-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, DmmjS0qtclkkJ9odPjwx0WBchfSdfdHH5kNupvy4LmXw/5kv2t2gll8XbGs7RIab v7q57msFqPloOEV/FyL38w== 0000950148-95-000215.txt : 19950605 0000950148-95-000215.hdr.sgml : 19950605 ACCESSION NUMBER: 0000950148-95-000215 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950511 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: JEFFERIES GROUP INC CENTRAL INDEX KEY: 0000717867 STANDARD INDUSTRIAL CLASSIFICATION: 6211 IRS NUMBER: 952848406 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11669 FILM NUMBER: 95536716 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 STREET 2: 10TH FLR CITY: LOS ANGELES STATE: CA ZIP: 90025 10-Q 1 FORM 10-Q FOR THE PERIOD ENDING 3/31/95 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, 1995 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 0-11669 JEFFERIES GROUP, INC. -------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 95-2848406 - - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 11100 Santa Monica Boulevard, Los Angeles, California 90025 - - ------------------------------------------------------------------------------ (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, 1995, the Registrant had 5,482,954 common shares, $.01 par value, outstanding. Page 1 of 16 Pages 2 JEFFERIES GROUP, INC. AND SUBSIDIARIES INDEX TO QUARTERLY REPORT ON FORM 10-Q MARCH 31, 1995
Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Statements of Financial Condition - March 31, 1995 (unaudited) and December 31, 1994 3 Consolidated Statements of Earnings - Three Months Ended March 31, 1995 (unaudited) and March 25, 1994 (unaudited) 4 Consolidated Statements of Changes in Stockholders' Equity - Three Months Ended March 31, 1995 (unaudited) 5 Consolidated Statements of Cash Flows - Three Months Ended March 31, 1995 (unaudited) and March 25, 1994 (unaudited) 6 Notes to Consolidated Financial Statements (unaudited) 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 12 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 14
Page 2 of 16 Pages 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS JEFFERIES GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (DOLLARS IN THOUSANDS)
March 31, December 31, 1995 1994 ------------ ------------ ASSETS (unaudited) Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . $ 76,791 $ 71,381 Receivable from brokers and dealers . . . . . . . . . . . . . . . . . 1,385,032 1,149,670 Receivable from customers, officers and directors . . . . . . . . . . 123,495 105,880 Securities owned . . . . . . . . . . . . . . . . . . . . . . . . . . 133,093 144,940 Premises and equipment . . . . . . . . . . . . . . . . . . . . . . . 22,655 21,071 Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53,257 64,406 ----------- ----------- $ 1,794,323 $ 1,557,348 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,800 $ 866 Payable to brokers and dealers . . . . . . . . . . . . . . . . . . . 1,074,463 840,833 Repurchase agreements . . . . . . . . . . . . . . . . . . . . . . . . -- 18,696 Payable to customers . . . . . . . . . . . . . . . . . . . . . . . . 296,828 325,396 Securities sold, not yet purchased . . . . . . . . . . . . . . . . . 92,913 60,587 Accrued expenses and other liabilities . . . . . . . . . . . . . . . 86,704 82,029 ----------- ----------- 1,562,708 1,328,407 Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,651 59,570 Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . 6,631 6,136 ----------- ----------- 1,628,990 1,394,113 ----------- ----------- Stockholders' equity: Preferred stock, $.01 par value. Authorized 1,000,000 shares; none issued . . . . . . . . . . . -- -- Common stock $.01 par value. Authorized 25,000,000 shares; issued 9,068,360 shares in 1995 and 9,017,710 shares in 1994 . . . . . . . . . . . . . . . . . . . . . . . . 91 90 Additional paid-in capital . . . . . . . . . . . . . . . . . . . 52,160 51,120 Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . 171,734 165,597 Less treasury stock, at cost; 3,585,406 shares in 1995; and 3,412,672 shares in 1994 . . . . . . . . . . . . . (58,196) (52,958) Less currency translation adjustments . . . . . . . . . . . . . . (307) (465) Less additional minimum pension liability . . . . . . . . . . . . (149) (149) ----------- ----------- Total stockholders' equity . . . . . . . . . . . . . . . . . 165,333 163,235 ----------- ----------- $ 1,794,323 $ 1,557,348 =========== ===========
