Ameritrade Announces Record Earnings From Ongoing Operations for Quarter and Fiscal Year.Business Editors OMAHA Omaha, city, United States Omaha (ō`məhä, –hô), city (1990 pop. 335,795), seat of Douglas co., E Nebr., on the west bank of the Missouri River; inc. 1857. , Neb.--(BUSINESS WIRE)--Oct. 24, 2002 Company improves operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before by $0.34 per share year over year; Datek merger synergies on target Ameritrade Holding Corporation (Nasdaq:AMTD AMTD Arithmetic Mean Temperature Difference AMTD Automatic Magnetic Tape Distribution AMTD Affordability and Manufacturing Technology Demonstration ) today announced results for the quarter and fiscal year ended September September: see month. 27, 2002. The Company continued to execute on its commitment to deliver profitability and positive cash flow despite market conditions. Fourth Quarter Results -- Record net income of $9.7 million, or $0.04 per share from ongoing operations; -- Reported net loss per share of ($0.17) after non-cash charge related to TradeCast; -- 75,000 new accounts opened and funded at an average cost per account of $136; -- Datek was immediately accretive to earnings and cash-flow; -- Net revenues of $115.6 million; and -- Average trades per day of 87,000 with pro forma trades per day of 143,000, including Datek. Fourth quarter results include Datek's results for 15 trading days In Business, the trading day is the time span that a particular stock exchange is open. For example, the New York Stock Exchange is, as of 2006, open from 09:30AM to 4:00PM. Trading days never take place on weekends. beginning September 9, 2002, the closing date of the merger. 2002 Fiscal Year Results -- Record net income of $26.9 million, or $0.12 per share from ongoing operations; -- Reported net loss per share of ($0.13) after the TradeCast non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. ; -- 284,000 new accounts opened and funded at an average cost per account of $215; -- Total open accounts of 2,842,000; -- Net revenues of $430.8 million; -- 4% Debt-to-equity ratio debt-to-equity ratio The relationship between long-term funds provided by creditors and funds provided by owners. A firm's debt-to-equity ratio is calculated by dividing long-term debt by owners' equity. Both items are shown on the balance sheet. ; -- Client assets of $33.9 billion; and -- Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses totaling $134 million. "Ameritrade is financially stronger now than at any point in our 27-year history. We continued to grow accounts organically and through acquisitions despite a very difficult year for the entire financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. industry. With the recent Datek merger, we have nearly 3 million clients and lead our industry peer group with the lowest operating costs operating costs npl → gastos mpl operacionales , the most online equity trades and highest operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: ," said Joe Moglia Joe Moglia is the current CEO of TD Ameritrade, the largest online discount brokerage firm in the world. Born in Queens, New York, Moglia was a football coach for 16 years, finishing as a Dartmouth College assistant from 1981-1983. , chief executive officer of Ameritrade. "We expect to continue to deliver profitability in 2003 regardless of market conditions." Non-cash Charge As previously announced, Ameritrade has made a decision to sell its TradeCast subsidiaries and consequently recorded a non-cash, pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge to earnings of approximately $63 million, or approximately $0.21 per share after tax, in the fourth fiscal quarter. Goodwill accounted for approximately $53 million of the charge, most of which is not tax deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). . When completed, the disposition is expected to result in approximately $8 million in annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. savings. Merger Synergies on Target Ameritrade already has taken actions that by the end of the first fiscal quarter should result in the realization of approximately $29 million in pre-tax synergies, by reducing headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. and occupancy, consolidating call centers and eliminating redundancies in administration. This translates to an after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. run rate of $58 million or $0.12 per share. The remaining synergies will come from the consolidation of clearing platforms and front-end front-end adj. 1. Of or relating to the initial phase of a project: a front-end investment. 2. Of or relating to the forward parts of a vehicle: a front-end alignment. technology. Stock Repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. Ameritrade initiated a stock buy-back program on September 19, 2002. Through October October: see month. 23, the Company has repurchased 4,948,000 shares at a weighted average price of $3.82 per share. Marketing Launch New products and services were rolled out to clients last Monday Monday: see week. . The client offerings were developed by combining the best of what Ameritrade and Datek previously offered. All clients now have access to a newly enhanced Streamer(R), the Ameritrade Command Center and 10-Second Guarantee(TM). The Company also introduced the Ameritrade Apex(TM) program, which offers the highest level of service and value to active investors. In connection with the new product introduction, Ameritrade launched its new corporate branding Corporate branding is the practice of using a company's name as a product brand name. It is an attempt to leverage corporate brand equity to create product brand recognition. It is a type of family branding or umbrella brand. campaign, "What's Your Share."