CHICAGO, July 27, 2010 (GLOBE NEWSWIRE) -- optionsXpress Holdings, Inc. (Nasdaq:OXPS) today reported results for the three months ended June 30, 2010. Highlights from the second quarter 2010 included:
- Revenues of $65.5 million, a 6% increase year-over-year
- Net income of $15.6 million, $0.27 per diluted share
- Daily average revenue trades (DARTs) of 49,800, a 10% increase year-over-year
- Net new account growth of 7,800 during the quarter, resulting in 365,500 customer accounts, an 8% increase year-over-year
- Ending customer assets of $7.0 billion, a 22% increase year-over-year
"Improved customer engagement in April and volatility-driven trading in May drove our second quarter earnings 20% higher than the first quarter, excluding a gain resulting from the Chicago Board Options Exchange (CBOE) initial public offering," remarked David Fisher, Chief Executive Officer of optionsXpress. "Our powerful, innovative platform and exceptional customer experience continue to attract new customers despite the challenging economic backdrop and declining market indices weighing on the average retail investor. As evidence, we opened our highest number of net new accounts since the second quarter of last year and our customer asset growth exceeded broader market index performance in both the quarter and year-to-date."
For the second quarter, total DARTs were 49,800, a 10% increase from 45,100 during the second quarter of 2009, and up 12% from 44,600 for the first quarter of 2010. Retail DARTs were 32,700 during the second quarter, down 2% from the second quarter of 2009, and up 8% compared to the first quarter. Institutional DARTs were 17,100 during the second quarter, up 44% from the second quarter of 2009, and up 20% from the first quarter.
Total net revenues increased 6% over the second quarter of 2009 and increased 15% when compared to the first quarter of 2010. Resulting net income was $15.6 million, or $0.27 per diluted share, a 3% decrease from the $16.1 million reported in the second quarter of 2009 and a 31% increase when compared to the first quarter of 2010. Second quarter results include approximately $2.2 million in gains and dividends resulting from the CBOE Holdings, Inc. initial public offering. The company owned one seat at the CBOE, for which the company received shares of equity in CBOE Holdings, Inc. at the time of the offering.
"We saw stronger activity throughout our customer base in the second quarter as market activity improved. The increased trading early in the quarter reflected higher customer engagement that tends to develop with more encouraging overall market conditions," commented Adam DeWitt, Chief Financial Officer of optionsXpress. "The higher level of trading also demonstrates the operating leverage in our business as earnings were up 20% sequentially while revenues were only up 11% (both figures before CBOE-related gains)."
Outlook
Mr. Fisher concluded, "Although economic uncertainty is generating short-term headwinds, our ability to grow our customer base and generate healthy profitability under these difficult market conditions speaks to the appeal of our product offering and the quality of the optionsXpress customer experience. Our efficient operating model positions optionsXpress to benefit substantially from a rebound in trading activity and interest rates while the strength of our balance sheet gives us a strong foundation for future earnings growth.
