Sanders Morris Harris Group Acquires Majority Interest in Prominent Wealth Management and Financial Planning Firm; First Quarter Net Income $0.10 Per
Sanders Morris Harris Group Acquires Majority Interest in Prominent Wealth Management and Financial Planning Firm; First Quarter Net Income $0.10 Per Share
Sanders Morris Harris Group Inc.
(Nasdaq: SMHG), a leading diversified financial services holding company,
today announced that it has purchased a 51% interest in the Edelman Financial
Center, one of the largest independent financial planning and investment
management firms in the country. Sanders Morris Harris Group will acquire the
remaining 49% over four years. Edelman Financial Center, based in Fairfax,
Virginia, manages over $2.6 billion in assets for individuals and families.
Acquiring Edelman Financial Center furthers Sanders Morris Harris Group's
position in the mass affluent market and brings the firm's total assets under
management to $10 billion.
Sanders Morris Harris Group expects the transaction to be accretive to its
current year earnings. Edelman's 2004 revenues were $17.7 million and its
adjusted pretax income was $3.2 million. The details of the Edelman
transaction are included in an 8-K filing available today on the Company's
website.
"Adding Edelman Financial Center to our asset management group fits our
strategy of providing our clients with the full spectrum of investment
opportunities and services. We expect to leverage the wealth management and
financial planning services provided by Edelman Financial Center across our
other asset management businesses," said Robert E. Garrison II, President of
Sanders Morris Harris Group.
In 2004, Registered Rep Magazine listed Edelman Financial Center founder
and chairman Ric Edelman as one of "America's Top 50 Advisors," Research
Magazine ranked him the #1 advisor in the nation for his focus on the
individual client, and Bloomberg Wealth Manager ranked Edelman Financial
Center the largest independent financial planning and investment management
firm in the nation, based on number of clients. Edelman, a best-selling
author, has written five books on personal finance that collectively have sold
more than 1 million copies and been translated into six languages.
George L. Ball, Chairman of Sanders Morris Harris Group, commented, "We
are delighted that Ric Edelman and his team of high caliber professionals have
elected to join SMHG. We look forward to assisting them as they help their
clients build wealth and financial security."
Edelman, who will remain as chairman of Edelman Financial Center, stated,
"Joining the highly qualified professionals of Sanders Morris Harris Group
will enable us to serve our clients even better while providing a solid
platform for future growth."
EARNINGS
Sanders Morris Harris Group also reported earnings for the first quarter
of 2005 of $0.10 per diluted share versus $0.18 in the same period of 2004.
Revenues were $26.3 million, down 12% from the earlier period.
Net income in the initial three months of 2005 was $1.8 million compared
to $3.3 million in 2004. Lower stock market trading volumes reduced
profitability in the firm's institutional and prime brokerage businesses.
Investment banking net income was also lower, reflecting industry-wide trends.
Equity in income of limited partnerships increased 111% to $1.7 million for
the 2005 quarter as compared to the comparable 2004 period, with the current
year quarter benefiting from a significant liquidity event for one of the
limited partnerships.
"We are pleased by the balanced composition of our underlying business
platform," said Ben T. Morris, Chief Executive Officer. "The markets have
become more difficult, but we are confident the Company will continue to
perform well relative to industry conditions."
DIVIDEND
The Company declared its regular quarterly dividend of $0.045 a share,
payable July 15th to holders of record on July 1st.
Sanders Morris Harris Group is a diversified financial services holding
company based in Houston, Texas. It provides investment banking services and
manages over $10 billion in client assets. Its operating entities are Sanders
Morris Harris, Charlotte Capital, Edelman Financial Center, Kissinger
Financial Services, Pinnacle Trust Co., Salient Partners, SMH Capital Advisors
and Select Sports Group. Additional information is available at
http://www.smhgroup.com .
