EX-99.1 2 v185550_ex99-1.htm
                   FOR IMMEDIATE RELEASE              


MERRIMAN CURHAN FORD ANNOUNCES FINANCIAL RESULTS
FOR THE FIRST QUARTER ENDED MARCH 31, 2010

Company Regains Profitability with Continued Focus on Core Business

SAN FRANCISCO – May 17, 2010 – Merriman Curhan Ford Group, Inc. (NASDAQ: MERR) today released earnings for the first quarter 2010.

First Quarter Financial Highlights
 
-
Net income of $340,000, or $0.03 per share of which $0.01 is attributable to common shareholders, compared to a net loss of $1.9 million, or $0.15 per share, in first quarter 2009.
 
-
Operationally, on a non-GAAP, pro-forma basis1, the core business generated a profit of $960,000, compared to a loss of $1.4 million in first quarter 2009.
 
-
Revenue was $16.5 million, representing a growth of 64% over first quarter 2009.
 
-
Revenue on a non-GAAP, pro-forma basis1 was $9.8 million, a 97% increase from first quarter 2009:
 
 
-
Investment banking revenue was $6.0 million, a 397% increase from first quarter 2009;
 
 
-
Commission revenue on a pro-forma basis1 was $3.3 million, a 9% increase from first quarter 2009; and
 
 
-
Principal transaction revenue on a pro-forma basis1 had a gain of $241,000 comprised primarily of realized gains in the firm’s warrant positions and proprietary account, a 42% improvement from first quarter 2009.
 
 “We are pleased to report our most profitable quarter in two years. While this is great improvement, we must continue to intently focus on building our team and client relationships, while rigorously controlling costs,” said Jon Merriman, co-founder and chief executive officer of Merriman Curhan Ford Group, Inc. “Our turnaround is attributed to our hardworking team which produces high-quality equity research, executes institutional trades and structures difficult lead-managed banking transactions on behalf of our clients. Our first quarter successes have spurred numerous new dialogues with both current and new customers, contributing to an already robust banking pipeline. Although the economy is showing signs of life after unprecedented declines in 2009, there is still a high level of uncertainty and volatility in the capital markets. We continue to look at opportunities to further grow revenue and control expenses, which will allow us to create a sustainable, profitable long-term business model and increase shareholder value.”

Note 1: In 2009, Merriman Curhan Ford introduced non-GAAP, pro-forma operating measures which exclude the effects of its former division, ICD, the unrealized gain or loss on its portfolio of securities and the nonoperating legal and settlement expenses. Management uses these non-GAAP measures, in addition to GAAP results, to assess the performance of the company’s core business. A reconciliation of these non-GAAP measures to GAAP is included in the tables below.
 
Conference Call for the First Quarter 2010 Results

Following this announcement, Merriman’s management will host a teleconference call beginning at 2 PM (PT) / 5 PM (ET) today, Monday, May 17, 2010, to discuss the results and related matters.  Interested listeners and participants may access the live teleconference call by dialing (800) 762-8779 or may access the live Web broadcast at www.mcfco.com.
 
 
 
 

 
About Merriman Curhan Ford

Merriman Curhan Ford (NASDAQ: MERR) is a financial services firm focused on fast-growing companies and the institutions that invest in them. The company offers high-quality investment banking, equity research, institutional services and corporate & venture services, and specializes in three growth industry sectors: CleanTech, Consumer, Media & Internet and Technology. For more information, please go to www.mcfco.com.

Note to Investors

This press release contains certain forward-looking statements based on our current expectations, forecasts and assumptions that involve risks and uncertainties. This release does not constitute an offer to sell or a solicitation of offers to buy any securities of the Company. 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 Form 10-K/A filed on April 30, 2010. 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," 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-K/A filed on April 30, 2010 and the Form 10-Q filed on May 17, 2010, together with this press release and the financial information contained herein, are available on our website, www.mcfco.com. Please click on "Investor Relations."

