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Revenues were
Cost of revenue and SG&A expenses declined 17% and 42%, respectively, during fourth quarter 2008 compared to fourth quarter 2007. As a result, EBITDA was
Other developments during the fourth quarter included:
* 500% growth in volumes executed in Euro Millennium during
* an increase in cash and cash equivalents to
"Our ability to manage costs has enabled us to improve cash flows and generate positive EBITDA this quarter while we continue to invest in our Millennium, Euro Millennium and
Three Month Results
Financial highlights for fourth quarter 2008 include:
* a 3% increase in gross profit to
* an 8% decrease in total revenues to
* an 18% increase in FIX Division net revenues to
* a 28% decrease in Transaction Services Division net revenues
to
* a 63% decrease in OMS Division net revenues to
* revenues of
* EBITDA of
* a net loss of $(2.7) million, or $(0.07) per share, compared
to a net loss for fourth quarter 2007 of $(20.0) million, or
$(0.55) per share, which excludes the impact of accumulated
preferred dividends of
Other items that affected the net loss amounts disclosed above include the following:
Three Months Ended December 31,
---------------------------------------
2008 2007
------------------- -------------------
(in millions, except per
share amounts) Amount per share Amount per share
------------------- -------------------
Asset impairment charges $ (11.7) $ (0.31) $ (7.6) $ (0.21)
Euro Millennium loss (2.2) (0.06) (2.0) (0.05)
Stock-based compensation (1.4) (0.04) (5.7) (0.16)
Integration charges (0.1) (0.00) -- --
SEC investigation,
restatement and other related
expenses, net of insurance
recoveries 10.0 0.26 (0.2) (0.01)
Tax benefit associated with
goodwill impairment 0.2 0.01 0.6 0.02
Transitional employment costs -- -- (1.6) (0.04)
Transitional rebuilding and
remediation costs -- -- (0.9) (0.03)
Restructuring charges -- -- (0.3) (0.01)
Income from discontinued
operations -- -- 0.7 0.02
During fourth quarter 2008 the Company recorded a non-cash asset impairment charge to adjust the carrying value of certain goodwill amounts due to the adverse market conditions in the latter part of 2008 that have caused a decline in industry market multiples. This charge had no impact on cash flows or operations and was partially offset by a tax benefit of
Since second quarter 2007,
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. As a result, stock-based compensation will remain at high levels until the significant equity grants made in
Since the acquisition of FIXCITY in
Due to the fact that an agreement was reached for global settlement of the Company's outstanding derivative litigation matters related to historical stock option granting practices, which is pending court approval, the Company recognized an insurance benefit during fourth quarter 2008 of
Full-year Results
Financial highlights for full-year 2008 include:
* an 11% increase in gross profit to
* a 3% decrease in total revenues to
* a 17% increase in FIX Division net revenues to
* a 16% decrease in Transaction Services Division net revenues
to
* a 56% decrease in OMS Division net revenues to
* revenues of
* EBITDA of $(6.0) million compared to EBITDA of $(35.4) million
for full-year 2007; and
* a net loss of $(16.4) million, or $(0.43) per share, compared
to a net loss for full-year 2007 of $(41.1) million, or $(1.14)
per share, which exclude the impact of accumulated preferred
dividends of $(2.2) million, or $(0.06) per share, and $(5.9)
million, or $(0.16) per share, for full-year 2008 and full-year
2007, respectively.
Other items that affected the net loss amounts disclosed above include the following:
Year Ended December 31,
---------------------------------------
2008 2007
------------------- -------------------
(in millions, except per
share amounts) Amount per share Amount per share
------------------- -------------------
Asset impairment and
restructuring charges $ (11.7) $ (0.31) $ (7.6) $ (0.21)
Euro Millennium loss (8.8) (0.23) (4.0) (0.11)
Stock-based compensation (7.8) (0.21) (6.0) (0.16)
Workforce reduction
termination costs (0.9) (0.02) -- --
Integration charges (0.8) (0.02) -- --
Loss on Fusion OMS wind-down (0.8) (0.02) -- --
Transitional employment costs (0.3) (0.01) (4.0) (0.11)
Transitional rebuilding and
remediation costs (0.2) (0.01) (6.4) (0.18)
Restructuring charges (0.2) (0.01) (0.3) (0.01)
SEC investigation,
restatement and other related
expenses, net of
insurance recoveries 9.6 0.25 (5.8) (0.16)
Tax benefit associated with
goodwill impairment 0.2 0.01 0.6 0.02
NYSE linkage fees not passed
to clients -- -- (1.9) (0.05)
Income from discontinued
operations -- -- 0.7 0.02
In
Integration costs incurred during first half 2008 also included a
The Company incurred a restructuring charge during first half 2008 for employment-related costs associated with the discontinuation of the Fusion OMS product of
2009 Outlook and Subsequent Events
In 2009,
In
New single-day records were set in Euro Millennium during
In addition, the
For 2009, stock-based compensation expense is estimated to be
The impact of the recent consolidations in the brokerage industry on the Company's businesses has thus far been modest, but is expected to offset the growth in revenue from Marketplace channels (order routing and IOI) during 2009 by
Investor Conference Call
As previously announced,
Non-GAAP Disclosure
