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Exhibit 99.2
FOR IMMEDIATE RELEASE
PRESS CONTACT: INVESTOR CONTACT:
Charlotte Fox Kevin Zuccala
DLJdirect Inc. Donaldson, Lufkin & Jenrette
201.308.3562 [email protected]
212.892.4693
DLJdirect REPORTS RECORD SIX MONTH REVENUES
-- $84 MILLION IN REVENUES PRODUCES SECOND BEST QUARTER IN COMPANY HISTORY --
--------------------------------------------------------------------------------
JERSEY CITY, N.J. -- JULY 18, 2000 -- DLJdirect (NYSE: DIR), the online
brokerage service of Donaldson, Lufkin & Jenrette, Inc. (NYSE: DLJ), today
reported revenues of $84.0 million for the second quarter ended June 30, 2000, a
40 percent increase over the $60.0 million in revenues reported for the
comparable period a year ago and 27 percent below the $114.7 million for the
first quarter of 2000. DLJdirect also reported a net loss of $6.6 million, or
$(0.06) per share (diluted), for the second quarter of 2000, compared to net
income of $5.1 million, or $0.05 per share (diluted) for the same period last
year and $0.13 per share (diluted) for the first quarter of 2000.
"We are proud to report that we have achieved the ambitious objectives we set
for ourselves over a year ago. Daily trading volume increased 62 percent
year-over-year, active accounts increased 69 percent, and customer assets grew
by 107 percent. Internationally, DLJdirect is also recognized as a leading
provider of online brokerage services in Japan and the UK. And -- iNautix
completed its 10th consecutive quarter of record revenue generation," said Blake
Darcy, Chief Executive Officer.
"Unprecedented market volatility over the past three months made for a
challenging quarter for the online brokerage industry," continued Darcy. "The
NASDAQ Composite fell more than 40% from its record high set in March, yet we
generated quarterly revenues of $84.0 million -- our
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second best quarter ever. As of June 30, 2000, worldwide customer accounts
approached one million and customer assets totaled $27.5 billion."
SECOND QUARTER RESULTS
Commissions totaled $45.5 million in the second quarter, up 27 percent over the
comparable period one year ago and a 39 percent decline from the first quarter
of 2000, as investor activity slowed in reaction to volatile market conditions.
Fee income of $17.7 million, reflected a 44 percent increase over last year.
iNautix Technologies Inc., DLJdirect's technology subsidiary, continued to
increase its contribution to fee income by posting record quarterly fees of $9.5
million, up 53 percent from one year ago. iNautix designs, develops, and hosts
global e-commerce solutions, and its products are now being used by more than
300 financial services firms. iNautix is expanding its technology development
operations in India, the United Kingdom, and Hong Kong. It is presently staffed
by 431 technical people, of whom 53 are located outside the United States.
Interest revenues more than doubled year-over-year to $19.1 million as
DLJdirect's strategy to focus on high-net-worth individuals resulted in
increased margin activity. Underwriting revenues of $1.6 million were
essentially flat versus last year (after excluding revenues earned from
DLJdirect's IPO). DLJdirect served as co-manager for 10 securities offerings
during the quarter, and was the number one, exclusive online distributor of IPOs
for both the first half and second quarter of 2000, according to Securities Data
Company.
Total expenses totaled $91.9 million for the second quarter, versus $48.8
million last year, as the company continued to invest in building brand
awareness -- as well as in technology, personnel and infrastructure, and
customer service representatives.
"We are continuing to build our franchise both domestically and internationally.
The online brokerage industry is still in its early stages in terms of worldwide
customer penetration. We are making significant investments to ensure that
DLJdirect remains the highest quality, lowest cost provider of electronic
brokerage services worldwide," said Glenn Tongue, President of DLJdirect.
