FCStone Group, Inc. Announces Fourth Quarter and Fiscal Year Results

Kansas City, Missouri, UNITED STATES


KANSAS CITY, Mo., Nov. 13, 2008 (GLOBE NEWSWIRE) -- FCStone Group, Inc. (Nasdaq:FCSX), a commodity risk management firm, today announced higher year-over-year revenues for its fourth fiscal quarter ended August 31, 2008.

Fourth Quarter Results

Revenues, net of cost of commodities sold, a non-GAAP financial measure, were $88.3 million in the three months ended August 31, 2008, compared to $75.8 million in the same prior year quarter, an increase of 16.5%. Net income decreased to $7.4 million, or $0.25 per diluted share, for the fourth quarter, compared to $12.0 million, or $0.42 per diluted share, in the prior year quarter.

Net income from continuing operations decreased to $8.1 million, or $0.28 per diluted share for the fourth quarter, compared to $12.0 million, or $0.42 per diluted share, in the same prior year quarter.

Results for the fourth quarter of 2008 and the fourth quarter of 2007 were affected by the following:



  *  A charge in the fourth quarter of 2008 of $0.8 million,
     equal to $0.03 per diluted share, net of tax in connection
     with the company's decision to freeze all benefit accruals
     under its pension plans.  For the upcoming fiscal year
     2009, we expect to realize a savings of approximately $0.9
     million, net of tax, in pension related expenses related
     to the freezing of the pension plans,
  *  A charge in the fourth quarter of 2008 of $0.7 million,
     equal to $0.03 per diluted share, net of tax in connection
     with the impairment losses from the Green Diesel biodiesel
     plant and losses from the discontinuation of operations of
     such  plant and its disposal,
  *  An effective tax rate for the fourth quarter of 47.5%
     resulting from the year end tax calculations.  The income
     tax calculations for the full year were based on the 2007
     tax return which was filed in June 2008.  As a result of
     the sale of the Company's majority stake of the Grain
     Merchandising segment, the Company realized an approximate
     2.0% increase in the effective state tax rates.  For the
     full fiscal year 2008 the Company's effective tax rate was
     39.5% as a result of these adjustments, and
  *  Amounts for the fourth quarter of 2007, net of tax, of
     $800,000, equal to $0.03 per diluted share, for special or
     one-time items, including 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.

The following table presents results on a total and per share basis.



         
                               Financial Highlights
                   (In thousands, except per share amounts)
                                                             
                      Three Months Ended           Year Ended
                           August 31,               August 31,
                      --------------------     ----------------------
                        2008         2007         2008         2007
                      --------    --------     ---------    ---------
 Non-GAAP Revenues,                                                   
  net of cost of 
  commodities sold
  (1)(3)               $88,227     $75,754      $336,457     $257,757
 Income from                                                
  continuing                                                
  operations before                                         
  income tax                                                
  expense(1)(3)        $15,497     $19,297      $ 78,288     $ 53,588
 Net income from                                            
  continuing                                                
  operations           $ 8,130     $12,097      $ 47,421     $ 33,588
 Loss from                                                  
  discontinued                                              
  operations, net                                           
  of tax               $  (746)    $  (123)     $ (6,829)    $   (311)
 Net income(2)(4)      $ 7,384     $11,974      $ 40,592     $ 33,277
 Diluted weighted                                           
  average shares                                            
  outstanding           28,793      28,753        28,934       25,051
 Diluted earnings                                           
  per share,                                                
  continuing                                                
  operations           $  0.28     $  0.42      $   1.64     $   1.34
 Diluted loss per                                           
  share,                                                    
  discontinued                                              
  operations             (0.03)         --         (0.24)       (0.01)
 Diluted earnings                                           
  per share            $  0.25     $  0.42      $   1.40     $   1.33
                                                            

(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) Amounts for the three months ended August 31, 2008 include $1.5 million charge related to the freezing of all benefit accruals under the Company's pension plan.

(4) Amounts for the three months ended August 31, 2008 include after tax effect of the items noted in (3) above of approximately ($0.8) million.