Conference Call
A conference call will be broadcast live on Tuesday, July 27, 2010, at 9:00 a.m. Central Time (10:00 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=7487
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 | ||||
| June 30, | June 30, | Change | ||
| 2010 | 2009 | $ | % | |
| Revenues: | ||||
| Commissions | $44,713 | $42,008 | $2,705 | 6% |
| Other brokerage-related revenue | 5,243 | 7,108 | (1,865) | (26%) |
| Interest revenue and fees | 4,826 | 4,489 | 337 | 8% |
| Interest expense | (56) | (61) | 5 | (8%) |
| Net interest revenue and fees | 4,770 | 4,428 | 342 | 8% |
| Education revenues | 7,707 | 7,234 | 473 | 7% |
| Other income | 3,067 | 937 | 2,130 | 227% |
| Net revenues | $65,500 | $61,715 | $3,785 | 6% |
| Expenses: | ||||
| Compensation and benefits | $11,854 | $10,434 | $1,420 | 14% |
| Brokerage, clearing and other related expenses | 10,250 | 8,047 | 2,203 | 27% |
| Brokerage advertising | 5,747 | 5,005 | 742 | 15% |
| Education marketing and fulfillment | 4,986 | 4,792 | 194 | 4% |
| Depreciation and amortization | 2,277 | 2,298 | (21) | (1%) |
| Other general and administrative | 5,794 | 5,901 | (107) | (2%) |
| Total expenses | $40,908 | $36,477 | $4,431 | 12% |
| Income before income taxes | 24,592 | 25,238 | (646) | (3%) |
| Income taxes | 9,005 | 9,165 | (160) | (2%) |
| Net income | $15,587 | $16,073 | ($486) | (3%) |
| Basic earnings per share | $0.27 | $0.28 | ($0.01) | (4%) |
| Diluted earnings per share | $0.27 | $0.28 | ($0.01) | (4%) |
| Weighted average shares outstanding - basic | 57,403 | 57,832 | (429) | (1%) |
| Weighted average shares outstanding - diluted | 57,611 | 57,988 | (377) | (1%) |
| Six Months Ended | ||||
| June 30, | June 30, | Change | ||
| 2010 | 2009 | $ | % | |
| Revenues: | ||||
| Commissions | $84,311 | $80,097 | $4,214 | 5% |
| Other brokerage-related revenue | 9,741 | 13,405 | (3,664) | (27%) |
| Interest revenue and fees | 9,593 | 8,869 | 724 | 8% |
| Interest expense | (107) | (123) | 16 | (13%) |
| Net interest revenue and fees | 9,486 | 8,746 | 740 | 8% |
| Education revenues | 15,237 | 7,234 | 8,003 | 111% |
| Other income | 3,756 | 1,527 | 2,229 | 146% |
| Net revenues | $122,531 | $111,009 | $11,522 | 10% |
| Expenses: | ||||
| Compensation and benefits | $23,502 | $18,808 | $4,694 | 25% |
| Brokerage, clearing and other related expenses | 19,268 | 15,237 | 4,031 | 26% |
| Brokerage advertising | 10,116 | 10,794 | (678) | (6%) |
| Education marketing and fulfillment | 10,281 | 4,792 | 5,489 | 115% |
| Depreciation and amortization | 4,568 | 4,290 | 278 | 6% |
| Other general and administrative | 11,370 | 10,655 | 715 | 7% |
| Total expenses | $79,105 | $64,576 | $14,529 | 22% |
| Income before income taxes | 43,426 | 46,433 | (3,007) | (6%) |
| Income taxes | 15,951 | 16,804 | (853) | (5%) |
| Net income | $27,475 | $29,629 | ($2,154) | (7%) |
| Basic earnings per share | $0.48 | $0.51 | ($0.03) | (6%) |
| Diluted earnings per share | $0.48 | $0.51 | ($0.03) | (6%) |
| Weighted average shares outstanding - basic | 57,434 | 58,146 | (712) | (1%) |
| Weighted average shares outstanding - diluted | 57,643 | 58,266 | (623) | (1%) |
| optionsXpress Holdings, Inc. | |||||
| Consolidated Balance Sheets | |||||
| In thousands | |||||
| (Unaudited) | |||||
| Period Ended | |||||
| June 30, | December 31, | Change | |||
| 2010 | 2009 | $ | % | ||
| Assets: | |||||
| Cash and cash equivalents | $174,699 | $178,989 | ($4,290) | (2%) | |
|
Cash and investments segregated in compliance with federal regulations |
891,244 | 881,210 | 10,034 | 1% | |
