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| LPLA > SEC Filings for LPLA > Form 8-K on 6-Feb-2013 | All Recent SEC Filings |
6-Feb-2013
Results of Operations and Financial Condition
On February 6, 2013, LPL Financial Holdings Inc. (the "Company") issued a press
release announcing its financial results for the quarter and year ended
December 31, 2012. A copy of the press release is furnished with this Form 8-K
and attached hereto as Exhibit 99.1.
Exhibit 99.1 shall not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise
subject to the liabilities under that Section and shall not be deemed to be
incorporated by reference into any filing of the Company under the Securities
Act of 1933, as amended, or the Exchange Act.
Item 2.05 Costs Associated with Exit or Disposal Activities
On February 5, 2013, the Company committed to an expansion of its Service Value
Commitment, an ongoing effort to position the Company for sustainable long-term
growth by improving the service experience of its financial advisors and
delivering efficiencies in its operating model.
With the assistance of Accenture LLP, the Company has assessed opportunities to
enhance the quality, speed and cost of processes that support the Company's
clients by outsourcing certain functions to firms that specialize in such
processes. In addition, with the assistance of Bain & Company, the Company has
assessed its information technology delivery, governance, organization and
strategy. As a result, acting pursuant to a delegation of authority by the board
of directors of the Company (the "Board"), the Company's management has
committed to undertake a course of action (the "Program") to reposition its
labor force and invest in technology, human capital, marketing and other key
areas to enable future growth. The Program is expected to be completed in 2015.
The Company expects total charges in connection with the Program to be
approximately $70 million to $75 million. Pre-tax charges of $11 million were
incurred in the second half of 2012, which consisted of $7 million of cash
expenditures and $4 million for an asset impairment charge for certain fixed
assets related to internally developed software that were determined to have no
estimated fair value. These 2012 expenses are not considered restructuring
charges under accounting principles generally accepted in the United States
("GAAP"), but are excluded by the Company in reporting certain non-GAAP
measures, including Adjusted EBITDA, Adjusted Earnings and Adjusted Earnings per
share.
The Company estimates that it will incur pre-tax restructuring charges of
approximately $60 million to $65 million in connection with the Program,
including approximately $24 million to $26 million in outsourcing and other
related costs, approximately $21 million to $23 million in technology
transformation costs, approximately $13 million to $14 million in employee
severance obligations and other related costs and approximately $1 million in
non-cash impairment charges.
The Company expects to incur approximately $58 million to $63 million of future
cash expenditures in connection with the Program.
Forward-Looking Statements
Statements in this Form 8-K regarding the Company's future financial and
operating results, strategies and plans, including the expected expenses and
benefits of the Program, as well as any other statements that are not purely
historical, constitute forward-looking statements. These forward-looking
statements are based on the Company's historical performance and its plans,
estimates and expectations as of February 6, 2013. Forward-looking statements
are not guarantees that the future results, plans, intentions or expectations
expressed or implied by the Company will be achieved. Matters subject to
forward-looking statements involve known and unknown risks and uncertainties,
including economic, legislative, regulatory, competitive and other factors,
which may cause actual financial or operating results, levels of activity, or
the timing of events, to be materially different than those expressed or implied
by forward-looking statements. Important factors that could cause or contribute
to such differences include: finalization and execution of the Company's plans
related to the Program, including the Company's ability to successfully
transform information technology systems and transition business processes to
third party service providers; the Company's success in negotiating and
developing commercial arrangements with third party service providers that will
enable the Company to realize the service improvements and efficiencies expected
to result from the Program; the performance of third party service providers to
which business processes are transitioned from the Company; the Company's
ability to control operating risks, information technology systems risks and
sourcing risks; the Company's success in reinvesting the savings arising from
labor repositioning in its service and technology enhancements; changes in
general economic and financial market conditions, including
retail investor sentiment; fluctuations in the value of assets under custody;
effects of competition in the financial services industry; changes in the number
of the Company's financial advisors and institutions, and their ability to
market effectively financial products and services; changes in interest rates
and fees payable by banks participating in the Company's cash sweep program,
including the Company's success in negotiating agreements with current or
additional counterparties; the Company's success in integrating the operations
of acquired businesses; the effect of current, pending and future legislation,
regulation and regulatory actions, including disciplinary actions imposed by
self-regulatory organizations; and the other factors set forth in Part I, "Item
1A. Risk Factors" in the Company's 2011 Annual Report on Form 10-K. Except as
required by law, the Company specifically disclaims any obligation to update any
forward-looking statements as a result of developments occurring after the date
of this Form 8-K, even if its estimates change, and you should not rely on those
statements as representing the Company's views as of any date subsequent to the
date of this Form 8-K.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
99.1 Press Release dated February 06, 2013 ("LPL Financial Announces Fourth Quarter and 2012 Year-End Financial Results")
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