Revenue for the first quarter of 2003 was $17.3 million, representing an increase of 71% from $10.1 million for the first quarter of 2002 and consistent with the $17.3 million for the fourth quarter of 2002. Net income was $0.1 million, or slightly better than breakeven per common share for both the first quarter of 2003 and the first quarter of 2002.
Cash, cash equivalents and short-term investments were $18.9 million as of March 31, 2003 as compared to $21.9 million at December 31, 2002. Cash provided by operating activities was $1.0 million in the first quarter of 2003 as compared to cash used in operating activities of $1.1 million in the first quarter of 2002. Capital expenditures were $1.5 million for the quarter.
"While our customers in our core brokerage market segments have experienced cyclical decline in their revenues, we have been able to replace any lost revenue and increase our market share in those segments. We have laid the foundation for growth by protecting existing revenues while at the same time focusing on entering new market segments offering multiple business services across a single platform." said Peter Kilbinger Hansen, Chief Executive Officer of NYFIX.
"Whatever growth we experienced in some areas of our business during the first quarter was offset either by timing or reduction of capital spending in the brokerage sector, which contributed to our flat quarter of revenue. It seems the sector has reached a bottom plateau. Experiencing good acceleration for new products and market segments, we expect to see positive quarterly revenue increases in the second half of 2003, with potentially strong upside in certain sectors," Mr. Hansen added.
"Although our revenue fell slightly short of guidance, due to lower than anticipated capital sales, we were within our guidance range for EPS. Capital sales continue to be inconsistent. However, we are encouraged by the continued improvement in revenue from our core and transaction products," commented Mark R. Hahn, Chief Financial Officer of NYFIX.
The Company expects revenue for the second quarter of 2003 to be in the range of $17.4 million to $18.0 million. This compares to $13.1 million for the second quarter of 2002 and $17.3 million for the first quarter of 2003. Second quarter income per common share is expected to be in the range of breakeven to $0.02. This compares to a net loss of $(0.10) per common share in the second quarter of 2002 and breakeven per common share for the first quarter of 2003. The Company believes it will achieve quarterly growth in the second half of 2003 in revenue and income. While the Company is focusing on growing its recurring revenue model, capital sales continue to be a component of quarterly revenue and are less predictable, which may have an impact on the consistency of the Company's financial results, as it did in the first quarter of 2003.
The Company is hosting its quarterly earnings call today at 12:00 Noon EDT. The call can be accessed via the Internet at http://www.firstcallevents.com/service/ajwz371547017gf12.html and the Company's website at http://www.nyfix.com. A replay of the conference call will be available via the Company's website.
NYFIX, Inc. through its subsidiaries and affiliates provides electronic trading systems, industry-wide trade routing connectivity, straight-through processing and execution services and systems to the global equities and derivatives financial markets.
NYFIX USA, LLC develops real-time order management trader workstations, exchange automation systems, trade order and execution routing and STP solutions for brokerage firms and other financial institutions. NYFIX USA operates the NYFIX Network, the industry's largest FIX order-routing network, processing between 500 million to 1.2 billion shares of U.S. listed equity securities on a daily basis. NYFIX USA is a pioneer in the adoption of the Financial Information Exchange (FIX) protocol and all its products are FIX-compliant.
NYFIX Transaction Services, Inc., a broker-dealer and NASD member, provides execution and smart order routing solutions primarily to domestic and international broker-dealers and specialized trading firms.
NYFIX Millennium, L.L.C., an 80% owned broker-dealer subsidiary of NYFIX, Inc., is an Alternative Trading System, which provides a real-time, anonymous automated matching system for equity trading. NYFIX Millennium leverages the NYFIX network's large order routing share volume to provide a more efficient liquidity source for the financial community. Outside investors in NYFIX Millennium, L.L.C. include ABN Amro, Banc of America Securities, Deutsche Bank, JP Morgan, Lehman Brothers, Morgan Stanley, Sanford C. Bernstein & Co., SG Cowen Securities Corp., UBS Warburg and Wachovia Securities.
NYFIX Overseas, Inc. specializes in electronic trading solutions for the derivatives markets and develops order management workstations and exchange interface systems, supporting trading on more than 20 of the world's leading international derivatives exchanges. NYFIX Overseas has customers in Europe, the U.S. and the Far East.
Javelin Technologies, Inc. is a leading supplier of electronic trade communication technology and a leading provider of FIX technology. Javelin solutions provide better trading through universal connectivity, streamlining of workflow and elimination of the high costs and risks associated with the development of proprietary network links and protocol implementations.
EuroLink Network, Inc., a Madrid, Spain-based 40% owned affiliate of NYFIX, Inc., offers direct electronic access to the US equity markets from Europe. With a complete suite of order management, outing and execution products and services, EuroLink Network provides traders with superior speed, reliability and security through an established network infrastructure.
Renaissance Trading Technologies, LLC, an 18% owned affiliate of NYFIX, Inc., offers a trader workstation for the Nasdaq market, enabling principal and agency traders to electronically receive orders from multiple sources, execute orders according to best execution principles, route orders to ECN or ATS destinations and manage risk.