CHICAGO, April 27, 2010 (GLOBE NEWSWIRE) -- optionsXpress Holdings, Inc. (Nasdaq:OXPS) today reported results for the three months ended March 31, 2010. Highlights from the first quarter 2010 included:
- Revenues of $57.0 million, a 16% increase year-over-year
- Net income of $11.9 million, $0.21 per diluted share
- Daily average revenue trades (DARTs) of 44,600, a 5% decrease year-over-year
- Net new account growth of 6,500 during the quarter, resulting in 357,700 customer accounts, a 9% increase year-over-year
- Ending customer assets of $7.5 billion, a 47% increase year-over-year
"We saw improvements in many of our key long-term growth metrics at optionsXpress in the first quarter despite macroeconomic conditions that we believe continue to temper account acquisition efforts and trading activity," remarked David Fisher, Chief Executive Officer of optionsXpress. "We added new customers, saw strong growth in margin balances and our customer assets ended the quarter at a record $7.5 billion, which is 47% higher than a year ago and 25% higher than when the market peaked in October 2007. These attractive core trends reinforce our belief that the ongoing investments we are making in our business have strengthened the core franchise."
For the first quarter, total DARTs were 44,600, down 5% from 46,800 during the first quarter of 2009, and up 5% from 42,600 for the fourth quarter of 2009. Retail DARTs were 30,300 during the first quarter, down 4% from the first quarter of 2009, and down slightly compared to the fourth quarter. Institutional DARTs were 14,300 during the first quarter, down 5% from the first quarter of 2009, and up 17% from the fourth quarter.
Total net revenues increased 16% over the first quarter of 2009, but decreased 5% when compared to the fourth quarter of 2009. Resulting net income was $11.9 million, or $0.21 per diluted share, a 12% decrease from the $13.6 million reported in the first quarter of 2009. First quarter results include approximately $750,000 in severance expense related to the departure of an executive officer during the quarter.
"We increased our advertising spend in the first quarter as planned in anticipation of a better seasonal new account environment," commented Adam DeWitt, Chief Financial Officer of optionsXpress. "We did begin to see some improvement in March as net new accounts reached their highest level since October 2009 and we have seen this improvement continue into April."
Outlook
Mr. Fisher concluded, "We have a number of reasons to maintain an optimistic view of the future. We have been able to grow our customer base meaningfully while maintaining strong profitability and good margins in the brokerage business in a difficult macro environment. As we move closer to an economic recovery, our efficient operations will allow us to generate significant leverage as trading activity improves and interest rates rise. Finally, we have a strong balance sheet that gives us the flexibility to be opportunistic. We believe that these factors demonstrate that our strategy of being the premier destination for self-directed investors who want to use derivatives will generate strong long-term earnings growth for our shareholders."
Conference Call
A conference call will be broadcast live on Tuesday, April 27, 2010, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) at www.optionsxpress.com/investor. An online replay will be available approximately two hours after the call and can be accessed in the Investor Relations' Calendar of Events portion of the website.
About optionsXpress Holdings, Inc.
optionsXpress Holdings, Inc., a pioneer in equity options and futures trading, offers an innovative suite of online brokerage services for investor education, strategy evaluation and trade execution. optionsXpress Holdings subsidiaries include optionsXpress, Inc., a retail online brokerage specializing in options and futures, brokersXpress, LLC, an online trading and reporting platform for independent investment professionals, Open E Cry, LLC, an innovative futures broker offering direct access futures trading for high volume commodities and futures traders through its proprietary software platform, and Optionetics, Inc, a leading provider of investment education services, including live seminars, proprietary software analytics, online and offline educational products and individual coaching.
More information can be found in the Investor Relations section of optionsXpress' website at http://www.optionsxpress.com/investor.
The optionsXpress Holdings, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6907
Safe Harbor
This press release may contain forward-looking statements. These statements relate to future events or our future financial performance and involve known and unknown risks. We urge you to carefully consider these risks in evaluating the information in this press release, including risks related to general economic conditions, regulatory developments, the competitive landscape, the volume of securities trading generally or by our customers specifically and other risks described in our filings with the Securities and Exchange Commission. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expects," "intends," "plans," "feel," "anticipates," "believes," "estimates," "predicts," "potential," "continue" or the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. The forward-looking statements made in this press release relate only to events as of the date of this release. We undertake no ongoing obligation to update these statements.
