RYE BROOK, N.Y., Oct. 19, 2001 (PRIMEZONE) -- Hoenig Group Inc., (Nasdaq:HOEN) today reported financial results for the three- and nine-month periods ended September 30, 2001.
Three Months Ended September 30, 2001
Operating revenues for the quarter ended September 30, 2001 increased 4.2% to $23.5 million, as compared to $22.5 million for the same period in 2000. Global brokerage revenues for the quarter increased 11.4% to $21.7 million from $19.5 million during the same period last year, based on a 17.1% increase in domestic brokerage revenues to $19.5 million. International brokerage revenues for the third quarter 2001 decreased 22.0% to $2.2 million from $2.8 million for the same period in 2000. Investment management fees decreased 42.0% in the third quarter 2001 to $1.8 million, as compared to $3.0 million for the same period in 2000.
Operating income for the third quarter 2001 decreased 39.5% to $1.3 million from $2.2 million for the same period in 2000. This decline resulted from a 65.8% ($0.8 million) decline in the operating income of the Company's asset management operations and an operating loss of $0.4 million from international brokerage operations. These declines were partially offset by a 17.5% ($0.3 million) increase in operating income of the Company's domestic brokerage operations.
Net investment income was $0.3 million in the third quarter 2001, as compared to $5.6 million during the same period in 2000. Net investment income for the third quarter 2001 includes a net investment loss of $0.2 million relating to the Company's ownership of publicly traded shares of the Hong Kong Exchanges and Clearing Limited and of the London Stock Exchange. The Company values these shares at market. Investment income for the third quarter 2000 includes $4.7 million in realized and unrealized gains on the Hong Kong and London shares.
Net income for the third quarter decreased to $0.8 million from $5.3 million for the same period in 2000. Net income for the third quarter 2001 includes an investment loss of $0.2 million, as compared to investment income of $3.4 million for the third quarter 2000, related to the Hong Kong and London shares. Net income excluding the value of the Hong Kong and London shares was $0.9 million for the third quarter 2001, as compared to $1.9 million during the same period in 2000.
The Company's basic earnings per share for the third quarter ended September 30, 2001 decreased to $0.10, as compared to $0.65 for the same period in 2000. Diluted earnings per share decreased to $0.09, as compared to $0.58 in the third quarter 2000.
Nine Months Ended September 30, 2001
Operating revenues for the nine months ended September 30, 2001 increased to $73.5 million from $73.4 million for the same period in 2000. Global brokerage revenues increased 5.6% to $67.6 million from $64.1 million during the first nine months of 2000. The Company's domestic brokerage revenues for the first nine months 2001 increased 11.8% to $60.0 million, as compared to $53.4 million during the same period in 2000. However, this increase was partially offset by a 25.6% decrease in international brokerage revenues to $8.0 million. Investment management fees for the nine months ended September 30, 2001 decreased 37.8% to $5.8 million, as compared to $9.3 million for the same period in 2000.
Operating income for the nine months ended September 30, 2001 decreased 23.9% to $5.1 million, as compared to $6.7 million during the same period in 2000. Operating income for the nine months ended September 30, 2000 includes a $1.0 million one-time charge related to the closing of the Company's Tokyo brokerage office in June 2000. The decrease in operating income for the nine months ended September 30, 2001 is primarily attributable to a 59.3% decline in operating income from the Company's asset management operations and a 10.1% greater operating loss from international brokerage operations. The decline in results from asset management and international brokerage operations more than offset an increase in operating income from domestic brokerage operations during the period. Operating income of domestic brokerage operations increased 6.1% to $7.4 million during the nine months ended September 30, 2001.
The Company had a net investment loss of $5.9 million for the nine months ended September 30, 2001, as compared to net investment income of $7.6 million during the same period in 2000, due to the first quarter pre-tax write-off of $9.3 million relating to the Company's investment in InstiPro Group, Inc. Net investment income before the write-off was $3.3 million for the nine months ended September 30, 2001. Net investment income for the first nine months 2001 includes $1.3 million related to the Company's Hong Kong and London shares. Net investment income for the same period in 2000 includes $5.5 million related to the Hong Kong and London shares.
The Company incurred a net loss for the nine months ended September 30, 2001 of $0.6 million, as compared to net income of $9.5 million for the same period in 2000, due to the $5.5 million after tax write-off of the InstiPro investment in the first quarter of 2001. Net income for the nine months ended September 30, 2001 before the write-off was $5.0 million.
