KANSAS CITY, Mo., April 9, 2009 (GLOBE NEWSWIRE) -- FCStone Group, Inc. (Nasdaq:FCSX), a commodity risk management firm, today announced financial results for its fiscal 2009 second quarter ended February 28, 2009.
Second Quarter Results
Revenues, net of cost of commodities sold, a non-GAAP financial measure, were $53.5 million in the three months ended February 28, 2009, compared to $91.2 million in the prior year quarter. The Company recorded a net loss for the second quarter of $50.2 million, or $1.80 per diluted share, compared to net income of $12.1 million, or $0.42 per diluted share, in the prior year quarter.
Results for the second quarter of 2009 were adversely impacted by an incremental increase in our bad debt provision of $51.0 million, net of tax, or $1.83 per diluted share, in the second quarter 2009. The provision is primarily related to the previously-reported energy trading customer account which had experienced significant losses. As announced on March 12, 2009, substantially all of the positions and liability related to the account were subsequently transferred to a third party. Excluding the bad debt provision, net income for the second quarter of 2009 would amount to $0.2 million, net of tax, or $0.01 per diluted share.
"Notwithstanding the dual impacts of the currently illiquid and credit-challenged commodities markets and the now-transferred energy trading account on our results, FCStone's core business is healthy," said Pete Anderson, President and Chief Executive Officer of FCStone. "Our Commodity and Risk Management consulting business has historically represented as much as 75 percent of FCStone's profits and is the primary driver of our business. Our customer relationships are solid, the energy and agriculture verticals that comprise the biggest piece of our business are beginning to see improving fundamentals, and we are aggressively making inroads into new categories domestically and internationally. We are well-positioned and are focused sharply on our core strategy of providing conservative risk management consulting services, platforms and strategies to our targeted market segments, which we expect to be a growth business as markets recover."
The following table presents results on a total and per share basis.
Three Months Ended Six Months Ended Feb. 28, Feb. 29, Feb. 28, Feb. 29, --------------------- ---------------------- 2009 2008 2009 2008 --------- --------- --------- --------- Total revenues $ 56,645 $ 92,042 $ 142,197 $ 165,676 Income (loss) from continuing operations before income tax expense (86,848) 28,489 (91,543) 49,570 Net income (loss) from continuing operations(1)(2)(3) (50,215) 17,789 (53,060) 30,920 Loss from discontinued operations, net of tax -- (5,673) (131) (5,719) Net income (loss)(1)(2)(3) (50,215) 12,116 (53,191) 25,201 Diluted weighted average shares outstanding 27,923 29,104 27,918 28,940 Diluted earnings (loss) per share, continuing operations(1)(2)(3) $ (1.80) $ 0.61 $ (1.91) $ 1.07 Diluted loss per share, discontinued operations $ -- $ (0.19) $ -- $ (0.20) Diluted earnings (loss) per share(1)(2)(3) $ (1.80) $ 0.42 $ (1.91) $ 0.87 1) Amounts for the three and six months ended February 28, 2009 include bad debt provisions, net of tax, of $51.0 million and $66.0 million, respectively, or $1.83 and $2.37 per diluted share, respectively. 2) Amounts for the three and six months ended February 28, 2009 include a charge for goodwill impairment, net of tax, of $0.4 million and $1.1 million, respectively, or $0.01 and $0.04 per diluted share, respectively. 3) Amounts for the six months ended February 28, 2009 include gains of $3.8 million, net of tax, on the sale of excess exchange stock and trading rights. Amounts for the six months ended February 29, 2008 include gains of $1.8 million, net of tax, on the sale of excess exchange stock and trading rights.
The second quarter revenues reflect a decrease in exchange-contract volume in both the Commodity and Risk Management Services segment and the Clearing and Execution Services segment. Consulting revenues increased year over year, but were offset by a decline in over-the-counter revenues and contract volume. Interest income decreased due to significantly lower short-term interest rates on a lower level of customer deposits.
Costs and expenses, excluding cost of commodities sold and the provision for bad debts, declined $9.2 million compared to the prior year, primarily due to lower volume-related costs of broker commissions, pit brokerage and clearing fees, offset by an increase in legal and professional fees related to the deficit account, recorded in the quarter. Employee compensation expenses in the second quarter includes $2.8 million of long-term incentive and share-based compensation, as required under U.S. GAAP, which was more than offset by the decrease in broker commissions. The Company also recognized an impairment loss on recently-recorded goodwill of $0.7 million in the second quarter of 2009.
Operating Segments
FCStone's income (loss) from continuing operations before minority interest and income tax expense by segment and certain other data are outlined below for the periods noted.
