Exhibit 99.1
Investor Inquiries:
Bill Dunaway, 816-457-6246
billd@fcstone.com
FCStone Group, Inc. Announces Strong Fiscal 2007
Third Quarter Results and Three-for-Two Stock Split
West Des Moines, Iowa, July 12, 2007– FCStone Group, Inc. (NASDAQ: FCSX), a commodity risk management firm, today announced higher year-over-year revenues and net income for its fiscal third quarter ending May 31, 2007, and a three-for-two stock split, which will be implemented by way of a 50% stock dividend.
Third Quarter Results
Revenues, net of cost of commodities sold, a non-GAAP financial measure, were $64.4 million in the three months ended May 31, 2007, compared to $47.6 million in the prior year quarter, an increase of 35%. Net income increased 99% to $8.1 million, or $0.43 per diluted share, for the third quarter, compared to $4.1 million, or $0.28 per diluted share in the prior year quarter.
The following table presents the results on a total and per share basis.
Financial Highlights
(In thousands, except per share amounts)
| | | | | | | | | | | | |
| | | Three Months Ended
May 31, | | Nine Months Ended
May 31, |
| | | 2006 | | 2007 | | 2006 | | 2007 |
NON GAAP-Revenues, net of cost of commodities sold | | $ | 47,604 | | $ | 64,369 | | $ | 129,188 | | $ | 181,815 |
GAAP-Income after minority interest and before income tax expense | | $ | 6,401 | | $ | 12,944 | | $ | 18,320 | | $ | 34,103 |
GAAP-Net income | | $ | 4,051 | | $ | 8,069 | | $ | 11,370 | | $ | 21,303 |
Diluted weighted average shares outstanding(1) | | | 14,490 | | | 18,948 | | | 14,487 | | | 15,929 |
Diluted earnings per share | | $ | 0.28 | | $ | 0.43 | | $ | 0.78 | | $ | 1.34 |
| (1) | In March 2007, the company completed its initial public offering, or IPO, of common stock in which it issued and sold 5,865,000 shares of common stock and in connection therewith, subsequently redeemed 2,160,000 shares of common stock. |
The increase in third quarter revenues, net of cost of commodities sold from the prior year third quarter, was primarily related to higher exchange-traded volumes due to volatility in the grain and energy markets, higher over-the-counter (OTC) volumes primarily from the renewable fuels and Brazilian customers, increased volume in the financial services grain repurchase program, increased foreign exchange (Forex) commissions and higher short-term interest rates and additional investable segregated and OTC customer margin funds.
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, pit brokerage and clearing fees, and introducing broker commissions; and increased interest
expense as a result of higher volume in the financial services grain repurchase program combined with increased borrowings in the grain merchandising segment because of higher grain prices.
“This year’s third quarter saw steady revenue growth, as the Company continues to perform across all of our operating segments,” said Pete Anderson, President and Chief Executive Officer. “Our consultants’ experience in the core grain and energy markets is paving the way for continued traction in targeted growth areas, particularly in Brazil and China, and also in commodities such as renewable energy and foreign exchange. We are pleased with the results to date and are working to deliver on our commitment to providing value to our clients through the most efficient strategies and platforms.”
Year-To-Date Results
Revenues, net of cost of commodities sold, a non-GAAP financial measure, were $181.8 million for the first nine months of fiscal year 2007, compared to $129.2 million during the same period of fiscal year 2006, an increase of 41%. Net income increased 87% to $21.3 million for the first nine months of fiscal year 2007, or $1.34 per diluted share, compared to $11.4 million, or $0.78 per diluted share during the same period of fiscal year 2006.
“Our growing customer base and the continued volatility in the commodities markets during the first nine months of 2007 has allowed us to generate record revenues, operating income and net income during the period,” said Bob Johnson, Chief Financial Officer. “As we drive reinvestment in the firm’s product mix, we look forward to sustaining this growth through a diversified operating model.”
