GAIN Capital Reports 2012 Third Quarter Results

               GAIN Capital Reports 2012 Third Quarter Results

  PR Newswire

  BEDMINSTER, New Jersey, Nov. 1, 2012

-- Net revenue of $40.0 million

-- Adjusted EBITDA* of $6.2 million

-- Net income of $3.2 million; $0.08 per diluted share

-- Adjusted net income* of $3.6 million; $0.09 per diluted share

BEDMINSTER, New Jersey, Nov. 1, 2012 /PRNewswire/ -- GAIN Capital Holdings,
Inc. ("GAIN") (NYSE: GCAP), a leading global provider of online trading
services, reported net income of $3.2 million, or $0.08 per share, and
adjusted net income of $3.6 million, or $0.09 per share, for the third quarter
ended September 30, 2012.

"In the third quarter, we launched new products and services in both our
retail and institutional businesses, while lowering our operating expenses in
our core retail business. As a result, we were able to achieve an adjusted
EBITDA of $6.2 million and an adjusted EBITDA margin of 15.5% in this period
of muted volatility and difficult market conditions," said Glenn Stevens,
chief executive officer of GAIN Capital. "Our revenue performance benefitted
from the contribution of our institutional business, GTX, which continued to
grow at a time when many of our competitors are reporting decreasing trading
volumes, and one month of contribution from our online futures broker Open E
Cry (OEC), which we acquired at the end of August."

"In the fourth quarter, we will introduce new marketing campaigns to promote
our enhanced retail offering, which features an expanded portfolio of products
delivered through our newly introduced platform, TRADE, positioning ourselves
to benefit from improved market conditions. At the same time, we expect a
positive impact from a full quarter's contribution from the recent additions
to GTX's specialty execution desk and our futures business, OEC."

"The completion of the OEC acquisition and the expansion of our institutional
business demonstrates our strategy of investing in our retail and
institutional FX business lines, while growing and diversifying our revenue
sources through both organic initiatives and strategic acquisitions," Mr.
Stevens added.

Retail Business

In the third quarter of 2012, GAIN's retail business generated revenue of
$34.3 million, compared to $40.8 million in 2Q 2012 and $52.2 million in 3Q
2011. Total retail trading volume was $278.7 billion compared to $340.8
billion in 2Q 2012 and $447.9 billion in 3Q 2011, as low market volatility
reduced client activity.

Despite quiet market conditions in the third quarter, active accounts in the
period remained stable, decreasing 3% compared to 2Q 2012 and 4% compared to
3Q 2011. Client assets (excluding OEC) increased by 10.6% to $316.9 million as
of September 30, 2012, compared to 3Q 2011, with a stable base of more than
74,000 retail accounts worldwide.

GAIN successfully launched TRADE in September, expanding its retail product
offering more than threefold to over 250 tradable markets, including FX, as
well as a range of contracts for difference on indices and commodities. TRADE
also features innovative tools for market monitoring, technical trading and
strategy building.

"The launch of TRADE is an important step in a program to deliver a
world-class FX and CFD trading experience for active traders that will include
multiple new asset classes, unique ways to trade a wide range of global
markets, and innovative ways to engage with the wider trading community
through social and community tools," said Mr. Stevens.

GAIN will continue to roll out TRADE worldwide in the fourth quarter of 2012.

Institutional Business

GAIN's institutional business, GTX, which serves institutional market
participants, including hedge funds, banks and high-frequency trading firms,
generated revenue of $4.2 million in 3Q 2012, compared with $1.4 million in 3Q
2011. Institutional volume was $503.7 billion, compared with $260.0 billion in
3Q 2011.

GTX recently expanded its specialty execution desk through the addition of a
14-person agency desk, which became operational in September 2012.

GTX is differentiated by innovative technology and a unique approach to
liquidity management. GTX facilitates electronic and automated trade execution
through its high performance trading platform, as well as voice execution
services through a team of experienced professionals.

"GTX's competitive advantages have allowed us to continue growing our
institutional volume, even under challenging market conditions," said Mr.
Stevens. "The addition of new products and a significantly expanded specialty
execution team are expected to continue to drive growth in GTX's volume and
revenue."

Third Quarter Metrics

(Comparisons below are referenced to 3Q 2011)

  *Net revenue of $40.0 million, compared to $53.9 million
  *Net income of $3.2 million, compared to $7.6 million
  *Adjusted EBITDA* of $6.2 million, compared to $15.6 million
  *Adjusted net income* of $3.6 million, compared to $9.3 million
  *Diluted EPS of $0.08, compared to $0.20
  *Adjusted diluted EPS* of $0.09, compared to $0.24
  *Total retail trading volume of $278.7 billion, compared to $447.9 billion
  *Total institutional trading volume of $503.7 billion, compared to $260.0
    billion

(*See below for reconciliation of non-GAAP financial measures)

Declaration of Quarterly Dividend

The Board of Directors approved a quarterly dividend of $0.05 per share, to be
paid on December 21, 2012 to shareholders of record as of December 12, 2012.

