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:

Cromwell Coulson 2“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

Quarter Ended March 31,

(in thousands, except shares and per share data)

2016

2015

% change

$ change

OTC Link ATS

$               2,754

$               3,044

(10%)

$           (290)

Market data licensing

5,325

5,233

2%

92

Corporate services

4,672

3,247

44%

1,425

Gross revenues

12,751

11,524

11%

1,227

Net revenues

12,158

10,924

11%

1,234

Operating expenses

8,361

7,769

8%

592

Income from operations

3,797

3,155

20%

642

Operating profit margin

31%

29%

Net income 

$               2,315

$               1,856

25%

$             459

Diluted earnings per share

$                 0.20

$                 0.16

25%

Adjusted diluted earnings per share

$                 0.40

$                 0.34

18%

Weighted-average shares outstanding, diluted

11,439,786

11,420,840

 

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

 

 

 

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