KANSAS CITY, Mo., Nov. 15, 2007 (PRIME NEWSWIRE) -- FCStone Group, Inc. (Nasdaq:FCSX), a commodity risk management firm, today announced higher year-over year revenues and net income for its fiscal fourth quarter and year ending August 31, 2007.
Fourth Quarter Results
Revenues, net of cost of commodities sold, a non-GAAP financial measure, were $75.6 million in the three months ended August 31, 2007, compared to $52.7 million in the prior year quarter, an increase of 43%. Net income increased to $12.0 million, or $0.42 per diluted share, for the fourth quarter, compared to $3.9 million, or $0.18 per diluted share, in the prior year quarter.
The following table presents results on a total and per share basis. All shares and per share disclosures in this press release are based on the post split number of shares from the September 17, 2007 three for two stock split.
Financial Highlights
(In thousands, except per share amounts)
Three Months Ended Year Ended
August 31, August 31,
-------------------- --------------------
2006 2007 2006 2007
-------- -------- -------- --------
NON GAAP-Revenues, net
of cost of commodities
sold (1) $ 52,668 $ 75,631 $181,856 $257,446
GAAP-Income after
minority interest and
before income tax
expense (1) $ 6,437 $ 19,174 $ 24,757 $ 53,277
GAAP-Net income (2) $ 3,887 $ 11,974 $ 15,257 $ 33,277
Diluted weighted average
shares outstanding (3) 21,807 28,753 21,749 25,567
Diluted earnings per
share $ 0.18 $ 0.42 $ 0.70 $ 1.30
(1) Amounts for the three months ended and year ended August 31, 2007
include a net amount of $1.2 million for special or one-time items,
which include a $2.6 million gain on the sale of a portion of the
Company's membership units of FGDI, LLC, a $0.5 million dividend
received on Chicago Board of Trade stock, a $3.7 million gain on the
sale of CME Group, Inc. common stock and a loss of $5.6 million from
investments managed by Sentinel Management.
(2) Amounts for the three months ended and year ended August 31, 2007
include after tax effect of the items noted in (1) above of
approximately $0.8 million.
(3) In March 2007, the Company completed its initial public offering,
or IPO, of common stock in which it issued and sold 8,797,500 shares
of common stock and in connection therewith, subsequently redeemed
3,258,442 shares of common stock.
The increase in fourth quarter revenues, net of cost of commodities sold, from the prior year fourth quarter, was primarily related to higher exchange-traded volumes due to continued volatility in the grain and energy markets, higher over-the-counter (OTC) volumes primarily from the renewable fuels and Brazilian customers, increased foreign exchange (Forex) commissions and higher interest income from additional investable segregated and OTC customer margin funds.
Costs and expenses, exclusive of cost of commodities sold, were higher compared to the prior year primarily due to higher volume-related costs of broker commissions, pit brokerage and clearing fees, and introducing broker commissions.
"We are proud of our accomplishments this quarter as well as for the entire fiscal year," said Pete Anderson, President and Chief Executive Officer. "2007 was a year in which we accomplished several significant milestones and achievements. Unprecedented market volatility and the rapid expansion of the renewable energy industry allowed the Company to leverage our core expertise in agricultural commodities and the energy industry to drive record revenue and earnings growth. Furthermore, we continued to build our network of risk management consultants, who drive growth by identifying new products, structures and solutions to manage commodity risk. All of these initiatives helped lay the foundation for long-term growth and added value for our stakeholders."
Year-To-Date Results
Revenues, net of cost of commodities sold, a non-GAAP financial measure, were $257.4 million for the fiscal year 2007, compared to $181.9 million during fiscal year 2006, an increase of 41.6%. Net income increased 118% to $33.3 million for fiscal year 2007, or $1.30 per diluted share, compared to $15.3 million, or $0.70 per diluted share during fiscal year 2006.
"Our strong growth in the fourth quarter was consistent with a year that saw both record revenues and net income for the business," said Bob Johnson, Chief Financial Officer. "As we focus on both our core capabilities in traditional markets as well as increased penetration of new customer segments, we look forward to building upon the strong growth momentum that we have generated over the past year."
