8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

May 2, 2013 (May 2, 2013)
Date of Report (Date of earliest event reported)

INVESTMENT TECHNOLOGY GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-32722	95-2848406
(State or other jurisdiction of incorporation or organization)	(Commission file number)	(I.R.S. Employer Identification No.)

380 Madison Avenue
New York, New York 10017
(Address of principal executive offices)

(212) 588-4000
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communication pursuant to Rule 425 under the Securities Act (17. CFR 230.425)

oSoliciting material pursuant to Rule 14a-2 under the Exchange Act (17. CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17. CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17. CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On May 2, 2013 Investment Technology Group, Inc. issued a press release announcing financial results for the quarter ended March 31, 2013.  A copy of this press release is attached hereto as Exhibit 99.1.

The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing of the Registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing. The information in this report, including the exhibit hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits

99.1 Press release issued by Investment Technology Group, Inc. on May 2, 2013.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		INVESTMENT TECHNOLOGY GROUP, INC.
		(Registrant)
Date:	May 2, 2013	By:	/s/ Steven R. Vigliotti
			Steven R. Vigliotti
			Chief Financial Officer and
			Duly Authorized Signatory of Registrant

2

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release by Investment Technology Group, Inc., dated as of May 2, 2013.

3

EX-99.1

EXHIBIT 99.1

ITG Reports First Quarter 2013 Results

 Strong European Results and Continued Expense Discipline Drive Profitability Rebound

NEW YORK, May 2, 2013 — ITG (NYSE: ITG), an independent execution and research broker, today reported results for the quarter ended March 31, 2013.

First quarter 2013 highlights included:

·GAAP net income of $8.6 million, or $0.22 per diluted share compared to GAAP net income of $5.5 million, or $0.14 per diluted share for the first quarter of 2012.  GAAP net income for the first quarter of 2013 included duplicate rent charges associated with the build-out of ITG’s new headquarters of $1.3 million, or $0.02 per diluted share after taxes.

·Adjusted net income of $9.4 million, or $0.24 per diluted share, excluding the duplicate rent charges.  Both GAAP net income and adjusted net income include a tax credit of approximately $1.2 million, or $0.03 per diluted share after taxes.  This credit applied to the full 2012 year but was booked during the first quarter of 2013 due to retroactive changes in tax legislation.

·Revenues of $132.1 million, compared to revenues of $136.4 million in the first quarter of 2012.

·Expenses of $121.1 million compared to expenses of $127.9 million in the first quarter of 2012.  Adjusted expenses, net of the duplicate rent charges, were $119.8 million.

·Average daily trading volume in the U.S. of 193 million shares, up from 190 million in the first quarter of 2012.  POSIT® average daily U.S. volume was 89 million shares compared to 96 million shares in the first quarter of 2012.  Total average daily volume traded through POSIT Alert® rose 25% compared with the first quarter of 2012.

·In Europe, average daily value traded in POSIT was $482 million, compared with $490 million in the first quarter of 2012.  Total average daily value traded through

POSIT Alert rose 108% in the first quarter of 2013 compared with the prior-year period.

·The repurchase of 748,100 shares of common stock under ITG’s authorized share repurchase program for a total of $9.0 million.  Repurchases since the first quarter of 2010 have totaled $121.6 million for 9.3 million shares, resulting in a decrease in shares outstanding, net of new issuances, of 15%.

Revenues from U.S. operations were $81.2 million in the first quarter of 2013 compared to $84.6 million in the first quarter of 2012.  ITG’s U.S. operations posted GAAP net income of $4.5 million and adjusted net income of $5.3 million in the first quarter of 2013, compared to net income of $1.7 million in the first quarter of 2012.  Sell-side client volume represented 49% of total U.S. volumes, down from 52% in the fourth quarter of 2012.  The overall revenue capture rate per share in the U.S. rose to $0.0046, up from $0.0043 in the fourth quarter of 2012.  This marked the first sequential increase in average U.S. revenue capture since the first quarter of 2011.

