EX-99.1 2 v092676_ex99-1.htm Unassociated Document

FOR IMMEDIATE RELEASE

MCF Corporation Announces Financial Results for the
Third Quarter Ended September 30, 2007

SAN FRANCISCO - November 6, 2007 - MCF Corporation (AMEX: MEM) today released earnings for the third quarter 2007.

Financial Highlights: Third Quarter

-  
Net income was $188,000, or $0.01 per diluted share, marking the third consecutive quarter of profitability for MCF Corporation.
-  
Total revenue was $17.66 million, a 138% increase over the third quarter of 2006.
-  
Revenue by type for the third quarter 2007 was as follows:
-    
Commission revenue was $7.9 million, an 18% increase over the third quarter 2006.
 
-    
Investment banking revenue was $5.6 million, a 205% increase over the third quarter 2006.
 
-    
Principal transactions revenue was $2.5 million, vs. a loss of $1.1 million in the third quarter 2006.
 
-    
Primary research revenue was $1.2 million, reflecting continued contribution from Panel Intelligence, LLC, which MCF acquired in April 2007.
 
-  
Compensation and benefits expense was $12.1 million, representing 68% of total revenue. In the third quarter 2006, compensation and benefits was $8.5 million, or 115% of total revenue.
Financial Highlights: Nine Months Ended
 
-  
Combined net income for the past three quarters was $2.58 million, or $0.21 per diluted share.
-  
Total revenue year-to-date was $52.4 million, a 55% increase over the same nine-month period last year.
 
“This was a very challenging period for many financial institutions. We are pleased to report our third consecutive quarter of profitability and rapid growth - ahead of analyst expectations,” stated Jon Merriman, chief executive officer of MCF Corporation. “We have proven our ability to focus on our longer term plan, while constantly seeking ways to improve near-term stockholder value through greater recurring revenue streams and a commitment to managing costs. Revenue for the first 9 months of 2007 has grown by 55% over the first 9 months of 2006, while our expenses grew at only 21% over that same period.”

Other Highlights Since Second Quarter

-  
As announced earlier today in a separate release, John M. Thompson has been appointed as the new non-executive chairman of the board of directors. This is a positive step forward for the firm’s corporate governance, and it will allow Jon Merriman to better focus on his growing responsibilities as the firm’s leader and as a revenue generator.
 
-  
Brock Ganeles was promoted from director of equities to head of institutional securities, a new position where he will oversee all investment banking, sales and trading activities.
-  
Panel Intelligence™, LLC, launched its new Clean Technology (“CleanTech”) research practice and hired industry veteran David Kurzman to head the new group.
-  
In the third quarter of 2007, the firm completed nine investment banking transactions, compared with four during the third quarter of 2006. The average fee size of these transactions for the third quarter of 2007 was roughly $625,000 vs. $460,000 average fee during the same period last year.
 
-  
The firm’s involvement with the OTCQX continues to progress. Over the last nine months the firm advised five clients with regard to the OTCQX, and two clients have listed on the platform.
-  
The fourth annual Merriman Curhan Ford & Co. Investor Summit was held in San Francisco. More than 120 companies presented and 1,200 institutional investors attended.
Merriman continued: “Our highly motivated, talented team is critical to the success of helping clients find new growth opportunities. We exited the third quarter with a very robust investment banking pipeline, and many transactions have already closed in October and November.”

3
 
Conference Call for the Third Quarter 2007 Results

In conjunction with this announcement, MCF Corporation will host a discussion of the Company’s third quarter 2007 results with investors and financial analysts tomorrow, Wednesday, November 7, 2007 at 8:00 AM (PT) / 11:00 AM (ET). Interested listeners and participants may access the live conference call by dialing 800-240-4186 or may access the live Web broadcast at www.mcfco.com. An archived version of the discussion will be available on the Company’s Web site following the conclusion of the live conference call.