The increase in fourth quarter revenues, net of cost of commodities sold, from the prior year fourth quarter was driven by higher exchange traded and over-the-counter (OTC) volumes. This growth was primarily related to continued volatility in the grain, energy, metals, and soft commodity markets and higher OTC volumes from our energy, renewable fuels and Brazilian customers. These volumes have been slightly offset by lower interest income due to prevailing market rates, although interest income was positively influenced by higher customer segregated assets and increased margin requirements.

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 and pit brokerage and clearing fees and a $1.5 million charge related to the Company's decision to freeze all benefit accruals under its pension plans. The Company estimates this action will result in an estimated pre-tax savings of $1.5 million in fiscal year 2009.

"Despite the turmoil in the broader economy, FCStone continued along the path of steady growth in our core business segments during our fourth fiscal quarter," said Pete Anderson, President and Chief Executive Officer of FCStone. "Looking back on fiscal 2008, the success and operating results we achieved are evidence of our core business strength and ability to generate improved earnings, growing revenues and strong operating cash flows during unprecedented volatility in many of the markets we serve. A large portion of this growth is attributable to the ability of our risk management consultants to continually react to the changing needs of the customer by identifying new products, structures and solutions to manage their commodity risk. We believe that the Company will continue to advance in the current market environment in all of our core business segments that have been the foundation of FCStone, with steady growth driven by our Commodity and Risk Management Services Segment."

Fiscal Year Results

Revenues, net of cost of commodities sold, a non-GAAP financial measure, were $336.5 million for the fiscal year 2008, compared to $257.8 million during the fiscal year 2007, an increase of 30.5%. Net income increased 21.9% to $40.6 million for the fiscal year 2008, or $1.40 per diluted share, compared to $33.3 million, or $1.33 per diluted share during fiscal year 2007.

Net income from continuing operations increased to $47.4 million, or $1.64 per diluted share for the fiscal year 2008, compared to $33.6 million, or $1.34 per diluted share during the fiscal year 2007.

"It's important to note that unlike previous quarters in 2008, the market interest rate environment remained stable during our fourth fiscal quarter," said Bill Dunaway, Chief Financial Officer. "Taking in to account the current economic headwinds, we believe that this recent quarter shows the resiliency of our business model and our ability to operate in an extremely volatile marketplace. We are pleased to report that both our over the counter and exchange traded contract volumes have continued to exceed expectations and for the second quarter in a row, have put out new record highs. We believe this core business momentum will continue to deliver strong growth for FCStone going forward."

Operating Segments

FCStone's income (loss) from continuing operations 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,
                      ----------------------    ---------------------
                        2008         2007          2008       2007
                        ----         ----          ----       ----
 Segment Data:                        ($ in thousands)
 Income (loss) from 
  continuing 
  operations before
  minority interest
  and income tax 
  expense:
 Commodity and Risk
  Management 
  Services(1)(2)      $  13,272    $ 19,083    $   67,550    $ 45,721
 Clearing and        
  Execution          
  Services(1)(2)          5,089      (1,231)       20,161       9,610
 Financial Services         506          48         1,689       1,052
 Grain Merchandising         --          --            --       2,130
 Corporate and       
  Other(1)(2)            (3,466)      1,397       (11,258)     (4,286)
                      ----------    --------    ----------    --------
                      $   15,401    $ 19,297    $   78,142    $ 54,227
                      ==========    ========    ==========    ========
 Other Data:         
 Non-GAAP -          
  EBITDA(1)           $   17,458    $ 20,557    $   85,989    $ 65,273
 Exchange contract   
  trading volume     
  (000's)                 21,545      20,515        98,611      60,979
 Customer            
  Segregated         
  Assets, end of     
  period(000's)       $1,528,028    $997,436    $1,528,028    $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 the Corporate and Other segment; 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.

(2) Amounts for the three months ended August 31, 2008 include a charge related to the freezing of all benefit accruals under the Company's pension plans in the following segments: $0.9 million in the Commodity and Risk Management Services segment; $0.2 million in the Clearing and Execution segment; and $0.4 million in the Corporate segment.

In the Commodity and Risk Management Services segment, revenues, net of cost of commodities sold, were $49.2 million in the fourth quarter ended August 31, 2008, compared to $45.5 million in the prior year quarter, an increase of 8%. Segment income before minority interest and income tax for the fourth quarter 2008 decreased to $13.3 million, compared to $19 million in the same prior year quarter. This was primarily a result of $2.1 million in lower interest income in 2008 and a $4.2 million gain on CME and CBOT stock in 2007.

