8-K

UNITED STATES

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

Date of Report (Date of earliest event reported):February 28, 2008

NYFIX, INC.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation) 0-21324 (Commission File Number) 06-1344888 (IRS Employer Identification No.)

100 Wall Street, 26^th Floor, New York, New York  10005

(Address of principal executive offices)

Registrant’s telephone number, including area code: 646-525-3000

______________________________________________________

(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 ( see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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

o Pre-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 February 28, 2008, NYFIX, Inc. (the “Company”) issued a press release, a copy of which is furnished as Exhibit 99.1 to this Report (the “Press Release”), which includes certain information with respect to the Company’s results of operations for the twelve-month period and quarter ended December 31, 2007. The information in the Press Release with respect to “NYFIX Reports Fourth Quarter and Full Year 2007 Results” is hereby incorporated by reference in this Item 2.02.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1 Press release of NYFIX, Inc., dated February 28, 2008

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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.

	NYFIX, INC.
By:	/s/ Annemarie Tierney
Name:	Annemarie Tierney
Title:	General Counsel and Corporate Secretary

Dated: February 28, 2008

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EXHIBIT INDEX

99.1 Press release of NYFIX, Inc., dated February 28, 2008.

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EX-99.1

[FOR IMMEDIATE RELEASE]

Contacts:

FOR INVESTORS	FOR MEDIA
Don Duffy	Matt Zachowski
Integrated Corporate Relations	Intermarket Communications
(203) 682-8215	(212) 888-6115 x228

NYFIX REPORTS FOURTH QUARTER AND FULL YEAR 2007 RESULTS

Full Year 2007 Revenues up 24% Driven by Growth in Transaction Services

New York, NY, February 28, 2008: NYFIX, Inc. (Nasdaq: NYFX)(“NYFIX” or the “Company”), a trusted provider of innovative solutions that optimize trading efficiency, today reported results for the fourth quarter and full year 2007. For the full year 2007, revenues increased 24% over 2006, driven by a 74% increase in Transaction Services revenues. Fourth quarter revenues of $30.7 million represented a 16% increase over fourth quarter 2006. Business highlights during the quarter included the signing of key partnership agreements for Euro-Millennium™, NYFIX’s European-based neutral dark pool of liquidity scheduled to launch in March, as well as continued infrastructure enhancements designed to position the Company for further growth.

“We are pleased with our tremendous progress during 2007, not only in terms of revenue growth, but also with respect to the remediation activities that marked this as a transitional year,” said Howard Edelstein, CEO of NYFIX. “In 2008 we look forward to focusing our energies on growing the business.”

Three Month Results

Financial highlights for fourth quarter 2007 include:

· Revenues of $30.7 million, a 16% increase over revenues of $26.4 million for fourth quarter 2006.

· An 8% increase in net revenues for the FIX Division to $14.7 million, as compared to $13.6 million for fourth quarter 2006.

· A 64% increase in net revenues for the Transaction Services Division to $13.8 million, as compared to $8.4 million for fourth quarter 2006.

· A 50% decrease in net revenues for the OMS Division to $2.2 million, as compared to $4.4 million for fourth quarter 2006.

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· Gross profit of $14.6 million, a 9% increase over the gross profit of $13.4 million for fourth quarter 2006. These gross profit amounts include the impact of stock-based compensation included in cost of revenue of $0.4 million and less than $0.1 million for fourth quarter 2007 and fourth quarter 2006, respectively.

· Loss from continuing operations of $(20.6) million, or $(0.56) per share, compared to a loss from continuing operations for fourth quarter 2006 of $(3.9) million, or $(0.11) per share. These loss amounts exclude the impact of accumulated preferred dividends of $(1.2) million, or $(0.03) per share, and $(1.4) million, or $(0.04) for fourth quarter 2007 and fourth quarter 2006, respectively, as well as the beneficial conversion feature on preferred stock of $(18.1) million, or $(0.51) per share for fourth quarter 2006. Other significant items which affected the loss amounts disclosed above include the following:

	Three Months Ended December 31,
	2007						2006
(in millions, except per share amounts)	Amount			per share			Amount			per share
SEC investigation, restatement and other related expenses	$	(0.2	)	$	(0.01	)	$	(3.1	)	$	(0.09	)
Transitional rebuilding and remediation costs		(0.9	)		(0.03	)		(0.8	)		(0.02	)
Transitional employment costs		(1.6	)		(0.04	)		(0.9	)		(0.02	)
Euro Millennium pre-operating start-up costs		(2.0	)		(0.05	)		-			-
Impairment and restructuring charges		(7.9	)		(0.22	)		-			-
Stock-based compensation		(5.7	)		(0.16	)		(0.1	)		(0.00	)
Tax benefit associated with goodwill impairment		0.6			0.02			-			-
Interest penalty on convertible note for filing delay		-			-			(0.3	)		(0.01	)

NYFIX has incurred significant transitional rebuilding and remediation costs relating to deficiencies involving critical operational systems and processes, including technology infrastructure and management information systems, and certain historical administrative issues. In addition, NYFIX has incurred significant transitional employment costs to build critical teams, retain key employees and remediate certain skill gaps.

