FCStone Group, Inc. Announces Second Quarter Results


KANSAS CITY, Mo., April 9, 2009 (GLOBE NEWSWIRE) -- FCStone Group, Inc. (Nasdaq:FCSX), a commodity risk management firm, today announced financial results for its fiscal 2009 second quarter ended February 28, 2009.

Second Quarter Results

Revenues, net of cost of commodities sold, a non-GAAP financial measure, were $53.5 million in the three months ended February 28, 2009, compared to $91.2 million in the prior year quarter. The Company recorded a net loss for the second quarter of $50.2 million, or $1.80 per diluted share, compared to net income of $12.1 million, or $0.42 per diluted share, in the prior year quarter.

Results for the second quarter of 2009 were adversely impacted by an incremental increase in our bad debt provision of $51.0 million, net of tax, or $1.83 per diluted share, in the second quarter 2009. The provision is primarily related to the previously-reported energy trading customer account which had experienced significant losses. As announced on March 12, 2009, substantially all of the positions and liability related to the account were subsequently transferred to a third party. Excluding the bad debt provision, net income for the second quarter of 2009 would amount to $0.2 million, net of tax, or $0.01 per diluted share.

"Notwithstanding the dual impacts of the currently illiquid and credit-challenged commodities markets and the now-transferred energy trading account on our results, FCStone's core business is healthy," said Pete Anderson, President and Chief Executive Officer of FCStone. "Our Commodity and Risk Management consulting business has historically represented as much as 75 percent of FCStone's profits and is the primary driver of our business. Our customer relationships are solid, the energy and agriculture verticals that comprise the biggest piece of our business are beginning to see improving fundamentals, and we are aggressively making inroads into new categories domestically and internationally. We are well-positioned and are focused sharply on our core strategy of providing conservative risk management consulting services, platforms and strategies to our targeted market segments, which we expect to be a growth business as markets recover."

The following table presents results on a total and per share basis.



                         Three Months Ended         Six Months Ended
                         Feb. 28,   Feb. 29,      Feb. 28,    Feb. 29,
                       ---------------------    ----------------------
                          2009        2008         2009         2008
                       ---------   ---------    ---------    ---------
 Total revenues        $  56,645   $  92,042    $ 142,197    $ 165,676
 Income (loss)
  from continuing
  operations
  before income
  tax expense            (86,848)     28,489      (91,543)      49,570
 Net income (loss)
  from continuing
  operations(1)(2)(3)    (50,215)     17,789      (53,060)      30,920
 Loss from
  discontinued
  operations, net
  of tax                      --      (5,673)        (131)      (5,719)
 Net income
  (loss)(1)(2)(3)        (50,215)     12,116      (53,191)      25,201
 Diluted weighted
  average shares
  outstanding             27,923      29,104       27,918       28,940
 Diluted earnings
  (loss) per share,
  continuing
  operations(1)(2)(3)   $  (1.80)   $   0.61     $  (1.91)    $   1.07
 Diluted loss per
  share,
  discontinued
  operations            $     --    $  (0.19)    $     --     $  (0.20)
 Diluted earnings
  (loss) per
  share(1)(2)(3)        $  (1.80)   $   0.42     $  (1.91)    $   0.87


 1) Amounts for the three and six months ended February 28, 2009
    include bad debt provisions, net of tax, of $51.0 million and 
    $66.0 million, respectively, or $1.83 and $2.37 per diluted 
    share, respectively.

 2) Amounts for the three and six months ended February 28, 2009
    include a charge for goodwill impairment, net of tax, of $0.4 
    million and $1.1 million, respectively, or $0.01 and $0.04 per
    diluted share, respectively.

 3) Amounts for the six months ended February 28, 2009 include gains
    of $3.8 million, net of tax, on the sale of excess exchange stock
    and trading rights. Amounts for the six months ended February 29,
    2008 include gains of $1.8 million, net of tax, on the sale of 
    excess exchange stock and trading rights.

The second quarter revenues reflect a decrease in exchange-contract volume in both the Commodity and Risk Management Services segment and the Clearing and Execution Services segment. Consulting revenues increased year over year, but were offset by a decline in over-the-counter revenues and contract volume. Interest income decreased due to significantly lower short-term interest rates on a lower level of customer deposits.

