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EX-10.1 - EXHIBIT 10.1 - optionsXpress Holdings, Inc. | c95067exv10w1.htm |
8-K - 8-K - optionsXpress Holdings, Inc. | c95067e8vk.htm |
Exhibit 99.1
optionsXpress Announces Fourth Quarter and Full Year 2009 Results
CHICAGO, IL, January 28, 2010 optionsXpress Holdings, Inc. (NasdaqGS: OXPS) today reported
results for the three months and full year ended December 31, 2009.
Highlights from the fourth quarter 2009 included:
| Revenues of $60.1 million, a 5% increase year-over-year |
|
| Net income of $14.9 million, or $0.26 per diluted share |
|
| Daily average revenue trades (DARTs) of 42,600, a 17% decrease year-over-year |
|
| Net new account growth of 7,300 during the quarter |
Highlights from the full year 2009 included:
| Revenues of $233.4 million, a 5% decrease year-over-year |
|
| Net income of $60.8 million, or $1.05 per diluted share |
|
| Ending accounts of 351,200, a 10% increase year-over-year |
|
| $7.0 billion in customer assets on December 31, 2009, a 43% increase year-over-year |
In 2009, optionsXpress delivered double-digit net new account growth and brokerage pretax margins
of 46%. We are pleased with these results, particularly amidst the very difficult economic
backdrop that included the highest unemployment rates in 25 years and extraordinary low short-term
interest rates, remarked David Fisher, Chief Executive Officer of optionsXpress. We were very
pleased by the resiliency of both our customers and the broader derivatives markets during 2009 as
exemplified by our customer assets ending the year at an all time high of $7 billion, up 43% versus
last year, and industry-wide option volumes eclipsing 2008 levels providing a strong base for our
long-term success. In addition, we continued our history of innovation with many product
enhancements including the introduction of the OX Mobile application, IDEAS and our new streaming
platform, Xtend.
Fourth Quarter Results
For the fourth quarter, total DARTs were 42,600, down 17% from 51,400 during the fourth quarter of
2008, and up 1% from 42,000 for the third quarter of 2009. Total net revenues increased 5% over the
fourth quarter of 2008 and were down 3% when compared to the third quarter of 2009. Resulting net
income was $14.9 million, or $0.26 per diluted share, a 22% decrease from the $19.2 million
reported in the fourth quarter of 2008. Fourth quarter results include approximately $0.9 million
in one-time non-cash gains related to prior acquisitions, which also lowered the tax rate to 33.9%
from a normalized 36.4%.
Full Year 2009 Performance
At the end of 2009, total customer accounts were 351,200, up 10% from 2008. Total customer assets
at year-end 2009 were $7.0 billion, up 43% from year-end 2008 customer assets of $4.9 billion.
Commission revenues for 2009 were $159.5 million, down 5% from 2008. Net interest revenues and fees
were $17.5 million, down 61% from 2008 due to the steep decline in short-term interest rates. 2009
full year total net revenues were $233.4 million, which was down 5% from net revenues of $246.6
million in 2008, and 2009 full year earnings per share were $1.05, a 30% decrease versus earnings
per share of $1.49 in 2008.
We continue to demonstrate our commitment to a strong balance sheet and prudent capital
deployment. Over the past two years, we have repurchased approximately $100 million in stock,
completed the acquisitions of OEC and Optionetics and still ended 2009 with no corporate debt and a
strong cash position, commented Adam DeWitt, Chief Financial Officer of optionsXpress. We believe
this provides us sufficient flexibility to take advantage of acquisition and other growth
opportunities in all types of market conditions and macro-environments.
Outlook
Mr. Fisher concluded, In 2009 we saw retail investors reduce their trading activity following the
turmoil of the financial crisis. However, as the year came to an end, we were encouraged by our
customers shift towards a more historical level of derivatives trading. And, while trading levels
have not fully rebounded, we believe the double digit account and asset growth we generated in
2009, combined with our obsessive focus on providing the best investing experience for
self-directed investors using derivatives, leaves us well positioned to benefit from a more stable
trading environment in 2010 and eventual rising interest rates.
Conference Call
A
conference call will be broadcast live on Thursday, January 28, 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.
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.
