November 6, 2009 8:31 AM | 11 min read | Make a Comment
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NEW YORK, Nov. 6, 2009 (GLOBE NEWSWIRE) -- NYFIX, Inc. NYFX ("NYFIX" or the "Company"), a trusted provider of innovative solutions that optimize trading efficiency, today reported results for third quarter and year-to-date 2009.
Revenues were $25.9 million for third quarter 2009, compared to $29.2 million in third quarter 2008. Selling, general and administrative expenses declined 27% during third quarter 2009, compared to third quarter 2008. EBITDA was $(2.9) million for third quarter 2009 reflecting the impact of strategic initiative costs of $(3.3) million and positive EBITDA from other operations of $0.4 million. EBITDA was $(0.8) million for third quarter 2008, reflecting the impact of integration costs of $(0.1) million, $(0.2) million in costs related to historical stock options matters and $(0.5) million of EBITDA from other operations. On a GAAP basis, the Company's net loss was $(6.1) million for third quarter 2009, compared to $(3.5) million for third quarter 2008.
Other developments that occurred during the third quarter 2009 included the following:
As previously announced, in August 2009 NYFIX entered into a definitive agreement to be acquired by NYSE Technologies, a wholly-owned subsidiary of NYSE Euronext, in an all cash deal for $144 million, or $1.675 per common share without interest. The transaction was approved by the Company's stockholders on November 3, 2009, and is expected to close during the fourth quarter, following the satisfaction of certain remaining customary conditions.
Billable order routing channels on the NYFIX Marketplace increased by 204, surpassing the significant milestone of 10,000 channels. At September 30, 2009, there were 10,114 billable order routing channels in service, up 6% from September 30, 2008.
Three Month Results
Financial highlights for third quarter 2009 include:
* EBITDA of $(2.9) million compared to $(0.8) million for
third quarter 2008;
* an 11% decrease in total revenues to $25.9 million compared
to $29.2 million for third quarter 2008;
* a 5% increase in FIX Division net revenues to $18.2 million
compared to $17.4 million for third quarter 2008;
* a 36% decrease in Transaction Services Division net revenues
to $7.1 million, including revenues of $0.9 million from
Euro Millennium, compared to $11.0 million for third quarter
2008;
* a 25% decrease in OMS Division net revenues to $0.6 million
compared to $0.8 million for third quarter 2008; and
* a net loss of $(6.1) million, or $(0.16) per share, compared
to a net loss for third quarter 2008 of $(3.5) million, or
$(0.09) per share, which exclude the impact of accumulated
preferred dividends of $(0.4) million, or $(0.01) per share,
and $(0.8) million, or $(0.02) per share, for third quarter
2009 and third quarter 2008, respectively.
Other significant items that affected the net loss amounts disclosed above include the following:
Three Months Ended September 30,
------------------------------------------
2009 2008
(in millions, except ------------------ -------------------
per share amounts) Amount per share Amount per share
------------------ -------------------
Strategic initiative
costs $(3.3) $(0.08) $ -- $ --
Euro Millennium loss (2.2) (0.06) (2.0) (0.05)
Stock-based
compensation (1.6) (0.04) (1.6) (0.04)
Integration charges -- -- (0.1) (0.00)
SEC investigation,
restatement and
related expenses -- -- (0.2) (0.00)
The definitive agreement with NYSE Technologies referred to above was the result of a process that was launched by the Company in December 2008. In connection with this process, NYFIX incurred advisory fees, legal fees and accounting and tax fees, as well as meeting fees for a special committee of the NYFIX Board. These costs do not include any amounts that are contingent on the consummation of the proposed transaction.
Since second quarter 2007, NYFIX has incurred costs for Euro Millennium. Launched in March 2008 for matching U.K.-listed equities, Euro Millennium later expanded its scope to match cash equities in other European markets including Belgium, France, Germany and the Netherlands. The $(2.2) million loss for third quarter 2009 is net of the $0.9 million of revenue reported above within the totals for the Transaction Services Division.
The Company's equity incentive program was designed to award large upfront grants rather than smaller annual grants to maximize the incentive and retention impacts of the grants and to better align the interests of employees with stockholders.
