-----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, WvAhqjHMyRkr6+eDgpi3R81M1XlO7PsruI5rqmX2ssicbnCZFPFVg+dXg7V4zBQ3 lZ2C9XftNap3hUnOit+IZQ== 0000950148-96-000740.txt : 19960513 0000950148-96-000740.hdr.sgml : 19960513 ACCESSION NUMBER: 0000950148-96-000740 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960329 FILED AS OF DATE: 19960510 SROS: BSE SROS: NASD SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: JEFFERIES GROUP INC CENTRAL INDEX KEY: 0000717867 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [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: 96560038 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 QUARTERLY REPORT FOR PERIOD ENDED 3/29/96 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 29, 1996 ----------------
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 1-11665 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 Blvd, 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 29, 1996, the registrant had 11,192,048 common shares, $.01 par value, outstanding. Page 1 of 16 2 JEFFERIES GROUP, INC. AND SUBSIDIARIES INDEX TO QUARTERLY REPORT ON FORM 10-Q MARCH 29, 1996
Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Statements of Financial Condition - March 29, 1996 (unaudited) and December 31, 1995 ..................... 3 Consolidated Statements of Earnings (unaudited) - Three Months Ended March 29, 1996 and March 31, 1995 ................. 4 Consolidated Statement of Changes in Stockholders' Equity (unaudited) - Three Months Ended March 29, 1996 .................................... 5 Consolidated Statements of Cash Flows (unaudited) - Three Months Ended March 29, 1996 and March 31, 1995 ................. 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 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 29, December 31, 1996 1995 ----------- ---------- (unaudited) ASSETS Cash and cash equivalents........................... $ 127,885 $ 68,318 Receivable from brokers and dealers................. 799,848 1,118,154 Receivable from customers, officers and directors... 107,178 107,158 Securities owned.................................... 184,510 167,210 Premises and equipment.............................. 25,995 26,206 Other assets........................................ 66,126 49,923 ---------- ---------- $1,311,542 $1,536,969 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Payable to brokers and dealers...................... $ 678,349 $ 864,456 Payable to customers................................ 143,003 214,555 Securities sold, not yet purchased.................. 104,612 82,932 Accrued expenses and other liabilities.............. 127,979 124,062 ---------- ---------- 1,053,943 1,286,005 Long-term debt...................................... 56,386 56,322 Minority interest................................... 8,885 8,381 ---------- ---------- 1,119,214 1,350,708 ---------- ---------- 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 18,699,336 shares in 1996 and 18,520,706 shares in 1995.............. 187 93 Additional paid-in capital........................ 60,953 58,117 Retained earnings................................. 201,667 192,234 Less treasury stock, at cost; 7,507,288 shares in 1996 and 7,263,530 shares in 1995............... (69,302) (63,075) Less currency translation adjustments............. (591) (522) Less additional minimum pension liability......... (586) (586) ---------- ---------- Total stockholders' equity.................... 192,328 186,261 ---------- ---------- $1,311,542 $1,536,969 ========== ==========
See accompanying unaudited notes to consolidated financial statements. Page 3 of 16 4 JEFFERIES GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months Ended -------------------- March 29, March 31, 1996 1995 --------- --------- Revenues: Commissions............................................... $ 61,279 $ 40,348 Principal transactions.................................. 34,719 20,981 Corporate finance....................................... 16,707 14,544 Interest................................................ 13,059 18,030 Other................................................... 994 1,110 --------- --------- Total revenues....................................... 126,758 95,013 Interest expense.......................................... 10,066 15,347 --------- --------- Revenues, net of interest expense......................... 116,692 79,666 --------- --------- Non-interest expenses: Compensation and benefits............................... 61,458 41,452 Floor brokerage and clearing fees....................... 6,362 4,502 Telecommunications and data processing services......... 7,797 5,458 Occupancy and equipment rental.......................... 3,785 3,501 Travel and promotional.................................. 3,534 1,996 Software royalties...................................... 2,223 1,381 Other................................................... 11,281 8,366 --------- --------- Total non-interest expenses.......................... 96,440 66,656 --------- --------- Earnings before income taxes and minority interest........ 20,252 13,010 Income taxes.............................................. 8,632 5,809 --------- --------- Earnings before minority interest......................... 11,620 7,201 Minority interest......................................... 988 606 --------- --------- Net earnings......................................... $ 10,632 $ 6,595 ========= ========= Earnings per share of common stock: Primary............................................... $ 0.88 $ 0.55 ========= ========= Fully diluted......................................... $ 0.88 $ 0.55 ========= ========= Weighted average shares of common stock: Primary............................................... 12,041 12,002 Fully diluted......................................... 12,091 12,010
