UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) AUGUST 12, 1998
LASER MORTGAGE MANAGEMENT, INC.
(Exact name of registrant as specified in its charter)
MARYLAND 001-13563 22-353916
(State or other (Commission (IRS Employer
jurisdiction of File Number) ID Number)
incorporation)
51 JOHN F. KENNEDY PARKWAY, SHORT HILLS, NEW JERSEY 07078
-------------------------------------------------- ------
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (973) 912-8770
N/A
- ------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
On August 12, 1998, the Registrant issued a press release announcing that
it had engaged Lehman Brothers Inc. as financial adviser to assist the
Registrant in the exploration and evaluation of strategic alternatives designed
to maximize stockholder value. The complete text of the press release is set
forth as Exhibit 99.1 hereto.
On August 13, 1998, the Registrant issued a press release announcing
its earnings for the quarter ended June 30, 1998. The Registrant also announced
that during the three months ended June 30, 1998, it repurchased 636,700 shares
of its common stock. The complete text of the press release is set forth as
Exhibit 99.2 hereto.
On September 18, 1998, the Registrant issued a press release
announcing that it had declared a distribution in cash of $0.38 per share of
common stock for the third quarter of 1998. The distribution is payable on
October 31, 1998 to stockholders of record as of September 30, 1998. The
complete text of the press release is set forth as Exhibit 99.3 hereto.
On October 2, 1998, the Registrant issued a press release announcing
that it had authorized its financial adviser, Lehman Brothers Inc., to promptly
solicit offers to acquire the Registrant or all, or substantially all, of its
assets. Concurrently, the Board engaged BlackRock Financial Management, Inc. as
its consultant to review the Registrant's portfolio and to make recommendations
designed to reduce the portfolio's susceptibility to basis and interest rate
risk and to create additional liquidity. The complete text of the press release
is set forth as Exhibit 99.4 hereto.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements
None.
(b) Pro Forma Financial Statements
None.
(c) Exhibits
99.1 Press Release, dated August 12, 1998.
99.2 Press Release, dated August 13, 1998.
99.3 Press Release, dated September 18, 1998.
99.4 Press Release, dated October 2, 1998.
<PAGE>
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 thereunto duly authorized.
LASER MORTGAGE MANAGEMENT, INC.
By:
/s/ Robert J. Gartner
----------------------------------
Name: Robert J. Gartner
Title: Vice President
Dated: November 9, 1998
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
99.1 Press Release, dated August 12, 1998.
99.2 Press Release, dated August 13, 1998.
99.3 Press Release, dated September 18, 1998.
99.4 Press Release, dated October 2, 1998.
EXHIBIT 99.1
LASER MORTGAGE MANAGEMENT, INC.
ANNOUNCES ENGAGEMENT OF
LEHMAN BROTHERS INC. AS FINANCIAL ADVISOR
Short Hills, New Jersey, August 12, 1998. LASER Mortgage Management,
Inc. (NYSE: LMM) today announced that it has engaged Lehman Brothers Inc. as
financial advisor to assist the Company in the exploration and evaluation of
strategic alternatives designed to maximize stockholder value.
LASER Mortgage Management, Inc. is a specialty finance company
investing primarily in mortgage-backed securities and mortgage loans. The
Company has elected to be taxed as a real estate investment trust under the
Internal Revenue Code of 1986, as amended. LASER Advisers Inc., a registered
investment adviser, manages the day-to-day operations of the Company. The
executive offices of LASER Mortgage Management, Inc. are located at 51 John F.
Kennedy Parkway, Short Hills, New Jersey 07078.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995: STATEMENTS IN THIS PRESS RELEASE REGARDING LASER MORTGAGE
MANAGEMENT, INC.'S BUSINESS WHICH ARE NOT HISTORICAL FACTS ARE "FORWARD-LOOKING"
STATEMENTS THAT INVOLVE RISK AND UNCERTAINTIES.
Date: August 12, 1998
Contact: LASER Mortgage Management, Inc.
Robert Gartner, Vice President of LASER Mortgage Management, Inc.,
973-912-8770
EXHIBIT 99.2
LASER MORTGAGE MANAGEMENT, INC.
ANNOUNCES 2ND QUARTER RESULTS
Short Hills, New Jersey, August 13, 1998. LASER Mortgage Management,
Inc. (NYSE: LMM) reported second quarter operating earnings (prior to an
impairment charge described below) of $6,947,452, or $0.35 per share, and a book
value of $235,197,588, or $12.10 per share. Based on its current estimates of
projected mortgage repayment and general interest rates, the Company has treated
its portfolio of Floating-Rate Interest Only securities as impaired assets and
taken an impairment charge against operating earnings in the second quarter. The
impairment charge of (28,617,746) or (1.43) per share, reduced reported earnings
to a loss of (21,670,294), or (1.08) per share. Deloitte & Touche LLP, the
Company's independent accountants, performed a review of the Company's interim
financial statements for the quarter ended June 30, 1998, and their report on
such review will be included in the Company's Quarterly Report on Form 10-Q.
