SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-28191 13-4063515
(State or Other (Commission File (IRS Employer
Jurisdiction of Number) Identification No.)
Incorporation)
135 E. 57th Street, New York, New York 10022
-------------------------------------- ------------
(Address of Principal Executive Offices) (Zip Code)
|
(c) Exhibits.
See Exhibit Index attached to this Current Report on Form 8-K.
The following information is furnished pursuant to "Item 12. Results of Operations and Financial Condition."
On May 12, 2003, eSpeed, Inc. issued a press release announcing its preliminary operating statistics for the quarter ended March 31, 2003. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
In accordance with the procedural guidance in SEC Release No. 33-8216, the information in this Current Report on Form 8-K and the Exhibit attached to this Current Report on Form 8-K are being furnished under Item 9 of Form 8-K in satisfaction of the requirements of "Item 12. Disclosure of Results of Operations and Financial Condition." The information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.
SIGNATURES
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 hereunto duly authorized.
eSpeed, Inc.
Date: May 13, 2003 By: /s/ Howard W. Lutnick
---------------------------
Howard W. Lutnick
Chairman, CEO and President
|
99.1 Press release of eSpeed, Inc. dated May 12, 2003 containing
preliminary operating statistics for the quarter ended March 31,
2003.
|
ESPEED'S FIRST QUARTER 2003 NET OPERATING INCOME PER SHARE INCREASES 64 PERCENT TO $0.18 FULLY DILUTED; GAAP NET INCOME PER SHARE INCREASES 70 PERCENT TO $0.17
FULLY DILUTED
FIRST QUARTER 2003 REVENUE INCREASES 13 PERCENT YEAR OVER YEAR
ESPEED REITERATES FULL YEAR 2003 AFTER-TAX NET OPERATING EARNINGS GUIDANCE OF
$0.54 PER SHARE FULLY DILUTED
NEW YORK - May 12, 2003 - eSpeed, Inc. (NASDAQ:ESPD), a subsidiary of Cantor Fitzgerald and the leading developer of electronic trading technology, today reported results for the first quarter ended March 31, 2003.
EARNINGS
The Company recorded net operating income of $10.2 million in the first quarter
2003, an increase of 63 percent compared to $6.3 million reported in the first
quarter 2002. The Company reported $0.18 per share fully diluted in the first
quarter 2003, an increase of 64 percent compared to $0.11 per share fully
diluted in the first quarter 2002. eSpeed reports net operating income in order
to reflect earnings generated from the Company's operations.
In accordance with Generally Accepted Accounting Principles (GAAP), eSpeed reported net income of $9.5 million, or $0.17 per share fully diluted, for the first quarter 2003, compared to $5.9 million, or $0.10 per share fully diluted, for the first quarter 2002. In the first quarter of 2003, the differences between net operating income and GAAP net income included a $0.7 million non-cash charge for business partner securities. Comparatively, in the first quarter of 2002, GAAP net income included a $0.4 million non-cash charge for business partner securities.
Beginning in the second quarter 2003, the Company expects to report its net operating results on a fully taxed basis.
REVENUE
eSpeed's total revenue for the first quarter 2003 was $34.0 million, an increase
of 13.4 percent versus $30.0 million in the first quarter 2002. First quarter
2003 fully electronic revenue was $22.5 million, up 4.3 percent compared to
$21.6 million in the first quarter 2002.
Total revenue from Software Solutions in the first quarter 2003 was $5.8 million versus $3.2 million in the first quarter 2002, an increase of 83.3 percent. Software Solutions fees from unrelated parties in the first quarter 2003 were $2.1 million, an increase of 614.5 percent from $0.3 million in the first quarter 2002. Software Solutions fees from related parties in the first quarter 2003 were $3.6 million, an increase of 27.8 percent from $2.9 million in the first quarter 2002.
Commenting on the Company's performance, Howard W. Lutnick, Chairman, CEO and President of eSpeed, Inc., said, "Our solid first quarter earnings performance highlights the strength of eSpeed's business model. The basis of our strategy is four-pronged: maintaining leadership in our core markets, launching new products, introducing software enhancements and maximizing opportunities for software licensing and intellectual property. Despite the slow US Treasury markets in the first quarter, we saw our diversified business strategy drive increases in both revenue and earnings."