See accompanying notes to consolidated financial statements. Page 3 of 16 Pages 4 JEFFERIES GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months Ended --------------------- March 31, March 25, 1995 1994 --------- --------- Revenues: Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 40,348 $ 39,654 Principal transactions . . . . . . . . . . . . . . . . . . . . . . . 20,981 17,654 Corporate finance . . . . . . . . . . . . . . . . . . . . . . . . . 14,544 8,875 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,030 8,338 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,110 1,169 --------- --------- Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . 95,013 75,690 Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . 15,347 6,488 --------- --------- Revenues, net of interest expense . . . . . . . . . . . . . . . . . 79,666 69,202 --------- --------- Non-interest expenses: Compensation and benefits . . . . . . . . . . . . . . . . . . . . . 41,452 36,617 Floor brokerage and clearing fees . . . . . . . . . . . . . . . . . 4,502 4,399 Telecommunications and data processing services . . . . . . . . . . 5,458 4,504 Occupancy and equipment rental . . . . . . . . . . . . . . . . . . . 3,501 3,356 Travel and promotional . . . . . . . . . . . . . . . . . . . . . . . 1,996 2,026 Software royalties . . . . . . . . . . . . . . . . . . . . . . . . . 1,381 1,263 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,366 6,791 --------- --------- Total non-interest expenses . . . . . . . . . . . . . . . . . . 66,656 58,956 --------- --------- Earnings before income taxes and minority interest . . . . . . . . . . . . . . . . . . . . . . 13,010 10,246 Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,809 4,407 --------- --------- Earnings before minority interest . . . . . . . . . . . . . . . 7,201 5,839 Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 606 -- --------- --------- Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,595 $ 5,839 ========= ========= Earnings per share of common stock: Primary . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.10 $ .95 ========= ========= Fully diluted . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.10 $ .95 ========= ========= Weighted average shares of common stock: Primary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,001,000 6,051,000 Fully diluted . . . . . . . . . . . . . . . . . . . . . . . . . . 6,005,000 6,075,000
See accompanying notes to consolidated financial statements. Page 4 of 16 Pages 5 JEFFERIES GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 1995 (DOLLARS IN THOUSANDS)
Currency Add'l Total Additional Trans- Minimum Stock- Common Paid-in Retained Treasury lation Pension holders' Stock Capital Earnings Stock Adjustment Liability Equity ------ ---------- ---------- ---------- ---------- ---------- --------- Balance, December 31, 1994. $ 90 $ 51,120 $165,597 $(52,958) $(465) $(149) $163,235 Exercise of stock options (50,650 shares)... 1 1,030 1,031 Purchase of 172,734 shares of treasury stock............. (5,238) (5,238) Increase in proportionate share of subsidiary's equity related to subsidiary's purchase of treasury stock.... (168) (168) Other.............. 10 10 Cash dividends, $.05 per share.... (290) (290) Translation adjust- ment.............. 158 158 Net earnings....... 6,595 6,595 ----- --------- --------- --------- ----- ----- -------- Balance, March 31, 1995.... $ 91 $ 52,160 $171,734 $(58,196) $(307) $(149) $165,333 ===== ========= ========= ========= ===== ===== ========
See accompanying notes to consolidated financial statements. Page 5 of 16 Pages 6 JEFFERIES GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (DOLLARS IN THOUSANDS)
Three Months Ended ------------------------- March 31, March 25, 1995 1994 --------- --------- Cash flows from operating activities: Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,595 $ 5,839 --------- -------- Adjustments to reconcile net earnings to net cash provided (used) by operations: Depreciation and amortization . . . . . . . . . . . . . . . . . . 1,907 1,686 (Increase) decrease in receivables: Brokers and dealers . . . . . . . . . . . . . . . . . . . . . . (235,362) (31,755) Customers, officers and directors . . . . . . . . . . . . . . . (17,615) (5,968) (Increase) decrease in securities owned . . . . . . . . . . . . . 