14/11/2017 19:00:18

FXCM Group Provides Financial Information for Third Quarter 2017

NEW YORK, Nov. 14, 2017 (GLOBE NEWSWIRE) -- FXCM Group, LLC ("FXCM Group" or "FXCM"), a leading international provider of online foreign exchange trading, CFD trading, spread betting and related services, today provided selected financial information regarding its third quarter 2017 results.

"Despite multi-year low volatility in the currency markets in the third quarter, we were able to generate Adjusted EBITDA of $3.8 million, including a $1.2 million charge for severance expense as we continue to improve our cost structure," said Brendan Callan, CEO of FXCM. "Additionally, we repaid $55.8 million of our loan with Leucadia and now have $67.6 million of principal outstanding on our original $300.0 million loan."

FXCM Group, LLC (US Millions) (unaudited)

Selected Income Statement Data

 

Three Months Ended

September 30, 2017

 

Nine Months Ended

September 30, 2017

Total Net Revenues$44.0  $139.2 
Operating Expenses(1)$40.1  $118.6 
Loss from Continuing Operations$(5.8) $(18.1)
Net Income$47.6  $17.0 
Adjusted EBITDA - Continuing Operations(2)$3.8  $21.7 
        

(1) Excludes depreciation and amortization of $4.8 million and $14.9 million for the three and nine months ended September 30, 2017, respectively.

(2) See reconciliation following

Selected Balance Sheet Data

 

As of

September 30, 2017

Cash and Cash Equivalents$121.2 
Cash and cash equivalents, held for customers$331.4 
Total Assets$554.1 
Credit Agreement to Leucadia (net)(3)$64.3 
Total Members' Capital$66.6 
    

(3) Net of $3.3 million of unamortized discount.

Selected Customer Trading Metrics for Continuing Operations

 

Three Months Ended

September 30, 2017

 

Nine Months Ended

September 30, 2017

Tradeable accounts104,356  104,356 
Active accounts122,806  122,806 
Daily average trades332,076  366,350 
Daily average trades per active account2.7  3.0 
Total trading volume (billions)$616  $1,908 
Trading revenue per million traded$69  $72 
Average customer trading volume per day (billions)$9.5  $9.8 
Trading days65  194 
      
      

Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA(4) - Continuing Operations

(US Millions) (unaudited)

 

Three Months Ended

September 30, 2017

 

Nine Months Ended

September 30, 2017

Net Income

$

47.6

  

$

17.0

 

Adjustments:

   
Net loss attributable to non-controlling interests(5)(11.0) (21.4)
Income from discontinued operations, net of tax(6)(42.4) (13.6)
Income tax provision0.4  1.2 
Interest on borrowings9.2  29.0 
Gain on derivative liability - Leucadia financing(7)(4.7) (6.2)
General and administrative(8), (9)(0.1) 1.0 
Depreciation and amortization4.8  14.9 
Gain on sale of equity method investment(10)-  (0.2)

Total Adjustments

(43.8

)

 

4.7

 

Adjusted EBITDA(4) - Continuing Operations

$

3.8

  

$

21.7

 
        

(4) Adjusted EBITDA from Continuing Operations is a Non-GAAP measure that is not prepared under any comprehensive set of accounting rules or principles and does not reflect all of the amounts associated with the Company's results of operations as determined in accordance with U.S. GAAP.

(5) Represents the elimination of the share of net loss allocated among the non-controlling interests to calculate total consolidated net income (loss) from the Company's operations.

(6) Represents the elimination of the income or loss attributable to discontinued operations, net of tax, in order to calculate income attributable to continuing operations only.

(7) Represents the elimination of the gain or loss attributable to the derivative liability embedded in the Company's financing agreement with Leucadia, as it is a non-operating, non-cash gain or loss.

(8) For the three months ended September 30, 2017, represents an adjustment to the charges to reserve for restitution related to trade execution practices prior to August 2010.

(9) For the nine months ended September 30, 2017, represents the elimination of charges to reserve for restitution related to trade execution practices prior to August 2010 and client adjustments related to various trading platform issues.

(10) Represents the elimination of a gain on sale of an equity method investment which was impaired in 2016.

Non-GAAP Financial Measures

In addition to financial results reported in accordance with U.S. GAAP, we have provided Adjusted EBITDA, a Non- GAAP financial measure. We believe this Non-GAAP measure, when presented in conjunction with the comparable U.S. GAAP measure, is useful to investors in better understanding our current financial performance as seen through the eyes of management and facilitates comparisons of our historical operating trends across several periods. We believe that investors use Adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of companies in our industry that present similar measures, although the methods used by other companies in calculating Adjusted EBITDA may differ from our method, even if similar terms are used to identify such measure.

Adjusted EBITDA provides us with an understanding of the results from the primary operations of our business by excluding the effects of certain gains, losses or other charges that do not reflect the normal earnings of our core operations or that may not be indicative of our future outlook and prospects. Internally, Adjusted EBITDA is used by management for various purposes, including to evaluate our operating performance and operational strategies, and as a basis for strategic planning, forecasting and for compensation purposes.