Conference Call

GAIN Capital will host a conference call today, Thursday, November 1, 2012 at
6 pm ET. Those wishing to listen to the call should dial +1-866-783-2141(U.S.
domestic) or +1-857-350-1600 (international), and enter the passcode 38636156#
at least 10 minutes prior to the start of the call. A live audio webcast of
the call, as well as PDF copies of this release and an accompanying
presentation, will also be available on the investor relations section of the
GAIN Capital website ( http://ir.gaincapital.com )

The audio replay will be available for one week after the call by dialing
+1-888-286-8010 (U.S. domestic) or +1-617-801-6888 (international), and
entering passcode 35532589#. The replay will be available starting
approximately two hours after the completion of the conference call.

About GAIN Capital

GAIN Capital Holdings, Inc. (NYSE: GCAP) is a global provider of online
trading services. GAIN's innovative trading technology provides market access
and highly automated trade execution services across multiple asset classes,
including foreign exchange (forex or FX), contracts for difference (CFDs) and
exchange-based products, to a diverse client base of retail and institutional
investors.

Through our retail brand, FOREX.com , we provide retail traders around the
world with access to a variety of global OTC financial markets, including
forex, precious metals and CFDs on commodities and indices. GAIN Capital also
operates GTX, a fully independent FX ECN for hedge funds and institutions;
OEC, an innovative online futures broker; and GAIN Securities, Inc. (member
FINRA/SIPC) a licensed U.S. broker-dealer.

GAIN Capital and its affiliates have offices in New York City; Bedminster, New
Jersey; London; Sydney; Hong Kong; Tokyo; Singapore; Beijing; and Seoul.

For further company information, visit www.gaincapital.com

                    Consolidated Statements of Operations
                     In millions, except per share data
                                 (unaudited)
                              Three Months Ended        Nine Months Ended
                                 September 30,             September 30,
                              2012           2011         2012        2011
Revenue
                                                            $         $  
Retail Trading revenue     $    34.3  $    52.2      104.6      146.1
Institutional Trading
revenue                             4.2           1.4        12.2         3.3
Other revenue                       1.4           0.6         2.1         1.3
Total non-interest
revenue                            39.9          54.2       118.9       150.7
Interest revenue                    0.1           0.1         0.4         0.3
Interest expense                      -         (0.4)       (0.4)       (1.1)
Total net interest
revenue (expense)                   0.1         (0.3)           -       (0.8)
Net revenue                        40.0          53.9       118.9       149.9
Expenses
Employee compensation and
benefits                           11.9          11.6        35.5        34.9
Selling and marketing               5.7           8.8        20.1        28.0
Trading expenses and
commissions                         8.9           9.9        26.9        25.5
Bank fees                           0.8           1.3         2.5         3.4
Depreciation and
amortization                        1.2           1.0         3.2         2.9
Purchase intangible
amortization                        0.6           2.7         3.5         6.4
Communications and data
processing                          0.8           0.7         2.3         2.1
Occupancy and equipment             1.2           1.2         3.5         3.5
Bad debt provision                    -           0.2         0.2         0.8
Professional fees                   1.6           1.9         3.6         3.8
Product development,
software and maintenance            1.1           1.0         3.3         3.0
Restructuring(1)                      -             -         0.6           -
Other                               1.8           1.9         5.1         5.6
Total                              35.6          42.2       110.3       119.9
Income before tax expense           4.4          11.7         8.6        30.0
Income tax expense                  1.2           4.1         2.2        11.0
                                                          $        $   
Net Income                 $    3.2  $    7.6        6.4        19.0
Earnings per common
share:
                                                          $        $   
Basic                      $    0.09  $    0.22        0.18        0.55
                                                          $        $   
Diluted                    $    0.08  $    0.20        0.16        0.49
Weighted average common
shares outstanding used
in computing earnings per
common share:
Basic                        35,250,404    34,625,525  34,893,622  34,313,987
Diluted                      38,560,657    38,916,038  38,927,673  39,025,699
(1) Non-recurring expenses relating to
cost-savings effected in 2Q 2012.

                    Condensed Consolidated Balance Sheet
                                 In millions
                                 (unaudited)
                                                  September 30,  December 31,
                                                      2012           2011
ASSETS:
 Cash and cash equivalents                         $  7.6     $  60.3
 Cash and cash equivalents, held for
customers                                                 426.6         310.4
 Short term investments                                45.0           0.1
 Receivables from banks and brokers                    83.9          85.4
 Property and equipment - net of accumulated
depreciation                                                9.9           7.5
 Prepaid assets                                         8.4           9.9
 Goodwill                                              10.2           3.1
 Intangible assets, net                                10.7          10.8
 Other assets                                          17.3          18.1
  Total assets                               $  619.6     $  505.6
LIABILITIES AND SHAREHOLDERS' EQUITY:
 Payables to brokers, dealers, FCM'S and
other regulated entities                              $  12.6     $  17.3
 Payable to customers                                 414.0         293.1
 Accrued compensation & benefits payable                4.9           4.9
 Accrued expenses and other liabilities                15.5          14.9
 Income tax payable                                     2.6           2.6
 Notes payable                                            -           7.9
  Total liabilities                          $  449.6     $  340.7
 Shareholders' Equity                        $  170.0     $  164.9
 Total liabilities and shareholders'
equity                                                $  619.6     $  505.6