FOR FURTHER INFORMATION:
Investor Inquiries:
Jim Polson
FD
(312) 553-6730
or
Media Inquiries:
Patrick Van De Wille
FD
(312) 553-6704
Jim Polson
FD
(312) 553-6730
or
Media Inquiries:
Patrick Van De Wille
FD
(312) 553-6704
optionsXpress Holdings, Inc.
Consolidated Statements of Operations
In thousands, except per share data
(Unaudited)
Consolidated Statements of Operations
In thousands, except per share data
(Unaudited)
Three Months Ended | ||||||||||||||||
December | December | Change | ||||||||||||||
31, 2009 | 31, 2008 | $ | % | |||||||||||||
Revenues: |
||||||||||||||||
Commissions |
$ | 38,938 | $ | 42,581 | $ | (3,643 | ) | (9 | %) | |||||||
Other brokerage related revenue |
6,003 | 6,397 | (394 | ) | (6 | %) | ||||||||||
Interest revenue and fees |
4,677 | 7,894 | (3,217 | ) | (41 | %) | ||||||||||
Interest expense |
(67 | ) | (152 | ) | 85 | (56 | %) | |||||||||
Net interest revenue and fees |
4,610 | 7,742 | (3,132 | ) | (40 | %) | ||||||||||
Education revenues |
8,008 | | 8,008 | n/a | ||||||||||||
Other income |
2,563 | 597 | 1,966 | 329 | % | |||||||||||
Net revenues |
$ | 60,122 | $ | 57,317 | $ | 2,805 | 5 | % | ||||||||
Expenses: |
||||||||||||||||
Compensation and benefits |
$ | 11,759 | $ | 6,880 | $ | 4,879 | 71 | % | ||||||||
Brokerage, clearing and other related expenses |
8,899 | 8,022 | 877 | 11 | % | |||||||||||
Brokerage advertising |
3,607 | 5,866 | (2,259 | ) | (39 | %) | ||||||||||
Education marketing and fulfillment |
4,965 | | 4,965 | n/a | ||||||||||||
Depreciation and amortization |
2,239 | 1,982 | 257 | 13 | % | |||||||||||
Other general and administrative |
6,155 | 5,462 | 693 | 13 | % | |||||||||||
Total expenses |
$ | 37,624 | $ | 28,212 | $ | 9,412 | 33 | % | ||||||||
Income before income taxes |
22,498 | 29,105 | (6,607 | ) | (23 | %) | ||||||||||
Income taxes |
7,628 | 9,921 | (2,293 | ) | (23 | %) | ||||||||||
Net income |
$ | 14,870 | $ | 19,184 | $ | (4,314 | ) | (22 | %) | |||||||
Basic earnings per share |
$ | 0.26 | $ | 0.32 | $ | (0.06 | ) | (19 | %) | |||||||
Diluted earnings per share |
$ | 0.26 | $ | 0.32 | $ | (0.06 | ) | (19 | %) | |||||||
Weighted average shares
outstanding basic |
57,669 | 59,660 | (1,991 | ) | (3 | %) | ||||||||||
Weighted average shares
outstanding diluted |
57,857 | 59,746 | (1,889 | ) | (3 | %) |
Twelve Months Ended | ||||||||||||||||
December | December | Change | ||||||||||||||
31, 2009 | 31, 2008 | $ | % | |||||||||||||
Revenues: |
||||||||||||||||
Commissions |
$ | 159,536 | $ | 167,562 | $ | (8,026 | ) | (5 | %) | |||||||
Other brokerage related revenue |
26,765 | 30,832 | (4,067 | ) | (13 | %) | ||||||||||
Interest revenue and fees |
17,787 | 46,956 | (29,169 | ) | (62 | %) | ||||||||||
Interest expense |
(245 | ) | (1,794 | ) | 1,549 | (86 | %) | |||||||||
Net interest revenue and fees |
17,542 | 45,162 | (27,620 | ) | (61 | %) | ||||||||||
Education revenues |
24,398 | | 24,398 | n/a | ||||||||||||
Other income |
5,177 | 3,002 | 2,175 | 72 | % | |||||||||||
Net revenues |
$ | 233,418 | $ | 246,558 | $ | (13,140 | ) | (5 | %) | |||||||
Expenses: |
||||||||||||||||
Compensation and benefits |
