Exhibit 99.2
FOR IMMEDIATE RELEASE
Media Contact: Investor Contact:
Linda Finnerty Kevin Zuccala
DLJdirect Inc. Donaldson, Lufkin & Jenrette
201.308.3187 212.892.4693
ir@dlj.com
DLJdirect REPORTS RECORD FIRST QUARTER
EARNINGS OF $0.13 PER SHARE
- FIRST QUARTER REVENUES UP 142 PERCENT OVER PRIOR YEAR -
JERSEY CITY, N.J. - APRIL 18, 2000 - DLJdirect (NYSE: DIR), the online brokerage
service of Donaldson, Lufkin & Jenrette, Inc. (NYSE: DLJ), today reported record
revenues of $114.7 million for the first quarter of 2000, a 142 percent increase
over the $47.4 million in revenues reported for the comparable period a year
ago, and 50 percent over the $76.7 million for the fourth quarter of 1999.
DLJdirect also reported net income of $13.6 million, or $0.13 per share
(diluted), for the first quarter of 2000. This represented a $6.4 million or 90
percent increase over the $7.2 million or $0.07 per share (pro forma diluted)
for the first quarter of 1999, and a $15.6 million increase over the net loss of
$2.0 million or $0.02 per share (diluted), for the fourth quarter of 1999.
"First quarter 2000 results set records of significant new proportions
for DLJdirect," said Blake Darcy, Chief Executive Officer. "Quarterly revenues
came in just shy of full year 1998 revenues and our first quarter pre-tax profit
of $25.5 million was 42 percent higher than pre-tax profits in any full year of
our twelve-year history. Global customer assets reached a record $29.4 billion,
with average assets per active account increasing to $69,000, up from $63,000 at
year-end 1999. We added over 82,000 new active accounts worldwide this quarter,
twice as many as last quarter, at
an average global acquisition cost of $245 per account." As of March 31, 2000,
DLJdirect had 429,000 total active accounts.
Commissions reached $74.5 million in the first quarter, up 133 percent
over the comparable period one year ago and 68 percent over the fourth quarter
of 1999. Fee income more than doubled over the first quarter of 1999 to $18.7
million. iNautix Technologies Inc., DLJdirect's technology subsidiary, continued
to increase its contribution to fee income by posting record quarterly fees of
$8.4 million, up 100 percent from one year ago and 13 percent over the fourth
quarter of 1999. iNautix designs, develops, and hosts global e-commerce
solutions, and its products are now being used by more than 80 financial
services firms.
Net interest increased three-fold year-over-year and 33 percent
sequentially as DLJdirect's strategy to focus on high-net-worth individuals
resulted in increased margin activity. Underwriting revenues declined slightly
from the record set in the fourth quarter of 1999 to $3.1 million. DLJdirect
served as co-manager for $1.5 billion of IPO offerings during the quarter, and
was the number two on-line distributor of IPOs for the first quarter, according
to Securities Data Corporation. THE STREET.COM ranked DLJdirect number one for
IPO availability.
RECORD TRADING VOLUMES
DLJdirect executed a record 2.8 million trades domestically during the
first quarter, one million more than in the prior quarter. On a worldwide basis,
average daily trades were 50,300, a 65 percent increase over the previous record
volume set in the fourth quarter of 1999. "With record setting volume and market
volatility this quarter, our systems were certainly pressure tested," said Glenn
Tongue, President of DLJdirect. "Even with these extraordinary activity levels,
I am proud to report that we continue to receive the highest rankings awarded by
independent third parties for the quality of our systems and services in each of
our local markets."
Blake Darcy added, "We realize that our continued success is based on
the reliability of our systems and our ability to provide superior service to
our clients. To that end, we recently completed the installation of a new, fully
redundant data center and are opening a new Investor Service Center in Sandy
City, Utah - our fourth in the
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U.S. Hiring and training have already begun for this facility, which will open
later this year and ultimately accommodate 1,000 additional Investor Service
Representatives."
RECORD INTERNATIONAL RESULTS
The international component of DLJdirect's business experienced
significant growth milestones during the first quarter as well, with
international activities representing 12 percent of total trades, 9 percent of
active accounts, and 8 percent of client assets. DLJdirect SFG Securities Inc.,
which began operations in Japan in June 1999, added 13,000 active accounts
during the first quarter of 2000, a 44 percent increase over the 9,000 accounts
added last quarter, nearly doubling the total number of active accounts in Japan
to 27,000. DLJdirect SFG continued to add to its product and service offerings
with PC voice-recognition capabilities, allowing investors to trade securities
by speaking into their computers. In addition, DLJdirect Village, the first
Internet brokerage branch office in Japan, opened on February 29th. Japanese
investors have access to local as well as U.S. stock markets through DLJdirect
SFG.
