CHICAGO, Oct. 26, 2010 (GLOBE NEWSWIRE) -- optionsXpress Holdings, Inc. (Nasdaq:OXPS) today reported results for the three months ended September 30, 2010. Highlights from the third quarter 2010 included:
- Revenues of $53.4 million, a 14% decrease year-over-year
- Net income of $12.9 million, $0.22 per diluted share
- Daily average revenue trades (DARTs) of 39,000, a 7% decrease year-over-year
- Net new account growth of 5,600 during the quarter, resulting in 371,100 customer accounts, an 8% increase year-over-year
- Ending customer assets of $7.6 billion, a 19% increase year-over-year
"After a challenging summer for our industry, September metrics were better than July and August in terms of both customer engagement and new customer acquisitions," said David Fisher, Chief Executive Officer of optionsXpress. "We have continued to invest and improve even during these difficult economic times, which have strengthened our core franchise and will help us capture new customers and generate higher trading activity as investor confidence improves."
For the third quarter, total DARTs were 39,000, down 7% from 42,000 during the third quarter of 2009, and down 22% from 49,800 for the second quarter of 2010. Retail DARTs were 26,300 during the third quarter, down 14% from the third quarter of 2009, and down 20% from the second quarter. Institutional DARTs were 12,700 during the third quarter, up 11% from the third quarter of 2009, and down 26% from the second quarter.
Total net revenues decreased 14% compared to the third quarter of 2009 and decreased 19% when compared to the second quarter of 2010. Resulting net income was $12.9 million, or $0.22 per diluted share, a 21% decrease from the $16.3 million reported in the third quarter of 2009 and an 18% decrease when compared to the second quarter of 2010. Third quarter results include approximately $3 million in non-cash, non-taxable gains related to a prior acquisition.
"Customer assets, a key long-term driver of activity, continues to show strength as assets grew 19% year-over-year compared to the market indices average of 11% over the same period and ended the third quarter just under their all-time high," commented Adam DeWitt, Chief Financial Officer of optionsXpress. "We were also able to reduce advertising spend dynamically during the quarter in response to the weak new account environment, lowering our overall cost per net new account from $737 in the second quarter to $589 in the third quarter."
Outlook
Mr. Fisher concluded, "September was the best month of the third quarter from a trading activity perspective and that momentum has carried into October. With over 370,000 customers and $7.6 billion in customer assets there is substantial and growing earnings power in our customer base. While we have been able to generate meaningful profits and cash flow despite low interest rates and slower trading environments due to our efficiency, the operating leverage in the business will likely drive considerable increases in margins and earnings when either improves."
Conference Call
A conference call will be broadcast live on Tuesday, October 26, 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 athttp://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 | ||||||
| September 30, | September 30, | Change | ||||
| 2010 | 2009 | $ | % | |||
| Revenues: | ||||||
| Commissions | $35,229 | $40,501 | ($5,272) | (13%) | ||
| Other brokerage-related revenue | 3,533 | 7,357 | (3,824) | (52%) | ||
| Interest revenue and fees | 4,539 | 4,241 | 298 | 7% | ||
