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TMX Group Limited Reports Results for the First Quarter 2013



    --  Revenue of $172.2  million in Q1/13
    --  Diluted earnings per share of 70 cents in Q1/13
    --  Adjusted diluted earnings per share of 78 cents, excluding 3
        cents per share of Maple transaction and integration costs, 16
        cents per share of amortization of intangible assets related to
        acquisitions, and 11 cents per share related to reduction in
        income tax expense due to recognition of deferred income tax
        asset
    --  Cash flows from operating activities of $57.7 million in Q1/13

TORONTO, May 10, 2013 /CNW/ - TMX Group Limited [TSX:X] announced results for 
the first quarter  ended March 31, 2013.

Commenting on Q1/13, Thomas Kloet, Chief Executive Officer of TMX Group said, 
"Significant progress was made in the first quarter of 2013 to advance our 
strategic business priorities, expand our product portfolio and broaden our 
customer base.  This activity took place against a backdrop of sustained 
market uncertainty, which resulted in lower new listings, financings and 
equity trading volumes."

"The integration of CDS and Alpha continues to be an important focus and we 
are on track to achieve our stated cost synergy targets.  In addition, we 
recently concluded the acquisition of Equity Financial's transfer agency and 
corporate trust services business to both further diversify our revenue base 
and broaden our portfolio of listed company services.  On the Information 
Services side of the business, along with FTSE, we recently launched FTSE TMX 
Global Debt Capital Markets.  This provides us with the opportunity to expand 
our bond index business globally with one of the world's leading index brands."

Michael Ptasznik, Chief Financial Officer of TMX Group said, "Our revenue in 
Q1/13 declined by 5% from the previous quarter primarily due to a decrease in 
both initial and additional listing fees. The revenue reduction was somewhat 
offset by an increase in cash markets trading and clearing revenue. Operating 
expenses increased sequentially primarily due to certain items which reduced 
compensation and benefits expenses in Q4/12 and higher organizational 
transition costs in Q1/13. Our earnings per share for Q1/13 improved over 
Q4/12 largely due to lower Maple transaction and integration costs and a tax 
adjustment relating to the sale of PC-Bond."

Important Information

TMX Group completed the acquisition of TMX Group Inc. on September 14, 2012 
and the acquisitions of The Canadian Depository for Securities Limited (CDS) 
and Alpha Trading Systems Inc. and Alpha Trading Systems Limited Partnership 
(collectively, Alpha) on August 1, 2012 (collectively, the Maple Transaction). 
The TMX Group condensed consolidated interim financial statements (the 
financial statements) have been prepared in accordance with International 
Financial Reporting Standards (IFRS), as issued by the International 
Accounting Standards Board and include the operating results of TMX Group 
Inc., CDS and Alpha. Comparative financial statements for, and as at, the 
quarter ended March 31, 2012 include TMX Group Limited only.

Maple Group Acquisition Corporation (Maple), as TMX Group was then named was 
an acquisition corporation formed solely for the purpose of pursuing the Maple 
Transaction. The most significant aspect of the Maple Transaction was the 
purchase of TMX Group Inc., which was a publicly traded company. Prior to the 
completion of the acquisitions of CDS and Alpha on August 1, 2012 and the 
initial take up of 80% of the common shares of TMX Group Inc. on July 31, 2012 
under the Maple offer, Maple had no material assets and no history of earnings 
and had not commenced commercial operations. The approach taken in this press 
release is intended to provide readers with a more complete view of the 
operating performance of TMX Group. Therefore, TMX Group's revenue, operating 
expenses and net income attributable to non-controlling interests for the 
quarter ended March 31, 2013 are compared with TMX Group Inc. for the quarter 
ended March 31, 2012. Management believes that this is the most meaningful 
presentation for the purpose of discussion of revenue, operating expenses and 
net income attributable to non-controlling interests.