VOLUME & TRANSACTIONS
Fully electronic volume for the first quarter 2003 was $6.8 trillion, a 13.7
percent increase versus $6.0 trillion the first quarter 2002. eSpeed's total
electronic volume, including fully electronic and voice-assisted
transactions, for the first quarter 2003 was $9.4 trillion, up 17.0 percent from $8.0 trillion in the first quarter 2002. Total transaction count for the first quarter 2003 was 1.2 million transactions, an increase of 18.6 percent from 1.0 million transactions in the first quarter 2002. On a sequential basis, the Federal Reserve reported US Treasury volumes up 0.4 percent while eSpeed total electronic volume was up 0.8 percent from the fourth quarter 2002 to the first quarter of 2003.
Lee Amaitis, Global Chief Operating Officer of eSpeed, Inc. commented, "Our business is driven by opportunities generated by volatility and increases in both volume and issuance in our global electronic marketplaces. For the first quarter 2003, we benefited from volatile market conditions in Europe, where market fluctuations drove increases in our European voice-assisted volume and transaction counts. Looking forward, we believe the US Treasury Department's issuance of a new benchmark 3-year note, and their recent announcement of substantial increases in issuance in the 2-year, 5-year and 10-year notes and in auction frequency, will also contribute to our growth this year."
CASH AND EQUIVALENTS
As of March 31, 2003, eSpeed had cash and cash equivalents of $175 million.
OUTLOOK
The company is reiterating its guidance of net operating earnings of $0.54 per
share fully diluted and after-tax for the full year 2003. This guidance
continues to be predicated on the company's expectation that average daily
Federal Reserve US Treasury volume growth in 2003 will be between five and seven
percent, compared to the Federal Reserve's fourth quarter 2002 average daily
volume of $381 billion. The Company expects to generate pre-tax net operating
margins of 30 percent and pre-tax incremental margins of 60 percent. For the
second quarter 2003 the Company expects to earn in the range of $0.11 - 0.13 per
share fully diluted and after-tax.
In conclusion, Mr. Lutnick added, "With the continued traction of our software enhancements and our expectation of additional US Treasury issuance, we remain confident that eSpeed will continue to demonstrate strong growth for our company and our shareholders."
ABOUT ESPEED, INC.
eSpeed Inc., a subsidiary of Cantor Fitzgerald, is the leader in developing and
deploying electronic marketplaces and related trading technology that offers
traders access to the most liquid, efficient and neutral financial markets in
the world. eSpeed operates multiple buyer, multiple seller real-time electronic
marketplaces for the global non-equity capital markets, including the world's
largest government bond markets and other fixed income marketplaces. eSpeed's
suite of marketplace tools provides end-to-end transaction solutions for the
purchase and sale of financial and non-financial products over eSpeed's global
private network or via the Internet. eSpeed's neutral platform, reliable
network, straight-through processing and superior products make it the trusted
source for electronic trading at the world's largest fixed income and foreign
exchange trading firms, major exchanges and leading natural gas and electricity
trading firms. A copy of eSpeed's earnings release is available in the news
section of eSpeed's website at www.espeed.com and has been filed with the
Securities and Exchange Commission on Form 8-K.
Statements contained in this Press Release, which are not historical facts, are forward-looking statements, as the term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to: the effects of the attacks on the World Trade Center, market volatility, the limited operating history of eSpeed, Inc., and its ability to enter into marketing and strategic alliances, to effectively manage its growth, to expand the use of its electronic systems and to induce clients to use its marketplaces and services, and other factors that are discussed in eSpeed's Annual Report on Form 10-K, filed with the Securities and Exchange Commission.
