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GAIN Capital Announces Monthly Metrics for March 2019

BEDMINSTER, N.J., April 8, 2019 /PRNewswire/ -- GAIN Capital Holdings, Inc. (NYSE: GCAP) ("GAIN" or "the Company") today reported certain operating metrics for the month of March 2019.


Mar-19

Feb-19

Mar-18

Sequential
Change

Year-over-
year change

Retail Segment






OTC Trading Volume(1)

$

168.9


$

134.4


$

262.8


25.7

%

(35.7)

%

OTC Average Daily Volume

$

8.0


$

6.7


$

11.9


19.4

%

(32.8)

%

12 Month Trailing Active OTC Accounts(2)

120,641


121,787


131,764


(0.9)

%

(8.4)

%

3 Month Trailing Active OTC Accounts(2)

70,051


70,071


78,681


--

%

(11.0)

%







Futures Segment






Number of Futures Contracts

622,194


542,556


771,749


14.7

%

(19.4)

%

Futures Average Daily Contracts

29,628


28,556


36,750


3.8

%

(19.4)

%

12 Month Trailing Active Futures Accounts(2)

7,387


7,437


7,959


(0.7)

%

(7.2)

%








_________________________________________

All volume figures reported in billions.

1 US dollar equivalent of notional amounts traded.

2 Accounts that executed a transaction during the relevant period.

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

Management Commentary

"The first quarter saw unusually tight range-bound markets with CVIX at a 5 year low and close to its 2007 low, impacting client volumes and resulting in retail revenue per million (RPM) of approximately $51 for the quarter. On a trailing 12-month basis, however, RPM remains in line with historical averages, at $104," said Glenn Stevens, Chief Executive Officer. "Despite the challenging market conditions, we saw positive traction in several key operating metrics, including stable active accounts and a record number of new accounts in the first quarter.  This represents the third consecutive quarter of new account growth, against an approximately 20% lower marketing spend than the prior quarter," continued Mr. Stevens.  "Looking ahead, we continue to have confidence in our long-term outlook and, with an expanding client base and diversified product offering and geographic footprint, believe we are well positioned upon the return of more normalized market conditions."

This operating data is preliminary and subject to revision and should not be taken as an indication of GAIN's financial performance. GAIN undertakes no obligation to publicly update or review previously reported operating data.

Additional Tax Rate and Share Count Assumption Update

The Company has updated its tax rate assumptions and expects its tax rate for full year 2019 to be approximately 17%-19% and estimates its weighted-average common shares outstanding for the first quarter 2019 to be approximately 37.5 million shares.

Historical metrics and financial information can be found on the Company's investor relations website http://ir.gaincapital.com.

This operating data is preliminary and subject to revision and should not be taken as an indication of GAIN's financial performance. GAIN undertakes no obligation to publicly update or review previously reported operating data.

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.

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/gain-capital-announces-monthly-metrics-for-march-2019-300825832.html

SOURCE GAIN Capital Holdings, Inc.

Investor Relations Contact: Lauren Tarola, Edelman for GAIN Capital, +1 908.731.0737, ir@gaincapital.com; Media Contact: Nicole Briguet, Edelman for GAIN Capital, +1 212-704-8164, pr@gaincapital.com

GAIN Capital Announces Monthly Metrics for February 2019

BEDMINSTER, N.J., March 11, 2019 /PRNewswire/ -- GAIN Capital Holdings, Inc. (NYSE: GCAP) ("GAIN" or "the Company") today reported certain operating metrics for the month of February 2019.


Feb-19

Jan-19

Feb-18

Sequential
Change

Year-over-
year change

Retail Segment






OTC Trading Volume(1)

$

134.4


$

184.0


$

283.5


(27.0)%

(52.6)%

OTC Average Daily Volume

$

6.7


$

8.4


$

14.2


(20.2)%

(52.8)%

12 Month Trailing Active OTC Accounts(2)

121,787


122,581


133,545


(0.6)%

(8.8)%

3 Month Trailing Active OTC Accounts(2)

70,071


70,150


80,681


(0.1)%

(13.2)%







Futures Segment






Number of Futures Contracts

542,556


591,123


714,322


(8.2)%

(24.0)%

Futures Average Daily Contracts

28,556


28,149


37,596


1.4%

(24.0)%

12 Month Trailing Active Futures Accounts(2)

7,437


7,673


7,972


(3.1)%

(6.7)%







_________________________________________

All volume figures reported in billions. 

1 US dollar equivalent of notional amounts traded.  

2 Accounts that executed a transaction during the relevant period. 

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

Management Commentary
"Market conditions in February were lackluster, with muted volatility in the major currency and equity markets as evidenced by the GVIX, GAIN's product-weighted measure of market volatility, which was down over 50% year-over-year and nearly 25% on a sequential basis," stated Glenn Stevens, GAIN Capital CEO. "Within this backdrop, we are encouraged by our trailing 3 month active customers for February as well as our continued success attracting new accounts, with over 22,000 new accounts opened in the first two months of 2019. We expect trading activity to rebound in the months ahead, upon the return of more interesting market conditions."

Historical metrics and financial information can be found on the Company's investor relations website http://ir.gaincapital.com.

This operating data is preliminary and subject to revision and should not be taken as an indication of GAIN's financial performance. GAIN undertakes no obligation to publicly update or review previously reported operating data.

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.

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 for the year ended December 31, 2017, as filed with the Securities and Exchange Commission on March 14, 2018, and include, but are not limited to, the actions of both current and potential new competitors, fluctuations in market trading volumes, financial market volatility, 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.

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/gain-capital-announces-monthly-metrics-for-february-2019-300809731.html

SOURCE GAIN Capital Holdings, Inc.

