KANSAS CITY, Mo., April 10, 2008 (PRIME NEWSWIRE) -- FCStone Group, Inc. (Nasdaq:FCSX), a commodity risk management firm, today announced record quarterly revenues and net income from continuing operations for its second fiscal quarter ending February 29, 2008.
Second Quarter Results
Revenues, net of cost of commodities sold, a non-GAAP financial measure, were $91.2 million in the three months ended February 29, 2008, compared to $60.1 million in the prior year quarter, an increase of 52%. Net income increased to $12.1 million, or $0.42 per diluted share, for the second quarter, compared to $6.9 million, or $0.32 per diluted share, in the prior year quarter.
Net income from continuing operations increased to $17.8 million, or $0.61 per diluted share for the second quarter, compared to $7.0 million, or $0.32 per diluted share, in the prior year quarter.
The following table presents results on a total and per share basis.
Financial Highlights
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
---------------------- ----------------------
Feb. 28, Feb. 29, Feb. 28, Feb. 29,
2007 2008 2007 2008
---------- ---------- ---------- ----------
NON GAAP-Revenues,
net of cost of
commodities sold(1) $ 60,157 $ 91,212 $ 117,534 $ 164,846
Income from continuing
operations before
income tax expense(1) $ 11,104 $ 28,489 $ 21,247 $ 49,570
Net income from
continuing
operations(2) $ 6,979 $ 17,789 $ 13,322 $ 30,920
Loss from discontinued
operations, net of
tax $ 59 $ 5,673 $ 88 $ 5,719
Net income(2) $ 6,920 $ 12,116 $ 13,234 $ 25,201
Diluted weighted
average shares
outstanding(1) 21,800 29,104 21,800 28,940
Diluted earnings per
share, continuing
operations $ 0.32 $ 0.61 $ 0.61 $ 1.07
Diluted earnings
(loss) per share,
discontinued
operations -- (0.19) -- (0.20)
Diluted earnings per
share $ 0.32 $ 0.42 $ 0.61 $ 0.87
(1) Amounts for the six months ended February 29, 2008 include a net
amount of $2.9 million for special or one-time items, which
include a $0.5 million gain on the sale of Chicago Board Option
Exchange (CBOE) trading rights and a $2.4 million gain on the
sale of CME common stock.
(2) Amounts for the six months ended February 29, 2008 include after
tax effect of the items noted in (1) above of approximately
$1.8 million.
The increase in second quarter revenues, net of cost of commodities sold, from the prior year second quarter, was driven by significantly higher exchange traded and over-the-counter (OTC) volumes. This growth was primarily related to continued volatility in the grain, energy, metals, and soft commodity markets and higher OTC volumes from our energy, renewable fuels and Brazilian customers. Additionally, these volumes along with increased margin requirements have driven higher interest income from additional investable segregated and OTC customer margin funds.
Costs and expenses, exclusive of cost of commodities sold, were higher compared to the prior year primarily due to higher volume-related costs of broker commissions and pit brokerage and clearing fees.
During the three months ended February 29, 2008, the Company undertook extensive engineering design and production tests related to the manufacturing of biodiesel at Green Diesel's developmental stage plant in Houston, Texas. Based on the testing results, current industry economic conditions and additional capital required to complete the project, it was decided to cease construction and development of the bio-diesel facility and pursue an immediate sale of the plant assets and inventory. In connection with the plan of disposal, it was determined that the carrying value of the underlying plant asset exceeded its fair value. Consequently, an impairment loss of $10.8 million was recorded, of which $2.2 million was allocated to the unaffiliated third party minority interest holder. The impairment loss is included in loss on discontinued operations, net of tax, reflected during the three months ended February 29, 2008.
"Despite a tough macroeconomic environment, FCStone continued along the path of steady revenue and earnings growth during our second fiscal quarter," said Pete Anderson, President and Chief Executive Officer of FCStone. "This growth across all market segments of the Company is being driven by unprecedented volatility in virtually every commodity and financial market around the world. During a period of tightening credit access, this has fostered an atmosphere which has increased the necessity to manage volatility through conservative risk management services, products, platforms and structures offered by FCStone."