The Company also announced that during the three months ended June 30,
1998, it repurchased 636,700 shares of its common stock. To date, the total
number of shares repurchased by the Company was 1,546,800 shares at a weighted
average price per share of $9.80 (excluding commissions). The book value of
$12.10 per share as of June 30, 1998, reflects the favorable impact of those
stock repurchases only through that date. All share repurchases were accretive
to the per share book value of the Company.
The portfolio of the Company continued to generate significant cash
flows in the second quarter despite a continuing difficult environment for
mortgage-backed securities. Faster than expected prepayments and a slightly
higher cost of funds combined to depress the earnings of the Company. The shape
of the yield curve and general market concerns about the threat of faster
prepayment rates hurt the valuation of mortgage-backed securities and
contributed to the decline in the book value of the Company during the second
quarter.
The primary effects of the impairment charge are to reduce uncertainty
regarding the Company's portfolio of Interest Only securities and to permit the
Company's future GAAP earnings to present a more meaningful reflection of
operating profit. Since the Company classifies all of its securities as
"available-for-sale," the Floating-Rate IOs are carried on the balance sheet at
their current fair value. The impairment charge to earnings thus has no effect
on the book value of the Company, which already reflects the reduced market
value of the impaired assets.
According the LASER Advisers Inc., the manager of the Company, "The
Floating-Rate IOs play an important role in the portfolio management of LMM. The
Floating Rate IOs have a coupon that increases at a multiple to LIBOR as LIBOR
increases and thus serve to offset increases in the Company's LIBOR-based
borrowing costs. The Floating-Rate IOs also reduce the interest rate risk of the
Company's core fixed-rate mortgage backed securities portfolio. The Floating
Rate IO portfolio effectively hedges more than $600MM in short-term borrowings.
Alternatively, it would take approximately $600MM in face value of 5-year
interest rate swaps, to provide the same protection from interest rate
increases. We continue to believe that the Floating-Rate IOs are an attractive
alternative to other hedging strategies."
BALANCE SHEET AT JUNE 30, 1998
(UNAUDITED)
ASSETS
CASH AND CASH EQUIVALENTS $49,516,606
RECEIVABLE FOR SECURITIES SOLD 422,240,421
INVESTMENT IN SECURITIES AT FAIR VALUE 3,422,209,398
INVESTMENT IN MORTGAGE LOANS AT AMORTIZED COST 10,152,847
ACCRUED INTEREST RECEIVABLE 23,024,093
MARGIN DEPOSITS ON INTEREST RATE SWAPS 35,912,872
TOTAL ASSETS $3,963,056,237
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Repurchase agreements $3,538,985,238
Payable for securities purchased 136,880,809
Payable for common stock repurchased 4,310,234
Accrued interest payable 10,701,873
Interest rate swaps at fair value 28,720,000
Dividends payable 7,626,600
Accounts payable 633,895
Total liabilities 3,727,858,649
STOCKHOLDERS' EQUITY:
Common stock: par value $.001 per share;
100,000,000 shares authorized, 20,069,999 shares issued
and outstanding 20,070
Additional paid-in capital 282,612,000
Accumulated other comprehensive loss (11,622,561)
Dividends in excess of net income (29,416,787)
Treasury stock at cost (636,700 shares) (6,395,134)
Total stockholders' equity 235,197,588
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,963,056,237
<PAGE>
<TABLE>
<CAPTION>
LASER MORTGAGE MANAGEMENT, INC.
STATEMENT OF OPERATIONS
FOR THE
THREE SIX
MONTHS ENDED MONTHS ENDED
JUNE 30, 1998 JUNE 30, 1998
(UNAUDITED) (UNAUDITED)
INTEREST INCOME:
<S> <C> <C>
Mortgage loans and securities $58,515,279 $112,400,332
Cash and cash equivalents 1,159,663 2,422,527
Total interest income 59,674,942 114,822,859
INTEREST EXPENSE:
Repurchase agreements 51,135,634 96,279,245
NET INTEREST INCOME 8,539,308 18,543,614
GAIN ON SALE OF SECURITIES 510,627 1,265,801
IMPAIRMENT LOSS ON INTEREST-ONLY SECURITIES (28,617,746) (28,617,746)
GENERAL AND ADMINISTRATIVE EXPENSES 2,102,483 4,332,310
NET LOSS (21,670,294) (13,140,641)
Unrealized gain (loss) on securities:
Unrealized holding gain (loss)
arising during period 2,474,295 (10,960,581)
Less: reclassification adjustment
for gains included in net income (510,627) (1,265,801)
Other comprehensive income (loss) 1,963,668 (12,226,382)
Comprehensive loss (19,706,626) (25,367,023)
NET LOSS PER SHARE:
Basic (1.08) (0.66)
Diluted (1.08) (0.66)
WEIGHTED AVERAGE
NUMBER OF SHARES OUTSTANDING:
Basic 20,050,473 20,047,613
Diluted 20,050,473 20,047,613
</TABLE>
LASER Mortgage Management, Inc. is a specialty finance company
investing primarily in mortgage-backed securities and mortgage loans. The
Company has elected to be taxed as a real estate investment trust under the
Internal Revenue code of 1986, as amended. LASER Advisers Inc., a registered
investment advisers, manages the day-to-day operations of the Company. The
executive offices of LASER Mortgage Management, Inc. are located at 51 John F.
