GFI Group Inc. Announces First Quarter 2013 Results; Declares Quarterly Cash Dividend

 GFI Group Inc. Announces First Quarter 2013 Results; Declares Quarterly Cash
                                   Dividend

PR Newswire

NEW YORK, April 25, 2013

NEW YORK, April 25, 2013 /PRNewswire/ --

-- GAAP Total Revenues: $244.4 Million; Non-GAAP Total Revenues: $242.7
Million

-- GAAP Net Revenues: $201.5 Million; Non-GAAP Net Revenues: $199.8 Million

-- Software, Analytics and Market Data revenues: $22.2 Million, up 10.8%
year-over-year

-- GAAP Net Income: $4.7 Million or $0.04 per Diluted Share

-- Non-GAAP Net Income: $7.2 Million or $0.06 per Diluted Share

-- Cash Earnings: $27.2 Million or $0.22 per Diluted Share

GFI Group Inc. (NYSE: GFIG),a leading provider of wholesale brokerage
services, clearing services, and electronic execution and trading support
products for global financial markets, reported today its financial results
for the first quarter ended March 31, 2013.

Highlights

  oNon-GAAP net revenues decreased 11.8% to $199.8 million in the first
    quarter of 2013, from $226.4 million in the first quarter of 2012.
  oBrokerage revenues for the first quarter of 2013 declined 14.7% to $176.6
    million, from $207.2 million in the first quarter of 2012.
  oRevenues from trading software, analytics and market data products for the
    first quarter of 2013 were $22.2 million, up 10.8% from $20.0 million in
    the first quarter of 2012.
  oCompensation and employee benefits expense in the first quarter of 2013
    was 68.6% of net revenues on a non-GAAP basis, as compared to 68.8% in the
    first quarter of 2012.
  oNon-compensation expenses were 26.8% on a non-GAAP basis in the first
    quarter of 2013. This compares with 25.4% in the first quarter of 2012.
  oNet income for the first quarter of 2013 was $7.2 million, or $0.06 per
    diluted share, on a non-GAAP basis compared with $8.4 million, or $0.07
    per diluted share, in the first quarter of 2012.
  oCash earnings for the three month period ended March 31, 2013 were $27.2
    million, or $0.22 per diluted share, compared with $30.3 million, or $0.24
    per diluted share, for the same period in 2012.

Colin Heffron, Chief Executive Officer of GFI, commented: "We made further
tangible progress in reducing GFI's cost structure across the board in the
first quarter with a lower compensation ratio despite declining industry-wide
trading volumes. Non-GAAP net revenues and brokerage revenues were down 11.8%
and 14.7%, respectively, while GFI's software, analytics and market data
revenues grew 10.8% largely due to continued growth at Trayport. At the same
time, GFI's proprietary trading platforms saw increased electronic matching
volume in a variety of products and regions.

"We continued to reduce GFI's cost base through both headcount reductions and
by building more flexibility into our compensation arrangements. We believe
we are on track to reach in excess of $50 million in total cost savings in
2013, as compared to 2011 expense levels, and we expect to realize improved
profitability compared to last year.

"Through April 24^th, GFI's preliminary April 2013 total revenues are tracking
up approximately 9% compared with April last year.

"GFI's cash EPS was $0.22 per diluted share in the first quarter of 2013. We
are pleased to declare a quarterly cash dividend to GFI shareholders of $0.05
per share."

GAAP Results

GAAP net revenues were $201.5 million in the first quarter 2013, compared with
$226.6 million in the first quarter of 2012. GAAP net income was $4.7
million, or $0.04 per diluted share, in the first quarter of 2013, compared
with $4.8 million, or $0.04 per diluted share, in the first quarter of 2012.
Compensation and employee benefits expense in the first quarter of 2013 was
68.0% on a GAAP basis, as compared with 68.7% in the first quarter of 2012.
Non-compensation expenses, on a GAAP basis, for the first quarter of 2013 were
$64.4 million, or 32.0% of net revenues, compared with $63.2 million, or 27.9%
of net revenues, in the first quarter of 2012.

Revenues

Net revenues were $199.8 million on a non-GAAP basis in the first quarter of
2013, as compared with $226.4 million in the first quarter of 2012.

