RYE BROOK, N.Y., July 20, 2001 (PRIMEZONE) -- Hoenig Group Inc. (Nasdaq:HOEN) today reported financial results for the three- and six-month periods ended June 30, 2001.
Three Months Ended June 30, 2001
The Company's basic earnings per share for the second quarter ended June 30, 2001, decreased to $0.27, as compared to $0.29 for the same period in 2000. Diluted earnings per share decreased to $0.24, as compared to $0.27 in the second quarter 2000. Net income for the second quarter decreased 10.4% to $2.1 million from $2.4 million for the same period in 2000.
Operating revenues for the quarter ended June 30, 2001 increased 5.0% to $25.5 million, as compared to $24.3 million for the same period in 2000. Global brokerage revenues for the quarter increased 11.3% to $23.5 million from $21.1 million during the same period last year, based on a 14.6% increase in domestic brokerage revenues to $20.4 million. International brokerage revenues for the second quarter 2001 decreased 6.9% to $3.1 million from $3.3 million for the same period in 2000. Investment management fees decreased 37.2% in the second quarter 2001 to $2.0 million, as compared to $3.2 million for the same period in 2000.
Operating income for the second quarter 2001 increased 9.1% to $2.2 million from $2.0 million for the same period in 2000. Included in operating income for the three months ended June 30, 2000 is a $1.0 million one-time charge related to the closing of the Company's Tokyo brokerage office.
Net investment income was $1.4 million in the second quarter 2001, as compared to $1.5 million during the same period in 2000. Net investment income for the second quarter 2001 includes unrealized gains of $0.8 million relating to the Company's ownership of publicly traded shares of the Hong Kong Exchanges and Clearing Limited and of the London Stock Exchange. The Company values these shares at market. The Company received the Hong Kong shares in the second quarter 2000 in connection with its ownership of a seat on The Stock Exchange of Hong Kong. Investment income for the second quarter 2000 includes $0.8 million pre-tax in realized and unrealized gains on the Hong Kong shares. The Company received the London shares during the third quarter 2000 in connection with its ownership of a seat on the London Stock Exchange.
Six Months Ended June 30, 2001
The Company's basic earnings per share for the six months ended June 30, 2001, increased 3.9% to $0.53 from $0.51 for the same period in 2000, and diluted earnings per share remained at $0.46 for the first six months 2001 and 2000, excluding the impairment write-off of one of the Company's investments taken during the first quarter 2001. Due to the impairment write-off, the Company incurred a net loss per share of $0.17 both basic and diluted for the six months ended June 30, 2001.
Operating revenues for the six months ended June 30, 2001 decreased 1.8% to $50.0 million, as compared to $50.9 million for the same period in 2000. Global brokerage revenues increased 3.0% to $45.9 million from $44.6 million during the first six months of 2000. The Company's domestic brokerage revenues for the first six months 2001 increased 9.4% to $40.2 million, as compared to $36.7 million during the same period in 2000. However, this increase was more than offset by a decrease of 26.8% in international brokerage revenues resulting from difficult global market conditions. Investment management fees for the six months ended June 30, 2001 decreased 35.8% to $4.0 million, as compared to $6.3 million for the same period in 2000.
Operating income for the six months ended June 30, 2001 decreased 16.5% to $3.8 million, as compared to $4.5 million during the same period in 2000. Included in operating income for the six months ended June 30, 2000, is a $1.0 million one-time charge related to the closing of the Company's Tokyo brokerage office. The decrease in operating income is primarily attributable to declines in operating income from the Company's asset management operations and the Company's international brokerage operations, which more than offset continued increases in operating income of the Company's domestic brokerage operations. Operating income of the Company's domestic brokerage operations increased 1.7% to $5.1 million during the six months ended June 30, 2001, as compared to $5.0 million for the same period in 2000.
The Company had a net investment loss of $6.2 million for the six months ended June 30, 2001, as compared to net investment income of $2.0 million during the same period in 2000 due to the first quarter pre-tax write-off of $9.2 million relating to the Company's investment in InstiPro Group, Inc. Net investment income before the write-off was $3.1 million during the six months ended June 30, 2001, which represents a 50.9% increase from the same period in 2000. Net investment income for first six months 2001 includes $1.5 million related to the appreciation of market value of the Company's Hong Kong and London shares and the realized gains on such shares sold during the period. Net investment income for the first six months 2000 includes $0.8 million related to the Hong Kong shares.