Operating Segments
FCStone's income (loss) before minority interest and income tax expense by segment and certain other data are outlined below for the periods noted.
Three Months Ended Year Ended
August 31, August 31,
-------------------- --------------------
2006 2007 2006 2007
-------- -------- -------- --------
Segment Data (1): ($ in thousands)
Income (loss) before
minority interest
and income tax expense:
Commodity and Risk
Management Services (1) $ 6,206 $ 19,083 $ 21,937 $ 45,721
Clearing and Execution
Services (1) 2,498 (1,231) 10,981 9,610
Financial Services 83 48 (19) 1,052
Grain Merchandising 481 -- (430) 2,130
Corporate (1) (2,687) 1,274 (7,938) (4,597)
-------- -------- -------- --------
$ 6,581 $ 19,174 $ 24,531 $ 53,916
======== ======== ======== ========
Other Data:
EBITDA (1) $ 8,267 $ 20,454 $ 32,136 $ 64,962
Exchange contract
trading volume (in
millions) 13.0 20.5 47.5 61.0
Customer Segregated
Assets, end of period $764,847 $997,436 $764,847 $997,436
(1) Amounts for the three months ended and year ended August 31, 2007
include the following special or one-time items by segment: a
$2.6 million gain from the sale of FGDI stock in Corporate; a
$0.5 million dividend received on CBOT stock and a $3.7 million gain
on the sale of CME stock included in the Commodity and Risk Management
Services segment; and a $5.6 million loss from investments managed by
Sentinel Management included in the Clearing and Execution Services
segment.
In the Commodity and Risk Management Services segment, revenues, net of cost of commodities sold, were $45.5 million in the fourth quarter ended August 31, 2007, compared to $24.8 million in the prior year quarter, an increase of 83%. Segment income before minority interest and income taxes for the fourth quarter 2007 increased to $19.1 million, compared to $6.2 million in the prior year quarter. Fourth quarter 2007 segment revenues, net of cost of commodities sold, were $41.3 million and segment income was $14.9 million before the special non-operating income items.
For the Clearing and Execution Services segment, revenues, net of cost of commodities sold, were $26.0 million in the fourth quarter ended August 31, 2007, compared to $22.6 million in the prior year quarter, an increase of 15%. The segment lost $1.2 million in the fourth quarter, compared to a net income of $2.5 million in the prior year quarter. Fourth quarter 2007 segment revenues, net of cost of commodities sold, were $31.6 million and segment income before minority interest and income taxes was $4.4 million before the Sentinel loss.
The Financial Services segment reported revenues, net of cost of commodities sold, of $1.6 million in the fourth quarter ended August 31, 2007, compared to $1.1 million in the prior year quarter, an increase of 42%. Segment income decreased to $48 thousand for the fourth quarter, compared to $83 thousand in the prior year quarter.
As previously announced on June 1, 2007, the Company sold a portion of its membership units in FGDI, LLC, the Grain Merchandising segment, and now owns a 25% minority interest in this business instead of the previous 70% majority interest. Therefore, such business is no longer consolidated in our financial statements.
As noted above, there were several special or one-time transactions in the fourth quarter. Also in the first quarter of FY 2008 the company sold additional CME Stock and CBOE trading rights for a pre-tax gain of approximately $2.8 million in the Commodity and Risk Management Services segment.
Business Outlook
Commenting on the Company's fiscal year results and overall expectations, Anderson said, "We look forward to building upon the growth and profitability generated over the previous year and we intend to leverage the industry dynamics that are in place to drive Company volumes in the future. Many of the strategic initiatives that we have implemented over previous years are just now beginning to gain traction. We look forward to continuing our impressive pace of growth by utilizing our network of risk management consultants and focusing on our mature client base as well as the underserved markets we have identified both domestically and internationally. The Company will also continue to leverage its agricultural and energy experience into new markets where we see opportunity. All of these factors combine to provide a very positive picture for the future of FCStone and we look forward to a successful fiscal 2008 and beyond."
