SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15 (d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 12, 1999
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)
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Item 5. Other Events.
Filed herewith is a copy of The Bear Stearns Companies Inc.'s (the "Company")
Press Release, dated April 12, 1999, announcing its earnings for the three and
nine months ended March 26, 1999 which includes the Unaudited Consolidated
Statements of Income for the Company for the three and nine months ended March
26, 1999 and March 27, 1998, and the three months ended December 31, 1998. 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 April 12, 1999.
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Signature
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/ Marshall J Levinson
Marshall J Levinson
Controller and Assistant Secretary
(Principal Accounting Officer)
Dated: April 12, 1999
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THE BEAR STEARNS COMPANIES INC.
FORM 8-K
CURRENT REPORT
EXHIBIT INDEX
Exhibit No. Description
(99) Press Release, dated April 12, 1999
For Immediate Release
Contacts: Hannah Burns (212) 272-2395
Maura Gaenzle (212) 272-4445
Ellen Glickman (212) 272-8188
THE BEAR STEARNS COMPANIES INC.
REPORTS RECORD
THIRD QUARTER EARNINGS
Net income up 23%; ROE at 23.7%
NEW YORK, April 12, 1999 -- The Bear Stearns Companies Inc. (NYSE: BSC) today
announced record earnings for the company's third fiscal quarter ended March 26,
1999.
Net income for the third quarter of fiscal year 1999 was $204.0
million, or $1.42 per share, a 22.6% increase in net income from $166.3 million,
or $1.09 per share, for the comparable quarter last year. The annualized return
on common stockholders' equity for the quarter was 23.7% compared to 21.4% for
the third quarter of fiscal year 1998.
Net income for the first nine months of fiscal year 1999 was $404.0
million, or $2.63 per share, a 17.2% decrease in net income from $488.2 million,
or $3.21 per share, for the comparable period a year ago. The annualized return
on common stockholders' equity for the nine months ended March 26, 1999 was
15.1% compared to 21.8% for the same period last year.
Revenues, net of interest expense, for the quarter ended March 26, 1999 were
$1.23 billion, a 17.1% increase from $1.05 billion for the comparable quarter a
year ago. For the nine months ended March 26, 1999, revenues, net of interest
expense, were $2.99 billion, a 4.1% decrease from $3.12 billion a year ago.
President and Chief Executive Officer James E. Cayne commented on the
record earnings, "Bear Stearns had a strong quarter, performing exceptionally
well in all of its major businesses. With the continued rebound in the markets
and our client-driven approach to running our franchise, we were able to far
surpass the earnings reported for the first and second quarters of this fiscal
year, as well as the year ago period. Extremely active markets led to increased
customer order flow, coupled with higher levels of new securities issuance, and
resulted in our outstanding results. The significant contribution by our
clearing business during the quarter also reflected the heightened customer
activity."
"Equity and fixed income underwriting was very strong during the
quarter. The success of the firm's underwriting capability reflects the ongoing
effort to link our in-depth understanding of investors' needs with innovative
financing solutions for our corporate customers. We were very active in
mortgage-backed and asset-backed underwriting during the quarter, reflecting our
long-standing leadership position in these markets."
He added, "In one of the most active sectors in the equity markets, we
were lead manager on a number of offerings for Internet-related companies. We
acted as lead manager on initial public offerings for Covad Communications
Group, Inc., miningco.com and Prodigy Communications Corporation, and lead
managed follow-on offerings for Net.B@nk, Inc. and Concentric Network
Corporation. In fixed income we were a leader in the issuance of large corporate
investment grade, global offerings during the quarter, including: joint-lead
manager on the $2.8 billion and $2 billion global note offerings for Ford Motor
Credit Company; joint-lead manager on the $1.36 billion global offering for
Lucent Technologies Inc.; and joint-lead manager and global coordinator on the
$2.1 billion global offering for General Motors Acceptance Corporation."
A brief summary of selected components of operations for the third quarter
of fiscal year 1999 compared to the prior year period follows:
Commission revenues rose 8.4% to $245.1 million, attributable to active
markets and institutional, private client and clearing client activity.
Principal transactions revenues reached a record $600.3 million, up 32.6%,
reflecting increased customer order flow and new issue activity.
Investment banking revenues were $229.0 million, an increase of 16.0%,
primarily due to the increase in our underwriting business.
Net interest revenues decreased 12.5% to $139.8 million.
Employee compensation as a percentage of net revenues was 48.3% versus
48.9%. For the nine months ended March 26, 1999, employee compensation as a
percentage of net revenues was 51.9% compared to 49.6% for the nine-month
period a year ago.
