NEW YORK, Feb. 12, 2017 (GLOBE
NEWSWIRE) -- FXCM Inc. (NASDAQ:FXCM) ("FXCM" or the
"Company") today provided additional information regarding the
costs associated with its U.S. retail foreign exchange activities,
which it has agreed to sell to GAIN Capital Holdings, Inc.
("GAIN"). None of FXCM's costs will be transferring to GAIN
and FXCM expects significant cost savings from the wind down of its
U.S. retail foreign exchange operations.
The table below provides information
on net revenues, net income, and Adjusted EBITDA(1) for
FXCM's U.S. subsidiary, Forex Capital Markets LLC, and the rest of
its continuing operations for the nine months ended September 30,
2016 (unaudited):
|
|
|
|
|
|
Nine Months Ended September 30,
2016 |
|
|
|
|
Consolidated |
|
|
|
|
FXCM Inc. |
|
|
Consolidated
FXCM Inc. |
|
Continuing
Operations |
|
(in
Thousands) |
Continuing
Operations |
FXCM US |
Excluding
FXCM US |
|
|
|
|
|
|
Net
Revenues |
$ |
203,463 |
$ |
38,809 |
|
$ |
164,654 |
|
|
|
|
|
|
Net
Income (loss) |
$ |
125,967 |
$ |
(13,886 |
) |
$ |
139,853 |
|
|
|
|
|
|
Adjusted
EBITDA (1) |
$ |
20,507 |
$ |
(9,098 |
) |
$ |
29,605 |
|
|
|
|
Even without its U.S. customers, FXCM remains one
of the largest global retail foreign exchange brokers, and FXCM
anticipates that the increased focus on serving its international
global customer base will drive growth and continued profitability
improvement.
(1) Adjusted EBITDA 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. The Company believes this
non-GAAP measure, when presented in conjunction with the comparable
U.S. GAAP measure, is useful to investors in better understanding
its financial performance as seen through the eyes of management
and facilitates comparisons of historical operating trends across
several periods. The Company believes that investors use Adjusted
EBITDA as a supplemental measure to evaluate the overall operating
performance of companies in its industry that present similar
measures, although the methods used by other companies in
calculating Adjusted EBITDA may differ from the Company's method,
even if similar terms are used to identify such measure.
Adjusted EBITDA provides the Company with an understanding of the
results from the primary operations of its business by excluding
the effects of certain gains, losses or other charges that do not
reflect the normal earnings of its core operations or that may not
be indicative of its future outlook and prospects. Adjusted EBITDA
does not represent and should not be considered as a substitute for
net income or net income attributable to FXCM Inc., each as
determined in accordance with U.S. GAAP. Please refer to the
following table for a reconciliation of Adjusted EBITDA to net
income.
(Unaudited, in thousands) |
Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted
EBITDA |
|
Nine Months Ended September 30, 2016 |
|
|
|
|
|
|
|
|
|
|
FXCM Inc.
Consolidated |
|
|
|
Consolidated
FXCM Inc.
Continuing |
|
|
|
Continuing
Operations |
|
FXCM US |
|
Operations Less
FXCM US |
|
Net
income (loss) |
|
$ |
125,967 |
|
|
$ |
(13,886 |
) |
|
$ |
139,853 |
|
|
Adjustments: |
|
|
|
|
|
|
|
Net
Revenues |
|
|
44 |
|
(1 |
) |
|
- |
|
|
|
44 |
|
|
General and
administrative |
|
|
12,577 |
|
(2 |
) |
|
2,006 |
|
(4 |
) |
|
10,571 |
|
|
Bad debt
recovery |
|
|
(141 |
) |
(3 |
) |
|
(141 |
) |
|
|
- |
|
|
Depreciation and
amortization |
|
|
21,149 |
|
|
|
2,789 |
|
|
|
18,360 |
|
|
Gain on
derivative liabilities - Letter & Credit Agreement |
|
|
(200,375 |
) |
|
|
- |
|
|
|
(200,375 |
) |
|
Interest on
borrowings |
|
|
61,228 |
|
|
|
- |
|
|
|
61,228 |
|
|
Income tax
provision (benefit) |
|
|
58 |
|
|
|
134 |
|
|
|
(76 |
) |
|
Total
adjustments |
|
|
(105,460 |
) |
|
|
4,788 |
|
|
|
(110,248 |
) |
|
Adjusted
EBITDA |
|
$ |
20,507 |
|
|
$ |
(9,098 |
) |
|
$ |
29,605 |
|
|
(1) Represents
a $0.1 million charge for tax receivable agreement payments. |
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(2) Represents
the provision for debt forgiveness of $8.2 million against the
notes receivable from the non-controlling members of Lucid, $5.4
million of professional fees, including fees related to the
Leucadia restructuring transaction, stockholder rights plan and
investigations into historical trade execution practices, partially
offset by $1.0 million of insurance recoveries to reimburse for
costs incurred related to the January 15, 2015 SNB event and the
