CHICAGO, Jan. 27, 2011 (GLOBE NEWSWIRE) -- optionsXpress Holdings, Inc. (Nasdaq:OXPS) today reported results for the three months and full year ended December 31, 2010.
Highlights from the fourth quarter 2010 included:
- Revenues of $55.5 million, an 8% decrease year-over-year
- Commission revenues of $39.9 million, a 2% increase year-over-year
- Net income of $11.6 million, or $0.20 per diluted share
- Retail daily average revenue trades (DARTs) of 30,500, flat year-over-year
- Net new account growth of 8,300 during the quarter
Highlights from the full year 2010 included:
- Revenues of $231.4 million, a 1% decrease year-over-year
- Net income of $51.9 million, or $0.90 per diluted share
- Ending accounts of 379,400, an 8% increase year-over-year
- $7.8 billion in customer assets on December 31, 2010, an 11% increase year-over-year
"We saw improvement in virtually all of our business metrics in the fourth quarter compared to the third quarter as broader customer engagement increased. Retail trading activity improved, client assets ended the year at all-time highs and margin balances were at their highest level since August 2008. In addition, fourth quarter net new accounts were at their highest level in the past six quarters, including robust growth in December, which is typically one of our slowest months due to the holiday season. These key performance indicators demonstrate the leverage of our business model in an improving retail environment," commented David Fisher, Chief Executive Officer of optionsXpress.
Fourth Quarter Results
For the fourth quarter, Retail DARTs were 30,500, essentially flat when compared to the fourth quarter of 2009, and up 16% from 26,300 for the third quarter of 2010. Total net revenues decreased 8% from the fourth quarter of 2009 and were up 4% when compared to the third quarter of 2010. Resulting net income was $11.6 million, or $0.20 per diluted share, a 22% decrease from the $14.9 million reported in the fourth quarter of 2009.
Full Year 2010 Performance
At the end of 2010, total customer accounts were 379,400, up 8% from 2009. Total customer assets at year-end 2010 were $7.8 billion, up 11% from year-end 2009 customer assets of $7.0 billion. Commission revenues for 2010 were $159.4 million, essentially flat with 2009. Net interest revenues and fees were $18.2 million, up 4% from 2009. 2010 full year total net revenues were $231.4 million, which was down 1% from net revenues of $233.4 million in 2009, and 2010 full year earnings per share were $0.90, a 14% decrease versus earnings per share of $1.05 in 2009.
"As opposed to the third quarter when we reduced marketing expense due to a weak market environment, in the fourth quarter we were able to respond to more favorable conditions by spending more, increasing our total net new account growth and lowering our average cost per net new account," commented Adam DeWitt, Chief Financial Officer of optionsXpress. "Additionally, we demonstrated our commitment to return value to shareholders while maintaining our ability to grow. During the fourth quarter, we paid a special dividend of $4.50 per share. Despite the size of this dividend, we retain sufficient financial flexibility to fund current operations and growth opportunities in 2011 and beyond. In total, through dividends and stock repurchases, we have returned over $390 million to shareholders over the last three years."
Outlook
Mr. Fisher concluded, "This month, we are celebrating optionsXpress' 10th anniversary and the start of a revolution determined to bring the power of derivatives trading to retail investors. We have delivered on this mission throughout our history by introducing innovative products and tools, utilizing cutting-edge technologies to make derivatives trading easier and leveling the playing field for the retail investor. The results speak for themselves - account growth rates that regularly outpace peers, almost 380,000 customers, and $7.8 billion of customer assets, a record high and key long-term driver of activity."
"As we look forward, we are encouraged by the improved market landscape and remain excited about the prospects for continued secular growth in derivatives trading. We believe that our commitment to innovation and an efficient operating model will help us translate these trends into long-term earnings growth."
Conference Call
A conference call will be broadcast live on Thursday, January 27, 2011, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) at www.optionsxpress.com/investor. An online replay will be available approximately two hours after the call and can be accessed in the Investor Relations' Calendar of Events portion of the website.
About optionsXpress Holdings, Inc.
optionsXpress Holdings, Inc., a pioneer in equity options and futures trading, offers an innovative suite of online brokerage services for investor education, strategy evaluation and trade execution. optionsXpress Holdings subsidiaries include optionsXpress, Inc., a retail online brokerage specializing in options and futures, brokersXpress, LLC, an online trading and reporting platform for independent investment professionals, Open E Cry, LLC, an innovative futures broker offering direct access futures trading for high volume commodities and futures traders through its proprietary software platform, and Optionetics, Inc, a leading provider of investment education services, including live seminars, proprietary software analytics, online and offline educational products and individual coaching.
More information can be found in the Investor Relations section of optionsXpress' website at http://www.optionsxpress.com/investor.