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SIX-MONTH RESULTS
Revenues for the six months ended June 30, 2000 reached a record $198.7 million,
85 percent higher than last year. Commissions grew by 77 percent to $120.1
million, while fees increased by 69 percent to $36.4 million, as iNautix
continued to generate record revenues, up 70 percent over last year to $17.9
million. Interest grew 160 percent to $37.5 million, as assets, free credits,
and margin debits posted strong increases over the prior period. Pretax,
pre-marketing earnings increased to $55.6 million, versus $41.8 million last
year.
INTERNATIONAL RESULTS
The international component of DLJdirect's business generated significant growth
in the second quarter -- with international activities representing 20 percent
of total trades, 12 percent of active accounts, and 11 percent of client assets.
"One year ago, DLJdirect provided a premiere online brokerage service to a
largely domestic audience. As planned, our profitable domestic operation
subsidizes our strategic international expansion efforts. Our international
franchises have already achieved leadership positions across several key
parameters of market success. DLJdirect is now a highly ranked online broker in
Japan and the UK, and we're well-positioned to launch into Hong Kong this fall,"
said Darcy.
DLJdirect SFG Securities Inc., which began operations in Japan one year ago, is
ranked as the fourth-largest broker by client assets and rated the number one
online broker by two independent surveys. The company processed 6,300 trades per
day for the second quarter, up 34 percent over the first quarter of 2000. Total
accounts grew by 31 percent over last quarter to 59,000, and active accounts
grew by 10,000 -- or 37 percent -- to 37,000. DLJdirect SFG continued to expand
its product and service offerings with PC voice-recognition capabilities,
allowing investors to trade securities by speaking into their computers.
DLJdirect UK is currently ranked the fourth-largest online broker -- after only
nine months of operation -- with an estimated ten percent market share. Active
customer accounts totaled
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19,000 as of June 30, 2000, up 46 percent over the first quarter of 2000. Total
customer accounts numbered 40,000.
"Now that we have established critical mass and good brand awareness in the UK,
we've begun to enhance our franchise to embrace a Pan-European strategy," said
Darcy.
DLJ Hutchison direct Limited, a joint venture with Hutchison Whampoa, will serve
investors in Hong Kong, Taiwan, mainland China, Singapore, and other Asian
countries. This venture is expected to launch its first service in Hong Kong
this fall.
DLJdirect-EUnion, headquartered in Dubai, provides online financial services for
Arabic-speaking markets throughout the Middle East. This venture -- the first
U.S. online broker to enter this market -- launched in April of this year.
QUARTERLY HIGHLIGHTS
o DLJdirect opened its first U.S. retail branch office in the affluent Boca
Raton area of Florida. The office offers computers for customer use, as well
as monitors displaying the DLJdirect Web site and televised financial news
broadcasts. Experienced investment professionals are on hand to demonstrate
DLJdirect's broad array of financial products and services.
o DLJdirect announced an agreement to provide Bessemer Trust clients the
opportunity to open an online trading account that complements their
full-service investment and wealth management accounts.
o DLJdirect partnered with MBNA America Bank, N.A., a bank holding company, to
offer DLJdirect's services to its credit card customers. Likewise, DLJdirect
will offer MBNA credit cards to its customers.
o DLJdirect announced a partnership with Internet Financial Network (IFN) to
provide Infogate(TM), IFN's real-time information service and desktop tool,
to its nearly one million customers.
o DLJdirect announced the availability of special wireless product and service
offerings from GoAmerica, Inc., a nationwide wireless Internet service
provider. DLJdirect Anywhere(TM) Wireless Services may be accessed through
the GoAmerica Go.Web service.
o DLJdirect and Nationwide Trust Company agreed to offer DLJdirect brokerage
services to participants in employee benefit plans administered by
Nationwide. Under the terms of the agreement, DLJdirect will be the sole
provider of self-directed brokerage accounts within Nationwide's
participant-directed, employer-sponsored retirement plans.
o DLJdirect and CPAdirectory.com(TM), an online database containing over
450,000 Certified Public Accountants (CPA), launched a joint marketing
initiative designed exclusively for members of CPAdirect, the professional
registry of CPAdirectory.com.
