ITG EPS Increases 13% in First Quarter Before One-Time Gain

New York, New York, April 17, 2002 — Investment Technology Group, Inc. (NYSE: ITG), a leading provider of technology-based equity trading services, today announced that for the first quarter ended March 31, 2002, revenues increased 7% over first quarter 2001 to $97.7 million, net income was $22.2 million and diluted earnings per share were $0.45. Excluding a one-time gain of $1.9 million ($0.04 per share) related to the sale of shares in the London Stock Exchange in last year's comparable period, ITG's first quarter 2002 net income increased 16% and earnings per share grew 13%. Revenues per trading day increased 10% over the first quarter 2001.

“Despite very difficult trading conditions around the world, ITG's unique technology-driven trading model generated double-digit underlying growth,” said Raymond L. Killian, Jr., ITG's Chairman, President and Chief Executive Officer. “We significantly outperformed the market in terms of volume growth, captured a variety of revenue streams through our diversified product range, invested in new product and market growth initiatives and maintained strong margins through careful control of expenses.”

ITG's first quarter average daily U.S. share volume increased 19% over last year's first quarter compared to a 16% increase in New York Stock Exchange average daily volume and a 12% volume decline for NASDAQ. There were 60 trading days in the U.S. in this year's first quarter compared with 62 in last year's first quarter.

All three of ITG's diversified business lines produced double-digit growth in average daily revenues. POSIT® revenues per trading day increased 11%, Client Site Products grew 16% and the Electronic Trading Desk increased 13%. Combined first quarter 2002 volume through ITG's Volume Weighted Average Price (VWAP) and Short-Term Price Improvement (SPI(TM)) SmartServers(TM) reached 7.8 million shares per day, a 56% increase over the first quarter of 2001.

In the U.S., ITG's trading volume for the first quarter of 2002 was just under 6.0 billion shares (averaging 99.8 million shares per trading day) compared to 6.2 billion shares in the fourth quarter of 2001 (averaging 97.4 million shares per trading day) and 5.2 billion shares in the first quarter of 2001 (averaging 83.9 million shares per trading day). On a consolidated basis including international operations, first quarter 2002 trading volume was approximately 7.5 billion shares compared to 5.6 billion shares in first quarter 2001.

For ITG overall, pre-tax margins increased to 38.7% from 36.4% in first quarter 2001. In the U.S., ITG's pre-tax margins increased to 45.4% from 40.0% a year ago.

International Operations

International revenues more than doubled to $7.0 million from $2.9 million in the first quarter of 2001, reflecting ITG's acquisition of full ownership of ITG Europe in May 2001 and growth in Canada.

Reflecting the London Stock Exchange's 26% drop in the value of domestic and international equity trading, ITG Europe's first quarter 2002 total revenues were 22% below those for 2001. On a U.S. GAAP basis, ITG Europe's revenues were $3.1 million compared with the $0.6 million that ITG reported from Europe in last year's first quarter, prior to acquiring 100% ownership of ITG Europe in May 2001.

ITG's revenues in Canada increased by over 170% to $3.0 million compared to the first quarter of 2001. Revenues for ITG Australia were $0.9 million compared to $1.2 million in the first quarter of 2001, reflecting quarterly fluctuations experienced during weak market conditions.

2002 Outlook

“Given the continued low level of trading activity in U.S. and overseas markets, we continue to be cautious and expect ITG to generate earnings growth in 2002 approximating 20%, assuming that domestic market volumes do not further deteriorate in the second half of the year. This excludes the accretive contribution that would be expected from completion of our proposed acquisition of Hoenig Group,” said Mr. Killian.

Conference Call

ITG has scheduled a conference call today at 10:30 a.m. EDT to discuss first quarter results and the outlook for 2002. Those wishing to listen to the call should dial 800-810-0924 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 529844, and a two week-long replay will be available on ITG's website at starting approximately 2 hours after the completion of the call.

About ITG

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

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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