eSpeed Reports Record Revenue, Volume and Transactions in the First Quarter 2001.Business Editors NEW YORK--(BUSINESS WIRE)--April 25, 2001 Improves Outlook for Second Quarter and Full Year 2001 Total Revenue Increased 78% Over Prior Year Fully Electronic Transactions Grew 210% Over Prior Year Fully Electronic Volume Improved 214% Over Prior Year eSpeed, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ESPD ESPD Enfants En Situation Particulièrement Difficile (French) ESPD Engine Shutdown Protective Device ), the leading developer of electronic marketplaces and related trading technology solutions, today reported record results for the first quarter ended March 31, 2001. eSpeed's revenue for the first quarter increased 78% to $43.1 million versus $24.3 million in the same period in 2000. Sequentially, the Company's revenue increased 21% versus fourth quarter 2000 revenue of $35.6 million. First quarter fully electronic transaction revenue grew by more than 124% year-over-year to $32.5 million. The Company reported a net operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $2.1 million or ($0.04) per share compared to a net operating loss of $4.9 million, or ($0.10) per share, for the first quarter ended March 31, 2000. The per share amount represents a 60% improvement year-over-year and exceeds consensus estimates. Commenting on today's announcement, Howard W. Lutnick, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of eSpeed, Inc. said, "While we consistently gained share in our traditional markets, we simultaneously proved to be a major player in new, non-financial marketplaces. Our leadership is evidenced by our ability to provide the best technology solutions and products to an increasingly diverse audience of market participants." Mr. Lutnick added, "This quarter's performance is representative of the momentum we've been gaining in past quarters, and leaves us very well positioned to take advantage of opportunities for revenue enhancements revenue enhancement An increase in revenues, especially by way of increased taxes. Revenue enhancement includes reducing taxpayer deductions and eliminating tax credits. in both existing and future products." The Company also announced record volume and transaction figures for the quarter. eSpeed's total electronic volume was $11.5 trillion, an increase of 64% over the prior year, with more than one million transactions executed in the first quarter. The substantial volume and transaction growth was attributable to a 214% increase in fully electronic volume and a 210% increase in fully electronic transactions year-over-year. Frederick T. Varacchi, eSpeed's President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. said, "Our efforts to enhance and improve core eSpeed(R) technology is leading the trend toward increased electronic trading  This article or section is in need of attention from an expert on the subject.Please help recruit one or [ improve this article] yourself. See the talk page for details. across a variety of products. More specifically, we've seen a tremendous increase in volume as more and more users are adopting the eSpeed(R) system as their trading tool of choice." Mr. Varacchi added, "We will continue to extend and leverage our technology and other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. by focusing on creating and pursuing strategic opportunities that will increase the depth and breadth of our product offerings and marketplace trading capabilities." eSpeed's cash and cash equivalents increased 33% to $161.9 million as of March 31, 2001. The Company successfully completed a secondary stock offering on March 8, 2001, with net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of approximately $47 million to eSpeed. For the remainder of 2001, subject to seasonality factors and excluding non-cash charges 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. , eSpeed expects net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (loss) to be in the range of ($0.02) to ($0.03) per share in the second quarter, $0.00 to $0.01 per share in the third quarter and $0.02 to $0.04 per share in the fourth quarter. For the full year 2001, the Company expects an annual net operating income (loss) per share in the range of ($0.01) to ($0.05), representing a $0.03 to $0.06 improvement over previous guidance. Recent Highlights Wagner Patent. On April 25, 2001, eSpeed announced it has purchased a patent that plays a crucial role in the trading of futures products. eSpeed has exclusive rights to the patent which deals with electronic futures trading in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. including but not limited to: energy futures, interest rate futures, single stock futures and equity index futures Index Futures A futures contract on a stock or financial index. For each index