NDB--What a fabulous report!
Tuesday March 30, 6:30 am Eastern Time
Company Press Release
SOURCE: National Discount Brokers Group, Inc.
National Discount Brokers Group Reports Third Quarter Revenue up 81%; Active Accounts up 38%, Net Income from Continuing Operations up 329%
JERSEY CITY, N.J., March 30 /PRNewswire/ -- National Discount Brokers Group, Inc. (NYSE: NDB - news), an on-line discount brokerage company, Nasdaq market maker and NYSE specialist business, today announced record results for its fiscal third quarter ended February 28, 1999.
The Company reported net income of $8,172,000, or $0.58 per share, in the third quarter of fiscal 1999, up 94% when compared to net income of $4,221,000, or $0.30 per share, in the third quarter of fiscal 1998. Revenues from continuing operations for the third quarter of fiscal 1999 rose 81% to $68,236,000 from $37,720,000 for the comparable period in fiscal 1998, while net income from continuing operations rose 329% from $1,904,000 for the quarter ended February 28, 1998 to $8,172,000 for the quarter ended February 28, 1999.
The Company reported revenues from continuing operations for the nine-month period ended February 28, 1999 of $152,261,000 compared to $120,646,000 for the comparable period last year, an increase of 26%. Net income for the first nine months of fiscal 1999 was $12,720,000, or $0.90 per share, up 41% when compared to net income of $9,017,000, or $0.68 per share, for the first nine months of fiscal 1998.
The Company's revenue growth was due in part to the addition of 35,000 new active accounts (up 38% from February 28, 1998) to the existing customer base of our on-line discount brokerage subsidiary, National Discount Brokers/ndb.com. NDB considers all same stock, same side, same day trades of an individual customer to be one trade and processed 557,000 such commissionable trades during the quarter ended February 28, 1999, up 61% from the same quarter in fiscal 1998. NDB customer transaction volume averaged approximately 9,300 commissionable trades per day during the quarter, with a high of 13,163 commissionable trades on January 12, 1999. Customer assets also jumped 29% from the level of a year earlier, to $6.5 billion as of February 28, 1999. In addition, NDB's advertising budget and its alliances with affinity partners have proven to be cost effective.
The Company's Nasdaq market maker unit, Sherwood Securities Corp., posted significantly higher pre-tax profit margins for the three and nine months ended February 28, 1999. Sherwood's ticket volume also increased 74% over the same quarter in the prior year and the Company's share of total Nasdaq/OTC securities rose to 5.10% in February 1999 from 4.71% a year earlier.
The Company also announced its intended divestiture of its interest in Equitrade Partners L.L.C., a specialist firm that oversees trading in approximately 203 stocks (including 168 common stocks) on the floor of The New York Stock Exchange. Arthur Kontos, the Company's Chief Executive Officer, stated that the proposed disposition of Equitrade is part of the Company's strategic plan to focus its efforts on building the Internet brokerage services and fee based businesses of National Discount Brokers/ndb.com, its on-line discount broker. He added further that the execution services provided by Sherwood Securities Corp. remain a critical complement to ndb.com's strategic plan.
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. As of February 28, 1999, National Discount Brokers had approximately 128,000 customer accounts, with assets approximating $6.5 billion. Sherwood Securities' main operations are as a wholesale market maker in approximately 3,700 Nasdaq and small-cap securities. National Discount Brokers Group, Inc. also owns a membership interest in Equitrade Partners L.L.C., a specialist on the New York Stock Exchange. Combined, the three entities generated approximately 2.8 million transactions during the fiscal quarter ended February 28, 1999. The Company has offices in Jersey City, New York, Los Angeles, Chicago, Denver and Boston. Customers can access National Discount Brokers at www.ndb.com; via the PowerBroker automated touch-tone telephone system (800-631-8884) or by calling 800-4-1-PRICE.
NATIONAL DISCOUNT BROKERS GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
February 28 February 28
1999 1998 1999 1998
Revenues(a): $68,236 $37,720 $152,261 $120,646
Operating income 15,267 4,950 23,880 17,504
Minority interest 20 (1,362) (123) (4,512)
Income from continuing
operations before
income taxes 15,287 3,588 23,757 12,992
Income taxes 7,115 1,684 11,037 5,858
Net income from
continuing operations 8,172 1,904 12,720 7,134
Discontinued operations(b):
Net loss from discontinued
operations
(net of tax benefit) -- (387) -- (821)
Gain on sale of
discontinued
operations (net of taxes) -- 2,704 -- 2,704
Net income $8,172 $4,221 $12,720 $9,017
Net income per common and common equivalent share:
Basic:
Net income per share-continuing
Operations
(net of taxes) $0.58 $0.14 $0.91 $0.54
Net loss per
share - discontinued
Operations
(net of taxes) -- (0.03) -- (0.06)
Gain on sale of
discontinued Operations -- 0.19 -- 0.20
Net income per share $0.58 $0.30 $0.91 $0.68
Weighted average shares
outstanding and
common stock
equivalents 14,001,718 14,116,572 14,028,253 13,168,693
Net income per common and common equivalent share(c):
Diluted:
Net income per
share-continuing
Operations
(net of taxes) $0.58 $0.14 $0.90 $0.54
Net loss per
share - discontinued
operations
(net of taxes) -- (0.03) -- (0.06)
Gain on sale of
discontinued
operations -- 0.19 -- 0.20
Net income per share $0.58 $0.30 $0.90 $0.68
Weighted average shares
outstanding and
common stock
equivalents 14,204,529 14,144,593 14,101,183 13,254,140
(a) Certain reclassifications (out of the individual statement of income
line items) have been made to reflect the prior year's results of
discontinued operations separately (as a net amount).
(b) In February 1998, MXNet, Inc., a wholly owned subsidiary of the
Company which delivers comprehensive technical solutions to trading
organizations, was sold. The Company also sold the AMEX specialist
division of Sherwood Securities Corp. in February 1998.
(c) The sum of the individual quarters' diluted earnings per common share
does not equal the total amount for the nine months ended
February 28, 1999 due to the effect of averaging the number of shares
of common stock equivalents throughout the year.
BALANCE SHEET HIGHLIGHTS
(UNAUDITED)
(In thousands, except per share amounts)
February 28, 1999 May 31, 1998
Total assets $243,620 $188,474
Common stockholders'
equity before investments
available for sale $133,239 $122,813
Unrealized gain on
investments available for sale 100 2,615
Total common
stockholders' equity $133,339 $125,428
Book value (per weighted
average share - basic) $9.51 $9.34
Book value (per weighted
average share - diluted) $9.46 $9.29
SOURCE: National Discount Brokers Group, Inc.
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