NEW YORK, Aug. 9, 2017 /PRNewswire/ --
Second Quarter 2017 Highlights:
OTC Markets Group Inc. (OTCQX: OTCM), operator of the OTCQX® Best Market, the OTCQB® Venture Market and the Pink® Open Market for 10,000 U.S. and global securities, today announced its financial results for the second quarter 2017.
"A year after we announced that our OTCQX and OTCQB markets had received State Blue Sky recognition from five states, we have reached the half way point in achieving national State Blue Sky recognition with twenty-five states now formally recognizing our data-driven market standards," said R. Cromwell Coulson, President and Chief Executive Officer. Mr. Coulson continued, "We continue to make public markets less painful with our focus on providing mission critical technology solutions that inform investors, make trading easier for broker dealers and deliver a more efficient market for public companies."
"The second quarter of 2017 saw 9% quarter over quarter revenue growth and a 300 basis point improvement in our operating profit margin. This contributed to strong growth in our operating income, which was up 17% versus the prior year period and demonstrates the high level of operating leverage implicit in our subscription based business model. We continue to focus on generating strong operating cashflows that create long term value for our shareholders. In that context, we are pleased to announce our 35th consecutive quarterly dividend," said Bea Ordonez, Chief Financial Officer.
Second Quarter 2017 Compared to Second Quarter 2016
Quarter Ended June 30, |
||||||||
(in thousands, except shares and per share data) |
2017 |
2016 |
% change |
$ change | ||||
OTC Link ATS |
$ 2,497 |
$ 2,658 |
(6%) |
$ (161) | ||||
Market data licensing |
5,522 |
5,237 |
5% |
285 | ||||
Corporate services |
5,750 |
4,744 |
21% |
1,006 | ||||
Gross revenues |
13,769 |
12,639 |
9% |
1,130 | ||||
Net revenues |
13,143 |
12,055 |
9% |
1,088 | ||||
Operating expenses |
8,319 |
7,936 |
5% |
383 | ||||
Income from operations |
4,824 |
4,119 |
17% |
705 | ||||
Operating profit margin |
37% |
34% |
||||||
Net income |
$ 3,105 |
$ 2,515 |
23% |
$ 590 | ||||
Diluted earnings per share |
$ 0.26 |
$ 0.21 |
24% |
|||||
Adjusted diluted earnings per share |
$ 0.48 |
$ 0.42 |
14% |
|||||
Weighted-average shares outstanding, diluted |
11,519,683 |
11,430,507 |
1% |
Financial Highlights
Business Developments and News
Dividend Declaration ? Quarterly Cash Dividend
OTC Markets Group announced today that its Board of Directors authorized a quarterly cash dividend of $0.14 on its Class A common stock. The quarterly cash dividend is payable on September 21, 2017, to stockholders of record on September 7, 2017. The ex-dividend date is September 5, 2017.
Non-GAAP Financial Measures
In addition to disclosing results prepared in accordance with GAAP, the Company also discloses certain non-GAAP results of operations, including adjusted EBITDA and adjusted diluted earnings per share that either exclude or include amounts that are described in the reconciliation table of GAAP to non-GAAP information provided at the end of this release. Non-GAAP financial measures do not replace and are not superior to the presentation of GAAP financial results, but are provided to improve overall understanding of the Company's current financial performance. Management believes that this non-GAAP information is useful to both management and investors regarding certain additional financial and business trends related to the operating results. Management uses this non-GAAP information, along with GAAP information, in evaluating its historical operating performance.
Second Quarter 2017 Conference Call
The Company will host a conference call on Thursday, August 10, 2017, at 8:00 a.m. Eastern Time, during which management will discuss the financial results in further detail. The conference call and replay of the conference call may be accessed as follows:
Dial-in numbers: 1-866-682-6100 (Domestic); 1-862-255-5401 (International);
Replay Dial-in Numbers (Available until August 24, 2017): 1-877-481-4010 (Domestic); 1-919-882-2331 (International); Replay Pin Number: 19391
The earnings release and transcript to the earnings call will also be available in the Investor Relations section of the corporate website at www.otcmarkets.com/investor-relations/overview.
OTC Markets Group's Quarterly Report for the period ended June 30, 2017 is available publicly at www.otcmarkets.com.
About OTC Markets Group Inc.
OTC Markets Group Inc. (OTCQX: OTCM) operates the OTCQX® Best Market, the OTCQB® Venture Market and the Pink® Open Market for 10,000 U.S. and global securities. Through OTC Link® ATS, we connect a diverse network of broker-dealers that provide liquidity and execution services. We enable investors to easily trade through the broker of their choice and empower companies to improve the quality of information available for investors.
To learn more about how we create better informed and more efficient markets, visit www.otcmarkets.com.
