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GAIN Capital Responds to FCA's Consultation Paper

BEDMINSTER, N.J., Dec. 6, 2016 /PRNewswire/ -- GAIN Capital Holdings, Inc. (NYSE: GCAP) ("GAIN" or "the Company"), notes the FCA's consultation paper issued today (CP 16/40 - Enhancing conduct of business rules for firms providing contract for difference products to retail clients).

GAIN is in favor of measures that enhance consumer protection in the FX/CFD market. The Company in particular supports all measures to curb aggressive marketing to inexperienced investors and to ensure all clients fully understand the risks of FX/CFD trading.

The Company operates a broadly diversified business, which includes a retail FX/CFD business spanning eight regulatory jurisdictions, including several which currently set leverage ratios for retail investors at similar levels to those proposed by FCA. The Company also operates a U.S.-based retail futures business and an international institutional trading business, GTX, which are unaffected by the FCA's proposals.

Several of the other changes proposed by the FCA are consistent with GAIN Capital's current practices and should not require significant changes to its operations. The Company does not offer any binary trading products.

GAIN also notes the FCA has proposed a timeline of March 7, 2017 to consider these new rules and looks forward to working closely with the FCA in the coming months.

Throughout its history the Company has excelled at times of regulatory change and views with confidence its ability to navigate the current proposed changes.

About GAIN Capital

GAIN Capital Holdings, Inc. provides innovative trading technology and execution services to retail and institutional investors worldwide, with multiple access points to OTC markets and global exchanges across a wide range of asset classes, including foreign exchange, commodities, and global equities. GAIN Capital is headquartered in Bedminster, New Jersey, with a global presence across North America, Europe and the Asia Pacific regions. For further company information, visit www.gaincapital.com.

To view the original version on PR Newswire, visit: http://www.prnewswire.com/news-releases/gain-capital-responds-to-fcas-consultation-paper-300373755.html.

GAIN Capital Investor Relations
+1 908.731.0737
ir@gaincapital.com

Media Contact
US: Chris Mittendorf, Edelman +1.212.704.8134
UK: Alex Nekrassov, New Century Media + 44 (0) 20 7930 8033
pr@gaincapital.com

GTX FX ECN Sets Volume Record

$10.3 Billion Average Daily Volume Record Set as ECN Network Expands to Europe and Asia

NEW YORK, LONDON and TOKYO, Dec. 1, 2016 /PRNewswire/ -- GTX's ECN achieved a record average daily volume (ADV) of $10.3 billion during the month of November 2016. This record exceeds the previous $9.6 billion high set in June 2016.

Including volume handled by the firm's registered swap dealer, which provides anonymous, agency execution services, GTX's overall November ADV was $14.3 billion, the second highest in its history.

"We are gratified to see record ECN trading volume exceeding the milestone $10 billion level," said Vincent Sangiovanni, CEO, GTX Bermuda Ltd. "The record speaks to the growing utility of the GTX ECN to our clients and marks the venue's strong, long-term volume growth."

The record trading volume coincides with the global expansion of the GTX ECN. In October, GTX launched an ECN matching engine in London and is on track to launch a matching engine in Tokyo at the end of January 2017.

GTX is the institutional foreign exchange trading arm of GAIN Capital Holdings Inc.

About GTX

GTX operates electronic trading venues and provides agency execution and clearing services for buy and sell-side institutional FX market participants.

GTX provides an array of electronic and voice trading solutions through its various entities including an ECN, prime services, a Swap Execution Facility for NDF trading, and a Registered Swap Dealer, which facilitates trade executions on an agency basis. Clients include banks, hedge funds, CTAs, fund managers, proprietary traders, brokers, and algorithmic trading firms.

For more company information, visit: http://www.gaingtx.com.

About GAIN Capital

GAIN Capital (NYSE: GCAP) provides market access and trade execution services to a diverse client base of retail and institutional investors across a range of exchange-traded and OTC markets. Founded in 1999, the company today supports customers in over 180 countries via several globally recognized brands, including FOREX.com, City Index and GTX.

GAIN Capital is headquartered in Bedminster, New Jersey, with a global presence across North America, Europe and the Asia Pacific regions.

For more company information, visit: www.gaincapital.com.

To view the original version on PR Newswire, visit: http://www.prnewswire.com/news-releases/gtx-fx-ecn-sets-volume-record-300371565.html.

GAIN Capital Investor Relations
+1 908.731.0737
ir@gaincapital.com

Media Contact
US: Chris Mittendorf, Edelman +1.212.704.8134
UK: Alex Nekrassov, New Century Media + 44 (0) 20 7930 8033
pr@gaincapital.com

GTX Hires Edward Brown to Run Swap Execution Facility

Company to Increase Focus on Solutions as Regulation Reshapes the FX Market

NEW YORK, Nov. 21, 2016 /PRNewswire/ -- GTX, the institutional foreign exchange trading arm of GAIN Capital Holdings Inc., today announces the appointment of Edward Brown as Chief Executive Officer (CEO) of GTX SEF, LLC, a Swap Execution Facility (SEF).

Mr. Brown joins with over 25 years' experience in the financial services industry. Previously, he headed strategic initiatives at EBS BrokerTec, having also served in a variety of senior roles in ICAP's electronic trading division. While there, Mr. Brown focused on regulatory matters related to OTC derivatives with a particular emphasis on the Dodd Frank Act and served as a Board Member of the Wholesale Market Brokers' Association Americas. Prior to ICAP, Mr. Brown headed new business development at BrokerTec, which was acquired by ICAP in 2003. A graduate of the United States Naval Academy, Mr. Brown served five years in the United States Navy as a Surface Warfare Officer.

"We are thrilled to have Ed join our team, especially at this key time when regulation is reshaping the FX markets," said Vincent Sangiovanni, Director, GTX SEF, LLC. "We look forward to supporting clients with the SEF and other solutions to enable them to compete effectively in the new trading paradigm."

GTX launched its SEF in 2013 at the request of clients seeking to trade non-deliverable forwards (NDFs) on a CFTC compliant platform. It was granted full SEF registration in May 2016 after operating under temporary registration status for over two years.

"I am excited to be joining the GTX team and work with both clients and staff to deliver highly innovative and intuitive solutions for the evolving FX trading, clearing and regulatory landscapes," said Mr. Brown. "GTX's unique ecosystem of electronic trading venues and voice agency execution services provides tremendous value to institutional FX traders and I look forward to driving the business forward."

In addition to SEF and ECN electronic venues, GTX provides anonymous, "voice" agency execution services through GAIN GTX LLC, a US CFTC provisionally registered swap dealer.

About GTX

GTX operates electronic trading venues and provides agency execution and clearing services for buy and sell-side institutional FX market participants.

GTX provides an array of electronic and voice trading solutions through its various entities including an ECN, prime services, a Swap Execution Facility for NDF trading, and a Registered Swap Dealer, which facilitates trade executions on an agency basis. Clients include banks, hedge funds, CTAs, fund managers, proprietary traders, brokers, and algorithmic trading firms.

For more company information, visit: http://www.gaingtx.com.

About GAIN Capital

GAIN Capital (NYSE: GCAP) provides market access and trade execution services to a diverse client base of retail and institutional investors across a range of exchange-traded and OTC markets. Founded in 1999, the company today supports customers in over 180 countries via several globally recognized brands, including FOREX.com, City Index and GTX.

GAIN Capital is headquartered in Bedminster, New Jersey, with a global presence across North America, Europe and the Asia Pacific regions.

For more company information, visit: www.gaincapital.com.

To view the original version on PR Newswire, visit: http://www.prnewswire.com/news-releases/gtx-fx-ecn-sets-volume-record-300371565.html.

