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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Tradestation Grp. (MM) | NASDAQ:TRAD | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 9.74 | 0 | 01:00:00 |
The primary reason for the year-over-year difference in net revenues was lower brokerage commissions and fees caused mainly by lower daily average revenue trades (DARTs). For the 2010 fourth quarter, brokerage commissions and fees (the largest component of the company's net revenues) were $24.9 million, as compared to 2009 fourth quarter brokerage commissions and fees of $27.8 million. Lower DARTs were caused, the company believes, primarily by reduced market volatility in the 2010 fourth quarter as compared to the 2009 fourth quarter. The primary reasons for the year-over-year difference in net income were the lower brokerage commissions and fees and higher total expenses, including an increase in depreciation and amortization of $925,000 attributable mainly to two software technology acquisitions and capital expenditures for hardware made by the company in 2010.
"We are focused on several exciting growth initiatives in 2011," said Salomon Sredni, the company's Chairman and CEO. "We plan to launch a superior forex brokerage service, as well as a new marketing campaign that emphasizes the value of TradeStation to the entire active trader market – not just rules-based traders – and to grow our recently-launched securities lending and prime services business and Eurex trading offering. We expect to launch both the new forex offering and the new marketing campaign by the end of the 2011 first quarter."
"At the 2010 year end, our client assets were at an all-time high, average client margin balances had increased 40% since the 2009 fourth quarter, we had cash and cash equivalents and marketable securities of $105.1 million, no debt, total shareholders' equity of $173.4 million, and had produced positive net income for the 35th consecutive quarter," said David Fleischman, the company's Chief Financial Officer. "With interest rates having only one direction to move, and the implementation of our new growth initiatives, we remain excited about our prospects for long-term earnings growth."
TradeStation Reports DARTs and Record Total Accounts
For the 2010 fourth quarter, TradeStation experienced the following year-over-year daily trading results with respect to equities, futures and forex accounts:
Q4 10 | Q4 09 | Decrease | |
Daily Average Revenue Trades | 73,572 | 79,179 | 7% |
The company also published today, in a separate announcement, its DARTs, Total Client Assets, Average Equities Client Credit Balances and Average Equities Client Margin Balances for the month of January 2011.
TradeStation had a record 47,581 brokerage accounts at December 31, 2010, a 3% increase from December 31, 2009. The 2010 fourth quarter is the 37th consecutive quarter TradeStation has increased its net brokerage accounts since the 2001 launch of the TradeStation trading platform.
TradeStation's Average Client Trades 391 Times per Year and Has an Average Account Balance of $73,100 for Equities and $23,000 for Futures
TradeStation's brokerage client account metrics are among the best in the industry. TradeStation brokerage clients generated the following client account metrics in the 2010 fourth quarter:
Client Trading Activity | |
Annualized average revenue per account | $2,245 |
Annualized trades per account | 391 |
Client Account Assets | |
Average assets per account (Equities) | $73,100 |
Average assets per account (Futures) | $23,000 |
Company Completes 4-Year Stock Buy-Back Plan
In the 2010 fourth quarter, the company completed its 4-year stock buy-back plan with the purchase of 284,986 shares of its common stock for a total purchase price of $1.7 million. Since buying under the plan began November 13, 2006, through its completion November 10, 2010, the company purchased 7,036,472 shares for a total purchase price of $59.8 million.
Company Provides 2011 Business Outlook
TradeStation today also published its 2011 Business Outlook.
The company's 2011 First Quarter and Full-year Business Outlook estimated ranges are as follows:
2011 BUSINESS OUTLOOK | ||
(In Millions, Except Per Share Data) | ||
First Quarter 2011 | Full-year 2011 | |
REVENUES | $32.0 to $34.0 | $138.0 to $142.0 |
EARNINGS PER SHARE (Diluted) | $0.01 to $0.03 | $0.15 to $0.20 |
When comparing earnings per share (diluted) in the Full-year 2011 Business Outlook to earnings per share (diluted) for 2010 full-year results, it is important to note that 2010 results were significantly affected by items the company believes are not important to its core business and operations, in particular mark-to-market gains and losses on investments and certain tax refunds and benefits. TradeStation's 2010 full-year earnings per share (diluted) of 28 cents would have been 15 cents if adjusted to exclude all mark-to-market gains or losses and to apply an annual effective income tax rate of 40% (as compared to the actual full-year effective income tax rate of 17%)1. The company believes this is a more meaningful "apples-to-apples" comparison, as the Full-year 2011 Business Outlook assumes no mark-to-market gains or losses and a 40% annual effective income tax rate.
