NEWS OUT........Very nice Q2.
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B: JB Oxford Turns in Record First-Half Revenues and Continu
B: JB Oxford Turns in Record First-Half Revenues and Continuing Growth Growth
in Revenues from Retail Customers, Including Commissions, Interest And Profits
from Client-Driven Trading, Reflects the Strength of JB Oxford's Vertically
Integrated Business Model Highlights * Second quarter retail revenues,
including commissions, retail interest and trading, expand to $22.8 million in
2000 from $19.1 million in 1999 in spite of recent market slowdown. * Average
retail trades per day grows to 5,553. * Company maintains profitability while
investing in people, technology and marketing to support growth. * Record first
half highlighted by 47% increase in commission revenue compared with 1999. *
Recent third-party recognition includes top 5 ranking by Money magazine.
LOS ANGELES, Aug 1, 2000 /PRNewswire via COMTEX/ -- JB Oxford Holdings, Inc.
(Nasdaq: JBOH), which through its JB Oxford & Company subsidiary is a leading
provider of discount brokerage services to clients nationwide, reports second
quarter and record first half results for the period ended June 30, 2000.
Commission revenue from retail trades increased to $8.7 million in the second
quarter 2000 from $8.5 million in the year-ago second quarter, a meaningful
increase in light of the recent market slowdown. Reflecting the strength of JB
Oxford's retail client base, second quarter interest revenue increased 41% to
$10.5 million in 2000 from $7.4 million in 1999 due to higher average margin
balances. Trading revenues were $4.4 million in the second quarter 2000 versus
$4.9 million a year ago, as market volatility squeezed spreads. As a result of
the company's decision to focus on the retail brokerage business and to
de-emphasize correspondent clearing for day-trading firms, second quarter
clearing revenues were $1.6 million in 2000 versus $5.9 million in 1999.
Expenses were $24.7 million in the second quarter 2000 versus $19.0 million a
year ago, due to higher interest expense resulting from the Federal Reserve
Board's March 21 and May 16 interest rate hikes and investments the company made
in people, technology and marketing to achieve its aggressive business
objectives. Despite an industrywide decline in trading volumes and the increase
in operating expenses, second quarter operating income (excluding taxes and
promotional expenses) totaled $2.6 million in 2000 versus $8.8 million in 1999.
Second quarter net income totaled $511,406 or $0.02 per diluted share in 2000
versus $4.3 million or $0.18 per diluted share in 1999.
Revenues for the first six months of 2000 totaled $60.1 million, a record
first-half showing that represents a 20% increase over $49.9 million in the
year-ago first half and reflects the success of JB Oxford's growth strategy.
Commission revenue from retail trades increased 47% to $23.8 million for the
2000 first half from $16.2 million a year ago. First-half interest revenue
increased 56% to $20.8 million in 2000 from $13.3 million in 1999, while revenue
from trading increased to $9.8 million from $9.0 million. Revenue from
correspondents was $4.9 million in the first half of 2000 versus $11.0 million
in the comparable 1999 period, indicative of the company's decision to focus
primarily on retail customers.
Expenses for the first half of 2000 were $51.2 million versus $36.5 million in
the 1999 first half due to both higher interest expense and investments in
people, technology and marketing. Operating income was $8.9 million in the 2000
first half versus $13.4 million in the year-ago period. First-half net income
was $5.1 million or $0.22 per diluted share in 2000 versus $8.1 million or $0.33
per diluted share in 1999. The year-ago figure includes a $436,875 gain on the
forgiveness debt reported in the first quarter 1999.
"In light of recent market events, our record first half and second quarter
results reflect the staying power JB Oxford derives from its unique, vertically
integrated business model," said JB Oxford Chairman and Chief Executive Officer
C.L. Jarratt. "This year the markets have witnessed the greatest volatility
we've ever seen, and in the second quarter trading volumes slowed across the
industry. Nevertheless, JB Oxford generated continuing growth in commission
revenue, 8% growth in trade volumes to more than 5,500 retail trades per day,
and a strong increase in interest revenue from retail clients. In fact, because
JB Oxford both self clears and makes markets -- unlike any other public discount
brokerage except Schwab -- our interest revenues benefited from the record
expansion in margin lending that occurred early in the quarter. As a result, we
continue not only to be profitable, but also to generate resources that can be
invested in the future."
"The fact that we generated a profit despite lower volumes and higher expenses
proves JB Oxford has both the critical mass and the inherently low-cost
infrastructure to compete long-term," said President and Chief Operating Officer
Jamie Lewis. "During the quarter, we continued to promote the JB Oxford brand
through broadcast and print advertising. In the second half of the year, we plan
to undertake a variety of one-on-one campaigns designed to stimulate account
growth. To support this plan, we made a number of strategic hires within the
marketing organization that should enable us to quickly and efficiently seize
opportunities. Our goal is clear: to grow our retail client base by providing
exceptional value.
