DARTs Up 50% Year over Year PLANTATION, Fla., Oct. 23
/PRNewswire-FirstCall/ -- TradeStation Group, Inc. (NASDAQ GS:
TRAD) today reported for the 2007 third quarter record net revenues
of $40.3 million, record net income of $9.7 million, record
earnings per share of 22 cents, and record daily average revenue
trades (DARTs) of nearly 88,000. TradeStation Group's 2007 third
quarter net income of $9.7 million, or 22 cents per share
(diluted), was a 24% increase from 2006 third quarter net income of
$7.8 million, or 17 cents per share (diluted). The company's 2007
third quarter net revenues of $40.3 million were a 25% increase
from 2006 third quarter net revenues of $32.2 million. "As proud as
we are of our third quarter results, we are even more excited about
our current growth initiatives," said Salomon Sredni, CEO of
TradeStation Group. "Our most recent growth initiative - integrated
forex trading from the TradeStation platform - which we launched
July 1, has generated early indications of accelerated forex
account growth and trading activity. We expect this increased
account growth and activity to continue as we focus our marketing
efforts on this new offering." TradeStation Reports Record DARTs
and Total Accounts For the 2007 third quarter, TradeStation
experienced the following year- over-year growth in DARTs with
respect to equities, futures and forex accounts: Q3 07 Q3 06 %
Increase ---------------------------------------- Daily Average
Revenue Trades 87,937 58,457 50% The company also published today,
in a separate announcement, its DARTs, Total Client Assets, Average
Equities Client Credit Balances and Average Equities Client Margin
Balances for the month of September 2007. TradeStation's 80,589
DARTs in September 2007 was a 34% increase over September 2006
DARTs of 60,007. TradeStation had 35,071 brokerage accounts at
September 30, 2007, a 16% increase from September 30, 2006.
TradeStation's Average Client Trades 640 Times per Year and Has an
Average Account Balance of $79,000 for Equities and $19,000 for
Futures TradeStation's brokerage client account metrics are among
the very best in the industry. TradeStation brokerage clients
generated the following client account metrics in the 2007 third
quarter: Client Trading Activity
-------------------------------------- Annualized average revenue
per account $4,356 Annualized trades per account 640 Client Account
Assets -------------------------------------- Average assets per
account (Equities) $79,000 Average assets per account (Futures)
$19,000 While, on an annualized basis during the 2007 third
quarter, the average TradeStation account traded 640 times per
year, or 53 times per month, the average TD Ameritrade and E-Trade
account traded about 12 times per year, or about one time per
month. Also, TradeStation's average assets per equities account
were substantially higher than the average assets per account of TD
Ameritrade and E-Trade. "Our impressive third quarter DARTs and
client activity per account truly demonstrate the power of our
trading platform and business model," said David Fleischman, the
company's CFO. "Over the past 6 years we have built a robust,
highly-profitable active trading business for intraday and
short-term traders even though the market volatility index - the
VIX - has been historically low during that period. With the VIX
hitting a three-year high in August, our DARTs and per account
trading activity soared, confirming that our value proposition has
not diminished over time." Company Purchases 334,840 Shares under
Stock Buy Back Plan In the 2007 third quarter, the company
purchased 334,840 shares of its common stock pursuant to its stock
buy back plan for a total purchase price of $3.7 million. Since
buying under the plan began November 13, 2006, through September
30, 2007, the company has purchased 1,073,465 shares for a total
purchase price of $13.2 million. Under the stock buy back plan, the
company is authorized to purchase up to $60 million of its common
stock using available and unrestricted cash, over a 4-year period,
in the open market or through privately-negotiated transactions
pursuant to one or more Rule 10b5-1 plans or programs. Pursuant to
the plan, $1,250,000 of company cash per month during each month of
the 4-year period (i.e., $15 million per 12-month period and $60
million for the 4-year period) has been authorized to be used to
purchase company shares at prevailing prices, subject to compliance
with applicable securities laws, rules and regulations, including
Rules 10b5-1 and 10b-18. The buy back plan does not obligate the
company to acquire any specific number of shares in any period, and
may be modified, suspended, extended or discontinued at any time
without prior notice. Company Provides 2007 Fourth Quarter Business
Outlook TradeStation today also published its 2007 Fourth Quarter
Business Outlook. The company's 2007 Fourth Quarter Business
Outlook estimated ranges are as follows: 2007 FOURTH QUARTER
BUSINESS OUTLOOK (In Millions, Except Per Share Data) Fourth
Quarter 2007 ----------------------- REVENUES $37.0 to $40.0
