eSpeed Reports Fourth Quarter and Full Year 2006 Results.Company Provides Outlook for First Quarter and Full Year 2007 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 -- eSpeed, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : ESPD ESPD Enfants En Situation Particulièrement Difficile (French) ESPD Engine Shutdown Protective Device ), a leading developer of electronic marketplaces and related trading technology for the global capital markets, today reported results for the fourth quarter and full year ended December 31, 2006. Fourth Quarter Earnings eSpeed reported net income of $3.3 million, or $0.06 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the fourth quarter of 2006 based on Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "). To reflect earnings generated from the Company's operations, eSpeed also reported non-GAAP net 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. of $3.1 million, or $0.06 per diluted share. The difference between non-GAAP net operating income and GAAP net income for the quarter occurred primarily due to a September 11th-related government grant of $1.9 million partially offset by a $1.2 million charge for the impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → and capitalized software costs, $0.5 million in patent litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. costs, and a $0.1 million charge related to an office relocation. All of these differences were net of tax. For comparative purposes, eSpeed reported GAAP net income of $0.3 million, or $0.01 per diluted share, for the fourth quarter of 2005. For the same period, eSpeed reported non-GAAP net operating income of $0.9 million, or $0.02 per diluted share. The difference between non-GAAP net operating income and GAAP net income for the fourth quarter of 2005 was due to a gain from insurance proceeds of $1.1 million and a gain of $0.5 million due to the reversal of previously accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. acquisition costs, offset by a $1.6 million charge for the impairment of fixed assets and capitalized software costs, and $0.6 million in costs related to patent litigation, all net of tax. Full Year Earnings eSpeed reported GAAP net income of $4.4 million, or $0.09 per diluted share, for the full year 2006. For the same timeframe, eSpeed reported non-GAAP net operating income of $7.5 million, or $0.15 per diluted share. The difference between non-GAAP net operating income and GAAP net income for the full year 2006 was primarily due to insurance proceeds of $2.1 million, a September 11th-related government grant of $1.9 million, a payment to eSpeed of $0.5 million relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc a litigation settlement, and a $0.2 million net gain related to tax settlements, partially offset by $2.5 million in expenses relating to the relocation of the Company's London offices, $2.0 million in patent litigation costs, $1.3 million in acquisition-related costs, a $1.2 million charge for the impairment of fixed assets and capitalized software costs, $0.7 million in accelerated amortization of capitalized software, and a $0.2 million charitable contribution charitable contribution n. in taxation, a contribution to an organization which is officially created for charitable, religious, educational, scientific, artistic, literary, or other good works. to the Cantor Fitzgerald Cantor Fitzgerald L.P. is a global financial services firm specializing in bond trading, as well as investment banking, asset management, market data and brokerage services. Relief Fund, all net of tax. For comparative purposes, eSpeed reported GAAP net income of $2.0 million, or $0.04 per diluted share for the full year 2005. For the same period, the Company reported non-GAAP net operating income of $7.4 million, or $0.14 per diluted share. The difference between non-GAAP net operating income and GAAP net income for the full year 2005 included a gain from insurance proceeds of $1.1 million and a gain on investment of $0.6 million, partially offset by litigation costs of $3.0 million, $2.1 million in costs associated with the Company's attempt to acquire MTS (1) See Microsoft Transaction Server. (2) (Modular TV System) The stereo channel added to the NTSC standard, which includes the SAP audio channel for special use. 1. MTS - Message Transport System. 