First Quarter 2009 Results and Dividend Declaration


    TORONTO, April 24 /CNW/ -
    Expressed in thousands of U.S. dollars, except
    share and per share amounts

    Presented in accordance with U.S.                 Quarter ended March 31,
    generally accepted accounting principles
    (unaudited)                                              2009       2008

    Revenue                                              $205,265   $231,875
    Expenses                                             $208,087   $258,664
    Loss before taxes                                     $(2,822)  $(26,789)
    Net loss                                              $(2,014)  $(16,115)

    Basic loss per share                                   $(0.15)    $(1.19)
    Diluted loss per share                                 $(0.15)    $(1.19)

    Book value per share                                   $32.43     $32.69

    Basic weighted average number of
     shares outstanding                                13,072,097 13,563,192

    Actual number of Class A non-voting and Class B
     voting shares outstanding                         13,068,672 13,613,288

    First quarter 2009 results

    Revenue for the three months ended March 31, 2009 was $205.3 million
compared to $231.9 million for the same period in 2008, a decrease of 11%. The
Company recorded a net loss for the three months ended March 31, 2009 of $2.0
million or $0.15 per share compared to net loss of $16.1 million or $1.19 per
share in the same period of 2008.
    Despite the lower revenue during a difficult period in the capital
markets, the Company's pre-tax results were positively impacted by the
reduction in, or elimination of, many costs associated with its January 2008
acquisition. The Company's expenses for the three months ended March 31, 2009
decreased by approximately $50 million (approximately 20%) compared to the
same period in 2008. Cost savings achieved during the first quarter of 2009
were largely driven by decreases in expenses related to deferred compensation
($11.6 million) and guaranteed bonus ($6.3 million) obligations to acquired
employees. Another contributing factor in the reduced expenses for the three
months ended March 31, 2009 related to the migration of the acquired business
to the Company's platform in the second half of 2008 which resulted in a
reduction in transitional support charges of $10.6 million while communication
and technology costs increased by only $2.8 million compared to the same
period in 2008. In addition, interest expense decreased by 54% in the three
months ended March 31, 2009 as a result of lower interest rates in 2009
coupled with decreased securities lending activity and a lower outstanding
balance on the Company's Senior Secured Credit Note compared to the same
period in 2008.
    "While we are disappointed with the results of the first quarter of 2009,
we are pleased with the dramatic improvement in operating performance. The
first quarter of 2009 reflects the significant savings associated with the
full transition of the capital markets business to the Company's platform and
the substantial elimination of non-recurring costs. In the first quarter of
2009, we made strategic additions to our sales and trading capabilities and
hired over 150 experienced financial advisors, resulting from both
dislocations in the market and the strength of our platform. The current
environment presents a tremendous opportunity for us to capitalize as the
financial services sector and overall economy begin to rebound," said Albert
Lowenthal, the Company's Chairman and Chief Executive Officer.
    Credit market disruptions continued throughout the quarter, fed by the
longest and most serious recession in over 50 years. Confidence began to
return in March with equity markets rallying and liquidity returning to some
areas of the markets. U.S. unemployment approached a post-WWII high and low
consumer confidence has substantially restricted the economy's ability to
recover. The infusion of significant government assistance to the banks and
financial services sector as well as historic levels of government spending
are likely to bring some relief over the next several quarters and limit
further erosion as the housing and other real estate markets try to find an
equilibrium point. Investor confidence should follow trends in the banking
sector and market conditions should begin to improve over the balance of the
    Revenue from commissions, interest, investment banking and advisory fees
declined in the three months ended March 31, 2009 compared to the same period
of 2008. Of particular significance were the declines in advisory fees (35%)
and interest revenue (58%). Assets under management declined 30% to $11.5
billion at March 31, 2009 from $16.5 billion at March 31, 2008 which
correlates with the decline in advisory fee revenue and is in line with
overall market declines. The market decline and aversion to risk by clients
also affected average customer debit balances which were 38% lower in the
three months ended March 31, 2009 compared to the same period in 2008. That
coupled with a decline of 300 basis points in interest rates resulted in lower
margin interest revenues of $7.6 million in the three months ended March 31,
2009 over last year's comparable period. Commission revenues were 6% lower
during the three month period ended March 31, 2009 compared to the same period
in 2008 primarily due to significant declines in the equity markets during
January and February 2009 which led to lower trading volumes.
    Investment banking activities remained at significantly reduced levels
resulting from companies' limited access to credit and the lack of acceptance
by the market of equity issuance throughout the period. Merger and acquisition
activity also remained at low levels due to the inability of buyers to issue
acquisition related debt and concerns over the health of the economy and
corporate balance sheets. Municipal public finance activity also was
significantly affected by credit and budgetary concerns for municipalities
resulting in lower activity in this sector. Overall revenues from investment
banking declined by 47% for the three months ended March 31, 2009 compared to
the same period in 2008.
    Principal trading profits increased 150% in the three months ended March
31, 2009 compared to the same period in 2008. These gains resulted from the
contribution of new institutional fixed income sales and trading
professionals. Profits from trading increased significantly as a result of
unprecedented volatility in the credit markets, widening spreads and the
general lack of liquidity available to investors.
    The decrease in the Company's effective tax rate for the three months
ended March 31, 2009 was the result of the impact of losses in foreign
jurisdictions for which no future tax benefit is accrued and the magnitude of
non-deductible items on lower pre-tax operating results which was partially
offset by favorable settlements with taxing authorities during the period.
    On March 31, 2009, the Company repaid $10.0 million of principal on its
Senior Secured Credit Note bringing the outstanding balance to $37.7 million.
Of this repayment, $9.0 million was a voluntary repayment.
    At March 31, 2009, shareholders' equity was approximately $424 million
and book value per share was $32.43 compared to shareholders' equity of $445
million and book value per share of $32.69 at March 31, 2008.
    The weighted average number of Class A non-voting and Class B shares
outstanding for the three months ending March 31, 2009 was 13,072,097 compared
to 13,563,192 for the three months ended March 31, 2008, a decrease of
approximately 4% due to the repurchase of shares pursuant to the Normal Course
Issuer Bid, the majority of which were repurchased in the fourth quarter of

    Issuer Bid

    During the first quarter of 2009, the Company purchased 50,000 Class A
Shares at an average price per share of $11.18 pursuant to a Normal Course
Issuer Bid. This completes the Company's intended purchases pursuant to the
Normal Course Issuer Bid, which commenced on August 19, 2008.


    The Company announced today a quarterly dividend in the amount of U.S.
$0.11 per share, payable on May 29, 2009 to holders of Class A non-voting and
Class B shares of record on May 15, 2009.


    The Company is holding its annual and special meeting of shareholders on
May 8, 2009 at which time shareholders will be asked to approve a change in
the jurisdiction of incorporation of the Company from Canada to Delaware.

    Oppenheimer, through its principal subsidiaries, Oppenheimer & Co. Inc.
(a U.S. broker-dealer) and Oppenheimer Asset Management Inc., offers a wide
range of investment banking, securities, investment management and wealth
management services from over 94 offices in 26 states and through local
broker-dealers in 4 foreign jurisdictions. Oppenheimer employs over 3,500
people. The Company offers trust and estate services through Oppenheimer Trust
Company. OPY Credit Corp. offers syndication as well as trading of issued
corporate loans. Evanston Financial Corporation is engaged in mortgage
brokerage and servicing. In addition, through Freedom Investments, Inc. and
the BUYandHOLD division of Freedom, Oppenheimer 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 Oppenheimer's Annual Report on Form 10-K for the year ended December 31,

For further information:

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

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