Investment Technology Group, Inc. reinstates plans to commence onshore business operations in Japan.
In its January 27, 2005, earnings conference call, ITG announced that it had elected not to proceed with the project and would take a one-time charge against earnings of $665,000. The decision to reverse the course of action and proceed with opening a Japanese subsidiary was based on further analysis and the conviction that ITG would be able to construct an opportunity to operate in Japan with a lower expense structure than previously proposed while still achieving certain goals.
As a result of these actions, ITG has revised its results for the fourth quarter and full year 2004 to include the reversal of closedown costs of $576,000 that will not be expended. Additionally, ITG will be making a second adjustment to its fourth quarter and full year results to reflect an $806,000 increase to its tax provision relating to the accounting treatment for a tax benefit deriving from a previous acquisition. The net effect of these changes results in a decrease of $230,000 to net income for both the fourth quarter and full year 2004, while diluted earnings per share decreased $0.01 in the fourth quarter but remain unchanged for the full year 2004 at $0.96 due to rounding.
“Expansion into Japan will allow us to complete our international coverage and handle the global trading requirements of our customers,” stated Ray Killian, ITG’s Chairman, President and CEO. “We were able to reduce the initial investment costs by taking an incremental rather than full-footed approach.”
In solidifying its commitment to making the Japanese business successful, ITG has hired its first five Japanese employees to move forward with the business initiative.