eSpeed Reports Third Quarter 2001 Results
eSpeed Expects Operating Profit and Positive Cash Flow Starting in the Fourth Quarter of 2001 New York, NY - November 19, 2001 - eSpeed, Inc. (NASDAQ: ESPD), a Cantor Fitzgerald subsidiary and the leading developer of electronic marketplaces and related trading technology solutions, today reported results for the third quarter ended September 30, 2001. eSpeed's revenues for the third quarter increased 25 percent to $28.2 million versus $22.5 million in the same period in 2000. Fully electronic revenues were $15.7 million, an approximate 20 percent increase over the prior year period. Total revenues from Software Solutions in the third quarter 2001 increased 137 percent to $5.5 million versus $2.3 million in the third quarter of 2000. The Company reported a net operating loss in the third quarter, excluding charges, of $4.1 million or ($0.08) per share compared to a net operating loss, excluding non-cash charges, of $7.7 million or ($0.15) per share in the third quarter 2000. The net operating loss for the third quarter of 2001 does not include a provision of $14.4 million for the events related to September 11th as well as non-cash charges of $3.8 million due to a write down of investments in Visible Markets and QV Trading and $0.5 million in non-cash business partner securities. Beginning in the fourth quarter 2001, eSpeed expects to generate an operating profit and positive cash flow. Howard W. Lutnick, Chairman, CEO and President of eSpeed, Inc., said, "We are extremely proud of our Company. Our business and financial results prove the resiliency of our software and the dedication and drive of the eSpeed team. Our trading platform coupled with the commitment and perseverance of eSpeed's 306 employees will ensure that our Company maintains its leadership position. We will leverage our strengths and build upon this amazing organization for future growth." eSpeed's technology platform was ready for business when the U.S. bond market re-opened, 47 hours after eSpeed's headquarters in the World Trade Center were destroyed, on September 11th. In fact, the eSpeed platform was operating in Europe, Asia and Canada on September 11th and 12th in markets that were uninterrupted by the attacks in the U.S. Today, eSpeed's technology is fully operational and is powering the largest North American marketplaces: U.S. Treasuries, U.S. Agencies, Canadian Government Bonds, electricity, natural gas, coal, emission allowances and weather. In addition, eSpeed continues to power all of its previous European and Asian markets. The Company plans to rollout additional marketplaces and products as well as pursue additional partnerships. eSpeed has $40 million in property and casualty insurance coverage and $25 million in business interruption insurance coverage for the structural/hardware damage and disruption in operations and business that it sustained on September 11th. The Company expects that its capital expenditures for the foreseeable future will be offset by this insurance coverage. During the third quarter of 2001, eSpeed purchased the Lawrence Patent, which plays a critical role in the electronic trading of municipal bonds and electronic auctions of fixed income securities and interest rate products. Additionally, the Company had a favorable final ruling with regard to the scope and breadth of its Wagner Patent, which is integral to the electronic trading of futures. Mr. Lutnick continued, "Despite the tragic and horrific events that took place only two months ago, our outlook remains extremely positive. We continue to see tremendous opportunities to license our software as well as new opportunities to partner with fixed income brokers beyond Cantor Fitzgerald and other financial institutions to expand our revenue channels." "While the events of September 11th delayed our profitability by one quarter, we have proven our resolve. We expect to be profitable in the fourth quarter of 2001. eSpeed and its employees embody the definition of the American business spirit." CONSOLIDATED STATEMENT OF FINANCIAL
CONDITION 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/A filed with the Securities and Exchange Commission. Contact: |