Three Months Ended Six Months Ended Feb. 28, Feb. 29, Feb. 28, Feb. 29, --------------------- ---------------------- 2009 2008 2009 2008 --------- --------- --------- --------- ($ in thousands) ($ in thousands) Segment Data: Income (loss) from continuing operations before minority interest and income tax expense: Commodity and Risk Management Services (1)(5) $ 3,859 $ 21,764 $ 8,480 $ 38,927 Clearing and Execution Services (2)(3) (84,811) 8,656 (92,370) 13,812 Financial Services 60 471 120 527 Corporate and Other (4) (6,190) (2,402) (8,128) (3,696) --------- --------- --------- --------- $ (87,082) $ 28,489 $ (91,898) $ 49,570 --------- --------- --------- --------- Other Data: Non-GAAP - EBITDA (1)(2)(3)(4)(5) $ (84,294) $ 30,674 $ (85,846) $ 53,312 Customer Segregated Assets, end of period (000's) $1,117,562 $1,452,861 $1,117,562 $1,452,861 Exchange contract trading volume (000's) 16,271 27,191 37,605 50,468 OTC contract trading volume (000's) 101 370 359 672 1) Amounts for the three and six months ended February 28, 2009 include goodwill impairment charges of $0.7 million and $1.0 million, respectively. 2) Amounts for the six months ended February 28, 2009 include a goodwill impairment charge of $0.9 million. 3) Amounts for the six months February 28, 2009 include gains of $4.9 million on the sale of excess exchange stock and trading rights. 4) Amounts for the six months February 28, 2009 include gains of $1.6 million on the sale of excess exchange stock and trading rights. 5) Amounts for the six months February 28, 2008 include gains of $2.9 million on the sale of excess exchange stock and trading rights.
In the Commodity and Risk Management Services segment, net revenues were $25.5 million in the second quarter ended February 28, 2009, compared to $46.5 million in the prior year quarter. The core revenues of this segment, commission and clearing fees and service, consulting and brokerage fees, decreased $13.6 million, or 35.5% over the prior year second quarter. Interest income declined $6.8 million, primarily due to a significant decline in short-term interest rates. Segment income before minority interest and income taxes for the second quarter 2009 was $3.9 million, compared to $21.8 million in the prior year quarter. Segment income before minority interest and income taxes decreased from the prior year second quarter, primarily due to the decline in interest income and over-the-counter brokerage. The decline in over-the-counter brokerage was primarily related to a slowdown in the renewable fuels industry and reduced volumes from our Latin American/Brazilian customers. This decline was partially offset by increased revenues from customers in our energy and food service operations.
For the Clearing and Execution Services segment, revenues were $27.5 million in the quarter ended February 28, 2009, compared to $40.9 million in the prior year quarter. The segment lost $84.8 million in the second quarter, compared to net income of $8.7 million in the prior year quarter. This segment loss was primarily due to the $86.3 million bad debt provision related to the previously-discussed deficit in a third-party energy trading account, related legal and professional fees, as well as lower interest income due to a decline in customer deposits and interest rates. Excluding the bad debt provision, second quarter 2009 segment income was $1.7 million. Exchange-traded volume in this segment declined by 10.6 million contracts primarily as a function of overall market conditions as well as actions taken by management to reduce exposure to larger and longer-tenured third-party clearing accounts.
The Financial Services segment reported revenues of $0.8 million in the second quarter ended February 28, 2009, compared to $3.5 million in the prior year quarter. Segment income was $60 thousand for the second quarter, compared to $471 thousand in the prior year quarter.
"While market and credit conditions remain challenging and volatile, our business model is still sound, as evidenced by continued growth in our risk management consulting revenues," stated Bill Dunaway, Chief Financial Officer. "Our balance sheet is healthy with adequate capital to meet all regulatory requirements, and the flexibility to grow our core commodity risk management business for the benefit of our company in the quarters and years ahead."
Conference Call & Web Cast
A conference call will be held today, Thursday, April 9, 2009 at 9:00 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 800-860-2442 (within the United States), or 412-858-4600 (international callers) and reference the FCStone call approximately ten minutes prior to the start time. A replay of the call will be available approximately one hour after the call has ended and will be available until 5:00 p.m. ET on Friday, May 8, 2009. To access the replay, dial 877-344-7529 (within the United States), or 412-317-0088 (international callers) and enter the conference ID number 429169.
