Exhibit 99.1
Jefferies Announces Third Quarter Results
Net revenues of $334 million
Net earnings of $39 million
Earnings per share of $0.26
Investment banking of $190 million
NEW YORK--(BUSINESS WIRE)--Oct. 16, 2007--Jefferies Group, Inc.
(NYSE: JEF) today announced financial results for the third quarter
ended September 30, 2007.
Highlights for the third quarter ended September 30, 2007:
-- Net revenues were down 2% to $334.4 million, versus $340.6
million for the third quarter of 2006.
-- Net earnings were down 16% to $38.8 million, compared to $45.9
million for the third quarter of 2006.
-- Earnings per share (diluted) were down 19% to $0.26, compared
to $0.32 for the third quarter of 2006.
-- Investment banking revenues were up 31% to $189.8 million,
compared to $144.8 million for the third quarter of 2006.
"We are pleased that the challenging third quarter is behind us,"
commented Richard B. Handler, Chairman and Chief Executive Officer of
Jefferies. "The fact that our net revenues and net earnings for the
quarter were each merely $7 million below last year's comparable
period results is a testament to the hard work of our 2,513 employee
partners, our diversified business model, our conservative balance
sheet and the loyalty of our client base."
Brian P. Friedman, Executive Committee Chairman, added, "Our
investment banking revenues totaled $190 million, which represents our
second best quarterly total ever. We are pleased with these results
given the difficult market environment which made the normally slow
summer months even more challenging."
Conference Call
A conference call with management discussion of financial results
for the third quarter ended September 30, 2007 will be held October
16th at 9:00 AM (Eastern) and can be accessed at 706-634-9290. A
one-week replay of the call will also be available at 402-977-9140
(reservation code: 21352607). A live audio webcast and delayed replay
can be accessed at www.jefferies.com. Questions for consideration by
management can be submitted by 8:30 AM Eastern on October 16 through
the "Contact Us" function at www.jefferies.com or by calling
203-708-5975.
About Jefferies
Jefferies, a global investment bank and institutional securities
firm, has served growing and mid-sized companies and their investors
for 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 Nine Months Ended
-------------------- -----------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2007 2006 2007 2006
--------- ---------- ----------- -----------
Revenues:
Commissions $ 95,652 $ 67,953 $ 255,778 $ 208,589
Principal transactions 47,325 98,984 320,804 353,088
Investment banking 189,780 144,763 582,988 395,429
Asset management fees
and investment income
from managed funds (6,283) 16,783 29,586 80,132
Interest 334,056 132,424 845,957 385,035
Other 6,434 7,757 21,480 27,587
--------- --------- ----------- -----------
Total revenues 666,964 468,664 2,056,593 1,449,860
Interest expense 332,540 128,054 837,900 366,493
--------- --------- ----------- -----------
Revenues, net of interest
expense 334,424 340,610 1,218,693 1,083,367
--------- --------- ----------- -----------
Non-interest expenses:
Compensation and
benefits 183,503 184,421 662,771 593,830
Floor brokerage and
clearing fees 19,155 15,496 50,264 46,363
Technology and
communications 26,120 21,490 71,980 59,863
Occupancy and equipment
rental 20,280 15,819 56,315 44,390
Business development 13,791 12,653 38,980 36,057
Other 16,254 14,394 51,178 48,405
--------- --------- ----------- -----------
Total non-interest
expenses 279,103 264,273 931,488 828,908
--------- --------- ----------- -----------
Earnings before income
taxes, minority interest
and cumulative effect of
change in accounting
principle, net 55,321 76,337 287,205 254,459
Income taxes 21,608 29,734 107,312 99,523
--------- --------- ----------- -----------
Earnings before minority
interest and cumulative
effect of change in
accounting principle,
net 33,713 46,603 179,893 154,936
Minority interest in
earnings of consolidated
subsidiaries, net (5,060) 663 11,026 6,575
--------- --------- ----------- -----------
Earnings before
cumulative effect of
change in accounting
principle, net 38,773 45,940 168,867 148,361
Cumulative effect of
change in accounting
principle, net - - - 1,606
--------- --------- ----------- -----------
Net earnings $ 38,773 $ 45,940 $ 168,867 $ 149,967
========= ========= =========== ===========
Earnings per share:
Basic-
Earnings before
cumulative effect of
change in accounting
principle, net $ 0.27 $ 0.34 $ 1.19 $ 1.12
Cumulative effect of
change in accounting
principle, net - - - 0.01
--------- --------- ----------- -----------
Net Earnings $ 0.27 $ 0.34 $ 1.19 $ 1.13
========= ========= =========== ===========
Diluted-
Earnings before
cumulative effect of
change in accounting
principle, net $ 0.26 $ 0.32 $ 1.12 $ 1.03
Cumulative effect of
change in accounting
principle, net - - - 0.01
--------- --------- ----------- -----------
Net Earnings $ 0.26 $ 0.32 $ 1.12 $ 1.04
========= ========= =========== ===========
Weighted average shares:
Basic 142,822 135,140 141,905 133,048
Diluted 155,480 148,908 153,911 146,502