On July 10, 2007, the Board of Directors approved a three-for-two stock split that was distributed in the form of a 50 percent stock dividend. FCStone's stockholders of record at the close of business on September 17, 2007, received one additional share for every two shares of common stock held on that date. The stock split increased the number of shares of FCStone common stock outstanding from approximately 18.3 million to approximately 27.5 million. All shares and per share disclosures in this press release are based upon the post split number of shares.
As a company dedicated to risk management, the Company believes diversification of the personal portfolio risk of our corporate officers, directors, and other designated insiders, is appropriate. As such, the Company's Board of Directors has established stock trading plans in accordance with Securities and Exchange Commission Rule 10b5-1. The Rule 10b5-1 plans allow corporate officers, directors and other designated insiders to diversify their investment portfolios, increase their company stock holdings, spread company stock trades out over a period of time to reduce market impact and avoid concerns about material non-public information they may have when their prearranged 10b5-1 plan sells or purchases stock.
Conference Call & Web Cast
A conference call will be held today, Thursday, November 15, 2007 at 11:00 a.m. (ET). A live web cast of the conference call as well as a replay will be available online on the Company's corporate web site at http://www.fcstone.com. Participants can also access the call by dialing 800-240-2430 (within the United States and Canada), or 303-262-2142 (international callers). A replay of the call will be available approximately two hours after the call has ended and will be available until 11:59 p.m. (CT) on Thursday, November 29, 2007. To access the replay, dial 800-405-2236 (within the United States and Canada), or 303-590-3000 (international callers) and enter the conference ID number: 11101780.
About FCStone Group, Inc.
FCStone Group, Inc., along with its affiliates, is an integrated commodity risk management company providing risk management consulting and transaction execution services to commercial commodity intermediaries, end-users and producers. The firm assists primarily middle market customers in optimizing their profit margins and mitigating exposure to commodity price risk. In addition to risk management consulting services, FCStone, LLC, operates one of the leading independent clearing and execution platforms for exchange-traded futures and options contracts. FCStone Group, Inc., serves more than 7,500 customers and in the 12 months ended August 31, 2007, executed 61.7 million derivative contracts in the exchange-traded and over-the-counter markets. The FCStone Group companies work in all the major commodity areas including agriculture, energy, renewable fuels, foods, forestry, and currency exchange. Headquartered in the Midwest, it has offices located throughout the world and is a clearing member of all major North American Futures exchanges. FCStone Group, Inc., trades on the NASDAQ Global Select Market under the symbol "FCSX."
Forward-Looking Statements
This press release may include forward-looking statements regarding, among other things, our plans, strategies and prospects, both business and financial. All statements other than statements of current or historical fact contained in this press release are forward-looking statements. The words "believe," "expect," "anticipate," "should," "plan," "will," "may," "could," "intend," "estimate," "predict," "potential," "continue" or the negative of these terms and similar expressions, as they relate to FCStone Group, Inc., are intended to identify forward-looking statements.
We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. They can be affected by inaccurate assumptions, including the risks, uncertainties and assumptions described in the Company's filings with the Securities and Exchange Commission. In light of these risks, uncertainties and assumptions, the forward-looking statements in this press release may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. When you consider these forward-looking statements, you should keep in mind these risk factors and other cautionary statements in this press release.
Our forward-looking statements speak only as of the date of this press release. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Use of NON-GAAP Financial Information
In this press release we disclose "revenues, net of cost of commodities sold", and "EBITDA", both of which are non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure, calculated and prepared in accordance with generally accepted accounting principles in the United Sates (GAAP). Revenues, net of cost of commodities sold, is not a substitute for the GAAP measure of total revenues. EBITDA is not a substitute for the GAAP measure of net income or cash flows. Such non-GAAP financial measures are reconciled to its closest GAAP measure, in accordance with the Securities and Exchange Commission rules, and are included in the attached supplemental data. Management believes that these non-GAAP financial measures are useful to both management and its stockholders in their analysis of the company's business and operating performance.
