ITG Earnings Per Share Increase 48% In Fourth Quarter
ITG Earnings Per Share Increase 48% In Fourth Quarter
For the year ended December 31, 2001, revenues increased 22% to $377.4 million, net income increased 24% to $78.9 million and diluted earnings per share were up 21% to $1.62 compared to $1.34 in 2000. Excluding the $0.04 per share gain on the sale of shares in the London Stock Exchange in the first quarter of 2001 and the $0.05 per share gain on the sale of shares in Versus Technologies, Inc. in 2000, ITG's diluted 2001 earnings per share would have increased 22% to $1.58.
"Our unique trading technology business model produced over 20% underlying growth in a year when the Securities Industry Association expects profits for U.S. securities firms overall to drop by over 50%," said Raymond L. Killian, Jr., ITG's Chairman, President and Chief Executive Officer. "We attribute ITG's success to our advanced trading technologies, which help investors control costs and achieve their trading objectives, and to our diverse revenue streams, which allow ITG to capture volume in a variety of market conditions. We also made important progress this year in adapting this proven US model to the major capital markets overseas, where we see exciting additional growth potential in the years to come."
All three of the company's business lines produced strong revenue growth. For the year, POSIT® revenues per trading day increased 22%, Client Site Trading Products grew 25% and the Electronic Trading Desk increased 36%. For the fourth quarter of 2001 compared to the fourth quarter of 2000, revenues per trading day for POSIT® increased 40%, Client Site Trading Products increased 18% and the Electronic Trading Desk increased 36%. Combined fourth quarter 2001 volume through ITG's Volume Weighted Average Price (VWAP) and Short-Term Price Improvement (SPI(TM)) SmartServers(TM) averaged 7.5 million shares per day, an 85% increase over last year's fourth quarter.
In the US, ITG's trading volume for the fourth quarter of 2001 was 6.2 billion shares (averaging 97.4 million shares per trading day) compared to 5.4 billion shares in the third quarter of 2001 (averaging 91.4 million shares per trading day) and 4.2 billion shares in the fourth quarter of 2000 (averaging 66.8 million shares per trading day). On a consolidated basis including international operations, total trading volume was approximately 9.2 billion shares for the fourth quarter and 30.2 billion shares for the year ended December 31, 2001.
International operations produced high growth from prior years' low revenue base despite difficult trading conditions in most overseas capital markets. International revenues grew to $9.1 million in the fourth quarter of 2001, more than a six-fold increase from $1.4 million in the comparable 2000 period (which preceded ITG obtaining 100% control of ITG Europe in May 2001). For 2001, international revenues grew to $26.4 million, a seven-fold increase over 2000. Revenues in Europe were $4.9 million for the fourth quarter and $13.2 million for the year. Revenues in Canada were $3.1 million for the fourth quarter and $8.4 million for the year, compared to $0.5 million in 2000 as Canadian trading commenced in October 2000. Revenues in Australia, which became wholly owned in November 2000, were $1.1 million for the fourth quarter and $4.8 million for the year.
"Assuming continued sluggishness in US and overseas markets, we expect ITG to be able to generate revenue and earnings growth in 2002 in the low 20% range," said Mr. Killian. "Our growing revenues should bring us to a profitable operating rate in Europe by the end of the year, our new Canadian operation is meeting its start-up objectives and we expect to commence trading in our new Hong Kong office by mid-year, which will allow us to develop a growing business throughout the major Asian capital markets as well."
ITG has scheduled a conference call today at 10:30 a.m. EST to discuss fourth quarter results and the outlook for 2002. Those wishing to listen to the call should dial 800-289-0485 at least 10 minutes prior to the start of the call to ensure connection. For those unable to listen to the live broadcast of the call, a week-long replay will be available by dialing 888-203-1112 and entering the pass code 442439, and a two week-long replay will be available on ITG's website at http://www.itginc.com starting approximately 2 hours after the completion of the call.
ITG is headquartered in New York with offices in Boston, Los Angeles, Dublin, Hong Kong, London, Melbourne, Sydney, Tel Aviv and Toronto. As a leading provider of technology-based equity-trading services and transaction research to institutional investors and brokers, ITG services help clients to access liquidity, execute trades more efficiently, and make better trading decisions. ITG generates superior trading results for its clients through three lines of business. POSIT®, the world's largest equity matching system, allows clients to trade confidentially. The Electronic Trading Desk is recognized as one of the leading program trading operations in the U.S. ITG's leading-edge Client Site Products allow users to implement their own trading strategies by providing direct electronic access to most sources of market liquidity. For additional information, visit itginc.com.
In addition to historical information, this press release may contain "forward-looking" statements, as defined in the Private Securities Litigation Reform Act of 1995, that reflect management's expectations for the future. A variety of important factors could cause results to differ materially from such statements. These factors include the Company's ability to achieve expected future levels of sales; the actions of both current and potential new competitors; rapid changes in technology; financial market volatility; general economic conditions, internationally or nationally; evolving industry regulation; cash flows into or redemption from equity funds; effects of inflation; customer trading patterns; and new products and services. These and other risks are described in greater detail in the Company's filings with the Securities and Exchange Commission including those on forms 10-K and 10-Q.
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