NEW YORK, May 4, 2016 /PRNewswire/ --
First Quarter 2016 Highlights:
- Revenues of $12.8 million for the quarter versus $11.5 million for prior year quarter
- Operating profit margin of 31% for the quarter, up from 29% for the prior year quarter
- Announces second quarter 2016 dividend of $0.14 per share
- 11 graduates to a national securities exchange during the first quarter
OTC Markets Group Inc. (OTCQX: OTCM), operator of the OTCQX® Best Market, the OTCQB® Venture Market and the Pink® Open Market for 10,000 U.S. and global securities, today announced its financial results for the first quarter 2016.
"During the first quarter, we continued to invest in our people and systems and to deliver on our mission to create better informed and more efficient markets," said R. Cromwell Coulson, President and Chief Executive Officer. Mr. Coulson continued, "We believe that our dealer based markets create a superior investor information and trading experience via online and institutional brokers. Our network model of competing broker-dealers and our data-driven listing standards provide the venues of choice for the innovative companies traded today on our OTCQX Best Market and OTCQB Venture Market. These markets are tailor-made for the next generation of entrepreneurial public companies that will be financed by online securities offerings under Regulation A+ and crowdfunding."
"We continue to deliver recurring revenue across our business lines as well as strong operating cash flows. This will allow us to continue to invest in our infrastructure, in products that deliver elegant, reliable and cost-effective market technology, and in data solutions that create unique value for our diverse subscriber base," said Bea Ordonez, Chief Financial Officer.
First Quarter 2016 compared to First Quarter 2015
Quarter Ended March 31, |
||||||||
(in thousands, except shares and per share data) |
2016 |
2015 |
% change |
$ change |
||||
OTC Link ATS |
$ 2,754 |
$ 3,044 |
(10%) |
$ (290) |
||||
Market data licensing |
5,325 |
5,233 |
2% |
92 |
||||
Corporate services |
4,672 |
3,247 |
44% |
1,425 |
||||
Gross revenues |
12,751 |
11,524 |
11% |
1,227 |
||||
Net revenues |
12,158 |
10,924 |
11% |
1,234 |
||||
Operating expenses |
8,361 |
7,769 |
8% |
592 |
||||
Income from operations |
3,797 |
3,155 |
20% |
642 |
||||
Operating profit margin |
31% |
29% |
||||||
Net income |
$ 2,315 |
$ 1,856 |
25% |
$ 459 |
||||
Diluted earnings per share |
$ 0.20 |
$ 0.16 |
25% |
|||||
Adjusted diluted earnings per share |
$ 0.40 |
$ 0.34 |
18% |
|||||
Weighted-average shares outstanding, diluted |
11,439,786 |
11,420,840 |
- |
Highlights
- Gross revenues increased $1.2 million, or 11%, to $12.8 million.
- $1.4 million increase in Corporate Services revenues, largely driven by year-over-year growth in OTCQB verified companies.
- Decrease in revenues from OTC Link® ATS of $0.3 million, or 10%, to $2.8 million, largely a result of a decrease in the number of OTC Dealer® users at our broker-dealer subscribers, reduced quote and trade message volumes and the elimination of fees for the quoting of OTCQX and OTCQB companies.
- $0.1 million increase in Market Data Licensing revenues, up 2% over prior year quarter.
- Operating expenses increased $0.6 million, or 8%, to $8.4 million, primarily due to increases in compensation costs and information technology costs.
- Income from operations increased $0.6 million, or 20%, to $3.8 million.
- Net income increased $0.5 million, or 25%, to $2.3 million, primarily due to the increase in operating income, as well as a decrease in the company's effective tax rate for the quarter from 41% to 39%.
- Adjusted EBITDA, which excludes non-cash stock-based compensation expense, increased $0.7 million, or 18%, to $4.7 million, or $0.40 per adjusted diluted share, as compared to $4.0 million, or $0.34 per adjusted diluted share, during the same prior year period.
Dividend Declaration – Quarterly Cash Dividend
OTC Markets Group announced today that its Board of Directors authorized a quarterly cash dividend of $0.14 on its Class A common stock. The quarterly cash dividend is payable on June 23, 2016, to stockholders of record on June 9, 2016. The ex-dividend date is June 7, 2016.
Non-GAAP Financial Measures
In addition to disclosing results prepared in accordance with GAAP, the Company also discloses certain non-GAAP results of operations, including adjusted EBITDA and adjusted diluted earnings per share that either exclude or include amounts that are described in the reconciliation table of GAAP to non-GAAP information provided at the end of this release. Non-GAAP financial measures do not replace and are not superior to the presentation of GAAP financial results, but are provided to improve overall understanding of the Company's current financial performance. Management believes that this non-GAAP information is useful to both management and investors regarding certain additional financial and business trends related to the operating results. Management uses this non-GAAP information, along with GAAP information, in evaluating its historical operating performance.
First Quarter 2016 Conference Call
The Company will host a conference call on Thursday, May 5, 2016, at 8:00 a.m. Eastern Time, during which management will discuss the financial results in further detail. The conference call and replay of the conference call may be accessed as follows:
Dial-in numbers: 1-888-438-5453 (Domestic); 1-719-325-2428 (International); Conference ID: 146810
Replay Dial-in Numbers (Available until May 19, 2016): 1-888-203-1112 (Domestic); 1-719-457-0820 (International); Replay Pin Number: 146810
The earnings release and transcript to the earnings call will also be available in the Investor Relations section of the corporate website at www.otcmarkets.com/investor-relations/overview.
