ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
Delaware
|
|
20-4568600
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(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
Bedminster One
135 Route 202/206
Bedminster, New Jersey
|
|
07921
|
(Address of principal executive offices)
|
|
(Zip Code)
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Large accelerated filer
|
|
¨
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Accelerated filer
|
ý
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Non-accelerated filer
|
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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|
As of June 30, 2015
|
|
As of December 31, 2014
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||||
ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
135,022
|
|
|
$
|
139,403
|
|
Cash and securities held for customers
|
1,109,406
|
|
|
759,559
|
|
||
Short term investments, at fair value
|
255
|
|
|
174
|
|
||
Receivables from brokers, of which ($28,358) and $717, respectively, are at fair value
|
157,024
|
|
|
134,908
|
|
||
Property and equipment, net of accumulated depreciation of ($38,943) and ($31,544), respectively
|
27,813
|
|
|
18,796
|
|
||
Prepaid assets
|
8,402
|
|
|
2,537
|
|
||
Goodwill
|
48,006
|
|
|
34,567
|
|
||
Intangible assets, net of accumulated amortization of ($25,135) and ($12,670), respectively
|
111,528
|
|
|
60,806
|
|
||
Other assets, net of allowance for doubtful accounts of ($5,602) and ($4,555), respectively
|
43,521
|
|
|
35,137
|
|
||
Total assets
|
$
|
1,640,977
|
|
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$
|
1,185,887
|
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LIABILITIES AND SHAREHOLDERS’ EQUITY:
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
||
Payables to customers, of which ($153,408) and ($102,722), respectively, are at fair value
|
$
|
1,109,406
|
|
|
$
|
759,559
|
|
Accrued compensation and benefits
|
8,462
|
|
|
16,912
|
|
||
Accrued expenses and other liabilities
|
53,933
|
|
|
64,476
|
|
||
Income tax payable
|
3,645
|
|
|
1,470
|
|
||
Convertible senior notes
|
119,762
|
|
|
68,367
|
|
||
Total liabilities
|
1,295,208
|
|
|
910,784
|
|
||
Commitments and contingent liabilities
|
|
|
|
||||
Redeemable non-controlling interests
|
12,783
|
|
|
10,209
|
|
||
Shareholders’ equity
|
|
|
|
||||
Common stock ($0.00001 par value; 120 million shares authorized; 51,802,494 shares issued and 49,164,386 shares outstanding as of June 30, 2015; 45,582,066 shares issued and 42,934,559 shares outstanding as of December 31, 2014)
|
—
|
|
|
—
|
|
||
Accumulated other comprehensive income/(loss)
|
5,237
|
|
|
(2,054
|
)
|
||
Additional paid-in capital
|
221,577
|
|
|
152,684
|
|
||
Treasury stock, at cost (2,638,108 shares at June 30, 2015 and 2,647,507 shares at December 31, 2014)
|
(17,120
|
)
|
|
(16,720
|
)
|
||
Retained earnings
|
123,292
|
|
|
130,984
|
|
||
Total shareholders’ equity
|
332,986
|
|
|
264,894
|
|
||
Total liabilities and shareholders’ equity
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$
|
1,640,977
|
|
|
$
|
1,185,887
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
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Common Stock
|
|
Treasury Stock
|
|
Additional
Paid-in Capital |
|
Retained Earnings
|
|
Accumulated
Other Comprehensive Income/(Loss) |
|
Total
|
|||||||||||||||
|
Shares
|
|
Amount
(1)
|
|
|
|
|
|
||||||||||||||||||
BALANCE—December 31, 2014
|
42,934,559
|
|
|
$
|
—
|
|
|
$
|
(16,720
|
)
|
|
$
|
152,684
|
|
|
$
|
130,984
|
|
|
$
|
(2,054
|
)
|
|
$
|
264,894
|
|
Exercise of options
|
492,969
|
|
|
—
|
|
|
—
|
|
|
1,987
|
|
|
—
|
|
|
—
|
|
|
1,987
|
|
||||||
Conversion of restricted stock into common stock
|
415,536
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of common stock
|
5,319,149
|
|
|
—
|
|
|
—
|
|
|
48,280
|
|
|
—
|
|
|
—
|
|
|
48,280
|
|
||||||
Employee stock purchase plan
|
44,106
|
|
|
—
|
|
|
—
|
|
|
394
|
|
|
—
|
|
|
—
|
|
|
394
|
|
||||||
Repurchase of shares
|
(41,933
|
)
|
|
—
|
|
|
(400
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(400
|
)
|
||||||
Convertible note issuance
|
—
|
|
|
—
|
|
|
—
|
|
|
15,348
|
|
|
—
|
|
|
—
|
|
|
15,348
|
|
||||||
Stock compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
2,019
|
|
|
—
|
|
|
—
|
|
|
2,019
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,291
|
|
|
7,291
|
|
||||||
Tax benefit of stock option exercises
|
—
|
|
|
—
|
|
|
—
|
|
|
865
|
|
|
—
|
|
|
—
|
|
|
865
|
|
||||||
Dividends declared ($0.05 quarterly dividend per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,627
|
)
|
|
—
|
|
|
(4,627
|
)
|
||||||
Net loss applicable to Gain Capital Holdings, Inc.
