Exhibit 99.1
Jefferies Announces Quarterly Results
- Net Revenues of $349 Million
- Net Loss of $24 Million
- Loss Per Share of $0.17
- Investment Banking Revenues up 15% to $167 Million
NEW YORK--(BUSINESS WIRE)--Jefferies Group, Inc. (NYSE: JEF) today announced financial results for the fourth quarter ended December 31, 2007.
Highlights for the fourth quarter ended December 31, 2007:
- Net revenues were $349.4 million, compared to $374.2 million for the fourth quarter of 2006.
- Net loss was $24.2 million, compared to net earnings of $55.8 million for the fourth quarter of 2006.
- Net loss per share (diluted) was $0.17, compared to net earnings per share (diluted) of $0.38 for the fourth quarter of 2006.
- Investment banking revenues were up 15% to $167.2 million, compared to $145.2 million for the fourth quarter of 2006.
Highlights for the year ended December 31, 2007:
- Net revenues were $1.6 billion, compared to $1.5 billion for the year ended 2006.
- Net earnings were $144.7 million, compared to $205.8 million in for the year ended 2006.
- Net earnings per share (diluted) were $0.97, compared to $1.42 for the year ended 2006.
- Investment banking revenues were $750.2 million, compared to $540.6 million for the year ended 2006.
“Despite the incredibly difficult second half of 2007, we completed the year with record net revenues and the third best net earnings in Jefferies’ 46-year history,” commented Richard B. Handler, Chairman and Chief Executive Officer of Jefferies. “We are not satisfied with our results in the fourth quarter but believe our franchise is intact, our balance sheet is strong, and our 2,543 employee-shareholders are committed to doing our absolute best, regardless of the environment.”
Conference Call
A conference call with management discussion of financial results for the fourth quarter and year ended December 31, 2007 will be held on January 23, 2008 at 9:00 AM Eastern and can be accessed at (706) 634-9290. A replay of the call will be available two hours post-call at (402) 977-9140 (code: 21370677). A live audio webcast and delayed replay will also be available under “Investor Relations” at www.jefferies.com. Questions for consideration by management can be submitted in advance through “Contact Us” at www.jefferies.com or by calling 203-708-5975 by 8:30 AM Eastern on January 23, 2008.
About Jefferies
Jefferies, a global investment bank and institutional securities firm, has served growing and mid-sized companies and their investors for over 45 years. Headquartered in New York, with more than 25 offices around the world, Jefferies provides clients with capital markets and financial advisory services, institutional brokerage, securities research and asset management. The firm is a leading provider of trade execution in equity, high yield, convertible and international securities for institutional investors and high net worth individuals. Jefferies & Company, Inc. is the principal operating subsidiary of Jefferies Group, Inc. (NYSE: JEF; www.jefferies.com). Jefferies International Limited is a UK-incorporated, wholly owned subsidiary of Jefferies Group, Inc.