Investor Relations Contact Lauren Tarola, Edelman for GAIN Capital, +1 908.731.0737, ir@gaincapital.com; Media Contact Nicole Briguet, Edelman for GAIN Capital, +1 212-704-8164, pr@gaincapital.com

GAIN Capital Reports Fourth Quarter and Full Year 2018 Results

BEDMINSTER, N.J., Feb. 28, 2019 /PRNewswire/ -- GAIN Capital Holdings, Inc. ("GAIN") (NYSE: GCAP), a leading global provider of online trading services, announced financial results for the fourth quarter and full year 2018.

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

Key Full Year 2018 Financial Results (all amounts reflect continuing operations)

  • GAAP net income of $28.0 million, or $0.60 per share, yielding an 8% margin, compared to a net loss of $14.9 million, or $(0.29) per share
  • GAAP net revenue of $358.0 million, up 29% year-over-year
  • Adjusted net income of $29.1 million, or $0.66 per share, compared to a loss of $11.3 million, or $(0.24) per share in 2017
  • Adjusted EBITDA of $86.5 million, compared to $29.7 million in 2017, yielding a 24% adjusted EBITDA margin

Quarterly and Annual Operating Highlights

  • Fourth quarter new direct Retail accounts increased 12% year-over-year, with full year growing 16% over 2017
  • Fourth quarter Retail average daily volume (ADV) increased 10% year-over-year and 24% sequentially
  • Full year 2018 ADV improved 5% year-over-year
  • Futures segment margin almost doubled to 14% in full year 2018 as compared to 8% for full year 2017
  • In November 2018, GAIN completed a "modified Dutch auction" tender offer to purchase $50 million of its shares

Three Months Ended December 31,


Fiscal Year Ended December 31,


2018


2017


2018


2017

Net Income/(Loss)

$

(0.7)



$

(6.8)



$

28.0



$

(14.9)


Adjusted Net Income/(Loss)(1)

$

(4.6)



$

(4.8)



$

29.1



$

(11.3)










Net Revenue

$

79.9



$

62.7



$

358.0



$

278.2


Class Action Settlement

(5.4)



0.0



(5.4)



0.0


Operating Expenses

(69.3)



(56.8)



(266.1)



(248.5)


Adjusted EBITDA(1)

$

5.2



$

5.9



$

86.5



$

29.7










Diluted GAAP EPS

$

(0.02)



$

(0.16)



$

0.60



$

(0.29)


Adjusted EPS(1)

$

(0.11)



$

(0.11)



$

0.66



$

(0.24)


___________________________________

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

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

 

"2018 was a solid year for GAIN Capital, with positive results in several key metrics.  We delivered year-over-year revenue growth of 29% to $358 million, net income of $28 million on adjusted EBITDA of $87 million.  New direct accounts increased 12% year-over-year, while client trading volumes increased 6% year-over-year," commented Glenn Stevens, Chief Executive Officer of GAIN Capital. "In addition, we returned more than $80 million to our investors during the year via buybacks, repurchases and dividends.

"Looking ahead, we are well positioned to drive robust business growth over the next several years.  We are embarking on a three-year strategic plan designed to power the next phase of GAIN's success, which involves leveraging our considerable brand assets, further increasing our investment in marketing and building a best in class client proposition tailored to the needs of experienced traders and retail investors.  We will deploy our strong balance sheet and profits to fund these strategic initiatives, while maintaining our focus on operational excellence and cost discipline, to deliver significant revenue growth and improved earnings over the next several years."

Quarterly Operating Metrics







Year-over-


Q4 18


Q4 17


year Change

Retail Segment






OTC Trading Volume (1) (2)

$

631.0



$

563.1



12.1

%

OTC Average Daily Volume

$

9.7



$

8.8



10.2

%

12 Month Trailing Active OTC Accounts (3)

123,171



132,262



(6.9)

%

3 Month Trailing Active OTC Accounts (3)

68,696



80,122



(14.3)

%







Futures Segment






Number of Futures Contracts

2,109,516



1,623,656



29.9

%

Futures Average Daily Contracts

32,961



25,772



27.9

%

12 Month Trailing Active Futures Accounts (3)

7,717



7,838



(1.5)

%

_______________________________________

All volume figures reported in billions.

1 US dollar equivalent of notional amounts traded.

2 For the quarter, indirect volume represented 24% of total retail OTC trading volume.

3 Accounts that executed a transaction during the relevant period.

 

Capital Return and Dividend
In the fourth quarter, GAIN focused on returning capital to shareholders through buybacks, the modified Dutch auction, and dividends which amounted to approximately $54.2 million.

For the full year 2018, excluding the modified Dutch auction, GAIN repurchased 1,839,060 shares of stock at an average price of $7.33.

Including the modified Dutch auction, during the full year GAIN repurchased 8,216,611 shares of stock at an average price of $7.73.

For the twelve months ended 2018, GAIN returned a total of $73.8 million to shareholders in the form of share repurchases and dividends.

GAIN's Board of Directors declared a quarterly cash dividend of $0.06 per share of the Company's common stock. The dividend is payable on March 29, 2019 to shareholders of record as of the close of business on March 26, 2019.

2021 Long-Term Operating and Financial Targets
Through the Company's commitment to organic growth initiatives and delivering shareholder value, GAIN is introducing long-term financial targets for 2021. The following expectations assume average long-term RPM of $106.


FY 2018 Performance

FY 2021 Outlook

Operational

New Direct Accounts

87.6K

38% to 42% growth

Retail Volume

$2.6 trillion

30% to 35% growth

Financial

Revenue

$353 million

$420 to $460 million

Overhead Costs

$190 million

$190 to $200 million

EBITDA Margin

25%

30% to 35%

EPS

$0.66

$2.15 to $2.40

 

Conference Call
GAIN will host a conference call February 28, 2019 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 10128382#.