The Company incurred a net loss for the six months ended June 30, 2001 of ($1.3) million, as compared to net income of $4.2 million for the same period in 2000, due to the $5.5 million after tax write-off of the InstiPro Group, Inc. investment. Net income for the six months ended June 30, 2001 before the write-off was $4.2 million, representing a 1.1% decrease from the same period in 2000.
At June 30, 2001, the Company had cash, U.S. government obligations, net accounts receivables and other investments of $56.8 million, as compared to $51.0 million as of June 30, 2000, and $52.3 million as of March 31, 2001.
For more than 30 years, Hoenig Group Inc. has provided high quality trade execution, independent research and premier client service to professional money managers and alternative investment funds throughout the world. Hoenig Group Inc. operates through its brokerage subsidiaries in the United States, United Kingdom and Hong Kong. Hoenig Group's U.S. asset management subsidiary, Axe-Houghton Associates, Inc., provides investment management services to public and corporate employee benefit plans, investment partnerships and other institutional investors.
This press release contains forward-looking statements that relate to future plans, events and performance. These forward-looking statements involve risks and uncertainties. These risks and uncertainties are set forth in the Company's periodic reports and other filings with the Securities and Exchange Commission. Forward-looking statements reflect the Company's current views with respect to future events. Actual events and results may vary materially and adversely from those anticipated, believed, estimated or otherwise indicated.
Financial Data Three Months Ended June 30,
2001 2000
----------- -----------
Operating Revenues $25,471,970 $24,265,682
Operating Income 2,170,217
1,989,346(a)
Net Investment Income
and other (b) 1,360,225 1,464,857
Income before Income Taxes 3,530,442 3,454,203
Net Income 2,149,912 2,400,602
Earnings Per Share
Basic .27 .29
Diluted .24 .27
Weighted average
shares - Basic 7,903,829 8,166,039
Weighted average
shares - Diluted 8,958,772 9,027,982
(a) Includes a $1.0 million ($0.6 million after tax) one-time charge related to the closing of the Company's Tokyo brokerage office.
(b) For the three months ended June 30, 2001, includes net investment income of $0.8 million related to the ownership of publicly traded shares of the Hong Kong Exchanges and Clearing Limited and of the London Stock Exchange. For the three months ended June 30, 2000, includes investment income of $0.8 million related to the receipt of the Hong Kong shares in June 2000.
Financial Data Six Months Ended June 30,
2001
2001 Adjusted(a) 2000
---- -------- ----
Operating Revenues $49,971,162 $49,971,162 $50,880,226
Operating Income
3,787,574 3,787,574 4,538,094(b)
Net Investment (Loss)
Income and Other(c) (6,231,809) 3,060,598 2,028,282
(Loss) Income before
Income Taxes
(2,444,235) 6,848,172 6,566,376
Net (Loss) Income
(1,321,317) 4,158,683 4,204,775
(Loss) Earnings
Per Share(d)
Basic (.17) .53 .51
Diluted (.17) .46 .46
Weighted average
shares - Basic 7,905,304 7,905,304 8,170,290
Weighted average
shares - Diluted 7,905,304 8,978,699 9,050,168
(a) Represents financial results for the six months ended June 30, 2001 excluding the $9.2 million ($5.5 million after tax) impairment write-off of the Company's investment in InstiPro Group, Inc.
(b) Included in the financial results for the six months ended June 30, 2000 is a $1.0 million ($0.6 million after tax) one-time charge related to the closing of the Company's Tokyo brokerage office.
(c) For the six months ended June 30, 2000, includes investment income of $0.8 million related to the receipt of the Hong Kong shares in June 2000. For the six months ended June 30, 2001, includes realized and unrealized gains of $1.5 million related to the investment in the Hong Kong and London shares.
(d) In computing per share amounts under a net loss, common stock equivalents are not included in the calculation as it would result in anti-dilution.