EXHIBIT 99
Jefferies Group Announces Record Third Quarter Results;
Revenues, Net Earnings and Earnings Per Share up 32%, 57% and 46%,
Respectively
NEW YORK--(BUSINESS WIRE)--Oct. 19, 2004--Jefferies Group, Inc.
(NYSE:JEF) today announced record third quarter financial results for
the quarter ended September 30, 2004.
Highlights for the record third quarter ended September 30, 2004:
-- Total revenues were up 32% to $293.1 million versus $221.9
million for the third quarter of 2003.
-- Net earnings were up 57% to a record of $32.3 million compared
to $20.5 million for the third quarter of 2003.
-- Earnings per share (diluted) were up 46% to tie the record of
$0.51 compared to $0.35 for the third quarter of 2003.
-- Total trading revenues were up 21% to a record of $171.0
million versus $141.3 million for the third quarter of 2003.
-- Investment banking revenues were up 72% to $72.1 million
versus $42.0 million for the third quarter of 2003.
-- Asset management related revenues were up 20% to $11.6 million
versus $9.7 million for the third quarter of 2003.
Highlights for the record first nine months ended September 30,
2004:
-- Total revenues were up 37% to a record $873.4 million versus
$637.5 million for the first nine months of 2003.
-- Net earnings were up 79% to a record $96.0 million compared to
$53.5 million for the first nine months of 2003.
-- Earnings per share (diluted) were up 64% to a record $1.51
compared to $0.92 for the first nine months of 2003.
-- Total trading revenues were up 19% to a record $477.8 million
versus $402.0 million for the first nine months of 2003.
-- Investment banking revenues were up 89% to a record $247.1
million versus $130.9 million for the first nine months of
2003.
-- Asset management related revenues were up 167% to a record
$54.3 million versus $20.3 million for the first nine months
of 2003.
"The third quarter has generally been our seasonally slowest
period, so we are pleased that each of our businesses performed
solidly despite the summer slowdown," said Richard B. Handler,
Chairman and Chief Executive Officer of Jefferies. "The environment
has been and most likely will continue to be challenging. We will
continue to diversify our platform and expand our trading, research,
asset management, and investment banking businesses that focus on
middle market and growth companies."
"Our 1,750 employee-partners have worked tenaciously to serve our
loyal client base. We owe both of these constituencies great thanks in
helping us to build our firm," added John C. Shaw, Jr., President of
Jefferies. "We will continue to focus on cost containment, variable
compensation, high employee ownership, and the strong desire to best
serve our clients."
Conference Call
A conference call with management discussion of financial results
for the third quarter ended September 30, 2004 will be held October 19
at 11:00 AM (Eastern) and can be accessed at 617-801-9714 (code:
97306224). A replay of the call will be available two hours post-call
at 617-801-6888 (code: 88546460). A live audio webcast and delayed
replay will also be available under "Investor Relations" at
www.jefco.com. Questions for consideration by management can be
submitted in advance through the "Contact Us" function at
www.jefco.com or by calling 203-708-5975 by 9:30 AM Eastern on October
19.
About Jefferies
Jefferies, a global investment bank and institutional securities
firm, has served middle-market and growth companies and their
investors for over 40 years. Headquartered in New York, with more than
20 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.jefco.com).
Forward-Looking Statements
This press release contains statements that may constitute
"forward-looking statements" within the meaning of the safe harbor
provisions of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. These forward-looking
statements include statements about our future and may contain
expectations regarding revenues, earnings, operations and other
financial projections, and may include statements of our operating
environment, future performance, positioning, plans and objectives.
These forward-looking statements represent only our belief regarding
future events, many of which, by their nature, are inherently
uncertain and outside of our control. Actual results could differ
materially from those projected in these forward-looking statements.
Please refer to our recent Quarterly Report on Form 10-Q filed with
the Securities and Exchange Commission on August 2, 2004 and other
filings we make with the Securities and Exchange Commission for a
discussion of important factors that could cause actual results to
differ materially from those projected in these forward-looking
statements. We do not assume any obligation to update any
forward-looking statement we make.
JEFFERIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended Nine Months Ended
--------------------- ---------------------
Sept. 30, Sept. 26, Sept. 30, Sept. 26,
2004 2003 2004 2003
---------- ---------- ---------- ----------
Revenues:
Commissions $ 62,020 $ 59,379 $ 200,325 $ 185,806
Principal transactions 109,000 81,936 277,441 216,162
Investment banking 72,122 42,000 247,066 130,919
Asset management fees and
investment income from
managed funds 11,630 9,704 54,258 20,291
Interest 35,948 23,582 85,132 75,782
Other 2,382 5,346 9,144 8,495
---------- ---------- ---------- ----------
Total revenues 293,102 221,947 873,366 637,455
Interest expense 39,316 21,117 93,206 73,545
---------- ---------- ---------- ----------
Revenues, net of interest
expense 253,786 200,830 780,160 563,910
---------- ---------- ---------- ----------
Non-interest expenses:
Compensation and benefits 141,434 115,996 436,191 325,508
Floor brokerage and
clearing fees 12,770 12,323 39,750 35,618
Technology and
communications 16,029 13,998 48,632 42,622
Occupancy and equipment
rental 10,250 7,824 29,306 24,649
Business development 7,189 6,022 24,529 17,591
Other 11,164 8,527 30,907 26,223
---------- ---------- ---------- ----------
Total non-interest
expenses 198,836 164,690 609,315 472,211
---------- ---------- ---------- ----------
Earnings before income
taxes and
minority interest 54,950 36,140 170,845 91,699
Income taxes 21,516 12,906 63,980 33,618
---------- ---------- ---------- ----------
Earnings before minority
interest 33,434 23,234 106,865 58,081
Minority interest in
earnings of consolidated
subsidiaries, net 1,159 2,702 10,895 4,626
---------- ---------- ---------- ----------
Net earnings $ 32,275 $ 20,532 $ 95,970 $ 53,455
========== ========== ========== ==========
Earnings per share:
Basic $ 0.56 $ 0.38 $ 1.68 $ 1.01
========== ========== ========== ==========
Diluted $ 0.51 $ 0.35 $ 1.51 $ 0.92
========== ========== ========== ==========
Weighted average shares:
Basic 57,833 53,534 57,233 52,738
Diluted 63,867 59,502 63,616 58,269
* 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 and 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
--------------------------------------------------
9/30/ 6/25/ 3/26/ 12/31/ 9/26/
2004 2004 2004 2003 2003
--------- --------- --------- --------- ---------
Statement of
Earnings
- ------------
Revenues, net of
interest expense $253,786 $247,867 $278,507 $265,704 $200,830
Non-interest
expenses:
Compensation and
benefits 141,434 135,819 158,938 149,201 115,996
Non-personnel
expenses 57,402 57,372 58,350 63,669 48,694
--------- --------- --------- --------- ---------
Earnings before
income taxes and
minority interest 54,950 54,676 61,219 52,834 36,140
Income taxes 21,516 21,207 21,257 19,233 12,906
--------- --------- --------- --------- ---------
Earnings before
minority interest 33,434 33,469 39,962 33,601 23,234
Minority interest in
earnings of
consolidated
subsidiaries, net 1,159 1,683 8,053 3,005 2,702
--------- --------- --------- --------- ---------
Net earnings $32,275 $31,786 $31,909 $30,596 $20,532
========= ========= ========= ========= =========
Diluted earnings per
share $0.51 $0.50 $0.51 $0.50 $0.35
========= ========= ========= ========= =========
Financial Ratios
- ----------------
Pretax operating
margin 21.7% 22.1% 22.0% 19.9% 18.0%
Compensation and
benefits/net
revenues 55.7% 54.8% 57.1% 56.2% 57.8%
Effective tax rate 39.2% 38.8% 34.7% 36.4% 35.7%
* 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 and 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
--------------------------------------------------
9/30/ 6/25/ 3/26/ 12/31/ 9/26/
2004 2004 2004 2003 2003
--------- --------- --------- --------- ---------
Revenues by Source
- --------------------
Commissions and
principal
transactions:
Equities $112,192 $88,605 $92,741 $92,021 $85,142
International 19,027 19,901 25,068 21,507 21,951
High yield 10,845 11,830 12,380 13,866 9,216
Convertibles 5,913 5,449 7,578 6,899 5,146
Execution 7,989 8,637 8,570 6,493 6,209
Bonds Direct 11,604 10,795 11,152 8,600 8,066
Other proprietary 3,450 2,786 1,254 763 5,585
--------- --------- --------- --------- ---------
Total 171,020 148,003 158,743 150,149 141,315
Investment banking 72,122 83,572 91,372 98,689 42,000
Asset management
fees and investment
income from managed
funds:
Asset management
fees 7,990 7,641 10,105 6,690 4,891
Investment income
from managed
funds 3,640 11,186 13,696 5,161 4,813
--------- --------- --------- --------- ---------
Total 11,630 18,827 23,801 11,851 9,704
Interest 35,948 24,445 24,739 26,621 23,582
Other 2,382 2,323 4,439 1,951 5,346
--------- --------- --------- --------- ---------
Total revenues $293,102 $277,170 $303,094 $289,261 $221,947
========= ========= ========= ========= =========
Other Data
- --------------------
Number of trading
days 67 62 59 66 63
Average employees 1,749 1,692 1,612 1,432 1,384
Common shares
outstanding 56,872 57,202 56,808 56,702 56,425
Weighted average
shares:
Basic 57,833 57,559 56,298 54,113 53,534
Diluted 63,867 63,927 63,078 61,039 59,502
* 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 and effected as a
stock dividend on August 15, 2003.
As of September 30, 2004, stockholders' equity amounted to $968
million, resulting in a book value of $17.02 per share.
CONTACT: Jefferies Group, Inc.
Joseph A. Schenk, 212-284-2338