Three Months Ended March 31, 2013 Compared With Three Months Ended March 31, 
2012

The information in the chart below reflects financial information for TMX 
Group Limited for the three months ended March 31, 2013, including the 
operating results of TMX Group Inc., CDS and Alpha and their respective 
subsidiaries. The comparative financial information for the three months ended 
March 31, 2012 includes only the accounts of TMX Group Limited.

For the reasons outlined in the section above, management believes that the 
historical information for TMX Group Limited in this table will be of limited 
use to investors and other users of our financial information in evaluating 
the operating performance of our company for the comparative periods.

Summary of Financial Information

(in millions of dollars, except per share amounts)
(unaudited)
                                            Q1/13    Q1/12  $ Increase

Revenue                                     $172.2      -      $172.2

Operating expenses                          $112.0      -      $112.0

Net income (loss) attributable to TMX Group $37.8   $(4.4)     $42.2
shareholders

Earnings/(loss) per share(v):                                      
         Basic                              $0.70  $(10.85)    $11.55
         Diluted                            $0.70  $(10.85)    $11.55

Cash flows from (used in) operating         $57.7  $(29.7)     $87.4
activities

(__________________________)
(v) Earnings (loss) per share information is based on net income attributable 
to TMX Group shareholders.

Non-IFRS Financial Measure

Adjusted earnings per share and adjusted diluted earnings per share provided 
below are Non-IFRS measures and do not have standardized meanings prescribed 
by IFRS and are therefore unlikely to be comparable to similar measures 
presented by other companies. We present adjusted earnings per share and 
adjusted diluted earnings per share to indicate operating performance 
exclusive of Maple Transaction costs, integration costs related to the Maple 
Transaction, an adjustment related to the recognition of a deferred income tax 
asset related to the sale of PC-Bond and the amortization of intangible assets 
related to acquisitions, which are adjusted because they are not indicative of 
underlying business performance. Management uses these measures to assess our 
financial performance, including our ability to generate cash, exclusive of 
these costs, and to enable comparability across periods.

Adjusted Earnings per Share Reconciliation for Q1/13 and Q1/12(°)

The following is a reconciliation of earnings/(loss) per share to adjusted 
earnings per share(°):
                                           Q1/13             Q1/12
                                     Basic  Diluted   Basic   Diluted

Earnings/(loss)
per share(v)                         $0.70   $0.70  $(10.85) $(10.85)
                                               

Adjustment:                                                          
                Adjustment related
                to amortization of
                intangibles related
                to acquisitions      $0.16   $0.16       -        -
                                                     
                Adjustment related
                to Maple
                Transaction
                and integration
                related costs        $0.03   $0.03    $10.85   $10.85
                                                     
                Adjustment related
                to recognition of a
                deferred income tax
                asset related to
                the
                sale of PC- Bond    $(0.11) $(0.11)      -        -
                                               

Adjusted earnings per share(°)       $0.78   $0.78       -        -

Weighted average number of basic common shares outstanding in Q1/13 was 
53,898,130
Weighted average number of diluted common shares outstanding in Q1/13 was 
54,058,684
Weighted average number of basic and diluted common shares outstanding in 
Q1/12 was 407,141

(________________________________ )

(°) See discussion under the heading Non-IFRS Financial Measure
(v) Earnings (loss) per share information is based on net income attributable 
to TMX Group shareholders. 


Supplementary Information For Three Months Ended March 31, 2013 Compared With 
Three Months Ended March 31, 2012

The table below contains TMX Group Limited revenue and operating expenses, 
income from operations and net income attributable to non-controlling 
interests which include the accounts of TMX Group Limited and the operating 
results of TMX Group Inc. and its subsidiaries and the operating results of 
CDS and Alpha and their subsidiaries for the period from January 1, 2013 to 
March 31, 2013.  In order to provide a meaningful presentation of the results 
of operations in this press release, we have compared TMX Group Limited 
consolidated revenue and operating expenses, income from operations and net 
income attributable to non-controlling interests for Q1/13 with TMX Group Inc. 
information for Q1/12. This approach is similar to how the results would be 
reported if TMX Group Inc. was the acquirer of CDS and Alpha.

