UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) 05/01/2007 (05/01/2007)
NYMEX Holdings, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 333-30332 | 13-4098266 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
| One North End Avenue, World Financial Center, New York, NY |
10282-1101 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code (212) 299-2000
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
The information in this Item is furnished to, but not filed with, the Securities and Exchange Commission solely under Item 2.02 of Form 8-K, “Results of Operations and Financial Condition.”
On May 1, 2007, NYMEX Holdings, Inc. issued a press release announcing financial results for the quarter ended March 31, 2007. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
| 99.1 | Press release, dated May 1, 2007 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| NYMEX Holdings, Inc. | ||
| By: | /s/ RICHARD D. KERSCHNER | |
| Name: | Richard D. Kerschner | |
| Title: | SVP – Corporate Governance and Strategic Initiatives | |
Date: May 1, 2007
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EXHIBIT INDEX
| Exhibit No. | Description | |
| 99.1 | Press release, dated May 1, 2007 |
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Exhibit 99.1
FOR IMMEDIATE RELEASE
| Investor Contact: | Keil Decker | |
| (212) 299-2209 | ||
| Media Contact: | Anu Ahluwalia | |
| (212) 299-2439 | ||
NYMEX HOLDINGS, INC. REPORTS RECORD FIRST QUARTER RESULTS; DECLARES QUARTERLY DIVIDEND
| • | Record Operating Revenues Rise 47% to 164.2 Million |
| • | Record Net Income Increases 67% to $56.2 Million |
| • | Pretax Margin Increases to 68% on Electronic Volume Growth |
| • | Declares Quarterly Dividend of $0.10 Per Share |
New York, N.Y., May 1, 2007 — NYMEX Holdings, Inc. (NYSE: NMX), parent company of the New York Mercantile Exchange, Inc. (NYMEX), today reported that total operating revenues for the first quarter ended March 31, 2007, rose 47% to $164.2 million compared to $111.7 million for the first quarter 2006. Net income for the first quarter 2007 increased 67% to $56.2 million compared to $33.6 million for the first quarter 2006. Diluted earnings per share rose for the first quarter 2007 to $0.59, based on 94.8 million shares outstanding, compared to $0.44, based on 75.1 million shares outstanding for the first quarter 2006.
NYMEX also announced that the Board of Directors approved a quarterly dividend of $0.10 per share on the Company’s common stock, to shareholders of record as of the close of business on June 1, 2007, and payable on June 29, 2007.
“We continue to execute on the aggressive goals we have set since our public offering,” said NYMEX Chairman, Richard Schaeffer. “During the first quarter, we set volume, revenue, net income and profitability records, resulting in tremendous quarterly performance. Our electronic
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volumes on the industry-leading CME Globex® electronic trading platform hit all-time highs, and we have taken back market share in our energy and metals products. Since January, we have announced and completed important transactions, including a 19% investment in Optionable, Inc. to enhance our options offering; and a 10% investment in Montréal Exchange Inc., with which we are jointly creating the Canadian Resources Exchange (CAREX) to serve the vast Canadian energy marketplace. We also announced an increase in NYMEX member transaction fees, which will improve our profitability while maintaining our status as the most aggressively priced market in our industry. We will continue to look at additional acquisitions and strategic investments. Our focus remains on diversification and on expanding the NYMEX brand globally into untapped and underserved markets.”
Mr. Schaeffer continued, “Importantly, consistent with our prior statements regarding a dividend policy, we are pleased to declare our first quarterly dividend to shareholders as a public company.”
NYMEX President and Chief Executive Officer James E. Newsome commented, “NYMEX continues to be the global leader and innovator in the energy and metals markets. In the first quarter, we introduced a number of significant new products in response to demand by our customer base, such as uranium, catastrophe risk and alternative energy futures. We are pleased by the progress we have made in improving our profitability and in increasing electronic volume on CME Globex and our NYMEX ClearPort® trading and clearing platforms. We also remain excited about the potential for our Dubai Mercantile Exchange joint venture, which has recently received approval from the Dubai Financial Services Authority and will launch in June, pending final regulatory approval.”
