NEW YORK, Aug. 6, 2009 (GLOBE NEWSWIRE) -- NYFIX, Inc. (Nasdaq:NYFX) ("NYFIX" or the "Company"), a trusted provider of innovative solutions that optimize trading efficiency, today reported results for second quarter and first half 2009. Continued growth in order routing channels connected on the NYFIX Marketplace and a lower cost structure translated into improved results over second quarter and first half 2008.
Revenues were $26.6 million for second quarter 2009, compared to $28.6 million of revenues generated in second quarter 2008. Overall expenses declined 15% during second quarter 2009, compared to second quarter 2008. EBITDA was $(0.7) million for second quarter 2009 reflecting the impact of a lease restructuring charge of $(0.7) million and break-even EBITDA from other operations. EBITDA was $(4.2) million for second quarter 2008, reflecting the impact of integration costs of $(0.6) million, a restructuring charge for the discontinuation of the Fusion OMS business of $(0.4) million, $(0.1) million in costs related to historical stock options matters and $(3.1) million of EBITDA from other operations. On a GAAP basis, the Company's net loss narrowed to $(3.8) million compared to $(6.8) million for second quarter 2008.
Other positive developments during the second quarter included:
* a net increase of 115 billable order routing channels on the NYFIX Marketplace, bringing the total number to 9,910; * a 30% growth over first quarter 2009 in average daily matched value in Euro Millennium to EUR 81.1 million ($110.8 million); * a 3% increase in revenues on a sequential basis over first quarter 2009; and * the preservation of cash and cash equivalents, resulting in a balance of $51.7 million at both June 30, 2009 and March 31, 2009.
"We are pleased that strong sales during the second quarter for NYFIX Marketplace order routing channels were able to more than offset the cancellations that were brought about by the challenging market conditions," said Howard Edelstein, CEO of NYFIX. "I believe that our rightsizing effort and investment in product and infrastructure have made us a more efficient business and therefore better able to deal with these difficult macro market conditions that hopefully will return to normal in the not too distant future."
Three Month Results
Financial highlights for second quarter 2009 include:
* EBITDA of $(0.7) million compared to $(4.2) million for second quarter 2008; * a 7% decrease in total revenues to $26.6 million compared to $28.6 million for second quarter 2008; * a 9% increase in FIX Division net revenues to $18.1 million compared to $16.6 million for second quarter 2008; * a 30% decrease in Transaction Services Division net revenues to $7.6 million, including revenues of $1.2 million from Euro Millennium, compared to $10.8 million for second quarter 2008; * a 27% decrease in OMS Division net revenues to $0.8 million compared to $1.2 million for second quarter 2008; and * a net loss of $(3.8) million, or $(0.10) per share, compared to a net loss for second quarter 2008 of $(6.8) million, or $(0.18) per share. These loss amounts exclude the impact of accumulated preferred dividends of $(0.2) million, or $(0.00) per share, and $(0.8) million, or $(0.02) per share, for second quarter 2009 and second quarter 2008, respectively.
Other significant items that affected the net loss amounts disclosed above include the following:
Three Months Ended June 30,
-----------------------------------
2009 2008
---------------- -----------------
(in millions, except per share
amounts) Amount per share Amount per share
---------------- -----------------
Euro Millennium loss $ (1.7) $ (0.04) $ (2.5) $ (0.07)
Stock-based compensation (1.5) (0.04) (2.0) (0.05)
Restructuring charge (0.7) (0.02) (0.4) (0.01)
Workforce reduction termination
costs -- -- (0.9) (0.02)
Integration charges -- -- (0.6) (0.02)
Loss on Fusion OMS wind-down -- -- (0.5) (0.01)
Transitional employment costs -- -- (0.2) (0.00)
SEC investigation, restatement
and related expenses -- -- (0.1) (0.00)
Transitional rebuilding and
remediation costs -- -- (0.1) (0.00)
Since second quarter 2007, NYFIX has incurred costs for Euro Millennium. Launched in March 2008 for matching U.K. listed equities, Euro Millennium later expanded its scope to match cash equities in other European markets including Belgium, France, Germany and the Netherlands. The $1.7 million loss for first quarter 2009 is net of the $1.2 million of revenue reported above for the Transaction Services Division.
The Company's equity incentive program was designed to award large upfront grants rather than smaller annual grants to maximize the incentive and retention impacts of the grants and to better align the interests of employees with stockholders. As a result, stock-based compensation will remain at high levels until the significant equity grants made in October 2007, following the adoption of the Company's new equity incentive plan, fully vest.
In April 2009, NYFIX ceased using a portion of the office space in its New York headquarters and agreed on terms for a sublease. As a result, the Company recorded a restructuring charge in second quarter 2009 of $0.7 million, primarily related to the difference between the fair value of lease payments NYFIX is committed to make and the fair value of sublease payments it expects to receive through January 2014 as well as the write-off of certain fixed assets. Occupancy and related costs are expected to decrease by $0.4 million per year as result of this restructuring.