Nine Month Results
Financial highlights for year-to-date 2009 include:
* EBITDA of $(3.1) million compared to $(6.1) million for
year-to-date 2008;
* a 12% decrease in total revenues to $78.4 million compared
to $89.2 million for year-to-date 2008;
* a 7% increase in FIX Division net revenues to $53.5 million
compared to $50.1 million for year-to-date 2008;
* a 36% decrease in Transaction Services Division net revenues
to $22.7 million, including revenue of $2.8 million from Euro
Millennium, compared to $35.2 million for year-to-date 2008;
* a 44% decrease in OMS Division net revenues to $2.2 million
compared to $3.9 million for year-to-date 2008; and
* a net loss of $(12.1) million, or $(0.31) per share, compared
to a net loss for year-to-date 2008 of $(13.7) million, or
$(0.36) per share, which exclude the impact of accumulated
preferred dividends of $(0.9) million, or $(0.02) per share,
and $(2.8) million, or $(0.08) per share, for year-to-date
2009 and year-to-date 2008, respectively.
Other significant items that affected the net loss amounts disclosed above include the following:
Nine Months Ended September 30,
--------------------------------------------
2009 2008
(in millions, except ------------------- ---------------------
per share amounts) Amount per share Amount per share
------------------- ---------------------
Euro Millennium loss $ (6.0) $ (0.15) $ (6.7) $ (0.18)
Stock-based
compensation (4.5) (0.12) (6.4) (0.17)
Strategic initiative
costs (3.8) (0.10) -- --
Restructuring charge
(net of reversal) (0.7) (0.02) (0.2) (0.01)
SEC investigation,
restatement and
related expenses 0.6 0.02 (0.4) (0.01)
Workforce reduction
termination costs -- -- (0.9) (0.02)
Loss on Fusion OMS
wind-down -- -- (0.8) (0.02)
Integration charges -- -- (0.7) (0.02)
Transitional
employment costs -- -- (0.3) (0.01)
Transitional
rebuilding and
remediation costs -- -- (0.2) (0.01)
Non-GAAP Disclosure
The disclosure above of EBITDA excludes the impact of interest, taxes, depreciation and amortization on the Company's reported GAAP results. EBITDA was included in this release because management considers it an important supplemental measure used by securities analysts, investors and other interested parties in the evaluation of the Company. EBITDA allows for meaningful company-to-company performance comparisons as companies have different capital structures and tax rates. EBITDA is also a useful tool in evaluating the Company's ability to meet future debt service, capital expenditure and working capital requirements. EBITDA does not replace and is not superior to the presentation of GAAP results. A schedule at the end of this release reconciles GAAP net loss to EBITDA.
About NYFIX, Inc.
A pioneer in electronic trading solutions, NYFIX continues to transform trading through innovation. The NYFIX Marketplace(TM) is a global community of trading counterparties utilizing innovative services that optimize the business of trading. NYFIX Millennium(r) provides the NYFIX Marketplace(TM) with new methods of accessing liquidity. NYFIX also provides value-added informational and analytical services and powerful tools for measuring execution quality. A trusted business partner to the buy-side and sell-side alike, NYFIX enables ultra low touch, low impact market access and end-to-end transaction processing. For more information, please visit www.nyfix.com.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
This press release may contain forward-looking statements, including forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements concerning NYFIX's plans, objectives, expectations and intentions, statements concerning the proposed transaction between NYSE and NYFIX and other statements that are not historical or current facts. Forward-looking statements are based on NYFIX's current expectations (except where otherwise noted) and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements. Factors that could cause NYFIX's results or future events to differ materially from current expectations include, but are not limited to: the expected settlement of litigation relating to the pending transaction with NYSE Euronext ; the ability to consummate the pending transaction; the impact of the pending transaction on customer and employee relations; operation disruptions as a result of the transaction; the impact of current market conditions on the financial stability of our clients including consolidations and closures; the condition of the securities markets and the general economy; the impact of regulation and regulatory actions; the effects of current, pending and future legislation; actions and initiatives by both current and future competitors; and other factors detailed in the proxy statement under the heading "Special Note Regarding Forward-Looking Statements" and in NYFIX's Annual Report on Form 10-K for the fiscal year ended December 31, 2008 and other periodic reports filed with the U.S. Securities and Exchange Commission. In addition, these statements are based on a number of assumptions that are subject to change. The inclusion of forward-looking statements in this press release should not be regarded as a representation by NYFIX that the forward-looking statements will prove to be correct. In addition, (except where otherwise noted) the forward-looking statements included in this press release represent NYFIX's views as of November 6, 2009. NYFIX anticipates that subsequent events and developments will cause NYFIX's views to change. However, while NYFIX may elect to update these forward-looking statements at some point in the future, NYFIX specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing NYFIX's views as of any date subsequent to November 6, 2009 or such other date as specified with respect to a particular forward-looking statement.