The disclosure above of EBITDA excludes the impact of interest, taxes, depreciation and amortization, other income (expense) and discontinued operations 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
A pioneer in electronic trading solutions,
Caution Regarding Forward Looking Statements
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, Inc. and Subsidiaries
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
----------------------- -----------------------
2008 2007 2008 2007
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Audited)
Revenue:
Subscription and
maintenance $ 17,753 $ 16,815 $ 70,525 $ 67,116
Transaction 9,963 13,582 44,904 52,339
Product sales and
services 627 254 2,118 2,247
----------- ----------- ----------- -----------
Total revenue 28,343 30,651 117,547 121,702
----------- ----------- ----------- -----------
Cost of revenue:
Subscription and
maintenance 7,539 8,670 30,997 34,381
Transaction 5,665 7,287 23,314 29,916
Product sales and
services 87 77 340 813
----------- ----------- ----------- -----------
Total cost of
revenue 13,291 16,034 54,651 65,110
----------- ----------- ----------- -----------
Gross profit 15,052 14,617 62,896 56,592
Operating expense:
Selling, general and
administrative 15,804 27,624 74,675 86,848
Depreciation and
amortization 495 515 1,907 1,554
Integration charges 103 -- 838 --
SEC investigation,
restatement and
other related
expenses (9,988) 249 (9,550) 5,846
Restructuring charge -- 331 216 331
Asset impairment
charges 11,651 7,596 11,651 7,596
----------- ----------- ----------- -----------
Loss from operations (3,013) (21,698) (16,841) (45,583)
Interest expense (274) (166) (763) (565)
Investment income 330 815 1,357 4,114
Other income
(expense), net (25) 1 (25) (3)
----------- ----------- ----------- -----------
Loss from continuing
operations before
income tax (benefit)
provision (2,982) (21,048) (16,272) (42,037)
Income tax (benefit)
provision (240) (416) 143 (275)
----------- ----------- ----------- -----------
Loss from continuing
operations (2,742) (20,632) (16,415) (41,762)
Income from
discontinued
operations, incuding
gain on sale of
$1,905 in 2007 -- 676 -- 676
----------- ----------- ----------- -----------
Net loss (2,742) (19,956) (16,415) (41,086)
Accumulated preferred
dividends 549 (1,182) (2,247) (5,868)
----------- ----------- ----------- -----------
Loss applicable to
common stockholders $ (2,193)$ (21,138)$ (18,662)$ (46,954)
=========== =========== =========== ===========
Basic and diluted
loss per common
share $ (0.06)$ (0.58)$ (0.49)$ (1.30)
=========== =========== =========== ===========
Basic and diluted
weighted average
common shares
outstanding 38,058 36,601 37,723 36,160
=========== =========== =========== ===========
NYFIX, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
December 31, December 31,
2008 2007
(Unaudited) (Audited)
----------- -----------
Assets
Current assets:
Cash and cash equivalents $ 55,966 $ 75,657
Accounts receivable 14,120 14,609
Clearing assets 400,638 483,867
Prepaid expenses and other current assets 3,702 7,900
----------- -----------
Total current assets 474,426 582,033
Property and equipment 20,508 21,478
Capitalized software costs 8,701 5,789
Goodwill 47,170 57,401
Acquired intangible assets 7,422 3,708
Other assets 564 1,745
----------- -----------
Total assets $ 558,791 $ 672,154
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 21,656 $ 39,163
Clearing liabilities 399,927 483,600
Current portion of capital lease
obligations 1,358 923
Convertible notes 9,971 --
Current portion of other long-term
liabilities 1,014 1,564
Deferred revenue 5,271 4,648
----------- -----------
Total current liabilities 439,197 529,898
Long-term portion of capital lease
obligations 1,469 550
Convertible notes -- 9,941
Other long-term liabilities 1,021 2,354
----------- -----------
Total liabilities 441,687 542,743
----------- -----------
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 $75,000 at
December 31, 2008 62,092 62,092
Series C Non-Voting Convertible, none
issued -- --
Common stock, $0.001 par value; 100,000,000
shares authorized; 39,510,917 and
37,725,758 shares issued, respectively 271,319 261,307
Preferred stock dividend distributable,
525,000 common shares at December 31, 2007 -- 2,441
Accumulated deficit (200,012) (183,232)
Treasury stock, 923,108 and 906,826 shares,
respectively, at cost (12,600) (13,194)
Accumulated other comprehensive loss (3,695) (3)
----------- -----------
Total stockholders' equity 117,104 129,411
----------- -----------
Total liabilities and stockholders' equity $ 558,791 $ 672,154
=========== ===========
NYFIX, Inc. and Subsidiaries
Reconciliation of Net Loss to EBITDA
(in thousands)
Three Months Ended Year Ended
December 31, December 31,
----------------------- -----------------------
2008 2007 2008 2007
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Audited)
Net loss $ (2,742)$ (19,956)$ (16,415)$ (41,086)
Deduct:
Income from
discontinued
operations -- (676) -- (676)
Income tax benefit (239) (416) -- (275)
Investment income (330) (815) (1,357) (4,114)
Other income, net -- (1) -- --
Add:
Income tax provision -- -- 143 --
Interest expense 273 166 763 565
Other expense, net 25 -- 25 3
Depreciation and
amortization 3,136 2,423 10,808 10,211
----------- ----------- ----------- -----------
EBITDA $ 123 $ (19,275)$ (6,033)$ (35,372)
=========== =========== =========== ===========
