KANSAS CITY, Mo., July 10, 2008 (PRIME NEWSWIRE) -- FCStone Group, Inc. (Nasdaq:FCSX), a commodity risk management firm, today announced higher year-over-year revenues and net income from continuing operations for its third fiscal quarter ending May 31, 2008.
Third Quarter Results
Revenues, net of cost of commodities sold, a non-GAAP financial measure, were $83.4 million in the three months ended May 31, 2008, compared to $64.5 million in the prior year quarter, an increase of 29%. Net income decreased slightly to $8.0 million, or $0.28 per diluted share, for the third quarter, compared to $8.1 million, or $0.29 per diluted share, in the prior year quarter.
Net income from continuing operations increased to $8.4 million, or $0.29 per diluted share for the third quarter, compared to $8.2 million, or $0.29 per diluted share, in the prior year quarter.
Results for the three months ended May 31, 2008 includes an after tax reduction in net income of $4.2 million, or $0.14 per diluted share. This after tax reduction in net income included a $1.1 million net bad debt write off primarily related to the consequences of unprecedented synthetic settlement pricing in the cotton market, and a $3.1 million decline in the fair value of interest rate derivative hedge instruments which had the effect of reversing previously recognized unrealized gains. These derivative instruments were liquidated during the three months ended May 31, 2008 and were entered into to manage FCStone's consolidated exposure to short term interest rates. Excluding these items, net income for the three months ended May 31, 2008 would have been $12.2 million, or $0.42 per diluted share.
The following table presents results on a total and per share basis.
Financial Highlights
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
May 31, May 31,
---------------------- ----------------------
2007 2008 2007 2008
---------- ---------- ---------- ----------
NON GAAP-Revenues,
net of cost of
commodities sold $ 64,469 $ 83,384 $ 182,003 $ 248,230
Income from continuing
operations before
income tax expense $ 13,044 $ 13,221 $ 34,291 $ 62,791
Net income from
continuing
operations $ 8,169 $ 8,371 $ 21,491 $ 39,291
Loss from discontinued
operations, net of
tax $ 100 $ 364 $ 188 $ 6,083
Net income $ 8,069 $ 8,007 $ 21,303 $ 33,208
Diluted weighted
average shares
outstanding 27,938 29,059 23,771 28,968
Diluted earnings per
share, continuing
operations $ 0.29 $ 0.29 $ 0.90 $ 1.36
Diluted earnings
(loss) per share,
discontinued
operations -- (0.01) (0.01) (0.21)
Diluted earnings
per share $ 0.29 $ 0.28 $ 0.89 $ 1.15
The increase in third quarter revenues, net of cost of commodities sold, from the prior year third quarter was driven by significantly higher exchange traded and over-the-counter (OTC) volumes. This growth was primarily related to continued volatility in the grain, energy, metals, and soft commodity markets and higher OTC volumes from the company's energy, renewable fuels and Brazilian customers. These increases have been partially offset by lower interest income due to both significantly lower short term interest rates and the fair value decline of interest derivative hedge instruments, although interest income was positively influenced by higher customer segregated and over-the-counter deposits.
Costs and expenses, exclusive of cost of commodities sold, were higher compared to the prior year primarily due to higher volume-related costs of broker commissions and pit brokerage and clearing fees.
Commission and clearing fees revenues, and service, consulting and brokerage fees for the three months ended May 31, 2008 increased by 65% over the prior year quarter and 9% over the quarter ended February 29, 2008 driven by continued growth in both the Commodity and Risk Management and Clearing and Execution segments.
"Despite a continuing difficult macroeconomic environment, FCStone experienced continued growth in our core business segments during our third fiscal quarter," said Pete Anderson, President and Chief Executive Officer of FCStone. "This positive business momentum is most evident in our continued transactional and consulting fee revenue growth for the Commodity and Risk Management segment. This cornerstone of our business continues to show strong growth as a result of our consultants and their industry expertise. Given the increasingly volatile environment, we are encouraged by the progress to date and continue to anticipate growth through assistance to our customers in managing market risks."
