As a result of the previously announced buy-side initiatives, the Company experienced significant growth in global network and transaction revenue. In the two years since the Company launched its buy-side initiatives, global network and transaction revenue combined have grown to an annualized rate of $35 million. Transaction revenue increased 25% from $4.1 million in the third quarter of 2004 to more than $5.1 million in the fourth quarter with increasing gross profit margins. First quarter 2005 transaction revenue is on pace for further growth. The Company expects to launch a new execution service in May 2005, which it believes will provide additional transaction revenue growth.
For the first quarter of 2005, the Company expects revenue to be in the range of $21.0 million to $23.0 million. However, the Company expects to report a first quarter net loss in the range of $0.03 to $0.09 per common share. The Company is employing a high level of external legal and other professional services at a cost of approximately $2 million in the first quarter of 2005 ($0.06 per common share) to address the Securities and Exchange Commission inquiries, achieve compliance with the Sarbanes-Oxley Act and accomplish business streamlining.
"We are in the midst of implementing a vision change that deals with the balance and relationship between our sell and buy-side business growth opportunities and our central corporate costs. Our primary goals continue to be to restore the Company to profitability, capture growth opportunities and build a franchise with sustained profitability," said Peter Kilbinger Hansen, Chairman and Chief Executive Officer.