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) July 29, 1997
THE BEAR STEARNS COMPANIES INC.
Exact name of registrant as specified in its charter
DELAWARE File No. 1-8989 13-3286161
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
245 Park Avenue, New York, New York 10167
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (212) 272-2000
Not Applicable
(former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
Filed herewith is a copy of The Bear Stearns Companies Inc. (the "Company")
Press Release, dated July 29, 1997, announcing its earnings for the quarter and
fiscal year ended June 30, 1997 which includes the Unaudited Consolidated
Statements of Income for the Company for the three months and fiscal year ended
June 30, 1997 and June 30, 1996, and the three months ended March 27, 1997. All
normal recurring adjustments that are, in the opinion of management, necessary
for a fair presentation of the results of operations for the periods presented
have been included. The nature of the Company's business is such that the
results for any interim period are not necessarily indicative of the results for
a full year.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of business acquired:
Not applicable.
(b) Pro Forma financial information:
Not applicable.
(c) Exhibit:
(99) Press Release, dated July 29, 1997.
<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.
THE BEAR STEARNS COMPANIES INC.
By: /s/ Michael J. Abatemarco
Michael J. Abatemarco
Controller
Dated: July 29, 1997
<PAGE>
THE BEAR STEARNS COMPANIES INC.
FORM 8-K
CURRENT REPORT
Exhibit Index
Exhibit No. Description Page
(99) Press Release, dated July 29, 1997
<PAGE>
For Immediate Release
Contact: Maura Gaenzle (212) 272-4445
Ellen Glickman (212) 272-8188
THE BEAR STEARNS COMPANIES INC.
REPORTS ANOTHER RECORD YEAR FOR FISCAL 1997
AND STRONG FOURTH QUARTER RESULTS;
FISCAL YEAR ROE IS 27.9%
New York, New York -- July 29, 1997 -- The Bear Stearns Companies Inc.
(NYSE:BSC) today announced record earnings for the company's 1997 fiscal year.
Earnings per share for fiscal 1997 increased 28.4% to $4.20, versus
$3.27 last year. Net income for the fiscal year ended June 30, 1997 increased
25.0% to $613.3 million, from $490.6 million earned during the twelve months
ended June 30, 1996. Revenues, net of interest expense, for the fiscal year
ended June 30, 1997 were $3.5 billion, versus $3.0 billion last year.
Net income for the fourth quarter ended June 30, 1997 was $162.9
million, or $1.15 per share, compared to $162.8 million, or $1.13 per share,
reported for the comparable quarter last year. Revenues, net of interest
expense, for the fourth quarter of fiscal 1997 were $962.6 million, versus
$885.3 million for the fourth quarter a year ago. Commissions and principal
transactions revenues reached new highs for the fourth fiscal quarter of 1997.
"Having surpassed fiscal 1996's record earnings, we are extremely
pleased with the results for the fourth quarter and the 1997 fiscal year. Our
efforts culminated in solid contributions by all of Bear Stearns' major
businesses," said President and Chief Executive Officer James E. Cayne. "We
continued to make strategic hires throughout the year in investment banking and
equity research to further the firm's advisory, financing, and distribution
capabilities. We are very proud of Bear Stearns' leading roles in two recently
announced high-profile mergers -- HFS Inc. with CUC International Inc. and
Lockheed Martin Corp. with Northrop Grumman Corp. In addition, the firm's role
as advisor in the announced acquisition of Long Island Lighting Company by New
York State's Long Island Power Authority solidifies our reputation for providing
customized solutions to our public finance clients."
"Bear Stearns continued to expand its equity and fixed income
capabilities with a particular emphasis on global distribution. During the
fourth quarter we acted as lead manager on the $2.5 billion asset-backed
offering of Sallie Mae and as joint lead manager on the initial public offering
for Beijing Yanhua Petrochemical Company Limited, both of which we distributed
globally. Notably, our international commissions increased significantly for
this fiscal year versus the 1996 fiscal year, as we continue to hire key
professionals in Europe and Asia. In addition, Bear Stearns retained its leading
position in mortgage-backed securities underwriting, ranking number one for the
first six months of 1997."