This Q1/12 information differs from the TMX Group Limited financial 
statements. The TMX Group Limited financial statements reflect only the 
accounts of TMX Group Limited during Q1/12.

(In millions of dollars) (Unaudited)
          
                                      TMX Group Limited  TMX Group Inc.
                                            Q1/13           Q1/12(y)

Revenue:                                                               
       Issuer services                   $          42.7 $         50.2
       Trading, clearing, depository                75.7           65.4
       and related 
       Information services                         47.9           42.8
       Technology services and other                 5.9            3.9
       REPO interest:                                                  
         Interest income                            20.7            0.8
         Interest expense                         (20.7)          (0.8)
         Net REPO interest                             -              -
       Total revenue                               172.2          162.3

Operating Expenses:                                                    
       Compensation and benefits                    53.3           40.3
       Information and trading                      19.0           14.8
       systems
       General and administration                   21.4           20.1
       Depreciation and amortization                18.3            7.9
       Total operating expenses                    112.0           83.1
       Income from operations                       60.2           79.2
                                                                       
       Net income (loss) attributable              (0.4)            1.8
       to non-controlling interests 


(------------------------------------------ )
(y) TMX Group Inc. results for January 1, 2012 to March 31, 2012.


Revenue

Revenue was $172.2 million(*) in Q1/13, up $9.9 million, or 6% compared with 
$162.3 million(y) in Q1/12 due to the inclusion of $22.2 million of revenue 
from CDS and $4.8 million of revenue from Alpha. The increase was partially 
offset by lower revenue from issuer services, cash markets trading and BOX.

Operating Expenses

Operating expenses in Q1/13 were $112.0 million(*), up $28.9 million, or 35%, 
from $83.1 million(y )due to the additional operating expenses included from 
acquisitions. These included $21.5 million of combined expenses from CDS and 
from Alpha. There was also an increase related to the incremental amortization 
of intangible assets related to TMX Group's acquisitions of TMX Group Inc., 
CDS and Alpha of $9.6 million. In addition, the increase was attributable to 
the inclusion of incremental expenses related to Razor Risk Technologies 
Limited, consolidated from February 14, 2012. These increases were partially 
offset by lower information and trading systems costs due to operational 
savings and reduced projects costs, as well as lower general and 
administrative costs reflecting lower net BOX Market, LLC (BOX) expenses due 
to the establishment of the BOX Self Regulatory Organization (SRO) entity in 
May, 2012.

Net Income (loss) attributable to non-controlling interests

Net income (loss) attributable to non-controlling interests represents the 
other BOX members' share of BOX's income or loss in the period. In Q1/13, BOX 
had lower revenue reflecting a reduction in volumes and market share, as well 
as increased amortization of intangible assets, which resulted in a loss 
compared with income in Q1/12.  In addition, BOX revenue was higher in Q1/12 
due to the inclusion of Options Regulatory Fees.  Upon the establishment of 
the BOX SRO in May 2012, these fees charged are no longer consolidated into 
TMX Group results.

Financial Statements Governance Practice

The Finance & Audit Committee of the Board of Directors of TMX Group reviewed 
this press release as well as the Q1/13 financial statements and related 
Management's Discussion and Analysis (MD&A,) and recommended they be approved 
by the Board of Directors. Following review by the full Board, the Q1/13 
financial statements, MD&A and the contents of this press release were 
approved.

Condensed Consolidated Financial Statements

Our Q1/13 financial statements are prepared in accordance with IFRS, are in 
compliance with IAS 34, Interim Financial Reporting, and are reported in 
Canadian dollars unless otherwise indicated. Financial measures contained in 
the MD&A and this press release are based on financial statements prepared in 
accordance with IFRS, unless otherwise specified and are in Canadian dollars 
unless otherwise indicated.

(________________________________ )

(*) Includes TMX Group Limited results for January 1, 2013 to March 31, 2013

(y) TMX Group Inc. results for January 1, 2012 to March 31, 2012.