The Company's basic earnings per share for the nine months ended September 30, 2001 decreased to $0.63 from $1.16, and diluted earnings per share decreased to $0.56 from $1.05 for the same period in 2000, excluding the first quarter 2001 InstiPro write-off. Due to the write-off, the Company incurred a net loss per share of $0.07 both basic and diluted for the nine months ended September 30, 2001.
At September 30, 2001, the Company had cash, U.S. government obligations, net accounts receivables and other investments of $60.3 million, as compared to $58.1 million as of September 30, 2000 and $56.8 million as of June 30, 2001.
For over thirty years, Hoenig Group Inc. has provided high quality trade execution, independent research and premier client service to professional money managers and alternative investment funds throughout the world. Hoenig Group Inc. operates through its brokerage subsidiaries in the United States, United Kingdom and Hong Kong. Hoenig Group's U.S. asset management subsidiary, Axe-Houghton Associates, Inc., provides investment management services to public and corporate employee benefit plans, investment partnerships and other institutional investors.
This press release contains forward-looking statements that relate to future plans, events and performance. These forward-looking statements involve risks and uncertainties. These risks and uncertainties are set forth in the Company's periodic reports and other filings with the Securities and Exchange Commission. Forward-looking statements reflect the Company's current views with respect to future events. Actual events and results may vary materially and adversely from those anticipated, believed, estimated or otherwise indicated.
Financial Data Three Months Ended September 30,
2001 2000
----------- -----------
Operating Revenues 23,483,675 $22,529,304
Operating Income 1,303,561 2,153,935
Net Investment Income and
other(1) 286,991 5,593,630
Income before Income Taxes 1,590,552 7,747,565
Net Income 760,940 (2) 5,266,521 (2)
Earnings Per Share
Basic .10 .65 (2)
Diluted .09 .58 (2)
Weighted average shares
- Basic 7,910,840 8,064,935
Weighted average shares
- Diluted 8,895,982 9,039,975
(1) For the three months ended September 30, 2001, includes an
investment loss of $0.2 million related to the ownership of
publicly traded shares of the Hong Kong Exchanges and Clearing
Limited and of the London Stock Exchange. For the three months
ended September 30, 2000, includes investment income of $4.7
million related to the Hong Kong and London shares.
(2) Includes $0.2 million after tax ($0.02 per share basic and $0.02
per share diluted) for the third quarter 2001 and $3.4 million
after tax ($0.42 per share basic and $0.37 per share diluted) for
the third quarter 2000 related to the Hong Kong and London
shares.
Financial Data Nine Months Ended September 30,
2001
2001 Adjusted(1) 2000
---- ---------- ----
Operating Revenues 73,454,837 73,454,837 $73,409,530
Operating Income 5,091,135 5,091,135 6,692,029 (2)
Net Investment (Loss)
Income and Other(3) (5,944,818) 3,347,589 7,621,912
(Loss) Income before
Income Taxes (853,683) 8,438,724 14,313,941
Net (Loss) Income (560,377) 4,977,635 9,471,296
(Loss) Earnings Per
Share (4)
Basic (.07) .63 1.16
Diluted (.07) .56 1.05
Weighted average
shares - Basic 7,907,169 7,907,169 8,134,915
Weighted average
shares - Diluted 7,907,169 8,946,815 9,045,059
(1) Represents financial results for the nine months ended September
30, 2001 excluding the $9.3 million ($5.5 million after tax)
impairment write-off of the Company's investment in InstiPro
Group, Inc.
(2) Included in the financial results for the nine months ended
September 30, 2000 is a $1.0 million ($0.6 million after tax)
one-time charge related to the closing of the Company's Tokyo
brokerage office.
(3) For the nine months ended September 30, 2001, includes investment
income of $1.3 million related to the Hong Kong and London
shares. For the nine months ended September 30, 2000, includes
investment income of $5.5 million related to the Hong Kong and
London shares.
(4) In computing per share amounts under a net loss, common stock
equivalents are not included in the calculation as it would
result in anti-dilution. For the nine months ended September 30,
2001, includes $0.13 per share basic and $0.11 per share diluted
relating to the Company's ownership of the Hong Kong and London
shares. For the nine months ended September 30, 2000, includes
$0.52 per share basic and $0.47 per share diluted relating to the
Company's ownership of the Hong Kong and London shares.