2. , $1.6 million in charges related to fixed asset and capitalized software, a charitable contribution of $0.3 million, and $0.2 million in amortization of business partner securities, all net of tax. The increases in quarterly and annual GAAP net income were due primarily to higher GAAP revenues more than offsetting higher GAAP expenses. Fourth Quarter Revenues eSpeed reported GAAP revenues of $44.7 million and non-GAAP 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. of $41.6 million for the fourth quarter of 2006. The difference between GAAP and non-GAAP revenues for the fourth quarter of 2006 was a September 11th-related government grant of $3.1 million. In comparison, the Company's GAAP revenues for the fourth quarter of 2005 were $37.8 million and its non-GAAP revenues were $36.1 million. The difference between GAAP and non-GAAP revenues for the fourth quarter of 2005 was a $1.7 million gain from insurance proceeds. Fully electronic revenues were $18.2 million in the fourth quarter of 2006 compared to $16.5 million for the fourth quarter of 2005. Revenues from software solutions in the fourth quarter of 2006 were $13.3 million versus $10.8 million in the year ago period. Voice- assisted and screen-assisted revenues totaled $7.4 million in the fourth quarter of 2006 compared with $7.0 million in the fourth quarter of 2005. Non-GAAP pre-tax operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: was 11.7 percent in the fourth quarter of 2006. The year over year increase in quarterly GAAP revenues was due primarily to higher revenues from Software Solutions and fully electronic transactions as well as the previously mentioned government grant. Full Year Revenues eSpeed reported GAAP revenues of $164.3 million and non-GAAP operating revenues of $157.3 million for the full year 2006. The difference between GAAP and non-GAAP revenues for the full year 2006 was a gain from insurance proceeds of $3.5 million, a September 11th-related government grant of $3.1 million, and $0.4 million in interest income related to the settlement of a tax-related matter. In comparison, the Company reported GAAP revenues of $152.9 million and non-GAAP operating revenues of $150.2 million for the full year 2005. The difference between GAAP and non-GAAP revenues for 2005 was a $1.7 million gain from insurance proceeds and a gain on investment of $1.0 million. Fully electronic revenues were $69.0 million in the full year 2006 compared to $74.7 million for the full year 2005. Revenues from software solutions in the full year 2006 were $47.4 million versus $41.4 million in the year ago period. Voice- assisted and screen-assisted revenues totaled $31.7 million in the full year 2006 compared with $28.1 million in the full year 2005. Non-GAAP pre-tax operating margin was 7.6 percent for the full year 2006. The increase in annual GAAP revenues was due primarily to higher revenues from Software Solutions, interest income, and screen-assisted transactions, as well as the previously mentioned government grant and higher insurance proceeds more than offsetting lower revenues from fully electronic transactions and the gain on investment. See "Non-GAAP Financial Measures" below for a detailed description of the Company's non-GAAP financial measures. Cash Flow & Cash eSpeed generated cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses of $6.7 million during the fourth quarter of 2006, and $36.8 million for the full year 2006. This compares with $2.0 million during the fourth quarter of 2005 and $27.7 million for the full year 2005. The Company also reports free cash flow, which it defines as cash from operations less net cash used in investing activities, including capital expenditures. eSpeed's free cash flow was ($3.6) million for the fourth quarter of 2006 and $8.6 million for the full year 2006. In comparison, the Company reported free cash flow of ($5.6) million in the fourth quarter of 2005 and ($2.5) million for the full year 2005. Excluding related party receivables and payables, free cash flow was ($3.9) million for the fourth quarter of 2006 and $14.7 million for the full year 2006, compared with ($10.7) million for the fourth quarter of 2005 and ($0.3) million for the full year 2005. eSpeed reported year over year improvements in the above cash flow metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. primarily due to higher revenues. The Company traditionally has lower cash flow during the fourth quarter due to the payment of annual employee bonuses. During the fourth quarter of 2006, eSpeed repurchased approximately 52.2 thousand shares of the Company's stock for approximately $0.5 million, at an average price per share of $8.92. As of December 31, 2006, eSpeed's cash and cash equivalents were approximately $187.8 million. Fourth Quarter Volume and Transactions on the eSpeed System Fully electronic volume on the eSpeed system, excluding new products, was $9.8 trillion for the fourth quarter of 2006, up 30.8 percent from $7.5 trillion in the fourth quarter of 2005. eSpeed's combined voice-assisted and screen-assisted volume for the fourth quarter of 2006 was $14.0 trillion, an increase of 19.4 percent from $11.8 trillion in the fourth quarter of 2005. Fully electronic volume on the eSpeed system for new products, which the Company defines as foreign exchange, interest rate swaps Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. , futures and repos, was $1.3 trillion for the fourth quarter of 2006, up 147.7 percent against the $540 billion reported in the fourth quarter of 2005. Full Year Volume and Transactions on the eSpeed System Fully electronic volume on the eSpeed system, excluding new products, was $38.4 