"Our correspondent clearing operation had another banner year with
record levels of customers, balances, and transactions. As a leader in clearance
domestically, we made international strides during the year by extending Bear
Stearns' securities lending expertise to Europe and Asia. In the correspondent
clearing survey just published by Global Custodian, Bear Stearns received honors
in seven of ten categories: international, execution, operations, reporting,
client service, financing, and securities lending."
Contributions were made by all areas of the firm and are reflected in
the performance for the fourth quarter and the fiscal year as follows
(comparisons are to prior year periods):
Principal transactions revenues increased 23.6% to $439.9 million for
the fourth quarter, attributable to strong performances in fixed income,
equities, and derivatives. Principal transactions revenues were up 26.8% to $1.6
billion for the fiscal year.
Due to very active equity markets, commission revenues rose 5.6% to
$195.4 million for the fourth quarter, and 6.7% to $732.3 million for the fiscal
year, reflecting solid contributions from our institutional and private client
salesforces, as well as from our clearing operation.
Investment banking revenues were up 9.2% to $663.2 million for the
fiscal year, but down 18.9% to $182.7 million for the fourth quarter. While
fourth quarter results reflected continued strength in mergers and acquisitions,
overall results were down from the record level set in the fourth quarter a year
ago.
Compensation as a percentage of net revenues for the fourth quarter
was 47.9% versus 48.0% reported for the year ago period, and 49.0% for the 1997
fiscal year versus 49.3% for the 1996 fiscal year.
Quarterly Cash Dividends Declared
The Board of Directors declared a regular quarterly cash dividend of 15
cents per share on the outstanding shares of common stock, payable on August 29,
1997 to shareholders of record on August 15, 1997. The board also declared a
quarterly cash dividend of 68 3/4 cents per share on the outstanding shares of
adjustable rate cumulative preferred stock, payable October 15, 1997 to
shareholders of record on September 30, 1997. In addition, the board declared a
quarterly cash dividend of $3.94 per share on the outstanding shares of 7.88%
cumulative preferred stock, which is equivalent to 49 1/4 cents per related
depositary share, and a quarterly cash dividend of $3.80 per share on the
outstanding shares of 7.60% cumulative preferred stock, which is equivalent to
47 1/2 cents per related depositary share, both payable October 15, 1997 to
shareholders of record on September 30, 1997.
The Bear Stearns Companies Inc. is the parent company of Bear, Stearns
& Co. Inc., a leading investment banking and securities trading and brokerage
firm serving governments, corporations, institutions, and individuals worldwide.
The company's business includes corporate finance and mergers and acquisitions,
institutional equities and fixed income sales and trading, private client
services, derivatives, foreign exchange and futures sales and trading, asset
management, and custody services. Through Bear, Stearns Securities Corp., it
offers professional and correspondent clearing, including securities lending.
Headquartered in New York City, the company has over 8,000 employees located in
domestic offices in Atlanta, Boston, Chicago, Dallas, Los Angeles, and San
Francisco; and an international presence in Beijing, Buenos Aires, Dublin,
Geneva, Hong Kong, London, Lugano, Paris, Sao Paulo, Shanghai, Singapore, and
Tokyo. As of June 30, 1997, total capital, including stockholders' equity and
long-term borrowings, was $11.7 billion. Book value as of June 30, 1997 was
$19.56 per share, based on 151,561,465 shares outstanding.
Financial Statements Attached
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<TABLE>
THE BEAR STEARNS COMPANIES INC.