Clearing and transaction fees rose 50% for the first quarter 2007 to $138.2 million compared to $92.4 million for the year ago period. Market data fees were $23.1 million for the first quarter 2007, versus $15.4 million for the first quarter 2006, an increase of 50%.
Average daily volume was 1.513 million contracts during the first quarter 2007, a 40% increase over the first quarter of 2006. NYMEX electronic volume on CME Globex was an average of
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597,000 contracts per day and represented a 485% increase over first quarter 2006 electronic volume. NYMEX floor-traded energy futures and options averaged 330,000 contracts a day, a decrease of 39% from the first quarter of 2006. COMEX electronic volume on CME Globex averaged 90,000 contracts per day, an increase of 650% over first quarter 2006 electronic volume. COMEX metals open outcry average daily volume was 56,000 contracts, a decrease of 60% from the first quarter of 2006. Average daily volume on NYMEX ClearPort increased 54% in the first quarter of 2007 to 373,000 contracts, from 242,000 contracts in the comparable period of 2006. The remaining volume of 68,000 trades per day consisted of other transactions which includes position transfers and exchanges.
Total operating expenses, excluding direct transaction costs of $24.1 million, were $44.4 million for the first quarter of 2007. This represents a 3% increase from $43.3 million for the same period in 2006, driven primarily by management equity compensation of $2.3 million granted in connection with NYMEX’s initial public offering in November 2006, as well as $600,000 of severance-related costs.
Income before provision for income taxes was $99.7 million for the first quarter 2007, compared to $61.7 million for the first quarter 2006. Pretax margin, defined as income before provision for income taxes divided by operating revenues, investment income and interest income from securities lending (net of interest expense/fees from securities lending and direct transaction costs), was 68% in the first quarter 2007, compared to 58% in first quarter 2006.
Investor Conference Call / Webcast Details
NYMEX will hold a conference call to discuss 2007 first quarter results today, May 1, 2007 at 8:00 AM Eastern Time. Those wishing to participate in the conference call can dial (800) 299-7928 (U.S. and Canada) or (617) 614-3926 (International), using the confirmation code 98223409. A live audio webcast of the call will also be available on the Investor Relations section of the NYMEX website at http://investor.nymex.com. Additionally, an archived version of the conference call will also be available within approximately 90 minutes of the conclusion of the call.
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About NYMEX Holdings, Inc.
NYMEX Holdings, Inc. (NYSE:NMX) is the parent company of the New York Mercantile Exchange, Inc. (NYMEX), the world’s largest physical commodity futures and options exchange. NYMEX offers futures and options trading in energy, metals and soft commodities contracts and clearing services for more than 280 off-exchange energy contracts. Through a hybrid model of open outcry floor trading and electronic trading on CME Globex® and NYMEX ClearPort®, NYMEX offers crude oil, petroleum products, natural gas, coal, electricity, gold, silver, copper, aluminum, platinum group metals, and soft commodities contracts for trading and clearing virtually 24 hours a day. Further information about NYMEX Holdings, Inc. and the New York Mercantile Exchange, Inc. is available on the NYMEX website at http://www.nymex.com.
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Forward Looking and Cautionary Statements
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to our future performance, operating results, strategy, and other future events. Such statements generally include words such as could, can, anticipate, believe, expect, seek, pursue, and similar words and terms, in connection with any discussion of future results. Forward-looking statements involve a number of assumptions, risks, and uncertainties, any of which may cause actual results to differ materially from the anticipated, estimated, or projected results referenced in forward-looking statements. In particular, the forward-looking statements of NYMEX Holdings, Inc., and its subsidiaries are subject to the following risks and uncertainties: the success and timing of new futures contracts and products; changes in political, economic, or industry conditions; the unfavorable resolution of material legal proceedings; the impact and timing of technological changes and the adequacy of intellectual property protection; the impact of legislative and regulatory actions, including without limitation, actions by the Commodity Futures Trading Commission; and terrorist activities and international hostilities, which may affect the general economy as well as oil and other commodity markets. We assume no obligation to update or supplement our forward-looking statements.