there may be a different multiple for determining the price of the futures contract. Notes: For example, the S&P 500 index is one of the most widely traded index futures contracts in the U.S. . eSpeed operates the Cantor Exchange - the first fully electronic futures exchange Futures Exchange Traditionally, a term referring to a central marketplace where futures contracts and options on futures contracts are traded. More recently, with the growth in electronic trading, it is also used to describe the activity of futures trading itself. in the United States. The Wagner patent will help eSpeed expand current markets running on its electronic platform, assist in the expansion into new verticals and serve to attract new partners. Freedom International. On April 3, 2001, eSpeed closed the deal to acquire a stake in Freedom International Brokerage, Inc. (Freedom), Canada's leading full-service inter-dealer broker Inter-dealer Broker 1. A brokerage firm operating in the bond or OTC derivatives market that acts as an intermediary between major dealers to facilitate inter-dealer trades. 2. . Under the terms of the agreement first announced on January 31, 2001, eSpeed and Cantor Fitzgerald Cantor Fitzgerald L.P. is a global financial services firm specializing in bond trading, as well as investment banking, asset management, market data and brokerage services. have entered into a joint venture that has acquired a stake in Freedom, with the balance being owned by the six largest investment dealers in Canada: BMO Nesbitt Burns This article or section is written like an .Please help [ rewrite this article] from a neutral point of view. Mark blatant advertising for , using . , CIBC World Markets CIBC World Markets is the investment banking division of the Canadian Imperial Bank of Commerce. It helps governments, large companies, and other large institutions obtain capital and credit and is a primary dealer in U.S. Treasury securities. , Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. Canada, RBC Dominion Securities
EasyScreen plc. eSpeed signed an agreement on March 14, 2001 with EasyScreen plc, which designs and markets innovative software for electronic trading, to expand EasyScreen's distribution across eSpeed's global private network and give eSpeed(R) users electronic access to a number of major derivatives exchanges, including London International Financial Futures and Options Exchange London International Financial Futures and Options Exchange (LIFFE) A leading market for trading options and futures on euro money market derivatives. (LIFFE LIFFE See: London International Financial Futures and Options Exchange LIFFE See London International Financial Futures and Options Exchange (LIFFE). ), Chicago Mercantile Exchange Chicago Mercantile Exchange (CME) Chicago Mercantile Exchange (CME) is the largest futures exchange in the United States and the second largest exchange in the world for the trading of futures and options on futures. (CME CME See: Chicago Mercantile Exchange CME See Chicago Mercantile Exchange (CME). ), Australian Derivatives Exchange (ADX ADX Average Directional Movement Index ADX Automatic Data Exchange Adx Adrenodoxin ADX Adrenalectomized ADX Accumulation/Distribution Index ADX Air Defense Exercise ADX Administrative Maximum Facility ADX Address Cross Reference ), Sydney Futures Exchange Sydney Futures Exchange (SFE) The derivatives market of Australia. (SFE See Sydney Futures Exchange. ), Singapore Exchange “SGX” redirects here. For other uses, see SGX (disambiguation). Singapore Exchange Limited SGX: S68 (SGX) is the stock exchange in Singapore. SGX was formed on December 1 1999, following the merger of two established and well-respected financial (SGX SGX Singapore Exchange SGX Supergreenx (trance/electronic musician) ), Le Marche des Options Negociables de Paris See MONEP. (MONEP MONEP (Marche des Options Negociables de Paris) A subsidiary of the Paris Bourse that trades stock and index options. ), European Exchange (EUREX), and Marche A Terme d'Instruments Financiers (MATIF MATIF Marche A Terme International de France (Paris Futures Exchange) ), from the eSpeed(R) platform. TradeSpark. The Company announced that TradeSpark, its first non-financial commodity marketplace, had transacted $30 billion worth of energy products (notional value Notional Value The total value of a leveraged position's assets. This term is commonly used in the options, futures and currency markets because in them a very little amount of invested money can control a large position (have a large consequence for the trader). ) since its October 2000 launch. With $12 billion traded in energy products during fourth quarter 2000 and $18 billion traded during first quarter 2001, TradeSpark saw a 56% increase in notional trading volume Trading volume The number of shares transacted every