JEFFERIES GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in Thousands, Except Per Share Amounts) (Unaudited) | ||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||
Dec. 31, 2007 | Dec. 31, 2006 | Dec. 31, 2007 | Dec. 31, 2006 | |||||||||
Revenues: | ||||||||||||
Commissions | $99,823 | $72,092 | $355,601 | $280,681 | ||||||||
Principal transactions | 69,570 | 114,914 | 390,374 | 468,002 | ||||||||
Investment banking | 167,204 | 145,167 | 750,192 | 540,596 | ||||||||
Asset management fees and | ||||||||||||
investment income (loss) from managed funds | (6,052 | ) | 29,418 | 23,534 | 109,550 | |||||||
Interest | 328,926 | 143,847 | 1,174,883 | 528,882 | ||||||||
Other | 2,831 | 7,910 | 24,311 | 35,497 | ||||||||
Total revenues | 662,302 | 513,348 | 2,718,895 | 1,963,208 | ||||||||
Interest expense | 312,905 | 139,113 | 1,150,805 | 505,606 | ||||||||
Revenues, net of interest expense | 349,397 | 374,235 | 1,568,090 | 1,457,602 | ||||||||
Non-interest expenses: | ||||||||||||
Compensation and benefits | 283,538 | 197,425 | 946,309 | 791,255 | ||||||||
Floor brokerage and clearing fees | 21,587 | 16,201 | 71,851 | 62,564 | ||||||||
Technology and communications | 31,783 | 20,977 | 103,763 | 80,840 | ||||||||
Occupancy and equipment rental | 20,450 | 15,402 | 76,765 | 59,792 | ||||||||
Business development | 17,614 | 12,577 | 56,594 | 48,634 | ||||||||
Other | 15,896 | 17,458 | 67,074 | 65,863 | ||||||||
Total non-interest expenses | 390,868 | 280,040 | 1,322,356 | 1,108,948 | ||||||||
(Loss)/earnings before income taxes, minority | ||||||||||||
interest and cumulative effect of change | ||||||||||||
in accounting principle, net | (41,471 | ) | 94,195 | 245,734 | 348,654 | |||||||
Income tax (benefit)/expense | (14,134 | ) | 38,018 | 93,178 | 137,541 | |||||||
(Loss)/earnings before minority interest and cumulative effect | ||||||||||||
of change in accounting principle, net | (27,337 | ) | 56,177 | 152,556 | 211,113 | |||||||
Minority interest in (loss) earnings of | ||||||||||||
consolidated subsidiaries, net | (3,135 | ) | 394 | 7,891 | 6,969 | |||||||
(Loss)/earnings before cumulative effect of change | ||||||||||||
in accounting principle, net | (24,202 | ) | 55,783 | 144,665 | 204,144 | |||||||
Cumulative effect of change in accounting principle, net | - | - | - | 1,606 | ||||||||
Net (loss)/earnings | ($24,202 | ) | $55,783 | $144,665 | $205,750 | |||||||
(Loss)/earnings per share: | ||||||||||||
Basic- | ||||||||||||
(Loss)/earnings before cumulative effect of | ||||||||||||
change in accounting principle, net | ($0.17 | ) | $0.41 | $1.02 | $1.53 | |||||||
Cumulative effect of change in accounting principle, net | - | - | - | 0.01 | ||||||||
Net (Loss)/earnings | ($0.17 | ) | $0.41 | $1.02 | $1.54 | |||||||
Diluted- | ||||||||||||
(Loss)/earnings before cumulative effect of | ||||||||||||
change in accounting principle, net | ($0.17 | ) | $0.38 | $0.97 | $1.41 | |||||||
Cumulative effect of change in accounting principle, net | - | - | - | 0.01 | ||||||||
Net (Loss)/earnings | ($0.17 | ) | $0.38 | $0.97 | $1.42 | |||||||
Weighted average shares: | ||||||||||||
Basic | 140,726 | 136,438 | 141,515 | 133,898 | ||||||||
Diluted | 140,726 | 150,599 | 153,807 | 147,531 | ||||||||
Effective Tax Rate | 34.1 | % | 40.4 | % | 37.9 | % | 39.4 | % |
JEFFERIES GROUP, INC. AND SUBSIDIARIES SELECTED STATISTICAL INFORMATION (Amounts in Thousands, Except Per Share Amounts) (Unaudited) | ||||||||||||
| Quarters ended | |||||||||||
12/31/2007 | 9/30/2007 | 6/30/2007 | 3/31/2007 | 12/31/2006 | 9/30/2006 | |||||||