Year-To-Date Results
Revenues, net of cost of commodities sold, a non-GAAP financial measure, were $248.2 million for the first nine months of fiscal year 2008, compared to $182.0 million during the same period of fiscal year 2007, an increase of 36%. Net income increased 56% to $33.2 million for the first nine months of fiscal year 2008, or $1.15 per diluted share, compared to $21.3 million, or $0.89 per diluted share during the same period of fiscal year 2007.
Net income from continuing operations increased to $39.3 million, or $1.36 per diluted share for the first nine months of fiscal year 2008, compared to $21.5 million, or $0.90 per diluted share during the same period of fiscal year 2007.
"As anticipated, the market interest rate environment continued to move downward during our third fiscal quarter," said Bill Dunaway, Chief Financial Officer. "We believe that this recent quarter has realized the most severe effects from those changing rates. Despite this challenging interest rate environment, we are pleased to report continued strong growth in both over-the-counter and exchange based revenues, as well as significant increases in investable assets. We believe this core business momentum will continue to deliver strong growth for FCStone going forward."
Operating Segments
FCStone's income (loss) from continuing operations before minority interest and income tax expense by segment and certain other data are outlined below for the periods noted.
Three Months Ended Nine Months Ended
May 31, May 31,
---------------------- ----------------------
2007 2008 2007 2008
---------- ---------- ---------- ----------
($ in thousands)
Segment Data:
Income (loss) from
continuing
operations before
minority interest
and income tax
expense:
Commodity and Risk
Management Services $ 9,921 $ 15,351 $ 26,638 $ 54,278
Clearing and
Execution Services 3,801 1,260 10,841 15,072
Financial Services 557 656 1,004 1,183
Grain Merchandising 670 -- 2,130 --
Corporate and Other (1,704) (4,096) (5,683) (7,792)
---------- ---------- ---------- ----------
$ 13,245 $ 13,171 $ 34,930 $ 62,741
========== ========== ========== ==========
Other Data:
EBITDA (1) $ 16,080 $ 15,219 $ 44,696 $ 68,531
Exchange contract
trading volume (in
millions) 14.2 26.6 40.5 77.1
Customer Segregated
Assets, end of
period $ 913,584 $1,386,595 $ 913,584 $1,386,595
In the Commodity and Risk Management Services segment, revenues, net of cost of commodities sold, were $44.4 million in the third quarter ended May 31, 2008, compared to $28.9 million in the prior year quarter, an increase of 54%. Segment income before minority interest and income tax for the third quarter 2008 increased to $15.4 million, compared to $9.9 million in the prior year quarter.
For the Clearing and Execution Services segment, revenues, net of cost of commodities sold, were $36.5 million in the third quarter ended May 31, 2008, compared to $27.5 million in the prior year quarter, an increase of 33%. The segment made $1.3 million in the third quarter, compared to a net income of $3.8 million in the prior year quarter.
The Financial Services segment reported revenues, net of cost of commodities sold, of $2.4 million in the third quarter ended May 31, 2008, compared to $2.6 million in the prior year quarter, a decrease of 8%. Segment income increased to $656 thousand for the third quarter, compared to $557 thousand in the prior year quarter.
Our Corporate and Other segment includes income from our minority interest in a grain merchandising business, which amounted to $0.4 million for the three months ended May 31, 2008 and $2.3 million for the nine months ended May 31, 2008.
Business Outlook
Commenting on the Company's year to date results and expectations, Anderson said, "Our customers' need for prudent risk management programs has never been greater, particularly as stress points continue to build across virtually every commodity market. We continue to advise and provide increased value for our customers amidst market conditions of increased volatility and more stringent credit conditions. We recognize the headwinds for all of our customers and continue to manage the business in a method to increase shareholder value while further allowing for adequate financing in the agricultural and energy markets."
