Exhibit 99.1
MEDIA CONTACTS: INVESTOR CONTACT:
Charlotte Fox Karen Vernamonti
CSFBDIRECT CSFBDIRECT
201.308.3562 201.308.3475
cfox@CSFBdirect.com kvernamonti@CSFBdirect.com
William G. Armstrong Jr.
G.S. Schwartz & Co.
212.725.4500
wga@schwartz.com
CSFBDIRECT REPORTS FULL YEAR RESULTS
-- REVENUES INCREASE BY 50 PERCENT - WORLDWIDE TRADES GROW BY 60 PERCENT -
WORLDWIDE ACTIVE ACCOUNTS UP 50 PERCENT --
JERSEY CITY, N.J. -- FEBRUARY 8, 2001 -- CSFBDIRECT, (NYSE: DIR), formerly
DLJDIRECT, the online brokerage service of Credit Suisse First Boston, reported
a 50 percent increase in total revenues to $358.4 million for the year ended
December 31, 2000 and a net loss from operations of $3.8 million or $0.04 per
diluted share, compared to total revenues of $239.1 million and operating net
income of $6.9 million or $.07 per diluted share in 1999. For the quarter ending
December 31, 2000, the business incurred a net loss from operations of $6.7
million or $0.06 per diluted share on revenues of $80.4 million, compared to an
operating loss of $2.0 million or $0.02 per diluted share on revenues of $76.7
million for the same period in 1999.
CSFBDIRECT's full year and fourth quarter operating results for 2000 exclude
$4.1 million of after-tax expenses related to the adoption of its new name.
Including rebranding expense items, the reported net loss was $7.9 million or
$0.08 per diluted share for the year and $10.8 million, or $0.10 per diluted
share for the fourth quarter 2000. CSFBDIRECT will be reimbursed for rebranding
expenses by Credit Suisse First Boston (USA), Inc. in the form of capital
contributions.
FIRM HIGHLIGHTS
"CSFBDIRECT completed another year of notable accomplishments in one of the most
volatile markets in history," said Blake Darcy, Chief Executive Officer of
CSFBDIRECT.
"We processed record trading volumes -- 60 percent higher than last year --
launched new products and services, including managed accounts, Asset
Allocator(TM) and streaming Level II quotes; provided our investors entree to
the world of institutional research conferences via Webcast of Credit Suisse
First Boston's Technology Conference; opened our first branch office in Boca
Raton; and expanded our institutional focus to include the Registered Investment
Advisor community complementing our offering of self-directed brokerage services
to 401k plan administrators. Internationally, we launched the CSFBDIRECT service
in the Middle East and Hong Kong via joint ventures with strong, respected
partners. Despite the year's market turbulence, we generated operating income of
$66.1 million before taxes and marketing expenses."
Darcy added that iNautix Technologies, CSFBDIRECT's technology group, achieved
several milestones this year -- revenues doubled, a major software development
operation was established in Chennai, India, and iNautix was awarded the
prestigious CMM Level 2 certification from the Software Engineering Institute
(SEI) of Carnegie Mellon. iNautix is now one of the few U.S. e-developers with
this notable distinction.
Glenn Tongue, President of CSFBDIRECT, noted, "To ensure continued quality
execution and customer service, we completed installation of fully redundant
processing and call centers, opened a new customer service call center in Sandy
City, Utah, and were first to establish entirely paperless account application
and transfer centers. CSFBDIRECT continued to win accolades for outstanding
service and maintained its #1 ranking as manager/co-manager of IPO underwritings
among online brokerage companies for the second year in a row. Further, we
renamed the company, highlighting our association with Credit Suisse First
Boston, a global powerhouse, which enables us to broaden product offerings to
our sophisticated, self-directed investors."
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FULL YEAR RESULTS
CSFBDIRECT continued to post strong increases to major industry metrics. Total
worldwide trades reached 9.3 million -- 60 percent over last year -- while total
worldwide customer accounts grew 36 percent to nearly 1.1 million and active
customer accounts increased 50 percent to 520,000. Revenues for the twelve
months ending December 31, 2000 reached $358.4 million, 50 percent higher than
in 1999. Commissions grew by 35 percent to $193.5 million while interest
revenues of $73.8 million were 87 percent higher than last year. Fees increased
by 76 percent to $84.2 million as iNautix continued to generate record revenues
- -- more than 100 percent over last year to $50.7 million. iNautix designs,
develops, and hosts global e-commerce solutions; its products are now being used
by more than 300 financial services firms. Underwriting revenues decreased by 24
percent to $6.8 million attributable to a slow-down of new offerings during the
third and fourth quarters of 2000.