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o DLJdirect selected SpeechWorks to provide speech recognition to enhance
TradeTalk, its telephone brokerage system. The new speech-enabled system
allows DLJdirect customers to request quotes and conduct trades for all U.S.
stocks and mutual funds simply by speaking into any phone.
o DLJdirect launched its first cell phone trading access in a partnership with
AT&T Wireless Services. DLJdirect is featured as an online brokerage partner
on the Finance Channel of AT&T's Digital PocketNet(R) Service.
o iNautix Technologies signed a strategic alliance with Cognizant Technologies
to establish a large dedicated e-business development capability in India.
Additionally, iNautix opened a new technology center in East Brunswick, N.J.
to facilitate its growth.
AWARDS AND ACCOLADES
o DLJdirect was named "Best Bet" by PC WORLD, in the prestigious
consumer-oriented magazine's annual ranking of online brokerage services,
which appeared in the magazine's May 2000 issue.
o DLJdirect received four stars -- the highest rating awarded -- iN BARRON's
fifth annual review of online brokers. Measurements included execution, ease
of use, reliability, commissions, and range of offerings.
o DLJdirect was again named "Best of the Web" in the spring 2000 special
Internet issue of FORBES magazine.
o DLJdirect received number one rankings for reliability, real-time market and
company news, IPO availability, bond and options trading, and e-mail alerts
in THESTREET.COM Readers' Online Brokers Survey 2000.
o The DLJdirect Web site earned a top ranking in May 2000 in the Keynote Web
Broker Trading Index for average response time and success rate for standard
stock-order transactions.
o DLJdirect's proprietary investment management and online trading software,
DLJdirect MarketSpeedTM 3.0, was awarded "E-Commerce Software - Best
Product" and "Online Brokerage Service - Best Product" by the Software &
Information Industry Association at the 2000 Codie Awards ceremony honoring
excellence for software and information products and services.
o DLJdirect SFG was rated the best online broker in Japan by KABUKO, a
Japanese Web site that ranks online brokerages and other service providers.
o DLJdirect UK received top-rated online broker and Web site awards from
FIND.CO.UK, the leading directory for UK financial services, INVESTORS
CHRONICLE, and the MONEYWISE 2000 GUIDE TO ONLINE BROKING.
ABOUT DLJdirect
DLJdirect is one of the world's premier online brokerage firms offering a
diversified range of investment products and services to sophisticated,
self-directed investors. As of June 30, 2000, DLJdirect had nearly one million
worldwide customer accounts representing nearly $28 billion in assets.
Headquartered in Jersey City, N.J., with offices in Parsippany, N.J., Charlotte,
N.C., Delray Beach, FL., Sandy City, UT., London, Tokyo, Hong Kong, and Dubai,
DLJdirect
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employs more than 1,500 people. DLJdirect common stock trades on the New York
Stock Exchange under the ticker symbol "DIR." For more information on DLJdirect,
visit the company's Web site at www.DLJdirect.com.
ABOUT DONALDSON, LUFKIN & JENRETTE
Donaldson, Lufkin & Jenrette (DLJ) is a leading integrated investment and
merchant bank serving institutional, corporate, government and individual
clients. DLJ's businesses include securities underwriting; sales and trading;
investment and merchant banking; financial advisory services; investment
research; venture capital; correspondent brokerage services; online, interactive
brokerage services; and asset management. Founded in 1959 and headquartered in
New York City, DLJ employs approximately 11,300 people worldwide and maintains
offices in 13 cities in the United States and 16 cities in Europe, Latin America
and Asia. The company has two classes of common stock trading on the New York
Stock Exchange. Shares trading under the ticker symbol "DLJ" represent
Donaldson, Lufkin & Jenrette, Inc. Shares trading under the ticker symbol "DIR"
track the performance of DLJdirect, its online brokerage business. For more
information on Donaldson, Lufkin & Jenrette, refer to the company's Web site at
www.DLJ.com. The firm's world headquarters are located at 277 Park Avenue, New
York, NY 10172.