Since the second quarter of 2007 NYFIX has incurred pre-operating start-up costs for a new initiative, Euro Millennium, a multilateral trading facility for non-displayed liquidity in pan-European listed cash equities.

As previously announced, during fourth quarter 2007, NYFIX entered into a strategic agreement with Citi to offer NYFIX Fusion OMS customers a transition arrangement to Citi’s Lava ColorPalette® OMS. As a result of discontinuing the Fusion OMS, the Company recorded $7.9 million of impairment and employment related restructuring charges, partially offset by a tax credit of $0.6 million related to impaired goodwill.

During fourth quarter 2007, NYFIX adopted a new equity incentive plan to assist in retention and to further promote alignment with stockholders, and issued awards (options and restricted stock units) for approximately 9.9 million shares of common stock.

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Fourth quarter 2007 results also include income from discontinued operations of $1.1 million. This amount reflects a preliminary estimate of the earn-out gain associated with the sale of the Company’s NYFIX Overseas, Inc. subsidiary in August 2006, net of related expenses and an accrual for the estimated cost to resolve a tax contingency associated with historical stock option gains realized by NYFIX Overseas employees. The Company may have a more up-to-date estimate of the earn-out gain prior to filing its 2007 Form 10-K and as a result, the actual reported amount may vary from the amount noted above.

Full Year Results

Financial highlights for full year 2007 include:

· Revenues of $121.7 million, a 24% increase over revenues of $98.4 million for full year 2006.

· A 19% increase in net revenues for the FIX Division to $57.7 million, as compared to $48.6 million for full year 2006.

· A 74% increase in net revenues for the Transaction Services Division to $53.6 million, as compared to $30.8 million for full year 2006.

· A 44% decrease in net revenues for the OMS Division to $10.5 million, as compared to $18.9 million for full year 2006.

· Gross profit of $56.6 million, an 18% increase over the gross profit of $48.0 million for full year 2006. These gross profit amounts include the impact of stock-based compensation included in cost of revenue of $0.4 million and $0.1 million for full year 2007 and full year 2006, respectively.

· Loss from continuing operations of $(41.8) million, or $(1.15) per share, compared to a loss from continuing operations for full year 2006 of $(16.6) million, or $(0.49) per share. These loss amounts exclude the impact of accumulated preferred dividends of $(5.9) million, or $(0.16) per share, and $(1.4) million, or $(0.04) per share for full year 2007 and full year 2006, respectively, as well as the beneficial conversion feature on preferred stock of $(18.1) million, or $(0.53) per share for full year 2006. Other significant items which affected the loss amounts disclosed above include the following:

	Year Ended December 31,
	2007						2006
(in millions, except per share amounts)	Amount			per share			Amount			per share
SEC investigation, restatement and other related expenses	$	(5.8	)	$	(0.16	)	$	(12.8	)	$	(0.37	)
Transitional rebuilding and remediation costs		(6.4	)		(0.18	)		(0.8	)		(0.02	)
Transitional employment costs		(4.0	)		(0.11	)		(1.9	)		(0.06	)
NYSE linkage fees not passed to clients		(1.9	)		(0.05	)		-			-
Euro Millennium pre-operating start-up costs		(4.0	)		(0.11	)		-			-
Impairment and restructuring charges		(7.9	)		(0.22	)		-			-
Stock-based compensation		(6.0	)		(0.16	)		(0.8	)		(0.02	)
Tax benefit associated with goodwill impairment		0.6			0.02			-			-
Restructuring charge on office closing		-			-			(2.1	)		(0.06	)
Interest penalty on convertible note for filing delay		-			-			(0.5	)		(0.01	)

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Full year 2007 and full year 2006 results also include income from discontinued operations of $1.1 million and $3.6 million, respectively. The full year 2007 amount reflects an estimate of the earn-out gain associated with the sale of NYFIX Overseas in August 2006, net of related expenses, and an accrual for the estimated cost to resolve a tax contingency associated with historical stock option gains realized by NYFIX Overseas employees. The full year 2006 amount includes a gain recorded on the NYFIX Overseas sale of $4.0 million as well as the 2006 results of operations of NYFIX Overseas through the sale date.