Operating Segments
FCStone’s income (loss) before minority interest and income tax expense by segment and certain other data are outlined below for the periods noted.
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
May 31, | | | Nine Months Ended
May 31, | |
| | | 2006 | | | 2007 | | | 2006 | | | 2007 | |
| | | ($ in thousands) | |
Segment Data: | | | | | | | | | | | | | | | | |
Income (loss) before minority interest and income tax expense: | | | | | | | | | | | | | | | | |
Commodity and Risk Management Services | | $ | 6,056 | | | $ | 9,921 | | | $ | 15,731 | | | $ | 26,638 | |
Clearing and Execution Services | | | 3,281 | | | | 3,801 | | | | 8,483 | | | | 10,841 | |
Financial Services | | | (1 | ) | | | 557 | | | | (102 | ) | | | 1,004 | |
Grain Merchandising | | | (1,193 | ) | | | 670 | | | | (911 | ) | | | 2,130 | |
Corporate | | | (2,120 | ) | | | (1,804 | ) | | | (5,251 | ) | | | (5,871 | ) |
| | | | | | | | | | | | | | | | |
| | $ | 6,023 | | | $ | 13,145 | | | $ | 17,950 | | | $ | 34,742 | |
| | | | | | | | | | | | | | | | |
Other Data: | | | | | | | | | | | | | | | | |
EBITDA | | $ | 8,426 | | | $ | 15,980 | | | $ | 23,869 | | | $ | 44,508 | |
Exchange contract trading volume (in millions) | | | 12.4 | | | | 14.2 | | | | 34.5 | | | | 40.5 | |
Customer Segregated Assets, end of period | | $ | 825,344 | | | $ | 913,584 | | | $ | 825,344 | | | $ | 913,584 | |
In the Commodity and Risk Management Services segment, revenues, net of cost of commodities sold, were $28.9 million in the third quarter ended May 31, 2007, compared to $21.0 million in the prior year quarter, an increase of 37%. Segment income increased 64% to $9.9 million for the third quarter, compared to $6.1 million in the prior year quarter.
For the Clearing and Execution Services segment, revenues, net of cost of commodities sold, were $27.5 million in the third quarter ended May 31, 2007, compared to $21.5 million in the prior year quarter, an increase of 28%. Segment income increased 16% to $3.8 million for the third quarter, compared to $3.3 million in the prior year quarter.
The Financial Services segment reported revenues, net of cost of commodities sold, of $2.6 million in the third quarter ended May 31, 2007, compared to $1.4 million in the prior year quarter, an increase of 90%. Segment income increased to $557 thousand for the third quarter, compared to a loss of $1 thousand in the prior year quarter.
The Grain Merchandising segment reported revenues, net of cost of commodities sold, of $5.6 million in the third quarter ended May 31, 2007, compared to $4.1 million in the prior year quarter, an increase of 36%. Segment income increased to $670 thousand for the third quarter, compared to a loss of $1.2 million in the prior year quarter. As previously announced on June 1, 2007, the company sold a portion of its stake in this business and going forward will own a 25% minority interest in this business instead of the previous 70% majority interest.
Business Outlook
Commenting on the Company’s year-to-date results and overall expectations, Mr. Anderson said, “The growth and profitability of FCStone is a function of progress made towards achieving the strategic initiatives that we have in place to drive the long-term success of the Company. We look forward to building upon the momentum created by our recently successful IPO and the favorable industry environment, and we seek to leverage our expertise in both the core domestic markets as well as in the growing segments around the world. We remain confident that the continued execution of our strategy will provide value to both our customers and our shareholders.”
Three-for-Two Stock Split
On July 10, 2007, the Board of Directors approved a three-for-two stock split that will be distributed in the form of a 50% stock dividend. FCStone’s stockholders of record at the close of business on September 17, 2007 will receive one additional share for every two shares of common stock held on that date. FCStone intends to distribute the shares on September 27, 2007. The stock split will increase the number of shares of FCStone common stock outstanding from approximately 18.3 million to approximately 27.5 million.