| Interest expense | (39) | (55) | 16 | (29%) | ||
| Net interest revenue and fees | 4,500 | 4,186 | 314 | 8% | ||
| Education revenues | 6,111 | 9,156 | (3,045) | (33%) | ||
| Other income | 4,002 | 1,087 | 2,915 | 268% | ||
| Net revenues | $53,375 | $62,287 | ($8,912) | (14%) | ||
| Expenses: | ||||||
| Compensation and benefits | $11,451 | $11,885 | ($434) | (4%) | ||
| Brokerage, clearing and other related expenses | 8,399 | 7,795 | 604 | 8% | ||
| Brokerage advertising | 3,300 | 3,207 | 93 | 3% | ||
| Education marketing and fulfillment | 3,815 | 6,006 | (2,191) | (36%) | ||
| Depreciation and amortization | 2,148 | 2,350 | (202) | (9%) | ||
| Other general and administrative | 5,923 | 5,769 | 154 | 3% | ||
| Total expenses | $35,036 | $37,012 | ($1,976) | (5%) | ||
| Income before income taxes | 18,339 | 25,275 | (6,936) | (27%) | ||
| Income taxes | 5,484 | 9,007 | (3,523) | (39%) | ||
| Net income | $12,855 | $16,268 | ($3,413) | (21%) | ||
| Basic earnings per share | $0.22 | $0.28 | ($0.06) | (21%) | ||
| Diluted earnings per share | $0.22 | $0.28 | ($0.06) | (21%) | ||
| Weighted average shares | ||||||
| outstanding - basic | 57,461 | 57,743 | (282) | (0%) | ||
| Weighted average shares | ||||||
| outstanding - diluted | 57,635 | 57,936 | (301) | (1%) | ||
| Nine Months Ended | ||||
| September 30, | September 30, | Change | ||
| 2010 | 2009 | $ | % | |
| Revenues: | ||||
| Commissions | $119,540 | $120,598 | ($1,058) | (1%) |
| Other brokerage-related revenue | 13,274 | 20,762 | (7,488) | (36%) |
| Interest revenue and fees | 14,132 | 13,110 | 1,022 | 8% |
| Interest expense | (146) | (178) | 32 | (18%) |
| Net interest revenue and fees | 13,986 | 12,932 | 1,054 | 8% |
| Education revenues | 21,348 | 16,390 | 4,958 | 30% |
| Other income | 7,758 | 2,614 | 5,144 | 197% |
| Net revenues | $175,906 | $173,296 | $2,610 | 2% |
| Expenses: | ||||
| Compensation and benefits | $34,953 | $30,693 | $4,260 | 14% |
| Brokerage, clearing and other related expenses | 27,667 | 23,032 | 4,635 | 20% |
| Brokerage advertising | 13,416 | 14,001 | (585) | (4%) |
| Education marketing and fulfillment | 14,096 | 10,798 | 3,298 | 31% |
| Depreciation and amortization | 6,716 | 6,640 | 76 | 1% |
| Other general and administrative | 17,293 | 16,424 | 869 | 5% |
| Total expenses | $114,141 | $101,588 | $12,553 | 12% |
| Income before income taxes | 61,765 | 71,708 | (9,943) | (14%) |
| Income taxes | 21,435 | 25,811 | (4,376) | (17%) |
| Net income | $40,330 | $45,897 | ($5,567) | (12%) |
| Basic earnings per share | $0.70 | $0.79 | ($0.09) | (11%) |
| Diluted earnings per share | $0.70 | $0.79 | ($0.09) | (11%) |
| Weighted average shares | ||||
| outstanding - basic | 57,441 | 58,011 | (570) | (1%) |
| Weighted average shares | ||||
| outstanding - diluted | 57,649 | 58,154 | (505) | (1%) |
| optionsXpress Holdings, Inc. | |||||
| Consolidated Balance Sheets | |||||
| In thousands | |||||
| (Unaudited) | |||||
| Period Ended | |||||
| September 30, | December 31, | Change | |||
| 2010 | 2009 | $ | % | ||
| Assets: | |||||
| Cash and cash equivalents | $230,522 | $178,989 | $51,533 | 29% | |
| Cash and investments segregated | |||||
| in compliance with federal regulations | 905,621 | 881,210 | 24,411 | 3% | |
| Receivables from brokerage customers, net | 173,294 | 149,871 | 23,423 | 16% | |
| Receivables from brokers, dealers and | |||||
| clearing organizations | 30,255 | 110,779 | (80,524) | (73%) | |
| Investments in securities | 12,125 | 70,850 | (58,725) | (83%) | |