Costs and expenses, excluding cost of commodities sold and the provision for bad debts, declined $9.2 million compared to the prior year, primarily due to lower volume-related costs of broker commissions, pit brokerage and clearing fees, offset by an increase in legal and professional fees related to the deficit account, recorded in the quarter. Employee compensation expenses in the second quarter includes $2.8 million of long-term incentive and share-based compensation, as required under U.S. GAAP, which was more than offset by the decrease in broker commissions. The Company also recognized an impairment loss on recently-recorded goodwill of $0.7 million in the second quarter of 2009.

Operating Segments

FCStone's income (loss) from continuing operations before minority interest and income tax expense by segment and certain other data are outlined below for the periods noted.



 
                        Three Months Ended         Six Months Ended
                        Feb. 28,   Feb. 29,      Feb. 28,    Feb. 29,
                       ---------------------    ----------------------
                          2009        2008         2009         2008
                       ---------   ---------    ---------    ---------
                         ($ in thousands)          ($ in thousands)
 
 Segment Data:
 Income (loss) from  
  continuing
  operations before 
  minority interest 
  and income tax 
  expense:

 Commodity and 
  Risk Management
  Services (1)(5)    $   3,859    $  21,764    $   8,480     $  38,927
 Clearing and
  Execution
  Services (2)(3)      (84,811)       8,656      (92,370)       13,812
 Financial
  Services                  60          471          120           527
 Corporate and
  Other (4)             (6,190)      (2,402)      (8,128)       (3,696)
                       ---------   ---------    ---------   ---------
                     $ (87,082)    $ 28,489   $  (91,898)   $   49,570
                       ---------   ---------    ---------   ---------
 
 Other Data:
 Non-GAAP - EBITDA
  (1)(2)(3)(4)(5)    $ (84,294)   $  30,674   $  (85,846)   $   53,312
 Customer
  Segregated Assets, 
  end of period 
  (000's)           $1,117,562   $1,452,861   $1,117,562    $1,452,861
 Exchange contract
  trading volume
  (000's)               16,271       27,191       37,605        50,468
 OTC contract
  trading volume
  (000's)                  101          370          359           672


 1) Amounts for the three and six months ended February 28, 2009 
    include goodwill impairment charges of $0.7 million and $1.0 
    million, respectively.

 2) Amounts for the six months ended February 28, 2009 include a 
    goodwill impairment charge of $0.9 million.

 3) Amounts for the six months February 28, 2009 include gains of
    $4.9 million on the sale of excess exchange stock and trading 
    rights.

 4) Amounts for the six months February 28, 2009 include gains of 
    $1.6 million on the sale of excess exchange stock and trading 
    rights.

 5) Amounts for the six months February 28, 2008 include gains of 
    $2.9 million on the sale of excess exchange stock and trading
    rights.

In the Commodity and Risk Management Services segment, net revenues were $25.5 million in the second quarter ended February 28, 2009, compared to $46.5 million in the prior year quarter. The core revenues of this segment, commission and clearing fees and service, consulting and brokerage fees, decreased $13.6 million, or 35.5% over the prior year second quarter. Interest income declined $6.8 million, primarily due to a significant decline in short-term interest rates. Segment income before minority interest and income taxes for the second quarter 2009 was $3.9 million, compared to $21.8 million in the prior year quarter. Segment income before minority interest and income taxes decreased from the prior year second quarter, primarily due to the decline in interest income and over-the-counter brokerage. The decline in over-the-counter brokerage was primarily related to a slowdown in the renewable fuels industry and reduced volumes from our Latin American/Brazilian customers. This decline was partially offset by increased revenues from customers in our energy and food service operations.

For the Clearing and Execution Services segment, revenues were $27.5 million in the quarter ended February 28, 2009, compared to $40.9 million in the prior year quarter. The segment lost $84.8 million in the second quarter, compared to net income of $8.7 million in the prior year quarter. This segment loss was primarily due to the $86.3 million bad debt provision related to the previously-discussed deficit in a third-party energy trading account, related legal and professional fees, as well as lower interest income due to a decline in customer deposits and interest rates. Excluding the bad debt provision, second quarter 2009 segment income was $1.7 million. Exchange-traded volume in this segment declined by 10.6 million contracts primarily as a function of overall market conditions as well as actions taken by management to reduce exposure to larger and longer-tenured third-party clearing accounts.

