From: newsout@canada-stockwatch.com
Date: Tue, 10 Aug 1999 02:43:42 -0700
Subject: Stockwatch: Versus Technologies Inc - News Release
To:
Versus Technologies third-quarter results
Versus Technologies Inc V
Shares issued 11,619,874 Aug 9 close $10.60
Tue 10 Aug 99 News Release
Mr. Doug Steiner reports
Versus Technologies Inc. has continued its strong revenue growth during the
three months ended June 30, 1999. Revenues were $7.0-million for the third
quarter of 1999, an increase of 79 per cent from $3.9-million for the same
period a year earlier, and up 25 per cent from $5.6-million for the second
quarter of fiscal 1999. Fiscal year-to-date revenues totalled
$17.6-million, an increase of 56 per cent from the previous year.
FINANCIAL HIGHLIGHTS
Three months ended June 30
(in thousands of dollars)
1999 1998
Cash and cash
equivalents 51,403 9,335
Total assets 137,919 111,171
Shareholders equity 54,570 11,481
FINANCIAL HIGHLIGHTS
Three months ended June 30
(in thousands of dollars)
1999 1998
Revenues
E-TRADE Canada 2,722 639
Institutional
services 4,286 3,252
----- -----
Total revenues 7,008 3,891
----- -----
Net loss (1,581) (2,416)
====== ======
Loss per share* (14 cents) (37 cents)
FINANCIAL HIGHLIGHTS
Nine months ended June 30
(in thousands of dollars)
1999 1988
Revenues
E-TRADE Canada 5,630 1,592
Institutional
services 11,944 9,646
------ ------
Total revenues 17,574 11,238
------ ------
Net loss (4,331) (4,530)
====== ======
Loss per share* (51 cents) (70 cents)
-----
*Adjusted retroactively for effects of
share consolidation for comparative
purposes.
The company's strong revenue growth during the quarter is attributable
primarily to E-TRADE Canada's revenue contribution of $2.7 -million, an
increase of 350 per cent from $0.6-million in the third quarter of 1998,
and up 50 per cent from $1.8-million in the second quarter of fiscal 1999.
The company's institutional services business contributed total revenues of
$4.3-million for the third quarter of 1999, an increase of 32 per cent from
the same period last year, and up 13 per cent from $3.8-million for the
second quarter of 1999. Institutional services fiscal year-to-date revenues
were $11.9-million, an increase of 24 per cent from the previous year.
As anticipated, the company incurred a third-quarter operating loss as it
continued to focus on building the infrastructure for future growth through
significant investments in building the E-TRADE Canada brand, improving
customer service, enhancing user functionality and maintaining a robust and
scalable environment. The net loss for the third quarter was $1.6-million,
compared with a net loss of $2.4-million for the third quarter of 1998.
Owing to the higher than anticipated growth in trading volume this year,
and in anticipation of regulatory changes in the electronic financial
services industry, the company continued to make the strategic investments
required to achieve its aggressive aspirations for growth. Going forward,
these expenditures are expected to significantly add to long-term
shareholder value.
"We are pleased to report continued strong revenue growth during the third
quarter of 1999," said Doug Steiner, chairman and chief executive officer
of Versus. "We are encouraged by this continued strength, which reaffirms
our position as the pre-eminent provider of electronic securities trading
services to the retail and institutional Canadian marketplace. We remain
dedicated to providing our customers with leading-edge technologies,
superior customer service and innovative products."
Operating expenses for the third quarter were $8.6-million, an increase of
36 per cent from the third quarter of 1998. Expenses related to brokerage
operations increased with volume, representing approximately 52 per cent of
the total increase in expenses during the period. Fiscal year-to-date
expenses were $21.8-million, an increase of 39 per cent from the same
period in 1998. Expenses relating to telecommunications and data increased
approximately 58 per cent from the third quarter of 1998, owing to a prior
period adjustment as well as a significant rise in variable United States
routing charges during the quarter. In keeping with the company's strategic
plan of increased E-TRADE Canada account acquisition, marketing
expenditures during the third quarter increased 172 per cent from the
comparable period in 1998.
E-TRADE Canada
A record number of transactions drove revenue growth for E-TRADE Canada
during the period. Transactions reached 53,991 for the quarter, up 216 per
cent from 17,094 during the same period a year earlier, and up 33 per cent
from 40,498 for the second quarter of fiscal 1999. Total assets held in
customer accounts exceeded $350-million at June 30, 1999, an increase of
198 per cent from the previous year.
E-TRADE Canada added 2,787 new accounts during the third quarter of this
year -- an increase of 149 per cent from the same period in 1998. Total
E-TRADE Canada accounts at quarter-end were just under 14,000, an increase
of 144 per cent from the previous year.
"Our focus is to continue to build one of the strongest brands on the
Internet, expand our customer base and grow market share," noted Colleen
Moorehead, president of Versus and E-TRADE Canada. "By listening to our
customers and continuing to innovate, we are successfully delivering an
enhanced, customer service focused on-line investing experience. We are
committed to creating a business built for the long term."
