OTC Markets Group Inc. (OTCM: OTCQX U.S. Premier) | OTC

New Post Public Reply Private Reply Replies (0) Message Board
News Desk 2018
OTC Markets Group Inc. (OTCM: OTCQX U.S. Premier) | OTC Markets Group Announces First Quarter 2013 Financial Results OTC Markets Group Announces First Quarter 2013 Financial Results

OTC Markets Group Announces First Quarter 2013 Financial Results

PR Newswire

NEW YORK , May 13, 2013 /PRNewswire/ --

First Quarter 2013 Highlights:

  • Unaudited first quarter 2013 GAAP diluted EPS of $0.11 and first quarter 2013 Adjusted diluted EPS of $0.23
  • First quarter operating profit margin of 21%
  • Quarterly dividend increased to $0.06 per share
  • SIX Financial Information included Real-Time Level 1 and Level 2 Pricing Data in its OTC equities coverage
  • OTCM ADR Index is up 1.5% during the first quarter of 2013 and up 8.9% since inception 

OTC Markets Group Inc. (OTCQX: OTCM) operator of Open, Transparent and Connected financial marketplaces for 10,000 U.S. and global securities, today announced its financial results for the first quarter ended March 31, 2013 .

(Logo: http://photos.prnewswire.com/prnh/20110118/MM31963LOGO )

"During the first quarter of 2013, we continued building the employee and systems infrastructures that we believe are required to develop the scalability and functionality of our services. We expect that significant upgrades to our IT architecture and infrastructure, including an upgrade to our data center, will continue through 2013, and anticipate that the technology improvements we achieve from these projects will create a more reliable and scalable network that can expand to a wider range of securities," said R. Cromwell Coulson , President and Chief Executive Officer. "Slower revenue growth, lower trading revenues and investment in our infrastructure led to contraction in our operating profit margin during the first quarter of 2013."

"On a year over year basis, the modest increase in gross revenues was generated primarily from the increase in companies joining the OTCQX marketplace, although the rate at which new companies join the marketplace has slowed significantly over the last six months. As we focus on long-term scalability, the increase in headcount and costs associated with the new data center during the first quarter of 2013 contributed to the contraction of operating profit margin to 21%, as compared to 26% during the first quarter of 2012," said Wendy Fraulo , Chief Financial Officer.

First Quarter Results

Revenues

Gross revenues during the first quarter of 2013 totaled $8.6 million , an increase of $0.1 million , or 1%, as compared to the first quarter of 2012.  The moderate growth in OTCQX subscription revenue and Market Data Licensing subscription revenue was offset by decreases in OTC Link ATS subscription and quote revenue, and in website advertising revenue.  Issuer Services revenues increased $0.2 million , or 9%, to $2.2 million , primarily due to a $0.1 million , or 10%, increase OTCQX subscription revenue and a $0.1 million , or 9%, increase in OTC Disclosure and News Service subscription revenue.  Revenue from market data license subscriptions, which includes user licenses, end of day pricing services, and broker-dealer enterprise licenses, increased $0.1 million to $3.2 million during the first quarter of 2013, as compared to the similar period in 2012.  The moderate increase in market data license subscription revenue during the first quarter of 2013 was offset by a $0.1 million , or 29%, decrease in advertising revenue, as compared to the first quarter of 2012.  OTC Link ATS Trading Services revenue during the first quarter of 2013 decreased by $0.2 million , or 5%, to $2.9 million . The decrease was mainly attributable to a $0.1 million decrease in subscription revenue from OTC Dealer licenses, FIX connection fees and OTC Link subscriptions year over year.

Operating Expenses

Operating expenses for the first quarter of 2013 increased $0.5 million , or 8%, to $6.4 million as compared to the first quarter of 2012, primarily related to an increase in compensation and benefits costs.  On a year over year basis, our headcount increased by 12, to 78 employees, which directly increased salary expense. Other employee benefits costs that increased during the first quarter of 2013 as compared to the first quarter of 2012 include non-cash compensation expense from the vesting of equity awards, higher medical insurance costs and discretionary bonuses.  In addition, IT infrastructure and data communications costs increased $0.1 million during the first quarter of 2013, mostly attributable to costs related to continued work on an updated data center. These increases were offset by a $0.1 million decrease in marketing and advertising costs during the first quarter of 2013, primarily related to timing of marketing initiatives.  

Income from Operations and Net Income

Income from operations decreased $0.4 million , or 20%, to $1.7 million for the first quarter of 2013, as compared to the similar period in 2012, and operating profit margin contracted to 21% from 26% during the same time frame. The decrease in income from operations and operating profit margin is primarily attributable to the increase in compensation and benefits expenses, which was higher than the growth in revenues from services during the period. 

