Le Lézard
Classified in: Business
Subjects: ERN, CCA, DIV

OTC Markets Group Reports Second Quarter 2019 Results


NEW YORK, Aug. 7, 2019 /PRNewswire/ --

Second Quarter 2019 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 of 2019.

"The first half of 2019 was a period of investment ? in our facilities, in our technology platform and in our people.  We are making these investments in order to increase the value of our products for our clients," said R. Cromwell Coulson, President and Chief Executive Officer.  "We continue to focus on creating cost-effective public markets and on efficiently delivering data and technology solutions that solve the challenges faced by brokers, banks and companies."

"We were pleased to report our 10th consecutive quarter of top line revenue growth, with all three of our business lines contributing.  With our OTC Link ECN, we continued to drive growth in our trading business.  In our Market Data business we saw a nice uptick in the number of professional users of our data as well as continued industry adoption of our suite of compliance analytics products.  Finally, in our Corporate Services business, strong sales and improved customer retention on our OTCQX Best Market contributed to the quarter over quarter revenue gains," said Bea Ordonez, Chief Financial Officer.  "While we saw contraction in our operating income and margin, this reflects the impact of our continued investment in the people, technology and facilities that we believe will drive sustainable, long-term earnings growth.  We believe we are well positioned to deliver that growth."

Second Quarter 2019 compared to Second Quarter 2018












Three Months Ended June 30,





(in thousands, except shares and per share data)


2019


2018


% change


$ change

OTC Link


$                 2,898


$                 2,799


4%


99

Market data licensing


6,077


5,830


4%


247

Corporate services


6,695


6,137


9%


558

Gross revenues


15,670


14,766


6%


904

Net revenues


15,033


14,142


6%


891

Revenues less transaction-based expenses


14,861


14,056


6%


805

Operating expenses


10,434


9,060


15%


1,374

Income from operations


4,427


4,996


(11%)


(569)

Operating profit margin


29.4%


35.3%





Income before provision for income taxes


4,450


5,007


(11%)


(557)

Net income 


$                 3,567


$                 3,987


(11%)


(420)










Diluted earnings per share


$                   0.30


$                   0.34


(12%)



Adjusted diluted earnings per share


$                   0.46


$                   0.49


(6%)



Weighted-average shares outstanding, diluted


11,678,560


11,600,830


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 $0.15 on its Class A common stock.  The quarterly cash dividend is payable on September 26, 2019, to stockholders of record on September 12, 2019.  The ex-dividend date is September 11, 2019.

Stock Buyback Program

The Company is authorized to purchase shares from time to time on the open market and through block trades, in compliance with applicable law.  The Company did not repurchase any shares during the second quarter of 2019.

On March 7, 2019, the Board of Directors refreshed the Company's stock repurchase program, giving the Company authorization to repurchase up to 300,000 shares of the Company's Class A common stock.  As of June 30, 2019, there are 300,000 shares remaining to be purchased under our plan.

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 2019 Conference Call

The Company will host a conference call on Thursday, August 8, 2019, at 8:30 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: 877-407-9124 (Domestic); 201-689-8584 (International)

Replay Dial-in Numbers (available until September 8, 2019): 877-481-4010 (Domestic); 919-882-2331 (International); Replay PIN Number: 50550

Participants can access the conference via Internet webcast at the following link:

https://www.investornetwork.com/event/presentation/50550

The earnings release, transcript to the earnings call and presentation will also be available in the Investor Relations section of the corporate website at www.otcmarkets.com/investor-relations/overview.   

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 and OTC Link ECN, 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 financial markets, visit www.otcmarkets.com.

OTC Link ATS and OTC Link ECN are operated by OTC Link LLC, member FINRA/SIPC and SEC regulated ATS.

Subscribe to the OTC Markets RSS Feed

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,


2019


2018

OTC Link

$                 2,898


$                 2,799

Market data licensing

6,077


5,830

Corporate services

6,695


6,137

Gross revenues

15,670


14,766

Redistribution fees and rebates

(637)


(624)

Net revenues

15,033


14,142

Transaction-based expenses

(172)


(86)

Revenues less transaction-based expenses

14,861


14,056

Operating expenses




Compensation and benefits

6,754


5,879

IT Infrastructure and information services

1,614


1,353

Professional and consulting fees

546


595

Marketing and advertising

242


269

Occupancy costs

605


452

Depreciation and amortization

380


271

General, administrative and other

293


241

Total operating expenses

10,434


9,060

Income from operations

4,427


4,996

Other income




Interest income

19


10

Other income, net 

4


1

Income before provision for income taxes

4,450


5,007

Provision for income taxes

883


1,020

Net income 

$                 3,567


$                 3,987





Net income per share 




Basic

$                   0.31


$                   0.35

Diluted

$                   0.30


$                   0.34





Basic weighted average shares outstanding

11,353,189


11,240,863

Diluted weighted average shares outstanding

11,678,560


11,600,830





Non-GAAP Reconciliation





Three Months Ended June 30,


2019


2018

Net Income

$                 3,567


$                 3,987

Excluding:




Interest Income

(19)


(10)

Provision for income taxes

883


1,020

Depreciation and amortization

380


271

Stock-based compensation expense

660


552

Adjusted EBITDA

$                 5,471


$                 5,820





Adjusted diluted earnings per share

$                   0.46


$                   0.49





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,


2019


2018

Assets




Current assets




Cash

$                        24,127


$                        28,813

Short-term restricted cash

-


160

Accounts receivable, net of allowance for doubtful accounts of $176 and $169

5,111


4,942

Prepaid income taxes

931


478

Prepaid expenses and other current assets

1,535


2,360

Total current assets

31,704


36,753

Property and equipment, net 

6,134


1,980

Operating lease right-of-use assets

16,585


-

Deferred tax assets, net

964


1,043

Goodwill

251


251

Intangible assets, net

40


61

Long-term restricted cash

1,560


1,561

Total Assets

$                        57,238


$                        41,649





Liabilities and stockholders' equity




Current liabilities




Accounts payable

$                               707


$                               693

Accrued expenses and other current liabilities

5,778


6,018

Income taxes payable

1


-

Deferred revenue

13,102


16,070

Total current liabilities

19,588


22,781

Deferred rent

-


1,001

Income tax reserve

1,641


1,458

Operating lease liabilities

16,097


-

Total Liabilities

37,326


25,240

Commitments and contingencies




Stockholders' equity




Common stock - par value $0.01 per share




Class A - 14,000,000 authorized, 12,169,142 issued, 11,635,446 outstanding at




June 30, 2019; 12,035,941 issued, 11,548,956 outstanding at December 31, 2018

122


120

Additional paid-in capital 

17,038


15,772

Retained earnings

11,349


7,724

Treasury stock - 533,696 shares at June 30, 2019 and 486,985 shares at December 31, 2018

(8,597)


(7,207)

Total Stockholders' Equity

19,912


16,409

Total Liabilities and Stockholders' Equity

$                        57,238


$                        41,649





See accompanying notes to unaudited condensed consolidated financial statements





 

OTC Markets Group logo. (PRNewsFoto/OTC Markets Group)

 

SOURCE OTC Markets Group Inc.


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