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FX Alliance Q2 2012: Revenues up 7%, Net Income flat, volume up 6.5%

by Michael Greenberg
    FX Alliance Q2 2012: Revenues up 7%, Net Income flat, volume up 6.5%
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    Comparing to Q1 2012 FXAll's volume rose 6.5% and Revenues increase by 4.7% while Net Income was up as much as 35%.

    FX Alliance Inc. ("FXall") (NYSE: FX), the leading independent global provider of electronic foreign Exchange trading solutions, today reported financial results for the second quarter of 2012.

    For the second quarter of 2012, revenues increased 7% to $31.4 million from $29.4 million in the second quarter of 2011. Adjusted Net Income decreased 3% to $6.9 million, or $0.23 per share, from $7.1 million or $0.25 per share for the same period last year. Net Income of $6.2 million was consistent with the same period last year. For the six months ended June 30, 2012, revenues increased 8% to $61.4 million from $56.8 million in the same period in 2011. Adjusted Net Income decreased 7% to $12.0 million for the six months ended June 30, 2012, compared to $13.0 million in the same period last year. Net Income for the six months ended June 30, 2012 decreased 5% to $10.8 million from $11.4 million in the same period last year. A full reconciliation of GAAP to non-GAAP financial measures is included with this release.

    Total average daily volume (counting one side of each trade) was $92.4 billion, an increase of 8% from the second quarter of 2011, driven by growth across both Relationship and Active trading. Average daily volume for Relationship Trading was $71.5 billion, 5% higher than the second quarter of 2011, while average daily volume for Active Trading increased 18% from the second quarter of 2011 to $20.8 billion. The average transaction fee per million in the second quarter of 2012 was $4.06, reflecting $3.51 for Relationship Trading and $5.94 for Active Trading.

    Operating expenses were $20.9 million, 13% higher than Q2 2011. Adjusted EBITDA was $14.2 million, down from $14.8 million in Q2 2011. The Adjusted EBITDA margin was 45% compared to 50% in the second quarter of 2011.

    The effective tax rate for the second quarter was 39.8% compared to 42.8% in the second quarter of 2011.

    Capital expenditures for the quarter ended June 30, 2012 were $3.9 million, consistent with the same period in 2011.

    At June 30, 2012, cash, cash equivalents and investments available-for-sale were $68.8 million.

    table.tableizer-table {border: 1px solid #CCC; font-family: Arial, Helvetica, sans-serif; font-size: 12px;} .tableizer-table td {padding: 4px; margin: 3px; border: 1px solid #ccc;}

    .tableizer-table th {background-color: #104E8B; color: #FFF; font-weight: bold;}

    Three Months Ended June 30 Six Months Ended June 30
    2012201120122011
    Revenues
    Transaction fees$23,987 $22,821 $46,792 $43,336
    User, Settlement , and license fees7,4096,60814,62513,477
    Total revenues31,39629,429 61,41756,813
    Operating Expenses
    Salaries and benefits12,70312,46026,81424,590
    Technology1,9401,4483,8383,032
    General and administrative1,9891,5234,1002,992
    Marketing355356696789
    Professional fees1,2953512,640778
    Depreciation and amortization2,6572,4345,2274,866
    Total operating expenses20,93918,57243,31537,047
    Operating income10,45710,85718,10219,766
    Interest and other income (expense), net (122)51 (80)141
    Income before income taxes10,33510,90818,02219,907
    Provision for income taxes4,1164,6737,1798,527
    Net income6,2196,23510,84311,380
    Accretion and allocated earnings of preferred stock- 2,9541,2765,604
    Net income allocated to common stockholders$6,219 $3,281 $9,567 $5,776
    Earnings per common share:
    Basic$0.22 $0.16 $0.36 $0.27
    Diluted$0.21 $0.15 $0.35 $0.27
    Weighted-average common shares outstanding:
    Basic28,336,56621,043,89926,769,95821,043,899
    Diluted29,433,79721,582,98927,712,67821,517,390
    Net Income per common share including
    conversion of preferred at beginning of period:
    Basic[1]$0.22 $0.22 $0.38 $0.40
    Diluted[1]$0.21 $0.22 $0.37 $0.40
    Adjusted Net Income per common share
    including conversion of preferred at beginning of period:
    Basic[1]$0.24 $0.25 $0.43 $0.46
    Diluted[1]$0.23 $0.25 $0.41 $0.45
    Adjusted Weighted-average common shares outstanding
    including conversion of preferred at beginning of period:
    Basic[1]28,336,56628,284,63728,321,54528,284,637
    Diluted[1]29,433,79728,823,72729,264,26528,758,128
    [1] Figures reflect non-GAAP financial measures

    Comparing to Q1 2012 FXAll's volume rose 6.5% and Revenues increase by 4.7% while Net Income was up as much as 35%.

