ITG EPS Increases 8% In Second Quarter
ITG EPS Increases 8% In Second Quarter
“Against the benchmark of a substantial reduction in institutional trading volumes, ITG achieved record share volumes,” said Robert Russel, ITG's Chief Executive Officer. “Our diversified revenue streams, international expansion and cost reduction programs all contributed to our ability to increase volume, revenues and margins under these challenging market conditions.”
ITG's three business lines provided the diversified product offerings that customers require in this difficult market environment. Client Site Products led the way with a 24% increase in average daily revenues while the Electronic Trading Desk generated 11% growth in revenues per day, principally deriving from international growth. In contrast, POSIT® revenues per day declined 14%. Combined second quarter 2002 volume through ITG's Volume Weighted Average Price (VWAP) and Short-Term Price Improvement (SPI) SmartServers(TM) was 7.7 million shares per day, a 48% increase over last year's second quarter volume of 5.2 million shares per day.
In the US, ITG's trading volume for the second quarter of 2002 was a record 6.5 billion shares (averaging 100.9 million shares per trading day) compared to 6.0 billion shares in the first quarter of 2002 (averaging 99.8 million shares per trading day) and 5.7 billion shares in the second quarter of 2001 (averaging 90.3 million shares per trading day). On a consolidated basis including international operations, second quarter 2002 trading volume was approximately 8.7 billion shares compared to 7.0 billion shares in second quarter 2001.
For ITG overall, pre-tax margins were 36.0% compared to 35.8% in second quarter 2001. In the US, ITG's pre-tax margins increased to 42.7% from 41.4% a year ago, primarily due to economies in transaction processing costs and lower general & administrative expenses.
International revenues more than doubled to $10.3 million compared to $5.1 million in the second quarter of 2001, reflecting ITG's acquisition of full ownership of ITG Europe and growth in Europe, Canada and Asia.
ITG Europe's revenues were $5.1 million compared with the $2.1 million that ITG reported from Europe in last year's second quarter, when it acquired 100% ownership of ITG Europe in May 2001. ITG Europe's second quarter 2002 revenues increased 69% over 2001.
ITG's revenues in Canada more than doubled to $3.7 million compared to the second quarter of 2001 and increased 24% compared to first quarter 2002. ITG's revenues in Australia increased by 22% to $1.5 million compared with the second quarter of 2001 and 62% compared to first quarter 2002.
For the six months ended June 30, 2002, revenues increased 6% over the prior year period to $197.1 million, net income increased 7% to $43 million and diluted earnings per share increased 5% to $0.87. Excluding the 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 first quarter, for the first half of 2002, ITG's net income increased 13% and earnings per share grew 10%.
“Given the continued low level of institutional trading activity in US and overseas markets and the uncertain political and economic environment, we continue to be cautious and expect that ITG can generate earnings per share in 2002 approximating $1.75-$1.80, excluding the accretive contribution that would be expected from completion of our proposed acquisition of Hoenig Group,” said Mr. Russel.
ITG has scheduled a conference call today at 10:30 a.m. EDT to discuss second quarter results and the outlook for 2002. Those wishing to listen to the call should dial 800-314-7867 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 149664, 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(TM), 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 http://www.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; risk that the conditions to the closing of the Hoenig acquisition will not be satisfied; 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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