Year-To-Date Results
Revenues, net of cost of commodities sold, a non-GAAP financial measure, were $164.8 million for the first six months of fiscal year 2008, compared to $117.5 million during the same period of fiscal year 2007, an increase of 40%. Net income increased 90% to $25.2 million for the first six months of fiscal year 2008, or $0.87 per diluted share, compared to $13.2 million, or $0.61 per diluted share during the same period of fiscal year 2007.
Net income from continuing operations increased to $30.9 million, or $1.07 per diluted share for the first six months of fiscal year 2008, compared to $13.3 million, or $0.61 per diluted share during the same period of fiscal year 2007.
"In addition to driving strong growth in our traditional market segments of agriculture and energy, FCStone continues to address new and developing products as well as additional industries that have growth potential," said Bill Dunaway, Chief Financial Officer. "We have created a new Cotton and Textile Division through the acquisition of Globecot, Inc. and The Jernigan Group, LLC. This is a highly complementary business which will provide expertise in the global cotton and textile segment for both current and potential FCStone customers around the world. This deal, along with the recently completed Downes O'Neill LLC acquisition, exemplifies a continued commitment to our stated acquisition growth strategy."
Operating Segments
FCStone's income (loss) from continuing operations before minority interest and income tax expense by segment and certain other data are outlined below for the periods noted.
Three Months Ended Six Months Ended
---------------------- ----------------------
Feb. 28, Feb. 29, Feb. 28, Feb. 29,
2007 2008 2007 2008
---------- ---------- ---------- ----------
Segment Data: ($ in thousands)
Income (loss) from
continuing
operations before
minority interest
and income tax
expense:
Commodity and Risk
Management
Services(1) $ 9,153 $ 21,764 $ 16,717 $ 38,927
Clearing and
Execution Services 3,431 8,656 7,040 13,812
Financial Services 419 471 447 527
Grain Merchandising 340 -- 1,460 --
Corporate (2,137) (2,402) (3,979) (3,696)
---------- ---------- ---------- ----------
$ 11,206 $ 28,489 $ 21,685 $ 49,570
========== ========== ========== ==========
Other Data:
EBITDA(1) $ 15,798 $ 30,674 $ 28,616 $ 53,312
Exchange contract
trading volume (in
millions) 12.9 27.2 26.3 50.5
Customer Segregated
Assets, end of
period $ 861,780 $1,452,861 $ 861,780 $1,452,861
(1) Amounts for the six months ended February 29, 2008 include the
special or one-time items of a $2.4 million gain from the sale
of CME stock and a $0.5 million gain on the sale of CBOE trading
rights included in the Commodity and Risk Management Services
segment.
In the Commodity and Risk Management Services segment, revenues, net of cost of commodities sold, were $46.5 million in the second quarter ended February 29, 2008, compared to $27.3 million in the prior year quarter, an increase of 70%. Segment income before minority interest and income tax for the second quarter 2008 increased to $21.8 million, compared to $9.2 million in the prior year quarter.
For the Clearing and Execution Services segment, revenues, net of cost of commodities sold, were $40.9 million in the second quarter ended February 29, 2008, compared to $24.3 million in the prior year quarter, an increase of 69%. The segment made $8.7 million in the second quarter, compared to a net income of $3.4 million in the prior year quarter.
The Financial Services segment reported revenues, net of cost of commodities sold, of $3.5 million in the second quarter ended February 29, 2008, compared to $3.4 million in the prior year quarter, an increase of 3%. Segment income increased to $471 thousand for the second quarter, compared to $419 thousand in the prior year quarter.
As previously announced on June 1, 2007, the Company sold a portion of its stake in the Grain Merchandising segment business and retains a 25% minority interest in this business instead of the previous 70% majority interest. Therefore, such business is no longer consolidated in our financial statements. Our 25% share of FGDI's income is accounted for under the equity method, and included in the Corporate and Other segment and amounted to $0.6 million for the three months ended February 29, 2008 and $1.9 million for the six months ended February 29, 2008.
