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Jersey City, N.J. - 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 percent from its record high set in March, yet we generated quarterly
revenues of $84.0 million - our 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 unit, 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.
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.
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. Pre-tax, 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 in Hong Kong this fall," said Darcy.
DLJdirect SFG Securities Inc., which began operations in Japan one year ago,
is ranked as the fourth-largest online broker by client assets and rated the number
one online broker by two independent surveys. The company processed on average 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 19,000 as of June 30, 2000, up 46 percent over the first quarter of
2000. Total customer accounts numbered 40,000.
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
- 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.
- 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.
- 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.
- DLJdirect announced a partnership with Internet Financial Network (IFN) to provide
Infogate™, IFN's real-time information service and desktop tool, to its nearly one million customers.
- DLJdirect announced the availability of special wireless product and service offerings from
GoAmerica, Inc., a nationwide wireless Internet service provider. DLJdirect Anywhere™ Wireless
Services may be accessed through the GoAmerica Go.Web service.
- 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.
- DLJdirect and CPAdirectory.com™, 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.
- 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.
- 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® Service.
- 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
- 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.
- 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.
- DLJdirect was again named "Best of the Web" in the spring 2000 special Internet issue of
Forbes magazine.
- 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.
- 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.
- DLJdirect's proprietary investment management and online trading software, DLJdirect
MarketSpeed™ 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.
- DLJdirect SFG was rated the best online broker in Japan by Kabuko, a Japanese Web site
that ranks online brokerages and other service providers.
- 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, NJ, with offices in Parsippany,
NJ, Charlotte, NC, Delray Beach, FL, Sandy City, UT, London, Tokyo, Hong Kong, and Dubai,
DLJdirect employs more than 1,500 people. DLJdirect trades on the New York Stock Exchange
under the ticker symbol "DIR" as a tracking stock of Donaldson, Lufkin & Jenrette.
For more information on DLJdirect, visit the company's Web site at http://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 http://www.DLJ.com. The firm's world
headquarters are located at 277 Park Avenue, New York, NY 10172.
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