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

(unaudited)



Three Months Ended


Twelve Months Ended


December 31,


December 31,


2018


2017


2018


2017

REVENUE:








Retail revenue

$

61.1



$

50.9



$

300.2



$

231.1


Futures revenue

9.3



8.8



39.7



38.0


Other revenue

5.8



1.4



7.4



4.5


Total non-interest revenue

76.2



61.2



347.3



273.5


Interest revenue

4.3



1.9



12.5



5.6


Interest expense

0.6



0.3



1.9



0.9


Total net interest revenue

3.7



1.6



10.6



4.7


Net revenue

$

79.9



$

62.7



$

358.0



$

278.2


EXPENSES:








Employee compensation and benefits

$

19.4



$

18.3



$

89.1



$

82.7


Selling and marketing

13.5



8.0



36.5



31.1


Referral fees

10.0



11.0



40.0



53.7


Trading expenses

5.8



4.3



22.9



19.4


General and administrative

16.3



11.2



55.2



43.5


Depreciation and amortization

4.3



4.7



19.7



17.0


Purchased intangible amortization

3.4



3.6



14.2



14.0


Communications and technology

5.6



5.1



22.0



19.2


Bad debt provision

0.8



(0.3)



2.5



(0.2)


Restructuring expenses

0.7



0.0



0.8



0.0


Legal settlement

0.3



0.0



5.3



0.0


Impairment of investment

0.0



0.6



(0.1)



0.6


Total operating expense

80.1



66.5



307.9



281.0


OPERATING PROFIT/(LOSS)

(0.2)



(3.8)



50.0



(2.8)


Interest expense on long term borrowings

3.4



3.5



13.5



11.8


Loss on extinguishment of debt

0.0



0.0



$

0.0



4.9


INCOME/(LOSS) BEFORE INCOME TAX
(BENEFIT)/EXPENSE

(3.6)



(7.3)



36.5



(19.5)


Income tax expense/(benefit)

(2.9)



(0.7)



8.5



(5.0)


Equity in net loss of affiliate

0.0



(0.2)



0.0



(0.3)


Net income/(loss) from continuing operations

(0.7)



(6.8)



28.0



(14.9)


Income from discontinued operations, including gain on

sale of $69,292, net of income tax of $4,756

(1.7)



3.3



65.6



4.3


NET INCOME/(LOSS)

(2.4)



(3.5)



93.6



(10.6)


Net income attributable to non-controlling interest

0.1



0.2



0.7



0.6


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

$

(2.5)



$

(3.7)



$

92.9



$

(11.2)


_________________________

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

 

 

Condensed Consolidated Balance Sheet

(unaudited)



December 31,


December 31,


2018


2017

ASSETS:




Cash and cash equivalents

$

278.9



$

209.7


Cash and securities held for customers

842.5



978.8


Receivables from brokers

84.3



78.5


Property and equipment, net

30.6



40.7


Intangible assets, net

32.2



62.0


Goodwill

27.8



33.0


Other assets

36.4



45.9


Total assets

$

1,332.5



$

1,448.6


LIABILITIES AND SHAREHOLDERS' EQUITY:




Payables to customers

$

842.5



$

978.8


Payables to brokers

1.6



2.8


Accrued compensation and benefits

11.2



10.1


Accrued expenses and other liabilities

41.6



33.9


Income tax payable

5.8



0.6


Convertible senior notes

132.1



132.2


Total liabilities

$

1,034.8



$

1,158.5


Redeemable non-controlling interests

$

0.0



$

4.4


Shareholders' equity

297.8



285.7


Total liabilities and shareholders' equity

$

1,332.5



$

1,448.6


_________________________

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

 

 

Income Statement of Discontinued Operations



Three Months Ended


Twelve Months Ended


December 31,


December 31,


2018


2017


2018


2017

REVENUE:








Institutional revenue

$

0.0



$

6.8



$

16.4



$

30.1


Total non-interest revenue

0.0



6.8



16.4



30.1


Interest revenue

0.0



0.2



0.1



0.3


Total net interest revenue

0.0



0.2



0.1



0.3


Net revenue

$

0.0



$

7.0



$

16.5



$

30.4


EXPENSES:








Employee compensation and benefits

$

0.0



$

2.5



$

6.0



$

12.5


Trading expenses

0.0



2.3



5.4



9.6


Other expenses

0.0



1.5



4.0



5.8


Total operating expense

0.0



6.3



15.4



28.0


OPERATING PROFIT/(LOSS)

0.0



0.6



1.1



2.4


Gain/(loss) on sale of discontinued operations

(0.1)



0.0



69.3



0.0


INCOME/(LOSS) BEFORE INCOME TAX












EXPENSE/(BENEFIT)

(0.1)



0.6



70.4



2.4


Income tax expense/(benefit)

1.5



(2.7)



4.8



(1.8)


NET INCOME FROM DISCONTINUED

OPERATIONS

$

(1.7)



$

3.3



$

65.6



$

4.3


_________________________

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

 

Reconciliation of GAAP Net Income to Adjusted Net Income, Adjusted EPS and Adjusted Income Tax

Adjusted net income/(loss) is a non-GAAP financial measure and represents our net income/(loss) excluding certain one-time costs and benefits.  Adjusted EPS is calculated using adjusted net income/(loss).  These non-GAAP financial measures have certain limitations, including that they do not have standardized meanings and, therefore, our definitions 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 these measures assists investors in evaluating our operating performance. However, because they are not a measure of financial performance or income tax expense calculated in accordance with GAAP, such measures should be considered in addition to, but not as a substitute for, other measures reported in accordance with GAAP.