*  *  *
At the Company:
Peter Coleman
Chief Financial Officer
Merriman Curhan Ford Group, Inc.
(415) 248-5640
 
 
 
 
 
 
 
MERRIMAN CURHAN FORD GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited) 

   
Three Months Ended
  
   
March 31,
    
March 31,
  
   
2010
    
2009
  
             
Revenue:
            
Commissions
   $ 10,428,255     $ 9,117,928  
Principal transactions
     (206,781 )     (842,536 )
Investment banking
     6,046,673       1,216,417  
Advisory and other
     239,373       558,813  
Total revenue
     16,507,520       10,050,622  
                 
Operating expenses:
                
Compensation and benefits
     11,915,532       9,265,167  
Brokerage and clearing fees
     458,216       312,959  
Professional services
     466,794       767,234  
Occupancy and equipment
     482,781       576,390  
Communications and technology
     694,502       721,265  
Depreciation and amortization
     102,491       147,242  
Travel and entertainment
     525,932       235,124  
Legal services and litigation settlement expense
     390,077       345,516  
Other
     1,103,969       696,623  
Total operating expenses
     16,140,294       13,067,520  
Operating income (loss)
     367,226       (3,016,898 )
                 
Other income
     -       1,200,000  
Interest income
     3,335       6,487  
Interest expense
     (14,920 )     (15,365 )
Income (loss) from continuing operations before income taxes
     355,641       (1,825,776 )
Income tax expense
     (15,294 )     (3,216 )
Income (loss) from continuing operations
     340,347       (1,828,992 )
Income (loss) from discontinued operations
     -       (94,894 )
Net income (loss)
     340,347       (1,923,886 )
Preferred stock cash dividend
   $ (151,800 )   $ -  
Net income (loss) attributable to common shareholders
   $ 188,547     $ (1,923,886 )
                 
Basic net income (loss) per share:
                
Income (loss) from continuing operations
   $ 0.03     $ (0.15 )
Loss from discontinued operations
     -       (0.01 )
Net income (loss)
   $ 0.03     $ (0.15 )
Net income (loss) attributable to common shareholders
   $ 0.01     $ (0.15 )
                 
Diluted net income (loss) per share:
                
Income (loss) from continuing operations
   $ 0.01     $ (0.14 )
Income (loss) from discontinued operations
     -       (0.01 )
Net income (loss)
   $ 0.01     $ (0.15 )
Net income (loss) attributable to common shareholders
   $ 0.00     $ (0.15 )
                 
Weighted average number of common shares:
                
Basic
     12,802,288       12,603,744  
Diluted
     45,001,720       12,603,744  
 
 
 
 
 
MERRIMAN CURHAN FORD GROUP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(unaudited)

ASSETS
  
March 31,
    
December 31,
  
   
2010
    
2009
  
             
Cash and cash equivalents
   $ 6,404,282     $ 5,656,750  
Securities owned:
                
Marketable, at fair value
     3,661,796       4,728,940  
Not readily marketable, at estimated fair value
     892,003       272,463  
Other
     81,876       67,448  
Restricted cash
     1,072,086       1,072,086  
Due from clearing broker
     2,309,648       2,546,581  
Accounts receivable, net
     492,914       470,992  
Prepaid expenses and other assets
     1,156,681       801,946  
Equipment and fixtures, net
     417,428       506,535  
Total assets
   $ 16,488,714     $ 16,123,741  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
                 
Liabilities:
                
Accounts payable
   $ 463,758     $ 346,220  
Commissions and bonus payable
     3,896,318       4,133,924  
Accrued expenses
     2,544,581       2,755,831  
Due to clearing and other brokers
     8,514       7,185  
Securities sold, not yet purchased
     453,366       161,461  
Deferred revenue
     65,000       304,334  
Capital lease obligation
     330,081       397,958  
Total liabilities
     7,761,618       8,106,913  
                 
                 
Stockholders’ equity:
                