DLJdirect UK more than tripled its account base during the first
quarter of 2000, adding 9,000 active new accounts, for a total active account
base of 13,000 after only six months of operation. DLJdirect UK, which offers
access to local and U.S. stock markets, continues to add new products to its
offerings and recently introduced ISA accounts to UK investors. ISAs, which are
similar to U.S. Individual Retirement Accounts, offer investors an opportunity
to shelter their investment profits from capital gains taxes.
During the first quarter, DLJdirect announced an agreement with Hong
Kong-based Hutchison Whampoa Limited of Hong Kong to form a new company to
distribute DLJdirect's online brokerage services to countries throughout Asia.
The new company, DLJ Hutchison direct Limited, will service investors in Hong
Kong, mainland China, Thailand, Singapore, Malaysia, the Philippines, Taiwan,
and Indonesia. A second joint venture was announced during the first quarter
with Capital Union E.C. and Webtrade EVentures Ltd. The company formed as a
result of that initiative, DLJdirect-EUnion, commenced operations on April 15th,
providing online
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discount brokerage services to investors in 14 countries in the Middle East and
North Africa.
AWARDS AND ACCOLADES
DLJdirect received four stars, the highest rating awarded, in BARRON'S
fifth annual review of online brokers. Measurements included execution, ease of
use, reliability, commissions, and range of offerings. DLJdirect was again named
"Best of the Web" in the Spring 2000 special Internet issue of FORBES magazine,
and in THESTREET.COM Readers' Online Brokers Survey 2000, DLJdirect received
number one rankings for reliability, real-time market and company news, IPO
availability, bond and options trading, and e-mail alerts.
DLJdirect's proprietary investment management and online trading
software, DLJdirect MarketSpeedTM 3.0, was awarded "E-Commerce Software - Best
Product" and "Online Brokerage Service - Best Product" by the Software &
Information Industry Association at the 2000 Codie Awards ceremony honoring
excellence for software and information products and services. The DLJdirect Web
site continued to earn top rankings in the Keynote Web Broker Trading Index for
average response time and success rate for standard stock-order transactions.
In addition to its U.S. awards, DLJdirect has also achieved accolades
for its international platforms. KABUKO, a Japanese Web site that ranks online
brokerages and other service providers, rated DLJdirect SFG the best online
broker in Japan. DLJdirect UK received top-rated online broker and Web site
awards from FIND.CO.UK, the leading directory for UK financial services,
INVESTORS CHRONICLE, and the MONEYWISE 2000 GUIDE TO ONLINE BROKING.
ABOUT DLJdirect
DLJdirect is one of the world's premier online brokerage firms.
Established in 1988, DLJdirect offers a diversified range of investment products
and services to sophisticated, self-directed investors. As of March 31, 2000,
DLJdirect had more than 930,000 worldwide customer accounts representing $29.4
billion in assets. Headquartered in Jersey City, N.J., with offices in
Parsippany, N.J., Charlotte, N.C., London, Tokyo, Hong Kong, and Dubai,
DLJdirect employs more than 1,000 people.
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DLJdirect common stock trades on the New York Stock Exchange under the ticker
symbol "DIR." For more information on DLJdirect, visit the company's Web site at
www.DLJdirect.com.
Donaldson, Lufkin & Jenrette (DLJ) is a leading integrated investment
and merchant bank serving institutional, corporate, government and individual
clients. DLJ's businesses include securities underwriting; sales and trading;
investment and merchant banking; financial advisory services; investment
research; venture capital; correspondent brokerage services; online, interactive
brokerage services; and asset management. Founded in 1959 and headquartered in
New York City, DLJ employs approximately 10,600 people worldwide and maintains
offices in 13 cities in the United States and 16 cities in Europe, Latin America
and Asia. The company has two classes of common stock trading on the New York
Stock Exchange. Shares trading under the ticker symbol "DLJ" represent
Donaldson, Lufkin & Jenrette, Inc. Shares trading under the ticker symbol "DIR"
track the performance of DLJdirect, its online brokerage business. For more
information on Donaldson, Lufkin & Jenrette, refer to the company's Web site at
www.DLJ.com. The firm's world headquarters are located at 277 Park Avenue, New
York, NY 10172.
