<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
--------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
----------
Commission file number 1-14947
JEFFERIES GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-4719745
- ------------------------------------ ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11100 Santa Monica Blvd., Los Angeles, California 990025
- ------------------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 445-1199
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
As of March 31, 2000, the registrant had 24,426,283 common shares, $.0001 par
value, outstanding.
Page 1 of 15
<PAGE> 2
JEFFERIES GROUP, INC. AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT ON FORM 10-Q
MARCH 31, 2000
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Financial Condition -
March 31, 2000 (unaudited) and December 31, 1999............................. 3
Consolidated Statements of Earnings (unaudited) -
Three Months Ended March 31, 2000 and March 26, 1999......................... 4
Consolidated Statement of Changes in Stockholders' Equity (unaudited) -
Three Months Ended March 31, 2000............................................ 5
Consolidated Statements of Cash Flows (unaudited) -
Three Months Ended March 31, 2000 and March 26, 1999......................... 6
Notes to Consolidated Financial Statements (unaudited)......................... 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................................... 13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.............................................................. 14
Item 6. Exhibits and Reports on Form 8-K............................................... 14
</TABLE>
Page 2 of 15
<PAGE> 3
JEFFERIES GROUP, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
------------ -----------
ASSETS (unaudited)
<S> <C> <C>
Cash and cash equivalents ........................................ $ 51,479 $ 77,197
Cash and securities segregated and on deposit for
regulatory purposes or deposited with clearing and
depository organizations ........................................ 24,509 18,317
Receivable from brokers and dealers .............................. 3,415,350 1,965,469
Receivable from customers, officers and directors ................ 298,935 226,449
Securities owned ................................................. 285,429 376,506
Investments ...................................................... 137,964 119,100
Premises and equipment ........................................... 38,970 39,117
Other assets ..................................................... 65,489 74,097
----------- -----------
$ 4,318,125 $ 2,896,252
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Bank loans ....................................................... $ 16,000 $ --
Payable to brokers and dealers ................................... 2,935,963 1,663,955
Payable to customers ............................................. 464,955 271,811
Securities sold, not yet purchased ............................... 116,762 186,420
Accrued expenses and other liabilities ........................... 215,995 228,004
----------- -----------
3,749,675 2,350,190
Long-term debt ................................................... 149,509 149,485
----------- -----------
3,899,184 2,499,675
----------- -----------
Stockholders' equity:
Preferred stock, $.0001 par value. Authorized
10,000,000 shares; none issued ............................... -- --
Common stock, $.0001 par value. Authorized
100,000,000 shares; issued 24,455,882 shares in 2000
and 24,027,899 shares in 1999 ................................ 3 2
Additional paid-in capital ..................................... 71,116 62,367
Retained earnings .............................................. 348,556 334,742
Less:
Treasury stock, at cost, 29,599 shares in 2000 and
28,012 shares in 1999 ...................................... (621) (587)
Accumulated other comprehensive income (loss):
Currency translation adjustments ........................... 70 236
Additional minimum pension liability ....................... (183) (183)
----------- -----------
Total accumulated other comprehensive income (loss) .......... (113) 53
----------- -----------
Total stockholders' equity ............................... 418,941 396,577
----------- -----------
$ 4,318,125 $ 2,896,252
=========== ===========
</TABLE>
See accompanying unaudited notes to consolidated financial statements.
Page 3 of 15
<PAGE> 4
JEFFERIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended
-----------------------
March 31, March 26,
2000 1999
--------- --------
<S> <C> <C>
Revenues:
Commissions ..................... $ 58,580 $ 49,685
Principal transactions .......... 79,383 56,274
Corporate finance ............... 15,217 14,308
Interest ........................ 37,689 27,199
Other ........................... 3,891 1,212
-------- --------
Total revenues .................... 194,760 148,678
Interest expense .................. 31,099 22,574
-------- --------
Revenues, net of interest expense . 163,661 126,104
-------- --------
Non-interest expenses:
Compensation and benefits ....... 100,687 75,621
Floor brokerage and clearing fees 9,456 7,864
Communications .................. 12,112 10,197
Occupancy and equipment rental .. 4,560 3,340
Travel and promotional .......... 4,802 3,458
Other ........................... 5,843 5,254
-------- --------
Total non-interest expenses ....... 137,460 105,734
-------- --------
Earnings before income taxes ...... 26,201 20,370
Income taxes ...................... 11,177 8,704
-------- --------
Earnings from continuing operations 15,024 11,666
Earnings from discontinued
operations, net of income taxes . -- 4,955
-------- --------
Net earnings ...................... $ 15,024 $ 16,621
======== ========
Earnings per share:
Basic:
Continuing operations ......... $ 0.63 $ 0.50
Discontinued operations ....... -- 0.22
-------- --------
Net earnings .................. $ 0.63 $ 0.72
======== ========
Diluted:
Continuing operations ......... $ 0.62 $ 0.50
Discontinued operations ....... -- 0.19
-------- --------
Net earnings .................. $ 0.62 $ 0.69
======== ========
Weighted average shares:
Basic ........................... 23,998 23,217
Diluted ......................... 24,232 23,514
</TABLE>
See accompanying unaudited notes to consolidated financial statements.