Net of rebranding expenses, operating expenses increased 59 percent over last
year to $353 million largely attributable to higher employee-related expenses
reflecting increased headcount. Higher trading volumes resulted in increased
brokerage and clearing expenses; call and technology center expansion
contributed to higher occupancy as well as communications and technology
expenses; and other expenses grew commensurate with the expansion of the
business.
Continued expansion and investment in growing international operations
contributed to higher losses sustained by our joint ventures in Japan, the
Middle East and Hong Kong as the combined net losses posted by joint venture
operations totaled $7.0 million compared to $3.2 million last year.
INTERNATIONAL RESULTS
The international component of CSFBDIRECT's business experienced significant
growth during the year. DLJDIRECT SFG, our Japanese joint venture, reported its
fifth consecutive quarter of record revenues. Active customer accounts grew
nearly four-fold and average daily trades were ten times that of last year.
DLJDIRECT SFG Securities processed nearly 8,200 trades per day for the fourth
quarter, up 21 percent over the third quarter 2000.
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Active customer accounts numbered 54,000 with average assets per account of
$50,000. The company is rated number one by Gomez and has received the "Best
Online Financial Site" award from the Electronic Commerce Research Committee, a
non-profit-organization sponsored by Microsoft, Japan Oracle, Compaq, KPMG and
others. "We are especially proud of DLJDIRECT SFG's performance," said Darcy.
"We have every expectation that Hutchison CSFBDIRECT, our joint venture in Hong
Kong, will enjoy similar success as we increase awareness in this important
marketplace."
DLJDIRECT Ltd., the fourth largest broker in the UK by number of accounts and
online trades, also reported impressive growth in 2000. Both active customer
accounts and average daily trades increased more than six-fold over last year.
DLJDIRECT Ltd. was rated the number one online brokerage Web site for ease of
use by Gomez, and the number one online broker by Find.co.uk and the GOOD WEB
GUIDE TO MONEY 2000. Additionally, CSFBDIRECT, which supports DLJDIRECT Ltd.'s
customers investing in U.S. equities, was voted Best Overseas Sharedealing
Service in the UK by SHARES Magazine.
In the Middle East, our joint venture, CSFBDIRECT-EUnion, received the "Best
Financial Services Site" award at the Visa/Arabian Business.com Awards in Dubai.
Panel members included IT professionals from Compaq, IBM, Microsoft, and Oracle.
FOURTH QUARTER RESULTS
Total revenues reached $80.4 million, 5 percent higher than $76.7 million posted
a year ago, as lower commission revenues were more than offset by higher fees
and interest revenues. Fees of $26.0 million represented a quarterly record for
the business primarily due to iNautix posting its ninth consecutive quarter of
record revenue generation. Pre-tax loss from operations of $8.6 million,
compared to a net operating loss of $734,000 in 1999, was primarily as a result
of higher employee-related expenses.
CREDIT SUISSE FIRST BOSTON (USA), INC. FINANCIAL REPORTING
Credit Suisse First Boston (USA), Inc. plans to release its fiscal 2000 earnings
together with its ultimate parent, Credit Suisse Group, on or around March 13,
2001. The Company expects to post a substantial after-tax loss for the year.
This loss results, to a
4
large extent, from restructuring charges and other non-recurring expenses
associated with the acquisition of the Company by Credit Suisse Group on
November 3, 2000 as well as other related integration costs. The Company
experienced a decline in business activity beginning in September due to
integration efforts and slower market and other conditions during the fourth
quarter 2000. The Company is a part of the Credit Suisse First Boston business
unit of Credit Suisse Group, but its results do not reflect the overall
performance of the entire business unit or that of Credit Suisse Group.
ABOUT CSFBDIRECT
CSFBDIRECT is one of the world's premier online brokerage firms offering a
diversified range of investment products and services to sophisticated,
self-directed investors. As of December 31, 2000, CSFBDIRECT had over one
million worldwide customer accounts representing nearly $23 billion in assets.
CSFBDIRECT has received numerous honors over the past year, including number one
for "Transaction Performance and Transaction Success Rate" in November 2000 by
Keynote Systems, Inc.; "Best for Site Reliability" in August 2000 by
TheStreet.com's Online Broker Survey; "Top Online Broker" by the 2000 Reader's
Choice Awards, WORTH magazine; "Best of the Web" in August 2000 by Forbes.com;
"Best Bet, Feature Rich" in May 2000 by PC WORLD magazine; and a "4-Star Rating"
in Spring 2000 by BARRON'S magazine.
Headquartered in Jersey City, NJ with offices in Parsippany, NJ, Charlotte, NC,
Delray Beach, FL, Sandy City, UT, London, Tokyo, Hong Kong, and Dubai,
CSFBDIRECT employs more than 1,800 people. CSFBDIRECT trades on the New York
Stock Exchange under the ticker symbol "DIR" as a tracking stock of Credit
Suisse First Boston (USA), Inc. For more information on CSFBDIRECT, visit the
company's Web site at www.CSFBdirect.com.
