National — Proxy Contest (May 2014)
27 slides from National's proxy contest presentation, May 21, 2014
Slide 1: National Holdings Corporation
i NATIONAL HOLDINGS CORPORATION
Slide 2: Safe Harbor and Other Information
Safe Harbor and Other Information This presentation contains forward looking statements, All statements that express or involve discussions as to: expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but notalways, identified through the use of words or phras
Slide 3: Industry Overview
“i Industry Overview
Slide 4: Industry Overview
Industry Overview FINRA BROKER DEALERS* In 2007, there were 6,000 Broker Dealer’s compared to 4140 in 2014. 30% “0-150 RR’s (small firm) — 3560 BD's — 72K RR's % 1000 BD's in the Tri-State region 150-500 RR’s (medium firm) — 212 BD's—60K RR’s 89% of all brokers 4 >500 RR’s (large firm) — 172 BD’s— 5
Slide 5: Broker Dealer Business in Transition
oo eb ew Fidelity Advice 2.0: Reinventing the BD Model BUSINESS IN TRANSITION Margins continue to contract and remain thin The Broker Dealer Market continues to consolidate The number of Brokers/Advisors is in decline Like the Investors they serve, Advisors are aging. Todays Brokers/Advisors are 50
Slide 6: Seismic Demographic Changes
oo eee SEISMIC DEMOGRAPHIC CHANGES Matures - $40M. 17% of Investors Age 68 Boomers - $75M 31% of Investors Ages 49to 67 Gen X/Y- $127M 52% of Investor Ages 19 to 48 Gen X/Y - Comprise over half the total U.S. population + They are underserved. ‘Most will increase their investable assets by 50% over
Slide 7: A Corporate Overview
A Corporate Overview i NATIONAL vFinance SECURITIES INVESTMENTS GILMAN 44 CIOCIA MANAGEMENT INSURANCE CORPORATION N NATIONAL ee NATIONAL M
Slide 8: Who We Are
Who We Are = National Holdings is the parent company to: Publicly traded: NHLD.OB National Securities Corporation, Member FINRA/SIPC/NFA/SEC ~ A 67year old Financial Services Fiem vFinance Investments, Inc., Member FINRA/SIPC/NFA/SEC Gilman Ciocia National Asset Management National Insurance Corpora
Slide 9: Broker Dealer Snapshot
Broker Dealer Snapshot SNAPSHOT + National has 2 Broker Dealers under its umbrella: * 800 registered financial professionals 130 Investment Advisors + 300 Insurance Agents NATIONAL 25 Futures/Commodities SECURITIES Market Makers in over 6,000 securities 150 offices in 22 states throughout the U.S. v
Slide 10: Financial Professionals
Financial Professionals PROFILE* % Our Producing Brokers average $234,000 per year Median ageis 42.8 years old Ouraverage producer has been affiliated over 6 years % Top 20% of Salesforce averages $697,000 per year in Production “© Ourproducing reps generated $140,000,000 in gross commission/ conces
Slide 11: National Footprint
National Footprint National has 150 offices ~ National Securities branches are in blue - vFinance branches are in ye\ow - Gilman Ciocia/National Securities branches are in red NAT/ONAL 1
Slide 12: Investment Banking
“i Investment Banking NAT/ONAL
Slide 13: Full Service Diversified Financial Services
Full Service Diversified Financial Services + 800+ registered * Equities representatives * Fixed income © $10.0+ billion in client ETFs assets * 150 offices * Over 80,000 active accounts ative Investments * Life Sciences \_ * Healthcare Set + Energy * Technology * Financial Services * Consumer & Ind
Slide 14: Investment Banking Services
Investment Banking Services CORPORATE FINANCE Equity including Public Offerings and PIPES Alternative Offerings Structured Finance Debt Restructuring Private Placements ATM Offerings MERGERS & ACQUISITIONS Mergers Acquisitions Divestitures Spin-Offs Sell-side mandates Buy-side mandates NAT/ONAL NATI