-TABLES FOLLOW-
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DLJdirect
Combined Summary of Operations (Unaudited) - See note 1
(in thousands, except per share data and financial ratios)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------
QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2000 1999 2000 1999
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Commissions $ 45,542 $ 35,711 $ 120,081 $ 67,765
Underwritings 1,594 3,254 4,682 3,681
Fees 17,711 12,300 36,418 21,469
Interest 19,142 8,731 37,536 14,436
------------ ---------- ------------ ----------
Total revenues 83,989 59,996 198,717 107,351
------------ ---------- ------------ ----------
Costs and expenses:
Compensation and benefits 27,046 13,532 54,217 24,215
Interest 375 322 890 475
Brokerage, clearing, exchange
fees, and other 12,855 9,220 31,455 18,074
Advertising 19,990 13,232 38,060 19,333
Occupancy and related costs 3,144 868 5,534 1,410
Communications and technology 11,443 5,390 21,544 10,784
Other operating expenses 17,053 6,191 29,465 10,558
------------ ---------- ------------ ----------
Total costs and expenses 91,906 48,755 181,165 84,849
------------ ---------- ------------ ----------
Income (loss) before income tax provision
(benefit) and equity loss of joint ventures (7,917) 11,241 17,552 22,502
------------ ---------- ------------ ----------
Income tax provision (benefit) (3,353) 5,209 7,297 9,297
Equity in net loss of joint ventures (2) (2,057) (956) (3,262) (956)
------------ ---------- ------------ ----------
Net income (loss) $ (6,621) $ 5,076 $ 6,993 $ 12,249
============ ========== ============ ==========
Earnings (loss) per share (3):
Basic $ (0.06) $ 0.05 $ 0.07 $ 0.12
Diluted $ (0.06) $ 0.05 $ 0.07 $ 0.12
============ ========== ============ ==========
Weighted average notional and outstanding shares:
Basic 102,650 102,650 102,650 102,650
Diluted 102,650 104,673 102,651 104,673
============ ========== ============ ==========
Earnings attributable to:
DLJ Retained Interest $ (5,436) $ 222 $ 5,741 $ 222
DLJdirect Tracking Stock (1) (1,185) 49 1,252 49
============ ========== ============ ==========
Tracking Stock earnings per share (3):
Basic $ (0.06) $ 0.00 $ 0.07 $ 0.00
Diluted $ (0.06) $ 0.00 $ 0.07 $ 0.00
============ ========== ============ ==========
Tracking Stock weighted average common shares:
Basic 18,400 18,400 18,400 18,400
Diluted 18,400 20,423 18,401 20,423
============ ========== ============ ==========
</TABLE>
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DLJdirect
Combined Summary of Operations (Unaudited) - See note 1
(in thousands, except per share data and financial ratios)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
SIX MONTHS ENDED
JUNE 30, 2000 VS. 1999
2000 1999 $ %
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Commissions $ 120,081 $ 67,765 $ 52,316 77.2%
Underwritings 4,682 3,681 1,001 27.2%
Fees 36,418 21,469 14,949 69.6%
Interest 37,536 14,436 23,100 160.0%
------------ ---------- ----------- ----------
Total revenues 198,717 107,351 91,366 85.1%
------------ ---------- ----------- ----------
Costs and expenses:
Compensation and benefits 54,217 24,215 30,002 123.9%
Interest 890 475 415 87.4%
Brokerage, clearing, exchange
fees, and other 31,455 18,074 13,381 74.0%
Advertising 38,060 19,333 18,727 96.9%
Occupancy and related costs 5,534 1,410 4,124 292.5%
Communications and technology 21,544 10,784 10,760 99.8%
Other operating expenses 29,465 10,558 18,907 179.1%
------------ ---------- ----------- ----------
Total costs and expenses 181,165 84,849 96,316 113.5%
------------ ---------- ----------- ----------
Income before income tax provision and equity