| optionsXpress Holdings, Inc. | ||||
| Consolidated Statements of Operations | ||||
| In thousands, except per share data | ||||
| (Unaudited) | ||||
| Three Months Ended | ||||
| March 31, | March 31, | Change | ||
| 2010 | 2009 | $ | % | |
| Revenues: | ||||
| Commissions | $39,598 | $38,089 | $1,509 | 4% |
| Other brokerage-related revenue | 4,498 | 6,297 | (1,799) | (29%) |
| Interest revenue and fees | 4,767 | 4,380 | 387 | 9% |
| Interest expense | (51) | (62) | 11 | (18%) |
| Net interest revenue and fees | 4,716 | 4,318 | 398 | 9% |
| Education revenues | 7,530 | -- | 7,530 | n/a |
| Other income | 689 | 590 | 99 | 17% |
| Net revenues | $57,031 | $49,294 | $7,737 | 16% |
| Expenses: | ||||
| Compensation and benefits | $11,648 | $8,374 | $3,274 | 39% |
| Brokerage, clearing and other related expenses | 9,018 | 7,190 | 1,828 | 25% |
| Brokerage advertising | 4,369 | 5,789 | (1,420) | (25%) |
| Education marketing and fulfillment | 5,295 | -- | 5,295 | n/a |
| Depreciation and amortization | 2,291 | 1,992 | 299 | 15% |
| Other general and administrative | 5,576 | 4,754 | 822 | 17% |
| Total expenses | 38,197 | 28,099 | 10,098 | 36% |
| Income before income taxes | 18,834 | 21,195 | (2,361) | (11%) |
| Income taxes | 6,946 | 7,639 | (693) | (9%) |
| Net income | $11,888 | $13,556 | ($1,668) | (12%) |
| Basic earnings per share | $0.21 | $0.23 | ($0.02) | (9%) |
| Diluted earnings per share | $0.21 | $0.23 | ($0.02) | (9%) |
| Weighted average shares outstanding - basic | 57,465 | 58,467 | (1,002) | (2%) |
| Weighted average shares outstanding - diluted | 57,655 | 58,551 | (896) | (2%) |
| optionsXpress Holdings, Inc. | ||||
| Consolidated Balance Sheets | ||||
| In thousands | ||||
| (Unaudited) | ||||
| Period Ended | ||||
| March 31, | December 31, | Change | ||
| 2010 | 2009 | $ | % | |
| Assets: | ||||
| Cash and cash equivalents | $163,706 | $178,989 | ($15,283) | (9%) |
| Cash and investments segregated in compliance with federal regulations | 852,741 | 881,210 | (28,469) | (3%) |
| Receivables from brokerage customers, net | 205,568 | 149,871 | 55,697 | 37% |
| Receivables from brokers, dealers and clearing organizations | 33,816 | 110,779 | (76,963) | (69%) |
| Investments in securities | 63,962 | 70,850 | (6,888) | (10%) |
| Deposits with clearing organizations | 20,438 | 30,245 | (9,807) | (32%) |
| Fixed assets, net | 12,787 | 13,263 | (476) | (4%) |
| Goodwill | 81,590 | 81,590 | -- | 0% |
| Other intangible assets, net | 6,104 | 6,525 | (421) | (6%) |
| Other assets | 41,463 | 22,999 | 18,464 | 80% |
| Total assets | $1,482,175 | $1,546,321 | ($64,146) | (4%) |
| Liabilities and stockholders' equity: | ||||
| Liabilities | ||||
| Payables to brokerage customers | $1,084,102 | $1,179,204 | ($95,102) | (8%) |
| Payables to brokers, dealers and clearing organizations | 1,974 | 144 | 1,830 | n/m |
| Accrued liabilities and accounts payable | 17,433 | 19,027 | (1,594) | (8%) |
| Current and deferred income taxes | 4,015 | 193 | 3,822 | n/m |
| Other liabilities | 53,521 | 36,878 | 16,643 | 45% |
| Total liabilities | 1,161,045 | 1,235,446 | (74,401) | (6%) |
| Stockholders' equity | 321,130 | 310,875 | 10,255 | 3% |
| Total liabilities and stockholders' equity | $1,482,175 | $1,546,321 | ($64,146) | (4%) |
| optionsXpress Holdings, Inc. | ||||
| Statistical Operating Data | ||||
| Three Months Ended | ||||
| March 31, | March 31, | Change | ||
| 2010 | 2009 | $ or # | % | |
| Number of customer accounts (at period end) (1) | 357,700 | 328,300 | 29,400 | 9% |
| Daily average revenue trades (''DARTs'') (2) | ||||
| Retail DARTs | 30,300 | 31,700 | (1,400) | (4%) |
| Institutional DARTs | 14,300 | 15,100 | (800) | (5%) |
| Total DARTs | 44,600 | 46,800 | (2,200) | (5%) |
| Customer trades per account (3) | 31 | 35 | (4) | (11%) |
| Average commission per trade | $14.55 | $13.33 | $1.22 | 9% |
| Option trades as a % of total trades | 42% | 39% | 3% | |
| Brokerage advertising expense per net new customer account (4) | $672 | $597 | $75 | 13% |
| Total client assets (000s) | $7,504,799 | $5,097,637 | $2,407,162 | 47% |
| Client margin balances (000s) | $195,520 | $112,962 | $82,558 | 73% |
| (1) Customer accounts are open, numbered accounts. | ||||
| (2) DARTs are total revenue-generating trades for a period divided by the number of trading days in that period. | ||||
| (3) Customer trades per account are total trades divided by the average number of total customer accounts during the period. Customer trades are annualized. | ||||
| (4) Calculated based on total net new customer accounts opened during the period. | ||||
| optionsXpress Holdings, Inc. | ||||
| Segment Information | ||||
| In thousands | ||||
| (Unaudited) | ||||
| Three Months Ended | ||||
| March 31, | March 31, | |||
| 2010 | 2009 | |||
| Revenue | ||||
| Brokerage Services | $49,491 | $49,294 | ||
| Education | 8,014 | -- | ||
| Eliminations | (474) | -- | ||
| Revenue | $57,031 | $49,294 | ||
| Income/(loss) before income taxes | ||||
| Brokerage Services | $20,336 | $21,195 | ||
| Education | (1,502) | -- | ||
| Income before income taxes | $18,834 | $21,195 | ||