11,847 (19,015) (Increase) decrease in other assets . . . . . . . . . . . . . . . 10,810 2,559 Increase (decrease) in operating payables: Brokers and dealers . . . . . . . . . . . . . . . . . . . . . . 233,630 81,166 Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . (28,568) 24,066 Increase (decrease) in securities sold, not yet purchased . . . . . . . . . . . . . . . . . . . . . . . . . 32,326 (4,064) Increase (decrease) in accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . . . . 4,675 (9,814) Increase (decrease) in minority interest . . . . . . . . . . . . 495 -- -------- -------- Total adjustments . . . . . . . . . . . . . . . . . . . 14,145 38,861 -------- -------- Net cash provided (used) by operating activities . . . . . . . . . . . . . . . . 20,740 44,700 -------- --------
Continued on next page. See accompanying notes to consolidated financial statements. Page 6 of 16 Pages 7 JEFFERIES GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED (UNAUDITED) (DOLLARS IN THOUSANDS)
Three Months Ended ----------------------- March 31, March 25, 1995 1994 --------- --------- Cash flows from financing activities: Net proceeds (payments) from bank loans . . . . . . . . . . . . . 10,934 (45,928) Payments on repurchase agreements . . . . . . . . . . . . . . . . (18,696) -- Net payments for: Repurchase of treasury stock . . . . . . . . . . . . . . . . . (5,238) (1,201) Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . (290) (291) Distribution of CAP plan shares . . . . . . . . . . . . . . . . . -- 103 Proceeds from exercise of stock options . . . . . . . . . . . . . 1,031 2,199 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (158) -- -------- -------- Net cash provided (used) by financing activities . . . . . . . . . . . . . . . . (12,417) (45,118) -------- -------- Cash flows from investing activities - purchase of premises and equipment . . . . . . . . . . . . . . . (3,071) (2,849) -------- -------- Effect of foreign currency translation on cash . . . . . . . . . . . . 158 35 -------- -------- Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . 5,410 (3,232) Cash and cash equivalents - beginning of period . . . . . . . . . . . . 71,381 26,910 -------- -------- Cash and cash equivalents - end of period . . . . . . . . . . . . . . . $ 76,791 $ 23,678 ======== ======== Supplemental disclosures of cash flow information: Cash paid during the period for: Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,386 $ 6,495 ======== ======== Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 217 $ 7,531 ======== ========
See accompanying notes to consolidated financial statements. Page 7 of 16 Pages 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. and all subsidiaries, including Jefferies & Company, Inc. (Jefferies) and Investment Technology Group, Inc. (ITGI) and ITGI's wholly-owned subsidiary, ITG Inc. (ITG). The accounts of W & D Securities, Inc. (W & D) are also consolidated because of the nature and extent of the Company's ownership interest in W & D. Jefferies Group, Inc. and its subsidiaries are primarily engaged in securities brokerage and trading, corporate finance and other financial services. The term "Company" refers, unless the context requires otherwise, to Jefferies Group, Inc., its subsidiaries, predecessor entities, and W & D. 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 period and should be read in conjunction with the Company's annual report for the year ended December 31, 1994. SECURITIES TRANSACTIONS The Company records its commission and principal transaction revenues and related expenses on a trade date basis. RECEIVABLE FROM, AND PAYABLE TO, BROKERS AND DEALERS The components, at March 31, 1995, of receivable from and payable to brokers and dealers are as follows:
(Dollars in Thousands) ----------- Receivable from brokers and dealers: Securities borrowed . . . . . . $1,363,989 Other . . . . . . . . . . . . . 21,043 ---------- $1,385,032 ========== Payable to brokers and dealers: Securities loaned . . . . . . . $1,064,916 Other . . . . . . . . . . . . . 9,547 ---------- $1,074,463 ==========
Page 8 of 16 Pages 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, 1995:
(Dollars in Thousands) ---------------------- Securities Sold, Securities Not Yet Owned Purchased ---------- --------- Corporate equity securities . . . . . . . . . $ 82,589 $70,741 High-yield securities . . . . . . . . . . . . 27,342 20,842 Corporate debt securities . . . . . . . . . . 10,345 1,289 U.S. Government and Agency obligations . . . 12,674 -- Options . . . . . . . . . . . . . . . . . . . 143 41 -------- ------- $133,093 $92,913 ======== =======
