CHICAGO, May 15 /PRNewswire-FirstCall/ -- Terra Nova Financial Group, Inc. (BULLETIN BOARD: TNVF) , a leading financial services company specializing in trading and brokerage services, today announced key performance metrics for the first quarter of 2007.
Highlights of financial metrics include:
-- First quarter revenues of approximately $11.9 million, up 1630% from
2006 first quarter revenues of $688,138
-- First quarter earnings, before interest, taxes, depreciation and
amortization (EBITDA), of approximately $1.8 million, or 15% of
revenues
-- First quarter operating income of approximately $1.3 million, up from
2006 first quarter operating loss of $(571,466)
"The company is off to good a start in 2007," commented Mike Nolan, CEO. "Additionally, with a significant amount of the integration behind us, our attention is now solely focused on growing our customer base and product offerings." The 2006 acquisition created a complete financial services offering including a sophisticated trading solution offered through RushGroup Technologies, Inc. and a full-service self clearing agency broker-dealer offering through Terra Nova Financial, LLC.
"Generating EBITDA of $1.8 million demonstrates a significant accomplishment in the Terra Nova integration plan, as well as the leverage that's in our operating model," said Patti Kane, Chief Financial Officer.
First quarter highlights include:
-- March 31st completion of a co-location facility in Chicago to better
service the needs of the overall enterprise infrastructure and reduce
the reliance on third party providers. Beginning with the second
quarter we expect expenses to reduce by $210 thousand per quarter.
Beginning with the third quarter we anticipate an additional
$180 thousand per quarter.
-- Continue to gain synergies from the integration of operational
efficiencies resulting from the 2006 business combination of Terra Nova
Financial, LLC, including internal system conversions for the
enterprise general ledger and external reporting.
-- Significant system functionality was added to Terra Nova's
broker-dealer back office system creating operational efficiencies
particularly as it pertains to option clearing functionality.
-- Implementation of a new RushGroup Technology trading software release
providing the following functionality:
- Provide multi-broker functionality including support for multiple
MPID's & Giveups
- Provide private-label platforms for banks and brokerages
- Creation of a flexible hierarchy to manage multiple customer
accounts
- Reduced latency in delivering market data
- Enhanced order handling architecture
Since its integration with Terra Nova in September 2006, RushGroup's transaction volume increased 45% by the end of the Q1 2007. Nolan adds, "The latest enhancements to our trading software uniquely position Terra Nova to provide value added solutions for our diverse customer base of introducing broker-dealers, registered investment advisors, active traders and hedge funds."
FINANCIAL STATEMENTS - Unaudited
TERRA NOVA FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
ASSETS 2007 2006
(Unaudited)
Cash and cash equivalents $1,231,834 $5,733,813
Cash segregated in compliance with
federal regulations 138,191,785 156,751,025
Receivables from brokers, dealers and
clearing organizations 84,813,819 55,397,271
Receivables from customers and
non-customers 51,330,456 56,969,549
Property and equipment, net 1,059,660 614,746
Capitalized software development costs,
net 1,943,544 1,754,114
Intangible assets, net 6,044,726 6,221,871
Goodwill 9,583,480 9,583,480
Other assets 2,323,676 1,693,392
Total assets $296,522,980 $294,719,261
LIABILITIES AND SHAREHOLDERS' EQUITY
Line of credit $15,970,000 $18,625,000
Payables to brokers, dealers and
clearing organizations 1,189,185 911,261
Payables to customers and non-customers 240,828,567 238,622,993
Accounts payable and accrued expenses
(including $52,866 and $49,611 of
accrued interest due to related parties
at March 31, 2007 and December 31, 2006,
respectively) 5,602,221 5,074,011
Accrued preferred stock dividends 272,817 258,520
Income tax liability 440,070 -
Convertible notes payable 300,000 300,000
Convertible bonds payable (net of
unamortized debt discount of $2,704
and $8,853 at March 31, 2007 and
December 31, 2006, respectively) 327,296 321,147
Total liabilities 264,930,156 264,112,932
Commitments and contingencies
Shareholders' equity
Preferred stock - cumulative; $10 par
value; 38,792 shares authorized;
14,063 shares issued and outstanding
at March 31, 2007 and December 31,
2006; liquidation preference of $10
per share 140,630 140,630
Preferred stock - convertible
cumulative; $10 par value; 835,000
shares authorized; 49,480 shares issued
and outstanding at March 31, 2007
and December 31, 2006; liquidation
preference of $10 per share 494,800 494,800