ITG’s International revenues were $50.8 million in the first quarter of 2013 compared to $51.8 million in the first quarter of 2012.  ITG’s International operations posted net income of $4.1 million in the first quarter of 2013, compared to net income of $3.8 million in the first quarter of 2012.

“Stronger overall performance in our European business and improved operating efficiency drove significant improvements in profitability, demonstrating the leverage in our business,” said Bob Gasser, ITG’s Chief Executive Officer and President.  “We will continue to focus on expense discipline and the broadening of our client relationships to enhance shareholder returns.”

The discussion of results above includes adjusted net income and related per share amounts, in addition to adjusted expense amounts, which are non-GAAP financial measures that are described in the attached tables along with a reconciliation of these non-GAAP financial measures to GAAP results.

Conference Call

ITG has scheduled a conference call today at 11:00 am ET to discuss first quarter results.  Those wishing to listen to the call should dial 1-877-317-6789 (1-412-317-6789 outside the U.S.) at least 15 minutes prior to the start of the call to ensure connection.  The webcast and accompanying slideshow presentation can be downloaded from ITG’s

website at investor.itg.com.  For those unable to listen to the live broadcast of the call, a replay will be available for one week by dialing 1-877-344-7529 (1-412-317-0088 outside the U.S.) and entering conference number 10027488.  The replay will be available starting approximately one hour after the completion of the conference call.

ABOUT ITG

ITG is an independent execution and research broker that partners with global portfolio managers and traders to provide unique data-driven insights throughout the investment process. From investment decision through settlement, ITG helps clients understand market trends, improve performance, mitigate risk and navigate increasingly complex markets. ITG is headquartered in New York with offices in North America, Europe, and Asia Pacific. For more information, 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.  Certain of these factors are noted throughout ITG’s 2012 Annual Report on Form 10-K, and its Form 10-Qs and include, but are not limited to, general economic, business, credit and financial market conditions, both internationally and nationally, financial market volatility, fluctuations in market trading volumes, effects of inflation, adverse changes or volatility in interest rates, fluctuations in foreign exchange rates, evolving industry regulations, changes in tax policy or accounting rules, the actions of both current and potential new competitors, changes in commission pricing, the volatility of our stock price, rapid changes in technology, errors or malfunctions in our systems or technology, cash flows into or redemptions from equity mutual funds, ability to meet liquidity requirements related to the clearing of our customers’ trades, 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 acquired companies, our ability to attract and retain talented employees and our ability to achieve cost savings from our cost reduction plans. The forward-looking statements included herein represent ITG’s views as of the date of this release. ITG undertakes no obligation to revise or update publicly any forward-looking statement for any reason unless required by law.

ITG Media/Investor Contact:

J.T. Farley

1-212-444-6259

corpcomm@itg.com

INVESTMENT TECHNOLOGY GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Income (unaudited)

(In thousands, except per share amounts)

	Three Months Ended March 31,
	2013		2012
Revenues:
Commissions and fees	$	103,008	$	105,264
Recurring	25,340		27,432
Other	3,702		3,679
Total revenues	132,050		136,375
Expenses:
Compensation and employee benefits	49,549		52,587
Transaction processing	21,532		22,223
Occupancy and equipment	16,541		14,649
Telecommunications and data processing services	14,098		15,067
Other general and administrative	18,776		22,677
Interest expense	602		678
Total expenses	121,098		127,881
Income before income tax expense	10,952		8,494
Income tax expense	2,330		3,036
Net income	$	8,622	$	5,458
Earnings per share:
Basic	$	0.23	$	0.14
Diluted	$	0.22	$	0.14
Basic weighted average number of common shares outstanding	37,378		39,112
Diluted weighted average number of common shares outstanding	38,615		40,303

INVESTMENT TECHNOLOGY GROUP, INC. AND SUBSIDIARIES

Supplemental Financial Data (unaudited)

(In thousands)

	Three months ended March 31,
	2013		2012
Revenues by Geographic Region:
U.S. Operations	$	81,243	$	84,589
Canadian Operations	18,544		20,831
European Operations	20,950		20,127
Asia Pacific Operations	11,313		10,828
Total Revenues	$	132,050	$	136,375