Brokerage revenues were $176.6 million compared with $207.2 million in the
first quarter of 2012. Revenues from fixed income, equity and commodity
products were down 24.0%, 11.5% and 22.8%, respectively, compared with the
first quarter of 2012. Financial product revenues were up 3.5% over the same
period. By geographic region, brokerage revenues for the first quarter of
2013 declined 16.2% in the Americas, 12.9% in Europe, Middle East and Africa
and 17.6% in Asia-Pacific, as compared with the same quarter of 2012.

Revenues from trading software, analytics and market data products for the
first quarter of 2013 were $22.2 million, up 10.8% from $20.0 million in the
first quarter of 2012.

Expenses

For the first quarter of 2013, compensation and employee benefits expense was
$137.0 million compared with $155.8 million in the first quarter of 2012.
Compensation and employee benefits expense was 68.6% of net revenues on a
non-GAAP basis in the first quarter of 2013, compared with 68.8% of net
revenues in the first quarter of 2012. Non-compensation expenses, on a
non-GAAP basis, for the first quarter of 2013 were $53.5 million, or 26.8% of
net revenues, compared with $57.5 million, or 25.4% of net revenues, in the
first quarter of 2012.

Earnings

Non-GAAP net income for the first quarter of 2013 was $7.2 million, or $0.06
per diluted share, compared with net income of $8.4 million, or $0.07 per
diluted share, in the first quarter of 2012.

The effective non-GAAP tax rate for the first quarter of 2013 was
approximately 20.0%, as compared to 35.0% in the first quarter of 2012.

Dividend Declaration

The Board of Directors of GFI has declared a quarterly cash dividend of $0.05
per share payable on May 31, 2013 to shareholders of record as of May 17,
2013.

Non-GAAP Financial Measures

To supplement GFI's unaudited financial statements presented in accordance
with GAAP, the Company uses certain non-GAAP measures of financial
performance. The presentation of these non-GAAP financial measures is not
intended to be considered in isolation from, as a substitute for, or superior
to, the financial information prepared and presented in accordance with GAAP,
and may be different from non-GAAP financial measures used by other
companies. In addition, these non-GAAP measures have limitations in that they
do not reflect all of the amounts associated with the Company's results of
operations as determined in accordance with GAAP. The non-GAAP financial
measures used by GFI include non-GAAP total revenues, non-GAAP net revenues,
non-GAAP provision for or benefit from income taxes, non-GAAP net income,
non-GAAP diluted earnings per share, cash earnings and cash earnings per
share. These non-GAAP financial measures currently exclude from the Company's
statement of income amortization of acquired intangibles and certain other
items that management views as non-operating, non-recurring or non-cash as
detailed in the reconciliation included in the financial tables attached to
this release.

In addition, GFI may consider whether other significant non-operating,
non-recurring or non-cash items that arise in the future should also be
excluded in calculating the non-GAAP financial measures it uses. The non-GAAP
financial measures also take into account estimated adjustments to income tax
expense with respect to the excluded items.

GFI believes that these non-GAAP financial measures, when taken together with
the corresponding GAAP financial measures, provide meaningful supplemental
information regarding the Company's performance by excluding certain items
that may not be indicative of the Company's core business, operating results
or future outlook. GFI's management uses, and believes that investors benefit
from referring to, these non-GAAP financial measures in assessing the
Company's operating results, as well as when planning, forecasting and
analyzing future periods. These non-GAAP financial measures also facilitate
comparisons of the Company's performance to prior periods.

In addition to the reasons stated above, which are generally applicable to
each of the items GFI excludes from its non-GAAP financial measures, the
Company believes it is appropriate to exclude amortization of acquired
intangibles because when analyzing the operating performance of an acquired
business, GFI's management focuses on the total return provided by the
investment (i.e., operating profit generated from the acquired entity, as
compared to the purchase price paid) without taking into consideration any
charges for allocations made for accounting purposes. Further, because the
purchase price for an acquisition necessarily reflects the accounting value
assigned to intangible assets, when analyzing the operating performance of an
acquisition in subsequent periods, the Company's management excludes the GAAP
impact of acquired intangible assets on its financial results. GFI believes
that such an approach is useful in understanding the long-term return provided
by an acquisition and that investors benefit from a supplemental non-GAAP
financial measure that excludes the accounting expense associated with
acquired intangible assets.

A reconciliation of these non-GAAP financial measures to GAAP is included in
the financial tables attached to this release.

