<PAGE>
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): October 26, 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 October 26, 2000, Friedman, Billings, Ramsey Group, Inc. issued a
press release announcing its earnings for the 3rd quarter 2000. The entire text
of that press release is being filed herewith and attached as exhibit 99.1.
2. On October 26, 2000, Friedman, Billings, Ramsey Group, Inc. held a
conference call announcing its earnings for the 3rd quarter 2000. The text of
that conference call is being filed herewith and attached as exhibit
99.2.
99.1 Press Release dated October 26, 2000.
99.2 Conference Call script dated October 26, 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
Chairman and Co-Chief Executive Officer
EX-99.1 PRESS RELEASE
EXHIBIT 99.1
For Immediate Release
---------------------
Media Contact: Michael W. Robinson (703)-312-1830 or [email protected]
-----------------
Investor Contact: Kurt Harrington (703)-312-9647 or [email protected]
-------------------
Friedman, Billings, Ramsey Group Reports
$0.10 Per Share Third Quarter Earnings
Fourth Consecutive Quarter of Positive Results
ARLINGTON, Va., October 26, 2000 - Friedman, Billings, Ramsey Group, Inc. (NYSE:
FBR) today reported net income of $5 million, or $0.10 (diluted) per share and
$0.10 (basic) per share, for the third quarter ended September 30, 2000, versus
a net loss of $23.1 million, or ($0.47) (diluted) per share, for the same
quarter a year ago. Revenue for the third quarter was $44.7 million, compared
with $8.9 million for the third quarter of 1999.
For the first nine months of the year, FBR had earnings of $0.34 (basic), and
$0.33 (diluted) per share on revenue of $154.5 million, versus a net loss of
($0.35) (basic) and ($0.35) (diluted) per share on revenue of $71.4 million for
the same period in 1999.
"The third quarter saw FBR turn in another quarter of solid earnings, continuing
our consistent delivery of profits," said Chairman and Co-Chief Executive
Officer Emanuel J. Friedman. "Our on-going diversification and broadened
business mix continued to help build steady returns for our shareholders. As we
have demonstrated for four consecutive quarters now, FBR's many business units
have worked together to create a healthy earnings base."
Investment banking revenue was up in the quarter, delivering $13.6 million in
revenue, versus $9.9 million in revenue last quarter, and almost 125 percent
ahead of third quarter 1999. During the quarter, FBR was the lead manager for
the $38 million initial public offering of Innovative Solutions & Support, Inc.,
and co-managed Aether Systems, Inc.'s secondary offering. FBR also advised
Aether on its $150 million acquisition of Cerulean Technology, Inc. FBR's
investment banking unit participated in 14 public underwritings, mergers and
acquisitions, and private placement deals across the technology, financial
services, and business services sectors during the quarter, for a total
transactional value of $1.5 billion.
FBR's institutional brokerage unit continued to benefit from market volatility,
with revenue of $12 million, versus $17.4 million in revenue in the previous
quarter, and more than 48 percent ahead of third quarter of 1999 revenue. "With
continued volatility in the offing for the securities markets, the value of
FBR's institutional-quality research will continue to give us a healthy
competitive edge," Friedman added.
In the quarter, FBR recorded $16 million in revenue from its managed venture
capital and asset management funds, versus $13.8 million in the previous
quarter.
"We continue to be very pleased with the returns from our investments in the
venture capital arena," Friedman said. "Our first technology venture capital
fund has now returned 100 percent of the capital committed by its investors, and
has distributed a significant return to all of its limited partners," he added.
To date, FBR's six venture capital and private equity teams have investments in
almost 70 companies.
Also during the third quarter, FBR partnered with Maryland-based Emerging
Technology Partners LLC to close a $40 million venture capital fund that will
focus on the rapidly-growing genomics industry. "With most of the genomic
industry based in the Maryland suburbs outside of Washington, this market is
poised for tremendous growth - and offers an excellent continuation of our focus
on technology venture capital opportunities in the Washington NetPlex," Friedman
said.
The company also said that its previously-announced acquisition of Rushmore
Trust and Savings, FSB, and Money Management Associates LP is expected to close
in the near term. When completed, this acquisition is expected to almost double
FBR's assets under management to $2 billion from $1.1 billion, and to continue
to strengthen the company's predictable revenue stream by adding traditional
banking services, as well as an array of fee-based businesses, including cash
management, fixed income funds, and mutual fund back office services.
FBR had 49.3 million common shares outstanding, shareholders' equity of $211.8
million, and book value per share of $4.30 as of September 30, 2000.
A live webcast of FBR's conference call on today's results will be available at
9 a.m. (Eastern Time) at http://www.vcall.com/NASApp/VCall/EventPage?ID=46360.
Replays of the webcast will be available afterward.
Friedman, Billings, Ramsey Group, Inc. (NYSE: FBR) is a holding company for
investment banking, institutional brokerage, venture capital, and other
specialized asset management products and services. FBR provides capital and
financial expertise throughout a company's lifecycle and affords investors
access to a full range of financial products and services. Headquartered in
Northern Virginia, home to an array of leading global Internet companies, FBR
has offices in Arlington and Reston, Va., Irvine, Ca., Boston, Charlotte,
Chicago, Portland, Seattle, London, and Vienna. 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.