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(495
|
)
|
|
—
|
|
|
(495
|
)
|
||||||
Adjustment to the redemption value of put options related to non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,570
|
)
|
|
—
|
|
|
(2,570
|
)
|
||||||
BALANCE—June 30, 2015
|
49,164,386
|
|
|
$
|
—
|
|
|
$
|
(17,120
|
)
|
|
$
|
221,577
|
|
|
$
|
123,292
|
|
|
$
|
5,237
|
|
|
$
|
332,986
|
|
|
Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income/(loss)
|
$
|
265
|
|
|
$
|
(1,129
|
)
|
Adjustments to reconcile net income/(loss) to cash provided by/(used for) operating activities
|
|
|
|
||||
Loss/(gain) on foreign currency exchange rates
|
3,103
|
|
|
(441
|
)
|
||
Depreciation and amortization
|
11,121
|
|
|
6,621
|
|
||
Non-cash integration costs
|
10,249
|
|
|
—
|
|
||
Deferred taxes
|
(1,563
|
)
|
|
(3,379
|
)
|
||
Amortization of deferred financing costs
|
177
|
|
|
177
|
|
||
Convertible senior notes discount amortization
|
1,567
|
|
|
1,054
|
|
||
Bad debt provision
|
4,560
|
|
|
1,162
|
|
||
Stock compensation expense
|
2,019
|
|
|
1,837
|
|
||
Adjustment to fair value of contingent consideration
|
(4,043
|
)
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Cash and securities held for customers
|
(102,746
|
)
|
|
(103,732
|
)
|
||
Receivables from brokers
|
12,486
|
|
|
(5,187
|
)
|
||
Prepaid assets
|
(1,988
|
)
|
|
153
|
|
||
Other assets
|
(2,504
|
)
|
|
(5,034
|
)
|
||
Payables to customers
|
102,746
|
|
|
103,732
|
|
||
Accrued compensation and benefits
|
(11,424
|
)
|
|
(5,802
|
)
|
||
Accrued expenses and other liabilities
|
(9,387
|
)
|
|
(8,962
|
)
|
||
Income tax payable
|
2,223
|
|
|
1,624
|
|
||
Cash provided by/(used for) operating activities
|
16,861
|
|
|
(17,306
|
)
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Purchases of property and equipment
|
(8,517
|
)
|
|
(4,311
|
)
|
||
Sale of treasury bills
|
(4
|
)
|
|
(2
|
)
|
||
Funding of acquisitions, net of cash acquired
|
(3,258
|
)
|
|
(6,501
|
)
|
||
Cash used for investing activities
|
(11,779
|
)
|
|
(10,814
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Proceeds from exercise of stock options
|
1,987
|
|
|
1,113
|
|
||
Tax benefit related to stock option exercises
|
865
|
|
|
1,213
|
|
||
Proceeds from employee stock purchase plan
|
394
|
|
|
461
|
|
||
Purchase of treasury stock
|
(400
|
)
|
|
(793
|
)
|
||
Contractual payments for acquisitions
|
(9,842
|
)
|
|
—
|
|
||
Distributions to non-controlling interest holders
|
(756
|
)
|
|
—
|
|
||
Dividend payment
|
(4,627
|
)
|
|
(3,993
|
)
|
||
Cash used for financing activities
|
(12,379
|
)
|
|
(1,999
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
2,916
|
|
|
3,181
|
|
||
DECREASE IN CASH AND CASH EQUIVALENTS
|
(4,381
|
)
|
|
(26,938
|
)
|
||
CASH AND CASH EQUIVALENTS—Beginning of period
|
139,403
|
|
|
39,871
|
|
||
CASH AND CASH EQUIVALENTS—End of period
|
$
|
135,022
|
|
|
$
|
12,933
|
|
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
|
||||
Cash paid during the year for:
|
|
|
|
||||
Interest
|
$
|
(2,472
|
)
|
|
$
|
(1,687
|
)
|
Taxes
|
$
|
(1,677
|
)
|
|
$
|
(5,179
|
)
|
Non-cash financing activities:
|
|
|
|
||||
Common stock issued as consideration for asset and business acquisitions
|
$
|
(48,280
|
)
|
|
$
|
1,241
|
|
Convertible senior notes issued as consideration for business acquisitions
|
$
|
(65,000
|
)
|
|
$
|
—
|
|
Adjustment to redemption value of put options related to non-controlling interests
|
$
|
(2,570
|
)
|
|
$
|
(173
|
)
|
|
Fair Value Measurements on a Recurring Basis
as of June 30, 2015 |
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Financial Assets/(Liabilities):
|
|
|
|
|
|
|
|
||||||||
Customer open contracts and other positions
|
$
|
—
|
|
|
$
|
153,408
|
|
|
$
|
—
|
|
|
$
|
153,408
|
|
Broker open contracts and other positions
|
—
|
|
|
(28,358
|
)
|
|
—
|
|
|
(28,358
|
)
|
||||
Money market accounts
|
20,152
|
|
|
—
|
|
|
—
|
|
|
20,152
|
|
||||
Certificates of deposit
|
255
|
|
|
—
|
|
|
—
|
|
|
255
|
|
||||
Investment in gold
|
116
|
|
|
—
|
|
|
|
|
|
116
|
|
||||
Contingent consideration
|
—
|
|
|
|
|
|
(6,031
|
)
|
|
(6,031
|
)
|
||||
Total
|
$
|
20,523
|
|
|
$
|
125,050
|
|
|
$
|
(6,031
|
)
|
|
$
|
139,542
|
|
|
Fair Value Measurements on a Recurring Basis
as of December 31, 2014
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Financial Assets/(Liabilities):
|
|
|
|
|
|
|
|
||||||||
Customer open contracts and other positions
|
$
|
—
|
|
|
$
|
102,722
|
|
|
$
|
—
|
|
|
$
|
102,722
|
|
Broker open contracts and other positions
|
—
|
|
|
717
|
|
|
—
|
|
|
717
|
|
||||
Money market accounts
|
20,537
|
|
|
—
|
|
|
—
|
|
|
20,537
|
|
||||
Certificates of deposit
|
174
|
|
|
—
|
|
|
—
|
|
|
174
|
|
||||
Investment in gold
|
118
|
|
|
—
|
|
|
—
|
|
|
118
|
|
||||
Contingent consideration
|
—
|
|
|
—
|
|
|
(9,974
|
)
|
|
(9,974
|
)
|
||||
Total
|
$
|
20,829
|
|
|
$
|
103,439
|
|
|
$
|
(9,974
|
)
|
|
$
|
114,294
|
|
Liabilities
|
|