GAIN Capital Investor Relations
+1 908.731.0737
ir@gaincapital.com

Media Contact
US: Chris Mittendorf, Edelman +1.212.704.8134
UK: Alex Nekrassov, New Century Media + 44 (0) 20 7930 8033
pr@gaincapital.com

GTX to Launch Tokyo Matching Engine January 31

New Data Center to Improve Regional Access for Growing Asian Clientele

SINGAPORE and TOKYO, Nov. 16, 2016 /PRNewswire/ -- GTX, the institutional foreign exchange trading arm of GAIN Capital Holdings, Inc., will launch a new matching engine for its flagship ECN in Tokyo January 31, 2017. At launch, the Tokyo matching engine completes the firm's global network rollout, which included the launch of a new matching engine in London on October 17th.

The new matching engine, along with those local to New York and London, can all be accessed by clients connected to any of the locations. Clients may choose whether to interact only with local liquidity for faster response time, or to obtain best price and depth against the global order book.

The Tokyo matching engine will be supported by a dozen leading liquidity providers when it launches.

"The launch of our Tokyo matching engine underscores our commitment to provide the best possible market access to our growing Asian clientele," said Vincent Sangiovanni, CEO, GTX Bermuda Ltd. "We look forward to providing lower latency market access to our current clients and serving new ones, who prefer trading on a local matching engine."

Liquidity on GTX's ECN is optimized for buy-side clients enabling them to trade on the best available prices with ongoing, active monitoring of trade matches and execution quality. This process ensures orders from regional matching engines can be effectively consolidated into the ECN's global central limit order book.

GTX's current matching engines are in Equinix's NY4 and LD4 data center respectively. The new matching engine is in the company's TY3 data center.

About GTX

GTX operates electronic trading venues and provides agency execution and clearing services for buy and sell-side institutional FX market participants.

GTX provides an array of electronic and voice trading solutions through its various entities including an ECN, prime services, a Swap Execution Facility for NDF trading, and a Registered Swap Dealer, which facilitates trade executions on an agency basis. Clients include banks, hedge funds, CTAs, fund managers, proprietary traders, brokers, and algorithmic trading firms.

For more company information, visit: http://www.gaingtx.com.

About GAIN Capital

GAIN Capital (NYSE: GCAP) provides market access and trade execution services to a diverse client base of retail and institutional investors across a range of exchange-traded and OTC markets. Founded in 1999, the company today supports customers in over 180 countries via several globally recognized brands, including FOREX.com, City Index and GTX.

GAIN Capital is headquartered in Bedminster, New Jersey, with a global presence across North America, Europe and the Asia Pacific regions.

For more company information, visit: www.gaincapital.com.

To view the original version on PR Newswire, visit: http://www.prnewswire.com/news-releases/gtx-to-launch-tokyo-matching-engine-january-31-300364717.html.

GAIN Capital Investor Relations
+1 908.731.0737
ir@gaincapital.com

Media Contact
US: Chris Mittendorf, Edelman +1.212.704.8134
UK: Alex Nekrassov, New Century Media + 44 (0) 20 7930 8033
pr@gaincapital.com

GAIN Capital launches ForeignExchange.com

-- ForeignExchange.com is a new international money transfer service --

LONDON, Nov. 16, 2016 /PRNewswire/ -- GAIN Capital Holdings, Inc. (NYSE: GCAP) today announced the Beta launch of ForeignExchange.com, its new international money transfer service, in the UK market. ForeignExchange.com meets the growing need for cheaper, easier and trusted online services for international money transfers.

At ForeignExchange.com, customers can quickly and easily transfer money in 26 currency pairs to over 200 countries. ForeignExchange.com features highly competitive exchange rates and no transfer fees, for savings of up to 80 percent when compared to prices typically offered by banks. Transfers between European countries are usually received within one business day, and two business days for all other countries. Expedited transfers are also available, with all transfers above £5000 automatically expedited for no additional fee.

Emmanuelle Johaadien, COO at ForeignExchange.com, commented: "Our new international payment service allows customers to make significant savings on international money transfers. By leveraging GAIN Capital's deep experience in the global foreign exchange market and our cutting edge technology, ForeignExchange.com is able to offer highly competitive pricing along with a quick and easy to use service that will deliver real value to customers."

Individuals participating in the Beta test will receive a complimentary £10 e-voucher within seven days after their first transaction. Users can open an account by going to www.foreignexchange.com.

Individuals can open accounts and trade currencies now while corporate accounts are expected to be open for business in January 2017.

For a free quote, visit www.foreignexchange.com.

For a full list of supported currencies, visit http://www.foreignexchange.com/supported-currencies.html.

About ForeignExchange.com

ForeignExchange.com meets the growing need for cheaper, easier and trusted online services for international money transfers. The service is designed for anyone to use and supports transfers in 26 currency pairs with delivery to over 200 countries.

ForeignExchange.com is operated by GAIN Capital Holdings, Inc. (NYSE: GCAP), a pioneer in online currency trading.

ForeignExchange.com is a trademark of GAIN Capital Payments Ltd. GAIN Capital Payments Ltd is a company registered in England No. 09688167. Registered Office: Park House, 16 Finsbury Circus, London, EC2M 7EB. Authorised & Regulated by the Financial Conduct Authority to carry out Payment Services under the Payment Services Regulations 2009; Firm No. 720701. Registered with HM Revenue & Excise as a Money Transmitter, MLR No 12849712.

About GAIN Capital

GAIN Capital (NYSE: GCAP) provides market access and trade execution services to a diverse client base of retail and institutional investors across a range of exchange-traded and OTC markets. Founded in 1999, the company today supports customers in over 180 countries via several globally recognized brands, including FOREX.com, City Index and GTX. GAIN Capital is headquartered in Bedminster, New Jersey, with a global presence across North America, Europe and the Asia Pacific regions. For further company information, visit: www.gaincapital.com.

Logo - http://photos.prnewswire.com/prnh/20130726/NY53647LOGO-a.

To view the original version on PR Newswire, visit: http://www.prnewswire.com/news-releases/gain-capital-launches-foreignexchangecom-300363769.html.

GAIN Capital Investor Relations
+1 908.731.0737
ir@gaincapital.com

Media Contact
US: Chris Mittendorf, Edelman +1.212.704.8134
UK: Alex Nekrassov, New Century Media + 44 (0) 20 7930 8033
pr@gaincapital.com

FOREX.com Launches New Active Trader Offering in U.S. and Canada

BEDMINSTER, N.J., Nov. 14, 2016 /PRNewswire/ -- FOREX.com today announced a new Active Trader account, which provides high volume FX traders with preferred pricing, additional volume tiered incentives and other value-added services.

"We recognize the unique needs of high volume FX traders and challenged ourselves to develop a service that offered a rewarding trading experience," said Samantha Roady, President of Retail at GAIN Capital. "The Active Trader account delivers that through value pricing, unique trader services and high touch, personalized support."

Customers who open an Active Trader account receive automatic discounts on FOREX.com's standard spreads with an opportunity to receive additional spread discounts of up to 50% based on monthly volume. Active Trader accounts also receive dedicated support and account management, priority handling of all service request and no account fees. The Active Trader account is available to clients in the U.S. and Canada with a minimum balance of $20,000 and will be rolled out to FOREX.com customers globally over the coming months.

More details about FOREX.com's Active Trader account are available at: https://www.forex.com/en-us/active-trader.

About FOREX.com

Since 2003, FOREX.com has been servicing the needs of self-directed traders looking to take advantage of opportunities in global financial markets. We are deeply committed to building trust through transparency and empowering traders with straightforward pricing, exceptional trade execution, innovative trading tools and experiences to help them succeed.

FOREX.com is operated by GAIN Capital (NYSE: GCAP), a global leader in online trading services. GAIN Capital provides best in class electronic access to OTC and exchange-traded markets, serving retail and institutional traders in over 180 countries via several globally recognized brands, including FOREX.com, City Index and GTX. GAIN Capital is headquartered in Bedminster, New Jersey, with a global presence across North America, Europe and the Asia Pacific regions. For further company information, visit: www.gaincapital.com.

Logo - http://photos.prnewswire.com/prnh/20130726/NY53647LOGO-a.