(TM) The ads illustrate Ameritrade as the champion of the individual investor, leveling the playing field by bringing more institutional tools to retail investors Retail Investor Individual investors who buy and sell securities for their personal account, and not for another company or organization. Notes: Retail investors buy in much smaller quantities than larger institutional investors. . Outlook Ameritrade has updated its current projections for fiscal year 2003 in the "Outlook Statement" section of its corporate Web site located at www.amtd.com. About Ameritrade Holding Corporation Ameritrade Holding Corporation (www.amtd.com) has a 27-year brokerage history of providing a self-directed self-di·rect·ed adj. Directed or guided by oneself, especially as an independent agent: the self-directed study of a language. self approach to investment services. The Company, through its Private Client and Institutional Client divisions, provides tiered levels of brokerage products and services tailored to meet the varying investing, trading and execution needs of individual investors, financial institutions and corporations. Ameritrade's landmark merger with Datek Online Holdings Corp. combines the client service, technology, products and innovation of both companies to bring enhanced value to its clients and shareholders. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. This document contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions of the federal securities laws. In particular, any projections regarding our future profitability, operating cash flow savings, synergies, revenues, expenses, earnings, capital expenditures or activity rates are forward-looking statements. These statements reflect only our current expectations and are not guarantees of future performance or results. These statements involve risks, uncertainties and assumptions that could cause actual results or performance to differ materially from those contained in the forward-looking statements. These risks, uncertainties and assumptions include the successful integration of the operations of Ameritrade and Datek, operational cost savings resulting from the merger of Ameritrade and Datek, market fluctuations and changes in client trading activity, general economic conditions, increased competition, regulatory and legal matters and uncertainties and other risk factors described in our Registration Statement on Form S-4 (Registration No. 333-88632) and our latest Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . These forward-looking statements speak only as of the date on which the statements were made. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
AMERITRADE HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
In thousands, except per share data
(Unaudited)
Quarter ended Year ended
------------- ----------
Sept. 27, Sept. 28, Sept. 27, Sept. 28,
2002 2001 2002 2001
--------- --------- --------- ---------
Revenues:
Commissions and clearing
fees $66,284 $46,023 $252,526 $269,384
Interest revenue 30,973 35,458 116,345 191,530
Other 22,359 14,972 74,182 37,763
--------- --------- --------- ---------
Total revenues 119,616 96,453 443,053 498,677
Client interest expense 4,012 4,218 12,260 43,947
--------- --------- --------- ---------
Net revenues 115,604 92,235 430,793 454,730
--------- --------- --------- ---------
Operating expenses:
Employee compensation and
benefits 35,529 30,497 133,897 144,820
Communications 8,619 9,689 36,091 39,896
Occupancy and equipment
costs 13,821 15,545 55,294 60,523
Depreciation and
amortization 7,423 10,702 27,945 36,033
Professional services 11,968 9,276 36,512 54,992
Interest on borrowings 1,132 1,502 5,110 11,067
Other 10,751 5,277 30,008 28,363
--------- --------- --------- ---------
Total operating expenses 89,243 82,488 324,857 375,694
--------- --------- --------- ---------
Operating margin 26,361 9,747 105,936 79,036
Advertising 10,203 8,250 61,047 134,770
Gain on sale of investment 0 (9,692) 0 (9,692)
Restructuring and asset
impairment charges 63,406 32,068 63,406 38,268
Debt conversion expense 0 0 0 62,082
--------- --------- --------- ---------
Loss before income taxes (47,248) (20,879) (18,517) (146,392)
Income tax expense (benefit) (1,560) (6,855) 10,446 (55,215)
--------- --------- --------- ---------
Net loss $(45,688) $(14,024) $(28,963) $(91,177)
========= ========= ========= =========
Basic and diluted loss per
share $(0.17) $(0.07) $(0.13) $(0.49)
Weighted average shares
outstanding 261,549 195,586 227,327 185,830
AMERITRADE HOLDING CORPORATION
SELECTED OPERATING DATA
Quarter ended
--------------------------------
Sept. 27, June 28, Mar. 29,
2002 2002 2002
---------- ---------- ----------
Trading days 63 64 60
Average client trades per day 87,278 73,506 89,129
Assets in client accounts (in
billions) $33.9 $27.5 $31.6
Core brokerage open accounts(a) 2,842,000 1,917,000 1,877,000
(a) This relates to the core brokerage account base only. Total client
base including core accounts and non-core accounts (primarily
clearing accounts, stock option administration accounts and bank
referral accounts) total 3,189,000 at 9/27/02.
AMERITRADE HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands
(Unaudited)
Sept. 27, Sept. 28,
2002 2001
----------- -----------
Assets:
Cash and cash equivalents $197,379 $24,134
Segregated cash and investments 5,665,109 2,044,257
Broker/dealer receivables 1,400,065 198,535
Client receivables 1,408,730 971,823
Goodwill and intangible assets 978,827 225,861
Other 154,455 189,261
----------- -----------
Total assets $9,804,565 $3,653,871
=========== ===========
Liabilities and stockholders' equity
Liabilities:
Broker/dealer payables $1,917,483 $304,301
Client payables 6,352,409 2,777,916
Notes payable 47,645 70,145
Other 388,629 130,076
----------- -----------
Total liabilities 8,706,166 3,282,438
Stockholders' equity 1,098,399 371,433
----------- -----------
Total liabilities and stockholders'
equity $9,804,565 $3,653,871
=========== ===========
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