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Global Brokerage, Inc. Announces Fourth Quarter 2016 Results

PR-Inside.com: 2017-03-20 11:03:01

Global Brokerage Inc / Global Brokerage, Inc. Announces Fourth Quarter 2016 Results . Processed and transmitted by Nasdaq Corporate Solutions. The issuer is solely responsible for the content of this announcement.

Fourth Quarter 2016 Highlights & Updates:

  • U.S. GAAP net revenues from continuing operations of $80.6 million
  • U.S. GAAP net income attributable to Global Brokerage, Inc. from continuing operations of $10.7 million or $1.91 per diluted share, including a $6.4 million gain on derivative liability
  • U.S. GAAP net revenues from discontinued operations of $8.7 million
  • U.S. GAAP net loss attributable to Global Brokerage, Inc. from discontinued operations of $11.1 million or $1.97 per diluted share
  • Adjusted EBITDA from continuing and discontinued operations of $30.8 million
  • Strong combined operating cash position of $226.2 million at December 31, 2016
  • In March 2017, repaid $30.0 million on the Leucadia Credit Agreement leaving $128.0 million outstanding

NEW YORK, March 20, 2017 (GLOBE NEWSWIRE) -- Global Brokerage, Inc. (NASDAQ:GLBR), today announced for the quarter ended December 31, 2016, U.S. GAAP trading revenue from continuing operations of $79.5 million, compared to $65.4 million for the quarter ended December 31, 2015. U.S. GAAP net income attributable to Global Brokerage, Inc. from continuing operations was $10.7 million (including a $6.4 million gain on derivative liabilities) for the quarter ended December 31, 2016, or $1.91 per diluted share, compared to U.S. GAAP net loss attributable to Global Brokerage, Inc. from continuing operations of $85.7 million (including a $99.9 million loss on derivative liabilities), or $15.75 per diluted share, for the quarter ended December 31, 2015.

For the twelve months ended December 31, 2016, U.S. GAAP trading revenue from continuing operations was $276.0 million, compared to $250.0 million for the twelve months ended December 31, 2015.  U.S. GAAP net income attributable to Global Brokerage, Inc. from continuing operations was $96.7 million for the twelve months ended December 31, 2016 or $17.24 per diluted share (including a $206.8 million net gain on derivative liabilities), compared to U.S. GAAP net loss attributable to Global Brokerage, Inc. from continuing operations of $513.6 million (including a $354.7 million loss on derivative liabilities), or $100.96 per diluted share, for the twelve months ended December 31, 2015.

The net gain/loss on derivative liabilities consists of non-cash changes in the value of embedded derivatives associated with the Leucadia Letter and Credit Agreements (as described further below).  The Letter Agreement is a component of the financing package provided by Leucadia National Corp. ("Leucadia"). On January 15, 2015, FXCM Group, LLC ("FXCM Group") customers suffered negative equity balances due to the unprecedented move in the Swiss Franc after the Swiss National Bank ("SNB") discontinued its peg of the Swiss Franc to the Euro.  On January 16, 2015, FXCM Group entered into a financing agreement with Leucadia that permitted FXCM Group's regulated subsidiaries to meet their regulatory capital requirements and continue normal operations after significant losses were incurred resulting from the events of January 15, 2015. 

On September 1, 2016 we completed the restructuring of the financing arrangements with Leucadia (the "Leucadia Restructuring Transaction"). We amended the terms of the Amended and Restated Credit Agreement (the "Credit Agreement") and replaced the Amended and Restated Letter Agreement (the "Letter Agreement") with a new Limited Liability Company Agreement. 

U.S. GAAP trading revenue from discontinued operations for the quarter ended December 31, 2016 was $8.5 million, compared to $11.3 million for the quarter ended December 31, 2015.  U.S. GAAP net loss attributable to Global Brokerage, Inc. from discontinued operations was $11.1 million for the quarter ended December 31, 2016, or $1.97 per diluted share, compared to U.S. GAAP net loss attributable to Global Brokerage, Inc. from discontinued operations of $19.3 million, or $3.54 per diluted share, for the quarter ended December 31, 2015.

U.S. GAAP trading revenue from discontinued operations for the twelve months ended December 31, 2016 was $31.1 million, compared to $71.5 million for the twelve months ended December 31, 2015.  U.S. GAAP net loss attributable to Global Brokerage, Inc. from discontinued operations was $26.0 million for the twelve months ended December 31, 2016, or $4.64 per diluted share, compared to U.S. GAAP net loss attributable to Global Brokerage, Inc. from discontinued operations of $40.3 million, or $7.93 per diluted share, for the twelve months ended December 31, 2015.

Adjusted EBITDA from continuing and discontinued operations for the quarter ended December 31, 2016 was $30.8 million, compared to $12.6 million for the quarter ended December 31, 2015.

Adjusted EBITDA from continuing and discontinued operations for the twelve months ended December 31, 2016 was $58.4 million, compared to $38.2 million for the twelve months ended December 31, 2015.

Adjusted EBITDA is a Non-GAAP financial measure. This measure does not represent and should not be considered as a substitute for net income, net income attributable to Global Brokerage, Inc. or net income per Class A share or as a substitute for cash flow from operating activities, each as determined in accordance with U.S. GAAP, and our calculations of these measures may not be comparable to similarly entitled measures reported by other companies. See "Non-GAAP Financial Measures" beginning on A-3 of this release for additional information regarding these Non-GAAP financial measures and for reconciliations of such measures to the most directly comparable measures calculated in accordance with U.S. GAAP.