1A reconciliation of the company's reported results and its proforma results assuming no mark-to-market gains or losses during the period and a 40% annual effective tax rate is as follows (in thousands, except per share data):
Year Ended December 31, 2010 | ||
Amount (in thousands) | Earnings per Share (diluted) | |
Net income, as reported | $11,440 | $0.28 |
Gains on marketable securities, net * | (2,310) | (0.05) |
40% effective income tax rate | (3,164) | (0.08) |
Net income, excluding the effect of items noted above | $5,966 | $0.15 |
Weighted average shares outstanding: | ||
Basic | N/A | 39,815 |
Diluted | N/A | 40,237 |
* After taxes
The company's 2011 first quarter and full-year estimated ranges are based on numerous assumptions, including: basing the ranges on average daily revenue per account for each asset class (equities, futures, forex) at approximately the same level as average daily revenue per account over the 12-month period ended December 31, 2010, plus a 2011 stub period ended February 1, 2011 (the period used and the formula and criteria applied often vary with each Business Outlook based upon management's judgment each period concerning the best assumptions to use); certain levels of revenue growth from forex (based mainly on the expected first quarter 2011 launch of a new forex offering), prime services (mostly securities lending) and Eurex trading, and the success of a new marketing campaign (expected to be launched March 2011); U.S. Treasury Bill and Treasury Note yields the company receives remaining constant at current levels throughout the 2011 year; no unrealized gain or loss on TradeStation Securities' investment in the CBOE or its U.S. Treasury portfolio in 2011; anticipated growth, attrition and trading activity of active trader equities, futures and forex accounts (for forex accounts, chiefly from the planned new offering), and the proportions in trading activity among those asset classes (each of which have different profit margin structures); the timing of expenses relating to the company's growth initiatives as compared to the timing of anticipated benefits from those initiatives; and numerous other assumptions concerning the company's business and industry, market conditions, and various decisions, acts or failures to act both within and outside of the company's control. All assumptions, expectations and beliefs relating to the Business Outlook are forward-looking in nature and actual results may differ materially from those estimated, including, but not limited to, as a result of, or as indicated by, the issues, uncertainties and risk factors set forth and referenced above and below. In particular, to the extent our above-described growth initiatives do not produce the expected results, market volatility and/or market volumes move to significantly higher or lower levels, net account growth increases, slows or decreases, the U.S. Treasury Bill and/or Treasury Note rates of interest are different than what has been assumed, and/or economic or financial market conditions persist or worsen, or improve sooner or to a higher degree than expected, or the company is subject to material mark-to-market adjustments (up or down) on its investment in the CBOE or its U.S. treasury securities holdings, the results estimated in the Business Outlook will likely be materially different than actual results.
Conference Call/Webcast
At 11:00, a.m., Eastern Time, today, members of TradeStation Group senior management will conduct an analyst conference call to discuss the company's 2010 fourth quarter results and its 2011 First Quarter and Full-year Business Outlook. All company shareholders and the public are invited to listen. The telephone conference will be broadcast live via the Internet at www.TradeStation.com. The live webcast will be accompanied by slides of graphs and charts. A rebroadcast of the call will be accessible for approximately 90 days.
About TradeStation Group, Inc.
TradeStation Group, Inc. (Nasdaq:TRAD), through its brokerage subsidiaries, offers the TradeStation platform to the active trader and certain institutional trader markets. TradeStation is an electronic trading platform that offers state-of-the-art electronic order execution and enables clients to design, test, optimize, monitor and automate their own custom Equities, Options, Futures and Forex trading strategies.
TradeStation Securities, Inc. (Member NYSE, FINRA, SIPC, DTCC, OCC & NFA) is a licensed securities broker-dealer and a registered futures commission merchant, and also a member of various exchanges. Its TradeStation Prime Services division, based in New York, seeks to provide prime brokerage services, including securities lending, to small and mid-sized hedge funds and other firms. TradeStation Forex, Inc. (Member NFA) is a Retail Foreign Exchange Dealer (RFED) that is expected to launch and offer exclusively the company's new forex brokerage offering beginning later this quarter. The company's technology subsidiary, TradeStation Technologies, Inc., develops and offers strategy trading software tools and subscription services. Its London-based subsidiary, TradeStation Europe Limited, an FSA-authorized brokerage firm, introduces UK and other European accounts to TradeStation Securities and, once operational, TradeStation Forex.
