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MarketAxess Reports Third Quarter 2012 Revenues Of $48.3 Million, Pre-Tax Income Of $21.2 Million And Record Diluted EPS Of $0.36

Webcast and Conference Call Information

Richard M. McVey, chairman and chief executive officer, and Antonio L. DeLise, chief financial officer, will host a conference call to discuss the Company’s financial results and outlook on November 2, 2012, at 9:00 a.m. Eastern time. To access the conference call, please dial 877-299-4454 (U.S.) or +1-617-597-5447 (international). The passcode for all callers is 42452936. The Company will also host a live audio Webcast of the conference call on the Investor Relations section of the Company's website at http://www.marketaxess.com. A replay of the call will be made available by dialing 888-286-8010 (U.S.) or +1-617-801-6888 (international) for one week after the announcement. The passcode for replay callers is 41146492. The Webcast will also be archived on http://www.marketaxess.com for 90 days following the announcement.

About MarketAxess

MarketAxess operates a leading electronic trading platform that enables fixed-income market participants to efficiently trade corporate bonds and other types of fixed-income instruments using MarketAxess’ patented trading technology. Over 1,000 investor and broker-dealer firms are active users of the MarketAxess trading platform, accessing global liquidity in U.S. high-grade corporate bonds, European bonds, high yield and emerging markets bonds, agency bonds, asset-backed and preferred securities and credit default swaps. MarketAxess also offers a number of trading-related products and services, including: market data to assist clients with trading decisions; connectivity solutions that facilitate straight-through processing; technology services to optimize trading environments; and execution services for exchange-traded fund managers and other clients.

MarketAxess maintains its headquarters in New York and has offices in London, Chicago, Salt Lake City, Hong Kong, Singapore and São Paulo. For more information, please visit  www.marketaxess.com.

Cautionary Note Regarding Forward-Looking Statements

This press release may contain forward-looking statements, including statements about the outlook and prospects for Company and industry growth, as well as statements about the Company’s future financial and operating performance. These and other statements that relate to future results and events are based on MarketAxess’ current expectations. Actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties, including: the level and intensity of competition in the fixed-income electronic trading industry and the pricing pressures that may result; the variability of our growth rate; the rapidly evolving nature of the electronic financial services industry; the level of trading volume transacted on the MarketAxess platform; the absolute level and direction of interest rates and the corresponding volatility in the corporate fixed-income market; our ability to develop new products and offerings and the market’s acceptance of those products; our exposure to risks resulting from non-performance by counterparties to transactions executed between our clients in which we act as an intermediary in matching back-to-back trades; our dependence on our broker-dealer clients; our ability to enter into strategic alliances and to acquire other businesses and successfully integrate them with our business; our future capital needs and our ability to obtain capital when needed; and other factors. The Company’s actual results and financial condition may differ, perhaps materially, from the anticipated results and financial condition in any such forward-looking statements. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. More information about these and other factors affecting MarketAxess’ business and prospects is contained in MarketAxess’ periodic filings with the Securities and Exchange Commission and can be accessed at www.marketaxess.com.

 

MarketAxess Holdings Inc.

Consolidated Statements of Operations

                                 
Three Months Ended Nine Months Ended
September 30, September 30,
                   
2012 2011 2012 2011
(In thousands, except per share data)
 
(unaudited)
Revenues
Commissions $ 42,379 $ 39,822 $ 129,971 $ 116,683
Technology products and services 2,979 3,779 9,107 10,871
Information and user access fees 1,896 1,831 5,557 5,239
Investment income 251 303 822 912
Other   752   829   2,360   2,259
Total revenues   48,257   46,564   147,817   135,964
 
Expenses
Employee compensation and benefits 14,636 13,707 45,782 45,079
Depreciation and amortization 2,081 1,799 5,896 4,988
Technology and communications 3,262 2,772 9,232 7,996
Professional and consulting fees 3,202 2,247 9,063 7,784
Occupancy 732 721 2,248 2,195
Marketing and advertising 1,067 1,280 4,246 3,502
General and administrative   2,068   1,742   6,193   4,553
Total expenses   27,048   24,268   82,660   76,097
 