About MCF Corporation

MCF Corporation (AMEX:MEM) is a financial services holding company that provides investment research, capital markets services, corporate and venture services, investment banking, asset management and primary research through its operating subsidiaries, Merriman Curhan Ford & Co., MCF Asset Management, LLC and Panel Intelligence, LLC. MCF is focused on providing a full range of specialized and integrated services to institutional investors and corporate clients.


Note to Investors

This press release contains certain forward-looking statements based on our current expectations, forecasts and assumptions that involve risks and uncertainties. Forward-looking statements in this release are based on information available to us as of the date hereof. Our actual results may differ materially from those stated or implied in such forward-looking statements, due to risks and uncertainties associated with our business, which include the risk factors disclosed in our Quarterly Report on Form 10-Q filed on November 6, 2007. Forward-looking statements include statements regarding our expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. We assume no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise. The Form 10-Q filed on November 6, 2007, together with this press release and the financial information contained herein, is available on our Web site by going to www.mcfco.com and clicking on “Investor Relations.”

* * *

At the Company:
John D. Hiestand
Chief Financial Officer
(415) 248-5640
jhiestand@merrimanco.com
Investor Contact:
John Baldissera
BPC Financial Marketing
(800) 368-1217
Media Contact:
Shawn Simmons
Mandelbaum & Morgan
(310) 785-0810
shawn@mandelbaummorgan.com
 

4

MCF CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited) 
 
   
 Three Months Ended
  
 Nine Months Ended
  
     
September 30,
2007 
    
September 30,
2006 
    
September 30,
2007 
    
September 30,
2006 
  
Revenue:
                          
Commissions
  
$
7,923,963
  
$
6,700,416
  
$
22,807,243
  
$
23,344,124
  
Principal transactions
    
2,478,297
    
(1,148,313
)
  
10,804,073
    
(1,480,963
)
Investment banking
    
5,616,491
    
1,839,288
    
15,480,518
    
11,750,176
  
Primary research
    
1,165,428
    
─
    
2,116,490
    
─
  
Advisory and other fees
    
476,015
    
35,099
    
1,147,363
    
238,321
  
Total revenue
    
17,660,194
    
7,426,490
    
52,355,687
    
33,851,658
  
Operating expenses:
                          
Compensation and benefits
    
12,096,131
    
8,534,218
    
35,673,505
    
29,987,310
  
Brokerage and clearing fees
    
627,223
    
598,644
    
1,921,920
    
1,987,504
  
Cost of primary research services
    
555,185
    
─
    
950,403
    
─
  
Professional services
    
518,045
    
567,535
    
1,603,163
    
1,850,916
  
Occupancy and equipment
    
499,459
    
406,047
    
1,395,048
    
1,195,202
  
Communications and technology
    
921,853
    
800,061
    
2,618,799
    
2,123,963
  
Depreciation and amortization
    
193,284
    
156,760
    
556,332
    
467,870
  
Amortization of intangible assets
    
264,771
    
─
    
485,414
    
─
  
Travel and entertainment
    
635,353
    
611,712
    
1,789,971
    
1,960,304
  
Other
    
1,277,519
    
1,042,738
    
2,993,878
    
1,578,024
  
Total operating expenses
    
17,588,823
    
12,717,715
    
49,988,433
    
41,151,093
  
Operating income (loss)
    
71,371
    
(5,291,225
)
  
2,367,254
    
(7,299,435
)
Interest income
    
132,965
    
117,945
    
362,919
    
367,711
  
Interest expense
    
(15,876
)
  
134,895
    
(97,087
)
  
(408,002
)
Income (loss) from continuing operations before taxes
    
188,460
    
(5,038,385
)
  
2,633,089
    
(7,339,726
)
Income tax expense
    
─
    
─
    
(55,000
)
  
─
  
Income (loss) from continuing operations
    
188,460
    
(5,038,385
)
  
2,578,089
    
(7,339,726
)
Loss from discontinued operations
    
─
    
(70,666
)
  
─
    
(178,868
)
Net income (loss)
  
$
188,460
  
$
(5,109,051
)
$
2,578,089
  
$
(7,518,594
)
 
                          
Basic net income (loss) per share:
                          