Page 4 of 15
<PAGE> 5
JEFFERIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2000
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Accumulated Total
Additional Other Stock-
Common Paid-in Retained Treasury Comprehensive holders'
Stock Capital Earnings Stock Income (Loss) Equity
---------- ---------- --------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance,
December 31, 1999 .................... $ 2 $ 62,367 $ 334,742 $ (587) $ 53 $ 396,577
Exercise of stock options,
including tax benefits
(55,915 shares) ....................... -- 1,154 -- -- -- 1,154
Purchase of treasury stock
(1,587 shares) ........................ -- -- -- (34) -- (34)
Issuance of common stock
(182,461 shares) ...................... 1 3,401 -- -- -- 3,402
Issuance of restricted stock
(189,607 shares), net of
forfeitures, and additional
vesting of restricted stock
shares, including tax benefits......... -- 3,982 -- -- -- 3,982
Employee stock ownership plan
amortization and stock purchases, net... -- 212 -- -- -- 212
Quarterly dividends
($.05 per share per quarter) .......... -- -- (1,210) -- -- (1,210)
Comprehensive income:
Net earnings ......................... -- -- 15,024 -- -- 15,024
Other comprehensive
income (loss), net of tax:
Translation adjustment ............... -- -- -- -- (166) (166)
---------
Comprehensive income ................... -- -- -- -- -- 14,858
--------- --------- --------- --------- --------- ---------
Balance,
March 31, 2000 ........................ $ 3 $ 71,116 $ 348,556 $ (621) $ (113) $ 418,941
========= ========= ========= ========= ========= =========
</TABLE>
See accompanying unaudited notes to consolidated financial statements
Page 5 of 15
<PAGE> 6
JEFFERIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended
----------------------------
March 31, March 26,
2000 1999
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings ................................................ $ 15,024 $ 16,621
----------- -----------
Adjustments to reconcile net earnings to net cash
used in operations:
Depreciation and amortization ............................. 2,931 2,353
Increase in cash and securities segregated and on deposit
for regulatory purposes ................................. (6,192) (2,345)
Increase in receivables:
Brokers and dealers ..................................... (1,449,881) (735,595)
Customers, officers and directors ....................... (72,486) (52,769)
(Increase) decrease in securities owned ................... 91,077 (45,175)
Increase in investments ................................... (18,864) (1,380)
Increase in investment in discontinued operations ......... -- (8,967)
(Increase) decrease in other assets ....................... 8,608 (13,202)
Increase in operating payables:
Brokers and dealers ..................................... 1,272,008 890,863
Customers ............................................... 193,144 13,175
Increase (decrease) in securities sold, not yet purchased.. (69,658) 40,641
Decrease in accrued expenses and other liabilities ........ (12,009) (119,156)
----------- -----------
Total adjustments .................................. (61,322) (31,557)
----------- -----------
Net cash used in operating activities .............. (46,298) (14,936)
----------- -----------
</TABLE>
Continued on next page.
See accompanying unaudited notes to consolidated financial statements.