FCSTONE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended Year Ended
August 31, August 31,
---------------------- ----------------------
2006 2007 2006 2007
---------- ---------- ---------- ----------
Revenues:
Commissions and
clearing fees $ 30,987 $ 43,530 $ 105,622 $ 145,077
Service, consulting
and brokerage fees 8,790 18,527 33,388 47,679
Interest 7,897 11,785 23,174 42,957
Other 158 1,794 2,638 4,186
Sales of commodities 269,305 -- 1,129,983 1,101,752
---------- ---------- ---------- ----------
Total revenues 317,137 75,636 1,294,805 1,341,651
---------- ---------- ---------- ----------
Costs and expenses:
Cost of commodities
sold 264,469 5 1,112,949 1,084,205
Employee
compensation and
broker commissions 13,566 14,900 44,229 49,524
Pit brokerage and
clearing fees 13,987 20,796 47,613 67,978
Introducing broker
commissions 7,251 10,842 22,826 36,050
Employee benefits
and payroll taxes 2,509 2,426 9,801 10,678
Interest 1,370 868 5,705 9,937
Depreciation 460 412 1,674 1,748
Bad debt expense 200 -- 1,909 1,632
Other expenses 6,744 6,213 23,568 25,983
---------- ---------- ---------- ----------
Total costs and
expenses 310,556 56,462 1,270,274 1,287,735
---------- ---------- ---------- ----------
Income before income
tax expense and
minority interest 6,581 19,174 24,531 53,916
Minority interest 144 -- (226) 639
---------- ---------- ---------- ----------
Income after minority
interest and before
income tax expense 6,437 19,174 24,757 53,277
Income tax expense 2,550 7,200 9,500 20,000
---------- ---------- ---------- ----------
Net income $ 3,887 $ 11,974 $ 15,257 $ 33,277
========== ========== ========== ==========
Weighted average
shares outstanding:
Basic 21,807 27,419 21,749 24,500
Diluted 21,807 28,753 21,749 25,567
Earnings per share:
Basic $ 0.18 $ 0.44 $ 0.70 $ 1.36
Diluted $ 0.18 $ 0.42 $ 0.70 $ 1.30
FCSTONE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except share amounts)
August 31,
----------------------
2006 2007
---------- ----------
ASSETS
Cash and cash equivalents
Unrestricted $ 59,726 $ 90,053
Restricted 4,010 --
Segregated 14,221 14,250
Commodity deposits and receivables:
Commodity exchanges and clearing
organizations - customer segregated 604,536 686,441
Proprietary commodity accounts 20,133 77,690
Receivables from customers, net of
allowance for doubtful accounts 29,166 16,868
---------- ----------
Total commodity deposits and accounts
receivable 653,835 780,999
---------- ----------
Marketable securities, at fair value -
customer segregated and other 149,609 307,828
Trade accounts receivable 42,176 6,923
Open contracts receivable 37,424 120,219
Counterparty deposits and accounts receivable 23,607 19,610
Notes receivable 14,971 42,368
Inventories - grain and fertilizer 26,628 --
Exchange Stock, available-for-sale -- 2,948
Exchange memberships and stock, at cost 6,587 7,418
Furniture, equipment, software, and
improvements, net 7,386 4,763
Deferred income taxes 4,697 6,736
Investments in affiliates and other
organizations 5,537 7,369
Other assets 6,793 8,710
---------- ----------
Total assets $1,057,207 $1,420,194
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Checks written in excess of bank balance $ 6,436 $ --
Commodity and customer regulated accounts
payable 726,920 935,515
Trade accounts payable and advances 128,349 115,145
Open contracts payable 41,301 121,101
Accrued expenses 26,876 38,632
Repurchase obligation -- 13,594
Notes payable 48,169 21,539
Subordinated debt 7,000 1,000
Obligations under capital leases 3,575 --
---------- ----------
Total liabilities 988,626 1,246,526
---------- ----------
Minority interest 3,607 --
Redeemable common stock held by employee
stock ownership plan (ESOP) 6,079 --
Stockholders' equity:
Common stock, $0.0001 par value, authorized
20,000,000 and 40,000,000 at August 31, 2006
and 2007, respectively; issued and