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

(unaudited)



Three Months Ended


Twelve Months Ended


December 31,


December 31,


2018


2017


2018


2017

Net Income/(Loss) from continuing operations

$

(0.7)



$

(6.8)



$

28.0



$

(14.9)


Income Tax Expense/(Benefit)

(2.9)



(0.7)



8.5



(5.0)


Equity in Net Loss of Affiliate

0.0



0.2



0.0



0.3


Pre-Tax Income/(Loss)

$

(3.6)



$

(7.3)



$

36.5



$

(19.5)


Plus: Adjustments

(2.2)



1.4



2.6



6.4


Adjusted Pre-Tax Income/(Loss)

$

(5.8)



$

(5.8)



$

39.1



$

(13.1)


Adjusted Income Tax Expense/(Benefit)(1)

1.4



1.5



(9.3)



2.8


Equity in Net Loss of Affiliate

0.0



(0.2)



0.0



(0.3)


Non-controlling Interest

(0.1)



(0.2)



(0.7)



(0.6)


Adjusted Net Income/(Loss)

$

(4.6)



$

(4.8)



$

29.1



$

(11.3)










Adjusted Earnings/(Loss) per Common Share:








Basic

$

(0.11)



$

(0.11)



$

0.67



$

(0.24)


Diluted

$

(0.11)



$

(0.11)



$

0.66



$

(0.24)










Weighted average common shares outstanding used in
computing adjusted earnings/(loss) per common share:








Basic

40,598,334



45,090,984



43,731,881



46,740,097


Diluted

40,598,334



45,090,984



44,189,324



46,740,097


_____________________________


1Adjusted income tax (expense)/benefit reflects the Company's GAAP income tax (expense)/benefit adjusted for (a) taxable or deductible items affecting income tax (expense)/benefit that are unrelated to pre-tax income in the period and (b) the tax effect of other taxable adjustments made to the Company's pre-tax income. The tax effect of the adjustments to pre-tax income are calculated using the tax rate applicable for the jurisdiction within which each of the adjustments arose. The Company believes that this non-GAAP financial measure provides investors with a more consistent and stable basis for determining the impact of taxes on the Company's core continuing operations.


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

 

 

Adjusted Income Tax (Expense)/ Benefit Reconciliation

(unaudited)




Three Months Ended


Twelve Months Ended



December 31,


 December 31,



2018


2017


2018


2017










GAAP pre-tax income/(loss)


$

(3.6)



$

(7.3)



$

36.5



$

(19.5)


YTD GAAP Tax Rate


23.3

%


25.7

%


23.3

%


25.7

%

Initial adjusted tax (expense)/benefit (1)


0.8



1.9



(8.5)



5.0











Uncertain tax position(2)


0.0



0.0



(0.2)



(4.6)


Tax reform(3)


0.0



0.0



0.0



4.5


One off adjustments(4)


0.5



(0.4)



(0.5)



(2.1)


Adjusted tax (expense)/benefit


1.4



1.5



(9.3)



2.8











Adjusted pre tax income/(loss)


$

(5.8)



$

(5.8)



$

39.1



$

(13.1)


Adjusted tax rate(5)


23.1

%


25.1

%


23.6

%


21.2

%


1Initial adjusted tax (expense)/benefit calculated as GAAP pre-tax income multiplied by the YTD GAAP Tax Rate

2Represents adjustment caused by a favorable U.S. tax ruling of $(0.2) million in 2018; prior year adjustments for release of interest and penalties associated with deemed dividends based on amended prior year filings and IRS approved change in accounting method of $4.6 million in 2017

3Tax adjustments required under the Tax Cuts and Jobs Act (TCJA)

4Represents adjustments to tax relating to a legal settlement of $0.3 million taxed at 21%, restructuring of $0.7 million taxed at 19%, a PP&E write off of $1.3 million taxed at 19%, fees associated with the share tender of $0.8 million taxed at 21% and a class action settlement of $(5.4) million taxed at 21% during Q4 2018; other corporate expenses of $0.8 million taxed at 35% and an impairment of investment expense of $0.6 million taxed at 19% in  Q4 2017; a legal settlement of $5.3 million taxed at 21%, restructuring of $0.7 million taxed at 19%, a PP&E write off of $1.3 million taxed at 19%, fees associated with the share tender of $0.8 million taxed at 21%, a class action settlement of $(5.4) million taxed at 21% and an impairment adjustment of $(0.1) million taxed at 19% during 2018; loss on extinguishment of debt expense of $4.9 million taxed at 35%, other corporate expenses of $0.8 million taxed at 35% and an impairment of investment expense of $0.6 million taxed at 19% in 2017

5Adjusted tax rate calculated as Adjusted tax (expense)/benefit divided by Adjusted pre tax income/(loss)


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

 

Reconciliation of GAAP Net Income to Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA is a non-GAAP financial measure that represents our earnings/(loss) before interest, taxes, depreciation and amortization, purchased intangible amortization, convertible note interest, contingent provision, non-controlling interest and debt extinguishment. 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/(loss).

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

(unaudited)



Three Months Ended

Twelve Months Ended


December 31,

December 31,


2018


2017

2018


2017

Net Revenue

$

79.9



$

62.7


$

358.0



$

278.2


Net Income/(Loss)

(0.7)



(6.8)


28.0



(14.9)


Net Income/(Loss) Margin %

(1)

%


(11)

%

8

%


(5)

%








Net Income/(Loss)

$

(0.7)



$

(6.8)


$

28.0



$

(14.9)


Depreciation and amortization

4.3



4.7


19.7



17.0


Purchased intangible amortization

3.4



3.6


14.2



14.0


Interest on long term borrowings

3.4



3.5


13.5



11.8


Income tax expense/(benefit)

(2.9)



(0.7)


8.5



(5.0)


Legal settlement

0.3



0.0


5.3



0.0


Restructuring

0.7



0.0


0.8



0.0


Impairment of investment

0.0



0.6


(0.1)



0.6


Equity in net loss of affiliates

0.0



0.2


0.0



0.3


Loss on extinguishment of debt

0.0



0.0


0.0



4.9


Class action settlement

(5.4)



0.0


(5.4)



0.0


PP&E write-off

1.3



0.0


1.3



0.0


Dutch auction fees

0.8



0.0


0.8



0.0


Operational strategy review fees

0.0



0.8


0.0



0.8


Adjusted EBITDA

$

5.2



$

5.9


$

86.5



$

29.7


Adjusted EBITDA Margin %(1)

7

%


9

%

24

%


11

%

_________________________

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

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

 

 

Reconciliation of 2021 GAAP Net Income Margin to Adjusted EBITDA Margin

(unaudited)



FY 2021 Outlook

Net Income Margin

16% to 20%

Tax

6% to 8%

Interest

2% to 2%

Depreciation and Amortization

5% to 5%

EBITDA Margin

30% to 35%

 

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 two operating segments: Retail Segment and Futures Segment.