Page 6 of 15
<PAGE> 7
JEFFERIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended
----------------------
March 31, March 26,
2000 1999
---------- ---------
<S> <C> <C>
Cash flows from financing activities:
Net proceeds from (payments on):
Bank loans ............................................................ 16,000 (21,000)
Repurchase of treasury stock .......................................... (34) (16,957)
Dividends paid ........................................................ (1,210) (1,146)
Exercise of stock options ............................................. 1,154 20,337
Issuance of common stock shares ....................................... 3,402 --
Issuance of restricted stock .......................................... 3,982 5,320
Employee Stock Ownership Plan stock purchases.......................... (349) --
Capital Accumulation Plan distributions ............................... -- 55,072
Change in proportionate share of subsidiary's equity .................. -- 512
-------- --------
Net cash provided by financing activities ........................... 22,945 42,138
-------- --------
Cash flows from investing activities -
purchase of premises and equipment ......................................... (2,199) (1,649)
-------- --------
Effect of foreign currency translation on cash ............................... (166) (453)
-------- --------
Net increase (decrease) in cash and cash equivalents................. (25,718) 25,100
Cash and cash equivalents - beginning of period .............................. 77,197 55,581
-------- --------
Cash and cash equivalents - end of period .................................... $ 51,479 $ 80,681
======== ========
Supplemental disclosures of cash flow information:
Cash paid (received) during the period for:
Interest ................................................................. $ 28,567 $ 21,327
======== ========
Income taxes ............................................................. $(19,553) $ 8,043
======== ========
</TABLE>
See accompanying unaudited notes to consolidated financial statements.
Page 7 of 15
<PAGE> 8
JEFFERIES GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements include the accounts of
Jefferies Group, Inc. ("Group") and all its subsidiaries ("Company"), including
Jefferies & Company, Inc. ("JEFCO"). The accounts of Investment Technology
Group, Inc. and all its subsidiaries (collectively "ITGI"), including its wholly
owned subsidiary, ITG Inc. are included in the financial statements as
discontinued operations. The accounts of W & D Securities, Inc. ("W & D") are
consolidated because of the nature and extent of Group's ownership interest in W
& D. The Company is primarily engaged in a single line of business, as a
securities broker-dealer, which includes several types of services, such as
principal and agency transactions in equity, convertible debt and high yield
securities, as well as corporate finance activities.
All significant intercompany accounts and transactions are eliminated in
consolidation. The consolidated financial statements reflect all adjustments,
which are, in the opinion of management, necessary for the fair statement of the
results for the interim periods and should be read in conjunction with the
Company's annual report for the year ended December 31, 1999.
SECURITIES TRANSACTIONS
All transactions in securities, commission revenues and related expenses
are recorded on a trade-date basis.
Securities owned and securities sold, not yet purchased, are valued at
market, and unrealized gains or losses are reflected in revenues from principal
transactions.
RECLASSIFICATIONS
Certain reclassifications have been made to the prior period's amounts to
conform to the current period's presentation.
RECEIVABLE FROM, AND PAYABLE TO, BROKERS AND DEALERS
Receivable from and payable to brokers and dealers consists of the
following as of March 31, 2000 (in thousands of dollars):
<TABLE>
<S> <C>
Receivable from brokers and dealers:
Securities borrowed.............................. $ 3,119,995
Securities purchased under agreements to resell.. 3,030
Other............................................ 292,325
------------
$ 3,415,350
============
Payable to brokers and dealers:
Securities loaned................................ $ 2,879,586
Securities sold under agreements to repurchase... 18,030
Other............................................ 38,347
------------
$ 2,935,963
============
</TABLE>
Page 8 of 15
<PAGE> 9
SECURITIES OWNED AND SECURITIES SOLD, NOT YET PURCHASED
The following is a summary of the market value of major categories of
securities owned and securities sold, not yet purchased, as of March 31, 2000
(in thousands of dollars):
<TABLE>
<CAPTION>
Securities
Sold,
Securities Not Yet
Owned Purchased
-------- ---------
<S> <C> <C>
Corporate equity securities .......... $110,414 $112,899
High-yield securities ................ 48,978 1,178
Corporate debt securities ............ 91,503 2,656
U.S. Government and agency obligations 33,005 --
Options .............................. 1,529 29
-------- --------
$285,429 $116,762
======== ========
</TABLE>
INVESTMENTS
Investments consist of the following as of March 31, 2000 (in thousands of
dollars):
<TABLE>
<S> <C>
Debt and equity investments.......................... $ 45,083
Partnership interests................................ 63,015
Equity and debt interests in affiliates.............. 29,866
--------
$137,964
========
</TABLE>
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash in banks and short term investments.