Contingent Consideration
|
||
Balance at January 1, 2015
|
|
$
|
9,974
|
|
Gains included in earnings - adjustment to fair value of contingent consideration
|
|
(4,466
|
)
|
|
Gains included in earnings - currency revaluation
|
|
100
|
|
|
Losses included in earnings - discount amortization
|
|
423
|
|
|
Balance at June 30, 2015
|
|
$
|
6,031
|
|
|
As of June 30, 2015
|
|
Fair Value Measurements using:
|
||||||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Receivables from brokers
|
$
|
185,382
|
|
|
$
|
185,382
|
|
|
$
|
—
|
|
|
$
|
185,382
|
|
|
$
|
—
|
|
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Payables to customers
|
1,262,814
|
|
|
1,262,814
|
|
|
—
|
|
|
1,262,814
|
|
|
—
|
|
|||||
Convertible senior notes
|
119,762
|
|
|
120,187
|
|
|
—
|
|
|
120,187
|
|
|
—
|
|
|||||
Accrued expenses and other liabilities
|
1,366
|
|
|
1,366
|
|
|
—
|
|
|
1,366
|
|
|
—
|
|
|
As of December 31, 2014
|
|
Fair Value Measurements using:
|
||||||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Receivables from brokers
|
$
|
134,191
|
|
|
$
|
134,191
|
|
|
$
|
—
|
|
|
$
|
134,191
|
|
|
$
|
—
|
|
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Payables to customers
|
862,281
|
|
|
862,281
|
|
|
—
|
|
|
862,281
|
|
|
—
|
|
|||||
Convertible senior notes
|
68,367
|
|
|
66,440
|
|
|
—
|
|
|
66,440
|
|
|
—
|
|
|||||
Accrued expenses and other liabilities
|
20,000
|
|
|
20,000
|
|
|
—
|
|
|
20,000
|
|
|
—
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Required collateral
|
$
|
162,513
|
|
|
$
|
95,599
|
|
Futures brokers - Restricted
|
22,869
|
|
|
38,592
|
|
||
Open positions
|
(28,358
|
)
|
|
717
|
|
||
|
$
|
157,024
|
|
|
$
|
134,908
|
|
|
June 30, 2015
|
||||||||||
|
Derivative open positions at fair value
|
||||||||||
|
Gross
assets
|
|
Gross
liabilities
|
|
Net assets
|
||||||
Derivative Instruments:
|
|
|
|
|
|
||||||
Foreign currency exchange contracts
|
$
|
136,209
|
|
|
$
|
59,614
|
|
|
$
|
76,595
|
|
CFD contracts
|
144,817
|
|
|
107,178
|
|
|
37,639
|
|
|||
Metals contracts
|
15,721
|
|
|
4,905
|
|
|
10,816
|
|
|||
Total
|
$
|
296,747
|
|
|
$
|
171,697
|
|
|
$
|
125,050
|
|
|
|
|
|
|
|
||||||
|
June 30, 2015
|
||||||||||
|
Net assets/liabilities at fair value
|
||||||||||
|
Cash Collateral
|
|
Derivative
open positions
|
|
Presented in the
balance sheet
|
||||||
Derivative Assets/Liabilities:
|
|
|
|
|
|
||||||
Receivables from brokers
|
$
|
185,382
|
|
|
$
|
(28,358
|
)
|
|
$
|
157,024
|
|
Payables to customers
|
$
|
1,262,814
|
|
|
$
|
153,408
|
|
|
$
|
1,109,406
|
|
|
December 31, 2014
|
||||||||||
|
Derivative open positions at fair value
|
||||||||||
|
Gross
assets |
|
Gross
liabilities |
|
Net assets
|
||||||
Derivative Instruments:
|
|
|
|
|
|
||||||
Foreign currency exchange contracts
|
$
|
168,034
|
|
|
$
|
93,057
|
|
|
$
|
74,977
|
|
CFD contracts
|
44,329
|
|
|
24,420
|
|
|
19,909
|
|
|||
Metals contracts
|
16,146
|
|
|
7,593
|
|
|
8,553
|
|
|||
Total
|
$
|
228,509
|
|
|
$
|
125,070
|
|
|
$
|
103,439
|
|
|
|
|
|
|
|
||||||
|
December 31, 2014
|
||||||||||
|
Net assets/liabilities at fair value
|
||||||||||
|
Cash Collateral
|
|
Derivative
open positions |
|
Presented in the balance sheet |
||||||
Derivative Assets/Liabilities:
|
|
|
|
|
|
||||||
Receivables from brokers
|
$
|
134,191
|
|
|
$
|
717
|
|
|
$
|
134,908
|
|
Payables to customers
|
$
|
862,281
|
|
|
$
|
102,722
|
|
|
$
|
759,559
|
|
|
June 30, 2015
|
||||
|
Total contracts in long positions
|
|
Total contracts in short positions
|
||
Derivative Instruments:
|
|
|
|
||
Foreign currency exchange contracts
|
2,824,897
|
|
|
3,073,585
|
|
CFD contracts
|
478,704
|
|
|
106,087
|
|
Metals contracts
|
3,505
|
|
|
2,572
|
|
Total
|
3,307,106
|
|
|
3,182,244
|
|
|
December 31, 2014
|
||||
|
Total contracts in long positions
|
|
Total contracts in short positions
|
||
Derivative Instruments:
|
|
|
|
||
Foreign currency exchange contracts
|
3,147,518
|
|
|
2,679,041
|
|
CFD contracts
|
873,070
|
|
|
10,753
|
|
Metals contracts
|
835
|
|
|
335
|
|
Total
|
4,021,423
|
|
|
2,690,129
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Derivative Instruments:
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange contracts
|
$
|
61,587
|
|
|
$
|
15,473
|
|
|
$
|
97,552
|
|
|
$
|
56,972
|
|
CFD contracts
|
13,523
|
|
|
13,289
|
|
|
37,864
|
|
|
17,493
|
|
||||
Metals contracts
|
5,721
|
|
|
7,680
|
|
|
11,527
|
|
|
13,181
|
|
||||
Total
|
$
|
80,831
|
|
|
$
|
36,442
|
|
|
$
|
146,943
|
|
|
$
|
87,646
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Software
|
$
|
28,938
|
|
|
$
|
30,351
|
|
Computer equipment
|
13,691
|
|
|
8,516
|
|
||
Leasehold improvements
|
10,375
|
|
|
6,719
|
|
||
Telephone equipment
|
717
|
|
|
719
|
|
||
Office equipment
|
2,209
|
|
|
2,345
|
|
||
Furniture and fixtures
|
1,572
|
|
|
1,044
|
|
||
Web site development costs
|
9,254
|
|
|
646
|
|
||
|
66,756
|
|
|
50,340
|
|
||
Less: Accumulated depreciation and amortization
|
(38,943
|
)
|
|
(31,544