Conference Call & Web Cast
A conference call will be held today, Thursday, July 10, 2008 at 11:00 a.m. (ET). A live web cast of the conference call as well as a replay will be available online on the Company's corporate web site at http://www.fcstone.com. Participants can also access the call by dialing 800-257-6607 (within the United States and Canada), or 303-262-2053 (international callers). A replay of the call will be available approximately two hours after the call has ended and will be available until 11:59 p.m. (CT) on Saturday, August 9, 2008. To access the replay, dial 800-405-2236 (within the United States and Canada), or 303-590-3000 (international callers) and enter the conference ID number: 11116686#.
About FCStone Group, Inc.
FCStone Group, Inc., along with its affiliates, is an integrated commodity risk management company providing risk management consulting and transaction execution services to commercial commodity intermediaries, end-users and producers. The firm assists primarily middle market customers in optimizing their profit margins and mitigating exposure to commodity price risk. In addition to risk management consulting services, FCStone, LLC, operates one of the leading independent clearing and execution platforms for exchange-traded futures and options contracts. FCStone Group, Inc. serves more than 7,500 customers and in the 12 months ended May 31, 2008, executed 98.8 million derivative contracts in the exchange-traded and over-the-counter markets. The FCStone Group companies work in all the major commodity areas including agriculture, energy, renewable fuels, foods, forestry, cotton and textile, dairy and currency exchange. Headquartered in the Midwest, it has offices located throughout the world and is a clearing member of all major North American Futures exchanges. FCStone Group, Inc. trades on the NASDAQ Global Select Market under the symbol "FCSX."
Forward Looking Statements
This press release may include forward-looking statements regarding, among other things, our plans, strategies and prospects, both business and financial. All statements other than statements of current or historical fact contained in this press release are forward-looking statements. The words "believe," "expect," "anticipate," "should," "plan," "will," "may," "could," "intend," "estimate," "predict," "potential," "continue" or the negative of these terms and similar expressions, as they relate to FCStone Group, Inc., are intended to identify forward-looking statements.
We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. They can be affected by inaccurate assumptions, including the risks, uncertainties and assumptions described in the Company's filings with the Securities and Exchange Commission. In light of these risks, uncertainties and assumptions, the forward-looking statements in this press release may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. When you consider these forward-looking statements, you should keep in mind these risk factors and other cautionary statements in this press release.
Our forward-looking statements speak only as of the date of this press release. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Use of NON-GAAP Financial Information
In this press release we disclose "revenues, net of cost of commodities sold", and "EBITDA", both of which are non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure, calculated and prepared in accordance with generally accepted accounting principles in the United Sates (GAAP). Revenues, net of cost of commodities sold, is not a substitute for the GAAP measure of total revenues. EBITDA is not a substitute for the GAAP measure of net income or cash flows. Such non-GAAP financial measures are reconciled to its closest GAAP measure, in accordance with the Securities and Exchange Commission rules, and are included in the attached supplemental data. Management believes that these non-GAAP financial measures are useful to both management and its stockholders in their analysis of the company's business and operating performance.
