Cohen & Company Inc.
Q2 2011 Earnings Call Transcript

Published: 9 Aug 2011

[Operator:]

Good morning ladies and gentlemen and welcome to Institutional Financial Markets second quarter earnings conference call. My name is Julianne and I will be your operator for today. At this time all participants have been placed in a listen-only mode. Following formal remarks, the call will be opened to a question-and-answer session and instructions will be provided at that time. As a reminder, this conference call is being recorded. Before we begin, IFMI would like to remind everyone that some of the statements the company makes during this call may contain forward-looking statements under applicable security laws. These statements may involve risks and uncertainties that could cause the company’s actual results to differ materially from the results discussed in such forward-looking statements. The forward-looking statements made during this call are made only as of the date of this call and the company undertakes no obligation to update such statements to reflect subsequent events or circumstances. IFMI advises you to read the cautionary note regarding forward-looking statements in its earnings release and in its most recent Annual Report on Form 10-K filed with the SEC. Please also note that in the company’s quarterly earnings release for the second quarter of 2011 the non-GAAP measures have been reconciled to GAAP measures in accordance with SEC regulations. I would now like to turn the call over to Mr. Daniel Cohen, Chairman and CEO of IFMI.

[Daniel Cohen:]

Thank you, Julianne and thank you everybody for joining us for our second quarter 2011 earnings call. With me on the call are John Costas, the Chairman of PrinceRidge; and Joe Pooler, our CFO. Before we discuss the financial results for the quarter, and the progress that we’ve made in terms of integrating our institutional capital markets business with PrinceRidge, let me first comment on our progress with our strategic, the transaction itself. On 1st of June we were pleased to announce the closing of the PrinceRidge investment, and our second quarter results include one month of PrinceRidge’s operating results. Since that time, we’ve been working hard to integrate the two platforms including combining offices, the value adding asset class performance reducing redundant costs. Although we were happy to past the first milestone with PrinceRidge, the work really has just begun. Additionally, we’ve really entered a difficult and interesting stage in the market for fixed income. We work hard to be effectively positioned. However as Joe will describe, we have continued that good liquidity continue to generate net cash in the business is reflected in our adjusted earnings. And further, we have a great team, we’ll be able to develop our business and take advantage of opportunities for the overall difficulties in the financial sector. Turning to our results for the second quarter, we did experienced year-on-year decreases in our revenue line items and our net trading revenue was down $3.5 million from the prior year. In addition, our principal investments did not generate meaning year-over-year revenue. That said we were pleased that we did earn $4.4 million in incentive piece in our asset management business in the second quarter from the successful and elimination of one of the Deep Value Funds, Fund 1A. We continue building other areas in our asset management business and we believe there is great linked value in that business line. In addition, though we were disappointed by the decline in the year-over-year revenue, adjusted operating income was essentially breakeven for the quarter. As of June 30, 2011, our total equity was $89.2 million. Notably, our performance after considering the impact of the transaction and the transition costs along with our solid capital position has enabled us once again to return value to our stockholders through a $0.05 dividend for the quarter. Overall, there is clearly much work to be done in IFMI. You should know however that we were keenly aware of what we must do to drive to stronger results and believe that we have taken the steps to create long-term value in the company. To this end, one initiative we are taking is the implementation of the numerous cost savings measures aimed at eliminating duplicate expense and focusing the combined IFMI and PrinceRidge on the most profitable business lines. John will describe more of the combined entity, and Joe will describe our financial results, our liquidity, and our balance sheet. Looking ahead, we believe that with our new colleagues at PrinceRidge, we have the foundation and team in place to advance our strategies and delivered enhanced stockholder returns for the months and years to come. With that John, can I turn it over to you to talk about our capital markets business?

[John Costas:]