In the regular course of its business, Jefferies takes securities positions as a market-maker to facilitate customer transactions and for investment purposes. In making markets and when trading for its own account, Jefferies exposes its own capital to the risk of fluctuations in market value. Trading profits (or losses) depend primarily upon the skills of the employees engaged in market-making and position taking, the amount of capital allocated to positions in securities and the general trend of prices in the securities markets. Jefferies monitors its risk by maintaining its securities positions at or below certain pre-established levels. These levels reduce certain opportunities to realize profits in the event that the value of such securities increases. However, they also reduce the risk of loss in the event of a decrease in such value and result in controlled interest costs incurred on funds provided to maintain such positions. The Taxable Fixed Income Department trades high grade and non-investment grade public and private debt securities. The Department specializes in trading and making markets in over 300 unrated or less than investment grade corporate debt securities and accounts for these positions at market value. Risk of loss upon default by the borrower is significantly greater with respect to unrated or less than investment grade corporate debt securities than with other corporate debt securities. These securities are generally unsecured and are often subordinated to other creditors of the issuer. These issuers usually have high levels of indebtedness and are more sensitive to adverse economic conditions, such as recession or increasing interest rates, than are investment grade issuers. There is a limited market for some of these securities and market quotes are generally available from a small number of dealers. INCOME TAXES Deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Page 9 of 16 Pages 10 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, 1995:
(Dollars in Thousands) ----------- Cash in banks . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,432 Short term investments . . . . . . . . . . . . . . . . . . . . 65,359 ----------- $ 76,791 ===========
MINORITY INTEREST Minority interest represents the minority stockholders' proportionate share of the equity of ITGI. At March 31, 1995, Jefferies Group, Inc. owned 80.9% of ITGI's common stock. NET CAPITAL REQUIREMENTS As registered broker-dealers, Jefferies, W & D and ITG are subject to the Securities and Exchange Commission's Uniform Net Capital Rule (Rule 15c3-1), which requires the maintenance of minimum net capital. Jefferies, ITG 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, 1995, Jefferies' net capital of $95.6 million exceeded its minimum net capital requirements by $88.7 million. ITG's net capital of $22.7 million exceeded its minimum net capital requirements by $22.4 million. W & D's net capital of $846,000 exceeded its minimum net capital requirements by $596,000. 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. 1995.................. $.05 1994.................. $.05
OFF-BALANCE SHEET RISK The Company has contractual commitments arising in the ordinary course of business for bank loans, securities loaned or purchased under agreements to sell, securities sold but not yet purchased, future purchases and sales of foreign currencies, securities transactions on a when-issued basis, options contracts and underwriting. Each of these financial instruments and activities contains varying degrees of off-balance sheet risk whereby the market values of the securities underlying the financial instruments may be in excess of, or less than, the contract amount. The settlement of these transactions is not expected to have a material effect upon the Company's consolidated financial statements. In the normal course of business, the Company had letters of credit Page 10 of 16 Pages 11 outstanding aggregating $13.9 million at March 31, 1995, to satisfy various collateral requirements in lieu of depositing cash or securities. CREDIT RISK In the normal course of business, the Company is involved in the execution, settlement and financing of various customer and