In announcing the stock split, Mr. Anderson noted that the decision to split FCStone’s stock reflected the Company’s continued strong performance as well as its positive outlook for future earnings growth. “We believe this stock split will place the market price of FCStone’s common stock in a more attractive range for investors,” said Mr. Anderson.
Conference Call & Web Cast
A conference call will be held today, Thursday, July 12, 2007 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 800-218-8862 (within the United States and Canada), or 303-262-2140 (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 Thursday, July 26, 2007. 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: 11093056.
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, 2007, executed 54.1 million derivative contracts in the exchange-traded and over-the-counter markets. In addition to renewable fuels, the FCStone Group companies work in all the major commodity areas including agriculture, energy, foods, forestry, 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. These statements involve known and unknown risks, assumptions, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance, strategy, anticipated, estimated or projected results or achievements expressed or implied by these forward-looking statements. These factors include, among other things, customer acceptance of risk management, commodity price volatility, transaction volumes, interest rates, our ability to develop new products for our customers and other factors set forth elsewhere herein and in the Company’s Securities and Exchange Commission filings, including the Forms, 10-K, 10-Q and 8-K reports. 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.
Financial Statements to Follow
FCSTONE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share amounts)
| | | | | | | | | | | | | | |
| | | Three Months Ended
May 31, | | Nine Months Ended
May 31, |
| | | 2006 | | | 2007 | | 2006 | | | 2007 |
Revenues: | | | | | | | | | | | | | | |
Commissions and clearing fees | | $ | 27,795 | | | $ | 35,291 | | $ | 74,635 | | | $ | 101,547 |
Service, consulting and brokerage fees | | | 9,170 | | | | 10,743 | | | 24,598 | | | | 29,152 |
Interest | | | 6,033 | | | | 12,045 | | | 15,277 | | | | 31,172 |
Other | | | 1,314 | | | | 946 | | | 2,480 | | | | 2,392 |
Sales of commodities | | | 314,486 | | | | 303,866 | | | 860,678 | | | | 1,101,752 |
| | | | | | | | | | | | | | |
Total revenues | | | 358,798 | | | | 362,891 | | | 977,668 | | | | 1,266,015 |
| | | | | | | | | | | | | | |
Costs and expenses: | | | | | | | | | | | | | | |
Cost of commodities sold | | | 311,194 | | | | 298,522 | | | 848,480 | | | | 1,084,200 |
Employee compensation and broker commissions | | | 11,014 | | | | 11,469 | | | 30,663 | | | | 34,624 |
Pit brokerage and clearing fees | | | 12,617 | | | | 17,640 | | | 33,626 | | | | 47,182 |
Introducing broker commissions | | | 6,373 | | | | 8,832 | | | 15,575 | | | | 25,208 |
Employee benefits and payroll taxes | | | 2,608 | | | | 2,883 | | | 7,292 | | | | 8,252 |
Interest | | | 1,601 | | | | 2,579 | | | 4,335 | | | | 9,069 |
Depreciation | | | 424 | | | | 457 | | | 1,214 | | | | 1,336 |
Bad debt expense | | | 1,304 | | | | 92 | | | 1,709 | | | | 1,632 |
Other expenses | | | 5,640 | | | | 7,272 | | | 16,824 | | | | 19,770 |
| | | | | | | | | | | | | | |