Cash equivalents are part of the cash management activities of the Company and
generally mature within 90 days. The following is a summary of cash and cash
equivalents as of March 31, 2000 (in thousands of dollars):
<TABLE>
<S> <C>
Cash in banks........................................ $ 35,954
Short term investments............................... 15,525
---------
$ 51,479
=========
</TABLE>
Page 9 of 15
<PAGE> 10
EARNINGS PER SHARE
The following is a reconciliation of the numerators and denominators of the
basic and diluted earnings per share computations for the three month periods
ended March 31, 2000 and March 26, 1999 (in thousands, except per share
amounts):
<TABLE>
<CAPTION>
Three Months Ended
-------------------------
March 31, March 26,
2000 1999
-------- ---------
<S> <C> <C>
Earnings from continuing operations ...... $ 15,024 $ 11,666
Earnings from discontinued operations .... -- 4,955
-------- --------
Net earnings for basic earnings per share 15,024 16,621
Adjustment - stock options on subsidiary . -- (385)
-------- --------
Adjusted earnings - diluted calculation .. $ 15,024 $ 16,236
======== ========
Shares for basic and diluted calculations:
Average number of common shares .......... 23,998 23,200
Capital Accumulation Plan unissued shares -- 17
-------- --------
Average shares used in basic computation . 23,998 23,217
Stock options ............................ 168 261
Other unissued common stock equivalents .. 66 36
-------- --------
Average shares used in diluted computation 24,232 23,514
======== ========
Earnings per share:
Basic:
Earnings from continuing operations ...... $ 0.63 $ 0.50
Earnings from discontinued operations .... -- 0.22
-------- --------
Net earnings ............................. $ 0.63 $ 0.72
======== ========
Diluted:
Earnings from continuing operations ...... $ 0.62 $ 0.50
Earnings from discontinued operations .... -- 0.19
-------- --------
Net earnings ............................. $ 0.62 $ 0.69
======== ========
</TABLE>
OTHER COMPREHENSIVE INCOME
The following summarizes other comprehensive income and accumulated other
comprehensive income at March 31, 2000 and for the three months then ended (in
thousands of dollars):
<TABLE>
<CAPTION>
Before-Tax Income Tax Net-of-Tax
Amount or Benefit Amount
---------- ------------ ---------
<S> <C> <C> <C>
Currency translation adjustments ....... $(166) $ -- $(166)
Minimum pension liability adjustment.... -- -- --
----- ----------- -----
Other comprehensive income (loss) ...... $(166) $ -- $(166)
===== =========== =====
<CAPTION>
Minimum Accumulated
Currency Pension Other
Translation Liability Comprehensive
Adjustments Adjustment Income (Loss)
---------- ----------- -------------
<S> <C> <C> <C>
Beginning at December 31, 1999.......... $ 236 $(183) $ 53
Change in first quarter of 2000......... (166) -- (166)
----- ----- -----
Ending at March 31, 2000 ............... $ 70 $(183) $(113)
===== ===== =====
</TABLE>
Page 10 of 15
<PAGE> 11
The following summarizes other comprehensive income and accumulated other
comprehensive income at March 26, 1999 and for the three months then ended (in
thousands of dollars):
<TABLE>
<CAPTION>
Before-Tax Income Tax Net-of-Tax
Amount or Benefit Amount
---------- ------------ ---------
<S> <C> <C> <C>
Currency translation adjustments ...... $(453) $ -- $(453)
Minimum pension liability adjustment... -- -- --
----- ---------- -----
Other comprehensive income (loss) ..... $(453) $ -- $(453)
===== ========== =====
<CAPTION>
Minimum Accumulated
Currency Pension Other
Translation Liability Comprehensive
Adjustments Adjustment Income (Loss)
----------- ---------- -------------
<S> <C> <C> <C>
Beginning at December 31, 1998......... $ (49) $(1,669) $(1,718)
Change in first quarter of 1999........ (453) -- (453)
------- ------- -------
Ending at March 26, 1999 .............. $ (502) $(1,669) $(2,171)
======= ======= =======
</TABLE>
Comprehensive income for the three months ended March 31, 2000 and March
26, 1999 was as follows:
<TABLE>
<CAPTION>
March 31, March 26,
2000 1999
--------- ---------
<S> <C> <C>
Net earnings ............. $ 15,024 $ 16,621
Other comprehensive income (166) (453)
-------- --------
Comprehensive income ..... $ 14,858 $ 16,168
======== ========
</TABLE>
NET CAPITAL REQUIREMENTS
As registered broker-dealers, JEFCO and W & D are subject to the Securities
and Exchange Commission's Uniform Net Capital Rule (Rule 15c3-1), which requires
the maintenance of minimum net capital. JEFCO and W & D have elected to use the
alternative method permitted by the Rule, which requires that they each maintain
minimum net capital, as defined, equal to the greater of $250,000 or 2% of the
aggregate debit balances arising from customer transactions, as defined.