Futures



Three Months Ended
December 31,


Twelve Months Ended
December 31,


2018


2017


2018


2017

Trading Revenue

$

9.3



$

8.8



$

39.7



$

38.0


Other Futures Revenue

1.4



$

0.7



$

4.3



$

2.3


Total Revenue

10.6



$

9.5



$

44.0



$

40.3










Employee Compensation & Benefits

2.1



2.0



9.9



9.4


Marketing

0.2



0.2



0.8



0.8


Referral Fees

3.1



3.2



13.1



14.0


Other Operating Expenses

3.6



3.1



14.0



12.9


Segment Profit

$

1.6



$

1.1



$

6.2



$

3.2


% Margin

15

%


11

%


14

%


8

%

____________________________

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

 

 

Corporate and Other



Three Months Ended
December 31,


Twelve Months Ended
December 31,


2018


2017


2018


2017

Revenue/(loss)

$

(1.1)



$

0.4



$

(2.4)



$

0.5










Employee Compensation & Benefits

5.3



4.5



23.8



21.0


Marketing

0.1



0.3



0.3



0.4


Other Operating Expenses

3.2



2.7



13.8



10.2


Loss

$

(9.7)



$

(7.1)



$

(40.2)



$

(31.1)


____________________

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

 

 

Reconciliation of Segment Profit to Income Before Income Tax Expense



Three Months Ended
December 31,


Twelve Months Ended
December 31,


2018


2017


2018


2017

Retail segment

$

13.3



$

12.0



$

120.5



$

57.5


Futures segment

1.6



1.1



6.2



3.2


Corporate and other

(9.7)



(7.1)



(40.2)



(31.1)


Segment profit

5.2



5.9



86.5



29.7










Depreciation and amortization

$

4.3



$

4.7



$

19.7



$

17.0


Purchased intangible amortization

3.4



3.6



14.2



14.0


Restructuring expenses

0.7



0.0



0.8



0.0


Contingent provision

0.3



0.0



5.3



0.0


Impairment of investment

0.0



0.6



(0.1)



0.6


Class action settlement

(5.4)



0.0



(5.4)



0.0


Dutch auction fees

0.8



0.0



0.8



0.0


PP&E write-off

1.3



0.0



1.3



0.0


Other corporate expenses

0.0



0.8



0.0



0.8


Operating profit/(loss)

$

(0.2)



$

(3.8)



$

50.0



$

(2.8)


Interest expense on long term borrowings

3.4



3.5



13.5



11.8


Loss on extinguishment of debt

0.0



0.0



$

0.0



$

4.9


Income/(Loss) before income tax expense/(benefit)

$

(3.6)



$

(7.3)



$

36.5



$

(19.5)


____________________

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

 

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 for the year ended December 31, 2017, as filed with the Securities and Exchange Commission on March 14, 2018, and include, but are not limited to, the actions of both current and potential new competitors, fluctuations in market trading volumes, financial market volatility, 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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SOURCE GAIN Capital Holdings, Inc.

Investor Relations Contact: Lauren Tarola, Edelman for GAIN Capital, +1 908.731.0737, ir@gaincapital.com; Media Contact: Nicole Briguet, Edelman for GAIN Capital, +1 212.704.8164, pr@gaincapital.com

GAIN Capital Announces Monthly Metrics for January 2019

BEDMINSTER, N.J., Feb. 8, 2019 /PRNewswire/ -- GAIN Capital Holdings, Inc. (NYSE: GCAP) ("GAIN" or "the Company") today reported certain operating metrics for the month of January 2019.


Jan-19

Dec-18

Jan-18

Sequential
Change

Year-over-
year change

Retail Segment






OTC Trading Volume(1)

$

184.0

$

192.6

$

249.0

(4.5)%

(26.1)%

OTC Average Daily Volume

$

8.4

$

9.6

$

11.3

(12.5)%

(25.7)%

12 Month Trailing Active OTC Accounts(2)

122,581

123,171

132,783

(0.5)%

(7.7)%

3 Month Trailing Active OTC Accounts(2)

70,150

68,696

81,034

2.1%

(13.4)%







Futures Segment






Number of Futures Contracts

591,123

641,094

674,160

(7.8)%

(12.3)%

Futures Average Daily Contracts

28,149

32,055

32,103

(12.2)%

(12.3)%

12 Month Trailing Active Futures Accounts(2)

7,673

7,717

7,924

(0.6)%

(3.2)%









All volume figures reported in billions.

1 US dollar equivalent of notional amounts traded.

2 Accounts that executed a transaction during the relevant period.

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

Historical metrics and financial information can be found on the Company's investor relations website http://ir.gaincapital.com.

This operating data is preliminary and subject to revision and should not be taken as an indication of GAIN's financial performance. GAIN undertakes no obligation to publicly update or review previously reported operating data.

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.

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SOURCE GAIN Capital Holdings, Inc.

