CHICAGO, Jan. 28, 2010 (GLOBE NEWSWIRE) -- optionsXpress Holdings, Inc. (Nasdaq:OXPS) today reported results for the three months and full year ended December 31, 2009.
Highlights from the fourth quarter 2009 included:
- Revenues of $60.1 million, a 5% increase year-over-year
- Net income of $14.9 million, or $0.26 per diluted share
- Daily average revenue trades (DARTs) of 42,600, a 17% decrease year-over-year
- Net new account growth of 7,300 during the quarter
Highlights from the full year 2009 included:
- Revenues of $233.4 million, a 5% decrease year-over-year
- Net income of $60.8 million, or $1.05 per diluted share
- Ending accounts of 351,200, a 10% increase year-over-year
- $7.0 billion in customer assets on December 31, 2009, a 43% increase year-over-year
“In 2009, optionsXpress delivered double-digit net new account growth and brokerage pretax margins of 46%. We are pleased with these results, particularly amidst the very difficult economic backdrop that included the highest unemployment rates in 25 years and extraordinary low short-term interest rates,” remarked David Fisher, Chief Executive Officer of optionsXpress. “We were very pleased by the resiliency of both our customers and the broader derivatives markets during 2009 as exemplified by our customer assets ending the year at an all time high of $7 billion, up 43% versus last year, and industry-wide option volumes eclipsing 2008 levels – providing a strong base for our long-term success. In addition, we continued our history of innovation with many product enhancements including the introduction of the OX Mobile application, IDEAS and our new streaming platform, Xtend.”
Fourth Quarter Results
For the fourth quarter, total DARTs were 42,600, down 17% from 51,400 during the fourth quarter of 2008, and up 1% from 42,000 for the third quarter of 2009. Total net revenues increased 5% over the fourth quarter of 2008 and were down 3% when compared to the third quarter of 2009. Resulting net income was $14.9 million, or $0.26 per diluted share, a 22% decrease from the $19.2 million reported in the fourth quarter of 2008. Fourth quarter results include approximately $0.9 million in one-time non-cash gains related to prior acquisitions, which also lowered the tax rate to 33.9% from a normalized 36.4%.
Full Year 2009 Performance
At the end of 2009, total customer accounts were 351,200, up 10% from 2008. Total customer assets at year-end 2009 were $7.0 billion, up 43% from year-end 2008 customer assets of $4.9 billion. Commission revenues for 2009 were $159.5 million, down 5% from 2008. Net interest revenues and fees were $17.5 million, down 61% from 2008 due to the steep decline in short-term interest rates. 2009 full year total net revenues were $233.4 million, which was down 5% from net revenues of $246.6 million in 2008, and 2009 full year earnings per share were $1.05, a 30% decrease versus earnings per share of $1.49 in 2008.
“We continue to demonstrate our commitment to a strong balance sheet and prudent capital deployment. Over the past two years, we have repurchased approximately $100 million in stock, completed the acquisitions of OEC and Optionetics and still ended 2009 with no corporate debt and a strong cash position,” commented Adam DeWitt, Chief Financial Officer of optionsXpress. “We believe this provides us sufficient flexibility to take advantage of acquisition and other growth opportunities in all types of market conditions and macro-environments.”
Outlook
Mr. Fisher concluded, “In 2009 we saw retail investors reduce their trading activity following the turmoil of the financial crisis. However, as the year came to an end, we were encouraged by our customers’ shift towards a more historical level of derivatives trading. And, while trading levels have not fully rebounded, we believe the double digit account and asset growth we generated in 2009, combined with our obsessive focus on providing the best investing experience for self-directed investors using derivatives, leaves us well positioned to benefit from a more stable trading environment in 2010 and eventual rising interest rates.”