Net income for the first quarter of 2013 decreased $0.1 million , or 6%, to $1.2 million , as compared to $1.3 million during the first quarter of 2012.  Net income per weighted average diluted shares outstanding decreased to $0.11 for the first quarter of 2013, as compared to $0.12 in the first quarter of 2012.

Adjusted EBITDA

Adjusted EBITDA, which excludes non-cash stock based compensation expense, for the first quarter of 2013 decreased 12% to $2.4 million , compared to $2.8 million in the first quarter of 2012, primarily due to the company's effective tax rate decreasing to 30% for the first quarter of 2013 from 40% for the first quarter of 2012, which decreased the provision for income taxes. The $0.4 million decrease in income from operations also contributed to lower Adjusted EBITDA during the first quarter of 2013 as compared to the first quarter of 2012.

Non-GAAP Financial Measures

In addition to disclosing results prepared in accordance with GAAP, the company also discloses certain non-GAAP results of operations, including adjusted EBITDA and adjusted diluted earnings per share that either exclude or include amounts that are described in the reconciliation table of GAAP to non-GAAP information provided at the end of this release. Non-GAAP financial measures do not replace and are not superior to the presentation of GAAP financial results, but are provided to improve overall understanding of the company's current financial performance.  Management believes that this non-GAAP information is useful to both management and investors regarding certain additional financial and business trends related to the operating results. Management uses this non-GAAP information, along with GAAP information, in evaluating its historical operating performance.

First Quarter 2013 Conference Call

The company will host a conference call on Tuesday, May 14, 2013 at 8:00 a.m. Eastern Time , during which management will discuss the financial results in further detail.  The conference call and replay of the conference call may be accessed as follows: Dial-in numbers: 1-877-407-0789 (Domestic); 1-201-689-8562 (International); Call Confirmation Number 414303. Replay Dial-in Numbers (Available until May 28, 2013 ): 1-877-870-5176 (Domestic); 1-858-384-5517 (International); Replay PIN Number:  414303.

A live webcast and webcast replay of the call will also be available in the Investor Relations section of the corporate web site at http://www.otcmarkets.com/investor-relations/overview .

OTC Markets Group's Quarterly Report for the three month period ended March 31, 2013 is available publicly at www.otcmarkets.com . 

About OTC Markets Group Inc.

OTC Markets Group Inc. (OTCQX: OTCM) operates Open, Transparent and Connected financial marketplaces for 10,000 U.S. and global securities. Through our OTC Link® ATS, we directly link a diverse network of broker-dealers that provide liquidity and execution services for a wide spectrum of securities. We organize these securities into marketplaces to better inform investors of opportunities and risks – OTCQX®, The Best Marketplace with Qualified Companies; OTCQB®, The Venture Stage Marketplace with U.S. Reporting Companies; and OTC Pink®, The Open Marketplace with Variable Reporting Companies. Our data-driven platform enables investors to easily trade through the broker of their choice at the best possible price and empowers a broad range of companies to improve the quality and availability of information for their investors. To learn more about how we create better informed and more efficient financial marketplaces, visit www.otcmarkets.com .

OTC Link ATS is operated by OTC Link LLC, member FINRA/SIPC and SEC regulated ATS.



OTC MARKETS GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

Unaudited






Three Months Ended March 31,


2013


2012

OTC Link ATS Trading services

$ 2,850


$ 3,014

Market data licensing

3,567


3,523

Issuer services

2,208


2,031

Gross revenues

8,625


8,568

Redistribution fees and rebates

(475)


(484)

Net revenues

8,150


8,084

Operating expenses




Compensation and benefits

3,684


3,230

IT Infrastructure and data communications

914


797

Professional and consulting services

510


508

Marketing and advertising

342


469

Occupancy costs

341


353

Depreciation and amortization

430


409

General, administrative and other

217


186

Total operating expenses

6,438


5,952

Income from operations

1,712


2,132

Other income/(expense)




Interest income

-


7

Other expense

(4)


(2)

Income before provision for income taxes

1,708


2,137

Provision for income taxes

509


857

Net Income

$ 1,199


$ 1,280





Net income per share




Basic

$ 0.11


$ 0.12

Diluted

$ 0.11


$ 0.12





Basic weighted average shares outstanding

10,655,149


10,516,411

Diluted weighted average shares outstanding

10,696,206


10,553,616





We use non-GAAP financial measures of operating performance. Non-GAAP measures do not replace and are not superior to the presentation of our GAAP financial results but are provided to improve overall understanding of our current financial performance and our prospects for the future.





