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Forex.com Q3 results: Net revenue up 5% to $53.9 million

GAIN Capital Holdings, Inc. (NYSE: GCAP) a.k.a Forex.com, a leading global provider of online trading services, announced its results for the third quarter ended September 30, 2011. 
 
Financial Highlights
 
(Percentage changes and comparisons are referenced to Q3 2010 except where otherwise specified)
 
Net revenue up 4.7% to $53.9 million, compared to net revenue of $51.5 million
EBITDA* of $15.6 million, compared to adjusted EBITDA* of $18.4 million; EBITDA margin of 28.8%
Adjusted net income* of $9.3 million, compared to adjusted net income* of $10.5 million
Adjusted diluted EPS* of $0.24, compared to adjusted diluted EPS* of $0.27
(*See below for reconciliation of non-GAAP financial measures)
 
Operating Highlights
 
(Percentage changes and comparisons are referenced to Q3 2010 except where otherwise specified)
 
Total retail trading volume up 43.7% to $447.9 billion
Total institutional trading volume grew to $260.0 billion
Traded retail accounts for the trailing twelve months up 8.4% to 65,401
Funded retail accounts up 8.7% to 77,013
Client assets up 28.8% to $286.4 million
 
"Third quarter year-on-year revenue growth reflected strong performance in our established markets as well as the continued acceleration of our international expansion. Our strong net revenue and EBITDA performance also demonstrate GAIN's ability to effectively manage the business during periods of significant market volatility, as we experienced in the third quarter, and our solid EBITDA margin of 28.8% underscores the operating leverage inherent in our business model," commented Glenn Stevens, Chief Executive Officer. By the way his salary according to the SEC filling is about $2 million
 
"In the third quarter, we continued to successfully grow both our retail and institutional businesses, which posted significant year-on-year and sequential volume increases. In particular, our institutional platform, GAIN GTX, showed strong growth, with volume increasing to $260.0 billion, accounting for 36.7% of third quarter trading volume, compared to 12.2% in the third quarter of 2010. Our core retail operating metrics also progressed year-on-year, demonstrating the competitive strengths of our technology, products and service offerings, as well as the net benefit of the dbFX business we acquired from Deutsche Bank AG earlier this year," Mr. Stevens continued. Gain Capital’s Q2 report reveals that Gain paid just $2.5 million in upfront cash to Deutsche Bank for the assets acquired from dbFX .
 
Recent Developments
 
The Board of Directors has voted to initiate a quarterly dividend of $0.05 per share, to be paid on December 23, 2011 to shareholders of record as of December 10, 2011
 
After approving a $10.0 million share repurchase plan in May 2011, the Company has purchased 0.85 million shares for a total of approximately $5.0 million to date
 
The Company recently expanded its revolving credit facility from $20.0 million to $50.0 million
"We are continuously evaluating ways to optimize the allocation of our capital. The initiation of a quarterly dividend and stock repurchase program, while also maintaining a strong cash position and a $50.0 million revolving credit facility, demonstrates our ability to return value to shareholders without compromising the Company's ability to actively pursue M&A and other strategic opportunities," Mr. Stevens concluded.
 
Conference Call
 
GAIN Capital will host a conference call today at 5:00 pm ET. Those wishing to listen to the call should dial 1.866.383.8108 in the United States or +1.617.597.5343 from elsewhere, and enter the passcode 64745576# at least 10 minutes prior to the start of the call. A live audio webcast of the call, as well as PDF copies of this release and an accompanying presentation, will also be available on the Investor Relations section of the GAIN Capital website.
 
The audio replay will be available for one week after the call by dialing 1.888.286.8010 in the United States or +1.617.801.6888 from elsewhere, and entering passcode 25400571#. The replay will be available starting approximately two hours after the completion of the conference call.
 
About GAIN Capital
 
GAIN Capital Holdings, Inc. (NYSE: GCAP) is a global provider of online trading services. GAIN's innovative trading technology provides market access and highly automated trade execution services across multiple asset classes, including foreign exchange (forex or FX), contracts for difference (CFDs) and exchange-based products, to a diverse client base of retail and institutional investors.
 
A pioneer in online forex trading, GAIN Capital operates FOREX.com®, one of the largest and best-known brands in the retail forex industry. GAIN's other businesses include GAIN GTX, a fully independent FX ECN for hedge funds and institutions, and GAIN Securities, Inc. (member FINRA/SIPC) a licensed U.S. broker-dealer.
 
GAIN Capital and its affiliates have offices in New York City; Bedminster, New Jersey; London; Sydney; Hong Kong; Tokyo; Singapore and Seoul.
TAGS: forex.com  gain capital  q3 2011  results 

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