updated 5/23/2011 6:46:59 PM ET 2011-05-23T22:46:59

LYNNFIELD, Mass., May 23, 2011 (GLOBE NEWSWIRE) -- Investors Capital Holdings, Ltd. (NYSE Amex:ICH) ("the Company"), a financial services holding company, posted total revenue of $85.25 million for the fiscal year ended March 31, 2011 ("the year"). This represents a 7.7% increase over total revenue of $79.19 million for the fiscal year ended March 31, 2010 ("prior period"). For the year, the Company posted a net loss of $0.91 million, compared to net income of $0.32 million for the prior period. Investors Capital Holdings operates primarily through its wholly-owned subsidiary, Investors Capital Corporation ("ICC"), a dually registered broker-dealer and investment advisory firm.

Total revenue increased due primarily to market growth and increased activity of ICC advisors. Commission revenue, which accounts for 80.0% of total revenue, increased 6.4% to $68.11 million. Advisory fees, which make up 17.6% of total revenue, grew 17.0% to $14.98 million. The rise in advisory fees predominantly reflects increases in the value of underlying advisory program assets as investor sentiment becomes more favorable and the securities market continues to recover from the recent debt crisis.

"This year has been challenging in many regards," said Investors Capital Holdings, Ltd. President and CEO Timothy B. Murphy. "But I believe we are in a good position for growth. Our revenues are growing; our net capital is strong; our recruiting pipeline is full; and our recruiters are busy with advisors inquiring about joining Investors Capital. I am excited for what the new year will bring."

At fiscal-year end, the firm had net capital of $2.84 million (an excess of $2.59 million) compared to net capital of approximately $3.39 million (an excess of $2.91 million) as of the prior period. ICC is subject to the SEC Uniform Net Capital Rule (Rule 15c3-1) which requires our broker-dealer subsidiary to maintain minimum net capital. As of March 31, 2011, ICC computes net capital requirements under the alternative method, which requires firms to maintain minimum net capital, as defined, equal to the greater of $250,000 or 2% of aggregate debit balances.

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 lower-quality advisors. The firm's average revenue per representative, based on a rolling 12-month period, rose again at fiscal-year end to $161,642, an increase of 17.2% over $137,961 for the prior rolling 12-month period.

Results of operations were largely impacted by litigation and regulatory actions that have accompanied a more demanding industry regulatory environment. Adjusted EBITDA was negative $0.23 million for the year compared to $1.48 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  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
CONSOLIDATED BALANCE SHEETS
  March 31, 2011 March 31, 2010
 
Assets    
Current Assets    
Cash and cash equivalents  $ 4,587,195  $ 5,812,865
Deposit with clearing organization, restricted 175,000 175,000
Accounts receivable 6,798,638 6,042,188
Note receivable (current) 108,169 140,598
Loans receivable from registered representatives (current), net of allowance 721,664 769,263
Prepaid income taxes 157,880 559,007
Securities owned at fair value 17,384 57,933
Investment 50,000 50,000
Prepaid expenses 1,073,969 957,674
  13,689,899 14,564,528
     
Property and equipment, net 597,735 774,182
     
Long Term Investments    
Loans receivable from registered representatives 616,583 292,884
Note receivable  495,000 595,000
Investments 214,555 184,319
Non-qualified deferred compensation investment 1,089,572 929,897
Cash surrender value life insurance policies 680,429 551,398
  3,096,139 2,553,498
Other Assets    
Deferred tax asset, net 1,218,773 838,773
Capitalized software, net 132,131 149,838
Other assets 15,808 13,728
  1,366,712 1,002,339
     
TOTAL ASSETS  $ 18,750,485  $ 18,894,547
     
Liabilities and Stockholders' Equity    
Current Liabilities    
Accounts payable  $ 1,109,400  $ 817,761
Accrued expenses 2,078,705 2,358,656
Commissions payable 3,246,898 3,488,415
Notes payable 1,527,969 1,130,922
Unearned revenues 113,486 101,931
Securities sold, not yet purchased, at fair value  -- 5,693
  8,076,458 7,903,378
Long-Term Liabilities    
Non-qualified deferred compensation plan 1,176,096 793,735
  1,176,096 793,735
     
Total liabilities 9,252,554 8,697,113
     
Commitments and contingencies (Note 15)    
     
Stockholders' Equity:    
Common stock, $.01 par value, 10,000,000 shares authorized; 6,618,259 issued and 6,614,374 outstanding at March 31, 2011 6,595,804 issued and 6,591,919 outstanding at March 31, 2010 66,183 65,958
Additional paid-in capital 12,279,380 12,095,862
Accumulated deficit (2,874,214) (1,964,084)
Less: Treasury stock, 3,885 shares at cost (30,135) (30,135)
Accumulated other comprehensive income 56,717 29,833
Total stockholders' equity 9,497,931 10,197,434
     
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $ 18,750,485  $ 18,894,547
 
INVESTORS CAPITAL HOLDINGS, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
     
  YEARS ENDED

March 31,
  2011 2010
Revenue:    
Commissions  $ 68,111,786  $ 63,999,464
Advisory fees 14,977,601 12,796,618
Other fee income 802,752 1,013,718
Other revenue 1,361,826 1,378,137
Total revenue 85,253,965 79,187,937
     
Expenses:    
Commissions and advisory fees 67,125,324 61,080,743
Compensation and benefits 8,471,493 8,007,675
Regulatory, legal and professional services 3,983,401 2,338,062
Brokerage, clearing and exchange fees 2,046,543 2,573,689
Technology and communications 1,219,738 1,121,918
Marketing and promotion 1,382,025 877,969
Occupancy and equipment 922,312 853,548
Other administrative 1,101,691 1,451,447
Interest 23,698 26,213
Total operating expenses 86,276,225 78,331,264
     
Operating income (loss) (1,022,260) 856,673
     
(Benefit) provision for income taxes (112,130) 535,135
     
Net income (loss)  $ (910,130)  $ 321,538
     
     
Basic and diluted net income (loss) per share  $ (0.14)  $ 0.05
     
Basic and dilute dividends per common share  $ --   $ -- 
     
Shares used in basic and diluted per share calculations 6,527,315 6,503,476

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:

  Years Ended March 31,
  2011 2010
     
Adjusted EBITDA:  $ (234,858)  $ 1,475,538
     
Adjustments to conform adjusted EBITDA to GAAP Net income (loss):    
Income tax benefit  112,130  (535,135)
Interest expense  (23,698) (26,213)
Depreciation and amortization  (427,769) (349,001)
Non-cash compensation  (183,743)  (243,651)
Non-recurring professional fees  (152,192)  -- 
     
Net income (loss)  $ (910,130)  $ 321,538
CONTACT: Robert Foney, Chief Marketing Officer
         781.477.4814
         rfoney@investorscapital.com
         www.investorscapital.com

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