Record Revenue and Account generation! News release
It's been a crummy week for AMTD, but this SHOULD perk things up tomorrow. Of course, their SERVICE is still excruciatingly bad . . .
Record Net Revenues and Account Generation Highlight Ameritrade
Holding Corporation's Second Quarter Results
OMAHA, Neb., April 16 /PRNewswire/ -- Ameritrade Holding Corporation (Nasdaq: AMTD - news) today reported
record net revenues of $30.1 million for the second quarter of fiscal 1998, a 64 percent increase over the second quarter,
fiscal 1997, and a 17 percent sequential increase over the first quarter of fiscal 1998. The sequential revenue increase
was achieved despite having seven fewer trading days in the second quarter as compared to the first quarter of fiscal
1998. The Company opened a record 73,000 new accounts in the second quarter of fiscal 1998 as individual investors
enthusiastically embraced the Ameritrade message. The Company has opened 124,000 new accounts in just two quarters
of fiscal 1998, more than doubling the core discount brokerage account base over this period.
Ameritrade Holding reported a net loss of $0.3 million or $0.02 per share in the second quarter of fiscal 1998, compared
to net income of $3.5 million or $0.26 per share, in the second quarter of fiscal 1997. The net loss in the 1998 quarter
resulted from the Company's planned commitment to account generation through its advertising campaign. Advertising
expenditures were $9.6 million in the second 1998 quarter, compared to $2.9 million in the second quarter of fiscal
1997. Isolating the impact of this investment in account generation, pre-advertising net income before taxes (NIBT)
totaled $9.3 million in the second quarter of fiscal 1998, a 26 percent sequential increase over the first quarter of fiscal
1998.
''We continue to be thrilled with the response to our ad campaign. The response to our ads has exceeded even my
expectations -- and my expectations are always high,'' said J. Joe Ricketts, Chairman and Chief Executive Officer of
Ameritrade Holding. ''The results of our account generation effort this quarter were magnificent. The account and net
revenue numbers continue to solidify the position of Ameritrade as the fastest growing major on-line brokerage. We
promised at the beginning of our fiscal year that the impact of our advertising campaign would not be fully appreciated
until we reported the March quarter. We have delivered on that promise -- in spades.''
''The net revenue and pre-advertising NIBT growth was also quite gratifying,'' said Ricketts. ''With seven fewer
trading days in our second quarter as compared to our first quarter, we think the double-digit sequential increases are
very impressive.''
New records were also set in customer trading activity and assets in customer accounts. Trades per day reached 17,589
in the second quarter, fiscal 1998, an increase of 170 percent over second quarter fiscal 1997 and a 66 percent sequential
increase over the first quarter of fiscal 1998. Assets in customer accounts reached a record $10.1 billion at March 27,
1998, a 124 percent increase over the year-earlier assets of $4.5 billion, and a 31 percent increase over the $7.7 billion
total at December 31, 1997. Average assets per core account were approximately $42,000. The 73,000 new accounts
opened in the quarter on top of a base of 147,000 accounts at December 31, 1997 brought the period end total to
217,000 core discount brokerage accounts after factoring in attrition of 3,000 accounts for the second quarter.
Net revenues for the six months of fiscal 1998 increased 65 percent to $55.8 million from $33.8 million for the same
period in fiscal 1997. Net loss for the six months of fiscal 1998 was $11.5 million as compared to net income of $3.4
million in fiscal 1997 as advertising expenses increased to $34.5 million for the six-month period in 1998, a 259%
increase from the $9.6 million spent in the 1997 period. Pre-advertising NIBT for the six months of fiscal 1998 totaled
$16.7 million, a 12 percent increase over the $14.9 million generated in fiscal 1997.
New Developments During Second Quarter
Ameritrade Holding's second quarter of record growth created demand for qualified employees, training and additional
computer capacity. ''We continued to build our infrastructure during the second quarter in anticipation of our future
growth. Our headcount increased to 811 full-time associates ending March, 1998, up from 660 at the end of December,
1997,'' said Ameritrade Holding's President and Chief Operating Officer Joe Konen. ''We currently have
approximately 50 registered representatives in training and have invested $6.9 million in the past quarter on increasing
our server capacity and other infrastructure.''
Other developments during the second quarter include the purchase of Prodigy Internet Investor, a comprehensive
financial software application for portfolio tracking and investment research. ''Prodigy Internet Investor will allow us to
provide value-added investment tools to our customers,'' said Konen. ''One of the additional benefits of the acquisition
was the availability of a highly talented development team, who will provide further benefits to Ameritrade as we build
future online financial applications.
