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): January 13, 2000
Friedman, Billings, Ramsey Group, Inc.
(Exact name of Registrant as specified in its charter)
Virginia 54-1837743 001-13731
(State or other (I.R.S. Employer incorporation or (Commission File Number)
jurisdiction of 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
1. On January 13, 2000, Friedman, Billings, Ramsey Group, Inc. issued a
press release announcing preliminary estimates of its earnings for the 4th
quarter 1999. The entire text of that press release is being filed herewith
and attached as exhibit 99.1.
2. On January 13, 2000 Friedman, Billings, Ramsey Group, Inc. held a
conference call announcing preliminary estimates of its earnings for the 4th
quarter 1999. The entire text of that conference call is being filed herewith
and attached as exhibit 99.2.
99.1 Press Release dated January 13, 2000.
99.2 Conference Call script dated January 13, 2000.
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
Chief Executive Officer
<PAGE>
Exhibit 1 - 99.1
For Immediate Release
Media Contact: Michael W. Robinson (703)-312-1830 or [email protected]
Investor Contact: David A.R. Allan (703)-469-1080
Friedman Billings Ramsey Group Issues
Statement On Expected Fourth Quarter Results
Company's Internet Initiatives Drive Higher-Than-Expected Results
ARLINGTON, Va., January 13, 2000 - Friedman, Billings, Ramsey Group, Inc. (NYSE:
FBR) said today that, based on preliminary estimates, it expects to report
revenue of between $67 million and $71 million, and earnings of between $0.18
and $0.21 per share for the fourth quarter - significantly exceeding analysts'
expectations. The consensus analyst estimate was for a fourth quarter loss of
$0.02 per share.
The higher-than-expected results are due primarily to strong revenue from
Internet-related venture capital activities, and to a lesser extent,
technology investment banking fees. These results reflect the company's
imbedded Internet-focused activities.
In the fourth quarter, FBR advised, financed, or raised capital for 20
emerging Internet-related companies, including nine venture capital
investments, six managed public offerings, and five corporate finance
(private placement and M&A) assignments, reflecting FBR's focus on serving the
capital and advisory needs of companies at all stages of the corporate
lifecycle. Since entering the technology sector in late 1996, FBR has gone
from zero revenue to fourth quarter technology revenues in excess of $50
million.
Chairman and Co-Chief Executive Officer Emanuel J. Friedman said, "We are
extraordinarily pleased with the results of our focus on the Internet
and the strength of our other corporate finance, institutional sales, and asset
management businesses. We have moved quickly over the past three years to seize
opportunities in the high-growth Internet sector, especially in the greater
Washington, D.C. 'Netplex' region."
W. Russell Ramsey, President and Co-Chief Executive Officer, said, "Our
efforts in the technology sector continued to serve the company and our
clients well. Looking ahead, the converging strength of our Internet units,
including the robust technology platform of our online investment and
distribution unit, fbr.com, position us as a next-generation capital
provider in the digital age. Imbedded within FBR is a powerful
Internet-centric investment firm that combines principal investing with
venture capital, supported by technology-focused research and investment
banking."
<PAGE>
To date, four of the 16 companies that the first FBR Technology Venture
Partners fund (FBRTVP) invested in have gone public. Based on an initial
investment of less than $9 million, FBRTVP's stake in these four companies alone
today is worth approximately $170 million - about 19 times the original
investment. Since inception in 1997, the fund as a whole has gross returns of
more than seven times its original investment. FBRTVP invests in early-stage
Internet, and e-commerce companies in the technology-rich Netplex region in
Washington, D.C., Northern Virginia, and Maryland.
"The dollars we have invested, leveraged by our carried interest as the
general partner, make venture capital funds particularly attractive vehicles
for increasing long-term value for FBR shareholders," Ramsey said. Highlights
of the fourth quarter include:
FBR lead managed the Initial Public Offering (IPO) for NetCreations (NTCR); and
co-managed IPOs for Cysive (CYSV) and ASD Systems, Inc. (ASDS). These three IPOs
are currently trading at an average of 198 percent above their initial offering
prices.
The company also managed secondary offerings for Proxicom (PXCM),
BroadVision, Inc. (BSVN), and Sapient (SAPE). In total, FBR participated in 89
capital-raising transactions in 1999 (including syndicate deals).
FBR also advised Herndon, Va.-based Back to Basics Toys in its acquisition by
Amazon.com, Inc.; and IconixGroup, Inc., Bethesda, Md., in its merger with
Empyrean Group, Vienna, Va. During 1999, FBR completed 12 mergers and
acquisitions.
FBR Technology Venture Partners (FBRTVP) made four new investments in the
quarter, bringing the total number of portfolio companies to 23 (which
includes the 16 companies in FBRTVP I, and seven companies in the second fund,
FBRTVP II).
The company's online investment bank, fbr.com, participated in 12
separate transactions during the quarter. Since its launch in April 1999,
fbr.com has participated in 24 online offerings, with another six
offerings expected shortly. Last week, fbr.com introduced Offering
MarketplaceSM, a revolutionary new online distribution system that enables
new issues to be distributed - for the first time - to millions of investors
in seconds.
FBR will report its audited fourth quarter and year-end results on Thursday,
January 27, 2000. A live webcast of FBR's conference call on these
estimated results will be available at
http://vcall.com/auto/companies/fbr/default.htm at 9 a.m. (Eastern
Time). Replays of the webcast will be available afterward.
<PAGE>
Friedman, Billings, Ramsey Group, Inc. (NYSE: FBR) is a leading
investment firm specializing in Internet technology and other selected
industries. Headquartered in Northern Virginia, home to an array of leading
global Internet companies, FBR is a provider of capital and financial
expertise throughout a company's lifecycle. FBR's businesses include venture
capital, investment banking, online financial services, and research on more
than 430 companies. FBR has offices in Arlington and Reston, Va., London,
Irvine, Ca., Boston, and Chicago. For more information, see www.fbr.com.
