ABWG AB Watley Group Reports First Quarter Results; $183,000 Profit Announced Due to Cost-Cutting and Settlement Benefits
AB Watley Group Reports First Quarter Results; $183,000 Profit Announced Due to Cost-Cutting and Settlement Benefits
NEW YORK--(BUSINESS WIRE)--Feb. 10, 2005--AB Watley Group Inc. (OTCBB:ABWG)("ABWG" or the "Company"), a financial services holding company, today announced its results for the first quarter of fiscal year 2005 ("FY 2005"), ended December 31, 2004. In the first quarter, the Company reported a net profit of $183,000 compared to a net loss of $958,000 reported for the first quarter of fiscal year 2004 ("FY 2004").
EPS increased to $0.01 in the first quarter of FY 2005, compared to a loss per share of $0.07 in the first quarter of FY 2004.
The Company's operating subsidiary AB Watley Direct, Inc. reported a net profit of $383,000 for the first quarter of FY 2005. Revenues from commissions were comparable to the first quarter of FY 2004, increasing to $1.35 million compared to $1.30 million in the first quarter of FY 2004.
For the first quarter of FY 2005, the Company did not have any revenue from proprietary trading compared to Principal Transaction revenue of approximately $1.5 million for the first quarter of FY 2004. The Company ceased proprietary trading operations in February 2004. As a result, total revenues for the first quarter of FY 2005, including fee data services fees and interest and other income, were $1.64 million, a decrease of $1.45 million.
Total expenses for the first quarter of FY 2005 were $1.36 million compared to $3.78 million for the first quarter in FY 2004. This $2.4 million, or 64%, decrease was due to considerable reductions in interest expense, commissions, floor brokerage, and clearing charges, employee compensation, other expenses and depreciation and amortization expense for the first quarter of FY 2005 compared to the first quarter of FY 2004. Additionally, during the first quarter of FY 2005, the Company recognized approximately $697,000 of one-time benefits from settlements with vendors.
"AB Watley Group is pleased to announce a profit this quarter and a visible improvement in EPS over the first quarter of FY 2004. We believe this is evidence that our efforts to reduce debt and expenses and increase cash flow are starting to provide positive results," said Robert Malin, President of AB Watley Group Inc. "Based on these improvements, AB Watley Group is able to focus on its liquidity and capital resource needs and is increasingly free to consider additional sources of revenue and acquisition opportunities."
About AB Watley Group Inc.
AB Watley Group Inc. (Ticker Symbol "ABWG.OB") is a publicly held financial services holding company. The Company conducts its core business through its subsidiary AB Watley Direct, Inc., a U.S. registered broker-dealer that provides online trading and direct access trading services for retail and institutional clients. AB Watley Group provides direct access software and facilities to each of its divisions (online, retail and institutional).
Statements contained in this release, which are not historical facts, may be considered "forward-looking statements" and are based on current expectations and the current economic environment. We caution the reader that such forward-looking statements are not guarantees of future performance. Unknown risk, uncertainties, as well as other uncontrollable or unknown factors could cause actual results to materially differ from the result, performance, or expectations expressed or implied by such forward-looking statements.
A.B. Watley Group Inc.
Condensed Consolidated Statements of Financial Condition
December 31, September 30,
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2004 2004
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(Unaudited)
ASSETS:
Cash and cash equivalents $38,139 $182,929
Receivables from clearing brokers 273,558 314,374
Loans receivable from related party 258,227 258,227
Other assets 94,646 22,600
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TOTAL ASSETS $664,570 $778,130
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LIABILITIES AND STOCKHOLDERS' DEFICIT:
Accounts payable and accrued liabilities 9,069,477 9,854,571
Accrued liabilities to LLC Class B Members 1,905,240 1,910,600
Payable to clearing broker 201,439 135,412
Notes payable to former officer 700,000 700,000
Notes payable - other 369,869 369,869
Subordinated borrowings 2,791,260 2,791,260
Subordinated borrowings from officer 180,000 180,000
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15,217,285 15,941,712
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STOCKHOLDERS' DEFICIT:
Series A Redeemable Convertible Preferred
Stock, $0.001 par value, 1,000,000 shares
authorized and none issued and outstanding -- --
Common stock, $0.001 par value, 50,000,000
shares authorized and 22,512,138 and
19,062,138 issued and outstanding at
December 31, 2004 and September 30, 2004,
respectively 22,512 19,062
Additional paid-in capital 60,439,719 60,326,668
Subscription receivable (966,860) (1,264,109)
Deferred compensation (87,763) (101,620)
Accumulated deficit (73,960,323) (74,143,583)
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TOTAL STOCKHOLDERS' DEFICIT (14,552,715) (15,163,582)
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TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $664,570 $778,130
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A.B. Watley Group Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended
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December 31,
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2004 2003
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REVENUES:
Commissions $1,353,869 $1,296,934
Data service fees 106,653 144,689
Principal transactions -- 1,465,212
Interest and other income 178,528 185,953
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TOTAL REVENUES 1,639,050 3,092,788
Interest expense 97,294 272,481
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NET REVENUES 1,541,756 2,820,307
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EXPENSES AND OTHER CHARGES:
Commissions, floor brokerage and clearing
charges 708,048 1,173,687
Employee compensation and related costs 523,055 1,371,133
Communications 73,214 217,859
Business development 21,483 101,890
Professional services 348,394 240,334
Occupancy and equipment 252,687 357,997
Depreciation and amortization -- 100,519
Other (568,385) 214,704
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TOTAL EXPENSES 1,358,496 3,778,123
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INCOME (LOSS) BEFORE INCOME TAX (PROVISION)
BENEFIT $183,260 ($ 957,816)
INCOME TAX (PROVISION) BENEFIT -- --
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NET INCOME (LOSS) $183,260 ($ 957,816)
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BASIC EARNINGS (LOSS) PER COMMON SHARE $0.01 ($ 0.07)
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Weighted average shares outstanding - Basic 20,332,247 12,787,138
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DILUTED EARNINGS (LOSS) PER SHARE $0.01 ($ 0.07)
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Weighted average shares of common stock and
common stock equivalents - Diluted 29,253,135 12,787,138
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Contacts
AB Watley Group Inc.
Robert Malin, 212-500-6500
rmalin@abwatley.com
or
Adam Friedman Assoc.
Media:
Rick Hilton, 212-981-2529 ext. 22
rick@adam-friedman.com
or
Investors:
Leslie Wolf-Creutzfeldt, 212-981-2529 ext. 11
leslie@adam-friedman.com
