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Non-Tech : Knight/Trimark Group, Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Gary Korn who wrote (4964)	10/13/1999 9:21:00 AM
From: Gary Korn	Read Replies (1) \| Respond to of 10027

CC cont. RT: We need volume and volatility. In 1Q and 2Q, extraordinary environment gave us high results. 3Q was different. Share volume down 17%. Lower price of many internet stocks. Put retail on the sidelines. 6.33 profit per trade in 3Q vs. 10.00 in 2Q and 8.00 in 3Q98. EPS was 19. Revenues increased 49%. YTD revenues grew 130%. YTD income increased 229%. Annualized, ROE was 22% for quarter, and 45% YTD. In 3Q, doubled trades from prior year. 319,000 trades a day. Continue to maintain a wide lead in market share. 14.6 percent in September. Over 50% greater than 2d player. Our Sept. 99 market share was 17% less than 2Q. Primarily due to lower retail participation in market and reduced OTC volumes. Dominant 25% market share in OTC (by NITE), experienced about a 30% decline. Pretax margin of 25%, while lower than 1H99, was consistent with 1998. We believe 25% margin is at lower end of range of our operating model, and margin of 30% or more is realistic and obtainable. Employee comp. was 29% of revenue. Able to keep our employee comp. in line with this quarters profitability. Payment for order flow was about 28% of revenue. Note that per share payment for order flow didn't change from second quarter. As both payment for order flow and clearing costs are volume related, reduction in orders had negative impact on this. New Merrill deal will have significant effect on our clearing costs. $265MM cash at end of quarter. Strong cash position enable us to fund growth in near term. 6 financial highlites: 1. 3rd best quarter ever. 2. Strong financial metrics 3. Maintained 25 perct pre tax margins. 4. Instit. is now 28% of trading revenues. 5. Merrill deal 6. Debt free, with cash to fund growth.