''We also enhanced our strategic partnership with Intuit Inc. [Nasdaq:INTU - news] by offering the Online Investment
Tracking service through Quicken(R) 98 for Windows software. Individuals with Quicken 98 will be able to use the
Online Investment Tracking service to connect directly to Ameritrade to obtain brokerage and mutual fund account
information via the Internet through the Open Financial Exchange(TM) communications specifications. This new feature
provides another channel for Ameritrade to provide investors with valuable tools to help manage their portfolios.''
Outlook
''As we begin the second half of fiscal 1998, the outlook for Ameritrade has never been better,'' continued Ricketts.
''We begin the second half with 217,000 core discount brokerage accounts, after achieving a doubling in our core
business in just six months. Acquisition cost per new account now stands at $278 year to date after posting a cost per
new account of $131 in the second quarter. The cost per new account will trend closer to $200 for the year as we enjoy
the momentum generated by our advertising efforts. We are now poised to deliver outstanding bottom line results with
this account base. As we implement our usual cyclical reduction of advertising expenditures into the summer months,
the profitability in our customer base will manifest itself in the next two quarters.''
This press release contains statements that are forward-looking 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, decisions with regard to products and services, changes in revenues and
profits, and significant changes in the market environment at home or abroad.
Ameritrade Holding Corporation is a financial services firm located in Omaha, Nebraska offering discount brokerage
and securities clearing. Press releases and other information can be found on the Company web site at www.amtd.com.
Ameritrade Holding Corporation trades on the Nasdaq Stock Market under the symbol ''AMTD''.
AMERITRADE HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Quarter ended Six Months ended
Mar. 27, 1998 Mar. 28, 1997 Mar. 27, 1998 Mar. 28, 1997
Revenues:
Commissions and
clearing fees $19,434,307 $12,703,022 $35,209,381 $23,142,324
Interest revenue 14,798,690 8,117,403 27,908,539 15,124,608
Equity income from
investments 1,204,639 907,290 2,527,693 1,695,539
Other 1,324,060 913,208 2,480,749 1,720,158
Total revenues 36,761,696 22,640,923 68,126,362 41,682,629
Interest expense 6,684,080 4,197,256 12,373,053 7,887,266
Net revenues 30,077,616 18,443,667 55,753,309 33,795,363
Expenses excluding interest:
Employee compensation
and benefits 7,927,199 4,812,075 14,691,907 8,954,499
Commissions and
clearance 1,296,841 769,197 2,272,429 1,397,749
Communications 3,332,028 1,390,622 6,456,836 2,613,099
Occupancy and
equipment costs 2,269,363 1,217,566 4,213,046 2,329,436
Advertising 9,572,470 2,937,649 34,513,770 9,568,003
Other 5,996,445 1,908,634 11,417,773 3,589,043
Total expenses
excluding
interest 30,394,346 13,035,743 73,565,761 28,451,829
Income before provision
for income taxes (316,730) 5,407,924 (17,812,452) 5,343,534
Provision for
income taxes (45,856) 1,939,202 (6,292,236) 1,950,178
Net Income $(270,874) $3,468,722 $(11,520,216) $3,393,356
Earnings per share $(0.02) $0.26 $(0.79) $0.26
Weighted average
shares outstanding 14,517,605 13,245,041 14,517,479 13,019,955
AMERITRADE HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
March 27, 1998 Sept. 26, 1997
Assets:
Cash and segregated
investments $543,235,569 $373,286,368
Customer receivables 532,811,918 343,230,787
Other 49,681,630 40,839,588
Total assets $1,125,729,117 $757,356,743
Liabilities and Stockholders' Equity
Liabilities:
Customer payables $1,038,698,280 $667,684,439
Note payable to bank 10,000,000 --
Other 21,583,478 22,683,210
Total liabilities 1,070,281,758 690,367,649
Stockholders' equity 55,447,359 66,989,094
Total liabilities and
stockholders' equity $1,125,729,117 $757,356,743
AMERITRADE HOLDING CORPORATION
SELECTED OPERATING DATA
Quarter ended
March 27, 1998 Dec. 31, 1997 Sept. 26, 1997
Trading days 59 66 63
Average customer trades per day 17,589 10,619 8,617
Assets in customer
accounts (in billions) $10.1 $7.7 $7.3
Core discount brokerage(A):
Open accounts 217,000 147,000 98,000
Source of customer trades:
Internet 60% 53% 34%
Other on-line 13% 16% 16%
Registered representative 27% 31% 50%
(A) Statistics below relate to the core discount brokerage account base
only. Total customer base including core accounts and non-core
accounts (primarily clearing accounts and bank referral accounts)
total 333,000 at 3/27/98.
SOURCE: Ameritrade Holding Corporation |