To view the original version on PR Newswire, visit: http://www.prnewswire.com/news-releases/forexcom-launches-new-active-trader-offering-in-us-and-canada-300361500.html.

GAIN Capital Investor Relations
+1 908.731.0737
ir@gaincapital.com

Media Contact
US: Chris Mittendorf, Edelman +1.212.704.8134
UK: Alex Nekrassov, New Century Media + 44 (0) 20 7930 8033
pr@gaincapital.com

GAIN Capital Reports Third Quarter and Nine Months 2016 Results

Third Quarter


Nine Months

Net revenue of $72.2 million


Net revenue of $296.1 million

Net loss of 4.7 million


Net income of $14.5 million

Adjusted EBITDA1 of $3.3 million


Adjusted EBITDA1 of $62.7 million

Loss per diluted share of $0.11


Earnings per diluted share of $0.25

Adjusted loss per diluted share1 of $0.12


Adjusted earnings per diluted share1 of $0.49

GAIN Capital Holdings, Inc. ("GAIN") (NYSE: GCAP), a leading global provider of online trading services, announced financial results for the third quarter and nine months of 2016.

Net loss for the quarter was $4.7 million, down from a $1.0 million profit in the third quarter of 2015, and adjusted EBITDA was $3.3 million, down from $30.1 million in the third quarter of 2015. GAIN's financial highlights for the three and nine months ended September 30 are included in the chart below.


Three Months Ended
September 30,


Nine Months Ended
September 30,


2016


2015(2)


2016


2015(2)

Net Revenue

$

72.2



$

128.1



$

296.1



$

332.6


Operating Expenses

(68.9)



(98.0)



(233.4)



(269.2)


Galvan Earnout Adjustment







(4.3)


Adjusted EBITDA(1)

$

3.3



$

30.1



$

62.7



$

59.1










Net Income/(Loss)

$

(4.7)



$

1.0



$

14.5



$

(0.7)


Adjusted Net Income/(Loss)(1)

$

(5.8)



$

15.3



$

24.1



$

25.3










Diluted GAAP EPS

$

(0.11)



$

0.05



$

0.25



$

(0.01)


Adjusted EPS(1)

$

(0.12)



$

0.31



$

0.49



$

0.54







Note:  Dollars in millions, except where noted otherwise.  Columns may not add due to rounding.

1See below for reconciliation of non-GAAP financial measures.

2As restated.  See the Company's Form 10-Q/A filed on May 3, 2016 for additional information.

"The challenging market conditions of the third quarter resulted in lower than expected average daily volumes and revenue capture," commented Glenn Stevens, CEO of GAIN Capital. "However, the volatility outlook is improving as a result of several market drivers including Brexit, global interest rate uncertainty and the U.S. elections," continued Mr. Stevens. "In addition, we are executing on several key initiatives that we believe will enhance our customer experience which will lead to increased customer engagement and drive long-term value for both clients and shareholders," concluded Mr. Stevens.

Retail Segment

In the third quarter of 2016, GAIN's retail segment generated net revenue of $52.7 million and segment profit of $6.5 million, reflecting a margin of 12%.

For the trailing twelve months ended September 30, 2016, the retail segment generated net revenue of $321.7 million and segment profit of $99.4 million, reflecting a margin of 31%.

Institutional Segment

In the third quarter of 2016, GAIN's institutional segment generated net revenue of $6.9 million and segment profit of $1.0 million, reflecting a margin of 16%.

For the trailing twelve months ended September 30, 2016, the institutional segment generated net revenue of $28.9 million and segment profit of $6.0 million, reflecting a margin of 21%.

Futures Segment

In the third quarter of 2016, GAIN's futures segment generated net revenue of $12.5 million and segment profit of $1.4 million, reflecting a margin of 11%.

For the trailing twelve months ended September 30, 2016, the futures segment generated net revenue of $48.5 million and segment profit of $4.8 million, reflecting a margin of 10%.

Dividend

GAIN's Board of Directors declared a quarterly cash dividend of $0.06 per share of the company's common stock, an increase of 20%. The dividend is payable on December 22, 2016 to shareholders of record as of the close of business December 12, 2016.

Share Repurchase

The company also announced that its Board of Directors has approved a share repurchase plan which authorizes the expenditure of up to $30 million for the purchase of the company's common stock. The amount and timing of specific repurchases, if any, will depend on market conditions, the trading price of GAIN Capital's common stock and other factors.

October Operating Metrics

Retail Segment Metrics

OTC average daily volume1 of $9.1 billion, a decrease of 3.8% from September 2016 and 31.7% from October 2015.

OTC trading volume1 of $190.9 billion, a decrease of 8.2% from September 2016 and 34.8% from October 2015.

Active OTC accounts2 of 131,277, a decrease of 1.3% from September 2016 and 11.5% from October 2015.

Institutional Segment Metrics

ECN average daily volume1 of $8.7 billion, an increase of 2.7% from September 2016 and 44.2% from October 2015.

ECN volume1 of $182.6 billion, a decrease of 2.0% from September 2016 and an increase of 37.6% from October 2015.

Swap Dealer average daily volume1 of $2.8 billion, a decrease of 9.5% from September 2016 and an increase of 32.5% from October 2015.

Swap Dealer volume1 of $58.4 billion, a decrease of 13.7% from September 2016 and an increase of 26.5% from October 2015.

Futures Segment Metrics

Futures average daily contracts of 28,272 a decrease of 11.3% from September 2016 and 13.4% from October 2015.

Futures contracts of 593,706, a decrease of 11.3% from September 2016 and 13.4% from October 2015.

Active futures accounts2 of 8,514, a decrease of 0.9% from September 2016 and 3.4% from October 2015.





1US dollar equivalent of notional amounts traded.

2Accounts that executed a transaction during the last 12 months.

Conference Call

GAIN will host a conference call November 3, 2016 at 4.30 p.m. ET.  Participants may access the live call by dialing +1.888.349.0112 (US Domestic), or +1.412.317.6001 (International). Please let the operator know you would like to join the GAIN Capital call.

A live audio webcast of the call, as well as a PDF copy of the earnings presentation, will be available on the Investor Relations section of the GAIN Capital website (http://ir.gaincapital.com).

An audio replay will be made available for one month starting approximately one hour after the call by dialing +1.877.344.7529 from the U.S. or +1.412.317.0088 from abroad, and entering the passcode 10095480#.

For more corporate information or to sign up for alerts, please visit: http://ir.gaincapital.com.

About GAIN

GAIN Capital Holdings, Inc. provides innovative trading technology and execution services to retail and institutional investors worldwide, with multiple access points to OTC markets and global exchanges across a wide range of asset classes, including foreign exchange, commodities, and global equities.  GAIN Capital is headquartered in Bedminster, New Jersey, with a global presence across North America, Europe and the Asia Pacific regions.  For further company information, visit www.gaincapital.com.

 

Condensed Consolidated Statements of Operations

In millions except share data

(unaudited)






Three Months Ended


Nine Months Ended


September 30,


September 30,


2016


2015(1)


2016


2015(1)

REVENUE:








Retail revenue

51.5



106.5



$

234.6



265.9


Institutional revenue

6.6



8.3



20.6



26.5


Futures revenue

12.4



12.5



37.2



34.8


Other revenue

1.5



0.8



3.0



5.2


Total non-interest revenue

72.0



128.0



295.3



332.5


Interest revenue

0.4



0.3



1.1



0.9


Interest expense

0.1



0.2



0.4



0.8


Total net interest revenue

0.3



0.1



0.8



0.1


Net revenue

72.2



128.1



$

296.1



332.6


EXPENSES:








Employee compensation and benefits

23.8



28.9



76.8



81.7


Selling and marketing

5.3



7.4



18.5



20.4


Referral fees

15.2



28.6



53.4



84.7


Trading expenses

6.9



9.0



23.1



24.1


General and administrative

12.8



16.8



43.9



40.3


Depreciation and amortization

3.5



2.9



10.2



7.6


Purchased intangible amortization

3.6



4.3



11.4



10.7


Communications and technology

4.8



5.6



15.7



14.2


Bad debt provision

0.2



1.8



2.0



6.4


Acquisition expenses



0.2





2.7


Restructuring expenses

0.3





1.1



1.9


Integration expenses

0.6



10.7



2.5



23.1


Legal settlement

(0.2)





9.2




Total expenses

76.8



116.1



267.8



317.7


Operating profit/(loss)

(4.5)



12.0



28.3



14.9


Interest on long term borrowings

2.6



2.6



7.8



6.6


Income before income tax expense/(benefit)

(7.2)



9.4



20.5



8.2


Income tax (benefit)/expense

(3.2)



7.9



4.2



7.6


Equity in net loss of affiliate





(0.1)




Net income/(loss)

(4.0)



1.6



$

16.3



0.7


Net income attributable to non-controlling interests

0.7



0.6



1.8



1.3


NET INCOME/(LOSS) APPLICABLE TO GAIN CAPITAL HOLDINGS, INC.