EARNINGS PER SHARE (Diluted) $0.19 to $0.21 The company's Business
Outlook estimated range of earnings per share (diluted) for the
2007 fiscal year is now $0.76 to $0.78. The company's 2007 fourth
quarter estimated ranges are based on numerous assumptions,
including: basing the midpoints of the ranges, in part, on average
daily revenue per account over the first nine months of 2007 (the
period used and the formula and criteria applied often vary with
each quarterly Business Outlook based upon management's judgment
each quarter concerning the best assumptions to use); the rate of
growth and impact of new forex accounts and trading activity
following the recent launch of the company's new forex offering;
anticipated growth and trading activity of active trader equities
and futures accounts; interest rates (and the extent to which they
will or will not increase or decrease); the timing of expenses
relating to company growth initiatives as compared to the timing of
anticipated benefits from those initiatives; and numerous other
assumptions concerning the company's business and industry, market
conditions, and various decisions, acts or failures to act both
within and outside of the company's control. All assumptions,
expectations and beliefs relating to the Business Outlook are
forward-looking in nature and actual results may differ materially
from those estimated, including, but not limited to, as a result
of, or as indicated by, the issues, uncertainties and risk factors
set forth and referenced above and below. Conference Call/Webcast
At 11:00, a.m., Eastern Time, today, the senior management of
TradeStation Group will conduct an analyst conference call to
discuss the company's 2007 third quarter results and its 2007
Fourth Quarter Business Outlook. All company shareholders and the
public are invited to listen. The telephone conference will be
broadcast live via the Internet at http://www.tradestation.com/.
The live webcast will be accompanied by slides of graphs and
charts. A rebroadcast of the call will be accessible for
approximately 90 days. About TradeStation Group, Inc.
------------------------------ TradeStation Group, Inc. (NASDAQ GS:
TRAD), through its principal operating subsidiary, TradeStation
Securities, Inc., offers the TradeStation platform to the active
trader and certain institutional trader markets. TradeStation is an
electronic trading platform that offers state-of-the-art "direct
market access" (DMA) or "direct-access" order execution and enables
clients to design, test, optimize, monitor and automate their own
custom Equities, Options, Futures and Forex trading strategies. In
2007, TradeStation was named, for the third year in a row, Best
Futures Brokerage and, for the fifth year in a row, Best
Direct-Access Stock Broker, Best Professional Platform and Best
Institutional Platform, in "Technical Analysis of Stocks and
Commodities" magazine. TradeStation Securities, Inc. (Member NYSE,
FINRA, SIPC, NSCC, DTC, OCC & NFA) is a licensed securities
broker-dealer and a registered futures commission merchant, and
also a member of the American Stock Exchange, Boston Options
Exchange, Chicago Board Options Exchange, Chicago Stock Exchange,
International Securities Exchange, NYSE ARCA and Philadelphia Stock
Exchange. The company's technology subsidiary, TradeStation
Technologies, Inc., develops and offers strategy trading software
tools and subscription services. Its London-based subsidiary,
TradeStation Europe Limited, an FSA-authorized brokerage firm,
introduces UK and other European accounts to TradeStation
Securities. Forward-Looking Statements - Issues, Uncertainties and
Risk Factors This press release, including the 2007 fourth quarter
and full year Business Outlook estimated ranges contained in this
press release, and today's earnings conference call, contain
statements and estimates that are forward- looking and are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. When used in this press release, or
the conference call, the words "anticipate(s)," "anticipated,"
"anticipation," "assume(s)," "assumption(s)," "become(s),"
"belief(s)," "believe(s)," "believed," "could," "designed,"
"estimate," "estimates," "estimated," "expect(s)," "expected,"
"expectation(s)," "going forward," "future," "hopeful," "hope(s),"
"intend(s)," "intended," "look forward," "may," "might,"
\"opportunity," "opportunities," "outlook(s)," "pending,"
"plan(s)," "planned," "potential," "scheduled," "shall," "should,"
"think(s)," "to be," "upcoming," "well-positioned," "will," "wish,"
"would," and similar expressions, if and to the extent used, are
intended to identify forward-looking statements. All
forward-looking statements are based largely on current
expectations and beliefs concerning future events that are subject
to substantial risks and uncertainties. Actual results may differ
materially from the results herein suggested or suggested in the
conference call. Factors that may cause or contribute to the
various potential differences include, but are not limited to, the
