OTC Markets Group Announces Fourth Quarter and Fiscal Year 2015 Financial Results

02 Mar, 2016, 17:00 ET from OTC Markets Group Inc.

NEW YORK, March 2, 2016 /PRNewswire/ -- 

Fourth Quarter and Fiscal Year 2015 Highlights:

  • Record revenues of $13.1 million for the quarter and $49.9 million for the year
  • Operating profit margin of 40% for the quarter and 35% for the full year (38% and 32%, respectively, for 2014)
  • Fourth quarter dividend of $0.14 per share and special dividend of $0.60 per share, for a total for 2015 of $1.08 per share
  • Announced first quarter 2016 dividend of $0.14 per share
  • 60 graduates to a national securities exchange during 2015

OTC Markets Group Inc. (OTCQX: OTCM), operator of Open, Transparent and Connected financial markets for 10,000 U.S. and global securities, today announced its financial results for the fourth quarter and fiscal year 2015.

"Our record revenues in 2015 were the result of our focus on enhancing our innovative OTCQX Best and OTCQB Venture markets for public companies," said R. Cromwell Coulson, President and Chief Executive Officer. "Our strong results position us to continue to invest in our people and systems, focus on reliability and regulatory compliance, and deliver on our mission to create better informed and more efficient markets that directly connect broker-dealers and meet the needs of the next generation of U.S. and global companies and investors."

Mr. Coulson continued, "The future of financial markets is online, data-driven and social, and our broker-dealer network based markets are tailor made to become the markets of choice for secondary trading for innovative and entrepreneurial crowdfunded offerings.  We were thrilled to announce on February 19 of this year that Elio Motors, the first company to successfully complete an IPO under Regulation A+, joined our OTCQX Best Market."

"Strong overall revenue performance during the fourth quarter and for the full year was primarily due to the growth of the OTCQB Venture Market, which drove significant increases in Corporate Services revenue," said Bea Ordonez, Chief Financial Officer. "We are pleased that we were able to continue to deliver substantial value to shareholders in 2015."

Fourth Quarter 2015 compared to Fourth Quarter 2014



Quarter Ended December 31,





(in thousands, except shares and per share data)


2015


2014


% change


$ change

OTC Link ATS


$               2,882


$               3,199


(10%)


$           (317)

Market data licensing


5,121


5,105


-


16

Corporate services


5,052


2,903


74%


2,149

Gross revenues


13,055


11,207


16%


1,848

Net revenues


12,478


10,596


18%


1,882

Operating expenses


7,447


6,607


13%


840

Income from operations


5,031


3,989


26%


1,042

Operating profit margin


40%


38%





Net income 


$               2,926


$               2,669


10%


$             257










Diluted earnings per share


$                 0.25


$                 0.23


9%



Adjusted diluted earnings per share


$                 0.50


$                 0.41


22%



Weighted-average shares outstanding, diluted


11,292,049


11,225,568


1%












 

Highlights

  • Gross revenues increased $1.8 million, or 16%, to $13.1 million.
  • $2.1 million increase in Corporate Services revenues, largely driven by growth in OTCQB verified companies.
  • Decrease in revenues from OTC Link ATS of $0.3 million, or 10%, to $2.9 million, largely a result of the elimination of fees for the quoting of OTCQX and OTCQB companies.
  • Operating expenses increased $0.8 million, or 13%, to $7.4 million, primarily related to increases in compensation and benefits costs.
  • Income from operations increased $1.0 million, or 26%, to $5.0 million.
  • Net income increased $0.3 million, or 10%, to $2.9 million, primarily due to the increase in operating income, partially offset by an increase in the effective tax rate for the quarter.
  • Adjusted EBITDA, which excludes non-cash stock-based compensation expense, increased $1.1 million, or 23%, to $5.8 million, or $0.50 per adjusted diluted share, as compared to $4.7 million, or $0.41 per adjusted diluted share, during the same prior year period.

 

Fiscal Year 2015 Results compared to Fiscal Year 2014



Year Ended December 31,





(in thousands, except shares and per share data)


2015


2014


% change


$ change

OTC Link ATS


$             11,796


$             12,019


(2%)


$           (223)

Market data licensing


20,609


20,334


1%


275

Corporate services


17,504


9,862


77%


7,642

Gross revenues


49,909


42,215


18%


7,694

Net revenues


47,530


39,827


19%


7,703

Operating expenses


30,664


26,925


14%


3,739

Income from operations


16,866


12,902


31%


3,964

Operating profit margin


35%


32%





Net income 


$             10,258


$               7,890


30%


$          2,368










Diluted earnings per share


$                 0.88


$                 0.69


28%



Adjusted diluted earnings per share


$                 1.73


$                 1.36


27%



Weighted-average shares outstanding, diluted


11,289,185


11,137,625


1%












 

Highlights

  • Gross revenues increased $7.7 million, or 18%, to $49.9 million, primarily a result of significant growth in our Corporate Services business.
  • OTC Link ATS revenues reflected a 2% decrease versus the prior year, primarily a result of the elimination of quote fees for subscribers quoting securities traded on our OTCQX and OTCQB markets.
  • Operating expenses for the 2015 fiscal year were $30.7 million, up 14% over 2014.  Compensation and benefits costs increased by $3.1 million, or 20%, to $18.7 million and technology and infrastructure costs increased by 13%, to $4.9 million.
  • Income from operations for the fiscal year increased by $4.0 million, or 31%, to $16.9 million
  • Net income increased 30% from $7.9 million in 2014 to $10.3 million in 2015.
  • Adjusted EBITDA increased $4.4 million, or 28%, to $20.1 million, or $1.73 per adjusted diluted share as compared to $15.7 million, or $1.36 per adjusted diluted share for fiscal year 2014.