FCSTONE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
May 31, May 31,
---------------------- ----------------------
2007 2008 2007 2008
---------- ---------- ---------- ----------
Revenues:
Commissions and
clearing fees $ 35,291 $ 49,426 $ 101,547 $ 134,876
Service, consulting
and brokerage fees 10,743 26,627 29,152 66,629
Interest 12,045 5,296 31,172 37,535
Other 1,046 1,632 2,580 8,267
Sales of
commodities (1) 303,866 608 1,101,752 1,958
---------- ---------- ---------- ----------
Total revenues 362,991 83,589 1,266,203 249,265
---------- ---------- ---------- ----------
Costs and expenses:
Cost of commodities
sold 298,522 205 1,084,200 1,035
Employee
compensation and
broker commissions 11,469 18,098 34,624 46,542
Pit brokerage and
clearing fees 17,640 27,385 47,182 73,562
Introducing broker
commissions 8,832 8,818 25,208 24,893
Employee benefits
and payroll taxes 2,883 3,882 8,252 9,812
Interest 2,579 1,394 9,069 4,404
Depreciation and
amortization 457 604 1,336 1,336
Bad debt expense 92 1,721 1,632 1,905
Other expenses 7,272 8,311 19,770 23,035
---------- ---------- ---------- ----------
Total costs and
expenses 349,746 70,418 1,231,273 186,524
---------- ---------- ---------- ----------
Income from
continuing operations
before income tax
expense and minority
interest 13,245 13,171 34,930 62,741
Minority interest 201 (50) 639 (50)
---------- ---------- ---------- ----------
Income from continuing
operations before
income tax expense 13,044 13,221 34,291 62,791
Income tax expense 4,875 4,850 12,800 23,500
---------- ---------- ---------- ----------
Net income from
continuing operations 8,169 8,371 21,491 39,291
Loss from discontinued
operations, net of
tax (100) (364) (188) (6,083)
---------- ---------- ---------- ----------
Net income $ 8,069 $ 8,007 $ 21,303 $ 33,208
========== ========== ========== ==========
Basic shares
outstanding 26,892 27,894 23,516 27,676
Diluted shares
outstanding 27,938 29,059 23,771 28,968
Basic earnings
(loss) per share:
Continuing
operations $ 0.30 $ 0.30 $ 0.91 $ 1.42
Discontinued
operations -- (0.01) -- (0.22)
---------- ---------- ---------- ----------
Net income $ 0.30 $ 0.29 $ 0.91 $ 1.20
========== ========== ========== ==========
Diluted earnings
(loss) per share:
Continuing
operations $ 0.29 $ 0.29 $ 0.90 $ 1.36
Discontinued
operations -- (0.01) (0.01) (0.21)
---------- ---------- ---------- ----------
Net income $ 0.29 $ 0.28 $ 0.89 $ 1.15
========== ========== ========== ==========
(1) On June 1, 2007 the Company sold a majority interest in FGDI,
LLC, which represented our entire Grain Merchandising segment.
Subsequent to such sale, the company retained a 25% interest in
FGDI, LLC which is now accounted for on the equity method and
included in other revenues. Sales of commodities included
$298.8 million and $1,077.9 million from FGDI, LLC during the three
and nine months ended May 31, 2007, respectively.
FCSTONE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except share amounts)
August 31, May 31,
2007 2008
---------- ----------
(Unaudited)
ASSETS
Cash and cash equivalents:
Unrestricted $ 90,053 $ 56,317
Segregated 14,250 9,229
Commodity deposits and receivables:
Commodity exchanges and clearing
organizations -- customer segregated 686,441 1,431,836
Proprietary commodity accounts 77,690 205,433
Receivables from customers, net of
allowance for doubtful accounts 16,868 52,743
---------- ----------
Total commodity deposits and receivables 780,999 1,690,012
---------- ----------
Marketable securities, at fair value --
customer segregated and other 307,828 12,868
Counterparty deposits and trade accounts
receivable, net of allowance for doubtful
accounts 20,746 129,637
Open contracts receivable 120,219 392,280
Notes receivable and advances 49,291 73,978
Exchange memberships and stock 10,366 6,961
Plant, equipment, furniture, software and
improvements, net of accumulated
depreciation 4,763 6,965
Assets held for sale -- 5,712
Other assets 21,679 42,309
---------- ----------
Total assets $1,420,194 $2,426,268
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Commodity and customer regulated accounts
payable $ 935,515 $1,447,459
Trade accounts payable and advances 115,145 218,227
Open contracts payable 121,101 402,193
Accrued expenses 38,632 43,883