$ | 42,452 | $ | 28,571 | $ | 13,881 | 49 | % | ||||||||
Brokerage, clearing and other related expenses |
31,931 | 27,675 | 4,256 | 15 | % | |||||||||||
Brokerage advertising |
17,608 | 20,716 | (3,108 | ) | (15 | %) | ||||||||||
Education marketing and fulfillment |
15,763 | | 15,763 | n/a | ||||||||||||
Depreciation and amortization |
8,879 | 7,423 | 1,456 | 20 | % | |||||||||||
Other general and administrative |
22,579 | 20,850 | 1,729 | 8 | % | |||||||||||
Total expenses |
$ | 139,212 | $ | 105,235 | $ | 33,977 | 32 | % | ||||||||
Income before income taxes |
94,206 | 141,323 | (47,117 | ) | (33 | %) | ||||||||||
Income taxes |
33,439 | 51,008 | (17,569 | ) | (34 | %) | ||||||||||
Net income |
$ | 60,767 | $ | 90,315 | $ | (29,548 | ) | (33 | %) | |||||||
Basic earnings per share |
$ | 1.05 | $ | 1.49 | $ | (0.44 | ) | (30 | %) | |||||||
Diluted earnings per share |
$ | 1.05 | $ | 1.49 | $ | (0.44 | ) | (30 | %) | |||||||
Weighted average shares
outstanding basic |
57,925 | 60,566 | (2,641 | ) | (4 | %) | ||||||||||
Weighted average shares
outstanding diluted |
58,081 | 60,720 | (2,639 | ) | (4 | %) |
optionsXpress Holdings, Inc.
Consolidated Balance Sheets
In thousands
(Unaudited)
Consolidated Balance Sheets
In thousands
(Unaudited)
Period Ended | ||||||||||||||||
December 31, | December 31, | Change | ||||||||||||||
2009 | 2008 | $ | % | |||||||||||||
Assets: |
||||||||||||||||
Cash and cash equivalents |
$ | 178,989 | $ | 114,450 | $ | 64,539 | 56 | % | ||||||||
Cash and investments segregated
in compliance with federal regulations |
881,210 | 427,669 | 453,541 | 106 | % | |||||||||||
Receivables from brokerage customers, net |
149,871 | 137,502 | 12,369 | 9 | % | |||||||||||
Receivables from brokers, dealers and
clearing organizations |
110,779 | 15,621 | 95,158 | 609 | % | |||||||||||
Investments in securities |
70,850 | 89,937 | (19,087 | ) | (21 | %) | ||||||||||
Deposits with clearing organizations |
30,245 | 108,409 | (78,164 | ) | (72 | %) | ||||||||||
Fixed assets, net |
13,263 | 12,979 | 284 | 2 | % | |||||||||||
Goodwill |
81,590 | 44,234 | 37,356 | 84 | % | |||||||||||
Other intangible assets, net |
6,525 | 4,569 | 1,956 | 43 | % | |||||||||||
Other assets |
22,999 | 16,963 | 6,036 | 36 | % | |||||||||||
Total assets |
$ | 1,546,321 | $ | 972,333 | $ | 573,988 | 59 | % | ||||||||
Liabilities and stockholders equity: |
||||||||||||||||
Liabilities |
||||||||||||||||
Payables to brokerage customers |
$ | 1,179,204 | $ | 675,872 | $ | 503,332 | 74 | % | ||||||||
Payables to brokers, dealers and clearing
organizations |
144 | 293 | (149 | ) | (51 | %) | ||||||||||
Accounts payable and accrued liabilities |
48,471 | 27,848 | 20,623 | 74 | % | |||||||||||
Deferred revenue |
7,434 | | 7,434 | n/a | ||||||||||||
Current and deferred income taxes |
193 | 25 | 168 | 672 | % | |||||||||||
Total liabilities |
1,235,446 | 704,038 | 531,408 | 75 | % | |||||||||||
Stockholders equity |
310,875 | 268,295 | 42,580 | 16 | % | |||||||||||
Total liabilities and stockholders
equity |
$ | 1,546,321 | $ | 972,333 | $ | 573,988 | 59 | % | ||||||||
optionsXpress Holdings, Inc.