    FX Alliance Inc. ("FXall") (NYSE: FX), the leading independent global provider of electronic foreign Exchange trading solutions, today reported financial results for the second quarter of 2012.

    For the second quarter of 2012, revenues increased 7% to $31.4 million from $29.4 million in the second quarter of 2011. Adjusted Net Income decreased 3% to $6.9 million, or $0.23 per share, from $7.1 million or $0.25 per share for the same period last year. Net Income of $6.2 million was consistent with the same period last year. For the six months ended June 30, 2012, revenues increased 8% to $61.4 million from $56.8 million in the same period in 2011. Adjusted Net Income decreased 7% to $12.0 million for the six months ended June 30, 2012, compared to $13.0 million in the same period last year. Net Income for the six months ended June 30, 2012 decreased 5% to $10.8 million from $11.4 million in the same period last year. A full reconciliation of GAAP to non-GAAP financial measures is included with this release.

    Total average daily volume (counting one side of each trade) was $92.4 billion, an increase of 8% from the second quarter of 2011, driven by growth across both Relationship and Active trading. Average daily volume for Relationship Trading was $71.5 billion, 5% higher than the second quarter of 2011, while average daily volume for Active Trading increased 18% from the second quarter of 2011 to $20.8 billion. The average transaction fee per million in the second quarter of 2012 was $4.06, reflecting $3.51 for Relationship Trading and $5.94 for Active Trading.

    Operating expenses were $20.9 million, 13% higher than Q2 2011. Adjusted EBITDA was $14.2 million, down from $14.8 million in Q2 2011. The Adjusted EBITDA margin was 45% compared to 50% in the second quarter of 2011.

    The effective tax rate for the second quarter was 39.8% compared to 42.8% in the second quarter of 2011.

    Capital expenditures for the quarter ended June 30, 2012 were $3.9 million, consistent with the same period in 2011.

    At June 30, 2012, cash, cash equivalents and investments available-for-sale were $68.8 million.

    table.tableizer-table {border: 1px solid #CCC; font-family: Arial, Helvetica, sans-serif; font-size: 12px;} .tableizer-table td {padding: 4px; margin: 3px; border: 1px solid #ccc;}

    .tableizer-table th {background-color: #104E8B; color: #FFF; font-weight: bold;}

    Three Months Ended June 30 Six Months Ended June 30
    2012201120122011
    Revenues
    Transaction fees$23,987 $22,821 $46,792 $43,336
    User, Settlement , and license fees7,4096,60814,62513,477
    Total revenues31,39629,429 61,41756,813
    Operating Expenses
    Salaries and benefits12,70312,46026,81424,590
    Technology1,9401,4483,8383,032
    General and administrative1,9891,5234,1002,992
    Marketing355356696789
    Professional fees1,2953512,640778
    Depreciation and amortization2,6572,4345,2274,866
    Total operating expenses20,93918,57243,31537,047
    Operating income10,45710,85718,10219,766
    Interest and other income (expense), net (122)51 (80)141
    Income before income taxes10,33510,90818,02219,907
    Provision for income taxes4,1164,6737,1798,527
    Net income6,2196,23510,84311,380
    Accretion and allocated earnings of preferred stock- 2,9541,2765,604
    Net income allocated to common stockholders$6,219 $3,281 $9,567 $5,776
    Earnings per common share:
    Basic$0.22 $0.16 $0.36 $0.27
    Diluted$0.21 $0.15 $0.35 $0.27
    Weighted-average common shares outstanding:
    Basic28,336,56621,043,89926,769,95821,043,899
    Diluted29,433,79721,582,98927,712,67821,517,390
    Net Income per common share including
    conversion of preferred at beginning of period:
    Basic[1]$0.22 $0.22 $0.38 $0.40
    Diluted[1]$0.21 $0.22 $0.37 $0.40
    Adjusted Net Income per common share
    including conversion of preferred at beginning of period:
    Basic[1]$0.24 $0.25 $0.43 $0.46
    Diluted[1]$0.23 $0.25 $0.41 $0.45
    Adjusted Weighted-average common shares outstanding
    including conversion of preferred at beginning of period:
    Basic[1]28,336,56628,284,63728,321,54528,284,637
    Diluted[1]29,433,79728,823,72729,264,26528,758,128
    [1] Figures reflect non-GAAP financial measures
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