	Three months ended March 31,
	2013		2012
Revenues by Product Group:
Electronic Brokerage	$	69,648	$	72,180
Research Sales and Trading	25,413		26,426
Platforms	25,099		25,744
Analytics	11,670		11,597
Corporate (non-product)	220		428
Total Revenues	$	132,050	$	136,375

INVESTMENT TECHNOLOGY GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Financial Condition

(In thousands, except share amounts)

	March 31, 2013			December 31, 2012
	(unaudited)
Assets
Cash and cash equivalents	$	233,898		$	245,875
Cash restricted or segregated under regulations and other	59,768			61,117
Deposits with clearing organizations	24,348			29,149
Securities owned, at fair value	11,515			10,086
Receivables from brokers, dealers and clearing organizations	2,112,042			1,107,119
Receivables from customers	1,362,041			546,825
Premises and equipment, net	65,607			54,989
Capitalized software, net	42,205			43,994
Other intangibles, net	34,152			35,227
Income taxes receivable	2			7,460
Deferred taxes	36,763			39,155
Other assets	19,022			15,763
Total assets	$	4,001,363		$	2,196,759
Liabilities and Stockholders’ Equity
Liabilities:
Accounts payable and accrued expenses	$	148,052		$	165,062
Short-term bank loans	47,494			22,154
Payables to brokers, dealers and clearing organizations	2,412,090			1,337,459
Payables to customers	935,072			226,892
Securities sold, not yet purchased, at fair value	6,623			5,249
Income taxes payable	12,134			10,608
Deferred taxes	226			293
Term debt	35,574			19,272
Total liabilities	3,597,265			1,786,989
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; 52,105,402 and 52,037,011 shares issued at March 31, 2013 and December 31, 2012, respectively	521			520
Additional paid-in capital	234,375			245,002
Retained earnings	414,107			405,485
Common stock held in treasury, at cost; 14,893,575 and 14,677,872 shares at March 31, 2013 and December 31, 2012, respectively	(251,485		)	(253,111		)
Accumulated other comprehensive income (net of tax)	6,580			11,874
Total stockholders’ equity	404,098			409,770
Total liabilities and stockholders’ equity	$	4,001,363		$	2,196,759

INVESTMENT TECHNOLOGY GROUP, INC.

Reconciliation of US GAAP Results to Adjusted Results

In evaluating ITG’s financial performance, management reviews results from operations which excludes non-operating or one-time charges.  Adjusted expenses and adjusted net income and related per share amounts are non-GAAP performance measures, but the Company believes that they are useful to assist investors in gaining an understanding of the trends and operating results for ITG’s core businesses. These measures should be viewed in addition to, and not in lieu of, ITG’s reported results under GAAP.

The following are reconciliations of GAAP results to adjusted results for the period presented (in thousands except per share amounts):

	Three Months Ended March 31, 2013
	(unaudited)
	Consolidated			U.S. Operations
Total revenues	$	132,050		$	81,243
Total expenses	121,098			75,503
Less:
Duplicate rent charges (1)	(1,331		)	(1,331		)
Adjusted operating expenses	119,767			74,172
Income before income tax benefit	10,952			5,740
Effect of pro forma adjustment	1,331			1,331
Adjusted pre-tax operating income	12,283			7,071
Income tax expense	2,330			1,227
Tax effect of pro forma adjustment	547			547
Adjusted operating income tax expense	2,877			1,774
Net income	8,622			4,513
Net effect of pro forma adjustment	784			784
Adjusted operating net income	$	9,406		$	5,297
Diluted earnings per share	$	0.22		$	0.12
Net effect of pro forma adjustment	0.02			0.02
Adjusted diluted operating earnings per share	$	0.24		$	0.14

Notes:

(1)During the fourth quarter of 2012, ITG began to build out and ready its new lower Manhattan headquarters while continuing to occupy its existing headquarters in midtown Manhattan and as a result, has since incurred duplicate rent charges.

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