Statement of Earnings | ||||||||||||
Revenues, net of interest expense | $349,397 | $334,424 | $465,460 | $418,809 | $374,235 | $340,610 | ||||||
Non-interest expenses: | ||||||||||||
Compensation and benefits | 283,538 | 183,503 | 251,602 | 227,666 | 197,425 | 184,421 | ||||||
Non-personnel expenses | 107,330 | 95,600 | 85,467 | 87,650 | 82,615 | 79,852 | ||||||
(Loss)/earnings before income taxes, | ||||||||||||
minority interest and cumulative effect | ||||||||||||
of change in accounting principle, net | (41,471 | ) | 55,321 | 128,391 | 103,493 | 94,195 | 76,337 | |||||
Income tax (benefit)/expense | (14,134 | ) | 21,608 | 45,046 | 40,658 | 38,018 | 29,734 | |||||
(Loss)/earnings before minority interest | ||||||||||||
and cumulative effect of change | ||||||||||||
in accounting principle, net | (27,337 | ) | 33,713 | 83,345 | 62,835 | 56,177 | 46,603 | |||||
Minority interest in (loss) earnings of | ||||||||||||
consolidated subsidiaries, net | (3,135 | ) | (5,060 | ) | 15,510 | 576 | 394 | 663 | ||||
Net (loss)/earnings | ($24,202 | ) | $38,773 | $67,835 | $62,259 | $55,783 | $45,940 | |||||
Diluted (loss)/earnings per share | ($0.17 | ) | $0.26 | $0.45 | $0.42 | $0.38 | $0.32 | |||||
Financial Ratios | ||||||||||||
Pretax operating margin | -11.9 | % | 16.5 | % | 27.6 | % | 24.7 | % | 25.2 | % | 22.4 | % |
Compensation and benefits / net revenues | 81.2 | % | 54.9 | % | 54.1 | % | 54.4 | % | 52.8 | % | 54.1 | % |
Effective tax rate | 34.1 | % | 39.1 | % | 35.1 | % | 39.3 | % | 40.4 | % | 39.0 | % |
JEFFERIES GROUP, INC. AND SUBSIDIARIES SELECTED STATISTICAL INFORMATION (Amounts in Thousands, Except Per Share Amounts) (Unaudited) | |||||||||
Quarters ended | |||||||||
12/31/2007 | 9/30/2007 | 6/30/2007 | 3/31/2007 | 12/31/2006 | 9/30/2006 | ||||
Revenues by Source | |||||||||
Equities | $139,248 | $140,296 | $144,563 | $173,057 | $151,974 | $112,635 | |||
Fixed Income & Commodities | |||||||||
Fixed Income (excluding high yield) | |||||||||
and Commodities | 36,201 | 16,502 | 40,443 | 46,128 | 32,964 | 50,871 | |||
High Yield | (3,225 | ) | (7,387 | ) | 34,123 | 10,337 | 9,978 | 11,188 | |
Fixed Income & Commodities Total | 32,976 | 9,115 | 74,566 | 56,465 | 42,942 | 62,059 | |||
Total | 172,224 | 149,411 | 219,129 | 229,522 | 194,916 | 174,694 | |||
Investment banking | 167,204 | 189,780 | 223,093 | 170,115 | 145,167 | 144,763 | |||
Asset management fees and investment income (loss) from managed funds: | |||||||||
Asset management fees | 6,419 | 5,369 | 7,294 | 9,451 | 14,190 | 6,345 | |||
Investment income (loss) from managed funds | (12,471 | ) | (11,652 | ) | 6,090 | 13,034 | 15,228 | 10,438 | |
Total | (6,052 | ) | (6,283 | ) | 13,384 | 22,485 | 29,418 | 16,783 | |
Interest | 328,926 | 334,056 | 310,739 | 201,162 | 143,847 | 132,424 | |||
Total revenues | $662,302 | $666,964 | $766,345 | $623,284 | $513,348 | $468,664 | |||
Other Data | |||||||||
Number of trading days | 64 | 63 | 63 | 61 | 63 | 63 | |||
Average employees | 2,521 | 2,472 | 2,319 | 2,265 | 2,239 | 2,212 | |||
Common shares outstanding | 124,453 | 125,657 | 125,740 | 124,238 | 119,547 | 118,876 | |||
Weighted average shares: | |||||||||
Basic | 140,726 | 142,822 | 142,092 | 140,897 | 136,438 | 135,140 | |||
Diluted | 140,726 | 155,480 | 154,301 | 152,058 | 150,599 | 148,908 | |||
As of December 31, 2007, stockholders' equity amounted to $1.8 billion, resulting in book value of $14.15 per share. |
CONTACT:
Jefferies Group, Inc.
Peregrine Broadbent, 212-284-2338
Chief Financial Officer