EX-99.1 2 v083376_ex99-1.htm
 

 

FOR IMMEDIATE RELEASE

MCF Corporation Announces Financial Results for the
Second Quarter Ended June 30, 2007

SAN FRANCISCO - August 7, 2007 - MCF Corporation (AMEX: MEM) today released earnings for the second quarter 2007.

Second Quarter Financial Highlights

-
Net income was $2.3 million, or $0.18 per diluted share, marking the second consecutive quarter of profitability for MCF Corporation.

-
Total revenue was $20.4 million, a 42% sequential increase over first quarter 2007 and a 37% increase over the second quarter 2006. The three-year compound annual growth rate (CAGR) for revenue is 27%; five-year CAGR for revenue is 52%.

-
Commission revenue was $7.7 million, lower by 3% from the second quarter 2006

-
Investment banking revenue was $5.6 million, a 25% decrease from second quarter 2006

-
Principal transactions revenue was $5.7 million, a significant improvement over a loss of $736,000 in the second quarter 2006

-
Primary research revenue amounted to $951,000 since the completion of the acquisition of MedPanel, Inc. (now called Panel Intelligence, LLC) on April 17, 2007

-
Compensation and benefits expense as a percentage of revenue during the second quarter 2007 was 63% compared to 79% in second quarter 2006, due to a significant increase in principal transactions revenue.

“Our second quarter of profitability is reflective of the growth and gradual diversification of our business lines,” stated Jon Merriman, chairman and chief executive officer of MCF Corporation. “The investment banking and sales and trading groups, though slightly down year-over-year, remain healthy and poised for growth, and our banking backlog going into the second half is very robust. Importantly, our recurring revenue businesses, Panel Intelligence, MCF Asset Management and Institutional Cash Distributors, continue to grow very rapidly and are making a real impact. Finally, our principal transactions and trading revenues were very strong, reflecting in part the adjustments we made to that area in 2006. I believe we are positioned to benefit from the high degree of volatility in the current market environment.”

Conference Call for the Second Quarter 2007 Results

In conjunction with this announcement, MCF Corporation will host a discussion of the Company’s second quarter 2007 results with investors and financial analysts on Wednesday, August 8, 2007 at 8:00 AM (PT) / 11:00 AM (ET). Interested listeners and participants may access the live conference call by dialing (800) 262-1292 or may access the live Web broadcast at the Company’s Web site, 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.

 
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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.

Merriman Curhan Ford & Co. is a securities broker-dealer and investment bank focused on fast-growing companies and growth-oriented institutional investors. It provides investment research, brokerage and trading services primarily to institutions, as well as advisory and investment banking services to corporate clients. Its mission is to become a leader in the researching, advising, financing and trading of fast-growing companies. Merriman Curhan Ford & Co. is registered with the Securities and Exchange Commission as a broker-dealer and is a member of the National Association of Securities Dealers, Inc. and SIPC.

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 August 7, 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 August 7, 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:   Investor Contact:   Media Contact:
         
John D. Hiestand   John Baldissera   Michael Mandelbaum
Chief Financial Officer   BPC Financial Marketing   Mandelbaum & Morgan
(415) 248-5640   (800) 368-1217   (310) 785-0810
jhiestand@merrimanco.com       michael@mandelbaummorgan.com
 
 
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MCF CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited) 
 
   
Three Months Ended
  
Six Months Ended
  
   
June 30,
2007
  
June 30,
2006
  
June 30,
2007
  
June 30,
2006
  
Revenue:
 
 
 
 
 
 
 
 
 
Commissions
 
$
7,717,573
 
$
7,945,580
  
$
14,883,280
  
$
16,643,708
  
Principal transactions
 
 
5,712,652
  
 
(735,951
)
 
8,325,776
  
 
(332,650
)
Investment banking
 
 
5,631,556
 
 
7,485,108
  
 
9,864,027
  
 
9,910,888
  
Primary research
    
951,062
    
─
    
951,062
    
─
  
Advisory and other fees
 
 
359,506
 
 
170,129
  
 
671,348
  
 
203,222
  
Total revenue
 
 
20,372,349
 
 
14,864,866
  
 
34,695,493
  
 
26,425,168
  
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation and benefits
 
 
 12,767,087
 
 
11,719,319
 
 
 23,577,374
 
 
 21,453,092
 
Brokerage and clearing fees
 
 
662,056
    
706,256
    
1,294,697
    
1,388,860
  
Cost of primary research services
 
 
395,218
    
─
    
395,218
    
─
  
Professional services
    
703,640
    
842,058
    
1,085,118
    
1,283,381
  
Occupancy and equipment
 
 
453,061
    
407,334
    
895,589
    
789,155
  
Communications and technology
 
 
884,010
    
717,969
    
1,696,946
    
1,323,902
  
Depreciation and amortization
 
 
182,027
    
159,161
    
363,048
    
311,110
  
Amortization of intangible assets
 
 
220,643
    
─
    
220,643
    
─
  
Travel and entertainment
 
 
685,416
    
830,076
    
1,154,618
    
1,348,592
  
Other
 
 
1,124,415
    
153,661
    
1,716,359
    
535,286
  
Total operating expenses
 
 
18,077,573
    
15,535,834
    
32,399,610
    
28,433,378
  
Operating income (loss)
 
