PITTSBURGH--(BUSINESS WIRE) -- HFF, Inc. (the Company), through its Operating Partnerships, Holliday Fenoglio Fowler, L.P. (HFF LP) and HFF Securities L.P. (HFF Securities), is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry based on transaction volume and is one of the largest full-service commercial real estate financial intermediaries in the country.
Consolidated EarningsFirst Quarter Highlights
In the face of the continuing difficult and challenging credit and liquidity conditions in all global capital markets, especially in the U.S. capital markets, the Company generated first quarter total revenue of $32.2 million compared to $55.5 mill
ion in the first quarter of 2007, a decrease of $23.4 million or 42.1%.
This decrease in operating income is attributable to the decrease in production volumes and related revenue from the prior year in several of the Company's capital markets services platforms. Offsetting this decrease in revenue of approximately $23.4 million is a reduction in total operating expenses of approximately $14.1 million in the first quarter 2008 compared to the same period of the prior year.
This reduction in operating expenses is a result of a decrease in cost of services of approximately $11.0 million which is primarily due to the decrease in commissions and other incentive compensation directly related to the low
er capital markets services revenues and a decrease in operating, administrative and other expenses (including depreciation and amortization) of $3.1 million, which is primarily related to a reduction in other performance based accruals and depreciation and amortization.
(For a detailed copy of the company’s news release, please contact John H. Pelusi Jr., (top right photo) Chief Executive Officer, jpelusi@hfflp.com, 412 281 8714, or Gregory R. Conley, Chief Financial Officer, 412 281 8714, gconley@hfflp.com, or Myra F.Moren, Director, Investor Relations, 713 852 3500, mmoren@hfflp.com, or Laurie Fish McDowell, HFF Associate Director, Marketing, 617 338 0990, lfish@hfflp.com.)
Consolidated EarningsFirst Quarter Highlights
In the face of the continuing difficult and challenging credit and liquidity conditions in all global capital markets, especially in the U.S. capital markets, the Company generated first quarter total revenue of $32.2 million compared to $55.5 mill
ion in the first quarter of 2007, a decrease of $23.4 million or 42.1%.The company had an operating loss of $1.5 million for the first quarter of 2008 compared to an operating profit of $7.7 million in the comparable period of 2007, a decrease of approximately $9.3 million, or 119.9%.
This decrease in operating income is attributable to the decrease in production volumes and related revenue from the prior year in several of the Company's capital markets services platforms. Offsetting this decrease in revenue of approximately $23.4 million is a reduction in total operating expenses of approximately $14.1 million in the first quarter 2008 compared to the same period of the prior year.
This reduction in operating expenses is a result of a decrease in cost of services of approximately $11.0 million which is primarily due to the decrease in commissions and other incentive compensation directly related to the low
er capital markets services revenues and a decrease in operating, administrative and other expenses (including depreciation and amortization) of $3.1 million, which is primarily related to a reduction in other performance based accruals and depreciation and amortization. The Company reported a net loss for the first quarter 2008 of approximately $1.0 million compared with net income of $3.2 million for the same period in 2007.
The Company's net loss reported for the first quarter 2008 is not directly comparable to the net income reported for the first quarter 2007 primarily due to the minority interest adjustment, which reflects HFF Holdings, LLC's (Holdings) ownership interest in the Operating Partnerships as well as the change in income tax structure following the reorganization transactions and initial public offering on January 30, 2007.
This first quarter 2008 net loss includes a $0.1 million adjustment to reflect the impact of the minority ownership interest of Holdings in the Operating Partnerships for the entire three months of the quarter.
The Company made an adjustment of $3.9 million in the first quarter 2007 to reflect the minority ownership interest of Holdings in the Operating Partnerships for two months of the quarter subsequent to the initial public offering on January 30, 2007.
Prior to January 30, 2007, Holdings owned 100% of the Operating Partnerships and, accordingly, there were no adjustments to reflect the impact of minority ownership interests or associated corporate federal and state income taxes for the period of January 1, 2007 through January 30, 2007.
Net loss attributable to Class A common stockholders for the first quarter 2008 was $0.06 per diluted share.
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