Filed by Wit Soundview Group, Inc.
Pursuant to Rule 425 under the Securities
Act of 1933
Subject Company: Wit Soundview Group, Inc.
Commission File No. 000-26225
WIT SOUNDVIEW LOGO]
FOR IMMEDIATE RELEASE
WIT SOUNDVIEW REPORTS STRONG SECOND QUARTER
CASH EARNINGS PER SHARE OF $0.12
JULY 18, 2000, NEW YORK, NY -- Wit SoundView Group, Inc. (Nasdaq: WITC)
today reported revenues of $96.1 million for the quarter ended June 30,
2000, up from $11.3 million for the same period of 1999. Cash earnings for
the quarter were $0.12 per diluted share. Net income for the quarter was
$2.3 million, or $0.02 per diluted share. Net income would have been $0.04
per diluted share except for a $0.02 per diluted share non-cash charge
arising from the acceleration of options related to the resignation of our
former co-CEO.
"We are very pleased with our performance in the second quarter," said
Robert Lessin, Chairman and CEO. "Given the poor market environment for
IPOs last quarter, we believe that our performance demonstrated the success
of our efforts to enhance and diversify our revenue base to provide
value-added services to our clients in all types of markets conditions."
SUMMARY FINANCIAL HIGHLIGHTS
Three Months Ended
6/30/2000 6/30/1999
--------- ---------
Revenues
Investment banking $54,157,901 $ 8,246,614
Brokerage 38,902,164 1,567,584
Asset management fees (185,171) -
Interest and investment income 2,828,299 1,176,599
Unrealized gains on investments 585,437 289,507
Other income (155,140) -
------------ ------------
Total revenues 96,133,490 11,280,304
Total expenses 82,686,617 14,078,171
------------ ------------
Net income (loss) before provision
for income and equity in net loss
of affiliates 13,446,873 (2,797,867)
Provision for income taxes 6,683,389 -
------------ ------------
Net income (loss) before equity in
net loss of affiliates 6,763,784 (2,797,867)
Equity in net loss of affiliates (4,481,070) -
------------ ------------
Net income (loss) $ 2,282,414 $(2,797,867)
============ ============
Net income (loss) per share:
Basic $ 0.03 $ (0.11)
Diluted $ 0.02 $ (0.11)
Weighted average shares used in the
computation of net income (loss)
per share:
Basic 79,410,828 24,486,238
Diluted 98,800,933 24,486,238
QUARTERLY HIGHLIGHTS
o Revenue growth rates continue to outpace competitors.
o Investment banking revenues for the quarter were $54.2 million, up from
$8.2 million a year ago.
o Total expenses for the quarter were $82.7 million, down slightly from
$86.8 million in the previous quarter. Compensation and benefits
accounted for $55.7 million, or 58%, of total revenues.
MERGER WITH E*OFFERING AND STRATEGIC ALLIANCE WITH E*TRADE
The major event of the quarter was the announcement of our agreement to
merge with E*OFFERING and enter into a strategic alliance with E*TRADE. We
expect to close the transactions in the early fall. We expect to file our
S-4 registration statement relating to the merger later this week.
INVESTMENT BANKING
Mark Loehr, co-president of Wit SoundView, commented, "Despite the poor
market environment for new issues, Wit SoundView underwrote 27 deals,
participating as a manager in 16 and serving as a syndicate member in an
additional 11. We continue to focus our attention on high quality
companies, while at the same time assisting our clients in finding
alternative sources of capital during this period. We saw an increased
contribution from follow-on offerings, M&A advisory work, and private
placements."
BROKERAGE
Institutional brokerage was $36.3 million for the quarter. "Even though
technology stocks performed poorly in the quarter, Wit SoundView continued
to gain significant market share as clients turned to us for our expertise
in the sector," said Russ Crabs, co-president of Wit SoundView.
INTERNATIONAL DEVELOPMENTS
In May, Wit Capital Japan launched its online brokerage service, offering
Japanese stock brokerage services to account holders. The firm also began
providing research reports online and currently features sector and company
reports on Japanese internet and technology companies. The firm grew from
50 employees in the first quarter to over 100 in the second quarter.
