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, 2000
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, 2000, announcing its earnings for the Company
for the three months ended December 31, 1999 which includes the Unaudited
Consolidated Statements of Income for the Company for the three and six months
ended December 31, 1999 and December 31, 1998, and the three months ended
September 24, 1999. 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, 2000.
Item 8. Change in Fiscal Year
On January 18, 2000, the Board of Directors of the Company approved the change
in its fiscal year end to November 30 from June 30. Accordingly, the Company's
2000 fiscal year will end on November 30, 2000 and its first quarter will cover
the three-month period ending February 25, 2000. The Company intends to file a
report covering the five-month transition period of July 1, 1999 through
November 26, 1999 on Form 10-Q.
<PAGE>
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
(Principal Accounting Officer)
Dated: January 19, 2000
<PAGE>
THE BEAR STEARNS COMPANIES INC.
FORM 8-K
CURRENT REPORT
EXHIBIT INDEX
Exhibit No. Description
(99) Press Release, dated January 19, 2000
For Immediate Release
Contact: Hannah Burns (212) 272-2395
Rebecca Haas (212) 272-8188
THE BEAR STEARNS COMPANIES INC.
REPORTS SECOND FISCAL QUARTER RESULTS;
ANNOUNCES CHANGE IN FISCAL YEAR END TO NOVEMBER 30;
AUTHORIZES $500 MILLION SHARE REPURCHASE PROGRAM
NEW YORK - January 19, 2000 -- The Bear Stearns Companies Inc. (NYSE:BSC) today
announced earnings for the company's second fiscal quarter ended December 31,
1999.
Net income for the second quarter of fiscal year 2000 was $245.1
million, an increase of 80.3% from $135.9 million reported for the comparable
quarter last year. Earnings per share for the second quarter increased 105% to
$1.64 from $0.80 reported for the prior year's second quarter. Revenues, net of
interest expense, for the quarter ended December 31, 1999 were $1.4 billion, a
39.7% increase from $1.0 billion for the comparable quarter a year ago. The
annualized after-tax return on common stockholders' equity for the quarter ended
December 31, 1999 was 24.7%, and for the trailing 12-month period ended December
31, 1999 was 23.1%.
Commenting on the quarter, James E. Cayne, president and chief
executive officer, said, "We are extremely pleased with the performances of our
core businesses during the quarter. Our equity underwriting activities were at
record levels as robust equity markets contributed to an abundant deal flow. The
month of November was particularly strong for equity IPOs, driven by a few
blockbuster offerings including the $3.2 billion IPO for Charter Communications,
and the $2.0 billion follow-on global offering for China Telecom, both of which
Bear Stearns served as joint-lead manager. On the advisory side, we are
currently advising Warner-Lambert and Pharmacia & Upjohn on their announced
mergers. Institutional equity commission revenues were very strong, driven by
exceptional trading volumes in the US equity markets. Our fixed income
activities achieved solid performances across product lines, despite rising
interest rates."
"Our franchise in global clearing services remains at the forefront in
the industry. Robust equity markets during the quarter contributed to customer
margin balances growing to a record $56 billion. We continue to see growth in
the size and activity of our existing clearance accounts. In addition, we are
benefiting from a steady increase in the number of new fully disclosed and prime
brokerage clients worldwide. We continue to make significant investments in
ClearnetTM, our online capability for correspondents, in order to enhance the
level of service we provide and to maintain our position as the premier service
provider in the clearing business."
A brief summary of selected components of the results of operations for
the second quarter ended December 31, 1999, compared to the prior year period,
is as follows:
o Commission revenues were up 17.0% to a record $297.9 million, primarily
attributable to strong performances in clearance and institutional
commissions, resulting from favorable market conditions and a significant
customer order flow.
o Investment banking revenues were $273.2 million, up 66.9%, reflecting
record levels of equity underwriting revenues, particularly IPOs, as well
as an increase in mergers and acquisitions revenues.
o Principal transactions revenues increased 44.7% to $606.3 million. The
increase was primarily attributable to increases in equity and fixed income
derivative revenues, reflecting the continued expansion of this franchise.