Yes, thank you Daniel. As Daniel has already alluded to, we made it through a couple of milestones during the second quarter. The first with the interim regulatory closing of the transaction, and we continued to interact with the regulators and the review for the transaction is on track for final closing later this year. Importantly the two businesses now are collocated in their headquarters in New York and in Chicago and the other regional offices in the U.S. And we’ve integrated the businesses from a personnel point which is what again as Daniel has alluded to, to cost rationalization across the businesses. We’ve experienced cost savings so far as we’ve integrated the middle and back offices, and we’re working with service providers to also consolidate our contractual obligations for the underpinning for the business. All-in-all, we are on track. We are striving to drive down the breakeven cost of the business, and we believe in the space that we’re operating and the size and scale of our business, that being one of the low cost providers in terms of infrastructure cost and non-personnel costs, they’re an absolute priority. The market environment as no one needs to really emphasize is extremely challenging. It has led us to closely manage risks of the business. And so far as we can comment on the second quarter, the business although revenues are not where we would like them to be, the business operating in roughly breakeven fashion during the initial period. Third quarter and the current state of business we have continued focus on consolidation from a cost standpoint, but interestingly importantly, we want to expand our capabilities and the number of activities that are in the business portfolio. We are focused on expanding our coverage platform within the investment banking franchise and then opportunistically, adding trading and sales capability across our structured products and credit businesses. There have been a number of opportunities to do so over the last couple of months and they continue to rapidly present themselves as consolidation among the smaller broker-dealers in the fixed income and equity sales and trading space is accelerating due to the market turmoil that we’re experiencing. We’ll continue to breakdown costs and add personnel and our business plan and focus will be along these lines for the reminder of the year, again with our focus on migrating through the remaining issues in parts of the regulatory closing process. With that I’ll turn back to Joe and happy to answer questions later in the call.

[Joe Pooler:]

Thank you, John. First for our statement of operations, we did continue to generate positive adjusted operating income for the quarter. Our adjusted operating income was $3 million or $0.18 per fully diluted share. And we are pleased to announce a quarterly dividend of $0.05 per share. As Daniel noted, our net trading revenue decreased about 17.5% from the prior year quarter to $16.2 million, primarily due to our prior year period benefiting from gains on certain leverage credit products in our trading investments as well as the global market conditions resulting in lower activity in the second quarter of ‘011. As a reminder, with the closing of PrinceRidge, our second quarter consolidated results include one month of PrinceRidge’s results including $1.4 million of trading revenue. We continued to deploy some risk capital in our capital markets trading business. At the end of the quarter, we had about $57 million of net equity capital invested in our net trading portfolio. Our asset management revenue decreased from $6.2 million in the prior year quarter to $5.3 million in 2011. The decrease is primarily the result of reductions in revenue due to the sale of our Strategos Fund management contracts as reported at the end of the first quarter of ‘011. Our principal transactions and other revenue for the second quarter of 2011 was only $800,000. It’s worth noting that in the prior year quarter, we had significant principal transactions and other revenue of $8.5 million primarily from gains on our investments in Star Asia, our Deep Value Fund and a certain asset-backed principal investment. In later half of 2010, the first Deep Value Fund was liquidated and the asset-backed principal investment was also sold. Our total operating expenses for the second quarter of ‘011 of $31.6 million were up $500,000 from the prior year period. The change includes a $1.8 million decrease in compensation and benefits expense, despite the current year quarter including a one-time compensation charge of $4.6 million related to the amendment of the employment contract of the former CEO of our capital markets segment. Chris is scheduled to leave the company at the end of August. Otherwise the decrease in compensation benefits is primarily related to the year-over-year decline in revenue, deducting the $4.6 million one-time compensation charge, compensation benefits as a percentage of revenue was 72% in the current year quarter. The decline in compensation benefit expense was offset by operating expense increases of $500,000 in the business development, occupancy and equipment line item, $1.1 million in the subscriptions and clearing and execution line item, and $900,000 in the professional services and other operating expense line item. About $0.5 million of these combined increases were related to the PrinceRidge transaction, transaction or transition costs. We continue to focus on controlling on all discretionary operating expenses. And as John and Daniel has noted, as part of the PrinceRidge combination, we are exploring cost cutting initiatives. The measures are expected to result in substantial savings and a reduction in our – the breakeven point for our broker-dealer business. In terms of our balance sheet, again we had $57 million of net equity capital invested in our net trading portfolio at the end of the quarter which consisted of assets of $167 million of trading securities, $158 million of receivables under resale agreements, and $1.9 million of restricted cash offset by liabilities of $38.5 million of payables to brokers, dealers and clearing agents, $52 million of trading securities sold, not yet purchased and the $179 million of securities sold under agreements to repurchase. The other investments at fair value line item consists primarily of our seed investments in sponsored and managed vehicles, the $42.6 million fair value includes $35.9 million related to our investment in Star Asia. At June 30, our consolidated corporate indebtedness is carried at $42.1 million and just to recap the timing in the PrinceRidge transaction and the accounting for the PrinceRidge transaction, we closed the transaction on June 1st. We contributed our equity interest in our Cohen & Company capital markets operating broker-dealer into PrinceRidge and exchange went approximately 78% interest in PrinceRidge. As a result of our majority interest, we began consolidating PrinceRidge in our financial statements as of June 1. The portion of the equity in PrinceRidge that was retained by the pre-closed PrinceRidge Partners is reflected as a $15.5 million redeemable, non-controlling interest between the liability and equity section on our consolidated balance sheet. We believe that our unrestricted cash balance of $15 million combined with the $57 million we have invested in our net trading portfolio is sufficient to fund the near-term business model. Our operating performance after considering the one-time nature of the PrinceRidge transaction and transition costs, combined with the solid capital position and our continued focus on expense control has contributed to our decision to continue the quarterly dividend of $0.05 per share. The dividend is payable on September 6th, to stockholders of record on August 23rd. And finally as announced in mid July, we completed an exchange offer for our outstanding 7.625% convertible senior notes of the $19.5 million of previously outstanding old notes, to $7.6 million were tendered for exchange. We now have $11.9 million of 7.625% convertible notes and $7.6 million of 10.5% convertible notes. In exchange for the higher interest rates or the higher interest rate the new notes had an initial holder optional redemption date of May of 2014 instead of May of 2012. We expect to file our 10-Q no later than Friday, August 12. And with that, I’ll open it or I’ll turn it back over to Daniel for some closing remarks before questions.