ABOUT CREDIT SUISSE FIRST BOSTON
Credit Suisse First Boston (CSFB) is a leading global investment banking firm
serving institutional, corporate, government and individual clients. CSFB's
businesses include
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securities underwriting, sales and trading, investment and merchant banking,
financial advisory services, investment research, venture capital, correspondent
brokerage services and online brokerage services. It operates in over 76
locations across more than 37 countries and 6 continents, and has some 28,000
staff worldwide. The Firm is a business unit of the Zurich based Credit Suisse
Group, a leading global financial services company.
-- TABLES FOLLOW --
CSFBDIRECT
COMBINED SUMMARY OF OPERATIONS (UNAUDITED) - SEE NOTE 2
(in thousands, except per share data and financial ratios)
------------------------------------------------
QUARTER ENDED YEARS ENDED
DECEMBER 31, DECEMBER 31,
2000 1999 2000 1999
------------------------------------------------
Revenues:
Commissions $ 36,197 $ 44,380 $ 193,490 $ 142,805
Underwritings 572 3,519 6,821 8,987
Fees 25,977 14,957 84,169 47,811
Interest 17,638 13,817 73,871 39,529
--------- --------- --------- ---------
Total revenues 80,384 76,673 358,351 239,132
--------- --------- --------- ---------
Costs and expenses:
Compensation and benefits 35,795 19,640 124,119 60,991
Interest 393 359 1,555 1,061
Brokerage, clearing, exchange
fees, and other 10,811 12,267 53,329 39,206
Advertising 13,075 25,452 60,260 62,913
Occupancy and related costs 5,994 1,493 15,554 3,988
Communications and technology 10,197 8,412 44,124 25,169
Rebranding costs (1) 6,600 -- 6,600 --
Other operating expenses 12,719 9,784 53,562 27,764
--------- --------- --------- ---------
Total costs and expenses 95,584 77,407 359,103 221,092
--------- --------- --------- ---------
Income (loss) before income tax provision (benefit)
and equity in net loss of joint ventures (15,200) (734) (752) 18,040
--------- --------- --------- ---------
Income tax provision (benefit) (5,842) 86 183 7,893
Equity in net loss of joint ventures (3) (1,403) (1,167) (6,995) (3,215)
--------- --------- --------- ---------
Net income (loss) $ (10,761) $ (1,987) $ (7,930) $ 6,932
========= ========= ========= =========
Earnings (loss) per share (4):
Basic $ (0.10) $ (0.02) $ (0.08) $ 0.07
Diluted $ (0.10) $ (0.02) $ (0.08) $ 0.07
========= ========= ========= =========
Weighted average notional and outstanding
shares:
Basic 102,650 102,650 102,650 102,650
Diluted 102,650 102,650 102,650 102,660
========= ========= ========= =========
Earnings attributable to:
CSFB (USA) Retained Interest $ (8,835) $ (1,631) $ (6,511) $ 7,835
CSFBDIRECT Tracking Stock (2) (1,926) (356) (1,419) (903)
========= ========= ========= =========
Tracking Stock earnings per share (4):
Basic $ (0.10) $ (0.02) $ (0.08) $ (0.05)
Diluted $ (0.10) $ (0.02) $ (0.08) $ (0.05)
========= ========= ========= =========
Tracking Stock weighted average common shares:
Basic 18,400 18,400 18,400 18,400
Diluted 18,400 18,400 18,400 18,400
========= ========= ========= =========
CSFBDIRECT
COMBINED SUMMARY OF OPERATIONS (UNAUDITED) - SEE NOTE 2
(in thousands, except per share data and financial ratios)
-----------------------------------------------
YEARS ENDED
DECEMBER 31, 2000 VS. 1999
2000 1999 $ %
-----------------------------------------------
Revenues:
Commissions $ 193,490 $ 142,805 $ 50,685 35.5%
Underwritings 6,821 8,987 (2,166) (24.1)%
Fees 84,169 47,811 36,358 76.0%
Interest 73,871 39,529 34,342 86.9%
--------- --------- --------- ------
Total revenues 358,351 239,132 119,219 49.9%
--------- --------- --------- ------
Costs and expenses:
Compensation and benefits 124,119 60,991 63,128 103.5%
Interest 1,555 1,061 494 46.6%
Brokerage, clearing, exchange
fees, and other 53,329 39,206 14,123 36.0%
Advertising 60,260 62,913 (2,653) (4.2)%
Occupancy and related costs 15,554 3,988 11,566 290.0%
Communications and technology 44,124 25,169 18,955 75.3%
Rebranding costs (1) 6,600 -- 6,600 NM
Other operating expenses 53,562 27,764 25,798 92.9%
--------- --------- --------- ------