(4.7)



1.0



$

14.5



(0.7)


Earnings per common share:








Basic

(0.11)



0.05



$

0.25



(0.01)


Diluted

(0.11)



0.05



$

0.25



(0.01)


Weighted averages common shares outstanding used in computing earnings per share:








Basic

48,651,212



49,149,102



48,606,923



47,163,814


Diluted

48,651,212



49,918,707



48,883,258



47,163,814


 





Note:  Dollars in millions, except where noted otherwise.  Columns may not add due to rounding.

1 As restated. See the Company's Form 10-Q/A filed on May 3, 2016 for additional information.

 

Condensed Consolidated Balance Sheet

In millions

(unaudited)






September 30,


December 31,


2016


2015(1)

ASSETS:




Cash and cash equivalents

$

235.7



$

171.9


Cash and securities held for customers

1,054.6



920.6


Receivables from brokers

52.3



121.2


Prepaid assets

10.3



7.8


Property and equipment - net of accumulated depreciation

34.8



30.4


Intangible assets, net of accumulated amortization

73.2



91.5


Goodwill

32.6



34.0


Other assets

48.8



47.2


          Total assets

$

1,542.4



$

1,424.6


LIABILITIES AND SHAREHOLDERS' EQUITY:




Payables to customers

1,054.6



920.6


Accrued compensation & benefits

10.8



12.4


Accrued expenses and other liabilities

44.5



51.6


Income tax payable

2.3



1.1


Convertible senior notes

123.5



121.7


          Total liabilities

$

1,235.7



$

1,107.4


Redeemable non-controlling interests

14.2



11.0


Shareholders' equity

$

292.5



$

306.1


          Total liabilities and shareholders' equity

$

1,542.4



$

1,424.6


 






Note:  Dollars in millions, except where noted otherwise.  Columns may not add due to rounding.

1 As restated. See the Company's Form 10-Q/A filed on May 3, 2016 for additional information.

(*) Reconciliation of GAAP Net Income/(Loss) to Adjusted Net Income/(Loss) and Adjusted EPS

Adjusted net income is a non-GAAP financial measure and represents our net income excluding restructuring, acquisition and integration related expenses, adjustment to fair value of contingent consideration and other non-recurring items.  This non-GAAP financial measure has certain limitations, including that it does not have a standardized meaning and, therefore, our definition may be different from similar non-GAAP financial measures used by other companies and/or analysts. Thus, it may be more difficult to compare our financial performance to that of other companies. We believe our reporting of adjusted net income assists investors in evaluating our operating performance. However, because adjusted net income is not a measure of financial performance calculated in accordance with GAAP, such measure should be considered in addition to, but not as a substitute for, other measures of our financial performance reported in accordance with GAAP, such as net income.

 

Net Income/(Loss) to Adjusted Net Income/(Loss) and Adjusted EPS

In millions, except per share data

(unaudited)






Three Months Ended


Nine Months Ended


September 30,


September 30,


2016


2015(1)


2016


2015(1)

Net income/(loss) applicable to Gain Capital Holdings Inc.

$

(4.7)



$

1.0



$

14.5



$

(0.7)


Income tax

(3.2)



7.9



4.2



7.6


Equity in net loss of affiliate





0.1




Non-controlling interest

0.7



0.6



1.8



1.3


Pre-tax income/(loss)

$

(7.2)



$

9.4



$

20.5



$

8.2


Adjustments

0.7



10.9



12.8



25.9


Adjusted Pre-tax income/(loss)

$

(6.5)



$

20.4



$

33.3



$

34.1


Adjusted income tax

1.4



(4.5)



(7.3)



(7.5)


Equity in net loss of affiliate





(0.1)




Non-controlling interest

(0.7)



(0.6)



(1.8)



(1.3)


Adjusted net income/(loss)

$

(5.8)



$

15.3



$

24.1



$

25.3










Adjusted earnings/(loss) per common share








Basic

$

(0.12)



$

0.31



$

0.50



$

0.54


Diluted

$

(0.12)



$

0.31



$

0.49



$

0.54


Weighted average common shares outstanding used in computing earnings per common share








Basic

48,651,212



49,149,102



48,606,923



47,163,814


Diluted

48,651,212



49,918,707



48,883,258



47,163,814


 





Note:  Dollars in millions, except where noted otherwise.  Columns may not add due to rounding.

1 As restated. See the Company's Form 10-Q/A filed on May 3, 2016 for additional information.

Reconciliation of GAAP Net Income/(Loss) to Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA is a non-GAAP financial measure that represents our earnings before interest, taxes, depreciation and amortization, purchased intangible amortization, restructuring, acquisition and integration-related expenses, legal settlement, non-controlling interest, adjustment to fair value of contingent consideration and bad debt expense related to the SNB event in January of 2015. This non-GAAP financial measure has certain limitations, including that it does not have a standardized meaning and, therefore, our definition may be different from similar non-GAAP financial measures used by other companies and/or analysts. Thus, it may be more difficult to compare our financial performance to that of other companies. We believe our reporting of adjusted EBITDA assists investors in evaluating our operating performance. However, because adjusted EBITDA is not a measure of financial performance calculated in accordance with GAAP, such measure should be considered in addition to, but not as a substitute for, other measures of our financial performance reported in accordance with GAAP, such as net income.

 

Reconciliation of GAAP Net Income/(Loss) to Adjusted EBITDA and Adjusted EBITDA Margin

In millions

(unaudited)






Three Months Ended


Nine Months Ended


September 30,


September 30,


2016


2015(1)


2016


2015(1)

Net revenue

$

72.2



$

128.1



$

296.1



$

332.6


Net income/(loss) applicable to Gain Capital Holdings Inc.

(4.7)



1.0



14.5



(0.7)


Net income margin %

(7)

%


1

%


5

%


0

%









Net income/(loss)

(4.7)



1.0



14.5



(0.7)


Depreciation and amortization

3.5



2.9



10.2



7.6


Purchased intangible amortization

3.6



4.3



11.4



10.7


Interest expense

2.6



2.6



7.8



6.6


Income tax expense

(3.2)



7.9



4.2



7.6


Acquisition expenses



0.2





2.7


Restructuring expenses

0.3





1.1



1.9


Integration costs

0.6



10.7



2.5



23.1


Legal settlement

(0.2)





9.2




Bad debt related to SNB event in January of 2015







2.5


Acquisition contingent consideration adjustment







(4.3)


Equity in net loss of affiliate





0.1




Net income attributable to non-controlling interest

0.7



0.6



1.8



1.3


Adjusted EBITDA

$

3.3



$

30.1



$

62.7



$

59.1


Adjusted  EBITDA Margin(2)

5

%


24

%


21

%


18

%

 





Note:  Dollars in millions, except where noted otherwise.  Columns may not add due to rounding.