Conference Call

GFI has scheduled an investor conference call to discuss its First quarter
results at 8:30 a.m. (Eastern Time) on Friday, April 26, 2013. Those wishing
to listen to the live conference call via telephone should dial 1-800-860-2442
in North America and +1-412-858-4600 outside of North America, and ask for
"GFI".

A live audio web cast of the conference call will be available on the Investor
Relations section of GFI's Website. For web cast registration information,
please visit: http://www.gfigroup.com. Following the conference call, an
archived recording will be available.

Supplementary Financial Information

GFI has posted details of its historical monthly brokerage revenues on the
Investor Relations page of its web site under the heading Supplementary
Financial Information. The Company currently plans to post this information
quarterly in conjunction with its announcement of earnings, but does not
undertake a responsibility to continue to provide or update such information.

About GFI Group Inc.

GFI Group Inc. (NYSE: "GFIG") is a leading provider of wholesale brokerage
services, clearing services, electronic execution and trading support products
for global financial markets. GFI Group Inc. provides brokerage services,
market data, trading platform and analytics software products to institutional
clients in markets for a range of fixed income, financial, equity and
commodity instruments.

Headquartered in New York, GFI was founded in 1987 and employs more than 2,000
people with additional offices in London, Paris, Nyon, Hong Kong, Seoul,
Singapore, Manila, Sydney, Cape Town, Santiago, Bogota, Buenos Aires, Lima,
Mexico City, Dubai, Dublin, Tel Aviv, Los Angeles and Sugar Land (TX). GFI
Group Inc. provides services and products to over 2,600 institutional clients,
including leading investment and commercial banks, corporations, insurance
companies and hedge funds. Its brands include GFI^SM, GFInet®, CreditMatch®,
GFI ForexMatch®, EnergyMatch®, FENICS®, Starsupply®, Amerex®, Trayport® and
Kyte®.

Forward-looking Statement

Certain matters discussed in this press release contain forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. When used in this press release, the words "anticipate," "believe,"
"estimate," "may," "might," "intend," "expect" and similar expressions
identify such forward-looking statements. Actual results, performance or
achievements could differ materially from those contemplated, expressed or
implied by the forward-looking statements contained herein. These
forward-looking statements are based largely on the expectations of GFI Group
Inc. (the "Company") and are subject to a number of risks and uncertainties.
These include, but are not limited to, risks and uncertainties associated
with: economic, political and market factors affecting trading volumes;
securities prices or demand for the Company's brokerage services; competition
from current and new competitors; the Company's ability to attract and retain
key personnel, including highly-qualified brokerage personnel; the Company's
ability to identify and develop new products and markets; changes in laws and
regulations governing the Company's business and operations or permissible
activities; the Company's ability to manage its international operations;
financial difficulties experienced by the Company's customers or key
participants in the markets in which the Company focuses its brokerage
services; the Company's ability to keep up with technological changes;
uncertainties relating to litigation and the Company's ability to assess and
integrate acquisition prospects. Further information about factors that could
affect the Company's financial and other results is included in the Company's
filings with the Securities and Exchange Commission. The Company does not
undertake to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.

- FINANCIAL TABLES FOLLOW -

GFI Group Inc. and Subsidiaries
Consolidated Statements of Operations (unaudited)
(In thousands except share and per share data)
                                      Three Months Ended
                                      March 31,
                                      2013                 2012
Revenues
  Agency commissions                 $    126,572     $    144,580
  Principal transactions             50,065               62,588
  Total brokerage revenues           176,637              207,168
  Clearing services revenues          38,064               28,127
  Interest income from clearing       737                  521
  services
  Equity in net earnings of           3,059                1,420
  unconsolidated businesses
  Software, analytics and market data 22,158               19,999
  Other income                        3,737                2,940
   Total revenues                  244,392              260,175
Interest and transaction-based
expenses
  Transaction fees on clearing        36,908               26,962
  services
  Transaction fees on brokerage       5,807                6,125
  services
  Interest expense from clearing      160                  440
  services
  Total interest and                  42,875               33,527
  transaction-based expenses
  Revenues, net of interest and       201,517              226,648
  transaction-based expenses
Expenses
  Compensation and employee benefits  137,015              155,778
  Communications and market data      13,587               15,666
  Travel and promotion                8,061                10,089
  Rent and occupancy                  7,212                6,792
  Depreciation and amortization       8,308                9,148
  Professional fees                   6,727                6,168
  Interest on borrowings              7,688                6,815
  Other expenses                      12,824               8,473
   Total other expenses             201,422              218,929
Income before (benefit from)          95                   7,719
provision for income taxes
(Benefit from) provision for income   (4,859)              2,779
taxes
Net income before attribution to      4,954                4,940
non-controlling stockholders
Less: Net income attributable to      280                  148
non-controlling interests
GFI's net income                      $       4,674  $       4,792
Basic earnings per share             $             $       
                                      0.04                 0.04
Diluted earnings per share            $             $       
                                      0.04                 0.04
Weighted average shares outstanding - 115,384,022          115,498,177
basic
Weighted average shares outstanding - 125,552,041          125,350,139
diluted