Business Outlook
Commenting on the Company's year to date results and expectations, Anderson said, "FCStone historically has prided itself in being an innovator in the risk management industry, making substantial investments to develop specific programs, products and market segments for the benefit of our clientele and the Company. The most recent example of this innovation is our direct investment in Agora-X, in which we are partnering with NASDAQ to create a new electronic communications platform to provide liquidity, transparency and trading efficiency for FCStone, our clients, and other qualified institutional participants. We believe that this traditional commitment to our clients' best interest, combined with the strength of the FCStone consultants' experience and expertise, our alternative platforms to manage our clients' risk, and the unprecedented volatility in the agriculture and energy markets will continue to drive the growth and development of FCStone."
Conference Call & Web Cast
A conference call will be held today, Thursday, April 10, 2008 at 11:00 a.m. (ET). A live web cast of the conference call as well as a replay will be available online on the Company's corporate web site at http://www.fcstone.com. Participants can also access the call by dialing 800-257-7087 (within the United States and Canada), or 303-262-2053 (international callers). A replay of the call will be available approximately two hours after the call has ended and will be available until 11:59 p.m. (CT) on Monday, April 28, 2008. To access the replay, dial 800-405-2236 (within the United States and Canada), or 303-590-3000 (international callers) and enter the conference ID number: 11111811#.
About FCStone Group, Inc.
FCStone Group, Inc., along with its affiliates, is an integrated commodity risk management company providing risk management consulting and transaction execution services to commercial commodity intermediaries, end-users and producers. The firm assists primarily middle market customers in optimizing their profit margins and mitigating exposure to commodity price risk. In addition to risk management consulting services, FCStone, LLC, operates one of the leading independent clearing and execution platforms for exchange-traded futures and options contracts. FCStone Group, Inc., serves more than 7,500 customers and in the 12 months ended February 29, 2008, executed 86.3 million derivative contracts in the exchange-traded and over-the-counter markets. The FCStone Group companies work in all the major commodity areas including agriculture, energy, renewable fuels, foods, forestry, cotton and textile, dairy and currency exchange. Headquartered in the Midwest, it has offices located throughout the world and is a clearing member of all major North American Futures exchanges. FCStone Group, Inc., trades on the NASDAQ Global Select Market under the symbol "FCSX."
Forward-Looking Statements
This press release may include forward-looking statements regarding, among other things, our plans, strategies and prospects, both business and financial. All statements other than statements of current or historical fact contained in this press release are forward-looking statements. The words "believe," "expect," "anticipate," "should," "plan," "will," "may," "could," "intend," "estimate," "predict," "potential," "continue" or the negative of these terms and similar expressions, as they relate to FCStone Group, Inc., are intended to identify forward-looking statements.
We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. They can be affected by inaccurate assumptions, including the risks, uncertainties and assumptions described in the Company's filings with the Securities and Exchange Commission. In light of these risks, uncertainties and assumptions, the forward-looking statements in this press release may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. When you consider these forward-looking statements, you should keep in mind these risk factors and other cautionary statements in this press release.
Our forward-looking statements speak only as of the date of this press release. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Use of NON-GAAP Financial Information
In this press release we disclose "revenues, net of cost of commodities sold", and "EBITDA", both of which are non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure, calculated and prepared in accordance with generally accepted accounting principles in the United Sates (GAAP). Revenues, net of cost of commodities sold, is not a substitute for the GAAP measure of total revenues. EBITDA is not a substitute for the GAAP measure of net income or cash flows. Such non-GAAP financial measures are reconciled to its closest GAAP measure, in accordance with the Securities and Exchange Commission rules, and are included in the attached supplemental data. Management believes that these non-GAAP financial measures are useful to both management and its stockholders in their analysis of the company's business and operating performance.
