Van Der Moolen (NYSE:VDM)
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Van der Moolen (NYSE:VDM) (AEX:VDMN) announces that it report a net loss
attributable to its common shareholders of €
4.3 million in the first quarter 2007 compared with €
45.1 million loss in the fourth quarter of 2006 and a profit of €
11.1 million in the first quarter of 2006.
Key Figures
Euros millions
1st quarter 2007
1st quarter 2006
4th quarter 2006
Revenues
39.6
39.0
2%
36.8
8%
Operating profit (loss)
(1.0)
29.3
-103%
0.9
-211%
Profit (loss) for the period
(4.4)
14.0
-131%
(43.5)
-90%
Profit (loss) attributable to common equity holders of the Company
(4.3)
11.1
-139%
(45.1)
-90%
Guarantee capital
279.5
451.1
-38%
298.6
-6%
Per common share data (Euros x 1)
Profit (loss)
(0.09)
0.25
-138%
(0.99)
-91%
Diluted profit (loss)
(0.09)
0.25
-138%
(0.99)
-91%
Average US dollar/Euro rate
0.76
0.83
-8%
0.78
-3%
’’Obviously
these are changing and challenging times for the specialist business in
the US on the NYSE commented Richard den Drijver, chief executive
officer of Van der Moolen Holding and chairman and chief executive
officer of Van der Moolen specialist. The implementation of the NYSE
hybrid system is a learning curve for the company and we have a proven
track record in Europe in changing from floor trading to screen trading
and we see it as a challenge to be successful in this process. We see
the value of the NYSE hybrid system and the value that it brings to the
investing public with regard to trading transparency, committing capital
and providing liquidity to the investor’s
community”.
Results for the first quarter 2007
Revenues
At € 39.6 million, our reported revenues in
the first quarter were 8% higher than in the fourth quarter of 2006 and
2% above those earned in the first quarter of 2006. For comments on the
developments of the revenues we refer to our press release dated April
24, 2007. For a more detailed description of the development trends of
our business segments we refer to our press release released March 15,
2007.
Operating expenses
Total operating expenses in the first quarter 2007 were €
4.2 million higher than those recognized in the fourth quarter 2006 and €
8.9 million higher than the first quarter 2006. Factors that strongly
influenced the comparison with the fourth quarter and/or first quarter
2006 are set out below.
Employee benefit expenses increased by €
4.7 million and € 7.3 million compared to
the fourth and first quarter of 2006, respectively. This increase is
mainly due to severance payment expenses in the amount of €
2.0 million related to the reduction of employees in VDMS and VDM
Effectenspecialist Amsterdam, negatively affecting net income by €
1.6 million. In addition, variable employee compensation and benefit
expense increased by € 3.1 million and €
4.5 million compared to the fourth and first quarter of 2006,
respectively. This increase is mainly attributable to changes in the
relative contribution of the different bonus arrangements in place
throughout the Group. The variable employee compensation is almost
fully attributable to the strong performance of the European Trading
segment.
G&A expenses decreased by € 1.3 million
and € 0.4 million compared to the fourth
quarter and first quarter of 2006, respectively. The decrease is
mainly due to the cost cutting focus of management in the first
quarter of 2007 as well as a one off amount of €
0.6 million due to the for VDM favourable settlement of accrued legal
fees of a former partner of VDMS.
Operating profit
First quarter 2007 operating loss was € 1.0
million, compared with € 0.9 million profit
in the preceding quarter and € 29.3 million
profit in the first quarter of 2006. Operating profit for the first
quarter of 2006 was positively influenced by a gain of €
22.0 million related to the NYSE consideration received in March 2006,
following the NYSE merger.
Excluding the other gains and losses (net), the amortization expense and
the impairment of fixed assets, operating profit amounted to €
0.1 million compared with € 1.4 million in
the fourth quarter 2006 and € 8.3 million in
the first quarter 2006. The operating margin calculated on this basis
was 0.3% in the first quarter 2006, compared to 3.8% and 21.3% in the
fourth quarter and first quarter 2006, respectively.
