Ameritrade Demonstrates Commitment to Profitability.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)--July 23, 2002 Fifth Consecutive Profitable Quarter from Ongoing Operations and Positive Cash Flow Client Input Drives Datek Integration Planning Announcing earnings for the fiscal quarter ended June June: see month. 28, 2002, Ameritrade Holding Corporation (Nasdaq:AMTD AMTD Arithmetic Mean Temperature Difference AMTD Automatic Magnetic Tape Distribution AMTD Affordability and Manufacturing Technology Demonstration ) today proved its ability to continue to manage for profitability despite poor market conditions. Third Quarter Highlights and Year-Over-Year Comparisons: -- Net income of $5.8 million or $0.03 per share, compared to $0.1 million or $0.00 per share; -- Operating margin of 24%, or $24.0 million, compared to 19% or $21.2 million; -- 69,000 new accounts opened at an average cost per account of $202, bringing total core brokerage accounts to 1,917,000, an increase of 24% over total accounts last year; -- Net revenues of $100.3 million, compared to $112.6 million; and -- Average trades per day of 74,000, compared to 109,000. "We are delivering on our commitment to produce profitability and positive cash flow, regardless of market conditions. We would expect this to continue, even if the markets remain challenging," 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. Following the Company's recent merger announcement with Datek Online Holdings Corp., Mr. Moglia added, "Both Ameritrade and Datek have formed client advisory groups, held focus groups and conducted extensive interviews with thousands of current and prospective clients. The end result will be a very powerful client-driven proposition that combines the best of Ameritrade and Datek and additional, innovative offerings." About the Datek Transaction Information about the proposed merger with Datek Online is available at www.amtd.com. INVESTORS ARE URGED TO READ THE JOINT PROXY See proxy server. (networking) proxy - A process that accepts requests for some service and passes them on to the real server. A proxy may run on dedicated hardware or may be purely software. STATEMENT/PROSPECTUS INCLUDED IN THE ARROW STOCK HOLDING CORPORATION REGISTRATION STATEMENT ON FORM S-4 (REGISTRATION NO. 333-88632) CONCERNING THE MERGER OF AMERITRADE HOLDING CORPORATION AND DATEK ONLINE HOLDINGS CORP. FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BECAUSE IT CONTAINS IMPORTANT INFORMATION. INVESTORS MAY OBTAIN THIS DOCUMENT FOR FREE FROM THE COMMISSION'S WEB SITE AT WWW.SEC.GOV OR FROM AMERITRADE BY CONTACTING ITS INVESTOR RELATIONS Investor relations The process by which the corporation communicates with its investors. DEPARTMENT AT 402-331-7856. About Ameritrade Ameritrade Holding Corporation (www.amtd.com) is a pioneer in the online brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. industry with a 27-year history of providing clients 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 award-winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" Company, through its Private Client and Institutional Client divisions, provides tiered tier 1 n. 1. One of a series of rows placed one above another: a stadium with four tiers of seats. 2. A rank or class. tr. & intr.v. levels of brokerage products and services tailored to meet the varying investing, trading and execution needs of individual investors, financial institutions and corporations. 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 release 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. that are made pursuant to the safe harbor provisions for forward-looking statements in the federal securities laws. In particular, all statements regarding our future activity rates, net revenues, total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. and earnings per share are forward-looking statements. These statements only reflect the Company's current expectations and are not guarantees of performance. These statements involve risks, uncertainties and assumptions that could cause actual results, performance or achievements to differ materially from those in the forward-looking statements. Important factors that could cause the Company's actual results to be materially different from its expectations include general economic and political conditions, volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the in the stock market, competition, systems failures and capacity constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. , regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. and legal uncertainties and other risks disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). in the Company's most recent 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. filed with the Securities and Exchange Commission. These forward-looking statements speak only as of the date on which the statements were made. The Company undertakes 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 Nine Months Ended
------------- -----------------
June 28, June 29, June 28, June 29,
2002 2001 2002 2001
--------- --------- --------- ---------
Revenues:
Commissions and
clearing fees $ 56,794 $ 64,902 $ 186,242 $ 223,360
Interest revenue 28,598 42,410 85,371 156,072
Other 17,451 12,660 51,824 22,791
--------- --------- --------- ---------
Total revenues 102,843 119,972 323,437 402,223
Client interest
expense 2,580 7,385 8,247 39,728
--------- --------- --------- ---------
Net revenues 100,263 112,587 315,190 362,495
--------- --------- --------- ---------
Operating expenses:
Employee compensation
and benefits 31,784 35,035 98,368 116,702
Communications 8,609 10,515 27,472 30,208
Occupancy and
equipment costs 13,175 14,727 41,474 46,815
Depreciation and
amortization 6,732 9,976 20,522 25,331
Professional services 8,112 12,289 24,614 45,716
Interest on
borrowings 1,087 2,028 3,978 9,565
Other 6,780 6,860 19,187 25,069
--------- --------- --------- ---------
Total operating expenses 76,279 91,430 235,615 299,406
--------- --------- --------- ---------
Operating margin 23,984 21,157 79,575 63,089
Advertising 13,922 18,688 50,844 126,520
Debt conversion expense 0 0 0 62,082
--------- --------- --------- ---------
Income (loss) before
income taxes 10,062 2,469 28,731 (125,513)
Income tax expense
(benefit) 4,288 2,399 12,006 (48,360)
--------- --------- --------- ---------
Net income (loss) $ 5,774 $ 70 $ 16,725 $ (77,153)
========= ========= ========= =========
Basic earnings (loss)
per share $ 0.03 $ 0.00 $ 0.08 $ (0.42)
Diluted earnings (loss)
per share $ 0.03 $ 0.00 $ 0.08 $ (0.42)
Weighted average shares
outstanding - basic 216,318 188,746 215,920 181,615
Weighted average shares
outstanding - diluted 216,747 189,599 216,664 181,615
AMERITRADE HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands
(Unaudited)
June 28, Sept. 28,
2002 2001
---------- ----------
Assets:
Cash and cash equivalents $ 40,711 $ 24,134
Segregated cash and investments 2,593,366 2,044,257
Client receivables 1,143,513 971,823
Other 1,104,413 613,657
---------- ----------
Total assets $4,882,003 $3,653,871
========== ==========
Liabilities and stockholders' equity
Liabilities:
Client payables $3,266,922 $2,777,916
Notes payable 47,645 70,145
Other 1,182,746 434,377
---------- ----------
Total liabilities 4,497,313 3,282,438
Stockholders' equity 384,690 371,433
---------- ----------
Total liabilities and stockholders' equity $4,882,003 $3,653,871
========== ==========
AMERITRADE HOLDING CORPORATION
SELECTED OPERATING DATA
Quarter ended
-------------------------------
June 28, Mar. 29, Dec. 31,
2002 2002 2001
--------- ---------- ----------
Trading days 64 60 64
Average client trades per day 73,506 89,129 86,028
Assets in client accounts (in billions) $27.5 $31.6 $31.6
Core brokerage open accounts(a) 1,917,000 1,877,000 1,829,000
(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 2,265,000 at 6/28/02.
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