Total costs and expenses | | | 352,775 | | | | 349,746 | | | 959,718 | | | | 1,231,273 |
| | | | | | | | | | | | | | |
Income before income tax expense and minority interest | | | 6,023 | | | | 13,145 | | | 17,950 | | | | 34,742 |
Minority interest | | | (378 | ) | | | 201 | | | (370 | ) | | | 639 |
| | | | | | | | | | | | | | |
Income after minority interest and before income tax expense | | | 6,401 | | | | 12,944 | | | 18,320 | | | | 34,103 |
Income tax expense | | | 2,350 | | | | 4,875 | | | 6,950 | | | | 12,800 |
| | | | | | | | | | | | | | |
Net income | | $ | 4,051 | | | $ | 8,069 | | $ | 11,370 | | | $ | 21,303 |
| | | | | | | | | | | | | | |
Weighted average shares outstanding : | | | | | | | | | | | | | | |
Basic | | | 14,490 | | | | 17,928 | | | 14,487 | | | | 15,677 |
Diluted | | | 14,490 | | | | 18,948 | | | 14,487 | | | | 15,929 |
Earnings per share: | | | | | | | | | | | | | | |
Basic | | $ | 0.28 | | | $ | 0.45 | | $ | 0.78 | | | $ | 1.36 |
Diluted | | $ | 0.28 | | | $ | 0.43 | | $ | 0.78 | | | $ | 1.34 |
FCSTONE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except share amounts)
| | | | | | | | |
| | | August 31,
2006 | | | May 31,
2007 | |
| | | | | | (Unaudited) | |
| ASSETS | | | | | | | | |
Cash and cash equivalents | | | | | | | | |
Unrestricted | | $ | 51,659 | | | $ | 93,187 | |
Restricted | | | 3,581 | | | | 1,097 | |
Segregated | | | 14,221 | | | | 19,496 | |
Commodity deposits and accounts receivable | | | | | | | | |
Commodity exchanges and clearing organizations – customer segregated, including United States treasury bills and notes | | | 604,536 | | | | 670,677 | |
Proprietary commodity accounts | | | 20,133 | | | | 68,460 | |
Customer regulated accounts in deficit secured by U.S. treasury bills and notes | | | 29,166 | | | | 86,743 | |
| | | | | | | | |
Total commodity deposits and accounts receivable | | | 653,835 | | | | 825,880 | |
| | | | | | | | |
Marketable securities, at fair value – customer segregated and other | | | 149,609 | | | | 223,598 | |
Trade accounts receivable | | | 9,296 | | | | 3,880 | |
Open contracts receivable | | | 30,524 | | | | 137,201 | |
Counterparty deposits and accounts receivable | | | 23,607 | | | | 23,805 | |
Notes receivable | | | 14,971 | | | | 38,600 | |
Inventories – grain and fertilizer | | | — | | | | — | |
Exchange memberships and stock, at cost | | | 6,587 | | | | 8,169 | |
Furniture, equipment, software, and improvements, net | | | 3,164 | | | | 4,310 | |
Deferred income taxes | | | 4,697 | | | | 4,497 | |
Investments in affiliates and other organizations | | | 3,657 | | | | 3,749 | |
Other assets | | | 4,096 | | | | 17,964 | |
Assets held for sale | | | 83,703 | | | | 101,954 | |
| | | | | | | | |
Total assets | | $ | 1,057,207 | | | $ | 1,507,387 | |
| | | | | | | | |
| | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
Liabilities | | | | | | | | |
Commodity and customer regulated accounts payable | | $ | 726,920 | | | $ | 948,079 | |
Trade accounts payable and advances | | | 99,898 | | | | 99,389 | |
Open contracts payable | | | 30,524 | | | | 135,659 | |
Accrued expenses | | | 25,029 | | | | 24,939 | |
Notes payable | | | 23,119 | | | | 43,571 | |
Subordinated debt | | | 7,000 | | | | 1,000 | |
Liabilities held for sale | | | 76,136 | | | | 88,273 | |
| | | | | | | | |
Total liabilities | | | 988,626 | | | | 1,340,910 | |
| | | | | | | | |