Non-GAAP Reconciliation









Three Months Ended March 31,


2013


2012

Net Income

$ 1,199


$ 1,280

Excluding:




Provision for income taxes

509


857

Interest income

-


(7)

Depreciation and amortization

430


409

Stock-based compensation expense

294


218

Adjusted EBITDA

$ 2,432


$ 2,757





Adjusted diluted earnings per share

$ 0.23


$ 0.26





OTC MARKETS GROUP INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except number of shares)

Unaudited





March 31,

December 31,


2013

2012

Assets



Current assets



Cash 

$                12,363

$                13,611

Accounts receivable, net of allowance for doubtful accounts of $237 and $221 

5,144

6,481

Prepaid income taxes

444

345

Prepaid expenses and other current assets

1,128

744

Deferred tax assets, net

211

203

Total current assets

19,290

21,384

Property and equipment, net 

4,822

5,066

Goodwill

251

251

Intangible assets, net

40

40

Security deposits

209

209

Total Assets

$                24,612

$                26,950




Liabilities and stockholders' equity



Current liabilities



Accounts payable

$                     609

$                     721

Accrued expenses and other current liabilities

1,427

2,868

Deferred revenue

6,111

7,670

Total current liabilities

8,147

11,259

Deferred rent

746

786

Deferred tax liabilities, net

-

113

Income tax reserve

302

277

Total Liabilities

9,195

12,435

Commitments and contingencies



Stockholders' equity



Common stock - par value $0.01 per share



Class A - 14,000,000 authorized, 10,979,896 issued, 10,865,321 outstanding at March 31, 2013;



10,814,622 issued, 10,700,047 outstanding at December 31, 2012

110

108

Class C - 130,838 shares authorized, issued and outstanding at March 31, 2013 and December 31, 2012

1

1

Additional paid-in capital 

6,403

6,050

Retained earnings

9,498

8,951

Treasury stock - 114,575 shares at March 31, 2013 and December 31, 2012 

(595)

(595)

Total Stockholders' Equity

15,417

14,515

Total Liabilities and Stockholders' Equity

$                24,612

$                26,950




SOURCE OTC Markets Group Inc.

Scroll down for more posts ▼

Top 10 Most Recent News Articles

Fermaca and NVIDIA Join Forces for AI Revolution

Updated Category News Views 24

When you think about AI these days, visions of sleek robots and endless data streams might crowd the brain. What Fermaca's teasing out in Mexico, though, ain't no sci-fi dream. They're yanking AI tech out of the clouds and plugging it straight into the ground, partnering with NVIDIA to make it happen. A Fresh Model on Familiar Grounds Fermaca, now rocking the badge of...

Continue Reading
Illinois House Democrats Surge with Historic Gaines

Updated Category News Views 79

Turning the Election Tide in Illinois Damn, if you're not paying attention to what's shaking in Illinois, it's time to listen up. The Democrats under Speaker Emanuel "Chris" Welch are strutting their stuff, leaving an indelible mark on the political landscape. An eye-popping $35 million in campaign dough was raised, safeguarding every Democratic incumbent and managing to...

Continue Reading
Saga Metals Advances Radar Project with HQ Drill Success

Updated Category News Views 95

Digging Deep at Trapper North: Saga's Strategic Drill Move There's nothing like the thrill of discovery, especially in the rough-and-tumble world of mining exploration. Saga Metals Corp., anchored deep in the critical minerals scene, has wrapped up an HQ-diameter drill program at its Radar Project, smack dab near Cartwright, Labrador. You hear 1,010 meters and maybe...

Continue Reading
Webull's Legal Woes: Shareholder Class Action Heats Up

Updated Category News Views 60

Webull's Legal Storm: What's Behind the Class Action? Here's a tale as old as time in the wild world of the stock market: a company paints a rosy picture, investors follow the trail, and when the curtain lifts, the scenery looks starkly different. Enter Webull Corporation (NASDAQ: BULL), caught in the thick of allegations that have turned the investor community's...

Continue Reading
Fractal Sees Explosive Q2 Gain: Revenue Hits $100M

Updated Category News Views 93

Fractal’s Revenue Moment: Climbing New Peaks Fractal Analytics just knocked it out of the park, folks. Imagine this—an AI company pulling in $100 million for the first quarter, getting a 20% jump in revenue year on year. That's right, these numbers aren't just fancy figures; they're staggering proof that Fractal's hitting its AI stride. The healthcare and life...