2008 Outlook and Subsequent Events

In 2008 the Company will be focused on growing its Transaction Services and FIX Marketplace™ businesses, and further expanding throughout Europe. As previously reported, NYFIX Millennium®, one of the industry’s leading dark pools of liquidity, reached a new high in volumes during January 2008, matching a total of over 1.2 billion shares. This volume established a new average daily volume high for a month with an ADV of nearly 58 million shares.

The Company expects to leverage the experience gained with NYFIX Millennium in the U.S. and launch Euro Millennium in March 2008. This initiative is well aligned with the Company’s goal of global expansion during a time of rapid regulatory change. The Company expects to incur approximately $2.0 million of costs related to this effort in the first quarter of 2008.

The transitional costs for the rebuilding, remediation and employment initiatives described above were substantially complete by year-end, with approximately $0.6 million of remaining costs expected during the first half of 2008. In addition, the Company expects to incur $0.6 million of remaining employment related restructuring costs related to the Fusion OMS wind-down, which is currently expected to be completed during the second quarter of 2008. Going forward, stock-based compensation expense is expected to be at lower levels than the fourth quarter of 2007 due to shortened initial vesting periods and other awards that were fully vested on issuance. For 2008, stock-based compensation expense is estimated at $3.0 million for the first quarter and approximately $2.0 million per quarter thereafter. These stock-based compensation amounts may vary, however, depending on the fair value of performance awards when the applicable criteria are established and whether such performance awards actually vest.

In January 2008, NYFIX received a $5.0 million advance from its primary carrier under its previous Directors and Officers insurance policy for fees incurred in defense of the SEC investigation into the Company’s historical stock option activity as well as related litigation. As this amount can be recovered in certain circumstances, NYFIX will defer recognition of these proceeds in its operating results until further progress is made in resolving these contingencies. NYFIX is pursuing additional claims from its secondary carriers under its previous insurance policies which have additional limits aggregating $10.0 million.

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Investor Conference Call

As previously announced, the Company will host a conference call to discuss its results and business outlook later today at 5:00 PM Eastern. The conference call can be accessed live via telephone by dialing, (866) 225-8754 or for international callers by dialing (480) 629-9562. A replay will be available two hours after the call and can be accessed by dialing (800) 406-7325 or (303) 590-3030 for international callers; the password is 3846539. The replay will be available until March 6, 2008. The call will be webcast live from the Company's website at www.nyfix.com under the investor relations section.

About NYFIX, Inc.

A pioneer in electronic trading solutions, NYFIX continues to transform trading through innovation. The NYFIX Marketplace™ is a global community of trading counterparties utilizing innovative services that optimize the business of trading. NYFIX Millennium® provides the NYFIX Marketplace™ with new methods of accessing liquidity. NYFIX also provides value-added informational and analytical services and powerful tools for measuring execution quality. A trusted business partner to the buy-side and sell-side alike, NYFIX enables ultra low touch, low impact market access and end-to-end transaction processing. For more information, please visit www.nyfix.com.

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.'s plans, objectives, expectations and intentions and other statements that are not historical or current facts. Forward-looking statements are based on NYFIX, Inc.’s current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements. Factors that could cause NYFIX, Inc.’s results or future events to differ materially from current expectations include, but are not limited to: the possibility that the Company may record a significant impairment charge relating to its goodwill because the Company is not profitable; the effects of current, pending and future legislation, regulation and regulatory actions; the ability of the Company to achieve and maintain effective internal control over financial reporting in accordance with SEC rules promulgated under Section 404 of the Sarbanes-Oxley Act; the impact of accounting for stock-based compensation and ongoing regulatory investigations, including the possibility of new and significant information subsequently arising which could lead to different determinations and require different accounting treatment; actions and initiatives by both current and future competitors; our ability to accommodate increased levels of trading activity and keep current with market data requirements; and other factors detailed in NYFIX, Inc.’s Annual Report on Form 10-K for 2006, and other periodic reports filed with the U.S. Securities and Exchange Commission. In addition, these statements are based on a number of assumptions that are subject to change. The inclusion of forward-looking statements herein should not be regarded as a representation by NYFIX, Inc. that the forward-looking statements will prove to be correct. In addition, the forward-looking statements included in this press release represent the Company’s views as of February 28, 2008. The Company anticipates that subsequent events and developments will cause the Company’s views to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to February 28, 2008.