1 As restated. See the Company's Form 10-Q/A filed on May 3, 2016 for additional information.

2 Adjusted EBITDA margin is calculated as adjusted EBITDA divided by net revenue.

 

Segment Information:

ASC 280, Disclosures about Segments of an Enterprise and Related Information, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker, or decision making group, in deciding how to allocate resources and in assessing performance. Reportable segments are defined as an operating segment that either (a) exceeds 10% of revenue, or (b) reported profit or loss in absolute amount exceeds 10% of profit of all operating segments that did not report a loss or (c) exceeds 10% of the combined assets of all operating segments. The Company's operations relate to global trading services and solutions. Based on the Company's management strategies, and common production, marketing, development and client coverage teams, the Company has concluded that it operates in three operating segments: Retail Segment, Institutional Segment and Futures Segment.

Retail


Three Months Ended
September 30,


Nine Months Ended
September 30,


2016


2015(1)


2016


2015(1)

Trading Revenue

$

51.5



$

106.6



$

234.3



$

265.8


Other Retail Revenue

1.2



1.1



4.5



2.8


Total Revenue

52.7



107.7



238.8



268.6










Employee Comp & Ben

14.4



18.4



48.0



51.0


Marketing

5.0



7.2



17.8



19.6


Referral Fees

11.2



24.0



41.5



72.6


Other Operating Expense

15.6



24.4



57.2



56.3


Segment Profit

$

6.5



$

33.7



$

74.3



$

69.2


Segment Profit Margin %

12

%


31

%


31

%


26

%

Institutional


Three Months Ended
September 30,


Nine Months Ended
September 30,


2016


2015(1)


2016


2015(1)

ECN

$

4.7



$

5.6



$

14.8



$

17.8


Swap Dealer

2.2



3.2



6.7



9.9


Total Revenue

6.9



8.7



21.5



27.7










Employee Comp & Ben

3.5



3.9



10.1



12.2


Other Operating Expense

2.4



2.4



7.4



7.5


Segment Profit

$

1.0



$

2.4



$

4.0



$

8.0


Segment Profit Margin %

16

%


27

%


18

%


29

%

 





Note:  Dollars in millions, except where noted otherwise.  Columns may not add due to rounding.

1 As restated. See the Company's Form 10-Q/A filed on May 3, 2016 for additional information.

Futures


Three Months Ended
September 30,


Nine Months Ended
September 30,


2016


2015(1)


2016


2015(1)

Revenue

$

12.5



$

12.5



$

37.6



$

34.9










Employee Comp & Ben

3.3



3.0



9.4



8.2


Marketing

0.2



0.2



0.7



0.7


Referral Fees

4.0



4.6



11.9



12.1


Other Operating Expense

3.7



3.6



11.5



10.6


Segment Profit

$

1.4



$

1.0



$

4.1



$

3.3


Segment Profit Margin %

11

%


8

%


11

%


9

%

Corporate and Other


Three Months Ended
September 30,


Nine Months Ended
September 30,


2016


2015(1)


2016


2015(1)

Revenue

$

0.1



$

(0.5)



$

(1.8)



$

(3.0)










Employee Comp & Ben

2.6



3.5



9.3



10.2


Other Operating Expense

3.0



3.0



8.6



8.1


Loss

$

(5.6)



$

(7.0)



$

(19.7)



$

(21.4)


 





Note:  Dollars in millions, except where noted otherwise.  Columns may not add due to rounding.

1 As restated. See the Company's Form 10-Q/A filed on May 3, 2016 for additional information.

Reconciliation of Segment Profit to Income/(Loss) Before Income Tax Expense

 


Three Months Ended
September 30,


Nine Months Ended
September 30,


2016


2015(1)


2016


2015(1)

Retail segment

$

6.5



$

33.7



$

74.3



$

69.2


Institutional segment

1.0



2.4



4.0



8.0


Futures segment

1.4



1.0



4.1



3.3


Corporate and other

(5.6)



(7.0)



(19.7)



(21.4)


Segment Profit

3.3



30.1



62.7



59.1


Depreciation and amortization

3.5



2.9



10.2



7.6


Purchased intangible amortization

3.6



4.3



11.4



10.7


Acquisition expenses



0.2





2.7


Restructuring expenses

0.3





1.1



1.9


Integration expenses

0.6



10.7



2.5



23.1


Legal settlement

(0.2)





9.2




Bad debt related to SNB event







2.5


Acquisition contingent consideration adj.







(4.3)


Operating profit/(loss)

$

(4.5)



$

12.0



$

28.3



$

14.9


Interest expense on long term borrowings

2.6



2.6



7.8



6.6


Income/(Loss) before income tax expense

$

(7.2)



$

9.4



$

20.5



$

8.2


 





Note:  Dollars in millions, except where noted otherwise.  Columns may not add due to rounding.

1 As restated. See the Company's Form 10-Q/A filed on May 3, 2016 for additional information.

Forward-Looking Statements:

In addition to historical information, this earnings release contains "forward-looking" statements that reflect management's expectations for the future. A variety of important factors could cause results to differ materially from such statements. These factors are noted throughout GAIN Capital's annual report on Form 10-K/A for the year ended December 31, 2015, as filed with the Securities and Exchange Commission on May 2, 2016, and include, but are not limited to, the actions of both current and potential new competitors, fluctuations in market trading volumes, financial market volatility (including volatility levels resulting from market drivers such as Brexit, global interest rate uncertainty and the U.S. elections that differ from our expectations), evolving industry regulations, errors or malfunctions in GAIN Capital's systems or technology, rapid changes in technology, effects of inflation, customer trading patterns, the success of our products and service offerings, our ability to continue to innovate and meet the demands of our customers for new or enhanced products, our ability to successfully integrate assets and companies we have acquired, our ability to effectively compete, changes in tax policy or accounting rules, fluctuations in foreign exchange rates and commodity prices, adverse changes or volatility in interest rates, as well as general economic, business, credit and financial market conditions, internationally or nationally, and our ability to continue paying a quarterly dividend in light of future financial performance and financing needs. The forward-looking statements included herein represent GAIN Capital's views as of the date of this release. GAIN Capital undertakes no obligation to revise or update publicly any forward-looking statement for any reason unless required by law.

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GTX to Launch London and Tokyo Matching Engines

New Data Centers to Improve Regional Access, Create Single, Global Order Book

NEW YORK and LONDON and TOKYO, Sept. 28, 2016 /PRNewswire/ -- GTX, the institutional foreign exchange trading arm of GAIN Capital Holdings Inc., will launch a new matching engine for its flagship ECN in London October 15, 2016. A Tokyo-based matching engine is planned to come online within 90 days.

At launch, liquidity on the LD4 matching engine will be supplied by more than 10 leading bank and non-bank liquidity providers.

The new matching engines, along with GTX's existing matching engine in New Jersey, can all be accessed by clients connected to any of the locations. Clients may choose whether to interact only with local liquidity for faster response time, or to obtain best price and depth against the global order book. Further, GTX's global order book structure will help satisfy best execution mandates for asset managers and other market participants subject to them.

"We are thrilled to launch new data centers in London and Tokyo," said Vincent Sangiovanni, CEO, GTX Bermuda Ltd. "These launches will enable us to better serve our growing, global clientele, but also do so through a single global order book, which is ideal for the vast majority of our asset manager and bank buy-side clients as well as our bank and non-bank liquidity providers."

GTX's ECN is optimized for buy-side clients to trade on the best available prices with ongoing, active monitoring of trade matches and execution quality. This paradigm enables pricing from regional matching engines to be consolidated into a central order book.

GTX's current matching engine is housed in Equinix's NY4 data center. The new matching engines are housed in the company's LD4 and TY3 data centers respectively.

About GTX

GTX operates electronic trading venues and provides agency execution and clearing services for buy and sell-side institutional FX market participants.

GTX provides an array of electronic and voice trading solutions through its various entities including an ECN, prime services, a Swap Execution Facility for NDF trading, and a Registered Swap Dealer, which facilitates trade executions on an agency basis. Clients include banks, hedge funds, CTAs, fund managers, proprietary traders, brokers, and algorithmic trading firms.