Notes payable and repurchase obligations 35,133 91,312
Subordinated debt 1,000 1,000
---------- ----------
Total liabilities 1,246,526 2,204,074
---------- ----------
Minority interest -- 4,950
Stockholders' equity:
Common stock, $0.0001 par value, authorized
40,000,000 at August 31, 2007 and
May 31, 2008, respectively; issued and
outstanding 27,416,567 and 27,997,127 shares
at August 31, 2007 and May 31, 2008,
respectively 104,267 107,918
Additional paid-in capital 1,115 9,557
Treasury stock (376) (387)
Accumulated other comprehensive loss (3,620) (5,042)
Retained earnings 72,282 105,198
---------- ----------
Total stockholders' equity 173,668 217,244
---------- ----------
Commitments and contingencies
Total liabilities and stockholders'
equity $1,420,194 $2,426,268
========== ==========
FCSTONE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended
May 31,
----------------------
2007 2008
Cash flows from operating activities:
Net income $ 21,303 $ 33,208
Plus: Loss from discontinued operations 188 6,083
---------- ----------
Income from continuing operations 21,491 39,291
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation and amortization 1,336 1,336
Amortization of discount on note
receivable (41) (9)
Loss on cancellation of warrants -- 110
Gain on sale of exchange memberships and
stock (105) (3,162)
Gain on sale of other assets -- (923)
Stock compensation -- 1,227
Equity in earnings of affiliates, net
of distributions 96 (1,770)
Minority interest 639 (50)
Excess tax benefit of stock option
exercises -- (7,632)
Change in commodity accounts
receivable/payable, marketable
securities, customer segregated funds,
counterparty deposits and advances, net (5,150) (97,956)
Change in open contracts
receivable/payable, net (1,542) 9,031
Decrease in trade accounts receivable
and advances on grain 5,218 708
Increase in other assets (32,452) (6,007)
Decrease in trade accounts payable (509) (5,121)
(Decrease) increase in accrued expenses (5,302) 8,250
---------- ----------
Net cash used in operating activities $ (16,321) $ (62,677)
---------- ----------
Cash flows from investing activities:
Purchase of equipment, furniture, software
and improvements (1,982) (3,538)
Purchase of marketable securities (25,000) --
Acquisitions of businesses -- (6,725)
Issuance of notes receivable, net (23,588) (20,683)
Proceeds from the sale of exchange
memberships and stock 378 4,180
Purchase of exchange memberships and stock (1,855) --
Proceeds from the sale of other intangibles -- 1,958
Purchase of other intangibles -- (1,049)
---------- ----------
Net cash used in investing activities (52,047) (25,857)
---------- ----------
Cash flows from financing activities:
Decrease in checks written in excess of
bank balance (1,656) --
Proceeds from notes payable, net 39,815 37,569
Proceeds from exercises of stock options -- 3,651
Proceeds from initial public offering, net 129,670 --
Proceeds from issuance of common stock 550 --
Proceeds from issuance of subsidiary
stock, net of costs -- 4,583
Excess tax benefit of stock option
exercises -- 7,632
Treasury stock acquired -- (11)
Payment for redemption of common stock (48,486) --
Dividends paid (6,057) --
Payments under capital lease held for sale (412) --
Proceeds from subordinated debt 8,000 15,000
Payments on subordinated debt (14,000) (15,000)
Monies released from escrow (54) --
Monies deposited in escrow 2,526 --
---------- ----------
Net cash provided by financing activities 109,896 53,424
---------- ----------
Cash flows used for discontinued operations:
Net cash from operating activities -- 3,085
Net cash used in investing activities -- (1,711)
---------- ----------
Net cash from discontinued operations -- 1,374
---------- ----------
Net decrease in cash and cash equivalents -
unrestricted 41,528 (33,736)
Cash and cash equivalents - unrestricted -
beginning of period 51,659 90,053
---------- ----------
Cash and cash equivalents - unrestricted -
end of period $ 93,187 $ 56,317
========== ==========
Supplemental disclosures of cash flow
information:
Interest paid $ 8,663 $ 4,437
Income taxes paid $ 13,371 $ 20,457
========== ==========
Non-GAAP Financial Measures
The following table reconciles revenues, net of cost of
commodities sold, with our total revenues.