GFI Group Inc. and Subsidiaries
Consolidated Statements of Operations (unaudited)
As a Percentage of Net Revenues
                                                            Three Months Ended
                                                            March 31,
                                                            2013       2012
Revenues
  Agency commissions                                       62.8%      63.8%
  Principal transactions                                   24.8%      27.6%
  Total brokerage revenues                                 87.6%      91.4%
  Clearing services revenues                                18.9%      12.4%
  Interest income from clearing services                    0.4%       0.2%
  Equity in net earnings of unconsolidated businesses       1.5%       0.6%
  Software, analytics and market data                       11.0%      8.8%
  Other income                                              1.9%       1.4%
   Total revenues                                        121.3%     114.8%
Interest and transaction-based expenses
  Transaction fees on clearing services                     18.3%      11.9%
  Transaction fees on brokerage services                    2.9%       2.7%
  Interest expense from clearing services                   0.1%       0.2%
  Total interest and transaction-based expenses             21.3%      14.8%
  Revenues, net of interest and transaction-based expenses  100.0%     100.0%
Expenses
  Compensation and employee benefits                        68.0%      68.7%
  Communications and market data                            6.8%       6.9%
  Travel and promotion                                      4.0%       4.5%
  Rent and occupancy                                        3.6%       3.0%
  Depreciation and amortization                             4.1%       4.0%
  Professional fees                                         3.3%       2.7%
  Interest on borrowings                                    3.8%       3.0%
  Other expenses                                            6.4%       3.8%
   Total other expenses                                   100.0%     96.6%
Income before (benefit from) provision for income taxes     0.0%       3.4%
(Benefit from) provision for income taxes                   -2.4%      1.2%
Net income before attribution to non-controlling            2.4%       2.2%
stockholders
Less: Net income attributable to non-controlling interests  0.1%       0.1%
GFI's net income                                            2.3%       2.1%

GFI Group Inc. and Subsidiaries
Selected Financial Data (unaudited)
(Dollars in thousands except per share data)
                                            Three Months Ended
                                            March 31,
                                            2013               2012
Brokerage Revenues by Product Categories:
  Fixed Income                              $             $     
                                            46,742            61,511
  Financial                                 51,916             50,155
  Equity                                    33,216             37,533
  Commodity                                 44,763             57,969
   Total brokerage revenues               $     176,637  $    
                                                               207,168
Brokerage Revenues by Geographic Region:
  Americas                                  $             $     
                                            68,779            82,076
  Europe, Middle East, and Africa           89,342             102,608
  Asia-Pacific                              18,516             22,484
   Total brokerage revenues               $     176,637  $    
                                                               207,168
                                            March 31,          December 31,
                                            2013               2012
Consolidated Statement of Financial
Condition Data:
  Cash and cash equivalents                 $     216,144  $    
                                                               227,441
  Cash held at clearing organizations, net  31,298             19,636
  of customer cash
  GFI's total balance sheet cash            247,442            247,077
  Balance sheet cash per share              2.06               2.11
  Total assets (1)                          1,269,444          1,180,061
  Total debt                                250,000            250,000
  Stockholders' equity                      422,062            425,082
Selected Statistical Data:
  Brokerage personnel headcount (2)         1,165              1,188
  Employees                                 2,033              2,062
  Broker productivity for the period (3)    $          $       
                                            151                 125

    Total assets include receivables from brokers, dealers and clearing
    organizations of $355.5 million and $252.7 million at March 31, 2013 and
    December 31, 2012, respectively. These receivables primarily represent
    securities transactions entered into in connection with our matched
(1) principal business which have not settled as of their stated settlement
    dates, as well as balances with clearing organizations. These receivables
    are substantially offset by corresponding payables to brokers, dealers and
    clearing organizations and to clearing customers, for these unsettled
    transactions.
(2) Brokerage personnel headcount includes brokers, traders, trainees and
    clerks.
(3) Broker productivity is calculated as brokerage revenues divided by average
    monthly brokerage personnel headcount for the quarter.

