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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
Date of Report (date of earliest event reported): April 28, 1999
Friedman, Billings, Ramsey Group, Inc.
(Exact name of Registrant as specified in its charter)
001-13731
(Commission File Number)
Virginia 54-1870350
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1001 Nineteenth Street North
Arlington, VA 22209
(Address of principal executive offices) (Zip code)
(703) 312-9500
(Registrant's telephone number including area code)
Item 5. Other Events
On April 28, 1999, Friedman, Billings, Ramsey Group, Inc. issued a press
release reporting its first quarter 1999 results. A copy of the press release
is being filed herewith.
The following Exhibit is filed as part of this report:
99.1 Press Release dated April 28, 1999.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
By: /s/ Emanuel J. Friedman
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Chief Executive Officer
2
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For Immediate Release
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Investor Contact: David Allan, FBR (703) 469-1080
Media Contact: Melanie Nelson, FBR (703) 312-9623
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FRIEDMAN BILLINGS RAMSEY GROUP, INC. REPORTS
FIRST QUARTER RESULTS
Company Pursuing New Investment Bank Model with Launch of `fbr.com',
First Public Online Investment Bank;
Online Capability Attractive to Issuers Seeking Electronic Distribution
WASHINGTON, D.C., April 28, 1999 Friedman Billings Ramsey Group, Inc.
(NYSE:FBG) today reported first quarter net income of $45,000 or $0.00 per
share versus net income of $15.6 million or $0.31 per share in the first quarter
of 1998. Revenue for the first quarter amounted to $22.1 million compared with
$68.0 million in the first quarter of 1998.
Emanuel J. Friedman, Chairman and CEO said, "It is significant that, with little
underwriting activity in the first quarter, FBR reported a break-even quarter.
These results reflect the benefit of our low fixed cost structure, as well as
the success of our efforts to reduce non-revenue-producing expenses."
"We are especially pleased that we are seeing increased capital markets activity
for the firm in the second quarter. Indeed, we're already seeing the results of
our initiatives in newer sectors of focus such as energy and insurance. Our
backlog of total activity looks the best it has looked in 12 months," Friedman
said.
"We're particularly enthusiastic about the launch of fbr.com, which positions
Friedman Billings Ramsey as the first leading IPO underwriter to make individual
online investors a major focus of its IPO strategy," Friedman said. "fbr.com is
a new online investment bank, backed by FBR's years of research and underwriting
experience. We were one of the first in the industry to recognize the Internet
as a powerful business driver when we underwrote the IPOs for Security First
Network Bank, the predecessor of Security First Technologies (NASDAQ:SONE), and
TeleBanc Financial (NASDAQ:TBFC)."
"Friedman Billings Ramsey today has capabilities and proprietary content that
differentiate fbr.com from competitors," Friedman said. "We have raised more
than $17.9 billion in capital, we have analyst research on 430 companies and we
have proven asset management services, which are already in place for the power
of electronic distribution. That gives us a distinct competitive advantage and
sets fbr.com apart."
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The Company noted that with virtually no `brick and mortar' retail operation, it
is able to make the online customer the exclusive focus of its retail channel
efforts. The Company also said it expects fbr.com to help attract investment
banking clients who are increasingly seeking an electronic distribution channel.
Friedman concluded, "We believe our online presence will leverage every facet of
our business going forward -- in our areas of traditional strength such as
technology, banks, thrifts, specialty finance and real estate -- as well as our
newer areas of focus including energy, insurance, healthcare information
technology, consumer and industrial growth companies. We're now in an excellent
position to attack what we see as an extremely robust market for online capital
raising."
Investment Banking
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Revenue from investment banking totaled $6 million in the first quarter. W.
Russell Ramsey, President of FBR, said, "While the first quarter was on a par
with the fourth quarter of last year as a slow period for underwriting, we once
again showed strength in private placements. Notable private placements for the
Company included a $48 million private placement for GreenPoint Financial Corp.
and a $12 million private placement for DVD Express, an emerging online retailer
of DVDs."
"In terms of public offerings, we were a co-manager for a secondary offering by
MicroStrategy (NASDAQ:MSTR) and a highly successful IPO by Corporate Executive
Board (NASDAQ:EXBD), as well as lead manager for a preferred stock offering by
Atlantic Preferred Capital Corporation (NASDAQ:ATLPP), a REIT created by
Atlantic Bank and Trust Company (NASDAQ:ATLB)," Ramsey said.