For the Clearing and Execution Services segment, revenues, net of cost of commodities sold, were $36.7 million in the fourth quarter ended August 31, 2008, compared to $26.0 million in the prior year quarter, an increase of 41.2%. Segment income before minority interest and income tax was $5.0 million in the fourth quarter, compared to a net loss of $1.2 million in the prior year quarter, resulting from a $5.6 million charge from investments managed by Sentinel Management.

The Financial Services segment reported revenues, net of cost of commodities sold, of $1.3 million in the fourth quarter ended August 31, 2008, compared to $1.6 million in the prior year quarter, a decrease of 19%. Segment income increased to $506 thousand for the fourth quarter, compared to $48 thousand in the prior year quarter.

Our Corporate and Other segment included income primarily from our minority interest in a grain merchandising business during the three months ended August 31, 2008, similar to the same period a year ago.

Business Outlook

Commenting on the Company's fiscal year results and future expectations, Anderson said, "Demand for prudent risk management programs has never been greater, particularly as economic stress points continue to build across virtually every commodity market. We continue to advise and provide value for our customers amidst market conditions of increased volatility and stringent credit conditions. While FCStone is not immune to market volatility and credit risks, we have renewed our focus on providing reliable risk management solutions for our customers, which should provide long-term value to our shareholders."

Conference Call & Web Cast

A conference call will be held today, November 13th, 2008 at 9:00 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) 240-5318 (within the United States and Canada), or (303) 262-2053 (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 Friday, December 12, 2008. 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: 11122158#.

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 8,000 customers and in the 12 months ended August 31, 2008, executed 100.0 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, cotton and textile, dairy 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
                               (Unaudited)
                  (in thousands, except per share amounts)


                           Three Months Ended        Year Ended
                               August 31,            August 31,
                           ------------------   ---------------------
                            2008       2007       2008         2007 
                           -------    -------   --------   ----------
 Revenues:

   Commissions and 
    clearing fees          $46,479    $43,530   $179,188   $  145,077
   Service, consulting
    and brokerage fees      28,904     18,527     97,700       47,679
   Interest                 10,759     11,785     48,294       42,957
   Other                     2,105      1,917     10,372        4,497
   Sales of commodities         14         --      1,972    1,101,752
                           -------    -------   --------   ----------
 Total revenues             88,261     75,759    337,526    1,341,962
                           -------    -------   --------   ----------
 Costs and expenses:
   Cost of commodities
    sold                        34          5      1,069    1,084,205
   Employee compensation
    and broker 
    commissions             19,394     14,900     65,936       49,524
   Pit brokerage and
    clearing fees           30,483     20,796    104,045       67,978
   Introducing broker
    commissions              8,411     10,842     33,304       36,050
   Employee benefits and
    payroll taxes            3,934      2,426     13,746       10,678
   Interest                  1,301        868      5,705        9,937
   Depreciation and
    amortization               660        412      1,996        1,748
   Bad debt expense             93         --      1,998        1,632
   Other expenses            8,550      6,213     31,585       25,983
                           -------    -------   --------   ----------
 Total costs and expenses   72,860     56,462    259,384    1,287,735
                           -------    -------   --------   ----------
 Income from continuing
  operations before 
  income tax expense and 
  minority interest         15,401     19,297     78,142       54,227
 Minority interest             (96)        --       (146)         639
                           -------    -------   --------   ----------
 Income from continuing
  operations before 
  income tax expense        15,497     19,297     78,288       53,588
 Income tax expense          7,367      7,200     30,867       20,000
                           -------    -------   --------   ----------
 Net income from
  continuing operations      8,130     12,097     47,421       33,588
 Loss from discontinued
  operations, net of tax      (746)      (123)    (6,829)        (311)
                           -------    -------   --------   ----------
 Net income                $ 7,384    $11,974   $ 40,592   $   33,277
                           =======    =======   ========   ==========

 
 Basic shares outstanding   27,966     27,419     27,749       24,500
 Diluted shares 
  outstanding               28,793     28,753     28,934       25,051