Investor Relations Contact, Lauren Tarola, Edelman for GAIN Capital, +1 908.731.0737, ir@gaincapital.com; Media Contact, Nicole Briguet, Edelman for GAIN Capital, +1 212-704-8164, pr@gaincapital.com

GAIN Capital Bolsters IT Leadership with Key Appointments

Company Hires New IT Development and Infrastructure Executives to Accelerate Technology Innovation and Lead the Company through its Next Phase of Growth

BEDMINSTER, N.J., Jan. 23, 2019 /PRNewswire/ -- GAIN Capital Holdings, Inc. (NYSE: GCAP) ("GAIN Capital") ("the Company") today announced the appointments of Boris Levine as Head of IT Development and Rasmus Hansen as Head of Infrastructure Technology. Both executives report to Alastair Hine, Chief Operating Officer of GAIN Capital, and are based in GAIN's London office.

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

The appointments of Levine and Hansen are part of GAIN's continued investment in enhancing its talent and capabilities across all aspects of IT development and infrastructure. Both will be instrumental in building out GAIN's recently opened technology and operations center in Krakow, Poland.

"Boris and Rasmus each bring many years of industry experience and deep technological expertise, which make them invaluable additions to our management team. Their knowledge of real time, low latency, Cloud and AI technologies, along with their understanding of how to apply them to our business model and service operations, is very exciting and directly aligns with our technology and product strategy and our overall growth aspirations," said Glenn Stevens, Chief Executive Officer of GAIN Capital. "We are pleased to welcome them to our organization and look forward to their contributions."

Levine joins GAIN Capital from IG Group, where he spent the past 16 years, most recently serving as the Chief Architecture Officer, responsible for technical architecture & strategy as well as the development of real time pricing and risk management systems. As GAIN's Head of IT Development, Levine will be responsible for all IT development, including delivery of all technology projects, internally and externally.

Previously, Hansen held the position of Enterprise Architect at ION technology, where he ran Infrastructure Technology, Service Operations and Enterprise Architecture groups, managing teams across EMEA, APAC and the U.S. As GAIN's Head of Infrastructure Technology, Hansen will spearhead IT infrastructure and support IT and infrastructure development for the Company.

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.

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SOURCE GAIN Capital Holdings, Inc.

Investor Relations Contact: Lauren Tarola, Edelman for GAIN Capital, 908.731.0737, @gaincapital.com; Media Contact: Nicole Briguet, Edelman for GAIN Capital, 212-704-8164, gaincapital.com

GAIN Capital Announces Monthly Metrics for December 2018

BEDMINSTER, N.J., Jan. 8, 2019 /PRNewswire/ -- GAIN Capital Holdings, Inc. (NYSE: GCAP) ("GAIN" or "the Company") today reported certain operating metrics for the month of December 2018.


Dec-18

Nov-18

Dec-17

Sequential
Change

Year-over-
year change

Retail Segment






OTC Trading Volume(1)

$

192.6


$

207.2


$

163.6


(7.0)

%

17.7

%

OTC Average Daily Volume

$

9.6


$

9.4


$

8.2


2.1

%

17.1

%

12 Month Trailing Active OTC Accounts(2)

123,171


123,932


132,262


(0.6)

%

(6.9)

%

3 Month Trailing Active OTC Accounts(2)

68,696


67,632


80,122


1.6

%

(14.3)

%







Futures Segment






Number of Futures Contracts

641,094


654,077


516,691


(2.0)

%

24.1

%

Futures Average Daily Contracts

32,055


31,147


25,835


2.9

%

24.1

%

12 Month Trailing Active Futures Accounts(2)

7,717


7,758


7,838


(0.5)

%

(1.5)

%







_________________________________________


All volume figures reported in billions.

1 US dollar equivalent of notional amounts traded.

2 Accounts that executed a transaction during the relevant period. For the quarter, indirect volume represented 24% of total retail OTC trading volume.

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

 

Management Commentary

"December was marked by an increase in average daily volume, both sequentially and year-over-year, to $9.6 billion, supporting an improvement in metrics as compared to Q3 2018," said Glenn Stevens, Chief Executive Officer of GAIN Capital. "With volatility muted until the final weeks of the quarter, Q4 revenue capture came in around $97 per million. Additionally, we continued to see positive results from our planned uplift in marketing, with spend increasing by around a third in the fourth quarter and new accounts increasing for the second consecutive quarter, which is expected to drive additional volume and revenue in 2019."

Additional Share Count Assumption Update

The Company also estimates its weighted-average common shares outstanding for the fourth quarter 2018 to be approximately 40.6 million shares.

Historical metrics and financial information can be found on the Company's investor relations website http://ir.gaincapital.com.

This operating data is preliminary and subject to revision and should not be taken as an indication of GAIN's financial performance. GAIN undertakes no obligation to publicly update or review previously reported operating data.

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.

 

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SOURCE GAIN Capital Holdings, Inc.

Investor Relations: Lauren Tarola, Edelman for GAIN Capital, +1 908.731.0737, ir@gaincapital.com; Media Contact: Nicole Briguet, Edelman for GAIN Capital, +1 212-704-8164, pr@gaincapital.com

GAIN Capital Announces Monthly Metrics for November 2018

BEDMINSTER, N.J., Dec. 10, 2018 /PRNewswire/ -- GAIN Capital Holdings, Inc. (NYSE: GCAP) ("GAIN" or "the Company") today reported certain operating metrics for the month of November 2018.

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


Nov-18

Oct-18

Nov-17

Sequential

Change

Year-over-

year change

Retail Segment






OTC Trading Volume(1)

$

207.2


$

231.2


$

207.0


(10.4)%


0.1

%

OTC Average Daily Volume

$

9.4


$

10.1


$

9.4


(6.9)%


%

12 Month Trailing Active OTC Accounts(2)

123,932


127,054


131,825


(2.5)%


(6.0)

%

3 Month Trailing Active OTC Accounts(2)

67,632


70,225


80,102


(3.7)%


(15.6)

%







Futures Segment






Number of Futures Contracts

654,077


814,345


582,340


(19.7)%


12.3

%

Futures Average Daily Contracts

31,147


35,406


27,730


(12.0)%


12.3

%

12 Month Trailing Active Futures Accounts(2)

7,758


7,806


7,885


(0.6)%


(1.6)

%







_________________________________________

All volume figures reported in billions.
1 US dollar equivalent of notional amounts traded.
2 Accounts that executed a transaction during the relevant period.