###
Contacts
Media:
Tom Ryan
212 610-2425
Investors:
Maureen Murphy
212 610-2426
ESPEED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
MARCH 31, 2003 AND DECEMBER 31, 2002
March 31, 2003 December 31, 2002
------------------------ -----------------------
(unaudited)
Assets
Cash $ 1,401,480 $ 1,313,190
Reverse repurchase agreements with related parties 173,713,280 186,685,709
------------------------ -----------------------
Total cash and cash equivalents 175,114,760 187,998,899
Fixed assets, net 24,555,032 26,383,590
Investments 11,173,549 11,174,718
Intangible assets,net 18,766,339 19,527,505
Receivables from related parties 10,077,447 5,266,445
Other assets 3,506,405 2,359,718
------------------------ -----------------------
Total assets $ 243,193,532 $ 252,710,875
======================== =======================
Liabilities and Stockholders' Equity
Liabilities
Payable to related parties $ 2,727,853 $ 18,857,071
Accounts payable and accrued liabilities 13,240,450 15,398,757
------------------------ -----------------------
Total liabilities 15,968,303 34,255,828
Total stockholders' equity 227,225,229 218,455,047
------------------------ -----------------------
Total liabilities and stockholders' equity $ 243,193,532 $ 252,710,875
======================== =======================
|
ESPEED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND MARCH 31, 2002
(UNAUDITED)
For the three months ended
--------------------------
March 31, 2003 March 31, 2002
Revenues:
Transaction revenues with related parties
Fully electronic transactions $ 22,509,651 $ 21,588,338
Voice assisted brokerage transactions 5,161,600 4,482,500
Screen assisted open outcry transactions 48,989 107,346
-------------- -------------
Total transaction revenues with related parties 27,720,240 26,178,184
Software Solution fees from related parties 3,649,267 2,855,689
Software Solutions and licensing fees from unrelated parties 2,131,442 298,315
Interest income from related parties 542,270 700,987
-------------- -------------
Total revenues 34,043,219 30,033,175
-------------- -------------
Expenses:
Compensation and employee benefits 8,843,664 9,318,303
Occupancy and equipment 7,177,352 5,918,685
Professional and consulting fees 1,111,300 1,921,985
Communications and client networks 1,594,470 1,357,427
Marketing 333,561 1,649,145
Administrative fees paid to related parties 2,578,520 2,141,425
Other 2,319,194 1,349,684
-------------- -------------
Total operating expenses 23,958,061 23,656,654
-------------- -------------
Income from operations before income taxes 10,085,158 6,376,521
-------------- -------------
Income tax provision (benefit) (94,826) 114,000
-------------- -------------
Net income from operations 10,179,984 6,262,521
-------------- -------------
Non-operating activities:
Non-cash business partner securities (705,027) (406,403)
-------------- -------------
Total non-operating (loss) (705,027) (406,403)
Net income $ 9,474,957 $ 5,856,118
============== =============
Per share data:
Basic net income per share
from operating activities $ 0.18 $ 0.11
Non-operating (loss) per share $ (0.01) $ (0.01)
-------------- -------------
Basic net income per share $ 0.17 $ 0.11
============== =============
Fully diluted net income per share
from operating activities $ 0.18 $ 0.11
-------------- -------------
Fully diluted Non-operating (loss) per share $ (0.01) $ (0.01)
-------------- -------------
Fully diluted net income per share $ 0.17 $ 0.10
============== =============
Basic weighted average shares of common stock
outstanding 55,096,194 54,987,309
============== =============
Fully diluted weighted average shares of common stock
outstanding 57,371,590 56,576,284
============== =============
Additional data:
Pre-tax Net Operating Margin 29.6% 21.2%
============== =============
|
ESPEED, INC.