(Tables Follow)
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NYMEX HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in thousands, except for share data)
| Three Months Ended March 31, |
||||||||
| 2007 | 2006 | |||||||
| Operating Revenues |
||||||||
| Clearing and transaction fees |
$ | 138,177 | $ | 92,420 | ||||
| Market data fees |
23,137 | 15,382 | ||||||
| Other, net |
2,912 | 3,868 | ||||||
| Total operating revenues |
164,226 | 111,670 | ||||||
| Operating Expenses |
||||||||
| Direct transaction costs |
24,102 | 6,883 | ||||||
| Salaries and employee benefits |
21,038 | 18,314 | ||||||
| Occupancy and equipment |
5,943 | 8,245 | ||||||
| Depreciation and amortization, net of deferred credit amortization |
3,531 | 3,334 | ||||||
| General and administrative |
4,697 | 5,298 | ||||||
| Professional services |
4,186 | 3,326 | ||||||
| Telecommunications |
1,423 | 1,678 | ||||||
| Marketing |
1,933 | 913 | ||||||
| Other expenses |
1,661 | 2,150 | ||||||
| Total operating expenses |
68,514 | 50,141 | ||||||
| Operating income |
95,712 | 61,529 | ||||||
| Non-Operating Income and Expenses |
||||||||
| Investment income |
6,707 | 1,460 | ||||||
| Interest income from securities lending |
29,406 | 27,242 | ||||||
| Interest expense/fees from securities lending |
(28,889 | ) | (26,456 | ) | ||||
| Interest expense |
(1,612 | ) | (1,668 | ) | ||||
| Losses from unconsolidated investments |
(1,643 | ) | (394 | ) | ||||
| Total non-operating income and expenses |
3,969 | 184 | ||||||
| Income before provision for income taxes |
99,681 | 61,713 | ||||||
| Provision for income taxes |
43,461 | 28,080 | ||||||
| Net income |
$ | 56,220 | $ | 33,633 | ||||
| Proforma weighted average common shares outstanding and earnings per share retroactively adjusted to reflect the 90,000-for-1 recapitalization on March 14, 2006: |
| |||||||
| Earnings per Share |
||||||||
| Basic |
$ | 0.60 | $ | 0.44 | ||||
| Diluted |
$ | 0.59 | $ | 0.44 | ||||
| Weighted Average Number of Common Shares Outstanding |
||||||||
| Basic |
94,450,000 | 75,072,000 | ||||||
| Diluted |
94,808,000 | 75,072,000 | ||||||
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NYMEX HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
| (Unaudited) | ||||||
| March 31, 2007 |
December 31, 2006 | |||||
| Assets | ||||||
| Cash and cash equivalents |
$ | 16,023 | $ | 18,631 | ||
| Collateral from securities lending program |
2,259,616 | 2,547,312 | ||||
| Marketable securities, at market value |
481,523 | 485,581 | ||||
| Clearing and transaction fees receivable, net of allowance for member credits |
45,533 | 32,853 | ||||
| Prepaid expenses |
6,371 | 7,009 | ||||
| Margin deposits and guaranty funds |
13,425 | 17,052 | ||||
| Other current assets |
16,337 | 10,238 | ||||
| Total current assets |
2,838,828 | 3,118,676 | ||||
| Property and equipment, net |
182,037 | 183,193 | ||||
| Goodwill and indefinite-lived intangible asset |
307,125 | 307,125 | ||||
| Long-term investments |
115,425 | 3,008 | ||||
| Other assets |
9,745 | 11,929 | ||||
| Total assets |