following: - changes in the condition of the securities and futures
markets, including, but not limited to, changes in the combined
average volume of the major U.S. equities and futures exchanges and
in market volatility, which tend to significantly affect customer
trading volume at TradeStation (for example, market volatility in
August, with the VIX reaching a three-year high, helped generate a
significant increase in client trading volume); - the level of
success of the company's recently-launched upgrade of its forex
trading offering (when a similar upgrade was made to the company's
futures trading offering in 2003, futures account and trading
volume growth occurred rapidly, but, even though early results are
encouraging, no assurance can be made that similar positive results
will occur with the company's forex trading offering); - the
company's ability (or lack thereof), based upon market conditions,
the level of success of its marketing and product development and
enhancement efforts, product and service quality and reliability,
competition (including both price and quality-of-offering
competition, which are intense) and other factors, to achieve
significant, or any, net increases in DARTs, brokerage accounts and
brokerage revenues sequentially or year over year (for example,
TradeStation's DARTs decreased sequentially from second to third
quarter in 2004 and in 2006, and net revenues decreased
sequentially from second to third quarter 2006, and these items may
decrease sequentially or year over year in subsequent periods); -
with respect to net new customer accounts, the company's ability
(or lack thereof) to maintain or increase the rate of quarterly
gross account additions and to reduce the rate of quarterly account
attrition (which has risen in recent quarters), which may not be
successful despite the company's recent and planned efforts to
improve sales, marketing and customer service and retention methods
and practices, and the company's expectations that attrition will
begin to decrease in the 2007 fourth quarter; - unanticipated
infrastructure, capital or other large expenses, and unforeseen or
unexpected liabilities and claims, the company may face as it seeks
to grow its U.S. active trader market share in equities, futures
and forex business, and its institutional and non-U.S. trader
market businesses (the company has no significant prior experience
with forex, institutional and non-U.S. trader marketing, sales or
product development operations), including potential acquisition or
business combination risks, costs and expenses (such as
professional fees and, in the case of an acquisition, amortization
expense) incurred in the event the company acquires or combines
with other businesses; - the effect of unanticipated increased
infrastructure costs that may be incurred as the company grows its
brokerage firm operations, adds accounts and introduces and expands
existing and new product and service offerings, or acquires other
businesses; - change or lack of change in the federal funds rate of
interest that is different than what the company anticipates; -
unauthorized intrusion and criminal activity in customer accounts
by persons who unlawfully access customer accounts and then place
orders or other transactions in those accounts (the company has
recently experienced these types of occurrences, and has taken
measures and is in the process of completing measures to limit or
prevent future occurrences, but no assurance can be made that any
such measures taken by the company will be successful or that
future occurrences will not result in substantial account losses
that will ultimately be borne by the company); - technical
difficulties, errors or failures in the company's electronic and
software products, services and systems relating to market data,
order execution and trade processing and reporting, and other
software or system errors and failures (also, the company does not
maintain a seamless, redundant back-up system to its order
execution systems, which could materially intensify the negative
consequences of any such difficulties, errors or failures); - the
timing, implementation and costs associated with planned hardware
and software upgrades for back-office and internal systems, and
other capital expenditures planned for 2007; - adverse results in
pending or future litigation against the company, including one
pending lawsuit seeking tens of millions of dollars in damages
filed by a co-founder of onlinetrading.com, a brokerage acquired by
the company in 2000 (which is scheduled for trial in January 2008),
that are significantly different than is currently estimated or
expected (currently zero dollars are reserved for the claims in
this pending lawsuit and the company's D&O insurance carriers
have denied coverage of such claims); - pending NASD matters
concerning OATS reporting violations from 1999 to 2004 and failure
to transmit short sale position reports for several months after
the conversion to self-clearing operations in 2004, which could
result in fines, sanctions and/or other negative consequences