The optionsXpress Holdings, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7487
Safe Harbor
This press release may contain forward-looking statements. These statements relate to future events or our future financial performance and involve known and unknown risks. We urge you to carefully consider these risks in evaluating the information in this press release, including risks related to general economic conditions, regulatory developments, the competitive landscape, the volume of securities trading generally or by our customers specifically and other risks described in our filings with the Securities and Exchange Commission. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expects," "intends," "plans," "feel," "anticipates," "believes," "estimates," "predicts," "potential," "continue" or the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. The forward-looking statements made in this press release relate only to events as of the date of this release. We undertake no ongoing obligation to update these statements.
| optionsXpress Holdings, Inc. | ||||
| Consolidated Statements of Operations | ||||
| In thousands, except per share data | ||||
| (Unaudited) | ||||
| Three Months Ended | ||||
| December 31, | December 31, | Change | ||
| 2010 | 2009 | $ | % | |
| Revenues: | ||||
| Commissions | $39,908 | $38,938 | $970 | 2% |
| Other brokerage related revenue | 4,662 | 6,003 | (1,341) | (22%) |
| Interest revenue and fees | 4,277 | 4,677 | (400) | (9%) |
| Interest expense | (54) | (67) | 13 | (19%) |
| Net interest revenue and fees | 4,223 | 4,610 | (387) | (8%) |
| Education revenues | 5,954 | 8,008 | (2,054) | (26%) |
| Other income | 791 | 2,563 | (1,772) | (69%) |
| Net revenues | $55,538 | $60,122 | ($4,584) | (8%) |
| Expenses: | ||||
| Compensation and benefits | $11,346 | $11,759 | ($413) | (4%) |
| Brokerage, clearing and other related expenses | 9,536 | 8,899 | 637 | 7% |
| Brokerage advertising | 4,447 | 3,607 | 840 | 23% |
| Education marketing and fulfillment | 3,112 | 4,965 | (1,853) | (37%) |
| Depreciation and amortization | 2,174 | 2,239 | (65) | (3%) |
| Other general and administrative | 6,630 | 6,155 | 475 | 8% |
| Total expenses | $37,245 | $37,624 | ($379) | (1%) |
| Income before income taxes | 18,293 | 22,498 | (4,205) | (19%) |
| Income taxes | 6,719 | 7,628 | (909) | (12%) |
| Net income | $11,574 | $14,870 | ($3,296) | (22%) |
| Basic earnings per share | $0.20 | $0.26 | ($0.06) | (23%) |
| Diluted earnings per share | $0.20 | $0.26 | ($0.06) | (23%) |
| Weighted average shares | 57,450 | 57,669 | (219) | (0%) |
| outstanding - basic | ||||
| Weighted average shares | ||||
| outstanding - diluted | 57,844 | 57,857 | (13) | (0%) |
| Twelve Months Ended | ||||
| December 31, | December 31, | Change | ||
| 2010 | 2009 | $ | % | |
| Revenues: | ||||
| Commissions | $159,448 | $159,536 | ($88) | (0%) |
| Other brokerage related revenue | 17,936 | 26,765 | (8,829) | (33%) |
| Interest revenue and fees | 18,409 | 17,787 | 622 | 3% |
| Interest expense | (200) | (245) | 45 | (18%) |
| Net interest revenue and fees | 18,209 | 17,542 | 667 | 4% |
| Education revenues | 27,302 | 24,398 | 2,904 | 12% |
| Other income | 8,549 | 5,177 | 3,372 | 65% |
| Net revenues | $231,444 | $233,418 | ($1,974) | (1%) |
| Expenses: | ||||
| Compensation and benefits | $46,299 | $42,452 | $3,847 | 9% |
| Brokerage, clearing and other related expenses | 37,203 | 31,931 | 5,272 | 17% |
| Brokerage advertising | 17,863 | 17,608 | 255 | 1% |
| Education marketing and fulfillment | 17,208 | 15,763 | 1,445 | 9% |
| Depreciation and amortization | 8,890 | 8,879 | 11 | 0% |
| Other general and administrative | 23,923 | 22,579 | 1,344 | 6% |
| Total expenses | $151,386 | $139,212 | $12,174 | 9% |
| Income before income taxes | 80,058 | 94,206 | (14,148) | (15%) |
| Income taxes | 28,154 | 33,439 | (5,285) | (16%) |
| Net income | $51,904 | $60,767 | ($8,863) | (15%) |
| Basic earnings per share | $0.90 | $1.05 | ($0.15) | (14%) |
| Diluted earnings per share | $0.90 | $1.05 | ($0.15) | (14%) |
| Weighted average shares | ||||
| outstanding - basic | 57,443 | 57,925 | (482) | (1%) |
| Weighted average shares | ||||
| outstanding - diluted | 57,785 | 58,081 | (296) | (1%) |
| optionsXpress Holdings, Inc. | ||||
| Consolidated Balance Sheets | ||||
| In thousands | ||||
| (Unaudited) | ||||
| Period Ended | ||||
| December 31, | December 31, | Change | ||