Selected Customer Trading Metrics from Continuing Operations
       
   Three Months 
Ended December 31,
 Twelve Months 
Ended December 31,
 
    2016  2016 
       
Total Customer Trading Volume (in Billions US$ Equivalent) - Ex FXCM US LLC$798 $3,346 
Total Customer Trading Volume (in Billions US$ Equivalent) - FXCM US LLC$172 $722 
Total Customer Trading Volume (in Billions US$ Equivalent)$  970 $  4,068 
Retail Active Accounts - Ex FXCM US LLC 132,456  132,456 
Retail Active Accounts - FXCM US LLC 46,326  46,326 
Retail Active Accounts   178,782   178,782 
Trading days in period  64  259 
Daily Average Trades - Customers - Ex FXCM US LLC 481,713  506,238 
Daily Average Trades - Customers - FXCM US LLC 100,680  109,737 
Daily Average Trades - Customers  582,394   615,976 
Daily average trades per active account - Ex FXCM US LLC 3.6  3.8 
Daily average trades per active account - FXCM US LLC 2.2  2.4 
Daily average trades per active account  3.3   3.4 
Trading revenue per million traded$82 $68 
Total customer equity ($ in millions)$662 $662 
     

More information, including historical results for each of the above metrics, can be found on the investor relations page of Global Brokerage, Inc.'s website ir.globalbrokerage.info.

This operating data is preliminary and subject to revision and should not be taken as an indication of the financial performance of Global Brokerage, Inc. Global Brokerage, Inc. undertakes no obligation to publicly update or review previously reported operating data. Any updates to previously reported operating data will be reflected in the historical operating data that can be found on the Investor Relations page of the Company's corporate website ir.globalbrokerage.info.

Disclosure Regarding Forward-Looking Statements

In addition to historical information, this earnings release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and/or the Private Securities Litigation Reform Act of 1995, which reflect Global Brokerage's current views with respect to, among other things, its operations and financial performance in the future. These forward-looking statements are not historical facts and are based on current expectations, estimates and projections about Global Brokerage's industry, business plans, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict including, without limitation, risks associated with Global Brokerage's strategy to focus on its operations outside the United States, risks associated with the events that took place in the currency markets on January 15, 2015 and their impact on Global Brokerage's capital structure, risks associated with Global Brokerage's ability to recover all or a portion of any capital losses, risks relating to the ability of Global Brokerage to satisfy the terms and conditions of or make payments pursuant to the terms of the finance agreements with Leucadia, as well as risks associated with Global Brokerage's obligations under its other financing agreements, risks related to Global Brokerage's dependence on FX market makers, market conditions, risks associated with the outcome of any potential litigation or regulatory inquiries to which Global Brokerage may become subject, risks associated with potential reputational damage to Global Brokerage resulting from its sale of US customer accounts, and those other risks described under "Risk Factors" in Global Brokerage's Annual Report on Form 10-K, Global Brokerage's latest Quarterly Report on Form 10-Q, and other reports or documents Global Brokerage files with, or furnishes to, the SEC from time to time, which are accessible on the SEC website at sec.gov. This information should also be read in conjunction with Global Brokerage's Consolidated Financial Statements and the Notes thereto contained in Global Brokerage's Annual Report on Form 10-K, Global Brokerage's latest Quarterly Report on Form 10-Q, and in other reports or documents that Global Brokerage files with, or furnishes to, the SEC from time to time, which are accessible on the SEC website at sec.gov.

 About Global Brokerage, Inc.

Global Brokerage, Inc. (NASDAQ:GLBR) is a publicly traded company which owns 50.1% of FXCM Group, LLC (FXCM Group).

 

ANNEX I

Schedule  Page Number
    
U.S. GAAP Results   
Unaudited U.S. GAAP Condensed Consolidated Statements of Operations for the Three and Twelve Months Ended December 31, 2016 and 2015   A-1
Unaudited U.S. GAAP Condensed Consolidated Statements of Financial Condition As of December 31, 2016 and December 31, 2015   A-2
    
Non-GAAP Financial Measures   A-3
Reconciliation of U.S. GAAP Reported Net Income (Loss) to Adjusted EBITDA  A-4
Schedule of Cash and Cash Equivalents and Amounts Due to/from Brokers  A-5

 

Global Brokerage, Inc.  
Condensed Consolidated Statements of Operations  
(In thousands, except per share amounts)  
(Unaudited)  
         
 Three Months Ended December 31, Twelve Months Ended December 31, 
  2016   2015   2016   2015  
Revenues        
Trading revenue$79,450  $65,370  $276,000  $250,042  
Interest income 617   595   2,517   1,827  
Brokerage interest expense (233)  (229)  (888)  (818) 
Net interest revenue 384   366   1,629   1,009  
Other income 759   1,258   6,427   151,227  
Total net revenues 80,593   66,994   284,056   402,278  
Operating Expenses        
Compensation and benefits 17,978   20,969   91,377   93,413  
Referring broker fees# 9306 Words
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