Total costs and expenses 359,103 221,092 138,011 62.4%
--------- --------- --------- ------
Income before income tax provision and equity in
net loss of joint ventures (752) 18,040 (18,792) (104.2)%
--------- --------- --------- ------
Income tax provision 183 7,893 (7,710) (97.7)%
Equity in net loss of joint ventures (3) (6,995) (3,215) (3,780) (117.6)%
--------- --------- --------- ------
Net income $ (7,930) $ 6,932 $ (14,862) (214.4)%
========= ========= ========= ======
Earnings per share (4):
Basic $ (0.08) $ 0.07 $ (0.15) (214.3)%
Diluted $ (0.08) $ 0.07 $ (0.15) (214.3)%
========= ========= ========= ======
Weighted average notional and outstanding
shares:
Basic 102,650 102,650 0 0.0%
Diluted 102,650 102,660 10 0.0%
========= ========= ========= ======
Earnings attributable to:
CSFB (USA) Retained Interest $ (6,511) $ 7,835 $ (14,346) (183.1)%
CSFBDIRECT Tracking Stock (2) (1,419) (903) (516) 57.1%
========= ========= ========= ======
Tracking Stock earnings per share (4):
Basic $ (0.08) $ (0.05) $ (0.03) 60.0%
Diluted $ (0.08) $ (0.05) $ (0.03) 60.0%
========= ========= ========= ======
Tracking Stock weighted average common shares:
Basic 18,400 18,400 0 0.0%
Diluted 18,400 18,400 0 0.0%
========= ========= ========= ======
CSFBDIRECT
COMBINED SUMMARY OF OPERATIONS (UNAUDITED) - SEE NOTE 2
(1) Credit Suisse First Boston (USA), Inc. (formerly Donaldson, Lufkin &
Jenrette, Inc.) and Subsidiaries, ("CSFB (USA), Inc.") became an indirect
wholly owned subsidiary of Credit Suisse Group, a corporation organized
under the laws of Switzerland, as a result of a merger which was completed
on November 3, 2000. The merger did not have an effect on the outstanding
shares of DLJDIRECT common stock. Effective January 15, 2001, DLJDIRECT
changed its name to CSFBDIRECT. All references to DLJDIRECT have been
changed to CSFBDIRECT. Costs incurred as a result of the name change are
included in rebranding costs in the combined summary of operations.
(2) CSFBDIRECT represents a combination of the assets and liabilities of CSFB
(USA), Inc.'s existing online discount brokerage and related investment
services, rather than a separately incorporated entity. CSFBDIRECT Common
Stock tracks the separate performance of these businesses for periods
subsequent to the date of the offering ("Tracking Stock"). On May 28,
1999, CSFB (USA), Inc. issued in an initial public offering, 18.4 million
shares of CSFBDIRECT Common Stock. The shares of CSFBDIRECT Common Stock
have no voting rights, except in certain limited circumstances. Even
though CSFB (USA), Inc. has allocated certain assets, liabilities,
revenues, expenses and cash flows to CSFBDIRECT, that allocation will not
change the legal title to any assets or responsibility for any
liabilities. Holders of Tracking Stock are common stockholders of CSFB
(USA), Inc. and are subject to all the risks associated with an investment
in CSFB (USA), Inc.
Prior to the offering, CSFB (USA), Inc. designated its existing common
stock as CSFB (USA), Common Stock which represents the performance of CSFB
(USA), Inc.'s primary businesses plus a retained interest in CSFBdirect.
All of CSFB (USA), Inc.'s businesses other than those included in
CSFBDIRECT, plus its retained interest in CSFBDIRECT, are referred to as
CSFB (USA). As a result of the offering, CSFB (USA) has a retained
interest of 82.1% in CSFBDIRECT represented by 84.3 million notional
shares. The 18.4 million shares of CSFBdirect Tracking Stock reflects the
17.9% owned by the public. Prior to the offering CSFB (USA) had a 100%
interest in the earnings of CSFBDIRECT.
(3) CSFBDIRECT has a 50% interest in joint ventures in Japan, Hong Kong and
the Middle East which amounts are included in equity from net loss of
joint ventures in the combined statement of operations.
(4) Earnings per share amounts have been calculated by dividing net income by
the weighted average notional and outstanding tracking shares. The
notional shares represent CSFB (USA)'s 82.1% retained interest in
CSFBDIRECT. Prior to the offering, CSFB (USA) had a 100% interest in the
earnings of CSFBdirect.
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.