Access to Quarterly Materials

TMX Group has filed its Q1/13 financial statements and MD&A with Canadian 
securities regulators.  These documents may be accessed through 
www.sedar.com, or on the TMX Group website at www.tmx.com. We are not 
incorporating information contained on the website in this press release. In 
addition, copies of these documents will be available upon request, at no 
cost, by contacting TMX Group Investor Relations by phone at (416) 947-4277 or 
by e-mail at shareholder@tmx.com.

Caution Regarding Forward-Looking Information

Certain information contained in this press release may constitute 
"forward-looking information" (as defined in applicable Canadian securities 
legislation) that is based on expectations, assumptions, estimates, 
projections and other factors that management believes to be relevant as of 
the date of this press release. Often, but not always, such forward-looking 
information can be identified by the use of forward-looking words such as 
"plans", "expects", "is expected", "budget", "scheduled", "targeted", 
"estimates", "forecasts", "intends", "anticipates", "believes", or variations 
or the negatives of such words and phrases or statements that certain actions, 
events or results "may", "could", "would", "might" or "will" be taken, occur 
or be achieved or not be taken, occur or be achieved. Forward-looking 
information, by its nature, requires us to make assumptions and is subject to 
significant risks and uncertainties which may give rise to the possibility 
that our expectations or conclusions will not prove to be accurate and that 
our assumptions may not be correct.

Examples of forward-looking information include, but are not limited to, 
factors relating to stock, derivatives and energy exchanges and clearing 
houses and the business, strategic goals and priorities, market condition, 
pricing, proposed technology and other initiatives, financial condition, 
operations and prospects of TMX Group, the intention to integrate the business 
of TMX Group Inc. with CDS and Alpha and the anticipated benefits and 
synergies from the acquisitions of CDS and Alpha which are subject to 
significant risks and uncertainties. These risks include: competition from 
other exchanges or marketplaces, including alternative trading systems and new 
technologies, on a national and international basis; dependence on the economy 
of Canada; adverse effects on our results caused by global economic 
uncertainties including changes in business cycles that impact our sector; 
failure to retain and attract qualified personnel; geopolitical and other 
factors which could cause business interruption; dependence on information 
technology; vulnerability of our networks and third party service providers to 
security risks; failure to implement our strategies; regulatory constraints; 
risks of litigation or regulatory proceedings; dependence on adequate numbers 
of customers; failure to develop, market or gain acceptance of new products; 
currency risk; adverse effect of new business activities; not being able to 
meet cash requirements because of our holding company structure and 
restrictions on paying  dividends; dependence on third party suppliers and 
service providers; dependence of trading operations on a small number of 
clients; risks associated with our clearing operations; challenges related to 
international expansion; restrictions on ownership of TMX Group common shares; 
inability to protect our intellectual property; adverse effect of a systemic 
market event on certain of our businesses; risks associated with the credit of 
customers; cost structures being largely fixed; dependence on market activity 
that cannot be controlled; the inability to successfully integrate TMX Group 
Inc.'s operations with those of Alpha and CDS including, without limitation 
incurring and/or experiencing unanticipated costs and/or delays or 
difficulties; inability to reduce headcount, eliminate or consolidate 
contracts, technology, physical accommodations or other operating expenses, 
and the failure to realize the anticipated benefits from the acquisitions of 
TMX Group Inc., Alpha and CDS, including the fact that synergies are not 
realized in the amount or the time frame anticipated or at all; the regulatory 
constraints that apply to the business of TMX Group and its regulated 
subsidiaries, costs of on exchange clearing and depository services, trading 
volumes (which could be higher or lower than estimated) and revenues; future 
levels of revenues being lower than expected or costs being higher than 
expected.

The forward-looking information contained in this press release is presented 
for the purpose of assisting readers of this document in understanding our 
financial condition and results of operations and our strategies, priorities 
and objectives and may not be appropriate for other purposes. The 
forward-looking information relating to targeted cost synergies is being 
provided to help demonstrate the benefits of the acquisitions of CDS and 
Alpha, but readers are cautioned that such information may not be appropriate 
for other purposes. Actual results, events, performances, achievements and 
developments are likely to differ, and may differ materially, from those 
expressed or implied by the forward-looking information contained in this 
press release.