The Financial Services segment reported revenues of $0.8 million in the second quarter ended February 28, 2009, compared to $3.5 million in the prior year quarter. Segment income was $60 thousand for the second quarter, compared to $471 thousand in the prior year quarter.

"While market and credit conditions remain challenging and volatile, our business model is still sound, as evidenced by continued growth in our risk management consulting revenues," stated Bill Dunaway, Chief Financial Officer. "Our balance sheet is healthy with adequate capital to meet all regulatory requirements, and the flexibility to grow our core commodity risk management business for the benefit of our company in the quarters and years ahead."

Conference Call & Web Cast

A conference call will be held today, Thursday, April 9, 2009 at 9:00 a.m. (ET). A live web cast of the conference call as well as a replay will be available online on the Company's corporate web site at http://www.fcstone.com. Participants can also access the call by dialing 800-860-2442 (within the United States), or 412-858-4600 (international callers) and reference the FCStone call approximately ten minutes prior to the start time. A replay of the call will be available approximately one hour after the call has ended and will be available until 5:00 p.m. ET on Friday, May 8, 2009. To access the replay, dial 877-344-7529 (within the United States), or 412-317-0088 (international callers) and enter the conference ID number 429169.

About FCStone Group, Inc.

FCStone Group, Inc., along with its affiliates, is an integrated commodity risk management company providing risk management consulting and transaction execution services to commercial commodity intermediaries, end-users and producers. The firm assists primarily middle market customers in optimizing their profit margins and mitigating exposure to commodity price risk. In addition to risk management consulting services, FCStone, LLC, operates one of the leading independent clearing and execution platforms for exchange-traded futures and options contracts. FCStone Group, Inc., serves more than 8,000 customers and in the 12 months ended February 28, 2009, executed more than 86.8 million derivative contracts in the exchange-traded and over-the-counter markets. The FCStone Group companies work in all the major commodity areas including agriculture, energy, renewable fuels, foods, forestry, cotton and textile, dairy and currency exchange. Headquartered in the Midwest, it has offices located throughout the world and is a clearing member of all major North American Futures exchanges. FCStone Group, Inc., trades on the NASDAQ Global Select Market under the symbol "FCSX."

Forward-Looking Statements This press release may include forward-looking statements regarding, among other things, our plans, strategies and prospects, both business and financial. All statements other than statements of current or historical fact contained in this press release are forward-looking statements. The words "believe," "expect," "anticipate," "should," "plan," "will," "may," "could," "intend," "estimate," "predict," "potential," "continue" or the negative of these terms and similar expressions, as they relate to FCStone Group, Inc., are intended to identify forward-looking statements.

We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. They can be affected by inaccurate assumptions, including the risks, uncertainties and assumptions described in the Company's filings with the Securities and Exchange Commission. In light of these risks, uncertainties and assumptions, the forward-looking statements in this press release may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. When you consider these forward-looking statements, you should keep in mind these risk factors and other cautionary statements in this press release.

Our forward-looking statements speak only as of the date of this press release. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Use of NON-GAAP Financial Information

In this press release we disclose "revenues, net of cost of commodities sold" and "EBITDA", both of which are non-GAAP financial measure. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure, calculated and prepared in accordance with generally accepted accounting principles in the United Sates (GAAP). Revenues, net of cost of commodities sold, is not a substitute for the GAAP measure of total revenues. EBITDA is not a substitute for the GAAP measure of net income or cash flows. Such non-GAAP financial measures are reconciled to its closest GAAP measure, in accordance with the Securities and Exchange Commission rules, and is included in the attached supplemental data. Management believes that these non-GAAP financial measures are useful to both management and its stockholders in their analysis of the company's business and operating performance.