principal securities transactions. Customer activities are transacted on a cash, margin or delivery-versus-payment basis. Securities transactions are subject to the risk of counterparty or customer nonperformance. However, transactions are collateralized by the underlying security, thereby reducing the associated risk to changes in the market value of the security through settlement date or to the extent of margin balances. Page 11 of 16 Pages 12 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ANALYSIS OF FINANCIAL CONDITION Total assets increased $237.0 million from $1,557.3 million at December 31, 1994 to $1,794.3 million at March 31, 1995. The increase is mostly due to an increase in receivable from brokers and dealers related to securities borrowed. The increase in securities borrowed is a result of an increase in payable to brokers and dealers (related to securities loaned). FIRST QUARTER 1995 VERSUS FIRST QUARTER 1994 Revenues, net of interest expense, increased $10.5 million, or 15%, in the first quarter of 1995 compared to the same prior year period. The increase was due primarily to a $5.7 million, or 64%, increase in corporate finance, a $3.3 million, or 19%, increase in principal transactions, an $833,000, or 45%, increase in net interest income (interest revenues less interest expense), and a $694,000, or 2%, increase in commissions. Other revenues remained relatively unchanged from last year. Commission revenues increased, led by the Investment Technology Group, but partially offset by the Taxable Fixed Income Department and the Equities Division which recorded declines. Revenues from principal transactions increased primarily due to increased trading gains in the Equities Division, International Division and other proprietary trading. Corporate finance revenue included $12.9 million from one debt underwriting. Net interest income increased as the $9.7 million increase in interest revenues exceeded the $8.9 million increase in interest expense. Interest revenues increased due primarily to higher interest rates on larger stock borrow balances. The related increases in interest on stock loan and customer short balances only partially offset the growth in interest revenues. Total non-interest expenses increased $7.7 million, or 13%, in the first quarter of 1995 compared to the same prior year period. Compensation and benefits increased $4.8 million, or 13%, largely due to higher incentive based compensation accruals. Other expense increased $1.6 million, or 23%, mostly due to higher soft dollar and technology development expenses. Telecommunications and data processing services increased $954,000, or 21%, primarily due to increased personnel and trade volumes. Floor brokerage and clearing fees, occupancy and equipment rental, travel and promotional, and software royalties remained relatively unchanged from last year. Earnings before income taxes and minority interest were up 27% to $13.0 million, as compared to $10.2 million in the 1994 period. The effective tax rate was approximately 44.7% in the first quarter of 1995 compared to approximately 43.0% in the 1994 period. Minority interest (approximately 19% of the earnings of ITGI) was $606,000 in the first quarter of 1995. There was no minority interest recorded in the comparable 1994 period, because no minority interest existed until ITGI went public in May, 1994. Primary earnings per share were $1.10 in the first quarter of 1995 on 6,001,000 shares compared to $.95 in the 1994 period on 6,051,000 shares. Fully diluted earnings per share were $1.10 in the first quarter of 1995 on 6,005,000 shares compared to $.95 in the 1994 period on 6,075,000 shares. During the first quarter of 1995, the Company repurchased 172,734 shares of its common stock versus repurchases of 35,925 shares for the comparable 1994 period. Page 12 of 16 Pages 13 The Company's principal activities, securities brokerage and the trading of and market-making in securities, are highly competitive and extremely volatile. The earnings of the Company are subject to wide fluctuations since many factors over which the Company has little or no control, particularly the overall volume of trading and the volatility and general level of market prices, may significantly affect its operations. The following provides a breakdown of total revenues by source for the three months ended March 31, 1995 and March 25, 1994.