Such forward-looking information is based on a number of assumptions which may 
prove to be incorrect, including, but not limited to, assumptions in 
connection with the ability of TMX Group to successfully compete against 
global and regional marketplaces; business and economic conditions generally; 
exchange rates (including estimates of the U.S. dollar - Canadian dollar 
exchange rate), the level of trading and activity on markets, and particularly 
the level of trading in TMX Group's key products; business development and 
marketing and sales activity; the continued availability of financing on 
appropriate terms for future projects; productivity at TMX Group, as well as 
that of TMX Group's competitors; market competition; research & development 
activities; the successful introduction and client acceptance of new products; 
successful introduction of various technology assets and capabilities; the 
impact on TMX Group and its customers of various regulations; TMX  Group's 
ongoing relations with its employees; and the extent of any labour, equipment 
or other disruptions at any of its operations of any significance other than 
any planned maintenance or similar shutdowns.

While we anticipate that subsequent events and developments may cause our 
views to change, we have no intention to update this forward-looking 
information, except as required by applicable securities law. This 
forward-looking information should not be relied upon as representing our 
views as of any date subsequent to the date of this press release.  We have 
attempted to identify important factors that could cause actual actions, 
events or results to differ materially from those current expectations 
described in forward-looking information. However, there may be other factors 
that cause actions, events or results not to be as anticipated, estimated or 
intended and that could cause actual actions, events or results to differ 
materially from current expectations. There can be no assurance that 
forward-looking information will prove to be accurate, as actual results and 
future events could differ materially from those anticipated in such 
statements. Accordingly, readers should not place undue reliance on 
forward-looking information. These factors are not intended to represent a 
complete list of the factors that could affect us. A description of the 
above-mentioned items is contained under the heading Risks and Uncertainties 
in the 2012 Annual MD&A.

About TMX Group (TSX-X)

TMX Group's key subsidiaries operate cash and derivative markets and 
clearinghouses for multiple asset classes including equities, fixed income and 
energy. Toronto Stock Exchange, TSX Venture Exchange, TMX Select, Alpha Group, 
The Canadian Depository for Securities, Montreal Exchange, Canadian 
Derivatives Clearing Corporation, Natural Gas Exchange, BOX Options Exchange, 
Shorcan, Shorcan Energy Brokers, Equicom and other TMX Group companies provide 
listing markets, trading markets, clearing facilities, depository services, 
data products and other services to the global financial community. TMX Group 
is headquartered in Toronto and operates offices across Canada (Montreal, 
Calgary and Vancouver), in key U.S. markets (New York, Houston, Boston and 
Chicago) as well as in London, Beijing and Sydney.  For more information 
about TMX Group, visit our website at www.tmx.com. Follow TMX Group on Twitter 
at http://twitter.com/tmxgroup.

Teleconference / Audio Webcast

TMX Group will host a teleconference / audio webcast to discuss the financial 
results for Q1/13.

Time: 8:00 a.m. - 9:00 a.m. EDT on Friday, May 10, 2013.

To teleconference participants: Please call the following number at least 15 
minutes prior to the start of the event.

The audio webcast of the conference call will also be available on TMX Group's 
website at www.tmx.com. under Investor Relations.

Teleconference Number: 647-427-7450 or 1-888-231-8191

Audio Replay: 416-849-0833 or 1-855-859-2056

The passcode for the replay is 34369784.

 

 

 

Carolyn Quick Director, Communications & Public Affairs TMX Group  
416-947-4597  carolyn.quick@tmx.com 

Paul Malcolmson Director, Investor Relations TMX Group 416-947-4317 
paul.malcolmson@tmx.com

SOURCE: TMX Group Inc.

To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/May2013/10/c5493.html

CO: Toronto Stock Exchange
ST: Ontario
NI: FIN ERN CONF 

-0- May/10/2013 10:00 GMT

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