Investment Technology Group Reports First Quarter 2010 Results

NEW YORK, April 29 /PRNewswire-FirstCall/ -- Investment Technology Group, Inc. (NYSE: ITG), a leading agency broker and financial technology firm, today reported results for the quarter ended March 31, 2010.  A reduction in U.S. expenses and improved international operations substantially reduced the impact of lower U.S. market volumes on operating earnings.

Net income for the first quarter of 2010 was $8.4 million, or $0.19 per diluted share on revenues of $146.7 million.  Excluding the impact of a $6.1 million pre-tax ($3.5 million after tax) non-cash write-off of certain capitalized software initiatives, pro forma operating net income was $11.9 million, or $0.27 per diluted share.  For the first quarter of 2009, net income was $12.8 million, or $0.29 per diluted share, on revenues of $155.7 million.

Due to the 2009 restructuring and other cost management initiatives, U.S. expenses were down 7% compared to the first quarter of 2009 to $86.7 million.  Excluding the impact of the $6.1 million write-off described above, these expenses were down 13% to $80.6 million.

ITG's non-U.S. revenues were $46.8 million in the first quarter of 2010, a 22% increase over $38.3 million in the first quarter of 2009. Net income from non-U.S. operations was $0.6 million during the first quarter of 2010, compared to a net loss of $2.1 million during the first quarter of 2009.

ITG also repurchased 566,000 shares of its common stock during the first quarter of 2010 at an average cost of $17.52 per share.

"As U.S. institutional equity volumes remain subdued, we continue to focus on managing costs and capital intensity, optimizing the firm's global footprint and segmenting our client relationships.  This focus has allowed us to stabilize our profitability and gave us the flexibility to return value to stockholders through our share repurchase program," said Bob Gasser, ITG's Chief Executive Officer and President. "We are confident that when portfolio turnover and fund flows return to U.S. cash equities, we will see improvements to our bottom line from this enhanced operating leverage."  

The discussion above includes pro forma operating net income and related per share amounts which are non-GAAP financial measures that are described in the attached tables along with a reconciliation of these non-GAAP financial measures.

Conference Call

ITG has scheduled a conference call today at 11:00 a.m. ET to discuss first quarter results.  Those wishing to listen to the call should dial 866-831-6272 (1-617-213-8859 outside the U.S.) and enter the passcode 84983291 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 website at 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 888-286-8010 (1-617-801-6888 outside the U.S.) and entering the passcode 67206831.  The replay will be available starting approximately two hours after the completion of the conference call.

About ITG

Investment Technology Group, Inc., is an independent agency broker and financial technology firm that partners with asset managers globally to improve performance throughout the investment process. A leader in electronic trading since launching the POSIT® crossing network in 1987, ITG takes a consultative approach in delivering the highest quality institutional liquidity and market-leading execution services, measurement tools, and proprietary data. Asset managers rely on ITG's independence, experience, and intellectual capital to help mitigate risk, improve performance, and navigate increasingly complex markets. The firm is headquartered in New York with offices in North America, Europe, and the Asia Pacific region. For more information on ITG, please visit www.itg.com.

In addition to historical information, this press release may contain "forward-looking" statements that reflect management's expectations for the future.  A variety of important factors could cause results to differ materially from such statements.  These factors are noted throughout ITG's 2009 Annual Report, on its Form 10-K, and on its Form 10-Qs and include, but are not limited to, the actions of both current and potential new competitors, fluctuations in market trading volumes, financial market volatility, changes in commission pricing, potential impairment charges related to goodwill and other long-lived assets, evolving industry regulations, errors or malfunctions in our systems or technology, rapid changes in technology, cash flows into or redemptions from equity funds, effects of inflation, ability to meet liquidity requirements related to the clearing of our customers' trades, customer trading patterns, the success of our products and service offerings, our ability to continue to innovate and meet the demands of our customers for new or enhanced products, our ability to successfully integrate companies we have acquired, changes in tax policy or accounting rules, fluctuations in foreign exchange rates, adverse changes or volatility in interest rates, our ability to attract and retain talented employees, as well as general economic, business, credit and financial market conditions, internationally or nationally. The forward-looking statements included herein represent ITG's views as of the date of this release. ITG undertakes no obligation to revise or update publicly any forward-looking statement for any reason unless required by law.

INVESTMENT TECHNOLOGY GROUP, INC.

Reconciliation of U.S. GAAP Results to Pro Forma Operating Results

In evaluating the Company's financial performance, management reviews results from operations which excludes non-operating or one-time charges.  Pro forma operating net income and pro forma diluted operating earnings per share are non-GAAP (generally accepted accounting principles) performance measures, but the Company believes that they are useful to assist investors in gaining an understanding of the trends and operating results for the Company's core businesses. These measures should be viewed in addition to, and not in lieu of, the Company's reported results under U.S. GAAP.

The following is a reconciliation of U.S. GAAP results to pro forma results for the periods presented (in thousands except per share amounts):

SOURCE Investment Technology Group, Inc.

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