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 March 29, 2016 to stockholders of record on March 15, 2016. The ex-dividend date is March 11, 2016.

Stock Buyback Program

On February 24, 2016, the Board of Directors refreshed the Company's stock repurchase program, giving the Company authorization to repurchase up to 300,000 shares of the Company's Class A Common Stock.  The Company is authorized to purchase shares from time to time on the open market and through block trades, in compliance with applicable law.

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.

Fourth Quarter and Fiscal Year 2015 Conference Call

The Company will host a conference call on Thursday, March 3, 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: 1-877-407-0789 (Domestic); 1-201-689-8562 (International)

Replay Dial-in Numbers (Available until March 17, 2016): 1-877-870-5176 (Domestic); 1-858-384-5517 (International); Replay PIN Number: 13624184

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 2015 Annual Report is available publicly at www.otcmarkets.com.

About OTC Markets Group Inc.

OTC Markets Group Inc. (OTCQX: OTCM) operates Open, Transparent and Connected financial markets for 10,000 U.S. and global securities.  Through our OTC Link® ATS, we directly link a diverse network of broker-dealers that provide liquidity and execution services for a wide spectrum of securities.  We organize these securities into markets to inform investors of opportunities and risks: the OTCQX® Best Market; the OTCQB® Venture Market; and the Pink® Open Market.  Our data-driven platform enables investors to easily trade through the broker of their choice at the best possible price and empowers a broad range of companies to improve the quality and availability of information for their 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: ir@otcmarkets.com

 

 

OTC MARKETS GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share and per share information)

(Unaudited)


Three Months Ended December 31,


Year Ended December 31,


2015


2014


2015


2014

OTC Link ATS

$                 2,882


$                 3,199


$               11,796


$               12,019

Market data licensing

5,121


5,105


20,609


20,334

Corporate services

5,052


2,903


17,504


9,862

Gross revenues

13,055


11,207


49,909


42,215

Redistribution fees and rebates

(577)


(611)


(2,379)


(2,388)

Net revenues

12,478


10,596


47,530


39,827

Operating expenses








Compensation and benefits

4,311


3,672


18,716


15,632

IT Infrastructure and information services

1,318


1,101


4,860


4,319

Professional and consulting fees

356


447


1,811


1,825

Marketing and advertising 

386


401


1,291


1,330

Occupancy costs

382


361


1,484


1,465

Depreciation and amortization

433


392


1,692


1,543

General, administrative and other

261


233


810


811

Total operating expenses

7,447


6,607


30,664


26,925

Income from operations

5,031


3,989


16,866


12,902

Other income








Other income (expense)

(1)


-


27


9

Income before provision for income taxes

5,030


3,989


16,893


12,911

Provision for income taxes

2,104


1,320


6,635


5,021

Net Income 

$                 2,926


$                 2,669


$               10,258


$                 7,890









Net income per share 








Basic

$                   0.26


$                   0.24


$                   0.91


$                   0.71

Diluted

$                   0.25


$                   0.23


$                   0.88


$                   0.69









Basic weighted average shares outstanding

11,010,111


10,879,819


11,008,095


10,833,874

Diluted weighted average shares outstanding

11,292,049


11,225,568


11,289,185


11,137,625

















Non-GAAP Reconciliation









Three Months Ended December 31,


Year Ended December 31,


2015


2014


2015


2014

Net Income

$                 2,926


$                 2,669


$               10,258


$                 7,890

Excluding:








Provision for income taxes

2,104


1,320


6,635


5,021

Depreciation and amortization

433


392


1,692


1,543

Stock-based compensation expense

344


344


1,552


1,241

Adjusted EBITDA

$                 5,807


$                 4,725


$               20,137


$               15,695









Adjusted diluted earnings per share

$                   0.50


$                   0.41


$                   1.73


$                   1.36









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)


December 31,


December 31,


2015


2014

Assets




Current assets




Cash

$             23,925


$             20,272

Accounts receivable, net of allowance for doubtful accounts of $147 and $130

6,082


5,674

Prepaid expenses and other current assets

22


1,395

Prepaid income taxes

1,520


523

Deferred tax assets

187


177

Total current assets

31,736


28,041

Property and equipment, net 

3,507


4,357

Non-current deferred tax assets, net

470


277

Goodwill

251


251

Intangible assets, net

40


40

Security deposits

210


210

Total Assets

$             36,214


$             33,176





Liabilities and stockholders' equity




Current liabilities




Accounts payable

$                  616


$                  562

Income taxes payable

92


-

Accrued expenses and other current liabilities

4,355


3,888

Deferred revenue

12,737


9,521

Total current liabilities

17,800


13,971

Deferred rent

139


391

Income tax reserve

728


563

Total Liabilities

18,667


14,925

Commitments and contingencies




Stockholders' equity




Common stock - par value $0.01 per share




Class A - 14,000,000 authorized, 11,438,928 issued, 11,192,885 outstanding at




December 31, 2015; 11,310,364 issued, 11,122,541 outstanding at December 31, 2014

114


113

Class C - 130,838 shares authorized, issued and outstanding at December 31, 2015




and December 31, 2014

1


1

Additional paid-in capital 

10,786


8,838

Retained earnings

8,916


10,752

Treasury stock - 246,043 shares at December 31, 2015 and 187,823 shares at December 31, 2014

(2,270)


(1,453)

Total Stockholders' Equity

17,547


18,251

Total Liabilities and Stockholders' Equity

$             36,214


$             33,176









 

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SOURCE OTC Markets Group Inc.



RELATED LINKS

http://www.otcmarkets.com