| 2010 | 2009 | $ | % | |
| Assets: | ||||
| Cash and cash equivalents | $100,875 | $178,989 | ($78,114) | (44%) |
| Cash and investments segregated in compliance with federal regulations | 945,870 | 881,210 | 64,660 | 7% |
| Receivables from brokerage customers, net | 235,589 | 149,871 | 85,718 | 57% |
| Receivables from brokers, dealers and clearing organizations | 25,686 | 110,779 | (85,093) | (77%) |
| Investments in securities | 11,442 | 70,850 | (59,408) | (84%) |
| Deposits with clearing organizations | 20,480 | 30,245 | (9,765) | (32%) |
| Fixed assets, net | 11,345 | 13,263 | (1,918) | (14%) |
| Goodwill | 85,360 | 81,590 | 3,770 | 5% |
| Other intangible assets, net | 4,837 | 6,525 | (1,688) | (26%) |
| Other assets | 31,434 | 22,999 | 8,435 | 37% |
| Total assets | $1,472,918 | $1,546,321 | ($73,403) | (5%) |
| Liabilities and stockholders' equity: | ||||
| Liabilities | ||||
| Payables to brokerage customers | $1,193,479 | $1,179,204 | $14,275 | 1% |
| Payables to brokers, dealers and clearing organizations | 1,711 | 144 | 1,567 | 1088% |
| Accrued liabilities and accounts payable | 19,471 | 19,027 | 444 | 2% |
| Current and deferred income taxes | 651 | 193 | 458 | 237% |
| Other liabilities | 32,521 | 36,878 | (4,357) | (12%) |
| Long-term debt | 120,000 | -- | 120,000 | NM |
| Total liabilities | 1,367,833 | 1,235,446 | 132,387 | 11% |
| Stockholders' equity | 105,085 | 310,875 | (205,790) | (66%) |
| Total liabilities and stockholders' equity | $1,472,918 | $1,546,321 | ($73,403) | (5%) |
| optionsXpress Holdings, Inc. | ||||
| Statistical Operating Data | ||||
| Three Months Ended | ||||
| December 31, | December 31, | Change | ||
| 2010 | 2009 | $ or # | % | |
| Number of customer accounts | ||||
| (at period end)(1) | 379,400 | 351,200 | 28,200 | 8% |
| Daily average revenue trades (''DARTs'') (2) | ||||
| Retail DARTs | 30,500 | 30,400 | 100 | 0% |
| Institutional DARTs | 12,100 | 12,200 | (100) | (1%) |
| Total DARTs | 42,600 | 42,600 | 0 | 0% |
| Customer trades per account (3) | 29 | 31 | (2) | (6%) |
| Average commission per trade | $14.75 | $14.49 | $0.26 | 2% |
| Option trades as a % of total trades | 43% | 43% | 0% | |
| Brokerage advertising expense per net new customer account (4) | $536 | $494 | $42 | 9% |
| Total client assets (000s) | $7,830,545 | $7,024,623 | $805,922 | 11% |
| Client margin balances (000s) | $220,975 | $149,062 | $71,913 | 48% |
| Twelve Months Ended | ||||
| December 31, | December 31, | Change | ||
| 2010 | 2009 | $ or # | % | |
| Number of customer accounts | ||||
| (at period end)(1) | 379,400 | 351,200 | 28,200 | 8% |
| Daily average revenue trades (''DARTs'') (2) | ||||
| Retail DARTs | 29,900 | 31,500 | (1,600) | (5%) |
| Institutional DARTs | 14,000 | 12,600 | 1,400 | 11% |
| Total DARTs | 43,900 | 44,100 | (200) | (0%) |
| Customer trades per account (3) | 30 | 33 | (3) | (9%) |
| Average commission per trade | $14.42 | $14.41 | $0.01 | 0% |
| Option trades as a % of total trades | 42% | 42% | 0% | |
| Brokerage advertising expense per net new customer account (4) | $633 | $540 | $93 | 17% |
| Total client assets (000s) | $7,830,545 | $7,024,623 | $805,922 | 11% |
| Client margin balances (000s) | $220,975 | $149,062 | $71,913 | 48% |
| (1) Customer accounts are open, numbered accounts. | ||||
| (2) DARTs are total revenue-generating trades for a period divided by the number of trading days in that period. | ||||
| (3) Customer trades per account are total trades divided by the average number of total customer accounts during the period. Customer trades are annualized. | ||||
| (4) Calculated based on total net new customer accounts opened during the period. | ||||
| optionsXpress Holdings, Inc. | ||||
| Segment Information | ||||
| In thousands | ||||
| (Unaudited) | ||||
| Three Months Ended | Twelve Months Ended | |||
| December 31, | December 31, | December 31, | December 31, | |
| 2010 | 2009 | 2010 | 2009 | |
| Revenue | ||||
| Brokerage Services | $49,752 | $52,132 | $204,588 | $209,041 |
| Education | 6,435 | 8,515 | 29,226 | 25,459 |
| Eliminations | (649) | (525) | (2,370) | (1,082) |
| Revenue | $55,538 | $60,122 | $231,444 | $233,418 |
| Income/(loss) before income taxes | ||||
| Brokerage Services | $18,777 | $23,286 | $84,246 | $96,287 |
| Education | (484) | (788) | (4,188) | (2,081) |
| Income before income taxes | $18,293 | $22,498 | $80,058 | $94,206 |