Slide 15: Transactions
Transactions INVESTMENT BANKING Year 2012 39 2013 68 2014 19" National Securities Corporation served as either the Co Manager or Lead Manager on all transactions and private placements SYNDICATE THROUGH NFS Year 2012 96 2013 191 2014 96" NAT/ONAL “theu May 2014 15
Slide 16: National Asset Management
i N NATIONAL ASSET M MANAGEMENT SEC Registered Investment Advisor NATIONAL "
Slide 17: Robust, Open Architecture
Robust, Open Architecture MANAGEMENT + $450MM as the service provider to TransAmerica Financial Advisors © $1.25B in AUM N NATIONAL §125MM in Reporting Assets M * “15MM Social Internet Fund, managed by Lou Kerner 2 ENVESTNET’ Supported by Envestnet with: © $500B in AUM Invest Million Accounts + Regi
Slide 18: Gilman Ciocia
i GILMAN 44 CIOCIA NAT/ONAL
Slide 19: Gilman Ciocia Snapshot
GILMAN ad CIOCIA SNAPSHOT + Products & Services + Tax Preparation and Planning + Approximately 20,000 tax returns prepared last year. + Ranked #4 amongst Accounting Fi { A Ith Provider Magazine. | + The Company has acquired 17 accounting firms in the last 5 years. + When Gilman acquires an accountin
Slide 20: Leadership and Growth
oo ee eee * ” LEADERSHIP AND GROWTH National is one of the largest independent broker-dealers in the industry Offering a full service platform: Broker-dealer, Registered Investment Advisor, Insurance Agency & Managed Futures Platform Top tier clearing through National Financial Services LLC, Member
Slide 21: Financials
“i Financials NAT/ONAL 2,
Slide 22: Statement of Financial Operations
Statement of Financial Operations Consolidated Sta ent ofl “ome ‘Six Month Period Ended ‘Three Month Period Ended March 31, March 31, 2014 2013 % Che 2014 2013__% Chg Revenues 52,684,000 32,949,000 60% 94,478,000 59,393,000 59% Total Operating Expenses 49,314,000 32,233,000 53% 90,311,000 58,724,000
Slide 23: Consolidated Reconciliation to EBITDA, as Adjusted
Consolidated FY 2013 Reconciliationto EBITDA, as Adjusted Three Months Ended ‘Six Months Ended March 31, ‘March 31, Chg % 2014 2013 Chg_2014 2013 Net income, as reported $ 3,236,000 $ 494,000 $ 3,926,000 $ 454,000 Interest expense 8,000 66,000 24,000 230,000 Income taxes 134,000 88,000 304,000 108,0
Slide 24: Consolidated Gross Revenue
National Holdings: Consolidated Gross Revenue Annual Gross Revenue USD in millions $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 2008 2008 2010 2011 2012 2013, 2014TT t t vFinance GILMAN A4CIOCIA INVESTMENTS TAX & FINANEIA AN uN Merger July 2008 Merger October 2013 $5.4MM Cash 22.6MM shares issued to
Slide 25: Market Making and Trading / Components of Revenue
Market Making and Trading / Components of Revenue $60 $50 $40 $30 $20 $10 $0 Components of Revenue USD inmilions I IS ES. IS ES 5 1012 1014 2a MERETAIL INVESTMENT BANKING MARKETMAKING /TRADING = RIA(fka NAM) TAX PREP
Slide 26: Consolidated EBITDA, as Adjusted
National Holdings: Consolidated EBITDA, as Adjusted Annual EBITDA, as Adjusted USD in millions $100 soa $80 $60 $40 s35 sis $20 saz $00 ($2.0) (s1.3) (15) ($40) 2008 2010 2011 2012 2013 20187T™ Quarterly EBITDA, as Adjusted, YoY Quarterly EBITDA, as Adjusted, Sequential USD in millions USD in millio
Slide 27: Important Additional Information
Important Additional Information National, its directors and certain of its executive officers are participants in the solicitation of proxies from stockholders in connection with National’s 2014 Annual Meeting of Stockholders. National intends to file a definitive proxy statement with the U.S. Secu