CHICAGO, Aug. 13 /PRNewswire-FirstCall/ -- Terra Nova Financial Group, Inc. (BULLETIN BOARD: TNFG) , a leading financial services technology company specializing in trading and brokerage services, today announced key performance metrics for the second quarter of 2007, including revenues of $13.3 million and $25.2 million and operating income of approximately $900 thousand and $2.2 million for the three and six months ended June 30, 2007, respectively. Results in the second quarter and year to date periods continue to benefit from growth in higher margin options and futures products as well as tight expense controls.
"Our entire management team at Terra Nova is focused on enhancing our proprietary technologies to better serve our diverse and growing customer base. We have made significant gains in the 14 months since our merger with Rush and we are prepared to leverage our infrastructure to capture new opportunities," commented Mike Nolan, CEO.
Pro forma(1) financial highlights include:
-- Net income per share of $0.01 for the second quarter of 2007 compared
to a pro forma loss of ($0.06) per share in the second quarter of 2006.
-- Second quarter 2007 operating income of approximately $900 thousand, up
from a pro forma loss of ($1.4 million) for Q2 2006.
-- Year-to-date 2007 net income before income taxes of approximately
$2.2 million, up from a pro forma loss of ($1.2 million) for six months
ended June 2006.
-- Year to date earnings before interest, taxes, depreciation, and
amortization (EBITDA) of $3.4 million up from a pro forma loss of
approximately ($405 thousand) for six months ended June 2006.
GAAP financial highlights include:
-- Total revenues for the second quarter of 2007 of $13.2 million
increased 37%, as compared to $9.6 million in the comparable period in
2006.
-- Second quarter 2007 EBITDA was of approximately $1.6 million,
representing 12% of revenues.
-- 2007 year-to-date revenues of approximately $25.1 million, up 142% from
June ended 2006 year-to-date revenues of $10.3 million.
-- 2007 year-to-date EBITDA of approximately $3.4 million represents a
14% margin on total revenues.
-- 2007 year-to-date operating income of approximately $2.2 million, up
from June ended 2006 year-to-date operating loss of ($1.8 million).
"Our six month EBITDA results of $3.8 million or 14% demonstrates the continued accomplishment of the Terra Nova integration plan, as well as the efficiencies in our operating model," said Patti Kane, Chief Financial Officer.
Other recent highlights include: -- Terra Nova Financial, LLC was recognized as the Emerging Broker of the Year as part of the Emerging Manager Summit Award, presented by Opal Financial Group and Focus Point Media. -- March 31st marked the successful completion of our co-location facility in Chicago enabling improved performance of our enterprise infrastructure and further reducing the reliance on third party providers. -- Second quarter 2007 revenues were up $1.35 million, or up 11% over first quarter 2007. -- We augmented our management team with the addition of Cristian Doloc, Terra Nova's Chief Technology Officer, who will lead development efforts for the Company's proprietary trading and clearing systems. -- Completed a 1 for 10 reverse stock split on August 1, 2007. -- 2007 year-to-date revenue per employee of approximately $265K, based on 95 full time equivalents. -- Rush Group Technology's user base increased 5% in Q2 2007 and is up 25% YTD. (1) See Pro forma Statement of Operations - Unaudited - Note 1 FINANCIAL STATEMENTS - Unaudited Terra Nova Financial Group, Inc. Pro forma Statement of Operations - Unaudited Three Months Ended Six Months Ended June 30, June 30, 2007 2006 2007 2006 Revenues $13,258,551 $13,793,030 $25,164,555 $27,796,323 Operating income (loss) 899,721 (1,440,506) 2,235,937 (1,180,082) Other income (expense) Interest expense 17,687 159,293 42,514 206,626 Net Income (loss) before Income taxes $882,034 $(1,599,799) $2,193,423 $(1,386,708) Beneficial conversion feature on preferred stock warrants Income tax provision 516,076 956,146 Net income (loss) 365,958 (1,599,799) 1,237,277 (1,386,708) Dividends on preferred stock (14,297) (14,672) (28,594) (29,531) Net income (loss) attributable to common shareholders (Note 1) $351,661 $(1,614,471) $1,208,683 $(1,416,239) Net income (loss) per share attributed to common shareholders, basic and diluted $0.01 $(0.06) $0.04 $(0.05) Weighted average common shares outstanding, basic 27,187,428 27,103,330 27,186,490 27,100,445 Weighted average common shares outstanding, diluted 27,690,626 27,103,330 27,869,997 27,100,445 Note 1 The following adjustments have been made in order to present second quarter 2007 and six months ended June 2007 and compare such results with similar periods for 2006: a) Adjustments