Conference Call
A conference call will be broadcast live on Thursday, January 28, 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 | Change | |||
|
December 31, 2009 |
December 31, 2008 |
$ | % | |
| Revenues: | ||||
| Commissions | $38,938 | $42,581 | ($3,643) | (9%) |
| Other brokerage related revenue | 6,003 | 6,397 | (394) | (6%) |
| Interest revenue and fees | 4,677 | 7,894 | (3,217) | (41%) |
| Interest expense | (67) | (152) | 85 | (56%) |
| Net interest revenue and fees | 4,610 | 7,742 | (3,132) | (40%) |
| Education revenues | 8,008 | -- | 8,008 | n/a |
| Other income | 2,563 | 597 | 1,966 | 329% |
| Net revenues | $60,122 | $57,317 | $2,805 | 5% |
| Expenses: | ||||
| Compensation and benefits | $11,759 | $6,880 | $4,879 | 71% |
| Brokerage, clearing and other related expenses | 8,899 | 8,022 | 877 | 11% |
| Brokerage advertising | 3,607 | 5,866 | (2,259) | (39%) |
| Education marketing and fulfillment | 4,965 | -- | 4,965 | n/a |
| Depreciation and amortization | 2,239 | 1,982 | 257 | 13% |
| Other general and administrative | 6,155 | 5,462 | 693 | 13% |
| Total expenses | $37,624 | $28,212 | $9,412 | 33% |
| Income before income taxes | 22,498 | 29,105 | (6,607) | (23%) |
| Income taxes | 7,628 | 9,921 | (2,293) | (23%) |
| Net income | $14,870 | $19,184 | ($4,314) | (22%) |
| Basic earnings per share | $0.26 | $0.32 | ($0.06) | (19%) |
| Diluted earnings per share | $0.26 | $0.32 | ($0.06) | (19%) |
|
Weighted average shares outstanding - basic |
57,669 | 59,660 | (1,991) | (3%) |
|
Weighted average shares outstanding - diluted |
57,857 | 59,746 | (1,889) | (3%) |
| Twelve Months Ended | Change | |||
|
December 31, 2009 |
December 31, 2008 |
$ | % | |
| Revenues: | ||||
| Commissions | $159,536 | $167,562 | ($8,026) | (5%) |
| Other brokerage related revenue | 26,765 | 30,832 | (4,067) | (13%) |
| Interest revenue and fees | 17,787 | 46,956 | (29,169) | (62%) |
| Interest expense | (245) | (1,794) | 1,549 | (86%) |
| Net interest revenue and fees | 17,542 | 45,162 | (27,620) | (61%) |
| Education revenues | 24,398 | -- | 24,398 | n/a |
| Other income | 5,177 | 3,002 | 2,175 | 72% |
| Net revenues | $233,418 | $246,558 | ($13,140) | (5%) |
| Expenses: | ||||
| Compensation and benefits | $42,452 | $28,571 | $13,881 | 49% |
| Brokerage, clearing and other related expenses | 31,931 | 27,675 | 4,256 | 15% |
| Brokerage advertising | 17,608 | 20,716 | (3,108) | (15%) |
| Education marketing and fulfillment | 15,763 | -- | 15,763 | n/a |
| Depreciation and amortization | 8,879 | 7,423 | 1,456 | 20% |
| Other general and administrative | 22,579 | 20,850 | 1,729 | 8% |
| Total expenses | $139,212 | $105,235 | $33,977 | 32% |
| Income before income taxes | 94,206 | 141,323 | (47,117) | (33%) |
| Income taxes | 33,439 | 51,008 | (17,569) | (34%) |
| Net income | $60,767 | $90,315 | ($29,548) | (33%) |
| Basic earnings per share | $1.05 | $1.49 | ($0.44) | (30%) |
| Diluted earnings per share | $1.05 | $1.49 | ($0.44) | (30%) |
|
Weighted average shares outstanding - basic |
57,925 | 60,566 | (2,641) | (4%) |
|
Weighted average shares outstanding - diluted |
58,081 | 60,720 | (2,639) | (4%) |
| optionsXpress Holdings, Inc. | |||||||
| Consolidated Balance Sheets | |||||||
| In thousands | |||||||
| (Unaudited) | |||||||
| Period Ended | Change | ||||||
|
December 31, 2009 |
December 31, 2008 |
$ | % | ||||
| Assets: | |||||||
| Cash and cash equivalents | $178,989 | $114,450 | $64,539 | 56% | |||
| Cash and investments segregated in compliance with federal regulations | 881,210 | 427,669 | 453,541 | 106% | |||
| Receivables from brokerage customers, net | 149,871 | 137,502 | 12,369 | 9% | |||
| Receivables from brokers, dealers and clearing organizations | 110,779 | 15,621 | 95,158 | 609% | |||
| Investments in securities | 70,850 | 89,937 | (19,087) | (21%) | |||
| Deposits with clearing organizations | 30,245 | 108,409 | (78,164) | (72%) | |||
| Fixed assets, net | 13,263 | 12,979 | 284 | 2% | |||