Income (loss) from continuing operations
  
$
0.02
  
$
(0.50
)
$
0.23
  
$
(0.74
)
Loss from discontinued operations
  
$
─
  
$
(0.01
)
$
─
  
$
(0.02
)
Net income (loss)
  
$
0.02
  
$
(0.51
)
$
0.23
  
$
(0.76
)
 
                          
Diluted net income (loss) per share:
                          
Income (loss) from continuing operations
  
$
0.01
  
$
(0.05
)
$
0.21
  
$
(0.74
)
Loss from discontinued operations
  
$
─
  
$
(0.01
)
$
─
  
$
(0.02
)
Net income (loss)
  
$
0.01
  
$
(0.51
)
$
0.21
  
$
(0.76
)
 
                          
Weighted average common shares outstanding:
                          
Basic
    
11,999,656
    
10,151,922
    
11,337,346
    
9,906,672
  
Diluted
    
13,139,384
    
10,151,922
    
12,499,544
    
9,906,672
  

5

MCF CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(unaudited)
 
 ASSETS
    
September 30,
2007 
    
December 31,
2006 
  
               
Cash and cash equivalents
  
$
12,470,717
  
$
13,746,590
  
Securities owned:
            
    Marketable, at fair value
    
14,661,068
    
7,492,914
  
    Not readily marketable, at estimated fair value
    
4,040,665
    
1,489,142
  
Restricted cash
    
688,011
    
629,427
  
Due from clearing broker
    
1,134,440
    
551,831
  
Accounts receivable, net
    
2,421,026
    
2,715,271
  
Equipment and fixtures, net
    
1,368,286
    
1,586,630
  
Intangible assets
    
2,214,586
    
314,963
  
Goodwill
    
3,153,219
    
─
  
Prepaid expenses and other assets
    
2,022,405
    
1,971,445
  
Total assets
  
$
44,174,423
  
$
30,498,213
  
LIABILITIES AND STOCKHOLDERS' EQUITY
            
Accounts payable
  
$
1,871,033
  
$
1,121,623
  
Commissions and bonus payable
    
7,900,581
    
7,711,805
  
Accrued expenses
    
3,469,821
    
2,285,670
  
Due to clearing and other brokers
    
16,733
    
11,114
  
Securities sold, not yet purchased
    
2,476,071
    
1,534,953
  
Capital lease obligation
    
850,034
    
1,292,378
  
Convertible notes payable, net
    
194,831
    
187,079
  
Notes payable
    
66,187
    
138,571
  
Total liabilities
    
16,845,291
    
14,283,193
  
Commitments and contingencies
            
Stockholders' equity:
            
Preferred stock, Series A--$0.0001 par value; 2,000,000 shares authorized; 0 shares issued and outstanding as of
    September 30, 2007 and December 31, 2006, respectively; aggregate liquidation preference of $0
    
─
    
─
  
Preferred stock, Series B--$0.0001 par value; 12,500,000 shares authorized; 1,250,000 shares issued and 0 shares
    outstanding as of September 30, 2007 and December 31, 2006; aggregate liquidation preference of $0
    
─
    
─
  
Preferred stock, Series C--$0.0001 par value; 14,200,000 shares authorized; 1,685,714 shares issued and 0 shares
    outstanding as of September 30, 2007 and December 31, 2006; aggregate liquidation preference of $0
    
─
    
─
  
Common stock, $0.0001 par value; 300,000,000 shares authorized; 12,249,520 and 10,602,720 shares issued
    and 12,223,082 and 10,602,720 shares outstanding as of September 30, 2007 and December 31, 2006,
    respectively
    
1,226
    
1,061
  
Additional paid-in capital
    
123,278,319
    
114,616,848
  
Treasury stock
    
(125,613
)
  
--
  
Accumulated deficit
    
(95,824,800
)
  
(98,402,889
)
Total stockholders' equity
    
27,329,132
    
16,215,020
  
Total liabilities and stockholders' equity
  
$
44,174,423
  
$
30,498,213
  
 
6