Minority interest | | | 3,607 | | | | 4,246 | |
Redeemable common stock held by employee stock ownership plan (ESOP) | | | 6,079 | | | | — | |
Stockholders’ equity: | | | | | | | | |
Common stock, $0.0001 par value, authorized 20,000,000 and 40,000,000 at August 31, 2006 and May 31, 2007, respectively; issued and outstanding 14,537,208 shares at August 31, 2006 and 18,284,267 at May 31, 2007 | | | 21,747 | | | | 103,481 | |
Additional paid-in capital | | | 120 | | | | 397 | |
Accumulated other comprehensive loss | | | (1,955 | ) | | | (1,955 | ) |
Retained earnings | | | 45,062 | | | | 60,308 | |
| | | | | | | | |
| | | 64,974 | | | | 162,231 | |
Less maximum cash obligation related to ESOP shares | | | (6,079 | ) | | | — | |
| | | | | | | | |
Total stockholders’ equity | | | 58,895 | | | | 162,231 | |
| | | | | | | | |
Commitments and contingencies | | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 1,057,207 | | | $ | 1,507,387 | |
| | | | | | | | |
FCSTONE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited in thousands)
| | | | | | | | |
| | | Nine Months Ended
May 31, | |
| | | 2006 | | | 2007 | |
Cash flows from operating activities: | | | | | | | | |
Net income | | $ | 11,370 | | | $ | 21,303 | |
Depreciation | | | 1,214 | | | | 1,336 | |
Amortization of discount on note receivable | | | — | | | | (41 | ) |
Gain on conversion of exchange membership to common stock | | | — | | | | (105 | ) |
Equity in earnings of affiliates, net of distributions | | | 24 | | | | 284 | |
Minority interest, net of distributions | | | (1,292 | ) | | | 639 | |
Change in commodity accounts receivable/payable, marketable securities and customer segregated funds, net | | | (25,726 | ) | | | (5,150 | ) |
Change in open contracts receivable/payable, net | | | — | | | | (1,542 | ) |
Increase in trade accounts receivable | | | (8,830 | ) | | | 5,416 | |
Decrease (increase) in counterparty deposits and accounts receivable | | | (30,424 | ) | | | (198 | ) |
Decrease in inventory | | | 464 | | | | — | |
Increase in other assets | | | (1,459 | ) | | | (13,713 | ) |
Increase in assets held for sale | | | (7,300 | ) | | | (18,739 | ) |
Increase (decrease) in trade accounts payable and advances | | | 63,899 | | | | (509 | ) |
Increase (decrease) in accrued expenses | | | 4,938 | | | | (144 | ) |
Decrease in liabilities held for sale | | | (6,457 | ) | | | (5,158 | ) |
| | | | | | | | |
Net cash provided by (used in) operating activities | | | 421 | | | | (16,321 | ) |
| | | | | | | | |
Cash flows from investing activities: | | | | | | | | |
Purchase of furniture, equipment, and improvements | | | (894 | ) | | | (1,928 | ) |
Purchase of furniture, equipment, and improvements held for sale | | | (27 | ) | | | (54 | ) |
Purchase of market securities | | | — | | | | (25,000 | ) |
Issuance of notes receivable, net | | | (19,268 | ) | | | (23,588 | ) |
Purchase of exchange membership and stock | | | (4,945 | ) | | | (1,855 | ) |
Proceeds from the sale of exchange membership and stock | | | 613 | | | | — | |
Proceeds from conversion of exchange membership to common stock | | | — | | | | 378 | |
| | | | | | | | |
Net cash used in investing activities | | | (24,521 | ) | | | (52,047 | ) |
| | | | | | | | |
Cash flows from financing activities: | | | | | | | | |
Increase (decrease) in checks written in excess of bank balance | | | 236 | | | | (1,656 | ) |