(*) Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS

Adjusted net income is a non-GAAP financial measure and represents our net
income excluding the after-tax impact of amortization of purchased
intangibles. This non-GAAP financial measure has certain limitations,
including that it does not have a standardized meaning and, therefore, our
definition may be different from similar non-GAAP financial measures used by
other companies and/or analysts. Thus, it may be more difficult to compare our
financial performance to that of other companies. We believe our reporting of
adjusted net income assists investors in evaluating our operating performance.
However, because adjusted net income is not a measure of financial performance
calculated in accordance with GAAP, such measure should be considered in
addition to, but not as a substitute for, other measures of our financial
performance reported in accordance with GAAP, such as net income.

Reconciliation of GAAP Net Income to Adjusted Net Income In thousands, except
                         per share data (unaudited)
                               Three Months Ended       Nine Months Ended
                                  September 30,             September 30,
                                    2012          2011       2012        2011
Net income applicable to
GAIN Capital Holdings, Inc.     $  3.2      $  7.6   $  6.4    $  19.0
 Add back of purchased
intangible amortization,
net of tax                           0.4           1.7        2.6         4.0
 Adjusted net income          $  3.6      $  9.3   $  9.0    $  23.0
 Adjusted earnings per
common share:
 Basic                        $  0.10      $  0.27   $  0.26    $  0.67
 Diluted                      $  0.09      $  0.24   $  0.23    $  0.59

Reconciliation of GAAP Net Income to Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure that represents our earnings
before interest, taxes, depreciation, amortization and non-recurring expenses.
This non-GAAP financial measure has certain limitations, including that it
does not have a standardized meaning and, therefore, our definition may be
different from similar non-GAAP financial measures used by other companies
and/or analysts. Thus, it may be more difficult to compare our financial
performance to that of other companies. We believe our reporting of adjusted
EBITDA assists investors in evaluating our operating performance. However,
because adjusted EBITDA is not a measure of financial performance calculated
in accordance with GAAP, such measure should be considered in addition to, but
not as a substitute for, other measures of our financial performance reported
in accordance with GAAP, such as net income.

Adjusted EBITDA Margin is Adjusted EBITDA over revenue excluding interest on
our note payable.

  Reconciliation of GAAP Net Income to Adjusted EBITDA and Adjusted EBITDA
                            Margin Reconciliation
                                 In millions
                                (unaudited)
                                     Three Months Ended   Nine Months Ended
                                        September 30,        September 30,
                                           2012      2011       2012     2011
                                    $          $    $      $   
Net Revenue                                40.0     53.9      118.9    149.9
Interest expense                              -       0.2        0.4      0.4
Net Revenue (ex. Interest expense)         40.0      54.1      119.3    150.3
Net income applicable to GAIN
                                    $        $     $      $   
          Capital Holdings, Inc.           3.2       7.6       6.4    19.0
Add back:
   Depreciation & amortization              1.2       1.0        3.2      2.9
   Purchase intangible
   amortization                             0.6       2.7        3.5      6.4
   Interest expense                          -       0.2        0.4      0.4
   Restructuring(1)                           -         -        0.6        -
   Income tax expense                       1.2       4.1        2.2     11.0
                                    $          $    $      $   
Adjusted EBITDA                            6.2     15.6      16.3    39.7
Adjusted EBITDA Margin(2)                 15.5%     28.8%      13.7%    26.4%
(1) Non-recurring expenses relating to cost savings effected in 2Q 2012.
(2) Adjusted EBITDA Margin calculated as Adjusted EBITDA / Net Revenue (ex.
Interest expense).

Forward-Looking Statements:

In addition to historical information, this earnings release contains
"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 GAIN
Capital's annual report on Form 10-K, as filed with the Securities and
Exchange Commission on March 15, 2012, and include, but are not limited to,
the actions of both current and potential new competitors, fluctuations in
market trading volumes, financial market volatility, evolving industry
regulations, including changes in regulation of the futures companies, errors
or malfunctions in our systems or technology, rapid changes in technology,
effects of inflation, 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 assets and companies we have acquired, including the
successful integration of OEC, our ability to effectively compete in the
futures industry, changes in tax policy or accounting rules, fluctuations in
foreign exchange rates and commodity prices, adverse changes or volatility in
interest rates, as well as general economic, business, credit and financial
market conditions, internationally or nationally, and our ability to continue
paying a quarterly dividend in light of future financial performance and
financing needs. The forward-looking statements included herein represent GAIN
Capital's views as of the date of this release. GAIN Capital undertakes no
obligation to revise or update publicly any forward-looking statement for any
reason unless required by law.

Website: http://www.gaincapital.com
Contact: Investor Relations, MBS Value Partners, Hugh Collins or Lynn Morgen,
+1-212-750-5800, gain@mbsvalue.com; or Public Relations, Edelman, Mike Geller
or Chris Mittendorf, +1-212-729-2163, mike.geller@edelman.com
 
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