Effective Tax Rate 39.1% 39.0% 37.4% 39.1%
JEFFERIES GROUP, INC. AND SUBSIDIARIES
SELECTED STATISTICAL INFORMATION
(Amounts in Thousands, Except Per Share Amounts)
(Unaudited)
Quarters ended
------------------------------------
9/30/2007 6/30/2007 3/31/2007
------------------------------------
Statement of Earnings
- ---------------------------------
Revenues, net of interest expense $ 334,424 $ 465,460 $ 418,809
Non-interest expenses:
Compensation and benefits 183,503 251,602 227,666
Non-personnel expenses 95,600 85,467 87,650
------------------------------------
Earnings before income taxes,
minority interest and cumulative
effect of change in accounting
principle, net 55,321 128,391 103,493
Income taxes 21,608 45,046 40,658
------------------------------------
Earnings before minority interest
and cumulative effect of change
in accounting principle, net 33,713 83,345 62,835
Minority interest in earnings of
consolidated subsidiaries, net (5,060) 15,510 576
------------------------------------
Net earnings $ 38,773 $ 67,835 $ 62,259
====================================
Diluted earnings per share $ 0.26 $ 0.45 $ 0.42
====================================
Financial Ratios
- ---------------------------------
Pretax operating margin 16.5% 27.6% 24.7%
Compensation and benefits / net
revenues 54.9% 54.1% 54.4%
Effective tax rate 39.1% 35.1% 39.3%
12/31/2006 9/30/2006 6/30/2006
-------------------------------------
Statement of Earnings
- ---------------------------------
Revenues, net of interest expense $ 374,235 $ 340,610 $ 327,343
Non-interest expenses:
Compensation and benefits 197,425 184,421 176,675
Non-personnel expenses 82,615 79,852 69,953
------------------------- -----------
Earnings before income taxes,
minority interest and cumulative
effect of change in accounting
principle, net 94,195 76,337 80,715
Income taxes 38,018 29,734 31,357
------------------------- -----------
Earnings before minority interest
and cumulative effect of change
in accounting principle, net 56,177 46,603 49,358
Minority interest in earnings of
consolidated subsidiaries, net 394 663 3,778
-------------------------------------
Net earnings $ 55,783 $ 45,940 $ 45,580
=====================================
Diluted earnings per share $ 0.38 $ 0.32 $ 0.32
=====================================
Financial Ratios
- ---------------------------------
Pretax operating margin 25.2% 22.4% 24.7%
Compensation and benefits / net
revenues 52.8% 54.1% 54.0%
Effective tax rate 40.4% 39.0% 38.8%
JEFFERIES GROUP, INC. AND SUBSIDIARIES
SELECTED STATISTICAL INFORMATION
(Amounts in Thousands, Except Per Share Amounts)
(Unaudited)
Quarters ended
---------------------------------
9/30/2007 6/30/2007 3/31/2007
---------------------------------
Revenues by Source
- ------------------------------------
Equities $ 140,296 $ 144,563 $ 173,057
Fixed Income & Commodities
Fixed Income (excluding high
yield) and Commodities 16,502 40,443 46,128
High Yield (7,387) 34,123 10,337
---------------------------------
Fixed Income & Commodities Total 9,115 74,566 56,465
---------------------------------
---------------------------------
Total 149,411 219,129 229,522
Investment banking 189,780 223,093 170,115
Asset management fees and investment
income from managed funds:
Asset management fees 5,369 7,294 9,451
Investment income from managed funds (11,652) 6,090 13,034
---------------------------------
Total (6,283) 13,384 22,485
Interest 334,056 310,739 201,162
---------------------------------
Total revenues $ 666,964 $ 766,345 $ 623,284
=================================
Other Data
- ------------------------------------
Number of trading days 63 63 61
Average employees 2,472 2,319 2,265
Common shares outstanding 125,657 125,740 124,238
Weighted average shares:
Basic 142,822 142,092 140,897
Diluted 155,480 154,301 152,058
12/31/2006 9/30/2006 6/30/2006
----------------------------------
Revenues by Source
- ------------------------------------
Equities $ 151,974 $ 112,635 $ 101,173
Fixed Income & Commodities
Fixed Income (excluding high
yield) and Commodities 32,964 50,871 28,227
High Yield 9,978 11,188 43,409
----------------------------------
Fixed Income & Commodities Total 42,942 62,059 71,636
----------------------------------
----------------------------------
Total 194,916 174,694 172,809
Investment banking 145,167 144,763 122,932
Asset management fees and investment
income from managed funds:
Asset management fees 14,190 6,345 8,918
Investment income from managed funds 15,228 10,438 13,609
----------------------------------
Total 29,418 16,783 22,527
Interest 143,847 132,424 138,851
----------------------------------
Total revenues $ 513,348 $ 468,664 $ 457,119
==================================
Other Data
- ------------------------------------
Number of trading days 63 63 63
Average employees 2,239 2,212 2,078
Common shares outstanding 119,547 118,876 118,540
Weighted average shares:
Basic 136,438 135,140 133,621
Diluted 150,599 148,908 147,605
As of September 30, 2007, stockholders' equity amounted to $1.8
billion, resulting in book value of $14.58 per share.
CONTACT: Jefferies Group, Inc.
Joseph A. Schenk, CFO, 212-284-2338