Income before taxes 21,209 22,296 65,157 59,867
Provision for income taxes   7,727   8,852   25,553   23,706
Net income $ 13,482 $ 13,444 $ 39,604 $ 36,161
 
Per Share Data:
Earnings per share:
Basic $ 0.37 $ 0.36 $ 1.08 $ 0.98
Diluted $ 0.36 $ 0.34 $ 1.05 $ 0.91
 
Cash dividends declared per common share $ 0.11 $ 0.09 $ 0.33 $ 0.27
 
Weighted-average common shares:
Basic 36,500 37,126 36,521 36,798
Diluted 37,541 39,828 37,892 39,539
 
 

MarketAxess Holdings Inc.

  Consolidated Condensed Balance Sheet Data

                 
September 30, 2012 December 31, 2011
 
(In thousands)
 
(unaudited)
Assets
Cash and cash equivalents $ 150,101 $ 169,620
Securities available-for-sale 54,181 78,110
Accounts receivable, net 33,414 36,170
All other assets   67,232   65,558
Total assets $ 304,928 $ 349,458
 
Liabilities and Stockholders' Equity
Total liabilities $ 32,994 $ 37,019
Total stockholders' equity   271,934   312,439
Total liabilities and stockholders' equity $ 304,928 $ 349,458
 
 

MarketAxess Holdings Inc.

  Reconciliation of Non-GAAP Financial Measures

                 
Three Months Ended Nine Months Ended
September 30, September 30,
                   
2012 2011 2012 2011
(In thousands)
 
(unaudited)
 
Net income $ 13,482 $ 13,444 $ 39,604 $ 36,161
 
Add back:
Interest expense 55 14 128 46
 
Provision for income taxes 7,727 8,852 25,553 23,706
 
Depreciation and amortization   2,081   1,799   5,896   4,988
 
Earnings before interest, taxes, depreciation
and amortization (EBITDA) $ 23,345 $ 24,109 $ 71,181 $ 64,901
 
 

 

      MarketAxess Holdings Inc.

      Volume and Fee Per Million Statistics

                 
Three Months Ended Nine Months Ended
September 30, September 30,
                   
2012 2011 2012 2011
                         
Total Trading Volume
 
($ in millions)
(unaudited)
 
U.S. high-grade - multi dealer 1
fixed-rate $ 83,193 $ 79,233 $ 265,876 $ 238,577
floating-rate 2,795 2,761 9,104 9,524
Eurobond 6,016 7,580 26,543 28,891
Other 1,2   45,748   42,092   138,995   122,814
Total $ 137,752 $ 131,666 $ 440,518 $ 399,806
                         
Average Daily Volume
 
($ in millions)
(unaudited)
 
U.S. high-grade 1 $ 1,365 $ 1,281 $ 1,463 $ 1,313
Eurobond 94 117 141 154
Other 1,2   726   658   739   650
Total $ 2,185 $ 2,056 $ 2,344 $ 2,116
 
Number of U.S. Trading Days 3 63 64 188 189
Number of U.K. Trading Days 4 64 65 188 188
                         
Average Variable Transaction Fee Per Millon
 
U.S. high-grade - multi dealer
fixed-rate $ 209 $ 195 $ 203 $ 188
floating-rate   37   24   30   21
Total U.S. high-grade 203 189 198 182
Eurobond 79 108 71 101
Other   216   175   208   177
Total $ 202 $ 180 $ 193 $ 174
 
 
1 Consistent with FINRA TRACE reporting standards, both sides of trades are included in the Company's
reported volumes when the Company executes trades on a riskless principal basis between two counterparties.
 
2 Effective January 2012, the Company no longer reports credit default swaps trading volumes.
Credit default swap volumes previously reported in "Other" trading volume have not been removed.
 
3 The number of U.S. trading days is based on the SIFMA holiday recommendation calendar.
 
4 The number of U.K. trading days is based on the U.K. Bank holiday schedule.
 




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