trillion for the full year 2006, up 32.3 percent from $29.0 trillion in 2005. eSpeed's combined voice-assisted and screen-assisted volume for the full year 2006 was $55.7 trillion, an increase of 44.1 percent from $38.7 trillion in 2005. Fully electronic volume on the eSpeed system for new products was $3.8 trillion for the full year 2006, up 103.6 percent against the $1.9 trillion reported in the prior year. "I am pleased by the performance of our U.S. Treasury U.S. Treasury Created in 1798, the United States Department of the Treasury is the government (Cabinet) department responsible for issuing all Treasury bonds, notes and bills. Some of the government branches operating under the U.S. Treasury umbrella include the IRS, U.S. business in the fourth quarter in terms of its strong volume growth and improved competitive market position, both sequentially and year-on-year," said Paul Saltzman, Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of eSpeed. "This demonstrated that our fixed pricing model along with our commitment to innovative technology and excellence in customer service continues to pay off." Outlook For the first quarter of 2007, eSpeed expects to generate non-GAAP operating revenues in excess of $40 million and expects non-GAAP net operating income to be in the range of $0.03 to $0.04 per diluted share. For the full year 2007, eSpeed expects to generate non-GAAP operating revenues of approximately $152 million. The Company expects non-GAAP operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. to be in the range of $146 million to $148 million. eSpeed expects full year 2007 non-GAAP net operating income to be in the range of $0.05 to $0.07 per diluted share. eSpeed expects lower revenue and net income for 2007 primarily due to the expiration of the Wagner patent on February 20, 2007. After this date, the Company will no longer receive revenue from this source. eSpeed recognized $17.9 million in revenue and $8.2 million in non-GAAP net operating income related to the patent in 2006. "We continue to make discretionary investments in technology and staff to support the expected strong growth in revenues from our affiliated voice brokers like BGC BGC General Cable Corporation (stock symbol) BGC Billy Graham Center BGC Baptist General Conference (formerly Swedish Baptist Denomination) BGC Boys & Girls Club BGC Bubblegum Crisis as well as growth from our foreign exchange and futures products," added Howard W. Lutnick, Chairman, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , and President of eSpeed. "In the long run, we expect these investments will allow us to make up for the expired Patent-related revenue." The Company will host a conference call on Wednesday, February 14, 2007 at 8:30 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy , to discuss the above results. To listen to the call via audio webcast, please visit www.espeed.com. Please note: listeners must have a Real Media or Windows Media Microsoft's audio and video framework for Windows, which embraces playback, encoding and streaming. Windows Media Player is the digital jukebox and media player that comes with every version of Windows. plug in and headphones Head-mounted speakers. Headphones have a strap that rests on top of the head, positioning a pair of speakers over both ears. For listening to music or monitoring live performances and audio tracks, both left and right channels are required. or speakers to listen to the webcast. Non-GAAP Financial Measures To supplement eSpeed's consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge presented in accordance with GAAP and to better reflect the Company's quarter-over-quarter and comparative year-over-year operating performance, eSpeed uses non-GAAP financial measures of revenues, net income and earnings per share, which are adjusted to exclude certain expenses and gains. In addition, the Company provides a computation of free cash flow. These non-GAAP financial measurements do not replace the presentation of eSpeed's GAAP financial results but are provided to improve overall understanding of the Company's current financial performance and its prospects for the future. Specifically, eSpeed believes the non-GAAP financial results provide useful information to both management and investors regarding certain additional financial and business trends relating to the Company's financial condition and results from operations. In addition, eSpeed's management uses these measures for reviewing the Company's financial results and evaluating eSpeed's financial performance. For the fourth quarter of 2006, the difference between GAAP net income and non-GAAP net operating income was $0.2 million, net of tax. For the full year 2006, the difference between GAAP net income and non-GAAP net operating income was ($3.1) million, net of tax. eSpeed considers "non-GAAP net operating income" to be after-tax income generated from the Company's continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the excluding certain non-recurring