MarketAxess Reports Third Quarter 2012 Revenues of $48.3 Million, Pre-Tax Income of $21.2 Million and Record Diluted EPS of $0.36
Third Quarter Financial Highlights*
-
Revenues of
$48.3 million , up 3.6% -
Expenses of
$27.0 million , up 11.5% -
Record diluted EPS of
$0.36 , up from$0.34 - Record estimated U.S. high grade market share of 12.5%, up from 11.6%
*All comparisons versus third quarter 2011.
“We are pleased with our solid market share gains in U.S. high-grade
this quarter and the continued strong growth in high-yield and emerging
markets trading volume. U.S. high-grade TRACE volume also rebounded
significantly in the past two months, following softer volumes in
August,” said
Third Quarter Results
Total revenues for the third quarter of 2012 increased 3.6% to
Commission revenue for the third quarter of 2012 totaled
All other revenue, which consists of technology products and services,
information and user access fees, investment income and other revenue,
was
Total expenses for the third quarter of 2012 increased 11.5% to
The effective tax rate for the third quarter of 2012 was 36.4%, compared to 39.7% for the third quarter of 2011. The decline in the effective tax rate was due principally to a refinement in certain state tax apportionment methodology resulting in a decrease in the 2012 projected tax rate.
Employee headcount as of
Dividend
The Company’s board of directors declared a quarterly cash dividend of
Balance Sheet Data
As of
Guidance for 2012
The Company expects that its full year 2012 expenses and capital
spending will be at the high end of the guidance ranges of
Non-GAAP Financial Measure
EBITDA is a non-GAAP financial measure. The Company believes that this non-GAAP financial measure, when taken into consideration with the corresponding GAAP financial measure, is important in understanding the Company's operating results. See the attached schedule for a full reconciliation of GAAP net income to EBITDA.
Webcast and Conference Call Information
About
Cautionary Note Regarding Forward-Looking Statements
This press release may contain forward-looking statements, including
statements about the outlook and prospects for Company and industry
growth, as well as statements about the Company’s future financial and
operating performance. These and other statements that relate to future
results and events are based on MarketAxess’ current expectations.
Actual results in future periods may differ materially from those
currently expected or desired because of a number of risks and
uncertainties, including: the level and intensity of competition in the
fixed-income electronic trading industry and the pricing pressures that
may result; the variability of our growth rate; the rapidly evolving
nature of the electronic financial services industry; the level of
trading volume transacted on the
MarketAxess Holdings Inc. Consolidated Statements of Operations |
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Three Months Ended | Nine Months Ended | ||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Revenues | |||||||||||||||||||||
Commissions | $ | 42,379 | $ | 39,822 | $ | 129,971 | $ | 116,683 | |||||||||||||
Technology products and services | 2,979 | 3,779 | 9,107 | 10,871 | |||||||||||||||||
Information and user access fees | 1,896 | 1,831 | 5,557 | 5,239 | |||||||||||||||||
Investment income | 251 | 303 | 822 | 912 | |||||||||||||||||
Other | 752 | 829 | 2,360 | 2,259 | |||||||||||||||||
Total revenues | 48,257 | 46,564 | 147,817 | 135,964 | |||||||||||||||||
Expenses | |||||||||||||||||||||
Employee compensation and benefits | 14,636 | 13,707 | 45,782 | 45,079 | |||||||||||||||||
Depreciation and amortization | 2,081 | 1,799 | 5,896 | 4,988 | |||||||||||||||||
Technology and communications | 3,262 | 2,772 | 9,232 | 7,996 | |||||||||||||||||
Professional and consulting fees | 3,202 | 2,247 | 9,063 | 7,784 | |||||||||||||||||
Occupancy | 732 | 721 | 2,248 | 2,195 | |||||||||||||||||
Marketing and advertising | 1,067 | 1,280 | 4,246 | 3,502 | |||||||||||||||||
General and administrative | 2,068 | 1,742 | 6,193 | 4,553 | |||||||||||||||||
Total expenses | 27,048 | 24,268 | 82,660 | 76,097 | |||||||||||||||||
Income before taxes | 21,209 | 22,296 | 65,157 | 59,867 | |||||||||||||||||
Provision for income taxes | 7,727 | 8,852 | 25,553 | 23,706 | |||||||||||||||||
Net income | $ | 13,482 | $ | 13,444 | $ | 39,604 | $ | 36,161 | |||||||||||||