| Deposits with clearing organizations | 24,395 | 30,245 | (5,850) | (19%) | |
| Fixed assets, net | 12,019 | 13,263 | (1,244) | (9%) | |
| Goodwill | 85,386 | 81,590 | 3,796 | 5% | |
| Other intangible assets, net | 5,250 | 6,525 | (1,275) | (20%) | |
| Other assets | 27,275 | 22,999 | 4,276 | 19% | |
| Total assets | $1,506,142 | $1,546,321 | ($40,179) | (3%) | |
| Liabilities and stockholders' equity: | |||||
| Liabilities | |||||
| Payables to brokerage customers | $1,106,082 | $1,179,204 | ($73,122) | (6%) | |
| Payables to brokers, dealers and clearing | |||||
| organizations | 2,375 | 144 | 2,231 | 1549% | |
| Accrued liabilities and accounts payable | 19,619 | 19,027 | 592 | 3% | |
| Current and deferred income taxes | 14 | 193 | (179) | (93%) | |
| Other liabilities | 26,492 | 36,878 | (10,386) | (28%) | |
| Total liabilities | 1,154,582 | 1,235,446 | (80,864) | (7%) | |
| Stockholders' equity | 351,560 | 310,875 | 40,685 | 13% | |
| Total liabilities and stockholders' | |||||
| equity | $1,506,142 | $1,546,321 | ($40,179) | (3%) | |
| optionsXpress Holdings, Inc. | |||||
| Statistical Operating Data | |||||
| Three Months Ended | |||||
| September | September | Change | |||
| 30, 2010 | 30, 2009 | $ or # | % | ||
| Number of customer accounts | |||||
| (at period end)(1) | 371,100 | 343,900 | 27,200 | 8% | |
| Daily average revenue trades (''DARTs'') (2) | |||||
| Retail DARTs | 26,300 | 30,600 | (4,300) | (14%) | |
| Institutional DARTs | 12,700 | 11,400 | 1,300 | 11% | |
| Total DARTs | 39,000 | 42,000 | (3,000) | (7%) | |
| Customer trades per account (3) | 27 | 32 | (5) | (16%) | |
| Average commission per trade | $14.11 | $15.07 | ($0.96) | (6%) | |
| Option trades as a % of total trades | 41% | 43% | (2%) | ||
| Brokerage advertising expense per net new | |||||
| customer account (4) | $589 | $486 | $103 | 21% | |
| Total client assets (000s) | $7,574,541 | $6,349,342 | $1,225,199 | 19% | |
| Client margin balances (000s) | $185,868 | $130,283 | $55,585 | 43% | |
| Nine Months Ended | |||||
| September | September | Change | |||
| 30, 2010 | 30, 2009 | $ or # | % | ||
| Number of customer accounts | |||||
| (at period end)(1) | 371,100 | 343,900 | 27,200 | 8% | |
| Daily average revenue trades (''DARTs'') (2) | |||||
| Retail DARTs | 29,800 | 31,800 | (2,000) | (6%) | |
| Institutional DARTs | 14,700 | 12,800 | 1,900 | 15% | |
| Total DARTs | 44,500 | 44,600 | (100) | (0%) | |
| Customer trades per account (3) | 31 | 34 | (3) | (9%) | |
| Average commission per trade | $14.31 | $14.38 | ($0.07) | (0%) | |
| Option trades as a % of total trades | 41% | 41% | 0% | ||
| Brokerage advertising expense per net new | |||||
| customer account (4) | $674 | $553 | $121 | 22% | |
| Total client assets (000s) | $7,574,541 | $6,349,342 | $1,225,199 | 19% | |
| Client margin balances (000s) | $185,868 | $130,283 | $55,585 | 43% | |
| (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 | Nine Months Ended | |||
| September | September | September | September | |
| 30, 2010 | 30, 2009 | 30, 2010 | 30, 2009 | |
| Revenue | ||||
| Brokerage Services | $47,548 | $53,138 | $154,836 | $156,909 |
| Education | 6,591 | 9,640 | 22,791 | 16,944 |
| Eliminations | (764) | (491) | (1,721) | (557) |
| Revenue | $53,375 | $62,287 | $175,906 | $173,296 |
| Income/(loss) before income taxes | ||||
| Brokerage Services | $19,496 | $26,292 | $65,469 | $73,001 |
| Education | (1,157) | (1,017) | (3,704) | (1,293) |
| Income before income taxes | $18,339 | $25,275 | $61,765 | $71,708 |