Note to Editors: 2 pages of financial information follow this page.
- more -
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<TABLE>
<CAPTION>
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
September 30,
2000 % 1999 %
---------------- ------------ ------------- ---------------
REVENUES:
<S> <C> <C> <C> <C>
Investment banking $ 13,645 30.5% $ 6,065 68.0%
Institutional brokerage 12,008 26.9% 8,093 90.7%
Asset management 16,035 35.9% (7,796) -87.4%
Interest, dividends and other 3,014 6.7% 2,560 28.7%
---------------- ------------ ------------- ---------------
Total revenues 44,702 100.0% 8,922 100.0%
---------------- ------------ ------------- ---------------
EXPENSES:
Compensation and benefits 24,809 55.5% 16,318 182.9%
Business development and professional services 5,974 13.4% 9,662 108.3%
Interest 424 0.9% 159 1.8%
Other 7,302 16.3% 5,844 65.5%
---------------- ------------ ------------- ---------------
Total expenses 38,509 86.1% 31,983 358.5%
---------------- ------------ ------------- ---------------
Net income before income taxes 6,193 13.9% (23,061) -258.5%
Provision for income taxes 1,239 2.8% - 0.0%
---------------- ------------ ------------- ---------------
Net income $ 4,954 11.1% $ (23,061) -258.5%
================ ============ ============= ===============
Basic earnings per share $ 0.10 $ (0.47)
================ =============
Diluted earnings per share $ 0.10 $ (0.47)
================ =============
Weighted average shares - basic 49,229 48,882
================ =============
Weighted average shares - diluted 50,360 48,882
================ =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Nine Months Ended
September 30,
2000 % 1999 %
--------------- ------------ --------------- ------------
REVENUES:
<S> <C> <C> <C> <C>
Investment banking $ 40,287 26.1% $ 27,163 38.0%
Institutional brokerage 41,100 26.6% 27,523 38.6%
Asset management 65,735 42.5% 9,205 12.9%
Interest, dividends and other 7,359 4.8% 7,479 10.5%
--------------- ------------ --------------- ------------
Total revenues 154,481 100.0% 71,370 100.0%
--------------- ------------ --------------- ------------
EXPENSES:
Compensation and benefits 96,241 62.3% 52,664 73.8%
Business development and professional services 14,982 9.7% 18,164 25.5%
Interest 964 0.6% 1,160 1.6%
Other 21,480 13.9% 16,549 23.2%
--------------- ------------ --------------- ------------
Total expenses 133,667 86.5% 88,537 124.1%
--------------- ------------ --------------- ------------
Net income before income taxes 20,814 13.5% (17,167) -24.1%
Provision for income taxes 4,163 2.7% - 0.0%
--------------- ------------ --------------- ------------
Net income $ 16,651 10.8% $ (17,167) -24.1%
=============== ============ =============== ============
Basic earnings per share $ 0.34 $ (0.35)
=============== ===============
Diluted earnings per share $ 0.33 $ (0.35)
=============== ===============
Weighted average shares - basic 49,119 48,869
=============== ===============
Weighted average shares - diluted 50,787 48,869
=============== ===============
</TABLE>
EX-99.2 FBR Group Earnings
EXHIBIT 99.2
- 9 -
Third Quarter 2000
FBR Group Earnings
Conference Call Script
October 26, 2000
[Speaker: Michael Robinson]
Good morning. This is Michael Robinson, Vice President of Corporate
Communications and Investor Relations at Friedman Billings Ramsey Group. Before
beginning our call, I would like to remind everyone that 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 over the call to our Chairman and Co-Chief Executive
Officer, Emanuel Friedman.
[New speaker: Manny Friedman]
Thank you and good morning. As I'm sure you've seen by now, Friedman Billings
Ramsey Group reported third quarter earnings this morning with a net income of
$5 million, or $0.10 per share on a diluted and basic basis. Revenue for the
quarter was $44.7 million.
For the first nine months of the year, FBR has returned healthy and consistent
earnings of $0.33 per share on a diluted basis, and $0.34 basic, on revenue of
$154.5 million.
As we have throughout 2000, our revenue in the third quarter came from across
FBR's core strengths in investment banking, institutional brokerage, and venture
capital and private equity.
Before I turn the call over to my Co-CEO Eric Billings, for more details on our
earnings this quarter, I'd like to briefly focus on FBR's continuing growth. We
are extremely pleased with the on-going expansion of our franchise across all
areas of investment banking - from public underwriting, to mergers and
acquisitions, to private placements. Importantly, we have also continued to
broaden our sector focus to include new areas, such as energy and business
services. And I'm very pleased to tell you that in the third quarter, our
investment banking group completed 14 public underwritings, mergers and
acquisitions, and private placement deals across the technology, financial
services, and business services sectors for a total transactional value of $1.5
billion.