[Daniel Cohen:]

Great. Well thanks, Joe and thanks John. I think we’ve made progress in the previous quarter, despite more difficult market conditions in terms of diversifying our business in fixed income and investment banking. In terms of moving forward our platform we’re making it a much stronger platform. And we continue to see some possibilities moving forward in the specialty asset management businesses that we’re in as well as continued revenue from there. We need to cut costs and reduce our breakeven point, the PrinceRidge transaction allows us to do that. It adds strong management in order to do that. And I think that over the next 12 months, you will see the positive impact of those efforts. And so on that basis, Julianne, can I open it up for questions.

[Operator:]

Thank you. (Operator Instructions) We’ll pause for just a moment to compile the Q&A roster. (Operator Instructions) Your first question is from the line of Mark Duffy [ph] from MMD Hudson [ph].

[Mark Duffy:]

Can you hear me?

[Daniel Cohen:]

Yes, Mark.

[Mark Duffy:]

Hi, how are you?

[Daniel Cohen:]

How are you?

[Mark Duffy:]

I am great. You guys have done a lot of talking about cost cutting, and I know $5.2 million last year, basically in total comp. I was wondering how your compensation this year given before diluted market cap when the stock is down to what about $30 million bucks or something, and there hasn’t really been a positive [ph] since 2009 almost, so thanks for the question.

[Daniel Cohen:]

All right, great. Thank you for the question. Actually on a going forward basis since the beginning of the PrinceRidge transaction, I’ve reduced my base compensation to $200,000 per year, and a participation of the profit from moving forward with the PrinceRidge organization. And so I think that that – now I myself own over five million shares equivalent in the company. And I think that it was both the right thing to do for outside shareholders and the right thing to do for myself. With the replacement of or with the change in the management of our capital markets business, we’ve bought base salaries substantially lower and focus people specifically on cash results in the broker-dealer and institutional capital market subsidiary. So I think that’s one element of the cost savings that you will see moving forward in terms of cost savings relatively quickly. And I think it’s the right attitude because I think we have a great platform to make money in the long-term. And hopefully it sends the right message to everybody.

[Operator:]

(Operator Instructions) Your next question is from the line of Rick Sherman with Oppenheimer.

[Rick Sherman:]

Hi Daniel.

[Daniel Cohen:]

Yes, hi Rick.

[Rick Sherman:]

I was going to ask that same question because last year the total compensation just for the top three people was like $12 million which would have added $0.50, $0.60 a share to the stock, and after 66% decline in stock on the time that this got started, it just seemed kind of excessive. So I am very happy to hear to what you just said. I would like to see – it seems like you said you’re the largest shareholder, you certainly can create wealth through share appreciation that would benefit everybody, not just senior management. So that question has been answered. I’m happy to hear that. I would like to know about Star Asia, which I think is one of the issues that wasn’t really touched much in your press release but is of great concern to most people because of the unknown nature of the nuclear issue, what properties are – what is the current status of that, I know on the last call you mentioned that it only affected I don’t know, I don’t remember the exact number like 7% of the properties over there, but clearly I see you didn’t have to really do much in the way of a write down or anything but, is there any generation – it seems like that’s not generating anything anymore, where that used to be a huge driver of the previous year like of $8 million. So could you give a little bit of some clarity as to what your situation is with that and how you feel about that situation at this time?

