TradeStation Group Announces Record Brokerage Revenues
2002 First Quarter Brokerage Revenues Increase 25% Over Prior Quarter and 35% Year Over Year
Customer Accounts Grow 76% Over Prior Quarter
MIAMI--(BUSINESS WIRE)--April 15, 2002-- 2002 First Quarter Results 54% Better Than Business Outlook
TradeStation Group, Inc. (Nasdaq:TRAD - news), the parent company of the award-winning TradeStation Securities direct-access brokerage, today reported its financial results for the first quarter 2002. First quarter 2002 brokerage revenue was a record high, growing 25% over fourth quarter 2001 brokerage revenue and 35% over first quarter 2001 brokerage revenue, and was 22% better than estimated in the company's 2002 Business Outlook. Also, TradeStation Group's net results were 54% better than what was estimated in its 2002 Business Outlook. The company experienced 76% account growth from fourth quarter 2001 with respect to TradeStation 6 brokerage platform accounts.
First Quarter 2002 Financial Results Demonstrate Strong Brokerage Revenue Growth
In the 2002 first quarter, revenue from TradeStation's brokerage business increased 25% to $6.8 million, as compared to 2001 fourth quarter brokerage revenue of $5.5 million, and increased 35% compared to 2001 first quarter brokerage revenue of $5.1 million. Brokerage revenue for the 2002 first quarter was also 22% better than what was estimated in the company's 2002 Business Outlook. Substantial growth in the number of TradeStation 6 platform accounts was the main reason for the increase. Excluding TradeStation Group's legacy software operations, which have been phased-out by the company since May 2000, revenues increased 17% to $8.5 million in the 2002 first quarter, as compared to $7.3 million in the 2001 fourth quarter, and increased 9% as compared to $7.8 million in the 2001 first quarter. Total revenues, including legacy software operations, were $9.7 million in the 2002 first quarter, compared to $9.1 million in the 2001 fourth quarter, and as compared to $12.1 million in the 2001 first quarter (the 2001 first quarter included $4.3 million of legacy software revenue).
TradeStation Group's first quarter 2002 net loss per share of 5 cents was 54% better than the company's 2002 Business Outlook, and one cent, or 14%, better than the company's net loss per share of 6 cents for the 2001 fourth quarter (after excluding non-recurring, non-cash fourth quarter 2001 charges relating to impairment of goodwill and certain intangible assets and providing a full valuation allowance against deferred tax assets). The company's 2001 first quarter net loss per share was 4 cents.
$18.4 Million of Cash and Marketable Securities
TradeStation Group had cash and marketable securities of $18.4 million at March 31, 2002, approximately $3.9 million of which was restricted at that date. At March 31, 2002, the company had no borrowings other than $1.7 million of capital lease obligations.
``We believe our available cash resources are sufficient to enable our growth to produce sustained positive cash and earnings results,'' said David Fleischman, Chief Financial Officer of TradeStation Group.
Trading Activity Soars As Company Grows Active Trader Customer Base
The company experienced the following daily trading results with respect to TradeStation 6 platform equities and futures accounts in the 2002 first quarter:
Equities Account Statistics Q1 02 Q4 01 % Increase
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Average daily revenue trades 3,824 2,177 76%
Average daily share volume 4,452,000 2,590,000 72%
Futures Account Statistics Q1 02 Q4 01 % Increase
-------------------------- ----- ----- ----------
Average daily revenue trades
(a "trade" includes both the 953 329 190%
initiating and closing trades)
``While virtually every major online brokerage firm has experienced a decline in average daily trades during the 2002 first quarter and trading volume is down from a year ago, we have achieved record brokerage revenue,'' said Bill Cruz, Co-Chairman of the Board and Co-CEO. ``This growth, in these times, continues to demonstrate the immense drawing power and value of TradeStation 6 to the active trader market.''
Customer Account Metrics Among the Best in the Industry
Stock brokerage clients using the TradeStation 6 platform generated the following customer account metrics in the 2002 first quarter:
Customer Account Metrics
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Annualized average revenue per account $8,811
Annualized trades per account 434
Average assets per account $103,274
``The metrics on customer accounts for equities clients using TradeStation 6 are outstanding,'' said Cruz. ``We have maintained for some time that the TradeStation 6 platform attracts very active traders. Our average TradeStation 6 brokerage client traded more than 100 times in the 2002 first quarter. We believe we will be a major player in the online brokerage industry.''
At the end of the 2002 first quarter, the company had 3,737 funded TradeStation 6 equities and futures accounts, a 76% increase over the 2,127 accounts the company had at the end of the 2001 fourth quarter. ``We believe the trading activity generated by this number of accounts is a powerful statement about the leverage of our active trader business model,'' said Cruz. ``It doesn't take that many accounts to run a sizeable and profitable business. It just takes the right accounts. As we continue to add accounts, they should deliver substantial results without significantly increasing our infrastructure.''
Company Announces New All-Inclusive Per Share Commission Plan
On March 27, 2002, TradeStation Securities launched a new brokerage commission plan that charges active traders fees based solely upon the share volume of their trades, the way institutional traders are charged. Currently, nearly all online brokerage firms that offer direct-access execution charge their customers a commission made up of two components: a per trade charge, typically called a ``ticket'' charge; and ECN and other marked-up pass-through fees for direct-access service. The all-inclusive per share approach now offered by TradeStation greatly simplifies commission pricing and gives active traders the benefit of being able to scale in and out of positions without incurring additional ticket charges.
Company's 2002 Business Outlook May Be Reevaluated Next Quarter
Given the company's recent changes to its brokerage commission pricing structure, and the continued uncertainties surrounding the online brokerage market generally, the company decided to make no revisions to its 2002 Business Outlook that was published January 17, 2002.
``While we have significantly out-performed our Business Outlook for the 2002 first quarter,'' said Fleischman, ``and look forward to the accelerated active trader account growth we believe our new pricing structure will produce, prudence dictates that we make no changes to our Business Outlook until we see at least one fiscal quarter of results from our new pricing structure.''
Conference Call
At 11:00 a.m., eastern time, today, the management of TradeStation Group will conduct an analyst conference call to discuss the company's 2002 first quarter results. The telephone conference will be broadcast live via the Internet at tradestation.com. A rebroadcast of the call will be accessible for approximately 90 days.
About TradeStation Group, Inc.
TradeStation Group, Inc. (NasdaqNM:TRAD), through its operating subsidiary, TradeStation Securities, Inc., offers TradeStation 6 to institutional, professional and serious, active individual traders -- an electronic trading platform that enables clients to design, test and monitor their own custom trading strategies and then automate them with direct-access order execution. The trading platform currently offers streaming real-time equities, options, futures and futures options market data. Equities and options transactions are cleared through Bear, Stearns Securities Corp. (NYSE:BSC - news) and futures and futures options transactions are cleared through Refco, LLC. The company's other operating subsidiary, TradeStation Technologies, Inc., develops and offers strategy trading software tools and subscription services. |