See accompanying unaudited notes to consolidated financial statements. Page 4 of 16 5 JEFFERIES GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) THREE MONTHS ENDED MARCH 29, 1996 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Additional Total Additional Currency Minimum Stock- Common Paid-in Retained Treasury Translation Pension holders' Stock Capital Earnings Stock Adjustment Liability Equity ------ ---------- --------- --------- ----------- ---------- --------- Balance, December 31, 1995........ $ 93 $58,117 $192,234 $(63,075) $(522) $(586) $186,261 Exercise of stock options (154,630 shares)......... 2,218 2,218 Purchase of 243,758 shares of treasury stock. (6,227) (6,227) Issuance of 24,000 shares of common stock... 591 591 Increase in proportionate share of subsidiary's equity related to subsidiary's purchase of treasury stock........... (863) (863) Additional vesting of restricted stock shares.. 121 121 Cash dividends, $.025 per share.......... (281) (281) Redemption of rights, $.01 per right........... (55) (55) Translation adjustment..... (69) (69) Two-for-one stock split.... 94 (94) -- Net earnings............... 10,632 10,632 --------------------------------------------------------------------------- Balance, March 29, 1996........... $187 $60,953 $201,667 $(69,302) $(591) $(586) $192,328 ===========================================================================
See accompanying unaudited notes to consolidated financial statements. Page 5 of 16 6 JEFFERIES GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (DOLLARS IN THOUSANDS)
Three Months Ended ---------------------- March 29, March 31, 1996 1995 --------- --------- Cash flows from operating activities: Net earnings........................................... $ 10,632 $ 6,595 -------- -------- Adjustments to reconcile net earnings to net cash provided by operations: Depreciation and amortization........................ 2,741 1,907 (Increase) decrease in receivables: Brokers and dealers................................ 318,306 (235,362) Customers, officers and directors.................. (20) (17,615) (Increase) decrease in securities owned.............. (17,300) 11,847 (Increase) decrease in other assets.................. (16,628) 10,810 Increase (decrease) in operating payables: Brokers and dealers................................ (186,107) 233,630 Customers.......................................... (71,552) (28,568) Increase in securities sold, not yet purchased....... 21,680 32,326 Increase in accrued expenses and other liabilities... 3,917 4,675 Increase in minority interest........................ 504 495 -------- -------- Total adjustments.................................. 55,541 14,145 -------- -------- Net cash provided by operating activities.......... 66,173 20,740 -------- --------
Continued on next page. See accompanying unaudited notes to consolidated financial statements. Page 6 of 16 7 JEFFERIES GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED (UNAUDITED) (DOLLARS IN THOUSANDS)
Three Months Ended ------------------------- March 29, March 31, 1996 1995 --------- --------- Cash flows from financing activities: Net proceeds from (payments on): Bank loans..................................... -- 10,934 Repurchase agreements.......................... -- (18,696) Repurchase of treasury stock................... (6,227) (5,238) Dividends paid................................. (281) (290) Redemption of rights........................... (55) -- Exercise of stock options...................... 2,218 1,031 Issuance of common stock shares................ 591 -- Additional vesting of restricted stock shares.. 121 -- Increase in proportionate share of subsidiary's equity.......................... (863) (168) Other.......................................... -- 10 --------- -------- Net cash used in financing activities...... (4,496) (12,417) -------- -------- Cash flows from investing activities - purchase of premises and equipment............. (2,041) (3,071) -------- -------- Effect of foreign currency translation on cash... (69) 158 -------- -------- Net increase in cash and cash equivalents.. 59,567 5,410 Cash and cash equivalents - beginning of period.. 68,318 71,381 -------- -------- Cash and cash equivalents - end of period........ $127,885 $ 76,791 ======== ======== Supplemental disclosures of cash flow information: Cash paid during the period for: Interest..................................... $ 9,528 $ 13,386 ======== ======== Income taxes................................. $ 4,491 $ 217 ======== ========
See accompanying unaudited notes to consolidated financial statements. Page 7 of 16 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. and all of its subsidiaries (ITGI), including 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, 1995. 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 and losses are reflected in revenues from principal transactions. COMMON STOCK On March 2, 1996, the Company's Board of Directors approved a two-for-one split of all of the outstanding shares of the Company's common stock, payable March 29, 1996 to stockholders of record at the close of business on March 15, 1996. A total of 9,349,668 shares of common stock were issued in connection with the split. The stated par value of each share was not changed from $0.01. A total of $94,000 was reclassified from the Company's additional paid-in capital account to the Company's common stock account. All share and per share amounts have been restated to retroactively reflect the stock split. On March 15, 1996, the Company's common stock began trading on the NYSE under the symbol JEF. Previously, the common stock traded in the Nasdaq National Market System under the symbol JEFG. RECEIVABLE FROM, AND PAYABLE TO, BROKERS AND DEALERS The components, at March 29, 1996, of receivable from and payable to brokers and dealers are as follows (in thousands of dollars): Receivable from brokers and dealers: Securities borrowed................ $769,172 Other.............................. 30,676 -------- $799,848 ======== Payable to brokers and dealers: Securities loaned.................. $671,398 Other.............................. 6,951 -------- $678,349 ========