                     FCSTONE GROUP, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)
                    (in thousands, except per share amounts)
         

                         Three Months Ended        Six Months Ended
                         Feb. 28,   Feb. 29,     Feb. 28,     Feb. 29,
                       -----------------------   ---------------------
                          2009        2008         2009         2008
                       ---------    --------    ---------    ---------
 Revenues:
   Commissions and
    clearing fees      $  34,551    $ 45,613    $  79,051    $  84,995
   Service,
    consulting and
    brokerage fees        14,088      24,183       33,629       40,457
   Interest                4,711      18,858       18,278       32,239
   Other                     127       2,038        7,894        6,635
   Sales of
    commodities            3,168       1,350        3,345        1,350
                       ---------    --------    ---------    ---------
 Total revenues           56,645      92,042      142,197      165,676
                       ---------    --------    ---------    ---------
 Costs and expenses:
   Cost of
    commodities
    sold                   3,108         830        3,280          830
   Employee
    compensation
    and broker
    commissions           13,019      15,197       28,389       28,444
   Pit brokerage
    and clearing
    fees                  21,366      25,392       48,766       46,177
   Introducing
    broker
    commissions            4,814       8,747       12,256       16,075
   Employee
    benefits and
    payroll taxes          2,467       2,913        4,301        5,930
   Interest                1,083       1,809        2,449        3,010
   Depreciation and
    amortization             757         376        1,360          732
   Provision for
    bad debt              87,168         109      112,901          184
   Impairment loss
    on goodwill              714          --        1,888           --
   Other expenses          9,231       8,180       18,505       14,724
                       ---------    --------    ---------    ---------
 Total costs and
  expenses               143,727      63,553      234,095      116,106
                       ---------    --------    ---------    ---------
 Income (loss) from
  continuing
  operations
  before income tax
  expense and
  minority interest      (87,082)     28,489      (91,898)      49,570
 Minority interest          (234)         --         (355)          --
                       ---------    --------    ---------    ---------
 Income (loss) from
  continuing
  operations
  before income
  tax expense            (86,848)     28,489      (91,543)      49,570
 Income tax expense
  (benefit)              (36,633)     10,700      (38,483)      18,650
                       ---------    --------    ---------    ---------
 Net income (loss)
  from continuing
  operations             (50,215)     17,789      (53,060)      30,920
 Loss from
  discontinued
  operations, net
  of tax                      --      (5,673)        (131)      (5,719)
                       ---------    --------    ---------    ---------
 Net income (loss)     $ (50,215)   $ 12,116    $ (53,191)   $  25,201
                       =========    ========    =========    =========
 Basic shares
  outstanding             27,923      27,709       27,918       27,565
 Diluted shares
  outstanding             27,923      29,104       27,918       28,940






               FCSTONE GROUP, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                            (Unaudited)
               (in thousands, except share amounts)


                                              Feb. 28,     August 31,
                                                2009          2008
                                           ------------   ------------
                   ASSETS 
 Cash and cash equivalents:
   Unrestricted                              $   10,485     $   73,646
   Segregated                                   113,550          8,355
 Commodity deposits and 
  receivables:
   Commodity exchanges
    and clearing
    organizations--customer segregated          973,744      1,306,477
   Proprietary commodity accounts               293,619        253,998
   Receivables from customers, 
    net of allowance for
    doubtful accounts                            21,351         19,603
                                           ------------   ------------
     Total commodity deposits and 
      receivables                             1,288,714      1,580,078
                                           ------------   ------------
 Marketable securities, at fair
  value--customer segregated 
  and other                                      78,354        241,333
 Counterparty deposits and trade
  accounts receivable, net of
  allowance for doubtful accounts                45,806         71,714
 Open contracts receivable                      262,895        308,016
 Notes receivable and advances                    9,959         77,979
 Inventories                                     11,534             --
 Exchange memberships and stock                   3,301         11,473
 Deferred tax assets                             18,286         11,519
 Income tax receivable                           44,755             --
 Equipment, furniture, software
  and improvements, net of 
  accumulated depreciation                        8,062          7,267
 Other assets                                    25,047         30,098
                                           ------------   ------------
     Total assets                          $  1,920,748   $  2,421,478
                                           ============   ============
              
