TradeStation Group (Nasdaq GS: TRAD) today reported record net revenues of $35.3 million, and record daily average revenue trades (DARTs) of over 70,000 for the 2007 first quarter.
TradeStation Group's 2007 first quarter net income of $8.2 million, or 18 cents per share (diluted), was an 18% increase from 2006 first quarter net income of $7.0 million, or 15 cents per share (diluted). The company's 2007 first quarter net revenues of $35.3 million were a 20% increase from 2006 first quarter net revenues of $29.4 million.
"We are pleased to report that our DARTs have grown significantly year over year in the first quarter even though our larger competitors saw theirs flatten or decrease over the same period," said Salomon Sredni, CEO of TradeStation Group. "We attribute our impressive growth in DARTs in these market conditions to the diversity of our service offering, consistent account growth, and the robustness of our high-end client base. To further leverage this growth, we plan to have on the phones by the end of this quarter 50% more sales people than we had at the beginning of the year and, beginning this quarter, to spend about 30% more on advertising than previously planned."
TradeStation Reports Record DARTs and Total Accounts
For the 2007 first quarter, TradeStation experienced the following year- over-year daily trading growth results with respect to equities, futures and forex accounts:
Daily Average Revenue Trades
- Q1 07 - 70,187
- Q1 06 - 59,057
- % Increase - 19%
The company also published today, in a separate announcement, its DARTs and Total Client Assets for the month of March 2007.
TradeStation had 33,048 brokerage accounts at March 31, 2007, a 23% increase from March 31, 2006.
TradeStation's Average Client Trades Over 540 Times per Year and Has an Average Account Balance of Nearly $80,000 for Equities and $19,000 for Futures
TradeStation's brokerage client account metrics are among the very best in the industry. TradeStation brokerage clients generated the following client account metrics in the 2007 first quarter:
Client Trading Activity
- Annualized average revenue per account - $4,195
- Annualized trades per account - 548
Client Account Assets
- Average assets per account (Equities) - $79,000
- Average assets per account (Futures) - $19,000
While, on an annualized basis during the 2007 first quarter, the average TradeStation account traded 548 times per year, or 46 times per month, the average TD Ameritrade and E-Trade account traded about 10 to 12 times per year, or about one time per month. Also, TradeStation's average assets per equities account of nearly $80,000 was substantially higher than the average assets per account of TD Ameritrade and E-Trade.
Company Purchases 293,755 Shares under Stock Buy Back Plan
In the 2007 first quarter, the company purchased 293,755 shares of its common stock pursuant to its stock buy back plan for a total purchase price of $3,749,350. Since buying under the plan began November 13, 2006, through yesterday, the company has purchased 498,155 shares for a total purchase price of $6,616,875.
Under the stock buy back plan, the company is authorized to purchase up to $60 million of its available and unrestricted cash, over a 4-year period, in the open market or through privately-negotiated transactions pursuant to one or more Rule 10b5-1 plans or programs. Pursuant to the plan, $1,250,000 of company cash per month during each month of the 4-year period (i.e., $15 million per 12-month period and $60 million for the 4-year period) has been authorized to be used to purchase company shares at prevailing prices, subject to compliance with applicable securities laws, rules and regulations, including Rules 10b5-1 and 10b-18. The buy back plan does not obligate the company to acquire any specific number of shares in any period, and may be modified, suspended, extended or discontinued at any time without prior notice.
TradeStation today also published its second quarter 2007 Business Outlook.
The company's second quarter 2007 Business Outlook estimated ranges are as
SECOND QUARTER 2007 BUSINESS OUTLOOK (In Millions, Except Per Share Data)REVENUES - $36.0 to $38.0EARNINGS PER SHARE (Diluted) - $0.17 to $0.18
The company's second quarter 2007 Business Outlook estimated ranges are based on numerous assumptions, including: basing the ranges, in part, on monthly trading volume of our clients over the six-month period ended March 31, 2007 (the period used and the formula and criteria applied often vary with each quarterly business outlook based upon management's judgment each quarter concerning the best assumptions to use); an increase in the amounts expected to be spent for advertising and for product development resources; the anticipated cost of ongoing litigation, arbitration and regulatory matters and the assumption there will be no significant, adverse judgments, awards, settlements or regulatory fines or sanctions; anticipated growth and trading activity of active trader equities and futures accounts; the launch date of the company's upgraded forex offering and the rate of growth and impact of new forex accounts and trading activity; interest rates (and the extent to which they will or will not increase or decrease); the timing of expenses relating to company growth initiatives as compared to the timing of anticipated benefits from those initiatives; and numerous other assumptions concerning the company's business and industry, market conditions, and various decisions, acts or failures to act both within and outside of the company's control. All assumptions, expectations and beliefs relating to the Business Outlook are forward-looking in nature and actual results may differ materially from those estimated, including, but not limited to, as a result of, or as indicated by, the issues, uncertainties and risk factors set forth and referenced above and below.
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