For more company information, visit: www.gaingtx.com.

About GAIN Capital

GAIN Capital (NYSE: GCAP) provides market access and trade execution services to a diverse client base of retail and institutional investors across a range of exchange-traded and OTC markets. Founded in 1999, the company today supports customers in over 180 countries via several globally recognized brands, including FOREX.com, City Index and GTX.

GAIN Capital is headquartered in Bedminster, New Jersey, with a global presence across North America, Europe and the Asia Pacific regions.

For more company information, visit: www.gaincapital.com.

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GAIN Capital launches new website and refresh of global FX trading brand, FOREX.com

BEDMINSTER, N.J., July 19, 2016 /PRNewswire/ -- GAIN Capital Holdings, Inc. (NYSE: GCAP) ("GAIN" or "the company"), a global provider of online trading services, today launched a refresh of its global retail FX brand, FOREX.com, which includes a new visual identity and updated online presence. The brand refresh has officially launched for FOREX.com's IIROC regulated service in Canada www.forex.com/en-ca, and will be rolled out globally throughout the remainder of 2016.

"FOREX.com is a leading destination for traders around the world who wish to trade the global currency markets," said Glenn Stevens, CEO of GAIN Capital. "Our brand and website refresh marks the beginning of a series of exciting and innovative enhancements to our products and services and reflects our commitment to empower each and every one of our traders with tools to help make effective investment and trading decisions. FOREX.com customers have a deep passion for trading, and their aspirations fuel our continual drive to innovate and provide a better trading experience."

The new FOREX.com website offers enhanced market research & commentary along with expanded educational content for traders of all experience levels. The updated brand identity is the first of several service enhancements that will be rolled out to FOREX.com customers globally. These include a suite of new trading platforms, expanded selection of global markets and unique decision support tools.

Samantha Roady, President of Retail, added, "The new FOREX.com visual identity and web experience is bold and modern, reflecting our leadership position as a global FX brand supporting traders from over 180 countries. It delivers on our goal of providing a seamless and consistent customer experience across a variety of platforms and devices and, above all, represents our ongoing commitment to providing customers with everything they need to realize their trading potential and goals."

About GAIN Capital

GAIN Capital (NYSE: GCAP) provides market access and trade execution services to a diverse client base of retail and institutional investors across a range of exchange-traded and OTC markets. Founded in 1999, the company today supports customers in over 180 countries via several globally recognized brands, including FOREX.com, City Index and GTX. GAIN Capital is headquartered in Bedminster, New Jersey, with a global presence across North America, Europe and the Asia Pacific regions. For further company information, visit www.gaincapital.com.

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GAIN Capital Statement Regarding EU Referendum Results

BEDMINSTER, N.J., June 24, 2016 /PRNewswire/ -- GAIN Capital Holdings, Inc. (NYSE: GCAP) ("GAIN" or "the Company"), a global provider of online trading services, has issued the following statement: 

GAIN Capital Holdings, Inc. Logo. (PRNewsFoto/GAIN Capital Holdings, Inc.)

Gain Capital's financial position has not been adversely affected as a result of today's market volatility following the UK's decision to leave the EU.  Heightened volatility around the referendum was anticipated and we took proactive steps to protect our clients and the firm, which included increasing client margin requirements in anticipation of significant market moves.  The Company has robust risk management systems and processes in place and is well equipped to deal with increased trading activity and market turbulence as a result of this outcome.

About GAIN Capital

GAIN Capital (NYSE: GCAP) provides market access and trade execution services to a diverse client base of retail and institutional investors across a range of exchange-traded and OTC markets. Founded in 1999, the company today supports customers in over 180 countries via several globally recognized brands, including FOREX.com, City Index and GTX. GAIN Capital is headquartered in Bedminster, New Jersey, with a global presence across North America, Europe and the Asia Pacific regions. For further company information, visit: www.gaincapital.com.

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GTX launches high-speed binary market data protocols on its FX ECN

London, New York, and Singapore - April 4, 2016 - GTX, the institutional foreign exchange trading arm of GAIN Capital Holdings Inc., announced today it has launched live market data binary protocols free of charge to clients of its ECN trading platform. GTX developed the binary protocols to meet requests from algorithmic traders, including market makers, who can use the protocols to deliver more robust liquidity. Market participants can achieve a substantial reduction in processing time and memory usage when decoding incoming market data, enabling them to trade and make markets on the ECN more quickly

"We are pleased to provide live market data binary protocols to our most data intensive market participants," said Steve Reilly, Head of Liquidity at GTX. "Binary market data protocols will expand the utility of the GTX ECN to algorithmic traders, with the goal of providing more robust liquidity to all market participants."

The GTX binary market data protocols include GTTP, a proprietary binary protocol based on a new framework currently being standardized by the High Performance Working Group of FIX Protocol Limited. Benefits include microsecond-precision timestamps, and a choice of using either the User Datagram Protocol ("UDP") or the Transmission Control Protocol ("TCP").

GTX posted a record year-to-date volume record of USD 17.8 billion (single count) on January 29, 2016. The record was comprised of USD 14.6 billion ECN volume and USD 3.1 billion executed by the swap dealer on an agency basis. GTX publishes its daily trading volumes on its website, www.gaingtx.com.

The data includes spot FX volume traded on the ECN as well as spot, swaps, options and non-deliverable forwards (NDF) executed by GTX's swap dealer agency desk and Swap Execution Facility.

About GTX

GTX is the institutional foreign exchange arm of GAIN Capital (NYSE: GCAP). GTX operates an array of electronic and voice trading solutions through its various entities including an ECN; prime of prime services, temporarily-registered SEF for NDF trading and a provisionally-registered swap dealer, which facilitates trade executions on an agency basis. Clients include banks, hedge funds, CTAs, asset managers, proprietary traders, brokers, and algorithmic trading firms. GTX is only available to ECP clients as defined in the U.S or Professional Status clients as defined in the UK.

For further company information, visit www.gaingtx.com.

About GAIN Capital

GAIN Capital (NYSE: GCAP) provides market access and trade execution services to a diverse client base of retail and institutional investors across a range of exchange-traded and OTC markets. Founded in 1999, the company today supports customers in over 180 countries via several globally recognized brands, including FOREX.com, City Index and GTX. GAIN Capital is headquartered in Bedminster, New Jersey, with a global presence across North America, Europe and the Asia Pacific regions. For further company information, visit www.gaincapital.com.

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GAIN Capital Reports Fourth Quarter and Full Year 2015 Results

Fourth Quarter 2015

  • Net revenue of $102.8 million
  • Net income of $15.5 million
  • Adjusted EBITDA of $21.5 million
  • Earnings per diluted share of $0.32
  • Adjusted earnings per share1 of $0.42

Full Year 2015

  • Net revenue of $ 435.4 million
  • Net income of $10.2 million
  • Adjusted EBITDA1 of $80.5 million
  • Earnings per diluted share of $0.22
  • Adjusted earnings per share1 of $0.71

Bedminster, N.J. - March 15, 2016 - GAIN Capital Holdings, Inc. (NYSE: GCAP; "GAIN" or "the Company"), a global provider of online trading services, announced financial results for the fourth quarter and full year ended December 31, 2015

Net revenue for fiscal year 2015 was $435.4 million, up from $369.2 million in fiscal year 2014. Adjusted EBITDA for the year was $80.5 million, up from $74.7 million in 2014. GAIN's financial highlights for the three months and fiscal year ended December 31, 2015 are included in the chart below.