[Daniel Cohen:]

That’s great. Let me just reiterate that, that I did the change in my compensation before this substantial market decline in the share price, I saw I think that we can generate a lot of wealth here. As far as Star Asia is concerned, the last quarter was putting things in place that will see the positive benefits in the next few quarters going forward. We do believe that the nuclear meltdown/earthquake/tsunami impact on us was minimal. We do see especially in Tokyo, signs of a vibrant financing market for properties in our portfolio and we do believe things are moving forward well. We do believe that over the next two quarters, we will – the most important element is that we will eliminate the senior secured and senior indebtedness of which the company owes the underlined vehicle owes to JP Morgan and to Credit Suisse in a number of transactions that we do have visibility on. This quarter was relatively stable, but we’ll still work hard to do two things and we think that – the end of this year and in 2012, we will see monetization of part of our investment in Star Asia.

[Rick Sherman:]

Okay, thank you. And if I could follow-up on the four point something million that came in from one of the other vehicle that’s winding down, I assume that that’s basically going to be non-reoccurring. So what if anything is going to replace some of that income?

[Daniel Cohen:]

Well we do have – we manage separate accounts and other vehicles, some of which we believe have substantial embedded gains. So I do think that we will continue to see incentive fee realizations. As well not only on those vehicles but also on Deep Value Fund too, we exchanged our bottom line and profits participation for top line revenue share and we continue to move forward on in some of the very narrow areas where I can say that we really are world experts in terms of creating value for third-party accounts.

[Rick Sherman:]

Thank you.

[Daniel Cohen:]

Thank you.

[Operator:]

You next question is from the line of Dwight Emanuelson with Merrill Lynch.

[Dwight Emanuelson:]

Hi Daniel, how are you?

[Daniel Cohen:]

Hi, Dwight, how are you?

[Dwight Emanuelson:]

Good. I’ve been a pretty large shareholder for a year or two now and obviously even may be back from the Alesco days. And I obviously Christopher leaving and this merger occurring, leaves a pretty big question mark in my opinion. You’ve got Christopher leaves with I don’t know how many shares he has but its substantial, a stock that’s trading at $2.00 that’s very illiquid, no research behind it etcetera, obviously he is leaving, I don’t have any idea why and maybe you could address that. And his intentions of getting liquid, do you believe these are long-term player with your management as an amicable departure, because obviously there is no ability to get him liquid in my opinion. So and also one last comment, we’ve talked for last year or two about getting your story out and obviously a lot of the story has changed, are you going to do anything about trying to get some research to follow this on your micro cap or something to stem this decline and or stock buyback, if it’s so cheap here, trading well below book value with some of this cash be better off buying back the stock and or your guys buying more stock, so that’s really my comment.

[Daniel Cohen:]

Okay. So just obviously we’ve all worked together for a long-time and I think that this departure really resulted in taking the capital markets group in a different direction. I know when many people have equivalent esteem that have for Chris Ricciardi. And it was simply a matter of repositioning our company. As to Chris’s stock position, he is still a substantial shareholder in the company and I know that obviously he wants us to do well and create value for him. And he as do I and I am sure there is Joe and John, feel that our stock is substantially undervalued. As to whether or not it creates an overhang on the stock. It probably does, but I am not an expert in that trading situation. And so that’s primarily the case. We do have tremendous value in our net loss, so switching to the last portion of your question, we do have tremendous value in our net loss carryforwards and other net losses on securities that don’t show up anywhere on our balance sheet, but that we believe that working to create value there. It has historically overshadowed our ability to repurchase shares without triggering a change of control for tax purpose event. And that’s something that’s constantly shifting. We do have an authorization to repurchase stock. And certainly the timeline for us doing so is getting shorter. And we do want to continue creating this and we believe that our job is to distribute earnings from the company as well build the company. So we’ve made our substantial investment in the PrinceRidge capital markets business going forward. And we believe we have liquidity and reassess how we should move forward in terms of doing things like stock buybacks or other situations like that. So I hope that – did that answer your questions?