In addition to the historical information, this press release contains
certain forward-looking statements under federal securities laws, including
statements regarding Sanders Morris Harris Group's expected future business
prospects, revenue and income. These forward-looking statements are based upon
current expectations and involve certain risks and uncertainties that could
cause actual results to differ materially from any such statement. These risks
and uncertainties, many of which are beyond the company's control, include but
are not limited to (1) trading volume in the securities markets; (2)
volatility of the securities markets and interest rates; (3) changes in
regulatory requirements which could affect the demand for the company's
services or the cost of doing business; (4) general economic conditions, both
domestic and foreign, especially in the regions where the company does
business; (5) changes in the rate of inflation and related impact on
securities markets; (6) competition from existing financial institutions and
other new participants in the securities markets; (7) legal developments
affecting the litigation experience of the securities industry; (8) successful
implementation of technology solutions; (9) changes in valuations of the
company's trading and warrant portfolios resulting from mark-to-market
adjustments; (10) dependence on key personnel; and (11) demand for the
company's service. The company does not undertake any obligation to update or
revise any forward-looking statement.
SANDERS MORRIS HARRIS GROUP INC.
Selected Condensed Operating Information
(in thousands, except per share amounts)
(unaudited)
Three Months Ended
March 31,
2005 2004
Net income calculation:
Revenues $ 26,340 $ 29,807
Expenses 24,151 24,762
Net 2,189 5,045
Equity in income of limited partnerships 1,696 805
Minority interests (797) (452)
Income before income taxes 3,088 5,398
Provision for income taxes (1,255) (2,128)
Net income $ 1,833 $ 3,270
Earnings per share
Basic earnings per share $ 0.10 $ 0.19
Diluted earnings per share $ 0.10 $ 0.18
Weighted average shares outstanding:
Basic 18,304,652 17,394,045
Diluted 18,962,386 17,987,680
Balance sheet data:
Cash and cash equivalents $ 19,948 $ 25,048
Other tangible net assets 59,961 43,968
Tangible net assets $ 79,909 $ 69,016
Shareholders' equity $ 141,631 $ 119,263
SOURCE Sanders Morris Harris Group Inc.
Web Site: http://www.smhgroup.com
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Sanders Morris Harris Group Inc.
(Nasdaq: SMHG), a leading diversified financial services holding company,
today announced that it has purchased a 51% interest in the Edelman Financial
Center, one of the largest independent financial planning and investment
management firms in the country. Sanders Morris Harris Group will acquire the
remaining 49% over four years. Edelman Financial Center, based in Fairfax,
Virginia, manages over $2.6 billion in assets for individuals and families.
Acquiring Edelman Financial Center furthers Sanders Morris Harris Group's
position in the mass affluent market and brings the firm's total assets under
management to $10 billion.
Sanders Morris Harris Group expects the transaction to be accretive to its
current year earnings. Edelman's 2004 revenues were $17.7 million and its
adjusted pretax income was $3.2 million. The details of the Edelman
transaction are included in an 8-K filing available today on the Company's
website.
"Adding Edelman Financial Center to our asset management group fits our
strategy of providing our clients with the full spectrum of investment
opportunities and services. We expect to leverage the wealth management and
financial planning services provided by Edelman Financial Center across our
other asset management businesses," said Robert E. Garrison II, President of
Sanders Morris Harris Group.
In 2004, Registered Rep Magazine listed Edelman Financial Center founder
and chairman Ric Edelman as one of "America's Top 50 Advisors," Research
Magazine ranked him the #1 advisor in the nation for his focus on the
individual client, and Bloomberg Wealth Manager ranked Edelman Financial
Center the largest independent financial planning and investment management
firm in the nation, based on number of clients. Edelman, a best-selling
author, has written five books on personal finance that collectively have sold
more than 1 million copies and been translated into six languages.
George L. Ball, Chairman of Sanders Morris Harris Group, commented, "We
are delighted that Ric Edelman and his team of high caliber professionals have
elected to join SMHG. We look forward to assisting them as they help their
clients build wealth and financial security."