Three Months Ended
December 31,


Fiscal Year Ended
December 31,


2015


2014(2)


2015(2)


2014(2)

Net Revenue

$

102.8



$

115.2



$

435.4



$

369.2


Less: Acquisition contingent consideration adjustment

(2.3)





(6.7)




Adjusted Net Revenue

100.5



115.2



428.7



369.2


Operating Expenses

79.0



78.6



348.2



294.5


Adjusted EBITDA(1)

$

21.5



$

36.6



$

80.5



$

74.7


Adjusted EBITDA Margin %(1)

21

%


32

%


19

%


20

%









Net Income

$

15.5



$

22.5



$

10.2



$

24.9










GAAP EPS

$

0.32



$

0.51



$

0.22



$

0.53


Adjusted EPS(1)

$

0.42



$

0.56



$

0.71



$

0.72














1See below for reconciliation of non-GAAP financial measures.

2As restated for 2014 and the first three quarters of 2015. See the Company's Form 8-k filed on March 15, 2016 for additional information.


"This year reflects GAIN's continued success in executing its strategy, particularly relating to the scaling and diversification of our retail business, while also growing our other business segments," commented Glenn Stevens, CEO of GAIN Capital. "We successfully closed on the acquisition of City Index in Q2 and are seeing the benefits of the cost synergies reflected in our financial results. Our achievement of approximately $45 million in run-rate cost synergies by Q4 2016 will drive continued expansion in our operating margins," continued Mr. Stevens. "This marks the first earnings release that GAIN has disclosed segment reporting which provides a comprehensive picture of the results and profitability of each of GAIN's business lines and, as a result, greater transparency regarding the value of the enterprise," concluded Mr. Stevens.

Retail Segment
In the fourth quarter of 2015, GAIN's retail segment generated net revenue of $82.8 million and adjusted EBITDA of $24.8 million, reflecting a margin of 30%.

For the fiscal year ended December 31, 2015, the retail segment generated net revenue of $351.5 million and adjusted EBITDA of $94.3 million, reflecting a margin of 27%.

Average daily retail trading volume was $12.5 billion in the fourth quarter of 2015, down 1% from $12.6 billion in the fourth quarter of 2014 and $15.4 billion in fiscal year 2015, up 39% from $11.1 billion in the previous year.

Institutional Segment
In the fourth quarter of 2015, GAIN's institutional segment generated net revenue of $7.4 million and adjusted EBITDA of $2.1 million, reflecting a margin of 28%.

For the fiscal year ended December 31, 2015, the institutional segment generated net revenue of $35.1 million and adjusted EBITDA of $10.1 million, reflecting a margin of 29%.

Average daily trading volume on the ECN and for the Swap Dealer was $6.4 billion and $2.8 billion, respectively, in the fourth quarter of 2015 and $7.2 billion and $3.1 billion, respectively, in fiscal year 2015.

Futures Segment
In the fourth quarter of 2015, GAIN's futures segment generated net revenue of $10.9 million and adjusted EBITDA of $0.7 million, reflecting a margin of 6%.

For the fiscal year ended December 31, 2015, the futures segment generated net revenue of $45.8 million and adjusted EBITDA of $3.9 million, reflecting a margin of 9%.

Average daily futures contracts were 31,476 in the fourth quarter of 2015 and 34,356 in fiscal year 2015.

Capital Return and Dividend
In the fourth quarter, GAIN repurchased 388,095 shares at an average price of $7.57. For the year, GAIN repurchased 654,362 shares at an average price of $7.76.

GAIN's Board of Directors declared a quarterly cash dividend of $0.05 per share of the Company's common stock. The dividend is payable on March 29, 2016 to shareholders of record as of the close of business March 25, 2016.

February Operating Metrics
Retail Metrics

  • OTC average daily volume1 of $13.2 billion, a decrease of 17.4% from January 2016 and an increase of 7.7% from February 2015.2
  • OTC trading volume1 of $276.3 billion, a decrease of 13.3% from January 2016 and an increase of 13.1% from February 2015.3
  • Active OTC accounts4 of 143,673, a decrease of 0.1% from January 2016 and an increase of 47.9% from February 2015.5
  • Futures average daily contracts of 36,993, a decrease of 13.5% from January 2016 and 0.9% from February 2015.
  • Futures contracts of 739,859, a decrease of 8.9% from January 2016 and an increase of 4.3% from February 2015.

Institutional Metrics

  • ECN average daily volume1 of $8.3 billion, a decrease of 12.1% from January 2016 and an increase of 25.0% from February 2015.
  • ECN volume1 of $174.0 billion, a decrease of 7.7% from January 2016 and an increase of 31.3% from February 2015.
  • Swap Dealer average daily volume1 of $3.0 billion, an increase of 4.5% from January 2016 and a decrease of 3.0% from February 2015.
  • Swap Dealer volume1 of $64.0 billion, an increase of 9.7% from January 2016 and 1.9% from February 2015.






1US dollar equivalent of notional amounts traded.

2OTC average daily volume decreased 18.3% from February 2015 on a pro forma basis (simple pro forma addition of GAIN and City Index).

3OTC trading volume decreased 14.1% from February 2015 on a pro forma basis (simple pro forma addition of GAIN and City Index).

4OTC accounts that executed a transaction during the last 12 months.

5Active OTC accounts decreased 5.4% from February 2015 on a pro forma basis (simple pro forma addition of GAIN and City Index).

Conference Call
GAIN will host a conference call March 15, 2016 at 8.00 a.m. ET. Participants may access the live call by dialing +1.888.349.0112 (US Domestic), or +1.412.317.6001 (International). Please let the operator know you would like to join the GAIN Capital call.

A live audio webcast of the call, as well as a PDF copy of the earnings presentation, will be available on the Investor Relations section of the GAIN Capital website (http://ir.gaincapital.com).

An audio replay will be made available for one month starting approximately one hour after the call by dialing +1.877.344.7529 from the U.S. or +1.412.317.0088 from abroad, and entering the passcode 10081891#.

For more corporate information or to sign up for alerts, please visit: http://ir.gaincapital.com.

About GAIN
GAIN Capital Holdings, Inc. provides innovative trading technology and execution services to retail and institutional investors worldwide, with multiple access points to OTC markets and global exchanges across a wide range of asset classes, including foreign exchange, commodities, and global equities. GAIN Capital is headquartered in Bedminster, New Jersey, with a global presence across North America, Europe and the Asia Pacific regions. For further company information, visit www.gaincapital.com.

Restatement of Certain Financial Information
We have determined that there were errors in the manner in which we accounted for income taxes as of and for the years ended December 31, 2014 and 2013 and for certain quarters of 2015. These errors related primarily to the manner in which certain intercompany payables and receivables among our domestic and overseas subsidiaries were treated for tax purposes during the impacted periods. The financial information of GAIN Capital for these periods included herein has been restated to reflect the correction of these errors. In addition, certain other adjustments, previously determined to be immaterial individually and in the aggregate, have also been corrected in the restated financial information. For more information regarding the restatement, please see our Current Report on Form 8-K, as filed with the SEC on March 15, 2016.

Condensed Consolidated Statements of Income
In millions except share data
(unaudited)



Three Months Ended


Twelve Months Ended


December 31,


December 31,


2015


2014(1)


2015(1)


2014(1)

REVENUE:








Retail revenue

$

81.6



$

97.7



$

347.5



$

292.8


Institutional revenue

7.2



9.1



33.8



34.5


Futures revenue

10.6



8.6



45.4



36.2


Other revenue(2)

3.3



(0.3)



8.5



4.9


Total non-interest revenue

102.7



115.1



435.2



368.4


Interest revenue

0.3



0.3



1.2



1.4


Interest expense

0.2



0.2



1.0



0.6


Total net interest revenue

0.1



0.1



0.2



0.8


Net revenue

$

102.8



$

115.2



$

435.4



$

369.2


OPERATING EXPENSES:








Employee compensation and benefits

$

24.9



$

28.0



$

106.6



$

99.2


Selling and marketing

6.8



4.1



27.2



20.2


Referral fees

18.8



25.2



103.5



91.0


Trading expenses

7.8



6.0



31.9



26.2


General and administrative

14.8



10.4



55.1



38.6


Depreciation and amortization

3.5



1.4



11.1



6.6


Purchased intangible amortization

5.9



3.2



16.5



8.1


Communications and technology

4.8



3.9



18.9



15.6


Bad debt provision

1.1



1.0



7.5



3.7


Acquisition expenses

0.1



2.0



2.8



3.5


Restructuring expenses

1.5



0.2



3.5



2.3


Integration expenses

10.0



0.8



33.1



2.5


Impairment on investment



0.1





0.1


Total operating expenses

100.0



86.3



417.7



317.6


Operating profit

2.8



28.9



17.7



51.6


Interest on long term borrowings

2.6



1.8



9.2



6.1


Income before income tax expense/(benefit)

0.2



27.1



8.5



45.5


Income tax (benefit)/expense

(15.6)



4.2



(3.4)



19.2


Net Income

15.8



$

22.9



$

11.9



$

26.3


Net income attributable to non-controlling interests

0.3



$

0.4



$

1.7



$

1.4


NET INCOME APPLICABLE TO GAIN CAPITAL HOLDINGS, INC.