Three Months Ended Nine Months Ended
---------------------- ----------------------
May 31, May 31, May 31, May 31,
2007 2008 2007 2008
---------- ---------- ---------- ----------
($ in thousands)
Revenues:
Commissions and
clearing fees $ 35,291 $ 49,426 $ 101,547 $ 134,876
Service, consulting
and brokerage fees 10,743 26,627 29,152 66,629
Interest 12,045 5,296 31,172 37,535
Other 1,046 1,632 2,580 8,267
Sales of
commodities 303,866 608 1,101,752 1,958
---------- ---------- ---------- ----------
Total revenues 362,991 83,589 1,266,203 249,265
Less: Cost of
commodities sold 298,522 205 1,084,200 1,035
---------- ---------- ---------- ----------
Revenues, net of cost
of commodities sold $ 64,469 $ 83,384 $ 182,003 $ 248,230
========== ========== ========== ==========
The following table reconciles EBITDA with our net income.
Three Months Ended Nine Months Ended
---------------------- ----------------------
May 31, May 31, May 31, May 31,
2007 2008 2007 2008
---------- ---------- ---------- ----------
($ in thousands)
Net income: $ 8,069 $ 8,007 $ 21,303 $ 33,208
Plus: interest
expense 2,579 1,394 9,069 4,404
Plus: depreciation
and amortization 457 604 1,336 1,336
Plus: income tax
expense 4,875 4,850 12,800 23,500
Plus: loss on
discontinued
operations, net
of tax 100 364 188 6,083
---------- ---------- ---------- ----------
EBITDA $ 16,080 $ 15,219 $ 44,696 $ 68,531
========== ========== ========== ==========
Commodity and Risk Management Services Segment:
The following table provides the financial performance for this
segment.
Three Months Ended Nine Months Ended
May 31, May 31,
---------------------- ----------------------
2007 2008 2007 2008
---------- ---------- ---------- ----------
($ in thousands)
Sales of commodities $ 1,265 $ 608 $ 3,807 $ 1,958
Cost of commodities
sold 1,262 205 3,722 1,035
---------- ---------- ---------- ----------
Gross profit on
commodities sold 3 403 85 923
Commissions and
clearing fees 12,151 16,062 38,090 42,379
Service, consulting
and brokerage fees 10,873 26,733 29,548 66,940
Interest 5,793 1,140 14,181 14,788
Other revenues (1) 41 24 147 3,103
---------- ---------- ---------- ----------
Revenues, net of cost
of commodities sold 28,861 44,362 82,051 128,133
Other costs and
expenses:
Expenses (excluding
interest expense) 18,853 28,735 55,129 73,522
Interest expense 87 276 284 333
---------- ---------- ---------- ----------
Total costs and
expenses (excluding
cost of commodities
sold) 18,940 29,011 55,413 73,855
---------- ---------- ---------- ----------
Segment income before
minority interest
and income taxes (1) $ 9,921 $ 15,351 $ 26,638 $ 54,278
========== ========== ========== ==========
Exchange contract
trading volume
(millions) 0.8 0.9 2.2 2.4
OTC Contract volume 176,266 294,041 462,510 965,636
(1) Amounts for the nine months ended May 31, 2008, includes
$2.9 million from the gain on the sale of exchange stock and trading
rights.
Clearing and Execution Segment:
The following table provides the financial performance for this
segment.
