Tuesday October 12, 8:35 am Eastern Time
Company Press Release
DLJdirect Third Quarter Revenues Up 82 Percent to
$54.9 Million
NEW YORK--(BUSINESS WIRE)--Oct. 12, 1999--Donaldson, Lufkin & Jenrette, Inc.
(NYSE: DLJ - news) announced today that DLJdirect (NYSE: DIR - news), its online brokerage service, reported total revenues of $54.9 million for the third quarter of 1999, an 82 percent increase over the $30.2 million in revenues reported for the comparable period a year ago. DLJdirect also reported a net after-tax loss of $3.3 million, or $0.03 per share (diluted), for the third quarter of 1999. This compares to net income of $0.8 million, or $0.01 per share (pro forma diluted), for the third quarter of 1998.
Blake Darcy, Chief Executive Officer of DLJdirect, said, ''We are pleased that serious investors are realizing the benefits of online trading and recognizing that DLJdirect can best serve their financial needs. Average customer assets per active account now stand at $47,000, up from $34,000 twelve months ago. Total customer assets reached a record $14.2 billion at the end of the quarter.''
Total trades executed during the third quarter of 1999 and average trades per day were up significantly versus the third quarter of 1998, although they declined 12 percent and 14 percent respectively compared to the record levels of the second quarter of 1999. These declines reflect a general slowdown in the U.S. equities market, as well as historical, seasonal variations in online investors' behavior.
DLJdirect continued to diversify revenues. Fee income in the third quarter of 1999 grew by 86 percent over the same period a year earlier. DLJdirect expanded its underwriting activity and participated in 20 public offerings in the third quarter of 1999. In addition, third-party demand for the Internet-based products developed by iNautix, DLJdirect's in-house technology company, also contributed to the gains in fee income. Interest income (net) in the third quarter of 1999 increased more than 200 percent over the comparable quarter a year ago.
Commissions, which were $30.7 million during the third quarter of 1999, were 58 percent greater than for the third quarter of 1998, and represented 56 percent of total revenues.
DLJdirect also continued to expand internationally. Mr. Darcy said, ''DLJdirect is experiencing explosive growth overseas, particularly in Japan, where we were the first U.S. firm to offer online trading. Launched on June 11, our Japanese joint venture, DLJdirect SFG, opened nearly 10,000 customer accounts during the third quarter of 1999. DLJdirect began operations in the United Kingdom on September 1, where we hope to replicate the same success that we have experienced in
Japan.''
Growth in U.S. Customers, Assets and Trading Activity
As of September 30, 1999, DLJdirect had 700,000 U.S. customer accounts, 41 percent more than the third quarter a year ago. Active domestic customer accounts at DLJdirect at the end of the third quarter of 1999 numbered 302,000, a 53 percent increase versus the third quarter of 1998. During the third quarter of 1999, DLJdirect opened 43,000 new customer accounts and 25,000 new active accounts in the United States. Assets in customer accounts on September 30, 1999 were $14.2 billion, more than double the $6.7 billion reported at the end of the third quarter of 1998.
DLJdirect executed a total of 1.2 million trades during the third quarter of 1999, 67 percent more than the 720,000 trades executed during the third quarter of 1998. On average, DLJdirect executed 19,200 trades per day during the third quarter of 1999, 71 percent more than the 11,200 trades per day during the same year earlier period.
Increased Advertising
During the third quarter of 1999, DLJdirect launched an aggressive new multi-media advertising campaign that emphasizes the strengths and benefits of its Wall Street heritage, using the tagline, ''Putting Our Reputation Online.'' Of the $18.1 million allocated to advertising in the third quarter, $16.8 million was concentrated in U.S. media.
New Initiatives and Awards
In July, DLJdirect announced it had entered into a partnership to establish an electronic communications network (ECN). As a
result, beginning in late October, DLJdirect customers will have access to extended-hours trading, including pre-opening and after-hours sessions during which clients will be able to enter limit orders for selected listed securities and all Nasdaq National Market System and Small Cap issues.
In August, DLJdirect expanded its array of investment products and services, with the launch of a full service mortgage program, allowing investors to access online mortgage rates, and to prequalify and apply online for a mortgage. In addition, DLJdirect introduced two innovative mortgage services that eliminate the cash down payment from residential mortgage financing.
In September, DLJdirect unveiled a new look for its Web site and announced a number of new features, including real-time
account balances, real-time Dow Jones Newswires(SM), full S&P stock reports, and a portfolio evaluation system that provides investors with realized and unrealized gains on the positions in their
portfolios. DLJdirect also expanded its fixed income investment product offerings in response to research conducted among its high-net-worth investor client base.
As part of its ongoing efforts to provide customers with enhanced products and the latest technology, DLJdirect launched
DLJdirect Anywhere(TM) Wireless Services in September, enabling clients to access real-time news, quotes and trading when
on the go, anywhere, anytime.
DLJdirect was named ''Forbes Favorite'' online broker and ''Best of the Web'' in the Fall 1999 special Internet issue of
Forbes magazine. DLJdirect's comprehensive and powerful trading platform, low prices, and information resources were
specifically cited in the magazine's recognition.
Nine Month Highlights
Net income reported for the first nine months of 1999 was $8.9 million, as opposed to a loss of $0.3 million for the first nine
months of 1998. Earnings per share (pro forma diluted) for the first nine months of 1999 were $0.09. Total revenues for the
first nine months of 1999 were $161.8 million, nearly double the $82.5 million for the same period in 1998.
DLJdirect is one of America's premier online brokerage firms. Established in 1988, DLJdirect offers a broad range of
investment products and services to sophisticated, self-directed investors, representing approximately $14.2 billion in assets.
For more information on DLJdirect, refer to the company's World Wide Web site at www.DLJdirect.com.
Donaldson, Lufkin & Jenrette is a leading integrated investment and merchant bank serving institutional, corporate, government
and individual clients. DLJ's businesses include securities underwriting; sales and trading; investment and merchant banking;
financial advisory services; investment research; venture capital; correspondent brokerage services; online, interactive
brokerage services; and asset management. Founded in 1959 and headquartered in New York City, DLJ employs
approximately 9,700 people worldwide and maintains offices in 13 cities in the United States and 14 cities in Europe, Latin
America and Asia. The company has two classes of common stock trading on the New York Stock Exchange. Shares trading
under the ticker symbol ''DLJ'' represent Donaldson, Lufkin & Jenrette, Inc. Shares trading under the ticker symbol ''DIR''
track the performance of DLJdirect, its online brokerage business. For more information on Donaldson, Lufkin & Jenrette,
refer to the company's World Wide Web site at www.dlj.com. The firm's world headquarters are located at 277 Park Avenue,
New York, NY 10172; telephone number (212) 892-3000.
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