Edelman, who will remain as chairman of Edelman Financial Center, stated,
"Joining the highly qualified professionals of Sanders Morris Harris Group
will enable us to serve our clients even better while providing a solid
platform for future growth."
EARNINGS
Sanders Morris Harris Group also reported earnings for the first quarter
of 2005 of $0.10 per diluted share versus $0.18 in the same period of 2004.
Revenues were $26.3 million, down 12% from the earlier period.
Net income in the initial three months of 2005 was $1.8 million compared
to $3.3 million in 2004. Lower stock market trading volumes reduced
profitability in the firm's institutional and prime brokerage businesses.
Investment banking net income was also lower, reflecting industry-wide trends.
Equity in income of limited partnerships increased 111% to $1.7 million for
the 2005 quarter as compared to the comparable 2004 period, with the current
year quarter benefiting from a significant liquidity event for one of the
limited partnerships.
"We are pleased by the balanced composition of our underlying business
platform," said Ben T. Morris, Chief Executive Officer. "The markets have
become more difficult, but we are confident the Company will continue to
perform well relative to industry conditions."
DIVIDEND
The Company declared its regular quarterly dividend of $0.045 a share,
payable July 15th to holders of record on July 1st.
Sanders Morris Harris Group is a diversified financial services holding
company based in Houston, Texas. It provides investment banking services and
manages over $10 billion in client assets. Its operating entities are Sanders
Morris Harris, Charlotte Capital, Edelman Financial Center, Kissinger
Financial Services, Pinnacle Trust Co., Salient Partners, SMH Capital Advisors
and Select Sports Group. Additional information is available at
http://www.smhgroup.com .
In addition to the historical information, this press release contains
certain forward-looking statements under federal securities laws, including
statements regarding Sanders Morris Harris Group's expected future business
prospects, revenue and income. These forward-looking statements are based upon
current expectations and involve certain risks and uncertainties that could
cause actual results to differ materially from any such statement. These risks
and uncertainties, many of which are beyond the company's control, include but
are not limited to (1) trading volume in the securities markets; (2)
volatility of the securities markets and interest rates; (3) changes in
regulatory requirements which could affect the demand for the company's
services or the cost of doing business; (4) general economic conditions, both
domestic and foreign, especially in the regions where the company does
business; (5) changes in the rate of inflation and related impact on
securities markets; (6) competition from existing financial institutions and
other new participants in the securities markets; (7) legal developments
affecting the litigation experience of the securities industry; (8) successful
implementation of technology solutions; (9) changes in valuations of the
company's trading and warrant portfolios resulting from mark-to-market
adjustments; (10) dependence on key personnel; and (11) demand for the
company's service. The company does not undertake any obligation to update or
revise any forward-looking statement.
SANDERS MORRIS HARRIS GROUP INC.
Selected Condensed Operating Information
(in thousands, except per share amounts)
(unaudited)
Three Months Ended
March 31,
2005 2004
Net income calculation:
Revenues $ 26,340 $ 29,807
Expenses 24,151 24,762
Net 2,189 5,045
Equity in income of limited partnerships 1,696 805
Minority interests (797) (452)
Income before income taxes 3,088 5,398
Provision for income taxes (1,255) (2,128)
Net income $ 1,833 $ 3,270
Earnings per share
Basic earnings per share $ 0.10 $ 0.19
Diluted earnings per share $ 0.10 $ 0.18
Weighted average shares outstanding:
Basic 18,304,652 17,394,045
Diluted 18,962,386 17,987,680
Balance sheet data:
Cash and cash equivalents $ 19,948 $ 25,048
Other tangible net assets 59,961 43,968
Tangible net assets $ 79,909 $ 69,016
Shareholders' equity $ 141,631 $ 119,263
SOURCE Sanders Morris Harris Group Inc.
Web Site: http://www.smhgroup.com
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SMS.ac
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