Revenues attributable to equities activities rose as a result of an
increase in the domestic and international equity business. Revenues
attributable to fixed income activities also increased, reflecting more
stable market conditions.
o Net interest revenues were $189.0 million, an increase of 20.6%, due to a
significant growth in customer margin balances, which at December 31, 1999,
were at record levels of $56 billion.
o Other income was $59.4 million, up 122.6%, reflecting the steadily
increasing level of asset management revenues, particularly revenues from
alternative investment products. Assets from alternative investment
products grew 100% to $2.2 billion under management at December 31, 1999
from $1.1 billion at December 31, 1998.
o Compensation as a percentage of net revenues was 47.3% versus 54.1%,for the
quarter ended December 1999 and December 1998, respectively.
As of December 31, 1999 total capital, including stockholders' equity
and long-term borrowings, was $22.2 billion. Book value as of December 31, 1999
was $27.49 per share, based on 163,904,102 shares outstanding.
Change in Fiscal Year-End
The Company announced that its Board of Directors approved a change
in its fiscal year-end to November 30 from June 30. Accordingly, the company's
2000 fiscal year will end on November 30, 2000 and its first quarter will cover
the three-month period ending February 25, 2000. Commenting on the decision Mr.
Cayne said, "We believe that changing our fiscal year to more closely match
those of our industry peers will put us on an equal footing in terms of
shareholder and investor communication and employee compensation. The decision
to move to a November year-end also reflects our objective of completing our
year-end compensation process prior to the holiday season."
Share Repurchase Program Authorized
Separately, the Board approved a $500 million stock repurchase program.
The share repurchase program will be utilized primarily to acquire shares of
common stock in order to mitigate the dilutive effect of the company's stock
award plan. Fiscal year to date, the company acquired approximately $140 million
under a prior authorization. The shares acquired under this repurchase
authorization are in addition to shares purchased for the Capital Accumulation
Plan. The purchases under the newly approved $500 million program may be made
periodically in 2000 or beyond in the open market or through privately
negotiated transactions.
Quarterly Cash Dividends Declared
The Board of Directors declared a regular quarterly cash dividend of 15
cents per share on the outstanding shares of the company's common stock, payable
February 25, 2000 to stockholders of record on February 11, 2000. The Board also
declared a quarterly cash dividend of 68.75 cents per share on the outstanding
shares of Adjustable Rate Cumulative Preferred Stock, Series A, payable April
15, 2000 to stockholders of record on March 31, 2000. In addition, other regular
dividends declared by the Board of Directors include: (i) a cash dividend of
$3.075 per share on the outstanding shares of 6.15% Cumulative Preferred Stock,
Series E, which is equivalent to 76.875 cents per related depositary share; (ii)
a cash dividend of $2.86 per share on the outstanding shares of 5.72% Cumulative
Preferred Stock, Series F, which is equivalent to 71.50 cents per related
depositary share; and (iii) a cash dividend of $2.745 per share on the
outstanding shares of 5.49% Cumulative Preferred Stock, Series G, which is
equivalent to 68.625 cents per related depositary share, all payable April 15,
2000 to stockholders of record on March 31, 2000.
Founded in 1923, 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 10,100 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, Puerto Rico, Sao
Paulo, Shanghai, Singapore and Tokyo.
***
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 1999
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.
