FXCM Inc. Announces Fourth Quarter 2012 and Full Year 2012 Results

FXCM Inc. Announces Fourth Quarter 2012 and Full Year 2012 Results

Releases February 2013 Monthly Operating Metrics

Fourth Quarter Highlights:

  • 2012 fourth quarter U.S. GAAP revenues of $108.1 million, down 1% versus the same period in 2011
  • U.S. GAAP net income of $3.0 million or $0.11 per fully diluted share
  • Adjusted Pro Forma EBITDA of $29.8 million, up 13% versus the same period in 2011
  • Adjusted Pro Forma net income of $9.7 million or $0.13 per fully exchanged, fully diluted share
  • Customer equity of $1,190.8 million, up 14% from same period in 2011
  • Active accounts of 170,930, up 5% from the same period in 2011
  • Declared a quarterly dividend of $0.06 per share of Class A common stock

Full-Year Highlights:

  • Full year U.S. GAAP revenues of $417.3 million, up 0.4% compared to 2011
  • U.S. GAAP net income of $9.0 million or $0.37 per fully diluted share
  • Adjusted Pro Forma EBITDA of $112.9 million, up 1% compared to 2011
  • Adjusted Pro Forma net income of $42.6 million or $0.58 per fully exchanged, fully diluted share
  • Paid dividends of $0.24 per share of Class A common stock
  • Completed the acquisition of 50.1% of Lucid Markets, a leading non-bank market maker and electronic trader in institutional foreign exchange

February 2013 Monthly Metrics Highlights:

  • Record retail customer trading volume of $17.9 billion per day
  • $359 billion in total retail customer trading volume - fourth highest in FXCM history

NEW YORK--(BUSINESS WIRE)-- FXCM Inc. (NYS: FXCM) , a leading online provider of foreign exchange, or FX, trading and related services, today announced revenues for the quarter ended December 31, 2012 of $108.1 million, compared to $108.7 million for the quarter ended December 31, 2011, a decrease of 1%. U.S. GAAP net income was $3.0 million or $0.11 per fully diluted Class A share for the fourth quarter 2012, compared to $3.2 million or $0.21 per fully diluted Class A share for the fourth quarter 2011, a decrease of 7% and 48%, respectively. This decrease is primarily due to $1.8 million or $0.12 per fully diluted share in deferred tax benefits recognized by FXCM's Japanese subsidiary in the fourth quarter 2011 U.S. GAAP results.

Under U.S. GAAP, revenues for the year ended December 31, 2012 increased 0.4% to $417.3 million, compared to $415.6 million for the corresponding period in 2011. U.S. GAAP net income for the year ended December 31, 2012 was $9.0 million, or $0.37 cents per fully diluted Class A share versus $12.7 million or $0.77 cents per fully diluted Class A share, a decrease of 30% and 52% respectively.

Adjusted Pro Forma EBITDA for the fourth quarter 2012 was $29.8 million, compared to $26.4 million for the fourth quarter 2011, an increase of 13%. Adjusted Pro Forma Net Income was $9.7 million or $0.13 per fully exchanged, fully diluted share for the fourth quarter 2012, compared to $20.7 million or $0.28 per fully exchanged, fully diluted share for the fourth quarter 2011, a decrease of 53% and 54%, respectively. This decrease is primarily due to $8.2 million or $0.11 per fully exchanged, fully diluted share in deferred tax benefits recognized by FXCM's Japanese subsidiary in the fourth quarter 2011 adjusted Pro Forma results.

Adjusted Pro Forma EBITDA for the year ended December 31, 2012 was $112.9 million, compared to $111.9 million, for the corresponding period in 2011, an increase of 1%. Adjusted Pro Forma Net Income for the year ended December 31, 2012 was $42.6 million, or $0.58 per share on a fully exchanged, fully diluted basis, compared to $67.2 million, or $0.90 per share on a fully exchanged, fully diluted basis, for the corresponding period in 2011, a decrease of 37% and 36% respectively.

Adjusted Pro Forma results assume the conversion and exchange of all FXCM Holdings, LLC Units into FXCM Inc. Class A common stock, resulting in the elimination of the non-controlling interest and the corresponding adjustment to the entity's tax provision. In addition, Adjusted Pro Forma results eliminate certain non-recurring charges and certain equity based compensation expense granted at the time of FXCM's initial public offering in December 2010.

"FXCM turned in a solid fourth quarter even though volatility in global FX markets hit multi-year lows," said Drew Niv, Chief Executive Officer of FXCM. "Despite the subdued trading environment we saw for the entire year in 2012, we are pleased to have positioned our business so that we were still able to generate $102.1 million in after-tax cash flow from operations," Niv continued. "With over $13 trillion in currencies traded at FXCM in 2012, we have built FXCM today into one of the largest FX players in the world."