       LIABILITIES AND STOCKHOLDERS' EQUITY
 Liabilities:
 Commodity and customer 
  regulated accounts payable               $  1,105,970   $  1,486,299
 Trade accounts payable and
  advances                                      294,558        257,941
 Open contracts payable                         247,408        297,926
 Accrued expenses                                33,637         51,709
 Notes payable and repurchase
  obligations                                    17,869         79,190
 Subordinated debt                               41,000         16,000
                                           ------------   ------------
     Total liabilities                        1,740,442      2,189,065
                                           ------------   ------------
 Minority interest                                7,000          4,855
 Stockholders' equity:
 Preferred stock, no par value, 
  authorized 20,000,000 at February 28,
  2009 and August 31, 2008, respectively; 
  none issued and outstanding at
  February 28, 2009 and, August 31, 2008, 
  respectively                                       --             --
 Common stock, $0.0001 par value, 
  authorized 100,000,000 at February 28, 
  2009 and 40,000,000 at August 31, 2008; 
  issued and outstanding 27,930,188 and 
  27,911,127 shares at February 28, 2009 
  and August 31, 2008, respectively             108,057        108,016
 Additional paid-in capital                      12,347         10,777
 Treasury stock                                  (2,185)        (2,185)
 Accumulated other comprehensive loss            (4,304)        (1,632)
 Retained earnings                               59,391        112,582
                                           ------------   ------------
     Total stockholders' equity                 173,306        227,558
                                           ------------   ------------
                                           ------------   ------------
 Commitments and contingencies
     Total liabilities and stockholders' 
      equity                               $  1,920,748   $  2,421,478
                                           ============   ============






                FCSTONE GROUP, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (Unaudited)
                          (in thousands)
                        

                                                  Six Months Ended
                                                Feb. 28,      Feb. 29,
                                             -------------------------
                                                2009           2008
                                             ----------    -----------
 Cash flows from operating 
  activities:
   Net income (loss)                         $  (53,191)   $    25,201
   Plus: Loss from
    discontinued operations                         131          5,719
                                             ----------    -----------
   Income (loss) from
    continuing  operations                      (53,060)        30,920
   Adjustments to reconcile 
    income from continuing 
    operations to net cash
    flows from operating activities:
   Provision for bad debts                      112,901            184
   Depreciation and  amortization                 1,360            732
   Impairment loss on goodwill                    1,888            101
   Gain on sale of exchange stock 
    and trading rights                           (6,444)        (2,930)
   Gain on sale of other assets                      --           (520)
   Stock-based compensation                       1,731            753
   Equity in earnings of 
    affiliates, net of distributions               (677)        (1,398)
   Minority interest                               (355)            --
   Deferred income taxes                         (4,591)            --
   Excess tax benefit of stock 
    option exercises                                (14)        (5,381)
   Change in commodity accounts
    receivable/payable, marketable
    securities, customer segregated 
    funds, counterparty deposits 
    and advances, net                          (123,936)      (126,283)
   Change in open contracts
    receivable/payable, net                      (5,397)         2,429
   Increase in counterparty
    deposits and trade
    accounts receivable                          24,208        (63,140)
   Increase in income tax receivable            (44,755)            --
   Increase in other assets                        (576)        (7,511)
   Increase in trade accounts payable
    and advances                                 23,209        141,196
   (Decrease) increase in accrued 
    expenses                                    (17,894)         7,753
                                             ----------    -----------
     Net cash used in operating activities      (92,402)       (23,095)
                                             ----------    -----------
 Cash flows from investing activities:
   Purchase of equipment, 
    furniture, software
    and improvements                             (1,835)        (2,788)
   Cash paid in connection with
    acquisitions of businesses, 
    net of cash acquired                         (1,220)        (6,725)
   Equity investment                               (200)            --
   Return of equity investment                      892             --
   Proceeds (issuance)of notes
    receivable, net                              52,727        (93,390)
   Proceeds from the sale of exchange
   stock and trading rights                       9,725          3,498
   Proceeds from the sale of 
    other intangible assets                          --          1,350
   Purchase of other intangible assets               --         (1,049)
                                             ----------    -----------
     Net cash provided by (used in) 
      investing activities                       60,089        (99,104)
                                             ----------    -----------
 Cash flows from financing activities:
   (Payments) proceeds from notes 
    payable, net                                (56,321)        86,018
   Proceeds from issuance of
   subsidiary stock                               2,325             --
   Proceeds from exercises of 
    stock options                                    41          2,065
   Treasury stock acquired                           --            (11)
   Excess tax benefit of stock 
    option exercises                                 14          5,381
   Proceeds from subordinated debt               25,500             --
   Payments on subordinated debt                   (500)            --
                                             ----------    -----------
     Net cash (used in) provided by
      financing activities                      (28,941)        93,453
                                             ----------    -----------
 Cash flows from discontinued operations:
   Net cash (used in) provided by
   operating activities                            (422)         1,178
   Net cash used in investing
    activities                                   (1,485)        (1,711)
                                             ----------    -----------
    Net cash used in discontinued 
     operations                                  (1,907)          (533)
                                             ----------    -----------
 Net decrease in cash and cash
  equivalents--unrestricted                     (63,161)       (29,279)
 Cash and cash equivalents-- 
  unrestricted--beginning of period              73,646         90,053
                                             ----------    -----------
 Cash and cash equivalents--
  unrestricted--end of period                $   10,485     $   60,774
                                             ==========    ===========
    Supplemental disclosures of cash
     flow information:
    Interest paid                            $    1,921     $    2,985
    Income taxes paid                        $   10,517     $   13,614
                                             ==========    ===========