Statistical Operating Data
Statistical Operating Data
Three Months Ended | ||||||||||||||||
December 31, | December 31, | Change | ||||||||||||||
2009 | 2008 | $ or # | % | |||||||||||||
Number of customer accounts
(at period end)(1) |
351,200 | 318,600 | 32,600 | 10 | % | |||||||||||
Daily
average revenue trades (DARTs) (2) |
||||||||||||||||
Retail DARTs |
30,400 | 35,000 | (4,600 | ) | (13 | %) | ||||||||||
Institutional DARTs (3) |
12,200 | 16,400 | (4,200 | ) | (26 | %) | ||||||||||
Total DARTs |
42,600 | 51,400 | (8,800 | ) | (17 | %) | ||||||||||
Customer trades per account (4) |
31 | 42 | (11 | ) | (26 | %) | ||||||||||
Average commission per trade |
$ | 14.49 | $ | 13.14 | $ | 1.35 | 10 | % | ||||||||
Option trades as a % of total trades |
43 | % | 40 | % | 3 | % | ||||||||||
Brokerage advertising expense per net new
customer account (5) |
$ | 494 | $ | 438 | $ | 56 | 13 | % | ||||||||
Total client assets (000s) |
$ | 7,024,623 | $ | 4,898,346 | $ | 2,126,277 | 43 | % | ||||||||
Client margin balances (000s) |
$ | 149,062 | $ | 129,171 | $ | 19,891 | 15 | % |
Twelve Months Ended | ||||||||||||||||
December 31, | December 31, | Change | ||||||||||||||
2009 | 2008 | $ or # | % | |||||||||||||
Number of customer accounts
(at period end)(1) |
351,200 | 318,600 | 32,600 | 10 | % | |||||||||||
Daily
average revenue trades (DARTs) (2)
|
||||||||||||||||
Retail DARTs |
31,500 | 36,500 | (5,000 | ) | (14 | %) | ||||||||||
Institutional DARTs (3) |
12,600 | 7,100 | 5,500 | 77 | % | |||||||||||
Total DARTs |
44,100 | 43,600 | 500 | 1 | % | |||||||||||
Customer trades per account (4) |
33 | 38 | (5 | ) | (13 | %) | ||||||||||
Average commission per trade |
$ | 14.41 | $ | 15.27 | $ | (0.86 | ) | (6 | %) | |||||||
Option trades as a % of total trades |
42 | % | 53 | % | (11 | %) | ||||||||||
Brokerage advertising expense per net new
customer account (5) |
$ | 540 | $ | 388 | $ | 152 | 39 | % | ||||||||
Total client assets (000s) |
$ | 7,024,623 | $ | 4,898,346 | $ | 2,126,277 | 43 | % | ||||||||
Client margin balances (000s) |
$ | 149,062 | $ | 129,171 | $ | 19,891 | 15 | % |
(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) | Includes all Open E Cry and other institutional revenue-generating trades beginning in
July 2008. |
|
(4) | Customer trades per account are total trades divided by the average number of total
customer
accounts during the period. Customer trades are annualized. |
|
(5) | Calculated based on total net new customer accounts opened during the period. |
optionsXpress Holdings, Inc.
Segment Information
In thousands
(Unaudited)
Segment Information
In thousands
(Unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December | December | December | December | |||||||||||||
31, 2009 | 31, 2008 | 31, 2009 | 31, 2008 | |||||||||||||
Revenue |
||||||||||||||||
Brokerage Services |
$ | 52,132 | $ | 57,317 | $ | 209,041 | $ | 246,558 | ||||||||
Education |
8,515 | | 25,459 | | ||||||||||||
Eliminations |
(525 | ) | | (1,082 | ) | | ||||||||||
Revenue |
$ | 60,122 | $ | 57,317 | $ | 233,418 | $ | 246,558 | ||||||||
Income/(loss) before income taxes |
||||||||||||||||
Brokerage Services |
$ | 23,286 | $ | 29,105 | $ | 96,287 | $ | 141,323 | ||||||||
Education |
(788 | ) | | (2,081 | ) | | ||||||||||
Income before income taxes |
$ | 22,498 | $ | 29,105 | $ | 94,206 | $ | 141,323 |