| Goodwill | 81,590 | 44,234 | 37,356 | 84% | |||
| Other intangible assets, net | 6,525 | 4,569 | 1,956 | 43% | |||
| Other assets | 22,999 | 16,963 | 6,036 | 36% | |||
| Total assets | $1,546,321 | $972,333 | $573,988 | 59% | |||
| Liabilities and stockholders' equity: | |||||||
| Liabilities | |||||||
| Payables to brokerage customers | $1,179,204 | $675,872 | $503,332 | 74% | |||
| Payables to brokers, dealers and clearing organizations | 144 | 293 | (149) | (51%) | |||
| Accounts payable and accrued liabilities | 48,471 | 27,848 | 20,623 | 74% | |||
| Deferred revenue | 7,434 | -- | 7,434 | n/a | |||
| Current and deferred income taxes | 193 | 25 | 168 | 672% | |||
| Total liabilities | 1,235,446 | 704,038 | 531,408 | 75% | |||
| Stockholders' equity | 310,875 | 268,295 | 42,580 | 16% | |||
| Total liabilities and stockholders' equity | $1,546,321 | $972,333 | $573,988 | 59% | |||
| optionsXpress Holdings, Inc. | |||||||
| Statistical Operating Data | |||||||
| Three Months Ended | Change | ||||||
|
December 31, 2009 |
December 31, 2008 |
$ or # | % | ||||
| Number of customer accounts(at period end)(1) | 351,200 | 318,600 | 32,600 | 10% | |||
| Daily average revenue trades (‘‘DARTs’’) (2) | |||||||
| Retail DARTs | 30,400 | 35,000 | (4,600) | (13%) | |||
| Institutional DARTs (3) | 12,200 | 16,400 | (4,200) | (26%) | |||
| Total DARTs | 42,600 | 51,400 | (8,800) | (17%) | |||
| Customer trades per account (4) | 31 | 42 | (11) | (26%) | |||
| Average commission per trade | $14.49 | $13.14 | $1.35 | 10% | |||
| Option trades as a % of total trades | 43% | 40% | 3% | ||||
|
Brokerage advertising expense per net new customer account (5) |
$494 | $438 | $56 | 13% | |||
| Total client assets (000s) | $7,024,623 | $4,898,346 | $2,126,277 | 43% | |||
| Client margin balances (000s) | $149,062 | $129,171 | $19,891 | 15% | |||
| Twelve Months Ended | Change | ||||||
|
December 31, 2009 |
December 31, 2008 |
$ or # | % | ||||
| Number of customer accounts(at period end)(1) | 351,200 | 318,600 | 32,600 | 10% | |||
| Daily average revenue trades (‘‘DARTs’’) (2) | |||||||
| Retail DARTs | 31,500 | 36,500 | (5,000) | (14%) | |||
| Institutional DARTs (3) | 12,600 | 7,100 | 5,500 | 77% | |||
| Total DARTs | 44,100 | 43,600 | 500 | 1% | |||
| Customer trades per account (4) | 33 | 38 | (5) | (13%) | |||
| Average commission per trade | $14.41 | $15.27 | ($0.86) | (6%) | |||
| Option trades as a % of total trades | 42% | 53% | (11%) | ||||
| Brokerage advertising expense per net new customer account (5) | $540 | $388 | $152 | 39% | |||
| Total client assets (000s) | $7,024,623 | $4,898,346 | $2,126,277 | 43% | |||
| Client margin balances (000s) | $149,062 | $129,171 | $19,891 | 15% | |||
| (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) Includes all Open E Cry and other institutional revenue-generating trades beginning in July 2008. | |||||||
| (4) Customer trades per account are total trades divided by the average number of total customer accounts during the period. Customer trades are annualized. | |||||||
|
(5) Calculated based on total net new customer accounts opened during the period.
|
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optionsXpress Holdings, Inc. |
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| Segment Information | ||||||
| In thousands | ||||||
| (Unaudited) | ||||||
| Three Months Ended | Twelve Months Ended | |||||
| December 31, 2009 | December 31, 2008 | December 31, 2009 | December 31, 2008 | |||
| Revenue | ||||||
| Brokerage Services | $52,132 | $57,317 | $209,041 | $246,558 | ||
| Education | 8,515 | -- | 25,459 | -- | ||
| Eliminations | (525) | -- | (1,082) | -- | ||
| Revenue | $60,122 | $57,317 | $233,418 | $246,558 | ||
| Income/(loss) before income taxes | ||||||
| Brokerage Services | $23,286 | $29,105 | $96,287 | $141,323 | ||
| Education | (788) | -- | (2,081) | -- | ||
| Income before income taxes | $22,498 | $29,105 | $94,206 | $141,323 | ||