FXCM Inc. today also announced certain key operating metrics for February 2013 for its retail and institutional foreign exchange business. Monthly activities included:

February 2013 Operating Metrics

Retail Trading Metrics

  • Retail customer trading volume(1) of $359 billion in February 2013, 1% lower than January 2013 and 3% higher than February 2012.
  • Average retail customer trading volume per day of $17.9 billion in February 2013, 8% higher than January 2013 and 8% higher than February 2012.
  • An average of 460,761 retail client trades per day in February 2013, 6% higher than January 2013 and 16% higher than February 2012.
  • Tradable accounts(2) of 190,891 as of February 28, 2013, an increase of 1,784 or 1% from January 2013, and a decrease of 6,875 or 3% from February 2012.

Institutional Trading Metrics

  • Institutional customer trading volume(1) of $132 billion in February 2013, 14% higher than January 2013 and 4% higher than February 2012.
  • Average institutional trading volume per day of $6.6 billion in February 2013, 25% higher than January 2013 and 8% higher than February 2012.
  • An average of 17,888 institutional client trades per day in February 2013, 13% higher than January 2013 and 39% lower than February 2012.

Drew Niv, FXCM's Chief Executive Officer, commenting on February metrics said "2013 has so far been a very different year than 2012, with two of our best months of volume ever in January and February."

We achieved these results despite only a relatively modest improvement in currency volatility historically speaking," Niv added. "This is in large part a result of FXCM having grown client equity to $1.2 billion, over 4 times higher than just four years ago."

More information, including historical results for each of the above metrics, can be found on the investor relations page of the Company's corporate website, www.fxcm.com.

This operating data is preliminary and subject to revision and should not be taken as an indication of the financial performance of FXCM Inc. FXCM undertakes no obligation to publicly update or review previously reported operating data. Any updates to previously reported operating data will be reflected in the historical operating data that can be found on the Investor Relations page of the Company's corporate website, www.fxcm.com.

(1) Volume that FXCM customers traded in period is translated into U.S. dollars.

(2) A Tradable Account is an account with sufficient funds to place a trade in accordance with FXCM trading policies.

       

Consolidated U.S. GAAP Results

 

Unaudited U.S. GAAP (thousands except per share amounts)

Three Months Ended December 31,   Twelve Months Ended December 31,

2012

 

2011

 

% Change

2012

 

2011

% Change

 
Total net revenues $ 108,094 $ 108,685 -1 % $ 417,315 $ 415,578 0.42 %
 
Referring broker fees 17,720 20,579 -14 % 76,585 92,832 -18 %
Compensation and benefits 24,604 26,424 -7 % 105,779 95,086 11 %
Other expenses 39,016 34,720 12 % 147,951 138,010 7 %
 
Depreciation, amortization and interest expense 13,077 5,852 123 % 39,536 20,053 97 %
 
Income before income taxes   13,677   21,110 -35 %   47,464   69,597 -32 %
 
Income tax provision 4,130 61 6670 % 8,986 10,816 -17 %
 
Net Income   9,547   21,049 -55 %   38,478   58,781 -35 %
 
Net income attributable to non-controlling interest in FXCM Holdings, LLC 5,413 17,822 -70 % 23,131 46,045

-50

%
 
Net income attributable to non-controlling interest in Lucid Markets Trading Limited 1,136 - 0 % 6,389 - 0 %
       
Net Income Attributable to FXCM Inc. $ 2,998 $ 3,227 -7 % $ 8,958 $ 12,736 -30 %
 
Net Income (in thousands) $ 2,998 $ 3,227 -7 % $ 8,958 $ 12,736 -30 %
 
Net Income per Class A Share
Basic and Diluted $ 0.11 $ 0.21 -48 % $ 0.37 $ 0.77 -52 %
 
Average Class A shares outstanding   27,750   15,291 81 %   24,086   16,567 45 %
 
                           

Consolidated Adjusted Pro Forma Results

 

Unaudited

Adjusted Pro Forma (thousands except
per share amounts)

 

Adjusted Pro Forma Cash
(thousands except per share
amounts)

 

Adjusted Pro Forma (thousands
except per share amounts)

 

Adjusted Pro Forma Cash (thousands
except per share amounts)

Three Months Ended December 31, Three Months Ended December 31, Twelve Months Ended December 31, Twelve Months Ended December 31,

2012

2011

% Change

2012

2011

% Change

2012

2011

% Change

2012

2011

% Change

 
Total Revenues $ 108,094 $ 105,371 3 % $ 108,094 $ 105,371 3 % $ 417,315 $ 412,264 1 % $ 417,315 $ 412,264 1 %
 
Referring broker fees 17,720 20,579 -14 % 17,720 20,579 -14 % 76,585 92,832 -18 % 76,585 92,832 -18 %
Compensation and benefits 21,591 23,681 -9 % 19,814 23,415 -15 % 84,304 85,817 -2 % 81,266 85,555 -5 %
Other expenses   39,016   34,720   12 %   39,016   34,720 12 %   143,525   121,748 18 %   143,525   121,748 18 %
 
EBITDA   29,767   26,391   13 %   31,544   26,657 18 %   112,901   111,867 1 %   115,939   112,129 3 %
 
Depreciation, amortization and interest expense 13,077 5,852 123 % 1,065 - 39,536 20,053 97 % 2,763 -
 
Income before income taxes   16,690   20,539   -19 %   30,479   26,657 14 %   73,365   91,814 -20 %   113,176   112,129 1 %
 
Income tax provision 5,900 <

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