| Receivables from brokerage customers, net | 195,406 | 149,871 | 45,535 | 30% | |
|
Receivables from brokers, dealers and clearing organizations |
44,348 | 110,779 | (66,431) | (60%) | |
| Investments in securities | 19,290 | 70,850 | (51,560) | (73%) | |
| Deposits with clearing organizations | 20,037 | 30,245 | (10,208) | (34%) | |
| Fixed assets, net | 12,539 | 13,263 | (724) | (5%) | |
| Goodwill | 85,474 | 81,590 | 3,884 | 5% | |
| Other intangible assets, net | 5,594 | 6,525 | (931) | (14%) | |
| Other assets | 29,249 | 22,999 | 6,250 | 27% | |
| Total assets | $1,477,880 | $1,546,321 | ($68,441) | (4%) | |
| Liabilities and stockholders' equity: | |||||
| Liabilities | |||||
| Payables to brokerage customers | $1,074,949 | $1,179,204 | ($104,255) | (9%) | |
|
Payables to brokers, dealers and clearing organizations |
4,964 | 144 | 4,820 | 3347% | |
| Accrued liabilities and accounts payable | 23,729 | 19,027 | 4,702 | 25% | |
| Current and deferred income taxes | 28 | 193 | (165) | (85%) | |
| Other liabilities | 36,370 | 36,878 | (508) | (1%) | |
| Total liabilities | 1,140,040 | 1,235,446 | (95,406) | (8%) | |
| Stockholders' equity | 337,840 | 310,875 | 26,965 | 9% | |
| Total liabilities and stockholders' equity | $1,477,880 | $1,546,321 | ($68,441) | (4%) | |
| optionsXpress Holdings, Inc. | ||||
| Statistical Operating Data | ||||
| Three Months Ended | ||||
| June 30, | June 30, | Change | ||
| 2010 | 2009 | $ or # | % | |
| Number of customer accounts (at period end)(1) | 365,500 | 337,300 | 28,200 | 8% |
| Daily average revenue trades (''DARTs'') (2) | ||||
| Retail DARTs | 32,700 | 33,200 | (500) | (2%) |
| Institutional DARTs | 17,100 | 11,900 | 5,200 | 44% |
| Total DARTs | 49,800 | 45,100 | 4,700 | 10% |
| Customer trades per account (3) | 35 | 34 | 1 | 3% |
| Average commission per trade | $14.26 | $14.78 | ($0.52) | (4%) |
| Option trades as a % of total trades | 40% | 42% | (2%) | |
| Brokerage advertising expense per net new customer account (4) | $737 | $556 | $181 | 33% |
| Total client assets (000s) | $7,030,199 | $5,749,031 | $1,281,168 | 22% |
| Client margin balances (000s) | $204,194 | $122,770 | $81,424 | 66% |
| Six Months Ended | ||||
| June 30, | June 30, | Change | ||
| 2010 | 2009 | $ or # | % | |
| Number of customer accounts (at period end)(1) | 365,500 | 337,300 | 28,200 | 8% |
| Daily average revenue trades (''DARTs'') (2) | ||||
| Retail DARTs | 31,500 | 32,500 | (1,000) | (3%) |
| Institutional DARTs | 15,700 | 13,500 | 2,200 | 16% |
| Total DARTs | 47,200 | 46,000 | 1,200 | 3% |
| Customer trades per account (3) | 33 | 34 | (1) | (3%) |
| Average commission per trade | $14.40 | $14.06 | $0.34 | 2% |
| Option trades as a % of total trades | 41% | 40% | 1% | |
| Brokerage advertising expense per net new customer account (4) | $707 | $577 | $130 | 23% |
| Total client assets (000s) | $7,030,199 | $5,749,031 | $1,281,168 | 22% |
| Client margin balances (000s) | $204,194 | $122,770 | $81,424 | 66% |
| (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 | ||||
| Three Months Ended | Six Months Ended | |||
|
June 30, 2010 |
June 30, 2009 |
June 30, 2010 |
June 30, 2009 |
|
| Revenue | ||||
| Brokerage Services | $57,797 | $54,477 | $107,288 | $103,771 |
| Education | 8,186 | 7,304 | 16,200 | 7,304 |
| Eliminations | (483) | (66) | (957) | (66) |
| Revenue | $65,500 | $61,715 | $122,531 | $111,009 |
| Income/(loss) before income taxes | ||||
| Brokerage Services | $25,637 | $25,514 | $45,973 | $46,709 |
| Education | (1,045) | (276) | (2,547) | (276) |
| Income before income taxes | $24,592 | $25,238 | $43,426 | $46,433 |