day. As there is a seller for every buyer, one can think of the trading volume as half of the number of shares transacted. That is, if A sells 100 shares to B, the volume is 100 shares. for the first quarter 2001. Earlier this month, TradeSpark opened an office in Houston, Texas “Houston” redirects here. For other uses, see Houston (disambiguation). Houston (pronounced /'hjuːstən/) is the largest city in the state of Texas and the and announced a record daily trading high of 222.8 million MMBTU's in natural gas. Federal Home Loan Bank. On February 1, 2001, eSpeed announced a licensing agreement with the Federal Home Loan Bank's Office of Finance (FHLB FHLB Federal Home Loan Bank ), a U.S. Government sponsored enterprise and one of the largest issuers in the global short-term securities market. eSpeed's electronic auction-based technology will provide FHLB discount note dealers with immediate, secure access to FHLB's discount note window offerings. The FHLB is expecting to begin use of eSpeed(R) technology to issue discount notes at the new e-Window in the second quarter of 2001 through both eSpeed's private network and Internet-based service. European Government Bonds. The Company announced on January 24, 2001 that it had created a marketplace for European Government Bond odd lots for traders in Europe. The platform provides live, real-time prices and instantaneous anonymous execution of orders in excess of 50,000 euros. Traders at the over 500 wholesale institutions that already use eSpeed automatically have access to the marketplace through their existing screens. Initial odd lot instruments available on the system include German, Italian and French government bonds of virtually all maturities. Japanese Government Bonds. In February 2001, Cantor Fitzgerald announced that its Japanese subsidiary, Cantor Fitzgerald Shoken Kaisha Limited, had secured a Proprietary Trading Proprietary Trading When a firm trades for direct gain instead of commission dollars. Essentially, the firm has decided to profit from the market rather than commissions from processing trades. Systems License which will allow customers of Cantor Fitzgerald Shoken Kaisha Limited to have fully electronic access to the Japanese Government Bond Market through the eSpeed(R) system. About eSpeed, Inc. eSpeed, Inc. operates multiple buyer/multiple seller real-time electronic marketplaces. eSpeed's suite of marketplace tools provides end-to-end transaction solutions for the purchase and sale of financial and non-financial products via the Internet or over eSpeed's global private network. eSpeed currently provides the marketplace infrastructure for 45 financial and non-financial instruments, including most of the world's fixed income marketplaces. eSpeed transacts over $200 billion of financial instruments daily and is headquartered in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. . Additional information on eSpeed is available via the Internet at http://www.espeed.com. Statements contained in this Press Release, which are not historical facts, are forward-looking statements, as the term is defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to: the limited operating history of eSpeed, Inc., its expected incurrence of future losses and negative 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 for the first half of 2001, its ability to enter into marketing and strategic alliances, to effectively manage its growth, to expand the use of its electronic systems, and to induce customers to use its marketplaces and services and other factors that are discussed in eSpeed's 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. filed with the Securities and Exchange Commission.
eSpeed, Inc. and Subsidiaries
CONSOLIDATED STATEMENT OF OPERATIONS
For the three months ended March 31, 2001 and March 31, 2000
(unaudited)
For the three months ended
------------------------------------
March 31, 2001 March 31, 2000
Revenues:
Transaction revenues
Fully electronic $ 32,502,656 $ 14,502,288
Voice assisted 5,363,462 3,861,240
Open outcry 100,658 882,868
--------------- ---------------
Total transaction revenues 37,966,776 19,246,396
Interest income 1,741,149 1,842,774
System service fees
from affiliates and
licensing fees 3,408,271 3,161,057
--------------- ---------------
Total revenues 43,116,196 24,250,227
--------------- ---------------
Expenses:
Compensation and employee benefits 15,625,096 11,337,786
Occupancy and equipment 6,973,004 4,699,749
Professional and consulting fees 3,700,409 2,459,088
Communications and client networks 1,900,273 839,694
Fulfillment service fees 11,228,622 5,075,801
Administrative fees 1,950,637 1,604,151
Marketing 1,496,951 1,129,073
Other 2,210,166 1,938,301
--------------- ---------------
Total operating expenses 45,085,158 29,083,643
--------------- ---------------