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 8,000 customers and in the 12 months ended February 28, 2009, executed more than 86.8 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 measure. 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 is 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 Six Months Ended Feb. 28, Feb. 29, Feb. 28, Feb. 29, ----------------------- --------------------- 2009 2008 2009 2008 --------- -------- --------- --------- Revenues: Commissions and clearing fees $ 34,551 $ 45,613 $ 79,051 $ 84,995 Service, consulting and brokerage fees 14,088 24,183 33,629 40,457 Interest 4,711 18,858 18,278 32,239 Other 127 2,038 7,894 6,635 Sales of commodities 3,168 1,350 3,345 1,350 --------- -------- --------- --------- Total revenues 56,645 92,042 142,197 165,676 --------- -------- --------- --------- Costs and expenses: Cost of commodities sold 3,108 830 3,280 830 Employee compensation and broker commissions 13,019 15,197 28,389 28,444 Pit brokerage and clearing fees 21,366 25,392 48,766 46,177 Introducing broker commissions 4,814 8,747 12,256 16,075 Employee benefits and payroll taxes 2,467 2,913 4,301 5,930 Interest 1,083 1,809 2,449 3,010 Depreciation and amortization 757 376 1,360 732 Provision for bad debt 87,168 109 112,901 184 Impairment loss on goodwill 714 -- 1,888 -- Other expenses 9,231 8,180 18,505 14,724 --------- -------- --------- --------- Total costs and expenses 143,727 63,553 234,095 116,106 --------- -------- --------- --------- Income (loss) from continuing operations before income tax expense and minority interest (87,082) 28,489 (91,898) 49,570 Minority interest (234) -- (355) -- --------- -------- --------- --------- Income (loss) from continuing operations before income tax expense (86,848) 28,489 (91,543) 49,570 Income tax expense (benefit) (36,633) 10,700 (38,483) 18,650 --------- -------- --------- --------- Net income (loss) from continuing operations (50,215) 17,789 (53,060) 30,920 Loss from discontinued operations, net of tax -- (5,673) (131) (5,719) --------- -------- --------- --------- Net income (loss) $ (50,215) $ 12,116 $ (53,191) $ 25,201 ========= ======== ========= ========= Basic shares outstanding 27,923 27,709 27,918 27,565 Diluted shares outstanding 27,923 29,104 27,918 28,940 FCSTONE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) (in thousands, except share amounts) Feb. 28, August 31, 2009 2008 ------------ ------------ ASSETS Cash and cash equivalents: Unrestricted $ 10,485 $ 73,646 Segregated 113,550 8,355 Commodity deposits and receivables: Commodity exchanges and clearing organizations--customer segregated 973,744 1,306,477 Proprietary commodity accounts 293,619 253,998 Receivables from customers, net of allowance for doubtful accounts 21,351 19,603 ------------ ------------ Total commodity deposits and receivables 1,288,714 1,580,078 ------------ ------------ Marketable securities, at fair value--customer segregated and other 78,354 241,333 Counterparty deposits and trade accounts receivable, net of allowance for doubtful accounts 45,806 71,714 Open contracts receivable 262,895 308,016 Notes receivable and advances 9,959 77,979 Inventories 11,534 -- Exchange memberships and stock 3,301 11,473 Deferred tax assets 18,286 11,519 Income tax receivable 44,755 -- Equipment, furniture, software and improvements, net of accumulated depreciation 8,062 7,267 Other assets 25,047 30,098 ------------ ------------ Total assets $ 1,920,748 $ 2,421,478 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Commodity and customer regulated accounts payable $ 1,105,970 $ 1,486,299 Trade accounts payable and advances 294,558 257,941 Open contracts payable 247,408 297,926 Accrued expenses 33,637 51,709 Notes payable and repurchase obligations 17,869 79,190 Subordinated debt 41,000 16,000 ------------ ------------ Total liabilities 1,740,442 2,189,065 ------------ ------------ Minority interest 7,000 4,855 Stockholders' equity: Preferred stock, no par value, authorized 20,000,000 at February 28, 2009 and August 31, 2008, respectively; none issued and outstanding at February 28, 2009 and, August 31, 2008, respectively -- -- Common stock, $0.0001 par value, authorized 100,000,000 at February 28, 2009 and 40,000,000 at August 31, 2008; issued and outstanding 27,930,188 and 27,911,127 shares at February 28, 2009 and August 31, 2008, respectively 108,057 108,016 Additional paid-in capital 12,347 10,777 Treasury stock (2,185) (2,185) Accumulated other comprehensive loss (4,304) (1,632) Retained earnings 59,391 112,582 ------------ ------------ Total stockholders' equity 173,306 227,558 ------------ ------------ ------------ ------------ Commitments and contingencies Total liabilities and stockholders' equity $ 1,920,748 $ 2,421,478 ============ ============ FCSTONE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Six Months Ended Feb. 28, Feb. 29, ------------------------- 2009 2008 ---------- ----------- Cash flows from operating activities: Net income (loss) $ (53,191) $ 25,201 Plus: Loss from discontinued operations 131 5,719 ---------- ----------- Income (loss) from continuing operations (53,060) 30,920 Adjustments to reconcile income from continuing operations to net cash flows from operating activities: Provision for bad debts 112,901 184 Depreciation and amortization 1,360 732 Impairment loss on goodwill 1,888 101 Gain on sale of exchange stock and trading rights (6,444) (2,930) Gain on sale of other assets -- (520) Stock-based compensation 1,731 753 Equity in earnings of affiliates, net of distributions (677) (1,398) Minority interest (355) -- Deferred income taxes (4,591) -- Excess tax benefit of stock option exercises (14) (5,381) Change in commodity accounts receivable/payable, marketable securities, customer segregated funds, counterparty deposits and advances, net (123,936) (126,283) Change in open contracts receivable/payable, net (5,397) 2,429 Increase in counterparty deposits and trade accounts receivable 24,208 (63,140) Increase in income tax receivable (44,755) -- Increase in other assets (576) (7,511) Increase in trade accounts payable and advances 23,209 141,196 (Decrease) increase in accrued expenses (17,894) 7,753 ---------- ----------- Net cash used in operating activities (92,402) (23,095) ---------- ----------- Cash flows from investing activities: Purchase of equipment, furniture, software and improvements (1,835) (2,788) Cash paid in connection with acquisitions of businesses, net of cash acquired (1,220) (6,725) Equity investment (200) -- Return of equity investment 892 -- Proceeds (issuance)of notes receivable, net 52,727 (93,390) Proceeds from the sale of exchange stock and trading rights 9,725 3,498 Proceeds from the sale of other intangible assets -- 1,350 Purchase of other intangible assets -- (1,049) ---------- ----------- Net cash provided by (used in) investing activities 60,089 (99,104) ---------- ----------- Cash flows from financing activities: (Payments) proceeds from notes payable, net (56,321) 86,018 Proceeds from issuance of subsidiary stock 2,325 -- Proceeds from exercises of stock options 41 2,065 Treasury stock acquired -- (11) Excess tax benefit of stock option exercises 14 5,381 Proceeds from subordinated debt 25,500 -- Payments on subordinated debt (500) -- ---------- ----------- Net cash (used in) provided by financing activities (28,941) 93,453 ---------- ----------- Cash flows from discontinued operations: Net cash (used in) provided by operating activities (422) 1,178 Net cash used in investing activities (1,485) (1,711) ---------- ----------- Net cash used in discontinued operations (1,907) (533) ---------- ----------- Net decrease in cash and cash equivalents--unrestricted (63,161) (29,279) Cash and cash equivalents-- unrestricted--beginning of period 73,646 90,053 ---------- ----------- Cash and cash equivalents-- unrestricted--end of period $ 10,485 $ 60,774 ========== =========== Supplemental disclosures of cash flow information: Interest paid $ 1,921 $ 2,985 Income taxes paid $ 10,517 $ 13,614 ========== =========== Non-GAAP Financial Measures The following table reconciles revenues, net of cost of commodities sold, with our total revenues. Three Months Ended Six Months Ended Feb. 28, Feb. 29, Feb. 28, Feb. 29, --------------------- ----------------------- 2009 2008 2009 2008 -------- -------- -------- -------- ($ in thousands) ($ in thousands) Revenues: Commissions and clearing fees $ 34,551 $ 45,613 $ 79,051 $ 84,995 Service, consulting and brokerage fees 14,088 24,183 33,629 40,457 Interest 4,711 18,858 18,278 32,239 Other 127 2,038 7,894 6,635 Sales of commodities 3,168 1,350 3,345 1,350 -------- -------- -------- -------- Total revenues 56,645 92,042 142,197 165,676 Less: Cost of commodities sold 3,108 830 3,280 830 Revenues, net of cost of commodities sold $ 53,537 $ 91,212 $138,917 $ 164,846 ======== ======== ======== ======== The following table reconciles EBITDA with our net income. Three Months Ended Six Months Ended Feb. 28, Feb. 29, Feb. 28, Feb. 29, --------------------- ----------------------- 2009 2008 2009 2008 -------- -------- -------- -------- ($ in thousands) ($ in thousands) Net income (loss) $(50,215) $12,116 $(53,191) $ 25,201 Plus: interest expense 1,083 1,809 2,449 3,010 Plus: depreciation and amortization 757 376 1,360 732 Plus: income tax expense (benefit) (36,633) 10,700 (38,483) 18,650 Plus: impairment loss on goodwill 714 -- 1,888 -- Plus: loss on discontinued operations, net of tax -- 5,673 131 5,719 -------- -------- -------- -------- EBITDA $(84,294) $ 30,674 $(85,846) $ 53,312 ======== ======== ======== ======== Commodity and Risk Management Services Segment: The following table provides the financial performance for this segment. Three Months Ended Six Months Ended Feb. 28, Feb. 29, Feb. 28, Feb. 29, --------------------- ----------------------- 2009 2008 2009 2008 -------- -------- -------- -------- ($ in thousands) ($ in thousands) Sales of commodities $ 3,168 $ 1,350 $ 3,345 $ 1,350 Cost of commodities sold 3,108 830 3,280 830 -------- -------- -------- -------- Gross profit on commodities sold 60 520 65 520 Commissions and clearing fees 10,564 13,965 25,060 25,862 Service, consulting and brokerage fees 14,130 24,312 33,715 40,662 Interest 723 7,532 4,169 13,648 Other revenues (1) 59 166 331 3,079 -------- -------- -------- -------- Revenues, net of cost of commodities sold 25,536 46,495 63,340 83,771 Other costs and expenses: Expenses (excluding interest expense) 20,039 24,327 47,228 44,512 Provision for bad debts 617 350 6,065 275 Impairment on goodwill 714 -- 1,012 -- Interest expense 307 54 555 57 -------- -------- -------- -------- Total costs and expenses 21,677 24,731 54,860 44,844 -------- -------- -------- -------- -------- -------- -------- -------- Segment income before minority interest and income taxes $ 3,859 $ 21,764 $ 8,480 $ 38,927 ======== ======== ======== ======== Exchange contract trading volume (000's) 592 899 1,396 1,555 OTC Contract volume (000's) 101,445 370,337 358,604 671,595 1) Amounts for the six months February 28, 2008 include gains of $2.9 million on the sale of excess stock and trading rights. Clearing and Execution Segment: The following table provides the financial performance for this segment. Three Months Ended Six Months Ended Feb. 28, Feb. 29, Feb. 28, Feb. 29, --------------------- ----------------------- 2009 2008 2009 2008 -------- -------- -------- -------- ($ in thousands) ($ in thousands) Sales of commodities $ -- $ -- $ -- $ -- ---------- -------- --------- -------- Cost of commodities sold Gross profit on commodities sold -- -- -- -- Commissions and clearing fees 24,241 31,984 54,531 59,652 Service, consulting and brokerage fees -- -- -- -- Interest 3,227 8,964 12,333 14,334 Other revenues(1) 18 -- 5,048 -- ---------- -------- --------- -------- Revenues, net of cost of commodities sold 27,486 40,948 71,912 73,986 Other costs and expenses: Expenses (excluding interest expense) 25,273 32,522 55,923 60,233 Provision for bad debts 86,551 (250) 106,551 (100) Impairment on goodwill -- -- 876 -- Interest expense 473 20 932 41 ---------- -------- --------- -------- Total costs and expenses 112,297 32,292 164,282 60,174 ---------- -------- --------- -------- Segment income (loss) before minority interest and income taxes $ (84,811) $ 8,656 $ (92,370) $ 13,812 ========== ======== ========= ======== Exchange contract trading volume (000's) 15,679 26,292 36,209 48,913 1) Amounts for the six months February 28, 2009 include gains of $4.9 million on the sale of excess exchange stock and trading rights. Financial Services Segment: The following table provides the financial performance for this segment. Three Months Ended Six Months Ended Feb. 28, Feb. 29, Feb. 28, Feb. 29, --------------------- ----------------------- 2009 2008 2009 2008 -------- -------- -------- -------- ($ in thousands) ($ in thousands) Sales of commodities $ -- $ -- $ -- $ -- ---------- -------- --------- -------- Cost of commodities sold Gross profit on commodities sold -- -- -- -- Commissions and clearing fees -- -- -- -- Service, consulting and brokerage fees -- -- -- -- Interest 739 2,318 1,715 3,900 Other revenues 39 1,184 177 1,566 ---------- -------- --------- -------- Revenues, net of cost of commodities sold 778 3,502 1,892 5,466 Other costs and expenses: Expenses (excluding interest expense) 405 1,255 787 1,904 Interest expense 313 1,776 985 3,035 ---------- -------- --------- -------- Total costs and expenses 718 3,031 1,772 4,939 ---------- -------- --------- -------- Segment income before minority interest and income taxes $ 60 $ 471 $ 120 $ 527 ========== ======== ========= ========