Net capital changes from day to day, but as of March 31, 2000, JEFCO's and
W & D's net capital was $219.3 million and $2.3 million, respectively, which
exceeded minimum net capital requirements by $208.6 million and $2.1 million,
respectively.
QUARTERLY DIVIDENDS
In 1988, the Company instituted a policy of paying regular quarterly
dividends. There are no restrictions on the Company's present ability to pay
dividends on common stock, other than the governing provisions of the Delaware
General Corporation Law.
Dividends per Common Share (declared and paid):
<TABLE>
<CAPTION>
1st Qtr.
--------
<S> <C>
2000.................... $.05
1999.................... $.05
</TABLE>
OFF-BALANCE SHEET RISK
In the normal course of business, the Company had letters of credit
outstanding aggregating $33.0 million at March 31, 2000, to satisfy various
collateral requirements in lieu of depositing cash or securities.
Page 11 of 15
<PAGE> 12
SEGMENT REPORTING
The Company's business is predominantly in the United States with under 8%
of revenues and under 2% of assets attributable to international operations.
On April 27, 1999, Group and ITGI consummated the separation of ITGI from
the other Group businesses.
Financial information for the discontinued business segment is summarized
as follows (in thousands of dollars):
COMPONENTS OF DISCONTINUED OPERATIONS OF ITGI
<TABLE>
<CAPTION>
MARCH 26,
1999
---------
<S> <C>
Net earnings of ITGI ........................ $8,359
Less: Company's net spin-off related expenses 1,778
Less: Minority interest in ITGI ............. 1,626
------
Discontinued operations of ITGI ............. $4,955
======
</TABLE>
Cash paid for interest and income taxes
The interest paid and income taxes paid amounts included in the
Consolidated Statements of Cash Flows included amounts related to discontinued
operations of ITGI (in thousands of dollars).
<TABLE>
<CAPTION>
MARCH 26,
1999
---------
<S> <C>
Interest paid........................................ $ 28
Income taxes paid.................................... $7,074
</TABLE>
Page 12 of 15
<PAGE> 13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
ANALYSIS OF FINANCIAL CONDITION
Total assets increased $1,421.8 million from $2,896.3 million at December
31, 1999 to $4,318.1 million at March 31, 2000. The increase in assets is mostly
due to an increase in the balances associated with JEFCO's securities borrowed
and loaned matched book business.
FIRST QUARTER 2000 VERSUS FIRST QUARTER 1999
Revenues, net of interest expense, increased 30% to $163.7 million,
compared to $126.1 million for the first quarter of 1999. The increase was due
primarily to a $23.1 million, or 41%, increase in principal transactions, an
$8.9 million, or 18%, increase in commissions, a $2.7 million, or 221%, increase
in other income, a $909,000, or 6%, increase in corporate finance and a $2.0
million, or 42%, increase in net interest income (interest revenues less
interest expense). Commissions and principal transactions revenue increased
mostly due to the Equities and International Divisions. Corporate finance
revenues increased due to an increase in advisory fees. Net interest income was
up mostly due to increased interest income on proprietary securities positions.
Other income increased due mostly to fees related to asset management.
Total non-interest expenses increased 30% to $137.5 million, compared to
$105.7 million for the first quarter of 1999. Compensation and benefits
increased $25.1 million, or 33%, mostly due to an increase in incentive based
compensation accruals. Communications increased $1.9 million, or 19%, due mostly
to increased trade volume. Floor brokerage and clearing fees increased $1.6
million, or 20%, due to increased volume of business executed on the various
exchanges. Travel and promotional increased $1.3 million, or 39%, primarily due
to higher expenses associated with account executive T&Es and customer events.
Occupancy and equipment rental increased $1.2 million, or 37%, mostly due to
higher office rental expenses. Other expense increased $589,000, or 11%,
primarily due to higher provision for general litigation expenses and consulting
expenses.
Earnings before income taxes were up 29% to $26.2 million, compared to
$20.4 million for the same prior year period. The effective tax rate was
approximately 42.7% for both the first quarter of 2000 and the first quarter of
1999. Earnings from continuing operations were up $3.3 million to $15.0 million,
compared to $11.7 million for the same prior year period.