Net financing costs
Net financing costs amounted to € 2.2 million
in the first quarter 2007, compared to € 2.4
million recognized in the fourth quarter 2006 and €
3.8 million recognized in the first quarter 2006. The net financing
costs of the first quarter 2006 include financing costs amounting to €
1.1 million related to the financing preferred shares. As per April 5,
2006, following the approval of proposed changes in the Articles of
Association by the AGM, the financing preferred shares are presented as
equity instrument under IFRS. In conformity with this treatment, the
preferred financing dividend is, as from April 5, 2007, no longer
classified as a component of finance costs.
Income tax
Income tax expense in the first quarter 2007 was €
1.2 million, representing a consolidated effective tax rate of 57%
(negatively) against a € 42.0 million expense
in the preceding quarter and a charge of €
11.5 million, or 51%, in the first quarter of 2006. The consolidated
effective tax rate in the current quarter reflects the impact of the
non-recognition of the (net) deferred tax asset positions related to our
US activities. As the deferred tax assets resulting from our US
activities are not recognized, no recognition of a tax benefit in the
income tax line of the profit and loss statement is applicable.
EPS
The weighted average number of outstanding shares to calculate basic
earnings per share is 46.680.891, being the number outstanding at
year-end 2006 (excluding treasury shares) with - in addition - the
weighted impact of the shares issued on January 2, 2007 in relation to
the earn out
2005 of the acquisition of Curvalue and the shares issuable in respect
of the earn-out 2006, which are considered to be "earned" at January 1,
2007.
Loss per common share was €0.09 in the
first quarter 2007, compared to a loss of €0.99
and a profit of €0.25 in the fourth and first
quarter of 2006, respectively.
Balance sheet
Balance sheet total
On March 31, 2007 our Balance Sheet total was €
2.2 billion compared to a Balance sheet total of €
1.7 billion recognized at December 31, 2006.
Intangible assets
Intangible assets, including goodwill, decreased from €
84.9 million at December 31, 2006 to
€ 84.3 million at March 31, 2007. This
decrease is almost fully due to the amortization of amortizable
intangible fixed assets in the first quarter of 2007 and the impact of
the devaluation of the US currency against the euro.
Guarantee capital
Guarantee capital, which consists of total equity plus the non-current
portion of our subordinated indebtedness (including financing preferred
capital and capital contributions from minority members), decreased from €
298.6 million to € 279.5 million during the
period under review.
This decrease is mainly due to the loss contribution during the period,
a € 15 million repayment of subordinated
borrowings and a € 0.3 million negative
change in fair value reserve.
Cash and cash equivalents
The Group has approximately € 10 million of
free-available cash (including disposition on security positions and
other assets) (December 31, 2006: € 19
million). Further, it has € 15 million
available in short-term committed credit lines.
Non-current cash and cash equivalents
The non-current cash and cash equivalents reflect that part of cash and
cash equivalents that is held by VDM Specialists for purposes of
compliance with the Net Liquid Asset (NLA) requirement set by the New
York Stock Exchange. The total NLA requirement amounts to $ 121.2
million at March 31, 2007. It is our current assessment that the NLA
requirement will be reduced by approximately $ 27 million in the
remainder of 2007.
Available for sale assets
The balance sheet at March 31, 2007, reflects the number of NYSE Group
shares owned, valued at the quoted bid price of those shares.
Cash flow
Cash flow from operating activities
Cash flow from operating activities amounted to €
76.6 million negative in the first quarter of 2007, mainly due to the
first quarter loss and a cash outflow of €
89.5 million due to the development of our trading position in the first
quarter, which is partly offset by the € 12.0
million release from the non-current cash and cash equivalents.
Cash flow from investing activities
Cash flow from investing activities amounted to €1.0
million negative, mainly related to investment in software and tangible
fixed assets.
