updated 2/15/2011 10:46:24 AM ET 2011-02-15T15:46:24

LYNNFIELD, Mass., Feb. 15, 2011 (GLOBE NEWSWIRE) -- Investors Capital Holdings, Ltd. (NYSE Amex:ICH) ("the Company"), a financial services holding company, posted third quarter net income of $0.35 million on total revenue of $21.43 million for the period ended December 31, 2010 ("the quarter") compared to net income of $0.43 million on total revenue of $21.05 million for the quarter ended December 31, 2009 ("prior period"). The Company operates primarily through its wholly-owned subsidiary, Investors Capital Corporation ("ICC"), a dually registered broker-dealer and investment advisory firm.

Total revenue for the quarter grew by $0.38 million, or 1.8%, compared to the prior period. The increase is due primarily to a rise in commissionable revenues as markets continue to rebound from the recent recession. Commission revenue, which accounts for 81.5% of total revenue, increased 1.7% to $17.47 million. Advisory fees, which account for 15.2% of total revenue, grew 3.4% to $3.27 million. The rise in advisory revenue reflects growth in market asset values, as well as new investment contributions.

"Our focus continues to be on quality advisors, assets, and profits," said Timothy B. Murphy, the Company's President and CEO. "Our net capital position remains strong; the markets and economy are improving; trading volume is increasing. We know where we want to go and how we want to get there. All we have to do is execute."

At quarter end, the firm's net capital position strengthened to $2.99 million (an excess of $2.51 million) with a net capital ratio of 2.38:1. The SEC Uniform Net Capital Rule (Rule 15c3-1) requires that Investors Capital maintain net capital of $100,000 and a ratio of specified aggregate indebtedness to net capital (a "net capital ratio") not to exceed 15 to 1.

Investors Capital continues to benefit from improving the overall quality of its representatives, a key component of the Company's strategy for achieving growth in revenues and net income. The firm seeks to continually improve the quality of its representatives by helping them expand their skills and practices, recruiting established, high-quality representatives, and terminating low-quality advisors. The firm's average revenue per representative, based on a rolling 12-month period, rose again in the third quarter to $145,153, an increase of 12.5% over $129,006 for the prior rolling 12-month period.

"To use a baseball analogy, we're not trying to swing for the fences," said Murphy. "Single, single, double is how smart teams produce runs in baseball and profits in business. We are focusing on organic growth, retention, and recruitment of quality advisors to achieve our growth targets for revenues, assets, and profits."

Adjusted EBITDA was $0.47 million for the quarter compared to $0.86 million for the prior period. Adjusted EBITDA, a non-GAAP financial measure described below, is a key metric utilized by the firm in evaluating its financial performance.

About Investors Capital Holdings, Ltd.:

Investors Capital Holdings, Ltd. (NYSE Amex:ICH) of Lynnfield, Massachusetts is a financial services holding company that operates primarily through its broker/dealer and investment advisor subsidiary, Investors Capital Corporation. Our mission is to provide premier 5-star service and support to our valued registered representatives, including advisory programs, strategic practice management and marketing services, and technology, to help them grow their businesses and exceed their clients' expectations. Business units include Investors Capital Corporation, ICC Insurance Agency, Inc., and Investors Capital Holdings Securities Corporation. For more information, please call (800) 949-1422 x4814 or visit www.investorscapital.com .

Certain statements contained in this press release that are not historical fact may be deemed to be forward-looking statements under federal securities laws. There are many factors that could cause our future actual results to differ materially from those suggested by or forecast in the forward-looking statements. Such factors include, but are not limited to, general economic conditions, interest rate fluctuations, regulatory changes affecting the financial services industry, competitive factors effecting demand for our services, availability of funding, and other risks including those identified in the Company's Securities and Exchange Commission filings.

Investors Capital Holdings, Ltd., 230 Broadway, Lynnfield, Massachusetts 01940, Distributor.

INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
     
  December 31, 2010 March 31, 2010
Assets    
Current Assets    
Cash and cash equivalents  $ 5,084,390  $ 5,812,865
Deposit with clearing organization, restricted  175,000  175,000
Accounts receivable  6,333,753  6,042,188
Note receivable -- (current)  108,465  140,598
Loans receivable from registered representatives (current), net of allowance  1,138,383  769,263
Prepaid income taxes  364,026  559,007
Securities owned at fair value  2,753  57,933
Investments  50,000  50,000
Prepaid expenses  641,632  957,674
   13,898,402  14,564,528
     
Property and equipment, net  675,302  774,182
     
Long Term Investments    
Loans receivable from registered representatives  247,356  292,884
Note receivable  495,000  595,000
Investments  206,475  184,319
Non-qualified deferred compensation investment  1,003,504  929,897
Cash surrender value life insurance policies  655,047  551,398
   2,607,382  2,553,498
Other Assets    
Other assets  56,543  25,069
Deferred tax asset, net  958,693  838,773
Capitalized software, net  102,925  138,497
   1,118,161  1,002,339
     
TOTAL ASSETS  $ 18,299,247  $ 18,894,547
     
Liabilities and Stockholders' Equity    
Current Liabilities    
Accounts payable  $ 1,227,145  $ 817,761
Accrued expenses  1,553,133  2,358,656
Commissions payable  2,703,163  3,488,415
Notes payable  50,784  1,130,922
Unearned revenues  1,655,431  101,931
Securities sold, not yet purchased, at fair value  --  5,693
   7,189,656  7,903,378
Long-Term Liabilities    
Non-qualified deferred compensation plan  1,065,634  793,735
   1,065,634  793,735
     
Total liabilities  8,255,290  8,697,113
     
Stockholders' Equity:    
Common stock, $.01 par value, 10,000,000 shares authorized;

6,619,748 issued and 6,615,863 outstanding at December 31, 2010;

6,595,804 issued and 6,591,919 outstanding at March 31, 2010
 66,197  65,958
Additional paid-in capital  12,231,361  12,095,862
Accumulated deficit  (2,272,882)  (1,964,084)
Less: Treasury stock, 3,885 shares at cost  (30,135)  (30,135)
Accumulated other comprehensive income  49,416  29,833
Total stockholders' equity  10,043,957  10,197,434
     
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $ 18,299,247  $ 18,894,547
 
 
INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 2010 AND 2009 (UNAUDITED)
     
  2010 2009
Revenue:    
Commissions  $ 17,469,594  $ 17,170,742
Advisory fees  3,266,812  3,159,770
Other fee income  528,451  514,064
Other revenue  161,400  206,453
Total revenue  21,426,257  21,051,029
     
Expenses:    
Commissions and advisory fees  16,600,763  15,998,733
Compensation and benefits  2,157,884  1,820,196
Regulatory, legal and professional services  549,546  579,701
Brokerage, clearing and exchange fees  481,837  778,837
Technology and communications  311,178  287,270
Marketing and promotion  406,945  296,180
Occupancy and equipment  232,802  202,643
Other administrative  366,757  370,018
Interest  3,472  1,536
Total operating expenses  21,111,184  20,335,114
     
Operating (loss) income   315,073  715,915
     
Provision for income taxes  (30,601)  287,857
     
Net income (loss)  $ 345,674  $ 428,058
     
     
Basic net income per share  $ 0.05  $ 0.07
     
Diluted net income per share $ 0.05  $ 0.07
     
Basic dividends per common share  $ --   $ -- 
     
Shares used in basic per share calculations  6,566,542  6,514,017
     
Shares used in diluted per share calculations 6,704,651 6,514,017

Adjusted EBITDA

Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization ("EBITDA"), adjusted by eliminating items that we believe are not part of our core operations, are non-recurring items of revenue or expense, or do not involve a cash outlay, such as stock-related compensation. We consider adjusted EBITDA important in monitoring and evaluating our financial performance on a consistent basis across various periods. We also use adjusted EBITDA as a primary measure, among others, to analyze and evaluate financial and strategic planning decisions.

Adjusted EBITDA is considered a non-GAAP financial measure as defined by Regulation G promulgated by the SEC under the Securities Act of 1933, as amended. Adjusted EBITDA should be considered in addition to, rather than as a substitute for, important GAAP financial measures including pre-tax income, net income and cash flows from operating activities. Items excluded from adjusted EBITDA are significant and necessary components to the operations of our business; therefore, adjusted EBITDA should only be used as a supplemental measure of our operating performance.


Adjusted EBITDA may be reconciled with net income as follows:

  Quarters Ended December 31,
  2010 2009
     
Adjusted EBITDA:  $ 473,384  $ 857,973
     
Adjustments to obtain GAAP Net income (loss):    
Income tax benefit  37,348  --
Interest expense (3,472) (1,536)
Income tax expense (6,746) (287,857)
Depreciation and amortization (107,477)  (86,030)
Non-cash compensation (47,363)  (54,492)
     
Net income (loss)  $ 345,674  $ 428,058
CONTACT: Robert Foney, Chief Marketing Officer
         781.477.4814
         rfoney@investorscapital.com
         www.investorscapital.com

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