# # # Statements concerning future performance, developments, negotiations or
events, 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 competition among venture capital firms and the
high degree of risk associated with venture capital investments, 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.
<PAGE>
Exhibit 2 - 99.2
Media Contact: Melanie Nelson, FBR
(703) 312-9623
[email protected]
FBR GROUP FOURTH QUARTER EARNINGS PRE-RELEASE
Conference Call Script
Good morning. This is David Allan, Director of Investor Relations, of Friedman
Billings Ramsey Group. Before beginning our call, I would like to read the
following Safe Harbor language: Statements concerning future performance,
developments or events, concerning expectations for growth, filed backlog
and market forecasts, and any other guidance on present and future periods,
constitute forward- looking statements. These forward-looking statements
are subject to a number of factors, risks and uncertainties which might cause
actual results or developments 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,
the high degree of risk associated with venture capital investment,
competition among venture capital firms, competition for business and
personnel, available technologies and general economic, political and market
conditions. Additional information concerning factors that could cause actual
results to differ materially is contained in FBR's Annual Report on Form 10K
and quarterly reports on Form 10Q.
I would now like to turn the call over to Bob Smith, Chief Operating Officer of
Friedman Billings Ramsey Group.
[New speaker]
Good morning and thank you for participating in our conference call. Joining
me are Manny Friedman, Eric Billings and Russ Ramsey, who form the Office of
the Chief Executive. As I am sure you have seen by now, today we are
pre-announcing a significant, positive earnings surprise with expected
earnings of between $0.18 and $0.21 per share compared with an average
analyst estimate of a net loss of $0.02 per share for the quarter.
Our earnings estimates are based on expected revenue for the fourth quarter
of between $67 and $71 million. In the fourth quarter, roughly half of our
estimated total revenue came from our venture capital activity.
While we are comfortable with these figures, I would like to stress to you
that these are preliminary numbers and unaudited results. We will report our
actual results as scheduled on January 27th - two weeks from today.
The principal driver of revenue in the quarter was activity in the Internet
technology sector. As those of you who follow our company know, we work
with technology companies - primarily Internet companies - at every stage of
the corporate lifecycle. This includes early-stage and venture capital
financing ...private and public capital raising ... and, later in the lifecycle,
M&A and advisory services - as these companies mature. As you have seen in our
release, this quarter's revenue reflects activity for FBR at each stage of the
lifecycle.
<PAGE>
I would like to expand on the significance of these results. I think that you
will see that there is a very interesting story behind the numbers.
By way of background, remember that FBR grew its revenues from $20 million
in 1992 to $250 million in 1997 (with consistent 30% pre-tax earnings
growth). Since late 1996, we have been deploying resources and establishing
our expertise in technology research, technology investment banking, venture
capital, and sales & trading. And today, about 20 - 25% of our total
headcount is dedicated to technology, and primarily Internet-related
technology.
If you look at the firm today, you will see that embedded within FBR is an
Internet-centric investment firm. With some $50 million in fourth quarter
revenue, the technology practice could compete with many stand-alone firms
engaged in technology investing.
Before I provide more detail on our Internet-centric businesses, I want to
stress that FBR retains its other strengths from that 1992- 1997 period.
Indeed, we have a proven machine that generated $117 million in average
annual revenues just from capital raising in our non-technology sectors from
1996 - 1998.
Turning now to the Internet businesses that drove revenues for the quarter,
what we see - for the first time - is a significant contribution from what has
become the "new economy" in the United States. We are participating in this
revolution with a complete and robust capital solution for the new economy.
The rapid growth of the "Netplex" as a technology center has been truly
astounding. Witness the merger, earlier this week, of AOL with Time-Warner.
Our solution, coupled with our location, gives us a natural advantage to
exploit the opportunities in front of us.
As an Internet-centric investment firm, we provide financing and advice from
a company's early infancy to its eventual national acclaim - what we call
"cradle-to-rave" financing. At the cradle stage in the fourth quarter, we
made nine venture capital investments through our technology venture
partnerships. At the later stages of the cycle, we lead- or co-managed six
IPOs or secondaries and completed five corporate finance assignments. FBR
professionals are involved at every stage of the corporate process. Our ability
to grow with young companies we invest in gives us a powerful opportunity
to increase our long-term value for our shareholders.
Our success in venture capital in our region has also given us the confidence
that we have a success formula that can be applied in other technology
growth areas which have unmet venture capital needs. You may have seen
earlier this week that we announced an equity investment in Dawnay, Day
Lander in London, England. DDL is one of the U.K.'s leading venture
technology incubators. We are proud to be joining Arthur Andersen, Microsoft
UK, and Fletcher Research, among others, as one of DDL's strategic partners.
<PAGE>
I would also like to point out that, contrary to the belief that it is only the
fund investors that benefit from venture capital, our principal investments in
our venture capital funds, plus our carried interest as general partner and
recurring management fees, make venture capital a powerful driver for FBR's
revenues - as the last quarter illustrates.
In closing, this was an exciting quarter for us and a great way to end the
year. What is particularly gratifying to us is that the various components of
our integrated strategy in the Internet technology area came together during
this quarter.
I would also like to point out that our other businesses - which are not
necessarily technology-dependent - turned in strong performances. These
businesses include corporate finance, institutional sales and asset
management. We will be giving further detail on these and all our businesses
two weeks from today.
Thank you again for joining us.
Manny, Eric, Russ and I would now like to open up the call for your questions.
[At end of Q&A]
If there are no further questions, that concludes our conference call for
today. Thank you for joining us and have a good day.