Kennedy Parkway, Short Hills, New Jersey 07078.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995: STATEMENTS IN THIS PRESS RELEASE REGARDING LASER MORTGAGE
MANAGEMENT, INC.'S BUSINESS WHICH ARE NOT HISTORICAL FACTS ARE "FORWARD-LOOKING"
STATEMENTS THAT INVOLVE RISK AND UNCERTAINTIES.
Date: August 13, 1998
Contact: LASER Mortgage Management, Inc.
Robert Gartner, Vice President of LASER Mortgage Management, Inc.,
973-912-8770
EXHIBIT 99.3
LASER MORTGAGE MANAGEMENT, INC.
ANNOUNCES $0.38 PER SHARE DISTRIBUTION
Short Hills, New Jersey, September 18, 1998. The Board of Directors of
LASER Mortgage Management, Inc. (NYSE: LMM) has declared a distribution in cash
of $0.38 per share of common stock for the third quarter of 1998. The
distribution is payable on October 31, 1998 to stockholders of record as of
September 30, 1998.
The Company's management estimates taxable income from operations
(before losses attributable to sales of portfolio securities) for the third
quarter will be approximately $0.39 per share. The Company estimates that, as a
result of sales of portfolio securities to deliver the Company's balance sheet
in response to the changing market environment, taxable income in the third
quarter will be a loss of approximately (0.34) per share. Depending upon income
and portfolio transactions during the balance of the Company's taxable year,
this quarterly distribution may represent in whole or in part a return of
capital. The estimates of taxable income and loss are preliminary estimates and
actual results may vary substantially from these estimates.
The Company's management estimates that as of August 31, 1998, the
Company's net asset value per share was between $11.00 and $11.25. Because of
the current high degree of volatility in the market for the Company's assets,
the value as of the end of the third quarter may differ substantially from this
estimate.
LASER Mortgage Management, Inc. is a specialty finance company
investing primarily in mortgage-backed securities and mortgage loans. The
Company has elected to be taxed as a real estate investment trust under the
Internal Revenue Code of 1986, as amended. LASER Advisers Inc., a registered
investment adviser, manages the day-to-day operations of the Company. The
executive offices of LASER Mortgage Management, Inc. are located at 51 John F.
Kennedy Parkway, Short Hills, New Jersey.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995: STATEMENTS IN THIS PRESS RELEASE REGARDING LASER MORTGAGE
MANAGEMENT, INC.'S BUSINESS WHICH ARE NOT HISTORICAL FACTS ARE "FORWARD-LOOKING"
STATEMENTS THAT INVOLVE RISK AND UNCERTAINTIES.
Date: September 18, 1998
Contact: LASER Mortgage Management, Inc.
Robert Gartner, Vice President of LASER Mortgage Management, Inc.,
973-912-8770
EXHIBIT 99.4
LASER MORTGAGE MANAGEMENT, INC.
BEGINS IMPLEMENTING
STRATEGIC ALTERNATIVES
Short Hills, N.J., Oct. 2, 1998. The Board of Directors of LASER
Mortgage Management, Inc. (NYSE: LLM) has authorized its financial adviser,
Lehman Brothers Inc., to promptly solicit offers to acquire the Company or all,
or substantially all, of its assets. Concurrently, the Board engaged BlackRock
Financial Management, Inc. as its consultant to review the Company's portfolio
and to make recommendations designed to reduce the portfolio's susceptibility to
basis and interest rate risk and to create additional liquidity.
LASER Mortgage Management, Inc. is a specialty finance company
investing primarily in mortgage-backed securities and mortgage loans. The
Company has elected to be taxed as a real estate investment trust under the
Internal Revenue Code of 1986, as amended. LASER Advisers Inc., a registered
investment adviser, manages the day-to-day operations of the Company. The
executive offices of LASER Mortgage Management, Inc. are located at 51 John F.
Kennedy Parkway, Short Hills, New Jersey.
A telephone call for investors has been scheduled for 3:00 p.m. (EST).
Interested participants are asked to call 800-260-0719. A taped replay of the
call will be available by dialing 800-475-6701 access code 409753.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995: STATEMENTS IN THIS PRESS RELEASE REGARDING LASER MORTGAGE
MANAGEMENT, INC.'S BUSINESS WHICH ARE NOT HISTORICAL FACTS ARE "FORWARD-LOOKING"
STATEMENTS THAT INVOLVE RISK AND UNCERTAINTIES.
Date: October 2, 1998
Contact: LASER Mortgage Management, Inc.
Frederick Khedouri of LASER Mortgage Management,
212-272-8005