outstanding 21,805,812 and 27,416,567
shares at August 31, 2006 and 2007 21,747 104,267
Additional paid-in capital 120 1,115
Treasury stock -- (376)
Accumulated other comprehensive loss (1,955) (3,620)
Retained earnings 45,062 72,282
---------- ----------
64,974 173,668
Less maximum cash obligation related to
ESOP shares (6,079) --
---------- ----------
Total stockholders' equity 58,895 173,668
---------- ----------
Commitments and contingencies
Total liabilities and stockholders'
equity $1,057,207 $1,420,194
========== ==========
FCSTONE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year ended
August 31,
----------------------
2006 2007
---------- ----------
Cash flows from operating activities:
Net income $ 15,257 $ 33,277
Depreciation 1,674 1,748
Amortization of discount on note receivable (46) (55)
Gain on sale of FGDI membership units -- (2,595)
Gain on sale of exchange memberships and
stock -- (3,671)
Gain on conversion of exchange membership
to common stock -- (105)
Equity in earnings of affiliates, net of
distributions 591 17
Minority interest, net of distributions (237) 639
Change in commodity accounts
receivable/payable, marketable securities
and customer segregated funds, net (16,186) (55,898)
Change in open contracts receivable/payable,
net (30,001) (21,371)
Decrease in trade accounts receivable and
advances on grain 1,191 2,989
Decrease in counterparty deposits and
accounts receivable 24,514 3,997
Increase in inventories (12,023) (4,635)
Increase in other assets (3,588) (5,290)
Increase in trade accounts payable and
advances 50,632 10,018
Increase in accrued expenses 9,233 11,176
---------- ----------
Net cash provided by (used in) operating
activities 41,011 (29,759)
---------- ----------
Cash flows from investing activities:
Purchase of furniture, equipment, and
improvements (1,255) (2,847)
Proceeds from the sale of FGDI membership
units, net of cash -- 3,934
Acquisition of equity investment (2,405) --
Acquisition of minority interest (911) --
Purchase of marketable securities -- (25,000)
Issuance of notes receivable, net (5,458) (27,342)
Purchase of exchange membership and stock (5,403) (1,855)
Proceeds from the sale of exchange
membership and stock 613 3,859
Proceeds from conversion of exchange
membership to common stock -- 378
---------- ----------
Net cash used in investing activities (14,819) (48,873)
---------- ----------
Cash flows from financing activities:
(Decrease) increase in checks written in
excess of bank balance 1,556 (1,656)
Proceeds from notes payable, net 11,258 35,996
Proceeds from initial public offering, net
of issuance and registration costs -- 129,643
Proceeds from issuance of common stock -- 1,373
Proceeds from issuance of redeemable common
stock held by ESOP 223 --
Payment for redemption of common stock -- (48,496)
Dividends paid (2,898) (6,057)
Payments under capital lease held for sale (550) (413)
Monies deposited in escrow (2,600) (54)
Monies released from escrow -- 3,623
Proceeds from subordinated debt 4,500 9,500
Payments on subordinated debt (3,000) (14,500)
---------- ----------
Net cash provided by financing activities 8,489 108,959
---------- ----------
Net increase in cash and cash equivalents -
unrestricted 34,681 30,327
Cash and cash equivalents - unrestricted -
beginning of period 25,045 59,726
---------- ----------
Cash and cash equivalents - unrestricted -
end of period $ 59,726 $ 90,053
========== ==========
Supplemental disclosures of cash flow
information:
Interest paid $ 5,587 $ 10,164
Income taxes paid $ 10,335 $ 19,632
========== ==========
Noncash financing activities:
Increase (decrease) in maximum cash
obligation related to ESOP shares $ 1,369 $ (6,079)
========== ==========
Non-GAAP Financial Measures
The following table reconciles revenues, net of cost of commodities sold, with our total revenues.