 
2,294,776
    
(670,968
)
  
2,295,883
    
(2,008,210
)
Interest income
 
 
107,461
    
139,101
    
229,954
    
249,766
  
Interest expense
 
 
(26,864
)
  
(473,806
)
  
(81,208
)
  
(542,897
)
Income (loss) from continuing operations before taxes
 
 
2,375,373
    
(1,005,673
)
  
2,444,629
    
(2,301,341
)
Income tax expense
 
 
(55,000
)
  
─
    
(55,000
)
  
─
  
Income (loss) from continuing operations
    
2,320,373
    
(1,005,673
)
  
2,389,629
    
(2,301,341
)
Loss from discontinued operations
    
─
    
(54,262
)
  
─
    
(108,202
)
Net income (loss)
 
$
2,320,373
  
$
(1,059,935
)
$
2,389,629
  
$
(2,409,543
)
 
 
 
 
 
 
    
 
    
 
    
Basic net income (loss) per share:
                          
Income (loss) from continuing operations
  
$
0.20
  
$
(0.10
)
$
0.22
  
$
(0.23
)
Loss from discontinued operations
  
$
─
  
$
(0.01
)
$
─
  
$
(0.01
)
Net income (loss)
  
$
0.20
  
$
(0.11
)
$
0.22
  
$
(0.24
)
                           
Diluted net income (loss) per share:
 
  
 
 
 
    
 
    
 
    
Income (loss) from continuing operations
 
$
0.18
  
$
(0.10
)
$
0.20
  
$
(0.23
)
Loss from discontinued operations
 
$
─
  
$
(0.01
)
$
─
  
$
(0.01
)
Net income (loss)
  
$
0.18
  
$
(0.11
)
$
0.20
  
$
(0.24
)
 
 
    
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding:
 
 
  
 
 
 
 
 
 
 
 
 
 
Basic
 
 
11,657,775
 
 
9,960,900
    
11,000,702
    
9,808,891
 
Diluted
 
 
12,856,306
 
 
9,960,900
    
12,208,965
    
9,808,891
 
 
 
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MCF CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(unaudited)
 
 
 
June 30,
2007 
 
December 31,
2006 
 
 ASSETS
 
 
 
 
 
Cash and cash equivalents
 
$
16,130,529
 
$
13,746,590
 
Securities owned:
 
 
  
 
 
 
 
Marketable, at fair value
 
 
13,690,559
 
 
7,492,914
 
Not readily marketable, at estimated fair value
 
 
1,717,282
 
 
1,489,142
 
Restricted cash
 
 
631,968
 
 
629,427
 
Due from clearing broker
 
 
1,126,441
 
 
551,831
 
Accounts receivable, net
 
 
2,870,376
 
 
2,715,271
 
Equipment and fixtures, net
 
 
1,387,904
 
 
1,586,630
 
Intangible assets
    
2,479,357
    
314,963
  
Goodwill
    
3,171,969
    
─
  
Prepaid expenses and other assets
 
 
1,453,589
 
 
1,971,445
 
Total assets
 
$
44,659,974
 
$
30,498,213
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
  
 
 
 
 
Accounts payable
 
$
2,269,120
 
$
1,121,623
 
Commissions and bonus payable
 
 
6,531,294
 
 
7,711,805
 
Accrued expenses
 
 
4,137,359
 
 
2,285,670
 
Due to clearing and other brokers
 
 
21,858
 
 
11,114
 
Securities sold, not yet purchased
 
 
4,177,032
 
 
1,534,953
 
Capital lease obligation
 
 
987,880
 
 
1,292,378
 
Convertible notes payable, net
 
 
192,247
 
 
187,079
 
Notes payable
 
 
90,556
 
 
138,571
 
Total liabilities
 
 
18,407,346
 
 
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 June 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 June 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 June 30, 2007 and December 31, 2006; aggregate liquidation preference of $0
 
 
─
 
 
─
 
Common stock, $0.0001 par value; 300,000,000 shares authorized; 12,160,458 and 10,602,720 shares issued and 12,134,020 and 10,602,720 shares outstanding as of June 30, 2007 and December 31, 2006, respectively
 
 
1,217
  
 
1,061
 
Additional paid-in capital
 
 
122,390,284
  
 
114,616,848
 
Treasury stock
 
 
(125,613
)
 
--
 
Accumulated deficit
 
 
(96,013,260
)
 
(98,402,889
)
Total stockholders' equity
 
 
26,252,628
  
 
16,215,020
 
Total liabilities and stockholders' equity
 
$
44,659,974
  
$
30,498,213
 
 
 
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