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) January 19, 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)
<PAGE>
Item 5. Other Events.
Filed herewith is a copy of The Bear Stearns Companies Inc. ( the "Company")
Press Release, dated January 19, 1999, announcing its earnings for the three and
six months ended December 31, 1998 which includes the Unaudited Consolidated
Statements of Income for the three and six months ended December 31, 1998 and
December 31, 1997, and the three months ended September 25, 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 January 19, 1999.
<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/ Marshall J Levinson
Marshall J Levinson
Controller and Assistant Secretary
(Principal Accounting Officer)
Dated: January 22, 1999
<PAGE>
THE BEAR STEARNS COMPANIES INC.
FORM 8-K
CURRENT REPORT
EXHIBIT INDEX
Exhibit No. Description
(99) Press Release, dated January 19, 1999
For Immediate Release
Contact: Hannah Burns (212) 272-2395
Maura Gaenzle (212) 272-4445
Ellen Glickman (212) 272-8188
THE BEAR STEARNS COMPANIES INC.
REPORTS RESULTS FOR
SECOND QUARTER OF FISCAL YEAR 1999
NEW YORK, January 19, 1999 -- The Bear Stearns Companies Inc. (NYSE: BSC) today
announced earnings for the company's second fiscal quarter ended December 31,
1998.
Net income for the second quarter of fiscal year 1999 was $135.9
million, or 88 cents per share, a 15.2% decrease in net income from $160.2
million, or $1.11 per share, for the comparable quarter last year. The
annualized return on common equity for the quarter was 14.6%.
Net income for the first six months of fiscal year 1999 was $200.0
million, or $1.28 per share, a 37.9% decrease in net income from $321.8 million,
or $2.22 per share, for the comparable period a year ago. The annualized return
on common equity for the six months ended December 31, 1998 was 10.7%.
Revenues, net of interest expense, for the quarter ended December 31,
1998 were $1.0 billion, a 4.9% decrease from $1.1 billion reported in the
comparable quarter a year ago. For the six months ended December 31, 1998,
revenues, net of interest expense, were $1.8 billion, a 14.9% decrease from $2.1
billion reported in the same period last year.
Commenting on the results, President and Chief Executive Officer James
E. Cayne said, "In light of the very difficult business environment in the early
Fall, we are pleased with the results for the firm's second quarter. We are
particularly pleased that principal transactions revenues were up more than 7%
from a year ago, reflecting an increase in customer activity, as well as our
ongoing focus on risk management. In addition, our clearing business continued
to be a significant and consistent contributor to the firm's results."
"Improved market conditions, together with our continuing focus on
meeting the needs of our clients, had a direct positive impact on our trading
and underwriting activities during the quarter. We assisted a number of clients
in raising capital, including our roles as joint-lead manager on the $4.8
billion global note offering for Associates Corporation of North America, lead
manager on the $1.3 billion note offering for Chrysler Financial Corporation,
lead manager on the $800 million secondary equity offering for Federal-Mogul and
joint-lead manager on the $340 million follow-on equity offering for Young &
Rubicam. In addition, we represented McKesson Corp. on its $14.5 billion
acquisition of HBO & Co."
A brief summary of selected components of results of operations for
the second quarter of fiscal year 1999 compared to the prior year
period follows:
Commission revenues rose 10.5% to $254.7 million, reflecting increased
institutional, clearing and private client services customer activities.
Principal transactions revenues were $419.0 million, up 7.3%, attributable to
stronger mortgage-backed, government and over-the-counter trading, as well as
increased derivatives and arbitrage activities.
Investment banking revenues were $163.7 million, down 41.3%, primarily
reflecting a more difficult underwriting environment and a decline in the firm's
mergers and acquisitions activity.
Net interest revenues were $156.7 million, a 3.2% decline, due to lower average
customer margin balances.
Compensation as a percentage of net revenues was 54.1% versus 49.9%.
As of December 31, 1998 total capital, including stockholders' equity
and long-term borrowings, was $18.9 billion. Book value as of December 31, 1998
was $24.87 per share, based on 151,639,932 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 9,500 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" in the company's 1998 Annual Report to
Shareholders and its Form 10-K, and in the company's Quarterly Reports on Form
10-Q which have been filed with the Securities and Exchange Commission.