|
)
|
||
Property and equipment, net
|
$
|
27,813
|
|
|
$
|
18,796
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
Intangibles
|
Gross
|
|
Accumulated
Amortization |
|
Net
|
|
Gross
|
|
Accumulated
Amortization |
|
Net
|
||||||||||||
Customer lists
|
$
|
53,432
|
|
|
$
|
(9,396
|
)
|
|
$
|
44,036
|
|
|
$
|
22,945
|
|
|
$
|
(7,152
|
)
|
|
$
|
15,793
|
|
Technology
|
74,424
|
|
|
(14,623
|
)
|
|
59,801
|
|
|
48,376
|
|
|
(4,671
|
)
|
|
43,705
|
|
||||||
Trademarks
|
8,445
|
|
|
(1,116
|
)
|
|
7,329
|
|
|
1,793
|
|
|
(847
|
)
|
|
946
|
|
||||||
Total finite lived intangibles
|
136,301
|
|
|
(25,135
|
)
|
|
111,166
|
|
|
73,114
|
|
|
(12,670
|
)
|
|
60,444
|
|
||||||
Trademark not subject to amortization
(1)
|
362
|
|
|
—
|
|
|
362
|
|
|
362
|
|
|
—
|
|
|
362
|
|
||||||
Total intangibles
(2)
|
$
|
136,663
|
|
|
$
|
(25,135
|
)
|
|
$
|
111,528
|
|
|
$
|
73,476
|
|
|
$
|
(12,670
|
)
|
|
$
|
60,806
|
|
Intangible Assets
|
Amount (in thousands)
|
|
Weighted average amortization period
|
||
Customer lists
|
$
|
53,432
|
|
|
8.1 years
|
Technology
|
74,424
|
|
|
8.9 years
|
|
Trademarks
(1)
|
8,807
|
|
|
6.7 years
|
|
|
$
|
136,663
|
|
|
|
|
|||||||
|
June 30, 2015
|
|
December 31, 2014
|
||||
Vendor and security deposits
|
$
|
4,944
|
|
|
$
|
3,373
|
|
Current tax receivable
|
8,682
|
|
|
5,084
|
|
||
Deferred tax assets
|
11,039
|
|
|
6,472
|
|
||
Indemnification asset
|
—
|
|
|
8,792
|
|
||
GTX trade receivables
|
4,347
|
|
|
4,190
|
|
||
Customer debit positions
|
7,311
|
|
|
6,594
|
|
||
Allowance for doubtful customer debit positions
|
(5,602
|
)
|
|
(4,555
|
)
|
||
Acquisition related receivable
|
7,065
|
|
|
—
|
|
||
Miscellaneous receivables and other assets
|
5,735
|
|
|
5,187
|
|
||
|
$
|
43,521
|
|
|
$
|
35,137
|
|
Cash
|
$
|
6,650
|
|
Convertible senior notes
|
65,000
|
|
|
Common stock issued (based on the April 1, 2015 quoted price of $9.77)
|
48,280
|
|
|
Total purchase price
|
$
|
119,930
|
|
|
|
||
Cash and cash equivalents
|
$
|
32,991
|
|
Cash and securities held for customers
|
265,012
|
|
|
Receivable from brokers
|
35,974
|
|
|
Property and equipment
|
10,411
|
|
|
Prepaid assets
|
3,972
|
|
|
Other current assets
|
893
|
|
|
Total tangible assets
|
349,253
|
|
|
Total liabilities assumed
|
302,283
|
|
|
Net assets acquired
|
46,970
|
|
|
Identifiable intangible assets:
|
|
||
Customer list
|
29,143
|
|
|
Trade name
|
6,339
|
|
|
Technology
|
24,583
|
|
|
Intangible assets, net
|
60,065
|
|
|
Goodwill
|
$
|
12,895
|
|
Cash
|
$
|
9,732
|
|
Contingent payment
|
10,540
|
|
|
Total purchase price
|
$
|
20,272
|
|
Cash and cash equivalents
|
$
|
2,193
|
|
Receivable from brokers
|
745
|
|
|
Property and equipment
|
12
|
|
|
Prepaid assets
|
94
|
|
|
Other current assets
|
64
|
|
|
Total tangible assets
|
3,108
|
|
|
Total liabilities assumed
|
1,931
|
|
|
Net assets acquired
|
1,177
|
|
|
Identifiable intangible assets:
|
|
||
Customer list
|
4,203
|
|
|
Trade name
|
784
|
|
|
Intangible assets, net
|
4,987
|
|
|
Goodwill
|
$
|
14,108
|
|
Cash
|
$
|
4,365
|
|
Common stock issued
|
1,241
|
|
|
Total purchase price
|
$
|
5,606
|
|
Non-controlling interest
|
$
|
4,509
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
360
|
|
Receivable from brokers
|
438
|
|
|
Property and equipment
|
148
|
|
|
Prepaid assets
|
153
|
|
|
Other current assets
|
3
|
|
|
Total tangible assets
|
1,102
|
|
|
Total liabilities assumed
|
515
|
|
|
Net assets acquired
|
587
|
|
|
Identifiable intangible assets:
|
|
||
Customer list
|
3,100
|
|
|
Trade name
|
270
|
|
|
Intangible assets, net
|
3,370
|
|
|
Goodwill
|
$
|
6,158
|
|
Non-controlling interest
|
$
|
3,885
|
|
|
|
||
Cash and cash equivalents
|
$
|
73
|
|
Receivable from brokers
|
663
|
|
|
Total tangible assets
|
736
|
|
|
Total liabilities assumed
|
1,103
|
|
|
Net assets acquired
|
(367
|
)
|
|
Identifiable intangible assets:
|
|
||
Customer list
|
3,900
|
|
|
Trade name
|
90
|
|
|
Intangible assets, net
|
3,990
|
|
|
Goodwill
|
$
|
3,806
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||
|
2014
|
|
2014
|
||||
REVENUE:
|
|
|
|
||||
Total non-interest revenue
|
$
|
71,861
|
|
|
$
|
158,182
|
|
Interest revenue
|
401
|
|
|
771
|
|
||
Interest expense
|
367
|
|
|
670
|
|
||
Total net interest revenue
|
34
|
|
|
101
|
|
||
Net revenue
|
71,895
|
|
|
158,283
|
|
||
EXPENSES:
|
|
|
|
||||
Depreciation and amortization
|
1,800
|
|
|
4,025
|
|
||
Purchased intangible amortization
|
1,839
|
|
|
3,193
|
|
||
Other expense items
|
73,520
|
|
|
150,230
|
|
||
Total operating expense
|
77,159
|
|
|
157,448
|
|
||
OPERATING (LOSS)/PROFIT
|
(5,264
|
)
|
|
835
|
|
||
Interest on long term borrowings
|
1,462
|
|
|
2,894
|
|
||
LOSS BEFORE INCOME TAX BENEFIT
|
(6,726
|
)
|
|
(2,059
|
)
|
||
Income tax benefit
|
(2,522
|
)
|
|
(773
|
)
|
||
NET LOSS
|
(4,204
|
)
|
|
(1,286
|
)
|
||
Net income attributable to non-controlling interests
|
164
|
|
|
196
|
|
||
Net loss applicable to Gain Capital Holdings, Inc.