Loss from operations
before income taxes (1,968,962) (4,833,416)
--------------- ---------------
Income tax provision/(benefit):
Federal - -
State and local 99,999 92,500
--------------- ---------------
Total tax provision/(benefit) 99,999 92,500
--------------- ---------------
Net loss $ (2,068,961) $ (4,925,916)
=============== ===============
Per share data:
Basic and diluted net
loss per share $ (0.04) $ (0.10)
=============== ===============
Weighted average shares of
common stock outstanding 52,414,049 51,000,000
=============== ===============
eSpeed, Inc. and Subsidiaries
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
March 31, 2001 and December 31, 2000
March 31, 2001 December 31, 2000
-------------- -----------------
(unaudited)
Assets
Cash and cash equivalents $ 161,886,109 $ 122,163,712
Fixed assets, net 26,748,308 23,441,365
Investments 5,776,322 5,833,679
Other assets 3,898,375 3,683,507
-------------- -----------------
Total assets $ 198,309,114 $ 155,122,263
============== =================
Liabilities and Stockholders' Equity
Liabilities
Payable to affiliates, net $ 7,367,647 $ 11,370,248
Accounts payable and
accrued liabilities 12,907,051 11,494,262
-------------- -----------------
Total liabilities 20,274,698 22,864,510
-------------- -----------------
Stockholders' equity:
Preferred stock, par value
$0.01 per share; 50,000,000
shares authorized, 8,000,000
shares issued and outstanding 80,000 80,000
Class A common stock, par value
$0.01 per share; 200,000,000
shares authorized; 23,946,063
and 16,342,202 shares issued
and outstanding 239,461 163,422
Class B common stock, par value
$0.01 per share; 100,000,000
shares authorized; 30,468,163
and 35,520,480 shares issued
and outstanding 304,682 355,205
Additional paid in capital 253,728,132 205,908,024
Subscription receivable (1,250,000) (1,250,000)
Accumulated deficit (75,067,859) (72,998,898)
-------------- -----------------
Total stockholders' equity 178,034,416 132,257,753
-------------- -----------------
Total liabilities and
stockholders' equity $ 198,309,114 $ 155,122,263
============== =================
eSpeed, Inc.
Quarterly Market Activity Report
1st Quarter 2001 - Unaudited
1st Quarter 2001 1st Quarter 2000 % Change
---------------------------------------------------
March 31, 2001 March 31, 2000 1Q01 vs 1Q00
---------------------------------------------------
Volume (in billions)
--------------------
Fully Electronic Volume 6,392 2,036 214.0%
Voice Electronic Volume 5,085 4,951 2.7%
---------------------------------------------------
Total Electronic Volume 11,477 6,987 64.3%
===================================================
Electronic Transaction Count
----------------------------
Fully Electronic
Transactions 810,431 261,185 210.3%
Voice Electronic
Transactions 276,353 455,930 (39.4%)
---------------------------------------------------
Total Transactions 1,086,784 717,115 51.5%
===================================================
Revenue (in thousands)
----------------------
Fully Electronic 32,503 14,502 124.1%
Voice Electronic 5,363 3,861 38.9%
Open Outcry 101 883 (88.6%)
---------------------------------------------------
Total Transaction
Revenue 37,967 19,246 97.3%
Interest Income 1,741 1,843 (5.5%)
System Service Fees
from affiliates &
Licensing Fees 3,408 3,161 7.8%
---------------------------------------------------
Total Revenue $ 43,116 $ 24,250 77.8%
---------------------------------------------------
Global Interest Rate
Futures Volume (1)
CBOT - US Treasury
Contracts 37,844,115 40,777,617 (7.2%)
CME - Euro $
Contracts 45,902,074 28,309,436 62.1%
EUREX - Bond
Contracts 48,367,269 42,783,805 13.1%
Fed Quarterly UST
Volume for Quarter
End (in billions) (2) 18,750 13,817 35.7%
NYSE - Volume
(shares traded)
- in millions (3) 77,445 68,584 12.9%
- Transaction
Value - in millions 2,935,598 3,009,071 (2.4%)
NASDAQ - Volume
(shares traded)
- in millions (4) 130,653 114,857 13.8%
- Transaction
Value - in millions 3,795,835 6,106,772 (37.8%)
Sources:
(1) Futures Industry Association - Monthly Volume Report
(2) www.ny.frb.org/pihome/statistics/dealer - Federal Reserve Bank
(3) NYSE - www.nyse.com
(4) NASDAQ - www.nasd.com
----------------------------------------------------------------------
Fiscal Year 2001 Jan '01 Feb '01 Mar '01
Volume Data (in billions)
Fully Electronic 2,322 1,877 2,194
Voice 1,814 1,635 1,636
Transaction Count
Fully Electronic 289,759 237,463 283,210
Voice 103,675 87,311 85,368
----------------------------------------------------------------------
----------------------------------------------------------------------
Fiscal Year 2000 Jan'00 Feb'00 Mar'00
Volume Data (in billions)
Fully Electronic 503 621 911
Voice 1,683 1,607 1,663
Transaction Count
Fully Electronic 69,333 79,749 112,104
Voice 147,554 155,627 152,749
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