Six Month Results
Financial highlights for first half 2009 include:
* EBITDA of $(0.2) million compared to $(5.4) million for first half 2008; * a 13% decrease in total revenues to $52.5 million compared to $60.0 million for first half 2008; * an 8% increase in FIX Division net revenues to $35.3 million compared to $32.8 million for first half 2008; * a 35% decrease in Transaction Services Division net revenues to $15.7 million, including revenue of $1.9 million from Euro Millennium, compared to $24.2 million for first half 2008; * a 49% decrease in OMS Division net revenues to $1.5 million compared to $3.0 million for first half 2008; and * a net loss of $(6.0) million, or $(0.16) per share, compared to a net loss for first half 2008 of $(10.2) million, or $(0.27) per share. These loss amounts exclude the impact of accumulated preferred dividends of $(0.5) million, or $(0.01) per share, and $(2.0) million, or $(0.05) per share, for first half 2009 and first half 2008, respectively.
Other significant items that affected the net loss amounts disclosed above include the following:
Six Months Ended June 30,
--------------------------------------
2009 2008
------------------ ------------------
(in millions, except Amount per share Amount per share
per share amounts) ------------------ ------------------
Euro Millennium costs $ (3.2) $ (0.08) $ (4.7) $ (0.13)
Stock-based compensation (2.9) (0.08) (4.8) (0.13)
Restructuring charge
(net of reversal) (0.7) (0.02) (0.2) (0.01)
SEC investigation,
restatement and related
expenses 0.6 0.02 (0.3) (0.01)
Workforce reduction
termination costs -- -- (0.9) (0.02)
Loss on Fusion OMS wind-down -- -- (0.8) (0.02)
Integration charges -- -- (0.6) (0.02)
Transitional employment costs -- -- (0.3) (0.01)
Transitional rebuilding and
remediation costs -- -- (0.2) (0.01)
Outlook for the Remainder of 2009
During the remainder of 2009, NYFIX will continue to focus on expanding its core businesses in the United States and Europe, as well as preserving cash resources.
Stock-based compensation expense is expected to be approximately $1.5 million per quarter for the remainder of 2009. This amount may vary, however, depending on additional grants or cancellations and whether performance awards actually vest.
The Company expects losses related to Euro Millennium to continue throughout 2009 with such amounts declining as volumes and revenues continue to grow.
Investor Conference Call
As previously announced, NYFIX will host a conference call to discuss its results and business outlook today, August 6, 2009 at 5:00 PM Eastern Daylight Time. The conference call can be accessed live via telephone by dialing 1(877) 941-6013 in the United States or +1(480) 629-9770 internationally. A replay will be made available two hours after the call and can be accessed by dialing 1(800) 406-7325 in the United States or +1(303) 590-3030 internationally; the password for all calls is 4129964. The replay will be available until August 13, 2009. The call will be webcast live from our website at www.nyfix.com under the investor relations section.
Non-GAAP Disclosure
The disclosure above of EBITDA excludes the impact of interest, taxes, depreciation and amortization on the Company's reported GAAP results. EBITDA was included in this release because management considers it an important supplemental measure used by securities analysts, investors and other interested parties in the evaluation of the Company. EBITDA allows for meaningful company-to-company performance comparisons as companies have different capital structures and tax rates. EBITDA is also a useful tool in evaluating the Company's ability to meet future debt service, capital expenditure and working capital requirements. EBITDA does not replace and is not superior to the presentation of GAAP results. A schedule at the end of this release reconciles GAAP net loss to EBITDA.
About NYFIX, Inc.
A pioneer in electronic trading solutions, NYFIX continues to transform trading through innovation. The NYFIX Marketplace(tm) is a global community of trading counterparties utilizing innovative services that optimize the business of trading. NYFIX Millennium(r) provides the NYFIX Marketplace(tm) with new methods of accessing liquidity. NYFIX also provides value-added informational and analytical services and powerful tools for measuring execution quality. A trusted business partner to the buy-side and sell-side alike, NYFIX enables ultra low touch, low impact market access and end-to-end transaction processing. For more information, please visit www.nyfix.com.
Caution Regarding Forward Looking Statements
This press release may contain forward-looking statements, including forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements concerning NYFIX, Inc.'s plans, objectives, expectations and intentions and other statements that are not historical or current facts. Forward-looking statements are based on NYFIX, Inc.'s current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements. Factors that could cause NYFIX, Inc.'s results or future events to differ materially from current expectations include, but are not limited to: the impact of current market conditions on the financial stability of our clients including consolidations and closures; the condition of the securities markets and the general economy; the impact of regulation and regulatory actions; the effects of current, pending and future legislation; actions and initiatives by both current and future competitors; the possibility that the Company may record a significant impairment charge because the Company is not profitable; the ability to keep up with rapid technological change the ability of the Company to achieve and maintain effective internal control over financial reporting in accordance with SEC rules promulgated under Section 404 of the Sarbanes-Oxley Act; the impact of accounting for stock-based compensation and ongoing regulatory investigations, including the possibility of new and significant information subsequently arising which could lead to different determinations and require different accounting treatment; our ability to accommodate increased levels of trading activity and keep current with market data requirements; and other factors detailed in NYFIX, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 and other periodic reports filed with the U.S. Securities and Exchange Commission. In addition, these statements are based on a number of assumptions that are subject to change. The inclusion of forward-looking statements herein should not be regarded as a representation by NYFIX, Inc. that the forward-looking statements will prove to be correct. In addition, the forward-looking statements included in this press release represent the Company's views as of August 6, 2009. The Company anticipates that subsequent events and developments will cause the Company's views to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the Company's views as of any date subsequent to August 6, 2009.