in net loss of joint ventures 17,552 22,502 (4,950) (22.0)%
------------ ---------- ----------- ----------
Income tax provision 7,297 9,297 (2,000) (21.5)%
Equity in net loss of joint ventures (2) (3,262) (956) (2,306) (241.2)%
------------ ---------- ----------- ----------
Net income $ 6,993 $ 12,249 $ (5,256) (42.9)%
============ ========== =========== ==========
Earnings per share (3):
Basic $ 0.07 $ 0.12 $ (0.05) (41.7)%
Diluted $ 0.07 $ 0.12 $ (0.05) (41.7)%
============ ========== =========== ==========
Weighted average notional and outstanding shares:
Basic 102,650 102,650 0 0.0%
Diluted 102,651 104,673 (2,022) (1.9)%
============ ========== =========== ==========
Earnings attributable to:
DLJ Retained Interest $ 5,741 $ 222 $ 5,519 N/M
DLJdirect Tracking Stock (1) 1,252 49 1,203 N/M
============ ========== =========== ==========
Tracking Stock earnings per share (3):
Basic $ 0.07 $ 0.00 $ 0.07 0.0%
Diluted $ 0.07 $ 0.00 $ 0.07 0.0%
============ ========== =========== ==========
Tracking Stock weighted average common shares:
Basic 18,400 18,400 0 0.0%
Diluted 18,401 20,423 (2,022) (9.9)%
============ ========== =========== ==========
</TABLE>
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DLJdirect
COMBINED SUMMARY OF OPERATIONS (UNAUDITED) - SEE NOTE 1
(1) DLJdirect represents a combination of the assets and liabilities of DLJ
Inc.'s existing online discount brokerage and related investment
services, rather than a separately incorporated entity. DLJdirect Common
Stock tracks the separate performance of these businesses for periods
subsequent to the date of the offering ("Tracking Stock"). On May 28,
1999 ("the closing date"), DLJ Inc. issued in an initial public offering,
18.4 million shares of DLJdirect Common Stock. The shares of DLJdirect
Common Stock have no voting rights, except in certain limited
circumstances. Even though DLJ Inc. has allocated certain assets,
liabilities, revenues, expenses and cash flows to DLJdirect, that
allocation will not change the legal title to any assets or
responsibility for any liabilities. Holders of Tracking Stock are common
stockholders of DLJ Inc. and are subject to all the risks associated with
an investment in DLJ Inc.
As a result of the offering, DLJ Inc. has a retained interest of 82.1% in
DLJdirect represented by 84.3 million notional shares. The 18.4 million
shares of DLJdirect Tracking Stock reflects the 17.9% owned by the
public. Prior to the offering DLJ Inc. had a 100% interest in the
earnings of DLJdirect.
(2) DLJdirect has a 50% interest in joint ventures in Japan, Hong Kong and
the Middle East which amounts are included in equity from net loss of
joint ventures in the combined statement of operations.
(3) Earnings per share amounts have been calculated by dividing net income by
the weighted average notional and outstanding tracking shares. For
periods prior to the quarter ended September 30, 1999, these amounts are
pro forma as if the issuance of the DLJdirect Tracking Stock occurred at
the beginning of 1999. Earnings per share amounts for the quarter ended
June 30, 2000 are calculated based on actual results. The notional shares
represent DLJ's 82.1% retained interest in DLJdirect. Prior to the
offering, DLJ Inc. had a 100% interest in the earnings of DLJdirect.
These pro forma amounts are presented for comparative purposes only.
Tracking Stock earnings per common share amounts have been calculated by
dividing earnings applicable to common shares by the weighted average
actual common shares outstanding. Earnings per share for periods prior to
the closing date are not presented as such amounts are not meaningful.
9