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
Three Months Ended Fiscal Year Ended
(Unaudited) (Unaudited)
-------------------------------------- ---------------------------------------
June 30, June 30, June 30, June 30,
1997 1996 (1) 1997 1996 (1)
---------------- ---------------- ---------------- ----------------
(In thousands, except per share data)
<S> <C> <C> <C> <C>
Revenues
Commissions $ 195,372 $ 184,956 $ 732,343 $ 686,548
Principal transactions 439,865 355,869 1,571,332 1,239,697
Investment banking 182,711 225,179 663,249 607,338
Interest and dividends 939,900 627,508 3,058,452 2,393,266
Other income 15,446 9,858 51,902 37,014
---------------- ---------------- ---------------- ----------------
Total Revenues 1,773,294 1,403,370 6,077,278 4,963,863
Interest expense 810,663 518,069 2,551,364 1,981,171
---------------- ---------------- ---------------- ----------------
Revenues, net of interest expense 962,631 885,301 3,525,914 2,982,692
---------------- ---------------- ---------------- ----------------
Expenses
Employee compensation and benefits 461,138 424,582 1,726,931 1,469,448
Floor brokerage, exchange
and clearance fees 38,611 33,515 141,211 129,509
Communications 27,507 24,773 102,926 92,827
Occupancy 22,470 21,811 88,419 85,899
Depreciation and amortization 25,768 18,760 89,719 69,878
Advertising and market development 22,436 15,965 69,765 56,797
Data processing and equipment 10,840 8,059 36,620 34,305
Other expenses 85,018 62,016 256,633 209,103
---------------- ---------------- ---------------- ----------------
Total expenses 693,788 609,481 2,512,224 2,147,766
---------------- ---------------- ---------------- ----------------
Income before provision for
income taxes 268,843 275,820 1,013,690 834,926
Provision for income taxes 105,955 113,055 400,360 344,288
---------------- ---------------- ---------------- ----------------
Net income $ 162,888 $ 162,765 $ 613,330 $ 490,638
================ ================ ================ ================
Net income applicable to
common shares $ 156,954 $ 156,729 $ 589,497 $ 466,145
================ ================ ================ ================
Earnings per share (1) $ 1.15 $ 1.13 $ 4.20 $ 3.27
================ ================ ================ ================
Weighted average common and
common equivalent shares
outstanding (1) 144,842,307 145,409,321 147,847,885 148,855,048
================ ================ ================ ================
Cash dividends declared
per common share $ 0.15 $ 0.15 $ 0.60 $ 0.60
================ ================ ================ ================
(1) Adjusted for all 5% stock dividends.
</TABLE>
<PAGE>
<TABLE>
THE BEAR STEARNS COMPANIES INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended
--------------------------------------------
June 30, March 27,
1997 1997
------------------- --------------------
(In thousands, except per share data)
<S> <C> <C>
Revenues
Commissions $ 195,372 $ 191,817
Principal transactions 439,865 407,336
Investment banking 182,711 188,706
Interest and dividends 939,900 712,685
Other income 15,446 10,757
-------------------- -------------------
Total Revenues 1,773,294 1,511,301
Interest expense 810,663 576,836
-------------------- -------------------
Revenues, net of interest expense 962,631 934,465
-------------------- -------------------
Expenses
Employee compensation and benefits 461,138 464,596
Floor brokerage, exchange
and clearance fees 38,611 36,587
Communications 27,507 26,085
Occupancy 22,470 22,658
Depreciation and amortization 25,768 22,533
Advertising and market development 22,436 15,890
Data processing and equipment 10,840 10,019
Other expenses 85,018 60,322
-------------------- -------------------
Total expenses 693,788 658,690
-------------------- -------------------
Income before provision for
income taxes 268,843 275,775
Provision for income taxes 105,955 110,294
-------------------- -------------------
Net income $ 162,888 $ 165,481
==================== ===================
Net income applicable to
common shares $ 156,954 $ 159,552
==================== ===================
Earnings per share $ 1.15 $ 1.14
==================== ===================
Weighted average common and
common equivalent shares
outstanding 144,842,307 146,932,199
==================== ===================
Cash dividends declared
per common share $ 0.15 $ 0.15
==================== ===================
</TABLE>