 Basic earnings (loss)
  per share:
   Continuing operations   $  0.29    $  0.44   $   1.71   $     1.37
   Discontinued 
    operations               (0.02)        --      (0.25)       (0.01)
                           -------    -------   --------   ----------
   Net income              $  0.27    $  0.44   $   1.46   $     1.36
                           =======    =======   ========   ==========

 Diluted earnings (loss)
  per share:
   Continuing operations   $  0.28    $  0.42   $   1.64   $     1.34
   Discontinued operations   (0.03)        --      (0.24)       (0.01)
                           -------    -------   --------   ----------
    Net income             $  0.25    $  0.42   $   1.40   $     1.33
                           =======    =======   ========   ==========



                 FCSTONE GROUP, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                             (Unaudited)
                 (in thousands, except share amounts)

                                             August 31,    August 31,
                                                2008          2007
                                             ----------    ----------

                   ASSETS
 Cash and cash equivalents:
   Unrestricted                              $   73,646    $   90,053
   Segregated                                     8,355        14,250
 Commodity deposits and receivables:
   Commodity exchanges and clearing
    organizations--customer segregated        1,306,477       686,441
   Proprietary commodity accounts               253,998        77,690
   Receivables from customers, net of
    allowance for doubtful accounts              19,603        16,868
                                             ----------    ----------

     Total commodity deposits and
      receivables                             1,580,078       780,999
                                             ----------    ----------

 Marketable securities, at fair value--
  customer segregated and other                 241,333       307,828
 Counterparty deposits and trade accounts
  receivable, net of allowance for doubtful
  accounts                                       71,714        20,746
 Open contracts receivable                      308,016       120,219
 Notes receivable and advances                   77,979        49,291
 Exchange memberships and stock                  11,473        10,366
 Equipment, furniture, software and
  improvements, net of accumulated
  depreciation                                    7,267         4,763
 Assets held for sale                             3,664            --
 Other assets                                    37,953        21,679
                                             ----------    ----------
     Total assets                            $2,421,478    $1,420,194
                                             ==========    ==========


       LIABILITIES AND STOCKHOLDERS' EQUITY
 Liabilities:
 Commodity and customer regulated accounts
  payable                                    $1,486,299    $  935,515
 Trade accounts payable and advances            257,941       115,145
 Open contracts payable                         297,926       121,101
 Accrued expenses                                51,709        38,632
 Notes payable and repurchase obligations        79,190        35,133
 Subordinated debt                               16,000         1,000
                                             ----------    ----------
     Total liabilities                        2,189,065     1,246,526
                                             ----------    ----------

 Minority interest                                4,855            --

 Stockholders' equity:
 Common stock, $0.0001 par value, authorized
  40,000,000 at August 31, 2007 and
  August 31, 2008, respectively; issued and
  outstanding 27,416,567 and 27,911,127
  shares at August 31, 2007 and August 31,
  2008, respectively                            108,016       104,267
 Additional paid-in capital                      10,777         1,115
 Treasury stock                                  (2,185)         (376)
 Accumulated other comprehensive loss            (1,632)       (3,620)
 Retained earnings                              112,582        72,282
                                             ----------    ----------
     Total stockholders' equity                 227,558       173,668
                                             ----------    ----------

 Commitments and contingencies
     Total liabilities and stockholders'
      equity                                 $2,421,478    $1,420,194
                                             ==========    ==========



 
                  FCSTONE GROUP, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (Unaudited)
                            (in thousands)



                                      Year Ended August 31,
                                 ------------------------------------
                                    2008        2007          2006
                                 --------     ---------      --------
 Cash flows from operating 
  activities:
                                                              
   Net income                    $ 40,592     $  33,277      $ 15,257
   Plus: Loss from discontinued                           
    operations                      6,829           311            --
                                 ------------------------------------
                                   
   Income from continuing                                 
    operations                     47,421        33,588        15,257
   Adjustments to reconcile                               
    income from continuing                                
    operations to net cash flows                          
    from operating activities:                            
                                                          