Net proceeds from notes payable held for sale | | | 21,012 | | | | 19,363 | |
Proceeds from notes payable, net | | | 25,480 | | | | 20,452 | |
Proceeds from initial public offering, net | | | — | | | | 129,670 | |
Proceeds from issuance of common stock | | | — | | | | 550 | |
Proceeds from issuance of redeemable common stock held by ESOP | | | 223 | | | | — | |
Payment for redemption of common stock | | | — | | | | (48,486 | ) |
Dividends paid | | | (2,898 | ) | | | (6,057 | ) |
Payments under capital lease held for sale | | | (412 | ) | | | (412 | ) |
Monies deposited in escrow | | | (44 | ) | | | (54 | ) |
Monies released from escrow | | | — | | | | 2,526 | |
Proceeds from subordinated debt | | | 4,500 | | | | 8,000 | |
Payments on subordinated debt | | | (3,000 | ) | | | (14,000 | ) |
| | | | | | | | |
Net cash provided by financing activities | | | 45,097 | | | | 109,896 | |
| | | | | | | | |
Net increase in cash and cash equivalents – unrestricted | | | 20,997 | | | | 41,528 | |
Cash and cash equivalents – unrestricted – beginning of period | | | 21,347 | | | | 51,659 | |
| | | | | | | | |
Cash and cash equivalents – unrestricted – end of period | | $ | 42,344 | | | $ | 93,187 | |
| | | | | | | | |
Supplemental disclosures of cash flow information: | | | | | | | | |
Interest paid | | $ | 3,995 | | | $ | 8,663 | |
Income taxes paid | | $ | 7,596 | | | $ | 13,371 | |
| | | | | | | | |
Noncash financing activities: | | | | | | | | |
Increase (decrease) in maximum cash obligation related to ESOP shares | | $ | 1,368 | | | $ | (6,079 | ) |
| | | | | | | | |
Non-GAAP Financial Measures
The following table reconciles revenues, net of cost of commodities sold, with our total revenues.
| | | | | | | | | | | | |
| | | Three Months Ended
May 31, | | Nine Months Ended
May 31, |
| | | 2006 | | 2007 | | 2006 | | 2007 |
| | | ($ in thousands) |
Revenues: | | | | | | | | | | | | |
Commissions and clearing fees | | $ | 27,795 | | $ | 35,291 | | $ | 74,635 | | $ | 101,547 |
Service, consulting and brokerage fees | | | 9,170 | | | 10,743 | | | 24,598 | | | 29,152 |
Interest | | | 6,033 | | | 12,045 | | | 15,277 | | | 31,172 |
Other | | | 1,314 | | | 946 | | | 2,480 | | | 2,392 |
Sales of commodities | | | 314,486 | | | 303,866 | | | 860,678 | | | 1,101,752 |
| | | | | | | | | | | | |
Total revenues | | | 358,798 | | | 362,891 | | | 977,668 | | | 1,266,015 |
Less: Cost of commodities sold | | | 311,194 | | | 298,522 | | | 848,480 | | | 1,084,200 |
| | | | | | | | | | | | |
Revenues, net of cost of commodities sold | | $ | 47,604 | | $ | 64,369 | | $ | 129,188 | | $ | 181,815 |
| | | | | | | | | | | | |
The following table reconciles EBITDA with our net income.
| | | | | | | | | | | | |
| | | Three Months Ended
May 31, | | Nine Months Ended
May 31, |
| | | 2006 | | 2007 | | 2006 | | 2007 |
| | | ($ in thousands) |
Net income: | | $ | 4,051 | | $ | 8,069 | | $ | 11,370 | | $ | 21,303 |
Plus: interest expense | | | 1,601 | | | 2,579 | | | 4,335 | | | 9,069 |
Plus: depreciation and amortization | | | 424 | | | 457 | | | 1,214 | | | 1,336 |
Plus income tax expense | | | 2,350 | | | 4,875 | | | 6,950 | | | 12,800 |
| | | | | | | | | | | | |
EBITDA | | $ | 8,426 | | $ | 15,980 | | $ | 23,869 | | $ | 44,508 |
| | | | | | | | | | | | |
Commodity and Risk Management Services Segment:
The following table provides the financial performance for this segment.
