Annual Report
 
 
The many accomplishments of the past year give us another opportunity to celebrate the meaningful partnerships we have created in pursuit of great outcomes for our clients and fellow associates. Each of Baird’s five businesses – Private Wealth Management, Equity Capital Markets, Private Equity, Fixed Income Capital Markets and Asset Management -- performed well during 2007 and contributed to a record year, in spite of the uncertainty in the debt and equity markets during the second half of the year.

Baird’s net revenues for the year totaled $729 million, a 17% increase over 2006. Strong growth from our core operations in 2007 produced record operating income of $105 million, a 12% increase over 2006. This growth more than offset income from a contract relationship with Northwestern Mutual that concluded in 2006. Earnings before taxes grew 31% to $90 million, due to our business growth and earlier deleveraging efforts, which included prepaying 42% of the debt we assumed when we became independent in 2004 and recognizing related one-time charges.

Baird’s financial achievements only have meaning as a measure of the successful outcomes we help to create for clients. We care passionately about the partnerships we have with Baird clients and fellow associates, and it shows in our dedication and energy in finding creative, appropriate solutions. In 2007, we again had meaningful recognition of those outcomes from numerous independent sources:

  • In early 2008, Baird was honored as the "Middle Market Investment Bank of the Year" by Buyouts magazine for 2007 performance. Baird also won two "Manufacturing Deal of the Year" awards in 2007 from The M&A Advisor in the United States. In Europe, Acquisitions Monthly named Baird "Manufacturing Sector Adviser of the Year." 
  • The Bond Buyer awarded us top honors for the "Midwest Regional Deal of the Year."
  •  Baird was recognized in Barron's and Research magazine as having some of the industry's top financial advisors.
  • In early 2008, Baird was recognized as one of the FORTUNE 100 Best Companies to Work For®. Being honored for the fifth consecutive year is a source of great pride at Baird because of what it says about the way we do business.
Being a great place to work is an important part of our culture and success. It helps us attract and retain some of the most talented professionals in the industry. We had an outstanding year in that regard, hiring dozens of senior people who are contributing to the depth and breadth of Baird’s capabilities. We also opened offices across the United States, from San Francisco to Stamford, to expand Baird’s coverage and best serve our clients’ needs.

These new capabilities added to very strong operating performance across all of Baird’s businesses:
  • Total assets that we manage and oversee rose 9% to $77 billion on strong asset growth at Baird Advisors and Private Wealth Management.
  • Our Equity Capital Markets group achieved a fifth consecutive year of record revenues and set new high-water marks in both M&A advisory and underwriting activity.
  • Baird’s private equity partnerships and affiliated fund enjoyed a stellar year for raising capital, making new investments and successfully exiting portfolio companies.
  • Our Public Finance team had a record year for transaction volume, and our fixed income sales desks traded $85 billion in face value of bonds, a 35% increase.

 
We believe our position as an independent firm, owned by our associates, is one of Baird’s greatest strengths. Our independence creates entrepreneurial energy, focused on serving clients, and enables us to take a longer-term perspective in investing in people and technology to continue enhancing our expertise and capabilities. Another investment we are making – which is a top priority – is to build the diversity of the Baird team. Our client base is becoming more diverse, and we are committed to finding top talent with diverse backgrounds and perspectives to serve their needs. To do so, we are continuing to support a variety of initiatives to attract and nurture a more diverse and inclusive work force, including our enhanced internship program and business school scholarships focused on encouraging diversity in our industry.

We proved in 2007 that the impact of challenging markets can be minimized by disciplined research, a clear strategic focus on our core businesses and constant attention to strengthening our partnerships with clients. While no one has certainty about the future, Baird is well positioned to weather virtually any market conditions we might encounter in the coming years. We have five businesses that are significantly stronger than they were in the last economic downturn, and a much higher recurring revenue base. Moreover, we have a strong balance sheet that, along with our independence, enables us to use our resources to grow in ways that best serve our clients. We have never been more optimistic about Baird’s future in the financial services industry, nor more convinced that we are on the right path toward our vision of becoming the best middle-market financial services firm in the world.




Paul E. Purcell
Chairman, President & Chief Executive Officer

 
Related Information
 

2007 Annual Report
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