"We're encouraged by a growing pipeline in the second quarter for underwriting
and M&A activity, notably in the technology and energy sectors," Ramsey said.
"We expect that fbr.com will attract investment banking clients, especially
among those issuers seeking electronic distribution."
Asset Management
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Revenues from asset management totaled $2.3 million in the first quarter. The
Company ended the first quarter with $673 million in total assets under
management, of which $490 million or 73 percent are incentive-based assets.
In the first quarter, three of FBR Technology Partners' portfolio companies
registered to go public. The first of these, Proxicom (NASDAQ:PXCM), issued
shares on April 20.
Vice Chairman and COO Eric F. Billings said, "We are pleased that three of our
technology venture capital investment companies have already reached the public
financing stage. We believe that this demonstrates the success of our venture
capital initiatives, which were begun only two short years ago. With venture
capital investments now in 16 companies, we expect to grow with these companies
as their future financing needs grow."
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"Assets under management, and especially incentive-based assets, continue to be
an important profit center for our company," Billings said. "With fbr.com, we
have a whole new means to attract and serve
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the sophisticated investor. fbr.com will leverage our strengths in asset
management by enabling us, among other things, to bring deals directly to the
investor."
Billings concluded, "Our launch of fbr.com generated one new registration per
minute on the first day and we continue to add registrations at a pace of over
1,000 per day. We believe we can generate the same kind of enthusiasm among
accredited investors looking for innovative investment ideas."
Financial Condition
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As of March 31, 1999, FBR shareholders' equity was $176.9 million and book value
per share was $3.63.
Friedman, Billings, Ramsey Group, Inc. had 48,733,128 common shares outstanding
as of March 31, 1999. This amount reflects the Company's purchase of 1,421,927
shares since it announced a share repurchase program of up to 2.5 million shares
on July 22, 1998.
Friedman Billings Ramsey Group, Inc. is a publicly traded, full-service
investment banking firm. Asset management operations include private investment
partnerships, venture capital and private equity partnerships, and the FBR
family of mutual funds. Its wholly owned subsidiary, Friedman Billings Ramsey &
Co., Inc. (FBR) makes a market in more than 400 securities and provides research
coverage on 430 publicly traded companies. fbr.com is a division of FBR
Investment Services, Inc., a wholly owned subsidiary of Friedman Billings Ramsey
Group, Inc. and will provide access, as a selling group member, to IPOs
underwritten by FBR and others.
One Page of Financial Information Follows this Page
Statements concerning future performance, developments, negotiations or events,
concerning expectations or plans and objectives for future operations or for
growth and market forecasts, and any other guidance on present and future
periods, constitute forward-looking statements that are subject to a number of
factors, risks and uncertainties that might cause actual results to differ
materially from stated expectations or current circumstances. These factors
include but are not limited to the effect of demand for public offerings,
activity in the secondary securities markets, available technologies,
competition for business and personnel, and general economic, political and
market conditions. For a more detailed explanation of these and other risks and
uncertainties, refer to "Factors Affecting the Company's Business, Operating
Results and Financial Condition" in the Company's Form 10-K for 1998,
incorporated herein by reference.
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FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
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<CAPTION>
Three months ended March 31,
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1999 % 1998 %
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<S> <C> <C> <C> <C>
REVENUES:
Investment banking $ 6,048 27.4% $51,371 75.6%
Institutional brokerage 10,096 45.8% 12,742 18.7%
Asset management fees 2,337 10.6% 3,169 4.7%
Gains and losses, net 1,045 4.7% (2,917) -4.3%
Interest and dividends 2,543 11.5% 3,619 5.3%
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Total revenues 22,069 100.0% 67,984 100.0%
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EXPENSES:
Compensation and benefits 14,238 64.5% 28,343 41.7%
Business development 2,594 11.8% 6,806 10.0%
Interest 507 2.3% 1,659 2.4%
Other 4,685 21.2% 5,440 8.0%
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Total expenses 22,024 99.8% 42,248 62.1%
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Net income before income taxes 45 0.2% 25,736 37.9%
Provision for income taxes - 0.0% 10,157 15.0%
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Net income $ 45 0.2% $15,579 22.9%
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Basic and diluted earnings per share $0.00 $0.31
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Weighted average shares (in thousands) 49,034 50,029
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