| | | | | | | | | | | | |
| | | Three Months Ended
May 31, | | Nine Months Ended
May 31, |
| | | 2006 | | 2007 | | 2006 | | 2007 |
| | | ($ in thousands) |
Sales of commodities | | | 542 | | $ | 1,265 | | $ | 5,197 | | $ | 3,807 |
Cost of commodities sold | | | 541 | | | 1,262 | | | 5,113 | | | 3,722 |
| | | | | | | | | | | | |
Gross profit on commodities sold | | | 1 | | | 3 | | | 84 | | | 85 |
Commissions and clearing fees | | | 8,916 | | | 12,151 | | | 24,852 | | | 38,090 |
Service, consulting and brokerage fees | | | 9,320 | | | 10,873 | | | 25,051 | | | 29,548 |
Interest | | | 2,744 | | | 5,793 | | | 6,087 | | | 14,181 |
Other revenues | | | 19 | | | 41 | | | 83 | | | 147 |
| | | | | | | | | | | | |
Revenues, net of cost of commodities sold | | | 21,000 | | | 28,861 | | | 56,157 | | | 82,051 |
Other costs and expenses: | | | | | | | | | | | | |
Expenses (excluding interest expense) | | | 14,894 | | | 18,853 | | | 40,339 | | | 55,129 |
Interest expense | | | 50 | | | 87 | | | 87 | | | 284 |
| | | | | | | | | | | | |
Total costs and expenses (excluding cost of commodities sold) | | | 14,944 | | | 18,940 | | | 40,426 | | | 55,413 |
| | | | | | | | | | | | |
Segment income before minority interest and income taxes | | $ | 6,056 | | $ | 9,921 | | $ | 15,731 | | $ | 26,638 |
| | | | | | | | | | | | |
Clearing and Execution Segment:
The following table provides the financial performance for this segment.
| | | | | | | | | | | | |
| | | Three Months Ended
May 31, | | Nine Months Ended
May 31, |
| | | 2006 | | 2007 | | 2006 | | 2007 |
| | | ($ in thousands) |
Sales of commodities | | $ | — | | $ | — | | $ | — | | $ | — |
Cost of commodities sold | | | — | | | — | | | — | | | — |
| | | | | | | | | | | | |
Gross profit on commodities sold | | | — | | | — | | | — | | | — |
Commissions and clearing fees | | | 18,997 | | | 23,254 | | | 50,151 | | | 63,953 |
Service, consulting and brokerage fees | | | — | | | — | | | — | | | — |
Interest | | | 2,508 | | | 4,237 | | | 7,234 | | | 11,722 |
Other revenues | | | — | | | 5 | | | — | | | 105 |
| | | | | | | | | | | | |
Revenues, net of cost of commodities sold | | | 21,505 | | | 27,496 | | | 57,385 | | | 75,780 |
Other costs and expenses: | | | | | | | | | | | | |
Expenses (excluding interest expense) | | | 18,127 | | | 23,587 | | | 48,651 | | | 64,367 |
Interest expense | | | 97 | | | 108 | | | 251 | | | 572 |
| | | | | | | | | | | | |
Total costs and expenses (excluding cost of commodities sold) | | | 18,224 | | | 23,695 | | | 48,902 | | | 64,939 |
| | | | | | | | | | | | |
Segment income before minority interest and income taxes | | $ | 3,281 | | $ | 3,801 | | $ | 8,483 | | $ | 10,841 |
| | | | | | | | | | | | |
Exchange contract trading volume (millions) | | | 11.8 | | | 13.4 | | | 32.9 | | | 38.2 |
Financial Services Segment:
The following table provides the financial performance for this segment.