   Depreciation and amortization    1,996         1,748         1,674
   Other                              101           (55)          (46)
   Gain on sale of FGDI                                   
    membership units                   --        (2,595)           --
   Gain on sale and conversion                            
    of exchange memberships,                              
    stock and trading rights       (3,748)       (3,776)           --
   Gain on sale of other assets      (930)           --            --
   Stock compensation               1,698            --            --
   Excess tax benefit of stock                            
    options                        (8,382)           --            --
   Equity in earnings of                                  
    affiliates, net of                                    
    distributions                  (2,533)         (294)          591
   Minority interest, net of                              
    distributions                    (146)          639          (237)
   Change in commodity accounts                           
    receivable/payable,                                   
    marketable securities,                                
    customer segregated funds,                            
    counterparty deposits and                             
    advances, net                 (89,234)      (51,901)        8,328
   Change in open contracts                               
    receivable/payable, net       (10,972)      (21,371)      (30,001)
   Decrease in trade accounts                             
    receivable and advances         1,326         2,989         1,191
   Increase in inventories-                               
    grain, fertilizer and fuel         --        (4,635)      (12,023)
   Increase in other assets         3,945        (5,290)       (3,588)
   Decrease (increase) in trade                           
    accounts payable and                                  
    advances                        5,261        10,018        50,632
   Increase in accrued expenses    11,194        11,176         9,233
                                 ------------------------------------
     Net cash (used in) provided                          
      by operating activities     (43,003)      (29,759)       41,011
                                 ------------------------------------

 Cash flows from investing                                
  activities:                                                        
   Purchase of furniture,                                 
    equipment, software and                               
    improvements                   (4,425)       (2,847)       (1,255)
   Proceeds from the sale of                              
    FGDI membership units, net                            
    of cash held by FGDI               --         3,934            --
   Acquisition of equity                                  
    investment                         --            --        (2,405)
   Acquisition of minority                                
    interest                           --            --          (911)
   Acquisition of businesses       (7,000)           --            --
   Purchase of marketable                                 
    securities                         --       (25,000)           --
   Issuance of notes receivable,                          
    net                           (39,366)      (27,342)       (5,458)
   Purchase of exchange                                   
    memberships and stock              --        (1,855)       (5,403)
   Proceeds from the sale and                             
    conversion of exchange                                
    memberships, stock and                                
    trading rights                  5,164         4,237           613
   Proceeds from the sale of                              
    other intangibles               1,972            --            --
   Purchase of other intangibles   (1,054)           --            --
                                 ------------------------------------
     Net cash used in investing                           
      activities                  (44,709)      (48,873)      (14,819)
                                 ------------------------------------
 Cash flows from financing                                
  activities:                                                        
   (Decrease) increase in checks                          
     written in excess of bank                            
     balance                           --        (1,656)        1,556
   Proceeds from notes payable,                           
    net                            40,729        35,996        11,258
   Proceeds from initial public                           
    offering, net of issuance                             
    and registration costs             --       129,643            --
   Proceeds from issuance of                              
    common stock, net of                                  
    registration costs                 --         1,373            --
   Proceeds from exercises of                             
    stock options                   3,749            --            --
   Proceeds from issuance of                              
    redeemable common stock                               
    held by ESOP                       --            --           223
   Proceeds from issuance of                              
    subsidiary stock, net of                              
    costs                           4,583            --            --
   Payment for redemption of                              
    common stock                       --       (48,496)           --
   Treasury stock acquired         (1,809)           --            --
                                                          
   Excess tax benefit of stock                            
    option exercises                8,382            --            --
   Dividends paid                      --        (6,057)       (2,898)
   Payments under capital lease        --          (413)         (550)
   Proceeds from subordinated                             
    debt                           31,000         9,500         4,500
   Payment of subordinated debt   (16,000)      (14,500)       (3,000)
                                                          
   Monies deposited in escrow          --           (54)       (2,600)
   Monies released from escrow         --         3,623            --
                                 ------------------------------------
     Net cash provided by                                 
      financing activities         70,634       108,959         8,489
                                 ------------------------------------
 Cash flows provided by                                   
  discontinued operations:                                           
   Net cash from operating                                
    activities                      2,382            --            --
   Net cash used in investing                             
    activities                     (1,711)           --            --
                                 ------------------------------------
     Net cash provided by                                 
      discontinued operations         671            --            --
                                 ------------------------------------
 Net (decrease) increase in                               
  cash and cash equivalents                               
  -unrestricted                   (16,407)       30,327        34,681
 Cash and cash equivalents                                
  -unrestricted-                                          
  at beginning of year             90,053        59,726        25,045
                                 ------------------------------------
 Cash and cash equivalents                                
  -unrestricted-at end of year   $ 73,646     $  90,053      $ 59,726
                                 ====================================
 Supplemental disclosures of                              
  cash flow information:                                             
 Cash paid during the year for:                                      
 Interest                        $  6,164     $  10,196      $  5,587
 Income taxes                      26,612        19,632        10,335
                                                          