cybersecurity incident. |
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(3) Represents
the net bad debt recovery related to client debit balances
associated with the January 15, 2015 SNB event. |
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|
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|
(4) Represents
$2.4 million of professional fees relating to investigations into
historical trade execution practices partially offset by $0.4
million of insurance recoveries to reimburse for costs incurred
related to the January 15, 2015 SNB event and the cybersecurity
incident. |
Disclosure Regarding
Forward-Looking Statements
In addition to historical
information, this release contains "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933,
Section 21E of the Securities Exchange Act of 1934 and/or the
Private Securities Litigation Reform Act of 1995, which reflect
FXCM's current views with respect to, among other things, its
operations and financial performance in the future. These
forward-looking statements are not historical facts and are based
on current expectations, estimates and projections about FXCM's
industry, business plans, management's beliefs and certain
assumptions made by management, many of which, by their nature, are
inherently uncertain and beyond our control. Accordingly, readers
are cautioned that any such forward-looking statements are not
guarantees of future performance and are subject to certain risks,
uncertainties and assumptions that are difficult to predict
including, without limitation, risks associated with FXCM's plans
to shut down its US subsidiary and a potential sale of its US
customer accounts, risks associated with FXCM's strategy to focus
on its operations outside the United States, risks associated with
the events that took place in the currency markets on January 15,
2015 and their impact on FXCM's capital structure, risks associated
with FXCM's ability to recover all or a portion of any capital
losses, risks relating to the ability of FXCM to satisfy the terms
and conditions of or make payments pursuant to the terms of the
finance agreements with Leucadia, as well as risks associated with
FXCM's obligations under its other financing agreements, risks
related to FXCM's dependence on FX market makers, market
conditions, risks associated with FXCM's litigation with the
National Futures Association and the Commodity Futures Trading
Commission or any other potential litigation or regulatory
inquiries to which FXCM may become subject, risks associated with
potential reputational damage to FXCM resulting from FXCM's plans
to shut down its US subsidiary, and those other risks described
under "Risk Factors" in FXCM Inc.'s Annual Report on Form 10-K,
FXCM Inc.'s latest Quarterly Report on Form 10-Q, and other reports
or documents FXCM files with, or furnishes to, the SEC from time to
time, which are accessible on the SEC website at sec.gov. This
information should also be read in conjunction with FXCM's
Consolidated Financial Statements and the Notes thereto contained
in FXCM's Annual Report on Form 10-K, FXCM Inc.'s latest Quarterly
Report on Form 10-Q, and in other reports or documents FXCM files
with, or furnishes to, the SEC from time to time, which are
accessible on the SEC website at sec.gov.
These factors should not be construed
as exhaustive and should be read in conjunction with the other
cautionary statements that are included in this release and in our
SEC filings. FXCM Inc. undertakes no obligation to publicly update
or review any forward-looking statement, whether as a result of new
information, future developments or otherwise, except as required
by law.
About FXCM
Inc.
FXCM Inc. (NASDAQ:FXCM) is a
publicly traded company which owns 50.1% of FXCM Group, LLC (FXCM
Group).
FXCM Group is a holding company
of Forex Capital Markets LLC, (FXCM US), 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"]. FXCM Group is owned and operated
by FXCM Inc. (NASDAQ:FXCM) and Leucadia National
Corporation (NYSE:LUK). Leucadia National Corporation is a
multi-billion dollar diversified holding company engaged through
its consolidated subsidiaries in a variety of businesses.
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.
Jaclyn Sales, 646-432-2463
Vice-President, Corporate Communications
jsales@fxcm.com
investorrelations@fxcm.com