NYFIX, Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2009 2008 2009 2008
-------- -------- -------- --------
Revenue:
Subscription and
maintenance $ 18,488 $ 17,507 $ 36,168 $ 35,025
Transaction 7,459 10,831 15,205 24,099
Product sales and
services 616 284 1,102 905
-------- -------- -------- --------
Total revenue 26,563 28,622 52,475 60,029
-------- -------- -------- --------
Cost of revenue:
Subscription and
maintenance 7,322 7,821 14,473 15,472
Transaction 7,479 5,642 14,080 12,054
Product sales and
services 17 87 57 168
-------- -------- -------- --------
Total cost of revenue 14,818 13,550 28,610 27,694
-------- -------- -------- --------
Gross profit 11,745 15,072 23,865 32,335
Operating expense:
Selling, general and
administrative 14,266 20,224 28,694 40,620
Restructuring charge 748 374 748 216
Depreciation and
amortization 381 494 797 941
Integration charges -- 596 -- 596
SEC investigation,
restatement and other
related expenses -- 131 (634) 268
-------- -------- -------- --------
Loss from operations (3,650) (6,747) (5,740) (10,306)
Interest expense (227) (155) (426) (366)
Investment income 39 230 128 776
-------- -------- -------- --------
Loss from continuing
operations before
income tax provision (3,838) (6,672) (6,038) (9,896)
Income tax provision -- 127 -- 255
-------- -------- -------- --------
Net loss (3,838) (6,799) (6,038) (10,151)
Accumulated preferred
dividends (166) (827) (457) (1,969)
-------- -------- -------- --------
Loss applicable to
common stockholders $ (4,004) $ (7,626) $ (6,495) $(12,120)
======== ======== ======== ========
Basic and diluted loss
per common share $ (0.10) $ (0.20) $ (0.17) $ (0.32)
======== ======== ======== ========
Basic and diluted
weighted average
common shares
outstanding 38,727 37,472 38,675 37,392
======== ======== ======== ========
NYFIX, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
June 30, December 31,
2009 2008
(Unaudited) (Audited)
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 51,654 $ 55,966
Accounts receivable 13,472 14,120
Clearing assets 614,146 400,638
Prepaid expenses and other
current assets 2,563 3,702
------------ ------------
Total current assets 681,835 474,426
Property and equipment 18,926 20,508
Capitalized software costs 9,477 8,701
Goodwill 47,385 47,170
Acquired intangible assets 7,522 7,422
Other assets 516 564
------------ ------------
Total assets $ 765,661 $ 558,791
============ ============
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable and accrued
expenses $ 16,770 $ 21,656
Clearing liabilities 611,174 399,927
Current portion of capital
lease obligations 1,361 1,358
Convertible notes 9,985 9,971
Current portion of other
long-term liabilities 860 1,014
Deferred revenue 7,929 5,271
------------ ------------
Total current liabilities 648,079 439,197
Long-term portion of capital
lease obligations 1,221 1,469
Other long-term liabilities 1,068 1,021
------------ ------------
Total liabilities 650,368 441,687
------------ ------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $1.00 par
value; 5,000,000 shares
authorized:
Series A, none issued -- --
Series B Voting Convertible,
1,500,000 shares issued
and outstanding;
liquidation preference of
$75,000 at June 30, 2009 62,092 62,092
Series C Non-Voting Convertible,
none issued -- --
Common stock, $0.001 par value;
100,000,000 shares authorized;
40,228,303 and 39,510,917
shares issued, respectively 274,267 271,319
Accumulated deficit (206,050) (200,012)
Treasury stock, 923,108
shares, at cost (12,600) (12,600)
Accumulated other
comprehensive loss (2,416) (3,695)
------------ ------------
Total stockholders' equity 115,293 117,104
------------ ------------
Total liabilities and
stockholders' equity $ 765,661 $ 558,791
============ ============
NYFIX, Inc. and Subsidiaries
Reconciliation of Net Loss to EBITDA (Unaudited)
(in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2009 2008 2009 2008
-------- -------- -------- --------
Net loss $ (3,838) $ (6,799) $ (6,038) $(10,151)
Deduct:
Investment income (39) (230) (128) (776)
Add:
Income tax provision -- 127 -- 255
Interest expense 227 155 426 366
Depreciation and
amortization 2,931 2,543 5,534 4,929
-------- -------- -------- --------
EBITDA $ (719) $ (4,204) $ (206) $ (5,377)
======== ======== ======== ========