Historical metrics and financial information can be found on the Company's investor relations website http://ir.gaincapital.com.

This operating data is preliminary and subject to revision and should not be taken as an indication of GAIN's financial performance. GAIN undertakes no obligation to publicly update or review previously reported operating data.

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.

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SOURCE GAIN Capital Holdings, Inc.

Investor Relations Contact, Lauren Tarola, Edelman for GAIN Capital, +1 908.731.0737, ir@gaincapital.com, Media Contact, Nicole Briguet, Edelman for GAIN Capital, +1 212-704-8164, pr@gaincapital.com

GAIN Announces Final Results of Tender Offer

BEDMINSTER, N.J., Nov. 9, 2018 /PRNewswire/ -- GAIN Capital Holdings, Inc. (NYSE: GCAP) announced today the final results of its "modified Dutch auction" tender offer, which expired at 5:00 P.M., New York City time, on November 6, 2018.

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

GAIN has accepted for purchase 6,377,551 shares of its common stock at a price of $7.84 per share (reflecting a proration factor of approximately 0.95664), for an aggregate cost of approximately $50 million, excluding fees and expenses relating to the tender offer. These shares represent approximately 14 percent of the shares outstanding.

Jefferies LLC acted as dealer manager for the tender offer. Stockholders who have questions or would like additional information about the tender offer may contact the information agent for the tender offer, D.F. King & Co., Inc. at (800) 735-3591 or by email at gcap@dfking.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.

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SOURCE GAIN Capital Holdings, Inc.

Investor Relations Contact: Lauren Tarola, Edelman for GAIN Capital, Phone: 1-908-731-0737, Email: ir@gaincapital.com ; Media Contact: Nicole Briguet, Edelman for GAIN Capital, Phone: 1-212-704-8164, Email: pr@gaincapital.com

GAIN Capital Announces Monthly Metrics for October 2018

BEDMINSTER, N.J., Nov. 9, 2018 /PRNewswire/ -- GAIN Capital Holdings, Inc. (NYSE: GCAP) ("GAIN" or "the Company") today reported certain operating metrics for the month of October 2018.


Oct-18

Sept-18

Oct-17

Sequential
Change

Year-over-
year change

Retail Segment






OTC Trading Volume(1)

$

231.2


$

149.6


$

192.5


54.5

%

20.1

%

OTC Average Daily Volume

$

10.1


$

7.5


$

8.8


34.7

%

14.8

%

12 Month Trailing Active OTC Accounts(2)

127,054


129,182


133,599


(1.6)

%

(4.9)

%

3 Month Trailing Active OTC Accounts(2)

70,225


71,597


81,363


(1.9)

%

(13.7)

%







Futures Segment






Number of Futures Contracts

814,345


554,687


524,625


46.8

%

55.2

%

Futures Average Daily Contracts

35,406


29,194


23,847


21.3

%

48.5

%

12 Month Trailing Active Futures Accounts(2)

7,806


7,550


7,973


3.4

%

(2.1)

%



All volume figures reported in billions.

1 US dollar equivalent of notional amounts traded.

2 Accounts that executed a transaction during the relevant period.

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

 

Historical metrics and financial information can be found on the Company's investor relations website http://ir.gaincapital.com.

This operating data is preliminary and subject to revision and should not be taken as an indication of GAIN's financial performance. GAIN undertakes no obligation to publicly update or review previously reported operating data.

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.

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SOURCE GAIN Capital Holdings, Inc.

Investor Relations Contact: Lauren Tarola, Edelman for GAIN Capital, +1 908.731.0737, ir@gaincapital.com; Media Contact, Nicole Briguet, Edelman for GAIN Capital, +1 212-704-8164, pr@gaincapital.com

GAIN Announces Preliminary Results of Tender Offer

BEDMINSTER, N.J., Nov. 7, 2018 /PRNewswire/ -- GAIN Capital Holdings, Inc. (NYSE: GCAP) announced today the preliminary results of its "modified Dutch auction" tender offer, which expired at 5:00 P.M., New York City time, on November 6, 2018. Based on the preliminary count by Broadridge Corporate Issuer Solutions, Inc., the depositary for the tender offer, a number of shares of GAIN's common stock more than sufficient to allow GAIN to successfully complete the purchase of $50 million of its common stock were properly tendered and not properly withdrawn at or below the purchase price of $7.94 per share, including shares that were tendered by notice of guaranteed delivery. 

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

In accordance with the terms and conditions of the tender offer and based on the preliminary count by the depositary, GAIN expects to accept for payment, at a purchase price of $7.84, approximately 6,377,551 shares (based on proration of shares tendered) of its common stock properly tendered at or below the purchase price and not properly withdrawn before the expiration date, at an aggregate cost of approximately $50 million, excluding fees and expenses relating to the tender offer.

The number of shares to be purchased and the purchase price are preliminary and subject to change. The preliminary information contained in this press release is subject to confirmation by the depositary and is based on the assumption that all shares tendered through notice of guaranteed delivery will be delivered within the two trading day settlement period. The final number of shares to be purchased and the final purchase price will be announced following the expiration of the guaranteed delivery period and completion by the depositary of the confirmation process. Payment for the shares accepted for purchase under the tender offer, and return of all other shares tendered and not purchased, will occur promptly thereafter.

Jefferies LLC acted as dealer manager for the tender offer. Stockholders who have questions or would like additional information about the tender offer may contact the information agent for the tender offer, D.F. King & Co., Inc. at (800) 735-3591 or by email at gcap@dfking.com.  

GAIN also announced today that its Board of Directors has increased the total amount of cash available for purchases of GAIN's common stock under its previously announced share repurchase plan to $50 million in order to increase its flexibility to opportunistically purchase shares of common stock in the open market.

