EXHIBIT 99.1
Jefferies Announces Record Quarterly Earnings Per Share up 67% from
Prior Year
NEW YORK--(BUSINESS WIRE)--Oct. 14, 2003--Jefferies Group, Inc.
(NYSE: JEF) today announced financial results for the third quarter
and nine months ended September 26, 2003.
Highlights for the third quarter ended September 26, 2003:
-- Earnings per share (diluted) increased 67% to a record $0.35,
exceeding the $0.21 earned in the third quarter of 2002.
-- Net earnings were up 74% to a record $20.5 million compared to
$11.8 million for the third quarter of 2002.
-- Earnings before income taxes and minority interest grew 87% to
a record $36.1 million compared to $19.3 million for the third
quarter of 2002.
-- Total revenues rose 24% to $221.9 million versus $179.2
million in the third quarter of 2002.
-- Investment banking revenues climbed 43% to $42.0 million
compared to $29.5 million for the third quarter of 2002.
Highlights for the first nine months ended September 26, 2003:
-- Earnings per share (diluted) increased 7% to a record $0.92,
exceeding the $0.86 earned in the first nine months of 2002.
-- Net earnings were up 14% to a record $53.5 million compared to
$47.1 million for the first nine months of 2002.
-- Earnings before income taxes and minority interest grew 16% to
a record $91.7 million compared to $79.2 million for the first
nine months of 2002.
-- Total revenues rose 11% to a record $637.5 million versus
$575.4 million for the first nine months of 2002.
-- Investment banking revenues climbed 20% to $130.9 million
compared to $108.8 million for the first nine months of 2002.
"We had solid results with a significant number of our business
units showing gains from the previous quarter as the capital markets
and economy improved," said Richard B. Handler, Chairman and Chief
Executive Officer of Jefferies. "We are particularly pleased with this
quarter as it extends Jefferies' strong performance during the past
three record years."
"Our investment in human capital over the past few years is paying
dividends, and we remain focused on the expansion and diversification
of the Jefferies platform," added John C. Shaw, Jr., President of
Jefferies. "Our ability to attract and retain meaningful producers in
each of our businesses continues to be key to our growth."
Conference Call
A conference call with management discussion of financial results
for the third quarter ended September 26, 2003 will be held October 14
at 11:30 AM (Eastern) and can be accessed at 617-801-9714 (code:
22871334). A replay of the call will be available two hours post-call
at 617-801-6888 (code: 14373162). A live audio Webcast and delayed
replay will also be available under "Investor Relations" at
www.jefco.com. Questions for consideration by management may be
submitted in advance through the "Contact Us" function at
www.jefco.com or by calling 203-708-5975 by 10 AM Eastern on October
14.
About Jefferies
Jefferies Group, Inc. (NYSE: JEF) is a holding company whose
affiliated companies, including its principal operating subsidiary,
Jefferies & Company, Inc., offer a variety of services for
institutional investors and middle-market companies. Subsidiaries of
Jefferies Group, Inc., together, comprise a full-service investment
bank and institutional securities firm focused on the middle market.
Jefferies offers financial advisory, capital raising, mergers and
acquisitions, and restructuring services to small and mid-cap
companies. The firm provides outstanding trade execution in equity,
high yield, convertible and international securities, as well as
fundamental research and asset management capabilities, to
institutional investors. Additional services include correspondent
clearing, prime brokerage, private client services and securities
lending. The firm's leadership in equity trading is recognized by
numerous consulting and survey organizations, and Jefferies'
subsidiary, Helfant Group, Inc., executes approximately eleven percent
of the daily reported volume of the NYSE.
Through its subsidiaries, Jefferies Group, Inc. employs more than
1,400 people in offices worldwide, including Atlanta, Boston, Chicago,
Dallas, London, Los Angeles, New York, Paris, San Francisco, Tokyo,
Washington and Zurich. Further information about Jefferies, including
a description of investment banking, trading, research and asset
management services, can be found at www.jefco.com.
JEFFERIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended Nine Months Ended
--------------------- ---------------------
Sept. 26, Sept. 27, Sept. 26, Sept. 27,
2003 2002 2003 2002
---------- ---------- ---------- ----------
Revenues:
Commissions $ 59,379 $ 72,183 $ 185,806 $ 199,819
Principal transactions 86,749 48,260 225,875 182,215
Investment banking 42,000 29,451 130,919 108,769
Interest 23,582 25,091 75,782 71,167
Asset management 4,891 2,390 10,578 8,601
Other 5,346 1,776 8,495 4,799
---------- ---------- ---------- ----------
Total revenues 221,947 179,151 637,455 575,370
Interest expense 21,117 20,242 73,545 60,588
---------- ---------- ---------- ----------
Revenues, net of interest
expense 200,830 158,909 563,910 514,782
---------- ---------- ---------- ----------
Non-interest expenses:
Compensation and
benefits 115,996 91,878 325,508 298,160
Floor brokerage and
clearing fees 12,323 14,542 35,618 42,132
Technology and
communications 13,998 13,446 42,622 38,839
Occupancy and equipment
rental 7,824 6,711 24,649 19,017
Business development 6,022 5,445 17,591 17,435
Other 8,527 7,573 26,223 20,024
---------- ---------- ---------- ----------
Total non-interest
expenses 164,690 139,595 472,211 435,607
---------- ---------- ---------- ----------
Earnings before income
taxes and
minority interest 36,140 19,314 91,699 79,175
Income taxes 12,906 7,532 33,618 32,106
---------- ---------- ---------- ----------
Earnings before minority
interest 23,234 11,782 58,081 47,069
Minority interest in
earnings of
consolidated
subsidiaries, net 2,702 -- 4,626 --
---------- ---------- ---------- ----------
Net earnings $ 20,532 $ 11,782 $ 53,455 $ 47,069
========== ========== ========== ==========
Earnings per share:
Basic $ 0.41 $ 0.24 $ 1.06 $ 0.95
========== ========== ========== ==========
Diluted $ 0.35 $ 0.21 $ 0.92 $ 0.86
========== ========== ========== ==========
Weighted average shares:
Basic 50,642 49,291 50,225 49,356
Diluted 59,502 55,237 58,269 54,957
All share and per share information has been restated to retroactively
reflect the effect of the two-for-one stock split declared by the
Board of Directors on July 14, 2003 effected as a stock dividend on
August 15, 2003.