Forward-Looking Statements – Issues, Uncertainties and Risk Factors
This press release, including the 2011 First Quarter and Full-year Business Outlook estimated ranges contained in this press release, and today's earnings conference call, contain statements and estimates that are forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When used in this press release, or the conference call, the words "anticipate(s)," "anticipated," "anticipation," "assume(s)," "assumption(s)," "become(s)," "belief(s)," "believe(s)," "believed," "could," "designed," "estimate," "estimates," "estimated," "expect(s)," "expected," "expectation(s)," "going forward," "future," "hopeful," "hopefully," "hope(s)," "intend(s)," "intended," "look forward," "may," "might," "opportunity," "opportunities," "outlook(s)," "pending," "plan(s)," "planned," "potential," "scheduled," "shall," "should," "think(s)," "to be," "upcoming," "well-positioned," "will," "wish," "would," and similar expressions, if and to the extent used, are intended to identify forward-looking statements. All forward-looking statements are based largely on current expectations and beliefs concerning future events that are subject to substantial risks and uncertainties. Actual results may differ materially from the results herein suggested or suggested in the conference call. Factors that may cause or contribute to the various potential differences include, but are not limited to, the following:
TRADESTATION GROUP, INC. AND SUBSIDIARIES | ||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||
(in thousands, except per share data) | ||||
Three Months Ended | Year Ended | |||
December 31, | December 31, | |||
2010 | 2009 | 2010 | 2009 | |
(Unaudited) | ||||
REVENUES: | ||||
Brokerage commissions and fees | $ 24,883 | $ 27,836 | $ 108,318 | $ 121,258 |
Interest income | 2,756 | 2,008 | 10,429 | 5,957 |
Brokerage interest expense | -- | -- | -- | -- |
Net interest income | 2,756 | 2,008 | 10,429 | 5,957 |
Subscription fees and other | 1,623 | 1,829 | 6,376 | 7,638 |
Gains and (losses) on marketable securities, net | (326) | (486) | 3,849 | (142) |
Net revenues | 28,936 | 31,187 | 128,972 | 134,711 |
EXPENSES: | ||||
Employee compensation and benefits | 10,528 | 10,053 | 44,583 | 41,715 |
Clearing and execution | 6,264 | 7,360 | 28,716 | 31,182 |
Data centers and communications | 3,366 | 2,929 | 14,211 | 11,480 |
Marketing | 1,768 | 1,564 | 6,838 | 6,610 |
Professional services | 1,094 | 859 | 3,640 | 3,372 |
Occupancy and equipment | 824 | 789 | 3,188 | 3,072 |
Depreciation and amortization | 1,981 | 1,056 | 5,311 | 4,362 |
Other | 2,472 | 1,987 | 8,692 | 6,849 |
Total expenses | 28,297 | 26,597 | 115,179 | 108,642 |
Income before income taxes | 639 | 4,590 | 13,793 | 26,069 |
INCOME TAX (BENEFIT) PROVISION | (131) | 1,858 | 2,353 | 10,279 |
Net income | $ 770 | $ 2,732 | $ 11,440 | $ 15,790 |
EARNINGS PER SHARE: | ||||
Basic | $ 0.02 | $ 0.07 | $ 0.29 | $ 0.38 |
Diluted | $ 0.02 | $ 0.07 | $ 0.28 | $ 0.38 |
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||
Basic | 39,105 | 40,882 | 39,815 | 41,507 |
Diluted | 39,523 | 41,361 | 40,237 | 41,981 |
TRADESTATION GROUP, INC. AND SUBSIDIARIES | ||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
(in thousands) | ||
December 31, | December 31, | |
2010 | 2009 | |
ASSETS: | ||
Cash and cash equivalents, including restricted cash of $478 at December 31, 2010 and $717 at December 31, 2009* | $ 41,888 | $ 57,405 |
Cash and investments segregated in compliance with federal regulations | 1,279,734 | 785,208 |
Marketable securities* | 63,255 | 76,342 |
Receivables from brokers, dealers, clearing organizations and clearing agents | 80,827 | 32,226 |
Receivables from brokerage customers, net | 68,268 | 45,034 |
Property and equipment, net | 17,974 | 7,578 |
Deferred income taxes, net | -- | 1,276 |
Deposits with clearing organizations | 35,504 | 38,521 |
Other assets | 5,716 | 5,606 |
Total assets | $ 1,593,166 | $ 1,049,196 |
LIABILITIES AND SHAREHOLDERS' EQUITY: | ||
LIABILITIES: | ||
Payables to brokers, dealers and clearing organizations | $ 27,770 | $ 114 |
Payables to brokerage customers | 1,381,105 | 868,741 |
Accounts payable | 3,767 | 2,627 |
Accrued expenses | 6,967 | 7,206 |
Deferred income taxes, net | 120 | -- |
Total liabilities | 1,419,729 | 878,688 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS' EQUITY | 173,437 | 170,508 |
Total liabilities and shareholders' equity | $ 1,593,166 | $ 1,049,196 |
* Marketable securities as of December 31, 2010 exclude $3.9 million that was transferred on January 3, 2011 from cash and investments segregated in compliance with federal regulations. Cash and cash equivalents as of December 31, 2009 include $7.7 million that was transferred on January 4, 2010 to cash and investments segregated in compliance with federal regulations. |
CONTACT: David H. Fleischman Chief Financial Officer TradeStation Group, Inc. 954-652-7000
1 Year Tradestation Grp. (MM) Chart |
1 Month Tradestation Grp. (MM) Chart |
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