FCSTONE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
---------------------- ----------------------
Feb. 28, Feb. 29, Feb. 28, Feb. 29,
2007 2008 2007 2008
---------- ---------- ---------- ----------
Revenues:
Commissions and
clearing fees $ 33,353 $ 46,068 $ 66,256 $ 85,450
Service, consulting
and brokerage fees 9,314 23,728 18,409 40,002
Interest 10,729 18,858 19,127 32,239
Other 1,013 2,038 1,534 6,635
Sales of
commodities(1) 349,098 1,350 797,886 1,350
---------- ---------- ---------- ----------
Total revenues 403,507 92,042 903,212 165,676
---------- ---------- ---------- ----------
Costs and expenses:
Cost of commodities
sold 343,350 830 785,678 830
Employee
compensation and
broker commissions 11,364 15,197 23,155 28,444
Pit brokerage and
clearing fees 14,678 25,392 29,542 46,177
Introducing broker
commissions 9,007 8,747 16,376 16,075
Employee benefits
and payroll taxes 2,722 2,913 5,369 5,930
Interest 4,251 1,809 6,490 3,010
Depreciation 443 376 879 732
Bad debt expense 120 109 1,540 184
Other expenses 6,366 8,180 12,498 14,724
---------- ---------- ---------- ----------
Total costs and
expenses 392,301 63,553 881,527 116,106
---------- ---------- ---------- ----------
Income from continuing
operations before
income tax expense
and minority interest 11,206 28,489 21,685 49,570
Minority interest 102 -- 438 --
---------- ---------- ---------- ----------
Income from continuing
operations before
income tax expense 11,104 28,489 21,247 49,570
Income tax expense 4,125 10,700 7,925 18,650
---------- ---------- ---------- ----------
Net income from
continuing operations 6,979 17,789 13,322 30,920
Loss from discontinued
operations, net of tax 59 5,673 88 5,719
---------- ---------- ---------- ----------
Net income $ 6,920 $ 12,116 $ 13,234 $ 25,201
========== ========== ========== ==========
Basic shares
outstanding 21,800 27,709 21,800 27,565
Diluted shares
outstanding 21,800 29,104 21,800 28,940
Basic earnings (loss)
per share:
Continuing
operations $ 0.32 $ 0.64 $ 0.61 $ 1.12
Discontinued
operations -- (0.20) -- (0.21)
---------- ---------- ---------- ----------
Net income $ 0.32 $ 0.44 $ 0.61 $ 0.91
========== ========== ========== ==========
Diluted earnings
(loss) per share:
Continuing
operations $ 0.32 $ 0.61 $ 0.61 $ 1.07
Discontinued
operations -- (0.19) -- (0.20)
---------- ---------- ---------- ----------
Net income $ 0.32 $ 0.42 $ 0.61 $ 0.87
========== ========== ========== ==========
(1) On June 1, 2007 the Company sold a majority interest in FGDI,
LLC, which represented our entire Grain Merchandising segment.
Subsequent to such sale, the company retained a 25% interest in
FGDI, LLC which is now accounted for on the equity method and
included in other revenues. In the six months ended February
28, 2007, sales of commodities, included $779.2 million from
FGDI, LLC.
FCSTONE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except share amounts)
Aug. 31, Feb. 29,
2007 2008
---------- ----------
(Unaudited)
ASSETS
Cash and cash equivalents:
Unrestricted $ 90,053 $ 60,774
Segregated 14,250 56,109
Commodity deposits and receivables:
Commodity exchanges and clearing
organizations -- customer segregated 686,441 1,198,933
Proprietary commodity accounts 77,690 159,013
Receivables from customers, net of
allowance for doubtful accounts 16,868 26,396
---------- ----------
Total commodity deposits and receivables 780,999 1,384,342
---------- ----------
Marketable securities, at fair value --
customer segregated and other 307,828 265,931
Counterparty deposits and trade accounts
receivable, net of allowance for doubtful
accounts 20,746 83,886
Open contracts receivable 120,219 393,375
Notes receivable and advances 49,291 149,698
Exchange memberships and stock 10,366 7,410
Plant, equipment, furniture, software and
improvements, net of accumulated depreciation 4,763 6,819
Assets held for sale -- 7,836
Other assets 21,679 41,749
---------- ----------
Total assets $1,420,194 $2,457,929
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Commodity and customer regulated accounts
payable $ 935,515 $1,412,721
Trade accounts payable and advances 115,145 255,921
