CBOE Holdings, Inc. reports First Quarter 2012 Financial Results

CBOE Holdings, Inc. reports First Quarter 2012 Financial Results

 

01/05/2012

First Quarter GAAP Financial Highlights

  • Operating Revenues of $121.4 Million, Down 2 Percent
  • Net Income Allocated to Common Stockholders was $32.9 Million; Diluted EPS Up 3 Percent to $0.37
  • Operating Margin Increases 90 Basis Points to 47.3 Percent
  • Average Daily Trading Volume of 4.88 Million Contracts, Down 4 Percent Versus 1Q11 and Up 14 Percent Versus 4Q11
  • Total Market Share Increased to 29.9 Percent for the Quarter, Up 3.2 Percentage Points from Fourth Quarter 2011(1)

CBOE Holdings, Inc. (NASDAQ: CBOE) today reported first quarter 2012 net income allocated to common stockholders of $32.9 million, or $0.37 per diluted share, compared with $32.1 million, or $0.36 per diluted share in the first quarter of 2011. Operating revenues for the first quarter were $121.4 million, down 2 percent compared with $124.0 million in the first quarter of 2011.

"We are pleased to report our company's seventh consecutive quarter of adjusted earnings per share growth, despite lower trading volume industry-wide. CBOE Holdings also posted significant gains in market share, as a result of very positive customer response to our new Volume Incentive Program (VIP)," said William J. Brodsky, CBOE Holdings Chairman and Chief Executive Officer. "In addition, we continue to see particularly strong growth in our VIX options and futures, which we believe speaks to our ongoing commitment to expanding our suite of volatility products and to broadening our customer base through marketing and education. Our financial strength allows us to continue to deliver value to stockholders while investing in innovations that will position our company for long-term success."

"We reported solid financial results for the quarter by continuing to manage our costs while investing in future growth," said Alan J. Dean,CBOE Holdings Executive Vice President and Chief Financial Officer. "Our consistent earnings growth and financial stability provide a strong foundation for our business. During the quarter, we purchased $31 million of CBOE shares, bringing our total purchases under our $100 millionshare repurchase program to $78 million. We maintain a debt-free balance sheet, and our strong operations generate significant free cash flow, which we will continue to deploy with a careful balance between reinvesting in the business and distributing excess cash to stockholders through share repurchases and dividends," Dean added.

(1) Represents options market share for CBOE and C2, adjusted to exclude dividend trades.

The table below highlights CBOE Holdings' operating results on a GAAP basis and an adjusted basis for the comparative quarters ended March 31, 2012 and 2011. Financial results presented on an adjusted basis provide supplemental information to measure period-over-period comparisons by adjusting for certain items that are not indicative of the company's core operating performance.

Key Statistics and Financial Highlights:

 

(in millions, except per share and fee per contract)

1Q 2012

1Q 2011

Y/Y Change

Key Statistics:

     

Average Daily Volume (options and futures)

4.88

 

5.08

 

(4)

%

Total Trading Volume (options and futures)

302.7

 

315.0

 

(4)

%

Average Transaction Fee Per Contract

$

0.280

 

$

0.285

 

(2)

%

GAAP Financial Highlights:

     

Total Operating Revenues

$

121.4

 

$

124.0

 

(2)

%

Total Operating Expenses

64.0

 

66.5

 

(4)

%

Operating Income

 

57.4

 

57.5

 

%

Operating Margin %

 

47.3

%

46.4

%

90 bps

Net Income

$

33.4

 

$

32.9

 

2

%

Net Income Allocated to Common Stockholders

$

32.9

 

$

32.1

 

2

%

Diluted EPS

$

0.37

 

$

0.36

 

3

%

Weighted Average Shares Outstanding

88,146

 

90,085

 

(2)

%

Adjusted Financial Highlights (1)

     

Total Operating Expenses

$

63.8

 

$

66.1

 

(3)

%

Operating Income

57.6

 

57.9

 

(1)

%

Operating Margin %

47.5

%

46.7

%

80 bps

Net Income

$

33.5

 

$

33.3

 

1

%

Net Income Allocated to Common Stockholders

$

33.0

 

$

32.5

 

2

%

Diluted EPS

$

0.37

 

$

0.36

 

3

%

(1) A full reconciliation of our non-GAAP results to our GAAP results for the 2012 and 2011 reporting periods is included in the attached tables. See "Non-GAAP Information" in the accompanying financial tables.

 

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