NYFIX, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------------------------
2009 2008 2009 2008
-------- -------- --------- ---------
Revenue:
Subscription and
maintenance $ 18,725 $ 17,747 $ 54,893 $ 52,772
Transaction 6,903 10,842 22,108 34,941
Product sales and
services 280 586 1,382 1,491
-------- -------- --------- ---------
Total revenue 25,908 29,175 78,383 89,204
-------- -------- --------- ---------
Cost of revenue:
Subscription and
maintenance 6,916 7,985 21,389 23,457
Transaction 7,739 5,595 21,819 17,649
Product sales and
services 22 86 79 254
-------- -------- --------- ---------
Total cost of
revenue 14,677 13,666 43,287 41,360
-------- -------- --------- ---------
Gross profit 11,231 15,509 35,096 47,844
Operating expense:
Selling, general
and administrative 13,402 18,251 41,659 58,871
Strategic
initiative costs 3,317 -- 3,754 --
Depreciation and
amortization 391 471 1,188 1,412
Restructuring
charge -- -- 748 216
SEC investigation,
restatement and
related expenses -- 170 (634) 438
Integration charges -- 139 -- 735
-------- -------- --------- ---------
Loss from operations (5,879) (3,522) (11,619) (13,828)
Interest expense (197) (123) (623) (489)
Investment income 15 251 143 1,027
-------- -------- --------- ---------
Loss before income
tax provision (6,061) (3,394) (12,099) (13,290)
Income tax provision -- 128 -- 383
-------- -------- --------- ---------
Net loss (6,061) (3,522) (12,099) (13,673)
Accumulated
preferred dividends (433) (827) (890) (2,796)
-------- -------- --------- ---------
Loss applicable to
common stockholders $ (6,494) $ (4,349) $ (12,989) $ (16,469)
======== ======== ========= =========
Basic and diluted
loss per common
share $ (0.17) $ (0.11) $ (0.33) $ (0.44)
======== ======== ========= =========
Basic and diluted
weighted average
common shares
outstanding 39,317 38,044 38,891 37,611
======== ======== ========= =========
NYFIX, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
September 30, December 31,
2009 2008
------------- ------------
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $ 50,204 $ 55,966
Accounts receivable 16,962 14,120
Clearing assets 517,022 400,638
Prepaid expenses and other current
assets 3,070 3,702
--------- ---------
Total current assets 587,258 474,426
Property and equipment 17,506 20,508
Capitalized software costs 9,695 8,701
Goodwill 47,325 47,170
Acquired intangible assets 7,148 7,422
Other assets 451 564
--------- ---------
Total assets $ 669,383 $ 558,791
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 21,063 $ 21,656
Clearing liabilities 515,671 399,927
Current portion of capital lease
obligations 1,267 1,358
Convertible notes 9,993 9,971
Current portion of other long-term
liabilities 1,210 1,014
Deferred revenue 7,973 5,271
--------- ---------
Total current liabilities 557,177 439,197
Long-term portion of capital lease
obligations 940 1,469
Other long-term liabilities 870 1,021
--------- ---------
Total liabilities 558,987 441,687
--------- ---------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $1.00 par value;
5,000,000 shares authorized:
Series A, none issued -- --
Series B Voting Convertible,
1,500,000 shares issued and
outstanding; liquidation
preference of $76,313 at
September 30, 2009 62,092 62,092
Series C Non-Voting Convertible,
none issued -- --
Common stock, $0.001 par value;
100,000,000 shares authorized;
40,249,865 and 39,510,917 shares
issued, respectively 275,868 271,319
Accumulated deficit (212,111) (200,012)
Treasury stock, 923,108 shares, at
cost (12,600) (12,600)
Accumulated other comprehensive loss (2,853) (3,695)
--------- ---------
Total stockholders' equity 110,396 117,104
--------- ---------
Total liabilities and stockholders'
equity $ 669,383 $ 558,791
========= =========
NYFIX, Inc. and Subsidiaries
Reconciliation of Net Loss to EBITDA (Unaudited)
(in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- ----------------------
2009 2008 2009 2008
-------- -------- --------- --------
Net loss $ (6,061) $ (3,522) $ (12,099) $ (13,673)
Deduct:
Investment income (15) (251) (143) (1,027)
Add:
Income tax provision -- 128 -- 383
Interest expense 197 123 623 489
Depreciation and
amortization 2,963 2,762 8,497 7,691
-------- -------- -------- --------
EBITDA $ (2,916) $ (760) $ (3,122) $ (6,137)
======== ======== ======== ========
CONTACT: ICR
Investors:
Don Duffy
1-203-682-8200
NYFIX, Inc.
Media:
Eric Soderberg
1-646-525-3234
Web site: http://www.nyfix.com