Three Months Ended Year Ended
August 31, August 31,
---------------------- ----------------------
2006 2007 2006 2007
---------- ---------- ---------- ----------
($ in thousands)
Revenues:
Commissions and
clearing fees $ 30,987 $ 43,530 $ 105,622 $ 145,077
Service, consulting
and brokerage fees 8,790 18,527 33,388 47,679
Interest 7,897 11,785 23,174 42,957
Other 158 1,794 2,638 4,186
Sales of commodities 269,305 -- 1,129,983 1,101,752
---------- ---------- ---------- ----------
Total revenues 317,137 75,636 1,294,805 1,341,651
Less: Cost of
commodities sold 264,469 5 1,112,949 1,084,205
---------- ---------- ---------- ----------
Revenues, net of cost
of commodities sold $ 52,668 $ 75,631 $ 181,856 $ 257,446
========== ========== ========== ==========
The following table reconciles EBITDA with our net income.
Three Months Ended Year Ended
August 31, August 31,
---------------------- ----------------------
2006 2007 2006 2007
------- ------- ------- -------
($ in thousands)
Net income: $ 3,887 $11,974 $15,257 $33,277
Plus: interest expense 1,370 868 5,705 9,937
Plus: depreciation and
amortization 460 412 1,674 1,748
Plus income tax expense 2,550 7,200 9,500 20,000
------- ------- ------- -------
EBITDA $ 8,267 $20,454 $32,136 $64,962
======= ======= ======= =======
Commodity and Risk Management Services Segment:
The following table provides the financial performance for this
segment.
Three Months Ended Year Ended
August 31, August 31,
---------------------- ----------------------
2006 2007 2006 2007
---------- ---------- ---------- ----------
($ in thousands)
Sales of commodities $ 6,139 ($1) $ 11,336 $ 3,806
Cost of commodities
sold 5,940 5 11,053 3,727
---------- ---------- ---------- ----------
Gross profit on
commodities sold 199 -6 283 79
Commissions and
clearing fees 12,034 16,277 36,886 54,367
Service, consulting
and brokerage fees 8,939 18,679 33,990 48,227
Interest 3,523 6,264 9,610 20,445
Other revenues (1) 65 4,329 148 4,476
---------- ---------- ---------- ----------
Revenues, net of cost
of commodities sold 24,760 45,543 80,917 127,594
Other costs and
expenses:
Expenses (excluding
interest expense) 18,486 26,351 58,825 81,480
Interest expense 68 109 155 393
---------- ---------- ---------- ----------
Total costs and
expenses (excluding
cost of commodities
sold) 18,554 26,460 58,980 81,873
---------- ---------- ---------- ----------
Segment income before
minority interest
and income taxes (1) $ 6,206 $ 19,083 $ 21,937 $ 45,721
========== ========== ========== ==========
Exchange contract
trading volume
(millions) 0.9 0.9 2.5 3.1
OTC Contract volume 137,682 287,499 326,785 750,909
(1) Includes $4.2 million from the combined gain on the sale of CME
stock and dividends from CBOT stock in the three months ended and
year ended August 31, 2007.
Clearing and Execution Segment:
The following table provides the financial performance for this
segment.
Three Months Ended Year Ended
August 31, August 31,
---------------------- ----------------------
2006 2007 2006 2007
---------- ---------- ---------- ----------
($ in thousands)
Sales of commodities $ -- $ -- $ -- $ --
Cost of commodities
sold -- -- -- --
---------- ---------- ---------- ----------
Gross profit on
commodities sold -- -- -- --
Commissions and
clearing fees 19,095 27,533 69,246 91,486
Service, consulting
and brokerage fees -- -- -- --
Interest 3,468 3,985 10,702 15,707
Other revenues (1) -- (5,525) -- (5,420)
---------- ---------- ---------- ----------
Revenues, net of cost
of commodities sold 22,563 25,993 79,948 101,773
Other costs and
expenses:
Expenses (excluding
interest expense) 19,890 27,203 68,541 91,570
Interest expense 175 21 426 593
---------- ---------- ---------- ----------
Total costs and
expenses (excluding
cost of commodities
sold) 20,065 27,224 68,967 92,163
---------- ---------- ---------- ----------
Segment income before
minority interest
and income taxes (1) $ 2,498 $ (1,231) $ 10,981 $ 9,610
========== ========== ========== ==========
Exchange contract
trading volume
(millions) 12.1 19.6 45.0 57.9
(1) Includes a loss of $5.6 million from investments managed by
Sentinel Management in the three months ended and year ended
August 31, 2007
Financial Services Segment:
The following table provides the financial performance for this
segment.