Today, FBR's multi-part business mix has expanded to the point where we have the
ability to generate revenue from more business units than we've ever had before
- providing us with revenue from a wide range of sources. With all of our
individual business units working together, we have turned in four consecutive
profitable quarters by focusing on a wide range of capital market activities -
and seizing new prospects whenever it has been appropriate. With this diverse
business mix in-hand, we are well-positioned to add to it as the markets
continue to evolve and expand, and as strategic opportunities present
themselves. The bottom line, of course, remains the same - maximizing our
revenue in order to generate value for our shareholders.
Additionally, our strong culture of collaboration continues to have positive
results and drive revenue. For example, our institutional brokerage group has
recognized significant benefits from the tremendous talent and depth our
award-winning research department provides. Together, they have been able to
help us turn the market's recent turmoil and volatility to our advantage.
Coupled with our seasoned traders, this powerful combination demonstrates once
again the value of our institutional-quality research.
With that, I'll turn the call over to my Co-CEO Eric Billings for a detailed
discussion of our third quarter earnings.
[New speaker: Eric Billings]
Thank you Manny. It's a pleasure to talk with you this morning about our third
quarter earnings - and we will be pleased to take your questions in just a
minute.
The third quarter was another good quarter for FBR. Our increased breadth
enabled us to capture revenue from an array of business units inside the
company, and across a variety of industry sectors. In sum, FBR continues to
expand its capabilities, while at the same time meeting expectations for solid
earnings.
Revenue from our core investment banking, institutional brokerage, and venture
capital and private equity businesses all grew substantially over their levels
in the third quarter a year ago.
In investment banking, we participated in a total of 14 investment banking deals
- a number of which came as a result of our expertise in financial services and
business services - with a total transactional value of $1.5 billion. Our
investment banking group is well-rounded and continues to benefit from multiple
opportunities across the market. Similarly, we are well-positioned to benefit
from the sector rotation we see in the capital markets.
Our growing technology expertise continued to bear fruit, as our investment
banking revenue was up to $13.6 million - almost 125 percent above the third
quarter last year. In the second quarter, our revenue for investment banking was
$9.9 million. During the third quarter, FBR was the lead manager for the $38
million initial public offering of Innovative Solutions & Support, Inc., and
co-managed Aether Systems, Inc.'s secondary offering. FBR also advised Aether on
its $150 million acquisition of Cerulean Technology, Inc.
In our institutional brokerage group, third quarter revenue of $12 million was
up more than 48 percent over the same period last year. In the second quarter,
our revenue was $17.4 million. Teamed with our research and investment banking
units, our expertise and ability has continued to pay off with more revenue,
increased profits, and greater liquidity.
Our asset management revenue for the quarter was $16 million, compared to a loss
of $7.8 million in the same period last year. In the second quarter, our revenue
was $13.8 million. This includes returns from our arbitrage fund, all of our
venture capital funds, and our managed real estate investment trust. This
revenue increase was the result of several valuation factors that offset the
decline in the market value of certain of the underlying securities in our
venture capital funds.
And, already in the fourth quarter, InforMax, Inc., a leading global provider of
bioinformatic software - and a company that FBR's Technology and Genomic Venture
Capital funds have investments in - completed it's IPO in early October. The
company, a pioneer in the rapidly growing genomics industry, is up 48 percent
from its offering price, as of last night.
Also, last week we completed a $52.75 million private placement for
Strategy.com, a subsidiary of MicroStrategy.
With our previously-announced acquisition of Rushmore Trust and Savings, FSB,
and Money Management Associates LP, which is expected to close in the near term,
we are looking forward to further strengthening our stream of predictable
revenue by adding traditional banking services, as well as an array of fee-based
businesses, including cash management, fixed income funds, and mutual fund back
office services. Upon completion, this acquisition is expected to almost double
our assets under management to $2 billion, from $1.1 billion.
Our demonstrated ability to quickly move resources to take advantage of changes
in the marketplace coupled with investments in our future, will allow us to
expand our proven businesses even further. Our strategy for growth is
straightforward: build on our core strengths in institutional brokerage,
investment banking, and research, while expanding our venture capital and other
attractive asset management and recurring fee-based businesses in a targeted and
tightly-focused manner.
Finally, we were especially pleased with the results of our seventh annual
Investor Conference in mid-September. The conference, the largest we've ever
had, attracted more than 200 companies and more than 1,000 institutional
investors, portfolio managers, analysts, and executives from across the
technology, financial services, energy, real estate sectors and from other
industries. It was highlighted by luncheon keynote address by AOL's Ted Leonsis.
Webcasts of the presentations by the public companies who attended our
conference are still available on our web site at www.fbr.com. Please feel free
to review them at your convenience. I think you will find them interesting.
With that, I would like to open the call for questions. Joining me are my
Co-CEOs Manny Friedman and Russ Ramsey - along with our Chief Operating Officer
Bob Smith and our Chief Financial Officer, Kurt Harrington.
[At end of Q&A]
If there are no further questions, that concludes our conference call for today.
Thank you for joining us. Have a good day.
# # #