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NYFIX, Inc. and Subsidiaries

Consolidated Statements of Operations

(in thousands, except per share amounts)

	Three Months Ended December 31,						Year Ended December 31,
	2007			2006			2007			2006
	(Unaudited)			(Unaudited)			(Unaudited)			(Audited)
Revenue:
Subscription and maintenance	$	16,815		$	17,676		$	67,116		$	65,801
Transaction		13,582			7,960			52,339			29,609
Product sales and services		254			803			2,247			2,943
Total revenue		30,651			26,439			121,702			98,353
Cost of revenue:
Subscription and maintenance		8,670			8,457			34,381			32,638
Transaction		7,287			4,149			29,916			15,901
Product sales and services		77			459			813			1,824
Total cost of revenue		16,034			13,065			65,110			50,363
Gross profit		14,617			13,374			56,592			47,990
Operating expense:
Selling, general and administrative		27,624			14,662			86,848			49,237
Asset impairment charge		7,596			-			7,596			-
Depreciation and amortization		515			267			1,554			1,185
Restructuring charge		331			-			331			2,056
SEC investigation, restatement and other related expenses		249			3,088			5,846			12,758
Loss from operations		(21,698	)		(4,643	)		(45,583	)		(17,246	)
Interest expense		(166	)		(394	)		(565	)		(1,029	)
Investment income		815			1,179			4,114			1,894
Other income (expense), net		1			5			(3	)		20
Loss from continuing operations before income tax (benefit) provision		(21,048	)		(3,853	)		(42,037	)		(16,361	)
Income tax (benefit) provision		(416	)		48			(275	)		189
Loss from continuing operations		(20,632	)		(3,901	)		(41,762	)		(16,550	)
Income from discontinued operations, including gain on sale
of $2,334 and $4,035, respectively		1,105			-			1,105			3,646
Net loss		(19,527	)		(3,901	)		(40,657	)		(12,904	)
Accumulated preferred dividends		(1,182	)		(1,354	)		(5,868	)		(1,354	)
Beneficial conversion feature on preferred stock		-			(18,139	)		-			(18,139	)
Loss applicable to common stockholders	$	(20,709	)	$	(23,394	)	$	(46,525	)	$	(32,397	)
Basic and diluted loss from continuing operations per
common share (net of accumulated preferred dividends)	$	(0.60	)	$	(0.66	)	$	(1.32	)	$	(1.06	)
Basic and diluted income from discontinued operations
per common share		0.03			-			0.03			0.11
Basic and diluted loss per common share	$	(0.57	)	$	(0.66	)	$	(1.29	)	$	(0.95	)
Basic and diluted weighted average common shares outstanding		36,601			35,521			36,160			34,035

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NYFIX, Inc. and Subsidiaries

Consolidated Balance Sheets

(in thousands, except share and per share amounts)

	December 31,
	2007			2006
	(Unaudited)			(Audited)
Assets
Current assets:
Cash and cash equivalents	$	75,657		$	105,888
Accounts receivable, net		14,609			13,727
Clearing broker assets		483,867			423,153
Prepaid expenses and other current assets		8,588			4,179
Total current assets		582,721			546,947
Property and equipment, net		21,478			14,808
Capitalized software costs, net		5,789			5,900
Goodwill		57,401			58,193
Acquired intangible assets, net		3,708			1,966
Other assets, net		1,745			1,514
Total assets	$	672,842		$	629,328
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses	$	39,422		$	25,133
Clearing broker liabilities		483,600			422,429
Current portion of capital lease obligations		923			1,223
Current portion of long-term debt		-			188
Current portion of other long-term liabilities		1,564			1,235
Deferred revenue		4,648			4,212
Total current liabilities		530,157			454,420
Long-term portion of capital lease obligations		550			461
Long-term debt		9,941			7,412
Other long-term liabilities		2,354			3,662
Total liabilities		543,002			465,955
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 $77,625 at December 31, 2007		62,092			62,092
Series C Non-Voting Convertible, none issued		-			-
Common stock, $0.001 par value; 100,000,000 and 60,000,000 shares authorized; 37,725,758 and 36,654,986 shares issued, respectively		261,307			256,835
Preferred stock dividend distributable, 525,000 common shares		2,441			-
Accumulated deficit		(182,803	)		(139,309	)
Treasury stock, 906,826 and 1,133,778 shares, respectively, at cost		(13,194	)		(16,224	)
Accumulated other comprehensive loss		(3	)		(21	)
Total stockholders' equity		129,840			163,373
Total liabilities and stockholders' equity	$	672,842		$	629,328

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