Revenues up 20% and DARTs Increase 19% Year over Year PLANTATION,
Fla., April 24 /PRNewswire-FirstCall/ -- TradeStation Group, Inc.
(Nasdaq GS: TRAD) today reported record net revenues of $35.3
million, and record daily average revenue trades (DARTs) of over
70,000 for the 2007 first quarter. TradeStation Group's 2007 first
quarter net income of $8.2 million, or 18 cents per share
(diluted), was an 18% increase from 2006 first quarter net income
of $7.0 million, or 15 cents per share (diluted). The company's
2007 first quarter net revenues of $35.3 million were a 20%
increase from 2006 first quarter net revenues of $29.4 million. "We
are pleased to report that our DARTs have grown significantly year
over year in the first quarter even though our larger competitors
saw theirs flatten or decrease over the same period," said Salomon
Sredni, CEO of TradeStation Group. "We attribute our impressive
growth in DARTs in these market conditions to the diversity of our
service offering, consistent account growth, and the robustness of
our high-end client base. To further leverage this growth, we plan
to have on the phones by the end of this quarter 50% more sales
people than we had at the beginning of the year and, beginning this
quarter, to spend about 30% more on advertising than previously
planned." TradeStation Reports Record DARTs and Total Accounts For
the 2007 first quarter, TradeStation experienced the following
year- over-year daily trading growth results with respect to
equities, futures and forex accounts: Q1 07 Q1 06 % Increase -----
----- ---------- Daily Average Revenue Trades 70,187 59,057 19% The
company also published today, in a separate announcement, its DARTs
and Total Client Assets for the month of March 2007. TradeStation
had 33,048 brokerage accounts at March 31, 2007, a 23% increase
from March 31, 2006. TradeStation's Average Client Trades Over 540
Times per Year and Has an Average Account Balance of Nearly $80,000
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 first quarter: Client Trading Activity
----------------------- Annualized average revenue per account
$4,195 Annualized trades per account 548 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 first quarter, the average
TradeStation account traded 548 times per year, or 46 times per
month, the average TD Ameritrade and E-Trade account traded about
10 to 12 times per year, or about one time per month. Also,
TradeStation's average assets per equities account of nearly
$80,000 was substantially higher than the average assets per
account of TD Ameritrade and E-Trade. Company Purchases 293,755
Shares under Stock Buy Back Plan In the 2007 first quarter, the
company purchased 293,755 shares of its common stock pursuant to
its stock buy back plan for a total purchase price of $3,749,350.
Since buying under the plan began November 13, 2006, through
yesterday, the company has purchased 498,155 shares for a total
purchase price of $6,616,875. Under the stock buy back plan, the
company is authorized to purchase up to $60 million of its
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 Second Quarter 2007 Business
Outlook TradeStation today also published its second quarter 2007
Business Outlook. The company's second quarter 2007 Business
Outlook estimated ranges are as follows: SECOND QUARTER 2007
BUSINESS OUTLOOK (In Millions, Except Per Share Data) Second
Quarter 2007 ------------------- REVENUES $36.0 to $38.0 EARNINGS
PER SHARE (Diluted) $0.17 to $0.18 The company's second quarter
2007 Business Outlook estimated ranges are based on numerous
assumptions, including: basing the ranges, in part, on monthly
trading volume of our clients over the six-month period ended March
31, 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); an increase in the amounts expected to be spent for
advertising and for product development resources; the anticipated
cost of ongoing litigation, arbitration and regulatory matters and
the assumption there will be no significant, adverse judgments,
awards, settlements or regulatory fines or sanctions; anticipated
growth and trading activity of active trader equities and futures
accounts; the launch date of the company's upgraded forex offering
and the rate of growth and impact of new forex accounts and trading
activity; 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 first quarter results and its Second Quarter 2007
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 NASD,
NYSE, 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 Second Quarter 2007
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: --
adverse results in pending or possible future litigation against
the company (including two pending lawsuits -- one which is
scheduled for trial beginning April 30, 2007 and one of which is
scheduled for trial January 2008 -- both of which the company
considers baseless, filed by co-founders of onlinetrading.com, a
brokerage acquired by the company in 2000, which together seek in
the aggregate tens of millions of dollars in damages or rescissions
of transactions that would create similar negative financial
consequences for the company) that are significantly different than
is currently estimated or expected (currently zero dollars are