$ | 3,453,160 | $ | 3,623,931 | ||
| Liabilities and Stockholders’ Equity | ||||||
| Accounts payable and accrued liabilities |
$ | 12,570 | $ | 14,854 | ||
| Accrued salaries and related liabilities |
10,562 | 13,688 | ||||
| Payable under securities lending program |
2,259,616 | 2,547,312 | ||||
| Margin deposits and guaranty funds |
13,425 | 17,052 | ||||
| Income tax payable |
35,050 | 4,984 | ||||
| Other current liabilities |
42,614 | 35,019 | ||||
| Total current liabilities |
2,373,837 | 2,632,909 | ||||
| Grant for building construction deferred credit |
105,630 | 106,166 | ||||
| Long-term debt |
80,281 | 80,281 | ||||
| Retirement obligation |
12,141 | 12,367 | ||||
| Other liabilities |
29,312 | 17,286 | ||||
| Total liabilities |
2,601,201 | 2,849,009 | ||||
| Total stockholders’ equity |
851,959 | 774,922 | ||||
| Total liabilities and stockholders’ equity |
$ | 3,453,160 | $ | 3,623,931 | ||
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| Q1 2007 | Q4 2006 | Q3 2006 | Q2 2006 | Q1 2006 | |||||||||||
| Trading Days |
61 | 62 | 62 | 63 | 62 | ||||||||||
| Average Daily Volume (round turns, in thousands, differences due to rounding) | |||||||||||||||
| Q1 2007 | Q4 2006 | Q3 2006 | Q2 2006 | Q1 2006 | |||||||||||
| NYMEX Floor |
330 | 362 | 528 | 537 | 541 | ||||||||||
| NYMEX Electronic |
597 | 368 | 197 | 112 | 102 | ||||||||||
| COMEX Floor |
56 | 76 | 88 | 128 | 139 | ||||||||||
| COMEX Electronic |
90 | 16 | 8 | 17 | 12 | ||||||||||
| NYMEX ClearPort |
373 | 302 | 436 | 276 | 242 | ||||||||||
| Other |
68 | 75 | 65 | 64 | 46 | ||||||||||
| Total |
1,513 | 1,199 | 1,324 | 1,132 | 1,082 | ||||||||||
| Gross Clearing and Transaction Revenue (in thousands, differences due to rounding) | |||||||||||||||
| Q1 2007 | Q4 2006 | Q3 2006 | Q2 2006 | Q1 2006 | |||||||||||
| NYMEX Floor |
$ | 23,664 | $ | 24,497 | $ | 36,097 | $ | 37,453 | $ | 33,918 | |||||
| NYMEX Electronic |
43,271 | 24,953 | 18,260 | 13,035 | 12,088 | ||||||||||
| COMEX Floor |
4,244 | 5,795 | 6,711 | 10,136 | 11,211 | ||||||||||
| COMEX Electronic |
8,253 | 2,000 | 1,736 | 3,508 | 2,432 | ||||||||||
| NYMEX ClearPort |
49,609 | 38,837 | 48,326 | 32,029 | 26,748 | ||||||||||
| Other |
9,136 | 8,683 | 8,069 | 7,185 | 6,023 | ||||||||||
| Total |
$ | 138,177 | $ | 104,765 | $ | 119,200 | $ | 103,346 | $ | 92,420 | |||||
| Net Rates Per Contract | |||||||||||||||
| Q1 2007 | Q4 2006 | Q3 2006 | Q2 2006 | Q1 2006 | |||||||||||
| NYMEX Floor |
$ | 1.18 | $ | 1.10 | $ | 1.10 | $ | 1.11 | $ | 1.01 | |||||
| NYMEX Electronic |
0.89 | 0.70 | 1.07 | 1.85 | 1.92 | ||||||||||
| COMEX Floor |
1.25 | 1.23 | 1.22 | 1.26 | 1.30 | ||||||||||
| COMEX Electronic |
1.20 | 1.99 | 3.35 | 3.36 | 3.29 | ||||||||||
| NYMEX ClearPort |
1.66 | 1.58 | 1.36 | 1.42 | 1.35 | ||||||||||
| Other |
2.19 | 1.88 | 2.00 | 1.81 | 2.10 | ||||||||||
| Total Net RPC |
1.24 | 1.17 | 1.25 | 1.33 | 1.28 | ||||||||||
| Direct Cost |
0.26 | 0.24 | 0.20 | 0.12 | 0.10 | ||||||||||
| Gross RPC |
$ | 1.50 | $ | 1.41 | $ | 1.45 | $ | 1.45 | $ | 1.38 | |||||
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