Three Months Ended Nine Months Ended
May 31, May 31,
---------------------- ----------------------
2007 2008 2007 2008
---------- ---------- ---------- ----------
($ in thousands)
Sales of commodities $ -- $ -- $ -- $ --
Cost of commodities
sold -- -- -- --
---------- ---------- ---------- ----------
Gross profit on
commodities sold -- -- -- --
Commissions and
clearing fees 23,254 33,527 63,953 93,179
Service, consulting
and brokerage fees -- -- -- --
Interest 4,237 2,515 11,722 16,849
Other revenues 5 425 105 425
---------- ---------- ---------- ----------
Revenues, net of cost
of commodities sold 27,496 36,467 75,780 110,453
Other costs and
expenses:
Expenses (excluding
interest expense) 23,587 35,193 64,367 95,326
Interest expense 108 14 572 55
---------- ---------- ---------- ----------
Total costs and
expenses (excluding
cost of commodities
sold) 23,695 35,207 64,939 95,381
---------- ---------- ---------- ----------
Segment income before
minority interest
and income taxes $ 3,801 $ 1,260 $ 10,841 $ 15,072
========== ========== ========== ==========
Exchange contract
trading volume
(millions) 13.4 25.7 38.2 74.6
Financial Services Segment:
The following table provides the financial performance for this
segment.
Three Months Ended Nine Months Ended
May 31, May 31,
---------------------- ----------------------
2007 2008 2007 2008
---------- ---------- ---------- ----------
($ in thousands)
Sales of commodities $ 3,849 $ -- $ 20,006 $ --
Cost of commodities
sold 3,835 -- 19,904 --
---------- ---------- ---------- ----------
Gross profit on
commodities sold 14 -- 102 --
Commissions and
clearing fees -- -- -- --
Service, consulting
and brokerage fees -- -- -- --
Interest 1,903 1,569 6,061 5,469
Other revenues 653 806 1,335 2,372
---------- ---------- ---------- ----------
Revenues, net of cost
of commodities sold 2,570 2,375 7,498 7,841
Other costs and
expenses:
Expenses (excluding
interest expense) 542 596 1,621 2,500
Interest expense 1,471 1,123 4,873 4,158
---------- ---------- ---------- ----------
Total costs and
expenses (excluding
cost of commodities
sold) 2,013 1,719 6,494 6,658
---------- ---------- ---------- ----------
Segment income (loss)
before minority
interest and income
taxes $ 557 $ 656 $ 1,004 $ 1,183
========== ========== ========== ==========
Quarterly Financial Highlights:
The following table provides summary financial highlights
Trending by quarter for fiscal year 2008.
Three Months Ended
--------------------------------------
November February May
30, 29, 31,
2007 2008 2008
------- ------- -------
($ in thousands)
NON GAAP-Revenues, net of
cost of commodities sold $73,634 $91,212 $83,384
Income from continuing
operations before income tax
expense (1) $21,081 $28,489 $13,221
Net income from continuing
operations (1) $13,131 $17,789 $ 8,371
Loss from discontinued
operations, net of tax $ 46 $ 5,673 $ 364
Net income (1) $13,085 $12,116 $ 8,007
(1) The three months ended November 30, 2007 included a pre-tax gain
on the sale of exchange stock and trading rights of $2.9 million. The
three months ended November 30, 2007 and February 29, 2008 included
pre-tax gains related to interest rate derivative contracts of
$0.7 million and $4.4 million, respectively. The three months ended
May 31, 2008 included pre-tax losses related to interest rate
derivative contracts of $5.0 million.
Without these items, our first quarter income from continuing
operations before income tax expense would have been $17.5 million,
net income from continuing operations would have been $11.0 million
and net income would have been $10.9 million.
Without these items, our second quarter income from continuing
operations before income tax expense would have been $24.1 million,
net income from continuing operations would have been $15.2 million
and net income would have been $9.5 million.
Without these items, our third quarter income from continuing
operations before income tax expense would have been $18.2 million,
net income from continuing operations would have been $11.5 million
and net income would have been $11.1 million.