Open contracts payable 121,101 396,686
Accrued expenses 38,632 44,085
Notes payable and repurchase obligations 35,133 142,173
Subordinated debt 1,000 1,000
---------- ----------
Total liabilities 1,246,526 2,252,586
---------- ----------
Minority interest -- --
Stockholders' equity:
Common stock, $0.0001 par value, authorized
40,000,000 at August 31, 2007 and
February 29, 2008, respectively; issued and
outstanding 27,416,567 and 27,792,140 shares
at August 31, 2007 and February 29, 2008,
respectively 104,267 106,332
Additional paid-in capital 1,115 7,249
Treasury stock (376) (387)
Accumulated other comprehensive loss (3,620) (5,042)
Retained earnings 72,282 97,191
---------- ----------
Total stockholders' equity 173,668 205,343
---------- ----------
Commitments and contingencies
Total liabilities and stockholders'
equity $1,420,194 $2,457,929
========== ==========
FCSTONE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Six Months Ended
----------------------
Feb. 28, Feb. 29,
2007 2008
---------- ----------
Cash flows from operating activities:
Net income $ 13,234 $ 25,201
Plus: Loss from discontinued operations 88 5,719
---------- ----------
Income from continuing operations 13,322 30,920
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation 879 732
Amortization of discount on note
receivable (28) (9)
Loss on cancellation of warrants -- 110
Gain on sale of exchange memberships and
stock (100) (2,930)
Gain on sale of other assets -- (520)
Stock compensation -- 753
Equity in earnings of affiliates, net of
distributions 45 (1,398)
Minority interest 438 --
Excess tax benefit of stock option
exercises -- (5,381)
Change in commodity accounts receivable/
payable, marketable securities and
customer segregated funds, net 6,231 (126,099)
Change in open contracts receivable/
payable, net (43,513) 2,429
(Increase) decrease in trade accounts
receivable and advances on grain (3,028) 525
Increase in counterparty deposits and
accounts receivable (9,875) (63,665)
Increase in other assets (32,452) (7,511)
(Decrease) increase in trade accounts
payable and advances (10,722) 141,196
(Decrease) increase in accrued expenses (2,522) 7,753
---------- ----------
Net cash used in operating activities $ (81,325) (23,095)
---------- ----------
Cash flows from investing activities:
Additions to furniture, equipment, software
and improvements (1,054) (2,788)
Acquisitions of businesses -- (6,725)
Issuance of notes receivable, net (79,760) (93,390)
Proceeds from the sale of exchange
memberships and stock 378 3,498
Purchase of exchange memberships and stock (1,430) --
Proceeds from the sale of other intangible
assets -- 1,350
Purchase of other intangible assets -- (1,049)
---------- ----------
Net cash used in investing activities (81,866) (99,104)
---------- ----------
Cash flows from financing activities:
Increase in checks written in excess of bank
balance (866) --
Proceeds from note payable, net 151,162 86,018
Proceeds from exercises of stock options -- 2,065
Excess tax benefit of stock option exercises -- 5,381
Treasury stock acquired -- (11)
Dividends paid (6,057) --
Payments under capital lease (275) --
Proceeds from subordinated debt 8,000 --
Monies released from escrow 2,526 --
Monies deposited in escrow (33) --
---------- ----------
Net cash provided by financing activities 154,457 93,453
---------- ----------
Cash flows used for discontinued operations:
Net cash from operating activities -- 1,178
Net cash used in investing activities -- (1,711)
Net cash provided by financing activities -- --
---------- ----------
Net cash used for discontinued operations -- (533)
---------- ----------
Net decrease in cash and cash equivalents -
unrestricted (8,734) (29,279)
Cash and cash equivalents - unrestricted -
beginning of period 59,726 90,053
---------- ----------
Cash and cash equivalents - unrestricted -
end of period $ 50,992 $ 60,774
========== ==========
Supplemental disclosures of cash flow
information:
Interest paid $ 5,473 $ 2,985
Income taxes paid $ 8,594 $ 13,614
========== ==========
Non-GAAP Financial Measures
The following table reconciles revenues, net of cost of commodities
sold, with our total revenues.