Tables Follow
DLJdirect
COMBINED SUMMARY OF OPERATIONS (UNAUDITED)
(in thousands, except per share data and financial ratios)
------------------------------------------------
QUARTER ENDED
MARCH 31, 2000 VS. 1999
2000 1999 $ %
------------------------------------------------
Revenues:
Commissions $ 74,539 $ 32,054 $ 42,485 132.5%
Underwritings 3,088 427 2,661 623.2%
Fees 18,707 9,169 9,538 104.0%
Interest 18,394 5,705 12,689 222.4%
--------- --------- --------- -----
Total revenues 114,728 47,355 67,373 142.3%
--------- --------- --------- -----
Costs and expenses:
Compensation and benefits 27,171 10,683 16,488 154.3%
Interest 515 153 362 236.6%
Brokerage, clearing, exchange
fees, and other 18,600 8,854 9,746 110.1%
Advertising 18,070 6,101 11,969 196.2%
Occupancy and related costs 2,390 542 1,848 341.0%
Communications and technology 10,101 5,394 4,707 87.3%
Other operating expenses 12,412 4,367 8,045 184.2%
--------- --------- --------- -----
Total costs and expenses 89,259 36,094 53,165 147.3%
--------- --------- --------- -----
Income before income tax provision and equity
in net loss of joint venture 25,469 11,261 14,208 126.2%
--------- --------- --------- -----
Income tax provision 10,650 4,088 6,562 160.5%
Equity in net loss of joint venture (2) (1,205) -- (1,205) N/M
--------- --------- --------- -----
Net income $ 13,614 $ 7,173 $ 6,441 89.8%
========= ========= ========= ====
Earnings per share (3):
Basic $ 0.13 $ 0.07 $ 0.06 85.7%
Diluted $ 0.13 $ 0.07 $ 0.06 85.7%
========= ========= ========= ====
Weighted average notional and outstanding
shares:
Basic 102,650 102,650 0 N/M
Diluted 102,732 102,650 82 N/M
========= ========= ========= ====
Earnings attributable to:
DLJ Retained Interest $ 11,177 $ 7,173 $ 4,004 55.8%
DLJdirect Tracking Stock (1) 2,437 -- 2,437 N/M
========= ========= ========= ====
Tracking Stock earnings per share (3):
Basic $ 0.13
Diluted $ 0.13
=========
Tracking Stock weighted average common
shares:
Basic 18,400
Diluted 18,482
=========
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DLJdirect
COMBINED SUMMARY OF OPERATIONS (UNAUDITED)
(in thousands, except per share data and financial ratios)
-------------
QUARTER ENDED
MARCH 31,
2000
-------------
BALANCE SHEET DATA AT END OF PERIOD:
Total allocated equity $ 245,370
============
Common shares at end of period:
DLJ Retained Interest (Notional) 84,250
DLJdirect Tracking Stock Outstanding 18,400
============
OTHER FINANCIAL DATA AT END OF PERIOD:
Return on average common stockholders'
equity (4) 23.0%
============
(1) DLJdirect Common Stock tracks the separate performance of DLJ Inc.'s
existing online discount brokerage and related investment services
business for periods subsequent to the date of the offering ("Tracking
Stock"). On May 28, 1999 ("the closing date"), DLJ Inc. issued in an
initial public offering, 18.4 million shares of DLJdirect Common Stock.
The shares of DLJdirect Common Stock have no voting rights, except in
certain limited circumstances.
As a result of the offering, DLJ Inc. has a retained interest of 82.1% in
DLJdirect represented by 84.3 million notional shares. The 18.4 million
shares of Tracking Stock reflect the 17.9% owned by the public. Prior to
the offering, DLJ Inc. had a 100% interest in the earnings of DLJdirect.
(2) DLJdirect has a 50% interest in a joint venture with a Japanese bank
which amount is included in equity from net loss of joint venture in the
statement of operations.
(3) Earnings per share amounts have been calculated by dividing net income by
the weighted average notional and outstanding tracking shares. For
periods prior to the quarter ended September 30, 1999, these amounts are
pro forma as if the issuance of the Tracking Stock occurred at the
beginning of 1998. Earnings per share amounts for the quarter ended March
31, 2000 are calculated based on actual results. The notional shares
represent DLJ's 82.1% retained interest in DLJdirect. Prior to the
offering, DLJ Inc. had a 100% interest in the earnings of DLJdirect.
These pro forma amounts are presented for comparative purposes only.
Tracking Stock earnings per common share amounts have been calculated by
dividing earnings applicable to common shares by the weighted average
actual common shares outstanding. Earnings per share for periods prior to
the closing date are not presented as such amounts are not meaningful.
(4) Return on average common stockholders' equity is calculated on an
annualized basis for periods of less than one full year using a monthly
average and is based on earnings applicable to Tracking Stock.
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