Investment Technology Group Reports 2007 Results

Business Wire, Jan 31, 2008

Significant Strength in Non-US Earnings

NEW YORK -- Investment Technology Group, Inc. (NYSE: ITG), a leading provider of technology-based trading services and transaction research, today announced that for the fourth quarter ended December 31, 2007, net income was $30.0 million, up 36 percent from net income of $22.1 million in the fourth quarter of 2006, which included an after-tax restructuring charge of $0.6 million. Earnings were $0.68 per diluted share, an increase of 39 percent versus earnings of $0.49 per diluted share in the fourth quarter of last year. ITG's total revenue for the fourth quarter of 2007 was $196.6 million, 28 percent greater than total revenue of $153.1 million for the fourth quarter of 2006. Pre-tax operating margins in the fourth quarter were 25.7 percent in 2007 and 23.4 percent in 2006. For the full year 2007, pre-tax operating margins were 25.8 percent, compared to 25.6 percent in 2006.

"In 2007, ITG executed aggressively on its strategies for product globalization, asset class diversification and technology innovation, providing clients with solutions for a complex and interconnected global marketplace," said Bob Gasser, ITG's Chief Executive Officer and President. "In the US, ITG focused on integrating derivatives capabilities and leveraging its strong product distribution chain to increase client penetration."

ITG's non-US revenues were a record $57.1 million in the fourth quarter of 2007, a 72 percent increase over revenues of $33.2 million in the fourth quarter of 2006. Non-US pre-tax operating income more than doubled to $7.2 million in the fourth quarter of 2007 from $3.4 million in the fourth quarter of 2006, and the contribution to pro forma diluted operating earnings per share more than doubled to $0.11 from $0.05 in 2006.

For the year ended December 31, 2007, revenues were $731.0 million, net income was $111.1 million, and diluted earnings per share were $2.48. In 2007, pro forma operating revenues increased 25 percent, pro forma operating net income increased 22 percent and pro forma diluted operating earnings per share increased 21 percent. For the full year, pro forma non-US operating revenues were $185.0 million, representing 57 percent growth over pro forma operating revenues of $118.1 million in 2006. ITG's pro forma non-US operating net income was $13.6 million versus $4.8 million in 2006, while its contribution to pro forma diluted operating earnings per share increased to $0.30 in 2007 from $0.11 in 2006.

"ITG's Canadian operating revenues showed continued strength in 2007, increasing 50 percent over 2006," said Mr. Gasser. "In addition, ITG's European revenues grew 67 percent over 2006 as we continued to expand our product line in the region."

Conference Call

ITG has scheduled a conference call today at 11:00 a.m. ET to discuss fourth quarter results. Those wishing to listen to the call should dial 1-800-510-9836 and enter the pass code 31660661 at least 10 minutes prior to the start of the call to ensure connection. The conference call and webcast will also be accessible through ITG's web site at www.itg.com. For those unable to listen to the live broadcast of the call, a replay will be available for one week by dialing 1-888-286-8010 and entering the pass code 76404213. The replay will be available starting approximately two hours after the completion of the conference call.

About ITG

Investment Technology Group, Inc. (ITG), is a specialized brokerage firm that partners with clients globally to provide innovative solutions spanning the entire trading process. A pioneer in electronic trading, ITG has a unique approach that combines pre-trade, order management, trade execution, and post-trade tools to provide continuous improvements in trading and cost efficiency. The firm is headquartered in New York and maintains offices in North America, Europe and the Asia Pacific regions. For additional information, visit www.itg.com.

In addition to historical information, this press release may contain "forward-looking" statements, as defined in the Private Securities Litigation Reform Act of 1995, that reflect management's expectations for the future. A variety of important factors could cause results to differ materially from such statements. These factors include the company's ability to achieve expected future levels of sales; the actions of both current and potential new competitors; rapid changes in technology; financial market volatility; general economic conditions in the United States and elsewhere; evolving industry regulation; cash flows into or redemption from equity funds; effects of inflation; customer trading patterns; and new products and services. These and other risks are described in greater detail in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2006, and other documents filed with the Securities and Exchange Commission and available on the company's web site.

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(1) Certain reclassifications and format changes have been made to prior period amounts to conform to the current period presentation, as a result of ITG Inc. commencing self-clearing of equity trades in May 2007. Receivables previously included in receivables from brokers, dealers and others are now divided among the following two accounts: (i) receivables from brokers, dealers and clearing organizations and (ii) receivables from customers. Similarly, payables previously included in payables to brokers, dealers and others are now divided among the following two accounts: (i) payables to brokers, dealers and clearing organizations and (ii) payables to customers. Additionally, certain payables to brokers for clearance and execution costs previously included in accounts payable and accrued expense were reclassified to payables to brokers, dealers and clearing organizations.