Adjusted EBITDA does not represent and should not be considered as a substitute for net income or net income attributable to FXCM Group, LLC., each as determined in accordance with U.S. GAAP. Adjusted EBITDA reflects the following adjustments to net income:

Regulatory and Legal Costs. Adjustments have been made to eliminate certain costs or recoveries (including client reimbursements, regulatory fines and settlements from lawsuits) associated with certain regulatory and legal matters. Given the nature of these expenses, they are not viewed by management as expenses incurred in the ordinary course of business and we believe it is useful to show the effects of eliminating these expenses.

Gain on sale of equity method investment. An adjustment has been made to eliminate the gain on the sale of an equity method investment which had previously been impaired in December 2016. Given the nature of this gain, it is not viewed by management as income in the ordinary course of business and we believe it is useful to show the effects of eliminating this gain.

About FXCM Group, LLC

FXCM is a leading provider of online foreign exchange (FX) trading, CFD trading, spread betting and related services. The company's mission is to provide global traders with access to the world's largest and most liquid market by offering innovative trading tools, hiring excellent trading educators, meeting strict financial standards and striving for the best online trading experience in the market. Clients have the advantage of mobile trading, one-click order execution and trading from real-time charts. In addition, FXCM offers educational courses on FX trading and provides trading tools proprietary data and premium resources. FXCM Pro provides retail brokers, small hedge funds and emerging market banks access to wholesale execution and liquidity, while providing high and medium frequency funds access to prime brokerage services via FXCM Prime.

Trading foreign exchange and CFDs on margin carries a high level of risk, which may result in losses that could exceed your deposits, therefore may not be suitable for all investors. Read full disclaimer.

FXCM Group is a holding company of Forex Capital Markets Limited, inclusive of all EU branches (FXCM UK), FXCM Australia Pty. Limited (FXCM AU), and all affiliates of aforementioned firms, or other firms under the FXCM group of companies [collectively "FXCM"].

Jaclyn Sales, 646-432-2463

Vice-President, Corporate Communications

jsales@fxcm.com 

 
FXCM Group, LLC and Subsidiaries
 
Consolidated Statement of Financial Condition
 
As of September 30, 2017

(In thousands, unaudited)

 

Assets

 
Current assets: 
Cash and cash equivalents$121,232 
Cash and cash equivalents, held for customers331,447 
Due from brokers33 
Accounts receivable, net16,255 
Tax receivable221 
Assets held for sale40,649 
Total current assets509,837 
  
Deferred tax asset887 
Office, communication and computer equipment, net27,921 
Other intangible assets, net1,475 
Other assets14,029 

Total assets

$554,149 
  

Liabilities and members' capital

 
  
Current liabilities: 
Customer account liabilities$331,447 
Accounts payable and accrued expenses27,169 
Due to related party2,483 
Due to brokers1,948 
Credit Agreement - Related Party64,329 
Other liabilities400 
Liabilities held for sale2,976 
Total current liabilities430,752 
  
Deferred tax liability282 
Other liabilities7,034 

Total liabilities

438,068 
  

Redeemable non-controlling interest (Leucadia)

49,454 
  

Members' capital:

 
Members' capital - Global Brokerage Holdings, LLC49,454 
Non-controlling interests17,173 
Total members' capital66,627 

Total liabilities, Redeemable non-controlling interest (Leucadia) and Members' capital

$554,149 
    

 
FXCM Group, LLC and Subsidiaries
 
Consolidated Statements of Operations
 
For the Three and Nine Months Ended September 30, 2017

(In thousands, unaudited)

 
 

For the Three

Months Ended

September 30, 2017

 

Year to Date

Period Ended

September 30, 2017

    

Revenues:

   
Trading revenue$42,785  $136,664 
Net interest revenue382  870 
Other income804  1,682 

Total net revenues

43,971  139,216 
    

Operating Expenses:

   
Compensation and benefits14,762  40,316 
Referring broker fees5,443  18,710 
Advertising and marketing4,017  11,644 
Communication and technology5,494  17,027 
Trading costs, prime brokerage and clearing fees996  2,511 
General and administrative8,542  25,680 
Management fee848  2,662 
Depreciation and amortization4,770  14,908 

Total operating expenses

44,872  133,458 
    

Operating (loss) income

(901) 5,758 
    

Other Expense

   
Gain on derivative liability - Credit Agreement(4,668) (6,172)
Gain on equity method investments, net-  (170)
Interest on borrowings9,169  28,981 

Loss from continuing operations before income taxes

(5,402) (16,881)
    
Income tax provision383  1,171 
    

Loss from continuing operations

(5,785) (18,052)
    
Income from discontinued operations, net of tax42,364  13,613 
    

Net income (loss)

36,579  (4,439)
    
Net loss attributable to non-controlling interests(11,028) (21,407)
    
Net income attributable to FXCM Group, LLC$47,607  $16,968 


This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.

The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: FXCM, Inc. via Globenewswire

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