Continue Reading
New Story Appoints Drudge, Celebrates Workplace Recognition

Updated Category News Views 0

A Dual Milestone: Leadership and Recognition In an industry chock-full of buzzwords, New Story’s latest moves cut through the noise. They've just announced Adam Drudge as their new Chief People Officer, and wouldn't you know it, they've snagged their third straight Most Loved Workplace® recognition for 2026. When a special ed company starts making waves like this,...

Continue Reading
Cerillion 26.2: New AI Powers & Open Standards Edge

Updated Category News Views 61

Leading the Charge in Telecom AI Ah, the telecom game—it's a battlefield and Cerillion’s just lobbed a game-changer onto the field with their 26.2 release. This ain’t your run-of-the-mill update; we're talking expanded agentic AI capabilities that are set to shake the very core of BSS/OSS solutions. AI Innovations That Matter No fluff here, just solid improvements....

Continue Reading
Systemair Wins First Natural Refrigerant Heat Pump Deal

Updated Category News Views 77

Systemair Breaks New Ground Hold onto your hats, because Systemair just sealed a deal that's going to make waves. Their recent accomplishment isn't just some humdrum business tedium—it's an intriguing step forward in the HVAC world. Systemair snagged their very first order for air handling units featuring an integrated heat pump and natural refrigerant. You've got to...

Continue Reading
Stellus Capital Set to Unveil Q3 Results: Key Details

Updated Category News Views 138

Stellus Capital's Upcoming Financial Reveal: Stakes and Details November's not just bringing the cold breezes, folks; it's also ushering in the much-anticipated financial digits of Stellus Capital Investment Corporation's third quarter of 2026. Mark your calendars for November 9, after the stock market wraps up, when Stellus will drop its operational performance stats for...

Continue Reading
LITE, RRC, SGRY: Are Shareholders Getting Shortchanged?

Updated Category News Views 51

What's Really Going On Here? Here's the skinny: Halper Sadeh LLC, that hard-hitting investor rights law firm, is poking their noses into some potential red flags over at a few companies you might have heard of—Lumentum Holdings (NASDAQ:LITE), Range Resources (NYSE:RRC), and Surgery Partners (NASDAQ:SGRY). They're sniffing around transactions that might leave the regular...

Continue Reading

Top 5 Most Recently Viewed Articles

Deloitte Finds Generative AI Revolutionizing Dealmaking Trends

Updated Category News Views 780

Deloitte Finds Generative AI Revolutionizing Dealmaking Trends While investment will continue to grow so will the expectation of tangible, near-term results. In a recent study, Deloitte announced insightful findings from its inaugural survey on Generative AI (GenAI) within the realm of mergers and acquisitions (M&A). The survey garnered responses from 1,000 leaders in...

Continue Reading
Consumer Insights on Biometrics Adoption and Trust Factors

Updated Category News Views 137

Growing Trust in Biometric Technology Among Consumers Biometric technology has gradually woven itself into our daily routines, with devices like smartphones and laptops frequently employing it for secure access. Recent findings indicate that over half of consumers now rely on biometric authentication every day, a trend that demonstrates significant confidence in this...

Continue Reading
Lamar Advertising Revises Projections Following Mixed Earnings

Updated Category News Views 223

Lamar Advertising Updates Earnings Guidance Lamar Advertising Company (NASDAQ: LAMR) has recently revealed its earnings for the second quarter, presenting a mixture of results that have prompted a reassessment by analysts. While the company reported earnings per share of $1.52, significantly surpassing the analyst consensus estimate of 86 cents, its revenue fell short of...

Continue Reading
Discover the Versatile iQ MiniOven by CHEF iQ for Your Kitchen

Updated Category News Views 293

Introducing the iQ MiniOven: A Revolution in Smart Cooking CHEF iQ has made a major leap in kitchen technology with the launch of the iQ MiniOven, a smart kitchen appliance designed to simplify cooking for the modern home chef. This compact yet powerful oven boasts 11 cooking functions and numerous intelligent presets, promising to streamline meal preparation and offer...

Continue Reading
AM Best Updates Credit Rating Outlook for Nonprofits Insurance Alliance

Updated Category News Views 207

AM Best Updates Credit Rating Outlook for Nonprofits Insurance Alliance AM Best has announced a revision to the outlook for the Long-Term Issuer Credit Ratings (ICRs) of members of the Nonprofits Insurance Alliance Group, adjusting it from stable to negative. This encompasses organizations like the Nonprofits Insurance Alliance of California, National Alliance of...

Continue Reading