QUARTERLY MARKET ACTIVITY REPORT
TREND
--------------------------------------------------------------------------
1Q02 2Q02 3Q02 4Q02 1Q03
--------------------------------------------------------------------------
Volume (in billions)
Fully Electronic Volume 5,961 6,240 7,241 6,796 6,778
Voice-Assisted Volume 2,050 1,831 2,442 2,495 2,592
--------------------------------------------------------------------------
Total Electronic Volume 8,011 8,072 9,683 9,291 9,369
==========================================================================
Electronic Transaction Count
Fully Electronic Transactions 886,921 915,522 1,092,106 1,060,814 1,079,595
Voice-Assisted Transactions 151,669 157,749 159,074 128,648 151,770
--------------------------------------------------------------------------
Total Transactions 1,038,590 1,073,271 1,251,180 1,189,462 1,231,365
==========================================================================
Trading Days 60 64 64 62 61
Global Interest Rate Futures Volume (1)
CBOT - US Treasury Contracts 43,189,917 47,774,190 58,920,377 55,710,144 60,743,312
CME - Euro $ Contracts 51,964,968 54,596,191 53,434,652 42,085,021 44,124,452
EUREX - Bund Contracts 47,479,974 42,501,702 55,962,133 45,319,604 65,864,492
Fed Quarterly UST Volume for Quarter End (in billions) (2)
UST Volume 21,679 22,382 25,164 23,637 23,740
NYSE - Volume (shares traded) - in millions (3) 82,940 87,652 99,189 93,353 86,585
- Transaction Value - in millions 2,591,119 2,682,303 2,627,565 2,410,169 2,173,033
NASDAQ - Volume (shares traded) - in millions (4) 109,243 117,032 110,226 105,200 88,636
- Transaction Value - in millions 2,227,731 1,948,451 1,495,032 1,583,382 1,390,364
% Change % Change
-------------------------------------
1Q03 vs 4Q02 1Q03 vs 1Q02
Volume (in billions)
Fully Electronic Volume (0.3%) 13.7%
Voice-Assisted Volume 3.9% 26.4%
----------------------------------
Total Electronic Volume 0.8% 17.0%
==================================
Electronic Transaction Count
Fully Electronic Transactions 1.8% 21.7%
Voice-Assisted Transactions 18.0% 0.1%
----------------------------------
Total Transactions 3.5% 18.6%
==================================
Trading Days
Global Interest Rate Futures Volume (1)
CBOT - US Treasury Contracts 9.0% 40.6%
CME - Euro $ Contracts 4.8% (15.1%)
EUREX - Bund Contracts 45.3% 38.7%
Fed Quarterly UST Volume for Quarter End (in billions) (2)
UST Volume 0.4% 9.5%
NYSE - Volume (shares traded) - in millions (3) (7.2%) 4.4%
- Transaction Value - in millions (9.8%) (16.1%)
NASDAQ - Volume (shares traded) - in millions (4) (15.7%) (18.9%)
- Transaction Value - in millions (12.2%) (37.6%)
|
Sources: (1) Futures Industry Association - Monthly Volume Report -
(www.cbot.com, www.cme.com, www.eurexchange.com)
(2) www.ny.frb.org/pihome/statistics/dealer - Federal Reserve Bank
(3) NYSE - www.nyse.com
(4) NASDAQ - www.marketdata.nasdaq.com
--------------------------------------------------------------------- -----------------------------------------------
Fiscal Year 2002 Jan'02 Feb'02 Mar'02 Trading Days
-----------------------------------------------
2003
Volume Data (in billions) Q1 Q2 Q3 Q4
-- -- -- --
Fully Electronic 1,992 1,811 2,158 61 63 64 62
Voice 731 677 642
Total 2,723 2,488 2,800 2002
----
Q1 Q2 Q3 Q4
-- -- -- --
Transaction Count 60 64 64 62
-----------------------------------------------
Fully Electronic 311,319 269,697 305,905
Voice 53,828 50,038 47,803
Total 365,147 319,735 353,708
Trading Days 21 19 20
---------------------------------------------------------------------
---------------------------------------------------------------------
Fiscal Year 2003 Jan'03 Feb'03 Mar'03
Volume Data (in billions)
Fully Electronic 2,309 1,906 2,564
Voice 864 810 917
Total 3,173 2,716 3,481
Transaction Count
Fully Electronic 370,992 305,296 403,307
Voice 49,801 48,449 53,520
Total 420,793 353,745 456,827
Trading Days 21 19 21
---------------------------------------------------------------------
|