Earnings from discontinued operations, net of income taxes, amounted to
zero in the first quarter of 2000, due to the cessation of ITGI as a subsidiary
of the Company in April 1999.
Basic earnings from continuing operations per share were $0.63 for the
first quarter of 2000 on 23,998,000 shares compared to $0.50 in the 1999 period
on 23,217,000 shares. Diluted earnings from continuing operations per share were
$0.62 for the first quarter of 2000 on 24,232,000 shares compared to $0.50 in
the comparable 1999 period on 23,514,000 shares.
Basic net earnings per share were $0.63 for the first quarter of 2000 on
23,998,000 shares compared to $0.72 in the 1999 period on 23,217,000 shares.
Diluted net earnings per share were $0.62 for the first quarter of 2000 on
24,232,000 shares compared to $0.69 in the comparable 1999 period on 23,514,000
shares.
LIQUIDITY AND CAPITAL RESOURCES
During June 1999, JEFCO obtained an NASD Regulation approved $120,000,000
revolving credit facility to be used in connection with underwriting activities.
The revolving credit facility terminates in June 2001. Loans under this facility
bear interest at 2.5% over either the Federal funds rate or the London Interbank
Offered Rate. There have been no borrowings against the revolving credit
facility.
Page 13 of 15
<PAGE> 14
REVENUES BY SOURCE
The following provides a breakdown of total revenues by source for the
three months ended March 31, 2000 and March 26, 1999.
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------------------------------
March 31, 2000 March 26, 1999
----------------------- ------------------------
% of % of
Total Total
Amount Revenues Amount Revenues
--------- -------- ------ ----------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Commissions and principal transactions:
Equities ............................ $ 92,109 47% $ 68,742 46%
International ....................... 24,753 13 14,806 10
High Yield .......................... 11,907 6 14,361 10
Convertible ......................... 6,982 4 5,196 3
Other proprietary trading ........... 2,212 1 2,854 2
-------- -------- -------- --------
Total ............................. 137,963 71 105,959 71
Corporate finance ..................... 15,217 8 14,308 10
Interest .............................. 37,689 19 27,199 18
Other ................................. 3,891 2 1,212 1
-------- -------- -------- --------
Total revenues ........................ $194,760 100% $148,678 100%
======== ======== ======== ========
</TABLE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Many aspects of the Company's business involve substantial risks of
liability. In the normal course of business, the Company and its subsidiaries
have been named as defendants or co-defendants in lawsuits involving primarily
claims for damages. The Company's management believes that pending litigation
will not have a material adverse effect on the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(b) Reports on Form 8-K.
None.
Page 14 of 15
<PAGE> 15
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JEFFERIES GROUP, INC.
---------------------------
(Registrant)
Date: May 12, 2000 By: /s/ Joseph A. Schenk
------------------- --------------------------------
Joseph A. Schenk
Chief Financial Officer
Page 15 of 15
<TABLE> <S> <C>
<ARTICLE> BD
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION AND THE CONSOLIDATED STATEMENTS
OF EARNINGS AS OF MARCH 31, 2000 AND FOR THE THREE MONTHS THEN ENDED AND THE
NOTES THERETO, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS FILED IN THE 2000 JEFFERIES GROUP, INC. FIRST QUARTER 10-Q FILING.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 51,479
<RECEIVABLES> 591,260
<SECURITIES-RESALE> 3,030
<SECURITIES-BORROWED> 3,119,995
<INSTRUMENTS-OWNED> 285,429
<PP&E> 38,970
<TOTAL-ASSETS> 4,318,125
<SHORT-TERM> 16,000
<PAYABLES> 503,302
<REPOS-SOLD> 18,030
<SECURITIES-LOANED> 2,879,586
<INSTRUMENTS-SOLD> 116,762
<LONG-TERM> 149,509
0
0
<COMMON> 3
<OTHER-SE> 418,938
<TOTAL-LIABILITY-AND-EQUITY> 4,318,125
<TRADING-REVENUE> 79,383
<INTEREST-DIVIDENDS> 37,689
<COMMISSIONS> 58,580
<INVESTMENT-BANKING-REVENUES> 15,217
<FEE-REVENUE> 0
<INTEREST-EXPENSE> 31,099
<COMPENSATION> 100,687
<INCOME-PRETAX> 26,201
<INCOME-PRE-EXTRAORDINARY> 26,201
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,024
<EPS-BASIC> 0.63
<EPS-DILUTED> 0.62
</TABLE>