Convertible Preferred stock, Series A–$0.0001 par value; 2,000,000 shares
          
authorized; 2,000,000 shares issued and 0 shares outstanding as of
          
March 31, 2010 and December 31 2009; aggregate liquidation
                
preference of $0
     -       -  
Convertible Preferred stock, Series B–$0.0001 par value; 12,500,000 shares
          
authorized; 8,750,000 shares issued and 0 shares outstanding as of
          
March 31, 2010 and December 31, 2009; aggregate liquidation
                
preference of $0
     -       -  
Convertible Preferred stock, Series C–$0.0001 par value; 14,200,000 shares
          
authorized; 11,800,000 shares issued and 0 shares outstanding as of
          
March 31, 2010 and December 31, 2009; aggregate liquidation
                
preference of $0
     -       -  
Convertible Preferred stock, Series D–$0.0001 par value; 24,000,000
          
shares authorized, 23,720,916 shares issued and 23,162,778 shares
          
outstanding as of March 31, 2010; 23,720,916 shares issued and
          
23,720,916 sharesand outstanding as of December 31, 2009;
                
aggregate liquidation preference of $9,959,995 prior to conversion,
          
 and pari passu with common stock on conversion
     2,316       2,372  
Common stock, $0.0001 par value; 300,000,000 shares authorized;
          
13,762,865 and 12,988,073 shares issued and 13,561,288 and 
                
12,786,496 shares outstanding as of March 31, 2010 and
                
December 31, 2009, respectively
     1,376       1,299  
Additional paid-in capital
     133,424,093       133,054,192  
Treasury stock
     (225,613 )     (225,613 )
Accumulated deficit
     (124,475,076 )     (124,815,422 )
Total stockholders’ equity
     8,727,096       8,016,828  
Total liabilities and stockholders’ equity
   $ 16,488,714     $ 16,123,741  
 
 
 
 
 
MERRIMAN CURHAN FORD GROUP, INC.
RECONCILIATION OF NON-GAAP TO GAAP MEASURES – THREE MONTHS
(unaudited)

   
Three Months Ended March 31,
  
   
2010
    
2009
  
   
As Reported
    
Less ICD
    
Less Other (1)
    
Pro-Forma
    
As Reported
    
Less ICD
    
Less Other (1)
    
Pro-Forma
  
                                                 
Revenue:
                                                
Commissions
   $ 10,428,255     $ 7,121,602     $ -     $ 3,306,653     $ 9,117,928     $ 6,073,877     $ -     $ 3,044,051  
Principal transactions
     (206,781 )     -       (447,798 )     241,017       (842,536 )     -       (1,011,777 )     169,241  
Investment banking
     6,046,673       -       -       6,046,673       1,216,417       -       -       1,216,417  
Advisory and other fees
     239,373       -       -       239,373       558,813       -       -       558,813  
                                                                 
Total revenue
     16,507,520       7,121,602       (447,798 )     9,833,716       10,050,622       6,073,877       (1,011,777 )     4,988,522  
                                                                 
Operating expenses:
                                                                
Compensation and
                                                                
benefits
     11,915,532       6,359,281       -       5,556,251       9,265,167       5,615,703       -       3,649,464  
Brokerage and
                                                                
clearing fees
     458,216       21,126       -       437,090       312,959       14,930       -       298,029  
Professional services
     466,794       204,246       -       262,548       767,234       2,050       -       765,184  
Occupancy and
                                                                
equipment
     482,781       8,177       -       474,604       576,390       17,509       -       558,881  
Communications
                                                                
and technology
     694,502       152,429       -       542,073       721,265       43,507       -       677,758  
Depreciation and
                                                                
amortization
     102,491       -       -       102,491       147,242       -       -       147,242  
Travel and
                                                                
entertainment
     525,932       227,423       -       298,509       235,124       155,994       -       79,130  
Legal and litigation
                                                                
settlement expense
     390,077       68,966       179,544       141,567       345,516       16,544       776,385       (447,413 )
Other expenses
     1,103,969       45,467       -       1,058,502       696,623       60,126       -       636,497  
                                                                 
Total operating
                                                                
expenses
     16,140,294       7,087,115       179,544       8,873,635       13,067,520       5,926,363       776,385       6,364,772  
                                                                 
Operating income/(loss)
   $ 367,226     $ 34,487     $ (627,342 )   $ 960,081     $ (3,016,898 )   $ 147,514     $ (1,788,162 )   $ (1,376,250 )

Note – The column headed “Less Other” includes unrealized gains/losses in “Principal transactions” revenues, and litigation settlement and approximate legal expenses paid as related to the Del Biaggio/Cacchione matters.