|
$
|
(4,368
|
)
|
|
$
|
(1,482
|
)
|
|
For the Six Months Ended June 30,
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
|
2014
|
||||||
REVENUE:
|
|
|
|
|
|
||||||
Total non-interest revenue
|
$
|
241,534
|
|
|
$
|
94,173
|
|
|
$
|
191,087
|
|
Interest revenue
|
734
|
|
|
614
|
|
|
855
|
|
|||
Interest expense
|
627
|
|
|
142
|
|
|
222
|
|
|||
Total net interest revenue
|
107
|
|
|
472
|
|
|
633
|
|
|||
Net revenue
|
241,641
|
|
|
94,645
|
|
|
191,720
|
|
|||
EXPENSES:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
5,360
|
|
|
3,249
|
|
|
2,893
|
|
|||
Purchased intangible amortization
|
8,492
|
|
|
3,877
|
|
|
7,178
|
|
|||
Other expense items
|
224,811
|
|
|
101,441
|
|
|
181,129
|
|
|||
Total operating expense
|
238,663
|
|
|
108,567
|
|
|
191,200
|
|
|||
OPERATING PROFIT/(LOSS)
|
2,978
|
|
|
(13,922
|
)
|
|
520
|
|
|||
Interest on long term borrowings
|
5,101
|
|
|
2,507
|
|
|
3,939
|
|
|||
LOSS BEFORE INCOME TAX BENEFIT
|
(2,123
|
)
|
|
(16,429
|
)
|
|
(3,419
|
)
|
|||
Income tax benefit
|
(797
|
)
|
|
(6,161
|
)
|
|
(1,282
|
)
|
|||
NET LOSS
|
(1,326
|
)
|
|
(10,268
|
)
|
|
(2,137
|
)
|
|||
Net income attributable to non-controlling interests
|
760
|
|
|
164
|
|
|
202
|
|
|||
Net loss applicable to Gain Capital Holdings, Inc.
|
$
|
(2,086
|
)
|
|
$
|
(10,432
|
)
|
|
$
|
(2,339
|
)
|
|
For the Six Months Ended June 30,
|
||
|
2015
|
||
Restructuring liability as of January 1, 2015
|
$
|
374
|
|
2015 restructuring expenses
|
1,935
|
|
|
Payments made in 2015
|
(1,608
|
)
|
|
Restructuring liability as of June 30, 2015
|
$
|
701
|
|
|
Redeemable non-controlling interests
|
||
January 1, 2015
|
$
|
10,209
|
|
Adjustment to the redemption value of non-controlling interests
|
2,570
|
|
|
Net income attributable to non-controlling interests
|
760
|
|
|
Distributions to non-controlling interest holders
|
(756
|
)
|
|
June 30, 2015
|
$
|
12,783
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Liability component - principal
|
$
|
140,000
|
|
|
$
|
80,000
|
|
Deferred bond discount
|
(20,238
|
)
|
|
(11,633
|
)
|
||
Liability component - net carrying value
|
$
|
119,762
|
|
|
$
|
68,367
|
|
|
|
|
|
||||
Additional paid in capital
|
$
|
27,920
|
|
|
$
|
12,572
|
|
Discount attributable to equity
|
(425
|
)
|
|
(425
|
)
|
||
Equity component
|
$
|
27,495
|
|
|
$
|
12,147
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Interest expense - stated coupon rate
|
$
|
1,443
|
|
|
$
|
825
|
|
|
$
|
2,268
|
|
|
$
|
1,650
|
|
Interest expense - amortization of deferred bond discount and costs
|
1,111
|
|
|
531
|
|
|
1,788
|
|
|
1,054
|
|
||||
Total interest expense - convertible senior notes
|
$
|
2,554
|
|
|
$
|
1,356
|
|
|
$
|
4,056
|
|
|
$
|
2,704
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net loss applicable to GAIN Capital Holdings, Inc.
|
$
|
(8,830
|
)
|
|
$
|
(5,156
|
)
|
|
$
|
(495
|
)
|
|
$
|
(1,331
|
)
|
Adjustment to the redemption value of non-controlling interests
(1)(2)
|
(2,246
|
)
|
|
(176
|
)
|
|
(2,570
|
)
|
|
(176
|
)
|
||||
Loss available to common shareholders
|
$
|
(11,076
|
)
|
|
$
|
(5,332
|
)
|
|
$
|
(3,065
|
)
|
|
$
|
(1,507
|
)
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic weighted average common shares outstanding
|
49,070,783
|
|
|
40,135,820
|
|
|
46,154,905
|
|
|
39,839,012
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Stock options
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
RSUs/RSAs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Diluted weighted average common shares outstanding
|
49,070,783
|
|
|
40,135,820
|
|
|
46,154,905
|
|
|
39,839,012
|
|
||||
Net loss per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.23
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.04
|
)
|
Diluted
|
$
|
(0.23
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.04
|
)
|
(1)
|
During the three and six months ended June 30, 2015 and 2014, the Company concluded that the value of the put options related to the Company's redeemable non-controlling interests in GAA and Top Third was less than redemption value. The adjustment to increase the carrying value reduces earnings available to the Company's shareholders for purposes of calculating basic and diluted net loss per common share.
|
(2)
|
The adjustments shown for the three and six months ended June 30, 2015 contain out of period adjustments of
$1.3 million
or
$0.03
per diluted share (See Note 6).
|
Entity Name
|
Minimum
Regulatory Capital Requirements |
|
Capital
Levels Maintained |
|
Excess
Net Capital |
|
Percent of
Requirement Maintained |
|||||||
GAIN Capital Group, LLC
|
$
|
25.1
|
|
|
$
|
32.6
|
|
|
$
|
7.5
|
|
|
130
|
%
|
GAIN Capital-Forex.com U.K., Ltd.
|
32.1
|
|
|
64.0
|
|
|
31.9
|
|
|
199
|
%
|
|||
Forex.com Japan Co., Ltd.
|
3.6
|
|
|
8.5
|
|
|
4.9
|
|
|
236
|
%
|
|||
GAIN Capital-Forex.com Hong Kong, Ltd.
|
1.9
|
|
|
2.7
|
|
|
0.8
|
|
|
142
|
%
|
|||
GFT Global Markets Asia Pte., Ltd.
|
0.7
|
|
|
3.1
|
|
|
2.4
|
|
|
443
|
%
|
|||
GAIN Capital Forex.com Australia, Pty. Ltd.
|
0.8
|
|
|
2.6
|
|
|
1.8
|
|
|
325
|
%
|
|||
Galvan Research and Trading, Ltd.
|
0.8
|
|
|
4.5
|
|
|
3.7
|
|
|
563
|
%
|
|||
GAIN Capital-Forex.com Canada Ltd.
|
0.2
|
|
|
1.5
|
|
|
1.3
|
|
|
750
|
%
|
|||
GAIN Capital Securities, Inc.
|
0.1
|
|
|
0.4
|
|
|
0.3
|
|
|
400
|
%
|
|||
GAIN Global Markets, Inc.
|
0.1
|
|
|
0.2
|
|
|
0.1
|
|
|
200
|
%
|
|||
GAIN Capital UK, Ltd.
1
|
41.6
|
|
|
94.1
|
|
|
52.5
|
|
|
226
|
%
|
|||
GAIN Capital Singapore Pte. Ltd.
1
|
0.7
|
|
|
3.2
|
|
|
2.5
|
|
|
457
|
%
|
|||
GAIN Capital Australia Pty Ltd.