                    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,
                              2008       2007       2008         2007
                            --------   -------   --------    ---------
                                        ($ in thousands)

 Revenues:
   Commissions and clearing 
    fees                    $ 46,479   $43,530   $179,188   $  145,077
   Service, consulting and                                  
    brokerage fees            28,904    18,527     97,700       47,679
   Interest                   10,759    11,785     48,294       42,957
   Other                       2,105     1,917     10,372        4,497
   Sales of commodities           14                1,972    1,101,752
                                                            
 Total revenues               88,261    75,759    337,526    1,341,962
 Less: Cost of commodities                                  
  sold                            34         5      1,069    1,084,205
                            --------   -------   --------   ----------
                                                            
 Revenues, net of cost of                                   
  commodities sold          $ 88,227   $75,754   $336,457   $  257,757
                            ========   =======   ========   ==========
                                                            
                                                             
   The following table                                       
    reconciles EBITDA with                                   
    our net income.                                          
                      


                           Three Months Ended           Year Ended
                            ------------------   ---------------------
                                 August 31,             August 31,
                              2008       2007       2008         2007
                            --------   -------   --------    ---------
                                        ($ in thousands)
                                                             
                                                                    
 Net income:                $  7,384  $ 11,974  $  40,592    $  33,277
   Plus: interest expense      1,301       868      5,705        9,937
   Plus: depreciation and                                    
    amortization                 660       412      1,996        1,748
   Plus: income tax expense    7,367     7,200     30,867       20,000
   Plus: loss on                                             
    discontinued operations                                  
    net of tax                   746       123      6,829          311
                            --------   -------   --------   ----------
                                                             
 EBITDA                     $ 17,458  $ 20,577  $  85,989    $  65,273
                            ========   =======   ========   ==========




         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,
                               -----------------    ------------------
                                2008       2007      2008        2007
                               ------     ------    -------     ------
                                           ($ in thousands)

 Sales of commodities             $14        $(1)    $1,972     $3,806
 Cost of commodities sold          34          5      1,069      3,727
                               ------     ------    -------     ------
   Gross profit on 
    commodities sold              (20)        (6)       903         79
   Commissions and clearing 
    fees                       15,659     16,277     55,871     54,367
   Service, consulting and 
    brokerage fees             29,033     18,679     98,140     48,227
   Interest                     4,184      6,264     18,972     20,445
   Other revenues (1)             372      4,329      3,475      4,476
                               ------     ------    -------     ------
 Revenues, net of cost of 
  commodities sold             49,228     45,543    177,361    127,594
 Other costs and expenses:
   Expenses (excluding 
    interest expense) (2)      35,596     26,351    109,118     81,480
   Interest expense               360        109        693        393
                               ------     ------    -------     ------
 Total costs and expenses 
  (excluding cost of
   commodities sold)           35,956     26,460    109,811     81,873
                               ------     ------    -------     ------
 Segment income before 
  minority interest and 
  income taxes (1) (2)        $13,272    $19,083    $67,550    $45,721
                              =======    =======    =======    =======
   

 Exchange contract trading
   volume (000's)               1,090        888      3,543      3,121
 OTC Contract volume (000's)      396        288      1,361        751


 (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.

 (2) Includes  ($0.9)  million  charge  related to the freezing of all
 benefit accruals related to the Company's pension plans.



        
                 Clearing and Execution Segment:  
           The following table provides the financial 
                   performance for this segment.