| | | | | | | | | | | | | | |
| | | Three Months Ended
May 31, | | Nine Months Ended
May 31, |
| | | 2006 | | | 2007 | | 2006 | | | 2007 |
| | | ($ in thousands) |
Sales of commodities | | $ | 14,313 | | | $ | 3,849 | | $ | 24,229 | | | $ | 20,006 |
Cost of commodities sold | | | 14,233 | | | | 3,835 | | | 24,103 | | | | 19,904 |
| | | | | | | | | | | | | | |
Gross profit on commodities sold | | | 80 | | | | 14 | | | 126 | | | | 102 |
Commissions and clearing fees | | | — | | | | — | | | — | | | | — |
Service, consulting and brokerage fees | | | — | | | | — | | | — | | | | — |
Interest | | | 865 | | | | 1,903 | | | 2,652 | | | | 6,061 |
Other revenues | | | 409 | | | | 653 | | | 1,109 | | | | 1,335 |
| | | | | | | | | | | | | | |
Revenues, net of cost of commodities sold | | | 1,354 | | | | 2,570 | | | 3,887 | | | | 7,498 |
Other costs and expenses: | | | | | | | | | | | | | | |
Expenses (excluding interest expense) | | | 635 | | | | 542 | | | 1,760 | | | | 1,621 |
Interest expense | | | 720 | | | | 1,471 | | | 2,229 | | | | 4,873 |
| | | | | | | | | | | | | | |
Total costs and expenses (excluding cost of commodities sold) | | | 1,355 | | | | 2,013 | | | 3,989 | | | | 6,494 |
| | | | | | | | | | | | | | |
Segment income (loss) before minority interest and income taxes | | $ | (1 | ) | | $ | 557 | | $ | (102 | ) | | $ | 1,004 |
| | | | | | | | | | | | | | |
Grain Merchandising Segment:
The following table provides the financial performance for this segment.
| | | | | | | | | | | | | | |
| | | Three Months Ended
May 31, | | Nine Months Ended
May 31, |
| | | 2006 | | | 2007 | | 2006 | | | 2007 |
| | | ($ in thousands) |
Sales of commodities | | $ | 299,631 | | | $ | 298,752 | | $ | 831,252 | | | $ | 1,077,939 |
Cost of commodities sold | | | 296,548 | | | | 293,555 | | | 819,673 | | | | 1,061,017 |
| | | | | | | | | | | | | | |
Gross profit on commodities sold | | | 3,083 | | | | 5,197 | | | 11,579 | | | | 16,922 |
Commissions and clearing fees | | | — | | | | — | | | — | | | | — |
Service, consulting and brokerage fees | | | — | | | | — | | | — | | | | — |
Interest | | | 192 | | | | 30 | | | 425 | | | | 94 |
Other revenues | | | 852 | | | | 398 | | | 1,310 | | | | 1,010 |
| | | | | | | | | | | | | | |
Revenues, net of cost of commodities sold | | | 4,127 | | | | 5,625 | | | 13,314 | | | | 18,026 |
Other costs and expenses: | | | | | | | | | | | | | | |
Expenses (excluding interest expense) | | | 4,359 | | | | 3,619 | | | 11,467 | | | | 11,414 |
Interest expense | | | 961 | | | | 1,336 | | | 2,758 | | | | 4,482 |
| | | | | | | | | | | | | | |
Total costs and expenses (excluding cost of commodities sold) | | | 5,320 | | | | 4,955 | | | 14,225 | | | | 15,896 |
| | | | | | | | | | | | | | |
Segment income before minority interest and income taxes | | $ | (1,193 | ) | | $ | 670 | | $ | (911 | ) | | $ | 2,130 |
| | | | | | | | | | | | | | |
Grain bushels sold (millions) | | | 56.0 | | | | 45.3 | | | 180.6 | | | | 174.1 |
Quarterly Financial Highlights:
The following table provides summary financial highlights
by quarter for the first three quarters of fiscal year 2007.
| | | | | | | | | |
| | | Three Months Ended |
| | | Nov 30,
2006 | | Feb 28,
2007 | | May 31,
2007 |
| | | ($ in thousands) |
NON GAAP-Revenues, net of cost of commodities sold | | $ | 57,348 | | $ | 60,098 | | $ | 64,369 |
GAAP-Income after minority interest and before income tax expense | | $ | 10,114 | | $ | 11,045 | | $ | 12,944 |
GAAP-Net income | | $ | 6,314 | | $ | 6,920 | | $ | 8,069 |