<PAGE>
<TABLE>
THE BEAR STEARNS COMPANIES INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended Six Months Ended
------------------------------------- ---------------------------------------
December 31, December 31, December 31, December 31,
1998 1997 1998 1997
--------------- ---------------- ---------------- -----------------
(In thousands, except share data)
<S> <C> <C> <C> <C>
Revenues
Commissions $ 254,676 $ 230,496 $ 495,476 $ 443,940
Principal transactions 419,002 390,512 616,051 782,026
Investment banking 163,664 278,884 285,440 498,212
Interest and dividends 1,138,680 1,081,298 2,286,519 2,045,869
Other income 26,705 11,877 42,845 36,025
------------------ ---------------- ---------------- -----------------
Total Revenues 2,002,727 1,993,067 3,726,331 3,806,072
Interest expense 981,935 919,304 1,964,638 1,736,219
------------------ ---------------- ---------------- -----------------
Revenues, net of interest expense 1,020,792 1,073,763 1,761,693 2,069,853
------------------ ---------------- ---------------- -----------------
Expenses
Employee compensation and benefits 552,344 535,793 958,225 1,034,990
Floor brokerage, exchange
and clearance fees 41,375 43,522 83,439 83,107
Communications 36,362 28,824 69,457 56,957
Depreciation and amortization 32,758 27,427 65,152 53,444
Occupancy 25,923 25,387 51,811 48,933
Advertising and market development 23,854 20,057 46,892 36,011
Data processing and equipment 15,293 12,460 26,278 24,694
Other expenses 85,405 120,688 159,652 204,974
------------------ ---------------- ---------------- -----------------
Total expenses 813,314 814,158 1,460,906 1,543,110
------------------ ---------------- ---------------- -----------------
Income before provision for
income taxes 207,478 259,605 300,787 526,743
Provision for income taxes 71,558 99,383 100,764 204,903
------------------ ---------------- ---------------- -----------------
Net income $ 135,920 $ 160,222 $ 200,023 $ 321,840
================== ================ ================ =================
Net income applicable to
common shares $ 126,142 $ 154,299 $ 180,150 $ 309,991
================== ================ ================ =================
Earnings per share $ 0.88 $ 1.11 $ 1.28 $ 2.22
================= ================ ================ =================
Weighted average common and
common equivalent shares
outstanding 150,814,949 152,312,886 151,414,787 152,757,258
================== ================ ================ =================
Cash dividends declared
per common share $ 0.15 $ 0.15 $ 0.30 $ 0.30
================== ================ ================ =================
</TABLE>
<PAGE>
<TABLE>
THE BEAR STEARNS COMPANIES INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended
--------------------------------------------
December 31, September 25,
1998 1998
------------------ ---------------------
(In thousands, except share data)
<S> <C> <C>
Revenues
Commissions $ 254,676 $ 240,800
Principal transactions 419,002 197,049
Investment banking 163,664 121,776
Interest and dividends 1,138,680 1,147,839
Other income 26,705 16,140
--------------------- ---------------------
Total Revenues 2,002,727 1,723,604
Interest expense 981,935 982,703
--------------------- ---------------------
Revenues, net of interest expense 1,020,792 740,901
--------------------- ---------------------
Expenses
Employee compensation and benefits 552,344 405,881
Floor brokerage, exchange
and clearance fees 41,375 42,064
Communications 36,362 33,095
Depreciation and amortization 32,758 32,394
Occupancy 25,923 25,888
Advertising and market development 23,854 23,038
Data processing and equipment 15,293 10,985
Other expenses 85,405 74,247
--------------------- ---------------------
Total expenses 813,314 647,592
--------------------- ---------------------
Income before provision for
income taxes 207,478 93,309
Provision for income taxes 71,558 29,206
--------------------- ---------------------
Net income $ 135,920 $ 64,103
===================== =====================
Net income applicable to
common shares $ 126,142 $ 54,008
===================== =====================
Earnings per share $ 0.88 $ 0.40
===================== =====================
Weighted average common and
common equivalent shares
outstanding 150,814,949 152,084,654
===================== =====================
Cash dividends declared
per common share $ 0.15 $ 0.15
===================== =====================
</TABLE>