Page 8 of 16 9 JEFFERIES GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 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 29, 1996 (in thousands of dollars):
Securities Sold, Securities Not Yet Owned Purchased ---------- ---------- Corporate equity securities........................ $ 101,518 $ 84,268 High-yield securities.............................. 24,059 18,752 Corporate debt securities.......................... 17,225 802 U.S. Government and agency obligations............. 32,871 -- Municipal obligations.............................. 8,411 -- Options............................................ 426 790 ---------- ---------- $ 184,510 $ 104,612 ========== ==========
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 Division trades high grade and non-investment grade public and private debt securities. The Division 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. 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 29, 1996 (in thousands of dollars): Cash in banks......................... $ 9,993 Short term investments................. 117,892 -------- $127,885 ========
Page 9 of 16 10 JEFFERIES GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) MINORITY INTEREST Minority interest represents the minority stockholders' proportionate share of the equity of ITGI. At March 29, 1996, Jefferies Group, Inc. owned over 80% of ITGI's common stock. 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. NET CAPITAL REQUIREMENTS As registered broker-dealers, Jefferies, ITG 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. 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 29, 1996, Jefferies', ITG's and W&D's net capital was $75.0 million, $28.8 million and $884,000, respectively, which exceeded minimum net capital requirements by $71.7 million, $28.6 million and $634,000, 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. On March 2, 1996, the Board of Directors approved a two-for-one stock split and the continuation after the split of the quarterly dividend rate at $0.05 per share. This effectively doubled the quarterly dividend rate. Dividends per Common Share (declared and paid):
1st Qtr ------- 1996................... $.025 1995................... $.025
TERMINATION OF STOCKHOLDERS RIGHTS PLAN In March 1996, the Company redeemed all outstanding rights originally issued pursuant to a Stockholder Rights Plan adopted by the Company in May, 1988. The rights were redeemed for a redemption price of $0.01 per right. OFF-BALANCE SHEET RISK The Company has contractual commitments arising in the ordinary course of business for 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, futures index contracts, commodities futures 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 Page 10 of 16 11 JEFFERIES GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 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 outstanding aggregating $30.9 million at March 29, 1996, 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. The Company seeks to control the risk associated with these transactions by establishing and monitoring credit limits and by monitoring collateral and transaction levels daily. The Company may require counterparties to deposit additional collateral or return collateral pledged. In the case of aged securities failed to receive, the Company may, under industry regulations, purchase the underlying securities in the market and seek reimbursement for any losses from the counterparty. CONCENTRATION OF CREDIT RISK As a major securities firm, the Company's activities are executed primarily with and on behalf of other financial institutions, including brokers and dealers, banks and other institutional customers. Concentrations of credit risk can be affected by changes in economic, industry or geographical factors. The Company seeks to control its credit risk and the potential risk concentration through a variety of reporting and control procedures, including those described in the preceding discussion of credit risk. Page 11 of 16 12 JEFFERIES GROUP, INC. AND SUBSIDIARIES ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ANALYSIS OF FINANCIAL CONDITION Total assets decreased $225.5 million from $1,537.0 million at December 31, 1995 to $1,311.5 million at March 29, 1996. The decrease is mostly due to a decrease in receivable from brokers and dealers related to securities borrowed. The decrease in securities borrowed is related to decreases in securities loaned (included in payable to brokers and dealers) and payable to customers. FIRST QUARTER 1996 VERSUS FIRST QUARTER 1995 Revenues, net of interest expense, increased $37.0 million, or 46%, in the first quarter of 1996 compared to the same prior year period. The increase was due primarily to a $20.9 million, or 52%, increase in commissions, a $13.7 million, or 65%, increase in principal transactions, a $2.2 million, or 15%, increase in corporate finance, and a $310,000, or 12%, increase in net interest income (interest revenues less interest