beyond accrued or anticipated amounts; - the amount of unexpected
legal, consultation and professional fees (including those expenses
as they relate to the onlinetrading.com co-founder lawsuit against
the company, pending and future regulatory matters, other lawsuits
or proceedings against the company, or potential business
combinations or strategic relationships); - the frequency and size
of, and ability to collect, unsecured client account debits as a
result of volatile market movements in concentrated positions held
in client accounts or as a result of other high-risk positions or
circumstances; - the company's estimated earnings per share
(diluted) being based on assumptions of a certain number of
outstanding shares and an average stock price for particular time
periods that turn out to be inaccurate (if the number of
outstanding shares and/or the average stock price is actually
higher than what has been assumed, there will be more dilution and
the actual earnings per share would be lower); - the general
variability and unpredictability of operating results forecast on a
quarterly basis; and - other items, events and unpredictable costs
or revenue impact items or events that may occur, and other issues,
risks and uncertainties indicated from time to time in the
company's filings with the Securities and Exchange Commission,
including, but not limited to, the company's Annual Report on Form
10-K for the fiscal year ended December 31, 2006, Quarterly Reports
on Form 10-Q during 2007, and other company SEC filings and company
press releases. Contact -- David H. Fleischman Chief Financial
Officer TradeStation Group, Inc. 954-652-7000 TRADESTATION GROUP,
INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) Three Months Ended Nine Months Ended September 30,
September 30, ------------------ ----------------- 2007 2006 2007
2006 ------ ------ ------ ------ REVENUES: Brokerage commissions
and fees $27,333,980 $19,215,783 $72,340,638 $57,856,073 Interest
income 12,094,616 11,655,041 36,211,671 32,320,907 Brokerage
interest expense 1,301,379 1,202,442 3,718,390 3,420,400 Net
interest income 10,793,237 10,452,599 32,493,281 28,900,507
Subscription fees and other 2,133,699 2,547,636 6,551,316 7,294,936
Net revenues 40,260,916 32,216,018 111,385,235 94,051,516 EXPENSES:
Employee compensation and benefits 8,652,294 7,544,662 25,874,343
21,741,925 Clearing and execution 9,111,644 6,425,480 23,769,549
19,109,600 Data centers and communications 2,213,286 1,626,680
5,367,096 4,775,860 Advertising 1,500,750 1,121,833 4,155,652
3,180,225 Professional services 867,388 842,725 2,230,385 2,279,433
Occupancy and equipment 699,866 646,987 2,085,563 1,902,681
Depreciation and amortization 991,211 674,867 2,997,787 1,722,460
Other 1,110,632 1,036,448 3,625,399 2,982,438 Total expenses
25,147,071 19,919,682 70,105,774 57,694,622 Income before income
taxes 15,113,845 12,296,336 41,279,461 36,356,894 INCOME TAX
PROVISION 5,390,439 4,460,194 15,227,843 13,925,305 Net income
$9,723,406 $7,836,142 $26,051,618 $22,431,589 EARNINGS PER SHARE:
Basic $0.22 $0.18 $0.59 $0.50 Diluted $0.22 $0.17 $0.57 $0.49
WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 44,121,906 44,716,983
44,364,942 44,535,515 Diluted 44,949,865 45,993,658 45,360,890
45,944,210 TRADESTATION GROUP, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS September 30, December 31, 2007 2006
-------------- ------------- (Unaudited) ASSETS: Cash and cash
equivalents, including restricted cash of $1,194,641 and $1,433,569
at September 30, 2007 and December 31, 2006, respectively*
$82,966,489 $74,539,256 Cash segregated in compliance with federal
regulations 450,853,880 417,501,417 Marketable securities 9,022,297
9,322,297 Receivables from brokers, dealers, clearing organizations
and clearing agents 28,573,623 34,866,825 Receivables from
brokerage customers 90,368,401 77,021,893 Property and equipment,
net 7,510,346 8,734,890 Deferred income taxes, net 2,465,324
1,970,047 Deposits with clearing organizations 22,333,936
20,180,361 Other assets 5,793,485 4,950,427 Total assets
$699,887,781 $649,087,413 LIABILITIES AND SHAREHOLDERS' EQUITY:
LIABILITIES: Payables to brokers, dealers and clearing
organizations $592,409 $4,444,956 Payables to brokerage customers
551,685,246 516,355,890 Accounts payable 2,762,821 2,846,669
Accrued expenses 8,154,135 7,235,023 Total liabilities 563,194,611
530,882,538 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY
136,693,170 118,204,875 Total liabilities and shareholders' equity
$699,887,781 $649,087,413 * September 30, 2007 Cash and cash
equivalents excludes $9.3 million that was transferred on October
1, 2007 from Cash segregated in compliance with federal
regulations. December 31, 2006 Cash and cash equivalents excludes
$7.6 million that was transferred on January 3, 2007 from Cash
segregated in compliance with federal regulations. DATASOURCE:
TradeStation Group, Inc. CONTACT: David H. Fleischman, Chief
Financial Officer of TradeStation Group, Inc., +1-954-652-7000 Web
site: http://www.tradestation.com/
Copyright