Cash flow from financing activities
Cash flow from financing activities amounted to €
25.3 million negative, mainly caused by the repayment of subordinated
debt in March 2007, interest payments and repayment to minority members.
Subsequent events
Preferred financing shares A
On April 26, 2007, the AGM approved the repurchase and cancellation of
251,000 cumulative financing preferred shares A of the Company at a
purchase price of € 10.405.148.
Disclaimer:
This press release contains forward-looking statements within the
meaning of, and which have been made pursuant to, the Private Securities
Litigation Reform Act of 1995. All statements regarding our future
financial condition, results of operations and business strategy, plans
and objectives are forward-looking. Statements containing the words “anticipate,”
“believe,” “intend,”
“estimate,” “expect,”
“hope,” and words
of similar meaning are forward-looking. In particular, the following are
forward-looking in nature: statements with regard to strategy and
management objectives; pending or potential acquisitions; pending or
potential litigation and government investigations, including litigation
and investigations concerning specialist trading in the U.S.; future
revenue sources; the effects of changes or prospective changes in the
regulation or structure of the securities exchanges on which our
subsidiaries operate; and trends in results, performance, achievements
or conditions in the markets in which we operate. These forward-looking
statements involve risks, uncertainties and other factors, some of which
are beyond our control, which may cause our results, performance,
achievements or conditions in the markets in which we operate to differ,
possibly materially, from those expressed or implied in these
forward-looking statements. We describe certain important factors to
consider in connection with these forward-looking statements under “Key
Information – Risk Factors”
and elsewhere in our annual filing with the U.S. Securities and Exchange
Commission on Form 20-F. We caution you not to place undue reliance on
these forward-looking statements, which reflect our management’s
view only as of the date of this Report. We have no obligation to update
these forward-looking statements.
Van der Moolen Holding N.V.
Consolidated Profit and Loss Account
(IFRS, Unaudited)
(amounts in millions of Euros, except per share data)
Q1
Q1
%
Q4
%
2007
2006
2006
Revenues
39.6
39.0
2%
36.8
8%
Other gains and losses - net
-
22.0
-100%
0.5
-
Exchange, clearing and brokerage fees/trading licenses
(12.4)
(10.5)
19%
(11.9)
5%
Employee benefit expense
(19.9)
(12.6)
58%
(15.2)
31%
Depreciation and amortization expenses
(1.7)
(1.6)
5%
(1.4)
20%
General and administrative expenses
(6.6)
(7.0)
-6%
(7.9)
-17%
Total operating expenses
(40.6)
(31.7)
28%
(36.4)
12%
Operating profit (loss)
(1.0)
29.3
-103%
0.9
-212%
Net financing costs
(2.2)
(3.8)
(2.4)
Profit (loss) before income tax
(3.2)
25.5
-113%
(1.5)
113%
Income tax benefit / (expense)
(1.2)
(11.5)
(42.0)
Profit (loss) for the period
(4.4)
14.0
-132%
(43.5)
-90%
Profit attributable to minority interest
(1.1)
2.9
0.6
Preferred financing dividend
1.0
-
1.0
Profit (loss) attributable to common equity holders of the Company
(4.3)
11.1
-139%
(45.1)
-90%
Average number of common shares outstanding
46,680,891
44,970,390
4%
45,504,926
3%
Diluted average number of common shares outstanding
46,680,891
44,987,662
4%
46,680,891
0%
Per common share data:
Profit (loss) per common share
(0.09)
0.25
-138%
(0.99)
-91%
Diluted profit (loss) per common share
(0.09)
0.25
-138%
(0.99)
-91%
Van der Moolen Holding N.V.
Q1
Q1
%
Q4
%
Revenue breakdown in millions of Euros
2007
2006
2006
US Specialists
6.4
22.6
-72%
16.8
-62%
US others
1.3
-
0.8
63%
European Trading
20.7
7.9
162%
9.6
116%
PMM/CMM Principal Trading
6.3
5.1
24%
5.6
13%
Brokerage activities
4.9
3.4
44%
4.0
23%
Total revenues
39.6
39.0
2%
36.8
8%
Van der Moolen Holding N.V.