expense). Commission revenues increased, led by ITGI, the Equities Division, and the International Division. Revenues from principal transactions increased primarily due to increased trading gains in the Equities Division, the International Division, and the Taxable Fixed Income Division. Corporate finance revenues benefited from increases in advisory fees. Net interest income increased as the $5.3 million decrease in interest expense exceeded the $5.0 million decrease in interest revenues. Interest revenues decreased due primarily to lower securities borrowed interest income. The related decreases in interest expense on securities loaned and customer credit balances more than offset the reduction in interest revenues. Total non-interest expenses increased $29.8 million, or 45%, in the first quarter of 1996 compared to the same prior year period. Compensation and benefits increased $20.0 million, or 48%, mostly due to higher incentive based compensation accruals. Other expense increased $2.9 million, or 35%, largely due to more soft dollar expenses. Telecommunications and data processing services increased $2.3 million, or 43%, primarily due to increased trade volume and personnel. Floor brokerage and clearing fees increased $1.9 million, or 41%, due to increased volume of business executed on the various exchanges. Travel and promotional increased $1.5 million, or 77%, partly due to increased travel related to the Corporate Finance Division. Software royalties increased $842,000, or 61%, due to the higher POSIT(R) commissions. Occupancy and equipment rental increased $284,000, or 8%, largely due to the addition of offices. Earnings before income taxes and minority interest were up 56% to $20.3 million in the 1996 period, as compared to $13.0 million in the 1995 period. The effective tax rate was approximately 43% in the first quarter of 1996 versus approximately 45% in the first quarter of 1995. The 1996 effective tax rate was lower due to a reduction in the effective state tax rates. Minority interest (approximately 20% of the earnings of ITGI) was $1.0 million in the first quarter of 1996 as compared to $606,000 in the comparable 1995 period. Primary earnings per share were $0.88 in the first quarter of 1996 on 12,041,000 shares compared to $0.55 in the 1995 period on 12,002,000 shares. Fully diluted earnings per share were $0.88 in the first quarter of 1996 on 12,091,000 shares compared to $0.55 in the 1995 period on 12,010,000 shares. During the first quarter of 1996, the Company repurchased 243,758 shares of its common stock versus 345,468 shares for the comparable 1995 period. Page 12 of 16 13 JEFFERIES GROUP, INC. AND SUBSIDIARIES 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 29, 1996 and March 31, 1995.
Three Months Ended ------------------------------------------ March 29, March 31, 1996 1995 ------------------ ----------------- % of % of Total Total Amount Revenues Amount Revenues ------ -------- ------ -------- (Dollars in thousands) Commissions and principal transactions: Equities Division.................. $ 44,814 35% $ 32,498 34% Investment Technology Group........ 27,228 21 15,320 16 International Division............. 13,333 11 8,491 9 Taxable Fixed Income Division...... 4,764 4 1,452 2 Convertible Division............... 1,989 2 1,723 2 Other proprietary trading.......... 3,870 3 1,845 2 Corporate finance...................... 16,707 13 14,544 15 Interest............................... 13,059 10 18,030 19 Other.................................. 994 1 1,110 1 --------------- --------------- Total revenues............... $126,758 100% $ 95,013 100% =============== ===============
Page 13 of 16 14 JEFFERIES GROUP, INC. AND SUBSIDIARIES 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. On March 26, 1996, the Registrant filed a Form 8-K announcing the redemption of all outstanding Preferred Share Purchase Rights originally issued pursuant to the Stockholders Rights Plan dated as of May 12, 1988. Page 14 of 16 15 EXHIBIT 11 JEFFERIES GROUP, INC. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (AMOUNTS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
Three Months Ended --------------------------- March 29, March 31, 1996 1995 --------- --------- Net Earnings $ 10,632 $ 6,595 ========= ========= Shares of common stock and common stock equivalents: Average number of common shares................... 11,237 11,070 Average common stock equivalent shares related to employee stock plans............................. 804 932 --------- --------- Average shares used for primary computation....... 12,041 12,002 Adjust average common stock equivalents to period- end market price, if higher than average price... 50 8 --------- --------- Average shares used for fully diluted computation. 12,091 12,010 ========= ========= Earnings per share: Primary........................................... $ 0.88 $ 0.55 ========= ========= Fully diluted..................................... $ 0.88 $ 0.55 ========= =========
Page 15 of 16 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 10, 1996 By: /s/ Clarence T. Schmitz -------------- -------------------------- Clarence T. Schmitz Executive Vice President, Chief Financial Officer Page 16 of 16 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 29, 1996 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 1996 JEFFERIES GROUP, INC. FIRST QUARTER 10-Q FILING. 1,000 3-MOS DEC-31-1996 JAN-01-1996 MAR-29-1996 127,885 137,854 0 769,172 184,510 25,995 1,311,542 0 149,954 0 671,398 104,612 56,386 0 0 187 192,141 1,311,542 34,719 13,059 61,279 16,707 0 10,066 61,458 20,252 20,252 0 0 10,632 .88 .88
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