NYFIX, Inc. News
NYFIX Reports First Quarter 2008 Results
— the launch in March of Euro Millennium(TM), NYFIX's European-based neutral dark pool of liquidity; — a record volume month for NYFIX Millennium(R), one of the industry's leading dark pools of liquidity, which matched over 1.2 billion shares in January for an average of nearly 58 million shares per day; and — the continued growth of the NYFIX Marketplace, which reached 8,666 direct order routing messaging channels by the end of the quarter.
"With our 2007 transitional year behind us, we are focusing more of our efforts now on growing the business while we improve our financial results," said
Three Month Results Financial highlights for first quarter 2008 include: — Revenues of $31.4 million, a 13% increase over revenues of $27.7 million for first quarter 2007. — A 16% increase in FIX Division net revenues to $16.1 million compared to $13.9 million for first quarter 2007. — A 31% increase in Transaction Services Division net revenues to $13.4 million compared to $10.2 million for first quarter 2007. — A 48% decrease in OMS Division net revenues to $1.9 million compared to $3.6 million for first quarter 2007. — Gross profit of $17.3 million, a 29% increase over gross profit of $13.4 million for first quarter 2007. — A net loss of $(3.4) million, or $(0.09) per share, compared to a net loss for first quarter 2007 of $(6.3) million, or $(0.17) per share. These loss amounts exclude the impact of accumulated preferred dividends of $(1.1) million, or $(0.03) per share, and $(1.7) million, or $(0.05) per share, for first quarter 2008 and first quarter 2007, respectively. Other significant items which affected the net loss amounts disclosed above include the following: Three Months Ended March 31, 2008 2007 (in millions, except per share amounts) Amount per share Amount per share SEC investigation, restatement and other related expenses $(0.1) $(0.00) $(3.6) $(0.10) Transitional rebuilding and remediation costs (0.1) (0.00) (1.7) (0.05) Transitional employment costs (0.1) (0.00) (1.0) (0.03) Euro Millennium costs (2.2) (0.06) - - Restructuring charge 0.2 0.00 - - Loss on Fusion OMS wind-down (0.3) (0.01) - - Stock-based compensation (2.8) (0.08) (0.1) (0.00) — Since second quarter 2007, NYFIX has incurred costs for Euro Millennium(TM), a neutral dark pool of liquidity in pan-European listed cash equities. Euro Millennium(TM) was launched in March 2008 for matching U.K. listed equities and will be rolled out in other major European markets over the course of 2008. — During March 2008, the Company terminated its lease and corresponding sublease of office space previously occupied in Stamford, CT, resulting in a reversal of $0.5 million of a restructuring reserve. Partially offsetting this benefit were employment-related restructuring charges of $0.3 million related to discontinuing the Fusion OMS business. In addition, the Company incurred an additional loss of $0.3 million during first quarter 2008 related to operating the Fusion OMS business during this wind-down phase. — During fourth quarter 2007, NYFIX adopted a new equity incentive plan to assist in retention and to further promote alignment with stockholders, and has since issued awards (options and restricted stock units) for more than 11 million shares of common stock.
Outlook for the Remainder of 2008 and Subsequent Events
In 2008, NYFIX will be focused on improving its financial performance and growing its business.
Although Euro Millennium was launched for matching U.K. listed equities, significant work remains to roll this platform out to other major European markets during 2008. The Company expects losses related to this initiative to continue throughout 2008 with a loss of
The Company expects to incur
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 2007 grants fully vest. Stock-based compensation expense is expected to be approximately
In
In addition, the share purchase agreement for the FIX City acquisition provides the potential for cash earn-out payments in years 1, 2 and 3 following the acquisition totaling up to 3.7 million pounds (or approx.
NYFIX expects to incur integration costs relating to the acquisition of approximately
Investor Conference Call
As previously announced, NYFIX will host a conference call to discuss its results and business outlook today,
About NYFIX, Inc.
A pioneer in electronic trading solutions, NYFIX continues to transform trading through innovation. The NYFIX Marketplace(TM) is a global community of trading counterparties utilizing innovative services that optimize the business of trading. NYFIX Millennium(R) provides the NYFIX Marketplace(TM) 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.
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.'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 the fiscal year ended
NYFIX, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) (in thousands, except per share amounts) Three Months Ended March 31, 2008 2007 Revenue: Subscription and maintenance $17,518 $17,274 Transaction 13,268 9,776 Product sales and services 621 680 Total revenue 31,407 27,730 Cost of revenue: Subscription and maintenance 7,651 8,546 Transaction 6,412 5,401 Product sales and services 81 387 Total cost of revenue 14,144 14,334 Gross profit 17,263 13,396 Operating expense: Selling, general and administrative 20,396 16,878 SEC investigation, restatement and other related expenses 137 3,593 Depreciation and amortization 447 282 Restructuring charge (158) - Loss from operations (3,559) (7,357) Interest expense (211) (136) Investment income 546 1,227 Other expense, net - (15) Loss before income tax provision (3,224) (6,281) Income tax provision 128 47 Net loss (3,352) (6,328) Accumulated preferred dividends (1,142) (1,717) Loss applicable to common stockholders $(4,494) $(8,045) Basic and diluted loss per common share (net of accumulated preferred dividends) $( 0.12) $( 0.22) Basic and diluted weighted average common shares outstanding 37,312 35,767 NYFIX, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands, except share and per share amounts) March 31, December 31, 2008 2007 (Unaudited) (Audited) Assets Current assets: Cash and cash equivalents $57,642 $75,657 Accounts receivable 16,444 14,609 Clearing assets 729,266 483,867 Prepaid expenses and other current assets 7,693 7,900 Total current assets 811,045 582,033 Property and equipment 22,284 21,478 Capitalized software costs 6,720 5,789 Goodwill 57,322 57,401 Acquired intangible assets 3,601 3,708 Other assets, net 860 1,745 Total assets $901,832 $672,154 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued expenses $29,143 $39,163 Clearing liabilities 725,382 483,600 Current portion of capital lease obligations 725 923 Current portion of other long-term liabilities 1,489 1,564 Deferred revenue 4,551 4,648 Total current liabilities 761,290 529,898 Long-term portion of capital lease obligations 431 550 Long-term debt 9,949 9,941 Other long-term liabilities 1,343 2,354 Total liabilities 773,013 542,743 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 $76,313 at March 31, 2008 62,092 62,092 Series C Non-Voting Convertible, none issued - - Common stock, $0.001 par value; 100,000,000 shares authorized; 38,373,268 and 37,725,758 shares issued, respectively 266,262 261,307 Preferred stock dividend distributable, 525,000 common shares - 2,441 Accumulated deficit (186,949) (183,232) Treasury stock, 923,108 and 906,826 shares, respectively, at cost (12,600) (13,194) Accumulated other comprehensive income (loss) 14 (3) Total stockholders' equity 128,819 129,411 Total liabilities and stockholders' equity $901,832 $672,154
SOURCE NYFIX, Inc.
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