EX-99.1 2 a09-20167_1ex99d1.htm EX-99.1

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

 

Investment Technology Group Reports

Second Quarter 2009 Results

 

NEW YORK, NY, July 30, 2009 — Investment Technology Group, Inc. (NYSE: ITG), a leading agency broker and financial technology firm, today announced that for the second quarter ended June 30, 2009, net income was $20.3 million, or $0.46 per diluted share, versus net income of $25.7 million and earnings of $0.58 per diluted share in the second quarter of 2008. ITG’s revenues for the second quarter of 2009 were $168.0 million versus $180.4 million for the second quarter of 2008. Pre-tax margins in the second quarter of 2009 were 20.2 percent compared to 24.4 percent in the second quarter of 2008.

 

On a sequential basis, second quarter earnings rose 59 percent compared to earnings of $0.29 per diluted share in the first quarter of 2009.  Excluding severance charges, earnings per diluted share rose 23 percent in the second quarter of 2009 compared to the first quarter.  Revenues for the second quarter of 2009 were up 8 percent versus the prior quarter, while pre-tax margins, excluding severance charges, rose by 2 percentage points.

 

“The second quarter was marked by a degree of stabilization in US pricing and volumes, as inflows into equity mutual funds turned positive,” said Bob Gasser, ITG’s Chief Executive Officer and President.  “However, the overall economic environment remains challenging and our core active customers have yet to return to their previous level of engagement with our execution product suite.”

 

ITG’s non-US revenues were $46.0 million in the second quarter of 2009 versus revenues of $48.6 million in the second quarter of 2008. Non-US operations generated net income of $2.2 million in the second quarter of 2009, compared to $1.3 million of net income in the second quarter of 2008.  Non-US revenues were up 20 percent in the second quarter of 2009 versus the trailing quarter, while net income moved to profitability after a net loss of $2.1 million in the first quarter of 2009.

 

“Our top line results in Europe improved compared with the first quarter of 2009 along with market conditions, while margins were positively affected by many of the initiatives

 


 

we have put in place to take advantage of changes in market structure,” said Mr. Gasser.  “In the Asia Pacific region, our revenues significantly outperformed market turnover gains compared with the first quarter of 2009 as we improved traction with clients under our new leadership team. Along with our consistently profitable Canadian business, we are pleased with the international results we have achieved from the deployment of ITG’s capabilities around the globe.”

 

Year to Date results

 

For the six months ended June 30, 2009, revenues were $323.6 million compared to $384.6 million in the prior year.  Net income was $33.1 million and diluted earnings per share were $0.76 in the first half of 2009 versus net income of $58.7 million and diluted earnings per share of $1.33 in the first half of 2008.

 

Conference Call

 

ITG has scheduled a conference call today at 11:00 a.m. ET to discuss second quarter results. Those wishing to listen to the call should dial 1-800-901-5259 and enter the pass code 13792489 at least 10 minutes prior to the start of the call to ensure connection.  The conference call and webcast will also be accessible through ITG’s web site at www.itg.com.  For those unable to listen to the live broadcast of the call, a replay will be available for one week by dialing 1-888-286-8010 and entering the pass code 97020063. The replay will be available starting approximately two hours after the completion of the conference call.

 

ABOUT ITG

 

Investment Technology Group, Inc., is a specialized agency brokerage and financial technology firm that partners with asset managers globally to provide innovative solutions spanning the investment continuum. A leader in electronic trading since launching POSIT® in 1987, ITG’s integrated approach now includes a range of products from portfolio management and pre-trade analysis to trade execution and post-trade evaluation. Asset managers rely on ITG’s independence, experience, and agility to help mitigate risk, improve performance and navigate increasingly complex markets.  The firm is headquartered in New York with offices in North America, Europe and the Asia Pacific region. For more information on ITG, please visit www.itg.com.

 


 

In addition to historical information, this press release may contain “forward-looking” statements that reflect management’s expectations for the future.  A variety of important factors could cause results to differ materially from such statements.  These factors are noted throughout ITG’s 2008 Annual Report, on its Form 10-K, and on its Form 10-Qs and include, but are not limited to, the actions of both current and potential new competitors, fluctuations in market trading volumes, financial market volatility, changes in commission pricing, evolving industry regulations, errors or malfunctions in our systems or technology, rapid changes in technology, cash flows into or redemptions from equity funds, effects of inflation, customer trading patterns, the success of our products and service offerings, our ability to continue to innovate and meet the demands of our customers for new or enhanced products, our ability to successfully integrate companies we have acquired, changes in tax policy or accounting rules, fluctuations in foreign exchange rates, adverse changes or volatility in interest rates, as well as general economic, business, credit and financial market conditions, internationally or nationally.

 

ITG Contact:

J.T. Farley

(212) 444-6259

 

###

 


 

INVESTMENT TECHNOLOGY GROUP, INC.