"After carefully examining the business of clearing for day-trading
correspondents, management has decided to focus our time and energies on the
retail customer segment," Mr. Lewis said. "As a result, and because we continue
to assess our costs throughout the firm, in the second quarter we dramatically
scaled back the organization dedicated to the correspondent segment and intend
to maintain a very streamlined infrastructure going forward."
"As shareholders concerned with the performance of our investment, JB Oxford's
management continuously watches the bottomline and assesses strategies to
maximize the value for shareholders," Mr. Jarratt said. "After the close of the
quarter, we announced a new share repurchase program of up to 2 million shares.
Since then, we have repurchased JB Oxford stock in the open market because we
believe current trading levels don't reflect a fair value in light of our
continuing growth, scale and proven staying power."
"With trading volumes down, this past quarter presented challenges that we
believe JB Oxford successfully met," Mr. Jarratt said. "Going forward, we will
assess our cost controls and streamline expenses where possible without
impacting growth or client service levels. In particular, we are currently
pursuing strategies to reduce interest expense. That said, we will continue to
invest resources where the return appears compelling -- whether that be
repurchasing stock or using technology to support services like wireless trading
and affinity programs that maximize our client relationships."
"Our strong financial performance, operational achievements and public
recognition such as the recent top 5 ranking by Money magazine demonstrate that
JB Oxford is well-positioned for the future," Mr. Jarratt said. "As the new ads
highlighting our recent successes attest, JB Oxford is dedicated to being the
future of financial services."
Management will hold a conference call to discuss these results at 11:00 a.m.
Eastern on Tuesday, August 1. Audio of the call is accessible to the general
public on the web at videonewswire . During the call,
individual investors may submit questions to management at ir@jboc.com .
JB Oxford Holdings, Inc. through its JB Oxford & Company subsidiary provides
discount and online brokerage services with optional access to personal brokers,
banking services and free Internet access all in one friendly place. The
company's one-stop financial destination at www.jboxford.com was developed to be
the easiest, most complete way for consumers to manage their money. The site
features online trading, robust stock screening and portfolio tracking tools as
well as up-to-the-minute market commentary and research from the world's leading
content providers. JB Oxford has branches in New York, Miami and Los Angeles.
This press release contains statements that are forward-looking and comments on
market conditions, revenue growth, expense management, and outlook. Any number
of conditions may occur which would affect important factors in this analysis
and materially change expectations. These factors include, but are not limited
to, known and unknown risks, customer trading activity, changes in technology,
shifts in competitive patterns, decisions with regard to products and services,
changes in revenues and profits, and significant changes in the market
environment. For a description of the foregoing and other factors, investors and
others should refer to the company's filings with the SEC, including its annual
report on Form 10-K for the year ended Dec. 31, 1999; its quarterly reports on
Form 10-Q; and other periodic filings. JB Oxford undertakes no obligation to
update the forward-looking statements contained herein to reflect changed events
or circumstances after today's date.
JB Oxford Holdings, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
For the three months For the six months
ended June 30, ended June 30,
2000 1999 2000 1999
Revenues
Commissions $ 8,699,931 $ 8,457,912 $23,787,094 $16,197,944
Interest 10,503,025 7,424,994 20,826,480 13,330,441
Trading 4,357,187 4,933,948 9,792,012 8,955,639
Clearing 1,632,890 5,878,275 4,909,977 11,003,967
Other 426,000 176,717 797,142 377,454
Total revenues 25,619,033 26,871,846 60,112,705 49,865,445
Expenses
Salaries 3,717,675 2,401,250 7,401,167 4,682,597
Commissions 3,618,027 3,369,577 9,666,722 6,222,159
Clearing 792,543 891,525 1,682,844 1,843,361
Communications 2,095,690 1,711,319 4,091,019 3,382,627
Occupancy 1,505,994 1,221,306 3,040,972 2,326,657
Interest 6,770,331 3,938,784 12,269,505 7,199,846
Data processing 2,241,700 2,390,862 4,920,740 4,802,295
Professional 1,265,712 877,363 2,297,655 2,057,036
Promotional 1,719,741 947,914 3,703,286 1,751,256
Bad Debts 383,184 640,422 916,114 1,045,858
Other 597,030 603,762 1,225,779 1,188,558
Total expenses 24,707,627 18,994,084 51,215,803 36,502,250
Income before taxes 911,406 7,877,762 8,896,902 13,363,195
Taxes 400,000 3,530,792 3,830,000 5,750,000
Income before debt
forgiveness 511,406 4,346,970 5,066,902 7,613,195
Debt forgiveness -- -- -- 436,875
Net income $ 511,406 $ 4,346,970 $ 5,066,902 $ 8,050,070
Earnings per share:
Basic $ 0.04 $ 0.31 $ 0.35 $ 0.57
Diluted $ 0.02 $ 0.18 $ 0.22 $ 0.33
Shares outstanding:
Basic 14,285,343 |