OTC Markets Group's Quarterly Report for the period ended March 31, 2016 is available publicly at www.otcmarkets.com.
About OTC Markets Group Inc.
OTC Markets Group Inc. (OTCQX: OTCM) operates the OTCQX® Best Market, the OTCQB® Venture Market and the Pink® Open Market for 10,000 U.S. and global securities. Through OTC Link® ATS, we connect a diverse network of broker-dealers that provide liquidity and execution services. We enable investors to easily trade through the broker of their choice and empower companies to improve the quality of information available for investors.
To learn more about how we create better informed and more efficient financial markets, visit www.otcmarkets.com.
OTC Link ATS is operated by OTC Link LLC, member FINRA/SIPC and SEC regulated ATS.
Subscribe to the OTC Markets RSS Feed
Investor Contact:
Bea Ordonez
Chief Financial Officer
Phone: 212-220-2215
Email: [email protected]
OTC MARKETS GROUP INC. |
|||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
|||
(in thousands, except share and per share information) |
|||
(Unaudited) |
|||
Three Months Ended March 31, |
|||
2016 |
2015 |
||
Gross revenues |
$ 12,751 |
$ 11,524 |
|
Redistribution fees and rebates |
(593) |
(600) |
|
Net revenues |
12,158 |
10,924 |
|
Operating expenses |
|||
Compensation and benefits |
5,237 |
4,958 |
|
IT Infrastructure and information services |
1,340 |
1,157 |
|
Professional and consulting fees |
499 |
389 |
|
Marketing and advertising |
280 |
266 |
|
Occupancy costs |
405 |
361 |
|
Depreciation and amortization |
417 |
406 |
|
General, administrative and other |
183 |
232 |
|
Total operating expenses |
8,361 |
7,769 |
|
Income from operations |
3,797 |
3,155 |
|
Other (expense) income |
|||
Other (expense) income |
(8) |
16 |
|
Income before provision for income taxes |
3,789 |
3,171 |
|
Provision for income taxes |
1,474 |
1,315 |
|
Net income |
$ 2,315 |
$ 1,856 |
|
Net income per share |
|||
Basic |
$ 0.20 |
$ 0.16 |
|
Diluted |
$ 0.20 |
$ 0.16 |
|
Basic weighted average shares outstanding |
11,097,753 |
10,987,948 |
|
Diluted weighted average shares outstanding |
11,439,786 |
11,420,840 |
|
Non-GAAP Reconciliation |
|||
Three Months Ended March 31, |
|||
2016 |
2015 |
||
Net Income |
$ 2,315 |
$ 1,856 |
|
Excluding: |
|||
Provision for income taxes |
1,474 |
1,315 |
|
Depreciation and amortization |
417 |
406 |
|
Stock-based compensation expense |
471 |
429 |
|
Adjusted EBITDA |
$ 4,677 |
$ 4,006 |
|
Adjusted diluted earnings per share |
$ 0.40 |
$ 0.34 |
Note: We use non-GAAP financial measures of operating performance. Non-GAAP measures do not replace and are not superior to the presentation of our GAAP financial results, but are provided to improve overall understanding of the Company's current financial performance. |
OTC MARKETS GROUP INC. |
|||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||
(in thousands, except share information) |
|||
(Unaudited) |
|||
March 31, |
December 31, |
||
2016 |
2015 |
||
Assets |
|||
Current assets |
|||
Cash |
$ 22,645 |
$ 23,925 |
|
Accounts receivable, net of allowance for doubtful accounts of $144 and $147 |
6,299 |
6,082 |
|
Prepaid expenses and other current assets |
1,990 |
1,520 |
|
Prepaid income taxes |
73 |
22 |
|
Deferred tax assets |
187 |
187 |
|
Total current assets |
31,093 |
31,736 |
|
Property and equipment, net |
3,240 |
3,507 |
|
Non-current deferred tax assets, net |
581 |
470 |
|
Goodwill |
251 |
251 |
|
Intangible assets, net |
40 |
40 |
|
Security deposits |
210 |
210 |
|
Total Assets |
$ 35,515 |
$ 36,214 |
|
Liabilities and stockholders' equity |
|||
Current liabilities |
|||
Accounts payable |
$ 512 |
$ 616 |
|
Accrued expenses and other current liabilities |
1,841 |
4,355 |
|
Income taxes payable |
838 |
92 |
|
Deferred revenue |
12,942 |
12,737 |
|
Total current liabilities |
16,133 |
17,800 |
|
Deferred rent |
240 |
139 |
|
Income tax reserve |
751 |
728 |
|
Total Liabilities |
17,124 |
18,667 |
|
Commitments and contingencies |
|||
Stockholders' equity |
|||
Common stock - par value $0.01 per share |
|||
Class A - 14,000,000 authorized, 11,554,730 issued, 11,262,234 outstanding at |
|||
March 31, 2016; 11,438,928 issued, 11,192,885 outstanding at December 31, 2015 |
116 |
114 |
|
Class C - 130,838 shares authorized, issued and outstanding at March 31, 2016 |
|||
and December 31, 2015 |
1 |
1 |
|
Additional paid-in capital |
11,638 |
10,786 |
|
Retained earnings |
9,654 |
8,916 |
|
Treasury stock - 292,496 shares at March 31, 2016 and 246,043 shares at December 31, 2015 |
(3,018) |
(2,270) |
|
Total Stockholders' Equity |
18,391 |
17,547 |
|
Total Liabilities and Stockholders' Equity |
$ 35,515 |
$ 36,214 |
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SOURCE OTC Markets Group Inc.
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