or non-core items such as, but not limited to, asset impairments, litigation judgments, costs or settlements, restructuring charges 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. , costs related to potential acquisitions, charitable contributions, insurance proceeds, business partner securities, gains or losses on investments and similar events. The amortization of patent costs and associated licensing fees (including those made in settlement of litigation) from such patents are generally treated as operating items. Material judgments or settlement amounts paid or received and impairments to all or a portion of such assets are generally treated as non-operating items. Management does not provide guidance of GAAP net income because certain items identified as excluded from non-GAAP net operating income are difficult to forecast. About eSpeed, Inc. eSpeed, Inc. (NASDAQ: ESPD) is a leader in developing and deploying electronic marketplaces and related trading technology that offers traders access to the most liquid, efficient and neutral financial markets in the world. eSpeed operates multiple buyer, multiple seller real-time electronic marketplaces for the global capital markets, including the world's largest government bond markets and other fixed income and foreign exchange marketplaces. eSpeed's suite of marketplace tools provides end-to-end transaction solutions for the purchase and sale of financial products over eSpeed's global private network or via the Internet. eSpeed's neutral platform, reliable network, straight-through processing straight-through processing The direct exchange of cash and securities. Straight-through processing is a major objective for cross-border transactions that are generally much more costly to settle compared to domestic transactions. and superior products make it a trusted source for 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. at the world's largest fixed income and foreign exchange trading Foreign Exchange Trading or FX Trading, clients are able to hedge against, or speculate upon, changes in the exchange rate of two currencies. For example, a speculator can long EUR/USD in foreign exchange market in order to profit from capturing the appreciation of Euro against the firms and major exchanges. For more information, please visit www.espeed.com. Discussion of Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. by eSpeed, Inc. The information in this press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based upon current expectations that involve risks and uncertainties. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Our actual results and the timing of certain events may differ significantly from the results discussed in the forward-looking statements. Factors that might cause or contribute to such a discrepancy DISCREPANCY. A difference between one thing and another, between one writing and another; a variance. (q.v.) 2. Discrepancies are material and immaterial. include, but are not limited to, our relationship with Cantor Fitzgerald and its affiliates, the costs and expenses of developing, maintaining and protecting our intellectual property, including judgments or settlements paid or received and their related costs, the possibility of future losses and negative cash flow from operations, the effect of market conditions, including trading volume Trading volume The number of shares transacted every day. As there is a seller for every buyer, one can think of the trading volume as half of the number of shares transacted. That is, if A sells 100 shares to B, the volume is 100 shares. and volatility, our pricing strategy and that of our competitors, our ability to develop new products and services, to enter new markets, to secure and maintain market position, to enter into marketing and strategic alliances, to hire new personnel, to expand the use of our electronic system, to induce clients to use our marketplaces and services and to effectively manage any growth we achieve, and other factors that are discussed under ''Risk Factors'' in eSpeed'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. filed with the Securities and Exchange Commission. We believe that all forward-looking statements are based upon reasonable assumptions when made; however, we caution that it is impossible to predict actual results or outcomes or the effects of risks, uncertainties or other factors on anticipated results or outcomes and that, accordingly, you should not place undue reliance on these statements. Forward-looking statements speak only as of the date when made, and we undertake no obligation to update these statements in light of subsequent events or developments. Actual results and outcomes may differ materially from anticipated results or outcomes discussed in forward-looking statements. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] Trading Days 2007 Q1 Q2 Q3 Q4 62 63 63 62 2006 Q1 Q2 Q3 Q4 62 63 63 62 2005 Q1 Q2 Q3 Q4 61 64 64 61 |
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