14/11/2017 19:00:00

FXCM Group Provides Financial Information for Third Quarter 2017

NEW YORK, 2017-11-14 20:00 CET (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 accounts

104,356

 

 

104,356

 

Active accounts

122,806

 

 

122,806

 

Daily average trades

332,076

 

 

366,350

 

Daily average trades per active account

2.7

 

 

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 days

65

 

 

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 provision

0.4

 

 

1.2

 

Interest on borrowings

9.2

 

 

29.0

 

Gain on derivative liability — Leucadia financing(7)

(4.7

)

 

(6.2

)

General and administrative(8), (9)

(0.1

)

 

1.0

 

Depreciation and amortization

4.8

 

 

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 customers

331,447

 

Due from brokers

33

 

Accounts receivable, net

16,255

 

Tax receivable

221

 

Assets held for sale

40,649

 

Total current assets

509,837

 

 

 

Deferred tax asset

887

 

Office, communication and computer equipment, net

27,921

 

Other intangible assets, net

1,475

 

Other assets

14,029

 

Total assets

$

554,149

 

 

 

Liabilities and members' capital

 

 

 

Current liabilities:

 

Customer account liabilities

$

331,447

 

Accounts payable and accrued expenses

27,169

 

Due to related party

2,483

 

Due to brokers

1,948

 

Credit Agreement – Related Party

64,329

 

Other liabilities

400

 

Liabilities held for sale

2,976

 

Total current liabilities

430,752

 

 

 

Deferred tax liability

282

 

Other liabilities

7,034

 

Total liabilities

438,068

 

 

 

Redeemable non-controlling interest (Leucadia)

49,454

 

 

 

Members’ capital:

 

Members’ capital – Global Brokerage Holdings, LLC

49,454

 

Non-controlling interests

17,173

 

Total members’ capital

66,627

 

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 revenue

382

 

 

870

 

Other income

804

 

 

1,682

 

Total net revenues

43,971

 

 

139,216

 

 

 

 

 

Operating Expenses:

 

 

 

Compensation and benefits

14,762

 

 

40,316

 

Referring broker fees

5,443

 

 

18,710

 

Advertising and marketing

4,017

 

 

11,644

 

Communication and technology

5,494

 

 

17,027

 

Trading costs, prime brokerage and clearing fees

996

 

 

2,511

 

General and administrative

8,542

 

 

25,680

 

Management fee

848

 

 

2,662

 

Depreciation and amortization

4,770

 

 

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 borrowings

9,169

 

 

28,981

 

Loss from continuing operations before income taxes

(5,402

)

 

(16,881

)

 

 

 

 

Income tax provision

383

 

 

1,171

 

 

 

 

 

Loss from continuing operations

(5,785

)

 

(18,052

)

 

 

 

 

Income from discontinued operations, net of tax

42,364

 

 

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

 

 

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