Oppenheimer Holdings Announces First Quarter 2007 Earnings, Dividend Declaration and $25 million Debt Pay Down



    NYSE and TSX - OPY

    TORONTO, April 27 /CNW/ -

    
    Expressed in thousands of U.S. dollars,
    except share and per share amounts

                                                      Quarter ended March 31,
    Presented in accordance with U.S. generally
    accepted accounting principles (unaudited)              2007        2006
    -------------------------------------------------------------------------

    Revenue(*)                                        $  214,116  $  201,050
    Expenses                                          $  185,934  $  171,639
    Profit before taxes(*)                            $   28,182  $   29,411
    Net profit                                        $   16,790  $   17,217

    Basic earnings per share                          $     1.28  $     1.36
    Diluted earnings per share                        $     1.26  $     0.93
    Book value per share                              $    28.90  $    25.78

    Basic weighted average number of shares
     outstanding                                      13,114,460  12,679,536

    Actual number of Class A non-voting and Class B
     voting shares outstanding                        13,178,379  12,654,887

    (*) Revenue and profit before taxes for the quarter ended March 31, 2006
        include a gain of $11.3 million related to the exchange of the
        Company's three NYSE memberships for cash and NYSE Group common
        shares ($0.52 per share). Excluding this one-time gain in first
        quarter of 2006, profit before taxes for the first quarter of 2007
        was up 55% compared to the same period of 2006.
    -------------------------------------------------------------------------
    

    Oppenheimer Holdings Inc. reported net profit of $16,790,000 or $1.28 per
share for the first quarter of 2007, a decrease in net profit of approximately
2.5% compared to $17,217,000 or $1.36 per share in the first quarter of 2006.
Revenue for the first quarter of 2007 was $214,116,000, an increase of 6.5%
compared to revenue of $201,050,000 in the first quarter of 2006. The Company
recorded substantially improved investment banking activity in the first
quarter of 2007 compared to the same period of 2006, generated primarily by
the increased scope of its investment banking effort and the general
receptivity of the capital markets for securities of mid-sized companies.
Interest income improved in the first quarter of 2007 compared to the same
period of 2006, impacted by higher rates and increased activity in the
securities lending business. Markets were strong during January and February
supporting strong commission and trading revenue but gave back most of its
gains during March, a month in which the markets experienced increased
volatility. Advisory fee revenue was strong during the period compared to the
same period in 2006 as a result of increases in traditional fee-based assets
under management.
    As noted in the note to the table above, the New York Stock Exchange
("NYSE")/Archipelago merger (collectively referred to as "NYSE Group"), which
took place in March 2006, resulted in a substantial one-time gain and had a
significant impact on the Company's financial results for the first quarter of
2006. The Company's revenue and pre-tax results for the first quarter of 2006
reflect a gain of $11.3 million related to the exchange of its three NYSE
memberships for cash and NYSE Group common shares ($0.52 per share).
    The U.S. economy continued to exhibit modest growth during the first
quarter of 2007. Despite strong consumer spending and increased job growth,
the slowing housing market and lower capital spending resulted in lower
economic growth and higher inflation expectations. The Federal Reserve
indicated that they would lean towards higher rates to address inflationary
risks and increasing mortgage defaults will continue to weigh on both equity
and debt markets as the year progresses.
    The Company's expenses in the first quarter of 2007 were 8.3% higher
compared to the same period of 2006 due primarily to higher compensation
costs. Interest expense also increased, mirroring the increase in interest
revenue, stemming from a higher interest rate environment as well as higher
interest due on long-term debt compared with the prior year and increased
securities lending activity. Communications and technology expenses increased
as the Company continued to invest in its infrastructure. The cost of clearing
and exchange fees decreased in the first quarter of 2007 compared to the same
period of 2006 due to lower costs of execution and the Company's decision to
lower its exposure to wholesale activities.
    The Company announced today its intention to repay $25 million of its
senior secured credit note by April 30, 2007, thereby reducing its outstanding
indebtedness under the senior secured credit note to $99.1 million. Of the
$25 million pay down, $10.4 million is a required payment under the terms of
the senior secured credit note and $14.6 million represents a voluntary
prepayment. Under the terms of the senior secured credit note, the interest
rate spread over LIBOR has been reduced by 25 basis points. With strong
earnings and cash flow in the first quarter of 2007 and a positive outlook for
future quarters, the Company determined that it was appropriate to reduce
indebtedness under the senior secured credit note at this time.
    As of January 1, 2007, the Company adopted FASB Interpretation No. 48,
Accounting for Uncertainty in Income Taxes, an interpretation of FASB
Statement No. 109, Accounting for Income Taxes. The Company has recorded a
cumulative adjustment of $823 thousand related to uncertain tax positions as a
reduction to opening retained earnings.
    At March 31, 2007, shareholders' equity was approximately $381 million
and book value per share was $28.90 compared to shareholders' equity of
$326 million and book value per share of $25.78 at March 31, 2006. Investment
advisory assets under management at March 31, 2007 totaled $16.2 billion
compared to $13.3 billion at March 31, 2006.
    The weighted average number of Class A non-voting and Class B shares
outstanding at March 31, 2007 was 13,114,460 compared to 12,679,536
outstanding at March 31, 2006, an increase of approximately 3% due to the
issuance of Class A Shares to employees pursuant to employee stock-based
arrangements. During the first quarter of 2007, the Company did not purchase
any Class A Shares pursuant to its Normal Course Issuer Bid (which commenced
on August 9, 2006, and terminates on August 8, 2007). The diluted weighted
average number of Class A non-voting and Class B shares outstanding for the
three months ended March 31, 2007 was 13,331,445 compared to 19,611,536
outstanding for the three months ended March 31, 2007, a net decrease of 32%
due to the redemption, on July 31, 2006, of $141 million of its variable rate
exchangeable debentures (the "Debentures") and the redemption, on October 23,
2006, of the remaining $20 million of Debentures issued on January 6, 2003 as
partial payment for the acquisition of the U.S. Private Client and Asset
Management Divisions of CIBC World Markets, Inc. The Debentures were
exchangeable into 6.9 million Class A non-voting shares of the Company. These
redemptions were funded by the issuance of a senior secured credit note in the
amount of $125 million, increased bank call loans and internally available
funds.
    The Company announced today a quarterly dividend in the amount of U.S.
$0.10 per share, payable on May 18, 2007 to holders of Class A non-voting and
Class B shares of record on May 4, 2007.

    The Company, through its principal subsidiaries, Oppenheimer & Co. Inc.
(a U.S. broker-dealer) and Oppenheimer Asset Management Inc., offers a full
range of services from 83 offices in 21 states and through local
broker-dealers in 2 foreign jurisdictions. The Company offers trust and estate
services through Oppenheimer Trust Company. Evanston Financial Corporation is
engaged in mortgage brokerage and servicing. In addition, through its
subsidiary, Freedom Investments, Inc. and the BUYandHOLD division of Freedom,
the Company offers online discount brokerage and dollar-based investing
services.

    This press release includes certain "forward-looking statements" relating
to anticipated future performance. For a discussion of the factors that could
cause future performance to be different than anticipated, reference is made
to the Company's Annual Report on Form 10-K for the year ended December 31,
2006.





For further information:

For further information: A.G. Lowenthal, (212) 668-8000; or E.K.
Roberts, (416) 322-1515


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