[Dwight Emanuelson:]

It did, I guess I mean Chris has obviously been a big part and him leaving and then John coming in and doing the PrinceRidge transaction obviously it’s a very difficult in the time, I think anybody in the right mind will see the stock go from $5.00 to $2.00 and no real liquidity, you’re sort of stuck in at anyway. And obviously we’re getting a little bit of cash dividend or sort of play cake [ph], those of us who really can’t really vote with our feet to leave, I mean to say that we’re disappointed and the performance would be drastic understatement, I think you guys obviously you’re trying to do something about it, your compensation is going dramatically down may be everybody to align, but until the stock performs, having been with Merrill Lynch for a long time, you’re judged on your stock performance as a CEO, obviously you’re doing everything you can, you’re a big shareholder but obviously the guys before me that ask questions, nobody has been who has been long in this equity has made any money, I mean all the way back from the Alesco days. So may be its just whether – the question is whether you guys are ever going to make any real money in this is a big question, and you got to prove it. So I don’t know if that answered it, but I know anybody who is long in this equity I have one or two clients that are in it, and I know nobody is happy to be in it. So you guys need to change the personality of the company and start making some money and start making some good decisions.

[Daniel Cohen:]

Well I think…

[Dwight Emanuelson:]

Until that, (inaudible).

[Daniel Cohen:]

I think we’ve changed the persona of the company in terms of the PrinceRidge transaction. I think we do have strong leadership there that’s incentivized to create value from the company. And I do think that we’ve put things in place for medium term and the long-term shareholder value and creating value for people. And so – and I agree with you, we will be judged on whether people make money in this situation in the end. And certainly, as owner of more than five million share equivalence, I just don’t have the number at the top of my head, the opportunity for me to make money is clearly aligned with the shareholders. And that’s the only way I’ll make money in terms of moving forward.

[Dwight Emanuelson:]

Anybody who owns a stock is betting that you can create value at some future time and obviously have good communications with the shareholder base. And just trying to do everything you can to make this a good long-term investment and obviously the last couple of weeks in the market, I don’t know anybody who has been long – any equities other than gold have made any money. So if you’re certainly not blind for that, but we certainly would like to see some of the things that you’ve been talking about which is sort of telling the story of IFMI, you’ve changed it from Alesco to your name, to now Institution Financial Markets. And I don’t think – I think you’re running out of names to change it too, let’s start changing it to, let’s try to make some money in this, I mean that’s kind of my concern, as it’s been pretty long road and I am sure everybody who is a shareholder here is getting kind of tired.

[Daniel Cohen:]

Well I believe that we’re near the turning point in this and I believe that the strategies we’ve put in place will allow us to make money.

[Dwight Emanuelson:]

Good, thank you.

[Daniel Cohen:]

Thank you.

[Operator:]

Your next question is from the line of John Lydecker with MJ Whitman.

[John Lydecker:]

Yes, good morning. I was wondering if you could take the $42.1 million debt on the balance sheet as of June 30 and just break that down between senior and junior, both in terms of face amounts and carrying values?

[Daniel Cohen:]

Joe?

[Joe Pooler:]

Yes, the $50 million of junior trust preferred that are carried at $17 million, and then the senior – the convertible that we just did the exchange on is still carried at approximately $19.5 million. So that’s $19 million and $17 million and then there is about $3.5 million of junior bank debt. And then there is a subordinated, there is about $2 million stock [ph] notes left outstanding at the operating company.

[John Lydecker:]

Right, so $19.5 – and carrying value $19.5 million and $17 million, $3.5 million and $2 million, yes, that would add up to the total. Okay, thanks a lot.

[Operator:]

Your next question is from the line of Susan Schweitzer [ph] with Salient Advisors [ph].

[Susan Schweitzer:]

Hi Dan.

[Daniel Cohen:]

Hi, Susan, how are you?

[Susan Schweitzer:]

I am okay, how are you? I guess not surprisingly my questions are not hugely different than some of the others that have been asked but maybe I can put a different tone on it. You alluded quite a number of times to the change in your compensation structure, and obviously you and stock. I guess I am just curious sort of other than your stock ownership so that there is not room for kind of misunderstanding six or nine months down the line. If you could talk about sort of the other members of the management team and then just maybe to get cash bonuses of some sort this year or incremental stock. What are the hurdles of the company you’ve kind of set out for itself in terms of operating performance and value creation?