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.

Cautionary Note Regarding Forward-Looking Statements

Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Additionally, statements regarding operating results for future years, growth in operating results and the factors contributing to future operating results; the resolution of licensing disputes and the impact and timing thereof; expected market, industry, geographic and organic growth and trends; future serviceable addressable market size and growth; anticipated contributions from and growth in new opportunities; benefits from planned cost reductions; technology and product leadership and trends; GAIN's positioning to benefit from any of the above; potential benefits and upside to GAIN's stockholders related to any of the above; and the regulatory process and regulatory uncertainty are forward-looking statements. Words such as "anticipate," "believe," "estimate," "expect," "forecast," "intend," "may," "plan," "project," "predict," "should," "will" and similar expressions are intended to identify such forward-looking statements. These statements are based on GAIN's current expectations or beliefs, and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those expressed or implied by the statements herein due to changes in economic, business, competitive, technological, strategic and/or regulatory factors, and other factors affecting the operations of GAIN. More detailed information about these factors may be found in GAIN's filings with the SEC, including those discussed in GAIN's most recent Annual Report on Form 10-K and in any subsequent periodic reports on Form 10-Q and Form 8-K, each of which is on file with the SEC and available at the SEC's website at www.sec.gov. SEC filings for GAIN are also available in the Investor Relations section of GAIN website at www.gaincapital.com. GAIN is not obligated to update these forward-looking statements to reflect events or circumstances after the date of this document. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. 

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SOURCE GAIN Capital Holdings, Inc.

Investor Relations Contact: Lauren Tarola, Edelman for GAIN Capital, Phone: 1-908-731-0737, Email: ir@gaincapital.com; Media Contact, Nicole Briguet, Edelman for GAIN Capital, Phone: 1-212-704-8164, Email: pr@gaincapital.com

GAIN Capital Reports Third Quarter 2018 Results

BEDMINSTER, N.J., Oct. 25, 2018 /PRNewswire/ -- GAIN Capital Holdings, Inc. ("GAIN") (NYSE: GCAP), a leading global provider of online trading services, announced financial results for the third quarter of 2018.

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

Key Financial Results for the Third Quarter (all amounts reflect continuing operations)

  • GAAP net income of $10.0 million, or $0.22 per share, yielding a 10% margin
  • GAAP net revenue of $95.5 million, up 30% year-over-year
  • Adjusted net income of $13.5 million, or $0.30 per share
  • Adjusted EBITDA of $30.5 million, yielding a 32% adjusted EBITDA margin

Operating Highlights

  • New direct accounts increased 28% year-over-year and 23% quarter-over-quarter
  • Futures segment margin doubled to 14% for the first nine months of 2018 as compared to 7% for the nine months ended September 30, 2017
  • Subsequent to quarter end, GAIN commenced a "modified Dutch auction" tender offer to purchase up to $50 million of its shares

A summary of GAIN's financial highlights is included in the chart below (all amounts are from continuing operations).


Three Months Ended September 30,


Nine Months Ended September 30,


2018


2017


2018


2017

Net Income/(Loss)

$

10.0



$

(3.1)



$

28.7



$

(8.0)


Adjusted Net Income/(Loss)(1)

$

13.5



$

1.4



$

31.7



$

(6.6)










Net Revenue

$

95.5



$

73.8



$

278.1



$

215.5


Operating Expenses

(65.0)



(60.9)



(196.8)



(191.7)


Adjusted EBITDA(1)

$

30.5



$

12.9



$

81.3



$

23.8










Diluted GAAP EPS

$

0.22



$

(0.06)



$

0.60



$

(0.14)


Adjusted EPS(1)

$

0.30



$

0.03



$

0.70



$

(0.14)


















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

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


Three Months Ended June 30,


Six Months Ended June 30,


2018


2017


2018


2017

Net Income/(Loss)

$

67.1



$

13.9



$

83.2



$

(4.9)


Adjusted Net Income/(Loss)(1)

$

4.4



$

11.3



$

18.4



$

(7.4)










Net Revenue

$

84.2



$

90.6



$

182.5



$

141.8


Operating Expenses

(65.2)



(64.9)



(131.7)



(130.8)


Adjusted EBITDA(1)

$

19.0



$

25.7



$

50.8



$

11.0










Diluted GAAP EPS

$

1.47



$

0.31



$

1.81



$

(0.08)


Adjusted EPS(1)

$

0.10



$

0.24



$

0.40



$

(0.15)


_____________________


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

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

"While overall low market volatility continued to weigh on retail trading volumes during the quarter, our diverse product offering enabled strong revenue growth," commented Glenn Stevens, Chief Executive Officer of GAIN Capital. "Volatility in emerging markets, along with trade tensions, prompted high trading activity in emerging market currencies, as well as certain metals and index products, which helped to generate overall revenue capture of $164 per million for the quarter. In addition, our continued focus on organic, direct account growth and marketing initiatives helped deliver strong operating results in Q3, with new direct accounts up 28% year-over-year. As reiterated through our recently announced $50 million tender offer, we are firmly committed to executing a balanced capital allocation strategy to enhance shareholder value."

Quarterly Operating Metrics


Q3 18


Q3 17


Year-over-
year Change

Retail Segment






OTC Trading Volume (1) (2)

$

506.5



$

644.8



(21.4)

%

OTC Average Daily Volume

$

7.8



$

9.9



(21.2)

%

12 Month Trailing Active OTC Accounts (3)

129,182



133,813



(3.5)

%

3 Month Trailing Active OTC Accounts (3)

71,597



82,275



(13.0)

%







Futures Segment






Number of Futures Contracts

1,622,114



1,518,417



6.8

%

Futures Average Daily Contracts

25,748



24,102



6.8

%

12 Month Trailing Active Futures Accounts (3)

7,550