For the Three Months Ended ----------------------------------------- March 31, 1995 March 25, 1994 -------------- -------------- % of % of Total Total Amount Revenues Amount Revenues ------ -------- ------ -------- (Dollars in Thousands) Equities Division . . . . . . . . . . . . . . $ 32,498 34% $ 31,369 41% Investment Technology Group . . . . . . . . . 15,320 16 13,434 18 International Division . . . . . . . . . . . . 8,491 9 7,511 10 Taxable Fixed Income Department . . . . . . . 1,452 2 3,563 5 Convertible Division . . . . . . . . . . . . . 1,723 2 1,050 1 Other Proprietary Trading . . . . . . . . . . 1,845 2 381 0 Corporate Finance . . . . . . . . . . . . . . 14,544 15 8,875 12 Interest . . . . . . . . . . . . . . . . . . . 18,030 19 8,338 11 Other . . . . . . . . . . . . . . . . . . . . 1,110 1 1,169 2 --------- ---- ----- ---- Total revenues . . . . . . . . . . . . . . $ 95,013 100% $ 75,690 100% ========= ==== ======== ====
Page 13 of 16 Pages 14 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 11. Computation of Earnings Per Share (Page 15 attached) (b) Reports on Form 8-K. There were no reports filed on Form 8-K during the quarter ended March 31, 1995. Page 14 of 16 Pages 15 EXHIBIT 11 JEFFERIES GROUP, INC. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (AMOUNTS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
For The Three Months Ended --------------------- March 31, March 25, 1995 1994 --------- --------- Common stock and common stock equivalents: Average common stock outstanding . . . . . . . . . . . . . . . 5,535 5,721 Common stock equivalent shares related to employee stock options and restricted stock . . . . . . . . . . . . . . . . 466 330 ------ ------ Total average common stock and common stock equivalents used for primary computation . . . . . . . . . . . . . . . 6,001 6,051 Adjustment of average common stock equivalents to period-end market price, if higher than average price . . . . . . . . . . . . . . . . . . . . . . . . . 4 24 ------ ------ Total average common stock, common stock equivalents and other dilutive securities . . . . . . . . . . . . . . . 6,005 6,075 ====== ====== Earnings: Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . $6,595 $5,839 Adjustment to subsidiary earnings - common stock equivalents on subsidiary . . . . . . . . . . . . . . . . . -- 90 ------ ------ Total earnings for primary and fully diluted computation . . . . . . . . . . . . . . . $6,595 $5,749 ====== ====== Earnings per share: Primary . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.10 $ .95 ====== ====== Fully diluted . . . . . . . . . . . . . . . . . . . . . . . . $ 1.10 $ .95 ====== ======
Page 15 of 16 Pages 16 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, 1995 By: /s/ Clarence T. Schmitz ----------------------- -------------------------- Clarence T. Schmitz Executive Vice President, Chief Financial Officer Page 16 of 16 Pages EX-11 2 COMPUTATIONS OF EARNINGS PER SHARE 1 EXHIBIT 11 JEFFERIES GROUP, INC. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (AMOUNTS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
For The Three Months Ended --------------------- March 31, March 25, 1995 1994 --------- --------- Common stock and common stock equivalents: Average common stock outstanding . . . . . . . . . . . . . . . 5,535 5,721 Common stock equivalent shares related to employee stock options and restricted stock . . . . . . . . . . . . . . . . 466 330 ------ ------ Total average common stock and common stock equivalents used for primary computation . . . . . . . . . . . . . . . 6,001 6,051 Adjustment of average common stock equivalents to period-end market price, if higher than average price . . . . . . . . . . . . . . . . . . . . . . . . . 4 24 ------ ------ Total average common stock, common stock equivalents and other dilutive securities . . . . . . . . . . . . . . . 6,005 6,075 ====== ====== Earnings: Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . $6,595 $5,839 Adjustment to subsidiary earnings - common stock equivalents on subsidiary . . . . . . . . . . . . . . . . . -- 90 ------ ------ Total earnings for primary and fully diluted computation . . . . . . . . . . . . . . . $6,595 $5,749 ====== ====== Earnings per share: Primary . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.10 $ .95 ====== ====== Fully diluted . . . . . . . . . . . . . . . . . . . . . . . . $ 1.10 $ .95 ====== ======
Page 15 of 16 Pages EX-27 3 FINANCIAL DATA SCHEDULE
BD THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) THE COPNSOLIDATED STATEMENTS OF FINANCIAL CONDITION AND STATEMENTS OF EARNINGS AS OF MARCH 31, 1995 AND FOR THE QUARTER THEN ENDED AND THE NOTES THERETO AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH (B) FINANCIAL STATEMENTS FILED IN THE 1ST QUARTER 1995 JEFFERIES GROUP, INC. 10-Q FILING. 1,000 US DOLLARS 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 1 76,791 144,538 0 1,363,989 133,093 22,655 1,794,323 11,800 306,375 0 1,064,916 92,913 59,651 91 0 0 165,242 1,794,323 20,981 18,030 40,348 14,544 0 15,347 41,452 13,010 13,010 0 0 6,595 1.10 1.10
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