Consolidated Statements of Income (unaudited)

(In thousands, except per share amounts)

 

 

 

Three Months Ended
June 30,

 

Six Months Ended June
30,

 

 

 

2009

 

2008

 

2009

 

2008

 

Revenues:

 

 

 

 

 

 

 

 

 

Commissions and fees

 

$

144,111

 

$

153,217

 

$

275,044

 

$

329,444

 

Recurring

 

21,983

 

22,285

 

43,145

 

43,930

 

Other

 

1,871

 

4,855

 

5,443

 

11,261

 

Total revenues

 

167,965

 

180,357

 

323,632

 

384,635

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

58,897

 

60,174

 

119,075

 

129,398

 

Transaction processing

 

24,916

 

24,333

 

47,846

 

48,682

 

Occupancy and equipment

 

14,900

 

14,655

 

29,738

 

27,755

 

Telecommunications and data processing services

 

13,312

 

12,438

 

27,282

 

25,188

 

Other general and administrative

 

21,357

 

22,944

 

40,398

 

46,533

 

Interest expense

 

601

 

1,743

 

1,813

 

3,956

 

Total expenses

 

133,983

 

136,287

 

266,152

 

281,512

 

Income before income tax expense

 

33,982

 

44,070

 

57,480

 

103,123

 

Income tax expense

 

13,671

 

18,330

 

24,331

 

44,395

 

Net income

 

$

20,311

 

$

25,740

 

$

33,149

 

$

58,728

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.47

 

$

0.59

 

$

0.76

 

$

1.34

 

Diluted

 

$

0.46

 

$

0.58

 

$

0.76

 

$

1.33

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average number of common shares outstanding

 

43,470

 

43,705

 

43,404

 

43,667

 

Diluted weighted average number of common shares outstanding

 

43,824

 

44,256

 

43,714

 

44,252

 

 

(1) We have changed the income caption commissions revenues to commissions and fee revenues to better reflect the commission equivalent fees earned on spread based trades.

(2) Certain expenses previously included in other general and administrative were reclassified to compensation and employee benefits for comparability.

 


 

INVESTMENT TECHNOLOGY GROUP, INC.

Consolidated Statements of Financial Condition

(In thousands, except share amounts)

 

 

 

June 30,
2009

 

December
31,
2008

 

 

 

(unaudited)

 

 

 

Assets

 

 

 

 

 

Cash and cash equivalents

 

$

361,727

 

$

352,960

 

Cash restricted or segregated under regulations and other

 

65,000

 

73,218

 

Deposits with clearing organizations

 

17,246

 

43,241

 

Securities owned, at fair value

 

6,218

 

6,399

 

Receivables from brokers, dealers and clearing organizations

 

656,814

 

328,528

 

Receivables from customers

 

1,155,874

 

300,158

 

Premises and equipment, net

 

42,519

 

48,321

 

Capitalized software, net

 

68,576

 

62,821

 

Goodwill

 

425,526

 

423,896

 

Other intangibles, net

 

29,833

 

31,094

 

Deferred taxes

 

5,708

 

2,591

 

Other assets

 

11,801

 

12,226

 

Total assets

 

$

2,846,842

 

$

1,685,453

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Liabilities:

 

 

 

 

 

Accounts payable and accrued expenses

 

$

184,189

 

$

221,582

 

Short-term bank loans

 

—

 

24,900

 

Payables to brokers, dealers and clearing organizations

 

927,513

 

232,527

 

Payables to customers

 

793,058

 

287,515

 

Securities sold, not yet purchased, at fair value

 

124

 

2,479

 

Income taxes payable

 

13,114

 

25,646

 

Deferred taxes

 

18,257

 

8,924

 

Long term debt

 

70,700

 

94,500

 

Total liabilities

 

2,006,955

 

898,073

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

Preferred stock, $0.01 par value; 1,000,000 shares authorized; no shares issued or outstanding

 

—

 

—

 

Common stock, $0.01 par value; 100,000,000 shares authorized; 51,608,738 and 51,582,306 shares issued at June 30, 2009 and December 31, 2008, respectively, and; 43,550,364 and 43,244,184 shares outstanding at June 30, 2009 and December 31, 2008, respectively

 

516

 

516

 

Additional paid-in capital

 

224,695

 

219,830

 

Retained earnings

 

799,468

 

766,319

 

Common stock held in treasury, at cost; 8,058,374 and 8,338,122 shares at June 30, 2009 and December 31, 2008, respectively

 

(186,654

)

(193,206

)

Accumulated other comprehensive income (net of tax)

 

1,862

 

(6,079

)

Total stockholders’ equity

 

839,887

 

787,380

 

Total liabilities and stockholders’ equity

 

$

2,846,842

 

$

1,685,453