[Daniel Cohen:]

Well we’ve published – I can talk directly about my own compensation, we published it in the proxy materials and in the 10-K information relating to highest compensated people and exactly positions. In terms of the senior management team of PrinceRidge, as the key operating officers including myself compensation and cash bonuses are related to the actual profitability net income of PrinceRidge, and very closely related to it and approximately as a group 25% profit share in the net income of PrinceRidge. Beyond that I would refer you to the materials that we put out. Senior management has – including our Chief Financial Officer have contractual obligations. And certainly the metrics that we are going to use has been published in our materials relative to discretionary compensation. As to my viewpoint, the discretionary compensation really will be based upon shareholder return and the creation of value for shareholders.

[Susan Schweitzer:]

I guess, I mean maybe another way of asking this is people have asked about the stock buyback, you’ve indicated that there are issues with the NOLs I guess the deferred tax asset and what not, I mean what about a special dividend, paying a $0.05 dividend it’s pretty paltry and I think there is obviously very broad concern about what is going to happen to the cash that is currently at the company given the history of compensation you’ve talked about bringing in a lot of people, you’ve talked about bringing in investment bankers. Can you talk about your plans to structure compensation for anyone that you would bring in and then about the company considering a special dividend or something else to sort of give some of the cash back to the shareholders?

[Daniel Cohen:]

As we’ve said, I mean first of all, nobody would be a bigger cash beneficiary than I would be if we made a special dividend. It’s something that our Board would, obviously will consider all ways of returning value to shareholders. That having been said, at the point where we feel that it’s appropriate which we think would be over the next six months, we would anticipate being in a position to start using some of our ability to buy back stock. If not doing it in a short term. So in terms of looking to bring people on, I think our philosophy is very much to align people with their own revenue production. And the opportunity that we have as a platform is really to give people the opportunity to be in a commission based environment, where they are able to get a percentage of revenues. And it’s really that kind of plan, with that kind of mentality that we’re looking to bring on. John, do you have any other comments on that?

[John Costas:]

I would only reinforce the message Daniel has put forward. Within PrinceRidge’s activities we really are aligning management’s focus on creating a bottom line above the return rate for our shareholders. And the senior producing professionals that we would add to staff all have a similar characteristic in terms of a low fixed cost commitment by PrinceRidge and marginal costs that’s associated with performance. So the environment that we see is not reducing our opportunity to attract those types of professionals, but actually it’s expanding. And so I try to allude to the fact that we’re seeing very rapid consolidation among the 200 or so small boutique investment banks and trading operations. We are seeing no less than one of these institutions every two to three weeks come through our doors with the opportunity to pick the more attractive element for their businesses. So we’re trying to do that within the context of a very disciplined cost management overlay that drives down our breakeven costs, drives down the compensation costs that are not associated with performance. And management compensation is completely aligned to create a bottom line return that hopefully would be attractive to shareholders in addition to creating a management bonus pool for our management team.

[Susan Schweitzer:]

I think it would be, I guess my only comment is that all sounds good, I think that it would be nice if there was some indication of if you can’t buyback for the next six months, we will pay a special dividend, I mean something that people could hang your head on a little bit given how low they’ve been as equity shareholders being asked to go through sort of another reconfiguration of the business, obviously not everybody there is responsible for the history, but I think it would be nice to know that there is a specific timeframe to look at what’s going to be done with the cash to help generate value for the shareholders.

[Daniel Cohen:]

Okay. I certainly anticipate that within the next six months we’ll be in a position to repurchase stock. We have an authorization available. And certainly we find it to be cheap.

[Susan Schweitzer:]

Okay, that’s it for me.

[Daniel Cohen:]

Great. I just want to emphasize that any reduction in share count would go disproportionately to my interest. So we’re very much aligned with that.

[Susan Schweitzer:]

Okay.

[Daniel Cohen:]

Great.

[Operator:]

There are no further questions at this time. I’ll turn the floor back over to Mr. Cohen for any final comments.

[Daniel Cohen:]

Well thank you. Obviously, we appreciate the shareholders feedback as direct as it was and anticipated not that but really moving our business forward to create two things, one of which is to continuing asset management business and the other one of which is really a world class institution with the leadership of the management team that PrinceRidge really brings to us. So I would like to thank everybody and hopefully share positive news on our next conference call. Thank you very much. Bye-bye.

[Operator:]

Thank you all for participating in today’s conference call. You may now disconnect.