Three Months Ended Year Ended
August 31, August 31,
---------------------- ----------------------
2006 2007 2006 2007
---------- ---------- ---------- ----------
($ in thousands)
Sales of commodities $ 16,865 $ 1 $ 41,094 $ 20,007
Cost of commodities
sold 16,803 -- 40,906 19,904
---------- ---------- ---------- ----------
Gross profit on
commodities sold 62 1 188 103
Commissions and
clearing fees -- -- -- --
Service, consulting
and brokerage fees -- -- -- --
Interest 668 1,118 3,320 7,179
Other revenues 382 463 1,491 1,798
---------- ---------- ---------- ----------
Revenues, net of cost
of commodities sold 1,112 1,582 4,999 9,080
Other costs and
expenses:
Expenses (excluding
interest expense) 542 723 2,302 2,344
Interest expense 487 811 2,716 5,684
---------- ---------- ---------- ----------
Total costs and
expenses (excluding
cost of commodities
sold) 1,029 1,534 5,018 8,028
---------- ---------- ---------- ----------
Segment income (loss)
before minority
interest and income
taxes $ 83 $ 48 $ (19) $ 1,052
========== ========== ========== ==========
Grain Merchandising Segment:
The following table provides the financial performance for this
segment.
Three Months Ended Year Ended
August 31, August 31,
---------------------- ----------------------
2006 2007 2006 2007
---------- ---------- ---------- ----------
($ in thousands)
Sales of commodities $ 246,301 $ -- $1,077,553 $1,077,939
Cost of commodities
sold 241,884 -- 1,061,557 1,061,017
---------- ---------- ---------- ----------
Gross profit on
commodities sold 4,417 -- 15,996 16,922
Commissions and
clearing fees -- -- -- --
Service, consulting
and brokerage fees -- -- -- --
Interest 268 -- 693 94
Other revenues 272 -- 1,582 1,010
---------- ---------- ---------- ----------
Revenues, net of cost
of commodities sold 4,957 -- 18,271 18,026
Other costs and
expenses:
Expenses (excluding
interest expense) 3,890 -- 15,357 11,414
Interest expense 586 -- 3,344 4,482
---------- ---------- ---------- ----------
Total costs and
expenses (excluding
cost of commodities
sold) 4,476 -- 18,701 15,896
---------- ---------- ---------- ----------
Segment income before
minority interest
and income taxes $ 481 $ -- $ (430) $ 2,130
========== ========== ========== ==========
Quarterly Financial Highlights:
The following table provides summary financial highlights
by quarter for fiscal year 2007.
Three Months Ended
----------------------------------------
Nov. 30, Feb. 28, May 31, Aug. 31,
2006 2007 2007 2007
----------------------------------------
($ in thousands)
NON GAAP-Revenues,
net of cost of
commodities sold $57,348 $60,098 $64,369 $75,631(A)(B)
GAAP-Income after
minority interest
and before income
tax expense $10,114 $11,045 $12,944 $19,174(B)
GAAP-Net income $ 6,314 $ 6,920 $ 8,069 $11,974(B)
(A) The fourth quarter did not include any revenues, net of cost of
commodities sold from the Grain Merchandising segment as the majority
interest in such entity was sold on June 1, 2007.
(B) The fourth quarter included a pre-tax gain on the sale of FGDI of
$2.6 million, a pre-tax gain on the sale of CME stock of $3.7 million,
a special dividend from the CBOT of $0.5 million and a pre-tax loss
on short-term investments with Sentinel Management Group of $5.6
million. Without these items our fourth quarter income after minority
interest and before income tax expense would have been $18.0 million
and Net Income would have been $11.2 million.