1
|
0.8
|
|
|
1.8
|
|
|
1.0
|
|
|
225
|
%
|
|||
Global Assets Advisors, LLC
|
0.1
|
|
|
0.9
|
|
|
0.8
|
|
|
900
|
%
|
|||
Total
|
$
|
108.6
|
|
|
$
|
220.1
|
|
|
$
|
111.5
|
|
|
203
|
%
|
(1)
|
Entity acquired as part of the City Index acquisition.
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
for approximately 98% of our customers' trades, we hedge our customers' positions, leaving a bid/offer spread without exposure to changes in market value; and
|
•
|
with respect to the remaining customer trades, which we refer to as our net exposure, we receive the net gains or losses generated through changes in the market value of the currencies or other products held in our net exposure.
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Retail
|
|
|
|
|
|
|
|
||||||||
OTC Trading Volume (billions)
|
$
|
1,067.3
|
|
|
$
|
522.2
|
|
|
$
|
1,863.9
|
|
|
$
|
1,094.5
|
|
Average Daily OTC Trading Volume (billions)
|
$
|
16.4
|
|
|
$
|
8.0
|
|
|
$
|
14.6
|
|
|
$
|
8.6
|
|
Sales Trader Trading Volume
|
$
|
92.9
|
|
|
$
|
111.7
|
|
|
$
|
188.8
|
|
|
$
|
252.8
|
|
Active OTC Accounts
|
148,730
|
|
|
94,261
|
|
|
148,730
|
|
|
94,261
|
|
||||
Futures Contracts
|
2,055,878
|
|
|
1,710,944
|
|
|
4,436,951
|
|
|
3,283,409
|
|
||||
Client Assets (millions)
|
$
|
1,109.4
|
|
|
$
|
840.0
|
|
|
$
|
1,109.4
|
|
|
$
|
840.0
|
|
Institutional
|
|
|
|
|
|
|
|
||||||||
GTX Trading Volume (billions)
|
$
|
1,188.8
|
|
|
$
|
1,237.0
|
|
|
$
|
2,421.1
|
|
|
$
|
2,449.4
|
|
Average Daily GTX Trading Volume (billions)
|
$
|
18.3
|
|
|
$
|
19.0
|
|
|
$
|
18.9
|
|
|
$
|
19.1
|
|
•
|
overall economic conditions and outlook;
|
•
|
volatility of financial markets;
|
•
|
legislative changes; and
|
•
|
regulatory changes.
|
•
|
the effectiveness of our sales activities;
|
•
|
the competitiveness of our products and services;
|
•
|
the effectiveness of our customer service team; and
|
•
|
the effectiveness of our marketing activities.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
(amounts in thousands)
|
|
(amounts in thousands)
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
REVENUE:
|
|
|
|
|
|
|
|
||||||||
Retail revenue
|
$
|
97,335
|
|
|
$
|
60,280
|
|
|
$
|
181,575
|
|
|
$
|
132,766
|
|
Institutional revenue
|
8,383
|
|
|
8,586
|
|
|
18,442
|
|
|
17,104
|
|
||||
Other revenue
|
5,841
|
|
|
638
|
|
|
4,474
|
|
|
721
|
|
||||
Total non-interest revenue
|
111,559
|
|
|
69,504
|
|
|
204,491
|
|
|
150,591
|
|
||||
Interest revenue
|
314
|
|
|
401
|
|
|
651
|
|
|
764
|
|
||||
Interest expense
|
309
|
|
|
142
|
|
|
627
|
|
|
222
|
|
||||
Total net interest revenue
|
5
|
|
|
259
|
|
|
24
|
|
|
542
|
|
||||
Net revenue
|
$
|
111,564
|
|
|
$
|
69,763
|
|
|
$
|
204,515
|
|
|
$
|
151,133
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
(amounts in thousands)
|
|
(amounts in thousands)
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Total Operating Expenses
|
$
|
121,548
|
|
|
$
|
75,314
|
|
|
$
|
201,500
|
|
|
$
|
150,113
|
|
As a percentage of net revenue
|
108.9
|
%
|
|
108.0
|
%
|
|
98.5
|
%
|
|
99.3
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
(amounts in thousands)
|
|
(amounts in thousands)
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Employee compensation and benefits
|
$
|
30,473
|
|
|
$
|
24,093
|
|
|
$
|
52,612
|
|
|
$
|
45,935
|
|
As a percentage of net revenue
|
27.3
|
%
|
|
34.5
|
%
|
|
25.7
|
%
|
|
30.4
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
(amounts in thousands)
|
|
(amounts in thousands)
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Referral fees
|
$
|
29,539
|
|
|
$
|
20,537
|
|
|
$
|
56,117
|
|
|
$
|
41,225
|
|
As a percentage of net revenue
|
26.5
|
%
|
|
29.4
|
%
|
|
27.4
|
%
|
|
27.3
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
(amounts in thousands)
|
|
(amounts in thousands)
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Trading expenses
|
$
|
8,226
|
|
|
$
|
7,169
|
|
|
$
|
15,274
|
|
|
$
|
14,057
|
|
As a percentage of net revenue
|
7.4
|
%
|
|
10.3
|
%
|
|
7.5
|
%
|
|
9.3
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
(amounts in thousands)
|
|
(amounts in thousands)
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Communications and technology
|
$
|
5,835
|
|
|
$
|
3,829
|
|
|
$
|
8,593
|
|
|
$
|
7,823
|
|
As a percentage of net revenue
|
5.2
|
%
|
|
5.5
|
%
|
|
4.2
|
%
|
|
5.2
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
(amounts in thousands)
|
|
(amounts in thousands)
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
General and administrative
|
$
|
14,143
|
|
|
$
|
9,850
|
|
|
$
|
23,463
|
|
|
$
|
19,057
|
|
As a percentage of net revenue
|
12.7
|
%
|
|
14.1
|
%
|
|
11.5
|
%
|
|
12.6
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
(amounts in thousands)
|
|
(amounts in thousands)
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Selling and marketing
|
$
|
8,415
|
|
|
$
|
5,199
|
|
|
$
|
12,973
|
|
|
$
|
11,315
|
|
As a percentage of net revenue
|
7.5
|
%
|
|
7.5
|
%
|
|
6.3
|
%
|
|
7.5
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
(amounts in thousands)
|
|
(amounts in thousands)
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Purchased intangible amortization
|
$
|
4,257
|
|
|
$
|
1,574
|
|
|
$
|
6,408
|
|
|
$
|
2,613
|
|
As a percentage of net revenue
|
3.8
|
%
|
|
2.3
|
%
|
|
3.1
|
%
|
|
1.7
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
(amounts in thousands)
|
|
(amounts in thousands)
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Depreciation and amortization
|
$
|
2,738
|
|
|
$
|
1,798
|
|
|
$
|
4,713
|
|
|
$
|
4,008
|
|
As a percentage of net revenue
|
2.5
|
%
|
|
2.6
|
%
|
|
2.3
|
%
|
|
2.7
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
(amounts in thousands)
|
|
(amounts in thousands)
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Bad debt provision
|
$
|
1,236
|
|
|
$
|
582
|
|
|
$
|
4,560
|
|
|
$
|
1,162
|
|
As a percentage of net revenue
|
1.1
|
%
|
|
0.8
|
%
|
|
2.2
|
%
|
|
0.8
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
(amounts in thousands)
|
|
(amounts in thousands)
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Acquisition expenses
|
$
|
2,442
|
|
|
$
|
202
|
|
|
$
|
2,479
|
|
|
$
|
628
|
|
As a percentage of net revenue
|
2.2
|
%
|
|
0.3
|
%
|
|
1.2
|
%
|
|
0.4
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
(amounts in thousands)
|
|
(amounts in thousands)
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Restructuring expenses
|
$
|
1,935
|
|
|
$
|
212
|
|
|
$
|
1,935
|
|
|
$
|
571
|
|
As a percentage of net revenue
|
1.7
|
%
|
|
0.3
|
%
|
|
0.9
|
%
|
|
0.4
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
(amounts in thousands)
|
|
(amounts in thousands)
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Integration expenses
|
$
|
12,309
|
|
|
$
|
269
|
|
|
$
|
12,373
|
|
|
$
|
1,719
|
|
As a percentage of net revenue
|
11.0
|
%
|
|
0.4
|
%
|
|
6.0
|
%
|
|
1.1
|
%
|
Entity Name
|
Cash
|
|
Undistributed
Earnings
|
||||
GAIN Capital-Forex.com U.K., Ltd.