E-TRADE Canada continued its rapid pace of service enhancement and
innovation during the third quarter of 1999. Significant developments
during the period included:
Continuing the company's strategy of extending the E-TRADE Canada brand by
establishing strategic alliances with Carlson Online, Internet Direct and
Mutual Fund Counsel, to allow members direct linked access to the E-TRADE
Canada service.
Enhancing Web site functionality through the implementation of new features
designed to expedite order processing for customers.
Increasing customer service personnel by over 78 per cent from the second
quarter of 1999, consistent with E-TRADE Canada's commitment to provide
superior service to all customers.
Launching the E-TRADE Canada Charity Online auction site, the first
investment industry-sponsored on-line charity auction, with all proceeds
donated to the Canadian foundation for aids research (CANFAR).
E-TRADE Canada remains focused on driving new account growth. The company
will continue to build the power of the E-TRADE Canada brand through both
on-line and off-line activity. The recent approval to offer E-TRADE
Canada's on-line investing service in Quebec means the company can now
build that business aggressively. E-TRADE Canada also continues to develop
key strategic relationships with leading Web-based brands. This provides a
cost-effective means to drive targeted traffic to the E-TRADE site and
broadens the company's reach and exposure.
Institutional services
The company's institutional services business generated positive operating
earnings before depreciation, amortization and taxes of $939,000 for the
third quarter, resulting in total year-to-date of $2.3-million.
Institutional commissions totalled $2.4-million for the third quarter of
the year, an increase of 7 per cent from the third quarter of 1998.
Year-to-date institutional commissions were $7.8-million, an increase of 13
per cent from the same period in 1998. Dealer fees exceeded $1.5-million
for the third quarter, up 78 per cent from the third quarter of 1998.
Year-to-date dealer fees increased 40 per cent from 1998 to over
$3.5-million.
During the third quarter of fiscal 1999, the Versus network facilitated the
execution of trades equal to approximately 12 per cent of the combined
total number of shares traded on the Toronto Stock Exchange and the
Montreal Exchange, up from approximately 11 per cent for the third quarter
of 1998.
Other significant achievements in the institutional business during the
quarter included the release of the beta version of a Microsoft Excel-based
next-generation trading terminal, Portfolio Trader, that will dramatically
increase institutional traders' ability to automate their electronic
desktop.
In addition, a key refocusing of senior management resources during the
third quarter has effectively positioned Versus to move quickly and capture
opportunities that fit the company's growth strategy in this exciting and
fast-paced environment.
Outlook
Meeting the needs of customers through leading-edge technology and
innovation is the driving force behind Versus' strategy. The company has
made the strategic decision to increase investments in new technology over
the next several quarters, with the intention of having infrastructure in
place to capitalize on opportunities for growth. In particular, the company
is currently enhancing its core servers to effectively expand the capacity,
scalability and reliability of its transaction systems seamlessly as
activity levels rise. In addition, the company is building its trading room
to support matching services for both investment dealers and institutional
customers, and developing a new order matching service to augment the
company's growing line of innovative institutional services.
These significant expenditures planned for both the company's retail and
institutional business are investments for growth that are expected to
significantly add to long-term shareholder value, as the company continues
to secure its leadership position in the electronic trading industry.
CONSOLIDATED STATEMENT OF LOSS
Three months ended June 30
(in thousands of dollars)
1999 1998
Revenue
Commissions $ 4,362 $ 2,856
Dealer fees 1,509 850
Interest and other
income 1,137 185
------ ------
7,008 3,891
------ ------
Expenses
Compensation and
benefits 2,346 2,439
Brokerage operations 2,530 1,289
Selling and marketing 1,350 497
Telecommunications
and data 1,266 799
Administration and
other 542 639
Depreciation and
amortization 552 649
------ ------
8,586 6,312
------ ------
Loss before income
taxes 1,578 2,421
------ ------
Provision for income
taxes 3 (5)
------ ------
Net loss $ 1,581 $ 2,416
====== ======
Loss per share 14 cents 37 cents
CONSOLIDATED STATEMENT OF LOSS
Nine months ended June 30
(in thousands of dollars)
1999 1998
Revenue
Commissions $12,132 $ 8,213
Dealer fees 3,547 2,526
Interest and other
income 1,895 499
------ ------
17,574 11,238
------ ------
Expenses
Compensation and
benefits 6,236 5,532
Brokerage operations 6,055 3,288
Selling and marketing 3,030 1,792
Telecommunications
and data 3,048 1,830
Administration and
other 1,802 1,677
Depreciation and
amortization 1,672 1,637
------ ------
21,843 15,756
------ ------
Loss before income
taxes 4,269 4,518
------ ------
Provision for income
taxes 62 12
------ ------
Net loss $ 4,331 $ 4,530
====== ======
Loss per share 51 cents 70 cents
(c) Copyright 1999 Canjex Publishing Ltd. canada-stockwatch.com
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