GFI Group Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)
(In thousands except share and per share data)
                                            Three Months Ended
                                            March 31,
                                            2013              2012
GAAP revenues                               $   244,392     $   260,175
Mark-to-market (gain) loss on forward       (969)             1,304
hedges of future foreign currency revenues
Fair value mark-to-market gain on future    (744)             (1,827)
purchase commitment
Fair value mark-to-market loss on warrants  22                316
on investee shares
Total Non-GAAP Revenues                     242,701           259,968
GAAP interest and transaction-based         42,875            33,527
expenses
Non-GAAP revenues, net of interest and      199,826           226,441
transaction-based expenses
GAAP other expenses                         201,422           218,929
Amortization of intangibles                 (2,498)           (2,906)
Writedown of available for sale securities  -                 (2,700)
Expenses from start-up operations           (8,413)           -
Non-GAAP other expenses                     190,511           213,323
Non-GAAP pre-tax income                    9,315             13,118
Income tax impact on Non-GAAP items         4,067             1,812
Plus: Non-operating adjustment for the
recognition of a tax benefit related to     2,655             -
interest income between international
affiliates
Non-GAAP provision for income taxes         1,863             4,591
Less: Net income attributable to            280               148
non-controlling interests
GFI's Non-GAAP net income                   $     7,172   $     8,379
Non-GAAP diluted net income per share       $      0.06  $      0.07
Pre-tax adjustments to arrive at cash
earnings
Amortization of RSUs                        8,142             9,052
Amortization of prepaid sign-on and         6,112             6,595
retention bonuses
Depreciation and other amortization         5,810             6,242
Total pre-tax adjustments to cash earnings  20,064            21,889
Non-GAAP pre-tax cash earnings from         29,379            35,007
ongoing operations
Non-GAAP provision for income taxes         1,863             4,591
Less: Net income attributable to            280               148
non-controlling interests
GFI's Non-GAAP net cash earnings from       $   27,236     $    30,268
ongoing operations
Non-GAAP cash earnings per share            $     0.22   $      0.24
Weighted average shares outstanding -       125,552,041       125,350,139
diluted



GFI Group Inc.
Adjusted EBITDA
($ in '000's,                                                      Last twelve
except share and   1Q12    2Q12      3Q12      4Q12       1Q13     months
per share amounts)                                                 (LTM)
Net income (loss)
per U.S. GAAP      $      $        $         $          $ 
before attribution 4,940   5,335     (8,805)   (11,114)   4,954
to non-controlling
interests
Plus: Net (income)
loss attributable  (148)   (15)      112       (258)      (280)
to non-controlling
interests
GFI's net income   4,792   5,320     (8,693)   (11,372)   4,674
(loss)
Plus:
Extraordinary and
other
non-recurring      5,399   (3,128)   6,457     3,013      9,220
pretax items
(i.e., non-GAAP
adjustments)
Plus: Interest     7,255   6,685     6,820     7,098      7,848
expense
Less: Interest     (680)   (622)     (614)     (849)      (928)
income
Plus: Income tax   2,779   2,282     1,638     1,688      (4,859)
expense (benefit)
Plus: Depreciation
and amortization   6,242   6,174     6,324     6,591      5,810
expense (excluding
intangibles)
Plus: Amortization 9,052   7,830     7,751     7,732      8,142
of RSUs
Plus: Amortization
of prepaid sign-on 6,595   6,041     6,296     6,540      6,112
and retention
bonuses
Adjusted EBITDA    $       $ 30,582  $ 25,979  $ 20,441  $        $  
                   41,434                                 36,019   113,021
Weighted average
shares outstanding                                                 125,552,041
- diluted
Adjusted EBITDA                                                    $     
per share                                                          0.90
(pre-tax)

SOURCE GFI Group Inc.

Website: http://www.gfigroup.com
Contact: Investor Relations - Christopher Giancarlo, Executive Vice President,
investorinfo@gfigroup.com, or Chris Ann Casaburri Grimmett, Investor Relations
Manager, 212-968-4167, chris.grimmett@gfigroup.com, Media Contact - Patricia
Gutierrez, Vice President - Public Relations, 212-968-2964,
patricia.gutierrez@gfigroup.com