OTC Markets Group Announces Second Quarter 2016 Financial Results

NEW YORK, Aug. 3, 2016 /PRNewswire/ --

Second Quarter 2016 Highlights:

• Gross revenues of $12.6 million for the quarter versus $12.4 million for prior year quarter
• Operating profit margin of 34% for the quarter, versus 35% for the prior year quarter
• Collaboration with Morningstar, Inc. to provide quantitative equity ratings and research reports to OTCQX and OTCQB companies and their investors 
• OTCQX and OTCQB Markets receive state Blue Sky recognition from five states
• Announcing third quarter 2016 dividend of $0.14 per share
• 8 graduates to a national securities exchange

OTC Markets Group Inc. (OTCQX: OTCM), operator of the OTCQX® Best Market, the OTCQB® Venture Market and the Pink® Open Market for 10,000 U.S. and global securities, today announced its financial results for the second quarter 2016.

"State Blue Sky recognition from the first five states represents an important milestone in establishing our data-driven OTCQX and OTCQB market standards as a strong baseline of transparency for investors," said R. Cromwell Coulson, President and Chief Executive Officer.  Mr. Coulson continued, "We focus on creating better informed and more efficient markets by delivering elegant and cost effective technology solutions to improve the trading process for broker-dealer subscribers and make being public less painful for U.S. and global companies."

"We continue to deliver strong, stable recurring revenues across our business lines as well as strong operating cash flows and attractive operating margins.  This allows us to pursue our strategic goal of investing in our infrastructure and in the innovative product suite that will drive future growth," said Bea Ordonez, Chief Financial Officer.

Second Quarter 2016 Compared to Second Quarter 2015

Financial Highlights

• Gross revenues increased $0.2 million, or 2%, to $12.6 million.
• $0.4 million, or 10%, increase in Corporate Services revenues, largely driven by full period impact of OTCQB additions from second quarter of 2015.
• Decrease in revenues from OTC Link® ATS of $0.3 million, or 9%, to $2.7 million, largely a result of a decrease in the number of broker-dealer subscribers and OTC Dealer® users, reduced quote and trade message volumes and the elimination of fees for the quoting of OTCQX and OTCQB securities, partially offset by price increases for messaging.
• Operating expenses increased $0.2 million, or 3%, to $7.9 million, primarily due to increases in compensation costs and information technology costs.
• Income from operations flat at $4.1 million.
• Net income increased $0.1 million, or 5%, to $2.5 million, primarily due to a decrease in the company's effective tax rate for the quarter from 42% to 39%.
• Adjusted EBITDA, which excludes non-cash stock-based compensation expense, increased $0.1 million, or 1%, to $5.0 million, or $0.42 per adjusted diluted share.

Business Developments and News

• Announced that Vermont state regulations recognize the OTCQX market, and Washington, Wyoming, Iowa and Rhode Island state securities regulators recognize the OTCQX and OTCQB markets as securities manuals for the purposes of each state's "Blue Sky Manual Exemption."
• Entered into relationship with Interactive Brokers, to add real-time Level 2+ service to their platform. With this agreement, Interactive Brokers' 353,000 client accounts will have access to complete quote data for OTCQX, OTCQB and Pink securities.
• Expanded market data distribution relationship with Thomson Reuters.
• Filed Petition for Rulemaking with the SEC to extend Regulation A to SEC reporting companies.
• Launched the OTCQX Dividend Index (OTCQXDIV), a new benchmark for tracking the performance of U.S. and International Companies trading on the OTCQX Market that pay a regular dividend.
• Entered into an agreement with Morningstar, Inc., a leading provider of independent investment research, to provide quantitative Morningstar equity ratings and equity research reports to OTCQX and OTCQB companies and their investors.
• Received award for "Best Real-time Market Data Initiative (vendor)" in the 2016 Inside Market Data/Inside Reference Data Awards. OTC Markets Group won in the category for its OTC Compliance Data File.

Dividend Declaration – Quarterly Cash Dividend

OTC Markets Group announced today that its Board of Directors authorized a quarterly cash dividend of $0.14 on its Class A common stock.  The quarterly cash dividend is payable on September 22, 2016, to stockholders of record on September 8, 2016.  The ex-dividend date is September 6, 2016.

Non-GAAP Financial Measures

In addition to disclosing results prepared in accordance with GAAP, the Company also discloses certain non-GAAP results of operations, including adjusted EBITDA and adjusted diluted earnings per share that either exclude or include amounts that are described in the reconciliation table of GAAP to non-GAAP information provided at the end of this release.  Non-GAAP financial measures do not replace and are not superior to the presentation of GAAP financial results, but are provided to improve overall understanding of the Company's current financial performance.  Management believes that this non-GAAP information is useful to both management and investors regarding certain additional financial and business trends related to the operating results.  Management uses this non-GAAP information, along with GAAP information, in evaluating its historical operating performance.

Second Quarter 2016 Conference Call

The Company will host a conference call on Thursday, August 4, 2016, at 8:00 a.m. Eastern Time, during which management will discuss the financial results in further detail.  The conference call and replay of the conference call may be accessed as follows:

Dial-in numbers: 1-877-548-7901 (Domestic); 1-719-325-4755 (International); Conference ID: 4560762

Replay Dial-in Numbers (Available until August 18, 2016): 1-877-870-5176 (Domestic); 1-858-384-5517 (International); Replay Pin Number:  4560762

The earnings release and transcript to the earnings call will also be available in the Investor Relations section of the corporate website at www.otcmarkets.com/investor-relations/overview.

OTC Markets Group's Quarterly Report for the period ended June 30, 2016 is available publicly at www.otcmarkets.com.

About OTC Markets Group Inc.

OTC Markets Group Inc. (OTCQX: OTCM) operates the OTCQX® Best Market, the OTCQB® Venture Market and the Pink® Open Market for 10,000 U.S. and global securities.  Through OTC Link® ATS, we connect a diverse network of broker-dealers that provide liquidity and execution services.  We enable investors to easily trade through the broker of their choice and empower companies to improve the quality of information available for investors.

To learn more about how we create better informed and more efficient markets, visit www.otcmarkets.com.

OTC Link ATS is operated by OTC Link LLC, member FINRA/SIPC and SEC regulated ATS.

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Investor Contact:

Bea OrdonezChief Financial OfficerPhone: 212-220-2215Email: [email protected]

 

 

 

 

 

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SOURCE OTC Markets Group Inc.