National Discount Brokers Group, Inc. Announces 67% Increase in Revenue for Fiscal First Quarter Compared to the Same Period Last Year
JERSEY CITY, N.J., Sept. 22 /PRNewswire/ -- National Discount Brokers
Group, Inc. (the "Company") (NYSE: NDB) and its two subsidiaries, National
Discount Brokers/NDB.com, the online discount broker, and Sherwood Securities,
the Nasdaq market maker, today reported revenue from continuing operations of
$53 million for its first fiscal quarter ended August 31, 1999, an increase of
67% from the same period a year earlier.
The Company reported revenues from continuing operations for the fiscal
quarter ended August 31, 1999 of $53.0 million compared to $31.7 million for
the comparable period last year, an increase of 67%. Net income from
continuing operations for the three months ended August 31, 1999 was
$435,000, an increase of 167% when compared to a net loss from continuing
operations of ($650,000) for the three months ended August 31, 1998. Net
income before advertising and taxes increased by 664% to $8.4 million this
quarter from $1.1 million in the first quarter of fiscal 1998.
Net income from continuing operations grew despite non-recurring pre-tax
charges of $1.7 million for the write-off of obsolete equipment and software
to allow for upgrades and enhancements to the Company's technology
infrastructure and $1.5 million related to a change to its clearing agreement.
These charges equated to $.11 per diluted share on an after tax basis.
During the first fiscal quarter, the Company realized a net after tax gain
of $20.1 million, or $1.22 per diluted share, related to the sale of its
ownership interest in Equitrade Partners, L.L.C., a New York Stock Exchange
specialist firm ("Equitrade"). The transaction closed on June 18, 1999, and
as such, the operations of Equitrade have been reflected in discontinued
operations for all periods reported. As a result, net income (including
discontinued operations) for the first fiscal quarter ended August 31, 1999
was $20.6 million, or $1.25 per diluted share compared to a net loss
(including discontinued operations) of ($1.3) million, or ($0.09) per diluted
share, for the same period in the prior year.
Capitalizing on the commencement of its recently announced $30 million
advertising campaign, and continuing its strategic alliances with affinity
partners, NDB.com's number of customer accounts rose to 159,000 as of August
31, 1999, an increase of 51% from August 31, 1998. Acquisition costs per
customer account averaged $403 for the quarter ended August 31, 1999 versus
$286 per account for the quarter ended August 31, 1998, an increase of 41%.
In total, NDB.com incurred $7.3 million in advertising costs for the current
quarter versus $1.6 million in the same period of the prior year.
NDB.com processed 532,000 commissionable trades during the fiscal quarter
ended August 31, 1999, up 40% from the same quarter a year ago. NDB.com
customer transaction volume averaged approximately 8,200 commissionable trades
per day during the quarter. NDB.com customer assets increased 3% from May 31,
1999, to $7.6 billion as of August 31, 1999.
Sherwood Securities continued its profitability as results for the three
months ended August 31, 1999 improved over those of the same quarter in the
prior year. Revenue increased 74% to $35.9 million for the quarter ended
August 31, 1999 from $20.6 million for the first quarter of fiscal 1998.
Sherwood's net income was $3.8 million in the first quarter of fiscal 1999
compared with a loss of approximately ($47,000) for the first quarter of
fiscal 1998. Sherwood's ticket volume increased by 92% for the three months
ended August 31, 1999 over the prior year's first fiscal quarter while its
share trading volume increased by approximately 50% from 1.6 billion shares
during the quarter ended August 31, 1998 to 2.4 billion shares in the current
year's first fiscal quarter.
Quarterly Highlights
During the month of June 1999, the Company received approximately
$91.6 million in net proceeds after expenses from a secondary offering of its
common stock in addition to approximately $85 million from the sale of
Equitrade. The Company will continue to use a portion of these proceeds to
build greater brand awareness for NDB.com through a $30 million marketing
campaign, to evolve into a self-clearing institution and to continue to devise
enhancements to its award winning web site.
Building on the high ratings recently received from Barron's, Money
Magazine and Gomez Advisors, Inc., NDB.com's website received plaudits for
user-friendliness in Worth Magazine's review of online brokers. Worth
surveyed seven leading online brokers to determine "which e-brokers are the
best at handling their customers, as well as their customers' trades."
NDB.com ranked among the best.
Continuing to evaluate and improve upon the content of its website,
NDB.com entered into an agreement with TheStreet.com, Inc. to provide
proprietary financial information, analysis and commentary. NDB.com's
customers will be provided with free access to selected material from a site
that is widely acknowledged as one of the top financial destinations on the
web. In addition, NDB.com entered into an agreement with BestCalls.com as the
first online broker to provide both customers and visitors to the website free
access to BestCalls.com's complete calendar of company earnings conference
calls and related investor events. Finally, NDB.com entered into an
early-adopter agreement for the use of ZixMail(TM), CustomTracks' new secure
Internet messaging system, which is based on ZixIt(TM) Digital Signature and
encryption technology. In connection with the agreement, the companies will
develop applications that enable NDB.com's customers to receive new account
numbers, transaction notifications and trade confirmations via encrypted
ZixMail messages. The arrangement also allows NDB.com to be an early adopter
for corporate ZixMail usage.
NDB.com opened an office in San Francisco to expand the marketing of
NetLink, an innovative stock benefit plan administration product developed for
AST StockPlan. With a San Francisco office, NDB.com will be better able to
serve the needs of companies located throughout the western United States.
Headquartered in Jersey City, New Jersey, National Discount Brokers Group,
Inc. is the parent company of two financial services entities: National
Discount Brokers/NDB.com and Sherwood Securities Corp. Combined, the two
entities processed approximately 2.8 million transactions during the fiscal
quarter ended August 31, 1999. The Company and its subsidiaries have offices
in Jersey City, New York, Los Angeles, San Francisco, Chicago, Denver and
Boston. Customers can access National Discount Brokers at ndb.com;
via the PowerBroker automated touch-tone telephone system (800-631-8884) or by
calling 800-4-1-PRICE.
Statements made in this press release constitute forward-looking
statements, as that term is defined in the Private Securities Litigation
Reform Act of 1995. These statements are subject to risks and uncertainties.
These forward-looking statements generally are accompanied by words such as
"intend," "anticipate," "believe," "estimate," "expect," "should" or similar
expressions. It should be understood that these forward-looking statements
are subject to a number of assumptions, risks and uncertainties that could
cause actual results to differ materially from those expressed or implied in
the forward-looking statements.
NATIONAL DISCOUNT BROKERS GROUP, INC. |