Three Months Ended Six Months Ended
---------------------- ----------------------
Feb. 28, Feb. 29, Feb. 28, Feb. 29,
2007 2008 2007 2008
---------- ---------- ---------- ----------
($ in thousands)
Revenues:
Commissions and
clearing fees $ 33,353 $ 46,068 $ 66,256 $ 85,450
Service, consulting
and brokerage fees 9,314 23,728 18,409 40,002
Interest 10,729 18,858 19,127 32,239
Other 1,013 2,038 1,534 6,635
Sales of
commodities 349,098 1,350 797,886 1,350
---------- ---------- ---------- ----------
Total revenues 403,507 92,042 903,212 165,676
Less: Cost of
commodities sold 343,350 830 785,678 830
---------- ---------- ---------- ----------
Revenues, net of cost
of commodities sold $ 60,157 $ 91,212 $ 117,534 $ 164,846
========== ========== ========== ==========
The following table reconciles EBITDA with our net income.
Three Months Ended Six Months Ended
---------------------- ----------------------
Feb. 28, Feb. 29, Feb. 28, Feb. 29,
2007 2008 2007 2008
---------- ---------- ---------- ----------
($ in thousands)
Net income: $ 6,920 $ 12,116 $ 13,234 $ 25,201
Plus: interest
expense 4,251 1,809 6,490 3,010
Plus: depreciation
and amortization 443 376 879 732
Plus: income tax
expense 4,125 10,700 7,925 18,650
Plus: loss on
discontinued
operations, net
of tax 59 5,673 88 5,719
---------- ---------- ---------- ----------
EBITDA $ 15,798 $ 30,674 $ 28,616 $ 53,312
========== ========== ========== ==========
Commodity and Risk Management Services Segment:
The following table provides the financial performance
for this segment.
Three Months Ended Six Months Ended
---------------------- ----------------------
Feb. 28, Feb. 29, Feb. 28, Feb. 29,
2007 2008 2007 2008
---------- ---------- ---------- ----------
($ in thousands)
Sales of commodities $ -- $ 1,350 $ 2,542 $ 1,350
Cost of commodities
sold -- 830 2,460 830
---------- ---------- ---------- ----------
Gross profit on
commodities sold -- 520 82 520
Commissions and
clearing fees 13,021 14,420 25,939 26,317
Service, consulting
and brokerage fees 9,458 23,857 18,675 40,207
Interest 4,742 7,532 8,388 13,648
Other revenues(1) 51 166 106 3,079
---------- ---------- ---------- ----------
Revenues, net of
cost of commodities
sold 27,272 46,495 53,190 83,771
Other costs and
expenses:
Expenses (excluding
interest expense) 18,051 24,677 36,276 44,787
Interest expense 68 54 197 57
---------- ---------- ---------- ----------
Total costs and
expenses (excluding
cost of commodities
sold) 18,119 24,731 36,473 44,844
---------- ---------- ---------- ----------
Segment income
before minority
interest
and income taxes(1) $ 9,153 $ 21,764 $ 16,717 $ 38,927
========== ========== ========== ==========
Exchange contract
trading volume
(millions) 0.6 0.9 1.5 1.6
OTC Contract volume 160,839 370,337 286,244 671,595
(1) Amounts for the six months ended February 29, 2008, includes $2.9
million from the combined gain on the sale of CME stock and CBOE
trading rights.
Clearing and Execution Segment:
The following table provides the financial performance
for this segment
Three Months Ended Six Months Ended
---------------------- ----------------------
Feb. 28, Feb. 29, Feb. 28, Feb. 29,
2007 2008 2007 2008
---------- ---------- ---------- ----------
($ in thousands)
Sales of commodities $ -- $ -- $ -- $ --
Cost of commodities
sold -- -- -- --
---------- ---------- ---------- ----------
Gross profit on
commodities sold -- -- -- --
Commissions and
clearing fees 20,509 31,984 40,699 59,652
Service, consulting
and brokerage fees -- -- -- --
Interest 3,654 8,964 7,485 14,334
Other revenues 100 -- 100 --
---------- ---------- ---------- ----------
Revenues, net of
cost of commodities
sold 24,263 40,948 48,284 73,986
Other costs and
expenses:
Expenses (excluding
interest expense) 20,506 32,272 40,780 60,133
Interest expense 326 20 464 41
---------- ---------- ---------- ----------
Total costs and
expenses (excluding
cost of commodities
sold) 20,832 32,292 41,244 60,174
---------- ---------- ---------- ----------
Segment income
before minority
interest and
income taxes $ 3,431 $ 8,656 $ 7,040 $ 13,812
========== ========== ========== ==========
Exchange contract
trading volume
(millions) 12.3 26.3 24.8 48.9
Financial Services Segment:
The following table provides the financial performance
for this segment.