have been made to present pro forma results, as if the May 17, 2006 acquisition (which included Terra Nova Financial, LLC) had occurred on January 1, 2006 b) The Company's common stock from the May 19, 2007 equity financing was outstanding as of June 30, 2006 c) The common shares are adjusted as if the 1-for-10 reverse stock split had occurred d) The beneficial conversion feature of approximately $23.7 million on preferred stock is excluded FINANCIAL STATEMENTS - Unaudited, continued TERRA NOVA FINANCIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (on a GAAP basis) Three Months Ended Six Months Ended June 30, June 30, 2007 2006 2007 2006 REVENUES (Unaudited) (Unaudited) (Unaudited) (Unaudited) Commissions and fees $9,066,084 $7,574,334 $17,235,637 $8,209,564 Interest income 3,939,233 2,024,365 7,438,284 2,029,109 Software fees 144,667 29,273 247,785 62,340 Other income 108,567 48,072 242,849 63,170 Total revenues 13,258,551 9,676,044 25,164,555 10,364,183 OPERATING EXPENSES Commissions, execution and exchange fees 3,659,734 3,849,191 6,386,024 4,170,393 Employee compensation 2,860,162 2,936,420 5,252,774 3,333,730 Quotations and market data 1,396,542 1,158,471 2,867,890 1,272,798 Interest expense on brokerage accounts 1,687,197 915,645 3,672,726 915,645 Advertising and promotional 249,033 179,151 490,651 185,925 Professional fees 564,558 278,248 982,177 375,275 Communications and information technology 238,463 199,534 425,938 261,172 Depreciation and amortization 450,165 518,780 828,201 624,494 Other general and administrative expense 1,252,975 902,241 2,022,237 999,996 Total operating expenses 12,358,830 10,937,681 22,928,618 12,139,429 Operating income (loss) 899,721 (1,261,637) 2,235,937 (1,775,246) Interest expense 17,687 153,100 42,514 196,097 Income (loss) before income taxes 882,034 (1,414,737) 2,193,423 (1,971,343) Income tax provision 516,076 - 956,146 - Net income (loss) $365,958 $(1,414,737) $1,237,277 $(1,971,343) Beneficial conversion feature on preferred stock - (23,699,816) - (23,699,816) Dividends on preferred stock (14,297) (14,672) (28,594) (29,531) Net income (loss) attributable to common shareholders $351,661 $(25,129,225) $1,208,683 $(25,700,690) Net income (loss) per common share: Basic $0.01 $(6.67) $0.04 $(6.82) Diluted $0.01 $(6.67) $0.04 $(6.82) Weighted average number of common shares: Basic 27,187,428 3,769,995 27,186,490 3,767,110 Diluted 27,690,626 3,769,995 27,869,997 3,767,110 FINANCIAL STATEMENTS - Unaudited, continued TERRA NOVA FINANCIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 30, December 31, ASSETS 2007 2006 (Unaudited) Cash and cash equivalents $2,894,694 $5,733,813 Cash segregated in compliance with federal regulations 137,209,642 156,751,025 Receivables from brokers, dealers and clearing organizations 27,452,141 55,397,271 Receivables from customers and non-customers 43,061,187 56,969,549 Property and equipment, net 929,037 614,746 Capitalized software development costs, net 1,838,474 1,754,114 Intangible assets, net 5,869,458 6,221,871 Goodwill 9,583,480 9,583,480 Other assets 2,419,220 1,693,392 Total assets $231,257,332 $294,719,261 LIABILITIES AND SHAREHOLDERS' EQUITY Line of credit $1,291,000 $18,625,000 Payables to brokers, dealers and clearing organizations 1,572,799 911,261 Payables to customers and non-customers 189,114,640 238,622,993 Accounts payable and accrued expenses (including $56,157 and $49,611 of accrued interest due to related parties at June 30, 2007 and December 31, 2006, respectively) 5,377,515 5,074,011 Accrued preferred stock dividends 287,114 258,520 Income tax liability 956,146 - Convertible notes payable 133,333 300,000 Convertible bonds payable (net of unamortized debt discount of $1,803 and $8,853 at June 30, 2007 and December 31, 2006, respectively) 328,197 321,147 Total liabilities 199,060,744 264,112,932 Commitments and contingencies Shareholders' equity Preferred stock - cumulative; $10 par value; 38,792 shares authorized; 14,063 shares issued and outstanding at June 30, 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 June 30, 2007 and December 31, 2006; liquidation preference of $10 per share 494,800 494,800 Common stock - $0.01 par value, 150,000,000 shares authorized; 27,191,462 and 27,184,294 shares issued and outstanding at June 30, 2007 and December 31, 2006, respectively 271,915 271,843 Additional paid-in capital 52,415,597 52,062,685 Accumulated deficit (21,126,354) (22,363,629) Total shareholders' equity 32,196,588 30,606,329 Total liabilities and shareholders' equity $231,257,332 $294,719,261 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, DTCC, OCC, NYSE Arca Equities, NYSE Arca Options, NASDAQ, 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 in 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
