Thursday February 17, 5:15 pm Eastern Time
Company Press Release
Web Street, Inc. Reports 223% Increase in Annual Revenues
Aggressively Expands Internationally to Capture Greater Market Share Sun Hung Kai Alliance in Far East Markets Prepares to Launch
CHICAGO--(BUSINESS WIRE)--Feb. 17, 2000-- Web Street, Inc. (Nasdaq: WEBS - news), parent company of Web Street Securities, an innovative and highly rated online brokerage firm, today announced record results for its fourth quarter and year ending December 31, 1999.
For the fourth quarter, total revenues increased to a record $8.3 million, a 136% increase over revenues for the fourth quarter of 1998, and a 28% sequential increase over the third quarter of 1999. Net loss for the quarter was $2.8 million, or $0.12 per diluted share, compared to a net loss of $4.7 million, or $0.28 per diluted share, for the fourth quarter of 1998. The weighted average number of diluted shares outstanding for the current quarter was 23,173,156 compared to 16,740,600 during last year's comparable quarter.
For the year, total revenues increased 223% to a record $25.5 million from $7.9 million reported for 1998. Net loss for the year was $6.8 million, or $0.32 per diluted share, compared to $11.8 million, or $0.71 per diluted share in 1998. The weighted average number of diluted shares outstanding for the year was 21,202,941 compared to 16,740,600 for 1998.
The Company also reported the following key metrics for 1999 vs 1998:
The number of total customer accounts increased 107% to 87,500 at December 31, 1999
The Company executed 1,016,700 trades for the year, a 249% increase over 1998
New customer acquisition costs for the year decreased 6% to $187 per account
- Total customer assets increased 243% to $795 million
- Average customer assets per account increased by 65% over 1998
Joseph J. Fox, Chief Executive Officer of Web Street said, ``The fourth quarter was a landmark quarter for Web Street. The Company achieved record-breaking results in virtually every key metric, announced plans to become a self-clearing organization, greatly expanded our international footprint and successfully completed our initial public offering. Additionally, we launched our Mutual Fund SuperSite as part of our continued commitment to provide our customers with the best investing tools possible.'
Mr. Fox stated, ``During the quarter we continued to execute our successful international business model, which is an extremely important element of our overall growth strategy. Earlier this year we expanded and extended our relationship with ConSors AG of Germany, one of the leading European online brokerage firms. Our relationship with ConSors provides Web Street with access to the burgeoning European online trading market and new customers at a very low acquisition cost. Along these lines, we expect to begin offering U.S. trading in France through ConSors France in the coming weeks. In addition, we plan to follow France with the introduction of U.S. trading with ConSors in Switzerland and Spain. Additionally, through our alliance with Landsbref, Ltd., we can now count a meaningful percentage of the Icelandic population as Web Street customers.
Looking ahead, we are very excited about the events to occur with our Hong Kong partner, Sun Hung Kai & Co. Ltd. Sun Hung Kai is one of the largest retail brokerage firms in Hong Kong. In the coming weeks, Hong Kong investors will have seamless access to the U.S. equities markets through the mutually exclusive alliance between Web Street and Sun Hung Kai. Through our partnership with Sun Hung Kai, Hong Kong also becomes our gateway into Mainland China.
Mr. Fox continued, ``In the upcoming months our strategy will be to continue to aggressively expand our international business. Web Street's transition to self-clearing will also further our international expansion activities, allowing us to diversify our revenue and provide our customers with enhanced products and services, including plans to offer extended hours trading across the globe. We continue to actively seek other opportunities in the international financial services markets in order to capture a substantial share of the rapidly growing global marketplace. Most notably, all these relationships will also enable Web Street's customers access to the leading international trading markets, as we expect to begin offering international trading to domestic customers in the second quarter of 2000.'
Mr. Fox concluded, ``Another key component of our growth strategy is the addition of other online financial services that would complement our existing highly rated product offering. Our recently launched advertising campaign is helping to further raise the consumer awareness of Web Street and build a strong brand name amid a growing sea of competition. Our national TV advertising campaign for the new millennium not only seeks to build brand equity and convey our corporate philosophy, but also to leverage the functionality of our site through a national print campaign. Web Street remains well-positioned to execute our business model, the current goal of which is to achieve profitability during the second half of next year.'
Web Street, Inc. will hold its annual meeting of stockholders on May 9, 2000 and has set a record date for stockholders entitled to vote at the meeting of March 14, 2000.
Web Street, Inc., based in Chicago, Illinois provides online brokerage services to individual investors in the United States, Europe, the Pacific Rim and Latin America, through its wholly- owned subsidiary, Web Street Securities, Inc., which was founded in 1996. Web Street was rated four stars by Barron's in 1998 and 1999, as well as ranked as one of the top 3 online brokers in March 1998 and March 1999 by SmartMoney. Web Street offers 24 hours a day customer service, low-price commissions, and real time account information via multiple channels - online, touch-tone telephone, person-to-person via telephone, and face-to-face onsite through its existing and future brick-and-mortar branches. For more information on the Company's products and services, visit us at www.webstreet.com or call us at 1-800-WEBTRADE.
This news release includes forward-looking statements that reflect Web Street's current expectations about its future results, performance, prospects and opportunities. Web Street has tried to identify these forward-looking statements by using words such as ``may,' ``will,' ``expect,' ``anticipate,' ``believe,' ``intend,' ``goal,' and ``estimate' and similar expressions. These forward- looking statements are based on information currently available to Web Street and are subject to a number of risks, uncertainties and other factors that could cause Web Street's actual results, performance, prospects or opportunities in the remainder of 2000 and beyond to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other factors include, without limitation, Web Street's ability to establish and maintain international relationships and relationships with content providers, intense price and other competition among companies providing online financial services, Web Street's ability to successfully implement self-clearing operations, Web Street's ability to develop and enhance its services and products, risk of system failures, and existing and future regulations affecting the online brokerage industry or the Internet generally. For further information about these and other risks, uncertainties and factors, please review the disclosure included under the caption ``Risk Factors' in Web Street's Prospectus dated November 17, 1999, as filed with the Securities and Exchange Commission. Except as required by the federal securities laws, Web Street undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason after the date of this news release. |
