Investment Technology Group Reports 2006 Results.2006 Earnings Per Share Increases 38 Percent NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Investment Technology Group, Inc. (NYSE NYSE See: New York Stock Exchange : ITG ITG In the Groove ITG Investment Technology Group ITG Information Technology Group ITG International Trumpet Guild ITG Instituut Voor Tropische Geneeskunde (Dutch: Institute of Tropical Medicine; Antwerp, Belgium) ), a leading provider of technology-based trading services and transaction research, today announced that for the fourth quarter ended December 31, 2006, net income was $22.1 million, compared to net income of $21.4 million in the fourth quarter of 2005. Earnings were $0.49 per diluted share, a decrease of 2 percent versus earnings of $0.50 per diluted share in the fourth quarter of last year. ITG's total revenue for the fourth quarter of 2006 was $153.1 million, 37 percent higher than total revenue of $112.1 million for the fourth quarter of 2005. Net income for the fourth quarter of 2006 included an after-tax charge of $0.6 million, or approximately $0.015 per share, for restructuring costs in ITG's Asia Pacific region. International pre-tax operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , exclusive of this restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , increased to $3.4 million in the fourth quarter of 2006 from $0.4 million in the fourth quarter of 2005. Excluding the impact of the restructuring charge, operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before were $0.51 per diluted share in the fourth quarter of 2006 versus operating earnings of $0.50 per diluted share in the fourth quarter of last year. Pre-tax operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: in the fourth quarter of 2006 were 23.4 percent, compared to 28.2 percent in the fourth quarter of 2005. For the full year 2006, pre-tax operating margins were 25.6 percent, compared to 26.2 percent in 2005. For the year ended December 31, 2006, revenues were $599.5 million, net income was $97.9 million, and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $2.21. Compared to 2005, revenues increased 47 percent, net income grew 45 percent and diluted earnings per share increased 38 percent. Excluding non-operating items, 2006 revenues increased 45 percent, net income grew 38 percent, and earnings per share increased 32 percent over 2005. "In 2006, ITG sustained volume and market share growth across all product lines as we continued to execute our strategy of providing clients with solutions that span the trading continuum while also reinvesting in the business," said Bob Gasser Gas·ser , Herbert Spencer 1888-1963. American physiologist. He shared a 1944 Nobel Prize for research on the functions of nerve fibers. , ITG's Chief Executive Officer and President. "Broader distribution of our Radical and Triton direct market access products continues to feed growth in both the institutional demand for our POSIT (Profiles for Open Systems Internetworking Technologies) A set of voluntary standards published by the National Institute of Standards and Technology (NIST) for network equipment purchased by the U.S. government. It is the successor to GOSIP. anonymous block crossing suite, and algorithmic trading Algorithmic Trading A trading system that utilizes very advanced mathematical models for making transaction decisions in the financial markets. The strict rules built into the model attempt to determine the optimal time for an order to be placed that will cause the least amount of offerings. POSIT 2006 average daily executed volume was 46.9 million shares resulting in a 37% increase over 2005." ITG's International revenues were $33.1 million in the fourth quarter of 2006, 35 percent higher than revenues of $24.5 million in the fourth quarter of 2005. For the full year, international operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. were $118.1 million, representing 28 percent growth over 2005. In 2006, international pre-tax operating income was $9.9 million, up 94 percent from $5.1 million in 2005. "ITG's Canadian revenues grew significantly in 2006, increasing 45 percent over 2005," said Mr. Gasser. "In addition, ITG's European revenues were also a highlight this year, growing 19 percent over 2005 as we moved forward with the globalization globalization Process by which the experience of everyday life, marked by the diffusion of commodities and ideas, is becoming standardized around the world. Factors that have contributed to globalization include increasingly sophisticated communications and transportation of our product line," said Mr. Gasser. Conference Call ITG has scheduled a conference call today at 11:00 a.m. ET to discuss fourth quarter results. Those wishing to listen to the call should dial 1-800-798-2884 and enter the pass code 74289080 at least 10 minutes prior to the start of the call to ensure connection. The conference call and webcast will also be accessible through ITG's web site at http://www.itg.com. For those unable to listen to the live broadcast of the call, a replay will be available for one week by dialing 1-888-286-8010 and entering the pass code 81888202. The replay will be available starting approximately two hours after the completion of the conference call. About Investment Technology Group Investment Technology Group, Inc. (NYSE:ITG), is a specialized agency brokerage and technology firm that partners with clients globally to provide innovative solutions spanning the entire investment process. A pioneer in electronic trading  This article or section is in need of attention from an expert on the subject.Please help recruit one or [ improve this article] yourself. See the talk page for details. , ITG has a unique approach that combines pre-trade analysis, order management, trade execution, and post-trade evaluation to provide clients with continuous improvements in trading and cost efficiency. The firm is headquartered in New York with offices in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Europe and the Asia Pacific regions. For more information on ITG, please visit www.itg.com. In addition to historical information, this press release may contain "forward-looking" statements, as defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, that reflect management's expectations for the future. A variety of important factors could cause results to differ materially from such statements. These factors include the company's ability to achieve expected future levels of sales; the actions of both current and potential new competitors; rapid changes in technology; financial market volatility; general economic conditions in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and elsewhere; evolving industry regulation; cash flows into or redemption from equity funds; effects of inflation; customer trading patterns; and new products and services. These and other risks are described in greater detail in the company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended December 31, 2005, and other documents filed with the Securities and Exchange Commission and available on the company's web site.
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Notes:
(1) In 2006, non-operating revenues relate to:
a) our ownership of two memberships on the New York Stock
Exchange ("NYSE") that as part of their merger with
Archipelago Holdings, Inc. ("Archipelago") were combined
under a new holding company named NYSE Group, Inc. in
which each NYSE member received compensation consisting
of cash and restricted shares of NYSE Group, Inc. common
stock. Accordingly, consideration received for our
memberships in First Quarter 2006 consisted of 157,202
restricted shares of NYSE Group, Inc. common stock
resulting in gains of approximately $6.9 million and
approximately $1.0 million in cash and dividends, which
was recorded as dividend income. In Second Quarter 2006,
we were able to sell a portion of the shares received and
recorded an additional gain of approximately $80,000, and
b) our sale in Second Quarter 2006 of our remaining
interests in a Canadian joint venture that we entered
into in 2004 with IRESS Market Technology Limited
("IRESS"), to IRESS resulting in a gain of $5.4 million.
(2) 2005 non-operating revenue is comprised of gains ($2.5 million)
from our shares of Archipelago Holdings common stock that we
received as part of an equity entitlement program, as well as a
recovery against previous investment write-downs of $0.6 million
for the year.
(3) We recorded a management restructuring charge in our Asia
Pacific Region of $0.9 million in the fourth quarter and $0.5
million in the third quarter for a total of $1.4 million for the
year ended December 31, 2006.
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