<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,
1999 1998 (1) 1999 1998 (1)
------------- -------------- ------------ ----------------
(In thousands, except share data)
<S> <C> <C> <C> <C>
Revenues
Commissions $ 297,859 $ 254,676 $ 526,391 $ 495,476
Principal transactions 606,261 419,002 968,467 616,051
Investment banking 273,164 163,664 535,694 285,440
Interest and dividends 1,302,362 1,068,680 2,316,274 2,173,519
Other income 59,439 26,705 82,667 42,845
------------- -------------- ------------ ------------
Total Revenues 2,539,085 1,932,727 4,429,493 3,613,331
Interest expense 1,113,399 911,935 1,957,794 1,851,638
------------- -------------- ------------ ------------
Revenues, net of interest expense 1,425,686 1,020,792 2,471,699 1,761,693
------------- -------------- ------------ ------------
Non-interest expenses
Employee compensation and benefits 673,740 552,344 1,190,133 958,225
Floor brokerage, exchange
and clearance fees 41,455 41,375 77,353 83,439
Communications 39,940 36,362 77,633 69,457
Depreciation and amortization 38,000 32,758 75,422 65,152
Occupancy 28,515 25,923 55,430 51,811
Advertising and market development 24,797 23,854 49,983 46,892
Data processing and equipment 29,002 15,293 49,487 26,278
Other expenses 160,205 85,405 256,649 159,652
------------- -------------- ------------ ------------
Total non-interest expenses 1,035,654 813,314 1,832,090 1,460,906
------------- -------------- ------------ ------------
Income before provision for
income taxes 390,032 207,478 639,609 300,787
Provision for income taxes 144,935 71,558 236,655 100,764
------------- -------------- ------------ ------------
Net income $ 245,097 $ 135,920 $ 402,954 $ 200,023
============= ============== ============ ============
Net income applicable to
common shares $ 235,319 $ 126,142 $ 383,398 $ 180,150
============= ============== ============ ============
Earnings per share $ 1.64 $ 0.80 (2) $ 2.58 $ 1.16 (2)
============= ============== ============ ============
Weighted average common and
common equivalent shares
outstanding 161,852,191 166,273,480 (2) 164,423,424 166,934,802 (2)
============= ============== ============ ============
Cash dividends declared
per common share $ 0.15 $ 0.14 (2) $ 0.29 $ 0.27 (2)
============= ============== ============ ============
(1) Certain amounts have been reclassified to conform to the current period's presentation.
(2) Adjusted for all stock dividends declared through October 29, 1999.
</TABLE>
<PAGE>
<TABLE>
THE BEAR STEARNS COMPANIES INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Three-Months Ended
-------------------------------------
December 31, September 24,
1999 1999
---------------- ------------------
(In thousands, except share data)
<S> <C> <C>
Revenues
Commissions $ 297,859 $ 228,532
Principal transactions 606,261 362,206
Investment banking 273,164 262,530
Interest and dividends 1,302,362 1,013,912
Other income 59,439 23,228
---------------- ------------------
Total Revenues 2,539,085 1,890,408
Interest expense 1,113,399 844,395
---------------- ------------------
Revenues, net of interest expense 1,425,686 1,046,013
---------------- ------------------
Non-interest expenses
Employee compensation and benefits 673,740 516,393
Floor brokerage, exchange
and clearance fees 41,455 35,898
Communications 39,940 37,683
Depreciation and amortization 38,000 37,422
Occupancy 28,515 26,915
Advertising and market development 24,797 25,186
Data processing and equipment 29,002 20,485
Other expenses 160,205 96,454
---------------- ------------------
Total non-interest expenses 1,035,654 796,436
---------------- ------------------
Income before provision for
income taxes 390,032 249,577
Provision for income taxes 144,935 91,720
---------------- ------------------
Net income $ 245,097 $ 157,857
================ ==================
Net income applicable to
common shares $ 235,319 $ 148,079
================ ==================
Earnings per share $ 1.64 $ 0.95 (1)
================ ==================
Weighted average common and
common equivalent shares
outstanding 161,852,191 167,383,814 (1)
================ ==================
Cash dividends declared
per common share $ 0.15 $ 0.14 (1)
================ ==================
(1) Adjusted for all stock dividends declared through October 29, 1999.
</TABLE>
