-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ooqbhtz3IM64YKzeprXuLqg5JybE7nn51Q/ZrABVqZqAtsnNvfENfW2auGlWkryQ bBQn1BgSkPg11RPXaYHELg== 0000950148-00-001005.txt : 20000515 0000950148-00-001005.hdr.sgml : 20000515 ACCESSION NUMBER: 0000950148-00-001005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JEFFERIES GROUP INC /DE/ CENTRAL INDEX KEY: 0001084580 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 954719745 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-14947 FILM NUMBER: 628261 BUSINESS ADDRESS: STREET 1: 11100 SANTA MONICA BLVD CITY: LOS ANGELES STATE: CA ZIP: 90025 BUSINESS PHONE: 3104451199 MAIL ADDRESS: STREET 1: 11100 SANTA MONICA BLVD CITY: LOS ANGELES STATE: CA ZIP: 90025 FORMER COMPANY: FORMER CONFORMED NAME: JEF HOLDING CO INC DATE OF NAME CHANGE: 19990419 10-Q 1 FORM 10-Q 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 2 JEFFERIES GROUP, INC. AND SUBSIDIARIES INDEX TO QUARTERLY REPORT ON FORM 10-Q MARCH 31, 2000
Page ---- 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
Page 2 of 15 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)
March 31, December 31, 2000 1999 ------------ ----------- ASSETS (unaudited) 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 =========== ===========
See accompanying unaudited notes to consolidated financial statements. Page 3 of 15 4 JEFFERIES GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months Ended ----------------------- March 31, March 26, 2000 1999 --------- -------- 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
See accompanying unaudited notes to consolidated financial statements. Page 4 of 15 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)
Accumulated Total Additional Other Stock- Common Paid-in Retained Treasury Comprehensive holders' Stock Capital Earnings Stock Income (Loss) Equity ---------- ---------- --------- ---------- ------------- ----------- 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 ========= ========= ========= ========= ========= =========
See accompanying unaudited notes to consolidated financial statements Page 5 of 15 6 JEFFERIES GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (DOLLARS IN THOUSANDS)
Three Months Ended ---------------------------- March 31, March 26, 2000 1999 ------------ ------------ 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) ----------- -----------
Continued on next page. See accompanying unaudited notes to consolidated financial statements. Page 6 of 15 7 JEFFERIES GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED (UNAUDITED) (DOLLARS IN THOUSANDS)
Three Months Ended ---------------------- March 31, March 26, 2000 1999 ---------- --------- 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 ======== ========
See accompanying unaudited notes to consolidated financial statements. Page 7 of 15 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): 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 ============
Page 8 of 15 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):
Securities Sold, Securities Not Yet Owned Purchased -------- --------- 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 ======== ========
INVESTMENTS Investments consist of the following as of March 31, 2000 (in thousands of dollars): Debt and equity investments.......................... $ 45,083 Partnership interests................................ 63,015 Equity and debt interests in affiliates.............. 29,866 -------- $137,964 ========
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): Cash in banks........................................ $ 35,954 Short term investments............................... 15,525 --------- $ 51,479 =========
Page 9 of 15 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):
Three Months Ended ------------------------- March 31, March 26, 2000 1999 -------- --------- 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 ======== ========
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):
Before-Tax Income Tax Net-of-Tax Amount or Benefit Amount ---------- ------------ --------- Currency translation adjustments ....... $(166) $ -- $(166) Minimum pension liability adjustment.... -- -- -- ----- ----------- ----- Other comprehensive income (loss) ...... $(166) $ -- $(166) ===== =========== ===== Minimum Accumulated Currency Pension Other Translation Liability Comprehensive Adjustments Adjustment Income (Loss) ---------- ----------- ------------- Beginning at December 31, 1999.......... $ 236 $(183) $ 53 Change in first quarter of 2000......... (166) -- (166) ----- ----- ----- Ending at March 31, 2000 ............... $ 70 $(183) $(113) ===== ===== =====
Page 10 of 15 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):
Before-Tax Income Tax Net-of-Tax Amount or Benefit Amount ---------- ------------ --------- Currency translation adjustments ...... $(453) $ -- $(453) Minimum pension liability adjustment... -- -- -- ----- ---------- ----- Other comprehensive income (loss) ..... $(453) $ -- $(453) ===== ========== ===== Minimum Accumulated Currency Pension Other Translation Liability Comprehensive Adjustments Adjustment Income (Loss) ----------- ---------- ------------- 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) ======= ======= =======
Comprehensive income for the three months ended March 31, 2000 and March 26, 1999 was as follows:
March 31, March 26, 2000 1999 --------- --------- Net earnings ............. $ 15,024 $ 16,621 Other comprehensive income (166) (453) -------- -------- Comprehensive income ..... $ 14,858 $ 16,168 ======== ========
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):
1st Qtr. -------- 2000.................... $.05 1999.................... $.05
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 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
MARCH 26, 1999 --------- 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 ======
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).
MARCH 26, 1999 --------- Interest paid........................................ $ 28 Income taxes paid.................................... $7,074
Page 12 of 15 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 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.
Three Months Ended ----------------------------------------------------- March 31, 2000 March 26, 1999 ----------------------- ------------------------ % of % of Total Total Amount Revenues Amount Revenues --------- -------- ------ ---------- (Dollars in thousands) 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% ======== ======== ======== ========
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 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 EX-27 2 FINANCIAL DATA SCHEDULE
BD 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. 1,000 U.S. DOLLARS 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 1 51,479 591,260 3,030 3,119,995 285,429 38,970 4,318,125 16,000 503,302 18,030 2,879,586 116,762 149,509 0 0 3 418,938 4,318,125 79,383 37,689 58,580 15,217 0 31,099 100,687 26,201 26,201 0 0 15,024 0.63 0.62
-----END PRIVACY-ENHANCED MESSAGE-----