Platform as of March 31, 2024[106] - The company has incurred approximately $664,000 of the estimated $800,000 build-out costs for the New York office as of March 31, 2024[168] - The company invested $58,000 in the Miami office building during the three months ended March 31, 2024, compared to $565,000 for the same period in 2023[66] - The company recorded a total rent and occupancy cost of $497,000 for the three months ended March 31, 2024, compared to $478,000 in 2023[73] Securities Transactions - Securities borrowed amounted to $383,670,000 as of March 31, 2024, while securities loaned were $389,474,000, indicating significant activity in securities transactions[40] - Total payables to broker-dealers and clearing organizations increased to $2,003,000 as of March 31, 2024, from $481,000 as of December 31, 2023[49] - Stock borrow/stock loan revenue for the three months ended March 31, 2024, was $4,098,000, compared to $3,442,000 in 2023[86] - Principal transactions and proprietary trading increased to $3.506 million in Q1 2024, a rise of $706,000 or 20.1% from Q1 2023, attributed to improved market conditions[143]