|
$
|
438.2
|
|
|
$
|
96.0
|
|
GAIN Capital UK, Ltd.
|
268.7
|
|
|
—
|
|
||
Forex.com Japan Co., Ltd.
|
69.8
|
|
|
—
|
|
||
GAIN Capital Forex.com Australia, Pty. Ltd.
|
24.7
|
|
|
—
|
|
||
GFT Global Markets UK Ltd.
|
—
|
|
|
49.2
|
|
||
GFT Global Markets Asia Pte., Ltd.
|
8.1
|
|
|
—
|
|
||
GAIN Capital-Forex.com Hong Kong, Ltd.
|
2.8
|
|
|
—
|
|
||
GAIN Capital-Forex.com Canada Ltd.
|
5.8
|
|
|
—
|
|
||
GAIN Capital Singapore Pte. Ltd.
|
26.8
|
|
|
0.5
|
|
||
GAIN Capital Australia Pty Ltd.
|
17.0
|
|
|
0.3
|
|
||
Galvan Research and Trading Ltd.
|
1.1
|
|
|
4.3
|
|
||
GAIN Global Markets, Inc.
|
0.3
|
|
|
—
|
|
||
Faraday Research LLP
|
0.3
|
|
|
0.7
|
|
||
GTX Bermuda Ltd.
|
3.0
|
|
|
5.2
|
|
||
Gain Global Markets Bermuda, Ltd.
|
0.5
|
|
|
—
|
|
||
Total
|
$
|
867.1
|
|
|
$
|
156.2
|
|
|
Minimum Regulatory
|
|
Capital Levels
|
|
Excess Net
|
||||||
Entity Name
|
Capital Requirements
|
|
Maintained
|
|
Capital
|
||||||
GAIN Capital Group, LLC
|
$
|
25.1
|
|
|
$
|
32.6
|
|
|
$
|
7.5
|
|
GAIN Capital UK, Ltd.
|
41.6
|
|
|
94.1
|
|
|
52.5
|
|
|||
GAIN Capital-Forex.com U.K., Ltd.
|
32.1
|
|
|
64.0
|
|
|
31.9
|
|
|||
Forex.com Japan Co., Ltd.
|
3.6
|
|
|
8.5
|
|
|
4.9
|
|
|||
GAIN Capital-Forex.com Hong Kong, Ltd.
|
1.9
|
|
|
2.7
|
|
|
0.8
|
|
|||
GFT Global Markets Asia Pte., Ltd.
|
0.7
|
|
|
3.1
|
|
|
2.4
|
|
|||
GAIN Capital Forex.com Australia, Pty. Ltd.
|
0.8
|
|
|
2.6
|
|
|
1.8
|
|
|||
Galvan Research and Trading, Ltd.
|
0.8
|
|
|
4.5
|
|
|
3.7
|
|
|||
GAIN Capital-Forex.com Canada Ltd.
|
0.2
|
|
|
1.5
|
|
|
1.3
|
|
|||
GAIN Global Markets, Inc.
|
0.1
|
|
|
0.2
|
|
|
0.1
|
|
|||
GAIN Capital Securities, Inc.
|
0.1
|
|
|
0.4
|
|
|
0.3
|
|
|||
GAIN Capital Singapore Pte. Ltd.
|
0.7
|
|
|
3.2
|
|
|
2.5
|
|
|||
GAIN Capital Australia Pty Ltd.
|
0.8
|
|
|
1.8
|
|
|
1.0
|
|
|||
Global Assets Advisors, LLC
|
0.1
|
|
|
0.9
|
|
|
0.8
|
|
|||
Total
|
$
|
108.6
|
|
|
$
|
220.1
|
|
|
$
|
111.5
|
|
|
As of June 30, 2015
|
|
As of December 31, 2014
|
||||
Cash & cash equivalents
|
$
|
135.0
|
|
|
$
|
139.4
|
|
Short term investments
(1)
|
0.3
|
|
|
0.2
|
|
||
Receivable from banks & brokers
(2)
|
157.0
|
|
|
134.9
|
|
||
Free operating cash
|
292.3
|
|
|
274.5
|
|
||
Less: Minimum regulatory capital requirements
|
(108.6
|
)
|
|
(76.3
|
)
|
||
Free cash available
(3)
|
$
|
183.7
|
|
|
$
|
198.2
|
|
(1)
|
Reflects cash that would be received upon the liquidation of short term investments. We estimate that all short term investments as of the date indicated could be liquidated within one to two business days.
|
(2)
|
Reflects cash that would be received from brokers following the close-out of all open positions. We estimate that liquidation of all open positions as of the date indicated could be completed within one to two business days.
|
(3)
|
Excludes current liabilities, capital charges associated with open positions, as well as convertible senior notes, the earliest of which are not due until 2018 and, thus, do not factor into our assessment of current liquidity.