$

15.5



$

22.5



$

10.2



$

24.9


Earnings per common share(3):








Basic

$

0.32



$

0.54



$

0.22



$

0.56


Diluted

$

0.32



$

0.51



$

0.22



$

0.53


Weighted averages common shares outstanding used in computing earnings per share:








Basic

48,902,186



41,506,205



47,601,979



40,561,644


Diluted

49,379,362



43,684,324



48,379,051



43,214,895




1 As restated for 2014 and the first three quarters of 2015. See the Company's Form 8-K filed on March 15, 2016 for additional information.

2 Net revenue includes $2.3 million in Q4 2015 and $6.7 million in FY 2015 arising from a fair value adjustment to the contingent consideration of a prior period acquisition.

3 Earnings per share includes an adjustment for the redemption value of the NCI put option.


Condensed Consolidated Balance Sheet
In millions
(unaudited)



December 31,


December 31,


2015


2014(1)

ASSETS:




Cash and cash equivalents

$

171.9



$

139.4


Cash and securities held for customers

920.6



759.6


Receivables from brokers

121.2



134.9


Prepaid assets

7.8



2.5


Property and equipment - net of accumulated depreciation

30.4



18.8


Intangible assets, net of accumulated amortization

91.5



60.8


Goodwill

34.0



33.5


Other assets

47.4



33.8


Total assets

$

1,424.8



$

1,183.3


LIABILITIES AND SHAREHOLDERS' EQUITY:




Payables to customers

920.6



759.6


Accrued compensation & benefits

12.4



16.9


Accrued expenses and other liabilities

51.6



76.2


Income tax payable

1.1



1.0


Convertible senior notes

122.0



68.3


Total liabilities

$

1,107.7



$

922.0


Redeemable non-controlling interests

11.0



11.3


Shareholders' Equity

$

306.1



$

250.0


Total liabilities and shareholders' equity

$

1,424.8



$

1,183.3




1 As restated for 2014. See the Company's Form 8-K filed on March 15, 2016 for additional information.


GAIN CAPITAL HOLDINGS, INC.
Consolidated Statements of Cash Flows
(in thousands)



For the Fiscal Years Ended December 31,


2015(1)


2014(1)

CASH FLOWS FROM OPERATING ACTIVITIES:




Net income

$

11,939



$

26,310


Adjustments to reconcile net income to cash provided by / (used for) operating activities




Loss / (Gain) on foreign currency exchange rates

2,432



(1,618)


Depreciation and amortization

27,660



14,690


Integration Costs

26,827



1,162


Deferred taxes

(12,355)



5,108


Amortization of deferred financing costs

354



354


Bad debt provision

7,463



3,699


Impairment of cost method investment



50


Convertible senior note discount amortization

3,624



2,150


Gain on extinguishment of debt




Stock compensation expense

3,680



3,452


Adjustment to fair value of contingent Consideration

(6,722)




Changes in operating assets and liabilities:

11,257



82,764


Cash provided by / (used for) operating activities

76,159



138,121


CASH FLOWS FROM INVESTING ACTIVITIES:




Purchases of property and equipment

(19,676)



(8,759)


Sale of treasury bills



614


Intangible asset purchases



(12,400)


Funding of acquisitions, net of cash acquired

(3,258)



(14,918)


Cash received relating to acquisitions

7,612




Purchase of investment

(759)




Cash used for investing activities

(16,081)



(35,463)


CASH FLOWS FROM FINANCING ACTIVITIES:




Contractual payments for acquisition

(13,892)




Proceeds from issuance of convertible senior note, net




Principal payment on notes payable




Proceeds from exercise of stock options

2,386



2,087


Proceeds from employee stock purchase plan

789



740


Purchase of treasury stock

(5,088)



(1,250)


Tax benefit from employee stock option exercises

1,140



1,221


Dividend payments

(9,530)



(8,139)


Distributions to non-controlling interest holders

(1,643)



(597)


Cash (used for) / provided by financing activities

(25,838)



(5,938)


Effect of exchange rate changes on cash and cash equivalents

(1,704)



2,760


INCREASE IN CASH AND CASH EQUIVALENTS

32,536



99,480


CASH AND CASH EQUIVALENTS—Beginning of year

139,351



39,871


CASH AND CASH EQUIVALENTS—End of year

171,887



139,351




1 As restated for 2014 and the first three quarters of 2015. See the Company's Form 8-K filed on March 15, 2016 for additional information.


(*) Reconciliation of GAAP Net Income to Adjusted Net Income and Adjusted EPS
Adjusted net income is a non-GAAP financial measure and represents our net income excluding restructuring, acquisition and integration related expenses, adjustment to fair value of contingent consideration and bad debt expense related to the SNB event in January of 2015. This non-GAAP financial measure has certain limitations, including that it does not have a standardized meaning and, therefore, our definition may be different from similar non-GAAP financial measures used by other companies and/or analysts. Thus, it may be more difficult to compare our financial performance to that of other companies. We believe our reporting of adjusted net income assists investors in evaluating our operating performance. However, because adjusted net income is not a measure of financial performance calculated in accordance with GAAP, such measure should be considered in addition to, but not as a substitute for, other measures of our financial performance reported in accordance with GAAP, such as net income.

Net Income to Adjusted Net Income and Adjusted EPS
In millions, except per share data
(unaudited)


Three Months Ended


Twelve Months Ended


December 31,


December 31,


2015


2014(1)


2015(1)


2014(1)

Net income applicable to Gain Capital Holdings Inc.

$

15.5



$

22.5



$

10.2



$

24.9


Add Back, net of tax:








Acquisition costs

0.1



1.4



2.2



2.5


Restructuring



0.1



2.7



1.7


Integration costs

6.5



0.6



21.5



1.8


Adjustment to fair value of contingent consideration

(1.5)





(4.4)




Bad debt related to SNB event in January of 2015





2.0



0.1


Adjusted net income

$

20.6



$

24.6



$

34.2



$

31.0










Basic

$

0.42



$

0.59



$

0.72



$

0.76


Diluted

$

0.42



$

0.56



$

0.71



$

0.72


Weighted averages common shares outstanding used in computing earnings per common share








Basic

48,902,186



41,506,205



47,601,979



40,561,644


Diluted

49,379,362



43,684,324



48,379,051



43,214,895





1 As restated for 2014 and the first three quarters of 2015. See the Company's Form 8-K filed on March 15, 2016 for additional information.


(*) Reconciliation of Cash from Operating Activities and Free Cash Flow per Share
The table set forth below provides information regarding our total available liquidity as of December 31, 2015 and as of December 31, 2014. We use this non-GAAP measure to evaluate our business operations and our ability to continue to grow our business, including through acquisitions (amounts in millions):


Fiscal Year Ended Dec 31,


2015(1)


2014(1)

Cash Flow from Operations

$

76.2



$

138.1


Less: Capital Expenditures

(19.7)



(8.8)


Free Cash Flow

$

56.5



$

129.3


Free Cash Flow per Share

$

1.17



$

2.99






Diluted Shares Outstanding

48,379,051



43,214,895