CBOE Holdings, Inc. reports record Third Quarter 2011 volume, revenues and earnings

CBOE Holdings, Inc. reports record Third Quarter 2011 volume, revenues and earnings

03/11/2011

Third Quarter Financial Highlights

  • Operating Revenues Increase 35 Percent to $143.6 Million
  • Adjusted Net Income Allocated to Common Stockholders Increases 69 Percent to $44.7 Million(1); Adjusted Diluted EPS up 92 Percent to $0.50(1)
  • GAAP Net Income Allocated to Common Stockholders was $40.6 Million; Diluted EPS up 125 Percent to $0.45
  • Operating Margin of 52.2 Percent is Highest in Company's History
  • Average Daily Trading Volume Sets New All-Time High, Increases 47 Percent to 5.48 Million Contracts

CBOE Holdings, Inc. (NASDAQ: CBOE) today reported record financial results for the third quarter of 2011, highlighted by strong double-digit growth in revenues, operating income and net income.  The company reported GAAP net income allocated to common stockholders of $40.6 million, or $0.45 per diluted share, compared with $20.0 million, or $0.20 per diluted share in the third quarter of 2010.  On an adjusted basis, net income allocated to common stockholders increased 69 percent to $44.7 million, or $0.50 per share, compared with $26.4 million, or $0.26 per diluted share, in the same period last year.  Operating revenues for the third quarter were $143.6 million, an increase of 35 percent compared to $106.0 million in the third quarter of 2010.

CBOE Holdings' financial results for the three and nine months ended September 30, 2011 and 2010 included certain items and allocations that management believes are not representative of its operating performance.  Financial measures presented on an adjusted basis exclude these items to present a more meaningful comparison.  More information on the adjusted financial measures and a detailed analysis are included in the "Non-GAAP Information."

"We are very proud to report the best quarter in our company's history, with record trading volume, revenues, earnings and operating margins.  These outstanding results reflect the strength of our operating model and the appeal of our broad and unique product offering," said William J. Brodsky, CBOE Holdings Chairman and Chief Executive Officer.  "We are especially pleased with the initial response to SPXpm, which began trading on C2 on October 4, and we look forward to building on its early success.  The successful launch of SPXpm is a prime example of how CBOE's commitment to product development, coupled with a disciplined financial approach, allows us to pursue major product initiatives that leverage our strengths, drive earnings growth and enhance long-term value to our stockholders."

"Our record third-quarter financial results clearly demonstrate the scalability of our operating model, as our operating margin of 52.2 percent was the highest reported in company history, and margins expanded for the fifth consecutive quarter," said Alan J. Dean, CBOE Holdings Executive Vice President and Chief Financial Officer.  "We will continue to manage our business with financial discipline, keeping a tight control on expenses.  Our strong cash flow from operations of $164.3 million through the first nine months of this year compares with $134.9 million for all of last year, and our balance sheet remains debt free.  During the quarter, we purchased $15 million of CBOE shares of the $100 million share buyback authorization, and expect to be opportunistic in making future share repurchases.  We are committed to returning excess cash to stockholders through both stock repurchases and the payment of dividends," Dean added.

For the nine months ended September 30, 2011, the company reported GAAP net income allocated to common stockholders of $105.3 million, or $1.17 per diluted share, on total operating revenues of $387.9 million.  For the comparable period in 2010, the company reported GAAP net income allocated to common stockholders of $67.4 million, or $0.71 per diluted share, on operating revenues of $319.7 million.  On an adjusted basis, net income allocated to common stockholders increased 49 percent to $110.0 million from $73.8 million in the first nine months of 2010, while adjusted diluted earnings per share grew 56 percent to $1.22 from $0.78 in 2010.  

(1) A full reconciliation of CBOE Holdings' non-GAAP results to its GAAP results for the reporting periods is included in the attached tables. See "Non-GAAP Information" in the accompanying financial tables.

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