Q1
Q1
%
Q4
%
Operating profit before other gains and losses (net), before
amortization of intangible fixed assets and before impairment,
breakdown in millions of Euros
2007
2006
2006
US Specialists
(2.2)
9.1
-124%
6.1
-136%
US others
(0.3)
-
(0.4)
-25%
European Trading
5.0
2.0
150%
(0.5)
-1100%
PMM/CMM Principal Trading
1.6
0.8
100%
0.3
433%
Brokerage activities
(0.4)
(0.3)
33%
(0.8)
-50%
Unallocated and Holding
(3.6)
(3.3)
9%
(3.3)
9%
Total operating profit before other gains and losses (net), before
amortization of intangible fixed assets and before impairment
0.1
8.3
-99%
1.4
-93%
Van der Moolen Holding N.V.
Consolidated Balance Sheet
(IFRS, unaudited)
(amounts in millions of Euros)
March 31, 2007
December 31, 2006
Assets
Non-current assets
Intangible assets
84.3
84.9
Property, plant and equipment
5.9
6.1
Financial fixed assets
17.3
17.2
Available-for-sale financial assets
21.1
21.9
Cash and cash-equivalents
91.0
103.0
219.6
233.1
Current assets
Securities owned
1,600.8
1,077.8
Due from clearing organizations and professional parties
281.7
223.0
Current assets and prepaid expenses
20.1
18.2
Cash and cash-equivalents
83.9
114.9
1,986.5
1,433.9
Total assets
2,206.1
1,667.0
Equity and liabilities
Capital and reserves attributable to the Company's equity holders
209.6
215.3
Minority interest
4.7
4.7
Total equity
214.3
220.0
Non-current liabilities
Capital of minority members
8.9
13.7
Subordinated borrowings
56.3
64.9
Other non-current liabilities
8.1
8.4
73.3
87.0
Current liabilities
Securities sold, not yet purchased
1,385.7
967.7
Due to clearing organizations and professional parties
283.0
212.3
Due to customers
7.4
3.9
Short-term borrowings
28.7
38.9
Bank overdrafts
184.6
112.4
Other current liabilities and accrued expenses
29.1
24.8
1,918.5
1,360.0
Total equity and liabilities
2,206.1
1,667.0
Guarantee capital
279.5
298.6
Van der Moolen Holding N.V.
Movement schedule of shareholders'equity
(IFRS, unaudited)
Movement in shareholders'equity
(Amounts in millions of euros)
3 months
3 months
2007
2006
Shareholders' equity at January 1
215.3
221.2
Adjustment prior year
-
(0.4)
Issued common shares and issuable shares (Curvalue acquisition), net
of shares held in treasury
-
46.7
Contribution to dividend reserve financing preferred shareholders
1.0
-
Currency exchange differences
(2.1)
(4.6)
Profit (loss) attributable to common equity holders of the Company
(4.3)
11.1
Sale of treasury shares
-
0.2
Fair value change on available-for-sale financial assets
(0.3)
(3.0)
(5.7)
50.0
Shareholders' equity at March 31
209.6
271.2
Van der Moolen Holding N.V.
Consolidated statement of cash flow
(IFRS, unaudited)
Consolidated statement of cash flow
(Amounts in millions of Euros)
3 months
2007
3 months
2006
Cash flow from operating activities
(76.6)
(0.6)
Cash flow from investing activities
(1.0)
12.9
Cash flow from financing activities
(25.3)
(15.5)
Currency exchange differences on cash and cash-equivalents, net of
bank overdrafts
(0.3)
0.7
Change in cash and cash-equivalents, net of amounts of bank
overdrafts
(103.2)
(2.5)
Cash and cash-equivalents, net of amounts of bank overdrafts at
January 1,
2.5
1.6
Cash and cash-equivalents, net of amounts of bank overdrafts at
December 31,
(100.7)
(0.9)