Per Share Data: | |||||||||||||||||||||
Earnings per share: | |||||||||||||||||||||
Basic | $ | 0.37 | $ | 0.36 | $ | 1.08 | $ | 0.98 | |||||||||||||
Diluted | $ | 0.36 | $ | 0.34 | $ | 1.05 | $ | 0.91 | |||||||||||||
Cash dividends declared per common share | $ | 0.11 | $ | 0.09 | $ | 0.33 | $ | 0.27 | |||||||||||||
Weighted-average common shares: | |||||||||||||||||||||
Basic | 36,500 | 37,126 | 36,521 | 36,798 | |||||||||||||||||
Diluted | 37,541 | 39,828 | 37,892 | 39,539 | |||||||||||||||||
MarketAxess Holdings Inc. Consolidated Condensed Balance Sheet Data |
|||||||||||
September 30, 2012 | December 31, 2011 | ||||||||||
(In thousands) | |||||||||||
(unaudited) | |||||||||||
Assets | |||||||||||
Cash and cash equivalents | $ | 150,101 | $ | 169,620 | |||||||
Securities available-for-sale | 54,181 | 78,110 | |||||||||
Accounts receivable, net | 33,414 | 36,170 | |||||||||
All other assets | 67,232 | 65,558 | |||||||||
Total assets | $ | 304,928 | $ | 349,458 | |||||||
Liabilities and Stockholders' Equity | |||||||||||
Total liabilities | $ | 32,994 | $ | 37,019 | |||||||
Total stockholders' equity | 271,934 | 312,439 | |||||||||
Total liabilities and stockholders' equity | $ | 304,928 | $ | 349,458 | |||||||
MarketAxess Holdings Inc. Reconciliation of Non-GAAP Financial Measures |
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Three Months Ended | Nine Months Ended | ||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Net income | $ | 13,482 | $ | 13,444 | $ | 39,604 | $ | 36,161 | |||||||||||||
Add back: | |||||||||||||||||||||
Interest expense | 55 | 14 | 128 | 46 | |||||||||||||||||
Provision for income taxes | 7,727 | 8,852 | 25,553 | 23,706 | |||||||||||||||||
Depreciation and amortization | 2,081 | 1,799 | 5,896 | 4,988 | |||||||||||||||||
Earnings before interest, taxes, depreciation | |||||||||||||||||||||
and amortization (EBITDA) | $ | 23,345 | $ | 24,109 | $ | 71,181 | $ | 64,901 | |||||||||||||
MarketAxess Holdings Inc. Volume and Fee Per Million Statistics |
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Three Months Ended | Nine Months Ended | ||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
Total Trading Volume | |||||||||||||||||||||
($ in millions) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
U.S. high-grade - multi dealer 1 | |||||||||||||||||||||
fixed-rate | $ | 83,193 | $ | 79,233 | $ | 265,876 | $ | 238,577 | |||||||||||||
floating-rate | 2,795 | 2,761 | 9,104 | 9,524 | |||||||||||||||||
Eurobond | 6,016 | 7,580 | 26,543 | 28,891 | |||||||||||||||||
Other 1,2 | 45,748 | 42,092 | 138,995 | 122,814 | |||||||||||||||||
Total | $ | 137,752 | $ | 131,666 | $ | 440,518 | $ | 399,806 | |||||||||||||
Average Daily Volume | |||||||||||||||||||||
($ in millions) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
U.S. high-grade 1 | $ | 1,365 | $ | 1,281 | $ | 1,463 | $ | 1,313 | |||||||||||||
Eurobond | 94 | 117 | 141 | 154 | |||||||||||||||||
Other 1,2 | 726 | 658 | 739 | 650 | |||||||||||||||||
Total | $ | 2,185 | $ | 2,056 | $ | 2,344 | $ | 2,116 | |||||||||||||
Number of U.S. Trading Days 3 | 63 | 64 | 188 | 189 | |||||||||||||||||
Number of U.K. Trading Days 4 | 64 | 65 | 188 | 188 | |||||||||||||||||
Average Variable Transaction Fee Per Millon | |||||||||||||||||||||
U.S. high-grade - multi dealer | |||||||||||||||||||||
fixed-rate | $ | 209 | $ | 195 | $ | 203 | $ | 188 | |||||||||||||
floating-rate | 37 | 24 | 30 | 21 | |||||||||||||||||
Total U.S. high-grade | 203 | 189 | 198 | 182 | |||||||||||||||||
Eurobond | 79 | 108 | 71 | 101 | |||||||||||||||||
Other | 216 | 175 | 208 | 177 | |||||||||||||||||
Total | $ | 202 | $ | 180 | $ | 193 | $ | 174 | |||||||||||||
1 Consistent with FINRA TRACE reporting standards, both sides of trades are included in the Company's |
reported volumes when the Company executes trades on a riskless principal basis between two counterparties. |
2 Effective January 2012, the Company no longer reports credit default swaps trading volumes. |
Credit default swap volumes previously reported in "Other" trading volume have not been removed. |
3 The number of U.S. trading days is based on the SIFMA holiday recommendation calendar. |
4 The number of U.K. trading days is based on the U.K. Bank holiday schedule. |
Source:
Media and Investor Relations:
MarketAxess Holdings Inc.
Tony
DeLise, +1-212-813-6017
or
Florencia Panizza, +1-212-813-6029
or
William
McBride & Associates
William McBride, +1-917-239-6726