|
|
For the Six Months Ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
Cash provided by/(used for) operating activities
|
$
|
16,861
|
|
|
$
|
(17,306
|
)
|
Cash used for investing activities
|
(11,779
|
)
|
|
(10,814
|
)
|
||
Cash used for financing activities
|
(12,379
|
)
|
|
(1,999
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
2,916
|
|
|
3,181
|
|
||
Decrease in cash and cash equivalents
|
$
|
(4,381
|
)
|
|
$
|
(26,938
|
)
|
•
|
The volatility of our stock price;
|
•
|
The expected life of the option;
|
•
|
Risk free interest rates; and
|
•
|
Expected dividend yield.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
(1)
|
|
Total Number of Shares Purchased
(1)
|
|
Average Price Paid per Share
(1)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(1)
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
(1)(2)
|
||||||
January 1, 2015-January 31, 2015
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
8,528,167
|
|
|
February 1, 2015-February 28, 2015
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
8,528,167
|
|
|
March 1, 2015-March 31, 2015
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
8,528,167
|
|
|
April 1, 2015-April 30, 2015
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
8,528,167
|
|
|
May 1, 2015-May 31, 2015
|
|
21,132
|
|
|
$
|
9.46
|
|
|
21,132
|
|
|
$
|
8,327,753
|
|
June 1, 2015-June 30, 2015
|
|
20,801
|
|
|
$
|
9.61
|
|
|
20,801
|
|
|
$
|
8,127,346
|
|
ITEM 6.
|
EXHIBITS
|
Exhibit No.
|
Description
|
|||
10.1†
|
Employment Agreement, dated as of May 5, 2015, by and between the Company and Glenn Stevens.*
|
|||
10.2†
|
Employment Agreement, dated as of May 5, 2015, by and between the Company and Samantha Roady.*
|
|||
10.3†
|
Employment Agreement, dated as of May 5, 2015, by and between the Company and Diego Rotsztain.*
|
|||
10.4†
|
Employment Agreement, dated as of May 5, 2015, by and between the Company and Jeffrey Scott.*
|
|||
31.1
|
Certification of Chief Executive Officer pursuant to rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.*
|
|||
31.2
|
Certification of Chief Financial Officer pursuant to rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.*
|
|||
32.1
|
Certification of Chief Executive Officer as required by section 906 of the Sarbanes-Oxley Act of 2002.*
|
|||
32.2
|
Certification of Chief Financial Officer as required by section 906 of the Sarbanes-Oxley Act of 2002.*
|
|||
101.INS
|
XBRL Instance
|
|||
101.SCH
|
XBRL Taxonomy Extension Schema
|
|||
101.CAL
|
XBRL Taxonomy Extension Calculation
|
|||
101.DEF
|
XBRL Taxonomy Extension Definition
|
|||
101.LAB
|
XBRL Taxonomy Extension Labels
|
|||
101.PRE
|
XBRL Taxonomy Extension Presentation
|
*
|
Filed herewith.
|
|||
†
|
Compensation related contract.
|
|
|
|
Date: August 10, 2015
|
|
/s/ Glenn H. Stevens
|
|
|
Glenn H. Stevens
|
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
Date: August 10, 2015
|
|
/s/ Jason Emerson
|
|
|
Jason Emerson
|
|
|
Chief Financial Officer (Principal Financial and Accounting Officer)
|
Exhibit No.
|
Description
|
|||
10.1†
|
Employment Agreement, dated as of May 5, 2015, by and between the Company and Glenn Stevens.*
|
|||
10.2†
|
Employment Agreement, dated as of May 5, 2015, by and between the Company and Samantha Roady.*
|
|||
10.3†
|
Employment Agreement, dated as of May 5, 2015, by and between the Company and Diego Rotsztain.*
|
|||
10.4†
|
Employment Agreement, dated as of May 5, 2015, by and between the Company and Jeffrey Scott.*
|
|||
31.1
|
Certification of Chief Executive Officer pursuant to rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.*
|
|||
31.2
|
Certification of Chief Financial Officer pursuant to rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.*
|
|||
32.1
|
Certification of Chief Executive Officer as required by section 906 of the Sarbanes-Oxley Act of 2002.*
|
|||
32.2
|
Certification of Chief Financial Officer as required by section 906 of the Sarbanes-Oxley Act of 2002.*
|
|||
101.INS
|
XBRL Instance
|
|||
101.SCH
|
XBRL Taxonomy Extension Schema
|
|||
101.CAL
|
XBRL Taxonomy Extension Calculation
|
|||
101.DEF
|
XBRL Taxonomy Extension Definition
|
|||
101.LAB
|
XBRL Taxonomy Extension Labels
|
|||
101.PRE
|
XBRL Taxonomy Extension Presentation
|
*
|
Filed herewith.
|
|||
†
|
Compensation related contract.
|
GAIN CAPITAL HOLDINGS, INC.
|
|
By:
|
/s/ Peter Quick
|
|
Name: Peter Quick
|
|
Title: Chairman of the Board
|
/s/ Glenn H. Stevens
|
Glenn H. Stevens
|
GAIN CAPITAL HOLDINGS, INC.
|
|
By:
|
/s/ Glenn H. Stevens
|
|
Name: Glenn H. Stevens
|
|
Title: President and Chief Executive Officer
|
/s/ Samantha Roady
|
Samantha Roady
|
GAIN CAPITAL HOLDINGS, INC.
|
|
By:
|
/s/ Glenn H. Stevens
|
|
Name: Glenn H. Stevens
|
|
Title: President and Chief Executive Officer
|
/s/ Diego Rotsztain
|
Diego Rotsztain
|
GAIN CAPITAL HOLDINGS, INC.
|
|
By:
|
/s/ Glenn Stevens
|
|
Name: Glenn H. Stevens
|
|
Title: President and Chief Executive Officer
|
/s/ Jeffrey Scott
|
Jeffrey Scott
|
1.
|
I have reviewed this quarterly report on Form 10-Q of GAIN Capital Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 10, 2015
|
|
/s/ Glenn H. Stevens
|
|
|
Glenn H. Stevens
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of GAIN Capital Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 10, 2015
|
|
/s/ Jason Emerson
|
|
|
Jason Emerson
|
|
|
Chief Financial Officer
|
|
|
|
1.
|
The accompanying quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2015 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: August 10, 2015
|
|
/s/ Glenn H. Stevens
|
|
|
Glenn H. Stevens
|
|
|
Chief Executive Officer and President
|
|
|
(Principal Executive Officer)
|
1.
|
The accompanying quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2015 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: August 10, 2015
|
|
/s/ Jason Emerson
|
|
|
Jason Emerson
|
|
|
Chief Financial Officer
|