reserved for these pending claims); -- a pending NASD matter
concerning OATS reporting violations that could result in a
substantial fine during the 2007 second or third quarter; --
changes in the condition of the securities and financial markets,
including, but not limited to, changes in the combined average
share volume of the major exchanges and in market volatility; --
the company's ability (or lack thereof) to achieve significant net
increases in DARTs, brokerage accounts and brokerage revenues
sequentially or quarter over quarter (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 as a result of negative market
conditions, changes in interest rates, or other factors); --
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 and futures, its forex business (including the date by
which TradeStation Securities is able to offer a
seamlessly-integrated forex trading platform to customers and
prospects and the success of that upgraded forex offering), and its
institutional and non-US trader market businesses (as the company
has no significant prior experience with forex, institutional and
non-US 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; -- 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; -- the timing, cost and
success of marketing decisions and campaigns generally, and the
entrance of new competitors or competitive products, services or
product/service upgrades into the market; -- change or lack of
change in the federal funds rate of interest that is different than
what the company anticipates; -- market pressure to continue to
lower, substantially, pricing on brokerage and subscription
services as a result of such services being provided at lower or
minimal costs by brokerages, financial institutions and other
financial companies to their customers, or for other market
reasons; -- pending NASD matters concerning violations of NASD
Conduct Rule 3370 ("Prompt Receipt and Delivery of Securities")
regarding certain customer short sale orders in 2004, and failure
to transmit short sale position reports since the conversion to
self-clearing operations, each of which could result in fines,
sanctions and/or other negative consequences; -- technical
difficulties, errors and/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; -- the company not
maintaining a seamless, redundant back-up system to its order
execution systems, which could materially intensify the negative
consequences described in the previous risk factor; -- the amount
of unexpected legal, consultation and professional fees (including
those expenses as they relate to the onlinetrading.com co-founder
lawsuits 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, 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 Three Months Ended
March 31, 2007 2006 ---- ---- (Unaudited) REVENUES: Brokerage
commissions and fees $22,287,705 $18,632,433 Interest income
11,965,727 9,503,841 Brokerage interest expense 1,193,786 1,098,810
Net interest income 10,771,941 8,405,031 Subscription fees and
other 2,270,977 2,347,215 Net revenues 35,330,623 29,384,679
EXPENSES: Employee compensation and benefits 8,451,017 6,966,771
Clearing and execution 7,122,914 5,827,683 Data centers and
communications 1,673,999 1,530,803 Advertising 1,085,569 956,617
Professional services 1,158,827 758,560 Occupancy and equipment
696,627 622,162 Depreciation and amortization 998,929 482,611 Other
944,513 780,370 Total expenses 22,132,395 17,925,577 Income before
income taxes 13,198,228 11,459,102 INCOME TAX PROVISION 5,002,871
4,507,231 Net income $8,195,357 $6,951,871 EARNINGS PER SHARE:
Basic $0.18 $0.16 Diluted $0.18 $0.15 WEIGHTED AVERAGE SHARES
OUTSTANDING: Basic 44,590,076 44,319,210 Diluted 45,708,564
45,922,914 TRADESTATION GROUP, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS March 31, December 31, 2007 2006 ----
---- (Unaudited) ASSETS: Cash and cash equivalents, including
restricted cash of $1,433,569 at March 31, 2007 and December 31,
2006* $94,547,533 $74,539,256 Cash segregated in compliance with
federal regulations 447,470,466 417,501,417 Marketable securities
9,322,297 9,322,297 Receivables from brokers, dealers, clearing
organizations and clearing agents 41,185,202 34,866,825 Receivables
from brokerage customers 70,756,214 77,021,893 Property and
equipment, net 8,399,197 8,734,890 Deferred income taxes, net
1,854,523 1,970,047 Deposits with clearing organizations 20,294,696
20,180,361 Other assets 5,928,414 4,950,427 Total assets
$699,758,542 $649,087,413 LIABILITIES AND SHAREHOLDERS' EQUITY:
LIABILITIES: Payables to brokers, dealers and clearing
organizations $7,226,827 $4,444,956 Payables to brokerage customers
555,005,327 516,355,890 Accounts payable 2,530,476 2,846,669
Accrued expenses 10,902,042 7,235,023 Total liabilities 575,664,672
530,882,538 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY
124,093,870 118,204,875 Total liabilities and shareholders' equity
$699,758,542 $649,087,413 * March 31, 2007 Cash and cash
equivalents includes $1.8 million that was transferred on April 3,
2007 to 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 to Cash and cash equivalents.
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/
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