OTC Link ATS is operated by OTC Link LLC, member FINRA/SIPC and SEC regulated ATS.
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Investor Contact:
Bea Ordonez
Chief Financial Officer
Phone: 212-220-2215
Email: [email protected]
OTC MARKETS GROUP INC. | |||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||
(in thousands, except share and per share information) | |||
(Unaudited) | |||
Three Months Ended June 30, | |||
2017 |
2016 | ||
Gross revenues |
$ 13,769 |
$ 12,639 | |
Redistribution fees and rebates |
(626) |
(584) | |
Net revenues |
13,143 |
12,055 | |
Operating expenses |
|||
Compensation and benefits |
5,243 |
4,967 | |
IT Infrastructure and information services |
1,426 |
1,375 | |
Professional and consulting fees |
399 |
438 | |
Marketing and advertising |
227 |
184 | |
Occupancy costs |
451 |
367 | |
Depreciation and amortization |
399 |
410 | |
General, administrative and other |
174 |
195 | |
Total operating expenses |
8,319 |
7,936 | |
Income from operations |
4,824 |
4,119 | |
Other (expense) income |
|||
Interest income |
4 |
- | |
Other (expense) income |
18 |
4 | |
Income before provision for income taxes |
4,846 |
4,123 | |
Provision for income taxes |
1,741 |
1,608 | |
Net income |
$ 3,105 |
$ 2,515 | |
Net income per share |
|||
Basic |
$ 0.27 |
$ 0.22 | |
Diluted |
$ 0.26 |
$ 0.21 | |
Basic weighted average shares outstanding |
11,134,758 |
11,099,650 | |
Diluted weighted average shares outstanding |
11,519,683 |
11,430,507 | |
Non-GAAP Reconciliation |
|||
Three Months Ended June 30, | |||
2017 |
2016 | ||
Net Income |
$ 3,105 |
$ 2,515 | |
Excluding: |
|||
Provision for income taxes |
1,741 |
1,608 | |
Depreciation and amortization |
399 |
410 | |
Stock-based compensation expense |
456 |
420 | |
Adjusted EBITDA |
$ 5,701 |
$ 4,953 | |
Adjusted diluted earnings per share |
$ 0.48 |
$ 0.42 | |
Note: We use non-GAAP financial measures of operating performance. Non-GAAP measures do not replace and are not superior to the presentation of our GAAP financial results, but are provided to improve overall understanding of the Company's current financial performance. |
OTC MARKETS GROUP INC. | |||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
(in thousands, except share information) | |||
(Unaudited) | |||
June 30, |
December 31, | ||
2017 |
2016 | ||
Assets |
|||
Current assets |
|||
Cash |
$ 22,595 |
$ 25,034 | |
Accounts receivable, net of allowance for doubtful accounts of $145 and $145 |
5,196 |
6,262 | |
Prepaid expenses and other current assets |
1,708 |
1,246 | |
Prepaid income taxes |
1,331 |
435 | |
Total current assets |
30,830 |
32,977 | |
Property and equipment, net |
1,876 |
2,279 | |
Non-current deferred tax assets, net |
1,103 |
886 | |
Goodwill |
251 |
251 | |
Intangible assets, net |
136 |
40 | |
Security deposits |
192 |
210 | |
Total Assets |
$ 34,388 |
$ 36,643 | |
Liabilities and stockholders' equity |
|||
Current liabilities |
|||
Accounts payable |
$ 420 |
$ 508 | |
Accrued expenses and other current liabilities |
2,950 |
4,761 | |
Income taxes payable |
- |
103 | |
Deferred revenue |
12,263 |
14,664 | |
Total current liabilities |
15,633 |
20,036 | |
Deferred rent |
303 |
187 | |
Income tax reserve |
1,024 |
914 | |
Total Liabilities |
16,960 |
21,137 | |
Commitments and contingencies |
|||
Stockholders' equity |
|||
Common stock - par value $0.01 per share |
|||
Class A - 14,000,000 authorized, 11,846,185 issued, 11,418,793 outstanding at |
|||
June 30, 2017; 11,595,337 issued, 11,247,979 outstanding at December 31, 2016 |
118 |
116 | |
Class C - 0 shares authorized, issued and outstanding at June 30, 2017; |
|||
130,838 shares authorized, issued and outstanding at December 31, 2016 |
- |
1 | |
Additional paid-in capital |
13,643 |
12,988 | |
Retained earnings |
9,343 |
6,385 | |
Treasury stock - 427,392 shares at June 30, 2017 and 347,358 shares at December 31, 2016 |
(5,676) |
(3,984) | |
Total Stockholders' Equity |
17,428 |
15,506 | |
Total Liabilities and Stockholders' Equity |
$ 34,388 |
$ 36,643 |
SOURCE OTC Markets Group Inc.
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