                                Three Months 
                                     Ended              Year Ended
                                   August 31,           August 31,
                              ------------------    ------------------
                               2008        2007      2008        2007
                              ------      ------    -------     ------
                                           ($ in thousands)

 Sales of commodities          $  --       $  --       $ --      $  --
 Cost of commodities sold         --          --         --         --
                              ------     -------    -------     ------
  Gross profit on 
   commodities sold               --          --         --         --
  Commissions and clearing 
   fees                       30,891      27,533    124,070     91,486
  Service, consulting and 
   brokerage fees                 --          --         --         --
  Interest                     5,388       3,985     22,237     15,707
  Other revenues (1)             453     (5,525)        878     (5,420)
                              ------     -------    -------     ------
 Revenues, net of cost of 
  commodities sold            36,732      25,993    147,185    101,773
 Other costs and expenses:
  Expenses (excluding 
   interest expense) (2)      31,631      27,203    126,957     91,570
  Interest expense                12          21         67        593
                              ------      ------    -------     ------
 Total costs and expenses 
  (excluding cost of
  commodities sold)           31,643      27,224    127,024     92,163
                              ------      ------    -------     ------
 Segment income before 
  minority interest and 
  income taxes (1) (2)       $ 5,089   $ (1,231)   $ 20,161    $ 9,610
                             =======   =========   ========    =======

 Exchange contract trading 
  volume (000's)              20,456      19,627     95,068     57,858

 (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

 (2) Includes ($0.2) million charge related to the freezing of all
 benefit accruals related to the Company's pension plans.



         
                      Financial Services Segment:
                The following table provides the financial 
                      performance for this segment.

                                 Three Months 
                                    Ended               Year Ended
                                  August 31,            August 31,
                             ------------------      -----------------
                              2008         2007       2008       2007
                             ------       -----      ------    -------
                                         ($ in thousands)

 Sales of commodities         $  --       $   1      $   --   $20,007
 Cost of commodities sold        --          --          --    19,904
                             ------       -----      ------    -------
  Gross profit on                       
   commodities sold              --           1          --       103
  Commissions and clearing              
   fees                          --          --          --        --
  Service, consulting and               
   brokerage fees                --          --          --        --
  Interest                    1,025       1,118       6,494     7,179
  Other revenues                320         463       2,692     1,798
                             ------       -----      ------    -------
 Revenues, net of cost of              
  commodities sold            1,345       1,582       9,186     9,080
 Other costs and expenses:             
  Expenses (excluding                   
   interest expense)           (122)        723       2,378     2,344
  Interest expense              961         811       5,119     5,684
                             ------       -----      ------    -------
 Total costs and expenses              
  (excluding cost of                   
   commodities sold)            839       1,534       7,497     8,028
                             ------       -----      ------    -------
 Segment income (loss)                 
  before minority interest             
  and income taxes           $  506       $  48      $1,689    $1,052
                             ======       =====      ======    ======


         
                     Quarterly Financial Highlights:
       The following table provides summary financial highlights
           Trending by quarter for fiscal year 2008


                                      Three Months Ended
                           -------------------------------------------
                           Nov. 30,    Feb. 29,    May 31,    Aug. 31,
                             2007        2008       2008       2008
                           -------     -------------------    --------
                                        ($ in thousands)
 NON GAAP-Revenues,
   net of cost of 
   commodities sold        $73,634     $91,212    $83,384     $88,227
 Income from continuing 
  operations before 
  income tax 
  expense  (1)             $21,081     $28,489    $13,221     $15,497
 Net income from 
  continuing
  operations               $13,131     $17,789     $8,371      $8,130
 Loss from 
  discontinued 
  operations, net of 
  tax                         ($46)    ($5,673)     ($364)      ($746)
 Net income                $13,085     $12,116     $8,007      $7,384


 (1) The three months ended November 30, 2007 included a pre-tax gain on  
 the sale of exchange stock and trading rights of $2.9 million. The three 
 months ended November 30, 2007 and February 29, 2008 included pre-tax 
 gains related to interest rate derivative contracts of $0.7 million and 
 $4.4 million, respectively. The three months ended May 31, 2008 included 
 pre-tax losses related to interest rate derivative contracts of $5.0 
 million. The three months ended August 31, 2008 include a pre-tax charge 
 related to the freeze of all benefit accruals in the Company's pension 
 plans.

 Without these items our quarterly income from continuing operations 
 before income tax expense for the first, second, third, and fourth 
 quarters would have been $17.5 million, $24.1 million, $18.2 million, and 
 $17.0 million, respectively.


        

Coordonnées