 
 Non-GAAP Financial Measures
 The following table reconciles revenues, net of cost of 
  commodities sold, with our total revenues.

                     Three Months Ended            Six Months Ended
                    Feb. 28,     Feb. 29,       Feb. 28,      Feb. 29,
                    ---------------------      -----------------------
                      2009         2008          2009           2008
                    --------     --------      --------       --------
                        ($ in thousands)            ($ in thousands)
 Revenues:
   Commissions 
    and
    clearing 
    fees            $ 34,551     $ 45,613      $ 79,051       $ 84,995
   Service,                                                 
    consulting                                              
    and brokerage                                           
    fees              14,088       24,183        33,629         40,457
   Interest            4,711       18,858        18,278         32,239
   Other                 127        2,038         7,894          6,635
   Sales of                                                 
    commodities        3,168        1,350         3,345          1,350
                    --------     --------      --------       --------
 Total revenues       56,645       92,042       142,197        165,676
 Less: Cost of                                              
  commodities                                               
  sold                 3,108          830         3,280            830
 Revenues, net of                                           
  cost of                                                   
  commodities sold  $ 53,537     $ 91,212      $138,917       $ 164,846
                    ========     ========      ========       ========
                                                            
                                                            
                                                            
                                                            
 The following table reconciles EBITDA with our net income.
                                                            
 
                     Three Months Ended            Six Months Ended
                    Feb. 28,     Feb. 29,       Feb. 28,      Feb. 29,
                    ---------------------      -----------------------
                      2009         2008          2009           2008
                    --------     --------      --------       --------
                        ($ in thousands)            ($ in thousands)
                                                            
 Net income (loss)  $(50,215)     $12,116      $(53,191)     $  25,201
   Plus: interest                                           
    expense            1,083        1,809         2,449          3,010
   Plus:                                                    
    depreciation                                            
    and                                                     
    amortization         757          376         1,360            732
   Plus: income                                             
    tax                                                     
    expense                                                 
    (benefit)        (36,633)      10,700       (38,483)        18,650
   Plus:                                                    
    impairment                                              
    loss on                                                 
    goodwill             714           --         1,888             --
   Plus: loss on                                            
    discontinued                                            
    operations,                                             
    net of tax            --        5,673           131          5,719
                    --------     --------      --------       --------
 EBITDA             $(84,294)    $ 30,674      $(85,846)      $ 53,312
                    ========     ========      ========       ========
                                                            




 
             Commodity and Risk Management Services Segment:
                The following table provides the financial 
                      performance for this segment.

                     Three Months Ended            Six Months Ended
                    Feb. 28,     Feb. 29,       Feb. 28,      Feb. 29,
                    ---------------------      -----------------------
                      2009         2008          2009           2008
                    --------     --------      --------       --------
                        ($ in thousands)            ($ in thousands)
 
