New York, NY The Nasdaq Stock Market, Inc. ("NASDAQ"; OTCBB: NDAQ), today reported a net loss of $38.0 million for the third quarter ended September 30, 2003. The net loss applicable to common shareholders was $40.5 million or $(0.52) per basic and diluted earnings per share 1. Included in the results are pre-tax expenses totaling $49.3 million associated with NASDAQ's strategic review initiated in the second quarter 2003, which includes the elimination of non-core product lines, initiatives and severance. Excluding the impact of NASDAQ's strategic review, net income was $0.7 million for the period calculated on a Non-GAAP basis. The Non-GAAP net loss applicable to common shareholders was $1.8 million or $(0.02) per basic and diluted share. Total revenue for the third quarter 2003 was $144.8 million.
"NASDAQ continues to achieve operational milestones including significant functional enhancements and the deepening of the pool of liquidity in SuperMontage, additional brand leverage with the launch of the ONEQ financial product and the continuing organizational realignment," commented Bob Greifeld, President and Chief Executive Officer. "On the regulatory front, we continue to work with the SEC to restore investor confidence in the capital markets recently culminating in the commission's approval of NASDAQ's revised corporate governance listing standards. These are all positive steps toward our quest of becoming the predominant U.S. equities market."
Total revenue declined 27.2% to $144.8 million in the third quarter 2003 from $198.8 million in the third quarter 2002 and 4.4% from $151.4 million when compared with the second quarter 2003.
continued to take decisive action to effectively reduce the cost
and infrastructure required to operate its business.
in the quarter's results are:
NASDAQ currently expects to continue to recognize additional costs throughout the balance of the year in the range of $20 million to $25 million related to the wind-down of these eliminated products, excluding any reduction-in-force charges.
Chief Financial Officer, David Warren, commented: "NASDAQ made
strong progress in the quarter eliminating more than $15 million
in recurring core expenses when compared to the previous quarter
and more than $30 million of similar expenses when compared to the
same period last year. We believe there is still work to be done
as NASDAQ transitions to an efficient, for-profit, publicly owned
"As an engine of economic growth, NASDAQ is focused on providing a framework that creates and maintains stable and orderly markets, provides broad public access to market information and promotes competition," concluded Mr. Greifeld. "This flexible framework breeds innovation and results in quality capital markets that investors can trust."
is the world's largest electronic stock market. With approximately
3,400 companies, it lists more companies and, on average, trades
more shares per day than any other U.S. market. It is home to category-defining
companies that are leaders across all areas of business including
technology, retail, communications, financial services, media and
For more information about NASDAQ, visit the NASDAQ Web site at www.NASDAQ.com or the NASDAQ NewsroomSM at www.nasdaq.com/newsroom.
In addition to disclosing results determined in accordance with generally accepted accounting principles ("GAAP"), NASDAQ also discloses certain non-GAAP results of operation that exclude items associated with the strategic review. Management believes that the Non-GAAP information provides investors with additional information to access NASDAQ's operating performance by excluding these costs, which are non-operational items. The Non-GAAP information may not be comparable to other companies and should not be viewed as a substitute for or superior to net loss or other data prepared in accordance with GAAP. A reconciliation table is provided at the end of this release.
Cautionary Note Regarding Forward-Looking Statements
The matters described herein may contain forward-looking statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve a number of risks, uncertainties or other factors beyond the control of The Nasdaq Stock Market, Inc. (the "Company"), which could cause actual results to differ materially from historical results, performance or other expectations and from any opinions or statements expressed or implied with respect to future periods. These factors include, but are not limited to, the Company's ability to implement its strategic initiatives, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors detailed in the Company's annual report on Form 10-K, and periodic reports filed with the U.S. Securities and Exchange Commission. We undertake no obligation to release any revisions to any forward-looking statements.
1 Dividends payable to the National Association of Securities Dealers Inc. ("NASD") as the holder of NASDAQ's Series A Preferred Stock began accruing in March 2003. The Series A Preferred Stock carries a 7.6% dividend rate for the year commencing March 2003 and 10.6% in all subsequent years. NASDAQ is obligated to pay this dividend to the extent of its capital surplus. The dividend for the third quarter, and subsequent quarters in 2003, is approximately $2.5 million.