JEFFERIES GROUP, INC. AND SUBSIDIARIES
SELECTED STATISTICAL INFORMATION
(Dollars in Thousands, Except Per Share Amounts)
(Unaudited)
Quarters ended
-------------------------------------------------
9/26/ 6/27/ 3/28/ 12/31/ 9/27/
2003 2003 2003 2002 2002
--------- --------- --------- --------- ---------
Statement of Earnings
- -----------------------
Revenues, net of
interest expense $200,830 $198,831 $164,249 $159,907 $158,909
Non-interest
expenses:
Compensation and
benefits 115,996 114,115 95,397 87,425 91,878
Non-personnel
expenses 48,694 52,414 45,595 47,965 47,717
--------- --------- --------- --------- ---------
Earnings before
income taxes and
minority interest 36,140 32,302 23,257 24,517 19,314
Income taxes 12,906 11,640 9,072 9,015 7,532
--------- --------- --------- --------- ---------
Earnings before
minority interest 23,234 20,662 14,185 15,502 11,782
Minority interest
in earnings of
consolidated
subsidiaries, net 2,702 1,924 -- -- --
--------- --------- --------- --------- ---------
Net earnings $20,532 $18,738 $14,185 $15,502 $11,782
========= ========= ========= ========= =========
Diluted earnings
per share $0.35 $0.32 $0.25 $0.28 $0.21
========= ========= ========= ========= =========
Financial Ratios
- ------------------
Pretax operating
margin 18.0% 16.2% 14.2% 15.3% 12.2%
Compensation and
benefits/net
revenues 57.8% 57.4% 58.1% 54.7% 57.8%
Effective tax rate 35.7% 36.0% 39.0% 36.8% 39.0%
All per share information has been restated to retroactively reflect
the effect of the two-for-one stock split declared by the Board of
Directors on July 14, 2003 effected as a stock dividend on August 15,
2003.
JEFFERIES GROUP, INC. AND SUBSIDIARIES
SELECTED STATISTICAL INFORMATION
(Dollars and Shares in Thousands)
(Unaudited)
Quarters ended
-------------------------------------------------
9/26/ 6/27/ 3/28/ 12/31/ 9/27/
2003 2003 2003 2002 2002
--------- --------- --------- --------- ---------
Revenues by Source
- --------------------
Commissions and
principal
transactions:
Equities $85,142 $85,047 $69,993 $86,802 $81,613
International 21,951 25,618 16,231 16,703 21,602
High yield 10,843 9,434 10,835 7,479 6,502
Convertibles 5,146 8,570 8,184 7,825 6,823
Execution 6,210 5,946 5,089 5,842 6,380
Bonds Direct 8,066 6,038 4,538 3,293 3,723
Other proprietary
trading 8,770 9,554 476 (5,713) (6,200)
--------- --------- --------- --------- ---------
Total 146,128 150,207 115,346 122,231 120,443
Investment banking 42,000 44,716 44,203 31,059 29,451
Interest 23,582 30,701 21,499 20,860 25,091
Asset management 4,891 3,010 2,677 3,425 2,390
Other 5,346 1,575 1,574 1,831 1,776
--------- --------- --------- --------- ---------
Total revenues $221,947 $230,209 $185,299 $179,406 $179,151
========= ========= ========= ========= =========
Other Data
- ------------
Number of trading
days 63 63 60 65 63
Average employees 1,384 1,364 1,359 1,323 1,292
Common shares
outstanding 56,425 55,142 55,136 53,904 53,790
Weighted average
shares:
Basic 50,642 50,204 49,811 48,878 49,291
Diluted 59,502 58,077 57,124 55,236 55,237
All share and per share information has been restated to retroactively
reflect the effect of the two-for-one stock split declared by the
Board of Directors on July 14, 2003 effected as a stock dividend on
August 15, 2003.
As of September 26, 2003, stockholders' equity amounted to $716
million, resulting in a book value of $12.69 per share.
CONTACT: Joseph A. Schenk, 212-284-2338