As of March 26, 1999, total capital, including stockholders' equity and
long-term borrowings, was $19.3 billion. Book value as of March 26, 1999 was
$24.81 per share, based on 159,298,597 shares outstanding.
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 approximately 9,600 employees
located in domestic offices in Atlanta, Boston, Chicago, Dallas, Los Angeles and
San Francisco; and an international presence in Beijing, Buenos Aires, Dublin,
Hong Kong, London, Lugano, Sao Paulo, Shanghai, Singapore and Tokyo. For
additional information about Bear Stearns, please visit our website at
http://www.bearstearns.com.
***
Financial Statements Attached
For a discussion of the risks and uncertainties that may affect the company's
future results, please see "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Risk Management" in the company's 1998
Annual Report to Shareholders and its Form 10-K, and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and "Quantitative
and Qualitative Disclosures about Market Risk" in the company's Quarterly
Reports on Form 10-Q which have been filed with the Securities and Exchange
Commission.
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<TABLE>
THE BEAR STEARNS COMPANIES INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended Nine Months Ended
March 26, March 27, March 26, March 27,
1999 1998 1999 1998
(In thousands, except share data)
<S> <C> <C> <C> <C>
Revenues
Commissions $ 245,131 $ 226,067 $ 740,607 $ 670,007
Principal transactions 600,310 452,742 1,216,361 1,234,768
Investment banking 228,960 197,407 514,400 695,619
Interest and dividends 714,602 1,037,202 3,001,121 3,083,071
Other income 15,884 14,203 58,729 50,228
Total Revenues 1,804,887 1,927,621 5,531,218 5,733,693
Interest expense 574,764 877,392 2,539,402 2,613,611
Revenues, net of interest expense 1,230,123 1,050,229 2,991,816 3,120,082
Expenses
Employee compensation and benefits 594,694 513,254 1,552,919 1,548,244
Floor brokerage, exchange
and clearance fees 35,958 40,975 119,397 124,082
Communications 35,791 31,898 105,248 88,855
Depreciation and amortization 33,136 29,375 98,288 82,819
Occupancy 28,515 25,962 80,326 74,895
Advertising and market development 22,959 22,680 69,851 58,691
Data processing and equipment 17,954 11,919 44,232 36,613
Other expenses 128,185 108,443 287,837 313,417
Total expenses 897,192 784,506 2,358,098 2,327,616
Income before provision for
income taxes 332,931 265,723 633,718 792,466
Provision for income taxes 128,959 99,404 229,723 304,307
Net income $ 203,972 $ 166,319 $ 403,995 $ 488,159
Net income applicable to
common shares $ 194,194 $ 157,193 $ 374,344 $ 467,184
Earnings per share $ 1.42 $ 1.09 (1) $ 2.63 (1) $ 3.21 (1)
Weighted average common and
common equivalent shares
outstanding 156,709,359 157,588,766 (1) 158,239,443 (1) 159,494,441 (1)
Cash dividends declared
per common share $ 0.15 $ 0.14 (1) $ 0.44 (1) $ 0.43 (1)
(1) Adjusted for the 5% stock dividend declared January 20, 1999.
</TABLE>
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<TABLE>
THE BEAR STEARNS COMPANIES INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended
March 26, December 31,
1999 1998
(In thousands, except share data)
<S> <C> <C>
Revenues
Commissions $ 245,131 $ 254,676
Principal transactions 600,310 419,002
Investment banking 228,960 163,664
Interest and dividends 714,602 1,138,680
Other income 15,884 26,705
Total Revenues 1,804,887 2,002,727
Interest expense 574,764 981,935
Revenues, net of interest expense 1,230,123 1,020,792
Expenses
Employee compensation and benefits 594,694 552,344
Floor brokerage, exchange
and clearance fees 35,958 41,375
Communications 35,791 36,362
Depreciation and amortization 33,136 32,758
Occupancy 28,515 25,923
Advertising and market development 22,959 23,854
Data processing and equipment 17,954 15,293
Other expenses 128,185 85,405
Total expenses 897,192 813,314
Income before provision for
income taxes 332,931 207,478
Provision for income taxes 128,959 71,558
Net income $ 203,972 $ 135,920
Net income applicable to
common shares $ 194,194 $ 126,142
Earnings per share $ 1.42 $ 0.84 (1)
Weighted average common and
common equivalent shares
outstanding 156,709,359 158,355,696 (1)
Cash dividends declared
per common share $ 0.15 $ 0.14 (1)
(1) Adjusted for the 5% stock dividend declared January 20, 1999.
</TABLE>
