A.B. Watley Group Positioned to Realize Break-even Results With the Transition of Clients to Its Proprietary Trading Software
Indicates No Further Need to Draw Down Line of Credit
NEW YORK--(BUSINESS WIRE)--October 6, 2000--A.B. Watley Group Inc. (NASDAQ: ABWG - news), premier provider of financial services technology (www.abwatley.com), today announced the Company has successfully transitioned over 2,300 clients and has positioned the Company to realize break-even results from ongoing operations for its fiscal first quarter ended December 31, 2000.
The transition to date has resulted in monthly cost savings of approximately $410,000 a month. Additionally, through the reduction of Nasdaq Level II data fees to $10/user from $50/user, which took effect September 1, 2000, the Company's monthly costs are reduced by approximately $165,000. The savings are a result of the reduction of Nasdaq Level II fees for the entire UltimateTrader active client base.
Going forward, as the Company migrates the remainder of the client base to UltimateTrader II, management anticipates an additional $600,000 a month in savings through the elimination of vendor fees based on the client base of 6,239 at fiscal third quarter ended June 30, 2000. The Company expects to have annualized savings of $14.4 million, or $1.76 per share.
Chief Financial Officer Joseph Ramos commented, ``We are proud to have built our own proprietary `Direct Access' software in an effort to control our own destiny and eliminate our largest cost of operation. As we move the remainder of our client base to UltimateTrader II, the Company will be in a position to have positive cash flow.''
``To date we have drawn $3 million dollars from our equity line financing arranged by Ladenburg Thalmann, thus strengthening the Company's balance sheet. Going forward, as we continue to move toward profitability, we do not anticipate the need to access any additional capital from the equity line, and have terminated our relationship with Ladenburg Thalmann,'' Mr. Ramos continued.
Chairman and Chief Executive Officer Steven Malin commented, ``We are very excited about the transition of our client base to UltimateTrader II and look forward to moving the remainder of our clients onto it over the next two months. The complete migration of our clients onto our new platform will serve us in many ways. The accrued saving and resulting profitability will not only strengthen the Company but will allow us to then focus our resources on licensing our software. We feel that we are in an enviable position among other online brokers. We remain committed to providing the highest level service to our client base.''
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