Three Months Ended Six Months Ended
---------------------- ----------------------
Feb. 28, Feb. 29, Feb. 28, Feb. 29,
2007 2008 2007 2008
---------- ---------- ---------- ----------
($ in thousands)
Sales of commodities $ 9,599 $ -- $ 16,157 $ --
Cost of commodities
sold 9,539 -- 16,069 --
---------- ---------- ---------- ----------
Gross profit on
commodities sold 60 -- 88 --
Commissions and
clearing fees -- -- -- --
Service, consulting
and brokerage fees -- -- -- --
Interest 2,971 2,318 4,158 3,900
Other revenues 360 1,184 682 1,566
---------- ---------- ---------- ----------
Revenues, net of cost
of commodities sold 3,391 3,502 4,928 5,466
Other costs and
expenses:
Expenses (excluding
interest expense) 546 1,255 1,079 1,904
Interest expense 2,426 1,776 3,402 3,035
---------- ---------- ---------- ----------
Total costs and
expenses (excluding
cost of commodities
sold) 2,972 3,031 4,481 4,939
---------- ---------- ---------- ----------
Segment income (loss)
before minority
interest and income
taxes $ 419 $ 471 $ 447 $ 527
========== ========== ========== ==========
Grain Merchandising Segment:(1)
The following table provides the financial performance
for this segment.
Three Months Ended Six Months Ended
---------------------- ----------------------
Feb. 28, Feb. 29, Feb. 28, Feb. 29,
2007 2008 2007 2008
---------- ---------- ---------- ----------
($ in thousands)
Sales of commodities $ 339,499 $ -- $ 779,187 $ --
Cost of commodities
sold 333,950 -- 767,462 --
---------- ---------- ---------- ----------
Gross profit on
commodities sold 5,549 -- 11,725 --
Commissions and
clearing fees -- -- -- --
Service, consulting
and brokerage fees -- -- -- --
Interest 29 -- 64 --
Other revenues 467 -- 612 --
---------- ---------- ---------- ----------
Revenues, net of
cost of commodities
sold 6,045 -- 12,401 --
Other costs and
expenses:
Expenses (excluding
interest expense) 3,765 -- 7,795 --
Interest expense 1,940 -- 3,146 --
---------- ---------- ---------- ----------
Total costs and
expenses (excluding
cost of commodities
sold) 5,705 -- 10,941 --
---------- ---------- ---------- ----------
Segment income before
minority interest
and income taxes $ 340 $ -- $ 1,460 $ --
========== ========== ========== ==========
(1) On June 1, 2007 the Company sold a majority interest in FGDI,
LLC, which represented our entire Grain Merchandising segment.
Subsequent to such sale, the company retained a 25% interest in
FGDI, LLC which is now accounted for under the equity method and
included in the Corporate and Other segment.
Quarterly Financial Highlights:
The following table provides summary financial highlights
by quarter for fiscal year 2008.
Three Months Ended
----------------------
Nov. 30, Feb. 29,
2007 2008
---------- ----------
($ in thousands)
NON GAAP-Revenues,
net of cost of commodities sold $ 73,634 $ 91,212
Income from continuing operations
before income tax expense(1) $ 21,081 $ 28,489
Net income from continuing operations(1) $ 13,131 $ 17,789
Loss from discontinued operations, net of tax $ 46 $ 5,673
Net income(1) $ 13,085 $ 12,116
(1) The three months ended November 30, 2007 included a pre-tax gain
on the sale of CME stock of $2.4 million and a pre-tax gain of
$0.5 million on the sale of CBOE trading rights. Without these
items our first quarter income from continuing operations before
income tax expense would have been $18.2 million, net income from
continuing operations would have been $11.5 million and net
income would have been $11.4 million.