Common stock - $0.01 par value,
800,000,000 shares authorized;
271,863,564 and 271,842,939 shares
issued and outstanding at March 31,
2007 and December 31, 2006, respectively 2,718,636 2,718,429
Additional paid-in capital 49,731,070 49,616,099
Accumulated deficit (21,492,312) (22,363,629)
Total shareholders' equity 31,592,824 30,606,329
Total liabilities and
shareholders' equity $296,522,980 $294,719,261
TERRA NOVA FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
2007 2006
REVENUES (Unaudited) (Unaudited)
Commissions and fees $8,169,553 $635,230
Interest income 3,499,050 4,744
Software fees 103,119 33,066
Other income 134,282 15,098
Total revenues 11,906,004 688,138
OPERATING EXPENSES
Commissions, execution and exchange
fees 2,726,290 321,202
Employee compensation 2,392,612 397,310
Quotations and market data 1,471,349 114,327
Interest expense on brokerage
accounts 1,985,529 -
Advertising and promotional 241,617 6,774
Professional fees 417,619 97,027
Communications and information
technology 187,474 61,637
Depreciation and amortization 378,035 105,714
Other general and administrative
expense 769,265 93,419
Total operating expenses 10,569,790 1,197,410
Operating income (loss) 1,336,214 (509,272)
Interest expense 24,827 47,333
Income (loss) before income taxes 1,311,387 (556,605)
Income tax liability 440,070 -
Net income (loss) $871,317 $(556,605)
Dividends on preferred stock (14,297) (14,860)
Net income (loss) attributable to
common shareholders $857,020 $(571,465)
Net income (loss) per common share:
Basic $0.00 $(0.02)
Diluted $0.00 $(0.02)
Weighted average number of common
shares:
Basic 271,854,446 37,474,489
Diluted 278,181,836 37,474,489
About Terra Nova Financial Group, Inc.
Terra Nova Financial Group, Inc. operates through two wholly owned subsidiaries, Terra Nova Financial, LLC (member NASD, NFA, SIPC, NYSE Arca, ISE, BOX, NSX, BSE and CHX) and RushGroup Technologies Inc.
Terra Nova Financial, LLC is a self-clearing agency broker-dealer and futures commission merchant offering to brokers, institutions and individuals a broad suite of trading products including equities, options, ETFs, futures, forex, fixed income and mutual funds. Terra Nova provides market access order execution, superior customer support and comprehensive clearing services to professional traders and investors.
Terra Nova, through RushGroup, offers innovative proprietary trading platforms for active, professional and institutional traders, with advanced order routing technology and desktop customization capabilities that provide the client with the best trading tools possible.
Terra Nova is headquartered is Chicago with a sales presence in New York and San Francisco.
All statements in this presentation that are not historical are forward-looking statements. These statements relate to future events or our future financial performance and involve known and unknown risks. Such forward-looking statements may be identified by words such as "believe," "anticipate," "should," "intend," "plan," "will," "expect," "estimate," "project," "strategy," or similar statements. statements reflect the Company's current views concerning future events, these forward-looking statements are subject to risks and uncertainties. These statements are based upon assumptions and assessments made by our management in light of their experience and perception of historical trends, current conditions, expected future developments and other factors our management believes appropriate. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in these forward-looking statements, including, without limitation, our ability to achieve profitable operations and to maintain sufficient cash to operate our business and meet our liquidity requirements; our ability to obtain financing, if required, on terms acceptable to us, if at all; the success of our research and development; competitive developments affecting our current products; our ability to successfully attract strategic partners and to market both new and existing products; exposure to lawsuits and regulatory proceedings; our ability to protect our intellectual property; governmental laws and regulations affecting operations; our ability to identify and complete diversification opportunities; the impact of acquisitions, divestitures, restructurings, product withdrawals and other unusual items; and other factors detailed from time to time in our filing with the Securities and Exchange Commission. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Contact Information
For more information about Terra Nova's brokerage and clearing services, please visit http://www.terranovafinancial.com/. For more information about Terra Nova's technology offering, please visit http://www.rushgroup.com/.
Investor Relations: Brooke Hoffmann, 1-312-827-3602
Media Contact: Christopher Hartman, 1-312-827-3695
