OTC Markets Releases First Quarter 2016 Financial Results

OTC Markets Group Inc. (OTCQX: OTCM), operator of open, transparent and connected financial markets for 10,000 U.S. and global securities, announced on Wednesday its financial results for the first quarter 2016.

R. Cromwell Coulson, president and CEO of OTC Markets, stated:

“During the first quarter, we continued to invest in our people and systems and to deliver on our mission to create better informed and more efficient markets. We believe that our dealer based markets create a superior investor information and trading experience via online and institutional brokers.  Our network model of competing broker-dealers and our data-driven listing standards provide the venues of choice for the innovative companies traded today on our OTCQX Best Market and OTCQB Venture Market.  These markets are tailor-made for the next generation of entrepreneurial public companies that will be financed by online securities offerings under Regulation A+ and crowdfunding.”

CFO, Bea Ordonez, added:

“We continue to deliver recurring revenue across our business lines as well as strong operating cash flows.  This will allow us to continue to invest in our infrastructure, in products that deliver elegant, reliable and cost-effective market technology, and in data solutions that create unique value for our diverse subscriber base.”

Check out the full results below.

First Quarter 2016 compared to First Quarter 2015

 

OTC Markets also announced that its board of directors have authorized a quarterly cash dividend in the amount of $0.14 for its Class A common stock. It will be payable on June 23rd to stockholders of record on June 9th. Ex-dividend date is June 7th. The company also disclosed certain non-GAAP results of operations, including adjusted EBITDA and adjusted diluted earnings per share that either exclude or include amounts.

OTC MARKETS GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share information)
(Unaudited)
	Three Months Ended March 31,
	2016		2015
Gross revenues	$               12,751		$               11,524
Redistribution fees and rebates	(593)		(600)
Net revenues	12,158		10,924
Operating expenses
Compensation and benefits	5,237		4,958
IT Infrastructure and information services	1,340		1,157
Professional and consulting fees	499		389
Marketing and advertising	280		266
Occupancy costs	405		361
Depreciation and amortization	417		406
General, administrative and other	183		232
Total operating expenses	8,361		7,769
Income from operations	3,797		3,155
Other (expense) income
Other (expense) income	(8)		16
Income before provision for income taxes	3,789		3,171
Provision for income taxes	1,474		1,315
Net income	$                 2,315		$                 1,856
Net income per share
Basic	$                   0.20		$                   0.16
Diluted	$                   0.20		$                   0.16
Basic weighted average shares outstanding	11,097,753		10,987,948
Diluted weighted average shares outstanding	11,439,786		11,420,840
Non-GAAP Reconciliation
	Three Months Ended March 31,
	2016		2015
Net Income	$                 2,315		$                 1,856
Excluding:
Provision for income taxes	1,474		1,315
Depreciation and amortization	417		406
Stock-based compensation expense	471		429
Adjusted EBITDA	$                 4,677		$                 4,006
Adjusted diluted earnings per share	$                   0.40		$                   0.34
Note: The company used non-GAAP financial measures of operating performance. Non-GAAP measures do not replace and are not superior to the presentation of our GAAP financial results, but are provided to improve overall understanding of the Company’s current financial performance.

OTC MARKETS GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share information)
(Unaudited)
	March 31,		December 31,
	2016		2015
Assets
Current assets
Cash	$               22,645		$               23,925
Accounts receivable, net of allowance for doubtful accounts of $144 and $147	6,299		6,082
Prepaid expenses and other current assets	1,990		1,520
Prepaid income taxes	73		22
Deferred tax assets	187		187
Total current assets	31,093		31,736
Property and equipment, net	3,240		3,507
Non-current deferred tax assets, net	581		470
Goodwill	251		251
Intangible assets, net	40		40
Security deposits	210		210
Total Assets	$               35,515		$               36,214
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$                    512		$                    616
Accrued expenses and other current liabilities	1,841		4,355
Income taxes payable	838		92
Deferred revenue	12,942		12,737
Total current liabilities	16,133		17,800
Deferred rent	240		139
Income tax reserve	751		728
Total Liabilities	17,124		18,667
Commitments and contingencies
Stockholders’ equity
Common stock – par value $0.01 per share
Class A – 14,000,000 authorized, 11,554,730 issued, 11,262,234 outstanding at
March 31, 2016; 11,438,928 issued, 11,192,885 outstanding at December 31, 2015	116		114
Class C – 130,838 shares authorized, issued and outstanding at March 31, 2016
and December 31, 2015	1		1
Additional paid-in capital	11,638		10,786
Retained earnings	9,654		8,916
Treasury stock – 292,496 shares at March 31, 2016 and 246,043 shares at December 31, 2015	(3,018)		(2,270)
Total Stockholders’ Equity	18,391		17,547
Total Liabilities and Stockholders’ Equity	$               35,515		$               36,214