 Sales of 
  commodities       $  3,168     $  1,350      $  3,345       $  1,350
 Cost of 
  commodities sold     3,108          830         3,280           830
                    --------     --------      --------       --------
   Gross profit on
    commodities 
    sold                  60          520            65            520
   Commissions 
    and clearing
    fees              10,564       13,965        25,060         25,862
   Service, 
    consulting
    and brokerage
    fees              14,130       24,312        33,715         40,662
   Interest              723        7,532         4,169         13,648
   Other revenues (1)     59          166           331          3,079
                    --------     --------      --------       --------
 Revenues, net of
  cost of 
  commodities
  sold                25,536       46,495        63,340         83,771
 Other costs and 
  expenses:
   Expenses
   (excluding
    interest
    expense)          20,039       24,327        47,228         44,512
   Provision for 
    bad debts            617          350         6,065            275
   Impairment on
    goodwill             714           --         1,012             --
   Interest expense      307           54           555             57
                    --------     --------      --------       --------
 Total costs and
   expenses           21,677       24,731        54,860         44,844
                    --------     --------      --------       --------
                    --------     --------      --------       --------
 Segment income 
  before minority 
  interest and 
  income taxes      $  3,859     $ 21,764      $  8,480       $ 38,927
                    ========     ========      ========       ========
 Exchange contract
  trading volume
  (000's)                592          899         1,396          1,555
 OTC Contract volume
  (000's)            101,445      370,337       358,604        671,595
 
 1) Amounts for the six months February 28, 2008 include gains of
    $2.9 million on the sale of excess stock and trading rights.







                      Clearing and Execution Segment:
                The following table provides the financial 
                      performance for this segment.

                     Three Months Ended            Six Months Ended
                    Feb. 28,     Feb. 29,       Feb. 28,      Feb. 29,
                    ---------------------      -----------------------
                      2009         2008          2009           2008
                    --------     --------      --------       --------
                        ($ in thousands)            ($ in thousands)
 Sales of 
  commodities         $   --       $   --        $   --         $   --
                  ----------     --------     ---------       --------
 Cost of 
  commodities
  sold
   Gross profit 
    on commodities
    sold                  --           --            --             --
   Commissions and
   clearing fees      24,241       31,984        54,531         59,652
   Service,
    consulting
    and brokerage
    fees                  --           --            --             --
   Interest            3,227        8,964        12,333         14,334
   Other 
    revenues(1)           18           --         5,048             --
                  ----------     --------     ---------       --------
 Revenues, net of
  cost of 
  commodities
  sold                27,486       40,948        71,912         73,986
 Other costs and 
  expenses:
   Expenses 
    (excluding
    interest
    expense)          25,273       32,522        55,923         60,233
   Provision for 
    bad debts         86,551         (250)      106,551           (100)
   Impairment on
    goodwill              --           --           876             --
   Interest
    expense              473           20           932             41
                  ----------     --------     ---------       --------
 Total costs and
   expenses          112,297       32,292       164,282         60,174
                  ----------     --------     ---------       --------
 Segment income 
  (loss) before 
  minority 
  interest and 
  income taxes    $  (84,811)    $  8,656     $ (92,370)      $ 13,812
                  ==========     ========     =========       ========
 Exchange contract
  trading volume
  (000's)             15,679       26,292        36,209         48,913

 1) Amounts for the six months February 28, 2009 include gains of 
    $4.9 million on the sale of excess exchange stock and trading
    rights.




  Financial Services Segment:
                The following table provides the financial 
                      performance for this segment.

                     Three Months Ended            Six Months Ended
                    Feb. 28,     Feb. 29,       Feb. 28,      Feb. 29,
                    ---------------------      -----------------------
                      2009         2008          2009           2008
                    --------     --------      --------       --------
                        ($ in thousands)            ($ in thousands)
 Sales of
  commodities         $   --       $   --       $    --         $   --
                  ----------     --------     ---------       --------
 Cost of 
  commodities sold
   Gross profit on
    commodities 
    sold                  --           --            --             --
   Commissions and
    clearing fees         --           --            --             --
   Service, 
    consulting and
    brokerage
    fees                  --           --            --             --
   Interest              739        2,318         1,715          3,900
   Other revenues         39        1,184           177          1,566
                  ----------     --------     ---------       --------
 Revenues, net of 
  cost of 
  commodities sold       778        3,502         1,892          5,466
 Other costs and 
  expenses:
   Expenses 
    (excluding 
    interest
    expense)             405        1,255           787          1,904
   Interest expense      313        1,776           985          3,035
                  ----------     --------     ---------       --------
 Total costs and
  expenses               718        3,031         1,772          4,939
                  ----------     --------     ---------       --------
 Segment income 
  before minority 
  interest
  and income taxes    $   60      $   471       $   120        $   527
                  ==========     ========     =========       ========

            

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