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Wednesday October 27, 4:20 pm Eastern Time
Company Press Release (See Bold)
Ameritrade Holding Reports Continued Strong Growth in Revenue and Account Generation for Fiscal 1999
Growth Strategy Doubles Revenues and Accounts for Fiscal Year 1999
OMAHA, Neb.--(BUSINESS WIRE)--Oct. 27, 1999--Fueled by increased recognition as a leading online discount brokerage brand, Ameritrade Holding Corporation (NASDAQ: AMTD - news) today reported record revenues and account generation for fiscal 1999.
Fiscal 1999 Results
Net revenues for fiscal 1999 increased 99 percent to $268.4 million from the $134.9 million reported for fiscal 1998. Core discount brokerage accounts grew 83 percent to 560,000 from 306,000 at the beginning of the fiscal year. Net income for fiscal 1999 was $11.5 million, or $0.07 per share, compared to net income of $0.2 million in fiscal 1998, or $0.00 per share.
``In fiscal 1999, we nearly doubled our revenues and our core accounts of online investors who `believe in themselves' to make informed investment decisions,' said J. Joe Ricketts, chairman and co-chief executive officer of Ameritrade Holding Corporation. ``Going forward, we expect the Ameritrade brand to continue to provide strong revenue and customer growth, and, to that end, we have introduced an aggressive marketing campaign in fiscal year 2000 with the theme `Believe in Yourself'.'
The fourth quarter saw the addition of 62,000 new accounts adding to the base of 505,000 accounts at the beginning of the quarter. The Company completes the 1999 fiscal year with 560,000 accounts after factoring in attrition of 7,000 accounts in the fourth quarter. This nearly doubles the account base of 306,000 at the beginning of the year.
Fourth Quarter Results
Ameritrade Holding Corporation reported net revenues of $74.5 million for the fiscal fourth quarter ended September 24, 1999, an 88 percent increase over the $39.6 million reported for the comparable quarter last year. Commission and clearing fee revenues totaled $49.2 million for the quarter, an 87 percent increase over the comparable quarter in 1998.
The Company reported a net loss of $9.2 million, or ($0.05) per share, for the quarter ended September 24, 1999, compared to net income of $5.8 million, or $0.03 per share, for the fourth quarter of fiscal 1998. Net income for the quarter was impacted by non-recurring charges totaling $2.1 million or ($0.01) per share after-tax related to costs associated with Y2K remediation and the Company's cancelled stock offering in August. Advertising expenditures were $24.8 million in the fourth quarter, compared to $3.9 million in the 1998 fourth quarter as the Company began its fiscal 2000 advertising campaign in September. The Company spent over one half of its $24.8 million quarterly advertising total in the month of September.
Consistent with the online trading industry, the Company also experienced down sequential comparisons in net revenues and trades per day as a slower market environment coupled with the normal seasonal summer slowdown sent investors to the sidelines. Trades per day totaled 53,102, an 11 percent sequential decline from 59,648 in the third quarter of fiscal 1999, but more than double the 24,328 trades per day in the fourth quarter of 1998. However the $74.5 million in net revenues represented only a 5 percent sequential decline as net interest revenue continued to grow despite the slower trading environment.
Customer Assets
Assets in customer accounts totaled $22.9 billion on September 24, 1999, a 101 percent increase over the year earlier assets of $11.4 billion and a one percent increase over June, 1999 assets of $22.6 billion.
Key Developments
There were a number of key developments recently.
Ameritrade laid the groundwork for continued enhancement of products and services with its recent announcement with Sprint PCS to offer the first Web-based wireless investing capability via cellular phones. With this relationship, the Company has joined with the premier wireless service in the world to allow our customers to access account information, general market information, and make trades from anywhere in the world. This unique service will provide customers the ability to transact business when and where they desire to do so without the need of a computer.
The Company also continued expansion of its facilities, with the establishment of a technology center in the Baltimore, Maryland area, continued growth of its new customer service center in Fort Worth, Texas and the establishment of a data processing facility in Kansas City, Missouri. These new facilities provide the Company with additional technological resources, greater customer service capabilities, and backup protection for the data processing requirements needed for our customers.
In August, the Company also completed the private placement of $200 million of convertible subordinated debt. The net proceeds from this private placement will be utilized by the Company to promote the Ameritrade brand name and to continue to build the Company infrastructure to provide an unmatched level of service to our customers.
Additionally the Company strengthened its management team with the appointment of seven executives in positions ranging from general counsel to senior vice president of marketing and sales to vice presidents of strategy and product development. These new appointments will provide the Company with additional management depth to continue to grow and expand our capabilities to our customers.
2000 Outlook
``Ameritrade is a customer focused organization and as such we continually strive to ensure that our investors have the research tools, products and services they need as they determine the investment choices that are right for them,' said Thomas K. Lewis, Jr., co-chief executive officer of Ameritrade Holding Corporation. ``As we carry through with our strategy to provide the very best online investing value proposition, we're confident that Ameritrade will exceed our annual record of account additions and will continue building market share. Believe in Yourself.'
Safe Harbor
This press release contains forward-looking statements and comments on market conditions, 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, customer trading activity, changes in technology, shifts in competitive patterns, computer system failures, changes in consumer behavior, decisions with regard to products and services, changes in revenues and profits, and significant changes in the market environment at home or abroad.
Further information about these matters can be found in the information included in the Company's annual filing of Form 10-K with the SEC.
Ameritrade Holding Corporation
Ameritrade Holding Corporation (www.amtd.com) is a pioneer in the discount and online brokerage industry. The Company provides brokerage services and clearing services to self-directed individual consumer investors and other financial institutions through its subsidiaries. Subsidiaries of Ameritrade Holding include: Ameritrade, Inc. (www.ameritrade.com), a leading online brokerage firm; Accutrade, Inc. (www.accutrade.com), a discount brokerage delivering superior levels of personal service and support to its clients; AmeriVest, Inc. (www.amerivestinc.com), a provider of third-party discount brokerage services and other financial services to commercial banks, credit unions and thrift institutions; as well as Advanced Clearing, Inc. (www.advancedclearing.com), a securities clearing firm providing clearing services to each subsidiary as well as other financial institutions. |