Wit Capital Europe continued to build out its management team and made a
series of key investment banking, research and technology hires during the
quarter. Total employees number over 50, which is expected to double by the
end of the year. Wit Capital Europe's brokerage system is currently being
tested and, subject to all necessary regulatory approvals, is scheduled to
launch in the fall.
ABOUT WIT SOUNDVIEW GROUP, INC.
Wit SoundView Group, Inc. (NASDAQ: WITC) is the largest online investment
banking group focused exclusively on the Internet and technology sectors.
Wit SoundView offers a strong complement of investment banking services,
from Internet-strategic advisory, venture capital and private equity
placements, to public offerings and M&A advisory. With one of the largest
research teams in the sector, Wit SoundView produces comprehensive
sell-side research on over 285 Internet and technology companies, developed
for our online and institutional audiences. For more information, please
see www.witsoundview.com.
-------------------------
Members NASD/SIPC.
IMPORTANT INFORMATION
Please read the registration statement and proxy statement Wit SoundView
will be filing with the SEC relating to the proposed merger of E*OFFERING
into one of its subsidiaries. These documents will contain information that
is important. You will be able to obtain these documents for free on the
Internet web site maintained by the SEC at HTTP://WWW.SEC.GOV. This press
release, the final prospectus and certain other documents will also be
available for free on our Internet web site at
HTTP.//WWW.WITCAPITAL.COM/MERGER/FILINGS/S4EOFFERING.HTML. Wit SoundView
and its directors, executive officers, employees and certain other persons
may be deemed to be participants in the solicitation of proxies of Wit
SoundView's shareholders to approve the proposed acquisition of E*OFFERING.
Such individuals may have interests in the acquisition, including as a
result of holding shares or options of Wit SoundView. A detailed list of
the names, affiliations and interests of the participants in the
solicitation will be set forth on a Schedule 14A to be filed with the SEC
by Wit SoundView, and will be available on the SEC's web site as referenced
above.
Certain statements in this news release constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995. These forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause our actual results,
performance or achievements, or those of the industry in which we operate,
to be materially different from any expected future results, performance or
achievements expressed or implied in these forward-looking statements.
Factors that could cause or contribute to such differences include, but are
not limited to, those economic factors that affect the market for capital
raising, including initial public offerings and those factors discussed in
the Registration Statement of our initial public offering of common stock,
the Proxy and Registration Statements relating to the merger with SoundView
and E*OFFERING and periodic reports filed from time to time with the
Securities & Exchange Commission.
CONTACTS:
Citigate Dewe Rogerson Wit SoundView Group, Inc.
Robin Weinberg Jennifer DiClerico
800-966-0676 212-253-4481
(tables follow)
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<CAPTION>
WIT SOUNDVIEW GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Six Months Ended Three Months Ended
----------------- ------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
REVENUES:
Investment banking $ 114,506,995 $ 11,369,034 $ 54,157,901 $ 8,246,614
Brokerage 75,427,117 2,001,791 38,902,164 1,567,584
Asset management fees 7,647,863 -- (185,171) --
Interest and investment income 4,647,512 1,368,269 2,828,299 1,176,599
Unrealized gains on investments 647,317 444,331 585,437 289,507
Other Income (155,140) -- (155,140) --
------------- ------------- ------------- -------------
Total revenues 202,721,664 15,183,425 96,133,490 11,280,304
------------- ------------- ------------- -------------
EXPENSES:
Compensation and benefits 120,647,125 15,146,585 55,704,769 8,588,459
Brokerage and clearance 12,758,456 1,564,225 6,561,750 1,303,597
Marketing and business development 7,621,634 1,057,086 4,574,604 844,747
Amortization of intangible assets
and goodwill 6,873,500 -- 4,124,100 --
Professional services 4,478,359 1,766,811 2,201,238 1,085,302
Data processing and communications 4,341,020 1,183,654 2,568,757 884,043
Write-off of computer software
and equipment 1,339,772 -- -- --
Depreciation and amortization 2,777,536 499,053 1,501,702 278,558
Technology development 2,590,201 861,883 1,547,400 526,088
Occupancy 1,869,570 303,503 1,077,455 213,496
Other 4,159,134 498,658 2,824,842 353,881
------------- ------------- ------------- -------------
Total expenses 169,456,307 22,881,458 82,686,617 14,078,171
------------- ------------- ------------- -------------
Net income(loss) before
income taxes 33,265,357 (7,698,033) 13,446,873 (2,797,867)
Provision for income taxes 17,291,555 -- 6,683,389 --
------------- ------------- ------------- -------------
Net income (loss) before
equity in net loss of
affiliates 15,973,802 (7,698,033) 6,763,484 (2,797,867)
Equity in net loss of affiliates (6,190,759) -- (4,481,070) --
------------- ------------- ------------- -------------
Net income (loss) $ 9,783,043 $ (7,698,033) $ 2,282,414 $ (2,797,867)
============= ============= ============= =============
Net income (loss) per share:
Basic $ 0.13 $ (0.48) $ 0.03 $ (0.11)
Diluted $ 0.10 $ (0.48) $ 0.02 $ (0.11)
Weighted average shares used in the
computation of net income (loss)
per share:
Basic 76,204,016 15,923,484 79,410,828 24,486,238
Diluted 98,443,344 15,923,484 98,800,933 24,486,238
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<CAPTION>
WIT SOUNDVIEW GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
June 30, December 31,
2000 1999
------------- -------------
(Unaudited)
ASSETS
<S> <C> <C>
CASH AND CASH EQUIVALENTS $ 101,683,112 $ 12,447,885
RECEIVABLE FROM CLEARING BROKERS 64,716,088 681,807
SECURITIES OWNED, at market or fair value 40,631,449 114,468,173
INVESTMENT BANKING FEES RECEIVABLE 24,013,602 3,570,176
INVESTMENTS 62,350,382 --
INVESTMENTS IN AFFILIATES 21,280,463 17,511,403
INTANGIBLE ASSETS, net of accumulated
amortization 268,983,970 --
FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS,
net of accumulated depreciation and amortization 14,225,481 6,312,242
COMPUTER SOFTWARE, net of accumulated amortization 3,742,266 3,706,112
PREPAID EXPENSES 2,542,941 1,610,628
OTHER ASSETS 37,130,523 3,309,750
------------- -------------
Total assets $ 641,300,277 $ 163,618,176
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Securities sold but not yet purchased,
at market value $ 1,066,814 $ 39,234
Accounts payable and accrued expenses 10,093,831 5,130,675
Accrued compensation 103,194,374 13,506,087
Deferred tax liabilities 31,304,300 --
Other liabilities 4,246,914 540,647
------------- -------------
Total liabilities 149,906,233 19,216,643
------------- -------------
STOCKHOLDERS' EQUITY:
Preferred Stock, $.001 par value, 30,000,000
shares authorized, no shares outstanding at
June 30, 2000 and December 31, 1999 -- --
Common Stock, $.01 par value, 500,000,000
shares authorized, 78,797,470 and 61,629,828
shares issued and outstanding at June 30,
2000 and December 31, 1999, respectively 787,974 616,298
Common Stock, Class B, $.01 par value,
75,000,000 shares authorized, 11,666,666
shares issued and outstanding 116,667 116,667
Common Stock, Class C, $.01 par value,
159,000,000 shares authorized; no shares
issued and outstanding at June 30, 2000
and December 31, 1999 -- --
Additional paid-in capital 558,034,349 196,777,759
Notes receivable from stockholders (22,886,640) (15,333,070)
Deferred compensation (19,976,993) (3,311,765)
Accumulated deficit (24,681,313) (34,464,356)
------------- -------------
Total stockholders' equity 491,394,044 144,401,533
------------- -------------
Total liabilities and stockholders' equity $ 641,300,277 $ 163,618,176
============= =============
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